Thursday, April 30, 2009

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.

Wednesday, April 29, 2009

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, 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?

Tuesday, April 28, 2009

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.

Monday, April 27, 2009

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?

Friday, April 24, 2009

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,

“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.

Thursday, April 23, 2009

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.

Wednesday, April 22, 2009

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.

Tuesday, April 21, 2009

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.

Monday, April 20, 2009

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 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 Good luck!

Friday, April 17, 2009

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

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

Thursday, April 16, 2009

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 (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.

Tuesday, April 14, 2009

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.

Monday, April 13, 2009

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, keyword "cobra" for in-depth EBN reporting on the subsidy and how you can prepare/protect yourself.

Friday, April 10, 2009

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 on financial education.

Thursday, April 9, 2009

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."

Wednesday, April 8, 2009

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?

Tuesday, April 7, 2009

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.

Monday, April 6, 2009

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.

Friday, April 3, 2009

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, 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 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.

Thursday, April 2, 2009

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 ( 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 and, 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

Wednesday, April 1, 2009

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.