Case Study: Level Funding Plus Group GAP Saves Organization $232,841.51

Every year, millions of seniors purchase Medigap plans to fill in “high deductible” holes in Medicare parts A&B. When surveyed, 94% either “like or love” their health plans. Using a similar strategy, you can get similar results – improving available resources for both your organization and its employees.

The key is to combine a competitive “Level Funded” High Deductible Health Plan with a Group Supplemental Health or “Insured HRA” GAP plan. With the right fully insured GAP plan, you can offer seamless supplemental deductible/coinsurance coverage to your employees, similar to how Medigap plans work for seniors. Employees even get to choose their level of deductible protection. To illustrate, we’ve created a case study:

Current: 96 Employee Group on a National Carrier $1000 deductible 80/20% plan with max OOP of $2500/person. Renewal: 13% Increase.

Solution: HDHP Level Funded Plan + Supplemental GAP Plan (Insured HRA).

Results: Level Funded + Insured HRA provides coverage similar to the current plan (Max OOP of $2150 per person) while saving the organization in question $232,841.51 over renewal figures: View Summary

To learn more about these and other HDHP solutions, contact Chelten Consulting.

Expense Recovery and Cost Reduction – How Much of Yours Is Going to Waste?

Businesses hemorrhage funds for a variety of reasons. Among the most substantial are overpaid invoices, poor utilization of tax incentives, improper filing classification, and related expenditures. These are relatively easy to correct through expense recovery and cost reduction programs like Stryde. The real question is – then what? Savings yields have become trivial, conservative stock portfolios don’t do much better, and more aggressive avenues tend to present significant risk.

This is where Business Owners’ Retirement Plans become so valuable.

  • We represent Commercial Lenders willing to lend your business $1,000,000 or more on an “interest only” basis.
  • These funds are then deposited into an Index account, for the Owner’s benefit, free from market risk, growing tax deferred.
  • At retirement, the Owner can receive lifetime proceeds “tax free”.
  • At the Owner’s death, the loan is repaid and any remaining funds are distributed to the Owner’s beneficiaries, tax free.

A key component of saving for retirement in this manner is how the money interacts with taxation:

  • Tax Deferred Growth
  • Tax Free Lifetime Distribution
  • Tax Free Distribution At Death

To learn more about leveraging your business to retire well, contact Chelten Consulting.

Top 3 Ways to Improve Employee Understanding of Company Benefits

Human resource (HR) benefits account for 30 percent of compensation spending in most organizations; companies seek to ensure their return in investment (ROI) is as high as possible. At the same time, employers want employees to understand and appreciate the value of their benefits package. If employees are not aware of the full range of their benefits, or don’t understand how to utilize their benefits, a lot of money is being left on the table in unused benefits.

Employers spend a significant amount of money to provide their employees with an attractive compensation and benefits package. But for some workers, understanding their benefits can be challenging, creating a situation where they do not access or fully use their benefits. And, at the end of the day, money left on the table when it comes to benefits is a lost opportunity for your employees and your company because a comprehensive benefits package increases employee satisfaction and reduces turnover. Understanding their benefits can help some employees better understand their coverage and get more from their benefits package.

Here are the top 3 ways your company HR department can help employees understand and access their benefits.

  1. Brand your company HR department

Branding your company HR department is important so that employees recognize letters from your department as vital and therefore will open regular mail, emails, app notifications, etc. sent to them at a higher rate. Whether you represent a large or small company, brand every bit of communication that is sent to your employees. Every time your employees see that brand, they will hopefully pay attention.

  1. Analyze the data

Take the time to data mine to discover the benefits that your employees tend to not use. Create a graphic that demonstrates the benefits and the corresponding dollar amounts that have been unused according to frequency (i.e. Top 10 Most Frequently Unused Benefits by Dollar Amount or some other type of chart) that helps employees clearly see the company investment they did not take advantage of in the last year. This can be a very effective way of communicating the value of lost benefits.

  1. Simplify your communication messaging

Typically, most companies communicate with employees about their benefits a couple of times a year. Especially if the communication is in the form of a super thick package of paper that includes a great deal of medical jargon that may be in the form of acronyms and terms that are difficult to understand, employee’s eyes will glaze over and the packet will be filed somewhere for later consumption, which may never happen. Increase the chances that your communication will be read by piecing your messaging out in communications that are easy to read and understand. Track your communication open rates and program enrollment rates to determine effectiveness and adjust your communications accordingly.

If your employees don’t understand or appreciate their benefits, your company is not capitalizing on the investment they’ve made as the important motivational tool it can be. It pays to take the time to implement ways to improve the perception your employees have of their total compensation. Improving their understanding is relatively inexpensive and well worth the effort.

To learn more about benefits communication, contact Chelten Consulting.

Changes to Expect to the Affordable Care Act

There is no doubt changes are coming to the Affordable Care Act (ACA). However, many are wondering when those changes will occur and what they will look like. Like most acts of government, there will be no major modifications anytime soon. It is easy for GOP leaders to say they plan to repeal the Affordable Care Act, but this process is harder than it looks. It is also unlikely that congress will repeal the entire law, so the focus will be more on what aspects are changing and how does it affect individuals and businesses.

Changes to the ACA for 2017

So far, President Trump has not changed much of the ACA. He issued an executive order stating that federal agencies should use any means possible to delay the requirements of the ACA should it impose a fiscal burden on individuals, the health industry, or states as a whole. Due to the vague nature of the order, the only federal response from the IRS is they do not plan to enforce the requirement that most individuals must possess health insurance as strictly as they have in the past. However, it is still law.

What Happens to Those Insured via the ACA?

The biggest concern for individuals and businesses alike is what happens when congress replaces the ACA. Individuals want to know if they will be without insurance. Businesses want to know how these changes affect compliance and if they will suddenly be in violation of new regulations.

Thankfully, both President Trump and congressional leaders spearheading the initiative agree that a smooth transition is vital. They have no desire to leave individuals without insurance or cause major interruptions to businesses. Their current plan is to repeal and replace the law simultaneously.

Looking Forward

While many are concerning themselves with the coming year, 2018 holds fewer answers and more uncertainty. Because of this, more and more insurers are pulling out of the individual market. This is an issue as it is how individuals purchase insurance outside of their employer. Employers need to prepare themselves for an influx of individuals requiring insurance.

Until health care reform is complete, the best solution for employers is to invest in a Bronze level high deductible health plan (HDHP) alongside Group Supplement Health (GAP) plans. GAP insurance can provide coverage where HDHPs prove inadequate. This allows employers to offer compliant health insurance that their employees can afford. To stay up to date with the changing face of ACA as well as learn more about GAP solutions, contact Chelten Consulting.

Reexamining HDHPs

A recent assessment by the National Business group on health suggests that two thirds of large employers believe HDHPs are one of the most effective ways to reduce benefits costs. Another by the National Bureau of Economic Research corroborates this assertion, specifically identifying employer spending decreases of 10-15% in the areas of preventive, emergency, outpatient, and pharmaceutical care. This all makes sense as HDHPs leverage higher deductibles – transferring more expenses from employer to employee. Another recent study shows that by 2020, HDHP implementation will have tripled in just 7 years, becoming available through 40% of employers.

But this isn’t the whole story. Higher deductibles logically and experientially discourage plan usage and overall healthcare engagement, dramatically increasing the likelihood of increasingly severe health concerns down the road. A failure to capitalize on inexpensive preventive care frequently causes health issues to exacerbate, inflating long-term costs for employer and employee alike. A survey by Families USA determined approximately 30% of those covered by employer-provided benefits with deductibles upward of $1,500 per individual avoided medical care due to unaffordable out-of-pocket expenses. Other studies, including one by the Commonwealth Fund, reached the same conclusion.

Beyond an aversion to obtaining care, HDHP enrollees are often less engaged in their healthcare plans, leading to a failure to capitalize on the limited but valuable services to which they are entitled at little or no personal expense. Reduced price-consciousness and a lack of plan knowledge both exacerbate the other shortcomings of the High Deductible Health Plan. To learn more about the challenges associated with HDHPs and the variety of alternatives available, contact Chelten Consulting.

New Employee Onboarding Expectations

Finding talented individuals for your business can be a challenge. Retaining new hires can be difficult as well. Many new employees decide within their first year whether they will stay with the company or move on to different opportunities. Employee turnover has a major effect on your company’s bottom line, so it behooves employers to implement an effective onboarding process.

Elements of a Successful Orientation Program

While some of the components outlined below may not seem vital at first glance, this is not the case to new employees. Meeting these expectations is a great way to start the company’s relationship with new hires.

Take a Tour

Socialization is a large part of a positive work environment. Take new hires on a tour of the office and introduce them to their new coworkers. The first day of a new job can be daunting. Meeting coworkers for the first time in the lunchroom can worsen this and make new hires feel isolated. Making new hires feel welcome and comfortable in their workplace goes a long way to retaining them for years to come.

Automate Paperwork

Sitting a new hire down in a cubical with a mountain of paperwork will not make the best first impression. Automating paperwork can help with this issue. Automated files can also help HR track and store the necessary information in an orderly fashion. In addition, automated onboarding can reduce the amount of time new hires spend filling out paper work and increase their focus on other elements of their new job.

Provide a Mentor

Having a meet-and-greet and reducing the amount of physical paperwork new hires have to complete is a good start to the onboarding process. However, there are better methods to retain new hires than leaving them to sink or swim after their first few days. Assigning new hires an experienced mentor can help them assimilate to their new role much faster. They may feel more comfortable asking questions about their new job to a seasoned peer than their new boss. This alleviates workplace anxiety and jitters.

Asking for feedback about your company’s orientation program can help you fine-tune the process. You can locate areas that are working well and where the program needs improvement. Having an effective onboarding process is a type of benefit that is widely appreciated, but rarely discussed. It also does not draw a lot of attention right away but builds loyalty over time. To learn more about what types of benefits give your company an edge over the competition, contact Chelten Consulting.

Atypical Benefits for a Competitive Edge

There are standard benefits most employers offer: healthcare, dental, vision, and retirement planning options. In fact, retirement and healthcare benefits contribute overwhelmingly to employee loyalty. However, these benefits are expected. It is the unconventional, and therefore infrequently offered, benefits that make a company stand out from its competition. Below are some benefits many employers overlook, but employees value.

Continuing Education

Investing in employees’ continued education is a mutual benefit. Further developing an employee’s skill set can help the company grow. Businesses of all sizes can offer continuing education benefits. Large corporations can offer full-tuition coverage for eligible degrees through pre-determined universities. These companies usually require that the employee earn a minimum GPA to qualify for tuition coverage. Small businesses may not be able to afford tuition coverage, but they can offer their employees flextime. This will allow the employee to attend classes and perform their job at times that better suit their schedule.

Volunteer Benefits

With more and more millennials joining the workforce, companies are starting to invest in benefit options that appeal to this generation. For example, millennials have a well-developed social consciousness and often volunteer to make a difference in their community. Offering time off for volunteering purposes can give businesses an edge over other companies that do not.

Commuter Benefits

Commuting to and from work is a hidden expense for many employees. Gas, parking passes, and wear and tear on personal vehicles add up over time. Individuals that take public transportation do not have it much better as they have to pay a bus, cab, or metro fare as well. These expenses add up quickly, which is why employees always appreciate when their company provides commuter benefits.

As the job market continues to grow in competitiveness, employers need to distinguish themselves from their competition. Offering these progressive benefits can improve employee retention and entice new talent. Contact Chelten Consulting for more benefits strategies to improve your competitive hiring practices.

Tips to Engage Employees in Their Healthcare

Many employers struggle with low engagement levels when it comes to healthcare. Part of the problem is a lack of employee enthusiasm, but the majority of the issue lies in confusing benefits communications. Many employees do not know what their healthcare costs will be in the coming year and do not learn of the final costs until after selecting their health services. Meanwhile, over half of employees are not certain they are paying the correct amount for their health services. Below are some tips for employers to improve employee engagement with their healthcare.

Employees Are Not One Size Fits All

Treating employees as one conglomerate when it comes to benefits communications will backfire for employers. Some employees prefer webinars and video tutorials while others prefer one-on-one conversations with a healthcare professional. Offering a variety of benefit communications options and channels will help employers reach their entire audience rather than a select few.

Do Not Presume Employees Understand Their Benefits

Consumer-directed healthcare benefits are nothing new, but this does not mean their intended audience understands them. For example, less than one-third of individuals with a health savings account (HSA) can prove basic proficiency on how their HSA works. Many employers make the mistake of believing their employees have a high level of understanding for their benefits. Studies show employers consistently rate themselves 15 percent higher than employees do for providing clarity, depth, and communications options for healthcare services.

Use Incentives to Drive Engagement

While many employers may think having adequate healthcare coverage should be incentive enough to encourage employee engagement, they are wrong. Employees find their healthcare benefits to be baffling and boring. Another reason employers should consider incentivizing healthcare engagement is to reduce preventable illnesses and injuries. The vast majority of healthcare claims stem from avoidable or manageable causes.

Making use of wellness programs are a major way to incentivize healthcare engagement. Financial incentives also appeal to employees. These do not need to be expensive either. For example, paying for an annual pass for a wellness activity (such as a gym membership) could cost employers as little as $100 per year. If the employee makes use of their membership, they can bolster their health and fitness. Improved health and lifestyle means fewer sick days and less injury-prone employees, so employers can more than make up that $100.

Improving employee engagement with their healthcare benefits goes beyond compliance and healthcare coverage. Ensuring employees understand their benefits can enhance job satisfaction and morale as well. If your business struggles with employee healthcare engagement, contact Chelten Consulting to learn more great methods of effective benefits communications.

Unconventional Benefits to Reduce Turnover Rate

As the economy recovers and improves, the unemployment rate continues to decline. This means potential employees are being more judicious when it comes to accepting job offers. A competitive salary is no longer enough to attract and retain talent. Employers need to revamp their benefits package if they want to maintain their workforce.

The Cost of Employee Turnover

Losing an employee is more than reduced personnel. The loss affects morale and overall productivity as well—both of which can cut into the company’s profits. Reports show that employee turnover costs the company slightly more than 1/5 of that employee’s annual salary. This includes a loss in efficiency plus the time and cost of hiring and training a new employee.

For an employee making $100,000, this equates to slightly more than a $20,000 loss. That is enough to bring start-ups to the verge of collapse and hinder small to mid-size businesses. Large corporations with employees earning significant salaries face an even bigger financial loss. While they are often robust enough to withstand the financial setback, too many turnovers can become a liability.

Innovative Benefits to Attract and Retain Employees

The obvious solution is to prevent employee turnover whenever possible. However, this can be a difficult task to achieve. One way to put your business above the competition is with a healthy benefits package featuring unique options. An example that is rising in popularity is pet insurance. This may seem like a frivolous expense but consider the facts. About 65 percent of households own a pet. These pets get sick just like humans, except the owner must pay their pet’s medical bills out of pocket. Pet insurance helps pay for these medical bills including preventative care.

Offering unconventional benefits can give your company a competitive edge over those that do not. Optional packages like pet insurance may seem odd, but they are gaining ground in the workplace. One investigative report found that 68 percent of surveyed employers offered pet insurance. Employees are comparing benefits packages, so now is the time to distinguish your benefits from the competition. To learn more about incorporating benefits into your hiring strategy, contact the experts at Chelten Consulting.

Three Elements of an Attractive Benefits Package

Finding and retaining talent can be difficult in today’s competitive job market. Having an attractive benefits package is a major component to hiring quality candidates and reducing employee turnover rates. But what makes for a quality benefits package? New research shows offering high-value benefits, investing in benefits awareness, and focusing on solutions for the future are vital to a healthy benefits package.

High-Value Benefits

Benefits considered to have high value by employees are healthcare, retirement, and leave benefits. Some employees consider this combination of benefits to be of equal importance to their job’s salary. While this may seem odd, there is a good reason for it. Many companies are not in a position to offer substantive annual raises. If prospective employees know they can only anticipate a 1-1.5% annual salary increase, compensation loses some of its appeal. This is because a 1% raise will not have much of an effect on the employee’s day-to-day life while their benefits can. While businesses must remain competitive with their salaries, they should also ensure they offer attractive options for these high-value benefits.

Invest in Benefits Awareness

Many employees do not understand their benefits. If they do not realize the worth of their benefits, they will not view them as valuable. Human Resource professionals should make it their mission to educate employees on why their benefits matter. While many employees understand the worth of health insurance package, they may be unclear on other benefits such as flexible work options or comprehensive wellness plans.

Planning for the Future

For 2017, businesses should focus on tailoring their benefits packages to their particular workforce. What is appealing to a major tech company may not make sense for an import/export business. Some benefits are evergreen and should always be a part of your business’ overall benefits package. These include healthcare, retirement planning, flexible work, and paid leave. Include unique and voluntary benefits such as student loan repayment plans, pet insurance, or critical/long-term care. Businesses should learn what is important to their workforce, and modify their benefits package to meet employees’ needs.

To learn more about benefits solutions, contact Chelten Consulting.