Posts Tagged ‘Employee benefits package’

Shorter Work Days: Do they make sense for your business?

Thursday, March 30th, 2017

After a two-year government study on 6-hour work days that took place in Sweden, the results are in.  While employees proved to be happier, employer costs were higher.  Is the increase in cost worth it?

The study took place at the Svartedalens retirement home and was funded by the Swedish government. Employees went from 8-hour shifts to 6-hour shifts but were allowed to maintain their 8-hour salary.  Another similar facility participated as a control group by maintaining 8-hour shifts.  When compared, 68 nurses who worked 6-hour days took half as much sick time as those in the control group.  They were also 2.8 times as likely to take any time off in a two-week period.  In addition:

·       Employees reported higher energy levels and efficiency

·       Employees called in sick 15% less

·       Employees reported that their health improved 20%

·       Employees were 20% happier

·       Employees reported having more energy both at work and home

What about productivity?  Due to the increase in energy, the nurses working 6-hour days were able to do 64% more activities with the elders.  But although productivity increased, profitability decreased.  In order to allow the 80 nurses to work reduced hours, they had to hire 17 additional staff members.  Those new hires added $738,000 to payroll, which equates to a 22% increase.  They estimate that about half of that expense is offset by the reduction in sick time, time off, and unemployment.  While the experiment proved an increase in employee satisfaction and productivity, the added costs for additional staff need to be further analyzed.

Perhaps a 30-hour work week would be more successful in organizations where 24-hour coverage is not necessary.  There are several other experiments taking place in Sweden outside of the healthcare industry.  Final results are yet to come.  Brath, a Stockholm-based startup, has utilized 6-hour work days since its launch in 2012.  They argue that the shorter days have made them more successful than they might have been with 8-hour days due to an increased work-life balance.  “Our staff gets time to rest and do things that make them happier in life,” says CEO Marie Brath.  She also states, “Our work is a lot about problem solving and creativity, and we don’t think that can be done efficiently for more than six hours.  So we produce as much as – or maybe even more than – our competitors do in their 8-hour days.”

Although not the worldwide norm, France offers 35-hour work weeks.  In the U.S. work weeks average 47 hours.  However, several large U.S. companies have begun to experiment with reduced work weeks, such as Amazon.  Results remain to be seen.  Another U.S. company, SteelHouse began 2017 with an announcement that they will offer one 3-day weekend each month.  SteelHouse CEO Mark Douglas said that the next logical step after that will be going to regular 4-day work weeks.

A more common approach in the U.S. is a compressed work week, but with the same amount of hours.  For example, working 40 hours across four days.  According to a survey by Aon Hewitt, 30% of 1,060 employers surveyed offer a compressed work week.  60% of those surveyed offer flex time, which allows employees to set their own arrival and leave times.  This approach has been shown to be successful.  Research shows that when employees are allowed to have control over their work schedules they report lower levels of stress and burnout and report higher job satisfaction.

While 30-hour work weeks are not likely to become the norm anytime soon in the U.S., it does seem that flexibility in work hours will.  Be creative in your work week structure, and don’t be afraid to try new things.

Author: Heather Nezich, Manager of Communications American Society of Employers

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Pharmacies, Big Pharma, and Rising Prescription Prices

Tuesday, June 28th, 2016

The post below is a guest blog from Steve Byrd who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

Rising health costsA key trend among medical plans lately has been the move away from traditional pharmacy tiers. In the traditional model, generics — regardless of cost — reside under the least expensive copay tiers on your medical plan. In contrast, brand- name medications reside under the higher, more expensive copay tiers.  For many years this model was the norm, and most consumers became very familiar with it.  However, continued pressure to reduce cost has forced insurers to re-evaluate this traditional view.  It is expected by some, that by the year 2024, pharmacy costs will equal half of our overall medical costs.

Many brand name medications are coming off of their patents, creating opportunity for generics to evolve.  Traditionally, these generics have offered great savings over their brand name counterparts. However, many of generics are now entering the market at prices much higher than historical levels, creating new pressure on insurers to hold down costs.

In response to these increasing costs, insurers are re-evaluating their pharmacy tiering.  Generic medications are being treated no differently than brand name medications; These drugs are being tiered based on their overall cost regardless of their designation as a brand or generic medication.  Pharmacy pricing changes are catching many people off-guard.  They don’t understand why their generic medication, which used to be offered in a more affordable tier on, might now be Tier 3 or Tier 4 on their carrier’s formulary.  Consumers are having to work even harder to understand their carrier’s pharmacy benefits. They are having more direct conversations with their providers and pharmacists to try to minimize their out-of-pocket costs, which are increasing with no end in sight.

If insurance carriers are going to be able to offer competitive priced medical plans, gaining better control over rising pharmacy costs is critical.  Pharmacy expenses account for a significant portion the average person’s overall medical expenses, and both consumers and carriers are feeling the pain.  One insurance carrier is even suing its Pharmacy Benefit Manager for $3 billion over questioned pharmacy charges.

Fortunately for consumers, there are many new Rx tools popping up that can help members navigate their benefits. and are good examples. A recent Consumer Reports article provides additional guidance on ways consumers can save on pharmacy costs. Consumers also need to evaluate options at their local pharmacies, as they can often find some of the higher priced generics offered at lower costs through a local pharmacy’s prescription plan.

As healthcare spending continues to increase, and pharmacy costs continue to become a larger portion of the cost, more pressure will be applied towards controlling pharmaceutical costs. Consumers will continue to see changes to their pharmacy benefits and their carriers designated carrier’s prescription formulary.


Considering Voluntary Benefit Offerings As Part Of An Employee Benefits Package

Tuesday, June 18th, 2013

The post below is a guest blog from Jay Lowe, who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner, HCW Employee Benefit Services.

Blog 015 PictureAs the cost of providing benefits to employees continues to rise, an often underappreciated benefit employers can offer at little expense is voluntary benefits. These include such products as life insurance, dental insurance, critical illness insurance, vision benefit, disability income replacement coverage, and home owners/rental and auto insurance.


Voluntary benefits allow an employer to maintain a robust offering of services that enhances the overall package, while letting workers handle the total cost of benefits through their payroll deductions.


With voluntary benefits, employers can set themselves apart from competitors that offer only the traditional lines of medical coverage. Since many workers have indicated through several surveys (including some cited below) that they want a suite of benefits, voluntary benefits should be a popular item to implement. This can ease employees’ worries relating to future costs that may be incurred in these areas and shows them the value of their employment, thus serving as a strong retention tool.


The annual “Study of Employee Benefits Trends” white paper released by MetLife this year suggests that many employers nonetheless are failing to recognize the appeal of voluntary benefits and take advantage of them. With the exception of 20 percent who offered life insurance, at most only 10 percent of businesses with up to 499 employees surveyed offered any other voluntary benefits. At the same time, at least 26 percent of Baby Boomers and 38 percent of younger workers (Gen X and Y) said they were interested in each of those products even though they had to pay 100 percent of the cost.


The white paper reported that 38 percent of workers surveyed cited a choice of voluntary benefits as a factor that drives loyalty to their company. More than 50 percent of both younger workers and Baby Boomers said they would rather pay for benefits than lose them. The white paper noted that “Voluntary benefits … can serve to fill gaps and supplement employer-paid programs to provide a more holistic benefits offering.”


Another recent survey by Guardian Research discovered that participation rates in voluntary benefits have been climbing and will continue to increase, especially for non-dental and non-vision offerings. The study said that addressing the lack of perceived need for voluntary benefits has been and will continue to be the biggest opportunity moving forward for employers in this area.


These findings suggest adding voluntary benefits can be part of an effective employee recruitment strategy for employers, but several considerations need to occur for successful implementation. One is the wide variety of products available. Beside the voluntary benefits listed in the white paper, employers can provide additional lines such as supplemental life and dependent life, critical illness coverage, cancer coverage and hospitalization. Should any or all of these benefits be included in your package?


healthcare_industry_issuesAnother concern is making sure employees understand what the benefits involve. Employees frequently overlook voluntary benefit offerings during orientation and open enrollment because they are focusing on other tasks they consider more important, such as adjustments to their existing plans. If employees concentrate on other items than voluntary benefits when they are presented, chances are strong they will avoid taking full advantage of the products and programs. The time and money spent on presenting such benefits to employees will have been a waste for the employer.


When selected and presented properly, voluntary benefits are a great way for employers to enhance their traditional lines of coverage at little or no cost to the company’s bottom line. There are convenient, web-based enrollment tools which provide a simple, quicker enrollment and reduce costs and free up time to focus on running the business in the process. The process serves as an effective recruitment and retention tool in attracting and maintaining top talent in the organization.


From an employee perspective, the ease of purchasing these types of products via payroll deduction can be a great benefit. The simplicity of accessing this protection at the workplace avoids wasted time by the employee looking for this coverage during their free time.


Employers should be cautious and limit the lines of coverage when initially launching these benefits.  Gauge employees’ interest in the proposed products before deciding what coverage to offer. Employees who believe programs are of limited value in what they can buy likely will not participate in them. Identify employee needs and interests, and match product options to them to produce better results. Involvement in voluntary benefits is particularly crucial for smaller employers, as minimum participation percentages or signup of enrollees may be required in order for the plan to take effect.


It’s important to consider your communication methods around these benefits as well. For effective communication of voluntary benefits, provide information beyond orientation and open enrollment sessions. Send out emails, put up flyers, devote special meetings to provide an overview and answer questions. Talk about the voluntary benefits year round. Help employees fully understand and appreciate what voluntary benefits do for them and how they are relevant.


One final key consideration is making sure that any voluntary benefit offering supports and integrates with the core health and welfare strategy. This is another area where HCW consultants assist in ensuring alignment with your organization’s entire benefit strategy.