Formula for Reduced Benefits Cost: Combining Wellness Programs With Self-Insurance Plans

Not Sure If Self-Funding Can Work for Your Employee Benefits? Implementing a Comprehensive Wellness Program Can Minimize the Risk

Even the most optimistic of CFO’s and HR Executives are given pause after taking a hard look at the current U.S. Health Care landscape. One needs only to focus on three troubling facts to understand the problems that Employers face as they wrestle with increasing budgets, lower profits and increasingly expensive employee medical benefits heading into 2012 and beyond.

One: the cost of health care has risen over 131% in the last 10 years and there is no indication this trend will ever slow down.

Two: the American workforce is unhealthy – over 33% of the U.S. population have reached obesity levelsan d over 67% are overweight, which in turn has resulted in an alarming increase in the incidence of chronic diseases like Diabetes, Heart Disease, Stroke and Cancer – at least 70% of which are caused by poor lifestyle.

Three: the drop in productivity due to an unhealthy workforce equates to a loss of over $73 Billion annually. If you factor in time lost due to hypertension and stress, that figure is closer to $300 Billion per year.

In an effort to offset these elements in hopes of flat-lining and in some cases, even reversing these trends, more and more Employers are searching to find cost-effective solutions. Needing to discover a blueprint that will allow them to build a better benefits cost-containment model, businesses look for a strategy that can provide both improved employee health and better worker productivity while at the same time reduce the crippling costs that over-utilization of medical benefits and worker’s compensation claims precipitates.

Commitment to Wellness

Wellness programs are nothing new; they have been around in one form or another for quite some time. Corporations have been implementing some form of wellness promotion platforms since the 1980’s and the concept of workplace fitness is even twenty years older than that. By the late 1990’s, 90% of U.S. businesses had some form of Wellness program or health promotion. Today, through both advancements in medical technology and the evolution of wellness practices, robust Wellness plans that are custom-designed, fully implemented, supported by management and embraced by the workforce have a proven 6-to-1 return on investment. The benefits are as advertised: increased productivity, less absenteeism, greater worker morale and, significantly, lower worker’s compensation and group medical rates.

With a risk-assessment questionnaire, companies can determine the relative health of their workforce and the level of investment they should make when designing a custom-tailored wellness program. Besides the established benefits it provides for the business and the employees, wellness programs will also allow for a health plan report to be compiled that will indicate the risk-tolerance level a company may face as it considers an more workable alternative to Fully Insured medical plans: Self Insurance.

Alternative Funded (Self-Insured) Benefits Plans

Smart businesses can leverage their employer-sponsored Wellness Plans so they can remove themselves from commercial insurance pools and get into Self-Insured plans that take advantage of a now healthier worker census. Instead of paying expensive Fully Insured Premiums to the insurance carriers, businesses can choose to simply pay their own medical claims instead. They’ll know that when the annual benefit claims are less than the claims funding, they will be able to put a good portion of those funds back in their pocket. With their Wellness Program effectively functioning and their greater worker health risks minimized, the ability to operate under their claims funding level and even to forecast annual benefits budgets is attainable. For the unexpected event that may cause a catastrophic claims situation, there is by design a stop-loss coverage element in place to provide a ceiling on claims expenditures. Self-insured plans also offer flexibility in design that fit employee’s needs but also contain the ability to change the plan according to the company’s annual health plan reports.

Below are two examples of self-funded options based on situational preference:

  1. NO RISK MODEL– Smaller and/or risk-averse employers can access self-insured medical programs with an aggregate stop-loss of 75% of expected claims, creating the fixed cash flow of a fully-insured program but the savings and flexibility of a self-insured program.
  2. Premium-equivalent rates are based on expected claims
  3. Premium-equivalent rates reflect the maximum amount the employer will need to pay
  4. If claims are lower than stop-loss level, extra payments will be credited to the following year
  5. Inc. Vision and Dental

  1. RISK-SHARING MODEL– Larger and risk-tolerant employers can take on an additional degree of risk and thus increasing savings by adding specific stop-loss levels and setting their aggregate stop-loss rate at 115% or 125% of expected claims.
  2. Premium-equivalent rates are based on expected claims
  3. If claims exceed expected claims, employer will have to fund account up to stop-loss level
  4. Employers will not have to pay for claims that are over the stop-loss level
  5. Employers will be provided with premium-equivalent rate and maximum liability rate
  6. Employers can also select specific individual stop-loss levels

HOW SAVINGS ARE DEVELOPED:

  • 4-5% Network Savings
  • 1-2% Clinical Savings
  • 3-6% Stop Loss Savings
  • 2-3% Premium Taxes
  • 2-5% Elimination of State Mandates
  • 6-10% Carrier Margin

Potential Savings: 18% – 30% over Fully Insured Plans

Summary

While no one can predict exactly what impact the Health Care Reform Bill will have on Group Medical expense in this country, it can be reasonably assumed that much of the additional cost of the new, larger insurance pools or exchanges being created in 2014 will be carried on the backs of the existing employee-based benefits plans. With future increases of 25% in Health Care costs being estimated by insurance industry insiders, U.S. businesses will be desperately searching for alternatives to high-premium, fully insured plans.

No further documentation is needed to show that Wellness Programs succeed in any size business, and the corporate world has known for some time that the Alternative Funding Benefits Model is effective in flat-lining – if not reducing – the costs associated with Health Care. Now, with the development of new Alternative Funded Plans for smaller companies, there is every opportunity for businesses of any size to take advantage of this combined approach to benefits planning and finally regain control and predictability over their benefits future.

About Tevis Insurance Solutions:

Tevis is an Insurance Brokerage in Roseville, CA that specializes in alternative funded group medical benefits. They also offer voluntary benefits, fully insured plans, consulting services and custom plan administration.

Workforce Management – The Best Solution for Effective Performance

How workforce management enhances performance of your staff

Everything starts with one question: what is workforce management (WFM)? Workforce management describes a set of activities and approaches to managing staff in the way that is the most efficient, effective, and in the way that results in a higher employee engagement-all while still delivering the best customer experience.

Given the fact that WFM deals with numerous employees, and numerous ways to manage and lead them, it is a very sensitive topic. For one thing, successful WFM can seem a bit expensive, and employee costs already represent one of the largest expenses in an organization. Secondly: sensitivity. Making the wrong decisions in relation to your employees may lead to lower employee morale and disengagement.

So, what are the best levers to use to drive performance via WFM? Read on to find out.

WFM component – smart training and coaching

One of the key objectives of workforce management is to provide enough coaching and training for your staff to ensure that they can continuously grow and develop into future leaders and/or experts.

Here are some key strategies for achieving that objective:

The first thing you need to remember is to coach, coach, coach. It is essential that your leaders (e.g. team, department, etc.) dedicate enough time to coach staff and equip them with the additional skills that are required to complete their tasks in a proper way. Focusing a significant part of your workforce management approach on both hard and soft skills will ensure that the whole team works smoothly and professionally.

You also need to remember to cross-train your staff members. If some staff members are cross-trained on the jobs of other teams, it means that they are able to jump in and help out when they are needed (e.g. in the event of unexpected workload peaks due to unplanned events in insurance or RRSP seasons in banking).

Next, put a proper learning management system (LMS) solution into place. Having a proper and modern LMS solution ensures that you can offer your staff necessary training tools, thereby equipping them with the skills they need. These solutions can be a learning platform to providing knowledge, but they can also be used to verify existing knowledge (e.g. in the form of interactive surveys). Skilled and knowledgeable staff members will contribute to the overall operating efficiency of your company.

Don’t forget to capture and leverage your learnings. Holding weekly meetings in which you can discuss every past week allows you to make sure that key learnings are incorporated into the company’s future planning, and that allows you to manage your workforce even better.

Finally, ensure you plan for proper skill levels and mixes. Having operations teams that consist exclusively of experts might be too expensive, but having an operations team of all junior members won’t be efficient, either. It is important to target a particular skill mix in your workforce; you want to ensure that there are a few junior level employees and a few senior employees. This will ensure the newer employees are gaining training and experience from those who are able to coach them and help with the complexes cases. In addition, some team members should be cross-trained on the tasks other teams complete to ensure resources can be borrowed and lent across teams, adding to your overall operational efficiency.

WFM component – Creation of harmony in teams

Managing a team of people is not easy. There are many topics that a skilled workforce manager should keep in mind to maintain focus on both efficiency and making sure people are happy. Below are some examples of the best management practices:

The first and foremost step is to ensure strong leadership. Strong leaders, both at team and department levels, represent an essential component of efficient and high-performing operations. Great operational leaders can lead, engage, and manage teams on a day-to-day basis. It is important for the workforce managers to be visible on the floor and to be close to operations.

To maximize operational efficiency, you then need to minimize unnecessary meetings. Many organizations have too many meetings. While meetings are important to operations, it is important to make sure that no unnecessary meetings are taking up people’s time-and to ensure that everybody comes prepared to the meetings that do take place. This can save many hours per week and will significantly increase operational efficiency.

You also need to manage your teams in cycles to maximize your company’s operational efficiency. Adhoc/ firefighting management styles confuse people and result in lower performance. Setting up a cadence of activities to manage operations and teams will help drive better performance results (e.g. use Monday to discuss the new week; use Tuesday to review the previous week, along with key insights; use Wednesday to plan for the coming week; or have daily morning huddles). There are many pieces to a successful, recurring operations management routine.

Don’t forget to use voluntary free days (if there is not enough work). If there is not enough work on some days, like just before or after holidays, some operations staff members might be happy to get an unpaid day off. Check with your staff to see if this is an option-it decrease your overall costs, and it can typically result in higher employee engagement.

Finally, remember to leverage your remote staff. As an experienced workforce manager knows, there are many benefits to leveraging remote staff, including: lower real estate and utility costs, decreasing time spent in traffic, and increasing access to specific resources and skills that can not be accessed otherwise (e.g. due to geography, family situations like parental leave, etc.). The most important thing here is to design the program in the right way: you want your employees to perceive it as a reward rather than a simple perk.

WFM component – Time Management and Future Planning

Intelligent time management is another important component of WFM. There are only so many hours in a workday, and they need to be used wisely to ensure effective overall operations.

Here are a few tips that can help you achieve better time management throughout all aspects of your company:

First, ensure flexible, real-time workforce management. Workdays don’t consistently operate at the same level throughout their duration. There are intra-day workload spikes and quiet times – that’s where real-time workforce management can drive efficiency, softening extremes by providing additional resources (in case of workload spikes) or letting people leave earlier (as unpaid hours off on a voluntary basis during the quiet times).

However, you also need to monitor trends and embed them into your planning. Knowing what the trends are and embedding them into your workforce planning is important because it allows you to right size your organization as work volume grows or decreases-otherwise you are risking an increased backlog and lower performance.

Improving your resource forecasting is another important strategy for maximizing time management. Knowing what resource demands are in your company’s future and forecasting for those properly means you will end up with significantly fewer wasted resources as a result of being able to hire exactly the right number of people instead of “a few extra positions just in case.” That is where workforce management solutions like Reveal software can help.

However, don’t forget to account for seasonality in your planning. Workforce planning should consider the difference in workloads that occur during different seasons-otherwise you run the risk of having too few or too many resources, and that heavily impacts performance (e.g. the beginning of winter is often a more work-intensive time for auto insurance due to the first signs of frost/ice on the roads).

Finally, leverage your regular huddles to maximize efficiency. Spending 15 minutes per day checking in with the entire team and aligning on the tasks for the current day goes a long way. It brings everybody onto the same page, demonstrates leadership, and drives transparent team communication, and that results in higher performance as well as higher operational efficiency.

Workforce Management Takeaways and Conclusions

We hope these insights will help you use WFM to boost your operational performance. If you want to accelerate the process, you can address firms that specialize in workforce management consulting and deploy their WFM solutions across various industries.

The Advantages of Affordable Small Business Health Insurance

There are several benefits of affordable small business health insurance schemes. These policies allow those who are working at small businesses the same possibilities pertaining to insurance that bigger firms offer. This, in itself, is an attraction for potential employees to join their workforce, which is a beneficial motive for persons to take jobs at smaller firms, which is sometimes a drawback.

Personal medical plans additionally express that a tiny enterprise actually cares about its workers, and is equipped in offering the same programs as larger more lucrative employers. Presenting insurance too demonstrates the constancy of a company, which is a feature that lots of smaller firms are short of. Potential employees are dubious about joining a businesses team that does not demonstrate the features of a steady and progressive entity.

This sort of employer induced insurance offers staff peace of mind, by insuring themselves and their families. It makes for a stable and beneficial bond. The chief consideration is that of affordability. An insurance plan has got to be acceptable in price for equally the employer and the member of staff, without jeopardizing the quality and the benefits for the insured member of staff. There are usually options that can be selected, as to the fittingness and requirements of the workforce, with relation to the number of dependents of the insured, their dob’s, current medical issues, and the like.

With the impression of healthy encouragement from someone’s employer, comes more productivity and allegiance from the workforce in regard to the business in which they are working.

This feature is sufficient for a small business to comprehend that insurance for their workforce leads to future success, Because of this, their staff will work a longer length of time, due to the benefits that are existing.

The constant issues, relating to growing overheads in relation to a small organizations insurance, are escalating. There are a few smaller employers that feel the need to cut out health insurance for their workers because of lack of money.

This may change as the national health care plans alter, but for the minute many smaller firms undergo the monetary load of these programs.

On the other hand, if a small firm is so strapped on funds from the provided health insurance that it is putting this business in jeopardy, then this coverage is not achievable. It may not be a good thing for whichever party implicated, since there is a prospect that these benefits might turn out to be a detriment, in particular if the firm is closed down.

With health care reforms, come the possibility of new improvements and help for those small firms who are struggling to insure their employees. The question is, will this backing come rapidly enough for these firms? The answer is not known, conversely just the promise that reforms are on the way is enough for lots of smaller employers to hang in there until more affordable small business health insurance is offered. Until then, it is hoped that these companies will be able to both survive and insure their employees.