The SBC will have specific important questions enrollees may have, the answer, and explanations about why this matters.  Another section will outline common medical events, services which may be needed related to that event, costs for each service and any limitations/exceptions. 

Information about two specific situations must be included:  having a baby and managing Type 2 diabetes.  For each example, employers will need to use a government provided number for the amount owed to the providers.  The company then can fill in how much the employee and the plan would pay.  Other sample care costs, such as initial office visits, radiology, lab tests and hospital charges, must be added.  At the bottom of each example, under the heading “You Pay,” dollar figures would have to be provided on deductibles, copayments, coinsurance, and limits or exclusions. The requirement to include a third example, the cost of treating breast cancer, was dropped. 

The new regulations also make clear that new employees do not have to receive paper SBCs for every plan into which they may be eligible to enroll.  Instead they may be viewed (or downloaded) electronically.  For existing employees, the SBC will only need to be provided for the plan s/he is in.  However, an electronic link must be given to view other available plans.  Employees can request paper copies.

Although many insurers plan to provide SBC brochures, the Department of Labor has provided a template for employers to generate their own SBCs.  It is available at www.dol.gov/ebsa/pdf/SBCtemplate.pdf.

From Business Insurance, August 22, 2011 issue, pp. 4 and 21, and February 13, 2012 issue, pp. 4 and 18.

Besides email and intranet communication, how else can employers effectively communicate with and engage employees?

Social media can be very helpful getting people to join together for a common goal, even if they are geographically diverse.  Fitness “teams” don’t have to live/work nearby in order to participate.

Blogs are a great way to educate people by giving small amounts of information over time.  Various vendors and carriers have content available online to help get one started.

Video clips can be made with many smart phones and are easy to post.  Perhaps someone from HR can walk around, talking to various people about a subject.  Employees may be interested in what their colleagues are thinking and saying.

Games can be created to provide both education and entertainment.  A texting game may require employees to “scavenge” key information about their benefit plan.

Quick response code readers are commonly available as smart phone apps.  Add codes to printed materials so interested employees can receive additional product information or coupons, for example.

Text messages are great tools for reminders or reiterating information which has already been given out.  However, they are not practical for introducing large changes.

From Business Insurance, February 13, 2012 issue, pp. 9-11.

 First, involve leaders from different departments (e.g. information technology, risk management, legal, finance, human resources, marketing or public relations) for discussions on cyber liability issues.  If possible, involve third party business partners and vendors as well. 

Prepare an organized and comprehensive data breach response plan, including individual and departmental responsibilities.  The team must respond quickly to mitigate damages.  Include plans for public relations, as reputational harm may prove more costly than direct financial losses.

Evaluate the data collected and stored on your system.  If there is a lot of information collected but never actually used, consider getting rid of it.  It poses a 100% risk with a 0% value.

From Business Insurance, March 12, 2012 issue, pp. 4 and 18.

 According to the Centers for Disease Control and Prevention, “the prevalence of obesity among U.S. adults and children remained steady in 2009-2010 compared with 2007-2009.  Some 37.5% of adults and nearly 17% of those up to age 19 were obese.”  For adults, a body mass index (“BMI”) between 25 and 29.9 is overweight, while a BMI of 30 or higher is obese.

 Obesity increases the risk of co-morbid conditions which include hypertension, diabetes, stroke, coronary heart disease and cancer.  These conditions complicate workers compensation cases, making it increasingly difficult for doctors to help workers achieve medical improvement.  Doctors may recommend weight-loss programs or surgery, which can prolong the case.  In addition, the additional costs may be passed on to the workers compensation claim.

 Statistically, “obese workers file twice the number of workers comp claims as their counterparts.  Their costs were seven times higher and they missed 13 times more days of work due to their injuries than did employees who were not obese.”

 From Business Insurance, March 5, 2012 issue, pp. 1 and 21.

Employers “are allowed but not required to report contributions to health reimbursement arrangements in calculating health care costs.”  Similarly, “the cost of providing coverage through employee assistance programs, wellness programs or on-site medical clinics is not required to be reported if the employer does not charge premiums for the coverage to COBRA beneficiaries.”  The reporting requirement does not apply to Native American tribal governments.

Last year the IRS determined that “the cost of coverage that is taxable to employees, such as for a child older than 26, must be reported on the W-2.”  It also stated that “contributions employees make to flexible spending accounts are to be excluded from the health care cost figure.” Employers will not have to include dental and vision care coverage costs in the health care cost figure “if those plans are separate from group medical plans.”

If an employee works part of the year, terminates employment and elects COBRA coverage, “employers can choose to report only the cost of coverage while the employee was working or to report that cost plus the cost of COBRA health care continuation coverage.”  However, employers must apply consistently whichever reporting choice is made.

“Health care cost information does not have to be reported when distribution of a W-2 is not required,” as may happen for retired employees

This isn’t just a parental or societal problem; this has become an employer problem as well.  Many employers may have wellness programs in place to help their employees live healthier lives, even providing health risk assessments to help determine problem areas.  Helping a parent learn about healthy eating habits and choices can have a trickle-down effect for their children.  So can encouraging employees (and their families) to limit TV/computer/video time and engage in some form of exercise on a regular basis.

There are a few wellness programs already available to help families work together to improve their health.  Most see positive results in parents first, and then the kids come around.  “Employers have a lot [more] influence in the communities they’re in than they acknowledge.  That’s what is going to drive their medical costs.  Kids are the new frontier.”

From Employee Benefit News, November 2011 issue, pp. 27-30.

Management can take steps to avoid some retaliation charges after discrimination charges have been made.  One important step is to make sure there is some distance, preferably six to nine months, between the time a complaint is made and any action taken that could be considered retaliatory.  Good record-keeping is also important, especially reports on problem employees.

When an employer is considering terminating an employee, it is often safer to do so sooner rather than wait.  If the employee learns that her job is in jeopardy, she may file a discrimination suit and, after being fired, claim retaliation.  The employer now needs to prove that its decision was not retaliatory.

Retaliation charges often reflect the employee’s perceptions rather than the employer’s intent.  For example, if a worker asks for a different shift after filing a discrimination claim, he may interpret rejection of his request as retaliation.  “Misinterpreted actions can include a demotion or pay cut introduced for nonretaliatory reasons, or even something seemingly inconsequential, such as wishing one employee a happy birthday but neglecting to do the same for the complaining worker.”

“The employee doesn’t have to prove that discrimination took place in order to establish a claim for retaliation, as long as the employee’s complaint of discrimination has met the definition of ‘protected activity,’ then the discrimination complaint can be the basis for a retaliation claim,” said a partner of a major nation-wide law firm.

From Business Insurance, Sept. 19, 2011 issue, pp. 16-18.

The IRS requires W-2 forms be prepared for any worker who received disability benefits during the year, whether taxable or not. The taxable portion depends on the percent of premium paid by the employer:

· If the employer pays all of the premium, the benefits paid to the employee are taxable.

· If the employee pays all the costs of coverage, the benefits are not taxable.

· If the employer and the employee share the cost, the percent of the employer’s contribution is taxable and the rest is not taxable.

· Employee contributions made on a pre-tax basis (such as Section 125 or cafeteria plans) are considered employer-paid dollars for tax purposes.

If the age of the employee on the       The monthly cost per

last day of his/her tax year is:             $1,000 life insurance is:

  Under 25                                                 $0.05

  25-29                                                      $0.06

  30-34                                                      $0.08

  35-39                                                      $0.09

  40-44                                                      $0.10

  45-49                                                      $0.15

  50-54                                                      $0.23

  55-59                                                      $0.43

  60-64                                                      $0.66

  65-69                                                      $1.27

  70 and older                                            $2.06

IRS Publication 15-B (2011),  pp. 11-12

Hackers typically seek one or more of the following when they gain access to a company’s network:  bragging rights, access to trade secrets or other proprietary information, and access to customer and employee information.  Smaller companies, therefore, need to protect information on its products, plans and people.

While protecting valuable information may seem expensive, the costs following a data breach are significantly higher.  One data security research firm estimates that it costs companies “more than $200 per compromised record.”  Multiply that by 10,000 customer records and the results can be catastrophic for a midsize company.  Perhaps more costly is the reputational harm.  Companies risk losing not only the customers affected by the breach, but other current and future ones.

How can companies protect their information?  First, write up a data security policy and stick to it.  Also, beef up security with firewalls, anti-virus and intrusion detection systems. Routinely upgrade the software with patches provided by the vendor.  Most importantly, invest in Cyber Liability insurance.  Not only does the insurer absorb the risk, but should a breach occur, they know exactly what needs to be done.  Please call us for details.

From Business Insurance, October 3, 2011 issue, pp. 14 and 16.