5 reasons to offer a student loan repayment benefit in 2019
Are you looking for ways to help add more value to your talent through your 2019 benefits packages? Continue reading to learn why you should offer student loan repayment as one of your employee benefits.
With human resources managers across the country working to finalize their 2019 benefits packages this month, many are asking themselves: How can we add more value for our talent and help the company grow? For many employers, the answer is helping employees manage their student loan debt.
Over the years, student loan debt has reached an astronomical sum. As of 2008, college tuition fees rose by 439% from 1982. And by the first quarter of 2018, 44 million Americans owed a total of $1.5 trillion in student loan debt, exceeding both credit card debt and auto loan debt, according to the Federal Reserve. Not only is this an extreme amount of debt, but has also taken an enormous emotional toll, with more than half of college-educated adults (54%) surveyed by Laurel Road in 2018 feeling that they will never make enough money to reach their financial goals.
Fast forward to today, and borrowers are seeking creative ways to tackle their debt and save more. Recently, in a private ruling, the IRS granted Abbott Laboratories, a national healthcare company, the option to contribute to employee 401(k) plans based on the employee’s student loan payments. Other companies — from corporate behemoths to busy startups — have partnered with student loan refinancing companies to offer employees refinancing options that can help them save, often at no cost to the company.
With Americans quitting their jobs at the fastest rate since 2001, keeping employees happy is imperative. And part of keeping millennials happy is to provide practical benefits, not just the fun perks. Employees are looking to foster meaningful relationships with their employers — so looping in student loan repayment benefits can pay off for both the employer and the employee.
So what’s to gain? Here are some of the top reasons employers should consider incorporating student loan repayment benefits into their 2019 benefits package.
1. Recruit, retain and stand out
2. It’s flexible and free
3. Eliminate the student loan vs. retirement conflict
4. Help employees save
One of the reasons why the student loan benefit is attractive for employees is the significant savings it can lead to. If refinancing is an option, employees have the potential to save thousands of dollars over the life of their loan through a lower loan interest rate and lower monthly payments.
In the long run, the cumulative savings can add up to several thousand dollars or more. Employers should keep in mind that the savings amount will change depending on the financing company you choose to work with. Many can offer employer customers exclusive rates, which leads to even greater savings.
5. Boost morale and productivity
According to another benefits company, 31% of employees surveyed say their money concerns affect their work. Meanwhile, 74% of people feel stress daily about their student loan debt and spend time at work thinking about it, impacting their overall productivity in the workplace. So in addition to the hard savings employees are earning through these programs, they are also rewarded with the soft benefits of reduced stress and anxiety at work.
With student loan debt reaching record highs in recent years, employers have recognized that there’s a crucial need to provide employees with options to help them pay down their student loan debt. And when options like refinancing come at no cost to them, this benefit will likely become more popular. In the future, we can expect more employers to pave the way for student loan repayment programs. Will you be one of the trailblazers?
Unleash voluntary benefits to attract millennials
Does your company know how to recruit the younger generations? Employers can use voluntary benefits to help attract millennials. Continue reading to learn more.
A war for talent is being waged. Boomers are retiring and seeking new challenges and now is the time to woo the millennials. Just how do you attract the right millennials for your company? Like most organizations, you probably offer a total rewards package that includes competitive compensation and core benefits, like medical, dental, life, disability and a 401(k) plan.
See also: One sure-fire way to engage employees in voluntary benefits
What about those ancillary benefits you hear about in the marketplace? While a ping pong table in the break room may entice some, many millennials seek help for specific needs from their potential employer. Voluntary benefit products can be the missing puzzle piece in your total benefits package and can help younger candidates feel confident that your benefit plan is tailored to them.
Millennials want real choice, access and ease of use. In this Amazon Prime world we live in, it’s important that enrolling in benefits and paying for them are as easy as possible. Exceptional communications, smart enrollment options and ease of payment are key to success.
Here are some voluntary benefit options to consider:
Accident & hospital indemnity insurance programs
While critical illness insurance may not appeal to a millennial, certain worksite benefits are beneficial. These benefits help employees pay for unexpected out-of-pocket medical costs, as well as cover the financial gaps of traditional coverage like deductibles and coinsurance. Worksite benefits pay cash to the individual, allowing the participant the flexibility to use the funds however she or he sees fit — for rent, car payments, living expenses or out-of-pocket medical expenses. Accident Insurance generally pays a cash reimbursement based on an injury benefit schedule. So, if the employee has a bicycle or paddleboard accident and breaks a leg, cash payments will be made for the type of injury and treatment. A similar type of benefit is Hospital Indemnity Insurance that pays a lump sum for an initial hospital admission and then a per diem benefit. The best part is the cost of these benefits is relatively inexpensive — like paying for a few cappuccinos a month.
See also: 3 Ways to Reshape How You Communicate About Benefits with Millennials
Student loan refinancing programs
Millennials are feeling the brunt of their student loans. One in four millennials owe more than $30,000 in college debt and think that it will take more than 20 years to pay them off, according to an ORC International Survey. Student loan stress is making millennials feel less financially secure than their older work colleagues. This can have an adverse effect on any type of savings plans an employer offers such as a 401(k). More employers are considering programs that can help employees manage their student loan debt. There are typically three ways to look at these programs:
- Refinancing options: There are many lenders that work specifically with student debt and will refinance and consolidate existing student loans and may offer a special incentive if this is done through their employer. Keep in mind, if an employee has a federally-backed student loan, refinancing may not be the best solution.
- Debt management resources: Many lenders that provide refinancing options have educational tools and resources to assist employees in managing their debt.
- Employer contribution: Of course, this would not necessarily be a voluntary benefit-only program, but employers are looking into helping their employees pay their loans back through employer-sponsored match programs.
Employee purchase programs
Millennials’ student loans may prevent them from making certain necessary purchases. Employee Purchase Programs offered through employers can help workers pay for items they may need immediately, like a washer and dryer replacement over a period of time. Like other voluntary benefits, this one comes with the added convenience of payroll deduction and repayment, helping millennials feel more empowered to make these more expensive purchases and build their credit.
Auto & Homeowners Insurance and legal insurance
Group auto and homeowners’ insurance offered through an employer can provide discounts based on tenure and payroll deductions that are not available in the individual market. Group legal insurance may be attractive to millennials who need to create a will for the first time or buy a new house. Most services are covered and family members are also sometimes eligible to be part of the plan.
See also: 15 employee benefits on the rise
In a time when cost-saving initiatives may be pinching employer-sponsored health plans, voluntary benefits may help cover gaps left by high deductible plans and provide value to employees without adding cost to the bottom line. With diverse offers, easy enrollment, low premiums and payroll deductions, voluntary benefits are worth considering and should be an integral part of your attraction and retention program for millennials.
SOURCE: Marcia, P. (17 September 2018) "Unleash voluntary benefits to attract millennials" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/unleash-voluntary-benefits-to-attract-millennials
5 ways benefits educators can ease the open enrollment process
Are you prepared for open enrollment? HR professionals are responsible for effectively communicating plan options and changes to employees so they make informed decisions regarding their coverage and healthcare. Continue reading to learn more.
Open enrollment season is on its way, which means that HR’s already full plate just got a bit fuller. In addition to developing competitive health plans that attract and retain top talent – talent of all ages and with varying needs – HR pros are also responsible for effectively communicating plan options to employees to ensure that individuals make informed, cost-conscious decisions about their coverage and care.
See also: Here’s how HR pros can breeze through open enrollment
As the healthcare landscape becomes more complex, so do employee questions around their health care benefits. Many healthcare consumers today don’t feel comfortable navigating the health care system – which is why most roll over the same plan year after year. While HR teams want to manage the influx of employee questions around their benefits options, they struggle to provide the necessary guidance given their current bandwidth. Covering health plans in a large townhall meeting won’t provide the personalized information that employees need to make educated decisions. To deliver a more personal, empowering experience, organizations can look to benefits educators to supplement strapped HR teams.
Benefits educators can help individuals better understand the plan options available to them and select the package that offers the coverage they need at the price that best fits their budget. To ensure that benefits educators are aligned with the organization’s strategy, HR teams should arrange for educators well in advance of open enrollment so they are equipped to best explain the employer’s benefits plan options. Once up to speed, benefits educators can hold one-on-one conversations with employees to:
1. Define healthcare terms that employees don’t understand. With low healthcare literacy rampant across the U.S., disturbingly few employees are comfortable defining basic health terms such as “deductible,” “copay” or “coinsurance.” benefits educators cannot only explain these important terms but also help employees understand their significance in their coverage selection process.
2. Compare different plans to suit each employee’s needs. Benefits educators will work to understand the specific needs of each employee they meet. By taking the time to sit and get to know each employee, the benefits educator can recommend options that provide the coverage that best meets the needs of the employee and his or her family.
See also: Avoid these 12 Common Open Enrollment Mistakes
Third-party, independent benefits educators can be particularly valuable for employees who do not feel comfortable posing personal questions to their coworkers. By meeting one-on-one with an outsider who understands both benefits in general and company options in particular, employees are often more inclined to raise specific health or personal details that should guide their benefits selection. In fact, 45 percent of employees say they would prefer to speak to a benefits expert when choosing their coverage.
3. Equip employees with the information they need to choose their coverage. Left to their own devices, 83 percent of employees spend less than an hour reviewing their plan options before open enrollment – a lack of preparation that does not bode well for educated benefits selection. benefits educators can focus on the details that matter – saving the employee time and effort.
4. Explain voluntary benefits. Despite the increasing popularity of voluntary benefits, many employees are still confused about what they are, how they work and why they might be helpful. In reality, certain voluntary benefits can help control health costs and bridge the gap between medical coverage and out-of-pocket costs – added expenses that concern 61 percent of employees. In today’s multigenerational workforce – where employees have very different priorities when it comes to their health and financial wellness – benefits educators can dispel some of the mystery and suggest options that might meet individual needs.
5. Empower employees to make the most of their benefits year-round. Benefits educators can lay the groundwork for more educated health care consumers by directing employees to resources where they can find more information about their coverage and how their plans work after the open enrollment ends.
See also: 5 tips to make this the best open enrollment ever
More informed employees not only make smarter choices about their coverage and care but also better appreciate their employers – which has the potential to help with retention and business productivity. Ultimately, organizations see a win-win-win: happier employees who save on care, happier HR teams who save on time and happier executives, who see a significant return on their health care investments.
SOURCE: Murdock, G (21 September 2018) "5 ways benefits educators can ease the open enrollment process" (Web Blog Post). Retrieved from https://www.benefitspro.com/2018/09/21/5-ways-benefits-educators-can-ease-the-open-enroll/
The approaching ACA premium tax moratorium – take 2
In 2010, Congress scheduled the 2014 Affordable Care Act premium tax. Then in 2015 Congress introduced a one-year moratorium on the premium tax that would take place in 2017. This past January, Congress placed another moratorium for the ACA premium tax in 2019. Continue reading to learn more.
In 2010, Congress scheduled the 2014 introduction of the Affordable Care Act premium tax (aka the health insurer fee). Then, via the PACE Act of October 2015, Congress placed a one-year moratorium on this 4% or so premium tax for calendar year 2017. You might recall our ensuing discussion a couple of years ago about how employers sponsoring fully insured medical, dental and/or vision plans could leverage this 2017 moratorium to their advantage.
See also: ACA: 4 things employers should focus on this fall
Meanwhile, did you notice back in January that Congress placed another moratorium on this tax, this time for 2019? To review:
- 2014-2016 – Tax applies
- 2017 – Under moratorium
- 2018 – Tax applies
- 2019 – Under moratorium
- 2020 – Tax scheduled to return
Fortunately, in moratorium years, fully insured medical, dental and vision premiums should be about 4% lower than they would have been otherwise, with these savings passed along proportionately by most employers to their plan participants.
Unfortunately, the budgetary challenge of this on-again-off-again Congressional approach is that when the tax returns, fully insured renewals naturally go up about 4% more than they would have otherwise. For example, an 8% premium increase becomes 12%.
See also: Proposals for Insurance Options That Don’t Comply with ACA Rules: Trade-offs In Cost and Regulation
Another complication occurs as employers annually compare the expected and maximum costs of self-funding their plans versus fully insuring the plans. Because this tax generally does not apply to self-funded plans, in “tax applies” years, any expected savings from self-funding will show about 4% higher than in moratorium years. This math especially complicates the financial comparison of level funding contracts to fully insured contracts (almost all level funding products are self-funded contracts).
With the Jan. 1 fully insured medical, dental and vision renewals beginning to cross our desks, what should employers do?
First, they should review the renewal’s rating methodology page and ensure that this tax was not included in the proposed 2019 premiums. If the rating methodology page was not provided, request it. If this request fails, ask for written confirmation that this tax is not included in your plan’s 2019 premiums.
Second, when comparing 2019 expected and maximum mature self-funded plan costs to 2019 fully insured premiums, extend the analysis to 2020 and project what will happen when this 4% fully insured tax tide returns.
See also: Pre-existing Conditions and Medical Underwriting in the Individual Insurance Market Prior to the ACA
Finally, complicating matters, several states, including Maryland, introduced new or higher state premium taxes for 2019. Ask your benefits consultant if these actions will impact your plans. For Maryland employers sponsoring fully insured plans, for example, the new additional one-year premium tax will essentially cancel out the 2019 ACA premium tax moratorium.
SOURCE: Pace, Z (27 September 2018) "The approaching ACA premium tax moratorium – take 2" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/the-approaching-obamacare-premium-tax-moratorium?brief=00000152-14a5-d1cc-a5fa-7cff48fe0001
Stop making 401(k) contributions. Fill up your HSA first
Open enrollment season is nearing, and soon, employees will be able to decide how much they want to contribute to their health savings accounts (HSA) next year. Read this blog post to learn why employees should contribute to their HSA before their 401(k).
With healthcare open enrollment season approaching, employees electing a high-deductible health plan will soon have an opportunity to decide how much to contribute to their health savings account for next year.
My advice?
Contribute as much as you possibly can. And prioritize your HSA contributions ahead of your 401(k) contributions. I believe that employees eligible to contribute to an HSA should max out their HSA contributions each year. Here’s why.
See also: What’s the best combination of spending/saving with an HSA?
HSAs are triple tax-free. HSA payroll contributions are made pre-tax. When balances are used to pay qualified healthcare expenses, the money comes out of HSA accounts tax-free. Earnings on HSA balances also accumulate tax-free. There are no other employee benefits that work this way.
HSA payroll contributions are truly tax-free. Unlike pre-tax 401(k) contributions, HSA contributions made from payroll deductions are truly pre-tax in that Medicare and Social Security taxes are not withheld. Both 401(k) pre-tax payroll contributions and HSA payroll contributions are made without deductions for state and federal taxes.
No use it or lose it. You may confuse HSAs with flexible spending accounts, where balances not used during a particular year are forfeited. With HSAs, unused balances carry over to the next year. And so on, forever. Well at least until you pass away. HSA balances are never forfeited due to lack of use.
Paying retiree healthcare expenses. Anyone fortunate enough to accumulate an HSA balance that is carried over into retirement may use it to pay for many routine and non-routine healthcare expenses.
See also: 3 things you should be telling employees about HSAs
HSA balances can be used to pay for Medicare premiums, long-term care insurance premiums, COBRA premiums, prescription drugs, dental expenses and, of course, any co-pays, deductibles or co-insurance amounts for you or your spouse. HSA accounts are a tax-efficient way of paying for healthcare expenses in retirement, especially if the alternative is taking a taxable 401(k) or IRA distribution.
No age 70 1/2 minimum distribution requirements. There are no requirements to take minimum distributions at age 70.5 from HSA accounts as there are on 401(k) and IRA accounts. Any unused balance at your death can be passed on to your spouse (make sure you have completed a beneficiary designation so the account avoids probate). After your death, your spouse can enjoy the same tax-free use of your account. (Non-spouse beneficiaries lose all tax-free benefits of HSAs).
Contribution limits. Maximum annual HSA contribution limits (employer plus employee) for 2019 are modest — $3,500 per individual and $7,000 for a family. An additional $1,000 in catch-up contributions is permitted for those age 55 and older. Legislation has been proposed to increase the amount of allowable contributions and make usage more flexible. Hopefully, it will pass.
HSAs and retirement planning. Most individuals will likely benefit from the following contribution strategy incorporating HSA and 401(k) accounts:
- Determine and make the maximum contributions to your HSA account via payroll deduction. The maximum annual contributions are outlined above.
- Calculate the percentage that allows you to receive the maximum company match in your 401(k) plan. Make sure you contribute at least that percentage each year. There is no better investment anyone can make than receiving free money. You may be surprised that I am prioritizing HSA contributions ahead of employee 401(k) contributions that generate a match. There are good reasons. Besides being triple tax-free and not being subject to age 70 1/2 required minimum distributions, these account balances will likely be used every year. Unfortunately, you may die before using any of your retirement savings. However, someone in your family is likely to have healthcare expenses each year.
- If the ability to contribute still exists, then calculate what it would take to max out your contributions to your 401(k) plan by making either the maximum percentage contribution or reaching the annual limit.
- Finally, if you are still able to contribute and are eligible, consider contributing to a Roth IRA. Roth IRAs have no age 70 1/2 minimum distribution requirements (unlike pre-tax IRAs and 401(k) accounts). In addition, account balances may be withdrawn tax-free if certain conditions are met.
The contributions outlined above do not have to be made sequentially. In fact, it would be easiest and best to make all contributions on a continuous, simultaneous, regular basis throughout the year. Calculate each contribution percentage separately and then determine what you can commit to for the year.
See also: Change to 2018 HSA Family Contribution Limit
Investing in HSA contributions is important. The keys to building an HSA balance that carries over into retirement include maxing out HSA contributions each year and investing unused contributions so account balances can grow. If your HSAs don’t offer investment funds, talk to your human resources department about adding them.
HSAs will continue to become a more important source of funds for retirees to pay healthcare expenses as the use of HDHPs becomes more prevalent. Make sure you maximize your use of these accounts every year.
SOURCE: Lawton, R. (19 September 2018) "Stop making 401(k) contributions. Fill up your HSA first" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/viewsstop-making-401k-contributions-fill-up-your-hsa-first
8 Benefits Of Measuring Employee Engagement
Are you measuring your company’s employee engagement? Measuring employee engagement helps companies attain real results and solve problems before they get worse. Read on to learn about the eight benefits of measuring employee engagement.
Employment engagement matters to achieving company success and developing employee skills and talents toward future goals. Happy employees equal a happy and prominent company. However, outdated traditional surveys used to measure engagement fail to reflect how modern employees operate and what they most desire and need to succeed.
Measuring employment engagement in real-time helps companies achieve real results, just as the importance of measuring finances and sales regularly do. Here are eight benefits of measuring employee engagement — much like taking your company's work culture temperature.
1. Solve Problems Before They Worsen
When you have a deadline, what can you do with issues that only now reveal their consequences? You have to deal with the issue quickly, and that often means putting a tourniquet on the problem and moving on. When you keep checking the temperature, you address issues — and their roots — before escalation occurs.
Problems only get big when you let them. Don't wonder why your employee retention and sales suddenly plummet.
2. Employ Empathy and Build Trust
Both employees and leaders need ongoing feedback to keep growing and improving. Make feedback a two-way process and communication that also stems naturally out of conversation and connection. Ongoing, open feedback allows leaders to pose better questions — especially those that relate to the company mission and vision.
When leaders ask good questions and connect, they build trust among employees and workflow improves as a result.
You may think your human resources department handles the human side of things, and that's that. However, thinking that way leaves your company out in the cold. It creates a negative communication gap between leader and employee, leading to #1 and risking you losing a talented individual.
Employ empathy and get the whole story when you see a struggling employee, whether their obstacle is personal or work-related. Everyone is human.
3. Make Morale #1
When employees disconnect, engage them in a meaningful conversation. It doesn't have to last the whole lunch hour — even a brief chat to check in will show you care. You’ll learn more about your employee's concerns, as well as their promise for the organization.
Make morale a top priority in your company, and you will reap the rewards. Productivity increases and you retain employees longer when their morale moves upward.
4. Share Insights Transparently
Back to those metrics. Use the analytics reports regarding workforce trends and finances to motivate your mission and, thus, your employees. Your employees need to be an active part of positive change-making. Employees feel more involved and valued when they know how and why they contribute to an organization and seeing the results drives them to push even harder.
5. Opportunity for Improvement
Surveys provide a snapshot of employee activity and thinking in a single moment in time as they struggle to think up thorough answers and complete the questionnaire to get back to work — or select variations of seven to nine on a 10-point scale to get it done. What does that measure exactly?
Snapshot surveys provide results that develop game plans months down the road. You can also measure social activities and interconnectivity at work to increase the ability to find meaning at work.
Encourage employees to keep track of their thoughts and feelings weekly and speak up. Better measurement tools — especially employee-preferred ones — increase opportunities for improvement and engagement.
6. Take Action When it Matters
Leaders can take action in small, cost-effective ways to engage their employees and improve morale, such as through conversation and opportunities to balance work and life.
Around 99 percent of meetings waste time, so take action as needed. Allow employees to think aloud in conferences and even be a little late, but start the session. When you have a strong work culture, employees and leaders collaborate and co-create to produce real-time, meaningful results.
7. Look for Trends
Technology allows employers to spot trends and take immediate action when used correctly. Does your website measure user experience for the customer? What about your employee's "user experience?"
When you identify trends, you can impact engagement in the day-to-day doldrums of routine. You make work meaningful and help the entire staff take responsibility for trends, as well as their engagements levels. Platforms like Slack allow employees to develop activity-based work styles that boost satisfaction scores, and engagement doesn't always equal productivity. So, deepen your definition of engagement.
8. Keep the Positive Flow Going
What chain reaction would you rather have — a negative one where issues worsen due to disengagement or a positive one where employees feel engaged and value their performance beyond getting a paycheck? Monitor your initiatives for employee engagement regularly, and keep what works going to maintain the positive flow.
Human resources don't begin and end in one department. Every department requires a human touch — your workers aren't drones or robots. They have real needs that, when met, can improve morale and lift up the company to success.
SOURCE: Craig, W. (18 September 2018) "8 Benefits Of Measuring Employee Engagement" (Web Blog Post). Retrieved from https://www.forbes.com/sites/williamcraig/2018/09/18/8-benefits-of-measuring-employee-engagement/#5b9bf20a7c55
5 critical conversations to have before retiring
According to the Society of Actuaries' Retirement Section and Committee on Post Retirement Needs and Risks, about 70 percent of Americans are on course to maintain their standard of living in retirement. Are your employees ready for retirement? Continue reading to learn more.
Reports of Americans’ lack of retirement preparedness roll on. Not all the news is grim, however. A recent study from the Society of Actuaries’ Retirement Section and Committee on Post Retirement Needs and Risks reports that roughly 70% of Americans are on course to maintain their pre-retirement standard of living.
What we know from those who report being comfortable in retirement is that they took the steps necessary to properly prepare.
It’s not just what employees and clients have earned and saved that contributes to their quality of life in retirement, it’s also how they approach their assets, expenses, and income. To this end, individuals must speak frankly with those in their lives — partner or spouse, employer, children — who are pivotal to key aspects of retirement living.
Here are the five critical conversations individuals should have well in advance of retirement:
With your spouse or partner
1. Are we on the same page about the lifestyle we expect to have in retirement?
Before you retire, you and your partner need to get on the same page about what this means in day-to-day terms. For example, did you know that your living expenses in retirement will likely be about 80% of your pre-retirement living expenses? This means that your monthly budget will change and it’s important to make the changes thoughtfully. Examine your priorities and assumptions together to avoid misunderstandings that lead to financial missteps.
Do yourselves a favor and take a gradual approach to downsizing your spending well before retirement. This will let you significantly cut your monthly expenses without feeling the shock of adjustment. Take a close look at your monthly expenses together and identify items you can do without. Then, start eliminating a few at a time.
2. Are there parts of our life we should “downsize” before we retire?
Downsizing your home can be a real savings opportunity in retirement. Relocating to a city with a lower cost of living can also cut your monthly expenses considerably. You can even downsize your car, or go car-free altogether. These are big changes, however, that you and your partner need to consider very carefully together. You’ll want to weigh the possible savings against other important but not necessarily financial factors, such as proximity to friends and family and access to good recreational and medical facilities. Take your time weighing the pros and cons. If you can agree on which tradeoffs you are both willing to make, the impact on your security and comfort in retirement can be huge.
3. Are we really ready to retire? If not, what do we need to do to get there?
Compare your “retirement number” to your anticipated monthly expenses. Identify discrepancies so you can make adjustments and plans as needed.
Do we need to delay retirement by a few years? Even one or two extra years of work, during your peak earning years, may have a significant effect on your quality of life in retirement. Consider this question carefully as you plan when to leave work.
What other sources of income will be available to us in retirement? There are many paths to a comfortable retirement and many different ways to patch together the right assets and investments to provide for your retirement. Even if your investment portfolio is not large enough to support your retirement needs, for example, you may find that you have other assets (a business, or real estate) that can contribute. Or one or both of you may choose to work part time — the “sharing economy” is a good place to start. Or, you may decide to sell off assets you no longer need.
With your employer
4. Should I transition to a freelance/consulting relationship?
Even if you’re looking forward to stepping away from your professional career, the smart move may be to maintain a freelance or consulting relationship with your current employer. Chances are, you have experience and skills that will continue to be valuable to your employer, even when you are no longer on staff full-time. A dependable source of extra income will help you cover unexpected expenses in retirement. Or, you can use the extra income to pay for more of the things you always dreamed of doing in retirement, like hobbies and travel.
Before you have the conversation with your boss, research what a fair fee rate is for someone at your experience level, in your industry. This will allow you to negotiate your future contract from a position of strength. Your track record as a reliable employee and the cost savings to your employer of no longer having you as full time staff should also boost the argument in your favor.
With your adult children
5. How will our lifestyle changes in retirement affect the rest of the family?
Changes in your lifestyle in retirement may affect your extended family in various ways. Setting realistic expectations up front may help ease any necessary adjustments.
For example, are your adult children accustomed to receiving financial assistance from you? Let them know that this may no longer be possible after you retire and have less disposable income.
Downsizing your house? If you have been the default host for family holiday celebrations, downsizing to a smaller home may require the family to rethink future holiday arrangements. Don’t wait until the holidays are upon you to spring the change on them: discussing it ahead of time will ensure that everyone’s best ideas are considered and good alternate plans made.
Planning to relocate, or travel frequently after you retire? You will likely no longer be available for babysitting or many other family activities. Giving your kids and grandkids plenty of notice will help them plan ahead.
These conversations may be awkward and possibly painful, but they need to take place. After saving for years, a clear eye will help with your post-work years.
SOURCE: Dearing, C (12 September 2018) "5 critical conversations to have before retiring" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/critical-conversations-to-have-before-retiring
Identity theft protection benefits and the business case for employers
Employees are turning to their employers for identity theft protection benefits with the rise in identity theft news. Continue reading to learn more.
With identity theft in the news constantly, many employees are turning to their employers to ask for an identity protection benefit.
Let us focus on productivity and wellness. Identity theft can wreak havoc on an employee’s personal and work life. According to SANS Institute, it takes an average of six months and up to 200 hours of personal time to resolve issues related to the theft. This includes hours calling banks, credit card companies, filing police reports, notifying the Social Security Administration, and alerting credit bureaus. Most of these calls and follow up activity must be made during business hours. According to ITRC’s latest study, 22% of respondents took time off of work when dealing with issues of identity theft.
Identity theft also impacts wellness and mental health. According to the ITRC study, 75% of respondents reported that they were severely distressed by the misuse of their information, and many sought professional help to manage their identity theft experience — either by going to a doctor for their physical symptoms or seeking mental health counseling.
These findings make it clear that identity theft directly impacts productivity and wellness. That is why comprehensive and compassionate restoration services should be a key element of any ID Protection plan offered by the employer.
Restoration services are the fixers in a comprehensive identity protection plan. For victims of identity theft, the restoration specialist will do the required work to restore the victim’s identity. Specialists make the calls during business hours, complete the necessary paperwork, and manage the process. They free up the employee to focus on their job, and alleviate the stress of dealing with the challenges of identity restoration.
There are a range of features to look for when evaluating restoration services across plans. Some plans only offer advice and information kits to guide members on what steps they need to take. Those services typically do not do the work for the member.
For plans that provide a full restoration process, consider if the plan provides victims with a dedicated restoration specialist as a single point of contact. Since the restoration process can take months or years, it’s best if a victim has a consistent person to speak with who knows the case and can provide periodic updates. Restoration services should be available 24/7 so victims can initiate the process immediately to lessen the damage. Plans should also provide multilingual specialists to best serve all members and handle all types of identity theft.
Although monitoring may alert individuals that are a victim of identity theft, the even greater value is in fixing the situation. Be sure to fully evaluate the restoration features of an identity protection plan as part of the selection process.
SOURCE: Hazan, J (31 August 2018) "Identity theft protection benefits and the business case for employers" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/identity-theft-protection-benefits-and-the-business-case-for-employers
The big difference between long-term care and long-term disability insurance
Do you know the difference between long-term care and long-term disability insurance? These two types of insurance may have similar names, but they are very different. Continue reading to learn more.
The longer people live, the more likely they are to face illnesses that necessitate custodial care either at home, in an assisted-living facility, or in a nursing home. So it stands to reason that there’s a resurgence of interest in long-term care and long-term disability insurance.
While the two types of coverage have similar names, they’re very different. As an employer, it’s important to understand the difference and educate employees on why they’d need each type of coverage. Here is a rundown.
Long-term care insurance
Long-term care insurance covers the cost of custodial care if a person is no longer able to perform at least two activities of daily living. These activities include eating, bathing, dressing, moving from a bed to a chair (called transferring), using a toilet or caring for incontinence.
Most people think LTC insurance is for older people who need to turn to a nursing home for care near the end of their lives — which is also part of the reason more employees are asking for LTC insurance. But LTC insurance can cover anyone who requires extended care.
LTC goes beyond medical care to include living assistance for a severe illness or disability for an extended period of time. Although older people use the most LTC services, a millennial or middle-aged employee who has been in an accident or suffered a debilitating illness might also need long-term care. In fact, 40% of people receiving long-term care services are 18-64 years old, according to America’s Health Insurance Plans. Actor Christopher Reeve was 42 when he was thrown from his horse and was paralyzed. He received long-term care services for nine years before his death.
Most people believe something like that will never happen to them, but it’s important to plan for the possibility. While Reeve had financial resources to cover his healthcare, that’s not typically the case for the average person. LTC can be very expensive, depending on the level of services needed and the length of time the individual needs it. One year in a nursing home can average more than $50,000. In some regions, it can cost twice that amount.
When offering LTC insurance, employees choose the amount of the benefit — typically an amount granted each month — and the length of time the benefit covers — such as two years, three years or 10 years. Obviously, as the benefit amount or length of time increases, so does the premium.
LTC insurance premiums are based on a person’s age, which means the earlier employees buy, the lower the premiums. If a person first buys the insurance at age 32, they lock in a better rate than if they purchase the insurance at age 54. Rates may increase only by a class action that is approved by state insurance regulators. Finally, LTC insurance is portable, which means employees take the policy with them if they move onto another job, or retire.
Long-term disability insurance
Long-term disability insurance may sound somewhat similar to LTC insurance, but the two are very different and important in their own right. Most workers don’t believe they’ll ever become disabled and need LTD insurance. Unfortunately, more than one in four 20-year-olds will become disabled before they reach retirement, according to the Social Security Administration.
LTD insurance is an income-replacement benefit that kicks in when the employee loses income for an extended period of time due to a disability. LTD insurance can be used for living expenses, not just covering care.
LTD insurance starts after short-term disability ends, typically after three to six months. In most cases, it pays 50-60% of an employee’s salary until they can return to work or, in some cases, until they retire. The more working years an employee has in front of them, the more they need LTD. Unlike long-term care insurance, LTD is typically not portable unless the policy contains conversion privileges. It ends when the employee changes employers.
If you offer both types of insurance, make sure your employees understand the difference. These types of insurance will help them in different ways — both important and more beneficial to have at a young age, but for varying reasons.
As an employer, you’re likely employing multiple generations of workers right now. Offering a range of benefits, including long-term disability and long-term care insurance, can help employees prepare for the unexpected now and in the future.
SOURCE: Granfors-Hunt, L (24 August 2018) "The big difference between long-term care and long-term disability insurance" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/how-long-term-care-long-term-disability-insurance-differ?brief=00000152-14a5-d1cc-a5fa-7cff48fe0001
Seeing beyond size in vision care networks
How do you measure the quality of your vision care network? When it comes to the world of vision care, size isn't the only factor to consider when deciding which network best fits the needs of your employees. Read on to learn more.
Most people believe that “size matters” in regards to provider networks, but in the world of vision care, there are other important factors to consider when deciding which network matches the needs of employees. Network members usually see their vision provider for routine services just once per year. When an employer changes vision administrators, employee in-network utilization is more than 90% regardless of the new network size. Why? Employees are not concerned about changing providers to access in-network benefits. Plus, the new vision provider network will always provide access to multiple providers wherever the employee lives and works.
But what about the quality of the vision care network? To properly assess this measurement of competing networks, employers and benefits advisors need to ask several different questions.
Determine the network’s quality
The quality of the network is vital. Start asking these questions: How are vision care providers credentialed? Do they follow the National Committee for Quality Assurance (NCQA) guidelines developed to improve healthcare quality? Are there provider audit programs provided on an ongoing basis? Is the vision care provider re-credentialed and how often? How frequently are reviews conducted of the Office of Inspector General and Medicare and Medicaid disbarment lists?
Establish the network’s effectiveness
Once you know you have a quality network, now you must ask how effective the network is. How diverse is the network? Are there ample ophthalmologists, optometrists and optical retailers we can access? Are some private practitioners? You want to make sure that a solid provider mix is available to give employees options when choosing a vision care provider.
It’s critical to know what languages are spoken within the employee population as well as the providers who care for them. If you have a large population who speak a certain language you want to make sure your network gives them access to people who can truly understand them and with whom they feel comfortable.
Finally, look at the hours of operations. With schedules being busier now than ever before, people need flexibility when it comes to visiting hours. Do they offer evening hours? Weekend hours? This is particularly important for single parents who work during the week and need the flexibility to visit an eye care professional with his or her child after work.
Having a diverse, quality vision care provider network with convenient access helps keep employees happy, healthy and in-network.
Other factors to consider
One of the other factors to be cognizant of is network ownership. Today, many managed vision care companies are involved in not only providing coverage for vision care but also in delivering it. This means the vision benefits company you’re considering may own optical laboratories, frame companies or retail locations, which can pose conflicts of interest between you, your employees and the managed vision care company. Their need to produce profits can lead to undo pressure on your employees to purchase expensive and potentially unnecessary lens types, materials and options. Coupled with direct to consumer advertising and the expansion of brands, eyeglasses have become even more expensive.
This leads to another factor for consideration. Does the potential vision benefit administrator provide meaningful information to help your employees make informed decisions about what they really need, when it comes to the myriad of options available for frames, lenses and lens options?
Network matching
Start by remembering two things when matching networks. First, if you’ve changed vision carriers in the past, you selected a network that was not identical to your previous one. Vision networks never match each other. Some have higher proportions of independent providers and lower percentages of large retailer chains. Second, the infrequency with which the vision benefit is available to be used mitigates the impact of changing providers. People don’t have the same attachment to their eye care professional as they do with their physician.
Beyond quality and effectiveness is the important factor of access. The vision industry has grown to a point where there are often many more providers than would ever be necessary to provide convenient access for your membership. The reality is that two networks may be equally sized in an area and yet there may be little overlap, making the selection of the best network with the lowest overall cost a better strategic direction than simply selecting the one with the highest provider match.
The vision industry has long demonstrated that employees are willing to select new providers, especially when costs are more competitive, and services are more convenient.
SOURCE: Moroff, C (22 August 2018) "Seeing beyond size in vision care networks" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/seeing-beyond-size-in-vision-care-networks?feed=00000152-a2fb-d118-ab57-b3ff6e310000