Month: February 2013

When it comes to managing employee benefits in the era of health care reform, it’s easy to want to take a “head-in-the-sand” approach but the clock is ticking and soon everyone will be forced to comply with the all of the PPACA regulations. Emplo…

An emerging trend is posing a tough challenge to HR professionals: how to encourage “millennials” — today’s youngest workers — to adapt and succeed within a company’s business culture.

Calculating the potential “play or pay” penalties under the health care reform law can be complicated. Learn what you need to do at our March webinar.

David Ortloff, from Dillingham, A UBA Partner Firm

An article came out in the Sunday New York Times recently ( 2/17/13) titled ‘Some Employers Could Opt Out of Insurance Market, Raising Others’ Costs.’ Interesting read.

The Times points out how companies with relatively young, healthy employees will likely be better off opting out of the regular health insurance market to avoid some proposed new elements and restrictions of the PPACA legislation. Among many things, these proposed new elements will significantly raise the rates for younger employees with a maximum 3-to-1 ratio of rates between younger and older employees. They also take away the price break that healthier companies have received up to this point for having fewer medical claims.

The Times writes of concerns that younger, healthier groups will likely opt out of the traditional insurance market, therefore leaving the older, less healthy employers in the traditional insurance marketplace, which would then drive up costs within that space. 

In reality, the trend of younger, healthier companies moving to self-funding has been going on for years. In fact, the Times pointed out that a recent study from the nonpartisan Employee Benefit Research Institute found that about 59 percent of private-sector workers with health coverage were in self-insured plans in 2011, up from 41 percent in 1998. That’s a 44 percent increase in the past 13 years.

With some specific proposed regulations of the PPACA legislation finally being released late in 2012, the health insurance landscape of the future makes the self-funding approach significantly more attractive for smaller employers than before. 

So, just what is self-insurance? When companies are self-insured, they assume more risk by actually paying the claims filed by employees and health care providers. The risk is mitigated by an employer purchasing stop loss insurance that protects a company against large claims that cap out at, say, $50,000 per person on the plan or an aggregate amount that kicks in if all employee claims added together hit a certain amount for the plan year. 

The bottom line is that self-insuring your group medical plan might be a way to avoid additional costs and constraints of PPACA. If you have more than 50 employees that are relatively young and healthy, as well as the financial ability to pay a more fluctuating monthly cost, self-insuring is an option you should at least look into.

Download UBA’s Self-Funding White Paper: Small Businesses Blaze a New Trail with Self-Funding – Reform and rising costs make small and midsized companies consider a new way to pay for employee health care.

Peter Freska, CEBS
Benefits Advisor
The LBL Group, A UBA Partner Firm

There are companies that seem to “get it.”  GE for example (positively) has been called “a CEO factory,” and with names like Edison, Coffin, Cordiner, Borch, Jones – to Jack Welch and now Jeff Immelt, GE has produced what many may consider great CEOs for more than 100 years.  In fact, Charles Coffin – the man who succeeded Thomas Edison – was called “the greatest CEO of all time” by Fortune Magazine.  But as leaders know, building the right team can be difficult. 

When asked “Can you give me an example of a team?”, many spout out – The Lakers or the Celtics, or some other professional or college sports team.  But are these really effective teams?  In his book “Leading Teams” (HBS, 2002), J. Richard Hackman outlined five conditions that enable team effectiveness.  By putting these conditions in place leaders can make their teams more effective as a unit. 

A Real Team

• Works collectively on a task


• Has clear boundaries to membership


• Has the authority to execute, monitor and manage, designs the work, and sets the direction


• Has stability of the members over tim

A Compelling Direction

• Is challenging to energize and enhance motivation


• Is clear to orient and align performance strategy


• Is consequential to engage and foster full utilization of knowledge and skill

An Enabling Structure

• Consists of team composition that should be small and diverse


• Has design of work that should utilize a variety of skills


• Has norms of conduct that should be placed to shape behavior

A Supportive Context

• The organization should allow members to identify and easily access information and education


• Has an appropriately structured reward system to complement the team structure

Expert Coaching

• Needs to be available and the focus of the team leader’s activities.

Leaders of organizations large and small are getting pulled in many different directions.  It is easy to see how a leader can focus on shareholder returns or profitability instead of what really matters – the people.  So, what is your Total Human Capital Strategy?  Are you developing great leaders in your organization that know how to build effective teams?  Or is your organization still more worried about profitability than the people?  As you look forward into the coming years, consider companies like Southwest Airlines and Whole Foods, which make statements about treating their employee right (and that leads to treating the customer right).  It seems that the old saying “…90 percent of your assets walk out the door each day.  What are you doing to bring them back the next day?” still rings true – perhaps today more than ever.  Employers currently have a slew of regulatory and compliance issues, and the list keeps on growing.  To manage this onslaught, make sure you are investing in the right assets internally and externally to ensure that your business survives and thrives for many years to come.  As Jack Welch has said…his most important job, the one that he devotes more time than anything else, is to motivating and assessing GE’s employees.