Companies are accepting more of the
risks associated with employee benefits packages, and they are offering more options to their employees. Choosing
the right plan while remaining within budget parameters usually requires the help of
an experienced benefits adviser.
“Because consumer-driven health care
initiatives and funding alternatives are available, a company needs to determine
what adviser can best steer it through the
options,” says Dave Chiappino, sales executive for JRG Advisors, the management
company for ChamberChoice.
Smart Business spoke with Chiappino
about different approaches that a company
can take to maximize employee benefits
and minimize expenses.
What benefits strategies are available to
companies today?
No single strategy fits all companies. But
when a company wants to reduce the cost
of employee benefits, it all starts with picking an adviser that you are comfortable
with; one that has resources, access to
markets and experience.
Many larger companies, those with at
least 150 employees, are beginning to
explore the possibility of taking on more of
the risk associated with different kinds of
employee insurance. Usually, the risk involves some version of self-funding. By
using that strategy, the companies are putting themselves in a position to accept
some of the rewards, which can include
lower premium costs. This approach, in
effect, removes insurance company
profits, overhead and risk charges,
and may reduce premiums by as
much as 10 percent.
What tactics work better for larger
and smaller companies, and is there
a big difference?
The big difference is that the larger companies can put themselves in
the position of not allowing insurance companies to dictate their policy. That’s where it gets back to hiring a good adviser to review data
and implement strategies, such as
wellness and other focused initiatives, and to appropriately set deductibles and co-insurance levels
based on hard data.
Smaller groups, specifically those with
fewer than 50 employees, do not typically
have this option because their data is
aggregated with other smaller employers.
The focus for smaller groups is choosing
the right plan design, carrier and adviser
with access to innovative resources to
keep as many benefits expenses in check
as possible.
How often should a company compare
providers and plans?
Large companies should shop every two
to three years, even though it is a significant project involving multiple and complicated requests for proposals (RFPs).
For smaller companies, it is not too difficult to simply get rates, so they may shop
every year. Smaller companies often consider changing plan designs offered by
their current provider or introducing an
employee premium contribution model.
Upon what criteria should a company choose
a benefits adviser?
Experience is one of the main criteria,
and available staff is another. You want a
benefits adviser who is your partner; one
who will give you the time and the resources you need.
Our industry has trained buyers to shop
product, and that is an admissible strategy
that can sometimes satisfy the point of
sale. But employers should consider factors that are important after the sale, like
availability of local staff and technology.
Are price breaks available to health insurance advisers?
Insurance advisers representing the various health insurance companies do not
receive ‘pre-arranged’ discounts. However,
an experienced adviser armed with solid
claims information will be in the position
to negotiate lower premiums on behalf of
his or her clients.
Are there opportunities for a company to save
money with benefits other than health care?
There are always opportunities to save
money, particularly with ancillary benefits
— like disability, life insurance, dental and
vision. For instance, companies are beginning to self-fund dental insurance because
there are caps inherent in the program. The
10 or 15 percentage points you can save on
a dental plan just by changing the funding
is pretty significant.
There is no definitive strategy that everyone can use. It depends on the group, the
benefits offerings, how they interact with
one another, and the employer tolerance to
accept risk and change.
With most strategies, the company and
the adviser must follow through by giving
employees the right communication tools.
What are the right employee communication
tools?
Educating employees on plan options,
employee cost share and how to best
access vendor and adviser information
should be included with an employee communication package. The
tools used to support this type of
communication varies by adviser.
We are fortunate at JRG in that we
offer a state-of-the-art online communications tool that is easy for
employers and employees to use. By
engaging employees in this manner,
we are bringing them ‘into the process,’ which is critical if we are to
have a long-term impact on benefits
costs.
DAVE CHIAPPINO is a sales executive for JRG
Advisors, the management company for Chamber-Choice. Reach him at [email protected]
or (412) 456-7015.