yuzheng liu - don guanella village
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Benefit Analysis: Don Guanella Village Page 0
Benefits Analysis:
Don Guanella Village
Developmental Programs
Part I: Benefit Matrix
Part II: Inventory of Benefits
Yuzheng LiuCharles YerkovRMI 3501
Dr. DrennanFall 2011
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Benefit Analysis: Don Guanella Village Page 1
Table of Contents
Benefit Matrix - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2
Summary Of Benefits - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - -3Inventory of Health Care Benefits - - - - - - - - - - - - - - - - - - - - - --4
Introduction - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -4
Medical Expenses- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -4
Independence Blue Cross Personal Choice-- - - - - - - - - -- - - - - - - - 4-5
Keystone Health Plan East HMO - - - - - -- - - - - - - - - - - - - - - - - - - - - 5-6
Keystone Point-of-Service (POS)-- -- - - - - - - - -- - - - - - - - - - - - - - - --6-7
Dental - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --7-8
Concordia Flex Dental Program - -- - - - - - - - - -- - - - - - - - - - - - - - - ----8
Aetna Dental Maintenance Organization (DMO) - - - - - - - - - - - - - - - -8
IBC Vision Program- - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --8Standard Prescription Program -- - - - - - - - - - - - - - - - - - - - - - - - - - - - ---- -9
Loss of Income: Death - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --9
Life Insurance- - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -9
Loss of Income: Short Term Disability-- - - - - - - - - - - - - - - - - - - - - - - - ---10
Long Term Disability - - - - - - --- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -10
Retirement Benefits - - - -- - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 11
403 (b)- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 11
Other Exposures - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -12
Educational Assistance --- -- - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - ---- 12
Employee Assistance Program- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -12
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Benefit Analysis: Don Guanella Village Page 2
Benefit Matrix
Exposure Analysis for Don Guanella Village Developmental Program
Loss Exposure Provided Coverage / Benefit Provided
Loss of Income: Medical Expenses
Hospital / Physician Yes Personal Choice PPO, Keystone POS, Keystone HMO
Vision Yes All health plans*
Prescription Yes All health plans*
Major Medical Yes Keystone HMO
LTC Yes Long-Term Care Program
Retiree Health Care Yes COBRA
Dental Yes Personal Choice PPO, Supplemental Dental Insurances***
Loss of Income: Death
Non-Accidental, Non-Occupational
Death
Yes Term Life Insurance, 403(B) plan, OASDI
Accidental Death Yes Term Life Insurance, 403(B) plan, OASDI
Occupational Death Yes Term Life Insurance, 403(B) plan, OASDI, Workers
Compensation
Loss of Income: Unemployment
Unemployment Yes Unemployment Insurance through the state of Pennsylvania
Loss of Income: Disability
Short Term, Non-Occupational Yes STD, 403(B) plan, OASDI, Paid Time Off
Long Term, Non-Occupational Yes LTD, 403(B) plan, OASDI
Short Term, Occupational Yes STD, 403(B) plan, OASDI, Workers Compensation
Long Term, Occupational Yes LTD, 403(B) plan,OASDI, Workers Compensation
Loss of Income: Retirement
Retirement Yes 403(B) plan, OASDI
Other Loss Exposures
Educational Assistance Yes Dependent, Spouse Benefits under AD&D Insurance
Legal Expenses Yes Employee Assistance Program**
* = Participants in any of the three medical plans (Personal Choice PPO, Keystone POS, Keystone HMO) are
automatically enrolled in the Vision and Prescription Drug Plans.
**= EAP provided by University of Pennsylvania, details in Part II (inventory of benefits).
***=Provided and administrative by United Concordia, a supplemental coverage among plans described in *.
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Benefit Analysis: Don Guanella Village Page 3
Summary of Benefits
Benefit Plan A.M. Best
Rating
Financing Funding Eligibility
IBC Personal Choice
PPO(comprehensive)*
N/A Contributory Fully
Insured
Full-time Active Employees
and Dependants
IBC Keystone POS
(comprehensive)*
N/A Contributory Fully
Insured
Full-time Active Employees
and Dependants
IBC Keystone HMO
(comprehensive)*
N/A Contributory Fully
Insured
Full-time Active Employees
and Dependants
CIGNA Long Term
Care
bbb
(Adequate)**
Contributory Fully
Insured
Full-time Active Employees
and Dependants
IBC Supplemental
Major Medical***
N/A Fully Contributory Fully
Insured
Full-time Active Employees
and Dependants
Aetna Dental PPO A (Excellent)** Contributory Fully
Insured
Full-time Active Employees
United Concordia
Flex Dental Program
A- (Excellent)** Contributory Fully
Insured
Full-time Active Employees
UNUM STD bbb
(Adequate)**
Non-contributory Fully
Insured
Full-time Active Employees
UNUM LTD bbb
(Adequate)**
Non-contributory Fully
Insured
Full-time Active Employees
UNUM Term LifeInsurance
bbb(Adequate)**
Fully Contributory FullyInsured
Full-time Active Employees
Unemployment
Compensation
N/A Contributory Fully
Insured
Full-time Active Employees
VALIC 403(b) N/A Contributory Fully
Insured
Full-time Active Employees
PENN Behavioral
Health EAP
N/A Fully Contributory Fully
Insured
Full-time Active Employees
Educational
Assistance
N/A Non-contributory Self-funded Full-time Active Employees
Paid Time Off N/A Non-contributory Self-funded Full-time Active Employees
*= Comprehensive plan means the referred plan includes vision and prescription drug.
**= Source of A.M. Best Rating ishttp://www.ambest.com/
***= The supplemental Major Medical Plan is managed Independence Blue Cross. Employees may choose this
optional benefit during open enrollment in the plans provided by IBC, which is included in the alternative PPO plans,
Keystone POS and Keystone HMO.
http://www.ambest.com/http://www.ambest.com/http://www.ambest.com/http://www.ambest.com/ -
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Benefit Analysis: Don Guanella Village Page 4
Inventory of Health Care Benefits
Introduction
Don Guanella Village is headquartered in Philadelphia and provides services
for intellectually disabled boys. The organization has 250 full time employees and
roughly 300 total employees. The organization offers a competitive employee
benefits package in order to maintain and attract competent employees.
Don Guanella offers coverage through a variety of Independence Blue Cross
(IBC) programs. IBC is the leading provider of employee health benefits in the
Philadelphia region and has offered quality health care products and services for over
65 years.
Medical Expenses
Independence Blue Cross Personal Choice
Don Guanella offers their employees preferred provider organization (PPO)
coverage through Independence Blue Cross. The NCQA issued a full rating,
which is the highest rating, to Personal Choice, and it was the first PPO in
Pennsylvania to be designated as such. The plans are beneficial to the employees
because IBC uses community rating. To enroll, one must be a full-time employee
with three months tenure. If an employee meets the two requirements, they have the
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Benefit Analysis: Don Guanella Village Page 5
option to enroll in any of the fully insured plans. Upon enrollment in a plan,
employees make their contributions via payroll deductions on each check they receive.
Employees have the choice between two plans, Personal Choice 5 and Personal
Choice 10/70/20, and the plans are nearly identical besides out of pocket expenses and
deductibles. Under both PPOs from IBC, employees have the freedom to seek care
in-network and out-of-network. IBC provides a list of the network, which includes
over 58,000 doctors and 100 hospitals, on their website. There is no need to select a
primary care physician to coordinate care and the insured is free to visit specialists
directly without a referral. Out-of-pocket expenses are greater for out-of-network
providers. The insured must also file a claim to be reimbursed for out-of-network
provider visits, whereas there is no requirement to file a claim for in-network provider
care. As an example of differences in the plans, primary care visit co-payments cost
the insured $5 (Personal Choice 5) vs. $10 (Personal Choice 10/70/20). Also, the
out-of-network coverage for Personal Choice 5 is 80% whereas it is 70% for Personal
Choice 10/70/20. In general, the benefits provided in the 10/70/20 are more
comprehensive than the more basic 5 plan. Only full-time employees are eligible for
these plans. A full-time employee is defined as an employee who works 65 hours
over each two week period.
Keystone Health Plan East HMOAnother option provided by Don Guanella is an HMO through Keystone, which
is a subsidiary of Independence Blue Cross. The plan provides a complete range of
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Benefit Analysis: Don Guanella Village Page 6
benefits, and the insureds overall medical needs are coordinated by a Primary Care
Physician. The network to choose a Primary Care Physician includes over 22,000
doctors and 100 hospitals. A referral is needed for specialty care, and it is
coordinated by the Primary Care Physician. Key features of the plan include no
claims forms, no deductibles, and low out-of-pocket expenses. The plan also
provides access to programs to treat chronic illnesses and access to wellness programs
at no additional cost. The copayments for all of the care or visits provided in the
plan are $5, except for emergency room care which is $35. The emergency room
care fee is waived if the insured is admitted to the hospital. The plan also covers 100%
of hospital care, lab work, and x-rays. In the even that your PCP is not available,
there is always a physician on call to assist an insured. The plan is fully insured and
community rated. The plan is offered to full-time employees with three months (90
days) of tenure. A full-time employee is defined as an employee who works 65
hours over a two week period. Employees pay for the plan on a contributory basis
via payroll reduction.
Keystone Point-of-Service (POS)
Don Guanella offers a Keystone Point-of-Service plan which offers all of the
benefits of the Keystone HMO, but features the freedom to access any physician or
hospital without a referral. The plan is fully insured and community rated. The
out-of-pocket costs for covered services are very minimal, if there is any cost at all.
Insureds are allowed to visit any doctor or hospital through the self-referred care
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Benefit Analysis: Don Guanella Village Page 7
feature. The costs of the medical expenses are shared by the insured through
deductibles and coinsurance provisions. The network of doctors available as
Primary Care Physicians includes over 20,000 doctors and 100 hospitals. Although
a referral is not required, an insured who obtains a referral for specialty care receive
the maximum benefit level. The plan also features wellness program access at no
additional cost and makes programs available that manage chronic illnesses. Claims
filings are not required for referred care, but a claims filing is necessary when seeking
self-referred care. Co-payments under the plan are $5 except for emergency care,
which is $35. There is no deductible for a referred care, but for self-referred care
there is a $200 deductible per individual. The out-of-pocket maximum costs range
from $650 to $1000. The plan is financed on a contributory basis and is made
available to all full-time employees with three months (90 days) of tenure. A
full-time employee is defined as an employee who works 65 hours over a two week
period.
Dental
Concordia Flex Dental Program
Don Guanella offers two options for dental care. They offer Concordia Flex
Dental, which is a supplemental plan from IBC. The program is a traditional
fee-for-service dental program and features freedom of provider choice. The
network includes 4,800 dentists and specialists to choose from. Cost savings for the
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Benefit Analysis: Don Guanella Village Page 8
program average 30%. Savings are greater when an in-network provider is utilized.
The plan is offered to full-time employees and is offered on a contributory basis.
Aetna Dental Maintenance Organization (DMO)The other dental care option offered by Don Guanella is provided by Aetna. The
DMO provides cost-effective care through a primary care dentist (PCD). There is a
co-pay of $10 per visit and a referral is required if the insured seeks care from a
provider outside of the DMO network. There is no annual maximum limit for the
plan and there are no deductibles. The plan is offered to full-time employees and is
offered on a contributory basis.
IBC Vision ProgramDon Guanella offers a vision program that is administered by Davis Vision. The
comprehensive vision care benefits of the plan include eye exams, eyeglasses, and
contact lenses. Certain eyeglasses approved by Davis are paid-in-full, and if an
insured wishes to obtain glasses that are not paid-in-full the plan will cover a portion
of the cost. The plan also includes discounts for laser eye correction and
replacement costs for broken or damaged lenses or eyeglasses. Davis Vision carries
an A.M. Best rating of A. The plan is fully insured and made available to full-time
employees. Full-time employees can enroll in the plan after three months (90 days)
of tenure.
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Benefit Analysis: Don Guanella Village Page 9
Standard Prescription Drug ProgramDon Guanella offers a prescription drug plan for employees through IBC. An
insured shares the costs through a two-tiered copayment arrangement.
Non-participating pharmacies copayments are determined using a designated cost
percentage and participating pharmacies have standard generic or brand copayments.
There is no need for an insured to pre-select a pharmacy, and the network includes
over 60,000 pharmacies. Claims filings are not required for participating pharmacies
and eligibility at a desired pharmacy can be conveniently verified online. The plan
is offered on a contributory basis. Employees become eligible after three months (90
days) of tenure.
Loss of Income: Death
Life Insurance
Don Guanella offers its full-time employees Optional Term Life Insurance to
address the potential loss of income due to non-accidential/non-occupational death,
accidental death or occupational death. The chosen term life insurance, provided by
Unum, is Annually Renewable Term Insurance. Each year, its policies cover $10,000
per individual at a fee of $30 per policy. This Optional Term Life Insurance is an
employee-pay-all, or fully contributory, benefit.
Loss of Income: Short Term Disability
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Don Guanella provides all employees with Short-Term Disability (STD)
Insurance through Unum. All employees are eligible upon hiring. AM Best has
Unum rated as adequate (bbb). The plan is fully insured, voluntary, and offered on a
non-contributory basis. Short term disability coverage provides benefits when you
are unable to work for a short period of time due to a covered illness or injury.
Employees are covered for 30-60% of weekly eligible compensation for up to 90 days.
Don Guanella also offers 10 paid holidays, 2 weeks of vacation, 12 sick leave days,
and 3 personal days per year.
Long Term Disability
Long-Term Disability Insurance is provided by Don Guanella through Cigna. It
is offered to all employees. The plan is fully insured and offered on a
non-contributory basis. If an employee is unable to work after the 90 day period for
STD, they can become certified to receive LTD benefits. The plan will provide
compensation of 50% of eligible weekly salary to an employee.
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Retirement Benefits
403 (b)
Full-time employees of Don
Guanella are eligible to participate
in the organizations 403(b) plan
after three months (90 days) of
tenure. 403(b) plans are
reserved for public education
organizations, non-profit
employers, hospitals, and
self-employed ministers. An
employee must wait 5 years to be 100% vested for matching contributions made by
Don Guanella. The vesting schedule incrementally increases by 25% each year.
Pre-tax contributions made to the plan can be made up to $15,500 each year.
The employer match limit is $46,000, so in other words the employer can add
up to another $30,500 per year. In addition, you can contribute an extra $5,000 per
year after the age of 50
Vesting Schedule
Years of
Service
Percentage
Less than 2
0%
225%
350%
475%
5100%
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Benefit Analysis: Don Guanella Village Page 12
Other Exposures
Educational Assistance
Don Guanella has an Educational Assistance Program that provides any degree
seeking employees $500 of assistance per semester. The benefit is extended to all
employees who have 1 year of tenure. An employee seeking to benefit from the
coverage must be approved by management and maintain a 2.0 GPA. The plan is
offered on a non-contributory basis and is self-funded.
Employee Assistance Program
Don Guanella offers an EAP through the University of Pennsylvania Behavioral
Health. The EAP is made available at no extra cost to all employees upon hiring.
Penns EAP provides counseling for professional and personal life issues.
One-on-one sessions are offered and fully covered by Don Guanella. The program
can be used to treat serious personal or professional concerns, such as general anxiety,
depression, substance abuse, burnout, coping with illness, the loss of a loved one,
relationship challenges, or resolving interpersonal conflicts. All information is kept
completely confidentially so that the employer is not made aware of who has been
seeking assistance. Don Guanella covers all costs for the EAP via a flat monthly
rate.
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Benefit Analysis: Don Guanella Village Page 13
Don Guanella Village
Developmental Programs
Part III: Benefit Analysis
TUid: 912580772TUid : 912459138RMI 3501
Dr. DrennanFall 2011
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Table of Contents
Introduction - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2
Overall Consideration in Design- - - - - -- - - - - - - - - - - - - - - - - - - - -3Goals - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --4
Demographics - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --4
Problems, Issues, Concerns, and Considerations in the Design of Health Be
nefits
Problems, Issues, Concerns, and Considerations in the Design of Other Non
-Retirement Benefits
Conclusion
A Letter of Appreciation- - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Appendix
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Part III Decision Making and Plan
Design Analysis
_____________________________________________________________________________________________________________________________________________________________________
Introduction
Headquartered in suburban area of the Greater Philadelphia Region, Don
Guanella Village (DGV) is an independent non-profit organization established under
The Archbishop Christian Church of Central Philadelphia. It has provided services for
intellectually disabled young men since the late 1950s. The organization has 250
full-time employees and roughly 300 employees in total operating in local areas such
as Delaware, Philadelphia and New Jersey. Currently, almost all of DGVs full-time
employees are participating in health plans and other provided benefit plans.
Throughout this project, we interviewed Michael Schardt. Mr. Schardt is the
Human Resources Director and Employee Benefits Specialist of Don Guanella
Village, who works directly with the chief benefit designers of the organization and
shares a fair amount of responsibilities including: benefits plan design, administration,
plan distribution, communication and regulatory compliance. He and his colleagues
work hard to the make sure employees receive satisfying benefit packages for those
who need them. With his help and in-depth knowledge about employee benefit and
their design, we were able to gather information to analyze current benefit plans of
DGV.
Overall Consideration in Design
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Benefit Analysis: Don Guanella Village Page 16
GoalsWhen asked about the reason of providing benefit packages for employee, Mr.
Schardt mentioned that it is important for DGV to provide competitive employee
benefits even as a non-profit organizations. Since a large proportion of current
employees have limited knowledge of their benefits as they are originally from or
having family in West Africa, it is Mr. Schardt and his colleagues responsibility to
educate the employees and understand their needs and demands. It is not only because
of the conventional goal to attract and obtain talents, but also because DGV cares
about the well-being of its employees, and therefore it is critical to offer benefits that
make sense to employees and their needs. As a residential facility, Don Guanella
Village promotes family values among employers, employees and their patients. A
comprehensive benefits package helps to create a happier work force and therefore
increase productivity of the organization.
The organizations employee benefit plan designers are committed to design a
comprehensive benefit plan that satisfies employees needs without placing a heavy
financial burden on the organization. With this goal in mind, Mr. Schardt and his
colleagues offer benefits that are only required by a considerable amount of
employees. On the other hand, Mr. Schardt is also aware that the benefit plan should
be complied with the organizations fiduciary responsibility under ERISA. In this case,
Mr. Schardt has offered specific benefits on a fully contributory basis to create more
options for the employees.
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Benefit Analysis: Don Guanella Village Page 17
Demographics
In designing of the benefits plan, Mr. Schardt has taken into account of the
organizations factors such as employees occupation, gender and originality. DGV
has around 300 employees in total, in which around 83% are full-time employees; 60
to 70% of all employees are female; 70% are from countries in West Africa or still
have family in those countries. Unfortunately, there hasnt been statistics on age or
family composition. Most of the employee benefits are designed for full-time
employees; however, some of the part-time employees may find themselves eligible
for some of these benefits, such as retirement pension plan, once they have worked
enough hours. A full-time employee is defined as an employee who works 65 hours
over a two week period. This design is to not only attract full-time employees, but
also encouraging part-time workers to participating more of their services.
Moreover, with large amount of West African employees and female employees,
it is not unusual when employees have to leave their works for months due to personal
reasons such as death of family members or pregnancy. Complying with the Family
and Medical Leave Act of 1993, DGV utilized paid-time-off benefit to solve this
problem. It gives employees flexibility in management of their vacation days and sick
days according to their special needs.
Mr. Schardt also indicates that has not yet been domestic partners benefits in the
organization as because it is not applicable to DGV, and he does not see it will be an
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Benefit Analysis: Don Guanella Village Page 18
issue in the future.
Funding and Financing Considerations
Almost all benefits are fully insured by an insurer, besides the funding for Paid
Time Off and Educational Assistance. Out of the consideration of cost, DGV finances
most of health benefits on a contributory basis. At the same time, the human resource
teams of DGV worked hard to help with employees choose among Personal Choice
PPO, Keystone HMO, Keystone POS and other supplemental benefits that match their
medical needs as well as personal incomes. The organization also chose to offer
Short-term Disability Benefit, Long-term Disability Benefit, Educational Assistance
and Paid Time Off on a non-contributory basis, securing the necessary coverage for
employees. The demographics and the nature of most employees work also
encouraged the decision of offering Disability benefits full of cost. Last but not least,
the disability benefits had to be coordinated with federal and Pennsylvania social
insurance program.
Problems, Issues, Concerns, and Considerations in the
Design of Health Benefits
Cost InflationUnsurprisingly, the biggest concern of DGV regarding of benefits is the rising
cost of health insurance. Mr. Schardt has mentioned more than once about the
relatively low cost of healthcare in the 1990s and the following cost inflation.
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Benefit Analysis: Don Guanella Village Page 19
Because it would unimaginable for DGV to not offering health benefits for its
employees, and the Employer Mandate of healthcare is going into effect in 2014, it is
the benefit plan designers priority of reduce the cost without sacrificing the necessary
employee benefits coverage.
Recently, due to the high price of health insurance, managers like Mr. Schardt
realize that having three different health care plans is costing the organization more
than ever before. DGVs provider, Independence Blue Cross (IBC), has increased
their premium charge of all three plans offered to DGV at the beginning of every
enrollment period. For example, DGV saw an 18.5% increase in its premium in their
Personal Choice PPO plan this year. Therefore, benefit managers want more
employees to select the Keystone POS-type HMO or Keystone HMO. If so, DGV will
see lower premium increases with their cost control strategy.
Administrative cost increase can be significant, too. With 250 eligible full-time
employees, DGV is categorized into the middle or large groups, which creates
medium level of administrative costs relative to its premiums. Mr. Schardt and his
colleagues usually sit down with the individual employee a week or so prior to
eligibility period (usually April to May) to help them with selection. In fact, they
could impose a waiting period prior to eligibility to cut down administrative burden
for employees who are going to quit, while also reducing the risk of adverse selection
problem.
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Prescription DrugsDGV offers a prescription drug plan through IBC that includes non-formularies.
The additional cost of non-formularies has become a luxury option for most
employees as it usually charges $15 more than the regular formularies. DGV could be
able to reduce cost of prescription drug plans by excluding non-formularies; however
it may also create a paradox as it conflicts with the goal of creating a comprehensive
coverage for employees.
Dental CareDGV offers a dental care options for employees and their dependents with lower
cost than regular dental program. The Concordia Flex Dental Program, managed by
United Concordia which is a subsidiary of IBC, provides dental coverage for full-time
employees. This program saves cost at an average of 30%. The Aetna Dental
Maintenance Organization (DMO), managed by Aetna Philadelphia, is designed for
eligible dependents of full-time employees. DGV could consider change its offering
status from contributory basis to fully-contributory basis to cut down the cost.
Adverse SelectionAdverse selection is essentially a potential concern in every health benefits plan.
With three health plans in a risk pool of 250 employees, there is a possibility that one
plan, such as Keystone HMO, is attracting low risk candidates due to its low premium
while Personal Choice PPO is attracting higher risks. Fortunately, IBC is an
experienced insurer in making suitable pricing and taking on all these risks.
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Benefit Analysis: Don Guanella Village Page 21
Problems, Issues, Concerns, and Communications in the
Design of Other Types of Non-Retirement Benefits
Short Term Disability
Don Guanella provides all employees upon hiring with Short Term Disability
Insurance through Unum. A huge issue within the organization is the fact that nearly
70% of employees are female. Women are frequently out on maternity leave, and
although the organization has sufficient coverage in the event of a pregnancy, our
contact stated that many women simply choose not to return to work after their
pregnancy. A large portion of Don Guanellas workforce is comprised of African
immigrants and they have very large families that need them at home. Our contact
has observed that women on maternity leave try to collect disability for as long as
they possibly can because they are receiving payments without having to work, which
is a huge novelty to immigrant workers. The issue can be classified as a moral
hazard and it is the duty of the human resources department to maintain contact with
workers that take maternity leaves to be sure that they will be returning in a timely
manner. If workers continue to seek to collect payments for the full 90 days or
longer, Don Guanella could be faced with steep premium increases. The problem
cannot be offset by reduction in PTO, as it is crucial to maintain employee morale in a
high stress job dealing with mentally challenged patients.
Long Term Disability
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Don Guanella has Long Term Disability insurance through Cigna. An issue
regarding LTD insurance in when workers collecting payments from the coverage
decide to return to their country of origin for long periods of time while collecting.
Our contact cited an instance where an employee was collecting LTD (for a reason he
would not specify) and returned back to Liberia. It was very difficult to contact the
employee regarding her health status and the process of maintaining coverage her
coverage was further complicated by diagnoses by Liberian doctors that could not be
verified. Without going into details, our contact stated that the coverage payments
were terminated and there were no legal implications resulting from the event, but the
organization was faced with an uncommon problem that was difficult to handle
effectively.
Communication
Don Guanella faces a difficult task in communicating benefits offered to their
employees, however they use numerous strategies to make the process easier.
Benefits are essential in the compensation of any employee, and the human resource
department at Don Guanella goes the extra mile in fulfilling their benefit
communication duties. The human services industry has a turnover rate that is much
higher than average, so benefits are a huge factor used to attract and retain hard
working employees. Mr. Schardt, along with other members of his department, meet
individually with every employee in order to effectively communicate benefits
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packages and resolve any issues anyone may have. The process is certainly not a
short task, and it can potentially take up a significant amount of time from an
employees work day. Don Guanella offers an extensive benefits package and it is
crucial to make their employees fully aware of what they are receiving and how
valuable each benefit is. By meeting with employees individually, the organization
communicates their benefits super-effectively. Another strategy that DGV uses is a
large monitor in the employee cafeteria that displays important updates regarding
benefits, open enrollment periods, and contact information. Pamphlets are also
distributed to employees that detail costs and compensation, along with monthly email
reminders that supplement what is displayed in the cafeteria.
Regulatory Compliance
Don Guanella takes all of the necessary steps in order to comply with all federal
regulations regarding employee benefits. COBRA, ERISA, and HIPAA are three
major regulations that the firm must adhere to currently. The looming implications
from PPACA are also a consideration that DGV must plan for. To date, DGV has not
experienced any issues relating to regulatory compliances because the benefits
specialists are meticulous about perfecting their work.
COBRA
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COBRA is the most significant piece of legislation that DGV has had to maintain
compliance with because of the multitude of requirements the act encompasses.
DGV has been conscientious of making employees and their dependents fully aware
of when they exceed age limits of health insurance and have not experienced any
issues regarding that aspect. The organization has also not had any problems
regarding continuation of coverage. Although there is a high turnover rate in the
human services industry as a whole, DGV does not experience turnover in line with
the national rates. Employees who voluntarily or involuntarily leave the
organization are often making an immediate switch to another employer and DGV
properly informs them of how to utilize COBRA coverage until their new benefits
package takes effect. COBRA is a complex issue that has historically been
challenging for many benefits administrators making common mistakes, but DGV has
done an admirable job properly complying with COBRA regulations.
ERISA
Don Guanella has not experienced any issues regarding ERISA. The
organization does not provide defined benefit retirement plan or post-retirement
health benefits. DGV was on the fringe of being ERISA exempt because of its
Catholic Social Service status, but since it has become more privatized they are forced
to comply. DGV uses a five year vesting schedule for their 403 (b) defined
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contribution plan, as detailed in Part II, in order to meet ERISA requirements.
HIPAA
Don Guanella has been compliant with HIPAA and does not have any issues
regarding denial of coverage because of the nature of IBC. No employees that may
have had a preexisting condition coverage denial or discrimination due to health status
issue. The organization has consistently exemplified their willingness to go the extra
mile in order to meet all regulatory requirements and maintain employee morale.
PPACA
The issue of health reform has been somewhat of an administrative burden to Don
Guanella but the organization is taking the proper steps to comply. They have taken
the steps necessary to be sure to report employer-sponsored health coverage on an
employees W-2 and have distributed proper documentation summarizing benefits to
plan enrollees. They have not had any discrimination problems regarding HCEs.
DGV is also aware of any potential mandates that may or may not come into effect
and they have begun some planning strategies to adhere to them. Mr. Schardt stated
that he doesnt anticipate much more than more than further administrative burden
from the PPACA in relation to DGV.
Cost Management
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Rising healthcare costs is a huge issue for any large firm, including DGV. Mr.
Schardt stated that many employees switched to the Keystone Health Plan East HMO
during the last enrollment period. He stated that les people are enrolling in the
Personal Choice program because of the costs in comparison to other plans. The
employees at DGV are not highly compensated by any means, so cost is the main
factor in their decision making. Mr. Schardt stated that the organization may
consider eliminating the Personal Choice option in favor of another option such as a
consumer driven health plan. He stated that a switch is not imminent by any means,
but statistics show the HMO and POS are most popular amongst employees. Both
plans feature networks that are broad enough to satisfy the needs of all employees.
DGV is still exploring any options they may have regarding adding or eliminating
plans and Mr. Schardt emphasized that they will make their decisions in the best
interest of employees, because employee morale overrides cost.
Post-Retirement Health Benefits
Don Guanella does not offer any post-retirement health benefits. The benefits
structure that DGV currently offers is very rich. As an organization in an industry
with high turnover rates, it is not necessary to offer post-retirement health benefits.
Mr. Schardt said that the option has been explored to some extent, but he does not
foresee any change in the benefits structure regarding the offering of post-retirement
health benefits.
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Conclusion
Don Guanella Village offers a rich benefits structure and sacrifices costs in order
to maintain employee morale. There are some improvements that could be made
with the new trends in health benefits that are arising, but otherwise the organization
is in good standing with their current benefits structure and is very satisfied with how
their employees respond to being afforded excellent benefits. An area where the
organization could use some improvements if they do seek to update their plans is
hiring the assistance of outside consultants to help oversee their benefits operations.
DGV has done an admirable job thus far and should continue to do so. They operate
in the right state of mind that employee morale takes precedence over increase in
costs. DGV should continue to flourish and continue to retain competent employees
because of their benefit structure and hard-working team of individuals who
administer the plan.
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