THE DYNAMIC STATE OF MEDICAL HEALTHCARE COVERAGE
Lakewood Resource & Referral Center212 Second Street, Suite 204
Lakewood, NJ 08701
THE TOPICS WE’LL BE COVERING
What Benefits do Businesses offer?
A Focus on Health Benefits
Developing a Health Benefits Package
Why are Benefits Offered?
What Kind of Benefits are Offered?
What Kind Of Benefits Are Offered?
Legally Required Benefits
Optional Benefits
Perquisites
Three Categories
What Kind Of Benefits Are Offered?
Legally RequiredBenefits
Unpaid Medical Leave
Overtime
Unpaid Family Leave
Workers Comp
Social Security
Unemployment
Fitness
What Kind Of Benefits Are Offered?
Optional Benefits
Pension And Retirement
Health
Flexible Spending Accounts
Life Insurance
Employee Assistance Programs
What Kind Of Benefits Are Offered?
Perquisites
Vacation/Sick days
Stock Purchase Plan
Commute
Food/Beverages
Relocation Expenses
Childcare
A focus on Health Benefits
A Focus on Health Benefits
Cost effective packages
Alternative Health Benefits
Flexible Benefit Plans
Collective Purchasing
Drug Benefits Management
Health Savings Account
Self Insurance
Wellness Programs
A Focus on Health Benefits
Alternative Health Benefits
Self Insurance
What is it?
A Company Insures it’s own Risk
Company Sets aside funding for predictable Costs
Can Include Stop Loss Insurance
Can Include TPA’s or ASO’s
A Focus on Health Benefits
Regulatory
Cost Control
Access
Flexibility
Self Insurance
Alternative Health Benefits
Some side Pointers..
A Focus on Health Benefits
Health Savings Account
Alternative Health Benefits
Higher Deductible/lower premium plans
Contributions into account to cover expenses
Contributions are Tax Deductible
What is it?
A Focus on Health Benefits
Health Savings Account
Regulatory guidelines
IRS Contribution limits
Alternative Health Benefits
Some side Pointers..
A Focus on Health Benefits
Flexible Benefit Plans
Alternative Health Benefits
Employees design their own packages
Benefits are most relevant to employees QOL
Maximizes efficiency and impact of benefits
What is it?
A Focus on Health Benefits
Flexible Benefit Plans
IRS Regulations
Alternative Health Benefits
Not all associated costs are tax deductible
Not all deductible costs are exempt from all taxes
Some side Pointers..
A Focus on Health Benefits
Collective Purchasing
Alternative Health Benefits
A Group of Agencies join for a large group plan
Can be done for any form of health insurance
What is it?
A Focus on Health Benefits
Spreads insurance risk over larger base
Collective Purchasing
Added bargaining power
Alternative Health Benefits
Some side Pointers..
A Focus on Health Benefits
Drug Benefits Management
Alternative Health Benefits
Separate insurer for prescription drug benefits
PBM’s provide their own network of prescription coverage
What is it?
A Focus on Health Benefits
Lowers cost associated with drug benefits utilization
Drug Benefits Management
Similar to HMOs and PPOs
Alternative Health Benefits
Some side Pointers..
A Focus on Health Benefits
Wellness Programs
Alternative Health Benefits
Employees join program to strengthen their health
Wellness Programs can be developed to address a wide range of health issues
What is it?
A Focus on Health Benefits
Lowers health risk among participants – reduces premium
WELLNESS PROGRAMS
Reduces health related operational losses
Alternative Health Benefits
Some side Pointers..
What It All Boils Down Too…
Understanding the Costs
Lowering the costs to insurers
Developing creative cost Containment strategies
Taking advantage of Cashless compensation and associated tax benefits
A Focus on Health Benefits
$.03 $.04 $.06 $.05 $.14 $.15 $.20 $.33
Prof
it
Con
sum
er S
ervi
ces
Cla
ims p
roce
ssin
g/
Oth
er a
dmin
istr
ativ
e
Oth
er M
edic
al S
ervi
ces
Dru
gs
Out
patie
nt c
osts
Inpa
tient
cos
ts
Phys
icia
n Se
rvic
es
A Focus on Health Benefits
Breaking Down the Insurance costs…
Why are benefits offered?
Why Are Benefits Offered?
To Build Efficient Relationships With Employees
LEADERS
To Stay Competitive In Talent Recruitment
LAGGARDS
MAXIMIZE PRODUCTIVITY
Why Are Benefits Offered?
MAXIMIZERETURN ON
INVESTMENT
Businesses Invest In People
People Provide Productivity
Maximized Productivity = Maximized ROI
Developing Health Benefits Packages
McKinsey & Co Designing Better Employee
Benefits
Rick WagonerFormer CEO - GM
Developing Health Benefits Packages
“The Healthcare System Is A Problem That Threatens Competitiveness Of US
Corporations”
“A Company Should Take A Product Development Approach To Designing Benefits
Packages”
Developing Health Benefits Packages
Product Development
Idea Generation 1
Idea Screening 2
Concept Development3
Business Analysis4
Beta5
Implementation6
Developing Health Benefits Packages
What Kind Of product are we trying to develop?
A product that will maximize the Return on Investment in Human Capital
Product Development
Developing Health Benefits Packages
Technology Communications Knowledge, Talent, Skill
The Investment
Developing Health Benefits Packages
Return Cost Return on Investment
Cost
The Return on Investment
Developing Health Benefits Packages
Hard Costs Soft Costs
The Investment in Employees
Recruiting
Salary
Benefits
Taxes
Office Space
Office Equipment
Opportunity Costs
Administrative Costs
WHAT DOES AN EMPLOYEE
COSTS?
Developing Health Benefits Packages
The Return on Investment in EmployeesWHAT RETURN DOES AN
EMPLOYEE YIELD? Knowledge Talent Skill
What Are they worth?
How do we quantify the value of these assets?
Developing Health Benefits Packages
The Return on Investment in EmployeesQUANTIFY THE
VALUE OF EMPLOYEES
Industry Average Profits /average Compensation for Position
Projected Future Agency profits X Percentage of Position Influence
Equals the percentage of influence position has on profits
Discounted by Risk to rate of productivity
Equals the value of an Employee
Developing Health Benefits Packages
Present Value of Employees PV of Total hard & Soft Cost Return on Investment
PV Total hard & Soft Cost
The Return on Investment in EmployeesTHE RISK ADJUSTED
RETURN
Developing Health Benefits Packages
Designing the Product
The benefits maximize the ROI
Reduces Hard Costs Reduces Soft Costs Reduces Risk Rate
Developing Health Benefits Packages
Designing the Product
Should Consider the Value of Employee
Should Increase the Return
Should Build Effective Relationships
Should Enhance Bottom Line
A Benefits Package should be designed for
Maximized ROI
A Successful Investment
“The Healthcare System Is A Problem That Threatens Competitiveness Of US
Corporations”
“A Company Should Take A Product Development Approach To Designing Benefits
Packages”
A Crippling Cost
OPTION B
OPTION A
There Are only Two Options
SUMMING IT ALL UP…
Benefits Basics
Developing a benefits Package
Alternatives for Cost ContainmentWill it Maximize
Profits?
THANK YOU.
Q&A