Workplace Demographics Impact More Than Health Care Costs

Benefits pros are very familiar with providing census data to health insurers. These census include demographic factors such as age, gender, and geographic location. Insurers use this data to project anticipated health care costs for the upcoming year. Insurers will project higher cost if the data shows that the population is older or has a larger number of females than the general population. Other factors impact the rate insurers charge for health insurance coverage, but demographics play a significant role in setting rates.

On its face it appears that using demographic factors such as age and gender to determine health insurance rates is fair. Older workers and women on average do use more medical services and incur more health care expenses than younger workers and men. However, benefit pros need to be aware that an innocuous practice of determining benefit rates can have legal consequences. They need to understand that discrimination against older workers and women is illegal. And they need to make sure that they advise management not to use insurance data in making employment decisions that negatively impact certain groups.
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If One of Obamacare’s Biggest Critics Wants to Use It To Save His Business, Can It Really Be That Bad?

I read a ton of employee benefit articles everyday. And when you read as much as I do you start to think you can predict where the field is going. Of course not everyone agrees with my opinions. But that doesn't stop me from sharing them...

For example, it's my opinion that some of the biggest Obamacare critics will eat their words. I'm not just talking about these critics being proven wrong because that happens daily. I mean they will embrace the very law they claimed was the worst thing to ever happen to America. Don't agree? Well, how about this as an example...

In 2012 Donald Trump
said this about Obamacare,

I know so many people who have companies where they are going to close them up as soon as it [Obamacare] really starts kicking in, which is in '14."

Irony of ironies, Trump Entertainment plans to stop paying for health care for thousands of union workers as it tries to avoid going out of business. And here is the kicker,
Trump Entertainment wants to provide these workers with a $2,000 stipend to purchase coverage on the federal exchange. Yes, instead of ruining companies, one of Obamacare's greatest foes is trying to use it to save one of his. Continue Reading...

Human Resources and Employee Benefit Pros Must Protect Their Credibility

Human Resource professionals are the butt of many jokes. And sometimes we are also the targets of professional criticism. Jokes can serve as a reminder to not take things too seriously. Professional criticism on the other hand is something entirely different. When someone suggests that HR pros are incapable, we must defend our competence. And benefit pros need to understand that despite the technical nature of the information they manage, their expertise is also subject to scrutiny, especially at this time of year.

Given the many unpopular changes that can occur during benefits open enrollment, including premium increases, the last thing HR and benefit professionals want to get wrong are their numbers. Unfortunately, many HR departments do get the numbers wrong. Sometimes it is a simple mathematical error in calculating the employee's share of the new premiums. Sometimes it is a generalization about Increases that should be more specific. Both situations provide validation to HR critics that HR and benefit professionals lack mathematical and analytical skills.
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Stop Using Tax Terminology to Explain Employee Benefits


Every employee benefit pro experiences at least one nightmare open enrollment at some point in their career. And almost always the nightmare is due to miscommunication and lack of comprehension. And what is more difficult to communicate and comprehend than employee benefits tax terminology?

Pre-tax, after-tax, tax-advantaged, tax-deferred, tax-exempt, tax-favored, tax-free, tax-qualified, tax-savings... These are all tax terms benefit pros routinely use to describe the important features of various benefit plans. Some of these terms have the same basic meaning, making them especially difficult to comprehend. And all of these terms use the one word that most workers know little about

Avoiding Tax Terms

Probably the best way to communicate the tax features of workplace benefit plans without using tax terminology is to:
  • Call them money-saving or cost-reducing features,
  • Illustrate these features using simplified examples
Benefit pros can create numerical examples of how participating in certain benefit plans effect take-home pay. Using a spreadsheet application like Excel or a salary/deduction calculator like makes creating these examples quick and easy. But sometimes even numerical examples dont get the message across. Employees may still misunderstand how the tax structure of their employer-sponsored employee benefits saves them money until it is too late. Continue Reading...