3 Questions Employers Should Ask During America Saves Week

This article was published on February 26, 2018 on Employee Benefit News, written by Phil Waldeck.

We are often asked by the employers we work with, “How can we help our employees boost their financial health?” America Saves Week — an event running Feb. 26-March 3 which encourages organizations and employees to promote good savings behavior — is a great time to make answering this question a priority.

Four in five employers (82%) believe their company will benefit from a financially secure workforce, according to Prudential research, yet only 20% of employers offer a financial well-being program.

Knowing where to start is sometimes the biggest hurdle. Below are three questions employers should consider, which can help empower employees to secure their financial futures.

How do I know if I am offering the right benefits package for my employees?

Benefits should drive the right employee behaviors, which can lead to a more engaged and secure workforce. Data analysis can help an employer better understand their current workforce in terms of demographics, geography, training and skill levels, as well as the financial risks their workforce faces. Matching up characteristics of the current workforce with talent requirements for the future can help to pinpoint plan design opportunities to maximize the investment employers are making in benefits programs.

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Photo Source: BenefitNews.com

Surveys and assessments that measure the financial well-being of individual workers, as well as their opinions and utilization of available benefits, are also critical. For example, according to employee self-assessments administered by Prudential, the top three sources of financial stress are saving for the future (67%), paying monthly bills (57%) and credit card debt (42%). Armed with this information, employers can address the gaps in their benefits packages.

How can I design a financial education program that addresses my employees’ needs?

Benefits providers who are experienced in retirement, financial planning and insurance plan design are uniquely positioned to help employers integrate financial education tools and solutions with traditional benefits in a comprehensive package. The program should be customized based on employees’ unique needs — not a one-size-fits-all approach.

For example, if a company offers a 50% match to employees who contribute 6% to their 401(k) plan, yet only 75% of employees are enrolled, the employer likely faces two problems: Many of their people are not saving at all, and those who do save might save up to but not beyond 6%, which may not be enough. Traditional responses to improve participation and savings rates could include increasing the match or adding auto-enrollment and auto-escalation.

Both strategies will help drive the desired employee behavior, but a broader look at financial well-being also is appropriate. If analysis shows that the 25% of employees not participating also struggle with student loan debt, the problem may not be a lack of desire, but rather a perceived lack of ability to save. In this case, a student debt relief or debt management benefit, paired with the changes above, may be a more attractive proposition. It helps the employee resolve financial concerns, encourages long-term savings for retirement and increases appreciation for the employer-provided benefit. Implementation of any changes can be timed to coincide with a pay increase and as a result any “sticker shock” related to the change is minimized.

Other solutions are available to help with day-to-day budgeting or building up emergency savings, which have the added benefit of discouraging workers from tapping into their retirement accounts to cover short-term needs. This broader approach to financial health can help employers truly maximize the effect of their benefit package on workforce management activities, allowing them to better recruit talent and retain talent and position their employees to be able to retire when desired. A broader approach to employee financial health provides better outcomes for employees while delivering significant and a quantifiable impact to an employer’s bottom line.

How can I inspire my employees to take action in their finances?

“I’ll do it later,” “It won’t happen to me,” and “I want it now” are powerful forces that derail financial health. It takes more than a few emails during the open enrollment period to battle these ingrained behaviors.

Well-designed financial education programs run throughout the year and utilize multiple communication channels, from one-on-one sessions and group seminars to targeted educational campaigns that speak to a company’s culture and address employee challenges at different life stages.

Millennials might be motivated by saving for that first home, while baby boomers may seek ways to maximize retirement income as they approach retirement. Online tools, mobile apps, videos, interactive experiences and games can be designed to help employees better visualize their goals.

Fortunately, a growing number of organizations recognize that benefits packages need to include financial wellness solutions — our study found that 50% of employers plan to or would like to offer these programs in the future. There is proof that it is a model for success, one that benefits everyone.

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CMS Modifies Bundled Pay Requirements

ebso-bundled-paymentsWhile hospitals in 34 geographic areas will still be required to participate in the Comprehensive Care for Joint Replacement Model, hundreds of acute care hospitals in other areas have received a reprieve. In addition to modifying CJR model compliance, CMS recently finalized plans to cancel the Episode Payment and Cardiac Rehabilitation Incentive Payment Models, both of which were scheduled to become effective on January 1, 2018.

While a number of hospitals will voluntarily participate in the CJR model and others have expressed interest to participate in the two cancelled models, the agency said there would not be enough time to restructure the models prior to the planned 2018 start date. Even though some have criticized the Trump administration for a lack of interest in value-based care, the administration has expressed a strong commitment to value-based payment, but says it prefers voluntary models.

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Commonsense Reporting Bill Introduced

commonsense-reportingIn October, a bipartisan group of senators introduced a bill that would ease the ACA reporting mandates for employer-sponsored health plans. The bill would roll back the reporting requirements of Section 6056 and replace them with a voluntary reporting system. The bill would also allow payers to transmit employee notices electronically rather than having to send paper statements by mail.

While self-funded health plans must now comply with Sections 6055 and 6056, it is not yet clear how the bill would affect Section 6055 requirements. Senators Rob Portman of Ohio and Mark Warner of Virginia, sponsors of the bill, say their proposal would give the government a more effective way of applying premium tax credits to consumers who purchase insurance through an Exchange, something the administration has been trying to accomplish.

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ACA Mandate Penalty Eliminated

aca-mandateThe ACA has required people to have what the government has classified as minimum essential coverage, or else pay a penalty which now amounts to 2.5% of modified adjusted gross income over the income tax filing threshold.

While the House version of tax reform did not change the penalty in any way, the Senate version cut the penalty to 0% and in joint conference debates, the reduction was kept in the bill that was just passed by both houses. The Senate provision is not a repeal of the penalty, but instead a reduction, which could be increased by Congress in the future. While lower corporate and personal tax rates will take effect this year, this reduction will not become effective until 2019.

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Self-Service Benefits Education

siriWhile it may not yet be widespread, some companies are looking for ways to use voice-activated assistants such as Siri and Emma to provide plan members with answers about annual contribution limits, account balances and other details regarding flexible spending accounts, HSAs, HRAs and more. Many hope that linking these intelligent assistants to a mobile app will make it easier than ever for members to get answers to questions when they need them.

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12 Billion Workdays Lost

healthRecent findings reported by the World Health Organization (WHO) report that without a greater willingness to tackle anxiety and depression, a staggering 12 billion days will be lost between now and 2030. Put in financial terms, these disorders are costing the world nearly $1 trillion each year in lost productivity. It’s no wonder why a growing number of employers are considering on-site behavioral health clinics and other ways to tackle this growing problem.

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Maybe You Should Eat Earlier

eat-earlierThe old saying “timing is everything” may even apply to when you eat your meals, according to Michael Pollan, author of In Defense of Food. Skipping breakfast or having an occasional late dinner is fine, but sticking to an earlier eating schedule may contribute to healthier living by helping you maintain a healthy weight. Findings were based on a small study implemented over an 8-week period in which adults had three meals and two snacks between 8 a.m. and 7 p.m., followed by a two week break and eight weeks of a later schedule, which included three meals and two snacks eaten between noon and 11 p.m.

The later eating schedule resulted in weight gain and a negative impact on insulin levels, cholesterol and fat metabolism. The study also showed that when people ate earlier, they stayed satisfied longer, which helped them prevent overeating. Given our hectic schedules, eating later occasionally is hard to avoid. But it will help if you can make an effort to get back to an earlier schedule.

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Questions for Your Doctor

doctor-patientAccording to a Medscape survey of more than 19,000 physicians, the average patient spends between 13 and 16 minutes with their physician during an office visit. Given the short amount of time, it is probably best to focus on two or three things you want your doctor to address. It may also help to prepare a list of questions ahead of time. Here are a few you may want to consider.

  1. Which health websites do you trust?
  2. What is this medication I’m taking and why am I taking it?
  3. If you’re a smoker, how can I get help to stop?
  4. Are my screenings and vaccinations up to date?
  5. What is a healthy weight for me and how can I get to that?
  6. What do you do to stay in shape?
  7. If you’re taking a prescribed opioid painkiller, ask if it’s really necessary and what else you might take?
  8. What are some things I can do before my next appointment to make me healthier?
  9. If a test is ordered, ask what it is for and what are you trying to learn from it.
  10. When a specific treatment is recommended, don’t hesitate to ask about other alternatives.

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Doing What We Can

ebso-doing-what-we-can-blogWe often hear of professional athletes succeeding under pressure by staying “in the moment” and remaining focused on the things that are within their control. This challenge can be applied to the uncomfortable position all of us find ourselves in today – somewhere between complying with existing laws and anticipating the unknowns coming from Washington.

While the IRS has relaxed enforcement of the individual mandate and acknowledged problems in the ACA reporting system, it has confirmed that an applicable large employer is still subject to an employer shared responsibility payment if it fails to offer coverage to 95% of its full-time employees. We continue to help large employers offer minimum essential coverage to avoid penalties, when appropriate, and track offers of coverage to comply with reporting requirements on IRS forms 1094 and 1095.

Other matters remain up in the air as well, including the so-called Cadillac tax on high-cost health plans and any changes in maximum contributions that may be made to HSAs, which would require legislative action. While any significant ACA repeal, replace or repair efforts appear to be overshadowed by the Administration’s interest in tax reform, we continue to monitor developments in healthcare reform and keep our clients and partners informed. It’s our way of doing what we can and remaining “in the moment.”

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Employees Contributing More

hsa-piggy-bankThe gradual transition to high deductible health plans is having a significant impact on out-of-pocket costs, according to a study released by the Kaiser Family Foundation/Health Research & Educational Trust. In 2016, for the first time, just over half of all workers (51%) with single coverage faced a deductible of at least $1,000. The study also showed that 29% of workers were in high-deductible plans compared to just 20% two years earlier.

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