Amy Dison

Saturday, 28 October 2006 20:00

2007 and beyond

Advances in health care, treatments and education are developing each day and are saving the lives of numerous patients. While these advances are amazing and life-changing, they are costly. On average, health care coverage costs about $8,000 per employee.

The common goal for executives is to deliver sufficient health care and benefits while keeping annual costs affordable, says Rick Galardini, president and CEO of HRH/Affinity Marketing Group. There are approaches executives can take to reduce costs for both the company and the employee. It is important to find a health care provider that provides both health care coverage as well as health improvement tools, says Galardini.

Smart Business spoke with Galardini about future benefit packages and how employers can get the best package while saving money.

What changes will employees see in benefit packages in the future?
There will be more risk sharing among the insurance company, the employer and employees. There will be more financial participation on the part of the employee. The design of the packages may change over time, but the core concept of providing employees with adequate health care remains the same.

For employers to continue to provide a benefits package, deductibles and co-pays will increase in most cases. These costs have been very minimal in the past, but recently the costs of these payments are affecting the pocketbooks of employees.

Employers must be cautious when purchasing a health care package that saves the company money. These savings often are paid for by employees when medical care is necessary. In the case of a medical emergency or long-lasting illness, compensation may not be provided by the insurance provider until a large deductible of sums is satisfied.

How can an employer communicate all the information necessary when benefit packages change?
To effectively communicate benefits changes to employees, experts should be utilized or a staff employee should be properly trained to explain what the package includes. A third party typically is brought in to explain coverage and provide tools so employees can take advantage of all programs offered.

These trained experts should communicate changes to employees directly. One part of the communication process that is often overlooked is communicating with an employee’s dependents. These people are also covered by the benefits package and should be addressed by the benefits provider directly.

How will these changes benefit companies?
Employers should have lesser health care costs. However, it is not that simple. Employers must look at the overall picture and the chain reaction their decision on a health care package may cause.

It is likely employees will pick up the costs that the employer is saving when they pay their premiums for the coverage. Employers should be cautious of other effects to which changes in health care may lead. If an employee’s co-pay is too costly for a visit when an employee is feeling a bit under the weather, then employers risk unhealthy employees coming in to working in the facility. This can potentially lead to a decrease in productivity and other sick employees — and it can affect morale.

How can executives cut benefit costs but maintain sufficient coverage?
Information needs to be provided to employees so they can make informed decisions about the health care for which they are paying. A package needs to be introduced transparently. This means providing all the tools and information needed to make informed decisions, such as where to go to seek medical treatment, who to go to, and the reputation and record of the physician or pharmacy. A benefits company should provide literature, interactive programs and Web sites for employees.

Wellness programs are being offered to employees as part of benefits packages. If employees area healthier, overall health claims are reduced. There is a huge movement in the health care community to initiate wellness programs and education, in order to keep employees healthy as a way to reduce the costs of medical coverage. Profiles are used in this program to identify employees’ needs and health risks. After a profile is completed, health care providers offer suggestions, education materials and tools to help an employee with health risks.

How should an employer select a benefits package?
An employer should look for a provider who is selling the best package for their employees’ needs. These needs should be determined by employee surveys and employee input. The package should also be based on the annual disposable income of the employees.

One should not only purchase the best policy but also the educational tools that help employees get healthy or maintain their health. If you want the best employees for your business, you need to offer better packages and coverage than your competitor.

RICK GALARDINI is the president and CEO of HRH/Affinity Marketing Group. Reach him at

Sunday, 29 October 2006 13:08

Steep challenges

Retirement used to mean winter homes in warm locations, leisurely walks and afternoon naps. A person’s income was relatively guaranteed due to a steady flow of lifetime income from Social Security and pension plans. People did not worry about the cost of medicine and doctor visits, because companies also provided lifetime health benefits. With these benefits dwindling, along with rising life-spans, the baby boom generation faces steep challenges in providing income for life, says Gary Storie, health management adviser for NexTier.

Many business owners are not exempt from these challenges. They are confronted with the issue of whether their business value will be adequate to fund retirement years, says Storie.

Smart Business spoke with Storie about how business owners can plan properly for retirement and still run a successful business.

How can a business owner plan lifetime income?
Business owners spend most of their time and money trying to make their business successful. They often put all of their resources into the business and neglect to plan for their personal future, believing that a successful business will guarantee a successful retirement.

It is necessary to sit down and make a lifetime plan or timeline, listing your goals and objectives. You must make two plans. One should be business plan and the other should be a personal plan. While these two plans may affect one another, they should always be separate and well defined.

A business plan should define where you want the business to be in the future, how you plan on expanding the business and how you will provide for the people working for the company.

A personal plan should define personal goals, retirement dates and a cash-flow analysis. Profit made from a business should be saved in a personal account as well as put back into the business.

What challenges do business owners face in planning for their future?
They sometimes make the mistake of tying up all their net worth in the business. They plan to save when the business is more successful.

There are many more options for people who plan ahead and invest early. Health care, which is very costly, must be allocated for because Medicare and Medicaid plans are not likely to cover expenses in the future.

Another risk is the lack of planning for risk assessment. If all savings are tied to a business, a major financial risk evolves for a business owner. The successes of some businesses fade as trends and lifestyles change.

Finally, owners fail to maximize the value of the business when retiring. Often a company is not purchased by a new owner in a lump sum.

What strategies can be used to meet these challenges?
An exit strategy should be created that includes a budget for desired living expenses adjusted for inflation during retirement. This cash-flow analysis will show a person how much needs to be saved before retirement. It is necessary to pay down debts before retirement.

Owners should put as much money as possible in retirement accounts. Special benefits and tax breaks should be identified and taken advantage of by owners. A comprehensively managed asset-allocation program should be implemented.

Investments need to be well diversified. People invest money but take too much out. Four percent is the most people can take from their portfolio annually during retirement to have enough money to last their lifetime. That is barely enough to cover inflation.

Finally, risk management issues such as life insurance, health insurance and long-term care should be addressed. There are benefits for business owners, such as a Health Savings Account.

What is the best advice you can give to someone who is concerned about lifetime income planning?
It is important to do a reality check about your future. Planning is crucial. Half of workers age 55 and older have not calculated their lifetime income needs. The average 65-year-old couple will live to be 85. This lifespan requires more money than most people originally planned. If you own a business, it is necessary to project potential income for retirement plans.

What can business owners do if they have not started planning?
Congress has created a catch-up provision for approaching baby boomers to accelerate their contributions or savings into their retirement. Someone over the age of 50 is eligible to take advantage of catch-up provisions as far as contributing to their retirement plan. A person can contribute up to $44,000 for the year 2006.

Put as much away as possible in a tax-deferred plan to profit as much as possible in a short time.

GARY STORIE is health management adviser for NexTier Bank. Reach him at (888) 262-6331 or

Thursday, 21 September 2006 20:00

Family business

People who engineer a family business often put most, if not all, of their time and money into the operation to make it successful. Much strain can be placed on the relationships of a family involved as they find it difficult to separate business and family.

“Even the best and most organized families with businesses do not possess complete objectivity,” says Rich Snebold, co-founder of the Family Business Center at NexTier Bank.

Smart Business spoke with Snebold about the importance of training and the steps business owners can take to guarantee success.

Why is it important for the owners of a family business to nurture or train the next generation?
In order for a family founded business to survive from one generation to the next, it is crucial that steps are taken to prepare the next generation of leaders. The success or failure of such a business can have a ripple effect on other employees, customers and vendors.

New leadership development is necessary and can be one of the best investments for a family-owned company. If the next generations of leaders are family members, then proper training ensures that an owner is continuing their legacy. If they are nonfamily members, then training is a great way to maintain employment with your company.

Why do business owners neglect training the future owners of their business?
The owner is often too busy working in the business and forgets to take time to work on the business.

Another reason training is because a business owner does not know how to train others. A person can be very successful at running a business but not very good at training people.

Finally, some owners take the approach to training as, ‘No one trained me so why should I train them?’ This attitude can destroy a company. An owner must realize that they have to relinquish some of the control if they want their business to survive.

Such training is vital and can lead an owner to valuable information. One may find that future leaders are not qualified for the responsibilities of a leadership position.

How can family business owners respond if they find the future leaders are not qualified to manage a business?
Deciding that a family member is not qualified to run the business in the future is a mature decision that needs to be made by the family. Then the family as a whole should begin the search for a replacement leader. Involving a board of directors, advisers or an outside source can help make such decisions easier to resolve.

The key to a successful family business is to professionalize the business as much as possible. Objectivity is necessary when running a family business.

How can a business owner create a career development program to help train future leaders?
First, the current leadership team should sit down with the future leaders and determine where they want the company to go to in the future. A good approach is to develop a plan and work backward to determine the steps that need to be taken to reach the ultimate goal.

The company leaders should then do an assessment of the current leadership both inside the family and outside the family.

It is then necessary to determine any holes in the leadership and business plan. This could be as simple as pinpointing what skills and assets will be lost when a leader retires. After the holes are located, a company should actively put together a program of individual growth and development. This may mean training family members in future leadership positions while current leaders are still working in the business.

Most importantly, leaders should visit the plan quarterly and evaluate the progress made.

How can family business owners implement a career development program properly?
Business owners can read a book, take a class or allow a third party to help them implement such a program.

A third party can offer the objectivity needed to run a successful business. Third parties can make tough decisions without worry about the feelings of family members. An objective third party should start by offering a company a diagnostic analysis that offers insight to what is lacking such as leadership development or employee issues. Such issues should be outlined and specialists should be brought in to work with the company to resolve issues until the company is comfortable enough to operate without such guidance.

RICH SNEBOLD is co-founder of the Family Business Center at NexTier Bank in Cranberry Township. Reach Snebold at (888) 829-2162 or

Wednesday, 30 August 2006 18:22

Investing aggressively

Organizations that have reached a high level of IT security can safely reduce spending between 3 percent and 4 percent of the IT budget by 2008, according to research firm Gartner Inc. By contrast, organizations that are inefficient or have historically underinvested in security may spend 8 percent or more of their IT budget on security. This means many organizations will still be investing aggressively for the next few years.

The rate at which technology is advancing is rapid. Some may argue that the only things that are moving faster are hackers. There are now solutions to most information security problems. It’s just a matter of implementing the technology efficiently and effectively so resources can be focused on new threats, says Larry Kucera, senior consulting executive of Premier Technologies.

Smart Business magazine spoke with Kucera about steps companies can take to ensure security and what systems are typically overlooked.

How can business owners guarantee security before an intrusion takes place?
Putting up a firewall or using virus-scan security software is not going to keep hackers out. Business owners fail to think about things that can happen within their company. Systems need to be evaluated from the inside out and the outside in.

There is risk associated with processing any type of data. You need security assessments from the network perspective as well as the application, the database and finally internal physical security.

Vulnerability assessment and a penetration test need to be run on systems. It is important to look at policies and procedures that model ISO 17799 security standards. Also look at data movement, how secure that data is, who needs to see the data, and how often it is being off loaded to a portable device.

What steps can executives take to ensure security?

  • Identify applications which prove to be key to your business and generate a significant amount of data used in the organization.


  • Lockdown access rights to data. Access needs to be granted on a must-have basis. The use of a thin client, which has no external drives, therefore ensures that information cannot be removed from the workstation, provides security.


  • Limit the number of wireless devices being used. These devices can be compared to telephone party lines used years ago. Today, someone can be transmitting information through a wireless connection and someone else can intercept the information unless it is encrypted.


  • Outsourcing needs to be monitored. Executives need to make sure outsourcing companies use the same types of operating procedures and security guidelines that your company uses. Demand that your outsourcer is SAS 70 certified.


  • Executives should review protocols and infrastructures to ensure both on-site employees and remote workers are following the same guidelines. Remote workers require intrusion-detection devices that notify the executive if someone is trying to access the information line.


  • The use of numerous office locations requires that all systems are up to date. If they are not updated regularly, there is great threat for intrusion.

What are systems that are commonly overlooked when it comes to security?
Laptop computers provide a major risk. Wireless connections provided in public areas can be accessed by numerous people who, in turn, can access the information that you are sending on the Web. Some companies are outlawing wireless networks because of lack of security.

Wireless networks can radiate out in much broader areas than are known. This becomes a concern for companies using Web casts to hold large meetings or conferences from many different company locations in the U.S.

How can a company keep systems updated without spending a fortune?
Today data is the most important asset a company possesses. From a business perspective, security ensures customers. If there is an intrusion, it is likely customers will no longer use that company, so company reputation may suffer.

Organized crime has entered the business of hacking. There is money to be made from selling data by hacking systems. Testing is required to find where security gaps may develop as a company grows and changes.

Testing should be done once a quarter because it is so dynamic. Automated software can be used to update systems. These tests and updates can be provided by a technology company.

What should a technology company be able to provide a company?
To provide the best security for your programs, you would want a company that can tell you where there are gaps and what needs to be updated and then help provide you with the resources to provide that type of security.

LARRY KUCERA is a senior sales consultant and domain expert in business continuity planning for Premier Technologies. Reach him at (412) 788-8080 or

Wednesday, 30 August 2006 12:03

Dangling the carrot (and other veggies)

In a competitive business world, employees are often a company’s most valuable asset. Business owners are finding that investing money into an employee’s overall health and well-being can make them money in the long run. The problem for some employers then becomes getting employees to participate in wellness programs that will benefit their overall health.

Getting individuals engaged in wellness programs over a long period of time is important for long-term corporate cost savings. It indicates that that individuals who participate in multiple wellness activities have lower health care costs, says Sally Stephens, president of Spectrum Health Systems.

Smart Business spoke with Stephens on how to implement incentives to create involvement in wellness programs and how a company can benefit from this participation.

What is a wellness program?
According to the National Wellness Institute, wellness is a holistic concept approach. It involves looking at the whole person, not just their blood pressure, body fat, exercise behavior or what a person had for lunch. It involves physical, social, emotional, occupational, spiritual and intellectual dimensions.

The most effective approach provides three interdependent levels of wellness programming.

  • Information designed to support healthier lifestyle choices (e.g. pamphlets, audiotapes, videotapes, handouts, etc.)


  • Personal change, which includes workshops, seminars, classes, individual counseling, biofeedback and other activities


  • Organizational support provides assistance in establishing more supportive worksites

One of the most challenging decisions an employer has is what type of wellness programming to include. Wellness programs range from online tools to onsite screenings and workshops. Research indicates that the most effective approach is one that is comprehensive and includes health improvement programs as well as demand management or tools that support plan participants in being smart consumers of health care services.

How can business leaders and managers encourage employees to participate in wellness programs?
Wellness and managing health is a paradigm shift for many, and this shift can be escalated through wellness incentives. The challenge that employers have is marrying the incentive cost with the impact on their total health care. The payout for incentives is immediate, but the recognition of savings from people entering the health care system or not entering the health care system might be longer term.

What types of incentives are appropriate for managers to offer?
What constitutes participation is at the discretion of the employer. The first step in many wellness programs is for workers to complete a health assessment form that identifies their risk factors. As more companies have shifted health care costs to workers in recent years, they have created an incentive for workers to enter wellness programs.

A company might also decide to increase employee premium contributions but will waive the increase if the employee participates in a wellness program. Other companies are becoming more aggressive in their incentives by making health insurance eligibility dependent on enrollment in a wellness program. Other companies have other types of incentives such as cash drawings and gifts. The most common trend is tying participation in the wellness program to plan design.

The most effective time to introduce incentives is with the introduction of the wellness program. Good communication prior to the rollout of the program is critical so employees are clear about the consequences of nonparticipation.

How does the utilization of wellness programs benefit a company?
The wellness push fits well with the consumer empowerment rhetoric surrounding both the movement toward increased cost-sharing with employees and Health Savings Accounts (HSAs), a benefit plan that asks consumers to take more responsibility for their health care costs.

Employer benefits include: stabilizing health insurance and disability costs; improving the overall health and well being of employees and their family members; changing behavior to reduce use of health care; increasing employee productivity and minimizing lost work time; integrating health risk management and the health plan; protecting the company’s insurance investment and its employees; and attracting/retaining quality employees.

How do wellness programs benefit the individual employee?
They save employee out-of-pocket costs. They provide the convenience of having treatment and follow-up care performed at or through the worksite. They eliminate nonproductive clinic travel and wait time. They reduce lost employee income by accelerating return-to-work. They can affect behavioral changes that will reduce future risk.

Additionally, health screenings help employees understand their health risks, and a 24-hour support system to solve individual and family health problems.

SALLY STEPHENS is a founder, owner and president of Spectrum Health Systems. She provides the kind of hands-on leadership Spectrum Health Systems needs to deliver cutting-edge health risk management services to its clients that gets results. Reach her at or (317) 573-7600.

Tuesday, 28 February 2006 10:47

Investing wisely

Many people may be uncomfortable approaching a financial consultant. Beau Collins, a Chartered Wealth Advisor, licensed insurance agent and financial consultant for Hilliard Lyons, says that “understanding the financial planning process will help clients feel more comfortable planning for their future.”

Financial planning is a six-step process that helps set a guideline for the adviser and client to follow. The financial process includes the initial interview, data gathering, data confirmation, plan presentation, plan revisions/modifications and implementation.

Collins spoke with Smart Business about how these steps facilitate the financial-planning process.

What should a person or business expect from the initial interview with a financial planner?
The client should not be caught off-guard by the financial consultant’s questions. This is the main reason why this first step in the planning process is so crucial. The financial consultant’s ultimate goal in the initial interview is to seek understanding through curiosity, sharing expectations and asking questions.

The financial consultant may even find it best to let the client take control of the conversation. The more information the financial consultant (receives), the easier it will be to construct a plan that fits the client’s needs. Once the client and the financial consultant understand each other’s expectations, the planning process can move on to the next step.

The next two steps in the financial planning process are data gathering and data confirmation. What data is needed?
Data gathering and data confirmation include information such as family statistics (marital status, number of children, grandparents), feelings (how past experiences may have been influential), plans (goals and expectations) and perceptions (attitudes toward certain investments, investment preferences), which may be gained in the initial interview. At this time, the financial professional also needs to review the client’s financial statements, tax returns, real estate holdings, business interests, etc. The review of these statements is also known as the review of the shoe box, in reference to the place where most clients keep such information.

Once the data has been gathered, it needs to be confirmed. A client may have a net worth statement prepared in order to insure accuracy of data. I also think it is important to communicate with all other advisers aiding the client to make sure all parties are working toward the same goal.

When does the client or business get a chance to participate in creating the plan?
The plan presentation and revision is when the client and the financial consultant meet to review the initial plan. During this presentation, a condensed version of the financial plan, or Investment Policy Statement (IPS), is created. The IPS is then carefully scrutinized to make sure it is congruent with previously set goals. I like to refer to the investment policy statement as the road map the financial consultant will follow to achieve the client’s dreams.

Revision of a plan is an ongoing process that occurs when the client experiences a life-changing event. A plan may also be revised if there is a shift in the client’s investment interests. New and improved products are constantly created in the marketplace, which may encourage a revision of a set financial plan. Regardless of any major changes in your life, the plan should be monitored at least annually, and in some cases on a quarterly basis.

How do you know when a plan is ready to be put into action?
It is ready to be put into action when all the parties agree on all revisions and modifications made to the financial plan. The financial plan is just paper in a binder unless the plan gets implemented and put to work.

The financial consultant’s job is to be the quarterback of the team of advisers. Working in unison with the other financial professionals helps the client to reach his or her financial goals and objectives.

How long might this process take?
The time it takes for the six-step financial process to be completed is dependent upon each client’s individual needs. The shortest amount of time in which a proper financial plan could be completed would be about one month.

After implementation there needs to be continual monitoring which plays an active role in the plan’s success. If you include the monitoring process in the planning process, the financial consultant’s job is never done.

How does a financial plan with an investment policy statement benefit a client?
An investment policy statement allows the client to reach set financial goals in a way that avoids hassle and frustration. Not only will the IPS lead you to accomplishing your goals, it also offers peace of mind knowing that all steps have been taken to achieve success.

Beau Collins, Chartered Wealth Advisor, is a licensed insurance agent and financial consultant for Hilliard Lyons. Reach him at (614) 210-6281 or

Tuesday, 26 August 2008 20:00

Capital positioning

The rapid change and constant unease of the economic market today has many consumers and business customers more aware than ever about their bank’s capital position. It is a hot topic in the media today and interest and awareness have heightened in recent months as banks continue to make headlines.

While customers may be more aware of a bank’s capital position, it is important to use the information appropriately when making financial business decisions. The media has discussed “capital” at length, but only very broadly. Consumers should be educated on what capital really is, why it is being impaired so dramatically and at what levels they should be concerned.

“Capital is certainly one indicator of a financial institution’s strength,” says Sue Zazon, president and CEO of FirstMerit’s Columbus region. “The stock market’s reaction over capital concerns at some financial institutions confirmed that belief. However, there are many more factors consumers must consider when evaluating a bank’s financial strength.”

Smart Business spoke with Zazon about the effects a bank’s capital position may have on your relationship with your bank and what you must consider when evaluating capital position.

How can a bank’s capital position affect the relationships consumers and business customers have with their bank?

A bank under capital stress may change the way it deals with its customers. Capital is the cushion that protects the depositors and shareholders against loss. With each loan a portion of the bank’s capital is ‘committed’ to back that loan. Capital has a real economic cost and raising additional capital increases costs to the bank. A bank under stress may have to reexamine its loan portfolio and elect to reduce loan exposure to free up capital.

Does the unknown in today’s market create stress for consumers that they in turn take out on their banks?

A good relationship with your bank is important whether you’re a depositor, a borrower or both. People need to be comfortable with the financial stability of their institution. A good bank communicates clearly with customers and addresses their questions and concerns.

What real effect does a bank’s capital position have on the service a consumer receives?

Asset write-downs and losses impair capital. Earnings are also impacted by write-downs and losses. Shareholders expect earnings; therefore management often makes expense cuts to improve earnings. Significant staff reductions can affect customer service. Weakening capital positions are also affecting consumers’ banking behaviors. In recent years, consumers often waited out any troubled times their financial institutions experienced. Today, consumers are not so patient. As we see in the market now, some customers change banks because of their concerns. Few are waiting until they are impacted.

Is a bank’s capital position ever a warning sign that the bank is in real trouble?

Absolutely. Very large charges against capital or a continuing trend of declining capital for several quarters are red flags. A clear warning sign is when a bank’s capital levels are approaching regulatory minimum levels. However, if your bank’s capital position has been negatively impacted just recently or for a brief period, do not panic.

Ask questions of your banker, understand what is going on with the bank. Understand your FDIC insurance coverage, evaluate your relationship with the bank and your banker and then decide if you should change banks. It is important for consumers to stay educated and know how the FDIC protects them. If you are truly concerned, you should evaluate your banking options.

How can consumers monitor their bank’s capital position?

The Web site of the Federal Deposit Insurance Corporation ( includes financial information on all insured banks. You can find your bank on this site and with a little searching find out how it compares to other banks on many measures. Another source of information for publicly held banks is the stock analyst reports. One can also review a bank’s financial reports.

SUE ZAZON is the president and CEO of FirstMerit Bank’s Columbus region. Reach her at or (614) 545-2791.

Wednesday, 25 June 2008 20:00

Getting personal

As health care consumers visit different physicians for different needs, it’s important that their health histories are properly documented and communicated. Thus, the personal health record — an online tool that may transform the way health care is delivered — is becoming increasingly popular.

Its appeal is easy to understand. By giving health care consumers access to detailed information about their health care history, they become empowered to make more intelligent decisions about their care.

“With a personal health record, we can provide members with more detailed information about their health care and the resources they need to manage their health,” says Sharon Hicks, vice president of Internet strategy for UPMC Health Plan. “When you can turn employees from recipients of health care into informed consumers of health care, you can improve health.”

Smart Business spoke with Hicks about personal health records and how they help people become more engaged in health care.

What exactly is a personal health record?

A personal health record is an electronic application through which an individual can enter health care data or see information that is prepopulated from provider or insurance information. That information is related to the individual’s health status or health care. A personal health record helps an individual take a more active role in his or her own health. Consumers are more empowered regarding health care decisions when they have additional information. All information in a personal health record is private, secure and confidential. The personal health record is not intended to diagnose any specific illness; instead it is designed to allow people access to information to better manage their issues and to plan their interventions.

How is a personal health record different from an electronic health record?

An electronic health record serves the needs of health care professionals — it’s patient-related information managed by a clinician and/or a health care institution. Personal health records are a mix of information from the patient, providers and insurers. The individual chooses who to share it with and what information to add to it.

What information elements would a personal health record include?

Ideally, it provides a comprehensive summary of the health and medical history of an individual by compiling data from many sources. Consumers can see their medical history through updated claims and health assessment information. Immunization schedules, lab results, drug refill reminders, guidance aimed at managing or preventing a particular condition and information about drug allergies may also be part of the personal health record, depending on the needs of the individual. A personal health record is interactive and enables consumers to supplement it with personal information, such as family health histories. Individuals control the information in their own health records.

What are the benefits of widespread use of personal health records?

Widespread use of a personal health record can help close some of the gaps in care and promote better health through helping people get a full picture of their health. In theory, when a consumer has greater access to a wider range of health information, data and knowledge, he or she is able to leverage that information to improve health and manage conditions. Patients who have chronic diseases can use their personal health records to track progress, provide reminders for services or medications and to consolidate information into one source to aid in continuity of care. Doctors and health insurers across the country are realizing the best way to care for people is to help them care for themselves through better information and more proactive care. With a personal health record, people can take a more active role in managing and improving their health.

How would increased use of tools such as the personal health record impact employers?

Employers of companies both large and small have plenty of incentive to keep their work forces healthy. It is imperative that employers try to find innovative ways to address the rising costs of health care. If the health of your work force can be improved as a result of having your employees become interactive participants in their own health care management, you can expect to reduce organizational health care costs over time. Because the personal health record promotes a holistic approach to health and puts the emphasis on prevention, it can, over time, develop healthier lives. Employers should encourage their employees to take over control of their health. With the personal health record, people will learn to pay attention to their health before they get sick.

How would the increased use of personal health records impact health care?

When you empower consumers, you open up a floodgate of possible economic repercussions. If you change people from being simply passive recipients of health care into active consumers of health care, it really can help people improve their health. When people become active in their health and wellness, you can reduce costs in the long run. Prevention is often the best medicine.

SHARON HICKS is the vice president of Internet strategy for UPMC Health Plan. Reach her at (412) 402-8727 or

Monday, 26 May 2008 20:00

Networking and partnering

If you are in need of a certified baby sitter for an infant or even a restaurant for an important dinner meeting, are you going to open the phone book and select the first name you see listed in that section? No, because that is not how services are selected for those things that we hold dear to our hearts. The same holds true for business services.

If it is an important service for which we are shopping, we often ask those people that we trust and who have provided good references in the past for advice. A word-of-mouth recommendation is the best form of advertisement a business can receive, says Jack Landers, a commercial insurance broker with Westland Insurance Brokers. The key to being successful is to be the first person all your clients want to recommend. To become that person, you may need to go beyond your job description for clients and help them become successful in overall business.

Smart Business spoke with Landers about the importance of networking with clients and how helping develop a client’s success leads you to your own personal success.

What does being in partnership with clients mean?

Being in partnership with a client means being part of that client’s team. If you are in an industry, such as insurance, where you work with many different industries, networking can be very easy. As you develop a relationship with clients, you get to know their areas of expertise and are able to recommend them to other clients in the future.

As an insurance broker, being in a partnership means far more than shopping for a customer’s insurance coverage and pricing. A partnership requires working to develop a long-term relationship with a client. It goes beyond providing insurance policies, risk management and account servicing. It is necessary to offer your expertise and general knowledge that a client can use to enhance their business. It becomes a partnership because, if done properly, one can help his or her own business grow while helping a client’s business grow.

As a partnership develops, you will likely become a trusted member of a client’s team and will often be utilized for advice or references. You become more then just his or her insurance broker; you become a valuable resource and asset.

In what ways may clients utilize my knowledge or services in a partnership?

In a true partnership, there are endless possibilities. One may be asked to refer accountants, banks, limo services, corporate catering or even a toxicologist for the life science industry. The point of such a relationship is to become too valuable for your client to replace. For example, there may be other insurance brokers in the world offering similar plans and programs, but you should strive to be the one your client cannot or does not want to survive without. By taking the extra step to make recommendations or to help with nonwork-related services, you become the partner that business owners know they can turn to when they have a question about anything.

How can being in a partnership benefit my personal business?

It is a win-win situation because when your clients are asked who they use for a service, such as an insurance broker, they will immediately recommend you. There is no better form of advertisement than word-of-mouth. People usually only trust respected friends or business individuals they admire for such recommendations so, if they recommend you, it may very likely increase your personal business. If you are going above and beyond for a client, he or she is simply not likely to replace you with the competition.

Are there other networking methods you recommend?

Absolutely, one can join networking groups or clubs. But choose wisely. The group needs to fit your personality, schedule and interests. This will help you relate to others around you and lead to the greatest results.

San Diego has many networking groups and clubs that range from specialty organizations for different industries to Chamber of Commerce groups, BBB, business lead tip type groups, etc. As the members of the group get to know you and your company better, they now become your ‘sales team.’ If you are networking properly and are a competitive businessperson in your industry, your ‘sales team’ is likely to recommend you to others, free of charge. The return on investment with these groups is indicative of how active you are in the groups but simply cannot be matched in today’s market.

Do you only refer your clients?

Not always. But the more you know about your clients’ goods and services, the easier it is to refer their business first. Everyone wins: Clients receive business without the costs of direct advertising, you are happy to help each business prosper, and you likely keep them a client for years to come.

As they say in sales, ‘the best compliment is a referral.’ The referrals clients give back to you should be handled with TLC and appreciated.

JACK LANDERS is a commercial insurance broker with Westland Insurance Brokers. Reach him at or (619) 584-6400.

Friday, 25 April 2008 20:00

The self-funding shift

Today, employers are turning every stone to find ways to reduce health care costs that continue to rise. One way to create savings to offset the general medical costs is through dental and vision plans. Moving current dental and vision plans to a self-funded program can save employers anywhere from 10 to 20 percent in health care costs, says Brenda Fagan-Johnson, employee benefit specialist with Westland Insurance Brokers. Essentially, you are cutting out the overhead and profit that a fully insured carrier must include in its rates.

There is very little risk involved with self-funded dental and vision plans, so it is a great way for employers to test the self-funding process and determine the benefits it can provide their business. Dental and vision are the most profitable plans for insurance companies because there is so much money left in reserves at the end of the year, says Fagan-Johnson. Self-funding such plans will save employers much-needed funds.

Smart Business spoke with Fagan-Johnson about the benefits of self-funding dental and vision plans, the risks involved and the operation process.

How is a self-funded health plan administered?

For self-funded plans, an employer hires a third party to process claims and administer the plan. The most cost-effective pricing is generated by putting the dental and vision benefit into one plan. That keeps your administrative costs at a minimum.

What is the difference between a self-funded vision and dental plan compared to a fully insured plan?

The self-funded vision plan is a reimbursement program. You may utilize any licensed eye care provider. A typical vision plan would reimburse an employee $50 for an exam and $100 for glasses or contacts. This level of benefit matches plan designs offered by the fully insured market but at a much lower cost.

A fully insured PPO dental plan costs between $30 and $40 a month for single coverage. The self-funded dental plan with the same benefit level runs between $15 and $20, including the administration fees. Vision programs are approximately $6 to $10 per employee per month. The monthly cost for a self-funded vision plan for single coverage is in the $2 to $3 range.

Why are employers taking advantage of and implementing self-funded plans now?

By moving dental and vision to a self-funded plan, employers automatically save 10 to 20 percent overhead that a typical insurance company would have to charge to make a profit. There is no additional work involved for a busy business owner because a third party funds the claims and handles employee requests. The business owner simply funds the claim.

Self-funding does not limit employees as they are permitted to visit any doctor they wish and receive the same coverage they would if they were covered by a fully insured program. You may use any dentist including dentists in Mexico along the border of San Diego. As a growing number of Americans use dental services in Mexico, it is important to utilize plans that include such coverage. Many dentists in Mexico have been educated and trained in the U.S.; therefore, quality care is not a problem.

Are all business owners qualified to self-fund dental and vision plans?

All are qualified, but it is not beneficial unless you have 50 or more employees. You do not need to have a large pool of money or reserves to self-fund dental and vision plans. Dental and vision are very limited benefits and have a cap of liability per person, per year.

While all self-funded plans are often a benefit for employers, it is a great idea to start with dental and vision plans as they carry less risk and are a great opportunity to become comfortable with the plan.

Do you believe that business owners will start implementing self-funding for basic medical coverage, as well?

It is very common for companies who start out with self-funded dental and vision plans to get very comfortable with the plan and the process and look into self-funded medical plans. They learn how to evaluate the trends of the coverage they are providing and project the needs in the future. They often realize it is very easy to implement and operate. One of the biggest aspects that employers appreciate is they can see where every dollar they spend is going. There are no hidden costs that are often found with insurance companies or operating costs.

Will employees notice a change in their coverage if the plan becomes self-funded?

No, there should not be any difference in the care and coverage received by the employee. Often, we hear employees saying that they like the programs because claims are processed quicker. Typica insurance companies are in no hurry to process claims because they like to keep the funds in their accounts for as long as possible. With self-funded plans, claims are paid weekly. Doctors enjoy self-funded plans, as well.

Employees can still visit any physician they wish with self-funded plans, and employers have the option to design their own plan.

BRENDA FAGAN-JOHNSON is an employee benefit specialist with Westland Insurance Brokers. Reach her at (800) 541-0711 or