4 Things Life Insurance Is Not
What is life insurance? People often get confused about what life insurance is and what it is not. Read this blog post for four things life insurance is not and a few tips on understanding them.
Are you confused about life insurance? I don’t blame you. When I first started writing about finances more than a decade ago, my understanding of life insurance was limited.
I knew about life insurance because it was offered through my employer, and I thought a $50,000 policy was a lot of money. I also recognized insurance company names from late-night TV commercials and the occasional bit of junk mail.
I understood “insurance” to be that stuff that you had to have for your car, your home, and your health. The “life” part was a big, blurry blob of “other.” If that’s how you’re feeling, here are a few tips that might help bring things into focus—by understanding the “nots.”
1. Life insurance through work is generally NOT enough. Since learning this myself some years back, I’ve noticed that many people never explore life insurance past what is offered through their work. Policies through work are a great benefit to have, but are usually limited to one- or two-times your salary or a fixed amount like $50,000. Plus the coverage typically ends when your employment there does.
How far will an amount like that go when you consider what’s left behind for your loved ones: the loss of your income and mostly likely debts and bills. What about things like rent or mortgage, child-care and education costs?
An easy way to get a working idea of how much life insurance you need is with a Life Insurance Needs Calculator from a neutral source like www.lifehappens.org/howmuch.
2. Life insurance is NOT a luxury item. Many people have not even considered buying life insurance because they’re convinced it’s a luxury. In a recent study by Life Happens and LIMRA, consumers thought the cost of a 20-year, $250,000 level term life insurance policy for a healthy 30-year-old was three times higher than it generally is. Younger people, in particular, overestimate the cost of a term policy by a factor of five.
If you took a guess at what that policy above would cost, what would you say? It comes out to about $13 or so a month for that policy. Definitely not a luxury—most of us spend more than that on a meal out.
3. Life insurance is NOT just about covering funeral expenses. While covering funeral expenses is very important, and a major reason people purchase it, life insurance does so much more. If something happens to you, life insurance benefits can help replace lost income, or pay off a mortgage, or help ensure a college fund or safeguard a retirement nest egg.
The proceeds of a life insurance policy are generally tax-free and can be used for anything your loved ones may need now and well into the future. Amazing, right?
4. Life insurance is NOT just for really healthy people. Granted, life insurance is less expensive the younger and healthier you are but don’t discount it just because you’re not in triathlete shape!
Many people don’t considering buying life insurance because they think they won’t qualify. But when certain health conditions, such as diabetes or high blood pressure, are under control with a doctor’s guidance or medication, it’s often possible to qualify. You may even be able to get coverage after a heart attack. Just know that it is probably best to work with an experienced insurance agent if you are concerned about a health issue and qualifying for coverage.
Now, if you’re a bit overwhelmed with this information and perhaps don’t know where to start, just know that a life insurance agent will sit down with you at no cost to go over your needs and help you get life insurance coverage to fit your budget. If you don’t have an agent or advisor, go here for suggestions on how to find one. You can also tap the Agent Locator there to find someone in your area.
Remember, the right agent or advisor can help you make sense of the confusion and get you on track for the financial future you want—with the protection your loved ones need.
SOURCE: Mosher, H. (30 October 2018) "4 Things Life Insurance Is Not" (Web Blog Post). Retrieved from https://lifehappens.org/blog/4-things-life-insurance-is-not/
9 Reasons Why Stay-at-Home Parents Need Life Insurance
It's not just parents with full-time jobs that need life insurance. Stay-at-home parents also need coverage. Read this blog post for 9 reasons why stay-at-home parents should have life insurance as well.
You’re probably already aware that a parent with a job outside the house most likely needs life insurance to protect their loved ones in case something were to happen. But it’s not just breadwinners who need coverage—stay-at-home parents do, too. Here are nine reasons why.
1. To replace the value of their labor. Stay-at-home parents are caretakers, tutors, cooks, housekeepers, chauffeurs, and so much more 365 days a year. And all that work comes with a price tag: Salary.com reports that stay-at-home-parents contribute the equivalent of a $162,581 annual salary to their households. If the unthinkable were to happen, a surviving partner would be on the hook for a slew of new expenses that the stay-at-home parent previously shouldered. Term life insurance is generally a quick and affordable way to get a substantial amount of coverage like this for a specific period of time, such as 10 or 20 years—often until you pay of your mortgage or the kids are grown and gone.
2. To factor in the contributions of any future income. Many stay-at-home parents return to the workforce once their kids are older. Life insurance could help bridge the gap that their future earnings would have contributed to the household.
3. To pay off any debt. From student loans to credit card debt to an informal loan from a family member, there are lots of ways to owe money. Life insurance can help settle any debts left behind so they don’t create stress for grieving loved ones.
4. To cover funeral expenses. Would you believe that the average funeral runs between $7,000 and $10,000, according to parting.com? And that may not cover the cost of the burial, headstone and other expenses. Many families want to honor a loved one’s memory but have trouble finding the funds to cover all the costs. Fortunately, the payout from a life insurance policy can help cover final wishes.
5. To leave a legacy. If a stay-at-home spouse has a passion for a place of worship, an alma mater, or another nonprofit organization, life insurance proceeds can be used to leave a meaningful charitable gift.
6. To boost savings. Permanent life insurance, which offers lifelong protection as long as you pay your premiums, may offer additional living benefits such as the ability to build cash value. This can be used in the future for any purpose you wish, from making a down payment on a house to paying for college tuition. Keep in mind, though, that withdrawing or borrowing funds will reduce your policy’s cash value and death benefit if not repaid.
7. To guarantee insurability. Your health can change in an instant. Getting a permanent life insurance policy when you’re young and healthy means you’ll have lifelong coverage. Then you won’t have to worry if later on, you develop a health condition that would make it hard or even impossible to get life insurance.
8. To receive tax-free benefits. Life insurance is one of the few ways to leave loved one's money that is generally income-tax free.
9. To give loved ones peace of mind. Losing a parent and partner before their time is already hard enough without having to worry about unsettled debts, childcare costs, funeral bills, and other expenses.
As you can see, life insurance for stay-at-home parents is just as important as it is for parents who work outside the home. Schedule a time to talk with an insurance professional in your community to learn about your options and get coverage that fits your lifestyle and budget.
SOURCE: Austin, A. (11 December 2018) "9 Reasons Why Stay-at-Home Parents Need Life Insurance" (Web Blog Post). Retrieved from https://lifehappens.org/blog/9-reasons-why-stay-at-home-parents-need-life-insurance-2/
Summertime—and Working Ain’t Easy
Providing flexible hours during the summer months is often appreciated by employees and can help boost engagement. Continue reading this blog post from SHRM for best practices on managing staff during the summer months.
Summertime is that season when "the livin' is easy," as the famous tune by George Gershwin goes—a season when work often takes a back seat to pool parties, barbecues and beach vacations.
How do employers keep workers' heads in the game when their toes are itching for the sand? Or how do they plan for the disruption that summer holidays and vacation schedules inevitably bring? What are their best practices for keeping productivity high?
In the health care industry, patients' needs mean productivity can't fluctuate with the seasons. At Maine Medical Center in Portland, nurse manager Michele Higgins oversees a staff of 70 on an adult general medical unit.
"Summer is busy in health care, especially at a level-one trauma hospital such as Maine Med, but we continue to care effectively for patients, and we remain patient-centered," she said.
Anticipating higher patient traffic in the summer months, the hospital pushes out its June, July and August schedules as early as March. Staff view the schedules, are reminded of guidelines for taking vacation time, and plan time off around shifts or swap shifts with co-workers.
But what happens when an employee unexpectedly calls out "sick" over the Fourth of July weekend? A pool of floating in-house nurses responds to shortages. When the pool of nurses cannot meet the demand, managers ask staff to cover shifts for incentive pay. According to Higgins, a 10-year Maine Med veteran, the numbers typically work out and the medical center maintains favorable nurse-to-patient ratios. But she's always prepared to show up in scrubs and jump in as needed. "Being present is important to me," she said. "I make myself accessible and stay positive, supporting the staff and recognizing their efforts."
Higgins rewards her staff with hospital-sponsored special events throughout the summer. These include "nurses' week" at the beginning of May, when employees win gift cards and goody bags in daily raffles, participate in a book swap, and play games like cornhole. Later in the summer, senior leaders host staff appreciation lunches, smoothie breaks on the patio and an ice cream bar. The hospital also reserves box seats for each of its 23 units at minor league baseball games at Hadlock Field in downtown Portland.
"Maine Med is a great place to work," Higgins said. "But busy is the norm."
Workers Appreciate Flexibility
For employees who are parents, juggling work and school-age children who are either home for the summer, at camps or in day care can be challenging—and expensive.
Recognizing this, some employers observe summer hours so parents can start and end the workday earlier. Employees at Princeton University call it quits at 4:30 p.m. instead of 5 p.m. from June 1 through Labor Day.
River City Dental, a dental office in Williamsport, Md., operates on an 8 a.m. to 3:30 p.m. schedule in June, July and August. Office manager Lori Robine reports that the employees, many of whom are parents, appreciate the flexibility of the shortened workday and increased free time.
Workplace flexibility is another benefit that can boost spirits—and productivity—during the summer months. Maine Medical Center can't tweak its summer hours, but fewer meetings are held, and they're even put on hold in July.
When summer arrives, workplace productivity doesn't have to suffer. Employers can look for opportunities to be flexible with scheduling and dress codes, find ways to recognize and reward employees, and host events that celebrate the warm months.
Michele Poacelli is a freelancer based in Mercersburg, Pa.
SOURCE: Poacelli, M. (12 July 2019) "Summertime—and Working Ain’t Easy" (Web Blog Post). Retrieved from https://www.shrm.org/ResourcesAndTools/hr-topics/employee-relations/Pages/employee-engagement-in-the-summer.aspx
Giving onsite clinics an engagement booster shot
In efforts to reduce healthcare spend and increase the population's health, many employers are offering a variety of employee wellness services and programs. Read this blog post to learn more about increasing engagement in onsite clinics.
Employers of all sizes and industries are currently offering a variety of wellness services that include preventive, acute, primary, chronic disease and occupational healthcare programs at or near the worksite. These benefits are intended to reduce healthcare spend, increase the population’s health and productivity and positively impact recruitment and retention efforts.
In fact, according to two 2018 studies by the National Association of Worksite Health Centers, more than one-third of all employers and close to 50% of large firms are now operating worksite clinics. But just because employers offer such benefits doesn’t mean employees will take advantage of these services, even when they’re free.
But many employers are frustrated to find that 20% or less of the targeted or covered workers utilizes their programs — with millions of dollars in benefits wasted.
Failure can be caused by lack of promotion, inadequate incentives, poor communications or providers who don’t fit into the culture of the employer. However, one of the most significant problems than can undermine a benefit program, especially a worksite clinic, is when employees don’t trust that their personal health data will be confidential and fear it will be used for employment decisions.
Employers who achieve high benefit utilization build the foundation for success by informing their workforce, prior to a benefit or clinic being available and on an ongoing basis, of the many federal and state confidentiality and privacy laws that dictate who can receive personal and occupational health information and the limitations placed on employers.
Communications, posters, presentations and other marketing vehicles must assure employees that the employer will only see aggregate, not personal data from the offered benefit programs. Emphasize that the program’s or clinic’s medical providers will be the only individuals dealing with this information, and that by law they are legally and ethically obligated to keep this confidential.
Understanding the culture and labor-management dynamics of an organization are also critical to building trust. To increase use, it’s often best to market the program or facility under a new brand name, such as “The Healthy Life” or use the name of the provider who manages the program or clinic, rather than the employer’s name.
The physical design or location of a benefit program or clinic also needs to be kept in mind. Clinical or counseling activities should be separate from business offices or fitness centers where a person taking advantage of the benefit could be seen by their peers, managers and supervisors.
Achieving engagement in a health benefit program or clinic is key to its success, as well as obtaining the resources and support of senior management for its expansion and continuance. The design, marketing and location of benefit programs need to be well-planned so the workforce is confident that the confidentiality of their patient records will be maintained and not used for employment decisions.
SOURCE: Boress, L. (9 July 2019) "Giving onsite clinics an engagement booster shot" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/how-to-increase-employee-engagement-in-healthcare-benefits
PCORI Fee Is Due by July 31 for Self-Insured Health Plans
The annual fee for the federal Patient-Centered Outcomes Research Institute (PCORI) is due July 31, 2019. Plans with terms ending after September 30, 2012, and before October 1, 2019, are required to pay an annual PCORI fee. Read this article from SHRM to learn more.
An earlier version of this article was posted on November 6, 2018
The next annual fee that sponsors of self-insured health plans must pay to fund the federal Patient-Centered Outcomes Research Institute (PCORI) is due July 31, 2019.
The Affordable Care Act mandated payment of an annual PCORI fee by plans with terms ending after Sept. 30, 2012, and before Oct. 1, 2019, to provide initial funding for the Washington, D.C.-based institute, which funds research on the comparative effectiveness of medical treatments. Self-insured plans pay the fee themselves, while insurance companies pay the fee for fully insured plans but may pass the cost along to employers through higher premiums.
The IRS treats the fee like an excise tax.
The PCORI fee is due by the July 31 following the last day of the plan year. The final PCORI payment for sponsors of 2018 calendar-year plans is due by July 31, 2019. The final PCORI fee for plan years ending from Jan. 1, 2019 to Sept. 30, 2019, will be due by July 31, 2020.
In Notice 2018-85, the IRS set the amount used to calculate the PCORI fee at $2.45 per person covered by plan years ending Oct. 1, 2018, through Sept. 30, 2019.
The chart below shows the fees to be paid in 2019, which are slightly higher than the fees owed in 2018. The per-enrollee amount depends on when the plan year ended, as in previous years.
| Fee per Plan Enrollee for Payment Due July 31, 2019 |
|
| Plan years ending from Oct. 1, 2018, through Sept. 30, 2019. | $2.45 |
| Fee per Plan Enrollee for Payment Due July 31, 2018 |
|
| Plan years ending from Oct. 1, 2017, through Dec. 31, 2017, including calendar-year plans. | $2.39 |
| Plan years ending from Jan. 1, 2017, through Sept. 30, 2017 | $2.26 |
| Source: IRS. |
Nearing the End
The PCORI fee will not be assessed for plan years ending after Sept. 30, 2019, "which means that for a calendar-year plan, the last year for assessment is the 2018 calendar year," wrote Richard Stover, a New York City-based principal at HR consultancy Buck Global, and Amy Dunn, a principal in Buck's Knowledge Resource Center.
For noncalendar-year plans that end between Jan. 1, 2019 and Sept. 30, 3019, however, there will be one last PCORI payment due by July 31, 2020.
"There will not be any PCORI fee for plan years that end on October 1, 2019 or later," according to 360 Corporate Benefit Advisors.
The PCORI fee was first assessed for plan years ending after Sept. 30, 2012. The fee for the first plan year was $1 per plan enrollee, which increased to $2 per enrollee in the second year and was then indexed in subsequent years based on the increase in national health expenditures.
FSAs and HRAs
In addition to self-insured medical plans, health flexible spending accounts (health FSAs) and health reimbursement arrangements (HRAs) that fail to qualify as “excepted benefits” would be required to pay the per-enrollee fee, wrote Gary Kushner, president and CEO of Kushner & Co., a benefits advisory firm based in Portage, Mich.
As set forth in the Department of Labor's Technical Release 2013-03:
- A health FSA is an excepted benefit if the employer does not contribute more than $500 a year to any employee accounts and also offers a group health plan with nonexcepted benefits.
- An HRA is an excepted benefit if it only reimburses for limited-scope dental and vision expenses or long-term care coverage and is not integrated with a group health plan.
Kushner explained that:
- If the employer sponsors a fully insured group health plan for which the insurance carrier is filing and paying the PCORI fee and the same employer sponsors an employer-funded health care FSA or an HRA not exempted from the fee, employers should only count the employees participating in the FSA or HRA, and not spouses or dependents, when paying the fee.
- If the employer sponsors a self-funded group health plan, then the employer needs to file the form and pay the PCORI fee only on the number of individuals enrolled in the group health plan, and not in the employer-funded health care FSA or HRA.
An employer that sponsors a self-insured HRA along with a fully insured medical plan "must pay PCORI fees based on the number of employees (dependents are not included in this count) participating in the HRA, while the insurer pays the PCORI fee on the individuals (including dependents) covered under the insured plan," wrote Mark Holloway, senior vice president and director of compliance services at Lockton Companies, a benefits broker and services firm based in Kansas City, Mo. Where an employer maintains an HRA along with a self-funded medical plan and both have the same plan year, "the employer pays a single PCORI fee based on the number of covered lives in the self-funded medical plan (the HRA is disregarded)."
Paying PCORI Fees
Self-insured employers are responsible for submitting the fee and accompanying paperwork to the IRS, as "third-party reporting and payment of the fee is not permitted for self-funded plans," Holloway noted.
For the coming year, self-insured health plan sponsors should use Form 720 for the second calendar quarter to report and pay the PCORI fee by July 31, 2019.
"On p. 2 of Form 720, under Part II, the employer needs to designate the average number of covered lives under its applicable self-insured plan," Holloway explained. The number of covered lives will be multiplied by $2.45 for plan years ending on or after Oct. 1, 2018, to determine the total fee owed to the IRS next July.
To calculate "the average number of lives covered" or plan enrollees, employers should use one of three methods listed on pages 8 and 9 of the Instructions for Form 720. A white paper by Keller Benefit Services describes these methods in greater detail.
Although the fee is paid annually, employers should indicate on the Payment Voucher (720-V), located at the end of Form 720, that the tax period for the fee is the second quarter of the year. "Failure to properly designate 'second quarter' on the voucher will result in the IRS's software generating a tardy filing notice, with all the incumbent aggravation on the employer to correct the matter with the IRS," Holloway warned.
A few other points to keep in mind: "The U.S. Department of Labor believes the fee cannot be paid from plan assets," he said. In other words, for self-insured health plans, "the PCORI fee must be paid by the plan sponsor. It is not a permissible expense of a self-funded plan and cannot be paid in whole or part by participant contributions."
In addition, PCORI fees "should not be included in the plan's cost when computing the plan's COBRA premium," Holloway noted. But "the IRS has indicated the fee is, however, a tax-deductible business expense for employers with self-funded plans," he added, citing a May 2013 IRS memorandum.
SOURCE: Miller, S. (2 July 2019) "PCORI Fee Is Due by July 31 for Self-Insured Health Plans" (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/2019-pcori-fees.aspx
DOL Offers Wage and Hour Compliance Tips in Three Opinion Letters
On July 1, the U.S. Department of Labor (DOL) released three opinion letters that address how to comply with the Fair Labor Standards Act (FLSA) regarding wage and hour issues. Continue reading this blog post to learn how the agency would enforce statutes and regulations specific to these situations.
The U.S. Department of Labor (DOL) issued three new opinion letters addressing how to comply with the Fair Labor Standards Act (FLSA) when rounding employee work hours and other wage and hour issues.
Opinion letters describe how the agency would enforce statutes and regulations in specific circumstances presented by an employer, worker or other party who requests the opinion. Opinion letters are not binding, but there may be a safe harbor for employers that show they relied on one.
The DOL Wage and Hour Division's July 1 letters covered:
- Permissible rounding practices for calculating an employee's hours worked.
- How to apply the "highly compensated employee" exemption from overtime pay to paralegals who are employed by a trade organization.
- How to calculate overtime pay for nondiscretionary bonuses that are paid on a quarterly and annual basis.
Here are the key takeaways for employers.
Rounding Practices
One letter reviewed whether an organization's rounding practices are permissible under the Service Contract Act (SCA), which requires government contractors and subcontractors to pay prevailing wages and benefits and applies FLSA principles to calculate hours worked.
The employer's payroll software extended employees' clocked time to six decimal points and then rounded that number to two decimal points. When the third decimal was less than .005, the second decimal was not adjusted, but when the third decimal was .005 or greater, the second decimal was rounded up by 0.01. Then the software calculated daily pay by multiplying the rounded daily hours by the SCA's prevailing wage.
Employers may round workers' time if doing so "will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked," according to the FLSA.
"It has been our policy to accept rounding to the nearest five minutes, one-tenth of an hour, one-quarter of an hour, or one-half hour as long as the rounding averages out so that the employees are compensated for all the time they actually work," the opinion letter said.
Based on the facts provided, the DOL concluded that the employer's rounding practice complied with the FLSA and the SCA. The rounding practice was "neutral on its face" and appeared to average out so that employees were paid for all the hours they actually worked.
For employers, the letter provides two significant details, said Marty Heller, an attorney with Fisher Phillips in Atlanta. First, it confirms that the DOL applies the FLSA's rounding practices to the SCA. Second, it confirms the DOL's position that computer rounding is permissible, at least when the rounding involves a practice that appears to be neutral and does not result in the failure to compensate employees fully over a period of time, he said.
Patrick Hulla, an attorney with Ogletree Deakins in Kansas City, Mo., noted that the employer's rounding practice in this case differed from many employers' application of the principle. Specifically, the employer was rounding time entries to six decimal places. Most employers round using larger periods of time—in as many as 15-minute increments, he said.
"Employers taking advantage of permissible rounding should periodically confirm that their practices are neutral, which can be a costly and time-consuming exercise," he suggested.
Exempt Paralegals
Another letter analyzed whether a trade organization's paralegals were exempt from the FLSA's minimum wage and overtime requirements. Under the FLSA's white-collar exemptions, employees must earn at least $23,660 and perform certain duties. However, employees whose total compensation is at least $100,000 a year are considered highly compensated employees and are eligible for exempt status if they meet a reduced duties test, as follows:
- The employee's primary duty must be office or nonmanual work.
- The employee must "customarily and regularly" perform at least one of the bona fide exempt duties of an executive, administrative or professional employee.
Employers should note that the DOL's proposed changes to the overtime rule would raise the regular salary threshold to $35,308 and the highly compensated salary threshold to $147,414.
Because "a high level of compensation is a strong indicator of an employee's exempt status," the highly compensated employee exemption "eliminates the need for a detailed analysis of the employee's job duties," the opinion letter explained.
The paralegals described in the letter appeared to qualify for the highly compensated employee exemption because all their duties were nonmanual, they were paid at least $100,000 a year, and they "customarily and regularly" perform at least one duty under the administrative exemption.
The letter cited "a litany of the paralegals' job duties and responsibilities—including keeping and maintaining corporate and official records, assisting the finance department with bank account matters, and budgeting—that are directly related to management or general business operations," the DOL said.
The DOL noted that some paralegals don't qualify for the administrative exemption because their primary duties don't include exercising discretion and independent judgment on significant matters. But the "discretion and independent judgment" factor doesn't have to be satisfied under the highly compensated employee exception.
Calculating Bonuses
The third letter discussed whether the FLSA requires an employer to include a nondiscretionary bonus that is a fixed percentage of an employee's straight-time wages received over multiple workweeks in the calculation of the employee's regular rate of pay at the end of each workweek.
Under the FLSA, nonexempt employees must be paid at least 1 1/2 times their regular rate of pay for hours worked beyond 40 in a workweek, unless they are covered by an exemption—but the regular rate is based on more than just the employee's hourly wage. It includes all remuneration for employment unless the compensation falls within one of eight statutory exclusions. Nondiscretionary bonuses count as remuneration and must be included in the calculation.
"An employer may base a nondiscretionary bonus on work performed during multiple workweeks and pay the bonus at the end of the bonus period," according to the opinion letter. "An employer, however, is not required to retrospectively recalculate the regular rate if the employer pays a fixed percentage bonus that simultaneously pays overtime compensation due on the bonus."
The annual bonus, in this case, was not tied to straight-time or overtime hours. Based on the facts provided by an employee, the DOL said that after the employer pays the annual bonus, it must recalculate the regular rate for each workweek in the bonus period and pay any overtime compensation that is due on the annual bonus.
For the quarterly bonuses, the employee received 15 percent of his straight-time and overtime wages so they "simultaneously include all overtime compensation due on the bonus as an arithmetic fact," the DOL said.
SOURCE: Nagele-Piazza, L.(2 July 2019) "DOL Offers Wage and Hour Compliance Tips in Three Opinion Letters" (Web Blog Post). Retrieved from https://www.shrm.org/ResourcesAndTools/legal-and-compliance/employment-law/Pages/DOL-Offers-Wage-and-Hour-Compliance-Tips-in-Three-Opinion-Letters.aspx
Here’s how to ensure employees know how to pick the right benefits
Open enrollment is an important time for employees, but it's often a stressful one as well. According to recent research, the average employee spends less than 30 minutes selecting their benefits. Read this blog post for more on communicating benefit options to employees.
Annual enrollment is an important time for employees — but it’s also a stressful one. The choices they make can affect their financial health, yet the average employee spends less than 30 minutes selecting their benefits, according to research from benefits provider Unum.
With annual enrollment planning underway, now is the time for employers to ask themselves, “How can we help employees make the right benefits decisions?” The answers may be more valuable than they think.
See Also: Ideas for Effectively Demonstrating Plan Choices
Today’s workforce is the most diverse in history, with four generations actively working, and a fifth connected through benefits and pensions. A robust benefits package is increasingly important for recruitment and retention, challenging employers to provide choices and options that support diverse needs.
About 80% of employees prefer a job with benefits over one with a higher salary but no benefits, according to the American Institute of CPAs. As such it’s vital that employers ensure their workforce is engaged with their benefits and taking full advantage of what is available. Here are five ways employers can make sure that happens.
See Also: Ideas to Help Employees Find their "Best Fit" Plan
1. Acknowledge that decision support addresses personalized needs. Tools that demystify the benefits selection process can help employees make choices that align with their risk tolerance, financial circumstances and unique needs. The best tools lead employees to a recommended suite of benefits options that fit their individual physical, emotional and financial health.
2. Know that year-round engagement improves benefits literacy. While employees appreciate benefits, they aren’t experts. Indeed, roughly one-third of employees are outright confused about their benefits, according to recent data from Businessolver. Keeping up a cadence of communication about benefits throughout the year can help address this challenge.
3. Recognize the power of a total rewards statement. It empowers employees to maximize the benefits available to them, and these tools can be accessed at any time, not just during enrollment. The most impactful solutions aggregate all employee benefits options in one integrated offering that demonstrates the full value of compensation and benefits investments made by them and their employer.
See Also: Communicating the Value of Employee Benefits
4. Think about different generations. Customizable benefits options are a crucial step in meeting the needs of today’s workforce. For example, our latest data shows that nearly two-thirds of millennials are concerned with managing their monthly budget, while over 50% of boomers are most worried about a large, unexpected cost. Having core medical plan offerings along with complementary voluntary options helps employees address varying financial needs. Likewise, paid parental leave and different health plan options assist families at any stage, and they make it likelier that your employees will engage with their benefits and remain with your organization.
5. Be sure employees know that savings vehicles contribute to financial well-being. Employees of all ages and income levels are facing financial stressors — but they may not be the same ones. Offering different financial benefits, such as student loan assistance and emergency savings accounts, in addition to retirement benefits, enables your employees to address both their immediate and long-term financial needs.
See Also: Avoiding Communication Overload During Open Enrollment
More than ever, employers have a responsibility to help employees make informed decisions when it comes to selecting the right benefits. Otherwise, they risk losing top talent to organizations that are better implementing benefits strategies and technologies.
By meeting the needs of a diverse workforce with an array of benefits options supported by appropriate decision support resources, employers can ensure they’re meeting their workforce’s needs and retaining valuable employees.
See Also: Incorporating Incentives to Create Educated Benefit Consumers
SOURCE: Shanahan, R. (26 June 2019) "Here’s how to ensure employees know how to pick the right benefits" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/educating-employees-to-pick-the-right-benefits
No Gym Required for These (Financial) Fitness Tips
While getting "healthy and fit" is important, it's also important to be concerned about your financial fitness. Read this blog post for tips to stay financially fit at any age.
If you’re like me, your social media feeds are jammed with headlines about getting “healthy and fit” in the new year. Of course, they’re referring to diet and exercise and common resolutions to drop pounds and work out more often.
But it’s just as important to be concerned about your financial fitness—where you can also drop some baggage and get some strength training without going near a gym. (In fact, if you have a subscription to a gym membership but aren’t going, that’s one financial fix you can make right now.)
Here are some tips to consider for any age:
IN YOUR 20s:
Workout: Have a portion of each paycheck deposited into your savings account, or take advantage of bank programs that “round up” or have other automated savings features. Trust me, you won’t feel this burn.
Diet: Start making coffee at home or at the office instead of going for expensive lattes. Fewer calories, and more money in your pocket. This is a good time to consider getting life insurance (whether you are single or attached) as it is less expensive the younger and healthier you are.
You also need to consider disability insurance, which pays you a portion of your salary if you are sick or injured and unable to work—because who would pay your bills if you couldn’t? Your work may offer this as an employee benefit, so check with your HR department to find out if you have it and what it covers (short-term, long-term disability, etc.)
IN YOUR 30s:
Workout: You probably have a retirement program at work or some other preliminary retirement planning in place. If you don’t, start.
If you do, why not increase the amount you divert into retirement by a percentage point each year—equaling your company match percentage, if they have it, is a good target.
Diet: You may not have gotten life insurance beyond what you have through your workplace, but now is the time to consider an individual policy that you own. Remember, when you leave a job, you typically lose that life insurance offered through your workplace. And, given that life insurance through the workplace usually equals one or two times you salary (or a set amount like $50,000), it’s no longer going to cut it if you have a growing family.
If money’s tight, as it often is with a growing family, lingering student loans, and perhaps a mortgage, a term life insurance policy can protect you through the lean years. But don’t overlook the long-term benefits of a permanent life insurance policy. The cash value can be tapped later for needs that may arise. Plus, there’s nothing that says you can’t have a combination of both.
Also, consider an individual disability insurance policy that you personally own and follows you throughout your career. If you’re relying on work coverage, know that it goes away when you leave that job, and often these policies have bare-bones coverage.
IN YOUR 40s:
Workout: Do you have a financial professional helping you out? Navigating the ins and outs of a growing investment portfolio can be tricky as you move through your career and want to use traditional or Roth IRAs, and the tax benefits of various planning strategies. This may also be the time that you can add a permanent life insurance policy, if you haven’t before, which allows you to accrue cash value and obtain benefits that extend later into your life.
Diet: If you’re still carrying extra debt at this point, it’s time to get that paid down. Tackle higher-interest debts first, and celebrate each paid-off card or loan with … a bigger payment to the next one on the list.
IN YOUR 50s:
Workout: Max out your retirement contributions, especially once your kids are through college. This is also a good time to start researching things like long-term care insurance, and to make sure that your investment portfolio is built in such a way that you can reach your goals.
Diet: It may be very tempting to take on a new debt now: some folks want a vacation home, or the time may be right to start a business. But beware of any super-risky moves that can spell catastrophe with limited time to recoup losses, or that leave you with unexpected bills.
IN YOUR 60s and beyond:
Workout: Evaluate your Social Security situation against your retirement portfolio to determine the best time to retire. Understand the “living benefits” of your life insurance policies and how annuities may help you create a retirement income stream that you can’t outlive.
Diet: Is it time to downsize? It can be hard letting go of “stuff” so that you can go from that four-bedroom house to a two-bedroom condo. But the financial benefit of doing so may surprise you—plus there is less to clean and take care of (not to mention the ease of jetting off at a moment’s notice with no need for someone to look after your home.)
A lot depends on factors like your relationship status, your career path, whether you have kids or not, and what your long-term goals are, and these can change at any time in our lives.
The long and short of it is that just as when it comes to “health and fitness” goals, you’d get an annual physical. Need to know if you’re financially fit? Talk to an insurance professional or financial advisor today.
SOURCE: Mosher, H. (10 January 2019) "No Gym Required for These (Financial) Fitness Tips" (Web Blog Post). Retrieved from https://lifehappens.org/blog/no-gym-required-for-these-financial-fitness-tips/
The Occupational Phenomenon Called Employee Burnout
According to the World Health Organization, "burn-out is a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed". Unfortunately, workplaces are dismissing burn-out as an employee's issue rather than a workplace issue. Read this blog post to learn more.
Employee burnout is fast becoming prevalent in many workplaces and is also a recurring theme in my day-to-day conversations with people. Unfortunately, many workplaces dismiss the subject and make it more of the employee’s issue than a workplace issue.
“Burn-out is a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed. It is characterized by three dimensions: 1) feelings of energy depletion or exhaustion; 2) increased mental distance from one’s job, or feelings of negativism or cynicism related to one’s job; and 3) reduced professional efficacy.”
— World Health Organization
An organization’s culture and the work expectations in those organizations can foster employee burnout. Below are examples of situations that make employees prone to burnout:
- Digital Culture: A digital workplace, according to Deloitte, is one where many operational activities are performed over technology devices. These days, you can access your work emails, phone and video conferencing applications, instant messaging tools, and work documents through a single device. It is even more tempting to resist the notifications that continuously nudge you to respond to work-related matters. While I appreciate the digital workplace and understand that it is here to stay, it often implies that we need to be available around-the-clock, even during weekends. You have managers or coworkers sending work requests during early or late hours of the day, leading to a work-life imbalance for the employee. When work begins to encroach into an employee’s personal life, then they are at risk of burnout.
- Excessive Meetings: Collaboration is a skill required in many workplaces, and there’s no doubt that it is essential. However, some organizations tend to go overboard with their expectations from employees. Study shows that the average employee spends approximately six hours in meetings per week, while senior managers spend about 23 hours in meetings per week, and this increases by the size of the organization. Meetings, whether in-person or virtual, provide excellent opportunities for collaboration. When meetings become excessive and leave employees with little to no time to decompress, this can cause stress for employees and eventually lead to burnout.
- Dysfunctional Work Environments: In these work environments, employees face issues such as bullying, micromanagement, gossip, favoritism, or microaggression from coworkers or managers. A workplace that encourages such undermining behaviors can cause undue stress, which can eventually lead to burnout.
- Overworking Top Performers: It is quite easy for managers to overwork the best-performing employees. While the managers have the assurance of quality work, such employees become the victims of burnout because it seems like the reward for top performance is more work. Worse still, burnout is likely to occur when these employees do not receive fair compensation for the work they do.
What are the Signs of Employee Burnout?
The following are some signs of burnout in your employees:
- Reduced drive and work performance
- Increased absences from work
- Frequent tardiness
- Mental health conditions like anxiety and depression
- Poor concentration at work
- Increased sick days
- Visible frustration
- Lack of trust in the company and its leaders
If you or your colleagues are exhibiting any of these signs, you might be burned out.
Some Data
- A 2018 Gallup report states that “two-thirds of full-time workers experience burnout on the job.”
- A Harvard Business School article reports that “the estimated cost of workplace stress is anywhere from $125 to $190 billion a year.”
- An article by The World Economic Forum states that “the annual cost of burnout to the global economy has been estimated to be £255 billion.”
- Research by Stanford Graduate School of Business states that “workplace stress—such as long hours, job insecurity and lack of work-life balance—contributes to at least 120,000 deaths each year and accounts for up to $190 billion in health care costs.”
The data shows that employee burnout is now a workplace epidemic. To prove the seriousness of this issue, the World Health Organization (WHO) recently classified burnout as an “occupational phenomenon” in its latest revision of the International Classification of Diseases (ICD-11).
Ways to Reduce Employee Burnout
- Create and Maintain a Positive Work Environment: You can do this by being aware of your actions and how they impact those around you. Do not bully or micromanage your employees, or gossip about them to other employees you manage. When making decisions about your employees, be fair and consistent to avoid feelings of favoritism. Also, empower your employees to apply their skills by giving them autonomy. These help to increase satisfaction and create trust in the workplace.
- Set Realistic Goals: Plan projects ahead of time with your employees, set realistic deadlines or meetings, and be mindful of their personal commitments when assigning projects with tight deadlines.
- Show Support: Create communication channels for your employees to share their concerns or frustrations with you. Having an open-door policy or weekly check-in meetings where they can share their concerns with you can make your employees feel supported. Listen to them and help to address their issues.
- Show Appreciation: Recognize your employees for their contributions to your team. Recognition makes your employees, especially your top performers, feel like their work is impactful. When employees feel appreciated, they are more likely and willing to do great work.
- Promote Self-Care: Encourage your employees to practice self-care by permitting their requests for personal time off or vacation when they need it. You can also encourage them to fully unplug while they are out of the office by not sending urgent requests. Another way to promote self-care is to remove all expectations that employees need to be reachable around-the-clock. Also, do not encourage employees to stay long hours at work.
Originally published on Osasu Arigbe blog.
SOURCE: Arigbe, O. (13 June 2019) "The Occupational Phenomenon Called Employee Burnout" (Web Blog Post). Retrieved from https://blog.shrm.org/blog/the-occupational-phenomenon-called-employee-burnout
Are your job posts designed to recruit the best talent?
It's not what you say but how you say it when it comes to job postings. According to the U.S. Department of Labor, there are some 7.6 million unfilled jobs in the U.S. Poorly written job postings may be one of the reasons employers are having trouble filling open jobs. Read this blog post for more on job post design.
With job postings, it’s not what you say, but how you say it, which makes all the difference.
There are some 7.6 million unfilled jobs in the U.S., according to the U.S. Department of Labor, and poorly written job postings are the reason many employers are having trouble filling those open jobs, according to Katrina Kibben, CEO of Three Ears Media, a company that teaches recruiters how to become better writers.
“Most job postings are filled with clichés and B.S.,” Kibben said Thursday at the Greenhouse Open Conference, a gathering of HR professionals in New York City. “The most successful job postings have a heartbeat, and they spell out what’s expected from the candidate.”
Kibben said traditional job postings rely on the same tactics — all of which are ineffective. She said the majority of posts start out with “brand-first tone and jargon” in an attempt to attract talent. For example: “ABC seeks a collaborative, responsive, and dynamic non-profit development professional to lead the RCS community as our Chief Development Officer.” Kibben said this job description won’t engage potential applicants.
“It’s lame, and it doesn’t tell them why they should want to work for you,” Kibben said. “Some companies rely on brand recognizability, like Fortune 500 status, but that’s not enough to get the passionate candidates you want.”
Kibben provided a better example of an engaging job post: “Raising money isn’t everyone’s cup of tea. We’re looking for someone who’s ready to boil the water, sweeten the pot, and share the love of raising money with an enthusiastic team supporting an important cause.”
Bullet points were another typical job post feature Kibben recommended recruiters kill. While they make organizing information simple, Kibben said they don’t provide candidates with enough information about the job, and why they should apply.
“Your competitor likely has the exact same bullet points, so you need to find a way to tell candidates why you’re different from them,” Kibben said.
The way a job title is worded impacts how many applicants will see job postings online; employers who want the best visibility need to use search analytics to decide on a title, Kibben said. She recommended Google Trends because it shows searchers how often people in different regions searched for specific keywords. Sometimes, employers will find that the words they’re using are turning up searches for something entirely different.
“The phrase ‘customer service,’ for example, tends to bring up complaints, not job listings,” Kibben said. “You’ll want to adjust the wording so the candidates with the skills you want can find you.”
SOURCE: Webster, K. (17 June 2019) "Are your job posts designed to recruit the best talent?" (Web Blog Post). Retrieved from https://www.benefitnews.com/news/are-your-job-posts-hiring-the-best-employees