This site explains how to avoid three common dangers small business owners face that keep them struggling with complicated, expensive and rigid employee benefit plans.
Whether you're setting up your first benefit plan or have inherited one that someone else implemented, you'll soon discover that benefits can be complex, expensive and rigid. But it doesn't need to be so. You can design your employee benefit program to be simple, affordable and customized to your unique needs.
Since health coverage is at the heart of most employee benefit plans, we'll explore how complex, expensive and rigid it can be made. Health benefits are highly visible due to the frequency of claims. When it comes to health coverage, what do employees really care about? In most cases, what really matters are that drugs, dental and vision expenses are fully covered.
The first danger that small business owners face is designing a complex benefit plan that is confusing and difficult for employees to comprehend.
For example, most health insurance booklets have more than a dozen pages of fine print describing what is covered, when and for how much. The numerous exclusions and limitations are so convoluted that only the most persistent are able to comprehend the coverage.
A complex benefit plan design often leads to misunderstandings, unrealized expectations and disappointment when claims are not fully covered.
Simplicity is the key to understanding and appreciating benefits.
An example of a simple health benefit plan design is a health spending account. Each employee has their own personal benefit budget that can be used to pay any drug, dental, vision or medical claim permitted by law.
The best way to simplify your benefit plan is to understand and articulate precisely what you want from your benefits program as well as what your employees want. With those in mind, you can build a benefit strategy that provides clear win-win-win solutions. Now your benefit strategy will guide your benefit plan design decisions and you can exclude whatever distracts.