In a recent meeting with the Executive Director of a prospective client, I inquired about her experience in joining the Organization from a benefits perspective.
This ED had started in the role back in the fall. At the time, she requested details from the Organization's broker about what was offered. Instead of a clear and concise guide, she received a variety of summaries with no explanation how to decipher each of them.
Was I surprised there was no Benefits Guide? No.
This Organization has 5 full-time employees. Most brokers will sell it and forget it when working with smaller accounts, rather than providing them the service they deserve.
In preparing for the meeting, I drafted a Sample Benefits Guide for the ED to review. Not knowing anything about their program, I included popular benefits, like medical and dental. I used the colors from their logo throughout. I included their name; not ABC Company.
I gave the ED the sample.
"This is exactly what we need!" she said.
What is a Benefits Guide?
A Benefits Guide is a detailed overview of the benefits that are offered. It includes, in layman's terms, the rules of the program and what an employee most needs to know. It should be enough for an employee to make an informed decision about what to elect and what to waive. It should answer a variety of questions that an employee will enter your Organization with. The typical Benefits Guide that we produce is between 8 and 20 pages long.
6 Components of an A+ Benefits Guide
Let’s take a deeper look at the components you should include:
1. Eligibility & Open Enrollment
An employee needs to know how many hours they need to work to become eligible for benefits. The typical number of hours per week is 30, however, your Organization may have a different threshold.
Most employees will assume they're allowed to cover a spouse and/or child for certain coverages. Does your Organization also allow them to cover a domestic partner instead of a legal spouse?
They also need to know when they're eligible. The three most common waiting periods are:
1st of the month after date of hire
1st of the month after 30 days
1st of the month after 60 days
Outside of the employee's initial eligibility, provide examples of when they can make changes throughout the year, such as marriage, birth, and loss of other coverage. Let them know that if they don't make changes timely, they'll need to wait until Open Enrollment. Of course, you should be indicating when your Open Enrollment period is.
2. Who Pays for What
"How much is this going to cost?" is likely the #1 question running through the mind of your employee. Hopefully they've asked about costs during the hiring process. In any event, you should provide as much cost-related information possible in your Benefits Guide.
It can look as simple as the chart below, let's say, for dental insurance:
Cost Per Paycheck
Employee & One Dependent
Employee & Dependents
I would stay away from huge and complicated charts. As an example, if your medical pricing is age-based, I would not put the cost for every possible combination of family members in your Benefits Guide. I would, though, put a note as to where the employee can find their personalized cost, like on a benefits portal where they'll make their elections or on their paperwork.
If the Organization pays 100% of the cost for a benefit, say it.
3. Benefit Overviews
We are not going to get carried away with this component. Remember, this is a guide. This is not the certificate of coverage produced by the insurance company.
For benefits like life insurance, it's important to indicate what the benefit is and whether it reduces at a certain age or not. For benefits like vision insurance, it's important to indicate whether there's coverage for just an eye exam and/or what the allowance toward frames and contacts is. Don't forget about how often hardware is covered, like every 12 or 24 months.
While we outline most benefits in a paragraph, certain benefits are better explained via a chart or graphic. As a part of our medical insurance explanation, we'll include a chart that explains what the out-of-pocket cost is for a variety of in-network services. If out-of-network benefits are included, we'll note those as well.
In addition to the deductible (individual and family) and out-of-pocket maximum (individual and family), we focus on highlighting the cost of:
Doctor visits (PCP and specialists)
Testing (lab, x-ray, and MRIs)
Emergency and urgent care
Hospitalization and surgery
I go back to the first part of this section: This is a guide. This is not the certificate of coverage produced by the insurance company.
4. Tips & Best Practices
Most folks have never had the opportunity to hear from an insurance broker about how to best use the coverage they have. While we do benefit orientations, Open Enrollment meetings, lunch and learn sessions, and more, we still include tips in the Benefits Guide, such as:
An explanation of preventive care
How to access telemedicine
The name of the mail-order prescription vendor
How to save on medications
Any limitations on routine dental cleanings
A reminder to review beneficiaries
To cherry-pick one of the above, there is such a misconception about routine dental cleanings. Our brain's have been trained to think about getting a cleaning every six months. While some contracts may allow a cleaning every six months, others could be two in 12 months or two in a calendar year, which are different. Why wait six months to the day if you don't have to?
You may also want to consider adding some information to help folks make better decisions. We do so by inserting some thought-provoking questions. How often do you and your family requirement dental treatment? Do you (or your family) have large dental expenses upcoming? Do you have other dental coverage available to compare against?
5. Carrier Information
Most employees will want to make sure that their doctors and dentists are inside of the network and that their medications are on the formulary. Why not provide the instructions? They don't need to be step by step, as most insurance companies make it relatively simple. You should, though, make sure the name of the network is provided.
In addition, there should be a clear overview of the insurance companies offered and their contact information. This should include the benefit associated with that insurance company, along with the customer service phone number and website, like the chart below:
6. Required Notices
An employer is required to notify employees of a variety of laws that are applicable to their program. Why not kill two birds with one stone considering all of your employees are going to receive this Benefits Guide, thus, also receiving the required notices?
Sample notices you should consider adding, if applicable, include:
Special Enrollment Rights
Women's Health & Cancer Rights
Medicare Part D Creditable Coverage
Medical Loss Ratio
COBRA Initial Notice
Yes, by including these notices, your Benefits Guide is going to be longer than you may prefer. When including them all, it's likely 3-4 additional pages. Printed double-sided, though, you aren't talking about much longer in the scheme of things.