Creativity required to control the costs, remain competitive.

Save us some money, please.

That cry has been the mainstay of our industry for the past two years. The reason is that health benefits in general continue to increase in cost and there seems to be no light at the end of the tunnel.

There is more activity in our industry than ever before as agents and consultants line up to see if they can do better than the next person. Everyone says that not a lot can be done because the industry as a whole is not prepared to change its ways and that benefit programs will go the route of the U.S., where monthly costs per employee are in the $500 range. The average monthly cost per employee in Canada is quickly approaching the $150 mark, and there are few signs of relief on the horizon. So, what can you do?

There are a few relief mechanisms at your disposal, but you just have to know where to look for them.

Let's explore a few.

Every solution starts with a very specific premise: Take charge of your group insurance plan and get someone who knows the ins and outs to help you.

Start with education. An informed individual is an appreciative individual.

How many times do employees say, "What has the company done for me lately?" Most employers fail to realize the value of such sessions. We hold numerous employee sessions all over the country and for all sizes of groups. The impact of such sessions is felt months after. The sessions are meant to give employees a brief overview of what their entitlements are as employees of your organization.

The presentations are split into three or four parts consisting of:

* statutory benefits (UIC, WCB, CPP)

* corporate perks (vacation, bonus, subsidies, discounts)

* voluntary benefits (if applicable)

As a rule these presentations should be done once a year to yield maximum value.

Anyone who has had these sessions done for their employees agrees that the goodwill they promote is worth the temporary disruption. The sessions can also be held during the evening or on weekends, and spouses are also encouraged to attend to ask questions and give input.

One of the main problems with group insurance benefits is that they rarely, if ever, are based on a formula that identifies the needs of the people for which they are being provided.

An employee survey to help identify the individual employee's needs goes a long way towards designing a plan that is both cost-effective and efficient from a claims standpoint.

For example, a consultant should review the need for an insured vision-care plan, and maybe should look at alternative ways of delivering benefits in such a way as to serve the needs of the individuals who will need the plan, while not saddling the company with the cost for those who will not use the plan. There are three solutions that we have worked out to save clients dollars.

FUNDING

Is it plausible in this day and age to continue insuring certain benefits when it is widely recognized that they are merely administered and costed on a cash-flow basis?

The answer can lie in the organization's financial ability, or in the availability of stop-loss insurers to guard against any extraordinary claims.

This approach should be reviewed for benefits such as drugs and dental, which make up as much as 90 per cent of all claims in a typical group insurance plan.

DIFFERENT APPROACH

A lot of what can be done depends on the creative process.

Unfortunately, group insurance plans are often sold by rote. There are very few instances where we run into a plan that is very creative. The benefit formulas are standard, the definitions are basic and very little, if any, thought has gone into the reasons for setting up a plan to begin with.

These plans are often fraught with potential problems, as eligibility definitions are not clear and simple questions such as "When is an employee no longer considered an employee? cannot be answered immediately by the plan administrator.

Claims management, cost containment, executive selection programs... These are but a few of the concepts that we as Canadian employers will have to become familiar with if we are to keep our costs down and thereby make or firms competitive.

Gerard Labelle is a partner in the Sudbury firm Labelle and Morel Benefit Services Ltd.