Author: Site Staff

In a letter sent to President Barack Obama, two architects of an effort to reshape the U.S. health care system pledged to deliver legislation by early June.

“Our intention is for that legislation to be very similar and to reflect a shared approach to reform, so that the measures that our two committees report can be quickly merged into a single bill,” according to Senate Finance Committee Chairman Max Baucus, D-Montana, and Health, Education, Labor and Pensions Chairman Sen. Edward Kennedy, D-Massachusetts.

Both lawmakers have publicly stated their timelines to deliver on health care legislation before, and they share jurisdiction over the $2.5 trillion-a-year industry. But seldom has their pledge been so public or united.

This week, Baucus’ committee will begin a series of roundtable discussions with health care stakeholders, followed by a series of legislative “walk-throughs” of initiatives that will be considered for a final bill. Kennedy’s committee has for months been meeting with providers, payers and consumer advocates behind closed doors as a means to shape future legislation.

While few details were released—or expected—the two chairmen said that comprehensive reform would “contain costs, improve quality, enhance disease prevention and provide coverage to all Americans.”

Filed by Matthew DoBias of Modern Healthcare, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Media General Inc. said Friday, April 17, that it will freeze its defined-benefit pension plan, finalizing a process the newspaper, television and online company began more than two years ago.

At the start of 2007, Richmond, Virginia-based Media General closed the plan to new employees and stopped service accruals for current plan participants, with their retirement benefits based on final average salary when the participants terminated employment or retired.

On Friday, however, Media General said retirement benefits for current participants will be based on their final average salary as of May 31.

The freeze is Media General’s second retirement plan cutback this year. In January, it said it would suspend, effective April 1, its 401(k) plan matching contribution through the end of this year. It had been matching 100 percent of employees’ salary deferrals up to 5 percent of pay
 
The cutbacks come amid deteriorating financial results. In 2008, Media General reported a net loss of $631.8 million—due largely to a write-down of asset values—compared with net income of $10.7 million in 2007.

During the first quarter of 2009, the company reported a net loss of $21.3 million, up from a net loss of $20.3 million during the comparable period in 2008.

Media General owns 22 daily newspapers, 250 weekly newspapers, 19 television stations and several online ventures, primarily in the Southeast.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Employers and employees are making changes to the way health care plans are designed and used as a result of the recession, according to a survey by the International Foundation of Employee Benefit Plans released Friday, April 17.

Employers are looking to cut costs and employees are looking to save money while they still have the benefits available to them, according to the Brookfield, Wisconsin-based IFEBP, which surveyed plan sponsors across a number of employee benefit sectors, including corporate plans, public/governmental plans and multiemployer benefit plans, or labor unions.

The majority of respondents—76 percent—said their greatest concern is that the recession will cause the need for greater participant cost sharing. About 62.6 percent of those who responded said participant benefits may be reduced, with nearly 72 percent of multiemployer plan sponsors reporting that as a top concern.

According to the survey, completed this month, 35 percent of the 1,300 plan sponsors responding have increased their deductibles, co-insurance, co-pays or premiums for active workers as a result of the economic crisis. About 22 percent of the respondents have increased co-insurance and co-pays for drug costs for active workers.

Further, one in five plan sponsors said they have either implemented or are considering increases to retirees’ health care premiums, deductibles and co-pays due to the financial crisis.

“The financial crisis has led some to conclude that health care and the economy are inextricably linked. You can’t separate one from the other,” said Sally Natchek, senior director of research of the IFEPB, in a statement. “Given the burden of growing health care costs, it’s likely that health care reform will continue to be at center stage.”

Natchek added that nearly 85 percent of responding plan sponsors think the financial crisis has made major federal reforms more likely.

In addition to plan-sponsor concerns, plan participants are changing their use of the plans, the IFEPB survey found.

During the past six months, about one-third of sponsors noticed an increase in the number of plan members filling out prescriptions and engaging in costly medical procedures before their insurance runs out. About 24 percent of plan sponsors said they observed growth in the number of participants adding dependents to their plans.

“Plan participants are feeling anxious about the possibility of increased cost sharing and a reduction in benefits due to the financial crisis,” Natchek said in a statement. “These fears are not unfounded.”

Survey results are available online at www.ifebp.org/books.asp?6696E or by e-mailing bookstore@ifebp.org or calling (888) 334-3327. Results are free to members and $50 for nonmembers

Filed by Jeff Casale of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Insurers should expect more burdensome regulation as a result of the global financial crisis, according to a survey of insurance regulators and other experts conducted by the Geneva Association.

Released last week, the survey of 46 insurance experts from around the world was conducted during a March meeting in Montreux, Switzerland, of the association’s research group on regulation, supervision and legal issues. Among the respondents were 15 heads of regulatory agencies.

The survey showed that 80 percent of the experts expect the regulatory burden for the insurance market to increase, and more than 67 percent said the global financial turmoil could lead to “over-regulation” of the market.

“The survey results reveal that over-regulation is a real-threat scenario for the insurance industry, a concern shared by some regulators and supervisors,” said Patrick M. Liedtke, general secretary and managing director of the Geneva, Switzerland-based group, in a statement.

Filed by Michael Bradford of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Requiring that annuities or other fixed-income products be included as an option in 401(k) plans is being considered by the House Education and Labor Committee, said Rep. Robert Andrews, D-New Jersey, chairman of the committee’s Health, Employment, Labor and Pensions Subcommittee.

“In the midst of the market meltdown, a lot of the wealthy have moved from equity markets to Treasury bills,” Andrews said in an interview.

“A lot of other people don’t have that option in their retirement savings,” he said.

“I see this as a way that every defined-contribution participant could, in effect, transform their account into a defined-benefit type of account,” Andrews said. “They could opt for an annuity product that gives them a guaranteed income. It’s a choice that everyone should have.”

Only about a third of 401(k) plans have a fixed-income option, Andrews said.

That is a “surprisingly small number,” he said.

Last year, the Education and Labor Committee approved a bill that would require more disclosure of 401(k) fees, and the committee is currently considering similar legislation, Andrews said.

Requiring an annuity or fixed-income option was not in the bill approved last year by the committee. “It’s under consideration” this year, he said.

Legislation aimed at improving 401(k) fee disclosure is likely to include a requirement that all 401(k) plans include at least one low-cost index-type fund, Andrews said. That provision was in last year’s bill.

The mutual fund industry, which manages many of the nation’s 401(k) plans, opposes mandating that type of requirement, said Investment Company Institute president and chief executive Paul Schott Stevens.

“The design of the system, left up to employers, is sound and has worked well,” he said.

About 70 percent of all 401(k) plans already have an equity index fund option, Stevens added.

Other elements of likely 401(k) legislation would include a requirement that specific investment advice to plan participants be dispensed only by advisors who are not affiliated with mutual fund or other companies that sell investments for the plans, Andrews said.

In addition, the committee is looking at a requirement that 401(k) fees be “unbundled” into broad categories so that employers and employees could determine investment management fees, administrative fees and a few other types of fees, he said.

“That way you can shop,” Andrews said.

A similar provision was included in last year’s bill.

Disclosure of revenue-sharing payments made by plan service providers to mutual fund companies for funds included in 401(k) plans also is likely to be included in the legislation being considered, he added.

Andrews predicted that the legislation will gain support in Congress.

“It’s possible to build a broad coalition in favor of 401(k) reform,” he said.

Filed by Sara Hansard of Investment News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Employers are continuing to add workplace wellness programs despite the ongoing recession, according to a survey by Watson Wyatt Worldwide and the National Business Group on Health.

Nearly 58 percent of companies surveyed offer lifestyle improvement programs, up from 43 percent in 2007, and 56 percent offer health coaches, compared with 42 percent two years ago, according to the survey of 489 large U.S. employers conducted in January.

However, employee participation remains low.

Forty percent of companies surveyed said less than 5 percent of their workers participate in a weight-management program offered. Financial incentives do help drive participation in smoking-cessation and weight-management programs, the employers reported.

“Effective financial incentives are one of the keys to encouraging worker participation in these programs,” Scott Keyes, senior group and health care consultant at Watson Wyatt, said in a statement.

Filed by Rebecca Vesely of Modern Health Care, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Nearly 200 corporations have already stopped matching workers’ contributions to their 401(k) plans and the number could very well accelerate—and possibly double—in the coming months.

That’s the prediction of Pam Hess, head of retirement research at consulting firm Hewitt Associates, who noted that roughly 5 percent of corporations have suspended or reduced their matching 401(k) contributions during the past year.

That figure could “easily” rise to 10 percent before the end of the year if the economy does not begin show signs of a sustainable recovery, she said.

“There are some significant and compelling cost savings that employers are recognizing by halting their match,” said Hess, who estimates that a large company could save up to $25 million a year by eliminating or cutting back on its 401(k) contributions.

In the past six months alone, more than 50 companies in the Fortune 1,000 have suspended their matches, according to research from Lincolnshire, Illinois-based Hewitt.

That translates into a combined annual savings of roughly $1.25 billion for these companies.

Filed by Mark Bruno of Investment News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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The salary freezes implemented in 2009 may well carry over into 2010, but retention risks will remain low. A Towers Perrin survey conducted in August and again in December found a significant rise in the number of workers who value job security far more than pay levels, promotions or career development. The declines in employee expectations and mobility that occur in downturns create the conditions for resetting wages to the levels that existed at the end of the previous trough.

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Dear Tongue-Tied:

There are three types of performance conversations to which the “80/20 rule” applies.

The basic idea is this: 80 percent of employees are somewhere in the middle of performance. Ten percent of employees are awesome, demonstrated by consistently exceeding their goals. The remaining 10 percent of employees are at the bottom, reflected in a regular demonstration of mediocrity at its best.

Three types of performance conversation apply to each level. The first is “Coaching for Greatness,” and it is used with employees who are significantly achieving goals. The second is “Managing for Outcomes,” utilized for employees who are performing somewhat to fairly well but are definitely not lighting the world on fire. The third segment, “Working for Improvement,” targets employees at the bottom of performance.

Coaching for Greatness: 10 percent of employees
It is true that supervisors should provide positive feedback when employees achieve their goals. This approach keeps employees motivated to continue to work hard, be engaged and have positive outcomes. I have seen this approach work time and time again in multiple industries, corporations and even the U.S. Marine Corps.

People respond in new and creative ways when they receive recognition and reward for a job well done. Employees in this segment are the achievers, and the approach supervisors could use is focused on Coaching for Greatness. The opportunity is in harnessing the productive energies of employees who are your star performers.

It is important to discover their motivations and tap into applying their high-quality skills in ways that will drive the organization forward. For instance, you might select your top 10 best sales reps and have them design the sales training. Others might want to be mentors. The key is to provide star performers with options that integrate their talents with the company’s needs. By establishing buy-in and ownership, a win-win situation will be created, nurtured and deployed.

Managing for Outcomes: 80 percent of employees
The reality is that many employees are in this segment. They constitute the majority of people who are somewhat, sort of, kind of and maybe getting by enough to continue to have a job. Within this cohort, some have the potential to be star performers, while others do not.

Depending on the type of business you are in, you may or may not be able to keep everyone. In this recession, many people have lost their jobs. The reality is that you have to do what is best for your company and its mission.

To determine your star performers, the performance conversation should focus on understanding the barriers inhibiting an employee from taking it to the next level. By diagnosing the barriers, supervisors are better positioned to develop mutually beneficial solutions for the employee to maximize their job performance. If an employee has barriers removed and is still not reaching goals, then it is a question of external factors, internal factors, motivation, decision-making and/or behaviors.

The supervisor must embrace an investigative mind-set to uncover these areas and assist the employee toward consistently achieving their goals. As long as an employee asks questions, sincerely wants to improve and has had some success, it makes sense to continue to mentor and train them. Time will tell, but at least you are putting your best foot forward and giving the person every opportunity to be successful. Star performers do not always start as stars.

Working for Improvement: 10 percent of employees
Jack Welch, former CEO of General Electric, was a big fan of terminating 10 percent of his managers on an annual basis. Welch believed it moved GE closer to its goals of being No. 1 or No. 2 in the markets it served.

There is some value in Welch’s approach.

Certainly, it is not helpful for poor performers to continue to be poor. But conversations with poor performers should be oriented around a performance-improvement plan that sets specific goals, with due dates and measurable outcomes. The performance-improvement plan is a last resort. If employees don’t achieve the goals, they need to know the consequences. Depending on the supervisor and the situation, the consequence could be continuation of the plan, suspension or termination.

The other option is to assess the poor performers’ strengths, weaknesses and personality. A person might not be a good fit for sales but might be an all-star performer in another area. Supervisors need to learn to be open, flexible, innovative and supportive.

SOURCE: Dana E. Jarvis, School of Leadership and Professional Advancement, Duquesne University, Pittsburgh, March 27, 2009

LEARN MORE: Sometimes, tender-loving care is needed to bring out the best in employees.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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Dear Workforce Newsletter

A day after a Web video showing two Domino’s employees apparently defacing its food, the pizza chain was looking for a reasoned response. Domino’s had located the employees and was examining its legal options, but was trying to stay below the radar.

What a difference a day can make.

After a blogosphere firestorm, the video went from 20,000 views on YouTube to 760,000, the errant employees have been fired and warrants were issued for their arrest. Domino’s has also posted a statement on its corporate Web site.

“The opportunities and freedom of the Internet is wonderful,” the statement reads. “But it also comes with the risk of anyone with a camera and an Internet link to cause a lot of damage, as in this case, where a couple of individuals suddenly overshadow the hard work performed by the 125,000 men and women working for Domino’s across the nation and in 60 countries around the world.”

The statement apologizes for the former employees’ actions and thanks consumers for their continued support.

Domino’s spokesman Tim McIntyre declined to comment for this story, adding that requests to do so were like “asking a victim to describe the crime scene.”

Only yesterday, April 14, McIntyre said the chain would not be posting statements on the company Web site for fear of alerting more consumers to a negative story.

He added that millions of people view the chain’s Web site every day, if only to order a pizza. Such an approach “would be like putting out a candle with a fire hose,” he said.

But a number of crisis experts are concerned that the company is doing just that.

“I do think that decisive action needed to be taken and termination is the first step,” said Gene Grabowski, senior vice president at Levick Strategic Communications, adding that arresting the youths might not be the right next step. “The next thing they have to do is look forward and show customers and prospective customers what they’re doing to make sure this will never happen again.”

First and foremost is instituting a more stringent employee-training regimen and issuing a press release about it. He suggested that Domino’s consider tapping a former Food and Drug Administration official as a food safety czar.

The chain might also consider creating its own YouTube video, beginning with an apology and then describing the quality standards at Domino’s. The chain could drive awareness of the video through paid search engine optimization, its own Web site and Twitter. He noted that Mattel used the strategy successfully in the wake of the Chinese toy scandal of 2007.

Filed by Emily Bryson York of Advertising Age, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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