Benefits: Insurance

Overview

Insurance is another non-cash benefit that offers psychological security and could help an employer retain employees, even more than an equivalent salary increase. Explain your organization's insurance program and how it works in a written policy.

Health Insurance

Health and hospitalization insurance often is the most attractive employee insurance benefit. Coverage and administrative programs vary. Group programs might be as small as coverage for one office, or as broad as coverage for an entire metropolitan area, state, or nation.

A health insurance program can be administered via an endorsement or contract with a commercial carrier, such as Blue Cross/Blue Shield or Prudential, or through alternatives, such as self-insurance programs and health maintenance organization (HMO) plans. Plans are available with varying deductibles and first-dollar coverage. The policy should define and address if your organization requires premium sharing.

Group policies usually waive the requirement for a physical examination before providing health or life insurance coverage. An employee who otherwise is unable to obtain coverage on his or her own may find this attractive.

Life insurance programs may serve as an additional means of attracting and retaining employees.

Costs

Since health-care costs continue to rise at an extraordinary pace, companies will need to devote even more attention and resources to cost containment, preferred provider plans, premium sharing, increasing deductibles, alternative care programs, employee assistance programs, and retiree medical coverage.

Accounting standards recently established by the Financial Accounting Standards Board dramatically impact the balance sheets of all organizations -- future projected costs for retiree medical insurance coverage must now be accrued and carried as a liability on financial statements. And, as costs escalate, organizations might have to shift the cost of retiree coverage, in whole or in part, back to retirees, thereby reducing their spendable income.

Disclaimer

This material was developed for use by State and Local Association Executives. Some of the information may not be applicable to other audiences. This guide is intended to provide accurate and authoritative information with regard to the subject matter covered. Although every effort has been made to ensure the accuracy and completeness of this information, the authors and editors of this guide cannot be responsible for any errors or omissions. This guide is not a substitute for legal or technical advice. Associations that need legal or technical advice should obtain opinions from their own legal or technical advisors.

Consulting Services Available from NAR Human Resources

Fee-based consulting services are available from NAR's Human Resources Department. For more information, contact Donna Garcia, Director Human Resource Services, at dgarcia@realtors.org, (312) 329-8311.