Employee Benefits 101

Better Benefits, Lower Cost, Easier Execution

Employee Benefits 101 has explored a multitude of strategies I hope you have found valuable.

We have examined reducing your company’s pharmacy spend, the importance of managing the health-care supply chain, eliminating waste in your benefits plan and how to avoid pitfalls when renewing your health insurance. We have exposed how employers can identify profit leakage from their benefits plan and redirect those dollars to their bottom line or reinvest them into attracting and retaining qualified workers, obtaining new equipment or renovating facilities.

But the topics discussed in Employee Benefits 101 aren’t just strategies. There are companies in the Mahoning Valley who are using these strategies every day to acquire better benefits and lower their health-care spend.

DCW Group and two of our clients, Compco Industries and Potential Development School for Students with Autism, were asked to present at the Employee Benefit News-Benefits Forum & Expo, held Sept. 24-26 in New Orleans. This three-day event is the largest in the industry and was attended by the nation’s top employers. Rick Fryda, president and CEO of Compco Industries, Paul Garchar Jr., executive director of Potential Development, and I took the stage to educate other employers on the innovative strategies, tools and methodologies we are using to provide employees with the highest quality benefits at the lowest cost.

Let’s examine both of these companies starting with Compco Industries. Compco is a diversified custom metal stamping manufacturer founded in 1954 and based in Columbiana. When DCW Group took over Compco’s benefits plan in 2012, the company offered one medical plan with a $3,500 (single) or $7,000 (family) deductible, dental, vision and life. Unfortunately, a medical plan with such a high deductible left most employees functionally uninsured since most could not afford to pay a $3,500 or $7,000 deductible.

Today, six years later, Compco is paying less per employee per year than it did in 2012 and the highest medical deductibles an employee can elect are $1,500 or $3,000. The company has doubled in size and now offers nine additional employee benefits alongside its three medical plans. Most importantly, Compco employees are benefiting from higher quality, more diverse benefits with significantly lower deductibles.

Compco simplifies the management of its robust benefit plans by utilizing technology and counselor assisted enrollments.

Counselor assisted enrollments offer employees a one-on-one private meeting with a licensed insurance professional who takes them through a white-glove enrollment experience. These enrollments are done using online benefits administration and HR software that integrates directly into the company’s payroll system. Direct file feeds with the insurance carriers means that employees are also enrolled in the coverage automatically and accurately. These enrollment meetings lessen the demand on HR personnel and result in employees better understanding and appreciating the value of their benefits package.

Potential Development is a nonprofit school system established in 1953 for children in preschool through high school who are on the autism spectrum. Potential Development has schools in Mahoning and Trumbull counties. When the organization began working with DCW Group in 2014, it offered three medical plans and life insurance.

Today, four years later, Potential Development is not only paying less for employee health insurance, it has achieved stability with only one change in carriers during that time. By using sustainable and repeatable strategies to reduce medical premiums, Potential Development now offers eight additional benefits alongside two medical plans.

When it comes to recruiting and retaining qualified staff, Potential Development competes directly with public schools that may offer more lucrative medical benefits and higher salaries. Yet over the last three years, it has doubled in size and increased employee retention.

During this period of rapid growth, the organization’s second highest paid executive and longtime chief financial officer, who handled both benefits and payroll, retired. By using technology that aggregates and integrates benefits administration, compliance and payroll, Potential Development was able to cover this position with existing staff and one new hire, which created an administrative cost savings.

Like Compco, Potential Development also makes the most of counselor assisted enrollments. This approach differs significantly from the way most companies deliver employee benefits.

Most companies convey them in a companywide meeting that may not be mandatory for employees to attend. Most employees hear that the medical carrier is changing again and their payroll deduction is going up along with their deductible. It is absurd that employees are given less than 60 minutes of training on how to use something as important as their benefits plan and then are issued an insurance card that essentially is an unlimited corporate credit card.

Companies who communicate this vital information in such a poor manner should not be surprised when their employees turn out to be poor consumers of the benefits plan. When you understand that in order to control cost you must control the utilization within the plan, you realize how important it is to educate employees on how to achieve optimal utilization of their benefits.

During counselor assisted enrollments, licensed insurance counselors explain all available benefit options to the employee, and the private one-on-one format allows them and potentially their spouse to ask questions that they may not feel comfortable asking in a companywide meeting. This type of benefits education makes HR’s job easier moving forward and allows employees to customize their benefits plan to better meet the needs of their family.

On the surface, Compco Industries and Potential Development could not be more different. But despite operating in vastly different business sectors, both are getting the same results when it comes to their benefit plans. Their case studies demonstrate that regardless of industry or vocation, employers that are successfully offering higher quality benefits at a lower cost are doing very similar things.

These include:

  •  Leveraging technology to become more efficient and make it easier to offer a robust benefits package to employees.
  •  Using HR technology that aggregates data and integrates everything from onboarding and benefits administration to insurance carriers and payroll.
  •  Thinking outside the box and understanding that the only way to control cost is to control the utilization within the benefits plan.
  •  Realizing that how you consume the benefit plan is more important than what it looks like.
  •  Acknowledging that to achieve measurable, repeatable and predictable results requires collaboration between the executive and HR teams.

You will never be able to execute action steps that truly reduce cost if you do not have the executives with P&L responsibility and the operations extension of HR rowing in the same direction.

By implementing the strategies above, Compco and Potential Development have achieved the ultimate trifecta of high-quality benefits, lower cost and easier execution. To learn more or download our e-book go to DCWGrp.com/101.

Pictured: Bob Gearhart Jr. from DCW Group, Rick Fryda from Compco Industries and Paul Garchar from Potential Development School for Students with Autism present their successes on how they lowered their health-care costs while improving their benefit plans at the 2018 Employee Benefit News-Benefits Forum and Expo in New Orleans Sept. 25.

Published by The Business Journal, Youngstown, Ohio.