Category: Benefits

Many U.S. workers use social media for personal reasons, but they aren’t as keen about receiving benefit communications through online sites such as Facebook and Twitter, according to a survey that the National Business Group on Health released Wednesday, July 7.

Forty-seven percent of full-time U.S. employees surveyed by NBGH said they use Facebook either daily or weekly for personal reasons, but only 7 percent said they use the social networking site for business.

Moreover, about three-fourths of workers said they were not interested in receiving information via Facebook about their employer-sponsored health benefits, tips on improving their health or saving money on health care. About 80 percent said they had no interest in being “tweeted” with health benefits information via the Twitter website.

“Because we hear so much about social media … we’re made to feel that we’re out of it if we’re doing the old-fashioned things like home mailings,” said Helen Darling, present of the Washington-based NBGH, a consortium of nearly 300 large U.S. employers. “But even the youngest employees prefer receiving communications the old-fashioned way.”

In fact, less than 20 percent of employees younger than 34 said they would like to receive information such as how to choose a health plan or exercise tips via Facebook, according to the survey.

Based on the findings, Darling recommended that employers test the use of social media before adopting it for their employees. She also said that employers should not abandon the tried-and-true methods of benefit communications, including print mailings and workplace distributions and e-mail.

The survey, which was conducted in March, included responses from 1,500 full-time workers ages of 22 to 64.  

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

 

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Google Inc. is offering to reimburse its gay and lesbian employees for the additional federal tax they pay on the value of company-paid domestic partner benefits.

The offer, which would apply retroactively to January 1, came after a gay employee pointed out the disparity for same-sex couples covered by the Mountain View, California-based technology firm’s employee health benefits plan, a spokesman said Thursday, July 1.

Laszlo Bock, Google’s vice president for people operations, acknowledged that it wasn’t fair that same-sex couples were paying an estimated $1,069 more annually in federal taxes on those benefits, the spokesman said.

To equalize other benefits available to same-sex partners of employees, Google also is eliminating a one-year waiting period to qualify for infertility benefits. It also is including domestic partners in its family leave policy, going beyond the federal Family and Medical Leave Act, which requires employers to give at least 12 weeks of unpaid leave to workers to recover from a medical condition or care for family members.

The Google spokesman said it is uncertain at this point how many of the company’s 20,600 employees are likely to take up Google on the reimbursement, which will be noted as a line item on their paychecks rather than added to their pay. He explained that adding it to their compensation would give the impression that gay and lesbian employees were being paid more than their heterosexual counterparts.

“We’re not actually increasing the salaries of the employees. Salaries are tied to the work you do. It’s more of a reimbursement. It’s like a company paying for an employee’s cell phone bill. We’re offering the option of a reimbursement to cover a federal tax,” the spokesman said.

He said Google is not disclosing the estimated additional cost for the reimbursement.  

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

 

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President Barack Obama has signed into law pension funding relief legislation.

Obama’s action came Friday, June 25, after the House approved the bill, H.R. 3962, on a 417-1 vote. Only Rep. George Miller, D-California, who chairs the House Education and Labor Committee, voted against the measure. Miller objected to the omission of provisions that would beef up disclosure of 401(k) plan fees.

The measure would give employers temporary alternatives to the basic requirement—embedded in a 2006 law—that requires employers to amortize pension funding shortfalls over seven years.

Under one alternative, employers could amortize funding shortfalls over 15 years for any two plan years from 2008 to 2011.

Under the other option, employers would have to pay interest on a funding shortfall for only the two plan years they choose. After that, the seven-year amortization period would begin. For example, if an employer chose this approach for the 2010 plan year, it would only pay interest—roughly 6 percent based on current rates—on the shortfall in 2010 and 2011, while the shortfall would be amortized over seven years starting in 2012.

Either approach would significantly reduce the cash pension plan contributions employers would have to make compared with current requirements.

“While this bill is not perfect, it is an important step in providing urgent relief to plan sponsors—many of whom continue to be strapped for cash and must choose between funding their plans or delay hiring and capital investments or even further cut back on jobs,” Mark Ugoretz, president of the ERISA Industry Committee in Washington, said in a statement.

Some of the relief provided to employers, though, would be eroded by a provision known as the cash-flow rule. That provision would require employers that use either of the temporary funding schedules to contribute extra cash to their plans to equal “excess” employee compensation or “extraordinary” dividends.

For example, an amount equal to compensation in excess of $1 million paid to any employee would have to be contributed to the plan.

Employers adopting the interest-only funding approach would be bound by the cash-flow rule for three years, while the rule would apply for five years for employers adopting the 15-year amortization schedule. The pension funding relief provisions are part of a broader measure that temporarily reverses a cut in fees the government pays doctors treating patients covered by Medicare.  

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

 

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A revised tax bill unveiled Wednesday, June 16, by Senate Finance Committee Chairman Max Baucus, D-Montana, does not include an extension of federal COBRA premium subsidies, further decreasing the likelihood that Congress will extend the subsidy.

In March, the Senate approved a tax bill, H.R. 4213, extending the subsidy to employees laid off through year-end. In the absence of congressional action, the 15-month, 65 percent subsidy is not available to employees laid off after May 31.

But the House in May stripped the subsidy and its projected cost of nearly $8 billion from the measure before passing it and sending the bill back to the Senate.

While Senate Democratic leaders had discussed reducing the extension to November 30, a tax bill that Baucus unveiled last week omitted the subsidy, while a subsidy extension also is not in the latest version.

An amendment to the tax bill proposed by Sen. Robert Casey, D-Pennsylvania, would extend the subsidy to employees laid off through November 30. But the Senate has not yet taken up the Casey amendment, which faces an uphill battle to win approval as Senate Democratic leaders look for ways to reduce the cost of the overall bill.

The revamped bill, like the previous version, includes provisions to give employers more time to fund pension obligations, but excludes a provision in the tax bill passed by the House that would beef up disclosure of 401(k) plan fees to participants.  

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

 

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Final interim rules detail situations in which group health care plans will be exempt, or grandfathered, from complying with certain requirements of the new health care reform law.

While the law bans certain plan features, such as exclusions for pre-existing medical conditions and lifetime dollar limits for all health care plans, other requirements such as full coverage of preventive services do not apply to grandfathered plans.

In addition, the requirement that employers extend coverage to employees’ adult children up to age 26 does not apply to grandfathered plans until January 1, 2014, in situations where the adult child is eligible for coverage from his or her own employer.

The rules, released Monday, June 14, by the Internal Revenue Service and the departments of Labor and Health and Human Services lay out changes that current plans can make and still keep their grandfathered status.

For example, a grandfathered plan would lose its status if it eliminated coverage of a specific condition, even if the condition affects few individuals. The interim final rules cite cystic fibrosis as an example.

In addition, plans cannot boost co-insurance requirements and retain their grandfathered status.

However, grandfathered plans can boost deductibles and out-of-pocket limits, but only up to a certain percentage. The maximum percentage is defined as the increase in medical care component of the Consumer Price Index since March 23, plus 15 percentage points.

Take the case of a medical plan with a $1,000 family deductible. If medical care inflation rose by 5 percent from March 23 through the end of the year, the employer could raise the deductible by $200 for 2011 and the plan could retain its grandfathered status for 2011.

In the case of co-payments, a plan could retain its grandfathered status if it increased co-payments up to $5 or a percentage equal to medical inflation plus 15 percentage points, whichever is greater.

In addition, employers cannot decrease the percentage of the premium they paid as of March 23 by more than five percentage points and retain their exempt status. Except for plans set by collective bargaining agreements, switching from one insurer to another would result in a plan losing its grandfathered status, though changing plan administrators would not.

The rules also state that retiree-only health care plans are automatically exempt from health care reform requirements.

In addition, the three federal agencies are asking for public comment on whether a plan should lose grandfathered status if the sponsor moves from purchasing coverage to self-insuring health risks.   

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

 

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U.S. corporate defined-benefit and defined-contribution plans had combined assets of $5.727 trillion as of March 31, up 4.7 percent from three months earlier, according to the Federal Reserve’s Flow of Funds report issued Thursday, June 10.

Corporate DB plan assets totaled $2.17 trillion as of March 31, up 3.1 percent from the previous quarter. Total assets in corporate DC plans were $3.557 trillion, up 5.7 percent.

Total assets in state and local government retirement funds as of March 31 were $2.794 trillion, up 4 percent, while assets in the federal government’s retirement funds totaled $1.318 trillion, down 0.5 percent.

The value of equities in corporate DB plans was $819 billion as of March 31, up 1.7 percent, while the value of bonds in those plans totaled $343 billion, up 3 percent.

In corporate DC plans, the value of equities was $1.099 trillion, up 6.6 percent, while the value of bonds was $109 billion, down 0.55 percent.

Corporate DB plans saw outflows of $48.4 billion for the quarter, while corporate DC plans had inflows of $29.5 billion.

Craig Copeland, senior research associate for the Employee Benefit Research Institute, said it was unclear why the federal government’s retirement plan assets were down overall because all asset categories except miscellaneous assets were either even or up for the quarter.

Copeland said the slight drop in corporate DC bonds could be attributed to “the movement of money, with people going for the higher stock market returns that occurred at the end of 2009.”

“The overall asset increase was consistent with the market returns in both the equities and bond markets during the quarter,” Copeland added. 

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

 

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Many companies do not intend to comply early with a provision in the new health care reform law that will require group health care plans to extend coverage to employees’ young adult children up to age 26, according to a survey released Tuesday, June 8.

Among the 501 large employers responding to a Hewitt Associates Inc. survey, 77 percent said they will wait until the effective date before offering the coverage. Ten percent of respondents said they will extend coverage early to all eligible adult children, 9 percent said they will continue coverage for graduating students already covered in their plans, and 4 percent were undecided.

The law requires the extension to be made on the first day of the plan year starting after September 23, 2010. For calendar-year plans, which are the most common, the effective date of the provision would be January 1.

There are several reasons why most employers are not expanding coverage before they are required to do so.

“The cost and administrative complexities of early adoption are key factors, but it’s really about their view of access,” Ken Sperling, Hewitt’s global health care leader in Norwalk, Connecticut, said in a statement.

“Many employers believe most adult children are healthy and can find affordable coverage in the individual market. They view COBRA as another option, particularly for those adult children with pre-existing health conditions. So, for many employers, they don’t see a coverage gap they feel compelled to immediately close,” Sperling said.

Cost increases for the expanded coverage will be modest. Among employers that have estimated how much their plan costs will increase annually by extending coverage to the adult children, 18 percent expect costs to rise by less than 1 percent, 11 percent expect costs to increase by between 1 and 2 percent, and 11 percent project costs to rise by between 2 and 5 percent.

Interim final regulations published by the Internal Revenue Service and the departments of Labor and Health and Human Services estimate that the expansion of coverage would increase premiums by an average of 0.7 percent in 2011.

So far, just one major self-funded employer—United Technologies Corp. in Hartford, Connecticut—has announced that it will comply early. Effective immediately, the company will continue coverage of employees’ adult children enrolled in its plan who would have lost coverage for reasons that include graduation from school.

Then on July 1, coverage will be offered to employees’ adult children up to age 26 regardless of whether they now are covered, unless they are eligible to enroll in another employer’s health care plan.

United Technologies, which had stopped coverage of employees’ children at age 19 or 23 if the child was a full-time college student, had until January 1, 2011, to comply. A top company executive said United Technologies was complying sooner than required because it was the right thing to do and because such action was consistent with its practice of providing competitive benefits.

This week, several major employers are expected to announce early adoption of the young adult expansion provision, a source said. 

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

 

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Health care as economic development holds promise for Southeast Michigan and the state, said panelists at a session at the Detroit Regional Chamber’s Mackinac Policy Conference.

But here’s the rub: While health care is well-recognized as one of the state’s leading job providers and a bright spot of growth amid Michigan’s economic downturn, what doesn’t get as much attention is the potential for health care investment to be a remedy for economic turnaround.

And it should, said health care officials during the event Thursday, June 3.

Some ideas:

• Have state pension funds invest in Michigan companies.

• Lure back talent that has left Michigan for out-of-state careers.

• Form a research triangle that stretches from Detroit to Houghton to Kalamazoo and encompasses many universities.

• Engage business leaders around health care.

Nancy Schlichting, president and CEO of Henry Ford Health System, who came to Michigan 12 years ago after working in leading markets around the country, said that “everywhere I’ve been, except for Michigan, it was recognized in those markets that health care was truly an asset.”

In Michigan, she said, health care was looked at as a cost, a liability, and health care leaders weren’t viewed as business leaders.

She said a city’s educational and medical institutions, a combination called “eds and meds,” can anchor a community and provide stability.

Health care systems contribute jobs, help fuel the economy, hire highly educated and high-salary employees, and are major educators, Schlichting said.

For example, Henry Ford has gone from about 12,000 employees a decade ago to 23,000, is the 16th largest teaching hospital in the U.S. and has trained a third of the doctors in the state, and the “value of research and innovation I think cannot be underestimated,” she said.

“We are very excited about the opportunities that lie ahead. We think health care is inherent in that,” Schlichting said.

But she also said she hopes to see “more support from the business community, in recognizing the value that we bring.”

Mike Duggan, president and CEO of the Detroit Medical Center, said that while the business community is concerned about its health care costs, it hasn’t engaged providers like DMC and Henry Ford that “know more about holding down the cost of health care than anybody.

“We actually get the concept of keeping people well, keeping people out of the emergency rooms. But it doesn’t occur to anybody to knock on the door” and say they need help in containing their health care costs, although that may be starting to change, Duggan said.

Entrepreneur Jeffrey Williams, who has been the chief executive of several startup companies and is currently president and CEO of Ann Arbor-based Accuri Cytometers Inc., said that “there’s a very strong network of resources and assets in Michigan around health care.

“I believe that Michigan has most of what it needs to really create a very vibrant life science community, where you can get these young companies started and growing” to help diversify the economy, he said. Accuri makes desktop devices that automate cell analysis for researchers.

But Williams said three ingredients are important for the state to have: ideas, capital and talent.

In the first area, “there is no lack of ideas in Michigan,” he said.

But he also said companies are not cheap to start, and Michigan needs more capital. One idea might be an equity matching program, in which the state matches equity funds raised by a company, Williams said.

He said the “real big issue in Michigan is talent.”

Williams said Michigan should do more to recruit people who have left the state to find jobs and gain experience, bring them back here, “convert them to young companies,” and help build an industry in Michigan.

Chuck Perricone, former speaker of Michigan’s House of Representatives and now CEO of The Perricone Group, spoke on Southwest Michigan’s efforts to build an economy in both technology and life sciences.

He said the Kalamazoo region has hospitals that have distinguished themselves nationally, corporate success stories, three accelerators focusing on life sciences, and aggressive efforts under way to raise private and government capital for area growth.   

Filed by Amy Lane of Crain’s Detroit Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

 

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