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Posted on January 1, 1999July 10, 2018

Health Benefits Survey This! (and That)

If you believe the reports that health care costs will double from $1 trillion in 1996 to $2.1 trillion in 2007, you’ve doubtless come to the conclusion that no company can afford to be spendthrift with its health benefits program. In today’s rapidly changing managed-care industry, it’s not paranoid or hysterical to want a head-to-head with your benefits carrier, but it may not teach you a tenth as much as a scientifically valid employee assessment survey.


“It’s imperative that a good quality assessment program be in place to help employers gauge employee satisfaction and to refine the company’s managed-care strategies,” says Elliot M. Stone, executive director and CEO of the Massachusetts Health Data Consortium (HDC), a nonprofit corporation that collects and analyzes health care information. “And given how much time and energy surveys can take, it’s equally as imperative that employers learn how to adjust their programs based on the results.”


Stone co-authored an employee health benefits survey and users’ manual for the Brookfield, Wisconsin-based International Foundation of Employee Benefit Plans, a nonprofit educational association serving the employee benefits industry. According to the manual’s introduction, assessment surveys can provide rich information for employers in the following ways:


  • Characterize the health status of employees as well as their dependents.
  • Determine whether there’s a need for change in one or more health plan options.
  • Specify the direction in which those changes should occur.
  • Renegotiate managed-care relationships by explaining current health care needs.
  • Identify employee behavior problems that can cost the company more money.

Right away, you can see a number of things that sound potentially great for human resources professionals about employee assessment surveys. And to many employees, it may be seen as a commitment on your part to maintaining a high-quality health benefits program.


But the information is only as “powerful as the questions you ask,” says Ron Deprez, president of Public Health Resources Group (PHRG), an independent health care consulting firm based in Portland, Maine. “Let’s say a large percentage of your employees have asthma. Unless you know this, you might not be inclined to pay someone to educate them on how to treat their allergies. The cost of preventative measures can be far less than the cost of hospital care. And the only way to answer these questions is with an employee assessment survey.”


Design your survey with employees in mind.
The Chevron Corp. in San Francisco, California, conducted a national survey in July 1998 of roughly 10,000 of its employees and retirees with self-insured medical plans. “It’s one thing to evaluate the finances of a company’s health benefits program, what it covers and so on, but employers also should consider what their employees have to say,” says Tanya Bednarski, manager of health and welfare plans for Chevron Corp. “Surveys give you a lot more than just anecdotal feedback.”


Chevron used an outside third-party vendor to conduct its survey. “We structured it so that the same questions were asked for each and every health benefits plan we offer,” says Bednarski. “That’s helpful to us because now we can standardize the results.”


Unless you’ve had experience designing surveys and interpreting the results, you’re better off leaning on an independent third party to do the legwork. It helps to be prepared by focusing on the type of information your company will need and use.


Assessment surveys should be designed in such a way that you can mine the employee health data for trends. For openers, you want specific information about employees’ health status and their preference for services, and how they use those services. Do healthy employees use the plan? Who are the heavy users? Are there any smokers? Does age or gender make a difference? What are their coverage priorities? Some employees may want coverage for chiropractic care, while others may want coverage for other alternative therapies. Most managed-care administrators encourage several open-ended questions regarding benefits.


Some employees may fear the health data information will somehow be used against them. “That’s why you should never ignore employees’ privacy,” says Kimberly Wedell, principal with the Milwaukee, Wisconsin-based ROC Group, a human resources consulting firm. “Confidentiality is a must when conducting an assessment survey.”


To that end, it’s best to administer the survey in-house or by mail. Encourage employees to participate by posting a preliminary announcement indicating when and where the survey will be held. Make arrangements for absent or otherwise unavailable employees. Survey results should always be posted to remind employees they were involved.


Above all else, emphasize that it’s not just about saving the company nickels and dimes, but also about employees’ satisfaction with their own health plans.


Naturally, the value of any employee survey depends mainly on its validity and reliability, says HDC’s executive director Stone. Through interviews with human resources managers and extensive literature review, the employee health benefits survey he designed yielded sample questions that pinpointed key employee health status problems and health care needs. These questions were then pretested and modified to ensure that the language was neutral and unlikely to stir up expectations for change. Terminology that could have biased the results was deleted. “You want to compare the results over time and to the results from other employee assessment surveys,” explains Stone. “This type of rigorous surveying methodology ensures a high response rate and produces precise and unbiased results.”


Adjust your program based on the results.
You should realize that conducting an employee health benefits survey is a huge waste of time, money and effort unless you use the data to customize your company’s health benefits program. Gina Alongi is administrator for the Lexington, Massachusetts-based International Union of Operating Engineers (Local 4), a construction union of 2,900 heavy-equipment operators. Two years ago, members were surveyed about their views on the current self-administered health benefits plan. As a result, says Alongi, “several options were added to the existing program,” including coverage for hearing aids.


To revise and enhance your health benefits program, though, you must be willing to adjust to the results, says PHRG’s Deprez, who conducted the survey for the heavy-equipment operators. “You should also use the data to educate employees on better health practices,” he emphasizes. “Depending on your workforce, you may have to educate them about cardiovascular disease instead of diabetes, mental health instead of asthma. This sort of attention gives you a healthier workforce, and who doesn’t want that?”


Assessment surveys should also yield plenty of ammunition to renegotiate coverage with service providers. Let’s say a number of employees last year had problems processing their claims. The information can be used to remind your plan administrators about meeting their obligations. If nothing else, it puts you in a better position to negotiate coverage in the future. Based on the results of an assessment survey two years ago, Chevron actually dumped one of its significant health benefits vendors. “We tried working with the vendor, but on the second go-around, our employees were still dissatisfied,” says Bednarski.


If your company uses an HMO, you may not have to worry about surveys. The Washington D.C.-based National Committee for Quality Assurance requires that all HMOs that earn accreditation administer an annual members’ satisfaction survey. Otherwise, PHRG’s Deprez recommends companies evaluate their health plan effectiveness and performance with some kind of employee assessment survey. “If nothing else, you can make sure you’re providing a good health benefits plan to your employees at the lowest possible cost.”


Workforce, January 1999, Vol. 78, No. 1, pp. 93-94.


Posted on December 31, 1998July 10, 2018

Overtime and Two or More Employees

Executives are exempt from the federal overtime requirements if, among other things, they “customarily and regularly direct the work of two or more other employees.” The U.S. Department of Labor explains what this means:


(a) An employee will qualify as an “executive” under 541.1 only if he customarily and regularly supervises at least two full-time employees or the equivalent. For example, if the “executive” supervises one full-time and two part-time employees of whom one works morning and one, afternoons; or four part-time employees, two of whom work mornings and two afternoons, this requirement would be met.


(b) The employees supervised must be employed in the department which the “executive” is managing.


(c) It has been the experience of the divisions that a supervisor of a few as two employees usually performs nonexempt work in excess of the general 20-percent tolerance provided in 541.1.


(d) In a large machine shop there may be a machine-shop supervisor and two assistant machine-shop supervisors. Assuming that they meet all the other qualifications 541.1 and particularly that they are not working foremen, they should certainly qualify for the exemption. A small department in a plant or in an office is usually supervised by one person. Any attempt to classify one of the other workers in the department as an executive merely by giving him an honorific title such as assistant supervisor will almost inevitably fail as there will not be sufficient true supervisory or other managerial work to keep two persons occupied. On the other hand, it is incorrect to assume that in a large department, such as a large shoe department in a retail store which has separate sections for men’s, women’s, and children’s shoes, for example, the supervision cannot be distributed among two or three employees, conceivably among more. In such instances, assuming that the other tests are met, especially the one concerning the performance of nonexempt work, each such employee “customarily and regularly directs the work of two or more other employees therein.”


(e) An employee who merely assists the manager or buyer of a particular department and supervises two or more employees only in the actual manager’s or buyer’s absence, however, does not meet this requirement. For example, where a single unsegregated department, such as a women’s sportswear department or a men’s shirt department in a retail store, is managed by a buyer, with the assistance of one or more assistant buyers, only one employee, the buyer, can be considered an executive, even though the assistant buyers at times exercise some managerial and supervisory responsibilities. A shared responsibility for the supervision of the same two or more employees in the same department does not satisfy the requirement that the employee “customarily and regularly directs the work of two or more employees therein.”


Source: U.S. Department of Labor, Washington, D.C., December 18, 1998.

Posted on December 29, 1998July 10, 2018

OSHA’s Amended Regulations on Trucks and Confined Spaces

OSHA has amended their regulations on powered industrial trucks and permit-required confined spaces. Here’s a summary:


Truck Training
The Occupational Safety and Health Administration (OSHA) has issued new requirements for powered industrial truck operator training (29 CFR 1910.178(l)). The new requirements are intended to reduce the number of injuries and deaths that occur as a result of inadequate operator training. They apply to all industries (general industry, construction, shipyards, marine terminals, and longshoring operations) in which the trucks are being used, except agricultural operations.


The new provisions mandate a training program that bases the amount and type of training required on:


  • the operator’s prior knowledge and skill;
  • the types of powered industrial trucks the operator will operate in the workplace;
  • the hazards present in the workplace
  • the operator’s demonstrated ability to operate a powered industrial truck safely.

Refresher training is required if:


  • the operator is involved in an accident or a near-miss incident;
  • the operator has been observed operating the vehicle in an unsafe manner;
  • the operator has been determined during an evaluation to need additional training;
  • there are changes in the workplace that could affect safe operation of the truck;
  • operator is assigned to operate a different type of truck.

Evaluations of each operator’s performance are required as part of the initial and refresher training, and at least once every three years.


OSHA estimates that this rule will prevent 11 deaths and 9,422 injuries per year and that the annualized cost of this rule is approximately $16.9 million for all affected industries.


Effective Date:
The effective date is March 1, 1999 for the revised powered industrial truck regulation.


Compliance Dates:
The dates by which powered industrial truck operators must be trained are as follows:


  • For employees hired before December 1, 1999, the initial training and evaluation of that employee must be completed by December 1, 1999.
  • For employees hired after December 1, 1999, the initial training and evaluation of that employee must be completed before the employee is assigned to operate a powered industrial truck.

Permit-Required Confined-Spaces


The amendments revise paragraphs (c), (d), and (e) addressing the development and implementation of permit space entry programs as well as (k) which covers employer responsibilities for rescue services. A new paragraph (l) on employee participation is being added as well as a new non-mandatory Appendix F which will help employers in selecting properly trained and equipped rescuers.


The standard will give employees more say in determining whether confined work spaces need permits. Employees will also be able to observe their employers’ monitoring and testing of spaces that may need permits. OSHA has also clarified employers’ responsibilities in rescue situations, and given them more flexibility when deciding where to attach safety retrieval lines.


Effective Date:
The confined spaces rule is effective February 1, 1999.


Source: Business and Legal Reports, Madison, CT, December 4, 1998.

Posted on December 28, 1998July 10, 2018

Year-End Payroll and Tax Checklist

Here is a checklist for payroll and payroll tax administrators to use as you approach the year-end and tax season.


Reviewed holiday schedule for Thanksgiving, Christmas, New Years, Martin Luther King, and Washington/Lincoln’s Day. Enter holiday hours where applicable.


Notified employees to review W-4 status, to file a new W-5 for employees receiving advanced earned income credit, and to file a new W-4 for employees claiming exempt or claiming over 10 exemptions


Verified questionable social security numbers


Removed any non-standard 401K limits


Reviewed PTO plan rolls


Reviewed deduction/supplemental pay limits and periods


Identified last payroll(s) of the current year and first payroll(s) of the new year.


Verified earnings and deductions tax flags.


Contacted Accounts Payable requesting information regarding payments such as:


  • Taxable and non-taxable moving expenses
  • Personal use of company-provided automobiles
  • Non-accountable business expenses
  • Non-Cash Fringe Benefits
  • Awards
  • Taxable Educational Assistance
  • Petty Cash Payments
  • Adoption Assistance

Developed a schedule with Accounts Payable to receive data


Reviewed Negative Wage Report


Scheduled year-end payroll adjustment runs for recording reportable compensation. Schedule should consider tax requirements


Determined method of W-2 distribution (e.g., distribute internally for active employees and mail the remaining forms) and notified mailroom, if appropriate.


Informed mailroom where to distribute undeliverable or returned Forms W-2, (e.g., payroll, human resources, etc.)


Scheduled any quarterly or unique year-end reports.


Verified legal name and address which will print on the W-2s


Determined W-2 sort for employee and employer copies


Identified earnings or deductions codes that should be suppressed from printing on the W-2 or summarized


Determined logic for W-2 pension and deferred compensation boxes


Contact plan administrator if clarification is necessary.


Verified tax ID numbers. Follow-up on any “applied for” numbers


Reset 1999 Benefit Limits and special accumulators.


Source: ProBusiness, Palo Alto, CA, December 4, 1998. ProBusiness provides outsourced payroll processing, payroll tax and benefits administration services, as well as human resources software, to large employers within diverse industries.

Posted on December 23, 1998July 10, 2018

Travel and Meal Times May Be Compensable

Two recent decisions demonstrate that time spent by an employee primarily for an employer’s benefit must be compensated.


In the first case, five foremen of the Rich Kramer Construction Co. used company vehicles to transport workers, equipment and supplies to various work sites each day from a central shop. They were also required to load equipment and review blueprints at the shop. The company classified the foremen as commuters and did not pay them for their time in the shop or travel time. The foremen sued, alleging violations of the Fair Labor Standards Act (FLSA).


The district court and the court of appeals held that the activities were performed for the employer’s benefit. Each foreman was awarded $33,700 in back pay. Herman vs. Rich Kramer Construction Inc., 8th Cir., No. 97-4308WMS, 9/21/98.


In a similar case, 16 maintenance workers of IBP, a beef processing plant, sued IBP for violations of the FLSA. They alleged that the company’s practice of not paying them for their 30-minute meal periods, despite frequent interruptions for problems requiring immediate attention, was a violation of the FLSA.


The district court and the court of appeals held that because the maintenance workers couldn’t use meal periods for personal business and were frequently required to work during them, the meal periods must be paid. They were awarded back wages, overtime and liquidated damages. Bernard vs. IBP Inc. of Nebraska, 5th Cir., No. 97-1-955, 9/21/98.


Impact:
Employers must compensate employees for all time spent primarily for the employer’s benefit.


Source: D. Diane Hatch, Ph.D., a human resources consultant based in San Francisco, and James E. Hall, an attorney with Barlow, Kobata & Denis, based in Los Angeles and Chicago, December 18, 1998.

Posted on December 22, 1998July 10, 2018

Unforeseen Circumstance Precludes WARN Notice

The Worker Adjustment and Retraining Notification Act (WARN) requires 60 days’ notice of a mass layoff or plant closing. An exception applies if an unforeseen business circumstance arises that precludes notice.


John Halkias worked on a U.S. Navy contract that General Dynamics realized as early as May 1990 would require an extra $700 million. On December 17, 1990, the Navy informed General Dynamics the contract might be terminated January 7, 1991. The company issued layoff notices on December 21, 1990, and Halkias was laid off on January 7, 1991. Halkias sued, alleging a lack of WARN notice.


The district court granted summary judgment to General Dynamics. The court of appeals affirmed and the U.S. Supreme Court denied review. Cancellation was not foreseeable because the Navy supported the program until December. To require notice, possibility of a layoff isn’t enough. Prior to December, the cancellation was possible, not probable, so the notice requirement didn’t apply. Halkias vs. General Dynamics, 137 F.3d 333 (5th Cir. 1998), cert. denied, U.S. Sup. Ct. 10/5/98.


Impact:
Employers can invoke the WARN exception when a circumstance is a possibility, but not a probability.


Source: D. Diane Hatch, Ph.D., a human resources consultant based in San Francisco, and James E. Hall, an attorney with Barlow, Kobata & Denis, based in Los Angeles and Chicago, December 18, 1998.

Posted on December 21, 1998July 10, 2018

ADA May Allow Room for Height and Weight Rules

Recently, a municipal employer instituted height and weight guidelines for its firefighters and other public safety employees. When an employee came in overweight, he was fired. The employee sued, saying that he was disabled and the employer violated the ADA by firing him.


The appeals court (Francis v. City of Meriden, CA 2, No. 1663, 96-9610) did not rule in the employee’s favor. It said that the employer’s guidelines were non-discriminatory.


Setting guidelines related to height, weight, language, and physical ability aren’t necessarily prohibited under all circumstances. However, they must be related to the requirements of the designated position.


Source: You and the Law, National Institute of Business Management, 1750 Old Meadow Rd, Suite 302, McLean, VA 22102, November 1998. 800/543-2055. Cost: $187/year.

Posted on December 18, 1998July 10, 2018

Does Equal Pay Refer to Same Work or Comparable Work

Recently, a woman who worked at a department store alleged that she wasn’t paid the same as two male counterparts at her company. The males were assistant product managers. She was not, but had some of the same responsibilities.


An appeals court ( Sprague v. Thorn Americas Inc., CA 10, No. 96-3021) ruled that the woman’s responsibilities were “comparable” to the mens’, but that they were not “substantially equal.”


The court in this case said that “comparable” work is much different than the “same” work with respect to equal pay.


Generally, an employer should base their pay on skill level required, effort, responsibility, and working conditions. Gender cannot be a factor.


Source: You and the Law, National Institute of Business Management, 1750 Old Meadow Rd, Suite 302, McLean, VA 22102, November 1998. 800/543-2055. Cost: $187/year.

Posted on December 17, 1998July 10, 2018

For New Businesses—Getting a Tax I.D. Number

How do you apply for an Employer Identification Number (EIN)?


Ask the IRS for Form SS-4. Form SS-4 is available by calling the IRS at (800) 829-1040 or through their Web site, http://www.irs.ustreas.gov.


After you’ve completed that form, you can get the EIN by mail, fax or phone. The instructions with your SS-4 provide you the proper phone numbers.


You may also want to ask the IRS for Publication 1635, Understanding Your EIN.


Source: Internal Revenue Service, November 25, 1998.

Posted on December 15, 1998July 10, 2018

How Do You Figure the Amount of Deposit Required for FUTA

How do you figure the amount of deposit required for Form 940/940EZ, Employer’s Annual Federal Unemployment Tax Return (FUTA)? Here’s an explanation from the IRS:


“First figure the amount of wages you paid during the quarter that are subject to federal unemployment tax. Only the first $7,000 paid to each employee during each calendar year is subject to the tax. Next, multiply the taxable wages you have just figured by eight tenths of one percent (.8%). If $100 or less, you do not have to make a deposit. Add this amount to the tax you figure for wages subject to unemployment tax at the end of the next quarter. If more than $100, a deposit is due. For more specific information, refer to Tax Topic 759, Form 940/940EZ—Deposit Requirements (available by calling the IRS at 800/829-1040 or through the IRS Web site at http://www.irs.ustreas.gov.


Note: The FUTA tax rate isn’t always .8%. The FUTA tax rate is 6.2% (see next FAQ) Generally, an employer can take a credit against FUTA tax for amounts paid into state unemployment funds. This credit cannot be more than 5.4% (resulting in a net .8% rate). Most employers who make timely unemployment tax payments to the state are entitled to the .8%.”


Source: Internal Revenue Service, November 25, 1998.

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