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

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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