Custom Group Benefits Plans: Why They’re Not Just for Big Business
I am often surprised by how many companies and advisers believe that a customized group plan is beyond the reach of small business. While this may have been true many years ago, it’s certainly no longer the case.
To understand why, we need to go back in time.
Clearly, administering group benefits plans is a computation intensive activity. Imagine tracking every plan parameter, every claim and every payment for thousands of employees and companies. Add to that the associated regulatory requirements to maintain records and comply with audits and we start to understand the complexities. As a result, group benefits plans could only feasibly be administered by large insurers with entire rooms filled with computing machines or large employers with the resources to manage their own plan.
Consequently, only very large companies could afford to build and administer customized plans for their business. Smaller companies had little flexibility and little choice in terms of plan design. The only options were to choose from commoditized plans offered by the large traditional insurance companies. It was an acceptable solution, but not the best solution for a small business.
But advancements in technology allowed a new breed of group insurance administrators to emerge. They are the Third Party Administrators (TPAs) who began offering third party Administration Services Only (ASO) Plans.
I have built my business to be lean, nimble and flexible to serve small business well. Successful companies with under 100 employees can finally have access to affordable customized employee benefits plans strategically designed for their business. I offer a level of service and flexibility once exclusively enjoyed by larger businesses.