more than just medical voluntary benefit programs · 2. delivers an educational enrollment...
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More than Just Medical – Voluntary
Benefit Programs
Jason EdwardsManager, Voluntary Benefits
March 13, 2018
3
AGENDA
• Why are voluntary benefits important?
• What are voluntary benefits?
• How do I implement an effective voluntary benefits program?
4
DEFINE: EFFECTIVE VOLUNTARY BENEFIT PROGRAM
An effective voluntary benefit program:
1. Provides employees with valuable benefits at competitive rates.
2. Delivers an educational enrollment experience that ensures employees are making informed decisions.
3. Drives efficiency into the administration of all of your benefits.
5
KEY COMPONENTS TO CONSIDER
Benefit Program Components:
1. Benefits
2. Carrier
3. Enrollment Strategy
4. Communications Strategy
5. Technology
Client Components:
1. Group Size
2. Turnover
3. Gender mix
4. Income
5. Employee type
6. Location of employees
7. Current benefits package
8. Current payroll
9. Current benefit administration system
10. What is happening to employees?
11. Company Initiatives
12. Industry
Why are voluntary benefits important?
7
WHY ARE VOLUNTARY BENEFITS IMPORTANT TO EMPLOYEES?
1. No savings
• Seventy-eight percent of full-time workers said they live paycheck to paycheck
- Cancer CareerBuilder.com
2. At risk of major health issues
• 1 out of 3 women and 1 in 2 men have a lifetime risk of developing
• or dying from cancer- Cancer Facts & Figures 2012, American Cancer Society.
• 1 out of 6 deaths are caused by coronary heart disease- Heart Disease and Stroke Statistics—2012, American Heart Association.
3. Rising out of pocket responsibility is leveraging against them
8
WHY ARE VOLUNTARY BENEFITS IMPORTANT TO EMPLOYERS?
• Increasing medical costs is squeezing budgets for employer paid benefits
• Voluntary = 100% EE Paid
• Offers wide range of benefits to attract and retain employees
• Helps employees build financial safety health so they can focus on their job.
63%
54%56%
63%
37%33%
3%
9%
60%
49%
42%44%
22%
27%
21%
34%
0%
10%
20%
30%
40%
50%
60%
70%
The Rise of Voluntary Benefits
Small Employers Large Employers
What are voluntary benefits?
10
WHAT ARE VOLUNTARY BENEFITS?
100% Employee Paid Benefits, including:
• Life
• Short Term and Long Term Disability
• Accident
• Critical Illness
• Cancer
• Hospital Indemnity
• Legal
• ID Theft
• Pet
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LIFE
Voluntary Term Life – allows employees to purchase more term life coverage to meet their specific needs.
Considerations:
1. What is the Guaranteed Issue – dependent on group size – typically see $150,000 - $200,000.
2. Does it include AD&D Coverage?
3. What is the max?
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SHORT TERM DISABILITY PLANS
Considerations:
1. What is the PTO Policy? Any Salary Continuation?
2. What is the maximum?
3. 60% Percent vs. Incremental Plans
4. Auto Enrollment to lower cost
5. Duration
Policy Detail Carrier A Carrier B Carrier B Carrier B Carrier B
Maximum Weekly
Benefit60% to $1,500 60% to $1,000 60% to $1,000 60% to $1,000 60% to $1,000
Elimination Period7 Days Sickness
0 Days Injury
7 Days Sickness
7 Days Injury
7 Days Sickness
7 Days Injury
14 Days
Sickness
14 Days Injury
14 Days
Sickness
14 Days Injury
Benefit Duration 13 Weeks 12 Weeks 12 Weeks 11 Weeks 11 Weeks
Residual Disability Yes Yes Yes Yes Yes
Partial Disability Yes Yes Yes Yes Yes
Return to Work Benefit Yes Yes Yes Yes Yes
Pre-Ex Limitation none none none none none
Required Participation 70% 61%75% (auto
enroll)61%
75% (auto
enroll)
Current Participation 61% 61% 61% 61% 61%
Rate Guarantee 01/01/2019 2 Years 2 Years 2 Years 2 Years
Weekly Cost for
Average Employee$7.94 $4.42 $3.60 $3.40 $2.88
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LONG TERM DISABILITY
Policy Detail Carrier A Carrier B Carrier B
Maximum Monthly
Benefit60% to $10,000 60% to $10,000 60% to $10,000
Covered Income Base Pay Base Pay Base Pay
Elimination Period 90 Days 90 Days 90 Days
Benefit Duration SSNRA 2 Years 2 Years
Own Occupation 36 Mo. 24 Mo. 24 Mo.
Gainful Income 80 / 60 80 / 60 80 / 60
Residual Disability Yes Yes Yes
Partial Disability
(w/RTW?)Yes Yes, 12 Mo. RTW Yes, 12 Mo. RTW
Social Security Offset Family Family Family
Pre-Ex Limitation 3/12 3/12 3/12
Other Limitations
24 months mental illness
and self-reported
symptoms
24 months mental illness
and self-reported
symptoms
24 months mental illness
and self-reported
symptoms
Other BenefitsSurvivor, Moving Expenses,
Education, Modification
EAP, Day Care, Survivor,
Worksite Modification,
Rehabilitation
EAP, Day Care, Survivor,
Worksite Modification,
Rehabilitation
Required Participation 25% 50% 75% (auto enroll)
Current Participation 50% 50% 50%
Rate Guarantee 01/01/2019 2 Years 2 Years
Weekly Cost for Average
Employee$14.79 $8.10 $3.86
Considerations:
1. What is the maximum?
2. 60% Percent vs. Incremental Plans
3. Auto Enrollment to lower cost
4. Benefit Duration –Class out Blue Collar
5. Definition of Earnings – W2, Bonuses, K1
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ACCIDENT
Considerations:
1. Off Job Only – removes incentives to get hurt on the job/lowers the cost.
2. $50 Wellness Benefits per covered individual to tie in with wellness initiatives
3. Affordable Middle Plan
15
CRITICAL ILLNESS
Considerations:
1. Always include Cancer coverage to combine 2 policies into one.
2. Pre-Existing Condition Limitations and 30 day Benefit Waiting period may cause claim issues.
3. Typically get a $20,000 GI offering
4. $50 Wellness Benefit
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THE CASE FOR AUTO ENROLL
Why?
1. Employees are living paycheck to paycheck.
2. All employees pay less for coverage. Higher participation spreads the risk out over more employees, which allows Underwriters give lower rates.
3. Tie to Work Comp – if employees have the coverage, they will use it over filing a false work comp claim.
How?
1. Communicate to all employees that they will be auto enrolled in STD.
2. Provide highlight sheets in guides or personalized forms to employees. This will show key disclaimers like Pre-existing limitations and delayed effective dates.
3. Instruct employees to see HR to complete an Opt Out – HR is the only person who can take employees off the plan.
How to implement an effective
voluntary benefits program
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KEY COMPONENTS OF A VOLUNTARY BENEFIT PROGRAM
Benefit Program Components:
1. Benefits
2. Carriers
3. Enrollment Strategy
4. Communications Strategy
5. Technology
Client Components:
1. Group Size
2. Turnover
3. Gender mix
4. Income
5. Employee type
6. Location of employees
7. Current benefits package
8. Current payroll
9. Current benefit administration system
10. What is happening to employees?
11. Company Initiatives
12. Industry
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CARRIERS – NOT ALL CREATED EQUAL
Not every carrier is created equal, they specialize in different spaces and capabilities / offerings.
Aflac
Colonial
Allstate
Unum
Voyra
MetLife
Cigna
Carrier Core Offering Distribution Fun Fact Age
Aflac Worksite DirectEntering group life and disability
Established
UnumLife, Disability, worksite
BrokerAlso offers IDI and FMLA solutions
Established
Colonial Worksite Direct Owned by Unum Established
Allstate Worksite DirectDoes not offer group life and disability plans
Established
VoyaStop loss, Life, DI, Worksite
BrokerLarger case solution, offer true group worksite benefits, and FMLA
New to VB/worksite
MetLifeEverything but medcial
Broker
Strong Dental and Visionoffering, true group worksite benefits, IDI and FMLA
New to VB/worksite
Cigna Medical, Life, DI BrokerCan integrate with medical claims, true group worksite benefits and FMLA
New to VB/worksite
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ENROLLMENT STRATEGIES
• Paper
• Online Self Service
• Onsite 1 on 1 with a Benefit Counselor
• Call-Center
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COMMUNICATION STRATEGY
• An employee’s perceived value of their benefits plan can either be enhanced or diminished by the communication strategy
• Communicate early, often, and in a variety of ways. Use written, visual, in-person, and electronic varieties – enrollment guides, educational videos, postcards, flyers, texts, email, meetings
• Make communication easy to understand and fun – web portals, animated videos, decision support tools
Above Average Benefits Plan
Below Average Benefits Plan
Effective Communication Strategy
84% of employees respond favorably
regarding their benefits
76% of employees respond favorably
regarding their benefits
IneffectiveCommunication Strategy
26% of employees respond favorably
regarding their benefits
22% of employees respond favorably
regarding their benefits
Source: MetLife 2013 Annual Survey
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BENEFIT ADMINISTRATION TECHNOLOGY
1. None – Rely on paper and carrier systems.
2. Standalone – Bswift, Plansource, Employee Navigator, etc.
3. Integrated with Payroll or HCM Solution – ADP, Ultimate, Workday, etc.
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FIND A SUSTAINABLE/AFFORDABLE TECHNOLOGY SOLUTIONS
The experience is strongly driven by the technician servicing the system, NOT the technology itself.
There is always a cost, that said, we can get creative on how we cover it.
1. Carrier Subsidies – 1 time credits, ongoing credits – Typically only offered in competitive situations.
2. Life and Disability Marketing – can find savings on ER paid lines and repurpose money for systems or perpetual enrollments.
3. ACA Reporting Filing– Often can find savings with integrated ACA solution vs. standalone / payroll solutions.
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CASE STUDY: MARKETING / CREDITS / COMMISSION OFFSETSCurrent/Renewal Proposed Changes
Employer Paid Carrier A Carrier B
Base Life $14,297 $11,592
Long Term Disability $30,593 $28,903
Total $44,890 $40,496
Increase / (Savings) - -$6,395
Employee Paid Weekly Cost for Average EmployeeVoluntary Life $8.77 $8.77
Voluntary STD $7.94 $2.88
Voluntary LTD $5.88 $3.86
Total $22.59 $15.51
NEW Accident - $3.18
NEW Critical Illness - $3.48
Total $22.59 $22.18
Systembswift Employee Navigator
System Setup Cost
Provided by broker at no cost
$3,750
System Maintenance Cost $10,527
Total $14,277
Technology / System Credit -$5,000
Net System Cost $7,277
Call-Center
Open Enrollment (offset by commission) - $27,600
Total Value $44,890 $82,373
Total Cost $44,890 $47,773
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THE VB “MINE FIELD”
Benefit Program ComponentsBenefits Carriers Communications Enrollment Strategy Benefit Admin Technology
Key Client Components Life STD LTD Acc CI IDI
Traditional (Aflac, Unum,
Colonial, Allstate)
True Group (Voya, Met,
Cigna)Memo
Post Card
Guide Video Email PaperOnline
Self Service
Call-Center
Onsite 1 on 1's
None StandaloneIntegrated
with Payroll
Group Size <100
100-999
1000+
Turnover Low
High
Gender Mix Male
Female
Income Below Average
Average
Above Average
Employee Type Blue Collar
White Collar
Employee Spread All in one locations
A few
A lot
Current Benefits Medical - "LDHP" <1000
Medical - HDHP
Dental/Vision
Life / Disability
PTO / Salary Continuation
Worksite
Current Payroll In house
Standalone
Full HCM
Current Benefit Admin System None
Standalone
Integrated with Payroll
What is happening with Whole Package No Changes
New Benefits Only
Everything is Changing
Company Initiatives Wellness
Safety
Industry Manufacturing
Cities and Counties
Hospitals
Transportation
Professional Services
Technology
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BEST PRACTICES FOR IMPLEMENTATION AND ENROLLMENT
Allow 8-12 weeks to execute paperwork, design communications and build any necessary technology
Hold weekly calls to keep everything
moving.
Start communications
2-3 weeks prior to Open Enrollment and 1-2 weeks for Open Enrollment.
OE Begins -Send out regular
reminders to
incomplete employees.
Build in a straggler period.
Allow 2-4 weeks
between OE and
Effective date to get
files to carriers and
payroll.
After effective
date audit files and
review any new billing processes.
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REMEMBER THE GOALS OF A WELL DESIGNED PROGRAM
1. Provides employees with valuable benefits at competitive rates.
2. Delivers an educational enrollment experience that ensures employees are making informed decisions.
3. Drives efficiency into the administration of all of your benefits.
BOTTOM LINE: There are a many different ways to design and implement an effective voluntary benefit program, however, not all strategies are the right fit.
Call us and we will help you navigate the VB mine field to ensure you offer a quality program that educates employees and doesn’t break the
bank or your administrative staff.
QUESTIONS?