Our client, a diversified holding company in the mining sector, wanted to implement an employee benefits plan for the first time. Although the client only had about 20 employees, the employee demographic was widespread, and encompassed varied age groups. Our client was looking for a benefits plan that would appeal to all of its employees, from millennials to baby boomers.
The company also had a very strict budget in mind, wanting to keep plan costs below 5% of its total payroll expenses. As a smaller-size organization, sticking to that budget was highly important. Volatility in renewals rates was also a concern, so our client wanted to consider benefits plan options which would provide a high-level of price stability.
After taking a closer look and conducting a comprehensive review of the company's needs, our BenefitDeck advisor proposed a flexible employee benefits plan. A flexible benefits plan would allow the employer to assign flex credits equal to 4% of payroll costs. Each employee was assigned a certain amount of flex credits based on their actual salary. Then, employees could purchase the benefits that were most important to them using the allocated funds. At the end of each month, any leftover money goes into their own health care spending account, which can be used for other health related services.
The flexible employee benefits plan was ideal for this employer because it gave all employees the choice to select the benefits that best suited their needs. Each employee receives flex credits equal to 4% of their salary, which averages about $2,800 per employee.
While some employees stuck within the framework of the budget’s offering, other employees decided to upgrade their plan and cover additional costs with salary deductions. This included better dental care, orthodontics coverage, premium health care coverage. A healthcare spending account could also be used to cove some of these upgrade expenses. Other employees chose very basic packages with their flex credits, which leaves more money in their health spending account every month.
The flexibility in choice of this benefits plan enhanced the overall level of engagement and satisfaction of the employees. The flex plan also contributed to greater appreciation towards their employer.
All the employees had a clear understanding and newfound appreciation for the costs of the employee benefits plan covered by their employer. After 6 months of implementation, an employee poll showed that the ability to choose the benefits and level of coverage was instrumental in reaching a 98% plan member satisfaction rate. Our client was equally thrilled about the new plan, since they were able to stay within their original budget.
Additionally, a flexible benefits plan comes with a 24-month rolling rate guarantee. Claims are also pooled with other organizations using the flexible benefits plan, which ensures greater renewal rate stability after this period. Our client can therefore accurately predict their benefits costs and budgets for years to come. Both the employees and employer love their new flexible employee benefits program.
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