When you’re a business owner for the most part fixed costs are good, unfortunately the way healthcare is that part of your business is anything but fixed. As time goes on people get married, divorced, and have children, and your plan becomes more and more costly but your employees don’t always see the value.
Repeat after me, “People see in dollars, NOT percentages”.
I used to work with an investment advisor, who told me a story once. When he was starting out, he was evaluating client’s portfolio and asked the woman (In a down market) if she would be happy with a 10% rate of return on her $300,000 investment. The woman thought for a second and said to him “That’s the best you can do?” The advisor was confused, as no one had ever given him that response before. He then asked the woman “would you be happy if I was able to earn you $30,000 a year in interest?” The woman almost did a double take and said “Are you kidding me? That would be incredible”. The morale of the story is… PEOPLE SEE IN DOLLARS NOT PERCENTAGES.
So, how does this relate to Employee Benefits? If you’re a business owner and your giving your employees a fixed dollar amount toward their benefits employee can quantify that and will appreciate it. Your employee now becomes aware of the TOTAL cost and will be thankful for what you offer them. Instead of them saying “I have to pay $400 toward benefits” like there getting a discount, there actually saying “My employer paid $400 toward my benefits and I have to pay the other $400”.
Sometimes employees are just handed the bill for there benefits, and they have NO IDEA how much you contribute for them. Let them know, they’ll tend to appreciate you more.
Also, when your renewal comes in and its more expensive, you can say to them “I decided to contribute $420 this year” and you look like a hero.
Where this also helps the businesses save money is you can offer multiple plans but keep your benefit cost fixed.
Here’s an example below:
Option 1 Plan Cost: $1200
Option 2 Plan Cost: $1000
Option 3 Plan Cost: $800
If you decide to pick up 50%, you would pay $400 for option 3, $500 for option 2 and $600 for option 1. But if you offer a fixed amount, you allow your employee to pick which plan best fits there needs, WHILE THINKING OF COST.
Some clients will prefer the best option (Option 1) but they will be willing to pay the difference because the improved coverage means something to them, they will be grateful that they have the choice. Where as someone who doesn’t care about benefits or a drug card (Maybe a 25 year old) doesn’t want to pay more and will be thankful they also have a choice.
Remember… “People see in dollars NOT percentages”.
If you have any questions you can always reach me at 631-338-9917.
Friday, November 20, 2009
Tuesday, November 17, 2009
Why pay for one plan, when you can have two or three…
The startling thing that I’ve encountered with businesses is they only offer one medical plan.
Why do you think that’s the case? Because they didn’t no better!
I bet if I took out 20 business owners and offered to buy them ice cream the majority of them would say yes… but what if I offered to buy them ice cream with the catch that they can only order coffee ice cream with no toppings? Nothing against coffee ice cream but I’m sure I would get more no’s then when I gave them options… Do you see what I’m getting at? People tend to have different needs, and they tend to value different things. So why only offer one medical plan, when you can have two or three for the same cost?
Most employees will be thrilled that you gave them choices. Maybe they wanted a better drug card, or an improved network. Maybe the most important thing to them is paying the least amount possible. When you have employees from different walks of life they have different needs. Does a 25 year old go to the doctor as often as a 60 year old? NO, at least not usually but let them choose!
THE BEST PART IS… THIS DOESN’T COST YOU MORE MONEY!!! THIS IS A WAY TO OFFER MORE DIVERSE BENEFITS TO YOUR EMPLOYEES WITHOUT ANY ADDITIONAL COST!
IF YOUR BROKER DIDN’T MENTION THIS TO YOU ALREADY, YOU MIGHT WANT TO ASK HIM WHY!
If you have any questions you can always reach me at 631-338-9917.
Why do you think that’s the case? Because they didn’t no better!
I bet if I took out 20 business owners and offered to buy them ice cream the majority of them would say yes… but what if I offered to buy them ice cream with the catch that they can only order coffee ice cream with no toppings? Nothing against coffee ice cream but I’m sure I would get more no’s then when I gave them options… Do you see what I’m getting at? People tend to have different needs, and they tend to value different things. So why only offer one medical plan, when you can have two or three for the same cost?
Most employees will be thrilled that you gave them choices. Maybe they wanted a better drug card, or an improved network. Maybe the most important thing to them is paying the least amount possible. When you have employees from different walks of life they have different needs. Does a 25 year old go to the doctor as often as a 60 year old? NO, at least not usually but let them choose!
THE BEST PART IS… THIS DOESN’T COST YOU MORE MONEY!!! THIS IS A WAY TO OFFER MORE DIVERSE BENEFITS TO YOUR EMPLOYEES WITHOUT ANY ADDITIONAL COST!
IF YOUR BROKER DIDN’T MENTION THIS TO YOU ALREADY, YOU MIGHT WANT TO ASK HIM WHY!
If you have any questions you can always reach me at 631-338-9917.
Wednesday, November 11, 2009
Benchmarking, and why it’s important for your business
Every Business Owner regardless of profession asks me the same question…
What is everyone else doing?
See that’s the thing, no one wants to be left out, left behind. Business Owners like to use their peers as a gauge to see how well their doing. How long would it take for the Yankees to make a big off-season signing if the Redsox made a big splash the day before? I’m sure it wouldn’t take too long.
Whether it’s sales, promotion, advertising, and especially their benefits, Businesses want to stay with the pack. The problem is too often the information they receive is clouded. Most businesses, believe it or not don’t know how many people are on their Medical Plan, what the coverages are, or what their being charged. They can pay too much for benefits, carry additional coverages their employees don’t need or want, or simple hurt themselves by not asking the right questions.
That's why benchmarking can be so valuable. My company collects data from every business we work with, big and small. Whether or not we get the client, we take down their information so we can help advise future clients on what’s going on in the benefits world.
Here’s just some of the information you could gain.
• Medical Surveys – Would it shock you to know 50% of employers don’t survey their employees? How do you know what your employees need if you never ask them. You may be paying for benefits they don’t need nor use.
• Eligibility Audits – Over 65% of businesses we interviewed said they never get updates on who’s eligible for benefits. Things constantly change, and that applies to your employees. They get married, divorced; they retire, have children, and even pass away. But the majority of businesses don’t take a moment to even see if there have been any changes in their employee’s lives. It could simply be that your employees are actually unaware that they have to inform you of the change.
BECOME EDUCATED, KNOWLEDGE IS POWER, AND IN THIS CASE, MONEY! JUST BECAUSE YOUR COMFORTABLE DOESN'T MEAN YOUR IN THE BEST POSITION POSSIBLE.
If you have any questions you can always reach me at 631-338-9917.
Related Posts: Should I hire someone to manage my benefits?
Related Posts: Should my company have an employee advocacy program?
Related Posts: What do out of network benefits really mean
What is everyone else doing?
See that’s the thing, no one wants to be left out, left behind. Business Owners like to use their peers as a gauge to see how well their doing. How long would it take for the Yankees to make a big off-season signing if the Redsox made a big splash the day before? I’m sure it wouldn’t take too long.
Whether it’s sales, promotion, advertising, and especially their benefits, Businesses want to stay with the pack. The problem is too often the information they receive is clouded. Most businesses, believe it or not don’t know how many people are on their Medical Plan, what the coverages are, or what their being charged. They can pay too much for benefits, carry additional coverages their employees don’t need or want, or simple hurt themselves by not asking the right questions.
That's why benchmarking can be so valuable. My company collects data from every business we work with, big and small. Whether or not we get the client, we take down their information so we can help advise future clients on what’s going on in the benefits world.
Here’s just some of the information you could gain.
• Medical Surveys – Would it shock you to know 50% of employers don’t survey their employees? How do you know what your employees need if you never ask them. You may be paying for benefits they don’t need nor use.
• Eligibility Audits – Over 65% of businesses we interviewed said they never get updates on who’s eligible for benefits. Things constantly change, and that applies to your employees. They get married, divorced; they retire, have children, and even pass away. But the majority of businesses don’t take a moment to even see if there have been any changes in their employee’s lives. It could simply be that your employees are actually unaware that they have to inform you of the change.
BECOME EDUCATED, KNOWLEDGE IS POWER, AND IN THIS CASE, MONEY! JUST BECAUSE YOUR COMFORTABLE DOESN'T MEAN YOUR IN THE BEST POSITION POSSIBLE.
If you have any questions you can always reach me at 631-338-9917.
Related Posts: Should I hire someone to manage my benefits?
Related Posts: Should my company have an employee advocacy program?
Related Posts: What do out of network benefits really mean
Tuesday, November 10, 2009
Why You, the Business Owner are Partially Responsible For Your Increased Healthcare Costs!
In this day an age everyone, including myself will say how Health care costs have skyrocketed for the small business owner. Regardless of how this legislation works out, the system is still inherently broken and the BUSINESS OWNER PAYS in the form of skyrocketing renewal premiums!
The funny part is, the small business owner is partially to blame!
Yes, you read correctly, THE BUSINESS OWNER IS PARTIALLY TO BLAME.
I’m sure your first response is how, I’m a business owner and I do everything I can. I’ll accept that you’re an expert in your field, you probably research everything about the changes in your field, what the trends are, where the opportunities are, BUT are you working ON or FOR your business?
Most business owners spend there life wearing multiple hats for their business. They’re the BEST at Sales, Customer Service, and every aspect of their business. So, where do they usually drop the ball?
BENEFITS
Too often as business owners we’re quick to pass the buck on the things we don’t know about. We’d rather be focusing the majority of our time on what we know, OUR BUSINESS.
As a business owner there’s actually a lot you can do, well a lot you can ask your broker to do, IF HE CAN.
Audit your health insurance plan – Too often there are people covered under a plan that shouldn’t be, and the business pays. Examples include divorced spouses, children covered under another plan, illegally listed dependants ex.
Have a Medical Director review the claims- This is important for groups 100 and up, typically your renewals are based upon your prior year’s claims. So “Joe Employee” that had a Rare Disorder that put in a large amount of claims in the prior year but has since retired, is causing your expensive renewal, why? Because, they have doctors looking at your claims but YOU DON’T.
These are just 2 of the ways you can save drastic amounts of money for your business in benefits, UNFORTUNATELY most brokers either can’t or don’t understand how to do this. They just quote rates.
People always tell me "There happy with the plan they have in place" or "they love their broker". I tell these same people I loved black and white TV, til I found out there was color.
BECOME EDUCATED, KNOWLEDGE IS POWER, AND IN THIS CASE, MONEY! JUST BECAUSE YOUR COMFORTABLE DOESN'T MEAN YOUR IN THE BEST POSITION POSSIBLE.
If you have any questions you can always reach me at 631-338-9917.
The funny part is, the small business owner is partially to blame!
Yes, you read correctly, THE BUSINESS OWNER IS PARTIALLY TO BLAME.
I’m sure your first response is how, I’m a business owner and I do everything I can. I’ll accept that you’re an expert in your field, you probably research everything about the changes in your field, what the trends are, where the opportunities are, BUT are you working ON or FOR your business?
Most business owners spend there life wearing multiple hats for their business. They’re the BEST at Sales, Customer Service, and every aspect of their business. So, where do they usually drop the ball?
BENEFITS
Too often as business owners we’re quick to pass the buck on the things we don’t know about. We’d rather be focusing the majority of our time on what we know, OUR BUSINESS.
As a business owner there’s actually a lot you can do, well a lot you can ask your broker to do, IF HE CAN.
Audit your health insurance plan – Too often there are people covered under a plan that shouldn’t be, and the business pays. Examples include divorced spouses, children covered under another plan, illegally listed dependants ex.
Have a Medical Director review the claims- This is important for groups 100 and up, typically your renewals are based upon your prior year’s claims. So “Joe Employee” that had a Rare Disorder that put in a large amount of claims in the prior year but has since retired, is causing your expensive renewal, why? Because, they have doctors looking at your claims but YOU DON’T.
These are just 2 of the ways you can save drastic amounts of money for your business in benefits, UNFORTUNATELY most brokers either can’t or don’t understand how to do this. They just quote rates.
People always tell me "There happy with the plan they have in place" or "they love their broker". I tell these same people I loved black and white TV, til I found out there was color.
BECOME EDUCATED, KNOWLEDGE IS POWER, AND IN THIS CASE, MONEY! JUST BECAUSE YOUR COMFORTABLE DOESN'T MEAN YOUR IN THE BEST POSITION POSSIBLE.
If you have any questions you can always reach me at 631-338-9917.
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