2016 Compensation Planning Thoughts
2016 Benefits Discussion - Consideration Points
More and more employers are looking at "Group Benefits" as part of the overall employee compensation packages. Flex time, flex working locations ( at home), and many other flexible employment variables should be considered. It's time to add flex benefits to the discussion.
Just like time and location, each employee's benefit needs are different as well. Let's discuss the main points and talk about the new current view in the marketplace: Sorry for a little longer than normal message.
- Life Insurance, Accidental Death and Dependent Life Insurance. This is a very inexpensive benefit and has been the basis of traditional benefit plans for years. Today, utilising FlexBenefit planning it is no longer required as a building block for many plans. If utilized, a basic fixed amount starting at $25,000 to as much as 3x earnings is common.
- Critical Illness. Pays a fixed amount of benefit usually $25,000 to $100,00 for a diagnosis of a specific disease such as cancer, or the happening of an event, such as a heart attack Becoming more common in benefit plans as it is relatively inexpensive and provides "living benefits" to employees. Most plans terminate at age 65, however since many employees now work past 65, make sure you extend your program to age 70.
- LTD (long term disability). As a cost control measure, some companies are changing from an age 65 benefit to a two or five year benefit. Some companies are concerned that their employees won't work there till 65 so they don't want to cover to 65. Others want to keep it. Some companies are looking at "injury LTD only", as a cost saving measure. Last week RBC Insurance was the first to announce that LTD benefits will now extend past age 65 to age 70. At this point a minimum of 35 employees are required in order to get post 65 coverage. We expect other insures to eventually follow.
- Prescription Drugs. Time to consider a cap? Many expensive drugs are coming into the market and one large claim in your group can adversely affect your future costs. Most small to medium companies are capping at renewal even if reluctant to do so.
- Parameds; i.e chiro, massage, etc. Many groups have about 8-10 paramed services in their benefit package, with coverage from $350-$500 for each service. Insurers are experiencing excessive claims in these areas, which in turn pushes up costs. Time to consider the clause of "to a combined total of $1500 or whatever", limits the maximum and narrows to an employee's needs rather than wants.
- Dental. Consider negotiating a fixed amount of costs for each employee to spend on the required needs. More personally structured to needs and cost controlled with a cap in each category.
Things are changing on the employee and employer landscape. The Benefit Guys can provide simple solutions to meet your needs. Let us put our current experience to work for you.
"No matter how many employees you have - it's perfect. And it starts with one!"
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