How Employee Expectations of Health Benefits Have Changed

By: Updated: April 17, 2017

 

Basic employee benefits plans that only cover prescriptions, dental and vision just don't cut it anymore.

In fact, new studies show that if employers want to retain and attract talent, they’ve got to start thinking about one big benefit trend: Customization.

A 2017 study by McGill University found that nearly three-quarters (74%) of Canadian employees say that having benefits customized to meet their needs is important when considering taking a new job, and 72% say that having the ability to customize their benefits would increase their loyalty to their current employer.

Results indicate that the trend towards demanding customization of benefits is growing as new employees enter the workforce. More than three-quarters (76%) of millennials say benefits customization is important for increasing their loyalty to their employers, compared to two-thirds (67%) of baby boomers.

Garth Baulkham, an adjunct professor at the University of Toronto specializing in Human Resources, summarizes the situtation: "Today our lives reflect our preferences. We choose how our coffee is made, create personalized playlists and decide which apps we have on our phones. In all aspects of our lives, we have the freedom to meet our unique needs. The same should apply when it comes to benefits."

Traditional Group Insurance Plans Are Restrictive

Historically, many employers have opted to provide employees with a traditional group insurance plan, which is usually sold by big insurance companies.

It should be noted that big insurance has marketed these traditional plans as absolutely necessary for business owners seeking to responsibly implement coverage. Up until recently, this marketing has achieved very successful results.

However, the fact is that business owners eventually discover that traditional group insurance plans are very expensive, restrictive, and complicated. These plans do not cater to individual employee needs and instead simply provide the same basic menu of options to everyone.

As we have discovered, today's employees are seeking customized health benefits: a plan that permits them to access their own specific health and dental needs. As such, many employees are disappointed with traditional group plans. Some individuals find traditional group plans so irrelevant to their own needs that they don't use them all together.

Add to the mix that these types of plans are expensive, with ever-increasing premiums, along with the fact that they are quite restrictive in terms of eligible claims, and employers are left scratching their heads as to why they chose one in the first place.

A Flexible Solution: The Health Spending Account 

Weary of escalating premium costs, rigid options, a lack of transparency, and now not as effective in attracting employees, smart entrepreneurial employers are moving away from traditional group benefits plans and embracing Health Spending Accounts.

A Health Spending Account (or HSA) is generally considered to be the most cost-effective and flexible method of providing health and dental benefits.

With an HSA, employees can use their credits at their own discretion. One employee with a bad back can spend all his allocated dollars on massage therapy, and another employee with bad vision can spend all her credits on contact lenses and prescription glasses. Employees aren’t restricted to only spending a certain amount of their health benefits on certain categories that they have no use for.

As such, under an HSA, employees aren't complaining about what is or isn't covered, and aren't concerned about restrictive group limits being imposed on them. If they want better coverage for orthodontic work, drug coverage, massage therapy, or any other eligible health category, they get it an HSA.

In short, an HSA delivers on current employee expectations of health benefits: flexibility and customization.

Related Reading: This Health & Dental Plan Gives Canadian Businesses a Competitive Edge

Are you an incorporated business owner with arm's-length employees? Learn how the Olympia Health Spending Account can provide significant value for your employee benefit program by downloading our free guide: The Beginner's Guide to Health Spending Accounts.

Download Beginner's HSA Guide for a small business with employees

Write off 100% of your medical expenses

Are you an incorporated business owner with no employees? Learn how to use a Health Spending Account to pay for your medical expenses through your corporation: 

Download the HSA Guide for Incorporated Individuals

Do you own a corporation with employees? Discover a tax deductible health and dental plan that has no premiums:

Download the HSA Guide for a Business with Staff

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