HomebusinesshealthAwards and RecognitionbusinesshealthResourcesBlog
The Callery Group
About UsOur ServicesContact Us

Breaking News
Learn from the mistakes of an AOL executive when discussing any changes to your benefits plans

Maintaining a sustainable benefits plan can involve some tough decisions. As healthcare costs continue to rise, employers are asking workforces to pay a higher share of premiums, accept wholesale changes to available benefits, or find innovative ways to reduce costs. Even civil servants are not immune. Our federal government wants to replace their traditional sick leave benefits with a short-term disability plan.

But businesses of every size should tread carefully when informing employees about such changes.

Look no further than Tim Armstrong, the chief executive officer of AOL, who was recently the focus of a media firestorm after announcing proposed changes to his company's retirement benefits. During a town hall meeting he blamed rising healthcare costs, U.S. healthcare reforms known as ObamaCare ... and then the million-dollar costs to care for two distressed babies born to parents employed by AOL. "Those are the things that add up into our benefits costs," he reportedly said. "So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision to basically change the 401(k) plan."

It was bad news, and it was delivered a bad way.

Armstrong's comments about sick babies became internet fodder in a matter of hours. Criticism emerged from Twitter to news outlets like CNN. Slate Magazine published a rebuttal by Deanna Fei, the mother of one of the distressed babies: "Yes, we had a preemie in intensive care. This was certainly not our intention," she wrote. "While [Armstrong is] at it, why not call out the women who got cancer? The parents of kids with asthma? These rank among the nation's most expensive medical conditions."

The CEO ultimately had to apologize for his comments.

Benefits plans must evolve to reflect everything from new categories of prescription drugs to demographic changes such as aging workers. Just make sure to follow these tips when discussing the related changes:

  1. Invite employees to be part of the solution - Employees may not understand how much they can influence the cost of benefits. It is why employers often invite me into workplaces to update employees on the state of a plan, and offer some specific ideas to reduce any related strain. Actions like choosing a cheaper pharmacy or generic drugs, for example, can make a tangible difference.
  2. Remember the human side of the equation - While any discussions about costs clearly involve the cells on a spreadsheet, benefits are designed to help employees with intensely personal issues. This is the support that cares for people when they are sick, and looks after families if someone is injured or dies. It is why discussions about threats or changes to a plan need to include more than numbers alone, and show how a sustainable plan will better protect families, friends and coworkers.
  3. Look beyond the short-term savings - Outright cuts to a benefits plan may deliver some short-term savings, but they can also lead to steeper costs in the long term. Employees who lose a valued benefit, for example, may choose to work elsewhere. The 2012 Sanofi Canada Healthcare Survey found that 61% of employees see health benefits as a "strong incentive" to stay with their current employers.

    Some cuts may also prevent employees from seeking the care they need, leading to extended absences or reduced productivity.
  4. Guard employee privacy - An individual employee's medical experience is private information, and it should be protected.
  5. Consider the context - The timing of a discussion can be as important as the content. Armstrong, for example, made the mistake of announcing AOL's planned cuts on the same day he reported strong quarterly earnings. Employees can have a tough time swallowing a reduced benefit in a context like that.
  6.  Don't forget the long-term investments - Added investments in employee wellness programs can help to improve the overall health of a workforce, and this can pay dividends for years to come. After all, every day of good health leads to another day of productive work. And the Conference Board of Canada concludes that unplanned absences cost Canadian employers an average of $572 per employee per year.

Top Tips:

  • Invite employees to be part of the solution. Be open about the rising costs of benefits, and ask your benefits consultant to share the steps that will help to protect the plan.
  • Look beyond the short-term savings. A slashed benefit could lead employees to look for another job.
  • Don’t forget the long-term solutions. Money invested in employee wellness can pay dividends in the form of added productivity.   

Copyright Notice

All rights reserved. All of the content herein is the sole property of the Callery Group, and may not be reproduced, transmitted, or stored in a retrieval system - in whole or in part - without the written permission of the Callery Group. Links to the originating article at www.callerygroup.com are permitted.

The Buzz Bits
Miscellaneous links to interesting benefits information

Entrepreneur Nearly Loses Everything to Illness: LSM Insurance

Presidentís Dinner Photo Album: Ajax-Pickering Board of Trade

My Baby and AOLís Bottom Line: Slate

AOL 401K Blowup Ė Worst Way to Deliver Bad News to Employees: Forbes

Community Ethics, Big City Expertise

Subscribe to the Buzz Blog

Blog archive

Survey Says: Wellness Programs Improve Overall Satisfaction

It seems that employees' satisfaction with wellness programs spills over into satisfaction with their benefits programs and their jobs in general [more]

Changes Coming to Personal Emergency Leave Laws

Amendments to the Employment Standards Act will significantly increase legally mandated employee leaves [more]

The Good News and the Bad News on Diabetes

We keep hearing about a "diabetes epidemic," but there are things we can do now to improve our odds of beating the statistics [more]

Who's Your "Broker" Working For?

In a world of brokers, agents, advisors and consultants, it's important to stay focused on who's really working for you [more]

The Secret to Really Good Workplace Wellness

Workplace wellness is a way to solve a lot of problems before they even come up [more]

Medical Marijuana - More Questions than Answers

A lack of medical consensus makes drug plan coverage of medical marijuana very difficult [more]

Pharmacogenomics Means Better Prescriptions

A simple DNA test can now help pinpoint which drugs are going to work best for you [more]

Why Airplanes Crash

What one successful CEO learned from air crash investigations – and how it all applies to managing any organization [more]

Not A Delicate Subject Anymore...

How to start the conversation about mental health in the workplace [more]

A Look Inside

There's more to this business that we usually talk about... [more]

Bio What-Now?

Get ready for "generic" biologics. [more]

What You Don't Want to Say to Your Doctor

There are some things that you want to explain to your doctor, and some things you really should stay away from. [more]

Your Dentist's Pet Peeve

Why you should know all the ins and outs of your dental insurance plan before you ever lean back in the chair and open wide [more]

About that Credit Card Travel Insurance

It may be of some value, especially if you have no pre-existing conditions, but you really need to read that fine print [more]

Right Drug, Right Time, Right Cost

Why you should work with your doctor, your pharmacist, and your drug plan to make sure you get optimal treatmenty [more]

Big Smiles

A focus on dental plans will ensure that everyone remains happy [more]

Your Doctor Doesn't Know Everything

When it comes to prescriptions, patients need to be part of the conversation [more]

Prescription for Disaster

Advances in pharmaceuticals are threatening your drug plan [more]

Sleep Easy

Conditions like sleep apnea can be treated, ensuring proper rest and productive days [more]

Easy as EAP

Formal support makes a big difference when employees face personal challenges [more]

Well Done

10 ways to develop an effective workplace wellness program [more]

Mind Matters

Businesses can't afford to ignore the mental health of their employees [more]

Brian's Story

Brian Callery is celebrating 40 years in our business. It's a commitment that makes a difference in his clients' businesses [more]

The Benefits to You

The same plans designed to protect employees will also offer advantages to employers [more]

Lawyer Up

There are legal ramifications around changing benefit plans - especially if an employee is being terminated [more]

Travel Trauma

Dream vacations can turn into nightmares when travel insurance claims are denied [more]

Evolution Solution

Evolving benefit plans will meet employee needs and support recruiting and retention efforts [more]

Plan & Predict

How rising paramedical claims, drug reforms, and other trends will affect your workplace benefits [more]

Who Benefits

Education makes the case for workplace benefit plans [more]

Season of Renewal

Important questions to ask your benefits advisor before inking a deal [more]

Preventive Measures

Paramedical services help keep employees healthy, on the job, and productive [more]

A Bounce in Their Step

Canada Rubber Group employees are embracing their new wellness program [more]

Business Benefits

Shandex Group and Indaco Manufacturing discuss the value of evolving employee benefits plans [more]

A New Mindset

Workplaces can't afford to ignore the mental health of employees [more]

Cost Cutters

10 cost-cutting strategies to protect your benefits plan [more]

Safe Travels

12 ways to protect yourself on your next vacation [more]

Breaking News

Learn from the mistakes of an AOL executive when discussing any changes to your benefits plans [more]

Watch the Gaps

Protect against turnover and lost opportunities by recognizing the generation gaps [more]

Generation Next

Generation Y represents the future of your business - and will see workplace benefits plans in a different way [more]

Absent Minded

Employers are paying the price for absenteeism, but it can be controlled [more]

Think Positive

Programs that build positive workplaces make business sense [more]

Back to School

8 important lessons your employees need to learn about benefits plans [more]

Find a Better Broker

6 questions you should ask anyone who wants to sell you a benefits plan [more]

Plan Your ROI

5 ways employee benefits plans can deliver a real Return on Investment [more]

The Benefit of Benefits

3 ways a benefits plan can improve your company's bottom line. [more]

A Healthy Dose of Information

5 questions for your pharmacist that might save your drug plan and your wallet. [more]

Claim Denied

Consider these 8 ways to avoid rejected benefit claims. [more]

Travel Planning

6 questions to ask before assuming you are protected by a group plan's travel insurance. [more]

Biologic Logic

Growing list of biologic drugs could bankrupt poorly protected drug plans. [more]

Smart Shopping

8 shopping habits that will protect your benefits plan. [more]

Tough Medicine

Employees will share more responsibilities and higher costs to sustain their benefits. [more]

Crime Costs

5 scams that could be placing your benefits plan at risk. [more]

A Prescription for Your Drug Plan

Skyrocketing drug prices may be threatening your benefits plan, but generic drugs offer a cure. [more]

Planes, Trains and Travel Insurance

The fine print in your travel insurance may leave you more exposed than you think. [more]

Healthy and Wealthy

5 steps to an employee wellness program that will generate real financial returns. [more]

Avoiding Burnout During Holiday Season

Education and Prevention can help control spiraling benefit costs. [more]

Sweat the Small Stuff

Protect your staff by avoiding these common "paperwork" mistakes by administrators. [more]



Services Personal Services Corporate Services