UNUM Survey Results Show The Importance of Benefits

UNUM, a corporation insuring employee benefits such as Long Term Care and other benefits, recently published the survey “What Matters Most:  Attracting Talent in the Recovering Economy”. This  survey shows that both employed and unemployed job seekers look beyond the money, to the benefits. The  surveyed employed and unemployed workers felt that being offered financial protection benefits showed their employers cared about their well-being, which was rated over a high base salary or a results-based bonus program.

“Given the economic recession of the past few years, this could be especially true for those who may not have had adequate protection when they were laid off,” says John Kmiec, Jr., a research associate in human capital development at The University of Southern Mississippi. He also acknowledged that the group that earned less than $50,000 and long-term unemployed people might not have cared as much about voluntary benefits; however, the survey did not break those numbers down.  Age plays a role in the needs of job seekers, according to Kmiec. Fifty percent of respondents were between the ages of 35 and 55, which might have influenced the answers and the desires of potential employees.

“We think it’s a trend. We’ve seen that employees–how much they value benefits–is increasing,” says Barbara Nash, vice president of corporate research at Unum. “They’re learning more about it than they have in the past; they’re seeing that benefits are an important part of what they get from their employer.”

Significantly, 74% of those surveyed rated a good benefits package as being “very important,” which historically, has been equated to monetary value if the benefits are actually used.  People still need jobs, but beyond that, potential employees also want to have a financial safety net.

“The monetary value of a benefit isn’t realized until it is used by the employee. This ties to the employees’ perception of the benefit’s worth,” Kmiec says. “Since many benefits are only occasionally used, it is important that employees know what they feel is important, and that employers are clearly communicating the value of the entire compensation package (pay and benefits) to their employees.”

Unum also surveyed HR executives, of which 21% represented larger companies with 2,000 or more employees and 39% with fewer than 100 employees. About two-thirds of HR leaders said that employees and prospective employees are more aware of benefits, are asking more questions and take benefits less than a few years ago.

“They contribute a large chunk of the benefits budget and a truly caring HR department will insist this benefit be available,” Andes says.

New report – families paying more for health care

New report – families paying more for health care

The 2010 Milliman Medical Index (MMI)* has been released and shows that American families are paying more for their health care. The total medical cost for a typical family of four is $18,074 in 2010. That’s about $1,300 more than 2009. This is the highest dollar increase seen in the last 10 years since the index was created. While there are many factors to consider, the report reveals that these rising costs are largely driven by increases in the underlying costs of care.  

According to the report, “most of the hospital and physician cost increases identified in this year’s MMI have been driven by average unit cost, not utilization, which frames the effort to control costs.” Average unit cost reflects the negotiated charge for each service, as well as the mix of services delivered. This may be one reason the report suggests that “provider/payor negotiations will be more visible and intense in the reform environment and as regulators put more pressure on the premium rate-setting process.”  

Here are other key findings and observations:  

  • This year, there was an increase in cost trend for inpatient and outpatient facilities, and a decrease in cost trend for physician, pharmacy and other services.
  • Inpatient and outpatient facility services combined represent 48% of total annual medical costs vs. 47% in 2009. 
  • The largest dollar increase this year was for inpatient facility care, which increased by $498.
  • The 2009 to 2010 hospital inpatient annual rate of increase grew from 7.7% to 9.8%; most of the inpatient annual rate of increase is driven by “average unit costs.”
  • Although physician costs are the largest component of the overall health care cost pie, their 2010 annual rate of increase is lower than that of other health care costs components. 
  • There is large variation in health care costs across geographic regions. Costs vary from low to high by more than 35%, with the lower-cost areas generally being in the West and across some parts of the South.
  • At $10,744, the average employer’s share of the cost nationwide for the typical family of four now surpasses $10,000 for the first time. 
  • With reform now in place, some short-term reforms may shift costs further from employees to employers.
  • Despite passage of federal health reform, the underlying drivers of increasing health care costs are not expected to immediately change.   

For more details, take a look at the 2010 Milliman Medical Index.

*The Milliman Medical Index is published annually by the respected global actuarial and consulting firm Milliman Inc. to report total annual medical spending for a typical American family of four covered by an employer-sponsored PPO. The MMI looks at key components of medical costs and charts the changes in these components over time, including cost changes for employers and employees. The MMI also includes results for 14 major American metropolitan areas to demonstrate the variance in medical costs by region.

Automotive Repair Shops

Automotive Repair Shops

There are over 136,000 automotive repair establishments nationwide employing over 650,000 people.

CNA offers competitive pricing for automotive repair shops and will write BOP, Auto and Workers’ Compensation.

Other key features with CNA for this class include:

  • Mechanics Tools and Equipment Coverage
  • Garagekeepers Coverage
  • Hired and Non-Owned Liability with or without Physical Damage

Automotive repair classes include:

SIC Description
753201 Top, Body, & Upholstery Repair & Paint Shops
753202 Auto Upholstery Shops
753203 Automotive Dent Removal
753204 Automotive Detail Shops
753205 Automobile Body Repair
753302 Automotive Exhaust Systems Shops
753400 Tire Retreading & Repair Shops
753602 Automotive Glass Shops
753702 Automotive Transmission Shops
753901 Automotive Repair Shops
753902 Automotive Shocks & Struts Shops
754902 Automotive Lube & Oil Change Shops
754903 Automotive Rust Proofing

Travelers and OneBeacon will also write BOP and Auto for these classes.

Monoline Workers’ Compensation is available with the Hartford, ACE, AIG and Zurich.

Employers may experience higher costs and introduce Wellness programs

Employers may experience higher costs and introduce Wellness programs

With the passage of the Obama Health Reform two things are likely to occur: (1) most employers expect their health costs to rise due to PPACA; and (2) efforts to contain those costs will center largely on investment in programs for employee health and wellness, including both preventive services and disease management.

The February edition of the journal Health Affairs says:

“Amid soaring health spending, there is growing interest in workplace disease prevention and wellness programs to improve health and lower costs. In a critical meta-analysis of the literature on costs and savings associated with such programs, we found that medical costs fall by about $3.27 for every dollar spent on wellness programs and that absenteeism costs fall by about $2.73 for every dollar spent.

“Although further exploration of the mechanisms at work and broader applicability of the findings is needed, this return on investment suggests that the wider adoption of such programs could prove beneficial for budgets and productivity as well as health outcomes.”

As an insurance consultant for over 25 years, I am prepared to health my clients develop ongoing wellness programs for their workforce.  Engaging the employees to lead healthier lifestyles will result in lower health care costs.  Safeway with 200,000 employees engineered a wellness program years ago that has resulted in four years without any additional cost to the employer or employees where other companies experienced a 38% increase.

Anthem Blue Cross of California July 2010 “Small Group” Rate Change

Anthem Blue Cross of California July 2010 “Small Group” Rate Change

Since May of 2009, Blue Cross has had the follwing quarterly rate adjustments*:

  • July 2009 – 0%

  • October 2009 – 0% or slight decrease  

  • January 2010 – 4.0%

  • April 2010 – 4.7% 


July 2010 “Employee Elect”  

  • PPO 1.4%  
  • HMO 1.1%  
  • CDHP 5.2%  

EmployeeChoiceTotal 3.5%  

BeneFitsTotal 3.5%  


Total Average Quarterly Increase: 1.9% 

There will be no benefit changes to current Small Group Medical Plans.

*These rate adjustments are averages and will vary by plan and region. 

HSA Compatible Plans – Embedded vs. Aggregate Deductibles

HSA Compatible Plans – Embedded vs. Aggregate Deductibles

Most Qualified High Deductible Health Plans (QHDP) eligible for Health Savings Accounts (HSA) do not have the separate (embedded) individual deductible per person like conventional PPO plans.  Employees who just cover themselves are not affected by “aggregate” family deductibles, however those who cover any dependents should take a close look whether their health plan will require their family to meet the full family deductible before benefits are payable.  When given a choice, “embedded” deductibles provide better coverage for those covering dependents assuming all other benefits are the same.  Below is a list of California small group HSA compatible plans identifying whether they have embedded or aggregate deductibles.  I hope this helps!

Effective May 1, 2010

Embedded Deductible: 
Each covered family member only needs to satisfy his or her individual deductible, not the entire family deductible, prior to receiving plan benefits. 

Aggregate Deductible: For Family coverage, the entire Family Annual Deductible must be met before co- pay or coinsurance is applied for any individual family member.

MC HDHP $2000 80/50 - aggregate
MC HDHP $2500 80/50 - embedded
MC HDHP $3000 100/50 - embedded
MC HDHP $3300 80/50 - embedded

Blue Shield
Shield Savings Plan 1800/3600 - aggregate
Shield Savings Plan 2000/4000 - aggregate
Shield Savings QS 2000/4000 - aggregate
Shield Savings Plan 2250/4500 - aggregate
Shield Savings Plan 2500 - embedded
Shield Savings Plan 3000/6000 - aggregate
Shield Savings QS 3000/6000 - aggregate  
Shield Savings Plan 4800 - embedded
Shield Savings QS 4800 - embedded

Standard HSA 2000 - aggregate
Standard HSA 3000 - aggregate
Standard HSA 4000 - aggregate
Value HSA 1500 - aggregate
Value HSA 2500 - aggregate
Value HSA 3500 - aggregate
Value HSA 4500 - aggregate 

United Healthcare
Choice Plus Definity HSA 1500/80% Plan Z6-Q – aggregate
Choice Plus Definity HSA 2000/100% 5E-Naggregate
Choice Plus Definity HSA 2000/80% Q3-Maggregate
Choice Plus Definity HSA 3000/100% – 5E-Oaggregate
Choice Plus Definity HSA 3000/80% – 5E-Laggregate
Choice Plus Definity HSA 4000/80% – 5E-Maggregate
Rx 15/35/60 Plan - 0IV - Applies to all UHC HSA’s