Presented by: Chad P. S chneider Broker Development Coordinator - - PowerPoint PPT Presentation

Presented by: Chad P. S chneider Broker Development Coordinator - Aflac

S mall Business Landscape (Fewer than 500 employees) • Represent 99.7 percent of all employers • Employ more than half of all private sector employees • Pay 44 percent of total U.S . private payroll • Produce 13 times more patents per employee than large firms • Generated 64 percent of net new j obs during the past 15 years

Employer-Paid Benefits Packages • On Average, smaller employers pay 18% more than large businesses for the same health plan because they cannot benefit from pooled risk the way a large company can. • From 1999-2007, healthcare costs have grown 30 times faster than the growth of real earnings. • Due to economic downturn, employers are looking for ways to enhance benefits package opening door for voluntary benefits.

HR Challenges • Rising Healthcare Costs • Cost shifting insurance premiums to employees • Growing financial stress amongst employees can decrease morale, satisfaction, and productivity. • Attraction & Retention for top talent is directly affected by companies benefits package.

Healthcare Reform & Voluntary Benefits • March 23, 2010 PPACA passes. What does this mean for voluntary benefits? • Voluntary benefits are not maj or medical coverage and are therefore excluded from adhering to reforms. • Voluntary indemnity plans are designed for helping with daily living expenses including out-of-pocket costs for accident and illnesses. • These plans do not have to adhere to: – Pre-existing conditions – Guaranteed Issue – Annual/ Lifetime benefits – Loss ratio requirements

Why Voluntary? • More than 40,000 employers across the country are considering adding voluntary products to their benefits package in the next five years. • 34% of small businesses do not currently offer any voluntary benefits. • LIMRA statistics show that 60% of employees today prefer to purchase insurance products at the worksite. • New worksite growth is averaging 15% each year. • Allows employees to have access to specialized products, favorable underwriting, dependent coverage, and convenient payment methods.

Why Voluntary cont. • 62% of all bankruptcies are due to medical expenses • 80% of those medically inspired bankruptcies are filed by people who have maj or medical insurance • Even for employees who miss work due to inj ury or illness, bills do not stop and mouths to feed do not go away.

Why Voluntary cont. • Insurance premiums paid 100% by employee through payroll deduction. • S ection 125 tax savings for both employer and employee. • Group Rates • Group & Individual plans • Portable • Favorable underwriting • Guaranteed Renewable • Wide array of products • Value-added services • Multiple enrollment platforms

Common Misperceptions about Voluntary Benefits #1 • Employers think that adding more benefits will be too complex and will only contribute to their ongoing HR administration burden. • In reality, employers do incur some administrative costs related to implementing and maintaining voluntary benefits but approximately 80% of employers who offer these types of benefits found that their administrative costs have only slightly gone up. • Most of the administration for voluntary benefits can be handled effortlessly with a good voluntary benefits partner.

Common Misperceptions about Voluntary Benefits #2 • Employers are concerned that they will expend effort by implementing new programs and their workers won’ t be interested enough to participate. • According to a 2010 survey done by Eastbridge consulting, 71 percent of employers expect their workers to be more enthusiastic about voluntary benefits in the next 12 months. • That enthusiasm translates into higher participation. • 47 percent of workers are willing to pay between $25 and $49 per month • One quarter of the workers are willing to pay $50 or more a month on voluntary benefits.

Common Misperceptions about Voluntary Benefits #3 • Employers are often concerned with the amount of time the enrollment process could take with their employees when implementing a new program. The time it takes to educate on maj or medical is already quite cumbersome. • Only 1 in 10 businesses believe that the time it takes for voluntary enrollment hampers productivity and takes time away from core business operations. • Prior to enrollment, putting together a well thought out strategy with your vendor and broker will eliminate this perception. • When choosing your voluntary vendor, find out what enrollment options are available.

Common Misperceptions about Voluntary Benefits #4 • Employers often believe that voluntary benefits are designed for only for large corporations. • The “ One size fits all” approach is long gone when it comes to voluntary benefits and a customized package can be tailor made to address each companies unique challenges. • Voluntary benefits can be added to companies with as little as 3 employees.

Benefits to Employer • Complements and supplements existing coverage without increasing premiums. • Minimal administration • 100% voluntary participation for employees • No ERIS A involvement • Policies not subj ect to COBRA • Promotes goodwill amongst employees

Voluntary Products Available • Disability Insurance • Life Insurance • Accident Insurance • S ickness Insurance • Cancer Insurance • Critical Illness Insurance • Dental Insurance • Vision Insurance • Intensive Care Insurance • Hospital Confinement Insurance • Lump S um plans

Voluntary Products Available • Pet Insurance • Discount Cards – TeleDoc S ervices – Rx discounts – Chiropractic discounts – Etc. • Identity Theft Protection

Value-Added S ervices • Benefit S tatements • Benefit booklets/ employee education • COBRA Administration • Consolidated Billing • FS A Administration • Express Billing Options • HR Consulting S ervices • 401K Administration • 403B & 457 Administration

Educating Employees • According to U.S . Department of Labor it costs a company one-third of an employees annual salary to replace him or her. • Companies can save significant costs by merely educating their workers about benefits. • 49% of employers agree that a well educated workforce leads to reduced turnover in the workplace. • Companies can save thousands of dollars between educating employees and pre-tax savings. • Communicate benefits all year, not j ust at open enrollment. Off-anniversary voluntary enrollments are quite common.

Enrollment Platforms • Paper enrollment • Laptop face-to-face enrollment • Web Enrollment • Call center enrollment • Hybrid enrollment (utilizing multiple options) • Core enrollment technology • Coming S oon – Web enrollment utilizing avatar’ s

5 S teps To A S uccessful Enrollment • S tep 1: Determine enrollment needs – Choose a method that is in line with your companies culture. – Consider your employee base. Are the maj ority of your workers desk-bound or in the field? – S urvey your employees. A recent study showed that 62% of companies did not input or feedback with regards to their benefits package. • Many vendors will conduct a survey on behalf of your company.

5 S teps To A S uccessful Enrollment • S tep 2: Conduct an enrollment planning session – Collaborate with your enrollment representative and draft a detailed timeline. Commit to sticking to deadlines to ensure a successful implementation. – Identify roles and responsibilities both internally and externally. Your enrollment representatives can act as an extension of HR and assist you with education to employees. – Identify which communication tools you are going to utilize for enrollment to make sure your employees are well informed.

5 S teps To A S uccessful Enrollment • S tep 3: Pre-enrollment approvals, Trouble-S hooting, Training – Conduct a mock enrollment training session to trouble shoot any roadblocks or enhancements that need to be made. – Have key HR and company officials involved to make sure they are comfortable with enrollment methods. – Have frequent and clear communication with your broker, voluntary carrier and HR. Weekly strategy calls to check in have been proven to work.

5 S teps To A S uccessful Enrollment • S tep 4: Conduct a Quality Enrollment – The most important rule during a live enrollment is to provide employees with as much guidance and support as they need. – For one-on-one enrollments have appointments with employees scheduled before you arrive. These can be scheduled in pre-enrollment meetings or communication. Make sure to have a sufficient amount of enrollers present. – For enrollments that do not utilize enrollers, consider call center for additional support.

5 S teps To A S uccessful Enrollment • S tep 5: Perform Post-enrollment Debriefing – It is important to review enrollment once complete to identify what went well, areas that need improvement, and agree on servicing/ follow-up visits. – Review post-enrollment materials provided by carrier and evaluate effectiveness. – Communicate with your enrollment representative when benefits change and new products are needed to evaluate future enrollments