Category Archives: benefits

What Winning at Wellness Looks Like

Curious to see what makes for a top-notch wellness program?

I’ll assume you said yes, which means you might want to take a peek at the new U.S. Chamber of Commerce Winning with Wellness report.

Released earlier this month, the new publication is designed to “demystify” health promotion initiatives, looking at some of the “fundamentals of workplace wellness programs,” including evidence-based critical components such as developing a plan and applying behavior change methodologies, for example.

The report also lays out “10 Essential Steps in Designing a Workplace Wellness Program,” urging employers to “rely on evidence-based best practice strategies and tailor interventions to their populations” when plotting out wellness initiatives.

To begin planning, for instance, the report suggests that employers assess the organization’s readiness to adopt a workplace wellness strategy, asking “crucial questions” such as: Are there business plans in place that support or impede behavior change? Is there a history of workplace wellness programs? If so, what are some lessons learned? Can the organization specify how health changes can improve the work environment?

In addition, the report cites case studies demonstrating “employee satisfaction and social or financial ROI” from wellness programs at companies such as PepsiCo Inc. and Johnson & Johnson.

An evaluation of PepsiCo’s Healthy Living wellness program, for example, studied the initiative over the course of seven years in an effort to determine the cost impact of its lifestyle and disease management programs.

As the Chamber report notes, the study revealed that Pepsi saw an average reduction of $30 in healthcare costs per member per month, after seven years of continuous participation in either the lifestyle or disease management program.

A 2011 evaluation of Johnson & Johnson, meanwhile, compared a matched cohort sample of its 31,823 employees to similar organizations with a comparable number of employees. According to the U.S. Chamber, the findings demonstrated that, from the years 2002 to 2008, “Johnson & Johnson experienced a 3.7 percent lower average annual growth in medical costs compared to the comparison group,” and J & J wellness programs produced an ROI of $3.92 for every dollar spent.

Finally, the Chamber points to a 2013 RAND Inc. report that determined “there is solid evidence to be optimistic” that healthier employee behavior will correlate directly to lower healthcare costs. More than 60 percent of respondents in that survey indicated that workplace wellness programs reduced their organizations’ healthcare costs, while also reporting an overall decrease in healthcare service utilization, which, in turn, reduced the healthcare cost burden.

While pointing out that each of these studies had limitations, “the majority show that well-designed wellness programs lead to an ROI ranging from $1.50 [for each dollar spent] to more than $3 invested over a timeframe of two to nine years,” the report notes.

Cost savings aside, the report’s authors tout the non-financial advantages of developing a winning wellness program.

“Even if one assumes for the sake of argument that any limitation of each particular study leads to an ROI of less than $1.50 to $3,” they write, “there are other benefits to these programs, such as increased job performance, overall well-being, and happy and thriving employees who contribute to business and community success.”

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Survey: Employees Only ‘Moderately’ Engaged

The good news, according to the Society for Human Resource Management’s latest Employee Job Satisfaction and Engagement Survey, is that employee satisfaction is at its highest level in 10 years, with 88 percent of respondents saying they’re satisfied with their jobs. The bad news? The number of employees who say they plan to look outside their current company for a new job is also up, at 45 percent. SHRM announced the survey results at its Talent Management Conference in Orlando earlier this week.

The keyword for holding on to employees is spelled R-E-S-P-E-C-T: 67 percent of the 600 employees surveyed ranked “respectful treatment of all employees at all levels” as “very important” to job satisfaction, followed by overall compensation/pay and benefits, job security and “opportunities to use skills and abilities,” which tied for fifth place with “trust between employees and senior management.”

As for employee engagement, actual engagement levels are little-changed from last year’s survey, said Evren Esen, SHRM’s director of survey programs, coming in at 3.8 out of 5 with 5 being the highest, showing that employees are “moderately engaged.” Satisfaction and engagement aren’t always aligned, with engagement typically tied to employees’ connection and commitment to their work and organization, she said.

One of the top factors affecting employee engagement are the engagement level of their coworkers, said Esen. “If employees don’t see those around them as being engaged, this will impact the overall level of engagement in the organization,” she said.

Being engaged means feeling that you’re an important part of the organization’s mission, she said.

“The opportunity to use their skills and competencies is of continuing importance to employees – it gives them a sense of engagement and pride,” said Esen. HR should develop a “skills matrix” for employees to get a better sense of “what they do well, not just what they do” in their everyday jobs, she said. This will make it easier to determine if there are other ways employees could be contributing and – by extension – feel a tighter connection with the organization.

“Nobody is going to feel sustained doing the same job over and over,” she said.

Dissatisfaction with their compensation and benefits was a top reason why employees plan to look for new jobs, the survey finds. Sixty three percent of employees chose overall compensation as “very important” to them, yet only 23 percent described themselves as “very satisfied” with their own compensation. Similarly, 60 percent chose overall benefits as very important, but only 27 percent said they were very satisfied with their benefits.

“Companies have only reinstated some of the cuts to benefits they made during the Great Recession,” said Esen. “Organizations really need to focus on what benefits their employees really want, and offer the ones that appeal to all demographics of their employee base.”

HR must also keep in mind the needs of a multigenerational workforce, she said.

“Millennials want their ideas to be valued and not dismissed just because they’re younger and less-experienced,” said Esen. “Boomers want to be valued for their experience, but often feel they’re not sufficiently valued for it. It’s important to keep both groups satisfied.”

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Americans’ Financial Wellness (Or Lack Thereof)

“Financial wellness” is a buzzword that’s really taken off during the last few years as companies attempt to figure out how to help their employees be better prepared for retirement in an era of longer lifespans, disappearing traditional pensions and uncertainty over the long-term future of Social Security.

financial worriesThe findings from the latest Workplace Benefits Report from Bank of America Merrill Lynch should add some urgency to the subject of financial wellness, with six in 10 Americans saying they feel stressed about their current financial situation — up from 50 percent in 2013.

The report, based on a survey of 1,200 employees with 401(k) plans, finds that feelings of financial uncertainty are widespread across all generations in the workplace, with only 24 percent of millennials, 18 percent of Gen Xers and 22 percent of baby boomers saying they feel “in total control” of their financial situations. Meanwhile, although 83 percent say their workplace financial benefit plans are critical to their financial security, more than half (59 percent) say they need help understanding how the financial benefits can work for them.

Americans appear to have only a vague understanding of how much they’ll need to have saved to maintain their current lifestyle in retirement, despite the fact that 70 percent of respondents say they have a “pretty good idea” of what they’ll need to have saved. Forty percent say they’ll need less than $500,000, while 61 percent say they’ll need less than $1 million. For context, according to Bank of America Merrill Lynch, a healthy couple retiring at age 65 with $1 million in accumulated savings could expect to receive $40,000 annually at a draw-down rate of 4 percent.

That same couple could expect to spend, on average, $400,000 on healthcare during the course of their retirement years, the report states. Nearly half the employees surveyed (46 percent) have started contributing, or increased their contributions to, health savings accounts and flexible spending accounts offered by their employer. Although the report finds that the percentage of employees participating in an HSA has grown by 50 percent since 2013, 53 percent of employees with an HSA view it as a “short-term vehicle” to cover near-term health expenses rather than as a long-term savings vehicle. Additionally, 55 percent usually spend their entire HSA balance within a given year.

The combination of trying to save for the future while paying for current expenses is a tough burden for most employees. “Given how many are struggling with today’s financial demands while planning for their future, employers are in a critical position to help their employees secure their financial future,” says Bank of America Merrill Lynch’s Lorna Sabbia.

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The DOL’s New Fiduciary Rule

The new fiduciary rule issued yesterday by the Dept. of Labor, which is designed to address conflicts of interest among financial advisers, will require HR departments to review their arrangements with vendors that provide retirement-plan services, say experts.

“The definition of ‘fiduciary’ is being expanded, and HR will need to determine if they have vendors that will now fall under this category,” says Robert Kaplan, associate attorney in Ballard Spahr’s employee benefits and executive compensation group.

The rule is designed to protect the best interests of retirement-plan participants and sponsors by applying the “fiduciary standard” to all those who provide investment advice in order to prevent conflicts-of-interest, which the White House Council of Economic Advisers says costs retirement savers $17 billion a year.

In many cases, vendors that provide services for employer-sponsored retirement plans that hadn’t been fiduciaries before the new rule – such as broker-dealers, mutual-fund representatives, etc. – will be considered fiduciaries once the new rule takes effect (it goes into final effect on April 1, 2018, with a “transition period” starting April 1, 2017). HR will need to carefully evaluate all advisers that provide services to their organization’s retirement plans to determine whether they’ll now be considered fiduciaries, says Kaplan.

For example, many 401(k) record-keepers offer “reach out” campaigns targeted at plan participants (including former employees who still have accounts in the company plan) who may be considering whether to rollover funds from a 401(k) plan into an individual retirement account. Today these services only need to meet a “suitability” standard, says Kaplan; under the new rule, they must meet the fiduciary standard.

Much of the compliance duties for the new rule will be handled by vendors and record keepers, says Kaplan. However, in a few instances HR may encounter vendors that refuse to recognize that they will now be considered fiduciaries – in such cases, HR will need to terminate the relationship, he says.

“There are some less-than-reputable vendors that don’t want to be held to the fiduciary standard, and they will probably be driven out of the business,” says Kaplan.

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HR at Humana Learns by Listening

Earlier this week, I stumbled upon a press release summarizing a recent Employee Benefit Research Institute report.

In the 2015 Health and Voluntary Workplace Benefits Survey, the Washington-based organization found the percentage of workers reporting they are satisfied with the health benefits they currently receive has fallen from 74 percent to 66 percent between the years 2012 and 2015.

This is just a guess, but I have a hunch Humana Inc. employees were not among the 1,500 workers who EBRI polled for its study.

Last week, I attended a session at HRE’s Health & Benefits Leadership Conference, led by Humana’s Tim State, who serves as the Louisville, Ky.-based Medicare provider and health insurer’s vice president of human resources. Over the course of that informative hour, State discussed how HR leaders at Humana have embraced the “experience group” research methodology both to gain insight into the unmet health needs of its roughly 52,000 employees and to design a benefits program that helps them better meet those needs.

“It’s only from the associates’ point[s] of view that we can understand their health challenges,” he said. “It’s not about just having a Q&A session. It’s about having a real conversation around employees’ experience[s] with health benefits.”

Humana’s experience groups, according to State, typically consist of five to eight employees, who, along with a facilitator from the Humana HR function, convene for 60 to 90 minutes in an effort “to get across the idea that [our employees are] the experts [on their lives and health needs]. The facilitator really just kind of gets out of the way.”

Topics include obstacles that employees face on the path to better health, and, together, these experience groups and the HR team brainstorm ways to clear these hurdles.

What State and his colleagues in HR have heard from these experience groups has certainly been instructive, he said.

One employee, for instance, mentioned in a group session that work is actually “one of the biggest challenges to my health,” citing the combination of daily job-related stress and the often-sedentary lifestyle of the office employee.

Meanwhile, another female employee pointed out that the office dress code deterred her from walking more while at work, noting that going up a few flights of stairs isn’t always so easy in a pencil skirt.

State and his colleagues in HR have taken action in response to such comments, changing dress codes and introducing benefits that encourage prevention and provide more chronic-condition support, for instance.

Such adjustments—even small ones—have reaped almost immediate rewards, said State, adding that Humana’s experience groups have only been meeting for approximately 12 months.

For example, the organization has seen a 21-percent jump in employees’ use of preventive services offered by the company and has seen medication adherence increase by more than 10 percent. In addition, four out of 10 Humana employees report that they’ve improved their health by cutting down on physically risky behaviors, said State.

Making such changes has given employee engagement a boost as well, with Humana ranking in the top 10th percentile of the IBM Kenexa WorldNorms database for “world-class associate engagement” for the past four years, he added.

Such results—which have been realized in the space of one year— should be heartening for HR leaders at other large companies as well, said State.

“[Humana] is a Fortune 100, 50,000-plus employee organization,” he said. “Change can happen in an organization that size.”

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Using Data to Drive Health Outcomes

Given the hour (8 a.m.) and the setting (the Aria Resort & Casino in Las Vegas), Ronald Leopold, M.D., wasn’t so sure that the time was ideal this morning for a talk centered on getting the most out of employee-healthcare data.

Nevertheless, Leopold—the national practice leader of health outcomes at Willis Towers Watson—soldiered on in the opening session of Human Resource Executive’s Health and Benefits Leadership Conference’s second day, delivering a lively presentation that focused on harnessing healthcare-claims data to better control coverage costs.

In “Doing the Math: Data-Driven Health Outcome Strategies for Employers,” Leopold first asked attendees to rate, by a show of hands, their comfort with data analytics on a scale of 1 to 5, with 1 being the lowest and 5 the highest.

While a scattering of audience members indicated the highest level of comfort with data analytics, and a few ranked themselves as “4s,” the clear majority considered themselves to be “3”s—“not bad, but leaving some room to improve,” noted Leopold.

His goal at that moment, he said, was to help attendees better understand available data “to make the best [benefits] decisions on behalf of their employees.”

In 2016, “we are poised for a new era,” said Leopold, “where we see healthcare costs starting to trend slightly upward.”

For employers, being ready for this uptick entails making efforts to lower employee health risks—implementing effective wellness programs and making plan-design changes that encourage employees to become more responsible for their healthcare, for example—and, in turn, lower healthcare costs.

Leopold urged attendees to “demand the story” beyond typical metrics such as average employee hospital stays and number of employees with a given disease or condition, for instance.

This type of descriptive data “doesn’t always give us a lot,” said Leopold.

“Go deeper, and get diagnostic data to find out why” these numbers are what they are, “and do predictive analysis as well.

“Look at data and use algorithms—which you in HR may not have, but carriers will have, and some consultants will have, and data aggregators will have—to determine [your population’s] health risks,” he continued.

“This,” said Leopold, “is practicing predictive analytics. Then we can see what’s likely to happen in the future … and we’ll get better results.”

 

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… But What About Gen X Workers?

What will we do as the baby boomers retire en masse, and take their decades of knowledge and experience with them? And these millennials, who many projections say will soon make up nearly three-quarters of the U.S. workforce—how do we harness their considerable abilities and put them to the best use within our organization?

Organizations everywhere have wrestled with the questions and challenges surrounding these unique groups of workers in recent years.

But there’s another, large group of employees in the middle that may not receive as much attention. Some new research, however, suggests that employers would be wise to focus more on Generation X and the many assets this dedicated cohort can bring to the workplace.

As a card-carrying member of Gen X, I absolutely remember a time when we were mostly thought of as a pretty apathetic bunch with no real work ethic. (Not that we cared about these perceptions or felt like expending any effort trying to change them.) But this new survey, conducted by the Futurestep division of Korn Ferry, finds that Gen Xers—defined in the study as those born between 1965 1980—are actually the most engaged employees in today’s workforce.

Indeed, 52 percent of the 1,070 executives responding to the recent global poll said as much, compared to 23 percent saying they see boomers as the most invested in their jobs, and another 23 percent feeling the same way about Gen Y workers. (The remaining 2 percent felt those fresh-faced, barely-out-of-their teens comprising Generation Z are the most engaged.)

“While members of each generation are critical to the workforce and their diversity of thought brings new ideas and insights to companies, organizational leaders would benefit by harnessing and rewarding the hard work habits of Gen Xers,” says Andrea Wolf, Futurestep’s North American HR practice leader, in a recent statement announcing the findings.

So, what can employers offer to attract these hard workers and provide the perks that make them want to stay?

According to the survey, feeling they have “the ability to make a difference in the organization” was most important to 39 percent of Gen X-age employees in the workplace. That figure is more than double the number of respondents citing “job stability” (16 percent) or “development opportunities” (15 percent) as what matters most to these workers.

In terms of retention, 41 percent of respondents said experiencing “a sense of pride in their work” was what kept Gen Xers in their current jobs, with 24 percent most valuing “financial stability” and 23 percent prizing “company culture” above all else.

And what kind of benefits get those notoriously indifferent Gen Xers revved up about their jobs? Money helps, of course, with 48 percent of respondents pointing to “pay and bonuses” as the most important benefit to employees in this age group, followed by “paid time off,” at 25 percent, and “retirement plans,” at 19 percent.

While Gen Xers might say they want time off, don’t count on them to take it, says Wolf.

“Talk to a Gen Xer about his or her vacation, and they’ll say they’re too busy to take one, or they had to cut it short because of work,” she says. “Employers may want to consider rewards other than extended vacation time to attract and retain this group.”

Too busy at work to take vacation? Thinking about retirement? Wow, there was a time when we were too busy slacking off and obsessing over Seinfeld to even look for a job or consider our financial futures. Gen X has really come a long way.

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Is the Tide Turning on Retirement-Readiness?

There appears to be a shift away from what, heretofore, have been dismal findings on Americans’ retirement preparations. You’ve heard them. You’ve read them. And we’ve certainly written about 505511380 -- retirementthem, all the stories positing the harsh reality that many people nearing retirement in today’s workforce can’t see themselves ever affording it.

Enter a recent piece in USA Today suggesting “Americans are finally doing something right when it comes to saving for retirement.” It cites a report from Fidelity, based on a poll of 4,650 people, showing more households are on track to cover essential expenses in retirement today than in 2013.

To conduct its research, Fidelity issued each household a score based on how well they’ll be able to cover basic expenses — food, shelter, healthcare — in retirement. The number of households that scored an 81 or above, meaning they can cover at least the basics, increased to 45 percent, up from 38 percent in 2013, the last year Fidelity conducted the study.

At the same time, the number of households that need to make adjustments to retirement plans in order to have enough money saved decreased to 32 percent from 43 percent in 2013.

As John Sweeney, executive vice president of retirement and investment strategies at Fidelity, says in the story, “[p]eople are becoming more aware of the fact that they need to take control of their own retirement, and they need to save more.”

Bert Doerhoff, CPA and founder of Jefferson City, MO-based Aura Wealth Advisors, cautions in this more recent piece about the study that we shouldn’t overlook the fact that one-third of Americans are still failing to prepare for retirement. So don’t start throwing confetti just yet.

As that piece states:

“Many factors contribute to the increased savings rates for retirement, including an improved economy and Americans becoming more aware of the importance of saving for retirement. Many investors are becoming increasingly educated about the individual nature of saving; it is up to each individual to secure their future.

“Doerhoff notes that getting started early is one of the keys of careful retirement planning: ‘Starting too late in life means you have to do most of the saving rather than letting your money have time to work for you and grow while you work.’ Doerhoff also mentions another reason why it is critical to save money early in a career: [A]n unexpected health problem could move an investor into retirement long before planned.

“Doerhoff adds that even during times of market fluctuations, [investors should be encouraged] to observe the basic tenets of successful retirement planning, such as starting early and investing for the long term. ‘A market downturn, like the one in early January 2016, can spook investors and cause them to move money that really should be left alone to recover from the volatility,’ he says.”

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CFOs Not Just Focused on Numbers

You might think that controlling costs is the primary concern of the nation’s chief financial officers when it comes to health benefits, but a new survey from the Integrated Benefits Institute reveals otherwise.

HCSC Social-179275875The survey, which polled 345 CFOs and other senior finance executives at some of the largest U.S. companies, shows that while cost management is a major concern, other goals also rank high — including using health benefits to attract and keep top performers and helping employees better manage their health. The survey also illustrates the big impact the Affordable Care Act has had on corporate health benefits.

Nearly half (44 percent) of the respondents cited controlling costs as the most important of their company’s top five goals for health and related benefits. However, almost as many (36 percent) selected other goals as the most important, including attracting, retaining and satisfying talent (15 percent), helping employees become better healthcare consumers (10 percent), helping enrollees become healthier (9 percent), and improving workforce productivity (2 percent).

The survey found that 24 percent of CFOs said the finance function’s role in benefits decision-making has expanded since the ACA’s passage, compared to only 5 percent who said it has shrunk since then. Cost-sharing is also on the rise since the ACA: About half the CFOs said their company is increasing its offerings of high-deductible healthcare plans for employees and their dependents and raising premium shares and out-of-pocket expenses.

The ACA has also spurred more companies to up their wellness game: More than half the CFOs said their company has enhanced its health and well-being programs since the law was enacted and more than one-third enhanced incentives for adopting healthy lifestyles and wellness-program participation.

Interestingly, CFOs who said their companies place great importance on attracting and retaining talent and improving productivity said their organizations were less likely to shift healthcare costs to employees.

The survey results demonstrate that CFOs understand the importance of health-management strategies, says IBI President Dr. Thomas Parry:

These findings go against the popular notion that CFOs demand a hard ROI from health promotion programs, and that companies are scrambling for the cheapest options. If we want to understand where companies are going with health benefits, we need to think of them within the context of business strategies beyond cutting costs.

Parry and two CFO panelists will discuss the role of health and benefits at the upcoming Health & Benefits Leadership Conference on April 1 in Las Vegas.

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What Caused the Shake-Up at Zenefits?

The news broke earlier this morning that Zenefits CEO Parker Conrad has exited the web-based benefits and payroll provider, and COO David Sacks is taking over his role. Conrad is also stepping down as a director of the company, according to a news release by the company.

(The company also named three new directors to its board this morning: Valor Equity Partners managing partner Antonio Gracias; TPG managing partner Bill McGlashan; and PayPal co-founder Peter Thiel.)

Compliance issues that have plagued the company apparently contributed to Conrad’s exit. Zenefits has also hit significant snags, including missing revenue targets and also in its dealings with regulators, according to numerous reports.

One of the most-often quoted lines of the day came directly from a memo by Sacks that was sent to all Zenefits employees, explaining the reasons for the change in leadership:

The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, Parker has resigned.

The company has been on HRE‘s radar for a few years now, starting with our HR Technology Columnist Bill Kutik, who first wrote about Zenefits back in November 2014, and included this interesting quote from the now-sacked Conrad:

[Conrad] Parker started Zenefits with one purpose in mind: “solving all the little headaches and annoyances that sucked up time for me at my last start-up; I get a perverse pleasure from stamping out each of these problems, one by one, for the next guy.”

Another HRE columnist, Steve Boese, wrote a short profile of the company and included Zenefits in the “Awesome New Technology”  session at the  2014 HR Technology®  Conference and Exposition:

Zenefits has the potential, in many ways, to significantly alter the way in which enterprise HR software is purchased and implemented.

Only time will tell whether today’s shake-up will help Zenefits unlock that potential that many industry experts — including ours — saw in them when they first launched.

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