Hot Trends in HR | California Employee Benefits

Hot Trends in HR | California Employee Benefits

2019 has ushered in many new trends such as retro cartoon character timepieces, meatless hamburgers, and 5G networks to name a few. Not surprisingly, trend-watching doesn’t stop with pop culture, fashion, and technology. Your company’s human resources department should also take notice of the top changes in the marketplace, so they are poised to attract and retain the best talent. These top trends include a greater emphasis on soft skills, increased workforce flexibility, and salary transparency.
SOFT SKILLS
Gone are the days of hiring a candidate solely based on their hard skills—their education and technical background. While the proper education and training are important factors in getting the job completed, a well-rounded employee must have the soft skills needed to work with a team, problem solve, and communicate ideas and processes. According to Tim Sackett, SHRM-SCP and president of HRU Technical Resources in Michigan, “Employers should be looking for soft skills more and training for hard skills, but we struggle with that.” While hard skills can be measured, soft skills are harder to quantify. However, soft skills facilitate human connections and are the one thing that machines cannot replace.  They are invaluable to the success of a company.
WORKFORCE FLEXIBILITY
As millennials begin to flood the workplace, the traditional view of the workweek has changed. Job seekers report they place a high importance on having the flexibility of when and where to work. The typical work day has evolved from a 9am – 5pm day to a flexible 24-hour work cycle that adjusts to the needs of the employee. Employers are able to offer greater flexibility about when the work is completed and where it takes place. This flexibility has so much importance that job seekers say remote work options and the freedom of an adaptable schedule have a higher priority to them over pay.
SALARY TRANSPARENCY
In the wake of the very public outing of the gender and race pay gaps, companies are opening up conversations about wages in the workplace. Once a hushed subject punishable by termination, salary information is now often being shared in the office. Employers have found that the more transparent and open that they are about the compensation levels in their organization, the more trustworthy they appear to their workforce. One way to stay educated on the welcome trend of pay equality is to visit the US Bureau of Labor Statistics’s website to review wage ranges across the nation. Another great resource is the Department of Labor’s free publication called “Employer’s Guide on Equal Pay.”
By watching the trends in the marketplace, employers can focus on what is important to their staff. Honest discussions about salary and compensation, when and where to work, and developing the employee as a whole, including soft skills, sets your company up for success. When you listen to what the market is saying, you show you are sensitive to what their priorities are—and this is always on trend.

PCORI Fee Increase for Health Plans

PCORI Fee Increase for Health Plans

On November 5, 2018, the Internal Revenue Service (IRS) released Notice 2018-85 to announce that the health plan Patient-Centered Outcomes Research Institute (PCORI) fee for plan years ending between October 1, 2018 and September 30, 2019 will be $2.45 per plan participant. This is an increase from the prior year’s fee of $2.39 due to an inflation adjustment.

Background

The Affordable Care Act created the PCORI to study clinical effectiveness and health outcomes. To finance the nonprofit institute’s work, a small annual fee — commonly called the PCORI fee — is charged on group health plans.
The fee is an annual amount multiplied by the number of plan participants. The dollar amount of the fee is based on the ending date of the plan year. For instance:

  • For plan year ending between October 1, 2017 and September 30, 2018: $2.39.
  • For plan year ending between October 1, 2018 and September 30, 2019: $2.45.

Insurers are responsible for calculating and paying the fee for insured plans. For self-funded health plans, however, the employer sponsor is responsible for calculating and paying the fee. Payment is due by filing Form 720 by July 31 following the end of the calendar year in which the health plan year ends. For example, if the group health plan year ends December 31, 2018, Form 720 must be filed along with payment no later than July 31, 2019.
Certain types of health plans are exempt from the fee, such as:

  • Stand-alone dental and/or vision plans;
  • Employee assistance, disease management, and wellness programs that do not provide significant medical care benefits;
  • Stop-loss insurance policies; and
  • Health savings accounts (HSAs).

HRAs and QSEHRAs

A traditional health reimbursement arrangement (HRA) is exempt from the PCORI fee, provided that it is integrated with another self-funded health plan sponsored by the same employer. In that case, the employer pays the PCORI fee with respect to its self-funded plan, but does not pay again just for the HRA component. If, however, the HRA is integrated with a group insurance health plan, the insurer will pay the PCORI fee with respect to the insured coverage and the employer pays the fee for the HRA component.
A qualified small employer health reimbursement arrangement (QSEHRA) works a little differently. A QSEHRA is a special type of tax-preferred arrangement that can only be offered by small employers (generally those with fewer than 50 employees) that do not offer any other health plan to their workers. Since the QSEHRA is not integrated with another plan, the PCORI fee applies to the QSEHRA. Small employers that sponsor a QSEHRA are responsible for reporting and paying the PCORI fee.

PCORI Nears its End

The PCORI program will sunset in 2019. The last payment will apply to plan years that end by September 30, 2019 and that payment will be due in July 2020. There will not be any PCORI fee for plan years that end on October 1, 2019 or later.

Resources

The IRS provides the following guidance to help plan sponsors calculate, report, and pay the PCORI fee:

Originally posted on thinkhr.com

Be the Boss You Want to See in the World

Be the Boss You Want to See in the World

An article in the Harvard Business Review suggests that the traits that make someone become a leader aren’t always the ones that make someone an effective leader. Instead, efficacy can be traced to ethicality. Here are a few tips to be an ethical leader.


Humility tops charisma
A little charisma goes a long way. Too much and a leader risks being seen as self-absorbed. Instead, focus on the good of the group, not just sounding good.

Hold steady
Proving reliable and dependable matters. Showing that—yes—the boss follows the rules, too, earns the trust and respect of the people who work for you.

Don’t be the fun boss
It’s tempting to want to be well liked. But showing responsibility and professionalism is better for the health of the team—and your reputation.

Don’t forget to do
Analysis and careful consideration is always appreciated. But at the top you also have to make the call, and make sure it’s not just about the bottom line.

Keep it up!
Once you get comfortable in your leadership role, you may get too comfortable. Seek feedback and stay vigilant.

A company that highlights what happens when leaders aren’t the ones to champion ethics is presented in Human Resource Executive. Theranos had a very public rise and fall, and the author of the article cites the critical role compliance and ethics metrics might have played in pushing for better accountability. The article also makes the case for the powerful role of HR professionals in helping guide more impactful ethics conversations.

One high profile case study of a company recognizing that leadership needed to do more is Uber. Here, leadership realized that fast growth was leading to a crumbling culture. A piece in Yahoo! Sports shows how explosive growth can mean less time to mature as a company. Instead of focusing of partnerships with customers and drivers, Uber became myopically customer-and growth-focused. This led to frustrations for drivers and ultimately a class-action lawsuit. New initiatives, from tipping to phone support to a driver being able to select riders that will get them closer to home, have been rolled out in recent months. These changes have been welcome, but, as the leadership reflected, could have been more proactively implemented to everyone’s benefit. The mindset of bringing people along will also potentially help Uber maintain better ties with municipalities, which ultimately, is good for growth.

Harvard Business Review Don’t Try to Be the Fun Boss” — and Other Lessons in Ethical Leadership

Yahoo! Sports – How Uber is recovering from a ‘moral breaking point’

Human Resource Executive – An Ethics Lesson
by Bill Olson

Originally posted on ubabenefits.com

Choosing the Right Flexible Benefit for Employees

Choosing the Right Flexible Benefit for Employees

Trying to decide which of the many employer-sponsored benefits out there to offer employees can leave an employer feeling lost in a confusing bowl of alphabet soup—HSA? FSA? DCAP? HRA? What does it mean if a benefit is “limited” or “post-deductible”? Which one is use-it-or-lose-it? Which one has a rollover? What are the limits on each benefit?—and so on.
While there are many details to cover for each of these benefit options, perhaps the first and most important question to answer is: which of these benefits is going to best suit the needs of both my business and my employees? In this article, we will cover the basic pros and cons of Flexible Spending Arrangements (FSA), Health Savings Accounts (HSA), and Health Reimbursement Arrangements (HRA) to help you better answer that question.
Flexible Spending Arrangements (FSA)
An FSA is an employer-sponsored and employer-owned benefit that allows employee participants to be reimbursed for certain expenses with amounts deducted from their salaries pre-tax. An FSA can include both the Health FSA that reimburses uncovered medical expenses and the Dependent Care FSA that reimburses for dependent expenses like day care and child care.
Pros:

  • Benefits can be funded entirely from employee salary reductions (ER contributions are an option)
  • Participants have access to full annual elections on day 1 of the benefit (Health FSA only)
  • Participants save on taxes by reducing their taxable income; employers save also by paying less in payroll taxes like FICA and FUTA
  • An FSA allows participants to “give themselves a raise” by reducing the taxes on healthcare expenses they would have had anyway

Cons:

  • Employers risk losing money should an employee quit or leave the program prior to fully funding their FSA election
  • Employees risk losing money should their healthcare expenses total less than their election (the infamous use-it-or-lose-it—though there are ways to mitigate this problem, such as the $500 rollover option)
  • FSA elections are irrevocable after open enrollment; only a qualifying change of status event permits a change of election mid-year
  • Only so much can be elected for an FSA. For 2018, Health FSAs are capped at $2,650, and Dependent Care Accounts are generally capped at $5,000
  • FSA plans are almost always offered under a cafeteria plan; as such, they are subject to several non-discrimination rules and tests

Health Savings Accounts (HSA)
An HSA is an employee-owned account that allows participants to set aside funds to pay for the same expenses that are eligible under a Health FSA. Also like an FSA, these accounts can be offered under a cafeteria plan so that participants may fund their accounts through pre-tax salary reductions.
Pros:

  • HSAs are “triple-tax advantaged”—the contributions are tax free, the funds are not taxed if paid for eligible expenses, and any gains on the funds (interest, dividends) are also tax-free
  • HSAs are portable, employee-owned, interest-bearing bank accounts; the account remains with the employees even if they leave the company
  • Certain HSAs allow participants to invest a portion of the balance into mutual funds; any earnings on these investments are non-taxable
  • Upon reaching retirement, participants can use any remaining HSA funds to pay for any expense without a tax penalty (though normal taxes are required for non-qualified expenses); also, retirees can use the funds tax-free to pay premiums on any supplemental Medicare coverage. This feature allows HSAs to operate as a secondary retirement fund
  • There is no use-it-or-lose-it with HSAs; all funds employees contribute stay in their accounts and remain theirs in perpetuity. Also, participants may alter their deduction amounts at any time
  • Like FSAs, employers can either allow the HSA to be entirely employee-funded, or they may choose to also make contributions to their employees’ HSA accounts
  • Even though they are often offered under a cafeteria plan, HSAs do not carry the same non-discrimination requirements as an FSA. Moreover, there is less administrative burden for the employer as the employees carry the liability for their own accounts

Cons:

  • To open and contribute to an HSA, an employee must be covered by a qualifying high deductible health plan; moreover, they cannot be covered by any other health coverage (a spouse’s health insurance, an FSA (unless limited), or otherwise)
  • Participants are limited to reimburse only what they have contributed—there is no “front-loading” like with an FSA
  • Participant contributions to an HSA also have an annual limit. For 2018, that limit is $3,450 for an employee with single coverage and $6,900 for an employee with family coverage (participants over 55 can add an additional $1,000; also, remember there is no total account limit)
  • Participation in an HSA precludes participation in any other benefit that provides health coverage. This means employees with an HSA cannot participate in either an FSA or an HRA. Employers can work around this by offering a special limited FSA or HRA that only reimburses dental and vision benefits, meets certain deductible requirements, or both
  • HSAs are treated as bank accounts for legal purposes, so they are subject to many of the same laws that govern bank accounts, like the Patriot Act. Participants are often required to verify their identity to open an HSA, an administrative burden that does not apply to either an FSA or an HRA

Health Reimbursement Arrangements (HRA)
An HRA is an employer-owned and employer-sponsored account that, unlike FSAs and HSAs, is completely funded with employer monies. Employers can think of these accounts as their own supplemental health plans that they create for their employees
Pros:

  • HRAs are extremely flexible in terms of design and function; employers can essentially create the benefit to reimburse the specific expenses at the specific time and under the specific conditions that the employers want
  • HRAs can be an excellent way to “soften the blow” of an increase in major medical insurance costs—employers can use an HRA to mitigate an increase in premiums, deductibles, or other out-of-pocket expenses
  • HRAs can be simpler to administer than an FSA or even an HSA, provided that the plan design is simple and efficient: there are no payroll deductions to track, usually less reimbursements to process, and no individual participant elections to manage
  • Small employers may qualify for a special type of HRA, a Qualified Small Employer HRA (or QSEHRA), that even allows participants to be reimbursed for their insurance premiums (special regulations apply)
  • Funds can remain with the employer if someone terminates employment and have not submitted for reimbursement

Cons:

  • HRAs are entirely employer funded. No employee funds or salary reductions may be used to help pay for the benefit. Some employers may not have the funding to operate such a benefit
  • HRAs are subject to the Affordable Care Act. As such, they must be “integrated” with major medical coverage if they provide any sort of health expense reimbursement and are also subject to several regulations
  • HRAs are also subject to many of the same non-discrimination requirements as the Health FSA
  • HRAs often go under-utilized; employers may pay an amount of administrative costs that is disproportionate to how much employees actually use the benefit
  • Employers can often get “stuck in the weeds” with an overly complicated HRA plan design. Such designs create frustration on the part of the participants, the benefits administrator, and the employer

For help in determining which flexible benefit is right for your business, contact us!
by Blake London
Originally posted on ubabenefits.com

Making a Remote Team Work

In a tight labor market, a candidate’s potential commute can make a job more or less attractive. HumanResources reports that a quarter of employees surveyed had left a job because of the commute. When looking at just Millennials, the number jumps to one third. Employees can be choosy, selecting a job that offers more of what they want, and that means less of a commute. Companies can work around this by offering transportation amenities, flexible scheduling or more remote working opportunities.

 Forbes has a recent interview with Tamara Littleton, founder of The Social Element, who’s successfully built a remote team at the social media management agency. She argues culture starts at the top. By treating people well, which includes offering remote opportunities, it sets a tone for the whole company. Creating opportunities for in-person meetings and gatherings balance any isolation that may happen. Then, more regular face-to-face communication, essential to build trust and teamwork, comes via video calls when email might otherwise be the default. Newsletters and webinars keep the team connected and ensure important messages aren’t missed. She can point to the success of her ideas with the hire of many senior team members, willing to sacrifice some pay for more flexibility. 

When implementing remote-friendly strategies, there are plenty of success stories to draw inspiration. Entrepreneur has some tips from Zapier, a company that has been on the forefront of offering alternative working arrangements. In fact, they offer a “de-location” package to encourage employees to move from the cost-prohibitive Bay Area. Tools like Slack facilitate real-time communication, with tools to find ideal meeting times across time zones and channels themed for non-work related conversations. Bots regularly and randomly pair up employees to get a chance to know one another during a brief call. A semi-regular retreat brings people together in person and impromptu video dance parties make slow days more fun.

The takeaway? Being proactive and creative to build remote work policies can get you the employees you want, wherever they may be.

HumanResources
Travelling to and fro office may drive your employees to quit
https://www.humanresourcesonline.net/travelling-to-and-fro-office-may-drive-your-employees-to-quit/

Forbes
How To Build A Culture Of Trust In A Large Remote Team
https://www.forbes.com/sites/brettonputter/2018/10/04/how-to-build-a-culture-of-trust-in-a-large-remote-team/#5d4e5d23188c

Entrepreneur
This Company Hosts Virtual Dance Parties to Help Its 170 Remote Employees Feel Connected
https://www.entrepreneur.com/article/320411
by Bill Olson

Originally posted on ubabenefits.com