Recently in Benefits Category

Source: Jerrell D. Coggburn, Center for State and Local Government Excellence, August 2010

From the summary:
This new issue brief finds that the economy has slowed the ability of local governments to address long-term funding of their retiree health care obligations.

The brief follows up on a 2009 survey in which 206 local governments indicated they were likely to adopt a long-term strategy to strengthen their retiree health care funding, including

* establishing a Section 115 trust (governmental); medical subaccount [401(h)]; or Voluntary Employee Beneficiary Association (VEBA) trust [501(c)(9)];
* issuing OPEB bonds;
* increasing the years of service for vesting for RHC;
* increasing the age at which RHC is available;
* terminating retiree health care for all new hires.

Since then, the economy, insufficient revenues, and competing budget priorities have posed the greatest impediment to their plans.

The new brief finds that many jurisdictions are making sweeping changes in their retiree health care plans:

* 36 percent have increased or plan to increase the years of service required to vest.
* 11 percent have increased the retirement age.
* 39 percent have eliminated or plan to eliminate retiree health benefits for new hires.

Source: Bright Horizons, 2010
(registration required)

From the abstract:
The Consulting Practice at Bright Horizons completed a comprehensive research study on the impact of dependent care supports on a variety of health and wellness as well as engagement measures. Organizations that offer dependent care supports, along with a culture that supports their use, have the potential to realize substantial savings from a reduction in healthcare costs. These organizations also benefit from reduced absenteeism, stronger retention -- which will be increasingly important as the labor market loosens up -- and a workforce that is more engaged in and committed to the success of their organization.
See also:
* Health & Wellness Presentation (PDF)
* Health & Wellness Webinar (Archive)
* Health & Wellness Q&A (PDF)

Source: Robert Barkin, American City & County, Vol. 125 no. 6, June 2010

As employee benefits get chopped, how will governments attract and retain people with the right skills?

Source: Shawn Fegley, Society for Human Resource Management (SHRM), June 2010

According to this research, the majority of HR professionals indicated that their organizations have been negatively affected by the U.S. and global economic recession. In this ever-changing economic climate, organizations are looking for ways to manage costs while at the same time dealing with the escalating expenses of employee benefits. So it is not surprising that 72% of HR professionals reported that the benefits offerings at their organization have been affected in some way.

Additional noteworthy findings included the following:
- Employee benefits remained relatively stable from 2009 to 2010. Last year's study revealed a small decrease in the percentage of organizations offering benefits from 2008 to 2009.
- The areas that experienced the biggest downward trend since 2009 were housing and relocation benefits and business travel benefits.
- Even though employee benefits have remained relatively stable since 2009, benefits offerings experienced a downward trend when compared with results from five years ago.
- With a few exceptions, the survey findings suggest that organizations with larger staff sizes were more likely than smaller ones to offer any given benefit.
- More than three-quarters (79%) of organizations reported they reviewed their benefits programs annually, and 10% reported reviewing them even more frequently.
- Organizations spent on average 19% of an employee's annual salary on mandatory benefits, 18% on voluntary benefits and 11% on pay for time not worked benefits.
Related:
The Juggle - The Decline of Family-Friendly Benefits
Source: Sarah E. Needleman, Wall Street Journal, July 8, 2010

Source: Jenna Amato Moran, Buffalo Law Review, Vol. 58 no. 3, May 2010

There is a tsunami coming. Not convinced? You may have missed the 800-pound gorilla or the elephant in the room, but there's no way around the trillion-dollar pothole. What does this ominous language signify? Our nation is drowning in the midst of an amassed unfunded liability of public sector "other postemployment benefits" (OPEB). Though the OPEB category covers medical, dental, vision, life insurance, and legal services, it is most often used in reference to retirement health benefits. While the funding of these benefits has long been swept under the rug by employers in the public sector, new accounting standards have mandated governmental recognition of this liability. If this predicament sounds familiar, it is because the private sector was forced into recognizing its own liability nearly twenty years ago. Shortly after being confronted with the intimidating financial reality of promises made, private employers began a determined course of reducing the liabilities they owed by cutting retiree health benefits. Now, fast forward twenty years: if government employers follow the same course as the private sector, our nation is likely to see major changes in the retirement health benefits provided to public sector workers and retirees, as governments attempt to control their unfunded liabilities. These changes will surely result in legal challenges. While there are few definitive rules governing public sector retiree benefits across the nation, several important lessons can be learned by studying the private sector's reduction in benefits.

Source: World at Work, May 2010

Organizations are regularly faced with the evaluation of various paid time off programs. Traditional paid time off systems separate time-off categories between vacation, sick, personal time etc. Managers and total rewards professionals are subsequently obligated to track employees' time off and the reasons for their absences. Many employers are instead adopting a paid time off (PTO) bank giving the employee a cumulative number of paid days off that employees use as they wish for sick days, vacation and/or other personal needs. WorldatWork conducted a survey to examine the prevalence and practice of various paid time off programs in the United States to better understand the practices of organizations with either PTO-bank style or traditional systems (e.g. vacation time, sick time, personal days, etc.). This report summarizes the survey on paid time off programs.
See also:
Press release

Source: Center for State and Local Government Excellence, 2010

"Government leaders need to keep a strategic focus in tough economic times," Center President/CEO Elizabeth Kellar told attendees at the Workforce Summit of the Association of State and Territorial Health Officials in late May.

In addition to wellness and chronic care management programs, states are making significant cost cuts. A few are prefunding some of their obligations. A Center for Excellence online poll earlier this year, conducted with the National Association of State Personnel Executives and IPMA-HR (the International Public Management Association for Human Resources), found that 70 percent of governments have increased employee contributions and 25 percent have reduced benefits.

Source: Christine Scott, Carol D. Davis, Congressional Research Service, RS22804, February 26, 2010

From the summary:
The Department of Veterans Affairs (VA) administers several pension benefit programs for veterans as well as their surviving spouses and dependent children. The most current pension programs available (for those meeting the eligibility criteria on or after January 1, 1979) are the Improved Disability Pension for certain low-income veterans and the Improved Death Pension for certain low-income surviving spouses or children of veterans. There is also a special pension for Medal of Honor recipients. This report describes these programs, including the eligibility criteria and current benefit levels. This report will be updated as needed to reflect legislative activity and changes to benefits or eligibility requirements.

Source: Wendy R. Ginsberg, Congressional Research Service, R41030, January 21, 2010

From the summary:
The federal government provides a variety of benefits to its 8 million employees and annuitants. Among these benefits are health insurance; enhanced dental and vision benefits; survivor benefits; retirement and disability benefits; family, medical, and emergency leave; and reimbursement of relocation costs. Pursuant to Title 5 U.S.C. Chapters 89, 89A, 89B and other statutes, millions of federal employees may extend these benefits to their spouses and children. An estimated 34,000 federal employees are in same-sex relationships, including state-recognized marriages, civil unions, or domestic partnerships.

Source: Katherine Baicker, David Cutler and Zirui Song, Health Affairs, Vol. 29 no. 2, Published online 14 January 2010
(subscription required)

From the abstract:
Amid soaring health spending, there is growing interest in workplace disease prevention and wellness programs to improve health and lower costs. In a critical meta-analysis of the literature on costs and savings associated with such programs, we found that medical costs fall by about $3.27 for every dollar spent on wellness programs and that absenteeism costs fall by about $2.73 for every dollar spent. Although further exploration of the mechanisms at work and broader applicability of the findings is needed, this return on investment suggests that the wider adoption of such programs could prove beneficial for budgets and productivity as well as health outcomes.