Lincoln Financial Group

Part III: Plan Design Analysis

RMI 3501 Dr. Drennan Fall 2011 911976784 914439371

Contents Introduction ..................................................................................................................................... 2 Design Considerations and Objectives in Offering Employee Benefits ......................................... 2 Goals, Competitors, Rising Costs, Non-Discrimination Testing, Communication Issues, Design and Funding Decision ..................................................................................................... 2 Problems, Issues, Concerns, Considerations in the Design of Health Benefits .............................. 4 Vendor Choice............................................................................................................................. 5 Eligibility Issue and Waiting Period ........................................................................................... 5 Self-Funding ................................................................................................................................ 6 Stop-Loss Insurance .................................................................................................................... 6 Four Plan Choices ....................................................................................................................... 7 Dental and Vision Plans .............................................................................................................. 8 Prescription Drug Plan ................................................................................................................ 8 Flexible Spending Account (FSA)...9 Tobacco Surcharge ...................................................................................................................... 9 Problems, Issues, Concerns, Considerations in the Design of Other Types of Non-Retirement Benefits. ........................................................................................................................................ 10 Group Life Insurance, Accidental Death and Dismemberment (AD & D) and Spouse and Child Life Insurance Plan.................................................................................................................... 11 Short Term Disability Plan (STD) and Long-Term Disability (LTD) ...................................... 12 Educational Assistance Program (ETAP) and Employee Assistance Program (EAP) ............. 13 The Impact of Regulatory Compliance in the Benefit Plan Design and Operation ...................... 14 Patient Protection and Affordable Care Act (PPACA) ............................................................. 14 Employee Retirement Income Security Act (ERISA)............................................................... 14 Health Insurance Portability and Accountability Act (HIPAA)................................................ 14 Conclusion .................................................................................................................................... 14

Introduction
Founded in 1905, Lincoln Financial Group is a nationally recognized full-service financial corporation headquartered in the greater Philadelphia area that offers a range of financial services for individuals and businesses. To communicate the spirit of integrity, the company adopted the name of the 16th President, Abraham Lincoln, to represent the ideals the new business was founded upon. Robert Todd Lincoln, the President's only surviving son, gave the founders permission to use his father's name in July 1905, setting the name for the new company. Lincoln Financial Groups mission is to help people build and protect their investments, so they can enjoy their wealth in retirement. Lincoln National Corporation and insurance company affiliates work together as a single enterprise to provide an array of financial tools and strategies, including insurance and annuities, individual and group retirement plans, and group benefits. It is not surprising that for many years, Lincoln Financial Group has been one of the top Fortune 500 corporations that offer outstanding benefit packages to its 7,500 employees and 1,000 agents.

Design Considerations and Objectives in Offering Employee Benefits

Goals, Competitors, Non-Discrimination Testing, Communication Issues, Rising Cost, Design and Funding Decision The Lincoln National Corporation Employees Life, Health and Accident Plan includes a medical plan, dental and vision plans, Long-Term Care and Short-Term Care, and Life Insurance and AD& D. According to Glenn Alvarez, senior employee benefits analyst, the major goal behind the comprehensive benefits package offered to workers is to attract top talents, reward, and retain them, while remaining cost-effective. Alvarez has been with the company for almost eight years and he strongly believes that the benefits employees receive, play a very important role in the overall companys performance. As he states, if workers are healthy and the company helps them deal with everyday life problems, they are happier and are motivated to be more productive since they have more time to concentrate on their job duties. Additionally, Alvarez states that offering employees their own companys product such as LTD fully insured by The Lincoln National Life Insurance Co. is an important marketing strategy. Alvarez says, Who is going to buy our products if we ourselves do not utilize them?

Another strategy behind providing a benefits plan for employees is competition with other companies. Lincoln Financial Groups main competitors are MetLife and Prudential. The company regularly performs benchmarking in order to stay in line with its competitors. Alvarez says, Our strategy is to stay competitive, not to be on the cutting edge, but not to lag behind either. Additionally, Lincoln Financial Group conducts satisfaction surveys to better understand employees needs and, consequently, to be able to meet them. The company uses Towers Watson consulting services. For over five years Towers Watson has assisted Lincoln Financial Group making recommendations of what is the best practice in terms of employee benefits in the business world. Moreover, the company performs a speedometer test that compares the benefit plan of similar companies (Sun Life Financial and ING Direct, per Alvarez) as well as companies of a different size and profile (MetLife and Prudential). The test shows how Lincolns plan differs from other companies plans. As any business, Lincoln Financial Group has to deal with many difficulties and issues arising from designing and implementing a benefits plan. Rising health care costs are one of the biggest issues right now. Lincoln Financial Groups goal is to reward their employees with comprehensive and affordable benefits while staying within the companys budget. Self-funding of the medical plan, eligibility dependent audits, utilization reviews, and satisfaction surveys are the techniques that Lincoln uses to keep up with the rising health care costs and inflation. These strategies will be explored in relation to each benefit later. Because Lincolns benefit plan is a grandfathered plan, which will be discussed in detail further throughout the analysis, PPACA provisions do not require Lincoln to perform nondiscrimination testing. However, being in the process of changing its grandfathered status, the company is implementing non-discrimination testing arrangements. Alvarez says that the firm will probably contract with a third party that will perform non-discrimination testing for them. Additionally, the same variety and level of benefits is offered to all employees without regard to their income and job title. Lincoln Financial Group has its own benefits department that utilizes an Oracle-based system, called CHRIS Knowledge Base. The system contains detailed information about the medical benefits plan, as well as the other health and welfare benefits the company provides. Employees can access the CHRIS data base at any time and get all the necessary information about their benefits and costs. Lincoln Financial employees are mainly white-collar workers;
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therefore, the majority of benefits communication is done online. Additionally, every enrollment period, Lincoln provides updated SPDs and brochures to keep employees up to date with any changes. This is the strategy Lincoln uses to communicate the available benefits and their costs. Proper communication can boost the value of a benefits program in the minds of employees and, additionally, send a clear message that an employer is sincerely looking out for the employees interests .1 Lincolns benefits department works directly with vendors, administrators and consultants. This allows the company to control and manage the structure and cost of benefits, compliance with various federal regulations and helping efficiently allocate the companys funds. Some of the benefits are self-insured while others are fully-insured. Thus, employees contribute to certain benefits although quite a few benefits are completely paid for by the company. In implementing a benefit plan, Alvarez must analyze previous experience, data from satisfaction surveys and evaluate the companys budget; based on the gathered data Alvarez decides which plans should be self-insured or fully-insured, contributory or non-contributory. The benefit plan is carefully designed to maintain employees happiness and satisfaction with the work place. Overall, Lincoln Financial Group has been successful in meeting their employees needs and keeping the personnel motivated and engaged. The turnover rate of 2% is proof of employee satisfaction.

Problems, Issues, Concerns, Considerations in the Design of Health Benefits

The Lincoln Financial Groups medical plan is a grandfathered health plan which, as permitted under Patient Protection and Affordable Care Act ( PPACA), can preserve certain basic health coverage that was already in effect before PPACA regulation was enacted. Yet, grandfathered health plans still must comply with some consumer protections under PPACA. Lincoln Financial Group has already implemented certain changes. For example, Lincoln eliminated life time limits on benefits and increased the age for children to 26 to be covered under parents medical plan. According to Alvarez, Lincoln Financial Group is in line with the healthcare reform, however, a few changes will still need to take effect in the nearest future to change the grandfathered status.

Vendor Choice Prior to 2010, Lincolns regional carrier (for Philadelphia area and Florida) for the medical plan administration was Independent Blue Cross. In 2009 the company put the business out for a bid, looking for better discounts and financial structure. Their national carrier at the time was Aetna that was not performing up to Lincolns expectations due to problems with the service level. IBCs pricing turned out to be significantly better. Additionally, IBCs Blue Card Network, which was the main concern for Lincoln, was sufficient to provide national coverage for the company. Eligibility Issue and Waiting Period Lincoln employs over 9,000 employees and agents and the medical plan covers approximately 25,000 lives, including agents and dependents. As any company, Lincoln must properly define eligibility requirements. Generally, companies provide healthcare benefits to full-time employees and their dependents. However, despite the high cost, Lincoln offers benefits to part-timers too. Lincoln strongly believes that offering benefits to part-time employees helps to attract and retain talented part-time workers. Before implementing these eligibility requirements, the company carefully evaluated the plan costs vs. the cost of turnover and concluded it was beneficial to the business in the long run. Another remarkable and distinguishing aspect of Lincolns medical plan is that since 2004 it offers benefits for same sex domestic partners. According to Alvarez, it helps promote equality, diversity, and innovation in the company. Lincoln is proud to offer domestic partnership benefits because it attracts innovative talents; it is especially important for the business units where there is a higher concentration of a younger generation. To be eligible for the domestic partnership coverage, employees must provide written documentation, proving their relationship. Alvarez says that the company has not had any problems ever since they started providing this benefit. However, a dependent eligibility audit will be performed in 2012 to make sure all the domestic partners currently receiving benefits are eligible to do so. A research conducted by Ceridian shows that American companies lose an estimated $22 billion annually paying for the health care of their employees ineligible dependents.2 Dependent eligibility audit, is an important cost containment technique that Lincoln utilizes.

Lincoln Financial provides the medical plan with no waiting period for new hires and their dependents, as long as they enroll in the plan during the first 45 days of hire. By eliminating the waiting period, Lincoln takes care of the coverage gaps that might arise when people switch jobs. Usually, eliminating waiting periods increases administrative costs because the company must enroll every newly hire employee without a guarantee that he or she is going to stay with Lincoln for a long period of time. This is not an issue for Lincoln Financial with their historically low 2% turnover rate, as mentioned earlier. Self-Funding Lincolns medical and dental plans are self-funded (with the exception of Kaiser HMO). Since it is a large company, Lincoln has significant past loss experience and, consequently, high credibility. Therefore, it is easier to predict future expected losses. A fully-insured plan would be much more expensive and irrational due to additional administrative costs and a risk charge. Furthermore, Alvarez explains that self-funding gives the company full control over the benefit plan design and may provide extra savings. Under ERISAs Deemer Clause, self-funded employer provided benefit plans are exempt from the state regulation which makes it easier to administer the plan. Lincoln Financial Group utilizes a Voluntary Employees Beneficiary Association (VEBA) Trust as its self-funding vehicle to protect itself from catastrophic losses and to ensure that employees are covered in the event of bankruptcy. The VEBA Trust allows the companies deduct taxes on contributions when they are made. Additionally, if the company suffers bankruptcy, VEBA will ensure payment continuation to eligible employees. Having a VEBA Trust poses complexity in its administration. As Alvarez says, the company has to go through a third party audit every year. Additionally, because VEBA is a non-profit organization, Lincoln has to file a Form 990 with IRS. Stop-Loss Insurance After thorough evaluation of its claims history, Lincoln Financial Group decided that Stop-Loss Insurance was not necessary. Since Alvarez started to work for Lincoln Financial, the company has never had a catastrophic loss that would exceed their self-insurance budget. StopLoss Insurance is very expensive and it is not cost-efficient for the company of this size to get it.
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Additionally, Stop-Loss Insurance is very specific with what it covers, this can pose additional problems. For example, pre-existing conditions are excluded. Lincolns plan, on the other hand, is written on a guarantee issue to accommodate all its employees without regard to their health status. Four Plan Choices Rising health care costs are a major issue for employers and Lincoln Financial Group is not an exception. Cost efficiency and quality of care are two major issues an employer must consider when implementing a medical plan. Lincoln has developed an excellent strategy in balancing cost, quality, and employee satisfaction with the medical coverage they receive. An 85 % participation rate in the medical plan attests to a successful plan. Lincoln Financial Group offers four medical plans. The Core PPO plan provides higher copayments and higher maximum out-of-pocket expenses with lower monthly contribution requirement. The Enhanced PPO is more expensive monthly but the out-of-pocket costs are lower. This way the company transfers some of the financial risk to employees to make sure that their expenses balance with their actual medical needs. The third plan is CDHP with HSA. This plan gives employees more control over their health care spending and encourages them to behave as rational consumers. The CD HP requires lower monthly contributions from employees, incentivizing them to enroll. According to Alvarez, the CDHP participation rate is lower than expected because employees are not properly educated as to what the plan offers and usually workers become skeptical when they see a $1,500 deductible. Currently Lincoln is trying to implement a better communication strategy that will inform employees about the benefits of this plan and increase the participation rate. Kaiser Permanente HMO is the only fully-insured plan primarily because it insures only 300 California employees and the Law of Large Numbers will not apply. One of the issues with this plan is that the company has no control over the plans design and structure. Although the benefits are richer, the premiums are higher. According to Alvarez, the company is looking to change this plan in the nearest future.

Overall, Lincoln implemented a medical plan design that balances its costs with its value. The fact the company provides four different options gives employees freedom of choice to select the plan that fits their needs best. This strategy is essential to prevent cost inflation and to impose employees to be rational in their health care consumption. Dental and Vision Plans Lincoln Financial Group offers its employees a dental plan. Because it is the second most wanted coverage after the medical coverage, the participation rate is 83 percent. The plan is selffunded and employees pay the full cost. The reason for an employee-pay-all basis is cost containment. The yearly limit for diagnostic and preventive care is $2000 which is higher than the standard limit other companies offer to their employees ($1,500). Alvarez believes that it is important to offer a higher limit in order to encourage employees to utilize dental care services because dental health is very important and if neglected, dental problems can lead to other health problems. Also, the Passive Dental PPO allows employees to stay with the dentist of their choice, allowing them to use the doctor they trust. However, if they use in-network PPO provider, the out-of-pocket costs are lower, which is an example of steerage the plan utilizes. Lincolns Vision Plan is fully-insured and fully paid by the employees. This is a common way vision benefits are generally offered by different companies, according to Alvarez. Employees benefit from in-network providers discounts which is an example of a service benefit. If they go out of network, they must file a claim to be reimbursed, which is an example of an indemnity benefit. Prescription Drug Plan Originally, Lincolns prescription drug plan was self-insured and imbedded in the three medical plans where Aetna was the national provider. The strategy proved to be costly and inefficient. In 2009 Lincoln pooled all the small regional prescription drug plans into a single plan where Medco took the role of a Pharmacy Benefit Manager (PBM). As a result, Lincoln decreased the administration costs since the company no longer has to deal with three different plans and several PBMs in case if a change or update needs to be processed. In addition, Lincoln gained more control over the plan and increased employees satisfaction. The prescription drug plan is set up to incentivize employees to purchase generic prescription drugs instead of brand name drugs by providing lower copayments for the first ones. Lincoln has also implemented a
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mandatory mail order for maintenance drugs (drugs that a person will be on for a long period of time). After the third retail refill an employee is obligated to obtain the mail order refill. The mail order copayment is twice the retail copayment, although, it provides a 90 day supply instead of only 30. Thus, the prescription drug plan is designed to be less costly to both employer and employee. Flexible Spending Account (FSA) Lincoln Financial Group offers its employees health care and dependent care Flexible Spending Accounts. It provides an opportunity for employees to use their pre-tax dollars to fund FSAs so later they can be used to pay for qualified medical, dental, vision and, prescription drugs expenses. The issue the company has with FSAs is that they constantly must remind employees about the limitations of the spending accounts and warn them that unused funds are forfeited to the employer at the end of the coverage year. Another issue is the new PPACA regulation. In 2013, under PPACA the maximum contribution to FSA will be $2,500. Lincoln must apply all the necessary changes to comply with the regulation. Tobacco Surcharge Lincoln Financial Group penalizes tobacco users by charging $30 in addition to monthly contribution for the medical plan. The objective is to encourage employees to quit smoking and, consequently, to decrease their overall health care costs, since non-smokers are generally healthier than smokers. There is an issue with this program. Because it is very costly to test all the employees to find out if they use tobacco, Lincoln requires employees to selfreport. According to Alvarez, some people lie they do not smoke but at the same time they smoke outside the building during the day. This creates problems of unhappy employees who honestly report themselves as smokers and pay additional $30 every month knowing that there are employees who lie to avoid the penalty. Another issue is that an employer must be aware of the legal requirements for such penalties. Under HIPAA, an individual cannot be required to pay a greater premium on the basis of any health status-related factor. However, adopting a wellness program that offers incentives for certain behavior, rather than health status, would be in compliance with the law3. Thus, Lincoln employees can avoid this penalty by completing the tobacco cessation program. The workers do not necessarily have to quit smoking, but the

completion of the program lets them have the surcharge removed for the remainder of the coverage year.

Problems, Issues, Concerns, Considerations in the Design of Other Types of Non-Retirement Benefits
Besides the medical plan, Lincoln Financial Group provides its employees Group Life Insurance, Accidental Death, Dismemberment (AD&D) and Loss of Sight Insurance, and Spouse and Child Life Insurance Plan, STD, LTD, Educational Assistance Program, and Work/Life Benefits. However, the company does not provide Long Term Care (LTC) primarily because the workforce of Lincoln Financial Group is fairly young (between 35-40 years old). Thus, the benefit is not necessary and it is not cost-efficient for both the company and the employees. Nevertheless, Lincoln Financial Group has a product that incorporates Life Insurance and LTC into one policy but it is written on an individual basis. So, if an employee wants LTC, he or she can get it directly from the company at a discounted rate. This proves that Lincoln Financial Group cares about their employees and always tries to find ways to satisfy their needs. According to Alvarez, one of the issues the company faces is noise, which as he explained happens when employees think that they want a certain benefit and they keep talking about it, but when it comes to utilization, not many people use it. Lincoln Financial Group has had times when they added a benefit and it was not worth its cost to the company. For example, a few years ago the corporation implemented legal assistance services for the workers. Very few employees were utilizing it and after conducting a survey and analyzing the expense of the benefit, the company decided to rescind it. Additionally, Alvarez says that any time Lincoln Financial Group contracts with a vendor it needs to go through a security assessment, especially when the company is going to send out data with personal information. These security assessments are very stringent and can take months to complete. The whole process is expensive and takes a lot of resources, so before introducing a new benefit, the company must make sure it is going to be useful for their employees and cost-effective for the business. Thus, when Lincoln Financial Group faces a problem of this type the solution comes from conducting the surveys and following their consultant Towers Watsons recommendations, as stated earlier.

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Group Life Insurance, Accidental Death and Dismemberment (AD & D) and Spouse and Child Life Insurance Plan Lincoln Financial Group provides their employees with a Life Insurance and AD & D Insurance. The main strategy behind providing this type of benefit is to be competitive with other companies. Alvarez says that offering this benefit is fairly standard, so that is why Lincoln Financial Group offers it. Yet, the company differentiates itself by providing a higher limit for the life policy. The maximum possible limit available is 2.5 million, which is above the standard limit other companies usually offer their employees. The objective is to accommodate the executives, since Lincoln Financial Group does not provide a separate health and welfare benefit plan for top officers. However, the plan is available to all eligible regular employees. According to Alvarez, life insurance is provided on a guarantee issue basis as long as the face amount does not exceed 1.5 million. No evidence of insurability (EOI) is needed in this case. For any higher limit employees need to fill out a medical questionnaire as part of the guidelines of Lincoln National Life Insurance Company that the plan is fully-insured with. There are two reason for having a fully-insured Life Insurance and AD&D plan. First, there is a potential for a catastrophic loss, so the company wants to transfer the liability for deaths or dismemberment to a third party. Second reason is the administrative costs. According to

Alvarez, Lincoln Financial Group used to have a form of a self-insured life plan some time ago. However, it was very difficult to administer it; it required a lot of resources and time to track the claims, process them, and reimburse beneficiaries. With a fully-insured plan, all the company does is just remitting the premium and all the claim processing is done by the vendor. Thus, after analyzing and recalculating all the costs, Lincoln Financial Group switched to a fullyinsured plan that turned out to be more advantageous for the company. The life insurance benefit is provided on a non-contributory basis up to the limit of $50,000. When the benefit exceeds $50,000, a beneficiary or an employee would have to pay taxes on the excess amount, which is called the imputed income. As Alvarez explained the company pays for the life insurance up to the limit of $50,000 to avoid imputed income for their employees. Any worker who wants a higher limit has the option to get it. If an employee elects Supplemental Group Life and matching Supplemental AD&D Insurance, he or she pays the entire cost of the coverage on an after-tax basis. The reason behind this after-tax contribution is
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an attempt to avoid the deferred taxation for the employees. Overall, Lincoln Financial Group provides the Life Insurance and AD&D benefit to stay competitive, while cost-efficient. The company takes into consideration the taxation of the excess benefit and that is why provides its employees with the basic coverage, leaving the higher limit option up to employees decision. Short Term Disability Plan (STD) and Long-Term Disability (LTD) STD plan or salary continuation is provided by Lincoln Financial Group because of two reasons. First reason again, is competition strategy. It is common for companies to offer this benefit. The second objective is to retain employees. For example, recently many employees have had babies and the company does not want these employees to leave Lincoln. So, according to Alvarez, the benefit provides a regular paycheck for the temporarily disabled employees to retain them until they come back to work. The STD plan is self-insured and is provided on a non-contributory basis. As Alvarez states, with the years of experience it turned out to be more cost-efficient for the company to pay for the plan in full than to hire and train new people if the disabled employees leave the company. The STD benefit can be received after seven consecutive days of disability and up until 26-27 weeks, after that the LTD coverage begins. The disability must be approved by the Group Protection division. One of the biggest issues right now is abuse of STD plan due to moral hazard. Alvarez says that the company is already working on a new strategy, trying to find a better way to manage this abuse. Lincoln Financial Group is going to implement a more stringent way of administering the disability claims. Many employees over utilize this benefit by going on and off the disability several times throughout the year due to the same medical conditions. The company intends to look into the process of approving these claims and, additionally, will probably change the definition of disability in the plan description. Moreover, the design of the plan is set up to reduce moral hazard. The amount of reimbursement decreases, the longer employees stay on STD, as described in the Part II of this analysis. LTD plan is integrated with the STD plan and, therefore, starts after the elimination period, which is after the 27th week. The plan is fully-insured because of the possibility of higher losses as opposed to STD. The company provides basic coverage that will pay 50% of the
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employees eligible income (as defined in Part II) to, again, eliminate moral hazard by incentivizing workers to return to work sooner. Employees, however, can get additional

coverage although they have to pay for it with after-tax dollars. The reason for this, per Alvarez, is the fact that when the benefit is paid to the employee, it is not going to be taxed since he or she has paid for it with the after-tax dollars. Overall, STD and LTD plans are designed to compensate employees for non-occupational injuries and, therefore, retain them. The plans are designed to be cost-efficient and to control moral hazard. Educational Assistance Program (ETAP) and Employee Assistance Program (EAP) Lincoln Financial Groups main strategy behind providing Educational Assistance Program is to differentiate themselves from the companies that do not offer this benefit. The company provides assistance for those employees who want to pursue a college degree or jobrelated course. This is a kind of long-term investment because once an employee gets a college degree or a course certificate, he or she can contribute the obtained knowledge and skills to the company, bring in new visions and ideas. Before implementing this program, Lincoln Financial analyzed its benefit to the company and came to a conclusion that it is cost-efficient for them to pay for the employees classes (business expense for tax purposes) to further strengthen their qualification and productivity at work. Additionally, employees are more committed knowing that their job pays for their education. Employee Assistance Programs strategy is to help employees to deal with everyday life problems and stay focused on their jobs. For example, family counseling services, alcohol abuse treatments, and adoption assistance these services help workers to resolve the problems they might get and concentrate on the work rather than think about solutions. Moreover, there are on-site fitness clubs that keep employees active and healthy; the health advocate assistance allows for any health related questions to be answered by professionals. In the long run these programs lower the health care costs, which is beneficial to Lincoln Financial Group who pays 70% of them.

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The Impact of Regulatory Compliance in the Benefit Plan Design and Operation
Patient Protection and Affordable Care Act (PPACA) As of today, Lincoln Financial Group is in line with the health care reform. Lincoln has adopted all the necessary PPACA requirements up to this time. All preventive care services are covered by the medical plan 100%, there is no life time limit for all medical plans, and dependent coverage for children is extended to the age of 26. These changes increase the companys spending on health care by approximately 1.5%, according to Alvarez. Alvarez also mentioned that Lincoln Financial tries to educate their internal employee benefits department to ensure all the provided benefits comply with PPACA regulations. Additionally, Towers Watson helps the company with all the regulations hassle by providing their consulting services. Employee Retirement Income Security Act (ERISA) Lincoln Financial Group is subject to several responsibilities under ERISA, most important being fiduciary responsibility, plan communication, and non-discrimination testing. Lincoln complies with fiduciary responsibility by offering a variety of medical plans and different choices of other benefits. Whenever the company is in the process of deciding what benefit and on what level is needed for their employees, Lincoln uses surveys to determine employees needs and, therefore, act in their best interest. The company also regularly updates its SPDs and makes sure each employee is aware of the benefits available and their costs, thus, following ERISA communication requirement. Moreover, Lincoln Financial Group offers the same benefits to all employees to ensure all workers are treated equally. Every year, Lincoln hires a third party auditor to make sure there is no discrimination. ERISA regulations impose some additional administrative costs, however, the company of this size is able effectively fund the benefit plan administration. Health Insurance Portability and Accountability Act (HIPAA) According to Alvarez, the major issue with HIPAA is employee confidentiality. Lincoln Financial Group assures its employees that their personal health information is safe and is not subject to disclosure. The stringent security assessments mentioned earlier prove that.

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Conclusions
While analyzing Lincoln Financial Groups health and welfare benefit plan we thought of certain changes that would help strengthen the plan structure as well as help the company to continue to attract, reward, and retain top talents. Despite the fact Lincoln offers a comprehensive benefit plan, we recommend that the company considers offering voluntary benefits to its employees in addition to the Work/Life benefits it offers today. According to Alvarez, the company employs people who are 30-40 years old, which is the average age when people start to have families. Lincoln may consider on-site day care facilities, back-up home child care, and education planning. These programs will improve productivity of employees who juggle between work and home. Additionally, Lincoln should consider adding other wellness programs that will motivate employees to live healthier lives. Programs such as Healthy Lifestyle, Health Incentive and Online Health Services will help employees be more conscious about their nutrition and lifestyle. Work and Life benefits are an excellent investment and a great retention tool that strengthens employees ties with the employer. Additionally, we recommend that Lincoln considers a partial subsidy for the dental plan, which is a common practice among the companies of this profile. Overall, the benefit plan Lincoln Financial Group offers to its employees is comprehensive and cost-efficient. The 2 % turnover rate and employees satisfaction surveys prove that.

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Works Cited
1. Quinn, Richard D. "Views & Vents - Say What? Why Concept Communications Are Critical." Employee Benefit, 16 Sept. 2006. Web. 08 Dec. 2011. <https://blackboard.temple.edu/webapps/blackboard/content/contentWrapper.jsp?content _id=_2334923_1&displayName=Views+%26+Vents++Say+what%3F+Why+concept+communications+are+critical&course_id=_4310_1&nav Item=content&href=http%3A%2F%2Febn.benefitnews.com%2Fnews%2Fviews-vents-say-what39587-1.html>.

2. "Ceridian: Dependent Eligibilty Audits Bring Employers Immediate often Staggering Savings."Blackboard Learn. Ceridian, 22 Feb. 2010. Web. 09 Dec. 2011. <https://blackboard.temple.edu/webapps/blackboard/content/contentWrapper.jsp?content _id=_2334918_1>.

3. "Wellness Works But Beware Legal Landmines." American Academy of Actuaries. Web. 08 Dec. 2011. <https://blackboard.temple.edu/webapps/blackboard/content/contentWrapper.jsp?content _id=_2415942_1&displayName=Wellness+Programs+Work%2C+But+Beware+Legal+ Landmines+&course_id=_4310_1&navItem=content&href=http%3A%2F%2Fhr.blr.com %2Fdisplay.cfm%2Fid%2F19254>.

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December 8, 2011

Glenn Alvarez Senior Employee Benefits Analyst Lincoln Financial Group 150 N. Radnor Chester Road Radnor, PA 19087 Dear Glenn,

We would like to thank you for dedicating your time in helping us with our employee benefits project. Our work would not be successful without your assistance and cooperation. We were able to complete an effective analysis and our interview gave us a deeper understanding of the various issues and considerations that relate to a benefit plan design. We greatly appreciate the time you took to meet with us last Friday. It was a great pleasure to meet you and we look forward to speaking with you again. Sincerely,

Sviatlana Serhiyenia & Ludmila Scutaru

*This is a copy of an email Thank you letter sent to Glenn Alvarez

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