Back to blog
Posted by Vincent Soucy, FCIA, FSA, avril 4 2018
Plan Implementation
How Do Employees Perceive Group Insurance Plans?

Group Insurance Plans

In our discussions with employers, we often realize that they know very little about what their employees think of group insurance plans. Unfortunately, their impressions are frequently based on comments heard from day to day, often from the chief grumblers!

As we constantly strive for solutions to devise group insurance plans that are both attractive for employees and affordable for employers, knowing the opinion of employees is key to this effort!

A few years ago, AGA Benefit Solutions began using an online survey tool to assess this opinion. With almost 2,000 answers from more than 30 different companies, we can now tell you what employees really think of group insurance plans.

Popular benefits

Among everything that’s normally covered by group insurance plans, the prescription drug program is foremost in importance for employees, with long-term disability benefit coming in close second. This suggests that the surveyed employees fully understand the major risk caused by an illness that can lead to high medication expenses or a prolonged loss of income.

Dental care is the third most popular benefit. Employees highly value this coverage, but it is not offered under all plans, especially in small businesses. With ever-increasing dental fees, a family visit to the dentist can often cost more than $500.

Surprisingly, travel insurance is among the less valued benefits. Yet, group travel insurance costs much less than individual coverage. Also, in case of an emergency, such as a heart attack or a car accident in the United States, doctor and hospital fees can easily reach 6 figures! The low popularity of travel insurance may come from the fact that almost 45% of surveyed employees are unaware they have such coverage, although it is included in every plan.

It must be noted that pension plans are also very popular, with more than 85% of employees rating them as important or very important.

Underestimated costs

Most insured employees think group insurance plans cost less than $2,000 a year, which is usually far from being the case. Therefore, employers do not get a fair return on their investment, since employees do not understand the true value of their group insurance plan. An effective communication plan is thus needed, in order to minimally convey the value of the protection provided through the plan. A total compensation statement is also a useful tool to illustrate the costs of indirect compensation benefits, such as insurance and pension plans.

Mixed satisfaction

Only 45% of employees are fully satisfied with their group insurance plan, which is disappointing. However, we find that employees appreciate the coverage, as nearly 40% would be willing to pay more in order to upgrade their benefits. Approximately 7% of insured employees would prefer reduced benefits in order to save money.

group insurance plans and Cost management

In the good news aisle, more than 80% of respondents are aware their claims strongly impact the cost of their plan. Nevertheless, more than 50% of insured employees still prefer brand name vs. generic drugs or simply take what the pharmacist gives them without asking any questions.

Approximately 50% of insured employees are aware that costs vary from one pharmacy to the next. Those of you who see the glass half full will say that this is a good start, while those who see the glass half empty will say a lot of communication work remains to be done.

Time for major changes?

Are you about to review your benefits package and make changes to the coverage you provide? Stop! Make sure you survey your employees before going ahead with unpopular changes that could translate into lower employee satisfaction. Sometimes, employers are surprised to learn that the vast majority of their employees are willing to pay more for their insurance.

If the survey results show that your employees have a wide variety of needs and if your business is large enough, implementing a modular plan may be the right solution to improve employee satisfaction. Implementing a health savings account (HAS) could also be an appropriate way to enhance employee satisfaction and achieve greater flexibility.

Do you need help or advice? Would you like to survey your employees? We invite you to contact an AGA Benefit Solutions advisor now.

Workplace Satisfaction

Holding a Bachelor degree in Actuarial Science and a Fellowship with the Canadian Institute of Actuaries, Vincent Soucy worked for the first 10 years of his career in an actuarial consulting firm where he advised national clients on their benefit and retirement plans. He joined AGA in March 2014 and supervises the consulting and underwriting team.
Vincent Soucy, FCIA, FSA