Park Hyatt Philadelphia at the Bellevue employs about x full-time and part-time employees. In analyzing the Health and Welfare benefit plan of the hotel, contact has been made with Kaitlin Ulrick. Ms. Ulrich has held the position of Human Resource Manager of the hotel for three years. Among other responsibilities Ms. Ulrick is responsible for the design of the benefits plan, making sure the hotel's health and welfare benefits comply with all federal regulations and communicating directly with employees.
Park Hyatt Philadelphia's Employee Healthcare and Welfare Benefits have been designed so that an employee can fulfill the job requirements without concern over benefit coverage. As a result, Park Hyatt Philadelphia employees can concentrate on satisfying guests with the highest quality of service. The following will provide information about the considerations Park Hyatt Philadelphia took into account when designing its benefits package.
At Part Hyatt Philadelphia, employees tend to transfer from one site to another quite often. The company had to design its program to limit disruption caused by this issue. Employees in the Philadelphia area as a result are offered similar or almost identical benefit plans to what employees in Chicago may have access too.
One key decision that Hyatt had to make relating to the design of its employee benefits plan was whether to self-fund most of the benefits offered or purchase insurance contracts. Due to Hyatt having such a large number of employees, decades of operating longevity and its claims being very stable, self-funding would be a logical decision. Hyatt became self-insured in 1995. Since self-funding, the company has used a loss retention account to fund unexpected claims that may arise.
Despite being self-funded, Park Hyatt Philadelphia collaborates with Hewitt Associates. Hewitt is responsible for most of the administrative duties. Hewitt partnered with Hyatt's Human Resources Department during the last open-enrollment period and was responsible for sending the Summary of Material Modifications to all enrolled employees. Hewitt is also responsible for the communication of the plan to Hyatt employees.
In addition to the previous considerations Park Hyatt Philadelphia had when designing its benefits plan, it also considered where it wanted to position itself in comparison to the competition. In downtown Philadelphia, Park Hyatt Philadelphia is located in close proximity to the Courtyard by Marriott and Ritz Carlton Philadelphia. Neither the Hyatt nor its competitors disclose their employee benefits. Hyatt Philadelphia is a member of the Greater Philadelphia Hotel Association. Hyatt Philadelphia during the development of its Welfare Benefit package worked with the association to compare the benefits the competition was offering to those they sought to offer. Hyatt was able to use the information gathered through this association to design a competitive benefits package.
As with any company, Hyatt wants to attract and retain the most capable employees. Park Hyatt Philadelphia tries to ensure that every employee is not just enjoying the job, but also the Hyatt "experience." Making employees happy is a way for an employer to ensure the prosperity of his or her business. As the head of the Human Resources Department for the Hyatt, Ms. Ulrick has met all employees during her three years at the position. By meeting and listening to their concerns, Ms. Ulrick stated she feels proud to be working for a company that values its employees.
Hyatt Philadelphia has a view that by working with companies that are well known in its industry Hyatt will have the ability to assure the offering of the most comprehensive benefits they can. Due to this high standard, Hyatt only does business with providers that are rated as "secure" by A.M. Best. Hyatt uses this rating standard in deciding on the companies to work within its Health and Welfare benefits.
The Park Hyatt Philadelphia offers a section 125 medical plan: a Flexible Spending Account (FSA) and a Point of Service (POS) II Medical. Hyatt did not choose to offer a Health Maintenance Organization (HMO) because of the lack of choice, in regards to physician and hospitals, which this kind of plan offers. As a result, it decided to offer a POS plan instead to give its employees a greater choice of hospitals and physicians. All full-time employees are eligible to participate in the plan after a 90 day waiting period. The POS plan is administrated through Aetna, which Park Hyatt has been in partnership with for many years. Aetna is a highly respected provider in the health insurance industry with an "A" rating from A.M. Best. The FSA is fairly new, and it was first offered January 1st of 2009. The last enrollment period occurred during the last two weeks of November 2009. Due to rising medical costs, Park Hyatt decided to offer an FSA to employees because it allows them the option to pay for their medical expenses on a tax-free basis.
The Hyatt Corporation Welfare Benefit Trust is the funding source of Park Hyatt's medical plan as well as dental, vision and prescription drugs plans. Hyatt's trustee for the plan is the Northern Trust Company. ***Northern Trust Corporation (Nasdaq:NTRS) is a leading provider of investment management, asset and fund administration, fiduciary and banking solutions for corporations, institutions and affluent individuals worldwide.***
Park Hyatt offers its self-funded dental plan on a contributory basis through MetLife. MetLife is responsible for claims administrative duties. MetLife's "A" rating from A.M. Best made it a favorable choice. Self-funding allows for claims to be by and large processed at ease. All employees have an option to enroll in a dental plan if they already have a medical plan. As with the medical plan, there is a 90-day waiting period before an employee can become eligible for dental benefits. The plan allows employees the choice to use out-of-network services without being penalized, which is a positive for employees.
Hyatt vision plan is offered on a non-contributory basis and administered through Vision Service Plan (VSP) which has an A.M. Best rating of "A". The plan is also self-funded and VSP is responsible for claims handling. Participation in a medical plan gives employees the opportunity to be automatically enrolled in the vision plan. The plan covers routine vision exams by optometrists or orthoptists and contact lenses, as well as frames and lenses once every 12 months. By having a once every 12 month frequency, the plan controls moral hazard issues by limiting employee over-utilization of benefits. Since Park Hyatt pays for the vision plan, claims are generally easy to process. One disadvantage is the plan does not offer out-of-network coverage, which may be problematic to the employees; however, having only in-network coverage reduces the overall costs to the employees.
Park Hyatt decided to have a closed panel prescription drug plan because it was the plan with the lowest cost for employees. Although the plan only covers participating pharmacies, coverage is available with most well known pharmacies such as Rite Aid, CVS and Wal-Mart. This plan is administered by Aetna, it is offered as long as an employee has a medical plan.
Adverse Selection is not a significant concern to Park Hyatt, in regard to its health plan. Park Hyatt employs hundreds of people, and its parent company Hyatt Corporation employs several thousand people. With such a large risk pool, there are not many problems in regard to adverse selection related to the health benefits.
Adverse selection would have been the largest negative issue for Park Hyatt Philadelphia had it not carefully considered the non-retirement benefits. Due to the high turnover rate at Hyatt, this was an important issue to address when the company designed its benefits. This is the main reason why a new employee does not have the same benefits as someone who has been at the company for the past five years. A threshold of 90 days for employees to get most of the non-retirement benefits has been set.
To limit the issue of high employee turnover, Park Hyatt Philadelphia offers many work/life benefits. For instance, the most appreciated benefit among employees is the 12 complementary room nights per year, which employees who are already within the company for more than a year can spend in any Hyatt hotel anywhere in the world.
Park Hyatt Philadelphia also provides benefits to new employees, but the longer an employee has been with the company, the more benefits he/she is eligible for. In fact, there are true incentives for people to stay in the company, and one of them is more vacation time.
The Park Hyatt benefit plan design was created under the compliance of the Employee Retirement Income Security Act (ERISA), Consolidated Omnibus Budget Reconsolidation Act (COBRA) and Health Insurance Portability and Accountability Act (HIPAA). Hyatt offers employees two ways to become informed with/about their benefits. Employees can choose to pick up handouts and booklets from the Human Resource office or request a face-to-face meeting. Hyatt by having a face-to-face meeting available to employees allows for employees to become well informed about their rights under the acts.
The Park Hyatt Philadelphia's compliance with ERISA is evident in the fact Hyatt provides Summary Plan Descriptions (SPD) to employees who contribute in its benefit offerings. SPD is given to enrolled employees to inform them of the basics of their benefits. Park Hyatt offers COBRA continuation, which is required under ERISA. Park Hyatt enforces its fiduciary responsibilities and does not discriminate against anyone from obtaining a welfare benefit or from exercising their ERISA rights. If an employee's claims for welfare benefits are denied or ignored, Park Hyatt educates its employees on the proper legal steps to get the claims filed. Park Hyatt also informs its employees about the Uniformed Services Employment and Reemployment Rights Act (USERRA). Employees with questions are able to meet with the plan administrator at anytime.
Park Hyatt strongly complies with the regulations of COBRA. Hyatt is efficient in notifying its employees about the COBRA continuation coverage. Employees are informed about domestic partner's and dependent child's right to coverage continuation. Under ERISA employees are required to notify the Hyatt in case of a divorce, separation or loss of dependent status. In the past, problems have occurred when employees forgot to notify the hotel about these issues. Since then, Park Hyatt Philadelphia has informed its employees about this regulation more frequently. The administrative duties are outsourced to Hewitt Associates.
Park Hyatt strongly enforces the HIPAA privacy policies. Hyatt is committed to protecting the medical information of its employees. Hyatt informs employees about what kind of medical information the hotel may disclose about them.
Park Hyatt Philadelphia has an efficient employee benefits plan. Park Hyatt is constantly trying to design its plans to be more competitive and beneficial to its employees, such as adding a FSA. Hyatt truly fulfills its fiduciary duties to its employees. Hyatt by having its benefits plan largely self-funded has no incentive to profit from the plan. There are, however, certain improvements that Park Hyatt could make such as having more surveys to ask for employee feedback about its benefits plan. A recent survey of Hyatt employees had positive results; it seems that in the future more Hyatt hotels will use surveys to help in understanding the possible needs of its employees. Another recommendation would be to reduce the hotel's outsourcing of administrative duties through Hewitt Associates and internally manage more. If Park Hyatt had more control of administrative duties, the hotel would be more likely to internally identify problems, thus decreasing moral hazard issues. On the other hand, Hewitt administering the plan takes a lot of the burden off Hyatt. Hyatt may not have the expertise to manage such a large employee benefits plan, so it may be in its best interest to continue to allow Hewitt deal with administrative duties of the plan.
