Group Benefits for an Aging Workforce

In today’s episode of Risky Business Paul Martin and Colin Rooke are joined in studio with Ryan Warner to talk about creating a group benefits plan that looks at all ages of the workforce.


Listen to the full episode here, or read the full transcript below

Paul Martin: Welcome to Risky Business, commercial insurance with Butler Byers. This is Paul Martin, the business commentator on CKOM. Joining me in studio, we have Colin Rooke, the commercial risk reduction specialist with Butler Byers, and really, Saskatchewan’s expert in the area of risk mitigation. Also, you’ll hear later, from later in the program, from Ryan Warner who works on the benefit side of the insurance operation.

Paul Martin: But Colin, first of all, we are going to talk benefits today and group plans and these kinds of things. You’ve been talking with employers, are there any hot button issues that are popping up these days? What’s on the mind of an employer when they’re… What questions are they asking you? 

Colin Rooke: Yeah, Paul, as part of our risk reduction work that we do, I mean, employee health and wellness comes up all the time. And we’re encouraging our clients, of course, to form committees, make sure you’re promoting a healthy lifestyle, employees getting active, eating right. It often turns into a benefits discussion, and we certainly include those discussions in our risk reduction workshops. But you get a lot of comments like, when discussing plan designs, and it’s something that Ryan’s going to touch on, but the uptake of massages, for example, when you say, “Maybe I should reduce my limit, because we’ve got a lot of people maxing out.” Or people will come to me and say, “How much room do I have left?” Or, “How many can I get?” And other things, like physio, as well. Often it’s looked at as something that is negative, “Well, if I give them more massage, they’re just going to use it, and they’re just eating up, using it up.” I’ll be honest, I’ve been there, too.

Colin Rooke: But what Ryan’s going to touch on is, from the preventative side, and something that I hadn’t thought of previously, which is why Ryan’s going to join us today, is that that’s a preventative measure. That’s being proactive. If you’ve got something that’s bothering you, if you’re working on that on an ongoing basis and that can keep you, maybe, out of a surgeon’s table and maybe off of short term or long term disability, and certainly maybe avoid narcotic drugs that are going to hit the plan. It’s not necessarily a bad thing, and Ryan’s going to talk about that.

Paul Martin: All right, well, maybe we’ll just get Ryan to slide over to the mic. And really, I mean, what you just described there, Colin described, is straight forward, but underlying that is this debate or conversation that’s been going on around our health system in this country forever, which is reactive versus preventative healthcare. And that’s what you’re addressing with this, Ryan, isn’t it? That’s the topic that’s topic de jure on the minds of the employer?

Ryan Warner: Yes, absolutely. A lot of employers are, well all employers that offer benefit plans, are going to be juggling this dilemma in their own mind of wanting the utilization of the plan to align with the budget. Right? I mean, at the end of the day, the premium’s still a price to the business, so we don’t necessarily find ourselves in a position where we want to promote usage. But what I can say is, by getting people to use those more preventative type offerings, the massage, the chiro, the physio, et cetera, that’s going to help mitigate the long term expenses and make those plans more sustainable. So, short term, little bit of an increase in the overall use or or spend, but longterm big time gain by keeping those at bay.

Paul Martin: In the minds of the general public, I think our health system is one that is about curative. It’s reactive, it’s the conversation point of getting preventive, get in shape, get healthier. These are more recent conversations, I think, isn’t it? Is that fair to say that we’re starting to push more emphasis towards, “Take care of yourself, and then you won’t need the plan so much later down the road”?

Ryan Warner: You got it, yeah. Frankly, the utilization of these paramedical providers out there is been blowing up across the country, and that’s just it, people are acknowledging, “I’ve got this little ache and pain. I should go have it checked out and worked on rather than waiting until it’s a big problem.”

The utilization of these paramedical providers out there is been blowing up across the country…

Paul Martin: Things such as joining fitness facilities, health club memberships, these kinds of things, I would guess 20, 30 years ago that would have been like the super park. Now, it’s almost like part of the program?

Ryan Warner: Definitely. Yeah. A lot of businesses these days are, at least, talking to it and trying to figure out ways to offer additional benefits to their employees. I mean, anything you can do to keep employees happy and healthy is going to benefit the business and help the premiums on things like benefit programs. So, the more you can get them active and focused on healthy living, the far better off that organization’s going to be.

Anything you can do to keep employees happy and healthy is going to benefit the business and help the premiums on things like benefit programs.

Paul Martin: Well, knowing that this is an industry that is built on a foundation of research, it’s all facts, data, actuaries, all that sort of stuff. I mean, do you have any… And I didn’t prep you for this, so I’m going to throw you a question here that might be a bit of a blindsided one, but do you have any data available on a healthier employee, how they perform at work, why they’re a better employee? I mean, this isn’t just about the health thing, it’s also about productivity and output.

Ryan Warner: That’s exactly correct. And we certainly do monitor and engage with our clients on a lot of this. It’s an important factor that we’ve got to be paying close attention to. Somebody that’s stressed out and has their mind somewhere else, whether it’s own personal health our financial issues or family dilemma, all of these things just take your focus away from what that employer’s trying to pay you to do. So, that healthy living is a huge, huge benefit to get your employees to focus there. And once they feel better, they’re going to be far more productive.

Paul Martin: Is there a problem for the industry that it’s insurance providers that are advocating this stuff rather than, say, the health system or… You’re about paying the bills and here you are saying go out and take care of yourself, which, ultimately, reflects on paying the bill, because if people don’t get hurt or don’t get sick, you don’t have the claims. But is it just the industry having a hard time being heard on this topic because of who it is?

Ryan Warner: That’s a really interesting thought to bring up, and I would say that the insurance companies, in particular, they do an okay job at addressing or at least trying to provide some solutions. But I think it’s that in-between layer where, certainly, Butler Byers fits in that broker relationship. I mean, it’s our responsibility to bring ideas and concepts to our clients to help them address the sustainability issue of their benefit programs. So, I think we are being far more creative these days in how we can help address that problem, and we’re only going to keep clients if the plans remain affordable. So, healthy living is a great solution to help mitigate some of the risks that comes along with insurance.

Paul Martin: That’s a really interesting point because, I mean, I’m sure employers are constantly at you about the magnitude of the premium and when I say, “Let’s cut it, let’s cut it,” and their response is cut the benefits that are covered. And your response is, “No, let’s take a different approach. Let’s get a little bit more proactive and talk to the participants within the plant,”, if I got that right. So, we’re going to take a little break. We’re going to come back. I want you to talk about that a little bit, about how the best way to cut the premiums actually to get more active. So, we got to take a little break. You’ve been listening to Ryan Warner who is a benefits expert and works with Butler Byers commercial insurance. You’re listening to Risky Business back after this.

Paul Martin: Welcome back to Risky Business, commercial insurance with Butler Byers, Paul Martin here, and joining us in studio is Ryan Warner, who is an expert in the area of benefits plans for employers. And just before the break, we were talking about… It’s almost ironic, I guess, or what would appear to be a contradiction on the surface of it is that, for employers who are looking to cut the premiums and for their benefits plans, the best way to do it is to encourage their people to get active.

Ryan Warner: Yeah. I think that’s almost a ripple effect of what, hopefully, their ultimate goal is, is to get healthy, active, engaged, and productive people. So, doing these types of things and engaging with your staff to really drive healthy living, a reciprocal effect is the fact that you’re going to get lower premiums in your benefit programs

Paul Martin: And your argument is, you get lower premiums but you get more productive and effective workforce, too.

Ryan Warner: Without question. I think people that are feeling better about themselves and wake up in the morning and aren’t slumming or slouching because their body’s not feeling right or they’re stressed out, they’re only naturally going to be more enthused about what they’re doing throughout their day. 

Paul Martin: One thing, when I talk to business people, I’ve heard this said repeatedly that if the boss comes to work grumpy, the whole building is grumpy. So, this isn’t just for the frontline workers is it? It starts right at the top, and that’s where the tone is set?

Ryan Warner: Absolutely. The more data we get in this industry, as you commented earlier, it’s very clear that it’s not any one person, it’s all of us. The more we focus on making ourselves better and feeling better, the far more productive and focused we’ll be.

The more we focus on making ourselves better and feeling better, the far more productive and focused we’ll be.

Paul Martin: One of the other things that, as a consequence of this, and we’re seeing it, really, it’s societal. I guess, people are living longer, and they’re staying in the workforce longer as a consequence. But many of the rules were built for an era when age 65, boy, that day you got the gold watch, you’re out the door. That was a retirement date, and it got into the psyche of the country, I think, that we all associate 65 with retirement. Not so much anymore, but insurance plans are often still written for age 65, you’re done.

Ryan Warner: Yes. The magic number, the designated retirement age that is no more, it’s far more commonplace now to see people wanting to work well beyond that, even if it’s in a part-time manner. To some degree, they’re not ready to just pack it up and call it quits. So, yeah, the insurance industry’s juggling now and trying to accommodate that nuance.

Paul Martin: Well, what are the issues at play there? I mean, I assume that, as the workforce ages, the health issues and all that stuff get more prevalent and that has an impact on consumption and, ultimately, premiums.

Ryan Warner: Yeah, you’re absolutely correct. I mean, it’s only nature of the beast, and hey, we’re here to talk about risk. I mean, the older we are, the risk goes up dramatically for potential claims in a variety of areas, so naturally, there’s areas of a benefit plan that just the risk in cost, the reward there, is just too significant for an insurance company to have an appetite to price out higher ages. But there certainly are areas in your program that it’s not uncommon anymore to see termination ages at 75, 80, even 85.

Paul Martin: So, the industry is shifting around a little bit on this, but not holus-bolus? It’s selective at this point?

Ryan Warner: Yeah. I think it’s a case by case situation. If you have a workforce that is aging like the most, most organizations do, so if they’ve got a couple of people or even an individual that’s creeping up there and they’re not anticipating that this individual is going to retire, the option exists to extend the termination age. That’s for sure.

Paul Martin: We lived through the Baby Boom generation, was the big one, so that, they move towards retirement, I assume that premiums reflected that. That a big chunk of the workforce was starting to age out, and so that would lead to more claims and whatever. Now, in the past year, we saw this demographic shift where millennials are the largest cohort in the workforce today. Does that mean that over the course of time we can expect that premiums will actually come down for a little while?

Ryan Warner: Well, I’d love to tell you that that’s likely to be the case, but I would suspect that since the insurance companies aren’t in the business of giving away money too often, chances are the premiums are going to stay higher for a little while as they re-coop. Some of the expenses they’ve incurred over the last few years. So, there may be a balancing act. I mean, in every account that we deal with, your premium ultimately reflects your specific claiming patterns, so in a younger demographic cohort, that group is naturally going to have lower claims and, as a result, should have premium reflect that.

Paul Martin: So, theoretically, say someone in the tech firm with a whole bunch of young employees who have just come out of the university or something like that, likely would have a lower claims experience and consequently would have lower premiums?

Ryan Warner: Yeah. I mean, they might have much higher massage, physio, and et cetera, but the rest of their program, in theory, I mean there’s still people out there that have some pretty expensive medications, but in theory it should be lower, for sure.

Paul Martin: These are really interesting challenges because, I think, probably most employers as they look at the annual bill that comes in or the monthly bill that comes in, they immediately respond by saying, “How can I trim this?” and the thought processes go to the wrong place, if I’m hearing what our conversation has been about today.

Ryan Warner:  Yeah. I think it really is a tough decision to come to, but that’s one of the strong suits that we can bring to the table and coaching someone, because you start paring back in the wrong areas of the plan, you can take away those preventative measures or that motivation to do something proactive rather than just take medications to solve your problems.

Paul Martin: That would be the short term gain for the longterm pain? 

Ryan Warner: You got it.

Paul Martin: To hit that old, well-worn adage. And is this a common conversation you have with employers these days, that they’re raising this question with you frequently?

Ryan Warner: Absolutely. And even if they’re not, we’re bringing it to their attention. I think it’s an important conversation that needs to happen.

Paul Martin: Yeah. And what advice are you giving them right off the top? Just rethink what you’re asking for?

Ryan Warner: Yeah. I think it’s, step back and do a high level review to get a grip on what you’re trying to achieve with your benefit plan. I mean, there’s more going on. It’s a living, breathing thing, so understanding what you’re accomplishing with your staff and make it happen.

Paul Martin: That’s often the problem, isn’t it? That that’s the forest and the trees, that people don’t step back to take a look at the strategic implications that are involved?

Ryan Warner: No, I think they jumped to conclusions and react too quickly rather than understanding what’s actually going on underneath the hood.

Paul Martin: Ryan, thank you very much. You’ve been a guest on this program probably three or four times now, and every time you come, there’s always fresh information that you’re bringing in. I guess, for so many of us in this community, most people are employees of an organization, so they deal with this stuff. And having you in here to explain how these are structured, I think, is really quite helpful, so thanks very much. Colin, I’m going to get you to just pull back in here. We’ve got a minute or two left before we reached the end of our time. I mean, you heard what Ryan was saying, anything resonate with you that you’d want to just reemphasize?

Colin Rooke: Yeah. We talk an awful lot about, again, our process and why we do it, and ultimately, we want our clients to become a better customer of the insurance company. Right? So, if you feel your rates aren’t fair, well, have you put in the work to earn more favorable terms? It’s no different on the group benefits side. It’s, “Okay, well, if you have a high claims plan now, what are you doing to get healthy? And how can we tell that story?” 

So, for those companies that are going to put in the work, have a culture of health and wellness, a culture of safety, for example, I mean, it’s going to impact their cost to their benefits plan no different than the costs are impacted on the commercial insurance side for the operations of the business. So, that’s why I wanted Ryan to come on today and just explain that in a little more depth just to say, “Okay, well, again, unhappy with your terms, unhappy with your rates, well, what have you done for them?” a little bit. And rethink what you’re doing and say, “Okay, well, if I invest in a healthy culture, I should save premiums on the health and benefits side.

Paul Martin: So, it’s not about discriminating against the older worker and throwing them out early, it’s really about taking a broader look at the program? 

Colin Rooke: Well, even there, I mean, a healthy 80 year old still in the workforce versus a very unhealthy, again, culture, having an 80 year old remain, I mean, very, very different scenarios. And I just think that, again, business owners need to think about that.

Paul Martin: And that’s why you’re here. You’re quite willing to walk them through that, to take them through, and help them understand the questions that they need to ask and to provide them with answers.

Colin Rooke: Yeah, absolutely. Yeah. Ryan and I will do that together. Yep.

Paul Martin: Well, Colin, thank you very much. And Ryan, I’d like to thank you, as well, for taking the time to join us. You’ve been listening to Risky Business, commercial insurance with Butler Byers. I’m Paul Martin. Join us again next time.