Pharmacies, Big Pharma, and Rising Prescription Prices

June 28th, 2016 by

The post below is a guest blog from Steve Byrd who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

Rising health costsA key trend among medical plans lately has been the move away from traditional pharmacy tiers. In the traditional model, generics — regardless of cost — reside under the least expensive copay tiers on your medical plan. In contrast, brand- name medications reside under the higher, more expensive copay tiers.  For many years this model was the norm, and most consumers became very familiar with it.  However, continued pressure to reduce cost has forced insurers to re-evaluate this traditional view.  It is expected by some, that by the year 2024, pharmacy costs will equal half of our overall medical costs.

Many brand name medications are coming off of their patents, creating opportunity for generics to evolve.  Traditionally, these generics have offered great savings over their brand name counterparts. However, many of generics are now entering the market at prices much higher than historical levels, creating new pressure on insurers to hold down costs.

In response to these increasing costs, insurers are re-evaluating their pharmacy tiering.  Generic medications are being treated no differently than brand name medications; These drugs are being tiered based on their overall cost regardless of their designation as a brand or generic medication.  Pharmacy pricing changes are catching many people off-guard.  They don’t understand why their generic medication, which used to be offered in a more affordable tier on, might now be Tier 3 or Tier 4 on their carrier’s formulary.  Consumers are having to work even harder to understand their carrier’s pharmacy benefits. They are having more direct conversations with their providers and pharmacists to try to minimize their out-of-pocket costs, which are increasing with no end in sight.

If insurance carriers are going to be able to offer competitive priced medical plans, gaining better control over rising pharmacy costs is critical.  Pharmacy expenses account for a significant portion the average person’s overall medical expenses, and both consumers and carriers are feeling the pain.  One insurance carrier is even suing its Pharmacy Benefit Manager for $3 billion over questioned pharmacy charges.

Fortunately for consumers, there are many new Rx tools popping up that can help members navigate their benefits. Goodrx.com and healthiestyou.com are good examples. A recent Consumer Reports article provides additional guidance on ways consumers can save on pharmacy costs. Consumers also need to evaluate options at their local pharmacies, as they can often find some of the higher priced generics offered at lower costs through a local pharmacy’s prescription plan.

As healthcare spending continues to increase, and pharmacy costs continue to become a larger portion of the cost, more pressure will be applied towards controlling pharmaceutical costs. Consumers will continue to see changes to their pharmacy benefits and their carriers designated carrier’s prescription formulary.

 

Recruiting is not rocket science, or is it?

June 21st, 2016 by

recruiting_the_bestPerhaps you’ve heard the name Elon Musk. He’s got quite a résumé. Musk is the CEO of SpaceX, an American aerospace manufacturer and space transport services company. His company builds rockets that send people and cargo into space.  Musk is realizing his vision at SpaceX by building simple and relatively inexpensive reusable rockets that go into space multiple times. He hopes to achieve turnaround time capabilities that are similar to commercial airliners.

Oh, by the way, Musk is also the CEO and product architect of Tesla Motors and cofounder of PayPal.

I tell you this because of how Elon Musk views the importance of hiring great talent. Musk’s recruiting strategy at SpaceX is to demand the best person on the planet — whether they were there to build a rocket or serve ice cream on campus.

Dolly Singh, SpaceX’s former Director of Talent quoted Musk as saying, “Find me the single best person on the freaking planet, then convince me why out of how many billion people on the planet that this is that guy.”  Singh continued, “And he does that even if it’s the cook. When we built a yogurt booth inside of SpaceX, he said, ‘Go to Pinkberry and find me the employee of the month, and I want to hire the employee of the month.’”

The point is, Musk as one of the most innovative and successful business leaders in the world, is still laser-focused on hiring great talent. He understands that bringing in mediocre talent will likely prevent him from realizing his dreams.

The late Steve Jobs, cofounder, CEO and Chairman of Apple Inc. believed in hiring A players.  According to Jobs, “A small team of A+ players can run circles around a giant team of B and C players.”  A-players are motivated, engaged and creative. They are performance-driven and have high expectations for themselves and for others. B and C-players, on the other hand, often do just enough to get by and to be paid for it.

We can learn a valuable lesson from Musk, and Jobs…Settling for ‘so-so’ talent will likely get you ‘so-so’ results. So the next time you are looking to hire someone, think like a rocket scientist and hire only the best.

CAI helps more than 1,000 North Carolina employers with their HR needs including talent acquisition process or strategies.  Contact CAI today!

Tom_Sheehan-circle

 

Tom Sheehan brings 20+ years of extensive, broad based strategic, tactical and practical HR experience to CAI’s Advice & Resolution team.  He advises HR and other business leaders on talent management, organizational effectiveness, employee engagement, M&A’s, and employee relations.

Why Top Performers Choose to Leave

June 14th, 2016 by

why_employees_quitDuring a declining economy, new hires for organizations would often come from an increasing pool of unemployed workers. Now, with an improved economy and the job market on the rebound, the paradigm is shifting and new hires are being recruited from other organizations.

If you are on the recruiting end, this is excellent news. Your candidate pool that may have consisted of mostly unemployed workers just increased to include workers who may already be working in the very role you are seeking to fill – just for someone else currently. However, you could find yourself on the losing end of that equation if it is your employee who is being recruited.

As the economy and job market continue to gain strength, top employees who were once too concerned about security and doubt to leave their job are now reconsidering their position and their level of overall job satisfaction. Restored confidence in the economy is fueling confidence in their ability to improve on their current position. Also, your competitors are using the same tools you are to identify and actively pursue ordinarily passive candidates and recruit them to a better opportunity. Recruiters are getting calls from employed workers, at good companies, making good money, doing good work – and ready for a change.

Who are these employees, and why would they entertain leaving for another position at another company? What can be done to counteract this problem? According to a Forbes survey, the top five reasons seemingly satisfied employees leave a company are:

Trust

The number one reason employees leave their current employer is a lack of trust. This could stem from earlier cutbacks in pay and/or benefits, layoffs or other measures made necessary by a declining economy. If an employee is unhappy with the way in which a particular remedy was handled, or if they feel they are being kept in the dark, they begin to wonder if they will be next. Reach out to employees and establish a solid two-way path for communication. Be sure they are informed of company initiatives and the reasons behind them. Ask for their opinions, input and feedback. Make them feel a part of the organization and its success.

Recognition

Employees often leave if they feel unappreciated or experience a lack of recognition for their accomplishments in their current role. In an economy that has dictated doing more with less, many top performers have been asked to go above and beyond their job description. They expect and deserve recognition for pitching in and doing what is necessary during these last few difficult years. Make certain your employees are recognized for their contributions to the company’s success. Other employees will see this public recognition and become inspired to heighten their performance as well. Be sure the recognition is meaningful and for something measurable. Savvy employees will see through false recognition and be suspect of it.

Politics

Some employees tire of the internal politics within their company and begin to seek another company to work for. All organizations with an org chart are going to inherently have a certain amount of internal politics, so it stands to reason any new company they join will also have similar issues. The driving force behind their dissatisfaction is not so much the politics, but the fact it interferes with their being able to do their job to the best of their ability. Top performers are top performers because they choose to be. Anything that interferes with satisfying their internal drive becomes an issue. Internal politics will tend to ripple through your workforce and cause performance to drag. Isolate your workforce from this to the greatest extent possible. Make sure corporate decisions are communicated well and are backed by valid, understandable logic. Political maneuvering will undermine an organization’s ability to move forward as a single unit.

Manager

Sometimes people just do not get along. It could be a mismatch in personality or a difference in management style. Employees will get frustrated with their manager and may start to seek opportunities elsewhere. The difference between this reason and the other reasons in this list is there are often warning signs associated with this one. Frustration of this type tends to build over time. Casual, confidential conversations with employees and managers on a routine basis will usually uncover these issues before they become a reason for voluntary turnover. Act early and work with parties on both sides of the issue to develop an acceptable solution for everyone involved.

Inflexibility

More and more organizations are embracing flexibility within the workforce. Telecommuting and flexible work schedules are popping up as recruiting incentives everywhere you turn. Employees, like everyone else, want what they do not currently have that others have. If your employees are asking for this from your company and other employers in your area of similar size and industry offer it, be prepared to lose some of your top talent. Take special note of what your competition for talent is implementing and adopt similar incentives if they can work within your business model.

Although these are the top five reasons employees voluntarily leave their current position, there is one primary reason that is not listed here. One of the biggest reasons employees leave is because business leaders often fail to understand why employees leave. Employers go to great lengths and follow detailed processes and procedures when recruiting and onboarding new employees. During their tenure with the company, employers reach out to employees at least annually or semi-annually to evaluate their performance, praise accomplishments and recommend improvements.

Several forward-thinking companies have begun the practice of conducting periodic “stay interviews.” It only makes good sense to interview your best performers while they are working for you, rather than only gain their honest feedback when they are on their way out the door.

So, why not schedule casual interviews with the best performers and those who have the highest potential within your organization? Find out what is on their mind, as well as any issues or concerns they have. Ask about ideas they have regarding the corporate culture or even improvements in processes, policies or production. Most importantly, apply what is learned during this conversation where applicable and avoid voluntary turnover.

If you have questions about how CAI can help you with Talent Acquisition and Talent Management,  please contact a member of CAI’s Advice & Resolution Team.

renee

 

CAI Advice & Resolution team member Renee Watkins is a seasoned HR professional with a diverse background in Human Resource. Renee provides CAI members with practical advice in a wide-range of human resource functions including conflict resolution, compliance and regulatory issues, and employee relations.

HR Lessons From the Garden

June 9th, 2016 by

I enjoy gardening, beautiful flowers, and being in the fresh air outdoors.  As I was weeding my flower bed this weekend, I thought about how the principles relate to HR.  At the time I planted the flowers I bought, they looked beautiful (although they were small and just beginning to bloom).  Over time, instead of growing and prospering, they began to look weak and like they were struggling to survive.  Weeds had crept in the garden, and were draining the nutrients from the flowers.  That is when I thought about the analogy to what can happen in business.  Take a look at what happens from a different perspective.

Recruitment and Selection

Talent_ManagmentWhen you go to the garden shop or farmers market, there are so many beautiful flowers that it is hard to decide which to buy.  What should be considered?   At garden shops, plants have tags that identify what environment they need to thrive: amount of sun, amount of water, heat or cold tolerance.  If you don’t consider the needs of the plant and the environment you will put it in, you won’t get the results you desire.  The same for employees.  It is important in recruitment and selection to understand the needs of the person and what environment works best for them, and to share honestly what your expectations and culture are for optimal results.

Culture

Just as you need to determine the conditions that will help a plant to thrive, applicants need to understand the culture of your company, the management style, opportunities for growth, and communication flow within the company.  Culture fit is very important, and many argue it is most important.  You can teach employees many things but you can’t teach fit.  You can take a thriving plant and put it in a toxic environment and it will wilt and falter.  Interviews should include questions about the position/company/manager thus far that the employee has considered the best and why.  Assessments can also help in determining culture fit.  Someone who is an idea person and wants to contribute and share ideas for process/product improvement will not be happy in a company that is top down management unreceptive to employee input.

Orientation

Once you know the needs of the plant and have purchased it, place it where it can bloom best.  That means providing proper orientation.  It needs proper soil, water, plant food and more attention as it gets oriented to the new surroundings.  Likewise with new employees.  It may be helpful to have an employee assigned to help orient them to where things are, who to go to for various issues, and just to orient them to the day-to-day.  We sometimes forget that things we take for granted everyday will be new and strange and take time to absorb for new employees.  Identify expectations early on.  Employees, like plants, that get off to a good start are more likely to thrive.

Coaching/Training

The work doesn’t end after orientation.  Plants need ongoing attention.  Sometimes plants may need pruning to help them grow better.  Others may flourish and need a trellis to support their growth. Each is unique, just like employees. Supervisors need to be trained to recognize that one size doesn’t fit all.  Some employees may need more guidance in their development.  We need to help supervisors understand the important role they have in recognizing the uniqueness of each employee and giving appropriate feedback, coaching, training, development and pruning.  Sometimes, employee failure can be attributed to supervisor failure; and in those cases, the supervisor should be held accountable as well.

Diversity

Have you noticed that gardens that have different types of plants– various sizes, shapes, textures, and a variety of colors and leaf structure, are more pleasing to the eye than those that are all the same?  Diversity can inspire new ideas.  And since our customers and our world are diverse, we need diversity to thrive.

Life Cycle

Some plants (perennials) come back year after year.  Annuals only last one season, even with the best of care.  Hopefully you have more perennials in your workplace than annuals. But we all have some annuals (sometimes quarters).  Sometimes they just don’t thrive in the environment.  Sometimes we only hire them for a season for projects and then they move on.  In other cases, they grow stronger, develop new branches and flowers and someone else admires the attributes and wants to acquire them.  There is a life cycle for employees.  For some, you may make the decision that despite your best efforts, they are not a fit for your company.  Sometimes, even with your best efforts at describing the job and your culture, and trying to ascertain what the employee has to offer, what they need, and under what conditions they thrive; you determine it was a bad decision.  It happens. Sometimes the beautiful plant that looks healthy and has the most blooms can have underlying aphids (pests) that you can’t see that will eventually destroy the plant.

Keep in mind that even perennials that come back every year need attention: fresh soil, weeding, water, mulch.  Don’t take your perennial employees for granted.  They still need nurturing and opportunities for growth, as well as recognition for jobs well done.

Weeding

And lastly, we all know that a garden will not flourish if is overrun by weeds.  As hard as I try to prevent weeds from even starting, they eventually creep in to the garden starting small.  If I don’t deal with the weeds, or wait too long to start dealing with them, I will have lost many beautiful flowers.  The same holds true at work.  Whether your “weeds” are bad fits, or can’t do the jobs you’re asking them to do, or have lousy attitudes, they will slowly take over and drive out your good employees, much like kudzu.  Don’t let the kudzu take over your thriving workplace.  Avoid the many reasons we find to not deal with weeds at work…lack of time, fear of a suit, trying to be “too consistent,” poor managers, etc.

I hope taking a look from a fresh perspective gives you some inspiration to work in your garden…at home and at work.  For over 50 years North Carolina employers have trusted CAI to be their #1 HR partner.  Learn how we can help you too!

Joint Pain in the Workplace

June 7th, 2016 by

The following post is by Bruce Clarke, CAI’s CEO and President. The article originally appeared in Bruce’s News & Observer column, The View from HR

Can an employee work for two employers at the same time?

The Federal Court of Appeals in Richmond just decided how easy it is for someone to be a “joint employee” of two employers (Butler v. Drive

Bruce Clarke, President and CEO

Bruce Clarke, President and CEO

Automotive). The case involved whether a temporary service employee (Ms. Butler) was also employed by the manufacturer where she was assigned.  Could she sue that manufacturer for sexual harassment and termination under laws protecting only employees?  The court said yes.

Most courts say if both entities have enough control or economic connection to the individual, (s)he is employed by both.  This Appeals court fashioned a broad, hybrid test for joint employer status including whether each had some power to hire, fire, or supervise in a meaningful way, and where/how the work takes place compared to regular employees.  In my view, nearly all extended work placements through temporary services (involving hiring by the service and some training/supervision by the customer or both) create joint employers.

A similar issue arises with direct hired contract workers.  Some employers use an in house group of contract workers to handle fluctuations in volume or to serve as a pool for future full-time hires.  Whether temp or direct, a special group of workers is created who do not enjoy the same working terms of regular employees.

There are many good reasons to use long-term temporary and contract workers, but these challenges are often ignored:

Unintended Consequences

Lawsuits, injury claims and expensive benefits make full-time employee status costly.  Some employers manage “headcount”, risks and costs by restricting full-time hires, preferring either part-time employees or other solutions such as direct contractors. It is just not that easy.

By substituting significant, extended work from these temporary and contract workers, employers may avoid one set of costs and create a new, unbudgeted set of costs.  If we could reliably reduce the extra costs of employing people just by calling them non-employees, then none of us would work directly for an employer!

Employee Relations

If we expect the contractor/temp group to be happy with their non-employee status long term, we might be dreaming.  Too often, managers treat the contract group as expendable.  “Just let them go” some say, rather than address problems.  The same physical separation, different uniforms and procedural techniques used to prove these workers are NOT employees may in fact cause serious dissatisfaction . . . without establishing the desired legal separation!

Poor (or zero) onboarding, second-class status, ignoring complaints, little communication about next steps and limited performance feedback are common problems.  Remember, despite efforts to mechanically avoid employee status, the pressures of work and output usually confuse the worker’s status.

The costs of hiring regular employees can be managed and the risks contained.  When an employer is surprised to learn after a claim is filed that the law views it as an employer of temporary and contract workers, it is too late to prepare or insure.   Employers using these relationships as long term solutions should carefully assess the total costs.

No Cost / High Impact Summer Benefits to Keep Employees Engaged

June 2nd, 2016 by

During the winter months, when the weather outside is cold, gray and gloomy, employees typically welcome the warm glow of a well-lit and heated Summer_benefits_for_employeesoffice environment.  Your workforce is anxious to get into the office, grab some warm coffee and get to work. They are less likely to leave the warmth of the building for lunch or to take time off from work in order to enjoy outside activities.

As the seasons begin to change and the weather warms, focus begins to shift a little more toward the “life” side of the work-life balance equation.  Employees will tend to arrive at work a little later on a beautiful morning, take longer lunch hours and may leave earlier than usual to get home and get a few things done before the daylight ends.

As an employer, should you do anything about this phenomenon?  Is there anything you can do?  Absolutely.  You can acknowledge this important balance for employees and demonstrate your awareness of the seasonal focus shift by offering some additional benefits for the summer season.  Such benefits will cost you nothing at all.

Start by making a list of possible benefits you could offer during the summer months, making sure you take into account any negative impact to productivity. Every business is different. There will always be things you would like to offer, but simply cannot due to the needs of the business.  Share your list of potential benefits with your workforce to see what your employees are most interested in before making your decision.  Here are a few to start thinking about:

Summer / Flexible Work Hours –

Many organizations are shifting their measurement of productivity away from counting the number of hours an employee works, and looking instead to answer the question “Is the work getting done?” Companies that have adopted this mentality with regards to employee work ethic find it easier to implement a more flexible work schedule.  Such schedules allow employees to stray from the normal 9-5, and work instead an 8-4 or 10-6 schedule.  Some organizations will shift to a 35-hour workweek during the summer months, allowing employees to pick a day of the week to leave at lunch. Some offer 4, 10-hour days allowing some employees to be off on Friday and some on Monday for a longer weekend.

Casual Dress –

In many of the high-end tech companies, casual dress every day is the norm.  However, the majority of large corporations still adhere to a specific, non-casual dress code during normal business hours.  During the summer months, some organizations will implement “casual Friday”, allowing employees to arrive at work in jeans or even shorts, so long as their attire is in good taste and appropriate.

Team Building –

Providing a planned activity for an entire team or department is one way to get everyone outside and still benefit the group as a whole. Morale before the event is high in anticipation.  Morale after the event is high having participated.  Going to a “fun park”, bowling, or even a catered BBQ picnic on the grounds can be used to show employees that you are aware of how difficult it is to stay focused when it is nicer outside than inside while demonstrating appreciation for their work and contribution to the organization.

Employee Garden –

If you have the space for it at your facility, you would be surprised at how many employees enjoy working in an actual garden.  There are many fruits, vegetables and herbs that can be grown during the summer months.  The opportunity for some of your employees to take a few minutes out of their day and tend to a garden can be a huge benefit.  Start small and it will grow to be larger each year as more employees get involved.

Employees desire separating their personal and professional life.  When the employer demonstrates their appreciation for the same, employees feel more appreciated. They are happier, more engaged, more productive and typically more committed to staying with their employer for a longer period of time.

renee

 

CAI Advice & Resolution team member Renee Watkins is a seasoned HR professional with a diverse background in Human Resource. Renee provides CAI members with practical advice in a wide-range of human resource functions including conflict resolution, compliance and regulatory issues, and employee relations.

18 Tips for NC Employers to Reduce Unemployment Costs

May 31st, 2016 by

Employees in North Carolina who lose their jobs through no fault of their own are eligible for unemployment insurance benefits if they worked and reduce_unemployment_costs had sufficient earnings in the base period, and are actively looking for work.  Employees who are terminated for misconduct are disqualified for the duration of the unemployment period.  While it may appear that employers have little control over unemployment decisions and costs, there are steps that you can take to manage the cost of your unemployment insurance and the outcomes of your hearings.

  1. Hire the right people.   Many unemployment problems stem from hiring the wrong people. Screen job applicants for skills, experience and training required for the job.  Present candidates with a realistic picture of the job and company culture.  Conduct assessments to assist in determining job fit. Do background checks.
  2. Provide onboarding, training, and a work “buddy” to help mentor the new employee for a successful start.
  3. Ensure that employees acknowledge in writing receipt of the Employee Handbook that outlines policies that will guide their employment.
  4. If you make a hiring mistake (everyone does at some time), you are an experience-rated employer, and the employee lacks the skills to perform the job, terminate within 100 days of hire and request non-charging.
  5. Request non-charging if the reason the employee left was because of domestic violence or military spouse relocations.
  6. Train managers on providing and documenting performance feedback to employees.
  7. Train managers on documenting policy violations and disciplinary actions in a timely manner when necessary, and how this can impact unemployment claims.  For the employer to prevail on a claim for discharge for failure to perform work duties, there must be at least three performance warnings in the 12 months prior to termination.
  8. Conduct employee opinion surveys to identify and resolve workplace issues, engage employees, and increase retention.
  9. Respond promptly (within 14 days of receipt of NCUI 500AB) to DES with detailed documentation to avoid penalties for failure to respond timely and/or providing inadequate information.
  10. If the employee was terminated for misconduct and/or failing to follow established company policies or procedures and the initial DES decision is for the employee, appeal. (See other reasons that disqualify the individual for misconduct).
  11. Review charges to your account.
  12. Advise the DES if a former employee refuses a job offer.  (Even if you are not the base period employer, some company is).
  13. Upon receipt, review the NCUI 551 form that is sent to each base period employer.  Verify that the employee worked for you (check name and social security number), and that dates of employment and earnings are correct.
  14. When work is slow, offer employees the opportunity to volunteer for unpaid personal time off, consider temporary pay reductions, and other measures to postpone or avoid a layoff.
  15. When permanent layoffs are unavoidable, consider what assistance you can afford to help employees with locating other jobs (resume writing, outplacement assistance, calling other employers regarding former employee availability and skills).  The sooner former employees find employment, the lower your unemployment costs.
  16. Report and pay unemployment taxes promptly to avoid penalties.
  17. Report unemployment fraud. NC Department of Commerce – Division of Employment Services
  18. Support the Employers Coalition of North Carolina (ECNC) in efforts toward unemployment reform.  http://www.ecnc.us

    If you have questions about reducing your company’s costs associated with unemployment, let us help.  Visit CAI to learn more about how we partner with NC employers to grow and manage their HR departments.

Creating a Consumer Experience for Candidates and Employees

May 26th, 2016 by

We are all aware of the changing dynamics in recruitment, employment and retention.  Companies should think of potential applicants and employeesRecruiting_and_Retention as consumers and create an experience that meets the candidate/employee needs as well as company needs to attract and retain the talent they need.

Technology, globalization, and the increased demand for top talent have changed the workplace landscape.  People can market themselves and access  information on companies and job opportunities to “shop” for what best aligns with their desires for organizational fit and personal growth.  That makes it more important than ever to think of candidates/employees as consumers and to make their experience a “delightful” one.

We have heard a lot recently about transparency.  Candidates searching for job opportunities want to learn as much as possible about potential employers up front.   Social media has made it easier for candidates to search for information on prospective employers (and vice versa).  What information is available to candidates online regarding your company from an employee feedback, social responsibility, and culture, etc. perspective?  How do you manage your organization’s social media profile?

After putting the best foot forward to hire and on-board top candidates that are the best fit for your organization, the consumer efforts shouldn’t stop here.  Treating employees as consumers and being interested in their aspirations and needs supports efforts to retain and engage employees.

According to Steve Lopez, Manpower Group, Companies talk about retention, but the culture does not always support that.  The rewards, measurement, and work environment often support retaining people in a job rather than retaining people within the organization. He proposes a consumer model for employee retention with the following components:

  • The User Experience – what are the goals, objectives and motivations for considering the job and staying with the company?
  • Content – Do you openly share the company culture, job content and expectations, opportunities for advancement and growth?
  • Functionality – What systems are in place to meet the user needs on a day-to-day basis in terms of exchange of information to support organizational needs as well as employee needs (two-way communication, receptive to employee feedback/suggestions, development plans)?
  • Interaction/Information/Navigation – Make resources available throughout the employee/consumer experience to provide what employees need to do their jobs.  This starts with the on-boarding process to educate new employees about the organization, to inform employees how to best obtain responses to their questions, inform them of tools they need and how to access various resources, etc.
  • Visual Experience – Does the desired visual experience for the employee reflect your company brand, web presence, culture, and the physical work space?

By approaching your employees as consumers you can create a world class experience and culture for your entire workforce, which enables positive business results. CAI can help with your company with talent acquisition, talent management, developing a better workplace and more.

(Source: Rethinking Retention, Steve Lopez, Manpower Group)

What Employers Should Know About Section 1411 Certifications

May 24th, 2016 by

The post below is a guest blog from Jay Lowe who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

The Employer Mandate is perhaps one of the most nerve-wracking parts of the Affordable Care Act (ACA) for large employers: those employing morehcw than 50 full-time equivalent employees, or FTEs. (What’s an FTE? Find out here!) Many large employers understand that they can be fined with a tax penalty if they don’t provide coverage that meets the minimum requirements or is deemed unaffordable for their employees. In the event that coverage does not meet these requirements and is not affordable, employees may be eligible for a premium subsidy when purchasing individual coverage through the government’s healthcare marketplace (the Exchange). This subsidy eligibility is what triggers the penalty back to the employer.

Section 1411 of the ACA establishes the procedures for determining an individual’s eligibility for subsidies from the Exchange. A Section 1411 Certification is the notice to an employer that an employee has enrolled in a qualified health plan through the Exchange and been provided a subsidy. If you are an Applicable Large Employer (more than 50 full-time equivalent employees) that receives one or more of these notices, this could mean that you are facing a penalty from the IRS as part of the Employer Mandate provision of the ACA.

Employers should be prepared to see these certifications and have a plan of action in place once they do. For more details on the Section 1411 Certification, see here.

Dealing, Appealing, and Other Important Things to Know About 1411 Certifications

First, remember that these certifications are not penalty notifications from the IRS. They are simply informational, letting you know that an employee has received a tax credit and named you as the employer as part of their application process. You can expect a formal penalty notice from the IRS to follow; however, the notice will give you the ability to appeal if your health plan does meet all of the Employer Mandate requirements. By appealing, you can potentially stop the penalty process from the IRS.

It is important to educate the employees who will be handling these notices within your organization. This is a new form and something that most will not be familiar with. They need to know what to look out for and be prepared for what to do. If your health plan does meet minimum essential ACA requirements, make sure the employees in question understand that they will need to act quickly to appeal these notices; you will only have 90 days from the date of the notice to file your appeal.

In the event that your plan is not meeting all of the requirements of the Employer Mandate, look out! You’ll probably have to pay a fine. The Section 1411 Certification will alert you to your penalty liability. Only employees who receive a subsidy in the Exchange can trigger a penalty for you, and these notices will tell you exactly who those people are. As a best practice, employers should keep track of what their total exposure could be prior to receiving the notices. Their final liability could be less than what they are expecting.

With the delay of the Employer Mandate reporting requirements, it is likely that employers will not begin to see Section 1411 Certifications until late 3rd quarter or 4th quarter of 2016. That gives you plenty of time to educate your people, prepare an action plan, and learn all about 1411 Certifications!

Supreme Court and Technical Flaws of Background Checking Paperwork

May 19th, 2016 by

The alarm bells for employers have been sounding for the last few years about getting your federal Fair Credit Reporting Act paperwork in order.  The proliferation of class action lawsuits around Printproper release forms and the pre-adverse and adverse action paperwork has cost companies millions of dollars.  In large part, the class action suits have been driven by a Ninth Circuit Court (the federal court that covers California) ruling that identified that technical flaws in your company’s background checking documents was “injury” enough to have standing.  This change in the barrier to having standing in federal court made the creation of class action lawsuits very easy to file, and to win.

The new six to two ruling sends the matter back to the Ninth Circuit, but essentially states that in many cases the plaintiffs have to show some injury beyond a technical flaw in the company’s process.  Will this ruling abate the rising tide of FCRA driven class action lawsuits?  Only time will tell.

Making critical hiring decisions for your company is a huge responsibility. Not only is it critical to the success of the company, but also the safety of your employees and getting it right isn’t easy. Last year, approximately 90% of businesses in the US did some sort of background check on prospective employees to help protect their companies against the significant liabilities of negligent hiring lawsuits.

Unfortunately, the number of businesses out of compliance with the latest background checking standards grows every year and regrettably, most hiring professionals do not realize it until they are named in ever more frequent class action lawsuits.

Chances are that you are ordering background checks, but are you compliant?

Background checks compiled by third parties, such as CAI’s detective agency*, are covered by the federal Fair Credit Reporting Act (FCRA).  The FCRA covers more than financial records; it also includes reports that research criminal records, employment records, education information, driving records and even something as simple as an address history.  The FCRA was broadened in scope in 1997, and is designed to provide a safeguard for the applicant who has an adverse action taken against them based upon the results reported in the background investigation.  That is, if the applicant is denied an employment opportunity in whole or part by information contained in a background check, he or she has the right to view the information and dispute the record.

How do you comply?

  1. Have a permissible purpose (employment).
  2. Obtain written consent from the applicant.
  3. Run the check through a reputable third party Consumer Reporting Agency (CRA), like CAI.
  4. Look at the results and decide if the applicant fits the needs of your company:
    1. If the record is clean, keep the authorization form in a secure place.
    2. If the applicant is not hired due to something uncovered in the background check, then you should do the following:
      1. Mail a copy of the report, and
      2. a summary of the applicant’s rights under the FCRA, and
      3. a pre-adverse action letter [that includes the third party’s (CRA’s) name and contact info to the applicant].
      4. If your company is in North Carolina, you also want to send a copy of the NC Security Freeze to the applicant.
      5. After a reasonable amount of time (around five business days) you want to mail the declination letter to your applicant. During this time you should hold the position to give the applicant a chance to respond.
      6. After the “reasonable time” you may hire the appropriate applicant, thus filling the position.
      7. Store the rejected applicant’s signed written consent for six years.  SHRM recommends that you store the negative report for two years.

Hiring can be very stressful and CAI knows that it is better to get it right the first time.

Kevin von der Lippe

Kevin W. von der Lippe is a licensed private investigator at CAI and for 19 years has managed our detective agency and background checking business.  He is security minded and proficient with the federal Fair Credit Reporting Act (FCRA) and the enforcement of Title VII of the Civil Rights Act of 1964, as administered by the EEOC as it relates to background checks. Capital Associated Industries Services Corporation is a licensed investigative agency, specializing in corporate pre-employment background screening. Our corporate agency license is BPN 001473P11.

Contact Kevin at 336-899-1150 or kevin.vonderlippe@capital.org. or www.capital.org