Common Health Benefits Pain Points for SMEs
March 18, 2021
In the business world, a pain point is a recurring problem that causes inconvenience, irritation, or annoyance. We frequently speak of them in terms of how they affect customers. But business owners have their own internal pain points. For example, there are a few associated with small- and mid-size businesses and their attempts to offer adequate health benefits.
How a company deals with pain points matters. For example, one of the external pain points in auto sales is the perception of dishonesty among sales associates. To this day, we crack jokes about used-car salespeople and their lack of trustworthiness. Car dealerships have to work hard to overcome this pain point.
Likewise, the pain points associated with health coverage cause friction between employer and employee. Failing to address the issues only creates a perpetual source of inconvenience or irritation that often leads to employees looking for new jobs.
Among the most common health coverage pain points is the unnecessarily complicated presentation of benefits. Everything from health plan applications to sales literature is littered with complicated language employees just do not understand. As a broker, it all makes sense to you. But to the average worker, you might just as well be speaking Greek.
The reality is that we create this pain point ourselves, at least in many cases. Our industry works so hard to prove we are the authority in health benefits that we end up competing to see who can use the biggest words, the most catchphrases, and so forth. If we would just keep it simple, we would greatly reduce this particular pain point and its effect on clients.
Annual premiums have long been a pain point for obvious reasons. But as time goes by, this one only seems to get worse. Why? Because premium increases are less frequently aligned with the real value of health benefits. Both employers and employees are paying more for healthcare plans that offer less.
Making matters worse is the affordability issue. Employers are forced to cut the quality of their plans in order to keep premiums within their budgets. At some point, the law of diminished returns kicks in. Employees feel like it is no longer worth paying for health insurance because they are getting so little in return for their premiums.
The affordability question can lead employers to switch carriers and/or administrators more often than they would like. With every switch comes the potential of network and service disruptions. Employees are often forced to bear the brunt of the resulting consequences.
It is never comfortable to change medical providers. It is never easy to get familiar with an entirely new provider network. Expecting employees to simply go with the flow when carriers or administrators are changed is not reasonable. Ultimately, they are the ones most affected by such changes.
Finally, some employees choose to opt out of their employer-sponsored health plans because a spouse or partner is enrolled in a better plan. A pain point may be inadvertently created as said employees come to realize they are opting out means forgoing the employer contributions to health coverage.
Their employers would otherwise contribute tens of thousands of dollars annually to provide health benefits. Little or none of that money is paid to employees who choose to opt out, making them feel as though they are not earning as much as their counterparts who are enrolled.
Unfortunately, there are certain aspects to health benefits that employers have no control over. Many of these cause unavoidable pain points. What are you doing to