"Insurance Explained”
Jenny Foster, CIC
www.ehlinsurance.com
Speaker Bio
Jenny is the Senior Employee Benefits Advisor and Human Resources Manager for EHL
Insurance, headquartered in Poulsbo, Washington. She joined the agency in 2002 and
holds her Certified Insurance Counselor (CIC) designation and is a licensed agent and
broker in Property and Casualty and Life and Disability.
Jenny has a Bachelor of Science in Physiological Psychology from the University of
California, Davis. Her focus is helping clients obtain and retain the very best employees
and ultimately improving her client company’s profits. She is most passionate about
employee education. “If employees do not understand their benefits, how can they value
them?”
An active member of our community, Jenny has served on the board of her local SHRM
chapter. She enjoys creative writing, traveling, walking, shopping, and serving in her local
church. Jenny lives with her husband, two girls, and eccentric Japanese Shiba Inu,
Charlotte.
Jenny can be reached at (800) 929-1669 ext. 8170 or jenny@ehlinsurance.com.
www.ehlinsurance.com
House Keeping
Musical stretch breaks every 20-30 minutes
Candy throwing (hold harmless agreement)
Late return policy following breaks
Participation increases everyone’s fun and ability to
learn and retain information
Interruptions are encouraged
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Let’s Get It Started…!
Post it note participation exercise
Introductions (time permitting)
Health plan quiz (prizes)
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Tough Statistics
23.6 million children and adults in the United States
(7.8% of the population) have diabetes.
Total costs of “diagnosed” diabetes in the United
States in 2007: 174 billion.
Nearly 7 out of 10 office visits in the U.S. result in a
prescription being written.
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It’s A Jungle Out There!
High toll of cancer on our nation
Death rates for cancer of the pancreas, esophagus,
thyroid and liver are increasing.
An estimated 14% of cancer deaths in older men
and 20% in older women can be attributed to excess
body fat.
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It’s A Jungle Out There!
Currently more than 64% of U.S. adults are either
overweight or obese, according to NHANES.
Fruit and vegetable intake is not increasing. Red
meat and fat consumption are not decreasing.
Average 20% increase in employer’s portion of
group health plan premiums since 2005.
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Average Health Insurance 2005-2010
$10,880
$2,713
$1,284
Worker
Contribution
Increase
$13,770
$3,997
27%
47%
$8,167
$9,773
20%
2005
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits,
2005-2010.
2010
Worker Contribution
Employer Contribution
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It’s A Jungle Out There!
Confusing health care reform legislation
Increase in stress-related diseases
National unemployment rate still 9.6%
Average litigation verdict for Chelan County,
Washington in 2009 was $350,000.
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The Cost Of Hiring The “Wrong” Employee
What is the true “cost” to your company?
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The lazy employee
The dressed up resume
The Waffle
Mr. Do Nothing
The Folder
Mr. Conspiracy Theory
Best way to avoid hiring the “wrong” employee?
Have a clear, consistent, written hiring process!
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The Cost Of Hiring The “Wrong” Employee
The WRONG employee will:
 Create a negative work environment
 Sue your company
 Harass/discriminate against other employees
 Quit at the drop of the hat
 Inappropriately file for unemployment or workers
compensation
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The Cost Of Hiring The “Wrong” Employee
The RIGHT employee will:
 Create a positive work environment
 Improve profitability
 Empower coworkers
 Build customer loyalty
 Work in a safe manner, lowering insurance costs
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The “Right” Employee
High cost of retaining the “wrong” employee.
High cost of losing the “right” employee!
What if they are a key employee?
What if they take other key employees with
them?
What if they go to a competitor?
How do we KEEP the right employee?
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How To KEEP The “Right” Employee
Maintain some type of employee benefits program
that is well understood and valued by employees.
74% of covered employees regard health benefits
as an important factor in their loyalty.
Even in these economic times engineers at Google
are still allowed to allocate 20% of their time to
projects of their own choosing.
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The Importance of Employees
“Good business leaders create a vision, articulate the
vision, passionately own the vision, and relentlessly
drive it to completion.” - Jack Welch (former CEO,
General Electric)
“We want passion for our business... workers who can
interpret and execute our mission, who want to build a
career, not just take a temporary job.” - Howard Schultz
(CEO, Starbucks and Seattle SuperSonics)
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Break Time!
When we return…
Employer Trends
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General Employer Trends
According to this year’s Kaiser Family Foundation
study, 69% of companies reported offering health
benefits (up from 60% in 2009).
43% to 60% of organizations are already using an
HDHP (to include focus on HSA bank account).
Ten million Americans are now covered by HDHP/HSA
plans, an increase of 25% since 2009.
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General Employer Trends
25% of covered employees have a deductible of at
least $1,000.
The average annual premium for family coverage is
running at $13,770 (a 114% increase since 2000).
51% of workers with family coverage pay more than
25% of the cost of premium.
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General Employer Trends
78% of covered employees have plans with 3 or more
tiers of pharmacy cost sharing.
74% of employers offering health benefits offer at
least one of the following wellness components:
Weight loss program
Gym membership
Smoking cessation
Personal health coaching
Healthy living classes
Web-based resources
Wellness newsletter
Health Risk Assessment
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Employee Benefits Relevant To Retention?
Workplace benefits have remained resilient despite
the recession.
53% of employers report controlling benefits costs
as their top objective.
Employee retention (formerly first concern) is still
second most important employer objective.
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Employee Benefits Relevant To Retention?
Employees are more satisfied with their benefits
than at any time since 2007.
More than 35% of employees are prepared to
shoulder more benefits costs to keep benefits they
value.
Of employees satisfied with their benefits, 81% say
they are very satisfied with their jobs.
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Employee Benefits Relevant To Retention?
69% cite high benefits satisfaction as a key reason to
stay with their employer.
The average worker loses 115 productive hours a
year due to poor health (cost: $250 billion/year).
59% of employees who participated in company
wellness programs said the programs were effective
at improving productivity.
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Stretch Break Time!
When we return…
Retention Strategies
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Retention Strategies
Retention begins with an exceptional hiring process.
What culture do you want to have that keeps people
from leaving?
Employee Benefits are only as limited as your
imagination!
Happy Hour is 9 to 5 book
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Retention Strategies
Flexible work schedules
Worksite fitness or wellness programs
Employee Benefit Statements (Total Comp)
Employee Assistance Programs (Chevron Corporation
saves $7 for every $1 spent on its EAP)
Health Advocacy
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Retention Strategies
Education and training
Clear communication
Approachable supervisors/managers
Involvement in decision-making process
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Retention Strategies
Work-Life Programs can boost both loyalty and
productivity. Employees and employers report
similar conclusions.
“Many companies have long contended that
stress in the home causes productivity loss in the
market place...and it does. But research now
reveals that stress on the job causes stress at
home. In other words, they feed off each other.”
Zig Ziglar
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Retention Strategies
Gift cards & incentives (know your employees; $10 to
$200)
Free parking and other perks
Company discounts
Cisco is one of the nation’s largest providers of onsite child care with over 800 children enrolled, and
parents can track their kids via computer.
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Retention Strategies
Employees want help with their retirement
“Life is full of uncertainties. Future investment
earnings and interest and inflation rates are not
known to anybody. However, I can guarantee you
one thing.. those who put an investment program in
place will have a lot more money when they come to
retire than those who never get around to it.” Noel
Whittaker
Maximize employee education!
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Retention strategy group activity
Please form groups and take 2-3 minutes to discuss:
1)What/if any of the retention strategies we discussed are
you using at your company? Are they working? Why or why
not?
2)What is one retention strategy we discussed today that
you might consider implementing? Why?
3)As a group write down one retention strategy you came
up with as a group not presented today (be ready to share it
with the group).
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Break Time!
When we return…
Leveraging Employee Education
“Always treat your employees exactly as you want
them to treat your best customers.” - Stephen R.
Covey
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Leveraging Employee Education
Think about how you scored on our health plan quiz.
 What do your employee
benefits meetings look like?
 How often do you have
them?
 What is employee feedback?
 What do you think your
employees would score on a
health plan quiz?
 How many questions do you
answer each day/week/month
related to your employee benefits?
 How much time does this take
from revenue focused work?
 How much do you think this
costs your firm annually?
 What if there was a low cost/no
cost solution?
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Leveraging Employee Education
Low cost or no cost!
If employees understand their benefits; they value
them!
Harris study: only 29% of employees reported their
benefits education was excellent or very good in
2009.
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Leveraging Employee Education
Highly engaged employees are 26% more productive.
How you communicate your benefits are as important
as what they are.
Employees who believe their benefits were clearly
communicated are more likely to feel their employer
values their work and well-being.
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Leveraging Employee Education
Employ a 3+3 strategy to benefits education.
3+ weeks and 3 ways to learn (visual, auditory,
tactile)
Effective benefits communication contributes to a
sense of financial security for employees.
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Employee Benefit Surveys
What employee benefits are most important to you?
Medical
Dental
Vision
Life
Disability
EAP
FSA
HSA
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Employee Benefit Surveys
Wellness
What other benefits would you be most interested in?
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Signing Of The PPACA
“How we might help the American people deal with costs, coverage,
insurance, these other issues. And we might surprise ourselves and
find out that we agree more than disagree. And that would then help
to dictate how we move forward. It may turn out on the other hand
there’s just too big of a gulf.” — President Obama
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The Chips Are Still Falling
We basically know what the problems are, all of us. We
basically know that the current system is unsustainable.“
– Senator Max Baucus, D-Montana
“People are angry. We promised them change in
Washington,” - Senator John McCain, R-Arizona
"If you think they want a government takeover of health
care, I would simply submit you’re not listening to them.”
- Representative Paul Ryan, R-Wisconsin
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Health Care Reform
Effective Immediately: adult children covered to age 26
January 1, 2011
January 1, 2014
No reimbursement for OTC drugs unless
prescribed (HSA/FSA)
No pre-existing condition
exclusions
Non-qualified HSA distributions subject to
20% tax penalty (previously 10%)
No annual limits
September 1, 2011
No lifetime limits on essential benefits
No pre-existing condition exclusions for those under age 19
First dollar coverage for preventive care
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Health Care Reform
2018
Cadillac Tax – 40% excise tax on employer sponsored health plans exceeding
$10,200 for individual coverage (dental, vision, accident, disability, long term
care, specified disease insurance excluded)
Other Highlights
Small business tax credits available 2010-2013
10 or fewer FTEs & average annual wage of $25,000 or less (up to 35% credit)
10-25 FTEs & average annual wages of $50,000 or less (up to 25% credit)
Non-grandfathered fully insured plans must satisfy IRS Section 105 nondiscrimination rules.
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What Is An HSA?
INSURANCE
A High-Deductible
Health Plan
(HDHP)
BANK ACCOUNT
Tax-Free
IRS Qualified Checking
Account
(HSA)
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Typical HSA Plan
Deductible waived for preventive care
No copay. Office visits (“talking”) subject to deductible.
Procedures subject to deductible (“doing”)
Key preventive benefits (deductible waived):
Routine care
Pap smears
Childhood immunizations
Prenatal care
Mammograms
Cancer screenings
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Typical HSA plan
$2,500 deductible for an individual ($5,000 deductible if
enrolled with dependents).
$2,500 out-of-pocket maximum (capped at $5,000 for a
family)
80% (in-network); 50% (out-of-network) plan
Worst case scenario:
$2,500 deductible + $2,500 out of pocket = $5,000
$5,000 deductible + $5,000 out of pocket = $10,000
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Prescriptions & HSAs
Prescription drugs are subject to the deductible.
Once deductible is met prescriptions are covered at
80%.
Once coinsurance (out of pocket maximum) is met:
100% Rx coverage!
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Truly A Legal Tax Shelter?
You can contribute to your HSA bank account via pretax payroll deduction.
The IRS allows you to tax shelter up to $3,050 per
individual per calendar year and up to $6,150 if
enrolled as a family (combination of company and
employee contributions).
Employees need to keep all receipts, as this is an IRS
regulated benefit.
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HSA Tax Implications
Tax Savings Example:
HSA Contribution
Federal (25%)
Social Sec (6.2%)
Medicare (1.45%)
Estimated employee tax savings:
$1,000.00
$250.00
$62.00
$14.50
$326.50
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Traditional vs. HSA plans
HDHP/HSA Plan:
Traditional Plan:
Family deductible
Individual deductible
Deductible waived for
preventive care
Deductible waived for
preventive care
Rx subject to deductible
Rx copays
Rx reimbursable through HSA
Predictable Rx co-pays
Tax sheltered account
No employee tax advantage
HSA funds grow and roll over
tax free; portable (“owning”)
No equity (“renting”)
Pre-tax premium & HSA
contributions
Pre-tax premium payroll
deductions
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Words Of Wisdom
“In the end, all business operations can be reduced to
three words: people, product and profits. Unless you've
got a good team, you can't do much with the other
two.” -Lee Iacocca
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What about dental?
Unless perceived as a benefit by employees, dental
ROI may not always pencil out.
83% of employees reporting excellent dental health
visit a dentist every six months or more.
64% of employees who say they have good dental
health also report better overall health.
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What about dental?
Regular dental care is critical in early detection:
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Mouth/throat cancers
Diabetes
Colon cancer
Heart disease
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Gingivitis
Heart burn
Lymphoma
20+ conditions
Dental health is also correlated to a healthy heart!
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Vision Insurance
Relatively low cost but high perceived value
Vision providers may be able to diagnose retinal
disorders, arteriosclerosis, or diabetes.
Approximately half of employers offer a formal
vision plan.
Employers stand to gain as much as $7 for each
dollar spent on vision coverage.
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Life & Disability
3 in 10 workers entering the workforce today will
become disabled before retiring!
Life and disability insurance pack a powerful punch for
a small premium.
Increasing group enrollment in these benefits
Determine your company’s goals before selecting a
product (short vs. long term disability).
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Voluntary Benefits
Dental, accident, specified disease, some STD and LTD
programs, supplemental or dependent life and AD&D
Employees offered voluntary benefits are 17% more
satisfied with their benefits than those not offered
voluntary products.
40% of employees are interested in a wider range of
voluntary benefits. Smaller companies less likely to
offer.
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Unknown Benefits Left On The Table
Your health plan typically offers discounts on:
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Health Risk Assessments
Wellness coaches
Weight management
Vision discounts
Alternative care
Hearing devices
Hearing screenings
Fitness clubs
Family safety products
Senior discounts
Red Cross CPR courses
Your payroll vendor
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Your Health Plan Website
Find a preferred doctor
Access documents & forms
Review benefits & claims
Mail order pharmacy
Compare hospitals
Use wellness tools
Learn about prescriptions
Look up symptoms
Access discounts
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Celebrate Your Benefits Portfolio!
Dual choice health plans
Wellness tools
Paid time off
Flexible Spending Account (FSA)
401(k)
Life/AD&D coverage
Tax advantaged HSA account
Excellent dental benefits
Vision program
Short & Long Term Disability
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Closing Remarks
Be wary of hiring the wrong employee!
Leverage Employee Benefits to retain the best.
Get creative with retention strategies.
Harness the power of employee education!
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Closing Remarks
Consider your HSA strategy
Evaluate voluntary benefits
Celebrate your Employee Benefits Portfolio!
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Contact Information
Jenny Foster, CIC
(800) 929-1669 ext. 8170
jenny@ehlinsurance.com
www.ehlinsurance.com
Questions & Answers
Enjoy your time in Seattle!
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Definitions
Deductible – the amount an insured person is responsible for before insurance
kicks in (i.e. $500 or $1,000)
Copay – a small, fixed amount required by the insurance company that a
subscriber must pay typically for office visits or prescriptions.
Coinsurance – you and your insurance company share expenses (i.e. insurance
company pays 80%; you pay 20%)
Out of pocket maximum – the financial worst case scenario that an insured must
pay in a calendar year before the insurance company pays 100%. The most you
would have to pay in a single year out of your own pocket.
Maximum benefit – the maximum an insurance company will pay per calendar
year or over a specified period of time (i.e. $2 million lifetime maximum, $1,500
rehabilitation maximum per calendar year)
“Solutions you can understand”
Definitions
Emergency Room copay – a small, set amount that must be paid to visit the
ER in addition to a deductible when the visit it not serious enough to cause
inpatient admission. Typically this copay is waived if admitted.
Generic – Drugs that have typically been on the market long enough to have
lost their patent and can be duplicated by other companies, typically
lowering their market value and price. Chemically equivalent to the drugs
they copy cat.
Preferred Brand name drug – A brand name drug that is still under patent
protection but preferred by insurance companies based on efficacy and cost.
Non-preferred brand name drug – A brand name drug that is still under
patent protection but not preferred by insurance companies due to safety
and or cost concerns. Typically another drug can be substituted.
Pre-Certification – when an insurance company requires that a member call
to gain written approval before a complex or costly procedure. Failure to
pre-certify can result in no coverage or reduced coverage.
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References
The Henry J. Kaiser Family Foundation & Health Research & Educational Trust;
www.kff.org
8th Annual Study of Employee Benefit Trends; www.metlife.com/business
National Underwriter, Allison Bell 5/17/2010;
www.lifeandhealthinsurancenews.com
“Employee Education and Enrollment Education Survey,” January 2010.
American Diabetes Association; www.diabetes.org
Mayo Clinic; www.mayoclinic.com
American Cancer Society; www.cancer.org
National Cancer Institute; www.cancer.gov
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References
National Health and Nutrition Examination Survey; www.nhanes.org
Magellan Behavioral Health; www.magellanhealth.com
Americas Health Insurance Plans; www.ahip.org
www.benefitsellingmag.com
http://apps.nccd.cdc.gov
“What Employers are Considering,” International Foundation of Employee
Benefit Plans
“Behind the Numbers: medical Cost Trends for 2011,” Pricewaterhouse Coopers
WRG. 2006. S. Aldana, PhD Bringham Young University
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