How to reorganize the chaos of open enrollment

Open enrollment can be overwhelming for both employers and employees. Employees are given the opportunity to re-evaluate their current benefits and make changes for the coming year, while employers must choose a benefits package that balances cost and value and facilitates the enrollment process.

“Benefit offerings are changing, placing new demands on employees and employers during open enrollment,” says Keith Kartman, client manager at JRG Advisors. “To make the enrollment process as smooth as possible, it is important that employers educate and communicate with their employees effectively.”

As employer-sponsored benefits transition to more voluntary, employee-paid or employee-subsidized offerings, employees must assume more control. Accordingly, employers should provide benefit information in an easy-to-understand format that gives employees essential information, along with additional resources to help them make smart decisions.

Smart Business spoke with Kartman about making your next open enrollment as pain-free as possible.

What will improve the open enrollment process for both employers and employees?

Communication — Establish solid communication between your HR department and employees. To do so effectively, conduct meetings, seminars and benefit fairs, while providing targeted educational resources that focus on your open enrollment and offerings. If your organization is smaller, conduct one-on-one meetings to determine the type of information employees need.

It is important to keep plan information as simple as possible, while also being interactive. Employees need a clear understanding of their benefit offerings to make more knowledgeable decisions.

Feedback — Survey your employee population to determine their priorities — product importance, preferred method of communication, etc. By doing so, employers can identify what employees want, and workers feel their needs have been heard by decision-makers.

Customization — Customize benefits and information resources to the life stages of your employees. For instance, if you have a large older population, feature more retiree benefits and long-term care insurance. It is also wise to communicate with your employees in the same way that they communicate. For example, if messages are received via postings in a common area, consider placing benefit information in that area as well.

By customizing the benefits to their population, employers can increase employee satisfaction without increasing their spending and make it easier for employees to select the benefits best suited for them and their families.

Additional tools — Provide easy-to-understand tools, such as on-demand benefits videos, benefits guidebooks or an online enrollment system. These tools help facilitate the open enrollment process by reducing employee confusion and the feeling of being overwhelmed while trying to make tough decisions.

Something new — Consider offering new benefits, even if they are voluntary, such as accident insurance, cancer insurance or pet insurance. Employees tend to make more changes when they receive new options. Even if employees must pay 100 percent for such voluntary options, they can still be attractive. Since the benefits are negotiated by the employer, employees typically receive a group rate, which is significantly lower than purchasing them individually.

Breaking it up — Offer a second, off-cycle enrollment period. This can be a time for employees to focus on voluntary benefits and other nontraditional offerings. These benefits are typically overshadowed by health insurance and retirement options, so a second off-cycle enrollment allows employees to focus on their other needs.

What’s your takeaway on open enrollment?

A successful and effective open enrollment process can have a dramatic impact on the relationship between employers and their employees. By considering their needs and wants, employers, ultimately, make the experience more enjoyable and worthwhile for their workers. As a result, they will feel more secure in their benefits decisions throughout the plan year.

Insights Employee Benefits is brought to you by JRG Advisors

Strategy is the key to managing rising health care costs

Health care costs, and employee health benefits costs, have been increasing at an alarming rate for nearly a decade.

“Avoiding rising health care costs is nearly impossible, but employers need to be educated on why they continue to rise and the unique strategies available to manage costs for their organization and their employees,” says Jessica A. Galardini, senior vice president at JRG Advisors.

Smart Business spoke with Galardini about health care costs and what do about them.

What has led to increased health care costs?

Several market conditions have led to a decade of unrelenting increases. The two main factors have been an aging population and poor general health. Because older workers are more prone to health problems, companies see a rise in chronic conditions, costly medical problems, the use of prescription drugs, and an increase in the number and frequency of catastrophic claims. Poorer health among Americans also has contributed to health care cost increases. Preventable risk factors like obesity and high blood pressure have led to increases in chronic health conditions, such as diabetes and heart disease — illnesses that are long in duration and costly.

For employers, understanding why annual health plan renewal rates are significantly higher than the prior year is the key to forming strategies and solutions to their particular challenges. It is also important to educate employees about the reasons behind plan or contribution changes.

What can employers do?

While some employers struggle to absorb most of the cost, others have already raised deductibles and cost sharing, implemented high-deductible plans and increased employee cost sharing. These tactics, however, are a short-term fix. Employers need to identify and attack the root causes of rising costs with sustained, systemic changes. With poor health growing and the uncertain impact of health care reform, employers need short- and long-term strategies to manage costs.

What are some effective strategies to manage health care costs?

Employers can control rising costs, depending on the unique demographics and objectives of the group, by:

Using available health care data to make strategic plan decisions. This can be a top cost-cutting strategy. However, it’s important to go beyond accessing data. Employers should be educated on how to interpret and apply that data when making health plan decisions and implementing strategic changes.

Putting a greater emphasis on consumer-driven health plans like health savings accounts or health reimbursement accounts. These plans offer cost-savings for the employer and employee. With proper education, employees and their dependents can become smarter health care consumers, which saves both money.

Exploring alternative funding solutions, which enables employers to manage costs, while providing more customized benefits to their employees. These options consist of self-insured and level funding plan designs and can pave the way for employers of almost any size to potentially reduce their benefits cost.

Health and wellness initiatives can be an effective cost management strategy, especially when implemented with health care data. Designed to improve employee health and wellness, these programs not only lower costs but also increase productivity and reduce absenteeism. Initiatives can be customized (target specific diseases) and comprehensive (include dependents). Participation incentives are popular, but it is important to use effective incentives. It is better to reward employees for participating in a program or meeting a health goal than incentivizing a health risk assessment.

Which solution is right for your organization?

While short-term strategies such as employee cost sharing, remain prevalent, it is critical to explore multiyear plans and long-term initiatives that improve overall employee health and strategically manage costs in the future. Ultimately, a sustainable strategy that’s right for your business can best be achieved through a thoughtful and detailed analysis of your benefits program with the guidance of a trusted benefits consultant.

Insights Employee Benefits is brought to you by JRG Advisors

To see where your business fits, understand the health benefits options

Preferences for the three primary medical benefits funding arrangements — fully insured, self-insured or level funded — have shifted. Alternative strategies like self-funding and level funding are on the upswing with mid-sized and small employers, says Joe Roberts, area vice president at Gallagher.

Smart Business spoke with Roberts about the benefits and risks of alternative health benefits arrangements.

How does self-funding differ from fully insured benefits plans?

Compared to fully insured plans, the most obvious and immediate cost-savings advantage comes from eliminating insurance margins, fees and state taxes. When health care is less costly than under a fully insured alternative, the surplus belongs to the employer. This arrangement also minimizes regulatory requirements and allows for greater plan design flexibility.

The overall price paid for health care depends on population usage. By proactively managing physical and emotional wellbeing with effective health initiatives, employers can directly reap the reward of lower claims activity among healthier employees.

Two related self-funding benefits are the transparency of claims data and the visibility into improving employee and organizational wellbeing. More self-insured employers are partnering with data warehouse vendors to uncover health plan inefficiencies and population health needs. For example, data integration and analytics might identify patterns of opioid misuse that began with a dental prescription. The employer could then manage the prescription plan more stringently to address this outcome.

What are the risks of self-funding?

Knowing the organization’s risk tolerance threshold is essential. Large claims, such as specialty prescriptions or cancer treatment continue to grow in size and frequency, leaving employers susceptible to catastrophic costs. The lower their risk tolerance, the higher the amount of stop-loss insurance they need to adequately limit exposure to higher-than-expected claims.

One risk is having the wrong stop-loss contract, which can potentially delay reimbursement of large claims, and a benefits offering that’s misaligned with the contract. Also, some contracts pay providers bonuses when they meet certain metrics — adding cost. These include the increasingly common rewards-based accountable care organizations or bundled payment contracts.

The administrative complexity must be considered, as well. Plan management involves compliance, documentation and alignment with the stop-loss and claims administrator contracts, as well as handling claims issues as they arise.

Where do captives come into play?

A captive arrangement provides a unique self-insured opportunity for like-minded employers to share health care risk and reduce costs by pooling populations. Similar to a licensed commercial insurer, a captive assumes the risk generally associated with an insurance company. But pricing within a captive arrangement reflects the experience of the member companies — not the broader market. While there are downsides, such as bearing an increased administrative burden and investing in startup costs, this approach can be worth considering.

What are the pros and cons of level funding?

Level-funded plans are similar to self-funded plans. Offered by insurance carriers and third-party administrators, these plans are underwritten and may appeal more to smaller employers, especially those with relatively healthy populations. The employer pays a set amount monthly to cover claims and fixed costs like stop-loss insurance. Unspent funds are kept in the account for future costs, and the stop-loss insurance covers claims that exceed employer funding. Essentially, this allows for the savings and other benefits of self-insurance without the cost instability. If an employer has a high-claims year, however, the monthly cost the following year may increase.

Because medical and other health care benefits costs continue to rise, revisiting the funding options is a sensible step. With important implications for organizational risk, as well as costs and fees, a sound decision can only be made by carefully evaluating the full spectrum of current and alternative strategies.

Insights Employee Benefits is brought to you by Gallagher

How to reduce cost without reducing benefits

For business owners today, the continual rise in group health insurance premiums has put a strain on their employee benefits budget, forcing them to explore less traditional means of cost containment.

“Most have already raised deductibles and cost-sharing, implemented high deductible plans and tax advantaged savings accounts and increased employee cost sharing. As a result, many insurance companies and third-party administrators (TPAs) have answered by creating new ways for groups of almost all sizes to take advantage of funding alternatives as a way to potentially reduce their benefits cost,” says Domenic Pascucci, consultant at JRG Advisors.

Smart Business spoke with Pascucci about the funding options that may be beneficial for you to consider, whether you own a business with 25, 250 or 2,500 employees.

What has caused the growth of funding alternatives?

Not too long ago, only the largest groups would stray from a fully funded insurance program to one that they self-funded.

If a company had fewer than 1,000 employees back in the 1970s, they probably wouldn’t even think about self-funding their medical insurance plan. But since then, and especially in the past several years with the passage of the Affordable Care Act, many funding options have emerged. This allows nearly any business owner with more than 10 to 25 employees to transition to an alternative funding arrangement, based on their financial capabilities, benefit objectives, employee demographics and utilization history.

What are these options and how do they work?

Group medical plan funding, in general, can either be fully insured or self-insured. A fully insured program provides insurance with the least amount of risk to the employer. With a fully insured program, the insurance company evaluates the risk and sets a premium level. The customer is not expected to pay the difference to make the carrier whole if its claims utilization is more than the carrier expected or get any refund of premiums paid if the claims utilization is less than expected.

At the other side of the risk spectrum are self-insured programs. A self-funded health care program is one where an employer assumes the financial risk for providing health care benefits to its employees. Conceptually, the employer utilizes a TPA and establishes a ‘bank account’ to pay each claim from its own funds as they are incurred. Other than paying the TPA a fee for its role in administering the claims adjudication, providing utilization reviews and for ‘renting’ the TPA’s negotiated discounts with a particular carrier, the employer’s risk is directly tied to the claims experience of the employees and their dependents. Large, unexpected ‘shock’ claims adversely affect such consistency, and for this, a group usually obtains stop-loss protection, limiting the impact of these large claims. The advantage of self-funding is more control over plan design, improved cash flow and the avoidance of certain taxes imposed on the employer.

In between fully insured and self-insured plans are level funding arrangements. Level funding is a variation of self-funding that addresses a chief concern for employers — the variability of cash flow from month to month that they might experience on a traditional self-funded arrangement. In level funding, the TPA’s underwriting department sets a fixed rate that the customer pays each month (along with any necessary administrative fees), greatly assisting the company in its budgeting effort since any monthly claim spikes are eliminated. Additionally, different insurance carriers and TPAs in different regions of the country have developed other variations of self-insured arrangements that may be appealing to individual businesses.

The decision to change funding to one of these arrangements should be evaluated carefully with assistance from an experienced benefits professional, as there are nuances among each variation that might work out to be an advantage or disadvantage for any particular customer. Although traditionally limited to larger groups, recent changes and safeguards have allowed groups with as few as 25 employees to consider self-insurance or one of its modified versions.

Insights Employee Benefits is brought to you by JRG Advisors

How to facilitate effective benefits plan communication

The way that employers communicate benefits information to employees has a tremendous impact on how well the programs are understood, utilized and perceived.

“Managers and supervisors can be effective in sharing important benefits information, especially if it is not scripted or canned. Since they are most likely to know what their employees understand, they might be better able to present benefits information in a way that makes sense. As an employee’s main point of contact, managers and supervisors also tend to be more approachable with questions,” says Judy Griffith, compliance officer at JRG Advisors.

Opportunities to ask questions, express dissatisfaction and discuss problems with supervisors and managers should be encouraged. However, when managers and supervisors share benefits information, it needs to be done with caution.

Smart Business spoke with Griffith about effective benefit plan communication, via managers and supervisors.

How can an employer avoid verbal communication problems?

Communicating inaccurate information to employees is always a major concern when using managers and supervisors to relate benefits information. Employers should be mindful that misinformation not only causes an employee relation problem, it has the possibility of leading to litigation, as well.

Follow these tips to avoid problems.

  • Consider allowing only specific HR personnel to discuss benefits information.
  • Remind supervisors and managers, who may be asked benefits questions, to review their plan documents carefully. They should refer any question they’re unsure how to address to the HR department.
  • Whether formal or informal, don’t make promises regarding any aspect of the plan that the company won’t be able to keep.
  • State in the documents that amendments are to be made only in writing and approved by the corporate representative or plan administrator, if applicable.

What are some written communications cautions to be considered?

Even if written material about benefits information isn’t an official plan document, informal written promises can still prevail in court. So, make sure informal written communication about the plan is consistent with official documents before distributing.

Employees often rely on summary plan descriptions to determine their rights under a specific plan. In the event of an issue due to discrepancies between plan documents and the summary plan document, the summary plan document can hold up in court. Therefore, it’s crucial to ensure the summary plan document is correct, current, clear and in agreement with the plan documents, handbooks and other benefits information.

As a safety measure, be sure that the summary plan description, handbooks and other benefits communications state clearly that the plan document has absolute authority over them. This should appear in a separate paragraph in a prominent position. Consider using larger, italic or boldfaced type, or a distinct border, to make the information readily apparent.

Other general helpful tips include:

  • Keep a copy of each communication or disclosure sent to employees, however informal.
  • Grant discretion to fiduciaries in the plan document.
  • Make sure all documents relating to the plan don’t include misleading information before distributing. Request additional information from the plan administrator, if necessary.
  • Reserve the right to amend the plan at any time for any reason.

In addition, health insurance issuers and group health plans are required to provide a Summary of Benefits and Coverage (SBC), an easy-to-understand summary about health plans benefits and coverage. These simplistic health plan summaries can help an employer explain benefits to employees.

How can selecting the right broker help?

Employers should partner with an experienced benefits professional who can provide an effective benefits communications solution and strategy. This strategy should include engaging communications that reflect the needs, wants and motivations of your employees, and also comply with the legal requirements surrounding the benefits plan.

Insights Employee Benefits is brought to you by JRG Advisors

Designing a successful employee benefits program

Let’s face it, one of the most important and costly issues for employers today is implementing and managing a successful employee benefits program.

“When it comes to retaining and recruiting quality employees, your benefits program is a critical component, and in most cases, it can account for 40 percent or more of total compensation costs,” says Ron Smuch, Insurance and Benefits Analyst at JRG Advisors. “Employers should take the time to implement a strategic, well-thought-out benefits program that meets the employee needs and the business objectives.

Smart Business spoke with Smuch about what employers need to consider to achieve a successful benefits program.

How do the objectives and budget shape these programs?

A successful employee benefits program has clearly identified objectives. If you’re offering benefits just so you can say that ‘we offer benefits,’ you’re missing the mark.

Identifying clear objectives will lay the groundwork and guidance to establish the selection and design of your benefits program. Keep in mind, the objectives should reflect both the employer and employee needs. Additional factors also to be considered include employer size, location and industry. Unless you have an open checkbook, budget is an equally important factor. If you already have a benefits plan in place, current benefits costs and projected costs should be analyzed.

Why are the employees’ needs important?

A survey or needs assessment should be conducted to identify the coverage, cost and network that reflect the needs of your employees. Benefits are by no means one-size-fits-all in today’s diverse workforce. Gaining feedback from your employees will increase motivation and satisfaction with the benefits program. Employee feedback can also help to prioritize which benefits would be most helpful in achieving satisfaction with the plan.

How can employers use survey data?

After analyzing the employee feedback, employers should prioritize the survey findings. For example, the cost of providing the prioritized benefits can then be evaluated and compared to the overall budget and cost sharing methodology.

This process can involve many factors. For instance, should changes be made to the current benefits plan design to promote cost savings? Can underutilized benefits not important to employees be eliminated? What cost containment features can be implemented? These are all important points to evaluate when considering the design of the benefits program.

Where does communication come into play?

Developing effective communication channels should be at the forefront of the planning and management of any employee benefits program. The only way to get employees on board is to ensure that they fully understand their benefits and coverage. Without employee support and satisfaction, an employer’s efforts could prove futile. If employee feedback was used as a determining factor in the benefits program design, employers should make employees aware of how their feedback influenced the design.

Additionally, communications with employees about benefits should extend beyond legal requirements. A good communications strategy and dialogue create awareness and appreciation, provide a heightened understanding of the benefits and promote wise use of the coverages.

What about ongoing evaluation?

Review and assessment of the plan throughout the year will ensure you are meeting employer and employee objectives. Many factors can impact the benefits program, such as the economy, regulatory environment and workforce demographics.

Set the measurements on your goals in order to assess the benefits program and quantify adjustments. The use of benchmarking data and periodic employee surveys further assist employers in evaluating the effectiveness of the employee benefits program.

Insights Employee Benefits is brought to you by JRG Advisors

New ways to approach employee performance reviews

What does the term “performance review” mean to you? To many people, it means sitting down at the end of the year with a manager to discuss work performance over the past 12 months. To others, it could mean a quarterly meeting to report on the status of specific tasks and performance goals. And some may relate to it as a weekly conversation.

“Not all employers approach performance reviews the same way,” says Rob Higginbotham, finance and HR director at JRG Advisors. “Whatever method your company reviews take, it should be formulated from a basis of employee feedback and company culture.”

Smart Business spoke with Higginbotham about trending performance review practices.

How are companies accomplishing ongoing, periodic reviews?

Some employers are replacing the annual performance review with more frequent manager-employee check-ins, which occur monthly or weekly. These check-ins do not need to be lengthy and can be as simple as taking a short walk or coffee break.

For example, instead of waiting until the end of the year to review a year’s worth of projects, managers can give immediate feedback throughout the progress of a project. And when projects are completed, managers can discuss what was done well and areas for improvement. This format makes it easy for employees to ask questions or share ideas.

Frequent dialogue between managers and employees helps to promote continuous growth. And, it gives managers the chance to identify and resolve performance issues in a timely manner. As a result, feedback can seem less confrontational and managers can seem more supportive.

What are wellness checks? How do they affect employees?

Like a performance review, checking in on employee wellness can be critical for their success. Research indicates that people are more stressed than ever. Prolonged stress can lead to serious mental health issues and negatively impact the workplace and employee performance.

Employers can combat stress issues by weaving wellness into performance conversations. Managers who meet with employees more frequently have greater opportunity to talk about stress levels and the importance of personal well-being. In fact, regular conversations about these issues can maximize positive impact for the overall workplace.

How do artificial intelligence (AI) and people analytics play a role?

People analytics is a way of tracking things like employee engagement data, training program effectiveness and productivity. The practice examines human data and crunches the numbers so you have a better idea of the return on investment. Do you need to know if your employees feel appreciated? Do you want managers to have real-time coaching feedback? These are just two examples of how people analytics can make a difference.

Notably, these analytical tools are used to improve performance. If you have the data, you can find a system to be most effective. And with more advanced AI being created, systems will gauge an employee’s productivity based on whatever criteria you like — eliminating the guesswork.

Why is identifying strengths for upskilling important?

If you have a new task that requires new skills, should you hire a new employee for the job? The current trend says no, and to instead upskill current workers.

This process trains current employees in new skills and responsibilities that better suit their talents. If an employee is performing poorly in one area, that doesn’t necessarily mean he or she will not perform well in other areas.

Performance reviews offer a great opportunity for evaluating and identifying the skill sets of your employees. Since you’re discussing workplace performance anyway, floating the upskilling opportunities is a way to retain employees who are already familiar with your organization.

Like most trends, employee reviews will continue to develop. This means it is time to prioritize your approach.

Insights Employee Benefits is brought to you by JRG Advisors

In the struggle with health care costs, diligence and ingenuity count

Organizations continue to grapple with providing health care access while limiting cost hikes.

A 2018 Gallagher survey of employers found that 74 percent consider health benefits cost management a top priority, yet 44 percent don’t have an effective strategy. These respondents also cited the high costs of medical services, prescription drugs and specialty drugs as their top three health care cost-management challenges.

Smart Business spoke with Joe Roberts, area vice president at Gallagher, about health care cost-management tactics.

Why should cost shifting be avoided?

The goal of effective cost management is to repurpose health care spend without disrupting premiums, coinsurance rates and deductibles. Cost shifting should be avoided because employees and their families suffer the financial pressure of higher expenses.

Some tactics that employers take to contain health care spend can actually weaken their ability to manage important health outcomes, like physical and emotional well-being. An example is an employee who responds to cost shifting by avoiding the expense of medical care. At worst, the employee could end up in the hospital for an untreated condition. At best, the employee may have escaped that outcome or the employer would have paid less for the hospital stay — if the plan incentivized regular care. Cost-management tactics may also affect morale, workplace culture and oher intangibles.

Employers should explore less common tactics that are gaining traction.

  • Provide employees with cost transparency tools.
  • Offer health care decision support.
  • Use a specialty pharmacy benefit manager.
  • Carve out pharmacy benefits.
  • Use reference-based pricing for health care services.

They also should closely review the language in vendor contracts.

How can data-driven insights help identify needed benefits changes?

Employers walk a thin line between providing access to medical and pharmacy coverage and containing health care costs. Data analysis helps them negotiate that narrow passage, but the trick is obtaining rich data and quality analyses. When a data analysis skims the surface, employers may fall short of their health care cost-containment goals. A comprehensive, strategic analysis can assist in several ways.

  • Identification of cost drivers: A standard analysis identifies how certain types of care affect cost; a deeper look detects what causes treatment trends. For example, an employer attributed an eight-year cost decrease to a well-being initiative, until a more complete analysis assigned greater impact to workers retiring.
  • Informed purchasing: Benefits trends sometimes entice employers to jump on board, like disease management programs focused on high-cost conditions like asthma. Targeted data analytics help employers understand not only the condition’s prevalence, but also whether costs are high enough to warrant a more robust disease management program.
  • Benefits design guidance: Specialty medications are expensive, but rebates help offset the costs. When making decisions about design, employers should analyze the implications of favoring one type of medication over another. Direct costs may be lower in the near term, but the loss of rebate could mean paying more over time.
  • Empowered decisions: Data help take the fear out of making decisions. Employers often shy away from choices that disrupt employee expectations and cause pushback, but this hinders innovative thinking. Data analysis can model the impact of benefit designs and pave the way for changes with lasting value.
  • Transparency: Employers purchase health care at a discount that may obscure the true costs. A larger discount looks good, but analysis can identify the unit price on which it’s based. A greater discount may not mean paying the lowest cost.

Too often, employers turn to familiar tactics and a standard-level analysis that doesn’t keep health care costs in check. When employers routinely dig into data and explore the value of newer tactics, they can curb perpetual financial challenges. By cost-effectively getting the right treatments to the right people at the right time, they also increase employee well-being.

Insights Employee Benefits is brought to you by Gallagher

Voluntary benefits cover the needs specific to your employees

Voluntary benefits are in high demand as employers recognize that a robust benefits portfolio helps them meet the diverse coverage needs within today’s workforce. The demand is also driven by the popularity of employee choice and low cost.

“There is no one-size-fits-all when it comes to meeting the needs of a multiple-generational workforce. Competition is fierce when recruiting and retaining the best talent. This makes voluntary benefits a must-have in today’s employee benefits packages,” says Michael Orangis, sales executive at JRG Advisors. “By offering a spectrum of coverage options, employers send the message, ‘We listen, we care and our company is worth working for.’”

Smart Business spoke with Orangis about how voluntary coverage options can enhance your overall benefits program.

What do companies need to know about voluntary benefits?

Voluntary benefits have proven to be a popular, cost-effective method for an employer to offer a broad palette of benefits that provide employees choice. These types of benefits feature guaranteed issue and simple enrollment. And because premiums are paid through employee payroll deduction, there are no checks to write, making these benefits easy to administer.

Further, difficult economic times in the wake of rising health care costs mean tough health plan design choices for business owners. For many, adding voluntary benefits to compensate for benefits cutbacks elsewhere or to enrich a health plan with a high deductible makes good sense.

How do these benefits work?

With a voluntary benefits portfolio, employees are encouraged to focus on their coverage and affordability needs. Instead of employer-sponsored group accident, critical illness, disability, life, vision and dental insurance, business owners see the wisdom of providing these benefits on a voluntary, a-la-carte basis for employees to choose.

Not only will offering voluntary benefits cost employers virtually nothing, it will also help to level the playing field with competing employers. And, employees gain access to unique types of insurance coverage at group rates that are lower in cost than buying on their own.

What should an employer consider when offering voluntary benefits?

First, employers must show their support for the benefits program if they want the employees to see the value of voluntary benefits for themselves and their families.

An employer should talk to employees to help determine what offerings would be most useful. Employers need to carefully examine their current benefits package to determine which benefits are popular and those that are not. Most importantly, employers need to determine the type(s) of voluntary benefits that offer the most value for the lowest cost. This is crucial to the success of the voluntary benefits program.

As the program is implemented, education is key. Employers should educate employees on what voluntary plans are available and the benefits of enrolling. Employers also should follow up with employees on a regular basis throughout the plan year to ensure they are satisfied, there are no problems and that no changes need to be made with the plans offered.

In the end, voluntary benefits are special because they meet the specific needs of the valued workforce. Employers can easily offer these benefits and keep costs down, while enhancing the complete package of benefits and coverages. Employees are able to make informed selections of benefits that meet their unique needs, ultimately increasing their engagement and satisfaction with the benefits program.

Insights Employee Benefits is brought to you by JRG Advisors

Is your insurance investment maximized?

Benefits costs and employee expectations continue to rise. So, the expertise offered from your benefits broker is a critical consideration.

“Most employers struggle to maintain insurance coverage and a healthy financial bottom line. Historically brokers earned your business by representing the lowest price. But in today’s employee benefits landscape, you need experienced representation that delivers beyond the lowest price insurance plans. Premium and fee pricing differentiation represented by agents and brokers is largely marginal.

“Today, the balance between coverage and cost is achieved by differentiation in consultative services, supplemental benefits and complementary products and services,” says Dennis Spingola, vice president of operations at JRG Advisors.

Smart Business spoke with Spingola about getting the most from the employee benefits broker relationship.

What can a consultative broker offer?

A consultative broker can do much more than just place your coverage. A consultative broker is a partner who learns about your challenges and needs, and supports you with a variety of resources and services.

Serving in an advisory role, a consultative broker develops the customized multiyear strategic plan to achieve your objectives now and into the future. The plan may include streamlining HR operations, implementing wellness platforms, and accessing data to support plan designs and funding alternatives. Above all, a consultative broker is your partner, educational resource and champion of your initiatives and requirements.

What is an example of a results-driven strategy?

An alternative premium funding arrangement is a popular strategy that supports health risk management and wellness initiatives. A consultative broker will carefully consider the many options of funding to ensure there is a plan to meet long-term goals for the business, while minimizing disruption to the workforce.

The inclusive funding approach can lead to informed, engaged and healthier employees and family members. Not only does this curb the costs of health care, it can lead to less absenteeism due to illness, more productive employees and improved morale. The consultative broker can combine the funding arrangement that works for you with a wellness program that includes everything you need to implement, monitor and measure outcomes.

How might a consultative broker handle risk management and HR support?

Proper management of Employee Retirement Income Security Act (ERISA) and Affordable Care Act compliance requirements is of significant importance. The consultative broker will remove the burden of complicated mandates and mitigate the risk of costly fines associated with a Department of Labor audit. Education is paramount in this area, so timely bulletins explaining new and changing rules and regulations are key. Working with a consultative broker who makes available an ERISA attorney is another differentiator for peace of mind and reduced overall costs.

HR responsibilities and benefits administration can be daunting. HR professionals are asked to do more than ever before. A consultative broker provides access to employee newsletters and benefits announcements, as well as sample documents and expert advice for crafting policies, forms, benefits summary statements, handbooks and more. Providing technology for online 24/7 access to an array of resources, coupled with an employee self-serve benefits portal, is a game changer.

Employers are faced with a variety of issues when it comes to running a successful enterprise. Choose a benefits professional who is consultative and equipped to provide the range of solutions and creative strategy that solves your challenges and supports your business objectives.

Insights Employee Benefits is brought to you by JRG Advisors