Reducing benefit costs while still valuing employees
Originally posted August 26, 2014 by Steve Grossi on https://ebn.benefitnews.com.
As part of valuing our employees, benefits are viewed as a direct extension of pay and considered to be a vital part of an employee’s total compensation package. Benefits represent a sizeable investment for BOK Financial as well as for each employee. It’s our corporate culture to place a great deal of attention on benefits, and helping employees understand all of the value of their benefits package is a key focus for our HR team.
People who work for us are independent thinkers. It’s important to make our own decisions, and that’s especially true when it comes to health benefits. This is the reason our company is committed to a program that offers employees the flexibility to choose their coverage in most major benefit areas. Each employee can put together a personal package to suit their needs, and I believe that this flexibility shows the company’s commitment to each and every member of our staff as well as their families.
But this level of commitment to our employees – although vital – is expensive. After payroll, benefits costs were our No. 1 company expense, and as a result we found ourselves coming to terms with the impending Cadillac Tax, a penalty against companies over a particular threshold in terms of premiums resulting from the Affordable Care Act.
We added a consumer-directed health plan to our benefits offering, along with a health savings account, hoping to bring overall benefits costs down and reduce our exposure to the Cadillac Tax. Our belief was that the CDHP would suit the needs of many employees, and premiums would be lower for both the company and the employee. But explaining the benefit of a CDHP to employees is challenging – people are confused by the options, and most simply choose to do nothing and remain in their current plan. Others assume that the most expensive plan is the best, and default to that choice.
After one year with the CDHP, adoption was well short of our company goal, at only 5%. We went looking for help, and ended up with a solution from Tango, a company that helps organizations save money by optimizing health benefits, while keeping employees happy.
The first step was to educate our employees, and Tango explained the differences between each plan in simple, relevant terms. A plan optimizer tool allowed employees to walk through a series of questions and decide which plan was the best based on their individual needs. Since the tool is online, employees can log in from home and walk through the steps with their spouse, and discuss their options. Our CEO and his wife went online at home to use the plan optimizer, and they ended up choosing the CDHP. In all, over a thousand of our employees logged on to the online tool, with most spending at least 20 minutes reviewing and comparing their options.
For even more employee awareness, Tango put a communication plan in place that included email-based updates and information. Weekly and monthly communications continue to go out to the employees explaining how to open and use their HSA, and other helpful tips on topics like reimbursements and tax filing. The emails were very specific and targeted, so employees were more likely to open and read them. Tango also provided videos and webinars specifically created for our employees with a direct comparison between the CDHP and the traditional PPO plan – helping to demystify the choice between the plans. Normally this kind of information would come from the HR team, but Tango’s level of service meant that our HR team could focus on other critical employee needs.
Reviewing our results at the end of the first enrollment period with Tango, we saw adoption of the CDHP and HSA go from 5% of the employee base up to 30%. Our employees were pleased with the plan changes and with the amount of information they were getting about the growth of their HSAs. And it was a huge win for the company: BOK Financial saved over $880,000 in premiums and avoided an additional $190,000 in taxes.
BOK Financial continues to work with Tango to boost further adoption of the CDHP, and to retain existing plan members and ensure that employees are getting the maximum benefit out of their HSAs. As a chief human resource officer, the ability to increase adoption of the CDHP while maintaining our relationships with employees was very important to me. I’m thrilled that we’re able to retain our commitment to value our employees, even as we make changes that benefit the company’s bottom line.
Why employees need 401(k) investment advice
Originally posted August 21, 2014 by Michael Giardina on https://ebn.benefitnews.com
This retirement disconnect is not surprising, according to Schwab Retirement Plan Services, which released a survey this week of more than 1,000 401(k) plan participants. “We often see that participants are hesitant to take action when they’re not completely comfortable with the matter at hand, and this is especially true when it comes to financial decisions,” says Steve Anderson, head of retirement plan services at Charles Schwab.
Aside from health coverage, the survey found nearly 90% of workers agreed that the 401(k) is a “must-have” benefit, more than extra vacation days or the ability to telecommute. However, employees said they spent more time researching options for a new car (about 4.3 hours) or vacations (about 3.8 hours) than researching their 401(k) investment choices (2.1 hours).
“The fact that an overwhelming majority of workers demand 401(k)s is good news, because it shows that people understand that they are responsible for their own retirement,” Anderson tells EBN. “Participating in a 401(k) program helps workers develop the discipline to save, and the earlier they begin to save, the more prepared they will be for retirement.”
Meanwhile, about half of plan participants said that their defined contribution plan’s investment options can be more confusing than their health benefits options. But gaining the needed assistance to understand the real value of their retirement plan was not top-of-mind for employees, as respondents said they were more likely to hire someone to perform an oil change to their vehicle, landscape their yard or help with their taxes than to seek out assistance for their 401(k) investments.
Anderson adds that while educational resources from plan sponsors may be just what employees need to make sound investment decisions, he says that “if participants have to seek out these resources on their own, chances are they won’t utilize them to their full benefit.”
Even with the prevalence of auto-enrollment and auto-escalation, employers may still have to do more. Only one-quarter of employees with access to professional 401(k) advice report having used it, says Anderson.
“Now employers can take the next step in plan design by proactively delivering advice to their employees,” Anderson explains. “We know getting advice can make a big difference for workers, as we’ve witnessed the impact of 401(k) advice on participant outcomes.”
For example, 70% of respondents noted that they would feel extremely or very confident in their investment decisions if they used a financial professional. Meanwhile, only 39% highlight the same confidence level if they opted to make those investment choices themselves.
“Participants who receive advice save more, are better diversified and stay the course in times of market volatility,” Anderson explains.
Employers create game plan for expected health care cost increases
Originially posted on August 22, 2014 by Michael Giardina on https://ebn.benefitnews.com
Employers across the country predict that their health care costs will increase by 5.2% in 2015 if they decide to maintain their current health plan structures. With modest changes, this increase drops down to 4%, according to a recent Towers Watson’s survey of nearly 400 employee benefit professionals from midsize and large companies.
Meanwhile, Towers Watson finds that the rising tide of health care costs has become a main focus of executives, with two-thirds of chief financial officers and chief executive officers holding a key place in health benefit strategy discussions. It’s coming down to wire for many employers to get costs down as the ACA’s excise tax takes effect in 2018.
Randall Abbott, senior consultant with Towers Watson, says that many employers are approaching the cost conversation “as a balance of shareholder responsibility and social responsibility.” But it’s not a surprise that three-quarters of employers are worried about the excise tax, commonly referred to as the Cadillac tax.
“There is this impression that employers are just raising costs up,” Abbott explains, but highlights “they are doing it out of necessity.”
“They are trying to do it as thoughtfully and as responsibly as they can, and that’s a constant battle,” Abbott continues.
This battle, according to Towers Watson’s survey, is becoming a reality for many. More and more employers are planning to incorporate consumer-driven health plans, and other high-deductible health plans, into their coverage umbrella. By 2017, more than half of respondents expect to make this plan the only option, eliminating other plans.
“Inaction is not an option here,” Abbott explains, while noting that account-based health options such as health savings accounts can help all interested parties realize the costs at point-of-care.
Tom Meier, vice president of product development for Health Care Service Corporation, the nation’s largest customer-owned health insurer, agrees that CDHPs have been growing at record rates. Trade group America’s Health Insurance Plans reports that 15.5 million Americans were covered in HSA-eligible plans – a number that has tripled in the last six years.
“We’re seeing employers go all in on CDHPs, and I don’t see that slowing anytime soon,” Meier explains to EBN. “Employers are going to have to revisit their plan design and likely move out of those high cost benefit designs in order to comply and get under [the ACA’s excise tax] that threshold.”
Currently, HCSC has more than 2 million members enrolled in CDHPs under the insurer’s offering, which includes five Blue Cross and Blue Shield states. Meier adds that moving from $250 preferred provider organization health plan to a full-replacement $5,000 deductible CDHP is not something that employers should rush into. He adds that HR and benefit managers can also help to alleviate some of the expected employee unrest from the change by offering resources.
“As you’re asking them [employees] to be the consumers of care, you have to give them the tools to survive and thrive, or else you are kind of throwing them out into the wilderness,” Meier says.
Another growing trend for employees, which has been tabbed for movement in 2016 and 2017 by a third of Towers Watson survey respondents, is reducing company subsidies for spousal and dependent coverage. Also, 26% indicate they are considering excluding spousal coverage all together should they have coverage elsewhere.
Last summer, it was reported that UPS planned to stop providing coverage to a portion of employees’ spouses who were able to opt into medical coverage through their own employers. First reported by Kaiser Health News, it was disclosed that more cost associated with the landmark health care law was forcing the move. Of the more than 33,000 spouses being covered, UPS said that about 15,000 could gain coverage from their current employers.
UPS said in a memo to employees that “limiting plan eligibility is one way to manage ongoing health care costs, now and into the future, so that we can continue to provide affordable coverage for our employees.”
While UPS declined to comment on the past spousal health plan coverage change, Paul Fronstin, director of the Employee Benefit Research Institute’s health research and education program, notes that re-examining spousal coverage, as well as looking at HSA-eligible plans and health exchanges, are areas where employer interest is growing.
Fronstin adds that “everything is on the table,” however.
Avoiding PPACA excise tax a priority
Originally posted August 20, 2014 by Dan Cook on www.benefitspro.com.
Despite foreseeing record-breaking employee health care costs in the near term, major employers will continue to offer coverage to full and part-time workers. However, coverage for spouses and dependents could be targeted for cutbacks.
That’s the latest from a Towers Watson survey that found employers generally anticipate a 5.2 percent increase next year in health plan costs, which would put coverage cost per employee at an all-time high, Towers Watson said.
However, many employers are planning to make design changes to their plans. Should they occur, employers then project a 4 percent plan increase.
“Despite this cost trend, most (83 percent) employers consider health benefits an important element of their employee value proposition, and plan to continue subsidizing and managing them for both full-time and part-time active employees,” Towers Watson said. Virtually all of these large employers surveyed said they will continue to offer health benefits to employees, with few indicating they were ready to move coverage to a private exchange.
The results were gleaned from the company’s 2014 Health Care Changes Ahead Survey.
Large employers were asked about their health care-related cost concerns for the future. A major one is the excise tax that goes into effect in 2018 as part of the full rollout of the Patient Protection and Affordable Care Act.
“Nearly three-quarters (73 percent) of employers said they are somewhat or very concerned they will trigger the tax based on their current plans and cost trajectory,” Towers Watson said. “More than four in 10 (43 percent) said avoiding the tax is the top priority for their health care strategies in 2015. As a result of the excise tax and other provisions of the health care reform law, CEOs and CFOs are more actively engaged in strategy discussions.”
The objective is not to eliminate or even substantially reduce employee coverage, Towers Watson said, but to continue to manage costs as finely as possible without gutting coverage.
“The emphasis is on achieving or maintaining a high-performance health plan,” said Randall Abbott, senior consultant at Towers Watson. “And CFOs are now focused on a new gold standard: managing health cost increases to the Consumer Price Index. This requires acute attention to improving program performance."
Other key findings from the study:
- 81 percent of employers plan moderate to significant changes to their health care plans over the next three years, up from 72 percent a year ago;
- 48 percent are considering tying incentives to reaching a specified health outcome such as biometric targets, compared with just 10 percent that intend to adopt it in 2015;
- 37 percent are considering offering plans with a higher level of benefit based on the use of high-performance or narrow networks of medical providers, compared with just 7 percent in 2015;
- 34 percent are considering telemedicine, compared with 15 percent in 2015, as employers encourage employees to use such telemedicine strategies as virtual physician office visits to improve access and efficiency of care delivery;
- 33 percent are considering significantly reducing company subsidies for spouses and dependents (10 percent have already implemented such reductions, and 9 percent intend to do so in 2015);
- 26 percent said they are considering spouse exclusions or surcharges if coverage is available elsewhere (30 percent have that tactic in place now, and another 7 percent expect to add it in 2015);
- 30 percent of employers considering caps on health care coverage subsidies for active employees, using defined contribution approaches (13 percent have them in place today and another 3 percent planning them for 2015).
Employers continue to study private exchanges, although 77 percent “are not at all confident public exchanges will provide a viable alternative for their active full-time employees in 2015 or 2016.”
Still, 24 percent said private exchanges could provide a viable alternative for their active full-time employees in 2016. They are looking at three key factors to emerge that would push them in that direction:
- Evidence they can deliver greater value than their current self-managed model (64 percent);
- Adoption of private exchanges by other large companies in their industry (34 percent);
- An inability to stay below the excise tax ceiling as 2018 approaches (26 percent).
“The most effective employers are continually evaluating new strategies for improving health plan performance,” Abbott said. “Examples include a steady migration to account-based health plans, action-based incentives, adoption of value-based payment methods with health plan partners and plan designs that drive efficiencies. Other options are technology-based solutions such as telemedicine, fitness devices or trackers, and social media to encourage employees to take a more active role in both their personal health status and how they use health care goods and services.”
Voluntary benefits help small businesses think big
Originally posted August 18, 2014 by Rich Williams on https://ebn.benefitnews.com
On a typical Saturday, you may drop off your car with your trusted mechanic, stop by the hardware store for a few supplies, grab lunch at a local sandwich shop and pick up some groceries on the way home. Every day, we enjoy the products and services delivered by small businesses.
Small business is the engine that powers our economy. Of the nation’s private enterprises, only 2% employ 100 or more workers, and 90% employ no more than 20. Behind each small business is an owner who wears many hats and relies on employees to deliver their best work every day — there aren’t a lot of extra employees to pick up the slack if someone is sick, injured or leaving the company for good.
Recent economic times magnified bottom-line concerns of small business owners. Many who weathered the downturn did so with lean staffs willing to work harder and longer to keep the job. But as the economy improves, those hard-working employees are apt to look for opportunities with larger firms that offer richer benefits and better life balance. Benefits play an important role in this consideration; half of employees recently surveyed say benefits are an important reason they remain with their employer. Small business owners who don’t pay attention to benefits risk losing their best workers.
Smaller, but with similar concerns
Small companies experience all the employee retention and recruitment headaches that big employers do, but often without reserve resources and staff to help shoulder benefits responsibilities. Few have dedicated staff to assess current benefits and consider changes or additions employees desire; many don’t offer benefits beyond compensation. According to LIMRA, small firms that do offer benefits tend to give fewer choices than their larger counterparts. The benefits offered most often are coverage for medical (44%) and prescription drugs (40%). Only one in four small businesses surveyed offered dental or life insurance coverage.
But employees at small firms have the same life needs and concerns as big-firm workers. A survey of more than 1,000 small business employees conducted by Harris Poll on behalf of Colonial Life found that many more employees are concerned about retirement savings (50%) and financially surviving a temporary work disability (39%) than losing their jobs (33%).
Voluntary benefits: More choices, not higher costs
Without realizing the human resource cost, too many small businesses fail to offer employees access to the very choices that could nurture employee loyalty and tenure.Experts say that doesn’t have to be the case: With voluntary benefits, small business can — and many do — offer a wide range of benefits geared toward the unique company culture.
The key is keeping up with what employees want and need. Younger workers might not invest in a 401(k) retirement option, but they’re probably interested in a cafeteria plan that gives them flexibility to save for unexpected, big-ticket needs. Older workers are typically more keen to invest in disability and retirement savings opportunities. You can help your clients understand their employee demographics and make connections to the right benefit options.
Many small employers would like to offer or enhance existing benefits, but cite cost as a deterrent. The good news is the same employees who would like better benefits are also willing to pay for them. A 2014 Colonial Life-Harris Poll found employees at small firms are quite interested in additional, reasonably priced insurance benefits such as life, short-term disability, critical illness, accident and cancer coverage.
Voluntary benefits — personal insurance coverage workers can buy through employers at a lower rate than they could get on their own — are a great way for your clients to offer a range of competitive benefits without damaging the bottom line. The value for employees starts with group rates, and they gain extra points in the employee loyalty ledger for convenience with payroll deduction options. And that can translate into enhanced employee retention: Small business workers who are satisfied with their benefits are more likely to feel loyal to their company.
Expanded benefit choices, low cost, and convenience are three very big reasons for small employers to dive into voluntary benefits. If keeping top talent motivated and productive is important to your clients, then find out today how easy it is to offer the benefits those highly valued employees crave most.
Are pharmacy discount cards still relevant?
Originally posted August 15, 2014 by Michael Giardina on https://ebn.benefitnews.com
Providers of prescription drug discount cards are increasing their efforts to reach out to employers, even as the Affordable Care Act is expected to decrease the ranks of those most likely to use the cards – those without health insurance.
The FamilyWize Community Service Partnership, which seeks to reduce the cost of prescription medicine for children, families and individuals by $1 billion by the end of 2015, is one provider looking to educate more employers about its discount card program.
“One of the areas we have really focused is with employers with lower waged workers because many of them do not work full-time, or they may not opt for the plan the company is providing because of costs,” says Lori Overstreet, vice president of marketing for FamilyWize. “Obviously, if they were part-time, then the company wouldn’t need to cover them, but this would give them a benefit, or if they opt out of the company plan this will also give them a benefit because the card is free to the consumer and free to the company.”
FamilyWize works with Envision Pharmaceutical Services, a pharmacy benefit management company, to negotiate prices at more than 60,000 brand name pharmacies such as Walmart, Kmart, CVS and Target. These negotiated prices are realized when FamilyWize discount drug card are used by consumers.
“The price depends obviously on the chain, the prescription itself, and even where they are,” says Steve Tremitiere, vice president of strategic partnerships at FamilyWize. He adds that most of the discounts appear with generics, but some can be for brand name drugs.
FamilyWize recently cemented 10-year national partnership with United Way Worldwide in an effort to address needs for the uninsured and underinsured. The average savings for FamilyWize discount card holders is 40% and can reach up to 75%, Tremitiere says.
Tremitiere, wants to be clear that all types of employees and employers can use the benefit, which easily be registered for online and printed out directly from a user’s home or work computer. “Employers are a good conduit because they are a trusted resource,” Tremitiere explains.
But not everyone agrees that these types of prescription drug discount cards still offer value in the post-ACA world.
“With the advent now of the Affordable Care Act and what’s involved, you probably have fewer and fewer people that would need it [prescription discount cards] because they can probably get the negotiated discount off their prescription drugs through their employers or exchanges,” says Michael J Staab, president and co-founder of Innovative Rx Strategies, a pharmacy consulting firm.
Gregory I. Madsen, a registered pharmacist and principal and co-CEO of Innovative Rx Strategies, adds that these discount cards are for “people who don’t have prescription drug coverage, which is very few people anymore.”
A virtual game changer of the prescription drug discount program was the introduction of Medicare Part D, also called the Medicare prescription drug benefit. The Medicare Prescription Drug Modernization Act was first signed into law by President George W. Bush in December 2003, and was seen as a safety net for seniors who were paying out-of-pocket for their prescription drugs.
“They were the cash-paying customer, they were the cash cows of the pharmacy world,” says Madsen. “They were paying cash for all their stuff and these cards were really targeting those people. And then Medicare Part-D came in and they got in under contracted rates and the cash-paying customer sort of went away, except for this small group of part-time employees that were employed.”
Even though the number of uninsured is shrinking because of the ACA, small employers may find value in discount prescription drug cards.
“If they [these employers] have less than 50 employees, they [employees] are part-time, this card will still be a better deal than them paying cash,” Madsen explains.
Other examples of prescription drug discount cards or prescription discount programs, in general, are surviving the ACA’s implementation. For instance, the National Association of Counties, the only national organization that represents county governments on Capitol Hill, offers the NACo Prescription Discount Card Program. The free program, operated by CVS Caremark, has been in place since 2005.
Andrew Goldschmidt, NACo director of membership marketing, says that the program is one of the “oldest and most mature” offered by the association, which dates back to administration of President Franklin Delano Roosevelt.
“You have a lot of folks that have a lot of prescriptions that are off formulary, depending on what kind of plan they have, or if they even have a plan,” says Goldschmidt. The NACo prescription discount card program has saved $570 million on 45 million prescriptions for employees in over 1,400 counties.
“The prescription drug program [usage] has gone down a bit, and rightly so if people are getting coverage through the ACA that didn’t have it before,” explains Goldschmidt, while noting that now it can be used as a good complementary program for employers.
Jackie Chin, executive vice president of New York State Restaurant Services, a division that handles all insurance programs for the New York State Restaurant Association, says the ACA “should not slow down registration” for its WellCard program. In addition to its prescription discounts, its WellCard offers discounts on dental, medical and vision coverage for uncovered employees and their families.
“Since there is no cost to participate in this discount card program, an employee can still register with WellCard because with regular health insurance through ACA or public health exchanges, your co-pays for prescription may be more expensive,” Chin explains. The New York State Restaurant Association includes a diverse group of approximately 10,000 members that range from small mom-and-pop restaurant owners to large restaurant groups.
“It differs from other prescription drug discount card because there is no membership fee and there is no cost to the employee and the employee's family member to avail themselves of any savings they can receive by using this discount card,” Chin says.
Why do companies bother with wellness programs?
Originally posted August 6, 2014 by Dan Cook on https://www.benefitspro.com
Communicating about the company wellness program is directly correlated to significant cost savings associated with those programs, a survey from Buck Consultants of Xerox found.
Another striking finding: U.S. employers said their primary motivation for offering wellness plans was to cut health care costs; respondents from outside the U.S. said their No. 1 reason was to improve employee morale and to reduce sick days and presenteeism – the phenomenon described as workers being on the job but not able to perform at the expected level.
The survey “shows an evolution in employer thinking to a much more holistic and measurable approach,” said Dave Ratcliffe, principal, Buck Consultants at Xerox. “Workers' wellness is now viewed as a state of well-being across the spectrum of health, wealth and career. Wellness is part of the employee value proposition. Social media, gamification, mobile technology, automated coaching and personalized communication are all part of the mix."
The big-picture results offered yet more evidence that wellness programs are becoming a standard component of benefits package design around the globe. More than three-quarters of respondents said they “are strongly committed to creating a workplace culture of health, to boost individual engagement and organizational performance.” More than two-thirds of these employers told Buck wellness plans “are extremely or very important to attract and retain workers.”
Employers are taking wellness investments seriously, the survey showed. While in 2012, 36 percent said they measured wellness outcomes, in the latest survey, 52 percent were measuring the outcomes. To encourage participation, 52 percent of employers said they rely on a very simple tactic: offer reduced insurance premiums to those who participate.
And, as wellness programs continue to gain advocates, employers are committing marketing dollars to them, developing brands for their programs and communicating regularly with employees about their programs.
Buck said the finding about communicating regularly with employees about aspects of a wellness plan was a common theme among every U.S. company that reported “a lower health care cost trend of 6 or more percentage points.” These employers send out targeted email messages and often mail wellness news to their homes to underscore the company commitment to wellness. The number branding their wellness programs is rising: 43 percent of respondents internationally said they created a brand identity for their plans.
But employers still have work to do to achieve the participation numbers they'd like to see.
“Participation rates indicate that employers are still struggling to find effective approaches to motivate workers. And there is a significant gap between employers' stated desire to create a culture of health and their current progress in achieving this goal,” Buck said. Buck's sixth global wellness survey analyzed responses from more than 1,000 organizations in 37 countries.
The surprising big winner when men take paternity leave
Originally posted August 7, 2014 by Bruce Jacobs on https://www.benefitspro.com
The U.S. Chamber of Commerce warns that paid paternity leave will be a job killer, cost businesses too much, increase administrative burdens, and lower wages for workers who have to foot the bill for a perk that not every employee can access equally.
Yet, if paid paternity leave ever becomes a benefit as commonplace as two-weeks’ vacation or a 401(k), the big winner, suggest researchers and scholars in the field, will be business itself.
Though the 1993 Family and Medical Leave Act entitles employees of either gender to take up to 12 weeks of unpaid parental leave to care for a newborn, and the Equal Employment Opportunity Commission recently issued “time for care” guidelines calling for equal parental leave for both genders, new dads are still expected to bring home the bacon, not cook it.
Josh Levs, a CNN journalist, notes that numerous studies have shown that men who return to work after paternity leave are often treated dismissively by their colleagues and bosses, and all too frequently suffer damage to their reputations, reduced job responsibilities, and even demotions.
Levs, who also writes the blog ‘levsnews,” and is working on a book about the male role in parenting, isn’t just venting. When CNN parent Time-Warner denied his request for paid paternal leave, he filed a complaint with the EEOC alleging discrimination against fathers, one of the first suits brought under the new guidelines.
A scant 16 percent of U.S. companies offer paid paternity leave, according to statistics from the Society for Human Resource Management, but loss of income isn’t the main reason why most men don’t take paternity leave. Ridicule from peers, fear of career suicide, and the cultural expectations of a man’s role in society concoct a brew far more potent than money in keeping men wing-tipped and in the conference room.
“There’s still a powerful stereotype that real men work; real men earn wages,” says Brad Harrington, director of Boston College’s Center for Work and Family, and one of the authors of the 2011 study, The New Dad: Caring, Committed and Conflicted. The report found that only “one in 20 fathers took more than two weeks off after their most recent child was born. Only one in a 100 took more than four weeks off.”
That’s beginning to change, particularly among millennials, those born between 1982 and the early 2000s, a cohort of workers larger and potentially more influential on the future of the American workplace than even the huge wave of soon-to-be retiring baby boomers.
Surveys by PricewaterhouseCoopers reveal that 70 percent of millennials place great importance on flexible work environments, as do 60 percent of baby boomers. But unlike boomers, millennials are willing to quit — or sue — if an employer fails to accommodate a balance between work and personal life.
A few cited examples:
- With no paid paternity leave offered by his company, 34-year-old newspaper reporter Aaron Gouveia stitched together vacation and sick time to be home with his first child. Before his second kid was born, he quit and joined a company that offered paid paternal leave.
- When Jim Lin, 41, a public relations specialist and publisher of the Busy Dad blog, wanted to take a couple days off to help care of his ailing son, his boss dismissed the request as something Lin’s wife should handle. Lin eventually quit. “I just didn’t want to be in that kind of environment,” he says.
- Though he didn’t quit his job, New York Mets second baseman Daniel Murphy had to endure withering heat from media big mouths when he missed the first two games of opening season to be with his wife during the birth of his first child.
The increasingly willingness of at least some male employees to take paternity leave will inevitably lead to a necessary cultural shift regarding paternity leave, industry insiders say.
Already, California, Rhode Island and New Jersey have been leaders of this trend by mandating paid parental leave in their states for mothers and fathers alike.
Governors of these three states may be paying heed to some surprising results of a report issued late last year by the World Economic Forum, which conducted extensive research on the global gender gap. Countries that found ways to keep women in the workforce after they became mothers, the study revealed, tend to have the strongest and most resilient economies worldwide.
But that’s not the big surprise: It’s the role paid paternity leave played in strengthening those economies. By offering it, encouraging it, and normalizing it, those countries enjoyed increased commercial vitality.
But why? With more women in the workplace, more women holding advanced degrees, and more women often earning salaries greater than their husbands, women employees are increasingly key to the success of many businesses. Yet, according to a 2007 study, 60 percent of professional women who left their careers after their baby was born said they stopped working because their husbands were not available to share childcare and household responsibilities.
Paternity leave “shapes domestic and parenting habits as they are forming,” writes Liza Mundy, author of "The Richer Sex: How the New Majority of Female Breadwinners Is Transforming Sex, Love and Family." Because men who take paternity leave are developing lifelong habits of shouldering more of the childcare and household responsibilities, she argues, working women can return to their careers confident that they aren’t the only ones responsible — and able — to raise children and maintain a household.
A recent report evaluating a paid paternity leave program in Iceland, in which 90 percent of all father take part, found that three years after the start of the program, 70 percent of parents who live together continue to share childcare and household duties. That’s an increase of 40 percent from the start of the program.
Though research indicates that women, men and children all win in that scenario, the biggest winner is business. Half the workforce — highly educated women — return to their desks, contributing skill, energy and acumen to the economy.
Play or Pay in 2015 — so many requirements, so little time
Originally posted August 6, 2014 by Dorothy Summers on https://ebn.benefitnews.com
2015 is getting close and the Employer Shared Responsibility Mandate (“Play or Pay”) under the Affordable Care Act (ACA) is almost here. So what does this mean for your organization? Play or Pay requires certain employers to offer affordable and adequate health insurance to full-time employees and their dependents, or they may be liable for a penalty for any month coverage is not offered.
Play or Pay goes into effect in the calendar year of 2015 for large employers only. However, mid-size employers aren’t entirely off the hook. They’ll have to report on insurance coverage even though they won’t be liable for penalties in 2015. By January 1, 2015, businesses with 100 or more full-time or full-time-equivalent employees must ensure they are offering health benefits to all of those working an average of 30 hours per week, or 130 hours per month. If an employer has a non-calendar year plan and can meet certain transitional rules, they can delay offering employee health benefits until the start date of their non-calendar year plan in 2015. Mid-sized employers will have to comply beginning in 2016.
Here are important questions that employers need to answer today:
- Do you know which category your business fits into?
- How do you classify who is a full-time employee?
- What do you need to do to comply with Play or Pay requirements?
Let’s take an in-depth look at each of these questions.
Which category do you fit into?
Whether you are a small, mid-sized, or large employer is determined by the number of full-time and full-time equivalent employees (FTEs). It sounds simple on the surface:
- Small employers have 1-49 full-time or FTE employees
- Mid-sized employers have 50-99 full-time or FTE employees
- Large employers have 100+ full-time or FTE employees
However, it’s important to remember that these numbers can be affected by several factors, including whether the employer is a part of a control group, seasonal employees and variable-hour employees. That brings us to our next question:
Who is a full-time employee?
The law defines a “full-time employee” for penalty purposes as an employee who, for any month, works an average of at least 30 hours per week, or 130 hours. This includes any of the following paid hours: vacation, holiday, sick time, paid layoff, jury duty, military duty and paid leave of absence under the Family and Medical Leave Act.
Employees who aren’t considered full-time include non W-2 leased workers, sole proprietors, partners in partnerships, real estate agents, and direct sellers.
Variable-hour employees—those who don’t work a set amount of hours each week—fall into a gray area. That is, they don’t need to be counted as full-time employees until and unless it becomes an established practice for them to work more than 30 hours per week.
To assist employers in determining whether variable hour workers will meet the definition of full-time employees (and therefore need to be offered health insurance), employers may use various “look back” and “look forward” periods. Here is a summary of terms used for measuring variable-hour employees:
- Measurement Period: A period from three to 12 months in which the employer would track hours to determine whether the employee worked an average of more than 30 hours per week.
- Stability Period: A period from six to 12 consecutive months in which the employer must provide health insurance coverage to employees who worked more than 30 hours per week in the Measurement Period. Note: must be at least six months and cannot be shorter than the Measurement Period.
- Administrative Period: A period not to exceed 90 days, which falls between the Measurement Period and Stability Period, and/or a short period after a new employee’s date of hire. Using this waiting period allows employers to analyze eligibility of full-time employees and provide enrollment information to enroll them in a plan before penalties could be assessed.
Does your plan meet the Play or Pay requirements?
To avoid penalties, you’ll need to make sure your plan meets certain requirements. First, coverage must be offered to full-time employees and their dependents. Under the ACA, dependents are defined as children under age 26. Spouses are not considered dependents.