That said, the consulting and research firm LIMRA surveyed 1,500 U.S. employees and found that 40% of them didn’t know the cost of their health insurance. Furthermore, of the 60% that felt they did know the cost of their health insurance, only 15% could actually state a reasonable cost estimate. No matter what you call them – Total Compensation Statements, Total Reward Statements or Hidden Paycheck Statements, these documents can go a long way in helping to educate your employees about the costs of benefits.

The results of the survey, which were published in LIMRA’s What Is $1 Billion an Hour Worth? Employee Perspectives on Benefits research report, were weighted to be representative of the U.S. labor force, including employer size, private/public company, male/female, and full/part-time employment. Here are some of the key findings:

* While employers frequently have the common misconception that younger employers don’t value benefits as much as their older employers, the survey suggests that younger employees actually value benefits almost as much as their older counterparts. It appears that the different values an employee places on benefits has more to do with life experience than it does life stage, education level, or salary level.

* LIMRA’s survey showed that U.S. employees generally significantly underestimate the health insurance premium percentage covered by their employer -and- the premium percentage they pay for non-medical benefits.

* Participants were asked what their number one factor would be when considering two similar job offers, each with comparable salaries. Benefits, such as dental, medical, and retirement plans, were the number one factor for 62% of the participants. Other important factors included: an employer’s stability (59%); paid leave (52%); competitive increases in salary (50%); the work environment (42%); an employer’s location (38%); fulfilling, rewarding, and challenging work (37%); an opportunity for personal growth (33%); an employer’s reputation (32%); a fair balance between personal life and work, such as telecommuting and flex time (31%); the growth potential of the employer (27%); monetary bonuses (26%); and an employer’s size (8%).

* While it’s clear that most employees value benefits, the research found that the majority didn’t understand the costs and didn’t know how much their benefits were worth. Such can often make it difficult for employees to make informed, knowledgeable decisions as they decide who to work for and what benefits to select.

* Considering that around 60% of employers have indicated that they plan to continue shifting the skyrocketing costs of benefits toward their employees, employees must know their benefit package’s price components and any potential lifestyle or financial changes facing them if any of these price components were to change in the future. The survey found that an employee’s decisions about their benefit package as a whole was impacted when they understood how much their benefit was currently costing and any projected cost increases for the future.

* According to the survey, most employees say they’re open to paying higher premiums to retain a current benefit plan that they’ve used regularly, such as their dental, vision, or medical coverages. However, a third of the respondents said that they found it difficult to pay for their benefits. Households with less than $25,000 in annual income found it particularly difficult to pay for benefits, but households with twice that amount of income also reported struggling to afford their benefits.

It’s just a fact that employers, especially those in highly competitive industries, must have a striking benefits package to remain competitive in attracting and retaining the best employees. You probably spend a great deal of time and money providing your employees with an attractive benefits package, but do they actually appreciate what you’ve invested? Do they even have the slightest idea of how much it costs you to provide them with it?

Sadly, most employers will find that their employees have no idea what they invest in providing good benefits. In fact, a number of surveys have shown that most employees vastly underestimate how much their employer contributes toward their benefits. These surveys also typically find that employees tend to have a negative attitude about the benefits their employer offers. Most employees tend to focus more on elements like cost-sharing methods and uncomfortably rising premiums.

The good news is that most employees don’t have this attitude because they’re ungrateful, but rather because they really just don’t realize how much it costs you to provide them with their benefits. Considering you want and need a return on such a major investment, you are left with figuring out how to better educate your employees on your side of the story. Total compensation statements are one way you can show and tell the compensation story and help employees better appreciate their benefits.

Give Employees a Total Compensation Statement

If you asked your employees to write down their total compensation, they’d probably write down their gross income. Even though what you pay toward an employee’s benefits makes up a substantial portion of what you’re paying to keep them, an employee rarely considers what you’re paying toward their benefits as compensation.

You can illustrate the value of total compensation by breaking it down into various parts charts and graphs like the ones myBenefitStatements uses when they create a total compensation statement. When considering benefit total compensation statements, be sure to include any other compensation perks, such as employer-paid license fees, tuition reimbursement, on-site childcare, and so forth.

Include Cost as Part of Your Benefits Education

Most employers, whether it is during orientation for new employees or during annual enrollment periods, will provide at least one setting for employees to learn about their benefits. Employers shouldn’t miss out on the opportunity to also emphasize the value of the benefits being offered and to remind employees that benefits are part of their total compensation. myBenefitStatements is now partnering with a number of employer groups to provide total compensation statements during annual review time to show the total cost of benefits; what you, the employer, pays; and then the portion that the employee pays as well as pay increases and incentives paid throughout the year.

It will be impossible for you to capitalize on your investment in benefits if your employees don’t appreciate what you’ve invested. Remember, total compensation or benefit statements can go a long way to improve how your employees view their benefits.

The Patient Protection and Affordable Care Act (health care reform) limited the ability of health plans to cover over-the-counter (OTC) drugs, permitting reimbursement from flexible spending accounts (FSAs) and health reimbursement accounts (HRAs) beginning January 1, 2011, only when OTC drugs are purchased with a prescription. In a departure from guidance issued last fall, the Internal Revenue Service has announced that debit cards linked to FSAs and HRAs can continue to be used to pay for prescribed OTC drugs, so long as certain procedures are followed.

These procedures are set out in IRS Notice 2011-5. According to this guidance, after January 15, 2011, FSA and HRA debit cards may continue to be used to purchase OTC medicines or drugs at drug stores and pharmacies, at non-health care merchants that have pharmacies (such as grocery stores with a pharmacy), and at mail-order and Web-based vendors that sell prescription drugs, so long as all of the following conditions are met:

1. Prior to purchase-

a. the prescription for the OTC medicine or drug is presented (in any format) to the pharmacist,

b. the OTC medicine or drug is dispensed by the pharmacist in accordance with applicable law and regulations pertaining to the practice of the pharmacy, and

c. an Rx number is assigned.

2. The pharmacy or other vendor retains a record of the Rx number, the name of the purchaser (or the name of the person for whom the prescription applies) and the date and amount of the purchase in a manner that meets IRS recordkeeping requirements.

3. All of these records are available to the employer or its agent upon request.

4. The debit card system will not accept a charge for an OTC medicine or drug unless an Rx number has been assigned.

5. All other requirements for use of debit cards associated with health plans are followed.

So long as the above procedures are followed, the debit card transaction will be considered fully substantiated at the time and point of sale.

OTC drug purchases made at other vendors that have health-care-related merchant codes (such as hospitals and physicians), and purchases made at "90% pharmacies" (pharmacies for which 90% or more of gross receipts in the prior taxable year were for tax-code-qualified medical expenses), are permitted under a less stringent set of requirements.

Importantly, for other merchants that sell OTC drugs, but which are not covered in the notice (such as a grocery store or convenience store without a pharmacy), an FSA or HRA debit card cannot be used to purchase OTC drugs. Employees need to be aware of this limitation, as well as of the conditions that now must be met to use debit cards for any OTC medication purchases, to ensure that health plan-related debit cards are used properly.

Critical Insights for Effective Health Care Communications

According to experts specializing in language and language testing to help clients sell a product or sway public opinion, a key point to note is that it's not what's said, it's what employees hear about health benefits changes.  In fact, it is critical for employers to choose words that are effective and resonate with the workforce to earn employee support for more cost-conscious and waste-reducing health care decision making. When it comes to effectively engaging employees, polling data brings out several key points.

Trust

Employers should understand the world view of their employees. Fearful Americans are more likely to have distrust of leaders and employers. However, when it comes to employer distrust, 51% of Americans identified ethical business practices as what would most likely lead them to be distrusting.

Priorities

Employers should be aware of employee personal priorities and highlight this awareness in health care benefit and benefit change messages. Americans responded as follows when asked about personal priorities:

* More money (men)

* More time (women)

* More choices

* Less hassles

Employee-Driven Choices

Some experts prefer the term "employee-driven" to "consumer-driven" because employee-driven highlights the employer relationship instead of denoting a purely dollar relationship. Employees favor more personal control over health care decisions, which can be a selling point for employee-driven changes, but they don't look favorably on cost shifting.

As demonstrated by research showing a 51% negative outcome by Fortune 500 employees to an employer saying "positive changes in our benefits" were made, Americans don't want surprises; they want predictability and stability. So, employers need to show how a change will bring less bureaucracy and hassle. An employer should demonstrate the increase in predictability and simplicity and barrier reduction that comes with shifting decision-making to employees.

Complaints

* Monthly premium costs

* High co-pays

* Plan confusion

The above are common complaints about health care plans. Employers shouldn't just make meaningless assertions. Instead, they should create value with numbers and emphasize that employee-driven plans are easier to comprehend and can have lower premiums. Furthermore, employees should hear the reasoning behind why it matters. It is also important to note that unsustainable health care spending only results in higher premiums and the business having a less secure position.

Desires

Polls show that employees desire the following factors when it comes to their health care coverage:

* Company commitment to provide health care

* Be viewed as humans, not numbers

* Trust in treatment availability, without delays like prior authorization

* Doctor-patient relationship protection

* Decrease triggers (such as abuse, waste and fraud) of higher cost

Essentially, employees want access to their doctor, their hospital, and the ability to afford both. Employees also want a sense of control, which relates to trust that their coverage will be there and predictability and stability in the insurance provider not denying needed services.

Communication And Presentation

Polls clearly show that communication and presentation matter, and that past popularity doesn't equate to current popularity. Polls from just five years ago showed that a booklet was the number one response on preferred delivery of health care information. However, a recent poll showed only 26% still favoring a handout or booklet and 51% preferring email or online delivery. Employers should be aware that:

* Most employees don't want or read verbose text. Effectiveness comes from a brief, simple, consistent, and credible message that isn't presented in a patronizing manner.

* Employees are 60% more apt to read a page with a health care applicable graphic.

* Question and answer style formats work best.

* The message should always be positive.

Polls are clear – employee trust, personal priorities, choice, desires, common complaints, and employer presentation and communication all matter when it comes to health benefit changes.

On September 3, 2010, the Internal Revenue Service (IRS) issued Notice 2010-59, a guidance reflecting statutory changes related to the use of health reimbursement arrangements (HRA) and health flexible spending arrangements (FSA) for payment of over-the-counter drugs and medications.

Related to accident and health plans that are provided by employers, including FSAs and HRAs, The Patient Protection and Affordable Care Act (PPACA) revised the definition of medical expenses. The definition of qualified medical expenses for Archer Medical Savings Accounts (MSA) and Health Savings Accounts (HSA) were also revised by PPACA. This will involve several changes for over-the-counter drug reimbursement, cafeteria plans, HRA and FSA debit card usage, etc..

Incurred expenses for non-prescription over-the-counter medications and drugs bought on or before December 31, 2010 can be reimbursed without taxes in accordance with the employee plan. However, as of January 1, 2011, an employer-provided health plan, such as an FSA or HRA, can only pay or reimburse the cost of drugs and medications under the following circumstances:

• The medication is insulin
• A prescription is required for the medication
• The individual acquires a prescription for a medication available without a prescription (over-the-counter medication.)

Note that a prescription is defined as a hand written or electronic medication order for a particular individual to have a particular medication or drug. It must abide state legal requirements and be composed by a healthcare professional that is legally authorized to issue prescriptions for the state it was written in.

HRAs and FSAs that use a debit card will also have new special rules. The IRS notice purports that current debit card systems are not capable of recognizing and maintaining that over-the-counter medications were in fact prescribed by a healthcare professional – as in compliance with the new definition of payable/reimbursable over-the-counter medication medical expenses. As a result, health HRA and FSA debit cards should not be used to buy over-the-counter drugs or medications after December 31, 2010. In an effort to smooth and facilitate the transition, the IRS will not be challenging FSA and HRA debit card usage for incurred expenses through the 15th of January in 2011. Thereafter, plans are required to ensure cards have been reprogrammed so that they can not be used in the purchase of over-the-counter drugs or medications. Click here for a list of eligible items as of January 1, 2011.

Those with a health FSA should be careful, as some FSAs contain a grace period provision to allow use of unused funds not spent by December 31 of a given year to reimburse incurred expenses for the initial 2 ½ months of the subsequent year. Even if an individuals' existing FSA includes this grace period provision, over-the-counter medications bought without a prescription (after the deadline) will not be eligible for reimbursement under the new rules outlined in the IRS notice.

Finally, cafeteria plans may also need revising to adhere to the new over-the-counter medication requirements. Despite the tenet against retroactive amendments, this notice allows an amendment to conform cafeteria plans to requirements adopted by June 30, 2011. For incurred expenses after January 1, 2011 or HRA and FSA debit purchases after January 15, 2011, the amendment may be retroactively effective.

Employee benefits long have served as a recruitment, retention and loyalty-building tool for the companies that offer them. However, even as employers make benefits programs available to employees, research indicates that they underestimate how very valuable these programs can be, both for employees' well-being and as a means to solidify the company-employee bond during tough economic times.

Just how much do employees value their benefits? According to a study from Sun Life Financial, employees value their total benefits offerings more than cash, even in a tough economic environment. The nationwide study asked employees to assume they had access to adequate medical insurance, and then to rate the value of certain other benefits, along with cash. Specifically, the survey respondents were to allocate a total of 100 points across seven benefits areas-401(k)/retirement plans, dental insurance, vision insurance, long-term disability, short-term disability, life insurance and long-term care insurance-and cash, based on how much they valued the specific benefit, or the cash. Only 33% of the survey respondents assigned a value greater than zero to cash; in contrast, more than 70% allocated a value greater than zero to each of the other six benefits.

Total Compensation Statements can help tell more of the story.

Of the types of supplemental benefits evaluated in the study, those garnering the most points were dental insurance, 401(k)/retirement plans, vision insurance and group life insurance. However, nearly half of the respondents allocated at least some of their points to six or more benefits, indicating that they value a broad combination of benefits.

Similar findings appear in MetLife's most recent annual Study of Employee Benefits Trends. According to this survey, faced with tough economic challenges, employees place more value than ever on their benefits, and increasingly look to the workplace for help in controlling their finances and their personal and financial risks-even if the workplace benefits that help them achieve this are fully employee-paid. More than one in four (41%) said their workplace benefits were the "foundation" of their personal safety net, and a majority (51%) reported that they obtain most of their financial products through the workplace. Additionally, 56% said recent economic events have caused them to have a greater appreciation of their workplace benefits, and 46% said economic conditions have caused them to take a greater interest in understanding the employee benefits available through their employer-statistics that may indicate employees are more open than in the past to company efforts to engage them in benefits consumerism and personal responsibility.

More than company culture or advancement opportunities, employees cited benefits as an important factor in their loyalty to their employer. According to the survey, 75% of the employees said health benefits were an important factor in their loyalty to the company, while 72% said this about retirement benefits and 69% said this about other insurance benefits. Smaller percentages cited advancement opportunities (57%) or company culture (50%) as reasons to be loyal to their current employer. Interestingly, employers severely underestimated the influence of benefits on employee loyalty:

The message in these two surveys is clear: Benefits are an essential strategic investment for employers. Though most employers spend generously on providing an employee benefits program, this "investment" doesn't always have to involve a large capital outlay. As noted above, employees place great value even on those benefits that they pay for in full, meaning that voluntary benefits-as well as traditional plans-can garner the kind of positive employee response that results in a more loyal, motivated workforce.

The Patient Protection and Affordable Care Act enacted a package of health insurance reforms for group health plans, including benefit mandates and health insurance market reforms. "Grandfathered plans”-plans in effect on March 23, 2010 (the date of enactment) are exempt from certain-but not all-of the law's provisions.

The Internal Revenue Service, Department of Labor's Employee Benefits Security Administration and Department of Health and Human Services have jointly issued an interim final rule regarding grandfathered plans, in particular, what changes to grandfathered plans will and will not affect a plan's status.

Among the Act's provisions that do not apply to grandfathered plans are the following:

• The requirement that preventive care services, including immunizations and screenings, are covered with no cost-sharing for plan participants.

• Requirements under Sec. 105(h) of the Internal Revenue Code that plan provisions do not discriminate in favor of highly compensated employees.

• Maintenance of claims and appeals processes that include external review.

• Certain benefits requirements involving provider choice, emergency services and clinical trials.

According to the interim final rule, if a grandfathered plan does any of the following, it will lose its grandfathered status:

• Eliminate all or substantially all benefits to diagnose or treat a particular condition. This includes the elimination of an element necessary to treat the condition (for example, if a plan provides counseling and prescription drugs for a mental health condition, and eliminates the counseling benefit while maintaining the prescription drug benefit, it will be considered to have eliminated substantially all benefits for the condition and lose its grandfathered status).

• Increase coinsurance rates, to any extent at all, for plan participants.

• Increase participant copayment levels by more than the greater of $5 (adjusted annually for inflation) or a percentage equal to medical inflation plus 15 percentage points.

• Increase a fixed-dollar cost-sharing requirement other than a copayment-such as a deductible-by more than medical inflation plus 15 percentage points.

• Lower employer cost-sharing by more than 5 percentage points (for example, decreasing employer cost-sharing while increasing the percentage of employee cost-sharing from 10% to 20%).

• Add or tighten limits on what an insurer pays (for example, capping or lowering the annual dollar amount covered by a plan for specific services or adding an annual dollar limit maximum where one did not exist on March 23, 2010).

• Change insurance carriers or purchase a product from a new insurance carrier.

Plan changes such as premium increases and changes in third-party administrators will not cause a plan to lose its grandfathered status.

The interim final rule includes special provisions for insured collectively bargained plans. If the collective bargaining agreement was ratified before March 23, 2010, a fully insured plan will be considered grandfathered until the date on which the last agreement relating to the coverage in effect on that date is terminated. Self-insured collectively bargained plans are subject to the same rules as grandfathered plans that are not under a collective bargaining agreement.

As noted above, while grandfathered plans are not subject to some of the Act's provisions, they are subject to others, such as the prohibition on lifetime limits on the dollar value of benefits and the prohibition on coverage rescissions, except in cases of fraud or an intentional misrepresentation of a material fact by an enrollee.

A grandfathered plan also is required to disclose to plan participants that, as a grandfathered plan, it may not include certain elements of the consumer protections provided for under the Act.

While grandfathered status can offer significant advantages, especially in regard to avoidance of some of the Act's benefits mandates, employers will need to assess how these balance against the need or desire to modify plan provisions or change carriers in response to rising plan costs and rates.

A recent survey from BlackRock, a national asset management firm, has confirmed something many Americans already know. According to the Survey of 401(k) Participant Attitudes and Behaviors, the vast majority of those who put money into 401(k) plans feel that their retirement savings are more important to them since the financial downturn felt in 2008.

For the survey, 1,000 participants were asked to indicate priorities and concerns that revolve around their 401(k) retirement savings plans. Data from the survey suggests that saving money is the top priority for the bulk of Americans, but the survey also reported that many workers are confused by 401(k) plans and may not be saving properly.

The survey also showed that although Americans are saving money, many feel that the amount they are putting aside will not be sufficient enough to fund their retirement. BlackRock hopes that more effective communication of savings strategies from employers can help turn the tide for the nation's workforce.

What Employers Can Do to Help

Over 70% of those surveyed indicated saving for retirement as their top priority, yet further responses on the survey conversely showed despite the employees' emphasis on savings, many are unsure how much to save. These statistics include:

• Nearly one out of every four participants did not know the rate their employer matched contributions to 401(k) plans.

• 83% of 401(k) contributors only invested the minimum amount to receive a full-match from their employer.

• Less than half of those polled designated their employer's matching rate as their top influence on how much they contribute.

• 33% of survey participants feel automatic escalation features used to increase 401(k) contributions are "very important” savings incentives.

According to BlackRock, employers should be doing more to educate their staff on how to use automatic escalation and company matches to their advantage, otherwise employees will continue to blindly pump money into 401(k) plans, hoping for the best.

Retirement is a Gray Area for Many Employees

Responses to the survey show a general lack of understanding when it comes to the realities of retirement and how to budget retirement savings. Individuals intend to retire by a certain age, yet their savings disagree and put the hopes of a self-funded retirement in jeopardy. The survey found:

• 62% of participants reported beliefs that they will live longer than their retirement savings can fund.

• Nearly 60% of those surveyed would prefer receiving steady retirement income rather than a single lump-sum payment.

• 82% of participants reported having little to no experience managing sums of money greater than $100,000.

BlackRock hopes that these statistics will be a wake-up call to employers who expect their workers to understand complicated financial issues, like longevity risks and the effects of inflation. Otherwise, according to BlackRock, employees will be left to manage their life savings on their own.

Employees are not averse to the thought of receiving professional financial guidance either. About 72% of respondents showed an interest in having their employers suggest well-diversified managed accounts for retirement funding.

What Tomorrow Brings

Thirty years ago, employers devised defined contribution plans as a way for workers to supplement their retirement savings, but as 401(k) and similar defined contribution plans became the principle form of retirement savings, employers have tried their best to meet the needs of America's aging workers.

As the country works to emerge from its economic troubles, employers must take a second look at their defined contribution plans. BlackRock suggests that employers work to increase savings rates now and begin to educate their employees on how to make their money work for them, ensuring the savings necessary to fund happy and long retirements.

Total Compensation Statements can Help Reduce the Confusion…

Total compensation statements are a great way to communicate with your employees. Why not give us a call and see how we can help you enhance communications with your employees.

A commonality in many workplaces is the rift between the employees and management when it comes to health care benefits. Employees usually accuse the company of being too frugal, and management is unable to find a compromise that makes everyone happy. In the end, employees of the company are left feeling like their hands are tied.

Luckily, a recent session at the Society for Human Resource Management's 2010 Annual Conference explained how one company, with less than 150 employees, saved around $2 million by simply creating a partnership between the employees and management staff. Together, the company was able cut the soaring costs of medical coverage while still providing excellent benefits to employees and their families.

SHRM recommends an ongoing four-stage method to help control health care costs. Through evaluation, education, communication, and motivation, management and employees can work together to keep the costs of health care down.

Evaluation

Health insurance claims are processed by the provider or a third-party administrator, and in most cases, employers do not see the complete picture of how the benefits are being used. By requesting summative claims data, employers are able to see how money is being spent and who it's going to.

An evaluation of claims data can reveal unnecessary expenses, like miscoded treatments, erroneous charges, and misuse of the system. Employers will also notice ways to cut costs without reducing the benefits, such as when employees are prescribed medicines that are either available over-the-counter or in the formulary. The data will provide insight into the amount of out-of-network care that is being used.

A thorough evaluation gives employers the information needed to better educate their employees on how to efficiently use their health benefits and eliminate unnecessary spending at the same time.

Education

Just as people tend to breeze through owner's manuals and other instructions, the Explanation of Benefits statements from the insurance provider usually gets the same treatment. Without a total understanding of how costs are determined and why rates go up, many employees operate under the guise that "if it's covered, then just tack it on my bill.”

Meeting with small groups of employees is a great way to educate the staff on how the prices of their insurance premiums are directly related to how the employees, as a staff, use the insurance. Higher annual costs equal increased premiums for the following year and lower annual costs result in cheaper rates.

Give cost efficient suggestions to the staff, letting them know how they can help reduce the amount they spend each year. Recommend using only in-network physicians and clinics, and explain how doctors can provide samples of medication before writing expensive prescriptions for drugs that may not work. Since health care plans often cover the families' of employees, make sure to host educational sessions where spouses can attend, as well.

Communication

Communicating the positives of cost effective health care coverage should begin at new employee orientation and continue throughout employment. Dedicating a wall or bulletin board to display current usage data and dollar figures is a key component to keeping employees up to speed on the state of their insurance programs. By making this general data known, employees are able to hold themselves accountable and see how the improvements they have made are affecting the system.

Motivation

With a little motivation from management, employees can see that their bosses are serious about reducing the amount they have to pay for insurance. Rewarding the employees when quarterly costs go down with picnics or even a one-month reprieve of premium charges can motivate the staff to continue to work towards more efficient health care usage.

According to a recent report from the Society for Human Resource Management (SHRM), employees consider benefits and job security as the two most important factors that contribute to their overall job satisfaction. This marks the fourth time in as many years that these two factors topped the SHRM's annual Employee Job Satisfaction survey.

Employers who want to see their employees’ job satisfaction increase should consider providing informative communication regarding the benefits package they offer and the personalized cost value of those benefits. Employee benefit statements often include a personalized letter from top management which may be used to communicate a sense of security regarding the stability of the company and employees’ jobs.

The survey also polled HR professionals on their thoughts about job satisfaction, and found similar results. HR professionals agreed with the employee population on the value of job security, positioning it as their second most important factor. An astonishing 72% of the HR population polled, selected the employee-supervisor relationship as the most important factor effecting job satisfaction, ranking number one in the survey for the seventh time in the last eight years. In comparison, only 48% of employees polled selected "relationship with supervisor” as an important factor, ranking it seventh on the list.

The 2010 survey was made up of 25 elements spread across four categories, and included factors regarding wages, benefits, work environment, and advancement opportunities, among others. To ensure the validity of the survey's results, the SHRM polled a wide sample of over 600 employees and 589 HR professionals, all from the United States.

This year's survey had other interesting results. Employee compensation fell to its lowest rank ever this year, coming in at fifth on the employees' poll. Last year, compensation fell out of the top five rankings for HR professionals, and this year it was listed as the ninth biggest contributor to job satisfaction.

Besides job security, employees and HR professionals appear to agree that having opportunities to utilize skills/abilities while at work contributes to overall satisfaction. It is the third consecutive year this factor has ranked in the top five in both surveys, with employees placing more emphasis on this choice in 2010 than in previous years.

SHRM included a new choice in this year's survey that received a lot of attention from both sides of the table. For the first time in the survey's history, participants could select "organization's financial stability” as a key contributor to job satisfaction, receiving enough selections to rank fourth on both surveys.

As for employee benefits, a secondary survey revealed that health care coverage was the most important benefit, followed closely by paid time off. Despite the amount of significance employees' place on benefits, only 38% of employees polled felt "very satisfied” with their current medical benefits. Conversely, the majority of employees were very satisfied by the amount of paid time off being received.

Some employers are concerned about how health care reform could affect the benefits they offer, which could also affect job satisfaction. On the brighter side, this year's employee survey showed that "the work itself” was selected enough to tie for fourth, pointing out that satisfaction does not only come in the form of paychecks and paid vacations.

A top-notch workforce is essential to your company’s success. It’s always important to have engaged, loyal employees, and in an economic downturn, it’s more critical than ever to keep employee morale high to maintain the competitive edge top-quality employees bring.

One way you keep your best employees on board is by offering a generous benefits package. But do your employees fully appreciate your investment? According to many surveys, they don’t. Employees tend to focus on their share of the costs, and many grossly underestimate the amount their employers pay. Employees also tend to underestimate what employers pay for other benefits such as paid time off (PTO), tuition reimbursement, pension or 401(k) plans and statutory benefits like employer-paid Social Security.

So how do you make sure employees know and appreciate how much you spend on their benefits – traditional benefits like health, dental and life insurance as well as benefits like PTO and statutory benefits? Communication is the key.

One of the most effective ways to drive home the point is to present the full costs of all the benefits you provide as an employer in the form of a “hidden paycheck" or a total compensation statement. For example, if you pay an average of 20% of an employee’s salary on providing a traditional benefits package, an additional 5% on matching 401(k) contributions and approximately 10% each on PTO and statutory benefits, you could provide a “hidden paycheck” communication or benefit statement outlining the following for an employee who receives an annual salary of $50,000:

YOUR HIDDEN PAYCHECK

$50,000 in salary

$10,000 in employer contributions for health, dental and life insurance

$5,000 for time off

$2,500 in 401(k) contributions

$2,500 for statutory benefits

$70,000 = TOTAL COMPENSATION

Of course, the amounts will vary depending on how much you contribute to employee benefits. But as you can see, even with fairly conservative estimates, the amount is significant. A hidden paycheck communication gives employees a big-picture view and increases their appreciation for employer contributions.

There are a variety of ways in which you can present hidden paycheck information. It can be as simple or elaborate as you choose. At myBenefitStatements, we have a number of formats available (click here for sample formats). Or you could make it an annual tradition, presenting hidden paycheck information or a benefit statement at year-end in the form of an annual total pay statement for every employee.

No matter how you choose to convey the information, revealing hidden paycheck amounts is a worthwhile endeavor. It can help you get the word out about how much you actually spend, raising employee awareness of your investment in your human capital. It can build valuable good will, which is a critical commodity, especially in times of economic hardship, when your need for a competitive edge is greatest.

I'm ready to learn more

Under the new law, maximum annual FSA contributions are reduced, and there are new regulations affecting how the funds can be used. The intent of the new rules and penalties is to generate revenue which can be used to fund aspects of the health care reform package.

FSAs and HSAs (assuming the employee is covered under a qualified high deductible health plan) allow an employee to contribute tax-free funds that can be used to pay for deductibles, drug co-pays, treatments that are not covered by health insurance, and other qualified medical expenses.

Beginning on January 1, 2013, the annual limit for FSAs will be set at $2,500. Previously, the IRS had stipulated that employers could establish their own FSA contribution limit, and according to the Center on Budget and Policy Priorities, these limits generally fell into the $2,000 to $5,000 range. In 2009, Mercer’s National Survey of Employer-Sponsored Health Plans stated that the average yearly employee contribution was $1,424.

Annual limits for HSAs, however, were not affected by the new legislation.

Be aware that some restrictions will become effective more quickly. For example, as of January 1, 2011, FSA and HSA participants will no longer be able to spend the funds on over-the-counter medications unless a physician has specifically prescribed them. Also starting next year, non-qualified withdrawals from HSAs will be subject to a 20% penalty instead of the 10% penalty which is currently applied.

Our sister division can help  you with all your FSA, HRA and HSA questions. Click over to myCafeteriaPlan.com to learn more about how we can help you communicate with your employees.

According to the Congressional Budget Office, small businesses are expected to save an estimated $40 billion by 2019, due to the Small Business Health Care Tax Credit. The tax credit is effective retroactive to January 1st, 2010 and covers up to 35 percent of a small business’s premiums, with the rate increasing to 50 percent on January 1st, 2014.

While non-profit organizations are eligible for the credit, they will receive a lower percentage. Tax exempt organizations will be able to receive up to a 25 percent tax credit in 2010, which will be raised to 35 percent in 2014.

The tax credit has broad eligibility, covering 4 million small businesses. Any business that pays at least 50 percent of employee health care costs, employs the equivalent of 25 or fewer fulltime workers (allowing eligibility for companies with 50 part-time workers), and pays an average employee salary of $50,000 or less (not including owners and their family members) will be eligible for the Small Business Health Care Tax Credit.

The maximum credit of 35% is available for small businesses with 10 or fewer fulltime workers and an average salary of $25,000 or less. For businesses that pay employees between an average of $25,000 and $50,000, the tax credit gradually phases out. The gradual phase out also applies to businesses that employ an equivalent of 10 to 25 full time workers (20 to 50 part time workers).

Businesses are able to claim the credit for a total of six years. They will be eligible to claim the credit for four years, from 2010 to 2013, and then any two years after the 2013 date.

To keep businesses from abusing the system by picking a high-cost plan, the Small Business Health Care Tax Credit will only be eligible for the average health insurance cost of the state where the business is located. This information will be provided by the IRS at a later date.

For more information, refer to the IRS website at http://www.irs.gov/newsroom/article/0,,id=220809,00.html?portlet=6.

What Are the Immediate Changes?

There are certain things that will happen in the first 6 months after the bill is actually signed into law:

• Insurance companies will not be allowed to put lifetime limits on coverage. This means that people with chronic health conditions will never “use up” all of their insurance coverage.
• People with children on their company insurance plan can keep unmarried dependents enrolled until they turn 26. This is very important because of the number of college graduates who are unemployed.
• Insurance plans will be required to cover preventative health services like colonoscopies, osteoporosis screening, screening for things like high blood pressure, diabetes, and sexually transmitted diseases and quit-smoking counseling.
• Pre-existing serious health conditions can no longer prevent people from getting health insurance. They will be able to purchase coverage from a government-subsidized exchange. However, this coverage will not be available until 2014.

Health Insurance Will Be Required

Uninsured people will be required to purchase health insurance by 2014. Subsidies will be available that reduce the premiums subject to income limits.

Penalties will be imposed on people who do not purchase insurance that could be as much as 1% of their income.

Changes to Medicare

Tighter controls may be put on decisions for care that are considered too costly. The care provided to older people may even be restricted. Cancer screening could be denied for older citizens.

The Medicare system will see a huge hit because approximately one-half of the health reform costs for the next 10 years will come from the Medicare budget.

Pre-Existing Illnesses and Loss of Coverage

Starting this year, the health reform bill will ensure that insurers can’t deny coverage to any child based on existing health problems. In 2014, this will be expanded to include all applicants.

Within the first six months of the bill being signed into law, an insurer cannot drop policyholders except in cases of fraud.

Longer Wait Time to See Your Doctor

Millions more people will have access to health care but the number of healthcare workers will not grow quickly enough to keep up. You can expect to wait about twice as long to get in to see a doctor as it did in the past.

Changes to the Coverage You Get from Your Employer

Employers who offer high-value, ‘cadillac’ health plans will probably begin to cut back on those benefits. If they don’t do so by 2019, they could face fines from the government. This could possibly mean no more vision or dental coverage or going to a specialist without a referral from your family doctor.

Benefits for Women

With this new health bill, insurers will have to cover maternity care the same way they cover any other medical procedure, but not until 2014. Employers will also be required to allow break time for mothers who are nursing and a private place where they can use their breast pump.

Losing or Leaving Your Job

If someone quits or loses their job, the same exchanges that help lower income people purchase insurance will be available. This means when you leave your job, you don’t necessarily have to pay the high COBRA costs. This is very important for people with a pre-existing condition. You may even be able to get free health coverage under some circumstances.

Higher Taxes

In 2013, Medicare payroll tax will go up for incomes over $200,000 a year.

As these changes come about, the staff at myBenefitStatements is ready to help you communicate… why not give us a call today!

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act. Along with the Health Care and Education Reconciliation Act of 2010, this legislation will make significant changes to our current health care system.

The Act adds new responsibilities for employers and insurance carriers. While most of the provisions will start in 2014 or later, some provisions are effective right away or within a short period of time after enactment.

Effective 2010

• Small-Business Tax Credit. A tax credit of up to 35 percent of the employer’s health care contribution is available for qualified small employers (any employer with no more than 25 full-time employees and average wages of less than $50,000). This tax credit will increase to 50% starting in 2014 once exchanges are operational.
• Early Retirees. A temporary reinsurance program is provided to employers that offer coverage to early retirees between the ages of 55 and 64.
• Health Plan Changes. 1) Plans must offer unlimited lifetime benefits and annual benefit limits will be restricted. 2) Pre-ex conditions will be prohibited for children under 19. 3) Recissions are prohibited except in the case of fraud. 4) Plans must cover certain preventive health services at no cost to the insured. 5) Dependent coverage age limit extended to 26.
• Federal High Risk Pool. Temporary establishment of a high risk health insurance pool for individuals unable to find insurance elsewhere.

Effective 2011

• W-2 Reporting. Employers must report value of health care benefits provided on employee w-2s, but not as taxable income.
• Higher Penalty Tax on Non-Qualified Health Savings Account (HSA) Withdrawals. Non-qualified withdrawals will be taxed at 20% versus the current 10% penalty.
• Cafeteria Plans. A new Simple Cafeteria Plan is created through which small employers (less than 100 employees) can easily provide tax-free benefits to their employees without the administrative burden of sponsoring a cafeteria plan.
• Standardized Definition of Qualified Medical Expenses. Costs for over-the-counter medications obtained without a prescription will no longer be considered a qualified medical expense.

Effective 2013

• Flexible Spending Account Limits. Annual contribution limits are reduced to $2,500 per year, with CPI increases available in future years.
• Itemized Deduction for Medical Expenses. The Act increases the income threshold for claiming the itemized deduction for medical expenses from 7.5 percent to 10 percent. Individuals over age 65 would be able to claim the itemized deduction for medical expenses at 7.5 percent of adjusted gross income through 2016.
• Higher Payroll Taxes for High Income Earners. The hospital insurance tax rate will be increased 0.9 percentage points for wages over $200,000 for individuals and $250,000 for those filing jointly.

Effective 2014

• Employer Coverage Mandates. Employers with 50 or more employees who do not offer employee health coverage will pay $2,000 annually for each full-time employee, excluding the first 30 full-time employees. The penalty is increased to $3,000 for any full-time employee receiving a federal tax credit for coverage, because his or her employer health coverage is considered “unaffordable.” Coverage is considered “unaffordable” where the employee contributes more than 9.8 percent of his or her income, or the employer contributes less than 60 percent of the actuarial value of the plan.
• Insurance Exchanges. Exchanges are created at the state level starting in 2014, where individuals and small employers can shop for health coverage. Initially, the exchanges would be available to individuals and small groups (less than 100 employees), unless the state opts to cover only groups with up to 50 employees. Starting in 2017, states could open the exchanges to larger groups.
• Wellness Programs. Employers can offer larger rewards, up to 30% of the cost of coverage, to employees for participation in a wellness program or for meeting certain health-related goals.
• Individual Tax Credits. Credits are available for people with incomes up to 400 percent of the poverty level for insurance purchased through an exchange.
• Health Plan Changes. 1) Insurers cannot refuse to issue coverage on any individual due to pre-existing conditions. 2) Higher rates cannot be charged to any individual based on health status, gender or other demographic factors. 3) Coverage cannot be non-renewed or dropped because an individual participates in a clinical trial.

Effective 2018

• High Value Plan Excise Tax. A nondeductible excise tax of 40 percent is imposed on any health insurance plan with combined annual employer/employee premiums exceeding $10,200 for individual coverage and $27,500 for family coverage. The tax would only apply to premiums in excess of the threshold.

In addition to the content and presentation of the communications materials themselves, the survey indicates that giving employees enough time to review communications, as well as using a variety of media, are keys to communications’ effectiveness. Employees who had more than three weeks to review benefits education materials were far more likely to say that they had enough time to make informed decisions. And, using at least three different forms of media-such as meetings, printed materials and Web site tools-enhances communication effectiveness because it recognizes different learning styles and helps ensure that the messages sought to be conveyed will be heard by all employees.

These themes from the Unum survey are particularly significant today, because employee benefits communications have taken on increased importance, for a number of reasons-

Employees must make more choices for their benefits today than ever before. In previous generations, employers that offered employee benefits typically provided a health plan, a pension plan, and some life and disability insurance. As health care costs exploded in the 1980s and 1990s, and increasingly shifted to employees, employers introduced multiple health plan options requiring employee choice. Simultaneously, in most workplaces, the company retirement plan morphed from a defined benefit pension plan to a 401(k) plan, requiring employees to choose whether to participate, how much to contribute, and what funds to invest in. Supplemental life and disability options became more available to most employees, along with an array of other voluntary benefits choices (group legal, long-term care, group auto/homeowners, etc.).

Given the array of benefits choices employees now face, education and communication efforts have taken on huge significance, since decision-making that is informed is most likely to result in appropriate choices. While the benefits choices available today do address employees’ individual needs, they also generally pass on to employees more responsibility. This trend first surfaced in the shift from defined benefit pension plans to defined contribution 401(k) plans, in which employees bear the investment risk. More recently, employers’ increasing adoption of consumer-directed health plans takes a similar path. Employees enrolled in these plans shoulder more of the financial responsibility for their ongoing health care costs, in exchange for a lower plan premium. For both 401(k) plans and consumer-directed health plans, education and communications supply the information that is critical to exercising the increased level of responsibility employees bear.

Getting the best value for one’s money is always important, but it’s even more so in a difficult economy. When money is tight-like it has been both for companies and employees lately-we want to make sure we spend our dollars wisely…and information is key to making good and appropriate purchases. Surveys indicate that most people spend much more time on other consumer purchases than they do on employee benefits enrollment-which, for many employees, is among their most significant purchases in any given year. Benefits communications can help employees make good spending decisions about their employee benefits.

• Today’s benefits plans are more complicated than ever before. Consumer-directed health plans, for example, work dramatically differently than plans employees were covered under only a few years ago. These plans offer tax advantages to employees, but this too adds a layer of complexity for employees to understand. Again, effective communications can make a difference in enabling employees to get the greatest benefit from these plans.

A study by the Prudential Insurance Company looked at a number of variables that affected employees’ perceived value of their benefits, and the effectiveness of communications topped the list. The study found effective communications can have as much an impact on employees’ satisfaction with their benefits as the actual benefits or amount of money invested in the benefits.

Even when economic factors force cutbacks and layoffs, organizations that focus on a strong communications program help their employees not only understand, but also appreciate, the benefits available to them – which contributes toward positive employee morale.

A separate survey from Watson Wyatt Worldwide dramatically shows the impact of benefits communications:

“Companies with above average benefits but ineffective communications had a 25% employee satisfaction level, while those with below average benefits but effective communications had a 76% employee satisfaction level.”

Stated another way, it can be better for a company to provide fewer benefits but explain them well, than to provide an expansive-and costly-package of benefits that employees don't really understand.

Keep the following considerations in mind when assessing your benefit communications program:

• Written communications should be in simple and understandable, yet engaging, language. Employees will respond best to communications that they can directly relate to, so use specific examples or modeling tools to help employees select benefits and understand how the benefits can work for them.
• Recognizing that different individuals learn in different ways, use various communication methods and incorporate visuals along with text.
• Communicate throughout the year, not only during open enrollment.
• Help employees understand how the company's benefits offerings are particularly relevant to them.
• Communicate the full value of your benefit's program by providing regular benefit statements. Reminding employees of their total compensation is a great way improve your employees' perception of existing benefit programs.

If the prospect of embarking on a benefits communications campaign seems daunting, give us a call. We can help you provide ideas and strategies along with actual communications materials to enrich your employees’ understanding of their benefits.

Don’t underestimate the value of communications and education as a way to strengthen your company’s benefits package. As the research above indicates, dollars spent on communication and education can be as valuable an investment as dollars spent on the benefits themselves.

Be sure to take a look at a few of our sample benefit communication pieces online or give us a call today.

The study looked at a number of variables that affected employees’ perceived value of their benefits. The effectiveness of communications topped the list, followed by a company paying all or most of the cost of benefits and then by a company offering a range of benefits. According to the study,

how employees perceive the value of their benefits directly influences how important benefits are to employees when selecting a job or when deciding whether to stay with a current employer.

This is because effective communications help employees to not only understand, but also appreciate, the benefits they have or those that are available to them. Thus, the study validates the positive connection between employee benefits and an employer’s recruitment and retention efforts.

A separate survey from Watson Wyatt Worldwide dramatically shows the impact of benefits communications: Companies with above average benefits but ineffective communications had a 25% employee satisfaction level, while those with below average benefits but effective communications had a 76% employee satisfaction level. Stated another way, it can be better for a company to provide fewer benefits but explain them well, than to provide an expansive-and costly-package of benefits that employees don’t really understand.

Keep the following considerations in mind when assessing your benefits communications-

• Written communications should be in simple and understandable, yet engaging, language. Employees will respond best to communications that they can directly relate to, so use specific examples or modeling tools to help employees select benefits and understand how the benefits can work for them.
• Recognizing that different individuals learn in different ways, use various media at your disposal for your communications. Go beyond written communications to also include emails, meetings/seminars, announcements, posters that highlight images and graphics, interactive web tools, and video conferencing.
• Communicate throughout the year, not only during open enrollment. Use non-enrollment periods to highlight particular features of your benefit plans, perhaps focusing on one each month. This enables you to hone in on benefits or plan features that are particularly useful or unique, and that perhaps get overlooked during the frantic activity of annual enrollment. Such features might include wellness features in the company health plan, modeling tools available through the 401(k) plan, the advantages of pre-tax employee contributions, changing benefits during the year in response to a family status change, etc.
• Help employees understand how the company’s benefits offerings are particularly relevant to them. For example, if your company offers voluntary benefits, employees are likely to have broad choices that go well beyond the one-size-fits-all approach to employee benefits. Highlighting the convenience, access and cost-savings features of workplace voluntary benefits can help employees see how advantageous such offerings can be to them.
• Communicate the full value of your benefit’s program by providing regular benefit statements. Reminding employees of their total compensation is a great way improve your employees’ perception of existing benefit programs.

If the prospect of embarking on a benefits communications campaign seems daunting, give us a call. We can help you provide ideas and strategies along with actual communications materials to enrich your employees’ understanding of their benefits.

Don’t underestimate the value of communications and education as a way to strengthen your company’s benefits package. As the research above indicates, dollars spent on communication and education can be as valuable an investment as dollars spent on the benefits themselves.

Be sure to take a look at a few of our sample benefit communications pieces online or give us a call today.

Employee communication materials like total compensation statements, total reward or benefit statements are great tools to help explain and communicate changes to programs.

According to the 2009 UBA Employer Benefit Perspectives survey from United Benefit Advisors, more than 80% of employers felt employees are at least aware of the health care crisis and the reasons for increased cost sharing or benefit reductions; a little less than 20% of employees themselves said they were upset about the benefit reductions or cost increases that their employers implemented. Since communications can play an important role in bringing employees on board with health plan changes, what steps can employers take to make implementation as smooth as possible? Here are a few ideas, both for plan-change-targeted and ongoing health plan communications-

- Make sure employees are aware of the reality of health care costs. Research and publicize to employees national health care cost data and cost trends. Be specific: for example, contrast the average cost of a hospital stay or doctor’s office visit today with that of five or 10 years ago. Do the same for the average cost of coverage under various types of health plans.

- Share specific cost data from your company’s health plans. Employees frequently think of the cost of the health plan only in terms of what they pay in premiums, and overlook the employer’s contribution. This narrow view hides the true cost of health care coverage, as well as what the employer pays toward the cost of coverage (which, ideally, employees should see as part of their total compensation package).

- Use concrete examples to illustrate how health plan spending can cut into the ability of the company to make outlays in other areas. For example, determine the approximate dollar amount increase in the company’s health plan contribution one year to the next, and compare it to some other company expense. Is the amount of the increase equal to an employee salary? Stated differently, has health plan spending growth prevented a needed hiring? Use this process to show how health plan cost increases can eliminate raises and bonuses, result in the cancellation of company events, delay the purchase of new equipment, and the like.

- Help employees see that when they use their health benefits astutely, they not only save themselves money, but also keep plan costs down as well. For example, when employees use preferred providers, they receive the highest plan benefit, and the plan pays the lower, negotiated preferred provider rate. If employees have begun to understand the point above-how health plan spending can impact salary increases, staffing, investment in equipment, etc.-this can motivate them to use the plan more wisely.

- Use statistical data to show employees how, generally, unhealthy people use more health care, resulting in higher plan costs. If employees accept this, they’re more likely to try to follow recommended preventive care schedules, attempt to change unhealthy behaviors, and overall aim to become more physically fit.

Employers want employees to be active participants in controlling rising health care costs. To-the-point communications can bring employees on board in this effort, resulting in more manageable costs for employer and employee alike.

Contact us to discuss how we can help you to communicate with your employees.

January 31, 2010

The increase in life expectancy amplifies the boomer effect. Only 100 years ago, the average life expectancy was 47; compared to 77 years today. As we live longer, we may begin to experience increasing age-related changes in hearing, vision, and even dexterity. The sometimes gradual degeneration of vision or hearing can profoundly affect an individual, both personally and in the workplace.

Normal changes in the aging eye include decreased ability to focus at short range, reduced acuity, a need for better lighting, and reduced contrast sensitivity and depth perception. Left unchecked, such problems can result in expensive errors and even accidents, creating the potential for high costs for employers.

According to the American Society on Aging, 15% of the overall population suffers from some type of hearing loss, with 60% of this group over the age of 55. Hearing loss can be a trickier situation to manage than vision degeneration, because it may go undetected or ignored for longer periods of time. Employees with untreated hearing impairment are more likely to miss some of what is being said in group or one-on-one discussions. Verbal instructions may be misunderstood and not followed correctly, which can result in errors or accidents. Overall workplace information exchange can suffer.

Regular visits to an optometrist or ophthalmologist are the best way to promote healthy eyesight, and a good first source to screen for hearing problems is a general practitioner, with referral to a specialist if appropriate. Most hearing and vision problems are readily correctable through hearing aids or corrective lenses. Be that as it may, many employees delay seeking treatment for hearing or vision loss for financial reasons. Postponing treatment can result in the kinds of workplace costs and risks discussed above.

To encourage employees to take care of these important senses, employers can offer vision and hearing coverages as voluntary benefits. Voluntary benefits are paid in full by the employees who choose to purchase them. However, employees typically save money because the benefits are offered at group discount rates, and often save time by learning about the benefits while they are at work. (Some employers do choose to make a contribution to the coverage.)

Voluntary vision care plans are plentiful, and can offer a variety of choices to employees. Usually, vision care plans cover eye exams and corrective lenses (either eyeglasses or contacts). Plan enhancements could include safety eyewear for individuals in certain industries; laser or Lasik surgery; and polycarbonate lenses for children and active adults.

How a vision benefit is provided also varies according to the plan that is selected. Some plans offer discounted fee services and lenses through a list of exclusive providers or retail outlets; others use a preferred-provider approach and pay a larger or smaller benefit depending on the provider used; and still others pay according to a fee schedule.

Hearing care plan benefits might include discounts on audiologists’ fees, and compensation for hearing aids and related products and services (for example, batteries and cleaning).

Voluntary vision and hearing benefits become ever more valuable with an aging workforce, creating a win-win situation: Employees as well as their employers are likely to benefit from better hearing and vision health in the workplace.

Contact Us to discuss how we can help you to communicate with your employees.

These advantages alone, however, do not ensure that a voluntary benefits program will be a success. Careful planning, including the selection of benefits to offer, choice of vendors and well-crafted communications, are keys to program success.

• Bring in the kinds of benefits that employees want and will enroll in. Survey employees as to what types of additional benefits they would participate in if given the opportunity. Depending on your employee demographics, these could include additional life insurance options, long-term care, or even pet insurance. Voluntary benefits enable employees to self-customize an individual benefits package that is uniquely appropriate to them.
• Examine gaps in your company's current benefits coverage, and consider how voluntary benefits plans can be used to fill these gaps. For companies that have had to scale back on their regular benefits package, voluntary benefits can be particularly helpful. If your benefits budget is tight and, for example, needs to be dedicated to helping fund medical benefits, offering dental and vision on a voluntary basis gives employees easy and affordable access to these benefits.
• After determining which benefits your company would like to extend to employees on a voluntary basis, research appropriate vendors. Look for the product lines vendors offer, whether they have minimum participation requirements, how they conduct enrollment, and their initial and ongoing communications materials. Also examine the vendors' experience and track record working with companies of your size and in your industry. The quality of the vendor, employees' customer service experience with the vendor, and the vendor's ability to smoothly work with your company's human resources department and systems will go a long way in determining the success of your voluntary benefits program.
• Though the vendor will supply some communications materials, company communications concerning the program will help to incorporate it into your overall benefits program in the eyes of employees, making it more likely employees will enroll. Consider announcing new voluntary benefits offerings in a communication from top management, which will demonstrate the company's commitment to the program. Make voluntary benefits enrollment a part of your annual enrollment process, and incorporate descriptions and information on voluntary benefits offerings into the communications materials for your core plans.
• Work closely with the insurance provider you select for your company's voluntary benefits to enhance communications opportunities and enrollment efforts. This will be particularly important if any of the voluntary benefits have minimum participation requirements. Some voluntary benefits vendors will want to come in for presentations, individual meetings or enrollment sessions, all of which can be very effective in increasing participation in these programs.

Voluntary benefits can be a great add-on to any company's benefits program. Careful planning and consideration of the various issues that can affect participation can increase the chances of program success.

Contact Us to discuss how we can help you to communicate with your employees.

According to the most recent (2008) Kaiser Family and Health Research and Education Trust study of employee benefits, the average annual premiums for employer-sponsored health insurance were $12,680 for family coverage, and $4,704 for individual coverage. While these numbers represent a 5% increase over 2007, in a ten-year period the cost increase of family coverage represents a whopping 119%!

As benefits become more expensive to employers, and more valuable to employees, effective communications regarding the benefits are critical. Too often, employee benefits discussions are limited to the annual enrollment period. During this period, many employees' focus will be on what their benefits are costing them, and not on what their employer contributes to the total benefits package. Communications regarding benefits need to continue on a year round basis, and should regularly reinforce the value of the entire benefits package.

Beyond the heavy contribution most companies make toward health insurance, there are other items such as employer contributions to a pension plan or profit sharing plan or matches to a 401(k) plan that need to be emphasized. As the work force ages, companies need to address the wishes of employees who are nearing retirement. The MetLife study points out that in 2007 63% of employers that offered retirement benefits expected the amount of the benefits to increase in the next five years. But in the 2008 study, 73% of employers said they expected this portion of benefits to increase, highlighting the importance employees are placing retirement related benefits.

Other benefits that employers should highlight are: employer premium contributions toward other health and welfare benefits (e.g., life, disability, dental insurance); savings employees realize through purchasing any voluntary benefits at a group rate; the salary-in dollars-represented by paid vacation days; and employer contributions to mandatory benefits, such as Social Security and Medicare. Many employees are unaware of the dollar value of these extra benefits. Helping them understand the worth of such benefits increases employee satisfaction, and hence, retention.

Besides the annual enrollment information meeting, benefits communications should use a multi-media approach throughout the year to explain the value of the benefits package. Options might include: Did-you-know e-mails, colorful placards and posters, printed newsletters, as well as annual total compensation statement that shows the employer's actual outlay-in salary and benefits-for the employee. Information and samples of annual total compensation statements are available on our samples page. All communications should discuss benefits and their value in easy to understand terminology.

Although there is a cost to employers in continually reinforcing the monetary worth of benefits, it is an investment that will pay off in the long run. Employees will feel valued as they gain an understanding of the true worth of their total compensation, thus increasing goodwill between parties. And the carefully communicated value of benefits will help in both recruitment and retention of key personnel.

Contact Us discuss how we can help you to communicate with your employees.

• A recession may make it impossible to allocate additional company dollars to benefits, but an employer can give employees time and convenience instead, through various strategies-
  • Set up a direct deposit program for employee paychecks. Depending on the financial institution used, the direct deposit program may be a bridge to discounted financial services, such as free checking, waived ATM fees, and the like.
  • If business needs permit, give employees more control in balancing their work and personal demands through some form of flexible scheduling. This could include flexible hours, summer hours, compressed workweeks and telecommuting. Some employers find that employees on flexible schedules are better performers on the job, because they can more readily attend to personal issues and thus be more focused when at work.
  • Investigate adding voluntary benefits. These no-cost-to-the-employer benefits can add a dimension to your benefits programs that can be difficult to achieve through a traditional benefits package. Employees are able to buy benefits at prices more affordable than what is available in the individual market; they have the convenience of payroll deduction; they also have the convenience of benefits being marketed to them, rather than having to seek them out on their own.
  • Investigate discount programs. In these programs vendors offer their products and services at a discount to a company’s employees. The vendor’s motivation is access to the employer’s workforce, with the hope that the discount will steer buyers in their direction rather than to their competitors.
  • Although many workplaces have gone more casual, others maintain specified dress codes. Employees appreciate when certain days are designated as casual-blue jeans okay-and the atmosphere that can accompany a casual dress day can give the workplace a lift.
• Examine existing benefits programs to see what works and what doesn’t, and ask whether dollars should be reallocated to better meet employee needs. For example, are there medical plan options in which few employees participate? A streamlining of the available options can reduce administrative and program costs alike.
• Some benefits have multiple uses but may have been promoted narrowly, so that employees may not understand their true value. Employee assistance programs (EAPs), for example, may be perceived as a source of help for substance abuse problems, but EAPs also typically offer a wide range of services many employees could avail themselves of, such as childcare and eldercare referral and assistance with financial issues and debt counseling.
• Employees often underestimate the value of their benefits and compensation package, but there’s a good reason for this-many companies neglect to inform employees of what the company spends to make the benefits offerings available. Employees see their own contributions for medical, dental, etc., on their paycheck stubs, but other than during open enrollment-if even then-many companies simply never let employees know what the company pays for employee benefits. Consider distributing “total compensation statements,” which show employees the actual amount the employer is compensating them, through salary, mandated benefits (e.g., Social Security, Medicare), and the company’s employee benefits program.

As the economy improves and benefits budgets become less constricted, these measures can remain in place, continuing to enhance the value of your benefits package in employees’ eyes.

Click on the Contact Us in the main menu in order to discuss how we can help you to communicate with your employees.

• Customized with your company logo
• High quality full-color digital printing on 8 ½ x 11” premium paper
• Windowed security envelope included at no additional cost
• We do the work–minimal data collection required
• Value-priced!
• The layout, colors, design and pie chart are all pre-set.
• The categories of benefits and the actual titles in each of those lines are also pre-set. Additional types of benefits will be combined in the “other benefits” line.
• The descriptive text below each benefit category may be edited, as well as the letter from the leadership. No additional notes or definitions are included.
• A Summary Management Report and PDFs of each statement for reference purposes are available for an additional fee.

• Customized with the client’s logo
• Branded by the insurance broker/consultant
• High quality full-color digital printing on 8 ½ x 11” premium paper
• Windowed security envelope included at no additional cost
• We do the work–minimal data collection required from you and your client
• No cost to the client; minimal cost to the broker/consultant
• The layout, colors, design and pie chart are all pre-set.
• The categories of benefits and the actual titles in each of those lines are also pre-set. If the employer has additional types of benefits, they will be combined in the “other benefits” line.
• The descriptive text below each benefit category may be edited, as well as the letter from the leadership. No additional notes or definitions are included.
• A Summary Management Report and PDFs of each statement for reference purposes are available for an additional fee.