Employer/Employee Benefits Partnerships

Unless we do something to start to solve the underlying causes of inflation in the cost of healthcare (as a percent of Gross National Product "GNP") we may very well have our industry taken over by the Fed or the States. We have already seen the government take over two of our three auto manufacturers and many of our largest interstate banks, not to mention AIG. We are also seeing encroachment into real estate, energy and other major segments of the economy.

Of these potential "takeovers" the most onerous and far-reaching would be the take over of the healthcare industry which represents approximately 17% of the GNP. Why is that? Indoctrination of people to the notion that universal healthcare is a "right" (the single payer system), once implemented would be nearly impossible to reverse. On the other hand as long as there are viable local banks and innovative auto manufacturers still in the market (Honda, Toyota, Nissan, etc.) to compete, recovery in those industries is possible. Look at France, England and Canada.



Well, that's pretty heavy stuff! But if we get our act together and start dealing with the root causes of the problem with a consultative approach to health and welfare benefits we can win! And, become much stronger and more profitable for the effort.



In my last article I dealt with the essential elements of the initial step in the consultative sales process, the Benefit Strategies Proposal. Engaging the consumer in healthcare by creating a working employer/employee partnership is essential to start solving some of the root causes of medical cost inflation.

By engaging the consumer we can begin to deal with:

1. over-utilization

2. defensive medicine

3. the impact of an aging population (CDHPs & HSAs)

4. the uninsured and the under-insured

5. lifestyle abuses

A well crafted Employee Benefits Survey, PROPERLY CONDUCTED, is the cornerstone of developing a working partnership. So the question is how do we draft and conduct a relevant survey? That's what I will address in the balance of this article. 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.

After bloodying my nose more than once I was able to establish a procedure that achieves 60% to 70% completion and return of the surveys on larger groups (50+) and 90% to 100% in groups under 50. How the survey is conducted is almost as important as the questions on the survey to get the desired result -- changing the employee 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 you sell them 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. This puts you right back into the product sale to the employer. This is definitely not the objective.

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 employer product objections. The survey must be broad based and give sufficient information to deal with a variety of factors in addition to product sales. A well designed survey is also an important tool in the development of a multi-year strategic plan. Among other things, it enables 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:

1. The surveys need to be "blind" – no employee names and an envelope to assure confidentiality.

2. No employee (HR or management) must ever see any of the completed surveys. They must be returned to the broker for assessment and evaluation.

3. Printed "hard copy" surveys are preferable to on-line. In smaller groups (under 1,000 employees), on-line surveys may be necessary in some instances but they lack the sense of importance of a paper survey delivered and collected by a manager. Another problem with on-line surveys is that they usually result in unacceptably low response rate. In small groups the validity of the result is greatly diminished when the response rate falls below 50%, as commonly occurs with internet surveys.

4. Always include a cover memo expressing the importance of the survey to "their" benefits plan.

5. Include a number 10 envelope marked "CONFIDENTIAL" for returning the survey.

6. Whenever possible, engage the staff managers. This is critical in groups of 50+ employees that have 2 or more staff managers. A managers group meeting with a PowerPoint or other presentation can achieve their "buy-in" to the value of a benefits partnership. It can also be a great tool to identify and mitigate potential enrollment problems from a skeptical staff manager.

7. In smaller groups, surveys can be conducted in employee group meetings. A short presentation and completion of the surveys can be accomplished in less than 30 minutes.

8. Establish a formal timeline for each step of the process, including setting the appointment for presentation of the Strategic Plan Proposal.

Big no-no's:

1. letting Human Resources evaluate the surveys

2. Allowing too much time for surveys to be completed (not more than 2 to 3 day in most circumstances)

3. Conducting the surveys without a clear communication of their importance and value.

Content of the Employee Benefits Survey

There are four general categories of questions: 1) demographic information, 2) current benefit status, 3) employee attitudes and 4) voluntary benefit preferences.

We'll address each one to get a better idea of what to include shortly. 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 and employees' spousal benefits if the employer pays 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" for medical or dental benefits. That won't happen if the employee cost is more than a few dollars.

Another consideration to be kept 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 responsibility 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.

Current Benefits Status

Benefits information should include questions regarding the employees' current benefit elections including dependent status. Questions might also gather information about their satisfaction with the quality of their PPO or HMO network and the level of benefits.

When appropriate, information about the spousal group coverage could be included. This can help identify the number of employees who are double covered and an estimation of the possible savings.

Benefits Attitudes

This section can have a broad variety of questions based on 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. They may also include attitudes about quality and value of current benefits compared to competitive employers.

This is the section that should include a question or questions about employee receptivity to Consumer Driven Health Plans (CDHPs).

Other areas of plan design and assessment could include questions that can help 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.

Care needs to be exercised in this area to not ask questions that don't add to the broker's ability to assess needs and provide useful benefit information. Keep the survey concise (2-4 pages).

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 the 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, 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 employee's willingness to pay for these new benefits (remember, we don't want to communicate any employer obligation for these benefits.

Non-insurance benefits should be in a separate section and deal with Flexible Spending Accounts (FSAs) for medical expenses and dependent care and parking & transportation expenses.


When completed, you will have a powerful tool for development of a strong multi-year strategic plan. Strong recommendations about benefits structure and design can be presented and defended. Results of the survey 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 HR time and manpower requirements. At the same time it can be made flexible enough to meet diverse employee needs.

Presentation is greatly simplified. As an example, the presentation of a Consumer Driven Health Plan can be a short as this. "__% of the respondents indicated that they would consider participation in this type of plan. Their participation will result in $______ savings to the company and implementation of a more cost stable product. Can you think of any reason that you shouldn't offer this as an option?" A similar comment about other product recommendations can be equally as brief and extremely effective. In fact, much of the time, the entire sale can be made without even showing a spreadsheet or product proposal though they are always included in the proposal as support material. The bottom line is that the partnering strategy places the responsibility for product knowledge squarely on the shoulders of the employees who are individually impacted by their decisions. This is where it should always have been anyway.

Next issue I will deal with the structure of the structure and presentation of the Strategic Benefits Plan Proposal.

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