Ten most Common Mistakes Business Owners Make With Their Employee Benefits Programs

1. They're buying the wrong insurance
Employers typically design their benefits program to meet the needs of a very small percentage of their employees. They're buying an SUV when all they really need is a compact car.

2. They are not making their employees accountable for controlling healthcare costs
With the copays associated with traditional health plans like HMOs and PPOs, employees have been shielded from knowing the true cost of care. With consumer driven health plans (CDHPs), the employee (consumer) makes more educated decisions about their health care when covered by a high deductible plan.

3. They don't account for all the hidden costs
The amount of time most employers spend administering their benefits adds up to thousands of dollars. By shifting many of the administrative tasks to a third party, companies can save more than $10,000.

4. They don't understand all the risks involved with offering employee benefits
With regulations evolving so rapidly, few businesses are aware of all the risks and significant liabilities involved with offering an employee benefit program. There have been dozens of court cases where one simple COBRA mistake, such as a lack of proper proof of notification, cost businesses millions of dollars.

5. They are not aware of how they are discriminating against themselves
Most group life and long term disability plans discriminate against highly compensated employees who are typically your business owners, partners, and key employees.

6. Their employees don't understand the true cost of their benefits
Only 36% of employees give their companies' benefit package high marks. One reason is that the employer fails to communicate the large investment they are making in company-funded benefits. In fact, 28% of workers believe that their company spends less than $1,000 annually per employee. In reality, companies spend an average of $3,100 per employee.

7. They are not educating their employees about how to use their benefits
Employers are not spending the time to educate their employees on what is usually the second most expensive part of running a business. This leads to employees not understanding and appreciating the full value of the programs in which the company has invested. In many cases the employer is wasting an opportunity to build employee morale and loyalty.

8. They're not getting enough diversity in their benefit program
Business owners are challenged with trying to meet the diverse needs of their employee base. One size does not fit all. Many have found that offering voluntary benefits is an economical way to enhance the attractiveness of their overall benefits program.

9. They are making decisions based on "product" choices not solutions for a total program.
Employers are not looking at their benefits as an integrated program. They are buying based on the product or the price which is a "band aid" approach. This disjointed strategy can create overlaps and gaps in their coverage and program.

10. Working with a sales person not a true benefits consultant
The industry is filled with individuals "pushing" products. There is a big difference between selling a product and providing the best solution based on a client's needs.