Does My Benefits Plan Meet My Employees’ Needs?

Mar 31, 2015

Employees’ needs can often be separated into two categories: transactional or catastrophic.

When reviewing benefit plan offerings, most employees will look at transactional items that offer immediate financial relief such as paramedical practitioners, vision care or dental care. For this reason, employers who are designing and communicating their plans are often concerned about their health and dental coverage as they want to be competitive in their marketplace.

Catastrophic risk benefits, such as life insurance, disability or high cost drug coverage are often overlooked because employees do not consider this type of insurance until they actually need it. We have run into a number of situations in which a disability plan is offered but either the plan design is poor or the coverage maximum is insufficient to properly replace pre-disability income. In this scenario, when someone actually needs to make a claim, they learn that they are unable to live off of their disability benefits.

There is no quick solution to ensuring a plan is sufficient for your employees’ needs because this requires reviewing, planning, and budgeting but it is something to think about. Here are some questions to consider:

1. Is the life insurance benefit at benchmark?
2. Is the long term disability benefit properly designed with consideration of the All Source Maximum?
3. Are the maximums and non-evidence maximums at the highest level available?
4. Are salaries being updated with the insurance carrier to coincide with income based benefits?
5. Does the drug plan offer catastrophic drug coverage if someone were to get very ill?
6. Does the definition of earnings include commissions and/ or bonus?

This is not to say that the transactional items are not important because they are what employees look at but to ensure that employees’ needs are properly cared for, life insurance or disability insurance should not be offered for the sake of its existence. Both benefits should be carefully crafted to serve its original purpose: to offer protection to your employees and their families when they need it most.

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