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Employee Assistance Programs in Times of Need

Employee Assistance Programs in Times of Need

by | Oct 21, 2022 | Uncategorized

The COVID-19 pandemic has brought mental health to the forefront for many people, as they tried to cope with abrupt changes to their work and social lives, isolation, fear of getting sick and losing loved ones to the disease. Even now, as the pandemic ebbs, the mental health crisis has not. A recent National Safety Council survey of 1,600 employers and 7,000-plus workers found that half of large employers saw an increase in mental health or impairment-related absences and incidents. Meanwhile, mental health has become American’s biggest health concern, overtaking COVID-19, according to a study by Ipsos. The number of Americans who said COVID was one of the biggest health concerns in the U.S. dropped from 68% in 2021 to 43% in 2022. Meanwhile, more Americans rated mental health as one of their top health concerns, rising from 35% in 2021 to 51% over the same time frame. Fortunately, employers can step up their efforts to help employees dealing with mental health issues by offering an employee assistance program (EAP). Many employers already have. According to the NSC study, 25% of organizations with an employee assistance program implemented that program during the pandemic, while 66% expanded their offerings. If you do not already have an EAP, you may want to learn more about them as it can be crucial to helping struggling workers.

What’s an EAP?

An EAP is an intervention program designed to help employees resolve personal problems that might be affecting their work performance. Many employers make EAP services available to employees’ family members, as well. These programs can help cover the costs of counseling services that employees seek out. An EAP provides outside counselors, resources, and referrals to assist employees and their family members. Any EAP benefit received by employees or family members remain confidential. Employers do not get to know who is utilizing the service, what the reasons are for, or how often employees call. Typical services include: A study by the University of Warwick in the U.K. found that satisfied workers are 12% more productive and provide better customer service than their less happy peers. The study found that employers who implement EAPs experience: EAPs also help managers to become more effective. They can help them develop skills in consulting with employees, managing workplace stress, maintaining drug-free workplaces, responding to crises, and helping employees achieve an appropriate work-life balance.

EAP options

Employers have several options for establishing EAPs. They can run them with their own staff or outsource them to third party providers. Providers can be hired on a fee-for-service basis or for a fixed fee. They can be arranged by single employers, groups of small employers banding together, or by unions. Some employers or unions even train employees to provide peer counseling to their fellow workers. EAP providers should meet the standards set by the Employee Assistance Professionals Association. These include standards for program design; management and administration; confidentiality; direct services; drug-free workplace and substance-abuse professional services; partnerships; and evaluation of the program.

The takeaway

Besides COVID-19, employees are subject to the stresses of day-to-day living, sudden illnesses or deaths of loved ones, natural catastrophes and work. Family members can develop substance-abuse problems, parents grow old and need care; unexpected financial shocks occur; and marriages often deteriorate. By implementing an EAP, an employer can help make these problems, and the shock of a natural disaster, a little easier for their employees to manage. EAPs can help retain good employees, make them more productive, and make their lives a little better. In turn, this can make a business more profitable and a better place to work.
Most Workers Make Bad Health Insurance Decisions

Most Workers Make Bad Health Insurance Decisions

by | Oct 19, 2022 | Uncategorized

Even though the majority of workers receive health insurance coverage on the job, a new survey has found that many of them understand surprisingly little about their health plans and are leaving money on the table. The “Health Insurance Literacy Survey” by Healthcare.com found widespread misunderstanding about how copays and deductibles work, and what premiums and benefits are. Experts say that when people don’t understand their health insurance they may make poor coverage decisions, such as choosing plans that provide more benefits than they need, or too few. Those poor choices can be costly in terms of the premiums they pay or what they pay in copays, coinsurance and deductibles out of pocket. Some of the key findings:
  • 26% of Americans surveyed say lack of health insurance understanding caused them to receive a higher-than-expected medical bill.
  • 41% were unable to correctly answer what “in-network” means. Understanding the meaning of in-network is crucial when choosing where to receive treatment and avoiding paying excessive fees for medical services when going out of network. Most health plans do not cover out-of-network care.
  • 59% don’t understand that low-deductible health insurance plans start paying out sooner than high-deductible health plans (HDHPs).
  • 22% incorrectly believe that if they think their medical expenses will be low in the coming year, they should choose a low-deductible plan.
  • 43% of those surveyed could correctly identify what a health savings account is, and 20% could not describe a single feature of these tax-advantage accounts.

What it costs them

The costs of choosing the wrong plan can be in the thousands of dollars per year, according to a 2021 analysis conducted by Trevor Collier and Marlon L. Williams, both associate professors of economics at the University of Dayton in Ohio. Collier and Williams found that 97% of 2,300 employees studied would have been better off choosing a plan that had lower premiums, but higher cost-sharing for medical services. Despite that, 23% chose the higher premium plan anyway. They calculated that the average cost per year of choosing the wrong plan was more than $2,000. The study shows just how little many people know about their health insurance coverage. As their employer, you can help your employees make good choices about their health coverage.

What you can do

During your open enrollment meetings, you should go over some of the basics of coverage and explain that people who are not frequent health care users may be better off in high-deductible health plans, that have a lower premium in exchange for more out-of-pocket expenses. Conversely, people who have chronic conditions are not good candidates for HDHPs. Make sure to schedule a series of meetings in the run-up to open enrollment where you can go over the basics of how health insurance works. Get your human resources team to urge staff to schedule time with them if they have any questions.
Get Communications Right for Open Enrollment

Get Communications Right for Open Enrollment

by | Oct 10, 2022 | Uncategorized

As group health plan open enrollment looms for most companies, communicating your offerings to your staff is key to getting as many of them as possible to sign up for coverage.

That requires a solid strategy aimed at helping your employees understand their choices and the financial implications of them. Most importantly, you want to reach those employees who didn’t sign up last year and stress the importance of health insurance.

To achieve maximum participation, your communications in the run-up to open enrollment are crucial both in terms of how and what you are messaging. A robust strategy includes:

Simple messaging

Simplify the process of deciding which health plan to choose in a series of snappy messages that are easy to understand. One of the best ways to get the point across is by using vivid examples, preferably with graphics.

Explain the basics — Focus on your employees’ costs and coverage considerations:

  • Their share of premium,
  • Their deductible, copay or coinsurance,
  • If their doctor is in the plan’s network,
  • If there are any drugs they need for any ongoing health issues.

Help them with the math — Many people have trouble grasping the math. They may look at a low premium without considering the cost on the back end in terms of a higher deductible and/or other out-of-pocket expenses.

Break expenses down with different health care scenarios and the associated out-of-pocket costs based on the plan they have.

Explain coverage for big-ticket items — This includes costs associated with things like a knee replacement or cancer treatment. Humanize the examples by creating a persona and how their health plan covered treatment.

Use creative materials — Provide vivid documentation that includes a lot of bullet points and quick, punchy messages.

Use sidebars to cover important information they need to know, like an increase in deductibles or copays, or that a plan has overhauled its doctors’ network.

Dispensing sage advice

Help your employees by providing guidance on choosing the right plan:

  • Provide clear and direct advice.
  • If an employee is getting family coverage, it’s important they discuss possible choices with their spouse. You can assist by sending hard copies of the enrollment materials to their home.
  • Provide tools for comparing plans to see what their costs would be under each option.
  • Highlight wellness and virtual benefits, which are growing in popularity. Provide details on how to sign up and access these benefits.

Staggering your communications

Step up announcements to build interest by focusing on:

New or changing plans — Use these blasts to let them know about any new benefit programs you are offering or plans you may be discontinuing. You can point them to resources on how the benefits work and any demos. You can also announce changes to plan out-of-pocket costs or deductibles, or if a plan has beefed up coverage.

Timely communications — These should include reminders about open enrollment and checklists on what your employees should do before it starts.

Once open enrollments starts, you’ll need to send out messaging to get stragglers to act.

Popular programs — If you are adding a plan that your staff has requested, make sure to blast out a few announcements to the troops.

The takeaway

Communication is a key component of a successful open enrollment. You can follow the above advice to generate interest and to help your staff pick plans that are right for them.

How to Budget for Your Group Benefits Plan

by | Oct 6, 2022 | Uncategorized

As the labor market remains tight and businesses struggle to find staff, more small firms are starting to offer employee benefits, particularly health coverage. But the costs of coverage can be daunting and many employers worry about whether they can afford benefits programs and struggle to set a budget that won’t deplete or severely dent their profits. Typically, the most expensive and most important benefit is health insurance. For most people, purchasing health coverage on their own is prohibitively expensive. They will gravitate toward employers that offer affordable health plans with networks that include their doctors and provide reasonable coverage. If you have more than 50 full-time employees, the Affordable Care Act requires you to provide your employees with coverage that is affordable and covers a set of essential benefits without cost-sharing. Not offering this coverage can result in penalties. On the other hand, companies with fewer than 50 full-timers are not required to offer coverage. That said, 53% offered health benefits in 2020, including 48% of businesses with three to nine employees. However, there are options for those who want to offer it. For example, employers with fewer than 25 employees may qualify for federal tax credits if they offer health insurance.

Don‘t game the system

Firms that should be covering their employees under the ACA sometimes try limiting the amount of shifts they give employees to avoid hitting the hours-worked threshold that requires them to offer coverage. But that’s not a good strategy if you want to keep your employees happy and avoid high turnover. Think of an employee benefits plan as a need-to-have, not a nice-to-have. Also think of it as an investment in the future of your business, your staff’s lives and your community.

Getting it right

Finding room in your budget for group health insurance can be especially difficult when you’re just starting out or your profit margins are thin. According to a 2021 Kaiser Family Foundation (KFF) report, the average annual health insurance premium for small businesses (those with up to 199 employees) was:
  • $7,813 for single coverage (the average employer contributed $6,485, or 83% of the premium, while workers covered the rest).
  • $21,804 for family coverage, of which employers contributed an average of $13,737, or 63%.

The considerations

The factors employers need to consider when determining the budget include: Employer premium contributions. You should expect to pay 50% or more of the premium, for two reasons:
  • Most insurers require it.
  • Federal tax credits are available only to small employers who pay at least that much.
To get an idea of what your baseline cost will be, multiply the numbers from the KFF report by the 50% requirement. Keep in mind that premiums tend to rise each year, so your actual cost will be higher even if you limit your contribution to 50%. Caution is called for when deciding how much to require employees to contribute. Setting their contribution too high may discourage workers from participating. If employee participation falls below 70%, you may not be able to purchase the plan you want. Your employee profile. The ACA prohibits insurers from raising premiums based on most employee characteristics. However, it does permit them to raise premiums based on employees’:
  • Age
  • Tobacco usage
  • Residence location
A business made up of older employees, most of whom smoke, will pay more than one whose workforce is younger and doesn’t smoke. The type of plan you pick. The ACA requires state health insurance marketplaces to offer four tiers of coverage. These tiers differ based on the premium cost and the percentage of health care costs the plan pays for:
  • Bronze (least expensive; insurer pays 60% of health care cost, employee pays 40%)
  • Silver (insurer pays 70%, employee pays 30%)
  • Gold (insurer pays 80%, employee pays 20%)
  • Platinum (most expensive; insurer pays 90%, employee pays 10%)
You aren’t limited to offering just one tier. You can give your employees a choice of plans in different tiers and still hold your per-employee cost constant. There are also four types of plans:
  • Exclusive provider organization (EPO) — A plan where coverage applies only if employees use health care providers within a specified network, unless there is an emergency.
  • Point of service (POS) — A plan where the employee out-of-pocket cost is reduced if they use health care providers within a specific network, but referrals to specialists are required.
  • Preferred provider organization (PPO) — Similar to a POS plan, but employees can see specialists without a referral and see out-of-network providers for an additional cost.
  • Health maintenance organization (HMO) — Coverage applies only if employees see health care providers who work for or are under contract with the HMO, unless there is an emergency.
EPO, POS and PPO plans tend to cost more than HMO plans, but they offer employees wider choices of health care providers.

The takeaway

Some businesses simply cannot afford to provide their employees with health insurance and paid leave. Those that can, however, should view these benefits as investments in the business. They make employees’ lives more comfortable, and good employees who are comfortable tend to stay. Finding the budget space isn’t easy. It takes careful strategic planning, and it may require either cost-cutting in other areas, raising prices or accepting lower profits. However, many successful companies have found offering benefits to be worth the effort and cost. For them, it has paid off because it has enabled them to attract and keep the talented employees who make their businesses successful.