The Chairman's Blog: Americans Can’t Handle the Truth

The Chairman's Blog: Gallup:

David Stockman’s new book, The Great Deformation: The Corruption of Capitalism in America, is getting a lot of attention these days....

united states currency eye- IMG_7364_web (Photo credit: kevindean)

Stockman, President Ronald Reagan’s first budget director, confronts us head-on with blunt truths we simply can’t handle. He argues that our current economy -- and recent prosperity -- aren’t real. Instead, they’ve been fueled by a series of artificial bubbles created by runaway deficit spending and reckless money-printing at the Federal Reserve. This is all going to lead to an epic crash, Stockman predicts, and next time around, there won’t be any bailouts.

I hate to say it, but most of us would rather the president and our representatives in Congress don’t cause us any pain. ... We elect our officials to create no discomfort for us, and they deliver.

Inspired by Stockman’s blunt assessment, I’d like to focus on three areas where all of us -- the White House, Congress, and citizens, too -- need a heavy dose of truth-telling: the unemployment rate, the unsustainability of healthcare, and the reality of America’s economic growth.

English: United States mean duration of unemployment 1948-2010. Data source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Average (Mean) Duration of Unemployment [UEMPMEAN] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed August 14, 2010. (Photo credit: Wikipedia)

The unemployment rate in the U.S. is stagnant at best. Yes, the U.S. Department of Labor says the rate has dropped from 7.8% to 7.6%, but it’s actually frozen when you apply a more accurate measure. In simple terms, the Bureau of Labor Statistics’ survey of 60,000 households per month doesn’t count you as “unemployed” unless you looked for a job in the past four weeks.

I think it’s better to turn the number upside down and ask, “What percentage of the population does have a good job?” According to Gallup’s monthly payroll to population (P2P) survey of 30,000 adults, the employment situation has failed to improve recently and has remained relatively little changed year-over-year. Workers haven’t found the full-time jobs they’ve been seeking, and the labor force and unadjusted unemployment rates are flat.

Healthcare costs are out of control. We must confront this problem now... At $2.5 trillion annually, the U.S. healthcare tab is ... nearly two times the whole Russian economy. It’s also roughly twice the size of the whole Indian economy, and India has a billion-plus population.

The fact is, healthcare is breaking America faster than Social Security and other pension benefits. And healthcare is growing at an average of 6% per year, which means the new costs over the next decade will be a staggering $10 trillion over and above where we currently are.

Components of economic growth (Saari 2006) (Photo credit: Wikipedia)

We need authentic economic growth. While I agree with Stockman that the current booming stock market is an illusion driven by money-printing and deficit spending -- ... many of his solutions are more political in nature: ... I have a more straightforward fix: Restore and encourage the spirit of American free enterprise. ...

Chart of economic growth; from spreadsheet (Photo credit: Wikipedia)

Whatever anyone in the White House or on Wall Street says, don’t forget that our economy is currently growing at a pathetic 1%, where we need a minimum of 2.5% GDP growth just to tread water, in my view. ... I think we need GDP growth of about 4.5% to get the economy humming again. We’re not going to get there with more deficit spending and with the Federal Reserve handing out more free money to investors.

What will get us to authentic economic growth and job creation is for federal, state, and local governments to do everything in their power to help America’s 6 million small businesses succeed. That means restoring their confidence in the future -- 30% of small-business owners are worried they may not be in business in 12 months, according to a Wells Fargo/Gallup Small Business Index survey -- and removing any barriers they may face. What most people probably don’t know is that small businesses -- not large enterprises -- create most of the good jobs in America.

Maybe Stockman’s political reforms are the right way to go, but whatever the case, I think that restoring the spirit of robust, free-market capitalism will cure most of our ills and put the country on a sustainable path for the future.

But first, we need to start telling ourselves the truth about what really drives prosperity and what’s just an illusion. David Stockman has done us all a favor by getting us to confront reality. Of course, I actually do recommend his book.

'via Blog this'

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Health care reform: What do business owners need to know?

Greensboro - The Business Journal

by Catherine Carlock

Special Reports/Publications Writer

Date: Friday, August 10, 2012, 2:55pm EDT - Last Modified: Friday, August 10, 2012, 3:05pm EDT

Katie Arcieri/The Business Journal

The panelists who spoke at The Business Journal's health care reform discussion, from left to right: Allyson Labban, an attorney with Smith Moore Leatherwood’s health care practice group; Dr. Grace Terrell, president and CEO of Cornerstone Health Care; and Todd Yates, managing partner of employee benefits services firm Hill, Chesson & Woody.

The Supreme Court’s decision to uphold the Affordable Care Act has left many employers with a lot of questions about health care reform.

Maximum Out-of-Pocket Premium Payments Under PPACA (Photo credit: Wikipedia)

The legislation itself provides a framework but gives little guidance as to the implementation of its requirements.

So just what do employers need to know? The Business Journal brought together experts to help answer that question Friday morning at the Airport Marriott in Greensboro.

The panelists were Allyson Labban, an attorney with Smith Moore Leatherwood’s health care practice group; Dr. Grace Terrell, president and CEO of Cornerstone Health Care; and Todd Yates, managing partner of employee benefits services firm Hill, Chesson & Woody. …

… Here’s some of what was discussed:

• What’s the date I need to know? 2014. That's when both the employer and individual mandate will take effect.

Health care systems and universal health care (Photo credit: Wikipedia)

• What’s the threshold? Employers with 50 or more employees will be required to provide health insurance to their workers or pay a penalty. Firms with fewer than 50 employees are not required to provide coverage, but could elect to do so through state or federal exchanges being established. However, all individuals will be required to have some form of health insurance.

• Do companies with more than 50 employees have a choice to pay or play? Yes. Businesses with more than 50 employees need to decide if it makes financial sense for their company to pay the penalty and let employees purchase their own insurance. On the flip side, many studies show that offering benefits is a good way to attract and retain talented workers. “We’re encouraging folks to crunch those numbers now and think ahead,” Yates said.

•
  What’s the penalty per employee? Terrell said for larger employers that choose not to provide insurance, the average fine per employee would be about $2,300. Part-time and seasonal employees are exempt, Yates said. For more specific information regarding employer penalties per employee, Labban suggested reading the “Summary of Potential Employer Penalties Under the Patient Protection and Affordable Care Act,” a report from the Congressional Research Service.

• Who’s levying the penalty? Just like any other tax penalty, the Internal Revenue Service will be the enforcing body behind the penalty. …

• Is the penalty tax-deductible? No.

• Can my existing health care benefits plan be grandfathered in? Yes, as long as it meets certain requirements.

• What about the exchanges? It’s not clear yet whether North Carolina will accept federal funding to organize its own electronic insurance exchange, or if the federal government will step up to the plate. …

• What if individual companies, each with fewer than 50 employees, have the same owner? That owner will be responsible for providing benefits. If there are multiple companies under the same control group, they’ll be considered one, Yates said.

Catherine Carlock reports and writes for special reports and special publications. Contact her at (336) 370-2918

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Self-Insured Numbers Higher Than Expected, and Growing

A new report reveals that the federal government was underestimating the number of employers that self-fund employee health benefits. Now, with healthcare reform, their numbers are set to grow.

Risk & Insurance Online
By JULIE LIEDMAN, a freelance writer who lives in Philadelphia

Image via WikipediaOn March 23, the one-year anniversary of the Patient Protection and Affordable Care Act (PPACA), the U.S. Department of Labor issued its first annual report on self-insured employee health benefits plans, mandated by the legislation. …

According to the DOL report, about 12,000 health plans filing a Form 5500 for 2008--the latest year for which complete data is are available--were self-insured, and 5,000 mixed self-insurance with insurance. Self-insured plans covered 22 million people, while mixed plans covered 25 million. Health benefits plans covering private-sector employees must file the form if they cover 100 or more participants or hold assets in trust. Because many self-insured health plans do not meet the filing requirements and therefore haven't filed the form, however, the total number of self-insured plans probably is underestimated. The DOL report acknowledged this,  …
"We expect a larger interest in self-insurance than ever before when additional regulations such as exchanges, 'pay-or-play' and vouchers go into effect (by 2014)," said Mike Ferguson, chief operating officer of the Self-Insurance Institute of America.
By 2014, PPACA requires that health insurance be more affordable and easier to purchase for small businesses and individuals through statewide exchanges. Employers with 50 or more full-time employees must either provide specified minimum levels of coverage to their employees or pay an excise tax. This is referred to as "pay or play."…
Smaller employers may find it financially advantageous to pay for their own firm's risk than to be subject to the new provisions.

Image via WikipediaPurchasing a plan through the exchange, for instance, where premiums will be a function of the broader risk pool and subject to risk adjustment, could be costly, Ferguson said. If enough small firms with healthier enrollees opt out of a state's small-group market in 2014, that state exchange could experience adverse selection.

"Based on anecdotal feedback we've gotten from our members," said Ferguson, "they've digested the regulations currently in place, adapted to any new requirements and life goes on."
April 12, 2011
Copyright 2011© LRP Publications

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Financial incentives in wellness programs are effective, report finds

Image via Wikipedia

Financial incentives in wellness programs are effective, report finds - Articles - Employee Benefit Adviser
Over the past decade employers have been adding a wide range of wellness programs. The results of these steps are encouraging.

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Few employers planning to drop health plans after reform is in place, survey finds

          Employee Benefit News

By Lydell C. Bridgeford
November 10, 2010

Image via WikipediaWhether an employer continues to offer health insurance once state-run insurance exchanges take effect in 2014 will largely depend on the size of the employer, according to a survey by Mercer.

Only six percent of large employers with less than 500 employees report they are likely to drop health coverage after the insurance exchanges go into effect in 2014. That number drops to three percent for employers with 10,000 employees.
Large employers "are reluctant to lose control over a key employee benefit," says Tracy Watts, a partner in Mercer’s Washington, D.C. office.
"But beyond that, once you consider the penalty, the loss of tax savings and grossing up employee income so they can purchase comparable coverage through an exchange, for many employers dropping coverage may not equate to savings," she adds.
Small employers, however, took a different perspective on whether they will provide health coverage in 2014 because of the exchanges. For instance, 20% of businesses with 10 to 499 workers say they’re likely to drop health insurance.
The reason, in part, stems for small businesses gravitating toward fully insured health plans, which makes them vulnerable to large rate increases because of a small risk pools and minimal purchasing power.

Image via Wikipedia"You can see why the idea of dropping employee health plans would be attractive to small employers," especially those with a hight turnover rate and low-paid workforce, says Beth Umland, who directed the study for Mercer. …

The survey represents the responses of more than 2,800 employers. Other key findings from the survey include:

• While 17% of employers with 50 or more employees say that the new PPACA requirements generally taking effect for 2011 – extending coverage eligibility to dependents up to age 26 and removing lifetime benefit limits – will have no effect on their cost in 2011, nearly as many (16%) estimate that it will raise cost by 5% or more. Mercer analysts report that PPACA will increase cost by two percent or less. 

• When asked about their most likely response to the excise tax, about a fourth of employers with 50 or more employees (23%) say: “We will do whatever is necessary to bring cost below the threshold amounts.”

• An additional 37% of employers say they will attempt to bring the cost below the threshold amounts, but acknowledged that “it may not be possible.”

• Only 3% say they will take no special steps to bring cost below the threshold amounts, and the rest (37%) predict their plans won’t ever hit the cost threshold, which will be tied to CPI and increase each year.  

Image via Wikipedia"It’s important to keep in mind that this new tax is still eight years out and a lot could change between now and then," says Watts. "Given how often ERISA, tax, Medicare and Medicaid rules are modified, there’s a good chance that the excise tax that takes effect in 2018 won’t be exactly the same as the sketch we’re working from today," she adds.

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Employees Value More Employers that Offer Voluntary Benefits

Image via Wikipedia October 6, 2010 (PLANSPONSOR.com) - According to a survey conducted for insurer WellPoint, Inc., most employees (83%) think more highly of employers that offer voluntary insurance benefits than those that don't.

In addition, nearly 90% of respondents report that when it comes to accepting a new job, it is important that companies offer a full range of health benefits, including voluntary. More than half (56%) said it is "very important." 

Image via Wikipedia

According to a press release, eight in ten employees whose company offers voluntary benefits (82%) are satisfied with their benefits offerings, compared to 30% of those whose companies do not offer such benefits.

The top reasons employees cited for enrolling in voluntary benefits include cost savings (54%), greater protection for their families (50%), and ease of mind (44%).

Additional survey results include:

• Two thirds of employees (67%) say their company currently offers voluntary insurance.
• Specific groups of employed Americans are more likely to report their company offers voluntary insurance, including men (71%), those located in the Northeast region of the United States (74%), workers at large companies (81%), and those with an average household income of $50,000 or more (74%).
• Only half of workers (56%) say they are knowledgeable about the voluntary insurance products offered at their companies.
• The majority of workers agree (67%) that having their employer provide voluntary benefits would increase their productivity at work.

The survey was conducted online among a national sample of 2,500 Americans ages 18+ in August 2010.

Rebecca Moore
editors@plansponsor.com

A Cup of Joe is Good Medicine

Image via Wikipedia

September 27, 2010 (PLANSPONSOR.com) – There’s nothing like a good cup of Joe to get you going – particularly if you are a nurse or a doctor.

Image via CrunchBase

Image via Wikipedia

A new survey by retailer Dunkin’ Donuts and CareerBuilder finds nurses and doctors topped the list of professions in which workers said they got the most done after downing a cup of coffee.

A CareerBuilder news release said after nurses and doctors, the biggest coffee-drinkers were found among:
3) Hotel workers,
4) Designers/Architects,
5) Financial/Insurance sales representatives,
6) Food preparers,
7) Engineers,
8) Teachers,
9) Marketing/Public Relations professionals,
10) Scientists,
11) Machine operators, and 
12) Government workers.
In general, 32% of respondents said they need a jolt of caffeine to make it through the day, while 43% said their production lagged when they were coffee free.
Geographically, workers in the Northeast U.S. stated they are the most dependent on coffee, with 48% of people claiming they are less productive without coffee, compared to the South at 45%, West at 44% and Midwest at 34%. Meanwhile, younger workers are more dependent on a coffee fix. Forty percent of respondents ages 18 to 24 admit they can’t concentrate as well without coffee, and 43% of those ages 18 to 34 stated they have lower energy if they don’t drink coffee.
Thirty-seven percent of American workers drink two or more cups of coffee during their workday, and 75% of American workers who buy coffee during the workday only travel a quarter mile or less for their daily brew.
The survey was conducted online within the U.S. by Harris Interactive on behalf of CareerBuilder among 3,661 U.S. workers (employed full-time; not self-employed; both government and non-government) ages 18 and over between August 17 and September 2, 2010.
Fred Schneyer
editors@plansponsor.com

Retaining key employees in times of change

Many companies throw financial incentives at senior executives and star performers during times of change. There is a better and less costly solution.

McKinsey Quarterly - Organization - Talent
AUGUST 2010 • Sabine Cosack, Matthew Guthridge, and Emily Lawson

Too many companies approach the retention of key employees during disruptive periods of organizational change by throwing financial incentives at senior executives, star performers, or other “rainmakers.” … In our experience, many of the recipients would have stayed put anyway; others have concerns that money alone can’t address. …
Our work with companies in many sectors (among them, energy, financial services, health care, pharmaceuticals, and retailing) suggests there is a better and less costly approach to employee retention… . It starts with identifying all key players, but targeting only those who are most critical and most at risk of leaving. These people are then offered a mix of financial and nonfinancial incentives tailored to their aspirations and concerns. A European industrial company applied this approach during a recent reorganization and found that it required only 25 percent of the budget that had previously been spent on a broad, cash-based scheme. What follows are three suggestions for companies with similar hopes of keeping their top talent without breaking the bank.

1. Find the “hidden gems”

HR and line managers need to work together during times of major organizational change to identify people whose retention is critical. Yet too often companies simply round up the usual suspects…. Few look in less obvious places for more average performers whose skills or social networks may be critical—both in keeping the lights on during the change effort itself as well as in delivering against its longer-term business objectives.
These “hidden gems” might be found anywhere in the company: for example, the product-development manager in an acquired company’s R&D function who is nearing retirement age …—yet who is crucial to ensuring a healthy product pipeline; or the key financial accountant responsible for consolidating the acquired company’s next financial report. Even if the employees’ performance and career potential are unexceptional, their institutional knowledge, direct relationships, or technical expertise can make their retention critical. …
Once HR and line managers have generated a thoughtful and more inclusive list of key players (usually 30 to 45 percent of all employees), they can begin to prioritize groups and individuals for targeted retention measures—in our experience, 5 to 10 percent of the workforce. The key is to view each employee through two lenses: first, the impact his or her departure would have on the business, given the focus of the change effort and his or her role in it; and second, the probability that the employee in question might leave.
When a European industrial company conducted this exercise, it mapped the outputs on a risk matrix. …The company had been launching a new centralized trading unit—requiring almost all traders and their support staff to relocate, with half of them heading to another country—and was steadily losing people. The risk matrix revealed that another 104 people were likely to leave. Among them were 44 employees who were critical for the success of the trading unit. To be sure, some were traders but most were IT, finance, and administrative staff with unique knowledge of the unit’s systems.

Exhibit: During a reorganization effort, one company found that 44 employees critical to the company’s success were likely to leave.

2. Mind-sets matter

One-size-fits-all retention packages are usually unsuccessful in persuading a diverse group of key employees to stay. Instead, companies should tailor retention approaches to the mind-sets and motivations of specific employees (as well as to the express nature of the changes involved).
When executives at the European industrial company looked beyond their standard retention package (bonuses plus compensation for the costs of the move) and focused instead on the needs of individual employees, they found a more nuanced situation than they had anticipated. Among the key people at risk were two main groups with two different mind-sets.¹ One consisted of individuals who were worried about relocating because it would uproot their families. The people in the other, more career-driven group didn’t mind living and working abroad but wondered, as they faced change in any event, whether staying or searching for another employer would best further their careers.
In one-on-one conversations with the people in the family-oriented group, managers explored specific concerns and discussed how the company could add to the measures already in place to increase the likelihood of retaining these individuals. On the menu of incentives: an increase in base pay, assistance in finding schools and kindergartens for their children, career counseling for their spouses, language training, and alternative work arrangements so employees could work at home or commute instead of relocating.
Meanwhile, in the conversations with the career-driven people, managers offered them a cash bonus but focused primarily on the organizational chart of the new, centralized unit, which had been designed from scratch. For people who had held senior roles in their local organization, it was essential, for example, to learn about their new responsibilities and how many direct reports they would have; for many of the more junior people a key question was who their bosses would be. Also high on the agenda was a dialogue with each individual about his or her future career and leadership opportunities in the context of the unit’s new strategy.
This targeted approach, which cost just one-quarter as much as the broad financial incentives plan the company had previously applied, succeeded in stabilizing the new unit. One year after its launch, some 80 percent of the staff who received special attention had started to work in the new location—a significantly higher share than for the group that didn’t receive this attention. Since its founding, the unit has increased its sales by more than 30 percent and its earnings before interest and taxes (EBIT) by more than 90 percent.

3. Retention is about more than money

As the European industrial company’s experience suggests, financial incentives play an important role in retention—but money alone won’t do the trick. Praise from one’s manager, attention from leaders, frequent promotions, opportunities to lead projects, and chances to join fast-track management programs are often more effective than cash. Indeed, a 2009 McKinsey Quarterly survey found that executives, managers, and employees rate these five nonfinancial incentives among the six most effective motivators when the main objective of the exercise is retaining people.²
One financial services firm undertaking a recent cost-cutting initiative elected to use only nonfinancial measures—including leadership-development programs—to retain the pivotal players it had identified as being at risk of departure. One year later, none of those players had quit. …
When financial incentives are required, it is important to design them appropriately and use them in a targeted way. For example, one-third of the retention bonus during a merger might be paid to pivotal staff even before the deal is closed, with the remaining two-thirds to be paid out a year later—dependent in part on the recipients meeting defined performance criteria such as the successful transfer of systems from the acquired company.
Targeting retention measures at the right people using a tailored mix of financial and nonfinancial incentives is crucial for managing organizational transitions that achieve long-term business success; it’s also likely to save money.

Still, executives mustn’t view employee retention as a one-off exercise where it’s sufficient to get the incentives packages right. Rather, best-practice approaches build on continuous attention and timely communication every step of the way to help employees make sense of the uncertainty inherent in organizational change. Ultimately, what many employees want most of all is clarity about their future with the company. Creating that clarity requires significant hands-on effort from managers, including the ongoing work of tracking progress so that companies can quickly intervene when problems arise.

About the Authors

Sabine Cosack is a consultant in McKinsey’s Vienna office; Matt Guthridge is an associate principal in the London office, where Emily Lawson is a principal.
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Notes

¹ The number of groups will vary according to a company’s specific situation. We have observed circumstances where employers have identified up to six distinct employee segments.
² See Martin Dewhurst, Matthew Guthridge, and Elizabeth Mohr, “Motivating people: Getting beyond money,” mckinseyquarterly.com, November 2009.

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Wellness infused with motivation, measurement and management

Employee Benefit News

By Bruce Shutan

The blind spot of employee wellness programs is they tend to focus on telling employees what they should be doing to live healthier without addressing how people are motivated to make changes or helping sustain desired behaviors. ...

Participation in {one well-structured wellness} program can range anywhere from 40% to 85% depending on how a company designs their program and what incentives they offer, whereas ... the number tends to be only about 5% to 15% among traditional programs. Moreover, because the focus is on motivation, measurement and management, corporate clients have reported a return on investment that’s as high as 5:1 over the course of a year based on lower medical costs and precursor conditions to chronic illnesses and an increase in employee productivity.

Culture of prevention

One strategic position that {this wellness program} seeks to reinforce when helping companies develop a culture of prevention that rewards personal responsibility is that the interests of employers and employees are aligned because both parties are seeking to contain mounting health care costs.

Many of these expenses are clearly preventable in that they’re related to lifestyle – producing poor health outcomes that are driving down productivity, spiking absenteeism and disability claims, triggering presenteeism and threatening profitability.

Milliman Inc. analysts recently noted that a typical family of four will spend $18,074 on average for medical care in 2010 – a 7.8% increase from the previous year. But perhaps most alarming is that the Centers for Disease Control and Prevention estimate that 75% of the nation’s health care costs, or $1.5 trillion, are traced to chronic diseases, most of which are preventable. …

{a well-structured wellness program} favors budget-neutral employee incentives that are aligned with preventative strategies that result in healthy behaviors. The approach is akin to a good-driver discount in that individuals who exhibit healthy behaviors are rewarded just as those with an accident-free driving record. Employees who participate in health and wellness programs, for example, would be eligible to receive a discount on their monthly health insurance premiums …

The initial focus is on physical activity because of its high impact in preventing diseases that are driving health care cost increases, as well as how easily it’s measured. … [It’s] easy to track the number of miles walked or calories burned by simply wearing a pedometer.

Making programs fun

Another key component of this proactive approach is to encourage social interaction with friends and colleagues, which often drives physical activity on a daily basis. … But in order to do these programs justice, employers need to recognize that there are different behavioral levers to motivate employees.

...[A] biometric measurement station ... enables employees to track key measures such as their weight, body fat and blood pressure.

… Using these measurement stations provides real-time and accurate data that’s provided to the employer in an aggregated fashion ... So employees get to accurately track their progress over time and the company gets to track the results of their employee population as a whole. ...

To learn more, download the Virgin HealthMiles white paper, PAY-FOR-PREVENTION™:An Emerging Health and Productivity Paradigm.

About the author Bruce Shutan, former managing editor of Employee Benefit News, is a freelance writer based in Los Angeles.

The eyes have it

Employee Benefit News

By Kathleen Koster

April 5, 2010

As employers strain to emerge from the economic doldrums, vision benefits may come into focus for those who want to keep health care costs down by providing another avenue toward preventive care.

Employers that see the forest for the trees recognize the importance of providing access to routine eye check-ups, while those that don't could find themselves clouded by lost productivity and expensive health care claims. …

The Bibb County Board of Commissioners in Georgia understands first-hand the imperative of offering vision benefits.

"We didn't realize different diseases and potential health issues can be detectedduring a vision exam," says JennyBurdeshaw, Bibb County Board of Commissioners. "However, one of our employees found out he was diabetic when it was detected during hiseyeexam. He wasput on insulin within a week.That experience alone helped us change our thinking,andas a result,we now offer vision benefits to our employees.We want our employees to be healthy, and we believe getting regular eye examsis anotherway tonot only check your visual health, but to check on your overall health." …

"A vision plan tends to be a very highly regarded, yet very low-cost benefit. That's why vision insurance is one of the few products that has actually increased in popularity," says Jeff Spahr, staff vice president of vision and voluntary services at WellPoint.

For the most part, employees want vision benefits, as almost half of consumers without vision benefits are interested in obtaining them, according to Anthem's Specialty Trends Report. Yet, only half of all employers offered access to vision benefits in 2008, and employer contributions are declining, according to the report.

Perhaps if the remaining employers knew that, according to the Vision Council of America, vision disorders account for more than $8 billion in lost productivity, they would be more apt to offer vision benefits. In fact, uncorrected vision can decrease employee productivity by as much as 20%, finds the VCA Vision in Business Report.

VCA also discovered that employers stand to gain as much as $7 for each dollar spent on vision coverage. Further, a quarter of employees surveyed agree that having their vision checked and corrected would increase their productivity at work, reports a WellPoint survey.

Vision benefit plans can also serve as a gateway to employer wellness programs. VSP, for example, estimates they can funnel over 60% of people in vision plans into preventive care.

"You can't start managing people until you get them into preventive care. So, for every dollar that gets spent on eye care services, we're able to return back to an employer increased productivity and medical costs savings of about 94% through increased productivity on the job because they're healthier, lower turnover among those employees and lower overall medical costs," says Melody Healy, director of product strategy and integration at VSP.

Offering vision benefits, or at least making them available for purchase, "is an integral part of prevention," she concludes. "The vision benefit is a very good way of engaging people to start their path to wellness."

High value, high savings

Including vision care in a company's benefit package is a significant aspect in encouraging holistic health care. …

"The eyes are one of the few spots on the body where there is an unobstructed view of the circulatory system. Diseases like diabetes or arterial sclerosis can be picked up through a vision exam," he says. "The sooner that we can get folks into the system, especially with diabetes, where 20% to 30% don't know they have the condition, the greater impact we can have on reduced cost of care and improved quality of life as well." …

In fact, VSP® Vision Care helps save its customers nearly $3 billion annually on health care and human capital costs associated with the treatment of chronic diseases detectable via an eye examination, according to a study undertaken by Human Capital Management Services, Inc. on behalf of VSP.

The study showed that VSP client-companies are realizing these savings for the early detection of diabetes, hypertension and high cholesterol in the first year alone, directly related to health plan, disability and employee termination costs. …

Hear no communication, see no benefit

Andy Mechavich, senior manager of compensation and benefits for LECG/SMART, encourages employers to design their vision plans to cover preventive exams at 100% "to entice people to go and get their eyes checked."

Mechavich stresses communicating the advantages of vision care in the context of wellness. Even though 76% of employees are enrolled in their employer's vision benefit, nearly half of U.S. employees with access to a vision benefit through their employer aren't taking advantage of it, finds a recent employee survey conducted by Harris Interactive on behalf of Transitions Optical, Inc. …

Further, employees have limited knowledge of what their vision plan can do. Nearly 25% of employees who don't enroll in their plan say it's because they don't have vision or eye health problems. Only 21% of those questioned in the Transitions Optical survey select diagnosing or managing chronic disease as a reason for enrolling.

Likely contributing to the problem is lack of, or sparse, communication about vision benefits. …

Says Spahr: "Everything is in place for employees to use [vision benefits]; it's that gentle nudge from the employer that can really make a difference."

Tips for preventing, reducing computer eye strain

Encouraging vision eye check-ups is especially important in the digital age, when employees are constantly squinting at their Blackberries and working for hours in front of computer screens.

According to the American Optometric Association, nearly 90% of those who use a computer at least three hours a day suffer from vision problems associated with computer eye strain.

Symptoms of computer vision syndrome, according to VSP, include:

Blurred vision or a delay in focusing when shifting focus from the computer screen to objects farther away.

Feeling like there's something in your eyes, or burning/stinging and inflammation.

Eye discomfort.

Headaches.

VSP and AOA offer the following suggestions for mitigating the negative effects of computer eye strain:

Blink often. It washes your eyes in naturally therapeutic tears.

Follow the 20-20-20 rule: At least every 20 minutes, take a break to refocus your eyes by looking at something 20 feet away for 20 seconds, minimum.

Keep bright overhead lighting to a minimum. Use blinds and a screen instead to reduce monitor glare. Try to keep lighting off to the side.

Keep your monitor at least 20 inches from your eyes. The center should be about 4 to 6 inches below your eyes.

Enlarge the font size on your PDA or smartphone screen.

Ask your doctor to prescribe a pair of glasses that will make your eyes comfortable for viewing the computer screen.

Get an annual eye exam, letting your doctor know that you work on a computer.

10 Trends That Are Changing the Shape of Workplace Benefits

PLANSPONSOR.com

Change is a reality of life, and establishing and maintaining benefit programs that are competitive and distinctive requires an awareness of trends in the marketplace, in the population, in the legislative and regulatory worlds, and in the needs of the workers you hope to attract and retain.

While product development and enhancements certainly can play a role, there are also the overarching issues that drive and shape those developments. Here are 10 of which you should be aware.

1 Sandwich “Spread”?

Much has been written about the impact of the retirement of the Baby Boomers, the so-called Silver Tsunami. … Indeed, the Boomers increasingly find themselves with a new labeling—the “sandwich” generation—in which they are not only focused on their own financial concerns, but those of their parents and children as well. This may give participants longer to save for retirement (and less time to spend in retirement), providing those still-meager accumulations a much needed cushioning, and it also may ameliorate some of the nascent concerns about talent transitions, but it’s not like that was part of “the plan.”

2 The “To Versus Through” Debate

Target-date funds have long offered an apparent simplicity of design and implementation that have made them appealing to plan sponsors and plan participants alike, a unique combination that allowed participants to do the “right” thing (letting professionals manage their money and rebalance it on a regular basis) while, for the very most part, doing nothing at all. Ditto plan sponsors, …

Of course, the 2008 market brought to light vast differences in the philosophies underpinning these designs in terms of asset allocation and glide path (in fairness, those were in evidence in 2006/2007 when more-conservative models were ridiculed for their lagging returns). Much of that difference was explained later as a function of whether the glide path was designed to take the investor to the anticipated retirement date—or past it (ostensibly until death).

The debate is not yet resolved, nor perhaps can (or should) it be. Still, ahead of changes on the regulatory front, fund manufacturers appear to be making a concerted effort to be clearer about those assumptions; and, if that does not make for an easier decision, it nonetheless makes it more obvious that a “decision” must be made.

3 The Match “Catch”

One of the more troubling trends of the past year was an apparent uptick in the number of employers cutting or suspending their 401(k) match. …

… Perhaps workers no longer will take such things for granted because, after all, “free” money really isn’t.

4 Share Alikes?

While company-stock-related lawsuits still seem to be the most common, that initial series of revenue-sharing suits is still “out there.” For the very most part, the plaintiffs have not fared well, but two widely publicized cases—one a $16.5 million settlement by Caterpillar, and a second involving Wal-Mart, where last December the 8th U.S. Circuit Court of Appeals found triable issues of fact in the case—are likely to keep plan fiduciaries “jumpy.”…

5 “Tell” Tales

…[Beginning] with the 2009 plan-year filings, the Labor Department has broadly expanded the requirements for reporting compensation earned by plan service providers on Schedule C of the Form 5500 to explicitly require the reporting of both “direct” and “indirect” compensation earned by plan service providers. It is clear that the DoL views compliance with the Schedule C reporting requirements as part of a fiduciary’s obligation to evaluate the reasonableness of a service provider’s total compensation—at the same time that it stands to gain a better ability to use this data, which is now also to be filed electronically.

6 Pension Penchants

While many continue to talk about the wisdom of modifying defined contribution designs to more closely resemble the better attributes of their pension predecessors, trillions of dollars (and future benefits) still reside in those traditional defined benefit plans. … [These] programs are responding in a variety of creative ways: some outsourcing more, others less, some taking a more active stance in asset allocation, others opting for a stronger focus on liabilities. However, regardless, most are asking for—and by most accounts, receiving—fresh insights and input from the marketplace.

7 The End in Mind

For years, the retirement plan industry has focused on trying to help participants save as much as they could—all the while acknowledging that the real challenge was likely to be helping them live on that accumulated savings. As it turns out, a new generation of products has emerged that not only will help them do that, but also will help them begin making those investments/preparations while they are still in that accumulation “phase.”

Issues in product design (or perceptions about issues in product design) remain, but those gaps are closing (including the gap in perceptions), and the prospects for future market turmoil seem likely to keep these offerings high on plan sponsor radar screens. Also, let’s not forget that the DoL has been asking for information on “arrangements that provide income after retiring.”

8 Conflict Ed?

… Earlier this year, the DoL took a step back from the position it took in the final regulations on the subject put together … in 2008 before being halted, and then withdrawn last November… The new proposed regulations largely seem to restore the status quo in favor of level-fee advice only. …

9 Executive “Order”

The 2008 elections brought in … new leadership at various agencies that have a large impact on retirement plans. That has already brought about shifts in direction … while the financial crisis has reinforced the need for better disclosures on offerings like target-date funds.

10 Health Care, Reformed?

By most accounts, much of the “oxygen” in Washington for the past year has been sucked up (out?) by health-care talk and proposals. With a bill now signed, employers can begin to focus on what that means for their programs—and their workers. …

Nevin E. Adams
editors@plansponsor.com

Consumer misconceptions abound about funding long-term care

Life Insurance Selling

• Paul Hogan

Published 12/2/2009 
…[According] to a recent Home Instead Senior Care study … conducted by the Boomer Project (www.boomerproject.com) among 166 seniors and 444 adults, revealed that both seniors and adult children would use Social Security and Medicare to pay for senior care. The truth is, neither of these options is a viable funding mechanism for long-term care. The study participants were less likely to identify those sources of funds typically used to pay for senior care such as personal savings and retirement plans. …
“The reality is the best-laid retirement plans will be wiped out by a long-term care event,” Bill Comfort, a long-term care insurance specialist, broker and trainer who owns Comfort Assurance Group in St. Louis,says. “People fail to consider the extra costs associated with a long-term care disability in retirement, and that nothing will pay for the kind of care they want except their own money.”
The idea that Medicare and Social Security will pay for senior care is rooted in the misconception that … a government entitlement program … will cover such costs. “Many people do see the government taking care of disabled seniors in nursing homes,” Comfort says. “…Medicare only covers short-term acute and rehabilitative costs. When a nursing home is needed, Medicaid — a ‘means tested’ welfare program designed to help the poor of all ages — will pay. But that’s only when a senior has exhausted almost all of his or her own resources. And Medicaid generally pays only for care where a senior least wants to go: A certified nursing home.”
Medicaid not only requires seniors to deplete their assets, but once qualified, they must pay any remaining monthly income, including Social Security or a pension check, to the nursing home. Medicaid only pays the difference between the senior’s remaining income and the nursing home’s monthly charge. …
Comfort relates a story about a client who pays for long-term care insurance for her father as a result of an experience with her stepmother. “Her step-mother needed Alzheimer’s care and she qualified immediately for Medicaid. What the family didn’t realize is that they couldn’t choose the nursing home they wanted so she was placed farther away from her home,” Comfort says. “The daughter is paying for long-term care insurance now so that her father has more options if he needs care. …”
…“Growing older, which we all hope to do, will create some need for care, and that costs money…,” Comfort says. …
Paul Hogan is co-founder and CEO of Home Instead Senior Care. Home Instead Senior Care is among the nation’s largest providers of at-home care for seniors and has served more than 400,000 clients through a network of 800 franchise offices in the U.S. and 15 other countries. Hogan and his wife, Lori, are co-authors of Stages of Senior Care: Your Step-by-Step Guide to Making the Best Decisions (November 2009/McGraw Hill).  For more information, go to http://www.stagesofseniorcare.com/.

Employers Admit to Discriminating against the Overweight

PLANSPONSOR.com

January 21, 2010 (PLANSPONSOR.com) – A survey by a U.K. weight loss program provider finds employers pass up overweight job candidates because they assume the candidates are "lazy," "lack self control," and are "not hard workers."

According to a press release, the survey of 2,000 people by Slimming World and YouGov also found that when people who are overweight do get a job they are twice as likely to earn a low salary and four times more likely to suffer bullying about their weight. They are six times more likely to feel their appearance has caused them to be overlooked for promotion.
Data from the survey's 227 employers indicates that male bosses are particularly discriminatory. One in four male bosses say they would turn down a potential candidate based purely on their weight and one in 10 admit they have already done so, the press release said.
The survey found that people in the highest weight category (BMI 40+) are four times more likely than healthy weight people to ‘never’ feel confident and twice as likely to dread applying for a new job.
Rebecca Moore
editors@plansponsor.com

Andy and Sarah are Sick AGAIN

PLANSPONSOR.com

January 21, 2010 (PLANSPONSOR.com) – A new study finds employees named Andy or Sarah call in sick more than others.

According to the poll of 5,000 British workers and employers by the Viva entertainment channel, Steves are the next most likely males to call in sick to work, and Beckys are the next most likely females. … Paul, John, and Dave round out the top five for males, and Anne, Emma, and Debbie round out the top five for females.
The survey found the average employee has taken three days off work in the last 12 months due to illness, but admit they were well enough to make it in for two of those days … .
When faking sick, more than a third say they would try to avoid confrontation by texting their bosses, a quarter would e-mail them, and one in 14 would Tweet them. Among those who would phone their bosses, 44% admit to speaking in a quieter, more feeble voice to ensure their bosses believe them.
Some workers are quite the actors, as almost a third exaggerate their symptoms and more than a fifth make a reference to the doctor to help legitimize their absences. … In addition, more than third say they fake a willingness to work by telling their bosses they'll try and make it in later if they feel better, and another 19% offer to work from home.
However, it isn't illness that most employees use to get a day off. "The car wouldn't start" emerged as the most popular excuse, cited by a fifth of respondents, according to The Telegraph. One in six have gone as far as lying about their children being ill as a reason to dodge work, and the same number have claimed a death in the family.
Why lie to get out of work? Three in 10 employees said they did because they "simply fancied a day off," and one in five just wanted to stay in bed. More than a fifth were too drunk or hung over to do any work, while 15% disliked the weather outside or wanted a long weekend (see Flu Season Brings Out Workplace Hooky Players).

Wellness programs’ role in retention cited by nearly half of U.S. workers

Employee Benefit Adviser

Posted January 15, 2010 by Editorial Staff at 03:07PM.
Are wellness programs an effective employee retention tool? The results of a poll released Jan. 14 suggests that they are. In all, 45% of the employees surveyed said they would stay at their jobs longer because of the wellness programs their employers offered.
The online survey, sponsored by The Principal Financial Group, polled 1,102 employees at small and medium-sized companies (under 1,000 employees) and 602 retirees. It was conducted in late October.
The survey also found that 26% of employees miss fewer days of work because they participate in wellness programs. Just over half believe that wellness programs are very or somewhat successful in reducing health care costs, and about 30% participate primarily for that reason.
Most employees are interested in wellness programs that improve their physical fitness, the survey found. Onsite fitness facilities were the most desired programs at 27%, followed by fitness center discounts (23%) and weight management programs (19%). Apparently at least some employers were listening last year: Significantly more workers (15%) reported having access to fitness facilities in the fourth quarter of 2009 than a year earlier (11%).

A New Year's resolution: Pump up that wellness program

Employee Benefit Adviser

By Beth Taylor
December 1, 2009
A new year is about new beginnings. …[Now] … is a good time to pump up your … wellness programs. Whether [your] programs lost steam or never got off the ground, you can … plan for a jump-start in the new year with a few basic steps.

Brainstorm

Start by asking … why [your] wellness program stalled or hasn't started. What is at the root of the problem? Is it not knowing where to start, a lack of senior support, too little money or not enough time? Or all of the above? … Too many times, it is far easier, although much less satisfying, to simply not deal with the issue. …
Tackle each obstacle separately, but don't try to do it alone. There is power in brainstorming with others who have the same challenges. … Perhaps you … know employer groups in the community with thriving wellness programs. … Interacting with peers creates a dynamic synergy for new ideas.
Consider online wellness support groups and other online resources, such as the American Heart Association, American Cancer Society, WELCOA or Mypyramid.gov. There is a wealth of information and support out there. Find the champions for your cause.

Make a plan

Don't let the momentum gained from brainstorming wither and die like so many New Year's resolutions. Create a plan from the best ideas and start with what you know. … Gather information such as:

• Employee demographics
• Employee survey results
• Wellness offerings from carriers
• EAP benefits
• Claims data

The data provide insight into employees' interests, habits and possible topics for education.
Establish a calendar of events or a timeline to serve as the framework throughout the year. A good place to start is by incorporating the national monthly observation calendar. You can download a copy from the U.S. Department of Health & Human Services' Web site, healthfinder.gov. Events such as October's Breast Cancer Awareness and November's Great American Smoke Out receive a good deal of media attention. That attention helps reinforce your … worksite activities on wellness.

Start small

Starting and sustaining a wellness program is like running a marathon. The race begins with the first step, so start small. If it's a new wellness campaign, newsletters, brochures and "lunch and learns" on specific health topics are inexpensive, manageable first steps.
… If the wellness program stalled along the way, determine why and suggest a remedy. For example, if committee meetings don't produce results, introduce some "new blood." …
Whatever steps you take, measure your results. … Use the results to adjust strategies to keep employees interested in the program. If you don't measure it, you can't manage it.
Measuring results alone, however, may not provide the whole picture. A successful program encourages feedback. Invite "letters to the editor," evaluation forms or posts to an intranet. …
Feedback and results enable you to take the pulse of your … efforts. Together, they build a strong base for future planning for a more robust and comprehensive wellness program.

Just do it

Some New Year's resolutions never make it out of the box. …[It] does not matter how small the step, doing something is better than doing nothing. There may be false starts or stumbles along the way, but [you] can't finish what [you] don't start. Make 2010 the year they pump up that wellness program. Just do it.

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Taylor is a consultant and a certified wellness program manager for San Diego's Intercare Insurance Solutions.