Wouldn’t it be nice if you could say that employee benefits are working just fine, that the costs are in line and under control, that each of your employees has the benefits he or she actually wants and needs, and that benefits administration is a piece of cake? The fact is, there are hundreds of business owners who can say just that. Instead of the old way of doing benefits, they’re sending their employees to a benefits webstore (think Amazon for benefits) where they can buy insurance and the other protections they need.
Employee benefits have been broken for so long and in so many ways, it may be difficult to believe that there could actually be a solution. Smart, usually well-meaning traditional insurance brokers have tried to address the problems only to end up with band-aid answers that involve temporary stop-gap cost shifting and coverage reductions. As one CFO put it, “the double-digit premium increases are killing me. Unpredictable benefits costs make it tough to run the business.” This is the big problem, but it is exacerbated by the fact that benefits administration is expensive and time-consuming and is usually not a core competency of most owners of small and mid-sized businesses. One said it this way, “I have no interest in this HR stuff. I hate it, but I have to do it.”
Over the last couple of years, you have probably heard yourself saying something quite similar. Nearly every business owner, finance manager, and HR person is either beating his or her head against these problems or has given up trying. This was succinctly summarized a short time ago when a Senior Vice President of HR talking about the problems with the current system said, “I’m confused – I don’t know what’s going on – I can’t get a straight answer.”
But now there’s a totally new idea – retail employee benefits – that strips away the confusion, helps employers get the system under control and saves money on your employee benefits. Sometimes call consumer-centric benefits, it is an approach to benefits that actually lets you fix your benefits costs at a level that you can afford and manage and reduce or even eliminate benefits administration costs.
It’s a simple idea: the free choice of consumers to purchase goods and services should dictate economic structure. Consumerism is fundamental to our way of life. Our society is based on this premise, and every experiment in planned economies that stifle consumerism has failed – including the current structure of company-paid employee benefits. It is now possible to apply this principle to create a system in which people, not companies, buy benefits (a topic which we have discussed before).
Imagine a benefits webstore where your people go to buy their benefits, where they find a huge variety of products to satisfy their insurance, health care and financial needs. And not just one or two products but multiple selections in almost every benefits category. It is an empowering, personal benefits shopping experience that gives your people insights into their actual needs, clarity about the true costs of benefits, recommendations on the most cost-efficient way to protect their families, and most of all the purchasing power to get more with the money they have. They buy their own benefits from the “brimming shelves and wide aisles” in the webstore.
Think of it as a powerful e-commerce platform – like many of the best online shopping experiences – that give your employees more of what they want: vast selection, low-price options, and convenience. It is a private benefits exchange that offers a superior alternative to typical employee benefits and health insurance practices. Of course, to make it work, this webstore requires a merchandiser who maintains strong relationships with the leading suppliers in every product category to ensure that the shelves are stocked with the best products at different price points, so that benefits consumers can find and buy what they need.
By opening a webstore, you can actually fix your benefits cost, set a 3- to 5-year benefit's budget, and most important, give your people control over their own benefit dollars. You simply allocate a specific amount to each person to be used for benefits. And this is where the power of the consumer helps to drive costs out of the system. Your employees use the money you’ve allocated to them in the webstore to buy what they need from the vast array of benefits. The price each person is willing to pay for benefits varies widely, but surveys show that when consumers have control over their benefit dollars, they routinely choose lower cost options.
The retail employee benefits and webstore described here are available to you today as part of the Bright Choices® program from the Buffalo Niagara Partnership.This blog post is courtesy of Buffalo Niagara Partnership Vice President Fred Bristol.
