Caring for Caregivers

Employees bring their whole selves to work each day which allows for the highly efficient, effective, and creative workforce we enjoy.  As Human Resource professionals we appreciatecaregiver benefits the diversity of our workforce and continue to adjust within our employee benefit programs to meet the changing needs of our employees and their families.  Top employers know that thinking more strategically about caregiving will help them fight for top talent and provide the corporate culture employees are seeking especially in this more complicated caregiving landscape brought on by COVID-19.

The concept of caregiving is not new but as our workforce evolves it is becoming more critical to consider caregiving as an area of opportunity within employee benefits.  This shift, further amplified by the pandemic, highlights a cavern between top tier employers who appreciate the multitude of responsibilities employees must navigate versus those that hire people despite them.

The Rosalynn Carter Institute for Caregiving recently released Caregivers in Crisis:  Caregiving in the Time of COVID-19.  This thoughtful piece attaches hard data to the burden we have all experienced over the last 6 weeks.  The data indicates that 83% of caregivers have increased stress since the start of the pandemic, and 42% have indicated that the number of other caregivers available to help them has declined.  Caregivers themselves – in addition to those requiring care – are experiencing an increased burden from isolation, stress, financial concerns, and general instability.

Defining Caregivers

AARP estimates that each year approximately 40 million American adults provide support to others with basic functions (i.e. activities of daily living).  Many of those, including 75% of millennial caregivers are working.

For millennials in particular the stress of caregiving can be more challenging since they are typically providing care for more hours in a week, making less money and having less support from other family members (i.e. reduced family size).  Also of note, millennials are the most diverse caregiving community to date (i.e. racially, ethnically and more likely to identify as LGBTQ+) which can be important to consider related to diversity and inclusion.

Employers that are new to the concept can consider caregiving solutions as a continuum or suite of solutions; not a one size fits all approach or something that has to be implemented all at one time.  A core offering typically includes:

  • Educational resources
  • Advocacy support
  • Self-service tools

Enhancements allow for 24/7 live support and paid time off when necessary to address caregiving emergencies.

It is important to think broadly about caregiving solutions.  In addition to introducing separate solutions, it is equally important to shift our mindset and expand common employer benefits that could be leveraged for extended family members (i.e. second opinions, medical guidance with challenging health diagnoses, etc.).  The term caregiving must also extend beyond elder care of medical conditions but include children struggling with online school or developmental disabilities or Medicare eligibility and financial planning when moving into retirement.  The goal of caregiving solutions is to support your employees as both caregivers and those needing care.

We have all heard the announcement on the airplane about putting on your own mask before helping others; employer sponsored caregiving is building on that logic and allowing your employees to more efficiently:

  • Find educational information related to their caregiving needs
  • Direct employees toward potential solutions
  • Provide tools to support decision making
  • Pair employees with short term and long-term caregiving solutions

Caregiving support as an employee benefit is still in its infancy.  Unfortunately, many employers do not realize the need, the impact on employee performance and the demand that exists at the employee level.  A 2019 Harvard Business School Study, The Caring Company, indicates that while only 24% of employers surveyed believed employee caregiving influenced their employees’ performance at work, 80% of employees surveyed admitted that caregiving had an effect on their productivity.  In addition, 32% of employees surveyed indicated that they left a job because of their caregiving responsibilities.

Employers who take a proactive position on caregiving support – along with the tools needed for successful roll out and measurement – will see a direct impact on attraction, retention, productivity, and corporate morale.

 

If your organization is interested in exploring caregiving support as an employee benefit, or is ready to identify partners for a best practice roll out, please reach out to our team.

Will COVID-19 Cause PTO Plans to Become Extinct?

The leave landscape has changed this year, yes, but our answer to this question, in a word, is no.

PTO plans have grown in popularity over the past 20 years with an estimated 50% of employers now offering this type of model compared to the traditional time off models that create separate banks of time based on reason (i.e. sick time, vacation time, etc.). The high adoption of PTO plans has been driven by the flexibility they provide to employees while lowering the administrative burden and decreasing unscheduled absences for employers.

With all the benefits of PTO, there is an inherent risk that employees won’t use their PTO time for illness, and instead will save it for vacation time. Before COVID-19 this was a small price to pay for most employers; however, this is no longer the case with so many companies leveraging its use. This potential risk, while critical to consider, should not cause significant concern for employers as there are ways to minimize it without sunsetting your PTO plan.

In this new landscape it is important for all employers – regardless of their PTO adoption – to hit the pause button to ensure their current time off offering remains optimal for their employee population, business model, COVID-19 response plan and strategic direction.

To determine if a PTO plan is still the right approach for your organization, consider the following:

  1. Utilization
    Although your time off data should not be the only thing you consider, it is a good starting point to understand how much time is used, by whom and when. Tracking utilization can help you to recognize absence patterns and discover where deficiencies exist. It can also help to identify areas of your organization that may not be accurately tracking time.
  2. Holistic Absence View
    For most employers, PTO is just one piece of their absence plan. Therefore, it is important to evaluate absence holistically. Plans like salary continuation, short term disability, quarantine leave, etc. are also pieces of the puzzle that must be part of the discussion. Thinking about both plan design and process for all absence plans becomes critical.
  3. Alternative Work Options
    Working from home decreases the likelihood that employees with mild illnesses will “go to work”. This flexibility is important for organizations with aggressive paid time off plans who do not have other paid time available for quarantining if COVID-19 is suspected. Not all organization have this level of flexibility; the key is to ensure care is taken to manage transmission of the virus at work to other employees and/or customers.
  4. Corporate Culture
    Regardless of written policies, corporate culture often dictates not only the approach to absence plans and process but utilization and tracking patterns. Ideally time off should be used to recharge and create balance, allowing greater productivity upon return.
  5. Benchmarks
    Understanding what your peer group provides from a time off perspective is paramount. The most optimal plan for your organization should be in line with benchmarks to attract and retain your top talent. Applicants and current employees will compare time off plans, and in some instances view the flexibility of PTO plans more favorably than separate banks with more days available.

 

As with most benefit programs, time off is not one size fits all.  Comprehensive PTO plans remain a competitive option in the market even during and as a result of the COVID-19 crisis.  The key is to make sure you are taking a holistic view that includes time for  employees needing to take care of themselves or their family members.

To talk about your specific plans or gather more information, please contact Spring Consulting Group.

5 Things to Think About Before Introducing a Student Debt Benefit

COVID-19 Update

In light of the global pandemic, the federal government’s Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was passed in late March, has several provisions related to student loan debt that employers and employees should be aware of including:

1 – Payments on student loans will not be required through 9/30/2020. Nonpayment during this time will not yield any negative repercussions for the payer (such as a credit score hit), and interest will not accrue during the six months. This exception applies to direct and federal family education loans, but not private loans. In addition, borrowers who can afford to continue making minimum payments (or make additional payments), will have all of these payments apply toward principal during this period, allowing them to further benefit by paying off their student debt more quickly.

2 – If an employer would like to help an employee pay down their student loan debt as an added benefit during this difficult time, the employer can make a tax-free payment of up to $5,250 per employee during 2020. Prior to the CARES Act, employer payments were fully taxable to employees. Employers are hopeful that additional legislation will make these tax changes permanent.


In 2018, Americans held a whopping $1.5 trillion in student loan debt, beating both the national auto and credit card debt rates. This number has grown exponentially in recent years, having an impact on all employees but arguably hitting the millennial generation hardest. As a result, employees are deferring home purchases and retirement savings due to their student loan obligations. In turn, this creates a challenge for employers working to recruit these employees, who are experiencing financial challenges and not at optimal productivity or engagement.

Employers across the country are recognizing this crisis, and implementing solutions to mitigate its effects for employees. However, nothing is simple. In considering a student debt relief benefit, organizations need to think about:

  1. Strategic goal(s)

  2. Financial wellness

  3. Funding and taxability

  4. Administrative complexity

  5. Employee demographics

In this article, we will elaborate on these factors and outline the pros and cons of several established student debt benefit programs. We will also provide our perspective on the future of the market – is this a short-term trend or something that is here to stay? Click here to read the full article.

The Latest in MA Paid Family and Medical Leave

By Karen English and Teri Weber

What You Need to Know

In June of 2018, Massachusetts passed a paid family and medical leave policy, making it the fifth state to do so after California, New Jersey, Rhode Island, New York, and Washington, and almost in tandem with D.C. Since then, Massachusetts employers, employees and industry professionals like ourselves have been closely following the regulatory progress and stipulations of this new program.

The Law: A Brief Overview

The Massachusetts Paid Family and Medical Leave law provides employees working for a Massachusetts employer with up to 26 weeks of job protected, paid family and medical leave for qualifying reasons, which include but are not limited to:

  • One’s own or a family member’s serious health condition
  • Bonding with a newborn or adopted child
  • Tending to a family member who is an injured servicemember

The law also offers job protection during and after a leave. The nuances of the policy and modifications have been slowly rolled out over the last year. More details about employee eligibility, employer requirements and readiness, and pay allocation can be found here. As with all state-wide legal overhauls, the policy is quite complex.Paid Family and Medical Leave Massachusetts

The program is meant to be funded through employer and employee contributions, with employers using MassTaxConnect to determine contributions and appropriate tax filing.

The Latest

The Paid Family and Medical Leave benefits were set to be available to employees starting January 1st, 2021 for bonding, military exigency and one’s own serious health condition, with a second wave being rolled out on July 1st, 2021 for other available and applicable benefits. To ensure sufficient funding for the program, employers were to start paying paid leave taxes starting July 1st, 2019.

As the deadline approached, however, employers in the state became concerned over unanswered questions and lack of time to prepare. Members of the Associated Industries of Massachusetts sent more than 2,500 messages to Governor Charlie Baker explaining that they lacked the time and clarity to stay on track for the July 1st deadline. Massachusetts lawmakers heard the grievances and acted accordingly. On June 11th, 2019, the state agreed to a three-month delay on paid leave tax collection, which will now begin on October 1st, 2019.

What This Means For Employers

The extension allows us all to get more familiarized with the ins and outs of the law and plan accordingly. Employers will be focused on whether an exemption applies, how the breakdown of corporate tax vs. payroll deduction will work, and what portion(s) of their workforce are eligible for the different benefits outlined. The additional time will also enable employers to effectively communicate the changes. Updated key dates to be aware of include:

  • Required Withholding Now Starts October 1, 2019
  • Contribution Rate Has Been Adjusted from 0.63% to 0.75% of Employee Qualifying Earnings
  • Remittance of Contributions for the October 1 to December 31 Quarter Will Be Due January 31, 2020
  • Timeline Has Been Extended for Required Employee Notices to September 30, 2019
  • Timeline Has Been Extended for Exemption Applications to December 20, 2019
  • PFML Final Regulations Are Scheduled To Be Posted on June 17, 2019 and Become Effective on July 1, 2019

Please get in touch if you have questions about the Massachusetts Paid Family and Medical Leave law and how to prepare for the program’s rollout. We have experts in leave management and compliance that are happy to help you navigate this new policy.

 

4 Ways ADA Management is Like Raising a Pre-Teen

The world of absence management is continually evolving and changing, and this is one of the many reasons I love my work.  One component of my role is assisting organizations in managing their disability and leave programs, which includes being compliant with the American’s with Disabilities Act (ADA) and Amendments Act (ADAAA).  The ADA has pained employers for years due to its regulatory complexity, and although they are making strides and building functional processes to address it, it can sometimes feel like two steps forward and one step back.

I recently conducted a training on the ADA for a large employer team of subject matter experts.   After a challenging week of what felt like personal parental fails, I used an analogy that managing your ADA program is a lot like raising a pre-teen! Truth be told, that wasn’t in the script, but it was top of mind at the time and I knew that most of the audience could relate to both parental and ADA struggles.

If you still aren’t convinced of the overlap, I have outlined four challenges with the ADA (that I also experienced with my 12-year-old daughter).

  1. Everything must be managed on a case-by-case basis

Organizations must have a prescribed process to identify and manage ADA cases to ensure potential accommodations do not slip through the cracks. However, the regulation is clear in that every case must be reviewed based on its own merit.  Employers must consider every request, examine what is needed, and consider solutions that will satisfy the employee’s needs without causing undue hardship to the organization. Key elements of any job must be considered, such as location, essential functions, organizational structure, hardship potential, duration and the like. A simple yes or no is rarely enough. There are often conditions that must be met, including the potential for extensive negotiation, and any decision may be accomp

ADA Management

anied by resistance from different parties.

At home I also take into consideration things like location, duration, hardship to the family unit and every request must be reviewed on its own merits.  Just like with your ADA requests, a yes is always met with delight, but a no will always cause additional work and difficult discussions. That said, that doesn’t mean that you can routinely go the “yes” route just because it’s the path of least resistance.

 

  1. There is a constant demand for “things”

Regardless of whether the request is for Instagram or a sit-stand desk, the requests just keep rolling in!  Giving a simple “no” just isn’t going to work. You must engage with your employee (or child) by asking questions, digging into the details, justifying your rationale and following documented policies and regulations (or family rules). Why do they need what they are asking for? Examine both sides of the argument.

With accommodation requests, a simple “yes” is rarely the optimal solution.  The key is to really understand what is needed versus what is requested, as there are often gaps in between.  The dialogue and documentation need to support what the employee can do and what will ensure they are able to do the essential functions of their job with or without accommodations.  Simply approving their request for something may not actually yield a successful solution.  Instead as the employer you need to find an accommodation that suits not only the employee but as many stakeholders as appropriate.  I recently worked with a client surrounding parking accommodations which were on the rise and extremely challenging given their various office locations and distances to sites.  It highlighted how a simple “yes” doesn’t always  work.  Instead great care needs to be taken with each request and each potential accommodation.

With my daughter it started with an iPod and grew to the iPhone, which has now turned into social media requests.  Just saying yes doesn’t work for me – I need to dig in and see what I can provide her that might satisfy her need to fit in without creating an undue hardship for me. And if I do say yes, you can bet there is going to be a social meeting

agreement (similar to an accommodation agreement) to hold us both accountable! .

 

  1. Your voice is drowned out by others

Employees requesting an accommodation typically have resources to work with at an organization.  They may be working with a disability or workers’ compensation partner, their supervisor, HR, benefits and even occupational health resources.  All those voices become noise in the ADA process.  Even with the best of intentions, those s

ources put pressure on the situation that may drown out the voice of the accommodation team. Some parties may be encouraging return to work too aggressively or not aggressively enough. Silence from those resources may be perceived as lack of support the same way that vocalization may be viewed as intimidating. How do you find the right balance?

The key is to manage expectations within the ADA process and bring the stakeholders together by giving them a seat at the table.  The interactive pr

ocess is a very critical part of accommodation reviews; it cannot be avoided in a compliant process.  Instead of dreading that part of the process, try to embrace it.  Use it to get to the best solution for the employee and the stakeholders and then make a firm decision on what can be implemented.

All parents understand that our children aren’t always listening to us even though we may think every word we utter is critical and wisdom-filled (just like a strong HR professional). Further, what they hear from us may differ from what they hear from their friends, friends’ parents, teachers, or even your spouse. But regardless of the frustration or eye rolls, the ultimate decision related to our children rests with us.  They may try to change our minds or tell us all the reasons why other opinions should be valued, but we determine the best solution and do our best to implement it at home.

 

  1. The goal post is hard to see, but it’s there in the distance

An organization cannot be compliant with the ADA, or appropriately manage absence, unless they are dedicated to developing an accommodation program and following through with clear processes and documentation. With that said, it is a long game – a marathon, not a sprint.  Most employees and supervisors will not be singing your praises immediately. At first, they will feel like you are making it “too easy” for employees, or “rewarding” employees who are abusing the system.  At the same time employees may think you are “asking too many questions” or “forcing them to pay more money to get paperwork completed.” On any given day all those things may be true, but you are also working to provide a compliant work environment that accommodates employees fairly. You want a solution that returns employees to productive work, processes that are in good faith and interactive and a way that documents what steps were taken and what was agreed to.  All of those are beneficial to your organization and to the individual as well.

I was recently working with a client that learned the hard way about documentation. They had a healthcare resource that was given an accommodation around not performing CPR as it was not viewed as an essential function. This employee was transitioned to a new role where CPR was required but the knowledge of her accommodation and lack of ability to perform this function was missed during transition. Unfortunately, this placed an unanticipated strain on the organization, which could have been avoided with greater documentation. Instead, the involved parties were working to solve the immediate need without thinking about the long-term impact on the employee or the organization.

As you focus on return to work and accommodations, try to aim for incremental change toward the most successful program possible, keeping the long-term vision in your view. Start with your policies and procedures, ensuring they reflect the type of program your organization needs.  Consider them as living documents that will require revisions as your accommodation program matures.  Build an efficient process around those policies, doing your best to move toward that pre-defined, distant goal post.

At home, incremental change is necessary as well.  Do I want a clean room, laundry done, dishes finished and homework perfect? Yes.  But I will settle for incremental change toward a successful and productive member of society.  This may mean taking things one step (or chore) at a time or placing more focus on the achievements compared to the gaps.

So next time my daughter tells me I am “annoying” and “all the other kids have Instagram” and “I don’t know what it’s like,” I will remind myself that on any given day those things may be true, but I’m trying to raise a healthy, happy kid and building this foundation is necessary to create long-term success.  Right now, it’s hard for me to see the goal post but I know it’s there.

 

Regulation around the ADA is complex, like my pre-teen, but it’s important to remember that it is built on the core premise of avoiding discrimination and pushing employers to do what is right.  It sometimes forces a difficult dialogue between employers and employees, but the goal is optimal for both parties.

Let’s Give Them Something to Talk About

The Massachusetts Paid Family and Medical Leave Listening Sessions

Spring attended the listening sessions in Boston and Springfield where employers and their advocates provided constructive feedback to the proposed Massachusetts Paid Family and Medical Leave (“MA PFL”) regulations, a draft of which was released in late January.  We gained a lot of insight into the proposed plan, its gaps and possible hurdles to its approval, and we wanted to share with industry professionals who were unable to join.

To set the tone, those sharing their questions and identifying areas that require clarification were thoughtful and balanced in their approach.  Many voiced their concerns after an introduction that included appreciation for the core tenants of the statute.  Top-of-mind was a struggle with the lack of guidance around the exemption process, clarification on definitions and administrative complexities.  As an advisor in this field, who has worked with employers to implement paid leave in other states, multi-state employers were definitely highlighting provisions that have proven to be an ongoing challenge with other state paid leave programs. Paid Family Leave

At each session approximately twelve individuals submitted verbal commentary.  Although the Boston commentary was primarily from attorneys representing smaller employers that are struggling to implement the regulation, the Springfield representatives were primarily from employers and represented groups of all sizes.  The representatives from the Commonwealth were in listening mode, diligently taking notes and occasionally asking for clarification on the comments.  Feedback could be summarized into five primary categories, which we will further elaborate on:

  1. Definitions
  2. Exemption process and impacts
  3. Certification process, including retaliation and appeals
  4. Coordination with employer policies
  5. Taxation and cost considerations

Definitions

  • Organizations were looking for additional clarification on the definition of domestic partner, qualifying reason and increments of time.  The goal was to refine them to be more specific and, where possible, more in line with the federal regulation.  Similarly, for any time tracking (i.e. 90 days for certification, 6 months for retaliation) employers are seeking more specificity around when the clock begins.
  • Within the regulations there is a reference to providing information related to an employee’s position; clarification was requested on what that represents.  For example, will a job description suffice or will physical demands be required?
  • When considering the exemption process, employers want to better understand the definition of equivalency.
  • The regulation leverages 1099’s as a point of reference for “employees”, however many spoke about 1099’s not being the best assessment and the need for additional consideration to be given to defining employees.
  • The group was curious as to how the look back provision will work in the first year.

Exemption Process

  • Employers are anxious for more information related to the exemption process, especially private plan requirements.  Questions centered around how vendors will be approved and leveraged, what reporting will be required, and what will the bond process entail.  The timeline of the process was also discussed with particular interest in what happens to contributions from July 2019 – January 2021 (assuming exemption if approved) for exempted employers.
  • The sharing of wage information was of concern to many speakers, including both process and timelines.

Certification Process

  • The certification process prompted dialogue around expanding the list of who can certify time.  In addition, extensions on certifications were identified as administratively complex under the draft regulations, as notice requirements may be compromised if employers are waiting for employees to see their provider before certifying an extension.
  • Given the timeline for certifications, employers raised concern over protecting time before an actual approval is made.  Similarly, when no claim is filed, how and when can an employer take action?
  • The retaliation provision was an issue for many.  Advisors and employers are seeking additional guidance in order to limit their potential liability.
  • Although appeal details are unclear, it is believed that an appeals process will exist in the final regulations.

Coordination with ER Policies

  • In the current state, employers are required to allow employees to continue to earn time while on leave; however, if earned time off is based on hours worked, what will be the requirement?
  • Some employers questioned how this leave will coordinate with complex policies related to time off.  For example, if an employee must work the day before a holiday and/or the day after a holiday to receive holiday pay, how will that impact employees that leverage MA PFL?  Will employers be able to maintain those provisions, or will MA PFL not allow for those constraints?
  • Coordination with workers’ compensation was highlighted as an area needing additional thought.  Similarly, how the regulation would impact an employer’s ability to explore restrictions and accommodations during leave could be negatively impacted.
  • Employers noted that a feature of the FMLA that could be transferred to MA would be to ensure employees that have no intent to return to work are not given paid time arbitrarily.

Taxation and Cost

  • Although the cost of the program including staffing and health care premium dollars were mentioned, we do not expect any sweeping changes. However, there may be an opportunity to add language that specifies if any costs can be recouped, especially if employees do not return to work.
  • A handful of people spoke about the need for clarification surrounding how the contribution will be calculated.
  • Taxation of the contribution as well as the earned income was a worry and requires resolution.

 

The Commonwealth seems to be setting a strong foundation by openly seeking feedback from its constituents and giving themselves a long runway, which we hope and expect will assist in a smoother roll out than experienced by other states.  In addition to the listening sessions there is a lot of work going on behind the scenes develop the infrastructure.  In February, they will be seeking feedback on digital tools they are developing to help employers understand the impacts of the law.  It is expected that this will also include contribution calculators and other tools.

Employers who did not attend the sessions should feel welcome to attend a session in the future submit written comments for consideration.  Written presentations may be sent to MassPFML@Mass.gov.  The Commonwealth will be used to refine the next draft of the regulation.  Although responses can reference the statute, changes to a passed statute are unlikely; however, the regulations supporting that statute and providing further details can provide necessary clarification to ensure the MA PFL can be managed with limited ambiguity.  Spring will continue to follow the MA PFL; if you would like to submit commentary please contact us at teri.weber@springgroup.com or karen.english@springgroup.com.

5 Potential Pitfalls of Voluntary Benefits & How to Avoid Them

You already read that Voluntary Benefits Are No Longer Voluntary for Employers. Now it’s time to dig deeper into Voluntary Benefits best practices- program design, what constitutes success when it comes to voluntary benefits and outline tips to prevent an ineffective voluntary program.

The term voluntary benefits was coined long ago when employers fully funded (or significantly subsidized) core benefits and voluntary benefits were an add-on, paid for by the employee through payroll deductions.  As the landscape changed, core benefits evolved to be partially funded by employers and partially funded through payroll deductions. As a result, many benefits became voluntary.

For today’s employees, it’s not as simple as core and voluntary; it’s about choice.  Employees need to balance what limited disposable income they have for all benefits, regardless of what they are labeled. Even still, the concept of core and voluntary resonates with employers as an industry norm, so it’s important to identify ways to avoid common pitfalls of voluntary program implementation:

  1. Think holistically
  2. Don’t forget about ERISA
  3. Consider enrollment options as a critical component in overall design
  4. Remember that education is key
  5. Help employees get the most from their plan

Think Holistically About Voluntary BenefitsVoluntary Benefits Tips

Many employers think offering voluntary benefits is like checking a box – something that can be done quickly and without much deliberation. However, programs without thoughtful preparation are rarely successful in terms of education, enrollment and satisfaction.  Voluntary benefits should be considered an integral part of the overall benefits package.  A strong offering should take into account various factors, including but not limited to:

Current population:

Although a one-size-fits-all approach does not and should not exist, employee demographics can help you pinpoint which products would be most sensible for your collective audience.  Generally speaking,                  those that are starting out in their careers have different priorities than those nearing retirement, and employees falling somewhere in the middle of the spectrum will have their own set of benefits needs as                well.  For example, accident insurance is more popular for families than for singles or empty nesters, while student loan repayment is more relevant for those in their 20’s and 30’s than for older employees.

Current benefit offering:

When considered in tandem, voluntary benefits can serve to protect employees and reduce their risk or perceived risk for various physical or financial troubles.  For example, introducing a high deductible                   health plan offering complementary voluntary products (i.e. hospital indemnity, critical illness, accident insurance) can help decrease the financial burden on employees.

Don’t Forget About ERISA Considerations for Voluntary Benefits

Voluntary Benefits Best PracticesVoluntary benefit programs may or may not be subject to the Employee Retirement Income Security Act of 1974 (ERISA), depending on how they are structured and supported by the employer.  ERISA provides important protections but can also pose constraints for employers and employees.  Assuming you do not want your voluntary programs to be covered under ERISA, you must be careful to manage enrollment and administration separately from your core benefit programs.  If you would like your voluntary plans to be subject to ERISA, then coordinating administration and enrollment will not be problematic; however, understand the potential impacts.  ERISA compliance and your potential fiduciary duties should never be an afterthought.

Consider Enrollment Options as a Critical Component in Overall Design

Our research affirms that employees better understand the offering and have higher enrollment when they participate in group meetings or individual meetings.  In addition, vendor partners are often willing to offer more competitive pricing and waive enrollment requirements if they can meet with employees directly or send them some type of material in the mail.

While some employers welcome the “free” education and enrollment, others are concerned about aggressive selling or having employees using work hours to meet with potential vendors.  If you think of voluntary benefits as part of your holistic offering, then leveraging work hours will be less of an apprehension when voluntary is an element of your complete attraction and retention tool.

The key is to think about the enrollment process as an essential design component of your voluntary program.  Ensure that decisions surrounding enrollment fit with the overall program strategy and make sense for your population.  Providing comprehensive enrollment with core and voluntary may be a best practice for your group.  This allows employees to make coordinated decisions regarding their contributions and programs.  It also enables you to offer complementary plans for optimal plan selection.  While that structure works for some, other employers feel employees have too many decisions to make during annual enrollment and prefer to stagger voluntary enrollment to allow more time for thoughtful decision making. There’s no right or wrong answer – each company and population is different.

Remember that Education is Important

Decision support tools have continued to evolve, providing employees with strong advocacy for traditional plans and voluntary benefits alike.  Although voluntary benefits are designed to be less complex and easier to understand, for some employees the language is new.  Summarizing the program(s) and sharing scenarios to help employees understand the products is often the best way to introduce a new plan.Voluntary Benefits Enrollment

Regardless of who funds the program, as the employer it is important that you educate your employees on the available offering.  Employees should not elect a benefit they do not understand and employers should not offer benefits that are not valued by employees, or that employers themselves cannot explain effectively.  Every dollar spent on voluntary benefits is money your employees are not spending on other necessities like monthly bills, student debt, groceries, emergency savings, or even 401k contributions; make sure they are knowledgeable about what they are buying and ensure that it’s a competitive product in the market.

Education can be facilitated in many ways including traditional employee meetings, brochures, benefit fairs, and onsite sessions with vendors.  At Spring we have also assisted clients with quick videos that provide the highlights of a program and generate interest.  These videos have been well received and employees are able to retain the information from a creative video more easily than a detailed presentation.  Videos are also shareable and can be viewed by family members who may be a critical part of the decision-making process.

Help Employees Make the Most of the Plan

Voluntary Benefits Vendors

After you have implemented a voluntary program and educated your membership it’s important that you continue to monitor the program and assist your employees in optimization.  Sometimes employees forget about the benefits they have available to them and continue to make monthly contributions to plans but they neglect to file claims because they don’t remember what they have elected.  A few simple actions can help your employees make the most of the plan:

  • Send a quarterly newsletter to all employees, or just those enrolled in voluntary benefits. This will give you the opportunity to remind them of the program benefits.  It can also help facilitate changes (i.e. enrolling spouses, children) and provide an opportunity to ask questions.
  • Partner with your vendors. For example, if you have a purchase program in place, they often run specials and send postcard reminders.  Take advantage of those specials!  Perhaps you could run a joint wellness campaign linked to specials on health equipment.  Ask if they would be willing to raffle off something like a treadmill or vacation to align with your wellness strategy.
  • Remind your employees to file claims. Even if you cannot leverage actual data, you can send a reminder at the midpoint of every year for wellness visits with a link to the claim form.  For example, most critical illness and accident plans offer a wellness rider – find out how many employees use that benefit and try to increase that percentage.
  • Ensure the program remains competitive from a pricing and design standpoint. Employees should feel assured that the benefit they’re purchasing through their employer remains is top tier.

Taking the above factors into account will help you establish a voluntary benefit offering that is accessible and relevant to your employees and that is well worth the effort on your part. Today’s workforce has come to expect more than just the basics when it comes to benefits, and voluntary products allow you to diversify your benefits package, keeping you competitive with market standards without any significant cost increase.

However, it is not enough merely to offer voluntary products and services – they need to be the right ones for your population, they need to be communicated effectively, they need to be readily understood, they need to account for regulations like ERISA, they need to be fully utilized and they need to be rolled out in a way that makes sense for your organization. By covering these bases you’ll be able to avoid the most common pitfalls and successfully offer a valued voluntary benefits programs.

New Limitations on Short-Term Healthcare Policies: What You Need to Know

Short-Term Healthcare

Image credit: Michael Havens via flickr

On October 31st, the US Departments of Labor, Health and Human Services and Treasury (the Departments) issued a Final Rule pertaining to short-term healthcare policies. Here are the details:

Short-term health policies are exactly as they sound: healthcare policies, limited in duration, that are meant to function to fill a gap in coverage some individuals may face during their lives if they transition between jobs or group health plans. They are currently limited to twelve months of coverage.

What the Departments have found is there is a growing practice of individuals purchasing short-term policies (which are generally cheaper than exchange policies) and then paying the IRS penalty (short-term policies are not considered Minimum Essential Coverage), which has become a cheaper option. In some cases, individuals are even allowed to renew their short-term policy past the twelve month period, further solidifying the policy as their primary coverage.

It is speculated those opting to go this route are healthier individuals that just want to ensure they have some coverage. These healthier individuals are exactly what the Affordable Care Act needs in the exchange risk pool to balance things out. This is why there was such a concerted effort to close the door on this practice and push these individuals to the exchanges.

To combat this practice and further diversify the exchange risk pool, the Departments have issues a Final Rule, which changes the twelve month maximum for short-term policy coverage to three months. This will be effective for any policies with policy years beginning January 1, 2017. It should be noted that the limit will not be enforced on any 2017 policies, sold before April 1, 2017, in states with existing approved 12 month limits providing the policy expires in the 2017 calendar year.

The full ruling can be found here.

This change won’t cause a seismic shift in the exchange risk pool, but with some of the projected rate increases being reported for 2017 and beyond, even small steps certainly help in chipping away.

Of course, in light of last night’s election results, much of the Affordable Care Act will be under a cloud of uncertainty for the foreseeable future, so stay tuned…