Wednesday, December 31, 2008

Tip of the Day: Pass along Fidelity's retirement resolutions

Fidelity has released new year’s retirement savings resolutions for people in three different age brackets— 25-35, 36-54 and those 55 and older, reports EBN sister title Money Management Executive.

As the New York Lottery slogan goes, “You have to be in it to win it,” and this, certainly, is the foremost message for young investors age 25-35: Enroll and contribute to your workplace savings plan. Underscoring how important this is, Fidelty found that only 47% of those polled are investing in their 401(k).

Second, Fidelity calls upon young people to develop a plan to reach their goals. Only 25% of those polled had done so.

Third, Fidelity calls upon people to open and contribute to an IRA (20% of responding workers have done this).

For those age 36 to 54, Fidelity advises monitoring and rebalancing portfolios at least once a year. (Only 25% have done so.) Following this, it’s wise to catch up and/or max out on retirement savings vehicles, particularly as income rises, but only 19% are doing so, the firm reports. In 2009, workers age 50 and older will be able to contribute an additional $5,500 a year to their 401(k) and an additional $1,000 to their IRA.

Third for middle-aged people, Fidelity suggests simplifying and consolidating rollover assets into one IRA, although only 11% of respondents have done this.

Lastly, for those people age 55 and over who are nearing retirement, Fidelity’s first guideline is to plan to wait until at least age 62 to begin taking out Social Security payments and Medicare. This age group also needs to focus on creating a retirement income plan (only 26% have done this) and researching long-term care insurance needs (a mere 15% have).

“Creating an income plan that manages risks, such as longevity, market volatility and rising healthcare costs, is critical, as the median retirement savings of an American household is $22,500 and is on track to replace only 58% of pre-retirement income,” Fidelity said.

“The New Year offers investors an opportunity to take better control of their finances and stay on track throughout 2009,” suggested Fidelity Executive Vice President Carolyn Clancy. “These resolutions offer investors very specific steps to consider that can provide more financial discipline and better prepare them for retirement.”

News You Can Use: Specialty drugs driving Rx cost increases

A report from Haldy McIntosh and Associates for Medco finds 60% of plan sponsors believe that specialty medications are the leading driver of spending growth. This is a sharp increase over last year's survey, where only 25% of respondents shared this view.

To help curb rising costs, plan sponsors are considering programs like pharmacogenomics (personalized medicine, in plain English). Such programs include genetic testing to find how an individual will metabolize a drug to ensure it is prescribed in the right dose.

Other cost-cutting strategies are more conentional, with 65% of organizations offering a wellness management program, 70% a disease management program 46% planning to increase cost sharing over the next 18 months.

Click here to read EBN coverage of how one employer brought specialty pharmacy costs under control.

Tuesday, December 30, 2008

Tip of the Day: Make 'SMART' new year's resolutions

People typically have well-meaning aspirations when it comes to setting their New Year’s resolutions. Actually sticking to those resolutions is of course more difficult. The personal health coaches at Gordian Health Solutions are sharing their tips for keeping 10 common new year’s resolutions. According to Gordian, it is important to make “SMART” resolutions (Specific, Measurable, Achievable, Rewarding, Timely).

Their list for making 10 SMART-er resolutions:

1. “Start working out." Make the action steps more specific, like, “I will walk on the treadmill for 30 minutes, three to four times a week” or “I will wear a pedometer to work.”

2. “Lose weight” or “Lose 30 pounds.” Make your goal more achievable and timely, like “I will lose 5 pounds by the end of the month.” Then come up with action steps involving nutritional changes, exercise, etc.

3. “Eat better.” Change your thinking from, “I’m going on a diet,” to “I’m making lifestyle changes to improve my eating habits.” Consider keeping a food journal to find specific areas you can change. Specific action steps could be limiting sweets and fast food and eating more fruits and vegetables.

4. “Quit smoking.” Set a realistic quit date. Make sure you're not setting yourself up to fail by trying to quit during a stressful time. Talk to your doctor and consider using nicotine replacement therapy such as nicotine patches, gum or medications. Clear your home of all smoking-related paraphernalia (cigarettes, lighters, ashtrays). Set action steps to reduce tobacco intake slowly, like “I will cut back by one cigarette per day over the next week.” Also think about a plan to deal with cravings and challenging situations.

5. “Reduce stress.” Identify and write down your stressors. Identify positive steps you can take when feeling stressed and what sources of support you have. A realistic action step might be something like, “During times of stress, I will practice deep breathing techniques, write in a journal or go for a walk to clear my head.”

6. “Give up fast food.” It is not always possible for some people to give up all fast food, so begin by familiarizing yourself with the healthier options on fast food menus. Try using restaurants’ websites to look up nutrition information, or pick up nutrition pamphlets inside restaurants.

7. “Stop drinking soda.” It may not be realistic to cut out all soda at once. Think about ways to decrease the amount of soda you are drinking. For example, try mixing diet soda into regular to cut the calories, or try substitutions like flavored water, unsweetened tea or green tea.

8. “Drink more water." Set realistic, specific steps like, “I will get a water bottle to carry with me” or “I will replace high-calorie beverages with water or flavored water.”

9. “Get more sleep.” Set a specific bedtime, and stick to a consistent schedule to get your body adjusted. Families with children can especially benefit from having a consistent routine for getting to bed at the same time each night.

10. “Cut back on alcohol.” Quantify how much alcohol you are drinking now. Decide what might be a realistic amount to cut back to. For example, if you typically drink six or eight beers, limiting yourself to two beers might be your goal. If needed, devise a step-by-step plan with action steps like, “I will remove alcohol from my home” or “I will avoid situations where alcohol will be served.” Identify supportive people or join a support group.

News You Can Use: Recession to affect workers more deeply

The ongoing recession already has affected employees, as the number of employers implementing layoffs and hiring and salary freezes has risen sharply in the last two months, according to a new survey from Watson Wyatt, and the cuts likely will continue into next year, the consulting firm finds.

Watson Wyatt reports that 23% of employers plan to make layoffs in the next 12 months, and an additional 18% are planning a hiring freeze over the same period.

“As the economic downturn has both broadened and deepened, companies in almost every industry can no longer stay the course,” says Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. “The need to contain costs has resulted in stronger measures that are ultimately affecting more workers.”

Among the other cost-cutting measures employers have planned over the next 12 months to survive the recession:
* Organization-wide restructuring 21%
* Eliminate/reduce training 18%
* Raise employee contribution to health care premiums 17%
* HR function restructuring 21%
* Salary freeze 19%
* Reduce/eliminate other employee programs 12%
* Salary reductions 6%
* Reduce employer 401(k)/403(b) match 7%

Findings show that almost two-thirds of companies have already taken five or more of the actions above.

“All indications are that 2009 will be a difficult year for both companies and ultimately employees,” said Sejen. “It will be up to employers to find an effective way to manage this challenge by balancing their financial situations with the likely impact on employee engagement.”

Monday, December 29, 2008

Tip of the Day: Get those SSNs to CMS

Effective Jan. 1, employers will be required to submit to the Centers for Medicare and Medicaid Services Social Security numbers for covered workers and dependents to comply with a new federal mandate. You've been hearing about this for months, but if you're like us, there's no time like the last minute! Your health insurance carrier likely has already buzzed you about collecting the information.

Among the 411 you'll need to provide:
Tax ID number
Total number of full-time and part-time employees (even those not enrolled in your health plan)
Social Security Number (SSN) for employees and dependents enrolling in new plans as of Jan. 1, and for all plan members by Jan. 1, 2010

Got questions? Click here for a document that should help. If it doesn't, there's still stime to contact CMS. Click here to submit a question.

News You Can Use: Employers make revamping reitree medical a resolution for 2009

A new survey from ISCEBS and Towers Perrin indicates that employers are considering bold changes in 2009 to rein in retiree medical costs.

With more than 70% of respondents still offering retiree medical benefits to current retirees and some active workers, cost increases -- compounded by the current recession -- are a significant force influencing change in their programs to offload trend risk and begin to distance themselves from plan sponsorship and administration.

For pre-65 retirees, employers continue to wrestle with difficult challenges given the lack of access to affordable individual insurance for this high-cost population. The absence of affordable company-sponsored pre-65 coverage means that many older employees will delay retirement, presenting another significant workforce issue for employers. Although about two-thirds of respondents subsidze between 40% and 80% of plan costs, employers increasing are capping their benefits, with 48% of employers reportung such a cost cap, up from 43% last year.

While only 7% of employers have ceased financial support for pre-65 coverage in the past two years, 42% have either changed or plan to change cost-sharing between company and retiree. As part of this shift, a 34% of employers have introduced, or plan to introduce, HSAs to retirees as a means to promote tax free retiree medical savings.

For post-65 retirees, financial pressures on employers and retirees are similar to those for pre-65 retirees. Many employers (60%) who have capped their subsidy report plan costs in excess of the cap. Almost 40% have or will recast cost-sharing terms with post-65 retirees, and almost 20% have ceased – or plan to cease – providing any post-65 financial support at all.

Click here for extended coverage in the Sept. 1 and November issues of EBN about employers' strategies for retiree medical benefits.

Monday, December 22, 2008

Programming note: Daily Diversion takes holiday hiatus

The Daily Diversion will take a much-needed holiday break Dec. 22-Dec. 26. New posts will resume Monday, Dec. 29. The EBN/DD staff wishes all readers a safe and happy holiday season.

Friday, December 19, 2008

Wish You Were Here: Make your company stand out to new grads

Research from TMP Worldwide has tapped into what new grads want from a job. Despite the recession and a corporate environment where layoffs abound, "just lucky to have a job" is not an attitude young workers appear willing to take. On new grads' list of "never, ever will I ever" job points, according to the survey:

71% won’t compromise on training.
52% won’t accept a job with poor work-life balance.
31% refuse to accept a lower starting salary.
33% would not relocate for a job.

To help your company, benefits package and employee communications attract and retain young workers, see extended coverage in EBN:
- Leveraging Blackberries and buzzwords
- "Five Minutes With ..." podcast with Tim Vigue on Gen Y retention
- EBN Web exclusive: What sets your Gen X and Y employees a-Twitter?
- Young even more restless than imagined

Tip of the Day: Do due diligence on outsourcing locations

New research from Black Book Research and Brown-Wilson Group ranked the safest and most dangerous offshore locations, Workforce Management reports. Employers with international operations and looking to outsource jobs or entire business units will want to do their homework to make sure the location they select is safe for their employees and makes the best business sense.

According to the survey, the most dangerous outsourcing locations are Jerusalem, Israel; Mumbai, India; Rio de Janeiro/Sao Paulo, Brazil; Manila/Cebu/Makati, Philippines; and Delhi/Noida/Gurgaon, India. Singapore; Dublin, Ireland; Santiago, Chile; Krakow/Warsaw, Poland; and Toronto were ranked the safest.

News You Can Use: Obama taps Solis to lead DOL

Rep. Hilda Solis, (D-Calif.), is President-elect in Barack Obama’s pick for Secretary of Labor, he will announce in a news conference today.

"We're thrilled at the prospect of having Representative Hilda Solis as our nation's next labor secretary," John J. Sweeney, president of the AFL-CIO, told the New York Times. "We're confident that she will return to the Labor Department one of its core missions: to defend workers' basic rights in our nation's workplaces. She's proven to be a passionate leader and advocate for all working families."

If approved by Congress, Solis will oversee an agency responsible for regulating nearly 700,000 retirement plans and 2.5 million health plans. However, some in the business community fear that her support for the Employee Free Choice Act and her position on free trade will further impede businesses to compete in a global economy.

Randel K. Johnson, vice-president of labor policy at the U.S. Chamber of Commerce, told the New York Times he is disappointed having "expected Obama to pick someone supported by the A.F.L.-C.I.O. She's not a pick whose philosophy we didn't expect. We will disagree with her on some issues and work with her on some."

News You Can Use: Employers put skilled talent on holiday wish lists

In a recent Watson Wyatt Workforce Planning Survey, almost two thirds (71%) of employers cite scarcity of talent as the biggest challenge impeding their business strategy. Other major concerns include restructuring (42%) and layoffs or hiring freezes (20%).

For employers who are most worried about bringing in new talent, 50% plan to continue replacing talent in all positions, while 33% will scale-back talent replacement across the organization and 21% will hire replacements only for critical jobs. Three percent of employers will not be replacing talent in the near future.

On the other side of the spectrum, attracting talent is equally difficult as 77% of employers report challenges in enticing critical-skill employees and 60% named top performers as a hard commodity to obtain. In terms of retaining their employees, less than half (49%) were having trouble keeping critical-skill employees within the company and 34% had the same problem retaining top performers.

Watson Wyatt’s Workforce Planning Survey was conducted in October 2008 and compiles responses from 129 North America-based employers across a variety of industries.
--Kathleen Koster

Thursday, December 18, 2008

Overheard @: SHRM's Schramm forecasts 2009 trends

Jennifer Schramm, manager of workplace trends and forecasting at the Society for Human Resource Management, offers insights into the top workplace trends, based on SHRM’s survey data. For more complete survey results, read "Seeing around the curve," in this month's EBN.

Tip of the Day: Measure your disease management provider satisfaction

A new survey tool from DMAA allows employers, health plans, disease management companies and other stakeholders to better understand providers' experiences with and attitudes toward population health improvement programs. The organization developed the tool because the "success of disease management, wellness and other population-based interventions can depend on the satisfaction of providers, who play an important role by referring patients and managing and coordinating patient care."

A recent DMAA survey shows that physician engagement was ranked among the three strongest determinants of program success."The better we understand provider attitudes toward population health management, the better able we are to make program changes that enhance that relationship and improve patient care," says DMAA President and CEO Tracey Moorhead. "Health care purchasers value patient and provider satisfaction. Our survey provides a simple, validated tool to measure that."

The tool is available for free at DMAA's Web site. Click here to download it.

News You Can Use: U.S. offers lowest severance worldwide

As the number of layoffs nationwide mounts higher, it seems employees who are terminated aren't walking away with much. According to survey by Right Management, U.S. employers offer the lowest amount of severance regardless of seniority and/or tenure.

Studying 28 countries, Right Management finds even top execs leave with as little as 2.76 weeks of severance per year of service, compared to an average 3.39 weeks per year of service for other countries.

Wednesday, December 17, 2008

Overheard @: Don't be socially awkward

Get LinkedIn on how from Facebook to Sharepoint, social networking has employees all a-Twitter. Learn how to leverage such sites to enhance your benefits communications in a "Five Minutes With ..." podcast with Watson Wyatt's Michael Rudnick.

Also, see the article in this month's EBN.

Tip of the Day: Get a handle on preventing corporate theft

Apparently driven to desperation by the recession, more employees are stealing from the company cookie-jar, according to a recent study by the Institute for Corporate Productivity (i4cp), which found that 15% of employers have noted an increase in office crime spurred by the economic crisis.

In recent months, nearly a quarter (24%) of all company employers and one-third (31%) of officials from large companies saw an increase of theft of office supplies, company products, electronic equipment, food and other company-owned items. Most serious is the 18% of employers overall and 22% of large businesses that have noted an increase in employee-related monetary theft -- such as padding expense reports or disappearing cash.

Employers hope to offset internal criminal activity with employee communication, a strategy utilized by 28% of all study participants and by 38% of large business representatives. Twenty percent are conducting additional audits (25% in large companies), and 19% of companies overall are paying more attention to background checks for prospective new hires.
-- EBN Associate Editor Kathleen Koster

News You Can Use: Employers move away from company stock

In a new research paper, the Bureau of Labor Statistics finds the amount of 401(k) assets employee-investors have in company stock is dwindling and has been steadily for the past two decades.

According to BLS, the "steady increase in the percent of participants who have investment choices for both employee and employer funds, and the steady decrease in the percent who may choose employer stock as one of those options, reflect both changes in law and regulation, concerns based on high-profile plans, and an increase in investment education among employers and employees."

Tuesday, December 16, 2008

Overheard @: The lowdown on the mental health parity law

Kelly Traw, a principal at Mercer, discusses how employers will have to redesign their health benefits to reflect the new Mental Health Parity and Addiction Equity Act.

For more, see an article about the law in the December EBN.

News You Can Use: Merrymaking seems recession-proof

Most companies haven’t lost their holiday spirit in the wake of a difficult financial year. About 71% of employers will continue their plans for a holiday party for employees this year, according to a Hewitt survey of more than 160 employers.

Among the 42% of companies offering holiday bonuses this year, 52% will provide them in cash, spending an average of $863 per employee. Forty-two percent will give gift cards or gift certificates averaging $76 per person, and 16% will give food, Hewitt reports.

Tip of the Day

Add this number to your speedial: 888-657-0440.

That's the toll-free retirement plan helpline recently launched by Bukaty Companies Retirement Plan Services to help plan sponsors understand their fiduciary responsibilities in light of the recession.

"Anyone who has responsibility for managing a qualified retirement plan should be seeking professional advice. The uninformed are at real risk if they are not carefully managing fiduciary obligations," said division Vice President Vince Morris.

Sponsors can call Monday through Friday from 8:00 a.m. to 5:00 p.m., CST, or e-mail questions to

Programming note: SPARK to host 403(b) webcast

The SPARK Institute has scheduled a webcast, “403(b) Information Sharing: Common Remitter Issues,” for Friday, Dec. 19 at 12 p.m. EST. The event will include a presentation and Q&A session with experts who developed the common remitter aspects of the organization's 403(b) Plans Information Sharing Best Practices to help plan sponsors comply with IRS regulations that are effective on January 1, 2009 .

The panel will review the best practices for remitting census data and will answer questions regarding the roles and responsibilities of employers, employer representatives and vendors. The Best Practices were developed 2009.

Speakers include Paul Jackson, Vice President-Institutional Services at AIG Retirement, James Racine, Assistant Vice President, Lincoln Financial Group and Ralph Sanna, Director-Strategic Initiatives for TIAA-CREF. For further details, visit or call 860-658-5058.

News You Can Use: Retirement plan sponsors consider new strategies

In response to the recession, employers are considering changes to their retirement plan strategies, according to a new Mercer survey, "Leading Through Unprecedented Times."

Among the possible shifts, 17% of retirement plan sponsors are considering doing suspending their 401(k) match, 77% plan to review investment and administrative fees, 85% will likely enhance employee education and communication and 75% will revisit fund lineups.

On the defined benefit side, 46% of respondents plan to change investment strategies to reduce risk, although 31% expect to change their funding policies and 24% may reduce or halt accruals.

Monday, December 15, 2008

Overheard @: An insider's take on making Working Mother's Best Companies list

Listen in as Stacey D. Stewart, chief diversity officer and senior officer of community and charitable giving at Fannie Mae, talks about her company's recent recognition as one of Working Mother's 2008 best companies for working moms.

Tip of the Day

Keep up pushing employees toward generics.

The effort is paying off. New study results from IMS Health show total spending on generic medications decreased by 2.7% to $33 billion, the largest decline in a decade. The average price that drug makers charged for generics decreased 8%, and consumer demand for generics increased 5.4%. Even better news, IMS Health predicts the trends will increase through 2012.

News You Can Use (but don't want to hear): Pensions at largest companies post record losses

This past Thanksgiving, it seems DB plan sponsors were just thankful to get through November. New analysis from Mercer shows that pension plans sponsored by the largest U.S. companies suffered their second consecutive month of record losses, with their funded status falling by more than $130 billion in November.

This adds to losses of $110 billion in October and $100 billion in the first three quarters of 2008, turning a surplus of $60 billion at the end of 2007 into a deficit of $280 billion at the end of November.

The study covered plans sponsored by companies in the S&P 1500, and showed the aggregate funded status fell from 104% at the end of 2007 to 97% at the end of September, and dropped further to 80% at the end of November. Mercer’s analysis also shows that without a significant increase in high-quality corporate bond yields -- used by most companies to measure the value of plan liabilities -- the losses would have been worse.

Friday, December 12, 2008

News You Can't Use (but wish you could): Alberta to ring in new year with no health premiums

On Jan. 1, Alberta, Canada will eliminate its annual premiums for individuals and families for all of 2009. Employers who have paid their employees’ premiums can reinvest the savings in other employee benefits or compensation programs, or they can choose to hold on to the savings. The move is being taken because the province is in such good financial shape and is sharing the wealth with employers.

Tip of the Day

Manage your information security risks.

In addition to just being good business practice, securing employment information could be even more important in the current economic environment. A recent survey by Cyber-Ark Software finds that more than half of U.S. respondents (58%) confessed to stealing corporate data and would use the information as leverage to land a new job if they were laid off.

And although customer data was highest on the list of the juiciest info to steal (52%), HR information also ranked highly (28%).

To help HR/benefit pros safeguard company data, IRHIM offers a course on managing information security risks.

News You Can Use: Stressed employees flocking to EAPs

Survey results from the Employee Assistance Society of North America show an 88.2% increase in calls to EAPs for financial services. In addition, requests for help coping with stress were up 82.4%, and calls for legal services were up 41.2%.

Such results don't really surprise us much here at EBN, as financial and emotional worries often go hand in hand. However, what does seem troublesome is that we haven't seen similar surveys that show calls to retirement advice lines have been burning up as well. Are employers not offering retirement/fincancial planning services in as large numbers as they do EAPs? Are EAPs better communicated? Do employees feel more comfortable talking about their finances in the abstract rather than facing hard numbers?

Comment and share your thoughts.

Thursday, December 11, 2008

News You Can Use: Fidelity, AmEx unveil rewards card way better than frequent flier miles

Fidelity and American Express have teamed up to create a rewards credit card that allows customers to transfer purchase rewards to their IRAs, reports EBN sister publication Money Management Executive. The card allows investors to earn two cents for each dollar spent on retail purchases and roll these rewards into a Fidelity IRA account after they spend at least $2,500.

If investors max out their IRA contribution for the year, they can redeem their rewards in a different Fidelity account or redeem them for travel, merchandise or other rewards.

Tip of the Day

Keep an eye on your retirement plan fees.

"It’s easy these days to forget about fees when your fund might have lost 40% or more in the past year,” writes the Baltimore Sun. “But fees matter over the long run, and you can end up with a lot less money, even if you’re paying what seems to be only slightly more for a fund.”

As higher fund fees can siphon even more money from employee-investors who have seen their assets battered by the downturned economy and stock market, such fee increases are something for plan sponsors to watch.

Lipper senior analyst Jeff Tjornehoj told EBN sister publication Money Management Executive that fund fees could rise 10% next year. Added to that, he warned, service providers are likely to increase their fees as well.

News You Can Use: House approves bill to change 401(k) distribution rules

The House last night passed legislation that would temporarily suspend the tax on seniors who fail to take a required minimum distribution from their retirement accounts at age 70 1/2. Under the bill, seniors would not have to tap retirement assets during 2009.

Under current law, seniors must annually withdraw a minimum amount from their retirement accounts, based on their life expectancy and retirement balance from the previous year. Not taking the distribution subjects seniors to a tax penalties.

Among the bill's other provisions are relief for cash-strapped employers who need to make high contributions to pension plans to meet Pension Protection Act requirements, which state that plans must be 92% funded for 2008 and 94% for 2009. Failing to meet that funding mark would force plan sponsors to fully fund plans immediately. The House bill would only force companies to meet the 92% funding level.

Wednesday, December 10, 2008

News You Can Use: Supremes to hear case on crediting pregnacy leave for calculating pension

Today the Supreme Court will hear oral arguments in AT&T v. Hulteen, a case that will address how employers should factor maternity leave into calculating years of service for pension benefits.

The women bringing the suit are retired AT&T employees who took pregnancy-related leave prior to the passage of the Pregnancy Discrimination Act in 1979. Before the law became effective, AT&T limited the amount of pregnancy leave that could be credited as years of service, but did not limit other types of disability leave. As a result, the women received smaller pensions than if they'd been given full credit for pregnancy leave.

The case will address whether the benefits limit is a violation of the Pregnancy Discrimination Act.

Tuesday, December 9, 2008

Tip of the Day

Know the 5500 requirements for Schedule C.

Rather than have us try to explain them all is this space, click here for an alert from ERISA Diagnostics that breaks it all down for you.

News You Can Use: Patients poo-poo quality rankings

When it comes to selecting a doctor or hospital, patients would rather consult friends and family rather than online quality rankings, research finds. According to the Kaiser Family Foundation, less than 15% of Americans rely on quality data to make decisions about health care services.

"Virtually no patients look at them," Dr. Bryan Liang , executive director of the Institute of Health Law Studies at California Western School of Law in San Diego, told The Press-Enterprise. "The basic problem of these kinds of ranking systems is that patients do not choose on the basis of scores. They choose on the basis of personal familiarity and experience with the health care entity or provider."

Monday, December 8, 2008

News You Can Use: 401(k) balances, savings rates drop

A Hewitt Associates analysis of 2.7 million U.S. employees reveals that the average 401(k) plan balance has dropped 14% in 2008 to $68,000, down from $79,000 in 2007. In the past two months alone, employees, on average, have lost nearly 18% of their 401(k) plan savings, and some have lost more than 30%.

In addition, savings rates have dropped marginally, from 8% in 2007 to 7.8% in 2008, while 4% of employees have stopped 401(k) plan contributions altogether.

Tip of the Day

Revisit employee medical confidentiality requirements.

With changes to the ADA and FMLA, and the persistent unknowns of HIPAA, experts at Ogletree Deakins advise employers to brush up on the laws and their provisions for employers regarding maintaining workers' medical privacy. Click here for the firm's advisory.

News You Can Use: AHIP offers tit-for-tat reform proposal

America's Health Insurance Plans (AHIP) last week offered its own health care reform proposal on behalf of the nation's insurers. Although the plan would require a mandate for all Americans to purchase health insurance -- an idea rejected by President-elect Obama -- the industry cedes ground by stating the plan would prohibit insurers to reject individuals based on health status.

Read the full proposal here, then voice your opinions to Obama's health care team.

Friday, December 5, 2008

News You Can't Use: EBRI turns 30

The Employee Benefit Research Institute is all too modest. Not wanting to toot their own horn, we'll do it for them! This week, EBRI, dedicated to the development of sound employee benefit programs and public policy through nonpartisan research and education, celebrated its 30th anniversary.

Although you'll find only a brief mention of it on the group's Web site, EBRI celebrated in style with a Washington, D.C. reception and tribute program that featured the likes of Rep. George Miller (D-Calif.), who called the group "one of the most valuable resources we have to help us understand what is happening" in employee benefits. Sen. Charles Grassley (R-Iowa) said EBRI has "won respect among members on both sides of the aisle."

EBN congratulates EBRI and its president and CEO Dallas Salisbury on this milestone and wishes the organization continued success in the future.

News You Can Use: U.S. health rankings score bragging rights for small states

Congratulations, Vermont, Hawaii and New Hampshire – you’re the top three healthiest states in the nation this year. Sorry, Louisiana, Mississippi and South Carolina – you’re the bottom three states, according to “America’s Health Rankings,” a report from the United Health Foundation.

Curious about where your state falls in the rankings? Find the full list here. The rankings weigh a number of health metrics, such as the infant mortality rate, prevalence of obesity, smoking rate, access to prenatal care, proportion of uninsured residents and prevalence of binge drinking.

Tip of the Day

Consider giving a holiday bonus ... or a ham.

Survey results from HON show 75% of employers provide some sort of holiday incentive, with 54% offering a cash bonus (the most popular), 22% a gift certificate, and 5% a holiday ham.

News You Can Use: 10 benefits on the chopping block

According to U.S. News, employers are making a list and checking it twice -- and not in a good way. This recent article outlines 10 places employers will look to cut costs next year, among them 401(k) matches, employee training and merit increases. Which ones are on your list? Comment and let us know.

News You Can Use: Send Obama your health care suggestions

The website of the President-Elect Barack Obama features a community discussion board to pick the public’s brain on Health Care solutions. Since the discussion went live on Tuesday over 3,500 individuals have commented.

Care to share? Click here to join the conversation.

Thursday, December 4, 2008

News You Can Use: Report details discriminatory, unsanitary practices by CVS

The CVS Caremark Corporation is under fire today about the results of an investigation into practices regarding access to its stores and services, quality control and consumer privacy and safety issues at CVS stores.

The study, conducted by consumer advocacy group Cure CVS over a 14-month period, finds that in the metro New York City area, CVS operates four times as many stores per person in the where the median annual household income is over $80,000, as in the least, where the median annual income is under $40,000. There are twice as many CVS stores per person in the wealthiest areas of Greater Los Angeles as there are in the least wealthy. By contrast, Walgreens and Rite Aid have more stores per person in less affluent areas across the country, the group concludes.

The report also finds that CVS is more likely to place 24-hour stores and in-store medical clinics in majority-white neighborhoods and higher-income communities. The chain also has been taken to task for unsanitary practices. In June , the Attorneys General of New York and California demanded that CVS stop offering expired infant formula and over-the-counter medications.

CVS is the nation’s largest drug store chain, operating 6,800 stores nationwide. CVS Caremark Corporation is the nation’s largest source of prescription drugs.

Tip of the Day

Avoid legal liability during the holiday season.

Even employers with the best of inclusive intentions can get into hot water if holiday celebrations do not follow the letter of the law. Advice from Snell and Wilmer LLP covers religious observances, parties and bonuses.

News You Can Use: Nearly one third of employees may not own a home computer

Nearly all (94.5%) of human resource professionals say that it is important for employees to own a home computer, but as many as one-fourth of professionals say that over 30% of employees don't own computers at home.

"The survey echoes what we have seen as a growing trend -- access to home computers has expanded in recent years, but disparities still exist for those employees trying to acquire these essential, life-enhancing products during these unforgiving economic times," said Elizabeth Halkos, vice president of sales and marketing for Purchasing Power, the Atlanta-based company that conducted the survey.

Having access to benefit information online is the most important reason for employees to have home computers, according to 81.5 % of respondents. Also ranking high (both at 50.6 %) as an important use for a home computer was improving skills of the employee through online education and accessing wellness programs and other health information.

When asked if they have any solutions available for employees without home computers, 57.7 % of respondents said they did not. Of the 42% of respondents who do, 28.5% said they have computer kiosks in the workplace for use on breaks and 27% have loaner laptops for take-home use. Only 16.6 % reported they are offering computer purchase as a voluntary benefit, however.

The random sample survey was conducted during the 21st Annual Benefits Forum & Expo and the Society for Human Resource Management's (SHRM) 60th Annual Conference.

Scone: First, do no harm

A recent study published in the December issue of the journal Pediatrics finds that about half of some 800 pediatricians and family docs surveyed delayed purchasing childhood vaccines because of high vaccine costs compared to low reimbursement rates, and another poll finds that 11% of doctors (just 5% of pediatricians) have seriously considered not providing vaccines at all.

The news is meaningful to employers because as health care costs continue to rise and Americans forego health care for themselves and children for financial reasons, a smaller number of doctors providing vaccines could lead to larger outbreaks of certain diseases -- equaling higher health plan costs and employee absences to care for sick children or themselves.

As employers put a larger focus on primary and preventive care in their wellness efforts, cooperation from physicians, including pediatricians who care for employees' children, is essential.

Here's hoping this is a blip for pediatricians, brought on by the economic pressures we're all facing. Anything more than that, and employers, employees and their families could be physically and financially harmed.

Wednesday, December 3, 2008

Tip of the Day

Revisit the tax treatment of gifts to employees.

'Tis the season, and in this economy, any small token of employers' appreciation will mean a great deal to workers. However, it's important to remember that holiday gifts are treated as supplemental wages, and therefore subject to income taxes. Brush up on this and other tax rules for holiday gifting.

News You Can Use: Benefits accounted for nearly one-fifth of total compensation in 2007

Benefits account for nearly 20% of total compensation spending, states data from the nonpartisan Employee Benefit Research Institutes's 2007 study, published last week in the November issue of EBRI Notes.

Employers spent nearly $8 trillion at year-end 2007, up nearly 35% from the year 2000.

Wages and salaries accounted for the largest share, $6.4 trillion (or 81.4%), while benefits made up the remainder, $1.5 trillion (18.6%).

The largest portion of benefit spending remains in the retirement arena, at 47.7% of total benefits expenditure. Health costs, however, have risen to a close second at 42.8%. "Other benefits," which includes unemployment insurance, life insurance and workers compensation, rounded out the total at just under ten percent.

Tuesday, December 2, 2008

News You Can Use: Avoiding holiday party disasters

While the economy may have curtailed holiday merriment to an extent, many offices are still planning smaller get-togethers as celebrations. Unfortunately, without proper planning, these shindigs can turn into potential HR nightmares as "off the clock" employees exhibit behaviors that are less-than-work appropriate.

This week, we'll bring you a podcast from Kathleen Koster, EBN's newest staffer, on how to stage party planning to ensure maximum fun with minimal issues, but in the meantime, we'll be exploring what may be seen as the darker side of an office get-together.

Like the 12 steps to a holiday party seen in this video, colleague's desires to "get loose" may sometimes show less-than-becoming behaviors.

"When alcohol prompts bad behavior at holiday celebrations, that can indicate something more serious is lurking," said Dr. Harris Stratyner, Ph.D., Regional Vice President of Caron Treatment Centers. "From an unstable economy to technology that bombards us with information, the state of the world today only increases vulnerability to holiday alcohol abuse and longer-term problems."

Nearly 70% of U.S. adults participating in at least one holiday party, states new data from Caron, and 64% report having seen inappropriate behavior by persons under the influence of alcohol.
Other survey findings:

58% observed a coworker drive drunk.
49% spotted a coworker flirting with another coworker or supervisor.
47% heard a coworker using excessive profanity.
44% heard a coworker share inappropriate personal details about themselves or other colleagues.

However, when asked for the acceptable number of alcoholic beverages for a person to consume at a workplace holiday party, one third (34%) of the respondents felt that it was acceptable to consume three or more drinks at a work party.

"Social drinking is so interwoven into the fabric of American society that many people fail to recognize it may be the sign of a chronic illness," said Dr. Stratyner. "During the holidays, people are particularly vulnerable to drinking in excess and others are willing to look the other way to keep the atmosphere festive."

However, Stratyner urges coworkers to instead find impaired coworkers transportation home. Such action "is a kind and possibly life-saving gesture," she says. "However, sending someone home in a cab does not change their behavior and is simply not enough. It's important to assess if there is a behavioral issue that needs to be addressed."

Overheard At/Tip of the Day: Eight great tips to save for retirement

Dean Kohmann, vice president of 401(k)s for Charles Schwab, chatted with us last week to share details about a new survey about retirement habits. He offered eight tips to help employees get on track with their savings regimen. Tune in to the podcast, and find the tips written below in this exclusive "print for your employees" section.

1. Contribute to your company’s retirement plan up to the maximum employer match.

Even if money is tight, Schwab recommends that people contribute at least enough to their 401(k) or similar plan in order to get the full company match. “You are getting paid to save,” asserts Catherine Miller, vice president of investor development for Schwab. “Don’t leave money on the table.” Most 401(k) contributions are deducted from pre-tax income, so people keep more of their earnings each paycheck and savings grow tax-deferred until retirement.

2. Pay off nondeductible, high-interest-rate debt like credit cards.

Eliminating debt will make it much easier to reach your savings goals. To maximize savings, create a budget and look for ways to cut back on non-essential expenses. Use that extra money to make more than the minimum monthly payment on high interest credit cards or loans. You can also try negotiating with credit card companies for a lower interest rate.

3. Create an emergency fund to cover at least three months of essential living expenses.

Without an emergency fund, Americans are at risk of dipping into retirement savings or taking on more debt if they need quick access to cash. You should save enough to cover at least three months of essential living expenses like rent or mortgage, utilities, food and transportation. Keep your emergency fund in an account that’s easy to access like a checking or savings account.

4. Contribute the maximum allowed to tax-advantaged retirement accounts.

Now more than ever, you are responsible for ensuring your own financial security during retirement. The more money you set aside early, the more comfortable your retirement may be. Try to contribute up to the IRS maximum in your 401(k) plan at work (the new maximum will be $16,500 in 2009) and also contribute to a traditional or Roth Individual Retirement Account (IRA), if available to help supplement these savings.

5. Save for a child’s education.

As a general rule, Schwab recommends saving for retirement before your children’s college education. “Your child may be able to get a loan for college, but you can’t get one for retirement,” added Miller. A 529 college savings plan or a Coverdell Education Savings Account can help you take advantage of tax-deferred growth on your investment.

6. Save for the down payment on a home.

Start by estimating how much house you can afford. Typically, your mortgage payment, including principal, interest, taxes and insurance should not be more than 28 percent of your gross income. Make sure you keep your risk tolerance and timing needs in mind when deciding how to save for your down payment. Avoid using tax-deferred retirement accounts to fund this purchase.

7. Pay down tax-deductible, high-interest-rate debt like mortgages.

Reducing high-interest-rate debt from a tax-deductible mortgage, home equity or student loan can significantly enhance your ability to save in other areas over time. After taking care of other savings priorities, Schwab recommends you consider refinancing this kind of debt if interest rates have dropped. You may lower monthly payments in the near term and help save money over time, but make sure to factor in any transaction or closing costs before making a decision.

8. Keep investing.

If you’ve accomplished your other savings priorities, investing for the long term may be a good way to stay ahead of inflation and earn more than traditional savings accounts pay. Start by creating a realistic investing plan and put it into action to begin earning right away. Stay diversified with an asset allocation that matches your risk tolerance and keep long-term goals in mind to stay on track.

News You Can Use: Nearly one-third of workers do holiday shopping online at work

Nearly one-third (29%) of workers do holiday shopping online during work hours, states new data from In addition, only half of employers will monitor Internet use of employees, potentially setting the stage for even more lost productivity in an already-crunched Q4.

"While employers are unlikely to terminate workers for online holiday shopping during the workday, employees should proactively police their personal Internet usage," said Rosemary Haefner, Vice President of Human Resources for "In addition, employees need to be aware of company Internet policies, as more than a quarter of employers surveyed monitor workers' time spent online and sites visited."

Of those who plan to holiday shop online this season while at work, 43% of workers anticipate they will spend more than one hour, 23% said they will spend two hours or more and 13% will spend three hours or more.

According to the survey, workers also use the Internet for the following non-work related purposes:

Research. 61% of workers use the Internet for non-work related research and activities while they are at work. Among these workers, 37% said they spend an average of more than 30 minutes of their workday on non-work related online activities and 18% said they spend an average of an hour or more.

E-mail. 20% of workers send six or more non-work related e-mails per day. Among this group, 22% spend more than 30 minutes during the typical workday doing so.

Blogging. 9% of workers surveyed have a personal blog, and while nearly a quarter (23%) of them spend time blogging at work, only 9% of them spend 15 minutes or more blogging during the typical workday.

Social Networking. 41% of workers surveyed have a MySpace, Facebook or other social networking page. More than one-third (35%) of them spend time on their social networking page during the workday with 8% spending 30 minutes or more.

Instant Messaging: 20% of workers use instant messenger at least once a week.

More than 5,600 U.S. workers and more than 3,000 hiring managers and HR professionals participated in this survey, conducted between August and September.

Tip of the Day: How to fire an employee

Small or large, almost all businesses are feeling the pinch in this economic downturn. If your company is forced to lay off employees, it is critical that proper channels are followed to avoid potentially costly backlash in the future.

This SMB Human Resources Web Exclusive offers must-read tips on how to fire or layoff employees quickly and with a minimum of legal hassle.

Monday, December 1, 2008

Overheard At: How Piggly Wiggly got high-tech

In today's special Web-exclusive podcast, grocery chain Piggly Wiggly discusses how they moved from paper to online enrollment systems. Craig Massey, director of HR, shares the story with EBA Managing Editor McLean Robbins.

Tip of the Day: Get workers to tune in to benefits updates

With open enrollment season in full swing at companies nationwide, employees who miss out on benefits may be simply throwing money away.

Nearly a quarter of workers don't pay attention when new and potentially cost-saving methods are offered, states new data from More than half of employers report that workers are losing more than $250 through poor choices, and 20% report that workers are losing $1000 or more.

"Open enrollment ensures that eligible employees are not missing out on significant amounts of helpful benefits and wallet friendly programs," said Rosemary Haefner, vice president of human resources for "In a challenging economy, many people are being prudent about how they can save money by cutting back on exorbitant personal expenses, but also need to be aware of cost-saving benefits at work that are easily available to them."

Haefner offers the following tips to employees to take advantage of benefits savings:

-- Keep benefits on radar: Workers are already overwhelmed with e-mail, so make each communication count. Use bullets, bold, and consumer marketing techniques to convey benefit changes, especially when cost savings are available.
-- Speak up: Make yourselves available to employees, via telephone or one-on-one meetings.
-- Be proactive: Tell employees about savings available through benefit changes, and highlight information about savings in these communications. And during one-on-one meetings, be sure to take the time to educate employees about other benefit offerings that might be of interest, like transportation reimbursements, or FSA plans.

The survey was conducted among more than 6,100 U.S. workers and more than 3,000 hiring managers and HR professionals between August 21 and September 9, 2008.

News You Can Use: What sets your Gen X and Gen Y employees a-Twitter?

In collaboration with Editor in Chief Kelley Butler's article in the December issue "Leveraging BlackBerries and buzzwords," EBN conducted its own (albeit unscientific) research to figure out how your Gen X and Gen Y employees best communicate.

Following the model set forth in the original study, published by the Employee Benefits Research Institute, we asked a number of employees what terms they most did (and didn't) identify with.

Meaghan Lynch, second year medical student at Boston University

Disciplined: Very
Carefree: Not so much
Family-Oriented: Very
Hard-working: Very
Expensive Taste: Somewhat
Technologically Savvy: Not at all.
Charitable: Very
Optimistic: Very

Other words: Happy, honest, social, motivated, practical

Gina Anderson, researcher at Corporate Executive Board

Disciplined: Yes
Carefree: Somewhat
Family-Oriented: Not very
Hard-working: Yes
Expensive Taste: Somewhat
Technologically Savvy: Yes
Charitable: Somewhat
Optimistic: Extremely

Other words: energetic, intelligent, intellectual, organized, and conscientious

Alison Noelker, field sales representative at Eli Lilly & Co.

Disciplined: Very
Carefree: Not at all
Family-Oriented: Somewhat
Hard-working: Very
Expensive Taste: Somewhat
Technologically Savvy: Very
Charitable: Somewhat
Optimistic: Very

Other words: driven, energetic, determined, go-getter, empathetic, loyal

Molly Bernhart, associate editor at Fierce Markets

Disciplined: Somewhat
Carefree: Very
Hard-working: Very
Expensive Taste: Not at all
Technologically Savvy: Somewhat
Charitable: Somewhat
Optimistic: Very

Other words: poised/tactful, creative, principled

Kristina Libby, U.S. Program Coordinator, Global Entrepreneurship Week

Disciplined: very
Carefree: somewehat
Family-Oriented: not yet
Expensive Taste: relative to my income range
Technologically Savvy: Exceptionally
Charitable: yes
Optimistic: sickeningly so

Other terms: occasionally ambivalent, determined, open minded, fast paced, detail oriented, creative, knowledge hungry, bored with static nine-to-five hours, overachiever

In keeping with the idea that the Gen X and Gen Y audience best respond to messages distributed via Web 2.0 material, EBN has also begun distributing its own messages through social media channels like Twitter, Facebook, and a corporate blog, the Employee Benefit News Daily Diversion. If you're looking to get up to speed with your own employees, we'd suggest developing a familiarity with our own materials through these free and easy-to-use channels.

Wednesday, November 26, 2008

Overheard At: Spread low-cost cheer

Instead of focusing on the economic crisis, fearless EBN leader Kelley Butler takes her letter from the editor in a positive direction. In this month's podcast, Butler talks about low-cost ways to improve employee morale and spread cheer this holiday season.

Tip of the Day

Have a happy and healthy Thanksgiving holiday.

Eat, drink and be merry, but to help you stay focused on wellness, click here to calculate how long you'll need to walk to burn off your Thursday feast.

The Daily Diversion will not post on Thursday and Friday. We'll resume Monday, Dec. 1.

News You Can Use: Does where you live affect your retirement plan participation?

Employees in Midwestern and Northeastern states are more likely to participate in retirement plans than their Southern and Western counterparts, states new data from the nonpartisan Employee Benefit Research Institute.

According to 2007 data, wage and salary workers in Florida have the lowest probability (36.4%) of participating in a retirement plan, while those living in Iowa are the most likely to participate, at 58.3%.

Among salaried workers, Wisconsin took top place (54.4% among private wage and salary workers; 67.7% amongst full-year wage and salary workers). Again, Florida came in last, with 32.3% of all workers participating.

New Jersey residents are most likely to participate from the public sector employer group, with 82.1%, followed closely by Idaho and Ohio, at 81.9% and 81.7%, respectively. Louisiana residents in the public sector were lease likely to participate, with 68.8%.

If you're searching for ways to increase worker participation, why don't you take a listen to the helpful suggestions on our recent podcast with Dean Kohmann of Charles Schwab.

Tuesday, November 25, 2008

Overheard At: Great communication is simple ... in theory

Jennifer Benz, founder of Benz Communications, discusses new trends in benefit communication as part of our November feature on the topic.

For more information on this topic, check out the following articles in this month's issue:

Tip of the Day

Streamline your business travel budget.

The National Business Travel Association (there really is an association for everything, isn't there?) reports that corporate travel managers predict a 5% to 8% increase in business travel costs for 2009, including airfare, hotel stays and car rentals.

NBTA projects:
* Airfares will increase 7% to 10% next year over 2008.
* Hotel rates will rise 1% to 4%.
* Car rental rates will increase 1% to 3%.

In response, NBTA foresees companies reducing non-essential travel, enforcing new travel policy mandates and implementing tools like eFolio hotel data -- which enable automated hotel spending reports to streamline expenses and flag spending out of line with company policy.

News You Can Use: Average deductible tops $1,000

New survey results from Mercer reveal that for the first time this year, employees' average annual deductible for single coverage topped $1,000 -- a troubling sign for employers and workers alike who are struggling to pay for health care.

The average single person must now pay $1,001 in out of pocket expenses before coverage kicks in, a 17% increase from last year's average $859.

"Raising the deductible has become the fallback for employers faced with cost increases they can't handle," Mercer consultant Laura Baker told the LA Times. "It's the easiest way to reduce cost without taking more out of every employee's paycheck."

Michelle Dimarob, legislative affairs manager for the National Federal of Independent Businesses, added: "This is very reflective of the tough economic times we're in. Health care is truly a pocketbook issue for both employers and employees."

Monday, November 24, 2008

News You Can Use: Congrats, you're recession-proof!

The latest rankings from Jobfox show that HR generalist is No. 25 on the firm's most recession-proof jobs for the 120-day period ending Oct. 28. No. 1 remains sales representative. Click here for the full list and methodology.

Tip of the Day

Hold off on buying an AARP mini-med plan.

AARP has hired an independent investigator to probe the sales and marketing of mini-medical plans aimed at workers age 50-64, after Sen. Charles Grassley (R-Iowa) called the plans misleading, the New York Times reports. AARP will stop marketing and selling the plans until the investigation is complete.

The plans, offered by AARP via UnitedHealthcare, cover about 1 million members, the Times reports. Grassley takes issue with the plans' marketing mainly because they do not provide catastrophic coverage, but give the impression that the plans are comprehensive. "The products may leave consumers seriously in debt if they need intensive medical care," Grassley said, and asked AARP to disclose its profits from the plans.

News You Can Use: Primary care system crumbling?

According to survey results from the Physicians Foundation, primary care physicians are severely unhappy with their work, so much so that:
* 20% plan to reduce their patient load.
* 13% plan to take positions without active patient care.
* 11% plan to retire.
* 78% report a shortage of primary care physicians.
* 60% would not recommend medicine as a career.

The problem is significant for employers, as primary care docs are viewed as the linchpin for improving employees' overall health. In fact, EBN contributor Steve Raetzman said in the November issue, "Employers have a unique opportunity to lead the next major change in health care delivery: expanding primary care and transforming it from a fee-for-service, visit-by-visit model to a patient-centered medical home."

Download a free guide for employers on the medical home movement here.

Friday, November 21, 2008

News You Can Use: President-elect sets ambitious work-life agenda

Among his many large scale goals, President-elect Barack Obama has set a high-flying work-life agenda, including a federal mandate for paid sick leave and expanding FMLA to encompass employers with 25 or more workers (current law applies to 50 or more), more purposes -- including children's school needs, and expand care to more family members.

Read more here from the Wall Street Journal about Obama's work-life proposals and others on the federal and state level.

Tip of the Day

Keep your expats engaged.

According to new research from Kenexa Research Institute, expatriates are a bigger "flight risk" than non-expats. More than 50% of expats seriously think about leaving their current organization within the year. This may be because they tend to see their relationship with their employer as project- or task-oriented – when the assignment objective has been reached, the expat considers whether to re-engage or seek employment elsewhere, Kenexa concludes.

However, it may be due to a rocky repatriation process -- how an expat is folded back into meaningful work after a long term overseas. A recent EBN report and podcast cover how to select the best expat candidates and effectively handle repatriation.

News You Can Use: Medicare to stop covering weight-loss surgery for diabetics

Medicare officials said this week the government intends to stop covering weight-loss surgery to help fight diabetes, Workforce Management reports.

Although the agency currently covers such surgery for all Type 2 diabetics, the threshold for coverage will shift to those with a body mass index of 35 or higher, an indicator of severe or morbid obesity, according to Workforce.

The story is significant because, as the nation's largest health care payer, Medicare can throw its weight around (no pun intended) and strongly influence what services/procedures other health insurers will cover.

Thursday, November 20, 2008

News You Can Use: ABC urges action to push pension bill

The American Benefits Council has issued an action alert imploring pension plan sponsors to lend their voices in support of legislation aimed to implement pension reforms and regulatory clarifications. Read the alert here. Contact information for ABC and congressional leaders is included.

Tip of the Day

Take stock (no pun intended) of your retirement plan(s).

Whether you offer a DB, DC, ESOP, NQDC retirement plan or all of the above, the market downturn no doubt has done a number on your returns. Principal Financial Group offers a guide to help you regroup and recoup. Read it here.

News You Can Use: Nation's health care systems slow to embrace wellness mantra

More than 40% of hospitals and health care systems will be on the wellness bandwagon by 2010, a new survey from Meritain Health reports. Additionally, 75% are considering adding wellness programs for employees if they do not already have one in place.

At present, a mere 7% have wellness programs in place.

“These survey results reflect a significant opportunity for helping health care workers become healthier and more productive, but unfortunately also illustrate the challenges HR managers face in making wellness programs an integral part of the benefits offered to employees at our nation’s hospitals and physician’s offices,” said Laura Smith, vice president of healthcare systems accounts for Meritain Health. “In perhaps no other industry could it be more important to have employees modeling healthy behavior, while at the same time producing significant cost savings for their employers.”

Employers report barriers like overall program appeal (30%), cost (27%) and convincing C-suite executives (15%) as reasons why they have not yet gotten wellness initiatives off the ground.

“In these lean economic times, it is tempting for healthcare executives to eschew offering new employee benefits in the interest of prudent budgetary policy,” said Dr. Larry Luter, Chief Medical Officer for Meritain Health. “With the cost of healthcare continuing to rise every year, and national data regarding the number of Americans who are overweight, obese or living with diabetes doing the same, an investment in employee health is one of the most important things any company can do to secure its long-term financial future.”

Wednesday, November 19, 2008

Tip of the Day

Submit your comments on draft legislation that would require employers to disclose the amount they pay toward an employee’s health benefits on the employee’s W-2.

According to a group of lawmakers on the Senate Finance Committee, such a directive would "provide for greater disclosure of health insurance costs to workers. Better informing workers about what they pay for health care and how much costs are increasing year after year is a way to begin to help to control health care costs."

What do you think? I personally don't read my W-2 very closely, rather just pass it along to my accountant. So, I'm inclined to agree with a recent WorldatWork membership poll that finds (62%) favor total rewards statement as the best way to communicate the true cost of health benefits, compared to 8% for the W-2 tax form.

“While transparency of employer-provided health-care costs is always a good idea, the W-2 does not give a complete picture,” said Rose Stanley, WorldatWork's benefits practice leader. “Our studies show that total reward statements are truly the best vehicle for communicating with employees as they include income from all compensation sources as well as the cash value of all benefits. However, reward statements are not provided with every paycheck, are not submitted to government and are not consistent in format. As an alternative, we encourage the U.S. Senate Finance Committee to explore creating a federal standard of total reward statements for tax-exempt benefit communications.”

The committee is accepting comments until Dec. 31. E-mail

News You Can Use: Miller fights back

Rep. George Miller (D-Calif.), fighting back against what he calls "an active campaign that is blatantly misrepresenting Democratic efforts to preserve and strengthen Americans’ retirement security," on Friday issued a press release to tell his side of the story.

Despite news reports to the contrary, "I do not support ‘abolishing’ 401(k)s, moving these plans, or changing their tax status, plain and simple,” Miller said. Rather, he outlined five points to make 401(k)s more accessible and profitable for workers.

The December EBN outlines the controversial proposal that emerged at a hearing Miller last month, and the January will explore who proposed what when, and where the issue stands now.

Scone: Protecting the blind side

I’m a big football fan, and one of the things I hate the most is seeing a quarterback get hit on the blind side (the opposite of his throwing arm) because there’s nothing worse than a hit you don’t see coming.

Along those lines, I received an e-mail last week from a recently laid off employee. Lamenting the loss of her job, she asked if I could help her find information on how to recoup the nearly $400 she’d deferred into a commuter benefits account but had to forfeit upon her termination.

I double checked with a benefits attorney, then gave her the tough news that yes, the funds forfeited to employer, as she was no longer with the company. I felt bad for her, having been completely blindsided by the layoff and then it seemed getting insult piled onto injury by losing funds she probably could sorely use right now.

It got me and a few EBN colleagues thinking. Obviously, employers must comply with WARN (Workers Adjustment Retraining and Notification Act), which requires employers with 100 or more workers to provide employees, bargaining representatives and local government officials with 60 days advanced written notice of a mass layoff or a plant closing.

But more specifically, can/should employers communicate far in advance to employees about the benefits they lose (commuter benefits, FSA funds) and the ones they can take with them (retirement savings, HSA funds) if they are laid off? How far in advance? And does such notice make a company appear unstable or give away that layoffs are being considered?

Is giving them the information and tools to protect their money more valuable than causing some uneasiness about whether they might be the one to get a pink slip? An article in an upcoming issue of EBN will address these questions and others, but I’d like to hear your thoughts.

Meanwhile, communication expert Hugh Braithwaite, president of Braithwaite Communications, offers the following tips in communicating effectively during a layoff:

* Be complete. If there are holes in the facts of your story, employees will fill-in-the blanks with what they believe the facts should be. That’s how rumors get started.
* Be consistent. If you tell a different story every time you tell it, information will become muddled and there will be mass confusion. That’s how rumors spread.
* Inform affected employees first. This should be common sense, but employees being laid off should hear the news first and in person if possible. Respect and compassion are essential. Prepare an “exit kit” for each laid-off worker that contains an official letter, hand-outs with frequently asked questions, confidential agreements, references, contact sheet, and severance and benefit information. Be as thorough and complete as possible –remember, the more comprehensive you are, the less you are leaving to the imagination.
* Inform retained employees. Review the situation, be prepared to answer questions, and provide resources for follow-up questions and concerns. Depending on the size of the layoff, a series of regular employee communication sessions may be necessary instill confidence and maintain a sense of community.

Tuesday, November 18, 2008

Overheard At: Tuition Benefits

Retaining valued employees is more important than ever. Learn how tuition benefit programs work from Linda Blandford-Beringsmith, a vice president at Robert Half International.

For more information on this topic, read "Straight A's for tuition benefits" in this month's issue.

Tip of the Day

Take steps to prevent medical identity theft. According to the Report on Patient Privacy, some 250,000 are victims of medical identity fraud each year -- where people assume another person's identity to receive medical care. As the economic downturn could cause the incidences to spike, RPP offers tips on how to safeguard your employees and covered dependents.

News You Can Use: CDH gets boost from economy

Although flagging in recent years from low employee enrollment, consumer-driven health plans are getting a serious second look from employers that cannot sustain any more rate hikes amid the struggling economy, AIS Health reports.

Insurers and employers are drawn most strongly to HSAs, but HRAs remain a viable option, according to AIS's findings.

Monday, November 17, 2008

Overheard At: Save your job

Welcome to this web-exclusive podcast focused on your careers - not the needs of your clients or employees, but on how to take care of #1 in today's downtrodden economic state. Last week, first-time unemployment claims rose to the highest level since September 2001, and more cuts are surely around the corner as companies realize difficulty meeting 2009 budget expectations. We're here today with Chuck Wright of leading executive recruitment firm Santon Chase International.

News You Can Use: Final FMLA rules clarified

The DOL clarified new FMLA provisions today, the first since the law was enacted in 1993.

Read this Employee Benefit News Web Exclusive for details.

Tip of the Day: Five questions to tell your employees to ask at open enrollment

When brainstorming ways to better educate your employees about the decisions they need to make at open enrollment, it's often imperative that benefits professionals put themselves in an employee's shoes.

Andy Smith, Senior Partner with Cornerstone Financial Partners, believes that by not investing the time to make informed choices, workers may be leaving money on the table and putting their future at risk.

Take Smith's five questions and ask yourself one more: Am I educating my workers to make a proper decision about this topic?

1. Is the 401(k) account properly allocated? "For most workers, the 401(k) will be the primary source of income in retirement, so it's important for investors to review their portfolio and rebalance when necessary," says Smith.

According to the Financial Engines National 401(k) Evaluation, 69% of the nearly 1 million 401(k) participants surveyed have portfolios with inappropriate risk and/or diversification. Additionally, 36% hold high concentrations of company stock, and 33% fail to contribute enough to receive the full company match, leaving money on the table.

2. How much is in company stock?

The Pension Protection Act of 2006 has made it easier for employees to diversify out of company stock. The act gives employees the right to sell publicly traded company stock received as a matching contribution in a retirement plan account after three years of service for original matching contributions, and immediately for employee contributions.

3. Is there a better choice for health insurance?
Spend time educating employees about CDHPs and HDHPs in such a way as to inform them of which choice will most benefit them health-wise and financially.

For 2009, the maximum annual HSA contribution for an eligible individual with self-only coverage is $3,000. For family coverage, the maximum annual HSA contribution for 2009 is $5,950. Individuals age 55 and older can also make an additional "catch-up" contribution of $1,000 in 2009.

4. Are Flexible Spending Accounts being fully utilized? In addition to visits to the doctor, the cost of eyeglasses, dental work, psychologist visits, even cough syrup can be run through the plan.

Some companies also offer a dependent care Flexible Spending Account (FSA) which allows contributions up to $5,000 a year.

5. Is long-term care coverage necessary? According to the American Association for Long-Term Care Insurance roughly one-third of men and one-half of women age 65 and over will require some form of long-term care.

Smith advises married couples to review both spouses' benefits to find any gaps or overlaps in coverage. "It's possible to save money or improve coverage simply by moving the family to a spouse's heath plan," says Smith.

Friday, November 14, 2008

Overheard At: Proactive engagement mitigates workplace conflict

Did you know that it costs 150% of an employee's annual salary to replace them? In today's Web-exclusive podcast, Richard Hart of Proactive Resolutions talks about how to get employees to proactively deal with difficult workplace situations and offers tips on how HR can mitigate potentially job-threatening situations before they get out of hand.

Tip of the Day

Check out the IRS' YouTube presentation on complying with the soon-to-be effective 403(b) regulations. You won't regret it; Jan. 1 will be here before you know it.

News You Can Use: Employers against mandate

President-elect Obama, take note: A pre-election survey by Buck Consultants finds that U.S. employers want to continue to provide health coverage to their employees, but are against a government mandate to do so.

Most employers favor a health-care system similar to what already exists, but adding:
• a safety net for the uninsured.
• a continuing, and potentially expanded, role for consumer-driven health plans.
• a national promotion of health and wellness.

Among other findings, if a mandate does become law, two-thirds believe employers should have plan design discretion, such as the option to offer CDHPs. As the Chamber of Commerce's public affairs director Katie Strong told Benefits Forum & Expo attendees in Sept., "Employers feel that they can manage health benefits and plan flexibility much better than the federal government."

Thursday, November 13, 2008

News You Can Use: DOL taking comments on GINA

The Department of Labor this week called for comments on the Genetic Information Nondiscrimination Act (GINA), which amends the tax code, ERISA and several other employment laws to prohibit health coverage discrimination based on genetic information.

The request seeks opinions on several aspects of GINA, including:
* To what extent do group health plans and health insurance issuers currently use genetic information, such as family medical history, and for what purposes? For example, is genetic information currently used for group rating purposes, or for purposes of a wellness program that otherwise complies with HIPAA's nondiscrimination requirements?
* How do plans and issuers currently obtain genetic information (for example, through health risk assessments, the Medical Information Bureau, or other entities under common control)?
* Under what circumstances do plans or issuers currently ask for the results of a genetic test in order to make a determination regarding payment of benefits? What is the minimum amount of information necessary for a plan or issuer to make a determination under such circumstances?
* What terms or provisions (such as genetic information, genetic test, genetic services, or underwriting) would require additional clarification to facilitate compliance? What specific clarifications would be helpful?

Submit comments at or Comments will be accepted until Dec. 9.

Tip of the Day

Set up a lifecycle fund strategy. With the flood of lifecycle funds now available, plan sponsors need to consider which funds are most appropriate for their retirement plan. Get started separating the contenders from pretenders by reading this month's EBN.

News You Can Use: Workers foregoing health coverage over cost

Did you have fewer takers this year during open enrollment? Blame the economy.

New survey results from BearingPoint, Inc. and Zogby International show that, due to the economic crunch, nearly 10% of employees are more likely to either drop their health insurance plan or switch to a less expensive one with fewer benefits.

Workers making less than $25,000 a year and workers age 18-24 are most likely to switch to a cheaper plan or drop coverage altogether. Among ethnic groups, Hispanics are most likely to put cost over care.

Further, the survey reports 15% of respondents were more inclined to take less medications or forego prescriptions because of financial strain.

Wednesday, November 12, 2008

News You Can Use: Lack of communication damages morale

We all know communication is essential when getting benefits messages across to employees, but new news from Accountemps suggests that effective communication can actually improve morale as well. When used incorrectly, one-third of executives responding say that a lack of open and effective communication is the top thing that can damage employee happiness.

"Regular communication with employees is always integral to an organization's success, but it becomes especially critical during periods of uncertainty," said Max Messmer, chairman of Accountemps and author of Motivating Employees For Dummies(R) (John Wiley & Sons, Inc.). "When people are concerned about job security and company performance, updates on corporate news are essential. By keeping employees informed, managers can address anxiety and ensure workers are focused on meeting business objectives."

For more information about how to effectively reach your employees, we'd suggest "Are you talking to me?" in this month's EBN.

Tip of the Day

Find out what your health insurance carrier's shares are selling for on Wall St. The information could be just as valuable as their premium rates, according to experts who participated in a roundtable discussion sponsored by the Center for Studying Health System Change. Read more about how the economy is affecting the health of the health insurance market in the current EBN.

News You Can Use: Voters defeat pension measures

Voters in five states last week voted down measures that would put more of state and local pension investments at risk in the stock market, further illustrating investor nervousness in light of the current economic crisis.

Scone: In search of HSA advice, assurance

Two weeks ago – after much discussion with my husband, fine-tooth-combing our family budget, using three comparison tools and a medical cost estimator, and reading every page of communication my employer sent on the subject – I enrolled my family in a high-deductible health plan with an HSA for 2009. I still wonder if I did the right thing.

Ever since, I’ve found myself preparing for a sort of health care Armageddon – scheduling myself, husband and children for every doctor’s and dentist appointment we need, weaning my infant daughter off a long-term medication, and informing the specialist she sees (and that we adore) that we likely won’t be back to see her because I’m not sure we’ll be able to afford the office visit come January.

Although it took much consideration, I feel railroaded into my decision. The HDHP I was offered carried about the same premium as the current PPO that covers my family now –already near the top of what our family can afford. The more traditional health coverage options were two and three times what we currently pay, and there’s no way we could sustain that (while continuing to save for retirement and meeting our monthly expenses).

So, I did the only thing I could do: checked the HDHP option, funded my HSA up to the deductible and hoped for the best.

Even though I can’t change my decision now, I still question it. I’ve discovered that writing about this topic and living it are two different things – and I consider myself much more informed than my colleagues at other non-benefits-related publications.

So I turn to you EBN readers, the exceptional pros that you are, for advice and assurance (and promise not to hold you accountable). Any recommendations you have would be great; just tell me what you would if I worked at your company.