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HomeMy WebLinkAboutExhibit13n L �i i fCJVI CIGNA :flealthCare VoluntaryLimited-Benefit Plans Let Us Help Improve the. Health of Your Business CIGNA HealthCare Voluntary Limited -Benefit plans offer affordable options for employers while providing quality urgent, emergency and preventive health care opportunities to employees. Understanding the Uninsured Health Crisis: More than 43 Million Uninsured Individuals, Costing $65-$130 Billion a Year It's no surprise that there is a national health care crisis in the United States. The National Academy of Sciences study reports that the impact of the millions of uninsured Americans costs the nation over $65 billion a year in lost earnings, output from absenteeism, chronic poor health, disability and early mortality. It's also no surprise that with the rising cost of health care and increases in premiums, it has been more difficult for both employers and members to afford medical insurance coverage. What may be surprising, however, is that of the more than 43 million people who were uninsured in 2005, many were not unemployed. They were the workers who were stuck in the middle — part-time or full-time employees who made too much for Medicaid, but were not eligible for their company's core medical plans: 80 percent belong to working families — 30 percent come from households with incomes exceeding $50k and 50 percent work for small businesses or are self-employed. This not only creates additional pressure on our health care system with dramatically rising medical costs, but it also impacts the health of those employees and the overall productivity for the companies who hire them. As companies search for creative solutions to recruit and retain good employees, increase the satisfaction of both their employees and customers, and boost productivity, voluntary benefit plans become the no-cost/low-cost benefit alternatives. Employer Advantages: Recruitment and Retention As voluntary limited -benefit plans become more popular in the marketplace and are adopted at a greater rate, employers who offer these plans can profit by attracting and retaining entry-level talent. Access to basic health care needs can be a deciding factor for an individual who is considering multiple, similar employment opportunities. N Health care benefits may also satisfy and keep employees who may otherwise look for other opportunities. In addition, benefit plans help improve employee health and, therefore, productivity. is And proactive benefits also can curb incidents of workers' compensation, as well as the severity of those incidents. The Harvard Business Review reports "A 5% increase in retention results in a 10% decrease in costs and a productivity increase ranging from 25 to 65%." CIGNA Top Industries Employing Uninsureds: Retail, Entertainment, Service Three industries that have been identified with likely employment growth and fairly high levels of uninsured employees are the food service, hospitality and retail industries. In the Food and Beverage Service industry, there are 7.4 million workers in service occupations such as cooks, bartenders, waiters, etc., and an additional 347,000 workers in sales occupations such as cashiers. In 2012, these numbers are projected to grow to 8.6 million and 395,000, respectively. -; In the Hotel and Other Accommodations industry, there are 1.2 million workers in service occupations such as maids, housekeepers, security, etc. In 2012, this number is projected to grow to 1.4 million. h=: In the Clothing, Accessory and General Merchandise Stores industry, there are 2.7 million workers in sales and related occupations. In 2012, this number is projected to grow to 3 million. Over the next five years, these industries are projected to employ some 13.3 million work- ers. Many of these employers are not able to provide medical insurance to employees who earn lower wages or those who work part-time; and therefore, these individuals often carry no insurance. This not only creates additional pressure on our health care system with dra- matically rising medical costs, but it also impacts the health of those employees and the overall productivity for the companies who hire them. 8 Million — 7 Million — 6 Million — 5 Million — 4 Million — 3 Million — 2 Million — 1 Million -- 7.4 2007 2012 1.2 1.4 2007' 20121 2.7 12007 2012 Food & Beverage Hotel & Other Clothing, Accessories & Accommodations .General Merchandise Stores Source: Blue Cross Blue Shield, Census Population Survey. Employers have sound business reasons for offering health benefits to their employees Consider the following: «= 72 percent of employers report that it helps with recruitment and retention. 64 percent of employers report that it increases productivity by keeping employees healthy. in 58 percent of employers report that it reduces absenteeism by keeping employees healthy. - 69 percent of employers indicate it has had an impact on employee retention, attitude and performance. Source: EBRI 2002 Small Employer Health Benefits Survey Studies continue to show that benefits have a positive impact on worker recruitment, retention, satisfaction and productivity, as well as health status. Among employees reporting high levels of job satisfaction, about two thirds indicate benefits are an important reason to stay with their current employer — benefits that employees would not be able to access if they were not offered by their employer. Increased Productivity and Satisfaction Equals Increased Profits Employee satisfaction can also increase customer satisfaction, which in tum generates improved revenue. Consider the following: Retention Retaining good employees increases customer satisfaction and profit. A 5% increase in employee loyalty can increase profits by 50%. Source: www.crmguru.com/features Presenteeism Reduced productivity on the job due to illness or a medical condition can manifest itself in poor time management, lack of concentration and lower quality work. Studies reveal that presenteeism can cut individual productivity by one-third. A 2004 Harvard Business Review article estimates the annual national costs of presenteeism at $125 billion. A two-year study of 7,000 employees showed that individuals who reduced health risks tended to experience improvements, and each risk factor reversed led to an improvement of $950 annually in productivity. Source: Aon Consulting Forum, December 2006/January 2007 Turnover Decreased turnover has a direct impact on productivity and profit. A large company estimated that locations with low tumover (100% average) had a greater profit margin than those averaging 150%. Source: Frostin and Helmin, 03 Tackling Turnover Another company hiring 200 employees per pay period (with an average hourly wage of $8) had a per -employee turnover cost of $3,500. Source: Fred Reichheld, Loyalty Effect and Loyalty Rules Training/Hiring Cutting down on training costs will save the company money. 17,4 The average cost to train an hourly employee at a national chain is about $3,500. Source: Restaurant and Institutions Magazine #114 = Another company found that indirect costs of recruiting, hiring, training and getting new hires up to speed was 50% of annual salary. Source: Fred Reichheld, Loyalty Effect and Loyalty Rules Replacement Keeping current employees reduces replacement costs. One company found that indirect costs of replacing employees earning $6.50 an hour was at least $3,637. Source: www.worksourcepartners.com While most business people are concerned with turnover, few recognize the power they have to control it. If employees stay longer, costs of replacing workers decrease — costs that range from six months of an hourly workers' wage to 18 months of a professional employee's salary. In CIGNA addition, the turnover causes lost productivity and contributes to low employee morale. In the end, controlling turnover means managers can spend more time growing the business, and less time outprocessing terminated old employees and hiring, orienting and training new employees Flexible Solutions, Simple Administration: The Right Plan for You Limited -benefit plans give selected employers access to a broad range of fully -insured and voluntary benefits that help address cost concerns and satisfy employees who might not otherwise have access to any type of health coverage. Additionally, such plans offer a variety of benefits to employers including: Flexibility - ability to customize plan designs based on the employee population needing coverage. Cost Control Options - employee premiums can be deducted from the employee's paycheck, and can be effectively managed through payroll withdrawal or direct billing. Consumer Advantages For most individuals, these plans provide several key attributes including: Opportunities for coverage that might not otherwise exist. No health exams required for coverage. Emergency care - in- or out -of -network access to physicians and hospitals, anywhere in the country. Easy to understand benefits - with benefit amounts clearly defined in advance. The value of holding an ID card - provider recognition, not having to worry about a physician not accepting your card, a guaranteed minimum amount of coverage. Employees appreciate benefits more when employers work to select and communicate plans that will work for them. Employee research notes the top reasons that voluntary benefits continue to. grow in popularity are because: lEfrj k. Payroll deduction is convenient (60%). No medical exams (50%). More convenient than shopping for individual coverage (53%). Cost-effective way to meet diverse employee needs (45%). Most important, because consumers of limited -benefit coverage are often corning from a position of having no coverage at all, they now have access to qualified doctors and are able to provide basic coverage to their families - something many of them could not do in the past. Source: Metiife study of employee benefit trends. www.rnetlife.com. CIGNA HealthCare With our Starbridge and Fundamental Care products, we offer a product suite of affordable voluntary Iimited-benefit health plans that enhance the value of a company's benefits program without adding to the employer cost. Today, CIGNA can better serve the working uninsured by offering employers a simple to use, cost-effective benefit solution for their hourly or part-time employees and other employees who have not been eligible for benefits in the past. Let us help you improve the health of your employees and the health of your business. _ ; Zi'b :.oy Coe Conr::.t.,cut.:..r. .:9 r n a rJ `_. CIGNA HealthCare Shared Administration PPO - City of Miami ZIP Codes not meeting the access standard 13 All Employees - CRY . .. ZIP .. Code Total number of employees Total : number of providers Employees without desired access Number ".; Pct Average distance to a choice of 1 provider NO EMPLOYEES MEET THE SPECIFICATIONS Access standard: 1 hospital within 20 miles Provider group: Hospitals