Vacation Time: The Ultimate Wellness Benefit?

“On average, Americans feel they can go about their daily routine for approximately six months (173 days) prior to feeling like they need a vacation. Unfortunately,…the average American goes about 11 months (47 weeks) between such breaks,” according to the fourth annual Springhill Suites travel survey.

 

The Health Benefits of Vacations

Regular vacations could be the ultimate wellness benefit. They reduce stress-related illnesses and lower risk of death by almost 20 percent in middle-aged men, according to a study published in 2000 by the State University of New York at Oswego. Twenty years’ worth of data from the Framingham Heart Study found that women who took two or more vacations a year cut their risk of a fatal heart attack by half. Evidence also shows that physical ailments can decrease or go away entirely during vacations, and they tend to stay away for a period after an employee returns to work.

Employee vacations benefit employers as well. Employee burnout rates decrease significantly during vacations, and life satisfaction increases. After a vacation, many employees find their work more interesting and become more efficient at their jobs, and the rate of absenteeism actually decreases. Conversely, when people don’t take the time off that they need, their health deteriorates—emotionally and physically—often resulting in medical expenses and more time away from the job.

The Unused Benefit?

Despite the health benefits of vacations, many employees fail to take their allotted time. A survey by Harris Interactive Inc. found that Americans left an average of 9.2 vacation days unused at the end of 2012, up from 6.2 days in 2011. Workers worry about losing their jobs, and many feel that if they take a vacation, they could be replaced. Some fear they’ll be seen as lazy for taking time off. But taking time off has nothing to do with commitment, as workers who take time for themselves are actually better employees.

According to the 2012 ERC Absence Management Practices Survey, the average employee loses 3.9 work days to unscheduled absences per year. Mental health, stress and “other” reasons (not illness, vacation or family needs) account for 20 percent of these absences. Other studies have found a correlation between overtime and absenteeism.

Encouraging your employees to take their vacation time could help reduce stress and unscheduled absences. Employers need to communicate the message that it’s okay to take time off, and develop policies that are consistent with that message.

Supporting Time Off

The Bureau of Labor Statistics reports that 77 percent of all private industry workers had access to paid vacation time. The percentage dropped to only 51 percent among workers in the lowest quartile by wage earned and only 37 percent among part-time workers. Despite the common perception of the stressed executive, lower-wage jobs often entail more stress, making vacation time just as important for your lower-paid employees.
 
To ensure employees have time off when needed, some employers have switched from a traditional package of sick leave and vacation leave to a system of paid leave banks. From 2002 to 2010, the proportion of employers offering paid leave banks jumped from 28 percent to 40 percent, while the proportion of employers offering traditional sick leave and vacation leave packages declined from 71 percent to 54 percent. A paid leave bank combines personal, sick and vacation days into one pool; details vary by employer. Some add a number of paid holidays, with the total number of days off based primarily on tenure. Organizations frequently permit rollovers into the following year, with a cap on the number of days that may be saved. Some employers allow employees to “buy” or “sell” a certain number of additional days each year to take unpaid leave.

Flexible time-off plans provide some advantages. The employer can eliminate situations where employees call in at the last minute pretending to be sick, when in fact they could have requested time off in advance. Employers that permit rollovers can also minimize a flood of end-of-year vacation requests from employees on a “use it or lose it” vacation benefit plan.

Most companies do require that all time off be pre-approved and, as a rule, limit the number of employees who may be out on a given day. This may reduce scheduling flexibility, especially for employees without seniority. But employers say that having this control allows them to balance workers’ time off so that it does not adversely affect productivity. While there will always be those who still call in at the last minute, flexible leave programs can help foster an environment of mutual respect between the employer and employee.

For more information on structuring a vacation or leave bank and other employee benefit programs, please contact us. 

 

Employee Benefits Report, June 2013
All rights reserved. ©2013 SmartsPro Marketing.

 

 

 

To Fire or Not to Fire...Employers Question What to do About Marijuana Now

Amendment 64 passes — what does this mean for employers?

With the passing of Amendment 64 – the legalization of marijuana for recreational use, many employers have grown concerned as what this will mean for them and their company policies.   With medical marijuana dispensaries popping up all over Colorado, it is no surprise that it has infiltrated the world of work. Employers and employees alike might be wondering, “Is it legal to use medical marijuana on the job?” After all, it is legal in Colorado, right?

Here is the scoop:

• Although marijuana is now legal in the state of Colorado, the Amendment 64 task force preserves the status quo in employer-employee relationships.  This gives employers the right to discipline employees as they see necessary for use of marijuana on or off the job based on the company drug policy.   To read the Task Force Report on the Implementation of Amendment 64, click here. 
• Medical marijuana is not given as a prescription drug. Rather, it is a recommendation for a patient to receive a medical marijuana card for their symptoms. Therefore, it is not granted the same consideration as prescribed drugs in the workplace.
• Medical marijuana is not considered a reasonable accommodation for an employee with a disability, under the Americans with Disabilities Act (ADA).

Recent Court Ruling

Brandon Coats worked as a telephone operator for Dish Network in Englewood, CO.  As a teenager he was paralyzed in a car crash and has been a medical marijuana user since 2009 to help him deal with debilitating muscle spasms that would otherwise prevent him from working.  Coats was fired from Dish Network in 2010 for failing a company drug test.  However, his employer did claim that Coats was never impaired while on the job.  Of course Coats sued to get his job back since marijuana use is legal in Colorado.  However, the court decided, “for an activity to be lawful in Colorado, it must be permitted by, and not contrary to, both state and federal law”.  His attorney, Michael Evans did mention something to think about, “this case not only impacts Mr. Coats, but also some 127,816 medical marijuana patient-employees in Colorado who could be summarily terminated even if they are in legal compliance with Colorado state law.”  Mr. Coats has stated that all he wants to do is work and he is on the hunt for a job.  It’s unfortunate that he is being punished for trying to be a productive citizen.  However, the employer can make its own decision according to federal and state law. 

What are your thoughts?  How are you handling recreational marijuana use at your company?  It is a conversation that needs to happen with your decision makers at your workplace since marijuana is now legal recreationally in the state of Colorado and it is a good idea to have a solid drug policy in place. 

What is the Amendment 64 Task Force?

The Amendment 64 Task Force was put in force by Governor Hickenlooper to consider and resolve a number of policies, legal and procedural issues to implement the new constitutional amendment.  The Task Force is comprised of 24 members representing various points of view from pot growers, state government officials, employers and the law enforcement community.  To read more about the Task Force and see all its members, click here. 

References:

Dinger, Anna.  (April 26, 2013).  Brandon Coats Case:  Court Rules Pot Smokers Can Be Fired From Their Jobs, Even in Medical Cases, Federal Law Trumps State Law, Colorado.  Retrieved from http://www.mstarz.com/articles/11845/20130426/brandon-coats-case-court-rules-pot-smokers-fired-jobs-even.htm

Ingold, John.  (Feb. 5, 2013).  Colorado marijuana task force says employers can fire for pot use.  The Denver Post.  Retrieved from http://www.denverpost.com/breakingnews/ci_22525445/state-awaits-feds-response-colorado-marijuana-legalization

Paulson, Steven K. (May 2, 2013). Colorado court says no employment protection for marijuana users.  Retrieved from http://www.coloradoan.com/viewart/20130425/NEWS11/304250020/Colorado-court-says-no-employment-protection-marijuana-users

(Dec. 10, 2012).  Gov. Hickenlooper signs Amendment 64 proclamation, creates task force to recommend needed legislative actions.  Retrieved from http://www.colorado.gov/cs/Satellite/GovHickenlooper/CBON/1251634887823

(Feb. 6, 2013).  Colorado Marijuana Task Force Endorses Firing Employees For Off-The-Job Pot Use.  Denver Huff Post.  Retrieved from http://www.huffingtonpost.com/2013/02/06/colorado-marijuana-task-force-off-the-job-marijuana-pot-use-fired-firing_n_2632822.html

(Feb. 17, 2013).  Amendment 64 seems clear on employment and post use.  The Denver Post Editorial Board.  Retrieved from http://www.denverpost.com/news/marijuana/ci_22593000/amendment-64-seems-clear-employment-and-pot-use

Celebrate Employee Benefits Day!

Tuesday, April 2 is Employee Benefits Day — a day recognized by the International Foundation of Employee Benefit Plans (IFEBP) to give tribute to administrators, benefits practitioners and professional advisors for providing quality employee benefits.

We thank you for your partnership and for the important role you play promoting your employees’ wellbeing.  Give yourself a pat on the back for your hard work and dedication!

We hope that you will take a moment this week to reflect and evaluate your current benefit offerings, to educate your employees on your benefits program, or to simply celebrate. 

Here’s our top ten list of ways you can celebrate at your workplace this year:

10.    Each day of this week highlight one of your benefits to educate employees on key features that each plan offers.

9.    Remind employees of the preventive care benefits covered by your health plan.

8.    Take some time out for fun.  Host a breakfast or lunch party for employees. 

7.    Take some time out for relaxation.  Bring in a massage therapist to give employees free chair massages. 

6.    Survey employees on their favorite benefits or on benefits they wish they had at your company.

5.    Incorporate wellness at your company with group fitness classes or the sharing of healthy recipes with colleagues.

4.    Host a trivia game with questions on the benefits you offer.

3.    Create a magnet with important phone numbers and contact information for your benefit plans.

2.    Share with employees their underutilized benefits such as an Employee Assistance Program (EAP).

1.    Educate your employees on Health Care Reform.  

This year, for National Employee Benefits Day, IFEBP is focusing on the Affordable Care Act (ACA), and has pulled together some resources to help you educate your employees.  Check out the following links and take time to educate your employees on what ACA means for them.

• What ACA Means for Workers: A Fact Sheet
• ACA Implementation Time Line
• Key ACA Terms

Have fun this week, and let us know if you would like our support in helping you to observe National Employee Benefits Day!

Top Five Reasons to Offer Voluntary Benefits

When health care reform is fully implemented in 2014, you, as an employer might be considering alternative options to broaden and deepen the benefits program you offer.  Voluntary benefits are a great way to enhance your benefits package without increasing layers of cost.  Voluntary benefits allow for the integration of optional voluntary, payroll-deducted benefits and help employees ensure they are covered against financial hardship should an unforeseen accident or illness occur. 

The good news is that employees want voluntary benefits to supplement their standard health insurance.  Consider this:

• 73 percent of employees believe in the value of personalized benefits and would like to see a greater variety of benefits to choose from.¹  More than half of employers are jumping on the band wagon of voluntary benefits in order to keep their competitive advantage among employees.
  
  
• 51 percent of employees are interested in a wider array of voluntary benefits that they can choose to purchase; however, only 41 percent of employers agree that voluntary benefits are a significant part of their benefits strategy.¹

Here are five reasons you should consider offering voluntary benefits to your employees:

1. You can increase your benefit offers without increasing cost.  Voluntary benefits are 100 percent employee paid; however, employees don’t seem to mind footing the bill.  Half of employees appreciate being able to obtain insurance through their employer and feel that it is easier than going elsewhere¹.  And younger workers, in particular, have a strong interest in having a wider array of voluntary benefits they can purchase through their employer (56 percent of Gen Y and 58 percent of Gen X workers have interest in voluntary benefits¹).
   
   
2. With more options, employees can customize their benefits to meet their personal needs.  Many employer benefits programs offer a “one size fits all” approach.  Voluntary benefits allow employees to pick and choose coverage for their personal situation, so they have a more custom fit for their needs, and they can ensure they are properly insured.
   
   
3. One-on-one communication improves understanding and appreciation of your employer-provided benefits.  Let’s face it; many of your employees don’t even bother to review the benefits enrollment kit that you have carefully prepared for them, and those who do may not completely understand it.  And four of 10 employees have no clue how much their health insurance costs². When voluntary benefits are done right, employees have access to a personal benefits counselor to walk them through their current employer-provided coverage and their voluntary options in a non-threatening and no-pressure manner.  Through the one-on-one guidance, employees gain a deeper understanding of their benefits and the associated costs and can make more informed decisions, which they will appreciate.  Plus, this format also allows you, as the employer, to deliver a wide range of other focused messages, including total compensation, dependent audits, health cost containment, 401(k) participation and wellness.
   
   
4. Studies show that offering voluntary benefits can help you build a healthier and more productive workforce.  Financial worries contribute to employee stress and productivity on the job.  Among today’s workforce, 40 percent do not feel their goals and dreams are financially protected, 36 percent would have to borrow money from friends, family or their 401(k) to pay unexpected costs, 28 percent have less than $500 in savings for an emergency, and 27 percent do not feel fully protected by their current insurance coverage³.  Financial concerns can often become a distraction at work.  The less time employees spend worrying about financial hardship, finding proper coverage and legal expertise, the more engaged and productive they are at work.  Progressive employers realize this link and are even going a step beyond and providing online tools and calculators to assess coverage needs or implementing healthy lifestyle and financial wellness programs.
   
   
5. Voluntary benefits give employers a competitive edge when it comes to hiring and retaining employees.  Today’s workforce is less loyal.  Yet studies have found that benefits satisfaction directly impacts overall job satisfaction.  Among employees who are very satisfied with their benefits, 61 percent feel loyalty to their employer; conversely, when very dissatisfied with their benefits, 24 percent felt loyal to their employer¹.  And, when a third of employees hope to be working elsewhere in the next year¹, it can only help to round out your benefits offerings.
   
   

Offer Options you can Trust! 

At Benefits & Incentives Group (BIG), we know that you want to value your employees by offering dependable benefits.

With a specialized focus and expertise in voluntary benefits, BIG is positioned to provide organizations with options that are relevant and affordable.  Contact Dave Uppinghouse at (303) 645-4710 or duppinghouse@bigroupinc.com for a no obligation proposal to provide these important and meaningful options to your employees and their families.

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¹ 10^th Annual MetLife Study of Employee Benefit Trends, 2012

² What Is $1 Billion an Hour Worth? Employee Perspectives on Benefits, LIMRA, April 2011

³ Aflac WorkForces Report, 2012

 

Generation ME — Are You Ready for ME and My Millennials?

Hi, my name is Monirah and I’m a Millennial.  

I am cynical and lack any sense of emotional intelligence.  I have an inflated sense of ability and know I can do everything better than you. — Well, at least that’s what majority may think of me. 

Yes, I am a Millennial, but I could be your best employee.  So, yes, there’s that confidence.  But I do believe in working hard to be your best employee.  Let me explain.

As a Millennial myself, I can tell you that this generation can hold great potential (and let’s not forget that Millennials are the most educated generation thus far); however, employers will need to change some management techniques in order to attract us and to keep us happy at work.  

Understanding the Millennial Generation
(born roughly between 1983 and 2000):

• We had “helicopter parents” who were very much involved in our lives way past the age of 18.  
• We lived a life of positive feedback and assurance from our teachers, parents and mentors.  
• We grew up with technology, so you might need to encourage us to pick up the phone.    
• We have little, or no, memory of the Cold War.  
• We have lived through political and economic turmoil.
• We have been strongly influenced by 9/11 and the economic downturn in the past decade.  

All of the factors above influence how Millennials choose their employer.  And I use the word “choose” because we Millennials feel very passionate about the company we work for, and we want to choose a company that has the same beliefs as our own. 

It is a common myth that Millennials have a bad attitude towards work in general and often feel ambivalence or animosity towards their employer.  Studies show this is just not true. Perhaps the conflict you may have with your Millennials in your workplace is simply a clash of cultures (the “Millennials vs. Generation X” or “Millennials vs. Baby Boomers”).

Generally, when employers think about hiring Millennials, they think about tightening up social media and smart phone rules.  It is true that Millennials have a very connected lifestyle.

• 60% compulsively check their smart phones.
• 90% check their smart phone first thing in the morning.
• 2 out of 5 would feel like a part of them was missing if they couldn’t check their phone constantly.²  

Thus, it’s not surprising that a resounding 71% do not obey IT policies in the workplace.² 

As a Millennial I can admit that I am constantly checking my phone, browsing Facebook and Tweeting.  I grew up in the age of multitasking and often find myself bored if I’m not doing three things at once.  To keep the Millennial happy at your company, it might be a good idea to throw in some Facebook or Twitter breaks.  Checking in with friends and family puts Millennials in a better cognitive mindset, and therefore, they are more productive throughout the day.   

Four Reasons to Keep your Millennials Happy

1. Most Millennials want to stay loyal to their company.³  Contrary to popular belief, it’s mostly Generation X workers — not Millennials — who expect to job hop frequently in order to boost their salary.
2. Millennials strive for a work-life balance.  Many will accept lower salaries in exchange for work flexibility.  Millennials grew up in a household where generally both parents worked and weren’t around often, and so they’ve decided they do not want that for their own children.  Flexible work hours are sure to make your Millennial staff more productive.
3. 86 percent of Millennials said they would leave an employer if they found out that the company had poor Corporate Social Responsibility (CSR).³ This is immensely different than previous generations.  Simply incorporating a couple paid days off every year to allow employees to volunteer would make your company look very competitive among Millennials entering the workforce.
4. Millennials in fact have a very strong work ethic.  Of the Millennial workforce, 53 percent want a job where they can make an impact⁴, and 33 percent have started their own business just to supplement their income.³  They are willing to go out and take a risk to create something of their own.  Many Millennials have paid their way through college while working and are determined to climb the corporate ladder.  They want to stay educated and earn the right for advancement.  Millennials are certainly not complacent.

 

How do Millennials rank benefits?

• Training and development: 22% rank number one._⁴
• Flexible work hours: 19% rank number one._⁴
• Health care benefits: 8% rank number one._⁴

 

Benefits that are most important to Millennials cost the least! Consider these:

Ever hear of unlimited vacation time?  Well, it exists!  (Hopefully by writing this blog I can get my company to jump on board with unlimited vacation time…hint, hint).  Some companies are allowing their employees to work from wherever, whenever, so long as they are meeting expectations.  So, if Natalie wants to work a week from South Africa, as long as she stays connected, she can!

Come on now, beer at work?  Even I thought this was crazy, but I get it.  If you can create an environment where Millennials actually want to be, imagine the productivity!

Five easy ways to engage your Millennials at work:

1. Create five- to 10-minute social media breaks for your employees to improve productivity.
2. Implement volunteer days that will allow your employees to volunteer for their favorite charity organization, or get the office together to volunteer as a team!
3. Create teams when working on a project.  Millennials feel better in touch with colleagues when working in a team environment.
4. Incorporate a fun day every quarter with a catered lunch, games, anything that will get employees out of their seat and smiling.
5. Encourage management to give feedback weekly to Millennials regarding their job performance.  Remember, Millennials want to excel and need to hear from their management team on how to do so.

Managing Millennials is surely different than managing your Generation X or Baby Boomer employees; however, if you consider the Millennials’ needs, you might just surprise yourself on how happy you could be with one of us as an employee. 

I need to be honest, we have quarterly fun days at my company with, dare I say, beer and wine (gasp!), and I brag about this with my fellow Millennials…yes, they are jealous!  I have been dubbed the “Energizer Bunny” by my colleagues.  I am always working fast and efficient to get the job done, because I care about my company. I know that my employer cares about the community and its employees, and I wouldn’t want to be anywhere else.  (And no, this is not a ploy to get a raise at my next review, remember I’m a Millennial, not a Generation X employee.)

Links:

• How "Millennial" are you?  Take the quiz to find out!
  On a scale of 0 to 100, how do you compare to the Millennial Generation?  Take the quiz at http://www.pewresearch.org/quiz/how-millennial-are-you/ to find out!
  
  
• Want to hear more?  Watch a webinar recording on Managing Millennials on our Client Resource Center.

 

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¹  Kowske, B., Rasch, R., & Wiley, J. (2010).  Millennial’s (lack of) attitude problem: An empirical examination of generational effects on work attitudes.  Journal Business of Psychology, (25), 273. Doi: 10.1007/s10869-010-9171-8

²  Cisco. (2012). Gen y: New dawn for work, play, identity. Retrieved from http://www.cisco.com/en/US/solutions/ns341/ns525/ns537/ns705/ns1120/2012-CCWTR-Chapter1-Global-Results.pdf

³  http://www.pwc.com/qx/en/managing-tomorrows-people/future-of-work/key-findings.jhtml

⁴  Meister, J. (2012).  Corporate social responsibility: a lever for employee attraction & engagement. Retrieved from http://www.forbes.com/sites/jeannemieister/2012/06/07/corporate-social-responsibility-a-level-for-employee-attraction-engagement/

 

Health Reform: What You Need to be Doing Now

We received fantastic feedback on our Health Reform webinar presented by Peter Marathas, our attorney partner who specializes in health care reform.  

5 Things Employers Must Know About Voting Rights in Colorado

With the election just around the corner, many employers have questions about employee voting rights.  If Americans can vote early or can use mail-in ballots, then am I required to give my employees time off to vote?

Many voters do choose to vote early these days; however, Americans have a choice.  Employees who are registered voters may choose whether or not they want to vote on Election Day, and if so, employers must allow them time off per Colorado law.  Colorado employers are required to provide up to two paid hours for employees to vote. 

Here's five things you should know about voting rights in Colorado:
(Supported by Colorado Revised Statute 1-7-102)

1. Employees who request time off to vote must be eligible electors or registered to vote.

2. The employees must provide prior notice that they will need time off to vote on Election Day. 

3. Employers must pay hourly employees no more than two hours at regular pay for their time off to vote.

4. The employer can specify the hours the employee can take off to vote; however, the employee can request those hours to be at the beginning or end of the day.

5. If there is a period of three hours or more between the time of the opening and closing of the polls that the employee is not required to be on the job, the employer does not have to grant paid time off for the employee to vote.

About the author:  Courtney Berg, SPHR, is the owner of Courtside Consulting, LLC, an HR consulting firm that creates solutions for HR departments in a myriad of environments. If you would like to hear more on this topic or have other HR questions, you can contact Courtney at cberg@courtsideconsulting.com or (720) 328-8870.  www.courtsideconsulting.com

Need quick answers to your HR questions? 

Answers to your HR questions — big or small — can be a phone call or email away.  For information about HR Direct, our HR consulting helpline, call (303) 750-6200 or email info@bigroupinc.com.

More Bang for Your Buck: Capitalizing on Your Benefits Investment

Yesterday we presented at the Boulder-Area HR Association on Using Strategic Communication to Capitalize on Your Benefits Investment.  If you were unable to attend, here's a quick recap:

Today's employees:

• Out of touch with the true cost of benefits.

• 4 of 10 employees lack any knowledge of how much their health insurance costs, and of the 60% who think they know, only 15% could give a close estimate.¹
• Only 48% of employers are providing information about the true value of their total compensation package.²

• Less loyal

• Employee loyalty is at an all-time low. 
• 1 in 3 employees hopes to be working elsewhere in the next 12 months.²

• Counting strongly on benefits and looking to employer to get them

• 49 percent of employees say that, because of the economy, they are counting on their employer to help them achieve financial security.²
• 50 percent of employees prefer to obtain benefits through their workplace because it is easier than looking elsewhere.²

• Bracing for benefits cuts that might not come

• 33 percent of employees expect their employer to reduce their benefits due to economic conditions, but only 10 percent of employers plan to do so.²
• Due to health care reform and the economy, employees are unsure what the future holds and are nervous about what will happen to their benefits.

• A long way from financial security

• Only 36 percent of employees are on track with their long-term financial goals, and 12 percent of employees haven't even started saving.²
• One in three Baby Boomers has had to postpone retirement due to economic conditions.²

• Multi-generational

• For the first time, employers have up to four generations to appeal to — all with different needs, views and communication preferences.
• Younger generations are more interested in benefits.  More than 60 percent of Gen X and Gen Y employees cite benefits as an important reason why they remain with their employer, and 62 percent are willing to bear more of the cost of their benefits rather than lose them.²

There's an opportunity.

With every challenge there is an opportunity.

We know that benefits satisfaction impacts employee satisfaction.  Employees who are satisfied with their benefits are nearly three times as likely to say they are satisfied with their benefits.² We also know that there is a direct correlation between effective communication and positive attributes such as benefits satisfaction and overall employee satisfaction. 

Benefits is full of complicating jargon, and now, with health reform, consumer-driven strategies and value-based health plans, there is an even greater need for employers to invest in benefits communications. Communication is no longer a "nice to do" business strategy, but rather a "must do".

Obviously you will see the greatest impact if you invest in a complete strategic communications plan, but if you don't have the resources, incorporating some simple strategies can make a difference. 

See our presentation for 10 strategies that will increase your communication effectiveness.

 

Get more bang for your benefit bucks — contact us to see how we can help you build and brand your benefits communication.

 

¹ What is $1 Billion an Hour Worth?  Employee Perspectives on Benefits, LIMRA April 2011

² Metlife's 10th Study of Employee Benefit Trends

Fee Disclosure Deadline Approaching — Are You Prepared?

 

It’s August, and by now you have hopefully opened the communication with your employees regarding the new fee disclosure requirements.  As a plan sponsor, you must have your notices delivered to your employees by the end of this month.

Fee Disclosures — Addressing Employee's Concerns

The new fee disclosure notice requirement is creating a catalyst for education.  Employees will likely be surprised by the fees upon first hearing about them, so be prepared to answer their tough questions and objections.  When communicating with employees, try to help them keep things in perpective.  If employees realize the value of their 401(k) plan, then they should be less upset by the fees.

Remind employees of the benefits of your 401(k) plan, such as:

• Free money:  If your company has a matching contribution, remind employee of this valuable benefit and encourage them to take advantage of it. 
  
  
• Automatic payroll deduction:  When employees are able to take advantage of pretax payroll deduction, they don’t have to worry about the temptation of spending that money on a frivolous spending spree.  Every pay period, they are saving money without even having to think about it.
  
  
• Federal tax savings:  Demonstrate how the tax savings outweighs the fees.  Depending on their federal tax bracket, employees might be able to significantly reduce their current taxes by allocating money to a pretax 401k and thus reducing their taxable income. 
  
  
• Greater contributions than an IRA:  The 2012 annual deferral limit for an Individual Retirement Account (IRA) is $5,000, while a 401(k) will allow up to $17,000 in contributions (or $22,500 for individuals age 50 or older).  Clearly, employees can build more savings through a 401(k).
  
  
• Resources:  Remind employees of the online resources or other benefits they have through your company or the plan provider.  If possible, set up an education series or see if your provider will come to provide education in a group or one-on-one setting.  Also, see if your provider has any tools to help you demonstrate how your company plan compares to individual accounts.

Finally, remember to break things down and to provide employees with information they will understand.  We've provided the memo below, which can supplement your notices and other communications, to help you explain the fees and the disclosure requirements to your employees.

• Fee disclosure employee educational memo

Here are some additional resources to help you fulfill your plan sponsor duty.

• DOL information about fiduciary responsibilities
• Understanding Retirement Fees and Expenses
• DOL Sample 401(k) plan fees disclosure form

 

Opportunity for Employers

The fee disclosure is a great opportunity to educate your employees about their retirement plan.  Your employees are hungry for information on how to become financially secure — and if they’re not, there is even more of a reason to start educating them on the importance of building savings and on the benefits of your 401(k) plan. 

According to Metlife’s 10^th Study of Employee Benefit Trends only 36 percent of employees are on track for achieving long-term financial security, and 12 percent haven’t even started.  And one in three Baby Boomers say that, because of current economic conditions, they need to postpone retirement.  More and more employees are prefering to obtain benefits at their workplace (even if fully voluntary and funded by the employee) and are leaning strongly on employers for help.

Employee loyalty towards employers is at a seven-year low.  Metlife’s study revealed that one in three employees reported that they hope to be working at a different company within the next 12 months.  And because benefits satisfaction is linked to employee loyalty, and communication is linked to benefits satisfaction, you have an opportunity to impact employee perceptions.  Perhaps it is time to start a financial wellness campaign.

If you have questions or concerns you would like to chat with a professional, contact Greg Peterson at Benefits & Incentives Group at (303) 645-4713 or gpeterson@bigroupinc.com.

Choosing the Right Employee Assistance Program

How important is choosing an EAP for your employees? 

If you want to create a culture that motivates and encourages employees to take care of themselves in order to increase productivity, then an Employee Assistance Program (EAP) can be a great addition to your workplace.  But you should know that not all EAPs are the same.  A good EAP can provide your company with a variety of different services to help improve work environment, employee wellbeing, and overall financial “bottom line”.  We all know that when we are not feeling our best our work suffers.  EAPs strive to take care of your company’s most valuable asset — your employees!

What can a comprehensive EAP do for your company?

• Decrease costs:  Problems that employees often seek help for through the EAP are often those that contribute to increased company costs in the forms of absenteeism, unproductive employees (presenteeism), high turnover rates (with subsequent recruitment and training costs) and high health care utilization (accompanied by increased insurance premiums).  Increase your margins by having an EAP to support your employees proactively.

• Management support:  EAP professionals can provide support to your management team on a variety of topics including, but not limited to, increasing work performance, resolving workplace conflicts, dealing with “difficult” employees, management/leadership training, identifying and addressing workplace performance issues, policy development and labor relations.

• Increase morale and job satisfaction:  Getting help with work/life issues leads to an increase in employee satisfaction and ability to work efficiently.  Happier, healthier employees make for a happier, healthier workplace!
  
  

Selecting an EAP: 

Your EAP should exist beyond a 1-800 number.  Services such as management and organizational support, critical incident services, employee wellness training and substance abuse education are just some of the added-values that should be available to your company. 

You often get what you pay for when it comes to purchasing an EAP.  Be aware of choosing an EAP based solely on cost.  Reading the fine print of your contract should become a best practice since unfortunately, there are insurance companies and group practices who tack on a very limited EAP to a basic mental health service package.  This may be a cheap option, but it may not be the best for your employees.

When selecting an EAP consider the following:

1. Does my EAP have a 24-hour crisis telephone response?

2. Do I receive confidential assessments, counseling services (including in-person sessions) and referrals to treatment or community resources?

3. Will I receive emergency intervention if a crisis occurs at the workplace?

4. Will I receive substance abuse expertise?

5. Do I have access to a qualified clinical provider?  Counselors should be appropriately qualified for the services they render.  Providers should ideally be Certified Employee Assistance Professional (CEAPs), which means that they have received extensive training in workplace issues.

6. Is my EAP all inclusive?  A comprehensive EAP should not charge extra for mandatory referrals, high utilization rates, or any of the items listed above; these items should be included in the quoted rate.

This article was contributed by Kate Ellis, MA, NCC, Employee Assistance/Workplace Programs Coordinator with Peer Assistance Services, Inc. 

Peer Assistance Services, Inc. (PAS) is a Colorado 501(c)(3) non-profit agency dedicated to quality, accessible prevention and intervention services in workplaces and communities, focusing on substance abuse and related issues.  At the core of PAS are the values of integrity, respect, compassion, perseverance and vision.  We incorporate these values into all that we do in the service of our mission.  For more information, please visit www.peerassistanceservices.org.

Are you a small employer in Colorado?  You might qualify for a FREE EAP and support services through Peer Assistance Services, Inc.  Contact us at (303) 369-0039 or go to http://www.peerassistanceservices.org/workplace/workplace.php to learn more.