Toronto Group Insurance Broker: Joel Cadesky

Having group benefits
makes your business stronger.

Start-Up Canada will tell you that as of December 2012, there are 1.2 million small businesses in this country.

This number continues to grow. For example, between 2002 and 2007, 104,000 new small businesses were created every year, and according to BenefitSource.ca, 49 per cent of employees felt that the benefits package influenced their decision to join the business they work for. Even more influential, 73 per cent of employees reported that they would not join an employer that didn’t have a benefit plan.

Group benefit plans can be a win-win arrangement for both employer and employee, and Joel Cadesky, a senior account executive specializing in group benefit insurance, spends his days making sure employers see that.

“It’s very simple,” he says. “You have a plan and you say to the employer, ‘This is a very good situation for your employees. The benefits are going to help you because they’re going to be happier and healthier people who are more productive. The employee is going to be very happy because now if they’re on some medication, some of it is going to be paid for, maybe all of it, depending on the plan design.’ But the key is both people win because the employee will get his or her family covered for health and dental when they didn’t before, the employer will have a happier, healthier employment situation, and productivity always goes up. Study after study shows that with the plan or without the plan, productivity always goes up for the business with the plan.”

But part of that win-win situation means that it’s better for both parties if they split the costs equally, and Cadesky says it’s easy to see where problems arise if they don’t.

“If the owner pays 100 per cent, it’s going to become free insurance for the employee and as a result, they’ll use the plan more than normal, and on renewal the rates are going to be higher, so then you’ll have a problem with the plan where you’ll have to change and dilute the coverage offered,” says Cadesky. “If there is a sharing of costs, every time an employee files a claim, they are taking an ownership in that because they realize that claim is going to have some effect on their rates next year.”

Employers will see a number of positive results if they require their employees to share in costs.

“So, there may be heavy use because it’s necessary, but there won’t be any abuse and that’s really what you’re doing with a 50/50 split of the costs,” says Cadesky. “When you’re paying 100 per cent as an employer, you’ve basically boxed yourself in because next year you’ll have nothing to offer your employee except maybe increases in salary because you won’t be able to afford anything else.”

For his clients, Cadesky usually advises a sliding scale in which employees split the cost 50/50 in the first year and then, in the second year, the split goes to 60/40, with the employer paying 60 per cent. Then in the third year, the employee only pays 30 per cent, and the employee’s cost continues to go down year after year, until the most loyal and longest-lasting employees receive the reward of a 100-per-cent-paid-for plan.

Creating a win-win benefit plan for both parties also means customizing the plan according to the needs of your employees. Every insurance company has its basic, boilerplate plan, but it’s an employer’s ability to meet the needs of employees that really creates a mutually beneficial environment.

“For example, if you’ve got a very young group, say 24 or 25 is the average age, then dental isn’t going to be the huge factor and prescriptions may be a factor, but what will be really big is paramedicals, so you’ll top up the paramedicals because those are the people who will use the chiropractors, the acupuncturists, and the message therapists,” says Cadesky.

“If you get an older group whose average age is 45 to 50, all of a sudden prescription drugs become extremely important because most people have them, and periodontal services become an extremely important part of their lifestyle. It’s not just fillings anymore; they’ve done that and now they’ve got to keep the gums going and that’s what you get with old age.”

So Cadesky recommends that employers get to know their group. You need to know the average age and needs of the group. Have a discussion with your employees, and get a feel for what they want and need.

“It makes no sense to take a group where the average age is 24 and throw on a plan where you have a combined $500 paramedical coverage allowance, but you’ve blown out the dental by giving them 100 per cent unlimited and the whole bit. They don’t need it, that’s not what they’re looking for, and you’ve changed the plan design to one that hurts your employees because they’re not getting the full value out of it. Not only that, but the employer is wasting money on services hardly used.”

Another component in creating a win-win situation with your group benefits plan is your ability to keep renewal costs down, and Cadesky will tell you that the key to doing just that lies in one word: “negotiation.”

“If you don’t have a broker who is able to negotiate those renewals with you, get rid of him and fire him immediately,” he says. “Your broker should be able to negotiate for lower rates and better packages, but I’ve gone into so many companies where I’ve seen no negotiations whatsoever and they simply accept everything without even looking at it properly.”

LSM Insurance Take – Joel  makes some good points.  Each companies situation is different.  What is important to one employer may not be as relevant to another.  Group insurance needs can change as the structure and make up of the company evolve.  A good group insurance broker is able to make sure the plan design keeps pace with the companies needs and works with the insurance carrier to make sure they are giving the most competitive renewal premium.   Certain adjustments may have be made which creates work for the broker but that is what he/she is being paid to do.

For more information on group insurance in Canada please contact us at 1-866-899-4849 or get a free no obligation quote Group Life Insurance Quote.