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					Wake Up and Smell The Benefits!
             Kevin McFadden
Objective
•Share my 20 years of benefits industry
experience and teach how to properly:

  •Design
  •Pay For
  •Communicate

   Employee Benefit Plans
Where to get advice -
Benefits Advisors

•National Consultants
•Regional Consultants
•Brokers/Agents

•Compensation & Disclosure
Design

• Objective of the Plan
   •Attract / Retain / Lead / Follow / Protect
   •“Culture”
• Cost Sharing
• Protection and Reimbursement
• Leading Edge / Average / Economy
Leading Edge - Steak

•   2-3x Life Insurance & Dependent Life
•   Short Term & Long Term Disability
•   Drug Card with 90-100% Reimbursement
•   Extended Health
•   Dental 90-100% Basic, 50% Restorative & Orthodontic
•   Vision care - $200
•   Healthcare Spending Account $200 - $500
•   EAP
•   Flex options
•   Pension – Matching up to 6%
•   70% -100% Employer Funded
Median - Burger

•1-2x Life Insurance & Dependent Life
•Long Term Disability
•Drug Card with 80% Reimbursement
•Extended Health
•Dental 90-80% Basic, 50% Restorative & Orthodontic
•Healthcare Spending Account $200 - $500
•EAP
•Pension – Matching up to 3%
•50 -70% Employer Funded
Economy - Beans

•   1x Life Insurance and Dependent Life
•   Long Term Disability
•   Drugs 80%
•   Extended Health Care
•   Dental 80% Basic
•   No Pension
•   No EAP
•   50% Employer Paid
Inflation Proof Plan

• Employer pays all costs of Life and Disability
• Drug Coverage with a card
• Health Care Spending Account

• E.g.) 80% Managed Drug Card – Dispensing Fee
  Deductible
• Health Spending Account for other Medical and Dental
  expenses
 (e.g.. $500 single - $1000 family)
Other Value Added Benefits

•   Affinity Plans
•   Group Home and Auto
•   Group Mortgage Program
•   Payroll deductions for RRSP/RESP/TFSA
•   Pet Insurance
•   Fitness Subsidies
•   Employee Fitness Facilities
•   Employee Assistance Programs (EAP)
•   Best Doctors
•   Weight Loss Programs / Quit Smoking
2 Types of Benefits

1. Pooled


2. Reimbursement
Pooled Benefits
• Life, AD&D, Dependent Life, Long
  Term Disability
• Carriers price based on estimated
  risk
• Most claims are fully pooled
• Usually account for approximately
  1/3 of the total cost of a benefits
  plan
Reimbursement

 • Drugs, Hospital, paramedical
   practitioners, hospital, etc.
 • Dental
 • Eyeglasses
Types of Contracts

 • Fully Insured
 • Refund
 • ASO (Administrative
   Services Only)
 • aka – “Self Insurance”
Fully Insured vs. Self Insured (ASO)

 • Health and Dental Premiums over 3
   years for Company XYZ = $300,000

 • COST =$300,000

 • Health and Dental Claims over 3
   years for Company XYZ = $225,000
   (75% of premiums)
The Math

 • $225,000 claims x 10% (admin fee) = $      22,500

 • $225,000 claims + $22,500 (admin)= $      247,500
 • +Pooling Costs (stop loss & travel) = $    10,000



                       Total Cost =$            257,500
Savings

 • Premiums = $ 300,000
 • less (Claims + ASO Expenses) =
   $(257,500)

 Savings to Company XYZ = $42,500
Who Supplies ASO?

 • Main Line Carriers e.g. GWL, Sun,
   Manu, etc.
 • Third Party Administrators
    •Maximum Benefit
    •RWAM
    •Health Source Plus
    •Sirius Benefits
Mechanics of ASO

 • Set up a stand alone bank account
 • Health and dental rates are set by
   company
 • Deposit employee premiums into
   account
 • Deposit employer premiums into
   account
 • Carrier pays claims from bank account
 • Any surplus easily identified by viewing
   bank balance
Eliminating the Risks

   1. Stop Loss Protection         2. Out of Country
          “Ceiling”                    Protection
 • Amount can be set at any    • Protects the plan against
   level                         an expensive out of
 • e.g. $10,000, $7,500,         country claim
   $5,000 per year.            • Insurance premium
 • Designed to eliminate the     charged for out of
   risk of a very expensive      country protection
   drug claim                  • Typically 100% insured
 • Insurance premium
   charged for stop loss
   protection
Pros and Cons of ASO

             Pros                              Cons

 • Pay only for what is claimed   •   Without Stop Loss provision
 • Administrative charges are         exposure on large drug
   lower                              claims
 • Admin charges on claims        •   Without travel coverage
   not premiums                       exposure of out of country
 • Surpluses are kept by the          claims
   company not the carrier        •   Can be more costly in short
                                      term
What to do with a Surplus

 • Reduce health and dental
   rates
 • Enhance benefits
 • Leave in account to reduce
   possible future deficit
 • Give employees a “premium
   vacation”
Corporate Sponsored Retirement Plans
(Pension)
Pension

 •Types – DB, DC, DPSP, RRSP
 •Why important?
 •How to set up?
 •Investment choice
 •CAP Guidelines
Pension Investing
Executive/Management Benefits

 •Higher amounts of Life Insurance
 •Specialty Long Term Disability
 •Critical Illness Insurance
 •Health Care Spending Accounts (HSA)
 •Pension – 5-10% non contributory
 •Medical Access Insurance
 •Executive Medicals
 •Best Doctors
 •100% paid by employer
Critical Illness Insurance (CI)

 •   What is it?
 •   What does it protect against?
 •   Heart Attack, Stroke, Cancer
 •   CI as an employee benefit
 •   Taxability
Health Care Spending Accounts (HSA)

 • What are they?
 • How does it work?
 • What expenses are covered?
 • What does it cost?
Best Doctors

 •   What is it?
 •   What is the purpose?
 •   How does it work?
 •   What does it cost?
EAP – Employee Assistance Plan

 • What is it?
 • What is the purpose?
 • Who supplies them?
 • What do they cost?
Marketing Benefits to Employees
Proven Marketing Techniques

 • The Employee Meeting
 • The One Page Summary
 • Newsletters
 • Website Content
 • Surveys
 • Committee
Objective

 • Protection
 • Value/Efficiency
 • Employee Appreciation
 • Market Competitive

 • ROI !!
References

•   www.sigurdsonmcfadden.com   •   www.bestdoctors.com
•   www.rwam.com                •   www.benefitsnews.com
•   www.directprotect.com       •   www.sunlife.ca
•   www.acurehealth.com         •   www.greatwestlife.com
•   www.maximumbenefit.ca       •   www.benefitscanada.com
•   www.lifescale.ca            •   www.wellpointhealthservices.com




For more information:
Kevin McFadden (204) 953-1602
kevin@sigurdsonmcfadden.com

				
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posted:12/20/2010
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