COBRA benefits provide continued group health plan coverage after certain qualifying events, like termination of employment, and are a health care safety net for employees until benefits from a new job kick in.

But for employers, staying compliant with COBRA regulations can be difficult. Sure, COBRA — the Consolidated Omnibus Budget Reconciliation Act health insurance program that allows an eligible employee and their dependents the continued benefits of health insurance coverage — is for employees who no longer work at your company.

Since you might think of them as long gone, complying with COBRA might not be a priority. However, any employee who leaves on bad terms may be more likely to file a lawsuit against an organization if it mishandles COBRA. In fact, employers have recently seen an increase in the number of COBRA lawsuits filed against them for leaving out required information.

Outside of litigious former employees, COBRA is generally confusing to comply with and can carry heavy penalties for employers. These can add up — courts can assess up to a $110 per day penalty for each deficient COBRA notice per person.

Here are some commonly overlooked details.

Not understanding if your organization is subject to COBRA; not understanding eligibility. First, it’s important to understand which employers have to offer COBRA. The federal law says that employers with at least 20 employees in the prior calendar year must offer COBRA coverage starting the day employer-sponsored group health plan coverage ends. COBRA coverage can last up to 18 months under typical circumstances, or 36 months if certain events occur, e.g., the employee becomes entitled to Medicare, gets divorced or dies.

But it’s not enough just to follow the federal law. Employers often overlook that states can also mandate that group health plans offer continuation coverage much like COBRA — called “mini-COBRA” laws — that typically affect smaller employers and provide greater benefits to employees than the federal COBRA law. For example, the New York “mini-COBRA” law mandates 36 months of continued coverage for employers with fewer than 20 employees. In New Jersey, with some exceptions, the state’s mini-COBRA law applies to employers that employ between 2 and 50 eligible employees, and provides employees with:

  • 18 months if an employee is terminated or their hours are reduced
  • 29 months if an employee becomes disabled
  • 36 months for the dependent spouse or child of an employee who dies; goes through a divorce, legal separation, dissolution of a civil union or domestic partnership or otherwise loses dependent status.

Many other states have continuing coverage laws in place as well. And as if understanding the state and federal laws that apply to your employees isn’t enough (and, it can be especially difficult if your employees live in multiple states) — there are also time-sensitive deadlines you must meet in order to stay in compliance with COBRA laws.

Not Complying with Notice Guidelines

One issue that’s landed some employers in hot water is failing to send notifications, or not including the right information in these notifications. Let’s start with the basics—employers that sponsor group health plans must send an “initial notice” or “general rights notice” to covered employees and their covered spouses within 90 days of the date that coverage under the plan starts or, if later, the date that is 90 days after the date when the plan first becomes subject to COBRA.

In addition, and with some exceptions, once an employee separates from the company, the plan administrator (or employer, if the employer and plan administrator are the same entity) must send a COBRA “election notice” within 14 days of receiving notice of a qualifying event, such as being terminated from employment or leaving the company. This notice describes the employee’s rights to elect COBRA.

For both types of COBRA notices, the penalty for not doing this (i.e., in addition to the potential litigation costs) is up to $110 per day.

The Department of Labor outlines exactly what should be included in these notices and even supplies templates called “model notices” to help employers comply with these guidelines.

Not Understanding What’s Covered

COBRA allows employees to pay for the same group health plan coverage they enjoyed during employment — but at their own expense. Unless the employer agrees to pay for all or a part of the COBRA premium, employees are responsible for the full premium amount (plus a 2 percent administration fee). Under COBRA, the term “group health plan” coverage is defined broadly, and includes medical coverage and, depending on plan design, could also include prescription, vision and dental coverage. Life insurance, long-term care insurance and other similar types of insurance aren’t considered “medical coverage” and aren’t included in COBRA.

Health reimbursement accounts, or HRAs, qualify as group health plans, so employees must still offer reimbursement for their expenses under COBRA. Health FSAs are generally included within the definition of “group health plan” and are subject to COBRA, unless the account is “overspent” as of the date of the qualifying event. In such cases, an employer’s COBRA obligations are more limited.

COBRA, Severances and Mergers

One frequently asked question is how COBRA works with severance packages. It’s not uncommon for employers to pay employees’ COBRA health insurance premiums on a pretax basis for a few months as part of a severance package. But if the employee is considered “highly compensated” by the IRS, and the employer’s health insurance plan is self-insured, the employee may be subject to paying tax on COBRA coverage as required under certain nondiscrimination rules under Section 105(h) of the Internal Revenue Code, which generally require that a self-insured employer can’t discriminate in favor of highly compensated employees. Employers can avoid this issue by paying the employee for their COBRA premium on an after-tax basis.

Another point of confusion is how COBRA is administered during a company merger or acquisition.

There are a number of issues to consider, including what type of acquisition, sale or merger a business goes through, and the employee’s status as a result of that event. These factors determine which entity in the M&A deal pays for COBRA, and which employees are eligible unless the parties to the deal have memorialized these terms in their relevant asset purchase or stock purchase agreement.

How to Stay Compliant

Managing COBRA properly can be onerous. Often employers fall into one of three categories when it comes to administering COBRA benefits:

  • Managing it in-house.
  • Relying on a broker.
  • Relying on a COBRA specialist.

Whether your organization takes on administering COBRA in house or relies on your insurance broker or other COBRA specialist, the potential liability for getting COBRA wrong is significant.

Harrison Newman is vice president and benefits consultant for Corporate Synergies.

When I work with executives and managers, a common complaint I hear about HR professionals is, “They don’t listen. They just tell.” So when I work with HR professionals, I encourage them to adopt these three practices of active listening.

If reading this article gives you flashbacks to a chaotic time in 2016, do not despair for you are not alone.

Human resources professionals may remember the painstaking work they took to bring their companies into compliance with proposed Department of Labor regulations relating to doubling the salary-level test for employees to be exempt from overtime premium pay, only for a court to moot that work when it barred the DOL from enforcing the regulations.

The DOL recently proposed an increase to the salary-level test that will become effective in January 2020.

Under the Fair Labor Standards Act, all employees must be paid a premium rate of time-and-a-half for all hours worked over 40 hours in a workweek, unless the employee is exempt from the FLSA’s overtime requirements. A widely known, but often misunderstood, three-prong test governs whether an employee is exempt. An employee must satisfy all three tests to be exempt from overtime premium pay:

  • salary basis test (a fixed and predetermined salary that does not fluctuate);
  • salary-level test (a minimum specified weekly amount); and
  • duties test (the employee’s job responsibilities must primarily involve “white collar” executive, professional, or administrative duties).

Since 2004, the salary-level test has been $455 per week ($23,660 annually). In 2015, the Obama administration’s DOL proposed essentially doubling the salary-level test to $913 per week ($47,476 annually). The proposed regulations stood to impact millions of employees who earned more than the 2004 level test but less than the proposed regulations and would become eligible for overtime premium pay once the new regulations took effect.

As companies scrambled to comply, a federal court enjoined the enforcement of the DOL’s new regulations within weeks of its effective date. With the November 2016 election of Donald Trump, the federal government accepted the court’s injunction, and companies could breathe easy — for at least the time being.

This past March, the DOL issued a Notice of Proposed Rulemaking, notifying stakeholders that it intended to increase the salary-level test to $679 per week ($35,308 annually). While this increase to the salary-level test appears modest compared to the previous proposal, the DOL nonetheless projects that the increase will make more than 1 million employees eligible for overtime premium pay who are currently exempt.

The DOL anticipates publishing final regulations before the end of the year, with the regulations taking effect in January 2020. As a result, now is the time for HR professionals to begin analyzing how the regulations will impact their operations and take remedial steps to ensure compliance with FLSA regulations.

The proposed regulations also affect some high wage earners, as the DOL is raising the salary-level test for “highly compensated employees” from $100,000 to $147,414 annually. Under this exemption to overtime premium pay, employees who make above a certain salary threshold have a relaxed duties test, under the belief that the duties of employees who make above this amount need not be subject to the same scrutiny as the duties of those employees making less.

Finally, the DOL committed to periodically reviewing and updating the salary level threshold moving forward. The 2015 proposed regulations, in contrast, would have mandated automatic increases that were indexed to cost of living increases.

With the updated salary-level test scheduled to take effect in a matter of months, now is the time for companies to begin analyzing their workforces to determine the impact of the new regulations. Specifically, HR pros must reassess those employees they classify as exempt who earn between the 2004 salary-level test and what it will be in January 2020.

For those employees, HR will either need to increase their salaries to satisfy the new salary-level test or begin paying them premium pay for all overtime hours worked in a workweek. Likewise, HR should review the job duties of all exempt employees earning between $100,000 and $147,414 annually to ensure that they meet the complete duties test, rather than a relaxed one for highly compensated employees. Otherwise, these employees may also no longer be eligible for exempt classification, absent a raise above $147,414.

The silver lining for many companies is that the hard work was already done in 2016. Let’s just hope you kept your notes and work product.

Not understanding health savings accounts (HSAs) and the high-deductible health plans the accounts are coupled with leads some to bypass an HSA option during their employer’s annual open-enrollment period, while others who enroll in HSA-eligible plans often fail to take full advantage of them.

Brigette McInnis-Day has been named Google Cloud’s new vice president of HR.

Brigette McInnis-Day headshot
Brigette McInnis-Day has been named Google Cloud’s new vice president of HR.

Bringing over 20 years’ experience, McInnis-Day previously worked as chief operations officer and head of the digital HR strategy and transformation teams at SAP Successfactors, one of the world’s largest cloud-based human capital management providers.

As COO, she defined and implemented business strategies that were needed to achieve sustainable growth and customer satisfaction across SAP Successfactors’ largest cloud organization. She was committed to establishing the right goals, culture and vision, and bringing them to life to effectively support 6,500-plus global customers.

While managing board level HR and digital transformation strategies, McInnis-Day also led global organizational change and redesign and consulted senior level executives. According to a press release from Google, she enjoys amplifying employee experiences, revamping compensation elements and stimulating people development. She is also passionate about working to build cultures that promote women and early talents in leadership, diversity and inclusion, pay equality and digital transformation, the release stated.

Aside from the workplace, McInnis-Day is also an author, speaker and contributor for several publications, including the World Economic Forum Agenda, Fortune, Forbes, HRExecutive and other innovation forums. She enjoys spending her free time with her family, and describes herself as a travel and fitness enthusiast, the press release stated.

Google Cloud is a suite of public cloud computing services offered by the search engine giant. It includes a variety of hosted services for compute, storage and application development that run on Google hardware. Google Cloud can be accessed by software developers, cloud administrators and other business IT professionals.

Also read: Taking a Page From the Gig Economy to Ease the Recruiting Process

As stated on its website, “Google Cloud is widely recognized as a global leader in delivering secure, open, intelligent, and transformative enterprise cloud platform.”

Taking on her new position at Google Cloud, McInnis-Day will continue to lead large-scale, global teams and help individuals succeed through innovation by overseeing HR with a focus on acquiring and developing talent and shaping the culture to drive business growth and transformation.

The release noted that she is looking forward to playing an active role among the growing Google Cloud talent pool.

You’ve probably heard about America’s $1.5 trillion student debt problem. It’s no secret the strain of student loan obligations has led some to put off buying homes, starting families and pursuing their dreams.

If a recent Price-Waterhouse financial wellness survey is any
indication, it’s also probably getting in the way of productivity at the

Half of the millennial workforce holds student debt. Generation X and Baby Boomers hold their share, too, some having gone back to school and others paying back loans they took out for their children.

Many are feeling the pressure, which makes it increasingly hard to check the worries at the office door.

Student loan repayment perks

Some workplaces are responding by offering a student loan repayment
perk. More have incorporated this benefit in the last year, in hopes of
attracting Millennial and Gen Z talent. There is a more proactive approach
companies can take, however, and it’s one that gets to the root of the problem.

Employers can help their employees prevent massive student debt in
the first place by equipping them to save. Forty-nine percent of employees are
planning to save for a child’s or grandchild’s education. But saving for
college is harder than expected for 79 percent of parents, according to a
recent Student Loan Hero survey.

Businesses can make it easier by including a 529 benefit.

A 529 plan is a higher
education savings tool that can help families of various means prevent or
minimize future student debt. With tax-free investment growth and state tax
incentives offered by many states, 529s offer what traditional investment
accounts do not – plus the benefit of compound interest.

It’s a tool that can work well
whether an employee has a modest or robust salary. In fact, just contributing
$10 a week to a 529 can add up over time – more than $15,000 in 18 years or
$6,700 in 10 years.

Looking at the results of a recent
California study conducted by ScholarShare 529, this is something employees
want. Eighty-three percent would like to know more about a workplace college
savings program. Seventy-nine percent say a workplace college savings program
“shows the firm cares about its employees.”

Incorporating 529s in the workplace can mean anything from allowing employees a direct deposit option to offering an employer contribution perk. Even just making employees aware that the plans exist can go a long way in minimizing financial stress.

I know, because that’s what we’ve been equipping employers to do in Virginia. We are finding that employers understand the importance of helping employees save for important life events and are looking for opportunities to offer value-add benefits that don’t require additional budget.

No extra costs or complications

That’s the beauty of this approach.
It doesn’t have to cost extra or be complicated to administer to be of value to
an employee. Just by allowing an employee to be learn about college savings
plans while at work has extreme value.

So, does an employer 529 plan sound like something worth exploring? Here’s how employers can add this benefit:

  • Find the right plan. The state where your
    employees reside is the best place to start. You aren’t restricted to offering
    a plan within state lines, but many states have tax incentives for residents.
  • Reach out to the 529 employer program
    contact. Many 529 websites have a page that is dedicated to employers.  Learn about the specifics of the programs
    they offer. Be sure to ask how they can help educate employees and also inquire
    about their direct deposit process. 
  • Weigh the options and decide. Is the primary
    goal awareness? Would a direct deposit option help your workers save? Do you
    have the ability to offer a contribution?
  • Let your employees (and potential employees)
    know. Offer a financial wellness session, host a webinar, include a segment in
    your newsletter or pass out pamphlets at a staff meeting. Do what you need to
    do to let workers know. Don’t be shy about talking it up on LinkedIn either. When
    you make it known that your company cares about financial wellness, it will be
    another reason for talented people to consider a future with you.

In a world where jobs outpace those
who can fill them, employer 529 plan offerings can up your benefits game and
help them stand out from the rest. It’s good for business. It’s good for the
people who power the business.

Most importantly, it’s good for
society. Less student debt could make a world of difference for the next
generation –and for the parents, grandparents and degree seekers who keep your
company running.

The post Employer 529 plans: A benefit that strikes at the heart of student debt appeared first on HR Morning.

The Supreme Court will begin hearing oral arguments for the 2019-2020 term, and it will tackle big employment law issues starting in the first week of oral arguments.

My most recent Workforce print feature story is about mental health parity, and that’s one of the topics I love writing about as a benefits reporter: the need for quality, accessible, affordable mental health coverage.

My preliminary research steered me to a new book, “Mind Fixers: Psychiatry’s Troubled Search for the Biology of Mental Illness.” It explores scientists’ ultimately unsuccessful attempts to figure out the cause of mental illness.

The argument is that even though ideas or theories in psychiatry have prevailed in certain moments of history, all of them have been proven inadequate or outright wrong. And we’re still uncertain about both the cause of mental illness and why treatments work on some people but not others.

This sounds cynical, but I love a book that rationally explores the highs and lows of a scientific goal (in this case, to pin down the cause of mental illness). This isn’t discouraging as much as it is proof that people will constantly try to progress their understanding of the world in order to help people with a disorder. It’s more promising to me to see people admit their miscalculations and be determined to move forward than to see people stubbornly hold on to ideas from the past.

There are a few reasons I want to write about this book. The history of mental health treatment and theory is simultaneously fascinating, inspiring and upsetting. Especially in this context, history gives us many examples of how some of the mental health trends we’re now seeing in the workplace may not be exactly new.

I’ve gotten press releases about how people are more depressed or anxious now than ever before — especially millennials (or whatever young generation is being picked apart at the moment). I’ve spoken to people about how prevalent mental illness is and how that has changed over time. I’ve always been skeptical about the idea that it’s more common than in the past. My theory is that it’s more talked about now, more diagnosed now and less stigmatized now, and so the numbers just seem higher. (Feel free to argue against me on this, of course!)

What interested me about “Mind Fixers” was the section about the Cold War Era and how it was seen as the “Age of Anxiety” at the time. Many people relied on the “minor tranquilizer” Miltown, a predecessor of Valium, to deal with that anxiety. Meanwhile, in the 1980s depression became “the common cold of psychiatry.”

Comments like this make me wonder how current trends compared to other periods of history. This isn’t to minimize the impact that mental illness has on people and communities in the present. I bring this up so that we don’t talk about the history of mental health in a way that romanticizes the past. People in the 1950s, the 1800s, and before that had mental disorders, too. The treatments just weren’t as advanced.

According to the National Institute of Health and the Centers for Disease Control & Prevention, 41.2 percent of adults with a mental illness have received mental health services. And, more importantly, this statistic is very gendered if you dissect the data further. While 47.6 percent of women have received this type of health care, only 34.8 percent of men have.

That’s a big gap. Why don’t men get mental health care as much?

There’s a lot written about this already (see the National Alliance on Mental Illness, National Institute of Mental Health and Psychology Today, for example), but here’s a historical angle that shows how deep this goes. “Mind Fixers” briefly explored a 20th century mental disorder known as hysteria.

It was “associated with women and weakness” and men did not receive this label. Fast forward to the 1970s, when people were talking about a new trendy topic called “stress.” It was thought that women were twice as likely to experience stress and depression than men.

This is just a snapshot. Still, it shows how deep these roots are that may tell men that they’re weak if they admit certain things.

Finally, “Mind Fixers” mentioned the unwillingness of insurance companies to cover psychiatric services in 1970s. Lack of benefits coverage of behavioral health is something that even today — after the passage of the Mental Health Parity and Addiction Equity Act in 2008 — is still sometimes an issue.

Also read: Mental Health Parity Law Successes and Challenges

According to “Workforce Attitudes Toward Behavioral Health,” a February 2019 survey from behavioral health company Ginger, 35 percent of the 1,214 U.S. employees surveyed reported that they had to pay directly for behavioral health services their benefits didn’t cover. Further, 85 percent of people said that behavioral health benefits are important when evaluating a job, and 81 percent of people said they face barriers in accessing behavioral health care. The most common barrier (28 percent) was that providers aren’t available in their benefits plan.

I’d strongly recommend this book to anyone interested in the science behind mental health. It brings up a lot of interesting talking points like, How much has stigma improved in the past 200 years, and where is there still room for improvement? Which issues still exist that caused people problems all those years ago as well?

While this isn’t a book about the workplace, you’ll read about certain historical trends and movements that sound a lot like some of the “innovative” solutions you’re hearing about now. Maybe you’ll learn a couple lessons from history.

Mental illness is an obstacle that impacts many individuals, communities and places of work. The Human Capital Media research department gathered national and international data to explore how prevalent mental illness is, how often people get help and how much mental illness impacts the global economy.

By The Numbers- Workplace Mental Health Statistics
Also in By the Numbers: Diversity in the Workplace

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

The Department of Labor (DOL) announced a new final rule that gives states more leeway in drug testing applicants for unemployment compensation.