Start with a shrinking workforce
A couple weeks ago, I attended a luncheon in which a member of the Federal Reserve Bank mentioned that there is a shortage of labor workers not just nationally, but globally. He said that this trend would continue to rise because many families aren’t having children or they are waiting to have them later in life. Hence, the labor force isn’t being replenished as many others retire. It’s also interesting to note that while many have been encouraged to get a college diploma, the demand for jobs is actually more prominent for trade industries, like electricians, welders, plumbers, etc. Even though much of the need relies on physical labor, IT companies also struggle to find talent. Sometimes, it’s because schools aren’t teaching real life solutions – only textbook ones. This is another reason that the rapid advancement of technology can make it difficult to find individuals with the appropriate skill set. On top of this, unemployment is at an all-time low, which is why employers are looking for ways to recruit and retain the necessary staff.
Add rising healthplan costs
For a long time now, companies have offered group benefits like medical, dental, vision, and 401k. They have not only become standard, but with the affordable health care law, they are also now required by most employers. The cost of healthcare nowadays is astonishing, especially when you consider that the amount most companies contribute to their employees’ insurance is about the same cost of monthly mortgage payments. Simply continuing to pay a higher portion an employer health insurance is not sustainable – the rate of increase would put a company out of business. One avenue that I have encouraged with our clients is increasing the deductible and covering the gap with a supplemental plan. This means not only offering a voluntary benefit, but also actually paying for it. Accident, hospital, and critical illness plan (gap plans) are much more economical and provide the benefit directly to the individual. When you run the savings incurred from moving from a low deductible plan to a high deductible plan, that amount can range from $100 per month on an individual plan to $500 on a family plan. Supplement plans typically run $30 for an individual to about $100 for a family. This allows the employee to still have peace of mind since a secondary plan is in place to cover increased exposure.
Download the 2017 US Employee Benefits Study from MetLife
You see where this is going……
The impact a voluntary plan makes tends to be greater than a medical one. This is because the individual or family gets the payout. When an employee gets sick or hurt, he or she usually doesn’t want that disruption of their lifestyle. This is where the employer becomes the hero and that employee experience gets shared company-wide. Since the beginning of my career, I have seen how grateful employees are when they are able to put food on their table and take care of their families all because their supplemental plan carried them through the sickness or injury they endured. It’s important, however, to truly understand what’s important to your workforce and communicate the strategy correctly. Too many times have I seen employers take short cuts in educating their staff on the true value these plans have to offer or they don’t teach them how to properly file claims. This causes employee dissatisfaction and zero return on investment. Having the right agent is crucial to assist your employees with filing claims since they are not used to collecting the necessary paperwork from their doctor or hospital. I encourage you to reach out to us and let us know what challenges you are faced with as a company. You could be asking yourself: “why don’t I just ask my broker or current provider?” To that I say, “Why haven’t they brought it up?” If you continue to be reactive in these areas instead of proactive, you will always be chasing a solution instead of avoiding the problem.
About the author: Angel joined the AG team in 2016 after partnering with us on several projects for mutual clients over the course of the last decade. Now he brings his charisma, his big brain and his desire to make a positive impact to our collective team of industry leading consultants. Oh, and he is already a published author with the University of Texas Press before he ever picked up a pen for our humble AG Blog.
About AG Insurance: AG Insurance (www.agiainc.com) helps employers and their employees with solutions focused on positive organizational impact and improved employee experiences.