Financial Wellness Training Makes Good Cents
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by Chris Kilbourne
January is National Financial Wellness Month, which presents a good opportunity to start your training year off with a "soft" yet important wellness session on finances. Why? Personal financial problems can be a huge distraction for your employees and could cause them to lose focus on the job and take unsafe actions. Today's Advisor gives you solid information for training on financial wellness.
Celebrating a new year is a good time for employees to take a new look at their finances. Encourage employees this year to approach their financial health with the same wellness attitude they bring to their physical health.
For example, start your training sessions by giving employees this holistic list of what financial wellness looks like:
- Living within your means
- Managing debt successfully
- Saving for the future
- Investing wisely
- Having a cushion in case of emergencies
- Avoiding financial problems
Based on this list, ask employees if their finances are in good shape. Explain to them that just as physical wellness combines healthful eating with regular exercise, financial wellness combines asset acquisition with debt management.
Asset examples include:
- Cash and bank accounts
- 401(k) and IRAs
- Investments
- Personal property, including homes, cars, boats, and jewelry
Debt examples include:
- Mortgage
- Credit card debt
- Car loans
- Other loans
- Outstanding bills
Reiterate that just as employees take several steps to achieve physical wellness, they need to take several actions to achieve financial wellness. One action is to take stock of their financial wellness action plan. Give them the Finance Checkup in the next section.
Finance Checkup
Ask employees if they are taking all the right steps to get into good financial shape. Give them this checklist to do their own personal financial checkup. Do they:
- Have a budget for monthly spending?
- Stick to your budget?
- Take steps to control spending if you’re overextended?
- Save every year?
- Take full advantage of your 401(k)?
- Understand investment options?
- Invest wisely, considering the risks?
- Know what kind of investor you are—conservative, moderate, or aggressive?
- Choose credit cards wisely, and use them carefully?
- Pay credit card and other bills on time?
- Pay off as much of credit card balances as you can each month?
- Know your credit score?
- Know how to improve your credit score?
- Check your credit report annually?
- Think carefully before you take out loans?
- Read the fine print on loan contracts, and understand interest charges?
- Take prompt action when you experience financial problems?
- Consult a reputable financial counselor if you need help?
- Handle major life events successfully from a financial point of view?
Why It Matters
- According to a CareerBuilder® survey, around three-quarters of working Americans live from paycheck to paycheck.
- Another study from the American Psychological Association showed that financial problems are the number one cause of chronic stress and lead to as much as 25% of American employees missing work because of stress-related issues.
- These workers can miss up to 16 days a year.
Gadgets Stir Security Worries for HR
While advances in technology can spawn increased productivity and lower costs for a company, security concerns about the use of mobile devices and social media remain a hot-button issue for employers and HR professionals.
A recent poll by My Sammy and Holos Research found that security concerns rank as the top reason that employers block employee access to social media sites in the office, according to a report by Human Resource Executive Online. Of the respondents whose companies blocked access, 77 percent cited security as the primary reason, followed by productivity concerns at 67 percent.
Facebook and Twitter aren't the only tech trends that keep HR leaders up at night. The hardware that employees use to access these and other Internet sites can open the door to serious security breaches, as well, a report by the Society of Human Resource Management (SHRM) noted.
As the sophistication of mobile devices has advanced in the last few years, so have malware, viruses and other threats that specifically target these devices. "The bad guys are getting better at making their apps look legitimate," Bob Hansmann, senior product marketing manager for Websense Security Labs, said in the SHRM report.
Bad apps can steal passwords and credit card numbers and can track website visits and text messages, said Robert Siciliano of antivirus software firm McAfee.
The problem is compounded when employees use their personal tablets and phones for work purposes.
Employers need to keep their policies and technologies sharp to avoid these security threats, experts say. For instance, employers can limit the amount and types of information that employees can access on these devices, Hansmann suggests.
Siciliano recommends that employees be educated about the risks and be encouraged to be vigilant when shopping for mobile apps -- whether they be for personal or professional use. The company, however, should always take the lead when enforcing security policies, he said.
"Lock, locate and wipe is fundamental to any bring-your-own-device policy," Siciliano said in the SHRM report. "Not having some control over that device . . . is irresponsible today."
Prevention Success Starts with Education
It's a common-sense notion that if you want to keep your employees from racking up huge costs on your company's health care bill, you should help them prevent or treat the illness before it becomes a chronic and costly problem.
Many employees, however, still seem to be stuck in the dark when it comes to the true costs and benefits of preventive services.
For example, employees in high-deductible health plans (HDHPs) have a history of failing to take advantage of preventive care services, and a new study reveals why: Many workers think their deductible applies to all doctor visits, including preventive appointments.
The study by Kaiser Permanente and reported by Kaiser Health News, that fewer than one in five polled California employees enrolled in HDHPs understood that preventive services were either fully covered or mostly covered under their plans.
"Patients usually have a pretty limited understanding of the details of their health insurance plan," Mary Reed of Kaiser Permanente told KHN. "Even when plans are designed well or thoughtfully, if patients don't understand they probably won't behave accordingly."
For employers and employees, a lack of preventive care can turn into higher costs in the long term, but employers have a short-term incentive to push preventive services, a new study reported by the Society of Human Resource Management (SHRM) suggests.
The report notes that solid health promotion efforts that prevent health risks can result in a drop in health costs in the first year of implementation. While employers can't reduce the presence of high-cost cases entirely, "an ongoing focus on prevention can benefit the entire population by avoiding chronic disease altogether," which can lead to an average savings of $100 in costs per employee per eliminated health risk during the first year, the study's authors told SHRM.
Luckily for employers, workers are eager to become better health consumers and take charge of their own health, according to a survey by Wolters Kluwer Health, as reported in Becker's Hospital Review. The survey found that 80 percent of respondents said the idea of employees taking more responsibility for their own health is a positive trend, and 76 percent said they already possess the right tools to become skilled health consumers.
IRS Offers Some Help with 'Pay or Play' Proposal
The IRS kicked off 2013 with a little relief for some employers under the Patient Protection and Affordable Care Act (PPACA).
The proposed guidance, released Dec. 28, 2012, eases some of the penalties for larger employers who fail to provide adequate health care coverage for all their full-time employees. The PPACA "pay or play" penalty -- $2,000 per full-time employee for employers with at least 50 workers as of Jan. 1, 2014 -- will not apply as long as the employer covers at least 95 percent of their full-time employees and their dependents up to age 26, according to Littler Mendelson PC.
The proposed guidance clears up questions that have lingered since the inception of the law in 2010, according to a report in Business Insurance. As it was originally written, any employee with a large employer who opted to receive a premium subsidy under the PPACA-created health care exchanges instead of taking the employer-sponsored coverage might trigger the penalty for the employer. The 95 percent rule would give employers a little wiggle room in case a handful of employees decided to take the subsidy.
These proposed rules also would provide flexibility in the event that part-time employees who take the premium subsidy occasionally accrue hours that temporarily push them into full-time status, according to the Business Insurance report.
In addition to the 95 percent rule, the IRS handed out a few other surprises for employers, according to the law firm of Kilpatrick Townsend & Stockton LLP. For instance, the guidance would:
- Require coverage of full-time employees and dependents under age 26, but not of spouses.
- Aggregate employers in a controlled group (common ownership) to determine if an employer is subject to the penalty. However, if an employer is subject to the penalty, the calculation of the fine is applied to each employer separately in a controlled group -- meaning "one member's failure will not affect the other members of the group."
While the "pay or play" penalty doesn't go into effect until next year, employers need to start tracking their employees' status now, advises Kevin R. McMurdy, an attorney with Fox Rothschild.
"The release of this information continues to underline the importance of counting employees and measuring their hours to see if they are full- or part-time under the definitions provided in PPACA," McMurdy wrote in Employee Benefit News. "Employers should start counting now and avoid any last-minute confusion over their status or their obligations. As more guidance is issued, we can fine-tune these measurements, but don't get caught short at year-end having failed to manage your population."
The IRS currently is taking public comments on the rules through March 18 and plans to conduct a hearing in April to further explore these proposals.
Not Too Early To Plan For Health Taxes, H&R Block Says
By Jay Hancock
Source: https://capsules.kaiserhealthnews.org
Even if you owe Affordable Care Act taxes, you probably won’t have to start paying them until next year. But H&R Block wants you to come in and talk about them now.
“The Affordable Care Act means big changes this year when you file your taxes,” a chipper Block employee says in a new television ad. She says the company offers a free “tax and health care review.”
Actually, most health act taxes kick in this year and in 2014, so the earliest you’d have to file them is a year from now. (Tanning parlors starting paying their health-act taxes in 2010, but they’re probably not filing through H&R Block.)
But Block says it’s not too early to get advice on potential health act tax liabilities and eligibility for health coverage.
“When we talked to consumers it was very apparent that they are very confused about what’s going on,” says Meg Sutton, senior adviser for tax and health-care services at Block. “It’s critical that consumers get out and educate themselves about the Affordable Care Act and how it can affect them and their families.”
For example, those without health insurance may want to know what their penalty would be if they don’t sign up for coverage by the 2014 deadline, she said in an interview. And if you want to get coverage for next year, the exchanges will use the household size and income on your 2012 tax return to determine your eligibility for subsidies, some of which will be delivered as an income tax credit.
Many health-act taxes will be paid by high-income households, which probably don’t use H&R Block either. Starting this year couples with more than $250,000 in income will pay a payroll surtax for Medicare and a 3.8 percent tax on investment income.
But non-high-rollers could also be paying taxes to finance the health act. Starting in 2014, most individuals who lack health insurance will owe a penalty to be collected by the Internal Revenue Service. The penalty, which the Supreme Court ruled is a tax, starts at $95 and rises to $695 in 2016.
Households may also owe extra tax thanks to an increase in the floor for deducting health costs. Starting this year most folks can deduct only medical expenses that exceed 10 percent of their income; it used to be 7.5 percent. The health act also caps at $2,500 how much you can contribute to a pre-tax flexible spending account for health care. (Health savings accounts, a type of pretax account without the “use it or lose it” provision in FSAs, have different rules.)
Saxon University Session 1-2013
SAXON UNIVERSITY Session 1-2013
cordially invites you to attend Session 1 of the 2013 year
"Health Reform Updates" "2013 - what does this New Year have in store for us? What changes should we anticipate?"
Thursday January 24th Lunch at 11:30 am
Location: EXECUTIVE CENTER 25 Merchant Street - 1st Floor Cincinnati, OH 45246
Please RSVP to Sandy Burchwell @ 513-774-5482 or sburchwell@saxonconsultants.com by Friday, January 18th Thank you!
8825 Chapelsquare Ln Ste A
Cincinnati, Ohio 45249-4702
Who Knew? Patients’ Share Of Health Spending Is Shrinking
Source: https://www.kaiserhealthnews.org
By Jay Hancock
KHN Staff Writer
Consumer-driven medical spending may be the second-biggest story in health care, after the Affordable Care Act. As employers give workers more "skin in the game" through higher costs from purse and paycheck, the thinking goes, they'll seek more efficient treatment and hold down overall spending.
But consumers may not have as much skin in the game as experts thought, new government figures show.
Despite rapid growth in high-deductible health plans and rising employee contributions for insurance premiums, consumers' share of national health spending continued to fall in 2011, slipping to its lowest level in decades.
"I'm surprised," says Jonathan Gruber, a health economist at the Massachusetts Institute of Technology. "All the news is about the move to high-deductible health plans. Based on that logic … I would have expected it to go up."
True, medical costs are still pressuring families. Household health expense has outpaced sluggish income growth in recent years, says Micah Hartman, a statistician with the Department of Health and Human Services, which calculates the spending data.
But from a wider perspective, consumer health costs continued a trend of at least a quarter-century of taking up smaller and smaller parts of the health-spending pie. Household expense did go up. But other medical spending rose faster, especially for the government Medicare and Medicaid programs.
Economists measure three kinds of consumer health costs: insurance premiums paid through payroll deductions or for individual policies; out-of-pocket costs for deductibles and co-pays; and Medicare payroll taxes. Such outlays fell to 27.7 percent of the health care economy in 2011, down from 28 percent in 2010 and from 32 percent in 2000, according to the national health expenditures report issued by HHS last week.
That's in spite of the fact that one worker in three is covered by a plan with a deductible of at least $1,000, up from one in 10 in 2006, according to the Kaiser Family Foundation. (KHN is an editorially independent program of KFF.) Among small firms, half the workers are now in high-deductible plans.
One factor holding down costs even for families with consumer plans has been patent expirations for expensive, commonly used medicines such as Prevacid and Flomax.
"People these days are spending a lot less out-of-pocket on prescription drugs," said Peter Cunningham, director of quantitative research at the Center for Studying Health System Change. "A lot of that has to do with the shift from brand name to generics."
Nobody thinks consumer-driven medicine has run its course. Insurers and employers are still building tools for patients to shop for care by comparing costs for MRI scans, for example, or researching hospital quality records.
High-deductible plans are expected to win a large share of the business sold next year through the health law's state insurance exchanges. Many companies say they intend to offer high-deductible insurance -- especially plans with tax-favored health savings accounts -- as the only option.
"I've heard of nothing but acceleration" of employers into consumer-directed health insurance, said Roy Ramthun, a benefits consultant who was a senior health policy advisor in President George W. Bush’s administration. "More local units of government, school districts and even some union plans are starting to move more aggressively into these areas."
High deductible plans are already getting credit for helping with an overall slowdown in medical spending growth. Among other factors, economists suspect that the prospect of higher wallet costs has made consumers even more likely than usual to avoid doctor visits in the middle of a sluggish economy. (Public health officials fear this will backfire with a later spike in illness.)
Sooner or later, households’ share of the medical-cost pie will start to get bigger, analysts say. The declines have been getting smaller, suggesting the trend will reverse.
One reason is continued growth of high-deductible plans. Another is that, starting in 2014, the health act requires individuals to start buying coverage or pay a penalty. Another is that federal health spending has risen more than three times as fast as consumer health spending since 2007, which can’t continue.
Even with recent tax increases on high-income households, the huge Medicare program for seniors and the disabled is growing at an unsustainable pace, says Joseph Antos, a health economist at the pro-markets American Enterprise Institute. That means Medicare, too, will need to seek higher premiums, deductibles or co-pays from the patient’s pocket, he said.
"Medicare is on a fiscal slide," he said. "Things are going to have to happen. Eventually, whether you call it premium support or not, we’re going to have to move to some kind of budgeted system in Medicare."
Fighting Off the Flu at the Office
Source: businessweek.com
By: Claire Suddath
A lot of people have the flu right now. According to the Centers for Disease Control & Prevention (CDC), 29 states are currently experiencing high levels of influenza infection, mostly in the eastern half of the country. More than 2,250 people had been hospitalized as of Dec. 29, the most recent date for which the CDC has data. Boston mayor Thomas Menino, amid a sickness rate that’s 10 times higher than last year’s, has officially declared a public health emergency.
Chances are there’s a flu-carrying sniffler somewhere in your general vicinity right now: in the elevator, across the boardroom table, or—if you take public transportation to work every day—gripping the same subway railings as you with their snotty hands. How can healthy workers successfully stay healthy in during this unusually treacherous flu season?
The easiest way to avoid catching the flu is, of course, with a flu shot. (Do you really need me to tell you this?) There are three types of the virus—Influenza A, B, and C, which mutate independently of one another—and a new vaccine is created every year to guard against that season’s most virulent strands. Health officials recommend that people get vaccinated in the fall so they’re protected all winter, but if the severity of this year’s flu worries you, the FDA says not to fear: There’s still time to get a flu vaccine. Because the flu is constantly changing, the expected success rate of the vaccine is 60 percent to 70 percent any given year.
If you already have the vaccine or for some reason (health problems, procrastination, fear of needles) neglect to get it, there’s little else you can do except wash your hands regularly and hope for the best. The CDC recommends avoiding close contact with people, so if you work in an office, embrace your social anxiety issues and shut the door.
Unfortunately, people who work in so-called open floor plans are out of luck. Not to mention the flight attendants, teachers, retailers, and other professionals who’re forced to interact with the public every day. “It’s so hard to take a day off, what with the substitute plans and playing catch-up when you’re back that most teachers just power through it and come to work feeling terrible,” says Jennifer Orr, a first-grade teacher in Virginia. Orr’s been teaching for 15 years and says there’s no way to avoid catching her students’ colds, especially during flu season. “I carry a hand sanitizer in my pocket at all times just in case I get sneezed on,” she says. “That’s about all I can do.”
What do cars and retirement plans have in common?
I think it’s a safe bet to say we’ve all paid a lot more attention to retirement plan fees in the wake of the new Department of Labor disclosure requirements. This is true for 401(k)/403(b) plans and beyond. Fortunately (or unfortunately) we can’t avoid the topic!
It’s likely no one pays more attention than the plan fiduciary. After all it’s their job to work with the service provider and financial professional to make sure the fees paid by the plan are “reasonable.” But what exactly does “reasonable” mean?
While vague terms like this can seem to add to a plan fiduciary’s challenge, it’s actually pretty simple to understand. “Reasonable” doesn’t mean as low as possible. “Reasonable” means fees should be based on the services received in return.
To help gauge this, consider the services needed to help meet plan goals and objectives. Services for 401(k)/403(b) plans range from simple to highly complex. Simple, or low touch service from a service provider, should generally correlate with lower fees. More complex arrangements probably come with higher fees. But fees are just one part of the equation, and low cost isn’t always the best choice.
So … what does all this have to do with cars?
Start by thinking about what services may be appropriate to receive for a given fee. For comparison purposes, it’s actually a lot like buying a new car. Are you content with an economy model knowing it has the basic functions? Or, is it important to you to have all the conveniences available on the market and you’ll pay a premium to get them?
The financial professional can help determine which model best meets the needs of the plan, the plan sponsor and their participants:
1. The economy (low touch)
You’ve got everything you need to keep an annuity or mutual fund account running, but few bells and whistles. Typically includes:
- Processing plan contributions, transfers and distributions
- Generating automated reporting to the plan sponsor, including Form 5500 preparation
- Meeting with the plan sponsor to conduct a periodic review, and providing additional phone support to answer administrative questions
- Providing cookie cutter participant communications aimed toward saving and distribution, with additional support often offered through an 800 number
2. The mid-sized sedan (moderate touch)
A step up from the economy, your mid-sized sedan offers some conveniences generally for a little bit more money.
Typically includes everything the economy does, plus:
- Additional personalized plan sponsor meetings and support tailored to the needs of the plan sponsor
- More extensive participant education resources, including help with planning (but no individualized approach)
- Phone support available to help with questions beyond administrative and processing
3. The luxury model (high touch)
This model comes with all the bells and whistles, generally at the highest price.
Typically includes everything listed above, plus:
- Detailed plan design consulting tailored to the needs of the plan sponsor and participants
- Detailed plan analysis, including plan utilization reports and progress reports to help ensure objectives are being met.
- Individualized participant support with a focus on becoming more “retirement ready”
- More extensive administrative support, including audit preparation
Making sense of it all
It’s important that the plan fiduciary and financial professional work together to determine which model best helps meet the plan needs, whether the model is functioning to their satisfaction (e.g., are the services being provided competently?), and if the fees are reasonable in light of the model and functionality.
The car model analogy provides a simple framework to help start that conversation.
In addition, this checklist can help serve as a guide for how to establish a documented monitoring process to fit the specific needs of a plan.
New $63 Fee Announced to Help Offset Healthcare Reform Cost
Source: openforum.com
Original article by Ricardo Alonzo-Zaldivar
As the regulations for Healthcare Reform are formulated and finalized, small-business owners need to be aware of a new fee that will be assessed beginning in 2014. The fee will be collected for 3 years and is set at $63 per insured person in the first year and is supposed to decline after that.
The fee is meant to help offset the cost for insurance companies as they comply with requirements to provide coverage for people with pre-existing conditions. The fee is expected to generate $25 billion most of which will be placed in a federally administered fund and the rest will be given directly to the Treasury Department. Employers will have to pay the fee in advance on behalf of their employees. Individuals who purchase their own policies and do not participate in group policies, as many small-businesses owners do, will still be responsible for the fee.
Learn more at The Huffington Post.