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Large employers are able to obtain more favourable pricing on their employee benefit premiums because of their size. Here is how small businesses can use the same negotiating strategies of a Fortune 500 company, and learn some other tactics which are useful for small business owners in Ontario to employ.
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Beneplan.ca All rights reserved Beneplan Inc 2014
EO Ottawa — The Beneplan Co-operative !
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Managing employee benefits like a F500 co.
���1November 2014
Who are we?
Bayview Glen School
Perennial
Audit Committee
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Agenda !
- Strategy - Structure - Reducing premiums w/o cutting benefits - Morale boosters
���3November 2014
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Why do you even have a benefit plan? !
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Why not give ees cash?
���4November 2014
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Which plan which will attract the best talent? !
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���5 Photo credit Richard Pardon / 500px !
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Teachers want travel insurance !
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���6 Photo credit Lori Denehy 500px !
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White collar needs psychologists (but wont’ ask for it) !
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���7 Photo credit Jesus Municio/ 500px !
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Depends on your industry. !
Teachers want travel insurance. !
Truckers want disability insurance. !
Fitness pros want physiotherapy. !
New immigrants want dental. !
White collar needs psychology (but won’t tell you).
���8November 2014
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Which benefits do employees want? !
The young want DEN/PAR/VSN The old want DRG/LTD Regardless of the industry.
���9November 2014
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How do you please them all?���10
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Should you ask your employees which benefits they want? !
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Never.
���11November 2014
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The CRA invented our industry. !
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First, you must understand that all you are doing is hiring an insurance co to pay your claims.
���12November 2014
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Insurance companies are paranoid. !
They think that we are trying to take advantage of them. !
When really, we think it’s the other way around!
���13November 2014
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!Our industry is the only one where you can give someone $100k and
they are by law not allowed to show you where that money went!
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To what extent should employees share the cost of the plan? !
Employees should never pay a portion of the premium (Disability excluded) - tax inefficient.
���15November 2014
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Instead: !
Share costs at POS.
���16November 2014
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Where did your $3,000 per employee go?
���18November 2014
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How insurers set premiums. !
���19November 2014
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Group benefits are not insurance. !
They are the opposite of insurance.
���20November 2014
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Premiums are set in the same way that your hydro bill is calculated. !
Usage == Premiums.
���21
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TLR !
IBNR !
Trend / Inflation !
Broker commissions
���23November 2014
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Refunds on… !
Life Insurance Stop-Loss Premiums
���29November 2014
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Ask for annual refunds of premiums if claims < premiums. !
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Ask if claims > premiums, can they absorb that risk?
���30November 2014
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Retail Sales Tax Rebate
���31November 2014
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Drug Rebates from Manufacturers (Reformulary)
���32November 2014
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Oral chemo !
Biologic Drugs !
Trillium Drug Program !
Drug co-insurance / caps
���34November 2014
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Patient assistance programs
���35November 2014
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What do you do when an employee needs to take a sick leave?
���36November 2014
Never pay their full payroll. Top up EI if you can afford it.
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EI Premium Reduction Program
���37November 2014
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http://www.servicecanada.gc.ca/eng/cs/prp/010.shtml
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Discount (multiply x payroll)
New multiplier (Instead of 1.4)
http://www.servicecanada.gc.ca/eng/cs/prp/0300/0300_170.shtml
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E.x. !
$1 million in payroll x 0.33% discount = $3,300 annual savings
���40November 2014
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http://www.servicecanada.gc.ca/eforms/forms/sc-nas5022(2014-07-004)e.pdf
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Avoiding over-insuring the LTD benefit
���42November 2014
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Instead of: “66.67% of salary to a max of $6,000” !
Use: “66.67% of the first $2,250, 50% of the remainder, to a max of $6,000”
���44November 2014
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Owners’ LTD - the dilemma !
“85% all source maximum”
���45November 2014
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Boosting Morale !
…at little cost
���48November 2014
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• Formed in 2000 based on customer demand
• 250+ member-owners
• Members are Ontario SMEs w/ 20-200 employees
• Annual growth rate 35%
• 60% blue-collar industries; 40% white collar
• The only benefits co-operative in Canada of its kind
The Beneplan Co-operative
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• On average, 10% of premiums are refunded as patronage dividends
• 80% of members receive dividends
• Other 20% of members have deficits (claims > premiums) absorbed by co-op
• $8 million in distributions since 2000 as of CY2013
• Source of dividends: health, dental, life ins premiums, tax rebates
• Future sources: drug rebates, paramedical rebates
Patronage Dividends
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“As an auto-parts supplier, business has been tough. The $30,000 dividend we received in 2009 helped us through payroll.”
Clover Tool Manufacturing
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“Our teachers pay half the premium. We used our $38,000 dividend to subsidize gym memberships for them.”
Bayview Glen School
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An Engaged & Active Board of Directors
2013 Board at the AGM
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• 100% Transparency
• Full accountability
• Decision making focused on members first
• Helping small business owners
• Low premiums enabled by mutual ownership
Our Co-operative Values
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Who Runs Beneplan?
A small business, co-operative member, 10 employees, since 1989
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Thank You !!
Yafa Sakkejha General Manager
The Beneplan Co-operative 150 Ferrand Drive Suite 500
Toronto Ontario M3C 3E5 1.800.387.1670
beneplan.ca
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