Benefits Analysis: Executive Health Resources

Part 1: Benefits Matrix Part 2: Inventory of Benefits Part 3: Analysis of Decision Making and Plan Design
Justin Kemp 912220955 Shannon McBride 912024737 RMI 3501 Dr. Drennan Fall 2011

Table of Contents
Benefits Matrix..1 Summary of Benefits.....2 Inventory of Health Benefits.312 Introduction to the Healthcare Plan...3 Overall Medical Expenses...36 Flexible Spending Account..67 Dental................78 Vision.............89 Prescription.9 Loss of Income...912 Life Insurance.....910 Short- Term Disability Insurance/ Paid Time Off.....1011 Long- Term Disability Insurance..11 Retirement1112 Other Exposures12 Educational Assistance..12 Work/ Life..12 Introduction to Part 3..1 Overall Design Considerations in Employee Benefits.....1 Objectives of the Plan..2 Decision Criteria..2 Funding and Financing Considerations.. 3

Problems, Issues, Concerns, and Considerations in the Design of Health Benefits3 Cost Inflation...3 Size Issues.. ....4 Funding Considerations...4 Consumer Driven Health Plan and HSA.5 Problems, Issues, Concerns, and Considerations in the Design of Other Non-Retirement Benefits... 5 Flexible Benefits..5 Communication....6 Regulatory Compliance...6 HIPAA.... 7 COBRA........7 ERISA..8 PPACA.8 Recommendations for the Future.9 Conclusion...9

Benefits Matrix
Exposure Analysis for Executive Health Resources Loss Exposure Provided Coverage/ Benefits Provided Loss of Income: Medical Expenses Yes United Healthcare: EPO, 2 HDHP Yes Met Life: PPO; Medical FSA Yes Vision Program; Medical FSA Yes Prescription Drug Plan; Medical FSA Yes Prudential Yes Medicare, COBRA, 401 (k) Plan Loss of Income: Death Yes Basic Group Life Insurance, Supplemental Life Insurance, OASDI, AD&D Insurance, 401(k) Plan Yes Basic Group Life Insurance, Supplemental Life Insurance, OASDI, AD&D Insurance, 401(k) Plan Yes Basic Group Life Insurance, Supplemental Life Insurance, OASDI, AD&D Insurance, Workers Compensation- Death Benefits, 401(k) Plan Loss of Income: Unemployment Yes Unemployment Insurance Loss of Income: Disability Yes Short-term Disability Plan, OASDI, AD&D Insurance, PTO, 401 (k) Plan Yes Long-term Disability Plan, OASDI, AD&D Insurance, 401 (k) Plan Yes Short-term Disability Plan, OASDI, AD&D Insurance, Workers Compensation- Disability Benefits, 401 (k) Plan Yes Long-term Disability Plan, OASDI, AD&D Insurance, Workers Compensation- Disability Benefits, 401 (k) Plan Loss of Income: Retirement Yes DWS Investments: 401(K) Qualified Retirement Plan, OASDI Other Exposures Yes Continuing Medical Education Yes Gym Membership Reimbursement, Pre-tax qualified transportation FSA, Verizon Discount Yes Dependent Care FSA No NONE No NONE

Overall Medical Expenses Dental Vision Prescription Long Term Care Retiree Healthcare

Non-Accidental & NonOccupational Accidental Occupational

Unemployment

Non-Occupations; Short-Term Non-Occupational; Long-Term Occupational Disability; ShortTerm Occupational Disability; LongTerm

Retirement

Educational Assistance Work/ Life Exposures Dependent Care Property- Liability Legal Expenses

Summary of Benefits
Benefit Plan HDHP Option 1: w/ United Healthcare HDHP Option 2: w/ United Healthcare EPO: w/ United Healthcare Dental Plan: MetLife Vision Plan: Eye Med Vision Care Prescription Drug Prudential Basic Life Insurance Prudential AD&D Insurance Prudential Supplemental Life Insurance Prudential LTD Insurance Prudential STD Insurance DWS 401 (k)
Source: http://www3.ambest.com/ratings/default.asp A+ Superior Financial Strength (2nd highest out of 15) A- Excellent Financial Strength (4th highest out of 15)

A.M. Best Rating AAAA+

Financing

Funding

Eligibility Full-time active employees and dependents Full-time active employees and dependents Full-time active employees and dependents Full-time active employees, parttime active employees and dependents Full-time active employees, parttime active employees and dependents Full-time active employees, parttime active employees and dependents Full-time active employees

Contributory Contributory Contributory Contributory

Fully Insured Fully Insured Fully Insured Fully Insured

N/A A-

Contributory Contributory

Fully Insured

Fully Insured A+ Noncontributory Noncontributory Contributory Noncontributory Noncontributory Contributory Fully Insured Fully Insured

A+

Fully Insured

Full-time active employees Full-time active employees and dependents Full-time active employees

A+ A+

Fully Insured Fully Insured

A+ N/A

Fully Insured

Full-time active employees Full-time active employees, Parttime active employees

Inventory of Benefits
Introduction to the Healthcare Plan Executive Health Resources (EHR), located in Newtown Square, Pa., currently has about 2,200 employees. Eligible employees may enroll themselves and/or any eligible dependents. For the health plan, employees have a choice between two HDHP with HSAs and an EPO plan. Employees may also choose to opt-out of the medical plan if they show they already have credible coverage under another health plan. All of the employee benefit plans are fully insured. Overall Medical Expenses At EHR, employees are offered three different healthcare plans, each of which are funded with an insurance contract through United Healthcare. Employees may choose between: HSA Plan-Choice Plus Network, HSA Plan-Higher Deductible HSA Option, EPO Plan-Choice Network. The plans offer the same benefits, but at different cost sharing arrangements based off of levels of financing from Executive Health Resources. Employees are eligible to enroll in any of the three plans based on specific criteria. Full time employees are considered to work at least 32 hours per week regularly. An employee may enroll their dependents, such as any spouse, same-sex domestic partner, and children, to their plan. Children under the age of 26 that are listed as dependents and must primarily rely on the parents for financial stability/support. Open Enrollment starts December 15th of each year for any employee who wishes to enroll themselves or any dependents. These benefits start on the day after they are enrolled. HSA Plan 1Choice Plus Network The first healthcare option offered is HSA PlanChoice Plus Network. The plan is funded through an insurance contract with United Healthcare and financed on a noncontributory

basis for single employees, while all other full time employees spouse, same-sex domestic partner, and dependents are on a contributory basis.
Type of Coverage Employee Employee & Child(ren) Employee & Spouse Family Monthly Premium $511.61 $972.08 $1074.40 $1,534.86 HSA 1 Deductible $1,250 per year $2,500 per year $2,500 per year $2,500 per year Monthly Employer Contributions $511.61 $511.61 $511.61 $511.61 Bi-Weekly Payroll Deductions $0.00 $212.52 $259.75 $472.27

In-network office visits for primary care and specialist care have a 100% coinsurance clause after the deductible has been paid. Preventative care offers 100% insurance without a deductible. The coinsurance for out-of-network is 80%. Lab services, diagnostic X-Ray services, outpatient hospital services, and inpatient hospital services have 100% coinsurance after the deductible is paid. Again, the coinsurance for the services, mentioned in the sentence above, is 80% for outof-network. The in-network, out-of-pocket maximum for single employees is $2,250 and $4,500 for families. The out-of-network, out-of-pocket maximum for single employees is $4,250 and $8,500 for families. HSA Plan 2Higher Deductible HSA Option The second healthcare option offered is a high deductible healthcare plan. The plan is funded through an insurance contract with United Healthcare and financed on a noncontributory basis for single employees, while all other full time employees spouse, same-sex domestic partner, and dependents are contributory basis. Single employees are paid the remainder of Executive Health Resources contribution, specifically receiving $54.57 bi-weekly.

Type of Coverage

Monthly Premium

HSA Option 2 Deductible

Monthly Employer

Bi-Weekly Payroll

Employee Employee & Child(ren) Employee & Spouse Family

$393.38 $747.42 $826.10 $1,180.14

$2,850 per year $5,600 per year $5,600 per year $5,600 per year

Contributions $511.61 $511.61 $511.61 $511.61

Deductions $54.57 paid to employee $108.84 $145.15 $308.55

Notice the deductible for each type of coverage is more than double the deductible of the first healthcare plan option. Since the deductible is higher for this plan, the premium is lower compared to the first healthcare plan. Once a full time employee enrolls themselves and/or their family in this option, the healthcare is accessible the next day. In-network care has 100% coinsurance, while out-of network has 80% coinsurance. In-network office visits for primary care and specialist care have a 100% coinsurance clause after the deductible has been paid. Preventative care offers 100% insurance without a deductible. The coinsurance for the same services mentioned above, but out-of-network, is 80% after the deductible is paid. Lab services, diagnostic X-Ray services, outpatient hospital services, and inpatient hospital services have 100% coinsurance after the deductible is paid. Out-ofnetwork lab services, diagnostic X-Ray services, outpatient hospital services, and inpatient hospital services have a coinsurance clause of 80% after the deductible has been met. The innetwork, out-of-pocket maximum for single employees is $4,850 and $9,600 for families. The out-of-network, out-of-pocket maximum for single employees is $10,000 and $20,000 for families. EPO PlanChoice Network The third healthcare option offered is an Exclusive Provider Option. The EPO Plan is funded through an insurance contract with United Healthcare and financed on a contributory basis for single full time active employees, while all other full time employees with spouse, same-sex domestic partner, and dependents are on a contributory basis. There is no deductible

for this option, but the costs come back in the form of a higher premium for each type of coverage.
Type of Coverage Employee Employee & Child(ren) Employee & Spouse Family Monthly Premium $837.67 $1,591.58 $1,759.10 $2,513.01 EPO Option Deductible Monthly Employer Contributions N/A $511.61 N/A $511.61 N/A N/A $511.61 $511.61 Bi-Weekly Payroll Deductions $150.49 $498.95 $575.76 $923.72

Office visits for primary care, preventative care, and specialist care have a $20 copayment, $0 copayment, and $20 copayment, respectively. Lab services, diagnostic X-Ray services, and outpatient hospital services are 100% covered for employees. Inpatient hospital services are fully covered after a $250 copayment is made. Emergency care is fully covered after a $100 copayment is made. Any service out-of-network is not covered. Flexible Spending Account (FSA) Executive Health Resources offers a Section 125 plan for employees who work more than 32 hours a week. It allows employees to take a pre-tax salary reduction to pay for covered expenses. Executive Health Resources offers four applications of Section 125 plans to employees: Premium Conversion Plan, Healthcare FSA, Dependent Care FSA, and Transportation and Parking FSA. The plans are administered by Executive Health Resources. Employees forfeit any unused funds remaining at the end of the year. There is a grace period of 2 months and 15 days that participants may incur and submit expenses during that period. Premium Conversion Plan: The plan allows employees to make contributions toward premiums for insurance on a pre-tax salary reduction basis. Healthcare FSA: The maximum contribution per year is $2,500 for qualified medical expenses. Employees are able to pay for any medical expenses that the healthcare plan either does not fully

cover or does not cover at all. Under federal law, employees are prohibited from being enrolled in both a HSA medical plan and a Healthcare FSA. The eligible expenses include: cost sharing items, such as deductibles and copayments for medical, dental, vision, and prescription drug expenses. Dependent Care FSA: Eligible employees have the option to receive income tax-free reimbursement for out-of-pocket expenses associated with dependent care. Dependents are defined as children under the age of 13 or anyone older than 13 years old that are mentally or physically incapable of self-care. The maximum contribution allowed per year is $5,000. The work-related dependent care expenses include elder care and childcare expenses such as day care and summer day camps. Transportation and Parking FSA: The FSA allows eligible employees to fund an account with pre-tax dollars for out-of-pocket expenses associated with qualified transportation and parking expenses. The qualified expenses include: parking at or near the business premises, parking on or near a location from which the employee commutes to work, and expenses for mass transit. Contract workers, independent contractors or temporary employees are not eligible to participate. New employees are eligible to participate after 30 days of employment. Dental Dental coverage is funded through an insurance contract with MetLife, Inc. MetLife, Inc. has an AM Best rating of A+, which represents Superior financial strength. MetLife Preferred Dentist Program is financed on a contributory basis and covers full time and part-time employees, their spouse, same-sex domestic partner, and dependents. The dental plan is offered on a schedule basis by three types of services.
Coverage Type Type APreventive Type BBasic Restorative In-Network 100% of PDP Fee 80% of PDP Fee Out-of-Network 100% of PDP Fee 80% of PDP Fee

Type CMajor Restorative Deductible Individual Family Annual Maximum Benefit Per Person

50% of PDP Fee $50 $150 $1,250

50% of PDP Fee $50 $150 $1,000

The first service is Type APreventative Care, which is any type of service that involves maintenance of the oral cavity by protecting against damage and/or disease. The second service is Type BBasic Restorative Care, such as fillings, extractions, and root canals, but not more than once in one quadrant of the mouth for every 24 months. The third service is Type CMajor Restorative Care, which is for crowns, bridges, and dentures. Vision The Vision Plan is funded through an insurance contract with EyeMed Vision Care. Coverage is available to full and part-time employees, their spouse, same-sex domestic partner, and dependent children. The plan is financed on a contributory basis. Single employees pay $3.54 for this benefit bi-weekly. For employees and their spouse or same-sex partner, the biweekly cost is $6.30. For employees with families, the bi-weekly cost is $7.35. The Vision Plan covers eye exams, contacts, different types of lenses, and LASIK and PRK eye surgery. EyeMed Vision Cares Network consists of private practicing optometrists, ophthalmologists, opticians, and optical retailers such as Lens Crafters, Pearle Vision, Sears Optical, Target Optical, and JCPenny Optical. If employees stay in-network, costs are much cheaper than going out-ofnetwork as shown in the table below.
Type Eye Exams Contacts Frames Lenses Vision In-Network Member Cost $10 Copay Up to $40 $0 Copay, $120 Allowance, 20% off balance over $120 $25 Copay for Single Vision, Bifocal, Trifocal Out-of-Network Member Reimbursement Up to $35 $48 Up to $25 for Single Up to $40 for Bifocal

$85 for Standard Progressives LASIK and PRK 15% off retail price

Up to $60 for Trifocal Up to $40 for Standard Progressives N/A

Prescription Each healthcare plan offers the same Prescription Drug Plan. This plan is funded through an insurance contract with United Healthcare and is financed on a noncontributory basis for single employees and on a contributory basis for employees spouse, same-sex domestic partner, and dependent children of the employee. Eligible employees include: full time employees, parttime employees, employees spouse or same-sex domestic partner, employees dependent(s). Both HSA Options 1 & 2 are offered the same prescription drug copayments, while the EPO Option has a slightly cheaper copayment schedule.

Loss of Income
Life Insurance Life Insurance and Accidental Death & Dismemberment policies are offered to eligible employees. The plan is funded through Prudential Insurance Company. For employees who work at least 32 hours per week, EHR provides one times their annual salary in life insurance up to $300,000. Accidental Death & Dismemberment is also offered up to one times their annual salary up to $300,000. This benefit reduces to 65% at age 65 and to 50% at age 70. Both the Basic Life Insurance and AD&D Insurance are provided on a non-contributory basis. Supplemental Life Insurance gives employees the opportunity to purchase additional life insurance for themselves, their spouse, same-sex domestic parent, and dependent children. The cost of insurance is paid fully by the employee through after-tax payroll deductions. The coverage will begin the first of the month immediately following the employees date of hire. Short-Term Disability Insurance/ Paid Time Off

EHR offers Short-Term Disability Insurance to all employees who work at least 32 hours per week. The plan is funded though Prudential Insurance Company and is offered on a noncontributory basis. The coverage will begin the first of the month immediately following the employees date of hire. The benefits are paid after 14 consecutive days of disability if the insurance provider approves the claim. The employee files a claim and must see a physician that reports back to the insurance company on whether the person is disabled or not. Employees may use their accrued PTO to cover the elimination period. The STD coverage will provide the employee up to 60% of their weekly salary to a maximum benefit of $1,000 per week for up to 13 weeks. Full-time and part-time employees working 20 or more hours per week are eligible for paid time off (PTO). All Administrative level employees will start accruing PTO time on their initial day of employment. Employees will accrue 12 days of PTO time in the employees first year of employment. Beginning at year two, employees will accrue 17 days of PTO per year. All Physicians, Nurses, Directors, and Vice Presidents will start accruing 17 PTO days starting with their first year of employment. Employees may carry over accrued PTO times up to a maximum of four weeks (20 days) to the following year. Employees are able to cash out accrued PTO time, twice per calendar year (June and November) up to a maximum of 40 hours each year. Long-Term Disability Insurance EHR provides Long-term Disability Insurance for eligible employees on a noncontributory basis to help cover long-term loss of income due to disabilities. It covers disability resulting from injury, sickness, or pregnancy and is funded through an insurance contract with Prudential Insurance Company. In order to be covered, employees must work a minimum of 32 hours per week. It provides employees with a continuing source of income if they are unable to return to work after exhausting their 13 weeks of STD. The LTD coverage will provide up to

60% of their monthly base salary with a maximum of $7,500 per month until the employee is 65 years old or is no longer disabled, whichever occurs first. Retirement EHR offers a 401(K) Qualified Retirement Plan through a contract with DWS Investments to shield eligible employees from loss of income due to retirement. Full and part-time employees are eligible for this plan. Full time employees are eligible for this benefit on the first day of the month following their first day of employment. Part-time employees are eligible on January 1st of each year for this benefit when they complete 1,000 hours of service to EHR in one calendar year. If an employee contributes to their 401(k) through bi-weekly payroll deductions, EHR will only match 3% of the amount deducted towards the 401(k). Full and part-time employees must follow a vesting schedule for employer contributions. One full Year of Service means that an eligible employee must work 1,000 hours. Employees may not withdraw any funds from their 401(k) plan while still employed, even if they are 100% vested. An employee may only withdraw distributions after they are 100% vested and are no longer an employee.

Other Exposures
Educational Assistance Full-time employees are eligible for up to $500 worth of reimbursement for specific education such as Continuing Medical Education, CPA renewal, or taking time off to prepare for exams. This does not include any education in terms of getting an Associates Degree, Bachelors Degree, or Masters Degree. An employee is eligible for this benefit after six months of full-time employment. Full-time employees must request time off at least 45 days in advanced in order to schedule resources accordingly. Work/Life

Employees are eligible for a 15% discount on Verizon Wireless and 25% discount on Verizon phone accessories. This is funded through a contract with Verizon Wireless and financed on a noncontributory basis. This plan is available to full and part-time employees and only applicable to their spouse, same-sex domestic partner, and dependents if its under the employees Verizon Wireless account. Employees are encouraged to maintain a healthy lifestyle through physical health training, and EHR reverberates this message to all employees by reimbursing gym fees for up to $120 a year. To receive this benefit, an employee has to simply sign up at any gym, receive a copy of a receipt, and attach it to a Gym Membership Reimbursement Form on either June 1st or December 1st of each year. Both full and part-time employees are eligible for two floating holidays per year.

Introduction to Part 3
Executive Health Resources is a leading provider of medical necessity compliance solutions to more than 2,000 hospitals and health systems across the country. Its headquartered in Newtown Square, Pennsylvania and has offices in Maryland and California. It is a private, independent company. Executive Health Resources delivers outsourced operational, technological, and clinical resources. The company helps hospitals manage clinical care, while maintaining regulatory compliance. Executive Health Resources employs about 2,300 employees. Employees include doctors, nurses, attorneys, and accountants. Many employees possess a wide array of medical specialties and board certifications. The company was recognized as one of the "Best Places to Work" in the Philadelphia region by Philadelphia Business Journal for the past 4 consecutive years. The award recognizes its achievements in attracting and retaining employees by working conditions, company culture, and benefits that are offered.

Throughout this project, our contact has been Furrukh Munawar who is the Chief Financial Officer. He has been with the company since 2006. Mr. Munawar has been in the hospital and health care industry for his entire career and has vast amounts of experience with designing employee benefit plans. Being the Chief Financial Officer, Mr. Munawar sets much of the decision-making criteria including total costs of employment. He works directly with the Human Resource Manager, Kelly Barborini, to design and amend the benefit plan.

Overall Design Considerations in Employee Benefits

Objectives of the Plan Executive Health Resources, just as many other companies, is offering benefits in order to attract and retain employees. EHR is one of the few companies whose main objective is to actually attract and retain employees. This is shown through the benefits offered and how much the company contributes to keep employee spending low. One of the top items on workers wish lists is 100% of health coverage paid by the employer (Workers Motivated by Richer Benefits). EHR offers many benefits on a non-contributory basis for employees, including two of the three choices for healthcare plans. Every year since 2008, EHR has been recognized for being one of the Best Places to Work in the Philadelphia region. It maintained its position on the list based on the strength of its benefits and programs, as evaluated by its employees. Employers may want to provide competitive benefits to attract and retain employees, but if their employees dont value them, the benefits are not doing what they are intended to do. The healthcare industry, especially for nurses is a very competitive industry. This is one of the reasons EHR needs competitive benefits. EHRs main competition for employees is their clients, which is mostly hospitals. In order to stay competitive, EHR uses benchmarking tools,

such as surveys. Decision Criteria Executive Health Resources has grown into a very large company over the past five years. The decision criteria for employee benefits are a key factor in attracting and retaining employees. Surveys are given to current employees that ask if they enjoy their benefits, the satisfaction level from used benefits, and what benefits they would possibly need or want. Benefits offered by EHR are extremely important because the workforce is comprised of mostly physicians, nurses, and other highly educated professionals. EHR pulls these professionals from nearby hospitals and firms, and in order to keep them, there has to be a flashy benefits incentive. Funding and Financing Considerations EHR funds their benefits through an insurance contract. Having 2,300 employees, EHR would be able to self-fund majority of their benefit plans. When asked why they chose to fully insure their plans, Mr. Munawar stated that they are considering it for the future but will not selffund until they have at least 5,000 employees. Mr. Munawar feels that the risks associated with self-insurance is not worth it for EHR, yet. In order to remain solvent and also offer competitive benefits, EHR offers certain benefits on a non-contributory benefits and other on a contributory basis. Mr. Munawar sets a budget for total cost of employment. He tries to get the best benefits for the amount of money that Executive Health Resources is willing to spend. For two of the three healthcare plans, EHR pays for their employees entire cost. They offer dependent coverage, but the employee must pay the entire cost for dependents. Mr. Munawar stated that the reason they do not pay for dependents is they do not want to discriminate against single and family status. Other benefits offered on a non-contributory basis include life insurance, AD&D, STD, and LTD.

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

Cost Inflation According to the Healthcare Cost Trend Survey, medical costs are forecasted to increase at double-digit rates. Health care costs have been rising since the 1990s. Due to the rising cost, EHR decided to have two HDHP and an EPO to limit the amount employees must contribute. Since EPOs have a very limited network, it usually has a significant discount, which allows EHR to contain costs. Since HDHPs help contain costs, it allows EHR to fully pay for the cost of the plan. Although many people do not like HDHPs, majority of EHRs employees are enrolled in one because EHR uses a form of steerage. They make contributions for medical plans equal to the first HDHP. For the second HDHP, which has a higher deductible than the first HDHP, EHR actually pays the employee $54.57 bi-weekly. This provides a huge incentive for employees to enroll one of the HDHPs. Size Issues There are roughly 2,300 employees at Executive Health Resources. The amount of employees presents a problem in relation to funding healthcare plans. They are not as big of a firm needed to self-fund, but well on the way. In 1997, EHR had only 10 employees as a start-up company. Over 14 years later, there are now 2,290 more people currently employed by EHR. The company has kept pace with growth due to the increased need of physician advising across the country. The future looks brighter and brighter for EHR, seeing as growth is not an issue, but how to constantly deal with it is. Funding Considerations

The high cost of healthcare is making EHR consider self-insuring its healthcare plan. This will enable EHR to maintain control over the healthcare plan. Being in the healthcare industry, EHR would be able to administer the benefits as well as understand new federal legislation. The biggest issue in self-funding is covering your companys vulnerability to risk (Schreck). Although by self-insuring there are potential savings, Mr. Munawar feels that the potential savings are not worth the risk. Since its inception in 1997, EHRs main focus was expansion, and with that expansion as their focus, Mr. Munawar does not feel that self-insuring is proper course of action right now because one catastrophic loss could seriously impact their future success as a company. When EHR has over 5,000 employees, Mr. Munawar said that they would seriously consider the idea of self-insuring. Consumer Driven Health Plan and HSA At EHR, two HSAs and multiple FSAs are offered. The first HSA plan has a high deductible of $1,250 per year for individuals and $2,500 per year for families. The second HSA has a higher deductible of $2,850 per year for individuals and $5,600 per year for families. With these two plans, participants can put a maximum of $3050 per year for individuals and $6,150 per year for families into an HSA through TD Bank. There are three types of FSAs offered: Healthcare FSA, Dependent Care FSA, Transportation and Parking FSA. There are many options for employees to put money into an account, tax free, and use these funds at a time when needed, again tax-free.

Problems, Issues, Concerns, and Considerations in the Design of Other NonRetirement Benefits
Flexible Benefits EHR offers several Flexible Spending Accounts to employees to help them cover out-of-

pocket expenses. FSAs help employees save money because it is tax-free. There is consideration that goes into the plan design for FSAs. Under federal legislation, Section 125 plans cannot discriminate as to eligibility and benefits provided. If the plans are found to be discriminating in favor of highly compensated or key employees, the plans would lose its tax-free advantage (Bryson). EHR needs to take the discrimination testing into consideration because the FSAs are useless without the favorable tax treatment. Communication Employees must be informed about all benefits offered, especially about any healthcare benefits. EHR has a website only available on the company intranet that has all the information needed. This intranet allows for scheduling appointments with people in Human Resources, brochures to download, and information posted online. EHR also emails employees in regards to any changes in benefits, new benefits, and enrollment periods. There are monthly one-on-one employee benefit meetings with HR for all employees. In addition to individual meetings, employees in groups of 100 go to group meetings where there are presentations about upcoming laws and how they affect their benefits or about newly offered benefits. At the end of these presentations there is a question and answer session, which enables employees to voice any concerns, questions, or for the presenter to clarify something specific.

Regulatory Compliance
Being in the healthcare industry with 15 in-house lawyers, EHR fully understands how to comply with federal regulations. The Human Resources Department is constantly being trained about new regulations that will impact the company. EHR is compliant with all federal regulations, including HIPAA, COBRA, ERISA, and PPACA. If any new law or legal issue arises from the municipal, state, or federal government, EHR will work on the compliance issue

feverishly until results are produced and implemented. It is very important to address any laws that may affect the operations of Executive Health Resources because lawsuits may arise otherwise. HIPAA One of the major features of HIPAA is the privacy protection for consumers. Although majority of the regulation is focused on healthcare providers and insurance companies, HIPAA also impacts employers. For self-insured plans, HIPAA has more of an impact because they must follow the standards under HIPAA. For insured plans, like EHRs, HIPAA does not directly affect them, but may cause extra administrative costs. Since EHR is looking into selffunding in the near future, they need to understand the compliance standards that they must follow if they become self-insured. COBRA Employees have 60 days of health insurance left after their termination of employment. During those 60 days, employees may choose to sign up for COBRA continuation coverage. There is a 60-day extension of health insurance due to the gap of 60 days that COBRA leaves up to the terminated employee to choose whether or not to enlist in COBRA. If terminated employees choose to use COBRA, they then have up to 60 days to state to the previous employer that they want to enlist the benefit (Drennan). The employer then has 30 days to inform United Healthcare about the terminated employees choice. Then, United Healthcare has 14 days to notify and state the COBRA rights of the employee. Its interesting to note that EHR allows for 60 days of continued coverage after an employee has been terminated; it covers the health insurance gap so that terminated employees can receive COBRA coverage in a timely manner, if they act fast enough.

ERISA EHR must follow certain requirements imposed under ERISA. These requirements include fiduciary responsibility, maintaining a written plan document, filing annual returns, and complying with federal laws (Griggs). In order to deal with the required communication activities, they use their intranet to communicate benefits. During open enrollment, they send emails and have meetings with employees to discuss the benefits. Since EHRs main reason for providing benefits is to attract and retain employees, their main concern is in the plan participants interest. This allows EHR to comply with their fiduciary responsibilities. PPACA EHR is ahead of the curve in terms of complying with PPACA. Employees are penalized for deducting any funds from their HSAs at a 20% rate for any non-medical withdraws. Over the counter drugs arent eligible for purchases with an HSA. Employees also can cover dependent children up to the age of 26. Already in 2011, EHR has met the requirement of giving employees a complete summary of insurance plans. These summaries are in 12-point font and use simple language so that any and all employees may understand the text. These summaries include descriptions of all plans offered, explanations of terms, and simple examples of medical loss occurrences.

Recommendations for the Future

Executive Health Resources performs well when it comes to offering employee benefits, but there are areas of improvement. EHR has the capability to self-fund their healthcare insurance if employment levels reach approximately 5,000. Currently, 2,300 employees is not enough to self-fund, but based off of the growth of the company, it seems possible in the next 510 years. EHR has few employee wellness programs and could start more, such as a nutrition

program for healthier eating habits, stress management programs, and financial fitness programs (Wellness). EHR may also consider implementing a Minimum Premium Plan (MPP). This would be a great step towards self-funding healthcare plans. There are two parts of an MPP: uninsured portion, insured portion. The uninsured portion involves EHR funding fixed costs to pay for premium tax, administration costs, and insurer profit and commission. Then, EHR would fund all anticipated claims based off of prior claims experience within the company. The insured part involves an insurer that is obligated to pay claims that exceed only a set limit, the maximum claims liability of EHR (Latham). A MPP is a step between self-insuring and fully insuring. The company has the potential to self insure only if rapid growth is maintained and the actual desire to self-insure stays.

Conclusion
Executive Health Resources has to perform well at attracting and retaining employees based off of their growth over the past five years. Mr. Furrukh Munawar helped us greatly in providing the necessary details to complete this project. He was quite open about everything we asked and showed no fear in answering. Mr. Munawar had a significant amount of confidence in the employee benefit program. He believes that it is working based on a low turnover rate of less than 10%. Rarely do employees quit. Growth will become harder as finding more potential employees becomes a greater challenge. Self-insuring is an ultimate goal that Executive Health Resources is hoping to achieve.

Works Cited Bryson, Trent. "The Benefits of Cafeteria Plans." Entrepreneur. 14 Sept. 2005. Web. 6 Dec.2011.<https://blackboard.temple.edu/webapps/portal/frameset.jsp?tab_tab_gr oup_id=null&url=%2Fwebapps%2Fblackboard%2Fexecute%2Flauncher%3Ftype %3DCourse%26id%3D_4310_1%26url%3D>. Griggs, Eugene, and Kelsey Mayo. "Offering Benefits to Employees - When Benefits Are Subject to ERISA & What That Means." Poyner Spruill, 12 Feb. 2010. Web. 6 2011. <https://blackboard.temple.edu/webapps/portal/frameset.jsp?tab_tab_group_id=n ull&url=%2Fwebapps%2Fblackboard%2Fexecute%2Flauncher%3Ftype%3DCou rse%26id%3D_4310_1%26url%3D>. Munawar, Furrukh. Personal Interview. 29 Nov. 2011 Schreck, Tom. "Self-funded Health Insurance: It's about Risk, Vulnerability, Cost Savings."The Business Review. 5 Dec. 2005. Web. 5 Dec. 2011. <https://blackboard.temple.edu/webapps/portal/frameset.jsp?tab_tab_group_id=n ull&url=%2Fwebapps%2Fblackboard%2Fexecute%2Flauncher%3Ftype%3DCou rse%26id%3D_4310_1%26url%3D>. Sharon, Bill. "2010 Health Care Trend Survey." Aon Consulting, 2010. Web. 4 Dec. <https://blackboard.temple.edu/webapps/portal/frameset.jsp?tab_tab_group_id=n ull&url=%2Fwebapps%2Fblackboard%2Fexecute%2Flauncher%3Ftype%3DCou rse%26id%3D_4310_1%26url%3D>. "Workers Motivated by Richer Benefits." EBN. Employee Benefit News, 31 Aug. 2006. Web. 05 Dec. 2011. <https://blackboard.temple.edu/webapps/blackboard/content/contentWrapper.jsp? 2011. Dec.

content_id=_2334893_1>. Tinnes, Christy, Brigen Winters, and Groom Law Group, Chartered. "Preparing for Care Reform: A Chronological Guide for Employers." Blackboard Learn. International Foundation of Employee Benefit Plans, 23 Oct. 2010. Web. 05 Dec. 2011. Health

<https://blackboard.temple.edu/webapps/blackboard/content/listContent.jsp?cours e_id=_ 4310_1>. Wellness Proposals. "Employee Wellness Program - Corporate Wellness Program." Employee Wellness Program - Corporate Wellness Program. Employee Wellness Proposals, 2006. Web. 07 Dec. 2011. <http://www.wellnessproposals.com/>. Latham, Russel, and Annette Boyce. "Guidance for Reporting Minimum Premium Department of Consumer Businesses and Services, 25 Jan. 2010. Web. 7 Dec. 2011. Drennan, R. B. "Online Lecture: COBRA." RMI 3501. Temple University, Philadelphia. 7 Dec. 2011. Lecture. Plans."

From: Subject: Date: To:

SHANNON M MCBRIDE <smcbride@temple.edu> Fwd: Regarding Meeting for School Project December 8, 2011 3:13:56 PM EST "Justin M. Kemp" <Kemp.M.Justin@gmail.com>

---------- Forwarded message ---------From: Furrukh Munawar <fmunawar@ehrdocs.com> Date: Thu, Dec 1, 2011 at 9:26 AM Subject: Re: Regarding Meeting for School Project To: "smcbride@temple.edu" <smcbride@temple.edu>
Shannon: It was a pleasure to spend time with you and Justin. Best wishes, Furrukh

From: SHANNON M MCBRIDE <smcbride@temple.edu> To: Furrukh Munawar Sent: Wed Nov 30 18:22:42 2011 Subject: Regarding Meeting for School Project

Dear Mr. Munawar, My name is Shannon McBride. I had a meeting with you yesterday with Justin Kemp to talk about your company's employee benefits for a school project. I wanted to thank you for taking the time to talk to us about your company. The information you provided for us was very helpful. By helping us with this project, you gave us the opportunity to apply our classroom knowledge with more hands-on experience. This will be very beneficial to us in the future, especially when we graduate college and get a job.

Again, thank you for taking time out to help us with this project.
Sincerely, Shannon McBride Temple University Fox School of Business and Management Risk Management and Insurance Accounting smcbride@temple.edu 267-391-9670
This email message, including any attachments, is for the sole use of intended recipient(s). If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. This email, including any attachments, may contain confidential and/or proprietary and/or privileged information. Any unauthorized use, disclosure or distribution is prohibited

-Shannon McBride Temple University Fox School of Business and Management Risk Management and Insurance Accounting smcbride@temple.edu 267-391-9670

From: Subject: Date: To:

Furrukh Munawar <fmunawar@ehrdocs.com> RE: Thank You - Consultancy Project Meeting November 30, 2011 9:43:54 AM EST 'Justin Kemp' <kemp.m.justin@gmail.com>

Justin: It was a pleasure to assist you and Shannon in your project. Best of Luck, Furrukh
___________________________ Furrukh Munawar Chief Financial Officer

Executive Health Resources, Inc.

15 Campus Boulevard, Suite 200 Newtown Square, PA 19073 Main: 610.446.6100 Direct: 484.362.1745 Mobile: 510.693-.0969 Facsimile: 484.451.1182 Email:

fmunawar@ehrdocs.com

From: Justin Kemp [mailto:kemp.m.justin@gmail.com] Sent: Wednesday, November 30, 2011 9:26 AM To: Furrukh Munawar Subject: Thank You - Consultancy Project Meeting

Dear Mr. Munawar, It was a pleasure talking to you yesterday about your employee benefits program. The structure of the offered program is quite different from many of the examples that Shannon and I were taught in our class. I find it very interesting that you offer noncontributory benefits to your full time employees, but then again, it is crucial to attract and retain many high level professionals. I cannot thank you enough for taking the time out of your busy schedule to listen and answer our questions. I truly appreciate the amount of detail and information you provided us. Thank you very much! Sincerely, Justin M. Kemp
This email message, including any attachments, is for the sole use of intended recipient(s). If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. This email, including any attachments, may contain confidential and/or proprietary and/or privileged information. Any unauthorized use, disclosure or distribution is prohibited