Small business owners know the cost of employee benefit plans has risen dramatically in recent years. However, even though it has become more expensive to keep employees covered, an independent broker who specializes in employee benefit plans can often save a company thousands of dollars and create value-added service. To maximize your company’s employee benefit dollars, consider the following tips:
Determine your company’s needs. A qualified, independent group specialist can work with you and your employees to identify which benefits offer the best value for your organization. It’s important to gather the necessary information through past claims experience, employee surveys and seminars.
Understand the types of coverage. Group insurance contains many components—life insurance; disability insurance; health, dental and vision coverage—and many of these categories also have several sub-categories. It’s crucial that both you and your employees understand the value of the various options. This will help control costs while maximizing the perceived value of the plan to employees.
Know the insurance company. Many group carriers price their products aggressively in an attempt to earn new business, but when it comes time to renew coverage, they’re just as quick to increase premiums. Other insurance companies prefer to avoid certain types of businesses and price their plans accordingly. Work with your broker to determine which insurance companies are receptive to your type of business and which companies have a hassle-free claims process.
Work with an independent employee benefits specialist. An independent specialist gives you the advantage of comparing the costs and benefits of many group insurance carriers, as opposed to a sales agent who is generally limited to promoting a single insurance carrier’s products. Look for an experienced group specialist with proper credentials who comes recommended and is trusted within the business community. Ask for references or testimonials from existing clients.
Regularly review your plan with your broker. Your employee benefit needs can change with plan usage and your company’s business cycle, but your broker can offer recommendations to address these issues. “Plans change and carriers come up with new ideas all the time, but a good broker should keep on top of these changes for you,” says Bob Vinal, owner of Bay Area Health Insurance Marketing, Inc. in Menlo Park. There are many steps you can take to contain your costs, including increasing your deductible to keep in line with inflation, implementing annual maximums on certain components of the plan and setting a cap on plan dispensing fees.
