Employee benefits are often a source of confusion for small business owners and employees. Business owners can feel torn between offering benefits and containing costs. Employees can be unaware of their benefit coverage and how to use them. Today, we want to talk about why it’s so important for small business owners to help employees understand and use their benefits plan and clear up some misperceptions about employee benefits.
Traditional Group Benefits versus The Benefit Wallet
When small business owners and employees think about group benefits, they tend to picture the traditional group benefits model. For employers, this means paying monthly premiums whether employees use their benefits or not and facing annual rate increases.(Aon’s 2020 Global Medical Trend Rates Report forecasts an increase in group benefits cost of 6% in 2020). Employees accustomed to traditional plans think about the limits of the plan ($200 for glasses every two years!) and onerous processes for submitting claims. For more information on the limits of this model, read our article, 3 Reasons Traditional Group Benefits Aren’t a Good Fit for Small Businesses.
The concerns associated with traditional group benefits don’t apply when small business owners use the BeniPlus Benefit Wallet as their employee benefits plan. With the Benefit Wallet, employees submit claims easily for the benefits they want and need through their healthcare spending account (HSA) and wellness spending account (WSA). Employers set their benefits budget once a year, based on their budget – not the desires of an insurance carrier.
With the Benefit Wallet, small business owners and employees are in charge of their benefits. And that’s worth communicating about.
The Importance of Communicating about your Employee Benefits Plan
In project management, they say it’s best to communicate early and often. As a small business owner, you can use this advice to make sure your employees know they have a benefits program and know how to use it.
To communicate well about your benefits plan, make sure your employees know:
- Why you’ve chosen then Benefit Wallet for employee benefits.
- Why providing employee benefits is important to you and your company.
- How their benefits contribute to their total rewards package.
- Which part of their Benefit Wallet comes with tax advantages (HSA, RRSP).
- How to use the plan to the fullest each year.
The Sanofi Canada Healthcare Survey 2019 showed that only 60% of employees believe their health benefit plan meets their needs very well or extremely well. This is partly due to the inflexibility that comes with many traditional group benefits, but communication also determines how much employees appreciate their benefits.
When you communicate well about benefits, it shows your employees that you value them. We know employee love benefits but they also love being valued and appreciated. Ad when employees appreciate something, they’re happy about it.
Communicating well about your employees benefits builds a culture of appreciation which is especially helpful if you can’t offer the Rolls Royce of benefits.
Think of Benefits as Part of Total Rewards and Encourage Employees to Use Them!
Some employers think it’s a bad idea to encourage employees to use their benefits. They believe more utilization means higher costs. While this may be the case with some traditional group benefits, this idea doesn’t apply to the BeniPlus Benefit Wallet because you – the small business owner – determine your budgets for benefits. For example, if you decide that managers get $2,500 per year in their Benefit Wallet and font-line employees get $2,000 per year, you can easily calculate your total benefit budget. Employees can only use the amount in their Benefit Wallet and nothing more – so there’s no going over budget for benefits.
Of course, if employees don’t use the money in their Benefit Wallet, you don’t pay. But we encourage you to think about your benefits budget as part of your employees’ total compensation to support the culture you’re building.
Although it may seem counter-intuitive at first, you can be happy your employees are using their Benefit Wallet on the things they want. As we mentioned before, it makes your employees happy – and that’s good business. Plus, unlike with traditional group benefits, you won’t waste money on benefits no one uses.
If you’d like to give your employees the benefits they want at a price you can afford, take 10 minutes today to get a quote for our simple. flexible and affordable employee benefits program.