Weighing a Rollout of Benefits for Employees? 4 Tips for Startups to Consider

Originally posted by Jennifer Fitzgerald on http://www.entrepreneur.com

Should a startup company offer employees benefits? That question cuts to the core of any entrepreneur's most significant challenges: cash burn, talent recruitment and company values.

But founders of startups might find it wise to consider offering employees certain benefits to help build the company’s culture. Here’s why:

Benefits are more valuable to employees than you think. MetLife’s annual study of employee benefits trends found that benefits can be even more important than advancement opportunities and company culture in fostering employee loyalty. That’s important for founders of startups to know, considering the fact that recruiting takes a massive investment of time.

And benefits may not be as expensive as you think. Okay, free Friday massages might be. But health insurance is certainly more affordable for small businesses now than it’s been in recent years, due to new offerings under the Affordable Care Act.

And by offering benefits, you company can stand out from the pack. Only 28 percent of businesses with fewer than 10 employees offer health insurance. If you can afford it, then your company will have a recruiting edge.

If you’re convinced that you should provide your employees benefits, here’s what you should do:

1. Start with the basics. You want a healthy team that won’t get financially rocked by a trip to the emergency room. That means you should provide health insurance and disability insurance.

Retirement contributions, gym memberships, catered lunches and the like should all wait until your business becomes financially stable. Also, they don’t deliver as much bang (in terms of employee satisfaction) for the employer's buck as good health-care coverage.

Arrange for a solid but not extravagant group health-insurance plan to keep costs in check. Many employess at startups are relatively young and healthy. For them, a bronze- or silver-level plan is appropriate. (Usually, premiums will run $200 to $300 per employee per month). Find a plan that makes people stick to a network (an HMO or EPO), which will keep your costs down.

Disability insurance is also an important but often overlooked offering. This type of coverage pays a cash benefit if an employee is unable to work as a result of  injury or illness. If you can afford to pay 0.5 percent to 1 percent in compensation per employee, then you can offer short-term and long-term disability insurance.

2. Manage expectations. Consider what you can afford to spend on benefits for each new hire. Build it into your baseline hiring costs and don’t change this figure unless you’re improving it.

Avoid a reduction in benefits. Nothing will have your employees grumbling faster than that. (This is because of a human behavioral quirk called the endowment effect.) It’s better to start out conservatively with your benefits offerings and improve them over time as your budget can absorb them.

For reference, small companies that provide health insurance to employees contribute on average per employee $857 per year for individual coverage and $3,346 per year for family coverage. Contribute only what you can afford. And remember that only 28 percent of small companies offer health insurance at all. Contributing even a small amount for employee health insurance places you well ahead of the pack.

3. Take advantage of health-insurance subsidies. The Affordable Care Act offers subsidies (as much as 50 percent of the cost) to small businesses that provide health insurance to employees. To qualify, the business must have fewer than 25 full-time employees, pay on average annual wages below $50,000 and contribute 50 percent or more toward premiums.

For startups not eligible for the subsidy, taking advantage of individual health insurance is also an option. Individual health insurance costs about the same per person as small-group health insurance. So, a startup could have employees buy their own individual health-insurance plan on the relevant state marketplace and reimburse them for premiums.

4. Get a broker. Founders don’t have time to deal with the complex world of insurance benefits. Let a broker handle it for you. Best of all, there’s no extra cost. Brokers are compensated by insurance companies through commissions, which have already been built into insurance prices. They’ll run quotes, give you guidance and manage the paperwork for you.

Business owners can figure out what they want and what they're comfortable spending and let a broker manage the rest.

 


Survey finds majority of employees want customizable benefits

Original article: http://ebn.benefitnews.com

By Tristan Lejeune

As employers increasingly cost-shift benefits, an inevitable consequence is employees wanting a larger say in how their benefit dollars are spent - making tailored and personalized benefit packages another step in the evolution of the consumer-driven paradigm.

"Once you get into the situation where employees now are all of a sudden consumers and [they]'re bearing a fair amount of the cost, with that comes a desire to be able to make a decision," says Mike Fish, vice president of voluntary benefits with The Hartford.

In a December 2012 survey of nearly 1,500 U.S. workers by TNS Omnibus, 86% say it is important to be able to customize all of their benefits to fit their individual lifestyle. Seventy-six percent of those surveyed by TNS Omnibus say it's important for them to design their own disability insurance instead of one-size-fits-all coverage chosen by an employer, and 82% would likely sign up for a disability plan that allows them the chance to choose the size of their payments.

Women and younger workers were particularly likely to favor customizable benefits. Only half of men, but 56% of women, agree that it is extremely or very important to be able to customize benefit choices to fit their lifestyle. Americans in their 40s are more likely to value the option than older workers, and millenials are more likely than any older group to say personalization is important.

"Consumers today can customize everything - from music and TV to clothing and cars, and our recent survey shows they want to customize their benefits, too," Fish says.

 

 


Failing to See

By Marli D. Riggs
Source: eba.benefitnews.com

Baby boomers are not taking advantage of available eye care benefits, leading to lost productivity

Despite employees reporting a strong interest in their company vision program, today's workforce isn't taking full advantage of the coverage — especially baby boomers.

Baby boomers (age 45-64) are only slightly more likely than younger employees to enroll in their vision benefit (79% vs. 75%), according to Transitions Optical's Employee Perceptions of Vision Benefits survey.

"1-out-of-4 employees that have an opportunity to enroll in the program do not," says Pat Huot, director of managed vision care and online retail for Transitions Optical.

"Of those that do enroll, 1-out-of-3 employees in the baby-boomer age range and 1-out-of-4 in the 65-plus range have not used their vision plan at all in the last year."

Huot believes the industry is trying to make it easier for employers to help employees become connected with the importance of the annual exam and all of the other touch points associated with it, "but if employees don't use the benefit, there's no opportunity there for them to realize that benefit."

 

The consequences

Studies by The Vision Council, an Alexandria, Va.-based nonprofit optical trade group, show about $8 billion is lost by employers every year due to lost productivity that stems from employee vision issues.

"This is mainly because employees' eyes are either not in focus or they have debilitating eye conditions that aren't managed well, so they just aren't as productive as they could be," says Dr. John Lahr, the medical director at Cincinnati-based EyeMed Vision Care.

Dr. Lahr, who has been in the field for nearly four decades, talks about the need for correction, which becomes more prevalent as employees age. The crystal lens of the eye where cataracts form, he says, is very elastic and loses that elasticity as people age.

"Usually, those between 40 and 45 cannot focus optimally for close vision and require reading glasses, or if they already have glasses they might need a multi-focal application to be able to read," he says.

"This factor really hits the worker that's in their 40's, 50's and 60's and is looking at a computer screen daily," adds Dr. Lahr. "If you measure that distance in which they are viewing it's usually 22 to 24 inches, where the normal reading distance is 16 to 18 inches."

He adds that the focus of glasses or contacts for everyday use is not optimal for the computer screen.

"In turn, employees lose a lot of productivity because they get eye strain, headaches, and they're also leaning forward in unnatural positions."

"In 2006, the very first baby boomer turned 60," says Transitions Optical's Huot. "As a snapshot of where we are as a country in terms of an aging workforce, it amazes me that every 10 seconds from that point in 2006 until 2023 someone in the U.S. will turn 60."

At age 40 employees should start protecting their eyes against serious diseases such as cataracts and macular degeneration - neither of which has symptoms in the early stages, says Dr. Lahr.

He adds that these diseases are much more prevalent in blacks and Hispanics.

"We find there are profiles where we can draw to try to assess risks and try to be more cautious with those individuals."

 

The obstacles

According to the Employee Perceptions of Vision Benefits survey, not having vision or eye health problems is the most commonly cited reason for not enrolling in a vision plan. This shows a lack of understanding of the importance of preventative eye care, says Transitions Optical's Huot.

He and his team encourage brokers to motivate their clients by giving them an interactive set of tools.

For example, his company's Healthy Sight Calculator helps clients educate their employees, calculate costs and learn about potential ROI with their vision plan.

"High profile tools, such as an online calculator, are designed to help the employees become more engaged around how a vision benefit connects to total health care versus" mentioning it as an afterthought in a larger presentation about health benefits, he says.

"We have yet to meet that broker that says, 'My clients can't wait to talk about vision!,'" adds Huot with a laugh.

EyeMed Vision Care tries to create an awareness of routine eye care and the associated benefits by providing an identification card that plan participants can put in their wallet to serve as a reminder during the year, says Dr. Lahr.

 

A personal experience

A decade ago Patrick Tibbs of Everence Financial Advisors in Indiana began to experience pressure in his eyes. He went in for a routine eye exam where the ophthalmologist determined his symptoms could be a cause of glaucoma.

Tibbs now goes once a year to have his eyes checked and glasses dispensed. He says by taking preventative steps for his own vision he feels a personal satisfaction knowing that employees are doing the same.

Vision care benefits are "near and dear to my heart," he says.

Vision benefits play a key part in motivating employees to see an eye doctor for a comprehensive exam.

EyeMed Vision Care's Dr. Lahr has seen in studies that those who have vision care coverage are more likely to get preventive eye exams even if they don't have symptoms.

"Our average utilization of a voluntary benefit where an employee defers money out of their paycheck we see about 35%," he says.

One factor keeping that utilization rate from rising is a misguided assumption that "if I see well [then] there's nothing wrong with my eyes."

Tibbs says baby boomers who are paying higher premiums for health insurance at the same time they're seeing their 401(k) values drop, yet still having to cover dependents with out-of-pocket costs, could be avoiding routine eye care "because they can't afford to pay $75 to $100 for an eye exam, then pay $300 for a pair of glasses."


Vision care is the summer

In the summer months employees' calendars are filled with vacations, parties and other outdoor festivities. Protecting eyes from ultraviolet rays is a must - but that is not the only one to be careful of, says Dr. John Lahr, medical director at Cincinnati-based EyeMed Vision Care.

In ophthalmology there is a new acronym to account for as a contributor to the development of cataracts and macular degeneration: high-energy visible light.

"This is the blue spectrum which we would see longer wavelength that is closer to the UV spectrum," says Dr. Lahr. "It has been studied through longitudinal studies which measured people's development of the two key eye diseases," cataracts and macular degeneration. "Since both of these eye diseases are much more prevalent in individuals that have high exposures to UV light, now they're starting to break down where they are when they're exposed," he adds.

As employees age, they have a heightened risk for cataracts that can impair performance at work," says Indiana broker Patrick Tibbs. "Out of 20 million people with cataracts it's estimated that 20% of those are caused by ultraviolet rays. Having proper eye wear is important and it will help with productivity." -Marli D. Riggs