1Willis North America | January 2014

HRFocusHUMAN CAPITAL PRACTICE

January 2014 www.willis.com

HR CORNERMOST WORKERS INTEND TO ACTIVELY SEEK A NEW POSITION IN 2014, SAYS POLLThis article provided by BLR

A majority of workers intend to actively seek a new position in 2014, according to a recent poll.

According to the Right Management poll, only five percent of employees intend to stay in their current position.

The latest findings, shown below, are consistent with results from the last four years.

DO YOU PLAN TO PURSUE NEW JOB OPPORTUNITIES IN 2014?

2013 2012 2011 2010 2009Yes, I intend to actively seek a new position. 83% 86% 84% 84% 60%

Maybe, so I’m networking. 9% 8% 9% 8% 21%

Not likely, but I’ve updated my resume. 3% 1% 2% 3% 6%

No, I intend to stay in current position. 5% 5% 5% 5% 13%

“These numbers should signal a wake-up call for top management, when four out of five employees say they intend to look for employment elsewhere. Solutions to keeping the best talent on board all point to effective engagement that drives performance, satisfaction and loyalty. Employers must act now to engage top talent and prevent them from leaving for the competition,” said Scott Ahlstrand, Right Management’s global practice leader for employee engagement.

Right Management surveyed 871 employees in the U.S. and Canada via an online poll that ran from October 16 to November 15, 2013.

HR CORNERMost Workers Intend to Actively seek a New Position in 2014, Says Poll ....................................................... 1Survey: Half of Companies Plan to Invest More in Training in Reaction to Skills Gap ...................................... 2

HEALTH OUTCOMESRevitalize your wellness program in 2014 ........................................ 3

LEGAL & COMPLIANCECMS Creditable Prescription Drug Coverage: Filing Reminder ........ 4Wellness Incentives – Requiring Employees and Spouses to Meet the Wellness Standard ......................................... 4COBRA Premiums and Working Spouse Contributions .................... 5

WEBCASTS ............................................................................6

CONTACTS .............................................................................7

Willis North America | January 20142

SURVEY: HALF OF COMPANIES PLAN TO INVEST MORE IN TRAINING IN REACTION TO SKILLS GAPThis article provided by BLR

In a recent survey, 51 percent of employers indicated they plan to increase their investments in training over the next two years. In addition, 35 percent of surveyed executives at companies that are facing a skills shortage acknowledge that they have not made a big enough investment in training in the past.

The “Accenture 2013 Skills and Employment Trends Survey: Perspectives on Training” (www.accenture.com/SkillsGap) confirmed that the skills gap remains a problem for employers—with 46 percent of executives concerned that they will not have the skills needed in their business within the next few years.

When asked to identify ways for employees to develop new skills, 72 percent of executives pointed to training. Only 52 percent of employees working at the surveyed companies currently receive formal training from their employers. However, that number is more than double the figure from a previous Accenture survey in which only 21 percent of U.S. workers reported being formally trained by their employer between 2006 and 2011.

The consequences of not addressing the skills gap are significant, with 66 percent of those facing or anticipating a skills shortage expecting to lose business to their competitors as a result. Other concerns include loss of revenue (64 percent), eroding customer satisfaction (59 percent), and a delay in developing new products or services (53 percent). In addition, the survey found that 87 percent of companies’ existing employees are facing additional pressure and stress due to the inability to train employees with new skills or to hire workers who already possess needed skills.

HR Corner – continued from page 1

“It’s clear that U.S. businesses are looking to take a more active role in solving the skills challenge, and that failing to do so can result in significant business consequences,” said David Smith, senior managing director of Accenture Talent & Organization. “Developing more effective and targeted training programs is a critical element in improving the skills of the workforce.”

“As digital technology blurs the boundaries between formal and informal learning, companies should consider ways to strike a balance between the two and help ensure that they work in tandem,” Accenture stated. “For instance, embedding learning in everyday work—shadowing others, mentorships, or learning from peers through online forums—can help formal online or classroom training becomes more relevant and more effective.”

The survey also found that employers continue to use new methods to deliver employee training: mobile delivery (used by 42 percent of survey respondents), social media (35 percent), massive open online courses (MOOCs) (27 percent), and gamification (13 percent).

3Willis North America | January 2014

HEALTH OUTCOMESREVITALIZE YOUR WELLNESS PROGRAM IN 2014

Want to refresh your current wellness program? First, you want to consider the program options and design that make sense for your worksite. An effective, sustainable worksite wellness program is one that is comprehensive and customized to your employees. A successful program is one that grows each year to continually engage and maximize participation. A common challenge that many employers face is when a wellness program becomes stale or repetitive. Below are a few quick, simple and free ideas to help get your program energized in the New Year.

Conduct an informal focus group. Drop in staff meetings and ask employees what they are interested in hearing about and how they prefer to receive updates on worksite wellness offerings. Ask them about any incentives you may be considering for the future or how they feel things have been going so far with your wellness strategy.

Surprise your employees. Make them laugh and focus on some new ways to communicate. Consider posting a blog, starting a Facebook page for your program or sending text message reminders. Use sidewalk chalk messages by the entrances to liven things up. Leave notes or surprises in people’s work areas. Invite managers and supervisors to share a “weird but true” health tip before the start of every staff meeting.

Share a personal story. Invite someone from your senior leadership to share their personal story about a successful health change they have made or a challenge they are currently working on. Sharing with your employees that we all have personal health goals we need to work on and that it is hard to change behaviors will help build a culture of health in the workplace. Invite others to share their stories for future communications.

Build a Wellness Buddy Program. Invite those that seem to always attend or participate in wellness programs to bring a buddy in order for both of them to earn extra recognition. Noting participant names publically, sharing an event picture album or even printing out a homemade certificate can go a long way to helping people feel they are engaged and part of something positive.

Make it family friendly. Promote a community walk or bike ride and encourage employees to bring their families. These events can become annual activities that people look forward to. Also, remember to share information in your communications about healthy options that appeal to parents, grandparents, aunts and uncles, such as tips for getting kids more active, packing healthy lunches, making wholesome snacks and guidance for dealing with bullying and self-esteem issues.

Doing something, even on a small scale, can often help you kick start the momentum towards a more comprehensive, long-term investment in a healthier workforce. To learn more about the resources and tools available to help you get started, contact your Willis client service team.

Willis North America | January 20144

LEGAL & COMPLIANCECMS CREDITABLE PRESCRIPTION DRUG COVERAGE: FILING REMINDER

The Medicare Prescription Drug Improvement and Modernization Act of 2003 requires all plan sponsors – even those who did not provide retiree prescription drug benefits – to distribute notices to Part D-eligible individuals explaining the creditable coverage status of their prescription drug benefits. This notice tells recipients whether or not the plan’s prescription drug coverage is considered “creditable” as measured against Medicare’s Part D standard prescription drug benefit. Creditable status is important, since a Part D-eligible individual will be assessed a Part D late enrollment fee if he or she initially waives enrollment in Medicare’s prescription drug benefit and later enrolls after a break in creditable coverage of 63 days or longer.

Additional Reporting Duty to CMS

A second and perhaps more easily overlooked disclosure requirement is that group health plan sponsors providing prescription drug coverage to Medicare Part D-eligible individuals must also report creditable status directly to CMS. Specifically, the group health plan must communicate whether its prescription drug coverage qualifies as creditable or non-creditable. The government needs this information in order to effectively coordinate Medicare Part D enrollment.

All plan sponsors providing prescription drug coverage are required to make this disclosure – even if they do not make coverage available to retirees. Reporting to CMS about the plan’s creditable status is due within 60 days after the first day of the new plan year. Calendar-year plans must submit the disclosure to CMS by March 1, 2014. Additional information about the CMS reporting duty is also available on Willis Essentials.

WELLNESS INCENTIVES – REQUIRING EMPLOYEES AND SPOUSES TO MEET THE WELLNESS STANDARD

Plan sponsors frequently want to design a wellness program that does more than merely provide an opportunity for spouses to participate in a wellness program. Many would like a plan that looks similar to one of the following:

� The plan is based on a health-contingent wellness program that provides incentives for completion of activity-only and outcomes-based wellness programs. The incentive would be earned only when both employee and spouse achieve the standard/complete the activity. So, in cases where the employee elects coverage for himself and his spouse, but only the employee participates in the wellness program, the plan sponsor would not provide any wellness discount.

Or:

� The plan sponsor averages the wellness scores across all family members, and a wellness award is based upon the average score obtained by the family.

Unfortunately, these wellness plan designs for health-contingent wellness programs must be considered carefully and only adopted with the concurrence of legal counsel since the publication of the final wellness regulations. Under the final regulations, when a health-contingent wellness incentive is offered, each family member who is eligible to participate in the wellness program must have a separate opportunity to qualify for the reward. However, if the wellness reward is withdrawn for participating family members because another family member did not participate in the wellness program, then the plan has not actually offered each separate individual the ability to participate in the wellness program.

In the past, some employers have used this type of an “all or nothing” wellness program design as a means to add a behavioral economics tool – sometimes called “social norming.” The tool is designed to augment the financial incentive so that the incentive can change health behaviors.

Continued on page 5

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The new guidance confirms that if a plan sponsor wants to use a family incentive within a health-contingent wellness program, any family incentive must be “apportioned” in a “reasonable” manner. Where a spouse or children participate in the wellness program, the applicable rate for determining the maximum financial incentive would be the tier that the employee elected (employee + 1, employee plus spouse, full family). However, where one family member meets the requirements but another does not, the incentive is to be adjusted. The guidance is vague and states that “…these final regulations do not set forth detailed rules governing apportionment of the reward under a health-contingent wellness program. Instead, plans and issuers have flexibility to determine apportionment of the reward among family members, as long as the method is reasonable.” 78 Fed. Reg. 33158, 33162. The meaning of “reasonable” is determined under a facts and circumstances test. If a health-contingent plan design is offered, the most cautious approach would be to pro-rate the family incentive among the participating family members.

COBRA PREMIUMS AND WORKING SPOUSE CONTRIBUTIONS

If an employee’s spouse is offered coverage through his/her own employer and the spouse declines that coverage, some plans require that the employee pay a “working spouse” contribution in addition to the regular premium contribution that the plan requires for that dependent. The purpose of this contribution or surcharge is to discourage dependent spouses from waiving their employer coverage and instead require the spouse’s plan to pay for its fair share of the spouse’s health coverage as the primary plan. In the event the employee’s spouse becomes eligible for COBRA, however, that working spouse contribution cannot be included in calculating the spouse’s COBRA premium, regardless of whether the coverage is being provided through an insured or a self-funded plan. The plan cannot charge a COBRA premium that is greater than the cost to the plan for coverage of similarly situated beneficiaries, plus 2% to cover the plan’s administrative costs.

For insured benefits, the plan should charge the same premium rate that the insurance company charges (plus a 2 % administrative fee) by looking to the same groups and group rates that the insurer used to determine premiums – for example, rates that vary by family unit or region where the employee resides. The COBRA premium rate structure should mirror the insurer’s rate structure, and since insurers do not surcharge for spouses who have coverage through their employers (and are probably prohibited from doing so under state insurance law), a working spouse surcharge would likely violate COBRA law. In addition, under ERISA Section 604, self-funded plans are required to use a COBRA premium that is a reasonable estimate of the cost of providing the health coverage, determined on an actuarial basis or based on the plan’s costs for the preceding determination period (plus a cost-of-living adjustment). The cost for a health plan to provide coverage to an employed spouse is the same as the cost for a health plan to provide coverage to an unemployed spouse. Therefore, the additional cost to the sponsor’s plan caused by the working spouse not enrolling in his/her employer’s plan is not the type of cost that the law considers appropriate for inclusion in the COBRA premium. For this reason, inclusion of a working spouse surcharge in the COBRA premium of a self-funded plan would likely violate COBRA law.

Legal & Compliance – continued from page 4

Willis North America | January 20146

WEBCASTS

EXCHANGES – PUBLIC AND PRIVATE – WHO ENROLLED, WHAT’S NEXT?

Tuesday, January 21, 20142:00 PM Eastern

Presented by:Rob HarkinsVice President of Private ExchangesWillis Human Capital Practice

Jay Kirschbaum, JD, LLM, FLMIPractice LeaderNational Legal and Research GroupWillis Human Capital Practice

Exchanges have been a hot topic in the last year; however, questions remain. How have public exchanges impacted employer health care to date? Are private exchanges set up to be successful long-term? Join us as we review today’s public and private exchange marketplace.

During this event, we will:

� Discuss why many companies are considering private exchange models, and potential advantages and obstacles to weigh when exploring if a private exchange is a good fit for your organization

� Review employer attributes of early public exchange adopters and lessons learned from these organization

� Explore the financial plusses and minuses when considering a private exchange and strategies to control cost

� Review the ins and outs of a Private Exchange – How to Administer a Private Exchange under ERISA, HIPAA, the IRC, etc.

To RSVP, click here.

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

HEALTH CARE REFORM SHARED RESPONSIBILITY DELAY: ARE YOU USING IT TO YOUR ADVANTAGE?

Tuesday, February 18, 2014 2:00 PM Eastern

Presented by: Jimmy PhillipsNational Practice LeaderReporting and Analytics ConsultingHuman Capital Practice

By now we are all aware of the recent delays associated with the PPACA employer mandate. Some organizations may use the delay to wait another year before evaluating the impact this law will have on their business. However, as someone wisely observed, “A year from now you may wish you had started today.” Join us to learn how to take advantage of the delay using a more strategic approach.

During this session, participants will learn:

� What financial and data analysis is necessary to understand the cost impacts on an organization’s pay-or-play decision

� What organizations should do between now and 2015 to best prepare for ongoing PPACA regulations

� How PPACA may impact an organization’s Human Capital strategy and overall business results

To RSVP, click here.

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

This program has been approved for 1 recertification hour toward PHR, SPHR and GPHR recertification through the Human Resource Certification Institute (HRCI). For more information about certification or recertification, please visit the HRCI homepage at www.hrci.org. This applies to both Webcasts.

7Willis North America | January 2014

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, CT203 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, MD410 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 7700

Cleveland, OH216 861 9100

Columbus, OH614 326 4722

Detroit, MI248 539 6600

Grand Rapids, MI616 957 2020

U.S. HUMAN CAPITAL PRACTICE OFFICE LOCATIONS

KEY CONTACTS

Milwaukee, WI262 780 3476

Minneapolis, MN763 302 7131763 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

51039/01/14

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.