Group benefits are a critical part of your compensation strategy. More importantly, the benefits you provide or don’t provide can affect your retention of key talent. Yet there are many options out there, and it can be hard to choose the right benefit plan for your employees. Here are four things to consider when picking a benefits plan.
The Total Price Tag
Employees want insurance with no premiums, but they’ll love benefits with low premiums. The difficulty is finding good group insurance plans that offer the coverage employees want at a great price.
For example, paying for alternative therapies may make employees happy, but they can cause significant price increases due to overuse. Furthermore, you need to find a plan that they can afford. Ensure that the plan is something employees can afford with or without an employer contribution. Typical plans will include strong medical coverage, some paramedical services, and 70-80 percent drug coverage.
What Your Employees Want
Before you choose an insurance plan, consider what your employees want. For example, most want dental care, while those with children often want orthodontic coverage.
Surveys show that basic dental coverage is good enough for eighty percent of your workforce. Your employees may want vision care or paramedical services, though a younger workforce prioritizes paramedical benefits and lifestyle benefits. In fact, Generation Y tends to max them out. Ask what they want and what types of coverage yield a high return on the investment, so that you can choose a benefits plan your employees appreciate.
What Employees Need
Needs and wants are often confused. For example, they know their kids need braces and they want to see an eye doctor for new glasses. However, they may not be considering the coverage they need.
For example, most employees ignore the possibility that they may need to go on long-term disability due to an injury or health problem. While having insurance coverage for massages is nice, physical therapy and other medical services are more important. And this coverage should extend to their entire family.
Compare the risks your employees face to the coverage you’re providing. Your benefits package should protect them and their families against the greatest threats they face. One benefit you should provide is basic life insurance. A standard level of coverage is life insurance equal to one year or more of their salary. It is common to give additional coverage in the case of accidental death and dismemberment.
Long-term disability should be part of every benefit plan because this is the only way most people can get guaranteed issue coverage. And when you’re on long-term disability for any reason, you need a reliable flow of money. Long term disability is crucial for firms with a lot of manual laborers.
You don’t want to sign up with a benefits provider that may not be in business in six months. Nor do you want to sign up with a firm that isn’t financially stable. You need to know that the costs and benefits themselves are sustainable for the foreseeable future. At the same time, you want to be with a firm that’s flexible, so that you can add or subtract benefits based on cost and demand.
Whether you’re shopping for a benefits plan or updating your existing benefits, take the right factors into account. Then you’ll have a benefits plan that attracts candidates and makes your employees love you without breaking your budget.