Business owners should seek added value

Marketing or “shopping” plans is certainly an important process. This allows you to determine what is a fair price for benefits. In employee benefits, the price will always be the same from every agent for the same product as long as you provided the same information to everyone. Any changes to that information, whether intentional or unintentional, will have an impact on initial pricing, but the final rate will be the same price regardless of who you buy from, with some exception. If you are a large company of more than 100 employees, there can be some difference due to commission rates, as they are negotiable. For groups under 100, the commissions are standard rates with no room for negotiation.

One way to determine the best value when choosing employee benefits is to ask, “What can you do for us?” Most likely the company will provide you with a “scope of services” or “service commitment plan” to show you value-added services.

There are some other ways companies can provide value-added services as well. In the employee benefits world, many agencies have offered Internet-based services for assistance in financial, human resource and safety programs.

While these are good tools, they really lack the most critical component: human interaction and communication. Computers and the Internet are communication tools, not communicators.

People struggle with keeping many balls in the air at one time. I have never called on a human resources person whose sole focus is human resources. Those people are generally in human resources and have other jobs such as payroll, safety, overall insurance administration or marketing and operations. Each company must do what is best for its needs, find the most talented people it can and operate as inexpensively as possible, but even those well-qualified to do human resources functions still need assistance in keeping up with all the changes and government-imposed regulations. Many employers do not know the ramifications of not keeping proper documentation.

When you look for value-added services, ask questions about what the agency can do for you. Virtually all of us will have some type of service pledge or promise, but who can deliver on tangible value added services should be most important.

Can your agent discuss with you the other risk management aspects related to HR or safety? Can your agent do detailed process audits of your HR functions to help you limit and reduce your risk exposure? Does your agent possess the training and skills necessary to help you implement programs to reduce risk in the workplace for sexual harassment training, Family Medical Leave Act administration, Consolidated Omnibus Budget Reconciliation Act and Health Insurance Portability and Accountability Act administration?

These are just a few things for you to consider as you try to determine the worth of value-added services. Does an Internet site add value? Sure, but what is that worth compared to personal one-on-one communication to determine what real risks you may have? That is for you to decide, but my guess is that most people would rather have communication instead of communication tools.

Mike Scott is an employee benefits and compliance specialist for Barker Phillips Jackson, a 100 percent employee-owned insurance company. He can be reached at www.bpj.com or mscott@bpj.com.