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.

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!

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.

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.

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?'

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.”

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.

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.

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.

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."

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.

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.

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.

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.

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

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."

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.

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."

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.