We are all aware the biggest problem that we deal with each year at renewal time is the increase in healthcare costs. It comes in two ways 1) directly in premium increases and 2) indirectly with benefit reductions. Many times the benefit reductions can be more onerous than the premium increases. If we don't pay attention, sometimes the plan changes can be more devastating to the client (employer and employee) than absorbing the premium increase.
Part of the foundation of consultative planning is to develop an employer-employee benefits partnership to get the consumer engaged in the structure and design of their benefits. This means educating the employees about how their benefits work and identification of the risks they are confronted with.
This process offers the opportunity to expand the product base to address all the employees' needs.
Engaging the consumer in healthcare is essential in starting to solve some of the root causes of medical cost inflation. By engaging the consumer, even in the "under-50" market, we can begin to deal with inflationary cost factors:
- lifestyle abuses
- defensive medicine
- the impact of an aging population (CDHPs & HSAs)
- the uninsured and the under-insured population
- medical malpractice
One of the best ways to solicit meaningful employee involvement is to conduct a carefully crafted employee survey to assess employee needs and attitudes about their benefits. In addition to surveys, with groups of 100+ employees it may also be valuable to hold a series of "focus group" meetings to obtain employee input. Both can be powerful tools with which to build the foundation of a good working partnership.
The broker's job here is to convince the employer that this education will never take place in a vacuum. To effectively educate the consumer, it takes a controlled environment. One of the many benefits of a well-crafted employee survey is that it will allow the broker to do a reasonably accurate financial analysis before recommending changes. The results will normally enable the broker to show the employer a $2 to $3 return on each dollar invested in educating the employee. When the employer understands that without the educational process the Return On Investment (ROI) will disappear, good educational working conditions become easy.
So, the question is how do we draft and conduct a relevant survey? In 1987, when I first started utilizing surveys as a marketing tool, the primary objectives were risk evaluation, product selection and plan design issues. However, I quickly discovered its value as a partnership development tool.
Getting the employees to complete the surveys is always an obstacle. But over time, we have been able to establish a procedure that achieves 60% to 70% completion and return of the surveys in 50+ life groups and 90% to 100% in groups under 50. We found that how the survey is conducted is almost as important as the questions on the survey. When done well, the survey can help change the employee's paradigm from being a benefits recipient to being a partner in benefits.
First, let's look at potential mistakes in conducting the survey:
One of the most common mistakes is to start talking with the employer about the employee survey before they are sold on the idea of developing a partnership with the employee. The employee survey is a "solution". A product designed to help solve a problem. The problem is to change the employer and employee paradigm about benefits. If the survey is sold without employer acceptance of the partnering strategy, it will be nothing more than a product identification and sales tool.
A second error is a "narrow" survey designed to identify product needs and sales opportunities only. This leads right back to the "spreadsheet" sale and all the attendant problems of dealing with product objections and resistance to employee education. The survey must be broad based and provide sufficient information to deal with a variety of factors. A well designed survey is also an important tool in the development of a multi-year strategic plan. Among other things, it should enable the broker to assess the financial impact of the strategies that are recommended.
Another common error is the method by which surveys are conducted. Simply giving them to HR to distribute and get back, e-mailing or mailing them devalues their importance and the validity of the results. Everyone involved in the process must have a full understanding of the importance and primary objective of conducting the survey. TO DEVELOP A WORKING EMPLOYER/EMPLOYEE PARTNERSHIP IN BENEFITS!
How the Survey Should Be Conducted
The best crafted survey, ineffectively conducted, will yield a result of little value to the employer, employee or broker. It is very important to have a formal procedure for distributing and returning the surveys.
The essential procedural rules are:
- The surveys need to be "blind" – no employee names and an envelope to assure confidentiality.
- Surveys are confidential – no one from Human Resources or Executive should see any individual survey.
- The surveys are returned to the broker for assessment and evaluation.
- Include a cover memo expressing the importance of the survey.
- Include an envelope for returning the survey. Return time should be no longer than 2 or 3 days.5. Whenever possible, engage the staff managers. This is critical in groups of 50+ employees that have 2 or more staff managers. Staff manager buy-in is essential to the development of the benefits partnership. It can also be a great tool to identify and mitigate potential enrollment problems from a skeptical staff manager.
- Complete surveys in group meetings when possible. This is particularly good for groups under 50 employees. A short presentation and completion of the surveys can be accomplished in less than 30 minutes.
- Establish a formal timeline for each step of the process, including setting the appointment for presentation of the Strategic Plan Proposal.
Content of the Employee Benefits Survey
There are four general categories of questions:
- demographic information,
- current benefit status,
- employee attitudes
- voluntary benefit preferences.Element
The questions should be divided into sections to add clarity and focus for the employee. In some cases you may even want to ask the same question more than once by slightly changing the wording to help verify the validity of the survey result.
Questions should be multiple-choice for ease of completion and evaluation of the result. They can be in a variety of formats such as "agree - disagree", "interested - not interested", "yes or no", etc.
Questions asked in each section will vary based on the makeup of the group, the current plan design and employer objectives. For example, there would be no need to ask a question about the benefits provided by a spouse's employer if your client/prospect is paying 75% or less of the employee rate for medical and dental coverage. The purpose of this type of question is to determine if employees are "double covered".
Another consideration to keep in mind is that the survey is crafted in such a way as to indicate whether the employer is willing or capable of taking on new obligations or financial responsibilities for the benefits. The purpose must be conveyed so as to develop a plan design that accomplishes employer objectives and meets the employees' diverse needs.
This section is quite short. Demographic questions ask about age (banding similar to age-rated medical plans), marital status, dependent status and income.
Benefits information should include questions covering the employees' current benefit elections and dependent status. Questions might delve into their satisfaction with the current PPO or HMO network and the level of benefits.
When appropriate, information about the spouse's employer coverage should be included. This can help identify the number of employees who are double covered and an estimation of the possible savings.
This section can have a broad variety of questions concerning the current plan design and employer objectives. Some of the fundamental questions should address the employees' attitudes about choice in benefits and their willingness to learn to make wise decisions if more choices were offered. Attitudes about quality and value of current benefits compared to competitive employers could also be addressed.
Employee receptivity to Consumer Driven Health Plans (CDHPs) should also be explored.
Other areas of plan design and assessment could include questions to determine the value of benefits as a recruitment and retention tool, employer contribution methodology, employee understanding of employer contribution levels, employee attitudes about taking a more active role in their benefits, etc.
Voluntary Benefit Preferences
Great care must be taken here not to promote one benefit over another. A brief description of the benefit is acceptable.
Questions in this category should be separated into two sub-categories:
1. Voluntary insurance benefits
2. Non-insurance benefits.
Insurance benefits would include information on things such as long and short-term disability, supplemental life insurance, supplemental medical plans, Long Term Care (LTC), etc. In this section it is important not only to determine interest in the specific benefits but to obtain information about participation levels and the employees' willingness to pay for these new benefits.
Non-insurance benefits such as Flexible Spending Accounts (FSAs) for medical expenses, dependent care, parking and transportation expenses should be in a separate section.
Keep the survey concise (2-4 pages). When completed, you will have a powerful tool for development of a strong multi-year strategic plan. Results also enable the broker to quantify the financial impact of their recommendations. The plan can then be crafted to achieve employer objectives such as controlling cost, saving taxes and premiums, mitigating compliance risks, recruiting and retaining quality employees and minimizing human resources time and manpower requirements. At the same time the plan design can be made flexible enough to meet diverse employee needs.
The bottom line is that the partnering strategy places the responsibility for product knowledge and selection squarely on the shoulders of the employees who are impacted.
There is extra work involved in the process but the increased income potential and competitive edge make it well worthwhile.