October 8, 2013

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Industry Outlook: Human Resources

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Article

Industry Outlook: Human Resources

October 8, 2013

Really, we have trained an entire generation-plus that healthcare and benefits are too complex. “Here’s your benefit plan. It will be easy. Just pay $20. You don’t need to worry about it.”

At the end of the day, we’re doing a disservice to our employees by not giving them credit—but they’re really smart about how to buy things, right? They can buy cars, they can buy TVs, they can buy houses. They can buy anything they want. And we’re still spoon-feeding them, saying, “OK. This is what you need to know about benefits.”

Well, when the dust settles, they’re going to make a decision. And right now at the state, for example, they’ve made the decision to work for the state because, “I have this kind of a benefit plan.” Well when the benefit plans become vanilla-ized through the exchanges and through the marketplace and the race for the bottom is going on, it becomes less important. They’re no longer coming to the state because you have a benefit plan.

We just need to sometimes stop and say, “You know what? It is expensive. You’re right. It’s a big investment. Where do you want to spend it? How do you want to spend it?”

CEOs are having the same discussion in their boardrooms. “Do I want to be in the benefit business anymore?” I sat next to a CFO a couple of days ago who said, “You know what? It’s not worth it.” They employ 2,000 people, and they’re saying. “It is not worth the pain, the anguish, the time, the energy. This is not our core business. What happens if we don’t get out? What’s the recruitment? What’s the retention?”

CRAGUN: The first time a company like a WalMart or some other large company says, “You know what, I’m done,” it’s going to be dominoes. But that almost makes my job in the government easier, because if everybody gets rid of benefits and where everybody’s in an exchange, I don’t have to deal with that complexity. It might not make it easier for everybody else, but it would make my life easier because benefits hold back everything in the state.

THOMAS: But it also puts pressures on salary.

CRAGUN: But it’s easier to just talk about salary. It’s easier to just talk about how much should you be paying than to be talking about a package that’s got all these pieces with all this self-interest.

THOMAS: But the package is still there. It’s never just about the money. It’s about the lifestyle, it’s about who I work with, it’s the space I work in. It becomes less tangible and harder to articulate in an offer letter, I guess, for lack of a better word. We’re going to give you $50,000 and a really cool new environmentally sensitive office space.

How is the Utah Exchange working?

BULLOCK: We tried the Exchange, and it didn’t work very well for us. There were a lot of management issues—and even management within the Exchange, with people signing up for benefits, and then two months later, they were coming back and saying, “Oh, sorry. That plan wasn’t supposed be in the Exchange. You’re now on this plan, and it’s $100 more a month.”

This last year we actually moved out of the Exchange. Plus the fact that we have a lot of employees that aren’t in Utah; so trying to put them in the Exchange, their costs were significantly higher.  

ROUX: From the things I’ve heard, one of the big problems is they don’t have the underlying technology really ramped up to manage the scale. The enrollment process online was really kooky, and they had to build that thing from the ground up. So it was really not ready for prime time. From what I’m hearing, it still really isn’t.

Couple that with the overwhelming number of plan choices, to have somebody navigate through that—present someone with that many choices and it’s nearly impossible to figure out what the right choice is for them and their families.

HERRING: That’s going to be a big challenge for HR professionals. Right now, you can develop a certain level of expertise in your plan design and your plan partners. You start moving it into the market, and now you’ve got to turn your employees over to become this consumer to make sure that they’re well versed and able to understand the specs.

THOMAS: If you’re a multistate employer, it’s going to be impossible to navigate the state and federal exchanges for your employees. There are going to be too many nuances—who’s eligible, who’s not eligible. So for multistate employers, you’re going to have to take a step back and say, “Here’s the information. That’s the best I can do. But here’s where you get your support, from the navigators.”

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