Inova Leadership Institute
Communicating with Employees About
Compensation and Benefits
Presentation by:
Ms. Cassandra (Sandy) Johnson
Vice President, Human Resources
Mr. Jeff Cowart
Chief Marketing Officer
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Inova Leadership Institute
Welcome to
Inova Compensation
& Benefits Training
PURPOSE:
 Provide a high-level overview of Inova’s Total
Rewards, how they compare in the market and
what you can do to raise employee understanding
 Discuss the programs, scope and value of Inova’s
compensation and benefits programs
 Conclude with breakout groups based on actual
Inova employee compensation & benefit scenarios
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I n o v a L e a d e r s h Ii p I n s t i t u t e
Today’s Session Topics
 Inova Compensation & Benefits Philosophy
 High-Level Overview of Inova’s
Compensation & Benefit Programs
 Inova’s Market Value
 Your Role in Communicating About
Compensation & Benefits
 Your Questions
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Inova Leadership Institute
Inova Compensation
& Benefits Philosophy
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Inova Leadership Institute
Key Issues Facing the Health Care Industry
Manage
Organization
 Quality/Clinical
Outcomes
 Human Capital
• Productivity
• Attraction
• Retention
• Talent Supply
Manage
Relationships
Financial
Results
 Physician
Relationships
• Key agent/broker
• Link of patient to
hospital
 Patient Satisfaction
 Revenue
Generation
• Reimbursement
levels
 Market Share
• Linkage between
hospital, health
plan and
physician
 Cost Management
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Inova Leadership Institute
Challenges in Managing Talent
in the Health Care Industry
 Need to control costs in a dynamic environment
 Diverse workforce
 Unique staffing challenges
• Trouble retaining critical-skill employees
• Older workforce
• High demand for services
• Jobs that require skills and certifications
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Inova Leadership Institute
Compensation and
Benefits Program Outcomes
The “war for talent” is challenging organizations to assess
their Human Resources programs and practices — especially
those designed to attract and retain top performers
Desired Outcomes of
Compensation Program
Desired Outcomes of Benefit Program
• Market-competitive
• Systematic
• Cost-effective
• Market-competitive
• Responsive to employees’ needs
• Supports organizational
objectives
• Valued by employees
• Supports improving/maintaining
employee health and productivity
• Supportive of the business
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Inova Leadership Institute
Inova Total Rewards Philosophy
 Inova offers employees a
total benefits package that:
 Provides financial security
now and in the future
 Helps employees and their
families maintain a healthy
lifestyle
 Fosters learning and career development
 Inova encourages employees to tailor their benefits to
suit their personal needs and circumstances
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Inova Leadership Institute
Inova Compensation Philosophy
 Inova strives to provide a compensation
structure that gives us a competitive advantage
in recruiting and retaining talent
• Our compensation programs fully support our
business strategy, motivating actions and
accomplishments aligned with those strategies
• We coordinate compensation practices across
the system and make strategic decisions to
minimize internal competition between units
based on pay
• We generally target pay at the 50th percentile,
or midpoint, of the market
• We take a more aggressive position in areas
with staffing shortages and business issues that
affect patient care, financial stability and agency
usage
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Inova Leadership Institute
Inova Compensation Objectives
Quality
Ensure that
policies,
procedures and
programs are
administered in
accordance with
legal and
governmental
regulations
Ensure that
processes are
maintained,
utilizing
continuous
improvement
principles
Service
Cost
People
Provide open and
detailed
communications
about total
compensation at all
levels in the
organization, to
help employees
gain understanding
of the link between
their compensation,
market data and
business results
Maintain
compensation
programs that
are competitive
within the
relevant external
labor market
Ensure that
compensation
programs reflect
and support our
mission
Ensure that
administration
processes and
compensation
structures
manage costs
over the long
term
Growth
Community
Provide
compensation
programs that
are flexible
enough to meet
the unique
needs that may
exist within the
organization,
now and in the
future
Be a socially
responsible
employer by
offering marketbased
compensation
and benefits
protection to
employees and
their families,
who are also
members of our
community
Enable
managers to
attract highly
qualified and
diverse
candidates
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Compensation Plan Drivers
To determine the across-the-board increase amount
and other compensation initiatives, our System-wide
Compensation Committee examines the following:
 Salary survey/market data
 Current pay rates as compared
to Inova’s competitors
 Organizational business needs
 Organizational resources
 Current and future staffing needs
 Vacancy
 Agency usage
 Turnover
 Inflation index
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What Compensation Can and Can’t Do
REWARDS can:
• Motivate behaviors and
results
• Engage employees in
business success
• Recognize valued skills
and behaviors
• Communicate commitment
• Contribute to a great place
to work
REWARDS cannot:
• Create a business
strategy
• Build a culture
• Replace poor leadership
• Retain top performers
by themselves
• Improve morale and
commitment
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Inova Benefits Philosophy
 Support employees by providing
benefits that offer choice, flexibility,
life balance and value
 Provide tools to educate employees
and enable them to make informed
decisions
 Implement focused healthmanagement programs that address
the most critical employee health
care needs
 Be in the forefront of new health care
direction, both as a provider and as
an employer
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Inova Leadership Institute
Inova Benefits Program Objectives
Quality
Service
Cost
People
Offer a
reasonable
choice of plans
with highperforming,
innovative
vendors
Ensure that
vendors provide
excellent customer
and claimprocessing service
Ensure that
plan costs are
well-managed
Ensure that
plans are simple,
easy for
employees to
understand and
use
Enable our
ability to retain
and attract
employees
Ensure that plans
meet community
expectations in
keeping with a
world-class, highperforming
organization
Ensure that
quality care is
available and
accessible
Assist in and
encourage better
employee decision
making
Offer plans
that are
affordable for
both the
organization
and for
employees
Promote
employee
involvement and
accountability
Anticipate
changing needs
of our
workforce
Be a socially
responsible
employer by
offering income
protection to
employees and
their families
Ensure that
employees have
easy access to
information that is
timely, accurate
and relevant
Growth
Community
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Inova Leadership Institute
High-Level Overview of Inova
Compensation & Benefit Programs
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Inova Leadership Institute
We Offer a Comprehensive Benefits Package
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MEDICAL
Aetna HealthFund
Aetna PPO1
Aetna PPO2
Aetna HSA HDHP
Kaiser HMO
Out-of-Area Plan
Opt-Out Credit
DENTAL
• Aetna High
• Aetna Standard
PRESCRIPTIONS
• Included in Medical
VISION
• Included in Medical
WELLNESS
PROGRAMS
• BabyNET
• WeightNET
• BackNET
• 75% discount
HealthSource
classes
RETIREMENT
BENEFITS
LONG-TERM CARE
INSURANCE
CHILD CARE
• On-site at IFH,
IFOH and IMVH
• Back-up child care
at Bright Horizons
centers
TIME OFF
BENEFITS
LONG-TERM
DISABILITY
• 60%
• 70%
SHORT-TERM
DISABILITY
• 66-2/3%
LIFE INSURANCE
• Basic Life/AD&D – 1x pay
• Supplemental Life/AD&D
• Dependent Life (Spouse)
• Dependent Life (Child)
EAP
• Legal Assistance
• Financial Planning
• Counseling/Support
• Employee Discounts
INOVA LEARNING
NETWORK
Red text indicates that the benefit is fully paid by Inova for eligible employees
FLEXIBLE SPENDING
ACCOUNTS
• Health Care ($3,000 max)
• Dependent Care ($5,000 max)
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•
•
•
•
•
•
•
•
•
•
•
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OTHER PROGRAMS
Educational Assistance
Adoption Assistance
Direct Deposit
Credit Union/Bank of America
Scholarship Program
Professional Certification Bonus
ADVANCE Clinical Ladder
Shift Differentials/On-Call Pay
Employee Referral Bonuses
Cafeteria/Gift Shop Discounts
529 College Savings Plan
Service Awards
Automated Employment
Verification
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Inova Leadership Institute
Compensation Programs
 Base Pay/Salary
 Shift Differential/On-Call
Bonus Pay
• Employees can increase
earnings by working
evenings, nights, weekends
or by being on-call in
targeted areas
 Annual Adjustment or Lump
Sum
• Based on employee’s
position in the range
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Inova Leadership Institute
Paid Time Off (PTO)
 PTO combines:
• Vacation
• Holidays
• Personal Days
• Incidental Sick Days
 Employees can choose how they use
their PTO
 Extended Illness Bank (EIB):
• Before April 1, 2007, employees
accrued EIB leave that could be
used in the event of a qualified
serious medical condition
• On April 1, 2007, the STD benefit
was enhanced and employees no
longer accrued new EIB leave,
though they may use EIB leave
accrued before April 1, 2007, for
qualified absences
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Inova Leadership Institute
Benefit Coverage and Changes
Who is covered?
Employees may elect to
cover eligible dependents:
 Employee’s legal
spouse
• Unmarried dependent
biological or adopted
children under age 19
(or under age 24, if
full-time students)
• Disabled child age 19
or older, who resides
with the employee
When can they enroll?
When can they make changes?
Employees have an
opportunity to enroll or
change benefits when
hired; if there is a
qualified mid-year
change; and during
annual enrollment
Per IRS guidelines, status
changes can be made any
time throughout the year when
the following events occur:
• Marriage
• Divorce
• Birth, adoption or legal
guardianship
• Death of a dependent
• Change in dependent child
status
• Spouse obtains or
terminates own coverage
due to change in
scheduled work hours
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Inova Leadership Institute
Inova Medical Benefits Overview
 Variety of medical options to meet
employee needs
 Coverage levels for medical and dental
plans:
 Employee
 Employee and one dependent
 Family
 Medical plan options:
 Prescription drug benefits
 Vision coverage
 Mental health benefits
 Options differ based on flexibility in
obtaining care and cost
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Inova Leadership Institute
Six Health Care Plan Options
1. Aetna HealthFund
A Health Reimbursement Arrangement (HRA) to which Inova allocates
funds at the start of the plan year. Employees use the fund to pay for
eligible health care expenses (including deductibles), up to the fund
amount.
2. Aetna Health
Savings Account
A High-Deductible Health Plan (HDHP) that allows employees to defer
income to a health savings account (HSA) to pay for qualified medical
expenses.
3 & 4. Aetna Open
Choice PPO 1 & 2
A network of providers who offer Aetna’s negotiated rates. Employees
do not choose a Primary Care Physician (PCP) or need referrals.
Employees pay a copay at the time of service.
5. Aetna Out of Area
This plan is offered to employees outside the Aetna service region.
6. Kaiser Permanente 30 area medical centers that provide outpatient services. Employees
select a personal physician, who provides referrals for specialty care.
Health Maintenance
Organization
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Two Dental Coverage Options

Aetna High Dental
• Preventive care is paid at 100%
without deductible
• Orthodontic and Periodontal services
are covered at 50%
• Maximum calendar year benefit
of $1,500

Aetna Standard Dental
• Preventive care is paid at 80% without
deductible
• Orthodontic and Periodontal services
are not covered
• Maximum calendar year benefit
of $800
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Inova Leadership Institute
Two Flexible Spending Accounts (FSAs)
 FSAs allow employees to set aside a portion of their pay,
before taxes, for payment of out-of-pocket health care and
dependent care expenses
 Inova offers two FSAs:
Health Care FSA
Employees can pay for
eligible health care expenses
that are not covered by their
medical plans
Dependent Care FSA
Employees can pay for
eligible expenses related to
the care of a child or
disabled dependent
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Inova Leadership Institute
Savings Plans and Pension Plan

401(k) Savings Plan — Employees can make
pre-tax contributions. Inova matches up to 3%
of the employee’s salary, of the first 4% of salary
contributed by the employee (after one year of service). Employees are
vested after three years.

403(b) Savings Plan — Employees can make pre-tax contributions up to
a defined limit. Contributions are not eligible for Inova match. Employees
are immediately vested.

Pension Plan — Eligible employees earn annual pension credits (equal to
3% of salary) based on service hours. Participants also earn interest
credits over time. An employee is fully vested in the Pension Plan after
five years of service.

529 Savings Plan — Eligible employees can make pre-tax contributions
for higher education expenses of a designated beneficiary.
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Inova Leadership Institute
Security Benefits
 Inova offers employees three programs to ensure their financial
security in the event of an accident:
• Life Insurance — Provides basic life insurance at no cost to
employees. Benefit is equal to 1 times pay for full-time
employees and 1/2 times pay for part-time employees.
Employees can elect to purchase additional supplemental life
insurance coverage. Dependent life insurance also is
available.
• Short-Term Disability (STD) — Inova provides STD coverage
of 662/3% of monthly salary for eligible employees. Employees
are eligible on the first of the month following date of hire.
• Long-Term Disability (LTD) — Inova provides basic LTD
coverage for full-time employees at 60% of monthly salary.
Employees can elect to purchase additional coverage.
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Inova Leadership Institute
Employee Welfare Benefits
Career Development
Tuition Reimbursement
Employees can receive up to
$3,000 for course work that
enhances job skills.
Additionally, Inova offers
generous scholarships for
specific clinical programs.
Bonus/Cash Award
Employees receive a 2%
bonus for completing
professional certification for
eligible programs
Healthy Living
Inova HealthSource
Employees can receive a 75%
discount on health, parenting,
fitness and other community
classes that promote healthy
lifestyles from infancy to senior
years.
Long-Term Care
Voluntary long-term care
insurance for employees and
their eligible dependents and
relatives. Covers nursing home
costs and eligible in-home care.
Employee Assistance
Adoption Assistance
Reimburses up to $7,500 of
certain adoption-related
expenses for eligible
employees.
Employee Assistance
Program (EAP)
Confidential mental health
counseling and legal and
financial services for Inova
employees and their
families.
Inova HealthNET Programs
Confidential care management
programs including:
Inova BabyNET
Inova WeightNET
Inova BackNET
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Inova Leadership Institute
Understanding Inova and the Market
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Inova Leadership Institute
Robust Process for
Determining Inova’s Market Position
 We benchmark our employee compensation and benefits
programs against comparable health care organizations
using nationally recognized market survey data and
research
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Inova Leadership Institute
Compensation & Benefits
Benchmark Organizations
 We benchmark compensation & benefits against more than 20
health care systems and hospitals, including several local
competitors, such as:
• MedStar Health — Georgetown University Hospital
• MedStar Health — Washington Hospital Center
• Potomac Hospital
• Reston Hospital Center
• Sibley Memorial Hospital
• George Washington Hospital
• Johns Hopkins Hospital
• Virginia Health System
• Sentara Healthcare
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Inova Leadership Institute
Measuring Market Position — Key Terms
 Total Rewards — Collective term that includes base pay,
retirement, health care, security and paid-time-off
benefits
 Market Average — The average of the comparator group
of survey participants
 Market Ratio — Inova’s ranking in the marketplace,
expressed as a percentage
 Slotting — Determining the value of a job relative to
other similar benchmarked positions in the organization
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Inova Leadership Institute
Inova’s Market Position




Drive the market average in
certain areas:
• Retirement plans
• Security benefits
Meet, or in some cases,
beat the market average
in other areas:
• Base salaries
Accept that in some areas we will not be as competitive,
due to demographics and business decisions
Reinforce the total-value proposition of working at Inova,
Northern Virginia’s largest health care system
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Inova Leadership Institute
Inova’s Market Position
Benchmark Organizations
Security 4%
PTO 44%
Retirement 14%
Health 38%
Inova Health System
Security 6%
PTO 42%
Retirement 16%
Health 36%
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Inova Leadership Institute
Your Role in Communicating
Compensation & Benefits Information
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Inova Leadership Institute
Your Role in Communicating with Employees

As a manager, you are Inova’s first line of
communication with employees

You are a trusted resource and advisor for your direct
reports; they will rely on the information they receive
from you

You should be able to answer high-level questions
about Inova’s compensation & benefit programs

Leaders should know:
•
How to address appropriate questions about
compensation & benefits
•
When to refer an employee to HR or the Benefits
Center (at Fidelity)
•
What resources are available for self-help
•
To submit timely employee profile updates for
changes in status, salary or other circumstance
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Inova Leadership Institute
What You Need to Know
 You should know and be able to communicate
with your employees about the following:
 The compensation & benefits programs
offered by Inova
 Eligibility requirements for Inova
compensation & benefits programs
 Our benefit vendors and their role
 Resources for additional information
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Inova Leadership Institute
Where to Turn for More Information

Inova provides a variety of resources on
compensation & benefits, including:
 The materials you received today
 The 2007 Benefits Enrollment Guide
 Summary Plan Descriptions (SPDs)
 The Inova Benefits Center
(netbenefits.com)
 Custom Aetna Web site
(http://custom.aetna.com/Inova)
 Inova Human Resources department
 InovaNET — HR Page & HR Policies
 Town Hall meetings with employees
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The Benefits Center or HR Department?
You should know when to refer employees to the
Benefits Center, HR or the Insurance Carrier
The Benefits Center
• To report a life event
(e.g., a marriage or birth)
• To enroll in your benefits
(e.g., health insurance or
retirement plan)
• To commence retirement
Questions regarding:
• Information on current
enrollments
• Health care costs
• Benefits eligibility
• Impact of change in
employment
status on benefits
HR Department
Insurance Carrier
• To change employment status
• Employees should contact
Aetna, Kaiser or Medco, as
appropriate, to request
medical, prescription or dental
ID cards and/or to ask
questions regarding claim
payments or benefits
coverage
• To update name or Social
Security number
Questions regarding:
• Paid Time Off (PTO)
• Extended Illness Bank (EIB)
• Employees should contact
Prudential regarding shortterm or long-term disability
claim status, filing or
payments
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Inova Leadership Institute
Referring an Employee to the Benefits Center
 From time to time, an employee will
have a question or situation you are
not able to resolve
 Examples of when to refer an
employee to the Benefits Center
include:
• A question or situation that involves
personal information about an
employee that makes you or the
employee uncomfortable
• Any time there is a potential legal
issue
• When you are unable to find an
answer through your available
resources
Contacting the Inova
Benefits Center:
 By phone:
1-877-MYINOVA
(694-6682)
 On the Web:
netbenefits.com
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Inova Leadership Institute
Accurate Employee Data:
What You Can Do To Help
 Updates to employee data are sent to the
Benefits Center (at Fidelity) daily
 Changes received daily are reflected in
Fidelity’s system the next day, as long as there
are no errors identified with the information sent
 Changes can be applied to Fidelity’s system
either by Inova or initiated by the employee
calling the Benefits Center or logging on to
NetBenefits
 Almost all data changes (such as Social
Security number, date of birth, address, pay
information and employee status) must be
received from Inova; an employee cannot call
the Benefits Center to update this information
Whenever an employee
changes status, it is very
important that you
complete an Employee
Profile (EP) and submit to
HR in a timely manner.
This will ensure that the
employee’s data is
accurately reflected in
Fidelity’s system and no
incorrect literature is sent.
 Most changes require literature to be mailed to
the employee
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Inova Leadership Institute
Communicating the Message
 Communication is a series of transactions
between individuals. Success depends on how
well those individuals understand each other.
 Effective communication is not what we say or
do or write, but others accept and believe.
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Inova Leadership Institute
Key Drivers of Effective Communication
 Knowledge and authority
 Preparation
 Listening
 Responsibility
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Poor Listening Drivers
 Interrupting
 Allowing speaker’s sentiments to influence
your reaction
 Busy framing reply
 Lack of interest, engagement
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Effective Listening
 Value the person you are speaking with
 Repeat back to verify understanding accuracy
 Stop, think, frame appropriate reply
 Cultivate the ability to be silent
 Immediacy important, not essential
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Inova Leadership Institute
Responsibility & Answering Questions
 Avoid “us / them” trap
 Never speculate
 Single-out problem / listen for cause
 Help speaker associate problem with cause
 Help identify resources for solution
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Your Questions
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Inova Leadership Institute
Introduction to Breakout Sessions
 We will now break out into groups to
practice answering employee questions
about compensation & benefits
 You will find a set of scenarios/case
studies in your packet that we will use
during these discussions
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