BENEFITS AGENCY

Gregory & Appel focuses on the human element

Employee benefits, wellness, and human resources consulting are value-added services

By Len Strazewski

Employee benefits count—and employers spend more time than they like counting up the steadily increasing costs of group health insurance. Making sense of the numbers, however, is just the first step in building an effective employee benefits strategy, say the executives of Gregory & Appel Insurance, Inc., in Indianapolis.

At Gregory & Appel, employee benefits and related services such as wellness and human resources consulting are an important component of the agency's "deliverables" to its clients, says President Dan Appel. And the agency delivers much more than a package of benefits products to its clients, he says. It delivers a strategy.

"Employee benefits are one of our core competencies," Appel explains. "It is a key strategic part of our deliverables to our clients. As in our property/casualty insurance practice, we take a consultative approach to employee benefits and focus on helping our clients understand their specific issues and build a strategy that meets their business needs."

The demand for strategy, structure and financing plans is particularly intense now as clients struggle to comply with evolving health reform legislation, Appel says. "As we implement the changes to meet what we think health reform will look like, our clients want to integrate a financial strategy that will meet their financial goals as well as comply with new regulations.

"They want much more than a general outline. They want a plan that is designed specifically for their company," Appel observes.

Gregory & Appel was founded in 1884 and is in the fifth generation of family leadership. It is the oldest independently owned agency in Indiana. Presently 28 employees share in ownership.

The agency has about 110 employees, including 28 in employee benefits and human resources-related services. Appel estimates that about 35% of revenues will come from employee benefits in 2011. He says benefits revenues have been growing steadily, but the agency has not set a specific target for employee benefits growth.

Senior Vice President Sherri Alexander is employee benefits department manager. She has more than 30 years of experience in employee benefits, is a Certified Employee Benefits Specialist (CEBS), and is a local leader in the group health insurance market, sitting on the United Healthcare and Anthem advisory boards.

Alexander joined the agency six years ago, leading the firm to triple the employee benefits service staff, quadruple employee benefits revenues, and dramatically increase the range and sophistication of services available to clients.

"The agency has been in the employee benefits business since the mid-1980s," she says, "but the service existed primarily as an accommodation to the property/casualty insurance customers who needed an agency to market their group health insurance renewals."

The next level

As health cost issues became more complicated, the agency realized the need for more sophisticated strategic approaches to employee benefits management. Alexander brought the agency both financial expertise and a commitment to claims analysis and financial modeling techniques.

Alexander says that actuarial analysis of claims patterns helps clients identify external reasons for increased costs and develop solutions, including more sophisticated plan designs as well as increased use of full and partial self-funding and stop loss insurance, high-deductible health plans and other cost control techniques.

"High-deductible health plans have really caught on," she says, and an increasing number of clients have implemented health savings accounts (HSAs) and health reimbursement accounts (HRAs) as a platform for engaging employees in responsible health consumerism.

The agency conducts its own underwriting analysis, providing a baseline for employer cost estimates and employee contributions, Alexander says.

Gregory & Appel also continues to develop and expand its expertise, she notes, and has recently become part of the national Benefit Advisors Network, which conducts monthly Webinars on health reform and compliance issues and provides additional health care and pharmacy benefit consulting services.

The agency also partners with Agelity, Inc., in Melville, New York, a pharmacy benefit manager that provides discount prescription drug programs, and Zywave, Inc., in Milwaukee, Wisconsin, which operates the Mywave Select client benefits portal.

Health plans in the Central Indiana area include Advantage Healthcare Solutions, Anthem, CIGNA Health, and United Healthcare, and, more recently, Aetna Health as a third-party administrator.

Voluntary benefits

Gregory & Appel also supplements group health benefits with a wide range of voluntary products, many of which are available at group discounts and with guaranteed issue underwriting. The recessionary economy drives interest in voluntary benefits as employers search for ways to contain costs and employees seek benefits that can survive job changes.

"Employers are looking for pennies under rocks—any way they can reduce costs without totally dismantling their employee benefits plans," Alexander says. "Voluntary benefits programs provide employees with a way to purchase the benefits they believe they need in an economical and efficient way."

Alexander says employees are attracted to voluntary benefits because of their stability. "Employees are concerned that if they lose their jobs, they will lose all of their benefits. Voluntary benefits stay with workers even when they leave employment, so they are happy to have something they can take with them when they leave."

Gregory & Appel's voluntary benefits include individual term and whole life, short- and long-term disability, critical illness and cancer, accident, dental and vision, long-term care, prepaid legal, and pet insurance.

The agency provides benefits counselors to meet one on one with employees and prepares individual benefit statements for program participants. The agency can also develop employee needs surveys to help employers structure voluntary programs.

Wellness programs

Wellness programs have become important strategic resources for Gregory & Appel clients, Appel says. The agency developed its own internal wellness program as a model for its clients and is preparing to launch a branded proprietary wellness system later this year.

Appel notes that while many agencies promote wellness programs as a way to reduce group health claims costs, Gregory & Appel perceives wellness as part of a comprehensive strategic approach to reducing overall costs and improving productivity.

"What many firms are introducing as wellness in the context of group health insurance is not unlike what we have been doing for many years in our workers compensation practice, as we focus our clients on better workplace safety, healthier and more productive employees," he says.

Karl Ahlrichs is an employee benefits consultant at Gregory & Appel and is a wellness enthusiast. "Wellness has really evolved as a concept in the past few years, and what we are promoting could easily be called 'Wellness 2.0,'" he explains.

Most wellness programs have focused on incentives, "the carrot that rewards healthy behavior," Ahlrichs says. "The problem with these programs is that they have generally attracted the healthiest employees, who are least likely to be the drivers of high claims costs."

More modern wellness programs are focusing on behavioral change, targeting workers with the greatest probability of developing long-term health problems and expensive health care needs. "The goal is to get participants off the couch and into regular exercise. However, experience shows us that the motivation to change behavior is complicated and not easily understood. One size does not fit all,"Ahlrichs says.

For example, Gregory & Appel recently implemented a pedometer program for its employees that allows workers to measure their increase in walking exercise. The program was successful, Ahlrichs says, and after 18 months the participating employees showed a measurable improvement in health and fitness.

What made the program successful was a combination of the latest technology—wireless pedometers that eliminated self-reporting and captured movement data—and effective programming and communication with tangible incentives.

"We used virtually every channel of communication: Web, print, video, posters. We organized group lunch walking and other programs. What we have learned is that wellness works best when it is real and face-to-face and when you get something for it," Ahlrichs declares.

The agency's program has become a helpful model for clients, he says. "We do it ourselves. That speaks volumes."

More than half of Gregory & Appel's clients have implemented active wellness programs, Ahlrichs says, and they are actively tracking progress. The agency also sponsors regular roundtable discussions among client chief financial officers, who compare notes and share successful techniques.

HR consulting and education

Human resources consulting is another key component of the agency's employee benefits practice, Appel says. The agency retains a human resources consultant and sponsors a regular series of seminars on HR topics.

 In 2004 Bob Miller joined the agency as vice president and senior consultant in human resources, and he is available to clients with human resources compliance issues. Miller is a Certified Senior Professional in Human Resources and a Certified Compensation Professional. He is also a member of the National Health Underwriters Association.

Education is another value-added service that Gregory & Appel delivers. The G&A University seminar series is designed to augment clients' training and educational initiatives. Recent topics include compliance issues, compensation, safety and wellness approaches, benefits benchmarking, and benefits financial analysis.

For clients who need retirement benefit services, Gregory & Appel provides referrals to strategic partners that can consult on defined contribution and defined benefit programs and executive deferred compensation plans.

The author

Len Strazewski is a Chicago-based writer, editor and educator specializing in marketing, management and technology topics. In addition to contributing to Rough Notes, he has written on insurance for Business Insurance, Risk & Insurance, the Chicago Tribune and Human Resource Executive, among other publications.