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PROTECT YOUR BUSINESS BY PREVENTING EMPLOYMENT BIAS CLAIMS

By Business Protection Bulletin

Norma is an assistant manager at a video store. After feeling very sick for a couple of days, she goes to the doctor and is diagnosed with strep throat. Since her employer provides sick time benefits, she calls the store manager and tells him she cannot work that day. He dismisses her illness as “just a sore throat” and orders her to report for work. She complies, but the strep infection takes most of a week to go away because she could not rest. On the third day, she calls in sick again, despite the manager’s obvious displeasure. Six weeks later, the manager terminates her employment, citing declining sales as the reason. Norma believes otherwise and files a complaint with the U.S. Equal Employment Opportunity Commission.

Since the great recession began in late 2007, complaints like this have become common. The EEOC reported that it received almost 100,000 job bias complaints in 2010, a new record. More than a third of them were from employees who felt their employers retaliated against them; another third were race discrimination claims. Why is this happening? Employment law experts believe the recession has a lot to do with it, as dismissed employees have had trouble finding new jobs. They also believe the EEOC has stepped up enforcement of anti-discrimination laws. However, they also point to internal problems with employers.

Some employers might perform only those activities that they believe will give them an effective legal defense should an employee sue. They write anti-discrimination and anti-retaliation policies into their employee handbooks, make supervisors attend training once a year, and then call it a day. However, these things by themselves might not be effective. Policies do no good if managers do not enforce them. Training that does not address trends such as discrimination and retaliation complaints will not stop them from happening. In addition, if managers do not monitor whether this training changes supervisors’ behavior, supervisors might conclude that the company is not serious about it.

Employment Practices Liability insurance covers an employer’s legal liability for wrongful acts against employees, including discrimination and retaliation. Insurance underwriters will look at an employer’s policies and training practices, but they will also consider its claim history. Underwriters will be wary of insuring employers with a record of frequent complaints against them. If they offer coverage at all, they will charge higher premiums to account for the perceived higher risk.

To prevent claims and keep insurance premiums low, employers should consider these measures: * Study financial results to determine how much these types of claims have cost or might cost in the future in terms of settlements, legal costs, time more profitably spent on other matters, workplace morale, insurance costs and other areas.

  • Ensure that you have strong policies in place against discrimination and retaliation.
  • Require supervisors and managers to attend training to prevent these kinds of claims. Include in the content of the training discussions of what is and is not permissible when it comes to discrimination and retaliation. Make it clear that performance evaluations will include incidents of discriminatory behavior.
  • Create a workplace culture that does not tolerate illegal activities of any kind. Senior managers should conduct themselves in ways that model the behaviors they want to see from subordinates.

Experts say that recessions always breed increased discrimination complaints against employers. However, that does not have to be the case with every employer. Effective training costs money, but that cost is far less than the cost of insurance deductibles, higher premiums, demoralized workforces, and damaged reputations. Discrimination and retaliation claims hurt a business’s bottom line. Preventing them makes both economic and moral sense.

DOES CONTRACTOR’S INSURANCE COVER REMOVING OF UNDAMAGED PROPERTY?

By Construction Insurance Bulletin

An electrical contractor runs miles of wiring through what will be a three-story office building. Following completion, the contractor tests the wiring, finds it satisfactory and leaves the job. After other subcontractors hang and paint the walls and do other finishing work, the general contractor tests all systems. This time, the electrical system fails. The GC summons the electrical contractor back; after more testing and diagnosis, the contractor concludes that there are faults in two segments of the system on different floors and adjacent sides of the structure. Fixing the problem will require tearing out the finished walls and a few appliances attached to them (a dishwasher in an office kitchen area, computer network equipment, etc.). Tearing these things out, repairing the faulty wiring, and reinstalling the walls and finishing them so they look flawless will cost much more than simply fixing the electrical problem. The cost is far beyond what the contractor can afford to pay out of pocket. Will its Commercial General Liability insurance help? The answer depends on the state where the building is located.

The ISO CGL policy covers the insured contractor’s legal liability for physical damage:

  • To tangible property, including all resulting loss of its use, or loss of use of tangible property that is not physically injured; and
  • Caused by an occurrence, which is “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.
  • In addition, the policy states that it does not cover the insured’s liability for property damage:
  • To work or operations the insured performed or which a subcontractor performed on the insured’s behalf, if the damage arises out of any part of the work and it occurs after the work’s completion; and
  • To other tangible property that is unusable or less useful to the owner because it includes the insured’s work that is known or thought to be defective, deficient, inadequate or dangerous, if fixing the insured’s work will restore the property to usefulness.

Some courts have ruled that the CGL policy covers the cost of tearing out and reinstalling undamaged property when that is necessary to fix the defective work. A 2002 federal appeals court ruling in a Washington state case said that the removal and destruction of other subcontractors’ work due to the insured’s defective work is property damage, as the CGL defines the term. The court also said that the insured’s performance of defective work met the policy’s definition of “occurrence.” A 2010 decision from Washington state reached a similar conclusion — unintentionally providing defective products to an installer was an “occurrence,” and removal and replacement of other suppliers’ products and work was “property damage.” Courts in Alaska and Oklahoma have ruled that the policy provision that excludes coverage for unusable tangible property did not apply because of a second provision that gives coverage back for loss of use resulting from sudden or accidental injury to the insured’s work. The courts felt that installing defective components was done accidentally. Conversely, courts in Arizona, Maryland and South Carolina have held that tearing out and replacing undamaged property is not physical damage caused by an “occurrence” because it is not an accident. Rather, the courts saw it as a cost associated with a project. Since the courts differ so much from one state to another, it might be helpful for a contractor to know in advance what a particular state requires. The contractor’s insurance agent might also know which insurance companies have a history of paying for these types of claims. The contractor could find that it is worthwhile to buy coverage from these companies even if they charge higher premiums

KEEP YOUR RISKS OF DEFECTS LOW ON GREEN BUILDING PROJECTS

By Construction Insurance Bulletin

As concerns grow about the potential effects of global warming and people pay more attention to reducing their carbon footprints, green construction is becoming a larger part of the solution. A McGraw Hill study found that in 2008 the value of green construction starts might have been as high as $49 billion, and it could reach $140 billion by 2013. Building owners are attracted by energy cost savings, tax incentives, and the good publicity that comes from using an environmentally-friendly facility. Although green construction has become a lucrative business for contractors, it carries some risks that conventional construction methods do not have or have to a lesser extent.

Much of the difference between green construction and conventional methods is in areas of emphasis and materials. Green construction, because it is relatively new, uses new materials that might not have a proven long-term track record. The focus of a green building is energy conservation; objectives such as moisture control to prevent mold growth receive less attention. Also, compared with conventional buildings, green buildings allow more air in from the outside, with potential impacts on building occupants’ health. Before construction begins, contractors must work with the project owner to identify the specific green objectives the owner wants to accomplish. With that knowledge, the contractor can determine how much additional risk the objectives present and create risk management plans to deal with it.

Price pressures can also be an issue. Green construction can be more expensive than conventional construction, yet project owners might be unwilling to pay a large premium for it. Contractors will be under pressure to hold costs down. This might cause them to take shortcuts that could increase the risk of creating defects in the building. The owner and contractor must work together to create a plan that balances cost savings with sound construction practices.

Green buildings carry a risk that their components might not perform as well over time as do those of conventional buildings. Because they stress innovative techniques and materials, green buildings use materials that have not undergone the years of testing that conventional materials have. Green construction favors using renewable resources and emphasizes insulation to reduce energy use. Conventional buildings use materials with a history of good performance and emphasize keeping water and other elements out. To reduce performance risks, contractors should arrange for peer reviews that predict how materials will interact with other materials and building systems, predict how the building will hold up in actual use, and analyze waterproofing and humidity control capability.

Although green buildings are a relatively new concept, building owners expect them to perform at least as well as conventional buildings over the long term. Contractors who erect them might be vulnerable to lawsuits if a building fails to meet the U.S. Green Building Council standards. The USGBC offers its LEED certification to buildings that meet standards; the council can also revoke certification if it finds that a building is not performing as expected. Losing certification can harm a contractor’s reputation. The peer reviews of materials and systems should help to reduce this risk.

The green construction business is almost certain to grow rapidly during the next several years, and contractors will naturally want to take advantage of that. To reduce their risks, they should work with organizations such as the USGBC to get education and training on materials, construction techniques, and risk management. Together with peer review of materials and collaboration with project owners, these measures should help contractors complete quality and environmentally sound buildings.

THE IMPORTANCE OF AND KEY POINTS ABOUT BACKGROUND CHECKS ON POTENTIAL EMPLOYEES

By Construction Insurance Bulletin

In the current economic environment, businesses everywhere are trying to cut expenses anywhere they can. The survival of many businesses will depend on figuring out where and how to save money.

One big expense comes from finding, interviewing and vetting, and training new employees. However, the repercussions of not knowing who you’re hiring can be even more costly. One of the most important elements to hiring a new employee is performing a background check. Just one poor hiring decision can be very costly to most businesses. In fact, hiring decisions can often make the difference between a business failing or thriving. Thirty percent of small business failures are directly caused from employee theft, according to the U.S. Chamber of Commerce.

Pre-screening potential employees thorough a background check is one of the most cost effective tools to protect your business, lessen the risk of hiring unacceptable employees, and make sure that you’re making smart hiring decisions. Here are some key points about background checks:

Liability Protection. Small businesses usually skip performing a background check on a potential employee either because they’ve developed a false sense of trust and ease from working so closely with their employees or because they don’t understand what the legal liabilities can be from not screening and performing background checks. Either way, skipping background checks can open the door to costly legal liability. All businesses that have employees interacting or providing a service directly to customers have a liability if one of their employees harms a customer or has a previous history of wrongdoing. Businesses, especially small to medium ones, often can’t survive after the resulting lawsuit. Aside from the negative aspects, business owners might also find that their insurance provider will offer a discount for performing new hire background checks.

Reputable Vendors. Buying instant public records from a database doesn’t constitute a background check and can still leave you liable. These databases usually don’t do any fact checking or update their existing information with any regularity, if at all.

To best protect yourself, your employees, and your customers, you should find a reputable and trustworthy background screening company. This is the best way to make sure that the data on the potential employee is up-to-date and accurate.

Do keep in mind that since background check vendors come in various shapes and sizes and offer a range of different services, it’s also important to find a vendor that offers the right services for the size and needs of your business. When choosing a vendor, you might want to make sure that a human-manned toll-free number is available to assist you around the clock. You might also want to do a background check of sorts on the vendor by asking for customer reviews and searching for any negative information about the vendor on the web.

The Fair Credit Reporting Act. Sometimes inaccurate data might be found on a background check or an employer might violate a job applicant’s privacy rights; The Fair Credit Reporting Act (FCRA) was set up to guard against such from happening. Compliance involves employers obtaining written consent from the applicant prior to running a background check and notifying the applicant of the source of any background check information used during the hiring process. The latter of the two is where employers get into trouble using databases.

Only Purchase Needed Information. Some vendors will encourage you to purchase anything and everything they find on the potential employee, at a hefty price none the less. If your business niche requires such an extensive background check this is fine, but more often than not a basic background check will suffice.

A Web Search Can Supplement Background Checks. Employers should keep in mind that anyone can put anything that they want to, true or not, on their social network profile, blog, or personal website. So, this type of information should never replace an appropriate background check. That said, many employers are using these portals as a supplement to the background check. A lot can be learned about a person just by reading the types of things they blog or write about on social network sites. You might find a person exhibits just the traits you’re looking for and is passionate about their occupation. On the other hand, someone that updates their blog with a post about how they hate old people might make you think twice before hiring them in your assisted living facility.

AN AUTOMATIC EXTERNAL DEFIBRILLATOR SHOULD BE PART OF YOUR WORKPLACE SAFETY PROGRAM

By Workplace Safety

Many understand that cardiac arrest is a serious problem involving the heart, but most don’t know the specifics of the subject, just what a killer it can be, or how to respond when it occurs in the workplace.

Quick Facts about Cardiac Arrest. Cardiac arrest is when the pump function of the heart suddenly stops. Ventricular fibrillation, also called V-fib, is where the lower chambers of the heart quiver instead of normally contracting. Pulseless ventricular tachycardia involves an extremely fast heartbeat, but without effective cardiac output in the lower chambers of the heart and no effective pulse. These irregular heart rhythms can cause the heart to suddenly stop pumping blood out to the rest of the body. The most common cause of a sudden cardiac arrest is a heart attack involving either of the above irregular heart rhythms. Bradycardia, which is a slow heartbeat, accounts for a small number of cardiac arrests.

The causative factors are vast, including illegal drugs and certain prescription medications, respiratory arrest, drowning, trauma, choking, and electrocution. A previous diagnosis of heart disease may or may not exist. Sometimes a cardiac arrest occurs without any apparent causative agent.

Someone suffering a cardiac arrest will suddenly collapse, be unresponsive to verbal stimuli and gentle shaking, and cease to breathe normally. The person will also have an absent pulse, but those not medically trained should look for signs of circulation (normal breathing, coughing, twitching, movement, and improved color) instead of checking for a pulse.

Once the heart fails to pump blood to the rest of the body, it only takes four to six minutes for brain damage to begin. Without immediate appropriate treatment, the victim can die within minutes. It’s estimated that 95% cardiac arrest victims die before they ever reach the hospital.

Chance of survival is decreased by seven to ten percent per minute of delay until defibrillation, when CPR isn’t performed. The sudden cardiac arrest survival rate is 48-74% when CPR is immediately initiated and defibrillation takes place within three to five minutes.

Should You Have An Automatic External Defibrillator? Automatic External Defibrillators (AED) have become commonplace in schools, casinos, and airports. Knowing the above facts, employers should definitely consider having an AED as part of their workplace safety program. After the electrodes are applied to the victim’s chest, the device evaluates cardiac wave patterns. If the machine finds an abnormality, such as ventricular fibrillation and ventricular tachycardia, it sends an electric shock to the heart to return it to a normal rhythm.

The operation of such a machine may send the red flags of liability up for some employers. Thanks to every state having Good Samaritan laws covering lay rescuers using an AED and the civil liability immunity provided by the Federal Cardiac Arrest Survival Act, you don’t have to worry about liability issues. An AED isn’t like the advanced defibrillators used by medical professionals. In fact, The American Heart Association says that since an AED automatically analyzes and shocks, it be safely operated by trained lay rescuers. The machine is compact, portable, battery operated, easy to use, durable, and lightweight.

Aside from the potential for any employee to have an accident or underlying medical condition, American workplaces are seeing more and more employees working long past retirement age. Depending on the response of emergency services can lose precious minutes, and since the amount of time elapsed between cardiac arrest and defibrillation is directly linked to the survival of the victim, an AED can mean the difference between life and death. It just makes good sense to have at least a few of your employees trained to operate an AED.

WHAT IS ERGONOMICS AND WHAT DOES IT MEAN TO ME?

By Workplace Safety

Although the term ergonomics was first used in the late eighteenth century, it wasn’t until after World War II that the field known today as ergonomics really began to shape product design and human interaction with surrounding elements.

What Is Ergonomics? Today, ergonomics is something frequently touted by an array of professionals, from marketing and IT experts to those in the health care field. The problem is that some have a very specific and straightforward idea of what the term ergonomics means and others try to make anything and everything fit the term. The result is many that are seeking information on ergonomics walk away from the subject more confused than ever.

Evidence of the premise of what’s now known as ergonomics can be found by looking at ancient Hellenic civilizations and early Egyptians that used many ergonomic principles in their tool and workplace designs. The word is actually derived from two Greek words – ergon and nomoi. Ergon means work and nomoi means natural laws. So, ergonomics is the science of work and the human relationship to work. According to The International Ergonomics Association, the technical definition of ergonomics is a science discipline that’s concerned with comprehending human interaction with other elements of a system -and- a profession that uses data, principles, methods, and theory on a design so that it can be optimized for system performance and human well-being. A much simpler way to describe ergonomics is the science of making things around us both comfortable and efficient for our usage. Those that practice within this field are called ergonomists. Ergonomists are concerned with the science of work. They basically study work to determine how it’s performed and how it can be performed better. Ergonomics becomes useful to most every profession in that it attempts to make improvements to whatever work is being done by making things (products, processes, and services) around us more comfortable and efficient.

What Does Ergonomics Mean to Me? Now that the definition of ergonomics is clearer, users can better understand what they are most concerned with – how they use a service or product, how it meets their needs, and if they will like using it. The answers to these questions can be found by looking at the comfort and efficiency involved with ergonomics.

Comfort and efficiency go hand and hand, as comfort is one of the most important aspects of whether or not a design is effective. It goes far beyond just having something soft. Comfort in the mental elements of a service or product and during human to machine interaction are key concerns in ergonomic design.

Physical comfort in the human-machine interaction is often the first thing noticed during usage. Having this physical comfort from how the machine feels is important to users. Essentially, you aren’t going to continue to touch something that doesn’t feel good to you. Not touching it means you aren’t operating it, which thereby makes it useless. Any designer will tell you that usage is the only true measure of design quality. It’s their job to come up with inventive ways to increase the usage of their product or service. And, as mentioned above, comfort has everything to do with how often an item is used. Comfort also comes from mental aspects. What a product looks and feels like, its durability, and ease of use helps us make a mental evaluation as to if the quality of an item is congruent with what it costs. The more ergonomically designed a product or service is, the higher the quality and value perception about it will be.

Efficiency can essentially be viewed as making a process easier to perform. This may be in the form of making something more physically efficient by reducing the amount of strength required during the process, making something faster by reducing how many steps are involved in the process, reducing the amount of training or knowledge required during the process to make a task easier to complete and allow more people to safely perform the task, reducing the amount of parts composing a product to make repairs and upkeep easier, and so forth.

Much like comfort, if something is more efficient, then it’s easier to do, more likely to be done, and more likely to be done more often. Although often complicated by extensive technical terminology, the basic premise is that comfort adds to ease of use and ease of use adds to comfort, thereby making products more useful.

THE COST AND REMOVAL OF WORKPLACE STRESS

By Workplace Safety

Workplace stress is evidenced every day, but few employers truly understand the secondary ramifications that stress can cause in the workplace. Four out of five American workers are thought to be affected by workplace stress, which is costing U.S. businesses about $300 billion each year from stress related: absenteeism, employee turnover, medical, insurance premiums, workers’ compensation, lawsuits, and diminished productivity.

Since stress is a subjective experience, it can be difficult to define. Further complicating matters is the difficulty to distinguish where work stress begins and everyday stress ends. However, the European Agency for Safety and Health at Work offers an excellent definition for workplace stress: “people experience stress when they perceive an imbalance between the demands made of them and the resources they have available to cope with those demands.”

While a slippery slope to harmful stress, there’s a place for “good stress” or “eustress” in the workplace. This type of non-harmful stress can be compared to an athlete preparing for an event; while the preparation might be stressful, it could mean improved performance. A good rule of thumb for distinguishing between the two is that if the stress is chronic in nature, then it’s harmful.

Since the start of downsizing and outsourcing trends of the 1990’s, which caused a constant fear of unemployment, there is an ever growing awakening by the scientific and business community about the causes of stress and its’ physical and mental health effects. These factors are endless: a predominately service-oriented U.S. economy, growth of new operating systems, faster work pace, longer hours, and utilization of contract and temporary workers. Whatever the cause, some research has shown that about 35% of workers experience high levels of on-the-job stress and 13% are always stressed at work.

For an employer, stress has a direct effect on cost. Among that 35% of highly stressed employees above, there was a 50% increase (an extra $600 dollars per worker each year) in health care utilization cost to each employer. If depression is involved, the additional cost is even higher, as these employees use their health care plans about 70% (an extra $950 per employee) more often than average. Combine depression and stress, and the cost is astronomical – an additional $2,000 dollars per worker each year. Regardless of where the stress originates, the above is a tremendous added cost to the employer.

Employers are also starting to connect the dots between stress and productivity in a service-based economy. When stress slows the productivity of someone pushing a button on a conveyor belt, it may lower productivity. Change the stressed employee to a customer service position, and there can be a direct loss of business. Employer realization to all of the above has prompted many to develop programs to slash the long-term cost of stress, boost employee morale, and constructively boost productivity. The employer essentially has two choices:

  1. View and treat reported cases of stress as an employees’ problem.
  2. Acknowledge the real nature of the problem and take action to do something about it.

An increasing number of employers are opting for the second approach. Some are even actively engaged in reducing workplace stress by changing the key elements of the workplace, a tactic known as “organization of work.”

Organization of work is not a one-size-fits-all concept, but it essentially addresses the way jobs are designed and performed, along with any organizational practices that influence the job design. A key element to the success of organization of work will be involving employees in the design, implementation, and evaluation of the program. There should be an open dialogue, without fear of repercussion, for employees to assist in identifying and resolving problems.

An appealing element of addressing workplace stress with organization of work is that it doesn’t have to be a massive undertaking. In fact, it is best to build the program one piece at a time. For example, many companies will start off with an employee survey. Keep in mind that the focus should be working conditions and work-related factors that are not based on an individual judgment, but rather an employee consensus. The expertise of a consult might be beneficial if you get stuck during the process.

Sadly, current employees are not the only ones experiencing unprecedented levels of stress. A recent study showed the teenagers and the college-aged are claiming anxiety and mental health issues five times greater than their counterparts did during the Great Depression era. So, employees that are struggling with stressed employees today can possibly look forward to facing the challenge of a whole new batch of stressed employees in the future.

A BUY-SELL AGREEMENT MAY SAVE YOUR BUSINESS IN THE EVENT OF YOUR BUSINESS PARTNER’S DEATH

By Employment Resources

You spend much time together, and share the burden of difficult decision making. But it’s not your spouse – it’s your business partner. Your business partner is a tremendous asset to your company. So, how do you protect your business in the event of your business partner’s death? Planning ahead for this scenario may be one of the most important things you do as a business owner.

The death of your business partner can affect more areas of your business than you anticipate. You might be prepared to have conflict between your concerns and those of the deceased’s family. But you should also be prepared for problems such as suppliers wanting to back off; creditors requesting payments and refusing to extend additional credit; customers being afraid to do business; and maybe even some employees leaving your company.

It is beneficial to explore what choices you have should your business partner suddenly pass away. One of the first choices you consider may be to liquidate the business and distribute the assets. The obvious problem with this plan is that you are eliminating your own source of income! Furthermore, the assets of the business may sell for a small percentage of their worth.

A second option would be to take on the deceased’s heirs as your new business partner(s). The problem with this plan is that often it was the special relationship you had with your associate that made the business work. Replicating the chemistry, skill set, and perspective you shared with your business partner is unlikely to happen with their heirs.

A third option for the future of your business would be to sell your share to the deceased’s heirs. However, this option is usually not viable, as the disagreements begin with the purchase price and continue through the rest of the negotiations.

Finally, you could buy out the surviving heirs and maintain the business on your own. This might be the most desirable to you, but again, you will be subject to disagreements over purchase price and other terms. Plus, you will have to come up with the money to purchase the other half of the business.

So, what is the ideal solution? A properly funded buy-sell agreement. A buy-sell agreement is a legally binding contract which dictates exactly what will happen if one of the business partners dies or becomes disabled. You can make all the decisions ahead of time, so both you and your business partner can make the decisions for the future of your business. The contract can be as simple or complex as it needs to be, but most importantly, it will either set a purchase price or provide a formula that will be used to value the business in case of a buy-out.

The death of your business partner and friend will be a difficult time for you and their family. Having to negotiate the future of your business at such a difficult time can be avoided by having a buy-sell agreement already in place. With this agreement, you can provide fairly and adequately for the deceased’s family members, value the deceased partner’s share of the business, avoid placing a financial burden on the business, and prevent bad feelings between the parties. Consult an attorney or financial advisor to talk about planning for the future of your business, before it becomes a greater burden at an already difficult time.

INTEGRATED DISABILITY AND HEALTH PROGRAMS YIELD FEWER EMPLOYEE ABSENCES

By Employment Resources

Whether the economy and business is good or bad, employers in all industries pay careful attention to labor costs. As far as labor costs go, lost productivity due to disabling injury or illness is one of the main cost drivers. In fact, the 2010 Total Impact of Employee Absences survey by Mercer/Kronos showed that unscheduled disability absences account for around 8.7% of U.S. payrolls. This percentage is comparatively over half of the 13.6% of payroll that accounts for the cost of health care.

According to the 2010 CIGNA Integration Value Study, which compared both non-integrated and integrated medical and disability plans, employees who suffer a short-term disabling injury or illness and that have disability and medical coverage spent fewer days on medical leave and away from work than those that didn’t have an integrated program. Other key points from the CIGNA study included the following about employees that have an integrated health and disability insurance program:

  • This group had a 20% lower absentee rate than employees with only disability coverage.
  • When compared with employees without an integrated plan, this group had an 11% greater return-to-work rate.
  • This group needed an average of 13 fewer days of short-term disability leave than employees without access to an integrated program.

Direct and Indirect Savings through Medical and Disability Programs. Each day of disability for a business with average benefit offerings, an average hourly loaded wage of $29.71, and a 60% short-term disability benefit costs the business approximately $159.00. A business with 5,000 medical and disability-covered employees could see around 2,500 fewer disability days, which would add up to a productivity and direct cost savings of almost $400,000.

Don’t Forget the Value of Chronic Care. It’s also important for employers to remember that illness and injury prevention doesn’t cease after the employee starts a long-term or short-term disability absence, as one medical condition can often lead into or cause another to develop. Multiple studies have shown that a chronic care program is an important aspect of an employer having an integrated approach. For example, a different CIGNA study on chronic care showed that employees participating in chronic care programs were absent four fewer days and had a higher return-to-work rate after a disability than employees not participating in chronic care programs. The benefits of a chronic care program, such as coaching, support, and education, can be instrumental in preventing employees already going through a difficult time from seeing their situation drastically worsen.

In closing, it’s clear that reining in employee absentee-related cost is vital to a company’s financial bottom line. Research like CIGNA’s Integration Value Study shows that integrated programs are key to having a coordinated effort in not only assisting employees to return to work, but also to stay on the job and healthy. The greater opportunity that integrated medical and disability programs offer to employees to lessen disability absence and improve their health is a win-win for employee and employer alike.

PLANNING AHEAD FOR A SUCCESSFUL BENEFIT OPEN ENROLLMENT

By Employment Resources

The substantial amount of labor and hours involved in open enrollment season is known all too well to benefit administrators. But, are you making it harder than it should be? Administrators can make the open enrollment process go much more smoothly, and with a lot less intensive labor, by simply assessing the effectiveness of past enrollment processes before the new season begins. Let’s look at four practices to help you assess your process and determine what adjustments can be made to make the process more efficient.

1. Taking Advantage of the Pre-planning Phase. Begin by clarifying your business’s objectives. You can then evaluate benefit plan designs. Whether it’s health savings accounts, consumer-directed plans, reimbursement accounts, or so forth, the important point is to determine what options best fit your business’s goals and employee pool. Other considerations during the pre-planning period should include your budget for benefit administration costs, what and how technology will be utilized to make the enrollment process as efficient as possible, and whether the administration of benefits will be outsourced or done within your business.

2. Developing and Fine-tuning a Project Plan. Your project plan should be defined clearly and stipulate the following elements:

  • The dates for the enrollment period.
  • What resources are at your disposal and how they are to be allocated?
  • A checklist of all tasks.
  • How much lead-time will be needed for the addition of new employees and, if applicable, changing vendors or carriers.
  • The training schedule for customer service reps and benefit staff members.

Additionally, it’s always prudent to have a contingency plan in place and to oversee the development of the project plan at each stage.

3. Educating Employees on Maximizing Benefits. A 2010 MetLife Employee Benefits Trend Study showed that employees remain extremely interested in communications with their employers regarding financial advice, retirement planning, and other benefit options. In fact, the overwhelming percentage of employees feel that communication has become a very important piece of the enrollment process.

Employers should provide their employees with the education they need to make wise health care decisions and the tools necessary for them to navigate the health care system successfully. There are a number of ways you can accomplish these goals, such as benefit calculators, health and wellness fairs, in-service meetings, direct mail benefit information, and online benefit tools.

It’s also important for employers to communicate the overall value of offered benefits to employees. Your employees should be informed about trends in the insurance industry, whenever you add more value to their health care plan, and how much you are contributing for the offered benefits.

4. Foresee the Tasks to Follow Open Enrollment. Employers should foresee and properly plan for the tasks that will need to be accomplished during the post-enrollment period. If not properly planned for, these tasks can create just as many problems as those that need to be done before and during the open enrollment period. Make sure to address the following points:

  • ID card distribution
  • Payroll (payroll feed schedule, timing of the last payroll period, and payroll deduction automation)
  • Quarterly audit schedule with the carrier
  • Follow-ups on carrier inaccuracies
  • starting a plan for the next year