Oct. 15 Deadline Nears for Medicare Part D Coverage Notices
Are you prepared for the Medicare Part D coverage notice deadline? Plan sponsors that offer prescription drug coverage must provide notices to Medicare-eligible individuals before October 15. Read on to learn more.
Plan sponsors that offer prescription drug coverage must provide notices of "creditable" or "non-creditable" coverage to Medicare-eligible individuals before each year's Medicare Part D annual enrollment period by Oct. 15.
Prescription drug coverage is creditable when it is at least actuarially equivalent to Medicare's standard Part D coverage and non-creditable when it does not provide, on average, as much coverage as Medicare's standard Part D plan.
The notice obligation is not limited to retirees and their dependents covered by the employers' plan, but also includes Medicare-eligible active employees and their dependents and Medicare-eligible COBRA participants and their dependents.
Background
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires group health plan sponsors that provide prescription drug coverage to disclose annually to individuals eligible for Medicare Part D whether the plan's coverage is creditable or non-creditable.
The Centers for Medicare & Medicaid Services (CMS) has provided a Creditable Coverage Simplified Determination method that plan sponsors can use to determine if a plan provides creditable coverage.
Disclosure of whether their prescription drug coverage is creditable allows individuals to make informed decisions about whether to remain in their current prescription drug plan or enroll in Medicare Part D during the Part D annual enrollment period.
Individuals who do not enroll in Medicare Part D during their initial enrollment period, and who subsequently go at least 63 consecutive days without creditable coverage (e.g., because they dropped their creditable coverage or have non-creditable coverage) generally will pay higher premiums if they enroll in a Medicare drug plan at a later date.
Who Must Receive the Notice?
The notice must be provided to all Medicare-eligible individuals who are covered under, or eligible for, the sponsor's prescription drug plan, regardless of whether the plan pays primary or secondary to Medicare. Thus, the notice obligation is not limited to retirees and their dependents but also includes Medicare-eligible active employees and their dependents and Medicare-eligible COBRA participants and their dependents.
Notice Requirements
The Medicare Part D annual enrollment period runs from Oct. 15 to Dec. 7. Each year, before the enrollment period begins (i.e., by Oct. 14), plan sponsors must notify Medicare-eligible individuals whether their prescription drug coverage is creditable or non-creditable. The Oct. 15 deadline applies to insured and self-funded plans, regardless of plan size, employer size or grandfathered status.
Part D eligible individuals must be given notices of the creditable or non-creditable status of their prescription drug coverage:
- Before an individual's initial enrollment period for Part D.
- Before the effective date of coverage for any Medicare-eligible individual who joins an employer plan.
- Whenever prescription drug coverage ends or creditable coverage status changes.
- Upon the individual's request.
According to CMS, the requirement to provide the notice prior to an individual's initial enrollment period will also be satisfied as long as the notice is provided to all plan participants each year before the beginning of the Medicare Part D annual enrollment period.
| An EGWP exception
Employers that provide prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP) are not required to provide the creditable coverage notice to individuals eligible for the EGWP. |
The required notices may be provided in annual enrollment materials, separate mailings or electronically. Whether plan sponsors use the CMS model notices or other notices that meet prescribed standards, they must provide the required disclosures no later than Oct. 14, 2017.
Model notices that can be used to satisfy creditable/non-creditable coverage disclosure requirements are available in both English and Spanish on the CMS website.
Plan sponsors that choose not to use the model disclosure notices must provide notices that meet prescribed content standards. Notices of creditable/non-creditable coverage may be included in annual enrollment materials, sent in separate mailings or delivered electronically.
| What if no prescription drug coverage is offered?
Because the notice informs individuals whether their prescription drug coverage is creditable or non-creditable, no notice is required when prescription drug coverage is not offered. |
Plan sponsors may provide electronic notice to plan participants who have regular work-related computer access to the sponsor's electronic information system. However, plan sponsors that use this disclosure method must inform participants that they are responsible for providing notices to any Medicare-eligible dependents covered under the group health plan.
Electronic notice may also be provided to employees who do not have regular work-related computer access to the plan sponsor's electronic information system and to retirees or COBRA qualified beneficiaries, but only with a valid email address and their prior consent. Before individuals can effectively consent, they must be informed of the right to receive a paper copy, how to withdraw consent, how to update address information, and any hardware/software requirements to access and save the disclosure. In addition to emailing the notice to the individual, the sponsor must also post the notice (if not personalized) on its website.
| Don't forget the disclosure to CMS
Plan sponsors that provide prescription drug coverage to Medicare-eligible individuals must also disclose to CMS annually whether the coverage is creditable or non-creditable. This disclosure must be made no more than 60 days after the beginning of each plan year—generally, by March 1. The CMS disclosure obligation applies to all plan sponsors that provide prescription drug coverage, even those that do not offer prescription drug coverage to retirees. |
SOURCE: Chan, K.; Stover, R. (10 September 2018) "Oct. 15 Deadline Nears for Medicare Part D Coverage Notices" (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/medicare-d-notice-deadline.aspx/
Here’s how HR pros can breeze through open enrollment
Does open enrollment make your HR department tremble with fear? Open enrollment season is right around the corner and can make the most experienced HR professionals shudder. Read on to learn how your HR department can breeze through open enrollment this year.
Three words have the power to make the most experienced HR professional shudder: open enrollment season.
Open enrollment season is a challenge, no matter how well the HR department prepares. Costs for medical and pharmacy benefits continue to rise, which means there are adjusted employee contributions to present to an audience who’s unlikely to understand the reasoning behind cost increases. There may be new benefits offerings that require employees to pay close attention during the decision-making process. There are open enrollment education campaigns and communications meetings to plan and launch.
Employers with multiple generations of workers must accommodate a wide range of health and welfare benefit needs. New laws (like the federal tax law) plus evolving regulations around benefits add more to HR’s already full plate. (No wonder you don’t have time for lunch.)
But, there’s good news. First, open enrollment is made easier if you plan throughout the year for it. Second, these four tips can help HR professionals make open enrollment much easier.
Review trends and projections ASAP. Focus on the renewal rate long before the renewal date. If your employee benefits renew at the beginning of the year, you may not have received your rate yet. But frankly, by now you should have a very good idea where the rate is projected to land. Reviewing claims and trend data alongside benchmarking and industry analyses throughout the year can help you and your broker project, within a few percentage points, how your renewal rate will increase or decrease.
Your benefits broker should be analyzing your program data on an ongoing basis to estimate the renewal rate and avoid a nasty surprise. The broker should also challenge the first carrier rate offered — there’s almost always room for negotiation. Doing pre-renewal work throughout the year can help you prepare for plan changes and position you to make the best decisions for the organization and employees. It will also help facilitate a smoother open enrollment season.
Keep new benefit options simple. After reviewing benefits and trends, you may find that adding a pre-tax benefit, such as a health savings account, flexible spending account or a health reimbursement account, can help the organization save money while giving employees a way to better plan their healthcare and finances. However, with their alphabet soup acronyms, HSAs, FSAs and HRAs are confusing. Even if you did a whole campaign on the topic for the last open enrollment season, it makes sense to repeat it.
The same goes for voluntary benefits: keep them simple. There is a dearth of voluntary benefits available for a multi-generational workforce. While adding voluntary benefit sounds appealing —especially if your core benefits are changing — which products are right for your organization? Survey your employees to get their feedback; they’ll appreciate that you’re asking for their opinion. Once you tally the feedback, resist the urge to offer a slew of voluntary products. Keeping it simple means adding the one (or a few) that are most desired by your workforce.
Voluntary benefits require significant education and engagement — especially products that are newer to the market. (Student loan debt assistance is a good example.) When it comes to a successful voluntary benefits program, timing is everything. If you plan to add student loan debt repayment, pet insurance, long-term care, or any other new voluntary product, the open enrollment season is not the recommended time to do it. Running a voluntary education and communications campaign and open enrollment off cycle will allow employees to focus on their main menu of options during the open enrollment season, then decide later what they want to add for “dessert.”
Educate. Rinse and repeat. You offer employee benefits to help recruit and retain the best talent. But if your employees don’t understand the core and voluntary benefits you offer, you’re unlikely to increase engagement or retention — and you might even see costs rise.
The health and welfare benefits landscape is changing drastically, which means the onus is on the employer and the HR department to educate the workforce on how the plan is changing (if at all). This means putting decision-support tools, such as calculators, in employees’ hands to help them estimate how much insurance they will need to make the best decision. You could run a whole campaign around that topic.
In addition, try using new methods of communication such as social media messages, text messaging, small-group meetings, your company’s intranet, and one-on-one sessions to help employees avoid mistakes at decision time.
Create a 21st-century experience. Manual benefits enrollment and tracking is so 1999. Moving away from paper-based enrollment will save trees — and possibly your sanity — during the open enrollment season and throughout the year. Benefits administration technology allows employees to ponder their options and enroll at their leisure. A decision-support platform enables better enrollment tracking and eliminates typos and mistakes that can pose major issues for the plan participant and the HR team.
Benefits administration technology provides checks and balances that streamline important tactical functions. Mistakes can put you in a world of hurt when it comes to benefit laws and regulations, such as missing those all-important annual HIPAA and COBRA notifications. You can avoid potential government penalties, fines and employee lawsuits with automatic notifications by the benefits administration platform. Technology can also help you identify ineligible dependents, provide employee data to a COBRA provider if employment ends, interface with your payroll platform — the list is almost endless.
The bottom line: Employees won’t enroll in what they don’t understand — which could lead them to choose a benefits plan that is more expensive, or with fewer options, than what they need. Being prepared for open enrollment season, keeping plans simple, focusing on employee education and communications (and the employee experience) can help mitigate issues for plan participants and HR.
Putting all of your ducks in a row throughout the year will ease headaches during the open enrollment season. You might even be able to take a lunch break.
SOURCE: Newman, H (30 August 2018) "Here’s how HR pros can breeze through open enrollment" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/how-human-resources-can-breeze-through-open-enrollment?feed=00000152-a2fb-d118-ab57-b3ff6e310000
How to evaluate an applicant tracking system
How are you evaluating applicant tracking systems? Applicant tracking systems (ATS) are supposed to fix any inefficiencies in your recruiting process. Read this blog post to learn more.
Unemployment is at 3.9%, a 17-year low. Competition for talent is fierce, especially when you’re trying to hire sellers, mid-level managers, professional staff and skilled labor. When hiring gets this tough, inefficiencies in your recruiting process that could otherwise be ignored will become code red emergencies.
Applicant tracking systems (ATS) are supposed to fix those problems. Some do; many don’t. To tell the difference, HR professionals must do their research. Here are the three most important questions to ask before you invest in an ATS.
1. Will the ATS help or hurt my employment brand? If you’re not an employee at Google or Apple, you’ve probably daydreamed about having your own nap pod in Silicon Valley or being toted around in an automated car. You know the amazing benefits and the free-spirited culture at these organizations. That’s employment brand. Granted, not every organization can hope for Google-level brand awareness, but every company — for better or worse — has a brand of their own, made up of every interaction and detail of the recruiting and hiring process.
See also: What’s ahead for HR technology?
You should know that most ATS are made by software engineers, not recruiters. The downside there is that most systems don’t deliver a candidate experience designed to convey an impression of what it would be like to work for your company. If your ATS isn’t helping bolster your employment brand, it’s not working hard enough.
To ensure that candidates can get a feel for your company culture before they even submit an application, you’ll want to find an ATS that can offer fully-branded career pages that match your website. This means having the same colors, fonts, brand messaging and imaging will be crucial to your employment brand. And this is only the beginning. Your ideal ATS should allow you to integrate with major job boards and social media platforms (branding 101: Hang out with the cool kids), allow for one click application submission through mobile devices and keep the application process all in one browser No one wants their employment brand to be “clunky” and “unfriendly”.
2. Will the ATS help speed up the process or will it slow us down? Recruiters and hiring managers either love or hate their ATS. There’s not much middle ground. That’s because they often have to invent ingenious workarounds to use the system, which drives them crazy because it’s time wasted.
See also: LinkedIn voice messaging aims to connect HR with job seekers
When searching for the right ATS system, make sure that it can provide customizable email templates for hiring teams during the recruiting process. It’s important to remember that the system should allow you to send those emails in bulk to potential candidates. You need to be able to set reminders and schedule alerts for users to follow up with candidates or completed tasks. This ensures that you’re saving time and no candidate gets lost in the ether.
Know that dashboards are a great way to get a bird’s eye view on the recruiting process but they’re not the end all. Plenty of HCM providers will have flashy demos and dashboards that seem to work flawlessly, but after implementation you’ll be left with a clunky and glitchy product.
To avoid that outcome, ask these questions during your search: Can we see the step-by-step process for reviewing applications, approving candidates, and moving them through interviews? Look beyond the demo screens. You want to see how the system really works, step by step. Can we import and export candidate information? How are potential candidates scored?
3. Does the ATS offer compliance and reporting capabilities? This one’s a biggie. Recruiting and hiring compliance is complex, and so reporting and analytics is a must-have. You need to be able to drive recruiting and hiring decisions in real-time with powerful analytics rather than sloppy excel sheets and poorly filed assessment papers. An ATS will allow you to quickly view the metrics that matter to you, see where your best candidates are coming from, find bottlenecks and catch missed opportunities. With clear and easy to use reporting features that captures all pre-hire compliance data in one place, you’ll never have to worry about fines or tarnishing your reputation.
See also: 7 Ways Employers Can Support Older Workers And Job Seekers
Of course, there’s plenty more you could ask. Implementation, data security, mobile capabilities and ongoing service and support are all tires worth kicking. But this initial list of questions is a great place to start. Finding and hiring top talent requires lightning-fast action and decisions. When you’re shopping for an ATS, however, it pays to slow down long enough to get the facts.
SOURCE: Neese, Bill (12 September 2018) "How to evaluate an applicant tracking system" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/how-to-evaluate-an-applicant-tracking-system
How to Build a Motivated Workforce
Are your employees motivated? Getting an engaged workforce requires employers to focus on nurturing motivation. Read this blog post to learn how to nurture motivation in your workplace.
There’s a lot of buzz and conversation happening around the importance of employee engagement to a successful organization. But I believe that engagement is an overused or at least misused term. Engagement, to me, isn’t a process but rather an end-state where your employees are “all in.”
Engaged employees work hard on today’s priorities, and when they believe what they do matters and know that you’re invested in them, they will stay with your business for the long term and help you solve the challenges of tomorrow. But getting to this state of engagement requires focusing on nurturing motivation.
Simply put, motivated workers are more productive and efficient, and stretch themselves to do more. When employees are motivated, they get their work done faster and with greater levels of collaboration, creativity and commitment. A motivated workforce goes above and beyond to do what is in the best interest of the organization and, ultimately, the bottom line. So, what are ways you can truly motivate employees?
Set Clear Expectations and Goals, and Communicate Frequently
It’s a strange truth, but many employees simply don’t know what is expected of them at work. Workers are more motivated and engaged when they are given clear objectives, understand how they will be evaluated, and see how their efforts contribute to the bigger picture. Isn’t that what we all want anyway; to contribute to and be a part of something bigger than ourselves? When HR teams help create this clarity for our employees, they experience a greater “purposefulness” or “meaningfulness” which in turn contributes to motivation. So how do you ensure organizational alignment and foster this sense of meaningfulness?
One critical step that HR leaders can take is working with managers to increase the frequency of communication around performance and goals. When employees work with their managers to set goals and then check in on progress on an ongoing basis rather than treating them as ‘set and forget,’ it can help improve employee motivation, elevate performance and benefit organizations overall. By increasing the frequency of conversations between managers and employees around progress towards goals, HR teams can take a huge step towards creating an effective performance management program for today’s workforce.
This ongoing endeavor isn’t easy. There are time and commitment involved, and it only works when managers and employees are both invested in open and ongoing dialog about goals and expectations. But the more often managers talk to their employees, the more motivation and performance increases within the workforce. Even quick, informal check-ins, or “managing in the moment” to address priorities or give feedback boosts an employee’s sense that someone is invested in them, and drives motivation.
Spend Time Talking About Career Development
Motivation is tied to a future outlook. One critical way to boost motivation is to move away from ineffective, backward-looking annual performance reviews, and start coaching your managers around having more frequent conversations with their employees that focus on career development. By focusing on development, these conversations become more constructive, forward-looking, and connected to both personal and business objectives. Now you’ve motivated an employee because you’re actually talking about their future and showing you are invested in them!
Implementing performance management processes that are rooted in continuous conversations that center on coaching and career development is vastly more effective for motivating the modern workforce. Focusing on ”performance development” rather than “performance review” shifts the conversation around the process to a more forward-looking, positive and employee-focused stance. This can have a huge impact from an employee motivation perspective, rather than feeling like their managers are micromanaging them or questioning their work, workers feel invested in and motivated to get to the next level in their career, which translates to increases in employee performance.
Provide Timely and Relevant Feedback
Almost half of employees receive feedback from their managers only a few times a year or less. Not only do employees want clear expectations to be established, they also want to know how these are mapping to their larger career goals. Managers need to provide feedback in a timely manner to promote career development. Feedback can be tricky to deliver, and many don’t like delivering or receiving it. So managers need to normalize the feedback by making sure it is timely and is relevant to the employee and their work.
There are many approaches to delivering feedback, but delivering all feedback all the time isn’t the right answer. Managers need to be thoughtful about evaluating all the feedback they receive about their employees and select those items that are most relevant to the employee and those items that they are ready to hear, all in a timely manner to assist the employee in their career.
So, for many reasons, a quarterly review cadence, vs. an annual review, enables managers to align employees’ individual career goals with the organization’s top priorities, ensuring the employee has a sense of purpose and business goals are met.
This is what motivating your workforce is all about. There is no silver bullet to motivate your workforce, however, HR leaders and managers can make a big impact by having frequent and continuous conversations with employees that focus on career development, communicating clear expectations and providing timely feedback. It’s an ongoing process and won’t happen overnight, but by focusing on motivation, both employees and organization at large are better positioned for success.
SOURCE: Strohfus, D (27 August 2018) "How to Build a Motivated Workforce" (Web Blog Post). Retrieved from https://hrexecutive.com/how-to-build-a-motivated-workforce/
The days of employers ignoring the opioid crisis are over
What do employers need to know to help their employees and help reduce the risk of the opioid crisis? The opioid crisis is affecting companies' productivity, medical claims, work injuries and their bottom line. Read this blog post to learn more.
Productivity, medical claims, work injuries, and the company’s bottom line — what do these things all have in common? They are all being drastically affected by the effects of substance abuse. The opioid crisis that is running rampant across the United States is having an impact on employees at every level.
As an employer, what do you need to know to support your employees and reduce the risk of this national crisis?
First, you need to educate yourself on the facts. According to the National Institute on Drug Abuse, every day, more than 115 people in the U.S. die after overdosing on opioids. It is not just the deadly heroin/fentanyl combination that we have been hearing about in the news, sources of opioid addiction include prescription pain relievers such as hydrocodone, oxycodone, oxymorphone, morphine, codeine, and other prescribed substances.
See also: Taking A Page From Pharma’s Playbook To Fight The Opioid Crisis
The Center for Disease Control and Prevention estimates prescription opioid misuse in the U.S. cost $78.5 billion per year; affecting medical spend, productivity, and law enforcement supervision.
Substance abuse does not discriminate on any demographic, however if your business is construction, entertainment, recreation, or food service, the National Safety Council found your employees are twice as likelyas the national average to have substance abuse disorders.
Secondly, you need to take action. The most important thing an employer can do is to have a proactive plan in place to help your employees live a healthy lifestyle. It is easy to get in the habit of saying “that does not happen here,” but the reality is substance abuse can — and does — happen anywhere.
Solving the opioid crisis won’t happen overnight, but here are some steps to take to build a better relationship with your employees and quite possibly help someone overcome a substance abuse problem.
Train your staff. Explain what resources are available to help them help your employees. If you have an employee assistance program in place, leverage it, and have the information easily available so any employee can access the information at any time. This will help lower the fear barrier for employees who are not ready to ask someone they know for help. If you do not have the right resources in place today there are many programs available, and it is important that you adopt one that will fit your culture and help employees be high performers.
See also: Employers take steps to address opioid crisis
Show employees you care. Look for signs and symptoms that an employee might have a problem with substance abuse. Make sure supervisors, managers, and team leaders are aware of these signs and what actions they should take. Have an open door policy, and make sure your employees feel they can ask for assistance when they need it. It is important to know how to handle sensitive, often painful, discussions in a professional and action-oriented manner. It is essential that you have the right steps in place to ensure leadership is aligned with the organization’s strategy on how best to help your at-risk population.
Be transparent. Have clear policies in place that promote a drug-free workplace. Consider expanding your drug testing panel to include opioids.
Share the savings. Consider sharing the dollars a successful well-being program will save your organization’s bottom line through lower prescription drug costs and less lost productivity due to illness and time away from work.
See also: A look at how the opioid crisis has affected people with employer coverage
If your organization is struggling with how to successfully address the challenges of substance abuse and opioid addiction, seek out employee benefit consultants to help you develop a strategy for success. Like anyone with an addiction, there is no shame in asking for help.
SOURCE: Panning, C (7 September 2018) "The days of employers ignoring the opioid crisis are over" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/employers-cannot-ignoring-the-opioid-crisis?feed=00000152-a2fb-d118-ab57-b3ff6e310000
5 critical conversations to have before retiring
According to the Society of Actuaries' Retirement Section and Committee on Post Retirement Needs and Risks, about 70 percent of Americans are on course to maintain their standard of living in retirement. Are your employees ready for retirement? Continue reading to learn more.
Reports of Americans’ lack of retirement preparedness roll on. Not all the news is grim, however. A recent study from the Society of Actuaries’ Retirement Section and Committee on Post Retirement Needs and Risks reports that roughly 70% of Americans are on course to maintain their pre-retirement standard of living.
What we know from those who report being comfortable in retirement is that they took the steps necessary to properly prepare.
It’s not just what employees and clients have earned and saved that contributes to their quality of life in retirement, it’s also how they approach their assets, expenses, and income. To this end, individuals must speak frankly with those in their lives — partner or spouse, employer, children — who are pivotal to key aspects of retirement living.
Here are the five critical conversations individuals should have well in advance of retirement:
With your spouse or partner
1. Are we on the same page about the lifestyle we expect to have in retirement?
Before you retire, you and your partner need to get on the same page about what this means in day-to-day terms. For example, did you know that your living expenses in retirement will likely be about 80% of your pre-retirement living expenses? This means that your monthly budget will change and it’s important to make the changes thoughtfully. Examine your priorities and assumptions together to avoid misunderstandings that lead to financial missteps.
Do yourselves a favor and take a gradual approach to downsizing your spending well before retirement. This will let you significantly cut your monthly expenses without feeling the shock of adjustment. Take a close look at your monthly expenses together and identify items you can do without. Then, start eliminating a few at a time.
2. Are there parts of our life we should “downsize” before we retire?
Downsizing your home can be a real savings opportunity in retirement. Relocating to a city with a lower cost of living can also cut your monthly expenses considerably. You can even downsize your car, or go car-free altogether. These are big changes, however, that you and your partner need to consider very carefully together. You’ll want to weigh the possible savings against other important but not necessarily financial factors, such as proximity to friends and family and access to good recreational and medical facilities. Take your time weighing the pros and cons. If you can agree on which tradeoffs you are both willing to make, the impact on your security and comfort in retirement can be huge.
3. Are we really ready to retire? If not, what do we need to do to get there?
Compare your “retirement number” to your anticipated monthly expenses. Identify discrepancies so you can make adjustments and plans as needed.
Do we need to delay retirement by a few years? Even one or two extra years of work, during your peak earning years, may have a significant effect on your quality of life in retirement. Consider this question carefully as you plan when to leave work.
What other sources of income will be available to us in retirement? There are many paths to a comfortable retirement and many different ways to patch together the right assets and investments to provide for your retirement. Even if your investment portfolio is not large enough to support your retirement needs, for example, you may find that you have other assets (a business, or real estate) that can contribute. Or one or both of you may choose to work part time — the “sharing economy” is a good place to start. Or, you may decide to sell off assets you no longer need.
With your employer
4. Should I transition to a freelance/consulting relationship?
Even if you’re looking forward to stepping away from your professional career, the smart move may be to maintain a freelance or consulting relationship with your current employer. Chances are, you have experience and skills that will continue to be valuable to your employer, even when you are no longer on staff full-time. A dependable source of extra income will help you cover unexpected expenses in retirement. Or, you can use the extra income to pay for more of the things you always dreamed of doing in retirement, like hobbies and travel.
Before you have the conversation with your boss, research what a fair fee rate is for someone at your experience level, in your industry. This will allow you to negotiate your future contract from a position of strength. Your track record as a reliable employee and the cost savings to your employer of no longer having you as full time staff should also boost the argument in your favor.
With your adult children
5. How will our lifestyle changes in retirement affect the rest of the family?
Changes in your lifestyle in retirement may affect your extended family in various ways. Setting realistic expectations up front may help ease any necessary adjustments.
For example, are your adult children accustomed to receiving financial assistance from you? Let them know that this may no longer be possible after you retire and have less disposable income.
Downsizing your house? If you have been the default host for family holiday celebrations, downsizing to a smaller home may require the family to rethink future holiday arrangements. Don’t wait until the holidays are upon you to spring the change on them: discussing it ahead of time will ensure that everyone’s best ideas are considered and good alternate plans made.
Planning to relocate, or travel frequently after you retire? You will likely no longer be available for babysitting or many other family activities. Giving your kids and grandkids plenty of notice will help them plan ahead.
These conversations may be awkward and possibly painful, but they need to take place. After saving for years, a clear eye will help with your post-work years.
SOURCE: Dearing, C (12 September 2018) "5 critical conversations to have before retiring" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/critical-conversations-to-have-before-retiring
Identity theft protection benefits and the business case for employers
Employees are turning to their employers for identity theft protection benefits with the rise in identity theft news. Continue reading to learn more.
With identity theft in the news constantly, many employees are turning to their employers to ask for an identity protection benefit.
Let us focus on productivity and wellness. Identity theft can wreak havoc on an employee’s personal and work life. According to SANS Institute, it takes an average of six months and up to 200 hours of personal time to resolve issues related to the theft. This includes hours calling banks, credit card companies, filing police reports, notifying the Social Security Administration, and alerting credit bureaus. Most of these calls and follow up activity must be made during business hours. According to ITRC’s latest study, 22% of respondents took time off of work when dealing with issues of identity theft.
Identity theft also impacts wellness and mental health. According to the ITRC study, 75% of respondents reported that they were severely distressed by the misuse of their information, and many sought professional help to manage their identity theft experience — either by going to a doctor for their physical symptoms or seeking mental health counseling.
These findings make it clear that identity theft directly impacts productivity and wellness. That is why comprehensive and compassionate restoration services should be a key element of any ID Protection plan offered by the employer.
Restoration services are the fixers in a comprehensive identity protection plan. For victims of identity theft, the restoration specialist will do the required work to restore the victim’s identity. Specialists make the calls during business hours, complete the necessary paperwork, and manage the process. They free up the employee to focus on their job, and alleviate the stress of dealing with the challenges of identity restoration.
There are a range of features to look for when evaluating restoration services across plans. Some plans only offer advice and information kits to guide members on what steps they need to take. Those services typically do not do the work for the member.
For plans that provide a full restoration process, consider if the plan provides victims with a dedicated restoration specialist as a single point of contact. Since the restoration process can take months or years, it’s best if a victim has a consistent person to speak with who knows the case and can provide periodic updates. Restoration services should be available 24/7 so victims can initiate the process immediately to lessen the damage. Plans should also provide multilingual specialists to best serve all members and handle all types of identity theft.
Although monitoring may alert individuals that are a victim of identity theft, the even greater value is in fixing the situation. Be sure to fully evaluate the restoration features of an identity protection plan as part of the selection process.
SOURCE: Hazan, J (31 August 2018) "Identity theft protection benefits and the business case for employers" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/identity-theft-protection-benefits-and-the-business-case-for-employers
5 steps to improving employees’ mental health
Do your employees have an “always on” mentality? Many employees are making themselves available 24/7, costing businesses big time due to workplace stress. Read this blog post to learn more.
Technology has transformed the way many of us work, but it also has almost completely eliminated our ability to unplug, de-stress and take care of our mental health. Many employees make themselves available 24/7, checking email before they go to sleep and as soon as they wake up. This “always on” mentality is costing everyone — businesses spend $300 billion each year on absenteeism, diminished productivity, employee turnover and insurance fees due to workplace stress.
Stress and mental health are increasingly important issues in the office. Elevated stress levels lead to mistakes, lower productivity, lower employee morale, higher rates of absenteeism and even physical illnesses such as high blood pressure and heart disease.
Up to 14% of mental health issues could be completely avoided by reducing workplace stress, according to the National Institutes of Mental Health. Now, more than ever, employers need to make sure their employees have the right resources to help combat depression, anxiety, stress and job strain.
Here are five ways employers can improve employees’ mental health.
Remove the stigma. Improving the mental health of your employees starts with talking openly about it. Employers should focus on mental health as part of a wider wellbeing program — calling attention to the need to relieve stress and seek help for mental health problems.
Workplace training to help employees and managers recognize the signs of stress and poor mental health can also bring attention to the issue.
Provide and promote stress-relief activities. Employers can build in activities to help relieve stress during the workday. Yoga, exercise classes and walking groups can help employees cash in on the feel-good endorphins that come from physical activity.
Some larger companies take stress relief to the next level. Office gyms, weight rooms and boxing gyms provide stress relief outlets. Some companies even employ in-house psychologists and other professionals to help teach employees how to manage their stress and fears.
Consider a flexible work policy. On a more basic level, creating a more flexible work policy throughout the day can also help. Everyone needs to take care of personal business from time to time, whether it’s a doctor’s appointment or a home maintenance issue. Take advantage of technology and allowing your employees to work from home or change their hours can help reduce stress.
Develop a financial wellness program. Financial fears are stressing out your employees. More than half of workers say they are stressed about money, and the younger the worker, the more likely he or she is to be worried. Creating a financial wellness program that educates employees on how to better manage their money can help remove this stress. A program could include helping younger generations balance paying back student debt with budgeting and saving, while older generations may focus on putting their kids through college while saving for retirement. Other topics to cover include making big purchases, such as a home or a car.
Highlight your employee assistance program. Draw attention to benefits that can help people cope with mental health issues. You very likely already offer an EAP, but you may not stress enough how it can help employees who may need assistance. Generally, an EAP includes telephone-based or in-person counseling, referrals and other resources to help assess and treat mental health issues. Communicate the details of your company’s EAP often (not just during open enrollment) to give employers another way to improve their wellbeing.
Your employees are your greatest asset; ensuring they are healthy is in your best interest. Facing mental wellbeing head-on can help you keep your employees happy and healthy, and help you boost your business.
SOURCE: Newman, H (25 June 2018) "5 steps to improving employees’ mental health" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/improving-mental-health-in-the-workplace?tag=00000151-16d0-def7-a1db-97f03ad90000
Top 10 health conditions costing employers the most
As healthcare costs continue to rise, employers continue to look for ways to target those costs. Read this blog post to learn more.
As healthcare costs continue to rise, more employers are looking at ways to target those costs. One step they are taking is looking at what health conditions are hitting their pocketbooks the hardest.
“About half of employers use disease management programs to help manage the costs of these very expensive chronic conditions,” says Julie Stich, associate vice president of content at the International Foundation of Employee Benefits Plans. “In addition, about three in five employers use health screenings and health risk assessments to help employees identify and monitor these conditions so that they can be managed more effectively. Early identification helps the employer and the employee.”
What conditions are costly for employers to cover? In IFEPB’s Workplace Wellness Trends 2017 Survey, more than 500 employers were asked to select the top three conditions impacting plan costs. The following 10 topped the list.
10. High-risk pregnancy
9. Smoking
8. High cholesterol
7. Depression/mental illness
The DOL Audit: Understanding the spectrum of risk
Will the Department of Labor (DOL) audit my plan? The likelihood that the DOL will audit your plan is low, but it can happen. Continue reading to learn more.
Risk is discussed in many contexts in the retirement plan industry. It comes up as a sales tactic; as good counsel from trusted advisors preaching procedural prudence; or, often, in the form of intimidating industry vernacular like fiduciary liability, fidelity bond or the big, bad Department of Labor (DOL).
This DOL paranoia is an underlying motivation that drives the risk conversation with distributors and retirement plan sponsors. Naturally, the question of probability comes up: What is the likelihood the DOL will audit my plan? The answer is low, but it can happen.
When evaluating retirement plans in terms of risk, it’s best viewed as a spectrum. Generally, risk falls into three principal areas of concern.
Lawsuit risk: The likelihood of a fiduciary-based lawsuit for most plan sponsors is very low. However, if this does arise, it will be unpleasant and expensive, both financially and in terms of reputation.
Administrative breach: Upon inspection, most plans will have some kind of operational defect. Typically, these are either an administrative, fiduciary or a document-level defect. If left uncorrected, they are potentially disqualifying. The good news is the IRS has corrective methods in place for the most common errors. Generally, these are relatively inexpensive to correct but will cost clients a little time and money, and likely some aggravation.
DOL/IRS audit risk: It’s usually the administrative breach discussed above that leads to the DOL/IRS investigation or audit. These agencies are not interested in disqualifying plans; they are more interested in correcting them and protecting the participants from misdeeds (intentional or not).
When a DOL audit does happen, it tends to occur because someone invited investigation. This could be the result of a disgruntled former employee, a standard IRS audit that somehow spiraled into a full DOL investigation or a variety of other reasons. So, what can employers and their service providers do to avoid an audit?
The IRS and DOL don’t publish an official list of items that could lead to an investigation, but it’s a good idea to look at your plan’s most recent IRS Form 5500 filings to decrease the likelihood of an audit. This is publicly available information that can signal to government agencies that something might be wrong and they should take a closer look. Some of the more common red flags include:
- Line items that are left blank when the instructions require an answer
- Inconsistencies in the data disclosed on the Form 5500 schedules
- A large drop in the number of participants from one year to the next
- A large dollar amount in the “Other” asset line on the Schedule H
- Having an insufficient level for the plan’s required Fidelity Bond
- Consistently late deposits or deferrals and hard-to-value or non-marketable investments (including self-directed brokerage accounts or employer stock) could be counted as red flags as well.
Plan sponsors should make sure that 5500s are completed with the same care and attention to detail used when filling out IRS 1040, and ensure the plan is being governed properly and in compliance with ERISA. This can be a challenge even for the most well-intentioned plan sponsors, given the complexity of the task and the fact that most employers don’t have the expertise in-house.
Calling in a specialist
But you don’t need to navigate these waters on your own. Instead, you might consider the “Prudent Man” rule, which implies that when expertise is required yet absent, a prudent person outsources the needed expertise. There is a wealth of talented retirement plan specialists and advisors available to help guide you through the audit process or, better yet, steer clear of it altogether.
When considering whether to employ one of these specialists, you will need to evaluate their experience, expertise and training, as well as if they provide services to help the plan sponsor keep the DOL (and the IRS) out of their offices. Some commonly available services include:
- 5500 reviews to help plan sponsors avoid potential audit triggers
- Coaching services to help plan sponsors identify and eliminate some of those difficult-to-value assets like employer stock or self-directed brokerage accounts
- Service provider evaluations to help plan sponsors identify those who will work as a plan fiduciary and put the appropriate guardrails in place on an automated basis
In conclusion, the best way to survive a potential DOL investigation or IRS audit is to avoid one altogether. Committing to best practices for running the plan may mean outsourcing a great deal of the work to specialist retirement plan providers and advisors. Plan sponsors would be wise to consider working with service providers who operate as plan fiduciaries themselves. In this way, you’re more likely to avoid problems and achieve better plan results, leading to better outcomes for everyone.
SOURCE: Grantz, J (7 June 2018) "The DOL Audit: Understanding the spectrum of risk" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/dol-audit-understanding-the-spectrum-of-risk?feed=00000152-18a5-d58e-ad5a-99fd31fe0000