By Len Strazewski

Control costs. Engage employees. Manage your employee benefits program effectively according to long-term strategic goals.

The Henriott Group Benefits Team.

Employers face more challenges than ever as they struggle to provide economical and effective employee benefits, but these principles can provide a solid roadmap to success for the future, says Rick Davis, president and chief executive officer of the Henriott Group in Lafayette, Indiana.

However, effective execution demands a comprehensive strategy, he says, and a balanced approach to risk management that cuts across property/casualty insurance, employee benefits programs and human resource management.

Founded 50 years ago, the agency has been a cornerstone of risk management and insurance services in Indiana. Unlike latecomers to employee benefits services that began to sell group health insurance only recently as an accommodation to property/casualty insurance customers, the Henriott agency developed an employee benefits practice more than 20 years ago in response to a rapidly evolving set of employer needs, Davis says.

“It’s a critical part of what we do,” Davis explains, as the agency addresses a broad range of financial risk that includes the increasing cost of health care—and the increasing overlap of traditional risk management such as safety, loss control, workers compensation and employee productivity.

Chairman Gary Henriott agrees. “What we bring to the client is a strong consultative approach to both risk management and employee benefits and a range of client services that extend far beyond insurance purchasing.”

“What we bring to the client is a strong consultative approach to both risk management and employee benefits and a range of client services that extend far beyond insurance purchasing.” ­—Gary Henriott Chairman

Many employers still manage their risk and employee benefits costs on a year-by-year basis, he explains. They see their costs increase with every renewal and hope that their brokers can find a lower price by remarketing coverage. “At some point, however, this will stop working.” Henriott’s approach is to take a longer term view of these issues and work with clients to develop a multi-year strategy that addresses issues beyond costs, he says.

“What are you trying to accomplish? How do you want to position yourself in the employment market? Do you want to be an employer of choice in your region or industry? The more we can share and define these objectives, the more ideas we can bring to the table,” Henriott says.

The agency presents a wide range of services and resources. Nine of the agency’s 30 employees work in employee benefits services which generate about 45% of total agency revenues, almost equal to property/casualty insurance, says Davis.

Clients range in size from small business owners with only a few employees to 3,000 employees, but one of the agency’s largest clients is a prime example of the firm’s strategic savvy, executives say.

Nearly 10 years ago, the agency founded a consortium to provide self-funded health benefits to its hometown and the adjacent West Lafayette as a strategy to head off rapidly escalating costs. The initial program for two cities was expanded to a broader user base in 2010 under the sponsorship of the Indiana Association of Cities and Towns Medical Trust, beginning with four municipalities.

The trust now has 22 participating cities and towns with nearly 3,000 employee participants. UnitedHealthcare manages medical and medical provider networks.

Gary Henriott says the trust program has been successful in curbing cost increases so far, reducing the rate of health claims increase from 7.5% last year to 4.9% this year. The trust has also lowered the administrative costs and increased an opportunity to share resources for ongoing consulting in health care reform issues, wellness and compliance.

Ann Cottongim, director of trust operations, says the Henriott Group is an excellent partner in administration of the trust-based medical services and is committed to client service.

“The Henriott Group employees are passionate about their business and the customer service they provide to our members,” Cottongim says. “They are truly responsive to our needs in both the technical management of the trust and the education and administration of the services.”

The agency is also addressing the changing needs of smaller employers who have begun using some of the same approaches to cost management previously available only to the largest employers, according to Melva Lowry, vice president of employee benefits for Henriott. “Cost is always the big issue for current and prospective clients but our approach is to address the underlying causes of those costs. Employers have become willing to investigate alternatives and think outside the box as they look for ways to control their costs.”

“We can drill down into the claims data to identify the real cost drivers and work with the provider networks and educate employees about prevention and wellness.” —Melva Lowry Vice President, Employee Benefits

For example, employers with as few as 25 employees can partially self-fund health benefits, she says, and gain better access to claims data from their health insurers. “We can drill down into the claims data to identify the real cost drivers and then massage the plan design, work with the provider networks and educate employees about prevention and wellness.”

In anticipation of the use of insurance exchanges enabled by the Affordable Care Act, Henriott Group recently launched a small business division that can assist the smallest employers in determining whether they want to continue to provide group health insurance, and assist employers in choosing exchange-based programs for their employees.

“This has become a real question for small employers: ‘Do I want to provide group benefits to employees or direct them to the exchanges for individual coverage? Do I want to choose a defined contribution model and give employees a monthly allowance they can use to purchase health insurance?’” Davis says.

While health care benefits take center stage for most clients, the agency also provides consulting on various self-funding approaches and administrative services-only agreements; ancillary benefits including vision care, dental insurance, life insurance, accidental death and dismemberment insurance, long- and short-term disability insurance; and voluntary benefits featuring long-term care insurance, among other services.

The agency also consults on 401(k) and other types of defined contribution retirement plans and executive benefits, employing two specialists in financial services. “We recognize the value of the personal relationships we have been building with our customers and the needs they have as individuals. Eventually, they will retire from their employment but they will continue to have needs that we can meet, including individual health, Medicare-related products and more,” Davis says.

Employee communication is also an important component of Henriott Group benefit services, Davis says. The agency offers a wide range of communications services that support benefits and human resource services as well as management and training.

The services include open enrollment meetings and other employee group meetings; handouts, payroll stuffers and email communication; personalized benefits statements; Internet-based communications and portals; consumer-driven health care education and individual retirement planning seminars.
The agency also publishes a health and wellness newsletter series, “Live Well, Work Well,” available to client employees, and a series of retirement and personal insurance videos. Employee education programs are important support for health and ?wellness programs, executives say.

“We have many clients that have initiated consumer-driven health plans with large deductibles and health savings accounts,”’ Davis says. “In order for these plans to be effective, employees must understand how they work and how to make good consumer choices.”

Gary Henriott adds: “We have to assist employers in engaging their employees in this process and give them the resources they need to become better health care consumers. To be successful, we must bring transparency to the process and give employees the tools to compare costs and make smart decisions.”

“Companies are beginning to place more value on creating a culture of health in their organizations due to the positive impact it can have.” —Rick Davis President/CEO

A growing component of Henriott’s employee benefit business is health and wellness. “Companies are beginning to place more value on creating a culture of health in their organizations due to the positive impact it can have on employee morale and retention not to mention lower health care costs, improved safety and productivity measures,” says Davis. Henriott’s health and wellness division offers clients a track to run on in terms of implementing a broad range of wellness-related programs, referred to as the THRIVE program. Henriott wellness consultants assist companies in creating a wellness culture by developing a strategy, forming wellness committees, evaluating cost drivers, implementing and promoting programs, and so on. Henriott Group also consults on wellness plan design and can assist employers in identifying local resources such as hospitals, nursing schools and other providers to deliver wellness-related education and services, adds Davis.

“We view ourselves as an extension of the human resources department and can provide support on training and administrative issues as well as benefits,” says Lowry. Regulatory compliance, for example, has become a challenge for employers as they attempt to keep up with the latest state and federal rules, she says.

The smaller the employer, the fewer the resources for managing compliance issues. In response, Henriott Group has begun to offer Compliancedashboard, a data product from Compliancedashboard LLC, a division of Capstone Benefits Group in Indianapolis, Indiana.
The service helps employers track regulatory responsibilities for health- and welfare-related programs and prepare records used to fulfill audit requirements and periodic filing.

Lowry says Compliancedashboard can alert employers with email reminders when it is time to complete a compliance task. It can customize the process to a specific organization’s benefit program and maintain on-going reports of compliance activities. This helps aggregate information and creates document trails to illustrate that procedures meet requirements.

The author
Len Strazewski is a Chicago-based writer, editor and educator specializing in marketing, management and technology topics. In addition to contributing to Rough Notes, he has written on insurance for Business Insurance, Risk & Insurance, the Chicago Tribune and Human Resource Executive, among other publications.