Could You Benefit from an Employee Benefits Committee?

By Lin Grensing-Pophal Feb 26, 2009
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If you want to offer a benefits mix that employees will truly value, give them a say in the process. That's the advice of many benefits specialists, including Dave Johnson, a senior benefits consultant with CBIZ Employee Services in Kansas City, Kan. His firm works with many public entities—cities, counties and school districts—where employee benefits committees are common. And, although these entities tend to be unionized, the committees are not union committees. “It’s just a team of employees,” he says.

The role of the committees tends to be two-fold: sharing employee input with plan administrators, and helping to educate and inform other employees about benefits issues—and complexities.

If you're not quite ready to commit to working with an employee benefits committee, then consider starting with something less formal, like employee focus groups. That's the approach used by Connie Rank-Smith, SPHR, vice president of HR for Jewelers Mutual Insurance Co. in Neenah, Wis. While Jewelers Mutual doesn’t use a formal committee to generate input, they have used the focus group approach “with incredible success,” Rank-Smith says.

In 2008, the company was going to switch to a health plan deductible under which Jewelers Mutual would pay the first $500 in medical expenses and the employee would pay the next $1,000. "The feedback we got was that $1,000 was too much for them to pay all at once," says Rank-Smith. In response, she worked with the third-party administrator to offer a "split deductible" whereby an employee pays the first $500 in expenses, the company covers the next $500 (via payment into a health reimbursement account), and when that money is spent, the employee is responsible for the next $500 in medical expenses.

“It really didn’t change anything, but they loved it,” Rank-Smith says. Using focus groups proved to be a great way to get feedback “at the ground level” before making a decision that could inadvertently cause undue concern and resentment among employees.

As with employee committees, part of the purpose of the focus groups is to educate participants themselves, Rank-Smith notes.

“Of all areas of human resources, I feel most strongly about this area, largely because benefits not only impact the employee but the employee’s family as well,” says Matthew Rosen, HR director at Schiller International University in Largo, Fla. While he has not worked with a committee per se with respect to benefit solutions, he has “always been very aggressive in sharing benefits information, plan design and pricing information with employees and their families.”

Rosen goes beyond employees to communicate with another critical audience— employees’ families. “It sometimes makes sense to invite the spouse into the workplace to discuss benefits,” he says. “This does wonders for employee morale and company relations.” It is not an original idea, he admits—he says he stole it from Toyota.

But some warn of ceding too much to employees. “I’ve had some dismal results using employee committees for decision-making regarding benefits,” says Linda Konstan, an HR consultant and principal of LMK Associates in Denver. Input, she says, is one thing; decision-making quite another. Konstan says she has garnered the best results using employee surveys to help guide her decisions.

Opportunities for Input

While not all use formal employee committees, all do seem to agree on one critical point —employee input is important. Benefits aren’t benefits unless employees believe they are, Johnson points out.

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Benefits aren’t benefits unless employees
believe they are.

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“Employees want to feel like they have a say about their programs,” he says. “Obviously the employer will make a decision as to how much they’re going to spend, but that’s just a minimal part of the decision-making process.” Once the dollar figure has been established, a broad range of questions need to be addressed, such as:

Do you want the committee to concentrate on just the medical plan, or do you want to expand its scope to include dental, vision, disability, etc.?

Is time off more highly valued than other benefits?

Are employees willing to make some tradeoffs to gain value in other areas?

It can boil down to something as simple as: “Do you want us to spend more on your benefit or on your salaries?” says Johnson. With benefits, there are always myriad issues to confront, and having employee input can be a great way to address them, he believes.

Keys to Effective Committees

For those brave enough to consider the possibility of an employee committee designed to provide input into benefit decisions, there are some best practices that can boost the value and minimize the potential downfalls associated with this type of input.

Make roles clear. At the outset, says Johnson, committee members should clearly understand the purpose of the committee and the role they play as committee members. That role is not, he stresses, decision-making. Whether in written or verbal form, it should be clear to committee members that “we value your input and your opinions but the final decision is going to rest with administration.”

Rotate committee membership.Having the same group of people on a committee for years is “not necessarily good,” says Johnson. Instead, he advises rotating membership to offer opportunities for new insights and perspectives.

Populate committees with diverse employee representation.Try for a broad mix of employees, Rank-Smith recommends. Recruit new employees as well as seasoned ones. Try to represent young and older demographics from the workforce because employees will have different benefits needs and concerns at different stages in their lives. Look for employees who represent as many levels and as many areas of the organization as possible. The goal, she says, is to pull together people “who are as representative of your entire employee population as possible.”

Share and simplify information.“Try to provide them with as much information as possible,” Johnson advises. He makes it a point to be available to committee members who might have questions following a meeting, and he attempts to simplify the information shared as much as possible—while still ensuring that education occurs. “Many times we’ll provide long, structured reports to benefits committees, but we’ll simplify and make sure they understand, for instance, how a loss ratio is derived and what it means,” he says.

In addition, it is important to make sure that committee members are sharing that information with their colleagues— “spreading the word,” so to speak, Johnson says.

Be armed with answers.“You need to be prepared to listen and prepared for pointed questions,” says Rank-Smith. And, she says: “You need to be armed with information.” By this she means not only information about your company and its benefit practices, but also information on a broader level. Talking about national trends in the cost of health care, for instance, has been beneficial. “We’ve been able to share that what we’re doing here is indicative of what’s happening across the country,” she says.

More Than an Annual Event

Johnson points out that employee benefits committees are not just a once-a-year activity. Effective committees meet regularly throughout the year to discuss how the plan is working, to review claims experience, to share feedback and the like.

“An employee committee is a great way to communicate benefit information to a smaller number of people who are easier to work with, easier to educate, and who can pass along information to others,” says Johnson. While he admits that there can be challenges involved in using employee committees to provide input into benefit decision-making, the benefits outweigh the drawbacks, he believes. “By and large, if you put in the appropriate amount of time with them, they can be very beneficial,” he says.

Lin Grensing-Pophal, SPHR, is a Wisconsin-based business journalist with HR consulting experience in employee communication, training and management issues. She is the author of Human Resource Essentials: Your Guide to Starting and Running the HR Function (SHRM, 2002).

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