Presented by Jenny Sardi

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The Objective

To exam the “Five W’s” of employeebenefits, and explore the purposes and philosophies used by Employers as they

determine their benefit offerings

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Who is covered by the benefit? What is being protected by the

benefit? Why are employee benefits offered? Where employee benefits are offered,

(a look at the State and other regulatory considerations)?

When are employee benefits offered?

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Wise spending of resources;the Cost of providing

or not providing an employee benefit.

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All forms of financial and tangible services and benefits employees receive as a part of an employment relationship.

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Any form of compensation other than direct wages paid to an employee and may include: Employers share of legally required payments,

(Statutory Benefits) Payment for time not worked (paid vacation,

paid holidays, parental leave, etc.) Employers share of medical and medically

related payments Employers share of retirement and savings plan

payments Others - employee discounts, tuition assistance,

childcare

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Employee Benefits are intertwined with every aspect of an

Individual’s financial and economic security.

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Active Employees Full-time and Part-time employees Dependents of employees

Former employees Retirees

Dependents of retirees Others...

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There is more diversity in the workplace - one size fits all benefits may no longer work. Married or cohabitating couples, Single head of households, Caretakers for parents/children, Employees that are still students,

continuing education And more

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Employees are concerned with job security, family time, paying bills

during times of income loss, adequate health insurance, making ends meet,

saving for college, adequate childcare, and adequate elder care.

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Medical Expense Health Insurance Dental Insurance Vision Insurance Flexible Spending Account

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Losses due to disability Workers Compensation Statutory Disability Long term disability Social Security

Losses due to employee’s death Life Insurance for Employee Life Insurance for Dependents of employee Key Man Policies

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Retirement needs of Employee and Dependent Saving Plans Defined Contribution Plans

Loses due to unemployment Unemployment Insurance Reimburser for Unemployment

Others

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Business reasons: To attract and hold capable employees To improve corporate efficiencies and

productivity Tax advantages offered to employers A cost effective and administratively

efficient distribution channel

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Social reasons A social objective Because of “Moral Suasion” – to

prevent further government programs To improve employee morale

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In one of the most heavily regulated States for Insurance Community Rating Statutory Benefits Complex Workers Compensation requirements

Mostly in the small group market Need to be aware of

Mandatory Benefits, Regulatory Issues like COBRA and HIPAA,

TEFRA and DEFRA

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An example: Statutory Disability – covers 50% up to a

maximum weekly allowance of $170 a week. There are very feasible options for

enhancing this disability coverage Offering additional voluntary disability

protection to your employees may pay off for the employees as well.

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Certain Benefits require a set number of hours Community rating Health Insurance require

employees to work 20 hours per week Most Group Life or Dental programs require

employees to work 30 hours a week.

Certain Benefits must be provided to all employees regardless of hours worked.

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There are two types of benefits: Protection Benefits

Protect employees against the risk of serious loss exposure.

Consist of medial expense benefits, life insurance, short and long term disability benefits.

The need for immediate protection is great and the reasons for a probationary period no longer make sense.

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Accumulation Benefits Consist of pension plans, bonuses, profit

sharing, tuition assistance programs. These benefits are used as rewards for

service length and loyalty.

Determining when to apply a waiting period should be consistent with the overall employer objective and benefits philosophy.

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There may be financial or social reasons to apply a waiting period with both the Protection Benefits and Accumulation

Benefits,

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Cost Shifting to Employees through premium contribution or through increased co-pays and deductibles.

PRO of Cost Shifting – allows the continued offering of coverage.

CON of Cost Shifting – is not a solution to the high increases experienced each year.

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Alternative Health Plans and Funding Arrangements such as HSA Plans and HRA’S. Pro of HSA – the employee has more

control over health care options, can allow unused dollars to build.

Con of HSA/HRA – upfront deductible is not always feasible for the employee , especially in the first year.

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Look at your benefit priorities through the Five W’s process.

Review all of your benefits and services to see where gaps and overlaps exist.

Explore alternatives for each coverage Committing to a worksite wellness program Implementing an HSA, Unemployment options, Making some benefits voluntary instead of

eliminating them altogether. Share a Total Compensation summary with

your employees

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