The problem of presenteeism – workers showing up at work but taking a “mental vacation day” – isn’t going away any time soon. A recent survey found the typical worker has three unused vacation days at the end of the year. But 33% admit that they sometimes take “unofficial” vacation days of a half-day or more. Not surprisingly, the day after Thanksgiving, Christmas Eve day and December 26 rank one of the highest “presentee” days among corporations (specifically in the white-collar realm) that remain open on those days. In terms of the broader question of presenteeism, what’s keeping people from using their vacation time as it’s intended? Top answers – there’s too much work to make up after using vacation time, and individuals want to “reserve” time in case of an emergency. On the flip side, many folks who take vacation time have trouble leaving work behind.
One employee in four admits to checking work e-mail and/or voicemail while on vacation. And 29 percent say they have trouble forgetting about work-related stress, even when they’re using compensated time off. Among all industrialized nations, United States workers receive the fewest annually vacation days – 14 on average. It’s tough to get staff members to participate in benefit programs that they don’t even know exist. Seventy-one percent of staff members lack basic knowledge of standard benefit programs, as reported by a new study by the American Payroll Association (APA). The ASA study focused on workers knowledge of their company’s pre-tax benefits. While almost three quarters of workers say they live paycheck to paycheck, and would like to stretch their current salaries – 52% don’t participate in available flex spending accounts (and 6% of had never even heard of an FSA) 17 percent didn’t know their company offered a health savings account or health reimbursement arrangement (46 percent of those aware of the benefit still don’t participate), and 18% are unaware of existing transportation benefits or subsidies their corporation offers.
Compliance with health insurance portability and accountability act (HIPAA) non-discrimination rules is a large challenge for wellness programs. the old rules were unclear about which incentives passed muster. That’s all changed, with the rules established earlier this year by the DOL and U.S. Treasury Department. the rules themselves haven’t changed, but they’ve been clarified. Here’s what you need to know – As long as you structure incentives as rewards for wellness participation, the new rules provide a lot of freedom. All of these are fine under HIPAA – reimbursing all or a portion of the cost of health club membership financial rewards for undergoing health risk (assessment|appraisal}s so long as the reward is based on participation rather than test results encouraging preventive care by waiving co-pays or deductibles for these services (i. e.
, well-baby visits or prenatal care) reimbursing staff members for the cost of tobacco use-cessation programs without regard to the result, and offering rewards tied to employees attending a monthly health education seminar or working with a health coach. But what when you want to make the reward conditional on participants meeting specific health goals? Example – Staff Members who achieve a cholesterol count under 200 get a 20% reduction in the cost of their medical plan contributions pending results of an annual cholesterol test. The feds say it’s OK under health insurance portability and accountability act (HIPAA) to do this, too, but your plan must meet five additional requirements – the reward can’t exceed 20% of the cost of employee-only (or, if you allow dependents to participate, employee-plus-dependent) coverage under your health plan. the standards ought to be reasonable (e. g. , you can’t limit rewards to folks who can run a marathon).
the rewards also can’t be used as a backhanded way to adversely single out certain employees (e. g. , rewards for all non-diabetics). Participants must’ve the opportunity to qualify for the reward at least once per year (e. g. , a smoker who fails to quit this year gets another chance next year). Rewards ought to be available to all “similarly situated individuals.
” In other words, you can’t make a company-compensated weight management program available to certain employees but not others. If, for medical reasons, it’s unreasonably challenging for a personal to satisfy conditions that are otherwise reasonable, you must offer an alternative. Example – A pregnant employee might not be able to meet certain standards, so you must offer her an alternative. So what’s not permitted under health insurance portability and accountability act (HIPAA)’s non-discrimination rules? Anything that punishes individuals for their health conditions or health risks. The rules prohibit corporations from charging different premiums, contributions, co-pays or deductibles based on personal health factors like obesity or smoking. Nevertheless, it’s OK to reimburse these expenses based on someone’s participation in your wellness program, without regard to success.
In addition, the feds have added an important new non-discrimination rule – Corporations’ health plans can’t deny benefits for treatment of injuries resulting from a health condition, even when the condition wasn’t diagnosed before the injury. For instance, some health plans have a “suicide exclusion” that denies payment for treating self-inflicted wounds from a suicide try. Now let’s suppose the employee suffers from clinical depression. Even when the depression was undiagnosed prior to the suicide try, it’s illegal for your plan to deny benefits to this employee. Ever set out to organize and dispose of old employee files and paperwork in the office? the job is tougher than it seems. Best practice – Create a records retention policy as your first step.
A host of federal and state laws specify how long you must retain pay- and benefits-related documents. Compliance is essential if a current or former staff member sues or the DOL, IRS or the state audits your records. Retain for two years staff member personnel files, including performance reviews and training. Hold these for three years – wage records, including time cards, base pay and overtime wage-rate calculations and records explaining wage diferentials for workers performing the same job, and hold I-9 forms for three years from hire date or one year after termination, whichever is later. Keep these four years – all Payroll documents, including – home address records, and all wage records, including weekly OT earnings, straight time pay, deductions, bonuses, pay period designations and payment dates. Use a five-year retention window for worker health info such as medical and first-aid records from on-the-job injuries, and drug and alcohol testing records. Keep this benefits data for six years (or one year after plan termination) – elections and enrollment forms, benefit change documents, and COBRA notices.
A lot of companys attempt to reward employees during the holidays. But be careful – There’s a common misbelief that the IRS considers gift cards worth $20 or less de minimus benefits and, consequently, they’re tax free. Regretfully, that’s not true. With few exceptions, the IRS considers almost anything with cash value a taxable form of compensation. Practically speaking, the IRS is unlikely to go after your firm or an staff member over several small-value gift cards for which you withheld no taxes. But they could, namely when your firm regularly hands out gift cards. At some firms, those $5 to $20 cards can add up to several thousand dollars worth of unpaid taxes in several years.
Each $15 gift card would usually require about $5. 55 withheld. To be safe, you can use gift cards sparingly and pay the tax for the recipient. Or else you can educate folks proactively that Uncle Sam requires you to take out for taxes. Gift cards can be money-wasters or or morale-killers if employees have a bad experience attempting to redeem them. Read the fine-print before you buy. Three common pitfalls to watch – expiration dates.
Some retailers offer cards that last forever. But many have expiration dates, rendering the cards worthless after a period of time dormancy fees. A $50 card can end up worth only $40 at stores that deduct “dormancy fees” after a certain period of time, and redemption fees. Some stores charge a fee for redeeming cards that can be used in multiple locations. The good news – There are some good deals out there. Employer use of gift cards has doubled since 2001, and related sales bring in $20 billion a year to retailers. With such fierce competition, it pays to shop around.
In recent years, it’s become increasingly common for corporations with as few as 200 workers to explore self-insurance. But beware of hidden traps. If your organization is weighing self-insurance – or has already taken it – here are three pitfalls that can create unexpected costs. It’s impossible to completely eliminate the risk of unexpected, high-dollar health claims. But here’s a guideline to lower your risk. Health claim stats suggest the “ideal” worker population for a self-insured plan is predominately young, non-use of tobacco and male. Be aware that stop-loss insurance carriers often “laser” those workers considered higher risk.
Lasering means that your business would have to pay out much more in claims for these workers before the stop-loss coverage kicks in. Some firms learned after the fact that going the self-insurance route caused them to lose providers’ network discounts they previously received under fully insured plans. When investigating plan vendors’ administration-only choices, ask – Will the vendor’s network alliances work in your best interests, cost-wise? Will the vendor only oversee claim payments or negotiate to build the best provider network, quality-wise, for your employees. Bottom line – You should get the same types of plan designs, networks and discounts as a fully insured plan. When the language of your reinsurance contract doesn’t match your health plan’s summary plan description, you might be paying for coverage you don’t need and can never use. It’s also key to make certain your firm has enough money in reserve to cover run-out claims and other costs that may occur before reinsurance will cover payments.
Best practice – annual audits of your financial reserves. Evidence-based medicine has become a large buzzword in healthcare over the last few years. But certain non-traditional treatments, like chiropractic care, may also prove effective in certain cases. The key – Using these treatments and to – not in lieu of – conventional medicine may prove more cost-efficient in the long term. What the latest research says Do these five common complimentary treatments belong on your health plan? Here’s what recent research suggests – 1) Chiropractic care. Studies suggest these treatments may help cut absenteeism for workers with uncomplicated lower back pain, namely for people who’ve had it for less than a month.
2) Acupuncture. Studies show acupuncture can help relieve osteoarthritis, chronic migraines, post-operative pain, low-back pain, fibromyalgia and carpal tunnel syndrome. There’s less evidence about its effectiveness as a tandem treatment for other conditions. 3) Acupressure. There’s no meaningful research to show this needle-free variation of acupuncture (a therapist applies pressure to specific points on the body) has the same medical benefits. 4) Biofeedback. According to the Mayo Clinic, there’s now some research to suggest this treatment can help with some kinds of chronic pain, namely tension headaches and muscle pain.
How it works – Monitors display a patient’s heart rate, breathing patterns, body temperature and muscle activity. A therapist then teaches the patient how to lower these readings via relaxation. 5) Aromatherapy. as yet, there’s no evidence of direct medical benefits. While it can be a relaxing treatment to reduce stress, few firms – if any – foot the bill on employees’ behalf. When an staff member ignores directions from a physician, who’s responsible if the staff member causes a serious accident on the job? In some cases, it’s your firm that ends up on the hook – both for workers’ comp and for other individuals ’s injuries caused by misuse of a prescription drug.
Situations like these raise three questions that even HR/benefits pros have trouble answering. How are you – or supervisors – supposed to know what meds people are on and whether they’re taking them as directed by their doctors? In most cases, you won’t. Are you able to find out without violating HIPAA or other laws? You can’t, unless the worker volunteers the info or a doctor notes the effects of medication being the reason for the accident. So if you won’t know and can’t find out, how on earth can your firm be held responsible after the fact? It all depends on the circumstances.
Three key danger signs – A supervisor already has knowledge of an employee’s health condition, if not the meds themselves. Example – the worker requested a schedule change and said it was due to a particular health problem the individuals has a history of erratic behavior that management suspects is medication-related, and/or A Florida case (Johnson v. Rentway) is a classic example of the two of the three large danger signs. 1. the supervisor knew an staff member had insulin-dependent diabetes. 2. the employee was under physician’s orders to take insulin at specific times, which required the corporation to adjust the employee’s schedule.
But due to short staffing, the staff member was often forced to work shifts that overlapped with times he was supposed to take injections. What’s more, the employee worked a potentially perilous job (he was a professional truck driver). Finally, the inevitable happpened. the worker suffered a diabetic blackout at the wheel, causing a serious crash that injured himself and another driver. The employee filed for workers’ comp, and the injured driver sued the business. the firm fought – and lost- both cases. Total cost – $5 million.
Having even one problem drinker on your health plan – including a covered family member with abuse issues – can cost your company big. Some estimates place the potential cost as high as $35,000 a year per case. What’ your company’s risk? A lot of wellness programs are geared toward managing employees’ health risks associated with illnesses like diabetes or asthma. But unless the wellness program is integrated with an employee assistance program (EAP), chances are alcohol abuse-related risks go undetected. Here are two strategies that’re getting good results. When you already sponsor confidential staff member health-risk assessments, it’s easy to screen for alcohol risks, too.
This could be as simple as making sure three questions are added to the current appraisal – How often do you have a drink containing alcohol? How many alcoholic drinks do you’ve on a typical day? And How often in the last month have you had six or more drinks? For male staff members, more than 14 drinks per week, or one or more episodes of heavy drinking suggests a possible problem. for women, more than seven drinks in a week, or one or more episodes of drinking four or more drinks, is a red flag. Alternative – If you don’t offer appraisals, you are able to refer workers to a free, confidential internet based screening. Many professionals say drug-free workplace policies and employee assistance programs (EAPs) are the two most proven solutions within companies’ grasp for minimizing the risks and costs of alcohol abuse by medical plan enrollees.
To see if sponsoring an employee assistance program (EAP) makes financial sense, you can calculate your own firm’s current cost risk for free here. Plug in your corporation kind, locale and number of employees. You’ll get a customized estimate of annually direct (absenteeism, disability, ER visits) and indirect (presenteeism, turnover) costs from alcohol misuse by a covered worker or family member. To design a drug-free workplace policy – or check when your existing one is up to par and compliant with the law – more guidance is available here. It’s easy to feel like your PBM holds all the power over you. In most cases, it does. A landmark 2004 study compared what drug store benefits managers (PBMs) charge businesss’ plans to what they actually pay pharmacies.
Scientists found staggering overcharges – namely for generic drugs. Unfortunately, four years later, the situation has scarcely changed. All too often, PBMs improve their own bottom line at the expense of the plan sponsor’s. Chances are, it’s your health insurance provider – not yourself – who contracts with the PBM to administer the prescription drug portion of your health benefits. So how can you feel confident your firm is getting the best value and service? Begin by asking your health-plan broker these four questions about the current or prospective PBM. 1.
How does the PBM calculate price? Many PBMs gain hidden profits off your plan through a practice called “differential pricing,” says advisor Gerry Purcell. In other words, the PBM pays one price to drug retailers and then sets a lesser discount off the average wholesale price (AWP) for your company’s plan. Example – the PBM compensates the drugstore the AWP minus 18% your plan and employees pay AWP minus 15% for meds, and Now for some good news. You do have some leverage in this area. If your drug plan is covered under the ERISA umbrella, the PBM must disclose this info. Ideally, you’ll find the rates are the same on both contracts.
But if there’s differential pricing, insist your firm get the full discount. One key cost figure PBMs can’t manipulate is the per-member-per-month (PMPM) cost of your plan. This number will show if your plan’s costs actually increased or lowered. The PMPM is calculated by dividing the sum costs spent by the number of staff members enrolled in the drug plan. It’s also a great tool for comparing different PBMs to see which is the most cost-efficient for the size of your organization, says Peter Reed of Managed Benefits Strategies. 3. can we get rebates, too?
Some PBMs receive money from drug businesses that your brokers won’t tell you about – but could be able to leverage to your plan’s advantage. Example – Many PBMs get rebate checks from drug businesses (typically 50 cents to $1. 25 per claim) for helping increase the sales of their products. When you push hard enough for it, your broker may able to work an arrangement where you either – split rebates from your plan evenly, or let the PBM keep the entire rebate in exchange for a price break on administrative fees. Important – Ask to find out all the payment types the PBM gets from the drug firms. Rebates are often couched in the form of grants or classified as access fees or formulary fees. 4.
How do changes in the formulary work? In most states, PBMs can change your plan’s list of approved medications without prior notice. The problem – PBMs often make mid-year switches that save them money, but may not save your organization or employees a dime. Example – When the PBM adopts a mail-order-only coverage policy on a certain formulary drug, an employee who needs same-day access to the medication might be forced to pay full price for it at a pharmacy. Meanwhile, your plan is still charged the formulary price. To avoid such unpleasant surprises, insist the PBM give written notice of formulary changes, including the addition of new generics.