ACA replacement proposal leaked: Some of the finer points for HR
Does the repeal of the ACA have you worried? Checkout this great article about some of the changes that will come with the repeal of the ACA by Jared Bilski.
A draft of the Republicans’ Affordable Care Act (ACA) replacement bill that was leaked to the public is likely to look a lot different when it’s finalized. Still, it gives employers a good indication of how Republicans will start to deliver on their promises to “repeal and replace” Obamacare.
It should come as no surprise to employers that the GOP replacement bill, which was obtained by POLITICO, would scrap a cornerstone of the ACA — the individual mandate — as well as income-based subsidies and all of the laws current taxes (at least one replacement tax is included in the legislation).
According to the discussion draft of the replacement bill, it would offer tax credits for purchasing insurance; however, those credits would be based on age instead of income.
For example, a person under the age of 30 would receive a credit of $2,000. A person over the age of 60, on the other hand, would receive double that amount.
Some of the other highlights of the leaked legislation include:
End of ACA essential health benefits
Obamacare’s essential health benefits mandates require health plans to cover 10 categories of healthcare services, which include:
- Ambulatory patient services
- Emergency services
- Hospitalization
- Maternity and newborn care
- Mental health and substance use disorder services
- Prescription medications
- Rehabilitative and habilitative services and devices
- Lab services
- Preventive and wellness services and chronic disease management, and
- Pediatric services, including oral and vision care.
Under the bill, individual states would make the decisions about what types of services plans must cover — beginning in 2020.
A Medicaid expansion overhaul
The Medicaid expansion under Obamacare that has covered millions of people will be phased out by 2020 under the GOP bill. The replacement proposal: States would receive a set dollar amount for each person.
There would also be variations in the funding amounts based on an individual’s health status. In other words, more money would be allocated for disabled individuals, which is a huge departure from the open-ended entitlement of the current Medicaid program.
Pre-existing conditions, older individuals
One of the most popular elements of the ACA would apparently remain untouched under the GOP bill: the Obamacare provision that prohibits health plans from discriminating against people with pre-existing conditions.
However, the legislation does take aim at older individuals. The GOP would allow insurers to charge older people up to five times more for healthcare than younger individuals. The current ACA limits that difference to three times as much.
The bill does aim to remedy this discrepancy by providing bigger tax credits for older people.
Taxes get axed
There is a slew of taxes built into the ACA — the manufacturer tax, and taxes on medical devices, health plans and even tanning beds — and the Republican bill would repeal those taxes.
But those taxes help cover the cost of the ACA. So to make up for the shortfall that would result in killing those taxes, the GOP is floating the idea of changing the tax treatment of employer-based health insurance. As employers are well aware, employer-sponsored health plan premiums currently aren’t taxed. Under the GOP proposal, this would be changed for some premiums over a certain threshold — although the specifics of such a change remain murky.
Such a move would surely be met by fierce opposition from the business community. In fact, major employer groups are already preparing to fight such a proposition.
See the original article Here.
Source:
Bilski J. (2017 March 01). ACA replacement proposal leaked: some of the finer points for HR [Web blog post]. Retrieved from address https://www.hrmorning.com/aca-replacement-proposal-leaked-some-of-the-finer-points-for-hr/
How are your retirement health care savings stacking up?
Are you properly investing in your health saving account? Take a look at the this article from Benefits Pro about the importance of saving money for your healthcare by Reese Feuerman
For all ages, it's imperative to balance near-term and long-term savings goals, but the makeup of those savings goals has changed dramatically over the past 10 years.
With the continued rise in health care costs, and increased cost sharing between employers and employees, more employees and employers have been migrating to consumer-driven health care (CDH) to provide lower-cost alternatives.
With the increased adoption in these plans for employee cost savings purposes, employers have likewise realized similar cost savings to their bottom line. But what role does CDH play in the long term?
The Greatest Generation was able to rely on their pensions, Social Security, Medicaid, and the like as a means to support them in retirement for both medical and living expenses. However, as the Baby Boomers continue their journey towards retirement, reliance upon future proof retirement funds are fading into the sunset for coming generations. According to a 2015 study from the Government Accountability Office (GAO), 29% of American’s 55 and older do not have money set aside in a pension plan or alternative retirement plan.
To make matters worse, some experts are forecasting Social Security funding will be depleted by 2034, leaving even more retirees potentially without a plan. As such, Generation X and beyond must look for more creatives measures for savings to make up the difference.
In 1978, 401(k) plans were introduced to provide the workforce with a secondary means for retirement savings while also providing significant tax benefits. However, even when actively funded, with rising health care costs and a depleted Social Security system—the solution this workforce has paid into for their entire career—will not be enough.
According to Healthview Services, the average retiree couple will spend $288,000 for just health care expenses during retirement. This sum could easily consume one-third of total retiree savings. This is a contributing factor to the rise and rapid adoption of tax-advantage health accounts to supplement retirement savings. Introduced to the market in 2003, Health Savings Accounts (HSA) have provided employees with an option to set aside pre-tax funds to either cover current year health care expenses, like the familiar Flexible Spending Account (FSA), or carry over the funds year-over-year to pay for medical expenses later or during retirement. The pretax money employees are able to set aside in these accounts to cover health care expenses, will over time, be on par with retirement savings contributions, such as a 401(k) and 403(b), because of increasing costs and triple-tax savings.
It is important for consumers to understand these retirement options and how they could be leveraged for greater financial wealth. As a result, the Health Care Stack, an analysis authored by ConnectYourCare, acts as a life savings model and illustrates the amount of pretax money consumers can contribute for both their lifestyle and health expenses in retirement.
For illustrative purposes, according to current IRS guidelines, the average American under the age of 50 could set aside up to $24,750 each year pre-tax for retirement to cover their health care and living expenses. In this example, if a worker in his or her 30s starts to set aside the maximum contributions (based on IRS guidelines) for HSA contributions, assuming a rate of return of 3%, they would have $330,000 saved in their HSA to cover health care expenses once they reach the retirement age of 65. This number could be even greater if President Trump’s administration passes any number of proposed bills to increase the HSA contribution limits to match the maximum out-of-pocket expenses included in high deductible health plans. This allocation would not only cover average medical expenses, but also provide a triple-tax advantage for consumers from now through retirement.
In addition to the long-term retirement goals, the yearly pre-tax savings may be even greater if notional accounts are factored in, with approved IRS limits of a $2,600 per year maximum for Flexible Spending Accounts, $5,000 per year maximum for Dependent Care FSA, and $6,120 per year maximum for commuter plans. This equals $38,470 (or $44,820 if HSA contributions increase) of pre-tax contributions that consumers could save by offsetting the tax burden and could invest towards retirement.
For those consumers over the age of 50, the savings potential is even greater as they can contribute to a post retirement catch-up for their 401K plans equaling a total of $24,000, plus they may take advantage of the $6,750 HSA savings, as well as the additional $1,000 catch up. If certain proposed bills are passed, the increase could be $38,100 a year that they could set aside, in pre-tax assets, for retirement.
Not only will an individual’s expenses be covered, but there are other benefits brought forth by proper planning, including the potential to reach ones retirement savings goals early. Let’s say that after meeting with a licensed financial investor it was determined that an individual needed $1.8 million in order to retire, and according to national averages, close to $288,000 to cover health care costs.
Given the proper investment strategy around contributions to both retirement and HSA plans, an individual could - theoretically -save enough to meet their retirement investment needs by the age of 60 for both lifestyle and health care expense coverage, if they started making careful investments in their 20s (assuming the worker is making $50,000 per year with a 3% annual increase).
In comparison, under current proposals, which include the increased HSA limits, retirement savings could be achieved even earlier with the coverage threshold being at 57 for the average worker. This is a tremendous opportunity to transform retirement investment programs for all American workers who would otherwise be left on their own. Talk about the American dream!
While there is not a one-size fits all strategy, it is important for everyone to understand their options and see how these pretax accounts outlined in the Health Care Stack play an important consideration in ones future retirement planning.
Taking the time now to fully understand tax-favored benefit accounts will provide him or her with the appropriate coverage to enjoy life well into their golden years. Retirement is just around the corner, are you ready?
See the original article Here.
Source:
Feuerman (2017 March 02). How are your retirement health care savings stacking up?[Web blog post]. Retrieved from address https://www.benefitspro.com/2017/03/02/how-are-your-retirement-health-care-savings-stacki?ref=hp-in-depth
Employers embrace new strategies to cut healthcare costs
Are you looking for a new solution for cutting your healthcare cost? Take a look at the great article from Employee Benefits Advisor about what other employers are doing to cut their cost healthcare cost by Phil Albinus
As employers await a new health plan to replace the Affordable Care Act and consensus grows that high deductible health plans (HDHPs) are not the perfect vehicle for cutting healthcare costs, employers are incorporating innovative strategies to achieve greater savings.
Employers are offering HSAs, wellness incentives and price transparency tools at higher rates in an effort to cut the costs of their employee health plans. And when savings appear to plateau, they are implementing innovative reward plans to those who adopt these benefits, according to the 2017 Medical Plan Trends and Observation Report conducted by employee-engagement firm DirectPath and research firm CEB. They examined 975 employee benefit plans to analyze how they functioned in terms of plan design, cost savings measures and options for care.
The report found that 67% of firms offer HSAs while only 15% offer employee-funded Health Reimbursement Arrangements. As “use of high deductible plans seem to have (at least temporarily) plateaued under the current uncertainty around the future of the ACA, employer contributions to HSAs increased almost 10%,” according to the report.
Wellness programs continue to gain traction. Fifty-eight percent of 2017 plans offer some type of wellness incentive, which is up from 50% in 2016. When it comes to price transparency tools, 51% of employers offer them to help employees choose the best service, and 18% plan to add similar tools in the next three years. When these tools are used, price comparison requests saw an average employee savings of $173 per procedure and average employer savings of $409 per procedure, according to CEB research.
“What was interesting was the level of creativity within these incentives and surcharges. There were paycheck credits, gift cards, points that could be redeemed for rewards,” says Kim Buckey, vice president of client services at DirectPath. “One employer reduced the co-pays for office visits to $20 if you participated in the wellness program. We are seeing a level of creativity that we haven’t seen before.”
Surcharges on tobacco use has gone down while surcharges for non-employees such as spouses has risen. “While the percentage of organizations with spousal surcharges remained static (26% in 2017, as compared to 27% in 2016), average surcharge amounts increased dramatically to $152 per month, a more than 40% increase from 2016,” according to the report.
Tobacco surcharges going down “is reflective of employers putting incentives in, so they are taking a carrot approach instead of the stick,” says Buckey.
Telemedicine adoption appears to be mired in confusion among employees. More than 55% of employees with access to these programs were not aware of their availability, and almost 60% of employees who have telemedicine programs don’t feel they are easy to access, according to a separate CEB survey.
Employers seem to be introducing transparency and wellness programs because the savings from HDHPs appear to have plateaued, says Buckey. She also noted recent research that HSAs only deliver initial savings at the expense of the employee’s health.
“With high deductible plans and HSAs, there has been a lot of noise how they aren’t the silver bullet in controlling costs. Some researchers find that it has a three-year effect on costs because employees delay getting care and by the time they get it, it’s now an acute or chronic condition instead of something that could have been headed off early,” she says.
“And there is a tremendous lack of understanding on how these plans work for lower income employees, [it’s] hard to set aside money for those plans,” she says.
Educating employees to be smarter healthcare consumers is key. “What is becoming really obvious is that there is room to play in all these areas of cost shifting and high deductible plans and wellness but we can no longer put them in place and hope for the best,” she says. We have to focus on educating employees and their families,” she says. “If we are expecting them to act like consumers, we have to arm them with the tools. Most people don’t know where to start.”
She adds, “we know how to shop for a TV or car insurance but 99% of people don’t know where to start to figure out where to shop for prescription drugs or for the hospital where to have your knee surgery. Or if you get different prices from different hospitals, how do you even make the choice?”
When asked if the results of this year’s report surprised her – Buckey has worked on the past five – she said yes and no.
Given that the data is based on information from last summer for plans that would be in effect by 2017, she concedes that given the current political climate “a lot is up in the air.” Most employers were hesitant to make substantive changes to their plans due to the election, she says. We may see the same thing this year as changes are made to the ACA and the Cadillac Tax, she adds.
“What I was interested in were the incremental changes and some of the creativity being applied to longstanding issues of getting costs under control,” she says.
See the original article Here.
Source:
Albinus P. (2017 March 05). Employers embrace new strategies to cut healthcare costs [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/employers-embrace-new-strategies-to-cut-healthcare-costs?brief=00000152-1443-d1cc-a5fa-7cfba3c60000
Two-thirds of Americans aren’t putting money in their 401(k)
Did you know only about a third of Americans are putting money away into their retirement accounts? Check out this interesting article from Employee Benefits Advisors about some of the statics of Americans 401(k) savings by Ben Steverman.
(Bloomberg) – Americans aren’t saving enough for retirement.
True, this has been a refrain for longer than many can remember. But now some disturbing numbers show exactly how bad it’s gotten. Two-thirds of all Americans don’t contribute anything to a 401(k) or other retirement account available through their employer.
Millions aren’t saving on the job because they either don’t have access to a workplace retirement plan or they do but aren’t putting money in it. Many just can’t spare the cash, but a new analysis shows there are other reasons, too.
Until now, the exact size of the problem has been unclear. Surveys can be unreliable: Small businesses are difficult to assess, and many workers just don’t know what plan options they have, especially if employers aren’t making much effort to sign them up. Information on a 401(k) may be part of a stack of paper handed out on their first day, that they don’t read or understand, and ultimately set aside and never think about again.
Now, U.S. Census Bureau researchers have come up with estimates that rely on tax data, which should be more reliable than surveys. Their conclusion: Only about a third of workers are saving in a 401(k) or similar tax-deferred retirement plan. Also, the gap is far wider than expected between the number of employers offering retirement plans, and the number of workers saving in them.
Only 14% of employers offer plans
Census researchers Michael Gideon and Joshua Mitchell analyzed W-2 tax records from 2012 to identify 6.2 million unique employers and 155 million individual workers, who held 219 million distinct jobs. This data produced estimates starkly different from previous surveys.
For example, previous estimates suggested more than 40% of private-sector employers sponsored a retirement plan. Tax records uncovered a much bigger pool of small businesses, showing that, overall, just 14% of all employers offer a 401(k) or other defined contribution plan to their workers.
Bigger companies are the likeliest to offer 401(k) plans, and since they employ more people than small firms, skew the overall number of U.S. workers who have the option. Gideon and Mitchell estimate 79% of Americans work at places that sponsor a 401(k)-style plan. The good news is that’s more than 20 points higher than previous estimates. The bad news is that just 41% of workers at those employers are making contributions to such a plan—more than 20 points lower than previous estimates.
The combined result of those two numbers is that just 32% of American workers are saving anything in a workplace retirement account. Four out of five workers are employed by companies that offer a 401(k) or similar plan, but most workers aren’t using them—either because they’re not eligible or because they aren’t signing up.
Lawmakers have proposed a variety of ways to get more people to save. Several states are experimenting with strategies to get every worker signed up for a retirement account. But they face serious pushback from the Republican-controlled Congress and the financial industry.
The demise of the pension
Census researchers are still studying the tax data, cross-referencing it with other databases to get a fuller picture of how Americans are saving. For example, researchers are using retirement plan filing documents to get a better sense of how many workers are still covered by traditional pensions, also known as defined benefit plans. According to a Pew Charitable Trusts analysis of survey data released Feb. 15, only 10% of workers over age 22 have a traditional pension. Just 6% of millennials have a pension while 13% of baby boomers do.
Not surprisingly, the Census data suggest well-paid workers find it easier to save than the lowest-paid. But income isn’t the only factor. Eligibility is also a major issue for part-time workers and people who change jobs frequently. Companies often require employees to work for a certain amount of time before they can sign up for a 401(k), and employers aren’t required to allow part-time workers into a plan until they’ve worked 1,000 hours during the previous year.
Another problem made clear by the new report is that many workers simply don’t know their company 401(k) exists. Workers also might never get around to filling out the paperwork, or could be intimidated and confused by the need to make investment decisions. Companies can help solve all those problem by automatically signing up eligible workers, and requiring them to opt out if they don’t want to participate. Doing so has been proven to boost enrollment, but momentum has now stalled for automatic 401(k) features.
House moves to block auto-enrollment
California, Oregon, Illinois, Maryland, and Connecticut have started programs designed to encourage workers to save. Employers in those states would be required to either offer a retirement plan, or automatically enroll their workers in a state-sponsored individual retirement account. The states had the blessing of the Obama administration, which issued rules allowing states and even large cities to create portable retirement accounts if they want.
On Feb. 15, however, the U.S. House of Representatives voted to rescind those rules. Echoing the arguments of the financial industry, Republicans argued state auto-enrollment plans constitute unfair competition to the financial industry. If the Republican-controlled U.S. Senate and President Donald Trump also sign off, any state and city auto-IRA plans would be placed in jeopardy.
Whatever the outcome, any effort to get workers to save for retirement faces a daunting challenge: Can Americans spare the money? Student debt and auto loans are at record levels, according to Federal Reserve data released Feb. 16, and overall consumer debt is rising at the fastest pace in three years.
Retirement is an important goal, but many Americans seem to have more pressing financial concerns.
See the original article Here.
Source:
Steverman B. (2017 February 21). Two-thirds of americans aren't putting money in their 401(k) [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/two-thirds-of-americans-arent-putting-money-in-their-401-k?feed=00000152-1377-d1cc-a5fa-7fff0c920000
Employees desperately need more information on health plans, study says
Did you know that a lot of your employees may be unaware of the health care options your company offers? Take a peek at this great article from HR Morning on how to improve your employees knowledge of their healthcare options by Jared Bilski
As an increasing number of employees are being asked to make smarter healthcare spending decisions, communication is more important than ever. Unfortunately, it looks like many firms have a lot of room for improvement.
That’s one of the alarming takeaways from healthcare administrator Alegeus’ recent “State of Denial” study.
A number of the stats from the study point to a major employee healthcare problem that’s only getting worse. That problem: While employees’ health options are becoming increasingly complex, most workers don’t have the knowledge and/or accountability to make wise decisions involving those options.
Unaware and overwhelmed
Here are some of the most alarming stats from the study:
- 63% of employees said they don’t know the benefit of an HSA
- 50% don’t know how to predict current or future out-of-pocket healthcare expenditures and can’t select the best savings vehicle or rate
- 26% of HSA accountholders don’t know they can use HSA funds beyond the immediate plan year, and
- 41% of HSA accountholders were unaware they could invest HSA funds.
The study also highlighted some of the contradictions between what employees said they wanted or needed, and how they acted.
For example, although 70% of employees said they’d like to take a more active role in their healthcare decisions, just 50% intend to conduct more due diligence when purchasing healthcare in 2017.
The importance of one on one
One of the most effective ways to improve employees’ benefits understanding is through one-on-one communications.
To help ensure this is effective, here are three things HR pros should keep in mind, according to Winston Benefits, a voluntary benefits plan provider:
1. Prepare the right materials
When you’re doing a large-scale benefits presentation, you generally just hand out the materials, and employees look through and use those materials as they see fit.
But with individual sessions, benefits pros have to be prepared to explain those materials in any way an employee requests.
Example: Walking a worker through a tool or calculator in a step-by-step manner.
2. Look to your broker
In many cases, benefits brokers are willing to go on site for one-on-one sessions, and companies should take advantage whenever possible.
Employees will be comfortable knowing there’s an in-house HR or benefits pro at the broker, and a broker’s expertise can really improve workers’ overall understanding.
3. Allot enough time
The point of these meetings is to give employees all the time they need to understand their options and make informed decisions.
Rushing workers through these meetings will ensure the one-on-one education falls flat.
See the original article Here.
Source:
Bilski J. (2017 February 17). Employees desperately need more information on health plans, study says [Web blog post]. Retrieved from address https://www.hrmorning.com/employees-desperately-need-more-information-on-health-plans-study-says/
Employers adding financial well-being tools for preretirees
Take a peek at this interesting article from Benefits Pro, about the man tools and services employers are starting to offer to pre-retirees by Marlene Y. Satter,
As their employee base ages closer to retirement, employers are adding tools to help those older employees better prepare for the big day.
That’s according to Aon Hewitt’s “2017 Hot Topics in Retirement and Financial Wellbeing” survey, which found that employers are taking action to improve employee benefits and help workers plan for a secure financial footing, not just now but when they retire.
Not only are employers focusing on enhancing both accumulation and decumulation phases for defined contribution plan participants, they’re taking a range of steps to do so—from improved education to encouraging higher savings rates.
Just 15 percent of respondents are comfortable with the average savings rate in their plan; among the rest, 62 percent are very likely to act on increasing that savings level during 2017, whether by increasing defaults, changing contribution escalation provisions, or sending targeted communications to participants.
And only 10 percent of employers are satisfied with employees’ knowledge about how much constitutes an adequate amount of retirement savings, and nearly all dissatisfied employers (87 percent) are likely to take some action this year to help workers plan to reach retirement goals.
In addition, more employers are providing options for participants to convert their balances into retirement income. Currently just over half of employers (51 percent) allow individuals to receive automatic payments from the plan over an extended period of time.
They’re also derisking through various means, whether by adopting asset portfolios that match the characteristics of the plan’s liabilities (currently 40 percent of employers use this strategy, but the prevalence is expected to grow to more than 50 percent by year end), considering the purchase of annuities for at least some participants (28 percent are considering this action) or planning to offer a lump-sum window to terminated vested participants (32 percent are in this camp).
Why are employers suddenly so interested in how well employees are financially prepared for retirement?
According to Rob Austin, director of retirement research at Aon Hewitt, not only do employees not really understand how to convert a lump sum retirement plan balance into retirement income that they can live on, and employers are also worried that employees will mishandle that lump sum when the time comes and end up broke.
So some employers are tackling the issue by folding in more information about 401(k) plans with the annual enrollment process, in an effort to get employees to think more holistically about their benefits packages.
They're also encouraging them to consider increasing contributions to their retirement plan while they’re already enmeshed in other enrollments.
See the original article Here.
Source:
Satter M. (2017 February 13). Employers adding financial well-being tools for preretirees [Web blog post]. Retrieved from address https://www.benefitspro.com/2017/02/13/employers-adding-financial-well-being-tools-for-pr?ref=hp-top-stories
How Obama’s last healthcare legislation is further hurting the ACA’s chances of survival
Due to the most recent changes President Obama made to the ACA before leaving office, ACA repeal is looking more and more like a possibility. Take a look at this great article from Employee Benefits Advisors to see how the changes will affect the ACA repeal process by Craig Hasday
President Trump is delivering on what many had viewed as an unrealistic campaign promise: The repeal of Obamacare is right on track. In finalizing the budget, the GOP can now line out any ACA items with a fiscal impact, thanks to an executive order issued by Trump on his first day in office. By lining out the individual and employer penalty and eliminating some of the ACA taxes – voila – the ACA is gone.
The market reforms will stay, however (no pre-existing conditions, guaranteed issue coverage and dependents covered to age 26). But there is an enormous “if.” If the insurance carriers stay in the market.
One of the reasons the ACA is not working is the adverse selection issue. Insurance carriers must take all comers, and since the individual penalty for not obtaining coverage is full of loopholes, and not large enough to dissuade the young and healthy from rolling the dice, the risk pool has performed horrifically. That should be no surprise – I have been writing about it for years; a few examples here, here, here and here.
But if the individual penalty is repealed, it is going to get even worse. The healthy are going to leave and the risk pools will be left with a lot of expensive sick people who love the idea of guaranteed coverage, premiums and unlimited maximums.
The problem with QSEHRAs
The prior Congress and former President Obama didn't help matters with the passage of the 21st Century Cures Act, which was signed into law in December 2016. This law allows small employers who don't offer a group health plan to create a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). Employers can provide money to employees on a tax-free basis to pay for individual health insurance policies and to reimburse employees for certain medical expenses. This is going to make the small group pools worse and, my guess is, increase adverse selection even more.
Given the losses incurred to date and the additional selection being imposed on the healthcare system, the big question is will the health insurance carriers stay in the marketplace? If mainstream carriers refuse to offer policies – BOOM – the system implodes.
To quote the best show on Broadway, “Hamilton,” I would love “to be in the room where it happens.” This is going to be interesting to watch.
See the original article Here.
Source:
Hasday C. (2017 February 06). How Obama's last healthcare legislation is further hurting the ACA's chances of survival [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/opinion/how-obamas-last-healthcare-legislation-is-further-hurting-the-acas-chances-of-survival
How to encourage increased investment in financial well-being
Disappointed that your employees are not putting enough into your company's financial programs. Take a look at this article from Employee Benefits News for some helpful tips to help improve your employees' spending on financial well-being by Cort Olsen,
As few as 15% of employers say they are satisfied with their workers’ current savings rate in programs such as 401k(s), according to a new report from Aon Hewitt. In response, employers are increasingly focused on increasing savings rates and looking to expand financial well-being programs.
More workplace wellness programs are including a financial component, in which employers aim to help employees with financial issues from budgeting to paying down debt to saving for retirement.
Aon Hewitt surveyed more than 250 U.S. employers representing nearly 9 million workers to determine their priorities and likely changes when it comes to retirement benefits. According to the report, employers plan to emphasize retirement readiness, focusing on financial well-being and refining automation as they aim to raise 401(k) savings rates for 2017.
Emphasizing retirement readiness
Nearly all employers, 90%, are concerned with their employees’ level of understanding about how much they need to save to achieve an adequate retirement savings. Those employers who said they were not satisfied with investment levels in past years, 87%, say they plan to take action this year to help workers reach their retirement goals.
“Employers are making retirement readiness one of the important parts of their financial wellbeing strategy by offering tools and modelers to help workers understand, realistically, how much they’re likely to need in order to retire,” says Rob Austin, director of retirement research at Aon Hewitt. “Some of these tools take it a step further and provide education on what specific actions workers can take to help close the savings gap and can help workers understand that even small changes, such as increasing 401(k) contributions by just two percentage points, can impact their long-term savings outlook.”
Focusing on financial well-being
While financial wellness has been a growing trend among employers recently, 60% of employers say its importance has increased over the past two years. This year, 92% of employers are likely to focus on the financial well-being of workers in a way that extends beyond retirement such as help with managing student loan debt, day-to-day budgeting and even physical and emotional wellbeing.
Currently, 58% of employers have a tool available that covers at least one aspect of financial wellness, but by the end of 2017, that percentage is expected to reach 84%, according to the Aon Hewitt report.
“Financial wellbeing programs have moved from being something that few leading-edge companies were offering to a more mainstream strategy,” Austin says. “Employers realize that offering programs that address the overall wellbeing of their workers can solve for myriad challenges that impact people’s work lives and productivity, including their physical and emotional health, financial stressors and long-term retirement savings.”
The lessons learned from automatic enrollment are being utilized to increase savings rates. In a separate Aon Hewitt report, more than half of all employees under plans with automatic enrollment default had at or above the company match threshold. Employers are also adding contribution escalation features and enrolling workers who may not have been previously enrolled in the 401(k) plan.
“Employers realize that automatic 401(k) features can be very effective when it comes to increasing participation in the plan,” Austin says. “Now they are taking an automation 2.0 approach to make it easier for workers to save more and invest better.”
See the original article Here.
Source:
Olsen C. (2017 February 06). How to encourage increased investment in financial well-being [Web blog post]. Retrieved from address https://www.benefitnews.com/news/how-to-encourage-increased-investment-in-financial-well-being?brief=00000152-14a7-d1cc-a5fa-7cffccf000
10 tips for next generation benefits
Great article from Benefits Pro about ten tips to help improve your benefits for the next generation by Erin Moriarty-Siler,
If brokers and their clients want to continue to attract and, more importantly, retain millennials and other generations entering the workforce, they'll need to start rethinking benefits packages.
As part of our marketing and sales tips series, we asked our audience for their thoughts on the next generation and their benefits needs.
Here are the 10 tips we liked best.
1. Show appreciation
“Even if you don't have the time and resources to roll out the red carpet each time an employee joins your team, they should feel as if you do. Even something as simple as a team lunch to welcome them and a functioning computer can go a long way toward making a new employee feel valued and at home.” Sanjay Sathe, president & CEO, RiseSmart.
2. Real world benefits
“It's important for benefits professionals and brokers to transform their organizations’ benefits offerings to align better with what both the individual and the generational millennials value — benefits that reflect the real world in which all generations in today's workforce think about the interconnection between their careers, employers, and personal lives.” Amy Christofis, client account executive, Connecture, Inc.
3. A millennial world
“One can no longer think of millennials as the ‘kids in the office.’ They are the office.” Eric Gulko, vice president, Summit Financial Corporation
4. New normal
Millennials are no longer just data and descriptors in a PowerPoint slideshow about job recruitment. They are now the majority, and how they do things will soon be the norm. It's important to consider these implications.
5. Innovation
“If we want to build organization that can innovate time and again, we must recast our understanding of what leadership is about. Leading innovation is about creating the space where people are willing and able to do the hard work of innovative problem solving.” Linda Hill, professor of business administration, Harvard Business School
6. Don't make assumptions
“Just because millennials are comfortable using the internet for research doesn't mean they don't also like a personal touch. Employers need to be wary of relying on only one communication vehicle to reach millennials. Sixty percent of millennials say they would be willing to discuss their benefits options with someone face to face or over the phone.” Ken Meier, vice president, Aflac Northeast Territory
7. The power of praise
“The prevailing joke is that millennials are ‘the participation trophy generation,’ having always been praised just for showing up, not necessarily winning. Turn that negative perception into a positive by realizing that providing constructive, encouraging feedback when it's earned motivates this generation to strive for even more successes.” Kristen Beckman, senior editor, LifeHealthPro.com
8. Embrace diversity
“For the first time, employers are likely to have up to five generations working together — matures, baby boomers, Generation X, millennials (Generation Y) and now Generation Z. From their workstyles to their lifestyles, each generation is unique.” Bruce Hentschel, leads strategy development, specialty benefits division, Principal Financial Group
9. Non-traditional needs
“Millennials have moved the needle in terms of work-life balance. They don't expect to sit in their cubicles from 9-5. They want flexibility in their work location and hours. However, on the flip side of that, they are more connected to their work than generations before, often logging ‘non-traditional’ work hours that better fit into their lives.” Amy Christofis, client account executive at Connecture, Inc.
10. Listen in
“If there's one thing the Trump victory teaches us, it's to listen to the silence in others. Millennials may be giving the financial industry the silent treatment, but that doesn't mean they don't want to talk.” Christopher Carosa, CTFA, chief contributing editor,FiduciaryNews.com
See the original article Here.
Source:
Moriarty-Siler E. (2017 February 03). 10 tips for next generation benefits [Web blog post]. Retrieved from address https://www.benefitspro.com/2017/02/03/10-tips-for-next-generation-benefits?page_all=1
Target employee financial needs by finding the right technology
Are you looking for new ways to help improve your employees' financial needs? Take a look at this interesting article from Employee Benefits Advisors about how the use of technology can improve your employees' financial needs by Mark Singer
We have seen how a large percentage of the American workforce has an inadequate degree of financial literacy, and how the lack of basic financial knowledge causes personal problems and workplace stress. We have also seen the importance of financial education and how raising employee literacy directly benefits the bottom lines of companies.
The financial health of employees can vary greatly between companies, as can employee numbers. Work schedules and available facilities are other issues of variance. There is also the interest factor to address. Employees must find programs interesting and beneficial, or they will not attend or glean maximum results. Financial wellness programs that may be beneficial and successful for one company may be burdensome and unsuccessful for another. To meet pressing personal financial problems effectively, cutting-edge technologies need to be applied that both address immediate employee issues and limit company expense.
There are numerous new technologies that can be utilized in a mix-and-match fashion that successfully target employee financial needs. This age of the World Wide Web brings a host of financial education tools directly to the audience. Informational videos, virtual learning programs, webinars, training portals and other virtual solutions are easily accessible over the Internet and most are quite user-friendly. This mode of education is significant. For example, 84% of respondents to a survey conducted by Hewlett-Packard and the National Association for Community College Entrepreneurship said that e-tools were valuable. The study went on to show that modalities containing some degree of online training were preferred by 56% of respondents.
Gaming and data
One form of online educational technology that is gaining momentum as well as results is known as game-based learning. This method of learning is particularly popular with the millennial generation that has grown up with an ever-increasing variety of online gaming. In 2008, roughly 170 million Americans engaged in video and computer games that compel players to acquire skills necessary to achieve specific tasks. It has been found that well-designed learning programs that utilize a gaming sequence improve target learning goals. Such games teach basic financial lessons in a fun and innovative way that requires sharpened financial skills to progress through the programs.
Technological tools not only benefit those that are utilizing them directly, but they also assist the entire community through the collection of key data. Many of the mentioned tools embed surveys within programs or collect other data such as age, income and location, which can be used to create even better educational materials or better target groups in need of specialized services.
Employers need to realize that they benefit when they utilize these new technologies in their financial wellness programs, since these tools assist workers in taking control of their financial lives. Thereby reducing their stress levels, which in turn leads to happier and more productive employees. Sometimes it is best to meet the employees where they are, with tools that are easy and fun to use.
See the original article Here.
Source:
Singer M. (2017 February 02). Target employee financial needs by finding the right technology [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/opinion/target-employee-financial-needs-by-finding-the-right-technology