Category — Wellness Programs

When it comes to health-coverage laws, there’s often a domino effect.

As individual states require insurers â.” and in some cases, businesss â.” to cover or offer coverage of specific people  and procedures, similar laws can spread rapidly to other states.

The effect on plan sponsors -  Some mandates can increase your costs by 20% to 45%.

Small firms targeted, too

States are no longer targeting  just the Wal-Marts and other giant corporations anymore.  The pressure has increased on businesss of all sizes.

That’s namely true for the new “universal coverage” laws passed in Massachusetts and Vermont.

The Massachusetts law requires every firm with 11 or more employees either to cover or contribute toward everyone’s health coverage, or else pay an annual fee of $295 per staff member to a state fund.

Vermont’s similar version sets the yearly fee at $365 per full-time equivalent worker.  The Vermont law also requires all uninsured, low-income hourly employees to have access to a state-subsidized plan (called Catamount Health) sold through private insurance organizations.

It’s up to employers to deduct the monthly premiums â.” $60 to $135, depending on the person’s wages â.” and send it to the state.

There are rumblings in at least 10 states about lawmakers pushing for universal-coverage laws. Several have formed committees to study the Massachusetts law and see when a version may be modified to their state.

Here are three proactive steps to consider now. These could potentially save money, time and compliance headaches later -

o  look into offering mini-med or similar lower-cost programs to satisfy minimum coverage requirements for uninsured personnel. Monthly premiums range from about $25 to $200

o  educate low-income workforce about the earned income-tax (EIT) credit the federal government offers. This could make a mini-med plan free or almost free to eligible workforce, and

o  use flexible spending accounts to develop a tax savings on premiums for other staff and your firm.

Required procedures

The universal-coverage laws draw national headlines, but far more companys are currently affected by state laws requiring coverage for certain kinds of procedures. Three of the biggies -

o  diabetes self-management. Nineteen states require your medical plan to cover all the steps employees with diabetes take to control their condition, including nutritional therapy (if prescribed by a physician)

o  in vitro fertilization. This large ticket service adds 3 percent to 5 percent to your premiums, and is now a required benefit in 15 states, and

o  cervical cancer screenings. In the last year, four more states have required all employer plans to cover yearly cervical cancer screenings for all covered female staff, spouses and dependents age 18 and older. That brings the total to 24 states.

The good news about the diabetes management and cervical cancer mandates is they can decrease your  long-term costs, even when they increase them in the short-term.

Here is a good resource  for keeping abreast of mandatory coverage trends around the country.  The site also features  state-by-state breakdowns of changes in insurance laws  mandating the coverage of different treatments and conditions.

For example, this report from 2006 is the most robust coverage-mandate study that I’ve ever seen.

Who worries more about healthcare costs -  lower-paid or higher paid employees?

Answer -  Both groups worry equally about their out-of-pocket health costs, according to a PNC Services Group survey of 1,485 staff. Nearly 52 percent of all respondents â.” regardless of income â.”cited the unpredictability of health costs as their No. 1 financial-planning concern.

Other common financial-planning fears that affect staff of all salary levels -

o  eldercare. Over half the respondents with children were afraid their offspring may be forced to pay for the parents’ long-term care, and

o  financial stability. 47 percent of mid- to high-salary workers said they were concerned about sustaining or increasing wealth.

It may be easier than you think to eliminate a major reason employees sue.

How? Well, roughly 75% of employee lawsuits happen because of accidental disconnects between an company’s internal policies and procedures, and what’s written in the plan documents.

Here are two areas where some the costliest errors lurk, and three steps your fim can take to catch and correct the mistakes before you’re ever sued.

1. Policy/coverage discrepancies

A lot of firms’ written benefits policies and plan documents are like siblings who start to drift apart as they grow up.

In the benefits realm, nevertheless, the plan sponsor has the “parental” power â.” and legal responsibility â.” to be sure written policies and plan documents remain close as they grow and change.

As a routine practice, firms should make sure changes in their benefits policies are also written into the formal plan documents, according to benefits attorney William Wright.

When push comes to shove in court, any inconsistency with plan documents can prove fatal for the corporation. Example - Executive management passes a new rule that staff members must work 30 hours a week to be eligible for the health plan.

Benefits and HR then write the new coverage policy into employees’ benefits  handbooks and hold meetings with personnel to explain the change.

Now suppose an worker drops to part-time status. Are you legally protected when the worker challenges the loss of benefits?

Not necessarily. for the policy in  the handbook to stand up in court, the plan documents must also say there’s a 30-hour-a-week eligibility requirement.

Same thing goes for disputes over run-out coverage.  Suppose it’s your firm’s policy to carry over coverage for a terminated employee during the COBRA election period, but the requirement was never written into the plan document.

Several weeks later, the employee has a major health claim.  The TPA denies it, saying coverage had expired. Reason -  the plan document says “active employees” are covered, but doesn’t specify that the insurer pay claims until the end of the month.

The likely result -  the ex-employee sues, saying the organization is liable for the mistake.

2. Coordination of benefits

Watch out for cases where an employee’s claim might  be covered under two or more policies (e.g., your firm’s plan and one from a spouse’s employer).

Make certain there’s a clear-cut coordination-of-benefits policy in all your plan documents. Ordinarily, if a plan contains no instructions for coordination of benefits, it’s expected to pay first. Two key areas to check -

1. Be sure there’s a statement that says only the amount actually paid by each plan will be charged against the maximum benefit, and

2. Be sure that the order of benefits determination spells out which plan compensates first for a covered child when the staff member is divorced from his or her spouse.

Likewise, if your firm offers domestic partner coverage, be certain there’s a coordination-of-benefits statement for dependent and non-dependent partners.

Three best practices

On an ongoing basis, you can cut your lawsuit risk by 75 percent if you -

o  gather all materials related to specific plans into a binder, including renewal letters from providers and materials distributed to employees

o  perform a yearly self-audit, checking to see if plan-document wording matches your current policies, and

o  pay special attention to keeping benefits descriptions up to date.

Reminder - If you don’t have a formal plan document, your contract with the vendor legally serves as the “control document” for the plan. By law, all workers must have access to the plan document and be notified in writing of any alterations, including minor ones.

Nine of 10 HR managers polled by Colonial Life feel that workforce have at least a vague notion that benefits are a valuable part of working at a corporation.

Notwithstanding, the same study found that only 21% of those employers believed their workforce had a strong understanding of the workings of their own benefits.  and 5% believed that their workforce didn’t know anything about their benefit options.

Implication -  the greater emphasis placed on staff member education, the more likely personnel understand the role of benefits in sum compensation.

Incorrect billing from health insurance carriers is more common than you may think.  The average plan sponsor can get overcharged by 5 percent a year, as reported by brokerage and consulting firm Corporate Synergies Group.

Like most companies, insurance carriers rarely keep perfectly up-to-date records on their customers.  As a result, plan sponsors often get charged for people  who shouldn’t be covered on the health plan. Here are two areas to watch -

Claims vs. enrollment

It’s common to have terminated workforce still in the carrier’s claims eligibility system â.” even after they’ve been taken off your enrollment list.

Reason - A lot of carriers use separate computer systems for tracking enrollment and claims â.” and the two systems use different technologies that don’t “talk” to each another.

Carriers have no incentive to upgrade their systems, as reported by CSG president Eric Raymond, because doing so would cost the insurers money.

Leaving things as is, carriers simply charge clients when they put through claims for ineligible personnel and dependents.

That’s why an annual claims audit is a must -  That way, you won’t get charged fees for claims the carrier accidentally put through.

Even if your firm outsources the work (it’s a rather time-consuming task when performed in-house), you’ll usually see a few percentage points of savings on your sum healthcare costs.

Dependent eligibility

Poor carrier record-keeping also may be the cause for employees’ ineligible dependents not being taken off the enrollment files.

Few carriers have systems that automatically integrate with your Payroll department and your current enrollment forms (including the electronic “employee self-service” kind). Instead, data entry individuals  employed by the carriers input the information in the vendors’ system.

Human error by the carriers’ employees costs plan sponsors another several percentage points. Solution -  annual dependent audits.

With the downturn in the economy, it seems like most organizations are shifting their focus when it comes to worker benefits and compensation.  The current situation is also very stressful on benefits managers.

In times like these, it’s critical for coworkers to share their concerns, experiences suggestions. A few weeks ago, HRBenefitsAlert.com ran a special report on calming employees’ 401(k) fears.

The reader comments revealed that many benefits pros were just as afraid as staff, and people ’s frustration led to some unfortunate carping back and forth between several readers.

The purpose of the comments section, apart from giving people  the opportunity to react to the story, is to provide a forum for benefits managers to interact.

It’s my hope that we can generate an exchange ideas that have (and have not) been working at readers’ companies during the current situation. Particularly -

o  What are you doing to manage health benefits costs as budgets are either frozen or shrink?

o  Have you noticed a dip in morale or productivity with all the doom-and-gloom in the news?

o  How’s your company trying to calm employees’ fears about salary freezes or layoffs, 401(k) losses, healthcare cost shifting and other issues that get a lot of mainstream media focus?

o  What are you saying to staff members to deliver the news they need to know but also keep morale high?

Thank you in advance for your willingness to share your professionalise and personal experiences. Everyone benefits in the long run.

Few corporations benchmark their flu programs, a study  from the Disability Management Corporation Coalition locates. But those that do often discover room for improvement.

Nearly 80 percent of companys provide personnel access to flu shots, either on-site or at a local clinic.  And 72 percent cover some or all of the cost (typically paying between $10 to $20). But -

o  At 89% of firms, fewer than half of staff actually get a flu shot

o  At 38 percent of corporations, fewer than 25 percent of staff participate

o  only 6% of firms can easily get at least 75% participation

o  87 percent of survey respondents said  they never measure absenteeism during flu season, and

o  75% never tracked whether personnel who get flu shots are actually absent less often.

The firms that get best results are those that actively educate employees, track flu-related absenteeism and send sick employees home.

The fastest-growing use of EAPs since 2002 has been tied to employees’ financial worries.

Over the last five years, there’s been a stated 69 percent jump in employee EAP use related to personal financial concerns.  The trend isn’t all that surprising.

Statistics show that, for the first time since the Great Depression, the typical American has negative savings â.” in other words, debt exceeds income â.” in a typical month.

With salaries frozen in many organizations and many staff members racking up higher and higher credit card debt, the problem may continue to get worse.

Troubling trends

Here are some ominous numbers from a recent worker survey -

o  27% of respondents said they were “one major setback away from financial disaster”

o  22 percent say they were “worse off than last year, with less take-home income and more debt”

o  40 percent say their company is “insensitive to their employees’ financial needs,” and

o  only 6% said they felt comfortable with their current financial situation and ability to manage their debts.

The majority of personal-finance related EAP use arises from concerns over debt management, household refinancing and/or failed investments.

The problem of presenteeism â.” staff members showing up at work but taking a “mental vacation day” â.” isn’t going away any time soon.

A recent survey found the average employee has three unused vacation days after the year. But 33 percent 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 among the highest “presentee” days among companies (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 -

o  supervisors frown on personnel taking vacation time

o  There’s too much work to make up after using vacation time, and

o  people  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 worker in four admits to checking work e-mail and/or voicemail while on vacation.

And 29% say they have trouble forgetting about work-related stress, even when they’re using paid time off.

Among all industrialized nations, USA employees receive the fewest yearly vacation days â.” 14 on average.

It’s tough to get staff members to take part in benefit programs that they don’t even know exist.

Seventy-one% of employees lack basic knowledge of standard benefit programs, according to a new study by the American Payroll Association (APA).

Low participation rates

The ASA study  focused on staff knowledge of their company’s pre-tax benefits. While almost three quarters of staff say they live paycheck to paycheck, and would like to stretch their current salaries -

o  52 percent don’t participate in available flex spending accounts (and 6 percent of had never even heard of an FSA)

o  17% didn’t know their company offered a health savings account or health reimbursement arrangement (46% of those aware about the benefit still don’t participate), and

o  18 percent are unaware of existing transportation benefits or subsidies their company offers.