“THE MARKETPLACE RESPONSE TO A DOWNTURN”

Dan Nagle CEBS, RHU

CADP Conference

May 28, 2009

WHAT COMPANY LOGOS WILL LOOK LIKE WHEN THE FINANCIAL CRISIS  ENDS ...

SMALL EMPLOYER RESPONSE

• CLOSED DOORS

• MID-YEAR PLAN CHANGE

• VOLUNTARY PLANS

• PROFESSIONAL EMPLOYER ORG. (PEO)

• MORE CONSUMER DIRECTED BENEFITS (HSA)

LARGE EMPLOYER RESPONSE

• WORKFORCE REDUCTIONS• PAY REDUCTIONS• 401(K) MATCH• VOLUNTARY SEPARATION PROGRAM• SUSPEND CAPITAL EXPENDITURES• AVOID ADDITIONAL DEBT• REVISE BUDGET PROJECTIONS

$1,000,000

BENEFITS OPTIONS

MEDICAL

• NETWORK

• 80% HMO

• RX

• COST SHARING

BENEFITS OPTIONS

DENTAL

• ANNUAL ELECTION

• COST SHARING

• VOLUNTARY PLAN

BENEFITS OPTIONS

VISION

• DISCOUNT PLAN

• VOLUNTARY PLAN

EMPLOYEE ASSISTANCE PLAN

• COORDINATE WITH LTD

TRAVEL ACCIDENT PLAN

• ELIMINATE

BENEFITS OPTIONS

LIFE AND AD&D INSURANCE

• REDUCE COVERAGE

• VOLUNTARY PLAN

DISABILITY INSURANCE

• BASE + BUY-UP

• VOLUNTARY PLAN

CLIENT DECIDED TO:

• REDUCE STAFF

• STREAMLINE SYSTEMS

• STOP 401(K) MATCH

• MEDICAL & DENTAL—50/50%

• VISION—75%

• EAP—COORDINATE WITH LTD

• OTHER PLANS—MAINTAIN AS IS

WHAT WILL EMPLOYERS DO IN 2010?

• DEEPER BENEFITS CUTS

• CDHP

METLIFE’S 7TH ANNUAL EMPLOYEE BENEFITS TRENDS STUDY

EMPLOYERS

• EMPLOYEE RETENTION & PRODUCTIVITY

• CONTROLLING COSTS

• 14%

METLIFE’S 7TH ANNUAL EMPLOYEE BENEFITS TRENDS STUDY

EMPLOYEES

• DENTAL, LIFE, DISABILITY, ETC.

• APPRECIATE WORKPLACE BENEFITS

• FINANCIAL PROTECTION

HOW WOULD YOU FIX THE ECONOMY?

40 MILLION PEOPLE OVER 50 YEARS OLD IN THE WORKFORCE

THREE CONDITIONS:

• UNEMPLOYMENT—FIXED!• AUTO INDUSTRY—FIXED!• HOUSING CRISIS—FIXED!