Spring's Here – Time for Your Benefits Check-Up

For many, spring sparks a fresh motivation to organize our homes and lives, ensuring all is in good working order.

It’s also a great time to ‘look under the hood’ of your employee benefit program.

Often we initially think of a financial audit: accurate accounting, underwriting that aligns with risk tolerance, and the right claims paid at the right amounts.

However, auditing your program’s governance helps assure your carefully-managed dollars are invested wisely. Governance audits can uncover gaps in program design, policies, and processes before they lead to litigation or derail your people strategy.

Auditing your benefit program design considers the right mix of coverage and services. It requires an examination of the competitiveness, alignment with organizational priorities, and sustainability of your program; supported by clear, compliant and communicated policies and processes.

Competitiveness

It starts with benchmarking your program against comparators: employers in your sector, geography, size, or talent pool. In your analysis, include supportive services (for example, EAP or virtual care), inclusive benefits, and flexibility to individualize coverage, as well as employee/employer premium-sharing.

You may find your program leads in some areas and lags in others. The key is to give greater weight to more valuable or essential benefits (think glasses versus prescription drugs).

Should you be a leader or follower? For the answer, define how significant employee benefits are within your total rewards offering. Some organizations rely more on salary or perks to compete for talent, while others promote generous benefit plans.

Alignment With Your Organization’s Values and Priorities

With an understanding of your demographics (current and evolving) and organization’s commitment to supporting this diversity, gauge your program’s strengths and gaps in inclusive benefits. Also assess whether you offer members sufficient (but not overwhelming) choices to tailor coverage to their needs.

Surveys and focus groups are powerful ways to measure employee awareness and appreciation of current benefits and services and perceptions of what’s missing.

In your organization’s goal for productive and healthy employees, evaluate how your program supports and promotes wellbeing. Ask your disability partners – insurer and occupational health and safety team ‒ which increased benefits or added programs could prevent absences and facilitate earlier recovery and return to work (for example, mental health, resiliency, physical therapy).

Sustainability

If affordability is a concern, identify where per-capita claims are increasing. This data can highlight plan maximums to revisit. For example, generous (or unlimited) orthotics, stockings, or mas- sage coverage may incent some members to claim these benefits because they’ll be reimbursed, not for medical necessity or replacing worn-out devices.

Policies

Compliant, detailed, and well-communicated policies and processes will direct your people leaders to consistent decisions and actions, and ensure eligible employees are adequately protected and informed.

As employers adapt to support workforce diversity, we have seen a renewed focus on accommodating personal time away (see the trending ‘#showusyourleave’ on Linked In). Within your policies for leaves of absence (legislated, disability, and personal) or   following the employee’s death, ensure you have outlined which benefits are continued, as well as the duration, cost to the member or dependent, and implications if they choose to waive coverage or not remit premiums.

Review your hiring and termination letter templates to determine that benefits, eligibility, and required   employee premiums are described accurately, including language reserving your right to make changes with reasonable notice.

Ask your legal expert, insurer, and advisor to review the benefits-related language in your policies, templates, and guides for compliance with legislation, collective agreements, and the insurer’s contracts.

Occasionally employers will con- sider exceptions to eligibility or reimbursement rules to accommodate unique employee situations. Examples include benefits continuation (beyond the notice period) during severance or covering a medical expense that would otherwise be denied or capped. While exceptions should be made cautiously (avoiding the appearance of preferential treatment, or setting a precedent), ensure you have documented the guidelines and authority for approving these requests.

Within your audit, confirm that all exceptions granted are recorded with the member’s name, rationale, scope, duration, and approver – and that you have written endorsement from the insurer. (This list will be invaluable if you change providers.)

While auditing your policies, also review communications that describe your plan (eligibility, coverage, how to access services, options available, and consequences of missing timelines). Are they detailed, current, and easy to locate? Are they user-friendly for members to make informed decisions and for recruitment to share with candidates?

Processes

Canadian employers who fail to diligently administer and manage their benefit programs have faced increased costs, decreased productivity, and lower engagement – or worse, litigation. These outcomes highlight the value of procedures and processes that are compliant, thorough, and followed.

Auditing administrative   practices starts with the common tasks – all eligible members enrolled (and none that are ineligible), earnings changes reported promptly to the insurer, and beneficiary designations filed for all members. Often inconsistencies are uncovered through comparing the insurer’s enrolment data to your payroll and human resources records.

If members have opted-out of the plan (after establishing that this is permitted by your carrier), ensure you have their confirmation of being alerted to implications and steps required to enrol later.

Verify that all eligible or affected members are advised   of   opportunities to increase coverage (e.g. non-evidence maximums for life or disability insurance), when benefits will reduce or terminate, and conversion windows. Your records should include the date and meth- od of communication, and, ideally, the member’s acknowledgement that they were informed.

Also confirm your records contain coverage details for employees on long- term absence, with the insurer, policy number, benefit amount, and age limit. Determining life and disability insurance can become more challenging the longer they’re off work, especially if you change carriers.

Auditing your disability processes can reveal opportunities for your insurer/ provider and internal teams to improve incidence, duration, and successful early return-to-work. The need for this analysis becomes evident when you’re seeing claims trends outpacing the insurer’s benchmark or substantial rate increases.

Examine the adjudication and case management process map with your disability provider (if you don’t have a process map today, ask your provider to create one). Identify time targets to be improved ‒ claim submission, adjudication, communication, stopping pay ‒ and bottlenecks to be removed to expedite assessments, accommodation, and recovery supports.

Next Steps

Auditing your program design, policies, and processes is integral to the good governance of your benefit plan. Uncovering and addressing gaps in these areas early can mitigate legal, financial, and reputational risks, while keeping your program aligned to your organization’s priorities, values, and benefits philosophy.

While confirming you have clear up-to-date policies, procedures, and processes in place is the first step, it’s equally essential to verify they are understood and followed by your internal teams and leadership.

This may seem a significant undertaking. Like spring cleaning at home, the key is creating a plan to work through these areas over time and bringing in support where you need it. Benefits partners (like our firm, bespoke benefit solutions) are ready to help you take a ‘look under the hood’ of your employee benefit program together.

Valerie Travis is the founder of Bespoke Benefit Solutions.