Ever set out to organize and dispose of old staff member files and paperwork in the office? the job is tougher than it seems.

Best practice – Create a records retention policy as your first step. A host of federal and state laws specify how long you must retain pay- and benefits-related documents.

Compliance is essential if a current or former staff member sues or the DOL, IRS or the state audits your records.

Here’s a records-retention schedule advised by employment lawyer Jacqueline McManus -

o  Retain for two years employee personnel files, including performance reviews and training.

o  Hold these for three years –  wage records, including time cards, base pay and overtime wage-rate calculations and records explaining wage diferentials for personnel performing the same job, and hold I-9 forms for three years from hire date or one year after termination, whichever is later.

o  Keep these four years –  all Payroll documents, including – home address records, and all wage records, including weekly OT earnings, straight time pay, deductions, bonuses, pay period designations and payment dates.

o  Use a five-year retention window for employee health info like medical and first-aid records from on-the-job injuries, and drug and alcohol testing records.

o  Keep this benefits data for six years (or one year after plan termination) –  elections and enrollment forms, benefit change documents, and COBRA notices.

o  Retain 401(k) files indefinitely.

Many corporations attempt to reward workforce during the holidays. But be careful -

There’s a common misbelief that the IRS considers gift cards worth $20 or less de minimus benefits and, accordingly, they’re tax free. Regretfully, that’s not true.  With few exceptions, the IRS considers nearly anything with cash value a taxable form of compensation.

Practically speaking, the IRS is unlikely to go after your firm or an worker over several small-value gift cards for which you withheld no taxes. But they could, especially if your firm regularly hands out gift cards.

At some firms, those $5 to $20 cards can add up to a few thousand dollars worth of uncompensated taxes in a few years. Each $15 gift card would usually require about $5.55 withheld.

To be safe, you can use gift cards sparingly and pay the tax for the recipient. Or else you can educate folks proactively that Uncle Sam requires you to take out for taxes.

Read the fine print

Gift cards may be money-wasters or or morale-killers if staff members have a bad experience attempting to redeem them. Read the fine-print before you buy. Three common pitfalls to watch -

o  expiration dates. Some retailers offer cards that last forever. But many have expiration dates, rendering the cards worthless after a period of time

o  dormancy fees. A $50 card can end up worth only $40 at stores that deduct “dormancy fees” after a certain period of time, and

o  redemption fees. Some stores charge a fee for redeeming cards that can be used in multiple locations.

The good news –  There are some good deals out there. Business use of gift cards has doubled since 2001, and related sales bring in $20 billion a year to retailers. With such fierce competition, it compensates to shop around.

In recent years, it’s become increasingly common for corporations with as few as 200 workers to explore self-insurance. But beware of hidden traps.

When your corporation is weighing self-insurance â.” or has already taken it â.” here are three pitfalls that can develop unexpected costs.

1. Unfavorable worker mix

It’s impossible to completely eliminate the risk of unexpected, high-dollar health claims. But here’s a guideline to reduce your risk. Health claim stats suggest the “ideal” staff member population for a self-insured plan is predominately young, non-use of tobacco and male.

Be aware that stop-loss insurance carriers often “laser” those staff considered higher risk. Lasering means that your organization would have to pay out much more in claims for these staff before the stop-loss coverage kicks in.

2. Loss of network discounts

Some firms learned after the fact that going the self-insurance route caused them to lose providers’ network discounts they previously received under fully insured plans. When analyzing  plan vendors’ administration-only choices, ask -

o  Will the vendor’s network alliances work in your best interests, cost-wise?

o  Will the provider only oversee claim payments or negotiate to build the best provider network, quality-wise, for your employees.

Bottom line –  You should get the same types of plan designs, networks and discounts as a fully insured plan.

3. Wasteful reinsurance contracts

If the language of your reinsurance contract does not match your health plan’s summary plan description, you may be paying for coverage you don’t need and can never use.

It’s also key to make certain your firm has enough money in reserve to cover run-out claims and other costs that may occur before reinsurance will cover payments. Best practice –  annual audits of your financial reserves.

Evidence-based medicine has become a big buzzword in health care over the last few years. But certain non-traditional treatments, like chiropractic care, might also prove effective in certain cases.

The key –  Using these treatments as well to â.” not in lieu of â.” conventional medicine may prove more cost-efficient in the long term.

What the latest research says

Do these five common complimentary treatments belong on your health plan? Here is what recent research suggests -

1) Chiropractic care. Studies suggest these treatments may help cut absenteeism for staff members with uncomplicated lower back pain, namely for people  who’ve had it for less than a month.

2) Acupuncture. Research studies show acupuncture can help relieve osteoarthritis, chronic migraines, post-operative pain, low-back pain, fibromyalgia and carpal tunnel syndrome. There’s less evidence about its effectiveness as a tandem treatment for other conditions.

3) Acupressure. There’s no significant research to show this needle-free variation of acupuncture (a therapist applies pressure to specific points on the body) has the same medical benefits.

4) Biofeedback. As reported by the Mayo Clinic, there’s now some research to suggest this treatment can help with some types of chronic pain, especially tension headaches and muscle pain.

Just how it works –  Monitors display a patient’s heart rate, breathing patterns, body temperature and muscle activity. A therapist then teaches the patient how to lower these readings via relaxation.

5) Aromatherapy.  As yet, there’s no evidence of direct medical benefits. While it could be a relaxing treatment to reduce stress, few firms â.” when any â.” foot the bill on employees’ behalf.

When an staff member ignores directions from a doctor, who’s responsible when the staff member causes a serious accident on the job?

In some cases, it’s your firm that ends up on the hook â.” both for workers’ comp and for other people ’s injuries caused by misuse of a prescription drug.

Situations like these raise three questions that even HR/benefits pros have trouble answering. Just how are you â.” or supervisors â.” supposed to know what meds individuals  are on and whether they’re taking them as directed by their doctors?

In most cases, you won’t.

Are you able to figure out without violating HIPAA or other laws?

You can’t, unless the employee volunteers the info or a physician notes the effects of medication being the reason for the accident.

So when you won’t know and can’t find out, how on earth can your firm be held responsible after the fact?

It all depends on the circumstances. Three key danger signs -

o  A supervisor already has knowledge of an employee’s medical condition, when not the meds themselves. Example –  the staff member requested a schedule change and said it was due to a particular medical problem

o  The individuals has a history of erratic behavior that management suspects is medication-related, and/or

o  The employee’s job involves potentially dangerous situations.

Spotting possible danger

A Florida case (Johnson v. Rentway) is a classic example of the two of the three big danger signs.

1.  The supervisor knew an employee had insulin-dependent diabetes.

2.  The employee was under doctor’s orders to take insulin at specific times, which required the corporation to adjust the employee’s schedule.

But as a result of short staffing, the employee was often forced to work shifts that overlapped with times he was supposed to take injections.

What’s more, the worker worked a potentially dangerous job (he was a professional truck driver).

In conclusion, the inevitable happpened.  The worker suffered a diabetic blackout at the wheel, causing a serious crash that injured himself and another driver.

The employee filed for workers’ comp, and the injured driver sued the organization.  The firm fought â.” and lostâ.” both cases. Total cost –  $5 million.

Having even one problem drinker on your medical plan – including a covered family member with abuse issues â.” can cost your corporation big.

Some estimates place the potential cost as high as $35,000 a year per case. What’ your company’s risk?

A lot of wellness programs are geared toward managing employees’ health risks associated with diseases like diabetes or asthma.

But unless the health promotion program is integrated with an worker assistance program (EAP), chances are alcohol abuse-related risks go undetected. Here are two strategies that’re getting good results.

1. Include alcohol in health testings

When you already sponsor confidential worker health-risk assessments, it’s easy to screen for alcohol risks, too. This may be as simple as making sure three questions are added to the current appraisal -

o  Just how often do you have a drink containing alcohol?

o  Precisely how many alcoholic drinks do you have on a average day? And

o  How often in the last month have you had six or more drinks?

For male personnel, more than 14 drinks per week, or one or more episodes of heavy drinking suggests a possible problem. for women, more than seven drinks in a week, or one or more episodes of drinking four or more drinks, is a red flag.

Alternative – If you don’t offer appraisals, you are able to refer workforce to a free, confidential internet based screening.

Benchmarking tools

A lot of specialists say drug-free worksite policies and staff member assistance programs (EAPs) are the two most proven solutions within companies’ grasp for minimizing the risks and costs of alcohol abuse by health plan enrollees.

To see if sponsoring an EAP makes financial sense, you can calculate your own firm’s current cost risk for free here. Plug in your corporation kind, locale and number of staff.

You’ll get a personalized estimate of each year direct (absenteeism, disability, ER visits) and indirect (presenteeism, turnover) costs from alcohol misuse by a covered employee or family member.

To design a drug-free worksite policy â.” or check when your existing one is up to par and compliant with the law – more guidance is available here.

It’s easy to feel like your PBM holds all the power over you. In most cases, it does.

A landmark 2004 study compared what pharmacy benefits managers (PBMs) charge employers’ plans to what they actually pay pharmacies.

Scientists found staggering overcharges – specifically for generic drugs. Regretfully, four years later, the situation has hardly changed. All too often, PBMs improve their own bottom line at the expense of the plan sponsor’s.

Chances are, it’s your medical insurance vendor – not yourself – who contracts with the PBM to administer the prescription drug portion of your health benefits.

So how can you feel confident your firm is getting the best value and service? Begin by asking your health-plan broker these four questions about the current or prospective PBM.

1. Just how does the PBM calculate price?

Many PBMs gain hidden profits off your plan through a practice called “differential pricing,” says advisor Gerry Purcell.

In other words, the PBM compensates one price to drug retailers and then sets a lesser discount off the typical wholesale price (AWP) for your company’s plan. Example -

o  The PBM compensates the drugstore the AWP minus 18%

o  your plan and workforce pay AWP minus 15% for meds, and

o  The PBM pockets the difference.

Now for some good news. You do have some leverage in this area. When your drug plan is covered underneath the ERISA umbrella, the PBM must disclose this info.

Ideally, you’ll find the rates are the same on both contracts. But when there’s differential pricing, insist your firm get the full discount.

2. What’s the PMPM?

One key cost figure PBMs can’t manipulate is the per-member-per-month (PMPM) cost of your plan. This number will show if your plan’s costs actually increased or lowered.

The PMPM is calculated by dividing the total costs spent by the number of staff members enrolled in the drug plan.

It’s also a excellent tool for comparing different PBMs to see which is the most cost-efficient for the size of your corporation, says Peter Reed of Managed Benefits Strategies.

3. can we get rebates, too?

Some PBMs receive money from drug businesses that your brokers won’t tell you about – but may  be able to leverage to your plan’s advantage. Example – A lot of PBMs get rebate checks from drug businesses (typically 50 cents to $1.25 per claim) for assisting increase the sales of their products.

When you push hard enough for it, your broker may able to work an arrangement where you either -

o  split rebates from your plan evenly, or

o  let the PBM keep the entire rebate in exchange for a price break on administrative fees.

Important –  Ask to figure out all the payment types the PBM gets from the drug firms. Rebates are often couched in the form of grants or classified as access fees or formulary fees.

4. How do changes in the formulary work?

In most states, PBMs can change your plan’s list of approved medications without prior notice.

The problem –  PBMs often make mid-year switches that save them money, but might not save your corporation or workforce a dime.

Example – When the PBM adopts a mail-order-only coverage policy on a certain formulary drug, an staff member who needs same-day access to the medication could  be forced to pay full price for it at a drug store.

Meanwhile, your plan is still charged the formulary price.To avoid such unpleasant surprises, insist the PBM give written notice of formulary changes, including the addition of new generics.

The best worker recognition practices are often the simplest.

Here’s one that’s recently been adopted at the publishing company where I work –  a progam called “See something good, say something good.”  It’s a way for personnel to bring positive attention to things that their colleagues, managers and the company’s different departments do well.

Precisely how it works –  the business provides colorful index cards, placing them conspicuously in a few widely traveled areas in the building. When staff and supervisors want to publically recognize someone else’s efforts, they can grab a card and fill it out. It takes very little time.

When the index card is filled out, the worker drops it into a wrapped box (there are two in the building).  The boxes are later collected and the cards displayed in a room the corporation uses periodically for meetings, presentations and quarterly worker appreciation events.

In order to build awareness and participation in “Say Something Good,” management put up fliers around the building, so individuals  from every department can see them, as well as visitors and job applicants who’ve come in for interviews.

The health promotion program, which was originally thought up by the head of our product advertising division, doesn’t cost anything apart from the cost of the index cards and paper. There’s minimal administration time, and it takes workforce only a moment or two to fill out a card on a fellow employee’s behalf.

But the return is tremendous, and the recognition possibilities are endless. It’s a good way to increase morale, encourage productivity and differentiate the company culture from work environments where the negative things seem to get the lion’s share of the attention.

When it comes to health promotion programs, it can be tough to get past all the hype. Here is how to avoid the three most common traps employers fall into.

Trap #1.  The “one-size-fits-all” approach

For good reason, your company doesn’t simply copy other firms’ 401(k) plans or compensation designs. Yet, all too often, firms adopt ill-fitting health promotion programs based on things that have worked elsewhere.

Your CFO might have seen data on the cost savings other companys have achieved via certain wellness incentives. Or an old coworker of your Chief Executive Officer (CEO) swears by the wellness program at his or her own firm.

In response, the top brass pushes for a copycat wellness program â.” for example, offering tobacco use cessation incentives.

That might  be a good idea, since tobacco-related illnesses are a key driver of your company’s healthcare costs. But how can you be sure? is it good enough to have your personnel undergo a health risk appraisal?

Normally, the answer is no.

Health risk appraisals are a excellent beginning place, but it’s often a mistake to stop there.  The assessments help you get a feel for what your employees’ baseline physical problems are before you attempt to design a health promotion program around them.

This creates rough outlines of what your wellness program goals should be and where to target staff member programs. If you want the maximum bang for your wellness buck, you’ll have to dig a little deeper for information. Key places to look -

o  your organization’s medical-claims breakdown for the last three years

o  prescription-drug claims

o  staff member absence information

o  employee assistance program use

o  disability claims, and

o  staff member demographics (workers’ ethnic, gender, age and dependent coverage status points to greater â.” and lesser â.” health risks associated with each category).

Trap #2. Leaving the wellness program on autopilot

A lot of health promotion programs often get off to a good start and then fizzle out. Employers are left wondering what went wrong. Their mistake –  They failed to revisit the health promotion program on an ongoing basis â.” at least every other year.

Why it’s crucial –  Your cost-drivers can easily shift as staff come and go from the corporation.

Example –  This year, emphysema and other smoking diseases could  be your biggest cost driver. But two years from now, it could be obesity and diabetes.

Unless you continuously track the wellness program and adjust your goals as necessary, you might not be prepared to meet those new challenges.

Trap #3. Unrealistic expectations

Ordinarily, it takes at least a year and a half for employers to break even on the cost of a health promotion program.  As a rule of thumb, the average program cost per staff member per month to the employer is about $3 to $5.

If, after three years, you still aren’t seeing results, something went wrong. Currently, the benchmark Return On Investment (ROI) after the third year of a health promotion program is $4 to $5 saved for every dollar spent.

Precisely how can you manage the cost in the short-term? In many cases, businesss pass the cost of the wellness program on to the employees. for  instance, let’s say you want to roll out a wellness program effective January 1 (or no matter what your first day is of the new plan year).

You can roll that $3 to $5 per employee per month cost directly into the employee’s monthly share of their healthcare premium. That makes the health promotion program a budget-neutral expense for your organization.

But remember –  You get what you pay for â.” both in time and money invested.  The less guesswork that’s involved in the planning and execution, the better the chance for success.

Variable compensation may be a great way to satisfy demand for higher pay while addressing executive management’s need to increase productivity and keep base salaries under control.

But there are some major pitfalls.  Here are two proven ways to avoid the most common legal and return on investment risks.

Non-exempt employees

Beware if you use variable comp as a pay-for-performance strategy for hourly staff. Reason –  It’s easy to inadvertently run afoul of the Fair Labor Standards Act (FLSA) overtime rules.

Under FLSA, you must recalculate employees’ hourly wages to include all variable pay (like individual or departmental bonuses) when figuring overtime compensation.

Failure to do so could cost your business more in penalties and back-wage payments than the variable comp plan saved on the front end.

So it’s a good idea to double-check with Payroll to make sure the department knows to make OT adjustments after hourly personnel receive bonuses.

Reward the right things

In order to make the criteria for bonuses easier for personnel to understand and management to measure, many firms prefer using strictly objective measurements. Example –  the plan may pay out based on how much money personnel save their department in a year.

But what happens when employees cut corners â.” on safety, service, quality, etc. â.” to reach the goal?

At some firms, staff members are still rewarded with additional pay, even though their actions potentially did more harm than good to the bottom line. for best results -

o  set behavioral criteria for bonuses as well as economic ones, and

o  consider using a mix of firm-wide, departmental and individual economic performance measures.