Group Benefits 2013

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Group Benefits 2013

HRC News

Group benefits are becoming more and more relevant in the business world. Benefits are crucial in attracting and retaining employees, which ultimately reduces turnover costs. Many benefit plans are cookie-cutter and offer the same coverage to all employees. But in today’s dynamic work environment how can a generic plan stack up against a custom plan suited to your unique business? Quite simply, it can’t.

Custom Group Benefits

Custom employee benefit plans and more specifically Administrative Services Only (ASO) Plans are a popular and cost effective way to manage group benefits for any business. ASO plans are designed in a way that the employer pays a monthly installment towards group benefits. Coverage through ASO is similar to traditional benefit plans as it still covers:

  • Claim costs of conventional medical and dental claims
  • Protection against catastrophic risk including; life insurance, out of country medical, and long term disability
  • Administrative fees of managing the program

Where ASO plans differ is through the ability to adapt the monthly budget to better suit your business. If your monthly claims exceed the budgeted amount, you must pay the deficit. If the monthly claims are not as costly as anticipated, you keep the remainder. A further advantage to consider are the competitive administrative fees which can be as low as 12% compared to fees of traditional benefits plans costing upwards of 35%.

Stop Loss Insurance

Incorporated into ASO plans is Stop Loss protection. This premium shifts the potential payments for catastrophic risk to the insurer and not the insured. Further, Stop Loss is a fully pooled benefit meaning that premiums are not based on your specific claims history, which is very cost effective. Deductibles for Stop Loss protection can be as low as $5000, ensuring your company’s risk is covered in case of a catastrophic incident.

ASO VS. Traditional Policies

Illustrated here is a comparison between traditional and ASO group benefits.

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