We are picking up from last month’s first half of the article. If you missed it, you might want to review it first before reading the below, but be sure to check out both if you feel like this is helpful information. Thanks so much for following along!
Not considering ancillary / non-medical options for your program
This is somewhat related to what we discussed earlier in a few different areas. Still, after successfully engaging with their staff, we’ve seen many employers realize health insurance was not needed, so we were able to start all-ancillary-style programs, saving the business thousands of dollars per year.
A good dental plan shouldn’t be more than $30 a month if you buy what we consider the right program. A solid vision plan is $10 or less. Life and disability, another $10, $15, or $20 depending on the policies and how much insurance you want. An amazing, proactive telemedicine provider that gives your employees and their family members health and mental health video and telephone access are around $15 a month. The point is that these costs all hail compared to health insurance costs that are often best case going to be $300 – $400 a month, oftentimes a lot more.
If you’re doing the math, you realize that you could set up a solid and inexpensive program for your staff, completely pay for all of it and come in under $100 per employee per month if you did the research and could not include health insurance. 4 – 5 entirely employer-paid programs look exponentially better to someone you are trying to recruit than having nothing in place.
Smaller businesses can make sense to start with baby steps and hold off on doing health insurance as long as possible. Taking this approach, you keep costs down AND can have a very robust program.
Not getting compliance docs setup and your Section 125 Docs setup
This is a personal pet peeve of mine. We don’t see it often, but occasionally, we’ll have a client who wants to set up benefit programs and then not put the legal plan docs in place that are federally required. We tell people this all the time, but once you start benefits, you have opened the door to a world of compliance and regulation that you previously were not subject to. Part of this new world is getting your ERISA documents and Section 125 documents set up.
When you see ERISA documents, think of formation documents for your benefit offerings. Just like you had to establish your corporation or partnership in writing, you should also do this with your benefits program and set it up. Your benefits program is a legal entity so that it can be sued, and it can actually sue. Hopefully, in the SMB world, you will not see that, but it can happen. ERISA documents this, and they establish the benefits program in writing. On the flip side, you need to have Section 125 documents set up so that you can legally make your health, dental, vision, accident, and FSA / HSA deductions on a pre-tax basis.
We have done a ton of vendor and market research and have found some providers that will allow us to help a client get their legal ERISA setup documents in place for a very low price point. Some clients have attorneys on retainer or possibly attorney relationships that can handle this for them, and if that’s the case, that is awesome. We don’t care where our clients get these done, but please get them done. I don’t understand when employers choose to start a benefits program but then don’t set them up correctly with the required documentation. This effectively puts their company at risk for fines or penalties from day one. A benefits program should be something beneficial, not a risk. My opinion, of course. 😊
Rushing the process
Last but not least is something that we see from time to time that we normally try to talk people out of. If you’re a business that needs to start a program for the first time, chances are you’ve been in business for several years. If you want to explore benefits, take the time to do all your due diligence.
You will need to consider many things and possibly need time to discuss with your leadership team or even employees. If you are trying to rush the process or must rush the process, you will likely not be able to look at some of your most affordable options, especially on the health insurance side. For example, many vendors can take 7 – 10 business days to review claims and health questionnaires. Oftentimes it can take employees up to a week to complete those questionnaires. If we have multiple competitive bids, you will want some time to go back and see if we can get the vendors into a bidding war, etc. This all takes time. Yes, you can get some proposals turned around in a few days, but those are typically the fully insured ACA proposals which, if you are underwriting, will be more expensive out of the gate. This is why (in my opinion) most payroll companies and large agencies who work with smaller businesses only show ACA plans –
- They don’t want to put much effort into helping your company
- They simply want to maximize their profits. They don’t care about your bottom line or hard costs.
We Are Here to Help and Are a Click or Call Away
So we’ve covered a lot today, which is why we broke this out and made it two different articles. Still, we do hope that in reviewing these, whether you have benefits in place or not, you have gotten a few ideas and a few takeaways that will help you as you are working on your benefits programs in the future. As always, thanks so much for following along, and if there’s anything we can help with, please don’t hesitate to reach out and let us know. We’re here to help!!