Choice Offsets Cost for FedEx Workers

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edEx, which has a worldwide workforce of 210,000, provides health-care plans to all of its full-time and part-time employees across the country. As a company that relies on employees who are quick on their feet, the delivery enterprise requires a health-care benefits program that keeps employees as motivated and healthy as possible.

This year FedEx launched the first year of a five-year strategic health-care benefits plan, explains Kelly Jenkins, managing director, employee benefits and health communications. The enterprise continues to pay 86% to 96% of health-care costs for its workers, but like most companies has had to pass on to the staff some costs of rising insurance premiums. “We made some changes in 2004 to help employees share in the cost,” says Jenkins. “But at the same time we expanded choice.”

FedEx previously offered only managed-care plans. This year the firm introduced an open-access program that allows employees to choose from in-network or out-of-network plans. The employee who wants flexibility and an open choice of physicians and specialists has the option to take on a higher payroll deduction and co-payments. “Open access and that type of network approach is a little more expensive,” explains Jenkins. “It has different benefit levels but it’s the employees’ choice.” And instead of a two-tiered system, employees now have four benefit-package levels from which to choose. Adding such flexibility, says Jenkins, enables the company to meet the highly diverse needs of its workforce.

FedEx’s five-year benefits strategy is based on an intensive analysis of financial and workforce impacts. The company examined such factors as incremental health-insurance costs on company expenditures and on employees’ expenses. “Overall, you have to manage [benefits costs] on all fronts, continually pushing every lever,” Jenkins adds.

FedEx routinely conducts surveys of its workforce, a practice that plays into HR and benefits planning. As surveys confirm, FedEx employees are a demanding bunch; after all, they are the people we expect to deliver our packages any distance at lightning speed. To help satisfy this service-savvy staff, the company has worked to make benefits administration as accessible and empowering as possible. This includes an online decision-support tool that helps employees determine which plan fits their needs. In addition to providing a full range of health-care benefits to its workforce, FedEx offers access to voluntary benefits, such as homeowner’s, auto and legal-services insurance that employees can select online from a vendor at large-group rates.

On-site wellness centers and educational seminars are a large part of the company’s strategy to keep employees healthy. The company also offers a number of disease-management programs for chronic conditions like asthma, diabetes, cardiac, ulcers and arthritis, and continues to expand them. Because of the nature of deliverers’ work, FedEx also piloted a lower-back-pain program. FedEx is not alone; the Kaiser report found that many companies see disease management as one of the best ways to control health-care costs.

FedEx also is involved in improving the quality and cost-effectiveness of the nation’s health-care delivery. It is a member of the Leapfrog Group, a coalition of more than 150 public and private organizations that mobilizes employer purchasing power to provide education and programs for health-care safety. Other members include enterprises like Eastman Kodak Co. and Xerox Corp.

All FedEx employees also have access to 24-hour nurse lines. “That has really been helpful to people who have been diagnosed from a lifestyle health-care point,” says Jenkins.

So far, employee response has been positive to the first phase of the strategy, and she is not hearing complaints about increased payroll deductions. “Employees realize they do have to share in the cost — they recognize that it’s their responsibility, too.”

With much of its staff spread out across the country and highly mobile, communicating all of FedEx’s benefits information to employees is an enormous undertaking. The company has a call center that tracks all employees who call to enroll, make changes in their plans or ask questions. “We monitor trends and analyze them,” explains Jenkins. “And we use them for case management.” The company also puts out personalized newsletters to its national workforce of 125,000 employees. But the most useful information vehicle is FedEx’s internal TV network, which plays on screens at FedEx sites and delivers a plethora of health-care information. “Those have been enormously popular — more than printed materials,” says Jenkins. The company also provides presentation material to managers so they can hold meetings with their staffs to explain in detail any changes in the health-care program.

FedEx is now preparing for the next phases in its five-year plan and, with the assumption that health-care costs will continue to climb, is always seeking ways to lessen the impact on the company and its employees.

Read more about the Optimas Awards winning program FedEx developed at workforce.com/optimas/fedex