1. The Best Practices In Benefits Design
SEAN ZAYON
Agency Owner & Lead Benefits Consultant
P: 267-422-2881
E: myphillyinsurancebroker@gmail.com
2. The Value Of Employee
Benefits
Employees consider workplace benefits their personal safety net.
Employees consider health benefits nearly as important as their
salary.
Employees are more likely to take a job with better employee
benefits for a slightly lesser salary.1
1The 2014 Aflac WorkForces Report was conducted in January 2014 by Research Now
3. Benefits Package is a
Tool for Employers
Employers should consider employee benefits important tools for:
Retention
Productivity
Cost Control
5. Medical Plans are
Important – and Expensive
75% of employees rank medical benefits are the most important benefit
after salary.
Healthcare-related expenditures:
• Represent 17.8% of the U.S. economy(2013) and expected to reach 47%
by 2024.
• Equal three times U.S. defense spending budget (2013)
• Is greater than the amount Americans spend on food, housing and
transportation combined.
Choosing the right plan is a matter of:
• Balancing premiums and benefits
• Considering all costs of coverage
7. Balancing Premiums
and Benefits
But to choose the right plan………
You must consider all costs!
Benefits Monthly Premiums
Members Cost At
Point Of Service
Richer
More Modest
Higher
Higher
Lower
Lower
8. Three Main Cost
Categories
Immediate employer costs (PREMIUMS)
Longer-term employer costs
(COSTS AT FUTURE RENEWALS)
Employee costs (DEDUCTIBLES, OUT-OF-POCKET)
9. Copays, Deductibles and
Coinsurance Maximums
Copay Bucket
You never fill the copay bucket as they
continue throughout the plan year.
Deductible Bucket
After annual deductible is paid, the
deductible bucket is full
Coinsurance Max buckets
After the deductible is paid, the insurance
company begins cost sharing with
employees at the coinsurance level until
the maximum is met. When the
coinsurance max is met, the bucket is full.
11. Contributions
The basis of cost-sharing with employees
Common structures include:
• Employer pays 100% for employee-only coverage, employee
must contribute for dependent coverage.
• Employers and employees share the costs for both employee-
only and dependent coverage.
Can be structured according to employee
classification
Subject to non-discrimination rules
12. Plan Offerings
Important guidelines:
Keep offerings to two or three plans
maximum, preferably with a “base
plan/buy up” approach
Do not offer plans more than two benefit
levels apart
14. Relationship Between
Premium and Claims
20% of the population drives 80% of the healthcare
claims
Pools spread risk among many rather than just a few
Premium dollars are polled to help pay large claims
Every group may not have a large claim every year,
but every year groups have large claims
Healthier population = lower healthcare costs = lower
premiums
15. Strategies to Help
Control Costs
Consider higher cost-sharing with employees
Maximize network discounts with an extensive
provider network
Encourage generic substitution and use of home
delivery
Consider use of TeleMedicine services and
Supplemental Insurance (i.e. Aflac)
Educate employees on wise plan use
Encourage preventive care
Consider use of Wellness Programs
16. Reduce Exposure with a
Higher Deductible Plan
Higher deductibles
• Employees still have the benefit of copays from doctor visits and
prescriptions
• Preventive care covered at 100%
• Lowers premium costs
Adding Supplemental Insurance (i.e. Aflac)
• Helps employees with out-of-pocket expenses like copays and
deductibles pertaining to accidents or illnesses.
Adding TeleMedicine Services
• Phone a doctor – Saves time and money.
• Discount Dental, Vision, Prescriptions, vitamins
18. Dental Plans
Often considered an important part of a
benefits package
Very popular with employees
Can be offered as a voluntary benefit
Benefit plan options:
DHMO
PPO
Plan Limits
19. Disability Plans
Disability coverage protects both ministry assets – your people – and
your employees financial security
One in three employees will be disabled before retirement
The vast majority of disability claims arise from common conditions like
cardiovascular disease, arthritis, back pain, cancer, pregnancy or
joint issues
Shot and Long-term disability plans have benefits that coordinate to
provide maximum protection throughout a disability
Can be offered as a voluntary benefit.
Can help lower the cost of worker compensation by covering off the
job injuries and keeping employees from filing false claims
20. Supplemental Insurance
May be offered as a voluntary benefit
Policies include:
• Accident
• Hospital Confinement Indemnity
• Cancer/Specified-Disease
• Critical Illness (Specified Health Event)
• Vision
• TeleMedicine
21. Other Benefits
Life Insurance
Annuities
Retirement Plans
401(k), 403(b)
College Planning
Stock Options