In this issue:
Chipped teeth
Long believed to be immune to economic swings, the current recession may be chipping away at dental offerings
Dental coverage remains a low-cost benefit for employers and a desirable one for employees. Yet given the economic climate, are they recession-proof?
"I don't think we can go as far as saying they are recession proof, but employer-sponsored dental benefits sometimes get lost in the shuffle as employers move to reduce medical expenditures," says Vincent
Graziano, a vice president at The Segal Co., an HR consulting firm.
Clearly, hard times will cause employers to adjust their medical benefits.
After they have changed carriers, reduced benefits or increased employee contributions (or the combination of all of these), employers "tend to be exhausted and almost sort of think, 'Let's not mess with dental. Let's leave it alone, since it's a smaller piece of the pie,'" Graziano explains.
Nevertheless, there are a few things employers consider on the dental side when the economy gets a little tougher.
"If they are insured, they may evaluate moving to a self-insured arrangement. This, however, does not affect the benefits. Additionally, companies may begin to explore different funding arrangements," Graziano says.
Further, employers "may ask their carriers about other products in the networks. It's more about overlaying discounts on top of the existing dental programs."
Segal conducted a survey on employer-sponsored dental coverage and found that 82% offer dental coverage and 54% provide access to dental networks.
Most of the respondents were multiemployer health funds.
'Employers thinking twice'
Although a tight economy may affect dental benefits eventually, the National Association of Dental Plans reports that from 2005 to 2008, the percentage of employers with dental benefits rating them as "essential" increased from 53% to 62%.
"This fact should help dental weather the general economic downturn," says Dr. Doyle Williams, chief dental officer at DentaQuest, a Massachusetts-based third-party dental benefit administrator.
Meanwhile, the Kaiser Family Foundation and Health Research & Educational Trust 2008 Employer Health Benefits Survey found that 44% of firms providing health benefits offer or contribute to a dental insurance benefit for their employees that is separate from any dental coverage the health plans might include.
Researchers explain, however, that the 2008 figure is not statistically different from the 50% figure in 2006, the last time the survey inquired about dental benefits.
The study also shows that large employers (with 200 or more workers) are far more likely than small employers (with 3-199 workers) to offer or contribute to a separate dental health benefit for workers, at 82% versus 43%.
"Nothing is recession-proof, and dental benefits are no exception. In particular, states with high union membership have seen a decline in dental coverage since 2001," explains Melissa Wagner, vice president of sales and marketing for DenteMax, a Southfield, Michigan-based dental PPO network.
She explains that self-administered union plans, where fewer hours worked equate to less money to fund benefits, tend to drop ancillary benefits.
In addition, some employers are changing to voluntary products, which shift costs to employees.
Yet as more research emerges that links good oral health as a combatant to certain chronic diseases, employers will have to think twice about touching dental benefit offerings.
For example, Wagner notes, a recent study shows that overall medical costs for members with diabetes who receive preventive dental care are 10% lower than for those diabetics who do not seek preventive dental care. "Such studies have some employers thinking twice.
Dropping coverage for a short-term decrease in premiums could mean a longer-term medical cost increase because employees who don't take care of their oral health tend to be less healthy," she says.
Like the medical market, dental has seen a decrease in group membership that reflects layoffs and buyouts, and subsequent loss of company-paid benefits, particularly in the auto industry.
Members appear, however, to understand the importance of dental care to their overall health and seek voluntary or individual coverage.
Wagner further explains that dentists are not immune to changes in the dental landscape.
"As employers cut costs by moving from indemnity to network-based plans, PPO participation among dentists increases," she asserts.
It's not necessarily a question of whether the benefits are recession-proof, considering that they operate in a different environment, says Erich Sternberg, president of AlwaysCare Benefits, a Louisiana-based voluntary dental benefit provider.
In good times, employers would have funded the benefits without blinking an eye because the cost was so little.
Now, companies may fund it less or offer it on a voluntary basis - just changing the way it's offered, Sternberg observes.
During a weak economy, employers will continue to provide access to dental benefits.
The demand from employees is still out there, as proof of growing sales in the voluntary dental market can attest to.
"Insurers are just going to have to be smart about the way they structure the plan and price them, so that they remain appealing to the consumer," Sternberg asserts.
Key findings from recent dental benefits research
Delta Dental Plans Association issued survey results in January showing that workers with employer-sponsored dental benefits are more likely to see their dentists for checkups than other workers.
For example, 83% of participants with dental benefits visit the dentist twice or more a year, compared to 63% of consumers who pay out of pocket for their dental benefits or dental care.
The not-for-profit group, which polled 900 consumers ages 25 and older, found that nearly 60% of respondents have dental benefits, with 12% paying for voluntary benefits at the worksite and 88% belonging to traditional, employer-paid group dental plains.
Moreover, employed adults lose more than 64 million hours of work each year due to dental disease or dental visits.
Among other findings:
- Consumers consider dental benefits to be a "very important" part of the essential benefits package, along with medical coverage, retirement benefits and prescription drug coverage.
- Consumers want their dental benefits to be easy to use, allow them to use their personal dentist, and include several coverage options of which the most important is preventive care such as cleanings and X-rays.
The National Association of Dental Plans in 2008 surveyed some 2,000 employers and found that those with dental benefits (72%) place significantly greater value on dental benefits as essential than in 2005.
Other key highlights:
- Nearly a quarter of employers are likely to change carriers in the next year will do so primarily based on "the importance of dental health to overall health."This is clear evidence that the message of the connection between the mouth and the body is increasingly appreciated.
- Companies without dental benefits in place are less likely than three years ago to add dental benefits in the coming year (one in seven rather than one in four).Employee requests are a key element in these employers decision to add benefits.
Cost and Coverage:
Between 2005 and 2008 only the largest employers (10,000 or more) showed a significant change in fully employer paid dental benefits - declining from 31% in 2005 to 17% in 2008.
Employers, however, are considering cost shifting in the coming year at rates similar to 2005. For example:
- 15% are likely to transition to voluntary dental benefits (employee paid)
- 28% are likely to increase the premium paid by employees.
Dental PPOs continued to gain ground as the primary product in the marketplace-offered by 60% of the reporting employers-with both DHMOs and indemnity plans losing market share."
Source: Employee Benefit News, February 5, 2009
Reshaping retiree health benefits in a more sustainable mold
Is there a way to make retiree health benefits sustainable in the long run, especially in light of the weakened economy and the steady decline in the number of firms offering the benefits? Two relatively new programs shed light on how this might be done.
Instead of dropping their coverage, some employers are trying Emeriti Retirement Health Solutions and Retiree Health Access, which aim to keep costs down and release the employers from having to report the benefits as financial liabilities.
The first approach focuses on a trust called a Voluntary Employees' Beneficiary Association, and the second approach leverages the combined size of many employers' retiree populations.
Emeriti
Emeriti Retirement Health Solutions is a nonprofit organization that helps colleges and universities fund their retiree health benefits by establishing VEBAs.
"We have a very distinct way of using the VEBA," notes Ken Cool, president of Emeriti Retirement Health Solutions. "You set the dollars aside in individual, segregated accounts. These dollars are now separated from the institution, so you can reduce and eliminate your accounting liabilities." This arrangement takes the insurance liabilities off the employer's financial accounting reports.
Nonprofit entities, including colleges and universities, can make VEBA contributions tax-free, and the investment growth is tax-free, too. "It's more tax-advantaged for nonprofit organizations," Cool confirms.
The annual employer contributions range from $300 per participant to $2,000 per participant. "It's a very predictable way to set aside dollars and for the employer to make a strategic commitment [to retiree health benefits]. You have a predictable basis on which to form a budget," Cool explains.
Meanwhile, employee contributions to the VEBA are taxed, but distributions for health care expenses in retirement are tax-free. The individual owns the vested money in the VEBA, and it is portable.
Fifty-one colleges and universities have joined the Emeriti program, which sets up two VEBAs for each client (one for the employer and another for the employees and retirees.)
Members pay $25,000 to join Emeriti, and then they pay a service fee of $4 per account per month.
"We will see in the future that it is a positive benefit and a positive recruitment tool," says Nancy Allen, a benefits manager at Connecticut College, which is a member of Emeriti. "I really think it's the way to do it. It's the wave of the future."
"What this plan allows for is continuation of coverage for spouses" after the employee retires, which wasn't available before the college joined Emeriti, she adds.
As more schools join, the cost is likely to decrease. "The premiums have gone down over the last few years because of the leverage with more enrolled groups," Allen points out.
Retiree Health Access
Retiree Health Access, offered by the HR Policy Association, represents a different strategy for making retiree health benefits sustainable over the long run. In this case, it's a pooling approach.
So far, 42 companies have joined the program, and 65,000 retirees are covered under the plans. Aetna is the insurer for all of them. The coverage is offered on a guaranteed-issue basis for pre-65 retirees, and prescription drugs are covered in all plans.
In this pooling arrangement, the main advantages are having a guaranteed issue and lower premium rates because of the bigger group.
"The big thing that the employers get is much greater rate stability by having us all in a large pool," explains Steve Wetzell, executive vice president of health care initiatives at the Health Care Policy Roundtable, an arm of the HR Policy Association. "The initial rates are company-specific, but the renewals or the annual rate changes that occur are based on the experience of the entire risk pool, so that does give our members and their retirees much greater rate stability. That's particularly significant for the companies that have never had a benefit and are offering it for the first time or have a relatively limited number of retirees."
The employers can subsidize the coverage as much as they want or offer it on an access-only basis, which means the retiree pays all of the costs.
An overall cost reduction is possible for some companies, but others simply want to avoid a Financial Accounting Standards Board rule that requires them to report the expected cost of providing retiree health benefits, currently and in the future.
"Some [employers] are looking at it to save money if they already have a benefit, and they're trying to reduce FAS 106 obligations," Wetzell says. "A lot of them are looking at it because, quite frankly, they're trying to preserve access for their early retirees, which is a huge need for employers. Most of our members see a net savings for pre-65 and post-65 retirees combined. It gets the insurance risk off their books."
Employers can handle the administrative functions, such as billing and enrollment, on their own, or they can pay extra to have an outsourcer handle it.
The percentage of large firms offering retiree health benefits has declined from 66% in 1988 to 31% in 2008, according to new research from the Kaiser Family Foundation and the Health Research & Educational Trust.
Without retiree health benefits, it may be hard for employers to encourage older workers to retire and open up career opportunities for younger generations.
"The presence of retiree health benefits is a powerful determinant in the retirement decision," Cool observes. "People are thinking about delaying the retirement decision. If there is no retiree health care, age 70 is becoming the new 65."
Source: NAHU Newswire, January 21, 2009
Obama postpones enacting certain regs on benefits plans
The Obama administration issued a memorandum to heads of federal agencies and departments asking them to hold off on implementing certain federal regulations. The request will affect employee benefit plans governed by ERISA.
"President Obama has asked me to communicate to each of you his plan for managing the federal regulatory process at the beginning of his administration. It is important that President Obama's appointees and designees have the opportunity to review and approve any new or pending regulations," Rahm Emanuel, the president's chief of staff, wrote in a Jan. 20 memorandum. Obama nominated Rep. Hilda Solis, (D-Calif.) as Secretary of the Department of Labor. She is still waiting to be confirmed by the Senate.
The White House directive underscores the need for employers to gather and review recent federal regulations governing ERISA plans, which were adopted under the Bush administration but don't go into effect until after Jan. 20.
The memorandum, which was published in the Federal Register last week, states that published final regulations scheduled to take effect on or after Jan. 20 may be subject to a new effective date and an immediate reopening of a 30-day notice-and-comment period.
The document goes on to explain that no proposed or final regulations should be published in the Federal Register until a department or agency head appointed or designated by Obama has had a chance to review and approve the guidance.
On Jan. 21, the Department of Labor published in the Federal Register final regulations that would make it much easier for service providers to offer investment advice to participants of 401(k) plans and individual retirement accounts.
The regulations, which were a byproduct of the Pension Protection Act of 2006, were to take effect on March 23, 2009. They are now delayed for 60 days and may undergo a new comment period. Some benefits analysts contend that the Obama administration and some Democratic senators may try to undo certain Bush-era regulations on PPA.
The DOL final regulation on investment advice falls into the delayed category outlined in the White House memorandum, explains Cara Welch, director of public policy at WorldatWork, an HR trade association. A new presidential administration can opt to have an additional time period to review regulations, reopen the comment period or start from scratch with the regulatory rulemaking process, she adds.
Source: Employee Benefit News, February 3, 2009
Retail clinics appeal to younger families
Retail health clinics continue to sprout up in American strip malls and suburbs at a rapid rate, even though only 2.3% of American families had ever used a retail clinic in 2007, according to research by the Commonwealth Fund and the Center for Studying Health System Change.
In 2006, there were about 60 retail clinics in 18 states. A year later, more than 900 retail clinics occupied 30 states. The research, detailed in the report "Checking Up on Retail-Based Health Clinics: Is the Boom Ending?," represents a national survey of 18,000 people in 9,400 families and had a 43% response rate.
Overall, younger families, participants aged 18-34, were more than twice as likely as older families, participants aged 50-64, to have used a retail clinic. The report also explains that 48% of Americans using retail clinics indicate they had done so for diagnosis and treatment of a new illness or symptom.
"While overall use of retail clinics remains modest, families with unmet medical needs tend to use the clinics more than the rest of the population," says Ha T. Tu, an HSC senior researcher.
About 47% of patients explained that their clinic visit involved a prescription renewal, while less common medical needs included vaccinations, care for an ongoing chronic condition and physical examinations.
"These findings suggest that retail health clinics have the potential to play a role in improving health care delivery, especially primary care," says Dr. Anne-Marie Audet, vice president at the Commonwealth Fund.
Source: Employee Benefit News, February 3, 2009
Employees say wellness benefits lower health care costs
More American workers are connecting the dots on how wellness programs can help rein in health care costs, according to the recent Principal Financial Well-Being Index. About 51% of employees report that workplace wellness benefits are successful at lowering health care expenses.
In addition, the data shows that two-thirds of workers, up from 60% a year ago, anticipate higher premiums for 2009, and 43% (up from 38%) expect a spike in deductibles. The index represents the responses of U.S workers at businesses that employ between 10 and 1,000 employees. Harris Interactive conducted the survey.
"Americans face strong financial headwinds as we enter the new year against the backdrop of a slowing economy," says Jerry Ripperger, national practice leader of consumer health for the Principal Financial Group. "Rising health care costs are fueling the fire at a time when many Americans are strapped for cash. Fortunately, it appears the majority of workers understand that adopting preventive health care measures not only improves overall health but can drive down costs in the long term," he adds.
Other top findings included:
- Nearly 80% of workers, up from 74% a year ago, take advantage of educational wellness tools and resources offered by their employer, while 77% (up from 59% last year) participate in both blood sugar and cholesterol screenings.
- Workers indicate that better overall physical health and lower personal health care costs (53% and 38%, respectively) would most encourage them to participate in wellness programs, while 38% indicated that receiving an incentive or reward would most encourage them to participate.
Source: Employee Benefit News, February 10, 2009
Don't let employee engagement decline along with the economy
As goes the economy, so goes employee engagement, which is not good news for employers. Survey results from Quantum Workplace show 66% of employers saw decreases in employee engagement between 2007 and 2008.
"Employee engagement is measured by the ability and willingness of individuals to exert extra effort for the benefit of the company, their tendency to speak highly of the organization and their intent to stay," says Greg Harris, president of Quantum Workplace.
Best known as the research firm behind Best Places to Work programs in more than 40 metro areas, Quantum Workplace surveys more than 1.5 million employees among 5,000 companies nationwide. The surveys are conducted at different times of the year, but at the same time of the year in each location.
"In the past, our surveys have shown how employers can significantly influence, if not control, how motivated and satisfied their employees are," Harris says. "But, we couldn't help but wonder what affect such a significant event beyond employer's control - an economic crisis - might have on employee feelings and perceptions of their workplaces."
By an almost two-to-one margin (134 to 76), more employers had lower overall employee engagement scores in the fall of 2008 than the fall of 2007. This result is out of the ordinary from trends for the last five years, and it strongly suggests that the economy may well be influencing employees' attitudes about their jobs and workplaces, Harris posits.
However, there still are actionable points for employers. Quantum's analysis outlines five factors distinguished the variation among winners and losers:
1. Setting a clear, compelling direction that empowers each employee.
2. Open and honest communication.
3. Continued focus on career growth and development.
4. Recognizing and rewarding high performance.
5. Employee benefits that demonstrate a strong commitment to employee well-being.
According to Leigh Branham, author of "The Seven Hidden Reasons that Employees Leave, "It may be difficult to implement the five lessons described, but as Winston Churchill said: 'Kites rise highest against the wind, not with it.' The additional efforts to engage employees, in spite of the economic currents, can garner significant returns."
"Having a highly engaged workforce certainly doesn't completely insulate an organization from economic recession. But a more engaged workforce can act as insulation, a buffer if you will, from the effects of the economic downturn," according to Mark D. Hirschfeld, a principal at Goldenrod Consulting, Inc.
Source: Employee Benefit News, February 10, 2009
Women would rather see dentist than discuss finances
If ever there was a time for American women to get their financial plans in order, it's now. However, even the current economic crisis isn't enough to drive some of them to take real action and responsibility for their finances. State Farm recently released findings of a national survey revealing that 74% of American women feel anxious about their retirement and financial futures due to the recent economic decline. However, only 15% have made major changes to their financial plans, the insurer finds.
State Farm conducted the survey to understand how women are responding to today's tough economy and what they know about planning for their family's financial future - information employers can leverage to more effectively plan customized retirement education messages.
"The State Farm survey indicates that women are more aware of their retirement needs, however, too many of them are not taking the necessary actions to secure their financial futures," says Susan Waring, executive vice president and chief administrative officer of State Farm Life Insurance Company. "In these worrisome times, women need to talk to someone they trust."
For many women, though, that trusted someone is not their spouse. State Farm finds more than two in five (41%) find going to the dentist less excruciating than talking to their spouses about their daily finances.
In addition to staying mum about money, key findings from the survey also show that 65% of women have reconsidered their financial strategies within the last six months, but most took little if any action: 35% conducted research, but ultimately didn't do anything differently, and 37% only made small changes with little or no impact on short- or long-term financial performance, such as moving money from checking to savings accounts.
For such women, Waring says, "Financial planners or insurance agents can help them find the best solutions for their families or their individual needs."
From short-sighted to set for life
To understand how to better equip women during this tough economic time, State Farm determined their financial IQs by examining their attitudes and perceptions regarding their financial situations and overall confidence in their financial security. On a 10-point scale, respondents fell into three distinct groups:
1. Short-sighted spenders (financial IQ score of 0-4). 33% of women feel lost when it comes to finances and aren't sure how to get themselves on track.
2. Mediocre money managers (financial IQ score of 5-6). This group accounts for 31% of women, State Farm finds, and includes those who are unsure of their financial planning abilities and are uncertain about their future security.
3. Set-for-life savers (financial IQ score of 7-10). An assured 36% of women say they are well-informed and confident about their finances, and feel adequately prepared for any economic challenge they may face down the road.
Across all three groups, however, "State Farm's survey uncovers that most women need to gain a deeper understanding of their financial situation and most need to get beyond just the basic tools like 401ks to ensure financial stability," says financial expert and author Stacey Tisdale. "With the economic crisis intensifying, it's more important than ever for women to take action. They may want to seek advice from professionals like financial planners and insurance agents as they get their finances in order."
Further complicating the situation is the fact that many women aren't prepared for a rainy day. Nearly one-third (31%) of women report only having enough money in their savings to cover one month - or less - of expenses. More than eight in ten (82%) women feel it's important to be adequately prepared for the future; however, more than two in five (41%) suspect they're falling short, worried that they haven't done enough to secure their financial futures.
Source: Employee Benefit News, February 1, 2009
Workers fear losing retirement savings
Employees aren't immune to the news reports of millions of Americans losing trillions of dollars in collective retirement income, and the news that increasing numbers of organizations are freezing their retirement plans, suspending matching contributions or both is heightening anxiety about their futures.
A new survey by Workplace Options finds that 59% of employees are concerned that money from their pensions and 401(k)s won't be there when they need it.
Dean Debnam, Workplace Options CEO says the worry causes a vicious cycle, as layoffs beget financial worries that decrease job performance and put employees in the line of fire for layoffs. "This, coupled with financial worries, can spell disaster for a worker's emotional and physical wellbeing, as well as overall productivity."
Even if your company is suspended its matching contributions -- which I strongly advise against -- or otherwise making retirement plan cutbacks, be sure to communicate with employees in a way that doesn't send them into a tailspin. Click here to listen to our podcast with communications expert Dennis Ackley and read the accompanying article, “Softening the blow of bad benefits news,” in the February EBN.
Source: Employee Benefit News, February 12, 2009
Spring outdoors for an energizing workout
Although we’ve moved our clocks ahead an hour and daylight stays with us a little longer, you still may find yourself doing the same old dark workouts inside the gym. So why not spring forward -- right out the door. Taking your workout outside this spring can recharge your batteries and give you a renewed enthusiasm for exercise.
But first, keep some pointers in mind. When transitioning your indoor workout outside, take things a little slowly at first. Aside from bumps in the road and slippery surfaces to watch out for, you don’t want to overdo it the first time you head for the hills or rough terrain. On the elliptical or treadmill machines in the gym you can manipulate the incline and resistance, but outdoors you are at the mercy of Mother Nature, so you may have to adjust your speed or intensity accordingly. Of course, when heading outside also be sure to bring lots of water and wear sun block and dress in moisture-wicking layers of clothing that you can peel off as you warm up.
And if you’re looking for an entirely new outdoor workout to kick off spring, here’s one of my favorites:
*Warm up. Start off with 5 to 10 minutes of walking, light jogging, jumping jacks or jumping rope. Then perform the following series of exercises all the way through and, if you’re up for more, repeat two to three times.
*Jack squats. Squat down while clapping your hands above your head. Bring your arms to the side when standing up. Repeat 20 times.
*Push-up combo. Do 10 push-ups with your hands on a wall or tree, then 10 with your hands on a bench, then 10 with your hands on the ground.
*Jumping jacks or jump rope. Go for 3 minutes.
*Walking lunges. Start standing tall and then lunge forward with your right leg until your thigh is parallel to the ground. Bring your left leg up as you stand tall and then repeat on the opposite leg. Do 15 reps with each leg.
*Planks. Rest your forearms on the ground and lift up on your toes so that your body is parallel to the ground. Elevate one leg up behind you for 30 seconds, then switch legs for another 30 seconds.
*Mountain climbers. Crouch down with your hands on the ground in front of you. Extend one leg back and place one knee in toward the chest, then quickly switch. Repeat for 20 reps each side.
*Standing side crunches. Stand with your hands clasped behind your head, elbows pointing out to the sides. Bring your left knee up and your left elbow down so that they meet at waist level. Return to the starting position and quickly repeat on the right side. Alternate for a total of 20 reps.
*Jogging, running, jumping jacks or jump rope. Go for 3 minutes.
*Sitting V-crunches. Sit on the edge of a bench and grab the back of the seat with both hands. Lean back at a 45-degree angle and extend your legs out in front of you. Then bring your knees into the chest for 20 reps. (No bench? Start by sitting on the ground and placing your hands behind your butt.)
*One-leg squats with forward reach. Balance on your left leg with your right leg slightly behind you. Reach forward with your left hand and touch the ground. Stand and repeat for 15 reps. Then switch sides for 15 reps.
*Power walking, jogging, running, jumping jacks or jump rope. Go for 3 minutes.
*Cool down. Walk slowly for 5 minutes. Then stretch your entire body. Place an emphasis on calm yoga-style breathing while you enjoy the scenery of the great outdoors.
Source: The Fit List, March 25, 2009
Flutter Delight Cupcakes
No need to wait until spring to enjoy the beauty of these cupcakes.
RECIPE INGREDIENTS:
1 baked cupcake
White icing
½ sour gummy worm
2 fruit slices, sliced in half
Gumdrop slices (optional)
2 ½ inch pieces of shoestring licorice
Frost the cupcake and arrange the following on top: gummy worm "abdomen," fruit slice "wings" (attach gumdrop detail with icing, if you like), and shoestring licorice for the antennae.
Source: FamilyFun.com