A Value-Added Mix
By Paul Policella
and Karen Gustin, LLIF, Ameritas Group

The cost of health-care benefits is among the top concerns for American businesses today. With insurance costs having increased more than 140 percent during the past 10 years, employers are worried about their benefits budgets. Many are re-evaluating their employee benefit plans. However, before you make drastic changes to your plans, identify your benefit priorities and balance them with employees’ needs to ensure you offer the best mix of benefit options that provide high value to you and your employees.
Know what you want and why
Take a few minutes to define why you offer benefits to employees and what you hope the plans will accomplish. For example, are specific types of plans needed to help you compete with other employers for quality employees? Or does management want to take care of employees and provide specific benefits or coverage levels?
Gather key facts and statistics from utilization reports provided by your insurance carrier(s) for the plans you offer:
• percent of employees participating in benefit plans
• percent of employees selecting single vs. family coverage
• average age of the employee population
• features used most by age group
• types of claims filed
• on-the-job employee injuries, type, and cause
• reasons for employee absences/sick days
• number of employees and dependents exceeding the annual maximum
As you review the details, you will notice several needs and trends important to the design of employee benefit plans.
Understand health needs of participants
Next, review the health history of employees and their dependents:
• Do employees generally take good care of themselves?
• How much do employees and dependents spend for health-care services?
• What are the major health issues, procedures or cost allocations for these groups?
• Does current coverage encourage preventive procedures for major health issues identified?
• How much does the company spend on employee coverage for all plans? And what about for dependent plan options?
Analyze the information gathered. Are plan participants generally healthy, or are there specific health issues that could be addressed through wellness education and incentive programs to encourage healthier lifestyles? Remember that healthier employees may result in fewer claims filed for major health-care expenses.
Survey employees on health-care needs and benefits
Ask for employees’ opinions on current insurance plans, as well as those offered by competitors. Find out if the benefits offered are important to them, and why. Some employees may want specific benefits for their families; however, they will rarely use the benefits themselves.
Topics to explore through the survey may include:
• Understanding the perceived value and expectations of health-care benefits.
• Identifying the current satisfaction level with benefit plans.
• Evaluating coverage of benefit plans.
• Identifying the top 10 health-care needs of employees and their dependents.
• Soliciting opinions on employer versus employee contributions to premiums.
• Recommending changes in current benefits.
• Understanding employees’ comfort level in selecting benefits and dependent care options.
• Gathering ideas for the best ways to communicate and help employees understand their benefits.
Offering benefits: employee participation
Employees want a variety of choices for their benefits, but they also want the options thoroughly explained. They are often confused by the number of options and plan features, and struggle to make choices that provide the quality of health care they expect, at the best value for their individual circumstances.
National research indicates that when employees evaluate benefit choices, about one-fourth ask friends and family members for advice, while about half choose not to consult anyone and make random selections. Most full-time workers spend less than 30 minutes when making benefits decisions (Towers
Offering benefits to employees doesn’t mean they will sign up for them. They need to understand their options and the value of the available insurance plans.
Plan for benefits communication. Develop a plan for communicating benefits and costs to employees, especially for those needing dependent coverage. Create a list of key messages to share through a variety of methods and group situations. Outline why benefits are offered, how plans were designed, and options for paying premiums (such as a Section 125 plan). Explain the importance of preventive care options that assist employees in potentially lowering their overall health-care costs. This message is especially important for those employees who avoid visiting their doctor or dentist for routine care.
Keep the messages simple and use graphs and charts. Show employees the value of benefits from a financial perspective — compare the costs of benefit premiums to the expenses they might incur without insurance, or create graphs that compare national benefit expenses to the cost of the package employees have been offered. Although benefits are important to employees, these messages must break through the clutter of other information they receive.
Work with a quality insurance partner
Since many benefit plans are complex, you will want to work with brokers/producers or consultants and insurance carriers you can trust to provide accurate information, honest advice and solutions-based plans.
You need strategic partners who will offer a variety of solutions to fit your needs, provide an analysis of health-care benefits offered by competitors, identify costs and trends, and design appropriate plans.
Every insurance carrier has different strengths and capabilities. As you evaluate your carrier choices, look for those experienced in working with companies similar in size and market scope to yours. Evaluate their business philosophies, plan selection, flexibility in plan design, depth of network providers, and claims processing and customer service. As you review the needs of your employee group, your business marketplace and expectations for growth, you may decide that it’s important to work with carriers that offer a spectrum of plan design options so benefits can be easily modified as needs change.
Offer the right mix
Benefits have changed dramatically over the past few years, and more changes are on the horizon. There are many different plan options available today. Are the benefits you currently offer employees the right fit? Are they meeting your expectations? If not, take control of your benefits by working with strategic insurance carriers that offer solutions that match your needs, and will work with you to provide the right mix of benefit options for your employees. Once the right benefit plans are in place, help employees familiarize themselves with their choices for maximum participation.
Paul Policella is regional vice president-northeast sales and Karen M. Gustin, LLIF, is vice president-group marketing and managed care for Ameritas Group in Lincoln, Nebraska. For assistance in understanding insurance plans and carrier choices, or comparing coverage options, contact the Ameritas Group marketing department at 800-776-9446.