An Introduction to Employee Benefits

Michael Spath of Kapnick Insurance discusses employee benefits with expert Ian Burt. Here are highlights from that conversation.

Michael: I am Michael Spath. This is Startup Nation Radio, Ask the Expert. I’m filling in for Jeff Sloan here today. And we are talking to Ian Burt, an employee benefits consultant at Kapnick Insurance. Ian, thanks very much for joining us. We’re gonna talk about employee benefits today.

Ian: Well, I’m happy to be here. Thanks for the invite.

Michael: Ian, let’s just start off with, what is an employee benefit?

Ian: It’s that thing that employers want to have–and really need to have–to compete in the market space for employees. I mean, it’s all about attracting and retaining employees.

There’s only so much money you can throw at a human. I know all employees want more income. Everybody asks for a pay raise, but ultimately for a business owner to stand out, you gotta do that little thing that’s a little bit different. Make the employee’s life just a little bit better than they can get somewhere else. And hopefully that employee will ultimately consider that when they’re looking at the other job offer for 50 cents or a dollar more an hour.

By offering that benefit you’re making their life better.

More Money Isn’t the Only Thing That Will Attract Quality Employees

Michael: When people look at jobs, it is often the benefits package that they pay a good amount of attention to. What type of health benefits do I have? What type of dental benefits do I have? What are the extras that are in there? Because the medical and dental are usually the standard, but what are the extra things that this company is gonna offer me?

Ian: Yeah. Before we get into the extra stuff, usually employees are looking at salary number one and then benefits become number two.

But when you have an employee that’s already there, salary drops all the way down on those surveys to six or lower. Benefits become that one or two slot if they stay. So that’s where it becomes really important. So yeah, you need the medical benefits. You need the dental, the vision. There are a lot of other things employees are looking for these days. Life insurance through an employer is the easiest and cheapest thing for the employee to have. And frankly, for the employer to offer, to tease some additional money, heaven forbid something happens, right? Let’s take care of your family.

What happens if the employee can’t show up to work? So, we want that disability. We wanna make sure that employee’s are not gonna become destitute.

Michael: This is complicated stuff and it’s your job to really break it down and make it easier for the employer and really make it easier for the employee to understand how many different options you have.

Ian: Yeah, a hundred percent and you can actually have a diminishing intent. You want to give the employees options. Millennials want something completely different than my generation X people, and want something completely different than the boomers who are at the end of their working years. We’re all looking through different lenses, cuz we have different life.

As an employer though, you wanna make something available to have them both be equally happy and appreciative of that. So you absolutely have to have a choice. And that’s where voluntary benefits come in.

Now that term a couple of decades ago used to just mean these ancillary supplemental medics and things that if you got injured, you got cash. Or if you got diagnosed with cancer, you got some cash. Voluntary benefits now have become so much more in that you want to have.

Let me have three different medical options. Let me have two different dental options. We have one, maybe two vision options for the employee to pick from. And then we, we get into those other menus. Do you want the disability? You want the life insurance? Do you want the FSA? Do you want the HSA?

And what does that all mean though? That’s the hard part. So we really need to interact with the employee, teach them how to look at this stuff, teach ’em how to do that math to make the best decision for their family.

Just yesterday, I was talking with an employee who was comparing between a 2000 deductible PPO, 3000 deductible HMO. Now, the way these plans were designed, all the other copays were the same. Now he was going for PPO because he was scared of what he thought he knew about the HMO.

The $3,000 deductible hasn’t come into play in his life for the past couple of years, cuz he hasn’t had a hospitalization or a surgery. But he goes to the physician almost monthly. He needs diabetic resources, but all those are taken care of in the copays.

So when he saw that the copays were the same, the deductibles, yeah, a little bit different, but he was saving literally $400 a month for his family. Between these two plans. Then you do the math, right? 400 times 12 is $5,000 a year versus a thousand extra bucks on the deduct. Makes sense now.

Michael: Yeah, absolutely. I’ve been to some of these open enrollment meetings that you guys do. And I was blown away to watch an employee benefits consultant at Kapnick. You are here to help the employer, here to help the employee. And you’re not gonna walk away satisfied until you know that everybody understands what they need to understand.

Because again, this is their medical, this is their dental. This is their vision. This is real, big time stuff for anybody who has to go see a doctor, go into the hospital for something, you know, your eyes start failing a little bit. What am I doing with my prescriptions? What am I paying for? What type of options do I have? These are the big decisions in our lives.

Ian: Then we get two, three months down the road, they just have a deduction coming to the paycheck. They forget about it, right? So we give ’em those resources, so they can go back and revisit the information we gave them three months ago. Let’s rewatch that. Let’s call Kapnick so we can get that information once more. We’ll tell ’em the same story over again.

Give ’em flyers that they can hang in the break room. Reminding of what’s an FSA, what are my vision benefits? When we get to December, we say, hey, don’t forget you have an annual maximum in the dental plan or the vision plan. Have you used it up? Let’s not let that go to waste.

Michael: To finish up here for you, let me ask you this: So I’m an employer and I say like, ah, I’ve only got five employees. I don’t need employee benefits yet.

It’s a very competitive place out there right now. And people have a lot of options. If you wanna bring someone in, whether it’s one employee or 1,000 employees, you wanna talk to an employee benefits consultant at Kapnick.

Ian: There are a lot of great options out there.

And, and to kind of steal a quote from Brian Tracy, a trainer: The biggest objections that employers would have, what happens if I train my employees and they leave, to which Brian would say, well, what happens if you don’t train them and they stay?

OK. What happens if I bring in benefits on paying a couple hundred bucks a month for premium, and then they leave after a few months, or it doesn’t work? Well, what happens if you don’t? If you have to replace that employee, how expensive is that gonna be? It can be easy math. It can actually be pretty easy math people don’t realize it, but that’s why we have to have that conversation is share what the value can be, how to place it, to make sure you can attract and retain those key employees.

Michael: Especially great stuff, Ian. Thanks very much.

Visit kapnick.com for more information or call 888-263-4656.

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