Faces of HR

Benefits Expert Shares Lessons of the Pandemic

We’ll likely spend the next 10 years understanding everything the pandemic has changed about work. One of the fields that saw rapid and constant change is employee benefits. But what, precisely, changed and why? What works now? What does not? Today’s “Faces of HR” guest spills the beans.

Meet David Levitz, Managing Partner at GCG Financial, an Alera Group Company.

What would you say your favorite thing about HR is?

My favorite thing about HR is the fact that the industry, and the professionals in it, are constantly looking for opportunities to put both employees and the employer in better positions. They want to be a strategic business partner, and they embrace strategic planning and creative solutions.

What’s something you find surprises HR people?

It’s probably the same thing that surprises me every day and that is that change isn’t easy and it’s often difficult to get key decision-makers all on the same page. That’s why we usually propose creating a multi-year plan with input from the entire leadership team so that we can clearly identify short and long-term goals and objectives, along with teasing out appetites for any particular benefit strategy.

That’s a good point. So many things that are the right thing to do have a good return on investment (ROI), but they’re not going to happen this quarter or next quarter or even necessarily next year. It might take 5 years, and human beings are particularly terrible at making those kinds of decisions. Just look at how many people don’t contribute to their retirement funds.

That’s a good observation. Absolutely.

Do you have your favorite interaction with somebody or something you’re particularly proud of that you’ve accomplished?

I’ve had many accomplishments throughout my 33-year career. I’m proud to be able to show people how they have to think about more than just what’s right in front of them today. In my case, I want the HR team to understand that it’s critical to develop a strategy, it’s important to map out a game plan and understand that if you tap into your employees for feedback, they’ll tell you whether you’re on the right track or not. You may think you have the best employee benefit plan in the world or the best 401(k) plan in the world yet what are your employees experiencing as they use the benefit plans, and/or how do the plans stack up to your competitors?

What I try to do is to get our clients to look out 3 to 5 years and say, “what is it that would make you believe that your strategy is successful 3 to 5 years from now? What do you want your employees saying about their employee benefit plans at that time?” It just gets them thinking differently. Instead of looking at benefits purely as a cost, change the thinking to, “if I have to spend this money, don’t I want to make sure that money being spent is in a manner that makes employees happy with the benefits we are providing?

Benefits is one of those things that traditionally, employees think about two times: when they look for a job and then every year when they have to make their elections. Yet benefits have such an impact on their lives, their real lives, not just their work lives, which is not like other things at work. Anything to change that system, anything to get people to engage more with it, I think is critical.

That’s a great observation. Employee engagement is critical and today. There are so many tools available in the marketplace to help drive engagement, whether that encompasses tools for easier access to providers, most cost-effective treatment centers, or alternative sources of relief. Also, employers today can consider benefits like student loan assistance programs, various purchasing discount programs, help with elderly care, child assistance, and so much more; it all starts with the concepts of value and engagement.

What do you think the benefit that matters the least now is that was once super popular?

Particularly in light of the pandemic this past year, we used to view giving employees the opportunity to work from home once or twice a week as a huge perk. Look at what the pandemic has taught us in the way of remote work and flexibility. That said, we’re also finding that there’s definitely something to be said for collaboration and social capital, and I think as employers we’re all trying to figure out exactly how to balance this as we look and plan ahead. This is just one example of something that used to be a big “perk” and going forward may most likely be table stakes.

From my perspective, it’s been fantastic to see the vindication of all those experts and all those studies that have been done that said: This is a good thing. Most employees are dedicated, hardworking individuals. Yeah, there are going to be some bad actors, but that was true when they were in the office.

While I agree, I do think every employer and every employee’s situation is different. For many, I agree but there are absolutely going to be situations where it’s critical for employees to be more visible.

This needed to happen. If we’re looking for silver linings in the pandemic, that’s one of them. I’m such a firm believer in giving people the tools they need and then just pointing them in the right direction and letting go. The majority of the time, people want to work hard, they want to have their ideas listened to, they want to innovate, and they want to grow and evolve. And all of that makes companies money. So let them do it.

I think it’s important that employees are given the opportunity to step up and show what they can do. I am always amazed at the energy, the work product, and the brainpower that people across our organization deliver every day. When you allow employees to provide input and to be collaborative, it’s incredible what happens.

Something I have to keep bringing up is the division of workers into two classes. We have those employees who had the ability to work from home. Then, you have the frontline workers whose jobs got a lot more difficult rapidly. That division exists in many organizations at the same time because even those companies you think of as your classic frontline employee-style companies have a service department and managers in an office building back at HQ. So now, you have HR staff and benefits provider professionals having to juggle two very different sets of workers. Have you seen that reflected in the way that people are engaging with benefits? Or do you have any insights on that?

I don’t know that it’s changed the way people are dealing with benefits, but I do think that the types of benefits an employer must provide has changed. Benefits play a very important role when it comes to the ability to recruit and retain employees. Employees are concerned with more than just the basic “medical plan.” They are concerned about the ability to secure help or resources for personal well-being. Employers today need to be concerned that their employees have resources that are well-rounded. That includes resources that are providing benefits for both emotional and physical support. No longer is just providing an employee assistance program good enough.

It’s critical, and it’s good to see that organizations are beginning to take it seriously because it was at a crisis level before the pandemic. It wasn’t being addressed. Many organizations learned how inadequate their efforts toward mental health benefits were since the pandemic began.

One of the things I’ve read about is that not everything needs to be elevated to the level of talking to a psychologist or a psychiatrist. There are other in-between steps like life coaches, for example, or coaching and mentoring in general that can help people solve sort of the everyday struggles that may be mental health challenges but not mental disorders. What’s your interaction with those kinds of programs?

I think that’s true all across the wellness spectrum. Now we have nurse practitioners, physician assistants, social workers, and others involved in providing mental health benefits to employees. All of these professionals, along with and many others, are playing a much larger role in providing support to you and me. All of us are relying more on that person who might not have a Ph.D. or MD designation behind their name, but they are still very well qualified to provide support. These people really care, and they are making a very big difference. Usually, these are people who are passionate about what they do and how they go about providing help and support. Not only is this giving more of us access to help but these types of individuals are saving consumers money because the cost of care isn’t a high as it would be if people were seeing MD’s for each and every ailment.

Tell me about it. I remember having some issues, maybe 10 years ago, and my insurance provided 10 lifetime visits with a psychiatrist. What a joy to try to “solve” my mental health issue in 10 short visits or else. And paying out of pocket is out of the question. Back then, it was at least $200 a session, and I can only imagine prices have gone up since then.

You’re right. Luckily most health plans today don’t have different limits for mental and nervous treatment than they do for any other covered illness.

What are some of the innovations in the benefits landscape that maybe people aren’t as aware of that are happening today?

The reality is that innovations are occurring each and every day. For example, there are innovations around prescription RX—not only where we get particular drugs but also how you utilize certain drugs and why certain drugs are more expensive than others. The landscape of prescription drugs is changing very fast all with the purpose of providing better relief at a cheaper price to patients. The use of insurance captives has been something that has been utilized by both mid and large-size employers for quite a while. Now, we are seeing the use of captives with smaller employers as well. Captives are allowing smaller entities that traditionally could never think about self-insurance to now think about these types of ideas. The creative use of captives for small employers can help to bring down the cost of health care for many.

Insurance carriers are looking at utilizing Centers of Excellence for certain types of care and procedures hoping they can do so with better results and on a more cost-effective basis. Centers of Excellence not only look at cost but also outcomes, which to you and I is the most important criteria. This is not about looking for the lowest-cost providers, but you’re looking for the best outcomes at the most reasonable cost. These centers are already providing successful results for both employees and employers. We’re seeing a much larger impact on companies that financially incent people to these providers.

Benefits isn’t my forte. Can you explain to me what precisely centers of excellence are?

Sure. Let’s say you have to have a hip replacement. Obviously, you can go to your orthopedic surgeon, and that doctor is going to tell you where to go or when to have a procedure and how to have a procedure. That might be great, or it might be that the surgeon is just doing it a certain way because that’s how he or she does it. Centers of excellence are places where they really specialize in that type of care. You could have five centers of excellence all within an hour’s view. It’s not like you’re going 30 hours to a center of excellence. They are places that have proven they can do the procedures. They’ve done a lot of them. They have good results, and they’ve been able to lower the costs because they’ve perfected some aspect of that care, and you don’t have to stay in the hospital for 3 days. Now you might be able to do it as an outpatient.

Yeah. It’s sort of like, sometimes you want to go to the emergency clinic instead of the ER because those people have seen everything. They’ve got the experience, just like people at one of those centers; if they’ve done the same surgery a thousand times, those are the people you want. You don’t want the person who can technically do the surgery. You want the person who did it 10 times yesterday. Thanks for clarifying that. The other thing you said that I wasn’t familiar with was the concept of captives. Can you explain that, as well, please?

Captives are really just a way to group together like buyers to buy under a coalition to secure a certain level of coverage that is more actuarily sound if we have larger numbers. The employer that only has 10 employees has to pay X versus the employer that has 3,000 employees. It has more people among whom to spread out the risk. A captive is a way for you to spread out the risk among many, and you’re still sharing in the results, but you’re able to take advantage of the law of larger numbers, which very often would be to your advantage. It’s not that if it’s not your advantage, you don’t participate. I mean, you still have to have a certain risk category to be with like individuals. They don’t just say, oh, you have really bad risks; let’s join a captive. And now, oh, look, my costs go down. There’s a lot of financial underwriting that goes into that, but it’s just an easier way to spread out the risk.

Were there ever any benefits that you thought were not going to take off but then they did? Maybe like pet insurance?

I never say never in the benefits world because what’s important to one isn’t always important to the other. You mentioned a great one: pet insurance. I have two dogs. I never thought about getting insurance for my dogs, but for some people, it’s the first question they ask. Does my employer offer pet insurance? It’s no different from cancer insurance or all of the important voluntary coverages that are being offered today that are popular because people are looking for those. But employers think, Oh, my employees aren’t interested in that. That’s the reason they offer them on a voluntary basis. And they’re always amazed at the uptick when it comes to the use of those benefits, whether it’s for security protection or identity protection. Never did I think that was going to be a benefit that was employer-provided but look how critical that is right now. Whenever there’s an issue, the first thing they offer is to get you covered under an identity theft protection.

It occurs to me that the people who are identifying these new benefits are really doing a kind of research that maybe others aren’t identifying new needs and new vulnerabilities really. We should listen to them more.