How to become a better employer?

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  • HR CLUB

    How to become a better employer?

    Attraction and retention of workforce with

    insurance benefit plan

    Presented by Ferenc Truglya, Travel Insurance Line Manager

    AIG Europe Limited Branch Office in Hungary

    30th September 2015

  • 2

    HR CLUB

    What we will cover today

    1. Why its good for the company, if its good for the employees?

    2. Focus on insurance benefits

    3. Pro & contra insurance benefits

    4. Basics of building an insurance benefit plan

    5. Whats about taxes?

    6. Conclusion

    7. Questions

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    HR CLUB

    Why its good for the company, if its good for the employee?Tools & methods

    ....satisfied employees have better performance...

    ...employees are the most important assets of a

    company...

    ...qualities of the employees influence the

    performance and success of a company....

    We often hear that...

    ...big question is how to make our company more

    attractive for talented people?

    ...companies have to offer benefits/perks

    such as...

    ...or more frequently......flexible working hours...

    ...free coffee in the

    office...

    ...meal voucher, gym

    pass...

    Employee

    Insurance Benefits

    ... sometimes good salary is not enough...

    ...company day, family

    day...

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    HR CLUB

    Focus on insurance benefits

    80% are less likely to leave actual job if

    they get a well-structured and well-

    communicated benefit package

    The standard of benefit package shows

    how much a company values its own

    employees

    For young workforce who cant get too

    high salaries compared to employees

    with more job experience, attractive

    benefit plans count much more

    59% would take a job with slightly less

    salary if a much better benefit package

    comes with it

    Interesting facts from 2015 Aflac Workforces Report

    Source: www.AflacWorkForcesReport.com

    Company sizeNumber

    of

    people

    Do

    benefits

    count?

    Small (3-99) 1.626 49%

    Medium (100-499) 1.334 40%

    Large (500+) 2.377 37%

    Appreciation of benefit plans among

    employees

    Increase job satisfaction 79%

    Increase performance 65%

    Increase loyalty 66%

    Workplace recommendation

    to others52%

    Thinking about leaving job if

    benefits are poor52%

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    HR CLUB

    Pro & contra insurance benefits

    Benefit packages that offer insurance as well, attract and retain quality workforce much better

    Employees often take a job with slightly less salary if it provides a more generous and

    comprehensive benefit package including insurance Savings on salary cost

    Insurance services are cheaper in a company benefit package compared to buying them as an

    individual

    Insurance packages containing regulal medical checks reduce the health-related employee

    absenteeism and boost the employees general state of health and morale

    Insurance benefit packages represent a gesture from the company that they take care of the

    employees. People have the peace of mind because accident/sickness can happen anytime

    Insurance benefits - in case of temporary disability to work - compensate for drop in income

    Companies without sufficent budget for pay rise can also offer the necessary plus by launching

    voluntary employee benefit program

    Tax free benefit or totally free for the employer (see more later)

    Whats for it?

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    HR CLUB

    Pro & contra insurance benefits

    The introduction of insurance benefits plan puts an extra administrative burden on a

    company and it is too difficult to enroll and exit employees

    The insurers ask only for periodic, often once-in-a-year headcount report, a list that

    already exists in the HR department of a company

    Ridig, not tailor-made insurance programs

    Serious solutions are made-to-measure

    Too expensive, insurance benefits are the privilege of multis, Who has money for it?

    It is not even obligatory.... and similar narrow-minded way of thinking

    Expensive? Compared to what? To the absent workforce due to illness? To the lack

    of workforce caused by the not attractive place of work or to the resulting stagnation

    of the company? A company can buy a basic insurance package for a price starting

    from 50-100k HUF/year (150-300 EUR) The custom-made insurance plans always take

    the companys financial limits into account.

    It is hard to make employees understand that the company gives valuable benefits

    A good insurance provider can give advice in this

    Frequent negative statements

    Personal E-mail Brochures, leaflets

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    HR CLUB

    Basics of building an insurance benefit planTo whom? What? For how much?

    Defining the groups of insureds

    For everyone It is a mistake to leave out certain employee groups from the insurance

    program This mistake worsens the acceptance of the program Them and us feeling

    It results in higher per head insurance fee

    Custom-made insurance packages for the different employee levels

    Frequent grouping: top & middle managers, white & blue collars, part-timers etc.

    Full-time, part-time, temporary etc. employees can be insured as well

    Also mother and maiden companies? Yes! Under Freedom of Services insurance

    can cross borders

    Expatriated employees (Expats) can be fully insured

    To whom?

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    HR CLUB

    Basics of building an insurance benefit planNot only for companies

    Companies of any sizeGovernmental

    organizations

    Associations, trade

    unions, NGOsEducational institutions

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    HR CLUB

    Basics of building an insurance benefit planTo whom? What? For how much?

    Defining types of covers and sums of benefits

    Frequent types of covers:

    Accident & Sickness Insurance (eg.: death, permanent and temporary disability, hospital

    daily cash, surgery, burns)

    Critical/Dreaded Sickness Insurance (eg.: different tumors, cardiovascular diseases,

    diseases of the nervous system)

    Life Insurance & Permanent Disability (accidental & natural death, full or partial

    permanent disability of any kind)

    Private Health Insurance (eg.: private medical consultations and checks)

    24 hours, worldwide cover, occupational only or occupational and commuting cover, other

    customized scope of cover

    Fixed sums of benefits or income-based benefits, HUF or EUR claim payments

    What?

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    HR CLUB

    Basics of building an insurance benefit planTo whom? What? For how much?

    Who pays for the insurance?

    Company financed

    Sum of the yearly insurance premium is

    influenced mostly by the companys budget or

    the chosen types of covers and sums of

    benefits

    Insurance can be extended to family members

    of the employees

    Per head insurance premium is mostly less

    than 30% of the legal minimum income (see

    more later)

    Employed at the company = Enrolled in the

    insurance plan

    Leaving the comany = Exiting the insurance

    plan

    Voluntary, employee-financed

    This solution is often used at companies

    employing large number of blue collar workforce

    with relatively low income and savings

    A couple of hundred HUF monthly insurance

    premium is paid by the employees

    Insurance can be extended to family members

    of the employees

    It does not cost a dime for the employer

    The employee can keep insurance after

    leaving the company

    For how

    much?

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    HR CLUB

    Whats about taxes?Tax-free limit - 30% of minimum income - SZJA - EHO

    Side of insurance premium payment

    Group life insurance

    Group accident and sickness insurances

    Group private health insurance

    105.000 HUF x 30%

    Free from income (16% SZJA)

    and healthcare contribution

    (27% EHO) taxes up to 30% of

    the minimum income

    31.500 HUF can be spent on

    insurance premium per

    employee per month

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    HR CLUB

    Whats about taxes?Tax-free limit - 30% of minimum income - SZJA - EHO

    Side of claims payment

    Claims payments arising from accident and sickness insurance are taxabel if the sum of these

    payments are higher than 15.000 HUF/day

    Income (16% SZJA) and healthcare contribution (27% EHO) taxes must be paid on sums above

    15.000 HUF

    Daily hospital cash, convalescence daily cash, lump sum & daily temporary disability income

    benefits are regarded as taxable above the 15.000 HUF daily limit

    Depending on the insurance provider claims payments may be reduced with the sum of tax.

    It is also up to the provider whether it fulfils the tax payment obligation instead of the client or not.

    In case of tax payment obligation from benefit payments the insured cant submit tax

    acknowledgement through employer in that year (tax statment is always sent by the insurance

    provider to the insured)

    Income tax rule: 1995. CXVII Act, 1st Appendix, point 6.6 and 6.7

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    ConclusionWhy does it worth dealing with insurance benefit plans?

    2. Bigger attraction in the job market

    Help to become an employer of

    choice in the market

    Economic advantages through

    attracting high quality workforce

    1. Cost effective benefit

    Cheaper than pay-rise, it can be