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Basic vs. Comprehensive Specialty Benefits: Pros and Cons

By Jennifer S. Kiesewetter, Esq. | Mar 21, 2018

In the past, organizations had a choice between a basic medical plan or a more comprehensive plan — a medical plan with some specialty benefits tacked on, such as dental, vision and critical illness. Today's workplace market demands a more generous welfare package — one that includes a more comprehensive set of benefits.

According to Glassdoor, about 60 percent of people state that benefits are a major factor in determining whether to work at an organization. Additionally, the same survey found that 80 percent of the individuals who respondeould prefer better benefits to a pay raise.

Pros of Offering Specialty Benefits

So, should organizations simply increase their benefits offering? What about the cost to the fund? What are the benefits and cost to the member? Examining the pros and cons of a basic health benefit offering to one including comprehensive benefits is crucial for trustees to determine how to get the best bang for their buck.

  • Members want them - Not only do a majority of people state that benefits are a major factor in determining whether to work at an organization, according to the Employee Benefit Research Institute (EBRI), a benefits package can affect whether people stay at their job. According to the EBRI, 22 percent of workers have reported they have left their jobs because of the benefits package.
  • Keep members engaged - As reported by Entrepreneur, citing a study by Quantum Workplace, engagement with the organization decreased when dissatisfaction with the benefits package decreased.
  • Ease financial burden - Offering additional coverage demonstrates that the fund cares for the member's financial well-being, according to Entrepreneur.
  • Eliminate coverage gaps - Voluntary benefits cover the gaps in coverage that standard health packages may not provide, as reported by The Balance. For example, the health plan may only cover emergency dental repairs from an accident, whereas a supplemental dental plan will cover routine cleanings, fillings, x-rays and other services.
  • Save fund money - Adding voluntary benefits allows organizations to provide integrated health programs that "work together to better identify care gaps and proactively reach out to members and their doctors for improved health outcomes," according to Anthem's most extensive study to date on the integration of voluntary benefits. Further, integrated benefits provide value that lead to a healthier bottom line.
  • Administrative Ease - The administrative simplicity for members of having one point of contact for all benefits and one Member ID card makes health access simpler and allows members to spend less time managing benefits.

Barriers to Offering Specialty Benefits

While there are many good reasons to have these offerings, there's one barrier that trusts should consider when creating their benefits package.

  • Lack of comprehension - Many members don't understand what voluntary benefits are offered to them, and the utilization for certain benefits can be low. For example, according to the EBRI, while 85 percent of members take advantage of their health plan, only 80 percent take advantage of their dental plan, 75 percent take advantage of their vision plan and only 59 percent take advantage of their long-term disability plan.

Customizing Benefits Packages

According to The Balance, the customization of wellness benefits is becoming a continual trend — and the addition of specialty benefits to a health plan is one key way of doing that. Funds can customize their standard health plans with voluntary benefits to tailor them to members' needs. Funds should review the demographics of their workforces when determining what benefits should be offered. Additionally, certain health conditions, lifestyles, work industries or age groups may benefit from certain voluntary benefits. Additional benefits, such as employee assistance programs or additional mental health coverage, would provide customization for members is stressful jobs, for example. Devising benefits according to specific workplace traits not only benefits members, but also the funds.

Such customization of benefits gives trustees the ability to structure funds specifically for the members' needs. And based on employment trends cited above, members desire better, comprehensive benefits packages that aren't cookie-cutter in design. Better, more well-designed benefits that meet members needs will keep members more loyal to the organization. And for trustees and funds, that's the bottom line.

Jennifer Kiesewetter, founding and managing member of Kiesewetter Law Firm in Memphis, Tennessee, is a seasoned attorney in the field of employee benefits. Ms. Kiesewetter's practice includes regulatory compliance and governance with the Employee Retirement Income Security Act of 1974 (ERISA), the Internal Revenue Code and the Affordable Care Act (ACA), in addition to the other federal laws governing employee benefits and health care compliance regulatory law. She's also an Adjunct Professor of Employee Benefits at University of Memphis Cecil C. Humphreys School of Law. Additionally, Ms. Kiesewetter is a frequent writer and speaker on the topic of employee benefits and health care compliance regulatory law, locally, regionally and nationally.

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