| Test Your Human Resources Knowledge | ||
|
| Labor Law Journal Submissions | ||
|
| Labor Arbitrators' Awards and Biographies | ||
5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
From Spencer's Benefits Reports: Even though employers’ bottom lines would better benefit from attaining positive outcomes in wellness programs, employers most frequently focus incentives on program participation rather than on outcomes. This is one of the conclusions reached by the Integrated Benefits Institute (IBI) in a survey, jointly conducted with Harris Interactive, of the incentives and disincentives provided by more than 500 employers with a total of approximately 5 million workers to promote a healthy and productive work force. San Francisco-based IBI is a nonprofit research organization focusing on the effect of health-related productivity on employers’ bottom lines.
Nearly three-fourths (73%) of employers responding to the IBI survey provide at least one incentive program. Although midsize employers provide the most incentives, even employers with fewer than 500 employees averaged more than four health and productivity incentives. In a study published in the July 2007 issue of the Journal of Occupational and Environmental Medicine, the IBI found “significant opportunity for lost productivity savings from decreased lost time that can result from better health, in addition to medical and pharmaceutical savings” for the top ten most costly medical conditions alone.
Employers’ focus on program participation as the primary goal of their wellness programs, with a lesser focus on behavior change and outcomes, appear to reflect their uncertainty as to what outcomes to seek and how to measure attainment of those outcomes, IBI noted. According to IBI, “positive outcomes such as weight loss, fewer health risks, and heightened productivity would best serve employers’ health and productivity targets.” IBI recommends that employers begin by identifying measurable goals for participation, behavior change, and outcomes from their health and productivity improvement programs.
Employers do not see their incentives or disincentives as “optimal,” nor do they provide different disincentives based on the goals they seek. IBI observes that employers are “unwilling to mandate effective disincentives such as salary reduction or job sanction,” but does not point out that this reluctance is likely due to employers’ fear that they will violate HIPAA’s nondiscrimination requirements based on health risks and employees’ perception of fairness. IBI suggests that employers limit the number of incentive options available and tailor the options to the corporate culture and specific goals. Employers would do well to set the value of each incentive based on the participant effort required to attain specified goals. Furthermore, health and productivity improvement program providers should be held accountable for results obtained across all of the employer’s benefits programs, not just the vendor’s area of expertise.
The most prevalent incentives offered are discounted services (offered by 63% of respondents) and nonmonetary gifts (63%). More than one-third (37%) of respondents offer premium reduction; and one-fourth provide funds for a flexible spending account (27%) or reduced copayments (25%). Only 17% provide cash outright.
Most employers “invest” up to $200 per participant per year in incentives or disincentives, but a substantial number offer more than $500 and many believe that they should increase these amounts.
Transitional return-to-work programs are most successful when the affected workers are paid full salaries (used by 39% of respondents) and provided with all benefits (53% of respondents).
Corporate culture determines whether or not a company offers incentives or disincentives—disincentives might be viewed as “take-aways” or employer involvement in nonbusiness-related activity. If corporate culture is not quite ready for change, employers might begin with a simple, easy-to-understand program with lower dollar-value incentives; then over time expand program complexity and incentive value. The most prevalent disincentives imposed include premium increases (used by 65% of respondents who used disincentives), followed by copyament increases (43%).
Less than one-fifth (19%) of respondents penalize employees who do not cooperate with health and productivity programs. This is due to the belief among employers that positive incentives are more successful than disincentives. Employers might begin by using disincentives for “unpopular and costly” behaviors such as smoking. However, IBI pointed out that one person’s incentive is another’s disincentive as, for example, in the case of premium discounts for nonsmokers, but not for smokers.
“Employers appear confused about how to offer the most effective programs and how to target incentives and disincentives toward the goals they need to maximize the health and productivity of their work force,” the IBI report concluded. “Experience with current initiative programs, enhanced communication with employees about the importance of improved health and productivity, and careful management of results should help improve employer decision-making about the incentives and disincentives they use.”
For further information about the IBI report, Employer Incentives for Workforce Health and Productivity, and the related Actions for American Business Today: Expert Tips, visit http://www.ibiweb.org.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
Visit our News Library to read more news stories.
©2005-2024 CCH Incorporated or its affiliates
