Audit & Streamline Your Voluntary Benefit Program to Improve Employee Attraction & Retention

1. BIZGROWTH
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Article reprinted from Spring 2013
S T R A T E G I E S
Insurance Strategies
Audit & Streamline Your Voluntary Benefit Program
to Improve Employee Attraction & Retention
A
properly-designed voluntary benefit menu enables your benefits through one agent and voluntary short term disability
employees to purchase cost-effective insurance policies (STD) through another and the policy provisions did not
that complement your employer-paid benefits and improve dovetail. In some instances employees had STD and LTD
financial security. policies that concurrently paid benefits for almost 24 months.
Valuable voluntary product insurance offerings include life, • An employee making $30,000 in salary was spending
short and long term disability, dental, vision and supplemental $2,400 per year (or 8% of his salary) in premiums for
medical. Most of these products can be offered as a core benefit voluntary products with coverage overlap.
in lieu of employer-paid coverage and some can be offered to
If your voluntary benefits are in need of review, consider
supplement the existing employer-paid benefit.
partnering with an experienced benefits professional. Alternatively,
Here is an example benefit menu, displaying how voluntary conduct the audit internally, using the following steps:
benefits can effectively complement and round out your employer-
1. Run a census of your employees that includes their product
paid benefits:
selection and corresponding payroll deduction for all of your
benefits, employer paid and voluntary.
Employer-Paid Benefits Voluntary Benefits
2. Determine if there is coverage overlap in your benefit package.
Group Health Plan with a $500
Hospital Indemnity
copayment for hospitalization a. Pure Overlap: for example, enrollment in both an
employer-paid dental plan and a voluntary dental plan
$50,000 in Group Life Insurance Supplemental Life
b. Disability Overlap: Ensure that STD benefits end when LTD
Long Term Disability Benefits,
Supplemental Long benefits begin.
insuring 60% of salary to a
Term Disability c. Supplemental Medical Product Overlap: When more than
monthly cap of $7,500
one supplemental medical product is offered, the risk
Voluntary Short adverse may over-purchase. For example, an employee
Term Disability with employer-paid group health coverage also purchased
Voluntary Dental hospital indemnity, cancer and critical illness products.
Voluntary Vision 3. Determine which products to keep, which to eliminate and
which to modify to eliminate overlap.
However, over time, coverage overlap can occur within a 4. Through a Request for Proposal (RFP) process, select your
voluntary benefit menu when: insurers.
• ultiple agents manage the voluntary product offerings
m 5. ffectively communicate your enhanced offering to your
E
• roduct representatives meet directly with employees
p employees.
• insurers seek to maximize revenues by offering their full
6. Moving forward, control the benefit communication and
© Copyright 2013. CBIZ, Inc. NYSE Listed: CBZ. All rights reserved.
suite of products, despite possible coverage overlap enrollment process to ensure that employees are only offered
those products within your set menu.
In these instances a professional audit of the voluntary
program will isolate any areas in need of correction. Here are Whether performed by a benefits professional or conducted
some examples of common inefficiencies uncovered in this type internally, an audit of your voluntary benefit plan can streamline
of audit: coverage, improve benefits and reduce employee costs – all
without increasing the budget.
• While an employer provided a robust 100% employer-paid
dental plan benefit, their agent was also enrolling their
employees into a voluntary dental product.
• An employer offered voluntary long term disability (LTD)
ZACK PACE
CBIZ, Inc. • Columbia, MD
business is growing yours
443.259.3240 • zpace@cbiz.com
our