Category: HR Administration

Posted on

One Year Later Merged Peopleclick Authoria Weathers Changes

Charles S. Jones is frank about what went wrong at Peopleclick Authoria last year.


After the private equity fund that Jones runs acquired Peopleclick for $100 million in January 2010 and merged it with Authoria, the company brought in an outside manager to oversee the integrated recruiting and talent management systems vendor. It was a bad move.


In ensuing months, an undisclosed number of former Peopleclick and Authoria employees grew dissatisfied with CEO Joe Licata’s management style and quit or announced plans to leave, according to Jones, analysts and other industry observers familiar with the situation.


On the product side, the newly merged company’s competitors hogged the spotlight and won vendor competitions despite analysts’ assessments that Peopleclick Authoria’s products were just as good.


Things came to a head in November when Licata left and Jones stepped back in as CEO, a job he’d held briefly after the merger was announced. Since then, Jones, who is also Peopleclick Authoria’s chairman, has focused on righting the listing business, rehiring at least 13 ex-staffers and issuing stock options to each of the company’s 540 employees.


“If I could be utterly candid, I was called back because it restored confidence in the business and its mission,” Jones told Workforce Management in a phone interview from the company’s Waltham, Massachusetts, office.


Licata could not be reached for comment.


The changes at Peopleclick Authoria don’t end with the leadership shake-up. Jones confirms that Bedford Funding, the $800 million White Plains, New York, private equity firm that owns the company, is negotiating to buy an unnamed human resources technology business in a deal expected to close in the first half of 2011. Industry analysts have speculated that an e-learning provider would make a good acquisition since it fills a hole in the company’s existing product line. Jones agrees, but declined to disclose additional details pending the acquisition’s formal announcement.


If such a deal materializes, it will be the latest of more than a dozen mergers and acquisitions in the talent management market in 2010 and the first quarter of 2011. Merger and acquisition activity is blistering as companies fill out product offerings to increase their share of a talent management market that analyst Bersin & Associates predicts will grow 15 percent this year to $3 billion.


Fueling the spending on talent management software tools is a resurgent economy and growing recognition by companies that people management plays a key role in bottom-line results. The buzzing market makes for a volatile industry landscape.


“On any day, any vendor could be in play,” says Lisa Rowan, technology researcher IDC’s longtime HR analyst.


Despite the potholes, 2010 wasn’t an entirely bad year for Peopleclick Authoria. According to Jones, the company successfully merged former Peopleclick and Authoria operations and sales teams and is hiring people for research and development, sales, and sales support positions; a national jobs board lists 29 openings.


Efforts to cross-sell Peopleclick’s recruiting systems and Authoria’s talent management systems are coming to fruition. The number of customers buying products from both platforms rose 50 percent in the past year, Jones says, and includes clients such as Citrix Systems, the virtualization software vendor.


That’s proof that by aggregating product lines, the company is better equipped to take on competitors such as SuccessFactors and Taleo, Jones says. Others agree.


“Peopleclick Authoria is one of the success cases for a merger in our industry,” says Elaine Orler, president of Talent Function Group LLC, a San Diego-based staffing and recruiting consultant. “They were very prescriptive about how the organizations would be structured together and the teams involved were very active in making the merger a success for the customers.”


The company’s strategy got a major vote of confidence in June 2010. After an industry-wide search spanning several months, Mercer LLC, the $3.3 billion HR outsourcer, technology and consulting company, said it was tapping Peopleclick Authoria to provide talent management functions for a new human capital management products and services platform called Human Capital Connect.


Though the partners haven’t disclosed any customers, Jones says deals in the pipeline will add “millions” to Peopleclick Authoria’s revenue, which closed 2010 at approximately $83 million. Peopleclick Authoria’s internal turmoil did not shake Mercer’s faith in the company, says Kim Seals, Mercer’s global leader of human capital operations and technology solutions practice.


“Charles Jones has been a champion of Mercer Human Capital Connect from the beginning and actively worked with us to define the offering,” she says. “The continuity of Charles’ leadership and (Peopleclick Authoria’s) management execution has ensured that there was no impact with the exit of Mr. Licata.”


In another partnership announced last fall, the company teamed with Brad Smart to incorporate the “topgrading” innovator’s employee ranking system into its recruiting, performance, succession planning and compensation software.


Peopleclick Authoria is already pitching the partnership to customers and in ads on its website. But Jones says it will take another six months to completely weave into its product line the system that Smart, an industrial psychologist and management consultant, has developed. The process uses in-depth interviews, meticulous reference checks and other hiring techniques to identify and advance “A” players, redirect or retrain “B” and “C” players and dump employees seen as deadbeats.


Through good times and bad, Jones and Peopleclick Authoria have had the support of Bedford Funding, which is making human capital management vendors the focus of its investment portfolio. They’ve also had the approval of PSP Investments, the $50 billion Canadian government pension fund investment manager that poured tens of millions into Bedford Funding so the equity firm could buy Authoria in 2008 and Peopleclick two years later.


Mark Boutet, communications and government relations vice president at the Montreal-based firm, wouldn’t comment on specific investments. But since the relatively new fund won’t start paying out benefits until 2030, it’s made long-term commitments to all its investments.


“No matter what happens in the market, we aren’t forced to sell any assets,” he says.


To rectify Peopleclick Authoria’s marketing and public relations deficits, Jones plans to hire an HR-industry public relations firm effective March 1 and is simultaneously launching the company’s first social media marketing campaign. He also re-hired Christian Merhy, Authoria’s former senior director of marketing, to take over as the company’s marketing vice president.


On Jones’ first day back on the job in November, he expanded an existing stock option plan to cover Peopleclick Authoria’s entire workforce so everyone would be as motivated as top managers to help the company succeed.


In his first brief stint as CEO immediately after the merger, Jones divided his time between Peopleclick Authoria and Bedford Funding. Today he is completely focused on running Peopleclick Authoria while other Bedford Funding partners attend to fund business, and he doesn’t expect that to change.


“I like this place, and since I own it, I have no intention of firing myself,” he says.
 


Workforce Management Online, February 2011 — Register Now!

Posted on

Small Banks Make Change in Layout, Job Descriptions

Banks and their employees are branching out in new directions. Because more people are doing their banking online, financial institutions are opening smaller branches that leverage staff and technology in new ways.


Teller lines and drive-up windows are disappearing, replaced by consultation areas and two-way video feeds in the drive-thru lanes. At the same time, the dividing line between branch job functions has become blurred; employees are expected to learn and perform tasks ranging from check cashing to account services to sales, driving banks to recruit “universal associates.”


“Technology has brought fantastic efficiencies to the banking industry,” says Scott Smith, senior vice president of Interbrand Design Forum Inc., a branding consultancy. “Banks must focus on that technological enablement while still trying to attract customers to their branches,” where most products and services are sold. In its third annual financial management survey, Intuit Financial Services found that more than a third of consumers use online banking and more than a quarter say they have cut back on branch visits.


The traditional areas of a branch have been the teller cages and the “platform,” which is the desk area where managers and relationship bankers conduct client consultations. But secure cash recyclers that dispense currency have eliminated open cash drawers and thus the need for physical barriers, enabling tellers to step out into the open. “Tellers now greet customers at the door and walk them into the branch while asking about their needs,” says John Hyche, principal of Level 5, an Atlanta architecture and interiors firm that specializes in branch design. “Banking is now a whole new world of communication, engagement and listening.”


Many financial institutions have changed their hiring and training practices to reflect this new paradigm. At Bank of Georgetown in Washington, D.C., for example, the teller window has been replaced with desks and comfortable chairs for customers. And all branch employees are known as customer service representatives.


When she recruits, Christine Linford, vice president and director of human resources, focuses on attitude: “We look for energetic people with a service mentality and a warm personality.” She finds prospective employees in some unlikely places. Linford gave her business card to an airline ramp agent whose can-do attitude and helpfulness under pressure impressed her so much that she hired the woman a few weeks later.


“As the branch becomes a rich sales environment, bank tellers have the wrong skill set moving forward,” says Brett King, a consultant and author of Bank 2.0: How Customer Behaviour and Technology Will Change the Future of Financial Services. “Strong advisory and sales capability is needed.” King reports that several of his clients have turned to hiring from the hospitality and advertising industries in the quest for associates with stronger people skills.


Fewer in-person transactions have driven banks to deploy staff more strategically. “They must share the work to maximize productivity and efficiency,” says Jackie Hudson, retail practice director of enterprise solutions for Verint Systems Inc. She says some clients are gearing up for total “cross-channel workforce optimization” in the next two years; this approach will assign call-center and back-office tasks to underutilized branch employees.


WSFS Bank in Wilmington, Delaware, trains new employees to become universal associates and has created a “permeable” teller counter in its branches, a barrier-free design that permits associates to move about with customers.


Instead of hiring people with banking experience, Rick Wright, the bank’s executive vice president and director of retail banking and marketing, says he seeks recent college graduates and candidates with retail experience. To assess applicants’ potential, WSFS conducts extensive testing and considers about 100 candidates for every two to three open positions.


“Our HR design plan makes employees very difficult to hire,” Wright says. Banks traditionally have used on-the-job training, but new WSFS associates spend 16 weeks in classroom programs. These testing and training practices have proven to be a worthwhile investment, Wright says. Turnover at WSFS is just 17 percent while the industry average is 40 to 50 percent.


WSFS has been deploying universal associates for about eight years. Gallup surveys commissioned by WSFS show that customers are more satisfied, and the approach is also more efficient. “We can staff a 4,000-square-foot branch with two or three people,” Wright says.


Workforce Management, January 2011, p. 12 — Subscribe Now!

Posted on

Fewer Company Executives Say Workers Taking Own Financial Reins

Thirty-eight percent of human resources executives surveyed in late 2010 by Aon Hewitt “are confident that workers are taking accountability for their financial future,” down from 43 percent a year earlier, according to an Aon Hewitt news release issued Jan. 26.


Only 30 percent of the executives “are confident employees are sufficiently prepared for retirement, showing no improvement” between 2009 and 2010, the release said.


The latest survey, covering 210 midsize to large companies, was conducted in November 2010. The results were compared to a similar survey conducted in November and December 2009 that was published in early 2010.


Because companies are worried about employees saving for retirement, they are making additional plan design changes to increase participant savings rates and “promote responsible investing,” according to the release.


One change is increased automatic enrollment. Last year, 57 percent of defined contribution plans offered automatic enrollment compared with 24 percent in 2006, the release said. Among companies that do not offer automatic enrollment, 36 percent said they are likely to add the feature this year, the release said.


“Automatic contribution escalation is now offered by 47 percent of plans, up from 17 percent, and automatic rebalancing is offered by 49 percent of plans, up from 27 percent in 2006,” the release said. “More than a quarter of employers—26 percent—are likely to add automatic escalation in 2011, and a third are considering adding automatic rebalancing.”


The Aon Hewitt survey also found that once participants enroll in a 401(k) plan, “their investing habits are often suboptimal,” the release said. “Many employees are not investing in a diversified portfolio, are taking inappropriate risk and very few rebalance their portfolio regularly, if at all.”


The annual survey, which has been conducted since 2005, includes Aon Hewitt clients as well as other companies, MacKenzie Lucas, an Aon Hewitt spokeswoman, said in an e-mailed response to questions.


The survey of companies with a combined 6.2 million employees includes responses from firms with defined contribution, defined benefit and retiree medical plans, she said. Ninety-four percent of the companies in the survey have a defined contribution plan, she added.  


Filed by Robert Steyer of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Posted on

Six Ways to Guarantee Finance Doesn’t Respect You as an HR Pro

You’re an HR leader, and you demand respect. You deserve to be in the same league as marketing, engineering and operations.


There’s just one little catch: You won’t be viewed as an equal to anyone until you’re respected by the group that controls the budget, the money, the analysis and, thus, your career.


That’s right; I’m talking about finance. Respect the number jockeys and seek to influence them weekly, if not daily. If you’ve ever struggled to be taken seriously by your peers on the leadership team, odds are the finance group held the keys to your turnaround.


Of course, influencing the finance group takes focus, and it’s something HR classes and organizations don’t teach you in textbooks. The result is a trail of tears, and here’s the top six ways many in our profession guarantee the finance teams around them don’t respect human resources pros:


1. Not having your game together when it comes to loaded full-time employee cost. Your friends in finance like to think of the business world as a collection of units, and they understand better than anyone the cost, value, demand and timing of every unit in the company, which means they understand the business. Guess which department controls the units that account for 60 to 80 percent of the units that matter from an expense perspective? You guessed it, it’s you: HR. Nothing irritates a finance pro more than line leaders who don’t understand the cost of what they control. When they ask you for the loaded full-time-equivalent cost of each employee in the company, they’re asking for a ballpark figure related to the cost of benefits, payroll taxes—all the costs beyond salary required to house an employee. They think you’re weak if you can’t cite that on command and break it down for them in detail conversationally.


2. Not being the expert of record when it comes to compensation at the local market level. Compensation budgets are made up of all the positions your company expects to employ in a budget year. Your friends in finance will periodically get requests to add positions to the budget, at which time you’ll get the following request from the bean counters for budget purposes: “What’s the salary you expect to offer for a call center rep in Rochester?” It’s not a range; it’s the actual offer you would expect to make on a consistent basis for that position in Rochester. They’re plugging in a market number to drive the cost model. If your answer is “I don’t know” or “Let me get that for you from my comp analyst,” assume the finance folks think you’re a lightweight. Their thinking is as follows: Call center spots make up 29 percent of company headcount, so shouldn’t you know the market rate for reps where your company has call centers so you can help make business decisions about where to expand and contract? They’re right.


3. Not having a dashboard of metrics you call your own in HR to help drive your decisions. Finance folks love dashboards, and when they’re talking shop with you about stuff that affects them, they love to hear that you’re in control of your own numbers. Your dashboard doesn’t have to be anything fancy. Items like turnover, cost per hire, time to fill, etc., are fine, but you have to be able to talk about each metric and show competence that you know which levers you can pull to affect any item on your dashboard. Also, make sure you update the dashboard you use monthly and send it out to those who need to know (including all in finance). Nothing affects finance’s view of your HR practice like the feeling you run your business by the numbers, even if it’s simply one of many inputs you consider.


4. Not being able to distinguish what human capital assets are expendable in other people’s departments. The exercise is called the fire drill, and it’s the periodic cost reduction exercise that calls for the business to consider what budgeted items they can live without and, in horrible times, what current assets can be shed without totally cannibalizing the business. Not all fire drills are public. Since people costs constitute 60 to 85 percent of a company’s total expense load, finance wants to be able to come to you for opinions about which human capital assets (people and the items in place to support them) are expendable. If you don’t know enough about the talent in your company to have an opinion, you’re useless in this drill.


5. Being unable to talk about any of the above metrics, numbers or information on demand without doing research. Real finance pros have a pretty good directional feel for the numbers they track. Ask them a question and they’ll give you an answer they feel pretty good about, even if they want to double-check the data after providing you with a guesstimate. Once they check, they’re usually right.


Of course, they expect the same from you. They want you so in tune with the numbers related to your function that you can sling accurate guesstimates with the best of them. The reliability of your guesstimates in spot conversations with finance is built over time, so there’s no way to fake this. You simply have to be in command of the number detail that emulates from your HR practice.


6. Not doing cool stuff that benefits the finance and accounting departments. It’s Influence 401, people. When you’ve got pilot projects and freebies that offer great exposure and benefits to the departments that receive them, don’t leave out the number jockeys. They’ll remember you didn’t forget them and make sure you’re taken care of as a result.


Bottom line: You can’t be viewed as an equal without having a productive, positive relationship with the finance group. It won’t happen by simply being nice to them. If you want finance to think you’re a player as an HR pro, you’re going to have to understand the numbers that drive the HR function from their viewpoint.


But simply understanding the numbers isn’t enough. You’ve got to know it well enough that you can discuss it on the fly without supporting documentation. Like Jeff Spicoli from the film Fast Times at Ridgemont High once said, “Learn it, know it, live it.”


Words to live by if you want respect from finance.


Workforce Management Online, January 2011 — Register Now!

Posted on

Financial Advisers Get More Time to Work Up Bios of Staff

Advisers have an additional four months to prepare “plain English” brochure supplements about their investment personnel thanks to an extension granted by the Securities and Exchange Commission late last month.


The extension for the supplements—known as ADV Part 2B—gives existing investment advisers with a fiscal year ending Dec. 31 until July 31, 2011 to file the ADV Part2B to new and prospective clients. They have until Sept. 30, 2011, to deliver the documents to existing clients.


New investment advisers registering through April 30 have until May 1 to deliver the brochure supplements to new and prospective clients and they have until July 1 to deliver them to existing clients.


The commission estimates 92 percent of SEC-registered advisers operate on a December fiscal year-end.


The regulator did not extend the compliance date for the ADV Part 2A, which contains information about the advisory firm. Those documents still must be prepared by March 31 for advisers with a fiscal year that corresponds to the calendar year.


Large advisers with many supervisory individuals had asked regulators for additional time to prepare these documents, said Paul Edwards, head securities lawyer with Day Ketterer in Canton, Ohio.


Part of their difficulty has been collecting the education, business background and disciplinary information about all the individuals. The other challenge is figuring out how to present it, Edwards said. The SEC rules allow advisers to include up to five personnel profiles in one brochure or individual documents for each person, he said.


The SEC approved rules in July that require advisers to make the brochures that they give to clients more understandable. Previously, advisers didn’t have to file ADV Part 2 documents with the commission. But they will have to file the new ones electronically as soon as the registration system is able to accept them, Edwards said.   


Filed by Liz Skinner of InvestmentNews, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Posted on

PEO Firm Administaff Buys Software Line

Administaff Inc., the largest professional employer organization in terms of 2009 net revenue, acquired the OrgPlus software product line from HumanConcepts for an undisclosed sum.


OrgPlus software assists in the creation of detailed organization charts that can help companies better understand their organization structure, increase productivity and more easily plan for change, according to Administaff. The software is aimed as small and medium-size firms.


Although the price was not disclosed, Administaff said the acquisition costs and first-year operations are not material to its 2011 results.  


Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail editors@workforce.com.


 


Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Posted on

Dear Workforce We Are at 50 Employees. How Do We Prepare For FMLA?

Dear Crossing the Threshold:

You will need to begin complying with FMLA as soon as you employ 50 or more people for at least 20 workweeks in the current or preceding calendar year. The law does not state that an organization must have 50 “eligible” employees (as in people who have worked there for 12 months). It states that organizations with 50 or more employees for at least 20 workweeks in the current or preceding calendar year must comply. If you think you will cross that threshold, you should be preparing to comply in advance of the mark.

For starters, you will need to develop your own corporate FMLA policy, taking into consideration such key questions as:

• Will your organization run FMLA, disability and workers’ compensation time concurrently?

• If your organization employs a married couple, will you allow both parents to take 12 weeks off for the birth of a child, or will you mandate that they split the leave time?

You also must develop the needed correspondence for employees who request leave, as employees who have worked for your organization for 12 or more months already are eligible and may begin taking leave.

You can find sample FMLA corporate policies, form letters, medical certification forms, posters and notification language from the Labor Department. The sooner you begin the process, the more prepared you will be to handle FMLA issues that can—and certainly will—arise.

SOURCE: Jim Brown, senior vice president of FMLASource, an affiliate of ComPsych Corp., Chicago

LEARN MORE: Organizations are struggling to adapt to frequent changes to FMLA.

Workforce Management Online, December 2010 — Register Now!

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.

Ask a Question
 Dear Workforce Newsletter
Posted on

Regarding Disciplinary Action Toward an Employee, Is Honesty the Best Policy?

Employers are not legally required to give employees the reason for a disciplinary action, such as a discharge.

So, why bother? The employee may become angry or ask difficult questions. Confrontations are never fun. That said, the substantial legal benefits from making the effort to explain a disciplinary action far outweigh the discomfort that may be involved.

When an employee is discharged and no reason is given, the individual is left to make assumptions that may not be accurate. One of those assumptions is that the individual has been discriminated against or subjected to an unfair action.

In that situation, the individual may well think in terms of legal action against the employer. On the other hand, if the employer adequately explains the performance-related reasons for a discharge, most individuals will understand that their performance was substandard and go on to another job.

This issue is particularly important for a staffing service that is often required to remove its employees from an assignment based on the customer’s direction. Some staffing customers take the position that if they give a reason to the staffing service for removing an employee from the assignment, it constitutes a form of co-employment to be avoided.

Unfortunately, although the customer’s involvement in a disciplinary action involving a temporary employee may have co-employment implications, the temp who is removed from a position without an explanation will have the same reaction as any other employee and will be more inclined to assume that discrimination played some role in the removal. The next step is for the employee to file a discrimination charge against both the staffing service and the customer.

Put simply, honesty is usually the best policy when taking disciplinary action. Please take note that individual situations should be discussed with your HR or legal adviser.

Workforce Management Online, December 2010 — Register Now!

Posted on

5 Questions With Joanna Geraghty: Not Leaving Anything Up in the Air

Joanna Geraghty, 38, became JetBlue’s chief people officer in September. With a background in aviation disaster litigation, she was previously vice president and associate general counsel. Geraghty takes the reins as Forest Hills, New York-based JetBlue is adding routes and expanding its workforce. But the company’s image also has taken some knocks, including last summer’s incident involving a disgruntled crew member who exited an airplane via its emergency slide. Geraghty recently spoke to Workforce Management senior writer Rita Pyrillis.

Workforce Management: How will your legal background figure into your role as chief people officer?

Joanna Geraghty: A legal education and practice provide you with a set of analytical skills that enables you to see things through many lenses. [This] serves you well in any corporate role but particularly in HR. In HR, you try to balance and take into consideration many different perspectives. By working in a client service role both inside and outside JetBlue, I think I have a good understanding about the importance of timely, accurate and clear service. My client is our crew member. If I serve JetBlue’s crew members really well, they, in turn, will serve our customers really well. This is what being a good people officer is.

WM: What do you see as the biggest workforce challenges ahead for JetBlue?

Geraghty: Maintaining a direct relationship with our employees in an industry that is highly unionized will always be a critical component of our strategy. Distinguishing ourselves as a destination employer while remaining competitive and cost conscious will be a big challenge. Finally, ensuring that our culture and our values remain core to JetBlue as we grow and expand is perhaps one of our most important areas of focus.

WM: What are your immediate goals?

Geraghty: Working on the strategy for the next three years, [including] revisiting our benefits strategy to take into consideration health care reform; engaging in a comprehensive compensation analysis; developing an effective rewards and recognition program; and developing a more robust crew member engagement strategy. Longer term, we are developing a comprehensive succession plan that includes refreshing our job descriptions and pairs performance management and succession planning efforts with tailored individual development plans.

WM: There was a tremendous amount of media coverage about the JetBlue employee whose dramatic departure down an airplane slide this summer made international headlines. You were promoted shortly after that. Was there any connection there? And how did the negative publicity affect morale?

Geraghty: There was no connection. In terms of the effect on morale? Nothing of any significance. It was an isolated incident. While the incident received a lot of media attention, from our perspective, deploying a slide is an extremely unsafe behavior. We were surprised by the position the media took by portraying [the employee] as a ‘folk hero.’ I don’t think there was an understanding of the danger of deploying the slide and that it could have killed somebody.

WM: JetBlue is known for its customer and employee loyalty. How does the company measure employee engagement?

Geraghty: We use the Net Promoter Score as a barometer for employee engagement. … The question the survey asks is: ‘On a scale from zero to 10, how likely are you to recommend JetBlue as a good place to work?’ We review it on a monthly basis and will engage in a deeper analysis looking at department information and at times focus group information to try to understand the drivers of the score. We are building a team that can partner with departments to assist with developing action plans to improve low scores.

Workforce Management, December 2010, p. 8 — Subscribe Now!

Posted on

Waivers for Mini-Med Plan Sponsors Nearly Double

Government regulators in just a month nearly doubled the number of “mini-med” plan sponsors that have been granted one-year waivers from meeting certain requirements of the federal health care reform law.


As of Dec. 3, the most recent data available, the Department of Health and Human Services had approved requests from 222 mini-med plan sponsors with a total of 1.5 million plan enrollees for one-year waivers. That’s up from 117 sponsor waivers affecting 1.18 million enrollees as of Nov. 1 and 30 waivers affecting nearly 969,000 enrollees as of Sept. 30.


Many of the most recent waivers were granted to local union health care funds. In all, nearly three dozen waivers involve union funds.


The waiver affecting the largest group of enrollees was granted in September to the United Federation of Teachers Welfare Fund in New York, whose mini-med plan has 351,000 enrollees, according to its filing.


The waivers are needed because most, if not all, mini-med plans run afoul of federal rules—mandated by the health care reform law—that set a minimum annual dollar limit on essential benefits that health care plans must provide in 2011, 2012 and 2013.


The minimum limit is $750,000 in 2011, $1.25 million in 2012 and $2 million in 2013.
Starting in 2014, the law bars annual limits for essential benefits.


The minimum limits, though, are far more than the maximum benefits provided through mini-med plans, which typically are offered to low-wage, part-time or seasonal employees.


Under the health care reform law, low-wage employees might qualify for government-subsidized coverage that will be available from insurers offering coverage through new state insurance exchanges starting in 2014, reducing the need for mini-med plans.


Until then, mini-med plan providers can obtain waivers from the required minimum annual benefit in situations where meeting those requirements would result in a significant decrease in access to benefits or significantly increase premiums, HHS said.


Sponsors are required to notify mini-med enrollees that they have received the waivers.  


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


 


Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.