The Barkley Buzz Newsletter August 2009 Issue

Risk Management News and Tips brought to you by Barkley Insurance & Risk Management

In this issue:

• Healthy Families Act
• PWC Reports Increase in 2010 Healthcare Costs
• Recession Increases Employment Litigation
• Healthy Workforce Act of 2009
• Benefit Costs - New Ways to Save

~ Healthy Families Act

Employers should be aware of the Healthy Families Act of 2009 (HFA) that was introduced in the House of Representatives earlier this year. It seeks to guarantee full-time employees 56 hours of paid sick leave each year to address their own health needs and the health needs of their families. Part-time employees would receive a pro-rata amount of leave. This federal legislation would apply to employers with 15 or more employees and would guarantee them one paid hour off for each 30 hours worked. Unused sick leave could be carried over from one year to the next. This leave would be in addition to any leave provided under the Family and Medical Leave Act (FMLA) or a state’s workers’ compensation law. Employers would have to amend their existing leave policies to make sure that they meet the requirements of the HFA.

While this legislation has a long way to go before enactment, and may face many changes along the way, employers should keep their eye on it.

Unlike an HMO, with a PPO plan you will most likely need to pay a deductible and there are generally plan maximums applied. If you are looking for freedom in choosing your doctor and hospital, and are willing to pay some additional costs, a PPO may be right for you.

~ PWC Reports Increase in 2010 Healthcare Costs

After surveying more than 500 employers and health insurers, PricewaterhouseCoopers predicts that employers will see a nine percent increase in healthcare costs in 2010. The report attributes the rise to elevated healthcare utilization from employees fearful of losing their jobs and rising unemployment. Healthcare reform legislation will have little impact on rising costs; in fact, the increased attention to healthcare may possibly slow increases.

Source: PricewaterhouseCoopers

Healthcare Reform: To receive a weekly update on healthcare reform, see the government site at www.healthreform.gov.

~ Recession Increases Employment Litigation

During tough economic times, there are more layoffs and performance-based terminations. Along with layoffs and terminations comes increased employment-related litigation and complaints. Now is the time to get some of the following compliance areas in order:

1. Correctly classifying an employee as exempt or nonexempt from overtime requirements
2. Timesheets that reflect the exact times an employee worked
3. Inaccurate I-9 forms
4. Attendance policies in alignment with state and federal FMLA laws
5. Consistent progressive discipline and termination policies
6. Annual employment law training for managers
7. Personnel files that contain adequate documentation of employee issues
8. Outdated employee handbook (make sure this is reviewed annually)
9. Compliance requirements based on number of employees (i.e., COBRA, FMLA, WARN Act)
10. Employment practices liability insurance that covers risk areas

~ Healthy Workforce Act of 2009

A bill that would provide a tax credit to companies offering “effective and comprehensive wellness programs” is likely to survive and be a part of what is produced from the healthcare reform debate, as it is currently receiving bipartisan support. The Healthy Workforce Act would amend the Internal Revenue Code (IRC) to provide a credit for the costs employers would incur in implementing such wellness programs for their employees.

The bill provides an annual credit for employees participating in wellness programs of $200 per employee for the first 200 employees and $100 per year for additional employees. To claim the credit, workplace wellness programs will need to consist of any of the three following wellness components:

1) Health Awareness Component
a. Health education
b. Health screenings

2) Employee Engagement Component
a. Workplace wellness committee
b. Employee participation tracking

3) Behavior Change Component – encouraging healthy living through counseling, seminars, online programs, or self-help materials.

4) Supportive Environment Component – including on-site policies promoting health and wellness, participation incentives, and the opportunity for employees to give input into the workplace wellness program.

The importance of workplace wellness is one area where business and labor agree.

~ Benefit Costs - New Ways to Save

Offer voluntary benefits as a way to help employees, even though your budget may be tight. Since group rates are often less expensive than individual policy coverage, this may be just the ticket for employees who want specialized coverage.

Offer a high-deductible health plan (HDHP) in conjunction with a wellness program. Make the incentives of the program link with the health plan, and encourage those with chronic conditions to participate in wellness initiatives.

Make your employees more accountable for their work performance by assessing what drives them and then focus on improvement with incentives focusing on those drivers.

Show your employees how much healthcare costs you by providing information about how much you pay. Cost transparency can lead to employees making smarter, more economical decisions about their health.

Show your employees that you care about their health and well-being. This will spur engagement (which may increase your profits), and may also encourage employees to get healthier because you are concerned.

Upper management should get health assessments and screenings first to show other employees how important preventive care is in reducing costs. Also, challenging your employees to be healthier may inspire them to take you up on the offer!

Encourage your employees to use generic medications versus brand. Also promote low-cost health screenings, fairs and on-site clinic care.