Making soup is simple: Start with stock, throw in whatever you have on hand, and punch it up with seasonings. Crafting a benefits plan? Not so easy, especially when terms like preferred provider organization, liquor liability, and gross premium don’t roll off the tongue as easily as two-top, BOH, and expo. But think of your health insurance as a flavorful stew, in which plan design, benefits offerings, funding structure, contribution strategy, compliance requirements, eligibility details, wellness solutions, and benefit terms are all ingredients. Without careful consideration of them—as well as your company’s budget and goals for the year—you’ll spend a lot of money and time on your benefits but won’t get the goodwill from your employees that you deserve.
When we discuss a company’s health benefits offerings, we’ll often refer to the plan design. This is an overarching term used to describe the different components of the benefits offerings. This may include deductibles, out-of-pocket maximums, copays, coinsurance, specialist visits, and prescription copays.
As an independent restaurant, finding the right benefit offerings is all about asking yourself what will most benefit your employees. You know your work family, so put some thought into what they need. They will appreciate it. For example, do you know several employees need surgery in the next few months? If so, you may want to offer a copay buy-up plan instead of a high deductible health plan (HDHP). Does everyone wear glasses or contacts? Vision could be a much-appreciated benefit for a relatively low cost. Or do many of your employees have children? A voluntary life option might be a good choice. If employees are considering having children, perhaps you should consider offering a voluntary short term disability plan that includes pregnancy coverage. A survey can be very helpful to determine what coverage your team will appreciate.
You can fund your plan in different ways, regardless of its plan design. This gives you some control over how much you spend and whether or not you are rewarded for a healthy employee population.
Self-funded plans are the riskiest type of insurance plan. They offer some protection from large claims, but usually an employer pays the claims as they come in, which means premiums can vary widely each month.
Level-funded plans are a type of self-funded plan, but have a level premium. The plan budgets for claims, but there is no additional risk (besides some compliance) to the employer. If there are just a few claims per month, part of your premium may even be refunded. Businesses usually have to go through some type of medical underwriting to qualify for these plans.
Fully-insured plans are the simplest type of plan. These plans don’t require medical underwriting, and the premium is only based on employees’ ages and ZIP codes. These are generally more expensive than self-funded plans.
Will you be asking your team to pay for all their benefits or will you be footing the bill? If you’re considering paying for all or part of the benefits, we frequently recommend offering a standard plan with a buy-up option in many of the benefits categories.
For the best benefits soup, you need to ensure your employees are qualified to enroll. Take into consideration any carrier-required waiting periods, qualified life events, and eligibility by class (for example, hours worked or seniority). It’s important to note you need to ensure you’re treating every person in every employee class the same.
Depending on your size, there are many different compliance documents you need to be aware of. From IRS Form 5500, premium-only plan documents, and required notices to COBRA and state continuation laws, you need to know what filings are required of your company in order to avoid some very expensive fees.
It’s essential to consider offering wellness solutions if you have the budget, especially if you are considering a level- or self-funded health plan. Typically, carriers offer some sort of online wellness solution with incentives for employee compliance, which may include premium discounts, gift cards, or health-related goodies (think a Fitbit or Garmin). Examples of other wellness benefits include direct primary care (also called “concierge care”), gym membership, in-house group fitness, mental health support in the form of an employee assistance program or mental health app membership, and access to massage, physical therapy, or acupuncture services.
Ronnie Meyers co-founded FH Insurance with over five years of experience in employee benefits. Prior to working at FH Insurance, Ronnie was an Account Executive with CBIZ, a large national agency where she specialized in small and mid-size local clients (though she’s worked with clients that have as many as 50,000 employees). She graduated Magna Cum Laude from the University of Colorado with degrees in mathematics and economics as well as actuarial certification. Ronnie is passionate about using her mathematical skills to ensure her clients obtain the best rates and plan designs.