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•Share my 20 years of benefits industry experience and teach how to properly:
•Design•Pay For•Communicate
Employee Benefit Plans
ObjectiveObjective
•National Consultants•Regional Consultants•Brokers/Agents
•Compensation & Disclosure
Where to get advice - Benefits AdvisorsWhere to get advice - Benefits Advisors
• Objective of the Plan•Attract / Retain / Lead / Follow / Protect•“Culture”
• Cost Sharing• Protection and Reimbursement• Leading Edge / Average / Economy
DesignDesign
• 2-3x Life Insurance & Dependent Life • Short Term & Long Term Disability• Drug Card with 90-100% Reimbursement• Extended Health• Dental 90-100% Basic, 50% Restorative & Orthodontic• Vision care - $200• Healthcare Spending Account $200 - $500• EAP• Flex options• Pension – Matching up to 6%• 70% -100% Employer Funded
Leading Edge - SteakLeading Edge - Steak
•1-2x Life Insurance & Dependent Life•Long Term Disability•Drug Card with 80% Reimbursement•Extended Health•Dental 90-80% Basic, 50% Restorative & Orthodontic•Healthcare Spending Account $200 - $500•EAP•Pension – Matching up to 3%•50 -70% Employer Funded
Median - BurgerMedian - Burger
• 1x Life Insurance and Dependent Life• Long Term Disability• Drugs 80%• Extended Health Care• Dental 80% Basic• No Pension• No EAP• 50% Employer Paid
Economy - BeansEconomy - Beans
• Employer pays all costs of Life and Disability• Drug Coverage with a card• Health Care Spending Account
• E.g.) 80% Managed Drug Card – Dispensing Fee Deductible
• Health Spending Account for other Medical and Dental expenses
(e.g.. $500 single - $1000 family)
Inflation Proof PlanInflation Proof Plan
• Affinity Plans• Group Home and Auto• Group Mortgage Program• Payroll deductions for RRSP/RESP/TFSA• Pet Insurance• Fitness Subsidies• Employee Fitness Facilities• Employee Assistance Programs (EAP)• Best Doctors• Weight Loss Programs / Quit Smoking
Other Value Added BenefitsOther Value Added Benefits
Pooled BenefitsPooled Benefits
• Life, AD&D, Dependent Life, Long Term Disability
• Carriers price based on estimated risk
• Most claims are fully pooled• Usually account for approximately
1/3 of the total cost of a benefits plan
ReimbursementReimbursement
• Drugs, Hospital, paramedical practitioners, hospital, etc.
• Dental• Eyeglasses
Types of ContractsTypes of Contracts
• Fully Insured• Refund• ASO (Administrative
Services Only) • aka – “Self Insurance”
Fully Insured vs. Self Insured (ASO)Fully Insured vs. Self Insured (ASO)
• Health and Dental Premiums over 3 years for Company XYZ = $300,000
• COST =$300,000
• Health and Dental Claims over 3 years for Company XYZ = $225,000 (75% of premiums)
The MathThe Math
SavingsSavings
• Premiums = $ 300,000• less (Claims + ASO Expenses) =
$(257,500)
Savings to Company XYZ = $42,500
Who Supplies ASO?Who Supplies ASO?
• Main Line Carriers e.g. GWL, Sun, Manu, etc.
• Third Party Administrators•Maximum Benefit•RWAM•Health Source Plus•Sirius Benefits
Mechanics of ASOMechanics of ASO
• Set up a stand alone bank account• Health and dental rates are set by
company• Deposit employee premiums into
account• Deposit employer premiums into
account• Carrier pays claims from bank account• Any surplus easily identified by viewing
bank balance
Eliminating the RisksEliminating the Risks
1. Stop Loss Protection “Ceiling”
2. Out of Country Protection
• Amount can be set at any level
• e.g. $10,000, $7,500, $5,000 per year.
• Designed to eliminate the risk of a very expensive drug claim
• Insurance premium charged for stop loss protection
• Protects the plan against an expensive out of country claim
• Insurance premium charged for out of country protection
• Typically 100% insured
Pros and Cons of ASOPros and Cons of ASO
Pros
• Pay only for what is claimed• Administrative charges are
lower• Admin charges on claims
not premiums• Surpluses are kept by the
company not the carrier
Cons
• Without Stop Loss provision exposure on large drug claims
• Without travel coverage exposure of out of country claims
• Can be more costly in short term
What to do with a SurplusWhat to do with a Surplus
• Reduce health and dental rates
• Enhance benefits• Leave in account to reduce
possible future deficit• Give employees a “premium
vacation”
Corporate Sponsored Retirement Plans (Pension)Corporate Sponsored Retirement Plans (Pension)
PensionPension
•Types – DB, DC, DPSP, RRSP•Why important?•How to set up?•Investment choice•CAP Guidelines
Pension InvestingPension Investing
Executive/Management BenefitsExecutive/Management Benefits
•Higher amounts of Life Insurance•Specialty Long Term Disability •Critical Illness Insurance•Health Care Spending Accounts (HSA)•Pension – 5-10% non contributory•Medical Access Insurance•Executive Medicals•Best Doctors•100% paid by employer
Critical Illness Insurance (CI)Critical Illness Insurance (CI)
• What is it?• What does it protect against?• Heart Attack, Stroke, Cancer• CI as an employee benefit• Taxability
Health Care Spending Accounts (HSA)Health Care Spending Accounts (HSA)
• What are they?• How does it work?• What expenses are covered?• What does it cost?
EAP – Employee Assistance PlanEAP – Employee Assistance Plan
• What is it?• What is the purpose?• Who supplies them?• What do they cost?
Marketing Benefits to EmployeesMarketing Benefits to Employees
Proven Marketing TechniquesProven Marketing Techniques
• The Employee Meeting• The One Page Summary• Newsletters• Website Content• Surveys• Committee
ObjectiveObjective
• Protection• Value/Efficiency• Employee Appreciation• Market Competitive
• ROI !!
ReferencesReferences
• www.bestdoctors.com• www.benefitsnews.com• www.sunlife.ca• www.greatwestlife.com• www.benefitscanada.com• www.wellpointhealthservices.com
• www.sigurdsonmcfadden.com • www.rwam.com• www.directprotect.com• www.acurehealth.com• www.maximumbenefit.ca• www.lifescale.ca
For more information:
Kevin McFadden (204) 953-1602