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Transforming the 50/50 Cost-Sharing Approach

During a strategic planning meeting early last year with a relatively new client, the issue of unfavourable employee opinions regarding their benefits plan was raised.

This view conflicted with CloudAdvisors digital benchmark report that included their industry and other sectors in BC and Alberta where they compete for talent. It showed their extended health and dental coverage was competitive, placing in the upper 30% of their comparison group.

We conducted an employee survey to gather data from the whole group. Increasing premiums, of which the employees paid 50%, along with a traditional, one size fits all, plan design was not meeting the needs of their people.

The feedback included comments like:

“Why am I paying for things I don’t need?”

“Why am I not covered for the things I want”

“My kids need braces not a chiropractor”

Our benchmarking analysis, which includes benefit costs as a percentage of payroll revealed that, because premiums were split 50/50 with the employees, the company was contributing below the average of their peers.

We posed the question “if your cost remains within the budget you set, could you provide a base level of coverage at no cost to the employees and allow them to add the additional benefits they want through payroll deductions?”

Management agreed, and the decision was made to increase their budget closer to other employers in the comparison group. Within that budget, we were able to design a flex plan that addresses the needs of their demographically diverse workforce.

This past April, at renewal, they received a modest premium increase that was well within budgeted expectations.

Flex benefits plans empower people as individuals by giving them the freedom to personalize their benefits in relation to their needs.

Kirk Davis

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