A way to take your wellness program beyond paper
Target is taking its wellness program a step further and giving its more than 300,000 employees access to a FitBit tracker. And to sweeten the deal, all employees participating in the FitBit Wellness Program will have a chance to earn money for the charity of their choice.
Employees can sign up to get the FitBit Zip ($59.95) for free or pay the difference for a more advanced FitBit.
Amy McDonough, vice president and general manager of Fitbit's wellness unit, told eWEEK that the deal with Target is one of the largest company-wide wellness arrangements it has made so far.
"The Target announcement was exciting because they are a strategic retail partner for Fitbit products and also a large employer," McDonough said. "It's a great example of how these larger organizations are really putting wellness at the forefront."
Employees who take advantage of the FitBit offer will be grouped into teams for a monthlong challenge. The winning team will get $1 million to funnel into a charity of their choice, Chief Human Resources Officer Jodee Kozlak told CBS News.
Kozlak added that employees will also receive extra discounts on fruits and vegetables, and healthy grab and go snacks will be featured near cash registers.
RELATED: One compelling reason to participate in a wellness plan
Benefit offerings impacted by millennials
Originally posted by Mike Nesper on August 31, 2015 on benefitnews.com.
Generation Y surpassed Generation X this year, to become the largest population of employees in the workforce — more than one in three U.S. workers are between the ages of 18 and 34, according the Pew Research Center. And those 53.5 million millennials are influencing the benefits employers are offering.
Millennials want more customization, says Meredith Ryan-Reid, senior vice president of MetLife’s group, voluntary and worksite benefits. Employers feel the same: 54% rated benefits customization as extremely important, according to MetLife’s 13th annual employee benefits trends study.
Millennials like variety, so employers should offer a broad range of benefits, says Joe Ellis, senior vice president of CBIZ Benefits and Insurance Services. The same isn’t true for networks. Millennials aren’t particularly concerned with narrow networks — they go to whoever is included, Ellis says.
That’s a good thing, especially as more employers are reducing network accessibility as a way to cut costs. This year, 11% of employers introduced narrow network plans as a cost containment tactic, a 7% increase from 2014, according to the Arthur J. Gallagher & Co. recent benefits strategy and benchmarking survey. Cost-sharing and changing carriers were the most frequently used strategies for controlling health care costs.
Both methods have a limited shelf life. Only a certain amount can be pushed onto employees, and recent mergers have reduced the list of major U.S. health insurance companies to just three, says Bill Ziebell, executive vice president of Gallagher Benefit Services.
Employers are also using online enrollment, telemedicine and mandatory specialty pharmacy programs to rein in costs — but premiums are still rising. Six in 10 employers reported increases of 4% or more during their most recent renewal, Gallagher found, and 23% of respondents saw double-digit increases.
Many employers are focused on medical renewals and others are hampered by Affordable Care Act regulations, Ziebell says. “It’s hard to be strategic,” he says, and that’s exactly the help advisers need to give their clients. Advisers and their employer clients should take an all-inclusive look at benefits and have a plan for several years into the future, Ziebell says.
Millennials impacted by the recession
The recession had a big impact on millennials, who entered the job market at a tough time, and many aren’t relying on government safety nets being in place later in life, Ryan-Reid says. In fact, nearly one-quarter of Americans expect no Social Security benefits, a Bankrate.com survey found.
That has spurred millennials to take a greater interest in employer offerings. “They’re craving information,” Ryan-Reid says. However, some employers aren’t delivering.
Just 38.4% of millennials strongly agree that their company is effectively educating them about their benefits, the MetLife study found. When presented with the statement, “I am confident I made the right decisions at my last annual enrollment,” less than half of millennials, 48.5%, strongly agreed, compared to 54% of Gen X employees and 62% of baby boomers.
Access to information that’s easy to understand increases confidence among all generations, MetLife found. For millennails, they prefer education via their provider’s website, a benefits handbook and in-person meetings. “In general, most people prefer to talk to someone,” Ryan-Reid says.
What Employers Need to Know About Court’s Gay-Marriage Ruling
Originally posted by Rachel Emma Silverman on June 30, 2015 on wsj.com.
The Supreme Court on Friday ruled that same-sex couples have a constitutional right to marry, meaning that same-sex marriages must be recognized nationwide. The ruling will have vast implications for employers, which until now have been operating under a patchwork of different state and federal laws governing the legal and tax treatment of same-sex unions.
Here’s what businesses should keep in mind as they navigate the new landscape.
If an employer offers spousal health-insurance benefits, do they need to offer them to all married employees, gay or straight?
In general, yes.
Companies that offer spousal health benefits and use a separate insurance company to fund their benefits will now be required to cover both gay and straight spouses. “Based on the court’s ruling. there is simply one type of spouse,” says Todd Solomon, a law partner in the employee-benefits practice group at McDermott Will & Emery in Chicago, who has been tracking same-sex employee benefits for nearly two decades.
But companies that are self-insured, which means they assume the insurance risks for their own employees, a common practice among large companies, aren’t under the same legal constraints. “There is technically no legal requirement that a self-insured company has to include a same-sex spouse,” Mr. Solomon says. As a result, self insurance “is where we are going to see a lot of activity and a lot of litigation.”
Companies should think twice about self-insuring but denying benefits to gay spouses because they will be vulnerable to discrimination suits, he says.
What if an employer has a religious objection to gay marriage?
They have limited options.
Companies could choose not to offer benefits to spouses altogether. Or they could self-insure and attempt to offer benefits to only straight spouses, but they run a high risk of discrimination suits, Mr. Solomon says.
Now that same-sex marriage is legal, will it add a lot of people to employers’ benefits plans? Will this be expensive for employers?
It could, but it depends on what type of plan a company already had.
If a company already covered unmarried same-sex domestic partners, it could be cheaper because covering spouses doesn’t have negative tax implications and is easier to administer than most domestic partnership benefits, Mr. Solomon says.
But if a company only offered spousal benefits, the ruling will add new couples that previously weren't allowed to marry.
Will the Supreme Court ruling lead to fewer employers offering spousal benefits?
Yes—that has been the trend, and the ruling might exacerbate it.
Employers have been cutting spousal benefits to save money, either dropping spousal coverage or imposing surcharges on spouses who can obtain health insurance elsewhere. A survey from consulting firm Mercer of more than 1,100 large employers found that 17% either excluded spouses with other coverage available or imposed a surcharge in 2014, compared with 12% in 2012.
The Supreme Court ruling might spur some employers who were already inclined to cut spousal benefits to do so, Mr. Solomon says.
What are the tax implications?
It equalizes the tax treatment of gay and straight married couples.
Until the ruling, there were a patchwork of state and federal tax laws governing same-sex couples. Employers, depending on the state, sometimes faced additional payroll taxes for same-sex employees, and workers sometimes faced additional income taxes.
Now, for both federal and state tax purposes, companies and employees won't face different tax treatment for gay and straight married couples. That will make benefits easier for companies to administer, Mr. Solomon says.
What does this mean for domestic partnership benefits?
This is a particularly complicated issue for employers.
Over the past decade, a growing number of companies offered “domestic partnership” coverage for gay employees and their partners as a way to provide equal benefits for couples who couldn’t legally wed. Others companies offer coverage more broadly to unmarried domestic partners, regardless of sexual orientation, recognizing that some employees simply prefer not to marry.
Companies that offer unmarried partnership benefits to both gay and straight couples will likely continue to do so.
But companies that offer partnership benefits just to gay couples may begin to phase them out because now all their employees can legally marry. Offering domestic partnership benefits just to gay couples but not straight ones might make firms vulnerable to reverse discrimination lawsuits, lawyers say.
On the other hand, firms may choose to keep domestic partnership benefits to help protect gay employees from discrimination. The majority of U.S. states lack anti-discrimination protection for gay employees, so workers can be fired for their sexuality. Because marriage certificates are public, forcing employees to get married for spousal benefits may end up “outing” an employee, while domestic partnerships are typically private matters, gay advocates say.
Identity-theft protection benefits boost business, satisfaction
Originally posted January 20, 2015 by Melissa A. Winn on www.ebn.benefitnews.com.
With employee news feeds brimming with headlines about recent computer hacks and data leaks, employers are showing a growing interest in offering identity theft protection services as a benefit to their worried workforce. Benefit industry experts say the relatively inexpensive voluntary benefit is not only highly-appreciated by employees, but it can also act as a differentiator in a benefit adviser’s sales portfolio.
Employer concern about employee identity theft has been on the uptick recently, says Nick Park, voluntary benefits specialist at Corporate Synergies. “It has definitely been a topic of conversation more in the last year,” he says.
Identity theft fraud claims a new victim every two seconds, according to the 2014 Identity Fraud Report issued by financial research firm Javelin Strategy and Research. The Bureau of Justice Statistics, the government research agency for the Justice Department, found that 16.6 million American adults experienced identity theft in 2012 alone.
“In a group of 10 people there’s always at least one or two people who have a personal experience with an identity theft situation in some form or fashion,” says Kelly Fristoe, president and CEO of Financial Partners in Wichita Falls.
Fristoe sells the identity theft product LifeLock, which can be sold to individuals or offered to groups as a value added voluntary or employer paid product.
“[T]here are agents I know that do sell a ton of it,” he says. “Theirs and my experience is that it is a high-value product.”
While some employers choose to add identity theft protection services as a new benefit offering in their voluntary benefit package during annual open enrollment, Park says employers have also approached his firm for information on the benefit throughout the year, particularly if somebody in the organization suffers from an identity theft.
“They don’t want that to happen to any other employee in their organization,” he says.
Employees rely on their employer for “a host of financial needs: planning for retirement, protecting against the costs of health care, or even accidents and illness; not to mention, their paycheck. Identity theft can represent a threat to all aspects of financial security and is right in line with benefits [employer clients] can offer their employees,” according to identity theft protection services provider LifeLock.
Employee satisfaction
“It is a ‘nice to have’ benefit,” says Park. “I don’t know if it would be considered a necessity at this point, but employees like it.”
The monthly premiums are usually pretty affordable, he says and the benefit “typically has very little dissatisfaction once you have placed it in the employee population,” says Park. “It’s not something I hear negative feedback on ever.”
For benefit advisers, identity theft protection can be a good differentiating benefit offering, and “is a simple tool to give your clients satisfaction.”
With some insurance products there is a risk, he says, but not so much with identity theft protection.
“Sometimes, when you introduce a product to an employee population it may be complex or confusing and people don’t understand it, they don’t understand the coverage type. [Identity theft protection] is something everybody understands,” says Park.
New non-insurance benefits hit the market
Originally posted December 12, 2014 by Mike Nesper on Employee Benefit Advisor
As employee benefits plans evolve, so too does the employer’s perspective, particularly when it comes to voluntary benefits. More and more, employers are viewing benefits holistically instead of taking a siloed approach. As Mercer’s U.S. innovation leader, Betsy Dill expects to see that trend continue as we head into the New Year as employers continue to personalize benefit plans to their workforce.
That includes adding non-insurance products, which are steadily becoming part of more benefits packages, says Rob Shestack, senior vice president and voluntary benefits national practice leader at AmWINS Group. “Every year, they’re gaining more popularity,” he says. “It’s all part of this wellness balance,” which includes employers ensuring the physical, financial and mental well-being of their workforce. “A stool can’t stand on two legs,” he says.
Even if a client doesn’t opt for a non-insurance plan, Shestack says, they’re always interested in what’s available. “Today, it’s really getting a lot of conversation going,” he says.
And why not? There are plenty of useful items to choose from — Shestack estimated upwards of 50 products — everything from identity theft protection to telemedicine to roadside assistance. Along with those three, some of the more popular products include legal services, pet insurance, consumer goods purchasing programs and financial helplines.
“The list goes on,” Shestack says. “Some of these things have been out for quite a while and some are new this year.” In 2014, Shestack says, a few new products hit the market — one of those being Estate Assist, a digital safety deposit box where important information such as a will and/or insurance policies can be stored. In 2015, “we’ll probably see three or four or five more,” he says.
‘High-impact, low-cost programs’
Non-insurance plans are usually inexpensive and often consist of a handful of products offered in a package, Shestack says. “A lot of these things are bundled,” he says. “Employers are looking for high-impact, low-cost programs.”
Employers of all sizes offer these plans, Shestack says, and he’s seeing more employer-sponsored programs with a buy-up option. “When an employer funds a base plan for everybody, the cost significantly decreases,” he says.
Despite the prevalence of non-insurance products, Shestack says there’s still plenty of employers unaware of their existence — that’s where advisers need to step in and educate employers about these types of voluntary programs.
Not only does an adviser have to be adept at product assessment, they must select the appropriate plan for the workforce in question, says Jim O’Connor, national practice leader for employee benefits at CBIZ. A manufacturing company made up of lower-wage employees is much different than a financial services firm. “You need to know how the product lines up with the workforce,” O’Connor says.
Education and communication are also part of an adviser’s job. “That’s not just about sending a memo out and leaving it at that,” O’Connor says. Advisers who communicate well do so via thoughtful, thorough and various channels, he says. “You have to have a diverse approach to your communicating strategy,” O’Connor says.
Wellness programs adopt outside-the-box solutions
Originally posted December 15, 2014 by Mike Nesper on Employee Benefit Advisor
Increasing participation in a particular activity can be done with incentives, “but you can’t buy commitment to health,” says Alexander Domaszewicz, a principal and senior consultant with Mercer. “Getting people committed to health takes other influencers and motivators.”
That’s the state of wellness programs in the workplace, Domaszewicz says, trying to make a program as valuable as possible and doing so in a meaningful way. “We’re enhancing and refining as we go,” he says.
More employers are using outcomes-based incentives, says Beena Thomas, Optum’s vice president of health and wellness. “It increases personal responsibility,” she says. Financial incentives, like premium reductions for employees who meet biometric thresholds, are widely used, but there are other strong motivators, Domaszewicz says. People are more likely to participate if an activity is easy and accessible, he says. Participation is less likely if an activity is difficult, he says, even if there is money attached to it.
Wellness programs have moved past a one-size-fits-all mentality, Domaszewicz says, and employers are now focused on employee health both at work and at home. The latter is even being recognized — such as rewarding someone who plays in an adult soccer league.
Employees prefer face-to-face interaction
There’s also more focus on one-on-one interaction, Domaszewicz says. “We tried to make everything so digital in the last decade,” he says, but employees prefer in-person communication. Employers are bringing professionals, like dieticians, to the workplace, Thomas says. “Employees like to see someone face-to-face,” she says.
Social media has helped increase participation, too, Thomas says. “Social media has played and will play a larger, more defined role in driving employee engagement,” she says.
Wellness programs have evolved rapidly in the past five years, Domaszewicz says, just look at all the wearable devices available today. “There’s a lot to be said for the groundswell of support we’ve seen,” he says. Wellness should continue to accelerate and be more successful in the future, he adds.
Wearables are evidence that employers are focusing on outcomes rather than return on investment, says Robin Widdis, business unit president and interim wellness director at CBIZ. “It’s about encouraging employees to take their health more seriously,” she says, “and employers have shown greater interest in healthy outcomes rather than dollars spent.”
Integrated approach
An integrated health strategy is an approach many employers are taking, Thomas says, and using one vendor for all benefits. “Affordability still continues to remain paramount for employers,” she says.
Regardless of any new legislation, Thomas says wellness programs will keep progressing and employers will continue to emphasize wellness as a core piece to their business strategy. “It’s not something that just sits siloed in the HR department,” she says.
Perry Braun, executive director of Benefit Advisors Network, isn’t so sure. “Intuitively, it is a sound business strategy to invest in these programs, however, businesses are cautious about making investments until the regulatory environment and tax policies have greater certainty or predictability to them,” he says. “Wellness programs require a long-term view and investment from the business community, and unfortunately, the overall business climate is short-term focused at present.”
Ensuring compliance
Advisers got a reminder this year to make certain wellness plans are compliant with the Affordable Care Act after the EEOC sued Wisconsin-based Orion Energy Systems, claiming the employer imposed too harsh a penalty for opting out of the program. Employees who participated had 100% of their premiums covered by the employer, while those who didn’t participate had to pay 100% on their own.
“For a lot of employers it was frustrating to see these lawsuits because they’ve been asking for clarity — not legal action — for many years,” says Karen Marlo, vice president at the National Business on Group Health. “I think there’s a lot of concern. There’s certainly been a lot of going back and reviewing the programs they’ve put in place.”
It’s difficult navigating the various regulations surrounding health care, Marlo says, making it crucial advisers ensure programs are compliant with the ACA, GINA, ADA and HIPAA to avoid lawsuits.
What to expect in 2015
In 2015, employers will continue to shift the rising cost of health care to employees, Widdis says, which will create “an emphasis on healthier lifestyles. There will also be more of a focus on taking action versus pushing information.” Gone are the days of handing out booklets on the dangers of smoking, Widdis says, and employers are now taking action such as charging smokers higher premiums.
Vinnie Daboul, partner at Sage Benefit Advisers, agrees, saying “the successful wellness programs are not going to be the status quo.” Effective programs will be ones that take action based on biometric data and reduce claims, he says. “When you start talking to some of the organizations that are tied to wellness, they’re starting to look at changing the claim curve,” Daboul says.
That includes involving family members, Widdis says. “Employers are also encouraging employees’ spouses and families to become more involved in their wellness programs,” she says. “Moving forward, employers are making wellness less about ROI, and more about improving health, productivity and morale.”
Most Consumers Value Integrated Benefits for Time and Cost Savings
Originally posted December 11, 2014 on Insurance Broadcasting
Whether it’s dental insurance or the smartphone, consumers want products that offer simplification and savings. In a new survey, Anthem Blue Cross and Blue Shield asked Americans what products make their lives easier and the findings revealed that integrated products and services are highly valued – for example, the smartphone (74 percent), printer/copier/scanner (64 percent) and the toaster oven (36 percent). And, when it comes to insurance, consumers overwhelmingly (81 percent) said it would be extremely helpful to trust the same carrier to provide their dental, vision and health coverage.
“We’re meeting the needs of both employer and employee by providing affordable and comprehensive coverage benefits, which helps save time and money every step of the way.”
So, what specifically are consumers looking for when it comes to selecting an insurance plan? Survey respondents said a range of factors are important to consider, but they most frequently point to cost as being an extremely important aspect (67 percent), followed by comprehensiveness of coverage (61 percent), customer service (60 percent) and ease of use (58 percent). Additionally, 86 percent would expect to save time, save money or receive improved care if they had the same carrier integrate dental with their vision and medical benefits.
In the current health care environment, employers are looking for products that offer their employees exceptional valuei. The good news is that simpler processes, vast networks and deep discounts offered by multiline carriers like Anthem can provide employers and employees with the exceptional value they are seeking.
“For example, we offer a vast choice of dental benefits that employees want, along with large, reliable provider networks that make it easy and affordable for consumers to maintain good oral health,” said Erin Hoeflinger, President of Anthem in Ohio. “We’ve built strong relationships with the dentists in our network and we have negotiated rates, which saves members on average 25 to 32 percent on their covered dental services.”
In addition to seeing a cost savings, consumers can expect to save time when they select a multiline carrier. Half of the consumers surveyed (50 percent) say that figuring out costs is the most time consuming aspect of health management. Two-in-five also say it’s time-consuming to find health care providers that accept their insurance (41 percent) and to get their doctors to talk with each other to coordinate care (39 percent).
“With all of the advantages available to consumers and employers who get their benefits from a multiline carrier, there’s no reason to settle for the inefficiencies of having multiple benefit providers," said Hoeflinger. “We’re meeting the needs of both employer and employee by providing affordable and comprehensive coverage benefits, which helps save time and money every step of the way.”
This report presents the findings of a telephone survey conducted among 1,005 adults, 503 men and 502 women 18 years of age and older, living in the continental United States. Interviewing for this ORC International CARAVAN® Survey was completed on July 10-13, 2014. 605 interviews were from the landline sample and 400 interviews from the cell phone sample.
The margin of error for the total sample is ±3.0 percent at the 95% confidence level. This means that if we were to replicate the study, we would expect to get the same results within 3.0 percentage points 95 times out of 100.
Too Many Choices?
Source: ThinkHR.com
Some of the earliest investment advice given: “Don’t put all of your eggs in one basket.” Its value is enduring. An investor can minimize the risk of losing money by diversifying the allocation of money into different categories of investments. Even within a single category, an investor can choose investment vehicles, such as mutual funds, spreading ownership over an array of financial instruments. Are plan sponsors successful if they offer participants the highest possible amount of mutual funds and other investment choices?
Offering a large number of funds does not equate to success in either the realm of compliance with regulation, nor in achieving maximum levels of employee participation. It is important to offer the appropriate number of choices to empower participants to meet goals for retirement income. It is also important to do this in a manner that allows the employer to meet fiduciary responsibilities.
Fiduciary Responsibility
On one hand, participant-directed accounts, such as many 401(k) plans, give members control over their own investment accounts. On the other hand, the plan sponsor is generally still responsible for the fiduciary liability associated with selecting and monitoring the investment vehicles being made available to participants. Good processes with solid documentation of their application provide the foundation, enabling employees to make good decisions about investments. These factors also position the employer to face an Employee Benefits Security Administration (EBSA) audit without undo fear of negative consequences. Most employers will need to engage the services of a “prudent expert” as a guide along the path of selecting and monitoring appropriate investment opportunities.
A prudent expert financial advisor must be familiar with methods required to deliver comprehensive analysis of investment vehicles. Among these methods is the necessity to establish and track appropriate benchmarks to measure a particular investment’s performance over time. Understanding the purpose of a particular class of investments and how the particular fund being offered relates to its peers is more important than offering a large number of funds in that class.
Sponsors need to maintain an Investment Policy Statement outlining the categories of investments to be offered to participants. This document should also identify the committee and entities responsible for choosing, monitoring, and, when appropriate, replacing the individual investment options offered to participants. This tool will assist the sponsor in seeing when it is appropriate to replace an option instead of just adding new options. Beyond concerns about managing an employer’s exposure to liability, providing a reasonable, yet limited, choice of options can actually improve employees’ willingness to participate in the benefit plan.
Participant Behavior
Fewer choices are better when people do not come into a situation already knowing for sure what they prefer. This describes most employees in their relationship to employee benefit plans. They simply do not know what to do without education. Initially, it may seem logical to grant the widest possible range of options. If surveyed, employees may even indicate a strong preference for unlimited choices. However, the employer’s goal is not to merely capture interest — the goal is to make it easy for employees to participate in a benefit plan and see progress towards fulfillment of their own financial objectives.
The opportunity to make some choices is a good thing for participants. Indeed, it is necessary for employees with participant-directed accounts to be offered options so that they can achieve diversification of their investments. However, too much of a good thing is manifest when participants experience choice overload.
Behavioral scientists are finding choice overload to be a condition people experience when they withdraw from a situation out of fear of making the wrong decision. Often an individual starts off highly motivated as they begin to examine the choices they have been presented. As choice overload sets in, the extensive array of choices becomes demotivating, and the individual may put off a decision to commit or give up entirely.
Sheena S. Iyengar of Columbia University and Mark R. Lepper of Stanford University demonstrated the impact of choice overload when they studied the influence of choice on the purchasing habits of 502 people who were introduced to various selections of exotic jams. They found that 60 percent of the people given the opportunity to choose from 24 items were interested in investigating, but only 3 percent made a purchase. By contrast, only 40 percent of those given the limited choice of 6 items investigated, but 30 percent made a purchase. The average quantities of jam individuals were willing to taste test was less than 2, regardless of whether they were offered an array of 6 or 24.
Employers can promote participation in benefit plans by reducing the complexity of presentations to employees. Making use of competent advisors, employers can present employees with properly labelled choices packaged in a consumer-friendly manner.
5 companies that dropped part-time employee health care
Originally posted on https://ebn.benefitnews.com.
Just 25% of companies that offered employee health insurance made coverage available to part-time workers in 2013, according to the Kaiser Family Foundation. That percentage will decline further with Walmart Stores Inc.’s announcement that it is dropping health insurance for part-time employees. Walmart joins a growing list of major retailers that have done the same.
Target announced in January 2014 that it was dropping coverage for part-time employees. The company said in a blog post that less than 10% of its total employee population participated in that plan.
The world’s largest home improvement retailer said in September 2013 that it was ending coverage for 20,000 part-time employees. Employees with fewer than 30 hours a week were no longer offered limited liability medical coverage, Bloomberg reported. At the time, 5% of the company’s 34,000 employees were enrolled in that plan.
In August 2013, the retailer sent a memo to staff that it was dropping coverage for part-timers, but giving them a check for $500 to find coverage through the public exchanges.
In August 2013, the retailer announced it was cutting some employees’ hours to 29.5 hours, or just under the 30 hour threshold at which the Affordable Care Act mandates coverage be provided. Forever 21 does not provide coverage to part-time employees. In a Facebook note, the company said the decision was made “independent of the Affordable Care Act” and that the change impacted less than 1% of all U.S. store employees.
On Oct. 7, the world’s largest retail chain said it plans to stop offering health benefits to employees who work less than 30 hours a week, or about 2% of its U.S. staff.
Workforce participation: Entering later, staying longer
Originally posted October 3, 2014 by Nick Otto on https://ebn.benefitnews.com.
Retirement patterns are changing globally. As a result, providing employees greater retirement security and financial literacy can help employers cultivate a less stressed, healthier and more engaged workforce.
To fend off employee concerns about retirement savings, Shane Bartling, a senior retirement consultant at Towers Watson, says benefits managers should work to use impactful approaches to set smart retirement savings habits.
“Showing employees the age when their resources will maintain their lifestyle [and their] financial independence, provides a clear, personal and emotional motivation to save,” he says. That pre-retirement sweet spot, which the consultant firm dubs “the FiT Age,” can be reinforced with “emotionally impactful, personalized communications to drive behaviors, since auto-enrollment and auto-escalation may fall well short of what is needed.”
During the mid-to-late 20th century, labor force participation rates dropped for older workers and rose for younger ones. These trends have recently reversed, especially among men and younger workers.
More recently, a chart from the Senate Budget Committee shows that almost 1 in 4 Americans in their prime working years, between the ages of 25-54, are not working which could drastically affect changes in how and when an employee can eventually retire.
The trend of longer working careers is expected to continue, possibly even intensifying, according to recent Towers Watson survey results. On the other hand, those who are unemployed today require more and more education, resulting in many young adults putting off a potential job in favor of additional education. Typically, employees delay or take a break from labor force participation by spending more time in school.
Meanwhile, to assist employees to build better saving habits, Bartling advises that employers educate the advantages of increased tax efficiencies for workers which would provide for a stronger retirement. “Tax treatment of Social Security and post-retirement medical premiums makes Roth 401(k) and health savings accounts highly attractive for many workers, including [those in] middle income levels; tax efficiency alone may pay for a year of retirement,” he says.
“The risk of a workforce that is stuck, due to employee retirement financial shortfalls, merits re-examining how benefits are delivered,” he adds. “Evaluate the business case for more efficient retirement benefit delivery,” adding that just matching contributions may not be the most efficient way to deliver benefits.