How to Build Financial Wellness into a More Holistic Wellness Program

Are you looking for new ways to help your employees increase their financial wellness? Check out this great article by Michelle Clark from SHRM highlighting what HR can do to help employees engage with the company's benefits program to improve their financial situation.

The majority of HR professionals give their employees a financial health rating of “fair” and nearly 20 percent report that their employees are “not at all” financially literate according to a national SHRM survey.

That’s an issue. Because when employees are stressed about money they don’t turn their worry off at work – and the price is paid in lost productivity.

You can help fix the problem. Everyone wins when traditional employee wellness programs are recast in a more holistic, well-rounded way – with financial wellness an important cornerstone.

There is no cookie cutter solution. But if you build a customized program that’s responsive to specific requirements and comfort levels of different employee groups, it can be rewarding and valuable.

First, review your employee demographics to get an idea of what their financial situations may look like. For example, it’s understood that the majority of today’s workforce is comprised of three age groups: Baby Boomers, Generation X and Millennials. Each has different financial stressors and preferences on how they prefer to receive assistance:

  • Boomers on the verge of retirement are wondering if they can afford it or even want to retire. If they need to work, they are worried they’ll have a hard time finding a job.
  • Generation X can barely think about retirement planning when they’re trying to cover the mortgage, raise kids, save money for college and shoulder responsibilities for aging parents.
  • Millennials are burdened by student loan debt while trying to stretch their paychecks so they can live on their own instead of with their parents.

There also are vastly different ways each accesses support. Boomers may be okay with online resources and one-on-one coaching. But Millennials and Gen Xers may want more high-tech resources such as websites offering basic money courses and worksheets to help with budgets, housing or investment planning.

Once a solution has been established, the next step is getting people to partake. You don’t want to target employees, since privacy is a major consideration. Offering options allows employees to engage privately on their own terms. That’s why the online solutions are ideal for individual financial issues, offered in tandem with more on-site sessions on general concerns. And there’s always the potential of offering one-on-one financial counseling or financial wellness coaches to round out your program.

See the original article Here.

Source:

Clark M. (2017 June 16). How to build financial wellness into a more holistic wellness program [Web blog post]. Retrieved from address https://blog.shrm.org/blog/shrm-blog-june-2017-how-to-build-financial-wellness-into-a-more-holistic-we


Unrealistic Expectations Muddy Employee Retirement Planning

Many younger employees have unrealistic dreams when it comes to planning their retirement. Here is a great article by Paula Aven Gladych from Employee Benefit Adviser on what you can do to help your millennial employees plan for their future retirement.

Three generations of U.S. investors accept that they are largely responsible for funding their own retirements. But many of them harbor unrealistic hopes of receiving a sizable inheritance as part of their funding plan.

These were among the conclusions drawn by a recent survey of 750 individual investors with a minimum of $100,000 in investable assets—including 223 millennials, 251 Gen Xers and 236 baby boomers.

The 2017 study was conducted by the U.S. research arm of Natixis Global Asset Management, a French company that is one of the 20 largest asset managers in the world. It found that 78% of investors recognize that more of the retirement funding burden is falling on their shoulders, since their employers have begun offering defined contribution retirement plans in lieu of defined benefit pension plans. And many also believe that Social Security won’t be available to them by the time they retire. But a significant percentage (43%) hope to receive an inheritance that will help them compensate for any savings shortfall.

This is especially true of millennials, who are twice as likely as baby boomers to expect that a financial windfall from their parents or grandparents will play an important role in meeting their retirement needs. Per the survey, 62% of millennials, compared to only 31% of boomers, anticipate receiving an inheritance that will help fund their retirement.

That’s a major disconnect, says Dave Goodsell, executive director of the Natixis Durable Portfolio Construction Research Center, which carried out the research. He points to findings that 40% of baby boomers don’t plan to leave an inheritance and 57% don’t think they will have anything left to pass down to their children or grandchildren. Only 56% even have a will in place.

Further exacerbating the situation, many of the investors surveyed underestimate the amount of savings they will need for retirement. They assume that they will only need replace 63% of their pre-retirement income, according to Goodsell, which is at odds with the retirement industry’s more conservative target of 75% to 85%.

Looking to the kids

Apart from an inheritance, many of the investors surveyed also believe they can count on their children for some sort of support when they retire, either through shared living arrangements or some type of stipend or allowance. “Retirement has become a multigenerational question,” Goodsell observes.

On the other hand, only 37% of the respondents say they expect Social Security to be an important source of income for their retirement. “There’s a great deal of skepticism,” notes Goodsell, “which should serve as a motivation to plan ahead for retirement and set realistic savings and spending goals.” Unfortunately, he adds, many investors’ decision making is clouded by unrealistic expectations.

Workplace 401(k) plans encourage savings discipline, since they make it easy for employees to save automatically. But in and of themselves they are insufficient, says the Natixis researcher, and employers need to help their employees make better financial determinations by providing them with retirement planning tools, including access to a financial adviser.

“Access is critically important,” he says. “Because responsibility is being shifted off to individuals, we need to make sure they have access to the right resources and understand how to use them.”

Key topics that need to be addressed, according to the survey, include financial planning basics, such as budgeting; how to manage and plan for required minimum distributions; tax, estate and long-term care planning, as well as managing debt and credit cards and understanding investment risk.

See the original article Here.

Source:

Gladych P. (2017 June 25). Unrealistic expectations muddy employee retirement planning [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/unrealistic-expectations-muddy-employee-retirement-planning?brief=00000152-1443-d1cc-a5fa-7cfba3c60000


Workers Willing to Leave a Job if Not Praised Enough

Praising your employees on a frequent basis is a great way to increase employee engagement and productivity. Take a look at this article by Brookie Madison from Employee Benefit News on how employees are more likely to leave a job if they do not feel like they're getting enough praise.

Employers may be spending more than $46 billion a year on employee recognition, reviews and work anniversaries, but recent research shows it could be worth the investment to commit even more to the effort.

Although more than 22% of senior decision-makers don’t think that regular recognition and thanking employees at work has a big influence on staff retention, 70% of employees say that motivation and morale would improve “massively” with managers saying thank you more, according to a Reward Gateway study.

By not receiving regular feedback on their performance, employees feel they are not progressing at work, says Glenn Elliott, CEO of Reward Gateway. In fact, nearly one in two employees reported they would leave a company if they did not feel appreciated at work, the study found.

This is particularly true of millennials, Elliott says, who make up the largest segment of the workforce, according to the U.S. Bureau of Labor Statistics. To this generation, “Saying thank you for good work or good behavior shows you values those things and want to see more of that behavior,” he says.

Overall, employees want praise and recognition more frequently than at annual awards ceremonies. Although 90% of senior decision-makers believe they prioritize showing appreciation and thanks in a timely way, more than 60% of workers would like to see their colleagues’ good work praised more frequently by managers and leaders.

“On average, businesses spend 2% on recognition,” says Elliott. “Businesses can increase effects of recognition by moving money from tenure-based to valued- and behavior-based recognition.”

More than eight out of 10 workers (84%) say praise should be given on a continual, year-round basis.

The Reward Gateway study polled 500 workers and 500 decision-makers in the United States, United Kingdom and Australia.

See the original article Here.

Source:

Madison B. (2017 June 11). Workers willing to leave a job if not praised enough [Web blog post]. Retrieved from address https://www.benefitnews.com/news/workers-willing-to-leave-a-job-if-not-praised-enough


Why Employee Engagement Matters – and 4 Ways to Build it Up

Do you need help building up engagement among your employees? Take a peek at this interesting article by Joe Wedgwood at HR Morning about the benefits of employee engagement and how to get your employees more engaged.

“Organizations with high employee engagement levels outperform their low engagement counterparts in total shareholder returns and higher annual net income.” — Kenexa.

Your people are undoubtedly your greatest asset. You may have the best product in the world, but if you can’t keep them engaged and motivated — then it counts for very little.

By making efforts to keep your people engaged, you will maximize your human capital investment and witness your efforts being repaid exponentially.

The benefits of an engaged workforce

Increase in profitability: 

Increasing employee engagement investments by 10% can increase profits by $2,400 per employee, per year.” — Workplace Research Foundation.

 There is a wealth of research to suggest that companies that focus on employee engagement will have an emotionally invested and committed workforce. This tends to result in higher profitability rates and shareholder returns. The more engaged your employees are the more efficient and productive they become. This will help lower operating costs and increase profit margins.

An engaged workforce will be more committed and driven to help your business succeed. By focusing on engagement and investing in your people’s future, you will create a workforce that will generate more income for your business.

Improved retention and recruitment rates:

“Replacing employees who leave can cost up to 150% of the departing employee’s salary. Highly engaged organizations have the potential to reduce staff turnover by 87%; the disengaged are four times more likely to leave the organization than the average employee.” — Corporate Leadership Council

Retaining good employees is vital for organizational success. Engaged employees are much less likely to leave, as they will be committed to their work and invested in the success of the company. They will have an increased chance of attracting more qualified people.

Ultimately the more engaged your people are, the higher their productivity and workplace satisfaction will be. This will significantly reduce costs around absences, recruitment, training and time lost for interviews and onboarding.

Boost in workplace happiness:

“Happy employees are 12%t more productive than the norm, and 22% more productive than their unhappy peers. Creating a pleasant workplace full of happy people contributes directly to the bottom line.” – Inc.

Engaged employees are happy employees, and happy employees are productive employees. A clear focus on workplace happiness, will help you to unlock everyone’s true potential. On top of this, an engaged and happy workforce can also become loyal advocates for your company. This is evidenced by the Corporate Leadership Council, “67% of engaged employees were happy to advocate their organizations compared to only 3% of the disengaged.”

Higher levels of productivity:

“Employees with the highest levels of commitment perform 20% better than employees with lower levels of commitment.” — The Society for Human Resource Management (SHRM).

Often your most engaged people will be the most dedicated and productive, which will give your bottom line a positive boost. Employees who are engaged with their role and align with the culture are more productive as they are looking beyond personal benefits. Put simply, they will work with the overall success of the organization in mind and performance will increase.

More innovation:

“Employee engagement plays a central role in translating additional job resources into innovative work behaviour.” — J.J. Hakanen.

Employee engagement and innovation are closely linked. Disengaged employees will not have the desire to work innovatively and think of new ways to improve your business; whereas an engaged workforce will perform at a higher level, due to increased levels of satisfaction and interest in their role. This often breeds creativity and innovation.

If your people are highly engaged they will be emotionally invested in your business. This can result in them making efforts to share ideas and innovations with you that can lead to the creation of new services and products — thus improving employee profitability.

Strategies to increase employee engagement

Communicate regularly:

Every member of your team will have valuable insights, feedback and suggestions. Many will have concerns and frustrations too. Failure to effectively listen and respond to everyone will lower their engagement and negatively affect the company culture.

Create open lines of communication and ensure everyone knows how to contact you. This will create a platform for your people to share ideas, innovations and concerns with you. It will also bridge gaps between senior management and the rest of the team.

An effective way to communicate and respond to everyone in real-time is by introducing pulse surveys — which will allow you to gather instant intelligence on your people to help you understand the sentiment of your organization. You can use this feedback to create relevant action plans to boost engagement and make smarter business decisions.

Take the time to respond and share action plans with everyone. This will ensure your people know that their feedback is being heard and can really make a difference.

Recognize achievements:

“The engagement level of employees who receive recognition is almost three times higher than the engagement level of those who do not.” — IBM Smarter Workforce Institute.

If your people feel undervalued or unappreciated then their performance and profitability will decrease. According to a survey conducted by technology company Badgeville, only 31% of employees are most motivated by monetary awards. The remaining 69% of employees are motivated by job satisfaction, recognition and learning opportunities.

Make efforts to celebrate good work and recognize everyone’s input. Take the time to personally congratulate people and honor their achievements and hard work. You will likely be rewarded with an engaged and energized workforce, that will make efforts to impress you and have their efforts recognized.

Provide opportunities for growth:

Career development is key for employee engagement. If your people feel like their careers are stagnating, or their hard work and emotional investment aren’t being reciprocated — then you can be certain that engagement will drop.

By meeting with your people regularly, discussing agreed targets and time frames, and clearly highlighting how they fit into the organizations wider plans, you can build a “road map” for their future. This will show that their efforts and hard work aren’t going unnoticed.

Improve company culture:

“Customers will never love a company until the employees love it first.” — Simon Sinek.

Building a culture that reflects your brand and creates a fun and productive working environment is one of the most effective ways to keep your employees engaged. It’ll also boost retention and help recruitment efforts. If your culture motivates everyone to work hard, help each other, become brand ambassadors, and even keep the place clean — then you have won the battle.

An engaged and committed workforce is a huge contributor to any organization’s bottom line. The right culture will be a catalyst to help you achieve this.

Here’s how you can improve the company culture within your organization:

  • Empower your people: Empowered employees will take ownership of their responsibilities, solve problems and do whatever it takes to help your company succeed. This will drive your company culture forward. Demonstrate you have faith in your people and trust them to fulfill their duties to their best of their abilities. This will ensure they feel valued, which can lead to empowerment.
  • Manage and communicate expectations: Your people may struggle to understand your cultural vision. By setting clear and regular expectations and communicating your vision via posters, emails, discussions and leading by example, you will prevent confusion and limit deviation from your desired vision.
  • Be consistent: To sustain a consistent culture, you must show uniformity with your actions and communications. Make efforts to have consistent expectations and standards for all your workers, and communicate everything in the same way.

By focusing on employee engagement and investing in your people, they will repay your efforts with an increase in performance, productivity and — ultimately — profit

See the original article Here.

Source:

Wedgwood J. (2017 June 8). Why employee engagement matter - and 4 ways to build it up [Web blog post]. Retrieved from address http://www.hrmorning.com/employee-engagement-ways-to-build-it-up/


Losing Sleep Over Benefits Technology? Get Over It!

Are you having a hard time figuring out all the different technologies associated with your benefits program? Read this great article by Linda Keller from SHRM on how to navigate through the different technologies accociated with you employee benefits program .

It’s easy to get caught up wanting to deliver a sophisticated platform to engage your workforce. Many benefits technology solutions promise to make employees smarter consumers of health care through slick recommendation engines, bots, and avatars delivered on smart phones.

I advise you to keep these three things in mind when you evaluate benefits technology:

1. Technology won’t solve your millennial dilemma.
Right now Millenials make up the largest portion of the workforce.  HR professionals are scrambling to figure out how to best communicate and educate them about benefits. The fact is Millennials rely heavily on their parents -- not technology -- to make insurance decisions.  When the Affordable Care Act changed the benefits landscape by allowing kids to stay on their parents’ plan until age 26, it meant that these new workers didn’t have to take an active role in managing their benefits. They just deferred to their parents. HR needs to figure out how to appropriately involve parents in the benefits decision-making process, while ensuring they meet Millennial’s growing demand for non-traditional benefits. Some solutions may include call center support where questions can be answered prior to enrollment.
2. Technology is necessary to reduce compliance risk.
Labor laws are complex and fluid.  The future of ACA and its unpopular reporting requirements are unclear. I believe what is clear is that federal, state and local compliance requirements will continue to be a burden and risk for HR. Compliance falls on HR shoulders and the importance of well-kept records is crucial to avoiding fines and penalties. I advise beginning by automating processes that are currently manual and present the highest risk to your organization. If you continue to rely on manual processes for compliance, the odds of success are not in your favor.
3. Technology is not a strategy.
Employers will waste a lot of money on benefits technology if they don’t know what they want to do with it. Develop a clear strategy and roadmap first -- then consider how technology can enable your strategy. Determine your cost management and employee engagement goals and then figure out how benefits technology can help drive down administrative cost, create enrollment efficiencies and enhance communication and reporting.

See the original article Here.

Source:

Keller L. (2017 May 23). Losing sleep over benefits technology? get over it! [Web blog post]. Retrieved from address https://blog.shrm.org/blog/losing-sleep-over-benefits-technology-get-over-it


GOP’s Health Bill Could Undercut Some Coverage In Job-Based Insurance

Thanks to the new legislation passed by Congress health care is on the verge of changing as we know it. Check out this interesting article by Michelle Andrews from Kaiser Health News on how these changes to healthcare will affect Americans who get their healthcare through an employer.

This week, I answer questions about how the Republican proposal to overhaul the health law could affect job-based insurance and what the penalties for not having continuous coverage mean. Perhaps anticipating a spell of uninsurance, another reader wondered if people can rely on the emergency department for routine care.

Q: Will employer-based health care be affected by the new Republican plan?

The American Health Care Act that recently passed the House would fundamentally change the individual insurance market, and it could significantly alter coverage for people who get coverage through their employers too.

The bill would allow states to opt out of some of the requirements of the Affordable Care Act, including no longer requiring plans sold on the individual market to cover 10 “essential health benefits,” such as hospitalization, drugs and maternity care.

Small businesses (generally companies with 50 or fewer employees) in those states would also be affected by the change.

Plans offered by large employers have never been required to cover the essential health benefits, so the bill wouldn’t change their obligations. Many of them, however, provide comprehensive coverage that includes many of these benefits.

But here’s where it gets tricky. The ACA placed caps on how much consumers can be required to pay out-of-pocket in deductibles, copays and coinsurance every year, and they apply to most plans, including large employer plans. In 2017, the spending limit is $7,150 for an individual plan and $14,300 for family coverage. Yet there’s a catch: The spending limits apply only to services covered by the essential health benefits. Insurers could charge people any amount for services deemed nonessential by the states.

Similarly, the law prohibits insurers from imposing lifetime or annual dollar limits on services — but only if those services are related to the essential health benefits.

In addition, if any single state weakened its essential health benefits requirements, it could affect large employer plans in every state, analysts say. That’s because these employers, who often operate in multiple states, are allowed to pick which state’s definition of essential health benefits they want to use in determining what counts toward consumer spending caps and annual and lifetime coverage limits.

“If you eliminate [the federal essential health benefits] requirement you could see a lot of state variation, and there could be an incentive for companies that are looking to save money to pick a state” with skimpier requirements, said Sarah Lueck, senior policy analyst at the Center on Budget and Policy Priorities.

Q: I keep hearing that nobody in the United States is ever refused medical care — that whether they can afford it or not a hospital can’t refuse them treatment. If this is the case, why couldn’t an uninsured person simply go to the front desk at the hospital and ask for treatment, which by law can’t be denied, such as, “I’m here for my annual physical, or for a screening colonoscopy”?

If you are having chest pains or you just sliced your hand open while carving a chicken, you can go to nearly any hospital with an emergency department, and — under the federal Emergency Medical Treatment and Active Labor Act (EMTALA) — the staff is obligated to conduct a medical exam to see if you need emergency care. If so, they must try to stabilize your condition, whether or not you have insurance.

The key word here is “emergency.” If you’re due for a colonoscopy to screen for cancer, unless you have symptoms such as severe pain or rectal bleeding, emergency department personnel wouldn’t likely order the exam, said Dr. Jesse Pines, a professor of emergency medicine and health policy at George Washington University, in Washington, D.C.

“It’s not the standard of care to do screening tests in the emergency department,” Pines said, noting in that situation the appropriate next step would be to refer you to a local gastroenterologist who could perform the exam.

Even though the law requires hospitals to evaluate anyone who comes in the door, being uninsured doesn’t let people off the hook financially. You’ll still likely get bills from the hospital and physicians for any care you receive, Pines said.

Q: The Republican proposal says people who don’t maintain “continuous coverage” would have to pay extra for their insurance. What does that mean? 

Under the bill passed by the House, people who have a break in their health insurance coverage of more than 63 days in a year would be hit with a 30 percent premium surcharge for a year after buying a new plan on the individual market.

In contrast, under the ACA’s “individual mandate,” people are required to have health insurance or pay a fine equal to the greater of 2.5 percent of their income or $695 per adult. They’re allowed a break of no more than two continuous months every year before the penalty kicks in for the months they were without coverage.

The continuous coverage requirement is the Republicans’ preferred strategy to encourage people to get health insurance. But some analysts have questioned how effective it would be. They point out that, whereas the ACA penalizes people for not having insurance on an ongoing basis, the AHCA penalty kicks in only when people try to buy coverage after a break. It could actually discourage healthy people from getting back into the market unless they’re sick.

In addition, the AHCA penalty, which is based on a plan’s premium, would likely have a greater impact on older people, whose premiums are relatively higher, and those with lower incomes, said Sara Collins, a vice president at the Commonwealth Fund, who authored an analysis of the impact of the penalties.

See the original article Here.

Source:

Andrews M. (2017 May 23). GOP's health bill could undercut some coverage in job-based insurance[Web blog post]. Retrieved from address http://khn.org/news/gops-health-bill-could-undercut-some-coverage-in-job-based-insurance/


The Employer Mandate: Essential or Dispensable?

Have you wondered how the passing of the AHCA will impact employers? Check out this article by David Blumenthal, M.D and David Squires from Commonwealth Fund and see how employers will affect by the passing of the most recent healthcare legislation.

The Commonwealth Fund’s Sara Collins has blogged that, “Employers are at the heart of the U.S. health insurance system and their ongoing commitment to it will be critical to its success and viability over time.” The point is undeniable. More than 150 million Americans under the age of 65 get their coverage through the workplace, and employer-sponsored insurance remains critical to the success of the Affordable Care Act’s (ACA) coverage plans.

Some may therefore be surprised by the growing talk of repealing the ACA’s requirement that employers cover their employees. To unpack this issue, let’s take a look at the ACA provision itself, why it was enacted, and the potential upside and downside of repeal.

The Employer Mandate

The ACA section under discussion is often called an employer mandate, but that’s an oversimplification. The law says that employers with 50 or more employees have a choice. They can offer health insurance that meets minimum standards for affordability and coverage to employees working 30 or more hours a week. Or they can pay the federal government a penalty if at least one of their employees receives a federal subsidy for a private insurance plan sold through one of the new ACA insurance marketplaces.

You can call this a mandate. Or you can call it a requirement that businesses share responsibility for the costs of covering all Americans, either by helping to buy insurance directly for their own employees, or helping the federal government do so.

The language here matters. The concept of shared responsibility reflects a political calculation and a statement of values. It asserts that for the ACA to be fair and politically viable, all Americans have to do their part. All U.S. citizens are required to have health insurance, and many will have to pay a penalty if they go without it (the individual mandate). Employers must cover workers or help the government financially to do so. Taxpayers have to support the expansion in Medicaid eligibility and marketplace subsidies. Hospitals have to take cuts in Medicare payments, medical device makers need to accept additional taxes, and so on. The most successful American social programs—such as Social Security and Medicare—rely on this concept of shared responsibility.

The Rationale

Whatever you label it, the employer coverage requirement has several rationales beyond the concept of shared sacrifice. Policymakers want to deter employers who now provide coverage to  their employees from dumping workers into the marketplaces, either by dropping coverage completely or limiting benefits to the point where workers will chose to buy insurance elsewhere. The requirement also attempts to nudge employers who don’t cover employees into offering health insurance. And on the assumption that some businesses will chose to pay rather than offer coverage, the employer provision provides an important source of revenue to cover the ACA’s expenses: an estimated $139 billion over 10 years.

The Rationale for Repeal

Several arguments are fueling the repeal push. First, implementation will be administratively complex and burdensome. For example, employers will have to report many new details about their workers, including what coverage they have been offered and whether they have received coverage elsewhere.

Second, some economists are concerned that the employer requirements will distort hiring decisions, leading companies to bring on fewer low-income employees who might be eligible for subsidized coverage in the marketplaces. Firms with payrolls near 50 workers might hire fewer workers altogether. Economists also believe that if employers incur penalties for not offering coverage, workers might contribute to the costs of insurance through reduced wages. Other economists, however, believe these effects will be modest.

Third, modeling from RAND and the Urban Institute suggests that when fully implemented in 2016, the employer provisions will increase the number of insured Americans by only a few hundred thousand. The overwhelming proportion of U.S. employers already provides insurance to their employees, and would continue to do so without the penalties in the ACA, the analysts contend.

Concerns About Repeal

Supporters of the employer requirement posit that projections that employers would stay in the health insurance business without the ACA requirements are just that—projections. Balanced against employers’ past record of providing coverage is an increasing tendency for businesses to reduce the generosity of coverage. In fact, the law’s requirements that workplace coverage be affordable and meaningful may be as important as the requirement that employers offer coverage at all.

Eliminating the employer provisions would also leave a big hole in funding for the ACA. The likelihood that supporters and opponents could reach agreement on how to raise the missing cash seems low, especially given the recent history of the congressional effort to replace the Medicare physician payment formula known as the SGR. This year, a bipartisan consensus on policy crashed and burned when Republicans and Democrats could not agree on new sources of revenue to pay for the legislation.

Finally, and perhaps most importantly, repealing the employer mandate would undermine the concept of shared responsibility and potentially add momentum—which could grow in a new Congress or under a new president—to the idea of eliminating the individual mandate as well. After all, why should individuals have to buy insurance when businesses don’t? Virtually all disinterested analysts agree that the individual mandate is critical to the stability of the new insurance marketplaces created under the ACA, and to reducing the number of uninsured Americans.

 Proceed with Caution

The full effects of repealing the employer provisions of the ACA remain speculative. A repeal seems unlikely in the short term, in part, because a repeal effort would open the floodgates to partisan warfare over undoing the ACA in its entirety, or to changing other elements of the law that could have more far-ranging consequences.

However, if serious bipartisan discussion of ACA improvement becomes possible, expect to see a repeal of employer coverage provisions front and center on the legislative agenda.  Under these circumstances, lawmakers should still proceed with caution. It may be wise to experiment with implementing the employer provisions and to reassess their comparative benefits and costs  at a later date. The philosophy of shared responsibility is foundational to the law’s political viability, and should not be discarded without compelling evidence that the employer requirements are not essential to the ACA’s success.

See the original article Here.

Source:

Blumenthal D., Squires D. (2017 June 4). The employer mandate: essential or dispensable [Web blog post]. Retrieved from address http://www.commonwealthfund.org/publications/blog/2014/jun/the-employer-mandate


Helping Your Employees Protect Against Identity Theft

Are you doing enough to help your employees protect themselves from identity theft? Make sure to take a look at this article by Irene Saccoccio from SHRM on what employers can do to protect their employees from identity theft.

Social Security is committed to securing today and tomorrow for you and your employees. Protecting your identity and information is important to us. Security is part of our name and we take that seriously.

Identity theft is when someone steals your personally identifiable information (PII) and pretends to be you. It happens to millions of Americans every year. Once identity thieves have your personal information they can open bank or credit card accounts, file taxes, or make new purchases in your name. You can help prevent identity theft by:

  • Securing your Social Security card and not carrying it in your wallet;
  • Not responding to unsolicited requests for personal information (your name, birthdate, social security number, or bank account number) by phone, mail, or online;
  • Shredding mail containing PII instead of throwing it in the trash; and
  • Reviewing your receipts. Promptly compare receipts with account statements. Watch for unauthorized transactions.

It is important that your employees take the necessary steps to protect their Social Security number. Usually, just knowing the number is enough, so it is important not to carry your Social Security card or other documents unless they are needed for a specific purpose. If someone asks for your employees’ number, they should ask why, how it will be used, and what will happen if they refuse. When hired, your employees should provide you with the correct Social Security number to ensure their records and tax information are accurate.

If your employees suspect someone else is using their Social Security number, they should visit IdentityTheft.gov to report identity theft and get a recovery plan. IdentityTheft.gov guides them through every step of the recovery process. It’s a one-stop resource managed by the Federal Trade Commission, the nation’s consumer protection agency. You can also call 1-877-IDTHEFT (1-877-438-4338); TTY 1-866-653-4261.

Your employee should also contact the Internal Revenue Service (IRS), and file an online complaint with the Internet Crime Complaint Center at www.ic3.gov.

Don’t let your employees fall victim to identity theft. Advise them to read our publication Identity Theft and Your Social Security Number or read our Frequently Asked Questions for more information. If you or an employee suspects that they’re a victim of identity theft, don’t wait, report it right away!

See the original article Here.

Source:

Saccoccio I. (2017 May ). Helping your employees protect against identity theft [Web blog post]. Retrieved from address https://blog.shrm.org/blog/helping-your-employees-protect-against-identity-theft


3 HSA Facts Employers Need to Know

Take a look at this informative article from Benefits Pro about what changes to HSAs means for employers by Whitney Richard Johnson.

Health Savings Accounts offer employers a way to help employees with health care costs without being as involved as they might be with, say, a Flexible Saving Account. But what are some other advantages?

And what are employers' responsibilities? Although employers will want to research more indepth about HSAs, here is a quick look at some basic HSA questions and answers:

#1: What are the advantages to an employer of offering an HDHP and HSA combination?

The benefits of offering employees an HDHP and HSA vary dramatically depending upon the circumstances. A major strength of offering an HSA program is flexibility.

Employers can be very generous and fully fund an HSA and also pay for the HDHP coverage. Alternatively, employers can also use the flexibility of the HSA to allow for the employer to reduce its involvement in benefits and put more responsibility onto the employee.

Generally, employers switch to HDHPs and HSAs to save money on the health insurance premiums (or to reduce the rate of increase) and to embrace the concept of consumer driven healthcare. The list below elaborates on strengths of HDHPs and HSAs.

Lower Premiums. HDHPs, with their high deductibles, are usually less expensive than traditional insurance.

Consumer-driven health care. Many employers believe in the concept of consumer-driven healthcare. If an employer makes employees responsible for the relatively high deductible, the employees may be more careful and inquisitive into their health care purchases. Combining this with an HSA where employees can keep unused money increases employees’ desire to use health care dollars as if they were their own money – because it is their own money.

Lower administration burden. Given the individual account nature of HSAs, much of the administrative burden for HSAs is switched from the employer (or paid third-party administrator) to the employee and the HSA custodian as compared to health FSAs and HRAs. This increased burden on the employee comes with significant perks: more control over how and when the money is spent, increased privacy, and better ability to add money to the HSA outside of the employer.

Tax deductibility at employee level. The ability of employees to make their own HSA contributions directly and still get a tax deduction is advantageous. Although it is better for employees to contribute through an employer, an employee can make contributions directly. An employer may not offer pretax payroll deferral or it may be too late for an employee to defer. For example, an employee that decides to maximize his prior year HSA contribution in April as he is filing his taxes can still do so by making an HSA contribution directly with the HSA custodian.

HSA eligibility. Becoming eligible for an HSA is a benefit that also stands on its own. Although not all employees will embrace HSAs, savvy employees that understand the benefits of HSAs will value a program that enables them to have an HSA.

#2: What are the employer responsibilities regarding employee HSAs?

If an employer offers pretax employer contributions, then the employer has the following responsibilities:

Make comparable contributions. If the employer is making a pretax employer contribution (nonpayroll deferral), it must do so on a comparable basis.

Maintain Section 125 plan for payroll deferral. If the employer allows pretax payroll deferral, then the employer must adopt and maintain a Section 125 plan that provides for HSA deferrals. This includes collecting employee deferral elections, sending the deferred amount directly to the HSA custodian, and accounting for the money for tax-reporting purposes.

HSA eligibility and contribution limits. Employers should work with employees to determine eligibility for an HSA and the employee’s HSA contribution limit. Although it is legally the employee’s responsibility to determine his or her eligibility and contribution limit, a mistake in these areas generally involves work by both the employer and the employee to correct. Mistakes are best avoided by upfront communication. Also, the employer does have some responsibility not to exceed the known federal limits. An employer may not know if a particular employee is ineligible for an HSA due to other health coverage but an employer is expected to know the current HSA limits for the year and not exceed those limits.

Tax reporting. The employer needs to properly complete employees’ W-2 forms and its own tax-filing regarding HSAs (HSA employer contributions are generally deductible as a benefit under IRC Section 106).

Business owner rules. Business owners generally are not treated as employees and employers need to review HSA contributions for business owners for proper tax reporting.

Detailed rules. There are various detailed rules that fall within the responsibility of the employer that are too numerous to list here but include items such as: (1) holding employer contributions for an employee that fails to open an HSA, (2) not being able to “recoup” money mistakenly made to an employee’s HSA, (3) actually making employer HSA contributions into employees HSAs on a timely basis, and (4) other detailed rules.

#3: How do employers switching from traditional insurance to HDHPs explain the change to employees?

Although there is no certain answer to this question, a straight-forward and honest approach to the change will likely work best.

Changing from traditional insurance to a high deductible plan with an HSA can be significant because employees likely face a higher deductible (although traditional health plan deductibles have been increasing to the point they are close to HDHPs).

Often the largest obstacle to the change is that employees feel something is being taken away from them. An employer that can show that the actual dollars contributed by the employer are level, or increased, versus the previous year helps a lot – especially if the employer makes a substantial HSA contribution for employees.

If the employer is making the change to reduce its health care expenses, then the employer will have to explain and justify that change to employees to get employees’ support for the change (e.g., the business is in a tough spot due to a difficult economy, etc.).

Depending on the facts, the change will likely be an improvement for some employees and HSA eligibility provides benefits to all employees. Some specific benefits include the following:

Saving money. The HDHP is generally significantly less expensive. Depending upon the circumstances, this fact often saves not only the employer money but also the employee. Highlighting the savings will help convince employees the change is positive. Although an actual reduction of the employee’s portion of the premium expense may be unlikely given increasing health insurance premiums, explaining that without the change the employee’s portion of the premium would have increased by more will help reduce tension.

Tax savings. The HSA enables tax savings. For some employees these tax savings are significant.

Control. HSAs give individuals control over their money and accordingly their doctor and treatment choices.

Flexibility. An HSA is very flexible and allows for some employees to put aside a large amount and get a large tax benefit. For those that prefer not to do so, the HSA allows that as well. Plus, even better, the HSA allows employees to change their mind mid-year. If an employee believes they are not going to need any medical services, the employee needs to contribute only a minimum deposit to an HSA. If it turns out that the employee does incur some medical treatment, the employee can contribute at that time and still get the tax benefits. Employees are often frustrated by HSA rules because of some confusion, but when explained that the rules are very flexible they appreciate HSAs more.

Distribution reasons. HSAs allow for more distribution reasons than FSAs: namely to pay for health insurance premiums if unemployed and receiving COBRA, to pay for some health insurance premiums after age sixty-five, to use for any purpose penalty-free after age sixty-five, to carry forward a large balance, and more.

See the original article Here.

Source:

Johnson W. (2017 May 11). 3 HSA facts employers need to know [Web blog post]. Retrieved from address http://www.benefitspro.com/2017/05/11/3-hsa-facts-employers-need-to-know?kw=3+HSA+facts+employers+need+to+know&et=editorial&bu=BenefitsPRO&cn=20170514&src=EMC-Email_editorial&pt=Benefits+Weekend+PRO&page_all=1


More Employers View HSAs as Part of Retirement Strategy

Did you know that more employers are starting to use health savings accounts as a tool for retirement? Find out more from this interesting read from Employee Benefits Advisor on how employers are utilizing HSAs in their retirement program by Paula Aven Gladych.

The health savings account market is continuing its massive growth — as well as its increasing importance to the retirement industry.

According to a survey conducted by the Plan Sponsor Council of America, more than 75% of plan sponsors “view the HSA as part of their retirement benefits strategy.”

Nearly 60% of the respondents believe HSAs should replace flexible spending accounts, and nearly three-fourths of employers think that HSAs should be open to all employees, not just those enrolled in a high-deductible health plan, according to the survey. The PSCA received 255 responses to its survey, with 181 of plan sponsors saying they sponsor an HSA for their employees.

HSAs are medical savings accounts that employees and employers can use to pay for qualifying healthcare expenses, now and into the future. It is widely acknowledged that healthcare expenses are one of the largest expenses people face in retirement, so this is one more tool individuals can use to save for their futures.

Made possible by the Medicare Modernization Act of 2003, the accounts allow employees to set money aside pre-tax. Any money that isn’t spent down in a given year can be invested, just like a retirement plan. That money can be used to pay for current and future healthcare expenses.

HSAEnrollment in employer-sponsored HSA/high-deductible plans more than doubled from 5% in 2005 to 11% in 2015, but in spite of that, 6.2 million of the 22.5 million people eligible to participate in an HSA did not contribute to it, according to the PSCA survey.

In 2016, the PSCA created an HSA committee to focus on health savings accounts and their impact on employee retirement readiness and to evaluate and improve their integration with defined contribution retirement plans.

“Absent legislative action that would curtail HSA tax preferences, HSA accounts are here to stay,” says PSCA Executive Director Tony Verheyen.

According to survey respondents, about 80% of employees are eligible to participate in an employer-sponsored HSA plan, with an average account balance of $3,161. Forty percent of employers said that fewer than 25% of their participants use up their entire HSA balance each year and 35% of plans said that 26-50% of their participants use their entire balance every year.

“So many employers participating in the survey do perceive the HSA to be a vehicle for employees to accumulate savings,” the report found.

Two-thirds of employers who sponsor a health savings account program for employees say they contribute a set dollar amount to each account based on the high-deductible health plan coverage tier an employee has chosen. More than 80% of the employers who sponsor an HSA say they contribute some money to the plan. Forty percent of plans say they front load contributions at the start of the year, while 30% contribute some amount every payday.

More than half of those surveyed said they cover the cost of HSA maintenance fees for active employees and 6% said they pay them for terminated employees. Only 21% of surveyed employers expressed concern about the fiduciary liability of sponsoring an HSA-high-deductible health plan.

The Plan Sponsor Council of America is made up of employee benefit plan sponsors who work together to help improve and expand upon the employer-sponsored retirement plan system.

See the original article Here.

Source:

Gladych P. (2017 May 9). More employers view HSAs as part of retirement strategy [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/more-employers-view-hsas-as-part-of-retirement-strategy