Benefits Planning Presents Challenges

Employee benefit planning for many businesses can be the most stressful part of running the business, especially for smaller practices. Many facility owners do not even know if they can or should provide an employee benefits program.

David Peasall, SPHR, FrankCrum human resources director, provided tips for O&P facilities of any size to design a successful benefits program for employees.

The Affordable Care Act (ACA) has changed requirements for businesses offering health insurance and benefits, Peasall said.

“Much of the higher cost is because of increased federal requirements to offer certain services in the health plan as well as new taxes to pay for expansion and regulatory changes,” Peasall told O&P News.

Hire a specialist

“Knowing how to pick plans and then manage them in our ever-changing and complex regulatory environment is something that should be left to one who is licensed, certified and very familiar with it,” Peasall said.

Hiring a professional to deal with health insurance and benefits will allow the business owner to stay focused on patient care.

He explained if an O&P facility owner wants their practice to expand or just remain stable, they need to hire an established, reliable specialist to deal with employee benefits and compensation.

Peasall said, “Employee benefits are highly complex and regulated so it is imperative that an O&P office seek a qualified specialist.”

Office size does not matter

Peasall believes the key to success for a small business is behaving like a large office. O&P practices of any size should provide employees with health insurance, he said.

David Peasall, SPHR
David Peasall

“Do not consider whether to offer benefits based on the office size,” Peasall said. “Instead, think about the benefits from the perspective of the employee and the employment options they have to choose from.”

In order to attract and retain the best talent, Peasall said offering a “robust compensation package” is vital for all businesses.

Health insurance is a major concern for employees and historically is part of the employment relationship, according to Peasall.

“Do business owners want to compete for being able to hire the best? Of course they do,” he said. “That leads business owners to realize they must offer a competitive compensation package, regardless of size.”

Retain and motivate employees

Peasall said a multifaceted approach with rich benefits is required if O&P practices want to attract and retain the best talent.

“It is frequently reported that the number-one reason an employee leaves an employer is because of the manager they do not want to work for,” he said. “This is the multifaceted part.”

Peasall said business owners need to pay very close attention to managers and the way they lead employees.

“Additional paid time off can be awarded; additional compensation can motivate; recognition programs need to be in place,” according to Peasall. “Training needs to be an integral component and communication to employees can never be too much.”

For one O&P practice, hiring bonuses may be helpful, Peasall said; for another, longevity awards might make more sense.

Many O&P practices have key employees whom they wish to reward with special perks. The ACA is making changes to this type of program to prevent discrimination, Peasall said, so employers should stay informed about rules and regulations.

“It is very important that the benefits package not create illegally discriminatory practices and employers must be aware of protected classes as they determine how they want to compensate certain key players,” Peasall said.


Benefit cost factors

When looking for the right benefit carrier, Peasall said, O&P facilities need to seek guidance from a benefits professional who is honest, established, knowledgeable, helpful and service-oriented; has references; and takes ownership of mistakes.

“It is not so much about the particular benefit because we all have the same general benefit options to choose from,” he said. “It is all about the service that comes along with it.”

Factors affecting cost include plan richness, employee participation, utilization, drug coverage, services required and ACA taxes.

“O&P employers need to be prepared to contribute a large amount toward health insurance to have a high level of participation and avoid adverse selection,” Peasall said.

Peasall describes adverse selection as a situation in which employees with poor health enroll in a health plan because they need it, but employees who consider themselves to be “well” do not enroll because paycheck costs are high.

“The paycheck cost for the employee has to make sense for them to enroll [in a health plan],” he said.

Final words of wisdom

Peasall said trying to keep benefit costs low is difficult due to the fact that employers cannot control the health of employees or their families.

“Employers should consider supporting healthy lifestyles by promoting the carrier’s health programs and services that address personal issues,” he said.

Peasall suggests employers can let employees know about healthy non-work activities, including 5K walks or runs and blood drives.

Small O&P offices can seem larger and more stable by having a vast variety of benefits compared with a small O&P facility only offering employees a few benefit options.

“The facility’s image, as it appears to the employee, should not be underestimated,” Peasall said. “There is much more involved in having a strong employment relationship than just competitive pay.” – by Monica Jaramillo

Disclosure: Peasall reports no relevant financial disclosures.

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