If you don’t know by now, I’m in the group benefits marketplace. I’ve grown my business by being transparent, accountable and acting as an advocate for small and medium-sized companies. I coach clients and their staff on the shared responsibility of having a group benefits plan and giving instruction on how to create a sustainable plan for years to come. So why do so many benefit advisors miss the mark when setting up small business benefit plans?
10 Reasons Why Benefit Advisors Need Improvement For Small Business Benefit Plans
This demographic needs me the most:
Whether it’s a company wondering how to set up its first group plan to helping companies avoid double-digit increases, these companies have the fewest resources and leverage to accomplish this feat.
Dealing with Owners of Companies:
I like dealing with the owners of businesses. They appreciate the transparency and the truth on how the benefits business works. They also understand the potential personal tax implications of setting themselves up as a regular employee participating in their employee benefit plan.
Most of these companies don’t have a designated HR professional on staff:
This means more of the onus is placed on the owner to implement. They don’t have the time to invest the energy in this exercise. I’m a trusted advisor who is happy to hand off the heavy lifting to and advise them on setting things up correctly.
Many have been dealing with Personal Life Agents who dabble in the Group Benefits marketplace:
Many of these guys are great salespeople, but their expertise in the benefits arena is less than great. As a result, I’ve uncovered many potential issues in plan set-up that left the company unknowingly exposed to liability or are not taking advantage of potential tax loopholes available to them. Also, many appreciate that I sat where they have, as a business owner and faced many of the same challenges they face.
The less than 100 employee company marketplace is the most exploited by the insurance carriers:
This group is notorious for facing 20-30% increases by the carriers. As a result, they rarely see the positive side of a low experience year.
Value-added services aren’t offered:
Because of their lack of size, insurance carriers don’t “sweeten the pot” with value-added benefits that larger companies are often provided. They typically don’t see enhancements like disability management, EFAP programs, Living Life payouts are seen as perks saved for the much larger company.
Plan set-up incorrectly:
Whether it’s a flawed plan set-up, eligibility issues or opting out of LTD, Life benefits, many plans unnecessarily expose the client to risk.
These companies could benefit from the services of a TPA:
Many of these companies are dealing directly with an insurance carrier. This group is most vulnerable to the terms and pricing dictated by the carrier. This group would be less inclined to jump carriers by utilising a TPA and benefit from many of the value-added services offered.
Many don’t understand how the benefits business works:
Unfortunately, many business owners I talk to in this demographic don’t understand all the nuances of the benefits business. However, when they comprehend IBNR reserves, different funding models and how much fees are attached to their premiums, they become very motivated listeners.
One plan fits all approach doesn’t work:
Many advisors in this demographic put clients into the highest commission-yielding plans. These are the plans the most profitable for the carriers and usually subject to significant increases.
There are quite a few of us in this marketplace. There are some excellent advisors in this marketplace, but it’s been my experience that many don’t specialize in the employee benefits market.
If you see huge fluctuation or increases in your annual renewals, chances are you’ve been put into a one-size-fits-all solution that is not sustainable in the long run. I’d be happy to review your current plan to ensure it has greater cost certainty and flexibility and allow for more of your benefit dollar to be spent on actual benefits for your employees.
Chris Coulter is the Founder and President of The Finish Line Group. He works with business owners to leverage their businesses to increase their wealth, reduce corporate and personal taxes, create viable succession strategies, enable employee retention strategies and allow them to exit their business on their terms.
Chris’ passion for what he does evolve from the mistakes he made in his first business; by not diversifying his risk and not utilizing many opportunities within his business to create significant wealth. Chris found out the difficult way and now educates business owners on avoiding many of his former oversights and ultimately controlling where their finish line ends.
Small Business Benefit Plans