Companies have been hoping that their wellness program incentives will help their health plans meet affordability and minimal value requirements under Obamacare. So chances are they won’t like the guidance the IRS just issued.  

Recently, the IRS — one of the three agencies responsible for issuing compliance deadlines and guidance for the Affordable Care Act — released a flurry of Obamacare guidance.

A major chunk of that guidance was dedicated to clearing up some confusion surrounding wellness programs and their role in determining minimum value and affordable coverage.

As you know, Obamacare requires employers with 50 or more full-time equivalent employees (FTEs) to offer affordable coverage that meets the feds’ minimum value and affordability standards to all FTEs starting January 1, 2014 or pay a penalty.

Health care is deemed affordable if an employee’s contribution toward self-only coverage doesn’t exceed 9.5% of his or her household income.

The minimum — or “actuarial” — value is the percentage (on average) of the total cost of care a plan will cover.

For example: If a plan has an actuarial value of 60% (the minimum percentage of coverage a plan can cover to not be penalized under the law), an individual under that plan would be responsible for 40% of the cost of his or her care.

The minimum value “metal levels” under Obamacare are as follows:

• bronze plans will cover 60% of care costs
• silver plans will cover 70%
• gold plans will cover 80%, and
• platinum plans will cover 90%.

A one-year exception

The IRS’ new guidance says for a limited period of time — from May 3, 2013 through January 1, 2015 — employers can assume that all of their employees will earn any discounts and incentives offered through their wellness program when calculating their plan’s “value” and “affordability.”

Example: If a wellness plan offers employees who volunteer to take a health risk assessment $200 off of their premiums or deductible, the plan’s minimum value metal level and affordability can be calculated as if all employees will earn that $200 incentive.

This is the one exception the IRS added to the guidance.

Tobacco vs. non-tobacco incentives

After Jan. 1, 2015, wellness incentives will be divided into two main categories:

• incentives that aim to reduce or prevent tobacco usage, and
• those that don’t.

From then on, how a company’s health plan affordability and minimum value is determined will depend on what category its wellness incentives fall into.

When it comes to wellness program incentives specific to tobacco usage, health plans should assume all employees will earn the program’s incentives when it comes to determining the plan’s affordability and minimum value.

Example: If a company’s wellness program offers a premium discount to non-smokers, the company can use the discounted premium when calculating the affordability and minimum value of its health plan.

And if a plan penalizes smokers — with higher premiums or cost-sharing — the plan can calculate affordability and minimum value using the figures all non-smokers would pay.

On the other hand, when it comes to determining affordability and minimum value for health plans with all other wellness incentives not geared toward smoking prevention, plans should assume that all employees will fail to satisfy the wellness program’s requirements to earn incentives.

Therefore, all non-smoking-based incentives/penalties offered through an employer’s wellness plan won’t factor into the affordability and minimum-value calculations after Jan. 1, 2015.

Hopes crushed

Bottom line: Employers’ hopes about the majority of their wellness program incentives helping their health plans meet minimum-value and affordability requirements have effectively been crushed by the feds.

Many experts in the benefits community aren’t happy with the distinction the feds made between wellness programs and feel the moves adds more confusion to complying with Obamacare’s many regs.

As Paul Dennett, senior vice president, health policy, at the American Benefits Council, put it, “It’s not clear why the proposed rules would have one rule that applies to completing a wellness program that addresses tobacco use, and an entirely different rule for any other kind of wellness program. It seems as though the rules should be consistent and this will add one more wrinkle to what will already be a real challenge to communicate to employees.”

Another potential drawback: The move could also make smokers feel even more singled out.

This post originally ran on our sister website, HRBenefitsAlert.com.

Simple: Though rewarding, finding and using metrics can be challenging.

Here are six reasons HR pros give for not implementing metrics at their company – and why those reasons are bunk:

1. “We don’t have anyone analytical on our HR staff.” Yes, compiling metrics does involve its fair share of mathematics.
   If no one in HR is confident enough in their ability to handle the formulas involved, try partnering with someone in your company who is – an analyst, for example, or an accountant.
2. “We don’t know what to measure.” With so many options available, some HR pros may just throw up their hands rather than attempt to comb through the lengthy list of metrics options to find the ones that will work best.
   Solution: Start with your organizational strategy. What are two or three of the biggest problems affecting HR or the company right now?
   Concentrate on finding metrics that can measure just those issues. Only after you’ve done that should you consider branching out.
3. “Upper management doesn’t understand why we should measure HR.” Maybe the execs upstairs don’t see a benefit in measuring HR’s effectiveness. The way around that: Start small.
   Before you begin measuring things left and right, choose one small area to analyze and present that information (if it’s valuable) to senior management. That’ll put you in a better position to argue for a more intense campaign in the future.
4. “The data we’d need is scattered throughout different departments and is hard to access.” The information necessary to get a solid metrics strategy underway won’t all be in the same place.
   With metrics that encompass everything from compensation to benefits to training, HR pros have to put their best sleuthing hats on to gather all the data needed. That treasure hunt stands as just one more obstacle in HR’s way, and a reason some HR pros don’t even bother.
   Tip: Only look for or compile the information you actually need. If you focus your metrics effort on areas that your organization is trying to address, you’ll narrow the amount of data that needs to be accumulated.
   That means you’ll spend less time buried in a pile of file folders and staff member surveys and more time actually looking at potentially valuable information.
5. “We don’t have time.” Let’s face it: Not many HR pros are sitting around twiddling their thumbs these days. With HR as busy as ever, who can blame them for saying they don’t have a second to spare digging through raw data?
   But one of the major benefits of using metrics is determining exactly what HR should be focusing on. Investing time in metrics will ensure that the time that’s so valuable to you now is being used for the right reasons in the future.
6. “We’ve tried to use metrics before, but no one did anything with the data.” It’s possible you’ve already had a negative experience with metrics. Many firms go through the effort of choosing the right metrics to look at, finding and analyzing the data, and presenting it to managers and senior staff, only to have it fall by the wayside. (A common complaint: “Only a couple of our managers even looked at the data we emailed to everyone.”)
   A potential reason that happens: lousy presentation.
   One of the keys to a successful metrics strategy is presenting the new information you’ve come across in a memorable and striking way. Rows and columns of data more often than not will make people’s eyes glaze over.
   If you go through with a metrics strategy and fail to follow through by presenting the new information in an engaging way, you may as well have not even bothered at all.
   If you’re not particularly design-oriented, partner with someone in the company who is. An employee or manager in design could have some good, quick tips on how to present the information in an engaging way.

Yes, those 30 or 90 days give managers a chance to keep a close eye on employees to make sure they’re going to work out for you.

But there are problems with probationary periods that many firms overlook, according to Inc.com.

Keeping ‘em at-will

The biggest issue: Language that says or implies that staff become permanent employees who can only be fired for cause once they’ve made it through the probationary period.

That’s clearly not what you want – you want staffers to remain at-will so they can quit or you can fire them at any time for any reason.

Make it clear: Just because you have a probationary period doesn’t mean staffers are under contract as soon as they may make it past those 30 or 90 days.

But if an employer’s not careful, it can, indeed, mean that – especially if  the organization’s company handbook has wording that employees become “permanent” at the end of the probationary period.

After all, the opposite of probationary is – you guessed it – permanent.

So, forget the probationary period.

You can still keep policies like, “You can’t take vacation until you’ve been here for six months.”

And you can also still choose to not offer benefits until someone  has been with your company for  a certain amount of time.

But make it clear to employees and in your handbook that employment is and will always remain at-will and not under contract.

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As further evidence that our government continues to expand its reach into every business’ operations, recently released EEOC case numbers show 2012 was another big year for EEOC enforcement actions.  Filing just shy of 100,000 cases for the third year running, the EEOC continues to aggressively pursue employers for a variety of legal and regulatory violations.

The list of recent EEOC actions highlights the breadth of issues that can get an employer in trouble:

Dillard’s, Inc. – The EEOC settled a disability discrimination lawsuit against Dillard’s, Inc. which claimed that the company forced employees to disclose personal and confidential medical information in order to be approved for health leave, and fired employees with disabilities if they took health leave beyond the maximum amount of time allowed by the company.

Mavis Discount Tire  – The EEOC claims that Mavis did not hire women as managers, assistant managers, mechanics, tire installers, and similar jobs because of their sex.

Texas Roadhouse Litigation – The EEOC claims the Texas Roadhouse chain of restaurants did not hire people age 40 and older because of their age.

Bass Pro Litigation – The EEOC claims Bass Pro Outdoor World did not hire people because of their race (African-American or black) or national origin (Hispanic or Latino) and that Bass Pro retaliated against employees who complained about discrimination.

A little sex, a little age, a bit of race and a bit of the stupid (Dillard’s): The list of ways that employers can find themselves in the soup seems endless.

Three ways out of trouble

So what’s a company to do?   Here are three quick ways to keep your company out of trouble:

1. Don’t be stupid.  This seems like such an obvious solution but when you look at cases – like Dillard’s – it seems companies often just do dumb things.  Color inside the lines (well inside!) at all times and don’t try to push the envelope.  Companies oftentimes become frustrated with the rules they have to follow, but it simply isn’t worth the risk to see how close to the line you can skate.
2. Create a set of SIMPLE reports and actually use them.  These claims could have readily been avoided with a simple report that looked at key job applicant demographics vs. hiring demographics.
   For example, if you notice a trend that you have a mix of 20% white/60% Hispanic/20% black applicants yet your hiring pattern looks like 70% white/20% Hispanic/10% black, you know you could have a serious problem.  While there may be legitimate reasons for such disparities, you better have the data to back up your hiring decisions.
3. Have good, well-thought-out procedures in place.  Bass Pro has a big problem if it can be proven they retaliated against employees who complained.  Whether your company is big or small, you should have formal, written policies to handle complaints, etc. and you should ensure that you follow these procedures 100% of the time.  Also, if you are a smart company you will always err a bit on the side of the employee.
   Being employee-leaning will increase morale and give you a much more defensible place to stand should a claim be made.
   It’s easy to become a target of a lawsuit or an enforcement action but it is really not all that difficult to protect yourself should a claim arise.  While a few of the cases listed above are still pending, we’re willing to bet that their outcomes will largely hinge on how well the company followed their own procedures, documented what they did and why, and how often they put themselves under a microscope to determine if they had any patterns of discrimination.

Jeff Russell is CEO of GeniusHR, a a Texas-based maker of business process management software for HR.

Click here to learn more!  

Click here to learn more!  

Need proof? The numbers from a survey released last July tell the ugly story.

According to HR consulting giant Towers Watson’s Global Workforce study, 63% of U.S. employees said they weren’t engaged in their jobs.

Overall, the study showed that only 37% of U.S. workers were highly engaged.

Just over one-quarter (27%) were classified as unsupported, meaning they display traditional engagement, but lacked the enablement and/or energy required for sustainable engagement.

Thirteen percent are detached, meaning they feel enabled and/or energized, but weren’t willing to go the extra mile.

And almost one-quarter (23%) were completely disengaged.

Employment attorney Jathan Janove, speaking at the recent LEAP conference in Las Vegas, put employees into two buckets:

“Transactional” employees say: “I put in my time; in exchange I get a paycheck.”

“Engaged” employees, on the other hand, look beyond a paycheck, have a strong sense of belonging, and ask, “What are we trying to accomplish and how can I help?”

How can you tell ’em apart?

Janove offered some subsets of the two worker types:

• The turf protector says it’s not his or her job, but the shoe-stepper puts himself in others’ shoes.
• The naysayer says “this won’t work,” but the sunshine-maker always smiles and finds ways to contribute.
• The sleepwalker just staggers through the workday and is mentally checked out, but the energizer finds ways to connect with his environment.
• The finger-pointer always has an excuse why it’s not his fault, but the office sanitizer thinks well of people and does his/her best to squelch malicious gossip.
• The opportunist looks for chances to get away with stuff, while the problem-solver says: “I can fix this.”
•  The micromanager says “I’m the boss and you obey,” while the developer asks how he/she can help people grow.
• The smorgasbord-selector goes along only with the things he/she likes, while the peacemaker looks for solutions everyone can accept.

So how do you move employees from transactional to engaged? It all starts with your managers, Janove said.

First, managers need to understand what their workers regard as important. Here’s a general list of what the experts identify as keys to employee satisfaction:

• interesting, challenging work
• opportunities for advancement and learning
• collegial workforce
• fair compensation
• a respected manager
• recognition for accomplishment
• feeling a valued member of a team
• a substantial benefits package
• the feeling their work “makes a difference,” and
• overall pride in the company’s mission and its products or services.

5 key tips for managers

Here’s Janove’s advice for managers trying to enhance engagement levels:

Step 1: Tell them why

Contrary to a popular misconception, most employees don’t question authority; they just want to know why something needs to be done instead of just being told to do it.

Step 2: Ask more questions

Managers would do well not to lead with their mouths, but with their E-A-Rs: Explore, Acknowledge and Respond. Ideally, they should ask just as many questions of their workers as they make statements.

Step 3: From command to collaboration

In a command-and-control system, the boss gives an order and expects to be obeyed. A middle step is delegation, by which the boss won’t use his veto power if he can live with what employees have proposed or done.

But the ultimate step is collaboration, in which the boss first consults with employees, then gives credit to good suggestions and acknowledges all input.

Step 4: Show some humility

Collaboration and humility create opportunities for reaching people and not making difficult conversations adversarial.

Even when people must be let go, respect their dignity. People who felt they were not treated with dignity in terminations are 35 times more likely to sue.

Step 5: From cop to coach

The journey from compliance cop to compliance coach is in your managers’ best interest. They just may discover that instead of having a bad employee, they actually had a good employee who was being badly managed.

For change to stick, managers must see a clear path, feel motivated by the expected rewards and see a supportive environment.

Here are three tips on what to avoid in a job posting, courtesy of Findlaw:

Avoid gender-specific language. It seems obvious that jobs like “mailman” and “waitress” aren’t limited to applicants of one gender.
But you could still get in trouble for using gender-specific language like that.
Keep things neutral (“server” or “mailperson”) and you’ll stay safe.
If your workforce is unbalanced, don’t try to fix it with a discriminatory ad.
The makeup of your workforce should reflect the diversity of the area where you’re located.
If it doesn’t, do not under any circumstances seek out applicants of a specific race or natural origin to balance the scales.
Instead, try postings that reach a wider group – while also noting that you accept applications from everyone.
Be careful of internal recruiting. Referrals can be one of the best ways to find quality applicants.
But there’s a lurking danger in using referrals too much: bias.
Sticking mainly to referrals means that your open job might reach a disproportionate number of people of a particular race, religion, etc. Use other recruitment methods in addition to word-of-mouth recruiting to get a good mix of candidates.

You remember the case: A Davenport, IA, federal jury awarded $240 million to 32 men with intellectual disabilities who’d been subjected to egregious abuse and disability discrimination by their employer.

It was the largest verdict in the Equal Employment Opportunity Commission’s history. The EEOC had brought the suit against Hill County Farms on behalf of the 32 men.

But the EEOC acknowledged in a post-trial brief that the award  must be slashed to $1.6 million due to a federal cap on damages for a company with less than 101 employees.

That means instead of each worker being slated to receive $7.5 million, which the EEOC said was an “appropriate and meaningful measure of the actual harms suffered by these victims of discrimination,” they’ll only recover $50,000, plus interest.

Adding those figures to a wage discrimination judgment levied against Henry’s Turkey Service last fall, and the damages awarded to each man will total $2.9 million.

Hill County Farms is based in Goldthwaite, TX, but the abuse occurred in West Liberty and Atalissa, IA. The workers’ jobs involved eviscerating turkeys at two facilities run by Henry’s Turkey Service.

‘Deplorable conditions’

According to the EEOC, “for years and years, the owners and staffers of Henry’s Turkey subjected the workers to abusive verbal and physical harassment and restricted their freedom of movement.”

The men were housed in “deplorable and sub-standard living conditions,” EEOC officials testified, and were often refused “adequate medical care when needed.”

Verbal abuses included frequently referring to the workers as “retarded,” “dumb ass” and “stupid.”  Some of the men reported acts of physical abuse including hitting, kicking, at least one case of handcuffing, and forcing the disabled workers to carry heavy weights as punishment.

The Henry’s Turkey supervisors, also the workers’ purported caretakers, were often dismissive of complaints of injuries or pain, according to EEOC testimony.

The workforce’s intellectual disabilities made the men particularly vulnerable and unaware of the extent to which their legal rights were being denied, the agency said, adding that such worker treatment had gone on for 20 years. The EEOC’s lawsuit only covered the period between 2007 and 2009.

The jury awarded each of the men $2 million in punitive damages and $5.5 million in compensatory damages.

This wasn’t the company’s first brush with workplace law violations.

The EEOC earlier won a $1.3 million wage discrimination judgment when Senior U.S. District Court Judge Charles R. Wolle found that, rather than the total of $65 dollars per month Henry’s Turkey paid to the disabled workers while contracted to work on an evisceration line at the plant, the employees should have been compensated at the average wage of $11-$12 per hour.

The EEOC’s wage claims for each worker ranged from $28,000 to $45,000 in lost income over the course of their last two years before the Henry’s Turkey Service operation was shut down in February 2009.

This post was updated May 15, 2013.

According to the Equal Employment Opportunity Commission (EEOC), pregnancy bias claims, along with claims of sex discrimination, ranked as the third most frequent complaint in 2012.

Here are five ways to save you, your managers and your company from a pregnancy discrimination lawsuit, courtesy of Robin E. Shea on the Employment and Labor Insider blog: Managers and execs, take note — never, ever make fun of a pregnant woman’s appearance. Actions to avoid at all costs: patting a woman’s belly, teasing her about being big, or any other weird thing that we can’t think of. Shea’s acceptable word usage toward women who are pregnant include “radiant” and “beautiful,” though she recommends men don’t go too overboard even in that area for obvious reasons.

1. A miscarriage or a stillbirth is a tragedy. No two ways around it — these are terrible things to happen to everyone involved. The only acceptable response from a company employee: “I’m so sorry. What can I/we do?”
2. It’s also great when the employee comes back to work. Unless you discovered the worker was stealing money while she was on maternity leave, you couldn’t be more excited to have her back at work with the same pay and perks as well as breast milk expressing accommodations if necessary.
3. Yes, she can bring the baby in, if … If your workplace is the kind of environment where these things happen, it shouldn’t be a problem. However, it might be an issue if doing so would disrupt other staffers’ work schedules or wouldn’t be safe. Use your best judgment.