A Message from John Yozell | 2009 Employee Benefits in the Economic Downturn
03/02/2009
Dear Friends, As Yozell Associates continues to explore additional cost saving opportunities for its clients we hope you will continue to keep us informed on how your business or organization is dealing with the economic environment. Most clients are aware that the largest savings, relative to employee benefits, are realized through changes to the medical plan. However, you may read or be approached by others suggesting that there are big savings to be gained by making changes to a company’s ancillary lines, such as the life and long term disability contracts. While there may in fact be savings, our advice is to proceed cautiously when considering changes to your long term disability policy. Long term disability is intended to provide your employees with income replacement in the event they become disabled due to an accident or illness. You do not want to discover at the point of claim, what the true impact of your plan changes are to your employees. For example one idea which has been suggested is changing the long term disability contract feature from an “own-occupation” definition of disability to “2-year own-occupation”. While this may reduce costs, it leaves employees vulnerable to insurance carrier decisions regarding employment and continued disability payments after the first 2 years of a claim. Alternatively, some employers contract with stand alone vendors to supply Employee Assistance Plans - EAP services. These fees can be costly depending upon the scope of services provided. Today, many LTD vendors provide EAP services within the LTD contract for a modest surcharge in premium. Although the EAP benefits might be somewhat different from a stand-alone EAP provider, a cost savings could occur and the basic benefit maintained. If your LTD vendor currently includes EAP services, this might be an appropriate time to communicate those services to your employees. Most EAP benefits include advice and referrals to both financial and legal experts, at no cost to your employees. Additionally, most EAPs include 3 free visits to mental health professionals. If your employees are faced with increased financial concerns then their stress levels and health conditions may also be compromised. By promoting the services of your EAP you will be providing a valuable resource to your employees and family members at this time. As more details become available around the changes and implementation of the COBRA subsidy provision of the 2009-ARRA we will continue to communicate that information to our clients. If you do not currently outsource the administration of your COBRA responsibilities and would like to view your options please let us know. Please contact your Yozell Account Manager to discuss these and other potential cost savings opportunities available to you. Sincerely, John
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