HBLC Opens in Las Vegas
From a history lesson on the origins of employee benefits to updates on how Washington's latest legislative efforts involving the Affordable Care Act may affect both employers and employees, the opening day of the Health & Benefits Leadership Conference offered something for everyone.
By David Shadovitz and Andrew R. McIlvaine
David Ballard, assistant executive director for organizational excellence at the American Psychological Association, kicked off the second annual HRE's Health & Benefits Leadership Conference yesterday in Las Vegas with a history lesson.
What's the reason employers are offering benefits to employees today? Ballard asked during a general session titled "Moving from Cost Control to Value Creation."
"It's World War II!" he answered.
At the time, he explained, the federal government imposed wage controls -- which led employers to provide benefits since they weren't able to attract workers by offering better pay.
It "snowballed from there," he added.
Between 1940 to 1960, Ballard said, the number of people enrolled in healthcare plans increased seven-fold.
Today, Ballard told the packed room, the No. 1 complaint employees have about their jobs is low pay.
But ironically, he said, the healthcare system that was put in place to address the problem of wage constraint is now standing in the way of employees receiving better wages, because of rising healthcare costs.
Ballard was one of dozens of experts and practitioners slated to speak at the 2014 Health & Benefits Leadership Conference at Caesars Palace from March 17 through March 19. Topics at the conference run the employee-benefits gamut, covering areas such as healthcare, wellness, retirement, voluntary benefits and more.
Employers have entered a new stage with the passage of the Affordable Care Act, Ballard told the attendees. "I don't think any of us can predict with any certainty what things will look like 10 years from now."
Regarding the use of incentives and penalties to encourage behavior change and wellness, Ballard said the practices being used by employers today are far ahead of where the research is.
"We're doing a lot of things that we think are effective, but we really don't know if they work," he said. "It's going to take a while before the data catches up."
In some cases, Ballard pointed out, the outcomes can even be worse. By encouraging employees to take a health-risk assessment, he said, "they're encouraging every employee to participate. But in the case of many employees, they're simply signing up to take the assessment to get their incentive, without any intention of doing anything."
Ballard also touched on the trend toward gamification, which is being used to change behavior.
When it comes to technology, his advice to employers is to tread carefully. "We often take the same things that we've been doing and throw some technology at it. But adding technology to an ineffective practice isn't going to help, and sometimes can end up with unintended consequences."
Instead, Ballard said, employers need to step back and ask "What's our overall strategy?"
That strategy, Ballard said, needs to be a comprehensive system. "Whether it's healthcare, wellness or training and development, these right now exist in isolation [and] the parts don't talk to each other. What's being done over here is in conflict with what's being done over there."
To be effective, he explained, employers need to take a holistic approach and figure out how everything fits together, with communication at the hub.
The trick, Ballard said, is "to get what's occurring on the benefits side to talk to what's occurring on the business and operations side so [benefits] can link to the goals and objectives and mission of the organization. When that's done, it changes the culture of the organization . . . ."
Tom Parry, president of the Integrated Business Institute, then shared his thoughts on the relationship between health and productivity. Employers, he said, need a pragmatic strategy regarding the collection of data over time, and analyzing the data in a way that helps them understand what's going on in their organizations.
Benefits leaders from two employers, Marriott and Walgreens, also shared some of their wellness and healthcare practices, as well as their outlook for the future.
Rick Morrow, director of benefit strategies at Marriott International, detailed some of the key programs in place at Marriott, including the firm's efforts to get its hands around some of its own data.
Morrow detailed Marriott's Take Care program, which he said is at the heart of everything Marriott does on the health-and-wellness front.
Marriott's approach uses on-site health coaches, who help steer employees to appropriate providers. As a result of the program, Morrow said, Marriot experienced a 20-percent reduction in ER visits in 2011 and 2012.
Tom Sondergeld, senior vice president of health and well-being at Walgreens, then delivered a passionate and eloquent oratory on his vision for the future.
Ten years from now, he said, "we're not going to be sitting in an office figuring out how to manage claims. We're going to be strategists, because that's what our company needs for us to do.
"We are fishers of men," he said. "Our life is about behavior-change moments. This is that moment when people are ready to grab onto that net and come into your fishing boat and be part of your well-being strategy. None of us know when that behavior-change moment is going to happen.
"We are fishers of men," he repeated. "We need to cast that net wide, and the moment we're asked to not cast that net because of cost, we need to step back and say, 'The reality is that behavior change does not mean cost; behavior change means that weight-loss program, that smoking-cessation program, all of those programs need to be there for them."
And if they're not there, he said, "then we failed the workforce."
Jim Klein, president of the American Benefits Council, concluded the first day of the conference with an update on the goings-on in Washington as they relate to employee benefits. It's hardly a secret that the Republicans want to do away with the Affordable Care Act, he said -- the problem for them is what to replace it with.
"The GOP is under a lot of pressure to be for something, not just against Obamacare," he said. What complicates their case further is that, although the health-reform law may be unpopular overall, certain elements of it -- such as the ban on discrimination due to pre-existing conditions and allowing children to remain on their parents' plans until age 26 -- are quite popular.
The Republicans' plan to change the definition of "full-time employee" from the ACA's definition of an employee who works at least 30 hours a week to 40 hours a week could have the unintended effect of pushing more people onto the public exchanges, he said.
Meanwhile, President Barack Obama and the Democrats are under pressure to delay the individual mandate, which will impose tax penalties on many Americans who fail to sign up for health coverage by March 31. Although delaying the individual mandate could actually save the federal government money, said Klein, he expects Obama to ultimately take a "light-enforcement approach," selectively enforcing the tax penalties only against individuals who have clearly signaled a refusal to obtain coverage.
Klein said he expects the Republicans to offer alternatives that include their long-standing proposals for medical-malpractice reform, an expansion of health-savings accounts, funding for state high-risk pools and making it easier for employers to form associations for purchasing healthcare. The GOP will likely address the pre-existing-conditions issue by banning underwriting exclusions for people who can demonstrate they've been continuously covered for 18 months, and requiring dependent coverage for those up to the age of 26 while giving states the option to opt out of these rules. None of these proposals are on the legislative fast-track, he noted.
As for fixing the nation's retirement system, Klein said there's bipartisan support for raising premiums for the Pension Benefit Guaranty Corp. for defined-benefit plans and tying PBGC premiums to plan sponsors' financial soundness. Both Democrats and Republicans are resistant, however, to the notion of giving the PBGC the freedom to raise premiums on its own.
"Congress doesn't like giving up control over anything, especially when it can divert that money to other purposes, such as highway construction," he said.
A number of legislative proposals are also floating around Washington that would cut back the preferential tax treatment that employee-benefit plans currently enjoy as the government wrestles with reducing the deficit and reforming the nation's tax laws, said Klein.
"One of the government's biggest expenditures is health benefits -- the federal government is expected to lose $1.2 trillion in revenue over the next four years because of the favorable tax treatment of health plans," he said.
Proposals in the House of Representatives would cap the tax exclusion for health benefits for single people at $7,000 annually and $20,000 for family coverage. The tax-advantaged status of retirement benefits is also under scrutiny, said Klein, with proposals in the House that include limiting the annual contributions to individuals' 401(k) plans to the lesser of 20 percent of compensation or $20,000.
Besides taxation, other looming issues worthy of HR's attention include the debate over the ACA's excise taxes on high-cost health plans set to go into effect in 2018 and a little-known provision within the health-reform law, the so-called "state innovation waiver," that, by 2017, will allow states the flexibility to pursue their own ways of expanding healthcare coverage that could lead to greater reporting requirements for employers.
Klein urged attendees to make their voices heard in the Washington debate over employee benefits, either by joining his organization -- which advocates on behalf of employers regarding benefits issues -- or testifying to members of Congress about the important role benefits play in the lives of employees, he said.
"Don't underestimate your potential to influence things on an individual basis," he said. "Get involved, go to hearings and participate in the process. It's easy to be cynical, but engagement really does matter."