• Four Simple Questions That Reveal Your Benefit Program’s True Value

    Think you have an optimal plan? Take this simple litmus test to gauge its effectiveness and value.

    by J. Marshall Dye III

    A common question many of our clients and prospects like to ask is how they can know if their healthcare and benefits program is truly providing value to their employees. It’s a great question. There are so many options when creating a benefits bundle, even the best HR managers may not be able to assemble the optimal mix without a little trial and error.
    But there are four simple questions you can ask yourself when evaluating benefit components, to help gauge their effectiveness and value:

    Question 1:

    Is the benefit easily accessed and used by employees?
    Employer sponsored benefits should be easily accessible without hoops to jump through, waiting periods, applications, review committees and other red tape subtly designed to lower usage rates. Something as simple as a plan that pays for benefits directly, instead of reimbursing employees a few weeks later, can be the difference between a valuable or worthless perk. Low-wage workers in high turnover industries need benefits to help them with healthcare expenses and other insurance products that may make the difference in financial solvency or financial ruin.

    Question 2:

    Is the benefit payroll deducted?
    Employers also need to beware that many niche players in the voluntary benefits market offer products that cannot be payroll deducted. Some companies offering these types of benefits make the pitch to implement these plans with auto deductions from employees’ credit cards, and that makes it “portable” and another big “benefit” to the employee. This is just another distortion. Going around the payroll provider is typically a sign of razor thin margins and should be a red flag that other inadequacies lay beneath the surface.

    Question 3:

    Is the benefit affordable?
    Limited Indemnity (voluntary) insurance is exempt from ACA mandates for major medical coverage. The things that make ACA compliant plans — no lifetime or annual claims caps, for example — do not apply. This means that voluntary insurance products can be provided at a lower cost and the lower cost can be passed on to the employee. Follow the money. If the benefit is expensive with no clear reason, or if the employee could likely afford the plan’s inclusions by saving the premium on their own, then the risk pooling equation is off-kilter and should be questioned.

    Question 4:

    Is the benefit priced at a preferred group rate?
    Employers bring group buying power to the table that employees cannot get on their own in the open marketplace. This gives the employer the ability to provide valuable benefits at even more affordable prices for their employees. Many ancillary products like pet insurance, home, auto, identity theft insurance and legal protection are readily available to the consumer online at the same price. Employees who want these coverages are welcome to get them on their own, but an employer adds no value in these cases.


    Be sure to ask these hard questions when evaluating benefit options. By choosing flimsy, niche programs, employers are not only reducing value, but they can also seriously undermine HR operations and employee satisfaction.

    J. Marshall Dye III is founder, President and CEO of Insurance Applications Group, a technology-forward benefits design and marketing firm creating health insurance products for specific industries and employee groups. For more insights and helpful information, visit the IAG Benefits Resources page.

  • The New Normal: Dealing with Employee Stress

    Concerns over health, finances and family dominate the working class, impacting their lives on a daily basis.

    Depending on the source, we can expect to see a Coronavirus vaccine by the end of the year, or even as early as October. After the devastation of the pandemic, there is light at the end of the tunnel. But will businesses ever really get back to “normal?” That is the looming question. What will be the lasting effects on the workforce, and what will be required of employers?

    First, we need to look at the changes that have taken place in basic business operations since the pandemic started. As we know, controlling the virus started with business shutdowns to reduce the spread. When much of the workforce was mandated or encouraged to stay at home, employers scrambled to implement work-from-home strategies. But there is also a newly designated class of “essential” workers who have had to carry on as usual. While there are numerous ways to classify employees, this is new. With the exception of certain healthcare professionals, essential employees are likely to be the lowest paid workers, in service industries, or production of essential products. Despite the differences, with one class sequestered at home, and the other forced to go out into a newly dangerous work-world; the effect has been an overwhelming increase in stress.

    Surprisingly, as an employer or human resources decision-maker, you are still dealing with the same basic issues, even though there is a seismic shift in the landscape. Your job is about recruiting and retaining the best talent; creating a good workforce management plan; and increasing employee engagement and satisfaction.

    First, it is productive to look at employee issues before the pandemic started. What we find is that stress was already a growing problem. One of the biggest HR issues has been helping workers create and maintain a good work-life balance. The pandemic just exacerbated these problems. MetLife’s 18th Annual U.S. Employee Benefit Trends Study, 2020, reported that 4 in 10 employees struggle to navigate the demands that come with today’s more flexible, “always-on” work-life world in 2019.

    This struggle translates into stress for employees which affects their well-being, productivity and job satisfaction. Employees reported that the top 3 sources of stress in their lives were personal finances, work, and personal or family health, in 2019. Now, according to the MetLife study, 67% of employees are feeling stressed because of the COVID-19 virus. Lower income workers are feeling the effects at a higher rate. 70% of workers who make less than $50,000 a year are stressed because of the virus. The added stress is reported as coming from fear of contracting the virus, fear of a loved-one or friend getting the virus, and the effects of social distancing or isolation. If you overlay that against employee stresses before the virus, you now have a boiling caldron of employee fears.

    Numerous studies have reported an increase in adverse mental health conditions. A CDC study shows that during late June, 40% of U.S. adults reported struggling with mental health. 51% of essential workers reported an adverse mental or behavioral health condition, including anxiety disorder or depressive disorder. In addition to the fears of getting the disease, the virus has had an effect on the top 3 sources of pre-COVID stressors. Financial stress due to layoffs or furloughs has increased. Job stress has increased. Stress about personal or family health has increased. And workers financial stresses and health concerns are closely intertwined. For low-wage workers, ACA plans leave a huge gap in coverage because of high deductibles and co-pays. On average, they have to spend $6,000 in deductibles and co-pays, before they access full coverage. With the average low-wage worker having less than $1000 in savings, an illness or injury could spell financial ruin. So how can an employer bridge these gaps and provide employees with much-needed peace of mind, in face of these uncertainties?

    There is good news. You can provide employer-sponsored voluntary insurance to cover everyday medical necessities, not covered by ACA plans. This voluntary insurance requires no contribution from the employer, and pays first dollar when employees need healthcare services. Not only can the right plan be affordable for workers, the benefits are in demand. BusinessWire reported, “in terms of benefits, employees say life insurance benefits that offer lump sum or cash payments, such as indemnity or critical illness insurance would help ease their stress, if offered by their employer.” According to MetLIfe, and our own studies, employees are seeking help to cover in-patient hospital care, out-patient surgeries, emergency room visits and doctor’s office visits. For the highest impact, employers should look for voluntary plans that are offered at a discounted rate, not available on the retail market. This provides true value, and increases your employees’ goodwill and job satisfaction.

    But needs are changing, as ongoing research shows. More primary care physicians are moving to virtual office visits, a trend that is likely to continue. These visits need to be covered. Mental health benefits are also becoming more important to employees. The insurance industry will have to adapt to meet changing needs.

    Employers have the moral duty to care for the health and well-being of their employees. Employees have always felt like their employer is responsible for their well-being, as reiterated in the independent MetLife study. The same study finds that employees now see benefits as an employer requirement, a belief that has risen to 80%, after the virus. Workers across all spectrums of the workforce are dealing with exponentially increased stress in the new reality. And employers can help provide peace of mind for these workers through voluntary medical insurance, with valuable, usable benefits. It is a win-win solution, that employers need to act upon now.

    J. Marshall Dye III is President and CEO of Insurance Applications Group, a technology-forward benefits design, enrollment and communication firm creating health insurance products for specific industries and employee groups. For more insights and helpful information, visit the IAG Benefits Resources page.


  • When Less is More: The Paradox of Choice

    There has been a growing trend in the marketing of employer-sponsored voluntary benefits that would have you believe that “more is better” and employees demand variety so they can choose benefits to fit their unique lifestyles.

    What we see now are things like prepaid legal counseling, pet insurance, travel insurance, mortgage protection, tuition reimbursement, elder care insurance and many, many more. Employers may feel like if it is voluntary, why not offer it? And we are being told consumers want these choices.  This is a slippery slope, at the very least.

    A Harvard Business Review article published in June 2018 entitled “How Many Choices Do Consumers Really Want” found that consumers almost always tell researchers they like many versions of a product.  Yet, we need to go back to 2000 when psychologists Sheena Lyengar and Mark Leper from Stanford and Columbia Universities, respectively, did a famous study that upended this generally accepted marketing premise. On the first day of the experiment, shoppers at an upscale grocery store were presented with twenty-four varieties of gourmet jam. Those who sampled the product got a dollar off any jam. The next day, shoppers were presented with only 6 varieties. When the time came to purchase, people who saw the large display were one-tenth as likely to buy as the people presented with the small table.

    So why did Harvard researchers find that people almost always say they want more choices? The Harvard study found there were nuances. Consumers’ perceptions of how many choices they prefer change depending on whether they intend to use a product for pleasure or for a functional need. Other studies show that there is a point when consumers get choice overload, no matter what the product or their perceived desire for more variations.

    So how does this apply to your benefits strategy? First, insurance is a functional product. That means it won’t take much to reach decision overload. In his book, The Paradox of Choice, Barry Schwartz writes that when consumers have too many options, they may end up not choosing at all. Schwartz shows the results of employees who were offered fifty mutual funds, versus 5 funds, in which the employer matched contributions. Those who were offered fifty funds were ten percent more likely NOT to enroll in anything at all and walk away from the employer’s matching funds. Decision paralysis is proven when employees turn down free money from their employer.

    You could end up in a similar position. Employer-sponsored voluntary health insurance benefits meet a critical need for low-wage workers, that only you can give them. You bring buying-power and vetting knowledge to the table, that employees cannot get on their own. The high deductibles and co-pays under ACA plans mean workers must come out-of-pocket with thousands of dollars to even get to any coverage. Your voluntary health insurance benefits fill that critical gap in coverage. But when an employer lumps this essential medical care coverage in with dozens of non-essential voluntary benefits, overwhelmed employees may just walk away. This is nothing short of a tragedy. Low-wage workers may be one accident or illness away from financial ruin that could have been prevented.

    The bottom line is you are bringing no value to your employees by offering a smorgasbord of benefits that they could get more easily, at the same price, on their own. In fact, it is a disservice to them if they end up turning down valuable healthcare benefits because it’s too overwhelming to decide. And finally, many of these benefits are not meant to be administered in a payroll-deducted environment. So, on top of everything else, you may end up in an administrative quagmire, with angry employees.

    Voluntary medical insurance is more critical than ever in the world we live in today. Not only can you provide for the health and welfare of your employees, you will find that these valuable benefits will give them peace of mind and increased job satisfaction which leads to better employee retention.

    by J. Marshall Dye III 

    • J. Marshall Dye III is founder, President and CEO of Insurance Applications Group, a technology-forward benefits design and marketing firm creating health insurance products for specific industries and employee groups. For more insights and helpful information, visit the IAG Benefits Resources page.



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