by admin | Jun 5, 2023 | Employee Benefits, Human Resources
Total rewards packages refer to the compensation and benefits plans that companies offer. This phrase, however, extends beyond mere salary or wages and traditional benefits, like health insurance, to provide both recruits and employees with a rundown of what makes the employer special. Some in Human Resources might regard the total rewards package as the starting line for employee value proposition (EVP).
Here are the different components of a total rewards package:
Compensation
Compensation, which may refer to wages or salary, is the obvious main feature of the total rewards package. People get paid for their work, so they can afford housing, food, and the basic necessities of life. The money you’re paid to work may include the chance for bonuses and other merit-based rewards, in addition to salary or wages.
Basic Benefits
The most well-known benefits include health, vision, and dental insurance. People have come to expect some form of medical insurance for full-time employment in the United States. In fact, most rely on this benefit for their healthcare because private insurance is astronomically expensive without group membership, and the United States does not have a public option.
Retirement Plans
Offering 401(k) or IRA plans have also become the norm. Companies previously rewarded loyalty with pensions that could help people survive after employment ended. However, nowadays, pensions have been replaced by these other retirement plans, which rely on sometimes volatile markets. There are penalties for taking the money out of such accounts before retirement.
Paid Time Off (PTO)
Paid time off is not a given in every job. However, it refers to the time people are allowed to take vacation, recover from illness or injury, and celebrate holidays while still getting paid. This can include vacation days, sick days, and bank holidays.
Nowadays, some companies are getting creative with PTO. They may include shared days off, where the entire organization takes a break and gets paid. Or they might have unlimited PTO, which means people do not have to accrue or earn days based on seniority. Rather, they can take off when they need to without limit. In those cases, however, employers use an honor system to ensure people do not take advantage of the system.
Family Leave
This is key for new parents, those tending to loved ones who are ill or elderly, or those facing a longer-term illness themselves because they can take time off for care. However, family leave does not have to be paid. Approved family leave requires employers to hold the position for the person, but they do not have to be paid during that time off. It depends on whether they company offers pay for family leave. Many do pay for maternity leave for up to three months, and many others are offering paternity leave now, too. Assessing employment law is a necessity in these cases. And job applicants must do their due diligence when vetting potential employers if they think they may need leave at some point.
Learning and Development and Career Paths
Employees are seeking opportunities to learn, grow, and develop in their careers while on the job. Therefore, more employers are trying to offer training, classes, reimbursement for tuition or coursework, mentorship, leadership development, and other opportunities to gain skills necessary for raises and promotions. It will also help the individual and the employer remain relevant as the skills gap becomes more of a problem in the future of work.
Mental Health and Wellness Programs
For decades now, people have looked to their employers for gyms or gym membership. But now everyone is thinking beyond physical health to mental health as well. As a result, access to mental health help, employee assistance programs (EAPs), classes on mindfulness or yoga, apps for stress management, and more are on the table. Many employers are responding with a wealth of benefits related to wellness and well-being.
Free Food
Providing free lunches, snacks, or special occasion treats has been a hallmark of American companies. Many of the tech giants have campuses that provide services from dry cleaning to dental work, and free food in the cafeteria is a given. As employers try to convince people to return to the office in this post-pandemic era, they try to lure them with bagels or pizza or even other more gourmet options.
Work-Life Balance
Flexibility in where and/or when people work is going mainstream. As the gig economy gains steam, people expect to have more flexibility in their scheduling. Offering remote or hybrid work schedules, understanding when someone must pick up their kid from school or go to a doctor’s appointment, and allowing people to execute asynchronous work during off hours are benefits that impact work-life balance.
Ultimately, the total rewards package a company offers is the first sign of its relationship with employees. It tells the story of how talent is valued by an organization. It usually requires more than just money to satisfy recruits and employees.
By Francesca Di Meglio
Originally posted on HR Exchange Network
by admin | May 30, 2023 | Employee Benefits, HSA/HRA
Are you the type of person who loves to save money? You’ll be happy to know that there’s a way to do so with your health care costs. It starts with medical expense accounts which let you set aside money to pay for certain health products and services. One type of medical expense account is a Health Savings Account (HSA).
How Does An HSA Work?
An HSA is a type of personal savings account you can use to pay certain health care costs. An HSA lets you pay for qualified health, dental and vision care costs for yourself, spouse and dependents with tax-free money. The money you contribute comes out of your paycheck – before taxes – and that is how you save to pay for your out-of-pocket health care expenses. Like a regular savings account, your HSA has an interest rate that allows your money to grow while sitting in the account. Your employer also has the option of contributing to your HSA, helping it to grow faster.
If you don’t use all of your HSA funds during the calendar year, you can roll that money over. An HSA is owned by you so you take it with you no matter if you change plans, change jobs or if you decide to retire. You will get a debit card which is linked to your HSA when you set up your account that you use to pay for eligible expenses.
You must be enrolled in a High Deductible Health Plan (HDHP) to open and contribute to an HSA. HDHPs medical plans aim to minimize your health care costs if you don’t use your plan a lot but keep you financially protected in cases of illness or emergency. Similar to a car insurance policy, you pay for your expenses up to the point that you meet your deductible and then the insurance coverage begins. The higher the deductible you choose, the smaller the monthly cost will be. But it also means that when you have health expenses, you are responsible for all of the costs up to your deductible amount. Rather than pay for your health expenses that occur before hitting your deductible out of your pocket, you can pay for those expenses using pre-tax dollars from your HSA account.
Federal law includes strict guidelines for HSAs including HDHP cost sharing and annual limits on contributions. The amount you contribute can be adjusted throughout the year but they do have an annual limit on how much you can contribute per year. This limit is set by the IRS and usually increases each year. Contribution limits for 2023 and 2024 are:
What Are the Benefits of Having an HSA?
- Money goes in tax-free – Your HSA contributions are made on a pre-tax basis and are also tax deductible
- Money comes out tax-free – Eligible healthcare purchases can be made directly from the HSA account
- Earn interest, tax-free – The interest on HSA funds grows on a tax-free basis. Unlike most savings accounts, interest earned on an HSA is not considered taxable income when funds are used for eligible medical expenses.
- Your HSA balance can be invested – Depending on your HSA, you may be eligible to invest your HSA similar to a 401k or IRA – in an interest-bearing account, mutual fund, stocks or bonds.
- Your HSA balance can be carried over – Unlike a Flexible Spending Account (FSA), an HSA is not a use-it-or-lose-it account. You can carry over your balance year after year.
- You can use your HSA to add to your retirement funds – After the age of 65, you can withdraw funds from your HSA for any reason without penalty.
The Bottom Line
HSAs are often referred to as triple tax-advantaged and are one of the best savings and investment tools available under the U.S. tax code. As a person ages, medical expenses tend to increase, particularly when reaching retirement age and beyond. Therefore, starting an HSA early and allowing it to accumulate over a long period, can contribute greatly to securing your financial future.
by admin | May 23, 2023 | Compliance
2024 BENEFIT PARAMETERS FOR MEDICARE PART D CREDITABLE COVERAGE DISCLOSURES ANNOUNCED
The Centers for Medicare and Medicaid Services (CMS) released a Fact Sheet announcing the 2024 benefit parameters for Medicare Part D. These factors are used to determine the actuarial value of defined standard Medicare Part D coverage under CMS guidelines.
Each year, Medicare Part D requires that employers offering prescription drug coverage to Part D eligible individuals (including active or disabled employees, retirees, COBRA participants, and beneficiaries) disclose to those individuals and CMS whether the prescription plan coverage offered is creditable or non-creditable. Creditable coverage meets or exceeds the value of defined standard Medicare Part D coverage.
Insurance carriers and providers of the prescription benefit will typically notify the plan sponsor if their prescription plan is creditable or non-creditable. The 2024 parameters for Medicare Part D are:
The Online Disclosure to CMS Form must be submitted to CMS annually, and upon any change that affects whether the drug coverage is creditable:
- Within 60 days after the beginning date of the plan year
- Within 30 days after the termination of the prescription drug plan
- Within 30 days after any change in the creditable coverage status of the prescription drug plan
QUESTION OF THE MONTH
Q: Where can I find the updated RxDC reporting instructions?
A: The most recent version of the reporting instructions and templates can be found on the Centers for Medicare and Medicaid website.
To receive an email when the instructions are updated, create a Registration for Technical Assistance Portal (REGTAP) account. Select the checkbox “Please send me updates for the Consolidated Appropriations Act / No Surprises Act” in your account settings.
© UBA. All rights reserved.
| This information is general in nature and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors. |
by admin | May 16, 2023 | Health Insurance, Hot Topics
Healthcare costs, and consequently employee health benefit costs, have been growing at an alarming rate in recent years. The U.S. as a nation spends more on health care than any other developed country but has worse health outcomes. How is this possible?
Four Key Factors Driving U.S. Healthcare Costs:
Healthcare gets more expensive when the population expands, as people get older and live longer. The Baby Boomers, one of America’s largest adult generations, is approaching retirement age. Because of this, the 65+ population is growing at an unprecedented rate. According to the U.S. Census Bureau, 21% of the entire population will be age 65 or older by 2030. Older Americans will make up almost one-quarter of the population by 2060.
This growth is likely to contribute to rising healthcare costs in two important ways:
- Growth in Medicare enrollment
- More complex, chronic conditions
- U.S. Population Is Growing More Unhealthy
According to the Center for Disease Control and Prevention (CDC), 6 out of every 10 adults in the U.S. have at least one chronic disease, such as asthma, heart disease, high blood pressure, or diabetes, which all drive up health insurance costs. In 2020, the health care costs of people with at least one chronic condition were responsible for 86% of health care spending.
Additionally, recent data finds that nearly 20% of children and 40% of adults over 20 in the U.S. are either overweight or obese, which can lead to chronic diseases and inflated healthcare spending.
On average, Americans shell out almost twice as much for pharmaceutical drugs as citizens of other industrialized countries pay. Moreover, prescription drug spending in the U.S. will grow by 6.1% each year through 2027, according to the Centers for Medicare and Medicaid Services (CMS) estimates.
Drug pricing strategies also contribute to rising healthcare costs. Drug manufacturers establish a list price based on their product’s estimated value, and manufacturers can raise this list price as they see fit. In the United States, there are few regulations to prevent manufacturers from inflating drug prices in this way.
Simply put, multiple systems create waste. “Administrative” costs are frequently cited as a cause for excess medical spending. The U.S. spends about 8% of its health care dollar on administrative costs, compared to 1% to 3% in the 10 other countries the JAMA study looked at.
Why is administrative spending so high in the United States? The U.S. operates within a complex, multi-payor system, in which healthcare costs are financed by many different payors. With so many stakeholders involved, healthcare administration becomes a complicated, inefficient process.
These inefficiencies contribute to excess administrative spending. The main component of excess administrative spending is billing and insurance-related (BIR) costs. These are overhead costs related to medical billing, and include services like claims submission, claims reconciliation and payment processing.
Administrative costs, an aging population, rising prescription drug costs, and lifestyle choices all play a factor in ballooning healthcare expenses. While some of these factors are not in your control, others are. Find out where you can make a difference, not only in health insurance costs, but also to your overall health!
by admin | May 9, 2023 | Johnson & Dugan News
Volunteers make an immeasurable difference in people’s lives and often serve with the intention of helping others. But, did you know that volunteering can benefit your mental health as well?
While it’s true that the more you volunteer, the more benefits you’ll experience, volunteering doesn’t have to involve a long-term commitment or take a huge amount of time out of your busy day. Donating your time in even simple ways can help those in need and improve your health and happiness.
Here are a few of the mental health benefits that result from volunteering:
- Improves Mental and Physical Health – Volunteer activities keep people moving and thinking at the same time. Additionally, volunteering reduces stress and increases positive, relaxed feelings by releasing dopamine. By spending time in service to others, volunteers report feeling a sense of meaning and appreciation, both given and received, which can have a stress-reducing effect. Reduced stress further decreases risk of many physical and mental health problems, such as heart disease, stroke, depression, anxiety and general illness.
- Provides a Sense of Purpose – Volunteering connects you with a cause bigger than yourself. Many individuals feel that where they volunteer says something about who they are. Dedicating time to a cause can give you new direction and allow you to find meaning in something unexpected. It can also take your mind off your own troubles while keeping you mentally stimulated.
- Nurtures New and Existing Relationships – Loneliness has been described as an epidemic in the U.S. and making friends as an adult can be difficult. Volunteering is a remedy to this problem because it increases social interactions and builds a support system based on shared interests. Like-minded, like-hearted people come together over common values. Whether it is campaigning for specific political goals, volunteering time to help sick children in the hospital or working in a soup kitchen, a volunteer activity can help break the ice with potential new friends all while giving back to your community.
- Increases Confidence – Some volunteering activities require learning new skills. Being in an unfamiliar environment while gaining a new skill provides mental stimulation. Additionally, while growing your skill set to make a difference for others, you gain a sense of pride which can lead to having a more positive view of yourself.
- Ignites Passion – Volunteering is a fun way to explore different interests and learn from others. It can be an energizing escape from your daily routine – especially if you work in front of a computer all day in an office and long to be more active outdoors. You can look for opportunities to help with walking dogs at your local animal shelter or help with building homes for those in need.
- Makes You Happy – Research shows that brain activity spikes during volunteer activities. We are social animals and are designed to be part of a wider community. Volunteering helps you make the world a better place and helping others provides great pleasure.
What are you passionate about?
Do you want to feel good while doing good?
How would you like to see the world be a better place?
There’s a volunteer activity perfect for your skill set and time availability. Churches, schools, or libraries can always use your support. Whether it’s tutoring a student, visiting the elderly, caring for abandoned animals, or being a baby cuddler (yes – that’s holding babies in the neonatal intensive care unit in the hospitals!), the possibilities are endless. There are even ways to volunteer remotely via phone or computer. Getting involved will boost your well-being while you are making a difference in the community.
