Meat + Poultry - December 2004 - 30

2005 Outlook

Insurance

Some food companies' policies fly in the face of their contemporaries and can result in growing their market share. This past month,
San Diego-based Jack in the Box executives began offering all of its
hourly workers health insurance, including vision and dental coverage. The chain, which operates and franchises up to 2,000 of the
burger stores and another 180 Qdoba Mexican Grill locations, is offering the insurance and paying a portion of the premiums in an effort to decrease turnover.
Taking the initiative
Proactive strategies have become the norm for processors
when it comes to operating their plants, whether it means adopting the next best food safety intervention or addressing an operational issue, like insurance costs. "Insurance is a huge factor in
this industry because profit margins are already fairly slim, and
the cost of health care is growing so rapidly that the industry is
being forced to either absorb the extra cost or pass it on to workers or consumers," says David Ray, vice president of public affairs with the American Meat Institute, Washington, D.C. "Even
though there are rising health care costs, some in the industry
have found ways to make a difference and contain those costs.
On-site safety, health and wellness programs, for example, can
help bring down overall health care premiums."
Health and wellness programs can pay off. At least one poultry
processor has found that cost increases are easier to bear by addressing health care at the source. In the early 1990s, executives
with Fieldale Farms, Baldwin, Ga., realized that a growing number

of its aging workers were suffering heart attacks. With treatment
costing an average of $50,000 each, the company's insurance
rates were suffering too, to the point that coverage was no longer affordable for its 4,600-plus employees. However, the company
took a proactive approach to the problem.
Fieldale embarked on an employee wellness campaign, which included paying for employees' health club memberships, offering free
health screenings and educating workers through nutritional counseling and health-related informational programs. Since its inception
in 1992, the wellness efforts have helped keep Fieldale's health insurance cost increases to an average of about 2.5 percent each year.
The program has been credited with keeping the company's per-employee insurance cost to about $3,000 annually, less than half of the
national average.
Beyond health care
As processors work their way through the health care minefield, insurance costs covering other plant operations seem to
have leveled off. Warren Collins, president of Springfield, Mo.based Land O' Lakes Insurors, says the premium jumps of the
past five years have subsided. "Insurance premiums increased
from 2000 to 2003, which seems to have strengthened (underwriters') balance sheets," he says, and now rates have in many
cases dropped. "Pricing for property and liability coverage has
stabilized and should stay that way for the foreseeable future,
barring any major events."
Collins, whose customers include about 40 small- and medium-

Annual change in average total health-benefit cost, 1987-2004
18.6%
16.7% 17.1%
14.7%
12.1%

11.2%
10.1%

10.1%
6.9%

8.0%
6.1%

7.3%

8.1%

7.5%

2.1% 2.5%
-1.1%

0.2%

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Note: Results for 1987-1998 are based on cost for active and retired employees combined.
The change in cost from 1998-2004 is based on cost for active employees only.
Source: Mercer's National Survey of Employer-Sponsored Health Plans

32

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Meat + Poultry - December 2004

Table of Contents for the Digital Edition of Meat + Poultry - December 2004

Contents
Meat + Poultry - December 2004 - 1
Meat + Poultry - December 2004 - 2
Meat + Poultry - December 2004 - 3
Meat + Poultry - December 2004 - Contents
Meat + Poultry - December 2004 - 5
Meat + Poultry - December 2004 - 6
Meat + Poultry - December 2004 - 7
Meat + Poultry - December 2004 - 8
Meat + Poultry - December 2004 - 9
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https://digital.meatpoultry.com/sosland/mp/meatpoultry-october-2021
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https://digital.meatpoultry.com/sosland/mp/meatpoultry-september-2021
https://digital.meatpoultry.com/sosland/mp/meatpoultry-august-2021
https://digital.meatpoultry.com/sosland/mp/meatpoultry-july-2021
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https://digital.meatpoultry.com/sosland/mp/meatpoultry-march-2021
https://digital.meatpoultry.com/sosland/mp/2021_02_01
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https://digital.meatpoultry.com/sosland/mp/2020_12_01
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https://digital.meatpoultry.com/sosland/mp/2020_04_01
https://digital.meatpoultry.com/sosland/mp/2020_03_01
https://digital.meatpoultry.com/sosland/mp/2020_02_01
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