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.

Companies that offer incentives to reward employees for the number of hours they work without recording a workers’ compensation injury may help reduce injuries and lost work time, but it does little to promote safety awareness among its workers. 

In addition, workers and managers may feel pressured not to report an injury in order to qualify for incentives.  Minor injuries may not be reported until they become more severe, resulting in higher claims and longer time off.

From Business Insurance, August 1, 2011 issue, p. 6.

The SBC will have a glossary of common health coverage terms, instructions, samples and a guide.  For example, it will have specific common 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.  Another section will give details about three specific situations:  having a baby, treating breast cancer and managing diabetes.  (Other situations may be required as well.)  Final regulations for the summary should be available sometime after October 21.   

A sample SBC document may be found at www.healthcare.gov/news/factsheets/2011/08/labels08172011b.pdf.  However, final regulations may require significant changes to this example.

From Employee Benefits Briefing by Woodruff Sawyer & Company, August 2011 issue, p. 3.  Also from Business Insurance, August 22, 2011 issue, pp. 4 and 21. 

The number of individuals who took the subsidy isn’t known.  However, a study indicates that the number of employees who enrolled in COBRA coverage roughly doubled during the time when the subsidy was available.

From www.businessinsurance.com, posted Aug. 10, 2011.

One manager for a major corporation was able to identify the key factors which kept driving health care costs up.  Then she attacked them with strategic chronic care management and health improvement programs.  As a result, the company’s health care costs didn’t double in five years.  In fact, they saved enough money to cover benefit costs for their 40,000 employees and dependents.

Part of her strategy included educating employees, explaining “why it was necessary for us to work collectively, as a company and as employees, to contain health care costs. . .  She shared what she learned about the health care marketplace, how unhealthy lifestyle choices contribute to the incidence of disease, and how new technologies and drugs added to treatment costs.”  Monthly health benefit education workshops on a variety of topics keep people informed of new developments.

Another benefit manager discovered that some of her company’s employees were not taking appropriate medications, which resulted in huge hospital bills when untreated conditions became acute problems.  Instead of passing these higher health care costs back to the employees, her company took a different approach.  By reducing or eliminating the cost-share requirements, employees were encouraged to take better care of their health.  A wide variety of preventive care programs became available at no cost.  Employees with common chronic conditions were encouraged to take their prescription drugs by slashing copayments.

The company also includes health education for its employees.  For example, it sends postcards to employees reminding them to have relevant health care screenings.  They are also creating a shopping list/pamphlet with food items broken into categories according to how healthy they are.

 From Business Insurance, June 27, 2011 issue, pp. 9-16.

Another provision of the health care reform begins next year.  Group health care plans will be required to provide full coverage for a wide range of women’s preventive services, with neither copayments nor deductibles.  This will take effect for all plan years starting on or after August 1, 2012.  These changes are expected to result in “very modest” cost increases for employers.  “Grandfathered” plans will be exempt. 

Employers are bracing for more cost increases in 2014, when most of the health care reform requirements take effect.  28% of survey respondents expect rate increases of at least 3%, 27% expect costs to rise 2% or less, and 29% said they could not predict the cost impact yet.

From Business Insurance, August 8, 2011 issue, pp. 1 and 21.  Also from www.businessinsurance.com article posted Aug. 1, 2011.

This shift is driven by the large monetary value of prescription drugs for future medical expenses calculated by the Centers for Medicare and Medicaid Services (CMS).  When a claim with a medical component involves Medicare-eligible beneficiaries, employers or their insurers are required to notify CMS.  They then determine the amount claims payers must set aside for future medical expenses so Medicare will not be stuck with the costs.

CMS’ figures have been criticized for failing to take important factors into effect.  For example, their figures are based on the full price of brand-name drugs over the long term, rather than take into account that a lower-cost generic form will be available at some point.  In addition, they “fail to recognize that a claimant may need a prescription drug only for a finite period, rather than for his or her expected lifetime.”

As a result some employers are electing to pay the claims expenses over time rather than settle and fund the full amount calculated by CMS.  Other employers opt to wait until claimants are off certain drugs before settling a claim.

From Business Insurance, June 27, 2011 issue, pp. 1 and 21.

1. “For most people the size of the incentive required to get a new behavior is greater than the savings that comes from the new behavior.”  It may take years to see substantial savings, and that assumes that the employees who have received substantial incentives are not working elsewhere when the savings are manifest.  Consider the “golden rule of incentives: ‘Only offer incentives when the total value over time of all the incentives required to drive the new behavior is less than the total savings over time that the new behavior generates.’”
2. Sometimes rewards are paid to the wrong people or for wrong behaviors.  Incentives are often paid to those who already practice good health habits and fail to stimulate a change in behavior of others who really need to change.  “Studies of habit change have shown us that in fact what is usually missing is learning the new skills, even basic ones, that make the new habit stick.”
3. The goal of offering incentives is to create new habits, behaviors repeated over the long term without incentives or external force.  Unfortunately the use of incentives may actually backfire.  “Incentives can change behaviors in the short term, but they often fail to make these new behaviors stick.”  Unless there is a new habit in place, when the incentive is reduced or removed, then behaviors revert back to levels lower than they were at the start. 
4. “Incentives that are offered on an ‘if, then’ basis are less powerful than those given on a ‘now that’ basis.”  For example, compare “If you get your cholesterol under 100, then we’ll give you $100” to “Now that you’ve reduced your risk, we wanted to recognize your hard work with a token of our appreciation in the form of $100.”  The first is little more than a bribe, while the second compliments the person and expresses appreciation.  While “now that” incentives take a little more effort and imagination, the return to employers can be much greater.

From Employee Benefit News, July 2011 issue, pp. 34-36.