How to Construct the Perfect Employee Health Benefits Plan
One could argue that building an employee health benefits plan is like constructing a house. It requires a design, vision, and appropriate budget.
Since some 60% of employees report that benefits are a major factor when deciding whether or not to accept a job offer, it’s good practice to build a stellar employee benefits package. A competitive job market makes benefits all the more important.
If you think about employee health benefits like you would building a home, you can piece together a plan of action that puts you in the line of sight for well-qualified employees. And that’s precisely what we did.
Here’s How to Think About Your Employee Health Benefits Plan for Better Results
Planning the Design & Blueprints (Financial Planning)
Designers work with property owners to develop a strategic blueprint for the building. This design process starts with one discussion—the budget.
Your financial situation can change from year to year, so opting for high-end employee health packages can come back to bite you if there is a downturn in your market.
The best route to go is to analyze what your business can comfortably handle in terms of benefits. Meet with your HR department to ensure your numbers match what you’d like to do.
Determine an estimate of how many employees the package will be applicable to. Analyze the cost to benefit ratio of your benefits package as well. Who will benefit from your package? What value do they offer your company?
Just like when building a home you have to plan your budget far into the future and with unexpected challenges in mind, you must do the same with your employee’s health benefits package.
Laying the Foundation (Doing Research)
Before you can frame a home you must first lay down a solid foundation. The same is true of an employee benefits package. To lay that foundation you have to do research.
For example, when asked what benefits they valued the most, 88% of job seekers remarked that better health, vision, and dental insurance were of greater importance than vacation time and work-from-home opportunities.
Another important factor is to consider the cost to value ratio of offering said benefits. The cost of health insurance premiums rise every year, with some outpacing others. Having a defined contribution plan goes a long way towards keeping costs manageable, however.
Of course, demographics play an important role in laying the right foundation as well.
In our home-building analogy, an expert builder would be fully aware of the ground on which she builds. Slopped landscapes aren’t a good place to build a mansion, for example.
A lack of understanding of your target demographic is equally unstable footing from which to build an employee health benefit plan.
Get inside the minds of your employees. For example, millennials are looking for health benefits and wellness packages more than previous generations. Understanding the details of what they want gives you an opportunity to build your employee health benefit plans according to the market.
Some current trends in employee health benefit plans include:
- Customized health insurance plans. Employees aren’t fond of the “one size fits all” insurance benefits plans. Communication between you and your employees makes a big difference in determining the right benefits to offer.
- Digital Health Care. Access to health information on the go is important for many Americans and becoming increasingly so. This benefits your business as employees get well sooner, increasing productivity in the process.
- Consumer-based health care. Preventive care, prescription drugs, and wellness coverage are all critical to 21st-century
Zoning (Padding Your Plan)
Now that you know what the expectations are for your demographic employees, the next step is to start to fill in your frame and foundation.
This process starts with deciding how you’ll offer the benefits you have now secured. Another component is figuring out how to align your new employee benefits package with what is legal.
Most employers are fully aware of the 10 minimum essential benefits they have to offer but less aware of some of the other health care reforms that have been made to the system. These include:
–How do the health care exchanges dictate the availability of plans through employers? First, small businesses will be able to shop for group health insurance plans on the exchange network. In so doing they’ll receive a subsidiary to compensate them. Alternatively, they can be reimbursed for the nonsubsidized part of the plan through their defined contribution allowance.
–What are the requirements if I have more than 50 employees? The requirements are simple, you have to offer the minimum essential coverage we mentioned in addition to making sure that coverage is affordable for all employees. Failure to do so results in a penalty. However, by providing your employees with quality health insurance benefits you can not only win them over but also reduce penalties associated with the ACA.
Adhering to these regulations is non-negotiable. Understanding how to do so isn’t that easy, which leads us to our next point.
Put On the Finishing Touches (Meeting with a Health Care Consultant)
No builder does it all alone. They need assistance and support from individuals who have years of experience in the construction business to make the most of their benefits packages.
Similarly, when it comes to designing your own employee health benefits plan, it’s critical you consult with a professional. The finer details of employee health plans can come back to bite you if you’re unaware of their costs.
Factors that can greatly impact the outcome of your plan include:
- An uncertain future for your company.
- Frustration for employees who may not enjoy the same perks because you’re changing your plan for newcomers.
- A lack of competence in administering new benefits.
- Failure to realize how many employees will actually use the new benefits package.
- A lack of available funding for many of the benefits of the plan.
You don’t want to face these issues alone. Having an employee benefits consultant on your side can minimize the risks of signing up for a new health benefits plan.
Another important consideration you can make before securing a new plan is to simply speak with your employees. Conduct a survey to see what it is they want to see from their new benefits plan. What are some benefits they want? What are some benefits they could do without?
A simple in-house survey can work wonders towards saving you money on unnecessary benefits.
You can also take a look at what your competitors are offering their employees, after all, they’re the ones who could steal your employees if you’re not careful.
Summing It Up
Building an employee health benefits plan is a challenge, just like building a home. It requires forethought, proper planning, the right tools and the right support.
Our team at Healthcare Consultants Inc. wants to help you. We’ve helped thousands of businesses in Houston, Texas secure high-quality employee benefits and save them money. Contact our team today for the help you need.