The Eight

1
The Eight Conversations About Benefits
Recalibrating Health and Welfare
Ronald S. Leopold, MD, MBA, MPH National Medical
Director, Vice President METLIFE EMPLOYER
SPONSORED BENEFITS
2
The population Is aging.
Employers will continue to cost shift
Funding retirement is going to be an even bigger
issue.
Technology will drive new delivery possibilities.
Consumerism in some form is here to stay.
Social Security and Medicare are no longer sure
bets
The competition for talent is increasing across
all employer sectors.
Health care costs will continue to outpace
most economic indices
Americans havent saved nearly enough for
retirement.
CERTAINTIES
3
EMPLOYEE
Personal Responsibility
Human Capital
THE EIGHT CONVERSATIONS ABOUT BENEFITS
EMPLOYER
RISK
FUNDING
ROI / Value
Employee Choice
4
My CEO wants me to start from scratch and white
board our benefits program.
EMPLOYER
5
Finding the right balance between expense
and value is the new benefits equation that must
be solved. The answer is different for every
employer.
6
When it comes to benefits I know weve got to
pay to play.
We agreed to drive efficiencies and value in
everything that we do.
Are we really driving efficiencies and value in
benefits?
But we have to drive more value without spending
more.
7
With 5 years of health cost inflation my dollar
buys less.
Other benefits may offer better value for the
dollar.
The challenge is to stretch the dollar as far as
we can.
8
In spite of the huge increases we face in costs
and challenges...
we still do annual benefits planning on an
incremental change basis.
What business value do we get from our benefits
spend beyond just meeting historic obligations?.
9
What business value do I get from
offering benefits?
ROI / Value
10
Benefits have the attention of the C-Suite.
Fifth Annual MetLife Employee Benefits Trend
Study, 2007
11
In aggregate, retaining employees surpassed benefi
t cost control for the first time.
Fifth Annual MetLife Employee Benefits Trend
Study, 2007
12
Competition for talent will be fiercer than ever.
Fifth Annual MetLife Employee Benefits Trend
Study, 2007
13
What will it take to get your employee to stay?
What role do benefits play?
Sibson 2006 Rewards of Work Study survey
concludes that there has been a decline in
employee satisfaction with all types of
benefits, including time off, retirement
benefits, health care benefits, benefit
administration satisfaction and benefit level
satisfaction.
14
Benefits will be a more important business driver
in the future.
Medical benefits are a given.
My benefits package needs to differentiate me
from my competition.
Its not just about richness of benefits. Its
about breadth of portfolio.
15
How can non-medical benefits enhance the value we
get from offering health insurance?
FUNDING
16
Employees are paying more for medical but not
recognizing their employers contributions.
Fifth Annual MetLife Employee Benefits Trend
Study, 2007
17
Do Workers Understand They Are Giving Their Pay
Raises to the Health System? (With) the
continued rise in health care costs (e.g. more
than 2 times the CPI), the resultant effect (is)
on affordability so that fewer workers choose to
take their employer sponsored coverage even when
they are paying relatively little for the
benefits and that workers are essentially giving
their pay raises to the health care system. -
Helen Darling, NBGH
The Employee Benefit Research Institutes ninth
annual Health Confidence Survey shows that most
Americans rate the health care system as fair
(28) or poor (51).
What am I getting for my health care spend?
Im still funding an inefficient health care
system.
National Health Care Reform The Position of
the National Business Group On Health, 2006
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Health insurance is financial protection in the
event of a significant medical event or
situation. The value of a benefits
package addresses this protection on behalf of
employees and their families.
Other benefits also offer financial protection
in the event of a medical event or situation.
LTD
Critical Illness
DENTAL
LIFE
STD
Long Term Care
19
Why should I consider more than just my standard
core benefits set?
Employee Choice
20
Systems technology and other innovations will
enable employers to offer.
Single
Young Families
UNPRECEDENTED CUSTOMIZATION
Baby Boomers
Pre-Retirees
21
Employees may value certain voluntary advantages m
ore than employers realize.
Fifth Annual MetLife Employee Benefits Trend
Study, 2007
22
Benefits should give us what we want and what we
need.
Help us better understand what we need.
Give us more options and choices.
Fourth Annual MetLife Employee Benefits Trend
Study, 2006
23
Not only am I shifting cost, Im shifting risk.
What do I need to be thinking about to protect my
employees?
RISK
24
My pension will be there.
Social security will be there.
Medicare will be there.
My employer has my back.
Ive saved enough.
My job is secure.
My spouses job is secure.
My health will hold out.
My house is enough to retire on.
Ill inherit money from my parents.
The economy will hold out.
There must be other safety nets.
25
Real risk is increasing.
Recognition of that risk will increase.
The value of risk protection will grow.
26
Financial concerns are significant across
all employee segments.
Fifth Annual MetLife Employee Benefits Trend
Study, 2007
27
Im starting to get the fact that my family is
facing greater risk.
My employer has been cost shifting for several
years.
Risk protection is something that Im starting to
appreciate more.
Its not just about medical costs.
Its about protection around all the risks in
life.
28
What do I need to communicate to my people to
foster individual accountability?
Personal Responsibility
29
When the pollsters asked the same
questions in 2006, 53 said it would be fair
to charge people more with 32 saying it
would be unfair .
Public Opinion Poll
2003 WSJ POLL 37 said it is fair to ask those
that live unhealthy lives to pay higher
insurance premiums. 46 said it would be
unfair.
WSJ.com / Harris Interactive Poll, July 2006
30
Diet, exercise and a healthy lifestyle lay the
foundation for healthy longevity.
Smart, responsible financial planning lays the
foundation for a wealthy longevity.
Do your employees recognize these assets? Do they
think about health as much as they do income?
31
Planning
Healthy Lifestyle
Smart planning for the future depends on an
informed personal approach to health
and wealth.
Health Today
Income
Protection
Preventing Disease
Medical
Health Coverage
How much further would benefits dollars go
if everyone made the connection between HEALTH
and WEALTH?
32
Your health impacts your wealth.
Health decisions today may have an impact on
future finances.
When employees take responsibility for their own
health and wealth
...everyone gets better value from the resources
invested.
33
Why is employee satisfaction and job loyalty more
important than ever?
EMPLOYEE
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Strong correlation.
Fifth Annual MetLife Employee Benefits Trend
Study, 2007
35
Benefits drive both attraction and retention.
Fifth Annual MetLife Employee Benefits Trend
Study, 2007
36
Let me make informed decisions on my own behalf.
With the money youre contributing to my benefits
...define less of it. Let me decide how to spend
more of it.
SATISFACTION?
Fourth Annual MetLife Employee Benefits Trend
Study, 2006
37
Competition for talent appears to loom greater
than ever.
Benefits satisfaction is driven not only by
depth, but by breadth of portfolio.
A rich and diverse portfolio of core and
voluntary benefits is a good business strategy.
38
Given my demographics, what do I need to
anticipate?
Human Capital
39
Sales of reading glasses are on the rise.
Sales of reading glasses are on the rise.
Sunglass Association of America, 2006
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Born between 1946 and 1964.
78 million strong.
OLDER BOOMER
MIDDLE BOOMER
YOUNGER BOOMER
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The average life expectancy is increasing
and many people may not understand how long they
will really live.
42
1935 there were 10 Million Americans over
60. The average 60 year old lived to age 70.
1965 there were 20 Million Americans over
60. The average 60 year old lived to age 75.
Today there are 40 Million Americans over 60. The
average 60 year old lives to at least 80.
2015 there will be 80 Million Americans over
60. The average 60 year old will live past 85.
SOURCE US Census Bureau, 2004, 2006
43
A dwindling labor force
Boomers arent saving enough
Social Security may decline
Medicare financing concerns
Fewer employers offer retiree health
Health care costs continue to rise
Boomers want to work past 65
Changing pension rules
Flexible work options
DELAYED RETIREMENT
US Bureau of Labor Statistics in Public Policy
and Aging Report, 2004. Fifth Annual MetLife
Employee Benefits Trend Study, 2007
44
Generation X,Y,Z
By 2050, the American workforce will be heavily
populated with three generations Gen Xers, Gen
Yers and Millennials (Z). In preparation,
far-sighted employers, insurers and financial
services providers are tossing out the
traditional concept that one benefit size fits
all and, instead, are offering plans and
policies that are more meaningful to an
individual based on where he or she is in life.
Life-Stage Benefits Wooing the MTV and Internet
Generation Employee Benefit News, 12/10/06
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In the next decade, older workers and
foreign-born employees will be a larger part of
the work force.
Understanding work place demographics will be
more critical than ever for benefits success.
The new workforce will drive new demands and new
solutions regarding what benefits to provide
and how they should be delivered.
SOURCE US Census Bureau, Bureau of Labor
Statistics 2006
46
Retention
Benefits Satisfaction
One size does not fit all
THE EIGHT CONVERSATIONS ABOUT BENEFITS
Not health care only
Breadth gt Depth
Ronald S. Leopold, MD, MBA, MPH National Medical
Director, Vice President METLIFE EMPLOYER
SPONSORED BENEFITS