While it’s important to offer a competitive benefits package to attract and retain quality people and maximize productivity, a full suite of benefits can be cost-prohibitive. But one of the most coveted things an employee can have is a health insurance plan.
Costs of employee benefits usually average about 15% of payroll in a small company, or as high as 30% in a larger one; in fact, a 2015 benchmarking survey conducted by The Conference Board of Canada showed that the average cost of providing benefits for employees is $8,330 per full-time equivalent.
With costs like that accumulating, offering a robust group health benefits package is a big commitment. The last thing you want to do is implement a plan and then realize you can’t afford it and have to either scale it back or cut it out entirely.
If you are trying to save money on your group benefits or ensure your costs don’t escalate beyond your business’ means, offering and funding part or all of the cost for individual or supplemental health insurance is a solid strategy to consider.
Do you know which health benefits matter most to your employees? Your goal is to deliver a plan that meets their needs, is within your budget, and helps ensure that they stay healthy and at work for you.
The annual Sanofi Health Care Survey results (check them out here) are a good resource to learn what benefits employees in large and small organizations across Canada use and consider important. These three benefit factors are always high on the list, so let’s look at how individual health insurance fits:
- Drug benefits are important
The majority (85%) of Canadians with access to health benefit plans used their drug plan at least once in the past year, according to the 2018 survey. Individual health insurance plans cover the cost of prescription drugs; they can be used to “top up” group plans, or as the primary drug coverage benefit, keeping your employees happy and healthy.
- Dental benefits rank highly
The 2016 survey asked employees how important components of their health plan were, and basic dental coverage ranked at 93%, second only to prescription drug coverage, which ranked at 94%. Dental-only individual health insurance plans are an attractive option for young and healthy employees who don’t see a need for prescription drug coverage. And don’t be fooled by the name; these plans include paramedical coverage, hospital coverage, vision care and more.
- Flexibility of choice
The 2015 survey asked plan members about their preferences for health coverage, and 91% said they would like the option to choose specific benefits that are best suited for their current personal situation. Individual health insurance plans are just that: plans that fit what each individual needs, from basic to comprehensive coverage — for themselves only, or for their family. And you can be assured that there are drug and dental individual health insurance plans available for every employee regardless of their current health conditions.
“Thinking outside the group benefit box” by offering individual plans can create flexibility and coverage for the health benefits each employee wants most.
Providing some or all of the funding for a basic individual health plan can go a long way toward satisfying employee needs. Individual health insurance offers so much for so little, and it can be your opportunity to be your employees’ health support hero with a strategy that includes
- Coverage for every type of employee
Coverage is available for employees aged 18 and over, regardless of occupation, tenure or full- or part-time status, and is renewable for life. In fact, you can use individual health insurance to provide health insurance coverage for consultants and retirees, too.
- Supplemental protection
If your company has a group plan but is ready to hit the panic button on increasing premiums, you can use individual health insurance as a cost-effective alternative to the group health benefit, or make individual coverage available as a supplement to provide extra protection from out-of-pocket costs to those who would like to have it.
- Cost predictability
For many organizations, individual health insurance is more affordable than group health insurance because of the size of the risk pool. Individual health insurance spreads the risk over a much larger group (individuals all across Canada). With a group health insurance plan, if even a few employees have surgery or are diagnosed with a chronic illness, you are likely to see premium rates increase at annual renewal time. With individual health insurance, you can use a pure defined contribution approach (where employees purchase individual health insurance using dollars you define). And you can pay for the employee individual health benefits with pre-tax dollars, just like you would for a group plan. The result? Your organization has benefit cost predictability — avoiding dreaded annual renewal increases.
At SBIS, we can help you design a solution that delivers the best for your budget and employees alike. When you have your individual health insurance strategy set, we can help with communication and implementation.
Employees have the option to use our website, where they can see all that we have to offer, or they can call us. We’ll find out exactly what they’re looking for and what kind of coverage they can afford.
Alternatively, we’ll provide you (the employer) with all the information you need on individual health insurance options, and support information you can share with employees by email or on paper. We can even help with education sessions to make the choice easy and convenient for everyone.
Ready to discover your savings strategy? Call us at 1-800-667-0429 Monday to Friday, 8:45 a.m. to 4:45 p.m. ET.