Columbus (2544)

Pillar Award Finalist

George Barrett

chairman and CEO

Cardinal Health

www.cardinalhealth.com | (614) 757-7481

As a Fortune 21 health care services company, Cardinal Health has a deep-seated commitment to community efforts. As engaged by all levels of employees and strongly supported by Chairman and CEO George Barrett and the company’s senior leaders, this level of leadership support is what helps set Cardinal Health apart from other organizations.

The company’s philanthropic investments, employee involvement, product donations and the work of its Cardinal Health Foundation are focused on health and wellness. Cardinal Health works in partnership with and supports organizations that make a significant impact in those areas.

In the area of health care, the company’s philanthropy has resulted in increased efficiency and effectiveness, reducing costs and improving patient outcomes. Over the past five years, the foundation has invested more than $14 million in this work providing grants to hospitals, professional associations and collaboratives.

In the area of prescription drug abuse, Cardinal Health is working with The Ohio State University College of Pharmacy to develop, pilot and spread an awareness campaign, GenerationRx. This initiative supports the effort to address prescription drug abuse and engages Cardinal employees and customers in volunteerism that reaches tens of thousands of individuals.

Cardinal Health employees are also engaged in a wide variety of activities supporting nonprofit organizations in their communities. Through the Cardinal Health Foundation, matching funds and team grants further their impact. When employees contribute $25 or more to any approved charitable organization, the foundation matches contributions up to $1,000 per employee, per campaign year.

In the past five years, more than $15 million has been contributed from employees and the Cardinal Health Foundation to support local organizations.

Thursday, 03 January 2013 10:14

How Atlas Butler makes community service a priority

Written by

Pillar Award Finalist

Mark Swepston

president and CEO

Atlas Butler Heating & Cooling

(614) 294-8600 | www.atlasbutler.com

The staff at Atlas Butler Heating & Cooling, led by President and CEO Mark Swepston, participates throughout the year in many different efforts that serve the needy or disadvantaged in the Columbus community. One of the company’s longest-standing community partnerships is with the Salvation Army.

Each year, company associates volunteer as bell ringers at Salvation Army donation kettles throughout the Columbus area. Some 30 percent of Atlas Butler associates give of their time in three-hour shifts for the donation effort.

In addition, associates have participated in the Salvation Army’s “Christmas Cheer” program for the needy. As one of the largest holiday gift-distribution efforts in Ohio, Atlas Butler volunteers help the Salvation Army distribute toys, food and household items to more than 7,000 families over a two-day period.

Atlas Butler’s community involvement doesn’t end once the holidays are over. For the past four years, company associates have participated in local 5K runs that benefit various charitable efforts, including the American Cancer Society, the Mid-Ohio Food Bank and the Komen Race for the Cure to fund breast cancer research. Atlas Butler associates will often show up between 35 and 60 strong to run in charity races.

In addition, each summer Atlas Butler spearheads a local “fan drive” in which the company, along with individual associates, donate new electric box fans. The fans are distributed to Franklin County residents age 65 and over who suffer from health problems and do not have central air conditioning in their homes.

 

 

Medical Mutual, along with our co-founding Pillar Award partner SBN, proudly presents the annual Pillar Awards.

In the January 2013 issue, we honor 24 finalists representing a diverse group of companies and organizations of varying sizes. While they may be different in many ways, one thing that they all have in common is their commitment to strengthening the bond between the for-profit and nonprofit worlds.

This is an important conversation, and at this year’s event, we intend to explore it.

It occurred to us many years ago that few things are more meaningful and important than investing time and resources in supporting our community, and we felt the need to honor companies and their employees who have gone above and beyond the call. While support and direction come from management, companies are only as great as their employees.

For that reason, we are quite proud to present the Medical Mutual SHARE Award. This unique award was founded to recognize companies whose employees best exemplify the ideals of Medical Mutual’s own employee SHARE Committee. SHARE stands for serve, help, aid, reach and educate, and it is the heart and soul of Medical Mutual’s charitable giving effort.

The SHARE Committee, made up of Medical Mutual employee volunteers, helps coordinate more than two dozen community events involving nearly half of the company’s 2,500 employees.

On behalf of Medical Mutual and SBN, we hope you enjoy reading about these great companies and we offer congratulations to all of our Pillar Award recipients.

Rick Chiricosta

president and CEO

Medical Mutual

www.medmutual.com

 

The Central Ohio Class of 2013 Finalists

PILLAR AWARD

Atlas Butler Heating & Cooling

Cardinal Health

Columbus Crew

Delta Energy

Donatos Pizzeria LLC

Fahlgren Mortine

Fifth Third Bank

Mettler Toledo

RockBridge

Safelite

SafeX

CompManagement, Inc., a Sedgwick Company

REA & ASSOCIATES NONPROFIT EXECUTIVE DIRECTORS OF THE YEAR

Jay Jordan, Online Computer Library Center

Tom Slemmer, National Church Residences

Tammy Wharton, Girl Scouts of Ohio’s Heartland Council

KENT CLAPP CEO LEADERSHIP AWARD

Jane Grote Abell, Donatos Pizzeria LLC

Mark Swepston, Atlas Butler Heating & Cooling

Ira Sharfin, Continental Office Environments

NONPROFIT BOARD EXECUTIVES OF THE YEAR

Brooke Billmaier, St. Stephen’s Community House

Robert Click, LifeCare Alliance

Michael J. Fiorile, Columbus College of Art and Design

Laura Warren, Girl Scouts of Ohio’s Heartland Council

Robert J. “Skip” Weiler, Jr., Big Brothers Big Sisters of Central Ohio

Brenda Stier-Anstine, Mt. Carmel Foundation

 

KENT CLAPP CEO LEADERSHIP AWARD and MEDICAL MUTUAL SHARE AWARD will be announced the night of the event

Kelly BorthBuilding a strategy to earn name recognition in the marketplace is more complex today than ever, and increased competition breeds more choices.

The Internet feeds prospects’ desire for 24/7 access to information and, at the same time, has changed the face of publishing. Email provides messaging directly to someone’s personal mailbox. Smartphones connect us around the clock and around the globe. And social media has revolutionized communication by providing a vehicle that gives a voice to the masses.

Much has changed and the new paths have opened the way for businesses to chart their own course. There are fewer barriers to getting your message to your targeted audience (unless you are trying to reach them on their office phone, right?) but many more fragmented choices to reach out and connect with them to get your message heard.

 Develop a well-thought-out strategy

As with all marketing, the best-laid plans produce the best results. Businesses today need an online strategy, an industry strategy and a direct-marketing effort to build exposure.

Understanding what potential customers want and need is imperative to success, as is knowing where potential customers hang out so you know the best opportunities to connect with them.

Chart your own course

The Internet offers no barriers to entry. Unlike having to pitch your story or white paper to an editor to get it published, the Internet freely accepts whatever information you would like to create and share with its open universe of information seekers.

This accessibility means opportunity is at your fingertips to populate that universe with your information. Popular forms of providing information include websites, blogs, press releases, white papers, case studies, educational videos, virtual webinars, various forms of presentations and pictures of products, comparison matrices, social media sites, such as YouTube, LinkedIn, Google+, and so on.

Some Internet services, such as those that distribute press releases, charge a fee, whereas posting sites, such as blogs or social bookmarking sites such as Digg, are free. Tracking engagement and turning engagement into opportunity begins with a solid website that effectively communicates your message, is connected to all of the information you have placed on the Internet and is optimized for search engines.

Becoming visible within targeted industries is more traditional. Strategic sponsorships of industry association events, trade shows, informational seminars and forums, as well as advertising and editorial within trade news vehicles — both print and online — are just a few options.

Think of sponsorships as your connection with the industry that can match you with potential customers. You are benefitting from relationships these industry associations have with the individuals and companies you want as customers.

Your direct strategy is about getting your company in front of a prospect so that when there is a need for what your company sells, the prospect is already familiar with you. This can include direct mail, email campaigns (make sure they are opt-in) and invitations to webinars or seminars where you present meaningful information.

Other options include Google AdWords or other pay-per-click campaigns, trade advertising, trade shows, online advertising, etc.

Plan for a comprehensive, integrated approach

To get noticed today, companies need to have an integrated plan of action, one that is comprehensive in nature to reach the intended target audiences. Just having a website is not the answer, nor is just going to a trade show or having a video on YouTube. It is much more complex than that.

Building a known name in the marketplace takes a commitment to a planned approach and follow-through. And don’t forget the importance of a consistent brand message and voice, as well.

Kelly Borth is CEO and chief strategy officer for Greencrest, a 22-year-old brand development, strategic marketing and digital media firm that turns market players into market leaders. Borth has received numerous honors for her business and community leadership. She serves on several local advisory boards and is one of 30 certified brand strategists in the United States. Reach her at (614) 885-7921, kborth@greencrest.com, @brandpro or for more information, visit www.greencrest.com.

 

Often overlooked in discussions about improving Ohio’s economy is the fact that actions taken by state and local governments are primary drivers of the cost of doing business. Their ability to levy taxes and impose costly regulations directly impact a company’s bottom line. When governments are inefficient, they need more revenue. When they take a command and control approach to regulations, they often become an obstacle to growth.

To ensure a strong, competitive economy, we need efficient governments that tax less and provide greater value. That’s why the Ohio Chamber of Commerce and our state’s eight metropolitan chambers undertook an important study issued in December 2010, called Redesigning Ohio. It offers a road map for transforming Ohio’s state and local governments into 21st century institutions.

Burdened with an unprecedented fiscal crisis and a projected $8 billion deficit, state government leaders were at an important crossroads. They could continue to accept the status quo or they could embrace reforms aimed at improving services and heightening productivity through greater flexibility and innovation.

The ideas advanced in Redesigning Ohio provided a framework for thinking boldly about ways Ohioans can receive more value for their state and local tax dollars.

Redesigning Ohio offers 10 specific areas for reform. The first proposes changes to the budgeting process itself by employing a unique approach called Budgeting for Outcomes. Two other innovations, Charter Agencies and Entrepreneurial Management, incentivize greater efficiency by providing more freedom to manage in exchange for less funding and by bringing market-based competition to government services.

Redesigning Ohio also proposes pension and civil service reforms that harmonize the public and private sectors and regulatory reforms that use incentives to boost voluntary compliance. In the health care arena, the report urges the government to leverage its buying power to foster greater competition, lower costs and better results. Redesigning Ohio also offers ways to reduce the cost of the criminal justice system and urges a more thorough and regular review of tax credits, exemptions and deductions.

Finally, Ohio has a costly and outdated system of 3,700 local governmental units that must be brought into the 21st century by enhancing productivity and promoting greater collaboration.

Now, two years after the release of Redesigning Ohio, the same nine Chambers of Commerce have issued a Redesigning Ohio Update. The new report details the progress that has been made and sets out the next steps in this critical transformational process.

As a result of bold actions taken by Gov. John Kasich and Ohio lawmakers, clear progress has been made in reforming our criminal justice system and Medicaid program. Most importantly, the reforms are not just reducing costs; they are also improving results.

One of Gov. Kasich’s first actions established the Common Sense Initiative, which focuses on creating a more jobs-friendly regulatory climate in Ohio. CSI has achieved a number of successes that are making Ohio’s regulatory process more transparent, efficient and less costly for businesses.

Also in 2012, the Ohio Legislature enacted public employee pension reforms that are an important first step in ensuring the long-term solvency of those funds and reducing the cost for taxpayers.

During the past two years, many local governments and school districts embraced greater innovation and collaboration, but additional work remains. The successes highlighted in the Redesigning Ohio Update can serve as excellent models for the additional work ahead.

Today, our economy is improving. Unemployment is at 6.9 percent and tax revenues are increasing. But, we cannot allow these improvements to justify a return to the status quo. With Redesigning Ohio as a guide, we must continue the work necessary to transform our state and local governments into 21st century institutions. ?

 

Linda Woggon is executive vice president of the Ohio Chamber of Commerce. As Ohio’s largest and most diverse statewide business advocacy group, the Ohio Chamber has been an effective voice for business since 1893. To contact the Ohio Chamber, call (614) 228-4201 or visit the website at www.ohiochamber.com.

How often do you go to market without a solid business strategy? Probably never, right?

Wrong.

The reality is that if you’re like most organizations, then you’re doing this right now — and you don’t even know it.

That’s because most organizations do not have a well-thought-out marketing strategy. Instead, most are doing what somebody told them they should do. This includes creating a mobile website, engaging in social media and advertising.

All of these are “smart” marketing initiatives. But if they’re done in a vacuum, there’s no way to measure what results those initiatives are intended to accomplish. Worse, you’re chasing tactics instead of delivering results.

There is a significant difference between marketing tactics and marketing strategy. Marketing tactics are ways to bring channels to life. This could be a new website or a mobile-optimized version of your site. Or it could be creating new sales collateral. Tactics should be used to bring your brand message and value proposition to life.

Unfortunately, if they’re not tied to a cohesive strategy, you will not achieve the results you desire.

A marketing strategy, however, allows you to understand the results you should achieve. It also keeps everyone aligned with what you’re trying to accomplish and where you are in the process.

As an example, there are three main reasons for a website: to verify your organization’s brand message to potential customers, to deliver your value proposition and conversion.

Conversion can mean different things for different industries. In retail, it might mean picking out a product, putting it in your shopping cart and making the purchase. In business-to-business, conversion might mean picking up the phone to contact the company, providing a name, email and phone number, or signing up to receive a newsletter.

Without understanding how consumers behave, you may be selling your marketing efforts short. You might not be providing enough information to clearly articulate your brand message or value proposition or you might not be offering users an easy experience that allows for conversion. So how do you ensure that a consistent brand message, value proposition and the ability to target customers converts across all marketing channels?

First, understand who the target consumer is and their needs, attitudes and behaviors. This can be discovered through research, including focus groups or through industry-based segmentation.

Then, conduct a deep dive to understand your business goals and objectives. In retail, this might be the number of sales you want to drive. In B2B, it could be increasing the numbers of prospects in your pipeline.

Finally, evaluate your company’s existing marketing tactics — your website, marketing collateral and overall brand message.

Only then will you be well-equipped to evaluate your overall tactics and compare them to marketing best practices and the competitive landscape. This results in recommendations that include expected business results and return on investment.

Prioritize these by measuring the highest impact against investment levels, and then create a timeline to implement them over a one- to two-year period. Share this strategy throughout the entire organization so everyone understands what will be accomplished and what the expected results are.

Without strategy, and an understanding of everything that goes into it, any money you pour into tactics tends to be money poorly spent. Done correctly, your marketing strategy suddenly becomes your organization’s key driver and leads to tangible and measurable business results.

Dave Fazekas is director of digital marketing for Smart Business Network. Reach him at dfazekas@sbnonline.com or (440) 250-7056.

Wednesday, 02 January 2013 13:41

Should you be friends with your employees?

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What is the best way to motivate employees? Some successful CEOs treat employees as friends, while other equally high-achieving leaders regard employees as merely hired hands, giving them a day’s pay for a day’s work and nothing more.

What’s the best approach to produce the best results for the company, the employee and the employer? Much of the issue lies with one’s definition of a friend and the culture of the organization. Many companies boast that their employees are like family. This sounds great, but can it work?

If either party crosses the fine line that separates the difficult-to-define business and personal space, both employer and employee can become disenchanted or worse. One way to think of it is that friendship is more unconditional. We accept a friend for what he or she is or isn’t. On the flip side, the reality is that most bosses embrace or reject employees for what they do on a consistent basis.

The military has its own way of handling fraternization between officers and the enlisted by making it a possible court martial offense. This stance is predicated on the belief that socializing between these two levels is “prejudicial to good order, discipline and partiality.” It is well recognized that business relationships without boundaries can produce too much drama.

Perhaps what we need is a new definition for a nonemotional, congenial, enjoyable and productive day-to-day relationship between leader and follower. This moniker could be employee-friend, or “e-friend” for short. “E-friend” isn’t an app but would describe an employer/employee relationship where there is mutual respect and a genuine appreciation of one another, underscored by an understanding, albeit perhaps unspoken, that when the time for talking is done, the boss has the final word on matters that occur between 9 a.m. and 5 p.m. Using these ground rules, both sides can have it both ways by using good judgment and treating each other as they would want to be treated if their roles were reversed.

The employee should expect from the boss that, when the chips are down, either on a business basis or when the employee has a personal problem, he or she knows that the boss will be there for him or her, providing understanding and advice and, when requested, helping the employee maneuver through rough patches. From the employer’s perspective, the employee would be someone who, through thick and thin, is there for the company and can temporarily put personal needs aside when there is a business issue that can’t be postponed.

The e-friend boss should know as much about the employee as the employee wants the boss to know, which can include sensitive professional problems or even family or medical issues. In a good relationship, the boss could certainly know, as one example, what the subordinate’s kids are up to in their lives and be the first to say to the employee that it’s more important for him or her to go to an offspring’s ballgame or play, rather than putting in extra time on the business project du jour.

Instinctively, employees know if a boss truly cares or is just going through the motions to be politically correct. They know if the head honcho is sincerely concerned about them as a person, not just another set of hands.

Not everything and everyone in the workplace are created equal. There will always be a pecking order; however, there is nothing wrong with truly enjoying the people with whom you work every day and sharing meaningful experiences, all of which lead to a more fulfilling role for both the employer and the employee. The best criterion to avoiding problems is using generous doses of plain common sense. There is a much-quoted line from the 1987 movie “Wall Street,” starring Michael Douglas as the ruthless tycoon Gordon Gekko, who proclaimed, “If you want a friend, get a dog.” This provoked both laughs and sighs, but in the real world, this attitude makes for a very lonely Ebenezer Scrooge-type life for the boss and a shallow existence for employees who must spend more than half, at the very least, of their Monday through Friday waking hours working.

At times, people can be difficult, both to work for and with. However, it’s the people who make the company and relationships that combine respect and a form of e-friendship that can make the real difference.

Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at mfeuer@max-wellness.com.

A unique new book with an unorthodox, yet proven approach to achieving extraordinary success.

What does it take to grow rapidly and effectively from mind to market?

This book offers an unconventional philosophy for starting and building a business that exceeds your own expectations.

Beating the competition is never easy. That’s why it requires a benevolent dictator.

Published by John Wiley & Sons. AVAILABLE NOW! Order online now at: www.thebenevolentdictator.biz

Also available wherever books and eBooks are sold, and from Smart Business Magazine and www.SBNOnline.com. Contact Dustin S. Klein of Smart Business at (800) 988-4726 for bulk order special pricing.

Richard Branson is full of big ideas. The man who founded six companies that each rake in more than $1 billion annually dares to think big. For him, it’s all about the experience, making a difference and not doing things the same way as the competition. An idea captures his imagination and he sets out to turn it into reality.

For him, it’s not about the money. It never has been.

When he sees a situation where he thinks he can make a difference in people’s lives, he looks for a way to make a difference. He understands that “why” he is doing it is more important than the “what” or the “how.”

Author and consultant Simon Sinek agrees (see video link). He explains that Apple is wildly successful at what it does not because it can build computers better than anyone else but because it understands “why” it is doing so. It’s not that the competition doesn’t know what it is doing or that it doesn’t have talented people creating good products. It’s just that Apple understands why it is in business and focuses its message on that instead of what it does — which is build electronic devices.

Sinek says that people like to do business with people who believe what they believe, so they buy more on the “why you do it” rather than what you are actually doing. Notice that profits are secondary. If you do things the right way for the right reasons, profits come naturally.

You might already have a big idea for your business, but it will most likely never reach its full potential unless you understand why you are doing it. Have you ever stopped to think about why you are in business or why you are doing what you are doing? It can be an enlightening exercise.

With the demands of daily business, we seldom stop to think about the reasons behind our actions, and if we do think about it, the answer is often “to turn a profit.” But to what end?

When you understand why you are trying to make a profit and the answer goes beyond simple wealth, then you are getting to the heart of what differentiates a good business from a great one. Maybe the reason why is a social issue, such as eliminating hunger, or maybe it’s a medical issue, such as curing a disease. But it doesn’t have to be grand. The “why” can be something like “making computers easy for everyone to use.” The important part isn’t the scope; it’s understanding your business’s basic reason for existence.

When you’ve taken the time to understand that, your business will have the potential to do great things because employees and customers alike can unite around a common understanding.

It’s why Apple is a great company and it’s why Richard Branson is wildly successful. If you’re already doing it, you’re on your way. If not, take the time to think about it.

Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or  fkoury@sbnonline.com.

Tuesday, 25 December 2012 11:29

4 necessary skills for managing people

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According to Merriam-Webster, management is “the process of dealing with or controlling things or people.” While “controlling” is a bit harsh in my book, the definition is correct in it's focus on management of people. To be a good manager or team leader, you have to have an above average interest in people. Success in management is found in the relationship developed between leader and team.

The best managers see themselves as catalysts. They become that agent or force that provokes or speeds significant change or action. These managers get things done quickly by leading with solid people skills.

Here are 4 people skills that every good manager must possess:

1. Understanding the right way to give a critique.

The worst thing you can do if you want to get someone to listen to you is to criticize.

As human beings, we hate to be criticized. When we feel attacked, we usually attack back – even when we are in the wrong. Many of us fall into the trap of thinking “I know I am right and I am going to prove it to you.”

Over the years I have learned that this way of thinking simply does not work.

A good manager has the self-control and presence of mind to put aside the needs of his own ego and say “I've got a problem, will you help me?” Enlisting cooperation in this manner will always lead to better results.

2. Understanding the need to help.

If someone comes in to criticize you or to raise your game, under what circumstances would you be willing to accept the critique?

The answer for me is simple. If I think someone is really trying to help me, then I'll engage and listen.

On the other hand, if I feel that the person is just trying to get the job done or make himself look good, I may listen, but my heart will not be in it. My interest and creative energies will be lost.

The truth of the matter is: Managers will only have influence over their people to the extent that their people think they are sincerely trying to help them. It is simply the way human beings work. Good managers truly care about their team and work hard to help them.

3. Understanding no two people are the same.

As a manager, you do not influence everybody the same way. People do things for their own reasons – not for others and not for you.

Inspiring people to your company vision happens best when you help them to see what's in it for them. This varies from person to person. It is your job to discover what things motivate each member of your team.

Some people are motivated by a challenge, some by money and others by recognition.

It is about reading their needs, desires and wants and then leading in such a way that ensures their success at obtaining them.

4, Understanding the best way to get tasks completed.

An effective manager realizes that each time he has an interaction with someone about a task, there are two things going on:

a. A discussion about the task and how to get it done.

b. The way in which the interaction affects the managers relationship with the collegue.

The first is pretty straightforward, but it's success is determined by the tenor of the second.

It must be said that the task should not be sacrificed for the relationship at all costs. It must also be said that winning on the task is not good if the manager ruins the relationship. Both are important and the manager must do well in each area.

I refer again to the need for the manager to develop relationships with the team in order to understand the best way to get things done according to individual members needs, desires and strengths.

In the end, good managers know how to use their influence and power to help others achieve beyond their wildest dreams.

I like management guru Tom Peters' definition of power:

“My definition of power is understanding that all of managing — and this comes out of the old grade school book — is the notion of doing more than you and I can do by ourselves; that is, doing things through other people.”

He goes on to say:

“If you are interested in getting things done effectively and imaginatively through other people then what you're trying to do in the workplace is exactly what you're trying to do on the football field – which is to get people who work with you to achieve beyong their wildest dreams.”

Workplace managers understand that good people skills determine their success. They work hard to develop the skills needed to lead in ways that shows their interest in people.

DeLores Pressleymotivational speaker and personal power expert, is one of the most respected and sought-after experts on success, motivation, confidence and personal power. She is an international keynote speaker, author, life coach and the founder of the Born Successful Institute and DeLores Pressley Worldwide. She helps individuals utilize personal power, increase confidence and live a life of significance. Her story has been touted in The Washington Post, Black Enterprise, First for Women, Essence, New York Daily News, Ebony and Marie Claire. She is a frequent media guest and has been interviewed on every major network – ABC, NBC, CBS and FOX – including America’s top rated shows OPRAH and Entertainment Tonight.

She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” To book her as a speaker or coach, contact her office at 330.649.9809 or via email atinfo@delorespressley.com or visit her website at www.delorespressley.com.

Monday, 31 December 2012 20:58

What you might not know about health care reform

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Health care reform is on the way, with most mandates starting in 2014, but it will be 20 or 30 years before we really know how the Patient Protection and Affordable Care Act (PPACA) will work, says William F. Hutter, president and CEO of Sequent.

“That creates much uncertainty for small and middle-market companies.

They don’t know what to do. And that uncertainty is bad for the economy and it is bad for business. When business owners can’t make decisions, it’s bad for all of us,” says Hutter.

Smart Business spoke with Hutter about some of the lesser-known aspects of the PPACA.

What are the minimum participation standards?

There are two standards for minimum participation:

• 80 percent of all eligible employees must take coverage from the employer.

• 70 percent of net eligible employees must take coverage from the employer.

Net eligible employees won’t include those who decide to get coverage from a spouse’s plan.

A really unique caveat about this is that if a company cannot maintain those participation requirements, technically no carrier has to write it coverage. That would force the company into a state health care exchange because it would be unable to provide a health insurance program for employees.

You could try to increase employee participation by improving the plan, but then the cost goes up and the company can’t afford it. Or the cost goes up and somebody can go to the state health care exchange and get a subsidized plan for less.

A lot of companies with between 75 and 150 employees are really going to be challenged. If they can’t meet minimum participation requirements and can’t afford to design a plan to compete with the exchange, they can give up and let everybody go to the exchange. But then they have to pay a $2,000, per employee, nondeductible penalty. For a company with 100 full-time equivalents (FTEs), that’s a $200,000 tax and they still don’t have a health plan.

How can companies that provide adequate health insurance still wind up paying penalties?

Say I run a company that has more than 50 FTEs and I’m offering a good health care plan. However, because of the subsidies that are offered, an individual opts out of my health care plan and instead seeks out insurance from a state exchange. A family of four can earn up to $80,000 and get a subsidy for buying on the exchange. I could still wind up paying a $3,000 penalty if I have an employee who opts out.

So companies will be weighing whether it costs more to provide health care or simply pay the penalty?

Correct. If that’s the case, how does that impact my company culture and how do I want to take care of my employees and their families? We don’t know how some of those questions are going to manifest. Or the fact that, as an employee, I get my health care out of an exchange, therefore I can go to work anywhere I want to. That begins to break down the loyalty factors between employees and companies.

What impact will the PPACA have on health insurance costs?

Based on the average cost of $440 per month for an individual, 75 percent is used for claims. That means the remaining 25 percent, or $110, goes for administration costs, profits, compensation, rents and other expenses related to the health care plan. The legislation says that 85 percent of every dollar must be used to pay claims. In order to maintain that same $110 a month, the cost for an individual goes up to $730; it’s just a reverse calculation. This can be attributed to the legislation and how it ultimately impacts the medical loss ratios.

William F. Hutter is president and CEO at Sequent. Reach him at (888) 456-3627 or bhutter@sequent.biz.

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