Attracting and Retaining Excellent Employees: Benefits Turn the Key! Mike Robinson Manager,...

Attracting and Retaining Excellent Employees: Benefits Turn the Key!

Mike RobinsonManager, Consultant SupportAccount Development DepartmentAflac Worldwide Headquarters

Aflac_BusinessMatchmaking_8/2/062

Understanding the Three Basic Types of Employee Benefits

Voluntary(Individual Choice)

Core Benefits(Group)

Statutory

No Choice - Mandated by Law

Employer Owned – Employee

can choose to participate

or not

Total Choice- Employee chooses to participate and to what extent


Are Benefits Important?1

Approximately 48% of small businesses offer health insurance to their employees.1

• 41% of firms with fewer than 10 employees offered health insurance.

• 78% of those with 20 or more employees offered health insurance.

1 National Compensation Survey, 2004


Are Benefits Important? (continued)

Poll participants indicated three key reasons why they offered health insurance:

• “It’s the right thing to do”.

• “To attract and retain employees.”

• The ability for the owner to get coverage through the business.


Major Reasons Employers Offer Health Insurance 2

Responses from owners with 1-9 employees:

• Helps employee recruitment 61%

• Decreases turnover 47%

• Increases employee productivity 43%

• Employees expect or demand it 41%

2 AON Employer Benefit Survey 2005


What Kind of Insurance is Offered?3

Employee health insurance (61%)

Disability insurance (41%)

Life insurance (29%)

Dental insurance (24%)

3 NFIB 2003 Business Poll on Compensating Employees


The Basics: Group Health Insurance“Traditional indemnity plans”

• No restrictions on providers.

• Typically the most costly type of health insurance for the employer and employees.


The Basics: Group Health Insurance “Other Plan Options” include:

• HMOs

• PPOs

• POSs

• EPOs


Group Disability Insurance

• Short-term disability:

• Long-term disability:


The Basics: Voluntary Insurance

• Primarily sold at the worksite through payroll deduction.

• Employees typically pay 100% of the premiums.

• Gives employers an opportunity to round out a benefits package at little or no cost to them.


Voluntary Benefits can help with“out-of-pocket” claim costs:

• Deductibles and co-payments.

• Extra fees for employees who get treatments out-of-network.

• Food, lodging, and travel to special treatment centers.

• Loss of income.

• Charges beyond “reasonable and customary”.


Why Employees Like Voluntary Benefits

• Convenience of payroll deduction.

• More choices and control.

• Meet individual and family needs.

• Guaranteed Renewable & Portable.

• Comfortable with employer’s due

diligence; gives them feeling of security.


Most common types of Voluntary Insurance Products:

• Supplemental Life

• Disability

• Accident (Expanded)

• Cancer

• Dental

• Vision

• Hospital Confinement

• Long-Term Care


Think About It…If you do not offer group health and

voluntary insurance benefits, where will employees get the money for medical care, emergencies, and income replacement?

• Savings?

• A loan?

• Family?

• Employer (You)?


Selecting a Provider (Carrier):What Should I Ask?

• What is the company’s financial strength?

• A.M. Best, Standard & Poor’s

• How is the company recognized?

• Awards and industry recognition

• How many times has the company changed rates on its policies?


Selecting a Provider (Carrier):What Should I Ask? (continued)

• How quickly does the company pay claims?

• How are funds distributed?

• Does the company encourage preventative care?

• What kind of service will we get?

• What are the monthly, annual, and lifetime limits?


Selecting a Provider (Carrier):What Should I Ask? (continued)

• Are policies portable?

• Are policies guaranteed-renewable?

• How far back does the company go when underwriting applications?

• What is the definition of “disability”?

• What is the benefits (loss) ratio?

• What is the operating expense ratio?


The Right Formula for Employers

• Start with the basics (core benefits).

• Increase value without increasing your cost (voluntary benefits).

• Help employees save tax money with flex plans, HSAs, and HDHPs.

• Choose your providers (carriers) wisely.

Thank You

Mike RobinsonManager, Consultant SupportAccount Development Department Aflac Worldwide Headquarters

Attracting and Retaining Excellent Employees: Benefits Turn the Key! Mike Robinson Manager,...

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