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Quality of Care Reporting. No later than March 23, 2012, requirements for use by group health plans and health insurance issuers offering group or individual health insurance coverage to report benefits and healthcare provider reimburse- ment structures that improve health outcomes through the implementation of activities are to be issued. Examples of activities to be reported include quality reporting, effective case man- agement, care coordination, chronic disease management, and medication and care-compliance initiatives; activities to prevent hospital readmissions through a comprehensive program for hospital discharge that includes patient-centered education and counseling, comprehensive discharge planning, and post-discharge reinforcement by an appropriate healthcare professional; activities to improve patient safety and reduce medical errors through the appropriate use of best clinical practices, evidence-based medicine, and health information technology under the plan or coverage; and wellness and health promotion activities. Plans and insurers must annually report whether the benefits under the plan or coverage satisfy these elements. 2013 Health Insurance Administration Simplification. Rules establishing a single set of operating rules for eligibility verification and claims status should have been adopted by July 1, 2011, and take effect January 1, 2013. Rules for electronic funds transfer and healthcare payment and remittance rules must be adopted by July 1, 2012, and take effect January 1, 2014. Rules for health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, and referral certification and authorization rules are to be adopted by July 1, 2014, and take effect January 1, 2016. Health plans must docu- ment compliance with these standards or face a penalty of no more than $1 per covered life. The penalty takes effect April 1, 2014. Medicare Tax. Effective January 1, 2013, the Medicare Part A (hospital insurance) tax rate on wages goes up by 0.9 percent (from 1.45 percent to 2.3 percent) on annual earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly. There is also a 3.8 percent Medicare tax assessment on invest- ment income from interest, dividends, royalties, rents, gross income from a trade or business, and net gain from disposition of property for individuals earning over $200,000 and families earning over $250,000. FSA Contribution Limit. Effective January 1, 2013, contributions to a Flexible Spending Account (FSA) for medical expenses are limited to $2,500 per year increased annually by the cost-of-living adjustment. Elimination of Tax Deduction for Part D Subsidy Payment. Effective January 1, 2013, the tax deduction for employers that receive Medicare Part D retiree drug subsidy payments is eliminated. Requirement on Employers to Inform Employees of Coverage Options. Employers are to provide to each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013), written notice informing the employee of the existence of an Exchange, including a description of the services provided by such an Exchange, and how the employee may contact the Exchange to request assistance; if the employer plan’s share of the total allowed costs of2 Top 10 Best Practices in HR Management for 2012
Wellness Incentives. Effective for plan years beginning on or after January 1, 2014, employers may offer employees rewards of up to 30 percent (increasing to 50 percent, if appropriate) of the cost of coverage for participating in a wellness program and meeting certain health-related standards. Preexisting Condition Exclusions. The application of preexisting condition exclusions for plan years beginning on or after January 1, 2014, is prohibited. Comprehensive Health Insurance Coverage. Effective for plan years beginning on or after January 1, 2014, a health insurance issuer that offers health insurance coverage in the individual or small group market must ensure that such coverage includes the essential health benefits package that includes at least the following general categories and the items and services covered within the categories: N Ambulatory patient services N Emergency services N Hospitalization N Maternity and newborn care N Mental health and substance use disorder services, including behavioral health treatment N Prescription drugs N Rehabilitative and habilitative services and devices N Laboratory services N Preventive and wellness services and chronic disease management N Pediatric services, including oral and vision care Limits on Cost Sharing and Deductibles. Effective for plan years beginning on or after January 1, 2014, a group health plan may not provide any annual cost shar- ing in excess of those that apply to Health Savings Accounts (HSAs). 2018 Excise Tax on Cadillac Plans. Effective January 1, 2018, an excise tax is imposed on insurers of employer-sponsored health plans with total values that exceed $10,200 for individual coverage and $27,500 for family coverage. #2 FMLA Paid Leave Initiatives Most employers struggle with managing leave of absence issues, understanding Family and Medical Leave Act (FMLA) laws, and even knowing when a family medical leave of absence is covered by state or federal law. As employers in Con- necticut, California, New Jersey, and Washington state know, state and municipal paid leave initiatives are now taking hold in many places.4 Top 10 Best Practices in HR Management for 2012
been closed by order of a public official to limit exposure to an infectious agent, biological toxin, or hazardous material, and for reasons related to domestic vio- lence, sexual assault, or stalking. Feds Encouraging States to Legislate Paid Leave In order to entice the states to continue the move toward legislating paid leave for employees, DOL is pitching in. The 2012 Fiscal Budget for DOL includes $23,000,000 to fund the fed’s State Paid Leave Initiative, which will provide grants to assist additional states to establish paid leave programs. Typically, the programs are state-run insurance programs financed by employer and/or employee contribu- tions, and the programs offer up to 6 weeks of benefits to workers for reasons cov- ered under the federal FMLA who must take time off to care for a seriously ill child, spouse, or parent, or bond with a newborn or recently adopted child. Under this initiative, grants would be provided to assist additional states in plan- ning and start-up activities relating to state family paid leave programs. These funds will be provided to states for preimplementation planning grants to support activities designed to position a state to enact legislation and prepare for imple- mentation and implementation grants. Planning activities will include designing a program, establishing protocol for legis- lation to withhold taxable wages, defining family eligibility and benefits require- ments, and articulating start-up activities. Funds may also be used for activities such as research and analysis, coalition building; stakeholder consultation; devel- opment of a financing model and benefit structure; and development of an out- reach plan; and will culminate in a blueprint for implementation. Paid Sick Leave Benefits: What the Numbers Show In a recent report by the U.S. Bureau of Labor Statistics (BLS) examining paid sick leave benefits, length of service had minimal impact on paid sick leave provisions, but several other worker and company characteristics did affect the provisions. (The report is available at www.bls.gov.) Additionally, BLS’s report reveals that worker characteristics contributed to the differing employer costs associated with providing paid sick leave benefits. The data contained in the report are from the National Compensation Surveys on Employee Benefits in the United States and Employer Costs for Employee Compensation. Highlights of the report include: N Private industry workers access to paid sick leave benefits varied by occupa- tional group and ranged from 84 percent for management, professional, and related occupations to 42 percent for service workers. N 81 percent of employees earning wages in the highest 25 percent of the wage distribution had access to paid sick leave, compared to only 33 percent for employees in the lowest 25 percent. N In private industry, employees received an average of 8 days of paid sick leave after 1 year of service, with large establishments providing an average of 11 days and small establishments offering an average of 6 days.6 Top 10 Best Practices in HR Management for 2012
engage in unethical activities or at least look the other way can drive people to do things they would not normally do. N Some people make unethical choices because they are not sure about what really is the right thing to do. Ethical problems are often complicated, and the proper choice may be far from obvious. N Self interest, personal gain, ambition, and downright greed are at the bottom of a lot of unethical activity in business. Also, there are those who simply never learned or do not care about ethical values. Because such individuals have no personal ethical values, they do not have any basis for understanding or apply- ing ethical standards in business. N Misguided loyalty can cause employees to lie because they think that in doing so, they are being loyal to the organization or to their bosses. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) The Dodd-Frank Act provides significant financial incentives for employees to disclose to government officials what they believe may be illegal conduct by their employers. Here is a summary of the laws affected by the Dodd-Frank Act’s whistle- blower provisions. Sarbanes-Oxley Act. SOX prohibits retaliation against employees of publicly traded companies who report acts of mail, wire, bank, or securities fraud; fraud against shareholders; or violations of any rule or regulation of the Securities and Exchange Commission (SEC) to their supervisors or other appropriate officials within their companies or federal officials with the authority to remedy the wrongdoing. The law also prohibits retaliation against employees who assist in any investigation of such violations or participate in any proceeding related to an alleged violation of these laws (18 USC Sec. 1514A). Employees claiming retaliation under SOX must exhaust administrative remedies before bringing an action in court. Complaints are handled by DOL. If DOL does not issue a ruling within 180 days, the employee may seek a trial in federal court. The Dodd-Frank Act clarified some unsettled SOX issues. For example, courts were split on whether SOX grants whistleblowers a right to a jury trial. The Dodd-Frank Act makes clear that jury trials are available under the law. In addition, the Dodd- Frank Act amends SOX by adding the following provisions: N Non-publicly-traded subsidiaries of publicly traded companies are now covered by SOX. N Nationally recognized statistical ratings organizations are not covered by SOX. N The statute of limitations is extended from 90 days to 180 days. N Predispute arbitration agreements are prohibited under SOX. N Individuals cannot waive their rights or remedies under SOX. Securities and Exchange Commission Act. The Dodd-Frank Act created additional whistleblower protections under the SEC Act. Employees who provide8 Top 10 Best Practices in HR Management for 2012
As with other whistleblower provisions under the Dodd-Frank Act, employees may not waive their rights under this provision of the Dodd-Frank Act. Also, predispute arbitration agreements are prohibited. False Claims Act. Under the False Claims Act, an individual may bring a court action, known as a qui tam action, against any person who knowingly makes a false claim for payment from the government (31 USC Sec. 3729 et seq.). Employers are prohibited from retaliating against employees who participate in a qui tam action. Employees who prevail on a retaliation claim may be entitled to reinstate- ment, as well as double back pay, special damages, costs, and attorney’s fees. The Dodd-Frank Act expanded covered individuals to include not only the whistle- blower but also “associated others.” It also provides that employees have 3 years from the time of the retaliation to bring a claim. Best Practice: Employee Communities Drive Engagement at Top Company HP Advanced Solutions, located in Victoria, British Columbia, has been recognized as a Psychologically Healthy Workplace by the American Psychological Associa- tion (APA) and was recognized as one of “Canada’s Top 100 Employers” by Media- corp Canada in 2010. The APA award is very difficult to achieve, explains Greg Conner, vice president of Human Resources and Communications, with APA members surveying employees of nominated organizations, conducting on-site, one-to-one interviews with employees, and conducting a rigorous review of each organization’s policies and procedures. HP Advanced Solutions (www.edsadvancedsolutions.com), with a total of 400 employees, was founded in 2004 and is expert in information technology processes and hosting infrastructures services, says Cynthia Funnell, director of Marketing and Communications. With two distinct business lines, HP Advanced Solutions provides revenue manage- ment for the province of British Columbia, mainly through a call center with 50 agents collecting monies owed to the province, and a high technology division that provides applications and mainframe services for the province as well as some government-owned corporations. Conner explains that the company’s mission is to be the number one provider of labor-friendly business process and technology services. Of the 400 employees at HP Advanced Solutions, 370 are unionized. The voluntary employee turnover rate was only 6 percent in 2010 and 7 percent in 2009. Conner bases his employee-focused initiatives on the following foundation or prin- ciple that he mentions often:“When employees are engaged, they’re productive. Productive employees earn more money for their company. There are many exten- sive and cost-effective ways to create employee engagement and they ultimately impact the bottom line [in a positive manner].” Communities of Employees. One of his initiatives is creating and maintaining communities of employees that work together as cross-functional teams outside of their regular roles and work environments for the good of other employees, the organization, and the outside communities surrounding HP Advanced Solutions.10 Top 10 Best Practices in HR Management for 2012
#4 Social Media Employers are recognizing that social networking sites such as Facebook, LinkedIn, and MySpace can be useful marketing and recruiting tools. Likewise, employees have increasingly been utilizing social networking sites for a variety of uses, both personal and professional. Although these sites can be beneficial, their use can also have risks. Discrimination. Some employers review social networking sites as a method of screening applicants. Generally, once an applicant or employee posts something on a public domain, such as a social networking site, an employer is free to view it. However, by viewing candidate profiles, employers may learn more information (e.g., race, disability, age, religion, family/marital status, sexual orientation) than the employer could legally ask about directly. Therefore, it is critical that employers base all interviewing and hiring decisions on job-related criteria. Employers must also be aware that everything they find on a social networking site may not be cur- rent, accurate, or even placed there by the prospective applicant, as users of these sites sometimes “pretext” or pretend to be someone else. Background Check Laws. The federal Fair Credit Reporting Act (FCRA) requires employers to obtain applicants’ consent when a third party conducts a back- ground investigation. Some states also have their own background check laws. It is unclear whether these laws would require consent from an applicant before an employer or third party conducted an Internet search as part of a background check. However, even if not legally required to do so, employers should consider getting consent so that applicants are on notice that the information they post on social networking sites may be reviewed by the employer. Monitoring Employee Use of Social Networking Sites. There is little case law addressing the monitoring by employers of employees’ social networking posts. However, the few cases in this area suggest that courts will be reluctant to uphold an invasion of privacy claim (whether based on the federal constitution or state common law) when an employee voluntarily posts information on a public site. But the outcome may be different if employees set up an invitation-only site and have an expectation that only invited users will be able to read their posts. For example, a federal district court in New Jersey held that employees could pro- ceed with their invasion of privacy claim when they were fired after uninvited company managers accessed their invitation-only Web discussions of workplace grievances (Pietrylo v. Hillstone Restaurant Group, No. 06-5754 (D. N.J. 2008)). The court also permitted the employees to proceed with their claim that the managers violated the federal Stored Communication Act (SCA) and similar state law. The employees argued that one of the managers pressured an employee to provide him with her password to the site. The court reasoned that if proven, this would show a violation of the SCA and state law, because authorization to view the site was not “freely given.” In contrast, a California state court rejected an invasion of privacy claim by a college student who posted an essay highly critical of her home town on a social networking site (Moreno v. Hanford Sentinel, 172 Cal. App. 4th 1125 (2009)). The student’s former school principal forwarded the post to a local newspaper that12 Top 10 Best Practices in HR Management for 2012
However, employers may discipline or terminate employees because of their inap- propriate social media postings as long as the postings do not involve protected concerted activity. In one case, the General Counsel recommended dismissing an unfair labor practice charge against a newspaper that fired a reporter for sending “inappropriate and unprofessional” tweets from a work-related Twitter account. The reporter criticized the paper’s copy editors, the city where the paper was located, and a TV station that made a spelling error on its Twitter feed. The employee had been warned that his tweets were unprofessional and damaging to the newspa- per’s goodwill. The General Counsel found that the reporter’s actions did not involve concerted activity. Likewise, when an employee used social media to air his “individual gripes” against a manager, his activity was not protected. Here, the employee posted a Facebook comment expressing frustration about a dispute with a manager over mispriced and misplaced items. Some employees responded to the posting expressing emo- tional support and asking why the employee was so wound up. The employee’s comments contained no suggestion that other employees engaged in group action, and the employees’ responses gave no indication that they interpreted his com- ments in such a way. The Acting General Counsel’s report also addresses standards for social media policies. Social media policies must be drafted so that they would not reasonably be interpreted to deter employees’ exercise of their rights under the NLRA. For example, a policy that stated employees should be cautious about posts involving the employer that could be construed as inappropriate was considered too broad by the NLRB. This was because the policy contained no direction as to what would be considered “inappropriate.”Thus, employers should include definitions, exam- ples, or other guidance in social media policies to clarify broad terms. This area of the law is evolving. Employers should draft Internet and social media policies carefully so that they do not prohibit employees from engaging in activi- ties protected by the NLRA, and these policies should be reviewed by legal coun- sel. Additionally, until the law is settled in this area, employers considering adverse action against an employee who posted comments on social media about working conditions may first want to consult with local employment counsel. Employees’ Use of Social Networking Sites. Employers may find that employ- ees use social networking sites to post positive information about their organiza- tion’s products or work culture. Unfortunately, employee posts can also be detrimental to employers. Therefore, employers should have policies in place set- ting forth their expectations regarding employee’s social networking as it relates to the employer. Such policies should prohibit: N Illegal harassment of co-workers or customers; N Interference or disruption of work because of social networking; and N Exposing trade secrets or other proprietary company information. It is also a good idea to train employees on the proper and improper use of social networking at or relating to work.14 Top 10 Best Practices in HR Management for 2012
can run as high as $3,295 per hire. Plus, social media resources such as LinkedIn— which is specifically designed for business use—can quickly help you find the per- fect hire. Effectively incorporating this interactive technology into your recruitment efforts can be a win-win situation for both your new hires and your organization. In a BLR webinar titled “Online Recruiting: How LinkedIn Can Help You Find Talent, Network, and Build a Digital Referral Base,” Linda Duffy, president of Leadership Habitude, outlined ways to meet recruiting challenges using LinkedIn. The SHRM April 2011 Research Spotlight: Social Networking Sites and Staffing found that more than one-half (56 percent) of the organizations currently use social networking websites when recruiting potential job candidates. This is a significant increase since 2008, when a little over one-third (34 percent) of organi- zations were using these sites as a recruiting tool. Duffy confirmed:“I believe if you fast-forward another 3 years, it will be virtually 100 percent because I think this is the trend and the direction we’re going.” Out of the 56 percent of the companies using social networking websites for recruiting, virtually all of them (95 percent) are using LinkedIn. LinkedIn may be your very best resource for making the connections that lead to qualified candidates and, ultimately, job offers. Social media in general has many recruiting benefits. Here are five reasons social media—and LinkedIn in particu- lar—are great for staffing and recruiting: 1. It’s in real time. Candidates can set up alerts to be notified of new job postings and also can receive e-mails, texts, posts, and access websites on their phones. No more waiting on the news cycle to post a new classified advertisement. Nor- mal business hours don’t have to apply. 2. You can build a pipeline: Have candidates come to you! This is one of the unique things about using social media for recruitment. It’s a two-way commu- nication. LinkedIn also has groups users can join that allow them to see job postings immediately. 3. It’s viral (and that’s a good thing). LinkedIn demonstrates this as well as any site—we are no longer communicating one on one; it’s one to many.This is the power of the networking aspect of the site in which something you post can reach not only those who you are connected with but also potentially those they are connected with as well. Additionally, a person can forward or share content and connections and even post a comment on multiple sites at the same time. 4. It’s virtually free.Yes, you’ll have sunk costs if you want something fancy or highly integrated … and you’ll also have labor to monitor and post your ad, but the use of the site itself is free. If you post within a group on LinkedIn, there is no cost, but even if you post on their job section directly, it is only $195. Com- pare that to using offline agencies. 5. LinkedIn demographics tend to skew more professional than other social media sites. While they have fewer users (120 million) than some other social media sites, 70 percent are in the “workforce age population” of between 25 and 54 years of age. LinkedIn users tend to be more affluent and educated compared to those on Twitter and Facebook. This makes LinkedIn critical for recruiting professional candidates; it’s a great choice for meeting your staffing and recruiting needs.16 Top 10 Best Practices in HR Management for 2012
1. It’s easy! Whether it’s a factory, plant, or general office space, opportunities to be green are in every workplace.You can easily train workers to save energy, recycle, and reduce waste at little cost to your company. 2. Your competitors probably have one. If you want to stay competitive or gain an advantage, a green program will help you do that. 3. Your workers want it. Most employees are interested in how their company is practicing corporate social responsibility. This is a great opportunity for you to shine in the eyes of your workers and be an employer of choice because most employees link positive environmental and social activities to brand reputation. 4. It’ll save money. It’s simple, cutting energy costs and waste will save your company money. Simple tasks like printing on both sides of paper, turning off computers and lights during nonworking hours, and conducting water audits can add up to huge savings for your company. 5. It’ll keep you ahead of the regs. If you play in the global market you’ll have to follow several European directives like Waste Electrical and Electronic Equipment, Restriction of Hazardous Substances, and Registration, Evaluation, and Authorization of Chemicals. Best Practice: Energy-Saving Opportunities You’ll be amazed at how easily you can cut your energy bill and protect the envi- ronment for little or even no cost. Evaluate the best opportunities that will be most effective for your company: 1. Track your energy bills:You need to know how much you pay for electricity, natural gas, and fuel oil at your facility. Tip: Understand seasonal charges in your utility bill that can affect your energy-saving actions for heating and cooling. 2. Pinpoint equipment using the most energy: A small portion of the equipment usually accounts for the greatest amount of energy consumption. Tip: Look for large pieces of equipment and equipment that runs most of the time or that has periodic, but substantial, start-up energy requirements. 3. Identify no- or low-cost projects. 4. Get management support:Your goal is to show the value of energy-saving measures and the potential cost and productivity advantages of a more-aggres- sive energy-efficiency program. 5. Create an energy team at your plant: The team will track and report energy uses, identify energy-saving opportunities, develop an energy plan, and imple- ment cost-saving measures. 6. Develop an ongoing strategy to sustain plantwide efforts and to improve and maintain energy-efficient systems. 7. Shut off any lights you are not using. 8. Use compact fluorescent lightbulbs. They use less than 25 percent of the elec- tricity of standard bulbs and last 10 times longer.18 Top 10 Best Practices in HR Management for 2012
Circulating Materials. To reduce the number of copies of an item, you may be able to circulate one copy among several people. Additionally, you may want to implement an e-mail, voicemail, or networking system to permit the routing of information without producing a hard copy. Confidentiality. If you have confidential documents, care should be taken to remind employees to discard those items properly. For example, you may require the items to be shredded before recycling. Recyclable Items. Your policy should identify what items are to be recycled. Will you recycle paper only? Newspapers? Aluminum cans? Plastics? Use of Recycled Material. Your policy can encourage use of items made from recycled materials.Your policy can also encourage the reuse of items before they are discarded. For example, copy paper printed on one side only can be recycled internally to make use of the blank back side (or even be made into scratch pads). Items Not to Be Recycled. Your policy should expressly describe any items that should not be placed in a container for recyclables. Otherwise, a few items that are not to be recycled can ruin the contents of an entire container. Cleaning. If plastic containers or aluminum cans are to be rinsed out before placement in a recycling bin, you should advise employees of this in your policy. Toxic Materials. Expressly identify any toxic materials that are not to be placed in the recycling bins. For example, if you recycle a variety of cans, but not paint cans or oil cans, your policy should expressly inform employees of these restric- tions. Similarly, if you recycle plastics, but not plastic containers for motor oil, your policy should so state. OSHA. There may be Occupational Safety and Health Administration (OSHA) reg- ulations regarding the disposal of certain workplace items, for example, needles in healthcare facilities. OSHA may also regulate storage of items in the workplace. Often, material safety data sheets will provide the needed information. Environmental Laws. Various federal and environmental laws regulate the dis- posal and recycling of materials, e.g., paint products, oil cans, tires, car batteries, or glass bottles. Recycling Laws. State or local laws may require certain businesses to recycle spe- cific items. Office buildings may be required to recycle soda cans. Further, several states and the District of Columbia have passed legislation requiring that newspa- pers sold in these areas contain prescribed amounts of newsprint produced from postconsumer newspapers. Color-Coding Containers. To make it easier for employees to readily identify which container to use for which items, you should consider color-coding the bins. Location of Bins. Location sites should be convenient for employees to recycle. At the same time, you should not have so many sites that it creates a burden to gather all the items. Signage. Not only should your signs identify what a particular recycling bin is to contain but it should also identify items not to be placed in the container. For example, your recycling bin for plastics ought to identify any item, such as plastic containers for motor oil, which are not to be placed in that recycling bin.20 Top 10 Best Practices in HR Management for 2012
N Intellectual—Mental health through developing creativity, learning ability, and problem-solving skills N Occupational—Job satisfaction through learning individual aptitudes and skills and finding meaning in work N Social—Community connections through learning the part we play in our interconnected world N Spiritual—Larger life questions through learning to choose and live by a set of values that give meaning to our lives Legal Issues Related to Workplace Wellness Programs Employers have a great deal of flexibility in designing wellness programs. However, it is a good idea to review any program with an attorney, and employers should work closely with insurance providers if the wellness program will offer financial incentives or benefits through group health plans. There are a number of laws to be aware of when developing and implementing these programs. Americans with Disabilities Act (ADA) The ADA requires employers to offer a reasonable accommodation to an employee with a known disability, and it prohibits employers from making medical inquiries or requiring medical examinations (unless job-related and consistent with business necessity). It is also unlawful under the ADA to take any adverse employment action based on an individual’s actual or perceived disability. The Equal Employment Opportunity Commission (EEOC) has offered employers some guidance on the ADA’s restrictions on medical inquiries and examinations. Under the guidelines, an employer may conduct medical examinations and activi- ties that are part of a voluntary wellness and health screening program. Therefore, offering employees the opportunity to voluntarily participate in health screening programs for high blood pressure and cholesterol monitoring is not likely to vio- late the ADA as long as there is no penalty (economic or otherwise) for not partici- pating. Employers must treat any information acquired as a confidential medical record. Health Insurance Portability and Accountability Act (HIPAA) DOL’s Employee Benefits Security Administration (EBSA), HHS, and the IRS pub- lished rules in 2006 that provide guidance in complying with the nondiscrimina- tion provisions of HIPAA. The rules also provide guidance on the implementation of wellness programs. HIPAA nondiscrimination provisions generally prohibit group health plans from charging similarly situated individuals different premiums or contributions or imposing different deductible, copayment, or other cost-sharing requirements based on a health factor. Health factors include health status, medical condition (including both physical and mental illnesses), claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising out of acts of domestic violence), and disability.22 Top 10 Best Practices in HR Management for 2012
Internal Revenue Code Depending on the incentives and benefits included in an employer’s wellness pro- gram, there may be tax consequences for the employer and the employee. For example, some employee incentives may constitute taxable income for employees. Generally, the value of an incentive is includible in the employee’s gross income (e.g., gift cards, memberships to off-site exercise facilities). However, there are some exceptions, including: N Free or subsidized access to a gym or athletic center that is operated by the employer and located on the employer’s premises, N Discount on employee contribution required to participate in employer- sponsored health plan, and N Contributions to an employee’s flexible spending account. In addition, a discount to an employee’s healthcare insurance offered as an incen- tive to employees who participate in a wellness program would probably not be considered taxable income for employees. Employers are well advised to obtain guidance from a tax professional as tax laws are complex and regulations can change frequently. State Laws that Protect Off-Duty Conduct Several states have laws protecting the off-duty conduct of employees. Some states, including Connecticut, Indiana, Kentucky, Louisiana, Maine, New Mexico, Nevada, New York, North Dakota, Oklahoma, Rhode Island, and the District of Columbia, have “Smokers’ Rights” laws that protect individuals from discrimination on the basis of the lawful use of tobacco products outside of the workplace. Other states, such as California, have broader coverage that includes any lawful activity occur- ring away from the employer’s premises during nonworking hours. When designing a wellness program, employers should review state laws prohibiting employment discrimination to be sure the program complies with state requirements. Once a program is in place, employers should take steps to ensure that employment decisions are not based on conduct that is protected by law. It is necessary to keep in mind that Employee Retirement Income Security Act (ERISA) may preempt state law when a wellness program is part of an employee benefit plan. However, ERISA will neither preempt state laws that have only a “tenuous, remote or peripheral connection” to employee benefit plans, nor will it preempt state insurance laws. If a wellness program is challenged based on a state law that pro- tects off-duty conduct, ERISA’s preemption clause may come into play—but it would depend on whether the program is part of an employee benefit plan within the meaning of ERISA’s preemption clause. A federal court decision demonstrates the difficulties that arise when a mandatory wellness program conflicts with an employee’s off-duty conduct (Rodrigues v. The Scotts Company LLC, No. 07-10104 (D. Mass. 2008)). In this case, the employer instituted a mandatory wellness program that included a tobacco-free policy prohibiting “smoking of tobacco products by its employees at any time and at any place, whether or not in the workplace or during work hours.” The applicable state law does not have a provision prohibiting discrimination against employees who use tobacco products. The employer used random testing24 Top 10 Best Practices in HR Management for 2012
Best Practice: 13 Inexpensive Tips for Encouraging Wellness Program Participation Beyond the actual physical activities, most wellness programs need a little incen- tive to encourage participation and especially to keep people participating after the initial excitement has worn off. Here are some tips from the New York State Physical Activity Coalition: 1. Provide incentives like T-shirts, caps, aprons, or paid time off. 2. Hold contests or other fun worksite competitions: N “Wellness Project of the Month” N “Set Your Goal” competition N Employee/management and interdepartmental challenges N Health trivia game on computer with prizes to the winners 3. Announce and publicize a monthly health theme. 4. Conduct recognition activities for employees making efforts at healthier lifestyles: N Bulletin board announcements. N Personally signed letters from the CEO congratulating employees on their healthy behaviors. N Publicity for success stories or the healthy employee of the month. N Recognition for the coordinators of wellness activities. 5. Provide bulletin boards for health information exchange and for people to write milestones they have achieved in health (e.g., New Year’s resolution, miles walked, pounds lost). 6. Provide child care so that parents can participate in wellness activities. 7. Have the company health practitioner set a time (weekly, monthly) to check blood pressure, body fat, and weight. 8. Provide one-on-one counseling for high-risk employees and people with dis- abilities by establishing wellness mentoring programs. (Note: Take care with this one so you don’t run afoul of discrimination laws.) 9. Develop a team for brainstorming ideas and to help with wellness activities. 10. Conduct a survey to assess what topics employees want to pursue. 11. At all meetings: N Start with a stretch, and take a relaxation break in the middle. N Conduct a wellness activity. N Recognize an employee birthday or other special event. 12. Rotate departmental responsibility for wellness activities. 13. Utilize college interns to assist with developing and running wellness projects and events.26 Top 10 Best Practices in HR Management for 2012
their workers. The program is designed to increase tax compliance and reduce the burden for employers by providing greater certainty for employers, workers, and the government. Under the program, eligible employers can obtain relief from federal payroll taxes they may have owed in the past if they prospectively treat workers as employees. The VCSP is available to eligible businesses, tax-exempt organizations, and government entities that have erroneously treated their workers or a class or group of workers as nonemployees or independent contractors, and now want to correctly treat these workers as employees. To be eligible, an applicant must: N Consistently have treated the workers as nonemployees in the past, N Have filed all required Forms 1099 for the workers for the previous 3 years; and N Not currently be under audit by the IRS, DOL, or a state agency concerning the classification of these workers. Interested employers can apply for the program by filing an application for the VCSP Form 8952, at least 60 days before they want to begin treating the workers as , employees. Employers accepted into the program pay an amount effectively equaling just over 1 percent of the wages paid to the reclassified workers for the past year. No interest or penalties will be due, and the employers will not be audited on payroll taxes related to these workers for prior years. Participating employers will, for the first 3 years under the program, be subject to a special 6-year statute of limitations, rather than the usual 3 years that generally apply to payroll taxes. Wage and Hour Investigations WHD is responsible for administering and enforcing a number of federal laws that set basic labor standards. If the employer is subject to these laws, the investigator will verify that workers are paid and employed properly according to the laws administered and that youths under the age of 18 are employed as provided by the child labor provisions. WHD does not require an investigator to previously announce the scheduling of an investigation, although in many instances, the investigator will advise an employer before opening the investigation. The investigator has sufficient latitude to initiate unannounced investigations in many cases in order to directly observe normal business operations and quickly develop factual information. An investiga- tor may also visit an employer to provide information about the application of, and compliance with, the labor laws administered by WHD. WHD does not typically disclose the reason for an investigation. Many are initiated by complaints. All complaints are confidential, so the name of the worker, the nature of the complaint, and whether a complaint exists may not be disclosed. In addition to complaints, WHD selects certain types of businesses or industries for investigation. WHD often targets low-wage industries because of high rates of violations or egre- gious violations, the employment of vulnerable workers, or rapid changes, such as growth or decline, in an industry. Occasionally, a number of businesses in a specific geographic area are examined. The objective of targeted investigations is to28 Top 10 Best Practices in HR Management for 2012