Student Loan Benefits Catch On

Consulting firm Willis Towers Watson expects more than a third of employers to offer student loan consolidation programs by 2021. This represents huge growth, since the Society of Human Resource Management says only 4% of employers offer student loan repayment benefits now. Willis also expects 35% of employers to offer student loan refinancing arrangements by 2021. Many employers offering this benefit are doing so by distributing a lump sum benefit over 5 to 8 years. It’s no surprise that this approach seems to be boosting employee retention rates – since millennials and Gen Z employees are strapped with about $30,000 of student loan debt and in many cases, lower wages than their parents were making at their age.

Penalties Increase for Employers Violating Certain Federal Labor Laws

Common-Mistakes-when-Paying-EmployeesEmployers that do not comply with certain requirements under a number of federal labor laws will face increased fines beginning with civil penalties assessed after August 1, 2016 (whose associated violations occurred after November 2, 2015).

Key Penalty Increases
Penalty increases announced by the U.S. Department of Labor that may be of particular interest include:

  • Repeated or willful violations of the Fair Labor Standards Act (FLSA) minimum wage or overtime pay requirements will be subject to a penalty of up to $1,894 per violation (formerly $1,100);
  • Willful violations of the Family and Medical Leave Act (FMLA) posting requirement will be subject to a penalty not to exceed $163 for each separate offense (formerly $110) (note: covered employers must post this general notice even if no employees are eligible for FMLA leave);
  • Failure to provide employees with a Children’s Health Insurance Program (CHIP) notice will be subject to a penalty of up to $110 per day per violation (formerly $100);
  • Failure to provide a Summary of Benefits and Coverage (SBC) will be subject to a penalty of up to $1,087 per failure (formerly $1,000);
  • Failure or refusal to file a Form 5500 will be subject to a penalty of up to $2,063 per day (formerly $1,100); and
  • Violations of the Occupational Safety and Health Administration’s posting requirement will be subject to a maximum penalty of $12,471 for each violation (formerly $7,000).

Our Compliance by Company Size chart features a summary of key federal labor laws that may apply to a company based on its number of employees.

Does Your Health Plan Need a Physical Exam?

physical-examYou might wonder why this question at this time of year, but that’s exactly the point. Now that crunch time and the pressure of renewal are behind us, take a deep dive into your health plan to learn where your health care dollars are going.

Performing a checkup on your health plan means reviewing data on claims and utilization. While employers with fully insured plans may lack this data, those who self-fund should have reports that identify how your company and your members have benefitted from the plan. More importantly, reviewing claims and utilization data can help determine if any patterns are developing that might call for additional health screenings or wellness measures. Finally, it’s a good time to see how your plan is performing compared to national or perhaps regional trends.

Put Your Information to Work
Many employers are simply not aware of what is available to them in terms of data. Others know they have the data but don’t know what to do with it. That’s where the right TPA can help. Our data analysis and custom reporting capabilities help our self-funded clients analyze plan performance and benchmark data to compare diagnoses, procedure costs and utilization patterns.

These tools can help employers and advisors forecast future plan costs and take steps to contain future costs. Plan design changes, chronic disease management, health coaching – these options and many more can help when plan information is analyzed and understood. Resolve to put claims data to work for your health plan this year. Your members will enjoy better benefits and your plan will be much more efficient.

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Avoiding Employee Misclassification Under the Fair Labor Standards Act

employee-puzzle-02New guidance is available for employers on how to avoid misclassifying employees as independent contractors for purposes of the federal Fair Labor Standards Act (FLSA), which sets basic minimum wage and overtime pay standards. According to the guidance, most workers are employees under the FLSA.

To determine whether a worker is an employee or an independent contractor under the FLSA, courts and the U.S. Department of Labor use the multi-factor “economic realities” test, outlined below, which focuses on whether the worker is economically dependent on the employer or truly in business for him or herself:

  • Is the Work an Integral Part of the Employer’s Business? If the work performed by a worker is integral to the employer’s business, it is more likely that the worker is economically dependent on the employer. A true independent contractor’s work, on the other hand, is unlikely to be integral to the employer’s business.
  • Does the Worker’s Managerial Skill Affect the Worker’s Opportunity for Profit or Loss? This factor should not focus on the worker’s ability to work more hours, but rather on whether the worker exercises managerial skills and whether those skills affect the worker’s opportunity for both profit and loss.
  • How Does the Worker’s Relative Investment Compare to the Employer’s Investment? The worker should make some investment (and therefore undertake at least some risk for a loss) in order for there to be an indication that he or she is an independent business. The worker’s investment should not be relatively minor compared with that of the employer. If the worker’s investment is relatively minor, that suggests the worker and the employer are not on similar footings and that the worker may be economically dependent on the employer.
  • Does the Work Performed Require Special Skill and Initiative? A worker’s business skills, judgment, and initiative—not his or her technical skills—will aid in determining whether the worker is economically independent.
  • Is the Relationship Between the Worker and Employer Permanent or Indefinite? Permanency or indefiniteness in the worker’s relationship with the employer suggests that the worker is an employee. However, a lack of permanence or indefiniteness does not automatically suggest an independent contractor relationship. The key is whether the lack of permanence or indefiniteness is due to operational characteristics intrinsic to the industry, or the worker’s own business initiative.
  • What is the Nature and Degree of the Employer’s Control? The employer’s control should be analyzed in light of the ultimate determination of whether the worker is economically dependent on the employer or truly an independent businessperson. The worker must control meaningful aspects of the work performed such that it is possible to view the worker as a person conducting his or her own business.

More information on which employers and workers are covered under the FLSA is featured in our section on the Fair Labor Standards Act.

OSHA Updates ‘It’s The Law’ Poster for Employers to Display in the Workplace

Its-The-LawThe U.S. Occupational Safety and Health Administration (OSHA) has released a new version of its “Job Safety and Health – It’s The Law!” poster. Employers must display the poster in a conspicuous place where workers can see it; however, previous versions of the poster do not need to be replaced. (Employers in states operating OSHA-approved state plans should obtain and post the state’s equivalent poster.)

The newly designed poster informs employers of their legal obligation to provide a safe workplace. It also informs workers of their right to request an OSHA inspection of their workplaces, receive information and training on job hazards, report a work-related injury or illness, and raise safety and health concerns with their employers or OSHA without being retaliated against.

Additionally, the poster has been updated to include the new reporting obligations for employers, who must now report every fatality and every hospitalization, amputation, and loss of an eye. It also informs employers of their responsibilities to train all workers in a language and vocabulary they can understand, comply with OSHA standards, and post citations at or near the place of an alleged violation.

To learn about other federal notices required to be displayed in the workplace, please visit our section on Federal Poster Requirements.

Employment-Based Wellness Programs Require Careful Design

health-and-wellnessEmployers that offer certain programs designed to improve employee health must be mindful that such programs are subject to a number of different laws–and as recent guidance makes clear, compliance with one law does not necessarily mean that a wellness program will comply with other federal (or state) requirements.

Wellness Programs and HIPAA Nondiscrimination Rules
The federal Health Insurance Portability and Accountability Act (HIPAA) imposes several requirements on health-contingent wellness programs, i.e., those that require an individual to satisfy a standard related to a health factor to obtain a reward. Participatory wellness programs, which comprise a majority of wellness programs, are generally available without regard to an individual’s health status.

Among other things, health-contingent wellness programs must be reasonably designed to promote health or prevent disease and must limit the maximum permissible reward to 30% of the cost of coverage (or 50% for wellness programs designed to prevent or reduce tobacco use). A new set of FAQs explains what it means for a health-contingent wellness program to be “reasonably designed.” The FAQs also caution that compliance with HIPAA does not determine compliance with other federal or state laws.

The ADA and Wellness Programs
The federal Americans with Disabilities Act (ADA) restricts covered employers from obtaining medical information from employees, but allows medical examinations of employees and inquiries about their health if they are part of a “voluntary employee health program.”

A new proposed rule provides that a wellness program is considered an employee health program within the meaning of the ADA when it is reasonably designed to promote health or prevent disease (similar to the standard currently applicable to health-contingent wellness programs). In addition, the proposed rule:

  • Details several requirements that must be met in order for participation to be considered voluntary, and requires employers to provide employees with a notice clearly explaining what medical information will be obtained, who will receive it, how it will be used, and how it will be kept confidential.
  • Allows employers to offer limited incentives for employees to participate in wellness programs or to achieve certain health outcomes. The total allowable incentive available under all wellness programs (i.e., both health-contingent and participatory programs) may not exceed 30% of the total cost of employee-only coverage.
  • Addresses the confidentiality requirements that apply to the medical information employees provide when they participate in wellness programs.
  • Requires employers to provide reasonable accommodations that enable employees with disabilities to participate and to earn whatever incentives the employer offers.

Due to the changing law and the complexity of the requirements that apply to employment-based wellness programs, employers are advised to check with a knowledgeable employment law attorney to ensure that any program complies with all applicable federal and state laws.

Our section on Wellness Programs provides additional details.