HRFocus HR CORNER HUMAN CAPITAL PRACTICE. EMPLOYERS HAVE A DIRECT IMPACT ON EMPLOYEE JOB SATISFACTION SAYS NEW SURVEY This article provided by BLR

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1 HR CORNER HUMAN CAPITAL PRACTICE HRFocus December EMPLOYERS HAVE A DIRECT IMPACT ON EMPLOYEE JOB SATISFACTION SAYS NEW SURVEY This article provided by BLR A survey of employees in Canada indicates that their direct supervisors are a key influencer when it comes to job satisfaction and engagement, according to the Kelly Global Workforce Index (KGWI). The survey found that 68 percent of respondents believe their direct manager or supervisor has a significant impact on their job satisfaction or engagement. The latest findings from the KGWI also show that only one-third of respondents who switched jobs in the past year are happy in their new roles. Kristin Supancich, vice president and general manager of Canadian Operations for Kelly Services, said direct managers and supervisors have a pivotal role in influencing job satisfaction and retention, but many are not heeding the warnings. It is sometimes said that employees don t leave companies, they leave managers. What employees are saying is that they want their managers to open up with them and better explain responsibilities and expectations. When asked what direct managers and supervisors could do better (aside from increasing salary and benefits or giving promotions), employees most frequently cited more training opportunities (60 percent); clearer responsibilities, setting goals and objectives (49 percent); and more transparent communications (33 percent). HR CORNER Employers Have a Direct Impact on Employee Job Satisfaction Says New Survey Steps for Leaders to Communicate Effectively with Employees...2 HEALTH OUTCOMES Building a Wellness Foundation: Low Cost/No Cost Resources...4 LEGAL AND COMPLIANCE IRS Inflation Adjustments for SINCE YOU ASKED HIPAA Privacy Frequently Asked Questions...6 Spousal Carve-Outs...8 WEBCASTS...9 CONTACTS continued on page 2

2 HR Corner - continued from page 1 Results of the survey also show: Slightly more than one-third (35 percent) of workers feel totally committed to their current employers. More interesting or challenging work is identified as the top factor that makes employees feel more committed or engaged with their jobs. More than two in five (44 percent) say they actively look for better job opportunities or evaluate the external job market, even when they are happy in their job. 40 percent say that they would be likely to recommend their employer to a friend or colleague as an employment opportunity, with opportunities for personal growth/advancement noted most frequently as the most influential factor. Supancich said there is clearly a significant share of the workforce that is not fulfilled in their jobs, and this suggests the need for managers to take proactive steps to address this underlying discontent. Managers who concentrate on improving communications and providing more opportunities for personal development will have a better chance of maximizing their investment in people and skills, she stated. 10 STEPS FOR LEADERS TO COMMUNICATE EFFECTIVELY WITH EMPLOYEES This article provided by BLR Communication is the most critical competency that leaders need to succeed today, and most workplace problems are the result of poor communication, says author and leadership expert David Grossman. Effective communication is typically cited as the number one attribute of effective leaders, says Grossman, who is CEO and founder of The Grossman Group ( and author of You Can t Not Communicate: Proven Communication Solutions that Power the Fortune 100 and You Can t Not Communicate 2: More Proven Communication Solutions that Power the Fortune 100. There are lots of opportunities for leaders to communicate more effectively, he says, adding that most leaders didn t get to where they are because of their communication skills. They were promoted because they are individual contributors who achieved business results. Communication is very much a learned skill. Not surprisingly, there are many benefits of effective communication: improved relationships, more effective and efficient work, better problem solving, increased employee engagement, and the ability to recruit and retain high-potential employees, Grossman says. Poor communication, on the other hand, leads to confusion, apathy, disengagement, and, in the end, poor business results. Plus, leaders who do not effectively communicate risk losing high-potential employees to competitors. Grossman identifies several common communication mistakes made by leaders. Leaders often wing it and don t spend the time and energy to think about their audience. In addition, they communicate about their own perspective instead of employees perspectives ; think of communication as a check-off-the-box activity (i.e., I sent an ; therefore, I communicated. ); and confuse getting the message out with shared meaning and understanding. Other mistakes include: Being overconfident about their communication skills (i.e., they think they are effective communicators while their peers and subordinates have a different perception); Waiting to communicate until they think they have all of the answers, while the information vacuum is filling with messages from other sources, and employees are most likely thinking in terms of worst-case scenarios; Thinking they have no time to communicate when, in fact, communication done well will often save them time ; and Viewing communication as a separate skill as opposed to being integral to the performance of individual and team goals. Grossman asserts that some of those mistakes can more appropriately be characterized as excuses that leaders use to justify their poor communication skills. He says leaders should acknowledge their communication shortfalls and learn to improve their communication skills. continued on page 3 2

3 HR Corner - continued from page 2 He offers the following 10 action steps to help leaders communicate effectively: 1. Communicate with integrity, which is all about telling the truth always and without exception because your credibility is at stake, he says. 2. Make the time to communicate, and make the most of that time, Grossman says. 3. Remember to answer basic questions employees have that is, who, what, where, when, why, and how with an emphasis on why, he says. Too often, leaders don t share context or rationale or the big picture. 4. Use stories. The right anecdote can be so much more powerful than theory, fact, or data, he explains. 5. Build trust and credibility. Be visible, approachable, (and) engage employees in decision-making and key discussions. 6. Hold a mirror up to yourself, Grossman says. Consider how you would like to be communicated with if you re in employees shoes. 7. Outline expectations clearly, so employees know what you expect of them. 8. Don t wait to communicate until you have all the answers. 9. Provide context and relevance, which allows employees to get at the meaning, the rationale, and understand what it means to them. 10. Be human and empathetic, and show you care. Grossman says leaders must be flexible in their communication style, depending on the particular situation or information they are trying to convey. Part of the challenge of communications is bosses need to flex their style and adapt how they communicate to that situation, he says. In addition, while there s no rule of thumb per se for how frequently leaders should communicate with employees, Grossman recommends that each leader establish his or her own communication cadence that is, a regular rhythm of communications that s purposeful that various audiences can count on. A typical cadence might include a monthly one-on-one meeting with the boss; a weekly team meeting with direct reports; a bimonthly all-staff meeting; a daily firstthing-in-the-morning huddle with a work group; and an every Friday kudos . HR professionals can help enhance communication in their organization by reinforcing effective communication through systems that HR owns, says Grossman. The best thing that they can do is ensure the talent management and performance management systems reinforce the importance of the communication competency and what it looks like. The criticality of communications is an important part of every stage of the employee life cycle. 3

4 HEALTH OUTCOMES BUILDING A WELLNESS FOUNDATION: LOW COST/NO COST RESOURCES Employee health is a business asset for any organization; creating a work environment that supports healthy, productive employees is vital to your success. Operating under the misconception that costs will outweigh benefits or that workplace wellness is not valuable to their core business, many organizations do nothing to promote employee wellness. The facts, however, are these: Chronic diseases (e.g., heart disease and cancer) cause approximately 70% of all deaths in the U.S. and are responsible for three-fourths of our nation s health care spending; and 66% of all health care spending can be attributed to unhealthy lifestyles that lead to conditions (e.g., obesity) underlying many chronic, diseases.* Whether your company is trying to overcome a lackluster wellness budget or a skeptical staff, low cost/no cost resources are available to help motivate and invigorate your workforce to achieve their best health. Low cost/no cost wellness initiatives close the gap between having no wellness program at all and implementing some truly impactful activities. While constraints in budget, time and leadership are common barriers to program development, low cost/no cost programs can serve as a trial run for future, more comprehensive, wellness programs by establishing a foundation and providing baseline participation data and employee preferences. Worksite wellness offers opportunities for your employees to learn about their health and achieve optimal wellbeing. Wellness programs can be simple or complex and can vary greatly in order to meet the needs of your particular work environment. The essence of these programs is to encourage individuals to take preventative measures to avoid the onset or worsening of an illness and to adopt overall healthier lifestyles. An effective, sustainable worksite wellness program does not need to be a great financial investment but rather should focus on being broad in scope and customized to your employees, with a goal to grow each year in order to continually engage and maximize participation. There s no need to feel overwhelmed or defeated when putting together a program with minimal financial resources! Follow these simple steps to get started: Obtain employee feedback via an interest survey Gain leadership support by collecting and sharing success stories Set up a wellness committee Determine initial program measurement benchmarks Determine appropriate programs and activities Measure program success and report back to leadership When creating an inexpensive worksite wellness program, it s important to determine goals. Once you ve established a clear path (increasing employee physical activity, reducing stress, etc.), take time to discover any internal resources that might be available (e.g., creating a wellness committee, distributing a wellness newsletter) and promoting health activities, such as lunch time walking groups. Then, create a timeline to employ these resources in order to implement a successful program. It s possible too that your organization could benefit from low cost/no cost external resources, such as: Resources already offered through your health plan and other vendor partners (EAP, 401k, etc.) Community college/university studentor instructor-led lunch-and-learns Local hospital low cost/no cost resources Nutrition/exercise information Blood pressure screenings Chronic disease education resources Health fairs with invited representatives from: Medical carrier, EAP, and other benefits carriers Local YMCAs, gyms, massage therapists, health food stores Most important of all just get started! Create a plan to promote one or two simple health activities and create a foundation to build a more comprehensive program down the road. For more information on low cost/no cost workplace wellness initiatives, contact your Willis Client Advocate. * WELCOA: Making the Case for Worksite Wellness Programs, 4

5 LEGAL AND COMPLIANCE IRS INFLATION ADJUSTMENTS FOR 2014 Every year, about this time, the Internal Revenue Service and the Social Security Administration announce increases in the benefit and contribution limits governing a wide variety of tax-qualified employee benefit plans. The following table shows the changes for 2014 to the limits that most concern Willis clients. IRS INFLATION ADJUSTMENTS FOR 2014 Pre-Tax Dollar Limits (Retirement Plans) (k) Deferral Limit $17,500 $17, (b) Contributions $17,500 $17, Contributions $17,500 $17, (k), 403(b), 457 Catch-Up Contributions (Age 50+) $5,500 $5,500 IRA $5,500 $5,500 IRA Catch-Up Contributions (Age 50+) $1,000 $1,000 SIMPLE Plans $12,000 $12,000 SIMPLE Catch-Up $2,500 $2,500 Highly Compensated Employee (Retirement Plans) Annual Compensation $115,000 $115,000 Key Employee (Retirement Plans) Officer Annual Compensation $170,000 $165,000 Compensation Limit (Retirement Plans) Qualified Transportation $260,000 $255,000 Parking (Monthly) $250 $245 Mass Transit Passes (Monthly) $130 $245 FICA Bicycle Commuting (Monthly) $20 $20 Taxable Wage Base Social Security $117,000 $113,700 Medicare Unlimited Unlimited Tax Rate Social Security 6.20% 6.20% Medicare Health Savings Accounts 1.45% (2.35% on wages over $200,000 single/ $250,000 joint) 1.45% (2.35% on wages over $200,000 single/ $250,000 joint) Annual Contribution Limit (Self Only) $3,300 $3,250 Annual Contribution Limit (Family) $6,550 $6,450 Catch-Up Contribution $1,000 $1,000 HDHP Minimum Annual Deductible (Self Only) $1,250 $1,250 HDHP Minimum Annual Deductible (Family) $2,500 $2,500 HDHP Maximum Out-of-Pocket (self only) $6,350 $6,250 HDHP Maximum Out-of-Pocket (Family) $12,700 $12,500 5

6 SINCE YOU ASKED HIPAA PRIVACY FREQUENTLY ASKED QUESTIONS The issuance of final Health Insurance Portability and Accountability Act (HIPAA) Privacy Rules have necessitated changes to employer benefit plans and the internal privacy policies used by the plan. In addition, there were significant changes to the Notice of Privacy Practices. Willis has found that many questions are recurring about plan design and HIPAA requirements; therefore, we are issuing a list of the most-asked questions and brief answers to each. Question 1: My plan is insured. Do I need to send out a Notice of Privacy Practices? Answer 1: It depends. Fully insured plan sponsors may be able to use a HIPAA compliance shortcut, which is available to group health plans that meet two conditions: All health benefits under the plan are provided only through an insurance contract or a similar contract with a health maintenance organization (HMO) (that is, the benefits are fully insured ) Neither the plan nor the sponsoring employer creates, maintains or receives protected health information (PHI) If any health benefits under the plan are not provided solely through a health insurance policy and/or a similar contract with an HMO, the compliance shortcut is not available at all for that plan. Example: Employer A, from the previous example, amended its plan to split it into two separate ERISA plans, one for the insured PPO and HMO and one for the HFSA. The plan including the PPO and HMO would be considered fully insured for purposes of the compliance shortcut. The HFSA plan would be considered self-funded, for this purpose. Splitting the plan in this manner probably will ease the employer s compliance burden because compliance without the shortcut will be much easier for the HFSA alone than it would be for the HFSA, PPO and HMO together. Example: Employer A maintains an ERISA welfare benefits plan that includes a fully insured PPO, an HMO and a health care flexible spending account (HFSA). This plan will not qualify for the shortcut because the plan includes the self-funded HFSA. Considering the requirements for shortcut HIPAA compliance, plan sponsors may choose to restructure their benefits so that, to the extent that fully insured HIPAA-subject benefits are offered, they are provided under a plan that does not include self-insured HIPAA-subject benefits. Question 2: What benefits are subject to the HIPAA Privacy rules? Answer 2: If a plan number includes benefit options from both of the columns below, then that plan will be subject to HIPAA Privacy compliance; and because there are HIPAA-subject and non-hipaa-subject benefits under the same plan, a Hybrid Entity will exist, and the plan sponsor will need to include a Hybrid Designation Form in its HIPAA compliance materials. This form is not distributed to employees, but it is used in the event of an audit to indicate that the plan sponsor is aware that some of its benefits are subject to the HIPAA Privacy rules and that other benefits are not. continued on page 7 6

7 Since You Asked - continued from page 6 SUBJECT TO HIPAA PRIVACY Government-sponsored health plans Church-sponsored health plans Small health plans of small employers Self-insured health plans Health Reimbursement Arrangement (Code Section 105 medical reimburse) Health FSA Fully insured health plans HMO PPO EPO Traditional indemnity Open access HMO POS Minimum premium Dental benefits Indemnity dental DMO Vision benefits Prescription drug benefits Executive physical program Employee Assistance Plan Retiree medical Voluntary medical benefits see below to determine which entity is responsible for HIPAA Privacy compliance Wellness program Long-term care NOT SUBJECT TO HIPAA PRIVACY Life insurance Accidental Death and Dismemberment insurance Adoption assistance Disability income coverage On-site medical clinics (not deemed to be a health plan, but clinics may be covered under the Privacy Rules as health care providers this discussion is beyond the scope of this Employer Guide) Medical leave programs Automobile Liability coverage Workers Compensation Credit-only insurance General Liability coverage Legal services Dependent FSA Adoption assistance Education assistance Section 125 (cafeteria plan) Question 3: On September 16, 2013, the Department of Health and Human Services issued a Model Notice of Privacy Practices that may be used by entities required to distribute the Notice. Willis also has a Model Notice of Privacy Practices which is different from the HHS Notice. May we use either Notice? Answer 3: Yes. HHS indicated that its Notice is a baseline for compliance, with no indication that covered entities or insurers were required to use the HHS Notice. So, either Notice may be used. You may obtain our version of the Model Notice of Privacy Practices from your Willis representative. Question 4: For covered entities that cannot follow the HIPAA shortcut (and therefore must distribute the Notice of Privacy Practices), how is that distribution accomplished? Answer 4: If the covered entity maintains a website including benefits information, the revised Notice of Privacy Practices must have been posted on the website by September 23, The Notice of Privacy Practices must also be delivered to individuals. This delivery can be made by (if the individual has agreed to receive electronic distribution of such notices), or the notice may be mailed (first class mail) or it may be delivered by hand. Delivery of the Notice does not require a special mailing, and the covered entity may choose to include the Notice in the SPD or annual enrollment materials. If the covered entity does not have a website with benefits information, then the revised Notice of Privacy Practices must be distributed to individuals within 60 days of the material revision of the Notice. continued on page 8 7

8 Since You Asked - continued from page 7 SPOUSAL CARVE-OUTS If an employer requires employee spouses (who have other employer-sponsored health plan coverage available to them) to enroll in their own employer s coverage, may an employer also require an employee s spouse who is Medicare-eligible to enroll in Medicare? Is it permissible for an employer to apply a penalty if the spouse fails to enroll in Medicare? May an employer terminate coverage for a spouse upon the spouse s becoming Medicare-eligible? These questions have recently been asked in light of the actions taken by some well-known companies. Since Medicare is involved, the answers are governed by the Medicare Secondary Payer (MSP) statute. Among other things, the MSP statute establishes the manner in which employer group health plans coordinate coverage of benefits when an individual is entitled to coverage under both Medicare and the employer plan. The MSP statute only applies to employers with 20 or more full-time employees who work at least 20 weeks during the current year or the preceding year. In addition, the employer plan must be related to the employee s employment; other sources of health benefits for which the individual is eligible, such as retiree medical, need not be considered. As a general rule, the MSP statute prohibits an employer plan from taking into account the Medicare entitlement of an employee or an employee s spouse or other covered family member. Taking Medicare into account involves not paying primary when the employer plan is required to under the MSP rules, but it also applies to other actions that might be taken to avoid plan coverage when Medicare is involved. For example, when an employee or an employee s spouse turns 65, the MSP rules require a plan to provide the same benefits under the same conditions as are provided to employees or spouses who are younger. This is also a requirement under the Age Discrimination in Employment Act (ADEA). When employees and their spouses turn 65 while covered by an employer plan, they have the right to continue receiving primary coverage under the employer plan or to select Medicare as their primary plan and drop employer coverage. When a covered employee or spouse reaches age 65, the employer should provide notice of that person s right to choose Medicare or continued employer coverage, as well as the right to return to the employer plan at a future date on the same basis as a younger employee. An employer is prohibited from offering Medicare beneficiaries financial payments or other benefits as incentives not to enroll in or to terminate enrollment in the employer s plan when that plan would be primary to Medicare. This rule generally applies even if the payments or other benefits are offered to all other individuals who are eligible for coverage under the plan. It is a violation of Medicare law every time such a prohibited offer is made, whether orally or in writing, and there is a civil money penalty of up to $5,000 for each violation. ERISA Considerations Under ERISA, a self-funded group health plan is not required to provide coverage to a spouse or other employee dependent. This is generally true for insured group health plans as well, although state insurance laws vary greatly. Your legal counsel should review the applicable state s insurance laws before you determine whether spousal or other dependent coverage is required. Permissible Employer Actions To the extent a group health plan is not required to provide spousal coverage, the plan sponsor is free to amend an existing plan to uniformly terminate coverage for spouses of employees. In addition, the plan sponsor may design a new plan that excludes spousal coverage. An employer cannot, however, single out Medicareeligible spouses for exclusion under its plan without potentially violating the MSP statute, ADEA and possibly other laws. If the plan provides for spousal coverage, it must comply with the MSP rules as well as other applicable laws. Requiring an employee s spouse who is Medicare-eligible to enroll in Medicare violates the MSP rules; similarly, applying a penalty to a spouse who fails to enroll in Medicare likely violates the MSP no incentives rule (as well as ADEA), even if that rule is applied uniformly to all spouses who are eligible for other coverage outside the employer plan. For this reason, an employer should take extra precautions when its plan requires a spouse or other dependent (who is eligible for other employer-sponsored coverage) to enroll in that other coverage (or applies a penalty if the individual does not enroll). Such precautions should include, for example, adding wording to the plan document and summary plan description to the effect that other employer-sponsored coverage does not include Medicare. Because of the potential penalties involved and the need to properly document and communicate plan terms, plan sponsors should have their legal counsel review any plan actions addressing spousal coverage. 8

9 WEBCASTS NEXT GENERATION WELLNESS: TAKING YOUR PROGRAM TO THE NEXT LEVEL TUESDAY, DECEMBER 17, :00 PM EASTERN Presented by: Amy Kruse, MS Senior Health Outcomes Consultant Willis Human Capital Practice Health assessments, biometrics screenings and health fairs. Now what? Many employers who start with good intentions launching a worksite wellness program are soon faced with challenges in following through. During this session, participants will learn: What companies are doing to make a solid difference in the health outcomes of their employees (hear about several employer groups that have taken their program beyond biometric screenings and health risk assessments to truly move the needle on employee health) What incentive strategies drive behavior change What metrics to consider when measuring program success To RSVP, click here. NOTE: Advance RSVP is required to participate in this call. Registration ends one hour prior to the call start time. EXCHANGES PUBLIC AND PRIVATE WHO ENROLLED, WHAT S NEXT? TUESDAY, JANUARY 21, :00 PM EASTERN Presented by: Rob Harkins Vice President of Private Exchanges Willis National Human Capital Practice Jay Kirschbaum, JD, LLM, FLMI Practice Leader National Legal and Research Group Human Capital Practice Exchanges have been a hot topic in the last year; however, questions remain. How have public exchanges impacted employer health care to date? Are private exchanges set up to be successful long-term? Join us as we review today s public and private exchange marketplace. During this event, we will: Discuss why many companies are considering private exchange models, and potential advantages and obstacles to weigh when exploring if a private exchange is a good fit for your organization Review employer attributes of early public exchange adopters and lessons learned from these organization Explore the financial pluses and minuses when considering a private exchange and strategies to control cost Review the ins and outs of a Private Exchange How to Administer a Private Exchange under ERISA, HIPAA, the IRC, etc. To RSVP, click here. NOTE: Advance RSVP is required to participate in this call. Registration ends one hour prior to the call start time. 9

10 KEY CONTACTS U.S. HUMAN CAPITAL PRACTICE OFFICE LOCATIONS NEW ENGLAND Auburn, ME Bangor, ME Boston, MA Burlington, VT Hartford, CT Manchester, NH Portland, ME Shelton, CT NORTHEAST Buffalo, NY Morristown, NJ Mt. Laurel, NJ New York, NY Norwalk, CT Radnor, PA Wilmington, DE ATLANTIC Baltimore, MD Knoxville, TN Memphis, TN Metro DC Nashville, TN Norfolk, VA Reston, VA Richmond, VA Rockville, MD SOUTHEAST Atlanta, GA Birmingham, AL Charlotte, NC Gainesville, FL Greenville, SC Jacksonville, FL Marietta, GA Miami, FL Mobile, AL Orlando, FL Raleigh, NC Savannah, GA Tallahassee, FL Tampa, FL Vero Beach, FL MIDWEST Appleton, WI Chicago, IL Cleveland, OH Columbus, OH Detroit, MI Grand Rapids, MI

11 Milwaukee, WI Minneapolis, MN Moline, IL Pittsburgh, PA Schaumburg, IL SOUTH CENTRAL Amarillo, TX Austin, TX Dallas, TX Denver, CO Houston, TX McAllen, TX Mills, WY New Orleans, LA Oklahoma City, OK Overland Park, KS San Antonio, TX Wichita, KS WESTERN Fresno, CA Irvine, CA Las Vegas, NV Los Angeles, CA Phoenix, AZ Portland, OR Rancho/Irvine, CA San Diego, CA San Francisco, CA San Jose, CA Seattle, WA 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 /11/13 11