Corporate Health Promotion

Ever set out to organize and dispose of old staff member 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 when a current or former staff member sues or the DOL, IRS or the state audits your records.

Here’s a records-retention schedule recommended by employment lawyer Jacqueline McManus –

• Retain for two years worker 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 staff members 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 alcohol and drug 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.

• Retain 401(k) files indefinitely.

Many employers try to reward staff members during the holidays. But be cautious –

There’s a common misbelief that the IRS considers gift cards worth $20 or less de minimus benefits and, consequently, they’re tax free. Regrettably, that’s not true.  With few exceptions, the IRS considers nearly anything with cash value a taxable form of compensation.

Practically speaking, the IRS is unlikely to go after your firm or an worker 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 a few thousand dollars worth of uncompensated taxes in a few years. Each $15 gift card would usually require about $5.55 withheld.

To be safe, you are able to use gift cards sparingly and pay the tax for the recipient. Or else you are able to educate folks proactively that Uncle Sam requires you to take out for taxes.

Read the fine print

Gift cards could be money-wasters or or morale-killers when staff members have a bad experience trying 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 companys with as few as 200 employees to explore self-insurance. But beware of hidden traps.

When your organization is weighing self-insurance – or has already taken it – here are three pitfalls that can develop unexpected costs.

1. Unfavorable worker mix

It’s impossible to completely eliminate the risk of unexpected, high-dollar health claims. But here’s a guideline to decrease your risk. Health claim stats suggest the “ideal” employee population for a self-insured plan is predominately young, non-smoking and male.

Be aware that stop-loss insurance carriers often “laser” those staff members considered higher risk. Lasering means that your business would have to pay out much more in claims for these staff members before the stop-loss coverage kicks in.

2. Loss of network discounts

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 providers’ administration-only choices, ask –

• Will the provider’s network alliances work in your best interests, cost-wise?

• Will the provider only oversee claim payments or negotiate to build the best provider network, quality-wise, for your workers.

Bottom line –  You should get the same kinds of plan designs, networks and discounts as a fully insured plan.

3. Wasteful reinsurance contracts

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 be 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 also to – not instead 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, particularly 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. As reported by the Mayo Clinic, there’s now some research to suggest this treatment can help with some kinds of chronic pain, particularly 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 could be a relaxing treatment to reduce stress, few firms – if any – foot the bill on employees’ behalf.

When an employee ignores directions from a doctor, who’s responsible if the employee 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 people ’s injuries caused by misuse of a prescription drug.

Situations such as these raise three questions that even HR/benefits pros have trouble answering. How are you – or supervisors – supposed to know what meds individuals  are on and whether they’re taking them as directed by their physicians?

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 physician 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, when not the meds themselves. Example –  the staff member requested a schedule change and said it was due to a particular health problem

• the person has a history of erratic behavior that management suspects is medication-related, and/or

• the employee’s job involves potentially hazardous situations.

Spotting possible danger

A Florida case (Johnson v. Rentway) is a classic example of the two of the three large danger signs.

1. the supervisor knew an worker had insulin-dependent diabetes.

2. the employee was under doctor’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 staff member worked a potentially hazardous job (he was a expert truck driver).

Lastly, the inevitable happpened. the staff member 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 company. 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 corporation big.

Some estimates place the potential cost as high as $35,000 a year per case. What’ your company’s risk?

Many 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 worker assistance program (EAP), chances are alcohol abuse-related risks go undetected. Here are two strategies that’re getting good results.

1. Include alcohol in medical testings

If 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 average day? And

• How often in the last month have you had six or more drinks?

For male employees, 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 –  When you don’t offer appraisals, you are able to refer employees to a free, confidential web-based screening.

Benchmarking tools

Many experts say drug-free workplace policies and worker 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 when sponsoring an EAP makes financial sense, you are able to calculate your own firm’s current cost risk for free here. Plug in your business kind, locale and number of workers.

You’ll get a customized estimate of yearly 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.

Researchers found staggering overcharges – particularly for generic drugs. Regretfully, 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 vendor – 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?

A lot of PBMs gain hidden profits off your plan through a practice called “differential pricing,” says consultant Gerry Purcell.

In other words, the PBM pays one price to drug retailers and then sets a lesser discount off the typical 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 percent for meds, and

• the PBM pockets the difference.

Now for some good news. You do have some leverage in this area. When 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 when there’s differential pricing, insist your firm get the full discount.

2. What’s the PMPM?

One key cost figure PBMs can’t manipulate is the per-member-per-month (PMPM) cost of your plan. This number will show when your plan’s costs actually increased or decreased.

The PMPM is calculated by dividing the total costs spent by the number of staff members enrolled in the drug plan.

It’s also a excellent 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 companies 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 companies (typically 50 cents to $1.25 per claim) for helping increase the sales of their products.

If 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 kinds 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 could  be forced to pay full price for it at a drug store.

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.

The best worker recognition practices are often the simplest.  

Here’s one that’s recently been adopted at the publishing company where I work –  a progam called “See something good, say something good.”  It’s a way for workers to bring positive attention to things that their coworkers, managers and the company’s different departments do well.

How it works –  the business provides colorful index cards, placing them conspicuously in several commonly traveled areas in the building. When workers and supervisors want to publically recognize someone else’s efforts, they are able to grab a card and fill it out. It takes very little time.

When the index card is filled out, the worker drops it into a wrapped box (there are two in the building). the boxes are later gathered and the cards displayed in a room the corporation uses periodically for meetings, presentations and quarterly worker appreciation events.

In order to build awareness and participation in “Say Something Good,” management put up fliers around the building, so people  from every department can see them, in addition to visitors and job applicants who’ve come in for interviews.

The program, which was originally thought up by the head of our product marketing and advertising division, doesn’t cost anything apart from the cost of the index cards and paper. There’s minimal administration time, and it takes employees only a moment or two to fill out a card on a fellow employee’s behalf.

But the return is a lot of, and the recognition possibilities are endless. It’s a good way to increase morale, encourage productivity and differentiate the company culture from work environments where the negative things seem to get the lion’s share of the attention.

When it comes to wellness programs, it can be tough to get past all the hype. Here’s how to avoid the three most common traps companys fall into.

Trap #1. the “one-size-fits-all” approach

For good reason, your organization doesn’t simply copy other firms’ 401(k) plans or compensation designs. Yet, all too often, firms adopt ill-fitting wellness programs based on things that have worked elsewhere.

Your CFO might have seen data on the cost savings other businesss have achieved via certain wellness incentives. Or an old coworker of your CEO swears by the program at his or her own firm.

In response, the top brass pushes for a copycat program – for instance, offering tobacco use cessation incentives.

That may  be a good idea, if tobacco-related illnesses are a key driver of your company’s health costs. But how can you be sure? is it good enough to have your staff members undergo a health risk (assessment|appraisal}?

Generally, the answer is no.

Health risk (assessment|appraisal}s are a great starting place, but it’s often a mistake to stop there. the assessments help you get a feel for what your employees’ baseline physical problems are before you attempt to design a program around them.

This creates rough outlines of what your program objectives ought to be and where to target worker initiatives. When you want the maximum bang for your wellness buck, you’ll have to dig a little deeper for information. Key places to look –

• your organization’s medical-claims breakdown for the last three years

• prescription-drug claims

• worker absence information

• employee assistance program (EAP) use

• disability claims, and

• worker demographics (workers’ ethnic, gender, age and dependent coverage status points to greater – and lesser – health risks associated with each category).

Trap #2. Leaving the program on autopilot

A lot of wellness programs often get off to a good start and then fizzle out. Businesss are left wondering what went wrong. Their mistake –  They failed to revisit the program on an ongoing basis – at least every other year.

Why it’s crucial –  Your cost-drivers can easily shift as workers come and go from the company.

Example –  This year, emphysema and other use of tobacco diseases could  be your largest cost driver. But two years from now, it could be obesity and diabetes.

Unless you continuously track the program and adjust your goals as necessary, you might not be prepared to meet those new challenges.

Trap #3. Unrealistic expectations

Generally, it takes at least a year and a half for corporations to break even on the cost of a wellness program. as a rule of thumb, the average program cost per staff member per month to the corporation is about $3 to $5.

When, after three years, you still aren’t seeing results, something went wrong. Currently, the benchmark ROI after the third year of a wellness program is $4 to $5 saved for every dollar spent.

How can you manage the cost in the short-term? In many cases, companys pass the cost of the wellness program on to the staff members. for  instance, let’s say you want to roll out a wellness program effective January 1 (or whatever your first day is of the new plan year).

You can roll that $3 to $5 per worker per month cost directly into the employee’s monthly share of their healthcare premium. That makes the wellness program a budget-neutral expense for your organization.

But remember –  You get what you pay for – both in time and money invested. the less guesswork that’s involved in the planning and execution, the better the chance for success.

Variable compensation could be a excellent way to satisfy demand for higher pay while addressing  senior level management’s need to improve productivity and keep base salaries under control.

But there are some major pitfalls.  Here are two proven ways to avoid the most common legal and return on investment risks.

Non-exempt employees

Beware if you use variable comp as a pay-for-performance strategy for hourly workers. Reason –  It’s easy to inadvertently run afoul of the Fair Labor Standards Act (FLSA) overtime rules.

Under FLSA, you must recalculate employees’ hourly wages to include all variable pay (like individual or departmental bonuses) when figuring overtime compensation.

Failure to do so could cost your organization more in penalties and back-wage payments than the variable comp plan saved on the front end.

So it’s a good idea to double-check with Payroll to be sure the department knows to make OT adjustments after hourly staff members receive bonuses.

Reward the right things

In order to make the criteria for bonuses easier for employees to understand and management to measure, many firms prefer using strictly objective measurements. Example –  the plan may pay out based on how much money employees save their department in a year.

But what happens if workers cut corners – on safety, service, quality, etc. – to reach the goal?

At some firms, staff members are still rewarded with extra pay, even though their actions potentially did more harm than good to the bottom line. for best results –

• set behavioral criteria for bonuses as well as economic ones, and

• consider using a mix of firm-wide, departmental and individual economic performance measures.