BENEFITS BUSINESS
Inexpensive benefit package can give agents
something positive to say in era of rising health care costs
By Len Strazewski
Employers fret about the high cost of health benefits and the steadily increasing level of complaints about managed care from employees. Agents worry about re-marketing coverage to get their clients the best available value and then communicating the inevitable rate increases.
But what about the employees themselves? As employers demand more cost-sharing, employees are of course concerned about health care costs, but that's just one of the many issues that preoccupy them in their daily lives.
"Employees these days have a lot on their minds--very basic concerns about their home, family and managing day-to-day responsibilities," explains Fred Hockenjos, vice president and principal of BJ Associates in Mendham, New Jersey, a general lines independent brokerage with eight employees. "For the most part, their employee benefits don't help them deal with these issues.
"And as insurance agents and brokers, we don't generally deal with them either. We focus on the big insurance products and competing for the big coverage, but generally ignore some of these less traditional and usually less lucrative concerns."
However, Hockenjos says agents and brokers may be missing a serious opportunity--to build business as well as provide value to employers and employees. More than two years ago, BJ Associates began marketing packages of work/life management benefits that provide telephone consultation and Internet-based assistance on a wide range of family health and management topics, including child care, elder care and legal and financial services.
The work/life management services have helped the broker differentiate itself from its competitors--all of whom are chasing the usual health insurance and property/casualty insurance--as well as provide some psychic reward for the producers who bring the services into an employer.
"Certainly these new products and services have added a new dimension to our own marketing, giving us something new to discuss with existing and prospective employers," Hockenjos says. "In an era in which everyone is sharing the same bad news, we have something new and positive to say.
"Moreover, these services really do help people who are sitting around their kitchen table trying to find solutions to everyday problems. Everybody I talk to understands that at one time or another, every family faces these issues and needs support. Everybody has had the experience of losing time from work or being unproductive as they have worked to solve family problems."
Employers, he says, have also responded very well because even they understand that work/life benefits "are needed, appropriate to be offered by an employer and don't cost much compared to other employee benefits."
Work/life benefits are also part of an employer need to improve morale and productivity. Since the terrorist attacks of September 11, 2001, employers have noticed a serious decline in employee morale, notes John A. Challenger, CEO of Challenger Gray & Christmas, a Chicago-based international outplacement firm.
As employers struggle with health care costs, they realize that they need to add employee support in order to retain key employees, he says. Work/life-related benefits, including child care, flexible scheduling and telecommuting, among other benefits, provide a low-cost source of support and a practical morale boost.
BJ Associates represents Work & Family Benefits, Inc., in Cedar Knoll, New Jersey, a 10-year-old company that specializes in work/life support benefits. The company provides a package of consultation and referral services that focus on child care, elder care, assistance for adults with disabilities as well as legal and educational resources delivered by toll-free telephone service or online at http://www.wfbenefits.com.
Work/life benefitS aren't a new concept, notes Work & Family Benefits President William H. Mulcahy, but they are becoming more prominent among a wider range of employers as health care costs increase and as the American work force evolves.
"For several years, large employers have seen the productivity gains associated with work/life benefits," he says. "And as employers deal with the rising costs of their traditional health benefits, including the major medical, dental and vision care, and long-term disability insurance, they are becoming more and more aware of the relative values and importance of benefits in their corporate scheme."
Small to medium-sized employers have a booming interest in the benefits as they attempt to compete with the large firms as well as serve the needs of their work force, he adds.
"Employers and employees are all coming to grips with the common needs of individuals," Mulcahy says. "We will all get old. We will all get sick. We will all die. In between, we cope with the problems these changes produce."
The work/life services provide practical, informed counseling and access to approved vendors that provide specific care services and information as needed by employers with costs of only $10 to $20 per year, depending upon the size of the employer, according to Mulcahy. It is available to all sizes of employers.
The services can also be packaged with more traditional health insurance benefits. Work & Family Benefits recently announced marketing partnerships with Fortis Health, Blue Cross/Blue Shield of New Jersey, Oxford Health Plans and American International Group.
WageWorks, Inc., in San Mateo, California, also provides work/life products that agents and brokers can market along with traditional employee benefits.
The two-year old company is the nation's largest provider of pre-tax employee commuter and transportation benefits that allow employers to use tax code advantages to let employees allocate funds for transportation and parking at about a 40% tax savings for employees. The pre-tax saving structure--which also allows employees to reduce their taxes by lowering payroll taxes--was initiated by the Internal Revenue Service in 1998.
The company's CommuteEssentials product is used by more than 100 large employers, including General Mills, Kemper Insurance Companies and Wells Fargo.
Last year, the company introduced FlexEssentials, a companion product that allows employees to save money for dependent care and uncovered health costs using flexible spending accounts (FSAs) that provide similar tax savings to employees and employers.
Senior Vice President of Sales and Business Development Tim Danison says the company has simplified the administration of the pre-tax benefit--often considered a drawback by employers--by providing complete customer service and integration with payroll and human resource information systems.
The company uses its Internet site (http://www.wageworks.com) and direct toll-free telephone service as the cornerstones of its communication with employees to facilitate benefit selection and management and provide direct wellness coaching and service consultation. Debit card technology helps the company to avoid manual submission of bills, receipts and other administrative documentation, he notes.
"Employers are actively seeking ways to add value to their benefits without adding to their overall costs," Danison says. "The employer costs of adding pre-tax savings benefits are completely offset by the lowered payroll taxes. And the benefits are very much appreciated by employees who can not only notice the savings but also experience the advantages of good customer service and administration."
WageWorks products have been marketed by larger employee benefits consultants in the past, but the company is interested in working with independent agents and brokers, he says. *
The author
Len Strazewski has been covering employee benefits issues for more than 20 years and is employee benefits editor of Human Resource Executive magazine. He has an M.A. in Industrial Relations from Loyola University.