SHRM Compensation & Benefits Newswire 

 

1/20/12

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Pricing War Could Cut Drug Costs

Starting January 2012, plan participants at most companies that contract with Express Scripts for pharmacy benefit management (PBM) services can no longer get prescriptions filled at any of Walgreen's approximately 8,000 U.S. locations. The two companies were unable to reach an agreement to renew the contract under which Express Scripts paid Walgreen to fill its clients' prescriptions, reports CFO.

Sean Brandle, vice president of the national pharmacy practice at The Segal Co., said the dispute could lower prescription-drug costs. "I think this case points toward more plan sponsors looking at limiting retail networks. The light bulb goes on: if a major PBM can exclude a major retailer, then why couldn't a company that doesn't use Express Scripts decide it doesn't want certain pharmacies in its network?"

• The company's PBM could then go to the network's remaining pharmacies and negotiate better pricing based on the volume boost they'd get from a big pharmacy's removal from a network, said Brandle.

1/19/12

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Options for 401(k) Plans Get More Affordable

As employers prepare for new federal rules requiring them to explain how fees affect 401(k) returns, industry providers are rolling out better, lower-cost plans, reports USA Today.

 The Department of Labor rule “is a big driver of change,” says Mike Alfred, CEO of BrightScope, a provider of independent retirement plan ratings and investment research. “Everyone recognizes that fees will be under the microscope.”

• The new plans are aimed at helping small and midsize employers, which in the past have been unable to offer their workers the lowest-cost plans.

1/18/12

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Americans Raiding Retirement Savings

Loans taken from retirement savings accounts jumped 20 percent in 2011 across all demographics, according to a survey by Aon Hewitt, reports the New York Times. Among lower earners, loans from retirement savings leapt by as much as 60 percent.

The Employee Benefit Research Institute's (EBRI) annual retirement confidence survey hit a new low in 2011 with 27 percent of workers saying they're "not at all confident" they'll have enough for a comfortable retirement. Almost 15% expect to work until at least the age of 70, up from 11 percent in 2006, the article reports.

• EBRI found that more than 20 percent of those aged 50 or older changed their medical prescriptions to save money and almost as many had skipped or postponed doctor appointments for the same reason. Almost 28 percent reported having difficulty paying their monthly bills.

1/17/12 

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Employer Health Fair Saves Employee's Life

By participating in a health fair through his employer, James learned he had prostate cancer. Without the screenings, he would likely have not received the appropriate care in time to effectively treat his cancer, reports the Herald-Citizen.

• James now works to encourage others to participate in these types of screenings.

1/16/12

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Secrets of the 401(k) Millionaires

The one characteristic that differentiates the winners from the non-winners here is contribution rate—a high percentage of those million-dollar savers had constant participation and high contribution rates, reports the Wall Street Journal.

• Someone who earns $35,000, saves 12% to 13%—including a company match, gets an annual raise of 3.5%, and annual returns of 7% would save a $1 million.

1/16/12

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Older Generation Think Workers Moan Too Much About Work/Life Balance

Many retirees believe that the young workers of today moan too much about their work/life balance, indicating they believe they already have enough employee benefits, reports Thomsons Online Benefits, citing a study by global insurance firm Aviva.

• Research from Aviva revealed that 67% of people who have left work are of the view that the new crop of workers complain about their work/life balance too much. Furthermore, 86% of retirees believe they could do a better job if they were in the roles of today's younger workers.

1/13/12

5% of Patients Account for Half of U.S. Health Care Spending

Just 1% of Americans accounted for 22% of health care costs, which was about $90,000 per person, reports USA Today, citing the latest government data. Just 5% accounted for 50% of health care costs, about $36,000 each.

• Among patients in the top 10% of health care spenders, 60% were women and 40% were age 65 or older.

1/13/12

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Employees Angle for Higher Raises

The average increase in base salary is expected to be just 3% in 2012, up only a hair from last year's 2.9%, according to human resources consulting firm Mercer, reports CNNMoney.com.

Still, managers are concerned about retaining top talent, which explains why the best performers will see a brighter 4.6% on average.

• Most companies planned for 2012 salaries by the end of 2011, but finalizing the budget seeps into January and February.

(To learn more, see the SHRM Online article "Compensation Planning 2012: Proceed with Caution.")

1/12/12 

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Fee Disclosure Deadlines May Be Delayed

Sources at the Department of Labor (DOL) have indicated, off the record, that the department might once again push back an April 1 deadline for retirement plan service providers to disclose detailed fee information to plan sponsors, which in turn would push pack the May 31 deadline for plan sponsors to disclose this information to plan participants, reports AOL Daily Finance.

The final version of the service provider disclosure rule is not scheduled to be published until the end of January. DOL insiders say that service providers need to have enough time to prepare before complying with the rules.

• Separately, brokerage firms protest that requiring them to report how much they are paid to distribute mutual funds through 401(k) plan brokerage windows will be onerous because they offer thousands of mutual funds from hundreds of companies and often have different fee structures for each one, reports Reuters. The information will not benefit plan sponsors because of the sheer volume, according to the protesting firms.

(To learn more, see the SHRM Online articles "Preparing for Service Provider Fee Disclosures" and "In 2012, 401(k) Disclosures Will Shine a Light on Fees.") 

1/12/12 

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Health FSA Dollar Limit for 2013 Impacts Some Fiscal Year Plans Now

The Patient Protection and Affordable Care Act limits salary deferrals that may be made under a health flexible spending account (FSA) to $2,500 in “taxable years” beginning on or after Jan. 1, 2013. However Section 125 cafeteria plans that include health FSAs subject to the dollar limit, and that follow a fiscal rather than calendar plan year, need to take steps now to apply the dollar limit over their 2012–2013 plan year, reports the website E is for ERISA.

• For the plan year beginning April 1, 2012 and ending March 31, 2013, participants deferring the maximum amount would be limited in the amount they could deferring over the period April through December 2012.

1/11/12

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Communicating Value of Roth 401(k)s

While there are many reasons why the Roth 401(k) may be an attractive option for higher-income employees, what has surprised many are the benefits it offers participants across the income spectrum, making it advantageous for a wide range of employees and plans, according to a commentary by Vanguard Investments.

While the percentage of Vanguard-recordkept plans having adopted the Roth option is near 50% after only six years in existence, an important challenge for sponsors and investment providers is encouraging more participants to consider this option. Participant adoption in Vanguard plans that offer the Roth has risen much more gradually to only 9% by year-end 2010.

• "The key issue facing sponsors and providers is the need to communicate the feature effectively," according to Vanguard.

(To learn more, see the SHRM Online article "The Roth 401(k): A 'Value Add' for Your Employees.")

1/10/12

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Insurance Bought in the Workplace Can Have Drawbacks

Many people assume insurance offered by their employer is a better deal than they can get on their own. But while the premiums can be lower, such policies have drawbacks, reports the Wall Street Journal.

Premiums from new sales of life, disability, supplemental-medical and other types of insurance sold through work sites totaled an estimated $5.4 billion in 2011, up from $2 billion in 1997. But whereas traditional insurance is subject to state laws and disputes can be tried before juries, with the potential for punitive damage awards, policies sold through employers typically fall under the Employee Retirement Income Security Act (ERISA)—with a federal judge ruling on disputes and no damages allowed.

• In disputes over traditional policies, judges often interpret ambiguities in policy language in consumers' favor on the basis that the insurer wrote the contract, experts say. With ERISA-governed policies, insurers often have discretion to interpret policy language, and a judge can overrule a coverage decision only if the insurer has advanced an illogical policy interpretation or acted in an "arbitrary and capricious" manner

1/9/12

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New Regulation Targets Hidden Fees in 401(k) Plans

If you are a 401(k) plan sponsor, by April 1 each service provider must supply you with a revised service agreement that includes a complete description of the services they provide, a full disclosure of the costs of each service, a disclosure of any direct or indirect compensation they receive from associated providers, information on whether they assume fiduciary responsibility for each function and any potential conflicts of interest and how they are managed and mitigated, reports the Washington Post.

• By May 31, according to another new regulation, the same information must be shared with plan participants.

(To learn more, see the SHRM Online articles "Preparing for Service Provider Fee Disclosures" and "In 2012, 401(k) Disclosures Will Shine a Light on Fees.")

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However, DOL May Again Delay 401(k) Fee Disclosure

The Department of Labor (DOL) may push back the April 1 deadline that 401(k) plan providers were given to comply with new rules about fee disclosures, according to several people who had spoken to officials at the department, reports Reuters.

For 401(k) plan sponsors and participants, the delay could mean waiting at least three more months to find out what they are paying for their plans. A comment letter by the Securities Industry and Financial Markets Association requested a 12-to-18-month extension on the deadline from when the service provider rule finalized, which is expected by the end of January. Separately, the ASPPA and the Council of Independent 401(k) Recordkeepers asked for at least 12 months after the rule is finalized to comply with it.

• But sources familiar with the discussions at the DOL said providers should not expect a long delay on the deadline to comply with fee disclosures. "The (department) is definitely flexible, but they do want it to happen this year," one person who had spoken to DOL officials told Reuters.

1/6/12 

Workplaces Ban Not Only Smoking, But Smokers

An increasing number of employers won't hire applicants whose urine tests positive for nicotine use, whether cigarettes, smokeless tobacco or even patches, reports USA Today.

Each year, smoking or exposure to secondhand smoke causes 443,000 premature deaths and costs the nation $193 billion in health bills and lost productivity, according to the Centers for Disease Control and Prevention.

• After several companies adopted smoker-hiring bans a couple of decades ago, 29 states and the District of Columbia passed smoker-protection laws, leaving and 21 states with no rules against nicotine-free hiring.

1/6/12

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IRS Issues Guidance for Reporting Health Cover Costs on Employees' W-2s

On Jan. 3, the Internal Revenue Service issued guidance answering questions employers have raised about a health care reform law provision that will require them to report the cost of health care coverage on employees' W-2 wage and income statements, reports Business Insurance. The guidance can be read here.

The guidance makes clear that employers can—but are not required to—report contributions to health reimbursement arrangements in calculating health care costs.

• In addition, the cost of providing coverage through employee assistance programs, wellness programs or on-site medical clinics is not required to be reported if the employer does not charge premiums for the coverage to COBRA beneficiaries.

12/5/11

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Shift from Defined Benefit Plans Is Not Increasing Wages

According to Towers Watson, only 13 of this year’s Fortune 100 companies offered new employees a traditional defined benefit plan in 2011, compared to 58 in 2000, reports SmartMoney.

Shifting from a defined benefit plan to a 401(k) plan generally will reduce required employer contributions from 7% to 8% of payrolls to a 3% employer match. The economists’ model would predict that lower pension contributions should lead to increased wages. However, employers shifting from a defined benefit plan to a 401(k) plan have not announced an offset of higher cash wages.

• The enormous divergence in pay and the emergence of non-qualified plans as the main form of pensions for upper management may have reduced the firm’s interest in the pension plan that benefits the rank and file.

3/4/11

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Message to Employees: Reasons to Boost Your 401(k) Contributions

Potential fixes to the Social Security system include raising the retirement age, reducing benefits or otherwise restricting eligibility requirements – all of which should encourage employees to consider boosting their 401(k) contributions, according to a column by Investopedia via the San Francisco Chronicle.

Pressure towards higher tax brackets as well as less favorable capital gains and dividend tax rates also enhance the appeal of tax-deferred savings vehicles.

• Relatedly, via Business Insurance: Strategies to get nonnative speakers into retirement plans.

1/3/12

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More Employers Rewarding Healthy Workers with Cash

Some employers offer tiered insurance plans, allowing its healthiest employees, based on smoking status, weight and other biomedical factors, to pay the lowest premiums. Others penalizing unhealthy employees, like smokers, by adding a surcharge to their insurance rates, reports FoxNews.com.

• Some employers reward employees for losing some weight or reducing their cholesterol level, rather than meeting a certain “ideal” weight or cholesterol goal, making the goals more attainable for more people.

(To learn more, see the SHRM Online article "Finding Success with Progress-Based Health Incentives.")

11/29/11

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Federal Workers' Pay Gains Slowest In 10 Years,
Still Outpace Private Sector

The paychecks of federal workers grew at the slowest pace in a decade this year, held down by a partial pay freeze. But federal employees still did slightly better than workers in the private sector or at state and local governments, a USA Today analysis found.

Federal pay rose an average of 1.3% for the budget year that ended Sept. 30, according to newly released federal data. By comparison, the wages of private workers rose 1.2% during the period, the same rate as state and local government pay growth.

• None of the wage gains kept pace with inflation.

12/28/11

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Enacted: A 2-Month Extension of Payroll Tax Cut

A contentious measure to extend the payroll tax cut through February 2012 was passed by Congress and signed by President Obama on Dec. 23, reports the Washington Post.

The bill also extends unemployment benefits for two months, postpones trims in reimbursements to doctors who serve Medicare patients and tweaks the payroll tax reporting rules to lessen the burden on small businesses of implementing the two-month renewal.

• A release from the National Payroll Reporting Consortium states that "Establishing the proposed Social Security Taxable Wage limit of $18,350, to which a reduced 4.2% rate would apply through February 29, 2012, would require substantial reprogramming of computer systems," and that "programming of the magnitude that would be required normally takes a minimum of 90-180 days for an orderly transition.

(To learn more, see the SHRM Online article "President Signs Two-Month Payroll Tax Cut Extension,")

12/23/11

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Small Employers Fret Over Payroll-Tax Uncertainty

As sparring in Congress continues over how to extend the payroll tax cut, smaller take-home paychecks could hurt employee morale in 2012, reports the Wall Street Journal.

• The cuts would give workers earning $50,000 a year before taxes— roughly the median household income in the U.S.—an extra $1,000 in take-home pay.

12/21/11

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Concern Growing Over Deadlines for Health Care Exchanges

With many states unwilling or unable to get insurance exchanges operational by the health-care law’s deadline of Jan. 1, 2014, pressure is growing on the federal government to do the job for them, reports the Washington Post.

But health care experts are starting to ask whether the fallback federal exchange called for in the 2010 law will be operational by the deadline in states that will not have their exchanges ready.

• "No one knows whether the Supreme Court will invalidate part or all of the law next year; it is not clear how much funding will be available to launch and operate the federal exchange; and the outcome of the presidential and congressional elections could delay or derail the entire process," the paper reports.

12/21/11

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Two-Tier Pay System Brings Plant Reopening

Under its agreement with the United Auto Workers union, GM will be hiring mostly new workers for the plant who will start at $15.78 an hour, about half the prevailing rate paid to the company's production employees, reports the Los Angeles Times.

A two-tier pay system, adopted by airlines years ago and embraced more recently by law firms, could breed hard feelings among workers paid different rates for doing the same jobs. 

• With about 25 million Americans unable to find full-time work, many communities — and labor unions — have welcomed the return of factory jobs, accepting the cut in pay as part of the reality of today's economy and the global marketplace.

12/19/11

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401(k) Plan Participation Could Fall Victim to Health Care Affordability Test

Without modification, a proposed IRS health care reform affordability test could encourage some employers to drop programs intended to encourage employee participation in 401(k) plans, a benefits trades, reports Business Insurance.

Under the Patient Protection and Affordable Care Act, starting in 2014, employers are liable for an annual $3,000-per-employee penalty for employees whose required health insurance premium contribution for single coverage exceeds 9.5% of family income and the employees are eligible for federal premium subsidies to buy coverage through state insurance exchanges. In September, the IRS asked for public comment on a proposed safe harbor in which coverage would be considered affordable as long as the premium contribution for single coverage did not exceed 9.5% of an employee's W-2 wages.

• But in a comment letter to the IRS, the American Benefits Council said using W-2 wages to determine if the required premium contribution is affordable “seems to create a possible disincentive for employers regarding programs and features designed to increase employee participation” in 401(k) plans. W-2 wages are reduced by the amount of an employee’s pretax contributions to a 401(k) plan.

12/16/11

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Commuting Puzzle: Why Driving Is Rewarded Over Taking the Bus

About three million people in the U.S. are enrolled in pretax commuting plans of some sort, according to the nonprofit TransitCenter, reports the New York Times.

In the New York, Chicago and San Francisco metropolitan areas, roughly two-thirds of all employees had access to some sort of commuter tax benefit.

• Just a fifth or so of small companies in the survey offer it to their workers, although offering the benefit is not particularly burdensome. It’s possible for employers to save enough on their share of your payroll taxes to pay the fees to the companies that administer the plans, though they’ll still need to devote staff time to keeping track of it all.

(To learn more, see the SHRM Online article "Higher Tax Break for Transit Benefits Set to Expire at End of 2011.")

12/14/11

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Employer's Wellness Incentives Yield Results

Last year, MasterBrand, which has some 7,000 U.S. employees, started tying their insurance-premium contributions to their health-risk factors. Those who score poorly on measures such as cholesterol, blood pressure, body-mass index and tobacco use pay more each week, reports the Wall Street Journal.

The most a worker has to pay extra based on test results is $10.50 a week, while a person with the best health indicators gets a $2-a-week discount. However, Those who choose not to participate without a medical excuse pay an extra $37.50 a week in premiums.

• A worker who couldn't afford the penalty for refusing to participate said she went to a doctor for the first time in years, and learned she had high blood pressure, elevated cholesterol and diabetes, She started dieting and exercising, and says she has lost about 50 pounds.

12/13/11

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Gratuities and 401(k) Salary Deferral

There is no specific guidance on handling compensation paid in the form of a tip or gratuity in terms of 401(k) plan contributions and salary deferral, but there are some general guidelines from the IRS, reports consultancy McKay Hochman Co.

The tax-favored treatment of salary deferrals is contingent upon an employee deferring amounts that have not become “currently available” to the employee. A tip generally becomes currently available when it is physically received, thus making it seemingly impossible to become a salary deferral. However, there may be certain mechanisms that delay current availability long enough to allow tip income to be considered for salary deferral purposes.

• In a pooled tip arrangement, all tips earned by workers are collected and then allocated by the employer. While pooling tips avoids immediate constructive receipt problem and provides an opportunity for deferral, it is likely that workers who had not previously been required to pool their tips and whose income relies heavily on such income would be unreceptive to pooling just so they might participate in a 401(k) plan.

12/12/11

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DOL Clarifies e-Disclosure of Investment and Benefit Information

The U.S.  Department of Labor's Employee Benefits Security Administration revised its interim e-disclosure policy to clarify that investment information can be included on defined contribution plan benefit statements and can be furnished through websites, if certain conditions are met, reports Pensions & Investments.

The revised technical release updates an interim e-disclosure policy issued in September allowing DC plan administrators to provide fee-disclosure information to participants electronically. (See the SHRM Online article "DOL Issues Policy on Electronic Disclosure of Participants' 401(k) Fees.")

• The interim policy is in effect while EBSA takes input on ways to expand the standards for electronic delivery of employee benefit information.

12/9/11

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Companies Trim Investment Choices in 401(k)s

While the trend over the past decade has been for companies to increase the number of investment options in their 401(k)s—the median number of investments companies offer is now 18, up from 10 in 2001, according to consultancy Aon Hewitt—some companies are switching gears and reducing the number of options, or at least streamlining and simplifying their investment menus, reports MarketWatch.

Some employers fear that workers, overwhelmed with too many choices, are making mistakes. Simpler menus can help employers, too, by reducing the number of funds they have to monitor and evaluate on an ongoing basis.

• Index funds are generally viewed as having lower expense ratios and providing a simple choice for participants who want to go beyond target-date funds and do some of their own asset allocation.

12/8/11

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Earn More, Pay More for Health Coverage?

Ten percent of U.S. employers currently vary employee health care premium contributions based on salary, according to benefits consultant Mercer, reports NPR.org.

And more are considering moving in that direction in coming years as a way to avoid health law penalities that could be assessed if their workers' premium contributions exceed 9.5 percent of their household income.

• Some raise questions about whether an employee's wages are actually a good measure of how much he can afford to pay in premiums, particularly if there's a working spouse in the picture who earns a good salary.

12/8/11  

College Degree Still Key to Higher Income

Some 41% of students who come from families in the lowest income ranks move up to the highest two rungs if they get a college degree, according to research from the Pew Economic Mobility Project. But if they don't, only 14% advance that far, reports CNNMoney.com.

At the same time, 45% of those without a diploma stay stuck in the lowest tier, while only 16% of their counterparts with a college degree do.

• Many better paying jobs require more education and skills that workers can only get in college – although attending a "name" college isn’t necessary; skills training and a degree from at a community college can provide the necessary career and income boost. But without a bachelor's degree at all, many get stuck in dead-end jobs earning low wages.

11/21/11 

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Have the "HIPAA Police" Finally Arrived? HHS Launches Audit Program

The U.S. Department of Health and Human Services Office for Civil Rights (OCR) announced that it has begun formal auditing of covered entities under HIPAA, reports law firm Quarles & Brady LLP.

The action, along with increased penalties for not complying with HIPAA, may cause employer-sponsored group health plans to refocus on HIPAA’s requirements.

• The initial pilot project is expected to conclude in December 2012 after 150 audits have been conducted.

11/18/11

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The Smokers' Surcharge

More employers are demanding that workers who smoke, are overweight or have high cholesterol shoulder a greater share of their health care costs, a shift toward penalizing employees with unhealthy lifestyles rather than rewarding good habits, reports the New York Times.

Policies that impose financial penalties on employees have doubled in the last two years to 19% of 248 major American employers recently surveyed by Towers Watson. Next year, the practice is expected to double again.

• Current regulations allow companies to require workers who fail to meet specific standards to pay up to 20% of their insurance costs. The federal health care law raises that amount to 30% in 2014 and, potentially, to as much as half the cost of a policy. But some labor experts contend that employers can charge workers higher fees only if they are tied to a broader wellness program. 

11/17/11

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Few Small Businesses Claim Health Insurance Tax Credit

Small business health insurance tax credits went into effect in March 2010 as part of the health care reform law. But credits have been claimed by only about 14 percent of eligible businesses, reports Bloomberg Businessweek.

Tax preparers say it wasn’t lack of information about the credits that dampened participation, but the complex formula governing eligibility.

• The definition of an eligible business is challenging because it’s not based on the number of employees but on full-time equivalents (FTEs). For companies with many part time employees, the number of FTEs is often not transparent. Add in the requirement that different insurance plans—such as medical and dental—must be tested separately, then factor in the issue of average annual wages, and the credit was just too difficult for business owners to decipher.

11/16/11

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Businesses Weigh Keeping Health Benefits

While few will admit it out loud for fear of alienating their workers, some employers are considering dumping their health care plans by 2014, when the health care reforms are fully established, reports Forbes.

Starting in 2014, companies with 50 full-time employees or more will be forced, in an indirect way, to offer health insurance. If an employer does not offer health care, it must pay a $2,000 fine for each worker—excluding the first 30—if even a single one buys government-subsidized insurance from a state-run exchange. However, the penalty plus the still-unknown cost of buying insurance on the exchange may be far less expensive than the cost of employer-based insurance.

• “What I’ve heard is, ‘This is a no-brainer—we’ll just drop coverage in 2014,’” says Gary Kushner, a national expert in HR strategy and employee benefits and past chair of the National Small Business Association.

11/15/11 

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Supreme Court to Hear Challenging to Health Care Reform Law;
Decision Expected by June 2012

The U.S. Supreme Court has  agreed to hear a challenge to the 2010 health care reform law, setting the stage for oral arguments by March 2012 and a decision in late June, reports the New York Times.

The justices agreed to decide not only whether Congress has the constitutional power to require people to purchase health insurance or face a penalty (the so-called individual mandate), but if the mandate is not found to be constitutional, then how much of the balance of the law, the Patient Protection and Affordable Care Act, must fall along with it.

• The Obama administration, while arguing that the mandate is perfectly constitutional, has said that it is “absolutely intertwined” with two other provisions — one forbidding insurers to turn away applicants, the other barring them from taking account of pre-existing conditions. 

11/14/11  

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Veterans' Day: Time to Review Benefits for Vets

This Veterans Day, the Association of Corporate Counsel encourages employers to take a moment to evaluate their policies and practices with respect to veterans, service members and their families, reports Lexology.com.

The Uniformed Services Employment and Reemployment Rights Act (USERRA) guarantees an employee returning from military service or training certain reemployment rights and benefit protections. Employees with military family members may be entitled to take leave under the federal Family and Medical Leave Act, provided coverage requirements are met. Additional leave rights and benefit protections may also be available to service members and their families under applicable state leave laws such as Washington’s Military Family Leave Act and Oregon’s Military Family Leave Act.

• When faced with a potential leave request, employers of service members and their families should consult their legal counsel for assistance in navigating through applicable federal and state leave requirements.

 (To learn more about employee benefits for veterans, see the SHRM Online Military Benefit Issues article listing)

11/11/11 

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Flexile Work Actually Works

Imagine unlimited paid vacation and sick leave, with no mandated office hours. Chaos, right? Not according to a handful of award-winning employers profiled in a new report on effective workplaces, reports Fortune and CNNMoney.com.

At MeetingMatrix International, a communications firm based in Portsmouth, N.H., employees have no defined work schedules, unlimited paid time off, and meetings are optional. How do they ever get any work done? That's actually the only thing that matters: results.

• MeetingMatrix executives point to longer customer support hours, increased sales during a down economy, and 100% retention as evidence that their focus on the end results -- and not hours in the office -- works.

(To learn more, see the SHRM Online article "2012 'Bold New Ideas' Guide Highlights Workplace Flex Success.")

11/10/11 

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Wal-Mart Plans Ambitious Expansion into Medical Care

The nation's largest retailer is planning to offer medical services ranging from the management of diabetes to HIV infections,  reports NPR.org.

In health care, Wal-Mart has already flexed its super-size muscles when it comes to prescription drugs by offering generic drugs at $4 for a month's supply.

• Wal-Mart's efforts to partner with others on health care could help lower costs for some patients and increase access to primary care services. But the approach has detractors who contend that patients need a regular source of care from someone who knows their medical history.

11/9/11

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More Employers Offer Investment Advice, but It's Often Underused

A recent survey of profit-sharing and 401(k) plans found that 58% offered investment advice in 2010, most commonly online services, one-on-one counseling and telephone hot lines. That was up from 47% of firms surveyed in 2005, reports the Wall Street Journal.

Among large companies, 74% now offer advice or managed accounts to plan participants, up from 50% in 2009, says benefits consultant Aon Hewitt.

• However, only about a quarter of the people who have access to advice through their retirement plans actually take advantage of it, according to retirement-plan providers and firms that provide advice services. And most of those who do use advisory services neglect to provide the personal details that would make the advice more valuable.

(To learn more, see the SHRM Online article "Investment Advice Effective When Used, but Participation Lags.")

11/8/11

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Same-Sex Marriage: Firms Battle Federal Benefits Ban

Some of the most prominent corporations in the U.S. have weighed in against the fedreal ban on marital benefits for same-sex couples, saying the ban drives up employers' costs and makes them the agents of government-sanctioned bias, reports the San Francisco  Chronicle.

The 1996 law, known as the Defense of Marriage Act or DOMA, "conscripts (employers) to become the face of its discrimination," lawyers for 60 companies said in papers filed with a federal appeals court in Boston. Participants included Microsoft, Google, Aetna, Nike, Levi Strauss, Starbucks, CBS and Time Warner Cable.

• DOMA denies federal benefits, including joint tax filings, Social Security survivor coverage and immigration privileges, to same-sex couples legally married in their states.

11/7/11

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Increasing Medicare Age Could Lead to Higher Employer Costs

Congress' so-called deficit reduction "supercommittee" is down to the final weeks of deliberations in its efforts to come up with $1.2 trillion in budget savings. And one proposal that keeps cropping up is the idea of raising the eligibility age for Medicare, reports NPR.org

• Some costs would shift to employers because they'd have to continue to cover many of those people who'd continue to work. Some costs would also shift to those 65- and 66-year-olds themselves, if they're no longer working. They'd have to pay for their own insurance.

11/7/11

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Health of U.S. Workforce Continues to Decline, Driving Up Employer Costs

"The unhealthy behaviors of the U.S. workforce now cost employers an average of $623 per employee annually, reports Thomson Reuters, citing the firm's Workforce Wellness Index.

In 2010, about 14 percent of direct healthcare costs for the employed, privately insured population were directly associated with these six behavioral risk factors, according to the Thomson Reuters' analysis. That amounts to $623 per employee, with $425 of the overall cost attributed to high body mass index, which is used to measure obesity. That $425 figure represents a $25 spike per employee from 2009.

• Elevated blood glucose was the second most significant factor, accounting for nearly $125 per employee per year.

11/4/11

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Companies Reinstate 401(k) Matches, Hope Employees Retire

U.S. employers that suspended contributions to 401(k) employee retirement plans during the financial crisis are continuing to reinstate them, reports Bloomberg Businessweek, citing research by consultancy Towers Watson.

About 75% have restored matching contributions, according to the study. Of those that restored contributions, 74% have reinstated the match to previous levels, 23% are giving less and 3% increased their match, the survey found.

• One reason why employers might increase their contributions is to give employees who have chosen not to retire a financial incentive to “move out,” said Robyn Credico, a senior retirement consultant at Towers Watson. “When you think of it from the employer’s perspective, the older employees tend to be more expensive because they may earn more or their health-care costs are higher,” said Credico. “If the older employees don’t retire, it also means you can’t hire new people.”

11/3/11

  -----------------------------

Health Care Reform and W-2 Reporting: IRS Provides Details

In an Oct. 31 webinar, the IRS explained the new W-2 health care value reporting requirements, effective for 2012 W-2s issued to employees beginning in January 2013, as summarized by Ceridian Corp.'s Human Resources Legislation Blog.

According to the IRS, employers must report the total cost of all “applicable employer-sponsored coverage” provided to an employee. Applicable employer-sponsored coverage “is coverage under a group health plan that the employer makes available to the employee that is non-taxable to the employee.”

• Employers must report on an employee’s Form W-2 for the year 2012 the cost of major medical insurance, mini-med plans, on-site clinics, wellness programs and executive reimbursement plans. Excluded from the new reporting requirement are contributions to health savings accounts (HSAs), employee contributions to flexible spending accounts (FSAs) and the costs for items like long-term care insurance and stand-alone dental and vision coverages.

11/2/11

  -----------------------------

Some Help Getting Reimbursed for OTC Drugs

New IRS rules that went into effect this year under the health care reform law require that consumers with flexible spending accounts (FSAs) must have a prescription in order to use the FSA to purchase over the counter (OTC) medicines—even though a prescription isn’t required to buy them in the first place—reports the New York Times.

Aon Hewitt, a large administrator of flexible spending accounts, has seen a 90 percent drop in requests for reimbursement for OTC items, says Craig Rosenberg, the firm’s national practice leader for health benefits administration.

• FSAStore.com, an online store that sells only FSA-eligible items, has seen its sales of items affected by the eligibility change plummet because of the hassle of getting a prescription. To address the problem, if the customer provides their doctor’s contact information, FSAstore.com has teamed up with Wellpartner, a pharmacy services firm, to contact the physician’s office to obtain the prescription for processing.

11/1/11

----------------------------- 

Firms to Charge Smokers and the Obese More for Health Care

More U.S. employers are encouraging workers to voluntarily improve their health to control escalating insurance costs, reports Thomson Reuters.

Overall, the use of penalties is expected to climb in 2012 to almost 40% of large and mid-sized companies, up from 19% in 2011 and only 8 percent in 2009, according to an October survey by Towers Watson and the National Business Group on Health.

• "Nothing else has worked to control health trends," says LuAnn Heinen, vice president of the National Business Group on Health, which represents large employers on health and benefits issues. "A financial incentive reduces that procrastination."

11/1/11

----------------------------- 

Self-Funded Health Plans Can Be Less Expensive for Employers

Currently, 82.1% of U.S. employers with 500 or more employees self-insure their health benefits, according to a recent report to Congress by the U.S. Department of Health and Human Services (HHS). By contrast, just 25.7% of firms with 100 to 499 employees do so, and only 13.5% of those with fewer than 100 employees self-fund, reports Business Insurance.

However, that same HHS report noted that if attractively priced stop-loss coverage were available to small and midsize employers at lower attachment points, more would choose to self-insure. A recent survey showing a more than 10% jump in the sales of stop-loss coverage this year over last year indicates that already may be happening.

• Advocates of self-funding health benefits are fighting an attempt by New Jersey regulators to crack down on the practice among small businesses, Business Insurance also reports.

11/1/11

  -----------------------------

More Professional Women Choosing Time Over Money

A U.S. survey of women who had at least a college degree, were employed in a professional position and had at least a $60,000 annual income if single and $75,000 if married. Two of 3 of the women reported they would prefer to have more free time than a bigger paycheck, and 2 of 5 said they would be willing to accept less money for more flexibility, reports USA Today.

• In the survey, 92% of women say they value workplace flexibility, but a third consider it career suicide to ask for more flexibility in their jobs.

10/31/11

 -----------------------------

Health Care Plan for Fido

Pet insurance is a tiny piece of the financial services world but it's booming, reports Fortune.com.

• A typical plan might offer up to $20,000 a year in coverage for an average premium of $350 a year. Insurance may be based in part on zip code, making it more expensive for people in richer parts of the country.

10/31/11

  -----------------------------

High-Deductible Health Plans More Common On Employers' Menus

When employees in the U.S. sign up for coverage this fall during their company's annual enrollment period, nearly a quarter will face annual deductibles of at least $1,000, according to a recent employer survey by the Kaiser Family Foundation, reports NPR.com.

At small companies, the high-deductible option, often served with a tax-preferred savings account, may be the only choice. But larger firms are more likely to offer at least one traditional PPO or HMO plan alongside a high-deductible choice. Now, though, even very big companies are beginning to move all their employees into high-deductible coverage, p

• Last year, GE moved 85,000 salaried employees and retirees under age 65 into high-deductible plans. Next year, the company's remaining 40,000 union and hourly employees will make the switch. The company offers employees three plan choices, with deductibles ranging from $800 to $4,000, depending on the plan and the number of family members insured.

10/28/11

  -----------------------------

Employers Reshaping 401(k) Plans in Wake of Employee Lawsuits

Lawsuits brought by 401(k) participants are having ancillary effects: Experts say the cases are prompting employers and regulators to reshape 401(k) plans to provide more investment choices and better disclosure about fees, reports the Wall Street Journal.

The number of large 401(k) plans that offer investors access to a "brokerage window," which gives workers a wide range of mutual funds in addition to those on the plan's menu, climbed to 29% this year from 26% in 2009, according to a biennial survey by pension consultant Aon Hewitt.

• Plans have also been adding more index funds, especially in areas beyond large-company U.S. stocks. The index fund "influx is not just because of the cost, but because of the lawsuits," says Hewitt analyst Pamela Hess . "Because they are cheap, nobody can say you are doing the wrong thing."

10/27/11

  -----------------------------

Company Directors See Pay Skyrocket

Directorships, already among the best-paying part-time jobs in Corporate America, are becoming even more lucrative, reports USA Today.

Fortune 500 directors could receive median pay of nearly $234,000 in 2011. That’s a 10% jump from the 2010 median of $212,500, according to an analysis by Towers Watson.

• Behind the increases: higher cash retainers and gains on Wall Street, which lifted the value of directors' stock compensation 9% last year.

10/26/11

----------------------------- 

Companies Focus on Workers Health to Curb Costs

More employers are giving workers the option to tame health insurance costs for next year if they provide a blood sample and reveal details about their health habits, reports the Associated Press (via CBSNews.com). A report in the Los Angeles Times also looks at employer incentives to promote health habits.

As they present employees with benefits options for 2012, some companies also are offering lower rates to those who quit smoking, lose weight or take other measures to improve their health.

• Companies are trying to curb health insurance costs that have soared 50 percent or more over the last five years, benefits experts say, far outpacing worker wage and corporate earnings increases.

10/26/11

  -----------------------------

Companies Look for Perks that Help the Bottom Line

The freebies that proliferated during flush times—from tuition assistance to free snacks—are steadily disappearing, while perks that don't cost anything, such as allowing employees to work from home, are becoming increasingly common, reports the Wall Street Journal.

One increasingly common approach, he says, is for companies to offer a range of voluntary benefits in which they negotiate discounts with vendors on everything from pet insurance to prepaid legal advice and offer the deals to employees.

• BetterWorks, a start-up based in Santa Monica, Calif., provides small and midsize businesses with a platform to offer employees a range of discounts from local merchants.

10/25/11 

  -----------------------------

Fewer Provide Health Coverage to Part-Timers

Wal-Mart, the nation’s largest private employer, announced it will no longer offer health benefits to new part-time employees, reports the Washington Post.

"There’s been a really striking decline in [employer-based] coverage for these part-time workers,” said Sara Collins, vice president for the Affordable Health Insurance Program at the nonprofit Commonwealth Fund.

• The health care reform law requires employers with more than 50 workers to provide health insurance to full-time employees or pay a fine of $2,000 for each worker. The law defines a “part-time employee” as one who works fewer than 30 hours a week. But that definition has raised concerns about how to treat employees who do not have regular work schedules, with hours potentially varying from month to month.

10/24/11

  -----------------------------

Higher Income Workers' Share of Total Wages Grows

Half of all U.S. workers earned less than $26,364 last year, reflecting a growing income gap between the nation's rich and poor, reports CBSNews.com, citing a U.S. government report.

While the average U.S income last year was $39,959, the mean income — the figure where half earn more and half earn less — was much lower, $26,364. This disparity reflects the fact that "the distribution of workers by wage level is highly skewed," according to the Social Security Administration.

• Median compensation last year was just 66% of the average income vs. nearly 72% in 1980, based on W-2 forms submitted by employers to the IRS.

10/21/11

  -----------------------------

Workers Skeptical About Paying for Retirement Costs

American worker skepticism about having enough money to retire comfortably has taken a nosedive in a new national survey, reports the Washington Post.

Just 23% say they're very confident about being able to pay basic living expenses in retirement. That’s down from 46% in 2008, according to the survey by Sun Life Financial.

• A key finding is that a growing number of workers don't see themselves as ever fully retiring.

10/20/11 

  -----------------------------

Cost of Living Increase of 3.6%
for Social Security

U.S. senior citizens soon will get their first raise in three years, with a a cost of living adjustment of 3.6% starting in January 2012, reports CNNMoney.com.

Because inflation has been very low in recent years, beneficiaries have not gotten a COLA increase since 2009, when they received a 5.8% boost.

• A hike in Medicare premiums could eat up part of the raise. The change in Medicare premiums, which could increase by a double-digit rate, should be announced in November.

(To learn more, see the SHRM Online article "Social Security Benefits to Increase 3.6% for 2012; Higher Max on Taxable Earnings.")

10/19/11

  -----------------------------

86% of U.S. Workers Obese or Have Other Health Issue

Just 1 in 7 U.S. workers is of normal weight without a chronic health problem, according to Gallup polling data, and it could be costing the economy more than $153 billion a year in lost productivity from increased sick days, reports the Wall Street Journal.

Workers who were overweight or obese were more likely to miss work than those of normal weight, but chronic health problems were a much bigger factor. Chronic health problems included having ever been diagnosed with a heart attack, high blood pressure, high cholesterol, cancer, diabetes, asthma, or depression; and recurring physical pain in the neck or back or knee or leg in the last 12 months.

• Gallup estimates that 450 million days of work a year are missed because of weight and other health problems, resulting in an estimated cost of $153 billion in lost productivity.

10/18/11

  -----------------------------

As Open Enrollment Starts, Employers Push Health

Employers across Georgia are tucking a strong message into benefit enrollment packages going out to employees this fall: They want their workers to do more to get healthy, reports the Atlanta Journal-Constitution.

Some employers will swap the carrot for the stick this year and require significantly higher premiums for employees who do not agree to monitor their own health and work to address problems. Employers also will be pushing high-deductible plans — with lower premiums — that encourage workers to be savvy health care shoppers.

• Full-time workers in the U.S. who are overweight or obese and have other chronic health conditions miss an estimated 450 million additional days of work each year compared with healthy workers—resulting in an estimated cost of more than $153 billion in lost productivity annually, reports Gallup. 

10/17/11

 -----------------------------

Health Reform's Long-Term Care Program Scrapped

The Obama administration announced that the 2010 health care reform law's program to provide long-term care insurance through the workplace was simply unworkable and would not be implemented, reports the Washington Post.

Known as the Community Living Assistance Services (CLASS) Act, the program was intended to provide a basic lifetime benefit of a least $50 a day in the event of illness or disability. Critics have long charged that the program was financially unsustainable without major government subsidies in addition to premium collections.

Kathy Greenlee, assistant secretary for aging at the Department of Health and Human Services, announced on Oct. 14, 2011, that “At this point, we do not have a viable path forward to implement the CLASS Act.” Republicans charged that the program's unraveling was just the first step in dismantling the entire reform law, while Democrats contended that the CLASS Act stood apart from the rest of the health care overhaul.

10/15/11 

-----------------------------

Pension Fears Prompt Early Retirements

Deteriorating conditions in the pension system are jeopardizing the lump sum payouts workers count on, and pushing some workers to retire ahead of schedule, reports Reuters (via the Baltimore Sun).

Pension uncertainty prompted American Airlines Captain Rod Carlone to leave the work force last month, much sooner than he had expected. Carlone says he did not want to risk missing out on a lump sum payment if the American Airlines pilot pension plan was severely underfunded. "I can't afford at almost 62 a financial setback I could not recover from," he said.

• The funded ratio of large U.S. companies slipped to less than 73 percent at the end of September. The situation is deteriorating rapidly, as pension obligations are expected to grow.

(To learn more, see the SHRM Online story "Pension Funding Hits Post-World War II Low.")

10/14/11

-----------------------------

Eating Disorders Are New Front in Insurance 'Parity' Fight

People with eating disorders like anorexia have opened up a new battleground in the insurance wars, testing the boundaries of laws mandating equivalent coverage for mental illnesses, reports the New York Times.

In a closely watched decision,  the U.S. Court of Appeals for the Ninth Circuit ruled in August that insurers in California must pay for residential treatment for eating disorders under the state’s mental health parity law.

• Many states enacted similar laws, as did the federal government in 2008. The laws generally require that coverage for mental and behavioral disorders be equivalent to that for physical ailments like diabetes or a broken bone. But equivalence, or parity, can be tricky to define, and the appeals court ruling is one of the first by a high federal court to interpret the concept.

(To learn more, see the SHRM Online article "Mental Health Parity: Is Your Health Plan Ready? ")

10/14/11

    -----------------------------

U.S. Incomes Seen Stagnant Through 2021

Americans' incomes have dropped since 2000 and they aren't expected to make up the lost ground before 2021, according to economists in the latest Wall Street Journal forecasting survey.

• Incomes are being held down by persistently high unemployment and tepid economic growth, and the situation isn't expected to improve much in the foreseeable future.

10/13/11 

  -----------------------------

Employer Contributions Pegged to Length of Service—
for Defined Contribution Plan

Crain Communications Inc. announced it is freezing its defined benefit pension plan and that employer contributions to its defined contribution plan will be based on employees' length of service, reports Business Insurance.

• Employees with fewer than six years of service will receive an annual contribution of 2% of pay, those with six to 10 years of service will receive a contribution of 4% of pay, and those with more than 10 years of service will receive 6%.

10/13/11

  -----------------------------

Bank of America Equalizes Health Costs for
Employees' Same-Sex Partners

Starting next year, the nation’s largest bank will begin reimbursing its employees with same-sex partners for the extra taxes they pay for health insurance—something that their married heterosexual co-workers don’t have to worry about because the federal government recognizes them as an economic unit, reports the New York Times.

A growing number of companies have begun to adopt the policy, known as tax gross-up. Bank of America will provide the reimbursement once a year, and it will be calculated for each employee on an individual basis.

• “We regularly review our benefits plans to ensure they meet the diverse needs of our employees,” Ferris Morrison, a spokeswoman for the bank, told the paper.

(To learn more about tax gross-ups for employees' same-sex partners, see the SHRM Online article "New York Marriage Law Impacts Benefits.")

10/13/11

-----------------------------

Wellness Motivation: Weight-Loss Contests and Prizes

To save money on health insurance premiums and draw attention to company wellness programs, more employers have been offering in-house contests with small payoffs in cash or other prizes, reports the Washington Post. But now, a handful of web sites have made a variety of contests – and prizes – available to almost any employer.

At one company, teams of five employees are in the fourth week of a contest against squads from other companies from across the country. Members of teams are monitoring each other’s food intake in an effort to take home the top prize.

• Discounts on premiums for good habits aren’t as effective as a check in the mail, a cash payment or even the chance to win a small lottery, a researcher said.

10/11/11

  -----------------------------

Rising Health Costs Trigger Benefit Changes

With open enrollment season under way, American employees can expect to see changes to their health benefits that include higher costs for dependents, more spousal surcharges and more consumer-directed plans, reports USA Today (via Gannett's Daily Advertiser)

• In 2012, nearly three-quarters of U.S. employers will offer a consumer-directed plan, according to a survey by the National Business Group on Health. At 17 percent of employers, a consumer-directed plan will be the only option.

(To learn more, see the SHRM Online article "Large U.S. Employers Revamping Health Benefits for 2012.")

10/10/11

  -----------------------------

As Out-of-Pocket Costs Rise, Use of Health Services Falls

As employees become responsible for paying a larger share of the cost of doctor visits, overall consumer spending on health care in the U.S. declined by 2% in 2010, according to the U.S. Bureau of Labor Statistics (BLS), reports American Medical News.

That can either mean that patients are responding appropriately to incentives to avoid unnecessary doctor visits and treatments (a key goal of health care consumerism), or that they are skimping on necessary medical care, although this article slants toward the latter interpretation.

• The article does not mention studies by the Rand Corp. and others that found when people pay more out-of-pocket for health care, they tend to spend less on inappropriate or unnecessary care, such as demanding an antibiotic for a viral infection or going to the emergency room for a non-critical health problem.

10/10/11

----------------------------- 

U.S. Urged to to Weigh Cost in Deciding
'Essential Health Benefits'

The National Academy of Sciences said that the federal government should explicitly consider cost as a factor in deciding what "essential" health benefits must be provided by insurance plans under health care reform, reports the New York Times.

In an new report, the academy's Institute of Medicine said that, in defining “essential health benefits,” the government should try to guarantee that the average premium would not exceed benchmarks that would be set by the secretary of health and human services.

• “It appears the typical employer plan will have to be expanded” to provide some of the required benefits, like rehabilitative services and therapy for children with developmental disabilities, the report said.

10/7/11

-----------------------------

Latest 401(K) Lawsuit Highlights Ongoing Fee Concerns

More employees going to court over what they see as poor investment options and unreasonable plan fees in their 401(k)s, reports Reuters.

The most recent 401(k) fee lawsuit was filed against Ameriprise Financial Inc,, brought on behalf of employees alleging that the financial firm pushed workers into expensive and untested proprietary funds.

• According to Reuters, employee lawsuits have targeted, among others, Caterpillar Inc. and General Dynamics Corp., which agreed to multimillion-dollar settlements.

10/7/11

  ----------------------------- 

Unemployed Face Permanent Salary Cuts

It's common to take a pay cut after a job loss. But the reduced income is likely to be permanent for workers who become unemployed during an economic downturn, reports CNNMoney.com, citing a new study from the Brookings Institute.

For workers who lost a job during a time of high unemployment (and had been on the job for three years or more), the pay hit is likely to be about $112,000 on average, or 19% of their lifetime earnings.

• Workers who lose jobs in a good economy also take a hit in pay, but it's more modest than those who lose jobs in bad times—only about $65,000, or 10% of their lifetime earnings. And it often takes much less time to return to their previous income level.

10/6/2011

-----------------------------

Top Unnecessary Health Care Costs

The most over-used activity by primary care physicians that increases health care cost is prescribing a brand-name cholesterol-lowering "statin"-type drug without trying a less expensive generic first, reports the Wall Street Journal's Health Blog, citing research posted on the website of the Archives of Internal Medicine.

Other practices deemed inappropriate by the authors: bone density scans for women ages 40 to 64 years, ordering CT Scans or MRI’s for lower back pain, and prescribing antibiotics to children with sore throats caused by a virus.

• Top selling cholesterol-lowering drug Lipitor is schedule to go off patent, with a lower-cost generic version available after November 30.

10/5/11

  -----------------------------

Minimum Wage Could Rise in Eight States

Minimum wage workers in eight states could see their paychecks grow by hundreds of dollars in 2012 thanks to automatic annual increases in pay rates, reports CNNMoney.com. 

Colorado, Montana, Ohio, Washington and Oregon recently announced their 2012 minimum wages, which contain bumps ranging from 28 cents to 37 cents per hour.

• Washington workers enjoy the highest minimum wage, which will rise to $9.04, a boost of 37 cents per hour.

10/4/11

-----------------------------

‘Peer Benchmarking’ Sends Executive Pay Soaring

About 90 percent of major U.S. companies expressly set their executive pay targets at or above the median for executives at similar companies, known as “peer benchmarking.” But as critics have pointed out, if every company tries to keep up with or exceed the median pay for executives, executive compensation will spiral upward, regardless of performance, reports the Washington Post.

Few if any corporate boards consider their executive teams to be below average, so the result has become known as the “Lake Wobegon” effect.

• A chief executive’s pay is more influenced by what his or her “peers” earn than by the company’s recent performance for shareholders, according to independent research efforts based on the new disclosures.

10/4/11

  -----------------------------

For Hourly Jobs, White Collar Perks

Some U.S. manufacturers are considering allowing front-line factory workers to do something unlikely: work from home, reports the Wall Street Journal.

Companies in industries that rely heavily on hourly or low-wage workers, such as manufacturing, retail, food service, hospitality, health care and call centers, are exploring ways to provide more scheduling flexibility and control to a population that has rarely been offered such workplace benefits.

• Some companies, such as health-care provider Kaiser Permanente and hotelier Marriott International, have implemented a range of innovative policies for their hourly staffers, such as providing paid time off in shorter, part-day increments, so workers can manage doctor or school appointments without having to take an entire day off. They are also providing more leeway on start and end times—allowing workers to shift their start time earlier to be available for a school pickup, for instance.

10/3/11

 -----------------------------

Wages Hit by Rise in Cost of Health Benefits

An estimated 66% of Americans with access to health benefits worked for an employer who spent more than 10% of its payroll costs on heath care costs, according to an analysis done by the Kaiser Family Foundation in February, reports JSOnline.

That's just the employer's share of the cost. It doesn't include the worker's share of the premium and deductibles and other out-of-pocket expenses.

• Employees, for the most part, remain unaware of the magnitude of total health care expenditures.

10/3/11

  -----------------------------

Employers Face Unemployment Insurance Tax Increases

Employers around the U.S. are facing a series of increases in state and federal unemployment insurance (UI) taxes after the severe depletion of unemployment benefits funds in many states, reports CNNMoney.com.

• Unemployment insurance taxes, which were a relatively low bottom-line cost in 2008, are now becoming a significant cost and discouraging companies from hiring new employees.

9/30/11

  ----------------------------- 

Employers Absorb Most Health Cost Increases

Although U.S. employers have been increasing the share of health care costs paid by their employees, employers are absorbing most of the premium cost increases in 2011, reports CNNMoney.com, citing a Kaiser Family Foundation survey.

For insured workers, it cost $15,073 this year to buy health insurance for a family of four, up from $13,770 last year.

• Employees share of the total cost rose a little more than 3% to $4,129 while their employers' share jumped 12% to $10,944. 

9/28/11

-----------------------------

Supreme Court Could Rule on Health Care Law Early Next Year

The Obama administration set the stage for the U.S. Supreme Court to rule early next year on the constitutionality of the president’s health care reform law by declining to press for a full appeal in a lower court, reports the Los Angeles Times.

• The business federation said it was pleased with Monday’s decision forgoing the drawn-out appeal in the lower court. “NFIB is excited that all indications point to the government going directly to the Supreme Court to hear our case and commends the administration on their decision,” said Karen Harned, executive director of the group’s legal center.

9/27/11 

  -----------------------------  

Mandatory Treatment Coverage: State vs. Federal Mandates

A provision in the health care reform law gives the federal government authority to define “essential benefits” that will be offered on the health insurance exchanges to individuals and small businesses starting in 2014. If states mandate a benefit but it isn’t on the federal list, the states would be responsible for the cost of the coverage, reports the Washington Post.

As a result, autism benefits and dozens of other state-required benefits, covering services and conditions such as infertility, acupuncture and chiropractic care, could be at risk.

• By the end of September, the Institute of Medicine is scheduled to recommend criteria the Department of Health and Human Services should use in determining the essential benefits package. HHS is expected to announce its decision by the end of the year.

9/26/11 

  -----------------------------

Obama Administration Downsizes CLASS Act Office

The Obama administration is reassigning the workers in the office that was developing the Community Living Assistance Services and Supports (CLASS) Act long term care benefits plan, under the health care reform law, in a move that may signal the program may soon be terminated, reports National Underwriter.

• The Department of Health and Human Services (HHS) says it is continuing its analysis of the CLASS Act program, which will only be implemented if it is fiscally solvent, self-sustaining and consistent with the statute.

9/23/11

  -----------------------------

Companies Steering Workers to Lower Priced Medical Care

Employers and insurers seeking to better control health costs are going beyond just offering high-deductible insurance to being more directive, using financial incentives to promote doctors, hospitals or medications they’ve deemed more cost efficient, reports Kaiser Health News.

Safeway employees in the San Francisco Bay Area, for example, face higher payments if they choose centers that cost more than $1,500 for a routine colonoscopy.

• Buffalo-based Prodigy Health rolled out a plan that sets limits on how much the company will pay toward a range of tests and procedures, from MRIs to hysterectomies. Workers now know to call their employee insurance plan to find a list of local doctors and facilities that meet the price.

9/22/11

    -----------------------------

Insurers Waiting for "Essential Benefits" Rule

U.S. insurers and group plans are waiting for the Department of Health and Human Services to move ahead on one of the most important—and politically sensitive—health reform regulations: the rule spelling out what "essential benefits" health plans will have to cover, reports Politico.

The political pitfalls are several: Requiring a generous benefit package will make insurance premiums more expensive. But a minimal package might anger consumer activists groups.

• States that already have extensive coverage mandates could be concerned about a rule with less generous benefits.

9/21/11

  -----------------------------

Baby Boomers Dissatisfied with 401(k) Options

Baby boomers are the first generation to be faced with the need to accumulate a million-dollar 401(k), and like other stages of life, are expected to not only demand more of plan providers and sponsors but also of themselves as they continue to revolutionize retirement, reports Forbes.

More baby boomers are accumulating larger account balances and realizing that the standard 20 mutual funds to which they have access don’t suffice to ensure asset growth and protection.

• Many baby boomers feel scorned by the traditional buy-and-hold strategy because it has cost them years of savings and they are instead, taking a more active approach with their 401(k)s that includes paid professional advice to manage it more effectively.

9/21/11 

  -----------------------------

Employee Benefits: Rising Costs Erode Paychecks

Businesses are restoring some of the benefits they axed during the recession. However, workers who want new benefits from their firms will probably have to pay for many of them themselves, reports the Christian Science Monitor.

"Employers are not willing to take on any more" costs of benefits, says Chris Covill of the national integrated benefits practice at Mercer. "They're looking for ways to mitigate cost increases and to shift the financial responsibility" for benefits to employees."

• Last year, employees paid a larger share of the total health insurance premium: an average of 19 percent for singles and 30 percent for families, up from 17 and 27 percent, respectively, a year earlier, according to the Kaiser Family Foundation.

9/20/11 

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Employers Shift Disability Insurance Costs to Workers

Disability insurance is one of those under-the-radar benefits many take for granted, especially if their employer picks up the tab for the coverage. As annual benefit enrollment time approaches, workers probably aren’t worried about examining their disability coverage details and costs, but they should, reports the Washington Post.

• The same pattern that has emerged in health insurance — employers’ shifting more costs onto workers’ shoulders and trimming or eliminating benefits — is occurring in disability coverage.

9/20/11 

-----------------------------

DOL Expands Enforcement of Wage-Hour Violations

The U.S. Department of Labor is signing agreements to share information with nine states and the Internal Revenue Service as it gets more aggressive about penalizing employers who violate the complex wage and hour laws, reports the AP.

The information will help Labor officials target businesses that improperly label workers as independent contractors or as non-employees who are not entitled to mandatory overtime pay.

• States that have agreed to work with the Labor Department so far include Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington. New York plans to sign up in the near future.

9/19/11

Pharmacy Benefit Data Can Help Midsize Firms Cut Costs

Carving out the pharmacy benefit from the medical portion of a health plan can provide valuable cost-control data for midsize employers, regardless of whether they are interested in self-insuring, reports Business Insurance.

• Pharmacy benefit data is a barometer of employee health trends, providing data can be used to create customized wellness plans.

9/19/11 

-----------------------------

401(k) Rating Service Gets Mixed Reviews

BrightScope has attracted much attention for its ratings of 401(k) plans, but some question the firm's rating methodology, reports the New York Times

• Steve Utkus, a principal at Vanguard, said that his biggest problem with BrightScope’s rating methodology is its heavy reliance on the raw dollar amounts that people save. This can give employers with higher wages an advantage. He does allow, however, that “these services can be useful if you are comparing a few companies you know are similar in work force characteristics.”

9/19/11

-----------------------------

Long-Term Care 'CLASS Act' Under Fire

A new report charges that the health care reform law's long-term care provision is a fiscal time bomb, but advocates claim the program can be sustainable, reports Politico.

With the deficit-cutting supercommittee likely to at least ponder repeal of the CLASS Act this fall, a Republican House-Senate report lambasted the program as a boondoggle.

• HHS Secretary Kathleen Sebelius says the long-term care option can be made to work.

9/16/11 

-----------------------------

More Rely on Government for Health Coverage

In its yearly survey of health insurance coverage, the U.S. Census Bureau published figures that underscore the trend toward greater dependence on government for coverage, reports Health Affairs.

The percentage of Americans on government health programs continues to grow, while employer-based coverage continues to decline. According to the latest Census report, 31% of the population received coverage through the government in 2010 vs. 23% in 1987. In contrast, 64% of the population had private coverage in 2010 vs. 75.5% in 1987.

• Employer-based coverage declined from 62.1% in 1987 to 55.3% in 2010.

9/15/11 

Workers with 401(k) retirement accounts are due to receive improved disclosures about the fees they’re paying starting next year. The Department of Labor announced that the information may be delivered electronically by email or through a secure website, reports the AP via the Washington Post.

• Mailing out newly required annual booklets and quarterly fee statements on paper would have been expensive, a cost that would likely have been passed on to workers through higher fees, said Marcia Wagner, a Boston-based attorney specializing in retirement issues.

(To learn more, see the SHRM Online article "DOL Issues Policy on Electronic Disclosure of Participants' 401(k) Fees.")

9/15/11

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401(k) Tax Break at Risk as Policymakers Mull Budget Cuts

U.S. retirement programs could look different if a grand deficit-cutting bargain is struck in upcoming negotiations, reports Reuters.

Among the ideas being floated are a replacement of the 401(k) deduction with a tax credit that would offer bigger benefits to lower earners, changes in the withdrawal choices that workers face when they retire and a shift in the way Social Security benefits are calculated. That is on top of the increase in the retirement age that has been mentioned several times in recent months.

• "Any time they are looking at spending and revenue over the next 40 or 50 year, these issues will be on the table," predicts Dallas Salisbury, head of the Employee Benefit Research Institute.

9/13/11

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Seattle Mandates Paid Sick Leave for Private Sector

The Seattle City Council has approved legislation requiring businesses to offer their workers paid sick leave.  Two other major cities—Washington, D.C., and San Francisco—have similar laws, reports the SeattlePI.com.

• Mandating that sick leave be provided will mean cuts to employee benefits and fewer new hires, said George Allen, a spokesman for the Greater Seattle Area of Commerce. However, a poll by sick-leave proponents showed more than two-thirds of Seattleites favored the idea of requiring businesses to provide paid sick leave.

9/13/11 

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Employers Tell Workers to Get Healthy or Pay Up

Next year, one third of U.S. employers plan to reward or penalize workers depending on their commitment to improving their health. That’s a significant jump compared with 7 percent in 2011, according to the National Business Group on Health, reports The Tennessean.

To qualify for reduced-cost insurance plans, employees will have to agree to monitor and try to improve their health conditions. But practices such as nurses performing on-the-job blood tests and health coaches calling people in their homes raise privacy concerns for some employees.

• The anticipated health care cost per employee is expected to reach $11,176 in 2011, up from $10,387 in 2010.

9/12/11 

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Most U.S. employers have reduced benefits, particularly in the past year, keeping only the basics such as medical coverage and retirement plans, reports the Miami Herald (via the Toledo Blade).

For the most part, employers have kept the basics -- medical coverage, paid holidays, and life and dental insurance. But they have reduced offerings such as long-term-care insurance, retiree health coverage, and adoption benefits.

• Most also have slashed benefits such as executive club memberships, legal assistance or services, mentoring programs, organization-sponsored sports teams, professional development opportunities, travel planning, and housing or relocation costs. "All the 'nice to haves' have been cut," said Mark Schmit, director of research for the Society for Human Resource Management.

9/12/11 

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Payroll Tax Cuts, Extended Unemployment Benefits Are Key to Obama's Plan

President Obama's jobs plans would temporarily cut the Social Security payroll tax for workers and employers. It also includes an extension of unemployment benefits for about 6 million Americans, reports the Christian Science Monitor.

Under the plan, the Social Security payroll tax would be cut to 3.1% on employees. It is usually set at 6.2%. This year, the tax has been 4.2%, reports Marketwatch.com.

Looking to add flexibility to the unemployment insurance system, Obama wants states to provide more training opportunities and wage subsidies for those out of work. States would receive federal funds to institute these programs, reports CNNMoney.com.

• Obama proposed that jobless benefits pay the difference in salary if older, long-term unemployed Americans take a new job with lower wages.

9/9/11

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Family Feuds: The Battles Over Retirement Accounts

As the amount of money stashed in 401(k)s has grown, more families are finding themselves locked in battles over who has rights to the assets, especially in cases involving divorce and remarriage with children from the prior marriage, reports the Wall Street Journal.

Under the Employee Retirement Income Security Act (ERISA), with 401(k)s the spouse is the presumed beneficiary of a participant's account—regardless of who is listed on the beneficiary form—unless the spouse previously consented to naming someone else beneficiary.

• Plans can provide for those spousal rights to kick in immediately or no later than a year after the marriage. This general rule cannot easily be circumvented with a prenuptial agreement. Only a spouse can waive the right to 401(k)-plan assets—those who are engaged cannot.

(To learn more, read the SHRM Online article "401(k) Auto Enrollment: The Problem of Missing Beneficiary Elections.")

9/8/11 

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More U.S. Workers Unhappy With Their Benefits and Pay

U.S. workers are more dissatisfied today with their health insurance benefits and their chances for promotion than they were before the 2008-09 financial crisis and recession, according to a new Gallup poll.

The percentage of U.S. workers who are dissatisfied with their health benefits rose from 19% in Aug. 2008 to 30% in Aug. 2011. Dissatisfaction with pay rose from 27% to 30%

• Complaints about job-related stress rose from 28% to 34%.

9/8/11

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Job, Retirement, Financial Stress Takes Toll on Boomers

Many in the Baby Boomer generation had planned on retiring by now. But in this poor economy, they are struggling to deal with a ton of anxiety about their financial well being, reports USA Today.

• Baby Boomers also are concerned about younger workers coming in to take their places. If they're laid off, they face the daunting challenge faced by those who are unemployment and older than 55.

9/7/11 

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Target-Date Funds Become Now More Risk Adverse

This year's stock market correction showed that target-date retirement funds have become more risk adverse since the 2008-09 market plunge, reports Moringstar.com

• Several fund firms decided in 2008's wake that they had misjudged the degree of potential market losses and/or investors' tolerance of them and made strategic shifts in their glide paths. Indeed, the actual equity allocation of target-date funds in the 2015 category declined on average from 57% in September 2009 to about 49% prior to the recent correction.

9/7/11 

Many of the companies on Fortune magazine’s list of best companies to work for use inexpensive, thoughtful and creative ways to keep employees happy, loyal and productive, reports the Fairbanks Daily News-Miner.

Most of the companies on Fortune’s list don’t offer employees free vacations, on-site tanning beds or gourmet meals served for lunch. Most of the perks they offer include things like flexible schedules, monthly pizza parties, time off for birthdays or anniversaries and rewards like movie tickets or gift certificates.

• For employees at REI, rentals are free, REI clothes and gear are 50 percent off and they receive a gift every year.

9/5/11

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IRS Provides Tax Relief to Victims of Hurricane Irene

On September 1, the IRS announced it is providing tax relief to individual and business taxpayers impacted by Hurricane Irene.

Certain taxpayers in North Carolina, New Jersey, New York and Puerto Rico will receive tax relief, and other locations are expected to be added following additional damage assessments by the Federal Emergency Management Agency (FEMA).

• The tax relief postpones certain tax filing and payment deadlines to Oct. 31, 2011.

9/2/11

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State-Federal Review of Health Insurance Rate Increases Begins

As of Sept. 1, U.S. health insurers seeking to increase their rates by 10 percent or more must submit their request to state or federal reviewers to determine whether they are reasonable or not, according to a release by the Department of Health and Human Services via Marketwatch.

In a growing number of states, regulators now have the authority to deny or reduce rate hikes found to be excessive. Insurers that propose double-digit rate increases are required to post their justifications on their website, and state and federal regulators will post them as well.

• Starting mid-September, consumers can go to www.HealthCare.gov  to view disclosure information explaining proposed increases that are 10 percent or higher than last year's rates.

9/1/11 

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Some Will Still Receive Federal COBRA Subsidy After Aug. 31

The federal subsidy for COBRA health insurance premiums for laid-off employees will expire at the end of August, but the Department of Labor's Employee Benefits Security Administration has updated its COBRA web page to clarify that some individuals will still be eligible to receive the subsidy beyond Aug. 31.

The American Recovery and Reinvestment Act (ARRA) provided a COBRA premium reduction for eligible individuals who were involuntarily terminated from employment through the end of May 2010. Due to the statutory sunset, the COBRA premium reduction under ARRA is not available for individuals who experience involuntary terminations after May 31, 2010. However, individuals who qualified on or before May 31, 2010 may continue to pay reduced premiums for up to 15 months, as long as they are not eligible for another group health plan or Medicare even if their COBRA coverage did not start until a later date due to the terms of a severance arrangement, or the use of banked hours or other similar provision that delayed the start of their COBRA coverage.

• For example, if individuals were involuntarily terminated on May 31, 2010 and due to the terms of a severance agreement their COBRA coverage did not start until Dec. 1, 2010, they would still be eligible for the full 15 months of subsidy through Feb. 29, 2012 as long as they are not eligible for another group health plan or Medicare.

8/31/11

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Women’s Pay Gap Often Starts with No Negotiation on Salary

Mid-career woman wanting to make the same amount of money as—or more than — a male counterpart, may have only one avenue open to them: Quit their job, according to a column in USA Today.

• Part of the problem with the continuing wage gap is that women often don't receive the same starting salaries as their male colleagues at the beginning of their careers because they aren't as likely to negotiate for more money. That's a practice that follows them throughout their careers.

8/30/11

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Unnecessary Procedures Drive Health Spending

The overuse of expensive medical interventions is a prime culprit behind rising U.S. health-care spending that’s encouraged by private health plans and Medicare, according to Harvard University researchers, reports Bloomberg.com.

Angioplasty, which uses balloons and stents to open blocked arteries, isn’t always a necessity, according to the researchers. Because Medicare and private plans base payments on procedures instead of the outcome of a treatment, physicians and hospitals don’t have a financial incentive to gauge the effectiveness of therapies, they wrote. Less expensive treatments for heart-attack patients are underutilized, they noted.

• “We are neither allocating resources efficiently between health and other uses, nor are we getting as much health as we could for every dollar spent,” according to the researchers.

8/29/11 

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Wellness Programs Reap Savings

With an investment of less than 1 percent of total health costs in wellness programs, Hancock has reduced medical expenses enough to keep annual premium increases, on average, about 3 percentage points below the national trend, reports the Boston Globe.

Next year, the company’s employee health care costs will rise just over 5 percent, compared with a national average of 8.4 percent.

• The share of employers offering at least one wellness program jumped to 74 percent in 2010, up from 58 percent in 2009 and 54 percent in 2008, according to the Kaiser/HRET Employer Health Benefits Survey.

8/29/11

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Pay, Benefits Dispute Hangs Over Ford Labor Talks

The expiration of Ford Motor Co.'s national contract with the United Auto Workers (UAW) leaves unresolved the union's long-festering grievance over whether white-collar and blue-collar workers have benefited equally in the company's turnaround, reports the Detroit Free Press.

The dispute began in 2010 when Ford reinstated merit-pay raises and matching 401(k) contributions for salaried workers, but not hourly workers. The UAW argues Ford should give hourly workers similar rewards under a clause in the current labor contract that requires equal sacrifices and gains for all Ford workers.

• Despite a profit-sharing arrangement, the union has continued to point to CEO Alan Mulally's 2010 compensation package of $26.5 million as evidence of inequality between hourly and salaried pay structures.

8/26/11

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Close to 10% May End Health Coverage, Accept the Penalties

Nearly one of every 10 mid-size or large employers expects to stop offering health coverage to workers once federal insurance exchanges start in 2014, reports the Associated Press, citing surveys by Towers Watson and Mercer.

A large majority of employers in both studies said they expect to continue offering benefits once the exchanges start. But a former insurance executive, Bob Laszewski, said he was surprised that as many as 8 or 9 percent of companies already expect to drop coverage, a couple of years before the exchanges start.

• Such a move comes with potential payroll-tax headaches and could subject companies to fines. It also would give their employees a steep compensation cut if their pay is not raised.

8/25/11 

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Many Would Change Employer for Flexible Working Arrangements

A third of employees said they would seek employment elsewhere if employers fail to support flexible working via mobile devices, reports Computer Weekly, citing the Mobile Workforce Report from iPass.

The research shows 95% of employers allow employees to work remotely via laptops and mobile devices. However, 40% of the 3,100 employees surveyed worldwide wanted employers to provide more flexible working conditions. A total of 33% would consider looking for employment elsewhere in search of better mobile working benefits.

• "If your enterprise can successfully embrace workshifting, your employees will reward you many times over with deeper loyalty, improved productivity and -- let's not forget -- greater profitability," said Barbara Nelson, chief technology officer at iPass, which manages mobile connectivity for large enterprises.

8/24/11

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Paying for Kids’ College vs. Retirement

The shaky economy and sickly housing market have prompted some parents to engage in risky financial behavior: raiding their retirement savings to pay their children's college tuition. But that, say financial planners, is not a good move, reports USA Today.

Last year the number of parents who withdrew or took a loan from their 401(k) plans more than doubled, to 7.4% from 3.4% in 2009, according to a recent Sallie Mae and Gallup study.

• Employees who tap a 401(k) retirement plan are subject to income tax and a 10% early-withdrawal penalty before age 59½. And halting 401(k) contributions means losing the tax benefits and company match.

(To learn more, see the SHRM Online article "‘Plug the Drain’ on 401(k) Plan Leakage.")

8/23/11   

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Employers Pass Along High Costs of Specialty Drugs

To try to control spending, some employers are requiring patients to pay a percentage of the cost of specialty drugs — from 25 percent to 33 percent or more — rather than a flat dollar co-payment, reports Kaiser Health News.

Often called "biologics," specialty drugs are used by only a small percentage of patients. But they represent the fastest-growing category of spending by employers on prescription drugs, according to several recent studies, because of their high cost.

• The practice of using specialty tiers divides benefit consulting firms. While some say that requiring higher patient payments is a useful tool to control drug spending, others warn their employer clients that the approach could discourage workers from taking needed medications.

8/23/11

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Inflation-Protected 'TIPS' Are Most Widely Added 401(k) Option

Nearly half of defined contribution retirement plan sponsors offer or plan to soon offer some type of inflation protection strategy to their participants, reports plansponsor.com, citing new research by Mercer.

• Among the sponsors currently inflation-protection strategies, a stand-alone Treasury Inflation Protection Securities (TIPS) is the most widely used option (24%) versus combining multiple asset classes (12%). Another 10% of sponsors intend to offer some type of strategy within the next year.

8/22/11

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Debt Limit and Budget Negotiations Could Impact
Health and Retirement Plans

The congressional Joint Select Committee on Deficit Reduction is charged with developing legislation to reduce the federal deficit by approximately $1.5 trillion over a 10 year period. Retirement plan tax incentives, which are one of the largest tax expenditures in the federal budget, could be impacted, reports Groom Law Group.

Changes to the tax treatment of employer-sponsored health plans also could be explored. The tax exclusion for employer-provided health coverage is one of the largest tax expenditures and changes to limit the exclusion have been examined by other groups seeking to address the deficit situation.

• If no agreement is reached, automatic across the board cuts will take place, which could have a significant impact on the federal health care spending provisions under the Patient Protection and Affordable Care Act since most federal discretionary spending will be reduced on a pro-rata basis.

8/18/11

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Employers Adjust Retiree Drug Plans as Tax Break Ends

Many employers that face the loss of a federal tax break for providing prescription drug coverage to Medicare-eligible employees in 2013 already are restructuring the benefit, reports Business Management.

The tax break is part of the 2003 federal law that created the Medicare prescription drug program and was included to encourage employers to retain the prescription benefits offered to Medicare-eligible retirees.

• Last year's Patient Protection and Affordable Care Act alters that tax treatment beginning in 2013. While the subsidies will continue, employers receiving them no longer will be allowed to take a tax deduction for the portion of prescription drug expenses subsidized by the government.

8/16/11

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Appellate Court Finds Health Care Mandate Unconstitutional

A U.S. appeals court in Atlanta ruled  that the health care reform law's mandate on Americans to carry health insurance violates the U.S. Constitutional, reports the Wall Street Journal. The ruling marked the first time a Democratic-appointed judge has found part of the Patient Protection and Affordable Care Act unconstitutional.

The individual insurance mandate is set to go into effect in 2014. It requires most Americans to carry insurance—through the workplace, a government program such as Medicare, or individual purchase—or pay a penalty that eventually could go as high as several thousand dollars per year.

• The 2-1 ruling directly conflicts with another appellate ruling in June, making it a near certainty that the U.S. Supreme Court will eventually step in and provide the final word, possibly in 2012.

8/13/11

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Need a Job? Forget Benefits, Many Told

Providing benefits to full-time employees is an increasingly unattractive option for small businesses. As a result, they are hiring part-timers, reports CNNMoney.com.

Thanks to the stubbornly high unemployment rate, there are plenty of workers willing to take a job without benefits.

• Benefits are expensive. Depending on the employee's level and salary, a benefit package can cost between 20% and 28% on top of the base salary, said Jo Heinz, owner of a Dallas-based  architecture firm. Contractors and part-timers "are going to get the nod before the individuals who are looking for the full package," she said.

8/12/11

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COBRA Program Subsidies to Expire at End of August

The federal subsidy for COBRA health insurance premiums for laid-off employees will expire at the end of August, reports Business Insurance. The subsidy program, passed in February 2009, paid 65% of COBRA premiums for involuntarily terminated employees for up to 15 months.

Congress extended the program several times; the last extension—approved in April 2010—extended the subsidy to those let go though May 31, 2010. For employees laid off in May 2010 who have been unemployed since, their 15 months of COBRA premium subsidies will expire at the end of August.

• The COBRA take-up rate among terminated employees working for large employers roughly doubled after the subsidy became available, according to a study by Aon Hewitt.

8/11/11

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Walgreens Plans to Sell Health Insurance

Walgreens, the nation's largest drugstore chain, is planning to start selling health insurance to customers through a private health insurance exchange, reports CNNMoney.com. Consumers will be able to shop for a mix of insurance products online, through call centers or in-stores. Some will be branded by national insurers and others will be "private label" insurance products sold through Walgreens' insurance exchange.

Health reform mandates the creation of federal and state-funded public health insurance exchanges by 2014 that will offer subsidized insurance for uninsured and underinsured people. A rush of companies, many not usually associated with health insurance, are also expected to jump into the nascent but lucrative market for health insurance exchanges -- estimated to be worth billions of dollars -- ahead of 2014.

• Retailers, financial services providers and a large payroll processer are among firms that are actively looking into starting private health insurance exchanges that are separate from public exchanges, industry watchers said.

8/10/11 

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Stock Slide Threatens Corporate Pension Plans

The plunge in stock markets, coupled with a sharp drop in bond yields, could make August one of the worst months for declines in the funded status of U.S. corporate defined benefit plans, reports Pensions & Investments.

The typical corporate plan's funded status dropped close to 75% when the markets closed on Aug. 8, down from approximate 83% reported at the end of July.

• Yet another “perfect storm” of falling equity markets and potentially the lowest corporate bond rates since BNY Mellon began tracking corporate pension data can only weaken the resolve of plan sponsors when it comes to maintaining defined benefit plans, pension specialists warned.

8/9/11

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CMS Adds New Metrics to Its "Hospital Compare" Online Tool

The U.S. Centers for Medicare and Medicaid Services (CMS) has added new metrics to its online comparison tool for hospitals, reports The Hill.

Users can now use the "Hospital Compare" tool to see how well selected hospitals protect against surgical infections and how well they treat possible heart attacks.

8/8/11 

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Some EAPs Offering Chaplain Services

Some employee assistance programs (EAPs) are offering access to a nondenominational chaplain counseling service, reports Bnet.com.

According to one survey of more than 600 employees at Regal Marine, a boat building company, the chaplain’s care program was cited as the #1 benefit.

• A Gallup Poll showed that 66 percent said that if they needed a mental health professional, they would prefer going to one with spiritual values and beliefs. Still, some may find the service inappropriate.

8/5/11

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States Strengthen Insurance Hike Oversight

Officials from more than one-third of the nation's states have introduced or passed legislation to strengthen legislative authority over health insurance premium rates, while two-thirds say they are working on such strategies, reports HealthLeaders Media, citing a new Government Accountability Office report.

• The GAO found that insurance rate oversight practices vary widely from state to state on the extent and timing of reviews, information considered in the reviews, and opportunities for consumer involvement.

8/4/11 

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Administration to Require Coverage of Birth Control
with No Co-Pays

The Obama administration issued a rule requiring health insurance plans to cover birth control for women with no co-pays, reports Bloomberg BusinessWeek.

The requirement, affecting most insurance plans, is part of a broad expansion of women's preventive coverage. Breast pumps for nursing mothers, an annual "well woman" physical, counseling on how to avoid sexually transmitted diseases and other services will also be covered at no cost to the patient.

• The new benefits take effect as of Jan. 1, 2013, in most cases. Insurers are expected to pass the cost on to their customers through slightly higher premiums.

8/2/11