How can plan sponsors’ benefits programs address health and retirement plan benefits all at once? Chris Luongo, vice president, strategy, investment and marketing at ADP Retirement Services, said, “There is no one solution to the problem.”
“Deciding which benefits to prioritize needs to be an overall strategy of an organization—every benefit has a symbiotic relationship with another,” according to J. Brian Coleman, vice president of total rewards and human resources (HR) shared services for Dawn Food Products.
Karen Vacchhio, senior director, compensation, benefits and HR systems at Dealertrack, said she looks ahead years in advance to plan benefits and, by planting the seeds of change early on, is able to get buy-in from the company’s chief financial officer (CFO).
This new holistic view of retirement and health care benefits shows how everything intersects. Dawn Food Products, the 2016 Plan Sponsor of the Year winner in the Corporate 401(k) $50MM – <$200MM category, and Dealertrack, a 2016 finalist in the same category, have been taking this approach for many years.
To enable employees to take advantage of a more affordable, high-deductible health plan, for instance, Dawn Foods shored things up by offering an accident plan. How to lower leakage? When Coleman discovered that loans were being taken to purchase high-ticket items, he was able to lower leakage by 5% by offering a purchasing plan: Payments for expensive purchases were taken from an employee’s paycheck in installments to preserve retirement funds.
When Dealertrack’s health care costs were growing increasingly expensive, the firm changed to a high-deductible health plan with a very generous health savings account (HSA), said Vecchhio. “We did this intentionally, adding a $1,500-per-year contribution plus other health screening financial incentives, and we taught participants how to use the health benefits associated with the HSA and how to invest funds.”
Both Dealertrack and Dawn Food Products offer various medical services to employees, to help them find the right doctors, medical cost transparency tools and help with medical bill pay.
Luongo added, “Teaching people at a younger age how to be more efficient with their money is key.”