by jeffp | Nov 7, 2014 | Employee Benefits
If you’re worried about the financial burden employer-sponsored health insurance may place on you when the Affordable Care Act’s employer mandate goes into effect, you may be in the process of changing your benefits package to pass more of those costs on to your employees. According to a report published by the International Foundation of Employee Benefit Plans, many employers are accomplishing this by choosing plans with higher out-of-pocket limits, in-network deductibles and copayments or coinsurance, as well as asking their workers to pay a greater percentage of the monthly premium.
Unfortunately, this means you’re exposing your staff—who may already be having trouble making ends meet post-recession—to even greater financial difficulties if they land in the hospital or have to make an unexpected trip to the emergency room. Data from the Health Care Cost Institute shows that the average facility price for a hospital stay was $15,674 in 2011. And the Centers for Disease Control and Prevention (CDC) report that there are 42 emergency room visits per 100 people in the U.S. every year.
How can you help your workers manage these costs while protecting your company’s bottom line? Supplemental hospital indemnity insurance may be the answer. It offers reasonably priced coverage that employees can use to supplement that provided by their medical plan. And because employees usually pay for it, it makes it possible for employers to enhance their benefits packages without incurring additional costs.
Most group hospital indemnity plans come with a choice of flexible options. For example, employers can choose to offer an HSA-compatible plan, a plan that includes outpatient and inpatient surgical benefits, and/or a plan that covers diagnostic procedures. Other options you may select include coverage for daily hospital confinement, intensive care unit confinement, rehabilitation unit confinement, emergency room treatment and wellness. You can also tailor these plans to cover spouses and children as well as employees.
In most cases, hospital indemnity insurance pays a lump sum benefit directly to the insured employee to help cover the cost of hospital stays and other included procedures and treatments. The employee can then use the money to pay for out-of-pocket expenses associated with the hospitalization, or on whatever else he or she may wish. If you’re interested in adding such a plan to your supplemental insurance offerings, experts recommend looking for one that pays a larger upfront benefit upon admission rather than a smaller daily benefit. Depending on the demographics of your workforce, you may also want to choose a plan that provides coverage for childbirth. Most importantly, the coverage should complement the employer-sponsored healthcare plan your company already offers.
If you’d like to learn more about the many group hospital indemnity plans available, or discuss the benefits of adding this voluntary insurance product, contact your benefits advisor today.
by jeffp | Oct 20, 2014 | Employee Benefits
Workplace bullying is a rather surprisingly widespread problem. According to a recent survey by VitalSmarts, a corporate training and leadership development consulting company, 96 percent of American workers have experienced workplace bullying. Among the survey respondents, 89 percent reported bullying incidents that had persisted for more than one year. Fifty-four percent had dealt with the negative actions of a coworker or manager for more than five years.
The most common types of bullying reported in the survey were sabotage of the work or reputation of others (cited by 62 percent of respondents who had experienced bullying) and browbeating, verbal intimidation and threats (52 percent). Only 4 percent of the bullied respondents had dealt with physical intimidation or threats.
Other studies have revealed similar findings. In one, more than 25 percent of the surveyed workers reported that they had experienced abusive conduct at work. In another, 64 percent stated that workplace bullying had physically hurt them, driven them to tears or had a negative effect on their work performance. It’s easy to see why; bullying certainly creates an uncomfortable work environment. This leads to lower productivity and higher turnover—and both cost employers money.
While the development of a workplace anti-bullying policy is necessary, the process can be difficult due to both practical and legal considerations. For example, how do you distinguish malicious bullying from friendly banter or teasing? The National Labor Relations Board (NLRB) has further complicated the matter with challenges to employer workplace bullying policies, generally because they find the language within them to be too broad.
If you’ve yet to address bullying in your workplace, you may choose to expand your existing harassment policy to include it or create a standalone policy. Whichever course you decide to take, make sure you do the following:
- State that your company is committed to promoting a respectful, bully-free workplace.
- Define workplace bullying as clearly as you can and include a statement that shows you are aware of the levels of bullying that may take place (between managers and workers, between coworkers, between clients and workers, etc.).
- Include a detailed list of the types of behavior you will not tolerate under the new policy.
- Describe the procedure for reporting bullying incidents. Because employees may be fearful of bully retaliation, consider an anonymous reporting system.
- Outline the consequences of violating the anti-bullying policy. This includes how you intend to document the disciplinary process and the types of discipline you will enforce.
- Communicate the policy to employees at all levels within your organization.
- Take all complaints of bullying seriously, regardless of whether a legally protected class of worker is involved or not.
The Society for Human Resource Management has a sample policy online that includes a relatively broad definition of workplace bullying coupled with a list of examples of bullying actions. The American Bar Association offers a similar template online as well—and this one includes instructions for reporting workplace-bullying incidents to management.
Enforcing a workplace anti-bullying policy shows you value and respect your employees and will protect their right to a pleasant workplace. For further assistance with its development, contact your benefits advisor and/or legal counsel.
by jeffp | Oct 6, 2014 | Employee Benefits
If you think your senior employees are counting down the days until they can enjoy a life of pure leisure, you may be wrong. A new survey conducted by Merrill Lynch, a financial management and advisory company, found that 72 percent of pre-retirees over the age of 50 plan to work in retirement. Add to these the 47 percent of current retirees who have worked or are planning to work during their golden years and it’s likely that employers who want to take full advantage of this demographic will increasingly need to find ways to engage older workers.
Offer the right benefits and it will be easier to retain senior staff members after they reach retirement age as well as attract senior jobseekers to available positions. Benefits popular with Baby Boomers include:
- Flexible Hours – Flexible schedules are popular with seniors. In fact, in a 2013 survey by AARP, 72 percent cited schedule flexibility as absolutely necessary in their ideal job. If you’re employing seniors who want to work full time, offer them their choice of standard shifts, or consider 10- or 12-hour shifts that reduce the number of days they need to report to the office.
- Part-Time Opportunities – Not all retirees want to work full time. If your business includes part-time positions, senior jobseekers may be eager to fill them. You can also consider reduced schedules that won’t interfere with their ability to collect Social Security, or job-sharing programs that allow two or more seniors to divide up the hours required for one position.
- Mentoring Opportunities – Your older workers are valuable repositories of knowledge. Set up a mentorship program that will enable them to share their expertise with your younger and newer employees. This will show them you appreciate their proficiencies and they are still a valued member of the team.
- Health Insurance Coverage for Part-Time Workers – Medicare doesn’t cover every health expense, and healthcare can take a big bite out of seniors’ retirement savings. Offering health insurance coverage for your part-time workers will make your company more attractive to older applicants.
- Workplace Wellness Program – Studies have shown that exercise and diet can affect the aging process. Provide your workers with a wellness program that includes perks such as nutrition counseling, healthy cafeteria options, gym memberships or onsite workout equipment and you’ll help them keep their bodies and minds healthier for longer.
- Phased Retirement Program – Unlike a tradition retirement program, a phased program is set up to enable older employees to work part-time while drawing a portion of their retirement income, providing them with the equivalent of a full salary and benefits.
- Financial Planning Assistance – Older employees often appreciate the opportunity to obtain the advice of financial planning experts, whether they intend to continue working after retirement because they haven’t saved enough yet or just don’t want to become bored.
- Long-Term Care Insurance – Designed to help older individuals pay for long-term care and support in their home, an assisted living community or nursing home, long-term care insurance is often a popular supplemental product with seniors.
- Legal Assistance – Seniors who have not yet created a will or estate plan will appreciate the opportunity to obtain free or low-cost advice and assistance from a legal professional.
- Concierge Service – From picking up groceries to wrapping holiday presents, some employers are providing their older workers with the assistance of a concierge service to help with personal errands.
According to the Bureau of Labor Statistics, a record 22.2 percent of the U.S. workforce was age 55 or older as of July 2014. By 2020, they expect 29.3 million of the nation’s workers will be between the ages of 55 and 65. It’s easy to see why it’s in your best interest to engage this demographic of employee. If you’d like additional advice on adjusting your benefits package accordingly, contact your benefits advisor
by jeffp | Sep 19, 2014 | Employee Benefits
A successful business and a competitive employee benefits package go hand in hand; you’ll rarely find one without the other. Not only do generous perks attract more job candidates to your company, they also help you minimize employee turnover, improve morale and increase productivity. But don’t stop at paid time off and a 401(k) plan. Consider these voluntary employee benefits you should add today.
Critical Illness/Cancer Insurance – Supplemental critical illness and cancer policies are becoming increasingly popular with American workers. According to LifeHealthPRO, cancer insurance sales increased 2 percent in 2011 over 2010, and sales for critical illness insurance jumped 20 percent. A Hartford study found that Generation Y workers participate in these programs at a higher rate, so they may be a particularly attractive addition to your benefits package if you’re recruiting or employing younger workers.
Accident Insurance – Supplemental accident insurance sales increased 14 percent from 2010 to 2011 according to LifeHealthPRO. With the cost of health insurance under the Affordable Care Act driving many consumers to bronze plans with higher deductibles and out of pocket expenses, accident insurance offers your employees welcome peace of mind should they break a leg skiing or suffer an injury-causing fall at home.
Hospital Indemnity Insurance – If you have a lot of employees with high-deductible bronze-level health insurance coverage, hospital indemnity insurance will help them pay any hospital-related expenses their regular plan does not cover. This can significantly reduce their out of pocket costs for hospital stays, outpatient services and tests such as MRIs and CT scans traditionally performed at hospitals.
Integrated Long-Term Care and Life Insurance – As some carriers have stopped offering standalone long-term care products, others have begun to bundle long-term care and life insurance into one attractive package. The long-term care benefits, which your employees can use for future long-term care, home health care, assisted-living care and adult daycare, are usually bundled with a universal life policy.
Life Insurance and Disability – According to LifeHealthPRO, sales of life insurance increased 1.3 percent in 2011 from 2010. However, according to the Life Insurance and Market Research Association, 56 percent of U.S. households didn’t have an individual life insurance policy in 2010. Employers who offer their workers a supplement life and disability plan have the opportunity to make a real impact on their financial wellbeing.
Dental and Vision – When employers cut back on benefits during the economic downturn, many eliminated the supplemental dental and vision plans they previously offered their employees. However, as consumers’ out of pocket healthcare costs have continued to increase, their desire for these types of benefits has grown. Regardless of their age, your employees are likely to appreciate the opportunity to purchase this type of supplemental coverage again.
Legal insurance – When an employee suffers a personal problem—such as a home foreclosure, bankruptcy or divorce—it can have a negative effect on his or her productivity at work. Some employers are adding supplemental legal insurance to their benefits package to provide their staff with affordable solutions. Coverage varies by plan but generally includes access to a network of attorneys as well as free educational tools and resources.
The unexpected expense of a critical illness, accident, hospitalization, disability or legal difficulty would financially devastate most employees. In fact, according to the most recent MetLife Employee Benefits Trends Study, only 3 percent of workers report having a three-month’s salary cushion of savings to help them through a tough time. Talk to your benefits advisor about adding a few of these supplement insurance products today.
by jeffp | Sep 8, 2014 | Employee Benefits
A required minimum distribution, or RMD, is the minimum amount one must withdraw from an IRA or retirement account each year. RMDs typically kick in after the owner of the account turns 70.5, and if your company offers any sort of employer-sponsored retirement plan (including profit-sharing plans, 401(k) plans, 403(b) plans and 457(b) plans) you could face serious consequences if your 70.5 and up workers fail to meet the RMD requirements.
Consider the following employer RMD responsibilities as well as the steps you should take to protect your invested workers and your plan, from alerting participants who are approaching RMD age to activating the fund withdrawal.
Employers are ultimately responsible for RMDs. Although your employee should make an effort to understand the minimum distribution requirements of the employer-sponsored retirement savings plan, making sure RMDs happen is ultimately your responsibility. You should notify participants age 70.5 or older in advance of the filing deadline each year and, if they fail to file for distribution, you should set the process in motion yourself to protect your company’s retirement savings plan.
Employers must educate their employees. Do your employees know that they’ll pay a 50 percent penalty tax on the distribution amount if they fail to take the RMD? In addition, if they fail to file for their RMD, they will need to submit specific forms to the IRS to amend the situation. While penalty waivers are possible, they require a letter detailing the unforeseen circumstances leading to the error.
Employers face penalties, too. If the employer-sponsored retirement plan fails to distribute an RMD, whether that failure is your employee’s fault or your own, the plan may be subject to consequences such as losing tax-qualified status and elimination of your tax deduction for employer contributions. As soon as you realize you’ve missed a distribution, you must contact the IRS and begin the reconciliation process as outlined by the Employee Plans Compliance Resolution System.
You can correct your mistakes. If you miss an RMD, you can correct your mistake using the IRS’s Self-Correction Program without paying a fee—provided you’ve made an “insignificant operational mistake” or a “significant operational mistake” that you are correcting within the required timeframe outlined by the IRS. You may also choose the Voluntary Correction Program if you prefer written IRS approval of your correction, though the VCP does require payment of a fee.
It’s essential you monitor your employee’s RMDs if you want to ensure your employer-sponsored retirement plan maintains its tax-preferred status. Contact your benefits expert for additional insight on retirement plan RMDs or to discuss benefit administration services you may find helpful.
by jeffp | Aug 26, 2014 | Employee Benefits
If you kept up with the news regarding the Affordable Care Act last year, you likely saw dozens of headlines proclaiming the likelihood that the employer mandate and penalty portion of the President’s signature healthcare law would result in millions of Americans losing their employer-sponsored healthcare coverage. Fortunately, recent data indicates that these dire predictions are unlikely to come to pass—at least in the near future.
A report published by the International Foundation of Employee Benefit Plans, a Wisconsin-based association serving the employee benefits and compensation industry, states that almost 75 percent of employers say they “definitely will” continue to offer their full-time employees group health benefits during the coming plan year. This includes employers with at least 50 full-time employees and more than 100 total employees, the group that must begin providing an ACA compliant health coverage option next year or pay penalties. Employers with at least 50 full-time employees and 50 to 99 total employees must do so in 2016.
The report also stated that ongoing implementation of the ACA has increased the total cost of providing group health benefits by 6.8 percent in 2014. They based this figure on data gathered from 600 U.S. employers of various sizes. To minimize the effect of this increase, many employers have begun to ask participating employees to pay for a greater portion of their healthcare benefits. Ways in which they’ve done so include:
- Increasing the out-of-pocket limits on their chosen healthcare plan. According to the report, these limits have increased 19.6 percent since 2012.
- Increasing their employee’s share of the health insurance premium. Since 2012, employers have asked workers to pay 12.3 percent more of the premium cost.
- Increasing in-network deductibles on their chosen healthcare plan. According to the report, in-network deductibles on employer-sponsored health insurance plans have increased 14.7 percent since 2012.
- Choosing plans with higher copayments or co-insurance for primary care. Since 2012, employers have asked workers to pay 10.9 percent more in primary care copayments and co-insurance.
While the majority is confident that they’ll be able to use these methods to mitigate the rising costs of mandated employer-sponsored coverage in 2015, many are still concerned about the future. Only 55 percent say that it is “very likely” they will continue to offer group health benefits five years from now. And 21 percent predict that the excise tax on high-cost coverage that will take effect in 2018 will have a very costly impact on their business.
Whether you want to explore options for reducing costs while still offering your employees an ACA compliant plan or need to implement this benefit before the 2015 deadline, contact your benefits advisor today.
