Retirement
Our company doesn't have an Investment Committee. Do we need one?
What should we tell our participants, if anything, about investing in economic downturns?
We are satisfied with our current retirement vendor's service. However, we haven't surveyed the market in many years. We would like to stay with our current provider, but also want to ensure we are performing due diligence. What do you recommend?
I want to talk to someone about retirement plans. Who should I contact?
Pharmacy
What is Ascendent® and what can I gain from joining?
What is a Notice of Creditable Coverage?
Can you assist with Class Action Lawsuits?
Should we structure our pharmacy benefits with a separate tier for specialty drugs?
I want to talk to someone about pharmacy plans. Who should I contact?
Communications
What are the benefits of developing an HR brand?
How often should we send communications to our employees?
Why should I provide employees with Total Compensation Statements?
I want to talk to someone about communications. Who should I contact?
Global Solutions
We have a small office in Calgary, but have not set up a Canadian benefits program. From a competitive standpoint, is it necessary that we do so?
We have six employees who work in various international locations. We have experienced occasional claim service issues when international medical claims have been submitted to our health plan. How many international assignees do we need to have before we consider an international health plan?
How can we benchmark our international health plan against what other companies are doing?
I want to talk to someone about global solutions. Who should I contact?
Retirement
- Our company doesn't have an Investment Committee. Do we need one?
A: According to the Employee Retirement Income Security Act (ERISA), Plan Sponsors have an obligation to make prudent choices when selecting investment funds to offer in defined contribution plans. Many Plan Sponsors believe that decision by Committee is a good way to make prudent decisions because multiple perspectives are involved in the decision, and it reduces the potential for conflicts of interest to sway decisions. - What should we tell our participants, if anything, about investing in economic downturns?
A: It is important to understand the difference between educating participants and advising participants. As long as you provide facts about investments and do not recommend particular investment funds, you will generally steer clear of engaging in advising participants. Historically, it is true that investors who held onto their investments during market downturns had better end results than those who moved from equities to cash investments during the downturn and then tried to get back in at a later time. If you move out of equities, the problem is knowing when to get back in, and investors have historically not made that decision well. There is no doubt that the downturn of 2008 is the worst that most of us have experienced. It is also broader in its' impact as people are feeling the decline in housing prices, reduction in available credit, and employment insecurity. It is also important for participants to know that they have to be comfortable with their investments. With all of the other concerns to worry about, the last thing anyone needs is to lie awake at night wondering about retirement investments. This message informs participants that in the past staying put was a good strategy, while it also gives them the freedom to make changes to their investments without guilt if they are uncomfortable with taking no action.Your retirement service provider might also have tools or information available to help inform participants. Or, your service provider may be interested in coming out for on-site employee meetings. Communicating messages that you think are important in a variety of ways is always a good strategy. There is no such thing as overcommunication when attempting to reach participants.
- We are satisfied with our current retirement vendor's service. However, we haven't surveyed the market in seven years. We would like to stay with our current provider, but also want to ensure we are performing due diligence. What do you recommend?
A: It is great to hear that you are happy with the service provided by your current vendor. Seven years is a long time to pass without surveying the market. We recommend checking the market every 3-5 years. Since you are pleased with the service you currently receive, you might think about engaging in a Request for Information (RFI) instead of a Request for Proposal (RFP). RFIs are scaled back versions of RFPs, and they send different messages to your current provider and to the market. An RFI tells your current provider that you would like to stay but need to check the marketplace for information on fees and services. It gives you a chance to make sure your fees are in line with the current market and that you are receiving all of the latest features and services. It is a good way to perform due diligence to ensure that participants receive good service at a reasonable cost while limiting the effort on your part. - I want to talk to someone about retirement plans. Who should I contact?
Rob Massa
rmassa@ebenefitsolutions.com
713.629.9666
Pharmacy
- What is Ascendent® and what can I gain from joining?
A: Ascendent® is a collective purchasing platform designed for middle market employers that allows them to gain access to favorable pricing, guaranteed discounts and rebates that they could not obtain on their own. As a coalition client, not only will you experience reduced prescription drug costs, you also receive consulting and clinical guidance from an unbiased registered pharmacist on your pharmacy programs and plan benefits. - What is a Notice of Creditable Coverage?
A: Per Centers for Medicare & Medicaid Services (CMS) regulations, all employers who offer prescription drug coverage must distribute Notice of Creditable Coverage (NOCC) or Non-Creditable Coverage to all Medicare-eligible individuals (actives and retirees) each year prior to November 15. The notice confirms whether or not the employer-provided coverage is creditable coverage, which means it is equivalent or better than the standard Medicare Part D benefit. This requirement is designed to ensure individuals have sufficient information about enrolling in Part D when first eligible. Your EBS account team is available to assist in the preparation of the notices, as well as the online disclosure that is required to be submitted no later than 60 days after the beginning of the plan year. - Can you assist with Class Action Lawsuits?
A: EBS proactively researches all pharmacy-related class action lawsuits that could pertain to our clients. We will assess your company’s utilization of those drugs affected by the lawsuit in question and will provide the relevant information for you, as a plan sponsor, to make the decision whether or not to participate in the settlement. - Should we structure our pharmacy benefit with a separate tier for specialty drugs?
A: Given that the trend, or inflation, for specialty drugs is more than double that of traditional prescription drugs, it may be a wise strategy to set up a separate tier specifically for specialty/biotech drugs. Our pharmacist can help you assess your plan’s specialty utilization and provide guidance on the appropriate benefits. While it is a good idea to require a higher member share on these drugs, you do not want them to be cost prohibitive. If members fail to take their prescribed drugs, they could end up in the emergency room or hospital, which could adversely affect your overall medical costs. - I want to talk to someone about pharmacy plans - who should I contact?
A: Robin Rankin, R.Ph.
rrankin@ebenefitsolutions.com
832.476.6331
Communications
- What are the benefits of developing an HR brand?
A: Your HR brand can be the differentiator that helps you stand out in the crowd. Organizations that have well thought out and presented communications are so few and far between that this can really set you apart. A unique brand that clearly defines and delivers on the HR promise helps job seekers recognize you as a company they want to be part of. Existing employees feel a sense of pride that they belong to an organization that cares enough to put the same time and effort into internal communications that they do with external communications. Your brand encourages consistency in the messages you deliver, and it helps your employees know that they are receiving information that they need to pay attention to. - How often should we send communications to our employees?
A: It is almost impossible to communicate too often with employees. Complex issues or new programs and initiatives require a series of communications to introduce and reinforce the message. Frequent and candid communication can help build trust and increase morale, so although the timing of your targeted communications must be considered, you should approach communications from a "more is better" standpoint. - Why should I provide employees with Total Compensation Statements?
A:The usual answer would be, “To show them the true value of their jobs.”
It is likely that one-third of your workforce is not aware that the dollar value of legally-required and company-sponsored benefits totals 30% or more of their cash compensation. The Total Compensation Statement can be positive reinforcement of their value to the organization.
A better answer is, “To protect your investment in your employees.”
One of the biggest costs in any business is frequently overlooked and possibly never quantified: the loss of an employee. The business not only pays the exit and replacement costs in hard dollars, but may have “soft costs” that include customer dissatisfaction, lost business, lost expertise, and possibly even poor morale.
Estimates of replacement costs vary, but many assessments place costs for a worker making $8 per hour at 25% of annual pay, and increase the cost percentages substantially for supervisory workers (100% to 150%) and specialized workers or key executives (as much as 400%).
Why do it now? Employees aren’t changing jobs in this economy.
In prior downturns, we’ve seen pent up job dissatisfaction result in heavy turnover once the employment situation begins to improve. Valuable employees may be the first to go if they perceive a better opportunity in greener pastures.
Retaining employees is a strategic effort requiring a coordinated and consistent program in good times and in bad. Communicating the dollar value of your pay and benefit programs to employees in an attractive format, with accurate information, can be a fundamental part of that program.
Avoiding one replacement can more than recover the costs of preparing and distributing Total Compensation Statements. EBS Communications can help you design a message and produce statements that will give you the highest impact for the lowest cost.
- I want to talk to someone about communications. Who should I contact?
A: Lori Thomas, CCP
lthomas@ebenefitsolutions.com
832.476.8378
Global Solutions
- We have a small office in Calgary, but have not set up a Canadian benefits program. From a competitive standpoint, is it necessary that we do so?
A: First, an employer is not required to offer employee benefit programs. However, the marketplace may dictate the establishment of such plans to attract and retain key talent.There are some key differences between Canadian employee benefit programs and their US counterparts. The biggest and most obvious difference is in the area of healthcare. Canadian citizens are provided basic medical and hospitalization care through health plans managed by the Provincial governments. The plans are funded through general taxation and will vary from province to province.
Private health plans are specifically prohibited from competing directly with the Provincial plans. Nonetheless, private coverage (including employer sponsored coverage) is available for procedures and provisions not covered by the Provincial plans such as outpatient prescription drugs and dental care.
Canadian Health and Welfare benefit programs will typically consist of supplemental health coverage including prescription drugs, dental, life and disability coverage. These programs can be secured through insured programs with carriers permitted to operate in each province.
- We have six employees who work in various international locations. We have experienced occasional claim service issues when international medical claims have been submitted to our health plan. How many international assignees do we need to have before we consider an international health plan?
A: Group health plans for international assignees can be created for groups as small as two or three employees. The questions of if and when a separate international health program should be set up are factors of the role that international growth will play for the organization.International assignments represent a significant investment in terms of human capital and direct costs, in addition to being a key part of an organization's growth opportunities. Benefit plans should support the global mobility of the talent, not act as a barrier.
- How can we benchmark our global health plan against other companies?
A: EBS sponsors the Global Employee Benefit survey which tracks the trends and benefit plan designs for expatriate, third country national, inpatriate and local national employee populations. This information is available to survey participants only. Please contact Cliff Caldwell or Casey Loyd for more information on the Global Employee Benefit Survey. - I want to talk to someone about global solutions. Who should I contact?
Cliff Caldwell, GPHR
ccaldwell@ebenefitsolutions.com
832.476.8365