Health Insurance Benefits for Small Businesses – How to Choose the Right Plan
There are so many components that make running a small business difficult and searching for the right benefits package can certainly add to them. Luckily, with the assistance of a licensed advisor who actively serves the employers who are looking for group benefits, the task can be manageable and achieved with success.
The options available to small businesses are:
- Traditional Group Plans: these are the regular plans that most large employers provide. These have a standardized approach and limited flexibility within the plan.
- Health Spending Accounts (HSA): dollars that are allocated to each employee to direct as they wish towards health and dental liablity, etc. Be aware of the tax treatment of this strategy as it relates to incorporated companies rather than to sole proprietors (look for a future blog describing the advantages and disadvantages of this approach).
- Voluntary Plan: ideal for part-time workers who will pay all of the plan premiums but will benefit by being able to access coverage they could not obtain on their own.
How do insurance companies define a small business?
Thankfully, the insurance industry has solutions for all sizes of business, especially for small business owners, including one-person offerings for individual owners.
However, most carriers or traditional benefit plans require three employees as their minimum for health liability coverage. It is also important to note that, although the average minimum is three, family could play a role in a company’s acceptance. For example, a family-run business of a husband and wife where older child(ren) or even brothers and sisters of the couple are involved is also considered in the minimum employee allowance.
Which insurance companies are leaders in small business benefits?
Most carriers do an excellent job with selection and pricing. The key difference is the service. Leaders such as Manulife, Great-West Life, and Sun Life are always looking to evolve the market with innovative products and by enabling technology to make it easy to transact business. All three, in fact, have a unique offering that allows as few as two employees to form the group (such as Manulife’s Launch product, Sun Life’s Advantage and newly introduced Flexbox from Great-West).
What are some of the advantages to a small business owner having health insurance?
There are many advantages afforded to the small business owner who implements a health and dental liability benefits plan. The most compelling include:
- Attracting key people to the company
- Retaining key people
- Protecting your investment in employees
- Fostering good health and wellness, which converts to greater productivity and company culture
- Tax advantages
What are some of the trends and changes?
The small business market is rapidly changing, and so are the plans that are being offered. The key word these days is customization, as small businesses look for solutions that are well priced and include technology to deliver a superior experience for their employees. Call it benefits “re-imagined,” if you will, but one thing is certain, price is always a top concern for small business owners, which means they will look at any and all options that won’t compromise their competitive edge in their stated market.
Trends such as mental health, virtual doctors/e-health, wellness platforms and medicinal marijuana are leading the way this year. There will also be a shift towards personalization since each employee has different needs and health interests.
Access to care is critical in a fast-paced world where doctor or specialist appointments are tough to book. Technology will enable a new layer of care in a world that seems to try to self-educate and diagnose. EQ Care from Equinoxe, which Sun Life is now adopting, is one solution that will assist employees in utilizing a FaceTime or Skype meeting with a doctor.
In the health and wellness space we also look at Meschino Wellness. Meschino Health and Wellness is a company that is focused on providing a personalized health and wellness solution that is generated immediately on completion of a user-friendly online questionnaire via an advanced technology platform. The platform is built around Dr. Meschino, who has over 30 years of experience in administering and delivering such solutions. Meschino Health & Wellness is a truly unique and innovative prevention program that provides a personal pathway where your health risks are identified, your goals are recommended and set, and you can select and manage activities to achieve your goals.
These are simply a few trends that are gaining in popularity and discussion, and awaiting in the wings is a fresh new batch of solutions that will soon follow.
What potential pitfalls should the small business owner look out for?
Group plans are an artform unto themselves. For the small group market, there is not as much customization as large group, but there is enough that it really matters and can affect costs. Here are some of the potential pitfalls to look out for:
- Price: since it is top of mind for the business owner, understand that not all plans are priced equally. The advisor needs to be educated on the various carrier offerings and pricing.
- For Traditional Plans: many new groups go far too aggressive on plan coverages only to see rates sky rocket in the first renewal because of high claims. Let’s face it, the introduction of a new benefits plan will get used and abused in the first year and after if it is not properly set up at the start. For example, it is better to offer 70 per cent health and dental in year one than 80 per cent. This way you have some shock absorbers included, should claims take off. Remember, the goal is long term cost containment while still providing the needed benefits to do what you expect, which is to attract and retain talent.
- The Group “dabbler”: there is nothing wrong with an advisor not having a focus on group advising as they certainly can leverage their support system by bringing out the carrier rep. However, the dedicated group advisor will be able to ask the right questions, provide a full assessment of the offerings available, and will have the experience to know where the trouble spots are and where caution is needed in plan design and claims management, etc.
An investment, such as a benefits plan, coupled with emerging services, such as Wellness platforms, mental health strategies, and access to virtual care when needed, will create a dynamic, winning culture in the office as well as the home. In today’s economy, the benefits world is changing and providing greater flexibility and customization that appears to be moving at a rapid pace for the benefit of all employers who are seeking out solutions.
Jason Julian’s Bio
I have been in the Financial Services industry for 27 years. I started in the banking sector in 1991 for Canada Trust in Hamilton later to begin an insurance career as an agent with Prudential of America in 1995. The majority of my selling career was spent in Hamilton Ontario at one of Canada’s leading brokerages; Dan Lawrie Insurance Brokers Ltd.
I went on to work as a Life Member of MDRT and two-time Court of the Table producer along with Top 10 status for 7 years with Unity Life before joining the company in 2007. After selling my book of business, I joined the corporate side serving as Director of Sales for Southwestern Ontario for Unity Life/Foresters 2007 to 2012 before becoming AVP Ontario Sales. In 2014, I worked with National Accounts to oversee growth as well as Business Development in 2017.
In 2018 I took on the role as Senior VP at a growing benefits company (SAFG Benefits Solutions Inc.) to grow the brand and market our unique value proposition to brokers and employers using the latest technology platform and best of class services including Mental Health, Meschino Wellness, EQ Care virtual doctors and Pharmacogenetics.