Employee wellness plans and employee wellness programs

A lot of firms are still missing an opportunity to trim some medical plan expenses.

Generic versions of high-cholesterol drug Zocor have been on market for two years now, but a fair share of corporation drug store plans have yet to make the switch.

If your PBM gives generic Zocor favored status on the formulary, now’s a good time to remind employees -

o  most people  on cholesterol-control meds will get the same therapeutic value from generic Zocor as from the label brand and the more potent â.” and still patented â.” Lipitor

o   they are able to save $10 to $50 (or more, depending on your drug plan design) on their co-pay by switching, but

o   they ought to ask their physician first. Individuals  with cholesterol levels over 200 and/or family histories of  ultra-high cholesterol could  be better off staying on Lipitor.

Reason –  It takes four times the amount of a Zocor-type medication  to equal one dose of Lipitor.

When it comes to health-coverage laws, there’s often a domino effect.

As individual states require insurers â.” and in some cases, businesss â.” to cover or offer coverage of specific people  and procedures, similar laws can spread rapidly to other states.

The effect on plan sponsors –  Some mandates can increase your costs by 20 percent to 45 percent.

Small firms targeted, too

States are no longer targeting  just the Wal-Marts and other giant companies anymore.  The pressure has increased on corporations of all sizes.

That’s specifically true for the new “universal coverage” laws passed in Massachusetts and Vermont.

The Massachusetts law requires every firm with 11 or more staff members either to cover or contribute toward everybody’s health coverage, or else pay an annual fee of $295 per worker to a state fund.

Vermont’s similar version sets the annually fee at $365 per full-time equivalent worker.  The Vermont law also requires all uninsured, low-income hourly employees to have access to a state-subsidized plan (called Catamount Health) sold through private insurance corporations.

It’s up to corporations to deduct the monthly premiums â.” $60 to $135, depending on the person’s wages â.” and send it to the state.

There are rumblings in at least 10 states about lawmakers pushing for universal-coverage laws. Several have formed committees to study the Massachusetts law and see if a version may be adjusted to their state.

Here are three proactive steps to consider now. These could potentially save money, time and compliance headaches later -

o  look into offering mini-med or similar lower-cost programs to satisfy minimum coverage requirements for uninsured staff. Monthly premiums range from about $25 to $200

o  educate low-income staff about the earned income-tax (EIT) credit the federal government offers. This may make a mini-med plan free or almost free to eligible staff, and

o  use flexible spending accounts to develop a tax savings on premiums for other workforce and your firm.

Required procedures

The universal-coverage laws draw national headlines, but far more employers are currently affected by state laws requiring coverage for certain kinds of procedures. Three of the biggies -

o  diabetes self-management. Nineteen states require your medical plan to cover all the steps staff with diabetes take to control their condition, including nutritional therapy (if prescribed by a physician)

o  in vitro fertilization. This large ticket service adds 3% to 5% to your premiums, and is now a required benefit in 15 states, and

o  cervical cancer screenings. In the last year, four more states have required all company plans to cover annually cervical cancer screenings for all covered female staff members, spouses and dependents age 18 and older. That brings the sum to 24 states.

The good news about the diabetes management and cervical cancer mandates is they can decrease your  long-term costs, even if they increase them in the short-term.

Here’s a good resource  for keeping abreast of mandatory coverage trends around the United States.  The site also features  state-by-state breakdowns of changes in insurance laws  mandating the coverage of different treatments and conditions.

For example, this report from 2006 is the most extensive coverage-mandate study that I’ve ever seen.

Who worries more about medical costs –  lower-paid or higher paid employees?

Answer –  Both groups worry equally about their out-of-pocket healthcare costs, as reported by a PNC Services Group survey of 1,485 workforce. Almost 52% of all respondents â.” regardless of income â.”cited the unpredictability of healthcare expenditures as their No. 1 financial-planning concern.

Other common financial-planning fears that affect staff of all salary levels -

o  eldercare. Over half the respondents with children were afraid their offspring may be forced to pay for the parents’ long-term care, and

o  financial stability. 47% of mid- to high-salary staff said they were concerned about sustaining or increasing wealth.

It could be easier than you think to eliminate a major reason workers sue.

How? Well, roughly 75 percent of employee lawsuits happen because of accidental disconnects between an company’s internal policies and procedures, and what’s written in the plan documents.

Here are two areas where some the costliest errors lurk, and three steps your fim can take to catch and correct the mistakes before you’re ever sued.

1. Policy/coverage discrepancies

A lot of firms’ written benefits policies and plan documents are like siblings who start to drift apart as they grow up.

In the benefits realm, notwithstanding, the plan sponsor has the “parental” power â.” and legal responsibility â.” to be certain written policies and plan documents remain close as they grow and change.

As a routine practice, firms should make certain changes in their benefits policies are also written into the formal plan documents, as reported by benefits attorney William Wright.

If push comes to shove in court, any inconsistency with plan documents can prove fatal for the company. Example – Executive management passes a new rule that workforce must work 30 hours a week to be eligible for the health plan.

Benefits and HR then write the new coverage policy into employees’ benefits  handbooks and hold meetings with staff members to explain the change.

Now suppose an staff member drops to part-time status. Are you legally protected when the staff member challenges the loss of benefits?

Not necessarily. for the policy in  the handbook to stand up in court, the plan documents must also say there’s a 30-hour-a-week eligibility requirement.

Same thing goes for disputes over run-out coverage.  Suppose it’s your firm’s policy to carry over coverage for a cancelled employee during the COBRA election period, but the requirement was never written into the plan document.

A few weeks later, the staff member has a major health claim.  The TPA denies it, saying coverage had expired. Reason –  the plan document says “active employees” are covered, but does not specify that the insurer pay claims until the end of the month.

The likely result –  the ex-employee sues, saying the business is liable for the mistake.

2. Coordination of benefits

Watch out for cases where an employee’s claim might  be covered under two or more policies (e.g., your firm’s plan and one from a spouse’s company).

Be certain there’s a clear-cut coordination-of-benefits policy in all of your plan documents. Usually, when a plan contains no instructions for coordination of benefits, it’s expected to pay first. Two key areas to check -

1. Be certain there’s a statement that says only the amount actually paid by each plan are going to be charged against the maximum benefit, and

2. Make sure that the order of benefits determination spells out which plan pays first for a covered child when the employee is divorced from his or her spouse.

Similarly, if your firm offers domestic partner coverage, make certain there’s a coordination-of-benefits statement for dependent and non-dependent partners.

Three best practices

On an ongoing basis, you are able to cut your lawsuit risk by 75% if you -

o  gather all materials related to specific plans into a binder, including renewal letters from vendors and materials distributed to employees

o  perform a annually self-audit, checking to see if plan-document wording matches your current policies, and

o  pay special attention to keeping benefits descriptions up to date.

Reminder – When you don’t have a formal plan document, your contract with the provider legally serves as the “control document” for the plan. By law, all personnel must have access to the plan document and be notified in writing of any alterations, including minor ones.

Nine of 10 HR managers polled by Colonial Life feel that personnel have at least a vague notion that benefits are a valuable part of working at a company.

Nevertheless, the same study found that only 21% of those businesss believed their employees had a strong understanding of the workings of their own benefits.  and 5% believed that their employees didn’t know anything about their benefit choices.

Implication –  the greater emphasis placed on worker education, the more likely staff members understand the role of benefits in sum compensation.

Incorrect billing from health insurance carriers is more common than you could think.  The average plan sponsor can get overcharged by 5 percent a year, according to brokerage and consulting firm Corporate Synergies Group.

Like most corporations, insurance carriers rarely keep perfectly up-to-date records on their clients.  As a result, plan sponsors often get charged for individuals  who shouldn’t be covered on the health plan. Here are two areas to watch -

Claims versus enrollment

It’s common to have terminated workforce still in the carrier’s claims eligibility system â.” even after they’ve been taken off your enrollment list.

Reason – A lot of carriers use separate computer systems for tracking enrollment and claims â.” and the two systems use different technologies that don’t “talk” to each another.

Carriers have no incentive to upgrade their systems, as reported by CSG president Eric Raymond, because doing so would cost the insurers money.

Leaving things as is, carriers simply charge patrons when they put through claims for ineligible workforce and dependents.

That’s why an annual claims audit is a must –  That way, you won’t get charged fees for claims the carrier accidentally put through.

Even if your firm outsources the work (it’s a rather time-consuming task when performed in-house), you’ll usually see a few percentage points of savings on your sum healthcare costs.

Dependent eligibility

Poor carrier record-keeping also could be the cause for employees’ ineligible dependents not being taken off the enrollment files.

Few carriers have systems that automatically integrate with your Payroll department and your current enrollment forms (including the electronic “employee self-service” kind). Instead, data entry people  employed by the carriers input the information in the providers’ system.

Human error by the carriers’ staff costs plan sponsors another a few percentage points. Solution –  annual dependent audits.

With the downturn in the economy, it seems like most businesses are shifting their focus when it comes to employee benefits and compensation.  The current situation is also very stressful on benefits managers.

In times like these, it’s vital for coworkers to share their concerns, experiences suggestions. A few weeks ago, HRBenefitsAlert.com ran a special report on calming employees’ 401(k) fears.

The reader comments revealed that many benefits pros were just as afraid as staff, and people ’s frustration led to some unfortunate carping back and forth between several readers.

The purpose of the comments section, apart from giving people  the opportunity to react to the story, is to provide a forum for benefits managers to interact.

It’s my hope that we can generate an exchange ideas that have (and have not) been working at readers’ corporations during the current situation. Namely -

o  What are you doing to manage health benefits costs as budgets are either frozen or shrink?

o  Have you noticed a dip in morale or productivity with all the doom-and-gloom in the news?

o  Precisely how is your organization trying to calm employees’ fears about salary freezes or layoffs, 401(k) losses, health care cost shifting and other issues that get a lot of mainstream media focus?

o  What are you saying to employees to deliver the news they need to know but also keep morale high?

Thank you in advance for your willingness to share your expertise and personal experiences. Everybody benefits in the long run.

Few corporations benchmark their flu programs, a published study  from the Disability Management Employer Coalition locates. But those that do often discover room for improvement.

Almost 80% of employers provide staff members access to flu shots, either on-site or at a local clinic.  And 72% cover some or all of the cost (typically compensating between $10 to $20). But -

o  At 89 percent of firms, fewer than half of workforce actually get a flu shot

o  At 38 percent of businesses, fewer than 25 percent of employees participate

o  only 6% of firms can easily get at least 75% participation

o  87% of survey respondents said  they never measure absenteeism during flu season, and

o  75% never tracked whether workers who get flu shots are actually absent less often.

The firms that get best results are those that actively educate employees, track flu-related absenteeism and send sick employees home.

The fastest-growing use of EAPs since 2002 has been tied to employees’ financial worries.

Over the last five years, there’s been a reported 69% jump in employee employee assistance program use related to personal financial concerns.  The trend is not all that surprising.

Statistics show that, for the first time since the Excellent Depression, the average American has negative savings â.” in other words, debt exceeds income â.” in a average month.

With salaries frozen in many corporations and many workforce racking up higher and higher credit card debt, the problem may continue to get worse.

Troubling trends

Here are some ominous numbers from a recent staff member survey -

o  27% of respondents said they were “one major setback away from financial disaster”

o  22% say they were “worse off than last year, with less take-home income and more debt”

o  40 percent say their corporation is “insensitive to their employees’ financial needs,” and

o  only 6 percent said they felt comfortable with their current financial situation and ability to manage their debts.

The majority of personal-finance related EAP use arises from concerns over debt management, household refinancing and/or failed investments.

The problem of presenteeism â.” staff showing up at work but taking a “mental vacation day” â.” isn’t going away any time soon.

A recent survey found the average worker has three unused vacation days after the year. But 33 percent admit that they sometimes take “unofficial” vacation days of a half-day or more.

Not surprisingly, the day after Thanksgiving, Christmas Eve day and December 26 rank one of the highest “presentee” days among organizations (especially in the white-collar realm) that remain open on those days.

In terms of the broader question of presenteeism, what’s keeping individuals  from using their vacation time as it’s intended?  Top answers -

o  supervisors frown on employees taking vacation time

o  There’s too much work to make up after using vacation time, and

o  people  want to “reserve” time in case of an emergency.

On the flip side, many folks who take vacation time have trouble leaving work behind. One staff member in four admits to checking work e-mail and/or voicemail while on vacation.

And 29 percent say they have trouble forgetting about work-related stress, even when they’re using paid time off.

Among all industrialized nations, U.S. workers receive the fewest annually vacation days â.” 14 on average.