The components that will make or break a wellness plan
Originally posted October 1, 2014 by Elizabeth Galentine on https://ebn.benefitnews.com.
When shopping around for a wellness program partner, it’s the details that matter. All comprehensive wellness platforms should consist of four core programs — wellness, disease management, EAP and work life components — says Yale Mallinger of wellness company HMC-HealthWorks, but it’s what makes up those components that will make or break a plan. Therefore, advisers must do their due diligence when choosing a wellness provider to work with, he says.
For example, most reputable wellness companies will offer two types of diagnostic questionnaires, behavioral and medical, but advisers should request to sample those tests themselves, Mallinger says. “You should be able to go to their portal and participate, get a score, test it out,” he told attendees during a breakout session Tuesday at EBA’s Workplace Benefits Summit.
Mallinger also recommended breaking down the diagnostic testing process itself. For medical testing, ask the vendor if blood tests are done intravenously, through a finger prick, or both and what the benefits of each method are for a particular employer client. Some employers will want the instant results that a finger prick can provide, while others will be willing to wait a week or two for more comprehensive results from lab, says Mallinger, project director at HMC-HealthWorks.
Then, for clients interested in the lab testing route and submitting the testing to their insurance carrier as a preventative health measure, Mallinger recommends going even further by having their insurance company do a trial run with that billing code to ensure it works.
The whole package
As you look at potential wellness partners, consider whether or not the company offers unbundled plans, Mallinger continues. Although he says “it does no good to put a wellness program in place if you don’t take care of all the problem [areas] for employees,” such as debt management and legal assistance, not every employer will want the top-tier package.
Presenting the benefits of a wellness plan in an unbundled format allows the clients to pick and choose for themselves, he says. Such benefits include:
- A personal health and wellness portal;
- A health library;
- Health risk assessments;
- Mobile app capabilities;
- Reporting capabilities;
- Diabetic supplies;
- Concierge services;
- Coaching services;
- Disease management;
- Biometric screenings;
- Employee assistance programs, and more.
Additionally, as far as mobile technology, every wellness company has an app — “it’s what they do with it and what you can do with it” that counts, Mallinger says.
Some apps have the ability to report a range of statistics to employers, such as what people are reading or if they take a health assessment, he explains, adding that such reports are beneficial not only on an annual basis but also quarterly.
In turn, Mallinger says some wellness companies are primarily software-focused, so advisers should be sure to analyze the type and quality of any wellness coaches they provide. What kind of training do they have? How are they certified? “Take the time to break it down,” he says, and never be afraid to ask for credentials.
There are currently at least three lawsuits related to wellness plans going through the U.S. court system, Mallinger points out, so advisers should also be cautious that plans are in compliance with the Affordable Care Act, Americans with Disabilities Act and others.
Saxon Broker-Dealer Named 2014 Broker-Dealer of the Year
Cambridge honored six out of last eight years for this highly coveted honor
Investment Advisor magazine’s annual poll of Rep-Advisors’ judging their Broker-Dealer
Cincinnati, OHIO – Saxon Financial Consulting announced today their broker-dealer, Cambridge Investment Research, Inc., was named by Investment Advisor magazine as ‘2014 Broker-Dealer of the Year in Division IV’ – the division representing independent broker-dealers with over 1,000 producing advisors. The honor is based on the results of the annual poll conducted by the magazine in June of this year. Cambridge has earned this honor six of the last eight years, and was previously honored in 2013, 2012, 2010, 2008, and 2007 as Broker-Dealer of the Year in Division IV and in 2003 for Division III.
“Being named Broker-Dealer of the Year is important to us because it means hundreds of our advisors felt strongly enough about Cambridge to take the time and engage in this poll,” said Eric Schwartz, Cambridge Chairman and CEO. “We are in the business of serving our advisors and the greatest reward in the service business is being complimented about your service and valued for your services. For this we are most appreciative and greatly humbled.”
“Service, service, service – our service for our advisors is always foremost in our minds and actions,” said Amy Webber, Cambridge President. “The Broker-Dealer of the Year honor is an honor and a measure of success we consider along with our own annual satisfaction survey and other meaningful industry polls. We continually raise our very high standards for service and we are thrilled we continue to earn high marks from our advisors.”
Cambridge’s honor is based on receiving high marks in all categories, and a composite score that was highest among its peers. Several thousand credentialed voters – representatives of independent broker-dealers – cast ballots, and those broker-dealers that gained the highest composite scores were awarded the honors in four different divisions based on their number of producing rep-advisors. The winning broker-dealers are profiled in Investment Advisor’s September 2014 issue and online via ThinkAdvisor.
“We thank each and every advisor in our Cambridge family for this honor and vote of confidence. Each vote is important and tells us that we are giving independent advisors the commitment they deserve, and the leadership they need for their success as independent business owners,” said Schwartz.
About Saxon Financial Consulting
Saxon provides comprehensive employee benefit and wealth management services to our clients. Whether you are a CEO, Small Business Owner or head of household, we utilize a team approach in analyzing and planning a client’s investment portfolio, cash flow, retirement and benefit/insurance needs. Our recommendations are based solely on your specific needs, circumstances and goals.
We consistently monitor your goals and offer education to ensure your plan stays on course to meet your needs. The partners have over thirty years of investing and benefit experience and are active members of the community.
Our mission is to partner with clients to establish and achieve financial goals through objective planning and management of assets and/or employee benefits.
Our purpose is to help build, manage and preserve your financial and physical wealth. We put our client’s interest first, act with integrity and honesty, and strive for excellence in every facet of our practice.
Our success is not measured by performance statistics but rather by our clients’ success in achieving their goals.
Our philosophy is to provide our clients with the highest level of service and technical expertise in the management of employee benefits and/or preservation of wealth. The entire staff of Saxon Financial Consulting is firmly committed to this philosophy.
Contact: Saxon Financial Consulting @ 513-573-0129
Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member of FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Saxon Financial Consulting and Cambridge are not affiliated.
Check out the background of firms and investment professionals on FINRA’s BrokerCheck.
About Broker-Dealer of the Year
According to ThinkAdvisor.com, The rules for Investment Advisor’s Broker-Dealers of the Year readers’ poll remained the same in their 24th annual contest. Only producing representatives of the independent broker-dealers that appeared in their June 2014 Broker-Dealer Reference Guide were eligible to vote in online balloting on ThinkAdvisor.com from June 1, 2014 through July 1, 2014. Each voter was vetted by Investment Advisor editorial staff to ensure compliance with the “one person, one vote” principle and that each voter was, in fact, registered with FINRA as an independent contractor registered representative of the broker-dealer for which they voted. Those BDs that received the highest average rating from their own reps were deemed Broker-Dealers of the Year in four different divisions based on the number of reps. this ensured the BDs in each division competed against similar-sized rivals.
7 ways to keep your sanity during open enrollment
Originally posted on https://ebn.benefitnews.com.
‘Tis the open enrollment season in the benefits world. For many benefit managers, that means stress, panic and very long days (and nights). But there are ways to make this time of year less frantic and more productive.
HR cannot run open enrollment in a vacuum. So lean on consultants and communication pros to craft your messaging. Turn to senior leaders for top-down messaging on why changes are happening. Bring in your benefit vendors to explain the impact of changes and walk employees through the enrollment process. Like many things, open enrollment takes a village, so use yours.
Few things can set off a fire drill like systems crashing and just plain misbehaving – especially with online enrollment. Get ahead of the game by partnering with IT to determine how people will enroll, how data will be handled and how it needs to flow between departments (like HR and payroll). Map out contingency plans and decide who will be on point if things go awry.
Be straight-up with employees about what’s changing, why and what they need to do. No spin. No sugar. If you’re making significant plan changes this year, use personas to help people understand how this will affect them. And provide decision guides that walk them through all the variables (particularly deductibles, co-payments, HSA contributions, covered services and provider network details) so they can make the best choice for themselves and their families.
We all put a ton of blood, sweat and tears into benefit planning and open enrollment communications – so much so, that it can become a bit of a one-way street. Keep in mind that this is a time when employees are sitting up straight and paying attention. Ask for their feedback. How do they feel about what’s changing? The benefits overall? Why? What could be done differently? Whether you’re talking with employees at a town hall, engaging with them over social media or asking for their honest responses to a survey, really listen to what they have to say, thoughtfully respond and act on their feedback as much as you can.
We know – right now, it’s all you can do to stay focused on the enrollment at hand. But it’s less daunting than it sounds: what we’re suggesting is that you take employee feedback and lessons learned from this enrollment period and start compiling them for next year. That might be possible benefit changes, new benefits to add or ways to communicate differently. You know what they say about the early bird … and in this case, the sooner you nail down what 12 months from now looks like, the more proactive (and effective) you’ll be when it comes to next year’s systems and communications.
Why not make open enrollment fun – and an opportunity to earn points and prizes? Launch an Open Enrollment Challenge and reward employees for taking various actions, like attending an open enrollment info session, updating beneficiary details and enrolling by a certain date. Or plan an Open Enrollment Walk, where people can head out for a stroll with HR and colleagues, giving them an opportunity to ask benefit questions along the way (and make time afterward too).
Although you may feel like you just don’t have time to take a break, right now you need it more than ever. Along with those enrollment meetings, town halls, social media replies and survey reviews, block time for yourself on the calendar. Go for a run, head out for a relaxing healthy lunch, read a great book, meditate, take a yoga class – whatever makes you happy and keeps you sane.
Employers face crackdown over worker misclassification
Originally posted September 29, 2014 by Michael Giardina on https://ebn.benefitnews.com.
Since the onset of the recession, there has been a surge in worker misclassification litigation and enforcement against employers that are trying to effectively manage their finances, but are incorrectly classifying their workers. There is also concern around the Affordable Care Act’s employer mandate, which may make misclassifications a tempting alternative to offering group health coverage.
The Department of Labor and the Internal Revenue oversee the federal Fair Labor Standards Act, which establishes minimum wage and overtime pay standards and how much private and public employers should pay their employees. At the state level, there are also a slew of regulations that can make any HR professional or benefit plan sponsor concerned.
Linda Doyle, trial partner at international law firm McDermott Will & Emery, says many employers with large teams of individuals in one category – such as trainers in the tech world or sales representatives in product and promotion businesses – have asked how they could come under the ACA’s coverage limits. This has been an area she’s been docking a lot of analysis in.
“There are benefits, but there are also huge costs and potential liabilities if you get this wrong,” says Doyle. “You know saving health insurance money is a way to avoid the teeth of the Affordable Care Act; it may be a laudable goal, but you may be just putting off extensive liability down the line.”
It doesn’t help that many employers are still trying to climb out from the recession.
“Particularly after the last recession, which I think we are technically are still in, there was a lot of headcount management,” Doyle explains. While noting that “‘temporary’ doesn’t necessarily mean ‘independent contractor’, or ‘work-from-home’ doesn’t mean ‘independent contractor’,” she says “there are really some employers that just don’t understand this is a category – even if the employee or individual agrees to it.”
Nancy Vary, director of the Knowledge Resource Center for Buck Consultants at Xerox, explains the ACA, and employee benefits needs in general, is an influence in these decisions.
“It all factors in, because if you’re an independent contractor, typically you’re not in a situation where you will not be receiving any kind of employee benefit,” Vary says.
In 2012, the National Employment Law Project stated that 10-30% of employers, or even more, misclassify their employees as independent contractors. This equates to millions of misclassifications and billions in revenue losses for state and federal governments. Because employers with independent contractors or other exempt employees are not tied to benefit and payments requirements levied by federal, state and local agencies, this is the conundrum, says Jeff Phelps, chief operating officer at Nelson Compliance, a consultant firm that helps employers figure out their contingent workforces.
“The problem is with independent contractors is, of course, employers are not contributing to the tax base for those individuals,” says Phelps. “That’s the No. 1 driver, that’s why you see the legislation and regulation getting tougher and more enforcement. They want to go after the misclassification issue, because they want to recover taxes that have not been made as well as [future] taxes.”
Phelps adds that typical employee protections afforded to employees such as the FLSA, Title VII of the Civil Rights Act of 1964 and the Family and Medical Leave Act are not offered to independent contractors.
The current severity of misclassification cases and costs, which employment lawyers will tell you rival what was seen in the dot-com era – especially after Microsoft agreed to pay the IRS $97 million to settle a benefits suit that included its independent contractors that were not allowed access to the company’s stock purchase plan.
“If you are an employer and you get this wrong, you have tax liability,” says Doyle. “You also have the problem that Microsoft faced years ago, if you call someone an independent contractor but they are really an employee, and your benefit plans give employees certain buckets of benefits, then you owe them those benefits.”
Under Employee Retirement Income Security Act plans, or state insurance plans, employees cannot waive their rights to benefits, says Doyle, even if they agreed to the exemption. She says a lot of employers rewrote their benefits plans in order to address the issue. But now, as 10 states enacted worker misclassification laws in 2012 and more than 14 regions did so in 2013 – including the District of Columbia – the topic is top of mind for employers.
Meanwhile, the Consolidated Appropriations Act of 2014, enacted in January, was authorized for just this purpose and the DOL has plans to award $10.2 million to fund worker misclassification detection and enforcement activities in 19 state unemployment insurance programs. “This is one of the many actions the department is taking to help level the playing field for employers while ensuring workers receive appropriate rights and protections,” says Thomas E. Perez, the U.S. secretary of labor.
“The DOL has engaged in quite a bit of outreach over the best few years but its focus in many respects has been on educating the workers, educating the employees and providing them assistance in filing complaints,” says Buck Consultants at Xerox’s Vary. But, “you get a sense where the DOL’s head is, and that’s not that different from many government agencies. They are, after all, in the enforcement business.”
Because each state regulation may vary, with some state laws being more strict than those at the federal level, Phelps says the independent contractor classifications, and misclassifications in general, are being labeled as “an unfair business practice.”
“All of those costs that an employer would have satisfy within the W-2, they don’t have to satisfy as a 1099,” Phelps explains.
But all employers want to know whether there will be some reprieve or clarification. According to Doyle, the DOL’s broad strokes of intervention, essentially audit programs and education programs, may help some uninformed organizations. Meanwhile, Vary adds that compliance audit of pay practices and time sheets can help employers skirt some of the liability going forward.
Because misclassifications are neither a function of HR departments or upper management, it’s a puzzle that has not been solved and will likely not be for a while, Phelps says.
“I don’t see anything coming down in terms of regulation that’s going to make this simpler,” says Phelps, who has spent more than 30 years in the human capital management industry. “All we’re seeing is greater enforcement.”
Nearly One in Four Employers Say Private Health Insurance Exchanges Could Provide a Viable Alternative for Full-Time Active Employees in 2016
Originally posted September 25, 2014 on https://www.insurancebroadcasting.com.
ARLINGTON, Va.--(BUSINESS WIRE)--Results of a July 2014 survey of midsize to large employers by global professional services company Towers Watson (NYSE, NASDAQ:TW) showed that 28% said they had already extensively evaluated the viability of private exchanges. Nearly one in four (24%) said private exchanges could provide a viable alternative for their active full-time employees as soon as 2016.
“Private exchanges are a relatively new path for many employers — one that has only recently become available to provide benefits for active employees”
The results are from the 2014 Towers Watson Health Care Changes Ahead Survey, which was completed by 379 employee benefit professionals from a variety of industries and reflect health care benefit decisions for 2016 – 2017.
The survey also revealed that the top three factors that would cause employers to adopt a private exchange for full-time active employees are:
Evidence they can deliver greater value than their current self-managed model (64%)
Adoption of private exchanges by other large companies in their industry (34%)
An inability to stay below the excise tax ceiling as 2018 approaches (26%)
Public Exchanges Not Considered Viable for Full-Time Active Employees
In contrast, nearly all employers surveyed (99.5%) said they have no plan to exit health benefits for active employees and direct them and their families to public exchanges, with or without a financial subsidy. More than three out of four employers (77%) said they are not at all confident public exchanges will provide a viable alternative for their active full-time employees in 2015 or 2016.
“Private exchanges are a relatively new path for many employers — one that has only recently become available to provide benefits for active employees,” said Dave Osterndorf, a managing director with Towers Watson’s OneExchange. “However, with the Patient Protection and Affordable Care Act’s excise tax top of mind for large employers, and with the potential to cost companies billions of dollars unless they act now to keep the cost of health benefits below government-mandated thresholds in 2018 and beyond, new solutions are necessary. Even employers that have managed to keep increases in their health care benefit costs lower than industry averages are working very hard to maintain that success. Private exchanges offer employers a new opportunity to save on health care coverage with a reduced operational burden, which is the main reason they are more seriously evaluating them for their active employees.”
Data from the 2014 Towers Watson Health Care Changes Ahead Survey revealed that nearly three-quarters (73%) of employers said they are somewhat or very concerned they will trigger the excise tax based on their current plans and cost trajectory. More than four in 10 (43%) said avoiding the excise tax is the top priority for their health care strategies in 2015.
Osterndorf added, “Effective private exchanges can provide value in many ways. For example, as more employers move to account-based health plans, they can realize the promise of avoiding the excise tax while providing the added benefit of putting employees in charge of how their health care dollars are spent. Private exchanges offer more choice, including account-based plans, with the tools and support for helping employees make better health decisions, and recognize the connection between their physical and financial well-being. Employee understanding and engagement are critical to the long-term sustainability of an employer’s program. Private exchanges can accelerate the fulfillment of that goal.”
According to the 19th Annual Towers Watson National Business Group on Health Employer Survey on Purchasing Value in Health Care, released in March 2014, nearly three-quarters of respondents currently offer account-based health plans (ABHPs), with another 9% expecting to add one for the first time in 2015. Nearly 16% of respondents have adopted ABHPs as their only plan option, up from only 7% in 2012. Nearly one-third of all companies could offer ABHPs as their only option by 2015, if they follow through with current plans.
About the Surveys
The 2014 Towers Watson Health Care Changes Ahead Survey offers insights into the focus and timing of U.S. employers’ plans and perspectives related to their health benefits, and their efforts to better manage costs and employee engagement, as well as their planned responses to the business risks associated with the 2018 excise tax. The survey was completed during July 2014 by 379 employee benefit professionals from midsize to large companies across a variety of industries and reflects respondents’ 2014 – 2017 health care benefit decisions. The responding companies comprise a broad range of industries and business sizes, and collectively employ 8.7 million employees.
The 19th Annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care tracks employers’ strategies and practices, and the results of their efforts to provide and manage health benefits for their workforce. This report identifies the actions of high-performing companies, as well as current trends in the health care benefit programs of U.S. employers with at least 1,000 employees. The survey was completed by 595 employers between November 2013 and January 2014. Respondents collectively employ 11.3 million full-time employees, have 7.8 million employees enrolled in their health care programs and represent all major industry sectors.
ABOUT TOWERS WATSON
Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers consulting, technology and solutions in the areas of benefits, talent management, rewards, and risk and capital management. Towers Watson has more than 14,000 associates around the world and is located on the web at towerswatson.com.
New benefit offers education help to parents of special-needs children
Originally posted September 12, 2014 by Andrea Davis on https://ebn.benefitnews.com.
Joanne Burke can’t count the number of hours she spent researching special-needs law and preparing for meetings with educators and therapists about her daughter Gabby’s individualized education plan. Gabby, eight, was born with spina bifida, a birth defect that happens in utero when a baby’s still-developing spinal column doesn’t close all the way. When she was four, Gabby was also diagnosed with a rare form of epilepsy, which caused steep cognitive regression. Today, Gabby primarily uses forearm crutches to get around and attends third grade at a public school.
It is families like Burke’s that led Adam Goldberg to launch myEdGPS, a company that helps parents of children with special needs map out an education plan for their child. It’s a program that can be offered as a standalone employee benefit, and it is also being offered through Bright Horizons, a provider of child care services as part of that company’s suite of employer offerings. The Bright Horizons program, Special and Exceptional Needs, powered by myEdGPS, will be exclusively offered to companies with more than 3,500 U.S. employees by College Coach, a division of Bright Horizons specializing in providing answers to education concerns.
Burke’s employer, an automotive parts supplier based in Michigan where Burke lives with her husband and Gabby, has been supportive of her need for flexibility. They’ve offered Burke a flex-time schedule where she starts at 6:30 a.m. and leaves the office by 2:30 p.m. to collect Gabby from school. And, when she returned to work after Gabby was born, she was able to work from home on days when Gabby had multiple medical appointments. Still, when Gabby was ready to go to school, Burke spent countless hours attempting to figure out the family’s options. While she investigated sending Gabby to a private school, in the end, the private school could not handle Gabby’s multiple needs. Through the public school system, Gabby has access to physical and occupational therapy, as well as speech therapy.
“It's just a lot of juggling. It's almost like having two full-time jobs at once,” says Burke. “The case management aspect of it can be pretty heavy at times. It's not all the time, but if there's any sort of medical issue going on, it can take up a lot more time and effort to manage all of that at once.”
After years of providing private consulting services to parents who could afford to pay for it, Goldberg, who holds a masters’ degree in education with a concentration in assessment, realized that “we were turning away 95% of folks who couldn’t afford to pay for these types of private services,” he says. “This really was the manifestation of my burning desire to democratize the model and be able to scale it through technology so that we could have an impact on millions of children and their families out there.”
One in five children struggle with some type of special or exceptional need and Goldberg estimates that translates into an impact on 10% or more of the workforce. Working parents lose up to five hours a week running around to various doctor, therapist and teacher appointments, to say nothing of the hours they spend filling out paperwork and figuring out who’s paying for what.
Goldberg likens myEdGPS to TurboTax for special education because when parents first enter the online system, they’re asked a series of questions, a virtual intake of sorts. Then, depending on how far long parents are in their journey, the system serves up a series of roadmaps designed to guide parents and give them the necessary information, depending on what their needs and goals are.
They system also includes a virtual binder that can be accessed on any mobile device to help manage and store all the documentation involved. There’s also a calendar feature, which Goldberg says is particularly useful since different states have different timelines for when certain documentation needs to be provided and to whom.
“Once the system knows your child is being educated in Ohio, for example, and you request an evaluation, the system knows to alert you that within X number of school or calendar days, based on Ohio regulations, that you should expect to hear a response back from the school and then it goes to the next step in the timeline,” he explains.
The system also includes a behavioral tracking journal for parents and a letter generator “so that you can get it right the first time when you’re requesting an evaluation from the school or an independent evaluation of the school, or requesting a team meeting to address an issue,” says Goldberg.
Bright Horizons is currently piloting the program with a handful of companies, says CEO David Lissy. It’s included in the company’s core offerings but employers can also customize the program to include in-person education onsite and/or live webinars.
And apart from helping employers with productivity issues, Goldberg says myEdGPS offers the opportunity for tangible savings on health care expenses.
“What most people don't know -- including parents, administrators, and especially employers -- is that the knee-jerk reaction is to go to the medical plan if you suspect something's going on with your child, without any knowledge that you can actually get some of these same exact services from a school,” he explains. “That's a federally mandated system. The two systems [health care and education] really don't talk to each other that well. What we're doing is we're helping empower these parents to be able to understand what their rights are and how to go about it, step by step, finding the right help in the right ways through schools.”
For example, an employee has a five-year-old child who may not be hitting certain developmental milestones. The parent’s first instinct is to take the child to the pediatrician, who then refers the child to a series of specialists. Each visit requires the parent to take time off work, the medical plan incurs costs and the employee may have co-pays to deal with.
“The reality is, at the very beginning you should also be requesting an evaluation through school, because it's free if you ask for it in the right way,” says Goldberg, adding that there’s a whole host of related services, including speech language therapy and some behavioral therapies, that are within the legal construct of the Individuals with Disabilities Education Act.
“All of this fundamentally is supposed to be free and in very many cases overlap with those medical services,” he says.
For Joanne Burke, who researched all of daughter Gabby’s educational and therapeutic needs herself, a service like myEdGPS would have been invaluable. “If I had access to a resource like this it would free up valuable time to address other issues,” she says. “The law is complex and learning how it affects our daughter as well as learning about accommodations and assistive technology is constantly in the back if my mind.”
Many of us get forced to retire; How to prepare yourself to handle a tough transition
Originally posted September 24, 2014 Wednesday by Rodney Brooks in USA Today, First Edition, Money; Pg. 3B and on https://www.ifebp.org.
That retirement you're looking forward to in five years: Be prepared for it sooner than you expect.
Numerous surveys have shown that people think that they are going to retire later than it happens. The two big reasons: health issues and losing your job. According to the Employee Benefit Research Institute, 47% of American retirees in a 2013 survey retired before they planned, mostly because of health or disability.
Unplanned early retirement can create havoc with your retirement plans. Those five or 10 additional years of saving were no longer possible. Some may have had to take Social Security earlier than expected.
"I have several clients and families who have gone through this," says Greg Sullivan, with Sullivan, Bruyette, Speros & Blayney In McLean, Va. "What we are always doing is trying to keep our clients prepared for the unexpected."
Others are not prepared psychologically.
"Don't leave your retirement to hopium," says Kimberly Foss, president of Empyrion Wealth Management in Roseville, Calif., author of Wealthy by Design. "Hopium is a foolish hope. It allows people to ignore sometimes unexpected realities, such as unemployment. It keeps people from making a proper plan. If they do ignore it, it leads to financial ruin."
How to be ready:
Do an assessment. Sullivan says you should look at cash flow, balance sheet, insurance and estate plans to get an idea of where you are today and the impact of earlier-than-expected retirement.
Plan for the unexpected. "If you pre-rehearse those types of contingencies, you are far more likely to make good decisions in an emotional moment," says Joe Sicchitano, head of wealth planning for SunTrust Bank.
It's not that different from helping children who are afraid of monsters in the closet, Sicchitano says. "The best solution is turn the light on, and see how big he is, how scary he is.
"Build an emergency fund. "You want to make sure you've built an adequate emergency fund," says Marc Freedman, president CEO of Freedman Financial in Peabody, Mass., and author of Retiring for the Genius. "Six to 12 months of your living expenses," he says. "If you are 55 and faced with retiring soon, you should be able to do that.
"Consider what you want in retirement. Once people get into their 50s, they need to look at how early they can retire, based on what they want, says Joe Franklin, president of Franklin Wealth Management in Hixson, Tenn. "Determine at what age you are independent enough to say, 'I can keep working if I enjoy it or leave if I don't like it.'
"Reduce debt. "The more you can lower your committed expenses, the more flexibility you have," says Sicchitano.
Maximize contributions to your 401(k) and minimize fees. Jerry Schlichter, partner in the St. Louis law firm of Schlichter, Bogard & Denton, says the more attention you've paid to your retirement plan, the better you position yourself for an unexpected retirement. "You want to avoid paying fees that will deplete those assets. The Department of Labor has said a 1% difference in fees over a work life expectancy of 25 years will make a 28% difference in the retirement assets you have. Watch your fees, and make sure they are appropriate. Your company has a duty to make sure you are paying reasonable fees."
New-age challenges for employee privacy
Originally posted September 23, 2014 by Michael Giardina on https://ebn.benefitnews.com.
An individual’s online behavior and presence may seem like their own business, but when it comes to on-the-job use of social networks, the rules have changed. And as benefit managers and their HR teams do their due diligence to try to find the ideal candidate for a position, are they overstepping the law by requiring new hires to allow an employer access to the candidate’s online life?
How can employers ensure that current employees or potential hires are the right fit for their workplace without crossing the line — and taking steps enforcement agencies and new state laws deem too intrusive? As they look for answers, many companies will find that guidance has been a bit fuzzy.
Employers, including private companies and educational institutions, are being forcibly excluded from their employees’ social media accounts as privacy advocates push for more action from legislators. This year, New Hampshire became the 18th state to enact laws that promote employee and student privacy when it comes to employer access to personal online account information.
Five other states in 2014 and nearly a dozen others in 2013 have pushed forward with similar provisions to protect employee privacy, according to the National Conference of State Legislatures.
“I don’t think it’s surprising that more states are enacting legislation,” says Jaklyn Wrigley, an associate at law firm Fisher & Phillips, who represents employers in Mississippi and on the federal level. “It’s a personal realm; that’s where you engage in communication with people that don’t have anything to do with work or school. So it makes sense — unless there is a reason for the employer or university to really stick its nose into that aspect of your personal business — that it is protected without fear of some sort of retaliation.”
The issue of employer social media access was first addressed in 2012 with the introduction of the Password Protection Act, which aimed to prevent employers from demanding access to their potential or current workers’ personal social media accounts. At the time, a Workplace Options and Public Policy Polling survey discovered that 89% of American workers felt their employers had no right to demand their social media login information, and 68% predicted that forcing workers to hand over this information would cripple the already shaky employer-employee relationship.
Alan King, president and chief operating officer of Workplace Options, explains that employer access to personal online information remains “a tricky issue.”
“There are several levels of concern for both parties, but when you look at the big picture, it really boils down to trust, engagement and security,” King says. “It’s dangerous to say that prohibiting employer access to search or monitor employee activity online or through social media sites will improve employee well-being across the board. That may be the case in some instances; it may not be in others.”
According to King, there is a fine line for both employers and employees to walk when policing this new-age issue.
“Employees need to know that what they do or say online or outside of work can impact their professional lives, even if they are off the clock,” he says. “But employers also need to hear and understand that too much interest in what an employee does in their personal life can be bad for
business.”
From a legal perspective, employers may be taking the wrong approach when considering an employee’s (or potential employee’s) personal life in their review process. But even before bans on employer access to social media and online account passwords were considered by state and federal lawmakers, employees did have protective safeguards in place.
“A lot of employers just assume that if it’s on the Internet, it’s fair game — and that’s not the case,” says Louis L. Chodoff, partner at national law firm Ballard Spahr.
“Social media in hiring comes up where employers like to do their own Google searches on people, and sometimes applicants will not privatize any parts of their Facebook page,” explains Chodoff. “The trouble that employers will get into sometimes is that they will access information that they shouldn’t be considering in the hiring process.”
He adds that employers should “insulate the decision makers from any information that may be considered in a protected class,” anyone who could suffer discrimination because of their race, color, religion, sex, national origin, age, or disability. Under the Equal Employment Opportunity Commission, which enforces Title VII of the Civil Rights Act of 1964, formal guidance on the issue has been less concrete. The enforcement agency has yet to issue formal guidelines for employers to follow when implementing social media policies, but has commented on its encroachment in employment issues.
At a meeting addressing social media in the workplace, Carol R. Miaskoff, acting associate legal counsel at the EEOC, referenced the Internet-age medium’s impact on equal employment opportunity law.
“When an employer or other entity is covered by the EEO laws, their recruitment, selection, and employment decisions and activities are subject to the EEO laws, regardless of the media they happen to use,” she said.
While noting that regulations do not prohibit specific technologies, she highlighted that “the key question under the EEO laws is how the selection tools are used.”
Miaskoff says the National Labor Relations Board has been keeping an eye on employer social media policies as they pertain to violations of Section 7 of the National Labor Relations Act, which mandates that employees have the right to organize. Organing activities, whether in-person or online, fall under the veil of “protected concerted activity,” according to NLRB.
Employees also need to be very clear about a company’s internal social media policy, to help prevent an ill-timed or unflattering Facebook or Twitter post from turning into a major public liability. Claire Bissot, HR consulting manager at CBIZ, a business services company, says a proactive stance on the rules can help avoid accidental (or genuinely injurious) messages from going viral.
“You should have a social media policy and certain expectations about what you expect about them; [including] not to give confidential information, not to post negative things about the company and other people, or say this is a view of the company,” says Bissot. “But I believe if you truly encourage your employees to feel like they have ownership in their company, and where they work, they are not going to do malicious things on social media.”
Meanwhile, social media monitoring proposals remained a hot button issue among state legislatures in 2014, and are likely to continue in 2015. As Wrigley notes, social media awareness and privacy concerns in the workplace are not going away anytime soon.
“[The legislation landscape] is really interesting in this age where everyone and their mother is on social media. So it makes sense that lawmakers have an eye to protect their constituents, and employers are also mindful of the privacy rights of [their] employees and applicants,”
Wrigley says.
She explains that it is also logical for employers to prepare themselves by developing a company social media policy, if they haven’t already.
But employers “need not go with [their] gut” when crafting and deciding specific policies, Bissot advises.
“They need to make sure they are taking the right steps,” she notes. “You don’t want to be the one that defines the case. With social media, it’s new ground, it’s new territory, and you want to make sure you are doing it correctly and appropriately for the culture.”
At the same time, Chodoff, an expert on labor and employment law, agrees that social media policies should leave nothing up to chance or assumption.
“I think social media policies have to be very specific about what employees can and can’t do,” Chodoff says. He warns that a savings clause in policies may also miss the ball when it comes to Section 7 because it may be deemed too broad by the NLRB.
“The NLRB will say that infringes on their Section 7 rights,” Chodoff notes. “So say, ‘you can’t make defamatory comments about people.’ You have to make sure that policy is being very specifically written in regards to what it is prohibiting.”
Is it time for a checkup for your client's 401(k) plan?
As we approach the end of the plan year for most plans, now is a good time for plan administrators and plan sponsors to give their 401(k) plans a quick once over to see if everything is properly in place. The IRS even provides a 401(k) plan checklist with some suggested corrective mechanisms that can be taken to bring plans into compliance.
A good starting place for a compliance tune up is to see if you can answer some basic questions about your plan:
- Who are the trustees?
- Who is the plan administrator?
- Who are the outside service providers and how often are they contacted?
- What are the plan’s eligibility rules and who is responsible for verifying them?
- How are participants notified of eligibility?
- How is plan documentation distributed?
- Where are the plan records kept?
- Who is responsible for preparing and filing the form 5500?
After you get past these, some basic questions about plan administration come into play:
- Who keeps track of contributions and limits?
- How does the plan define “compensation”?
- What is the vesting schedule?
- Are there required contributions from the employer?
- Who is responsible for the discrimination testing?
- Does the plan permit loans and how are they tracked?
- Who is responsible for reporting to participants?
- How are distributions made and who is the contact person?
The reason I bring this topic up is that I was recently working with a client who had one person who was solely responsible for benefit administration. Unfortunately that person passed away suddenly and no other person in the organization could answer any questions about the 401(k) plan. Although it seems like the above information is simple to collect, the company still spent hours and hours recreating the plan history because they neglected to keep a record of how the answers to these questions had changed over the years.
Think of your 401(k) plan as a well maintained car. It needs a check up on a regular basis to keep running smoothly. You have to keep records of what was done and you have to know where the important information is if you need it. Just like your car, you hope your 401(k) plan never breaks down. But in anticipation of a future problem, it is worthwhile to stop and make a record of the responsibility for plan administration and the current status of the plan. That way it will be easier to make repairs if they ever become needed.
8 tips to share with employees to ensure a successful open enrollment
Originally posted on https://ebn.benefitnews.com.
As open enrollment season approaches, benefit managers are moving into high gear as they prepare to answer employee questions and concerns about their 2015 benefits. And as employees take on more responsibility for their health care, it’s more important than ever for them to understand how they can make the most of the programs and benefits their employers are offering.
Here are eight tips from benefits consulting firm Aon Hewitt that benefit managers can share with employees to help ensure open enrollment runs smoothly.
Employers are taking steps to make enrollment quicker and easier. “Many companies are designing the process so it is similar to an online retail shopping experience, where employees can access decision support tools and other resources that can help them narrow down their choices and weigh them against their specific needs,” says Joann Hall Swenson, health engagement leader at Aon Hewitt. “Employers are also stepping up their efforts to clearly communicate what is changing from previous years, using a variety of communication methods.” Encourage employees to take advantage of the resources you provide.
Understanding their past needs and estimating their future needs will help employees determine what adjustments they may need to make in their benefits selections for 2015. Encourage employees to start by reviewing how much they’ve spent in the past year out-of-pocket, the costs of their regular prescriptions and the number of doctor visits they’ve had. If they are participating in a flexible spending account, encourage them to re-evaluate their contribution levels based on their actual and anticipated expenses for 2015. It’s also important to think about any life changes that may impact their decisions, such as an addition to the family or the development of a new medical condition that may impact health care expenses.
Over the past few years, there have been many changes taking place in the provider community, including doctor’s groups joining together and hospitals and health systems re-contracting with insurers. As a result, health plan options may include vastly different combinations of doctors and hospitals than in the past. Most employers and health plans offer a number of tools and resources that can help employees assess the cost impact and quality of different providers as they make their enrollment decisions.
CDHPs often have lower premiums, which make them an attractive option for individuals who want to reduce the costs taken out of their paychecks each month. While employees may have a higher deductible to meet, many employers couple these plans with health reimbursement accounts or health savings accounts, which employees can use to help pay for eligible out-of-pocket health care costs. HSAs are the most common, and allow employees to save money by contributing, on a pre-tax basis, up to $3,350 in 2015 or $6,650 if they have family coverage, with no use-it-or-lose-it rule. In addition, employers may also contribute to the HSA. It’s important for employees to understand how the employer’s contributions work so they can maximize this subsidy.
If an employee’s spouse, partner or adult children have access to health coverage elsewhere, including through their employer, it may be more cost effective for them to enroll in this coverage instead of being covered by you. Encourage employees to carefully review and compare these plans to ensure they are choosing the coverage they need at the most favorable cost.
Many employers offer a wide range of health and wellness programs, such as health assessments, weight loss programs and health coaching, to help employees get and stay healthy. Taking part in these programs can help employees understand their current health status, and they might even be able to take advantage of a financial incentive for doing so.
2015 will be the second year of coverage available to Americans through the marketplaces, commonly referred to as “public exchanges.” In most cases, individuals with coverage through their employer will not be eligible for federal tax credits for purchase of insurance through the marketplaces. Employees can visit healthcare.gov to learn more about the marketplaces.
As employees assess their health plan options for 2015, it’s important for them to look holistically at their health and financial well-being, including health care, income protection (e.g., life and disability insurance) and retirement planning. Does their spending reflect their needs and priorities? For example, if they aren’t contributing to your 401(k) plan, remind them that now might be a good time to start. Beginning to save earlier in their careers will help ensure they’re on track to meet their long-term savings goals.