What will Workplace Wellness Look Like in 2020?
What will 2020 have in store of workplace wellness? Currently, all indicators are pointing toward a rapid evolution of the workplace wellness industry. Read this blog post to learn more about what wellness will look like in 2020.
As we look toward 2020, all indicators point towards a rapid evolution of the U.S. workplace wellness industry characterized by innovative solutions for managing health care costs that serve the increasing need for proactive ownership of well-being. However, are advances in related disciplines being leveraged optimally, cohesively and creatively to provide for maximum benefit to both the employee and employer?
The corporate model of wellness programs ranges from education programs, to a more evolved model of on-site fitness facilities, incentive programs and HR driven wellness initiatives as part of an overall health and benefits offering. The 2014 SHRM Survey of Strategic Benefits - Wellness Initiatives shows that 76 percent of all surveyed companies had some form of wellness programs/resources. Among those companies two-thirds offered some form of incentive or reward program.
The results of these types of programs have already demonstrated the positive impact of a collaborative responsibility partnership between employer and employee in implementing a wellness approach and the reduction of medical costs.
Several key performance indicators have been used for evaluation, including reductions in monthly medical cost spend, hospital admissions and employee absenteeism. According to SHRM, of the 30 percent who conducted a cost analysis of their wellness programs, 93 percent noted their programs were somewhat or very effective in cutting costs.
This certainly demonstrates a return on investment (ROI) to the employer. In addition, the positive qualitative effect on the organizational culture cannot be understated, with direct impact on talent and team spirit as well as other variables that are incremental to the quantitative benefits measured.
This is particularly important given that variables such as an increasingly aging workforce (by 2020, the number of Americans in the 55 to 64 age group will have grown by 73 percent since 2000), an increase in predominant disease states (by 2030, 40.5 percent of the US population is expected to have some form of cardiovascular disease) and rapidly changing regulations added to the equation, employers are evaluating best and "next" practices to determine if these programs are truly optimized to realize their full potential of impact.
For the next iteration of workplace wellness, the lessons learned can be leveraged from the evolution of the traditional health benefit offering to a health exchange model or to the advances and learnings in personalized therapeutic medicine. The current opportunity requires a creative and innovative approach to health and wellness ownership. Coupling a predictive, proactive and fact-based wellness management approach with employee-owned and led wellness decisions can provide a powerful and personalized platform.
By maintaining this initiative in a structured and sustainable manner, employers are able to provide a more targeted approach of spending proactive wellness dollars for maximum ROI and decreasing the reactive spend on medical costs.
These personalized programs will enable companies to better track and monitor costs and ROI with the goal to have more than 30 percent of the companies properly monitoring cost efficiencies. This is further supported by the fact that 90 percent said they would increase their investment in wellness programs if they could quantify the ROI.
Targeted Wellness
Traditional medical treatment has evolved significantly from standard diagnostic evaluations to increased utilization of scientific advances, specifically in terms of personalized medicine. Medical decisions and treatments are tailored to an individual patient through a data-based approach to drive the efficiency and effectiveness of patient treatment.
Similarly, there is an opportunity for the employee - within the framework of privacy regulations - to leverage this fact-based approach to optimize the value derived from a wellness offering. Two-thirds of employers involved in wellness initiatives typically provide some type of defined contribution or incentive towards wellness (e.g., fitness rebate); however, an opportunity exists to focus this spend on the desired health outcomes. This would provide the maximum benefit to the employee from a well-being standpoint, as well as to the employer for its investment.
While the powerful combination of data analytics and segmentation analysis allows a human resources team to facilitate a fact-based decision-making approach to right-fit an organization with the right individual in the right role at the right time, an organization can effectively manage the time and money dedicated to workplace wellness by creating a tailored program based on the individual employee's current needs and critical influencing factors.
Wellness Exchanges
Employers have made the journey from self-funded managed health care to the growing trend of providing employees with a "shopping mall" of health insurance options, and on to formal health exchanges - gradually increasing the patient-centric involvement of employees in managing their own health care choices.
The value drivers for this organizational transition include increased price competition based on the marketplace model as well as cost savings influenced by employers not overbuying health care coverage for their employees. This is exemplified by the vast majority of participants switching to cheaper plans in their first year of choice coverage.
This undertaking by an organization is by no means a small effort, and it requires a good amount of diligence and change management - not only in creating the road map for the transformation journey, but also in properly structuring, executing and sustaining this approach. In a well-planned and structured implementation journey, the return on investment can be well recognized.
Similarly, a workplace wellness exchange can offer a suite of proactive health program choices designed to give the employee the responsibility to make an informed and impactful decision that is tailored to drive specific health outcomes.
A marketplace approach can also drive competitive offerings from wellness solution providers and encourage a spirit of innovative and cost-conscious platform options - further maximizing use of wellness dollars. This model will encourage individuals to leverage their own personal health ecosystem information (e.g., current state baseline, lifestyle, environmental factors and disease state predisposition) to choose a solution that may help reduce reactive health care dollars spent based on disease state prevention and risk factor reduction.
According to SHRM, year-over-year employee participation has remained flat. An innovative and personalized approach could help motivate and boost participation and would also continue to ensure that the individual employee's wellness responsibility is shared in partnership with the employer. This would require an independent review of the process, structure and plan design, specifically as it relates to patient privacy and the impact to the holistic benefits offering.
Regardless of a company's ability to track ROI, an overwhelming majority (72 percent) think their wellness initiatives are very or somewhat effective in reducing health care costs and 78 percent thought they improved the overall physical health of their employees.
As the impact of reactive medical claim costs on employers continues to increase due to a variety of influencers, proactive workplace wellness will likely evolve and become an inherent component of an organization's benefits offering.
This presents an opportunity to leverage recent learnings from other initiatives in the life sciences vertical to create an effective and efficient workplace wellness platform that is data-driven and tailored to the needs of the employee - providing a marketplace for choice and competition, and reinforcing the shared partnership responsibility between the employer and employee.
SOURCE: Pervaaz, V. (Accessed 01 November 2019) "What will Workplace Wellness Look Like in 2020?" (Web Blog Post). Retrieved from https://www.corporatewellnessmagazine.com/article/workplace-wellness-in-2020
IRS updates rules on retirement plan hardship distributions
Recently, the Internal Revenue Service (IRS) finalized updates to the hardship distribution regulations. These new regulations make the requirements more flexible and participant friendly. Read this blog post to learn more about these updated regulations.
Employers who allow for hardship distributions from their 401(k) or 403(b) plans should be aware that the Internal Revenue Service recently finalized updates to the hardship distribution regulations to reflect legislative changes. The new rules make the hardship distribution requirements more flexible and participant-friendly.
Hardship distributions are in-service distributions from 401(k) or 403(b) plans that are available only to participants with an immediate and heavy financial need. Plans are not required to offer hardship distributions. But there are certain requirements if a plan does offer hardship distributions. Generally, a hardship distribution may be made to a participant only if the participant has an immediate and heavy financial need, and the distribution is necessary and not in excess of the amount needed (plus related taxes or penalties) to satisfy that financial need.
An administrator of a 401(k) or 403(b) plan can determine whether a participant satisfies these requirements based on all of the facts and circumstances, or the administrator may rely on certain tests that the IRS has established, called safe harbors.
Over the last fifteen years, Congress has changed the laws that apply to hardship distributions. The new rules align existing IRS regulations with Congress’s legislative changes. Some of the changes are mandatory and some are optional. The new rules make the following changes. The following changes are required.
Elimination of six-month suspension.
Employers may no longer impose a six-month suspension of employee elective deferrals following the receipt of a hardship distribution.
Required certification of financial need.
Employers must now require participants to certify in writing or by other electronic means that they do not have sufficient cash or liquid assets reasonably available, in order to satisfy the financial need and qualify for a hardship distribution.
There were also some optional changes made to hardship distributions.
Removal of the requirement to take a plan loan.
Employers have the option, but are not mandated, to eliminate the requirement that participants take a plan loan before qualifying for a hardship distribution. In order to qualify for a hardship distribution, participants are still required to first take all available distributions from all of the employer’s tax-qualified and nonqualified deferred compensation plans to satisfy the participant’s immediate and heavy financial need. The optional elimination of the plan loan requirement may first apply beginning January 1, 2019.
Expanded safe harbor expenses to qualify for hardship.
The new hardship distribution regulations expand the existing list of pre-approved expenses that are deemed to be an immediate and heavy financial need. Prior to the new regulations, the list included the following expenses:
- Expenses for deductible medical care under Section 213(d) of the Internal Revenue Code;
- Costs related to the purchase of a principal residence;
- Payment of tuition and related expenses for a spouse, child, or dependent;
- Payment of amounts to prevent eviction or foreclosure related to the participant’s principal residence;
- Payments for burial or funeral expenses for a spouse, child, or dependent; and
- Expenses for repair of damage to a principal residence that would qualify for a casualty loss deduction under Section 165 of the Internal Revenue Code.
The new regulations expand this list of permissible expenses by adding a participant’s primary beneficiary under the plan as a person for whom medical, tuition and burial expenses can be incurred. The new regulations also clarify that the immediate and heavy financial need for principal residence repair and casualty loss expenses is not affected by recent changes to Section 165 of the Internal Revenue Code, which allows for a deduction of such expenses only if the principal residence is located in a federally declared disaster zone. Finally, the new regulations add an additional permissible financial need to the list above for expenses incurred due to federally declared disasters.
New contribution sources for hardships.
The law and regulations provide that employers may now elect to allow participants to obtain hardship distributions from safe harbor contributions that employers use to satisfy nondiscrimination requirements, qualified nonelective elective contributions (QNECS), qualified matching contributions (QMACs) and earnings on elective deferral contributions. However, 403(b) plans are not permitted to make hardship distributions from earnings on elective deferrals, and QNECS and QMACs are distributable as hardship distributions only from 403(b) plans not held in a custodial account.
As this list indicates, the new regulations make substantial changes to the hardship distribution rules.
The deadline for adopting this amendment depends on the type of plan the employer maintains and when the employer elects to apply the changes. Plan sponsors should work with their document providers and legal counsel to determine the specific deadlines for making amendments.
SOURCE: Tavares, L. (01 November 2019) "IRS updates rules on retirement plan hardship distributions" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/irs-updates-rules-on-401k-403b-plan-hardship-distributions
Strategies to promote emotional well-being in the workplace
According to the National Alliance on Mental Health, one in five adults experiences some form of mental illness during the year. Research has shown that 90 percent of employees perform better when they address mental health. Read the following article to learn more about how to promote emotional well-being at work.
Employers are taking a greater interest in their employees’ well-being by promoting emotional wellness at work.
Wellness programs are offered by 58% of employers, according to data from the Society for Human Resource Management. There are mutual benefits to be reaped by the employer and employees when an organization looks to support its workers’ emotional wellness.
About 90% of employees perform better when they address mental health, but only 41% feel comfortable bringing it up during a check-in, according to data from 15Five, a software company that specializes in gathering employee feedback.
One in five American adults experiences some form of mental illness in any given year, according to the National Alliance on Mental Health. Additionally, one in every 25 adults is living with a serious mental health condition such as schizophrenia, bipolar disorder or long-term recurrent major depression.
Employees are demanding better mental health benefits from their employers and some of them are listening. In September, coffee giant Starbucks announced that it is taking steps to improve its employees’ mental health with a new long-term initiative that includes an enhanced employee assistance program and mental health training for store managers.
Only 25% of U.S.-based managers, across a variety of industries, have been trained to refer employees to mental health resources, according to SHRM. Employers including PNC and Ocean Spray are also investing in benefits to address mental health.
See Also: 5 reasons employers should offer student loan repayment benefits
By investing in emotional and mental wellness benefits, employers are creating a human-centric workforce that drives retention, productivity and engagement, says Heidi Collins, vice president of people operations at 15Five. A key part in achieving this to create a culture that normalizes conversations about mental health.
Collins spoke with Employee Benefit News about how organizations can provide management with stronger training and more open check-ins that enable them to build trusting relationships with their employees to promote productivity.
How is 15Five creating a culture that is more understanding of employees’ mental health needs?
In so many different practices with our employees, both in our manager and direct report programs, but also as a company as a whole. We are normalizing emotions and emotional wellness in the workplace. What it all has, to begin with, is the strategy behind it and your company’s values. It can’t just be a program that HR is sponsoring and promoting but that’s not really attached to the overall company values.
How can an employer create a more mental-health and wellness-focused workplace?
We do automated weekly check-ins between managers and their direct reports. We have a recognition feature called High5, so that people throughout the organization can highlight their peers, express gratitude and also highlight someone for how they may have impacted their day or a project that went really well. There’s a recognition feature, there’s a review feature, there’s a weekly check-in feature. In the weekly check in we have a poll rating and every week we ask our employees: on a scale of one to five, how did you feel at work this week? So we build into our product the practice of managers checking in with their employees about their feelings and about their emotional and mental well-being. We attempt to create enough psychological safety, trust and openness to vulnerability that employees feel comfortable that if they are having a two out of five weeks, it can be okay to share that with a manager and be able to back it up with the reason why. So for example, an employee might say: This week was a two out of five for me because three projects blew up in our faces and at home my kid is sick and I didn’t get any sleep. The employee can just lay it all out there.
How can employers and employees become more comfortable normalizing the conversation around mental health?
It has to be very intentional, deliberate and explicit. It’s the kind of stuff employers may talk about or advertise or promote on their employer branding website...it should be very clear that promoting emotional well-being and mental wellness is part of the employer’s culture and something they value. The executive team and all of the leadership needs to be totally brought into that and that’s challenging because there are many people out there in the world who aren’t comfortable yet with talking about or bringing up those kinds of things at work. That’s the big challenge we’re facing right now, yet so many employees are coming to expect [support for mental health issues].
See Also: Employers can help employees catch some Z's with new wellness benefit
Is there a generational disconnect when it comes to promoting emotional wellness in the workplace?
I would say that those of us who don’t have our heads stuck in the sand, we get it. We realize that there’s a reason this mindset of addressing employees’ mental health is so popular. It’s because it’s way more effective. This is how we want to work. I’m generation X and I have a lot of friends who work in big corporate environments who still think you leave your emotions at the door. But I would say those of us who want to have a more progressive approach are so on board with it. HR professionals and potential employees who follow those old school ways, they won’t even get hired at a company like ours and I bet a lot of our customer’s companies. That’s because we know that doesn’t work anymore.
What specifically has 15Five done to promote this initiative among its employees?
It all starts from our hiring process and what we communicate about our values and what it’s like to work at 15Five. Not only are we assessing candidates on their skills, but we’re also assessing them on their willingness to go to that very vulnerable place in their day to day with their manager or direct report. We have question in our interviews that ask “would you be comfortable talking about emotions at work?” and “if you were a two out of five on the emotion poll for the week, would you be able to share that with your manager and how would you go about doing that?” We will ask questions to make sure candidates we are bringing in are okay with this way of doing things. If somebody is going into a manager position internally, we have just implemented a manager assessment interview to make sure this person really has the skills to be a 15Five manager. A manager in our eyes is not just a taskmaster or somebody who approves your time off. They need to be employees’ coach, cheerleader and champion and they need to be comfortable supporting employees when things aren’t going well. It’s almost like having the skill set of a therapist.
SOURCE: Shiavo, A. (23 October 2019) "Strategies to promote emotional well-being in the workplace" (Web Blog Post). Retrieved from https://www.benefitnews.com/news/strategies-to-promote-emotional-well-being-in-the-workplace
‘Lifestyle’ choice: An emerging benefit could attract and retain employees
An emerging perk, lifestyle spending accounts (LSA), are one way employers can stay competitive. An LSA is an account that is funded solely by an employer. Employees can use the funds to purchase goods or services as long as they fall into specific categories set by the employer. Read this blog post to learn more about this emerging benefit.
Employers seeking new ways to stay competitive in the employee benefits marketplace might consider an emerging perk, lifestyle spending accounts, whose aim is to broaden employee access range of health and happiness-oriented goods and services.
There’s really no limit to the types of things LSAs can fund, but that endless range of choices can make it difficult for employers to get started.
But first, the basics: An LSA account is funded solely by the employer (and which is taxable as income to employees. The employee can use the funds to purchase goods or services, as long as they fall into the categories of the employer’s choosing. Think investments in physical and mental well-being, environmentally friendly goods or childcare.
The accounts are popular on the West Coast and in Canada. and is gaining traction throughout other parts of the U.S.
Employers can choose to fund a wide range of options, depending on what they think will appeal most to their workforce. For instance, while some carriers reimburse employees for gym memberships, employers can supplement a healthy physical lifestyle by adding workout studios to the options menu; personal or small-group training; workout equipment such as weights, a stationary bike or a treadmill; workout clothes; or nutrition counseling.
And while mental well-being is a new benefits focus of many employers, health plans typically only cover a limited number of counseling sessions. Employers can supplement this benefit by providing funds for therapy or counseling sessions.
Some employers are also using LSAs to help employees with child-related expenses, starting at the very beginning with help with fertility treatments, progressing to doulas and midwives and on to baby gear and then childcare.
But back to the too-much-choice dilemma. To figure out what to fund, start by identifying gaps in your current benefit offering. For example, offering funds toward gym and studio memberships is an obvious place to start if you don’t already have a program in place. Consider what types of employees you want to recruit and retain, and think about what sort of behaviors you want to influence. LSAs can be offered to an entire workforce, or different fund amounts can be offered to different classes of employees.
Other issues to consider: how will you deliver the funds and what happens when an employee leaves or is terminated. These are minor details, but they could leave you with headaches if you don’t address them prior to rollout.
LSAs are typically managed by a TPA that will adjudicate claims and approve purchase reimbursements, removing the hassle of managing a program for large employers.
For employers hoping to encourage employees toward certain healthy behaviors and sweeten benefits packages, LSAs can help round out offerings and act as another recruitment and retention tool.
SOURCE: O'Connor, P. (25 October 2019) "‘Lifestyle’ choice: An emerging benefit could attract and retain employees" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/lifestyle-benefits-for-attraction-and-retention
5 reasons employers should offer student loan repayment benefits
Did you know: Currently, American families carry more than $1.6 trillion in student loan debt. Because of this, some employers are now adding student loan repayment benefits to their employer-sponsored benefits offering. Read this for five reasons why employers should offer student loan repayment benefits.
As every employer knows, benefits can be both expensive and difficult to manage. So then, what could possibly be the advantage of adding more expenses to the budget — especially ones that go beyond traditional benefits like health insurance and paid time off?
Candidates have options in the current job market, which allows them to be picky about where they choose to work. With employees in the driver’s seat, we’re seeing a workforce that is increasingly focused on companies that show they value their workforce.
One way some employers are doing this is by adding perks such as student loan repayment benefits. American families currently carry more than $1.6 trillion in student loan debt, the question of providing student loan assistance is not an “if,” but a “when.”
Will your company alone solve the country’s student loan debt crisis? No. But, ultimately, going beyond the standard of offering traditional benefits is a mark of your authenticity and genuine nature as an employer. An investment in student loan benefits demonstrates your investment in the financial wellness of your people.
Luckily, student loan repayment benefits are easy to implement and require very little maintenance once launched. Because this voluntary benefit doesn’t have to align with open enrollment, you can set the new standard for how employees should be treated immediately. Here are five reasons employers should already be offering student loan benefits.
1. Employees are actively seeking this benefit
The amount of student loan debt is staggering — currently, more than $600 billion more than the amount of credit card debt in the United States, according to LendingTree. Considering nearly everyone has a credit card and only some have student loan debt, it’s safe to say the path of higher education can have a negative financial impact for those relying on loans.
Most often, employers think the only way to help employees with their student loan debt is through contributions, but that’s not the case. Contributions aren’t a prerequisite for student loan benefits. As roughly 250,000 borrowers default on their loans each quarter, employees are actively seeking help in managing their student loan payments. With delinquency and default of student loans on the rise, you can still set employees on the right track with a student loan repayment benefit, even if you can’t afford the price tag of contributions.
2. You’ll be the employer of choice for top talent
With a low unemployment rate, the battle for the best talent is fierce. Student loan repayment assistance is a huge advantage when employees have a choice in which company to work for. Nearly three years ago, 86% of workers said they would commit to a company for five years if the employer helped pay back their student loans, according to the nonprofit American Student Loan Assistance. Yet, the Society for Human Resource Management reports only 8% of companies currently offer this type of benefit — which means those who do, may have an edge over the competition.
Today, the most successful companies don’t just focus on seeking out incredible candidates, they’re looking for ways to make the most desirable candidates come to them. Student loan assistance is a very differentiated offering — but it won’t be that way for long.
3. The benefit can help employees reach life milestones
Today, the millennial generation makes up a significant amount of the working population — but, as they’ve continued to enter the workforce over the last decade, millennials have held off on making major life purchases. Why? Because some of the most prominent markets in our economy, such as housing and higher education, have gotten drastically more expensive and salaries haven’t increased at a rate to match these rising costs.
However, if you think student loan debt is only an issue for younger generations, think again. All generations are making sacrifices because of student loan debt. In fact, 57% of Baby Boomers feel student loans are getting in the way of retirement.
Naturally, people with less debt have more money to spend in other areas. When companies help employees reduce their student loan debt, significant life milestones — like buying a house, starting a family, sending their children to college or saving for retirement — are more attainable.
4. Improved employee retention
The smartest companies aren’t just looking to attract the best talent, they’re looking to keep it. Turnover has a negative impact on business — both financially and culturally. The average cost of each employee departure is one-third of that worker’s annual earnings and, in 2020, roughly one in three workers will voluntarily quit their job.
Voluntary benefits like student loan repayment might seem like they will cost your business but, even just for the sake of keeping exceptional employees, they’re a worthy expense. Aiding employees in tackling some of their debt makes a significant difference in whether or not they want to continue working for you. Your workers are human beings. When they’re cared for in such a way, employees are more inclined to stay with a company where they’re valued.
5. Employees will be happier
Happiness is contagious. Happy employees are both more productive and have a positive impact on company culture, which absolutely makes a difference for your business. But, when more than half of people are regularly stressed due to financial issues, it has a personal and professional impact on employees.
Financial stress is one of the biggest burdens a person can face — and not something your employees can simply leave at the door. By offering student loan assistance, you’re not only eliminating some of the stress affecting your employees, but you’re also opening more financial doors for them and creating a company culture they’ll want to shout about from the rooftops.
SOURCE: Grewal, S (17 October 2019) "5 reasons employers should offer student loan repayment benefits" (Web Blog Post). Retrieved from https://www.benefitnews.com/list/5-reasons-employers-should-help-with-student-loans
What would a workplace emergency-savings benefit look like?
Data from a recent survey indicates that a significant portion of American workers could face a financial emergency if they were hit with sudden bills, lost wages or other unforeseen expenses. Read this blog post to learn more about emergency-savings benefits.
An alarming number of workers don't have enough money saved away to carry them through even a short-lived financial emergency, and experts are urging employers to take steps to address that shortfall with changes to their benefits programs.
Survey data indicate that while savings rates vary based on a number of factors, substantial portions of American workers across income levels could face a financial emergency if they were hit with sudden medical bills, lost wages or other unforeseen expenses, such as a major home or car repair.
"Regardless of income we still see a significant percentage of people that do not have a rainy day fund that could cover three months of expenses," Craig Copeland, senior research associate at the Employee Benefit Research Institute, said on a recent online presentation the group hosted.
The AARP has been studying the issue, and recently reported that 53% of all American households have no emergency savings. Moreover, the retirement group reported a direct link between emergency funds and overall financial confidence. According to its recent report, Americans with rainy day funds are 2.5 times more likely to feel confident about their long-term financial prospects than those who do not.
"If people are living on such thin margins that an unexpected bill requires their complete attention and all existing resources to address it, it is extremely difficult to keep the longer-term in mind or to make progress toward longer-term goals," said Genevieve Melford, who helps lead a financial security program at the Aspen Institute.
As employers increasingly come to view emergency savings as a crucial element of their employees' financial well-being, more have been exploring a separate benefit to help encourage workers to put away money for some unforeseen contingency.
Catherine Harvey, senior policy advisor at the AARP's Public Policy Institute, has been taking a hard look at how workplace emergency savings benefits could be structured, what features would make them most attractive, and how, as a practical matter, employees could be moved to actually participate.
"There's a lot of evidence from behavioral science about what makes employer-based interventions effective, and not surprisingly one aspect of an effective program to maximize participation in an employee benefit is to make participation really easy," she said.
"That's true in 401(k)s, that's true in health programming, it's true in marketing -- any time that you get something in the mail or are automatically signed up for Spotify beyond your 50-day free trial you're subject to a default [that works] to make enrollment really easy," Harvey said.
Some employers have offered a feature that allows workers to split their paychecks through direct deposit into separate accounts, one being set aside for emergency savings. But the early analysis of those programs, which tend to rely on the employee proactively opting to set up and contribute to the emergency account via direct deposit -- rather than through auto-enrollment -- has found the results underwhelming.
"That's where we think automatic enrollment, that frictionless enrollment, really distinguishes this from everything else that's on the market right now," Harvey said.
"If split direct deposit were as powerful as it could be, more employers would be doing that and people would be saving for emergencies," she said. "We know that that's just not the case."
But emergency savings programs, executed properly, could become a key component of employers' expanding financial wellness benefits packages, a hot topic in the benefits world, but one where employers are still grappling with the best way to drive engagement.
"We know that information for employees on a website is not going to cut it," Harvey said. "Education alone just doesn't work, and so employers over the years have gotten really savvy and have taken up the behavioral finance tools and concepts to make participation the default."
The AARP also surveyed workers of a variety of income and age ranges about the types of features that would entice them to contribute to an emergency savings plan.
"Not surprisingly," Harvey said, survey respondents cited "the power of the employer match, which speaks to the incentive behind savings as being a very important feature -- one that basically blows all of the other features out of the water."
That held true across the board, as even workers who reported strong savings rates independent of an employer plan said they would welcome matching funds.
"If there's a match on the table, people don't want to leave dollars on the table," Harvey said.
In addition to a matching feature, workers AARP surveyed indicated strong preferences for programs that would protect their privacy, extend them complete control over access to their funds, and generally limit complicating red tape that would make the programs less functional.
"The idea here behind an employer-based emergency savings program is let the employee define the emergency," Harvey said. "Putting up rules and barriers, eligibility criteria, is just going to frustrate people and they won't use the money when it's needed at that moment."
SOURCE: Corbin, K. (11 October 2019) "What would a workplace emergency-savings benefit look like?" (Web Blog Post). Retrieved from https://www.benefitnews.com/news/what-would-a-workplace-emergency-savings-benefit-look-like
The Open Enrollment Checklist: Are You Poised for a Successful Season
Are you prepared for open enrollment? According to a recent survey, 56 percent of U.S. adults with employer-sponsored health benefits said health coverage satisfaction is a key factor in deciding whether they should leave their current job. Read this blog post from Employee Benefit News to learn more.
It’s here… the moment we’ve all been waiting for — or, in the case of HR, preparing for (at least we’d hope). That’s right, open enrollment season has arrived.
Open enrollment is a major opportunity for HR to contribute to their company’s performance — both in terms of healthcare savings and employee productivity. The better employees understand their benefits, the more likely they are to make cost-conscious decisions about their plan choices and their healthcare — saving themselves, and their employers, money. Not only that, but a recent survey found that 56% of U.S. adults with employer-sponsored health benefits said that whether or not they like their health coverage is a key factor in deciding to stay at their current job. And, interestingly, satisfaction with benefits and benefits communications have a tremendous impact on job satisfaction and engagement.
Not sure you’ve done everything you could to turn this annual necessity into a true financial, educational game-changer for your organizations? Ask yourself, did you:
Take stock of last year’s enrollment? Before diving into enrollment for 2020, employers should have taken stock of how the company fared last year. Post-mortem meetings with the enrollment team (along with key internal and external stakeholders) to assess what went well (or didn’t) can ensure the coming enrollment season runs smoothly.
In particular, identify the most time-consuming tasks and discuss how they could be streamlined in the future. Second, determine what questions employees asked the most about last year — and be prepared to answer them again this year. Third, consider whether the company achieved its overall open enrollment goals, and what contributed to those results. By addressing the peaks and pitfalls of last year’s season, HR should have a head start on planning for 2020.
Plan your communications strategy?With a defined approach to open enrollment in place, HR at this point should have developed an organized, well-communicated strategy to keep employees informed about their plan options at enrollment and throughout the year. Have you:
· Defined corporate objectives and how to measure success? · Assessed what messages to share with employees, especially anything that is changing — such as adding or eliminating plans or changing vendors? · Determined what information is best delivered in print (e.g. newsletters, posters, postcards, enrollment guides), online or in person through managers or one-on-one enrollment support? Adopting a multi-channel engagement strategy will ensure key messages reach the intended audience(s).
Make sure employees understand the deadline and process for enrolling — and the implications of missing the enrollment window. They must understand whether their existing coverage will roll over, if they’ll default to a specific plan and/or level of coverage (perhaps different from what they currently have), or end up with no coverage at all.
Take a pro-active approach to open enrollment? Ninety percent of employees report that they roll over their same health plan year over year — though this doesn’t indicate overwhelming plan satisfaction. More typically, it’s because they’re intimidated about what they don’t know, are confused about their choices or just don’t care. Employees don’t have the information they need, and aren’t likely to seek it out on their own.
Offering — or even requiring — one-on-one meetings with benefit experts during open enrollment provides a forum for employees to discuss their individual needs and ensure they are selecting the right coverage. These services — often available through brokers or outside engagement firms — provide employees with a safe space to ask specific questions about their health conditions, family history and potential life changes that could affect their insurance needs. This is the ideal time to remind employees that there is no one-size-fits-all plan, and that the least expensive plan on paper may not, ultimately, be the most cost-effective plan over time.
Revisit your SPD? The document we all love to hate, summary plan descriptions (SPDs) remain the best source for information about how each plan works, what it covers and the participant’s rights and responsibilities under that plan.
Having an SPD that is current, appealing (or at least not off-putting) and easy to access can answer many employee questions before they find their way to HR. Simple fixes like adding charts, callout boxes or icons can make your SPDs easier to navigate. Many employers are taking it a step further and offering interactive SPDs, which include robust search functionality and links to definitions, important forms, modeling tools and calculators, vendor sites and even short video clips. By making SPDs digital and interactive, employers can provide employees access to important information about their coverage 24/7 via any device. And, by adding a data analytics component, HR can track which sections employees visit most and pinpoint knowledge gaps about their benefit options to enhance understanding and drive increased benefits usage.
Account for all demographics? With all the focus on today’s multigenerational workforce, it’s important to remember that there’s more to “demographics” than age and gender. Worksite (office vs. shop floor vs. construction site vs. road warrior) can have a tremendous impact on the communications channels you use and when you use them.
And while some “generational generalizations” hold true — many older workers prefer paper, and most young people prefer mobile communication channels — it’s more important to look at employee cohorts from the perspective of differing priorities (planning for retirement vs. retiring student debt), different levels of education and healthcare literacy, and experience with choosing and using benefits. Employees just starting their careers are likely to need more support and different information than a more seasoned worker who’s had years of experience with the enrollment process. Consider the most effective ways to engage the different demographics of your population to gain their attention and interest in choosing the right plan for them.
Equip employees for smart healthcare choices year-round? For most employees, becoming an educated healthcare consumer is a work in progress — which is why many employers offer year-round resources to support smart healthcare choices. That said, these resources are often under-utilized because employees don’t know they exist.
Open enrollment is the perfect time to spread the word about these programs and address the key question for employees: “What’s in it for me?” For example, many employers offer transparency services, which enable employees to research the potential cost of care and compare prices across several providers in their area.
Other resources, such as benefits advocates, can answer questions from employees in real time — including where to get care, how to get a second opinion and what the doctor’s instructions really mean. When used in conjunction, transparency and advocacy services can lower out-of-pocket spending for the employee and reduce costs for the employer. Does your open enrollment communications strategy highlight that these resources exist, outline how they work and explain how they benefit the employee?
What if open enrollment is only a week away and you haven’t taken most, if any, of these steps? It’s not too early to start your to-do list for next year — perhaps by first tackling your SPD and drafting that communications plan. Most importantly, get that post-mortem meeting on the schedule now, while the lessons learned from this year’s open enrollment are still fresh.
SOURCE: Buckey, K. (3 October 2019) "The Open enrollment checklist: Are you Poised for a successful season" (Web Blog Post) https://www.benefitnews.com/list/the-employers-open-enrollment-checklist
Providing an HSA, FSA, or HRA Health Plan for your Employees
When open enrollment hits annually, it is not uncommon for employers to feel exasperated when staring down a list of acronyms such as HSA, FSA and HRA. As it should go without saying, the most common first thought is, “What does any of this mean?” Even the most seasoned experts have difficulty with understanding the complexities of various care options. That’s why in this installment of CenterStage, Kelley Bell, a Group Health Benefits Consultant at Saxon Financial, is here to break down the ‘alphabet soup’ that is HSAs, FSAs and HRAs.
What Is an HSA?
An HSA stands for a Health Savings Account. Kelley stated that HSAs work in conjunction with your existing HDHP plan (given you already have one) to cover costs associated with eligible medical, dental and vision expenses. Available to open just like a bank savings account, Kelley said, “It is your account; yours if you leave the employer and can contribute as long as you have an HDHP and can use the funds until they are gone, even if you are no longer in an HDHP.” For most, this applies to retirement. If you are reasonably healthy throughout your working life, Kelley said you can carry a large HSA balance into retirement. At that point, the funds can be used to cover the out-of-pocket medical costs that often increase with you as you age.
In addition to all the above, certain tax advantages exist within an HSA plan:
- Contributions are excluded from federal income tax.
- Interest earned is tax referable.
- Withdrawals for eligible expenses are exempt from federal income tax.
HSAs are typically available through employers, but individuals can establish one, as well. Many banks offer HSA programs for their customers, meaning if your employer does not offer the benefit, you can create an HSA account there.
What Is an FSA?
An FSA is a Flexible Savings Account. Much like an HSA, these plans cover the payment of medical, dental and vision-related expenses, and contributions you make to the plan are tax-deductible. Similarly, when you open an FSA account, you’re typically provided with a debit card or checkbook, so the funds can be accessed in the account. However, Kelley stated an FSA plan has a catch: “An FSA cannot roll over unused funds from year to year and is not portable.” Therefore, any contributions made to the plan that have not been spent by the end of the year are forfeited.
Some employers, as Kelley noted, do have options that will help you avoid complete forfeiture of unused funds. Certain employers allow their employees to carry over up to $500 of unused funds into the following year, while others will extend the use of the funds for up to two and a half months into the new year. Employers generally will offer one or the other, but never both. Some, however, offer no such option at all.
Kelley mentioned general purpose FSA coverage, and stated it can “make you ineligible for HSA contributions.” She continued to add that certain types will not prevent HSA eligibility, i.e. limited FSA for vision, dental, parking or “post-deductible FSA” which reimburses you for preventative care or for medical expenses that are incurred “after the minimum annual HDHP deductible has been met.” As a result of forfeiting any unused funds in the account, an FSA is best used by someone who has ongoing and predictable medical expenses. In this situation, it is likely you will deplete the funds in the account, whereas if you are considered healthy and have limited medical expenses (i.e. minor illness, sinus infection), the potential for forfeiture is high, and you may have to forgo the account. FSAs are employer-sponsored and typically are an option as part of a ‘cafeteria plan’.
What Is an HRA?
An HRA is a Health Reimbursement Arrangement. Like the other plans described in this article, an HRA is a tax-free employer funded amount of money for healthcare expenses. Contributions, as Kelley explained, “can be excluded from gross income, meaning that won’t pay taxes on that money and reimbursements from the HRA are tax-free when used for qualified medical expenses.” Depending upon the type of HRA, unused funds may or may not be rolled over from one year to the next. However, employers may also allow employees to use their HRA funds even into their retirement.
The benefits of an HRA take action after the employee has met a specific portion (i.e. employee meets 1st $2500 of a $5000 deductible), making it easier for the employee to meet their high deductible. HRAs are good for employers who want more control over how their medical dollars are put to use. Naturally, if the employer is paying the cost of the HRA, it can be of an increased advantage than contributory health insurance premiums and direct payment for out-of-pocket expenses. With an HRA, the employer determines the reimbursements and does not have to contribute the same amount for all employee groups (i.e. tiers of employee coverage, employee/child, employee/spouse and family).
How Saxon Helps
It is important to understand the needs of every client and educate their employees on how to use their healthcare. Saxon values client education and service above all else. We make educating employees a priority and ensure their benefits are understood and easy to use. Saxon represents all of the major carriers, allowing us to secure the best plans and rates for you and your staff, which we review annually.
If you are considering offering an HSA, FSA or HRA insurance plan to your employees, contact Kelley Bell today at (937) 672-1547 or kbell@gosaxon.com to begin exploring the benefits of adding this superior level of coverage today.
Simple Open-Enrollment Tips That Can Make a Big Difference
Many employees associate fear, anxiety or apprehension with open enrollment, the annual period when they select which employer-sponsored benefits they will have the coming year. Read this blog post from SHRM For a few simple tips to help out with this open enrollment season.
Trepidation is what comes to mind for many employees when asked their feelings about open enrollment, the annual period when they select employer-provided benefits for the coming year.
According to a nationally representative sample of 1,000 employees polled earlier this year, 33 percent cited "annoyance" or "dread" as their primary emotions when they thought about open enrollment and just 10 percent of workers said they were "confident" in the benefits choices they made when the enrollment process was over, according to VSP Vision Care's annual Open Talk about Open Enrollment survey.
In another survey, HR software company Namely found that 31 percent of employees give their employer a "C" or lower when it comes to open enrollment.
Here are some tips from benefits experts that will help you raise your grade this open-enrollment season.
What to Do, and Not to Do
Jennifer Benz, national practice leader at benefits communications firm Segal Benz, shared three bad HR practices that undermine open enrollment and three best practices for doing open enrollment the right way.
- Don't hide vital information from employees. Benz recalls how one company sent out its benefits materials but didn't include monthly costs. "A group of enterprising employees crunched the numbers and came up with estimates and circulated a rogue spreadsheet. Dealing with this communications fiasco took more work" than being upfront about costs, she noted.
Best practice: Be transparent and share the reasons you are making benefits changes. Break down the details and do the work for the employees. Provide scenarios so employees can better understand their options and cost breakdowns for different life situations.
- Don't cram in every benefit at once. Some companies hand out pages and pages of text, jamming a year's worth of communications into a few weeks, and figure they have done what they need to do. "What they have done is confused their employees," Benz said.
Best practices: Communicate the technical details of your various benefits over time. "Don't assume employees will weed through all your materials to make sense of the benefits offered to them," Benz said. Also make full use of visual aids. "Photos, icons, infographics, memes, charts, graphics and more—they all help to attract, and more importantly hold, people's attention," noted Amber Riley, a communications consultant to Segal Benz. "Whether you're driving an open-enrollment campaign, creating a new benefits guide or promoting a wellness program, when you increase the visual pleasure of what you are communicating, your people are more likely to engage, learn, understand and ultimately take action."
- Don't give employees too little time to process their open-enrollment choices. While many people wait until the last day to fill out the health care selection forms, they may have been considering their options with family members for weeks, so giving them just a few days to make decisions is not going to be enough.
Best practice: Build in a time frame that gives HR staff and employees the time they need. Benz recommended three weeks.
"People are always talking about learning from the best practices and success stories, but you can also learn a lot from other companies' mistakes," she noted. "When you prepare for enrollment in advance and anticipate issues—including those you and others have experienced in the past—you are better-equipped to avoid missteps. Your employees will notice and appreciate the extra effort."
Help Employees Ace Open Enrollment
"Open enrollment is often time-consuming and confusing for employees, but these choices can make a huge financial impact," said Julie Stich, CEBS, vice president of content at the International Foundation of Employee Benefit Plans, an association of benefit plan sponsors. She suggested that HR share the following advice with employees to help prepare them for the upcoming enrollment season:
- Take your time. Take time to really read through the enrollment materials you receive. If you are invited to a face-to-face meeting, make time to attend. It's possible you'll be offered different plan options and coverages this year. The better you understand the changes, the better decisions you'll make.
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Take a trip down memory lane. Think back to what happened in your life this year. How often did you and your family members need medical services? What kind? Are any treatments ongoing? Think about any life changes that could affect the benefits you need, like a marriage or divorce, a child going off to college, or a spouse changing jobs.
- Look ahead. Consider what the next year will look like for you and your family. Are you planning to have a baby? Knee replacement surgery? A root canal? Does someone need braces? New glasses? Keep this in mind as you look at your coverage options.
- Dive into the details. It's important to note whether the plans' provider networks have changed. Make sure your doctors are still in-network. Is your chiropractor also covered? Does the plan cover orthodontics? Is your spouse's daily prescription drug covered, and did the coverage change? Also consider areas of need like access to specialists, mental health care, therapies, complementary and alternative medicine, and chronic care. Look at the options offered in all plans, including health, dental, vision and disability.
- Get out your calculator. Add up the amount you'll need to pay toward your health premium plus deductibles, co-payments (flat-dollar amounts) for prescriptions and doctor office visits, and co-insurance (a percentage of the cost you'll pay) for services. Understand what you'll be asked to pay if you seek care outside your network. This will give you a clearer picture of how much you're likely to spend. The plan that looks to be the cheapest option may not really be the cheapest for you.
- Determine what's right for you. Consider your comfort level with risk. If you want your family to be covered for every eventuality, a more traditional plan, if one is offered, might be right for you. If you're comfortable taking on some upfront costs, a high-deductible plan with a lower premium ight be your plan of choice.
- Take advantage of extras. Your employer may offer the option to reduce your health premiums in exchange for your participation in a wellness program or health-risk assessment. It may match some or all of the money you save in your 401(k) plan. It might let you set aside tax-deferred money into a health savings account or flexible spending account. Also, check with your employer to see if it offers voluntary insurance with a group discount and payroll deduction for premiums—like critical-illness, pet, auto and homeowners coverage. If these options work for your situation, sign up.
- Ask questions. Don't be shy about asking your HR or benefits department to explain something if you're not sure. They're there to help and want you to make the best decisions for your situation.
"Taking the time upfront to carefully choose the best options will help employees better manage their finances throughout the year, alleviating stress and promoting productivity," Stich said.
SOURCE: Miller, S. (24 September 2019) "Simple Open-Enrollment Tips That Can Make a Big Difference" (Web Blog Post). Retrieved from https://www.shrm.org/ResourcesAndTools/hr-topics/benefits/Pages/simple-open-enrollment-tips-make-a-big-difference.aspx
‘Eye’ spy a savings opportunity for health and vision benefits
The National Eye Institute reported that 61 million adults are at high risk for serious vision loss. Conventionally, vision benefits were offered as an elective, with coverage is focusing on vision tests or discounts for corrective eyewear. Read the following blog post to learn more about vision benefits.
Sixty-one million adults are at high risk for serious vision loss, according to the National Eye Institute, but most U.S. employers don’t include eye care as part of their benefits package. Vision benefits have traditionally been offered as an elective, where coverage is focused on vision tests or discounts for corrective eyewear.
This often results in inadequate coverage for employees and dependents, which can result in unrecognized and untreated issues that impact employee health and productivity, as well as an employer’s bottom line.
Comprehensive eye exams are recommended for adults under the age of 65 at least every two years, according to the American Optometric Association (AOA). These exams are the only way a doctor can detect signs and symptoms of serious conditions without cutting into or scanning body parts.
The total economic burden of eye disorders and vision loss in the U.S. was $139 billion in 2013, which includes $65 billion in direct medical costs strictly due to eye disorders and low vision. Loss of vision among workers results in $48 billion in lost productivity per year.
When it comes to benefit management priorities employers often focus more on chronic condition management. Yet, eye health is often linked to common chronic conditions including diabetes and hypertension. Without early detection of eye and vision health issues, employees cannot properly manage these conditions. Delaying medical treatment can lead to increased absenteeism and reduced productivity, eventually resulting in treatment that comes too late, and at a much higher price tag for employers, employees and family members.
About 68% of Americans with diabetes have been diagnosed with eye complications, many of which could have been prevented through a comprehensive eye exam. Diabetes is the leading cause of blindness among adults, according to the National Institutes of Health. Its prevalence is increasing as one in 10 people worldwide may be affected by 2040, according to research from the International Diabetes Federation.
Nearly half of Americans don’t know that diabetic eye diseases have visible symptoms, according to a 2018 AOA survey. More than one-third of respondents didn’t know a comprehensive eye exam is the only way to determine if a person’s diabetes will cause blindness. These exams, considered the gold standard in clinical vision care, should be covered under the employees’ medical benefits.
Three years ago the Midwest Business Group on Health began a collaboration with the AOA to better understand how employers think about and implement eye health and vision benefits. As part of this partnership, a no-cost eye care benefits toolkit was developed to support employers in evaluating their current eye health and vision care benefits to:
- Understand the importance of early detection so that employees can effectively manage chronic and more serious conditions
- Recognize how to integrate primary and preventive eye care into an overall medical benefit design
- Educate employees on the importance of periodic eye examinations
It’s important that employers better understand the impact of vision care benefits, including lower costs, better employee health, improved job satisfaction, better employee quality of life, and work productivity.
SOURCE: Larson, C. (20 September 2019) "‘Eye’ spy a savings opportunity for health and vision benefits" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/vision-loss-resulting-in-billions-in-lost-productivity