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In 2020, it has become essential for every firm to routinely evaluate the benefit plans offered to employees. Conducting a plan design analysis, evaluating how benefit dollars are being spent, and assessing the effectiveness and utilization of the plan are all key aspects of this evaluation. Analyzing claims, benchmarking against other groups within your industry, and using employee surveys are a few of the tools and methods necessary to conduct a well-rounded benefit plan evaluation. The ultimate goal of this evaluation and analysis is to provide as robust a benefit plan to employees, while saving the most money as possible.
According to Springbuk.com, some great initial questions to ask when analyzing your current employee benefits plan design are:
Additionally, it’s important to know how effective the employee benefits plan you have in place is in meeting the needs of employees, and if current offerings are being utilized. Under-utilization could mean that the benefits you offer don’t line up with the needs of the employees, but it also could be a sign that there’s an issue with communication. Employees may not be taking full advantage of the benefits offered simply because they aren’t aware that they are available, or perhaps how to use them. An example of this would be a telemedicine benefit. If telemedicine is offered, but utilization is low, maybe that’s because employees don’t know how to use the technology, or aren’t aware that this is a no-cost benefit to them. Answering these questions will help build a plan that works for you and your employees.
There are a number of methods and tools a firm can use to thoroughly evaluate plan effectiveness. Below is a short list of some that should be included in a good benefit plan analysis.
Providing a “menu” of options, with a clear layout of the costs and benefits of each is a great way to reach all of your employees at different life stages. It is best to design “small” plans created to cut costs, “medium” plans to keep coverage similar, but optimize around the edges, and “large” plans that are designed to increase coverage.
Before starting an employee benefit plan analysis, talk to your broker or consultant. Make sure you’re working with someone that has experience conducting assessments for firms in similar situations, and who understands how to design a plan that is both effective and compliant. Use their expertise to build a plan that meets your goals of attracting and satisfying quality employees, while saving you as much as possible.
Rooney Insurance Agency, established in Tulsa, Oklahoma in 1960, has provided customized business and personal insurance and employee benefits solutions to individuals and businesses in the state of Oklahoma and throughout the United States. We work to ensure that each client’s insurance coverage fits their specific needs, addresses their key risks, and protects their valuable assets. For more information on how we can help you today, contact us at (918) 582-0565.