5 open enrollment communication strategies for your remote workforce

As the employee benefits workforce continues to stay remote in a majority of places, it's important for them to strategize their communication especially as open enrollment season is coming around the corner. Read this blog post for helpful tips.


Even before the COVID-19 pandemic forced many employers to switch from a mostly onsite workforce to a remote or dispersed workforce, employers were faced with effectively and consistently communicating benefits to employees who were located in different locations, whether that meant offices in different cities or countries; work from home employees; employees working in warehouses, factories, and distribution centers; or employees working at different branches of retail or service businesses.

This communication is important because when employees are unaware of what benefits are available or don’t know how to access their benefits, utilization can drop significantly, so neither employees nor employers are getting value from the benefit offerings. In addition, when employees aren’t using or aware of their benefits, satisfaction with employers decline, which can impact both productivity and retention.

The goal is to both effectively and continuously communicate with employees and build awareness and understanding of available benefits, not just during open enrollment, but all year long. Of course, each communication strategy will be shaped by the organization’s culture, but there are several tools that employers should consider including in their benefits communication toolkit.

Diversify your benefits communication tools
Before developing your benefits communications plan, determine how employees prefer to receive this information by surveying them. In most organizations, there will be several different approaches that appeal to employees because of differences in employee ages, locations (office vs. warehouse or delivery truck), and comfort level with technology.

In the past, standard benefits communications were printed materials that were either distributed at work or mailed home. And while this tool is still effective and gives employees something they can use as a reference throughout the year, there are several other tools that employers should consider using to reach their diverse employee audiences.

Dedicated benefits websites and/or mobile apps broaden access to information
Unlike printed materials, with an online benefits site and mobile app employees can access the content wherever they are, whenever they want, and employers can update the information frequently without incurring printing costs. The site can also serve as a convenient way for employees to ask benefits questions, which can be answered by email from an HR team member, a benefits vendor’s support team or for simple, frequently asked questions, by a chatbot.

Email or text?
Employers will most likely need to include both emails and texts in their plans, but these tools may be used in different ways and with different audiences. For example, texts are a good way to reach employees who are younger or more tech savvy as well as those who are on the road a great deal or don’t work at a desk. These messages will be shorter and will focus on prompting employees to take specific actions, such as enrolling in benefits, updating beneficiaries or submitting receipts for reimbursement under an FSA, HSA, or HRA. They can also be used to remind employees about underutilized benefits to drive participation.

Emails can communicate more detailed information and directly link employees to benefits websites and other resources. However, emails should be kept as succinct as possible to ensure that employees are not overwhelmed with information and skip reading the communication.

Open channels for two-way communication
Providing benefits information to employees is only one part of the communication equation. Employees also need frequent opportunities to ask questions and share their thoughts on what they want and need from their benefits plan. That can be harder to make happen for a dispersed workforce, but video-based webinars, town hall meetings and “ask me anything” sessions with members of the benefits team can be effective approaches.

To ensure everyone has access to information regardless of location or job type there should be multiple sessions for different time zones and schedules, and the sessions should be recorded, posted on the company employee site and include the opportunity to email or text in questions for employees who cannot attend a live event.

Try out-of-the-box communication tools to engage employees
In addition to more traditional communication tools, consider trying different formats that make information more digestible and engaging, such as quizzes, polls, short videos, infographics and storytelling. The goal is to keep employees interested in what their benefits offer and what’s new to help them get the most out of their plans.

SOURCE: Varn, M. (14 September 2020) "Views 5 open enrollment communication strategies for your remote workforce" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/list/5-open-enrollment-communication-strategies-for-your-remote-workforce


4 benefits of positive recognition to boost employee engagement

As both employers and employees are facing difficult times both in their work-life and home life due to the circumstances that the coronavirus pandemic has brought into the world, it's important that the negativity does not take place of the positivity needed. Positivity is powerful and can play a critical role in the workplace. Read this blog post for four benefits of positive recognition.


With all that’s happening, it’s easy to become overwhelmed with the negativity in the world. Our emotional state is important at work. Positive emotions transform our minds and increase our ability to bounce back from hard times.

The power of positivity should not be overlooked, and recognition plays a critical role in generating these emotions in a modern workplace. Open acknowledgement and expressed appreciation for employees’ contributions can go a long way.

Improve employee retention
The first benefit of positive employee recognition is improving employee retention. In fact, according to industry analyst Josh Bersin, companies that build a recognition-rich culture actually have a 31% lower voluntary turnover rate.

Gallup research on recognition also shows that employees who don’t feel recognized at work are twice as likely to quit within a year. In today’s current environment where many organizations are driving more productivity with fewer employees, leaders need to ensure that they’re not forgetting to focus on employee retention. You’d be hard-pressed to find an organization that isn’t concerned about retaining top talent right now; top performers will find new opportunities even when they’re hesitant to move.

Creating a workplace where people want to stay isn’t just beneficial for employees; it’s also good for the bottom line. Turnover cost can be difficult to compute, but I challenge you to consider the costs of recruiting, onboarding, training, and the lost institutional knowledge that comes with poor retention.

Increase employee engagement
The second benefit that is particularly important right now is increased employee engagement. Our own research showed that 84% of highly engaged employees were recognized the last time they went above and beyond at work compared with only 25% of actively disengaged employees. We also found that while 71% of highly engaged organizations recognize employees for a job well done, only 41% of less-engaged organizations did so.

Positive recognition is powerful and has a clear tie to engagement. Yet, many organizations still do not adequately measure engagement. When was the last time you measured engagement with your own team? How much opportunity is there to improve through recognition?

Boost employee morale
The third benefit of positive recognition is boosted morale. I already mentioned the transformative effect of positivity, but the simple act of thanking people can make a tremendous difference. When employees were asked about their experience at work,70% said that motivation and morale would improve “massively”with managers saying thank you more.

How did you feel last time you were recognized?

Positivity has an important impact on employees, but it also pays literal dividends to companies that have figured out how to encourage it. Research from author Shawn Achor shows that happiness raises sales by 37% and productivity by 31%. Consider ways you can encourage your team to recognize each other more often.

Leverage peer recognition
It turns out that peer recognition massively outperforms top-down recognition. Peer recognition occurs when individuals give and receive recognition from their peers, managers, and direct reports.

Being recognized by colleagues is incredibly powerful for employees, especially when it’s done publicly. Peer recognition is 36% more likely to have a positive impact on financial results than manager-only recognition, according to SHRM. Managers can’t see every positive action that occurs, so think about how to encourage everyone to participate in recognition of great work across the entire organization.

SOURCE: Crawford-Marks, R. (14 September 2020) "4 benefits of positive recognition to boost employee engagement" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/list/4-benefits-of-positive-recognition-to-boost-employee-engagement


Retirement accounts at ‘serious risk’ as COVID-19 spurs bankruptcies

The coronavirus pandemic has disrupted many things around the world, let it be the workplace, schools, everyday life habits, and it has even disrupted retirement accounts. In the nine months of COVID-19 hitting businesses, bankruptcies and lawsuits have risen and caused many questions. Read this blog post to learn more.


If there’s one thing clients have always relied on in troubled times, it’s that last bastion of savings, the retirement account — whether it be a 401(k) or an IRA.

But we’re now into the ninth month since COVID-19 hit our shores and nothing can be taken for granted. Business closures, bankruptcies and lawsuits from creditors have soared, calling into question even that formerly unassailable bulwark. That’s why it’s crucial that advisors know which accounts can be protected in bankruptcy and in non-bankruptcy lawsuits — and which cannot.

Make no mistake: Not all possess the same safeguards. Retirement accounts carry a number of different protections. These layers of defense shield IRA owners and company plan participants from bankruptcy and general (non-bankruptcy) creditors. In addition, levels of protection vary widely from state to state. In the current environment with so many small businesses on the brink of closing and struggling employees in limbo, increased bankruptcy filings are placing retirement savings at serious risk, especially when these might be the only funds available for a personal bailout.

ERISA plans: The gold standard
Most employer-sponsored retirement plans, such as 401(k)s, fall under the Employee Retirement Income Security Act of 1974 guidelines and receive creditor protection at the federal level. ERISA offers the gold standard of protection up to an unlimited amount against both bankruptcy and non-bankruptcy general creditor claims.

To illustrate, let’s take the hypothetical example of “Mark,” a successful contractor who flips houses. He has a 401(k) plan set up for himself and the employees of his sole proprietorship. Mark’s current plan balance is $1,500,000.

Recently, however, there was an accident at one of his construction sites, and Mark is being sued personally. Even if Mark loses the lawsuit, the assets in his 401(k) remain protected by ERISA up to an unlimited amount. Additionally, if Mark were to declare bankruptcy, his 401(k) would be off limits to bankruptcy creditors.

Going solo = greater exposure
The same protections do not, however, hold for solo 401(k) plans.

Often, business owners worried about potential lawsuits keep their retirement funds in their so-called solo-K because they believe it to be fully creditor proof, as opposed to an IRA.

Butsolo 401(k) plans are not covered by ERISAand have no creditor (non-bankruptcy) protection under that law. Plan balances will only receive non-bankruptcy creditor protection available under applicable state law.

These plans do, however, receive full bankruptcy protection under the bankruptcy code. This is also the case with other non-ERISA company plans such as SEP and SIMPLE IRAs, non-ERISA 403(b) plans and 457(b) governmental plans.

Bankruptcy and IRAs
Traditional and Roth IRA contributions and earnings are protected from bankruptcy under federal law up to an inflation-adjusted cap — currently $1,362,800.

Is this a sufficient limit?

If the maximum amount was contributed to an IRA each year from 1975 to 2020, there would be $141,500 in contributions — $158,500 if the IRA owner qualified for age 50 catch-up contributions available beginning in 2002. It is unlikely that the earnings, even for those who contributed the maximum each year, would push an IRA balance over $1,362,800.

But what about rollovers from plans to IRAs? Do these dollars count against the $1,362,800 cap?

They do not. Former company plan assets (previously protected by ERISA while in the plan) rolled to an IRA will obtain unlimited bankruptcy protection under the bankruptcy code. As an added bonus, rollovers from SEP and SIMPLE plans also do not count against the $1,362,800 cap.

As an example, let’s conjure up “Sheila,” an attorney with a $2,000,000 balance in her company’s ERISA 401(k) plan and a $700,000 balance in her IRA, which is composed entirely of contributions and earnings.

In April, Sheila retired from her law firm and in May rolled her 401(k) into her IRA. Sheila’s IRA is completely shielded from bankruptcy. The bankruptcy code protects her $2 million 401(k) rollover up to an unlimited amount, and the $1,362,800 cap is enough to cover her original IRA balance.

Note that in this example, Sheila did not need to keep her 401(k) and IRA dollars separate to retain the maximum bankruptcy protections. However, from an administrative standpoint, it could make sense for some individuals to keep rollover assets separate via a conduit IRA to avoid confusion.

Lawsuits and IRAs (non-bankruptcy)
General creditor protection (e.g., when a person wins a judgment in court against the account owner) for IRAs, Roth IRAs and IRA-based company plans like SEPs and SIMPLEs is based on individual state law — and these state-level, non-bankruptcy protections vary widely.

As such, it is important to understand your client’s state coverage, especially before advising the client to roll over ERISA plan dollars into an IRA.

As mentioned, ERISA-covered plans enjoy full bankruptcy and general creditor protection. While all former plan dollars remain protected in bankruptcy by the bankruptcy code after a rollover to an IRA, these same dollars do not retain unlimited general creditor (non-bankruptcy) protection. Assets rolled from an ERISA plan to an IRA will now fall under the applicable state-level protections. These state safeguards may be comparable to ERISA levels, or they may be significantly less so.

For instance, the hypotheticalDr. Kapp” changed employers and is deciding what to do with his $400,000 401(k) plan. His profession exposes him to malpractice lawsuits. If Dr. Kapp rolls the assets from his work plan to an IRA, the $400,000 will be fully protected in bankruptcy. However, he will be limited to the general creditor (non-bankruptcy) protections offered under state law.

Instead, Dr. Kapp elects to roll his former plan assets into the 401(k) plan offered by his new employer. That way, he ensures the $400,000 will retain 100% ERISA protection from both bankruptcy claims and any malpractice judgments against him.

Inherited IRAs and bankruptcy
In a landmark decision released in 2014,Clark v. Rameker, the U.S. Supreme Courtruled unanimously that inherited IRAs are not protected in bankruptcy under federal law.

Since only "retirement funds" are protected under the bankruptcy code, the primary issue before the court was whether an inherited IRA is, in fact, a retirement account. The Supreme Court decided that inherited IRAs do not contain “retirement funds” because:

1. Beneficiaries cannot add money to inherited IRAs;

2. Beneficiaries of inherited IRAs must generally begin to take RMDs, regardless of how far away they are from retirement; and

3. Beneficiaries can take total distributions of their inherited accounts at any time and use the funds for any purpose without a 10% early distribution penalty.

As a result, the favorable bankruptcy protection afforded to such funds under the bankruptcy code does not extend to inherited RIAs.

Bankruptcy timing and rollovers in transit
IRAs and retirement accounts protected under the bankruptcy law are generally shielded only as long as the funds remain qualified. Creditors will sit patiently until retirement dollars are withdrawn to snatch them as unprotected assets.

However, these funds remain safeguardedas long as they are qualified dollars. If funds are withdrawn, the law protects these dollars while they are out of the IRA in transit to the new IRA or retirement account. This protection applies to 60-day rollovers as well as trustee-to-trustee transfers. An individual only receives this protection if bankruptcy paperwork was officially filed while the funds were still in the retirement account. Timing is key in such cases. Funds already out on rollover when bankruptcy is declared lose all protection.

IRAs and the LLC shield
IRAs enjoy specific levels of protection against “outside” claims, i.e., claims brought personally against the IRA owner.

But what happens when a claim is brought against an investment within the IRA? The answer is that such “inside” claims may not only devastate the IRA but could also put an IRA owner’s personal non-qualified assets at risk. Inside claims can be mitigated with the use of a limited liability company (LLC).

The imaginary “Blake” owns a self-directed IRA worth $500,000 that invests entirely in a local Jet Ski rental and watersports company. He did not use an LLC within the IRA to acquire the rental business. Blake has other personal assets worth $1.5 million.

Last summer, a Jet Ski renter had an accident and suffered a catastrophic injury. After almost a year of litigation, the renter won a $2 million judgment against the IRA.

All of Blake’s IRA assets could be reached because the claim arose from activities of the IRA investment. His personal assets could also be at risk. But if Blake’s IRA had been invested in an LLC that subsequently purchased the water sports company within the IRA, the LLC structure would have protected both the IRA assets and Blake’s personal assets against the $2 million judgment.

Be keenly aware of outside vs. inside claims and how to mitigate certain risks with an LLC.

Clear and present danger
Add the ongoing COVID-19 outbreak to our litigious society with the increasingly looming possibility of bankruptcies, all under the watchful eye of SEC Reg BI, and educating clients on available safeguards becomes increasingly vital.

That education holds even more true for financial advisors in whom clients have placed their trust and financial futures. Understanding the levels of bankruptcy and non-bankruptcy protections afforded to both workplace retirement plans and IRAs is now a must to safeguard the dreams of post-work life clients have worked so hard to achieve.

SOURCE: Slott, E. (10 September 2020) "Retirement accounts at ‘serious risk’ as COVID-19 spurs bankruptcies" (Web Blog Post). Retrieved from https://www.financial-planning.com/news/retirement-accounts-at-risk-as-coronavirus-spurs-bankruptcies


Fresh Brew With Matthew Bosse

Welcome to our brand new segment, Fresh Brew, where we will be exploring the delicious coffees, teas, and snacks of some of our employees! 

“You will not see satisfactory achievements if no action is taken to get there.”

Matthew Bosse is a Data Analyst at Saxon Financial Services.

Matthew’s journey to becoming a Data Analyst at Saxon began at Sunspot Pool and Patio during his 4-year, academic career. It taught him the importance of professional communication, as well as how to resolve issues for a customer in the best possible way.

In his off time, Matthew spends it with his Mini Goldendoodle named Jameson and with his close family and friends. He also loves to build model cars, go golfing, playing pickup soccer and building fun projects.

Rounding Third

Matthew enjoys sipping on his favorite brew, Rounding Third, while sitting outside at Madtree, relaxing.

Spicy Balls

Matthew enjoys sipping on a Bud Light and snacking on Spicy Balls at Dana Garden.

Give It A Try & Share It!


U.S. employers eye cutting wasteful drugs worth $6 billion

A group of researchers has found that there are medications that could be less expensive alternatives that could be covered by employers based on the benefits provided to employees. Read this blog post to learn more.


A health plan covering thousands of California teachers stopped paying for a diabetes drug that cost $352 per prescription. In its place, the plan now pays less than $13.

The difference? Instead of getting a 1,000-milligram dose of metformin, members got two 500-milligram pills.

It’s just one example of what some employers call “wasteful drugs,” and a coalition of West Coast employers says there are hundreds more. At a time when U.S. President Donald Trump is pushing to trim drug costs for Medicare by tying them to prices in other countries, the coalition is on a crusade to cut company spending on drugs nationwide by simply noting the cheaper choices already available, drawing the ire of drugmakers.

A guidebook produced by the Pacific Business Group on Health and researchers from Johns Hopkins University identifies 49 medications with less expensive alternatives that could be cut from the lists of drugs covered by employers. The group has pushed its approach to large employers for two years. Now it’s focusing on mid-sized companies at conferences, with webinars and through an online Excel sheet designed to help any company identify savings.

Lauren Vela, senior director of member value at the coalition, said it all comes down to who gains in the end. “There are so many folks making so much money on the existing system that the folks who really know how the system works don’t have an interest in changing it,” Vela said by telephone.

Vela presented at three online conferences this summer, and has at least two scheduled for the early fall, she said.

The medications outlined in the guidebook accounted for more than $6 billion in U.S. retail drug spending in 2019, according to data compiled by Bloomberg from Symphony Health. Drugmakers have long been under attack for how they price medications sold in the U.S., and for their efforts to undermine rules on when their products can be sold generically for less.

On Sunday, just weeks before the presidential election, Trump announced he had signed a presidential order on the “most favored nation” plan, which would try to link Medicare Part B and Part D prices to lower prices paid by other countries. In response, groups representing drugmakers said this could hurt their ability to find and test for new medications, while House Speaker Nancy Pelosi said Trump’s action took “no real action” to lower prices.

Researchers aligned with the Pacific Business Group, meanwhile, have analyzed six months of drug use and more than 2.5 million scripts for 15 large self-insured companies. They found that 6% of all claims were for what the report termed “wasteful drugs.”

In the case of just one, the leukemia drug Gleevec, use of generic imatinib could cut the average wholesale price 96%, a savings of $108.28 per pill, according to the report. The group says hundreds of other drugs could be replaced similarly.

“Generic drugs are an important part of the full spectrum of health-care solutions,” said Julie Masow, a spokeswoman for Novartis, the Swiss-based maker of Gleevec.

But the drug, which lost patent protection in the U.S. in 2016, “will remain on the U.S. market to maximize choice for health-care professionals and patients,” Masow said, “and Novartis plans to continue financial support for eligible patients.”

The Pacific Business Group also calls out therapies that combine two existing, cheaper pills into a more expensive single dose. And they urge removing pricey drugs that offer only small changes for the consumer, such as certain extended-release formulations or different dosage concentrations.

Drugmaker pushback
While the Pacific Business Group’s guidebook is gaining support among companies, PBMs — which administer drug plans — and pharmaceutical companies are pushing back.

Drugmakers are taking issue with characterizing drugs as “wasteful.”

“Decision-making power on what medicines patients should take should rest with doctors,” Katie Koziara, a spokeswoman for the Pharmaceutical Research and Manufacturers of America, said in an email.

Koziara said her group favors reforming the rebate system “to help correct PBMs and payers’ misaligned incentives,” boost transparency and share rebates directly with patients.

A trade group for PBMs, meanwhile, disputed the Pacific Business Group’s guidebook, saying it was based on limited data.

Greg Lopes, a spokesman for the Pharmaceutical Care Management Association, called the reports “dated” and said, “PBMs are the only entity in the supply chain reducing drug costs for consumers.”

Pharmacy benefit managers negotiate with drug manufacturers on behalf of employers, determining which drugs should be covered. But the employers say that the way PBMs’ services are sold makes it tough to tell whether they’re really saving money.

PBMs and consultants will typically present a spreadsheet that shows administrative fees, discount off-list prices, and rebate payments. The rebates flow from drugmakers to PBMs and ultimately back to plan sponsors, like employers or unions.

But Vela says employers often can’t easily tell if PBMs retain a portion of the rebates or other payments that incentivize them to keep expensive drugs on the formulary. “You’re hiring an entity to negotiate on your behalf, and the party with whom they’re negotiating is giving them money you don’t know about,” Vela said.

As the PBM business model has come under more scrutiny, benefit managers have pledged to be more transparent with rebates and pass them back to employers.

After recent mergers, the three largest PBMs are now part of companies that also own health insurers, pharmacies and other medical providers: UnitedHealth Group’s OptumRx; CVS Health Caremark; and Cigna Express Scripts.

None of the three leading PBMs would comment on the guidebook analysis.

The array of discounts and rebates PBMs tout to their clients often obscures the fact that employers are paying for high-priced drugs when lower-cost alternatives exist, according to Thomas Cordeiro, a co-author of the guidebook and president of consultant Integrity Pharmaceutical Advisors.

“Just because you have a high rebate doesn’t mean your cost is going to be low,” Cordeiro said.

SOURCE: Bloomberg News. (14 September 2020) "U.S. employers eye cutting wasteful drugs worth $6 billion" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/articles/u-s-employers-eye-cutting-wasteful-drugs-worth-6-billion


Strategies for maintaining employee trust during executive turnovers

While being in the midst of the COVID-19 pandemic, it's important to keep employee trust and confidence intact. As there may be turnovers and layoffs happening with executives, it's key to communicate with employees that their employers are listening. Read this blog post to learn more.


As businesses struggle with the obstacles of maintaining a new workplace normal in the midst of the coronavirus crisis, ambiguity and unpredictability can threaten employee trust and confidence.

Sweeping layoffs across all industries are putting more pressure on that delicate relationship between employers and employees. Employers increasingly must reassure employees about their job security and the stability of the company, and how they respond will have long-term ripple effects on loyalty and potential turnover, experts say.

“A CEO’s exit or a round of layoffs can have a detrimental effect on employee retention and well-being if not addressed properly,” says Laura Hamill, chief science officer and chief people officer at Limeade, an employee experience company. “It’s important to show employees as soon as possible that you are listening, that you understand their concerns, and that you are working to address them.”

Just before the virus took root in the U.S., former Walt Disney CEO Bob Iger unexpectedly stepped down at the end of February. Around the same time, Expedia laid off 12% of its global workforce, which came on the heels of Wayfair’s January layoffs. Online travel agency Booking announced in early April that CEO Glenn Fogel has tested positive for coronavirus but still plans to continue with his responsibilities.

These major changes can create a lot of uncertainty within an organization, leaving HR and senior leadership in charge of keeping the business on track and reducing employee turnover.

“CEO shake ups [and layoffs] can create two disharmonies,” says Dania Shaheen, vice president of people operations at Kazoo, an employee experience platform. “There is always a lot of noise created with things like this, gossip about why someone stepped down. This tends to be very distracting from what the business is actually doing.”

The often abrupt departure of a CEO can also lead to a shift in strategy, Shaheen says. While a CEO’s vision for a company can be a rallying cry within the organization when that changes, it can upset the company culture. But there are steps employers can take to get out ahead of this.

In the case of Disney, Iger has remained on board to insure the strategy he has established remains in place. This can help ensure a smoother transition of power.

“The more transparent [a company is] and the more open they are internally about what’s going on is going to be key,” Shaheen says.

Frequent and open communication is another necessity for employers during times of business tumult, Hamill says. By planning for the worst-case scenario and having a clear communication policy, organizations can address employee concerns, collect feedback, gauge sentiments, and implement change quickly. Employers shouldn’t wait until they have all of the answers buttoned up.

“When a major change occurs, organizations need to put employees first,” Hamill says. “Be transparent with employees and offer two-way communication – ensure that people feel supported. This needs to come from all angles — from leaders, managers, and internal teams like human resources.”

An organization’s culture is only as strong as the example being set by its senior leadership. In response to mass layoffs and financial losses, many CEOs and other executives have decided to take pay cuts or forego their salaries. New Disney CEO Bob Chapek will take a 50% pay cut, while Iger — who remains with the company as executive chairman — will forgo his entire salary.

Dick's Sporting Goods announced that CEO Ed Stack and President Lauren Hobart will forgo their salaries and Marriott CEO Arne Sorenson will not take home any salary for the rest of the year. The rest of the executive team will take a 50% pay cut.

When organizations set an example that you’re focused on protecting your employees, it will instill trust and create a more loyal workforce.

“Culture is absolutely critical for growth and success and you want to make sure that the culture stays steady,” Shaheen says. “You have to make sure you’re continuing to build a very purpose driven culture.”

SOURCE: Schiavo, A. (06 April 2020) "Strategies for maintaining employee trust during executive turnovers" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/news/strategies-for-maintaining-employee-trust-during-executive-turnovers


Employers Still Hiring During Coronavirus Pandemic

As many companies begin to temporarily close their doors due to the  COVID-19 pandemic, there are several companies that are beginning to hire mass amounts of employees. Although employers run the risk of hiring effectively, they are in need of employees. Read this blog post to learn more.


When one door closes, even temporarily, another often opens. As people practice social distancing to avoid contracting COVID-19—the disease caused by the coronavirus—restaurants, bars and retailers across the U.S. are closing their doors and laying off tens of thousands of workers. But needs must be met, so online sellers and a host of other businesses are mass hiring for delivery, security, warehousing and distribution personnel.

Amazon announced a push to add 100,000 workers to address customer need. National grocery chains are ramping up hiring for delivery staff, Walmart is looking for more than 1,000 distribution-center workers, and health care providers are ramping up hiring to address the expected surge in patients. Retailers and pizza chains are boosting their payrolls to meet takeout and delivery demand, even as their locations are closed to guests. A security company just announced mass hiring to fill full- and part-time security vacancies to help provide public-safety services.

The challenge for these organizations will be to hire quickly and effectively at scale, without putting recruitment professionals and the public at risk. Technology is driving the effort. Online applications, video interviewing, online onboarding and more are being leveraged to enable fast, effective hiring.

Meeting the Need—Safely

Josh Tolan, CEO of video-interviewing company Spark Hire, said, "Technology gives hiring pros a huge leg up in their processes. Especially during this pandemic, tools like video interviews and online applications achieve the goals of continuing recruitment efforts, learning more about applicants and speeding up the hiring process—all from an appropriate social distance."

Amy Champigny, senior product marketing manager at Deltek, a software provider for project-based work, said that competition for workers may require employers to actively self-promote. "Organizations should focus on posting job requisitions online and focus on boosting their LinkedIn branding, as well as employer presence, during this time," she said. She recommended that employers, along with making sure their brand is visible, move candidates through the hiring process as quickly as possible. "Businesses should consider candidate pools to speed up recruiting cycles for all roles and especially critical, hard-to-fill positions."

Many companies are practiced in mass hiring, said Peter Baskin, chief product officer at recruitment software company Modern Hire. "Similar to mass hiring for seasonal positions, companies should adopt purpose-built, on-demand text and video interviewing tools," he said. "This will allow them to reach a larger audience of candidates, provide candidates with the information needed about the open jobs, allow for both parties to complete the interviewing process quicker, and, in return, roles can be filled at a faster rate."

From Start to Finish

Effectively employing technology in hiring begins with an online application process that's seamless and at scale. Baskin suggested that recruiters work from home whenever possible, utilizing on-demand text and video technology instead of scheduling in-person interviews.

"HR teams must ensure any technology they use—whether for recruitment, prehire assessments or video interviewing—is purpose-built, not only for the task at hand, but also for the specific company and industry in which they operate," he said.

"From home," Tolan said, "candidates can conduct one-way video interviews that they record on their own time and the hiring team can review at their convenience, as well." Further along in the process, he added, "live video interviews allow the hiring team to connect with the candidate face to face without the handshake and any potential exposure to the [coronavirus]."

Good Hires vs. Fast Hires

Even when time is of the essence, quality can't be ignored. Many organizations use prehire assessment questions, which a candidate can answer during the video application process. These allow recruiters to quickly make a determination on moving the job seeker through to the next step.

For some organizations, artificial intelligence is being leveraged to boost hiring metrics. "Data-driven insights can predict hiring success by measuring personality traits and problem-solving skills," Tolan said, "and compare candidates to job benchmarks customized for your company."

Onboarding at Scale

When candidates are selected, onboarding at scale is the next hurdle for organizations. "Onboarding needs to be standardized and repeatable to help organizations onboard a greater number of candidates during periods of growth or at scale," Champigny said. "Comprehensive [applicant tracking system (ATS)] solutions include onboarding portals to help companies provide a consistent experience for new hires, while ensuring that those new hires have a good experience as they come through the door."

SOURCE: O'Donnell, R. (29 March 2020) "Employers Still Hiring During Coronavirus Pandemic" (Web Blog Post). Retrieved from https://www.shrm.org/ResourcesAndTools/hr-topics/talent-acquisition/Pages/Employers-Still-Hiring-During-Coronavirus-Pandemic.aspx


Labor Department Is Now Enforcing Coronavirus Paid-Leave Rules

As the U.S. Department of Labor gave employers sufficient time to comply with paid-leave through the Families First Coronavirus Response Act, many businesses can provide paid-sick-leave for employees if it is needed. Read this blog post to learn more.


The U.S. Department of Labor (DOL) initially gave employers time to comply with coronavirus-related paid-sick-leave and paid-family-leave mandates and correct mistakes without facing scrutiny, but the department has officially ramped up its enforcement efforts.

Under the Families First Coronavirus Response Act (FFCRA), many businesses with fewer than 500 employees must provide up to 80 hours of paid-sick-leave benefits if employees need leave to comply with a self-quarantine order or care for their own or someone else's coronavirus-related issues. The act also provides emergency paid family leave for parents who can't work because their children's schools or child care services are closed due to the pandemic.

The FFCRA's paid-leave provisions took effect April 1 and expire on Dec. 31. The DOL announced on April 20 that the nonenforcement period had officially ended, and the department issued its first enforcement order shortly thereafter. An electrical company based in Tucson, Ariz., was ordered to compensate an employee who was denied paid sick leave after he showed coronavirus symptoms and was told by a doctor to self-quarantine. The employer was ordered to pay the worker $1,600, which covered his full wages ($20 an hour) for 80 hours of leave.

"This case should serve as a signal to others that the U.S. Department of Labor is working to protect employee rights during the coronavirus pandemic," said Wage and Hour District Director Eric Murray in Phoenix. "We encourage employers and employees to call us for assistance to improve their understanding of new labor standards under the [FFCRA] and use our educational online tools to avoid violations like those found in this investigation."

We've rounded up articles and resources from SHRM Online on the FFCRA.

Paid-Sick-Leave Details

Under the FFCRA, covered employers will have to provide up to 80 hours of paid-sick-leave benefits if an employee:

  1. Has been ordered by the government to quarantine or isolate because of COVID-19.
  2. Has been advised by a health care provider to self-quarantine because of COVID-19.
  3. Has symptoms of COVID-19 and is seeking a medical diagnosis.
  4. Is caring for someone who is subject to a government quarantine or isolation order or has been advised by a health care provider to quarantine or self-isolate.
  5. Needs to care for a son or daughter whose school or child care service is closed due to COVID-19 precautions. (This leave can be combined with emergency paid family leave.)
  6. Is experiencing substantially similar conditions as specified by the secretary of health and human services, in consultation with the secretaries of labor and treasury.

Paid sick leave must be paid at the employee's regular rate of pay, or minimum wage, whichever is greater, for leave taken for reasons 1-3 above.  Employees taking leave for reasons 4-6 may be compensated at two-thirds their regular rate of pay, or minimum wage, whichever is greater. Part-time employees are eligible to take the number of hours they would normally work during a two-week period. Under the legislation, paid sick leave is limited to $511 a day (and $5,110 total) for a worker's own care and $200 a day (and $2,000 total) when the employee is caring for someone else.

(SHRM Online)

Family Leave and Sick Leave Work Together

The Emergency Family and Medical Leave Expansion Act (EFMLEA), which is part of the FFCRA, provides paid leave to parents who can't work because their children's schools or child care services are closed due to the pandemic.  An employee may take paid sick leave for the first 10 days of leave or substitute any accrued vacation, personal leave or sick leave under an employer's policy. For the following 10 weeks, the individual will be paid at an amount no less than two-thirds of the regular rate of pay for normally scheduled hours. The individual will not receive more than $200 per day or $12,000 for 12 weeks that include paid sick leave and EFMLEA leave, the DOL stated. As of April 1, workers who have been on the payroll for at least 30 calendar days are eligible for paid family leave benefits.

(SHRM Online)

More Guidance

Many employers and workers have been confused about how to apply the law or access its benefits, so the DOL has been regularly releasing compliance information and updating its Q&A document. In addition to temporary regulations, the DOL released a fact sheet for employees and a fact sheet for employers. The department also provided model workplace posters for nonfederal employers and federal employers that are covered by the mandate. The DOL will continue to add resources to its website, so employers should keep checking for updates. "Please continue to use our website as a primary source of information," said DOL Wage and Hour Division Administrator Cheryl Stanton.

(SHRM Online)

Answers to the Most Common Coronavirus Questions

Would an employee who is afraid of coming to work and contracting COVID-19 be eligible for paid sick leave? Are nonprofit organizations required to comply with the FFCRA? How do the new requirements interact with collective bargaining agreements? Here are some answers to FFCRA and other common coronavirus questions.

(SHRM Online)

SOURCE: SHRM. (28 April 2020) "Labor Department Is Now Enforcing Coronavirus Paid-Leave Rules" (Web Blog Post). Retrieved from https://www.shrm.org/ResourcesAndTools/legal-and-compliance/employment-law/Pages/Labor-Department-Is-Now-Enforcing-Coronavirus-Paid-Leave-Rules.aspx


New direct primary care rules are a tough pill for HSAs

For many Americans, direct primary care has taken control of medical costs, which has cut through many frustrating options and has created a peach of mind when it comes to both health and its costs. Read this blog post to learn more


As an employee benefits attorney and compliance consultant, last summer’s executive order on “improving price and quality transparency in American healthcare to put patients first” piqued my interest. In particular, I honed on in section 6(b), aimed at treating expenses related to direct primary care arrangements as eligible medical expenses.

As someone dealing with a complicated medical history, digging into the order and digesting the resultant proposed IRS rule was more than my job – it was and is part of my life.

Several years ago, I decided to give direct primary care a try. For about $100 a month, I gained direct access to and the undivided attention of a physician who knows me and my unique medical needs. I pay a flat, upfront fee and my doctor coordinates and manages my treatment, which isn’t always smooth sailing for someone dealing with a complex connective tissue disorder. My primary care physician serves as the coach and quarterback of my medical care, directing tests, meds, and visits to various specialists like rheumatologists or neurologists. If I have a common cold or infection, she’s readily available to prescribe treatment and set my mind at ease.

Since arriving on the scene in the 2000s, direct primary care has grown in popularity and availability. In the age of skyrocketing monthly premiums and a multitude of confusing options, more Americans are flocking to direct primary care to supplement their existing coverage. Some employers are even looking at it to drive down costs.

Now, direct primary care only covers, well, primary care, so I’ve paired it with a high-deductible healthcare plan and a health savings account to pay for my many additional medical expenses. I’m not alone: more than 21 million Americans are following the same path.

However, rather than making direct primary care more accessible, the proposed regulations actually make it virtually impossible for all of us with HSAs. Remember, by law, to qualify for an HSA, individuals must be covered by a high deductible health insurance plan. The rationale for this is consumers with more on the line are more responsible in controlling their health care costs and thus rewarded with the tax-advantaged benefits of an HSA.

Here’s the problem: the proposed regulations define direct primary care as a form of insurance – one that is not a high-deductible health plan and would therefore disqualify me from having access to an HSA.

Regulators point out that direct primary care arrangements provide various services like checkups, vaccinations, urgent care, lab tests, and diagnostics before the high deductible has been satisfied. According to the preamble to the proposed regulations, “an individual generally is not eligible to contribute to an HSA if that individual is covered by a direct primary care arrangement.”

Keep in mind, 32 states consider direct primary care a medical service rather than a health plan and exempt it from insurance regulation. Even the Department of Health and Human Services shares that view, noting in a March 12, 2012, final exchange rule that “direct primary care medical homes are not insurance.” In addition, the proposed rule itself includes some contradictory language and implications when it comes to defining direct primary care relating to other factors.

By its very nature, direct primary care is a contract between patient and physician without billing a third party. In cutting out the insurance companies, it seems obvious that direct primary care is not a competing insurance plan, but instead, a valuable service that can accompany existing coverage.

Furthermore, there is no clear justification for painting direct primary care as disqualifying medical insurance for those with HSAs. The IRS has more than enough flexibility and discretion to determine that direct primary care does not count as insurance. Regulators could do so while still treating direct primary care as a tax-deductible medical expense, which seems to be the intention of the proposed rule in the first place.

For millions of Americans, direct primary care has been a godsend in taking control of medical care, cutting through frustrating options, and gaining peace of mind when it comes to both health and healthcare costs. In short, direct primary care is everything primary care should be and was supposed to be. It’s an option that individuals should be permitted to access to complement (not compete with) high deductible health insurance plans and HSAs.

Although the comment period for the proposed regulations is now over, I am hopeful with a few tweaks and small changes they can better align with the stated purpose of the executive order, empowering patients to choose the healthcare that is best for them. If not, the new rules would likely be a hard pill to swallow for the entire direct primary care community.

SOURCE: Berman, J. (26 August 2020) "New direct primary care rules are a tough pill for HSAs" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/new-direct-primary-care-rules-are-a-tough-pill-for-hsas


Views: Mitigating COVID-19’s catastrophic impact on retirement readiness

As the coronavirus has placed many financial worries onto families, it has also placed a sense of worries for those that are planning for their retirement. Read this blog post to learn more.


It’s bad enough that more than 50 million Americans have filed claims for unemployment benefits since the start of the COVID-19 pandemic and lockdown. But in addition to the disruption, financial hardship, and uncertainty that unemployed Americans (and their families) are experiencing right now, this crisis also threatens their financial security during retirement.

As I have written many times before in this column, defined contribution plan participants will seriously diminish their retirement savings if they prematurely cash out all or part of their 401(k) savings account balances. According to our research, a hypothetical 30-year-old who cashes out a 401(k) account with $5,000 today would forfeit up to $52,000 in earnings they would have accrued by age 65, if we assume the account would have grown by 7% per year. In addition, the Employee Benefit Research Institute (EBRI) estimates that the average American worker will change employers 9.9 times over a 45-year period. With at least 33% and as many as 47% of plan participants cashing out their retirement savings following a job change, according to the Savings Preservation Working Group, that means workers switching jobs could cash out as many as four times over a working career, devastating their ability to fund a secure retirement.

Even before COVID-19 and “social distancing” became part of the national lexicon, cash-outs posed a huge problemto Americans’ retirement prospects. At the beginning of this year, EBRI estimated that the U.S. retirement system loses $92 billion in savings annually due to 401(k) cash-outs by plan participants after they change jobs.

These alarming trends were uncovered long prior to the pandemic and lockdown. Since the start of the COVID-19 outbreak, theCoronavirus Aid, Relief, and Economic Security (CARES) Act stimulus has temporarily eased limits, penalties, and taxes on early withdrawals from retirement savings accounts made by December 31, 2020. While the CARES Act measures are clearly well-intentioned, participants who take advantage of these provisions risk creating a long-term problem while resolving short-term liquidity needs.

Heightening the temptation to make 401(k) withdrawals is the recent expiration of another CARES Act provision—the extra $600 weekly payments to Americans who lost their jobs due to the COVID-19 pandemic. These additional federal unemployment benefits expired at the end of July, and as of this writing no deal to extend them has been reached in Congress. For Americans who had been relying on this benefit, or continue to experience financial hardship and stress about paying expenses, it is understandable that 401(k) savings could look like an attractive source of emergency liquidity.

However, given the long-term damage that cash-outs inflict on retirement outcomes, plan sponsors and recordkeepers should take this opportunity, as fiduciaries, to educate their current and terminated participants about the importance of tapping into their 401(k) savings only as an absolute last resort.

Institutionalizing portability can help

The lack of a seamless process for transporting 401(k) assets from job to job causes many participants to view cashing out as the most convenient option. And without an easy way to locate the mailing addresses of lost and missing terminated participants, sponsors and recordkeepers are unable to ensure holders of small accounts receive notifications about the status of their plan benefits.

Fortunately for participants, sponsors, and recordkeepers, technology solutions enabling the institutionalization of plan-to-plan asset portability have been live for three years. These innovations include auto portability, the routine, standardized, and automated movement of a retirement plan participant’s 401(k) savings account from their former employer’s plan to an active account in their current employer’s plan.

Auto portability is powered by “locate” technology and a “match” algorithm, which work together to find lost and missing participants, and initiate the process of moving assets into active accounts in their current-employer plans.

By adopting auto portability, sponsors and recordkeepers can not only discourage participants from cashing out, but also eliminate the need for automatic cash-outs. And these advantages come at a time when the hard-earned savings of tens of millions of Americans are at risk of being removed from the U.S. retirement system.

Before the COVID-19 pandemic, EBRI estimated that if all plan participants had access to auto portability, up to $1.5 trillion in savings, measured in today’s dollars, would be preserved in our country’s retirement system over a 40-year period. Now more than ever, the institutionalization of portability by sponsors and recordkeepers is essential for helping Americans achieve financial security in retirement.

SOURCE: Williams, S. (31 August 2020) "Mitigating COVID-19’s catastrophic impact on retirement readiness" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/how-to-mitigate-covid-19s-potentially-catastrophic-impact-on-retirement-readiness