Human Resources Advisory Committee
Meeting Summary
February 9, 2006
Present: Brent Fryrear, Angela Lewis-Klein, Dhiane Bradley, Linda L. Wilson, Robin Harris, Pamela Feldhoff, Alan Levitan, Martyna Warren, Mary Mundt, Gina Bertocci, Suzanne Webb, and John Ralston
Visitors Present: Donna Bartman, Kim Noltemeyer, Brian Buford, Nancy Sasse, Charlotte Albrecht, Curt Dame, Nick Turano
Absent: Vanessa Cunningham, Rick Feldhoff, Daniel Hall, Nancy Theriot
1/12 Meeting Summary
· No changes recommended.
New Benefits Manager (Nancy Sasse)
· Presentation of pros and cons of offering voluntary benefits
· PROS
o Convenient payment through payroll deductions.
o Voluntary benefit plans are usually portable.
o Gives employees more choices in their benefit plans.
o Enrollment company provides trained specialists to help employees choose benefits; provides electronic files for payroll deductions.
· CONS
o Employees rely on university to choose best products and service and may not shop around for the best fit of benefits.
o Life, health and disability voluntary products require some underwriting; employees who need coverage immediately will not be able to buy it.
o Enrollment companies are compensated by commissions from the carriers, even if employees are salaried – motivation to sell products.
o Not a good buy for employees: loss ratios (claims paid to premium) are much lower than traditional benefit programs.
· Other thoughts/questions:
o Long list of voluntary benefits may make employees think they are better covered, when in reality they may not be.
o What is the standard at other universities?
o Concerns about enrollment company selling products more than using their expertise to advise employees objectively.
HRAC Charter
· Set to expire next month.
· Please let your chairs know your feedback about the committee; they have been asked to give their opinions as well.
Voluntary Benefits RFPs (Curt Dame, Nick Turano)
Please e-mail Nancy Sasse with any feedback/questions re these recommendations. For more detailed information, see handouts from meeting. Please also note that presentations were shortened due to time limitations.
· PERSONAL LINES (Home and Auto Insurance)
o Carriers were asked to re-bid based on different zip codes and pricing parameters, from discussion at previous HRAC meeting.
o Rates also based on $500 deductible, $500 comp and collision.
o Carriers compared: Liberty Mutual, MetLife, St. Paul Travelers.
o AON’s recommendation: Liberty Mutual.
o AON recommends keeping auto & home enrollment separate from other voluntary benefits through enrollment company (must call to get a quote and talk to a customer service representative in order to enroll).
o This would also keep payroll deductions for home & auto separate, making it easier to recognize if premiums change.
o Enrollment company could still communicate the personal lines program to employees, giving a number to call or website to access.
o Question: do these carriers recognize families that fall outside of the categories used for possible rates (i.e. same-sex couples, domestic partnerships) with the same rates/discounts? àAON will take this question back to the carriers for more clarity.
· CANCER, CRITICAL ILLNESS
o Tax-free benefits, not claims driven process à lump sum benefits that will pay upon diagnosis for reimbursement of related expenses.
o Carriers compared: AFLAC (Cancer and Critical Illness), Allstate (Critical Illness), Colonial (Cancer and Critical Illness), Continental American (Critical Illness), ING (Critical Illness), KMG (Cancer – 2 products).
o Individually underwritten – coverage is not a guarantee for all employees.
o AON’s recommendation: ING.
§ Cancer insurance applies to all internal cancers. Coverage available if employee has not been diagnosed with cancer within the last 10 years.
§ Critical illness insurance: coverage available if employee has not had certain serious illnesses in the last 10 years (stroke, heart attack, AIDS, renal failure, etc. – see handout for list of covered illnesses).
o Offering both programs provides flexibility to those who have had cancer in the last 10 years – they could not get cancer insurance, but could get critical illness insurance with an exclusion for cancer.
o AON is in the process of seeking loss ratios from these carriers.
· PERMANENT LIFE
o Two types of permanent life insurance available:
§ Whole Life: “provides absolute guarantees for fixed, level premiums and level death benefits.” This is a portable benefit; missed premiums must be repaid or borrowed (reduces death benefit)
§ Universal Life: “has flexible premiums and adjustable death benefits, and offers a higher death benefit for the same premium.” This is a portable benefit as well; missed premiums cause no reduction in death benefit.
o Carriers compared: Allstate (Universal Life), Colonial (Universal Life), ING (Universal and Whole Life), KMG (Whole Life).
o AON recommends: Whole Life through ING.
· SHORT TERM DISABILITY
o Definition: disabled in the event of a non-job related accident or illness à doctor must certify that employee cannot return to work.
o Carriers compared: Allstate, Colonial, KMG.
o Allows employee to purchase benefit amount of up to %60 or more of gross monthly salary.
o AON recommends: KMG.
· ENROLLMENT COMPANY
o Objective of having an enrollment company is to communicate programs available to employees, enroll employees through on-on-one meetings, and administer programs by providing customer services, such as payroll deductions (which can be consolidated through an enrollment company).
o Carriers compared: Allstate, Colonial, The Farmington Company.
o AON recommends: Farmington.
o Colonial and Allstate only do enrollment for their products, use commissioned representatives.
o Farmington uses salaried representatives, but the company receives a commission from carriers. à This still causes concern about pressure on representatives to sell products, rather than to provide more objective information to employees.
o Farmington is the largest benefit enrollment company in the country. 6-8 week setup period, would meet with out programmers to set up a database for enrollment.
Future Agenda Items
March
RIF Policy Review
HRAC Charter Renewal
Reports from Work Groups:
· HRAC Shared Leave
· University-Wide Retirement Recognition