Cornerstone Insurance Group

A Valuable Tax Credit for Small Businesses

Cornerstone — Tue, 13 Dec 2011 17:07:11 +0000

As the year draws to a close our minds go forward to limiting our tax exposures. This tax credit for healthcare costs is a great way for small businesses to do just that. Click on the link to read more about this valuable credit for small businesses.

http://www.uhc.com/united_for_reform_resource_center/health_reform_provisions/small_business_tax_credit.htm

Conquering the Challenges of a Wellness Program

Cornerstone — Wed, 19 Oct 2011 16:35:57 +0000

Today’s business environment is challenging and employers need all the help they can get to remain competitive and profitable. Employers are looking for ways to cut costs, and health care costs are often an area to find savings for most businesses. Wellness research is still in the infancy stages, but the growing body of evidence seems to indicate the savings from a wellness program come not only from containing direct medical costs, but an increase in productivity, reduced absenteeism, lower turnover and recruiting cost and improved employee morale. When implementing a health and wellness program many employers face some challenges that are fairly easy to overcome.

Challenge: Employee Engagement
• Getting employees engaged in health and wellness programs can be a challenge. The one-size-fits all philosophy does not work with wellness because health is individualized. Some people may want to meet regularly to lose weight, whereas others may need stress management services, smoking cessation programs. We see programs fail when they are not aligned with what the employee’s want.
Challenge: Wellness is Expensive
• Employers are often fearful of the costs associated with implementing a wellness program because they don’t see how it will help them control direct medical costs. There are many low cost ways to implement a wellness program by leveraging carrier resources or other low cost resources within the community. The end the question should be how much will it cost by NOT investing in a wellness program?
Challenge: High Employee Turnover Rate
• Employee turnover is expensive! 40% of US workers change jobs every five years. By implementing a wellness program you can reduce turnover through employee loyalty. Company sponsored workplace wellness programs send a clear message to employees that management values their well-being.
Challenge: Wellness Takes Time• To encourage employees to participate wellness needs to be made convenient to them; this often means allowing time during the work day. While this may initially impact short-term productivity in the long run healthier and happier employees will be less likely to miss work and more productive when they are at work. Research by Goetzel et al suggests presenteeism costs are higher than medical costs in most cases by 18-60% depending on the medical condition.

Businesses who implement wellness as a core value will reap the distinct competitive advantage of having a healthy, high-performance workforce.

Anderson, D. Give Your Benefits a Boost With Wellness. CDHC Solutions. 2009 May.
Goetzel, R. et al. Health, Absence, Disability, and Presenteeism Cost Estimates of Certain Physical and Mental Health Conditions Affecting U.S. Employers. J Occup Environ Med. 2004:46:398-412
Nicholson, S. et al. How to Present the Business Case for Healthcare Quality to Employers. 2005 November
Taggart, N. A New Competitive Advanctage. Benefits & Compensation Digest. 2009 June.

Updated NLRB Requirement

Cornerstone — Fri, 07 Oct 2011 20:02:26 +0000

The NLRB issued a notice October 5, 2011 advising that they are delaying the requirements of most employers to display an 11 x 17 poster informing employees of their right to form a union. The original deadline for employers was November 14th, and the new deadline is January 31, 2012. As the reason for the delay, the NLRB cited confusion from companies who were unsure if they were subject to NLRB jurisdiction, explaining that a number of primarily small to medium sized companies were unaware if they were covered under the ruling. As a result, the NLRB has indicated they plan to have additional outreach and educational programs to help companies better understand the NLRB, their role and the poster.

As previously mentioned, there is still litigation pending which is seeking to block this ruling overall. Should additional changes or updates occur between now and January 31st, we will update you accordingly.

Wellness and Employee Retention

Cornerstone — Wed, 05 Oct 2011 19:15:16 +0000

Increasing evidence supports the need for employee wellness programs – lower health care costs, increased productivity, and reduced absenteeism. But what about employee retention rates? Retention rates vary greatly from company to company. The companies with the highest retention rates have one common denominator – happy employees!

The extent to which an employee is happy and comfortable with his or her job is the single best determining factor in high retention rates. Employee turnover is expensive and employers are always looking for ways to keep employees at their organization for longer periods of time, but many overlook the impact of a wellness program on happy and healthy employees.

With rising health care costs, concerns about employee health are already high among employers. Research shows that over 70% of health care spending is attributable to modifiable lifestyle behaviors. In any given workforce, these problems are increasingly found on a larger scale. If there is any illness or problem affecting an individual at work, the quality of work will be adversely affected. Thus, the employee’s health is an important factor in determining retention rates.

Proof is in the numbers a recent survey conducted by Principal Financial found that 45% of Americans working in small to medium size companies (10 – 1,000 lives) would stay at their jobs longer because of employer-sponsored wellness programs. Wellness programs are generally designed to do two things: create an awareness of health by identifying health risks and offer a solution. The solution may include education on nutrition, stress management programs, smoking cessation programs…the list is endless. Once we encourage employees to take control of their health, the company will begin to see changes within the organization.

How does something as simple as nutrition education help a company benefit in regards to employee retention? Company sponsored wellness programs send a message to the employees that management values their well-being. Employees will feel taken-care-of when such programs are implemented and this will increase the employee’s commitment towards their work through increases in productivity and efficiency.

Wellness programs are a win-win situation. Employers win by retaining top talent, reducing absenteeism, increasing productivity, reducing health care costs and most importantly employees are healthy and happy! No company will be successful in the global marketplace without healthy and productive people.

New NLRB Requirement

Cornerstone — Thu, 22 Sep 2011 19:25:18 +0000

A new NLRB requirement….. By now, many of you may have heard about a recent ruling from the NLRB (National Labor Relations Board) requiring most private-sector employers to notify employees of their rights under the National Labor Relations Act. Many employers are calling this the “How To Form a Union” poster, as both union AND non-union employers are required to post the document. Currently there is pending litigation attempting to stop this rule from going into effect; however unless the courts rule to the contrary, employers should have the required notice ready for posting in appropriate sites on November 14, 2011 – when the final rule takes effect.

Employers will be required to post the NLRB poster in the same place that other required workplace posters are, or electronically post, if that is how the company notifies their employees of information. This does not mean an email distribution, but rather an online data warehouse where policies or workplace documents are stored.

The required workplace poster is now available for free download from the NLRB website.

Where Are We With Healthcare Reform?

Cornerstone — Tue, 30 Aug 2011 14:49:43 +0000

A number of legal challenges have been filed in various federal courts since the health care reform law was passed in March 2010. While some of the challenges have been decided based on procedural grounds, the main substantive controversy has been whether Congress had the constitutional authority to pass the individual mandate under health care reform. Beginning in 2014, the individual mandate generally requires individuals to purchase health insurance or pay a penalty. The individual mandate is a key component of the health care reform law. Health care policy experts have suggested that, without the individual mandate, health care reform’s other insurance market reforms would be difficult to implement.
COURT RULINGS
So far, there have been at least 30 lawsuits filed by state governments, private citizens and others seeking to overturn the health care reform law. The court rulings, to date, are split. Some courts have upheld the law as constitutional, while others have concluded that a portion of the law, or the entire law, is unconstitutional. For example, one federal district court in Virginia ruled that the individual mandate portion of the law is unconstitutional. Other federal district courts, including one in Michigan and another Virginia court, found that the law is constitutional.
In January 2011, a federal district court in Florida ruled that Congress does not have the authority to require individuals to buy insurance. The Florida district court went further than others that have reviewed the law, holding that the individual mandate cannot be separated from the rest of the law, so the entire statute is invalid. The Florida court issued a stay of its decision while the case proceeds through the appeals process.
The 4th, 6th and 11th U.S. Circuit Courts of Appeal have heard appeals of health care reform challenges, and challenges are currently pending before other U.S. Courts of Appeals. In June 2011, the 6th Circuit Court of Appeals upheld the constitutionality of the individual mandate. The 4th Circuit Court of Appeals is expected to issue its decision soon. The 11th Circuit appeal has received the most attention because it involves the controversial Florida decision invalidating the entire law and includes Republican attorneys general and governors from 26 states.
On Aug. 12, 2011, the 11th Circuit Court of Appeals ruled that the health care reform law’s individual mandate is unconstitutional, upholding the Florida district court decision. However, the Court of Appeals overturned Florida’s decision to invalidate the entire law, preferring to strike only the individual mandate. The Court of Appeals stated that Congress violated the U.S. Constitution by passing legislation that would force all Americans to buy a product or pay a penalty. The opinion said Congress has broad power to deal with the problems of the uninsured, “but what Congress cannot do…is mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.”
WHAT’S NEXT?
Now that two federal appeals courts have reached differing conclusions on the constitutionality of the health care reform law, the issue may proceed to the U.S. Supreme Court. The Justice Department will have 90 days to appeal to the Supreme Court or ask the entire 11th Circuit to review the ruling. The decision of the 6th Circuit Court of Appeals, which upheld the individual mandate as constitutional, has already been appealed to the Supreme Court. It is likely that the constitutionality of the health care reform law will ultimately be settled by the Supreme Court.

The Cornerstone Insurance Group will continue to monitor the status of the health care reform law and its impact on you and your employees.

What is The Patient Protection and Affordable Care Act?

admin — Mon, 08 Aug 2011 13:06:21 +0000

The Patient Protection and Affordable Care Act (PPACA) is a federal statute that was signed into law by President Barack Obama on March 23, 2010. This act along with the Health Care and Education Reconciliation Act of 2010 (signed into law on March 30, 2010) make up the health care reform of 2010. Together the laws focus on reform of the private health insurance market, providing better coverage for those with pre-existing conditions, making healthcare more affordable for those that financially qualify, improving prescription drug coverage in Medicare and extending the life of the Medicare by approximately 12 years.

What is included in the law?

The law includes numerous health-related provisions that take effect over the next several years, beginning last year in 2010. Some of the major provisions include:

Guaranteed issue and community rating will be implemented nationally so that insurers must offer the same premium to all applicants of the same age, sex, and geographical location regardless of pre-existing conditions.
Health insurance exchanges will form in each state, offering a marketplace where individuals and small businesses can compare policies and premiums, and buy insurance.
Firms employing 50 or more people but not offering health insurance will pay a “shared responsibility payment” if the government has had to subsidize an employee’s health care.
Non exempt persons not securing minimum essential health insurance coverage are also fined under the shared responsibility rules. This requirement to maintain insurance or pay a fine is often referred to as the individual mandate, though being insured is not actually mandated by law.
Improved benefits for Medicare prescription drug coverage are to be implemented.
Medicaid eligibility is expanded to include all individuals and families with incomes up to 133% of the poverty level.
Low income persons and families above the Medicaid level and up to 400% of the poverty level will receive subsidies on a sliding scale if they choose to purchase insurance via an exchange.
Very small businesses will be able to get subsidies if they purchase insurance through an exchange.
Establishment of a national voluntary insurance program for purchasing community living assistance services and support.
The law will introduce minimum standards for health insurance policies and remove all annual and lifetime coverage caps.
Policies issued before the law came into effect are “grandfathered” and are mostly not affected by the new rules.
How will it be funded?

The Act’s provisions are designed to be funded by a variety of taxes and offsets. Major sources of new revenue include Medicare tax on incomes for individuals earning over $200,000 and joint filers over $250,000, an annual fee on insurance providers, and a 40% tax on “Cadillac” insurance policies. There are also taxes on pharmaceutical companies, high-cost diagnostic equipment makers, and a federal sales tax on indoor tanning services.

How are legal challenges impacting the law?

Organizations and lawmakers who opposed the passage of the bill have taken legal action against it and several court challenges are currently at various stages. The targets of the threatened lawsuits are several key provisions of the bill, but most focus on the “individual mandate”. A total of 28 states have filed joint or individual lawsuits (including 26 states engaged in a joint action) to overturn the individual mandate portions of the law, arguing that fining individuals for failing to buy insurance is not within the scope of Congress’s taxing powers. Members of several state legislatures are attempting to counteract and prevent elements of the bill within their states, and legislators in 29 states have introduced measures to amend their constitutions to nullify portions of the health care reform law. It is likely that the constitutionality of the bill will be challenged before the Supreme Court sometime within the next year or so.

Top Risks for the Year

admin — Fri, 05 Aug 2011 13:13:39 +0000

With improving unemployment statistics and a widespread belief that the U.S. GDP will grow 2 percent in 2011, economic recovery seems to be fully underway. Nonetheless, a recent risk management survey at RIMS in Vancouver revealed that economic slowdown remains the top risk executives see for their organizations.

Besides the economy, other risks remain top of mind. In recent years, technology risk has been consistently present, while other risks, such as reputation risk, have appeared with increasing frequency. The top ten risks identified were:

Economic slowdown
Regulatory/legislative changes
Increasing competition
Damage to reputation
Business interruption
Failure to innovate/meet customer needs
Failure to attract top talent
Commodity price risk
Technology failure/system failure
Cash flow/liquidity risk

One of the most critical components of any business is its employees. It is imperative to maximize the performance of your employees in order to maximize your profitability.

In a recent survey by Buck Consultants, 82 percent of participants reported that their company’s health care costs are significantly or moderately impacted by employee stress. What’s more, 79 percent and 77 percent have experienced a significant or moderate impact on absenteeism and workplace safety, respectively. Working while stressed can increase the likelihood of an accident, so taking steps to combat employee stress can make the workplace safer for all employees – and protect expenses through loss prevention.

Investing in strategies to reduce employee stress in the workplace – like employee assistance programs or continual safety training – can have high ROI for employers.

Please contact The Cornerstone Insurance Group for guidance on maximizing your return on investment.

Why Wellness?

admin — Mon, 01 Aug 2011 13:15:28 +0000

Wellness programs are getting a lot of attention these days and with good reason! The cost of healthcare has been on the rise for quite some time now and is a major challenge for many businesses today. Thanks to America’s addiction to fast food, smoking and television most businesses are taking a battering to their bottom line and corporate wellness is taking on a greater role.

With only 3% of American’s leading healthy lifestyles it’s apparent why health problems are costing the U.S. economy billions in lost workdays and rising medical costs.

Bottom line, unhealthy employees just cost more:

Approximately 70% of all diseases are preventable as they are associated with modifiable behaviors
The CDC reports medical expenses for those who are obese are 29-117% higher than those at a healthy weight.
The total excess cost to a company per smoker per year is $5,606, including $1,882 attributable to smoke breaks, $1,623 for excess medical expenditures, and $341 for missed work days due to sickness
The cost of cardiovascular diseases in the United States, including health care expenditures and lost productivity from deaths and disability, is estimated to be more than $503 billion in 2010.

This leaves employers with one question: What is the real return on investment – ROI on corporate wellness programs? Since their inception, corporate wellness programs have always been under the ROI microscope. I think this is because employers still don’t believe wellness programs are effective and worth the cost.

It is commonly reported in the marketplace that for each $1 invested by an employer in corporate wellness, a $3-$6 return (in the form of cost savings) is realized 2-3 years after implementation. ROI for corporate wellness is difficult to quantify exactly because the results of a wellness program offered by mega corporation is going to have very different results compared to the wellness program offered by a small local manufacturing company. Everything varies from number of employees, to employee demographics to availability of resources. There are also several different ways that employees cost money: direct health care costs, absenteeism, presenteeism, worker’s compensation, disability, employee turnover/recruitment. Every worksite is different, think about your employee population and healthcare costs. Ask yourself based on the above, where is your money going?

Need help forecasting the ROI for your organization? There are some forecasting tools on the market that allow employers to determine whether the investment in wellness makes sense for your company. To learn more go to wellsteps.com and click on the tools link at the bottom of the page. There you’ll find an ROI calculator.

As healthcare continues to rise, it’s time for employers to be proactive. It’s time for companies to play offense instead of defense. While exact ROI is not always verifiable, what is our alternative?

Aldana, S.G. “Financial Impact of Health Promotion Programs: A comprehensive Review of the Literature.” American Journal of Health Promotion, 2001: 15(5): 296-230
Blackburn, George. The ROI on Weight Loss at Work. Harvard Business Review. 2009 December.
Champan L. Meta-evaluation of worksite health promotion economic return studies. Art of Health Promotion Newsletter. 2003 Jan/Feb; 6(6): 1-10

Heart Disease and Stroke Prevention: Addressing the Nations Leading Killer. Center’s for Disease Control and Prevention. http://www.cdc.gov/dhdsp
Musich, S. Napier, D. Edington, D.W. “The association of Health Risks with Workers’ Compensation Costs.” Journal of Occupational and Environmental Medicine. 43(6): 534-541, June 2001
Shepherd, L.C. “States, businesses snuff out smoking.” Employee Benefit News. 2006, August: 20(10)