We are nearing the end of 2009. Many employers halted their matches for this year waiting to see what the year had in store. Now is a great time to see if you need to make any adjustments to your plan before you close the books on 2009. With many plans opting to stop the match, many employees followed suit and stopped deferring. Now owners are finding themselves "locked out" of the plan because they can't pass their testing. This is a good time to see if making available additional plan options like Tiered Profit Sharing or Cash Balance would make sense for the highly compensated.
For 2010 most plans would have made their Safe Harbor election already. Although new plans can still make that election. If your still leery of having a stated match or safe harbor, you may want to consider automatic enrollment. By having employees automatically enrolled for a nominal contribution like 3%, most companies have seen their participation soar to as high as 90%. Employees can still elect to increase, decrease or stop the contribution. But you will have the inertia effect (not doing anything) working in your favor instead of against you.
Last, but certainly not least in importance, is education. Giving your employees the education and tools to make decisions can make this benefit more successful for them and for your business. We all know in down years (in the market) employees view their retirement plan as more of a detriment than a benefit. But reminding them of the long term nature, how they should be contributing in the down markets to take advantage of the better markets, diversifying and reviewing their investments; can all turn their attitude around as well.
Tuesday, December 8, 2009
Friday, November 13, 2009
What If You Could Prevent Cancer?
Many Americans take drugs to prevent heart disease and stroke. But cancer is different. More than 192,000 cases of Prostate Cancer will be diagnosed in the United States this year and more than 27,000 men will die from it. Yet there are two drugs that have been shown to prevent as many as 50,000 cases each year....after a "large and rigorous study" http://tinyurl.com/y9lago3. Nevertheless, researchers say, the drugs that work are largely ignored.
Scientists have what they consider definitive evidence that two drugs can cut the risk of breast cancer in half. But Women and Doctors have pretty much ignored the findings. Dr. Vogel says "If I had told you in 1990 that in 10 years I would have a pill that would cut the risk of breast cancer in half, you wouldn't have believed me". They found two and to his shock, "The world said, So What?"
People want control and prefer to believe exercise and nutrition will prevent disease. Yet study after study has failed to deliver definitive data. There are few ways knows for sure to prevent cancer. The biggest is to avoid cigarette smoking. That alone would drop the cancer death rate by a third. No other measure comes close.
Read the entire article at NYTimes.com http://tinyurl.com/y9lago3
Scientists have what they consider definitive evidence that two drugs can cut the risk of breast cancer in half. But Women and Doctors have pretty much ignored the findings. Dr. Vogel says "If I had told you in 1990 that in 10 years I would have a pill that would cut the risk of breast cancer in half, you wouldn't have believed me". They found two and to his shock, "The world said, So What?"
People want control and prefer to believe exercise and nutrition will prevent disease. Yet study after study has failed to deliver definitive data. There are few ways knows for sure to prevent cancer. The biggest is to avoid cigarette smoking. That alone would drop the cancer death rate by a third. No other measure comes close.
Read the entire article at NYTimes.com http://tinyurl.com/y9lago3
Tuesday, November 3, 2009
Designing Benefit Plans with Health in Mind
We all know that employee health affects our profitability, even if we can't quantify it. As employers we're trying to control the long term cost of offering health benefits by offering programs that address the overall wellness of our workforce and encourage healthy behavior. Not an easy task!
Designing benefit plans that encourage wellness makes sense because approximately 50% of medical costs are driven by unhealthy lifestyles that lead to costly disease management later. Comprehensive benefit design should focus on wellness as well as illness. So how do we encourage our employees to choose wellness? First lets consider that simply offering wellness programs gets participation of around 10%. Offering incentives like $50 or $100 to participate gets participation rates over 75% on average. With that in mind we can look at short and long term tools to help employees evaluate their current health, future likely health, and tools to change behavior to improve their health.
The short term tool is to encourage employees to take a risk assessment to identify and gauge their actual risk of health problems. The next step is to provide some sort of one-on-one or high-touch coaching to help employees change the behaviors and succeed.
By offering "wellness" instead of "illness" based benefits, employers can improve not only their cost of benefits over the long term, but their overall productivity.
Designing benefit plans that encourage wellness makes sense because approximately 50% of medical costs are driven by unhealthy lifestyles that lead to costly disease management later. Comprehensive benefit design should focus on wellness as well as illness. So how do we encourage our employees to choose wellness? First lets consider that simply offering wellness programs gets participation of around 10%. Offering incentives like $50 or $100 to participate gets participation rates over 75% on average. With that in mind we can look at short and long term tools to help employees evaluate their current health, future likely health, and tools to change behavior to improve their health.
The short term tool is to encourage employees to take a risk assessment to identify and gauge their actual risk of health problems. The next step is to provide some sort of one-on-one or high-touch coaching to help employees change the behaviors and succeed.
By offering "wellness" instead of "illness" based benefits, employers can improve not only their cost of benefits over the long term, but their overall productivity.
FREE Rx Guardian Prescription Monitor
The Rx Guardian, a FREE service provided by Aging with Grace, helps monitor the safety of your medications (including prescription drugs, over-the-counter drugs, nutritional supplements and herbal extracts). The Rx Guardian service is FREE, SAFE, and SECURE for registered individuals who want to be informed, stay informed and share feedback about their medications. The Rx Guardian helps you stay safer by: Routinely checking the safety of your medications, screening for drug-drug and drug-disease interactions. Alerting you and your doctor (optional) as important safety information arises for your medications. Providing an easily accessible summary of your medications and conditions that you can share with your healthcare team. Helping you learn and share treatment satisfaction and side effect information. Please visit https://rxguardian.iguard.org/
Monday, November 2, 2009
Best Practices for Retirement Plan
Investment Fiduciaries
1. Maintain an Investment Policy Statement
2. Meet the Section 404(c) ERISA requirements when constructing
an investment array
3. Select a default investment option that qualifies as a QDIA
4. Avoid proprietary fund requirements
5. Demand fee transparency and revenue neutrality
6. Construct an investment array appropriate to the skill level of
plan participants
Investment Fiduciaries
1. Maintain an Investment Policy Statement
2. Meet the Section 404(c) ERISA requirements when constructing
an investment array
3. Select a default investment option that qualifies as a QDIA
4. Avoid proprietary fund requirements
5. Demand fee transparency and revenue neutrality
6. Construct an investment array appropriate to the skill level of
plan participants
Friday, October 23, 2009
Target What Health Care Costs, Not What We Pay for It
For many people, the "cost of health care" simply means the amount of money consumers pay to acquire insurance. They believe the best way to control these prices is to implement a government-run insurer or, at the extreme, make us all part of a single-payer system. While this theory might appear logical, it's not very plausible. Simply by virtue of the fact that a single insurer could set rates and fees at whatever levels it chooses. The real issue isn't what we pay for health care. It's what health care costs and what we demand it do for us. And that's where we need to focus our attention if we want to make care more affordable.
Simply put, when it comes to consuming health care, Americans have a voracious appetite. We demand access to the newest medications to control or cure virtually anything that ails us (whether or not the new, expensive drugs are any better than the older, less expensive generics), which, of course, would have been diagnosed by the latest technically advanced test performed in a state-of-the-art facility. Maybe it's a byproduct of living in a country that leads the world in health care innovation (as opposed to performance) that we just expect there will be some sort of treatment, no matter what the ailment. Maybe it's a good problem to have; certainly one that millions of people in underdeveloped nations would die for - literally. Regardless, our infinite demand for tests, medications, hospitalization, procedures, devices, etc., is expensive. It's the primary driver of our country's astronomical health care price tag
But it certainly isn't the only one. Much of the reason we seek so much medical treatment is because we're not exactly the healthiest people on the planet - quite the opposite. As much as society has embraced diet and exercise, we are still a nation of chronically ill, whether it's obesity, diabetes, heart disease or one of any number of other conditions. An increased focus on wellness by us as individuals and as a society would go a long way toward containing health care costs. It's simple: healthier consumers require less health care which, obviously, saves money.
Regulation also plays into the equation. We must take a long, hard look at existing medical malpractice laws. Currently, physicians are practicing what might be considered defensive medicine. They're so wary of being sued that they're over-prescribing tests and treatments. If we undertake a certain measure of medical law reform, we can potentially save millions.
These are just a few examples; there are numerous other factors that contribute to the rising cost of health care and this where we need to focus our attention in order to legitimately change the system. It's not just a matter of what we pay for coverage. It's far more complex than that. Attempting to simply lower the cost of insurance premiums is a band aid for an ailment that requires major reconstructive surgery
Simply put, when it comes to consuming health care, Americans have a voracious appetite. We demand access to the newest medications to control or cure virtually anything that ails us (whether or not the new, expensive drugs are any better than the older, less expensive generics), which, of course, would have been diagnosed by the latest technically advanced test performed in a state-of-the-art facility. Maybe it's a byproduct of living in a country that leads the world in health care innovation (as opposed to performance) that we just expect there will be some sort of treatment, no matter what the ailment. Maybe it's a good problem to have; certainly one that millions of people in underdeveloped nations would die for - literally. Regardless, our infinite demand for tests, medications, hospitalization, procedures, devices, etc., is expensive. It's the primary driver of our country's astronomical health care price tag
But it certainly isn't the only one. Much of the reason we seek so much medical treatment is because we're not exactly the healthiest people on the planet - quite the opposite. As much as society has embraced diet and exercise, we are still a nation of chronically ill, whether it's obesity, diabetes, heart disease or one of any number of other conditions. An increased focus on wellness by us as individuals and as a society would go a long way toward containing health care costs. It's simple: healthier consumers require less health care which, obviously, saves money.
Regulation also plays into the equation. We must take a long, hard look at existing medical malpractice laws. Currently, physicians are practicing what might be considered defensive medicine. They're so wary of being sued that they're over-prescribing tests and treatments. If we undertake a certain measure of medical law reform, we can potentially save millions.
These are just a few examples; there are numerous other factors that contribute to the rising cost of health care and this where we need to focus our attention in order to legitimately change the system. It's not just a matter of what we pay for coverage. It's far more complex than that. Attempting to simply lower the cost of insurance premiums is a band aid for an ailment that requires major reconstructive surgery
Wednesday, October 21, 2009
Termination of Employees on FMLA - Significant Development
There has been a significant development regarding the rights of employers to terminate an employee who has exhausted a job protected leave of absence. The EEOC has taken the position that if an employee is on a disability leave of absence the employer may not automatically terminate the employee when the legally required leave of absence expires. For example, if an employee is on a FMLA disability leave, once the 12 weeks of FMLA have expired the employer may not use that time limit as a reason to terminate the employee.
The employer is now required to treat a request for additional leave as a request for a "reasonable accommodation" under the American with Disabilities Act. That will require the employer to meet with the employee and engage in an "interactive process" to determine if the employee can grant the additional leave without creating an undue hardship on the employer.
In any case such as this employers should obtain legal advice before terminating an employee whose job protected period of a leave of absence has expired.
The employer is now required to treat a request for additional leave as a request for a "reasonable accommodation" under the American with Disabilities Act. That will require the employer to meet with the employee and engage in an "interactive process" to determine if the employee can grant the additional leave without creating an undue hardship on the employer.
In any case such as this employers should obtain legal advice before terminating an employee whose job protected period of a leave of absence has expired.
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