Employee financial health connects to physical health
Did you know that there is a direct corelation between financial and physical health? This article from Benefits Pro is a great read explaining the link between an employee's financial and physical health by Caroline Marwitz
LAS VEGAS -- Are poor physical health and poor financial health connected? The benefits industry is making the link, if you consider how many deals between health-related benefits companies and retirement providers have occurred lately.
Obviously, the poor, at least in America, have a more fragile state of health than the more affluent. And as we age, the potential for unplanned health events to hurt us financially increases -- and that's important for retirement advisors and plan sponsors to remember. But what about your typical employees who are neither poor nor elderly?
A study in the journal Psychological Science looked at worker attitudes and actions to find out whether poor physical health and poor financial health might be linked, and how.
The researchers studied employees who were given an employer-sponsored health exam and were told they needed to change certain behaviors to improve their health. Which employees made the changes and who blew them off?
The researchers accounted for external factors such as different levels of income and physical health, and differences in demographics. Yet the results were still startling:
“Employees who saved for the future by contributing to a 401(k) showed improvements in their abnormal blood-test results and health behaviors approximately 27% more often than noncontributors did,” the researchers concluded in Healthy, Wealthy, and Wise: Retirement Planning Predicts Employee Health Improvements.
The employees who made the behavior changes to better their physical health were also the ones who were taking action to better their financial health.
Employee attitudes about the future and how much control they have over it affect whether they take care of their physical health and their financial health. That sense of control, or conversely, that feeling of no control, and thus, no investment in long-term results, is one reason why some employees might not participate in retirement plans, and, maybe, wellness and well-being programs.
What if, along with the retirement health-care cost calculators many retirement plan providers offer, there was a fatalism calculator too? That way you could see right away each person’s sense of control or feelings of inevitability about their future and help them more efficiently.
Because if someone is more fatalistic, telling them about their 401(k) match or pension options isn’t going to make them enroll in a retirement plan. Scaring them with statistics about the high costs of health care in retirement isn’t going to do the trick either. Instead, consider the following points for such employees:
- They can be helped to see that the future is a lot more unpredictable (and complex) than they realize, both negatively and positively.
- They can be helped to realize that even the smallest actions they undertake can have a big impact in the long term.
- They can be helped to understand that seemingly unobtainable goals can be broken down into steps and tackled bit by bit.
Look behind employee behavior for the unexamined biases and long-held assumptions that are causing it. If they can see that it’s not who they are that determines their future but what they do, it's a start.
See the original article Here.
Source:
Marwitz C. (2017 March 19). Employee financial health connects to physical health [Web blog post]. Retrieved from address https://www.benefitspro.com/2017/03/19/employee-financial-health-connects-to-physical-hea?ref=hp-top-stories
What it Takes to Make Good Decisions in the New World of Work
With many companies taking employee education and training into their own hands employers must be properly prepared for the changing future. Check out this great article from SHRM about what employers must do to keep pace in the ever evolving workplace by Ross Smith and Madhukar Yarra
We live in a world where phenomena such as the internet, globalization, social media, and mobility are accelerating change faster than ever before. Today’s digital age fed by big data is manifested in new businesses disrupting existing business models, which are remnants of the industrial era. These new models, typified by the Ubers, Amazons, Teslas, Airbnb’s and Facebooks of the world, are fossilizing the older generation of companies.
It is difficult for the education system to keep pace with this kind of change. The education system is a behemoth whose design is evolving to address the need for agility and speed. They change after the fact and therefore almost always take refuge in ‘best practices’. The MBA as we know it, has also fallen prey to this.
The MBA has been designed to provide a pool of mid-level managers for large corporations and questions arise about the future. Armed with an MBA, new hires walk into a large corporation with a desire to prove their worth through a strong knowledge of historical best practices. They may miss the value of ‘first principles’ thinking, and more often than not, face challenges to make an impact. Over time, this can create a disconnected or disillusioned workforce.
The question then becomes - if emerging and disruptive business models no longer subscribe to historical best practices, and by extension, to business schools, as their source for leadership, where should they look? What is that institution or model that allows individuals to build decision making capabilities in today’s world?
The reliance on irrelevant frameworks, outdated textbooks, and a historical belief in “best practices” all run counter to how a leader needs to be thinking in today’s fast paced digital world. There are no established best practices for marketing in a sharing economy or creating a brand in a digital world. The best practices might have been established last week. The world is moving fast, and leaders need to be more agile. Today, Millennials are leading teams, calling the shots in many corporations, which means that the energy created is one that leaves little time for rules and structures to effectuate and/or create impact. Making good decisions in today’s business world requires a new and different kind of thinking, and there are tactics that can help grow these new types of leaders.
Importance of questions: most leadership and business programs today evaluate and assess students based on answers, not the ability to ask good questions. Thoughtful and incisive questions lead to innovation and as business problems become more granular and interconnected, this skill will help leaders arrive at better decisions.
Experimentation over experts: Students are encouraged to seek “expert advice” rather than formulating their own hypotheses that can be tested as low cost experiments. While consulting with those who have walked the same path has its benefits, relying on the experiences of others may hinder growth, particularly when change is accelerating. The shift to globalization, digitization, social, and agile are changing rapidly, there is no “right answer”, so experimentation is a crucial skill.
Interdisciplinary perspective: Disciplines and industry sector models are glorified at a time when discipline barriers are being broken to create new ideas. A conscious intermingling of disciplines creates more fertile minds for innovative thoughts to occur.
In today’s management programs, outdated content and old-school delivery mechanisms are limiting students and businesses alike. There is a dire need to help business and young talent alike embrace a new art of problem solving, essential for the realities of today.
Many companies are starting to take education and employee training into their own hands. The advent of online courses, MOOCs, and other innovative programs in employee education are supplementing traditional education.
HR professionals can learn from companies who have set up their own deep technical training programs. With the work they do to augment decision science skills, Mu Sigma University is a great example of a modern day tech company, building skills across technology, business, analytics, and design. The workforce is changing. Many traditional jobs are being replaced with automation, robots, cloud-based machine learning services, and artificial intelligence – while at the same time, the demand for high end engineering, analytics, business intelligence, data and decision science is booming. Many companies, such as Mu Sigma, are spinning up advanced technical training investments to ensure their employees are equipped for a rapidly evolving future.
See the original article Here.
Source:
Smith R. & Yarra M. (2017 March 15). What it takes to make good decisions in the new world of work [Web blog post]. Retrieved from address https://blog.shrm.org/blog/what-it-takes-to-make-good-decisions-in-the-new-world-of-work
3 things managers can’t say after FMLA requests
Do you know which question you can ask any employee requesting FMLA leave? Look at this great article from HR Morning about what employers can and cannot say to an employee on FMLA leave Christian Schappel
You know when employees request FMLA leave, those conversations have to stick to the facts about what the workers need and why. The problem is, a lot of managers don’t know that — and here’s proof some of their stray comments can cost you dearly in court.
Three employers are currently fighting expensive FMLA interference lawsuits because their managers didn’t stick to the facts when subordinates requested leave.
Don’t say it!
The real kick in the pants: Two of the lawsuits were filed by employees who’d received all of the FMLA leave they requested — and the courts said the interference claims were still valid. How’s that even possible? Keep reading to learn about the latest litigation trend in the FMLA world.
Here’s what happened in each case (don’t worry, we’ve cut to the chase in all of them) — beginning with the words/phrases managers must avoid when a worker requests leave:
No. 1: ‘We expect you to be here’
James Hefti, a tool designer, was in hot water with his company, Brunk Industries, a metal stamping company.
Reason: Let’s just say he called a lot of people at work “my b____.”
After he ignored multiple warnings from management to stop using obscenities at work, the company planned to fire him. But it didn’t pull the trigger immediately.
Then, just prior to his termination, Hefti requested FMLA leave to care for his son, who was suffering from various mental health problems.
His manager, upon hearing of Hefti’s request, told him Brunk paid for his insurance and thus expected him to be at work.
When Hefti was fired a few days later, he sued for FMLA interference.
The company tried to get the suit thrown out, claiming his conduct and ignorance of repeated warnings gave it grounds to terminate him. But it didn’t win.
The court said the manager’s interactions with Hefti did raise the question of whether he was fired for requesting FMLA leave, so the judge sent the case to trial.
Cite: Hefti v. Brunk Industries
No. 2: ‘It’s inconsiderate’
Lisa Kimes, a public safety officer for the University of Scranton’s Department of Public Safety, requested FMLA leave to care for her son, who had diabetes.
Kimes was granted all the time off she requested. But in a meeting with her supervisor she was told that since the department was short staffed it was “inconsiderate” of her to take time off.
When her relationship with the department soured, she sued claiming FMLA interference.
The department tried to get her suit tossed before it went to trial. It had a seemingly reasonable argument: She got all of the leave she requested, so it couldn’t have interfered with her FMLA rights.
But Kimes argued that her supervisor’s comments prevented her from requesting more FMLA leave – thus the interference lawsuit.
The court sided with Kimes. It said she had a strong argument, so the judge sent her case to trial as well.
Suit: Kimes v. University of Scranton
No. 3: ‘I’m mad’
Judy Gordon was an officer with U.S. Capitol Police when she requested intermittent FMLA leave for periods of incapacitating depression following her husband’s suicide.
But before Gordon used any FMLA leave, a captain in the police department told her that an upper-level manager had said he was “mad” about FMLA requests in general, and he’d vowed to “find a problem” with Gordon’s request.
Then later, when she actually went to take leave, her manager became irate, denied her request and demanded a doctor’s note. He later relented and granted the request.
In fact, she was granted all the leave she requested.
Still, she filed an FMLA interference suit. And, again, the employer fought to get it thrown out before a trial on the grounds that Gordon had no claim because all of her leave requests were granted.
But this case was sent to trial, too. The judge said her superiors’ conduct could have a “reasonable tendency” to interfere with her FMLA rights by deterring her from exercising them — i.e., the comments made to her could’ve persuaded her not to request additional leave time to which she was entitled.
Suit: Gordon v. United States Capitol Police
Just the facts, please
Based on a thorough read-through of the court documents, each of these employers appeared to have a pretty good chance of winning summary judgment and getting the lawsuits thrown out before an expensive trial — that is, if it weren’t for the managers’ stray comments in each.
These cases have created two important teaching points for HR:
- Courts are allowing FMLA interference claims to be made if it appears an employee may have been coaxed into not requesting leave he or she was entitled to, and
- You never know when a stray remark will come back to bite you.
The best way to stay safe: Re-emphasize that managers must stick to the facts when employees request FMLA leave, as well as keep their opinions and other observations to themselves.
See the original article Here.
Source:
Schappel C. (2017 March 17). 3 things managers can't say after FMLA requests [Web blog post]. Retrieved from address https://www.hrmorning.com/3-things-you-cant-say-after-fmla-requests/
The benefits of financial wellness counseling
Are your employees being properly educated on the benefits on their financial well-being? If not take a look at this article from Benefits Pro about the value of educating your employees in financial wellness by Jack Craver
Money Management International, a nonprofit credit counseling organization, is touting the results of a recent survey it conducted as evidence that employers can significantly reduce stress among their employees by offering them financial counseling resources.
MMI announced recently 86 percent of the 150 employees it provided financial counseling to at an Oregon-based nonprofit health agency say they have less stress related to money as a result of the counseling.
In addition, most of the employees at Samaritan Health Services say the counseling led to them achieving certain financial goals, such as reducing debt (60 percent), setting aside more money for retirement (38 percent), boosting their credit score (30 percent) or buying a home (8 percent).
"At MMI, we know that financial coaching, counseling, and education work, but seeing the incredible, positive impact this program has made on the financial outlook of these clients is simply amazing,” says Julie Griffith, Mapping Your Future account manager, in a statement accompanying the study’s release.
Other research has shown employers are increasingly viewing financial counseling as a key component of wellness initiatives due to the significant psychological and emotional toll money-related anxiety takes on employees.
In addition to causing depression, sleep deprivation and all sorts of health problems that reduce an employee’s productivity, financial stress often distracts employees from their work. A survey last year showed that 37 percent of U.S. employees report spending time on the job thinking about or dealing with personal finances.
The awakening to the importance of financial wellness coincides with a number of studies which shed light on young Americans’ lack of savings. One study found a solid majority of Americans have less than $500 in savings. Another found that the U.S. personal savings rate was just 5.7 percent, roughly half of what it was 50 years ago.
See the original article Here.
Source:
Craver J. (2017 March 08). The benefits of financial wellness counseling [Web blog post]. Retrieved from address https://www.benefitspro.com/2017/03/08/the-benefits-of-financial-wellness-counseling
Why employers should rethink their benefits strategies
Has your employee benefits program grown old and stale? Take a look at the great article from Employee Benefits Advisors about the benefits of upgrading your employee benefits to match your employees' needs by Chris Bruce.
Historically, employee benefits have been viewed as a routine piece of the HR process. However, the mentality of employees today has shifted, especially among the growing population of millennial employees. Today’s workforce expects more from their employers than the traditional healthcare and retirement options, in terms of both specific benefit offerings and communications about those offerings.
For companies, it’s critical they address the evolving needs of their workforce. With unemployment rates plunging to their lowest levels since before the financial crisis, the search for talent is heating up, and organizations need to work harder than ever to retain top talent in a competitive job market. To do this, I see three steps that organizations need to take when rethinking their benefits strategy and engaging with employees: embrace a proactive rather than reactive benefits strategy, think digital when it comes to employee communications and consider the next generation of employee benefits as a way to differentiate from the competition.
1. Reconsider your benefits evaluation process
The benefits process at most companies is reactive — executives and HR only look to evaluate current offerings when insurance contracts expire or a problem emerges. When the evaluation does happen, the two factors that often concern employers the most are product and price. Employers often gravitate toward well-known insurers that offer the schemes that appear familiar. However, this can often lead companies to choose providers who fall short on innovation and overall customer experience for employees.
This approach needs to be flipped on its head. Companies should be proactive in determining which benefit schemes best meet the needs of their workforce. The first step is going straight to the source: talk to employees. Employers can’t know what benefits would be most appealing to their employee base unless they ask. By turning the evaluation process to employees first, companies can better tailor new benefits to meet the needs of their workers, and also identify existing benefits that might be outdated or irrelevant, therefore saving resources on wasted offerings.
Data and analytics also are playing an increasing role across the HR function, and benefits is no exception. By leveraging technology solutions that allow HR to track benefits usage and engagement, teams can better determine what is resonating with employees and where benefits can be cut back or where they should be ramped up.
2. Put down the brochure and think digital engagement
Employee education is another area of benefits that can often perplex companies. According to a recent survey from Aflac, half of employees only spend 30 minutes or less making benefit selections during the open enrollment period each year. This means employers have a short window of time to educate employees and make sure they are armed with the right information to feel confident in their benefits selection.
To do this effectively, HR needs to move past flat communication like brochures, handouts and lengthy employee packets and look for ways to meet employees where they live — online. By testing out innovations that create a rich experience, while still being simple and intuitive, employers can grab the attention of their workforce and make sure key information is communicated. For example, exploring opportunities to create cross-device experiences for employees so they can interact on-the-go, including augmented reality applications or digital interactive magazines. Additionally, for large corporations, hosting a virtual benefits fair can provide a forum for employees to ask questions in a dynamic setting.
3. Embrace the next-generation of benefits
As organizations become more savvy and nimble, personalization will have a huge impact in encouraging employee engagement and driving satisfaction among today’s increasingly diverse workforce. We have already started to see some companies embrace this new approach to benefits, adding out-of-the-box items to normal offerings — from debt consolidation services and wearable health tracking technology to genome testing and wedding concierge services.
The fact is, the days of “status-quo” benefits are gone, and employees today want benefit options that match their current life circumstances. To best engage employees, organizations need to be proactive in evaluating benefits regularly and using analytics to track usage, identify opportunities to implement digital communication elements and look for ways to introduce new benefits to meet the needs of their employee base. By following these steps, organizations can gain a competitive edge when it comes to attracting and retaining top talent.
See the original article Here.
Source:
Bruce C. (2017 March 10). Why employers should rethink their benefits strategies [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/opinion/3-steps-employers-can-take-to-rethink-benefits-strategy?feed=00000152-1377-d1cc-a5fa-7fff0c920000
Progressive benefits are the lure for new talent
There are many different ways to attracted new talent to your workplace. Take a peek at this freat article from Employee Benefits Advisors about which benefits are best for attracting new talent by Paula Aven Glagych
Live trees indoors, pets at work and an in-office happy hour. Underground Elephant is very forward-thinking when it comes to how it treats its employees and the benefits it offers.
From its fun headquarters space in the east village of San Diego to its outside-the-box thinking on workplace benefits, the digital marketing company “wants to really create an environment where employees want to come to work every day and feel like they are being rewarded,” says Amy Zebrowski, HR business partner at Underground Elephant. “It is a very challenging and fast-paced environment.”
Underground Elephant, which was founded in 2008, provides marketing and technology services to financial service and insurance companies. It offers staffers healthcare and retirement benefits but wanted to show them that it is invested in their education and their family’s education by offering a choice between three non-traditional benefits. People who have worked for the company for one year can choose between a student loan repayment program through Student Loan Genius; a 529 college savings plan through Gradvisor; or $2,000 in company stock options.
If they choose the student loan or college savings plan options, Underground Elephant will contribute $1,500 a year to the program.
Gradvisor founder and CEO Marcos Cordero had wanted to offer a student loan reimbursement program for a couple of years. The company hires many entry-level employees straight out of college, trains them and helps them build their careers at the company.
“We know a lot of employees with student loan debt. We wanted to help them address that and support their financial wellbeing. We didn’t want to exclude employees who don’t have student loans. Our goal was to create a more inclusive program,” Zebrowski says.
Student Loan Genius’ platform allows employees to explore different loan repayment options and to find the one that best fits their situation. Employees can also have their student loan payments taken directly out of their paycheck each month.
The Gradvisor 529 college savings plan helps parents and grandparents save money for future educational expenses.
The cost of college
Cordero says that his 529 platform is popular because recent Gallup data shows that “for employees with children under 18, this is their number one financial concern. It supersedes retirement and unexpected medical bills.”
He added that the cost of college is rising faster than any other expense in the home and millennials, in particular, are feeling the pinch. Many of them left college with huge student loans and they want to make sure their children don’t fall into the same trap. Baby Boomers are also intrigued by the 529 plan because they have “more disposable income to help grandchildren save for college,” Cordero says.
He believes that this benefit will continue to grow over the next decade, but currently “more employers offer pet insurance than college savings.” That is in large part due to the state-by-state complexity of the programs. Each state offers a different 529 plan.
The Gradvisor platform takes into consideration an employee’s risk tolerance, financial situation and household tax filing when determining the best 529 plan for them. The company serves as a fiduciary so it takes “all of those inputs and recommends the most suitable and best fit investment option and asset allocation for the client. We don’t get any commissions or sales charges from the 529 plan. Our advice is 100% objective,” he says. Companies pay to offer the program on a per user per month basis.
“If you look at our stats, our customers tend to save earlier. We’re rolling out this really intuitive step-by-step platform that takes a lot of that fear or intimidation away,” Cordero says.
The average parent who takes advantage of Gradvisor starts saving when their child is five years old, compared to seven in the general population, which adds a couple more years of compounded growth. They also save twice as much as the average person.
Both the student debt repayment and college savings benefits programs were introduced to the company’s employees in January for implementation in March.
“The response has been great. All of our employees are excited about it. It can be a huge help with financial expenses if you are paying toward a student loan it is reducing the overall interest of the life of the loan. Overall it is very positive,” Zebrowski says.
The company’s primary goal in offering these three benefits was to retain good employees and to “show we are invested in their education and their family’s education and financial wellness,” she says.
Based on the company’s younger employee base, there are more participants in the student loan program, but there’s also a lot of interest in the 529 plans.
“I think a lot of people are conscious of the future and saving for families down the line. We’ve had a good response to both,” Zebrowski says.
The company offers a 1% employer match on all employee contributions to its 401(k) plan. The company employs 55 people currently and has been listed as one of the fastest-growing companies in its industry.
The benefit of perks
Underground Elephant wants to be innovative with its benefits because California’s tech industry is very competitive. Many people want to live in San Diego, so “attracting talent, in addition to that retention piece, that certainly factors in,” she says.
The company’s new headquarters building is unique in that it has live trees in the middle of the work space.
“The idea is to make it more open to give people the feeling of being connected to the outdoors,” she says. It has pool, ping pong and is setting up a new game room so employees can get together and have fun. It also has an onsite bar where the company offers regular happy hours.
Employees can bring pets to the office and it has a snack area where the company provides breakfast or lunch once a week.
For the past couple of years, the company has participated in a forum program where the company is divided into groups of eight to 10 employees and these groups participate in challenges throughout the year, including cultural challenges, scavenger hunts, community and charitable events.
“Each year we reevaluate our cultural programs to see what is working and what isn’t working; what people enjoy. The goal is to create as much engagement as possible,” she says.
Underground Elephant offers a full suite of health benefits, including full medical, dental and vision, long and short term disability and voluntary life insurance.
“We want to prepare people for success here or outside the company. Ultimately, the goal is to give people the skills and experience to promote within Underground Elephant or to transfer to other jobs as well,” she says. “Our people tend to be very successful.”
See the original article Here.
Source:
Glagych P. (2017 February 28). Progressive benefits are the lure for new talent [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/progressive-benefits-are-the-lure-for-new-talent?feed=00000152-1377-d1cc-a5fa-7fff0c920000
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/
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
9 questions employees have about ACA – and how to answer them
Have your employees been asking more questions about the ACA? Check out this great article from HR Morning about some of the question your employees might ask and how to answer them by Christian Schappel
Even under the Trump administration, the Affordable Care Act (ACA) is still a real, enforceable law. You already know this. But do all of your employees?
Chances are, once employees start getting their ACA-mandated 1095 forms from you in the next few weeks, some of them are going to have questions — à la: What is this? I thought Trump did away with Obamacare.
Here are some of the questions employees are asking — and are bound to ask — along with how HR can answer them:
1. Didn’t Trump repeal Obamacare?
No. While he has promised to “repeal and replace” the ACA, all he has done so far is sign an executive order that directs federal agencies to grant certain exemptions from the law, as well as waive any requirements that they’re able to by law.
Surely, the executive order will eventually weaken some parts of the ACA — and maybe even lead to some repeals — but nothing concrete has happened yet. As a result, employers still have to comply with the “play or pay” mandates, and individuals still have to carry health insurance or risk penalties.
2. Didn’t Republicans in Congress start repealing the law?
No. Republicans in Congress don’t have the votes they need to repeal the ACA outright. They can’t avoid a Democratic filibuster.
As a result, what they have done is state their intention to attack the law through a process known as reconciliation. It’ll allow Republicans to vote on budgetary pieces of the law — like the individual mandate (which is imposed with a tax) and healthcare subsidies — without giving the Democrats a chance to filibuster.
The problem for Republicans, though, is that reconciliation limits how they can reshape (or repeal) Obamacare.
3. Then when will Obamacare be repealed?
All you can tell employees right now is that it hasn’t happened, and there is no clear answer on when (or even if) it will happen in its entirety.
However, Republicans recently made two things clear at its recent annual retreat in Philadelphia:
- They plans to use the reconciliation process to “repeal and replace” parts of the law.
- The GOP will bring a final reconciliation package to the floor of the House of Representatives by late February or early March.
Chances are, we’ll find out more once Trump’s cabinet picks — specifically his pick to lead the Department of Health and Human Services — have been confirmed.
4. If I have a pre-existing condition, will I have trouble finding a health plan?
President Trump, as well as Republicans in Congress, have stated their intentions to attempt to keep two popular requirements of the ACA in place:
- The need for insurance companies to offer coverage to individuals with pre-existing conditions.
- The ability for children to be able to stay on their parents’ health plans until age 26.
Form 1095 questions
5. What is this form?
Form 1095 is a little like Form W-2: The employer or insurer sends one copy to the Internal Revenue Service (IRS) and one copy to the employee. It describes whether the person obtained the minimum required level of health insurance under the ACA in 2016.
It also informs the IRS, and the employee, if the person was eligible for a premium tax credit in 2016.
6. If Obamacare is going to be repealed, do I still need this form?
Yes. The reason is because the ACA was in effect for all of 2016, and this form is for reporting information that reflects what happened in 2016.
7. What do I have to do with it?
In most cases, no action will be necessary. When filing taxes for 2016, individuals will be asked if they obtained minimum insurance coverage. This form will help individuals answer that question.
8. Do I have to wait to receive the form to file my taxes?
Again, in most cases, the answer is no. Only those who received insurance via an exchange or the “marketplace” will have to wait for their 1095 to file their taxes.
If a person received insurance through an employer, that person doesn’t have to wait for Form 1095 to file his or her taxes, assuming the person already knows whether or not they had minimum coverage throughout the year. In that case, the person can just keep the form for their records.
If a person’s unsure whether he or she had minimum coverage for the entire year, that person can wait for the form to file their taxes or ask their employer whether he or she had minimum coverage.
9. How will I receive the form(s)?
Individuals may receive their form(s) in one of three ways:
- hand delivery, or
- electronically (if they have consented to receive it electronically).
See the original article Here.
Source:
Schappel C. (2017 February 1). 9 questions employees have about ACA- and how to answer them [Web blog post]. Retrieved from address https://www.hrmorning.com/employee-questions-aca-obamacare-repeal-answers/