Designing A Competitive Employee Benefits Plan

Today’s Must-Have Benefits

• Dental Insurance: The most requested benefit by employees (beyond medical insurance)
• Short-Term Disability: The second most-requested benefit by employees 
• Only five states currently provide a short-term state disability plan - California, New York, New Jersey, Rhode Island and Hawaii  

• Accident Plan: Helps with out-of-pocket expenses for any accidents -- both on and off the job. Typically starts at about $20/month
• Critical Illness Policy: Heart attacks, strokes, cancer - when those events occur, it helps to cover the out-of-pocket expenses.
• “Over 80% of bankruptcies filed are because of medical expenses. They’re not because someone got hurt and sick and passed away, they’re because someone got hurt and sick and lived.”

Benefits Strategy for Retaining Employees

• Provide a higher percentage of coverage - if a company is paying 50% of their employees’ medical, to increase retention, companies should try to increase that to 75%. If you were paying 75%, try to go up to 85% or 90%
• Cover the premiums for the employees’ dependents - it can get extremely expensive for family coverage, so the more you can cover the more likely employees with families will stay.
• Have retirement plans and options for employees to invest in their futures.

How Companies Can Contain Healthcare Costs

• All the rates are the rates - but strategy will make the biggest difference on the budget:
• Offset out-of-pocket costs with supplemental plan;
• If you are paying for dependents, do some dependent verification
• Look into your plan usage - don’t pay for benefits or networks that your employees aren’t using
• Look into self-funding options
• Mitigate company AND employee costs by offering a higher deductible plan in conjunction with a Hospital Confinement Plan 

Getting Creative With Benefits

• Giving more options to suit a diversity of employees and their needs - singles as well as families, new hires as well as those close to retirement.
• Providing comparable plans that work for remote workers in a variety of geographical locations.
• Offering more options is always better -- offer different plans (even within carriers), and use different enrollment options to take care of, educate and communicate with employees.

How To Design A Benefits Plan

• Set the budget. This is usually defined by the owner, or by the controller in a larger company.
• Understand how your employees are currently covered, in order to: 
• Avoid complications from competing coverage - If they are currently on, for example, their spouses’ health care plans, if they are on a government-sponsored plan, or if they are getting a subsidy from the state, they might no longer qualify for participation in those plans once the company offers an affordable health care plan. As a result, those employees could face potential fines. 
• Assess potential participation - and confirm that minimum participation requirements will be met.  
• Understand the importance of specific doctors and medicines to your employees. If there’s a must-have provider, or a must-have prescription that needs to be covered, it helps to know that going in, and work within those networks. This will definitely help you choose your plan.
• Be sure to consider employee demographics:
• Language: Make sure your provider has a benefits counselor that can speak your employees’ language. When employees can talk about benefits with someone who speaks their language, they automatically feel much more secure about their benefits options. 
• Generational: The ages and lifestyles of your employees should have an impact on plan offerings, so consider the population of your workspace when assessing plan designs .
• Determine current plan usage: If you currently have a big, robust plan, and people aren’t using it, you can find some cost savings by providing a smaller plan. Also, it should be noted that if your employees are using their plan, that can also impact costs, and make the premiums go up in the following year.

Communicating The Plan

• Communicating the plan to employees is critical - so employers should take care to engage all employees in the enrollment process.
• Most common method of communication is a non-mandatory in-person group meeting
• Cons: These meetings are not exciting, brokers will fill whatever time is offered to them, and employees are not likely to discuss their private matters in a group.
• Many companies conduct “Passive Enrollment”, in which employees don’t have to attend a meeting if they don’t want to change anything -- but a lot can change in a year, so employees should review their health experiences in the past year at least once a year, for 15 minutes. Is crucial. 
• Some companies will utilize media resources (videos, streaming meetings to remote workers) to communicate annual benefits information.
• Suggested minimum frequency of benefits communication:
• Annual open enrollment for all;
• Benefits and enrollment information should also be given to every new employee upon hire;
• Every qualifying event experienced by employees should be addressed as well. 

The Benefits of Using an Outside Benefits Agency

• They can shop all the carriers, for pricing and for networks;
• They can provide a full, robust benefits plans that will include core and supplemental insurance offerings (contacting insurance carriers alone will not include supplemental) 
• They are the insurance professionals and they become an extension of your HR team  - so HR managers don’t have to worry themselves about the minutia of insurance changes.
• They can offer employee decision support - via phone, via the internet, in one-on-ones. 

Jennifer Perera Backstory

• Studied Business at Mt. San Antonio College
• Began her career in insurance with New York Life Insurance Company
• Currently serves as District General Manager for Colonial Life 
• Ms. Perera is also currently the President of Our Benefits Coach

Contact

• Jennifer Perera: coachjen@ourbenefitscoach.com
• Jennifer Perera on LinkedIn
• Our Benefits Coach website