Employer focus
Working effectively with your benefits advisor
Given the uncertainty and complexity of the current economic and regulatory environment, the need for expert advice and guidance has never been greater. As an employer searching for a new broker or depending on their current benefits advisor for help, what should you expect? Although details vary by company, underlying assumptions may be summarized on a dinner napkin.
Big picture advice
Anne Arundel County (Maryland) School District switched to a large national benefits consulting firm several years ago because their local broker lacked the scope and depth of services they needed, says benefits manager Susan Baugher. Since then she has looked to Aon Hewitt for help with benefits strategies, long and short-term goals − such as vendor evaluations and plan consolidation − and assistance in complying with regulations.
Carolyn Roberts, assistant director of human resources for KCI Technologies, Inc. based in Sparks, Maryland, has a similar expectation of the firm’s benefit advisors, CBIZ and Willis. For the past 13 years she has relied on both firms for keeping KCI’s five-year benefits plan on track, updating it annually and for day-to-day technical support.
Analytical skills
Employers also depend on advisors for their analytical and measurement skills. “Is our consumer driven health plan really making a difference in terms of costs?” Roberts wants to know. Once a year she, with the help of her brokers, may also modify benefits. They take a variety of factors into account, such as employee surveys, company demographics and national trends. In 2011, for example, KCI will add a new wellness incentive that focuses on healthy babies and pregnant moms. Last year the company introduced a step therapy requirement to better manage chronic conditions.
Underwriting
Projecting claims expenses with accuracy is crucial to self-insured medical plans. “We rely on our advisors to know what to budget so we can set our rates,” Roberts says. “They do a really good job of underwriting.”
Leverage
Anne Arundel County's self-funded medical plans cover approximately 25,000 lives. Getting the best discounts from their third party administrator is a priority. Obtaining those discounted rates means working with an advisor that has industry knowledge, leverage with insurers and excellent negotiating skills. Baugher gives Aon Hewitt high marks for bringing about a contract with their TPA that is projected to save several million dollars in claims expense. It also contains a couple of firsts: performance guarantees and wellness dollars.
Resources
Keeping abreast of government regulations and how they affect a particular company is important, says Roberts. KCI has 850 employees at 23 locations in 13 states. Recently she had a question about which states are in sync with IRS waivers on imputed income and which states are not. She likes having access to this type of detailed communication and a staff she can turn to for advice.
Benchmarking
Benchmarking a company’s benefits package is critical to recruitment and retention. “We’re an employee-owned company,” explains Roberts. “Our advisors help keep us competitive with other engineering firms.”
Baugher agrees. She plans to tap her advisor’s experience with other public school systems in upcoming union negotiations.
Flexibility
“You have to be familiar with a client’s business cycle and make the necessary adjustments [to your services] to help them,” says Tom Cheswick, senior benefits consultant with Mark III Employee Benefits in Charlotte, North Carolina. His firm specializes in the public sector. Because of the government’s budget process, he starts working on benefit renewals six months ahead of schedule.
The need for flexibility also applies to the way advisors get paid. “Our clients like having the option of paying fees or commissions,” said Cheswick. “We accommodate their preference when we can. Some products don’t offer that choice.”
Ideas and technology
“We’re constantly looking to add value to our clients’ programs by introducing new ideas and services,” says Cheswick. For example, Mark III Employee Benefits has a full-time wellness coordinator on staff who works with large groups to explain the advantages of introducing health risk assessments and biometric screening. The firm uses video streaming to insure that all employees receive the same information during enrollment meetings and can access it any time. Web-based and Internet enrollment is an option.
Employers also expect to be told about innovations in plan design, such as a dual option dental for a group that was limited to traditional indemnity. “It’s a never-ending search to help clients save money,” says Cheswick.
A good working relationship
Although their natural tendency might be to compete, Roberts expects her advisors to collaborate when working with her – “and they do,” she says. The two firms split the responsibility of handling KCI’s health and welfare plans. She also holds the two firms accountable for parity in the commissions they charge for their services.
Customer service
As pleased as she is with Aon Hewitt’s work and the way they complement her seven-member staff, Susan Baugher has learned to put her customer service expectations in writing. The district’s second five-year contract with its advisor contains a new provision to insure that all deadlines and deliverables are met. A project manager, employed by Aon Hewitt, “helps keep things moving and more tightly managed,” she says. Regular conference calls and periodic face to face meetings have become standard.
Trust
Underlying every successful relationship is a sense of trust. Roberts considers it the most important component to a successful employer-advisor relationship. “You should trust that your advisor puts your interests first,” she says, “providing objective, substantiated and timely advice that fits your company’s culture and needs.”
Resources:
National Association of Underwriters, www.nahu.org
Society of Human Resource Management, www.shrm.org
International Foundation of Employee Benefit Plans, www.ifebp.org
World at Work, www.worldatwork.org
