Traditional benefits plans have changed so little over the years that many business owners don’t even realize that changing their plan is possible. Stagnant, overpriced benefits plans can cause employers to develop misconceptions about how to make their plan more efficient, resulting in uneducated or even unhappy employees and benefits plans with wasted potential.
Here are five of the most common misconceptions business owners have about their healthcare plans:
1. “The insurer has my best interests in mind.”
Just because an insurer is working with you doesn’t mean they’re working for you. Misaligned incentives are a common factor driving up health insurance costs for employers. Insurers make more money as your premiums go up, so there’s no real incentive for them to work to bring your costs down instead. Rather than trusting an insurer at their word, business owners should look for advisers who offer a performance guarantee. This ensures that your adviser only gets paid if they save you money, so you can trust that their promises to help you are backed by their own desire to get paid.
2. “If I provide a benefit, my employees perceive it as a benefit.”
A “great” benefits package is only going to offer great things for your business if it makes your employees happy, and your employees will only be happy with their benefits if they can afford to use them. In 2017, a survey from GoBankingRates found that 57 percent of Americans have less than $1,000 in savings. Even if they’re the only person relying on their insurance, they may still have a $3,000 deductible, putting them at risk for going into debt even if they have insurance. This benefits system creates a population of “functionally uninsured” people who have insurance, but can’t afford to use it.
Your adviser should work to go beyond simply making sure that your employees have health insurance – they should create a plan that enables your workers to actually be able to use the benefits they’re paying for without going bankrupt.
3. “I can’t improve the performance of a plan I already have.”
If your plan needs work, but you don’t want to fire your broker, you don’t have to stay stuck paying ever-increasing costs for the same benefits plan. Your adviser can work with your broker to find solutions that can help you save money while keeping your existing plan. By having your broker team up with your adviser, you get to keep your relationship with your broker while increasing the positive impact your plan can have on your company.
4. “Employee education isn’t necessary for a successful benefits plan.”
Just because you’re making a change that will benefit your employees doesn’t mean that your employees will understand how to use it. Many employers believe that if they explain a benefit just once, their employees will understand it and begin to correctly utilize it. The truth, though, is that employees need a comprehensive education about their plan to understand how they can get the most out of their benefits. Your adviser can work with you to develop a plan for proper and continuous employee education so that your workers never have to wonder if they’re using their plan the right way.
5. “I should only make changes to my plan when it’s time to renew.”
You don’t have to wait until your renewal to make changes, and in many cases, you and your employees may be better off if you don’t wait until the end of the year. When you discuss changes to your plan with your employees, a lot of information can get lost in all the noise of an annual renewal. This can result in your employees looking over the positive changes and focusing only on negative updates, such as end-of-the-year cost increases. When you make changes that aren’t associated with your renewal, though, your employees can develop a more positive view of the changes in their plan. By implementing new strategies and tools into your plan before your renewal, you facilitate your workers’ understanding of these changes while allowing them to see how these differences can positively affect them.
Many standards that are commonly accepted in traditional benefits plans are simply unnecessary (and often detrimental) for business owners. By rejecting these commonly held beliefs, you can open up your mind and business to a benefits plan that serves both your company and your employees better, improving the healthcare experience for everyone involved.
Contact us today to learn more about how you could be doing more with the benefits plan you have.
