Communication of Benefits

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These executive summaries were compiled from EMPLOYEE BENEFITS INFOSOURCE database, a source for information on employee benefits and human resources.

Best Practices in Communicating Health Care Payment Card Programs.
Pourfallah, Stacy; Benefits & Compensation Digest; v47 no8 pp 24-27 Aug 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Health care payment cards simplify using flexible spending accounts, health savings accounts and health reimbursement arrangements. Similar to debit cards, they draw on funds in the personal health accounts, using pretax dollars to pay for qualified services and products. Substantiation is automatic, avoiding the need to submit paperwork and get reimbursement. For employers, the cards lower the administrative burden and provide valuable benefit utilization information. Communication to employees about the payment card program is key before, during and after enrollment. Special attention should be paid to points often misunderstood, such as covered expenses and use-it-or-lose-it provisions.
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Plan Entitled to Terminate Supplemental Benefit.
Benefits & Compensation Digest; v47 no8 pp 58-59 Aug 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The defendant employer in Savani v. Washington Safety Management Solutions LLC et al. offered a $700 monthly benefit to supplement Social Security for some years. The employer's plan eliminated the benefit in 2004 but took seven months to communicate the change and requested return of the overpayments from recipients including the plaintiff. The plaintiff charged violation of ERISA's anticutback rule, while the administrator stated the supplement was not an accrued benefit. The U.S. District Court for the District of South Carolina ruled the plan indicates the benefit is not accrued but an ancillary and temporary supplement available until a beneficiary reaches age 65. There was no violation of ERISA notification requirements since they only apply to accrued or early retirement benefits. The court found the plan granted the benefits committee authority to amend the plan, and there was no indication benefits were wrongfully terminated.
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Lead Us Not Into Misrepresentation: The Road From Berlin to Unisys.
McMurdy, Keith R.; Ivy, Sarah K.; BNA's Pension & Benefits Reporter; v37 p 1627 Jul 13, 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : In the case of Berlin v. Michigan Bell Telephone Company, the Sixth Circuit Court of Appeals was one of the first courts to establish that fiduciaries have a duty to not make misrepresentations to plan participants. A number of other cases have further developed the idea that fiduciaries have a duty under ERISA Section 404 to communicate clearly and truthfully. In 2009, the Third Circuit Court of Appeals issued a decision In re Unisys Corp. Retiree Medical Benefits ERISA Litigation which articulated a duty not merely to avoid misinformation, but to actively inform participants of negative information and to ensure that information given is not misinterpreted. A wise fiduciary should communicate clearly and completely and make every effort to avoid confusion, even if the efforts appear redundant.
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Social Media Sites Still Emerging as Benefits Tools.
Wojcik, Joanne; Business Insurance; v44 no28 pp 1, 19 Jul 12, 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Helen Darling, president of the National Business Group on Health, shared results of a survey finding that few employees are interested in getting benefit communications through social media sites. While nearly half of surveyed workers use Facebook or Twitter, even younger respondents are unlikely to turn to the sites for information on health plans and other benefits. Employees may prefer to keep their work life separate from personal life. These sites do have value as one of multiple channels to convey benefits information but should not replace the primary methods including print and e-mail.
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CLASS Act Advances Employees' Awareness of LTC Options, Costs.
Koster, Kathleen; Employee Benefit News; v24 no9 pp 1, 57 Jul 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Part of health care reform, the Community Living Assistance Services and Support (CLASS) Act brings considerations of long-term care (LTC) to the forefront, and the need for employee education on the matter. If offered by employers, the program involves mandatory automatic enrollment and employee contributions unless the employee actively opts out. Employers who do not communicate this clearly will face a backlash from employees who do not understand the payroll deduction. The issue should raise discussions of long-term care options under a government or private plan, including premiums, eligibility, enrolling and pulling out of a plan, benefits offered and how they coordinate with other programs.
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Getting the Most From Retirement Education Workshops.
Nordquist, Laurie; Ready, Joe; Defined Contribution Insights; v58 no4 pp 6-9 Jul-Aug 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : To maximize the value of retirement plan education workshops, it is important to first establish objectives for the meeting. Goals might be boosting contributions, more investment diversification or targeted education for specific groups. Paper or online forms to activate changes should be readily available at meetings. Workshop attendance should be monitored for percentage of invitees who attended and who took action during or after the meeting. Benefit managers should consider how often meetings should be held, how to coordinate with new plan features and whether and how to include employee spouses or partners. The provider's communication specialist should be able to help develop a yearlong communications calendar.
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Hoping for the Best, Preparing for the Worst.
Sweeney, Kevin; Employee Benefit News; v24 no9 pp 25-26 Jul 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The complicated Patient Protection and Affordable Care Act leaves many employers, especially those who self-insure, wondering about the implications. Industry experts foresee no major immediate changes but concede costs could rise. There is uncertainty over grandfathered plans and permitted changes, and employers are closely watching their costs and competition for how to balance mandatory coverage and penalties for not providing health insurance. The Cadillac tax for high costs plans starting in 2018 is another concern. In the changing landscape, self-funding of health benefits is likely to remain a strong option, but employers choosing it look for regulatory guidance.
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Strategy and Policy for Phased Retirement.
Noble, F. Pierce; Harper, Erica; Benefits Quarterly; v26 no3 pp 11-14 3rd Qtr 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Phased retirement allows workers with inadequate retirement savings to continue earning money and gives employers longer access to the knowledge of workers of retirement age. Employers implementing a phased retirement program will need to address a number of areas, including the formality of the program, its availability, including the availability of features to employees not of retirement age, pay and benefits considerations and the communication of the program. Phased retirement raises questions for employees' retirement income situation, since it can lead to unexpectedly lower than expected benefits under some retirement plans. Phased retirement programs should be simple in design and execution, and they should be able to pass nondiscrimination tests and allow for managerial approval of each employee wishing to participate.
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Target Date Funds: What Employees Don't Know and How to Counter It.
Managing 401(k) Plans; no10-7 pp 1-4 Jul 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The DOL and Securities and Exchange Commission issued an alert about target date funds after research revealed investors harbor significant misconceptions about them. A survey by Behavioral Research Associates confirmed that 63 percent of 250 employees described basic features incorrectly. Almost four in ten thought the funds provide a guaranteed return, and 57 percent thought there is little or no chance of losing money over ten years. Plan sponsors need to help employees know that funds can vary widely in terms of glide path, asset allocation, management style, underlying architecture and fees. Sponsors also must be diligent in their selecting and monitoring the funds they offer, comparing projected outcomes for their workforce.
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Why Blue Lake Casino Added Medical Travel to Its Benefits Plan.
Managing Benefits Plans; no10-7 pp 9-11 Jul 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : At a health benefits conference, the HR director of Blue Lake Casino & Hotel in California explained the company's adoption of medical travel to expand benefits and lower overall costs. Blue Lake identified strong financial reasons for using medical travel and realized that six targeted procedure costs abroad run about one-fifth of the cost in the U.S., saving the health plan and the employee paying a copayment and deductible. The firm explored compliance with quality and accreditation standards and made site visits to assure a good support and recovery environment. Blue Lake followed American Medical Association guidelines and attended to contractual technicalities and liabilities. It then modified the plan documents and started promoting the benefit. For procedures done in 2010, the company will fully cover surgical and travel costs and provide a ten percent stipend.
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Workplace Retirement Education Gets Fresh Look.
Tulloch, Jeff; Benefits & Compensation Digest; v47 no7 pp 28-31 Jul 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The financial meltdown that devalued many defined contribution plan accounts has intensified the need for good financial education for members. Providing effective learning opportunities and tools can boost morale as well as productivity. Education should cover basic topics such as asset allocation and not taking early distribution, but also deferral percentages, employer contributions, portfolio management, retirement date planning, Social Security and planning to draw down savings. Research shows those who participate in retirement planning seminars change their goals and increase their savings. Getting employees and their partners to attend is a challenge, helped by using targeted communications and making the sessions accessible, free, personalized and interactive.
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Across Seven Continents in Six Steps.
Carey, Doug; Smith, Dave; Employee Benefit News; v24 no8 pp 12-14 Jun 15, 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Multinational firms can effectively manage global benefits by following six steps. Firms should begin by establishing a global governance model with a centralized project management office. They should create a global inventory of benefits programs offered, define the objectives of the global program and of key individual markets, and establish a series of metrics and a means of reporting important program data. Using the inventory, firms should eliminate vendors not offering value to the program and build relationships where savings can be achieved. Finally, firms should define and implement a strategy for communicating the global plan to employees.
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Survey Takes a Post-Recession Snapshot of Benefits Trends.
Bridgeford, Lydell C.; Employee Benefit News; v24 no8 pp 1, 50 Jun 15, 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : According to a 2010 MetLife study, the recession economy influenced how employers viewed their benefits programs. For the first time since 2006, employers rated controlling benefit costs as more important than retaining employees. Companies, especially large ones, were more likely to reduce salaries than benefits, and employee satisfaction with their benefits increased during the recession. The study found a strong relationship between employee benefits satisfaction and overall job satisfaction. Benefits communication can increase the effectiveness of benefits, but employers are generally unaware of how much employees value their benefits.
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With Health and Wellness for All.
Bridgeford, Lydell C.; Employee Benefit News; v24 no8 pp 22, 24 Jun 15, 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : According to MetLife, 57 percent of employees with access to a wellness program said they participated in 2010, compared to 46 percent in 2008. Effectively communicating wellness benefits requires conveying the value and relevance of the benefits to individual employees in a medium they are comfortable with. Ridgeview Medical Center found that while its younger workers were no more or less interested in improving their health than older workers, they were more likely to be motivated by money. While younger workers might be expected to be more receptive to wellness since they grew up with the idea, they are susceptible to negative wellness trends like obesity. Some employees respond better to individual coaching, but others are more responsive to social settings, including online social media.
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Good Buys.
Prost, Marlene A.; Human Resource Executive; v24 no6 pp 44-46 Jun 2, 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : When a reduction in workforce is necessary, a voluntary employee buyout may be the best approach. Success is more likely when the long term goal is clear, the right workers are targeted, there is a good balance between carrot and stick and the program is effectively communicated to both workers and the public. A company has the legal option to target certain employees as long as the buyout is entirely voluntary. A supplementary early retirement package may be effective for older workers if the funds are available. Younger workers leery of unemployment may need extra incentives. The threat of layoffs can motivate a decision. It is important that company heads communicate the rationale and details of the program, since every employee needs to know how it will affect him or her, whether accepting or rejecting the offer.
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Reaching Out.
Davis, Andrea; Employee Benefit News; v24 no7 pp 21-22 Jun 1, 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : With a burgeoning proportion of Hispanic and other workers whose first language is not English, communicating about voluntary benefits is a challenge. The concept of personal insurance is unfamiliar to many, and multiple languages and dialects further complicate the picture. Insurance carriers such as Unum, ING, Aflac and Prudential are adding bilingual benefits counselors and claims specialists, producing educational videos in various languages and communicating through a variety of methods. A multigenerational workforce also presents communication challenges. Despite the economic downturn, voluntary benefit sales have continued to grow. Unum reports accident insurance sales up 45 percent, short term disability up 22 percent and critical illness up nine percent over a three-year period.
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Creating Retirement Planners.
Veilleux, Julie; Benefits and Pensions Monitor; v20 no4 pp 19-20 Jun 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Communication of retirement planning issues is an ongoing need that should be addressed directly and through multiple channels. Annual statements with customized analyses are valuable, but members approaching retirement benefit from and appreciate more direct assistance from qualified professionals. Retirement preparation seminars must start with basic financial concepts related to retirement, addressing budget, anticipated income sources and other potential income options. With fewer than three in ten preretirees typically having a financial plan for their retirement, preretirement seminars can help fill the information gap.
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Reenrollment: The New Buzzword Among 401(k) Plans.
Managing Benefits Plans; no10-6 pp 10-12 Jun 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Defined contribution pension plan participants are struck by inertia in their asset allocations, and they fail to take advantage of investment advice when offered. As a result, service providers are touting reenrollment as a strategy to move participants' existing assets and future contributions into qualified default investment alternatives, using professionally designed and managed portfolios. Automatic enrollment in 401(k) plans serves new enrollees but did not help those already in a plan until the Pension Protection Act authorized such moves. Advance communication is essential, and participants must be able to opt out of a default move. A Vanguard study with 3,500 plan participants found only 13 percent fully opted out of the default fund and 26 percent partially.
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'Y' Not Save?
Gallagher, Paul; Human Resource Executive; v24 no6 pp 45-48 May 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : About six in ten members of Generation Y, born between 1980 and 2000, cash out their defined contribution plan savings when leaving a job. Employers can help them to take a long term view toward retirement saving. Communications with Gen Y members are most effective when presented through a technology they are familiar and comfortable with. Material must be engaging, simple, direct and immediately available and should include a clear visual metric representing progress toward retirement financial security. Easy web links and applications designed for popular electronic devices make enrollment and monitoring even more accessible.
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Fight Confusion With Communication.
Butler, Kelley M.; Employee Benefit News; v24 no6 pp 1, 23-24, 26 May 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The passage of the Patient Protection and Affordable Care Act in March 2010 means that benefits professionals have to communicate a law many of them do not fully understand for the 2010 open enrollment season. One key to successful communications is for companies to let employees know that they are thinking about health care reform even if they do not have all the answers. To communicate health care reform, employers should clearly and simply tell employees what the short-, medium- and long-term implications of the reform are for the company. They should avoid making false promises, raising expectations unreasonably and delivering information inconsistently or incoherently.
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Getting Tough.
Meyer, Harvey; Human Resource Executive; v24 no6 pp 18, 20-22 May 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : AmeriGas has started making health coverage contingent on employees getting a medical checkup, abandoning gentle encouragement and adopting a stick approach. Relentlessly soaring health care costs and lack of results from premium reductions, cash rewards and the carrot approach, prompted the change. In the next three to five years, 47 percent of employers intend to impose financial penalties and even removal from group insurance rolls for employees' refusal to participate in programs to improve their health, according to Hewitt Associates, especially smoking cessation, disease management and biometric screening. Some employers have legal concerns about privacy and discrimination from using penalties. But a Towers Watson consultant advises that effective communications can circumvent problems.
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Show Them the Money.
Duxbury, Kim; Benefits Canada; v34 no5 p 55 May 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Matching employer contributions for deferrals to retirement savings programs are a strong component in employee recruitment and retention strategies. Over 30 years, the matching contributions can add up to more than $300,000 compared to unmatched employee savings. Yet many employees in Canada fail to take advantage of employer contributions. The absence of automatic enrollment and other automatic features are a major regulatory obstacle to participation in a retirement savings program and maximizing its value, together with ineffective consumer education and lack of extra funds to set aside. Even without automatic features, plan sponsors can target communications to nonparticipants and those not making the most of matching contributions and push the benefit in recruitment efforts.
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Strategies for Maximizing Participant Engagement and Sustained Involvement in Wellness Programs.
Norman, Gordon; Taitel, Michael; Employee Benefit Plan Review; v64 no11 pp 6-10 May 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Employers struggle with getting employees to fully use the benefits available through wellness programs, to achieve the health and financial results desired. Programs must be part of a pervasive organizational culture of health, and the specific offerings must suit individual needs. A meaningful health risk assessment is a critical starting point, and it should communicate the tie between wellness and productivity. Financial incentives are useful, especially when integrated with other overall employee benefits, but communication and organizational commitment are even more effective at promoting participation. While wellness is a matter of personal responsibility, a support system with personal health coach can boost sticking with smoking cessation, exercise and other programs.
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Supplemental Security.
McIlvaine, Andrew R.; Human Resource Executive; v24 no6 pp 40, 42, 44 May 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The need for cost management has pushed some benefits out of the group traditionally considered core and into voluntary benefits, options payable by employees. Voluntary benefits at reduced group rates enable employees to supplement the benefits provided by employers to fill gaps and assure broader financial security. The International Foundation of Employee Benefits reports term life, vision, long term care, long term disability, accident and dental insurance are most widely offered. Enrollment should be simultaneous with that for core benefits, and having a specific person to explain the products is crucial, as long as sales communications are tactful and not overly aggressive.
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The Changing Face of Reward: Key Drivers in Today's Reward Programs.
McMullen, Tom; Reigel, Bill; Journal of Compensation and Benefits; v26 no3 pp 25-29 May-Jun 2010; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Research on trends in compensation reveals the effect of the global financial downturn. The Hay Group studied 230 firms, half in Europe, one-fourth in Asia and one-fifth in North America from late 2009 to early 2010. They found recruiting and retaining key personnel to be a primary focus in the evolving compensation strategy. Next is the search for ways to balance adequate employee compensation with the total cost of that compensation for employers. Pay for performance is a critical and rising factor in the compensation strategy, creating the need to establish valid performance metrics, communicate them to employees and managers and support managers in evaluating performance. The concept of total rewards should be communicated clearly and frequently.
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