The latest healthcare reform bill just passed the House. But making it through the Senate will be even harder as a few rough edges still need some smoothing.

Three things both the House and Senate do agree on:

• Requiring most people to carry health insurance or pay a penalty
• Providing “affordability credits” to lower-income individuals, and
• Expanding Medicaid by reducing thresholds for eligibility.

But that’s pretty much where the similarities end. There’s still a lot to be resolved in both bills.

Three must-watch points of contention:

Public option

The House bill includes the creation of a government-run insurance plan, which is meant to spark competition with private insurers.

The Senate is working to combine two different proposals — one from the Senate Finance Committee and one from the Health Education, Labor and Pension Committee — into a single bill.

And while the exact provisions of the merged bill are being kept under wraps, it is also expected to include a public option — but it could allow individual states to opt out.

Cost

$1.1 trillion – that’s what the House version is expected to cost over 10 years. The Senate version is expected to be less expensive.

President Obama has already said he’d like reform to cost no more than $900 billion, which could improve the Senate bill’s chances.

Funding

The House wants to impose a 5.4% income surcharge on individuals with an adjusted gross income of more than $500,000 a year and on couples with more than $1 million.

The Senate Finance Committee has proposed charging an excise tax on high-end health plans – “Cadillac Plans” – and charge new annual fees to various industry sectors.

The fees would look something like this:

• $6.7 billion from insurance companies
• $4 billion from manufacturers of medical devices, and
• $2.3 billion from drug makers.

Info: Click here to view a side-by-side comparison of the House and Senate proposals.

Your company policies directly impact employees’ risk of heart disease, how much they sleep and their families’ well-being, eight separate studies have found.

Implementing flexible policies can add years to your employees’ lives, according to a three-year nationwide study released by the Work, Family and Health Network.

The following findings for the study were compiled by eight federally-funded research teams:

• Workers are twice as likely to develop cardiovascular disease if there is little willingness in the workplace to accommodate employees’ family needs — like caring for a sick child or attending one of their kids’ sporting events.
• People who work for companies that are flexible about where and when work is done get an average of 30 minutes more sleep per night.
• Employees who experienced tension in the office say they feel out of touch with their child’s activities.

Communicate flexibility

While many companies have added flex-time or telecommuting policies, close to 40% of employees believe they’d be less likely to advance at their company if they asked for flex schedules, found the study.

That means companies that want their employees to take advantage of flex policies need to assure workers these activities won’t put their job security or career goals at risk.

It pays to communicate that message, according to the study. Companies with a more flexible culture benefited from:

• less unnecessary work being done
• increased employee support for the organization, and
• a 45% reduction in employee turnover.

No one’s going to throw a bunch of money at wellness these days. But there are benefits to be gained without spending a small fortune.

Try something new

There is no shortage of ways to steer employees toward healthier choices on the cheap.

Examples:

• Some companies are starting walking challenges where employees track how many steps they take each day toward a certain goal or prize
• Others are selling inexpensive fruit in the breakroom, and
• Some have started company softball or tennis teams to get folks moving.

Push something old

You don’t even necessarily have to launch a new series of efforts to get employees to live healthier.

One idea that’s worth a try: calling new attention to under-used benefits your company already has.

Examples:

• Does your insurance company offer a 24-hour nurse line? Remind workers.
• Will it reimburse gym memberships or Weight Watchers? Play it up.

What are some inexpensive ways your company has improved employee health? Let us know in the Comments Box below.

Three advantages to spending more on health care: Reduced turnover, improved productivity and higher sales. Check out the healthcare strategy this business used to benefit from them all.

For years, Burgerville, a restaurant chain based in Vancouver, WA, offered limited health coverage to hourly employees.

Result: Just 3% of hourly workers were enrolled.

But when an employee survey showed health costs were employees’ No. 1 concern, the company decided to switch up its coverage and pay 90% of healthcare premiums for hourly employees who worked at least 20 hours per week.

Under this new plan, individual hourly workers can enroll in a health-maintenance organization for $15 per month with no deductible. A worker and spouse pay $30 per month, and family plans cost $90.

Result: Burgerville’s healthcare bill skyrocketed from $2.1 million per year to $4.1 million. But its turnover rate dropped to 52% from 128% in one year. And having to replace and train fewer workers led to huge cost savings. Now, 98% of the company’s eligible hourly employees are enrolled in the health plan.

Because employees must work 20 hours to qualify for the plan, they now work harder to qualify for more hours, which are assigned based on performance, Burgerville’s Chief Executive Jeff Harvey told the Wall Street Journal.

Result: Sales rose 11% in one year.

Heads up: You may soon be required to provide employees with more info about the administrative and management fees that cut into their retirement savings.

The House Education and Labor Committee has approved the 401(k) Fair Disclosure and Pension Security Act.

It would require all employers to fully disclose all retirement plan fees to their workers.

The bill could pass the House very shortly. If it does, employers would have to provide info on four categories of fees:

• administrative
• investment management
• transaction, and
• any other expenses.

The true effect of fees

Currently, the industry median for total 401(k) fees is about 1.5%, according to the Investment Company Institute.

How big an impact would those kinds of fees have on an individual’s savings?

An account with a 1.5% fee with a balance of $20,000, earning 7% a year, would be worth $58,000 after 20 years.

The balance of the same account would be worth $70,000 — or 17% more — if its fees were only .5%.

Other requirements

As it stands now, the legislation requires:

• 401(k) plans to disclose, in a quarterly statement, fees taken from a participant’s account
• plan administrators to offer participants at least one low-cost index fund in order to receive protection against liability for participants’ investment losses, and
• workers to get investment advice based on their needs — not the financial interest of those providing the advice.

Good news: The feds are eliminating paperwork associated with one common fringe benefit — company-provided cell phones.

The Internal Revenue Service (IRS) ruffled employers’ feathers this summer when it decided to unearth a seldom-used, 20-year-old law requiring companies to tax employee’s cell phones.

Many employers paid little attention to the old rules — which said personal calls on employer-provided cell phones were taxable — until the IRS announced it would simplify the rules for how these phones would be taxed.

No matter what the new rules would be, Benefits pros were almost certainly looking at added paperwork.

Imagine constantly having to determine which calls employees make — say to a friend in the office, for example — are personal (and taxable) and which aren’t.

It’d be a huge headache.

Well now employers don’t have to worry about it.

After reviewing the proposed new rules, the IRS backed off its stance and has decided to halt taxation on personal calls altogether.

IRS Commissioner Doug Shulman recently issued this statement: “Although some of the proposed changes would add clarity, the current law will inevitably leave widespread confusion among employees and businesses. Therefore, Secretary Geithner and I ask that Congress act to make clear that there will be no tax consequence to employers or employees for personal use of work-related devices such as cell phones provided by employers. The passage of time, advances in technology, and the nature of communication in the modern workplace have rendered this law obsolete.”

While Congress stumbles over healthcare reform, employers continue to be buried in double-digit cost increases. And in 2010, those increases aren’t expected to slow down.

Big increases are once again in store for employers next year, according to the latest estimates from Buck Consultants.

Figures to help you budget for next year

The forecasts on rate hikes for 2010, based on type of plan:

• Preferred Provider Organization (PPO): an 11% increase (down slightly from 11.1% a year ago).
• Point-of-Service (POS): a 10.2% hike (10.8% last year).
• High Maintenance Organization (HMO): an 11% jump (11.1% last year).
• High Deductible Consumer-Driven: a 10.4% increase (10.7% a year ago).

Prescription drugs

Don’t expect relief to come from prescription drugs, either.

When it comes to prescribed meds, patients will pay an additional 10.8% in 2010. That’s on top of this year’s 11.4% increase.

Those trying to boost their retirement savings can’t seem to catch a break. First the market freefalls, and now Uncle Sam may put the squeeze on how much you’re allowed to contribute. 

Lower 2009 inflation is likely to require employers to make changes in next year’s 401(k) plans, according to a report released by Mercer.

On Oct. 15 the Internal Revenue Service (IRS) is expected to announce changes required to 2010 retirement plan contributions.

Changes may include:

• A $500 cut in the maximum amount employees can contribute, and
• A $5,000 slice off the maximum income eligible for an employer contribution.

The limits for defined-contribution and defined-benefit plans — including the amount employees can sock away in 401(k)s — are adjusted each year using a formula based on inflation. And as a result of negative inflation this year, 401(k) contribution limits for 2010 may not get a cost-of-living increase.

Although it’s not entirely clear whether the IRS would actually go through with lowering contribution limits based on the formula, should it do so, this would be the first time limits have been adjusted downward.

Currently, employees can contribute up to $16,500 in their 401(k)s on a pre-tax basis or $22,000 if they’re 50 or older. But that amount could be reduced by $500, down to $16,000.

What employers will have to do

If lower contribution limits are set, plan sponsors will need to alter forms and warn workers to cut back if they will max out.

Workers will also have to be notified if lower limits affect benefit accruals in pension plans.

2 ways to ease the pain

Should lower limits get established, some employees are bound to be upset.

Two ways to ease the blow:

• Check whether your 401(k) plan allows after-tax contributions, or
• Encourage employees to set money aside in an IRA, or some other tax-efficient investment.

Talk about adding insult to injury: Retirement plans took a beating last year, and now plan providers are increasing management fees.

As a result, more employers — especially small ones — are considering dropping retirement benefits altogether.

But a drastic move like that is almost sure to hurt morale and might even cause some employees to jump ship.

How to combat cost increases

To retain retirement plans and continue to allow employees to benefit from a continuing economic upswing, here are four ways to stave off rising plan costs:

1. Revisit and compare. Determine exactly how much your company is paying (in administrative and management fees, etc.), as well as how the plan has performed, and then do a comparison of the competition.

While most plans struggled last year, some providers had better results than others. A benefits consultant or outside advisor can be extremely helpful in helping you pick the best plan for your company.

2. Renegotiate. The market has affected everyone, and the last thing plan providers want is to lose valuable customers.

As a result, many providers may be open to renegotiating rates.

Tip: To get a better deal, consider introducing bids from other providers in your renegotiation process.

3. Look to small business-friendly providers. Certain plan providers base fees on factors like the different services they offer and the number of plan participants a company has — no matter what the assets in the plan are.

Small companies, especially those with lots of assets, can benefit from this type of fee structure.

4. Bundle services. If your current plan provider is planning a major price hike, then you may have luck brokering a deal with one of your other service providers.

Example: When a NY-based company was hit with a $3,000 fee to reinstate its 401(k), it changed plan providers. The company went with its payroll provider, nabbing a discount that saved it around $500 a year.

More evidence that it pays to emphasize weight loss in your wellness programs:

In two separate cases, courts ruled that workers’ comp must cover weight-loss surgery.

Surgery to ease back pain

The first case involved Adam Childers. While working at Boston’s Gourmet Pizza in Indiana, Childers was struck by a freezer door, injuring his lower back. At the time, Childers weighed 340 pounds.

Doctors said Childers needed surgery to ease his back pain, but that the operation would do him no good unless he first had surgery to reduce his weight, which had ballooned to 380 pounds after the accident.

Childers’ employer agreed to pay for the back surgery, and later a workers’ comp panel said it’d also have to pay $20,000 to $25,000 for his weight-loss surgery (plus disability payments while he was unable to work). His employer appealed, arguing that Childers suffered from a pre-existing health condition — morbid obesity.

However, the court said the restaurant couldn’t prove that Childers’ weight had been a medical problem before the accident. Case closed, he gets the surgery paid for by comp.

Surgery to help arthritic knee

In the second case, Edward Sprague injured his knee in 1976 while working as a mechanic. He then reinjured it in 1999 while working at United States Bakery in Oregon.

During those 23 years, Sprague’s weight climbed from 225 to 350 pounds.

Doctors told Sprague his weight would prevent successful treatment of his arthritic knee condition, so he sought workers’ comp benefits for weight-loss surgery.

A state court ruled Sprague’s bypass surgery should be covered by workers’ comp because the operation was necessary to treat an on-the-job injury.

What can you do?

Most people gain weight as they age — and studies show that heavier employees are at much greater risk for on-the-job injuries.

That’s why companies of all stripes have found wellness programs to more than pay for themselves by preventing injuries and other medical claims.

Group weight-loss initiatives help by making the process fun and competitive. So does replacing high-calorie snacks in vending machines with healthier — but popular — choices.