Employee Benefits Continues To Be A Significant Cost For Employers
We know that health insurance is a key component of compensation for most Canadians, it comes down to value. Employees would rather have a certain salary with benefits than a higher salary with no benefits. For employers concerned about affordability, it’s about finding the right balance between the two.
Employers who are not sure they can afford to offer benefits at all should consider a few things.
- One is the ability to attract and retain employees
- there is the connection between health and productivity — which means benefits may be good for the bottom line.
- Premiums are tax deductible as corporation expenses
- Peace of mind for families
- Pride in their employer
- Additional protection above personal programs
A new benchmarking survey conducted by The Conference Board of Canada shows that the average cost of providing benefits for employees is $8,330 per full-time equivalent. Employers spending on benefits programs for employees represents a significant cost. Most companies with more than 20 employees offer some extended benefits, even if it’s just a basic plan with a capped health spending account. It’s not uncommon for small employers to cover just 50% of a plan’s cost, employees can cover the other 50%, so they sharing the cost. Employees who are partially paying their own way may be less likely to abuse the plan
“With the prevalence of chronic disease and incidence of mental health issues increasing, the costs of benefits have never been higher,” says Nicole Stewart, senior research associate, Leadership and Human Resources Research for The Conference Board of Canada. “Employer-sponsored benefits are valued by employees, but in order to control costs, organizations are going to need to make tough decisions about where to best allocate funds.”
Health spending account can be a good fit for a company concerned about the costs of benefits. No matter what plan type a client chooses, employee education is important especially if employees are sharing the costs.
Employee education represents an excellent opportunity for Employers and the Group advisors to add value such as offer lunch-and-learns, or coffee-and-learns, to explain how plans work and what causes costs to rise.
Any questions on how Ardent Wealth can help on your group plans/benefits please give us a call at 403-457-4142.