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Keys to Successful Implementation of Consumer-Driven Benefits January 12, 2009

Posted by Austin Baker in Consumer Driven Benefits, employee benefits.
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Employers everywhere are feeling the pinch of double-digit health insurance inflation. One trend that more employers are adopting as a possible solution is the consumer-driven benefits approach, which typically couples a high-deductible health plan with a personal health account, such as a health savings account (HSA) or and employer sponsored health reimbursement arrangement (HRA). The thinking behind this approach is that employees may be more careful about managing health care expenses when they’re footing a larger portion of the bill. To successfully implement the consumer-driven benefits approach with your employees, there are two critical factors that must be part of your implementation plan:

  • Voluntary benefits
  • Effective benefits communication

Voluntary Benefits Bring Employees Choice

With the move toward high-deductible health plans, your role is changing from providing and paying for traditional benefits to providing access to a wide variety of quality benefits — both core and voluntary. This way, you can maintain a competitive benefits package and still provide employees with options to lessen the effects of their increased financial risk for medical expenses:

1. Provide choices in health plans. Many employers are offering a menu of two or more health plans ranging from full coverage plans with higher premiums to high-deductible plans with lower premiums. Employees can then select health coverage that makes sense for their own situation.

2. Use voluntary benefits to expand benefits program choices. Voluntary benefits can enhance and expand your benefits program without additional budget constraints. You can offer a wide variety of individual and group voluntary insurance products from life to disability and supplemental health coverage, and you can fund some of the costs or let employees pay the premiums. Employees can then choose products they need to fill any coverage gaps.

3. Voluntary benefits fill in the gaps and reduce cost. A well designed voluntary benefits program can provide first dollar coverage. An HRA that has an up-front deductible will cost and employer significantly less. These savings can be used to partially fund a portable first dollar hospital indemnity plan. If you are using an HSA it may take a year or two to properly fund the accounts in order to provide the necessary cushion that an employee needs to take responsibility for his or her up-front health care expenses. An HSA compliant hospital indemnity plan gives an employee the breathing room that they need to learn how the new health plan will work.

Effective Benefits Communications Is Essential

With the consumer-driven benefits approach, if you don’t effectively communicate benefits, employees perceive the approach as mere cost-shifting. That’s why effective benefits communication is vital. A voluntary benefits partner can bring you not only product solutions but also benefits communications solutions, such as one-on-one employee sessions that cover core benefits in addition to voluntary benefits. When done well, benefits communications can help employees learn about their benefits and learn about the value of what their employer provides.

According to the Watson Wyatt WorkUSA 2004 study, “how well a company communicates the value of its health benefits can do more to retain top-performing employees than the actual richness of the benefits themselves.” In companies that don’t do a good job communicating the value of their rich benefits programs, only 22 percent of surveyed employees were satisfied with their benefits package. Conversely, in organizations that do a comprehensive job communicating the value of less rich benefit packages, 76 percent of employees were satisfied with their benefits.

Find a quality voluntary benefits provider who can help you successfully implement the consumer-driven benefits approach by bringing voluntary coverage choices and effective benefits communications capabilities. You can benefit through better management of your benefits program budget, an enhanced benefits program and improved attraction and retention rates for quality employees. Employees can benefit by having a variety of coverage choices to meet their needs and by getting help to understand their benefits and the value of them.

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Voluntary Short-Term Disability Insurance Needed Now More than Ever January 5, 2009

Posted by Austin Baker in employee benefits.
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Now more than ever as American’s are watching their pocketbooks more closely is the time to consider what would happen if no income were flowing into your pocketbook. Many employees are considering the effects of being laid off, yet ignoring the reality that a more devastating and unexpected financial blow could come first. Many American workers don’t realize how an injury or illness can put their lifestyles, assets and even their children’s education at risk. Although health insurance may cover a majority of medical expenses that occur during a short-term disability, if an employee can’t earn a paycheck for a few weeks or months, how will he or she pay the mortgage, buy groceries or pay the heating bills?
You may think that long-term disability insurance is all the coverage employees need; however, there’s also a big need to provide employees with paycheck coverage if they have a short-term disability. With many companies cutting back on paid time-off and sick leave, employees who are disabled and can’t work for a short time can experience a coverage gap between when sick leave ends and when they qualify for long-term disability benefits. Having a voluntary short-term disability plan is one way employees can help insure their paycheck.

Features to Look for in a Good Voluntary Short-Term Disability Product
Paycheck insurance is important, but the top products offer even more. Here’s what you should look for when you’re shopping for a good voluntary short-term disability product:
Guaranteed Issue: With guaranteed issue, you can offer your short-term disability coverage with no health underwriting as long as minimum participation and eligibility guidelines are met.
Portability: Employees can keep the policy if they change jobs.
Partial Disability Benefits: Voluntary short-term disability products should provide partial disability benefits when employees who are totally disabled come back to work earlier. Employers and employees like this feature because employees can ease back in to work and still receive a partial disability benefit.
Definition of “Your Job”: Some new voluntary short-term disability products define total disability in terms of “your job” for the entire benefit period. Benefits pay when the employee isn’t able to perform his or her own occupation. Other products may not pay “your job” benefits or may only pay under an “any job” benefits definition.
A Variety of Elimination and Benefit Periods. Lastly, you need to be sure that the voluntary short-term disability product you offer fits with the employer’s benefit program. The benefit period should complement any group long-term disability plan your client provides. Find a short-term disability product with a variety of elimination periods that will work with any paid-time off or sick leave program a client may have. For example, if a client provides four weeks of paid time off, it doesn’t make sense to recommend a voluntary short-term disability product that starts paying benefits after two weeks of disability.
Comprehensive Benefits Communication: Effective benefits communication plays a key part in helping answer employees’ benefits questions so they can make better benefits decisions. Employees need to understand their whole benefits package, especially where they may have coverage gaps and particularly in the area of disability coverage. Many employees think their sick leave will cover them until their long-term disability kicks in; however, that’s not always the case, and employees need to be aware of any disability coverage gaps. You may want to partner with an experienced worksite marketing benefits professional who can provide comprehensive benefits communications for you and your employees at no cost.

Help your employees protect their most valuable asset—their income. Add a strong voluntary short-term disability product to your employee benefit program.

Rising Health Care Costs Put Pressure on Small Businesses December 24, 2008

Posted by Austin Baker in employee benefits.
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Although double-digit health insurance cost increases affect all business owners no matter the size of their company, smaller businesses feel more pressure because they typically don’t have as many benefits options available to them as large companies. Yet you need to offer a competitive benefits package to compete with larger companies for qualified employees.
Voluntary benefits offered at the worksite can help small businesses lessen benefits program management pressures by providing much-needed solutions: voluntary products to help employees fill gaps in their core benefits and benefits communications to help employees better understand their benefits and the value of what you provide them.

Voluntary Products Expand the Benefits Program
We’re seeing larger numbers of small business employers putting in high deductible health plans, and some are even adopting consumer-driven health care plans. Either way, employees are taking on more responsibility for their health care expenses. Voluntary benefits can help you better manage your benefits program costs and help provide employees with coverage choices to meet their out-of-pocket medical expenses. Adding a supplemental health insurance product and other voluntary benefits such as life insurance, cancer insurance and short-term disability can expand your benefits program. For example, if you have a high-deductible health plan, employees could choose a supplemental health insurance product to help pay for their additional out-of-pocket expenses.
With voluntary benefits, you can pay a portion or all of the premiums for the voluntary benefits or let employees pay for the additional benefits themselves.

Benefits Communications Helps Employees Understand and Appreciate Their Benefits
Small businesses typically have little to no human resources staff, which means the business owner often handles HR duties in addition to all the other responsibilities. In many cases, you don’t have the time and resources to fully communicate your benefits program. Yet employees who understand the benefits they have and the value of what their employer provides appreciate their company more and use their benefits more responsibly, according to the Watson Wyatt WorkUSA 2004 study.
Having a voluntary benefits partner who can communicate your benefits program — both core and voluntary benefits — and help employees make educated coverage decisions can help take the load off of you. Find a voluntary benefits partner who’s experienced in conducting one-on-one benefits communication sessions and who’s willing to provide this valuable service at no cost. Many larger companies have staff or outside partners to help them with benefits communications and enrollments. But by partnering with a quality voluntary benefits provider, you can take advantage of these services in your own company at no additional expense. It’s a huge competitive advantage.

Voluntary benefits can help you relieve some of the pressure from increasing health insurance costs yet still remain competitive in the marketplace. The benefit to you is an enhanced benefits program, savings in program costs, quality benefits communications and an effective enrollment process. Your employees will benefit from having more coverage choices to meet their needs, plus they’ll understand and appreciate the value of what you provide for them.