Managing Employee Benefits Like a Co-op

EO Ottawa
—
The Beneplan Co-operative
!
!
Managing employee
benefits like a F500 co.
1 November 2014
Beneplan.ca All rights reserved Beneplan Inc 2014

Who are we?
Bayview
Glen School
Perennial
Audit
Committee

Agenda
!
- Strategy
- Structure
- Reducing premiums w/o
cutting benefits
- Morale boosters
3 November 2014

Why do you even have a
benefit plan?
!
!
Why not give ees cash?
4 November 2014

Which plan which will
attract the best talent?
!
!
5 Photo credit Richard Pardon / 500px
!

Teachers want travel insurance
!
!
6 Photo credit Lori Denehy 500px
!

White collar needs psychologists
(but wont’ ask for it)
!
!
7 Photo credit Jesus Municio/ 500px
!

Depends on your industry.
!
Teachers want travel insurance.
!
Truckers want disability insurance.
!
Fitness pros want physiotherapy.
!
New immigrants want dental.
!
White collar needs psychology (but won’t
tell you).
8 November 2014

Which benefits do
employees want?
!
The young want DEN/PAR/VSN
The old want DRG/LTD
Regardless of the industry.
9 November 2014

!
!
!
!
!
!
!
!
How do you please them all?
10

Should you ask your
employees which benefits
they want?
!
!
Never.
11 November 2014

The CRA invented our industry.
!
!
First, you must understand that
all you are doing is hiring an
insurance co to pay your claims.
12 November 2014

Insurance companies are
paranoid.
!
They think that we are trying to
take advantage of them.
!
When really, we think it’s the
other way around!
13 November 2014

!
Our industry is the only one where you can give someone $100k and
they are by law not allowed to show you where that money went!

To what extent should
employees share the cost of
the plan?
!
Employees should never pay
a portion of the premium
(Disability excluded) - tax
inefficient.
15 November 2014

Instead:
!
Share costs at POS.
16 November 2014

Driving down premiums.
17

Where did your $3,000 per
employee go?
18 November 2014

How insurers set premiums.
!
19 November 2014

Group benefits are not
insurance.
!
They are the opposite of
insurance.
20 November 2014

Premiums are set in the
same way that your hydro
bill is calculated.
!
Usage == Premiums.
21

The Jargon.
!
22

TLR
!
IBNR
!
Trend / Inflation
!
Broker commissions
23 November 2014

Refunds on…
!
Life Insurance
Stop-Loss Premiums
29 November 2014

Ask for annual refunds of
premiums if
claims premiums.
!
!
Ask if claims premiums,
can they absorb that risk?
30 November 2014

Retail Sales Tax Rebate
31 November 2014

Drug Rebates from
Manufacturers
(Reformulary)
32 November 2014

Oral chemo
!
Biologic Drugs
!
Trillium Drug Program
!
Drug co-insurance / caps
34 November 2014

Patient assistance programs
35 November 2014

What do you do when an
employee needs to take a
sick leave?
Never pay their full payroll.
Top up EI if you can afford it.
36 November 2014

EI Premium Reduction
Program
37 November 2014

http://www.servicecanada.gc.ca/eng/cs/prp/010.shtml

http://www.servicecanada.gc.ca/eng/cs/prp/0300/0300_170.shtml
Discount
(multiply x payroll)
New multiplier
(Instead of 1.4)

E.x.
!
$1 million in payroll
x
0.33% discount
= $3,300 annual savings
40 November 2014

http://www.servicecanada.gc.ca/eforms/forms/sc-nas5022(2014-07-004)e.pdf

Avoiding over-insuring the
LTD benefit
42 November 2014

CPP Disability

Instead of:
“66.67% of salary to a max
of $6,000”
!
Use:
“66.67% of the first $2,250,
50% of the remainder, to a
max of $6,000”
44 November 2014

Owners’ LTD - the dilemma
!
“85% all source maximum”
45 November 2014

Boosting Morale
!
…at little cost
48 November 2014

• Formed in 2000 based on customer demand
• 250+ member-owners
• Members are Ontario SMEs w/ 20-200 employees
• Annual growth rate 35%
• 60% blue-collar industries; 40% white collar
• The only benefits co-operative in Canada of its kind

Patronage Dividends
• On average, 10% of premiums are refunded as patronage
dividends
• 80% of members receive dividends
• Other 20% of members have deficits (claims premiums)
absorbed by co-op
• $8 million in distributions since 2000 as of CY2013
• Source of dividends: health, dental, life ins premiums, tax rebates
• Future sources: drug rebates, paramedical rebates

“As an auto-parts supplier, business has been tough. The $30,000
dividend we received in 2009 helped us through payroll.”
Clover Tool Manufacturing

“Our teachers pay half the premium. We used our $38,000
dividend to subsidize gym memberships for them.”
Bayview Glen School

An Engaged Active Board of Directors
2013 Board at the AGM

Our Co-operative Values
• 100% Transparency
• Full accountability
• Decision making focused on members first
• Helping small business owners
• Low premiums enabled by mutual ownership

Who Runs Beneplan?
A small business, co-operative member, 10 employees, since 1989

Thank You
!
!
Yafa Sakkejha
General Manager
yafa@beneplan.ca
!
150 Ferrand Drive Suite 500
Toronto Ontario M3C 3E5
1.800.387.1670
beneplan.ca
57

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