How do I Set Up Benefits For My Company?

How to set up the best group health insurance and benefit plan at affordable prices:   A step-by-step guide to learning and becoming an educated group health insurance and benefits consumer.

There's a lot more to buying group health insurance and employee benefits than being a good employer. It's a big investment for your company and an important decision! Before you make it, you should do the research just as you would before buying stock, or real estate, or an automobile for that matter.

A group health insurance and benefits education doesn't cost you anything. But if you don't learn about them before you select one, it could cost your company a bundle. Your goal should be to approach your insurance agent as an educated consumer. That way, you cannot only make an informed, competent and rational purchase, but one that will please the employees in your corporation.

• Step one in learning about group health insurance and benefits:
  Researching insurance and benefits begins by learning the definition of Employee Benefits.
  
  Even though there is much disagreement when it comes to this term, we believe that the narrowest definition of employer-provided benefits is: insurance products cover risks such as sickness; death; disability; accident and retirement protection. Payments for private insurance and retirement plans include the cost of establishing such plans, as well as contributions in the form of insurance premium or payments through alternative funding arrangements. Some benefits provided under these plans that cover personal loss exposure are:
  
  
  • Medical expenses
  • Old age
  • Dental expenses
  • Death
  • Disability Income
  • Legal expenses
  The Internal Revenue Code also provides favorable tax treatment to employer contributions for certain types of employee benefits. The employer may deduct the contributions as usual business expenses, and, within limits, employees will often have no taxable income that results from employer contributions on their behalf. In addition, payments received from some types of employee benefit plans may be received tax free by employees, even if provided by employer contributions. Benefits from other types of plans may not result in taxable income until payments are actually received.



• Step two in learning about group health insurance and benefits:
  Understanding Employer Objectives
  
  As a rule, no benefit plan is properly designed unless it meets the employer’s objectives. Unfortunately, these objectives may not be clear or nonexistent, particularly in small firms. Make sure you have specific written objectives that have been approved by the board of directors or the owners of the firm prior to begin your search for different plans. These objectives will vary for each individual organization, depending upon such factors as size, location, industry, the results of collective bargaining, and the philosophy of the employer. Without clear objectives, it is difficult for the agent, broker of benefits consultant to make recommendations for the firm’s or for the in-house benefits staff to make decisions. Some objectives ideas are listed below:
  
  
  • To establish an affordable health insurance plan, especially a Florida high deductible health plan to complement with an in-house wellness program.
  • To establish a program that complements the benefits employees currently have on their own.
  • To establish employee benefit programs primarily based on employee’s protection against the risks of old age, loss of health and loss of life.
  • To evaluate the employee benefit plans annually for its effect on employee morale and productivity.
  • To compare employee benefits annually with that of other leading companies in the same industry to maintain employee retention.
  • To determine annually the cost of new, changed, and existing programs as a percentage of salaries of wages and to maintain the percentages as much as possible.
  • To provide benefits on a noncontributory basis, except benefits for dependent coverage for which employees should pay the totality of the cost
  • To offer medical coverage only on a percentage of contribution; additionally offer voluntary plan coverage, for which employees should pay the totality of the cost.
  • To offer medical coverage to full-time employees, their dependents, part-time employees who work for more than 25 hours per week, retired employees and employees who are temporarily separated from employment such those on medical or family leave and COBRA employees.



• Step three in learning about group health insurance and benefits:
  Determining what types of benefits should be provided in the plan.
  
  A major hurdle for most employers is understanding what types and levels of benefits to include in a benefit plan. For those organizations that do not have any employee benefits in place, the first step is understanding and deciding which benefits to offer initially. On the other hand, organizations that have plans in place face the challenge of deciding whether they should keep what they have, redesign all or part of their current benefit plan, add new plans or let go some of the benefits. The key questions are...what are these needs? Should different plans be implemented? How much can the organization afford? 
  
  First step is to determine needs. The old way of determining needs based on tax laws, what the competitions is doing or the employer perception of what the employee wants and needs no longer work. Nowadays, employers have increasingly started using marketing research approach, just like the ones used to determine consumer demands of products. Additionally, employers have increasingly turned to life-cycle and work/life approaches to benefit planning.
  
  
  • Marketing research will mainly determine two things: How funds should be allocated to new types of benefits and how funds should be used to improve current benefits. Some ideas of marketing research approach are:
    
    
    • Personal interviews with employee either alone or in small groups. This approach is probably most effective in small firms of fewer than 100 employees or for benefit programs that is limited to a small group of employees.
    • Simplified questionnaires with two major parts: one determining benefit preferences and the other determining demographic data such as age, sex, marital status, years of service, and salary range.
    • Sophisticated research methods, which are used as a follow up to personal interviews or simplified questionnaires, aid in measuring the intensity of employees’ preferences.
  • Life Cycle Benefits employee benefit plans are designed with the realization that benefit needs may differ for males and females, and may differ when employees are single, married or raise children, or if they care for elderly parents or if they need to save for when they retire. An example of a Life-Cycle benefit is when an employer offers a voluntary long-term care insurance plan available on a payroll-deduction basis. Again, employers may use questionnaires and personal interviews to determine the varying needs of each employee.
  • Work/Life Benefits employee benefits are based on the realization by employers that employees, particularly in the tight labor market of recent years, are looking for employers that recognize that their employees have lives outside the office. Many of the benefits are flexible work schedules, child-care plans, eldercare benefits, family leave, and adoption assistance to name a few.



• Step four in learning about group health insurance and benefits:
  Learning about Provisions for Controlling Cost.
  
  Employers have always been concerned about the costs of providing employee benefits. Traditionally, this concern has lead to plan provisions that transfer the costs to employees rather than reducing benefits. Most recently, wellness programs combined with high deductible plans, especially in the health insurance benefit, are becoming more common as a way to control healthcare costs since healthcare costs cannot be reduced without controlling healthcare first.
  
  Some key cost containments strategies are:
  
  
  • Probationary periods
  • Proper census structuring
  • Benefits limitations
  • Employee contribution
  • High Deductible plans
  • Wellness programs
  • Carrier competitive bidding
  • Employee-Assistance plans



• Step five in learning about group health insurance and benefits:
  Understanding if employee benefits should be outsourced.
  
  Historically, most organizations have fully administered their benefit programs with their own employees. More recently there has been a significant increase in the outsourcing of employee benefits administration, with estimates indicating that between 40 to 50 percent of all employers currently use outsourcing to some degree. An example of outsourcing would be to a benefit consulting firm, who focuses their activities on regulatory compliance, eligibility determination and enrollment.
  
  The most common reasons for outsourcing are:
  
  
  • The organization lacks the technical and regulatory expertise to perform many of the necessary functions.
  • Closely correlated with this reason is the desire of companies to seek more value for the dollars they spend on benefits since it is often cheaper than performing the same functions in-house.
  • Better service to employees is also an often cited reason for outsourcing.
  • Last but not least, another cited reason for outsourcing is that the organization should focus its attention on the firm’s core activities and outsourcing enables a firm to lower the size of the staff that administers its benefits or at lest have the staff remain stable or grow more slowly in an era when benefits administration is becoming increasingly complex.
  
  
• Click here to get affordable group health insurance and other employee benefits
  
  Trust, confidence, great service, and a dynamic selection of insurance and wellness programs are the benefits you're assured of from everyone at Group Benefit Agency.