Closing the execution continuum on employee benefit cost savings
Are you using big data to reduce your employee benefits costs? As more employers switch their employee benefits to a digital platform, big data can be a great tool for employers looking to reduce the costs associated with their benefits program. Check out this great article by Eric Helman from Employee Benefit Advisor and found out how you can leverage your data to reduce to cost of an employee benefit program.
A revolution in employee benefits is on the horizon, and 21st century analytics is at the core. Big data holds the promise to scan huge amounts of information in a near real-time environment for insights that will impact the current and future trajectory for a given area. The advancement of true cross-vendor analytics, prescription, engagement and measurement brought on by the democratization of big data is enabling employers, brokers and consultants to improve the performance of their employee benefits plans like never before.
Two decades ago, I had the opportunity to hear Chris Sullivan, one of the founders of Outback Steakhouse, speak to a group of executives about customer research. His sentiments: “We don’t do focus groups. People don’t know what they want. Who would say they would like to stand in line for 30 minutes to eat salty food in a very loud restaurant? But that is exactly what they wanted. And that is what made Outback a success. Instead of focus groups, we place very talented and engaged proprietors in our stores and teach them to observe what people want. Then, we replicate that experience.”
In the realm of employee benefits, surveys, focus groups and anecdotes about specific employee encounters with the benefits program typically drive the discussions about how that program should evolve in the future. Unlike the situation at Outback, it is difficult to “observe” how people actually consume benefits and tailor a program that is attractive to them.
Analytics drive strategy
Fortunately, recent developments in data analytics have unlocked the potential of using consumer behavior insights to drive employee benefits strategy. Leading practitioners are beginning to leverage these developments to change the annual renewal process. The technologies that support data aggregation, normalization and reporting have been aggressively developed to support the provider and payer communities. Only now have these advancements been made available to employers and their advisers.
The most successful practitioners point to the value of standardized claims reporting based upon credible data. By combining current claims data with industry benchmarks and predictive analytics, employers gain insight into the ongoing performance of their benefit plans. They “see” for themselves what industry professionals have been telling them for years. Plan performance is based upon claims, both in terms of the number of units of healthcare consumed and the price of those units. In recent surveys, benefit professionals report the difficulty they have in convincing CFOs and CEOs to make the necessary changes to benefit programs. Standardized reporting from a credible analytics platform can greatly enhance the ability for benefit professionals to communicate their agenda.
But standardized reporting is not the panacea. Benefits are complex. And the relationship between risk and consumption of healthcare add to the complexity. Even in the best reporting environments where executives are well informed about the performance of their plans and how the key metrics compare to industry norms, they are often perplexed about what to do with the information. Advancements in the realm of “actionable analytics” are beginning to address this problem as well.
While artificial intelligence or AI is all the rage, the underlying concept of having a computer suggest a course of action based upon data is not a new idea. The new application to employee benefits is the ability to provide “suggestions” in the context of standardized financial reporting. The number of ideas to bend the cost curve are numerous. The challenge is matching these ideas with the appropriate populations, convincing decision makers to invest and engaging the appropriate cohorts of employees to take specific actions necessary to realize the return on investment for these initiatives.
New systems are now available to close the gaps on this execution continuum. The foundation for these new systems is a robust analytics platform. But actionable analytics build upon this foundation by evaluating the employer’s data to discern whether a specific cost-saving initiative might generate savings worthy of the investment. These new systems present the output of that analysis in an easy to understand graphical format for benefit consultants and HR professionals to effectively communicate the potential of cost savings initiatives to decision makers.
Targeted engagement maximizes compliance and ROI
Getting executives to commit to intentional actions to affect the rising costs of benefits solves one half of the problem. The second half of the problem is one of focus. Rather than attempting to engage all employees with generalized messaging, these new systems use analytics to focus their engagement on a specific cohort of individuals in order to drive the greatest impact. This focus allows for a concentration of resources on the targeted populations, resulting in increased compliance and larger return on investment. The best implementations are integrated with benefits administration platforms and can incorporate multiple initiatives simultaneously. Point solutions, from an engagement perspective, have been proven to result in single-digit compliance. The power of an integrated engagement solution allows for initiatives that, because they are both focused and automated, can be executed simultaneously.
Advancements in technology have created a new era in which the democratization of big data allows for non-technical professionals to access detailed information and convert that information into intelligence. According to a recent survey, more than 65% of employers confess they are not strategic when it comes to benefits cost management. In spite of the many cost savings ideas available, more than 40% say they are not engaging in any new initiatives in the upcoming year. While the future of healthcare reform is in doubt, the potential for actionable analytics to significantly change the trajectory of the employer’s benefits costs is certain.
See the original article Here.
Source:
Helman E. (2017 September 5). Closing the execution continuum on employee benefit cost savings [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/opinion/closing-the-execution-continuum-on-employee-benefit-cost-savings?brief=00000152-146e-d1cc-a5fa-7cff8fee0000
The Risk of Being Uninsured (and the Hidden Bargain in Addressing It Now)
Are you aware of all the risks associated with being uninsured? Take a look at this great column by Erica Oh Nataren from Life Happens and find out how you are putting yourself in harm's way by being uninsured.
With all the expenses of everyday living, it’s tempting to think of insurance as just another cost. What’s harder to see is the potential cost of not buying insurance—or what’s known as “self-insuring”—and the hidden bargain of coverage.
The Important vs. the Urgent
We’ve all experienced it: the tendency to stay focused on putting out fires, while never getting ahead on the things that really matter in the long run. For most people, there are two big things that matter in the long run: their families and their ability to retire. And being properly insured is important to both those concerns.
Life Insurance: a Hidden Bargain?
It’s exceedingly rare, but we all know it can happen: someone’s unexpected death. Life insurance can prevent financial catastrophe for the loved ones left behind, if they depend on you for income or primary care—or both.
The irony is that many people pass on coverage due to perceived cost, when in fact it’s far less expensive that most people think. The 2016 Insurance Barometer Study, by Life Happens and LIMRA showed that 8 in 10 people overestimate the cost of life insurance. For instance, a healthy, 30-year-old man can purchase a 20-year, $250,000 term life insurance policy for $160 a year—about $13 a month.
Enjoy the Benefits of Life Insurance—While You’re Alive
If budget pressures aren’t an issue, consider the living benefits of permanent life insurance—that’s right, benefits you can use during your own lifetime.
Permanent life insurance policies typically have a higher premium than term life insurance policies in the early years. But unlike term insurance, it provides lifelong protection and the ability to accumulate cash value on a tax-deferred basis.
Cash values can be used in the future for any purpose you wish. If you like, you can borrow cash value for a down payment on a home, to help pay for your children’s education or to provide income for your retirement.
When you borrow money from a permanent insurance policy, you’re using the policy’s cash value as collateral and the borrowing rates tend to be relatively low. And unlike loans from most financial institutions, the loan is not dependent on credit checks or other restrictions. You ultimately must repay any loan with interest or your beneficiaries will receive a reduced death benefit and cash-surrender value.
In this way, life insurance can serve as a powerful financial cushion for you and your family throughout your life, in addition to protecting your family from day one.
Disability Insurance: For the Biggest Risk of All
The most overlooked of the major types of insurance coverage is the one that actually covers a far more common risk—the risk of becoming ill or injured and being unable to work and earn your paycheck.
How common is it? While no one knows the exact numbers, it’s estimated that 30% of American workers will become disabled for 90 days or more during their working years. The sad reality is that most American workers also cannot afford such an event. In fact, illness and injury are the top reasons for foreclosures and bankruptcies in the U.S. today. Disability insurance ensures that if you are unable to work because of illness or injury, you will continue to receive an income and make ends meet until you’re able to return to work.
It’s tempting to cross your fingers and hope misfortune skips over you. But when you look at the facts, it’s easy to see: getting proper coverage against life’s risks is not just important, but a bargain in disguise.
See the original article Here.
Source:
Nataren E. (2017 May 11). The risk of being uninsured (and the hidden bargain in addressing it now) [Web blog post]. Retrieved from address https://www.lifehappens.org/blog/the-risk-of-being-uninsured-and-the-hidden-bargain-in-addressing-it-now/
Why Employee Engagement Matters – and 4 Ways to Build It Up
An engaged employee is a productive employee. Employee engagement is a very important piece of a company's operations. They are some of the best assets a company can have and without engaged employees, your company's operations could be negatively impacted. Take a look at this great article by Joe Wedgewood from The Happiness Index and check out some of the helpful tips on how you can boost engagement across your organization.
Organizations with high employee engagement levels outperform their low engagement counterparts in total shareholder returns and higher annual net income.” — Kenexa.
Your people are undoubtedly your greatest asset. You may have the best product in the world, but if you can’t keep them engaged and motivated — then it counts for very little.
By making efforts to keep your people engaged, you will maximize your human capital investment and witness your efforts being repaid exponentially.
The benefits of an engaged workforce
Increase in profitability:
“Increasing employee engagement investments by 10% can increase profits by $2,400 per employee, per year.” — Workplace Research Foundation.
There is a wealth of research to suggest that companies that focus on employee engagement will have an emotionally invested and committed workforce. This tends to result in higher profitability rates and shareholder returns. The more engaged your employees are the more efficient and productive they become. This will help lower operating costs and increase profit margins.
An engaged workforce will be more committed and driven to help your business succeed. By focusing on engagement and investing in your people’s future, you will create a workforce that will generate more income for your business.
Improved retention and recruitment rates:
“Replacing employees who leave can cost up to 150% of the departing employee’s salary. Highly engaged organizations have the potential to reduce staff turnover by 87%; the disengaged are four times more likely to leave the organization than the average employee.” — Corporate Leadership Council
Retaining good employees is vital for organizational success. Engaged employees are much less likely to leave, as they will be committed to their work and invested in the success of the company. They will have an increased chance of attracting more qualified people.
Ultimately the more engaged your people are, the higher their productivity and workplace satisfaction will be. This will significantly reduce costs around absences, recruitment, training and time lost for interviews and onboarding.
Boost in workplace happiness:
“Happy employees are 12%t more productive than the norm, and 22% more productive than their unhappy peers. Creating a pleasant workplace full of happy people contributes directly to the bottom line.” – Inc.
Engaged employees are happy employees, and happy employees are productive employees. A clear focus on workplace happiness, will help you to unlock everyone’s true potential. On top of this, an engaged and happy workforce can also become loyal advocates for your company. This is evidenced by the Corporate Leadership Council, “67% of engaged employees were happy to advocate their organizations compared to only 3% of the disengaged.”
Higher levels of productivity:
“Employees with the highest levels of commitment perform 20% better than employees with lower levels of commitment.” — The Society for Human Resource Management (SHRM).
Often your most engaged people will be the most dedicated and productive, which will give your bottom line a positive boost. Employees who are engaged with their role and align with the culture are more productive as they are looking beyond personal benefits. Put simply, they will work with the overall success of the organization in mind and performance will increase.
More innovation:
“Employee engagement plays a central role in translating additional job resources into innovative work behaviour.” — J.J. Hakanen.
Employee engagement and innovation are closely linked. Disengaged employees will not have the desire to work innovatively and think of new ways to improve your business; whereas an engaged workforce will perform at a higher level, due to increased levels of satisfaction and interest in their role. This often breeds creativity and innovation.
If your people are highly engaged they will be emotionally invested in your business. This can result in them making efforts to share ideas and innovations with you that can lead to the creation of new services and products — thus improving employee profitability.
Strategies to increase employee engagement
Communicate regularly:
Every member of your team will have valuable insights, feedback and suggestions. Many will have concerns and frustrations too. Failure to effectively listen and respond to everyone will lower their engagement and negatively affect the company culture.
Create open lines of communication and ensure everyone knows how to contact you. This will create a platform for your people to share ideas, innovations and concerns with you. It will also bridge gaps between senior management and the rest of the team.
An effective way to communicate and respond to everyone in real-time is by introducing pulse surveys — which will allow you to gather instant intelligence on your people to help you understand the sentiment of your organization. You can use this feedback to create relevant action plans to boost engagement and make smarter business decisions.
Take the time to respond and share action plans with everyone. This will ensure your people know that their feedback is being heard and can really make a difference.
Recognize achievements:
“The engagement level of employees who receive recognition is almost three times higher than the engagement level of those who do not.” — IBM Smarter Workforce Institute.
If your people feel undervalued or unappreciated then their performance and profitability will decrease. According to a survey conducted by technology company Badgeville, only 31% of employees are most motivated by monetary awards. The remaining 69% of employees are motivated by job satisfaction, recognition and learning opportunities.
Make efforts to celebrate good work and recognize everyone’s input. Take the time to personally congratulate people and honor their achievements and hard work. You will likely be rewarded with an engaged and energized workforce, that will make efforts to impress you and have their efforts recognized.
Provide opportunities for growth:
Career development is key for employee engagement. If your people feel like their careers are stagnating, or their hard work and emotional investment aren’t being reciprocated — then you can be certain that engagement will drop.
By meeting with your people regularly, discussing agreed targets and time frames, and clearly highlighting how they fit into the organizations wider plans, you can build a “road map” for their future. This will show that their efforts and hard work aren’t going unnoticed.
Improve company culture:
“Customers will never love a company until the employees love it first.” — Simon Sinek.
Building a culture that reflects your brand and creates a fun and productive working environment is one of the most effective ways to keep your employees engaged. It’ll also boost retention and help recruitment efforts. If your culture motivates everyone to work hard, help each other, become brand ambassadors, and even keep the place clean — then you have won the battle.
An engaged and committed workforce is a huge contributor to any organization’s bottom line. The rightculture will be a catalyst to help you achieve this.
Here’s how you can improve the company culture within your organization:
- Empower your people: Empowered employees will take ownership of their responsibilities, solve problems and do whatever it takes to help your company succeed. This will drive your company culture forward. Demonstrate you have faith in your people and trust them to fulfill their duties to their best of their abilities. This will ensure they feel valued, which can lead to empowerment.
- Manage and communicate expectations: Your people may struggle to understand your cultural vision. By setting clear and regular expectations and communicating your vision via posters, emails, discussions and leading by example, you will prevent confusion and limit deviation from your desired vision.
- Be consistent: To sustain a consistent culture, you must show uniformity with your actions and communications. Make efforts to have consistent expectations and standards for all your workers, and communicate everything in the same way.
By focusing on employee engagement and investing in your people, they will repay your efforts with an increase in performance, productivity and — ultimately — profit.
See the original article Here.
Source:
Wedgewood J. (2017 June 8). Why employee engagement matters - and 4 ways to build it up [Web blog post]. Retrieved from address https://www.hrmorning.com/employee-engagement-ways-to-build-it-up/
5 tips to make this the best open enrollment ever
Open enrollment season is right around the corner. Did you know that most people find open enrollment season more burdensome than tax season? As employers begin engaging their employees on healthcare offerings, check out these great tips by Kim Buckey from Benefits Pro on how you can make this year the best open enrollment yet.
Learn from last year’s enrollment
Look back on how your company fared during last year’s open enrollment period.
What were the most time-consuming tasks, and how can they be streamlined this year? What were the top questions asked by employees? Did you achieve your enrollment goals?
Hold a meeting with key internal and external stakeholders on the team and review what worked and what didn’t work last year. Knowing where you are, what your challenges are and will be, and where you’re on the right track will enable you to create a meaningful plan for this year.
Start with strategy
Once you know where you are, figure out where you want to be, how you’re going to get there, and how you’ll determine if you’ve achieved your goals. Make sure your strategy includes:
- An assessment of all of your audiences. Remember, you’re not just communicating to employees, you’re reaching out to family members and to managers as well. Keep in mind that not every audience member has the same education level or understanding of even the most basic benefits concepts.
- What’s changing. Are you adding or eliminating plans? Is cost-sharing changing? Is there a new vendor? Having a thorough understanding of what’s changing will help determine what your messaging should be.
- Defining your corporate objectives. Are you looking to increase participation in a particular plan option, or shift a percentage of your population to a new plan offering? Increase participation in a wellness plan? What percentage? Define your objectives and how you plan on measuring success.
- Your overall messages — and any specific messages targeted to your audiences. You may communicate differently to people already in the plan in which you want to increase participation, for example.
- A schedule. People need to hear messages multiple times before they “register.” Make sure you’re communicating regularly — and thoughtfully — in the weeks leading up to, and during, the enrollment period.
- Media. What messages will you deliver in print (newsletters, posters, postcards, enrollment guides)? What should be communicated in person, through managers or one-on-one enrollment support?
Make this year’s enrollment more active
Eighty percent of Americans spend less than an hour researching benefit options, and 90 percent keep the same plan from year to year. Yet for most employees, their circumstances change annually — whether it be the number of their dependents, their overall health and health care usage or their pay.
Active enrollment — where an employee must proactively choose a plan or go without coverage — can be an important step in getting employees more engaged in their benefits.
Active enrollment has benefits for the employer as well — it provides an opportunity to collect key data (such as current dependent information) and to direct employees to the most cost-effective plans for them.
But helping employees choose the “right” plan requires a robust communication plan, combining basic information about plan options, decision-making tools that address the total cost of coverage (both premium and point-of-service costs) and even one-one-one enrollment support.
Many employees don’t have the information they need to make good decisions, and aren’t likely to seek it out on their own — it must be ‘pushed’ to them.
Take demographics into consideration
When engaging employees around their benefits options, consider the wants, needs, and communication preferences of each demographic. Employees just starting their careers are the most underinsured (and generally least informed) group, often seeing student debt rather than health coverage as a more pressing priority.
A Harris/Accolade poll reveals that when results are broken out by age cohort, workers under 30 are having the greatest difficulty finding their way through the healthcare labyrinth.
Only 56 percent say they are comfortable doing so, compared to 76 percent of retirees. They also report more challenges in making the best care decisions, including understanding cost, coordinating care, choosing and understanding benefits, and finding a doctor they can relate to.
Understand the limitations of decision support tools
Decision support tools enable people to take an active role in managing their health care. While they can certainly help, remember that employees must seek them out and use them, and these tools often assume a level of benefits knowledge your employees might not have.
And, these tools recently have come under scrutiny for their ultimate lack of measurable results. To see the return on investment and value, you must also provide education and communications to provide some context for, and drive usage of, these tools.
By applying these five steps along with setting your team up with designated roles, responsibilities, and deadlines, you’re well on your way toward a more seamless, efficient and effective open enrollment period and to saving both your organization and your coworkers time and money.
But remember, benefits communication isn’t “one and done” at enrollment. You’ll need a year-round plan to help employees make good decisions about their care once they’ve chosen their coverage.
See the original article Here.
Source:
Buckey K. (2017 Aug 25). 5 tips to make this the best open enrollment ever [Web blog post]. Retrieved from address https://www.benefitspro.com/2017/08/25/5-tips-to-make-this-the-best-open-enrollment-ever?page_all=1
5 Crucial Wellness Strategies for Self-Funded Companies
In the article below from Care ATC, you will learn the importance of health care coverage - self-funded or not - and how to leverage different programs to the benefit of your company and its employees. Explore these five strategies for self-insured companies and find what will work best for you.
You can read the original article here.
Instead of paying pricy premiums to insurers, self-insured companies pay claims filed by employees and health care providers directly and assume most of the financial risk of providing health benefits to employees. To mitigate significant losses, self-funded companies often sign up for a special “stop loss” insurance, hedging against very large or unexpected claims. The result? A stronger position to stabilize health care costs in the long-term. No wonder self-funded plans are on the rise with nearly 81% of employees at large companies covered.
Despite the rise in self-insured companies, employers are uncertain as to whether they’ll even be able to afford coverage in the long-term given ACA regulations. Now more than ever, employers (self-insured or not) must understand that wellness is a business strategy. High-performing companies are able to manage costs by implementing the most effective tactics for improving workforce health.
Here are five wellness strategies for self-insured companies:
Strategy 1: Focus on Disease Management Programs
Corporate wellness offerings generally consist of two types of programs: lifestyle management and disease management. The first focuses on employees with health risks, like smoking or obesity, and supports them in reducing those risks to ultimately prevent the development of chronic conditions. Disease management programs, on the other hand, are designed to help employees who already have chronic disease, encouraging them to take better care of themselves through increased access to low-cost generic prescriptions or closing communication gaps in care through periodic visits to providers who leverage electronic medical records.
According to a 2012 Rand Corporation study, both program types collectively reduced the employer’s average health care costs by about $30 per member per month (PMPM) with disease management responsible for 87% of those savings. You read that right – 87%! Looking deeper into the study, employees participating in the disease management program generated savings of $136 PMPM, driven in large part by a nearly 30% reduction in hospital admissions. Additionally, only 13% of employees participated in the disease management program, compared with 87% for the lifestyle management program. In other words, higher participation in lifestyle management programs marginally contributes to overall short-term savings; ROI was $3.80 for disease management but only $0.50 for lifestyle management for every dollar invested.
This isn’t to say that lifestyle management isn’t a worthy cause – employers still benefit from its long-term savings, reduced absenteeism, and improved retention rates – but it cannot be ignored that short-term ROI is markedly achieved through a robust disease management program.
Strategy 2: Beef Up Value-Based Benefits
Value-Based Benefit Design (VBD) strategies focus on key facets of the health care continuum, including prevention and chronic disease management. Often paired with wellness programs, VBD strategies aim to maximize opportunities for employees make positive changes. The result? Improved employee health and curbed health care costs for both employee and employer. Types of value-based benefits outlined by the National Business Coalition on Health include:
Individual health competency where incentives are presented most often through cash equivalent or premium differential:
Health Risk Assessment
Biometric testing
Wellness programs
Condition management where incentives are presented most often through co-pay/coinsurance differential or cash equivalent:
Adherence to evidence-based guidelines
Adherence to chronic medications
Participation in a disease management program
Provider Guidance
Utilization of a retail clinic versus an emergency room
Care through a “center of excellence”
Tier one high quality physician
There is no silver bullet when it comes to VBD strategies. The first step is to assess your company’s health care utilization and compare it with other benchmarks in your industry or region. The ultimate goal is to provide benefits that meet employee needs and coincide with your company culture.
Strategy 3: Adopt Comprehensive Biometric Screenings
Think Health Risk Assessments (HRAs) and Biometric Screenings are one and the same? Think again. While HRAs include self-reported questions about medical history, health status, and lifestyle, biometric screenings measure objective risk factors, such as body weight, cholesterol, blood pressure, stress, and nutrition. This means that by adopting a comprehensive annual biometric screening, employees can review results with their physician, create an action plan, and see their personal progress year after year. For employers, being able to determine potentially catastrophic claims and quantitatively assess employee health on an aggregate level is gold. With such valuable metrics, its no surprise that nearly 51% of large companies offer biometric screenings to their employees.
Strategy 4: Open or Join an Employer-Sponsored Clinic
Despite a moderate health care cost trend of 4.1% after ACA changes in 2013, costs continue to rise above the rate of inflation, amplifying concerns about the long-term ability for employers to provide health care benefits. In spite of this climate, there are still high-performing companies managing costs by implementing the most effective tactics for improving health. One key tactic? Offer at least one onsite health service to your population.
I know what you’re thinking: employer-sponsored clinics are expensive and only make sense for large companies, right? Not anymore. There are a few innovative models out there tailored to small and mid-size businesses that are self-funded, including multi-employer, multi-site sponsored clinics. Typically a large company anchors the clinic and smaller employers can join or a group of small employers can launch their very own clinic. There are a number of advantages to employer-sponsored clinics and it is worthwhile to explore if this strategy is right for your company.
Strategy 5: Leverage Mobile Technology
With thousands health and wellness apps currently available through iOS and Android, consumers are presented with an array of digital tools to achieve personal goals. So how can self-insured companies possibly leverage this range of mobile technology? From health gamification and digital health coaching, to wearables and apps, employers are inundated with a wealth of digital means that delivering a variation of virtually the same thing: measurable data. A few start-ups, including JIFF and SocialWellth, have entered the field to help employers evaluate and streamline digital wellness offerings.
These companies curate available consumer health and wellness technology to empower employers by simplifying the process of selecting and managing various app and device partners, and even connecting with tools employees are already be using.
Conclusion:
Self-insured companies have a vested interest in improving employee health and understand that wellness is indeed a business strategy. High-performing companies are able to manage costs by implementing the most effective tactics for improving workforce health including an increased focus on Chronic Disease Management programs; strengthening value-based benefit design; adopting comprehensive biometric screening; exploring the option of opening or joining an employer-sponsored clinic; and leveraging mobile technology.
Which strategies or tactics are you considering to implement in 2015?
Source:
Spears, T. (2014 December 19). 5 Crucial Wellness Strategies for Self-Funded Companies[Web blog post]. Retrieved from https://www.careatc.com/ehs/5-wellness-strategies-for-self-funded-companies
7 Social Security facts Americans need to know
There are millions of Americans who depend on Social Security to fund their retirement. Many of the people who depend on social security for their retirement funding tend to overestimate how much money they will receive, or how long the money will last. With the many changes that have occurred to Social Security over the years many Americans are out of touch with how the program works and how it fits into their overall retirement strategy. Here is a great list compiled by Marlene Y. Satter from Benefits Pro on the top 7 things Americans need to know about Social Security and how it can impact their retirement.
7. Monthly benefits are based on the age at which you collect and the average of your highest 35 years of earnings.
How many years have you paid into Social Security?
The SSA will take your 35 highest paid of those years and average them to come up with what your monthly benefit will be.
Then, depending on whether you decide to go for early retirement (age 62), full retirement age (currently age 66, but rising to 67) or keep working till age 70, that will determine your benefit.
If you retire at age 62, your benefit will be reduced. At the full retirement age you’ll get your full benefit, but if you work till 70 the benefit will keep increasing.
The longer you work and don’t claim, the higher your benefit will be, but it stops growing once you hit age 70.
6. Claiming too early can cut your benefits for life.
If you decide to collect Social Security when you’re 62 (or, for that matter, any time before you hit age 70), your benefit will be paid at the minimum level you earned through your career and won’t rise (except for cost-of-living raises) at all.
If, on the other hand, you can wait till age 66, you’ll get at least a third more in those monthly checks than you would at 62.
But if you wait till age 70, your benefit will be at least 75 percent higher. That’s according to the Social Security Claiming Guide from the Center for Retirement Research at Boston College.
Oh, and the same goes for your spouse. If you claim early and die, your spouse will be restricted to that smaller benefit for life as well—unless said spouse has a separate career and benefits to draw on.
5. Widows and widowers can claim on their deceased spouses’ records to delay claiming on their own.
A widow or widower can claim a survivor benefit on their late spouse’s record in order to postpone claiming their own benefit—which can be very helpful should they want to delay claiming till age 70.
And, as the Claiming Guide points out, since most survivors are women and women’s benefits are generally lower—thanks to a range of reasons, including less time in the workplace and lower salaries—a husband’s benefit will generally be higher.
If, however, a woman’s benefit would be higher than her late husband’s, claiming on his record would allow her to delay claiming until age 70 to maximize her own benefit.
That said, survivor benefits are available as early as age 60, or age 50 if disabled, but they’re reduced up to 28.5 percent if claimed before the recipient’s full retirement age.
Survivor benefits can also be claimed by a divorced spouse as long as the marriage lasted at least 10 years.
4. Husbands can boost wives’ survivor benefits by delaying claiming.
Since most women survive their husbands—by an average of 6 years, in fact—a husband who wants to maximize his wife’s survivor benefit in the event of his death can delay claiming his own benefit as mentioned earlier.
In fact, a husband can increase the monthly benefit his wife gets as his survivor by more than 20 percent if he delays claiming Social Security until age 66 instead of doing so at age 62, if he waits till age 70 to claim benefits, that rises to 60 percent.
3. Continuing to work after claiming before full retirement age will cost you.
It might seem like a terrific idea to claim Social Security early and just keep working; after all, what’s not to like?
You gain another source of income, you’re still making money and maybe you envision just socking the extra money into savings for later in retirement.
But there’s one (not-so-)little flaw with that idea: Social Security may giveth, but it will also taketh away.
If you did that last year and weren’t already at the full retirement age, you’ve already learned to your sorrow that for every $2 above $15,720 you earned in calendar year 2016, Social Security withheld $1.
And Social Security will do that every year till you hit full retirement age; in that year, it will keep $1 for every $3 you earn above $3,490 each month.
If you wait to pursue that strategy till the year after you’ve hit full retirement age, however, it won’t withhold anything.
The good news is that you don’t actually lose that money; it’s restored to increase your monthly benefits later.
2. Social Security provides half the income for 61% of seniors.
It’s all very well to say that seniors will have Social Security to depend on, but the majority of seniors have few other resources to draw on.
A report on Madison.com highlights how essential Social Security is to the majority of seniors, regardless of how long they’ve worked or how much they’ve saved, with some statistics from Social Security itself—and one of those is just how important Social Security is to people’s financial well-being during retirement.
Whether they’ve managed to save more in 401(k)s, IRAs or even an actual pension plan, seniors are still deriving much of their income from those monthly Social Security checks.
1. Social Security provides at least 90% of income for 43% of unmarried seniors.
Lest you think that Social Security is just one leg of the proverbial three-legged stool, keep in mind the statistic above.
Without additional sources of income, unmarried seniors who are almost, or completely, dependent on Social Security checks will almost certainly not have a pleasant retirement—or a healthy one.
See the original article Here.
Source:
Satter M. (2017 August 29). 7 social security facts americans need to know [Web blog post]. Retrieved from address https://www.benefitspro.com/2017/08/29/7-social-security-facts-americans-need-to-know?ref=mostpopular&page_all=1
4 Reasons Employers Should Offer Supplemental Life Insurance
Is life insurance included in your employee benefits program? For many employees, their only form of life insurance they have is the basic group life plan provided by an employer. This standard version of life insurance is usually not enough to maintain most employees financial wellness. Supplemental life insurance plans can enhance the standard coverage provided by most employers by providing employee financial security for their futures. While these plans can be a great way to boost an employees financial wellness only about one-half of employers across the nation offer supplemental life insurance with their employee benefits. Take a look at this great list put together by Mike Wozny from Think Advisor and find out the top 4 reasons why you should be offering your employees supplemental life insurance.
Depending on an individual family’s needs, supplemental life insurance can build on the employer-provided life insurance benefit, and helps employers give their employees the future financial security their employees need. For those employers who are not currently offering supplemental life, here are four key reasons they should start:
- Many employers can offer employees the financial security of supplemental life insurance without increasing their benefits budget. Because supplemental life insurance is opt-in and chosen by individual employees as appropriate for their situations, employers can offer supplemental life insurance as an option at no additional cost to the employer. Employees can then customize their coverage to their needs depending on their financial responsibilities.
- Many group carriers offer employers help in enrolling employees in supplemental life. Employers can host on-site enrollment sessions lead by a life insurance expert or hold a webinar led by the carrier followed by online enrollment. Many carriers even offer customized enrollment materials for each employee — all without adding to the employer’s human resources teams’ workload.
- Financial security is tied to employees' productivity. The Consumer Financial Protection Bureau has found that when employees have to spend time and energy worrying about providing for their families, they are more productive. Appropriate life insurance is a key factor in overall financial health, and provides employees with the peace of mind that lets them focus their energy elsewhere.
- Comprehensive benefits packages contribute to higher employee satisfaction and retention.The Society for Human Resource Management has also found that benefits offerings are important to employees’ decisions about what companies to work for and how long to stay. Offering a benefits package that includes supplemental life insurance coverage allows employees to customize benefits to their own needs.
With the loss of a loved one, many families also lose their income, which can be not only emotionally devastating, but financially devastating as well. When employers offer a complete benefits package, including one that promotes financial wellness, it gives their employees peace of mind, and helps attract and retain top workers.
Though life insurance is rarely a topic that families want to think about, employers can help employees obtain the right amount of insurance to protect their finances by offering supplemental life insurance options. For those employers who are not currently offering these benefits, in many cases they can be added at no expense, with little additional time required to administer them, and at great potential benefit to both the company and its employees.
See the original article Here.
Source:
Wozny M. (2016 October 19). 4 reasons employers should offer supplemental life insurance [Web blog post]. Retrieved from address https://www.thinkadvisor.com/2016/10/19/4-reasons-employers-should-offer-supplemental-life
5 Things Millennials Need to Know About Life Insurance
As millennials grow older and start planning for their futures, one thing they will have to think about is life insurance. While access to the internet and mobile data has made learning about life insurance easier than before many millennials still have many unanswered questions when it comes to planning for their life insurance policy. Take a look at his great column by Helen Mosher from Life Happens and find out the top 5 thing Millennials need to know about life insurance.
1. Life insurance is a form of protection. If you Google “life insurance” you’ll get a slew of ads telling you how cheap life insurance can be, without nearly enough information about what you need it for. That’s probably because it’s not terribly pleasant to think about: this idea that we could die and someone we care about might suffer financially as a result. Life insurance provides a financial buffer for the people you care about in the event something happens to you. Think just because you’re single, nobody would be left in the lurch? Read the next point.
2. College debt may not go away. Did someone—like your parents—co-sign your student loans through the bank? If so, the bank won’t discharge that debt upon your death the way that the federal government would with federal student loans. That means your parents, or others who signed the paperwork, would be responsible for paying the full balance—sometimes immediately. Don’t saddle them with the bill!
3. If you don’t know anything about life insurance, it’s probably better if you don’t buy it off the internet. It’s what we’re used to: You find the thing you need or love on Amazon or Ebay or Etsy, click a few buttons, and POOF. It arrives at your door. But life insurance is a financial planning product, and while it can be as simple as a 20-year term policy for less than a cup of coffee each day (for real!), going through your options with an insurance professional can ensure that you get the right amount for the right amount of time and at a price that fits into your budget. And many people don’t know that an agent will sit down and help you out at no cost.
4. Social fundraising only goes so far. This relatively recent phenomenon has everyone thinking that they’ll just turn to GoFundMe if things go awry in their lives. But does any grieving person want to spend time administering a social fundraising site? The chances of going viral are markedly slim, and social fundraising sites will take their cut, as will the IRS. And there is absolutely no guarantee about how much—if any—money will be raised.
5. The best time is now. You’ll definitely never be younger than you are today, and for most of us, the younger we are the healthier we are. Those are two of the most important factors for getting affordable life insurance coverage. So don’t delay. And if you don’t have an agent, you can also use our Agent Locator. The key is taking that first step.
See the original article Here.
Source:
Mosher H. (2017 July 5). 5 things Millennials need to know about life insurance [Web blog post]. Retrieved from address https://www.lifehappens.org/blog/5-things-millennials-need-to-know-about-life-insurance/
SELF-INSURED GROUP HEALTH PLANS
Are you looking to switch your company's healthcare plan to a self-funded option? Take a look at this informative column by the Self-Insurance Institute of America and find out everything you need know when researching the best self-funded plan for your company.
Q. What is a self-insured health plan?
A. A self-insured group health plan (or a 'self-funded' plan as it is also called) is one in which the employer assumes the financial risk for providing health care benefits to its employees. In practical terms, self-insured employers pay for each out of pocket claim as they are incurred instead of paying a fixed premium to an insurance carrier, which is known as a fully-insured plan. Typically, a self-insured employer will set up a special trust fund to earmark money (corporate and employee contributions) to pay incurred claims.
Q. How many people receive coverage through self-insured health plans?
A. According to a 2000 report by the Employee Benefit Research Institute (EBRI), approximately 50 million workers and their dependents receive benefits through self-insured group health plans sponsored by their employers. This represents 33% of the 150 million total participants in private employment-based plans nationwide.
Q. Why do employers self fund their health plans?
A. There are several reasons why employers choose the self-insurance option. The following are the most common reasons:
- The employer can customize the plan to meet the specific health care needs of its workforce, as opposed to purchasing a 'one-size-fits-all' insurance policy.
- The employer maintains control over the health plan reserves, enabling maximization of interest income - income that would be otherwise generated by an insurance carrier through the investment of premium dollars.
- The employer does not have to pre-pay for coverage, thereby providing for improved cash flow.
- The employer is not subject to conflicting state health insurance regulations/benefit mandates, as self-insured health plans are regulated under federal law (ERISA).
- The employer is not subject to state health insurance premium taxes, which are generally 2-3 percent of the premium's dollar value.
- The employer is free to contract with the providers or provider network best suited to meet the health care needs of its employees.
Q. Is self-insurance the best option for every employer?
A. No. Since a self-insured employer assumes the risk for paying the health care claim costs for its employees, it must have the financial resources (cash flow) to meet this obligation, which can be unpredictable. Therefore, small employers and other employers with poor cash flow may find that self-insurance is not a viable option. It should be noted, however, that there are companies with as few as 25 employees that do maintain viable self-insured health plans.
Q. Can self-insured employers protect themselves against unpredicted or catastrophic claims?
A. Yes. While the largest employers have sufficient financial reserves to cover virtually any amount of health care costs, most self-insured employers purchase what is known as stop-loss insurance to reimburse them for claims above a specified dollar level. This is an insurance contract between the stop-loss carrier and the employer, and is not deemed to be a health insurance policy covering individual plan participants.
Q. Who administers claims for self-insured group health plans?
A. Self-insured employers can either administer the claims in-house, or subcontract this service to a third party administrator (TPA). TPAs can also help employers set up their self-insured group health plans and coordinate stop-loss insurance coverage, provider network contracts and utilization review services.
Q. What about payroll deductions?
A. Any payments made by employees for their coverage are still handled through the employer' s payroll department. However, instead of being sent to an insurance company for premiums, the contributions are held by the employer until such time as claims become due and payable; or, if being used as reserves, put in a tax-free trust that is controlled by the employer.
Q. With what laws must self-insured group health plans comply?
A. Self-insured group health plans come under all applicable federal laws, including the Employee Retirement Income Security Act (ERISA), Health Insurance Portability and Accountability Act (HIPAA), Consolidated Omnibus Budget Reconciliation Act (COBRA), the Americans with Disabilities Act (ADA), the Pregnancy Discrimination Act, the Age Discrimination in Employment Act, the Civil Rights Act, and various budget reconciliation acts such as Tax Equity and Fiscal Responsibility Act (TEFRA), Deficit Reduction Act (DEFRA), and Economic Recovery Tax Act (ERTA).
See the original article Here.
Source:
Self-Insurance Institute of America (Date). Self-insured group health plans [Web blog post]. Retrieved from address https://www.siia.org/i4a/pages/index.cfm?pageID=4546
The IRS Is Still Enforcing The Individual Mandate, Despite What Many Taxpayers Believe
Did you know that there are many people who still don't believe that they will be hit by tax penalty if they do not have health insurance? Here is an informative article by Timothy Jost from Health Affairs on why everyone should be keeping up with their health insurance in-order to avoid a tax penalty by the IRS.
There has been considerable speculation since President Trump’s Inauguration Day Affordable Care Act Executive Order as to whether the Internal Revenue Service is in fact enforcing the individual and employer mandates. The IRS website has insisted that the mandates are still in force, despite the Executive Order and despite the fact that the IRS decided not to implement for 2016 tax filings a program rejecting “silent returns” that did not indicate compliance with individual mandate requirements.
There is evidence, however, that many taxpayers do not believe it. An April report from the Treasury Inspector General for Taxpayer Services found that as of March 31, a third fewer taxpayers were paying the penalty than had been the case a year earlier. More importantly, insurers seem to believe that the IRS is not enforcing the mandate, or at least that taxpayers do not believe the IRS is enforcing the mandate, and are raising their rates for 2018 to account for the deteriorating of the risk pool that nonenforcement of the mandate will cause.
It is of note, therefore, that Robert Sheen at the ACA Times has identified several letters from the IRS reaffirming that it is still in fact enforcing the individual, and employer, mandates.
One is a letter reportedly sent in April by the IRS General Counsel to Congressman Bill Huizenga (R-MI) in response to an inquiry as to whether the IRS could waive the employer mandate with respect to a particular employer. The IRS replied that there was no provision in the ACA for waiver of the mandate penalty when it applied and that: “The Executive Order does not change the law; the legislative provisions of the ACA are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe.”
In a second letter in June, responding to an individual who had written to President Trump, the IRS similarly responded:
The Executive Order does not change the law; the legislative provisions of the ACA are still in force until changed by the Congress, and taxpayers remain required to follow the law, including the requirement to have minimum essential coverage for each month, qualify for a coverage exemption for the month, or make a shared responsibility payment.
Of course, whether taxpayers believe it, and whether insurers believe taxpayers believe it, is another question.
See the original article Here.
Source:
Jost T. (2017 August 21). The IRS is still enforcing the individual mandate, despite what many taxpayers believe [Web blog post]. Retrieved from address https://healthaffairs.org/blog/2017/08/21/the-irs-is-still-enforcing-the-individual-mandate-despite-what-many-taxpayers-believe/