Reach Remote Employees for a Successful Benefits Enrollment

Employees have never been known to clamor for information about their health and welfare benefits. In fact, studies show that most workers would prefer to do just about anything else besides learning about their benefits program. But it’s 2020 – a year when a pandemic seems to have turned the world upside down – so be prepared for remote employees to immerse themselves in your company’s benefits enrollment communications.

The double-whammy of the COVID-19 pandemic and an economic crisis has many American workers concerned about their benefits and the financial security that comes with company-provided health and welfare benefits. As employees face decisions during open enrollment, more attention may be paid to the coverage they need for 2021 – from medical plan options to disability benefits and supplemental life insurance.

Reach Employees for Successful Remote Benefits Enrollment

Employees who previously wouldn’t glance at voluntary benefits such as critical illness insurance and long-term care coverage may now review the offerings and consider enrolling in the plans. Are there benefits that employees should be taking advantage of? For the upcoming enrollment, employers can enhance their benefits package by adding one or two voluntary benefit options.

Enrollment is also an opportunity to remind employees of the COVID-19 benefits that are available through the company’s medical plan. Those benefits typically include the waiver of COVID-19 testing.

With a better understanding of their benefits, employees gain a greater appreciation of the value of the employer-provided health and welfare programs.

New Normal, New Ways to Reach Workers

Getting employees to that point of understanding and appreciation means educating them about their various benefit options. And, with the pandemic continuing to force social distancing, employers won’t be scheduling in-person enrollment meetings or health fairs. This year’s enrollment calls for a new approach to reaching a remote workforce.

As tempting as a passive enrollment may be in this chaotic year, employers should lean toward active enrollments so that employees go through the decision-making process about the important health and welfare plans that provide them some security.

Through this pandemic, video conferences, teleconferences, and webinars have become second nature to most employees who are working remotely and these tools can be very effective methods of communicating your benefits program this fall. Video conferencing and webinars allow employers to present updates for the 2021 benefits package and also respond immediately to questions from employees.

Without in-person enrollment meetings or one-on-one sessions with benefit advisors, employers should try to include online decision-making tools such as medical plan comparisons and benefit cost calculators in the enrollment process.

For employers who rely on a paper enrollment process, it’s time to consider moving to an online enrollment process. Protecting employee data as they make elections and enter information into the enrollment system remotely is essential.

Change Up the Communications

Employees now may be more interested in their benefits and employers can take advantage of this curiosity by mixing up their enrollment communications. Keeping in mind that many remote employees may not have printers, it will be helpful to provide communications that do not have to be printed. It’s also effective to keep messages brief and instructive – providing action items and spotlights on important content. While much of your communications can be online, postcards mailed to the home are often useful reminders for key messages and enrollment dates.

Changes to the benefit program – especially if it’s bad news – should be announced early and in a straightforward manner. Giving employees a “heads up” about higher costs or reduced benefits enables them to prepare for the impact of the change. It’s also important to have the buy-in of managers and supervisors so that the messaging they provide to employees is clear and consistent.

Highlighting certain benefits topics (i.e., an overview of enrollment and changes for 2021, or a video that explains the differences between consumer-directed health plans and a preferred provider organization option) into short 2D graphic videos allows employees to quickly and easily absorb complex information. Many remote employees are juggling work assignments, home-schooling their children, and maintaining a household, so access to short videos to learn about enrollment and their benefits can help in their decision-making process.

With the likelihood of more employees paying attention to their benefits today, Human Resources and Benefits staff may experience an increase in questions and requests for more information. As you prepare for enrollment, it may be beneficial to include “Frequently Asked Questions” that can be posted on the enrollment page of the company’s intranet or shared through an email to employees.

Conclusion

Certainly, this year’s enrollment brings challenges to reaching a remote workforce, but it also offers a chance to connect with them and improve their understanding and appreciation of their benefits package.

If you would like to learn more about how to help your employees navigate benefits remotely, please contact Dave Barchet in the form below.

Published August 19, 2020

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COBRA Litigation Risk on the Rise

If you are an employer that is subject to COBRA, you are probably aware that there are significant penalties that the Department of Labor can assess if you fail to offer coverage or give proper COBRA notice to employees or beneficiaries who lose the health coverage that you provide. These penalties are up to $110 per day for each violation, and they can add up quickly. This alone causes most employers and vendors to take COBRA compliance seriously. What you may not know is that these same employees or beneficiaries can also sue you for common and inadvertent COBRA compliance issues.

COBRA Litigation Risk on the Rise

COBRA Lawsuits

Unfortunately, there appears to be a new wave of class-action lawsuits targeting employers who may have used an outdated COBRA notice or maybe did not give clear instructions on where to mail COBRA premiums or really any number of other COBRA compliance violations.

One of the firms filing these lawsuits is ClassAction.com. Visiting their web site you will note a list of common mistakes employers make that can lead to litigation. These mistakes involve more than just missing deadlines in providing a COBRA election notice. The list includes contacting only the employee losing health coverage and forgetting to also contact the covered spouse and dependent children—remember each covered family member has an individual COBRA election right.

The ClassAction.com website also boasts about million dollar settlements recently won on behalf of individuals whose COBRA rights were either violated or not administered properly. This should be a wake-up call for employers to examine their COBRA procedures to ensure full compliance. Given the number of furloughs and lay-offs occurring throughout the U.S. due to COVID-19, this COBRA examination or audit becomes urgent.

Reviewing COBRA Practices

Findley stands ready to assist employers in reviewing their COBRA practices. This can even be in the context of a full ERISA audit. Since many employers outsource COBRA administration to a third party, Findley can also help employers review those administrative agreements and recommend changes to indemnification provisions to protect the employer from the administrator’s failures or omissions.

For more information about auditing COBRA administration and litigation risk, please contact Bruce Davis in the form below.

Published May 29, 2020

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10 Steps to a Return-to-Work Preparedness Plan

Across the country, states are easing coronavirus-related restrictions, and now hosts of new workplace issues are emerging – along with the over-arching question of what the work environment will look like as businesses strive to protect the health of employees and customers. For several weeks, non-essential businesses and their employees have ridden out the “stay at home” mandates, but the next phase may not be so temporary. The path forward is uncharted and made even more challenging as the reopening guidance, which varies by state, evolves almost daily. Businesses need a return-to-work plan.

While many organizations have successfully equipped employees to work remotely during the COVID-19 pandemic, numerous others are unable to conduct business in a virtual atmosphere. They cannot provide their products or services through a remote work model. And to make matters worse, the economic crash has resulted in a devastating loss of customers. 

10 Steps to a Return-to-Work Preparedness Plan

Adapt to Reach “New Normal”

Edging back into a functioning physical work environment may feel like walking a tightrope: relying on a confidence that feels threatened; advancing with cautious, considered moves; and finding and maintaining a center of gravity because organizations are vulnerable to the unexpected.

The overwhelming considerations business face to protect the health of their employees and customers are strategic and tactical:

  • Leadership challenges
  • Re-engaging a potentially fragile workforce
  • Modifying workplace practices and the work environment to safeguard employees, customers and vendors 

Now is a good time to borrow and adapt strategies from the manufacturing industry’s playbook, where safety in the workplace has been front and center since the Occupational Health & Safety Administration (OSHA) was established in 1971.

With so much to consider, it’s important to take a structured approach to prepare a return to a business as (nowhere near) usual environment. Social distancing, virtual meetings, protective equipment and the need to avoid travel must be incorporated in the workplace.

Re-engaging employees is crucial: they need to feel motivated, valued and productive. But first things first: one of the basic needs that humans share is a need for safety and security. It’s unlikely that employees will feel motivated, valued and productive if they don’t feel safe. Now is the time to manage and mitigate the risk.

The best approach is a measured one, customized to accommodate the varying levels of health risk being faced and implementing practices that achieve a balance between acceptable levels of business performance and acceptable levels of relative risk.

Return-to-Work Plan: 10 Steps

It’s time to take action. Beyond requirements at the state level, every organization should have a preparedness plan based on an assessment of physical and operational risks specific to their organization – and in many cases, the plan will need to be customized to specific types of employees.

1. Create a committee of key stakeholders to ensure that there will be a dedicated focus to implementing and managing a safe space and safe practices. In addition to a committee head, include employees from all functional areas of the organization: operations/production, administration, and line staff. 

2. Identify external technical resources to assist with technical issues and risk management. In small organizations, or in organizations where staff is at capacity, engage third-party resources who can help. These could include human resources consultants, safety consultants, and legal experts.

3. Develop and document a communication plan which focuses on educating the workforce and regularly reporting results and critical issues. Consider the “Stop Start Continue” approach:

  • What do we need to start doing immediately? 
  • What do we need to stop doing? 
  • What current practices will continue to work well and how can we sustain them? 

This will be an iterative process, and its value hinges upon monitoring, reporting, learning from near misses and being agile enough to recalibrate as needed.

4. Understand the legal requirements specific to employment law, and be aware of what may not be required but may work well in your organization.

5. Assess the infrastructure to make sure that communications and technology platforms will meet increased demands.

6. Reconfigure workspaces or practices to keep employees at a safe physical distance from each other. If you have an open workspace, it may be difficult to keep employees six feet apart. Cubicle walls of an appropriate height can solve this problem. Evaluate operational ways of reducing the likelihood of exposure: staggering work shifts, downsizing operations to allow for appropriate social distancing, etc.

7. Identify potential sources of COVID-19 that employees may be exposed to through the nature of their work and also the current risk factors in the local community. The plan should clearly address your approach to minimizing the risk.

8. Determine the risk that travelers from other cities, states or countries have on your employees.

9. Implement precautions for employees with individual risk factors due to age, chronic medical conditions or other health issues that place them at risk; as well as for employees who have immediate family members who are at risk.

10. Establish strategies for conducting business with a reduced workforce due to staffing cuts and/or unexpected absenteeism (cross-training and skill development, leveraging digital learning where possible).

Assess Coronavirus Risk

An employer may have varying levels of risk to the novel coronavirus, based upon different types of jobs performed, geographic locations and the current physical work environment. Lower levels of coronavirus risk include jobs that have minimal occupational contact with other workers or the general public. 

Jobs in the medium health risk category typically require frequent and/or close contact with people who may have been infected but are not known or suspected patients. This could include frequent contact with the general public and/or frequent contact with travelers.

Jobs with high or very high potential for Coronavirus exposure include those delivering general healthcare, medical or mortuary services, and those performing specific types of medical and lab procedures.

Note that each state where you have business locations may have differing requirements. The matrix below illustrates a high-level overview of considerations applicable to all organizations, the potential health risk by job setting; and outlines important factors to consider before resuming operations.

Considerations

Job SettingRisk LevelAdministrativeWorkplace PracticesWorkplace Environment
AllVaries 
  • Document policies for reducing risk of exposure
  • Implement a communications plan
  • Train employees on new practices
  • Minimize contact among workers
    (remote working where practical, virtual meeting, restricted travel)
  • Provide hand sanitizers, tissues, no-touch trash bins; supplies for disinfecting workspaces
  • Post hand washing signs and instructions
  • Improve ventilation
  • Install high efficiency air filters
  • Ensure work environment is cleaned and sanitized

Specific Considerations

Job SettingRisk LevelAdministrativeWorkplace PracticesWorkplace Environment
Healthcare / MedicalVery High to High
  • Enhance monitoring of employees
  • Job-specific training
  • Make counseling available
  • PPE appropriate for the job (gloves, gown, shield, mask respirator)
  • Specialized ventilation
  • Isolation rooms where needed
Community Setting (general public schools, high density work places)Medium
  • Communicate availability of medical screening
  • Keep customers and vendors informed of safety practices
  • PPE appropriate to the risk level and job setting (mask, gloves)
  • Physical barriers where appropriate
    (drive through service for customers; shields/sneeze guards)
Production EnvironmentMedium
  • Consider staggering shifts
  • Modify staffing levels to maintain safe distancing
  • PPE appropriate to the risk level and job setting
  • Where appropriate, limit customers and the public’s access to the worksite
  • Physical barriers where appropriate
Field Service (non-medical, non-community setting)Medium to Low
  • Keep customers and vendors informed of safety practices
  • Determine if work can be performed during times where less interpersonal contact is likely
  • Use a face mask if required
  • Continue to use PPE that would normally be used for the job
 
Sales (outside / field sales)Medium to Low
  • Work remotely when possible
  • Conduct virtual meetings
  • Use a face mask if required
 
OfficeLow
  • Keep customers and vendors informed of safety practices
  • Ensure workspaces allow for appropriate distancing
  • Continue to allow staff to work remotely when feasible
  • Allow scheduling of hours that will reduce number of employees on site
  • Use a face mask if required
  • Where appropriate, limit customers and the public’s access to the worksite
  • Install physical barriers (cubicle walls) where appropriate distancing is not possible

Guide Employees through Change

These are monumental changes that pose logistical, financial, operational and cultural challenges. They require the formation – and consistent reinforcement – of different approaches and new habits and behaviors. Leadership and communication are more critical now than before the COVID-19 pandemic, as many employees will feel vulnerable for quite some time. 

Making changes to the physical environment and to workplace practices is part of the solution, organizations must also re-engage employees through sustained communication, a willingness by leadership and employees to adapt to these changes, and resources to ensure that employees know that their well-being is the first order of business.

For more information on return-to-work readiness, contact Sandy Turba at Sandy.Turba@findley.com or 216.875.1937 or Dan Simovic at dan.simovic@findley.com or 216.875.1917

Published May 18, 2020

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Four Keys to Recalibrating Human Capital Strategy

The impact of the COVID-19 pandemic continues to unfold, changing our approach to personal and work life now and likely for the remainder of 2020. The unexpected economic challenges brought on by the coronavirus pandemic have prompted companies to assess their financial forecasts and adjust as best they can. Beyond making appropriate financial adjustments, every organization should rethink their human capital strategy. And, they should do it now. Below are the four most critical areas of focus during these uncertain economic times.

Human Capital Strategic Planning

More than ever, every company needs to assess their short-term and long-term plans for retaining key employees and maintaining the necessary talent base to weather the crisis. This human capital assessment should be a formal structured activity that is consistently monitored and reported on until the business climate returns to a level of normalcy. Absent a strong human capital plan, companies will emerge from the crisis weaker than their competitors.

Four keys to recalibrating Human Capital Strategy

Leading From a Distance

During uncertain economic climates, like this Coronavirus Economy, leadership and management skills differentiate the winners and losers in businesses of all sizes and in all industries. At the heart of this challenge is how adept managers are at maintaining relationships with their employees. Do they know how to rigorously maintain communications, focus their employees, build trust and hope with a team that they may not physically interface with?  For many leaders, this is a new test of management skills. Driving employee engagement is now more demanding than ever before.

Compensation and Total Rewards

In the past decade, base compensation grew very modestly in most industries while incentive compensation became a significant portion of total target compensation. In addition, there has been an emphasis on total rewards beyond compensation, especially for the millennial workforce. Given the likelihood that most organizations will not be able to pay bonuses, it is critical that companies establish a new approach for rewarding workers and staying competitive in the marketplace. On top of that, health and welfare costs remain a central point of discussion at most organizations. At the onset, the pandemic’s economic impact shows new strategies for compensation and total rewards need to be addressed and implemented.

Employer Communications and Branding

Human capital decisions made during the COVID-19 pandemic will influence the employer’s brand in the future. Employees will remain loyal and support the organization as much as possible if the company is doing its utmost to take care of them. How the company communicates at all levels – from executives to salaried and hourly employees – is at the heart of employer branding. Everyone needs a transparent and consistent message, even if the news is not positive. Employees must be a top concern.

So, while these four human capital areas may seem elementary, a company’s key success will be how it tackles the unique strategic needs during this Coronavirus Economy. It is certain that new human capital strategies will need to be established in order to prevail through the current storm.

While this article is a call to action, in the upcoming weeks, Findley’s experts will offer best practices within these four core human capital areas during this time of economic uncertainty.

How has the economic downturn impacted compensation? Find out what additional strategies you can adopt, and your current options are for compensation and total rewards in the article below.

Article: Adapting Compensation Strategy in an Economic Crisis

For more information about recalibrating your human capital strategy, contact Dan Simovic at dan.simovic@findley.com or 216.875.1917, or Sandy Turba at Sandy.Turba@findley.com or 216.875.1937

Published April 30, 2020

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Pssst… Reasons to Avoid Conducting the Next Engagement Survey

After all these years, it turns out that engagement surveys may not be all that organizations want them to be. Don’t blame the survey; it does its job to collect data. That data can drive significant change when there’s an action plan. If there’s no action plan, reconsider issuing the next engagement survey.

For decades, organizations have used engagement surveys as a tool to help improve productivity, and attract and retain employees. Increasing profitability is the common goal of pinpointing areas of concern and resolving the issues. The challenge is not often in facilitating the survey or identifying areas needing improvement; the struggle is developing an action plan and addressing the underlying problems. That is where many organizations fail.

Neutral Rating Survey Question Response

According to Leadership IQ (a leadership training and research firm), more than 3,000 respondents to an online quiz indicate that nearly 60% of companies are not taking meaningful action on the data from their employee engagement surveys. In our experience, Findley consultants recognize that identifying issues is the easy part of surveys.

Driving organizational change is tough.

Without getting into finite detail, the output of survey results can be grouped into several categories: culture, work-life, leadership, management, rewards, communication, career path, learning and development. There are many challenges in addressing such broad topics with a survey, including:

  • Were the appropriate questions asked?
  • When negative responses are provided by employees, an expectation has been set that problems will be fixed. Will corrections be made?
  • Generally, there are multiple root drivers for getting low scores. Does the survey provide enough data on where the problems reside?
  • Those assigned to address problem areas are often the people associated with the low scores. Should an independent resource contribute to the development of a solution?
  • How balanced is the approach to addressing issues? Does employee feedback carry all of the weight or are management’s voices considered, as those may offer differing opinions than those expressed by the employees?
  • Over-reaction is as bad as indifference or being slow to act. It can lead to rash piecemeal corrections without a holistic plan for improvement. How are survey results addressed?

Surveys by themselves will not fully define or solve organizational issues; they can contribute to identifying some negative areas in the organization, but the challenge remains for leadership to address the noted issues of concern. Moreover, improving employee satisfaction scores to higher levels does not always correlate to improved business results. Our experience shows some organizations that have high engagement scores do not carry that success into business performance. A balanced approach is needed to connect people and business expectations; organizations need to progress beyond surveys.

Engagement surveys are one piece of the equation. Similar to online candidate assessments used in recruiting, they are not the definitive answer, rather surveys are tools to measure critical areas. They become data points to be considered.

Aside from engagement surveys, companies should look at the big picture and manage to an ideal state. From Findley’s experience, the most successful organizations have this core characteristics framework which connects their people and business strategy:

  • Effective leadership which formally includes a people strategy within its business plan
  • Trained managers who use effective goal setting, provide ongoing feedback and support their employees
  • Clear job expectations, competency standards and organizational structure which supports each employee’s work needs
  • A performance culture which fosters open communication and supports challenges to the status quo
  • Issues are addressed as they happen, they do not linger and become chronic
  • An indoctrination and learning strategy connected to clear career paths
  • Defined rewards strategy (base, incentive, other benefits/perks) tied to performance

These are the day-to-day fundamentals, the blocking and tackling of management and leadership that drives retention, engagement and business growth. For many organizations, however, this stated framework is not ingrained in the company’s culture. Instead, they focus on symptoms found in the survey data, spending too much time on the granular points versus tending to broader core success factors.

Too often, department heads or individual managers are tasked with the follow up activity required to fix low scores. Meanwhile, the core issues reside with the broader organizational strategy and operations decisions and therefore, are rarely corrected satisfactorily.

Before performing the next engagement survey and assessing the data, step back and consider what will be done with the findings. Determine how the core characteristics of successful organizations can be incorporated into the action plan.

Questions regarding how to develop an innovative HR strategy or assess your current HR function or talent, contact the Findley consultant you normally work with, or Dan Simovic at dan.simovic@findley.com, 216.875.1917.

Published February 1, 2020

© 2020 Findley. All Rights Reserved.

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Pension Strategy Driver – 2020 PBGC Premium Rates Announced

For many sponsors of single-employer pension plans, the minimum cash funding requirement is no longer the most important number discussed with their actuaries every year. Instead, pension plan sponsors have shifted their focus to managing their PBGC premiums.

PBGC Premium Rates Chart 2007-2020. Flat-Rate vs. Variable-Rate

PBGC Premiums Defined

The PBGC premium is essentially a tax paid to a government agency to cover required insurance for the plan and the participant benefits in the event that the plan sponsor goes bankrupt. The annual premium is calculated in two parts – the flat-rate premium and the variable-rate premium – and is subject to a premium cap.

The flat-rate premium is calculated as a rate per person.

The PBGC variable-rate premium is an amount that each plan sponsor pays based on the underfunded status of its plan.

The variable-rate premium cap is a maximum amount that a plan sponsor of a significantly underfunded plan has to pay. It is calculated based on the number of participants in the plan. There are other caps that apply for small plans.

2020 Premiums Announced

For 2020, the flat-rate premium amount is $83 per person. This is 168% higher than the rate of $31 per person at the beginning of this decade.

For 2020, the variable-rate premium has jumped to $45 per $1,000 of the underfunded amount. Up until 2013, that rate was $9 per $1,000. That amounts to a 400% increase in just seven years.

The cap for 2020 is $561 per person; which means for a 10,000-life plan, the maximum PBGC variable premium is $5,610,000.

Therefore, the PBGC premium for a 10,000-life plan at the premium cap would total $6,440,000.

More information about various strategies to manage PBGC premiums can be found here: Managing PBGC Premiums: There is More Than One Lever.

More information regarding PBGC’s Current and Historical Premium Rates can be found on the PBGC’s website link above.

Questions? Contact the Findley consultant you normally work with, or contact Colleen Lowmiller at colleen.lowmiller@findley.com, 216.875.1913.

Published October 29, 2019

© 2019 Findley. All Rights Reserved.

Minimum Participation Rule Puts Pension Benefits at Risk

Almost all pension plans are subject to certain compliance tests that are outlined by the IRS. The compliance requirements are in place to make sure that if a plan sponsor’s contributions to a pension plan are deductible for tax purposes, then the pension plan’s benefits must not be designed too heavily in favor of the highest paid employees. One set of compliance rules for most pension plans are the minimum participation requirements. As some defined benefit pension plans continue operating, these rules are causing compliance concerns.

Minimum Participation Rule Details

Under Internal Revenue Code (IRC) Section 401(a)(26), a defined benefit pension plan must benefit a minimum of

  • 50 employees or
  • 40% of the employees of the employer.

If the pension plan is not benefiting any highly compensated employees (HCEs), it automatically satisfies the rule.

HCE is generally determined as an individual earning more than a specified dollar threshold established by the IRS for the prior year. This dollar limit is $125,000 based on 2019 earnings to determine HCEs for the 2020 year. All others are considered non-highly compensated employees (NHCEs).

Unintended Consequences

Today, many pension plans have been “partially frozen” for years, which means they have benefits accruing only for a specified group of employees. As time passes and ordinary turnover and retirement occur, the number of employees that accrue benefits in these defined benefit pension plans is decreasing.

Although the original purpose was to provide “meaningful” benefits to employees across the plan sponsor’s organization, these requirements are now causing accruals to be shut off as some plans approach and fall below the minimum threshold of employees accruing benefits.

For the affected employees, it comes at a time close to retirement age when their promised pensions, by design, would be accumulating at the highest rates, and defined contribution style benefits, like 401k plans, can’t realistically replace all lost future accruals.

Potential Strategies

Do Nothing and Wait

  • We can hope that legislative relief will be passed to eliminate the participation issues. However, Congress has considered addressing these issues over the last 5 to 7 years, and no movement towards enacting relief rules has been seen yet.

Merge Pension Plans

  • This provides immediate relief to minimum participation issues.
  • It could be a temporary solution if the benefits are also partially frozen across the combined defined benefit pension plan. Review the demographics to project how long this solution will last when weighing the advantages of this strategy for your situation.

Open the Pension Plan

  • Reopen the pension plan to additional participants. (Yes, this could make sense!)
  • More employees will be benefiting and eliminate minimum participation rule issues.
  • New plan participants can receive a different formula (something similar to the current plan formula but reduced, cash balance formula, variable annuity formula, etc.)
  • Consider if recruiting or employee retention issues can be reduced or alleviated by designing new pension benefits for targeted employee groups.
  • This can be designed to help bridge the time until the potentially affected employees reach retirement age.
  • Watch the mix of HCEs and NHCEs because the additional pension benefit design still needs to satisfy other IRS coverage, nondiscrimination, and design-based compliance rules.

Freeze Remaining Pension Benefits

  • The freeze can be for all participants or only for current and future HCEs.
  • Replacement benefits can be provided to address employee retention and retirement readiness issues.
    • Provide projected lost benefits as cash payment(s).
    • Executive employees can have some or all lost benefits replaced in a nonqualified deferred compensation plan or other executive compensation arrangement.
    • Design partial replacement benefits in a 401k plan.
  • Consider the impact of the pension plan freeze on other sponsored benefit plans. For example, are there benefits that are automatically available, or not available, based upon whether an employee is accruing benefits in the pension plan?
  • Curtailment accounting rules are triggered which may require an additional one-time expense to be recognized through income in the year of the benefit freeze.

In Perspective

There are many valid business reasons that explain why a plan sponsor would want to stop pension accruals for everyone except a specified group. We know the IRS rules were not intended to cause the loss of benefits for employees late in their careers. Regardless, several pension plan sponsors are at the point where their partially frozen pension plans are close to becoming noncompliant. While we continue to wait for legislative relief for this issue (that may never come), if you sponsor a partially frozen pension plan, you should determine when this will become an issue for you. Begin discussing possible strategies, and have an approach in place well ahead of time to minimize the disruption to your organization as much as possible.

Questions? Contact the Findley consultant you normally work with, or contact Colleen Lowmiller at colleen.lowmiller@findley.com, 216.875.1913.

Published October 28, 2019

© 2019 Findley. All Rights Reserved.

AI Technology Transforming the Next Generation of HR

The right mix of technology, artificial intelligence and the human element is a differentiator.

With the coming of Artificial Intelligence (AI) and broader uses of technology, HR professionals will be challenged to manage and humanize HR systems to achieve their objectives. AI is the ability of a computer program or a machine to think and learn. Call it what you will, HR Technology (HRIS, HRMS, HCM) are here to stay.

Steven Hawking once said that “Unless we learn how to prepare for, and avoid, the potential risks, AI could be the worst event in the history of our civilization.”

HR is Already Using Artificial Intelligence and Leveraging Technology

Many experts predict that AI will replace jobs involving repetitive or basic problem-solving tasks, and even go beyond current human ability. AI systems will make HR decisions instead of professionals in industrial settings, customer service and other interactive roles. 

Likewise, Human Resources technology and AI are used increasingly in every facet of the organization’s employment lifecycle as listed below.

  • Employers use social media to brand their companies and attract candidates
  • Applicant Tracking Systems technology improves HR professional’s recruiting and hiring efficiency and productivity
  • Screening technologies, such as video interviews, assessments or automated scheduling/screening help to vet candidates
  • Technologies have automated several HR-related tasks such as employee onboard processing, employee benefit elections and processing retirements
  • Performance management systems track individual performance and link that performance to company results
  • Employee engagement surveys, and 360 feedback systems capture the employee perspective
  • Training modules are distributed to employees and their utilization tracked via learning management technology systems
  • Compensation data surveys and cloud-based technology tools are available to compensation professionals that subscribe to them

Today many employee or prospective employee interactions are not with a human being. Instead, leveraging AI in HR, candidates apply for a job to an automated HR system, have an initial online screening, interview via video and through conversational job matching, are assessed to determine if they are talent worthy of further consideration. The assumption is that these HR software solutions are faster, more accurate and cost-effective at selecting the best talent.

How has the Human Resources Professional’s Role Changed?

Businesses that are late adopters of technology will be left behind. In today’s competitive market your speed to attract, hire, manage, develop and reward your talent is a key success factor. As we have seen in the marketplace, organizations that are lacking in this space have higher employee turnover and lower productivity. They are not meeting the needs of today’s generation which require immediate capability to engage and transact certain activities. Organizations using traditional HR approaches and software solutions struggle to land and keep top talent.

Human Resources professionals will need to significantly adapt and add new skills beyond being people experts. HR teams will need to develop a stronger understanding of systems, process and data analytics). We see this movement in the world of professional sports where data analytics augments identifying top talent. Businesses are slowly following this AI trend and are beginning to reap the benefits.  

Building Your Next Generation HR Team

One of the best innovators in hiring today is a company called Catalyte. In fact, Catalyte’s mission states: “Catalyte advances human potential for the digital economy. We use artificial intelligence to identify individuals, regardless of background, who have the innate potential and cognitive ability to be great software developers.”

Catalyte uses AI to review candidates for pure ability – not experience – and then builds skills through a strong apprentice and training program. The organization looks for raw talent and molds that talent to develop the computer programming skills they need to succeed.

Is your HR team combining innovative technology with raw human skill to build your workforce for the future? What kind of HR talent do you need to create and lead this kind of approach?

In larger organizations, where resources may be more plentiful, the focus of systems, process and data analytics may be assigned to specific departments. In smaller organizations everyone shares the burden of addressing these AI areas. Irrespective of the size of the organization or the specific role, HR professionals will need to build their technical acumen and become the conduit to building a workforce for the future.

After all, even AI uses algorithms built off of desired outcomes, as identified and input by human experts. Therefore, HR teams today require a mix of both art and science.

Questions regarding how to develop an innovative HR strategy or assess your current HR function or talent, contact the Findley consultant you normally work with, or Dan Simovic at dan.simovic@findley.com, 216.875.1917.

Published August 14, 2019

© 2019 Findley. All Rights Reserved.

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On-Site Clinic Considerations — Best Practices

By Dave Barchet.

On-site clinics continue to gain momentum as more and more large employers focus on ways to improve health and well-being and lower costs. On-site clinics have evolved from providing basic occupational health to now providing services for preventive care, acute care, chronic condition management, specialty care and wellness initiatives, as well as providing prescription drug dispensing.

There are many different models that can be adopted, from having a registered nurse on site for a few hours a week to a full blown clinic (bricks and mortar) staffed with medical directors, PAs, RNs, services available during typical office hours.

Whether the reason for exploring a potential on-site clinic is to provide more robust access to your employees (especially in rural locations); to enhance and integrate your well-being program; or to focus on cost savings, there are some basic keys to success. We will review these success factors below, but keep in mind that on-site clinics are not for every employer.

A recent study by Mercer illustrated that in 2016, 32% of employers with 5,000 or more employees offered on- site clinics for primary care services, and another 10% were considering adding their own health clinics in the next two years. More than half of the employers in the survey said that their clinic was integrated with their population health efforts.

The Ante — 1,000 or More Employees at a Single Work Site

Success of a clinic is dependent upon volume, so consideration of an on-site clinic should start with your population size and, more importantly, your population location. Do you have 1,000 employees (some would even say 2,000) working at a single work site or campus? If so, this is a good start for further considerations. This cuts out any barrier of access and also greatly reduces the amount of time off the employees need to take to get to the clinic for care.

Let’s face it, one of the key drivers of utilization is the convenience and ease at which the clinic can be reached.

Hours of Operation — 40 Hours a Week, at Minimum

Not only is geographical access important, but so are the hours of operation. Consider the clinic a true doctor’s office. Your employees are on-site generally five days a week and 40 hours a week, so the clinic should be available to them during that same time as well. While the cost of operating a clinic on a 40 hour per week basis increases, so does the utilization, which is key to the success of the clinic. If operating time is limited, employees may resort to using the emergency room or urgent care as their primary care provider. Employers with multiple shifts may want to consider extending the hours of operation to accommodate shift workers.

No Cost or Copay to the Employees Who Use the Clinic

A $0 obligation for the employee will help drive utilization, which is the main factor in operating a cost-effective clinic. Findley recently conducted a study of the impact of an on-site clinic and found the plan savings per visit at an on-site clinic versus visits through the health plan network were $62 per visit. Actual plan savings will vary between different groups due to geography, the Preferred Provider Network being used, and the level of services the clinic provides.

It is important to note the exception of offering a $0 cost to the employees is with Qualified High Deductible Health plans with Health Savings Accounts. The IRS requirements of member cost sharing would remain with the QHDHP.

Trust/Ability to be Liked

This is one of the most important factors. The staff at the clinic has to be likable and trusted. How do you accomplish this? Consider an interview process with key stakeholders or a health care committee up front.

If that is not doable, consider a video message from the clinic staff to the employees. This would serve as both advertising and a way for the employees to get to know the staff personally.

Promoted and Supported by the Top Level of the Organization

Like any endeavor a company wishes to take on, it is more believable and acceptable when it is promoted and supported from the C-Suite of your organization. Moving down the path of an on-site clinic is not inexpensive, so additional investment in the messaging and where the message comes from is worth the time and cost.

Visit Other Companies On-Site Clinics

We encourage prospective groups to visit other companies’ on-site clinics to take a tour. We have found that employers with on-site clinics are more than happy, and are frankly proud, to show off their facilities. This allows you to experience clinic operations first hand, explore different options, and determine what is right for your company . . . a full blown clinic (bricks and mortar) or an RN staffing the clinic a few hours a week.


For more information about on-site clinics, contact Dave Barchet at 216.875.1914 or Dave.Barchet@findley.com.


What’s in a Name?

As you have read throughout this article, I have used the term on-site clinic, which is the most commonly used or accepted term to describe this service model. A lot goes into a name, however, and we have seen the term on-site health center being frequently used as well.

The dictionary defines a “Clinic” as: an establishment or hospital department where outpatients are given medical treatment or advice, especially of a specialist nature.

The dictionary defines a “Health Center” as: a building or establishment housing local medical services or the practice of a group of doctors.

Essentially they are defined the same way, but which sounds more appealing to you? The name can be especially meaningful if you are focusing on preventive services and wellness, which according to the Mercer Survey, over half of the responding employers was the reason for integrating the clinic into their health efforts.

An alternative for smaller employers are near-site clinics. This is primarily a financial play. as smaller employers join together to contract with a clinic to help avoid the direct overhead costs of operating an on-site clinic. Employers sharing a near-site clinic should be careful about the fees they are charged.

Some pricing arrangements allocate the percentage of the clinic’s fees to the number of employees or members in each group. If one or more employers pulls out, each remaining employer’s portion of the cost could suddenly rise to accommodate the clinic’s full operating costs. When contracting with an off-site clinic, put the onus to find employer replacements on the clinic’s operator; thus, keeping the employer’s share of the costs unchanged for the balance of the contract.