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Small Business Association Health Plans 101

Employee Benefits, Health Care, HR, Human Resources, Insurance, Health Care Cost

For years, healthcare costs have been increasing for employers. The National Business Group on Health shows that, since 2015, healthcare costs have increased by an average of 6% per year for large employers if cost management adjustments aren’t put into place, and by an average of 5% after cost management adjustments are put into place.

Based on the 2020 Large Employers’ Health Care Strategy and Plan Design Survey, which studied 147 large, self-insured global and multi-state employers that provide healthcare coverage to over 15.6 million employees and dependents, the total cost of health care for large employers is predicted to increase to $15,375 per employee in 2020, compared to $14,642 per employee in 2019.

by Chris Freitas

Taking a Proactive and Holistic Health Approach to Well-Being

Employee Benefits, Health Care, HR, Human Resources, Insurance, Health Care Cost

Employers were once focused on the bottom line and cost savings when it came to healthcare and employee wellness. Healthcare costs have continued to increase since 2015 by an average of 6% for large employers who do nothing to curb costs and by an average of 5% for large organizations that do implement cost savings strategies. Healthcare has a significant impact on an organization’s bottom line, so finding ways to reduce costs makes sense. Organizations are realizing, though, that cost savings should not correlate with a degradation of the health benefits offered to employees.

Cost savings isn’t the key factor when it comes to employee wellness. Employees who feel well physically, mentally, and emotionally, are happier and more productive. Per the Internal Foundation of Employee Benefit Plans (IFEBP) Workplace Wellness Trends 2019 Survey Report, 82% of employers are motivated to improve overall worker health and well-being, and only 18% hope to minimize healthcare costs. This is a huge shift away from the trends of the past few decades when cost was the driving factor.

by Chris Freitas

Wellness Programs: Are They Worth It?

Employee Benefits, Health Care, HR, Human Resources, Insurance, Health Care Cost

Wellness programs have garnered a fair amount of attention in recent years. With the consistent increase in healthcare costs and premiums from year to year, some companies have turned to wellness programs as a way to reduce healthcare and medical costs. Other organizations implement wellness programs with hopes of seeing an increase in work productivity and morale. Some implement them as part of their employee value proposition to attract and retain top talent in one of the most competitive job markets we’ve seen in years, while also providing benefits options that meet the needs of the various demographics in the workforce today. Regardless of why an organization is implementing one, the question that eventually comes up is, “Are wellness programs worth it?”

Many studies have been conducted over the past decade in an attempt to answer that question. The results of these studies have been mixed. A 2010 volume of Health Affairs reported that medical costs fall by approximately $3.27 for every dollar spent on wellness programs. It also stated that an estimated savings of $4.50 in medical expenditures were seen by the Citibank Health Management Program for every dollar spent. Further, Bank of America, California Public Employees Retirement System, and Johnson and Johnson wellness program case studies also reported similarly estimated health care savings. The concern with these studies, as well as similar studies since then is the lack of a control group to support empirical evidence to estimate an employer’s return on investment.

In the past few years, researchers have attempted to study wellness programs using a control group. A randomized clinical trial conducted by the Journal of the American Medical Association (JAMA) from 2015 to 2016 found little financial return on investment in the short term for a BJ’s Wholesale Club wellness program that focused on stress reductions, physical activity, and nutrition. The study tracked approximately 4,000 BJ’s employees.

Another study by the University of Illinois at Urbana-Champaign, The Illinois Workplace Wellness Study, took a look at a workplace wellness program in 2016 and 2017. The program was available to 3,300 university employees, of which 56% participated after program eligibility and financial incentives were randomly assigned. After one year, researchers found that healthcare claims and plan premium costs were not reduced as a result of the program.

by Chris Freitas

Creating a Flex Work Policy for Your Company

Employee Benefits, Health Care, HR, Human Resources, Insurance, Health Care Cost

Work-life balance is a goal for individuals from all the generations that make up today’s workforce — from baby boomers, who want to care for aging parents and spend time with their grandchildren, to the Gen Zers, who consider work-life balance to be the second most important value proposition for employers to offer. As a result, employers have to step back and evaluate ways to support employees in achieving the work-life balance they desire.

More and more employers are offering some type of flexible schedule policy to address employees’ work-life balance needs. A 2015 Society of Human Resource Management (SHRM) survey showed that 54% of organizations offer some type of flexible schedule, and 60% offer some sort of telecommuting policy. A 2018 poll by Flex + Strategy Group showed that 98% of employers offered some type of broadly defined flexible hours.

The 2017 State of Telecommuting in the U.S. Employee Workforce Report showed that 2.9% of the workforce, or 3.9 million employees, work from home at least 50% of the time, compared to only 1.8 million in 2005. That’s a 115% increase in telecommuting and remote work from 2005 to 2017. The report also showed that the average telecommuter is 46 years old, which falls within the Generation X population, a generation that’s older than the millennial and Generation Z demographics we think of when we think of telecommuting.     

by Chris Freitas

New Coronavirus Relief Law Impacts Health Plans and Leave Policies

Employee Benefits, Health Care, HR, Human Resources, Insurance, Health Care Cost

Here's an update from our ERISA attorney's office, Kutak Rock, concerning recent legislation changes stemming from the recent COVID-19 pandemic: 

On March 18, President Trump signed the Families First Coronavirus Response Act (the “Act”) into law, which calls for free COVID-19 testing, new paid leave entitlements and tax credits to help employers pay for such leave. The following summarizes the Act’s important health and leave-related provisions.

by Chris Freitas

Designing a Time Off Program to Keep Up With the Times

Employee Benefits, Health Care, HR, Human Resources, Insurance, PTO, Health Care Cost

The workforce of the U.S. is more diverse than ever before. For that reason, it’s necessary that employers design a time off program that caters to the cultural and demographic diversity of their employees. Otherwise, retention, job satisfaction, and work productivity could take a hit. 

As a result of this cultural and demographic diversity, time away from work is one of the hot benefits topics for the HR world. It’s no secret that millennials entering the workforce believe that flexibility and time off are important factors when considering a job opportunity and employer. But it’s not just millennials who are seeking time off throughout the year: The baby boomer, Gen X, and Gen Y populations are also seeking a better work-life balance. These earlier generations may want time off to spend with children or grandchildren, and — like millennials — simply to enjoy life. As a result, organizations are looking at their time-off policies to find ways to meet the requests of their employees.

Religious diversity also prompts conversations about time-off policies. Employees are speaking up and requesting time off to practice their religious beliefs and observe their holidays. Though many organizations still offer the same standard eight to 10 holidays off throughout the year, some organizations are looking at ways to offer floating holidays or to allow employees to trade in holidays. These options allow employees to take time off for holidays of their choice.  

Per SHRM, statistics show that employees are remaining in jobs for only 18 to 36 months instead of the historically standard three to five years. Employees don’t like the idea of starting with a limited number of days off and not acquiring more until they meet a particular milestone, which is often three to five years in many organizations.

by Chris Freitas

Understanding Medical Plan Benefit Options

Employee Benefits, Health Care, HR, Human Resources, Insurance, Health Care Cost

Medical costs are one of the leading causes of bankruptcy in America, accounting for 62% of cases, according to a Harvard University study reported by Forbes. Medical costs are also one of the top stressors for Americans. In the 13th annual Stress in America survey, two in five adults reported that they previously had difficulty paying for health care, and more than 60% surveyed shared that medical costs are a source of stress for them.

Medical benefits give employees peace of mind by allowing them to take care of themselves and their families. It’s understandable, then, that medical benefits rank high on an employee’s priority list when considering employment opportunities. It’s also understandable that an employer’s benefits plan offerings tie into its employee value proposition. 

There are many factors to consider when deciding on the types of medical plan benefits to offer to employees. Depending on the goals and budget of an organization, there may be several options to choose from, including traditional co-pay plans, high deductible plans, plans accompanied by a Health Savings Account (HSA) or Health Reimbursement Account (HRA), supplemental insurance, catastrophic insurance, critical illness insurance, mental health benefits, dental benefits, and vision benefits. There are also minimum requirements for employers to consider based on certain local and state laws, as well as the Federal Affordable Care Act.

A benefits brokerage firm like KBI can help you determine the best options for your organization and learn about the many health benefit plan options available to you. Continue reading for an outline of some of the benefits plan options organizations can offer as part of their benefits package. 

by Chris Freitas

Does Your Organization Provide Easy Access to Employee Mental Health Services?

Employee Benefits, Health Care, HR, Human Resources, Insurance, Health Care Cost

Due to the growing awareness of the impact of mental health on well-being and productivity in the workplace, employers are thinking more about the behavioral health services they offer to their employees. With the shift in focus to mental health solutions for employees, we’ve seen an expansion of mental health services offered under traditional medical plans, an increase in partnerships between mental health and medical carriers, an increase in virtual or tele-health counseling solutions, and a proliferation of strategies to provide targeted and readily available mental health solutions to employees on-site or nearby. More and more employers are also committing themselves to better educate employees about mental well-being and mental health services.

by Chris Freitas

10 Steps to Design a Benefits Plan

Employee Benefits, Health Care, HR, Human Resources, Insurance, Health Care Cost

Regardless of your company’s size, creating a benefits strategy is essential to meeting the needs of your employees and your organization’s budget. Benefits programs are often one of the most substantial costs that employers face. From a monetary perspective, benefits account for approximately 40% of the total compensation package offered to employees.

Allowing your employees to select the personal benefits available to them will hopefully improve retention rates. But they can also cost you due to turnover from employees who leave for a better benefits package. In an SHRM job satisfaction and engagement survey, close to one-third of the respondents shared that they would likely look elsewhere for a job in the next 12 months due to their current employer’s benefits package. To avoid the latter scenario and to create a benefits plan to meet your organization’s budget, consider the following steps as a guide.  

by Chris Freitas

Tips to Make Benefits Education Important and Available to Your Employees

Employee Benefits, Health Care, HR, Human Resources, Insurance, Health Care Cost

Employee benefits offerings and programs vary between employers; however, standard offerings include medical insurance, retirement plan benefits, life insurance, disability insurance, paid time off, tuition reimbursement, dental insurance, and vision insurance. Many companies offer additional benefits options and company perks. It’s common knowledge that benefits are important to employees, so it might be surprising that employees often don’t know all of the benefits and perks that are available to them through their employer. It’s also common for employees to take a passive role when selecting their benefits.

Though typically not to the same degree, benefits offerings can vary from year to year as much within a single organization as they do between different organizations. The variation and yearly changes can make understanding benefits confusing for employees. Considering that benefits cost an average of 40% of an employee’s total compensation package and are tied to a company’s employee value proposition, we encourage employers to take a vested interest in helping employees understand their benefits package. Poor benefit plan choices can cost both the employee and employer money, an avoidable scenario if proper benefits education ensues.

As shared by SHRM (Society for Human Resource Management), in a survey sponsored by the disability provider Unum, 79% of the 1,521 adult workers who responded and rated their benefits education as very good to excellent also rated their employer the same. In the same survey, only 30% of respondents who rated their benefits education as fair or poor rated their employer as very good or excellent. These results imply that employee benefits education is linked to the employee’s perception of their employer and ties to overall job satisfaction.

With years of research and experience in supporting clients with benefits implementation and management, we understand the common challenges that come with employee engagement. Fortunately, we know a thing or two about how to support employers to move through and beyond these challenges.  

by Chris Freitas