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Benefits
They
were called "Fringe Benefits," but not anymore. The cost of variable
pay to employers is 40-50% of base wages, or 1/3 of total
compensation. The
cost to employees is getting more attention too. Total health care
costs per household came to $14,000 a year, which is more than
mortgages or rent. Health care insurance premiums are growing
more than three times faster than wages.
The universal health care coverage idea is on
a collision course with tax revolt in a country where, in one
state alone, over 6 million residents have no health
insurance. The "ownership society" concept is being applied in
one legislative proposal that would require workers to obtain
health care coverage, just like drivers must have auto
insurance. Another method gets people involved in the first
dollar care decisions, so they realize the true cost.
Consumers make better shoppers when they are armed with
facts. National
statistics are available on the quality of care at over 4,000
hospitals for cardiac and pneumonia patients.
See Newt Gingrich's ideas at: Center for Health
Transformation
We need to educate
ourselves, our employees, and get involved. We hope you find this
month's articles provide some valuable insights.
For
more information, contact E. K. Ward & Associates at 716-626-1188 or
please click
here.
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OI
Partners -
E.K. Ward and
Associates
April
2005 Newsletter
Benefits
costs have become "bottom line influencers," far from
the "hidden line item" on the operating statements of
the 80s.
For example, at General Motors, healthcare costs
make up a whopping $1,500 of the cost per vehicle, a
likely contributor to the fact that GM's market share in
the
U.S.
has dropped from 28.3 percent in 2003 to 25.7 percent as
of first quarter 2005. CEOs and human
resource professionals consistently rank benefits costs
as one of their top areas of concern.
In this newsletter, we have compiled several
articles that will give you a different look at benefits
and cost management. We've included
an article on considerations to make when counseling
outplaced employees about less expensive ways to replace
company-paid medical insurance. We discuss ways
small business entrepreneurs approach benefits cost
management, including HSAs, HDHPs, benefit debit cards
and eliminating paying twice for administration
costs. We
consider an emerging trend-employee benefits
coalitions-that is quickly surfacing as a "bottom line
influencer."
Finally, the phrase "Outsourcing of
Benefits" may bring
negative thoughts to mind. But just maybe
we should consider the values outsourcing can
bring:
defined performance standards, improved HR
operational effectiveness, reduced non-compliance risks
and increased employee satisfaction.
What is your approach to benefits cost
management?
What do you want to achieve for your
organization?
What do you need to change? The resources in
this newsletter may shed new light on difficult benefits
questions.
Sincerely,
Anne Mahoney
Glose
OI Partners
(Williamsville,
NY)
Please
click on the links below to read the complete
articles.
Options for Replacing Company-Paid
Health Insurance
Perhaps the cruelest
aspect of job loss is the loss of company-paid
health insurance. When times are tough and money
is tight, the very last thing anyone needs is to
pay hundreds of dollars each month to cover a risk
that may never occur. Yet adequate coverage is
essential to assure long-term financial security,
and even a temporary lapse in insurance could
crumble a lifetime's worth of sacrifice and
savings. There are options available for outplaced
employees and as an HR administrator, you can show
them how and where to shop for
coverage.
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The Advantages of Health Savings
Accounts
Company-provided medical coverage
is shrinking and for some, has disappeared
entirely. At the very least, the cost of co-pays
and deductibles are increasing each year as
companies struggle to keep down their own benefit
costs while still providing for their employees.
But help may be at hand. Out of the Prescription
Drug Improvement and Modernization Act of 2003 was
born the Health Savings Account
(HSA).
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HSAs Offer an Attractive Employee
Benefits Program, Despite Rising Health Costs
Small business owners are being faced with
double digit health care premium increases year
after year. This increase in cost has forced many
small business owners to either push cost
increases on to their employees or drop insurance
coverage altogether. In fact, 37 percent of small
businesses do not offer health benefits, and
another four percent are "very likely" to end
coverage soon. One way ...
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Outsourcing that Pays: PERFORMANCE
STANDARDS TO HOLD BENEFITS ADMINISTRATORS
ACCOUNTABLE
HR professionals face the
challenge of handling scores of increasingly
complex benefits administration functions without
diluting their companies' competitive advantage.
Often, these tasks are time consuming and labor
intensive, and the penalties associated with
non-compliance can subject their companies to
sizable fines. On top of that, the growing
popularity of defined contribution (DC) plans
...
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Combating Employee Benefit Cost and
Control Issues: The Case for Coalition
Purchasing
Growing in popularity, employee
benefit coalitions can impact an employer's bottom
line and are becoming a market factor to be dealt
with in every industry and business setting. This
article examines how modern-day coalitions are
bringing classic aggregation theory into the 21st
century and the reasons behind the growing
popularity of employee benefit
coalitions.
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