|
Friday,
December 05, 2003 |
|
A boss can
enhance employee benefits
|
|
Brian W. Cruden
Brian@insurcorp.com
In today's turmoil of
rising costs of employee benefits, specifically in the core areas of health,
dental and vision insurance, employers are desperately reaching for
alternatives for their employees.
Most employers, both
large and small, have been "trimming" benefits to meet the budget
demands due to rising premium costs and employees are feeling the impact. In
today's world of employee benefits, the employee has mainly been experiencing
"take-aways."
These
"take-aways" include higher deductibles, higher co-payments,
increased co-insurance and most notably, employee's have been seeing increasing
deductions taken directly from their paychecks. This has been the trend for the
last few years and employee benefit packages are getting "thin," in
substance, at best. Further, employees are now contributing twice as much for
half the benefit compared to just a few years ago.
So, as an employer, what
else can you do
This is the question that
seems to be asked more frequently than any other regarding employee benefits.
The answer may be an alternative of offering voluntary products. This could be
the fastest growing "buzz word" with employee benefits amongst smart
business owners and their employees today.
Prudent and focused
employers have jumped on the bandwagon in enhancing their employee benefits
portfolio by offering voluntary products to their employee base. This has
happened so much that it not only increases the number of options and choices
for their employees, but also is an extreme perceived value which in turn
lessens the blow of the reduced core benefit reductions or "take
aways."
What are voluntary
products? They are products that are sponsored by the employer, offered to the
employee at the employee's cost, at substantially discounted rates. These
include, disability both short and long term, and life insurance both term and
permanent, accident or critical illness programs, dental and even vision
insurance programs to mention a few.
Traditionally, all of
these products are made available with minimal or no qualifying to the employee
and are significantly greater in benefit and substantially lower in cost than
what an employee would pay if they tried to obtain these coverages on their
own.
Cost to the employer is
minimal if not any at best. It is mostly the time and process of providing the
payroll deduction function on the employee's behalf. Traditionally there is no
contribution made by the employer. Mostly, as the employer, you are sponsoring
a significant benefit to your employees.
How effective are the
products with employees? Since the inception of the voluntary product industry,
most large employers have been offering these products for several years now.
Penetration by percentage of employee participation is sometimes greater than
80 percent.
Employees do view these
as a tremendous benefit and most importantly they understand that these
products are a function sponsored by their employer. As a result, the employer
has enhanced their employee product portfolio and has incurred no additional
costs. The employees, however, view these voluntary products as a great low
cost benefit to themselves and their families.
How does an employer find
out about offering voluntary products? The first step is to find a
knowledgeable consultant or broker that can direct the appropriate carriers and
products to best fit each employers needs. There are many companies offering
voluntary products and programs in today's marketplace, and it is possible for
an employer to select the wrong consultant or program.
Finding the right
consultant or broker will save time and aggravation as well. A good
consultant/broker will represent all of the products and carriers available and
will provide detailed comparisons and recommendations. Further, they also will
provide negotiating skills and services, which could result in lower rates and
higher levels of benefit.
Ultimately, this would
save the employer from having to request proposals from each individual company
respectively.
When initially selecting
a consultant/broker, find out how long they have been providing voluntary
consulting services. Ask which carriers they represent and ask for references
from some of their clients.
Since these products are paid
for by the employee, offering the wrong products could "back fire"
causing employee morale problems. Again, the right consultant/broker is key.
The bottom line is that
voluntary products and programs will enhance an employer's employee benefit
portfolio and should increase the levels of employee satisfaction.
Brian Cruden is
president of Insurcorp, one of the largest independent insurance consultant
companies in Nevada specializing in employee benefits, property and casualty
products and comprehensive financial planning. For more information call (702)
259-3850. Cruden has more than 22 years of experience in the health care and
insurance fields.