yuzheng liu - don guanella village

8/2/2019 YUZHENG LIU - Don Guanella Village

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Benefit Analysis: Don Guanella Village Page 0

Benefits Analysis:

Don Guanella Village

Developmental Programs

Part I: Benefit Matrix

Part II: Inventory of Benefits

Yuzheng LiuCharles YerkovRMI 3501

Dr. DrennanFall 2011


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Table of Contents

Benefit Matrix - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2

Summary Of Benefits - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - -3Inventory of Health Care Benefits - - - - - - - - - - - - - - - - - - - - - --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- - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --8Standard 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 / Physician Yes Personal Choice PPO, Keystone POS, Keystone HMO

Vision Yes All health plans*

Prescription Yes All health plans*

Major Medical Yes Keystone HMO

LTC Yes Long-Term Care Program

Retiree Health Care Yes COBRA

Dental Yes Personal Choice PPO, Supplemental Dental Insurances***

Loss of Income: Death

Non-Accidental, Non-Occupational

Death

Yes Term Life Insurance, 403(B) plan, OASDI

Accidental Death Yes Term Life Insurance, 403(B) plan, OASDI

Occupational Death Yes Term Life Insurance, 403(B) plan, OASDI, Workers

Compensation

Loss of Income: Unemployment

Unemployment Yes Unemployment Insurance through the state of Pennsylvania

Loss of Income: Disability

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

Long Term, Non-Occupational Yes LTD, 403(B) plan, OASDI

Short Term, Occupational Yes STD, 403(B) plan, OASDI, Workers Compensation

Long Term, Occupational Yes LTD, 403(B) plan,OASDI, Workers Compensation

Loss of Income: Retirement

Retirement Yes 403(B) plan, OASDI

Other Loss Exposures

Educational Assistance Yes Dependent, Spouse Benefits under AD&D Insurance

Legal Expenses Yes 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 A.M. Best

Rating

Financing Funding Eligibility

IBC Personal Choice

PPO(comprehensive)*

N/A Contributory Fully

Insured

Full-time Active Employees

and Dependants

IBC Keystone POS

(comprehensive)*


Insured


and Dependants

IBC Keystone HMO

(comprehensive)*


Insured


and Dependants

CIGNA Long Term

Care

bbb

(Adequate)**

Contributory Fully

Insured


and Dependants

IBC Supplemental

Major Medical***

N/A Fully Contributory Fully

Insured


and Dependants

Aetna Dental PPO A (Excellent)** Contributory Fully

Insured


United Concordia

Flex Dental Program

A- (Excellent)** Contributory Fully

Insured


UNUM STD bbb

(Adequate)**

Non-contributory Fully

Insured


UNUM LTD bbb

(Adequate)**

Non-contributory Fully

Insured


UNUM Term LifeInsurance

bbb(Adequate)**

Fully Contributory FullyInsured


Unemployment

Compensation


Insured


VALIC 403(b) N/A Contributory Fully

Insured


PENN Behavioral

Health EAP

N/A Fully Contributory Fully

Insured


Educational

Assistance

N/A Non-contributory Self-funded Full-time Active Employees

Paid Time Off 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 ishttp://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.
http://www.ambest.com/http://www.ambest.com/http://www.ambest.com/http://www.ambest.com/


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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. To enroll, one must be a full-time employee

with three months tenure. If an employee meets the two requirements, they have the


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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

over 58,000 doctors and 100 hospitals, on their website. There is no need to select a

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

comprehensive than the more basic 5 plan. Only full-time employees are eligible for

these plans. A full-time employee is defined as an employee who works 65 hours

over each two week period.

Keystone Health Plan East HMOAnother 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


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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. The plan also covers 100%

of hospital care, lab work, and x-rays. 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

deductibles and coinsurance provisions. The network of doctors available as

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

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

fee-for-service dental program and features freedom of provider choice. The

network includes 4,800 dentists and specialists to choose from. 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 ProgramDon 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 ProgramDon 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

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

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

STD, they can become certified to receive LTD benefits. The plan will provide

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


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Retirement Benefits

403 (b)

Full-time employees of Don

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

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. In addition, you can contribute an extra $5,000 per

year after the age of 50

Vesting Schedule

Years of

Service

Percentage

Less than 2

0%

225%

350%

475%

5100%


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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. Don Guanella covers all costs for the EAP via a flat monthly

rate.


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Don Guanella Village

Developmental Programs

Part III: Benefit Analysis

TUid: 912580772TUid : 912459138RMI 3501

Dr. DrennanFall 2011


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Table of Contents

Introduction - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2

Overall Consideration in Design- - - - - -- - - - - - - - - - - - - - - - - - - - -3Goals - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --4

Demographics - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --4

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

nefits

Problems, Issues, Concerns, and Considerations in the Design of Other Non

-Retirement Benefits

Conclusion

A Letter of Appreciation- - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Appendix


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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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GoalsWhen 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 InflationUnsurprisingly, 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 DrugsDGV 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 CareDGV 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 SelectionAdverse 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

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

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


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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

communicates their benefits super-effectively. Another strategy that DGV uses is a

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

regarding continuation of coverage. Although there is a high turnover rate in the

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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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. The benefits

structure that DGV currently offers is very rich. 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.

yuzheng liu - don guanella village

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