With the downturn in the economy, it seems like most companies are shifting their focus when it comes to worker benefits and compensation.  The current situation is also very stressful on benefits managers.

In times like these, it’s vital for coworkers to share their concerns, experiences suggestions. A few 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 workers, 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’ organizations during the current situation. Especially –

• 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 company trying to calm employees’ fears about salary freezes or layoffs, 401(k) losses, health 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. Everyone benefits in the long run.

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

Nearly 80 percent of corporations provide staff access to flu shots, either onsite or at a local clinic.  And 72 percent cover some or all of the cost (typically compensating between $10 to $20). But –

• At 89 percent of firms, fewer than half of personnel actually get a flu shot

• At 38% of businesses, fewer than 25% of staff members participate

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

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

• 75% never tracked whether personnel who get flu shots are actually absent less often.

The firms that get best results are those that actively educate workforce, track flu-related absenteeism and send sick workforce 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 reported 69 percent jump in staff member employee assistance program use related to personal financial concerns.  The trend is not 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% of respondents said they were “one major setback away from financial disaster”

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

• 40 percent say their employer 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 EAP use arises from concerns over debt management, household refinancing and/or failed investments.

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

A recent survey found the typical worker has three unused vacation days at the end of the year. But 33 percent 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 one of the highest “presentee” days among companies (specifically in the white-collar realm) that remain open on those days.

In terms of the broader question of presenteeism, what’s keeping individuals  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, USA employees receive the fewest yearly vacation days – 14 on average.

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

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

Low participation rates

The ASA research study  focused on personnel knowledge of their company’s pre-tax benefits. While nearly three quarters of personnel 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 business offered a health savings account or health reimbursement arrangement (46% of those conscious of the benefit still don’t participate), and

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

Compliance with health insurance portability and accountability act (HIPAA) non-discrimination rules is a big challenge for wellness 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 is 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 fitness center membership

• financial rewards for undergoing health risk assessments so long as the reward is based on participation rather than test results

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

• reimbursing workforce for the cost of use of tobacco-cessation programs without regard to the result, and

• offering rewards tied to staff 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 – Workers who achieve a cholesterol count under 200 get a 20 percent reduction in the cost of their health plan contributions pending results of an annual cholesterol test.

The feds say it’s OK under health insurance portability and accountability act (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, when you allow dependents to participate, employee-plus-dependent) coverage under your health plan.

• The standards should 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 negatively single out certain staff members (e.g., rewards for all non-diabetics).

• Participants must have the opportunity to qualify for the reward at least once a 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-paid weight management program available to certain staff but not others.

When, for medical reasons, it’s unreasonably challenging for an individual to satisfy conditions that are otherwise reasonable, you must offer an alternative. Example –  A pregnant staff member may not be able to meet certain standards, so you must offer her an alternative.

Negative incentives violate health insurance portability and accountability act (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 employers 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 – Businesss’ heath plans can’t deny benefits for treatment of injuries resulting from a health condition, even when the condition wasn’t diagnosed before the injury.

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

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

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

• Retain for two years staff member 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 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 like 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 corporations attempt 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, hence, 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 staff member over a few small-value gift cards for which you withheld no taxes. But they could, in particular 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 generally require about $5.55 withheld.

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

Read the fine print

Gift cards can be money-wasters or or morale-killers when workers 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 companys with as few as 200 employees to explore self-insurance. But beware of hidden traps.

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

1. Unfavorable staff member mix

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

Be aware that stop-loss insurance carriers often “laser” those employees considered higher risk. Lasering means that your business would have to pay out much more in claims for these employees 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 options, ask –

• Will the vendor’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.

Bottom line –  You ought to 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 could be compensating for coverage you don’t need and can never use.

It’s also key to make 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 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 and 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 employees with uncomplicated lower back pain, namely for individuals  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 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 kinds of chronic pain, namely tension headaches and muscle pain.

Just 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.