The election is over and universal health care is on the way. It seems to be a universal moniker for changes to our current system, but a precise definition of the term UHC eludes us. To some, UHC means a single payer, government run system. To others it means mandates for people to purchase insurance, a "play or pay" system. Still others assume it means the marginal expansion of current government programs to cover the working poor and children. The terms 'connectors' and 'exchanges' are being used. As the legislative process becomes focused on the health care issue over the next year we will develop a better idea of exactly what UHC will be. Until then we can be better prepared for whatever changes are to come by revisiting two of the common principles of human resource management: strategy and communication.
Most indications are that the employer-based system of providing health care will be retained and strengthened. This means that responsibility for communications regarding changes to group plans will be the responsibility of the employer. This may be a tremendous responsibility. It is likely the changes will be on-going for several years and HR departments across the country will need to communicate the benefits, changes, costs and access instructions to all employees on a recurrent basis.
One of the tried and true methods of communicating major changes to employees are benefit statements. In addition to reviewing the specific benefits of each program, benefit statements also quantify the cost of each benefit paid by the employer. Employee morale and satisfaction with the benefit plan increase substantially when the employee understands the value of the entire compensation package. Nationally, benefit costs represent 42 percent of payroll, though 80 percent of covered employees do not understand all of these benefits. Accordingly, recruitment and retention efforts are more successful when employees have a working knowledge of their benefits program.
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Benefit statements have been in use for over 20 years in larger accounts. Today's environment of rapidly escalating medical inflation has given benefit statements another, perhaps more valuable, application: the communication of strategy. Benefit statements can put both the employer and the employee on the "same side of the table" when addressing the challenges that will face the health insurance industry over the next few years.
How? By devising and communicating a long-term strategy, employees get the clear message from their employer, "we care, we have a plan and you are a partner in that plan."
Packaging and content are of utmost importance when selecting what kind of benefit statement to provide. The benefit statement itself should be crisp, professional and comprehensive. Many HRIS systems generate a one page summary of benefit costs, but these benefit statements are only marginally effective because they stress only the employer's costs, not the employees' benefits. These types of statements are little more than a number on a page. In some cases, emphasizing employer costs over employee benefits can breed cynicism amongst employees, the exact opposite of the desired result. Benefit statements are tangible evidence of the intangible value of benefits. By being a quality product itself, the benefit statement connotes the quality and importance of the employee benefits program.
More comprehensive benefit statements, frequently as long as 10 pages each, provide significantly more information and value to the employee. For example, they may include extensive specifics on how to order publications from the Social Security Administration and Medicare showing their individualized projected benefits. Contact information for the claims and service departments of various carriers can be included, as well as exact URLs for specific forms.
Additionally, benefit statements can be an indirect way to communicate with an employee's spouse. As we all have experienced, many employees rely on their spouse to make decisions regarding employment options or benefit options. Inevitably, many of the distributed statements are taken home to that spouse who now has a better understanding of overall compensation. The prospective employee's decision-making spouse is greatly influenced by full benefit information.
The cost of these statements has come down as technology has made the software easier to operate and less expensive ($500 to $2,500). Frequently, the finished statements are printed and provided to the business by the benefits broker or consultant free of charge as a value-added service to the client. By providing the software for all their accounts, consultants can spread the costs over many employees. Be sure to ask your benefits advisor about employee benefit statements.
Benefit statements today continue to provide their traditional values of enhanced recruitment, retention and participation. In addition, they are now being used to alert employees to the problems and challenges employers will face in the future if health premium increases continue to soar. Benefit cuts and/or cost increases seem inevitable and employees need to be prepared early for these changes. As Yogi Berra said, "I don't mind surprises, as long as I know about them beforehand." Employees feel the same way.
J.J. Summerell manages Worksite Insight LLC and Easy Benefit Statements LLC, both involved in employee benefit communications. He has an AB from Davidson College and an MBA from Wake Forest University. He can be reached at [email protected].
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