Compliance Recap - December 2018

December was a relatively quiet month in the employee benefits world.

A U.S. District Court issued an order declaring that the Patient Protection and Affordable Care Act (ACA) is unconstitutional. The Equal Employment Opportunity Commission (EEOC) issued two final rules to remove certain wellness program incentives. The Department of Labor (DOL) updated its Form M-1 filing guidance for association health plans.

UBA Updates

UBA updated or revised existing guidance:

U.S. District Court Declares ACA Unconstitutional

On December 14, 2018, the U.S. District Court for the Northern District of Texas (Court) issued a declaratory order in ongoing litigation regarding the individual mandate and the Patient Protection and Affordable Care Act (ACA). The Court declared that the individual mandate is unconstitutional and declared that the rest of the ACA – including its guaranteed issue and community rating provisions – is unconstitutional.

The Court did not grant the plaintiffs’ request for a nationwide injunction to prohibit the ACA’s continued implementation and enforcement. The Court’s declaratory judgment simply defined the parties’ legal relationship and rights under the case at this relatively early stage in the case.

On December 16, 2018, the Court issued an order that requires the parties to meet and discuss the case by December 21, 2018, and to jointly submit a proposed schedule for resolving the plaintiffs’ remaining claims.

On December 30, 2018, the Court issued two orders. The first order grants a stay of its December 14 order. This means that the court’s order regarding the ACA’s unconstitutionality will not take effect while it is being appealed. The second order enters the December 14 order as a final judgment so the parties may immediately appeal the order.

On December 31, 2018, the Court issued an order that stays the remainder of the case. This means that the Court will not be proceeding with the remaining claims in the case while its December 14 order is being appealed. After the appeal process is complete, the parties are to alert the Court and submit additional court documents if they want to continue with any remaining claims in the case.

At this time, the case’s status does not impact employers’ group health plans. However, employers should stay informed for the final decision in this case.

Read more about the court case.

EEOC Issue Final Rules to Remove Wellness Program Incentive Limits Vacated by Court

On December 20, 2018, the Equal Employment Opportunity Commission (EEOC) issued two final rules to remove wellness program incentives.

As background, in August 2017, the United States District Court for the District of Columbia held that the U.S. Equal Employment Opportunity Commission (EEOC) failed to provide a reasoned explanation for its decision to allow an incentive for spousal medical history under the Genetic Information Nondiscrimination Act (GINA) rules and adopt 30 percent incentive levels for employer-sponsored wellness programs under both the Americans with Disabilities Act (ADA) rules and GINA rules.

In December 2017, the court vacated the EEOC rules under the ADA and GINA effective January 1, 2019. The EEOC issued the following two final rules in response to the court’s order.

The first rule removes the section of the wellness regulations that provided incentive limits for wellness programs regulated by the ADA. Specifically, the rule removes guidance on the extent to which employers may use incentives to encourage employees to participate in wellness programs that ask them to respond to disability-related inquiries or undergo medical examinations.

The second rule removes the section of the wellness regulations that provided incentive limits for wellness programs regulated by GINA. Specifically, the rule removes guidance that addressed the extent to which an employer may offer an inducement to an employee for the employee’s spouse to provide current health status information as part of a health risk assessment (HRA) administered in connection with an employee-sponsored wellness program.

Both rules will be effective on January 1, 2019.

Read more about the EEOC’s final rules.

DOL Updates Form M-1 Filing Guidance for Association Health Plans

On December 3, 2018, the Department of Labor (DOL) published its “10 Tips for Filing Form M-1 For Association Health Plans And Other MEWAs That Provide Medical Benefits” that provides plan administrators with information on when to file and how to complete portions of Form M-1.

The DOL emphasizes that all multiple employer welfare arrangements (MEWAs) that provide medical benefits, including association health plans (AHPs) that intend to begin operating under the DOL’s new AHP rule, are required to file an initial registration Form M-1 at least 30 days before any activity including, but not limited to, marketing, soliciting, providing, or offering to provide medical care benefits to employers or employees who may participate in an AHP.

Read more about the DOL guidance.

Question of the Month

Q: If an employee must increase the hours of childcare needed because the employee changes work schedules, may the employee increase the DCAP amount that the employee elects?

A: Yes, increasing the hours of childcare is a permitted election change event that would allow an employee to increase the employee’s DCAP election amount consistent with the change in childcare cost.

**This information is general and is provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.


More pay? Nah. Employees prefer benefits

Are you considering raising salary and cutting back on benefits? A new report reveals that workers would choose a job that offers benefits over a job that offers 30 percent more salary but does not offer benefits. Read on to learn more.


Workers across the country say you can't put a price on great benefits, according to a new survey.

By a four-to-one margin (80% to 20%), workers would choose a job with benefits over an identical job that offered 30% more salary with no benefits, according to the American Institute of CPAs, which released the results of its 2018 Employee Benefit Report, a poll this spring of 2,026 U.S. adults (1,115 of whom are employed) about their views on workplace benefits.

“A robust benefits package is often a large chunk of total compensation, but it’s the employees' job to make sure they’re taking advantage of it to improve their financial positions and quality of life,” said Greg Anton, chairman of the AICPA’s National CPA Financial Literacy Commission. “Beyond the dollar value of having good benefits, employees gain peace of mind knowing that if they can take a vacation without losing a week’s pay or if they need to see a doctor, they won’t be responsible for the entire cost.”

Employed adults estimated that their benefits represented 40% of their total compensation package, according to the study. The Bureau of Labor Statistics, though, states that benefits average 31.7% of a compensation package. Still, workers in the report see benefits as a vital part of their professional lives.

“Despite overestimating the value of their benefits as part of their total compensation, it is concerning that Americans are not taking full advantage of them,” Anton said. “Imagine how employees would react if they were not 100% confident they could get to all the money in their paycheck. Leaving benefits underutilized should be treated the same way. Americans need to take time to truly understand their benefits and make sure they’re not leaving any money on the table.”

Other notable findings from the report include:

  • 63% of employed adults believe that being their own boss is worth more than job security with an employer, while 18% added that they will likely start or continue their own businesses next year.
  • Millennials were the most likely generation to believe that being their own boss is worth more than job security. They were also the most likely generation to start their own businesses.
  • 88% of employed adults are confident they understood all the benefits available to them when they were initially hired at their current job. However, only 28% are "very confident" they are currently maximizing all of their benefits.
  • When asked which workplace benefits would help them best reach their financial goals, 56% of adults said a 401(k) match or health insurance, with 33% citing paid time off and 31% citing a pension.
  • Baby boomers favor health insurance and having a 401(k) match more than younger generations, while 54% of baby boomers also prioritized a pension, versus only 16% of millennials.
  • Millennials put the highest priority on work-life balance benefits, such as paid time off, flexible work hours, and remote work.

For the full report, visit the AICPA’s 360 Degrees of Financial Literacy site here.

SOURCE: McCabe, S. (3 December 2018) "More pay? Nah. Employees prefer benefits" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/news/workers-prefer-benefits-over-more-pay?brief=00000152-1443-d1cc-a5fa-7cfba3c60000


11 top workplace stressors

Thirty percent of survey respondents to a recent CareerCast survey listed deadlines as a top workplace stressor. Continue reading this blog post for more of the top workplace stressors.


With workplace stress leading to lower productivity and increased turnover, an important tool in an employer’s pocket is a working knowledge of what workplace stressors exist and how to help workers manage them. A new survey from CareerCast, a job search portal, finds these following 11 factors represent the most common stressors in any given profession.

The CareerCast Job Stress survey had 1,071 respondents who selected the most stressful part of their job from one of the 11 stress factors used to compile CareerCast’s most and least stressful jobs report.

11. Environmental conditions

2% of respondents say this is a leading contributor to workplace stress.

10. Travel

3% of respondents say this is a leading contributor to workplace stress.

9. Meeting the public

4% of respondents say this is a leading contributor to workplace stress.

8. Hazards encountered

5% of respondents say this is a leading contributor to workplace stress.

7. Life at risk

7% of respondents say this is a leading contributor to workplace stress.

6. Growth potential

7% of respondents say this is a leading contributor to workplace stress.

5. Working in the public eye

8% of respondents say this is a leading contributor to workplace stress.

4. Physical Demands

8% of respondents say this is a leading contributor to workplace stress.

3. Competitiveness

10% of respondents say this is a leading contributor to workplace stress.

2. Life of another at risk

17% of respondents say this is a leading contributor to workplace stress.

1. Deadlines

30% of respondents say this is a leading contributor to workplace stress.

For the full CareerCast report, click here.

SOURCE: Otto, N. (5 May 2017) "11 top workplace stressors" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/slideshow/11-top-workplace-stressors?tag=00000151-16d0-def7-a1db-97f03af00000


It’s peak flu season. Here’s what employers should do now

Even though many businesses offer paid sick leave as a benefit to their employees, there is no federal paid sick leave law. Read this blog post to learn what proactive steps employers can take to keep the workplace healthy.


The U.S. is in the height of flu season, which means employers are likely to see an influx of employees coughing, sneezing and spreading germs in the office. Aside from passing a box of tissues, employers may be wondering what they are legally permitted to do when their workers get sick.

One benefit that is becoming increasingly relevant is paid sick leave. Several cities and states — including Arizona, California, Connecticut, Massachusetts, Chicago and others — have paid sick leave laws on the books. But while many companies offer paid sick leave as a benefit, there is no federal paid sick leave law. Paid sick leave laws may remove some incentive for sick workers to report to work, making the illness less likely to spread to the rest of the workforce.

But paid sick leave laws do place limitations on employers. For example, companies cannot make taking a paid sick leave day contingent upon the employee finding someone to cover their shift. Depending on the law, employees don’t always need to give notice of their absence before their shift begins, which could make scheduling difficult. Some laws limit an employer’s ability to ask for a doctor’s note.

Employers do, however, have some latitude when it comes to requiring employees to stay home from work or sending them home if they show signs of illness. Employers just need to be careful not to cross any lines set by the federal Americans with Disabilities Act or a state fair employment statute. This means steering clear of conducting medical examinations or making a disability-related inquiry.

According to the U.S. Equal Employment Opportunity Commission, employers should avoid taking an employee’s temperature. This is considered a medical examination by an employer, which is generally prohibited except in limited circumstances.

They should also avoid asking employees to disclose whether they have a medical condition that could make them especially vulnerable to complications from influenza or other common illnesses. Doing so would likely violate the ADA or state laws, even if the employer is asking with the best of intentions. Employers also cannot require workers to get a flu shot, according to the EEOC.

Employees could have a disability that prevents them from taking the influenza vaccine, which could compel them to disclose an underlying medical condition to their employer to avoid taking the shot. Additionally, some employees may observe religious practices that would prevent them from taking the flu vaccines. Thus, requiring an employee to take a vaccine could lead to a violation of Title VII of the federal Civil Rights Act of 1964 in addition to the ADA.

Beyond these limitations, employers can take these proactive steps to keep the workplace healthy.

Ask employees if they are symptomatic. In determining who should go home or not report to work, employers may ask workers if they are experiencing flu-like symptoms. This would not rise to the level of a medical exam or a disability-related inquiry, according to the EEOC.

Advise workers to go home. Employers can order an employee to go home if they are showing signs of the flu. The EEOC says that advising such workers to go home is not a disability-related action if the illness is like seasonal influenza.

Encourage workers to telecommute as an infection-control strategy. But keep in mind that the company could be establishing a precedent for telecommuting as a reasonable accommodation in other circumstances, such as for an employee recovering from major surgery who cannot come to the workplace.

Encourage flu shots. Employers may encourage — but not require — employees to get flu shots. For example, a company can invite a healthcare professional to the workplace to administer flu shots at a discounted rate or free.

Employers may require its employees to adopt certain infection-control strategies, such as regular hand washing, coughing and sneezing etiquette, proper tissue usage and disposal, and even wearing a mask.

The ADA, Title VII, state fair employment laws and paid sick leave statutes are also incredibly nuanced. Moreover, it’s important to balance the mandates of OSHA, which require employers to maintain a safe working environment. Before taking any significant actions, employers should consult with an employment attorney or HR professional for guidance.

SOURCE: Starkman, J.; Dominguez, R. (4 December 2018) "It’s peak flu season. Here’s what employers should do now" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/its-peak-flu-season-heres-what-employers-should-do-now?brief=00000152-14a5-d1cc-a5fa-7cff48fe0001


How To Not Get Stuck With Other People's Work Over The Holidays

The holidays are a busy season. People are trying to finish up work before leaving for vacation. Continue reading this blog post for three tips that will help you to avoid being overloaded with work.


Few people find themselves happy when they are inundated with work on vacation days that had been planned in advance. The month of December is a busy month. People are trying to finish up projects before the holidays and leaving for vacation. Sometimes, finishing up a project involves dumping it or part of it onto someone else’s work plate, many times a junior employee or someone in a non-management position. You don’t have to feel helpless. Here are three tips that will help you to avoid being overloaded with work:

1. Plan ahead.

When you are approaching a time of year in which you know that many people take off from work, take time to plan ahead. Know when your deadlines are, break the work into chunks and get to work now. If you know that a particular colleague has a tendency to hand off work just before they leave for their vacation, inquire with them ahead of time to give yourself more time to complete the work. Stay on top of your work so that you have some room for projects that arise unexpectedly.

2. Distribute the workload among your teammates.

Just because you receive a work assignment does not always mean only you have to complete it. Work can be shared, and allowing others to take on some of the work is an important management skill. The higher you rise in your career, the more you will depend on others to support you in achieving work goals.

If you are part of a team, ask your manager if the work can be distributed among multiple people. The more you spread out the work, the less work each person has to do and the more efficient and productive each person can be.

3. Prioritize the work.

Not all work has to be completed now. Some tasks can be done later. Look at the work that has been passed on to you, and break the work down into individual tasks. Successful people prioritize. Can the tasks be completed after the holidays? If you are unsure, ask your manager or the person that passed the work along. Make no assumptions. Ask for information to make a decision that ensures the quality of the work product and that your vacation is not compromised.

Prepare yourself at work for the holiday season so you don’t get stuck with other people’s work. Plan ahead, share the load and prioritize. Leaders don’t work harder. Leaders work smarter. Be happy this holiday season. Work smarter, and demonstrate your leadership.

SOURCE: Blank, A. (4 December 2018) "How To Not Get Stuck With Other People's Work Over The Holidays" (Web Blog Post). Retrieved from https://www.forbes.com/sites/averyblank/2018/12/04/how-to-not-get-stuck-with-other-peoples-work-over-the-holidays/#2ce47b263006


8 Ways to Relate to Time as a Realist

Time optimists tend to get overbooked and overwhelmed when things don't get done in time, according to productivity and time management expert Julie Morgenstern. Read on for tips on how to be a better time realist.


Productivity and time management expert Julie Morgenstern believes people can be grouped two ways when it comes to time management: Time realists and time optimists.

Time realists consider how long things take and what is going on in any given day. Time optimists are guided by what they hope to get done.

Morgenstern argues that time optimists get overbooked and overwhelmed when things don’t, or can’t, get done in time. To help people be better realists, she offers these tips in The New York Times:

  1. Pause before the yes
    Think about how long a task will take and clearly let stakeholders know what’s possible, or what will have to be postponed to make a new priority happen.
  1. Plan for two days
    Look ahead and see how the puzzle of your next few days looks as you consider where critical tasks will fit in.
  1. Batch activities
    Your concentration threshold will help you divide your days by administrative tasks, creative ones, and fit in hobbies and socializing. Then, create mini-deadlines for the most dreaded tasks.
  1. Deal with email
    Set aside time for regular email maintenance. If it takes less than five minutes, reply and deal with it immediately. Drowning in old email? Sort unread emails by date, and simply delete the oldest.
  1. Avoid too many tools
    Pick the four communication platforms—including email, texts, phone and social media messaging tools—you can manage and only manage those.
  1. Set a timer
    Work on things you’d procrastinate on in timed intervals and don’t stop until the timer goes off.
  1. Pick a calendar
    Rather than flip between a paper or electronic calendar, pick one and stick with it. Then, add your to-do list to it.
  1. Carve out ”me time”
    The most productive people claim personal time and make it part of their schedule. Whatever it is you love to do, create time for it the same way you do the things you have to do.

Read More:

The New York Times It’s Time to Become a Time Realist

SOURCE: Olson, B. (6 November 2018) "8 Ways to Relate to Time as a Realist" (Web Blog Post). Retrieved from: https://blog.ubabenefits.com/8-ways-to-relate-to-time-as-a-realist


How AI can predict the employees who are about to quit

How can artificial intelligence (AI) predict which employees are going to quit? Employers are now utilizing AI to help predict how likely it is that an employee will stay with their company. Read on to learn more.


Tim Reilly had a problem: Employees at Benchmark's senior living facilities kept quitting.

Reilly, vice president of human resources at Benchmark, a Massachusetts-based assisted living facility provider with employees throughout the Northeast, was consistently frustrated with the number of employees that were leaving their jobs. Staff turnover was climbing toward 50%, and after many approaches to improve retention, Benchmark turned to Arena, a platform that uses artificial intelligence to predict how likely it is that an employee will stay in their job.

“Our new vision is about human connection,” he says. “With a turnover rate that’s double digits, how do you really transform lives or have that major impact and human connection with people who are changing rapidly?”

Since Benchmark started using Arena, staff turnover has fallen 10%, compared to the same time last year. During the hiring process, Arena looks at third-party data, like labor market statistics, combined with applicants' resume information and an employee assessment that will give them a better sense of how long a candidate is likely to stay in a role.

“The core problem we’re solving is that individuals aren’t always great at hiring,” says Michael Rosenbaum, chairman of Arena. “Job applicants don’t always know where they’re likely to be happiest. By using the predictive power of data, we’re essentially helping to answer that question.”

Arena isn’t interested in how an employee responds to assessment questions, he says. They’re much more interested in how employees approach the questions.

“What you’re really doing is your collecting some information about how people react to stress,” Rosenbaum adds.

For example, if an employee is applying for a housekeeping role, Arena may give them a timed advanced math question to complete — something they may never use in their actual job. Arena then studies how the candidate responds to the question — analyzing key strokes and tracking how the individual tackles the challenge. The software can then get a better sense of how an applicant responds under pressure.

Overtime, Arena’s algorithm learns from the data it collects. The system tracks how long a specific employee stays at the company and can then better predict, moving forward, whether other employees with similar characteristics will stay.

“Overtime they are able to sort of refine that prediction about those that are most likely to stay, or be retained with our organization,” Reilly says. “They may also make a prediction on someone who might not last very long.”

Reilly says he’s been encouraging hiring managers at the facilities to use the data given to them by Arena to take a closer look at the candidates the platform rates as highly likely to stay in their roles. Although it’s ultimately up to the hiring manager who they select.

“Focus your time on the [candidates] that are more likely to stay with us longer,” Reilly says.

For now, Arena exclusively works with healthcare companies. The platform is currently being used by companies like Sunrise Senior Living and the Mount Sinai Health System in New York. Moving forward, Rosenbaum says, they’re hoping to get into other industries, although he would not specify which.

Rosenbaum says Arena is not only focused on improving the quality of life for employees, but also for the patients and seniors that use the facilities. The happiness of patients, he says, is closely tied to those that are caring for them.

“Is someone who is in a senior living community happy? Do they have a positive experience? It is very closely related to who’s caring for them, who’s supporting them,” he says.

SOURCE: Hroncich, C. (15 November 2018) "How AI can predict the employees who are about to quit" (Web Blog Post). Retrieved from: https://www.employeebenefitadviser.com/news/how-ai-can-predict-the-employees-who-are-about-to-quit?brief=00000152-1443-d1cc-a5fa-7cfba3c60000


When Companies Should Invest in Training Their Employees — and When They Shouldn’t

A recent industry report revealed that U.S. companies spent over $90 billion on employee training and development activities in 2017. Read this blog post to learn more.


According to one industry report, U.S. companies spent over $90 billion dollars on training and development activities in 2017, a year-over-year increase of 32.5 %. While many experts emphasize the importance and benefits of employee development — a more competitive workforce, increased employee retention, and higher employee engagement — critics point to a painful lack of results from these investments. Ultimately, there is truth in both perspectives. Training is useful at times but often fails, especially when it is used to address problems that it can’t actually solve.

Many well-intended leaders view training as a panacea to obvious learning opportunities or behavioral problems. For example, several months ago, a global financial services company asked me to design a workshop to help their employees be less bureaucratic and more entrepreneurial. Their goal was to train people to stop waiting around for their bosses’ approval, and instead, feel empowered to make decisions on their own. They hoped, as an outcome, decisions would be made faster. Though the company seemed eager to invest, a training program was not the right way to introduce the new behavior they wanted their employees to learn.

Training can be a powerful medium when there is proof that the root cause of the learning need is an undeveloped skill or a knowledge deficit. For those situations, a well-designed program with customized content, relevant case material, skill-building practice, and a final measurement of skill acquisition works great. But, in the case of this organization, a lack of skills had very little to do with their problem. After asking leaders in the organization why they felt the need for training, we discovered the root causes of their problem had more to do with:

  • Ineffective decision-making processes that failed to clarify which leaders and groups owned which decisions
  • Narrowly distributed authority, concentrated at the top of the organization
  • No measurable expectations that employees make decisions
  • No technologies to quickly move information to those who needed it to make decisions

Given these systemic issues, it’s unlikely a training program would have had a productive, or sustainable outcome. Worse, it could have backfired, making management look out of touch.

Learning is a consequence of thinking, not teaching. It happens when people reflect on and choose a new behavior. But if the work environment doesn’t support that behavior, a well-trained employee won’t make a difference. Here are three conditions needed to ensure a training solution sticks.

1. Internal systems support the newly desired behavior. Spotting unwanted behavior is certainly a clue that something needs to change. But the origins of that unwanted behavior may not be a lack of skill. Individual behaviors in an organization are influenced by many factors, like: how clearly managers establish, communicate, and stick to priorities, what the culture values and reinforces, how performance is measured and rewarded, or how many levels of hierarchy there are. These all play a role in shaping employee behaviors. In the case above, people weren’t behaving in a disempowered way because they didn’t know better. The company’s decision-making processes forbid them from behaving any other way. Multiple levels of approval were required for even tactical decisions. Access to basic information was limited to high-ranking managers. The culture reinforced asking permission for everything. Unless those issues were addressed, a workshop would prove useless.

2. There is commitment to change. Any thorough organizational assessment will not only define the skills employees need to develop, it will also reveal the conditions required to reinforce and sustain those skills once a training solution is implemented. Just because an organization recognizes the factors driving unwanted behavior, doesn’t mean they’re open to changing them. When I raised the obvious concerns with the organization above, I got the classic response, “Yes, yes, of course we know those issues aren’t helping, but we think if we can get the workshop going, we’ll build momentum and then get to those later.” This is usually code for, “It’s never going to happen.” If an organization isn’t willing to address the causes of a problem, a training will not yield its intended benefit.

3. The training solution directly serves strategic priorities. When an organization deploys a new strategy — like launching a new market or product — training can play a critical role in equipping people with the skills and knowledge they need to help that strategy succeed. But when a training initiative has no discernible purpose or end goal, the risk of failure is raised. For example, one of my clients rolled out a company-wide mindfulness workshop. When I asked a few employees what they thought, they said, “It was interesting. At least it got me two hours away from my cubicle.” When I asked the sponsoring executive to explain her thought process behind the training, she said, “Our employee engagement data indicated our people are feeling stressed and overworked, so I thought it would be a nice perk to help them focus and reduce tension.” But when I asked her what was causing the stress, her answer was less definitive: “I don’t really know, but most of the negative data came from Millennials and they complain about being overworked. Plus, they like this kind of stuff.” She believed her training solution had strategic relevance because it linked to a vital employee metric. But evaluations indicated that, though employees found the training “interesting,” it didn’t actually reduce their stress. There are a myriad of reasons why the workload could have been causing employees stress. Therefore, this manager’s energy would have been better directed at trying to determine those reasons in her specific department and addressing them accordingly — despite her good intentions.

If you are going to invest millions of dollars into company training, be confident it is addressing a strategic learning need. Further, be sure your organization can and will sustain new skills and knowledge by addressing the broader factors that may threaten their success. If you aren’t confident in these conditions, don’t spend the money.

SOURCE: Carucci, R. (29 October 2018). "When Companies Should Invest in Training Their Employees – and When They Shouldn’t" (Web Blog Post). Retrieved from https://hbr.org/2018/10/when-companies-should-invest-in-training-their-employees-and-when-they-shouldnt