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| 2009 Minimums and Maximums for HSAs* and HDHPs | ||
| Individual Coverage | Family Coverage | |
| Maximum Annual HSA Contribution** | $3,000 (up $100 from $2,900 in 2008) |
$5,950 (up $150 from $5,800 in 2008) |
| Minimum HDHP Deductible | $1,150 (up $50 from $1,100 in 2008) |
$2,300 (up $100 from $2,200 in 2008) |
| Maximum HDHP Deductible | None | None |
| Maximum HDHP Out-of-Pocket Expense*** | $5,800 (up $200 from $5,600 in 2008) |
$11,600 (up $400 from $11,200 in 2008) |
America's Health Insurance Plans' most recent annual study of Health Savings Account/High Deductible Health Plan enrollment found that, as of January 2008, about 6.1 million Americans were covered by Health Savings Accounts with High Deductible Health Plans. This is an increase from 4.5 million one year earlier and 3.2 million in January 2006.
Before the Tax Relief and Health Care Act of 2006, contributions to a Health Savings Account were limited to the lesser of the annual deductible under the companion High Deductible Health Plan or the indexed amount. The Act removed the link to the annual High Deductible Health Plan deductible for tax years beginning after December 31, 2006. This higher permissible contribution was expected to increase interest in Health Savings Accounts.
What's New in HIPAA Compliance
(5/15/08) – The Centers for Medicare and Medicaid Services have begun to focus on enforcement of the Health Insurance and Accountability Act (HIPAA) Security Rule by hiring an outside contractor to conduct a number of onsite compliance investigations and reviews this year. This follows on the heels of last year’s HIPAA security compliance audit initiated by the Office of Inspector General of the Department of Health and Human Services. Both developments – along with all-too common news accounts of security breaches – serve as good reminders of the nee d for health plan sponsors to review their ongoing efforts to comply with the Security Rule.
A recent issue of Sibson Consulting's Capital Checkup includes information on:
- Background on compliance developments
- Periodic assessments and other ongoing activities
- Recent enforcement efforts
- Steps for health plan sponsors
To learn more, read the Sibson Capital Checkup "HIPAA Security Compliance Requires Ongoing Efforts."
Sibson Consulting and Morneau Sobeco Announce Strategic Alliance
(5/13/08) – Joseph A. LoCicero, President & CEO of The Segal Company, has announced that Sibson Consulting, the firm’s HR consulting division, has agreed to a strategic alliance with Morneau Sobeco, a leader in employee benefits administration outsourcing solutions. The firms will collaborate on offering benefits administration outsourcing services to Sibson clients, and employee benefits and HR consulting services to Morneau Sobeco clients in the U.S.
Mr. LoCicero said, “This is an exciting opportunity for both organizations, as it truly makes both firms better equipped to service their client base and, therefore, more valuable to their clients. We are very pleased to offer clients one entry point for both benefits administration and benefits and HR consulting.”
William Morneau, Chairman and CEO of Morneau Sobeco, continued, “Through this alliance, Morneau Sobeco will be able to offer benefits and HR consulting solutions to its U.S. clients, and provide enhanced outsourcing solutions to Sibson’s clients.”
The firms already have mutual clients and are working on joint proposals. In addition, they have complementary business philosophies – they are committed to building long-term client relationships – and believe that this alliance capitalizes on the strengths of both organizations.
“Both firms are pleased to be able to offer a bundled solution – pension and health consulting and administration outsourcing services together – to organizations that prefer such an approach,” concluded Daniel G. Fries, Leader of Sibson Consulting.
Stretching Employee Stock Grants
(5/12/08) – Institutional investors and perceptive retail shareholders are asking public companies to become more diligent in granting equity to employees and to manage stock authorizations more carefully.
Many companies are now reluctant to ask their shareholders for more long term incentive (LTI) stock, preferring instead to stretch the existing authorization as long as they can. For companies choosing this conservative route, here are four strategies they can pursue, either separately or in tandem:
- Reduce equity LTI participation and/or award levels
- Remix the long term incentive portfolio
- Stretch the timing of grant cycles
- Move to a fixed share grant methodology
For further details about employee LTI stock grants, please see the Perspectives article "Employee Stock Grants: Four Strategies for Stretching Your Share Authorization" by Jason Adwin, senior consultant, and Richard Smith, senior vice president and executive compensation consultant, at Sibson Consulting.
Some Campuses Are Healthier than Others
(5/8/08) – Why do some higher education institutions have lower health care costs and rates of disability or absence than other similar institutions? What are these "healthier” institutions doing differently?
A recent survey by Sibson Consulting sought to answer these questions. Responding were 52 public and private American colleges and universities representing 460,000 faculty and staff with annual operating budgets totaling more than $63 billion.
The study found that institutions with the less prevalent, more innovative wellness programs tend to be associated with lower health care cost. More innovative wellness practices include programs that focus on behavior change using personalized tools and resources, such as personal health coaching, personal health statements and electronic medical records.
Although over half of the institutions in the survey have a strategy to improve behavior related to health risks, only one-third invest in incentives to motivate the necessary change, and just over half establish quantifiable metrics to evaluate the effectiveness of their investment.
Key findings on what proportion of the colleges and universities have specific wellness strategies:
- Health risk questionnaire, screenings and coaching: 56 percent.
- Behavior change strategy: 42 percent.
- Incentive payments: 29 percent.
- Metrics are monitored regularly: 23 percent.
It should be noted that two-thirds of the institutions do not measure the ROI of their wellness programs beyond enrollment.
With regard to disease management, more than two-thirds of the institutions in the survey have some form of disease management, with programs for diabetes and heart disease being the most common:
- Diabetes: 69 percent.
- Heart disease: 67 percent.
- Cancer: 37 percent.
- Low-back pain: 35 percent.
- Obesity: 27 percent.
- Depression: 25 percent.
Unlike wellness, where institutions in the survey plan to create new programs, disease management programs are not the focus of change. None of the institutions in the survey plan to add or delete disease management programs.
Program coordination may have an effect on lowering costs. The survey found that the coordinated programs that are most prevalent are associated with lower costs. Yet the vast majority of surveyed institutions appear to offer discrete programs.
For further findings of the survey, read the report of results from the Healthy Campus Survey.
2009 Medicare Part D Benefit and Employee Subsidy Changes
(4/25/08) – The Centers for Medicare and Medicaid Services have just announced the indexed Medicare Part D standard benefit and retiree drug subsidy for 2009.
Plan sponsors eligible for the subsidy will receive 28 percent of Part D prescription drug expenses between $295 and $6,000, compared to 2008 expenses between $275 and $5,600.
Participants will see their Rx deductible, initial coverage limit, out-of-pocket threshold, total Part D drug spending before catastrophic drug coverage and catastrophic coverage copayments all increase.
For further details about changes in the Medicare Part D benefit, employer subsidy and how the process unfolds, read Sibson's Capital Checkup, "CMS Announces Indexed Medicare Part D Amounts for 2009."
Medical Data Mining Enables Cost Containment, Health Improvement
(4/24/08) – “Clients that are using the latest techniques in medical data mining gain valuable insights into cost drivers and disease burdens within their workforces,” observes Edward Kaplan, senior vice president and national health practice leader at The Segal Company. “This information enables employers to prioritize cost containment and health improvement strategies.”
Among the findings from recent medical data mining for Segal Company and Sibson Consulting clients:
- One employer discovered that approximately 2,000 emergency room visits by employees (30 percent of total) were potentially avoidable.
- Another group discovered that members with diabetes (five percent of the employer’s population) accounted for 22 percent of total prescription drug paid claims in 2007.
- The rate of early cancer screenings such as colonoscopies for several clients was well below targeted rates set by cancer experts and the federal government.
- One employer achieved 67 percent generic dispensing rates at retail pharmacies (highest observed of all cases).
- Forty-one percent of one client’s participants had one or more major chronic health conditions, accounting for 82 percent of all paid claims.
- Patients with cancer from one organization accounted for one percent of the population and ten percent of total paid claims.
- Diabetes, hypertension and coronary artery diseases were the top reported conditions for seven clients based on dollars spent.
- Beta blocker use after a heart attack (one HEDIS quality measure) was high, ranging from 85 percent to 100 percent of targeted patients from three clients.
Eileen Flick, vice president and director of health technology services at The Segal Company, reports that data mining results are being used to modify plan designs, audit disease management vendors and introduce targeted wellness and patient coaching programs.
Key Changes to Family and Medical Leave Act
(4/18/08) – Recent amendments to the federal Family and Medical Leave Act (FMLA) create two new types of leave:
- Care for Service Member – An eligible employee who is the spouse, son, daughter, parent or next of kin (i.e., nearest blood relative) of a covered service member is now entitled to a total of 26 weeks of leave during a 12-month period to care for the service member. A covered service member is a member of the Armed Forces, including National Guard or Reserves, who is undergoing medical treatment, recuperation or therapy, including on an outpatient basis, for a serious injury or illness.
- Leave for a “Qualifying Exigency” – The list of reasons that employees may take up to 12 weeks of leave in one 12-month period has been expanded to include the following: leave needed for a “qualifying exigency” arising out of the fact that the employee’s spouse, son, daughter or parent is on active duty, or has been notified of an impending call or order to active duty, in the Armed Forces in support of a contingency operation.
The U.S. Department of Labor has proposed new rules relating to FMLA generally, including further guidance on the FMLA’s notice requirements, the definition of an “eligible employee”, and when an employee may take leave to care for a family member.
The requirement to maintain group health plan benefits during FMLA leave will apply to these new types of leave. This could require employers and plan sponsors to maintain health benefits for up to 26 weeks in some circumstances.
The CD&A Treasure Hunt – Valuable Nuggets for Investors
(4/17/08) – “The SEC-required Compensation Discussion and Analysis (CD&A) section of a company’s annual proxy is a treasure trove for investors seeking to evaluate what’s happening with executive pay for performance,” observes Myrna Hellerman, senior vice president at Sibson Consulting.
Hellerman suggests investors look for the following key nuggets of information as they read through the CD&A's discussion of the intent of the company's pay program, the linkage between executive pay and performance, how pay is benchmarked and how a company’s compensation decision-making works:
- Is a robust, specific compensation philosophy statement provided? How does a company’s stated intent with respect to pay match up with the pay decisions made? For example, look for whether the cash, equity and retirement security award determinations reflect the philosophy and stated intent. A red flag: there are many exceptions, special payments, etc.
- What were the company’s performance goals and actual achievements regarding revenue, net income, dividends, share price, earnings per share, other? Is there consistency between how well the company performed on key financial measures and the compensation awarded to its top executives? A red flag: ambiguous or unstated performance measures and a minimal description of individual achievement levels.
- How does the company determine its comparator peer group, how and why does the company position each pay element against that group and how does the ultimate decision about each element of pay fit with the analysis of comparator companies? A red flag: a peer group that is not a relevant match to the company's business model, revenue size, industry and competition for talent. Sometimes peer groups are convenient because they are aggressive payers of executive compensation.
- What is the decision making process employed by the compensation committee? What were the significant decisions made during the past year? A red flag: lack of evidence that the committee has actively engaged in an ongoing evaluation of compensation payout levels, named executive officers’ performance and compensation delivery vehicles.
Management Mandates Sap Sales Force Productivity
(3/25/08) – Contamination from non-productive activities is a major reason many sales people underperform on their sales goals, and all too often the source of the problem can be traced to management.
Every sales manager, and executive as well, believes his or her organizational and process decisions are in the best interest of the organization. Nevertheless, many of these mandates actually create an unnecessary burden for the company’s sales force, reducing the time they have to spend on key selling and customer responsibilities by crowding their calendar with non-revenue-producing activities.
A recent study by Sibson Consulting shows the average-performing sales person spends a whopping 65 percent of his or her time on non-selling administrative activities while high-performing reps allocate the majority of their time – 55 percent – to selling.
This article by Joseph DiMisa, senior vice president at Sibson Consulting, also covers:
- Top ten time-stealing administrative activities.
- How to tell if management is wasting the sales force’s time.
- Why top performers have more time for selling.
HR Outsourcing: Fact and Fiction
(3/4/08) – Although HR professionals have been using outsourcing in one way or another for many years, the trend continues to gather steam. A growing number of organizations are outsourcing at least some of their HR functions.
This article by Michael Eck, vice president and eHR practice leader in the New York office of Sibson Consulting, looks at the current state of outsourcing – what HR is outsourcing now and why. It reports in detail on:
- Why organizations outsource: fact and fiction
- Why some organizations choose not to outsource
- What organizations are outsourcing
- What the data show
According to Michael Eck, “Research shows that, contrary to what most HR professionals think, in-house solutions are much more likely than outsourcing to improve employee productivity.”
Managing Global Sales Forces
(2/20/08) – “With the globalization of large-company work forces and the need to sell harder and smarter in a difficult economic climate, companies are giving greater scrutiny to a country’s cultural factors affecting sales force success,” says Joe DiMisa, head of Sibson Consulting’s sales and marketing effectiveness practice.
In addition to his work on sales force training and compensation in the U.S., Mr. DiMisa has worked with American and foreign-owned companies in Canada, Puerto Rico, France, Germany, the U.K. and Asia. He can discuss in detail:
- Impact of culture on sales compensation and practices in a variety of countries and how a deeper understanding of culture, society and political system can improve sales force effectiveness and compensation design.
- Application to training sales forces and designing effective compensation structures of the Hofstede model of national culture, which focuses on the dimensions of masculinity-femininity, power distance, individualism-collectivism and uncertainty avoidance.
- Local institutions affecting sales success such as works councils in the U.K. and Europe.
Human Capital Planning Success Stories
(2/14/08) – What can organizations do these days to avoid talent deficits? One strategy is to improve their ability to forecast their future talent needs by using Human Capital Planning, a core business process developed by Sibson Consulting.
Following are two case studies illustrating successful applications of the Human Capital Planning process:
- To stay competitive, a global electronics company crafted a four-year strategy that outlined significant shifts in product design and supply chain management in an overall flat market. With the right business model and strategy in place, the CEO felt confident that the company could meet its market and financial expectations. The CEO and the vice president of human resources were not sure, however, that they had the right talent in place to make the strategy a reality.
With help from Sibson Consulting, the company conducted a detailed analysis of its strategy and identified the eight key talent segments critical to achieving the strategy. They also identified requisite and misfit talent groups that could be outsourced or shed. Armed with this information, the company’s executives staffed up the key roles and improved training and development to accelerate their ability to grow core talent from within. This strategic analysis enabled the company to take informed staffing and sizing action that addressed short-term cost pressures associated with the economic downturn while still enabling them to move forward on strategic product design and supply chain management initiatives. - A global consumer products company undertook a major shift in organization structure and approach to supply chain management. A detailed analysis of the talent implications of its strategy identified specific talent needs in two core roles. The company analyzed its current portfolio of talent and found a significant gap between supply and demand. In addition, the pipeline of potential talent to fill other key strategic and core roles was weak. The discrepancy between supply and demand was further enhanced by the fact that more than 20 percent of the incumbents fitting the future talent profile were either retirement-eligible or considered a turnover risk. With this insight, the company was able to size future portfolio requirements more precisely and align their staffing and development efforts to meet those needs.
For further details about Sibson Consulting’s Human Capital Planning, see the article, "Staying in Front of the Talent Curve: Using Human Capital Planning to Forecast Future Talent Needs."
Survey of Employer On-Site Health Centers
(1/2/08) – The most common type of on-site health center sponsored by corporate employers is the most expensive model (full-service primary care center staffed by doctors and nurses), according to a survey of 41 companies by Sibson Consulting. Almost half of respondents offering an on-site center have a full-service model.
Nurses provide services at 80 percent of the centers, and doctors and labs provide services at just over half of them.
The survey also found that there is a positive correlation between the number of services offered and employer satisfaction with on-site health centers. Satisfaction scores, moreover, were higher for the ability of centers to improve employee goodwill and productivity than for their ability to deliver basic medical care less expensively.
In addition, it was found that not just very large employers have satisfactory on-site health centers. Some companies with 500 to 1,000 employees have centers with which they are satisfied.
Three-quarters of survey respondents have at least 1,000 employees, with one-quarter employing fewer than 1,000 people. A wide range of industries were represented in the sample, including manufacturing, finance, insurance, real estate, transportation, communications and utilities.