For a small business, a first group benefits plan is a decision about cost, fairness and administration. There are several ways to approach it.
What a plan can include
- Extended health, including prescription drugs.
- Dental and vision.
- Life and accidental death and dismemberment.
- Short-term and long-term disability.
- Health spending accounts, an option that can be adjusted to your budget.
Choices to make
- Who is eligible. Many plans require a minimum number of hours or a waiting period. Rules about which employees are included need to be clear and consistently applied.
- Who pays. The employer may pay all, part or none of the premiums. If employees pay part, how it is done matters.
- How rich the plan is. Higher limits and more coverage cost more.
- Flexibility. Some plans let employees pick from options. Others have a single design.
- Participation. Insurers may require a share of eligible employees to join. Small groups are sometimes treated differently than large ones.
Administration
- Employees' enrolment, changes and terminations need to be kept up to date.
- Claims are handled by the insurer, but the employer is the first point of contact for questions.
- Plans are reviewed and renewed each year, and premiums can change at renewal.
Alternatives
A health spending account gives a fixed budget and can be simpler to manage. Some businesses start with that and add insurance later.
Questions to ask
- What are the minimum participation requirements?
- What happens to premiums at renewal and how are they set?
- How are employees treated if they leave or go on leave?