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Designing Benefit Plans to Attract Top Employees & Make Health Insurance Affordable in Virginia

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Employee Benefits are an integral part of business and culture in the United States. Attracting and keeping top talent to stay competitive in the market is the traditional reason employers spend huge sums on employee benefit plans. If not addressed properly, generational differences in the valuation of benefits in the workplace can easily become a source of unexpected tension that can reduce the value of benefit plans.

Why is all this important? The MetLife 7th annual employee benefits trend study in 2008 indicates that benefit satisfaction has a positive relationship with job satisfaction. Among employees across all generations who said they were highly satisfied with their benefits, 73% were also satisfied with their jobs. Only 22% of those employees who were not satisfied with their benefits were satisfied with their jobs.

It is both logical and true that younger employees have lower health care costs than older workers. Attracting and keeping top talent from the younger generation, known as “Generation Y” or “Echo-Boomers” to demographers, requires specialized strategies. Understanding their culture and tendencies is well worth the effort for employers seeking to keep health insurance costs in check. Generation Y is generally defined as those born between 1980 and 1989. A few characteristics that define this generation are a desire for more communication delivered by high-tech methods along with more choices that reflect their individuality in the workplace.

Keeping younger employees enrolled and engaged in a company´s medical plan is important from a long term strategy perspective as well. Although younger workers are typically among the lowest compensated, employers should carefully consider implementing incentives that increase participation by these workers, as medical plans without enough participation, and premium dollars from younger workers can easily be caught in a “death spiral” where only the older and sicker employees enroll and premium costs skyrocket as a result.

Results from a 2008 MetLife survey show that younger workers want more choices and better communication concerning their benefits than older workers. They want to “choose from the menu” rather than be told “here´s what you get”. Fortunately, many of the most effective cost-saving strategies also appeal more to younger workers. Consumer driven health plans such as Health Savings Accounts (HSAs) and Health Reimbursement Arrangements (HRAs) by their very nature allow workers to choose the benefits that are of higher value to them. The compound effect of a consumer driven health plan´s lower cost coupled with higher participation among younger workers is one of the most effective methods of health insurance cost control.

Employers must incorporate the latest communication tools to engage younger workers in the understanding of their benefit plans. They want to use personalized websites with enrollment, custom wellness and cost projection tools. On-line portals such as Benergy and Employee Navigator have become an important method of both increasing the efficiency of communication and thus appealing to Generation Y employees.

Voluntary or “employee pay all” benefits have become increasingly popular over the past decade, as employers look for ways to control costs and still attract and keep good employees. Generation Y employees appreciate being given choices, and voluntary benefits offer the employee a chance to purchase those benefits that have value for them. Dental, disability income, and group term life are just a few insurance products increasingly offered on a voluntary basis. Payroll deducting employee contributions pre-tax through a premium only section 125 plan further increases value.

Increasing the value of benefits to younger employees without crushing the budget is a worthwhile goal that requires the advice and strategic help of experienced benefits professionals. Contact Advanced Benefit Strategies of Virginia at (757) 536-4554 for more information.

In his career, Gregg has developed specialized expertise in “consumer-driven” and high deductible health plans with HSA and HRA strategies, and sold the first HSA plans issued in Virginia through Assurant Health. He is an expert in analyzing plan design data and has served as account executive for national accounts such as Coca-Cola Enterprises and Tenet HealthCare. Gregg utilizes a strategic approach to establish goals based on each client’s unique culture and competitive environment, and measuring results against jointly established criteria. Gregg Kennerly is a Principal at Advanced Benefit Strategies of Virginia, LLC.
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