Business Survival Tip - Choosing the Right Benefit Plan

Consider your employees when making changes to your benefit plan.

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Carl Kleimann
Episode: 017
November 18, 2009

Summary:

Making changes to your medical benefits has become very tricky. But it’s so important that you offer your employees the right plan! Carl Kleimann offers critical tips to consider.

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Carl: Hello business owners this is Carl Kleimann with another Business Survival Tip from Odyssey One Source. You may be considering making changes to your group medical plan for the coming year. This task has become increasingly complex with so many options for you to consider. Remember the days when the only decision we had to make was the deductible amount and co-insurance percentage? Today, we have High Deductible Health Plans coupled with Health Savings Accounts, different deductibles for outpatient surgery and emergency room visits, countless prescription drug plans, and the list goes on.

As an employer, you want to provide quality benefits to your employees while at the same time, maintaining our budget; however, it is equally important that you offer a plan that is affordable for your employees. For example, you may opt for a "Cadillac" plan in which you pay 100 percent of the premium for employee coverage. If the cost of dependent coverage is unaffordable for your employees, your generosity will have done them a great disservice. They will likely be much happier with a less expensive plan that costs you and them less money.

It is also important to consider how various plan designs will affect your employees. For example, plans that have high deductibles and significant out-of-pocket maximums may reduce premiums but at the same time, may create a financial hardship for low wage employees. An employee making $12 an hour is not likely to be in a position to cough up a $3,000 deductible plus 20% co-insurance in the event that he or a family member is suddenly hospitalized. A plan that offers a lower out-of-pocket maximum in exchange for higher prescription co-pays and a more restrictive provider network would likely be a more viable solution.

Finding the right medical plan requires that you communicate with your employees. Find out what is most important to them. You can almost bet that younger, healthier employees will opt for lower cost plans with fewer bells and whistles while older employees and employees with families will opt for higher premiums and more features.

I am Carl Kleimann and this has been another Business Survival Tip by Odyssey One Source, ranked as the number one Professional Employer Organization two years running by the Black Book of Outsourcing. For more information on this and other issues affecting employers, please visit www.odysseyonesource.com.