Employee benefits
Benefits can make company more competitve in recruiting

A good benefits package for employees won't come cheap - benefits usually account for about a third of an employee's total compensation. But a big advantage in offering a solid package comes when you start interviewing potential hires. The more competitive you are with the benefits, the more likely you will be to recruit the best workers.

Benefits can include health insurance, dental insurance, life insurance, paid holidays, vacation pay, an employee stock ownership plan (also known by the acronym ESOP) and a company administered 401(k) plan.

Within each category there could be a range of available services, from traditional indemnity plans to managed-care options. There also are a number of cost options in most plans that include various deductibles, co-payments and maximum payouts that can help manage your premiums and those of your employees. The size of your business and the number of employees enrolled in the plan will be a determining factor in the benefits that you can afford to offer and the contributions you can make to offset your employees costs.

Navigating this intimidating array of choices can be made easier if you have a benefit plan administrator that can deliver information and customer service support in a convenient format. Research what types of Web services are available for group administrators and subscribers. Some of the services you should look for include online enrollment, reporting, eligibility, an online searchable provider directory and benefit details at the procedure level.

It's a good idea to look closely at offering dental insurance. Dental coverage is in high demand among employees in large part because a majority of those who have it will use it in a given year. At first glance, dental plans may look the same, but a side-by-side comparison of the fine print can reveal dramatic differences. Health insurers may be offering "bundled" health and dental packages with deep discounts given on the dental premiums, but look for hidden risks and pitfalls. Look for a carrier that specializes in dental.

Be sure that all the employee-benefits carriers you are considering can provide data to back up their performance claims. Look for carriers who provide performance guarantees in the areas of claim accuracy, turnaround time, customer service and cost management.

For more information on managed health care providers in Virginia, contact the Virginia Association of Health Plans or log on to its Web site for a complete description of providers offering benefits in Virginia at www.vahp.org.

Terminology
Here are some important terms you should be familiar with when comparing benefits providers:

Annual out-of-pocket maximums: The maximum amount your employees will pay toward eligible medical/dental expenses in a calendar year.

Co-payments and co-insurance: Your employees' share of the cost of covered health care/dental care services and supplies expressed as a percentage or in whole dollars.

Deductibles: The amount employees pay before a benefits plan pays its share of expenses.

Flexible Spending Accounts: Account where an employee can contribute a predetermined amount to use for qualified out-of-pocket medical expenses during the year. Money is drawn from the employees' payroll before taxes, but all unused money at the end of the year is lost.

Formulary: A list of medications covered under a prescription drug plan.

Health Savings Accounts: Accounts that must be coupled with a high-deductible health plan. Pre-tax contributions can be made into the account by the employee and employer. Money can be rolled over year after year.

Lifetime maximum: The maximum benefit paid under the benefits plan.

Network: The group of physicians, dentists, hospitals and other health-care providers that offer care for prenegotiated rates and comply with quality assurance procedures and patient services standards.

Plan year: Usually Jan. 1 to Dec. 31.

Prescription drugs: Medications prescribed by a physician for the treatment of an illness or injury. There are two types of prescription drugs - name brand and generic.

Urgent care: A sudden onset of symptoms that requires prompt medical attention.

Usual, customary and reasonable: UCR expenses are the usual fees charged by health-care providers with similar training and experience in the same geographic area in which the service is obtained. The plan administrator has the sole discretion to determine what is considered usual, customary and reasonable. UCR may also be referred to as plan allowance or maximum plan allowance.

Waiting period: The time your employees must satisfy before becoming eligible for benefits. Some medical and dental plans have eligibility waiting periods. Normally, for short-term disability benefits, the waiting period is several days but less than one week. For long-term disability benefits the waiting period is usually several months. The period begins on the first day of the disability.