Www.ehlinsurance.com "Insurance Explained” Jenny Foster, CIC.

www.ehlinsurance.com

"Insurance Explained”Jenny Foster, CIC


Speaker BioSpeaker BioJenny is the Senior Employee Benefits Advisor and Human Resources Manager for EHL Insurance, headquartered in Poulsbo, Washington. She joined the agency in 2002 and holds her Certified Insurance Counselor (CIC) designation and is a licensed agent and broker in Property and Casualty and Life and Disability.

Jenny has a Bachelor of Science in Physiological Psychology from the University of California, Davis. Her focus is helping clients obtain and retain the very best employees and ultimately improving her client company’s profits. She is most passionate about employee education. “If employees do not understand their benefits, how can they value them?”

An active member of our community, Jenny has served on the board of her local SHRM chapter. She enjoys creative writing, traveling, walking, shopping, and serving in her local church. Jenny lives with her husband, two girls, and eccentric Japanese Shiba Inu, Charlotte.

Jenny can be reached at (800) 929-1669 ext. 8170 or [email protected].


House KeepingHouse Keeping

Musical stretch breaks every 20-30 minutes

Candy throwing (hold harmless agreement)

Late return policy following breaks

Participation increases everyone’s fun and ability to learn and retain information

Interruptions are encouraged


Let’s Get It Started…!Let’s Get It Started…!

Post it note participation exercise

Introductions (time permitting)

Health plan quiz (prizes)


Tough StatisticsTough Statistics

23.6 million children and adults in the United States (7.8% of the population) have diabetes.

Total costs of “diagnosed” diabetes in the United States in 2007: 174 billion.

Nearly 7 out of 10 office visits in the U.S. result in a prescription being written.


It’s A Jungle Out There!It’s A Jungle Out There!

High toll of cancer on our nation

Death rates for cancer of the pancreas, esophagus, thyroid and liver are increasing.

An estimated 14% of cancer deaths in older men and 20% in older women can be attributed to excess body fat.



Currently more than 64% of U.S. adults are either overweight or obese, according to NHANES.

Fruit and vegetable intake is not increasing. Red meat and fat consumption are not decreasing.

Average 20% increase in employer’s portion of group health plan premiums since 2005.


Average Health Insurance 2005-2010Average Health Insurance 2005-2010

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005-2010.

$8,167$9,773

$2,713

$3,997

2005 2010

Worker Contribution

Employer Contribution

$10,880

$13,770$1,284Worker

Contribution Increase

47%

20%

27%



Confusing health care reform legislation

Increase in stress-related diseases

National unemployment rate still 9.6%

Average litigation verdict for Chelan County, Washington in 2009 was $350,000.


The Cost Of Hiring The “Wrong” EmployeeThe Cost Of Hiring The “Wrong” EmployeeWhat is the true “cost” to your company?

The lazy employee The dressed up resume The Waffle Mr. Do Nothing The Folder Mr. Conspiracy Theory

Best way to avoid hiring the “wrong” employee? Have a clear, consistent, written hiring process!


The Cost Of Hiring The “Wrong” EmployeeThe Cost Of Hiring The “Wrong” Employee

The WRONG employee will:

Create a negative work environment

Sue your company

Harass/discriminate against other employees

Quit at the drop of the hat

Inappropriately file for unemployment or workers compensation


The Cost Of Hiring The “Wrong” EmployeeThe Cost Of Hiring The “Wrong” Employee

The RIGHT employee will:

Create a positive work environment

Improve profitability

Empower coworkers

Build customer loyalty

Work in a safe manner, lowering insurance costs


The “Right” EmployeeThe “Right” Employee

High cost of retaining the “wrong” employee.

High cost of losing the “right” employee!

What if they are a key employee?What if they take other key employees with

them?What if they go to a competitor?

How do we KEEP the right employee?


How To KEEP The “Right” EmployeeHow To KEEP The “Right” Employee

Maintain some type of employee benefits program that is well understood and valued by employees.

74% of covered employees regard health benefits as an important factor in their loyalty.

Even in these economic times engineers at Google are still allowed to allocate 20% of their time to projects of their own choosing.


The Importance of EmployeesThe Importance of Employees

“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.” - Jack Welch (former CEO, General Electric)

“We want passion for our business... workers who can interpret and execute our mission, who want to build a career, not just take a temporary job.” - Howard Schultz (CEO, Starbucks and Seattle SuperSonics)


Break Time!Break Time!

When we return…

Employer Trends


General Employer TrendsGeneral Employer TrendsAccording to this year’s Kaiser Family Foundation study, 69% of companies reported offering health benefits (up from 60% in 2009).

43% to 60% of organizations are already using an HDHP (to include focus on HSA bank account).

Ten million Americans are now covered by HDHP/HSA plans, an increase of 25% since 2009.


General Employer TrendsGeneral Employer Trends

25% of covered employees have a deductible of at least $1,000.

The average annual premium for family coverage is running at $13,770 (a 114% increase since 2000).

51% of workers with family coverage pay more than 25% of the cost of premium.


General Employer TrendsGeneral Employer Trends78% of covered employees have plans with 3 or more tiers of pharmacy cost sharing.

74% of employers offering health benefits offer at least one of the following wellness components:

Healthy living classesWeb-based resourcesWellness newsletterHealth Risk Assessment

Weight loss programGym membershipSmoking cessationPersonal health

coaching


Employee Benefits Relevant To Retention?Employee Benefits Relevant To Retention?

Workplace benefits have remained resilient despite the recession.

53% of employers report controlling benefits costs as their top objective.

Employee retention (formerly first concern) is still second most important employer objective.



Employees are more satisfied with their benefits than at any time since 2007.

More than 35% of employees are prepared to shoulder more benefits costs to keep benefits they value.

Of employees satisfied with their benefits, 81% say they are very satisfied with their jobs.



69% cite high benefits satisfaction as a key reason to stay with their employer.

The average worker loses 115 productive hours a year due to poor health (cost: $250 billion/year).

59% of employees who participated in company wellness programs said the programs were effective at improving productivity.


Stretch Break Time!Stretch Break Time!

When we return…

Retention Strategies


Retention StrategiesRetention Strategies

Retention begins with an exceptional hiring process.

What culture do you want to have that keeps people from leaving?

Employee Benefits are only as limited as your imagination!

Happy Hour is 9 to 5 book



Flexible work schedules

Worksite fitness or wellness programs

Employee Benefit Statements (Total Comp)

Employee Assistance Programs (Chevron Corporation saves $7 for every $1 spent on its EAP)

Health Advocacy



Education and training

Clear communication

Approachable supervisors/managers

Involvement in decision-making process


Retention StrategiesRetention StrategiesWork-Life Programs can boost both loyalty and productivity. Employees and employers report similar conclusions.

“Many companies have long contended that stress in the home causes productivity loss in the market place...and it does. But research now reveals that stress on the job causes stress at home. In other words, they feed off each other.” Zig Ziglar



Gift cards & incentives (know your employees; $10 to $200)

Free parking and other perks

Company discounts

Cisco is one of the nation’s largest providers of on-site child care with over 800 children enrolled, and parents can track their kids via computer.



Employees want help with their retirement

Maximize employee education!

“Life is full of uncertainties. Future investment earnings and interest and inflation rates are not known to anybody. However, I can guarantee you one thing.. those who put an investment program in place will have a lot more money when they come to retire than those who never get around to it.” Noel Whittaker


Retention strategy group activityRetention strategy group activityPlease form groups and take 2-3 minutes to discuss:

1)What/if any of the retention strategies we discussed are you using at your company? Are they working? Why or why not?

2)What is one retention strategy we discussed today that you might consider implementing? Why?

3)As a group write down one retention strategy you came up with as a group not presented today (be ready to share it with the group).


Break Time!Break Time!

When we return…

Leveraging Employee Education

“Always treat your employees exactly as you want them to treat your best customers.” - Stephen R. Covey


Leveraging Employee EducationLeveraging Employee Education

What do your employee benefits meetings look like?

How often do you have them?

What is employee feedback?

What do you think your employees would score on a health plan quiz?

How many questions do you answer each day/week/month related to your employee benefits?

How much time does this take from revenue focused work?

How much do you think this costs your firm annually?

What if there was a low cost/no cost solution?

Think about how you scored on our health plan quiz.



Low cost or no cost!

If employees understand their benefits; they value them!

Harris study: only 29% of employees reported their benefits education was excellent or very good in 2009.



Highly engaged employees are 26% more productive.

How you communicate your benefits are as important as what they are.

Employees who believe their benefits were clearly communicated are more likely to feel their employer values their work and well-being.



Employ a 3+3 strategy to benefits education.

3+ weeks and 3 ways to learn (visual, auditory, tactile)

Effective benefits communication contributes to a sense of financial security for employees.


Employee Benefit SurveysEmployee Benefit SurveysWhat employee benefits are most important to you?

Medical

Dental

Vision

Life

Disability

EAP

FSA

HSA


Employee Benefit SurveysEmployee Benefit SurveysWhat other benefits would you be most interested in?

Wel

lnes

s


Signing Of The PPACASigning Of The PPACA

“How we might help the American people deal with costs, coverage, insurance, these other issues. And we might surprise ourselves and find out that we agree more than disagree. And that would then help to dictate how we move forward. It may turn out on the other hand there’s just too big of a gulf.” — President Obama


The Chips Are Still FallingThe Chips Are Still Falling

We basically know what the problems are, all of us. We basically know that the current system is unsustainable.“ – Senator Max Baucus, D-Montana

“People are angry. We promised them change in Washington,” - Senator John McCain, R-Arizona

"If you think they want a government takeover of health care, I would simply submit you’re not listening to them.” - Representative Paul Ryan, R-Wisconsin


Health Care Reform Health Care Reform Effective Immediately: adult children covered to age 26

January 1, 2011 January 1, 2014

No reimbursement for OTC drugs unless prescribed (HSA/FSA)

No pre-existing condition exclusions

Non-qualified HSA distributions subject to 20% tax penalty (previously 10%)

No annual limits

September 1, 2011

No lifetime limits on essential benefits

No pre-existing condition exclusions for those under age 19

First dollar coverage for preventive care


Health Care ReformHealth Care Reform2018

Cadillac Tax – 40% excise tax on employer sponsored health plans exceeding $10,200 for individual coverage (dental, vision, accident, disability, long term care, specified disease insurance excluded)

Other Highlights

Small business tax credits available 2010-201310 or fewer FTEs & average annual wage of $25,000 or less (up to 35% credit)10-25 FTEs & average annual wages of $50,000 or less (up to 25% credit)

Non-grandfathered fully insured plans must satisfy IRS Section 105 non-discrimination rules.


What Is An HSA?What Is An HSA?

B A N K A C C O U N T

Tax-FreeIRS Qualified Checking

Account(HSA)

I N S U R A N C E

A High-DeductibleHealth Plan

(HDHP)


Typical HSA PlanTypical HSA PlanDeductible waived for preventive care

No copay. Office visits (“talking”) subject to deductible.

Procedures subject to deductible (“doing”)

Key preventive benefits (deductible waived):Routine care Prenatal carePap smears MammogramsChildhood immunizations Cancer screenings


Typical HSA planTypical HSA plan$2,500 deductible for an individual ($5,000 deductible if enrolled with dependents).

$2,500 out-of-pocket maximum (capped at $5,000 for a family)

80% (in-network); 50% (out-of-network) plan

Worst case scenario: $2,500 deductible + $2,500 out of pocket = $5,000$5,000 deductible + $5,000 out of pocket = $10,000


Prescriptions & HSAsPrescriptions & HSAs

Prescription drugs are subject to the deductible.

Once deductible is met prescriptions are covered at 80%.

Once coinsurance (out of pocket maximum) is met: 100% Rx coverage!


Truly A Legal Tax Shelter?Truly A Legal Tax Shelter?

You can contribute to your HSA bank account via pre-tax payroll deduction.

The IRS allows you to tax shelter up to $3,050 per individual per calendar year and up to $6,150 if enrolled as a family (combination of company and employee contributions).

Employees need to keep all receipts, as this is an IRS regulated benefit.


HSA Tax ImplicationsHSA Tax Implications

Tax Savings Example:

HSA Contribution $1,000.00

Federal (25%) $250.00

Social Sec (6.2%) $62.00

Medicare (1.45%) $14.50

Estimated employee tax savings: $326.50


Traditional vs. HSA plansTraditional vs. HSA plansHDHP/HSA Plan: Traditional Plan:

Family deductible Individual deductible

Deductible waived for preventive care

Deductible waived for preventive care

Rx subject to deductible Rx copays

Rx reimbursable through HSA Predictable Rx co-pays

Tax sheltered account No employee tax advantage

HSA funds grow and roll over tax free; portable (“owning”) No equity (“renting”)

Pre-tax premium & HSA contributions

Pre-tax premium payroll deductions


Words Of WisdomWords Of Wisdom

“In the end, all business operations can be reduced to three words: people, product and profits. Unless you've got a good team, you can't do much with the other two.” -Lee Iacocca


What about dental?What about dental?

Unless perceived as a benefit by employees, dental ROI may not always pencil out.

83% of employees reporting excellent dental health visit a dentist every six months or more.

64% of employees who say they have good dental health also report better overall health.


What about dental?What about dental?Regular dental care is critical in early detection:

Dental health is also correlated to a healthy heart!

Gingivitis Heart burn Lymphoma 20+ conditions

Mouth/throat cancers Diabetes Colon cancer Heart disease


Vision InsuranceVision InsuranceRelatively low cost but high perceived value

Vision providers may be able to diagnose retinal disorders, arteriosclerosis, or diabetes.

Approximately half of employers offer a formal vision plan.

Employers stand to gain as much as $7 for each dollar spent on vision coverage.


Life & DisabilityLife & Disability

3 in 10 workers entering the workforce today will become disabled before retiring!

Life and disability insurance pack a powerful punch for a small premium.

Increasing group enrollment in these benefits

Determine your company’s goals before selecting a product (short vs. long term disability).


Voluntary BenefitsVoluntary Benefits

Dental, accident, specified disease, some STD and LTD programs, supplemental or dependent life and AD&D

Employees offered voluntary benefits are 17% more satisfied with their benefits than those not offered voluntary products.

40% of employees are interested in a wider range of voluntary benefits. Smaller companies less likely to offer.


Unknown Benefits Left On The TableUnknown Benefits Left On The Table

Health Risk Assessments Wellness coaches Weight management Vision discounts Alternative care Hearing devices

Your health plan typically offers discounts on:

Hearing screeningsFitness clubsFamily safety productsSenior discountsRed Cross CPR coursesYour payroll vendor


Your Health Plan WebsiteYour Health Plan Website

Find a preferred doctorAccess documents & formsReview benefits & claimsMail order pharmacy

Compare hospitalsUse wellness toolsLearn about prescriptionsLook up symptomsAccess discounts


Celebrate Your Benefits Portfolio!Celebrate Your Benefits Portfolio!

Life/AD&D coverageTax advantaged HSA accountExcellent dental benefitsVision programShort & Long Term Disability

Dual choice health plansWellness toolsPaid time offFlexible Spending Account (FSA)401(k)


Closing RemarksClosing Remarks

Be wary of hiring the wrong employee!

Leverage Employee Benefits to retain the best.

Get creative with retention strategies.

Harness the power of employee education!


Closing RemarksClosing Remarks

Consider your HSA strategy

Evaluate voluntary benefits

Celebrate your Employee Benefits Portfolio!


Contact InformationContact Information

Jenny Foster, CIC(800) 929-1669 ext. [email protected]


Questions & AnswersQuestions & Answers

Enjoy your time in Seattle!

“Solutions you can understand”

DefinitionsDefinitionsDeductible – the amount an insured person is responsible for before insurance kicks in (i.e. $500 or $1,000)

Copay – a small, fixed amount required by the insurance company that a subscriber must pay typically for office visits or prescriptions.

Coinsurance – you and your insurance company share expenses (i.e. insurance company pays 80%; you pay 20%)

Out of pocket maximum – the financial worst case scenario that an insured must pay in a calendar year before the insurance company pays 100%. The most you would have to pay in a single year out of your own pocket.

Maximum benefit – the maximum an insurance company will pay per calendar year or over a specified period of time (i.e. $2 million lifetime maximum, $1,500 rehabilitation maximum per calendar year)


DefinitionsDefinitionsEmergency Room copay – a small, set amount that must be paid to visit the ER in addition to a deductible when the visit it not serious enough to cause inpatient admission. Typically this copay is waived if admitted.

Generic – Drugs that have typically been on the market long enough to have lost their patent and can be duplicated by other companies, typically lowering their market value and price. Chemically equivalent to the drugs they copy cat.

Preferred Brand name drug – A brand name drug that is still under patent protection but preferred by insurance companies based on efficacy and cost.

Non-preferred brand name drug – A brand name drug that is still under patent protection but not preferred by insurance companies due to safety and or cost concerns. Typically another drug can be substituted.

Pre-Certification – when an insurance company requires that a member call to gain written approval before a complex or costly procedure. Failure to pre-certify can result in no coverage or reduced coverage.


ReferencesReferencesThe Henry J. Kaiser Family Foundation & Health Research & Educational Trust; www.kff.org

8th Annual Study of Employee Benefit Trends; www.metlife.com/business

National Underwriter, Allison Bell 5/17/2010; www.lifeandhealthinsurancenews.com

“Employee Education and Enrollment Education Survey,” January 2010.

American Diabetes Association; www.diabetes.org

Mayo Clinic; www.mayoclinic.com

American Cancer Society; www.cancer.org

National Cancer Institute; www.cancer.gov


ReferencesReferencesNational Health and Nutrition Examination Survey; www.nhanes.org

Magellan Behavioral Health; www.magellanhealth.com

Americas Health Insurance Plans; www.ahip.org

www.benefitsellingmag.com

http://apps.nccd.cdc.gov

“What Employers are Considering,” International Foundation of Employee Benefit Plans

“Behind the Numbers: medical Cost Trends for 2011,” Pricewaterhouse Coopers

WRG. 2006. S. Aldana, PhD Bringham Young University

Www.ehlinsurance.com "Insurance Explained” Jenny Foster, CIC.

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