Benefits Outsourcing Morneau Sobecos benefits outsourcing services are a natural extension of the benefits consulting practice.

Administering health and welfare benefits plans is an important and complex task for employers who must manage both the rising cost of providing health insurance and employees' demands for increased choice of benefits options. As plans incorporate employee contributions, determining the appropriate employee deductions has become crucial. For employers with flexible plans involving employee choice, each organization has a period of time (typically three to four weeks) every year during which employees are required to make decisions regarding their benefits options and enrol in programs for the following year. Each employer must communicate its benefits offerings by providing employees with information explaining the available options and answering employees' questions regarding the various alternatives. Once employees have submitted their choices, the employer must then accurately communicate these choices to provider organizations. For organizations managing benefits administration internally, staffing a human resources department with adequate support to effectively and efficiently handle this annual surge of activity can be extremely challenging. Furthermore, ongoing administration requires managing payroll deduction and status data that determines each participant's health plan eligibility and transmitting eligibility data to insurance companies and other providers. Morneau Sobecos technology-based delivery model offers employers a cost-effective and efficient solution to meet these benefits administration needs. The firm is able to manage the annual enrolment process in a seamless manner for the employer, clearly communicate to employees their available choices, and transfer these choices to various service providers. Significant value is delivered to clients during the annual enrolment process and in the context of ongoing benefits administration. Workplace Health and Productivity Solutions With the acquisition of Shepell.fgi in June 2008, Morneau Sobeco significantly expanded its service offering in the workplace health and productivity arena. Services include EAP programs, workplace training and education, and employee health management services. These services are focused on assisting employers improve their productivity and reduce costs associated with employee absences, illnesses or other personal situations that impact employees ability to be productively at work. The firm develops solutions that focus on not only prevention, but also early intervention, recovery and facilitating employees return to work.

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The following chart illustrates the types of workplace health and productivity services offered: Prevention Early Intervention Recovery
At Work EAP Management training Management consults EAP promotion Work-Life Services (child, elder, financial and legal) Nutritional/Health counselling Workplace Support Program Online Services Occ Health Pre-employment medicals On-site flu clinics Ergonomic programs Wellness Wellness communications Wellness education Health Risk Appraisal Employee Surveys Executive coaching ADR mediation Organizational focus groups Organizational consultation Policy development Health coaching
(1) (2)

Days 1 - 5 Attendance Mgmt Attendance Support Attendance Tracking Absence Prevention EAP EAP Counselling Monitored Referrals Work-Life Services (child, elder care, financial and legal) Nutritional counselling Substance Abuse Counselling Occ Health Substance Abuse testing Workplace Health Trauma Response Disease Mgmt Health coaching

STD (1) through to Disability Mgmt Functional Assessment Adjudication / Advice to pay Declined Claims Mgmt Disability Case Mgmt Work Assist counselling Facilitated return to work ADR mediation

LTD(2)

Ergonomic consultation Wellness Relapse Prevention Occ Health Workplace Hazards testing Management Workplace Health Trauma Response

STD means short-term disability LTD means long-term disability

Employee Assistance Programs EAP services, delivered under the name Shepell.fgi, are dedicated to prevention and early intervention at any stage of an employees need. Although paid for by employers, this service is made available directly to employees and their families, providing awareness, education and access to multiple modes of short-term clinical or professional consultation for a host of issues including: relationship issues, child and senior care, addictions, illness prevention and illness management, mental and emotional counseling, legal and financial advice, nutritional consultation, and resources, referrals and consultation for other personal and family needs. EAP has become a standard employee group benefits offering by Canadian insurance companies. EAP typically focuses on mental health and relationship issues which, if left unresolved, can lead to increased prescription drug costs, absenteeism, short-term or long-term disability and other workplace productivity challenges. Delivery of EAP services is initiated through calls to one of three care access centres and are directed to the most appropriate clinical specialist to support and resolve the presenting issue. In addition to salaried clinical specialists, there is an extensive network of over 13,000 counselors worldwide as well as other contracted service providers engaged to deliver EAP services. Employee Health Management The firm offers a broad range of employee health management services including occupational health, absence and disability management and disease management programs, all aimed at mitigating health risks or improving and managing health conditions. The main goal of these solutions is to prevent employee absence, return employees to work quickly, and improve personal and professional productivity. Employee health management services include: x occupational health services provided on or near an employers site, including flu clinics, ergonomic programs, pre-employment and periodic medical exams, pandemic

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consultation, hazard audits and occupational health and safety governance policy and compliance review; x x x x medical case management services that address conditions that can range from simple to complex; claims adjudication to provide independent medical assessments and advice-to-pay; return-to-work facilitation that assists organizations, managers and employees to develop realistic and fair return-to-work plans; absence prevention and attendance management programs that assist employers to manage employee absences and offer support to employees to reduce duration of absence and risk of disability; and prevention-based employee health and healthy lifestyle programs, including health coaching (disease management) programs.

Employee health management services are typically provided by salaried occupational health nurses and disability management case managers and are supported by the firms three care access centres. Workplace Training and Education Workplace training and education services are delivered to support an organizations health and productivity by taking an advanced approach to workplace interventions and skills development. The services address workplace issues for both local and international employees, such as workplace violence prevention, stress, trauma and change, among others. These issues affect groups of employees and, if left unresolved, can have a detrimental effect on an employers ability to achieve its desired business results. Workplace training and education services that are provided to international employees are scheduled through its global service coordinators located in the care access centres, but serviced locally by the firms network of independent service providers. COMPETITIVE CONDITIONS The human resources consulting and outsourcing businesses are highly competitive. Management believes that there are several barriers to entry including Morneau Sobecos intellectual capital, the deep understanding of its clients' businesses, its proprietary systems, its long-standing client relationships and extensive network of EAP counselors and service providers. Competitors include large international pension and benefits consulting firms such as Mercer, Towers Perrin, Aon, Hewitt Associates and Watson Wyatt; smaller consulting firms such as Eckler Partners and The Segal Company; information technology, consulting and business process outsourcing firms such as Hewlett Packard, ACS, Fidelity and Convergys, as well as employerservice organizations such as Wilson Banwell and Ceridian in respect of EAP services, and insurers such as Manulife Financial and Standard Life in respect of employee health management services. Management believes that the following factors are competitive strengths of Morneau Sobeco within the human resources consulting and outsourcing industry. Market leader in human resources consulting and outsourcing Morneau Sobeco is the largest Canadian-owned human resources consulting and outsourcing firm that focuses on pension, benefits and workplace health and productivity. It serves a wide range of organizations across Canada and the U.S., as well as internationally. Morneau Sobeco is one of the three largest pension and benefits consulting and outsourcing firms in Canada and it maintains over 50% of the market share in the Canadian EAP market, in managements estimation. Clients represent a cross-section of Canadian industries and are of varying sizes, from small businesses to some of Canada's largest corporations and government organizations.

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