In an Information Letter dated February 27, 2019, the Department of Labor (DOL) clarified that an ERISA plan must include any procedures for designating authorized representatives in the plan’s claims procedure and summary plan description (SPD) or in a separate document that accompanies the SPD. In response to a request by a patient advocate and health care claim recovery expert for plan participants and beneficiaries, the DOL reiterated that the claims procedure regulations permit authorized representatives to receive notifications in connections with an ERISA plan’s claim and appeal determinations, and noted that a plan’s claims procedure cannot prevent claimants from choosing who will act as their representative for purposes of a claim and/or appeal. ERISA plan sponsors should review plan documents to ensure that the applicable documents clearly outline any steps a participant or beneficiary must take to validly designate an authorized representative under the plan.

It is an exciting time for employee benefit professionals.

Just a few years ago, we were consumed with legislative challenges and daunting health and retirement issues. Those issues haven’t gone away, of course, but there’s a newfound optimism around the strategic and creative opportunities benefits bring. Several factors are pushing benefits to the forefront of talent strategies and the employee experience.

First, we have an incredibly diverse workforce that needs benefits to solve real problems. It’s marked by a vast range in age — employees from Gen Z (those in their early 20s) to baby boomers (some working well into their 70s) and everyone in between. It also encompasses every definition of family and lifestyle. And it challenges the very definition of “work,” which is evolving as more and more people build careers around part-time and contract roles or take long breaks from full-time employment.

Second, we’re seeing an exciting shift in how we’re designing and talking about benefits. The focus is moving away from traditional benefits like health insurance and retirement plans and toward a more holistic approach to taking care of employees and their families. This change is driven by the understanding that benefits and HR programs can drive greater business results when they’re considered more broadly, with attention to their impact on the mind, body, finances and even sense of purpose.

Third, there’s tremendous innovation in our space as employers and employees demand new programs and new technology (and as venture capitalists have figured out that employee benefits are ripe for disruption). HR technology is starting to keep pace with consumer technology, which means we can now deliver sophisticated benefits to meet those broad needs and create solutions for those very challenging issues we’re still tackling.

On top of all that, people care about their benefits. A lot. For 87 percent of employees surveyed for MetLife’s 15th annual “Employee Benefit Trends” study, having insurance/benefits provides peace of mind for the unexpected. In fact, 83 percent of employees would be willing to take a small pay cut (on average, 3.6 percent) to have a better choice of benefits from their employers.

Finally, consider this: Low unemployment is driving massive competition for talent. Benefits are positioned to be a huge strategic differentiator and a competitive weapon for employers across industries.

The takeaway here is that benefits should be a huge focal point for companies of all sizes. We should be shouting from the rooftops about how amazing benefits are and the tremendous role they play in people’s lives.

And we shouldn’t be shy about the considerable investment employers make in these programs. A significant portion of total compensation goes to benefits, and that percentage is only set to grow.

So, how can you educate employees and position this investment in benefits in a positive light? How do you elevate the significance of benefits in your organization?

One example from this past fall’s annual enrollment stands out. Our client Hitachi Vantara, a tech company recently formed by three industry leaders (Hitachi Data Systems, Hitachi Insight Group and Pentaho) and a leader in cloud-based data solutions.

Hitachi Vantara has made a huge commitment to employee benefits, especially around getting employees engaged in programs and managing costs. Its message during annual enrollment this past fall? “Health care costs are rising. Yours aren’t. For the seventh year in a row, you won’t see an increase in what you pay for your medical plan. Which means your paycheck contributions continue to be significantly less than those at most other companies.”

The company teamed that messaging with a campaign that focused on getting employees to use the programs that are often overlooked, like tuition assistance, virtual doctor visits and fitness reimbursements. And it did so with a bold and definitive point of view on why benefits matter and what they mean to employees.

Susan Ramirez, Hitachi Vantara’s senior director of total rewards, Americas, explains: “Since it really was a ‘good news’ message for our benefits in 2019, we wanted to be sure to share that message with employees. Taking a bold approach not only captured our employees’ attention, it also emphasized that Hitachi Vantara truly cares about them.”

As 2019 unfolds I challenge you to be bold with your benefits. What will you do to make your benefits stand out? And how will you let employees know that you value them by taking care of them?

Read more Benefits Beat!: How HR Benefits By Getting Political

Make Benefits and Internal Communications Inseparable 

The post Employers: Be Bold With Your Benefits appeared first on Workforce.

When a job seeker fails a pre-employment drug test, often the company rescinds the offer and both parties move on.

That scenario wasn’t working for the Belden wire and cable factory in Richmond, Indiana, which in 2016 faced a labor shortage due to a spike in retirements and a dearth in qualified applicants. So they tried something dramatically different.

Belden’s factory, which sits near the Ohio state line and employs more than 400 people, began offering drug treatment to those who failed their drug screening with a promise of a job if they successfully complete the program — all on the company’s dime. The pilot program, called Pathways to Employment, was launched in February 2018 and is believed to be the first of its kind.

“We had many people who were retiring and we needed to fill dozens of positions, but it was getting harder to find candidates because so many were failing their drug test — around 10 percent,” said Dean McKenna, Belden’s senior vice president of human resources. “There was no mechanism to deal with this except to say, ‘Sorry, you can’t work here.’ The CEO and others talked about what would happen if we hired these people. They said, ‘How bad would it be to give them the opportunity to get back in the workplace?’ ”

Also read: Construction Industry Nailing Down Opioid Addiction Woes 

Belden teamed with Richmond-area organizations including Centerstone, a mental health and drug addiction provider, Meridian Health Services, Ivy Tech Community College and employment agency Manpower of Richmond, to manage the program. Participants are referred to a health care provider for evaluation and to develop a treatment plan, according to McKenna. So far, 26 have been through the program.

Opioid Treatment Programs

“The success rate is better than what we could have hoped for,” he said. “My peers probably thought we shouldn’t do this. There are risks of injury and litigation. You need the right level of support from the community.”

While many states are struggling with the opioid epidemic, Indiana is among a handful that is also facing a growing labor shortage, according to research from Indiana University. The economic damage caused by opioid abuse cost the state $4.3 billion in 2018 and will exceed $4 billion again this year, the study showed.

In 2015, nearly a million Americans were not working because of opioid addiction, according to a study by the American Action Forum, a nonprofit advocacy group. Between 1999 and 2015, the decline in labor force participation cost the U.S. economy $702 billion as the result of 12.1 billion worker hours lost, the study found. In some industries, such as construction, trucking or manufacturing, the numbers are even higher.

In neighboring Ohio, which leads the country in drug overdose deaths per capita, opioid addiction, abuse and overdose deaths cost the state anywhere from $6.6 billion to $8.8 billion annually, according to a 2017 report from the C. William Swank Program in Rural-Urban Policy at Ohio State University.

Also read: State Chamber Fights Workplace Addiction With Employer Opioid Toolkit  

In order to help employers improve worker health and safety, the Ohio Bureau of Workers Compensation launched a pilot program in October to reimburse companies for drug testing and to provide training that helps managers deal with workers in recovery.

“In Ohio we are almost at zero unemployment, but we have employers that can’t find candidates who can pass a drug test,” said Dr. Terry Welsh, the bureau’s chief medical officer. “We aim to help employers hire and manage folks in recovery no matter their addiction. Normally, drug testing is an expense that employers bear themselves, but we are incentivizing them to do it by offering reimbursement. We are also providing professional training to folks in management for second chance employees.”

The agency has been a pioneer in tackling the opioid crisis, according Welsh, who pointed to the 2011 overhaul of its pharmacy program to better monitor and reduce addiction to potentially dangerous prescription drugs. In 2016, the agency also created safeguards to hold prescribers accountable if they don’t follow best practices. The agency saw a drop in opioid addiction among injured workers of 59 percent between 2011 and 2017.

The bureau’s Opioid Workplace Safety Program will provide up to $5 million over two years to employers in the state’s hardest-hit counties for expenses related to both pre-employment and random drug testing, manager training and support for workers in recovery.

At Belden in Indiana, the cost to treat a candidate classified as low-risk for relapse is around $16,000 and up to $25,000 for someone who is considered a high risk. McKenna said it’s a small price to pay.

“When you look at the difference in cost between a manufacturing job we can’t fill and a machine we can’t run versus what it costs to help someone get back on their feet, you see that it’s worth it,” he said. “These are people with real illnesses. They aren’t choosing to be in that situation. It’s unfair to discount them from society because of the problems they’ve stumbled into.”

The post Opioid Treatment Programs Offer Second Chances to Workers Facing Addiction appeared first on Workforce.

save money on prescriptionsThe escalating cost of prescriptions is a hard pill to swallow for employees. That’s because it’s becoming more common for prescription drug plans to shift the cost to participants. Then there’s the behind-the-scenes double Rx whammy: pharmaceutical companies increase prices and pharmacy benefit managers obscure the true cost of medications, causing more headaches for employees.

Employees also feel blindsided when the PBM adjusts its formulary or the plan sponsor moves participants to a high-deductible health plan. Rx sticker shock is on the rise. Consider the employee whose monthly copay of $20 for a generic drug skyrockets to 10 times that per month under an HDHP.

Employees have a hard time paying for important maintenance medications. As prices keep rising, patients are less likely to fill new prescriptions or continue taking maintenance drugs, which can cause more health issues and cost medical plans even more down the road.

Unfortunately, many employees don’t know that the pharmacy they frequent may not always offer the lowest price for their medications. There are more options for finding low-cost prescription drugs than there were even five years ago, but it doesn’t necessarily follow that employees know they actually can price-shop prescriptions.

Also read: What to Ask Your Pharmacy Benefit Manager to Control Spike in Prescription Spending

Employers can work with their insurance brokers to educate employees about better ways to find reasonably priced prescription medications.

In the meantime, here are three Rx buying tips you can share today with your employees.

  1. Retail Store Discounts

Some large retail stores, including Target, Walmart and many grocery store chains, offer discounts on popular brand name and generic medications at low or no cost without insurance simply to drive traffic to their stores. These loss leaders attract shoppers who are likely to buy a few items when they pick up their medication at the in-store pharmacy. The prices of brand name and generic drugs that are discounted vary from store to store. It pays for employees to investigate where they can get the best deal for their medications.

ShopRite, a grocery store chain in the Northeastern United States, has been dispensing free diabetes medications since 2009. Similarly, grocery chain Publix offers the generic type 2 diabetes drug metformin at no cost. The grocery chain also offers 14-day supplies of several prescribed antibiotics at no cost. Walmart offers several drugs at $4 for a 30-day supply and $10 for a 90-day supply. The key to this strategy is to keep “impulse purchases” to a minimum.

  1. Mobile Apps

Not surprisingly, the web now makes it easier to track down the cheapest generic prescription medications. Two examples are GoodRx and Blink Health, which both provide medication prices and direct customers on buying options.

GoodRx collects drug prices from thousands of pharmacies to show where a specific medication can be purchased at the lowest price. They also aggregate coupons and discount programs from manufacturers. Blink Health partners directly with drug manufacturers and negotiates lower prices for medications. Blink Health conveniently lets consumers pick up medications at a pharmacy or order them by mail. Importantly, coupons on these sites often make the price of a medication lower than the copay through the prescription plan.

  1. Manufacturer’s Coupons

Prescription drug manufacturers often offer discounts and coupons for their drugs. If a medication costs more than $50, for example, the manufacturer may cover part of the balance. To access a coupon, just contact the manufacturer to enroll in the savings card program.

Some manufacturers will cover the balance of the drug cost and contribute the balance toward the employee’s deductible. After just a month or two of a higher-priced prescription drug and a manufacturer’s discount, an employee may satisfy their deductible and pay only the copays for the rest of the plan year.

Educating employees about free and discounted drugs starts during open enrollment, but it shouldn’t end there. Emails, postcards and announcements from the HR team are good reminders for employees. Some HR departments develop targeted communications that list expensive prescription drugs and how to save. Helping employees learn how to shop for the best prescription prices can help to keep them healthy and help you contain costs.

Also read: Contracting a Cure for Prescription Drug Costs

The post 3 Ways to Help Employees Save Money on Prescriptions appeared first on Workforce.

Workforce‘s March issue focuses on benefits, and this year we honed in on health care costs. As health care costs steadily rise and as health care law changes on the federal, state or local level, plan sponsors like employers have a lot to be confused or concerned about. With that in mind, the editorial team compiled a list of statistics to paint a broader picture of what’s going on in the health care sector, including salaries and workforce size. Also, see exactly how much health care contributions have risen for both employees and employers since 2000.

health care statistics

More in By the Numbers: The Latest Statistics on Public Sector Employees

More in By the Numbers: How’s Your Performance Review Performing?


The post By the Numbers: The Latest Health Care Statistics appeared first on Workforce.

In a presentation at McDermott’s Employment and Employee Benefits Forum, Jeffrey Holdvogt discussed qualified plans, including student loan repayment benefits and the rise of DOL/IRS/PBGC plan activity. He also commented on the scrutiny on plan governance and fiduciary process materials. He addressed the legal challenges and mandates, such as state laws protecting against balance billing by out-of-network providers.

View the full presentation.

In 2018, Microsoft surprised employers and policymakers alike when it announced a new requirement for its vendors: give contract workers at least 12 weeks of paid leave after having a child, or risk losing the tech magnate’s business. For HR managers nationwide, this was just one of many signs that the conversation surrounding paid family leave is growing from a slow burn to a steady fire.

While federal action on paid family leave has been a nonstarter in decades past, large organizations along with state and local legislatures are pushing Washington to reassess its commitment to national paid time off. As an HR manager, understanding the following national trends and local changes surrounding paid family leave will help you better assist both employers and employees in navigating future policies and complex legislation.

Expect vendor-leave mandates to become more common

While only some organizations are currently mandating vendors to implement paid family leave, it’s likely that trends like these will only increase over time. After all, it’s no secret that paid family leave is rapidly growing in popularity. Around 6 in 10 Americans say they have taken or are very likely to take time off from work for family or medical reasons at some point, and around 8 in 10 support paid family leave for new mothers (around 7 in 10 support paid family leave for new fathers). These numbers are expected to grow, with employers seeking to provide additional benefits for high-quality employees in an increasingly competitive talent market.

Watch for paid family leave on the federal agenda in 2019

The midterm elections shifted political balances in many states. With major shifts in both the House and Senate, it’s likely that a reinvigorated version of the FAMILY Act will move forward. The 2017 bill proposed 12 weeks of paid leave for family and personal medical needs, seeking funding through a 0.4 percent payroll tax split between employers and employees. Previous pre-midterm legislation is less likely to gain new life — this includes the Economic Security for New Parents Act and Workflex in the 21st Century Act.

While a divided federal government may make the likelihood of paid family leave reform less likely in the near future, there has been significantly more bipartisan discussion on this topic than in years past. Both Democrats and Republicans in the Senate and House are discussing introducing legislation this year. In addition, longtime congressional veterans, political newcomers and even presidential candidates have made it a core component of their platforms, signaling a renewed interest in moving the needle on this topic.

Look to states for the future of paid family leave

Three states launched or approved paid family leave in 2018:

  • New York’s Paid Family Leave Act went into effect last year, with up to eight weeks of paid leave for covered employees. This has increased to 10 weeks in 2019, along with increases to benefits and payroll deductions.
  • Washington state will launch its paid family and medical leave program on Jan. 1, 2020. The program offers up to 12 weeks of paid family leave, 12 weeks of paid medical leave, or 16 weeks paid leave total. Employers will have to choose between the state-run plan or otherwise submit their own plan.
  • Massachusetts signed paid family and medical leave legislation that will go into effect Jan. 1, 2021. The program will offer up to 12 weeks of paid leave for family member care or caring for a new child, plus 20 weeks of paid leave for personal medical issues.

As the conversation around paid family leave continues, it’s important to take note of these major state-level policies. As of Jan. 1, 2019, 21 states have had a version of a paid family and medical leave bill introduced in either chamber of their state legislature. State legislation will likely serve as a framework for future employers and politicians looking to provide paid family leave in their respective districts.

Expect increased regulation and complexity

While policymakers are responding to the need for paid family leave, complex legislation may make the process of providing leave across state lines a difficult process. It will likely fall to HR managers to sort through the various paid family leave policies that multistate employers face.

Keeping track of individual state legislation and paying attention to national discourse surrounding parental and medical leave trends will help tremendously as paid family leave administration becomes increasingly complex. Additionally, outsourcing help as needed when faced with the prospect of new legislation will free up the valuable time required to study and implement new or revised programs.

Above all, be ready

While each of these trends point to a renewed interest in providing quality paid family leave to millions of Americans this year, the broader message is clear: Leave policies and the administration surrounding them will only become more complex in 2019. As an HR manager, your best frontline defense is a thorough understanding of the local and national trends surrounding leave policy.

Your organization will look to you to make sense of where the conversation is moving — and, when the time comes, they will seek your insights when putting a revised or new paid family leave plan into action. Getting a jump-start on the larger conversation, paying attention and outsourcing as needed are your best tactics for success in 2019. It’s up to you to use them wisely.


The post 5 Paid Family Leave Trends to Watch in 2019 appeared first on Workforce.

Earlier this week, Republican Sens. Joni Ernst and Mike Lee introduced the Child Rearing and Development Leave Empowerment Act (the CRADLE Act). It is a first step toward providing some measure of paid parental leave to American workers.

Yet, it has some serious flaws.

The Cradle Act would provide up to three months of consecutive paid parental leave benefits to new moms and dads following the birth or legal adoption of a child. It not only applies to biological parents and those that legally adopt children, but also those who intend to maintain the same abode as the child for more than six months of the year following the birth or adoption. Further, its coverage is much broader than the FMLA, applying to any employee that meets certain minimum Social Security contribution requirements.

How are the benefits paid? The Cradle Act would allow workers access some of their Social Security retirement income during the parental leave. For each month that workers access these benefits on the front end, they delay their Social Security eligibility by twice as many months on the back end. In other words, an employee who takes their full entitlement of three months of Cradle Act benefits would delay their later eligibility for Social Security benefits by six months.

In discussing this bill, Sen. Lee said the following:

Working families are the heart and soul of our nation. If young people can’t afford to marry and start a family, then the American dream literally has no future. Unfortunately, the cost of family formation and child-rearing today is higher than ever. …

But in today’s economy of working moms and dual-earner couples, we also need updated social insurance programs that support workers at different times of their lives, rather than just starting at retirement. The Cradle Act is a step in that direction.

He’s 100 percent correct. Yet, the Cradle Act has some serious flaws:

    1. It will stress our already overstressed Social Security system.
    2. It will require employees to delay retirement and work longer.
    3. It offers no job protections for those who take leave. The Cradle Act’s coverage is significantly broader than the FMLA, yet provides no restoration or re-employment guarantees for employees not otherwise protected by the FMLA. Thus, an employee could take Cradle Act leave, yet lose their job.
    4. It provides no protection against retaliation for employees exercising their rights under the Act.
There is no doubt that we need a paid parental leave solution. We are the only industrialized country that does not guarantee paid parental leave to our employees. We should be embarrassed. And while most agree that we need to provide paid parental leave, the rub seems to be how to pay for it. The Cradle Act is not the correct solution. Yet, anything the moves this discussion forward is a debate worth having.

The post Be Wary of What’s Rocking in the Cradle Act appeared first on Workforce.

The District of Massachusetts court struck the plaintiffs’ jury-trial demand in their ERISA complaint for damages and equitable relief against 401(k) plan fiduciaries. The court followed the “great weight of authority” in ruling that there is no right to trial by jury in ERISA actions for breach of fiduciary duty.

Access the full article.

By now may have heard that the Department of Labor announced its intent to increase the qualifying salary threshold for its white collar exemptions from $455 per week ($23,660 annually) to $679 per week ($35,308 annually).

I’m here to tell you that this increase just doesn’t matter.

Why? Because for an employee to qualify as exempt, he or she still must meet one of the various white-collar duties tests.

  • Administrative: The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers, and which includes the exercise of discretion and independent judgment with respect to matters of significance.
  • Professional: the employee’s primary duty must be the performance of work requiring advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction, which work is predominantly intellectual in character and which includes the consistent exercise of discretion and judgment.
  • Executive: The employee’s primary duty must be the management of the enterprise or a customarily recognized department or subdivision of the enterprise, in which the employee customarily and regularly directs the work of at least two or more other full-time employees, and the employee has the authority to hire or fire other employees (or the employee’s suggestions and recommendations as to such are given particular weight).

If you’re paying someone with whom you vest this level of discretion and judgment in your business a salary less than $35,308, either you are grossly underpaying them or they really aren’t all that indispensable to your business (and therefore fail the duties test).

Case in point? Drake v. Steak N Shake Operations, Inc., in which a federal judge awarded a class of 286 Stake N Shake restaurant managers a hair over $3 million in unpaid overtime. The lead plaintiff earned an annual salary between $35,000 and $38,000, and the court determined that managers failed the duties test for both the executive and administrative exemptions.

You will read a lot over the next few months about the DOL increasing its white-collar salary threshold by nearly 50 percent. I’m here to tell you that it just doesn’t matter. The classification of your exempt employees is most definitely an issue to which you should be paying attention, but from the perspective of whether they truly meet the narrow duties tests, and not whether you pay them enough to hit a particular salary threshold.

Whether that minimum salary is $455 per week or $679 per week, if you truly vest your exempt employees with the level of discretion and judgment necessary to meet the duties test, you should already be paying them enough to meet the salary test, too.

The post The FLSA’s Salary Test Just Doesn’t Matter appeared first on Workforce.