Employers helping their workers cope with experiencing a disaster will generally find that having an employee assistance program (EAP) in place is invaluable.
Natural disasters, such as hurricanes and earthquakes, cause extensive property damage, physical injuries and loss of life. The distress might not end there, however.
Mental health experts say that many victims of disasters experience post-traumatic stress disorder, depression and anxiety in the months following these events. The loss of loved ones, jobs, material goods and livelihoods are all traumatic experiences for victims, according to one Red Cross official.
An EAP is an intervention program designed to help employees resolve personal problems that might be affecting their work performance. Many employers make EAP services available to employees’ family members, as well.
The problems do not necessarily have to be related to natural disasters – health, marital, financial and parenting issues are also among the problems an EAP can address. However, the program can be especially valuable for an employee who has suffered significant losses in a disaster such as a hurricane, earthquake or wildfire.
After a traumatic event like one of these, an EAP can provide the employee with:
Counseling and other forms of emotional support
Referrals to sources of food, shelter and clothing
Emergency care and boarding for pets
Opportunities for charitable donations
Assistance locating loved ones
Community-based recovery resources
An employee feeling overwhelmed in the aftermath of a disaster can use these services to return a small amount of stability and normalcy to their life. They help take care of short-term concerns, such as finding a place to stay and care for children and pets, allowing the individual to focus on longer-term problems such as repairing or replacing the home and obtaining financial assistance.
These programs have great benefits for employers, as well. Happy and healthy employees are productive employees.
A study by the University of Warwick in the U.K. found that satisfied workers are 12% more productive and provide better customer service than their less happy peers. Employers who implement EAPs experience:
Reduced absenteeism
Fewer workplace accidents
Lower medical and workers’ compensation costs
EAPs also help managers to become more effective. They can help them develop skills in consulting with employees, managing workplace stress, maintaining drug-free workplaces, responding to crises, and helping employees achieve an appropriate work-life balance.
EAP options
Employers have several options for establishing EAPs.
They can run them with their own staff or outsource them to third party providers. Providers can be hired on a fee-for-service basis or for a fixed fee.
They can be arranged by single employers, groups of small employers banding together, or by unions. Some employers or unions even train employees to provide peer counseling to their fellow workers.
EAP providers should meet the standards set by the Employee Assistance Professionals Association. These include standards for program design; management and administration; confidentiality; direct services; drug-free workplace and substance-abuse professional services; partnerships; and evaluation of the program.
The takeaway
Even without catastrophic weather events, employees are subject to the stresses of day-to-day living, and their paths are often bumpy. Family members can develop substance-abuse problems, parents grow old and need care; unexpected financial shocks occur; and marriages often deteriorate.
By implementing an EAP, an employer can help make these problems, and the shock of a natural disaster, a little easier for their employees to manage.
EAPs can help retain good employees, make them more productive, and make their lives a little better. In turn, this can make a business more profitable and a better place to work.
More than half of employees regret the coverage decisions they make during open enrollment, according to a new study.
Part of the problem may be that the average employee spends only 30 to 60 minutes selecting their benefits during open enrollment, which typically lasts about two weeks in most workplaces, according to the study by financial service firm Equitable. For perspective, the average American spends 120 minutes a day on social media.
The findings in the study underscore the importance for continuing education and outreach on their benefits and providing your workers the opportunity to ask questions in a private setting.
The top reasons employees cited for regretting their decisions include:
25% said they failed to adjust their benefits to match their lifestyle changes.
20% forgot to make changes to their benefit selections by the deadline.
19% did not understand the options available or the benefits they selected.
It should be noted too that sometimes the regret comes after the plan year starts and an employee in a high-deductible plan, low- or no-premium plan has a health issue that crops up or an accident, and has to pay thousands out of pocket. At that point they may rue their choice, even though they would have paid more in premiums.
One of the more disturbing findings from the study is that nearly 25% of workers said they go to social media to educate themselves about employee benefits. The numbers were highest among Gen Z workers (43%) and millennials (37%).
On the other side of the spectrum, 67% of baby boomer employees and 60% of Gen X workers were more likely than younger generations to rely on information provided to them by their employer and benefits broker when making health plan and other coverage decisions during open enrollment.
How you can help
Employers can help their employees make smart health plan decisions by:
Not inundating them with lengthy educational materials. Often clear and concise materials are best, especially ones that use bullet points and infographics. Benefits experts recommend providing employees bite-sized information that can help them whittle down their choice.
The materials should give different scenarios for workers to help them decide on a plan, such as:
A 27-year-old single female employee with no health problems, spouse or dependents.
A 46-year-old married father of three young kids.
A 58-year-old divorced woman with high blood pressure and asthma.
Keeping the open enrollment period short. Many brokers will tell you that the longer the open enrollment period, the more likely it is that employees will procrastinate on choosing their plan(s) and rush at the last minute. For best results consider a two-week period, and a run-up that includes education and outreach.
Helping them prioritize the basics. There are a few areas that they should review to make sure they choose wisely.
Some areas they can focus on include:
Retaining their doctor — Even if you are offering the same plan as last year, it’s a good idea to tell your employees to check the plan to see if their physician or their kids’ pediatricians are on the list of providers. Health plans make changes every year, so it’s important to check.
Getting the financial balance right — Many people end up spending more up-front on higher premiums in exchange for lower out-of-pocket maximums and/or deductibles, when they shouldn’t.
A young, healthy person that rarely visits the doctor may be better off with a plan that has lower premiums and a higher deductible, which they will not likely reach.
Worst-case-scenario calculation — Your employees should understand the implications if they suffer a medical crisis. For a full perspective, they can:
Calculate the total premium they will pay for the entire year (their monthly premium contribution x 12), and add
Middle class families — those with incomes of between roughly $50,000 and $100,000 per year — are becoming increasingly reliant on workplace benefits to ensure their financial well-being in case of a disability or critical illness.
Simple health insurance is insufficient to carry the load. The loss of a breadwinner’s or caregiver’s financial contribution through death or disability is often devastating.
A recent survey by benefits provider Guardian indicates that families in this category are struggling when it comes to achieving their financial goals. Of those workers surveyed only half believe they would be able to manage if the household lost an income due to death or illness.
Workplace benefits are critical
According to Guardian’s researchers, the middle-market population is overwhelmingly reliant on the quality and breadth of the benefits they receive at work — over and above cash compensation.
Over 80% of middle-market respondents report that they got their health insurance, disability insurance and retirement plan all through their employer.
Meanwhile, six in 10 have no life insurance in place outside of the workplace. This means that the solid majority of working families are relying entirely on workplace benefits to see them through the death of a family breadwinner.
And in the event of disability ending a breadwinner’s income, the situation is even more dire: Only 7% of the middle market owns any kind of disability insurance protection, outside of what they are able to access via their employer.
Are life insurance benefits adequate?
For young families, the primary role of life insurance is to replace the income of a deceased breadwinner. But many employers cap life insurance benefits at $50,000 — the maximum figure that allows employers to deduct premiums as a workplace benefit under IRC 7702.
The actual need for many of these families is several hundred thousand to a million dollars, and occasionally more. That’s what it takes to replace the income of a worker who earns $50,000 to $100,000 per year until the children are out of college and a surviving spouse is taken care of.
A solution
One solution is to offer voluntary benefits to workers. These include a menu of benefits, such as:
Group life insurance
Group disability insurance
Long-term care insurance
Critical illness coverage
Often many of these benefits can be offered at little or no cost to the employer.
Premium costs are simply deducted from the worker’s wages and forwarded to the insurance company via payroll deduction. In this way, workers can purchase much more coverage and provide protection for their families — and it doesn’t cost the employer a dime.
In some instances, it can even save on payroll taxes. To learn more, call us.
By now you should be prepared and ready to go for your 2025 policy year employee benefits open enrollment. You should have all your plan documents and have prepared or held presentations for your staff to explain the benefits package and any major changes to plans that you offer.
Employees should be familiar with how to use the enrollment portal and who they should talk to if they have questions.
To ensure success, there are a few things you should do to make sure you maximize enrollment, that your employees have the correct materials and that you are in compliance with the law.
Take an active role — Most of the policy selection is done online, but that doesn’t mean you can’t support your employees and let them know you are there in case they have any questions or are confused about any aspect of the benefits package.
You should want all of your employees to choose the package that best fits their individual needs. To ensure they make the best possible choices and have a successful experience, motivate them to take an active role in their education by encouraging questions and showing them where they can find answers in the online enrollment platform.
Last-minute blasts — You’ve probably sent a few e-mail reminders to you staff, but most certainly some of them still missed those communications. Make sure you send a few extra blasts at different times of the week, like Tuesday at 10 a.m. and another on Thursday at 2 p.m.
You should also have all of your employees’ mobile phone numbers, and be sending them reminder text messages is a sure-fire way to get in front of the ones who may not be as diligent about monitoring their e-mail.
Double-check your plan materials — Do a final review of your plan documents for any necessary updates regarding member eligibility, plan benefits, new vendors and name changes to ensure that the current state of your benefits offerings is complete and accurate.
Also, do a final review of your summary of benefits and coverage (SBC) and your summary plan description (SPD) to make sure they reflect any changes from the prior year. This is crucial as both documents are required under the law.
The SPD may include the elements necessary to meet the requirements of the SBC, but it also needs to be a separate document that can be handed out with respect to each coverage option made available to the participants.
To account for the annual open enrollment window, double-check your open enrollment schedule, deadlines, documents and forms, coverage options and changes, phone numbers, and website and mobile information for contacting resources, statement of current coverage, and plan-specific summaries and rates.
Identify staff that didn’t enroll last year — To make sure you maximize participation and that nobody misses out, run a list of all your staff who didn’t sign up for benefits last year so you can approach them individually and convey the importance of securing health coverage.
While you’re at it, make sure that all of your new hires in the past year have also signed up for coverage and that you didn’t miss them when sending out reminders about open enrollment.
Check compliance with ACA — If you are an “applicable large employer” under the Affordable Care Act, meaning that you have more than 50 full-time or full-time equivalent employees, you are obligated under the law to provide health coverage to your staff that is “affordable” and covers 10 essential benefits.
There is a figure for what is considered affordable, which changes every year. For your plan to be considered ACA-compliant in 2025, it must not cost an employee more than 9.02% of their household income.
The takeaway
To ensure maximum enrollment it pays to plan ahead and also focus on educating your staff about the importance of their group health plan and why it’s so important to choose a plan that is right for them and that is within their budget in terms of premium-sharing and out-of-pocket costs.
The key regular communications and having an open-door policy so individual employees can ask questions in private.
A new study has found three out of four U.S. workers would accept a job with a slightly lower salary if it offered better health care and medical coverage.
The main driver in workers prioritizing benefits is the rapidly rising cost of group health insurance premiums and out-of-pocket costs, according to the study by Voya Financial.
Besides looking for better health coverage, there’s growing interest among employees for voluntary benefits that can buffer health care costs, like critical illness, accident and dental and vision insurance.
As we approach open enrollment season for policies incepting at the start of the year, the study findings provide food for thought as you try to balance your benefit offerings with employee salaries.
The general theme of the poll was that health insurance and out-of-pocket costs like copays, coinsurance and deductibles are having a real effect on many workers’ finances, and in particular, their ability to save for retirement.
Consider the following:
72% of workers surveyed strongly or somewhat agreed they would take a job with a slightly lower salary for better health care and medical coverage, including lower premiums and out-of-pocket costs.
51% said that high health care costs were having a major or significant impact on their ability to save for retirement.
51% said they would be more likely to stay with their current employer if it provided access to a health savings account (HSA).
51% said they would be more likely to stay with their employer if it provided access to voluntary benefit offerings, and
54% said they would be more likely to stay with their employer if it provided access to mental health benefits and resources.
The above bullet points have one theme in common: reducing the employees’ premium and out-of-pocket outlays.
The takeaway
As open enrollment approaches, consider holding information sessions to help your staff understand the true value the benefits you offer can provide.
Voya Financial found that 75% of workers surveyed strongly or somewhat agreed they were interested in receiving support to maximize their workplace benefits dollars across their:
Health insurance,
HSAs,
Voluntary benefits, and
Retirement savings.
For example, “Many individuals may not realize that voluntary benefits can help lessen the financial impact of a covered event such as an illness or accident and can potentially reduce the need to tap into a retirement account for any out-of-pocket medical or other expenses,” said Christin Kuretich, vice president of supplemental products at Voya Financial.
With that in mind, offering benefits like critical illness or accident insurance can provide a safety net in case of one of these events hits one of your staff.
To better explain benefits to your staff, providing training, individual guidance and literature that explains how best to maximize their benefits. Importantly, employees are increasingly interested in digital tools (like apps or websites) that can provide tools and advice to help them make decisions related to health care, workplace benefits and retirement.
Finally, HSAs can also reduce an employee’s total costs and also help lower their taxable income. HSAs are accounts to which workers contribute with pre-tax funds and then reimburse themselves for out-of-pocket medical costs. Those funds are also not taxed.
With 2025 just a few months away, it’s important that small employers understand their group health insurance reporting obligations under the Affordable Care Act as they changed at the start of 2024.
Before 2024, only employers that sent out 250 or more Forms 1094-B/1095-B and 1094-C/1095-C were required to file them online with the IRS. But since early 2024 (and affecting the 2023 tax year), employers filing 10 or more ACA reporting forms have been required to file electronically.
It’s important that you understand your filing obligations to avoid fines that can quickly add up.
Here are the deadlines for 2025
Meeting the filing deadlines for Forms 1094-C and 1095-C is critical to complying with ACA requirements. Here are the deadlines for next year:
Jan. 31, 2025 — Employers must by this date have sent Form 1095-C to all of their full-time employees, who must supply the form to the IRS when they file their taxes.
Feb. 28 — This is the deadline to file Forms 1094-C and 1095-C by paper with the IRS for the few employers who are still eligible to do this.
March 31 — This is the deadline to file Forms 1094-C and 1095-C electronically with the IRS.
Filing electronically
You can file your forms electronically on the ACA Information Returns (AIR) Program, which is run by the IRS. This page includes all of the resources and guidance you need to understand and use it.
Hardship waivers
Employers can request a waiver for filing electronically if they can prove that doing so will cause an undue hardship on them or if it goes against their religious beliefs. Employers must submit their waiver request at least 45 days prior to the due date for returns by using this form.
Penalties
Employers who offer their workers health insurance and who fail to file the ACA forms electronically despite being required to do so (and if they don’t have a waiver) can be subject to a fine of $310 per return that was not reported electronically.
There are also other penalties regarding ACA reporting forms:
Failure to file correct information on a form: $310 per return for which the failure occurs. The maximum penalty an employer may incur under this penalty is nearly $3.8 million per calendar year.
Failure to provide a correct information return or payee statement: $310 per return for which the failure occurs. The maximum penalty that may be incurred is nearly $3.8 million per calendar year.
