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robintek

Sep 01
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PROTECT YOUR BUSINESS WHEN USING SOCIAL MEDIA

By Business Protection Bulletin

By the beginning of 2011, the social networking Website Facebook had more than 600 million users. An estimated 200 million people use micro-blogging service Twitter. The business networking site LinkedIn has reported that it has more than 100 million members. In addition, the Internet hosts millions of blogs and tens of thousands of podcasts. These sites and media, popularly known as “social media,” have opened up new ways for people and businesses to communicate with each other. As the numbers show, they have become extremely popular. Consequently, businesses are increasingly using social media to reach current and potential customers.

However, use of these services presents risks together with the potential benefits. For example:

  • Employees making posts on these sites might make inaccurate statements, particularly when not all the relevant facts of a developing situation are known.
  • They might inadvertently release confidential information.
  • They might make statements that embarrass the company, such as negative remarks about racial or ethnic groups.
  • They might make statements that violate a person’s privacy.
  • Disparaging statements might provoke others to sue the company for libel. For example, if an employee of a restaurant posts on Twitter that a competitor’s stew looks and tastes like cheap dog food, the competitor might sue.
  • Blog posts that offer advice might expose the employer to lawsuits if others take the advice and get undesirable results.
  • Disgruntled customers, employees or competitors might post disparaging comments about the company.
  • Any of these situations can harm the company’s reputation.

The company’s General Liability insurance policy might not pay for the costs of defending against these claims or paying settlements. For example, the insurance will not cover losses resulting from:

  • An injury caused by or at the direction of an employee when he knew that the action would violate a person’s right to privacy.
  • An injury caused by or at the direction of an employee when he knew that a statement was false.
  • Claims that the business’s products or services do not live up to statements about their quality.
  • Injury arising out of statements made on Internet chat rooms or bulletin boards the business owns or over which it has control
  • . Unauthorized use of someone’s name or product in a manner that misleads that company’s potential customers.

In addition, the insurance only covers liability for certain types of injuries that are not bodily injuries. It will not cover a lawsuit filed by someone who suffered financially after relying on advice on the company’s blog. To reduce the chance that an uninsured loss will result from the use of social media, businesses should consider:

  • Written procedures for employee use of social media, including:
    • Who may post on the company’s behalf.
    • Definitions of acceptable and unacceptable behavior.
    • Employees’ personal sites should make clear that that the employees are not speaking on behalf of the company.
    • When a discussion should move offline and into the company’s regular workflow (for example, when a customer has a specific complaint that should be handled out of public view).
    • The consequences of non-compliance.
  • Company policies regarding employees’ ability to link to the company’s Website on their personal social media pages. The policy should also address employees’ use of the company name, logo, or other advertising on their sites.
  • Company policies on the content that employees may post on blogs, both those of the company and others blogs where the employees post on the company’s behalf.
  • Purchasing special insurance to fill in gaps left by the General Liability coverage.

Social media offers exciting new opportunities for businesses to build relationships with customers. However, they need to approach it with care and proper planning if they want to reduce the risks.

Sep 01
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DON’T WAIT UNTIL A FIRE IGNITES ON YOUR CONSTRUCTION SITE TO START FIGHTING FIRE

By Construction Insurance Bulletin

The wildfires experienced by Californians recently are just one of the many examples we see when it comes to just how threatening and damaging fire can be. Since job site fires pose a constant threat to construction projects, contractors should prepare for a potential fire by periodically confirming that their risk management plans adequately address the issue.

Don’t wait until you actually have a fire on-site to start your fight against fire. The following tips have been recommended by the International Marine Underwriters Association to help keep construction sites free from the threat of fire:

  • No smoking – Have and enforce a no-smoking policy on the construction site.
  • Loss control plan – The written loss control plan should comprehensively address the risks of fire exposure and include specific objectives to be enforced by management on the job site, general safety measures, and a named person to be in charge of on-site safety coordination.
  • Inspections and logs – Project managers should do daily on-site inspections of all materials and equipment, the work area, and any other nearby location with potential hazards. A running log should be kept of these daily inspections.
  • Hot works – Cutting, brazing, welding, and other hot works operations should have a person designated to observe the working area, as well as areas adjacent to it. The person should maintain a line of sight and watch combustible products, sparks, and slag. The surrounding areas should be inspected for a minimum of 30 minutes after the hot works operation ceases.
  • Portable heating equipment – Place all portable heating equipment on non-combustive platforms or flooring. Use recognized standards and/or the manufacturer’s specifications for ensuring the appropriate maintenance, fueling, and clearance.
  • Enclosures – Construct temporary enclosures with designated paths for transporting materials. For the best results, only construct the temporary enclosure with non-combustible approved materials and locate it away from overhead exposures.
  • Flammable materials – The labeling and identification requirements of gas and flammable liquid containers should be reviewed carefully before they’re brought on the construction site. Make sure that safe storage areas for flammables have been clearly designated and that the area includes surrounding barriers and signs.
  • Firefighting equipment – Keep firefighting equipment on-site and easily available at all times. The project manager should ensure that there is always a reliable water supply available for the equipment to connect to and that the equipment will adapt to local fire department equipment if necessary.
  • Rooftops – Roof vents should be adequately cleaned to decrease sources of ignition like lint. Additionally, a minimum of one portable fire extinguisher should be located at-level during rooftop operations. Make sure the extinguisher has sufficient capacity for the fire risk.
Sep 01
Love0

TEN LOSS CONTROL TIPS TO KEEP YOUR WORK LAPTOP SAFE

By Construction Insurance Bulletin

The growing trend of staying competitive by using the mobility and freedom provided by technology can often be a double-edged sword. Although taking your show on the road to off-site business meetings is a lot more efficient and easier when everything you need to make an eye-catching presentation is right there on the laptop, the mobility of technology does open the door to losses from theft.

Here are some simple loss prevention practices that employees can adopt to ensure their laptop stays safe and secure at and away from their worksite:

  1. Carry the laptop in a case that doesn’t standout or scream expensive technology with logos or emblems. The idea is that only the carrier knows the case contains a computer. To bystanders, the case could be full of useless papers or files.
  2. When traveling, use the hotel safe to store your computer. Never leave an unattended computer in a hotel room. Hotels usually warn customers that they aren’t responsible for valuables left inside rooms. And, don’t think that a locked room door is a sufficient safeguard. Maid services routinely leave rooms wide open as they’re being cleaned, meaning a passer could easily swipe your computer while the maid is busy cleaning the bathroom.
  3. Never leave a laptop on the seats or otherwise in plain view in a vehicle, even a locked vehicle. Trunks are also a highly-targeted area for thieves, as many assume this is where most people will try to secure their valuables. Whenever possible, take the computer with you or leave it in a more secure locked location.
  4. Make sure that your laptop will be secure during breaks if you’re at an off-site meeting. Ask if the various entrances and exits will be locked during breaks and then observe to make sure the room is indeed secure before leaving your laptop. If any question, then carry your laptop with you.
  5. Avoid checking your laptop as luggage during flights. There’s too much opportunity for it to be stolen or damaged. Remove the laptop from its carrying case and give it to the guard before you go through the airport security metal detectors.
  6. Write down the serial number, make, and model of your laptop and keep this information separate from your laptop.
  7. Even in your own office, you need to make sure that you store your laptop in a secure location when you aren’t using it, take lunch, or need to run to another area of the building. A good rule is to lock up your computer if you can’t directly see it from your location.
  8. Of course, the physical computer isn’t the only loss you can suffer. Keep a regular data backup schedule to prevent lost data due to equipment failure. It’s also prudent to minimize how much intellectual property or proprietary data is stored in the hard drive.
  9. Have a password system (preferably two-tiers) or a data encryption feature to protect your data.
  10. Lastly, you might consider asking your employer to arm your laptop with a tracking device as a last line of defense. Tracking devices for computers operate much like a LoJack system does on your car. Once the software is installed on the computer, it will run in the background without you even knowing it’s there. Meanwhile, the program routinely reports the IP address your computer is using and who logged into it to the security company. In the event you report your laptop stolen, the security company can remotely change how frequently the above information is fed to them. Unbeknownst to the thief, the security company is tracking his/her location every time the computer goes online.
Sep 01
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SHOULD A PROJECT OWNER ACCEPT A CONTRACTOR’S BUILDERS RISK INSURANCE POLICY?

By Construction Insurance Bulletin

While a construction project is underway, who should be responsible for the Property insurance on it — the project owner or the general contractor? Often, the contract puts this responsibility on the owner. However, some courts have decided that the contractor actually bears the risk of damage to the property before the owner accepts the completed project. The owner’s policy might not cover some significant perils, such as flood and earth movement, leaving the contractor uninsured for losses they cause. It therefore makes sense for the contractor to obtain builders risk insurance with the broadest coverage possible.

Many contractors carry Master Builders Risk policies that provide automatic coverage for all their projects. The insurance company bases the premium on the values of the projects the policy covers. For the contractor, this has several benefits. The master policy can act as a viable alternative to the owner’s policy, making the contractor’s services more attractive to potential clients. Also, the contractor’s policy might be broader than the owner’s coverage. It might include “Differences in Conditions” coverage to fill in gaps left by the owner’s policy. For example, the contractor’s policy might cover losses from floods and earth movements such as mudflows. Finally, buying one policy to cover all projects might be more cost-effective than buying individual policies for each job.

Common features of Master Builders Risk policies include:

  • Coverage for all projects that begin during the policy term, even if they continue past the term’s end. Depending on the policy, coverage could extend for up to 36 months past expiration.
  • The contractor must report the values of all jobs in progress periodically during the policy term. Reports may be due semi-annually, quarterly or monthly. The insurance company calculates the final premium based on the average of the values reported.
  • The company might offer the contractor a variety of premium rates, coverages, deductibles, and limits for certain coverages. The company bases these choices on several factors, including the type of construction (wood, steel, concrete, etc.), the fire protection in each project’s location, the intended use of the building (manufacturing, retail, office, etc.), exposure to flood and earthquake, and others.
  • Coverage options such as insurance for systems testing, extra expenses and project delays, and reduced deductibles.

Although the policy might automatically insure most projects, the insurance company may reserve the right to approve some projects before it will provide coverage. For example, the policy might automatically cover all projects with values of $10 million or less and require pre-approval for more expensive jobs. It might require pre-approval of jobs above a certain limit based on the type of construction — for example, all wood frame structures with values exceeding $5 million. It might also require pre-approval for Flood coverage for all projects located in special flood hazard areas or earth movement coverage for jobs in locations susceptible to earthquakes. In addition, pre-approval might be required at different times of the year for jobs in certain locations, such as projects in the southeast during hurricane season.

If a project owner is going to rely on the contractor’s Builders Risk policy, they should review it in advance to ensure that the terms and coverages meet their needs. The contractor should work with an insurance agent to answer any questions about the coverage and to address any deficiencies. Should the owner decide to accept the contractor’s policy, each side must adjust to new responsibilities for things like premium payments, amending the construction contract, providing acceptable evidence of coverage, and reporting values. If handled properly, this arrangement can be advantageous and cost-effective for both owner and contractor.

Sep 01
Love0

TIPS ON SUCCEEDING WITH WORKPLACE SAFETY

By Workplace Safety

Success is the process of achieving desired goals. Everyone wants to be successful in life. However, some people need to know where to start. Since the world is in a great shortage of jobs, having the keys to success will determine who finds employment and who doesn’t. Employers are able to be more selective about who they hire in today’s world. Teamwork, communication and listening are three skills that are essential to have. One overlooked aspect of success in the workplace is safety.

Safety is essential to maintain in the workplace at all times. This applies to safety for other workers and customers. Since this society is so litigious, there are no safety precautions that are too excessive. For example, installing a no-slip floor in a business that has never had any lawsuits isn’t an outrageous idea. This will keep both employees and customers safe from falls. It’s much better to prevent accidents before they happen. Promoting employee safety in the workplace requires regular education and a team effort. Employers should always provide adequate training about safety protocol in the workplace.

Every type of job has basic safety standards. It’s important to use common sense to determine what to do in various situations. Workers who are employed in dangerous jobs, such as mines or factories, must be especially vigilant about safety. Most factories and mine companies provide extensive safety training. Consider these 10 important aspects related to maintaining a safe work environment:

  1. Cooperate with fellow workers. This is the key idea of teamwork. When everyone cooperates, it’s easier to generate quality results. It’s also easier to maintain a safe environment in a workplace that is free of quarreling and distracted workers.
  2. Keep a positive attitude. When workers feel discouraged, the quality of their work is usually inadequate. It’s also harder for such workers to complete their regular duties, which may create an unsafe situation.
  3. Admit mistakes without blaming others. Blame creates rifts that affect teamwork negatively. This harmful action results in distracted workers, which pose a safety threat to the company they work for.
  4. Understand company goals before developing personal ones. Keep in mind that the company’s goals are always considered first. Personal goals should never conflict with them. Set a priority level for every goal or action. Keep the safety of others in mind at all times.
  5. Keep the workplace tidy. Bosses never complain that a workplace is too neat. However, a disorganized workplace can hamper productivity and create potential safety hazards.
  6. Be helpful to all coworkers. If a coworker asks for help, be sure to oblige. They’re much more likely to help those who provide mutual support. Helping a confused coworker may also save them from making an unsafe mistake.
  7. Avoid displays of jealousy. This natural emotion, if experienced, should be waved away. As mentioned before, negative emotions of any kind create unsafe distractions.
  8. Never let failures cause doubt. Everyone experiences a failed goal at some point. It’s important to have a realistic sense of confidence to maintain job safety.
  9. Appreciate all coworkers for the unique individuals they are. Never show hostility to others because they don’t share similar views or characteristics. Getting along with others is a key concept of promoting safety.
  10. Try to be disciplined consistently. Always follow company safety protocols. It’s easy for people to become too comfortable in their jobs, become lax with protocols and cause an accident. To avoid this, develop a regular routine of following proper protocols.
Sep 01
Love0

HOW SHIFT WORK AFFECTS THE BODY AND FIVE TIPS TO OVERCOME RELATED INSOMNIA AND FATIGUE

By Workplace Safety

Some form of shift work, whether it be during the day or night, is performed by about 20% of the American workforce. Most sleep experts have concluded that working at night isn’t biologically natural for the human body. The human body has evolved to sleep during the night and participate in activity during the day. The biological processes in human cells naturally occur in a circadian rhythm. It wasn’t until the light bulb allowed us to participate in daytime activities at night that all this changed. But, this isn’t necessarily a positive change.

For some, it’s easy to change their sleep-wake schedule. Meanwhile, others find it very difficult to sleep during the day and will remain tired when they’re working at night. This is a circadian rhythm disorder called shift work disorder.

Although there is not yet conclusive data showing how many shift workers suffer from shift work disorder, research is showing that there are consequences of shift work – traffic accidents, workplace accidents, gastrointestinal illness, heart disease, and psychiatric disorders. Cancer, for example, is thought to be linked to shift work due to melatonin suppression. Melatonin is a naturally occurring hormone that is a potent antioxidant. It’s secreted in the highest amounts during nighttime sleep. So, when a person is working at night under bright lights, their body could be secreting less melatonin

Another well researched consequence of shift work is heart disease. Some studies have shown that those sleeping during the day versus at night have a tendency toward high blood pressure during sleeping hours.

Cortical rhythm, which has to do with stress reaction, and leptin levels, which helps to make a person feel full, are also altered by daytime sleeping. Some research shows that a person can increase their glucose and insulin levels and develop pre-diabetes within just a few days of sleeping during the day and working during the night. In 2007, shift work was even classified by the International Agency for Research on Cancer (a WHO subcommittee) as a probable cancer carcinogen.

Some wonder if the health affects are applicable to them if they’re a night owl or have a natural inclination to stay up late. This is being studied, but there simply isn’t a clear answer yet. In the meantime, there are some tips that anyone doing shift work can use to help minimize fatigue and insomnia.

  • Use the light to your advantage while you’re working, as light sends a signal to your brain that it’s time for the body to be awake and alert. On your drive home from work, use sunglasses or glasses that filter blue wavelength and a brimmed hat to keep out sunlight and start signaling to your body that it’s time for sleep.
  • Make your daytime sleep environment sleep friendly with blackout shades, turning the ringer off the phone, and disconnecting the doorbell. Family should understand that even though it’s daytime, this is your bedtime.
  • It may also be helpful if you don’t alter your work sleep-wake schedule too much on your days off. Of course, you still want to allow yourself daylight hours to socialize and attend to business affairs.
  • If the sleep environment and behavior changes don’t work, then you might consider melatonin. Some studies show that it’s useful for those unsuccessfully trying to sleep during the daytime. Be careful not to take the melatonin too far in advance of when you plan to sleep, as it will generally only take thirty minutes to start working.
  • Most will find help through environment and behavior changes. For those that aren’t helped by the above four tips, armodafinil / Nuvigil, a medication commonly used by those suffering from narcolepsy, has now also been approved by the FDA for shift work disorder.
Sep 01
Love0

TEACH YOUR EMPLOYEES THE “THREE Ps” TO PREVENT WORKPLACE BACK PAIN

By Workplace Safety

Given that back pain is one of the most common reasons that U.S. employees give for missing work, it should be a major concern for employers. The American Chiropractic Association reports some 31 million Americans experience low-back pain at one point or another during a year. Back pain, although common, isn’t necessarily always serious in nature. In fact, most cases aren’t a symptom of an infection, cancer, inflammatory arthritis, or some other serious condition. Instead, most cases of back pain are mechanical in nature. By training employees to follow the three Ps, employers can help employees avoid mechanical back pain and any resulting work absences and costly doctor visits:

1. Prevention. Believe it or not, the shoes an employee wears not only impacts the health of their feet, but also their legs, hips, and back. Shoes have a role in an employee’s ability to maintain a healthy posture during walking, standing, and sitting activities. Additionally, shoe choice also plays a large role in slips and falls, which are frequent causes of workplace back injuries. Here are a few tips to share with employees:

Never wear unsupported or unstable shoes. There’s more surface area on shoes with a wedged bottom, which can help support the foot and make it safer and easier to walk briskly. Pay attention to the type of surface being walked on. Linoleum, various types of tile, marble, hardwood, and such offer little traction. Wear shoes with non-slip soles or that aren’t smooth on the bottom. Never wear shoes that are inappropriate for a job, such as open-toe shoes when climbing ladders or walking over grates.

2. Posture. The muscles in the back can become fatigued and injured when an employee stands with a swayed back or slouches. This posture exaggerates the natural curvature of the back, which is an unnatural and stressful position. The following techniques can help employees improve their posture:

Hold reading materials at eye-level, not chest-level. Periodically rest one foot on a small stool when long periods of standing are required. Objects being worked with should be at a comfortable, ergonomic position. An occupant of a chair should position it so that their feet are flat on the floor. Keep back pockets empty of wallets, keys, and cell phones when sitting so that the back will be properly aligned. Chairs without lumbar support can be modified to support the lower back with a small pillow or rolled towel.

Cluttered, disorganized work areas can frequently cause back pain. Initiate a movement to help employees reorganize their work areas to prevent repetitive, useless, and/or unduly stressful movements. Equipment should be organized so that it’s easily accessible for users and doesn’t make them twist and stretch to reach it. Here are some ideas:

  • Encourage employees to use speakerphone, a shoulder rest extension, or a headset when they’re frequently on the phone. These tools can help prevent employees from becoming stationary too long and/or cradling the phone between their ear and shoulder, which are two common culprits of both neck and back pain.
  • Ensure all employees doing frequent, prolonged computer work have their computers positioned so that the screen can be read without tilting the head up or down and discs can be inserted without undue strain.
  • Have an accessible space available for employees to safely store their bags, briefcases, purses, and so forth so that they aren’t frequently carrying these items around with them.
  • Display clear “how to” postings on proper body mechanics for lifting objects. Even office workers can sometimes be lifting heavy boxes of supplies and such that could injure their back if not lifted properly.
Sep 01
Love0

EFFECTIVE COMMUNICATION INCREASES EMPLOYEES’ APPRECIATION OF AND SATISFACTION WITH BENEFITS

By Employment Resources

Common sense tells us that understanding a situation can enable us to take charge and make informed decisions, which in turn increases the likelihood that we will be satisfied with the results. This wisdom applies to employees and their benefits: Employees who are well-informed about the details of their benefits offerings are more apt to choose the benefits appropriate for them—those they most need and actually use—and thus be happier and more satisfied with their benefits packages. Survey results verify this, providing added motivation to employers to beef up their employee benefit plan communications.

A survey from Harris Interactive and Charlton Consulting Group indicates that most employees do not understand the full value of their salary and benefits, which can lead to dissatisfaction with their compensation package, and with their employer and working situation overall. According to this survey, 51% of workers believe that their employer pays 30% or less for employee benefits, such as health care, life, disability and retirement. However, the Department of Labor’s Bureau of Labor Statistics puts employers’ contributions at 43%, over and above wages, for employee benefits.

That survey also found a correlation between employees’ understanding of and their satisfaction with their total compensation, with 75% of the employees who said they are very satisfied with their benefits also saying they have at least quite a bit of understanding about their benefits package. Such a correlation also was found in a survey from Univers Workplace Benefits and Employee Benefit News. According to that survey, employees who are knowledgeable about their benefits are almost 30% more likely to be satisfied with the benefit plans offered.

How do these indicators play out in the day-to-day workings of companies? According to the Univers survey, companies that have high employee satisfaction with benefits are 86% more likely to say that benefits positively affect their recruitment and retention efforts. Further, firms with employees who are knowledgeable about their benefits are two-thirds more likely than other firms to report turnover rates of under 20%.

Clearly, effective communications yield positive results, not only for employees, who are empowered to choose and use benefits wisely, but also for employers, who are likely to see a more stable and motivated workforce as a result of satisfied employees. Key elements of effective employee benefits communications include:

  • Establishing a specific budget item for benefits communications and funding it adequately.
  • Enabling those employees responsible for benefits communications to stay abreast of the latest trends and technologies by investing in their training.
  • Creating a benefits communications strategy, a plan for implementation, and benchmarks against which to measure success.
  • Using multiple types of media to recognize that everyone learns in different ways, and that some employees will respond to printed materials, others to visual displays, and still others to oral communications such as meetings.
  • To the extent possible, targeting communications to individual employees and employee demographic groups.
  • Recognizing the difference that one-on-one communications can make to some employees and trying to build time into the communications plan to allow for this.

Remember that effective communications are not a one-shot deal; messages sometimes must be repeated often, albeit in different ways and through different media, to truly take hold with the listener. The result can be employees who are more satisfied, not only with their benefits but with their employer overall, which can lead to a more stable, more productive workplace.

Sep 01
Love0

HOW TO ENGAGE EMPLOYEES IN BECOMING MOTIVATED TO GET HEALTHIER

By Employment Resources

My grandmother once told me that she would save her allowance all month to walk three miles to the soda fountain for a single milkshake. From ready-made foods at the market, to the fast-food drive by, to diet pills purporting instant and effortless weight loss, our culture today is all about instant gratification and results. The basic fact that not everything is obtained without an effort and/or wait seems to be a lost concept.

When it comes to a person changing their mindset to adopt healthy habits and rid unhealthy habits, results and gratification take time. It takes a commitment and constant effort to succeed at losing weight, exercising regularly, tobacco cessation, and other habit changes. If they’re to be successful, workplace wellness programs not only need to recognize the above, but also to understand what elements will engage employees over the long-term.

Let’s say you’ve hosted a health benefits presentation on active lifestyles and eating right. The employee turnout is high, and you had a lot of sincere interest from your employees. However, you observe a week later that very few have made any of the recommended changes. Within a few months, even most of those that made an attempt are back to their regular routines.

The above is an all too common scenario that confirms the reality that most people are more well-intentioned than self-motivated. Therefore, motivation should be one of the key elements provided by your wellness initiatives. Here are a few tips to help you inject motivation into your workforce:

  • Make the experience personal for employees by offering a health risk assessment that will show an employee their own unique health risks and what steps he/she can take to address each risk.
  • Completion of the assessment and any resulting follow-up recommendations should be tied to the health risk assessment incentives you’re offering, such as reduced health plan premiums.
  • Keeping in mind that an individual must be willing, ready, and able to make a behavior change, you might focus on those that express a desire to make positive lifestyle changes. Aside from offering incentives, you might also help employees see the risks of failing to make positive changes, such as by posting charts with comparative lifespan stats on individuals that are smokers and non-smokers; pre-hypertensive, hypertensive, and of normal blood pressure; and are overweight, obese, and of normal weight.
  • Provide/encourage support system structures, such as employee-based walking clubs, sponsoring a biggest loser competition, subsidies for joining certain fitness centers, or newsletter articles featuring health-successful employees.

Change is rarely easy for any of us. Employers must be careful that they don’t get so caught up in the black and white of a wellness program that they forget to address what will make or break it – human nature.

Sep 01
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CURB HEALTH PLAN OVERSPENDING THROUGH DEPENDENT ELIGIBILITY MONITORING

By Employment Resources

As health care costs continue to rise each year, employers also continue seeking methods to curb overspending. One such method is particularly appealing because it doesn’t entail plan redesign, plan cutbacks, changing vendors, or cost shifting. It simply involves ensuring that only those eligible are receiving plan coverage and having their claims paid. This can be accomplished by using a dependent eligibility audit to monitor dependent eligibility, as it allows overspending and coverage errors to be caught.

From employee oversight, poor record keeping, unintentional error, to fraud, there are many reasons why someone ineligible for plan coverage might still be on the plan roll. Often times there are ineligible dependent children past the age of majority; a divorced spouse; or a grown child that was eligible due to a student status, but isn’t currently attending school still on a plan roll. Then, there is COBRA notice requirement and continuation of rights compliance. This could be relevant if a once eligible individual has lost their eligibility status during a qualifying event.

In any event, these ineligible individuals add up when they are maintained as eligible and are thereby having claims paid that shouldn’t be paid. The employer is incurring potentially high overspending and unnecessary added cost by doing allowing such to continue.

The eligibility audit, mentioned above, can help the employer determine if their plan is carrying any person that isn’t eligible. For example, an eligibility audit can catch those enrolled as dependents that don’t actually meet the plans written requirements for what constitutes an eligible dependent, thereby alerting the employer that this individual should be removed from the roll. The audit process will include asking eligible employees with enrolled dependents to provide proof (such as a domestic partnership affidavit, a marriage license, certificate of birth, decree of adoption, Social Security disability determination, or current college transcript) confirming that the dependent does actually meet the plan’s written dependent status requirements.

The employer will need to decide beforehand if the audit should be applied concerning all plan members or only in specific areas, such as verifying specific dependent classes (only college students for example.) The employer will also need to determine beforehand what types verifications of dependent eligibility will be required and whether it will need to be an original or copy of the documentation. Determining who will be responsible for examining and verifying the documentation is also an important consideration. If contracted out verses done within the internal human resource or benefits department, the audit is often more costly.

Aside from having a direct impact on what the audit will cost, all of the above decisions directly impact the quality of the results.

Two last important elements are deciding a time frame for the audit and whether an amnesty period will be offered. Often times the audit time frame will run congruent with the benefits re-enrollment/ renewal period. This also allows employees already thinking about their coverage to make any appropriate changes that have been neglected in the past. The employer should also determine whether an amnesty period will be offered to allow employees to report ineligible dependents and not have adverse consequences as a result. Whatever is decided, the employer must be sure to clearly communicate to their employers what the dependent eligibility standards are, what documentation will be needed to verify a dependent eligibility status, and what the consequences will be for ineligible dependent continuation.

An eligibility audit not only offers a considerable amount of immediate health plan cost-savings, it also provides an opportunity for the employer to review plan provisions related to dependent eligibility. Sometimes the definitions need to be clarified or revised.

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