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The Whys and Hows of Strategic Benefits Planning
Many factors are involved in retaining veterinary practice employees in today’s competitive environment. Don’t overlook the critical role of your benefits program.
With rising healthcare costs squeezing an already tight budget, cutting employee benefits may seem like a necessity for some veterinary practices, but doing so could have serious long-term consequences. Implementing a long-term strategic plan for your benefit program will help you find ways to contain or even cut costs while still offering attractive benefits.
Here’s what you need to know:
A strategic benefit plan is a 3- to 5-year plan crafted by you and your insurance broker or consultant that outlines goals, strategies, and action plans with regard to your employee benefits program. In creating the plan, you and your broker should analyze ways to contain costs through various plan improvements.
This methodical and logical long-term approach to benefit planning—as opposed to making decisions year to year—will provide a thought-out road map for your future benefits. In addition to cost control, other areas to focus on may include additional benefits not being offered today, compliance, employee education, and technology.
Advantages of a Strategic Benefit Plan
At the practice level, creating a strategic benefit plan will help with planning both your internal budget and longer-term practice initiatives. It brings human resources and finance (and practice owners) into bigger-picture strategic conversations and ensures that a competitive benefits package continues to be available.
Employees will benefit in many ways. First, when practice costs are cut and contained, employees will likely reap some savings as well. In addition, this type of plan will provide assurance for employees worried about their benefits. Next to job security, employees worry most about their benefits and compensation.
Studies have shown that workplace morale is strongly linked to the quality of employee benefits, so reassuring employees that their benefits will continue is a wise move. The strategic benefits plan can include an employee communication initiative, which will keep employees informed and assured about the future status of their benefits package.
Defining and Measuring Objectives
There are many things you can’t control—the legislative and regulatory environment around healthcare and insurance, for example, or how hospitals and providers price the healthcare services received by your employees—but there are clearly defined aspects that you can control. The action plan might look very different from one practice to the next, but for the money being spent on health insurance and other benefits, all practices are entitled to certain outcomes.
The following objectives, at a minimum, should be among the goals of your strategic plan:
- Employees understand and appreciate the value of their employee benefits.
- Employees are educated and engaged in their role as healthcare consumers.
- Employees are supported on their healthcare journey and have assistance navigating their benefits when needed.
- The practice’s burden is reduced through efficient administrative procedures.
- Compliance risk is minimized related to federal and state requirements enforced by the Department of Labor, Department of Health and Human Services, and the IRS (not limited to just the Affordable Care Act).
- Cost containment is achieved through innovative plan design and alternative funding strategies.
The Bottom Line
Far too often, practices make benefits decisions with no real strategy. As costs increase, practice managers and owners react and look to either move insurance companies or reduce benefits (raising deductibles, reducing copays, or passing more of the cost onto employees) in an effort to decrease costs. The results are unfavorable and this cycle is repeated year after year.
By defining objectives and developing an action plan based on meeting those objectives, you’ll be better organized and feel more confident in your approach to fulfilling your benefits needs.
Cory Friedman is vice president of benefits consulting at Alera Group and leads Alera Veterinary, the company’s nationwide practice dedicated to serving the needs of the veterinary profession. Alera Veterinary has been AAHA’s preferred provider of employee benefit services since 2009 and is part of the VHMA’s Business Alliance Partnership. Cory and his team support hundreds of animal hospitals across the country, helping them rethink their relationship with employee benefits.