www.ehlinsurance.com "insurance explained” jenny foster, cic
TRANSCRIPT
www.ehlinsurance.com
"Insurance Explained”Jenny Foster, CIC
www.ehlinsurance.com
Speaker BioSpeaker BioJenny is the Senior Employee Benefits Advisor and Human Resources Manager for EHL Insurance, headquartered in Poulsbo, Washington. She joined the agency in 2002 and holds her Certified Insurance Counselor (CIC) designation and is a licensed agent and broker in Property and Casualty and Life and Disability.
Jenny has a Bachelor of Science in Physiological Psychology from the University of California, Davis. Her focus is helping clients obtain and retain the very best employees and ultimately improving her client company’s profits. She is most passionate about employee education. “If employees do not understand their benefits, how can they value them?”
An active member of our community, Jenny has served on the board of her local SHRM chapter. She enjoys creative writing, traveling, walking, shopping, and serving in her local church. Jenny lives with her husband, two girls, and eccentric Japanese Shiba Inu, Charlotte.
Jenny can be reached at (800) 929-1669 ext. 8170 or [email protected].
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House KeepingHouse Keeping
Musical stretch breaks every 20-30 minutes
Candy throwing (hold harmless agreement)
Late return policy following breaks
Participation increases everyone’s fun and ability to learn and retain information
Interruptions are encouraged
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Let’s Get It Started…!Let’s Get It Started…!
Post it note participation exercise
Introductions (time permitting)
Health plan quiz (prizes)
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Tough StatisticsTough Statistics
23.6 million children and adults in the United States (7.8% of the population) have diabetes.
Total costs of “diagnosed” diabetes in the United States in 2007: 174 billion.
Nearly 7 out of 10 office visits in the U.S. result in a prescription being written.
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It’s A Jungle Out There!It’s A Jungle Out There!
High toll of cancer on our nation
Death rates for cancer of the pancreas, esophagus, thyroid and liver are increasing.
An estimated 14% of cancer deaths in older men and 20% in older women can be attributed to excess body fat.
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It’s A Jungle Out There!It’s A Jungle Out There!
Currently more than 64% of U.S. adults are either overweight or obese, according to NHANES.
Fruit and vegetable intake is not increasing. Red meat and fat consumption are not decreasing.
Average 20% increase in employer’s portion of group health plan premiums since 2005.
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Average Health Insurance 2005-2010Average Health Insurance 2005-2010
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005-2010.
$8,167$9,773
$2,713
$3,997
2005 2010
Worker Contribution
Employer Contribution
$10,880
$13,770$1,284Worker
Contribution Increase
47%
20%
27%
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It’s A Jungle Out There!It’s A Jungle Out There!
Confusing health care reform legislation
Increase in stress-related diseases
National unemployment rate still 9.6%
Average litigation verdict for Chelan County, Washington in 2009 was $350,000.
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The Cost Of Hiring The “Wrong” EmployeeThe Cost Of Hiring The “Wrong” EmployeeWhat is the true “cost” to your company?
The lazy employee The dressed up resume The Waffle Mr. Do Nothing The Folder Mr. Conspiracy Theory
Best way to avoid hiring the “wrong” employee? Have a clear, consistent, written hiring process!
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The Cost Of Hiring The “Wrong” EmployeeThe Cost Of Hiring The “Wrong” Employee
The WRONG employee will:
Create a negative work environment
Sue your company
Harass/discriminate against other employees
Quit at the drop of the hat
Inappropriately file for unemployment or workers compensation
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The Cost Of Hiring The “Wrong” EmployeeThe Cost Of Hiring The “Wrong” Employee
The RIGHT employee will:
Create a positive work environment
Improve profitability
Empower coworkers
Build customer loyalty
Work in a safe manner, lowering insurance costs
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The “Right” EmployeeThe “Right” Employee
High cost of retaining the “wrong” employee.
High cost of losing the “right” employee!
What if they are a key employee?What if they take other key employees with
them?What if they go to a competitor?
How do we KEEP the right employee?
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How To KEEP The “Right” EmployeeHow To KEEP The “Right” Employee
Maintain some type of employee benefits program that is well understood and valued by employees.
74% of covered employees regard health benefits as an important factor in their loyalty.
Even in these economic times engineers at Google are still allowed to allocate 20% of their time to projects of their own choosing.
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The Importance of EmployeesThe Importance of Employees
“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.” - Jack Welch (former CEO, General Electric)
“We want passion for our business... workers who can interpret and execute our mission, who want to build a career, not just take a temporary job.” - Howard Schultz (CEO, Starbucks and Seattle SuperSonics)
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Break Time!Break Time!
When we return…
Employer Trends
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General Employer TrendsGeneral Employer TrendsAccording to this year’s Kaiser Family Foundation study, 69% of companies reported offering health benefits (up from 60% in 2009).
43% to 60% of organizations are already using an HDHP (to include focus on HSA bank account).
Ten million Americans are now covered by HDHP/HSA plans, an increase of 25% since 2009.
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General Employer TrendsGeneral Employer Trends
25% of covered employees have a deductible of at least $1,000.
The average annual premium for family coverage is running at $13,770 (a 114% increase since 2000).
51% of workers with family coverage pay more than 25% of the cost of premium.
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General Employer TrendsGeneral Employer Trends78% of covered employees have plans with 3 or more tiers of pharmacy cost sharing.
74% of employers offering health benefits offer at least one of the following wellness components:
Healthy living classesWeb-based resourcesWellness newsletterHealth Risk Assessment
Weight loss programGym membershipSmoking cessationPersonal health
coaching
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Employee Benefits Relevant To Retention?Employee Benefits Relevant To Retention?
Workplace benefits have remained resilient despite the recession.
53% of employers report controlling benefits costs as their top objective.
Employee retention (formerly first concern) is still second most important employer objective.
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Employee Benefits Relevant To Retention?Employee Benefits Relevant To Retention?
Employees are more satisfied with their benefits than at any time since 2007.
More than 35% of employees are prepared to shoulder more benefits costs to keep benefits they value.
Of employees satisfied with their benefits, 81% say they are very satisfied with their jobs.
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Employee Benefits Relevant To Retention?Employee Benefits Relevant To Retention?
69% cite high benefits satisfaction as a key reason to stay with their employer.
The average worker loses 115 productive hours a year due to poor health (cost: $250 billion/year).
59% of employees who participated in company wellness programs said the programs were effective at improving productivity.
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Stretch Break Time!Stretch Break Time!
When we return…
Retention Strategies
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Retention StrategiesRetention Strategies
Retention begins with an exceptional hiring process.
What culture do you want to have that keeps people from leaving?
Employee Benefits are only as limited as your imagination!
Happy Hour is 9 to 5 book
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Retention StrategiesRetention Strategies
Flexible work schedules
Worksite fitness or wellness programs
Employee Benefit Statements (Total Comp)
Employee Assistance Programs (Chevron Corporation saves $7 for every $1 spent on its EAP)
Health Advocacy
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Retention StrategiesRetention Strategies
Education and training
Clear communication
Approachable supervisors/managers
Involvement in decision-making process
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Retention StrategiesRetention StrategiesWork-Life Programs can boost both loyalty and productivity. Employees and employers report similar conclusions.
“Many companies have long contended that stress in the home causes productivity loss in the market place...and it does. But research now reveals that stress on the job causes stress at home. In other words, they feed off each other.” Zig Ziglar
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Retention StrategiesRetention Strategies
Gift cards & incentives (know your employees; $10 to $200)
Free parking and other perks
Company discounts
Cisco is one of the nation’s largest providers of on-site child care with over 800 children enrolled, and parents can track their kids via computer.
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Retention StrategiesRetention Strategies
Employees want help with their retirement
Maximize employee education!
“Life is full of uncertainties. Future investment earnings and interest and inflation rates are not known to anybody. However, I can guarantee you one thing.. those who put an investment program in place will have a lot more money when they come to retire than those who never get around to it.” Noel Whittaker
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Retention strategy group activityRetention strategy group activityPlease form groups and take 2-3 minutes to discuss:
1)What/if any of the retention strategies we discussed are you using at your company? Are they working? Why or why not?
2)What is one retention strategy we discussed today that you might consider implementing? Why?
3)As a group write down one retention strategy you came up with as a group not presented today (be ready to share it with the group).
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Break Time!Break Time!
When we return…
Leveraging Employee Education
“Always treat your employees exactly as you want them to treat your best customers.” - Stephen R. Covey
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Leveraging Employee EducationLeveraging Employee Education
What do your employee benefits meetings look like?
How often do you have them?
What is employee feedback?
What do you think your employees would score on a health plan quiz?
How many questions do you answer each day/week/month related to your employee benefits?
How much time does this take from revenue focused work?
How much do you think this costs your firm annually?
What if there was a low cost/no cost solution?
Think about how you scored on our health plan quiz.
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Leveraging Employee EducationLeveraging Employee Education
Low cost or no cost!
If employees understand their benefits; they value them!
Harris study: only 29% of employees reported their benefits education was excellent or very good in 2009.
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Leveraging Employee EducationLeveraging Employee Education
Highly engaged employees are 26% more productive.
How you communicate your benefits are as important as what they are.
Employees who believe their benefits were clearly communicated are more likely to feel their employer values their work and well-being.
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Leveraging Employee EducationLeveraging Employee Education
Employ a 3+3 strategy to benefits education.
3+ weeks and 3 ways to learn (visual, auditory, tactile)
Effective benefits communication contributes to a sense of financial security for employees.
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Employee Benefit SurveysEmployee Benefit SurveysWhat employee benefits are most important to you?
Medical
Dental
Vision
Life
Disability
EAP
FSA
HSA
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Employee Benefit SurveysEmployee Benefit SurveysWhat other benefits would you be most interested in?
Wel
lnes
s
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Signing Of The PPACASigning Of The PPACA
“How we might help the American people deal with costs, coverage, insurance, these other issues. And we might surprise ourselves and find out that we agree more than disagree. And that would then help to dictate how we move forward. It may turn out on the other hand there’s just too big of a gulf.” — President Obama
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The Chips Are Still FallingThe Chips Are Still Falling
We basically know what the problems are, all of us. We basically know that the current system is unsustainable.“ – Senator Max Baucus, D-Montana
“People are angry. We promised them change in Washington,” - Senator John McCain, R-Arizona
"If you think they want a government takeover of health care, I would simply submit you’re not listening to them.” - Representative Paul Ryan, R-Wisconsin
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Health Care Reform Health Care Reform Effective Immediately: adult children covered to age 26
January 1, 2011 January 1, 2014
No reimbursement for OTC drugs unless prescribed (HSA/FSA)
No pre-existing condition exclusions
Non-qualified HSA distributions subject to 20% tax penalty (previously 10%)
No annual limits
September 1, 2011
No lifetime limits on essential benefits
No pre-existing condition exclusions for those under age 19
First dollar coverage for preventive care
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Health Care ReformHealth Care Reform2018
Cadillac Tax – 40% excise tax on employer sponsored health plans exceeding $10,200 for individual coverage (dental, vision, accident, disability, long term care, specified disease insurance excluded)
Other Highlights
Small business tax credits available 2010-201310 or fewer FTEs & average annual wage of $25,000 or less (up to 35% credit)10-25 FTEs & average annual wages of $50,000 or less (up to 25% credit)
Non-grandfathered fully insured plans must satisfy IRS Section 105 non-discrimination rules.
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What Is An HSA?What Is An HSA?
B A N K A C C O U N T
Tax-FreeIRS Qualified Checking
Account(HSA)
I N S U R A N C E
A High-DeductibleHealth Plan
(HDHP)
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Typical HSA PlanTypical HSA PlanDeductible waived for preventive care
No copay. Office visits (“talking”) subject to deductible.
Procedures subject to deductible (“doing”)
Key preventive benefits (deductible waived):Routine care Prenatal carePap smears MammogramsChildhood immunizations Cancer screenings
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Typical HSA planTypical HSA plan$2,500 deductible for an individual ($5,000 deductible if enrolled with dependents).
$2,500 out-of-pocket maximum (capped at $5,000 for a family)
80% (in-network); 50% (out-of-network) plan
Worst case scenario: $2,500 deductible + $2,500 out of pocket = $5,000$5,000 deductible + $5,000 out of pocket = $10,000
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Prescriptions & HSAsPrescriptions & HSAs
Prescription drugs are subject to the deductible.
Once deductible is met prescriptions are covered at 80%.
Once coinsurance (out of pocket maximum) is met: 100% Rx coverage!
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Truly A Legal Tax Shelter?Truly A Legal Tax Shelter?
You can contribute to your HSA bank account via pre-tax payroll deduction.
The IRS allows you to tax shelter up to $3,050 per individual per calendar year and up to $6,150 if enrolled as a family (combination of company and employee contributions).
Employees need to keep all receipts, as this is an IRS regulated benefit.
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HSA Tax ImplicationsHSA Tax Implications
Tax Savings Example:
HSA Contribution $1,000.00
Federal (25%) $250.00
Social Sec (6.2%) $62.00
Medicare (1.45%) $14.50
Estimated employee tax savings: $326.50
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Traditional vs. HSA plansTraditional vs. HSA plansHDHP/HSA Plan: Traditional Plan:
Family deductible Individual deductible
Deductible waived for preventive care
Deductible waived for preventive care
Rx subject to deductible Rx copays
Rx reimbursable through HSA Predictable Rx co-pays
Tax sheltered account No employee tax advantage
HSA funds grow and roll over tax free; portable (“owning”) No equity (“renting”)
Pre-tax premium & HSA contributions
Pre-tax premium payroll deductions
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Words Of WisdomWords Of Wisdom
“In the end, all business operations can be reduced to three words: people, product and profits. Unless you've got a good team, you can't do much with the other two.” -Lee Iacocca
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What about dental?What about dental?
Unless perceived as a benefit by employees, dental ROI may not always pencil out.
83% of employees reporting excellent dental health visit a dentist every six months or more.
64% of employees who say they have good dental health also report better overall health.
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What about dental?What about dental?Regular dental care is critical in early detection:
Dental health is also correlated to a healthy heart!
Gingivitis Heart burn Lymphoma 20+ conditions
Mouth/throat cancers Diabetes Colon cancer Heart disease
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Vision InsuranceVision InsuranceRelatively low cost but high perceived value
Vision providers may be able to diagnose retinal disorders, arteriosclerosis, or diabetes.
Approximately half of employers offer a formal vision plan.
Employers stand to gain as much as $7 for each dollar spent on vision coverage.
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Life & DisabilityLife & Disability
3 in 10 workers entering the workforce today will become disabled before retiring!
Life and disability insurance pack a powerful punch for a small premium.
Increasing group enrollment in these benefits
Determine your company’s goals before selecting a product (short vs. long term disability).
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Voluntary BenefitsVoluntary Benefits
Dental, accident, specified disease, some STD and LTD programs, supplemental or dependent life and AD&D
Employees offered voluntary benefits are 17% more satisfied with their benefits than those not offered voluntary products.
40% of employees are interested in a wider range of voluntary benefits. Smaller companies less likely to offer.
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Unknown Benefits Left On The TableUnknown Benefits Left On The Table
Health Risk Assessments Wellness coaches Weight management Vision discounts Alternative care Hearing devices
Your health plan typically offers discounts on:
Hearing screeningsFitness clubsFamily safety productsSenior discountsRed Cross CPR coursesYour payroll vendor
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Your Health Plan WebsiteYour Health Plan Website
Find a preferred doctorAccess documents & formsReview benefits & claimsMail order pharmacy
Compare hospitalsUse wellness toolsLearn about prescriptionsLook up symptomsAccess discounts
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Celebrate Your Benefits Portfolio!Celebrate Your Benefits Portfolio!
Life/AD&D coverageTax advantaged HSA accountExcellent dental benefitsVision programShort & Long Term Disability
Dual choice health plansWellness toolsPaid time offFlexible Spending Account (FSA)401(k)
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Closing RemarksClosing Remarks
Be wary of hiring the wrong employee!
Leverage Employee Benefits to retain the best.
Get creative with retention strategies.
Harness the power of employee education!
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Closing RemarksClosing Remarks
Consider your HSA strategy
Evaluate voluntary benefits
Celebrate your Employee Benefits Portfolio!
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Contact InformationContact Information
Jenny Foster, CIC(800) 929-1669 ext. [email protected]
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Questions & AnswersQuestions & Answers
Enjoy your time in Seattle!
“Solutions you can understand”
DefinitionsDefinitionsDeductible – the amount an insured person is responsible for before insurance kicks in (i.e. $500 or $1,000)
Copay – a small, fixed amount required by the insurance company that a subscriber must pay typically for office visits or prescriptions.
Coinsurance – you and your insurance company share expenses (i.e. insurance company pays 80%; you pay 20%)
Out of pocket maximum – the financial worst case scenario that an insured must pay in a calendar year before the insurance company pays 100%. The most you would have to pay in a single year out of your own pocket.
Maximum benefit – the maximum an insurance company will pay per calendar year or over a specified period of time (i.e. $2 million lifetime maximum, $1,500 rehabilitation maximum per calendar year)
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DefinitionsDefinitionsEmergency Room copay – a small, set amount that must be paid to visit the ER in addition to a deductible when the visit it not serious enough to cause inpatient admission. Typically this copay is waived if admitted.
Generic – Drugs that have typically been on the market long enough to have lost their patent and can be duplicated by other companies, typically lowering their market value and price. Chemically equivalent to the drugs they copy cat.
Preferred Brand name drug – A brand name drug that is still under patent protection but preferred by insurance companies based on efficacy and cost.
Non-preferred brand name drug – A brand name drug that is still under patent protection but not preferred by insurance companies due to safety and or cost concerns. Typically another drug can be substituted.
Pre-Certification – when an insurance company requires that a member call to gain written approval before a complex or costly procedure. Failure to pre-certify can result in no coverage or reduced coverage.
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ReferencesReferencesThe Henry J. Kaiser Family Foundation & Health Research & Educational Trust; www.kff.org
8th Annual Study of Employee Benefit Trends; www.metlife.com/business
National Underwriter, Allison Bell 5/17/2010; www.lifeandhealthinsurancenews.com
“Employee Education and Enrollment Education Survey,” January 2010.
American Diabetes Association; www.diabetes.org
Mayo Clinic; www.mayoclinic.com
American Cancer Society; www.cancer.org
National Cancer Institute; www.cancer.gov
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ReferencesReferencesNational Health and Nutrition Examination Survey; www.nhanes.org
Magellan Behavioral Health; www.magellanhealth.com
Americas Health Insurance Plans; www.ahip.org
www.benefitsellingmag.com
http://apps.nccd.cdc.gov
“What Employers are Considering,” International Foundation of Employee Benefit Plans
“Behind the Numbers: medical Cost Trends for 2011,” Pricewaterhouse Coopers
WRG. 2006. S. Aldana, PhD Bringham Young University