Posts belonging to Category benefits

Generally speaking, we all know how so-called coercive wellness programs work. The essential idea is to reward employees—or impose consequences on them, depending on how you look at it—for adopting certain healthier behaviors.

A common example is what’s sometimes known as the “smoker’s surcharge.” Companies hit tobacco-using employees with a higher insurance premium, ostensibly encouraging them to stop smoking, be healthier and more productive, and cut down on healthcare costs.

Such programs may be well-intentioned, but aren’t always embraced by the workforce.

Comcast Corp., however, seems to have found a way to get its nearly 120,000 employees on board with its efforts to stub out cigarettes.

At GlobalFit’s 7^th Annual Innovations in Wellness Summit, held yesterday in Philadelphia—just blocks from the cable giant’s headquarters—Lauren Gemberling, wellness coordinator with Comcast, shared some details on how they’re doing it.

In July of this year, the company begins charging a $25 per-paycheck premium to employees who smoke. This past November, Comcast employees were asked to indicate whether they used tobacco, and if so, whether they planned to enroll in the company’s smoking cessation program by July.

Planning to enroll and actually doing it are two different things, of course. But to date, 8,430 Comcast employees have done just that, and the overall results have been extremely positive, says Gemberling.

She showed the audience some examples of Comcast employees saying so themselves, through video testimonials the company has collected since November.

For example, one employee recalled his reservations upon learning of the company’s implementation of the premium, questioning his employer’s role in his personal health decisions.

In the four months since, however, he says he’s joined the program, quit smoking, gotten a gym membership, lost weight and bought a new car—which may have been made easier with the $600 he estimates he’s saved per month since giving up cigarettes.

Such examples aside, any organization introducing such a program is bound to see resistance from some workers who feel their employers are crossing a boundary, not to mention unfairly taking money out of their pockets.

Gemberling, however, says they’ve gotten largely “great feedback” from the workforce at Comcast. A key, she told the audience, is not to spring such changes on the workforce. Give employees plenty of time to process the premium change and consider their options, she said, and assure them the program’s overarching goal is to offer an incentive—and assistance—that helps them kick a dangerous and difficult-to-break habit.

“This is the first time I’ve rolled out a program where employees have said, ‘Thank you. I’ve been trying to change this behavior on my own for years, without success. I’m thankful for the help.’”

Share on Facebook

For all the talk about encouraging workers to take more control of their healthcare decisions, it seems many employees are neither prepared or all that eager to grab the reins.   

For that matter, nearly three-quarters of the workforce (72 percent) have not even heard the phrase “consumer-driven healthcare,” according to the 2013 Aflac WorkForces Report, which recently surveyed 1,884 benefits decision makers and 5,299 employees.

More signs that HR and benefits leaders may have a tough road ahead in helping employees better understand healthcare reform and their increasingly complex healthcare coverage options:

• More than half (54 percent) of workers would prefer not to have greater control over their insurance options, because they don’t have the time or knowledge to effectively manage it.

• Thirty-two percent of employees indicated they are “not very” or “not at all” knowledgeable about health-savings accounts. More than three-quarters (76 percent) of workers said the same about federal and state healthcare exchanges, with 49 percent describing themselves as “not very” or “not at all” knowledgeable about health-reimbursement accounts.

Educating workers on the changes coming with the Affordable Care Act doesn’t seem to be a top priority for some employers, either:

• Despite 75 percent of employees saying they think their employer would educate them about changes to their coverage as a result of healthcare reform, just 13 percent of employers said educating employees about healthcare reform was important to their organizations.

“It’s time for consumers to face reality,” said Audrey Boone Tillman, executive vice president of corporate services at Aflac, in a statement.

Tillman advises employees and HR to sit down together to address questions and explain policies, key terms, deductible limits and co-pay and co-insurance requirements, as a first step toward helping workers make sensible decisions going forward.

“The bottom line,” she says, “is if consumers aren’t educated about the full scope of their options, they risk making costly mistakes without a financial back-up plan.”

Share on Facebook

While mornings may never be easy for new parents, at least the ones working at Yahoo have something to smile about this morning, courtesy of CNNMoney:

Both new mothers and fathers at Yahoo can now take eight weeks of paid parental leave, and the mothers can take an additional eight weeks. What’s more, new parents will also receive $500 to buy items like groceries and baby clothes.

It’s part of a slate of new benefits “to support the happiness and well-being of Yahoos and their families,” the company confirmed via email. NBC Bay Area first reported these changes. Other new perks include gifts for new pets, and eight weeks of unpaid leave each time an employee hits a five-year milestone.

Just like CEO Marissa Mayer’s controversial decision to eliminate the telecommuting option for Yahoo’s workers a few months back, it’s unlikely the generous new policy will ripple out to organizations nationwide.

But, the article notes, it does bring the Sunnyvale, Calif.-based tech firm’s leave policies more in line with its more-progressive counterparts including Google and Facebook.

Share on Facebook

Mercer’s Tracy Watts, partner, and Stefan Gaertner, principal, want HR and benefits leaders to look at the Affordable Care Act and all its many implementations looming on the horizon as opportunities, not dangers or threats.

In their joint session Tuesday at the WorldatWork Total Rewards 2013 conference, Hourly Workforces and Healthcare Reform: Angst or Opportunity? each one emphasized the need for HR and benefits professionals to take everything into consideration before making any moves, or even worrying about them — costs of providing healthcare, costs of getting out of the healthcare business altogether, costs of keeping all full-time employees so classified, savings of switching some to part-time (under 30 hours a week) to avoid some of the ACA’s costs, even the impact of potential legislative penalties and liabilities that have emerged recently should employers be planning a blanket reassignment in workers’ hours to avoid the mandate that FTEs be offered healthcare insurance under the new law.

In essence, with healthcare exchanges set to be implemented in October and many other ACA regulations coming in January, now’s the time to look at the whole ball of wax and decide what combination of options — yes, some admittedly scary — will work best for your organization.

Watts and Gaertner both provided research findings that added some real meat to the discussion, and to the notion that no decision will be an easy one. One study, for instance, showed a direct relationship at several client companies between full-time employees and profitability. That data showed converting FTEs to PTEs could yield as much as about $30 million in savings, yet cost about the same amount in lost productivity and profitability.

“There is clear suboptimal performance and increased absenteeism among part-time employees,” said Gaertner. He also cautioned that increased costs in doctors’ visits, absenteeism, even worker energy, needs to be factored in to a company’s decision on what to offer, what not to offer and whose classification to change.

“One company showed $10 million in [annual] added cost [projections] based on employee errors” alone when switching from full-time to part-time, Gaertner said.

Following the session, both Watts and Gaertner stressed that few large companies seem poised to make dramatic changes to their offerings and/or classifications at this time.

Most, said Gaertner, are using the oncoming ACA implementation as “a good opportunity to really start taking the healthcare question seriously, reviewing the strategic and financial value of healthcare coverage for your employees.”

No two companies, he added, are the same.

Share on Facebook

As attendees gathered into the general session room for the opening keynote at the Human Resource Executive Health & Benefits Leadership Conference^™, the energy in the room felt much different — more charged, more urgent, more focused — than any other that I’ve been in over the last few years.

Even before keynote speaker Dr. Ron Leopold started his remarks, people were in their chairs early, ready to go—pens and notepads out, smartphones charged. I assumed they were just anxious to hear Leopold answer the question he’d posed in his session title (which he even admitted was selected to get tongues wagging), “Are benefits forever?”

However, as the session progressed, I realized attendees weren’t seeking paydirt on Leopold’s query and they weren’t looking to sit in a drum circle for a “PPACA therapy session,” as one pro in the room tweeted.

Rather, as the clock ticks down to mere months before practitioners face the full force of health care reform the attendees this morning wanted solutions. They wanted strategies. And by the looks on their faces, they weren’t leaving until they got them.

I had a lightbulb moment. I realized that employers are no longer panicked about PPACA. They are purposeful.

Following the Supreme Court’s affirmation of the health care reform law and the re-election of President Obama, us benefits communicators have been waiting for that shift from employers for a while now. We’ve been waiting patiently—some of us more so than others—for you to turn flimsy ideas into firm plans. Mostly so that we could stop writing stories about how you’re all in “wait and see mode,” and start writing about strategies about how to work now that you’re in “decide and do” mode. That makes our jobs waaaay more exciting, and also more meaningful.

As Leopold noted, “Most employers—according to most survey and research data—have decided to ‘play’ [under PPACA’s employers mandate], but it’s a different playing field.” From my vantage point, what brought practitioners here to Las Vegas for HBLC is much more than to spend three days in 90-degree weather (although it’s a nice bonus). They’re here this week because they understand, as Leopold said, “The answer to PPACA isn’t in the health plan alone, [and] even if employers get out of the health care business, they’ll never get out of the productivity business.”

So, to succeed on that new playing field, employers know they need some new plays. For example, I ate lunch with a woman today who is at HBLC seeking new ideas for her organization’s wellness program. I asked her about the current offering, and it sounded like a rousing success—in five years, the plan has garnered more than 50 percent participation using a well-structured blend of incentives and challenges to keep employees engaged. It also features employee health fairs where employees and their families can receive biometric screenings, so employees’ engagement via the fun stuff still can lead to actionable health conversations with their physicians. Further, it’s a collegiate environment, so she and her team leverage the school’s kinesiology students to serve as personal trainers for employees.

I know employers that would love to have resources and participation levels like that, I told her. What exactly was she looking to change?

The impact of PPACA has the organization considering self-funding, she said. So, instead of just wellness carrots, “it may be time to bring in sticks, too.”

Like Leopold said, employers are playing, but on a whole different playing field. I, for one, am encouraged that here at HBLC, HR/benefits pros understand that and are prepping new and improved benefits playbooks for game time come January.

Kelley M. Butler is the Editorial Director at Benz Communications, a consulting firm specializing in benefits communications. Formerly the Editor-in-Chief of Employee Benefit News, Kelley has been covering news and trends in human resources and employee benefits for more than 12 years. Follow her updates from HBLC on twitter at @kelleytheeditor.

Share on Facebook

The U.S. Supreme Court decision Tuesday in the case of US Airways v. McCutchen appears to be a big one for those handling or administering benefit claims and reimbursements under the Employee Retirement Income Security Act. So say legal experts already weighing in.

Hogan Lovells, the law firm representing US Airways, said in a statement released Wednesday that the decision “provides clear guidance to employer sponsors that reimbursement provisions will be enforced by the courts as written. In essence, the Court ruled that an employee (James McCutchen) who receives medical payments for an injury pursuant to an employer-sponsored health-benefits plan may not avoid the reimbursement requirements of that plan by arguing (as McCutchen’s lawyers had) that such reimbursement is “inequitable.”

Neal Katyal, co-director of Hogan Lovell’s appellate practice and former acting solicitor general of the United States who argued the case, calls the decision “a victory not only for US Airways, but for all ERISA employee-benefits plans, because it prevents individual judges from rewriting plan terms according to their own notions of equity,” which he argued the Third Circuit Court of Appeals had done.

According to this analysis by Michelle Anderson of Fisher & Phillips summing up the decision and its impact, ”the supremacy of a written ERISA-governed plan still reigns as [the Court] reversed the ruling of an appellate court which had held that a court in equity can ignore unambiguous subrogation reimbursement language, and simply rewrite the terms of an ERISA-governed plan in line with its own ideas of what was ‘fair and equitable.’ ”

Here’s what she says the ruling means for employers:

Although this is a win for those self-funded plans governed by ERISA, plan fiduciaries and administrators are wise to review with their counsel the subrogation, reimbursement and attorney fee and costs provisions in the written documents to ensure conformity to the law in this area.

Undoubtedly, those who litigate in the personal-injury arena will continue to develop new theories to test the sufficiency of ERISA, since taking the claim of injured persons who have had their expenses paid by a medical plan will be less attractive if the ability to collect fees and recover damages for their client will be secondary to the rights of the plan.

Her analysis offers a complete synopsis of the case, which many of you probably already know. This piece by Allison Bell on the LifeHealthPro site also sums up the facts of the case, saying the decision basically now establishes that “a federal court can use equitable law principles when a group health plan contract governed by [ERISA] is silent about a legal issue.”

And finally this, from Mayer Brown, stresses the need by employers – in light of this case – to review their ERISA-plan paperwork very carefully:

The Court’s decision in McCutchen establishes that contractual provisions requiring reimbursement of benefits paid according to an ERISA plan will be enforced according to their unambiguous terms. The ruling will thus be of interest to all businesses that offer such plans to their employees or administer them on behalf of other entities. At the same time, the Court’s decision highlights the need to draft reimbursement provisions in ERISA plan documents that are as clear and comprehensive as possible. Doing so will minimize (although likely not eliminate) the potential for courts to apply equitable rules as “gap fillers” when the plan language is silent or ambiguous.

Share on Facebook

Consider this a heads-up for the companies offering free meals to employees on campus: The Internal Revenue Service may be coming for its piece of the pie.

That’s according to a recent Wall Street Journal article, which says the IRS is examining whether the free food enjoyed by employees is a fringe benefit on which they should pay additional tax.

What’s piqued the taxman’s interest, it seems, is why grub is being provided gratis to employees. Or at least how firms describe their reasons for doing it.

According to tax rules, offering free food as a way to promote morale or attract prospective employees is considered taxable compensation. The Journal article notes, however, an exception that allows employee meals to remain untaxed if they are served for a “non-compensatory” reason for the “convenience of the employer.” This exception has typically been applied to remote workers, or those in professions in which reasonable lunch breaks aren’t feasible.

According to the Journal piece, though, some attorneys argue that various technology firms could qualify for the exception, “in part because free food encourages longer work hours and is a crucial part of Silicon Valley’s collaborative culture.”

University of Florida tax-law professor Martin J. McMahon doesn’t go for that idea at all. He thinks employees at companies such as Google—famous for the elaborate and eclectic culinary options it makes available to its people—should be paying their share.

 “I clearly think it ought to be taxable income,” he told the paper.

“I buy my lunch with after-tax dollars,” says McMahon, who contends that free meals should often be considered part of compensation packages. “And I have to pay taxes to support free meals for those Google employees.”

(Curious how much a food tax would cost the average Googler? Assuming a fair-market value of between $8 and $10 per meal, a Google employee eating two meals on campus each workday could be looking at taxes on an extra $4,000 to $5,000 a year, according to the Journal.)

The IRS may share McMahon’s opinion, and “often takes a dim view” of employers’ claims that free food is integral to maintaining a collaborative corporate culture, according to employment-tax attorney Thomas M. Cryan Jr., a shareholder with Washington-based firm Buchanan Ingersoll & Rooney.

Cryan Jr. told the paper that he’s worked on audits for multiple Silicon Valley-based tech firms, and has seen the IRS question companies’ practices surrounding complimentary meals.  He offered a few words of caution:

“If they’re in there auditing, and you’re not taxing the meals, they’re going to challenge you on it.”

Employers, he says, typically settle and determine a fair-market value for the meals, which they include in employees’ future paycheck stubs. In these instances, firms frequently give employees a bump in pay, to cover their bigger tax bills.

And, a failure to carefully and correctly treat the taxation of employee meals could prove even costlier for the company. While individual employees would technically be on the hook for any unpaid back taxes, experts say the IRS is more likely to pursue the employer for failing to withhold taxes.

Share on Facebook

As The Highest Court in the Land weighs the constitutionality of The Defense of Marriage Act, the latest figures from healthcare benefits consultancies Mercer and Aon Hewitt find a growing number of companies already offering same-sex domestic partner benefits to their employees.

According to recent Aon Hewitt data culled from 1,300 employers, 78 percent of companies offer domestic partner benefits. Among those organizations, 71 percent offer same-sex coverage. That number stood at 19 percent in 2007, according to Aon Hewitt.

New York-based Mercer’s recent survey finds the number of companies providing same-sex benefits increasing as companies get larger. More than half of the companies surveyed indicate offering health coverage to same-sex domestic partners, according to Melissa Jimeno, a consultant in the firm’s healthcare practice. Among large employers, the number climbs into the 60 percent to 75 percent range.

The percentage of employers participating in Mercer’s survey that reported offering health coverage to same-sex domestic partners, by company size:

• 500 to 999 employees – 36 percent

• 1,000 to 4,999 employees – 52 percent

• 5,000 to 9,999 employees – 62 percent

• 10,000 to 19,999 employees – 67 percent

• 20,000 or more employees – 75 percent

Share on Facebook

Just got word from a source close to this subject that the Massachusetts Board of the Connector (the state agency that administers the state healthcare-law requirements) just approved a measure on Thursday that could mean big penalties for Massachusetts employees in 2014, when healthcare reform mandates kick in, and could affect employers there as well.

Rich Stover, a principal at New York-based Buck Consultants, who testified before the Connector Board back in January about this, tells me the board’s approval of amendments to the state’s idividual-mandate requirements will result in Massachusetts employees being subject to significant penalties even if they have comprehensive health coverage that satisfies the ACA requirements.

Employers there, he says, will have to revise their plan designs or complete an uncertain certification process with the state in order to ensure their employees aren’t hit with such penalities.

Since it’s involved and a bit confusing, here’s his rundown of the whole affair:

In 2006, Massachusetts enacted a health reform law that requires Massachusetts residents age 18 and older to have health coverage that meets certain minimum creditable coverage (MCC) requirements or be subject to tax penalties. This reform law was the model for the federal Patient Protection and Affordable Care Act. Although the MCC requirements only apply to residents and do not apply directly to employers, if an employer plan does not satisfy the MCC requirements, employees and family members enrolled in that employer plan may be subject to these Massachusetts’ tax penalties.  The maximum annual individual penalty for 2012 is $1,260.

With the ACA employer and employee mandates and penalties going into effect in 2014, Massachusetts had to decide whether to continue the individual mandate and MCC requirements [then].  On March 14, the Board of the Connector … met and decided to continue, and strengthen, the individual mandate in 2014. The 2014 requirements could subject Massachusetts residents participating in large employer plans to significant penalties if their employer coverage does not satisfy the new MCC requirements, even though the employer plan fully complies with the federal ACA requirements.

In 2014, Massachusetts will require that medical coverage provide 100 percent coverage for preventive-care service and limit out-of-pocket amounts paid by enrollees to certain maximum amounts.  ACA requires that non-grandfathered plans meet these requirements, but not grandfathered plans or certain retiree plans. In addition, ACA has a special transition rule in 2014 for prescription-drug benefits that Massachusetts is not providing.  So employees in grandfathered plans under ACA may be subject to Massachusetts penalties, even though the plan is fully in compliance with the ACA. Employers can help employees avoid these penalties by filing their plans with the Connector and seeking approval for the plan.

Here, by the way is a helpful link from Stover recapping the board’s Thursday meeting and actions, as well as previous ones.

In essence, Stover says, “employers who had assumed that the Massachusetts requirements would no longer apply with federal reform being effective in 2014 will be very disappointed to learn that the compliance efforts, administration and penalties will continue under state law.”

So what does all this mean for human resource professionals in Massachusetts and possibly beyond?

“As they plan for 2014,” says Stover, “human resource officers will need to make sure they address both the federal and state requirements, which [obviously and apparently] will put an additional burden on Massachusetts employers.”

Share on Facebook

It’s understandable that many employers might view the 20-year-old Family and Medical Leave Act as a serious thorn in their sides, considering the administrative challenges and costs associated with the law. But research released this week by the Integrated Benefits Institute suggests companies might want to set such criticisms aside and look at the bigger picture.

The study, titled “Early Warnings: Using FMLA to Understand and Manage Disability Absence,” found that employees who had a continuous or intermittent FMLA leave in one year were also more likely to submit a short-term-disability claim the next year. Prior use of such leave also predicted slightly longer STD durations.

The findings show that “FMLA is the first indication something could be wrong,” said IBI President Tom Parry during a Forum session detailing the results. Roughly 520,000 employees at 160 employers participated in the research, which looked at data over five years.

Some other findings from the report:

• The chance for an STD claim was greater for employees with intermittent leaves than those with continuous leaves.
• A person taking time-off for their own health condition is more predictive of a physical short-term-disability claim than someone who takes time-off for a family member’s condition.
• STD durations are six to nine days longer when preceded by continuous FMLA claims.
• FMLA requests were predictive of a future STD claim even when leave is denied. In other words, says IBI Senior Research Associate Brian Gifford (a co-author of the study and presenter at the session), “Just because an employee doesn’t qualify for FMLA when they ask for it doesn’t mean they don’t have a serious medical condition.”
• Claimants who used intermittent FMLA for their own health conditions prior to an STD claim had a 33 percent greater likelihood of LTD use than employees with no FMLA leaves.

Claimants who used intermittent FMLA for their own health conditions prior to an STD claim had a 33 percent greater likelihood of LTD use than employees with no FMLA leaves.

In light of these findings, IBI researchers suggest that employers, at the time of an FMLA request, might want to connect employees to various resources, such as EAPs and disease-management programs, and engage them in job-accommodation and stay-at-work discussion.

The IBI research also debunked the notion that high intermittent users of FMLA would take off more Mondays or Fridays than low users. (Many often joke FMLA actually stands for the Friday-Monday Leave Act.) “We found no appreciable differences in the weekdays of intermittent leave incidences …” the researchers said.

Share on Facebook