Benefit Plans – The Best Time for a Review

Oct 13, 2015

Employee benefit plans – their design and the providers – are reviewed for various reasons. Some of the common reasons include the following:

  1. A change in the employee demographics
  2. A change in the organizational structure (down-sizing or expansion such as a new acquisition or takeover)
  3. Ongoing or numerous service issues
  4. Receiving advice that doesn’t ring true to you
  5. Not getting access to new capabilities or advantages in the marketplace

Let’s look at the first reason – the employee demographics. As more millennials are entering the work force while baby boomers are looking forward to retirement, the demographic changes of your workplace could warrant a review of the benefit plan. No doubt certain benefits will be valued differently by employees at different stages of life. For example, for millennials, flexibility is a highly sought-after element in group benefit plans. In this case, a plan with a choice/flex plan for the extended health and dental benefits is likely more favourable than having an executive disability program since millennials probably don’t qualify for the excess coverage.

The second reason may relate to changes in the organization, such as a significant layoff or an acquisition of another company. Layoffs can substantially change the employee census and the overall risk characteristics of the employee group. Plan design changes may be required to realign the new corporate culture, to re-evaluate the sustainability of the benefits, and ultimately to meet the needs of the new talent pool.

Lastly, a plan sponsor may want to assess their current carrier’s capabilities, or value proposition, and compare them to what is currently offered in the marketplace. If you are experiencing constant service issues with your current carrier, or if they aren’t able to match certain benefits requirements or offer some of the new technical tools, a review of the benefits plan would be a good idea. Know that at any given time, the following things could be happening in the marketplace:

  • new providers entering; others leaving
  • new products being introduced; old products being eliminated
  • emerging technical tools to help ease navigation and lessen service issues

An employer should always be confident and satisfied with their existing benefits plan arrangements. A review of the benefits plan provides a “set point” to confirm that the existing arrangements are meeting your organization’s changing needs, capitalizing on new products, technology and service, and are ready to help you move forward into the future.

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