Employee Benefits Blog

Best-in-class employee benefits evolve with the times and our changing values. We saw marriage equality granted to all people in this country after Obergefell v. Hodges, opening employee benefits to many additional spouses and families. Now, we’re seeing more and more employers (including Fortune 100 and 500 companies) embrace transgender-inclusive health insurance plans as gender identity awareness improves. However, medical professionals have been stressing the importance of transgender health for years.

In 2008, the American Medical Association (AMA) first voiced its concerns for the discrimination of transgender individuals when it published a guidance supporting “public and private health insurance coverage for treatment of gender dysphoria as recommended by the patient's physician.” (This policy was updated in 2016).

In order to truly be an equal opportunity employer, you should have at least one transgender-inclusive health insurance plan in your employee benefits package. It’s not as complicated or expensive as it may sound. In fact, right here in our home state of Arizona, there are quite a few employers already offering such benefits.

Here are some practical issues you should consider when expanding your employee benefits to make sure they include transgender employees and how doing so could help you recruit and retain the workforce of the future — namely, millennials and generation Z, who see inclusivity as an important attribute of prospective employers.

Employers oftentimes worry about how to tailor employee communication for those who are digitally disconnected — meaning they don’t have access to email or the internet — but this concern is largely blown out of proportion.

According to Pew Research, only 11 percent of Americans aren’t using the internet. Research also suggests that “non-adoption [of the internet] is correlated to a number of demographic variables, including age, educational attainment, household income and community type.”

As the numbers suggest, internet adoption is picking up steam, leaving fewer and fewer people disconnected every day — especially among older Americans and those with less education. The research center points out that 86 percent of senior citizens didn’t use the internet in the year 2000, but that the current data shows a dramatic increase in older adults’ online activity (only 34 percent don’t use the internet now). Among those who didn’t finish high school, non-adopters dropped a similar amount during the same time period, going from 81 percent to 35 percent.

Regardless, it’s wise for employers who want to ensure no one in the workforce is overlooked to deploy both digital and more traditional methods of employee communication. In addition, because digital access spans multiple device types (computers, smartphones, tablets) and various ways to attain connectivity (home internet, public internet, cellular data), it’s important to take the following into account when connecting to these audiences:

Employee Communication for the Connection-Challenged

Some employees may be connected, but face some challenges in doing so. They aren’t totally cut off from the internet because they have library access or use the web browser on their smartphone, but they’re not particularly internet-savvy either. Here are some suggestions for making sure these employees can read the communications you’re sending:

There are countless online employee benefits enrollment systems out there today. While each is designed to make everyone’s lives easier — employees, employers, insurance carriers, payroll providers and benefits advisors alike, some don't quite live up to the hype.

While the initial transition from paper enrollment to any one of these online enrollment systems typically yields tremendous upside from an efficiency, speed and data integrity perspective, it's highly unusual for an enrollment system to be fully optimized for peak performance at first launch.

Tweaking and perfecting the system in the quest to maximize performance and outcomes should be an ongoing activity within your organization. Most agree that the goal of optimizing these systems is to make them as easy and intuitive as possible for your employees to use, while also guiding educated, informed and appropriate employee benefit decisions for your workforce.

Much of what’s considered “best practice” in online benefits enrollment has been adopted from best practices in eCommerce. After all, enrolling in benefits these days isn't that far off from purchasing something off Amazon, comparing cars at AutoTrader, or configuring a laptop at Dell.

While this list is by no means complete, here are some best practices you should consider adopting to optimize the configuration of your online benefits enrollment system for peak performance.

Capitalize on Nudge Theory 

While "nudge theory" won Richard Thaler a Nobel prize in economics, the concept is quite simple. It’s a subtle policy shift that encourages people to make decisions that are in their broad self-interest.

Put into practice, it simply means using "opt-out" as the default option for certain benefit selections. This requires someone to actively deselect an option. Failure to do so results in auto-enrollment in that benefit. A great example of nudging is pre-selecting a 3% contribution into an employee's 401(k) vs. leaving the field blank. This simple change will have a massive impact on 401(k) participation.

Maintaining a competitive edge often comes down to retaining a talented workforce. The growing popularity of so-called “portable” employee benefits, such as Health Savings Accounts (HSAs), certainly hasn't made this any easier.

Employers trying to entice employees to remain loyal may want to focus their efforts on providing benefits which are simply too good to surrender. Offering benefits that accrue significant value over time, or improve with tenure, will help keep employees from abandoning that progress for greener pastures, lest they have to start over someplace else.

How the ACA Impacted Employee Retention

Prior to the passage and implementation of the Affordable Care Act (ACA), there was considerably less job mobility for many Americans with pre-existing health conditions. The moment insurance carriers were barred from discriminating based on pre-existing conditions, the need for individuals to stay with a company for insurance reasons essentially vanished. Many employees who were previously stuck in their jobs for fear of losing benefits were now free to explore other opportunities.

Similarly, many budding entrepreneurs set off to start their own businesses while acquiring individual health insurance via the ObamaCare exchange or through other means. One could argue that this new freedom was a benefit to both employers and employees — after all, who really wants an employee who is sticking around just because of benefits? Nevertheless, this new found “employee mobility” has made the search for "sticky" benefits all the more important.

Group health insurance renewals, a critical part of the employee benefits planning process, are time consuming and stressful for everyone involved — employers, employee benefits brokers, and insurance carriers alike.

We’ve yet to meet an employer who enjoys hearing about how their rates are likely increasing...yet again. And no employee likes to find out their premiums, deductibles, and copays are going up, let alone that they have to choose a new medical plan and a new set of healthcare providers because you’re changing carriers — again.

As an employer, it’s also hard to know if you’re getting a good deal on your health insurance renewal as the components of pricing are complex and seemingly nebulous. It’s not all cloak and dagger though, and with knowledge comes understanding. Therefore, it’s important to understand what goes into a health insurance renewal so you and your employee benefits advisor can negotiate better rates for your business.

The Three Major Purposes of Annual Health Insurance Renewals 

While the process can be tedious, annual health insurance renewals serve three major purposes:

• First, they provide employers with the opportunity to switch insurance carriers or health plans, as well as adjust contribution levels, prescription drug formularies, eligibility rules, and coverage decisions (just to name a few of the many plan design options which can be modified).
• Second, they allow insurance carriers the opportunity to update plan options, rules and regulations, and most importantly, reassess the estimated risk of covering your group for the upcoming year.
• Third, they allow both insurance carriers and employers to renegotiate pricing for the upcoming year.

Health insurance renewals don’t have to mean a change in carriers — in fact, there’s a lot to be said for sticking with the same providers year-after-year. But that being said, there’s nothing wrong with trying to get a better deal, especially if circumstances have changed and most especially if you can make a fact-based case for your appeals. This is much easier to achieve if you work with an employee benefits broker with underwriters on staff who can negotiate on a peer-to-peer basis with carrier underwriters (more on that later.)

One of the most common questions we receive as an employee benefits broker is how much the average employer contributes to their employees’ health insurance premiums. It’s a tough question because there are a lot of different factors involved, but luckily, there are some excellent resources available to help us source reliable answers.

In addition to our own proprietary client roster, one of our favorite resources is the annual Kaiser Family Foundation (KFF) Health Benefits Survey because it succinctly summarizes data from an accurate (and broad) representation of employers across the country and provides charts and graphs to make the information more easily digestible. This allows us to show our clients trends over long periods of time and perhaps help predict what they can expect for the upcoming year.

Here’s what the 2017 KFF Health Benefits Survey reported for employer contributions to health insurance and how the data compares to the previous benefits year.

Today, many employers are facing an interesting phenomenon companies have never experienced before. There are at least three generations making up the bulk of workforce, with two other generations filling things out at both ends of the age spectrum. Each of these generations has a different set of priorities, which presents unique management and employee benefits challenges for employers. Each of these generations is influenced by the period of time in which they were raised; their work lives are shaped by world events, cultural phenomena and personal experiences.

How is one employer supposed to make three (or even five) generations of people happy? Managing employee benefits across a multigenerational workforce might not be easy, but it’s certainly not impossible.

Defining the Generations

Whether you have 50 employees or 500, chances are you have a mix of generations working for you. So let’s first discuss the various generations before diving into multi-generational benefit design. Here's a breakdown of these five groups.

The Silent Generation

Born between 1928 and 1945, a good portion of this generation grew up (or was born) during the Great Depression and were named such because, at the time, it was believed children were meant to be “seen and not heard.” The older portion might have served toward the end of World War II. People in this generation are at least 72 years old as of 2017. This portion of the workforce is rather small at this point — about 2 percent.

Because this entire generation is above the traditional “retirement age,” most of the people still working in this age bracket are in high level positions, while others are running their own businesses or still working in a family-run company. That said, there are some who work in part-time, hourly and seasonal positions primarily to keep themselves busy and to interact with people.

When your company is healthy and growing, it’s not uncommon for the subject of a merger or acquisition to come into play. They can be excellent strategic moves to help you gain additional distribution, capital, access to patented processes, or simply broaden your customer base.

But while the CEOs, CFOs, and COOs are working out the details of the sale, your HR department will be dealing with the day-in-day-out human component. They’ll be fielding questions from concerned employees, figuring out how your employee benefits will be affected, and looking for possible solutions.

CHROs have a tough job ahead of them during mergers and acquisitions and we have some experience in assisting employers through the process. Here’s what we’ve learned and how you can apply it to your own employee benefits issues in mergers and acquisitions.

The Role of HR in Mergers and Acquisitions

Mergers and acquisitions are complicated endeavors, involving an incredible amount of work and attention to detail. Because HR departments are the ones who deal with the human component (arguably the most valuable in any company), they’re tasked with some of the most difficult pieces of the puzzle.

After all, a case can be made that human resources is far more complex than most other departments because every person is different. Each employee has different needs, motivations, and goals, which will cause each person to feel differently about the merger or acquisition. Some may feel apprehensive or scared, while others may be excited at the new possibilities.

As such, the failure to reach objectives after a merger or acquisition is oftentimes blamed on the human resources department. Reasons such as “incompatible cultures, [differences in] management styles, poor motivation, loss of key talent, lack of communication, diminished trust and uncertainty of long-term goals” are typically cited as barriers to success.

But if HR-related issues can be blamed for failure, there’s no reason they can’t be praised for the successful merger of two companies or acquisition of another. We’re willing to bet that the objectives behind such business strategies couldn’t be obtained without talented HR professionals easing the transition.

At this point, everyone knows the Affordable Care Act (ACA) requires all employers with 50 or more full-time equivalent (FTE) employees to offer affordable coverage to their workforce. This requirement is called the employer mandate.

What’s less clear for some employers is to whom the coverage must be extended. Do employers have to offer family health insurance coverage? Dependent health insurance? What about coverage for spouses? The answer is pretty straightforward, so let’s dive right in and clear up all that confusion.  

ACA Requirements for Employers

The ACA requires that applicable large employers (ALEs) offer affordable coverage to their full-time employees and their dependents up to age 26. However, the law makes no requirement for spousal coverage, nor does it mandate that employers pay for any portion of the premium for dependents.

So in short — employers are not required to offer family health insurance. That being said, many employers choose to offer coverage for spouses and families, regardless of whether dependents are older or younger than 26 years of age. In addition, most choose to subsidize a portion of the premium as well.

One trend picking up steam in the past decade is to only offer spousal coverage if the spouse isn’t able to obtain health insurance through his or her own employer (or if the spouse doesn’t work).

Another common practice is for an employer to levy an additional surcharge for spouses who can obtain insurance through their own employers, but prefer to be on their spouses’ insurance instead. The reasons for doing so are often wide and varied. Nevertheless, the surcharge is often relatively minimal — perhaps around $100.

At this point, nearly every business, regardless of size, has a social media presence — as does nearly every single one of their employees. Like it or not, social media isn’t an option for your company anymore. It’s basically a must-have.

Customers not only expect you to have an easy-to-use website, but they want to see you on social media sites such as Facebook, Twitter, Instagram, Snapchat, and plenty of other platforms you probably wish you didn’t have to think about. Of course, this means you need to develop strong social media guidelines for your employees to follow, while they’re on and off the clock.

Social media creates an obligation on the behalf of your company to have trusted, well-trained, and responsible staff representing your business online. It’s so easy for an employee to misspeak or get baited by an annoying internet troll. Social media also provides ample opportunity for your workforce to talk about your business when they’re off the clock. This can be a good thing, but it can also backfire if people believe your employees are speaking on the behalf of your company, even while on their personal pages.

While social media can be a frustrating venture for any business, it also creates an environment where you can interact on a more personal and immediate level with customers (both current and prospective). It expands the reach of your brand while increasing brand interactions.

Social media is here to stay. Because of this, many companies have developed social media guidelines  — both for staff members who work in the marketing and customer service departments (who will be speaking on the behalf of the company), as well as employees outside of those departments who simply engage in social media on a personal level. Social media guidelines don’t tell employees how to use social media in general, but rather describe how it’s appropriate to use social media when talking for, or about, the company. You can download some excellent sample policies here. 

It’s safe to assume the vast majority of your employees are on social media. Some will be more active than others, but nearly everyone will have a presence on at least one channel — more than likely, multiple social platforms, with the most popular being Facebook, Twitter, and Instagram for personal use and LinkedIn for professional networking.