More mid-market employers eligible for group voluntary benefits plans
Originally posted November 03, 2013 by Joanne Wojcik on www.businessinsurance.com
Many mid-market employers that previously could offer voluntary products to employees only on an individual or multi-life basis may now be eligible for group plans.
Perhaps the only exception is long-term care insurance, which is available primarily on an individual basis due to the recent spate of insurer withdrawals from the group LTC market.
“Now many insurers are offering voluntary benefit products on a group basis to make it possible to enroll on self-serve platforms,” said Bruce Sletton, senior vice president and national elective benefits practice leader at Aon Hewitt in Dallas.
“The trend has been toward group insurance products in the voluntary space,” said Beth Grellner, St. Louis-based co-chair of Towers Watson & Co.'s national voluntary benefits and services group. “For the third year in a row, we've seen group insurance (voluntary benefits) grow at a faster rate than voluntary products offered on an individual basis.”
Group voluntary benefits provide guaranteed issue, regardless of employees' health status or age, and often come at a lower price than if the benefits been underwritten on an individual basis.
The downside, however, is that group products are guaranteed to be renewable only on a one-, two- or three-year basis, Mr. Sletton said. “The insurer has the right to review the products and then make price adjustments,” or drop the group altogether, he said.
Flex your benefits
Originally posted October 16, 2013 by Kathryn Layer on benefitspro.com
In case you missed it, this week marked an interesting — and totally great — holiday called National Flex Day.
Haven’t heard of it? Well, it’s new. Yesterday marked the first official National Flex Day ever, as the brainchild of Working Mother Media.
The premise? To help promote the power of flexible work arrangements.
“Flexible work is important to every single employee, whether to help them accommodate child care responsibilities, elder care needs or a marathon training schedule,” says Carol Evans, president of Working Mother Media. “It’s time for people and companies to step out from the shadows and embrace workplace flexibility as a core business strategy that will enable employees and employers to compete and succeed in an increasingly competitive global economy — while also ensuring a healthy, productive and profitable workforce in the long run.”
In a video, Evans calls the benefit a “lifesaver,” and says that publicizing — and promoting — flexible work arrangements this year is especially important because the benefit has been “under attack.”
That’s in part thanks to people like Yahoo! CEO Marissa Mayer, who earlier this year took back employees’ work-from-home benefits, and Hewlett-Packard’s Meg Whitman who just followed suit.
Groups like Working Mother Media will tell you the problem with these examples is they’re setting a poor example for other employers — when powerhouse companies do it, won’t others follow? And these decisions reflect poorly on the executives, as well — are they really that untrusting of the people they work with? Do they not value their employees’ home lives?
Don’t get me wrong: Individual employers have to make the right decision for their company. They don’t have to allow everyone to hang out at home in their pajamas day after day, but being flexible about work schedules and understanding the ever-important work-life balance is another matter.
With benefits apparently not as important as they once were, and with many companies dropping employer-sponsored coverage, asking employees to pay a higher share of the cost, or cutting sick or vacation days — flex time is an easy, cheap and productive benefit for employers to implement.
It’s amazing people still don’t get it: When employees feel valued, appreciated and trusted, their work ethic improves, their happiness improves, they stay healthier and they’re much more likely to stick with the company. Wins all around!
According to research by Working Mother Media, a typical business saves half a million dollars in facilities costs for every 100 employees who telecommute full-time. By contrast, they spend 50 percent more in health care costs on stressed-out workers. (And flexible work lowers employee stress by 30 percent.)
Appropriately enough today is also Boss’s Day. Perhaps it’s a good time to tell your supervisor you’ll only wish him a happy Boss’s Day if he wishes you a happy Flex Day — and means it.
HR align benefits with business objectives
Originally posted September 24, 2013 by Jennifer Paterson on https://www.employeebenefits.co.uk
Reward and HR professionals are taking steps to ensure that the benefits they offer support the objectives of their organisation, according to research by the Chartered Institute of Personnel and Development (CIPD).
Its Aligning strategy and benefits survey, which is based on responses from 444 organisations, found there is also a strong correlation between workplace outcomes and transparency in employee benefits.
Organizations that prefer to be more transparent about their benefits schemes are more likely to have good employee relations, increased productivity rates, lower absenteeism, good employee retention and low pay discontent.
The research also found that, where respondents’ workforce comprised mostly graduates, there is a higher level of membership in defined contribution pension plans.
Charles Cotton (pictured), reward adviser at the CIPD, said: “HR professionals continually have to ensure that the reward provisions they offer in the workplace are in keeping with the shifting nature of work, and are aligned to both the needs of business and employees and integrated with other aspects of people management strategy.
“Failure to do so will result in inappropriate achievements, skills and behaviours being rewarded and recognised.
“What our research helps to illustrate is that HR [professionals] are not adopting benefits for the sake of it, but are choosing those that match what the firm is trying to achieve. It also shows the impact that employee benefits can have in the workplace in terms of employee retention, absence, productivity and relations.”
5 most popular voluntary benefits
Originally posted by Kathryn Mayer on https://www.benefitspro.com
As employers consider their health care and total rewards strategies with the context of the Patient Protection and Affordable Care Act, nearly half expect voluntary benefits and services to become more important than ever over the next five years, according to the Towers Watson 2013 Voluntary Benefits and Services Survey.
The survey also found that the importance of voluntary in companies’ total rewards strategy will grow 27 percent in the next half-decade.
For now, these five voluntary benefits are the most commonly offered by employers.
5. Accident insurance
Accident insurance is among the most prevalent voluntary benefit offerings provided by employers: 68 percent offer the protection to their employees.
Other voluntary products that might be making the list in the next couple years? Towers Watson reports critical illness, identity theft and financial counseling are the top voluntary benefits to watch in the coming years.
4. Dental
Dental insurance remains a popular voluntary benefit, with 80 percent of employers offering the benefit.
Diabetes, heart disease, blindness and pregnancy complications all can be affected by dental hygiene and inflate health costs overall.
3. Disability
Benefits experts have long argued disability insurance is just as important as life insurance. And employers seem to agree: Eighty percent of employers surveyed by Towers Watson offer it.
According to the Social Security Administration, a staggering 30 percent of people will encounter a disability of three months or longer at some point during their working years.
2. Vision
Employers also see big value in vision insurance: 84 percent offer it.
Voluntary vision coverage is typically a popular product.
“We use it as a recruiting tool,” Spencer Peery, business manager at Bailey Lauerman & Associates, an advertising agency in Lincoln and Omaha, Neb., told Benefits Selling in August.
“These benefits keep our employees healthier," he said. "They use dental and vision coverage almost as much as they use health insurance, for both prevention and general care.”
1. Life
The survey reports that life insurance is the most popular voluntary benefit: 94 percent of the 320 large employers surveyed offer it.
Individual life policies were some of the first voluntary products sold in the U.S. workplace. Today, 81 percent of individuals with life insurance have workplace coverage, while half of individuals look to their employer as the only source for coverage, according to a 2012 ING study.
But despite life insurance offerings at work, industry experts say most Americans are underinsured, if they're insured at all.
Pet insurance growing as an employee benefit option
Originally posted on https://www.stockhouse.com
An increasing number of companies in North America are offering pet insurance to employees in an effort to attract better hiring candidates, U.S. experts say.
According to Veterinary Pet Insurance president Scott Liles, around 3400 companies and associations offer the benefits as an employee enticement and retention tool.
Nevada's largest employer, MGM Resorts International (NYSE: MGM, Stock Forum), added pet insurance for employees in 2006 and Chipotle (NYSE: CMG, Stock Forum) has been offering the benefits since 2002.
Of the 165 million pets estimated to reside in the United States, only a small portion are covered by pet insurance, but as veterinary costs rise, an increasing number of employers are providing it as part of their benefits package, with Chipotle subsidizing $10 per month, per pet, for up to three per employee.
The organization says only around a hundred employees take them up on the offer, which covers the low end of pet insurance costs of anywhere up to $57 a month, according to a company official talking with UPI.
Pet retailer PetSmart (NYSE: PETM, Stock Forum) offers insurance for employee pets, offering comprehensive coverage for illness and accidents, coverage for tests, X-rays, medication, hospitalization and surgery, a 5 per cent group rate discount and enrolment fee waiving, and death benefits.
-Chris Parry, Stockhouse.com
Seven voluntary products to watch in 2013
Source: https://www.benefitspro.com
By Katie Kuehner-Hebert
More and more employers this year will begin offering voluntary employee benefits to their workers in preparation for the “real game changer” in 2014—the further implementation of the Patient Protection and Affordable Care Act.
A decade ago, voluntary products were offered mainly by larger employers as a way to increase engagement, but now organizations of all sizes are broadening their menu of voluntary benefits to offset coverage gaps, as employers further reduce their contributions to cut costs, according to MetLife’s latest annual employee benefits study, released in March.
Indeed, sales of voluntary benefits in 2011 rose 4.5 percent from a year earlier, to $5.478 billion, according to research from Eastbridge Consulting Group.
The trend will continue next year as more employers are mandated to provide health care plans for their workers under the PPACA. As a result, brokers and carriers alike expect further increases in employee deductibles and out-of-pocket responsibilities—spelling greater opportunity for the sale of voluntary products.
“You’re going to see a tremendous amount of movement next summer, as employers start preparing for 2014 when the exchanges will be launched,” says John Conkling, a vice president at Fringe Benefits Group Inc. in Austin, Texas. “We may see some shifts in the classification between full-time and part-time employees, which will create some new benefit opportunities. That has a lot of HR and benefits departments developing strategies right now, and it will only strengthen the voluntary benefits market.”
The new law’s medical loss ratio will also spur more brokers to push voluntary products, says Steve Hannah, regional vice president of group benefit services at Mutual of Omaha. Out of every premium dollar, $0.85 has to be used to pay claims, leaving $0.15 cents to pay for carrier expenses, including broker commissions.
“Brokers are now deciding whether to cut staff or services, or merge with other brokers,” Hannah says. “There’s also a mass influx of brokers, and some are now calling themselves ‘voluntary benefit experts.’”
Brokers also are capitalizing on the rising popularity of voluntary benefits among employees, he says. According to a Hartford study, employees who are offered voluntary benefits reported higher satisfaction with their benefits than did those who were not offered voluntary products (64 percent and 56 percent, respectively).
Here are seven voluntary products to watch.
1) Critical illness/cancer
Both cancer and critical illness product sales were up in 2011, according to Eastbridge. Cancer sales rose 2 percent from 2010, to $409 million, while critical illness sales jumped 20 percent, to $243 million.
“Critical illness/cancer policies are going to explode in 2013,” says Mathew Gahm, founder and managing director of M P Gahm & Associates Inc. in Colorado Springs. Colo.
“At least one in three adults will be diagnosed with a critical illness or cancer,” Gahm says. “The max out-of-pocket is between $5,000 to $10,000-plus in many health care policies, but very few people have that type of money to pay if something bad happens.”
Millennials are participating in critical illness at a slightly higher rate than boomers (27 percent to 14 percent respectively), according to the Hartford study.
Glenn Petersen, vice president, group voluntary and worksite benefits at MetLife in New York City, says Gen Yers might opt for these products because younger people tend to have a limited amount of savings to meet all the costs of a serious illness or accident. However, all age groups are likely to see a need for such polices, particularly if brokers and employers thoroughly explain their value and features, Petersen says.
“A Gen X member might need all the extra cash they have saved to meet children’s and household expenses,” he says. “Boomers might want a lump sum payment to take care of ancillary expenses and not have to tap retirement savings.”
2) Accident
Accident sales accounted for 13 percent of total voluntary sales in 2011, with a 14 percent increase over 2010 accident sales, to $738 million, according to Eastbridge.
Accident plans will become even more prevalent in 2014 as deductibles and out-of-pocket expenses are increased even further due to the implementation of health reform, Conkling says.
“People are going to realize that if they go to the emergency room, they are going to be responsible for the first $2,000, so a $5 a week accident policy can pay for that tremendous out-of-pocket expense,” he says. “Plus, they might have another $2,000 in hospital stay expenses as well.”
Moreover, brokers are going to increasingly sell these types of voluntary products to replace revenues, Conkling says. Depending on the structure of the benefit, some accident policies have hospital administration riders on them, while other carriers may sell separate hospital indemnity plans, he says. All of these benefits are being sold in conjunction with major medical plans as supplemental plans.
3) Hospital indemnity and other gap plans
Look for hospital indemnity/supplemental medical products to have great potential for sales upticks in the coming year.
“Medical bridge plans cover some but not all of the employees’ expenses incurred under a standard medical plan thus reducing employees out of pocket costs for high deductible plans,” says Tom Wagoner, president of Accelerated Benefits in Columbus, Ohio.
Traditional gap plans pay to fill a deductible and is integrated 100 percent with the employee’s medical plan, he says. In more recent years, medical bridge plans have replaced traditional gap plans and now contain specific schedules of benefits for a variety of medical services, such as hospital confinement, outpatient services, MRI and CT scans.
“But they don’t cover everything and there are a lot of holes in those plans,” Wagoner says. “A lot of people selling them are not disclosing those holes and that could be a problem. But they are going to be popular even with all the holes. We definitely think producers are going to be moving more toward integrated plans with the medical versus the life and disability traditional plans.”
4) Long-term health care insurance bundled with life policies
Dan Johnson, vice president of sales and marketing for voluntary benefits at Trustmark Insurance in Lake Forest, Ill., says that bundled life and long-term care products are gaining in popularity, as many carriers stopped offering stand-alone long-term health care insurance.
“Their hope was when they originally priced the products, groups that implemented the product would spread out participation among more age groups within the active employee population,” Johnson says. “This did not occur as often as they assumed and it affected their spread of risk, rates and profitability. The continued escalation of health care costs, along with long-term health care facility cost escalation made these products unprofitable.”
Conversely, the hybrid universal life contracts that have long-term care as an integrated benefit are becoming more popular and have changed with the needs of the customer and the market over the years, he says.
“The big question from brokers and employers who have been burned by this long-term care exit is, whether the products still being sold in the market are priced properly or will they be affected down the road with more exits to the market due to the products profitability,” Johnson says. “With our universal life with living benefits product, we’ve been able to spread the risk of across many insureds and age groups. We have 20-year-old employees buying this bundled product along with 65 year olds.”
Moreover, when using this hybrid product, the insured person can always get a death benefit if the benefit restoration rider is purchased, even if the insured also uses the long-term care benefit for long-term care, home health care, adult daycare and assisted-living care, he says.
5) Life and disability
Life insurance continues to be the top selling business line, according to Eastbridge. Total life sales in 2011 were $1.347 billion, up about 1.3 percent over 2010.
However, studies show that life insurance isn’t a mature market. According to the Life Insurance and Market Research Association, 56 percent of U.S. households didn’t have an individual policy as of 2010, and 30 percent lacked any coverage, not even through an employer’s group benefits plan.
This represents an opportunity for brokers to educate workers about the value of supplemental life and disability if their coverage is inadequate, Petersen says.
“As they make decisions, employees can benefit immensely if is it pointed out to them that their needs can change as life circumstances change—for example through the birth of children,” he says. “Purchase decisions are made on the basis of solving a real-life problem or exposure, where the employee can see the value of a certain benefit.”
6) Dental and vision
In the past, employers might have paid for dental and vision along with major medical plans, but as employers continue to struggle to manage their budget, particularly as medical costs increase, dental and vision are increasingly becoming voluntary benefits, Conkling says.
“These voluntary benefits are also becoming more important to employees, as their out-of-pocket costs continue to increase due to the increasing popularity of consumer-driven plans,” he says.
According to Eastbridge, dental sales increased 22 percent in 2011, to $610 million, while vision sales increased 8 percent, to $231 million.
7) Legal benefits
Donald Rowe, vice president of employee benefits worksite marketing at Legal Club of America, says that more employers are offering legal benefits because “most employees don’t leave their personal problems in the parking lot when they come into work.”
“These issues interfere with their productivity,” Rowe says. “Rather than pretending employees don’t have those issues, employers give them solutions.”
While family law issues such as adoption, divorce, wills and power of attorney continue to be the most popular reasons to utilize legal benefits, the recession has caused more people to use them for home foreclosures and bankruptcies, he says.
Dennis Healy, vice president of sales for ARAG Legal Solutions in Boston, predicts that in 2013, “true legal insurance” products will become more popular than discounted legal benefits or “do-it-yourself” online templates.
“Employers will want to retain their best employers by offering a menu of rich benefit offerings, particularly if they are having to lower their participation in health care plans,” Healy says.
Marcia Bowers, sales and marketing director at Hyatt Legal Plans, a Cleveland, Ohio unit of MetLife, agrees that true insurance products are on the upswing, including “mini-legal packages” that are tied to another benefit, such as life insurance and disability.
Happy Hour at Work?
June 4, 2012
By Denis Storey
Source: benefitspro.com
The headline that jumped off my iPad this morning was all I needed to see: “Is beer in the workplace an employee benefit?”
I jumped to my feet with my hands in the air like I was back in church.
Then I slumped back down. In this compliance-heavy era, where lawsuits are more common than doctors’ notes, how was this even possible?
But the blogger – Carol Harnett over at Human Resource Executive – went on to elaborate this stemmed from a panel discussion she’d hosted on wellness with Mark Torres, senior vice president of people and culture at The Rubicon Project. Shortly after joining the company, he polled his work force about their benefits, “which resulted in a strong staff request to retain the 24/7 beer refrigerator on the premises under the category of ‘the one thing we shouldn’t change.’”
Harnett touches on some other companies whose wellness programs venture into the progressive, to say the least.
(I’m kinda partial to Hulu’s, where their wellness plan amounts to an annual $700 check for each employee to spend any way they like to improve their own performance. But then I end up right back at the beer.)
My wife just got a new job. They apparently have these “Wellness Rooms,” where employees can go take a nap – presumably alone. Oh, and they have a “snow fairy,” an anonymous Samaritan who makes sure all the cars are cleared at the end of any our snowy Colorado workdays. And keep in mind: this isn’t some tech startup. She works for an 80-plus-year-old trade association.
My first thought – after asking about job openings – was how do you tell the difference between a perk and a benefit these days? Or is there one anymore? And where do wellness programs fit in to all of this?
Then it occurred to me we’re watching the slow, sometimes clumsy evolution of employee wellness. Many companies are getting it: that it goes far beyond gyms or smoking cessation programs. It’s about more than reducing claims or cutting costs. Simply put, it’s about getting (and keeping) happy, healthy employees. So how do you get there – booze, dark rooms or by just cutting a check?
And I think that the employers who take more of a holistic – if sometimes out-of-the-box – approach to wellness (and benefits in general) are the ones who are not only going to hang on to the best talent as we fight out way out of this economic malaise, but they’ll be far better positioned to attract the next generation of employees who live their entire lives out of the box.
Now if you’ll excuse me, I’m sleepy and I need a drink.
Confidence in Voluntary Benefits Rises
Profitability outlook increases over 2011 estimates
More brokers are confident about the voluntary employee benefits industry, a new survey shows. Results from Eastbridge Consulting Group’s Voluntary Industry Confidence Index finds confidence increased to 99.7 at year-end, up from 98.4 in a mid-year 2011 survey.
The index is calculated using three key expectation measures about the voluntary industry: sales growth, profitability of the industry, and employee enthusiasm about voluntary products.
“Feelings about the profitability of the industry rebounded the most,” says Gil Lowerre, president of Eastbridge. The percentage expecting lower profitability declined to just eight percent (down from 18 percent last time) and the percentage expecting increased profitability was up to 54 percent. “The percentage expecting sales growth for 2012 also improved nicely, with 95 percent expecting more sales,” Lowerre says.
The only measure that showed a decrease was employee enthusiasm about voluntary products. The mean was down from 3.82 to 3.80 primarily because more people said there would be “no change” in employee enthusiasm, explains Eastbridge vice president Bonnie Brazzell.
Eastbridge conducts the survey semi-annually and includes responses from individuals active in the market, among them carriers, brokers, vendors and employees. Like other confidence indices, the index is a single number that compares the current results to a baseline measure. The first Confidence Index survey was completed in December of 2005; the results from that survey serve as the “base” year (meaning the index was at 100 for that year).
By Kathryn Mayer
Employers Continue to Look for Savings
The recent trend of shifting more health care and benefit costs to employees is showing no signs of letting up, according to new industry research.
A survey displayed that 22 percent of employers had medical deductibles of at least $1,000 this year for in-network services for their most popular plans, according to a report in Business Insurance, compared with just 8 percent in 2008. Twice as many employers (44 percent) imposed that deductible level on out-of-network services this year, the survey found.
"The biggest change in the past two years has been the increase in cost sharing with employees," said Michael Thompson, a principal. "Employers have been careful not to shift premium costs to employees, but have decided that the better way to shift costs is to require those who use health care services to pay more."
A separate report by Milliman also points to an increase in cost sharing in PPO family plans. According to Healthcare Town Hall, a website sponsored by Milliman, the survey found that the average premium cost of those plans this year increased $1,319, or 7.3 percent. Of the total cost increase, employers paid $641, while workers picked up the rest, totaling an increase of $275 in additional cost sharing and an additional $403 in payroll contributions..
Many employers, however, are searching for solutions beyond deductible increases. More employers -- especially midsize companies -- are turning to voluntary benefits to reduce their burden while still offering valuable benefits to their employees, according to a new LIMRA study. While employers traditionally have used voluntary benefits as a morale booster, nearly 80 percent of polled employers said they are most interested in voluntary worksite benefits because they bring no direct costs to their business, an onlinePLANSPONSOR news report noted. Two-thirds said they offer such benefits because it boosts their overall benefits package and allows workers to receive services cheaper than if they tried to buy coverage in the marketplace.
Although the trend of cost sharing is growing, U.S. workers are starting to see improvements in their overall compensation, which is creeping back toward pre-recession levels, according to a recent survey published on the Society for Human Resource Management's website. Only 9 percent of polled employers still have a pay freeze in place - down from 48 percent in mid-2010. More companies also are restarting bonus programs in an effort to retain top talent, the survey said.
Voluntary benefits can help contain company costs
To recap a previous blog post before jumping straight in to the questions: Voluntary benefit plans help employers round out their employee benefit offerings amid cutbacks in company-paid core health care, allowing employers to provide employees with additional benefits without bearing the weight of increasing cost pressures. These optional benefits can serve as value-added tools to help attract and retain top talent. Employees often pay 100 percent of the premium on these voluntary benefits through payroll deduction. Many of these benefits can be offered to family and friends as well. It's up to the employee; it's their money, and it's not costing the employer anything.
How can companies determine if adding a voluntary benefit program is the right choice for them?
They have to look at the true cost of running a company. Adding a voluntary benefit program can help offset those costs for them. Many companies are looking to ways to cut costs in the health insurance arena. It is extremely costly to maintain these major benefits. Often, what these companies are doing, ultimately, is passing those costs on to their employees.
Most voluntary benefit programs will help reduce that cost to employees because of the unique system of these benefits. If employers decide to lower their cost of mandatory benefits by passing some of that cost on to their employees, the employees can then offset those costs by participating in, for example, auto and home insurance programs saving them money over the traditional coves they would shop on their own.
What should companies look for in a voluntary benefit program?
You want to choose a company that can provide access to a variety of types of voluntary coverage and choice for your employees in the plans available. The last thing you would want to do is to present a variety of new benefits to your employees, only to have them ultimately be confused about the different types of coverage, from different sources and the costs of each one. You will want to work with a company that can provide a powerful, effective and simple voluntary benefits package that will be communicated clearly to your employees to achieve the highest level of participation and acknowledgement of the added perks.
What is the benefit of having several policies within the same voluntary benefit package?
Simply put, the renewal process for any benefit plan can be extensive to research and implement at the term of each and every policy, not to mention having to do that multiple times across multiple carriers for multiple plans. That is a huge migraine in the making just thinking about it! By having your plan developed and presented in a unified way to your employees, you will not only save administrative costs communicating these benefits, but you will also save time and money when it comes time to renew.
If you have additional voluntary benefit questions, please do not hesitate to contact our office to learn more!