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The Difference Between a Benefits Discount And A Cost-Contained Benefits Plan Thumbnail

The Difference Between a Benefits Discount And A Cost-Contained Benefits Plan

Ever been to one of those stores where just about everything is on sale?

Big, red signs as far as the eye can see, each promising the moon about how much money you can save if you simply ‘act now’. But those promises always seem to come with a catch, and it’s just a matter of time before the other shoe drops.

False value is everywhere – including in some benefits plans. However, instead of displaying loud signage, benefits providers will offer impossibly low prices to get you in the door. And it seems so promising, right up until that introductory offer ends and the prices spike back up, making you feel like you’ve landed with a less-than-ideal benefits plan.

The need for a quality benefits plan

Of course, once you’ve bought into a benefits plan, it requires effort (from just about everyone in the company) to change providers again. And that’s why some benefits providers offer that introductory cost - because they know once you’ve signed up, chances are you’ll stay on board, even when those prices do inevitably climb.

While it may be tempting to stay with a less-than-ideal provider just to avoid the frustrating process of switching once again, the advantages of a great benefits package are worth the move. And there are ways to make that transition easier.

To keep your current employees happy, and to keep attracting the best talent, it’s essential to find a benefits plan that appeals to your employees.

The difference between a discount and a cost-contained benefits plan

  • A Discounted Benefits Plan is a short-term solution to rising costs. A provider will offer you a plan worth $X for X% off over X number of years. The big (and frankly, scary) promise here is: ‘You’re getting more for less!’
  • A Cost-Contained Benefits Plan offers a long-term solution to excessively-priced benefits. Instead of a discount, a provider will work with you to match your budget to your needs. You’re getting precisely what you pay for with no smoke-and-mirrors pricing that leads to ‘sticker-shock’ down the road.

Uncovering the hidden costs of a ‘discount’ benefits plan upfront

Of course, shopping for benefits puts you right back in the discount store, with providers all trying to catch your eye with prices so low they’re completely unsustainable in the long-term.

Even with the knowledge that these prices aren’t sustainable, they’re still tempting. After all, you can save a lot even after just one year of discounts. For many  employers, that’s more than enough to get them to sign up.

However, what many  don’t realize is that the costs of buying often outstrip the discounts. Providers who offer these introductory prices often:

  • Raise the price above market later to recoup their costs
  • Provide very limited services
  • Don't keep up with market trends (such as trends in employee benefits)

The most unfortunate part is, these introductory prices pull your attention away from what really matters, i.e.: what the plan actually offers - and whether it will fulfill the needs and wants of your employees and your organization.

Focusing on the benefits that truly matter

Instead of jumping at those temporary discounts, it’s important to maintain focus on what you’re actually purchasing, that is, the benefits package itself. Before you decide on anything, make sure you know what is valuable to your employees today, so you can make the best decision for them – and for your business.

Once you find a benefits provider who will accommodate you to create a plan that works for your budget, stick with them!

–> Because there is also risks to constantly shopping your benefits around

The advantages of a cost-contained plan

Good benefits plans draw the best talent – and they’re more expensive because of that. However, that doesn’t mean they have to break the bank.

Because cost-contained benefits plans are designed around the unique needs of each  employer, they offer flexibility for every budget. This creates a long-term solution that ensures owners won’t overspend on their benefits plan.

Collaborating with trusted providers

The providers we work with employ a variety of solutions to make sure clients don’t get shocking bills. Not only does this allow business owners to better budget for their benefits plans, but they are able to provide their employees with valuable benefits they actually desire.

Making a better change

As an employer, you understand how critical it is to find the correct long-term plan for growth and success. The same sentiment is true in the search for the right benefits plan as it will help you attract – and retain – the best talent.

The safest way to ensure you don’t end up paying for a discount benefits plan that will end up costing you more down the road is to ignore those ‘too good to be true’ offers – and press the providers you choose to work to give you a price you can count on.

If you’re looking for unique guidance for your company’s employee benefits plan, we’d be happy to help. It’s our mission to help  employers find the best financial solutions for them – and a benefits plan you can trust is a major part of this.