HR Focus Issue 75 September 2013


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HR Focus Issue 75 September 2013

  1. 1. HUMAN CAPITAL PRACTICE HRFocus September 2013 — Issue 75 HEALTH OUTCOMES THE CUTTING EDGE OF CORPORATE WELLNESS Companies of all sizes are turning to worksite wellness programs to boost their bottom lines and the well-being of their employees. When properly implemented, these programs can drive down health care costs, reduce sick days and establish a healthier, happier, more energetic workforce. TotalWellness has recently identified trailblazing trends in corporate wellness and below are a number of cutting-edge innovations you can implement to help strengthen your organization’s worksite wellness program. WELLNESS COACHING provides an efficient and effective way to connect with employees one-on-one. Wellness coaches can offer encouragement and create customized wellness solutions for individual employees, providing better results than general, onesize-fits-all programs. Tailored programs can spur engagement, increase long-term success and drive meaningful (and measurable) benefits for employers and employees. Of the 9,918 employees surveyed by Virgin HealthMiles and Workforce Management magazine, over half reported they would be interested in meeting with a wellness coach in order to improve their overall health and wellbeing. TECHNOLOGY is, not surprisingly, another trend to watch, as mobile devices and social media flood the workplace. Smartphones can serve as pocket-sized, personal trainers, as they are now capable of monitoring vital signs during exercise and tracking sleep patterns at night. There’s an app for just about everything, from nutrition and fitness to mental health, and most apps are free! Social media can be employed to create an environment of community support through internal social networks, encouraging employee engagement and program participation. INCORPORATE PHYSICAL ACTIVITY DURING THE WORKDAY. Unique and innovative techniques – from walking meetings to treadmill workstations – reflect a company’s creative spirit. Some firms continued on page 2 health outcomes The Cutting Edge of Corporate Wellness . . . . . . . . . . . . . . . . . . . . . . . . 1 legal & compliance Massachusetts Repeals Fair Share Contribution Requirement . . . . . . . . . 2 San Francisco Releases 2014 Employer Expenditure Rates. . . . . . . . . . . . . . . . 3 Since You Asked: Health Care Reform And Excessive Waiting Periods . . . . . 4 hR coRneR Don’t Ignore Facilities When Addressing Productivity: Five Strategies to Consider . . . . . . . . . . . . 5 Generational Differences in Tech Use Prompts Reassessment of Work Practices . . . . . . . . . . . . . . . . . . . . . . . 7 WeBcasts . . . . . . . . . . . . . . . . . . . . . 8 contacts . . . . . . . . . . . . . . . . . . . . . 10
  2. 2. Health Outcomes– continued from page 1 have done away with traditional boardroom meetings and instead, lace up their sneakers and get outside for “walking meetings.” Walking meetings not only energize the workday with exercise, but can also enhance brainstorming, creative discussion and problem solving. BACKGROUND REDESIGNING WORKSPACES is another approach to physical wellbeing on the job: exercise balls instead of chairs, treadmill workstations, wobble boards and even anti-fatigue mats to stand on while working. Whether making small adjustments or drastic changes, these innovations in workday wellness show employees that health and wellness are company priorities. n INCENTIVE PROGRAMS, while not new, consistently prove to be one of the most effective employee motivators. Virgin HealthMiles and Workforce Management magazine found that 60% of surveyed employees participate in corporate wellness programs specifically to collect the incentives offered. Monetary incentives can stimulate short-term health behavior changes and are a simple way to increase employee participation in health risk assessments, preventative care and immunizations. Organizations should consider their employee population when creating incentive programs and tailor the incentives to suit their employee preferences in order to get the most out of them. Incorporating any of these innovations in your business can help create and maintain a culture of wellness. Connect with your Willis Health Outcomes Consultant to learn more and to strategize on a well-rounded initiative that will best engage your unique workforce. Make the cutting edge of wellness the norm at your organization! LEGAL & COMPLIANCE MASSACHUSETTS REPEALS FAIR SHARE CONTRIBUTION REQUIREMENT The 2014 fiscal year budget bill that Massachusetts Governor Deval Patrick (D) signed on July 12, 2013 repealed the “fair share” contribution requirements under the Massachusetts Health Care Reform Act (HCRA). The budget bill also repealed the requirement for employers to collect and retain Health Insurance Responsibility Disclosure (HIRD) forms from each employee who declines to enroll in the employer’s health plan or who declines to use the employer’s cafeteria plan to purchase insurance on a pre-tax basis. 2 Enacted in 2006, the HCRA imposed several requirements on Massachusetts employers: n n A “fair share” contribution (FSC) requirement A “free rider” surcharge/cafeteria plan requirement Collection of HIRD forms from employees declining health coverage, and health insurance disclosure filings using employer HIRD forms These mandates generally applied to employers having 11 or more full-time equivalent (FTE) employees performing services in Massachusetts (although legislation signed in 2012 was to increase, effective July 1, 2013, the employer threshold to 21 FTE employees for purposes of the FSC requirement). An employer with 5,500 or more quarterly payroll hours is considered to have 11 or more FTE employees. Under the FSC requirement, Massachusetts employers were required to either make a “fair and reasonable” contribution toward the cost of employees’ coverage or pay an annual assessment of up to $295 per employee into the Commonwealth Care Trust Fund. The FSC testing (and the payment of any applicable penalty) is done quarterly. Earlier this year, Governor Patrick introduced legislation to repeal the FSC requirement. The bill, proposed in recognition of the employer pay or play mandate under the Patient Protection and Affordable Care Act (PPACA), was intended to reduce the burden on employers of complying with both federal and state requirements. PPACA’s employer mandate is similar to Massachusetts’ FSC requirement. The proposal to repeal the FSC requirement was included in the budget bill and was signed by Governor Patrick even though the IRS had already announced that the pay or play mandate would be delayed from 2014 to 2015. Willis North America • 9/13
  3. 3. EMPLOYER MEDICAL ASSISTANCE CONTRIBUTION Although employers are no longer responsible for the FSC requirements, the budget bill introduces an employer medical assistance contribution (EMAC). The EMAC will replace the Medical Security Trust Fund that is currently funded by employers and is used to fund health insurance for unemployed workers. The EMAC is intended to finance the cost of health care for low-income Massachusetts residents. Each employer who employs more than five employees will be required to contribute an amount equal to wages times .36 of 1% of the same wage base that applies for Massachusetts unemployment taxation purposes. This amount is currently $14,000 and results in an annual assessment of $50.40. Employers who are newly subject to the requirement will contribute a lesser amount – .12 of 1% of wages in the first year and .24 of 1% of wages during the second year. The assessment is effective January 1, 2014 and will be collected through the Massachusetts unemployment tax system. At this time, however, no additional details about the EMAC are available. Guidance is expected in the near future. In addition to the EMAC, there is a new notice requirement. Employers (with 11 or more FTE employees) will need to notify all employees of the employer’s compliance with the HCRA’s cafeteria plan requirement and the opportunity for eligible employees to enroll in the employer’s sponsored health insurance plan or the employer’s cafeteria plan. Additional guidance on this requirement, including a sample notice, is expected. CONCLUSION Please note that only the FSC requirement and the requirement to collect and retain employee HIRD firms were repealed, so employers must continue compliance with the other HCRA requirements (e.g., cafeteria plan requirement). Employers will also need to comply with the FSC requirements through July 1, 2013 (e.g., complete any filings that are due, etc.) since the Department of Unemployment Assistance (DUA) retains the authorization to collect any outstanding FSC payments for obligations arising before July 1, 2013. SAN FRANCISCO RELEASES 2014 EMPLOYER EXPENDITURE RATES San Francisco’s Office of Labor Standards Enforcement (OLSE) recently released the employer health care expenditure rate for 2014, effective January 1, 2014. In 2013, the health expenditure rate for a large employer (100 or more employees) was $2.33 per hour. For 2014, this rate will be $2.44, an increase of $.11 per hour. For medium-sized employers (20-99 employees) the 2013 rate was $1.55; for 2014, the rate will increase to $1.63 per hour. BACKGROUND San Francisco’s Health Care Security Ordinance (HCSO) requires that medium and large businesses make certain minimum contributions toward their San Francisco employees’ health care. Under this mandate, an employer may either contribute at least the minimum amount to a medical plan or other health benefits or pay that amount into the publicly available program established by the HCSO. (See Human Capital’s HR Focus, January 2012, Issue #55, “San Francisco Health Care Ordinance Amended” for additional details on the HCSO’s requirements.) The article on the repeal of Massachusetts’ fair share contribution requirements also published in this issue of HR Focus signals that the Patient Protection and Affordable Care Act may cause other governments which have enacted laws requiring mandated employer health care contributions to reconsider the future feasibility of such laws. 3 Willis North America • 9/13
  4. 4. SINCE YOU ASKED: HEALTH CARE REFORM AND EXCESSIVE WAITING PERIODS The National Legal & Research Group (NLRG) has received many questions about the prohibition on excessive waiting periods under the health care reform law. A frequent question has been whether the employer can continue to offer certain health plan options with waiting periods longer than 90 days if it offers at least one option with a waiting period that does not exceed 90 days. Please note that the delay of the employer pay or play excise taxes until 2015 does not apply to the 90-day waiting period limitation. n A waiting period does not include the time before an employee or dependent enrolls as a late enrollee or special enrollee. Existing HIPAA regulations govern the effective dates of coverage for special enrollment. n The waiting period must not extend beyond 90 days (the plan may not make the coverage effective date later than the 91st day) and all calendar days are counted beginning on the enrollment date, including weekends and holidays. The enrollment date is defined as the first day of the waiting period. n When applying waiting periods to variable-hour employees for whom a specified number of hours worked is a condition for plan eligibility, the proposed regulations explain that “if a group health plan conditions eligibility on an employee regularly having a specified number of hours of service per period (or working full-time), and it cannot be determined that a newly-hired employee is reasonably expected to regularly work that number of hours per period (or work full-time), the plan may take a reasonable period of time to determine whether the employee meets the plan’s eligibility condition, which may include a measurement period of no more than 12 months that begins on any date between the employee’s start date and the first day of the first calendar month following the employee’s start BACKGROUND Under the Patient Protection and Affordable Care Act (PPACA), group health plans may not require a waiting period that exceeds 90 days before coverage is effective for employees and dependents who are otherwise eligible for the plan. The prohibition on excessive waiting periods applies to group health plans and insurers but not to certain “excepted benefits” (e.g., most dental or vision coverage and most health flexible spending accounts). The plan can still have other eligibility requirements, such as being in an eligible job classification or achieving job-related licensure requirements specified in the plan’s terms, unless the condition is designed to avoid compliance with the 90-day waiting period limitation. The 90-day waiting period limit, which applies to both grandfathered and non-grandfathered plans, is effective for plans years beginning on or after January 1, 2014. In March 2013, the federal agencies (Departments of Labor, Health and Human Services and Treasury) responsible for implementing PPACA released proposed regulations addressing the 90-day waiting period limit for group health plans. The proposed regulations generally follow the guidance provided in Internal Revenue Service Notice 2012-59 (issued in August 2012 and addressed in Willis Human Capital Practice Alert, October 2012, “PPACA Determination of Full-Time Employees – Interim Safe Harbor”). Plans may follow either the earlier guidance or the proposed regulations through at least the end of 2014. Highlights of the proposed regulations: n While the regulations prohibit plans from requiring eligible participants and beneficiaries from having to wait more than 90 days for their coverage to become effective, they do not require plan sponsors to offer coverage to any particular employee or class of employees. 4 Willis North America • 9/13
  5. 5. date.” Generally, the eligibility criteria will not be viewed as a means of thwarting the 90-day waiting period limitation so long as coverage for a variable-hour employee is made effective within 13 months of an employee’s start date, plus the time remaining until the first day of the following calendar month if the employee's start date was not the first calendar day of the month. n If a group health plan conditions eligibility on any employee (part-time or full-time) having to complete a number of cumulative hours of service, the eligibility condition is not considered as designed to avoid compliance with the 90-day waiting period limitation if the cumulative hours-ofservice requirement does not exceed 1,200 hours. The waiting period must begin once the new employee satisfies the plan’s cumulative hours-of-service requirement and may not exceed 90 days. The proposed regulations further provide that this provision is intended to be a one-time eligibility requirement. n If an individual is in a waiting period on the date the plan becomes subject to the waiting period limitation, the waiting period can no longer apply to the individual if it would exceed 90 days. CONCLUSION As the prohibition on excessive waiting periods applies to all group health plans, it would not be permissible for an employer to offer any health care options (other than those that are deemed to be excepted benefits) with waiting periods in excess of 90 days. Employers should review their current waiting periods and amend as necessary to ensure that waiting periods for eligible individuals do not extend 90 days beyond the requirement’s effective date. HR CORNER DON’T IGNORE FACILITIES WHEN ADDRESSING PRODUCTIVITY: FIVE STRATEGIES TO CONSIDER Employees are often most productive in workplaces that support collaboration and creativity. Yet, companies typically have focused on facilities costs rather than their potential to support employee performance and results. To optimize business performance, companies should create work environments that support choice, collaboration and flexibility, says professional services and investment management firm Jones Lang LaSalle (JLL). “A typical knowledge-oriented organization spends significantly more on its workers than on its space,” says Bernice Boucher, a member of Jones Lang LaSalle’s global workplace strategy board with responsibility for the Americas. “For these companies, productivity is not about presence—that is, sitting at a desk – it is about performance. The right workplace strategy can help increase shareholder value, achieve business goals, and create a highperformance, cohesive corporate culture.” Corporate real estate executives face growing pressure from senior management to affect the wider business agenda. According to JLL’s Global Corporate Real Estate Trends 2013 5 Willis North America • 9/13
  6. 6. survey, 72% of corporate real estate executives face high expectations to deliver clear enhancement in workplace productivity, and 65% are charged with transforming the quality of the workplace. The JLL workplace strategy team has identified five workplace principles that support increased shareholder value, improved business performance, a cohesive corporate culture, and other corporate objectives: n WORK IS WHAT EMPLOYEES DO, NOT WHERE THEY SIT The focus of work and workplace is no longer about square-footage per person, but about revenue per person. n THINK MEMBERSHIP, NOT OWNERSHIP The traditional one-person-per-desk model does not best serve knowledge workers. The most productive workplaces create non-territorial “neighborhoods” by function. These workplaces provide a wide range of environments, including formal meeting zones, casual brainstorming spots, IT stations, and private spaces, for different kinds of work. n DO MORE WITH LESS The “ownership model” of assigning a seat to every employee is no longer sustainable, given that 50 percent of desks will be vacant on an average day in a typical company. In North America and Europe, for example, job sharing, telecommuting , and virtual meetings have significantly decreased office space usage. Vacancy translates into underutilized real estate and a less-productive environment. n PROVIDE CHOICES TO ENHANCE PRODUCTIVITY Companies must find the right balance between supporting individual and team productivity. When employees have greater control over how and where they work, they are empowered to choose the space that is most productive for the task at hand. With spaces that support quiet or confidential work, as well as virtual or face-to-face collaboration, the workplace can drive cross-pollination of ideas, employee engagement and foster a sense of community. It may sound counter-intuitive, but employees who are given greater autonomy are often more engaged and loyal to an organization, even without personal desks. n FLEXIBLE WORKSPACES TRANSLATE INTO AGILITY In a fast-moving, ever-changing economy, the organizations that can adapt to the market and economic forces succeed, and those that are built on a flexible workspace model have the advantage because their culture is wired for fluidity. People and technology are in the right place at the right time, which drives innovation. continued on page 7 6 Willis North America • 9/13
  7. 7. HR Corner – continued from page 6 “Productivity depends on the ability of a company to get the most out of its employees in line with the organization’s objectives,” notes Boucher. “The right workplace can shape culture, promote collaboration, inspire ideas, respond to trends, improve performance, build retention and grow the bottom line.” This article courtesy of BLR. GENERATIONAL DIFFERENCES IN TECH USE PROMPTS REASSESSMENT OF WORK PRACTICES Generation Y workers, more astute in their technology skills than any prior age group, are forcing employers to reevaluate how they hire, train, and equip current and future workforces. These were the findings of a new study, Generational Research on Technology and its Impact in the Workplace, just released by CompTIA, the nonprofit association for the information technology (IT) industry. “In the next 5 to 10 years, Gen Y will completely dominate the workforce the way that Baby Boomers once did,” says Todd Thibodeaux, president and chief executive officer, CompTIA. “Generation Y has been raised in technology and they consider their aptitude for tech as a value that they bring to the table when seeking a job.” Two-thirds of Gen Y respondents assessed their own technology skills as “cutting edge” or “upper tier.” Similarly, Gen Y’s expectations for tech in the workplace are quite high. Also, “an employer’s tech ‘savvy-ness’ is very high on their checklist on whether to take a job or not,” Thibodeaux noted. Roughly half of survey respondents described their employer as either “cutting edge” or in the “upper tier” in their use of technology. Slightly less (42 percent) put their companies somewhere in the middle of the adoption curve. Three-quarters of Gen Y workers used a smart phone for work purposes in the last year compared with 37 percent of Baby Boomers. Other devices more prevalent among younger workers include tablets, laptops and GPS systems. Gen Y also considers social media a work tool, while Baby Boomers see it as more of a personal tool. “Factors like these may require employers to adapt to Gen Y’s expectations,” Thibodeaux remarked. Adapting to a younger workforce will likely extend into the areas of training. E-learning is especially appealing to Gen Y workers, who want to be autonomous in how they choose to interact with technology, deciding their own pace and not being forced to interrupt normal workflow for training. continued on page 8 7 Willis North America • 9/13
  8. 8. HR Corner – continued from page 7 This hands-on attitude also impacts technical support in the workplace. “They often will try to troubleshoot the problem first on their own end want to brainstorm together with the IT staff,” Thibodeaux noted of Gen Y workers. “That’s different than older workers who want to hand off problem and get it back when it’s finished.” Data for the study is based on a May 2013 online survey of 700 respondents from different age groups and generational cohorts in a variety of industries. The full report is available at no cost to CompTIA members. Visit or contact for details. This article courtesy of BLR. WEBCASTS LET'S GET CLINICAL: LEVERAGING CLINICAL DATA FOR POSITIVE HEALTH OUTCOMES TUESDAY, SEPTEMBER 17, 2013 2:00 PM EASTERN presented by: Lester Morales, Chief Growth Officer. Willis Human Capital Practice “It’s all about the data!” The key to a successful health management program is to understand where exactly you are spending your dollars and have the highest gaps in care. Using data and informatics to design your wellness and health management strategies can create a more effective program with better – and faster – results. In this webcast we will discuss the following items: n n n n n Introduce how claims data can be used to understand present and emerging conditions within the workforce Discuss how to design care management programs that are focused on near term spending for high-risk, chronic patients Introduce how compliance and non-compliance with quality care measures affect cost and overall risk at a population and individual level Discuss how to measure the effectiveness of employer based disease, case, or wellness programs Discuss how a holistic approach to health management should be approached participant access Click here to RSVP for this call. NOTE: Advance RSVP is required to participate in this call. Registration ends one hour prior to the call start time. 8 Willis North America • 9/13
  9. 9. WEBCASTS EFFECTIVELY NAVIGATING THE MEDICAL LEAVE OF ABSENCE MAZE TUESDAY, OCTOBER 15, 2013 2:00 PM EASTERN presented by: Marina A. Galatro, PHR-CA Senior Human Resources Consultant Willis Human Capital Practice Does FMLA drive you crazy? “Chronic” conditions, intermittent leaves, last-minute absences, Monday/Friday leave abuse, using leave time for other reasons, incomplete or vague certifications; it’s enough to make you throw up your hands in frustration. Then there’s ADA to deal with. Is there anything you can do about it? You bet! This webcast will address the common leave issues and best practices strategies for dealing with them. The webcast will focus on how: n n n n Top FMLA strategies Tips to get supervisors on board in administering FMLA leave Answers to tough questions on medical certifications ADA leave facts and influence participant access Click here to RSVP for this call. NOTE: Advance RSVP is required to participate in this call. Registration ends one hour prior to the call start time. 9 Willis North America • 9/13
  10. 10. KEY CONTACTS U.S. HUMAN CAPITAL PRACTICE OFFICE LOCATIONS NEW ENGLAND ATLANTIC Auburn, ME 207 783 2211 Baltimore, MD 410 584 7528 Bangor, ME 207 942 4671 Knoxville, TN 865 588 8101 Boston, MA 617 437 6900 Memphis, TN 901 248 3103 Burlington, VT 802 264 9536 Metro DC 301 581 4262 Hartford, CT 860 756 7365 Nashville, TN 615 872 3716 Manchester, NH 603 627 9583 Norfolk, VA 757 628 2303 Portland, ME 207 553 2131 Reston, VA 703 435 7078 Shelton, CT 203 924 2994 Richmond, VA 804 527 2343 NORTHEAST Rockville, MD 301 692 3025 Buffalo, NY 716 856 1100 SOUTHEAST Morristown, NJ 973 539 1923 Atlanta, GA 404 224 5000 Mt. Laurel, NJ 856 914 4600 Birmingham, AL 205 871 3300 New York, NY 212 915 8802 Norwalk, CT 203 523 0501 Radnor, PA 610 254 7289 Wilmington, DE 302 397 0171 Charlotte, NC 704 344 4856 Gainesville, FL 352 378 2511 Greenville, SC 704 344 4856 Jacksonville, FL 904 562 5552 Marietta, GA 770 425 6700 Miami, FL 305 421 6208 Mobile, AL 251 544 0212 Orlando, FL 407 562 2493 Raleigh, NC 704 344 4856 Savannah, GA 912 239 9047 Tallahassee, FL 850 385 3636 Tampa, FL 813 281 2095 Vero Beach, FL 772 469 2843 MIDWEST Appleton, WI 800 236 3311 Chicago, IL 312 288 7700 312 348 7700 Cleveland, OH 216 861 9100 Columbus, OH 614 326 4722 Detroit, MI 248 539 6600 Grand Rapids, MI 616 957 2020 Willis North America
  11. 11. Milwaukee, WI 262 780 3476 Minneapolis, MN 763 302 7131 763 302 7209 Moline, IL 309 764 9666 Pittsburgh, PA 412 645 8506 Schaumburg, IL 847 517 3469 SOUTH CENTRAL Amarillo, TX 806 376 4761 Austin, TX 512 651 1660 Dallas, TX 972 715 2194 972 715 6272 Denver, CO 303 765 1564 303 773 1373 Houston, TX 713 625 1017 713 625 1082 McAllen, TX 956 682 9423 Mills, WY 307 266 6568 New Orleans, LA 504 581 6151 WESTERN Fresno, CA 559 256 6212 Irvine, CA 949 885 1200 Las Vegas, NV 602 787 6235 602 787 6078 Los Angeles, CA 213 607 6300 Phoenix, AZ 602 787 6235 602 787 6078 Portland, OR 503 274 6224 Rancho/Irvine, CA 562 435 2259 San Diego, CA 858 678 2000 858 678 2132 San Francisco, CA 415 291 1567 San Jose, CA 408 436 7000 Seattle, WA 800 456 1415 The information contained in this publication is not intended to represent legal or tax advice and has been prepared solely for educational purposes. You may wish to consult your attorney or tax adviser regarding issues raised in this publication. Oklahoma City, OK 405 232 0651 Overland Park, KS 913 339 0800 San Antonio, TX 210 979 7470 Wichita, KS 316 263 3211 Willis North America