Offering employee benefits is an important step in ensuring the satisfaction and retention of your workforce. But you may be concerned that a group benefits plan will cut into your profits too severely.
Thankfully, your employee benefits don’t need to break the bank — as long as you approach them strategically. Consider these cost-containment tips for group benefits plans.
Average Cost of a Group Benefits Plan
Whether you currently offer group benefits or are considering purchasing a plan, you should understand the average cost of employee benefits plans. You may be overpaying for your plan without realizing it.
Smaller companies tend to pay less for group benefits than larger ones. The average annual premium for a small business is around 15% of the business’s payroll; meanwhile, the average for large companies is closer to 30%.
On the lower end of the average cost of group benefits, small businesses can sometimes find employee wellness plans for as low as 1% to 5% of their payroll. Your exact cost for benefits depends on your provider and coverage options.
5 Tips for Improving the Cost Efficiency of Your Plan
Approaching your employee health benefits plan strategically helps you ensure that these benefits fit seamlessly into your company budget. Review these tips for making your plan more cost-efficient:
1. Review Your Claims Experience Regularly
If you’re going to pay for group benefits, you want to ensure that your employees get the most value from the plan and provider you choose. Having a bad experience with your provider could decrease your employees’ satisfaction and reverse the advantages of offering these benefits.
Instead, take time to review your employees’ claims processes regularly. Send semi-annual or annual surveys asking employees to rate their experiences with your current provider. If you continually receive poor feedback from employees, it may be time to look for a new provider.
2. Market Your Plan Every Three Years
The plan you chose for your employees 10 years ago may no longer be the most cost-efficient option on the market. To keep up with rising costs, you should shop around for a new plan every three years.
Reach out to Advantage Pacific to request quotes for other plans that may suit your needs just as well or better for a lower price. Alternatively, you may find a more cost-effective plan by switching to a new provider altogether.
If you do find a better price through a different provider, make sure you fully understand how your employees’ benefits would change with this new plan.
3. Remove Low-Use Benefits
Are there benefits in your current plan that your employees just aren’t using? Don’t waste money on these low-use benefits; instead, filter them out to focus your premium dollars on the benefits and services your employees actually use.
In your semi-annual or annual benefits survey, ask your employees to indicate which benefits they used in the past year. If there are certain benefits that employees rarely use, consider cutting them for cost containment purposes.
4. Tailor Your Plan to Your Employees’ Needs
Your employees want to feel like you value their health and well-being, and offering personalized, flexible benefits plans is a great way to show that you care. It can also help you gain the most value from your group benefits investment, improving the cost-efficiency of this expense.
But before you can tailor your benefits to your employees’ needs, you must understand what those needs are. Advantage Pacifics group benefits specialist’s can conduct an in-depth audit of your existing benefits, then suggest improvements to better suit your company culture.
5. Work with a Third-Party Administration Service (TPA)
Running a business is time-consuming, and you may not have enough time in the day to dedicate to your group benefits plan — let alone to improving its cost-efficiency. That’s why many business owners turn to Advantage Pacific’s third-party administration services to manage their group benefits for them.
As a TPA service, we handle all of the administrative tasks involved in your group benefits coverage. You can get help choosing the right plan for your company’s needs, assisting employees in filing claims, and auditing your group benefits regularly to ensure that you continually achieve your goals.
Get a Cost-Effective Group Benefits Plan from Advantage Pacific
Are you ready to enjoy a hands-off approach to group benefits while improving the cost-efficiency of your plan? Reach out to Advantage Pacific today to learn more about our third-party administration services, that we include with all our benefits partners plans at no extra cost.