GROUP BENEFITS - Mediaplanet

AN INDEPENDENT REPORT FROM MEDIAPLANET TO THE NATIONAL POST

GROUP BENEFITS

WestJet o� ers its employees benefi ts that go the extra mile

RISING ABOVE AND BEYOND

Ahead of the curveChanging needs mean evolving benefi t plans

Work/life balanceA happy employee is a productive employee

Employee wellnessMake it part of your culture

Brokers and TPAsWhat role do they play?

Pension challengesPlanning can help avoid a crisis

3STEPS TO

STAYING HEALTHY AND HAPPY AT WORK

PHOTO: WESTJET CREATIVE SERVICES

No.1/November 2010

CHRISTOPHER BROWNAssociation of Canadian Pension ManagementPHOTO: ACPM

AN INDEPENDENT REPORT BY MEDIAPLANET TO THE NATIONAL POST2 · NOVEMBER 2010

CHALLENGES

Tough times for pension and benefi t companies

In the aftermath of hard economic times, employees are under more pressure than ever. And it is up to employers to ensure they stay happy and healthy.

After the most tur-bulent two years in investment his-tory, an evolution in Canadian bene-fit planning is driv-ing change—to the

industry and the face of future plans. The Canadian Pension and Benefi ts Institute (CPBI) has identifi ed a num-ber of social and economic factors in-fl uencing “the new normal”.

Surprising trendsThe Pyramis Global Advisors 2009 Global Pension Pulse indicates that the top concern of 80 percent of lead-ing Canadian defi ned-benefi t plan sponsors was their current funding status. Other top concerns focus on risk management, the impact of new accounting changes and rate uncer-tainty.

The shift toward flexible benefit and defined contribution plans Rising costs have infl uenced plan sponsors to view fl exible benefi ts de-sign as part of the solution. The uptake on fl ex plans has been slower than ex-pected, but they are gradually gain-ing ground. On the retirement side, there’s been a shift away from defi ned benefi t plans towards defi ned contri-

bution (DC) plans.

Focus on enhanced communication Flexible benefi ts design depends on enhanced member communication, creating a need for new expertise. While member communication has always been a key component of bene-fi ts programs, the e� ectiveness of to-day’s plans often rests on technology. As society becomes more reliant on online information access and instant communication, plan sponsors must adapt, respond and keep pace with emerging technology.

Aging population and longer life expectancyAs the Boomer generation begins to retire, concerns about outliving re-tirement savings due to longer life ex-pectancy is a common theme in pen-sion management. As the gap between pension age and life expectancy wid-ens, pressure on pension systems is intensifying.

A changing demographic landscapeOur aging population also puts more pressure on plan sponsors to retain and acquire new talent. It is increasingly apparent that comprehensive, fl exible benefi t plans have a positive impact on

workplace wellness, productivity and attracting and retaining employees.

Educating, communicating and fostering solutionsIn this environment of uncertainty and volatility, plan sponsors and providers need the tools and know-ledge to generate viable solutions—for today and tomorrow.

For 50 years, the Canadian Pen-sion and Benefi ts Institute (CPBI) has created targeted education pro-grams and networking opportun-ities that bring pension and benefi t industry leaders together. As a not-for-profi t organization for continu-ing education and information shar-ing, CPBI is advancing plan sponsor-ship across Canada in signifi cant and meaningful ways.

National education programs span the introductory and funda-mental to advanced. Recent ses-sions have addressed such topics as The Impact of Drug Reforms on Private Plan Sponsors, The Nation-al Pharma Initiative, Workplace and Productivity Trends and Cap-ital Accumulation Plans (CAPs). Ongoing sessions on Compliance, Legislation, Governance and their impact on benefit plans—and more—are also offered.

Visit CPBI at www.cpbi-icra.ca.

Peter G. CasquinhaChief Executive Offi cerCanadian Pension & Benefi ts Institute

CPBI’s annual, world class con-ference—FORUM—brings an in-ternational perspective to mem-bers and non-members by connecting industry players, pro-moting the sharing of best prac-tices from around the globe and preparing them for “The Next Wave”, the theme of its next FORUM, May 18th, 2011 in Vancouver.

DON’T MISS

“Leadership is very important in declaring war on stress.”

The evolution of group benefitsHow companies can stay ahead of the curve.

WE RECOMMEND

PAGE 5

A culture of wellness p. 5Customize a program for your company’s needs.

Work/life balance p. 8Employers can help employees stay on top of it all.

GROUP BENEFITS1ST EDITION, NOVEMBER 2010

Managing Director: Gustav [email protected] Manager: Jackie [email protected] Developer: David [email protected]

Responsible for this issue:Publisher: Robert [email protected]: Penelope [email protected]: Christopher Brown, Peter Casquinha, Keith Foot, Damien Lynch, Mike McClenahan, Diana McLaren, John Moore, Neil Mrkvicka, Indrani Nadarajah, Gordon Polk, Kim Siddell, Julie Stich

Distributed within:National Post, November 2010This section was created by Mediaplanet and did not involve the National Post or its Editorial Departments.

Mediaplanet’s business is to create new customers for our advertisers by providing readers with high-quality editorial contentthat motivates them to act.

In Canada, the delivery, admi-nistration and claims adjudi-cation services of group insu-rance plans have historically been dominated by the large insurers.

However, a not-so-new player is begin-ning to carve out a larger piece of the benefi ts marketplace: Third Party Ad-ministrators (TPAs).

By most estimates, TPAs now control 10 to 15 percent of the $28-billion annu-al group insurance business in Canada. So, what is a TPA and why are they gain-ing traction?

Harvey Mason, President of DA Townley & Associates, explains that, “over 40 years ago, TPAs developed to meet the unique administration needs of employers and unions that were too complex for the insurers. These often came in the form of multi-employ-er trusts where specialized employee eligibility requirements existed (e.g., hour bank systems, transient con-struction workers etc.).”

“TPAs provide fl exibility in allowing

group benefi t plan designs to mix and match solutions from a variety of in-surance carriers bundled under one o� ering” states Carole Yari, President of RWAM Insurance Administrators. “The essential value proposition of TPAs is the ability to provide employers with fl exibility and choice in order to achieve the best combination of prod-uct, service and price. Furthermore, TPAs hold an advantage over larger in-surers with respect to personal service, and we can identify challenges with insurers and act on the client’s behalf as their benefi ts advocate,” says Keith Foot, President of Automated Adminis-tration Services.

As well, where an employer as-sumes its own risk in providing the group benefit plan, TPAs can offer ASO plans as alternatives. Wheth-er fully insured, self-insured, or a combination of both, this complex bundling is administered and billed by the TPA. Additionally, some TPAs adjudicate and pay claims as on behalf of those insurance carriers.

A common voiceIn 2003, a number of like-minded Can-adian TPAs formed the Third Party Administrator’s Association of Can-ada (TPAAC). John Moore, President of TPAAC, states that the “mission of

TPAAC is to represent the interests of its members as a common voice to the insurance industry and gov-ernment regulatory bodies. TPAAC has also established guidelines and uniform standards that are adhered to by its members in order to pre-serve the integrity of the industry and protect employers and their employees.” The application pro-cess to become a member of TPAAC (www.tpaac.com) is reviewed in-dependently by KPMG.

TPAs are well positioned to lead and innovate in the group insur-ance industry while partnering with insurers to provide custom-ized and flexible solutions for Can-adian employers.

With the myriad of services avail-able, employers and their advisors could benefit by exploring the vi-ability of utilizing a TPA for admin-istering their group benefit plan.

Third party administrators

Courtesy of TPAAC

Pension headlines are every-where lately and Canadians could be forgiven for thinking that a crisis exists.

Yes, there are signifi cant challenges and they do require thoughtful solu-tions. But the good news is there are solutions. Governments are listen-ing and the timing is right to bring together a range of options that will work for all Canadians and achieve our collective goal—more retirement income savings opportunities for more Canadians.

Covering the massesThe fi rst challenge we face is one of coverage. Government programs—CPP, OAS and GIS—pillars one and two of Canada’s so-called three pillar sys-tem—are doing their job of providing a sound foundation of a basic level of retirement income for all Canadians. The question is how do we increase the number of Canadians who have an

“The mission of TPAAC is to represent the interests of its members as a common voice to the insurance regulatory bodies.”

John MoorePresident, TPAAC

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CHALLENGES PROFESSIONAL INSIGHT

Pension headlines are every-where lately and Canadians could be forgiven for thinking that a crisis exists.

Yes, there are signifi cant challenges and they do require thoughtful solu-tions. But the good news is there are solutions. Governments are listen-ing and the timing is right to bring together a range of options that will work for all Canadians and achieve our collective goal—more retirement income savings opportunities for more Canadians.

Covering the massesThe fi rst challenge we face is one of coverage. Government programs—CPP, OAS and GIS—pillars one and two of Canada’s so-called three pillar sys-tem—are doing their job of providing a sound foundation of a basic level of retirement income for all Canadians. The question is how do we increase the number of Canadians who have an

adequate retirement income?As the voice of plan sponsors and

others that provide retirement in-come plans for Canadians, the Asso-ciation of Canadian Pension Manage-ment (ACPM) believes that the third pillar—workplace plans and personal savings—can provide a much greater range of options for an adequate retire-ment income with the right policy and regulatory environment. This fl exibil-ity could also provide a more precise response to the savings needs of those Canadians who are not saving enough for retirement.

The Five Point PlanACPM recently released The ACPM Five Point Plan, recommendations towards improving retirement income cover-age for Canadians. ACPM believes that enacting the fi ve points in the plan will encourage new business models and new approaches to increase the oppor-tunities for Canadians from all walks of life to participate in retirement savings

plans.The ACPM Five Point Plan calls on

governments to: remove barriers to group coverage so that more Can-adians have access to plans o� ered at more workplaces; ensure defi ned benefit plans continue as viable options for coverage by strength-ening the existing environment to encourage the ongoing mainten-ance and creation of DB plans; en-able more innovation so that new plan design options will appeal to employers through administrative ease and through greater employ-ee recruitment and retention; pro-mote simplicity in administration by creating greater harmonization in DB rules across provinces and en-acting national DC pension-specifi c legislation; and increase incentives to save so that those without work-place plans would be encouraged to save more.

Finding a solution

When it comes to government solu-tions, a one-size-fi ts-all solution of ex-panding the CPP is under consideration. ACPM thinks that the more important reforms are those that will provide fl ex-ibility and innovative plan options, thus leading to greater take-up at more ap-propriate cost to individuals than one option would allow. The existing CPP does not have the necessary infra-structure to manage individual DC accounts for all Canadians or to pro-vide investment advisory services. And one large mega plan would not result in diversification of retire-ment savings. Which points us to third pillar solutions where deliv-ery vehicles, scope and economies of scale already exist.

The bottom line is that govern-ments are discussing pension issues and Canadians are most def-initely interested. We need a pan-Canadian approach to provide the best savings options that will make a meaningful difference.

It’s not just about pensions – it’s about retirement income

Christopher BrownAssociation of Canadian Pension Management

Work/life balance: A win-win for allThe recession has taken its toll on businesses and employ-ees alike. As conditions impro-ve, companies that found it ne-cessary to trim costs may find themselves looking to hire the quality workers they need to grow or keep their businesses running smoothly.

Employees who weathered the storm, but were left overwhelmed, may be looking for new job opportunities or the chance to become reengaged with their current employer. Both em-ployers and employees may fi nd that work/life benefi ts are the answer.

Taking on too muchSurveys have shown that as compan-ies cut costs and sta� during hard

times, workers left behind fi nd them-selves taking on extra responsibil-ities—which lead to more hours at work, less time at home and resulting stress. Blackberries and iPhones have brought convenience to our lives, but also mean that we’re never discon-nected. Work time bleeds into person-al time, sending what already may be a fragile work/life balance into a tail-spin. Employers that help their em-ployees regain this balance may re-gain a more focused and productive workforce. An added bonus: happier

employees who are willing to stay, and a positive reputation for family-friend-ly policies that attracts the best and brightest job seekers. Work/life benefi ts can lead to a better bottom line.

Avoid overloadIn 2008, according to Statistics Can-ada, families with two working par-ents saw an average combined work-week of nearly 77 hours. More than half of the couples worked a com-bined 65 to 80 hours, while nearly one-quarter worked over 80 hours. Long work weeks, fast-paced life and work styles, multiple roles need-ing to be juggled, and an overloaded family schedule can turn a once pro-ductive and valuable employee into one who is exhausted and ine� ect-ive. Employers can ease the problem

by providing work/life benefi ts. Even small companies with tight budgets can help. Companies will fi nd their

e� orts and expense worthwhile as they lead to an engaged, productive and loyal workforce.

FACTS

Top perks to offer ■ Stay flexible

According to the International Foundation of Employee Benefi ts survey, 70 percent of Canadian companies polled found their top perk was fl exible work hours. Em-ployees appreciated the time for caregiving and household respon-sibilities.

■ Telecommuting More than half of survey respon-dants allow their employees to work from home at least part

of the time. ■ Job sharing opportunities

Splitting one job between two part time workers can alleviate pres-sure.

■ Family first More than 60 percent of organi-zations said they provide work-ers time off to care for newborn, adopted or sick family members. A similar percentage provided paid parental or family leave, as well as compassionate care leave.

Julie StichSenior Information/Research Specia-list, International Foundation of Employee Benefi t Plans


NEWS

■ Question: Why are executive health programs important?

■ Answer: They can be a life-saving option for busy executives

It was about three years ago when John Shoniker realized something was very wrong.

The avid sportsman began experien-cing distressing symptoms just after a family skiing trip. Concerned, he trot-ted down to his family GP who ordered the “usual urine and blood tests” which showed nothing out of the or-dinary.

The symptoms subsided but Shon-iker couldn’t shake o� his feeling of dread. A few weeks later, the symp-toms reappeared. He described them to his unsympathetic GP who fi nally suggested that it was “all in his mind”.

Seeking another opinionShoniker does not like to dwell on that meeting now, but says, “Fortunately, I had another option, an executive health assessment.” He spoke to a pro-fessional contact at Cleveland Clinic Canada and things fell into place very quickly after that. After an hour-long appointment with a physician, an ultrasound was ordered on-site, then a CT-scan at another facility. Shon-iker’s worries were not misplaced -- the tests showed that he had early stage cancer. The growth was removed laparascopically less than a week after

he made initial contact.Cancer is not a stranger to his family

– his own father succumbed to bladder cancer at the age of 68, the victim of a misdiagnosis, Shoniker explains. “My father grew up in an environment and a time when people did not question their doctors, but it doesn’t have to be that way now. There is room for per-sonal advocacy,” he emphasizes.

“It’s scary when you think that if it was not for the prompt medical atten-tion, I might very well not be alive to-day. Early diagnosis and treatment is crucial.”

Shoniker is Vice President at Group-works Financial Corp, a consultancy geared at consolidating Canadian benefi ts and pension plans advisory fi rms. “It is almost ironic in a way, but my job involves advising compan-ies on the merits of executive health benefi ts plans.”

What executive health plans offerGenerally, executive health benefi t

plans are renewable annually and tar-get senior company executives. They start o� by o� ering a comprehensive on-site evaluation for the client. The evaluation includes time with a phys-ician, registered dietician, exercise physiologist and psychologist. The evaluation also includes complete blood work and any medically neces-sary testing.

A follow up appointment will be scheduled to discuss any issues that might have arisen during the physical and to recommend a course of action to address risk factors.

The importance of being accountable“From personal experience, I can say that the key value of these pro-grams is the preventative aspect. Studies have shown that family doctors have very little time for in-dividual patients, and these plans can be very useful and effective.

“You need to take the time to understand what is happening in your body and to be personally re-sponsible. Executive health bene-fit plans stress wellness too and are great at motivating individuals to help them stay accountable,” Shoniker says.

EXECUTIVE HEALTH PLANS: NOT JUST ANOTHER PERK

INDRANI NADARAJAH

[email protected]

John ShonikerVice President, Groupworks Financial Corp.

DON’T MISS!

For employers who rely upon brokers and third party admi-nistrators (TPAs) for claims processing, service offerings have improved.

Brokers and TPAs can offer any combination of ASO and insured services with add-ons such as cat-astrophic insurance. With new technology developments, claims processors are able to rely up-on Pharmacy Benefit Managers (PBMs) for cost saving processes.

That said, the broker/TPA net-work may find that PBMs are not set up well to service their needs. The largest adjudicators (e.g. Telus Health Solutions, and ESI Canada) support the large carri-ers directly and therefore don’t put as much resources behind the needs of brokers and TPAs. Esorse Corporation is the only PBM that supports brokers and TPAs exclu-sively.

By relying upon an adjudica-tor such as Esorse, brokers and TPAs can provide their own cli-ents with cost-effective services such as plan design consulting, drug formulary criteria, analyses of drug utilization/expenditures, and the implementation of elec-tronic cost control features. With support from the PBM, employers can get good quality benefits con-sulting advice from TPAs at much

lower costs.While some brokers and TPAs

cannot provide sophisticated con-sulting services, their contractual agreements with PBMs opens the door to leading edge technology solutions and advice that can be made available to plan sponsors, either directly or through the broker/TPA organization.

Some newer developments go beyond real-time electronic ad-judication of drug claims. With its roots in stand-alone Health Spending Accounts (HSAs), the use of debit cards for extended health benefits claims has morphed into credit card appli-cations for plan member cover-age, including real-time Coordin-ation of Benefits between plan members (and spousal/partner plans), as well as between core benefits coverage and HSA add-on accounts. Once again, some TPAs can provide these types of flexible cost-effective solutions to plan sponsors that even in-surers cannot offer directly to employers.

Drug plan services expanding for brokers and TPAs

GORDON POLK

President

Drug Benefi t Consulting

[email protected]

2STEP

BE AWARE OF HOW STRESS AFFECTS YOU


NEWS

In the past group benefit plans operated much like traditio-nal insurance policies, unseen and unused until needed in ti-mes of sickness or disability.

As the global economy pressures Canadian organizations to be more innovative and competitive, bene-fit programs must evolve to en-courage health promotion as part of a preventative model leading to healthy employees and a healthy bottom line for employers.

“The future challenge for busi-ness leaders will be to transform the concept of group benefits as a protection policy providing ser-vice only after an employee gets sick, to a strategy that protects and promotes employee health and performance at work,” says Joseph Ricciuti, a Partner in Morneau Sob-eco Income Fund, one of the lar-gest Canadian-based HR services company.

The health-wealth benefitRicciuti explains that when bene-fit plans promote employee health, there’s less absenteeism and high-er productivity benefiting both sides in what he calls a “shared re-sponsibility”.

It’s a shift, he says, “from the reactive supply-side strategies of containing costs to something broader, where the emphasis is a balanced approach, with strat-egies to control the demand-side of the cost equation.”

In other words, prevent employ-

ees from getting sick in the first place—cutting down on claims but also improving employees’ per-formance. This is true not only for absenteeism rates, but for what Ricciuti calls “presenteeism”.

These are employees he calls the “working wounded,” who are physically present at work but dis-engaged, distracted and dissatis-fied.

The stress factorAddressing employee stress must form a critical part of an organiza-tion’s prevention strategies.

Studies show that mental health issues account for one third to half of disability claims. In addi-tion, depression among workers

has been pegged as costing the Canadian economy $33 billion an-nually in lost productivity and opportunity.

As well as job-related stress, Can-adian workers are facing increas-ing fi nancial uncertainty and rising debt levels, as well as mounting anx-iety related to 24/7 technology that disrupts work-life balance.

The role of leadership

“Leadership is very important in declaring a war on stress and in making sure wellness programs are directly linked to improv-ing business outcomes,” says Ric-ciuti. “Senior management must be committed and accountable for the program’s success.”

Creating the next evolution of group benefi ts

DIANA MCLAREN

[email protected]

SHOWCASE

Employer benefit tips ■ Remind employees to up-

date their beneficiary: It’s not li-kely a priority for an employee who has become married, common-law or divorced, but an out-of-date appoint-ment can lead to fi nancial distress for a benefi ciary.

■ Educate employees on travel coverage: In the event of a medical emergency the insurer may be able to help the insured locate a hospital, provide translation services, provide a referral to legal counsel and identi-fy all benefi ts covered by the Travel plan.

■ Inform employees of their right to convert coverage: Remind employees who are leaving their job that they have the oppor-tunity to convert their group life in-surance to an individual product from the insurer without submitting medical evidence in a specifi ed number of days.

■ Plan amendments: In the event the group insurance plan has been amended, inform the employ-ees in a timely manner about any changes.

■ Avoid “water cooler” talk: Try to avoid providing advice or re-sponding to questions with employ-ees in an informal environment. En-courage employees to email or write to you any questions they have regar-ding the group insurance plan. Do not provide a response unless you are 110 percent confi dent in your answer.

■ Avoid exceptions: Plan Admi-nistrators can be put in a position to make exceptions under the group insurance plan for employees. For example, this could include enrol-ling an employee into the plan that does not meet the eligibility require-ments. Remember, if you make one exception, when do you stop?

NEWS IN BRIEF

FACTS

Tips for a health-wealth strategyGetting started:

■ Establish a joint management-worker/union committee

■ Assess current workplace poli-cies and practices; identify gaps

■ Analyze aggregate healthcare and disability data; compare to in-dustry standards

■ Determine the cost of doing nothing and measure opportunity for achieving benchmarks; develop scorecard and measure results

Tools:

■ Quantitative and qualitative questionnaires

■ Health Risk and Health Status Assessment Tools

■ Self-assessment tool for presenteeism

■ Predictive modeling and oppor-tunity cost calculators

Measuring progress:

■ Business outcomes for improve-ment include turnover, absences and productivity

■ Look to improve revenue, error rates, customer retention, etc.

■ On the personal front, progress can be measured by improved health status and reduced health risks of employees, higher employ-ee satisfaction and fewer absences

Workplace-related stress:

■ Excessive workload ■ Failure to give employees rea-

sonable discretion with work scheduling and methods

■ Imposing unreasonable demands

■ Imbalance between work and life challenges

Effective resources and programs:

■ Employee Assistance Programs (EAP’s)

■ Resilience and coping skills training

■ Lifestyle behaviour change pro-grams

■ Alternative work arrangements ■ Recognition, incentives,

self-help web and video tools.

Joseph RicciutiPartner, Morneau Sobeco

“Leadership is very important in declaring a war on stress...”


PANEL OF EXPERTS

Question 1:As the economy recovers from the downturn, the pressure on Canadian companies to contain and control their benefi ts spending continues. What are the latest trends in a benefi t plan design to maintain the protection necessary for their employees within the budget constraints?

Question 2:Communicating with plan members is a key part of the administration of any benefi t program. What are the elements of a successful communication strategy?

Question 3:What should employees look for in their benefi ts packages?

Don McKitterickPartnerMcKitterick Insurance Group

Carole YariPresidentRWAM Insurance Administrators Inc.

Jeanne D. Foot, CEBPresident, Ralph Moss Limited Employ-ee Benefi ts Consultants

Plan member education is vital to the sustainability of a plan. Educated members understand their plan and tend to question service providers about diagnostics and ther-apies prescribed. This leads to members that are more vested in their health. Ultimately, healthy employees have a positive e� ect on a company’s bottom line.Communication is best geared to the em-ployees’ level of understanding bearing in mind that employees respond different-ly to written, oral and electronic communi-cation. Wherever possible, front line man-agers should be used to deliver the message in a simple, direct, consistent, and engaging manner.

Group life and health plans are a large part of remuneration for an employee. Most important is that the benefi ts of a program should be communicated to all employees as part of the hiring process. Plan booklets should be available online and the employee should have the ability to direct questions to either the plan administrator or the benefi ts provider.

Firstly, you must ensure that employees understand their benefi t package and what is available to them. In this current landscape, benefi t packages can be complex and diverse. Good communication begins with the em-ployer. Ensuring that employees have access to their benefi ts booklet in a real time en-vironment, such as through a web portal, will facilitate access to that information. Stream-lined call centres for answering questions employees may have regarding their benefi t package is also a great value added tool.

Employees usually do not have much say in the design of their benefi ts package. How-ever, when looking at benefi ts they should look at their total compensation. Employees must take in to consideration sick days, vaca-tion allowances, pension contributions, fl ex hours and other fringe benefi ts when assess-ing their total compensation. An employee comparing his/her wage to an employee earning a higher wage at another employer may actually be receiving far more when looking at total compensation. Addi-tionally, access to voluntary benefi ts through payroll deduction are an excellent way for the employee to customize their individual plan.

Depending on what stage of life an em-ployee is at will determine the benefi ts that are most important to them. They should sit with a professional to determine what part of the program meets their needs and where there may be any short falls. The benefi t needs of a younger employee entering the workforce will more than likely di� er from the needs of the older individual. A group plan’s pur-pose is to meet the needs of a cross section of individuals.

Employees need a benefit package that meets their needs and the needs of their cov-ered dependants. They require a benefi t pack-age that will protect them from catastrophic life events and one that will provide fi nan-cial assistance for health related conditions. Benefi t packages play a key role in employ-ee attraction and retention as plan members often search out and compare company o� er-ings when choosing a place of employment.

Whilst there is no one golden bullet to help alleviate the pressure of rising costs, there are numerous strategies, that combined, can help control costs. The tried and true methods of cost-sharing, plan design, wellness initia-tives and member education still work. How-ever, I feel that paramount to cost control is ascertaining the areas of a plan where there is either abuse or high utilization. Isolating these areas and analyzing the underlying health of an organization allows the consul-tant to better align the benefi ts and dollars available more e� ectively.

A program should be designed to provide benefi ts viewed as needed by the employee. We use an employee benefi t audit program to measure the value employees perceive they are receiving; ensuring employers are pro-viding the right benefi ts. Auditing plan costs against the benefi ts received is a must. Today, most providers have the technology to aud-it claims for fraud and misuse, and have the ability to add cost containment features to a program. This ensures the employer is get-ting what they are paying for.

Balancing a benefit package that is truly responsive to employee needs vs. the cost of maintaining those benefi ts has historic-ally always been a challenge, but even more so in the recent economy. We have seen our employers trend towards placing max-imums and caps on various components of the plan design which ultimately controls claim spend. Additionally, a number of our plan sponsors are combining bare bones fully insured plans in conjunction with Health Spending accounts. This allows protection against catastrophic events such as death or long term illness paired with the fl exibility of directing the spend for services that are im-portant to each individual such as vision care or massage therapy.

Ferio Pugliese believes it is the “higher degree of discretionary effort” put in by all WestJet staff on behalf of customers that has led to the airline being acclaimed for its corporate culture.

Pugliese, WestJet’s Executive Vice-President, People and Culture, says WestJet staff are willing to go the extra mile for customers because the airline has worked hard to cre-ate a unified, vibrant, committed and evolving work culture.

Westjet employees are valued, and this has given staff a sense of ownership over the company. “Our people are very focused on making this a different airline. Through that, they and the company are re-warded with success,” he explains.

Group benefit scheme helps companyGroup and employee benefit plans


PANEL OF EXPERTS

WestJet goes the extra mile Ferio Pugliese believes it is the “higher degree of discretionary effort” put in by all WestJet staff on behalf of customers that has led to the airline being acclaimed for its corporate culture.

Pugliese, WestJet’s Executive Vice-President, People and Culture, says WestJet staff are willing to go the extra mile for customers because the airline has worked hard to cre-ate a unified, vibrant, committed and evolving work culture.

Westjet employees are valued, and this has given staff a sense of ownership over the company. “Our people are very focused on making this a different airline. Through that, they and the company are re-warded with success,” he explains.

Group benefit scheme helps companyGroup and employee benefit plans

have has been an effective avenue for WestJet to take care of its staff.

More than 85 percent of “West-Jetters” participate in a gener-ous share-purchase plan that al-lows them to use up to 20 percent of their base earnings to buy com-pany shares. On average, the near-ly 8,000 employees contribute 14 percent of their earnings, with the company matching their contribu-tions.

Twice a year, in May and Nov-ember, the company shares up to 20 percent of its profits with staff. Payments are based on the com-pany’s before-tax margins and em-ployee base salary levels. WestJet has shared almost $200 million with its employees over the last 14 years in this way.

Such profit sharing makes good

business sense, Pugliese says.“We believe that in taking extra

care of our people, they take extra care of our guests and they, in turn, take care of our business.”

Is the strategy working?Pugliese cites SouthWest and Jet-Blue as examples of other airlines he personally respects because they promote similar cultures to that of WestJet. He also names two giants in the business world as his heroes—Walmart founder Sam Walton and former chairman and CEO of General Electric Jack Welch. Both men created corporate giants.

This information explains the trajectory Westjet is on: by 2016, it will be one of the five most suc-cessful international carriers in the world.

Based on the tributes it has re-ceived, it might be one of the best employers to work for in Canada.

Last year, WestJet was inducted into Canada’s 10 Most Admired Corporate Cultures Hall of Fame by Waterstone Human Capital. The honour came after WestJet had claimed the top spot in Water-stone’s annual study of Canada’s 10 Most Admired Corporate Cultures for four straight years.

Winning awards like this greatly boosts WestJet’s corporate brand-ing, especially among young-er people and helps recruit new talent for WestJet. It does mean, however, having to sift through a mountain of mail. Last year alone, the company received 85,000 un-solicited resumes, Pugliese reveals.

WestJet has also been recognised for offering a “mom-friendly” work culture. It was named on the 2009 Progressive Employers of Canada list compiled by connectmoms in conjunction with momcafe and the Lisa Martin Group.

“We believe that in taking extra care of our people, they take extra care of our guests...”Ferio PuglieseExecutive Vice President, People and CultureWestJet

DAMIEN LYNCH

[email protected]

■ Question: Why does Westjet be-lieve treating their employees well will result in good business?

■ Answer: Motivated employees are happier and perform better.

In the past decade, the con-cept of employee wellness has been synonymous with improving workers’ health and increasing morale.

With rising health care costs, Can-adian health plan sponsors are in-creasingly recognizing another ad-vantage of wellness programs—it costs less to prevent illness than to treat it. With this thought in mind, employers across Canada are work-ing to build a culture of health among their employees and are considering a number of promising strategies to improve health care quality and re-duce costs.

Growing program popularityA recent survey by the Internation-al Foundation of Employee Benefi t Plans indicates the number of Can-adian employers o� ering wellness programs is increasing. In fact, the survey found that in the past year the number of employers o� ering well-ness initiatives rose from 61 percent in 2009 to 78 percent in 2010. Employ-ers are o� ering wellness initiatives such as health risk assessments, fl u shots, subsidized gym memberships, healthy food choices in cafeterias and vending machines, and smoking ces-sation programs.

The survey report also shows a sub-stantial rise in the number of em-ployers o� ering medical alternatives such as meditation, hypnosis, acu-puncture and nutritional-based ther-apies. Employers o� ering at least one of these alternatives jumped from 29 percent in 2009 to 52 percent in 2010.

Size-specificWhen developing a wellness pro-gram, employers are closely examin-ing the demographics of their work-force and o� ering programs that fi t employee needs. With smaller in-itiatives such as health and wellness email newsletters and lunch hour speakers, to programs that require larger investments like on-site fi t-ness centers and health clinics, there are options for any employer no mat-ter their size or wellness budget.

While employer-o� ered wellness programs are typically a win-win for employers and employees, some ob-stacles do exist for employers who want to introduce a program. Of em-ployers surveyed by the International Foundation, di� culty in implemen-tation, prohibitive costs and lack of employee interest were the top three reasons given for not o� ering an em-ployee wellness program. It appears that many employers plan to fi nd ways around these barriers—one in fi ve organizations currently not of-fering wellness initiatives anticipate doing so in the next few years.

The motivation for employers to o� er wellness programs in Canada is shifting away from the intangible ideas of improving employee morale and creating a culture of health to-ward the tangible e� ect on organiza-tions’ bottom line. Although very few Canadian organizations currently measure their wellness program’s re-turn on investment (ROI), those who do fi nd the results overwhelming-ly positive—suggesting the nation’s growing emphasis on wellness will continue for the foreseeable future.

DON’T MISS!DON’T MISS!

INSPIRATION

The importance of corporate culture

The bottom line on employee wellness

Employers look to their em-ployee benefits plans as a me-ans to many ends—attracting and retaining quality people, ensuring that their valued em-ployees and their families are looked after in case of a cata-strophic medical event, and as a valued piece of their total compensation strategy.

However, the structure and content of a benefi ts plan can also be designed

to refl ect an organization’s corporate culture.

Corporate culture can be defi ned as the personality of an organization. It infl uences how employees think and feel about the company and how they interact with each other and with their customers or clients.

The core of the matterCorporate culture is reflected through a variety of both formal and informal means. These can include a company’s mission and vision, core beliefs and values, rules of behaviour (written or unwritten), dress code, and physical work environment. Or-ganizational behaviour experts agree that though intangible, corporate culture plays a key role in employee

engagement and loyalty, e� ective or-ganizational performance and goal attainment.

Employers wishing to create or re-inforce an environment where em-ployees are empowered to make de-cisions may choose to implement a fl exible benefi ts plan, Health Spend-ing Account or Flexible Spending Ac-count, where the employee can ex-ercise choice in how they spend the company’s contribution toward benefi ts.

Pushing proactivityAn employer could instil a culture of wellness by highlighting benefi ts that specifi cally speak to proactive health management, like nutrition-al counselling, stress management

tools, smoking cessation and home blood pressure monitors, alongside any wellness education or program-ming they o� er.

If work/life balance is a key ele-ment in an organization’s culture, the benefi ts program could include sup-portive non-fi nancial benefi ts like personal days, emergency daycare re-lief, or concierge services.

As employers work to make their corporate cultures more positive by implementing performance manage-ment techniques with coaching and recognition, or more transparent em-ployee communications around com-pany performance or goals, aligning the benefi ts program to promote the behaviours it seeks to reward is an important step.

Kim Siddall

Principal

AQ Group Solutions

HOW WE MADE IT

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1. WestJet employees on the tarmac.

2. Employees participate in a share purchase plan to benefit from owning company shares.

PHOTO: WESTJET CREATIVE

SERVICES

YOUR EMPLOY-ER SHOULD CONSIDER

YOUR WELLNESS A

PRIORITY

DON’T MISS!YOUR EMPLOY-

3STEP

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Neil MrkvickaSenior Research AssociateInternational Foundation of Employee Benefi ts Plans

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