Attracting and Retaining Excellent Employees: Benefits Turn the Key Attracting and Retaining Excellent Employees: Benefits Turn the Key! Mike Robinson Manager, Consultant Support Account Development Department Aflac Worldwide Headquarters

Understanding the Three Basic Types of Employee Benefits No Choice - Mandated by Law Employer Owned – Employee can choose to participate or not Total Choice- Employee chooses to participate and to what extent Aflac_BusinessMatchmaking_8/2/06

Are Benefits Important?1 Approximately 48% of small businesses offer health insurance to their employees.1 41% of firms with fewer than 10 employees offered health insurance. 78% of those with 20 or more employees offered health insurance. 1 National Compensation Survey, 2004 Aflac_BusinessMatchmaking_8/2/06

Are Benefits Important? (continued) Poll participants indicated three key reasons why they offered health insurance: “It’s the right thing to do”. “To attract and retain employees.” The ability for the owner to get coverage through the business. Aflac_BusinessMatchmaking_8/2/06

Major Reasons Employers Offer Health Insurance 2 Responses from owners with 1-9 employees: Helps employee recruitment 61% Decreases turnover 47% Increases employee productivity 43% Employees expect or demand it 41% 2 AON Employer Benefit Survey 2005 Aflac_BusinessMatchmaking_8/2/06

What Kind of Insurance is Offered?3 Employee health insurance (61%) Disability insurance (41%) Life insurance (29%) Dental insurance (24%) 3 NFIB 2003 Business Poll on Compensating Employees Aflac_BusinessMatchmaking_8/2/06

The Basics: Group Health Insurance “Traditional indemnity plans” No restrictions on providers. Typically the most costly type of health insurance for the employer and employees. Aflac_BusinessMatchmaking_8/2/06

The Basics: Group Health Insurance “Other Plan Options” include: HMOs PPOs POSs EPOs Aflac_BusinessMatchmaking_8/2/06

Group Disability Insurance Short-term disability: Long-term disability: Aflac_BusinessMatchmaking_8/2/06

The Basics: Voluntary Insurance Primarily sold at the worksite through payroll deduction. Employees typically pay 100% of the premiums. Gives employers an opportunity to round out a benefits package at little or no cost to them. Aflac_BusinessMatchmaking_8/2/06

Voluntary Benefits can help with “out-of-pocket” claim costs: Deductibles and co-payments. Extra fees for employees who get treatments out-of-network. Food, lodging, and travel to special treatment centers. Loss of income. Charges beyond “reasonable and customary”. Aflac_BusinessMatchmaking_8/2/06

Why Employees Like Voluntary Benefits Convenience of payroll deduction. More choices and control. Meet individual and family needs. Guaranteed Renewable & Portable. Comfortable with employer’s due diligence; gives them feeling of security. Aflac_BusinessMatchmaking_8/2/06

Most common types of Voluntary Insurance Products: Supplemental Life Disability Accident (Expanded) Cancer Dental Vision Hospital Confinement Long-Term Care Aflac_BusinessMatchmaking_8/2/06

Think About It… If you do not offer group health and voluntary insurance benefits, where will employees get the money for medical care, emergencies, and income replacement? Savings? A loan? Family? Employer (You)? Aflac_BusinessMatchmaking_8/2/06

Selecting a Provider (Carrier): What Should I Ask? What is the company’s financial strength? A.M. Best, Standard & Poor’s How is the company recognized? Awards and industry recognition How many times has the company changed rates on its policies? Aflac_BusinessMatchmaking_8/2/06

Selecting a Provider (Carrier): What Should I Ask? (continued) How quickly does the company pay claims? How are funds distributed? Does the company encourage preventative care? What kind of service will we get? What are the monthly, annual, and lifetime limits? Aflac_BusinessMatchmaking_8/2/06

Selecting a Provider (Carrier): What Should I Ask? (continued) Are policies portable? Are policies guaranteed-renewable? How far back does the company go when underwriting applications? What is the definition of “disability”? What is the benefits (loss) ratio? What is the operating expense ratio? Aflac_BusinessMatchmaking_8/2/06

The Right Formula for Employers Start with the basics (core benefits). Increase value without increasing your cost (voluntary benefits). Help employees save tax money with flex plans, HSAs, and HDHPs. Choose your providers (carriers) wisely. Aflac_BusinessMatchmaking_8/2/06

Thank You Mike Robinson Manager, Consultant Support Account Development Department Aflac Worldwide Headquarters