Hybrid was the buzz word of the day at the IFB Fall Summit.
Speaking to a full house at the Toronto Congress Centre on Tuesday, Robert Crowder, president of the Benefits Trust, explained to advisors why hybrid-benefit plans are the new way for businesses, as traditional plans fall short of accommodating a diverse employee base with a one-size-fits all model.
“A benefit plan is a promise between an employee and a group of employees,” says Crowder. “Traditional plans are making clients frustrated because generally speaking they don’t understand them and they (the plans) don’t cover what they want covered.”
Crowder explained how hybrid-benefit plans can help advisors maximize their profit and beat out the competition, while giving businesses control over their plan costs and employees the flexibility to choose the benefits they want through a healthcare spending account (HCSA).
When pitching hybrid-benefit plan to clients, Crowder recommends a three-step process.
Have the client identify the groups within the group of employees and determine benefit spending for each group.
Decide how much of a role Healthcare Spending Accounts (HCSA) will play in the plan.
Make the plan meaningful (i.e. Is a contribution coming from employee earnings or a sales revenue? Will a minimum amount be allocated for new employees and a larger amount for employees you want to reward or retain? Will top executives receive 100 per cent coverage?)
“A hybrid plan is a customized solution with flexible components,” he said. “It’s not a commodity.”
According to the Benefits Trust, hybrid-benefit plans can help companies achieve compensation and budget goals, and are also less susceptible to premium inflation and less affected by the volume of submitted claims.
“The client can save a significant portion of money on the lion’s share of benefits,” said Maureen Campbell, an insurance advisor with Adriatic Financial Services Ltd. in Aurora, who attended the Benefits Trust session. “It’s a trend for larger companies where costs are predictable and cash flow is stable … it’s riskier for small companies if cash flow varies and there is a risk of defaulting.”
The Benefits Trust addresses this risk with its SelectFlex plan, which caters benefit plans to businesses with an employee base as small as three people. Seminars introducing this plan will take place on November 7, December 5 and 10. Visit http://thebenefitstrust.com/register-for-our-introducing-selectflex-seminar to register.