Originally posted on Yahoo Finance.
Beneplan, an employee benefits provider has just issued a refund of $5.9M in premiums back to its clients - a group of 400 small businesses in Ontario. This payout is part of Beneplan’s refund program whereby if a company’s health claims are lower than their premiums, they are entitled to receive money back.
As COVID-19 lockdowns limited employee visits to dentists, massage therapists and other healthcare providers, the volume of claims has proportionately dropped. This explains why Beneplan’s $5.9M refund was 136% higher than the previous year. If the employees don’t use the insurance, then why should an insurance company profit off that?
“This unprecedented large gap between claims and premiums represents left over profit that is usually kept by other insurers'' - Yafa Sakkejha, CEO of Beneplan. “We believe that it rightfully belongs to our members and since our inception we have returned back over $26M in premiums to small businesses''.
With the average refund cheque amounting to almost $16,000, it’s a well-timed cash injection given the limited relief programs and financial struggles small businesses continuously face during the pandemic.
Yafa adds “Majority of our clients are blue collar. They run factories, industrial plants, machine shops and other essential services that are often not represented. We’ve seen clients use the refunds to pay off expenses, hire staff, extend health benefits and for some owners - finally pay themselves a small salary”.
Beneplan is a provider of refundable employee benefit plans. As a co-operative, it bands small businesses together to form a buying group and negotiate competitive rates on their behalf with Canada’s large carriers. To date, it has issued over $26M in refunds to its members and continues to be one of Canada’s fastest growing employee benefits providers.