Employee benefits: The personal touch

Healthcare reform is a growing challenge for many business owners in the long-term care (LTC) industry. Whether the government believes it or not, you have a job to do—aside from sort out your organization’s healthcare plan—and so do your employees. You should already be thinking about how to reform your benefits program as costs rise and government legislation creates increasing complexity. If you don’t, an excise tax coming into effect in 2018 on high-value benefits plans (the “Cadillac Tax”) will apply even heavier financial burdens to your operation. You’ll be forced to consider smarter options or pay the price later.

This issue is huge. As early as 2012 a Deloitte study found that 75 percent of U.S. employers said that managing healthcare costs was one of their greatest worries.¹  For this reason, 68 percent of employers had said they planned to reevaluate their employee benefits strategy to offset the impact of U.S. healthcare reform. 

Add to these pressures the panic, confusion and employee resentment over a declining benefits offer. But it doesn’t have to be like this, especially in the LTC industry.

Both carriers and enrollment firms see LTC facilities and their ownership benefiting most from the services and products they offer since these businesses will have many of their employees located in one place and typically employed in low- to medium-level income roles of a very similar nature. This means that the costs related to benefits provision are more predictable and easier to model—music to the ears of any carrier.

Employee-tailored benefits

Second, a new trend in employee benefits provision should be a welcome silver lining from the otherwise cloudy scene that is the Affordable Care Act—the growth and evolution of voluntary benefits. Traditionally positioned outside of the provision of core medical coverage, these packages provide personalized add-ons to your employee health plan and can bridge important coverage if you are forced to reduce your plan’s value. Hospital-indemnity or critical illness plans provide for fixed pay-out amounts in the event of a diagnosis of particular types of high-cost illnesses (e.g. cancer) or hospital stays. Such examples of personalized benefits underscore the importance of providing employees with coverage they might otherwise not have access to and a forum for more consumeristic behavior in selecting benefits.  

What’s more, the commissions generated by introduction of a suite of personalized benefits can often offset many of your costs for employee education and communication. Employees are generally more content when they have an opportunity to choose their own voluntary or “personalized” benefits. When they get the message, “My employer wants me to select coverage based on value and not cost,” they tend to choose a more efficient array of benefits. These chosen benefits meet their needs and the needs of their families better, and they are ultimately less expensive for the employer.

Explain, explain

The only problem with the use of voluntary benefits is that extra care and attention must be placed on communicating what they are and what options your employees have. Unlike many other sectors, where the provision of voluntary benefits services is straightforward and uniform, the LTC industry is beholden to many special circumstances that really require an employee benefits consultant that has a specialist practice focusing on LTC facilities and services. Here’s why:

• This is a round-the-clock business. An LTC practice specialist will appreciate that many staff members will be unavailable to enroll during normal business hours because they work night shifts.
• Even workers that hold day shifts can be hard to communicate with, as they often need to cancel appointments at the last minute due to the immediate needs of the people they care for.
• Unlike many businesses, LTC providers do not always provide their employees with work emails or individual computers. This can make the use of innovative education and enrollment technology solutions such as online platforms, multimedia messages, eMarketing emails, eBooks and apps difficult to implement, or perhaps neutralize them as an option in favor of paper. There is still a strong expectation that employee engagement through one-on-one communications/education will be in person.

Because of these likely conditions, we recommend that LTC business take on the services of a broker that specializes in this industry. Neither you nor your broker can afford to get employee benefits enrollment wrong. A generalized broker may say anything necessary to secure the engagement or may be understaffed or too inexperienced to optimize your results.

The right broker must be willing and able to go the extra mile to ensure your voluntary benefits program is carried out as efficiently as possible. A broker needs to be prepared to visit your sites and meet with each employee in person to educate and enroll them in your program. If that isn’t possible, then they must be positioned with a trusted enrollment partner to ensure a well-tuned and efficient process. They will need to be prepared to take paper forms and digitize the information so that it can be returned to the carrier in an electronic format. If they aren’t prepared for this process it will be very easy to lose information and miss deadlines.

Upon selecting their voluntary benefits, your employees will see the investment you have made in their coverage, and more often than you might expect, will “buy down” their core medical coverage and backfill with voluntary/personalized benefits instead—since they may not need the level of coverage you had anticipated or provided in the past.

Voluntary benefit-based strategies are a great way to supplement and adjust your core benefits offering, mitigate against the financial impact of the 2018 Cadillac Tax and engage your employees more actively than ever before—resulting in improved satisfaction for them and a better financial outcome for you.

1. Deloitte, 2012 Deloitte Survey of U.S. Employers: Opinions About the U.S. Health Care System and Plans for Employee Health Benefits (2012).

Joe Torella is East Region President of Employee Benefits Division of HUB International and is an expert speaker and advisor on cost, quality, access and the ACA. He can be reached at Joe.Torella@hubinternational.com

Douglas Siegel is Vice President of Employee Benefits for HUB International Northeast and lectures nationally on healthcare reform and the impact of the ACA on businesses. He can be reached at douglas.siegel@hubinternational.com

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