"Insurance Explained” Jenny Foster, CIC

1. "Insurance Explained” Jenny Foster, CIC

2. Speaker Bio Jenny is the Senior Employee Benefits Advisor and Human Resources Manager for EHL Insurance, headquartered in Poulsbo, Washington. She joined the agency in 2002 and holds her Certified Insurance Counselor (CIC) designation and is a licensed agent and broker in Property and Casualty and Life and Disability. Jenny has a Bachelor of Science in Physiological Psychology from the University of California, Davis. Her focus is helping clients obtain and retain the very best employees and ultimately improving her client company’s profits. She is most passionate about employee education. “If employees do not understand their benefits, how can they value them?” An active member of our community, Jenny has served on the board of her local SHRM chapter. She enjoys creative writing, traveling, walking, shopping, and serving in her local church. Jenny lives with her husband, two girls, and eccentric Japanese Shiba Inu, Charlotte. Jenny can be reached at (800) 929-1669 ext. 8170 or jenny@ehlinsurance.com.

3. House Keeping • Musical stretch breaks every 20-30 minutes • Candy throwing (hold harmless agreement) • Late return policy following breaks • Participation increases everyone’s fun and ability to learn and retain information • Interruptions are encouraged

4. Let’s Get It Started…! • Post it note participation exercise • Introductions (time permitting) • Health plan quiz (prizes)

5. Tough Statistics 23.6 million children and adults in the United States (7.8% of the population) have diabetes. Total costs of “diagnosed” diabetes in the United States in 2007: 174 billion. Nearly 7 out of 10 office visits in the U.S. result in a prescription being written.

6. It’s A Jungle Out There! • High toll of cancer on our nation • Death rates for cancer of the pancreas, esophagus, thyroid and liver are increasing. • An estimated 14% of cancer deaths in older men and 20% in older women can be attributed to excess body fat.

7. It’s A Jungle Out There! • Currently more than 64% of U.S. adults are either overweight or obese, according to NHANES. • Fruit and vegetable intake is not increasing. Red meat and fat consumption are not decreasing. • Average 20% increase in employer’s portion of group health plan premiums since 2005.

8. Average Health Insurance 2005-2010 $1,284Worker Contribution Increase $13,770 $10,880 27% 47% 20% Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005-2010.

9. It’s A Jungle Out There! • Confusing health care reform legislation • Increase in stress-related diseases • National unemployment rate still 9.6% • Average litigation verdict for Chelan County, Washington in 2009 was $350,000.

10. The Cost Of Hiring The “Wrong” Employee • What is the true “cost” to your company? • The lazy employee • The dressed up resume • The Waffle • Mr. Do Nothing • The Folder • Mr. Conspiracy Theory • Best way to avoid hiring the “wrong” employee? • Have a clear, consistent, written hiring process!

11. The Cost Of Hiring The “Wrong” Employee • The WRONG employee will: • Create a negative work environment • Sue your company • Harass/discriminate against other employees • Quit at the drop of the hat • Inappropriately file for unemployment or workers compensation

12. The Cost Of Hiring The “Wrong” Employee • The RIGHT employee will: • Create a positive work environment • Improve profitability • Empower coworkers • Build customer loyalty • Work in a safe manner, lowering insurance costs

13. The “Right” Employee • High cost of retaining the “wrong” employee. • High cost of losing the “right” employee! • What if they are a key employee? • What if they take other key employees with them? • What if they go to a competitor? • How do we KEEP the right employee?

14. How To KEEP The “Right” Employee • Maintain some type of employee benefits program that is well understood and valued by employees. • 74% of covered employees regard health benefits as an important factor in their loyalty. • Even in these economic times engineers at Google are still allowed to allocate 20% of their time to projects of their own choosing.

15. The Importance of Employees “Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.” - Jack Welch (former CEO, General Electric) “We want passion for our business... workers who can interpret and execute our mission, who want to build a career, not just take a temporary job.” - Howard Schultz (CEO, Starbucks and Seattle SuperSonics)

16. Break Time! When we return… Employer Trends

17. General Employer Trends • According to this year’s Kaiser Family Foundation study, 69% of companies reported offering health benefits (up from 60% in 2009). • 43% to 60% of organizations are already using an HDHP (to include focus on HSA bank account). • Ten million Americans are now covered by HDHP/HSA plans, an increase of 25% since 2009. 

18. General Employer Trends • 25% of covered employees have a deductible of at least $1,000. • The average annual premium for family coverage is running at $13,770 (a 114% increase since 2000). • 51% of workers with family coverage pay more than 25% of the cost of premium.

19. General Employer Trends • Weight loss program • Gym membership • Smoking cessation • Personal health coaching • Healthy living classes • Web-based resources • Wellness newsletter • Health Risk Assessment • 78% of covered employees have plans with 3 or more tiers of pharmacy cost sharing. • 74% of employers offering health benefits offer at least one of the following wellness components:

20. Employee Benefits Relevant To Retention? Workplace benefits have remained resilient despite the recession. 53% of employers report controlling benefits costs as their top objective. Employee retention (formerly first concern) is still second most important employer objective.

21. Employee Benefits Relevant To Retention? Employees are more satisfied with their benefits than at any time since 2007. More than 35% of employees are prepared to shoulder more benefits costs to keep benefits they value. Of employees satisfied with their benefits, 81% say they are very satisfied with their jobs.

22. Employee Benefits Relevant To Retention? 69% cite high benefits satisfaction as a key reason to stay with their employer. The average worker loses 115 productive hours a year due to poor health (cost: $250 billion/year). 59% of employees who participated in company wellness programs said the programs were effective at improving productivity.

23. Stretch Break Time! When we return… Retention Strategies

24. Retention Strategies Retention begins with an exceptional hiring process. What culture do you want to have that keeps people from leaving? Employee Benefits are only as limited as your imagination! Happy Hour is 9 to 5 book

25. Retention Strategies Flexible work schedules Worksite fitness or wellness programs Employee Benefit Statements (Total Comp) Employee Assistance Programs (Chevron Corporation saves $7 for every $1 spent on its EAP) Health Advocacy

26. Retention Strategies Education and training Clear communication Approachable supervisors/managers Involvement in decision-making process

27. Retention Strategies Work-Life Programs can boost both loyalty and productivity. Employees and employers report similar conclusions. “Many companies have long contended that stress in the home causes productivity loss in the market place...and it does. But research now reveals that stress on the job causes stress at home. In other words, they feed off each other.” Zig Ziglar

28. Retention Strategies Gift cards & incentives (know your employees; $10 to $200) Free parking and other perks Company discounts Cisco is one of the nation’s largest providers of on-site child care with over 800 children enrolled, and parents can track their kids via computer.

29. Retention Strategies Employees want help with their retirement Maximize employee education! “Life is full of uncertainties. Future investment earnings and interest and inflation rates are not known to anybody. However, I can guarantee you one thing.. those who put an investment program in place will have a lot more money when they come to retire than those who never get around to it.” Noel Whittaker

30. Retention strategy group activity • Please form groups and take 2-3 minutes to discuss: • What/if any of the retention strategies we discussed are you using at your company? Are they working? Why or why not? • What is one retention strategy we discussed today that you might consider implementing? Why? • As a group write down one retention strategy you came up with as a group not presented today (be ready to share it with the group).

31. Break Time! When we return… Leveraging Employee Education “Always treat your employees exactly as you want them to treat your best customers.” - Stephen R. Covey

32. Leveraging Employee Education Think about how you scored on our health plan quiz. • How many questions do you answer each day/week/month related to your employee benefits? • How much time does this take from revenue focused work? • How much do you think this costs your firm annually? • What if there was a low cost/no cost solution? • What do your employee benefits meetings look like? • How often do you have them? • What is employee feedback? • What do you think your employees would score on a health plan quiz?

33. Leveraging Employee Education Low cost or no cost! If employees understand their benefits; they value them! Harris study: only 29% of employees reported their benefits education was excellent or very good in 2009.

34. Leveraging Employee Education Highly engaged employees are 26% more productive. How you communicate your benefits are as important as what they are. Employees who believe their benefits were clearly communicated are more likely to feel their employer values their work and well-being.

35. Leveraging Employee Education Employ a 3+3 strategy to benefits education. 3+ weeks and 3 ways to learn (visual, auditory, tactile) Effective benefits communication contributes to a sense of financial security for employees. 3 + 3

36. Employee Benefit Surveys What employee benefits are most important to you? Medical Dental Vision Life Disability EAP FSA HSA

37. Employee Benefit Surveys What other benefits would you be most interested in? Wellness

38. Signing Of The PPACA “How we might help the American people deal with costs, coverage, insurance, these other issues. And we might surprise ourselves and find out that we agree more than disagree. And that would then help to dictate how we move forward. It may turn out on the other hand there’s just too big of a gulf.” — President Obama

39. The Chips Are Still Falling We basically know what the problems are, all of us. We basically know that the current system is unsustainable.“– SenatorMax Baucus, D-Montana “People are angry. We promised them change in Washington,” - Senator John McCain, R-Arizona "If you think they want a government takeover of health care, I would simply submit you’re not listening to them.” - Representative Paul Ryan, R-Wisconsin

40. Health Care Reform

41. Health Care Reform

42. What Is An HSA? I N S U R A N C E A High-DeductibleHealth Plan (HDHP) B A N K A C C O U N T Tax-FreeIRS Qualified Checking Account(HSA)

43. Typical HSA Plan Deductible waived for preventive care No copay. Office visits (“talking”) subject to deductible. Procedures subject to deductible (“doing”) Key preventive benefits (deductible waived): Routine care Prenatal care Pap smears Mammograms Childhood immunizations Cancer screenings

44. Typical HSA plan $2,500deductible for an individual ($5,000deductible if enrolled with dependents). $2,500out-of-pocket maximum(capped at $5,000for a family) 80% (in-network); 50% (out-of-network) plan Worst case scenario: $2,500 deductible + $2,500 out of pocket = $5,000 $5,000 deductible + $5,000 out of pocket = $10,000 Refer to contract booklet for details. Out-of-Network benefits reduced.

45. Prescriptions & HSAs Prescription drugs are subject to the deductible. Once deductible is met prescriptions are covered at 80%. Once coinsurance (out of pocket maximum) is met: 100% Rx coverage!

46. Truly A Legal Tax Shelter? You can contribute to your HSA bank account via pre-tax payroll deduction. The IRS allows you to tax shelter up to $3,050 per individual per calendar year and up to $6,150 if enrolled as a family (combination of company and employee contributions). Employees need to keep all receipts, as this is an IRS regulated benefit.

47. HSA Tax Implications

48. Traditional vs. HSA plans

49. Words Of Wisdom “In the end, all business operations can be reduced to three words: people, product and profits. Unless you've got a good team, you can't do much with the other two.” -Lee Iacocca

50. What about dental? • Unless perceived as a benefit by employees, dental ROI may not always pencil out. • 83% of employees reporting excellent dental health visit a dentist every six months or more. • 64% of employees who say they have good dental health also report better overall health.