One way is to offer limited benefit insurance, coverage that helps employees afford basic medical care, office visits, and prescription drugs. Providing insurance to part-time and hourly workers may soon become a "competitive mandatory" in the retail, restaurant, temporary staffing, and hospitality industries. Early adopters are beginning to realize an advantage over competitors in attracting talent and lessening turnover—both expensive alternatives.
The number of uninsured workers in the United States has reached 44 million. Still, the vast majority of CFOs cannot name a single provider of limited benefits for part-time and hourly employees.
Speaking pragmatically, a CFO wants to offer limited benefits because it is the right thing to do. For large organizations entering the limited benefit market, it is good for the employer because it brings a higher standard to the industry as a whole, and it is good from both an internal and external public relations standpoint. In addition, a recent study showed that nearly 85% of HR executives with 2,000 or more employees, 70% of whom were part-time or hourly, indicated that they believed offering limited benefit coverage would help with both recruitment and retention.
Okay, providing insurance elevates the standard of the organization, makes the PR and HR teams happy, and helps in recruiting and retention. Still, it's an expense you simply cannot afford to take on right now.
Wrong.
The employer takes on limited risk and nominal cost—it has the option to contribute or not to the employee's premium. Some organizations pay nothing, while some contribute 100%. The leading national quick-serve restaurant makes an employer contribution for every employee of its corporate-owned stores who opts for coverage. Franchise owner/operators are strongly encouraged to do the same. Naturally, employee participation increases when employers contribute. The premium for limited benefits is also exceptionally affordable—usually about two hours' pay per week.
Another critical factor is flexibility, because every employer group is different. A good broker or consultant will work with the CFO or designated benefits executive to assemble the right combination of benefits for employees—medical, prescription, vision, dental, life, short-term disability. Logan's Roadhouse, a national steakhouse chain, explains that most of its part-time and hourly staff are simply looking for the ability to see a doctor when they catch the flu or have prescriptions filled during allergy season. Logan's Roadhouse Director of Human Resources Tim Mayfield states, "From an employer standpoint, it boosts morale and helps reduce turnover. This is really a step that any organization can take to do right by its employees."
Clearly I agree. Offering limited benefits is an investment in your most valuable asset—your workforce. It is a way to provide benefits without much, if any, cost to the employer. There's also an interesting byproduct: part-time and hourly staff don't have the stigma of being considered "second-class citizens," which is another boost for morale, productivity, and retention.
Finally, consider Uncle Sam. Regardless of your politics, there is pending legislation in 31 states related to employer benefits, leaving business owners rightfully concerned with their need to provide benefits to all employees. I believe that if employers proactively offer limited benefits, it's one step towards mitigating the need for legislation and governmentally mandated insurance, which might turn out to be far more expensive and much less flexible.
For CFOs really into numbers, it's pretty simple to calculate how reducing turnover, even by a few percentage points, can be a tremendous positive boost to the bottom line. This is especially true in the restaurant and retail industries, where turnover rates are often well over 80%.
Should you consider offering limited benefits, keep in mind that limited benefits should never mean limited service. Make sure the provider has multiple enrollment options, a national range of accounts, access to quality healthcare providers in network, and excellent member support including a toll-free, 24-hour nurse-advisor line for employees.
No, this is not catastrophic coverage, but for many part-time and hourly workers, limited benefits can make the difference between choosing to see a doctor or going without treatment. Besides, at the end of the day, what organization would not want healthier, happier, and more motivated employees?
About EssentialCare:
EssentialCare is a solution from BCS Insurance Company and BCS Life Insurance Company and Planned Administrators, Inc. For more information on EssentialCare, visit the dedicated website www.essentialcare.com.
About Planned Administrators, Inc.:
Founded in 1981, PAI is a third-party administrator (TPA) of healthcare plans focused on healthcare claims administration and utilization management. PAI delivers savings from some of the nation's biggest and most-preferred provider networks and superior customer service for limited benefit plans.
About BCS Insurance Company:
BCS is known for excellence in product development and special-risk underwriting. With more than 50 years of experience in the group insurance market, BCS provides strength and experience one can trust.
