HEALTH OUTCOMES

THE CUTTING EDGE OF CORPORATEWELLNESS

Companies of all sizes are turning to worksite wellness programsto boost their bottom lines and the well-being of their employees.When properly implemented, these programs can drive downhealth care costs, reduce sick days and establish a healthier,happier, more energetic workforce. TotalWellness has recentlyidentified trailblazing trends in corporate wellness and below area number of cutting-edge innovations you can implement to helpstrengthen your organization’s worksite wellness program.

WELLNESS COACHING provides an efficient and effective way toconnect with employees one-on-one. Wellness coaches can offerencouragement and create customized wellness solutions forindividual employees, providing better results than general, one-size-fits-all programs. Tailored programs can spur engagement,increase long-term success and drive meaningful (andmeasurable) benefits for employers and employees. Of the 9,918employees surveyed by Virgin HealthMiles and WorkforceManagement magazine, over half reported they would beinterested in meeting with a wellness coach in order to improvetheir overall health and wellbeing.

TECHNOLOGY is, not surprisingly, another trend to watch, as mobiledevices and social media flood the workplace. Smartphones canserve as pocket-sized, personal trainers, as they are now capableof monitoring vital signs during exercise and tracking sleeppatterns at night. There’s an app for just about everything, fromnutrition and fitness to mental health, and most apps are free!Social media can be employed to create an environment ofcommunity support through internal social networks,encouraging employee engagement and program participation.

INCORPORATE PHYSICAL ACTIVITY DURING THE WORKDAY. Unique andinnovative techniques – from walking meetings to treadmillworkstations – reflect a company’s creative spirit. Some firms

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HRFocusHUMAN CAPITAL PRACTICE

September 2013 — Issue 75 www.willis.com

health outcomes

The Cutting Edge of Corporate

Wellness . . . . . . . . . . . . . . . . . . . . . . . . 1

legal & compliance

Massachusetts Repeals Fair Share

Contribution Requirement . . . . . . . . . 2

San Francisco Releases 2014 Employer

Expenditure Rates. . . . . . . . . . . . . . . . 3

Since You Asked: Health Care Reform

And Excessive Waiting Periods . . . . . 4

hR coRneR

Don’t Ignore Facilities When

Addressing Productivity: Five

Strategies to Consider . . . . . . . . . . . . 5

Generational Differences in Tech Use

Prompts Reassessment of Work

Practices . . . . . . . . . . . . . . . . . . . . . . . 7

WeBcasts . . . . . . . . . . . . . . . . . . . . . 8

contacts . . . . . . . . . . . . . . . . . . . . . 10

2 Willis North America • 9/13

have done away with traditional boardroom meetings and instead,lace up their sneakers and get outside for “walking meetings.”Walking meetings not only energize the workday with exercise, butcan also enhance brainstorming, creative discussion and problemsolving.

REDESIGNING WORKSPACES is another approach to physical wellbeingon the job: exercise balls instead of chairs, treadmill workstations,wobble boards and even anti-fatigue mats to stand on while working.Whether making small adjustments or drastic changes, theseinnovations in workday wellness show employees that health andwellness are company priorities.

INCENTIVE PROGRAMS, while not new, consistently prove to be one ofthe most effective employee motivators. Virgin HealthMiles andWorkforce Management magazine found that 60% of surveyedemployees participate in corporate wellness programs specifically tocollect the incentives offered. Monetary incentives can stimulateshort-term health behavior changes and are a simple way to increaseemployee participation in health risk assessments, preventative careand immunizations. Organizations should consider their employeepopulation when creating incentive programs and tailor theincentives to suit their employee preferences in order to get the mostout of them.

Incorporating any of these innovations in your business can helpcreate and maintain a culture of wellness. Connect with your WillisHealth Outcomes Consultant to learn more and to strategize on awell-rounded initiative that will best engage your unique workforce.Make the cutting edge of wellness the norm at your organization!

LEGAL & COMPLIANCE

MASSACHUSETTS REPEALS FAIR SHARECONTRIBUTION REQUIREMENT

The 2014 fiscal year budget bill that Massachusetts Governor DevalPatrick (D) signed on July 12, 2013 repealed the “fair share”contribution requirements under the Massachusetts Health CareReform Act (HCRA). The budget bill also repealed the requirementfor employers to collect and retain Health Insurance ResponsibilityDisclosure (HIRD) forms from each employee who declines to enrollin the employer’s health plan or who declines to use the employer’scafeteria plan to purchase insurance on a pre-tax basis.

Health Outcomes– continued from page 1

BACKGROUNDEnacted in 2006, the HCRA imposed severalrequirements on Massachusetts employers:

n A “fair share” contribution (FSC)requirement

n A “free rider” surcharge/cafeteria planrequirement

n Collection of HIRD forms fromemployees declining health coverage, andhealth insurance disclosure filings usingemployer HIRD forms

These mandates generally applied toemployers having 11 or more full-timeequivalent (FTE) employees performingservices in Massachusetts (althoughlegislation signed in 2012 was to increase,effective July 1, 2013, the employer thresholdto 21 FTE employees for purposes of the FSCrequirement). An employer with 5,500 ormore quarterly payroll hours is considered tohave 11 or more FTE employees. Under theFSC requirement, Massachusetts employerswere required to either make a “fair andreasonable” contribution toward the cost ofemployees’ coverage or pay an annualassessment of up to $295 per employee intothe Commonwealth Care Trust Fund. TheFSC testing (and the payment of anyapplicable penalty) is done quarterly.

Earlier this year, Governor Patrick introducedlegislation to repeal the FSC requirement.The bill, proposed in recognition of theemployer pay or play mandate under thePatient Protection and Affordable Care Act(PPACA), was intended to reduce the burdenon employers of complying with both federaland state requirements. PPACA’s employermandate is similar to Massachusetts’ FSCrequirement. The proposal to repeal the FSCrequirement was included in the budget billand was signed by Governor Patrick eventhough the IRS had already announced thatthe pay or play mandate would be delayedfrom 2014 to 2015.

3 Willis North America • 9/13

EMPLOYER MEDICAL ASSISTANCE CONTRIBUTIONAlthough employers are no longer responsible for the FSC requirements, the budget billintroduces an employer medical assistance contribution (EMAC). The EMAC will replacethe Medical Security Trust Fund that is currently funded by employers and is used to fundhealth insurance for unemployed workers. The EMAC is intended to finance the cost ofhealth care for low-income Massachusetts residents. Each employer who employs morethan five employees will be required to contribute an amount equal to wages times .36 of 1%of the same wage base that applies for Massachusetts unemployment taxation purposes.This amount is currently $14,000 and results in an annual assessment of $50.40. Employerswho are newly subject to the requirement will contribute a lesser amount – .12 of 1% ofwages in the first year and .24 of 1% of wages during the second year. The assessment iseffective January 1, 2014 and will be collected through the Massachusetts unemploymenttax system. At this time, however, no additional details about the EMAC are available.Guidance is expected in the near future.

In addition to the EMAC, there is a new notice requirement. Employers (with 11 or moreFTE employees) will need to notify all employees of the employer’s compliance with theHCRA’s cafeteria plan requirement and the opportunity for eligible employees to enroll inthe employer’s sponsored health insurance plan or the employer’s cafeteria plan. Additionalguidance on this requirement, including a sample notice, is expected.

CONCLUSIONPlease note that only the FSC requirement and the requirement to collect and retainemployee HIRD firms were repealed, so employers must continue compliance with theother HCRA requirements (e.g., cafeteria plan requirement). Employers will also need tocomply with the FSC requirements through July 1, 2013 (e.g., complete any filings that aredue, etc.) since the Department of Unemployment Assistance (DUA) retains theauthorization to collect any outstanding FSC payments for obligations arising before July 1,2013.

SAN FRANCISCO RELEASES 2014 EMPLOYER EXPENDITURE RATES

San Francisco’s Office of Labor Standards Enforcement (OLSE) recently released theemployer health care expenditure rate for 2014, effective January 1, 2014. In 2013, the healthexpenditure rate for a large employer (100 or more employees) was $2.33 per hour. For2014, this rate will be $2.44, an increase of $.11 per hour. For medium-sized employers (20-99 employees) the 2013 rate was $1.55; for 2014, the rate will increase to $1.63 per hour.

BACKGROUNDSan Francisco’s Health Care Security Ordinance (HCSO) requires that medium and largebusinesses make certain minimum contributions toward their San Francisco employees’health care. Under this mandate, an employer may either contribute at least the minimumamount to a medical plan or other health benefits or pay that amount into the publiclyavailable program established by the HCSO. (See Human Capital’s HR Focus, January 2012,Issue #55, “San Francisco Health Care Ordinance Amended” for additional details onthe HCSO’s requirements.)

The article on the repeal of Massachusetts’ fair share contribution requirements alsopublished in this issue of HR Focus signals that the Patient Protection and Affordable CareAct may cause other governments which have enacted laws requiring mandated employerhealth care contributions to reconsider the future feasibility of such laws.

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SINCE YOU ASKED:

HEALTH CARE REFORM AND EXCESSIVEWAITING PERIODS

The National Legal & Research Group (NLRG) has received manyquestions about the prohibition on excessive waiting periods underthe health care reform law. A frequent question has been whether theemployer can continue to offer certain health plan options withwaiting periods longer than 90 days if it offers at least one option witha waiting period that does not exceed 90 days. Please note that thedelay of the employer pay or play excise taxes until 2015 does notapply to the 90-day waiting period limitation.

BACKGROUND Under the Patient Protection and Affordable Care Act (PPACA),group health plans may not require a waiting period that exceeds 90days before coverage is effective for employees and dependents whoare otherwise eligible for the plan. The prohibition on excessivewaiting periods applies to group health plans and insurers but not tocertain “excepted benefits” (e.g., most dental or vision coverage andmost health flexible spending accounts).

The plan can still have other eligibility requirements, such as being inan eligible job classification or achieving job-related licensurerequirements specified in the plan’s terms, unless the condition isdesigned to avoid compliance with the 90-day waiting periodlimitation. The 90-day waiting period limit, which applies to bothgrandfathered and non-grandfathered plans, is effective for plansyears beginning on or after January 1, 2014.

In March 2013, the federal agencies (Departments of Labor, Healthand Human Services and Treasury) responsible for implementingPPACA released proposed regulations addressing the 90-daywaiting period limit for group health plans. The proposed regulationsgenerally follow the guidance provided in Internal Revenue ServiceNotice 2012-59 (issued in August 2012 and addressed in WillisHuman Capital Practice Alert, October 2012, “PPACADetermination of Full-Time Employees – Interim SafeHarbor”). Plans may follow either the earlier guidance or theproposed regulations through at least the end of 2014.

Highlights of the proposed regulations:

n While the regulations prohibit plans from requiring eligibleparticipants and beneficiaries from having to wait more than 90days for their coverage to become effective, they do not requireplan sponsors to offer coverage to any particular employee orclass of employees.

n A waiting period does not include thetime before an employee or dependentenrolls as a late enrollee or specialenrollee. Existing HIPAA regulationsgovern the effective dates of coverage forspecial enrollment.

n The waiting period must not extendbeyond 90 days (the plan may not makethe coverage effective date later than the91st day) and all calendar days arecounted beginning on the enrollmentdate, including weekends and holidays.The enrollment date is defined as the firstday of the waiting period.

n When applying waiting periods tovariable-hour employees for whom aspecified number of hours worked is acondition for plan eligibility, theproposed regulations explain that “if agroup health plan conditions eligibilityon an employee regularly having aspecified number of hours of service perperiod (or working full-time), and itcannot be determined that a newly-hiredemployee is reasonably expected toregularly work that number of hours perperiod (or work full-time), the plan maytake a reasonable period of time todetermine whether the employee meetsthe plan’s eligibility condition, whichmay include a measurement period of nomore than 12 months that begins on anydate between the employee’s start dateand the first day of the first calendarmonth following the employee’s start

HR CORNER

DON’T IGNORE FACILITIES WHEN ADDRESSINGPRODUCTIVITY: FIVE STRATEGIES TO CONSIDER

Employees are often most productive in workplaces that support collaboration andcreativity. Yet, companies typically have focused on facilities costs rather than theirpotential to support employee performance and results. To optimize businessperformance, companies should create work environments that support choice,collaboration and flexibility, says professional services and investment management firmJones Lang LaSalle (JLL).

“A typical knowledge-oriented organization spends significantly more on its workers thanon its space,” says Bernice Boucher, a member of Jones Lang LaSalle’s global workplacestrategy board with responsibility for the Americas. “For these companies, productivity isnot about presence—that is, sitting at a desk – it is about performance. The right workplacestrategy can help increase shareholder value, achieve business goals, and create a high-performance, cohesive corporate culture.”

Corporate real estate executives face growing pressure from senior management to affectthe wider business agenda. According to JLL’s Global Corporate Real Estate Trends 2013

5

date.” Generally, the eligibility criteria will not be viewed as a means of thwarting the 90-day waitingperiod limitation so long as coverage for a variable-hour employee is made effective within 13months of an employee’s start date, plus the time remaining until the first day of the followingcalendar month if the employee's start date was not the first calendar day of the month.

n If a group health plan conditions eligibility on any employee (part-time or full-time) having tocomplete a number of cumulative hours of service, the eligibility condition is not considered asdesigned to avoid compliance with the 90-day waiting period limitation if the cumulative hours-of-service requirement does not exceed 1,200 hours. The waiting period must begin once the newemployee satisfies the plan’s cumulative hours-of-service requirement and may not exceed 90 days.The proposed regulations further provide that this provision is intended to be a one-time eligibilityrequirement.

n If an individual is in a waiting period on the date the plan becomes subject to the waiting periodlimitation, the waiting period can no longer apply to the individual if it would exceed 90 days.

CONCLUSIONAs the prohibition on excessive waiting periods applies to all group health plans, it would not bepermissible for an employer to offer any health care options (other than those that are deemed to beexcepted benefits) with waiting periods in excess of 90 days. Employers should review their currentwaiting periods and amend as necessary to ensure that waiting periods for eligible individuals do notextend 90 days beyond the requirement’s effective date.

Willis North America • 9/13

6 Willis North America • 9/13

continued on page 7

survey, 72% of corporate real estate executives face high expectations to deliver clearenhancement in workplace productivity, and 65% are charged with transforming thequality of the workplace.

The JLL workplace strategy team has identified five workplace principles that supportincreased shareholder value, improved business performance, a cohesive corporate culture,and other corporate objectives:

n WORK IS WHAT EMPLOYEES DO, NOT WHERE THEY SIT The focus of work and workplace is no longer about square-footage per person, butabout revenue per person.

n THINK MEMBERSHIP, NOT OWNERSHIPThe traditional one-person-per-desk model does not best serve knowledge workers.The most productive workplaces create non-territorial “neighborhoods” by function.These workplaces provide a wide range of environments, including formal meetingzones, casual brainstorming spots, IT stations, and private spaces, for different kinds of work.

n DO MORE WITH LESSThe “ownership model” of assigning a seat to every employee is no longer sustainable,given that 50 percent of desks will be vacant on an average day in a typical company. InNorth America and Europe, for example, job sharing, telecommuting , and virtualmeetings have significantly decreased office space usage. Vacancy translates intounderutilized real estate and a less-productive environment.

n PROVIDE CHOICES TO ENHANCE PRODUCTIVITY Companies must find the right balance between supporting individual and teamproductivity. When employees have greater control over how and where they work,they are empowered to choose the space that is most productive for the task at hand.With spaces that support quiet or confidential work, as well as virtual or face-to-facecollaboration, the workplace can drive cross-pollination of ideas, employeeengagement and foster a sense of community. It may sound counter-intuitive, butemployees who are given greater autonomy are often more engaged and loyal to anorganization, even without personal desks.

n FLEXIBLE WORKSPACES TRANSLATE INTO AGILITYIn a fast-moving, ever-changing economy, the organizations that can adapt to themarket and economic forces succeed, and those that are built on a flexible workspacemodel have the advantage because their culture is wired for fluidity. People andtechnology are in the right place at the right time, which drives innovation.

7 Willis North America • 9/13

HR Corner – continued from page 6

“Productivity depends on the ability of a company to get the most out of its employees in linewith the organization’s objectives,” notes Boucher. “The right workplace can shape culture,promote collaboration, inspire ideas, respond to trends, improve performance, build retentionand grow the bottom line.”

This article courtesy of BLR.

GENERATIONAL DIFFERENCES IN TECH USE PROMPTSREASSESSMENT OF WORK PRACTICES

Generation Y workers, more astute in their technology skills than any prior age group, areforcing employers to reevaluate how they hire, train, and equip current and future workforces.These were the findings of a new study, Generational Research on Technology and its Impact inthe Workplace, just released by CompTIA, the nonprofit association for the informationtechnology (IT) industry.

“In the next 5 to 10 years, Gen Y will completely dominate the workforce the way that BabyBoomers once did,” says Todd Thibodeaux, president and chief executive officer, CompTIA.“Generation Y has been raised in technology and they consider their aptitude for tech as a valuethat they bring to the table when seeking a job.”

Two-thirds of Gen Y respondents assessed their own technology skills as “cutting edge” or“upper tier.” Similarly, Gen Y’s expectations for tech in the workplace are quite high. Also, “anemployer’s tech ‘savvy-ness’ is very high on their checklist on whether to take a job or not,”Thibodeaux noted.

Roughly half of survey respondents described their employer as either “cutting edge” or in the“upper tier” in their use of technology. Slightly less (42 percent) put their companies somewherein the middle of the adoption curve.

Three-quarters of Gen Y workers used a smart phone for work purposes in the last yearcompared with 37 percent of Baby Boomers. Other devices more prevalent among youngerworkers include tablets, laptops and GPS systems. Gen Y also considers social media a work tool,while Baby Boomers see it as more of a personal tool. “Factors like these may require employersto adapt to Gen Y’s expectations,” Thibodeaux remarked.

Adapting to a younger workforce will likely extend into the areas of training. E-learning isespecially appealing to Gen Y workers, who want to be autonomous in how they choose tointeract with technology, deciding their own pace and not being forced to interrupt normalworkflow for training.

continued on page 8

8 Willis North America • 9/13

This hands-on attitude also impacts technical support in the workplace. “They often willtry to troubleshoot the problem first on their own end want to brainstorm together with theIT staff,” Thibodeaux noted of Gen Y workers. “That’s different than older workers whowant to hand off problem and get it back when it’s finished.”

Data for the study is based on a May 2013 online survey of 700 respondents from differentage groups and generational cohorts in a variety of industries. The full report is available at no cost to CompTIA members. Visit CompTIA.org or contact research@comptia.orgfor details.

This article courtesy of BLR.

HR Corner – continued from page 7

WEBCASTS

LET'S GET CLINICAL: LEVERAGING CLINICAL DATA FORPOSITIVE HEALTH OUTCOMES

TUESDAY, SEPTEMBER 17, 2013 2:00 PM EASTERN

presented by:

Lester Morales, Chief Growth Officer. Willis Human Capital Practice

“It’s all about the data!” The key to a successful health management program is to understand whereexactly you are spending your dollars and have the highest gaps in care. Using data and informatics todesign your wellness and health management strategies can create a more effective program withbetter – and faster – results. In this webcast we will discuss the following items:

n Introduce how claims data can be used to understand present and emerging conditions withinthe workforce

n Discuss how to design care management programs that are focused on near term spending forhigh-risk, chronic patients

n Introduce how compliance and non-compliance with quality care measures affect cost andoverall risk at a population and individual level

n Discuss how to measure the effectiveness of employer based disease, case, or wellness programs n Discuss how a holistic approach to health management should be approached

participant access

Click here to RSVP for this call.

NOTE: Advance RSVP is required to participate in this call. Registration ends one hour prior to the

call start time.

9 Willis North America • 9/13

EFFECTIVELY NAVIGATING THE MEDICAL LEAVE OFABSENCE MAZE

TUESDAY, OCTOBER 15, 2013 2:00 PM EASTERN

presented by:

Marina A. Galatro, PHR-CA

Senior Human Resources Consultant

Willis Human Capital Practice

Does FMLA drive you crazy? “Chronic” conditions, intermittent leaves, last-minuteabsences, Monday/Friday leave abuse, using leave time for other reasons, incompleteor vague certifications; it’s enough to make you throw up your hands in frustration.Then there’s ADA to deal with. Is there anything you can do about it?

You bet! This webcast will address the common leave issues and best practicesstrategies for dealing with them.

The webcast will focus on how:

n Top FMLA strategiesn Tips to get supervisors on board in administering FMLA leaven Answers to tough questions on medical certificationsn ADA leave facts and influence

participant access

Click here to RSVP for this call.

NOTE: Advance RSVP is required to participate in this call. Registration ends one hour prior to the

call start time.

WEBCASTS

NEW ENGLAND

Auburn, ME207 783 2211

Bangor, ME207 942 4671

Boston, MA617 437 6900

Burlington, VT802 264 9536

Hartford, CT860 756 7365

Manchester, NH603 627 9583

Portland, ME207 553 2131

Shelton, CT 203 924 2994

NORTHEAST

Buffalo, NY716 856 1100

Morristown, NJ973 539 1923

Mt. Laurel, NJ856 914 4600

New York, NY212 915 8802

Norwalk, CT203 523 0501

Radnor, PA610 254 7289

Wilmington, DE302 397 0171

ATLANTIC

Baltimore, MD 410 584 7528

Knoxville, TN865 588 8101

Memphis, TN901 248 3103

Metro DC301 581 4262

Nashville, TN615 872 3716

Norfolk, VA757 628 2303

Reston, VA703 435 7078

Richmond, VA804 527 2343

Rockville, MD301 692 3025

SOUTHEAST

Atlanta, GA404 224 5000

Birmingham, AL205 871 3300

Charlotte, NC704 344 4856

Gainesville, FL352 378 2511

Greenville, SC704 344 4856

Jacksonville, FL904 562 5552

Marietta, GA770 425 6700

Miami, FL305 421 6208

Mobile, AL251 544 0212

Orlando, FL407 562 2493

Raleigh, NC704 344 4856

Savannah, GA912 239 9047

Tallahassee, FL850 385 3636

Tampa, FL813 281 2095

Vero Beach, FL772 469 2843

MIDWEST

Appleton, WI800 236 3311

Chicago, IL312 288 7700312 348 7700

Cleveland, OH216 861 9100

Columbus, OH614 326 4722

Detroit, MI248 539 6600

Grand Rapids, MI616 957 2020

KEY CONTACTS

U.S. HUMAN CAPITAL PRACTICE OFFICE LOCATIONS

Willis North America

Milwaukee, WI262 780 3476

Minneapolis, MN763 302 7131 763 302 7209

Moline, IL309 764 9666

Pittsburgh, PA412 645 8506

Schaumburg, IL847 517 3469

SOUTH CENTRAL

Amarillo, TX806 376 4761

Austin, TX512 651 1660

Dallas, TX972 715 2194972 715 6272

Denver, CO303 765 1564303 773 1373

Houston, TX713 625 1017713 625 1082

McAllen, TX956 682 9423

Mills, WY307 266 6568

New Orleans, LA504 581 6151

Oklahoma City, OK405 232 0651

Overland Park, KS913 339 0800

San Antonio, TX210 979 7470

Wichita, KS316 263 3211

WESTERN

Fresno, CA559 256 6212

Irvine, CA949 885 1200

Las Vegas, NV602 787 6235602 787 6078

Los Angeles, CA213 607 6300

Phoenix, AZ602 787 6235602 787 6078

Portland, OR503 274 6224

Rancho/Irvine, CA562 435 2259

San Diego, CA858 678 2000858 678 2132

San Francisco, CA415 291 1567

San Jose, CA408 436 7000

Seattle, WA800 456 1415

The information contained in this publication is

not intended to represent legal or tax advice and

has been prepared solely for educational

purposes. You may wish to consult your attorney

or tax adviser regarding issues raised in this

publication.

Willis North America