Archive for the ‘Employee Benefits’ Category

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2011 Human Resources Updates – Special Report

Wednesday, January 5th, 2011

As we begin 2011, many employers are entering the new year with renewed, yet reserved, optimism. While unemployment remains unchanged, December sales figures beat all analysts predictions, Wall Street is at two-year highs, and the SBA increased small business loans in Q4 2010 to unprecedented records. During the single week of Dec. 18 to Dec. 24, the SBA guaranteed a record high of $1.95 billion in small business loans – the highest amount since the SBA began tracking weekly loan volumes.

On the employment front, many employers hold no hard feelings letting 2010 go. It was one of the most active legislative years on recent record, and while 2011 has many new regulations in store, in won’t compare to the previous year. However, while many business owners may be suffering from “governmental overload”, there are still some significant changes in store of which they should still be aware.

2011 Human Resources Updates

We are proud to announce the availability of our newly published report, 2011 Human Resources Updates. This important report takes a snapshot-view of many timely issues facing employers in 2011. Topics include:

  • New 2011 Employment Laws
  • Staying up to date with Health Care Reform
  • 2011 Payroll and Tax Updates
  • Employee and Management Training
  • Recruiting – what lies in store in 2011
  • Creating a safe work environment
  • Managing in the age of social media.

While most employers would rather look towards new sales revenues and improving financials, it is extremely important to remain aware of legislation that could impact their business in 2011.

Download your free copy of CPEhr’s 2011 Human Resources Update Report today. No registration required!

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Health Care Reform Update: Coverage for Adult Dependents

Wednesday, October 27th, 2010

A friendly reminder to California employers, that effective last month (on September 23) health insurance plans must offer coverage to young adults. This is one of the first major health care reforms to take effect under federal health care reform legislation.

For employers, this means that employees enrolled in heath care plans can get coverage for their young adult children up to 26 years old. Several federal agencies issued regulations to put this into action, and key elements of those regulations include:

  • Coverage Extended to More Children: The goal of this new policy is to cover as many young adults under the age of 26 as possible with the least burden. Plans and issuers that offer dependent coverage must offer coverage to enrollees’ adult children until age 26, even if the young adult no longer lives with his or her parents, is not a dependent on a parent’s tax return, or is no longer a student. There is a transition for certain existing group plans that generally do not have to provide dependent coverage until 2014 if the adult child has another offer of employer-based coverage aside from coverage through the parent.  The new policy providing access for young adults applies to both married and unmarried children, although their own spouses and children do not qualify.
  • Special Enrollment Opportunity for All Eligible Young Adults: For plan or policy years beginning on or after September 23, 2010, plans and issuers must give children who qualify an opportunity to enroll that continues for at least 30 days regardless of whether the plan or coverage offers an open enrollment period.  This enrollment opportunity and a written notice must be provided not later than the first day of the first plan or policy year beginning on or after September 23, 2010.  The new policy does not otherwise change the enrollment period or start of the plan or policy year.

What Employees Might Ask You About

  • Immediate Options: Private health insurance companies that cover the majority of Americans volunteered to provide coverage earlier than the implementation deadline for young adults losing coverage as a result of graduating from college or aging out of dependent coverage on a family policy. This stop-gap coverage, in many cases, is available now. Employees might ask their employers and insurers about this option.
  • Open Enrollment: If early coverage is not an option with an employer or insurance company, then young adults will qualify for an open enrollment period to join an employee’s family plan or policy beginning on or after September 23, 2010. Insurers and employers must provide notice for this special open enrollment period. Parents will probably watch for it or ask you about it.
  • Offer of Continued Enrollment: Insurers and employers that sponsor health plans will inform young adults of continued eligibility for coverage until the age of 26. To get the coverage, employees with young adult children need not do anything but sign up and pay for this option.

Source: U.S. Department of Health and Human Services, via the California Chamber of Commerce

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It’s Time to Take the HIPAA Quiz

Friday, October 8th, 2010

Well, if you’ve read up on your HIPAA knowledge, you should be ready to take this short quiz. Here are two scenerios – what would you do?

Case Study #1

Joe applies for a job in a robot factory and must take a pre-hire drug test. Before taking the test, he signs a HIPAA authorization allowing the drug test results to be given to the factory. While taking the test, one of the technicians notices that Joe is exhibiting symptoms of another medical problem. When she tells Joe about her observations, Joe decides to take another test. Unfortunately, this second test reveals that Joe has a serious illness. Under HIPAA, what else might the technician do in this situation?

Answer: Although the technician may release Joe’s drug test results to the factory, no other PHI may be disclosed unless Joe signs another authorization. Joe’s authorization only permitted the disclosure of his drug test results to the factory. Authorizations must be carefully examined to determine if disclosures are restricted, and all limits must be carefully adhered to.

Case Study #2

To comply with HIPAA’s Security Rule, organizations should identify each staff member’s individual need to access E-PHI, permit access only for appropriate purposes, and prevent all other access. Basically, different levels of access to E-PHI should be provided to different staff and work stations, based on their job responsibilities and needs. Organizations must also be able to modify staff access rights, for example when someone’s duties change, or their job ends. For example, suppose Bob resigns from his job, which had given him online access to E-PHI of his employer’s patients. In this situation, what must Bob’s employer do to comply with HIPAA?

Answer: Organizations must be able to detect unauthorized access to E-PHI, modify ( and terminate) the access rights of staff, and implement policies and procedures to safeguard the facility and equipment from unauthorized physical access, tampering, and theft.

If you are unsure of if your are currently in HIPAA compliance, please contact one of our Human Resources Consultants who will be able to guide you through the process.

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Do You Know Your HIPAA?

Wednesday, October 6th, 2010

The Health Insurance Portability and Accountability Act (HIPAA).

HIPAA was enacted by Congress in 1996 to protect the personal privacy of any individual’s condition as it relates to their mental or physical health.  This also includes health treatments that are past, present or future.  All health treatments should be considered Protected Health Information (PHI). As an employer, it is important that you know that according to HIPAA, all medical records and data are PHI when they contain individual identifiers of an employee (see list of individual identifiers in article block below). In this post, we will review some key HIPAA guidelines.

Individual Identifiers

According to HIPAA, all medical records and data are Protected Health Information when they contain individual identifiers, such as:

  • Names
  • Contact information (street or email address, telephone or fax number)
  • Dates directly relating to an individual (birth or death, admission or discharge)
  • Geographic subdivisions smaller than a state (county, city, zip code)
  • Account numbers (Social Security, medical record, insurance)
  • Biometric identifiers (fingerprint, retinal scan, full-face photograph)
  • Other unique identifiers (certificate or license number, vehicle license plate, Web URL, IP address)

Compliance Requirements

HIPAA requires an employer to “apply appropriate sanctions against members of its workforce who fail to comply with the privacy policies and procedures” [45 CFR §164.530(e)]. Thus, organizations are required by law to discipline staff for violating HIPAA’s privacy regulations. The HIPAA Privacy Rule requires organizations to:

  • Adopt privacy policies and procedures
  • Notify patients and clients about their privacy rights
  • Institute safeguards to secure Protected Health Information (PHI)
  • Train staff (employees and volunteers) on their responsibility for privacy
  • Appoint a Privacy Officer responsible for enforcing privacy requirements
  • Set up procedures to respond to complaints about privacy
  • Take steps to minimize any unauthorized access or use of PHI

Key HIPAA Terms

Consent:
Informal authorization presumed to be granted by an individual when they’re given an opportunity to, but do not, object to a use or disclosure of their PHI.

Covered entities:
HIPAA applies to covered entities, which includes any person or business that provides, bills, or receives payment for medical care, including health care providers, clearinghouses that process medical information, and health plans and health insurance issuers.

Protected Health Information (PHI):
Protected health information is individually identifiable health information, in any form or media, about a person’s mental or physical health, condition, or treatment.

Security Rule:
The Security Rule (or “Security Standards for the Protection of Electronic Protected Health Information”) is a part of HIPAA designed to secure Electronic Protected Health Information (E-PHI) from disclosure, alteration, or loss.

In our next post, we will provide two sample scenarios as they relate to HIPAA compliance.

Disclaimer

Source: Lawroom.com

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Understanding PTO Policies, Part 2 – Sick Pay

Tuesday, August 24th, 2010

In our last post we discussed vacation policies, from both the best-practices and legal standpoints. In today’s post we take a quick look at Sick Pay.

What is required by law?

Like vacation, sick pay is not required under Federal or State statutes. However, there are a number of localities passing measures requiring employers to provide sick pay to their employees. If sick leave is offered, up to 50% of the time must be permitted to care for immediate family members (“Kin Care”).

Unlike vacation, sick pay does not need to accrue or vest, and employers are not required to payout sick leave at termination. This flexibility allows them a certain level of creativity when it comes to implementing a sick pay policy.

“Use it or Lose it” Policies

Employers MAY implement a “use it or lose” policy, but need to be aware that such policies may lead to sick leave abuse. Statistics vary as to the percentage of employees who abuse sick leave, with estimates ranging from 15% to 30%. [1]

Instead of “use it or lose it” sick pay, it is recommended to roll the accrued time over to the next year, with a cap. This policy eliminates the need for an employee to call in sick, lest they lose a benefit they view as “coming to them”.

The most common sick day policies grant between 5 and 10 sick days off per year.

If you need assistance reviewing your sick, vacation, or other PTO policies, please give us a call – one of our Human Resources Consulting experts will be sure to help.

Source: [1] USB Leaders Lab, “A Cure For Sick Leave Abuse:”, August 2008.

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Understanding PTO Policies, Part 1 – Vacation Pay

Wednesday, August 18th, 2010

As the tight economy continues with no foreseeable end in sight, employers are challenged to find ways to compensate, motivate and reward employees while adding minimal costs to their bottom line.  As health insurance premiums continue to skyrocket, many employers are utilizing  paid time off (PTO) as a recruiting tool to entice qualified applicants to join their company.  PTO policies such as paid vacation, sick,  holiday, and jury duty are common-place within the workforce; however, state regulations restrict how employers may implement such policies.  Non-compliance with these regulations may result in wage and hour lawsuits that can be costly for employers. In the next two posts, we review some important PTO rules and guidelines.

Vacation Pay

The most common form of PTO is vacation pay. According to Salary.com, 86% of employers offer some form of vacation pay. According to the California Chamber over Commerce, of 90% do. However, contrary to popular belief, vacation is not required under any Federal or State statutes. If offered, it is contractual in nature, meaning it becomes an employer policy that must be adhered to. As a result, many states impose restrictions on vacation pay. For example, in California, vacation pay is considered a vested, earned benefit which accrues over time and must be paid out at the time of termination.

“Reasonable Cap”

Vacation pay cannot be forfeited, and a  “use it or lose it” policy may not be enforced. However, employers are entitled to impose a “reasonable cap” to the amount of vacation an employee may accrue. A general guideline would be a vacation accrual equal to double (2x) their annual amount. As an example, if an employee accrues 40 hours of vacation per year, a reasonable cap would be 80 hours. After the employee has earned 80 hours of vacation, their accrual would stop.  The DLSE (the Division of Labor Standards Enforcement)  has determined that an employee must have at least nine months after the accrual of the vacation within which to take  the vacation before a cap is effective.
Accrual Methods

Accrual methods are flexible. Most commonly, vacation days are accrued by the day, week, or pay period. According to the CalChamber, the most common vacation policies are:

• Two weeks after one year
• Three weeks after five years
• Four weeks after eleven years

While some employers enjoy using their vacation policy to show off their corporate creativity, they are cautioned to avoid making policies overly complicated or difficult to track. At best, errors in calculations may occur. At worst, disparate policies may result, leading to potential discrimination violations. Additionally, the vacation accrual rate cannot decrease from one year to the next.

In summary, while vacation pay is a well accepted practice by a vast majority of businesses, it carries a range of obligations and rules that must be adhered to. If you have any questions or concerns about your current vacation policy, or would to create one, please contact one of our Human Resources Consulting experts who can assist you.

In our next post, we will review sick, holiday and personal days off.

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