Benefits Analysis: Don Guanella Village Developmental Programs

Part I: Benefit Matrix Part II: Inventory of Benefits

Yuzheng Liu Charles Yerkov RMI 3501 Dr. Drennan Fall

Benefit Analysis: Don Guanella Village

2011
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Table of Contents
Benefit Matrix - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2 Summary Of Benefits - - - - - - - - - - - -- - - - - - - - - - - - - - - - Inventory of Health Care Benefits - - - - - - - - -3 - - - - - - - - - - - - - - - --4

Introduction - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -4 Medical Expenses- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -4 Independence Blue Cross Personal Choice-- - - - - - - - - -- - - - - - - - 4-5 Keystone Health Plan East HMO - - - - - -- - - - - - - - - - - - - - - - - - - - - 5-6 Keystone Point-of-Service (POS)-- -- - - - - - - - -- - - - - - - - - - - - - - - --6-7 Dental - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --7-8 Concordia Flex Dental Program - -- - - - - - - - - -- - - - - - - - - - - - - - - ----8 Aetna Dental Maintenance Organization (DMO) - - - - - - - - - - - - - - - -8 IBC Vision Program- - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --8 Standard Prescription Program -- - - - - - - - - - - - - - - - - - - - - - - - - - - - ---- -9 Loss of Income: Death - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --9 Life Insurance- - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -9 Loss of Income: Short Term Disability-- - - - - - - - - - - - - - - - - - - - - - - - ---10 Long Term Disability - - - - - - --- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -10 Retirement Benefits - - - -- - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 11 403 (b)- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 11 Other Exposures - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -12 Educational Assistance --- -- - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - ---- 12 Employee Assistance Program- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -12

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Benefit Matrix
Exposure Analysis for Don Guanella Village Developmental Program
Loss Exposure Provided Coverage / Benefit Provided

Loss of Income: Medical Expenses

Hospital / Vision Prescription Major Medical LTC Retiree Health Care Dental Physician Yes Yes Yes Yes Yes Yes Yes Personal Choice PPO, Keystone POS, Keystone HMO All health plans* All health plans* Keystone HMO Long-Term Care Program COBRA Personal Choice PPO, Supplemental Dental Insurances***

Loss of Income: Death

Non-Accidental, Non-Occupational Death Accidental Death Occupational Death Yes Yes Term Life Insurance, 403(B) plan, OASDI Term Life Insurance, 403(B) plan, OASDI, Workers Compensation Yes Term Life Insurance, 403(B) plan, OASDI

Loss of Income: Unemployment

Unemployment Yes Unemployment Insurance through the state of Pennsylvania

Loss of Income: Disability

Short Term, Non-Occupational Long Term, Non-Occupational Short Term, Occupational Long Term, Occupational Yes Yes Yes Yes STD, 403(B) plan, OASDI, Paid Time Off LTD, 403(B) plan, OASDI STD, 403(B) plan, OASDI, Workers Compensation LTD, 403(B) plan, OASDI, Workers Compensation

Loss of Income: Retirement

Retirement Yes 403(B) plan, OASDI

Other Loss Exposures

Educational Assistance Legal Expenses Yes Yes Dependent, Spouse Benefits under AD&D Insurance Employee Assistance Program**

* = Participants in any of the three medical plans (Personal Choice PPO, Keystone POS, Keystone HMO) are automatically enrolled in the Vision and Prescription Drug Plans. **= EAP provided by University of Pennsylvania, details in Part II (inventory of benefits). ***=Provided and administrative by United Concordia, a supplemental coverage among plans described in *.

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Summary of Benefits
Benefit Plan
IBC Personal Choice PPO(comprehensive)* IBC Keystone POS (comprehensive)* IBC Keystone HMO (comprehensive)* CIGNA Long Term Care IBC Supplemental Major Medical*** Aetna Dental PPO A (Excellent)** Contributory bbb (Adequate)** N/A Fully Contributory Contributory N/A Contributory N/A Contributory

A.M. Best Rating

N/A

Financing
Contributory

Funding
Fully Insured Fully Insured Fully Insured Fully Insured Fully Insured Fully Insured

Eligibility
Full-time Active Employees and Dependants Full-time Active Employees and Dependants Full-time Active Employees and Dependants Full-time Active Employees and Dependants Full-time Active Employees and Dependants Full-time Active Employees

United Concordia Flex Dental Program UNUM STD

A- (Excellent)**

Contributory

Fully Insured

Full-time Active Employees

bbb (Adequate)**

Non-contributory

Fully Insured

Full-time Active Employees

UNUM LTD

bbb (Adequate)**

Non-contributory

Fully Insured

Full-time Active Employees

UNUM Term Life Insurance Unemployment Compensation VALIC 403(b)

bbb (Adequate)** N/A

Fully Contributory

Fully Insured

Full-time Active Employees

Contributory

Fully Insured

Full-time Active Employees

N/A

Contributory

Fully Insured

Full-time Active Employees

PENN Behavioral Health EAP Educational Assistance Paid Time Off

N/A

Fully Contributory

Fully Insured

Full-time Active Employees

N/A

Non-contributory

Self-funded

Full-time Active Employees

N/A

Non-contributory

Self-funded

Full-time Active Employees

*= Comprehensive plan means the referred plan includes vision and prescription drug. **= Source of A.M. Best Rating is http://www.ambest.com/ ***= The supplemental Major Medical Plan is managed Independence Blue Cross. Employees may choose this optional benefit during open enrollment in the plans provided by IBC, which is included in the alternative PPO plans, Keystone POS and Keystone HMO.

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Inventory of Health Care Benefits

Introduction
Don Guanella Village is headquartered in Philadelphia and provides services for intellectually disabled boys. The organization has 250 full time employees and roughly 300 total employees. The organization offers a competitive employee

benefits package in order to maintain and attract competent employees.

Don Guanella offers coverage through a variety of Independence Blue Cross (IBC) programs. IBC is the leading provider of employee health benefits in the

Philadelphia region and has offered quality health care products and services for over 65 years.

Medical Expenses Independence Blue Cross Personal Choice

Don Guanella offers their employees preferred provider organization (PPO) coverage through Independence Blue Cross. The NCQA issued a full rating,

which is the highest rating, to Personal Choice, and it was the first PPO in Pennsylvania to be designated as such. The plans are beneficial to the employees because IBC uses community rating. with three months tenure. To enroll, one must be a full-time employee

If an employee meets the two requirements, they have the

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Benefit Analysis: Don Guanella Village

option to enroll in any of the fully insured plans.

Upon enrollment in a plan,

employees make their contributions via payroll deductions on each check they receive. Employees have the choice between two plans, Personal Choice 5 and Personal Choice 10/70/20, and the plans are nearly identical besides out of pocket expenses and deductibles. Under both PPOs from IBC, employees have the freedom to seek care in-network and out-of-network. IBC provides a list of the network, which includes There is no need to select a

over 58,000 doctors and 100 hospitals, on their website.

primary care physician to coordinate care and the insured is free to visit specialists directly without a referral. Out-of-pocket expenses are greater for out-of-network

providers. The insured must also file a claim to be reimbursed for out-of-network provider visits, whereas there is no requirement to file a claim for in-network provider care. As an example of differences in the plans, primary care visit co-payments cost

the insured $5 (Personal Choice 5) vs. $10 (Personal Choice 10/70/20). Also, the out-of-network coverage for Personal Choice 5 is 80% whereas it is 70% for Personal Choice 10/70/20. In general, the benefits provided in the 10/70/20 are more Only full-time employees are eligible for

comprehensive than the more basic 5 plan.

these plans. A full-time employee is defined as an employee who works 65 hours over each two week period.

Keystone Health Plan East HMO

Another option provided by Don Guanella is an HMO through Keystone, which is a subsidiary of Independence Blue Cross. The plan provides a complete range of
Benefit Analysis: Don Guanella Village Page 5

benefits, and the insureds overall medical needs are coordinated by a Primary Care Physician. The network to choose a Primary Care Physician includes over 22,000 doctors and 100 hospitals. A referral is needed for specialty care, and it is

coordinated by the Primary Care Physician. Key features of the plan include no claims forms, no deductibles, and low out-of-pocket expenses. The plan also

provides access to programs to treat chronic illnesses and access to wellness programs at no additional cost. The copayments for all of the care or visits provided in the

plan are $5, except for emergency room care which is $35. The emergency room care fee is waived if the insured is admitted to the hospital. of hospital care, lab work, and x-rays. The plan also covers 100%

In the even that your PCP is not available,

there is always a physician on call to assist an insured. The plan is fully insured and community rated. The plan is offered to full-time employees with three months (90 days) of tenure. A full-time employee is defined as an employee who works 65

hours over a two week period. Employees pay for the plan on a contributory basis via payroll reduction.

Keystone Point-of-Service (POS)

Don Guanella offers a Keystone Point-of-Service plan which offers all of the benefits of the Keystone HMO, but features the freedom to access any physician or hospital without a referral. The plan is fully insured and community rated. The

out-of-pocket costs for covered services are very minimal, if there is any cost at all. Insureds are allowed to visit any doctor or hospital through the self-referred care
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feature.

The costs of the medical expenses are shared by the insured through The network of doctors available as Although

deductibles and coinsurance provisions.

Primary Care Physicians includes over 20,000 doctors and 100 hospitals.

a referral is not required, an insured who obtains a referral for specialty care receive the maximum benefit level. The plan also features wellness program access at no

additional cost and makes programs available that manage chronic illnesses. Claims filings are not required for referred care, but a claims filing is necessary when seeking self-referred care. Co-payments under the plan are $5 except for emergency care, which is $35. There is no deductible for a referred care, but for self-referred care there is a $200 deductible per individual. The out-of-pocket maximum costs range from $650 to $1000. The plan is financed on a contributory basis and is made available to all full-time employees with three months (90 days) of tenure. A

full-time employee is defined as an employee who works 65 hours over a two week period.

Dental Concordia Flex Dental Program

Don Guanella offers two options for dental care. They offer Concordia Flex Dental, which is a supplemental plan from IBC. The program is a traditional The

fee-for-service dental program and features freedom of provider choice. network includes 4,800 dentists and specialists to choose from.
Benefit Analysis: Don Guanella Village

Cost savings for the

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program average 30%.

Savings are greater when an in-network provider is utilized.

The plan is offered to full-time employees and is offered on a contributory basis.

Aetna Dental Maintenance Organization (DMO)

The other dental care option offered by Don Guanella is provided by Aetna. The DMO provides cost-effective care through a primary care dentist (PCD). There is a co-pay of $10 per visit and a referral is required if the insured seeks care from a provider outside of the DMO network. There is no annual maximum limit for the plan and there are no deductibles. The plan is offered to full-time employees and is offered on a contributory basis.

IBC Vision Program

Don Guanella offers a vision program that is administered by Davis Vision. The comprehensive vision care benefits of the plan include eye exams, eyeglasses, and contact lenses. Certain eyeglasses approved by Davis are paid-in-full, and if an insured wishes to obtain glasses that are not paid-in-full the plan will cover a portion of the cost. The plan also includes discounts for laser eye correction and

replacement costs for broken or damaged lenses or eyeglasses. Davis Vision carries an A.M. Best rating of A. The plan is fully insured and made available to full-time employees. Full-time employees can enroll in the plan after three months (90 days) of tenure.

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Standard Prescription Drug Program

Don Guanella offers a prescription drug plan for employees through IBC. An insured shares the costs through a two-tiered copayment arrangement.

Non-participating pharmacies copayments are determined using a designated cost percentage and participating pharmacies have standard generic or brand copayments. There is no need for an insured to pre-select a pharmacy, and the network includes over 60,000 pharmacies. Claims filings are not required for participating pharmacies The plan

and eligibility at a desired pharmacy can be conveniently verified online.

is offered on a contributory basis. Employees become eligible after three months (90 days) of tenure.

Loss of Income: Death

Life Insurance
Don Guanella offers its full-time employees Optional Term Life Insurance to address the potential loss of income due to non-accidential/non-occupational death, accidental death or occupational death. The chosen term life insurance, provided by Unum, is Annually Renewable Term Insurance. Each year, its policies cover $10,000 per individual at a fee of $30 per policy. This Optional Term Life Insurance is an employee-pay-all, or fully contributory, benefit.

Loss of Income: Short Term Disability

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Don Guanella provides all employees with Short-Term Disability (STD) Insurance through Unum. All employees are eligible upon hiring. AM Best has

Unum rated as adequate (bbb). The plan is fully insured, voluntary, and offered on a non-contributory basis. Short term disability coverage provides benefits when you

are unable to work for a short period of time due to a covered illness or injury. Employees are covered for 30-60% of weekly eligible compensation for up to 90 days. Don Guanella also offers 10 paid holidays, 2 weeks of vacation, 12 sick leave days, and 3 personal days per year.

Long Term Disability

Long-Term Disability Insurance is provided by Don Guanella through Cigna. It

is offered to all employees. The plan is fully insured and offered on a non-contributory basis. If an employee is unable to work after the 90 day period for The plan will provide

STD, they can become certified to receive LTD benefits.

compensation of 50% of eligible weekly salary to an employee.

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Retirement Benefits
403 (b)
Full-time employees of Don Vesting Schedule Guanella are eligible to participate in the organizations 403(b) plan after three months (90 days) of tenure. 403(b) plans are reserved for public education organizations, non-profit employers, hospitals, and self-employed ministers. An Years of Service Less than 2 2 3 4 5 0% 25% 50% 75% 100% Percentage

employee must wait 5 years to be 100% vested for matching contributions made by Don Guanella. The vesting schedule incrementally increases by 25% each year. Pre-tax contributions made to the plan can be made up to $15,500 each year. The employer match limit is $46,000, so in other words the employer can add up to another $30,500 per year. year after the age of 50 In addition, you can contribute an extra $5,000 per

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Other Exposures
Educational Assistance
Don Guanella has an Educational Assistance Program that provides any degree seeking employees $500 of assistance per semester. The benefit is extended to all employees who have 1 year of tenure. An employee seeking to benefit from the coverage must be approved by management and maintain a 2.0 GPA. The plan is offered on a non-contributory basis and is self-funded.

Employee Assistance Program

Don Guanella offers an EAP through the University of Pennsylvania Behavioral Health. The EAP is made available at no extra cost to all employees upon hiring. Penns EAP provides counseling for professional and personal life issues. One-on-one sessions are offered and fully covered by Don Guanella. The program can be used to treat serious personal or professional concerns, such as general anxiety, depression, substance abuse, burnout, coping with illness, the loss of a loved one, relationship challenges, or resolving interpersonal conflicts. All information is kept

completely confidentially so that the employer is not made aware of who has been seeking assistance. rate. Don Guanella covers all costs for the EAP via a flat monthly

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Don Guanella Village Developmental Programs

Part III: Benefit Analysis

TUid: 912580772 TUid : 912459138 RMI 3501 Dr. Drennan Fall 2011

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Table of Contents
Introduction - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2 Overall Consideration in Design- - - - - -- - - - - - - - - - - - - - - - Goals - - - - - - - - - - - - - - - - Demographics - - - - - - - - - - - nefits Problems, Issues, Concerns, and Considerations in the Design of Other Non -Retirement Benefits Conclusion A Letter of Appreciation- - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Appendix - - - - - - - - - - - - - -3 - - - - - - - - - - - - - - - --4 - - - - - - - - - - - - - - - --4

Problems, Issues, Concerns, and Considerations in the Design of Health Be

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Part III Decision Making and Plan Design Analysis

_____________________________________________________________________________________________________________________________________________________________________

Introduction
Headquartered in suburban area of the Greater Philadelphia Region, Don Guanella Village (DGV) is an independent non-profit organization established under The Archbishop Christian Church of Central Philadelphia. It has provided services for intellectually disabled young men since the late 1950s. The organization has 250 full-time employees and roughly 300 employees in total operating in local areas such as Delaware, Philadelphia and New Jersey. Currently, almost all of DGVs full-time employees are participating in health plans and other provided benefit plans.

Throughout this project, we interviewed Michael Schardt. Mr. Schardt is the Human Resources Director and Employee Benefits Specialist of Don Guanella Village, who works directly with the chief benefit designers of the organization and shares a fair amount of responsibilities including: benefits plan design, administration, plan distribution, communication and regulatory compliance. He and his colleagues work hard to the make sure employees receive satisfying benefit packages for those who need them. With his help and in-depth knowledge about employee benefit and their design, we were able to gather information to analyze current benefit plans of DGV.

Overall Consideration in Design

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Goals
When asked about the reason of providing benefit packages for employee, Mr. Schardt mentioned that it is important for DGV to provide competitive employee benefits even as a non-profit organizations. Since a large proportion of current employees have limited knowledge of their benefits as they are originally from or having family in West Africa, it is Mr. Schardt and his colleagues responsibility to educate the employees and understand their needs and demands. It is not only because of the conventional goal to attract and obtain talents, but also because DGV cares about the well-being of its employees, and therefore it is critical to offer benefits that make sense to employees and their needs. As a residential facility, Don Guanella Village promotes family values among employers, employees and their patients. A comprehensive benefits package helps to create a happier work force and therefore increase productivity of the organization.

The organizations employee benefit plan designers are committed to design a comprehensive benefit plan that satisfies employees needs without placing a heavy financial burden on the organization. With this goal in mind, Mr. Schardt and his colleagues offer benefits that are only required by a considerable amount of employees. On the other hand, Mr. Schardt is also aware that the benefit plan should be complied with the organizations fiduciary responsibility under ERISA. In this case, Mr. Schardt has offered specific benefits on a fully contributory basis to create more options for the employees.
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Demographics
In designing of the benefits plan, Mr. Schardt has taken into account of the organizations factors such as employees occupation, gender and originality. DGV has around 300 employees in total, in which around 83% are full-time employees; 60 to 70% of all employees are female; 70% are from countries in West Africa or still have family in those countries. Unfortunately, there hasnt been statistics on age or family composition. Most of the employee benefits are designed for full-time employees; however, some of the part-time employees may find themselves eligible for some of these benefits, such as retirement pension plan, once they have worked enough hours. A full-time employee is defined as an employee who works 65 hours over a two week period. This design is to not only attract full-time employees, but also encouraging part-time workers to participating more of their services.

Moreover, with large amount of West African employees and female employees, it is not unusual when employees have to leave their works for months due to personal reasons such as death of family members or pregnancy. Complying with the Family and Medical Leave Act of 1993, DGV utilized paid-time-off benefit to solve this problem. It gives employees flexibility in management of their vacation days and sick days according to their special needs.

Mr. Schardt also indicates that has not yet been domestic partners benefits in the organization as because it is not applicable to DGV, and he does not see it will be an
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issue in the future.

Funding and Financing Considerations

Almost all benefits are fully insured by an insurer, besides the funding for Paid Time Off and Educational Assistance. Out of the consideration of cost, DGV finances most of health benefits on a contributory basis. At the same time, the human resource teams of DGV worked hard to help with employees choose among Personal Choice PPO, Keystone HMO, Keystone POS and other supplemental benefits that match their medical needs as well as personal incomes. The organization also chose to offer Short-term Disability Benefit, Long-term Disability Benefit, Educational Assistance and Paid Time Off on a non-contributory basis, securing the necessary coverage for employees. The demographics and the nature of most employees work also encouraged the decision of offering Disability benefits full of cost. Last but not least, the disability benefits had to be coordinated with federal and Pennsylvania social insurance program.

Problems, Issues, Concerns, and Considerations in the Design of Health Benefits Cost Inflation
Unsurprisingly, the biggest concern of DGV regarding of benefits is the rising cost of health insurance. Mr. Schardt has mentioned more than once about the relatively low cost of healthcare in the 1990s and the following cost inflation.
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Because it would unimaginable for DGV to not offering health benefits for its employees, and the Employer Mandate of healthcare is going into effect in 2014, it is the benefit plan designers priority of reduce the cost without sacrificing the necessary employee benefits coverage.

Recently, due to the high price of health insurance, managers like Mr. Schardt realize that having three different health care plans is costing the organization more than ever before. DGVs provider, Independence Blue Cross (IBC), has increased their premium charge of all three plans offered to DGV at the beginning of every enrollment period. For example, DGV saw an 18.5% increase in its premium in their Personal Choice PPO plan this year. Therefore, benefit managers want more employees to select the Keystone POS-type HMO or Keystone HMO. If so, DGV will see lower premium increases with their cost control strategy.

Administrative cost increase can be significant, too. With 250 eligible full-time employees, DGV is categorized into the middle or large groups, which creates medium level of administrative costs relative to its premiums. Mr. Schardt and his colleagues usually sit down with the individual employee a week or so prior to eligibility period (usually April to May) to help them with selection. In fact, they could impose a waiting period prior to eligibility to cut down administrative burden for employees who are going to quit, while also reducing the risk of adverse selection problem.
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Prescription Drugs
DGV offers a prescription drug plan through IBC that includes non-formularies. The additional cost of non-formularies has become a luxury option for most employees as it usually charges $15 more than the regular formularies. DGV could be able to reduce cost of prescription drug plans by excluding non-formularies; however it may also create a paradox as it conflicts with the goal of creating a comprehensive coverage for employees.

Dental Care
DGV offers a dental care options for employees and their dependents with lower cost than regular dental program. The Concordia Flex Dental Program, managed by United Concordia which is a subsidiary of IBC, provides dental coverage for full-time employees. This program saves cost at an average of 30%. The Aetna Dental Maintenance Organization (DMO), managed by Aetna Philadelphia, is designed for eligible dependents of full-time employees. DGV could consider change its offering status from contributory basis to fully-contributory basis to cut down the cost.

Adverse Selection
Adverse selection is essentially a potential concern in every health benefits plan. With three health plans in a risk pool of 250 employees, there is a possibility that one plan, such as Keystone HMO, is attracting low risk candidates due to its low premium while Personal Choice PPO is attracting higher risks. Fortunately, IBC is an experienced insurer in making suitable pricing and taking on all these risks.
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Problems, Issues, Concerns, and Communications in the Design of Other Types of Non-Retirement Benefits
Short Term Disability
Don Guanella provides all employees upon hiring with Short Term Disability Insurance through Unum. A huge issue within the organization is the fact that nearly 70% of employees are female. Women are frequently out on maternity leave, and although the organization has sufficient coverage in the event of a pregnancy, our contact stated that many women simply choose not to return to work after their pregnancy. A large portion of Don Guanellas workforce is comprised of African Our contact

immigrants and they have very large families that need them at home.

has observed that women on maternity leave try to collect disability for as long as they possibly can because they are receiving payments without having to work, which is a huge novelty to immigrant workers. The issue can be classified as a moral hazard and it is the duty of the human resources department to maintain contact with workers that take maternity leaves to be sure that they will be returning in a timely manner. If workers continue to seek to collect payments for the full 90 days or

longer, Don Guanella could be faced with steep premium increases. The problem cannot be offset by reduction in PTO, as it is crucial to maintain employee morale in a high stress job dealing with mentally challenged patients.

Long Term Disability

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Don Guanella has Long Term Disability insurance through Cigna. An issue regarding LTD insurance in when workers collecting payments from the coverage decide to return to their country of origin for long periods of time while collecting. Our contact cited an instance where an employee was collecting LTD (for a reason he would not specify) and returned back to Liberia. It was very difficult to contact the

employee regarding her health status and the process of maintaining coverage her coverage was further complicated by diagnoses by Liberian doctors that could not be verified. Without going into details, our contact stated that the coverage payments were terminated and there were no legal implications resulting from the event, but the organization was faced with an uncommon problem that was difficult to handle effectively.

Communication
Don Guanella faces a difficult task in communicating benefits offered to their employees, however they use numerous strategies to make the process easier. Benefits are essential in the compensation of any employee, and the human resource department at Don Guanella goes the extra mile in fulfilling their benefit communication duties. The human services industry has a turnover rate that is much higher than average, so benefits are a huge factor used to attract and retain hard working employees. Mr. Schardt, along with other members of his department, meet individually with every employee in order to effectively communicate benefits
Benefit Analysis: Don Guanella Village Page 22

packages and resolve any issues anyone may have. The process is certainly not a short task, and it can potentially take up a significant amount of time from an employees work day. Don Guanella offers an extensive benefits package and it is

crucial to make their employees fully aware of what they are receiving and how valuable each benefit is. By meeting with employees individually, the organization Another strategy that DGV uses is a

communicates their benefits super-effectively.

large monitor in the employee cafeteria that displays important updates regarding benefits, open enrollment periods, and contact information. Pamphlets are also

distributed to employees that detail costs and compensation, along with monthly email reminders that supplement what is displayed in the cafeteria.

Regulatory Compliance
Don Guanella takes all of the necessary steps in order to comply with all federal regulations regarding employee benefits. COBRA, ERISA, and HIPAA are three

major regulations that the firm must adhere to currently. The looming implications from PPACA are also a consideration that DGV must plan for. To date, DGV has not

experienced any issues relating to regulatory compliances because the benefits specialists are meticulous about perfecting their work.

COBRA
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COBRA is the most significant piece of legislation that DGV has had to maintain compliance with because of the multitude of requirements the act encompasses. DGV has been conscientious of making employees and their dependents fully aware of when they exceed age limits of health insurance and have not experienced any issues regarding that aspect. The organization has also not had any problems Although there is a high turnover rate in the

regarding continuation of coverage.

human services industry as a whole, DGV does not experience turnover in line with the national rates. Employees who voluntarily or involuntarily leave the

organization are often making an immediate switch to another employer and DGV properly informs them of how to utilize COBRA coverage until their new benefits package takes effect. COBRA is a complex issue that has historically been

challenging for many benefits administrators making common mistakes, but DGV has done an admirable job properly complying with COBRA regulations.

ERISA
Don Guanella has not experienced any issues regarding ERISA. The

organization does not provide defined benefit retirement plan or post-retirement health benefits. DGV was on the fringe of being ERISA exempt because of its

Catholic Social Service status, but since it has become more privatized they are forced to comply. DGV uses a five year vesting schedule for their 403 (b) defined
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Benefit Analysis: Don Guanella Village

contribution plan, as detailed in Part II, in order to meet ERISA requirements.

HIPAA
Don Guanella has been compliant with HIPAA and does not have any issues regarding denial of coverage because of the nature of IBC. No employees that may have had a preexisting condition coverage denial or discrimination due to health status issue. The organization has consistently exemplified their willingness to go the extra mile in order to meet all regulatory requirements and maintain employee morale.

PPACA
The issue of health reform has been somewhat of an administrative burden to Don Guanella but the organization is taking the proper steps to comply. They have taken the steps necessary to be sure to report employer-sponsored health coverage on an employees W-2 and have distributed proper documentation summarizing benefits to plan enrollees. They have not had any discrimination problems regarding HCEs. DGV is also aware of any potential mandates that may or may not come into effect and they have begun some planning strategies to adhere to them. Mr. Schardt stated that he doesnt anticipate much more than more than further administrative burden from the PPACA in relation to DGV.

Cost Management

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Rising healthcare costs is a huge issue for any large firm, including DGV. Mr. Schardt stated that many employees switched to the Keystone Health Plan East HMO during the last enrollment period. He stated that les people are enrolling in the Personal Choice program because of the costs in comparison to other plans. The employees at DGV are not highly compensated by any means, so cost is the main factor in their decision making. Mr. Schardt stated that the organization may

consider eliminating the Personal Choice option in favor of another option such as a consumer driven health plan. He stated that a switch is not imminent by any means, but statistics show the HMO and POS are most popular amongst employees. Both plans feature networks that are broad enough to satisfy the needs of all employees. DGV is still exploring any options they may have regarding adding or eliminating plans and Mr. Schardt emphasized that they will make their decisions in the best interest of employees, because employee morale overrides cost.

Post-Retirement Health Benefits

Don Guanella does not offer any post-retirement health benefits. structure that DGV currently offers is very rich. The benefits

As an organization in an industry

with high turnover rates, it is not necessary to offer post-retirement health benefits. Mr. Schardt said that the option has been explored to some extent, but he does not foresee any change in the benefits structure regarding the offering of post-retirement health benefits.
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Conclusion
Don Guanella Village offers a rich benefits structure and sacrifices costs in order to maintain employee morale. There are some improvements that could be made with the new trends in health benefits that are arising, but otherwise the organization is in good standing with their current benefits structure and is very satisfied with how their employees respond to being afforded excellent benefits. An area where the

organization could use some improvements if they do seek to update their plans is hiring the assistance of outside consultants to help oversee their benefits operations. DGV has done an admirable job thus far and should continue to do so. They operate in the right state of mind that employee morale takes precedence over increase in costs. DGV should continue to flourish and continue to retain competent employees because of their benefit structure and hard-working team of individuals who administer the plan.

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