Because the cost of implementing a Traditional Group Insurance Benefits Program sometimes doesn’t always match up with what a SmallBiz Owner feels is their fiduciary obligation, there has been a growing trend towards talking about the cost of the traditional “Unlimited Drug Maximum”.
For example, a Prospect of mine who has 7 employees, was looking at setting up a Benefits Program for the first time. After going through their options…Health Care Spending Account , Traditional Group Insurance , and Flex Benefits , they decided that they wanted to take a closer look at the Traditional Group Insurance.
I approached the Group Insurance Carriers that I work with and asked them for quotes on 2 different Plan Designs. This way we will have some information to work with in our “Customization Conversation”…a little of this…a whole lot of that…can I have more of these? It’s important to have this conversation if you want your plan customized!
The biggest decision from a cost perspective was the difference between the Unlimited Drug Maximum Health rate and a $5,000 Drug Maximum Health rate. It was difficult because the Unlimited Drug Maximum Health rate was coming in at an average 38% higher than the Health rate with the $5,000 Drug Maximum.
When looking at choosing the Drug Maximum, I will always share the following (I subscribe to the notion that a more informed decision is best):
- Financial relief for some eligible Ontario residents impacted by a Drug Maximum is available from the Ontario Government through the Trillium Drug Program (TDP),
- Part of the eligibility requirements is that the Prescription Drug costs exceed 4% of the household net income.
- Not all Prescription Drugs are on the TDP’s list.
With this information added to the conversation, my 7-employee Prospect decided to go with the Unlimited Drug Maximum and are very happy with the plan they chose.
Having said that, since every SmallBiz Owner has their own definition of the “Right Benefits Plan at the Right Price” in order to attract and retain quality employees, half of my Traditional Group Insurance Prospects will move forward with some level of a Drug Maximum and the other half will insist on implementing an Unlimited Drug Maximum.
Located in Cambridge, ON Sharkey Group Insurance provides independent Employee Benefits advice & counsel for Small Businesses across Ontario.