Attract Employees, Improve Health
As a medical practice, Advanced Physical Therapy is not only dedicated to improving patient health but is also committed to caring for its eighty-five employees.
Supplemental insurance options and benefits
Advanced Physical Therapy has a full medical plan for all of its eligible employees—those who have been with the company for at least sixty days and work a minimum of thirty hours a week. The company, which has five locations in Alaska, also offers dental and vision insurance as part of the group plan it carries through Premera Blue Cross Blue Shield of Alaska.
Advanced Physical Therapy strives to offer a generous benefits package. “For medical and dental, we pay 85 percent of the premium for employees and for any dependents they have on their plan,” says Practice Administrator Divida Pastorino. “For vision, we pay 100 percent of the coverage for our employees. The employees have to pay for their family’s vision plan, which is a minimal fee. The maximum for a family vision plan is $22 per month.”
Advanced Physical Therapy also provides $50,000 worth of life insurance, short-term disability, and long-term disability coverage. It pays 100 percent of the cost for employees, who may purchase additional life and disability insurance for their dependents. The company gives workers a health reimbursement account (HRA) card preloaded with $2,500 that they can use for prescriptions, medical copays, acupuncture, massages, and other qualified expenses.
The HRA card, which works similar to a prepaid Visa debit card, is issued to all employees who work thirty hours a week or more—even if they are not on the company’s insurance plan. Offering this perk, along with the other supplemental insurance benefits, are all part of the company’s culture. “It’s important that we make sure our staff is taken care of, and offering good medical insurance and other benefits helps with that,” Pastorino says.
Insurance Types and Providers
Companies like Advanced Physical Therapy are capitalizing on supplemental insurance to help their employees protect their health and financial wellbeing. These products—sometimes referred to as ancillary or voluntary insurance—are often provided as part of employers’ regular health coverage. They are available from a variety of sources throughout Alaska, including Aflac Inc., State Farm, Premera, New York Life, and Colonial Life & Accident Insurance Company.
Aflac—which stands for American Family Life Assurance Company—is one of the largest providers of supplemental insurance in the United States. It sells supplemental insurance on both the individual and group platform.
Aflac offers individual products that cover various issues related to accidents and serious medical conditions, as well as programs that focus on replacing lost income. Aflac agents are also equipped to sell some of the most requested benefits such as vision, dental, and life insurance. Employees can purchase most of these products directly from an independent agent licensed to sell Aflac products. “Today, there are more than 1,000 companies across Alaska that allow agents to offer Aflac products on site to bolster their benefit offering for their valued employees,” says Joe Price, an Aflac marketing director who is based in Renton, Washington and handles Alaska.
Agents of Aflac can also offer group products for larger businesses and broker clients focused on the same types of medical issues covered by its individual products. According to Price, there are dozens of independent agents who are licensed to sell Aflac products and can work with businesses in Alaska—whether they’re in Barrow or Dutch Harbor. “We can help business owners navigate the complexity of healthcare reform and act as a trusted advisor,” Price says.
In Alaska, some of the most popular Aflac supplemental insurance policies are those that cover accidents, cancer, disability, and some hospitalization plans that integrate with their major medical plans. The difference between Aflac products and other insurance is that they pay benefits directly to policyholders. Those policyholders are free to spend their benefits on whatever they choose, whether it’s on rent or groceries. “Our products provide a safety net for policyholders in the event of an illness or accident that might cause them to lose part of their income for a period of time,” he says.
State Farm offers a variety of supplemental policies to individuals as well as employer-provided benefits. Some of its most utilized plans are hospital income policies, disability income insurance (short-term and long-term), and life insurance (group and individual). Disability insurance is one of the most requested options among State Farm clients in Alaska, according to agent Stacey Allen. “Supplemental insurance such as disability income policies can be utilized for many businesses but are especially beneficial for local Alaska companies that are looking to work with a local agent who can provide personalized service based on their company’s needs,” she says.
Group life insurance, Allen says, is one of the most valuable and affordable options employers can provide to their employees. Group life allows employees to secure life insurance coverage at a low group rate and premiums that are competitively priced. With this option, employers would work directly with the insurance company to facilitate an annual renewable term life insurance policy.
State Farm also offers a number of individual plans for Medicare supplemental insurance. These types of policies can help fill the gap for people who qualify for government-provided Medicare plans. They’re specifically designed to help individuals take care of the deductibles, coinsurance, and copayment amounts not covered by Medicare. “Medicare supplement insurance is something that eligible employees may elect to cover for themselves,” Allen explains. “Policies offered by State Farm work in partnership with expenses that the original Medicare plan would not cover.”
According to Allen, State Farm has some of the lowest and most competitive Medicare supplemental insurance plans available to consumers. Coverage for this type of insurance is consistent in all states, but the cost varies by location. In Alaska, Medicare supplement insurance monthly premiums are as low as $126.25 for a 65-year-old female non-smoker and $136.75 for a male non-smoker who is 65.
Most of the clients State Farm serves are at the individual level; however, the company is seeing more employers reaching out to see what plans the company can offer to provide additional benefits to their existing teams as well as new recruits. Whether it’s for individual or group coverage, State Farm provides customized service and caters to both employers and employees alike. “State Farms offers many affordable, unique plans to fit busy Alaskans who are looking for a company that they can rely on to protect themselves and their families today, tomorrow, and future generations,” Allen says.
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Benefits of Supplemental Insurance
There are a number of ways companies and their employees can benefit from supplement insurance. More and more employers are pulling back on employee benefits, but a business can differentiate itself by offering benefits as part of its recruitment process, Allen says. This can also have a positive impact on their taxes situation. “Aside from offering a competitive advantage in the marketplace, some employers may qualify for a tax benefit for providing this coverage as well,” she says.
For Advanced Physical Therapy, offering supplemental insurance is of paramount importance. In fact, the company tends to cover more of the costs, percentage wise, as compared to other practices in Alaska, according to Pastorino. It’s essential for Advanced Physical Therapy to have healthy employees in order to be able to make its patients better. But the benefits of providing extra insurance coverage for staff definitely enhances the company’s recruiting efforts. “We recruit a lot of people from the Lower 48, and having a generous benefits practice definitely helps with that,” she says.
Melany Miranda, human resources and safety manager at Alsco Linen and Uniform Rental Services, expresses similar thoughts. She considers supplemental insurance to be advantageous for the company as well as its employees. “If you don’t take care of your employees by providing these type of benefits, they won’t be here to do the work you need them to do,” she says. “With insurance employees are here, and they’re healthy.”
Perhaps equally as important, providing supplement insurance is an effective retention tool for Alsco. During her seven-year tenure with the company, Miranda says she has seen about ten employees retire after working at Alsco for twenty years. She says, “We don’t have a high turnover rate.”
Price points out that most business owners today are facing all types of challenges: They’re battling rising costs, are trying to remain competitive within their market, and have challenges retaining employees and attracting talent. Many of them also worry about employee productivity and are in an environment where the administrative burden of offering benefits is at an all-time high. “Offering voluntary benefits can assist them with tackling some of those issues, and we have a variety of programs to help them face those challenges head on,” he says.
The insurance industry, in general, is complicated, so Aflac works hard to educate employers and individuals about the choices that exist, Price says. Many employees across the state don’t understand their current benefits, let alone any additional benefits that may be available. “We focus a great deal on education because when employees understand the value that Aflac products provide, they tend to have strong interest in owning a policy,” he says.
There really is no downside to voluntary insurance, Price says. He explains: “We are providing products that help employers make their business more attractive to potential and current employees. At the same time, we provide the peace of mind that employees want so that if they have an unforeseen medical situation, they will be able to maintain their finances.”
Expert Insights and Trends
While many companies provide some type of supplemental insurance products as part of the health coverage for their employees, larger businesses tend to go a step further. They may have a wider array of additional insurance options or assume more of the cost of the insurance products they choose to provide.
For businesses like Alsco, it’s important to present its 120 employees with an opportunity to obtain supplemental insurance. Alsco provides medical insurance for all of its unionized and nonunionized employees, along with dental and vision insurance, according to Miranda. The cost for dental and vision insurance is partially covered by the company at varying amounts, depending on the status of the employees.
Alsco also provides a $10,000 life insurance policy at no cost to its workers. “They can add disability insurance and dismemberment insurance, and the company will pay a portion of it for the employees,” Miranda says.
Alsco presents all of its employees with information about supplemental insurance; they can then sign up for coverage with a third party, TrustMark, which handles the administration. Miranda says the majority of Alsco’s employees sign up for the company’s supplemental insurance offerings. That’s not surprising, given that the additional insurance is fairly inexpensive and the cost can be deducted from employees’ paycheck. Miranda, for example, pays just $13.76 a week for critical illness coverage from TrustMark. “I think it’s great,” she says.
So do different industries in Alaska use supplemental insurance more than others or choose certain kinds of coverage? The quick answer is no, from Aflac’s perspective. The company’s programs cover the entire spectrum of issues, but where it sees differences in selections is in the life stage category rather than the industry, according to Price. “For example, a younger family might be more concerned about replacing income and accidents that happen to small children so they gravitate toward those programs,” he says. “As that family becomes older, their needs might change and their concerns migrate toward life insurance and preparing for a major illness. We specialize in the needs of the employee and not blanket programs for the employer.”
In fact, Aflac spends a considerable amount of time training its independent agents to address the needs of employees in diverse industries and with varied needs. “We try not to assume that the commercial fisherman is only concerned about having an accident on the job and will need money if he gets hurt,” Price says. “That commercial fisherman might have a family history of cancer or something like heart disease and is really more concerned about the financial impact of being diagnosed with a critical illness.”
He adds: “It is our job to act as a consultant and ask the right questions and to listen to the needs of the consumer. We have just as many bank tellers trying to protect their income when their children are young or are planning to start a family as the construction worker who might get hurt and can’t work.”
Like Price, Allen says she hasn’t noticed any distinctions in how different industries use supplemental insurance. However, she says local agents are equipped to help employees with their specific situation. “These are the types of scenarios where a local agent can really make an impact on a family by providing a personalized policy for an individual to meet their short- and long-term needs,” she says.
In terms of costs, insurance providers indicate that employees in Alaska pay about the same amount for their supplemental insurance coverage. Allen of State Farm says, “For hospital income policies, Medicare supplemental insurance, etc., these generally seem to be competitive with what is offered cost wise in the Lower 48.”
Aflac, from a product design and pricing perspective, offers the same types of products at the same prices as other states across the United States, Price says. He adds, “That being said, we are regulated by the state department of insurance, and they have the ability to require slight changes to a product which could then impact the price slightly.”
However, Price says he has noticed a trend of cost sharing—in favor of employees. He explains: “Historically, employees have been responsible for 100 percent of the cost of their product, but we have seen a shift over the last few years as consumer-driven healthcare has moved across the landscape. Business owners are seeing the benefit of offering voluntary benefits so many are starting to supplement the cost to the employees. They see how we are helping them drive the solution of managing costs or reducing employee turnover so they share the cost of the product with the employee.”
As a final thought, Price says Aflac is serious about its commitment to serve employees and help them make the right decisions around their benefits choices to protect themselves and their families. “There are people all across the state who are having serious accidents every day and are diagnosed with a life-changing illness,” he says. “We are trying to find them as fast as we can so they know about us and what we do, so we can be there in their time of need.”
Tracy Barbour has been an Alaska Business contributor since 1999. As a former Alaskan, she is uniquely positioned to offer in-depth insight and enjoys writing about a variety of topics.
In This Issue
Out of the Mine and into the Smelter
Mining has long been a key fixture of Alaska’s economy. On a small scale, people flock to the 49th state to tour different operations. Kennecott Mine was once a booming copper mining site and is now a National Historic Landmark, attracting tourists eager to visit the ghost town and get a feel of the Gold Rush era it once dominated.