Common sense investment to help employees improve their health regimens and partnerships with unions are among ideas that can lead to cheaper and better benefit coverage for employees, according to David Melby vice president of Rose & Kiernan, an employee-owned insurance broker.
With $548 million in local premiums and about 200 employees among 12 offices in New York and Connecticut, Rose and Kiernan provides personal, auto, homeowners, commercial businesses, surety bonding, and health and employee benefits solutions. The firm was founded in 1860 and is headquartered near Albany in East Greenbush. It has offices in Beacon, Kingston, Fishkill, Glens Falls, Port Henry, Plattsburgh, Potsdam, Watertown, Johnson City, Pittsford and Buffalo, as well as in Danbury, Conn.
Melby said his company creates affordable benefit policies and uses a hands-on approach that frees up a company to concentrate on its bottom line and not its insurance.
“The real competitive edge Rose and Kiernan offers is we have an internal staff that helps them manage the company”™s benefits,” said Melby. “We have staff that can take that burden off employers.”
He said common complications in benefit packages, like managing retiree health benefits, providing flexible spending accounts that help workers by ensuring tax-free money is available to pay health care bills, and taking time to comprehend and choose between options for employee benefits: “These are things that are kind of monkeys on their backs that companies really don”™t want to do and they can outsource it to us,” said Kiernan.
Melby said the company has in-house actuaries who study what is actually happening in a company, instead of relying on national actuary data to delineate benefits. And he said the company services over 3,000 employer-benefit groups and thus has broad experience to draw from when tailoring benefit packages.
Managing the insurance benefits of municipal workers and labor unions is a familiar role for the company and one that is growing more challenging. The current recessionary reality is “definitely impacting” governments everywhere, but Melby said that potential solutions are available that don”™t necessarily cost money, but may involve new approaches to managing public money.
“There”™s a good strategy we have, getting involved in true collective bargaining,” said Melby, adding that most municipalities “have at least three unions representing the preponderance of their employees. It”™s important you begin to work with those unions to look at the level of benefits being provided.”
Realistic discussion of ways to arrive at savings through changing benefit packages often involves choices that may seem obvious in retrospect. “We can point out some of what we call silly benefits,” Melby said, citing packages where employees paid a $3 co-pay for doctor visits. Raising the co-pay three hundred percent sounds drastic, until you realize it is still only $10 per visit for an employee, while the collective impact of the change on the employer”™s bottom line “can be very cost effective,” said Melby.
“What you find in any insurance program ”¦ there are much more cost effective ways of doing things and you need to show that to the unions,” said Melby. “Make them part of the process. Once you open their eyes to some of the savings that are available it brings them into the inner circle to help resolve some of these financial issues.”
Another tack to cut costs is investing in employee wellness programs, he said, an investment that should be considered by any company with more than 50 employees. Melby said the wisdom of wellness programs derives from the actuarial statistic showing 75 percent of all health care expenses are on “lifestyle diseases” such as smoking or alcohol consumption or diet.
He said companies that can help employees manage these lifestyle choices, by for example funding smoking cessation programs, or reducing hypertension, will over a relatively short time reduce expenditures on health care costs and premiums. “We have folks on staff that just concentrate on wellness and would work with our clients to put together a wellness program,” said Melby, adding the program could be either in house or outsourced, or a bit of both, depending on a company”™s preference.
Melby also noted that companies in New York state have the option of charging employees who smoke a greater share of their health care costs than employees who do not smoke.  Â
One thing companies should not do is try to induce talented workers to take a job with them through a health care benefit package. He said with health care costs rising at about 12 percent or more annually, the idea “will soon break the bank.” Instead, he said, companies should design a mainstream health and benefits package that is competitive for their industry and use other inducements to attract good help.  Â
