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Mental ‘Rubber Ball’ Continues…and a BIG ‘Thank You!’

Mental Rubber BallIt all began in 1998 – and it wasn’t my idea.

About three years after starting David P. Lind & Associates, my first and only associate at the time, Brad Johnson, walked into my office and sat down across from my desk and asked, “Do you have a few moments?” I must admit, I did not know what to expect from this unanticipated dialogue – and I was a bit nervous.

“Sure.” I said.

For the next couple of hours, we had a discussion that I will never forget. Brad had an idea, and he wanted to knock the concept around like a rubber ball in a racquetball court. In addition to the floor, it hit all four walls and the ceiling countless times and it was virtually impossible to contain its’ kinetic energy after each subsequent surface smack. The idea was growing legs quickly!

From this experience, came my first big lesson in business: Never underestimate ideas that come from your employees. In fact, ALWAYS encourage suggestions and new approaches that may seem too big at the time. After giving the idea(s) the necessary attention, time and dialogue, allow it (them) to simmer and then revisit the concept with additional levity and a fresh perspective. Then, if appropriate, ACT!

Brad’s idea was a simple one. “Why not perform an employee benefits study in Iowa to help our clients (employers) benchmark their benefit plans to other employers locally?” His suggestion was basic – yet brilliant!

Another lesson? Don’t spend a great deal of time looking at your competition. Instead, watch what people actually do, observe what they use, how they see, feel, hear, touch and interact with every aspect of a product or service. Then move on it.

In the 16 years since my game of mental ‘rubber ball’ with Brad, we have completed 16 annual employee benefits studies, and surveyed 12,460 employers. During that time (1999-2014), Data Point Research, Inc. has served as the backroom ‘engine’ for undertaking this survey process. I am grateful for the work they do and the professionalism they consistently demonstrate on behalf of my organization.

Scott Woodruff of Majestic Limousine Services

Scott Woodruff of Majestic Limousine Services

As in 2013, we offered a special incentive to employers who took part in this year’s survey. Participants were automatically entered into a random drawing for one of two iPads. This year’s winners are Amy Hanson of Prairie Lights Books (Iowa City) and Scott Woodruff from Majestic Limousine Service (West Des Moines). Both recently received their iPads and were gracious to allow me to use their names within this blog. Thank you, Amy and Scott. Again, congratulations!

And a big thanks to the other 1,000 organizations who participated in this year’s survey! If your organization was one of this year’s survey participants, an email was sent to you on September 17, 2014, with a unique link to download your FREE copy ($300 value). If you missed this email, please check your Spam or Junk email folders. Otherwise, please contact us.

For the record, kinetic energy has taken that simple rubber ball into new, unexplored surfaces outside the racquetball court. No telling where the ball will eventually go!

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A ‘Ghoulish’ 10 Years Ahead in Projected Health Insurance Premiums

Bloody Zombie

WARNING: Poor attempts will be made within this blog to scare the reader back into reality.

As we enter the month of ‘Trick or Treating,’ it seems an appropriate time to share something that will most likely frighten all of us – our inflated health insurance premium projected out to the year 2024.

From our latest Iowa Employer Benefits Study©, we learned that the average annual family health insurance premium in 2014 is $14,981. This is not the spooky part of this blog, although, this number is alarmingly high.

Much like a witch concocting a putrid brew in a cauldron, I took the liberty to trend forward the family premium for the next decade by using the previous five-year-average of reported premium increases in Iowa – which is a bone-rattling 9.2 percent. Below is the five-year history of rate adjustments reported by Iowa employers prior to making any alterations to their health plans.

2010 – 13.0%
2011 – 10.1%
2012 – 7.0%
2013 – 9.0%
2014 – 6.8%

Yes, I could have averaged the most recent three years (7.6%), but I have this freakish suspicion that despite the intention of the Affordable Care Act, future increases will periodically exceed the recent three-year average. We will continue to experience the by-product of a very sinister health care ‘system’ – warts ‘n all.

The slide below depicts the spine-tingling results of trending our family premium rate forward for the next 10 years (compounded annually at 9.2%) and showing the annual employer and employee contributions (based on the employer contributing 68 percent of the total cost). One squeamish by-product of inflated health rates not shown on this slide are the plan design alterations that will surely be made by employers to shift costs to employees in order to keep the rates ‘manageable.’ This discussion will need to take place in a later blog.

The family premium in 2024 would come in at a spooktacular $36,121! This amount is 240 percent beyond today’s average family premium in Iowa.*

10 Year Projection of Family Premiums in Iowa

Also worth noting, the trend line above the premium represents the estimated annual household income (HHI) in Iowa, compounded annually by 1.5% to 2024. The bubble above the $66,474 HHI for 2014 represents the percentage of the premium to HHI. This percentage is projected to double by 2024 if we cannot control the healthcare grim reaper. In short, almost half of our household income could disappear to healthcare costs.

The possibilities of this projection provides goose bumps, much like walking past a graveyard on a stormy night and hearing moans and groans from the dark.

Be prepared. The zombies are coming.

*DISCLAIMER:
I am NOT predicting that family premiums in Iowa will be $36k by 2024. Rather, based on past behaviors, employers will continue to find ways to alter their plan designs to keep their premiums lower than the initial increases they experience. Because of this, health plans will look considerably different in 10 years than they do today.

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New 2014 Lindex® Scores – Find out how to Obtain Yours!

2014 Lindex GaugeWe’ve just released the new Lindex® scores based on our 2014 Iowa Employer Benefits Study©. Introduced in 2013, the Lindex is an innovative tool that allows Iowa employers to distill voluminous and complicated benefits data into one relevant number.

An organization’s Lindex score will help Iowa employers:

  • Determine the competitiveness of their benefits package.
  • Attract and retain a high-quality workforce.
  • Decide whether benefit changes are required to keep your employee benefits competitive.

The Lindex is a composite score used as a reference when determining the quality of benefits offered by Iowa organizations. This index is the result of a sophisticated calculation based on the benefits data submitted by 1,002 Iowa organizations from the latest 2014 Iowa Employer Benefits Study©.

Calculated once a year, the Lindex ranges from 0 to 100, with low scores reflecting fewer benefits offered at a higher cost to employees, while higher scores indicate more benefits being offered at a competitive cost.

In 2014, the overall Lindex score for Iowa employers (regardless of employer size and industry) is 74. Last year’s overall Lindex score was 72. The Lindex score will vary based on the employer size and industry. For example, employers with fewer than 10 employees have a Lindex score of 61, while employers with at least 1,000 employees averaged 82. Employers in the retail industry averaged 65, while government employers averaged 83.

Below is a summary of the Lindex scores based on organization size:

2014 Lindex by Organization Size

 

Below is a summary of the Lindex scores based on industry:

2014 Lindex by Industry

 

It’s important to note that an organization with a Lindex score of 68 might appear to be somewhat low when compared to the overall statewide score of 74, but if this score is above the average Lindex score for similar organizations based on size and industry, then it could be considered a good score for that organization.

To purchase a copy of the 2014 Iowa Employer Benefits Study© and/or Lindex Online benchmarking tool, click here.

To learn more about the Lindex, and how your organization can discover/attain/retrieve your own Lindex score, please visit the Frequently Asked Questions (FAQ) section of our website.

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