How to evaluate your company's employee benefit plan

By Todd Pheifer

Benefit plans are an ongoing concern for many organizations. Not only are they expensive, but they are also complex and a major headache for any organization to manage. People are very concerned about their benefit plans, particularly health care coverage. This makes the relationship between the organization and the personnel very tenuous at times when it comes to benefits. Some organizations are constantly re-evaluating their benefits plans due to the competitive nature of cost. Therefore, here are a few ways to evaluate the company benefit plan.

Cost and benefit analysis
Obviously cost is a factor, but simply evaluating whether or not the plan is expensive may be a limited analysis. Benefits plans are almost always expensive. The question is whether or not the organization is getting a good value. This means that the plan has to be compared to other plans and the company has to be willing to make a switch. Sometimes an organization is hesitant to make a change, so they stick with a plan that is familiar. The problem with this strategy is that the health care provider may keep raising the premiums to above-market rates since they know the company is "locked-in."

Population survey
Another way to evaluate a benefit plan is to look at the workforce. Sometimes certain plans may be more appropriate for a workforce that is largely single. Other plans may be a better fit for workers with families. Oftentimes the true ethic of the company will come out in this type of evaluation. If a company says it is "family friendly" but has a health plan that is skewed to singles, there may be a disconnect between words and actions. Therefore, a survey of worker statuses may be appropriate for evaluating the benefit plan.

Finally, a good way to examine the effectiveness of a benefit plan is to survey the employees. Many plans look good "on paper" but when they are actually implemented they do not actually live up to the "hype." Sometimes the doctors are too limited, or certain types of regular needs are not available. Granted, a company cannot give everyone exactly what they want. Otherwise, the plan would be even more expensive. However, by paying attention to the attitudes of the worker population and doing regular cost/benefit analysis, the savvy organization can provide an effective benefit plan while maintaining some level of workable cost.


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