The Barkley Buzz Newsletter July 2009 Issue

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

In this issue:

• Employers and Health Savings Accounts (HSAs)
• COBRA Subsidy Action Items
• Creating an Employee Stimulus Package
• 10 Signs Your Customer is Going Under

~ Employers and Health Savings Accounts (HSAs)

Many of the benefits of choosing a Health Savings Account (HSA) over a traditional health insurance plan can directly affect the bottom line of an employer’s benefit budget. For instance:

• HSAs are dependent on a high deductible insurance policy, which lowers the premiums of the employee’s plan.
• All contributions to the HSA are pre-tax, lowering the gross payroll and reducing the amount of taxes the employer must pay.
• Employers may contribute to HSAs.
• HSAs capture the attention of employees by shifting payment responsibility.
• Employers incent employees by funding an HSA based on the employee’s collaboration in the healthcare and wellness components Some reasons employees benefit from HSAs are:
• Their contributions are pre-tax.
• Interest and other earnings on HSAs are tax-free.
• Withdrawals for qualified medical expenses are tax-free.
• No year-end loss – HSA balances grow from year to year.

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.

~ COBRA Subsidy Action Items

The following implementation items for the COBRA Premium Assistance Rules are suggested by the Employee Benefit Institute of America:

1) Identify all current assistance eligible individuals (AEIs).
2) Identify all potential AEIs.
3) Prepare notice of extended election period and send it to all potential AEIs.
4) Prepare and send an additional notification of availability of premium reduction (and option to enroll in different coverage, if permitted by employer) to all individuals who are or were qualified beneficiaries based on any qualifying event that occurred on or after September 1, 2008 (other than potential AEIs).
5) Prepare and send an additional notification of availability of premium reduction (and option to enroll in different coverage, if permitted by employer) with all new COBRA election notices.
6) Implement COBRA assistance for AEIs for COBRA coverage periods that start on or after February 17, 2009.
7) Implement the plan enrollment option.
8) Review, revise, and, if necessary, redistribute existing plan notices, disclosures and forms.
9) Prepare and distribute new notices and forms. Model notices can be found on your client portal and at www.dol.gov/ebsa/COBRAmodelnotice.html.
10) Review and revise COBRA administration procedures. Source: EBIA

~ Creating an Employee Stimulus Package

In a time of pay cuts, layoffs and pay freezes, employee morale is plummeting just as fast as their 401(k)s. To rescue and restore productivity, organizations need to apply sincere employee recognition strategies with the hope of re-engaging and rallying them around the company’s objectives. Try these techniques to light a motivational fire:

Recognize a Job Well Done Often. Always let people know that their efforts are worthy, valued and appreciated. By recognizing employees throughout the year, you are creating an atmosphere of appreciation, which generally naturally boosts motivation and productivity.

Encourage Others to Thank Coworkers for their Contributions. Constantly promote a culture of recognition and gratitude among coworkers to hopefully create a more positive environment.

Link Recognition to the Bigger Picture. Explain to employees how their efforts are directly contributing to the company’s goals and values. This will make them want to repeat those good behaviors, as they feel they are truly making a difference.

Communicate with Employees Constantly. Always give workers updates on the company’s progress to avoid negative rumors from spreading. This will raise awareness, boost performance and continue to develop a culture of appreciation for one another.

Giving sincere praise costs nothing, beyond a bit of your time – yet it can do volumes for boosting morale.

~ 10 Signs Your Customer is Going Under

According to CFO.com, in order to reduce the risk of losing payments, be on the lookout for signs that your customer is having financial difficulties. The following are 10 telltale signs.

1) Changing payment patterns – Customer falling behind in making payments.
2) Shifting buying habits – A regular customer is no longer buying.
3) Constant nitpicking – Your low-maintenance client now has a list of demands.
4) Shrinking cash flow – If you have access to your customer’s financial statements, watch for cash flow problems.
5) Large accruals – Companies in trouble have large accruals on their balance sheets.
6) Tight lips – Your customer would normally share financials and now won’t.
7) High day sales outstanding – Trouble collecting receivables spells problems for you.
8) Managerial shuffling.
9) Persistent rumors – Keep your ears open... the rumors are often true.
10) Tax liens – A clear sign the company is going under.