Posts from — December 2010

For most firms, voluntary benefits are a win-win arrangement. But there can be hidden risks.

On the positive side, voluntary benefits cost employers next to nothing, yet boost employees’ morale and benefits satisfaction.  An Aon survey found 77 percent of organizations offer at least one voluntary benefit.

But what happens when there’s a legal dispute between one or more of your staff members and the vendor?

In many cases, companys unwittingly get dragged into court.  The vendor may argue that the plan is covered by ERISA, and the employee’s lawsuit should instead be filed against his or her company.

When the court agrees, the legal burden shifts.  Some courts have ruled that a voluntary benefits may  be covered under ERISA, even if it wasn’t an employer’s intention to formally “sponsor” the plan.

When push comes to shove, the providers will protect themselves. Indeed, some attorneys warn that a voluntary plan insurer’s first move when sued by one of your workforce will be to attempt to get the legal burden shifted from itself to you.

Two seemingly innocent things that can be turned against you in court -

o  The written announcement to tell staff about the new voluntary benefit, and

o  getting involved when there’s a dispute between an employee and the plan vendor.

Be cautious with announcements When you offer a new voluntary benefit, the natural tendency is to try to get workforce pumped up to participate. But you are able to get in trouble if people  get the impression the firm endorses the plan. Helpful practices -

o  Don’t put the announcement on organizational letterhead

o  Put a disclaimer on the description

o   either exclude your voluntary offerings from employees’ benefits manuals or list them separately, and

o  hold open enrollment at a different time than for ERISA plans (401(k), primary health plan, etc.).

Likewise, when the vendor offering the voluntary plan has competitors, you might want to remind personnel the vendor of the voluntary plan isn’t the only game in town. Some firms pass along lists of competing vendors.

Avoid involvement in disputes as with your ERISA plans, chances are staff members will come to you when they have a problem with a voluntary plan. Your first inclination is to help.

But many experts warn it’s better to stay out. Reason –  Courts see this as the action of a plan sponsor. But you can steer someone in the right direction (e.g., giving a contact name to call) while remaining neutral in the dispute.

Good intentions gone bad

From an ERISA standpoint, the most perilous voluntary plan design is one that is partially compensated by the organization, even when workers pay the bulk of the cost.

In a major ruling a few years ago (Burgess v. Cigna Life Insurance), a U.S.  district court ruled against an corporation with a voluntary supplemental disability plan in which the firm paid a portion of premiums for its lower-paid personnel.

While most employees paid the entire premium â.” and firm made clear to people  the plan was a voluntary benefit â.”the court said it didn’t matter.  The act of contributing to some employees’ premiums made it an ERISA plan.

In the last few years, “presenteeism” has become an even larger concern for a lot of employers than absenteeism. Although many HR/benefits managers hate the admittedly overused term, presenteeism is nonetheless a real issue in almost every worksite.

Most commonly,  presenteeism takes the form of staff coming to work sick. They’re  unproductive and endanger colleagues. Meanwhile, the employee isn’t forced to use a sick day. A bad deal for employers all the way around.

A recent survey by LifeCare revealed that 93% of staff members (polled from 1,500 corporations) admit that they at least ocassionally come to work when they’re sick enough to stay home. More important, the study  looked at the reasons why folks do it.

Troubling rationales

The No. 1 reason personnel cited for coming to work sick was a belief that they’d be “letting other people  down” when they call out. Nearly 30 percent of respondents cited this as their primary reason. Beyond that, the top responses were -

o  It’s too risky, because of office politics or culture, to take time off (26%)

o  The worker is too busy at work to be able to stay home a day (15%)

o  The staff member saves up sick days for childcare/eldercare emergencies (12%), and

o  The employee saves up sick days to use as additional vacation time (8%).

A lot of of these rationales are troubling to HR/benefits managers.

In the first place, supervisors who hassle staff members about taking legitimate sick leave are, at best, being pennywise and poundfoolish.  Presenteeism costs more than absenteeism, once you figure in the uncharged sick days, lack of productivity and risk of other staff members getting sick.

You have more power than you think to change your corporation culture if the “tough it out” mentality still applies to individuals  who come in sick. When executive management is confronted with the real dollars and cents of presenteeism, decreasing the problem usually becomes a priority.  At the very least, firms shouldn’t invite it.

In terms of supervisor- and employee-education, repetition of the “stay home if you’re sick” message is the key. Eventually, it’ll sink in.

Of course, there’s still the problem â.” as evidenced by the survey â.” of staff members who misuse their sick days by trying to hoard them for other purposes.

Adopting PTO, no-fault absence policies or use-it-lose-it sick time are the three most common ways of decling the risk, but be aware that each of these policies have risks of their own.

At the end of the day, the more open the lines of communication are between upper-level management and workforce, the less prevalent the presenteeism problem becomes.

In many segments of society, we  hear about ethnic and racial profiling in negative ways. But what about when it comes to wellness programs?

When used for the specific purpose of starting â.” or investigating  â.” a wellness or disease management (DM) program, profiling isn’t just legal. It’s also encouraged.

Affects health risks

Different racial and ethnic groups tend to be more at risk â.” for genetic and/or cultural reasons â.” of certain medical problems. Examples -

o  African-American, Latino, Native American and Pacific Islanders are  at higher risk of diabetes than Caucasian employees

o  Chinese women are statistically twice as likely to get cervical cancer

o  Caucasians have disproportionately high rates of obesity and high blood pressure, and

o  Latinos have higher rates of asthma and chronic obstructive pulmonary illness than other groups.  The HIV/AIDS population is also disproportionately Hispanic.

Bottom line –  By investigating  the ethnic breakdown of your employee population, you are able to set disease management (DM) program priorities with greater confidence and accuracy.

Healthcare quality an issue

Several studies also show there’s an unfortunate relationship between ethnicity and quality of health care. Many times, minority workforce receive inferior treatment and health education at the same facilities where others receive top-notch care.

This usually happens for innocent reasons. A common scenario –  a lack  of Spanish-speaking doctors in the network for your Latino staff. But the result is usually higher health care costs for you and, often,  greater reluctance among minority staff to seek needed treatments.

By profiling workers against the physicians in the network, you ultimately help workers get the care they need and the corporation to better control long-term costs.

Nearly two-thirds of companies with wellness programs offer personnel incentives â.” financial or otherwise â.” to participate.

But only one firm in five has seen major betterment in employees’ health status (and lower costs) within two years of launching the incentive. Here are three keys to getting good results â.” and a red flag for failure.

Cancer screenings pay off big

Most health promotion programs feature health-risk assessments for things like high cholesterol and diabetes. But many overlook the need for early detection of cancer, which could affect any employee, regardless of his or her age or general health.

In many cases, you can line up certain screenings, like skin cancer detection (the most common kind of cancer and, in its early stages, the most easily treated) for free or at a nominal cost.

These resources are often available through community agencies or the American Cancer Society. More involved and expensive screenings â.” like mammograms â.” are well worth the cost.

A single case of cancer identified early generally saves thousands of dollars in medical claims and disability costs â.” not to mention trauma for the employee.

Smart staff member wellness incentives

Medical Insurance Portability and Accountability Act (HIPAA) has tricky non-discrimination rules for offering staff members a break on premiums or copays. You needn’t worry about health insurance portability and accountability act (HIPAA) when you -

1. Structure the wellness program as a cost-break for employees who embrace wellness. on the flip side, imposing surcharges for uncooperative employees can force you to jump through health insurance portability and accountability act (HIPAA) hoops.

2. Make the incentive available to all workers. for  instance, if you offer a discount to non-smokers, an employee who recently quit smoking must also be eligible.

3. Allow workforce who fail to earn the incentive to have another shot at it next plan year.

Bottom line –  Make the financial incentive a reward, not a punishment. Do the incentives work? If they’re done right, yes.

Firms offering monetary rewards for wellness normally save about $20 to $50 a month, according to some estimates.

Making wellness programs simple

A lot of firms require staff members to work with a personal “wellness Coach” to earn premium discounts or other incentives. Normally, the worker sets up appointments and reports to the wellness coach on a regular basis, either by phone or in individuals.

The good news –  the early results are often stimulating.

The bad news –  Once personnel realize there’s ongoing effort involved, many lose interest. But many firms have found a simple alternative. Rather than having participants contact the wellness Coach, the wellness coach calls them.

In many cases, this minor health promotion program tweak keep folks on the right track and cuts dropout rates.

Wellness begins upstairs

No matter how much money your corporation spends on wellness, the odds of success depend largely on the example set by top management.

Example – When your CEO is a smoker, chances are few workforce will purchase into a use of tobacco cessation program.

Likewise, it’s hard to sell workforce on subsidized gym memberships when your company culture is sedentary. for wellness to work, the top brass must practice what the firm preaches.

Are your healthcare programs delivering on your vendors’ promises?

Just as importantly, how can you hold providers accountable when you’re not getting what you compensated for?

Here’s one proven way – Develop a provider scorecard. Scorecards alone won’t bring down your health care costs. But they’ll at least help be sure your business â.” and employees â.” get everything you’re paying for.

The tool can help you measure plan performance with greater precision â.” and identify specific areas that need improvement. Best of all, any organization can adopt the technique to fit their needs. Here’s how it works.

1. Select specific rating areas

Benefit pros who’ve successfully adopted the scorecard system recommend grading vendors on five to 10 measurable areas, like -

o  Claims processing. Are employees’ medical claims turned around in a timely fashion? Are you hearing complaints that the explanations of benefits (EOBs) are slow to arrive or hard to understand?

o  Disputed and resolved claims. Do worker questions and complaints about denied or still-pending claims get answered quickly and thoroughly? How often are you forced to go to bat for employees?

o  Accessibility. Are plan reps quick to answer phone calls? Do they attend regularly scheduled meetings?

o  Reports. Do you receive timely paid claim and utilization reports?

o  Open enrollment. Did you receive effective support preparing for and conducting open enrollment events?

o  Staff Member education. Do your workforce find the written and/or one-on-one services provided through the plan helpful in answering questions about managing specific chronic illnesss (like diabetes or depression)? Do you receive support in educating your workforce to make healthy lifestyle options, like use of tobacco cessation?

2. Pick a workable rating scale

There are two schools of thought when it comes to picking  a rating method –  subjective or objective. A lot of benefit pros â.” specifically those from smaller firms â.” use a simple pass/fail or 1 to 5 score to rate their satisfaction.

Others create more elaborate, statistic-based ratings. One method –  take the provider’s guarantees (e.g., addressing disputed claims within 3-5 organization days) and then measure by percentage how often these goals are met.

These rating data could be acquired through quarterly performance reports, employee surveys, issue and complaint files and, for larger plans, external audits.

3. Feedback triggers improvement

It’s good practice to share your scorecard system with the vendor before meeting to review the results. Reason –  This lets you iron out any vendor questions about the review categories and scoring system.

Once that’s settled, you can meet to go over the numbers and prioritize the areas that need improvement. A lot of firms then add a new scorecard category â.” vendors’ followup.

At the end of the day, is it worthwhile to ban tobacco use on the premises at your business?

It depends on the steps you take to support workforce trying to kick the habit, finds a recent research study .  The Journal of Tobacco Policy and Research found that smokers do, indeed  take more sick days than their non-use of tobacco peers.

And even when the smoker is in relatively good overall health (i.e., isn’t obese, doesn’t have chronic health conditions), he or she’s still likely to have higher health costs than a comparable non-smoker over the last three years.

Precisely how does a tobacco use ban fit into the cost equation? If the smoker quits, medical costs even out.

But when the individuals only refrains from smoking on the job â.” but continues puffing away at home â.” the corporation sees little to no health cost decrease.  The research study  found similar patterns for absenteeism.

Bottom line –  A workplace smoking ban in combo with a smoking cessation program gets results. A smoking ban alone typically doesn’t.

In the last few years, there’s been a rising trend for public employers â.” not just private organizations â.” to ban smoking. Here is what your colleagues are doing.

What’s New in Benefits and Compensation lately surveyed 374 of our readers from both the private and public sectors to determine their organization’s policy on allowing personnel to smoke on-site and hiring smokers in the first place. Here is what we found -

o  11 percent have developed a policy of hiring only non-smokers

o  17% allow personnel to smoke offsite, but ban it on all company property

o  39% restrict smoking to designated areas outside the building

o  30% allow use of tobacco anywhere outside the building, and

o   3 percent allow use of tobacco in break rooms or other indoor areas.

Public employers get aggressive

While much of the publicity about no-hire policies for smokers centers on private organizations, it’s actually public businesss in certain states who have been the most aggressive of late.

For  instance, Florida is one of the states at the forefront of the movement. Sarasota County recently became  the third Florida county to take a no-hire stance in order to control healthcare costs.

New hires must take a drug test that detects nicotine and sign a pledge certifying that they haven’t smoked in the past 12 months.

The ban won’t affect current workers, but the county has undertaken tobacco use cessation programs aimed at employees’ wallets.

Non-smokers pay less for coverage through various incentives and the county covers the cost of participating in tobacco use cessation programs.

The reason why Florida public corporations can easily take these steps –  the state supreme Supreme Court has ruled that refusing to hire smokers does not break discrimination laws.

But your state laws may vary, so proceed with caution before considering similar policies.

Quitting tobacco use at any age can improve a person’s health.  And believe it or not, older staff members often fair better with tobacco use cessation than younger employees.

According to the Journal of American Medicine, Duke University reseearchers tracked 573 older patients over 10 years. They found that just 16 percent of those who joined the tobacco use cessation program later returned to tobacco use.

Previous research has found young smokers who try to quit have a 35% to 45% relapse rate within two years.

Given that workforce nationwide are retiring later and the cost of retiree healthcare is sky high, you might want to keep trying with smoking cessation programs, even for the oldest workforce on your health plan.

In this recession economy and out-of-control employee debt, many businesss who don’t have automatic 401(k) enrollment have seen participation drop.

Here’s how one small business in Arizona cleverly tied 401(k) education to employees’ other financial concerns. Rather than simply holding its usual 401(k) open enrollment education meeting, it held a “financial health fair.”

Stressed 401(k) importance

Precisely how it worked –  on the same day the company’s 401(k) vendor sent a plan rep to discuss the retirement plan, the business also arranged for a certified financial planner to speak to staff members.

The financial planner went first. She began the session by pointing out that she wasn’t affiliated in any way with the management of the 401(k) plan.

That was crucial both for the company’s legal protection under ERISA and for building trust with staff members. She then discussed why it’s crucial for individuals  to take part in the 401(k) plan, and offered attendees budgeting tips and basic strategies for cutting their debt.

The financial planner’s talk cut to the heart of several major issues that hurt both worker salary satisfaction and 401(k) participation. Numerous studies show that the No. 1 reason many people  avoid 401(k) participation is that they feel they can’t sacrifice any part of their entire paycheck and still survive financially.

The second part of the session was the standard 401(k) enrollment presentation from the vendor. End result – Employees were more attentive and there was a noticeable uptick in both new 401(k) enrollments and salary contributions from already-enrolled employees.

The event was such a smash that the corporation plans to make the Financial Health Fair a regular part of 401(k) enrollment. While the financial planning advice is generic (the corporation may add third-party personal finance planning as a voluntary benefit in the future), it’s also timely.

The 401(k) signup appeal comes while the financial planning tips are still fresh in employees’ minds and they’re motivated to do something to help themselves.

Looking for incentives to get overweight employees to buy into a health promotion program? A recent published study  suggests many employees are even willing to pay much â.” or all â.” of the cost themselves.

Roughly 35% of firms with wellness programs focus on providing staff members with convenient access to weight reduction resources.

A poll of 1,352 personnel by the Strategies to Overcome and Prevent Obesity Alliance found that many individuals  would gladly chip in for the cost of the health promotion program when they believed it’d help them lose weight. What personnel want -

o  confidential support and counseling

o  Access to a specialist nutritionist or fitness trainer, and

o  on-site fitness plans.

Until lately, only large companies were able offer such health promotion programs as part of their wellness benefits.   But the fastest growth of these health promotion programs in the last two years has been in smaller firms (sometimes with as few as 50 full-time employees).

The majority of firms split the cost with staff members. Ordinarily, staff members pay up to about 25 percent of the cost. But some plans are fully employee paid.