David Crisp was the SVP HR at the Hudson’s Bay Company and reported to the CEO until he chose early retirement in 2002. He now does HR consulting and runs the Balance and Results blog. Here, he shares his insights towards being a better plan administrator.
- Try to keep the plan design up with the demographics
- Never allow pooled benefits to be optional
- Always have a co-pay
- Manage WSIB and sick leave abuse
- Stop anti-selection in order to reduce costs
- Communicate, communicate, communicate: post the 1-800# everywhere
- Educate employees before they need the information
- Employees don't believe EAPs are confidential
- Never ask for feedback on your benefit plan
- Create a secure working environment to boost productivity
His biggest challenge regarding benefits at HBC
We wanted a competitive benefit plan design that keeps up with the demographic.The trouble is, young people want cash, and old people want the benefits. The ultimate plan would be a pure cafeteria style. But then there’s the problem of adverse selection.We tried giving people 2 or 3 levels of choice. Family coverage had full benefits. New, young employees signed up for a basic health & life insurance plan with catastrophic coverage that was very inexpensive. The intermediate plan had a lower deductible and was ideal for those who were newly married.People with full benefits never complained.
Never make the life insurance benefit optional
The catastrophic plan was never well understood. People would ask, “Why am I paying $2/month for some plan that I’ll never use?”One year, we made life insurance fully optional as a pilot.In first 6 months, someone who opted out of life insurance, died in a wreck.Employees complained that the company should pay the $200,000. It became a thing in the warehouse that the company was mean and rotten because we wouldn’t pay out. “He just made a mistake,” they would say. “It isn’t his fault! You have to help him!”We told the employees that if they raise money, we’ll match it. They raised $4,000 and we matched $4K which mostly went towards funeral expenses. But the employees were still angry. So we changed back to full enrolment as soon as we could.Afterward, everyone went back to complaining, “Why do we have to buy life insurance?”Stick to your rules. If you’re paying 50% of the premium, stick with it.
Always have a co-pay
The employee must have a co-pay. Otherwise, they take their benefits for granted and a number of them would abuse it.
Reducing sick leave fraud
We used to struggle with lots of sick leave abuse. We found out that the store managers were encouraging it.Sick pay and WSIB were being abused the most.Finally, we said that every time there is an accident, it’s a $200 charge to the store. It came out of the store budget. That made managers pull people back off from WSIB and it solved the problem overnight.We saved $1 million a year as a result.
Understand anti-selection and control it, to control your costs
We had some part-time employees who would go full time, get the whole family’s teeth fixed, then they would quit. Our carrier would tell us that they saw a pattern.How do you prevent it from happening? Accept it’s only a small proportion of people who will do that. It’s a form of adverse selection. People who opt in and out easily will drive claims up.Beneplan Tip: Always educate employees that they will have to complete a health evidence questionnaire when opting in to the plan after their date of hire.
Post the Insurance Company’s 1-800# everywhere
Reduce the amount of inquiries falling on your desk by putting up benefits corkboards, with clear contact information.The best practice is to have a website or intranet with a dashboard where employee can click on ‘my benefits’ and see all their information.
EAP programs are only worth if if employees understand that it's confidential
First of all, don’t allow duplication between EAP & the EHC plan design. If your EAP covers 12 hours of face to face therapy, remove the psychologist coverage from your plan.EAP utilization would be low because employees are not sure if it’s really confidential. After enough people have tried it, that’s when people start using it.You can’t market it as a ‘mental health’ solution - position it as, "if you have a problem and it's not physical". It's your total resource for all things non-doctor. The first resource is always going to be a friend at work.
Don’t ask for feedback on your benefit plan
Your feedback system will only be a steady trickle of “I don’t think the plan is very good.”
Host educational seminars before your employees need the information
If you have a seminar on retirement, and you tell the folks who are 64 about it, they won’t show up because they’re probably already past that planning stage.Instead, have it and invite the people who are turning 48 to come in and plan their retirement options.
The future of group benefit plans in Ontario
Companies will continue to look at the company next door and what they’re offering.The command & control leadership style is over.Leaders now have to be coaches, provide a positive environment. Engaging employees. Google is the ultimate example. It's much harder to engage employees if you don't offer benefits that are reasonably competitive or better.
Create a Secure Working Environment
If you make people insecure by threatening to lay people off, you’ll see that people will stop working for you and start working on their resumes.If their kid’s sick and there’s no benefit plan, they’ll be absent or on the phone all day dealing with that issue.Dave Crisp can be reached at dcrisp@crispstrategies.com for speaking engagements, HR and leadership consulting, and writing.
David Crisp was the SVP HR at the Hudson’s Bay Company and reported to the CEO until he chose early retirement in 2002. He now does HR consulting and runs the Balance and Results blog. Here, he shares his insights towards being a better plan administrator.
- Try to keep the plan design up with the demographics
- Never allow pooled benefits to be optional
- Always have a co-pay
- Manage WSIB and sick leave abuse
- Stop anti-selection in order to reduce costs
- Communicate, communicate, communicate: post the 1-800# everywhere
- Educate employees before they need the information
- Employees don't believe EAPs are confidential
- Never ask for feedback on your benefit plan
- Create a secure working environment to boost productivity
His biggest challenge regarding benefits at HBC
We wanted a competitive benefit plan design that keeps up with the demographic.The trouble is, young people want cash, and old people want the benefits. The ultimate plan would be a pure cafeteria style. But then there’s the problem of adverse selection.We tried giving people 2 or 3 levels of choice. Family coverage had full benefits. New, young employees signed up for a basic health & life insurance plan with catastrophic coverage that was very inexpensive. The intermediate plan had a lower deductible and was ideal for those who were newly married.People with full benefits never complained.
Never make the life insurance benefit optional
The catastrophic plan was never well understood. People would ask, “Why am I paying $2/month for some plan that I’ll never use?”One year, we made life insurance fully optional as a pilot.In first 6 months, someone who opted out of life insurance, died in a wreck.Employees complained that the company should pay the $200,000. It became a thing in the warehouse that the company was mean and rotten because we wouldn’t pay out. “He just made a mistake,” they would say. “It isn’t his fault! You have to help him!”We told the employees that if they raise money, we’ll match it. They raised $4,000 and we matched $4K which mostly went towards funeral expenses. But the employees were still angry. So we changed back to full enrolment as soon as we could.Afterward, everyone went back to complaining, “Why do we have to buy life insurance?”Stick to your rules. If you’re paying 50% of the premium, stick with it.
Always have a co-pay
The employee must have a co-pay. Otherwise, they take their benefits for granted and a number of them would abuse it.
Reducing sick leave fraud
We used to struggle with lots of sick leave abuse. We found out that the store managers were encouraging it.Sick pay and WSIB were being abused the most.Finally, we said that every time there is an accident, it’s a $200 charge to the store. It came out of the store budget. That made managers pull people back off from WSIB and it solved the problem overnight.We saved $1 million a year as a result.
Understand anti-selection and control it, to control your costs
We had some part-time employees who would go full time, get the whole family’s teeth fixed, then they would quit. Our carrier would tell us that they saw a pattern.How do you prevent it from happening? Accept it’s only a small proportion of people who will do that. It’s a form of adverse selection. People who opt in and out easily will drive claims up.Beneplan Tip: Always educate employees that they will have to complete a health evidence questionnaire when opting in to the plan after their date of hire.
Post the Insurance Company’s 1-800# everywhere
Reduce the amount of inquiries falling on your desk by putting up benefits corkboards, with clear contact information.The best practice is to have a website or intranet with a dashboard where employee can click on ‘my benefits’ and see all their information.
EAP programs are only worth if if employees understand that it's confidential
First of all, don’t allow duplication between EAP & the EHC plan design. If your EAP covers 12 hours of face to face therapy, remove the psychologist coverage from your plan.EAP utilization would be low because employees are not sure if it’s really confidential. After enough people have tried it, that’s when people start using it.You can’t market it as a ‘mental health’ solution - position it as, "if you have a problem and it's not physical". It's your total resource for all things non-doctor. The first resource is always going to be a friend at work.
Don’t ask for feedback on your benefit plan
Your feedback system will only be a steady trickle of “I don’t think the plan is very good.”
Host educational seminars before your employees need the information
If you have a seminar on retirement, and you tell the folks who are 64 about it, they won’t show up because they’re probably already past that planning stage.Instead, have it and invite the people who are turning 48 to come in and plan their retirement options.
The future of group benefit plans in Ontario
Companies will continue to look at the company next door and what they’re offering.The command & control leadership style is over.Leaders now have to be coaches, provide a positive environment. Engaging employees. Google is the ultimate example. It's much harder to engage employees if you don't offer benefits that are reasonably competitive or better.
Create a Secure Working Environment
If you make people insecure by threatening to lay people off, you’ll see that people will stop working for you and start working on their resumes.If their kid’s sick and there’s no benefit plan, they’ll be absent or on the phone all day dealing with that issue.Dave Crisp can be reached at dcrisp@crispstrategies.com for speaking engagements, HR and leadership consulting, and writing.
