After 3 years working independently out of her home, the founder of a software-developing startup in Toronto had recently moved into her first 'real' business premises, incorporated as a company, added another business owner and six employees.
Like many small, growing businesses dependent on attracting and retaining top talent, the founders felt an attractive compensation package was vital.
They needed to adapt many of the features of larger companies in order to stay competitive, but had to do it without access to deep pockets. They faced the added challenge that insurers couldn’t quote them because they didn’t meet the minimum lives requirement.
How could they show employees that the company was looking out for their interests and protecting them from financial and health risks, while having limited resources and insurable options?
The Revolution Solution:
Working with their size and stage of business growth, Collins Barrow recommended to start offering benefits through a Health Care Spending Account (HCSA) that would provide for employees’ medical expenses while maximizing tax effectiveness and giving the owners a rein on the costs.
Working with preferred providers, we designed an HCSA plan that would reimburse employees for eligible medical expenses such as dental, vision, medical supplies, massage therapy and acupuncture up to a pre-set limit. The design had two dimensions:
- The first was that the company owners would be reimbursed a 100% for their own and their families' eligible medical expenses up to a self-determined limit per year. .
- The second dimension was that the employees would be covered for all of their own eligible medical expenses up to a limit determined by the owners. The company would pay 90% of those costs, with employees paying the remaining 10% – harnessing their economic self-interest to control over-use of benefits.