A health insurance primer for your employees during Open Enrollment
The end of open enrollment season is quickly approaching. During open enrollment, employees have the chance to choose a benefits plan or change from the plan they currently have. Read this blog post for a few things employees should consider when choosing a plan.
Now is the time to choose the best health plan for you and your family. During open enrollment season, employers and the Health Insurance Marketplace (or Exchange) let you choose a plan or change from the plan you have. Making the right choice can impact your health and your wallet.
Even if your current coverage seems satisfactory, your employer or the Exchange may offer new options that better suit your needs. It is important to compare costs and to understand differences in benefits, networks and other rules. In some states, plans available outside the official Marketplace offer attractive, low premiums but may have dollar limits on benefits, or may not provide coverage for childbirth, mental health and other services mandatory for plans that qualify under the Affordable Care Act (the “ACA” or “Obamacare”). Review and compare such plans’ terms carefully.
The time for your decision is limited. Employers generally provide a month or more to make your selection. Open enrollment for the federal Marketplace runs only from November 1, 2019, to December 15, 2019. Exceptions may be made for life changes like the birth of a child or loss of coverage under a spouse’s plan, but if you miss open enrollment season, you will probably have to wait another year to enroll. Here are some things to think about when choosing a plan.
Costs
The first cost to consider is the premium — the payment, usually monthly, to maintain coverage. If you get your plan through your job, your employer may pay all or part of the premium. If you choose a Marketplace plan, you may qualify for a premium tax credit to reduce the premium.
Other insurance costs are known as cost sharing, because you share the cost of care with your plan. They may take the form of a copay (a fixed dollar amount for each service), coinsurance (a set percentage of the cost of a service) or a deductible (the amount you must pay before your plan starts paying for services). If you select a Marketplace plan, you may qualify for cost-sharing reductions to lower those expenses.
In principle, it would be nice if all the costs were as low as possible. But usually, low-cost sharing comes with a high premium. High-deductible health plans may offer lower premiums but you will pay more out-of-pocket before your insurance pays anything.
In shopping for a health plan, consider how high a premium you are willing to pay for the level of cost sharing you would like. For example, if you or a family member have a chronic illness, you may need regular treatment and may be at risk for hospitalization. In that case, you may be willing to pay a higher premium for low-cost sharing. But if you are a healthy, young, single adult who rarely sees a doctor, you might accept a high deductible in exchange for a low premium.
Bear in mind that if you have a high-deductible health plan, you might be eligible to set up a health savings account (HSA). An HSA provides tax savings that stretch the dollars you contribute to the account to help pay for qualified medical expenses.
Choice of Doctors
If you like your current doctors and want to keep seeing them, make sure they and their facilities belong to the network of providers who have contracted with the plan you are considering. Check the plan’s online provider directory to make sure those doctors and their facilities are listed in its network. Even if you do not have a regular doctor, make sure the network includes providers close to where you live and work.
If you want to choose freely among many providers, a plan with a broad network might be for you. That may be more expensive than a plan with a narrow network, which may cost less but has a more limited choice of providers.
Out-of-Network Coverage
As good as a plan’s network might be, you may still wish to consult providers outside the network from time to time. If so, consider a Preferred Provider Organization (PPO) or Point of Service (POS) plan; each provides out-of-network benefits. With such plans, you will still spend more for out-of-network than in-network care, but at least you will have some coverage. Two other types of plans, Health Maintenance Organization (HMO) and Exclusive Provider Organization (EPO), typically will not pay for out-of-network care except for emergencies.
Who’s in Charge of Your Care?
In HMO and POS plans, you choose a primary care physician (PCP) who acts as a form of “gatekeeper” for your care. Unless it is an emergency, when you need medical treatment, you go to the PCP first. The PCP either treats you personally or refers you to specialists in your network. If you like having a PCP’s guidance, this arrangement might work for you. But if you prefer choosing specialists directly, you might opt for a PPO or EPO.
ACA-Compliant versus Association and Short-Term Plans
Whatever plan you choose, it is important to consider whether it covers all the types of healthcare you might need and whether it limits the dollar amount of your coverage. Plans that comply with the ACA are comprehensive because they have to cover 10 essential health benefits. Short-term, limited-duration (STLD) health plans, do not have to cover all those benefits. They may, for example, not cover childbirth, mental health or prescription drugs. If you end up needing care that is not covered, you will have to pay the whole cost yourself.
AHPs and STLD plans differ from ACA-compliant plans in other ways. For example, STLD plans can impose annual or lifetime dollar limits on coverage. If your care costs more than those limits, you have to pay the excess amount.
SOURCE: Gelburd, R. (5 December 2019) "A health insurance primer for your employees during Open Enrollment" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/a-health-insurance-primer-for-your-employees-during-open-enrollment
Why employers should consider adding volunteer time off benefits
Employers are being pushed to become savvier with social responsibility causes and their benefit offerings with the strong job market. This is giving rise to volunteer time off benefits. Read this blog post from Employee Benefits News for more on why employers should consider adding volunteer time off benefits.
The strong job market is pushing employers to become more savvy about socially responsible causes. This is giving rise to volunteer time off benefits as one popular strategy for employers seeking unique ways to attract and retain talent.
Indeed, 65% of companies offered paid time volunteer programs in 2018, according to data from the organization Chief Executives for Corporate Purpose, which looks to help companies transform their social strategy. That figure represents a 4% rise from 2017.
Organizations that offer employees paid days off to volunteer their time and support the nonprofit causes they care about are going to be more attractive to job seekers.
“Offering VTO as a benefit for employees is one of the best ways to engage employees with their local communities through volunteering and donations,” says Jeff Fraley, vice president of corporate engagement at United Way of the National Capital Area, an organization that provides relief of social problems affecting the community. “It encourages employees to participate in social good and helps to foster meaningful relationships within a community and the company itself.”
About 75% of millennials expect their employer to participate in social good, either with donations or through volunteering, according to a Glassdoor survey. Additionally, 51% of workers expect their employers to allocate work time and resources for their employees to volunteer for social causes.
United Way took a look at VTO benefits across the country in an effort to better understand these programs from an employer/employee perspective. The survey looked at the demographics of 49 large U.S. companies that offer VTO in order to get a sense of the types of workplaces offering this benefit. What it found was that the majority of companies that offer VTO are headquartered in New York, and in or around Silicon Valley.
Additionally, of the 49 companies studied, 12 were in the professional services industry, 12 were in the information technology industry, and nine companies were in the financial services and insurance industries. The survey also uncovered that the maximum number of volunteer hours offered per year to each employee is 20 hours, which amounts to about two and a half days of volunteer time off.
If the company with the largest revenue headquartered in each state implemented one day of VTO, the projection of total volunteer hours in the U.S. would be over 75 million hours, or nine million days, according to United Way. It would cost companies, on average, $27.4 million to implement an annual eight hour VTO policy.
“VTO is just one option if you're looking to expand your impact in the community,” Fraley says. “An employer can also sponsor a nonprofit, match employee donations, or other philanthropic initiatives. What’s important is to think about some sort of incorporation of corporate social responsibility as we're seeing that it's an increasingly important criterion of employers for millennials.”
SOURCE: Schiavo, A. (2 December 2019) "Why employers should consider adding volunteer time off benefits" (Web Blog Post). Retrieved from https://www.benefitnews.com/news/why-employers-should-consider-adding-volunteer-time-off-benefits
How to maximize employee participation in HSA plans
According to the Employee Benefit Research Institute (EBRI), 96 percent of HSA account holders do not invest any portion of their contributions. Health Savings Accounts (HSAs) offer account holders the option to invest and investments are not subject to taxation. Read this blog post to learn more about maximizing employee participation in HSA plans.
High-deductible health plans (HDHPs) not only offer employees the opportunity to save on their premium contributions, they also provide access to what are commonly touted as triple-tax-advantaged health savings accounts (HSAs).
HSA users can put away money tax-free, and account distributions for eligible healthcare costs aren’t subject to federal income tax. Plus, these accounts offer users the option to invest and any investment returns aren’t subject to taxation. Not even the storied 401(k) promises this much bang for the proverbial buck. In fact, HSAs offer the best of pre-tax 401(k) and Roth contributions.
But, no matter how sweet a tax deal this is, for most of the over 25 million account holders, investing takes a back seat to current healthcare needs. According to EBRI, 96% of account holders don’t invest any portion of their balance, which leaves just 4% taking advantage of all three tax-advantaged components of the HSA. Instead, HSA users fall into two distinct categories: spenders and savers, with spenders representing over three-quarters of account holders.
In 2017, the average deductible for employee-only coverage was $2,447 and almost a quarter of employees covered under one of these plans had a deductible of $3,000 or more.
Let’s imagine it’s 2017, and our sample employee — let’s call her Emily — has a $2,500 deductible. Emily funded her HSA to the 2017 maximum of $3,400. If Emily had healthcare costs that totally eroded her deductible and she used her HSA dollars to fund them, at the end of the year Emily would have $900 left in her account ($3,400 maximum minus $2,500 to cover her deductible). That assumes no additional cost-sharing or eligible expenses.
However, Emily is in the minority. Only 13% of employees are fully funding their accounts, rendering an investment threshold potentially out of reach for most people, especially when they are using their HSA dollars for out-of-pocket healthcare costs.
With such a small percentage of HSA owners taking advantage of investment opportunities, finding effective ways to support the spending or saving habits of the majority of users seems to be tantamount. So is helping them address their concerns about deductible risk. As employers help people become smarter consumers, they may be able to build their accounts over time and ultimately pull the investment lever.
So, how can employers support these spenders and savers?
Encourage people to contribute, or to contribute more. EBRI found that only half of account holders put anything in their HSA in 2017, and just under 40% of accounts received no contributions — including employer dollars. Employer contributions can help overcome employees’ reluctance to enroll in an HDHP, but the way they are designed matters. Matching contributions act as a strong incentive for employees to save while also protecting the most vulnerable employees from having to shoulder the entire burden of out-of-pocket healthcare costs.
Another technique to help address employees’ anxiety around a high deductible is to pre-fund out-of-pocket costs by allowing employees to borrow from future contributions. If the employee incurs costs but doesn’t have enough HSA dollars to cover them, they can use future contributions as an advance against current out-of-pocket expenses. The employer provides the funds up front and the employee pays back those funds through payroll deductions. This acts as a safety net for new account holders or those without substantive balances.
Drive people toward the maximum contribution. With fewer than 20% of employees fully funding their HSA, there’s certainly room to move the needle. While additional contributions may not be possible for all employees, reinforcing the tax advantages and the portability of the HSA may help people divert more dollars to insulate themselves against healthcare costs.
Highlight ways to save on healthcare costs. When employees are funding their care before meeting a high deductible, help them spend those HSA dollars wisely. Promote telehealth if you offer it and remind employees about the most appropriate places to get care (for example, urgent care versus the emergency room). Reinforce the preventive aspects of your healthcare plan, including physicals, screenings and routine immunizations. If you have a wellness program that includes bloodwork and biometric testing, make sure you tie this into your healthcare consumerism messaging. There’s generally a lot of care employees can get at no cost, and it helps when you remind them.
Don’t lose contributors to an over-emphasis on investing. The tax advantages of investing in an HSA are undeniable, but most people are just not there yet. When we describe HSAs as a long-term retirement savings vehicle, we may inadvertently be messaging to non-participants that these accounts aren’t for them. Speak to the majority with messaging around funding near-term healthcare costs on a tax-advantaged basis and the flexibility to use HSA dollars for a wide variety of expenses beyond just doctor and pharmacy costs. Investing information should be included, but it shouldn’t be the primary focus.
HSAs are gaining in popularity, and the majority of account holders are using them to self-fund their healthcare, which is a good thing. A small but growing number are taking advantage of their plans’ investment options. Employees eventually may become investors as their accounts grow and they better understand the opportunity to grow their assets and save for the longer term. For now, however, the educational and engagement focus for HSA plan sponsors should primarily be around participation, maximizing contributions and spending HSA dollars wisely.
SOURCE: Cosgray, B. (6 December 2019) "How to maximize employee participation in HSA plans" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/how-to-maximize-employee-participation-in-hsa-plans
Why using a 401(k) to pay for emergencies is hurting employers and employees
More and more employees are withdrawing $1,000 or less from their 401(k) retirement accounts to help pay for emergency expenses according to HR leaders. This trend is causing corporate leaders to become concerned about the financial stress that their employees are living with. Read the following blog post to learn more.
More than ever, HR leaders at Fortune 500 companies are reporting that employees are withdrawing $1,000 or less from their hard-earned 401(k) retirement accounts to pay for emergency expenses. These employees — often living at the brink of being financially unstable — are using the funds for unexpected emergency expenses like car repairs, medical bills or even to purchase books for their college-age children.
Corporate leaders are now, more than ever, concerned that many of their employees live under a high degree of financial stress that can affect their productivity, creativity and even their health, resulting in absenteeism and drops in productivity that ultimately impact the bottom line. HR managers are especially feeling the pain as they are called upon to handle the excessive paperwork needed for the 401(k) plan withdrawals, causing extra work that could be spent more productively on other projects that benefit all employees.
The fact that more Americans than ever are dipping into their 401(k) accounts for emergency funds reveals that many are living above their means or working below their needs financially. While it’s important to have an emergency fund, for many people savings is a luxury they simply can’t afford. According to a Federal Reserve survey, nearly 40 percent of Americans said they don’t have enough cash on hand to cover an unexpected $400 expense. The quick fix for many is to use credit cards or ask family or friends for a loan when an emergency arises, but when those are not options, tapping into the 401(k) accounts is becoming increasingly common.
Some companies are partnering with payday loan companies so employees will refrain from tapping into their retirement funds. This is actually a worse idea because they’re setting their employees up to fail by enabling a vicious cycle of debt employees may never be free of.
Financial education could be the key to helping employees gain control of their financial lives. Companies that promote financial literacy courses and attendance at financial seminars or conferences offer the first step toward a better path for future financial stability. Offering or subsidizing the cost of continuing education courses help inspire employees to begin a lifelong journey of education for higher salaries and career advancement. Companies that promote education and career advancement attract, engage and retain employees longer than companies that don’t.
Flexible benefits can help
Companies can help their employees refrain from using their 401(k) retirement accounts as a bank if they offer flexible benefits. Employees get to choose how to use their earned benefits, like utilizing the monetary value of their unused paid time off (PTO) for other priorities such as paying for an emergency expense, paying down student loan debt or funding a vacation, among other things. Companies that offer flexible benefits are giving workers the ability to finally be in the driver’s seat of their careers and lives. When companies empower employees in this way, job satisfaction, productivity and creativity go way up.
Flexible benefits are a no brainer to organizations that want to attract, recruit, engage and retain top talent. Salary isn’t the only factor in determining a good career move, and companies that want to win the talent war will offer some type of flexible benefits. Every employee should have the ability to choose benefits based on their individual needs, avoiding the damaging financial practice of using 401(k) accounts for emergency expenses.
SOURCE: Whalen, R. (25 November 2019) "Why using a 401(k) to pay for emergencies is hurting employers and employees" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/employees-are-using-401k-funds-for-emergencies
Education benefits are a critical offering to retain top talent
The top reason why employees pursue higher education and training is to keep up with or get ahead of any changes in their specific position, according to a recent survey. Read the following blog post for more on why education benefits are critical when it pertains to retaining top talent.
The American workplace is changing rapidly and so are the expectations workers have of their employers. Under pressure to keep pace with technology’s transformation of the labor market, employers are racing to up- and re-skill their workforce. They know that frontline workers, whose tasks are often most susceptible to automation, need training to remain viable and competitive.
According to this year’s Bright Horizons Working Learning Index, which surveyed more than 30,000 working learners, employees are well aware that their workplace is changing. When asked to select their top three reasons for pursuing more education or training, the most prevalent answer was that they wanted to “keep pace with or get ahead of changes in my position.” This beat out all other reasons, including advancement, opportunities at another organization and even earning more money at work.
Generation Z workers now rank education over all other benefits in importance, excluding healthcare. But they tend to differentiate between education and training, ranking education benefits above training and development.
That’s with good reason: a college degree is still the great lever for economic mobility and career advancement among frontline workers, driving higher lifetime earnings that total more than $2 million, on average. But with college costs rising, Gen Z is looking to employers to fill the gap. About four in ten Gen Z employees believe their tuition reimbursement program is the single best benefit offered by their employer. Twice as many say it is among the top three voluntary benefits.
Among the surveyed workers, three-quarters (76%) say a tuition reimbursement program would make them more likely to remain at their organization, and eight in 10 (81%) say it would make them more likely to recommend working there to a friend. Nearly two-thirds (64%) say such benefits make them “happier at work.”
Indeed, employees of all generations rank education benefits far above those offered for wellness and even above highly coveted benefits like life or disability insurance and paid family leave. In this survey, only retirement savings programs and paid sick or vacation time ranked more highly.
Importantly, nearly half (49%) said they would not have pursued education if their employers did not offer tuition assistance. Slightly more (55%) say the time commitment required for a degree or certification under their employer’s tuition assistance program is the biggest challenge they faced — as a result, many see the value of competency-based and self-paced learning options, often delivered online.
Data like this may change the calculus for employers considering investments in not just upskilling but education. While it may seem counterintuitive, employers must offer their frontline workers broad learning opportunities and educational benefits that can help them move beyond their current positions and pursue the next steps of their careers. Companies must have the foresight to invest in their potential.
SOURCE: Donovan, P. (22 November 2019) "Education benefits are a critical offering to retain top talent" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/offering-education-benefits-retains-top-talent
Providing an HSA, FSA, or HRA Health Plan for your Employees
When open enrollment hits annually, it is not uncommon for employers to feel exasperated when staring down a list of acronyms such as HSA, FSA and HRA. As it should go without saying, the most common first thought is, “What does any of this mean?” Even the most seasoned experts have difficulty with understanding the complexities of various care options. That’s why in this installment of CenterStage, Kelley Bell, a Group Health Benefits Consultant at Saxon Financial, is here to break down the ‘alphabet soup’ that is HSAs, FSAs and HRAs.
What Is an HSA?
An HSA stands for a Health Savings Account. Kelley stated that HSAs work in conjunction with your existing HDHP plan (given you already have one) to cover costs associated with eligible medical, dental and vision expenses. Available to open just like a bank savings account, Kelley said, “It is your account; yours if you leave the employer and can contribute as long as you have an HDHP and can use the funds until they are gone, even if you are no longer in an HDHP.” For most, this applies to retirement. If you are reasonably healthy throughout your working life, Kelley said you can carry a large HSA balance into retirement. At that point, the funds can be used to cover the out-of-pocket medical costs that often increase with you as you age.
In addition to all the above, certain tax advantages exist within an HSA plan:
- Contributions are excluded from federal income tax.
- Interest earned is tax referable.
- Withdrawals for eligible expenses are exempt from federal income tax.
HSAs are typically available through employers, but individuals can establish one, as well. Many banks offer HSA programs for their customers, meaning if your employer does not offer the benefit, you can create an HSA account there.
What Is an FSA?
An FSA is a Flexible Savings Account. Much like an HSA, these plans cover the payment of medical, dental and vision-related expenses, and contributions you make to the plan are tax-deductible. Similarly, when you open an FSA account, you’re typically provided with a debit card or checkbook, so the funds can be accessed in the account. However, Kelley stated an FSA plan has a catch: “An FSA cannot roll over unused funds from year to year and is not portable.” Therefore, any contributions made to the plan that have not been spent by the end of the year are forfeited.
Some employers, as Kelley noted, do have options that will help you avoid complete forfeiture of unused funds. Certain employers allow their employees to carry over up to $500 of unused funds into the following year, while others will extend the use of the funds for up to two and a half months into the new year. Employers generally will offer one or the other, but never both. Some, however, offer no such option at all.
Kelley mentioned general purpose FSA coverage, and stated it can “make you ineligible for HSA contributions.” She continued to add that certain types will not prevent HSA eligibility, i.e. limited FSA for vision, dental, parking or “post-deductible FSA” which reimburses you for preventative care or for medical expenses that are incurred “after the minimum annual HDHP deductible has been met.” As a result of forfeiting any unused funds in the account, an FSA is best used by someone who has ongoing and predictable medical expenses. In this situation, it is likely you will deplete the funds in the account, whereas if you are considered healthy and have limited medical expenses (i.e. minor illness, sinus infection), the potential for forfeiture is high, and you may have to forgo the account. FSAs are employer-sponsored and typically are an option as part of a ‘cafeteria plan’.
What Is an HRA?
An HRA is a Health Reimbursement Arrangement. Like the other plans described in this article, an HRA is a tax-free employer funded amount of money for healthcare expenses. Contributions, as Kelley explained, “can be excluded from gross income, meaning that won’t pay taxes on that money and reimbursements from the HRA are tax-free when used for qualified medical expenses.” Depending upon the type of HRA, unused funds may or may not be rolled over from one year to the next. However, employers may also allow employees to use their HRA funds even into their retirement.
The benefits of an HRA take action after the employee has met a specific portion (i.e. employee meets 1st $2500 of a $5000 deductible), making it easier for the employee to meet their high deductible. HRAs are good for employers who want more control over how their medical dollars are put to use. Naturally, if the employer is paying the cost of the HRA, it can be of an increased advantage than contributory health insurance premiums and direct payment for out-of-pocket expenses. With an HRA, the employer determines the reimbursements and does not have to contribute the same amount for all employee groups (i.e. tiers of employee coverage, employee/child, employee/spouse and family).
How Saxon Helps
It is important to understand the needs of every client and educate their employees on how to use their healthcare. Saxon values client education and service above all else. We make educating employees a priority and ensure their benefits are understood and easy to use. Saxon represents all of the major carriers, allowing us to secure the best plans and rates for you and your staff, which we review annually.
If you are considering offering an HSA, FSA or HRA insurance plan to your employees, contact Kelley Bell today at (937) 672-1547 or kbell@gosaxon.com to begin exploring the benefits of adding this superior level of coverage today.
Simple Open-Enrollment Tips That Can Make a Big Difference
Many employees associate fear, anxiety or apprehension with open enrollment, the annual period when they select which employer-sponsored benefits they will have the coming year. Read this blog post from SHRM For a few simple tips to help out with this open enrollment season.
Trepidation is what comes to mind for many employees when asked their feelings about open enrollment, the annual period when they select employer-provided benefits for the coming year.
According to a nationally representative sample of 1,000 employees polled earlier this year, 33 percent cited "annoyance" or "dread" as their primary emotions when they thought about open enrollment and just 10 percent of workers said they were "confident" in the benefits choices they made when the enrollment process was over, according to VSP Vision Care's annual Open Talk about Open Enrollment survey.
In another survey, HR software company Namely found that 31 percent of employees give their employer a "C" or lower when it comes to open enrollment.
Here are some tips from benefits experts that will help you raise your grade this open-enrollment season.
What to Do, and Not to Do
Jennifer Benz, national practice leader at benefits communications firm Segal Benz, shared three bad HR practices that undermine open enrollment and three best practices for doing open enrollment the right way.
- Don't hide vital information from employees. Benz recalls how one company sent out its benefits materials but didn't include monthly costs. "A group of enterprising employees crunched the numbers and came up with estimates and circulated a rogue spreadsheet. Dealing with this communications fiasco took more work" than being upfront about costs, she noted.
Best practice: Be transparent and share the reasons you are making benefits changes. Break down the details and do the work for the employees. Provide scenarios so employees can better understand their options and cost breakdowns for different life situations.
- Don't cram in every benefit at once. Some companies hand out pages and pages of text, jamming a year's worth of communications into a few weeks, and figure they have done what they need to do. "What they have done is confused their employees," Benz said.
Best practices: Communicate the technical details of your various benefits over time. "Don't assume employees will weed through all your materials to make sense of the benefits offered to them," Benz said. Also make full use of visual aids. "Photos, icons, infographics, memes, charts, graphics and more—they all help to attract, and more importantly hold, people's attention," noted Amber Riley, a communications consultant to Segal Benz. "Whether you're driving an open-enrollment campaign, creating a new benefits guide or promoting a wellness program, when you increase the visual pleasure of what you are communicating, your people are more likely to engage, learn, understand and ultimately take action."
- Don't give employees too little time to process their open-enrollment choices. While many people wait until the last day to fill out the health care selection forms, they may have been considering their options with family members for weeks, so giving them just a few days to make decisions is not going to be enough.
Best practice: Build in a time frame that gives HR staff and employees the time they need. Benz recommended three weeks.
"People are always talking about learning from the best practices and success stories, but you can also learn a lot from other companies' mistakes," she noted. "When you prepare for enrollment in advance and anticipate issues—including those you and others have experienced in the past—you are better-equipped to avoid missteps. Your employees will notice and appreciate the extra effort."
Help Employees Ace Open Enrollment
"Open enrollment is often time-consuming and confusing for employees, but these choices can make a huge financial impact," said Julie Stich, CEBS, vice president of content at the International Foundation of Employee Benefit Plans, an association of benefit plan sponsors. She suggested that HR share the following advice with employees to help prepare them for the upcoming enrollment season:
- Take your time. Take time to really read through the enrollment materials you receive. If you are invited to a face-to-face meeting, make time to attend. It's possible you'll be offered different plan options and coverages this year. The better you understand the changes, the better decisions you'll make.
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Take a trip down memory lane. Think back to what happened in your life this year. How often did you and your family members need medical services? What kind? Are any treatments ongoing? Think about any life changes that could affect the benefits you need, like a marriage or divorce, a child going off to college, or a spouse changing jobs.
- Look ahead. Consider what the next year will look like for you and your family. Are you planning to have a baby? Knee replacement surgery? A root canal? Does someone need braces? New glasses? Keep this in mind as you look at your coverage options.
- Dive into the details. It's important to note whether the plans' provider networks have changed. Make sure your doctors are still in-network. Is your chiropractor also covered? Does the plan cover orthodontics? Is your spouse's daily prescription drug covered, and did the coverage change? Also consider areas of need like access to specialists, mental health care, therapies, complementary and alternative medicine, and chronic care. Look at the options offered in all plans, including health, dental, vision and disability.
- Get out your calculator. Add up the amount you'll need to pay toward your health premium plus deductibles, co-payments (flat-dollar amounts) for prescriptions and doctor office visits, and co-insurance (a percentage of the cost you'll pay) for services. Understand what you'll be asked to pay if you seek care outside your network. This will give you a clearer picture of how much you're likely to spend. The plan that looks to be the cheapest option may not really be the cheapest for you.
- Determine what's right for you. Consider your comfort level with risk. If you want your family to be covered for every eventuality, a more traditional plan, if one is offered, might be right for you. If you're comfortable taking on some upfront costs, a high-deductible plan with a lower premium ight be your plan of choice.
- Take advantage of extras. Your employer may offer the option to reduce your health premiums in exchange for your participation in a wellness program or health-risk assessment. It may match some or all of the money you save in your 401(k) plan. It might let you set aside tax-deferred money into a health savings account or flexible spending account. Also, check with your employer to see if it offers voluntary insurance with a group discount and payroll deduction for premiums—like critical-illness, pet, auto and homeowners coverage. If these options work for your situation, sign up.
- Ask questions. Don't be shy about asking your HR or benefits department to explain something if you're not sure. They're there to help and want you to make the best decisions for your situation.
"Taking the time upfront to carefully choose the best options will help employees better manage their finances throughout the year, alleviating stress and promoting productivity," Stich said.
SOURCE: Miller, S. (24 September 2019) "Simple Open-Enrollment Tips That Can Make a Big Difference" (Web Blog Post). Retrieved from https://www.shrm.org/ResourcesAndTools/hr-topics/benefits/Pages/simple-open-enrollment-tips-make-a-big-difference.aspx
How to Speak to Your Employees About Their Intimidating Benefits
Employers spend thousands annually to secure and offer benefits to their employees. However, a small amount of time and money are devoted to ensuring employees understand and appreciate their benefits. Properly communicating – what you say, how you say it and to whom you say it to – can make a tremendous difference in how employees think, feel and react to their benefits, employer and fellow co-workers.
In this installment of CenterStage, Jamie Charlton, founding partner and CEO of Saxon Financial Services, discusses the importance of offering sound education of benefits to employees, as well as how to effectively communicate their benefits in a clear, concise manner. Through 18 years in the financial services field, Jamie has instilled a focus on stressing to employers the importance of communicating and educating employees on all that is available currently and what may change with each upcoming plan year. Jamie believes a focus on premiums leads to “next level benefits”, an offering Saxon delivers.
The Need for Benefits Communication
Clearly communicating benefits is an increasing issue due to the complex dynamics of benefits plans. Previously, benefits decisions have been made primarily by employers. As a result, employees have not become educated consumers about their benefits or on how to implement them. This absence of engagement, as Jamie notes, causes employees to enroll in benefits that don’t fit their needs, pay too much for their coverage and not discover the full advantage of their offerings. Good communication is important and should cover all matters regarding plan offerings to employees and their dependents alike. The goal of a proper benefits plan, Jamie states, is to be enjoyable, comprehendible, and easily accessible. However, there currently exists an infliction point in employee benefits, and the entire process is changing.
This change is a factor of two main topics: (1) the continuing rise in medical costs and health insurance premiums and (2) a truly multigenerational workforce within the workplace. So how does an employer communicate their benefits to their employees?
Employers seeking to spread the word about their benefits offerings are continuing to seek out the expertise and experience found through Saxon. Understanding there is no one-size-fits-all method for every employer, Saxon delivers tools through tested methods to get your message across to employees. We explore your company’s offerings and assist you in crafting the perfect method to communicate and educate your employees on their existing plan offerings. Jamie gives the example of wellness programs and how to broadcast these offerings. Utilizing channels in which employees are bound to check – computers and smartphones – Saxon places the knowledge of how to display these offerings through informational web pages or email blasts.
Proper Benefit Education Begins with Saxon
While the methods above serve as channels for reaching employees, nothing compares to a direct, in-house explanation of your benefits to ensure your message is addressed and comprehended. Unique to Saxon is what Jamie notes as the “secret sauce” of Saxon’s employer and employee empowerment – the annual open enrollment meeting, which consists of nothing more than a step-by-step walk through of your entire health plan. This annual ‘seminar’ within your office closely examines the “nuts and bolts” of your plan to ensure everything is in-tact, working and done so with comprehension across the entirety of the organization.
Saxon understands the complexity of the modern healthcare scene and therefore is driven to provide the most comprehensive breakdown of your plan. Have more than one? No problem – We can compose a side-by-side analysis of your plans to show not only employers but employees where the strongest assets lie. Additionally, we stress the importance of shopping around at renewal time to make sure you get the best you can for your money. Jamie explained the goal of the meeting, as well as Saxon’s continued service year-round, is to “empower employees to have a choice.”
Empowerment from Saxon comes in many different forms. Just one of these many ways discovered through Saxon’s annual meeting is placing the power of online benefits administration at the fingertips of employees. Traditionally, when an employee needed to update their plan (i.e. having a new baby in the middle of a plan year), they were entitled to visiting their employer’s office and updating their plan by filling out a form. Risks associated with this older process included the “potential loss of documentation and therefore an inaccurate reading of an employee’s coverage needs”, said Jamie. The online method saves time, stress and paper.
How Saxon Helps
At Saxon, we want to invest in you. We begin by engaging experts that truly listen, building successful strategies that stay focused on your vision and goals. We strive to not be a name you turn to for assistance but a knowledgeable face always at your service. Saxon exists to care, cultivate and empower through relationships, expertise and exceptional standards of service. From finding a doctor, solving a complicated claim or partnering with an insurance agency to help protect your company’s sensitive medical data to ensure you are HIPAA compliant – with us; it’s personal.
To begin the conversation with Jamie on how to better communicate with your employees, contact him at (513) 573-0129.
Civic time off: The benefit getting employees to the polls
Does your organization offer civic time off as an employee benefit? Some companies are looking to change low voter engagement by offering new benefits to employees who vote. Read on to learn more.
Voter engagement for midterm engagement historically has been poor. Some companies are offering new benefits to change that — even offering the day off to encourage employees to vote.
American employers that provide paid time off stands at about 44%, a record high, according to the latest research from the Society for Human Resource Management survey. The human resource organization estimates 29% of these companies offer employers more than an hour or two of voting time.
Despite such accommodations, about 60% of Americans didn’t vote in the last midterm election, according to research by Vote.org, a voters’ advocacy organization. The biggest obstacle to voting was scheduling conflicts; 35% of people said they couldn’t vote because of work and school.
“There’s no federal protection for voting leave for employees, which means it’s up to the states to set their own policies. Policies are inconsistent, but some states have no laws at all,” says Colette Kessler, director of partnerships at Vote.org. “This puts employers in a powerful position to enable employees to get to vote.”
But as more Americans prepare to head to the polls for key elections in 46 states, employers including Patagonia, Zenefits and Honest Tea, are opting to give employees paid time off to make their voice heard.
Outdoor retailer Patagonia, for instance, is closing its stores as well as its headquarters and distribution and customer-service center to give employees paid time off to vote. “No American should have to choose between a paycheck and fulfilling his or her duty as a citizen,” Patagonia CEO Rose Marcario wrote in a company blog post.
Meanwhile, human resource software company Zenefits implemented a new program in which employees can take time off to vote the same way they would for a doctor’s appointment. Voting won’t cut into their sick days, vacation time or paid time off. Instead, voting gets its own designation — civic time off, or CTO. That free time can be used for voting, volunteering for a candidate, attending a school board meeting or canvassing.
“Civic time off is a new concept for the industry, and we’re excited to be among the first to offer such a benefit,” says Beth Steinberg, chief people officer at Zenefits, in a letter on the company blog. “At Zenefits, it’s been a priority to help build our team’s skill set not only as it pertains to professional career growth, but also to encourage their development outside of the workplace as engaged and empowered citizens.”
Vote.org consults with companies interested in implementing a CTO program. Based on individual business models and company culture, the organization will suggest either full days off, half days or flexible scheduling.
“One benefit we’re really excited about is offering employees a half day. It gives employees the ability to get to their polling places and do their morning routine — like getting the kids to school and running errands,” Kessler says. “And later they can convene with colleagues and celebrate Election Day. We’re seeing HR teams create afternoon lunch parties to celebrate.”
Kessler says some companies are hesitant to provide time off for voting because they’re worried about losing productivity. However, most of the companies she’s worked with have been enthusiastic about providing their workforce with time off to vote.
“We don’t see any drawbacks to offering our employees flexibility on Election Day,” says Seth Goldman, co-founder and CEO emeritus of beverage company Honest Tea, which allows its 50 employees to take a few hours of paid time off go to the polls on Election Day, at their convenience. “It’s a right we all should be proud to recognize and support however we can.”
SOURCE: Webster, K. (5 November 2018) "Civic time off: The benefit getting employees to the polls" (Web Blog Post). Retrieved from: https://www.employeebenefitadviser.com/news/civic-time-off-the-benefit-getting-employees-to-the-polls?feed=00000152-a2fb-d118-ab57-b3ff6e310000
The big difference between long-term care and long-term disability insurance
Do you know the difference between long-term care and long-term disability insurance? These two types of insurance may have similar names, but they are very different. Continue reading to learn more.
The longer people live, the more likely they are to face illnesses that necessitate custodial care either at home, in an assisted-living facility, or in a nursing home. So it stands to reason that there’s a resurgence of interest in long-term care and long-term disability insurance.
While the two types of coverage have similar names, they’re very different. As an employer, it’s important to understand the difference and educate employees on why they’d need each type of coverage. Here is a rundown.
Long-term care insurance
Long-term care insurance covers the cost of custodial care if a person is no longer able to perform at least two activities of daily living. These activities include eating, bathing, dressing, moving from a bed to a chair (called transferring), using a toilet or caring for incontinence.
Most people think LTC insurance is for older people who need to turn to a nursing home for care near the end of their lives — which is also part of the reason more employees are asking for LTC insurance. But LTC insurance can cover anyone who requires extended care.
LTC goes beyond medical care to include living assistance for a severe illness or disability for an extended period of time. Although older people use the most LTC services, a millennial or middle-aged employee who has been in an accident or suffered a debilitating illness might also need long-term care. In fact, 40% of people receiving long-term care services are 18-64 years old, according to America’s Health Insurance Plans. Actor Christopher Reeve was 42 when he was thrown from his horse and was paralyzed. He received long-term care services for nine years before his death.
Most people believe something like that will never happen to them, but it’s important to plan for the possibility. While Reeve had financial resources to cover his healthcare, that’s not typically the case for the average person. LTC can be very expensive, depending on the level of services needed and the length of time the individual needs it. One year in a nursing home can average more than $50,000. In some regions, it can cost twice that amount.
When offering LTC insurance, employees choose the amount of the benefit — typically an amount granted each month — and the length of time the benefit covers — such as two years, three years or 10 years. Obviously, as the benefit amount or length of time increases, so does the premium.
LTC insurance premiums are based on a person’s age, which means the earlier employees buy, the lower the premiums. If a person first buys the insurance at age 32, they lock in a better rate than if they purchase the insurance at age 54. Rates may increase only by a class action that is approved by state insurance regulators. Finally, LTC insurance is portable, which means employees take the policy with them if they move onto another job, or retire.
Long-term disability insurance
Long-term disability insurance may sound somewhat similar to LTC insurance, but the two are very different and important in their own right. Most workers don’t believe they’ll ever become disabled and need LTD insurance. Unfortunately, more than one in four 20-year-olds will become disabled before they reach retirement, according to the Social Security Administration.
LTD insurance is an income-replacement benefit that kicks in when the employee loses income for an extended period of time due to a disability. LTD insurance can be used for living expenses, not just covering care.
LTD insurance starts after short-term disability ends, typically after three to six months. In most cases, it pays 50-60% of an employee’s salary until they can return to work or, in some cases, until they retire. The more working years an employee has in front of them, the more they need LTD. Unlike long-term care insurance, LTD is typically not portable unless the policy contains conversion privileges. It ends when the employee changes employers.
If you offer both types of insurance, make sure your employees understand the difference. These types of insurance will help them in different ways — both important and more beneficial to have at a young age, but for varying reasons.
As an employer, you’re likely employing multiple generations of workers right now. Offering a range of benefits, including long-term disability and long-term care insurance, can help employees prepare for the unexpected now and in the future.
SOURCE: Granfors-Hunt, L (24 August 2018) "The big difference between long-term care and long-term disability insurance" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/how-long-term-care-long-term-disability-insurance-differ?brief=00000152-14a5-d1cc-a5fa-7cff48fe0001