November 1, 2016

Defined Contribution Benefit Plans

If your company demographics are anything like ours, you have a workforce that spans multiple generations all with varying ideas about what a benefit plan should offer. 
 
Employees are working later in life either due to financial necessity or the enjoyment of being challenged by their jobs.  These employees are typically more focussed on retirement income and traditional health care benefits than their 20-something, new-to-the-workforce counterparts.  This younger population tends to put more value on alternative therapies and non-traditional benefits such as transit passes and life coaching.  Then there are those who fall somewhere in between.  They are often looking for vision care and braces for their kids while trying to stash some money away for tuition or their own eventual retirement.
 
How can you create a plan that is valued by all these very different employees? Enter a new player to the benefits market:  League.  League is, at the fundamental level, a health care spending account (HCSA).  HCSAs are nothing new – they’ve been around for years but the way in which League has approached it is refreshingly new. 
 
There are three main elements to League:  Health and Wellness Spending Accounts; Digital Marketplace; and Human Resource Administration Hub.  

Health & Wellness Spending Accounts

An HCSA is a Defined Contribution plan.  Just like a DC pension, the amount contributed to the plan per employee per year is fixed thereby allowing employers to know their budget year over year.
 
Unlike most HCSAs, League offers two pillars of spending accounts:  one for traditional health care services; the other for wellness services such as yoga classes and nutritional supplements.  The health care pillar takes advantage of preferred tax treatment for health care expenses just like a typical health care plan.  The wellness pillar is a taxable benefit but offers a more comprehensive list of available benefits.
 
When designing the plan, the employer can determine how much to allocate to each employee and how much of that is allotted to the health care pillar and how much to the wellness pillar.  They can also determine what wellness services to include. 

 
Digital Marketplace

Imagine you are new to an area and need to find a dentist or need a physiotherapist for the first time.  Through League’s app, you can find an approved practitioner in your area and read reviews and ratings by other League members.  Once you have found a practitioner you like, you can book an appointment directly through the League app and submit the claim directly to the plan – it’s convenience in an app. 

Human Resource Administration Hub

Through the online tool, benefits and HR administrators can browse the HR catalogue, arrange group wellness sessions (ex. lunch time yoga, flu shot clinics, etc.), invite employees, administer allocations, and more. 
 
The cost of corporate sessions can be covered by the company or can be shared with or charged in full to employees who attend that particular session. The employee’s portion is simply deducted from their wellness account. 

Summary

Is League for everyone? No.  It is a refreshing new take on HCSAs and offers many benefits.  The League platform allows employers to:
 
  • Build flexibility and value into their plan
  • Create a stable cost environment
  • Use the benefit plan to support corporate wellness initiatives
However, HCSAs in general are not for everyone.  They may increase overall benefit costs and create confusion when making claims unless communication is clear and frequent. 
 
League is also fairly new so a search for practitioners and/or services in some areas may have limited results.  However, in the past few months that we’ve been monitoring this, the number has grown rapidly and it’s expected to continue as the app becomes more popular. 
 
League is unique and deserves kudos for what they have brought to the marketplace and for those who are interested in learning more or getting assistance in setting up such a plan, your GMS representative is here to help.
 
 
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