Category: Benefits

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Employees Rely More on Employer, Health Plan Information

Employees are turning more to their employers and health plans for medical and health-related information, according to a nationwide survey that the National Business Group on Health released Feb. 1.


Employees also say they are somewhat familiar with “comparative effectiveness research,” the science that compares the clinical effectiveness of various health care interventions to determine which course of treatment works the best.


Employers are looking for ways to incorporate comparative effectiveness research into their health benefit design to ensure that employees are receiving safe, appropriate and cost-effective care, said Helen Darling, president of the Washington-based NBGH.


Funding for comparative effectiveness research also is included in the Patient Protection and Affordable Care Act.


The NBGH survey found that 75 percent of employees used their employer as a resource for medical and health information in 2010, a significant increase from 54 percent in 2007, the last time this survey was conducted. In addition, 69 percent of respondents rated their employers as completely, very, or moderately trustworthy sources of such health information.


Darling said part of the reason that employees are relying more on employers to provide such information is the fact that “employers are gateways of information … they are the conduits.” In addition, as employees are paying a greater portion of their health care costs, they increasingly are seeking such information, she said.


“This is a combination of newly empowered consumers” and “more transparency and more information” being made publicly available, resulting in a “more informed and skeptical public,” Darling said.


The NBGH survey also found increased use of health plan resources for health and medical information, with 76 percent of employees relying on that source in 2010, up from 67 percent in 2007.


Growing numbers of workers also turned to health-oriented websites, the survey found, while fewer workers sought information from doctors’ offices, published articles, prescription drug package inserts and, pharmacies, and  as well as medical school, hospital and governmental websites.


Employees also are becoming more inquisitive, either looking up information about their symptoms prior to seeing their doctors (85 percent) or bringing a list of questions (71 percent) or an advocate (52 percent) with them to office visits, according to the survey.
The survey included responses of 1,538 employees ages 22 to 69 who were working for an organization with at least 2,000 employees. It was conducted Oct. 4-15, 2010, by Washington-based market research firm Mathew Greenwald & Associates Inc.  


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


 


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Auditors Probe U.S. Role in GM Funding of Delphi Pension Plan

Federal auditors said they are looking at whether the Obama administration pressured General Motors Co. to provide additional funding for Delphi Corp.’s pension plan for hourly workers.


The audit focuses on GM’s decision after its 2009 bankruptcy to add to Pension Benefit Guaranty Corp. benefits for Delphi hourly workers without doing the same for salaried retirees.


Neil Barofsky, the special inspector general overseeing the $700 billion federal bailout of financial institutions and the auto sector, reported the audit on Jan. 26 in his quarterly report to Congress.


A number of congressmen led by Rep. Christopher Lee, R-N.Y., have questioned whether political considerations played a role in GM’s decision on behalf of hourly retirees.


Barofsky, a former federal prosecutor who also is conducting an investigation of possible illegal conduct by GM and Chrysler Group in their dealer reductions, didn’t say when his audits would be completed.


In June 2009, Lee and more than 20 other lawmakers wrote to Treasury secretary Timothy Geithner to complain that 15,000 salaried Delphi retirees may have their pensions cut by as much as 70 percent.


“It is fundamentally unfair that two groups of retirees from the same company, who worked side-by-side for so many years and who are faced with the same unfortunate situation, are being treated so differently by the federal government,” the letter said.  


Filed by Neil Roland of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Penalties Rise for Uninsured Massachusetts Residents

Massachusetts residents who do not have health insurance coverage face higher financial penalties this year under final rules adopted last week by the state Revenue Department.


The maximum penalty this year for those with incomes that exceed 300 percent of the federal poverty level will be $101 for each month an individual has no health insurance, or $1,212 a year.


Last year, the maximum penalty for noncompliance was $93 a month up to a maximum of $1,116 a year.


Penalties for people with incomes up to 300 percent of the federal poverty level would remain the same. Depending on income, they range from $19 to $58 a month.


Penalties do not apply for individuals with incomes that are less than 150 percent of the federal poverty level, or $16,248 for an individual and $33,084 for a family of four. Those people are eligible for free health insurance coverage, with premiums paid by the state.


Imposing penalties on those without health insurance is a key part of Massachusetts’ 2006 health care reform law, with the goal of moving the state very close to universal coverage.


Last month, a state report said more than 98 percent of state residents had health insurance. The U.S. Census Bureau put the Massachusetts uninsured rate—averaged over 2008 and 2009—at 5 percent.  


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


 


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Towers Watson Acquires Benefits Outsourcing Firm

Consulting firm Towers Watson & Co. has acquired Aliquant Corp., a health and welfare benefits outsourcing firm.


Services provided by Milford, Connecticut-based Aliquant include employee call centers, flexible spending account and COBRA administration. The company, which was founded in 1985, generated $32 million in revenue in fiscal 2010, has more than 200 employees and more than about 75 clients, with workforces ranging from 1,000 to 100,000 employees, according to a Towers Watson news release.


Terms of the deal were not disclosed. New York-based Towers Watson said the deal closed Dec. 31, 2010.


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


 


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Software as a Service May Ease Adoption of Online Employee Benefit Administration

As a result of 2010’s health care reform legislation, many employers will find themselves offering coverage for the first time.


Employers already providing coverage will likely see higher prices associated with benefits as they comply with the various provisions and regulations. One was Caterpillar Inc., a Peoria, Illinois-based heavy equipment manufacturer, which projected that the reforms would cost the company more than $100 million during the first year.


Employers need to brace themselves for new costs under health care reform and work with their benefits administrators. During the next decade, companies will face increased reporting requirements, new regulations, changes to their benefits plans and other legislative demands that will create new challenges for their human resources personnel.


Managing these changes without straining staff or the bottom line is a big challenge. Paper-based benefits management has become inefficient and expensive and presents a challenge to adapt to new health care reform requirements.


The new law also has numerous provisions that require HR personnel to obtain benefits data and statistics as well as communicating this information to the federal government and employees. Benefits management software allows employers to automate many administrative processes to reduce inaccuracies while using administrative time more effectively.


Companies that move their benefits management online have experienced increased efficiencies while cutting costs. Most companies don’t have the time or resources to develop and maintain a system in-house, so one solution could be to adopt software as a service, or SaaS.


An SaaS-based system can be significantly cheaper than an in-house system for many reasons, such as no licensing fees or implementation costs. SaaS also allows companies to avoid the various ongoing costs associated with maintaining a system. SaaS vendors take on all of the maintenance activities, including software upgrades, equipment replacement and troubleshooting. Through SaaS, employers can provide a centralized location for benefits enrollment and management. Employees can access and enroll in all types of benefits from one place: online, any time. This makes the process more manageable and enjoyable for employees and HR administrators alike.


SaaS systems offer increased service to employees without adding pressure to HR personnel. For example, many benefit software vendors include educational videos in their system, coupled with plan comparison and decision support tools. These resources empower employees to make their own decisions while reducing the number of questions for HR.


 Adapt to the new reforms using SaaS
Beyond the aforementioned cost savings to help employers combat the rising costs associated with providing benefits, SaaS can also help employers comply with specific provisions in the law.


With health care reform increasing dependent eligibility to age 26, SaaS often provides tools to conduct an eligibility audit and ensure a company is only providing benefits to qualified individuals. Keeping track of the coverage eligibility of dependents has been challenging for employers, and this new provision will make it even more important for companies to utilize dependent eligibility audits.


In addition, as a result of health care reform, many insurers will begin moving to online enrollment in order to comply with the law’s requirement that they reduce overhead. And by 2014, most insurers will be offering plans through Web-based health insurance exchanges.


These planned changes by the insurance carriers further encourage employers to implement online benefits management systems now to realize additional efficiencies created when carriers upgrade their systems. When both parties are using the same format for their data, they can transfer the information.


The health care reform law also requires enhanced communication between employers and their employees as well as the government. Large employers will be required to report information about the health insurance coverage they offer full-time employees annually to the federal government. If a company is using a paper-based system, this would be a large undertaking. Companies that work with SaaS vendors can utilize tools to automatically pull this type of report.


Health care reform also increases the requirements for communicating benefits information to employees. The new law dictates that companies will have to inform their employees of any changes to their heath plan at least 60 days before the effective date or they will face a penalty. An online SaaS system allows employers to communicate with employees no matter where they are.


Regardless of whether a company is starting a benefits program or already has one that is well-established, it’s a good time to analyze the benefits and costs of software as a service to manage the program.


Workforce Management Online, December 2010 — Register Now!

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Wrangling Begins in Health Care Reform Lawsuit

In all, 20 states, 47 interest groups and more than 70 legislators have filed briefs with the federal district court arguing myriad positions in the case.


Opponents and supporters of the Patient Protection and Affordable Care Act squared off in a Pensacola, Florida, courtroom Dec. 16, arguing over whether Congress has the power to mandate private individuals to buy health insurance and to force states to expand their Medicaid programs.


Both provisions are critical to the reform law’s goal of expanding insurance coverage to 32 million Americans, but critics say Democrats in power overstepped their constitutional powers in trying to achieve it. In all, 20 states, 47 interest groups and more than 70 legislators have filed briefs with the federal district court arguing myriad positions in the case.


“The statute inflicts more damage on the Constitution than any other statute in American history. It threatens to warp the very key architectural elements of our constitutional system,” including undermining individual liberty and state sovereignty, said Baker Hostetler attorney David Rivkin.


Rivkin argued on behalf of Florida Attorney General Bill McCollum and the 19 other states asking U.S. District Judge Roger Vinson to strike down the reform law. Meanwhile, Ron Pollack attended the hearing as executive director of Families USA, which filed a brief in the case.


“When you heard the attorneys general from Florida and Texas, they kept on using the words ‘freedom’ and ‘liberty,’ ” Pollack said in a conference call. “There is a converse to that. There is also the freedom and liberty of people who did exercise their personal responsibility [to have insurance] and are having other people’s health care bill foisted upon them.”


In a separate case on Dec. 13, U.S. District Judge Henry Hudson of Richmond, Virginia, ruled that the insurance mandate is unconstitutional, contradicting two previous judicial decisions in other federal district courts. Experts say the case will likely be decided by the U.S. Supreme Court.


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


 


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GM Spends $200 Million on Retiree Inflation Bonus; Ford $70 Million

General Motors Co. this week spent more than $200 million to pay a lump-sum inflation bonus of up to $700 to its 267,000 hourly retirees and 72,000 surviving spouses.


Ford Motor Co. expects to pay out more than $70 million next week for the same purpose.


Chrysler Group’s figure was not immediately available.


The payments were required by the master United Auto Worker contracts with the so-called Detroit 3 automakers.


Active hourly employees at GM, Ford and Chrysler won’t get inflation adjustments this year. They gave up a cost-of-living allowance this year and next as part of 2007 and 2009 contract concessions.


GM has 53,000 hourly employees and Ford has 41,000. Salaried employees at the Detroit 3 do not receive cost-of-living allowance payments. GM said this month that its 26,000 salaried employees will not receive raises in 2011 either.


The payments to GM hourly retirees were made Dec. 13, said GM spokeswoman Sherrie Childers Arb.


Hourly retirees fondly refer to the $700 inflation catch-up as “a Christmas bonus” because it comes in December every year. Surviving spouses can receive up to $455.


Dick Danjin, a retired GM employee and one-time UAW International representative, said he would have liked to see active workers get cost-of-living allowance too, in light of GM’s profits and Chrysler’s improved financial performance.


“The companies had a contractual obligation to us,” Danjin said. “It’s a shame, though, that some concessions couldn’t be made to active employees given the state of affairs at GM and Chrysler.”  


Filed by David Barkholz of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Some Employers Are Thinking Outside the Benefits Box

In this uncertain economy, most employees feel fortunate if their benefits remain intact and their share of health insurance premiums doesn’t skyrocket.


But some companies are adding sweeteners to benefit packages that go beyond traditional medical and retirement coverage. In February 2011, Home Depot Inc. will begin offering employees a new “backup dependent care program,” which provides discounts for both child and elder care. The Atlanta-based retailer says its new program will pare the daily cost of day care to $25 from a typical $85 and elder care to $35 from a typical $240.


“We felt [the new program] was an excellent way to help our associates deal with life’s surprises,” says Brant Suddath, the company’s director of benefits. “We liked the flexibility it offers because it can be used for any dependent in need of supervised care.”


Home Depot also offers employees a pet health insurance program called “nose to tail coverage,” be the pet a dog, cat, rabbit, ferret, reptile or bird. The company doesn’t subsidize the costs, but it does negotiate a discount for employees.



Other companies are offering such new workplace perks as 100 percent employer-paid medical insurance premiums, on-site health clubs with free personal trainers and a 50 percent subsidy on the purchase of college textbooks.


Why are employers going above and beyond? Although it’s a buyer’s market for most recruiters, says Chris Covill, a national practice leader for New York-based Mercer, there are a few industries such as health care and specialty retailing where “competition for employees is still pretty high.” Employee-friendly benefit plans also can help companies engage and retain their workforce.


The sluggish job market “won’t always be this way,” says Luke Vandermillen, vice president of Principal Financial Group in Des Moines, Iowa. The company annually honors the “10 Best” small- or medium-size companies that show a commitment to financial security through outstanding benefits. Some “companies are taking the long view,” he says, “and have made a strategic decision around investment in employees in the form of benefit programs.”


Principal has noted a recent uptick in wellness programs. For example, Principal’s top 10 this year includes Clif Bar & Co., a Berkeley, California, maker of natural and organic foods and drinks, that offers an on-site gym with a free personal trainer, nutrition counseling and a $500 allowance toward the purchase of a commuter bicycle. It also gives employees other “green” benefits such as $6,500 (taxed) toward the purchase of a hybrid car and a $1,000 yearly (taxed) allowance toward the purchase of home updates.


“Clif Bar is very much at the leading edge for wellness programs,” says Matt Swinnerton, a senior vice president at Precept Group, an Irvine, California-based human resources consulting firm. “It’s part of the culture of their company.”


Similarly, Franklin International, a Columbus, Ohio, manufacturer of adhesives and sealants, which also made Principal’s list, recently began giving out $50 gift cards to employees who take a health-risk assessment. It also offers 50 percent reimbursement of up to $500 per employee per year for college textbooks for workers’ children.


Some companies have long offered creative benefits. Consider, for instance, Ben & Jerry’s Homemade Inc., a pioneer in offering unusual perks. The South Burlington, Vermont, company provides a nap room for weary workers—of which about 10 percent of the employees partake, says Sean Greenwood, the company’s “grand pooh-bah” of public relations.


The nap room “was set up about a decade ago when we moved into our current headquarters,” Greenwood says. “We want people to be able to take care of themselves. They might be tired after coming in from a long trip.”


Additionally, Ben & Jerry’s gives employees three free pints of ice cream to take home every day. “It makes a lot of friends,” Greenwood says. “The original intent was to make employees experts in ice cream. They tell us what” new flavors taste good.


Pretty sweet.


Workforce Management, December 2010, p. 14 — Subscribe Now!

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IRS Extends Deadline to Alter Defined Benefit Plans

The Internal Revenue Service has extended the deadline to Dec. 31, 2011, for employers to formally amend their defined benefit pension plans to reflect plan design changes mandated by several recent federal laws.


The one-year extension granted by the IRS, in Notice 2010-77, does not change the effective dates of various requirements, such as one that requires full vesting of benefits earned by employees in cash balance plans after three years of service.


The one-year extension will give employers more time to prepare plan documents, which will be very welcome, said Alan Glickstein, a senior consultant with Towers Watson & Co. in Dallas.


Notice 2010-77 may be viewed online at www.irs.gov. 


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


 


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Medical Malpractice Liability Reforms, Health Care Benefits Up for Vote

A high-profile commission is expected to vote Dec. 3 on a series of wide-ranging recommendations—including medical malpractice reforms and phasing out the tax-favored status of employer-provided health care benefits—as part of a comprehensive plan to reduce the federal budget deficit.


The bipartisan National Commission on Fiscal Responsibility and Reform formally released its report Dec. 1. Among other things, the report says that medical malpractice reform could save $17 billion through 2020.


The commission recommends several policies, including modifying the collateral source rule to allow outside sources of income, such as workers’ compensation, collected as a result of an injury to be considered in determining awards and imposing a statute of limitations on medical malpractice lawsuits. The report also calls for the creation of special “health courts” to hear medical malpractice cases.


Although the commission does not specifically endorse statutory caps on punitive and noneconomic damage awards in medical malpractice cases, the report notes that many commission members support caps and that “we recommend that Congress consider this approach and evaluate its impact.”


The report, in what it calls an “illustrative proposal,” suggests that gradually, starting in 2014, employees would be taxed on employer health care plan contributions. By 2038, all employer health care plan contributions would be added to employees’ taxable income.


Under current law, employer contributions—regardless of the amount—are excluded from employees’ taxable income. However, under the new health reform law, starting in 2018, a 40 percent excise tax will be imposed on costs exceeding $10,200 for individual coverage and $27,500 for family coverage. The tax would be paid by insurers and, in the case of self-funded plans, by third-party claims administrators.


The report also recommends giving the board of the Pension Benefit Guaranty Corp. authority to raise premiums that employers with defined benefit plans pay the PBGC.
The base annual premium now is $35 per plan participant, and sponsors of underfunded plans pay an additional premium of $9 per $1,000 of underfunding.


Under the current law, except for an automatic adjustment based on the growth in wages, only Congress has authority to boost PBGC premiums.


Giving the board of the PBGC, which has a $23 billion deficit, authority to raise premiums “would sharply reduce the likelihood of a government rescue” of the PBGC in the future, the report said.


The likelihood of Congress acting on any of the proposals isn’t known. Taxing health care benefits, for example, is extremely controversial, and it would be a big “stretch” for Congress to completely eliminate the tax exclusion, said Frank McArdle, a principal with Aon Hewitt Inc. in Washington.  


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


 


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