Answer –  Both groups worry equally about their out-of-pocket health care costs, as reported by a PNC Services Group survey of 1,485 employees. Almost 52 percent of all respondents – regardless of income -cited the unpredictability of health care expenses as their No. 1 financial-planning concern.

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

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

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

How? Well, roughly 75 percent of staff member lawsuits happen because of accidental disconnects between an business’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

Many 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 – and legal responsibility – to make 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, as reported by benefits attorney William Wright.

When push comes to shove in court, any inconsistency with plan documents can prove fatal for the company. 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 workers to explain the change.

Now suppose an worker drops to part-time status. Are you legally protected if 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 staff member 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 business is liable for the mistake.

2. Coordination of benefits

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

Be sure there’s a clear-cut coordination-of-benefits policy in all your plan documents. Generally, when 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. Make certain that the order of benefits determination spells out which plan pays first for a covered child when the staff member is divorced from his or her spouse.

Similarly, when your firm offers domestic partner coverage, be sure 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 –

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

• perform a each year self-audit, checking to see when plan-document wording matches your current policies, and

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

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

Nevertheless, the same study found that only 21 percent of those employers believed their staff members had a strong understanding of the workings of their own benefits.  and 5 percent believed that their staff members didn’t know anything about their benefit choices.

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

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

Claims vs. enrollment

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

Reason –  A lot of carriers use separate computer systems for tracking enrollment and claims – 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 patrons when they put through claims for ineligible staff members 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 when your firm outsources the work (it’s a rather time-consuming task when performed in-house), you’ll normally see a few percentage points of savings on your total healthcare costs.

Dependent eligibility

Poor carrier record-keeping also could 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 people  employed by the carriers input the information in the providers’ system.

Human error by the carriers’ employees costs plan sponsors another a few percentage points. Solution –  annual dependent audits.

In times like these, it’s vital for peers to share their concerns, experiences suggestions. Several 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 employees, and individuals ’s frustration led to some unfortunate carping back and forth between a few 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 –

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

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

• How’s your corporation attempting 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?

• 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. Everybody benefits in the long run.

Almost 80% of businesss provide workers access to flu shots, either on-site or at a local clinic. and 72% cover some or all the cost (typically paying between $10 to $20). But –

• at 89% of firms, fewer than half of employees actually get a flu shot

• at 38 percent of organizations, fewer than 25 percent of workers participate

• only 6% of firms are able to get at least 75% participation

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

• 75 percent never tracked whether workers who get flu shots are actually absent less often.

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

Over the last five years, there’s been a stated 69% jump in staff member employee assistance program (EAP) use related to personal financial concerns. the trend is not all that surprising.

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

With salaries frozen in many organizations and many workers 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 –

• 27 percent of respondents said they were “one major setback away from financial disaster”

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

• 40% say their business is “insensitive to their employees’ financial needs,” and

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

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

A recent survey found the average staff member 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 among the highest “presentee” days among companies (specifically in the white-collar realm) that remain open on those days.

In terms of the expanded question of presenteeism, what’s keeping people  from using their vacation time as it’s intended?  Top answers –

• supervisors frown on employees taking vacation time

• there’s too much work to make up after using vacation time, and

• 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 staff member 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 compensated time off.

Among all industrialized nations, U.S.  workers receive the fewest annually vacation days – 14 on average.

Seventy-one percent of workers 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 employees knowledge of their company’s pre-tax benefits. While almost three quarters of employees 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% didn’t know their corporation offered a health savings account or health reimbursement arrangement (46% of those aware of the benefit still don’t participate), and

• 18% are unaware of existing transportation benefits or subsidies their business offers.

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 –

‘Participation incentives’ are fine

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 health insurance portability and accountability act (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 employees 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.

Conditional rewards OK if…

But what when you want to make the reward conditional on participants meeting specific health goals? Example –  Employees 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 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 must 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 person.” In other words, you can’t make a company-compensated weight control program available to certain workers but not others.

When, 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 may not be able to meet certain standards, so you must offer her an alternative.

Negative incentives violate HIPAA

So what’s not permitted under health insurance portability and accountability act (HIPAA)’s non-discrimination rules? Anything that punishes people  for their medical conditions or health risks.

The rules prohibit businesss from charging different premiums, contributions, co-pays or deductibles based on personal health factors such as obesity or smoking. Nonetheless, 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 medical condition, even when the condition wasn’t diagnosed before the injury.

For example, some health plans have a “suicide exclusion” that denies payment for treating self-inflicted wounds from a suicide attempt. Now let’s suppose the employee suffers from clinical depression. Even when the depression was undiagnosed before the suicide attempt, it’s illegal for your plan to deny benefits to this employee.