MetLife Retirement & Savings
MetLife Retirement & Savings announced that it has added Morningstar Learning Station as a source of online educational content on their participant´s website for MetLife´s 401K. With the addition of the online learning station, MetLife Retirement & Savings now offers participants retirement planning education at every level. All of the investment tools and the interactive calculators of the Morningstar learning station are designed to make it easy for the plan participants to pick topics that are most relevant for their retirement savings. These tools can help participants understand the implications of the compounding risk and return and other similar concepts. There is an extensive library of materials from the Morningstar group that covers all sorts of topics, such as the basics of retirement plans, the fundamentals of retirement plans, establishing financial goals, setting a personal investment strategy, distribution planning, and many more items including suggestions for dealing with major life events.
CCH Incorporated
CCH provides healthcare information and software. They published their 2005 Master Medicare Guide at the beginning of March. It´s their first annual edition of a single-volume convenient reference guide on a complete range of issues for Medicare providers and for people who need quick authoritative answers to Medicare questions. It´s about 800 pages, and it runs about $120. The topics covered in the guide include Medicare Part A, Part B, Part C and Part D coverage, financing and administration, provider agreements, exclusion from coverage, and Medicare reimbursements, appeals, compliance, and cost reports. There are four appendices, and they cover final rules, provider specific index, abbreviations and a cross-reference between the Social Security Act and the U.S. Code. There are footnotes that provide accurate and legally sound guidance. The aim is for readers to understand how to apply and comply with today´s complex reimbursement rules. It includes time saving features such as a quick-facts card that covers demographic figures related to the Medicare program. A 2004 year-in-review has examples, tips and best practices. It was put together for fulltime Medicare users, but the guide can also be used to train newcomers for reimbursement and other people who occasionally need fast answers to their Medicare questions such as CEOs, CFOs, the billing department and libraries. To find it, you can visit the CCH website at www.health.cch.com/onlinestore.
SHRM
SHRM has released their fabulous 2005 HR Technology Survey Report, and you should go to their site and get it. They provide data that can be very helpful to you in terms of what other HR departments are doing and how to learn from them. The most important thing that this survey reveals is that implementation of HR technology systems does not necessarily mean a decrease in HR headcount. In fact, in most cases the survey found that the headcount remained the same or even increased since the implementation of the HR technology system. The primary reason for an increase in headcount was that the company had grown. They also found that the most frequent HR programs and activities supported by HR technology systems are basic employee demographics and employee information, payroll, HR reporting, benefits administration and an employee directory. About 2/5 of HR professionals indicated that employee self-services were provided in the HR technology system for their organizations. Less than 1/3 of responding HR professionals indicated manager self-service is provided in the technology systems that their organizations are currently using. In terms of success, the survey found that slightly less than 1/3 of the respondents said that system has been extremely successful, while more than 2/3 indicated that they have been somewhat successful. The top five successes are accuracy of employee information has increased, cycle time for processing employee transactions has decreased, HR staff spend less time on administrative work, managers have greater access to employee information and the HR department is able to manage the workforce with the same number of HR staff. Interestingly, the five most popular challenges that HR professionals face include HR professionals not spending less time on administrative work, recruiting effectiveness hasn´t improved, HR staff members haven´t been able to spend more time on strategic resource planning and leading the organization, managers do not have greater access to employee information and employee satisfaction hasn´t increased. The top three challenges to implementing HR technology systems include budget funding approval, resistance to change and the infrastructure not being ready. Two-thirds of respondents in the survey indicated that their organizations are not measuring the return on investment for HR technology systems. Not counting those who weren´t measuring the ROI, more than 2/3 said that ROI for HR technology systems is measured by determining cost savings and losses.
Changes in HR headcount since implementing HR technology systems
In a SHRM survey, 41% said that headcount increased, 41% said that headcount decreased and 19% say it remained the same. They also noted that the types of systems that are used in collecting and maintaining employee numbers are licensed software with just over 60% that is the most popular one. A little more than 50% in Desktop office software and just below 20% is externally hosted software. Below that is Web Portal and Internally Developed Systems.
Workplace Health and Well-Being
Speakers at the 2005 Workplace Health and Well-Being Conference last month presented evidence that employee health equaled employer financial health. Watson Wyatt National Group pointed out that many health improvement programs have approved ROI to direct medical costs to between 12 and 18 months, ranging from $3 to $10 each dollar invested. Large organizations with High Performance Work Systems, which include healthy workplace factors such as sharing information, role clarity and work/life balance programs, have a 12% higher share price than other companies in the S&P 500 and they generate $3,800 more profit per employee.
The results of a psychological stress disability management project at Magna International were especially interesting. They found that from January to December 2003, the average period of absence for psychological or stress claims in the pilot groups was 56.54 days with a cost per claim of about $5000. Follow-up data for the period April 2004 to February 2005 revealed that the average numbers were cut in half. The claim duration average was 28.5 days, and the average cost per claim was $2646.
Mellon and Californiachoice
Mellon Financial Corporation´s Human Resource and Investors solutions business and Californiachoice have announced an alliance over the past month to provide health savings and account products to Californian consumers through the Californiachoice website, www.calchoice.com. The integrated HSA product includes financial services provided by Mellon such as Interest Barring FDIC insured Custodial Account with checking and debit cards for participants to pay for qualified medical expenses. Participants will have an opportunity to open an Associated Dreyfus investment account when the HSA balance reaches a minimum threshold. The Mellon Californiachoice HSA will also offer claims administration, customer service, online tools, employee education and enrolment. The Mellon head of the HRIS business said that HSA will be a powerful new approach to address spiraling healthcare costs.
Health Savings Accounts (HSAs)
HSAs were authorized by the Medicare Prescription Drug, Improvement and Modernization Act in 2003. They are portable health savings accounts that consumers can use to pay for qualified medical expenses. The accounts are offered in conjunction with a high deductible health plan that provides security against catastrophic medical costs. Both employers and employees can contribute to HSAs. Currently, it´s up to $5,250 for a family and up to $2,650 for an individual. For employees, the pre-tax contributions will reduce their income taxes while allowing them to set aside additional money for health expenses. With a minimum balance, employees can open a separate investment account, providing an additional opportunity to prepare for their healthcare security. Unused HSA balances can be carried forward from year-to-year, rolled over if the individual changes jobs and can be used for post-retirement health expenses.
The Safe Harbor 401(k) Plan
For some companies, employee benefit and retirement plans can be a major headache. There are confusing regulations, and they have been hampering companies with a ridiculous amount of highly compensated employees as many of these high income earners have been limited in their ability to defer their income for their retirement savings. Fortunately, small companies can find solace in the Safe Harbor 401(k) Plan. A Safe Harbor plan is the same as the traditional 401(k) plan with one major difference. Companies are required to make minimum matching contributions that are immediately vested to all eligible employees. Safe Harbor plans are an effective option for companies wanting to allow highly compensated employees to make maximum contributions while still complying with ADP (actual deferred percentage) and ACP (actual contributed percentage) regulations. But a Safe Harbor plan isn´t for every company. Although they offer excellent benefits to highly compensated employees, they require employers to make financial commitments that may be in excess of current obligations. Owners and HR professionals should first understand the risks and the rewards of a Safe Harbor 401(k) plan before implementing one.
Bankruptcy Bill and Wage Garnishment
The U.S. House is on the brink of supporting the Bankruptcy Bill passed by the Senate. It will likely increase the number of wage garnishments in the country. The Bankruptcy Bill may result in more wage garnishments and more wage garnishments may result in workplace violence. This means that HR might have to beef up their workplace violence prevention kills including risk analysis and counter aggression measures. There are two areas of an employee´s life that not many HR executives want to interfere with: the first is an employee´s family, and the second is an employee´s money. When an employee´s wages are garnished it is often the result of marital collapse, which covers both family and money. It could have violent results. There are many workplace violence intervention companies out there, if you need assistance.
Medicare Update
Employee based retiree healthcare has been a major source of drug coverage for many beneficiaries. Over the past several years, the availability and generosity of employment based retiree healthcare has been in continuous erosion, particularly for future retirees. As prescription drug costs have risen, employers have shifted more of the cost to their retirees. Many employers have stopped offering retiree healthcare coverage all together due to healthcare costs and other issues. Congress was aware of the healthcare trends have created options that are directly related to stop the erosion of healthcare across the country. Under the MMA, there are many different forms of assistance that the plan sponsor can take and all options give substantial support. Many beneficiaries like the coverage they currently have because of its familiarity. In addition to offering prescription drug coverage, employers will receive financial support for continuing to pay for health costs for their retirees.
An employer or union sponsor with coverage that is at least as good as Medicare´s Part D defined standard prescription drug benefit can receive a tax-free retiree drug subsidy that pays 28% of allowable retiree drug costs (as defined by the regulations) between $250 and $5,000 in 2006. This subsidy only applies to retirees eligible for but not enrolled in a Medicare Prescription Drug Plan or Medicare Advantage Plan, such as an HMO or PPO. Employers must provide their Medicare eligible and retirees with a notice informing them if their drug coverage is credible or not by November 15, 2005. CMS is currently developing mandatory language that can be used by employers. This information will be available soon on the CMS website.
Employers who do not wish to apply for the subsidy have alternative options. They can provide supplemental coverage through a stand-alone plan. They can purchase enhanced coverage from a PDP or MA-PD to supplement standard part D benefits. They can become a PDP or MA-PD and provide customized coverage or purchase coverage from a PDP or MA-PD through the waiver process. They can also pay part or all of their retirees´ premiums.
For more information:
Access form to submit a question: http://mmaissuesform.cms.hhs.gov
MMA questions/issues:http://www.cms.hhs.gov/medicarereform/drugcoveragefaqs.asp
Employer/Union Issues: http://www.cms.hhs.gov/medicarereform/pdbma/employer.asp
CMS-Employer-PDBMA-PD listserv: http://www.cms.hhs.gov/mailinglists/default.asp?audience=15
Genworth Financial recently released a groundbreaking 30-year retrospective of long-term care. The study suggests that barring a medical breakthrough, Alzheimer´s disease and other forms of dementia threaten to bankrupt the US healthcare system due to their astronomically high cost. Consider the following statistics, the cost of claims for individuals suffering from the disease and other forms of dementia has grown to nearly 40 cents for every dollar paid out to healthcare providers. An estimated 4.5 million Americans have Alzheimer´s disease. The average annual cost of long-term care was $72,240 in 2004.
Workplace Morals
A recent psychiatric survey found that 46% of unfaithful wives and 52% of unfaithful husbands over the last two decades had affairs with someone at work. The board of directors at Boeing thought that their CEO´s interoffice affair would have eventually watered down the company code of conduct so they ousted him. According to ethical leadership coaches Bob and Lyn Turknett there is a new preoccupation in the country with workplace morals. It comes from a retro business idea that is enjoying a comeback. That is, to be a great business leader, you need great character. And to have great character, you need to worry about the details. Whether you are a team member or you run the whole company, your hidden affair on the job sends a message, consciously or not, to co-workers. It says that it´s okay to cheat a little under certain circumstances. The Turknetts say that tiny indiscretions have a negative ripple effect in companies. The Turknetts are co-founders of the Atlanta based Turknett Leadership Group. They are organizational and executive developers who specialize in ethical business practices. They are also co-authors of Decent People, Decent Company: How to Lead with Character at Work and in Life. You can find out more about them at www.Turknett.com.
Workstream Software-as-Service
The enterprise at workforce management software services vendor has introduced dollar per employee per month pricing for it´s new talent center offering. It´s called TalentCenter One, and it offers an entire on-demand talent centered workforce product suite that includes benefits, performance management, and compensation and rewards products. This software service model has shaken up the HR technology industry. It´s really bringing unprecedented value to organizations. Companies can derive immediate benefits from FAS and from Workstreams´ broad suite on-demand HR software. It gives them more choice and control over how they purchase and leverage HR application solutions. Workstream´s TalentCenter One includes a minimum 3-year investment commitment. They are focusing on growing Fortune 2000 organizations with more than 10,000 employees. The terms include configuration and hosting at preferred pricing and full migration and integration services that are available from existing PeopleSoft and other major ERP. Workstream is also starting an incentive program for PeopleSoft customers to convert to TalentCenter. They´d have to wait to see if the products that the companies are currently using will be available after the Oracle acquisition has settled down.
Overwork Study
There is a recent Overwork Study that has been released. In 2001, Families and Work Institute conducted a seminal study to define and measure the impact of being overworked employees and employers. The study revealed that one out of three US employees experienced feeling overworked as a chronic condition. The goal in conducting the 2004 study was to better identify how the ways we work today, how we prioritize our lives on and off the job are related to being overworked. They decided it was time to explore in greater depth the relationship between vacations and being overworked. Work demands continue to escalate and many Americans have too much work to do. The study found that the very skills that are fundamental to succeed in this global economy, like moving quickly from task to task with little time for recovery in between, they see many interruptions and work outside of normal work hours, including vacations. This can be useful but also can become very detrimental. For a significant group of Americans, the way that we work today appears to be negatively affecting our health and effectiveness at work. More overworked employees are more likely to make mistakes at work, they are more likely to feel angry with their employers for wanting them to do so much. And they are more likely to resent co-workers who they feel don´t work as hard as they do. They also found that overworked employees are more likely to have higher levels of stress, they have more symptoms of clinical depression, more likely to report that their health is poor and they neglect taking care of themselves. In terms of vacation, more than 1/3 of employees don´t plan to use their full vacation, or if they do use their full vacation, they plan to work during part of it.
HR Media Superstars
According to a recent report, companies receiving the most attention in the human resource industry included Accenture, Aon, Ceridian, Hewitt Associates, Mellon Financial Group, MetLife, Recruitmax and PeopleSoft. (Full list available at http://biz.yahoo.com/prnews/050324/sfth053_4.html)
EAP and Work/Life White Paper
There is a new Harris Rothenberg white paper entitled "Getting Your Money´s Worth Out of EAP and Work/Life Programs". Harris Rothenberg is a consulting firm and a global provider of EAP and Work/Life Programs. While most companies are familiar with employee assistance programs and work/life programs and how they help employees, most executives aren´t as familiar with how the programs can help businesses solve everyday business challenges. This white paper focuses on the employer rather than the employee and how to maximize the EAP and Work/Life programs in the organization.
The most important goal of an EAP and Work/Life Program is to help the employer solve real business problems and to give the managers the tools and interpersonal skills they need to become better managers. The white paper is free at
www.harrisrothenberg.com/whitepaper_form.php. You can also sign up at their site to join a free teleconference call to discuss the white paper and strategies for maximizing the value of EAP and Work/Life programs.
LifeCare Partners with Bertram Educational Consultants
LifeCare Inc. has announced that it is partnering with Bertram Educational Consultants to provide expanded counseling and support services to students and their families in LifeCare´s 1500 client organizations. This is effective immediately. The partnership will serve students making decisions regarding junior and secondary boarding schools and colleges, including average, gifted and talented students, underachievers and those with special needs. LifeCare currently provides 24/7 counseling, education and personalized referrals to students among its client base. The partnership with Bertram Educational Consultants will allow LifeCare to better serve the evolving and increasingly complex needs of students seeking to choose the school or college that will best match their own needs and realize their full academic potential. Bertram Educational Consultants serves as an unbiased student advocate, helping them make informed decisions and navigate the challenges of today´s educational system. This is a pretty good move considering that today´s educational system is far more complex, competitive and costly than it was a few years ago. LifeCare has seen a 25% increase in these kinds of cases or requests just in the past year.
Boston Consulting Group
Recently, the Boston Consulting Group conducted its second annual global survey of senior executives on Innovation and the Innovation to cash process. A total of 940 executives representing 68 countries and all kinds of industries participated. Some of the key findings were that 74% of executives surveyed said that their companies will increase spending on innovation in 2005. That´s up from 64% in 2004. Almost 90% of the executives surveyed said generating organic growth through innovation has become essential for success in their industry. However, less than half of the executives said that they were satisfied with the financial returns on their investments in innovation. Executives also ranked Apple, 3M, GE, Microsoft and Sony as the most innovative companies. Apple was number five last year. Another key finding was that globalization and organizational issues were sighted as two of the biggest challenges facing many companies this year. Internal or organizational issues about innovation remain the key concern for executives, regardless of where they are in the world, and for most of them the key issue is alignment. It´s having the entire organization on the same page in objectives, tactics and ultimately commitment.
What can company leaders do? Managers can start by looking hard at three key areas. While focusing on these areas won´t change things overnight, it can start to move things ahead rapidly. More over these things are in the leaders control. The three things are
1) The people you have. Alignment requires people who both understand the importance of working together and have the skills to do so.
2) The environment that you create. The study suggests that you ask yourself how much time you spent in your last operations review of innovation. The loudest message that an executive can send is how to spend their time.
3) The measures and rewards you use. What matters in your organization hitting your numbers and what else, if anything, gets measured regularly. Getting your numbers for most companies isn´t enough. You need other items to be measured. Get started on tracking. All three points sound simple, but they are difficult to execute and practice.
Why isn´t your organization aligned? Truly aligning the company is for many organizations the single most powerful lever that they have to increase their return on innovation.
Mercer Human Resource Consulting
Mercer Human Resource Consulting has once again been ranked as the largest employee benefit consultant in the world, according to a new survey by Business Insurance Magazine. The annual survey by Business Insurance ranks companies based on their 2004 benefit consulting revenues. The results were published in the magazine´s March 28th issue. It also ranked Mercer as the largest benefit-consulting firm in the US.
Gallup Study
The extent to which employees are engaged at work has a dramatic impact on their physical health and psychological well-being, according to a recent Gallup organization study. Among engaged employees, a clear majority, 62% felt their work lives positively affected their physical health. That number plummets to 49% among the non-engaged employees and 22% among the actively disengaged employees. More alarming is that a majority of actively disengaged employees (54%) think that their work lives are having a negative effect on their physical health. Thirty percent of non-engaged and just 12% of engaged employees say the same thing. The three types of employees are defined as follows:
1) The engaged employees work with passion and feel a profound connection to their company. They drive innovation and move the organization forward.
2) Not-engaged employees are essentially "checked out". They are sleepwalking through their workday, putting time - but not energy or passion - into their work.
3) The actively disengaged employees aren´t just unhappy at work, they´re busy acting out their unhappiness. Every day, these workers undermine what their engaged co-workers are trying to accomplish.
OnlineBenefits Launches the Real Value Statement
OnlineBenefits Inc, a provider of internet-based HR solutions, has announced the release of their Real Value Statement. It gives employers of all sizes a new way to create and publish web based total compensation statements. The Real Value statement is a personalized document that aggregates cash compensation, benefits contributions and tax savings for each employee. This new application takes the complexity and high cost out of total compensation statements. Apparently OnlineBenefits set out to make the Real Value Statement affordable so that all of their clients, large and small, can take advantage of it. In most cases, their clients can distribute a statement both online and in print for less than $5 per employee per year. According to the U.S. Chamber of Commerce, benefit costs average 39% of total compensation. But employees need to know that, and this is one system that can help get that information out there.
Ceridian, Allstate, Deloitte, IBM, Pricewaterhouse Coopers, & Texas Instruments
Ceridian has created a new back-up care locator to help employees gain instant access to more than 20,000 names, and the contact information for alternative caregiver resources nationwide. Allstate, Deloitte, IBM, Pricewaterhouse Coopers, and Texas Instruments, as members of the American Business Collaboration (ABC), funded the development of this new program and made it available to their employees April 6th. ABC and Ceridian collaborated with the Family and Workplace Connection to identify childcare providers and elder care services with the capacity to deliver back-up care givers. The back-up care locator is national in scope and includes caregiver resources for children and elders. Using this back-up care locator, employees can search for back-up caregivers in their communities. The service gives a wide array of childcare resources including childcare centers, childcare providers, facilities that care for mildly ill children, in-home care agencies for children and elders, adult daycare and assisted living facilities and off-hour providers for weekends and evenings. Ceridian, which provides employee effectiveness services for companies, including elder care management services, will make the database of back up caregivers available to all EAP and Work/Life services customers at the end of an introductory pilot period for the funding companies.
Simple Cafeteria Plans for Small Businesses
Three U.S. Senators co-sponsored a Bill recently that would amend the tax codes so that more business employees would be able to purchase employer provider health insurance with tax dollars. This legislation called the Simple Cafeteria Plan 2005 would create a cafeteria plan for small businesses that would be modeled after the Savings Incentive Match Plan for Employees (SIMPLE). This would loosen the rules that allow employers to deduct health insurance expenses provided to employees through a cafeteria plan. While simple cafeteria plans are already available for small businesses through services like Freedom Benefits Association, current cafeteria laws must follow non-discrimination rules. The proposed law would eliminate the current non-discrimination requirements of cafeteria benefit plans, in order to make it easier for employers to move themselves into benefit plans without providing the same level of benefits to the majority of other employees. Although the intent of making health insurance easier for small businesses is a great idea, they say this proposal is unlikely to be passed because it opposes fundamental tax policies designed to protect employees. The proposed Bill would raise the risk that health plans would favor owners and key employees without having any net effect on the taxation of health insurance for small businesses. Health insurance for employees is already a fully deductible for all businesses regardless of whether it´s provided through a formal benefit plan or on an informal selective basis. Small business owners, self-employed individuals and partners now deduct the full cost of health insurance on their individual tax returns, so there is no need to further amend tax laws for health insurance.
Nuvosoft Rcomp 3.0
Nuvosoft is a web-based compensation planning company. They recently announced a major upgrade to their product Rcomp, which is a secured, automated online compensation-planning product. The product now supports HR rules for more complex incentive plans and offers a new executive dashboard and fully integrated reporting tools to offer compensation in managers with real time insight into the planning process. The new features raise a company´s ability for compensation as a strategic process that drives better corporate decision-making. It includes, new information at the managers fingertips, great graphical interface, reports and what-if scenarios, financial performance measures, tie financial results to plans, automatically assign incentive plans to employees and flag employees on leave of absences, etc. Rcomp 3.0 is priced at around $85,000.
HR.com Employers of Excellence Conference 2005
It´s on September 25-27, and it´s at the Pointe South Mountain Resort in Phoenix, Arizona. We will have different streams going on for the two-and-a-half day conference, and we are of course putting together a benefits stream, which is almost finalized. Check out www.hr.com for more information.