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Thanks for reading! --K.B.

Tip of the Day: Beware of Sen. Kennedy

A recent report in The Washington Post reveals that Sen. Edward Kennedy's health care reform proposal involves mandates both for employees and employers, similar to the health care system in Kennedy's home state of Massachusetts.

It's no secret that employers are solidly against a mandate for businesses to chip in for the cost of health insurance, so I encourage you to make your voice heard on Sen. Kennedy's plan. According to the Post, he plans to unveil it today and my sources tell me that a bill of of some kind could come as early as this month.

Overheard @: Trimming FSAs could pay for health care reform

In a recent article written for the Center on Budget and Policy Priorities, authors Chuck Marr and Kris Cox suggest that "Congress should consider scaling back or eliminating health care flexible spending accounts as part of its effort to pay for health care reform."

Among their reasons for deep-sixing FSAs, Marr and Cox say:
* FSAs encourage excess utilization of health care.
* FSAs’ “use or lose it” requirement promotes wasteful spending.
* FSAs complicate peoples’ lives while providing only modest benefits for non-wealthy accountholders.
* Health care reform’s changes to the treatment of out-of-pocket costs are likely to weaken the rationale for FSAs.

I found their arguments to be interesting and very rational, particularly the part about the "use it or lose" requirement promoting wasteful spending. I can't tell you how many colleagues and friends buy several pairs of eyeglasses and bottles upon bottles of aspirin in December each year so they can use up their FSA dollars.

What do you think? With HSAs growing in popularity, are medical FSAs even needed anymore?

Tip of the Day: Submit your ideas for fixing the retirement system

Do you have an idea of what a universal, secure, and adequate retirement system should look like? Retirement USA wants to hear from you!

The organization is accepting proposals from us regular folks on how to revamp retirement to make sure everyone has happy and secure golden years. There are a few caveats -- proposals have to align with Retirement USA's principles, but they're things I think we all can agree on for the most part: plans that are universal, secure, portable and provide adequate retirement income.

So put your ideas out there!

Yay or Nay: Is the employer-sponsored system worth saving?

Although President Obama has called the employer-based health care system "an accident of history that works," a recent New York Times opinion piece by Princeton economics professor Uwe Reinhardt says the system makes employers "pickpockets, so to speak, who take a chunk of the employee’s total compensation and buy with it whatever fringe benefits they 'give' their employees."



While I'm sure you don't wholly agree or disagree with either the president or Reinhardt, what are your thoughts? Should the employer-based system stand, or do you think it needs dismantling?

Tip of the Day: Prepare for a health care battle

As summer approaches, so does the official start of a duel over health care reform. A host of proposals from Republicans and Democrats are on the table, and Sen. Charles Grassley acknowledged to reporters earlier this spring, "This is the toughest issue we have ever taken on -- every part has got a chance of blowing up."

One of the stickiest points of contention is whether or not reform should incorporate a public plan option. To keep with all the "duel" imagery, Les Masterson of Health Plan Insider writes that CDHPs and HSAs should prepare to "do battle" with a public plan.

As Masterson notes, some 8 million Americans are covered by HSA-eligible plans with enrollment steadily growing. He cites two recent surveys touting the accounts and writes:

"These two studies were released at the same time that the health care reform debate rages in DC. That's not a coincidence. Private health plans are rightfully viewing portions of health care reform as a direct assault on their business.

HSAs, the poster boys for creating better health care consumers and lowering health care costs under the Bush administration, are not seen by most Democrats as a solution—but rather a problem that prices the poor out of quality health care."

So pros, since employers increasingly are turning to HSAs to lower cost, you should get your war paint ready if you don't want to see HSAs decline. Or, perhaps you're content to see employees enroll in the public plan. What are your thoughts? Comment and let me know.

News You Can Use: Another day, another delay

If there's one thing the government does well, it's make things take longer. The Department of Labor announced on Thursday a second extension for public comment on final regulations that would permit 401(k) and other retirement plan fiduciaries to provide more advice to plan participants under the Pension Protection Act of 2006. The new deadline is Nov. 18, 2009.

Employers have long awaited better guidance on what forms of investment advice the government wants to permit, or encourage. The comment period was previously extended to allow the Obama administration sufficient time to examine the legal and policy issues present in the regulation, according to a White House memo.

On Jan. 21, 2009, DOL released a final rule administering the provision of investment advice under the ERISA's prohibited transaction provisions. Subsequently, Labor officials drew out the applicability and effective dates of the final regulation from March 23 to May 22.

No word yet on what will be accomplished during the second extension other than changing of seasons.

Tip of the Day: Hit all the right target dates next month

Mark your calendars, pros; there's some don't-miss action going on at Capitol Hill next month regarding target-date funds.

The first date to put in your Outlook is June 18, when the Department of Labor and Securities and Exchange Commission will hold a joint one-day hearing on the issues (read: abysmal '08 performance) surrounding target-date funds.

According to a press release from the agencies, the hearing will "examine the need for additional guidance given the importance of these investments to the retirement savings of investors." By "importance," they mean the large number of participants with savings in these funds. (Last year, 53% of 401(k) plans use target-dates as the default option.)

The hearing will cover topics like "portfolio composition, risk, and disclosure," according to DOL's website. Not very specific, is it? That's why the second don't-miss date is June 10 -- the day the agencies say they'll release the hearing agenda.

The last date to mark is June 5. That's the deadline for written requests to testify at the hearing. Make your voice heard! Send requests to e-ORI@dol.gov, or to Office of Regulations and Interpretations, Employee Benefits Security Administration, 200 Constitution Ave., N.W., Washington, D. C. 20210.

Yay or Nay: Is swearing at work okay?

Two surveys find differing opinions on whether it's okay to swear at the workplace, and I want to get your thoughts, pros.

According to a poll by SurePayroll, 80% of respondents believe that even seemingly innocent swearing on the job can be interpreted the wrong way and have negative consequences, even though 40% admit to swearing themselves at least occasionally and 11% actually think swearing can boost employee morale.

Another study from researchers at the University of East Anglia (in Norwich, England) finds that embracing your inner Blago can "reflect solidarity and enhance group cohesiveness, or as a psychological phenomenon to release stress," according to study director Yehuda Baruch.

The study also discovers younger workers are more tolerant of profanity, and that women swear more than you might expect of the fairer sex and execs are less profane than the rank-and-file.

So, is swearing at work okay -- yay or nay?

Tip of the Day: Raise the roof (on HSA limits)

The Internal Revenue Service recently released a notice outlining 2010 minimums and maximums for health savings accounts plans and high-deductible health plans.

For calendar year 2010, the annual HSA contribution limit for an individual with self-only HDHP coverage is $3,050, up $50 from 2009. For an individual with family coverage under a HDHP, the new limit is $6,150, up $200 from 2009.

The 2010 minimum on HDHP deductibles, for self-only HDHP coverage, jumped to $1,200 (up $50 from 2009), and $2,400 (up $100 from 2009) for family coverage. The 2010 maximum on HDHP out-of-pocket expense increased to $5,950 (up $150 from 2009) for self-only HDHP coverage and $11,900 ($300 from 2009) for family HDHP coverage.

Related EBN coverage:
What's in it for me?
Offering answers to 'What's happening to my health plan?'

Overheard @: 'We had a $3 billion investment loss'

If the recession drags on, it will be a red-hot summer for the PBGC -- emphasis on "red."

In a report from BenefitNews.com, the Pension Benefit Guaranty Corp. reports that the agency’s underfunded liabilities for its single-employer insurance program hit an all-time high of $33.5 billion, surpassing the former record of $24 billion in 2004.

“The reason that our deficit grew is not because of investment losses, rather because of more plan terminations coming through the agency since the last fiscal year,” Constance Markakis, senior attorney advisor in the legislative and regulatory department at PBGC, said late last week. “We had a $3 billion investment loss on our $63 billion assets portfolio. Also, 70% of our assets are invested in fixed-income.”

Still, the recession and the stock market decline means more defined benefit plans are substantially underfunded, thus seeking distressed terminations. “The $33.5 billion includes both actual terminations and probable terminations, which are terminations that we predict will occur within the next year,” explained Markakis.

PBGC insures the pensions of about 33.8 million workers and retirees in about 28,000 private-sector DB plans under its single-employer insurance program and 10.1 million participants under its multiemployer program in about 1,500 plans, according to the Employee Benefit Research Institute.

Tip of the Day: Wait! You forgot your 401(k)!

When an employee leaves, I know you must have your offboarding procedures: take their security card, give them a COBRA application, perhaps conduct an exit interview. But somewhere in those procedures, I beg of you to remind them to take their 401(k)s with them.

New research from Charles Schwab shows 43% of assets held by 401(k) participants who left their jobs in the first quarter of 2008 had not been moved a year later.

And no, there's nothing terribly wrong with that, but participants should be encouraged to be active and engaged about what they do with those savings. “We urge people to educate themselves on their options when they leave a job, especially if they expect to be out of work without access to a savings plan at a new job,” says Rene Kim, Charles Schwab senior vice president.

“In many cases, rolling an old 401(k) into an IRA can be a strategic move, because it is tax free, there is no penalty, and an IRA provides more investment choices,” Kim continues. “A rollover IRA can also keep retirement savings more top of mind. People who leave money in a previous employer’s 401(k) plan often forget the money is even there, which can result in asset allocations falling way off balance based on an individual’s savings objectives and risk tolerance.”

And while rolling savings into a new employer's plan also is a good move, Kim (and every other retirement expert on the planet0 strongly warns against cashing out.

“Unless there is a dire and immediate financial need, cashing out a 401(k) is almost always a bad idea,” Kim says. “Cashing out eliminates the power of compounding savings, and people generally find it very hard to get back on track once they begin tapping retirement savings for shorter term needs.”

Overheard @: HSA enrollees have no regrets

As more employers switch to CDHPs and HSAs to fight the good fight against health care costs, they have greater reassurance that the plans will be well-received by employees, as two new surveys show HSA participants have few regrets about switching to the plans.

In an online survey by OptumHealth, 82% are content with their accounts and 74% would recommend an HSA to a friend. The online survey involved 500 HSA owners and was conducted in February and March.

Further, countering the charge from opponents that HSAs are only for the healthy and wealthy, America’s Health Insurance Plan reports that almost half (49%) of HSA holders live in neighborhoods with median incomes under $50,000, according to 2000 Census data.

AHIP also finds about 8 million Americans are covered by an HSA-eligible insurance plan. The study also reveals that HSA owners are forward thinkers when it comes to financial and physical well-being. For instance, 64% have asked about generic options for medication and 47% have queried their physicians about charges.

HSA accountholders also believe that people need to become more engaged in their health care, with 83% of respondents agreeing that consumers should research and comparison shop their health care options as they would for a new television set. Additionally, 72% said that individuals should be responsible for helping to manage their health care costs.

Related EBN coverage:
Readers sound off on March editorial [on HSAs]
CDHPs praised, ROI panned

News You Can Use: Republicans reveal health care reform proposal

Us EBNers don't believe in duplicating efforts, so rather than rehash the new Republican-led health care proposal here, I'll just link you to the writeup from Benefits Explained, the blog from EBN sister title Employee Benefit Adviser.

The key buzzterms you'll want to note, though, are: tax credits, health insurance exchanges and no mandates. And no, you didn't miss anything; the plan does seem to remove employers' tax exemption for providing health benefits. Let the debate begin!

Tip of the Day: Mandating health risk assessments is an ADA no-no

Some employers have taken the bold step in recent years to mandate employees to participate in health risk assessments to obtain group health insurance. However, a new informal letter from the Equal Employment Opportunity Commission says that such a requirement is one bold step forward but two legal steps back, writing that the mandate is a violation of the Americans with Disabilities Act.

In part, the letter reads: "Although the Equal Employment Opportunity Commission has not taken a formal position on this issue, this office believes the policy you described would violate provisions of the Americans with Disabilities Act that require disability-related questions or medical examinations of employees to be job-related and consistent with business necessity."

I understand the EEOC's position, but in this economy, if every dollar in health savings isn't "business necessity," I don't know what is. What do you think, pros? Comment and let me know.

Click here to read the full text of the EEOC's letter.

News You Can Use: SCOTUS rules against crediting maternity leave in pension calculations

The Supreme Court ruled yesterday that women who took maternity leave before the enactment of the Pregnancy Discrimination Act of 1978 don’t have a legal claim in requiring employers to apply that leave on pension accruals.

In AT&T Corp. v. Hulteen, the Supreme Court had to decide whether the telecommunication giant was correct in refusing to calculate pregnancy leave incurred prior to 1979 in determining pension benefits.

In 1968, Hulteen took pregnancy disability leave for eight months. However, when she retired in 1994, she realized her pension checks were reduced because the eight months were not calculated as service time toward her pension benefits.

By a 7-2 vote, the Supreme Court overturned a lower-court decision stating that AT&T had violated the PDA by treating pregnancy-related disability leave differently from other disability leaves.

Although PDA requires employers to accord women who take pregnancy leave the same benefit as employees who take other types of temporary disability leave, AT&T argued, in part, that the court could no longer rely on previous case laws on retroactive principles because of a recent Supreme Court decision that limits applying federal statutes retroactively.

The majority of justices agreed. “Congress provided for the PDA to take effect on the date of enactment, except in its application to certain benefit programs, as to which effectiveness was held back 180 days,” Justice David Souter wrote.

Justices Ruth Bader Ginsburg and Stephen Breyer dissented: “Congress did not provide a remedy for pregnancy-based discrimination already experienced before PDA became effective,” Ginsburg wrote. “I am persuaded by the Act’s text and legislative history, however, that Congress intended no continuing reduction of women’s compensation, pension benefits included, attributable to their placement on pregnancy leave.”

Related EBN/BenefitNews.com coverage:
AT&T ordered to credit pregnancy leave in calculating pensions
HR policy high on Washington agenda

Tip of the Day: Widen your wellness tent

In a report for BenefitNews.com, Associate Editor Lydell Bridgeford writes about a study from Rutgers University that finds 46% of highly educated and affluent workers report that their employer offers a wellness program, while only 25% of employees with a high school education or less say the same.

In addition, 45% of salaried workers say they have access to some type of healthy lifestyle program through their employer, compared to 35% of hourly workers, and 45% of employees with incomes of $70,000 or more noted they have wellness benefits, compared to 21% of those making $35,000 or less.

To be effective, wellness programs need to truly be for all. I'd encourage you to take another look at your wellness offering for hourly and lower-income employees to make sure the health-fair big top is big enough.

News You Can Use: Don't forget to submit your Benny noms!

Hey pros, there's only a couple weeks left to nominate yourself, a colleague or a client for the 2009 Benny Awards, presented by EBN and sponsor VSP. Click here for a full description of the award categories and information on the nomination process. Nominations close June 5.

I know the last year has been a tough one, so the judges and I are very much looking forward to being inspired by your stories of taking financial lemons and making lemonade for employees and their families. Good luck!

Overheard @: EBN's Contributing Editors take on benefits' 'biggest challenge'

In a special extended episode of EBN's podcast series "Five Minutes With ...", our eight featured columnists draw on their unique expertise to answer, “What is the most important challenge currently facing benefits professionals and how can they best meet that challenge?”

Click here to download the podcast, and click below to read more from and about EBN's columnists:

* Karrie Andes
* Nancy Bolton
* Jill Hudgins
* Jerry Kalish
* Betty Long
* Mark Nadler
* Frank Palmieri
* Michael Puck

Tip of the Day: Weighing the pros and cons of 401(k) loans, distributions

During the recession, more employees are taking tomorrow's savings to pay for today's needs -- taking 401(k) loans, hardship distributions or cashing out their plans altogether.

EBN legal eagle Frank Palmieri writes this month that while some employers seek to protect employees and only allow loans for limited purposes and others employers even restrict hardship distributions, it's important to understand the basic rules in making business decisions to allow or not allow such distributions. Click here to read his column.

Wish You Were Here: Dave Thomas Foundation names this year's Best Adoption-Friendly Workplaces

Particularly in these economic times, adoption benefits seem to be one offering that can help employers do well by doing good.

At a time when financial uncertainty could discourage some people from adopting a child, many employers are staying committed to providing adoption benefits to their workers. Such offerings could enable a family to proceed with adoption plans, and allow employers to provide or maintain a valued but inexpensive benefit, despite the cost-cutting environment.

“The economy has not affected the continued increase in the number of adoption benefit policies nationwide,” notes Rita Soronen, executive director of the Dave Thomas Foundation for Adoption. “It’s the one benefit employers can add without negatively impacting the bottom line. Even though [adoption benefits] are popular with employees, utilization rates are extremely low. Adoption benefits give companies an affordable opportunity to help their employees and impact the lives of children without families.”

The foundation recently rolled out its annual list of the Best Adoption-Friendly Workplaces. Click here to read EBN's report, written by Managing Editor -- and new adoptive mom! -- Leah Carlson Shepherd.

Related EBN coverage:
* Adoption benefits mature in the workplace
* Employers honored for best adoption benefits
* Helping fill out the family tree

Tip of the Day: 5-point plan to developing a total-comp plan

Employers today are facing some of their most difficult decisions when it comes to one of their most important asset: their employees, writes Elliot Dinkin in this month's EBN. Layoffs, salary and retirement plan freezes, pay cuts, health care benefit reductions - nothing is off the table in this recession as companies look to cut costs.

Clearly one who feels your pain, Dinkin outlines a five-point plan to developing a long-term total comp strategy to help you take a fist to the recession. For more on rethinking total comp, read this month's EBN cover story, "No stone unturned."

News You Can Use: Life insurance coverage eroding

The recession has nearly all employees and their families recasting how they separate "wants" and "needs." Apparently, more are taking life insurance out of the "need" category, and it's showing in sales of life coverage.

In a report in this month's EBN, Greystone Benefits’ Joe Vogt tells Senior Editor Robert Whiddon that workers aren’t reaching deeper into their pockets for voluntary life or other worksite offerings like they used to, even if they only cost a few dollars a month.

According to Vogt, “Where they would say, ‘Well, you know, $7 a week that’s not bad. I can afford $350 a year’ — they’re not doing that anymore.”

To read the full report, "Crumbling coverage," click here.

Tip of the Day: Take the long view; invest in vision benefits

According to a new study released yesterday from VSP, vision benefits help save employers -- ka-ching! -- nearly $3 billion in health care costs each year, associated with the treatment of chronic diseases detectable via an eye examination.

Analyzing costs at five major corporations with a total 90,000 employees, VSP finds that early detection of diabetes, hypertension and high cholesterol yielded such savings in the first year alone, directly related to health plan, disability and employee termination costs.

Specifically, companies save nearly $2,900 annually on disease management costs for each employee with diabetes, when the disease is detected early.

When the findings are applied to the past three years for each of the five VSP clients in the study, the results show that nearly 2,000 members received early treatment for diabetes, high cholesterol and hypertension as a result of their annual eye exams. During that time, each of the five companies realized cost savings of at least $204,000 and as much as $968,000.

When the findings are applied to VSP’s entire membership of 55 million over one year, the results show that:
* Of the nearly 1.5 million people with diabetes, 20% received early treatment as a result of their eye exam.
* Of the close to 2.2 million people with hypertension, 30% received early treatment as a result of their eye exam.

Overheard @: Readers sound off on HSA editorial

Never in my wildest dreams could I have imagined the response to my March editorial, "I regret enrolling in an HSA." For all the mail I've received since it was published — which ranged from congratulatory to condescending to critical — I am heartened by the vigorous debate regarding the future of our nation's health care system and that, if this response is any indication, benefits stakeholders will continue to be a powerful voice in that ongoing dialogue.

Thanks to all for writing. Click here to read a sampling of the mail I've received, edited for space and grammar.

Tip(s) of the Day: Steps to measuring employee financial stress

Who needs just one tip when you could have 8?

In this month's EBN, new Contributing Editor Mark Nadler, an economist and professor at Ashland University in Ashland, Ohio, and president of financial stress reduction firmVincuro, outlines an eight-step plan to show HR executives how to measure the extent and cost of employee financial stress in their organization. Click here to read his column.

News You Can Use: Is Boston the new Toronto?

I know most of us are only accustomed to hearing reports of extended wait times to see physicians come from other nations, so findings revealing long (I mean loooong) wait times here in the U.S. may come as a shock to you.

In a recent report on BenefitNews.com, Associate Editor Lydell Bridgeford reveals that, according to a new survey, for some patients, seeing a medical specialist can mean waiting more than two months.

Merritt Hawkins and Associates, a physician search and consulting firm, conducted a survey of 1,162 medical offices to track the average time needed to schedule a doctor appointment in 15 large metropolitan areas. The firm focused on medical specialties, such as cardiology, dermatology, obstetrics/gynecology, orthopedic surgery and family practice.

For example, Boston had the longest average doctor appointment wait times: 70 days to see an obstetrician/gynecologist, 63 days to see a family physician, 54 days to see a dermatologist, 40 days to see an orthopedic surgeon, and 21 days to see a cardiologist.

Next on the list were Philadelphia and Los Angeles, with average doctor appointment wait times exceeding 45 days in some specialties, followed by Houston, Washington, D.C., San Diego, Minneapolis, Dallas, Miami, New York, Denver, Portland, Seattle, Detroit and Atlanta.

Overall, wait times tracked in the survey varied from one day to one year. “Due to the doctor shortage, finding an available physician can be challenging today, even in large urban areas where most doctors practice,” explains Mark Smith, president of Merritt Hawkins and Associates.

Smith believes if access to health care is expanded through a national reform plan, then seeing physicians in a timely manner would be even more problematic for many patients nationwide.

Tip of the Day: 3 tips on tech for the price of 1

Today only, I'm giving you the recession-special deal of three tips for the price of one (free)!

According to Watson Wyatt, reviewing your tech footprint and ID'ing ways to trim inefficiencies from your IT processes can cut costs and bood productivity -- two things everyone is going for these days.

“HR technology is ripe for review,” says Steve Hitzeman, senior leader in Watson Wyatt’s tech and administration solutions practice. “The goal is not only to find near-term efficiencies but also to ensure the organization is positioned for growth when economic conditions improve.”

Here are WW's three tips to recession-proofing your tech ops:

1. Optimize HR operational and service delivery effectiveness.
WW finds 61% of companies are looking to optimize their delivery model and vendors. Conducting a review of the current HR service delivery model — which includes a mix of HR technology, call centers and vendors — can result in dramatic cost savings.

Although many HR departments have adopted models to reduce administrative costs -- enabling HR to take on more strategic work -- the effort HR spends on administration has not changed significantly because most HR departments didn't follow through to effectively integrate different technologies.

2. Review and benchmark outsourced vendor contracts.
Many companies are not seeing the full effect of process efficiencies, cost savings or improved service they expected from their human resources outsourcing and related technology and service vendor contracts -- often have a patchwork of applications and service providers that aren’t fully integrated or optimized. WW estimates you can save between 10% and 20% once you reassess all of your vendor relationships.

3. Leverage Web 2.0 technologies to create a “consumer-grade” experience.
Leveraging Web 2.0 technologies — such as blogs, podcasts, wikis and shared teamsites — is key to managing today’s information overload and engaging employees. The generation currently entering the workforce has learned to communicate and collaborate using these tools and expects the same “consumer-grade” experience at work.

This can be achieved with corporate tools similar to Facebook, Twitter and YouTube available internally, significantly improving connectivity and employees’ experience of the company intranet.

“HR can take a page from the Internet playbook and benefit from the same tools that have driven the unexpected explosion in online productivity and innovation globally,” says Michael Rudnick, Watson Wyatt’s global intranet and portal leader.

Tip of the Day: 'Freak case' offers tips on how to conduct layoffs without litigation

A cover report in this month's EBN details the case of Claire Cole, whom the Massachusetts Supreme Court recently ruled should have received full disability benefits after she suffered a heart attack within an hour of learning she would be laid off due to budget cuts in March 2000.

Although the majority of legal experts in the labor and benefits field regarded the situation as a "freak case," as Alden Bianchi, of the Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. firm in Massachusetts puts it, experts do expect a rise in workplace litigation, concerning both termination and benefits, stemming from radial layoffs. Therefore, complying with the ever-changing legislative landscape is imperative if employers hope to make it through what promises to be challenging legal times.

Read the article for advice from our legal eagles on conducting layoffs without litigation.

News You Can Use: Employees favor cost-sharing carrots

New stats from the Employee Benefit Research Institute show that workers favor using lower-cost sharing as an incentive to individuals to improve or maintain their health. From their latest survey:

* 58% support lower cost sharing for patients who actively participate in a wellness program.
* 40% support lower cost sharing for patients who use treatments that have been scientifically proven to be effective for their medical condition.
* 34% support lower cost sharing for patients who choose high-performing health care providers. * 47% support lower cost sharing for patients who choose less invasive procedures to treat their medical conditions.

Not surprisingly, people who rate their health status as excellent or very good are more supportive of lowered cost sharing than those in not as good health, and opbese individuals and smokers in particular are less likely to support lowered cost sharing for engaged patients.

Tip of the Day: Get to your 'fighting weight'

Employers are fighting the downward economy and upward health care costs by changing weight classes, so to speak. Instead of heavyweight, high-cost HMOs and PPOs, companies are slimming down to become middleweights, shifting costs to employees through consumer-driven plans, changing insurance carriers and/or bridging gaps in core offerings with mini-med and voluntary benefits.

Although employers months ago began trimming their bottom lines, making changes to salary, hiring, training and benefits budgets, as open enrollment season fast approaches, benefit managers must educate employees about how those changes will affect their benefits options for next year.

In the opener to EBN's three-part Open Enrollment Boot Camp series, Associate Editor Kathleen Koster gets open enrollment tips from communication experts, who generally recommend revisiting open enrollment offerings and policies six to nine months beforehand to ensure enough time to effectively communicate with employees.

News You Can Use: EBN partners with Aetna to launch new blog

EBN and Web 2.0 strike again! I'm happy to announce Employee Benefit News, sister pub Employee Benefit Adviser and corporate sponsor Aetna have partnered to launch By The Numbers --an electronic extension of the popular, long-running feature in our print publication -- a compilation of key data points around current conditions and trends in employee benefits.

Check it out, and of course feel free to comment or post new discussion ideas.

Tip of the Day: During layoffs, remember FMLA compliance

Even though FMLA and making reductions in staff are complicated enough on their own, putting the two together can create an even bigger headache for employers. However, staying on top of FMLA compliance during layoffs is essential to preventing liability and lawsuits.

“The most important thing is going to be documentation,” says Tarun Metha, a labor and employment attorney with Bryan Cave LLP, told Associate Editor Kathleen Koster in a report for BenefitNews.com. When employers consider layoffs, including workers who are on FMLA leave, they should make sure that they carefully review the files of workers out on FMLA leave.
“Ask yourself ‘if this went to a judge or jury, would it be convincing or does this look like an ad hoc compilation?’” Mehta explains.

“If it’s a large reduction in force, you sometimes let go employees who don’t have any performance problems. [In this case,] you’d want to document how you came to that number. You want to look at your statistics and make sure you’re not laying off everybody on FMLA leave or everybody of a certain age group,” says Mehta.

Discrimination on severance packages can also occur when dealing with workers on FMLA leave. Mehta recommends calculating the amount of severance on objective factors, such as seniority or the department’s performance. He also explains that employers should base the package on the past six months of performance, as those on leave will have less data to contribute. The decision should be pro-rated or should stem from a different calculation.

In addition, while employers can give a larger severance to an employee because he or she is on leave, they cannot do the reverse, Mehta notes. “You can, however, offer them less if this decision is based on documented merit, though few employers elect to do this, as it can be difficult to prove who is owed what in a larger layoff.”

Making measured decisions and documenting an employees’ progress before they go on leave is strongly advised to combat the severe risks associated with unlawfully firing an employee already on leave.

“[Right now] you see a combination of layoffs and desperation…and so the likelihood of increased litigation is almost guaranteed,” says Mehta. Finally, employers should also be familiar with state laws concerning FMLA leave as more often than not these regulations are stricter than the federal baseline.

Related EBN coverage:
House Dems introduce new paid-leave bill

Wish You Were Here: Bright Horizons offers help to employers affected by H1N1 and during other public health emergencies

Although H1N1 pandemic panic seems to be waning somewhat, the recent international outbreak is an important reminder to individuals and employers to stay vigilant and prepared for disasters, including a global pandemic.

To give companies a hand, Bright Horizons Family Solutions, provider of employer-sponsored child care and back-up care, has announced a new emergency child care solution to help employers and working families manage during times of public health emergencies, like those related to H1N1 (swine flu), when schools are closed and regular child care is not available due to possible health risks.

“We are offering this new program to provide employers with immediate access to a wide range of back-up solutions that solve their business challenges and support the best practices in preventive health measures,” says Bright Horizons CEO Dave Lissy. “In keeping with our core mission, this service provides children with excellent care, gives parents the peace-of-mind they need to be present and productive at work, and offers employers creative answers to real time business needs.”

Back-Up Care Advantage: Crisis Care Assist provides employees of Bright Horizons clients with access to a nationwide network of in-home child care providers and payment for care they arrange within their family or existing social network. Through the program, care is also available any time of day or night and for any duration necessary, which can be especially beneficial to hospital workers, for instance, who may have to work overnight shifts or extended hours due to high demands in the face of a national health emergency.

The service can be implemented within 48 hours for even large multi-site employers.

Tip of the Day: Before you conduct layoffs, read this

A new survey from Work+Life Fit, Inc. finds 94% of full-time employees are willing to save jobs by changing or reducing their schedule, or taking a pay cut.

In addition:
* 60% would take additional unpaid vacation days or furloughs.
* 48% would share their jobs with colleagues.
* 47% would take a cut in both pay and hours
* Just under a third would take a month or more unpaid sabbatical.

"Layoffs will always be a possibility. [However], it's not an all or nothing choice -- flexibility or layoffs," says Cali Williams Yost, CEO, Work+Life Fit, Inc. "Hopefully CEOs and others planning job cuts will learn that a 5% layoff can sometimes cost more than a 5% pay cut. All options need to be considered."

Wish You Were Here: Mars Drinks forms partnership to be cleaner and greener

It's rare that a company could combine two things I truly love -- coffee and promoting greener living -- but it seems Mars drinks has done it.

Mars Drinks, makers of single-serve beverages served in offices and law firms around the country, is partnering with TerraCycle to help decrease the amount of waste from its packaging. TerraCycle will take used FLAVIA fresh packs and turn them into high-quality office products such as pencil cases and notebooks — and compost coffee grounds once they’ve been brewed.

The TerraCycle partnership is the latest addition to “Thirsty for Change,” Mars Drinks’ sustainability platform that includes:
* Achieving Rainforest Alliance Certification for their 3 most popular beverages -- House Blend, Kona Blend and Breakfast Blend. This certification ensures that the coffee used in FLAVIA’s fresh packs comes from farms where forests are protected; rivers, soils and wildlife are conserved; and workers are treated with respect, paid decent wages, properly equipped and given access to education and medical care.
* Changes to the brewer, fresh packs, cups merchandiser and rail to be more green, including using recycled materials and consuming less energy.
* An innovative waste-to-energy program that turns used fresh packs into energy. If all used fresh packs were included in this program, enough energy would be generated to light up to 20,000 homes for a year.

Inspired? Click below for EBN coverage on going green:
* HR/benefits firm focuses on "green awareness" services
* Telework: A green solution for the 21st century's employee crisis

Tip of the Day: Revisit, revise your disaster preparedness/response plan

In light of the swine flu outbreak, it's a good idea for employers to review and perhaps update their disaster preparedness/response plans to specifically address what individual employees and your company as a whole will do in case of a pandemic.

I recently spoke with Aon Consulting's Ken Groh, who shared his advice for how HR/benefits pros -- generally the lead authors on such plans -- should shape/reshape their policies should the number and severity of swine flu cases worsen. Click here to download the podcast, and here to download Aon's resources and news updates on swine flu.

Of course, the best source for info and updates is the Centers for Disease Control and Prevention swine flu Web site.

News You Can Use: Pick a card, any card

Okay, full disclosure: This data comes from a company that sells prepaid benefit cards, but still -- if you're looking to implement an HSA, HRA or FSA, a survey from Evolution Benefits shows that a benefit card could make all the difference.

Health care consumers report the availability of benefits cards positively influenced their decision to sign up for tax-favored accounts, including FSAs, HSAs or HRAs, Evolution finds. Benefit cards also made accounts easier to use and more effective.

The survey was created to gauge the effectiveness of three program components: cardholder communication; benefit card usage; and the benefits of having a card associated with a health care account. Evolution Benefits developed and conducted the survey, which was distributed to MasterCard cardholders at 10 employers in various industries.

Two-thirds of the nearly 900 respondents indicated that availability of the card influenced their decision to sign up for the benefit, while almost three-quarters said that having a card made using their account funds easier. The majority of consumers commented that they have encountered few – if any – problems and know exactly where the card can be used.

Card communication, in fact, was rated as good to excellent. As a result, 92% of the respondents said they knew where and how to use the card – and which items are eligible for pre-tax treatment based on IRS guidelines. In addition, 87% of respondents found it advantageous to have point of service substantiation.

Do you offer a benefits card? How well is it working for ya? Comment and let me know.

Tip of the Day: Legal considerations for furloughs

I received this week from Mercer citing alternatives to layoffs, furloughs and suspending 401(k) matches, while still cutting costs. About halfway through, I saw this nugget:

"...furloughs may prompt scrutiny from the Department of Labor since U.S. labor laws prevent employers from requiring salaried employees to reduce the number of weekly hours worked like they can do with hourly employees."

You may already know that, but it was news to me. And even if you knew, it never hurts to be reminded, right?

At any rate, Mercer also offered some alternative approaches to traditional cost-cutting measures without harming your employment brand or diminishing your resources of talent:

"These solutions involve cutting pay in exchange for enhanced paid-time-off banks and offering leaves of absence in monthly increments at reduced pay levels. Instituted as either a voluntary or involuntary measure, these alternative approaches cut workforces in the short-term while maintaining employment of critical talent over the long-term. The benefits are numerous – availability of essential employees once business improves, option to restore salaries and paid time-off to original levels, strong employee morale and additional cost-savings by not having to rehire workers."

News You Can Use: Study names GPOs as 'unsung heroes' of health care reform

Time to get in with the in-crowd? A new study looking at the performance of group purchasing organizations (GPOs) shows the organizations can save billions in annual health care and related costs savings. And let's be honest: Who doesn't want to save every dollar they can?

GPOs -- entities that achieve health care cost savings by aggregating their health care buying volume and then using that leverage to negotiate discounts with manufacturers, distributors and other vendors -- have the potential to save the health care system some $36 billion, according to a study of 429 hospitals and over 3 million hospital admissions by Dr. Eugene S. Schneller, a principal for Health Care Sector Advances, Inc. and professor at the Arizona State University School of Health Management and Policy.

Schneller's research, "The Value of Group Purchasing 2009: Meeting the Needs for Strategic Savings," finds GPOs can save:
* $6.8 billion in hospital pharmaceuticals.
* $8.5 billion in medical/surgical purchases.
* $1.9 billion from the cardiology implant market, either directly or indirectly by providing members with GPO purchased goods or reference pricing from directly engaging the marketplace.
* $840 million in attributed savings from the orthopedic implant marketplace.
* $1.8 billion in reduced hospital purchasing costs by eliminating the need for hospitals to comprehensively carry out strategic sourcing, contracting and other key GPO activities for inpatient pharmacy, general medical products, orthopedic products, other clinical products and housekeeping products.

With those kinds of numbers, GPOs are worth a look, no? Is your company part of a GPO or considering joining one? Comment and let me know.

Tip of the Day: With annuities, it's all about how you say it

We've all heard the saying, "It's not what you say, it's how you say it." Benefits communications experts certainly know this to be the case, but it appears that it's also true of consumers and annuities.

New research from TIAA-CREF Institute finds that that "framing" -- using certain methods and media to present annuities to consumers -- can significantly affect consumers' preferences.

Overheard @: Sabbaticals may help prevent layoffs

This sounded like potato po-tah-to to me, but in an exclusive to BenefitNews.com, the folks from yourSABBATICAL make their case for not only why an unpaid sabbatical isn't a euphemism for layoff, but also why implementing a sabbatical program could help employers prevent conducting actual layoffs.

Read the report here, and let me know. Are sabbaticals and furloughs softer terms for layoffs?

Tip of the Day: HHS guidance on HITECH amendments to HIPAA

Oh, just when you thought HIPAA couldn't get any more complicated, along comes HITECH (Health Information Technology for Economic and Clinical Health Act ), which amends notification procedures when a breach has occurred in protected health information.

The Health and Human Services Department recently released guidance on what counts as “unsecured” information -- if it is not secured through the application of a technology or methodology that renders it unusable, unreadable, or indecipherable to unauthorized individuals and that meets standards specified in guidance published by the government, according to law firm Ballard Spahr Andrews & Ingersoll.

Complying with a 60-day statutory deadline for issuing that guidance, HHS has published information and a request for comments on these technologies and methodologies. Read up, then let me know what steps you're taking to comply with the new normal on protected health info.

News You Can Use: Time for Gen Y to grow up and buy up

I recently read news from MetLife that many Gen Y workers lack disability and life insurance and thought, "There go those youngsters thinking they're invincible again."

Less than half (46%) of full-time Gen Y employees have disability insurance, compared to 59% of their older colleagues, and about one-third of Gen Yers have no life insurance, MetLife reports.

Even more disturbing is that MetLife finds 49% of surveyed Gen Y employees are married and 46% have children. I know times are tough (53% of Gen Yers told MetLife they're living paycheck to paycheck), but young workers at least need to be getting basic coverage.

Income protection is important enough when you're single, but when you have someone else (especially little someones) depending on your income, it's time to grow up and buy up, so to speak.

What do you think? Do your benefit communications for disability and life insurance specifically target Gen Y? Are such customized efforts working? Comment and let me know.

Tip of the Day: Use Mental Health Month to separate fact from fiction

While the current recession is hitting employees hard financially, it may be taking even a greater toll on their mental health. A 2008 survey from the American Psychological Association found that 80% of Americans say the economy is a significant source of stress. Among those surveyed, 49% said they felt nervous or anxious; 48% reported feeling depressed or sad.

May is Mental Health Month, an opportune time to educate workers about fact vs. fiction of behavioral health issues. Marie Apke, COO at Bensinger, DuPont & Associates, points out four common myths and facts about mental health:

Myth 1: Stress causes mental illness.
Fact: Stress may occasionally trigger an episode or cause symptoms such as anxiety or depression, but persistent symptoms appear to be biological in nature.

Myth 2: There’s no help for people with mental illness.
Fact: There are more treatments, strategies and support than ever before. In fact, 80% of individuals with depression can be treated successfully. Further, the majority of people with behavioral health disorders improve when they receive appropriate treatment.

Myth 3: Mental health problems are best treated by a primary care physician or a general practitioner.
Fact: Mental disorders should be taken as seriously as any potentially chronic and disabling medical condition. That is why diagnosable mental disorders are best treated by a trained mental health professional, such as a psychiatrist, psychologist, or other clinician specially trained to diagnose and treatment mental health problems.

Myth 4: Depression is just a normal part of life; everyone gets depressed when bad things happen.
Fact: Being sad or feeling blue is a normal part of life, and everyone feels this way from time to time. Depression, however, is not normal. Depression interferes with a person’s daily life and there are times they cannot function normally.

Click here for more information and tools about Mental Health Month.

News You Can Use: NBGH releases issue brief on health care disparities

Perhaps great minds think alike. Fresh off of EBN's April coverage of health care disparities, the National Business Group on Health las week released an issue brief, “Eliminating Racial and Ethnic Health Disparities: A Business Case Update for Employers,” part of a two-year major initiative to help employers reduce racial and ethnic health disparities in the workplace and improve the quality of health care for minority populations.

NBGH has partnered with the Department of Health and Human Services’ Office of Minority Health to strengthen ongoing partnerships and build new business-community coalitions to help reduce racial and ethnic health disparities. One outcome of this initiative was the development of information and tools to help employers address disparities.

“Some employers go to great lengths to attract a diverse workforce. But they may not realize that these populations have diverse health needs and may experience different treatments when they seek health care,” says Helen Darling, NBGH president. “Despite employers’ best intentions, the fact is that disparities in health and health care exist, even among employees with equal benefits. We believe this issue brief will be an important tool to help employers take on the challenge of reducing health disparities.”

Were you aware of health care disparities facing miniorities? What steps are you taking to help your company address them?

Tip of the Day: Help cure 'Mattressitis'

A rarely talked about but common condition, "mattressitis" is the "urge to withdraw assets intended for retirement and hide them under one's mattress."

As the economy has worsended, so has the condition among U.S. workers. To help employers combat mattressitis, Mercer has launched a new website, FeelBetterAboutRetirement.com.

“Planning for retirement in a volatile and rapidly changing economic environment can be a major challenge, which is why we are proactively addressing our participants’ anxieties with this interactive educational program,” says Suzanne Nolan, director of marketing and communications for Mercer’s outsourcing business. “By candidly addressing the challenges that participants can particularly relate to in this economy, we feel that we can improve employee engagement and empower employees to make decisions that are consistent with their financial goals.”

The initiative is based on key findings from the 2008 Mercer Workplace Survey, which found 43% of participants lack confidence in their ability to calculate and plan for how much money they may need in retirement.

“While plan sponsors can feel encouraged by the fact that employees still consider saving for retirement a priority, our findings emphasize the need to increase communication to participants about the benefits of maintaining a long-term investment strategy," Nolan says. "Employees consistently report that they rely on employers and their plan administrators more than any other source for information about investing for retirement, and we will continue to support plan sponsors in fulfilling that critical role.”

Overheard @: "60 Minutes" segment profiles collapse of retirement dreams

Fairly or unfairly, the 401(k) is getting an awfully bad rap lately. Among the most recent jabs was from last Sunday's piece on "60 Minutes," which profiled tales of ordinary Americans who -- although traveling different career and financial paths -- met the same fate: unable to secure the retirement they'd dreamed of, due to retirement savings losses.

The segment also interviewed 401(k) heavyweights David Wray, president of the Profit Sharing/401k Council of America, and Brooks Hamilton, who helped design retirement plans for some of the country's largest corporations.

Wray, maintaining that the 401(k) is the best retirement vehicle the nation has, commented that the economic collapse and resulting stock market plunge that contributed to the massive 401(k) losses is "not a 401(k) problem. That is our entire investment system. In America, it's a society based on freedom and choice and personal responsibility. We need to help [investors] understand these responsibilities and execute them to the best they can. 401(k) is part of that. There are no guarantees."

Hamilton, who called the quality of mutual funds in 401(k)s "mediocre," also observed that 401(k)s were meant to be part of a three-legged stool that included Social Security and defined benefit plans. However, he noted, "The three-legged stool, if you will, has gone to two legs and it's wobbly."

Click here to view the entire segment and comment here as well as at the CBS News site with your thoughts.

Tip of the Day: Migraines are costing you pain and productivity

I know you're looking to save every penny these days, so I wanted to bring your attention to this month's EBN report that finds the annual cost of migraines to employers is $50 billion in absenteeism, lost productivity and medical expenses, according to the National Headache Foundation.

Read the story and download a "Five Minutes With ..." podcast for details on how to effectively reduce employees' pain and the financial drain from migraines.

News You Can Use: Are well-being indices next on the stock ticker?

Will employers soon be following indices for the Dow and disease management all at once? Quite possibly, according to an April EBN report.

Some wellness experts believe that U.S. employers eventually will have access to daily and monthly well-being indices that capture and forecast, through statistically valid numbers, the physical, psychological and social health of the American workforce.

This could create, for example, a possible scenario in which 21st-century executives will tell bankers that their company deserves a higher line of credit than its competitors, given that the organization has a higher well-being index score, demonstrating that it's more productive and likely has lower heath care costs.

Under this scenario, how would your company fare? Is this concept giving you food for thought regarding wellness? Comment and let me know.

Tip of the Day: Get target practice

It's ironic; thanks to the recession, target-date funds may have a bullseye on them. In EBN this month, one consultant said the funds' '08 performance was "like a bad Greek tragedy," and a high-profile senator recently teed up the funds for a closer look from lawmakers.

However, EBN contributors Bill Noyes and Steve Smith say the next generation of target-date funds hold promise through plan-specific solutions and, in a "Five Minutes With ..." podcast, Van Kampen Investments' Andrew Scherer outlines several ways for plan sponsors to assess and communicate target-date funds to get the best results for participants.

So, get to target practice, and let me know if you hit the bullseye.

Overheard @: Supreme Court to hear discrimination case that could affect hiring

Today, the Supreme Court is expected to hear Ricci v. DeStefano, a case involving reverse discrimination that could change the way companies hire employees.

The case involves a team of firefighters in New Haven, Conn., that took a promotion exam. All of the white firefighters passed, but the city threw out the results because no blacks would have been promoted, saying the exam had a "disparate impact" on minorities that would most likely violate the 1964 Civil Rights Act.

However, the white firefighters claim the action not to promote violated their rights under the Civil Rights Act. And in a related case, the city of Chicago last month paid a $6 million settlement to 75 white firefighters who said they lost promotions when their test scores were tossed out in 1986.

According to an alert from Pepe & Hazard LLP, the case could affect employers' hiring practices -- specifically, questioning whether they need to achieve racial parity be considered legal.

Comment and let me know your thoughts on this case, and the steps you've taken to safeguard your hiring/promotion practices from litigation.

Tip of the Day: Don't be dead wood

EBN contributor Jack Kwicien starts a five-part series this month on creating and executing a multi-year strategic benefits plan. He makes a strong case for why you should get started and pronto:

"In a difficult economy, you have to be even more adept at creating value for your company and employees. Many firms are in survival mode, so your company needs your best counsel as a benefits professional and superior results now more than ever. From your own self-preservation perspective, you don't want to be tossed out with the dead wood that will inevitably be axed in 2009."

I don't know about you, so I'm convinced! Do you have a strategic benefits plan in place or are your crafting one currently? What are some of your successes and stumbles? Let me know.

Yay or Nay: Can Congress produce a health care reform bill by summer?

Will the umpteeth time be the charm on efforts to reform the nation's health care system? Congress gets down to work this week tackling the difficult task of drafting universal coverage legislation by this summer.

To be blunt, the odds are stacked against them. Historically, efforts to get lawmakers to meet in the middle on health care have failed disastrously (just ask Secretary Clinton). Further, Republicans and Democrats currently are pretty far apart in their views on how and whether to provide health insurance to everyone.

But they are soldiering forth, even as Sen. Charles Grassley (R-Iowa) told the Associated Press, "This is the toughest issue we have ever taken on — every part has got a chance of blowing up."

It seems all options are on the table -- individual or employer mandates and taxing benefits among some of the proposals -- and as the debate heats up along with the weather this summer, EBN will bring you the latest updates. (Click here to troll our recent coverage.)

But can they do it? Is this year the year for health care reform? Yay or nay? Comment and let me know.

Tip of the Day: Texting and Twitter may actually boost productivity

Yessss! Finally, the news I've been waiting for -- thank you, Aon!

New research from the consulting firm reported on BenefitNews.com reveals that despite employers’ belief that Web 2.0 media may detract from productivity, workers — both millennials (born between 1980 and 2000) and non-millennials — are leveraging the technology to perform their jobs.

For example, 65% of non-millennials and 72% of millennials report using their company’s intranet for their job duties, while 25% of non-millennials and 38% of millennials utilize text messaging for work purposes.

In addition, 46% of non-millennials and 48% of millennials used instant messaging as part of their job assignments, while 13% of non-millennials and 20% of millennials belong to job-related social networks. About 8% of non-millennials and 13% of millennials used blogs in a work-related context.

As such, Aon encourages employers to embrace social media for employee communications purposes. Let EBN help; join our Facebook and LinkedIn groups and follow us on Twitter.

News You Can Use: Nominations for the 2009 Benny Awards are open

I know the last six months or so have been rough for you, pros, and you deserve a long vacation and a big bonus. I can't give you that, but I can offer you the opportunity to get some applause, a pretty cool trophy and a decent-sized check for a job well done.

To take advantage, nominate yourself or a colleague for the 2009 Benny Awards, presented by Employee Benefit News in partnership with corporate sponsor VSP Vision Care, the nation's largest provider of eyecare wellness benefits. The Bennys recognize excellence and innovation in the employee benefits/human resources field, and are organized into five categories:
* Benefits Professional of the Year
* Benefits Leadership — Health Care
* Benefits Leadership — Retirement Planning
* Benefits Leadership — Judges' Choice
* The VSP GetFit Award


The awards will be presented at EBN's annual Benefits Forum & Expo, to be held this year Sept. 13-15 in Atlanta, thus the applause and trophy I mentioned.


Now, about that check: The winner of the Benefits Professional of the Year award receives a cash award of $3,000 and $1,000 in travel expenses to attend BF&E '09. Each of the other three leadership award winners will receive $1,000 apiece and $750 in travel expenses.

Click here to read more about the awards and access the nomination form, which must be completed online. If you have any questions, e-mail me at kelley.butler@sourcemedia.com. Good luck!

Tip of the Day: 'Look before you leap'

As the recession drags on, more employers are reducing or eliminating their matching 401(k) contributions. A new report from Mercer, "Suspending the 401(k) match – Look before you leap," cautions employers to have a full understanding of the implications and potential pitfalls of taking this step.

“Distressed organizations may feel they lack sufficient time or resources to carefully consider the impact of contribution reductions or to evaluate alternative approaches. But the effort invested up front could save considerable time and expense later in dealing with unintended consequences,” says Bill McClain, Mercer retirement consultant.

“While the loss of one year’s employer contribution won’t have a huge impact on an employee’s retirement benefit, it could represent yet another incremental loss to an already-weakened benefit,” McClain observes. “Suspending contributions also results in a lost opportunity to purchase equities at historically low prices. These implications need to be weighed against the organization’s need to preserve capital.”

Companies should not lose sight of their longer-term business objectives, Mercer warns. “Many organizations will be better off identifying cost saving that will have only a minimal impact on those groups of employees that will be the most critical to helping them move forward once the economy improves.”

In addition, the regulatory implications of a match reduction or suspension can vary greatly from plan to plan. Employers maintaining an IRS safe harbor design are subject to specific rules or even restrictions on suspending or reducing contributions during the plan year. Other plan designs may offer more flexibility in terms of changing employer contributions, but even these plans must satisfy various regulatory requirements.

In particular, employers need to understand whether a plan amendment is required and whether that amendment raises any anti-cutback issues.

Plan sponsors should determine whether language in past employee communications could be interpreted as a promise to provide ongoing contributions. Organizations with collectively bargained or other employment agreements in place may be prevented from making company-wide changes to DC contributions.

Overheard @: Stand by your plan

Samuel Clemens wrote in 1897 “The report of my death was an exaggeration.” Hopefully, the same can be said about the death of the 401(k), writes former EBN Contributing Editor Richard Quinn in a web-exclusive commentary for BenefitNews.com.

Click here to read his detailed defense of the 401(k), then comment and share your thoughts.

Tip of the Day: It's Earth Month, so 'PayItGreen'

April is Earth Month (Earth Day is April 22) and May is Direct Deposit Month, so use both as an opportunity to help save the planet and your company bottom line.

According to the folks at PayItGreen, paying employees via direct deposit has saved U.S. businesses a total of $6.7 billion over the past 10 years, an average annual savings of $605 million -- nothing to sneeze at in these tough times.

Breaking it down even further, the organization finds that in one year, if every U.S. employee with access to direct deposit used it, it annually can:
- Save 11,082,971 pounds of paper.
- Avoid the release of 105,709,380 gallons of wastewater.
- Save 4,105,889 gallons of gas.
- Avoid the release of 31,581,675 pounds of greenhouse gases into the atmosphere, equivalent to 112,329,703 miles not driven; 1,345,379 trees planted and 13,756,978 square feet of forest preserved.

Visit ElectronicPayments.org (click the Business tab) to calculate your company's specific payroll savings by using the direct deposit cost calculator.

News You Can Use: More speakers for BF&E '09 announced

Mark your calendars, pros, so you can join us EBNers in Atlanta Sept. 13-15 for our 22nd annual Benefits Forum & Expo. In addition to keynote speakers financial guru Dave Ramsey and former HHS secretary Michael Leavitt, you won't want to miss breakout sessions led by our great slate of speakers, including your fellow benefits pros:

* Bob Ihrie, Senior Vice President of Employee Rewards and Services, Lowe's Companies Inc.
* Daniel Cohen, Director, Health care Solutions, MasterCard Worldwide
* Lesley Leiserson Director, Benefits, The Home Depot
* Nancy Lanzgin, Director of Global Benefits, Staples
* Paul Gilles, Group Vice President, Compensation & Benefits, Time Warner Cable
* Tami Graham, Global Benefits Manager, Intel Corporation
* Mark Parabicoli, Associate Vice President & Managing Director Employee Benefits, Liberty Mutual
* Ed Golitko, Senior Director of Human Resources, EMC Corporation
* Karen Hamilton, Manager Benefits Administration, Wendy's/Arby's Group

... and more! Come cheer on your fellow pros and learn from their unique experiences as they speak on addressing the cost pressures and other challenges of providing employee benefits during a recession. Click here for registration information and other details.

Tip of the Day: Make the most of Financial Literacy Month

Today's retirement confidence numbers show how nervous employees are about securing their financial futures. But even before the recession, workers weren't exactly financial Einsteins. Now that economic conditions are working even more against them, this month's National Financial Literacy Month comes along at the perfect time.

“When money gets tight, a strong financial foundation is key to ensuring that you don’t get in over your head with uncontrollable debt,” Cate Williams, VP of financial literacy for Money Management International, says.


MMI had laid out 30 steps (one for each day this month) on the path to financial wellness. My apologies for not getting this out two weeks late! But surely, it's better late than never, and there's no reason you can't share these tips with employees into May and beyond.

News You Can Use: Retirement confidence at record low

EBRI's annual barometer of Americans' retirement confidence shows the recession has worn away workers' assuredness that their golden years will be happy, healthy and financially secure.

Released today, the 19th annual Retirement Confidence Survey posts a record-low 13% of respondents who say they are very confident of having enough money to live comfortably in retirement, down from 18% in 2008 and 27% in 2007. Also, in addition to more employees expecting to work full-time longer (89%), more respondents also are including part-time work into their retirement plans (72%).

“Our survey first picked up the drop in retirement confidence last year,” says EBRI's Jack VanDerhei. “Given the uncertainties that exist about economy, it is no surprise the downward trend has continued. By any measure, the two-year results amount to a very significant drop in workers’ and retirees’ confidence in their retirement prospects.”

To help shore up retirement savings, employees say they are:
* Reducing expenses 81%.
* Changing investments 43%.
* Working more hours or a second job 38%.
* Saving more 25%.
* Seeking financial advice 25%.

Have you noticed that the recession has depressed employees' retirement confidence and/or contributions? What are you doing to help them better prepare? Comment and let me know.

Tip of the Day: Updated info on collecting your AWP savings

On March 30, a District Court in Massachusetts made a final judgment to approve a class-action setlement involving First Databank and Medi-Span, two major publishers of drug pricing information.

The two firms were found to have inflated average wholesale prices (AWP) for some 400 brand-name drugs. AWP is the primary benchmark for most PBM discounts. Under the settlement, First Databank and Medi-Span agreed to roll-back the AWP on all drugs to a uniform 120% of the wholesale acquisition cost, effective Sept. 26.

With significant contract implications (and savings!) for benefits pros to consider, you can read a detailed summary of the ruling here and see EBN's coverage on taking advantage of PBM savings as a result.

News You Can Use: Employers expect cost hikes due to COBRA subsidy

This likely won't come as much of a surprise, unfortunately, but new survey numbers from Aon show 60% of employers expect their overall health care costs to increase as a result of implementing the federal COBRA subsidy.

Polling some 300 employers who attended recent Aon COBRA webinars, the consulting firm finds 40% expect their overall health care costs to increase 1% to 5% because of the subsidy; another 40 percent expect costs to spike between 6% and 10%; 12 percent forecast increases from 11% to 15%; 8% expect an increase of 16% or more.

“Typically, 5% to 10% of former employees enroll in COBRA, and we expect that number to increase to 14% to 18% as a result of the subsidy. As employers begin to plan for their 2010 health benefits, they must take the new COBRA subsidy costs into consideration,” says Tom Lerche, Aon’s health care practice leader. “Most plan sponsors continue to experience a 7% to 11% health care cost trend rate, so additional costs from this subsidy will impact overall health care plan strategy for 2010.”

In addition to higher medical plan costs from utilization and adverse selection, plan sponsors will have higher administrative and communication costs, he adds.

In other words, start building these costs into the budget, pros. And don't cost your company more money by not having all the information. Visit ebn.benefitnews.com, keyword "cobra" for in-depth EBN reporting on the subsidy and how you can prepare/protect yourself.

Tip of the Day: New Part D subsidy resources available

I know you have your hands full to overflowing in dealing with the COBRA subsidy, but I wanted to let you know the government is providing extra resources on another important subsidy for benefit pros: the Medicare Part D subsidy.

The Centers for Medicare and Medicaid Services has released new resources for employers applying for the Part D retiree drug subsidy (RDS). CMS' new RDS User Guide includes information from many how-to documents on its Web site., along with FAQs addressing how to correct submitted drug costs, payment requests or retiree lists after an application has completed reconciliation.

Overheard @: Workers hunkering down for long recession

A new survey of 1,002 Americans by Econ4U shows how Americans are responding to the financial crisis. And although respondents appear to be saving more, the overall outlook is pretty cloudy.

* 76% expect the recession to last for at least another year.
* 64% have less than six months of savings in case they lose their job. 39% have two months or less.
* 64% know someone who has lost their job in the past six months.
* 40% have begun saving more because of concerns about the economy.
* 19% have experienced trouble accessing credit in the past six months.
* 83% of survey respondents said they expected a tax refund this year. 31% were planning on spending the refund, 29% expected to put it into savings and 18% said they would use it to pay off existing credit card debt.

"When two-thirds of Americans do not have enough savings to pay their bills for six months if they lost their job, it is clear that the skills of budgeting and saving skills have become something of a lost art in this country,” says James Bowers, managing director for the Center for Economic and Entrepreneurial Literacy. "Increased adult education in economics and personal finance would address the concerns of many Americans and give them the tools to protect themselves during this economic downturn.”

Well, there you have it, pros. What is your company doing to make workers more financially savvy? Is it an employer's duty to provide such an education? Comment and let me know.

Also, read more from EBN and BenefitNews.com on financial education.

Tip of the Day: COBRA model notice error? No biggie.

Us EBNers got a little nervous this week, after one of us received an e-mail blast screaming of a "Material Error in DOL New Model Notice for COBRA Subsidy."

Long story short, the adviser that sent the message was concerned that in DOL's model notices for notifiying ex-employees of the COBRA subsidy, the election period on the notices doesn't jibe with federal regulations for the subsidy.


According to the rules, a COBRA-eligible ex-worker has 60 days to elect coverage from the date of termination of coverage or the date of the notice, whichever is later. However, DOL’s model notice does not contain language noting the 60-day election period may begin as of the date of termination of coverage.

Thus, the adviser worried, if employers sent a COBRA election package to ex-employees before their group coverage ended, the model notice implies the COBRA election period is shorter than it should be. Such an interpretation could leave employers open to litigation from ex-workers for not allowing the full 60-day election period, as well as on the hook for incurred medical claims.


However, EBN Contributing Editor and benefits attorney Frank Palmieri says, "I do not see it as a 'sky is falling' issue. Most employers do not send the notices early. I don’t see it as an error, but rather that the notice can be improved to address early issuance. Few employers are going to deny COBRA during this transition period, given all the confusion."


Sigh of relief, eh pros? However, that's surely not to say the COBRA subsidy hasn't been a tough issue to wade through. How are you coping? Comment and let me know.

Overheard @: JD Power's Dougherty discusses health plan satisfaction stats

Try as you might, it seems most workers still don’t understand their health plan. That’s one of the top-line findings from J.D. Power & Associates' third annual national study on health plans satisfaction.

And according to JDP's Jim Dougherty, executive director of the firm's helath care practice, what employees do know, they don't like much. “Members still tend to be least satisfied with the information and communications they receive from their health plan -- the third most important factor in overall satisfaction,” he says. “Consequently, improving member communications can go a long way in driving higher levels of overall member satisfaction -- particularly since only one-third of members say they fully understand how their health plans work.”

You can find the nuts and bolts of the study -- which covers more than 33,000 members in 131 plans across 17 regions -- online, but I chatted with Dougherty recently to get the inside scoop on what he found most interesting about this year's findings.

First, although member satisfaction regarding communication is on the bottom rung, Dougherty mentioned that "plans that are moving customer service online are gaining in satisfaction." Really? I would've thought removing the human element from plan communications would have been a driver in lowering satisfaction. But no, Dougherty told me: "If a Web site is designed well and members can find what they need easily, it appeals more to members since it takes less time to answer routine questions."

Dougherty also noted that "every one of the plans in the Northeast had a significant increase in satisfaction" and that California plans posted strong numbers as well. What's going on there on the coasts? In a word, reform. Dougherty seems to believe that the buzz surrounding Massachusetts' health reform initiative and California's efforts to do the same was a rising tide that lifted all boats, so to speak.

One last nugget involved Dougherty's take on JDP's numbers regarding "plan tenure," specifically when it came to consumer-driven plans. Employers that had a rocky first year with a CDHP should take heart, as the survey shows that although member satisfaction in their first year of a CDHP is pretty low, year two seems to mark a turning point.

"In year two, they're much more satisfied," Dougherty's told me. "They understand the plan better, their health care spending needs better, how to manage an account and the tax savings better. It takes about a year to 18 months for them to get there, but if they can get to the second year, they are happier."

Tip of the Day: Got COBRA questions? The IRS offers answers

The Internal Revenue Service has published a notice that contains 58 questions and answers addressing the COBRA premium subsidy. Only 58? Well, I suppose it's a good place to start.

Yay or Nay: Is the Wal-Mart, Caterpillar Rx benefit model better for employers?

Wal-Mart is expanding a pilot program that eliminates copays on generic drugs purchased at its stores to more employers.

The program already operates at the construction company Caterpillar, where employees who purchase generic prescription drugs at a Wal-Mart or Sam's Club pharmacy are waived the $5 copayment. Some see the program as a way to help employers reduce health care costs tied to prescription drugs by trimming the work they have to do pharmacy benefit managers.

“The easiest thing to do is look at the number the PBMs spit out,” said Todd Bisping, pharmacy benefits and informatics manager at Caterpillar, the Chicago Tribune reports. “As more and more companies realize we just can't blindly assume what's going on is best for us, they're going to start digging into it and find the same thing.”

Have you done the digging that Bisping mentioned? If so, what did you find? Will the Wal-Mart-Caterpillar model be a better one for employers and employees on a wider scale? Yay or nay?

Tip of the Day: What you don't know could kill you

Statistics show that 2 million acts of workplace violence occur each year, costing more than $13.5 billion in medical costs, nevermind leaving psychological scars that may never heal.

To help you reduce the risk of such an incident ever affecting your company, HUB International will hold a free webinar on Thursday, April 9 at 12 p.m. ET led by Paul Michael Viollis Sr., CEO of Risk Control Strategies, and Todd Macumber, HUB vice president and corporate practice leader of the company's international risk consulting.

They will address your obligations under federal law, your liability exposure and offer practical advice on how to reduce your risk and create a safer work environment. Click here to register.

Wish You Were Here: CEO offers employees 'mini-stimulus package'

I was watching CNN last weekend (yes, I watch CNN for fun), and saw a story about Jack Windolf, CEO of Bollinger Insurance, who gave all 434 Bollinger employees $1,000 from his own pocket -- calling it a "mini-economic stimulus package."

Turns out, after Windolf sold controlling interest of Bollinger last year, he received a $500,000 bonus. Acknowledging that Bollinger's employees "are the ones that do all the work. They are the ones who bring the successes," Windolf wrote checks to the employees, and the only strings attached were that they spend the money on themselves to help move the needle on our limping economy.

I think Jack Windolf is my new favorite CEO, and not just because he made his staff $1,000 richer at a time when they likely sorely need it. But because he didn't just say employees are his company's biggest asset; he backed it up with action.

I know times are tough and not every company CEO has $500,000 just lying around. But it doesn't take a lot to make employees feel valued and appreciated, and they need it now more than ever.

What low-cost or no-cost ways are you using to show employees your appreciation? Comment and let me know.

Tip of the Day: Increasing awareness key to decreasing health disparities

This month, EBNers Kathleen Koster and Leah Carlson Shepherd report data regarding the health disparities affecting minority employees and tips for how employers can increase awareness to decrease care gaps.

A survey of more than 1,500 benefit managers by the Washington Business Group on Health found that nearly half believe that ethnic health care disparities "weren't a problem" for their employees, although 80% had never asked minority employees if their race affected their health care.

However, as Koster and Shepherd reveal, such disparities do in fact exist and are costing employers people and money. Read more in this month's EBN cover feature and health care section.

News You Can Use: Is outsourcing out?

The economy has everyone doing more with less, and as far as HR/benefit pros are concerned, they're doing it in-house.

The HR/benefits outsourcing industry has skidded to a near halt, as Helen Neale, an HR outsourcing research manager at NelsonHall, a business process outsourcing market research firm tells EBN this month: "Organizations are actually pulling back from outsourcing initiatives because they've got other things that they need to be worrying about ... The kinds of deals that we're seeing are much smaller in size. Organizations do not want to deal with the amount of investment both in time and money that those huge deals require."

Hear more from Neale on outsourcing trends in a "Five Minutes With ..." podcast. Click here to download the audio.

Tip of the Day: Remember there's strength in numbers

Think your company would benefit from an onsite clinic but can't afford the investment? Trying getting by with a little help from your friends, so to speak.

In a "Five Minutes With ..." podcast this month, Associate Editor Lydell Bridgeford interviews Dr. Bruce Hochstadt, who leads Mercer's worksite clinic consulting group. Hochstadt lets listeners in on new trends in onsite and near-site health clinics, including the growing number of employers banding together to share one clinic to serve all employee populations. Read the accompanying article, “All together, one: Economic woes unite worksite health clinics,” in EBN April 1.

Overheard @: Build your network with myhrwebsite

The world (wide web) is full to bursting of social networking sites -- so much that it's easy to get network fatigue. However, a new option is just for HR pros to help them build their own web community.

Called myhrwebsite.com, you can sign up to lend your voice in asking and answering these questions and more:
* Who’s a good vendor for a specific HR/benefits service?
* Word of mouth referrals for a job opening?
* HR/benefits trends in others’ organizations?

Users submit a brief form to submit a question, and once a day, everyone in the community receives an e-mail with all the questions submitted by myhrwebsite.com members. You can answer the questions you have expertise in, and ignore those on topics that you’re not familiar with. (Questions are prescreened to prevent spam.)

Check out the site and report back, pros! Comment and let me know what you think.

Tip of the Day: Listen to this podcast before you cut employee perks/rewards

I know the economy is brutal, and you are working overtime to keep your CFO at bay regarding staff and benefits cuts. In this environment, cash rewards and other perks may seem like easy cannon fodder.

However, before you make those cuts, listen in to Associate Editor Kathleen Koster's "Five Minutes With ..." podcast with Razor Suleman, CEO of Toronto-based I Love Rewards. Suleman reveals innovative ideas on how to spend little but gain big results in productivity and morale through reward programs. Read more comments from Suleman in EBN April 1.

News You Can Use: Happy National Employee Benefits Day

I love any excuse for a party, but this is a genuinely good reason: The International Foundation of Employee Benefit Plans is leading today's celebrations for National Employee Benefits Day.

Although the day is not as widely celebrated as New Year's Eve or Mardi Gras, amid the current recession, it's more important than ever to cheer the successes of employers and employees alike in maintaining and wisely taking advantage of benefits plans. Further, the day is an important one to focus on education and awareness about benefits.

This year, IFEBP is encouraging benefits pros to use the day as an opportunity to educate themselves and their participants on the importance of retirement security. Visit the Benefits Day site (www.ifebp.org/benefitsday) for free videos and other resources for marking the day.

How are you spending NEBD? Comment and let me know.

News You Can Use: Got an FMLA headache? EBN's your aspirin

According to a recent poll on HR.BLR.com and Compensation.BLR.com, 49% of HR pros said FMLA is the law that gives them the biggest headache.

EBN is here to help, offering plenty of in-depth FMLA information -- which 9 out of 10 doctors agree is the best cure for an FMLA migraine (no, not really, but it's great stuff all the same). Click below for some of EBN's "greatest hits" for FMLA:

* Some doctors charge steep fees for FMLA forms
* Firms adjust to FMLA revamp
* I'm on FMLA leave
* BFE: Up your FMLA ante with these helpful tips

Tip of the Day: Retirement plans may be affected by TARP

I got another one for you to take to your legal eagles. According to a blog alert from Winston & Strawn, the Treasury Department will participate in a Public-Private Investment Program to buy up "legacy securities" (a much kinder, gentler term for "toxic assets").

If all goes right, fund managers will create a private investment vehicle with funds raised from private investors. So how do retirement plans fit in?

According to W&S, "This likely means that ERISA 'benefit plan investors' should be limited to 25% of any investment fund. Some managers may be willing to comply with the ERISA restrictions, in which case, assuming the structures can also be vetted for ERISA compliance, their investment fund could accept more than 25% of its investments from benefit plan investors."

I know the "ERISA compliance" part perked you up, so get your legal folks on it and comment back with your thoughts.

Overheard @: Outplacement benefits become latest sign of the times

Clearly, no employer wants to layoff valued, hardworking staff, but the recession has left many companies with little choice. However, I hear that some employers are doing their best to take the sting out of such action by offering outplacement services.

According to reporting from Workforce Management, a survey from outplacement firm Lee Hecht Harrison that finds the top reason companies use outplacement is to maintain positive relationships with employees.

Such goodwill doesn't come cheap. WM reports that outplacement offerings -- ranging from web-based services to in-person coaching -- can cost anywhere up to tens of thousands of dollars per employee. Too much to pay in these recessive times? Perhaps. But EBN reporting finds that even making small overtures to your former employees can help bring them back into the fold, especially if you never wanted to lose them in the first place.

What do you think? Would/has your company considered adding outplacement services to its benefits slate? What is the potential ROI? Comment and let me know.