Should you cover dependent health care for deployed troops?
The Idea When the Iraq war started, Tom Holcom, president of Pioneer Financial Services, knew some of his employees would be called up. His Kansas City, Missouri, company sells financial products, like loans, to members of the military. Thirty percent of the staff are either current or former members of the military or they have spouses who are. Holcom thought Pioneer should offer generous benefits to deployed troops, even at a substantial cost.
Any Precedents? Employers are required by law to rehire reservists when they return from duty, at the same salary, seniority, and benefits. Some companies go beyond that: Wachovia pays soldiers on active duty their full salary, plus benefits, even while they are deployed. Toyota Motor Sales U.S.A. covers the difference between a worker's military and civilian salaries. Not every employer handles the situation well, however. The Department of Defense received 3,845 complaints from reservists last year, most of them related to disputes between employers and soldiers concerning returning to work, pay rate, or an allegation of discrimination.
The Pros Pioneer's military-heavy staff would surely appreciate it if the company provided superior treatment for deployed military personnel, plus there would be an obvious marketing benefit.
The Cons Providing additional benefits is always costly, and would be in this case, even if only a handful of Pioneer's employees were deployed.
The Decision Pioneer convened groups of military spouses and retired military members to ask them what benefits would help most during deployments. These suggestions were synthesized into a set of generous policies, which Holcom okayed. First, Pioneer provides workers with a paid vacation week before they are sent overseas. Then, during a deployment, the company pays workers the greater of the difference in salary or $2,000 a year for two years. Pioneer also continues to pay 80 percent of workers' health insurance so they won't have to switch policies. The firm covers a family's Internet and cell phone expenses and installs Web cams in homes. An HR rep checks in with each family monthly and sends holiday cards and care packages to soldiers and their families. Finally, when soldiers return to work, profit sharing is reinstituted as if they had never left.
The Outcome Good, though costly. Holcom estimates he spends more than $100,000 a year on the program for the four reservists currently overseas. But Pioneer's good deeds have not gone unnoticed. The company has won an award from the Department of Defense, and has convinced several area companies to adopt similar policies.