CAPITALIZING ON BENEFITS
Small town firm has big employee benefit standards
Team effort in benefits department produces one-third of P-C agency's revenues
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Bill Shock, CBC, Executive Vice President of Unland Companies (standing) with the agency's benefits team (seated from left): Bonnie K. Eeten, Benefits Consultant; Travis Shock, Agent; Patti Thornton, Account Manager; Shannon N. Jones, Account Manager; and Laura Maas, HR Solutions Manager. |
By Len Strazewski
Small employers in generally rural markets are not necessarily easier to manage than their larger company competitors. Most small employers still compete for the top employees in their industries and strive to provide the employee benefits that allow them to recruit and retain the best in their fields.
So don't expect them to be less of a challenge for your agency, says Bill Shock, executive vice president and director of the employee benefits division of Unland Companies in Pekin, Illinois, a Central Illinois community near Peoria, an industrial center, anchored by Caterpillar, Inc.
"We have a robust small employer market in our region, with many companies providing outsourcing for Caterpillar," he explains. "That means we must provide for the full range of their needs with commercial property/casualty insurance, workers compensation insurance and comprehensive benefits programs that are generally comparable to Caterpillar, the largest employer in the area."
As a result, the agency needs to offer multiple benefit options and managed care networks that correspond to industrial rather than rural industry benchmarks and are aligned with popular regional medical providers.
"Managed care has become increasingly complex for employers. We have a well-developed medical community in the area with several established hospital groups providing managed care markets," Shock says. "So it is important that we function not only as an agent for the health plans but also as an asset or resource for the employers to assist them in negotiating price and network participation and managing their benefit changes as they occur.
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-BILL SHOCK |
"We are a holistic unit. We try to be whatever our customers need us to be to manage their benefits offering and lead them to the next step in their benefits development," he says.
The agency has deep rural roots in central Illinois, reaching back to 1941 when founder J. Logan Unland opened the first office in Pekin, Illinois, to sell fire and casualty insurance to farmers and small business owners in and around the Peoria business center.
Shock joined the agency in 1989, merging his independent employee benefits agency with Unland to provide a new dimension to the agency and provide full service to the small business customer base.
"We decided we would do our best to stay out of each other's way," Shock says about the commercial property/casualty producers who had become his new colleagues. But the group quickly turned into a cohesive team that promoted an employer-centered approach to full service and powerful cross-selling.
Today the agency has about 35 employees in three offices, including locations in East Peoria and Macomb, home of Western Illinois University. While all agency producers contribute to employee benefit sales, the agency has one full-time benefits producer, a voluntary benefits and enrollment specialist, two account managers and a human resources specialist.
Benefits services account for about one-third of agency revenues, and the agency works with a healthy and competitive group health insurance marketplace that includes BlueCross/BlueShield of Illinois, Humana, Coventry Health (owned by Aetna), Health Alliance and United Healthcare. Financial services, which include the firm's retirement practice and personal lines, account for an additional 10%.
Clients range in size from 2 to 400 employees, but the bulk of employee benefits customers are small to medium-sized employers and public entities with 50 to 200 employees.
The agency provides a wide range of benefits products and services, including group and individual health insurance, insured and self-insured benefit plans with stop-loss reinsurance, long- and short-term disability insurance, personal and group life insurance, personal and group dental insurance, defined contribution retirement plans, long-term care and supplementary medical benefits and voluntary personal property/casualty insurance paid through payroll deduction.
The agency also has a thriving specialty in public entity benefits plans, notably small school districts and a human resources specialist to provide client support for compliance concerns under various state and federal laws, including the Patient Protection and Affordable Care Act, the Family and Medical Leave Act, Occupational Safety and Health Administration regulations and internal human resource management policies.
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"We like to set the group meetings and, if possible, get everyone there so we know that the benefits plan and its options are communicated accurately and thoroughly."
—Shannon Jones |
With the advent of health care reform, employee benefits strategies are becoming more complicated than ever, and even though employers will be offered the option of withdrawing from providing health benefits, most will not.
"Group health benefits have been too big for too long," Shock says, and employers realize that their employees have come to expect their companies to provide health benefits. Maintaining competitive benefits will be critical to positive recruitment and retention.
But he does anticipate some change. Among them, Shock says, section 125 cafeteria benefits plans that allow employees to choose to apply their personal benefits accounts to a range of benefits have found new popularity in an era of financial and regulatory uncertainty.
Popular in the 1970s and 1980s, section 125 plans have been resurrected as "employee-defined contribution model" benefit plans that allow employers to stabilize their benefits spending and allow employees to build their own customized benefit plans from a list of options that can include various group health plan designs with choices of deductibles and ancillary benefits that can be chosen to meet needs of individuals or families.
In a small agency, account managers are the cornerstone of the employee benefits division management, Shock says. And as benefit plans become more complex, their expertise and problem solving will be needed more than ever.
Not only do the Unland account managers work directly with clients on their enrollment, claims and eligibility activities, they provide technical expertise for producers whose specialties are commercial property/casualty insurance.
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"We become an extension of the human resources department helping employees maneuver through the system."
—Patti Thornton |
"We don't have a lot of producers," notes Account Manager Patti Thornton. "So while the producers make the initial contact with clients and maintain the overall relationship, the account managers must manage the client information and the day-to-day needs."
Once the producers bring in the "Factfinder" application and the details of the employee census, the account managers "scrub the application," make sure that all relevant information has been provided that can shape rating and the agency's proposals for a benefits strategy.
The account managers then prepare a spreadsheet of options and pricing, Thornton says. "Most employers offer at least a dual option these days, including a Preferred Provider Organization (PPO) plan and a Health Savings Account (HSA). Some employers also offer a Point of Service (POS) plan that provides incentives for staying in a chosen managed care network."
Many employers self-fund a portion of health benefits, she adds. New "aggregate only" stop-loss coverage allows employers with as few as 10 employees to gain some of the administrative and financial benefits of self-funding.
After the strategic decisions are made and the coverage placed, the account managers become the day-to-day managers and troubleshooters of the relationship, working with both employer managers and individual employees.
"We become an extension of the human resources department helping employees maneuver through the system," Thornton says.
"Yes, we hear it all," adds Shannon Jones, another account manager. "Billing issues, claims problems, every change in dependent information that needs to be communicated to the insurers. We help them work through the network providers, identify new doctors and help them make choices about their health care benefits."
Some of these tasks might be left to the insurers, she notes, but many employees don't have confidence in the insurance company administration. "They can't always make sense out of what they hear from the companies. They feel the insurers don't speak to them; they talk over them."
Jones says the account managers provide a higher level of confidence and oversight for client employees. "We do whatever it takes to get the best possible outcome," she says.
Unland also tends to manage its own enrollment process for customers, Jones says. "We like to set the group meetings and, if possible, get everyone there so we know that the benefits plan and its options are communicated accurately and thoroughly. We can explain the plan design and manage the expectations under any changes."
The account managers also communicate special features. Though many of the Unland clients aren't large enough for big, comprehensive wellness programs, many are implementing wellness options available from their group health plans, such as the Humana "Vitality" plan, that provides some incentives for healthful lifestyles and activities.
"If an employer is going to implement a wellness program, it is very important that the employees see the benefits of the wellness activities. We want them to become engaged in the program, not just to reduce their employer's costs, but to adopt healthier lifestyles," Jones says.
Education is also an important factor in building and maintaining client relations, Shock says. The agency's Employer-to-Employer (E2E) seminar series focuses on a wide range of compliance and design, including, earlier this year, the Patient Protection and Affordable Care Act.
The February seminar featured a local employee benefits attorney, a health care industry consultant and agency employees, exploring the challenges of the new legislation, including how to determine which employees would be eligible for benefits under the law, the role of state exchanges in providing coverage, and availability of subsidies for individuals and small businesses.
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