With the downturn in the economy, it seems like most organizations are shifting their focus when it comes to employee 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. 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 staff members, and people ‘s frustration led to some unfortunate carping back and forth between a few readers.

The purpose of the comments section, apart from giving individuals  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’ businesses during the current situation. In particular –

• 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 is your company attempting to calm employees’ fears about salary freezes or layoffs, 401(k) losses, medical cost shifting and other issues that get a lot of mainstream media focus?

• What are you saying to workers 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.

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

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

• At 89% of firms, fewer than half of workers actually get a flu shot

• At 38 percent of organizations, fewer than 25 percent of staff members 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 staff members, track flu-related absenteeism and send sick staff members 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 announced 69% jump in employee employee assistance program (EAP) use related to personal financial concerns. the trend isn’t all that surprising.

Statistics show that, for the first time since the Excellent 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 employee 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% 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.

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

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 businesses (particularly 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 –

• supervisors frown on workers 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.  employees receive the fewest annually vacation days – 14 on average.

It’s tough to get workers to participate in benefit programs that they don’t even know exist.

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

Low participation rates

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

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

• 17 percent didn’t know their corporation offered a health savings account or health reimbursement arrangement (46 percent of those aware of the benefit still don’t participate), and

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

Compliance with HIPAA non-discrimination rules is a large challenge for health promotion programs. the old rules were unclear about which incentives passed muster.

That’s all changed, with the rules established earlier this year by the DOL and U.S.  Treasury Department. the rules themselves haven’t changed, but they’ve been clarified. Here’s what you need to know –

‘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 HIPAA –

• reimbursing all or a portion of the cost of fitness club membership

• financial rewards for undergoing health risk (assessment|appraisal}s so long as the reward is based on participation rather than test results

• encouraging preventive care by waiving co-pays or deductibles for these services (i.e., well-baby visits or prenatal care)

• reimbursing staff members for the cost of smoking-cessation programs without regard to the result, and

• offering rewards tied to employees attending a monthly health education seminar or working with a wellness Coach.

Conditional rewards OK if…

But what if 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 percent 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 ought to be reasonable (e.g., you can’t limit rewards to folks who can run a marathon). the rewards also can’t be used as a backhanded way to adversely single out certain workers (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 should be available to all “similarly situated person.” In other words, you can’t make a company-paid weight control program available to certain staff members but not others.

If, for medical reasons, it’s unreasonably difficult for an individual to satisfy conditions that are otherwise reasonable, you have to offer an alternative. Example –  A pregnant employee may not be able to meet certain standards, so you have to offer her an alternative.

Negative incentives violate HIPAA

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

The rules prohibit corporations from charging different premiums, contributions, co-pays or deductibles based on personal health factors like obesity or use of tobacco. Notwithstanding, it’s OK to reimburse these expenses based on someone’s participation in your health promotion program, without regard to success.

In addition, the feds have added an important new non-discrimination rule –  Companys’ 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  instance, some health plans have a “suicide exclusion” that denies payment for treating self-inflicted wounds from a suicide try. Now let’s suppose the staff member suffers from clinical depression. Even if the depression was undiagnosed prior to the suicide try, it’s illegal for your plan to deny benefits to this staff member.

Ever set out to organize and dispose of old employee files and paperwork in the office? the job is tougher than it seems.

Best practice –  Develop 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 employee sues or the DOL, IRS or the state audits your records.

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

• Retain for two years employee personnel files, including performance reviews and training.

• Hold these for three years –  wage records, including time cards, base pay and overtime wage-rate calculations and records explaining wage diferentials for workers performing the same job, and hold I-9 forms for three years from hire date or one year after termination, whichever is later.

• Keep these four years –  all Payroll documents, including – home address records, and all wage records, including weekly OT earnings, straight time pay, deductions, bonuses, pay period designations and payment dates.

• Use a five-year retention window for staff member health info like medical and first-aid records from on-the-job injuries, and drug and alcohol testing records.

• Keep this benefits data for six years (or one year after plan termination) –  elections and enrollment forms, benefit change documents, and COBRA notices.

• Retain 401(k) files indefinitely.

A lot of corporations attempt to reward employees 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. Unfortunately, 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 employee over a few small-value gift cards for which you withheld no taxes. But they could, specifically if 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 unpaid 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 may be money-wasters or or morale-killers when staff members have a bad experience attempting to redeem them. Read the fine-print before you purchase. 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 may be used in multiple locations.

The good news –  There are some good deals out there. Corporation 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 businesss with as few as 200 staff members to explore self-insurance. But beware of hidden traps.

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

1. Unfavorable worker mix

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

Be aware that stop-loss insurance carriers often “laser” those staff members considered higher risk. Lasering means that your company 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 reviewing  plan vendors’ 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 staff members.

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

3. Wasteful reinsurance contracts

If the language of your reinsurance contract doesn’t match your health plan’s summary plan description, you may be paying for coverage you don’t need and can never use.

It’s also key to be sure 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 health care 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 further to – not in lieu of – conventional medicine may prove more cost-efficient in the long term.

What the latest research says

Do these five common complimentary treatments belong on your health plan? Here’s what recent research suggests –

1) Chiropractic care. Studies suggest these treatments may help cut absenteeism for employees with uncomplicated lower back pain, especially for people  who’ve had it for less than a month.

2) Acupuncture. Research shows 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 significant research to show this needle-free variation of acupuncture (a therapist applies pressure to specific points on the body) has the same medical benefits.

4) Biofeedback. According to the Mayo Clinic, there’s now some research to suggest this treatment can help with some types of chronic pain, specifically 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 – when any – foot the bill on employees’ behalf.