The SESCO Report – February 2010
Tough Economic Times Provide Opportunity to Alter Health Plans
We all know that we are operating in challenging economic times. Just about every client we support is seeking ways to muddle through these challenges. Health plans in particular face some unique issues. From 1999 to 2008, health insurance premiums increased 119% compared with an increase in inflation of 29%. Employers contributed an average of $4,247 for health insurance premiums for family coverage in 1999 compared to $9,325 in 2009.
In addition to overall cost increases, there have been additional factors that have increased cost including:
• increased enrollment of dependents who have lost jobs,
• delayed retirements,
• stress related disorders,
• postponement of preventative services,
• claims against medical spending accounts before they have been fully funded.
Although challenging, employers should initiate changes to their health benefit plans. Consider:
• Redesigning health benefit plans identifying benefit features that can be reduced or restructured without eliminating key coverage areas.
• Review cost saving strategies. Consider trading fixed co-payments for co-insurance so that employees share in increasing cost automatically. Also share premium cost increases proportionately. However, be cautioned of the employees' ability to absorb significant cost increases in years where pay has been frozen.
• Consider implementing or enhancing wellness programs. Despite the initial cost in implementing such plans, wellness programs can help hold plan costs down in the long run. Focus on the importance of keeping your workforce healthy.
• Employers can improve case management and health coaching services. Help employees stay on appropriate therapies and/or complete rehabilitation plans to avoid future health complications normally creating greater plan costs.
• Consider voluntary benefits which are normally at low or no cost to the employer such as vision, cancer, life or other ancillary benefits.
• Conduct a dependent eligibility audit, which is one of the most popular actions that plans are implementing. This audit can help reduce cost by ensuring that your plan is covering only eligible participants and dependents. Employers should start requiring proof of dependency for all new plan participants. Then progressively screen existing participants to ensure eligibility. This type of audit can have an immediate cost savings, many times an 8% to 12% reduction in dependent coverage.
It is more important than ever for employers to maximize their health plan/relationship by:
• simplifying plans,
• linking performance guarantees to cost,
• reducing waste,
• piloting new programs,
• embracing technology,
• realigning personal responsibility,
• shop, shop, shop using multiple vendors/agents.
Ultimately, employees must take ownership for maintaining a healthy lifestyle and in sharing in the burden of controlling healthcare costs. This is much harder to achieve than said, but encouraging a culture of good healthy outcomes is critical.
Finally, as we have "preached" over and over, employers must get a firm handle on their employment costs to include compensation and benefits. An effective compensation plan can and will be the key system that helps employers survive tough economic times. And when economic times improve, a sound compensation system will be the tool that helps employers from being their own worst enemy when chasing after talent or paying more than the job is worth.
SESCO services include SESCO Insurance Group, compensation administration review/ development and preparing employee benefit statements so that if/when wages are frozen, employees can fully appreciate their total paycheck. Please contact SESCO to discuss any or all of these solutions and recommendations.
Humility and the Effective Leader
So often, when we think of leadership, we think in terms of the charismatic or the bold leader. We think of leaders as bigger than life, exuding confidence and perhaps arrogance.
For most, "humility" isn't a word that comes to mind when considering the leader we think we know. This is unfortunate, because the best leaders we know have been able to stay self-confident without crossing the line into arrogance through the simple act of remaining humble. It isn't easy, especially for leaders who've had big success.
• When we are humble, we understand and invite the gifts that others bring to us.
• When we are humble, we invite participation by others.
• When we are humble, we are open to new learning and ideas.
• When we are humble, we have empathy and compassion for others.
• Arrogance breeds behavior that isn't inclusive, diverse of thought, creative, or enlightening. We know that we are not humble when we've become arrogant.
How do we know when we've crossed the line into arrogance?
Be vigilant. Listen to yourself. You've crossed the line into arrogance when:
• You take all the credit: real leaders know that their success is a group effort. When we are humble, credit goes to all who share in your success.
• You are the smartest person in the room: learning has ceased. You feel as if you have nothing new to learn from those around you. When we are humble, we are in a state of inquiry; not knowing all the answers, which allows us to continually learn.
• You judge those around you as "less" than yourself: you've put yourself on a pedestal. Nobody can do anything better than you can. It's not important where you are in relation to everyone else. What is important is that we push our own edges outward to continually evolve.
• You've lost empathy and compassion: you just can't seem to identify with those in a tough spot or feel sympathy for those in sorrow. When we are humble, we can walk in the shoes of others and we can reach out to them.
Are you staying humble or have you crossed the line into arrogance? Spend some time thinking about this question and ask for feedback from those you trust on what they are observing. And if you've crossed the line, get in touch with a mentor or seek training to help you get back to humility.
Workforce Now Spanning Four Generations
Due to individual economic realities, for the first time in American history, employers are facing the challenge of managing a workforce spanning four generations: Generation X (born between 1980 and 2000), Y (born between 1965 and 1979), Baby Boomers (born between 1946 and 1964), and The Mature sometimes called the silent generation (born between 1925 and 1945).
Employers are having a difficult time in managing their extremely diverse workplace because of the drastic differences which exist among generations. Differences include communication styles, how they view and value careers and what benefits best meet their personal and family needs. X-ers, for example, like to text, Boomers like to communicate in person, Y-ers are used to talking, typing and surfing simultaneously and Matures prefer to address one task at a time.
When it comes to understanding how employees view their careers, you could say the younger employees work to live and older people live to work. Generations X and Y saw their parents lose jobs despites years of dedication and loyalty, leading them to be less trustful of employers. Matures who remember the end of the depression and the difficult war years know what it's like to live with limited means. They are committed and hard working.
In addition to managing, communicating, motivating and leading these diverse generations, employers are also left wondering how one set of employee benefits can satisfy these work groups. However, we know that regardless of age, most of today's employees, regardless of generation, need and want flexibility in their benefit plans. Although finding a balance that will keep all four (4) workplace generations happy seems like a daunting, if not impossible task, the situation provides one big advantage: diversity. "Most companies in America recognize that there are significant advantages to diversity in the workplace. By integrating workers from diverse ages, their workforce becomes stronger." The key to leveraging workplace diversity, re: multi generations, is understanding and embracing differences. We must fill the "generation gap" with positive and informative leadership skills. As if managing wasn't hard enough, we must now learn to manage and meet the needs of four (4) different and diverse generations. Consider:
• Matures may need time to care for ailing spouses or meet other family needs. They may seek to gradually reduce their work hours as they near retirement and many want to work past retirement sometimes creating an issue between wanting to work and the ability to meet work expectations either physically or mentally.
• Baby Boomers find themselves needing to take care of aging family members as they find themselves "sandwiched" between the needs of their children and many times grandchildren and that of their parents. Additional time is needed to serve as caregivers.
• Gen X-ers demand a work-life balance. They put their time in at work but need time away from work. This frustrates managers who are Baby Boomers or Matures as they believe long hours equals success.
• Generation Y or Millennials want flexible work hours. They are highly confident, many times disrespectful, yet very efficient and technologically literate. They do not respond to "tell me what to do and I'll do it" – they prefer to collaborate and be creative.
It is recommended that all managers and supervisors be trained on understanding and appreciating the differences of managing the realities of the multi-generational workforce. Through a better understanding and appreciation of these differences, managers can leverage each generation's strengths while at the same time avoiding significant frustration (and liability) as to the challenges each generation poses.
SESCO conducts "Understanding and Valuing Diversity in the Workforce" training which also includes tips on avoiding workplace discrimination to include age and related harassment. Age discrimination charges are increasing due to the ever increasing age of the workforce.
Special Thanks to SESCO Clients!
Thomas Nelson Publishing – Nashville, Tennessee
SECO International – Atlanta, Georgia
Bauer Built – Durand, Wisconsin
Tri-State Nissan – Winchester, Virginia
Berglund Automotive Group – Roanoke, Virginia
SESCO Client Feedback
"Bill, this is wonderful news. Thank you and rest assured we will turn to SESCO for help in the EEOC arena as the need arises. I am very appreciative of your assistance in this review and look forward to receiving your letter."
~ Ann L. Straw, General Counsel-US – Votorantim Cimentos North America, Inc.
"Joel, I just wanted to thank you again for what you did today, couldn't have pulled it off without you. I think it went as smooth as could be."
~ Mickey Ray – Modern Vending Company
SESCO Client Inquiry – Staff Response
Question: When an individual is eligible, can we force him/her to go on Medicaid/Medicare and remove them from our health plan?
Answer: Although most employees voluntarily take governmental benefits when age allows and many employers will pay for supplemental benefits, employers cannot force employees who are eligible onto government plans. Employers must be very careful in discussing the aging employee's health and government options. Although it is a reality and all employers will eventually have to have these kinds of difficult discussions, SESCO should be consulted before doing so to avoid the significant liabilities associated with such a conversation.
Upcoming SESCO Events
March 3, 2010
Public Seminar — Jumpstart to Supervision
Courtyard by Marriott
Bristol, VA
March 3, 2010
Public Seminar — Jumpstart to Supervision
Brown Distributing
Richmond, VA
March 17-18, 2010
Public Seminar — Effective Leader/Manager
Courtyard by Marriott
Bristol, VA
March 17-18, 2010
Public Seminar — Effective Leader/Manager
Brown Distributing
Richmond, VA
April 7-8, 2010
Public Seminar — HR Basic Course
Courtyard by Marriott
Bristol, VA
April 7-8, 2010
Public Seminar — HR Basic Course
Brown Distributing
Richmond, VA
(SESCO has partnered with one of our valued clients, Brown Distributing, to host our Richmond Seminar Series.)
For more detailed information and registration click HERE
State and National Business and Trade Associations, Chambers of Commerce and Human Resource Associations are welcome to contact SESCO to book a professional speaker for annual conventions and seminars. Contact Bill Ford at 423-764-4127 or by email bill@sescomgt.com .
