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3 Tips to Improve Acceptance of Employee Benefits Changes

Modifying Employee Benefits & Minimizing Resistance

Making employee benefits changes and package modifications are sometimes not easily understood by staff. In some cases, making changes to employee benefits do not receive the widespread acceptance that an employer might hope for.

There are numerous ways employers can explain employee benefits changes. The objective is to provide a better understanding of necessary modifications to employee benefits while minimizing resistance that could derail the entire procedure.

In this post, our employee benefits brokers offer 3 Tips on how to better communicate employee benefits changes.

Tip 1: Lead by Example When Implementing Employee Benefits Changes

Informal and formal leaders, as well as those who have the ability to influence decision-making processes, need to support the employee benefits changes completely.

Any attempt to present adapted or modified versions of employee benefits without sincerity and honesty on behalf of people in these leading positions may appear hollow. Contemplate having the CEO explain proposed changes in a clear and sincere message to employees.

Tip 2: Involve Employees in the Benefits Changes Process

Employees who are involved from the outset in the process of implementing employee benefits changes are more likely to be receptive to proposed revisions.

Surveys or focus groups are excellent ways to explore the preferences and needs of employees. Avoid asking questions that you may not want to hear the answers to. Also avoid bringing up any other elements that are not on the table for amendment.

Tip 3: Clearly Communicate Potential Benefits Changes

While you can’t reveal everything to all your employees, be candid about what is evolved and why the employee benefits changes are necessary.

  • Identify stakeholders and important messages
  • Develop a timeline
  • And provide employees with adequate feedback channels

If uncertain about how to develop an acceptable communication mechanism, ask your employees for their input.

Employees don’t always interpret employee benefits changes as being necessary or beneficial. The onus is on employers to provide a clear explanation of modifications and how the adaptations will affect employees. You will also need to communicate whether or not employees will be provided with opportunities to contribute and respond.

About Benefits Strategies

For over 30 years Benefits Strategies have been providing creative, customized benefits programs for executives and employees. Our plans not only increase employee morale and satisfaction, they also elevate your business profile.

If you have any questions or need assistance with communicating employee benefit changes, please call our Edmonton office at 1-780-437-5070 or send us an email.

You can read more about the Canadian Human Rights Pension and Insurance Regulations on the Government of Canada’s Justice Laws website.

Waitress serving young patrons food in a restaurant.

Restaurant Finds Unique Way to Fund Employee Benefits Plan

A Toronto restaurant found a unique approach to employee benefits funding.

The restaurant began adding a 3% surcharge to each bill, with the funds to be used only to help provide employees with health and dental benefits.

Co-owner Heather Mee, was quoted in a May 2017 Benefits Canada article as saying, the surcharge was a “…more honest and transparent way” of funding the employee benefits.

In fact, there will be a separate item on each bill that is easily tracked and accountable so that it cannot be entered into the restaurant owner’s pockets.

The sole purpose for the bill surcharge is to provide a means of self funding employee benefits costs.

According to Mee, the average restaurant diner will spend less than $15 on a meal. This means that the surcharge for the benefits plan for each meal amounts to less than $0.50. As well, Mee states that diners who wish not to contribute will be allowed to opt out of the surcharge.

Aside from helping to cover health and dental, the employee benefits plan also covers services such as orthotics, massage therapy, and life insurance.

Mee acknowledges that the proceeds raised from the restaurant bill surcharge won’t cover all the expenses so the restaurant will pick up the balance.

In a market where few restaurants even offer benefits (because industry margins are minuscule and raising meal prices can be risky for the business), Mee admits that for her restaurant, this employee benefits funding alternative was a no brainer. Happy employees stay longer. And, many long-time restaurant customers are happy to contribute if it means helping the employees.

Need a benefits plan for your restaurant? Benefit Strategies can help.

Call us today at 780-437-5070 or send us an email.

Computer showing Insurance Policy graphic

Canada Critical Illness Insurance – FAQ

The purpose of this critical illness insurance FAQ blog post by Benefit Strategies, is to offer answers to some very basic questions that most Canadians have on this subject.

A critical illness insurance policy helps pay costs associated with a life-altering illness and is received as a lump sum cash payment. Essentially, a critical illness insurance policy helps you recover from a serious illness, condition, or disease, while maintaining your family’s lifestyle and financially stability.

For more information outside of this critical illness insurance FAQ, please contact our Edmonton Benefits Brokers directly at 1-780-437-5070.

Frequently Asked Questions

What is a critical illness?

Each critical illness insurance policy is unique but common critical illnesses may include:

  • Heart Attack
  • Stroke
  • Life threatening cancer
  • Major organ transplant
  • Total deafness or blindness
  • Loss of speech
  • Severe burns
  • Parkinson’s Disease
  • Alzheimer’s Disease

Why do I need critical illness insurance?

A critical illness insurance policy will ensure that you have the financial resources should you get sick and are unable to earn an income for any period of time.

Here are just four ways a Canada critical illness insurance policy could help you:

  1. Pay for financial obligations – Including you mortgage, car payments, credit card debt, and so on.
  2. Keep your independence – Make any modifications to your home or vehicle, or hire a caretaker to help.
  3. Pay for medical services – Help offset costs for medication or treatments not covered by your Provincial Healthcare provider.
  4. Relieve the pressure – Gives you the freedom to spend your time however you think may be most conducive for recovering, including spending time with family.

Is critical illness insurance worth it?

The answer to this question is personal. Everyone places a different value on their peace of mind, knowing they are financially secure in the event of becoming sick or incapacitated. Other people may prefer to forego insurance premiums and would rather save up a rainy day fund to cover critical illness expenses, should they occur. When deciding how you feel about critical illness insurance keep in mind that most Canadians have a reasonable probability that they will develop a critical illness by the time they are 65.

What affects critical illness insurance cost?

There are a number of considerations that can affect the cost of critical illness insurance rates:

  • Pre-existing conditions
  • Age
  • Gender
  • Amount of coverage
  • Smoking and drinking status
  • Health history
  • Current health
  • Occupation
  • Family History

Can I get combined life and critical illness insurance?

Many Canadian insurance companies offer disability insurance and critical illness insurance together. These bundled or combined disability and critical illness insurance policies can often help you save money over time.

What’s the difference between disability and critical illness insurance?

There are three main differences between disability and critical illness insurance:

  • Critical illness insurance pays out as a lump sum and typically sooner than disability insurance.
  • Critical illness does not require proof of income while disability insurance does.
  • Critical illness insurance policies are typically less expensive than disability insurance.

Disability insurance protects your income against the risk of a disability that would prevent you from working. Disability insurance will only pay out a portion of your income, until you are able to return to work.

Critical illness insurance however, pays the benefit after a diagnosis of a serious life-altering illness, regardless of whether you have a current income or not, or if you are able to work or not.

Is critical illness insurance taxable?

A critical illness insurance benefit payout is usually not taxable and comes in the form of lump sum payment, for you to spend in whatever way you wish.

Furthermore, any employer-paid critical insurance premiums are not a taxable benefit to the employee.

Do You Still Have Questions?

At Benefit Strategies Inc., critical illness insurance is just one aspect of our executive benefit solutions to help balance the benefit requirements of owners and managers.

If you have more questions that this critical illness insurance FAQ couldn’t answer, please call 1-780-437-5070 to speak with one of our executive benefit advisors today, or contact us online for a free Consultation.

Young woman with laptop at a table smiling.

Tips on Transitioning From Fixed to Custom Benefit Plans

The overall trend in the last several years for employee benefits is to move away from traditional or fixed benefits to more tailored, custom benefit plans.

One example is Health Spending Accounts that allow employees to choose the benefits they want. And, since employers only have to pay for the benefits that have been used, employers can save.

There are several reasons why Canadian companies are moving to custom benefit plans instead of traditional plans:

  • Cost Savings – Employers are able to control costs by setting benefit limits each year.
  • More Desirable – Employees are empowered to choose how to spend their employee benefits allowance, which helps them feel like they are getting better coverage.
  • Flexibility – Custom benefit plans are suitable for diverse workforces as employees can choose which benefits they actually need and want.

In this article, our Edmonton employee benefits brokers will offer four important employee benefits tips to consider if you are thinking of switching from a traditional benefits plan to more tailored, custom benefit plans.

1. Consider a Health Spending Account

Health spending accounts are great for employers because they can set the health spending amount. Employees in turn are able to choose where to spend their money. Be sure to read our article What Can a Flexible Benefits Plan Offer Your Employees?

Many companies transitioning between traditional and custom benefit plans ask this question, “What happens in the case of serious, costly medical issues or emergencies?”

Employees can often anticipate their needs for eyeglasses or prescription medications for the year, but what happens if there is an unexpected medical expense that exceeds their health spending account?

One solution is to keep a basic traditional plan and have a health spending account as an “add-on” for employees. Many employers are choosing to pair the custom benefit plans with a catastrophic covered or pooled plan. This ensures that employees are covered for more eventualities.

2. Check Out Administrative-Services Only (ASO) Plans

If your main reason for switching to custom benefit plans is cost savings, you may want to consider an ASO Plan.

ASO Plans are funded by the employer and administered by a third party. The employer only pays for what is used because the plan costs are based on actual (not anticipated) claims. If fewer claims are made than anticipated, the employer gets to keep the surplus.

The only downside to this option is that the employer will be left owing if there are any claims above the premiums paid for the year. Basically, the insurance company will predict anticipated claims for your workplace and if you exceed that amount you will be responsible to pay the deficit.

If you plan to offer employee benefit plans year over year, this option often ends up being slightly more cost effective.

3. Clearly Communicate the Potential Changes with Employees

Change in the workplace is often met with resistance regardless of how big or small the change is.

Be sure to work with your insurance broker to put your benefit plans into action to help make the transition very smooth. Employees may be worried the new custom benefit plans do not offer the same coverage or value. Be sure to outline the advantages of the change and confirm that each employee understands what they are getting under the new plans.

4. Find a Balance Between Employee Satisfaction and Bottom Line

There is always a fine balance of cost savings for the employer while still offering sufficient benefits plans to make sure your employees are well taken care. You should also consider making your traditional benefits plan or your tailored benefits plan a part of a competitive compensation package.

Can you attract and retain a qualified workforce with your current benefits plan?

About Benefit Strategies

For over four decades Benefit Strategies Inc. has been working with corporations and business owners throughout Alberta and Canada’s Western provinces to create cost effective employee benefits plans that reflect current market conditions.

Want to learn more about the differences between traditional and tailored health spending accounts? If you wish to discuss how to transition over to custom benefit plans, please call our office in Edmonton, Alberta at 1-780-437-5070 or send us an email.

Stacks of coins showing increasing growth or profits.

Tips for Minimizng Employee Benefits Cost Increases

Minimizing employee benefits cost increases has always been an insurance industry concern. Let’s look at our options.

Why are benefit costs increasing?

The main reason for the rising cost of employee benefits is because of the skyrocketing costs of specialty drugs. Many of these specialty drugs are new to the market in the last five years and are now starting to affect insurance premiums. Insurance companies do not want to take on the risk of expensive drugs used to treat cancer, rheumatoid arthritis, multiple sclerosis, and other complex illnesses.

Most experts believe that minimizing employee benefits cost increases will be an ongoing concern for employers as the costs of benefits continue to rise. Rather than fret about how you will be able to continue offering competitive employee benefit plans, call our Edmonton employee benefits advisors at 1-780-437-5070. We will be able to offer you creative solutions for reducing the costs of employee benefits.

In this article, our Benefit Strategies advisors will discuss several creative solutions for minimizing employee benefit cost increases.

1. Apply a cap to the drug component of your benefits plan.

Since we know that the rising costs of employee benefits are due to the rising cost of specialty drugs, many employers are placing a cap on the drug component of their employee benefits plan. Many Canadian provinces offer government plans to cover specialty drugs. For example, Alberta Health offers health benefit plans for eligible Alberta residents. In British Columbia, PharmaCare exists for eligible BC residents.

Many employee benefit plan providers are willing to help employees get access to these government programs in the case of unforeseen circumstances.

2. Check out Hybrid Health Spending Accounts.

You no longer have to settle for a defined employee benefits plan or a defined contribution plan. You can have the best of both worlds with a hybrid health spending account, a model that combines a traditional benefits plan with a health spending account. Hybrid employee benefits plans work great for small businesses who buy plans according to their specific needs while limiting employee benefits costs increases. This strategy can go a long way in minimizing employee benefits cost increases.

3. Pay what you actually use with an ASO Insurance Plan.

Many companies who plan to offer employee benefits for the long term are choosing Administrative Services Only plans or ASO Plans. ASO insurance plans are flexible, allowing the employer to fund the plan that is administered by a third party. At the end of the month or year (depending on the ASO plan), the administrator will calculate actual claims and either refund the employer (if the plan was underused) or bill the employer for any overage.

Over time, these ASO insurance plans are often more cost effective, although some businesses may be reluctant to use them because of unpredictable monthly claims.

4. Understand the reasons for your increasing benefits plan costs.

As your benefits plan broker, Benefit Strategies is committed to minimizing employee benefits cost increases. We can help break down and explain the rising costs of your employee benefits plan. For instance, many times the benefits costs increases are occurring because of claims made by spouses and dependents. Once we identify the reasons behind the rising costs we can likely help provide several solutions to minimize any further cost increases.

5. Shop around among different insurance benefits brokers.

If you feel your benefit plan premiums have increased too much you can collect quotes from other insurance benefits brokers. Most of the time it is more beneficial to stay with your company and ask what they can do to lower your rates. At the same time, by making yourself aware of the competitive plans and pricing available on the market you are being a smart and informed consumer. Even if you don’t end up switching providers, you will have the peace of mind that you aren’t paying more than necessary.

About Benefit Strategies

Benefit Strategies Inc. has been providing employee benefits advice to businesses and corporate clients throughout Western Canada for over four decades. Let us help you find creative ways to save money by minimizing employee benefits cost increases. You might also like our recent post on How Benefits Plan Administrators Can Curb Rising Costs.

To learn more, please call Edmonton’s Benefit Strategies Inc. at 1-780-437-5070 or send us an email.

You might also our article entitled Budget Employee Benefits for Small Business.