How do you design an effective benefits package for a client that is a provider of sophisticated benefits design services for its own clients? Jeff Fox, a benefits broker at H.J. Spier Company of Indianapolis, finds himself in that role as he works with his client The Nyhart Company, a 115-employee firm specializing in plan design and TPA work. Nyhart, also based in Indianapolis, does consulting for defined benefit and defined contribution retirement plans and medical plans. Its clients include large publicly owned and private companies and government entities.
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| “If we can lower our health care costs, maybe our stock price will go up a little more, and we’re all going to share in that.”
–Tom Totten |
There’s strong mutual respect between H.J. Spier and the executives at Nyhart. Fox worked at Nyhart himself for 13 years doing TPA consulting work for self-funded medical plans. And now, he says, “We will sometimes bring in their actuaries to consult with us on TPA work for our other clients.”
Nyhart President Tom Totten says a large part of the expertise that Spier brings to Nyhart is a broader perspective on their needs, particularly in health care. “We are fairly niched,” he points out. “A lot of us are pension actuaries, 401(k) people and health care actuaries, but not necessarily ones who know everything that’s available in the health care environment. So we need Jeff to tell us what other employers are doing in that regard.”
While working at Nyhart, Fox learned the importance of consultative selling, paying close attention to the unique needs of individual client companies. He also had the opportunity to work with Don Brown, the president of H.J. Spier, an 80-year-old agency that built its reputation in the property/casualty business.
“Don would bring me in to their property/casualty clients to help them create self-funded medical programs. When I was ready to leave the corporate world and go out on my own, he offered me the chance to join Spier.”
Fox became a broker at Spier in 2003. Although Spier has more producers and more revenue in property/casualty than in benefits, Fox immediately felt a kinship with Spier’s sales and service structure. The producer owns his or her book of business, and servicing is not handed off to CSRs, he says.
“Unlike many firms, we are not incentivized with a bias toward new business. I can spend the time I need to build a solid relationship with clients, and they know I can be reached when they need me. I don’t just stop by their businesses every three months. I’m in their offices sometimes weekly or at least monthly.” As a result, says Fox, “I have several accounts that have been with the agency for 20 years.”
It’s no surprise that Nyhart, with its strong national benefits practice, takes its own benefits plan seriously. Recently it was named one of the winners of The Principal Financial Group’s 10 Best Companies for Employee Financial Security for 2013. The award recognizes small and mid-sized companies for meeting employee needs.
The Nyhart benefits plan is anchored by generous employer-paid benefits that have been chosen to match the specific needs of its workforce. That workforce is made up of predominantly young professional people, including actuaries, attorneys and benefits consultants. The company has continued to add employees, even during the recession years, growing from 50 employees in one location in 2006 to 115 in seven locations currently.
Nyhart is ESOP-owned. So as a significant retirement benefit, the company provides employees additional shares of its stock for their ESOP holdings. The ESOP gives them a different perspective on employee benefits and cost control, Totten notes.
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| “I enjoy working with clients who aren’t afraid to approach their benefits program in new, creative ways.”
–Jeff Fox |
“The employees have a direct buy-in. They own the firm, so they know that to be successful we have to do it together. When it comes to something very expensive like health care, we as a company want to do what’s right to meet employees’ needs; but at the same time, the costs affect all of us on the corporate side because of the ESOP.
“If we can lower our health care costs,” Totten continues, “what that means for the company is that maybe our stock price will go up a little more, and we’re all going to share in that. All the employees share in the gains as well as the losses.”
For its health care benefits, Nyhart relies entirely on a high-deductible health plan with a health savings account with the company contributing to the HSA. It also provides a wellness program that includes health care screenings and an on-site fitness facility.
“Their wellness program isn’t just put in place and left alone,” says Fox. “Management promotes it. They have organized hiking and camping trips, anything they can think of to create a teamwork atmosphere. The idea is to work hard and enjoy what you’re doing.”
The bottom line for Nyhart’s health care program, according to Fox: “Their average claims costs have been ridiculously low. They’ve been that way for the past seven or eight years that I’ve handled their business. Granted, they are a younger group, but the wellness culture is helping a lot.”
Aside from the ESOP account contributions, Nyhart’s retirement benefits include a 401(k) plan with a company match. The independent judges for The Principal’s award cited Nyhart’s high employee deferral rate into the plan (16%) as exemplary. The company also provides tuition reimbursement for professional development programs.
It might seem difficult for many employers to emulate Nyhart’s approach to its benefits program. But employers and their brokers might learn a lot from studying how this benefits consultant, whose primary work involves building long-term value for retirement plans and health care benefits, has chosen to construct its own program.
“I enjoy working with clients who aren’t afraid to approach their benefits program in new, creative ways,” says Fox. Nyhart has shown that those new and creative ways can produce the kind of return that employers are looking for in their benefits plan.
The author
Thomas A. McCoy, CLU, recently retired as editor-in-chief of Rough Notes magazine.