Employee Benefits Archives - The Reschini Group

The Reschini Blog: The Pros and Cons of PTO

In the ever-shifting world of people management, the discretion over when time away from the job is justified has long been a source of friction and compromise. What is vacation? What is a sick day? What is an emergency? And who gets to make those final designations, the employee or the supervisor?

Paid Time Off, or PTO, offers a management strategy designed to alleviate or eliminate those points of possible contention, by changing the nature of the discussion. Under a PTO system, employees can “bank” a pre-determined number of hours – either by pay period, or by month, or annually – then draw from those hours for whatever purpose they want.

In addition to simplifying the administration of an employee’s time away, PTO treats the employee as an adult capable of managing his or her time responsibly while not needing to worry about justifying the reason to a manager, or offer misleading information about taking a sick day when not actually being sick. Also, PTO keeps healthy employees from feeling “penalized” for not taking sick days available to them.

Having a PTO system in place also makes a company more attractive to potential employees and increases loyalty among current employees, since time off is treated as a pool of hours, and not segmented into categories. This means, for example, that unused sick days can be automatically used to take more time for vacation.

Of course, some caution must be taken with plans like PTO. Managers must watch so that employees do not abuse the system, taking unreasonable stretches of time away that impact the company negatively. Also, managers must still take responsibility for sending home an ill employee, who would prefer to stockpile time for vacation instead.

But for organizations with a culture that welcomes flexible work schedules, PTO can be a great tool for all involved, as an attractive alternative to traditional vacation and sick time off.

Contact the Benefits team at The Reschini Group to learn more.

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

The Reschini Benefits Blog: Total Compensation Statements

For many employees, the paycheck represents the sum total of how their employer compensates them. But in many cases, that’s not the complete picture.

From the employer’s perspective, the benefits package offered to their workers may be quite substantial, but those same employees may not be aware of or may not understand the full scope of what they’re being offered. A Total Compensation Statement can help raise appreciation, morale, and loyalty among the members of a workforce.

A Total Compensation Statement highlights the monetary value of a company’s benefits package, including those perks that may be overshadowed by traditional benefits, to include information on:

Salary
Bonuses
Commissions
Stock options
Stock grants
Employee stock purchase plan
Retirement plan
Social Security contributions
401(k) matching contributions
Paid time off
Coverages for health, life and disability insurance
Wellness rewards (e.g., discounts and cash  bonuses)

By assigning a dollar amount to benefits that do not seem to have a tangible monetary value, employers can promote the idea of total compensation, beyond just a paycheck. Pulling back the curtain in this way can lead to higher retention rates among employees and can make the organization more competitive when talking with recruits during the hiring process.

Committing to providing Total Compensation Statements will require some investment of time and resources to gather and present this data, but the return on this investment can be more than worth the effort.

Contact the Benefits team at The Reschini Group for more information.

Here is a resource for total compensation:

Total Rewards – Compensation and Benefits

The Reschini Blog: Workers’ Comp and the Pandemic

Believe it or not, 2020 may not have been such a bad year for workers’ compensation insurers and insureds after all.

The National Council on Compensation Insurance (NCCI) looked at results through the third quarter of 2020 and extended those through the end of the year, using data from private carriers and state funds in 41 jurisdictions. The NCCI figures are calendar year and do not reflect the full costs of treating COVID-19 or other health conditions with long-term effects.

Overall for 2020, NCCI found:

Worker claims due to COVID-19 have ranged from no symptoms to critical care, hospitalizations and, unfortunately, fatalities in some cases.
The overall COVID-19 claims picture is by no means dire, with the majority of cases only requiring the injured worker to miss work and quarantine or recover at home.
About 80% of the COVID claimants received very limited treatment, with 20% admitted to the hospital, representing the costliest and most complicated cases.
The typical COVID inpatient stay lasts on average about seven to eight days.
The majority of workers filing COVID workers’ compensation claims were women, at nearly 70%. These claimants are also generally older than the typical injured worker, with a large share age 55 years and older.
Also, injured workers who contracted COVID-19 and required medical treatment were more likely to have comorbidities such as hypertension and chronic pulmonary disorder.
COVID-19 claims were predominantly among frontline workers, first responders, healthcare and other essential workers, and teachers.

As the Delta variant surges across the U.S., it will be important to see how trends impacting workers’ compensation claims mirror or diverge from those seen from the initial round of COVID-19.

For more information, contact the workers’ compensation experts at The Reschini Group.

Download our resources about Workers Comp and COVID:

Work Comp Insights_ Coronavirus Considerations

Benefits Blog: Are you an ALE?

The definition of what constitutes an “applicable large employer,” or ALE, can have a significant impact on how that enterprise must arrange for and cover the cost of health care coverage. Be sure you know whether your organization qualifies as an ALE in the eyes of the federal government, especially the Internal Revenue Service.

The Affordable Care Act (ACA) requires ALEs to offer affordable, minimum value health coverage to their fulltime employees or pay a penalty. This employer mandate is also known as the “employer shared responsibility” or “pay or play” rules.

To qualify as an ALE, an employer must employ, on average, at least 50 full-time employees, including full-time equivalent employees (FTEs), on business days during the preceding calendar year. All employers that employ at least 50 full-time employees, including FTEs, are subject to the ACA’s employer shared responsibility rules, including for-profit, nonprofit and government employers.

A Full-Time Employee is an individual that works, on average, 30 or more hours of service each week. For this purpose, 130 hours in a calendar month is treated as the monthly equivalent of 30 hours of service per week.

Equivalent Full Time Employee counts are determined by looking at part-time employees. Hours worked by employees with fewer than 30 hours per week must be counted—and then divided by 120 per month—to determine the number of FTEs. The number of FTEs is then added to the actual full-time employee count

As you might expect, the definitions surrounding what constitutes affordable, minimum value health coverage can become intricate and technical, as well. But if you’re an ALE, it’s your responsibility to know the rules and abide by them.

Contact the Benefits Team at The Reschini Group for more information and guidance.

Benefits Blog: Technology-Based Enrollment

Open Enrollment generates enormous work for companies and some confusion and stress for workers hoping that their benefits choices for the coming year are the best ones for them and their families.

Technology-based enrollment, however, can alleviate a sizeable portion of those issues, saving employers time and money, while making the process more efficient and user-friendly for HR departments and employees. Here’s how:

Every step of the benefits management process is automated, eliminating the need for paper-based processes and improving efficiency and accuracy.
Online enrollment lowers the overall cost of providing services to employees by eliminating the costs of distributing and collecting paper enrollment packets. It also shortens the enrollment cycle.
Online enrollment enables employees to self-enroll in benefit programs, review their benefit data and report life-event changes.
Employees can choose plans based on eligibility criteria and can compare costs and coverage of previous elections against new offerings.
Elections can be automatically applied to employee records.
Employees receive written confirmations detailing their elections, and can easily view and update their records and plans.
Human Resources can check the status of enrollment in real time and may be able to generate detailed reports regarding the cost of employee benefits.

At the same time, some employees may be intimidated by an online option, preferring more one-to-one assistance. Also, some employees may not make informed benefit decisions if they are only advised via the computer and are not provided personalized recommendations.

To encourage as much online enrollment as possible:

Introduce new software and train employees before Open Enrollment begins.
Use existing resources (company’s intranet, bulletin board postings or newsletter) to promote technology-based enrollment.
Encourage management to promote the use of technology-based enrollment to increase employee buy-in.
Establish online communities or blogs where employees can discuss successes and problems they are having while enrolling.

Technology is a tool that can offer impressive advantages, but people must feel comfortable and safe for an employer to make the most of the opportunity. Talk with the Benefits Team at The Reschini Group for help in fashioning an Open Enrollment program for your particular situation.

Benefits Blog: Tips for a Successful Open Enrollment

Once a year, the floodgates fly open and a benefits bonanza begins. It’s Open Enrollment, a slice of time when employers make benefits packages available to employees, who must then sift through options on the way to selecting the best protections for them and their families.

Open Enrollment can be overwhelming. Employees can re-evaluate their current benefits and make  changes for the coming year, while employers must choose a  benefits package that balances cost and value and facilitate  the enrollment process.

Benefit  offerings change as new demands on employees  and employers arise. To make the  process as smooth as possible, employers must educate and communicate with their employees  effectively.

As employer-sponsored benefits transition to more voluntary, employee-paid or employee-subsidized offerings, employees must assume more control in making smart decisions. Benefit information should be conveyed in an easy-to-understand format providing essential information, along with any additional helpful resources.

The typical Open Enrollment process looks like this:

— Notification: Employers send out an organization-wide announcement alerting employees that open enrollment will begin shortly.

— Receipt: Employers distribute information about benefit plans, selection information and the appropriate forms to their employees, as well as information from selections made the previous year.  Employers may offer employees additional information as appropriate to assist in decision-making.

— Deliberation: Employees research available options and discuss with family to determine which benefits they will select for the coming year.

— Decision: Employees select their benefits.

The Open Enrollment process can be improved by:

— Establishing solid communication between the HR department and employees.

— Surveying the employee population to determine their priorities.

— Customizing benefits and information resources to the life stages of your employees.

There’s a lot riding on the process and the decisions made during Open Enrollment, but by taking some strategic steps, all parties can emerge from the experience feeling good about the choices made and the benefits to be provided over the coming year.

Contact the Benefits Team at The Reschini Group for more help with your Open Enrollment questions.

Report Card: Filing the Form 5500 Annual Return

Data drives decisions. Data reveals trends. Data is the lifeblood of business and government. And data provides the underpinning of one of an employer’s most important documents each year – the Form 5500 Annual Return/Report of Employee Benefits Plan.

This annual report filed by employee benefit plan administrators is used by the U.S. Department of Labor (DOL), Internal Revenue Service (IRS) and the Pension Benefit Guaranty Corporation (PBGC) to consolidate the main annual reporting requirements for employee benefit plans. The Form 5500 series is intended to protect the rights and benefits of plan participants and beneficiaries by assuring that:

Employee benefit plans are operated and managed in accordance with certain prescribed standards
Employee benefit plan participants and beneficiaries are provided with or have access to sufficient plan information

In addition, the Form 5500 series is an important compliance, research and disclosure tool for the DOL. It is also a source of information and data for use by other federal agencies, Congress and the private sector in assessing employee benefit, tax and economic trends and policies.

Small welfare benefit plans that are unfunded or fully insured (or a combination of unfunded and insured) are exempt from the Form 5500 filing requirement. A small welfare benefit plan is one that has fewer than 100 participants at the beginning of the plan year.

A welfare benefit plan is unfunded if benefits are paid as needed directly from the general assets of the employer. Plans that use a trust or separately maintained fund to pay benefits are not considered unfunded. A plan is insured if benefits are paid through insurance policies. If premiums are paid by employees, the employer must forward the employee contributions no later than three months after receipt.

The Form 5500 series must be administered completely and carefully. Contact the Benefits team at The Reschini Group to learn more and to set up a meeting.

Touchpoint: Preparing a Summary Plan Description (SPD)

Benefits packages represent a two-edged sword – they’re incredibly important in providing for and protecting yourself and your family, while they also can be rather challenging to read and fully understand.

That’s why the U.S. Department of Labor requires employers to provide each employee with a Summary Plan Description (SPD). This key compliance document for virtually every Employee Retirement Income Security Act (ERISA) plan “is the primary vehicle for informing participants and beneficiaries about their rights and benefits under the employee benefit plans in which they participate,” according to the DOL.

The SPD must be written so as to be understood by the average plan participant and must be sufficiently comprehensive to inform participants about their rights and obligations under the plan. Also, ERISA and underlying DOL regulations include strict requirements for the content and delivery of SPDs.

The SPD must be automatically distributed to plan participants by certain deadlines. It also must be provided upon a participant’s request. The SPD must include specific types of information, such as the plan’s eligibility rules. Virtually all group health plans subject to ERISA must provide participants with an SPD, regardless of size.

ERISA does not require that a plan document be in any particular format. However, the plan document must address:

Benefits and eligibility;
Funding of benefits;
Procedures for allocating and delegating plan responsibilities;
Plan amendment and termination procedures;
Designation of named fiduciary; and
Required provisions for group health plans, such as COBRA rights and HIPAA compliance.

ERISA does not require plan administrators to provide a new SPD booklet every year. An updated SPD must be provided every five years if material modifications are made to the SPD’s information during that time period. If no changes are made, then an updated SPD must be provided every 10 years. It is typical, however, for plan design changes to be made each year, particularly for group health plans.

A “wrap” document supplements existing documentation to fill in the missing ERISA-required provisions. When a wrap document is used, the ERISA plan document comprises two pieces: 1) the insurance certificate or benefits booklet; and 2) the wrap document itself.

Employers who fail to prepare an SPD may face serious penalties. Contact the Benefits team at The Reschini Group to learn more and to set up a meeting.

Striking a Balance: Is a Section 125 Cafeteria Benefits Plan Right for You?

Balancing an employer’s desire to provide benefits with an employee’s need to secure them can be a challenge. Factor in cost, tax obligations, and other variables, and the task becomes more daunting.

Enter Section 125 plans, more commonly known as cafeteria plans. While different types of these plans exist, each provides the opportunity to save money by reducing both the employer’s and employees’ tax liability.

A Section 125 plan may be established pursuant to rules found in the Internal Revenue Code (IRC) Section 125, which provides an exception to what is generally called the “constructive receipt doctrine.” Under the constructive receipt doctrine, offering an employee a choice between cash and an employee benefit requires that the amount that could have been received be included in the employee’s gross income.

A Section 125 plan allows employers to provide their employees with a choice between cash and certain qualified benefits without adverse tax consequences. Without a Section 125 plan, employee contributions can only be made with after-tax dollars. The three basic forms of Section 125 plans are:

Premium Only Plan – The most basic and most popular. This plan allows employees to pay their portion of insurance premiums with pre-tax dollars, which in turn reduces both the employer’s and employees’ tax liability. Benefits that are typically offered within a Premium Only Plan include: health, dental, vision, accidental death and dismemberment and group term life insurance.
Flexible Spending Account – Employees may make pre-tax contributions to these accounts, from which an employee may seek reimbursement for expenses paid for child care, health plan deductibles and eligible medical expenses not otherwise covered under a health plan. A Flexible Spending Account allows an employee to increase his or her spendable income while also reducing the employer’s tax liability.
Full Cafeteria Plan – This permits the employer to make a non-elective contribution for every eligible employee. The employees may spend the employer contribution to purchase any of the benefits offered within the plan. In addition, the employee may contribute pre-tax dollars to purchase additional benefits beyond what he or she can purchase with the employer’s contribution.

Of course, many additional variables impact Section 125 plans, such as: offering employees a choice between cash and benefits; limitations on changing employee benefit selections during the plan year; access to any unused Flexible Spending Account funds; impact on other benefits such as Social Security or retirement benefits; administrative costs; and special considerations related to the Affordable Care Act.

It can be a difficult balance to strike, but the Benefits team at The Reschini Group can help determine the best course of action for your specific circumstances. Contact us today to learn more and to set up a meeting.

Clear and Credible: Developing a Benefits Communication Program

Employee benefits represent roughly a third of the typical individual’s total compensation package, so it’s in everyone’s interest that the terms, guidelines, and options inherent in those benefits are communicated clearly and with credibility.

That’s the rationale for developing a well-crafted, consistently executed benefits communication program. Achieving this can take time and careful planning. Here are some tips and best practices to streamline the path to success:

Know what benefits your organization provides and how they work.
Ask how your employees feel about your benefits program.
Keep employees and beneficiaries informed of changes to their benefits, and explain confusing terms and features of the plans.
Develop a communication plan, including a timeline, budget, and list of resources or employees to be involved.
Decide what type of communication will be most appropriate for relaying messages to employees.
Sell your communication plan to your manager by defining the benefits associated with the elimination of employee confusion about their benefits.
Set measurable objectives for how much money and time your communication plan will save.
Prioritize compliance with government regulations and clarification of complicated issues, procedures, and terms.
Prepare the communication plan to fit corporate objectives and employee needs.
Target segments of employees who would benefit most from specific features of a benefit by sending tailored communications.
Evaluate the effectiveness of your communication plan through employee surveys, and revise as warranted.

The time and resources devoted to researching, building, and following through on a solid benefits communication plan can prevent confusion, delays, lost productivity, and even impact bottom-line financial results. It is well worth the effort, and can yield important returns to your organization.

The Benefits team at The Reschini Group has more information on this subject, and is ready to help your business develop an effective benefits communication plan.