Flex Plan Fiasco
In an effort to provide more to their employees, 5 years ago this Canadian services company implemented a benefits flex plan, at the advice of their broker.
It seemed good on paper, employees could choose the program that best suited them and their families' needs. Costs to the company were supposed to stay around the same.
The initial transition to the flex plan took more effort than a typical, but after a few hiccups and education sessions, the flex plan was in place.
From here the plan went largely unchecked. The services company didn’t hear many complaints or issues from staff; their costs were increasing but not significantly more than their previous plan.
Still, they thought there would be no downside to get a second opinion, so they contacted NextGen Benefits.
It's a good thing they did because, upon further review, NextGen advisors brought a number of issues to their attention!
- Their benefits costs were inflated by 15% more than they thought. Flex plans require additional administration from the provider and therefore have hidden higher costs.
- Many employees kept the same coverage they already had before the flex plan. Despite all the education efforts, apps, online portals, and added flexibility most employees just used the benefits they already knew.
- The company was exposed to major cost increases.
- Once these challenges were realized, they wanted to fix them, but the challenge then became, keeping employees happy through the transition to a different plan gain. Because roughly 15% of their employees did choose different programs, this needed to be managed.
How NextGen Helped Them
- NextGen Benefit advisors implemented proven innovations to reduce costs sustainably, eliminate the risk of major increases, and reduce annual renewal increases to half of the industry average
- With the sustainable savings, benchmark analysis and sitting down with the organization's management NextGen developed a benefits program that was highly valued by all employees.
Through proper positioning, education sessions, and recorded webinars both the HR team and employees felt the transition was seamless, logical, and fully supported.