Every company strives to be successful enough to offer a variety of competitive benefits to employees. Health benefits are a particularly big sell to employees—in fact, they’re the number two reason employees seek a new job, according to a 2017 report on employee benefits by the Society for Human Resources Management (SHRM).
While achieving this level of success is enviable for any company, it can also bring challenges if you’ve never done it before.
Arthur Tacchino, Chief Innovation Officer for Sync Stream, a New Orleans, La.-based company that helps employers stay in compliance with healthcare laws, offers these key steps to getting started on setting up health benefits:
GET A BROKER
Entrepreneurs are, by their nature, independent and prone to doing as much as they can on their own. But when it comes to health benefits, which involve a significant amount of legal and financial issues that require compliance and attention, Tacchino recommends bringing an insurance broker or advisor on board.
Ask prospective brokers about their certifications and training, or seek referrals from trusted sources to make sure you’re connecting with someone who knows their stuff, he says. You’ll be glad you did.
“They can really help you navigate your market. They have experience in setting up groups and walking employers through the administrative process.”
If they’re sophisticated enough, he says, they can even help an employer with cost and benefit analysis when determining which benefits packages to offer.
Many small business owners may not yet have a human resources (HR) department, Tacchino says, “So having that outside resource is a great benefit and a cost efficient way to get that resource available to you and your employees.”
CONSIDER AN ASSOCIATION HEALTH PLAN
Smaller businesses mean greater risk from the insurer’s point of view. “If you’re a small enough business you might have trouble getting good benefits that are worth the premiums, and that are going to be reasonable, because the risk is just going to be higher for a small group,” Tacchino explains.
A relatively new way to purchase health insurance for employees, then, which will become official in December of 2018, are called association health plans, in which small businesses can band together and buy insurance to lower the costs. “That might be a way to get on a plan at a better premium,” Tacchino says. Though he warns that the rules are still unclear because they were recently finalized and practical implementation has not yet begun. It’s worth making sure that a broker is versed in these plans, he says, when searching for one.
DETERMINE THE COST SHARING
An important part of the analysis that goes into determining which plan you may choose to offer your employees is determining how you will structure the contribution. “What is the employer’s contribution to this plan? What is the employee’s?” Tacchino suggests you ask. He says that how you break down the structure can make the cost more affordable to your company at first, though that may mean there are sacrifices for the employee, such as non-spousal coverage.
“Some plans are not going to be as robust for the employee, but if this is a first time you’re offering benefits, it’s going to be a cheaper plan.”
HIRE AN ADMINISTRATOR
Once you’ve got a broker on board who’s helped hook you up with the right plan for your company, you’re going to need someone, in-house or out, to help you administer and maintain whatever plan you sign up for, as well as to field questions employees might have.
Administrators might be the same person who handles payroll, or might work together with that person to take into consideration important considerations, such as costs, fees, and tax deductions.
REVIEW YOUR BENEFITS ANNUALLY
Most plans lock in for a year, Tacchino says, though some are longer. He recommends not getting complacent with your benefits’ offering, but reviewing them annually. “Healthcare in general is evolving. Regulations are going to continue to evolve.” Plus, if a business does better financially, it may become possible to offer better, more competitive benefits packages to help with employee attraction and retention.
“If I was an employer this is something I’d want to re-valuate on a year-to-year basis.”
Lastly, he reminds entrepreneurs that even something as mundane as health benefits “has to align with the vision of your company. Where are you going as a company, what’s your culture, what are your employees’ expectations? [Health insurance benefits] are just a piece of that puzzle, and that’s going to change over time.”