Harmonising benefits, reducing administration and increasing engagement

We have a long-standing relationship with an employer that purchased another company with a different benefit structure. This left our client with the challenge of two very different benefit structures, and two very different levels of engagement in the benefits too. The brief was to harmonise these arrangements, reduce administration and improve engagement across the combined business.

The combined business employs around 300 employees in total, across two main locations, with a number of people working remotely.

Through our existing relationship, engagement with (and understanding of) benefits was already high in the existing company, but in the purchased business, it was clear that many people did not even know what was in place for them – let alone how to utilise the benefits.

• The first task was to complete a health check audit of the schemes currently being used, ensuring that the policies were up to date with legislation, and that the employer knew what they had already.
• A meeting to identify the requirements of the combined business was arranged and the human resource teams from both businesses worked closely with us on the project. Among the variations, private medical insurance was provided on an age-rated basis, versus a single-rated scheme. The benefit structure of the newly purchased company had just been added but had similar categories in place, so it was decided that the categories would be narrowed down, and consideration given to the implications of moving to a wholly single-rate approach across the group.
• Human resources decided that they wanted to offer a best of both approach on benefits, and while life assurance cover levels were increased for some as a result of the harmonisation for example, through a structured broking approach, these higher cover levels were included at a minimal cost. It was clear that the company that our client had bought had not actively had their benefits re-brokered or updated for some time – with both the Trust Deed needing an update and the cost of the benefits being out of kilter with the market due to the lack of active re-broking for years. The Finance Director was also pleasantly surprised at the results of the broking exercise.
• The private medical insurance market review Broadstone provided to the employer compared the existing benefits with combined terms for comparison. Two benefit structures within one scheme were maintained – partly due to historic agreements, and partly to differentiate between the demands of a typically older (and higher risk) profile of people with the rest. By combining the membership, economies of scale were created, but in recommending two benefit structures within the one scheme, it meant that the costs could be managed as a whole, and that those who appreciated a more comprehensive benefit structure ultimately paid, through their benefit in kind, a premium that reflected their higher risk/rate.
• A meeting was then held with the employer to discuss the reports and the employer decided to implement the recommendations in full – with consideration also being given to the use of a Cash Plan for all employees too.
• Project meetings were held with HR and payroll to ensure a smooth transition.
• Once the new policies had been established, communications were organised with all members, explaining the change of costing basis to those on the age-rated private medical insurance basis historically covered too.
• With the assistance of Broadstone, member presentations were hosted by the employer at the corporate HQ to positively engage with all employees. Broadstone were on hand to support, but the client felt that due to the wider messages that they wanted to put out, that they would like to lead these presentations – so Broadstone were happy to assist with sense-checking the facts.
• To improve communications, alongside our pension team, we established the following: regular onsite visits to provide targeted presentations agreed in advance with HR based around pension and benefits – to incorporate presentations to new employees. The combined pension and benefits communication was designed to cap costs both in terms of the man power of having a single presentation, as well as in terms of only having one meeting for people to attend instead of the typical two meetings that so many providers give these days.

• Through the streamlining of administration and establishing combined schemes we have made life easier for the employer, improved communication of support services to all (there being no question of one population not having a benefit that the other has) and reduced the internal administration time and costs.
• Employees now have a best of both worlds benefit structure – and one that they are all actually aware of!
• We did this in a cost-effective way improving the underwriting process of the life assurance scheme in the process too.
• Ensuring that the outdated Trust wordings for the Life Assurance were no longer an issue, we reduced the potential for the employer to not be able to fully claim a benefit in a tax-efficient manner.