1Willis North America | June 2014

HRFocusHUMAN CAPITAL PRACTICE

June 2014 www.willis.com

HR CORNEROVERALL SPENDING ON TRAINING JUMPS 15% IN EFFORT TO STEM SKILLS GAP, SAYS STUDY

Investment in employee development is rising, as employers strive to close a growing skills gap, a new survey found. On average, overall spending on training was $1,169 per learner in 2013 – a 15% jump from the previous year, according to “The Corporate Learning Factbook 2014: Benchmarks, Trends, and Analysis of the U.S. Training Market,” by Bersin by Deloitte, Deloitte Consulting, LLP (www.bersin.com).

“The problem many organizations face today is not a shortage of people; it is a shortage of key skills, especially those in engineering, scientific, and technical fields,” said Karen O’Leonard, vice president, benchmarking and analytics research, Bersin by Deloitte. “Businesses are responding by investing more. And in mature organizations, this investment is not just short-term training – it involves building a ‘supply chain’ of skills to fill these gaps for the long term.”

On average, organizations that have mature, effective learning and development functions spent $1,353 per learner, according to the study.

That figure is 37% more than the least mature groups.

In addition, Bersin by Deloitte found that many of the organizations with mature learning and development functions “have also adopted a ‘continuous capability development’ approach that makes them more innovative, responsive, and agile as their markets change. Learning in this model includes development planning, formal interventions, rotational assignments, coaching, mentoring, and much sharing and collaborative learning.”

At $1,847 per learner on average, technology companies had one of the highest per-learner expenditures among the various industry sectors, the survey found.

HR CORNEROverall Spending on Training Jumps 15% in Effort to Stem Skills Gap, Says Study ..................................................................... 1Want a Motivated, Productive Workforce? Use Employee Recognition and Praise ................................................... 2

HEALTH OUTCOMESWellness Culture Barriers ........................................................................ 4

LEGAL AND COMPLIANCEIRS Announces HSA Inflation Adjustments for 2015 ............................... 5DOL Proposes Changes to Corbra Notices .............................................. 6

SINCE YOU ASKEDWhat are PPACA's 2015 Out-of-Pocket Limits? ....................................... 7

WEBCASTS .........................................................................8

CONTACTS .......................................................................... 9

Continued on page 2

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Another key finding of the study was that the largest percentage of training budgets went to leadership development. Bersin by Deloitte reported that an average of 35 cents of every training dollar was spent on developing leaders at all levels. “Leadership has become an even bigger issue as the economy recovers and many firms look to expand globally.”

In related news, ASTD’s 2013 “State of the Industry” report, released at the end of 2013, stated that U.S. organizations spent $164.2 billion on employee learning and development in 2012. Per-employee spending rose slightly from $1,182 in 2011 to $1,195 in 2012.

Employees received an average of 30.3 hours of training, and those who work for ASTD’s BEST Award-winning organizations had even more hours of training – a whopping 57.7 hours per learner.

HR Corner – continued from page 1

However, when employees in the same exercise were asked what affected their morale the most, their answers followed this pattern:

1. Full appreciation of work done2. Feeling of being in on things3. Help on personal problems4. Job security5. High wages6. Interesting work7. Promotion in the organization8. Personal loyalty of supervisor9. Good working conditions10. Tactful discipline

The top three factors marked by the employees were the last three that their supervisors felt important for them. Do you think team leaders gauge the motivators any better today?

Continued on page 3

WANT A MOTIVATED, PRODUCTIVE WORKFORCE? USE EMPLOYEE RECOGNITION AND PRAISEBY BOB URICHUCK

If you want a happier, more productive work environment that motivates and retains employees, focus on recognizing what they and – just as importantly – you do right. While we see ranking of the factors that drive performance shifting with each study over time, recognition holds its own as a powerful motivator at all levels of the organization.

A survey in the late 90s of thousands of workers across the U.S. compared supervisor and employee rankings on factors that motivate employees. The typical supervisory group ranked the factors in the following order:

1. High wages2. Job security3. Promotion in the organization4. Good working conditions5. Interesting work6. Personal loyalty of supervisor7. Tactful discipline8. Full appreciation of work done9. Help on personal problems10. Feeling of being in on things

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HR Corner – continued from page 2

Continued on page 4

Wanted: More Praise and a Sense of Being Valued

Studies conducted since the one above show the ranking and interpretation of the factors varies by generation and gender. And, as found in the 2013 U.K. survey by the Institute of Leadership and Management (ILM), how much employees enjoy their role is now a top motivator.

Furthermore, the survey reported: “When asked for one thing that would motivate them to do more, 31% of respondents suggested better treatment by their employer, including more praise and a sense of being valued, would be the most motivational thing their organization could do.”

Employees want full appreciation of the work they’ve done. This is recognition – a key factor in maintaining a motivated staff.

Think about it. When someone gives you a compliment or recognizes you for doing something, how do you feel? Imagine, for a moment, being complimented by all your family, friends, staff and customers all day, every day. Without it going to your head, how do you think you would perform?

Recognition is positive reinforcement. Positive reinforcement of actions gets those actions repeated. Recognition and praise reinforces our beliefs about ourselves and assures us we are better than we thought we were.

Positive reinforcement is what builds our self-esteem. Our self-esteem is the way we see and feel about ourselves, either internally through our own beliefs, or externally through what we accept as the beliefs of others. If we feel good about ourselves and we believe others feel good about us, we perform better than we would when seeing only the opposite side of the coin.

Self-esteem Fuels the Engine

People perform in a manner consistent with their self-conception. So, the key to better performance is helping people build their self-esteem.

Unlike money, which is an external motivator and never lasting, one’s self-esteem is internal, and internal motivation is everlasting. In order to build a healthy self-esteem, one needs recognition and praise, both from one’s self and from others. You can help build someone’s self-esteem and self-motivation not only through

recognition, but also through advancement and responsibility, where that person can cultivate a sense of achievement and personal growth.

The problem is that in today’s society we are deprived of positive feedback. Compliments, recognition and praise are not part of our day-to-day culture. For some reason, many people find it difficult to give compliments, recognition and praise.

My assumption is that it is hard to give something you don’t have to give. How can you give someone else a compliment if you can’t first compliment yourself? This goes back to our own self-esteem. We must first feel good about ourselves and tell ourselves so before we can feel good about somebody else and tell them that.

Another problem is we live in a society that has influenced us to look for the things people do wrong instead of the things they do right. How do you think it affects someone’s self-esteem if they are always recognized for the things they do wrong? Can you see them looking for the good in others and praising them accordingly? More likely they will find something to criticize in others.

These same factors influence our self-talk too. We tend to criticize ourselves for the things we do wrong. But how often do we praise ourselves for the things we do right? Let’s pat ourselves on the back for the good that we do.

The more we acknowledge ourselves, the more our self-esteem grows; and the more our self-esteem grows, the more confident we feel, which in turn helps us to give more confidence and praise to others. This sort of self-recognition goes a long way, just as long as it doesn’t get out of hand.

Creating the Right Environment

You cannot motivate another person to do anything. We all know we can only accomplish so much on our own and that everyone is a product of their environment. You have the opportunity to create the environment. You can only provide the means and the atmosphere in which others motivate themselves.

You are the leader and must set the example by demonstrating the appropriate behavior – and the appropriate behavior here is recognition and praise.

From this point on you will notice that employees will go out of their way to do a great job, because you took the time to thank them. Actions that get recognized or rewarded get repeated.

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According to Willis’s 2014 Willis Health and Productivity Survey, 68% of all responding employers have some sort of wellness program in place. You might assume then, that all of these employers have a culture of wellness that is supportive and reflective of the wellness programs that they promote. Although that may often be true, many good wellness programs end up struggling to maintain engagement and long-term health improvements because the company culture fails them. Barriers to wellness can occur when employers fail to understand the impact of workplace culture and how it can affect the outcome of their wellness program.

Let’s take a look at a few of the most common workplace culture barriers and review tactics to address these obstacles.

Cafeteria Bombs

A workplace cafeteria can enhance your wellness initiatives not only as a support for healthy eating but also as a way to boost productivity. Imagine how much time we would all have if we didn’t run out for lunch everyday (not to mention the cost savings!). Alternatively, cafeterias can be a huge barrier when there is a disconnect between the food offerings and the weight loss, weight management or nutrition education programs that you are implementing. Whether the cafeteria is run by your own staff or contracted out, getting your chef or meal planners engaged in your program is a must.

� Discuss options to move toward healthier choices for your employees.

� Determine if there is a way to display nutritional information on daily menu items.

� Ask the chef for ideas to “make over” some of the hot selling items in the cafeteria.

� Ask if the chef would be interested in offering a healthy cooking demo or taste testing options.

Some groups have partnered with local farmers or co-ops to bring more fresh or organic vegetables, fruits and even meats to their cafeterias. A few others have gone so far as to create community gardens of their own in which employees share the work and the produce.

Donut Fridays are never a wise idea…especially in the midst of a weight loss challenge!

The “Busy”ness Burnout

For some organizations, the programs in place do not fit their business models. Imagine a manufacturing company with a 24/7 line that cannot function in partial operating mode. If this group is relying on wellness education lunch n’ learns as its

HEALTH OUTCOMESWELLNESS CULTURE BARRIERSBY HEIDI GUETZKOW, TRS, SR. HEALTH OUTCOMES CONSULTANT

HR Corner – continued from page 3

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Continued on page 6

main modality, the employees are legitimately too “busy” due to the nature of work to attend such functions. Instead, consider creating video shorts that could be viewed during scheduled breaks or making the videos available on platform so those employees could view even during off hours. The barrier in this case was caused by selecting a program that was not appropriate for the business environment. Other options include having supervisors share health and safety messaging at the start of every shift. This will undoubtedly be more impactful than an empty conference room!

Some organizations use busyness as their excuse not to implement any type of program. Whether it is because they function on billable hours or are trying to meet sales quotas, usually some type of intervention can be done. These groups often respond well to “activity tracking device” wellness challenges. These employees are already engaged in meeting goals and tend to like the competition aspect of such events.

Manager Mayhem

A manager can also be a wellness buster. Unless you are willing to invest in and groom your top talent into true wellness leaders, whatever you are doing on the wellness front will likely fail. Be candid with yourself and your employer as you evaluate your

LEGAL AND COMPLIANCEIRS ANNOUNCES HSA INFLATION ADJUSTMENTS FOR 2015

On April 23, 2014, the IRS announced the health savings account (HSA) inflation adjustments for 2015. By law, the IRS must publish the annual inflation adjustments relating to HSAs no later than June 1 for the following calendar year. This chart summarizes the changes for 2015.

Calendar Year 2015 Calendar Year 2014

Self-only Family Self-only Family

Annual Contribution Limit

$3,350 $6,650 $3,300 $6,550

HDHP Minimum Annual Deductible

$1,300 $2,600 $1,250 $2,500

HDHP Maximum Out-of-Pocket Limit

$6,450 $12,900 $6,350 $12,700

Catch-up Contribution

$1,000 $1,000

Health Outcomes – continued from page 4

promotional practices and the impact leadership can have on your entire workforce. Although some wellness initiatives can serve as great team building activities, they will likely not make much difference if the general population feels defeated.

The most important step employers can do is to consider their workplace culture as they plan their wellness initiatives. Given your present workplace culture, be honest about what can and cannot be changed. Do not let any barrier you uncover become a such huge roadblock that you abandon your program. Instead, creatively work around it to get the most engagement from your workforce. Your employees will appreciate your efforts and productivity should sky rocket! To learn more about how to build and maintain a culture of wellness at your organization, contact your Willis client service team.

Willis North America | June 20146

Legal and Compliance – continued from page 5

The Annual Contribution Limit is the maximum amount of tax-favored contributions that can be made to an individual’s HSA for a calendar year. Contributions from all sources are aggregated when determining whether the limit is met. An individual may incur excise taxes on excess contributions. Catch-Up Contributions increase the Annual Contribution Limit for individuals 55 or older. The Catch-Up Contributions Limit is not inflation-adjusted. When enacted, the limit was set at $500 for 2004, with $100 annual increases. In 2009, it reached the current $1,000 maximum.

The HDHP Minimum Annual Deductible and Maximum Out-of-Pocket Limit refer to features that a health plan must have in order to qualify as a HDHP. Coverage under an HDHP is one of the conditions that an individual must meet in order to be eligible for tax-favored HSA contributions. The limits on these items are also inflation-indexed, with the potential to change each year. Employers that maintain HDHPs need to know these adjustments so that they can make any changes needed for their plans to remain HDHPs.

The IRS announces the adjustments for HSAs much earlier in the year than it announces the adjustments for other types of benefits programs. (Inflation adjustments for most plans usually are announced in October or November. A chart of those limits appears in the Willis Health and Welfare Calendar, available from your Willis representative.) The earlier timing of the announcement for HSAs is mandated by legislation that Congress passed at the end of 2006 (see Willis’s Employee Benefits Alert, Issue 91, “Health Savings Account Legislation Makes HSAs More Flexible”). The legislation revised the provisions governing HSAs so that the IRS now must publish the annual adjustments no later than June 1 for the following calendar year.

QUALIFIED BENEFICIARIES are defined as covered employees and their spouses and dependent children who are covered under a plan on the day before a qualifying event, such as a termination of employment or reduction in hours, that causes a loss of coverage under the terms of the plan.

Until regulations are finalized and effective, the DOL will consider use of the model notices available on its website, appropriately completed, to constitute compliance with the notice content requirements of COBRA. Use of the model notices is not required and they are provided solely for the purpose of assisting employers with complying with COBRA’s notice requirements.

DOL PROPOSES CHANGES TO COBRA NOTICES

On May 2, 2014, the U.S. Department of Labor (DOL) issued proposed regulations to amend the notice requirements under the Consolidated Omnibus Budget Reconciliation Act (COBRA). The DOL updated its model general and election notices to inform individuals eligible for COBRA continuation coverage that they may choose to instead purchase coverage through the public exchanges (also known as the Health Insurance Marketplace), where workers and families may be eligible for financial assistance that would not otherwise be available for COBRA continuation coverage.

COBRA requires that a group health plan provide each covered employee and spouse (if any) with a written notice of COBRA rights “at the time of commencement of coverage” under the plan (general notice). A group health plan must also provide qualified beneficiaries with a notice describing their rights to COBRA continuation coverage and how to make an election (election notice). Additional information about COBRA and its requirements can be found on Willis Essentials.

The updated model notices are posted on the DOL website:

� Model general notice � Model election notice

The notice of proposed rulemaking can be viewed here.

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SINCE YOU ASKEDWHAT ARE PPACA’S 2015 OUT‑OF‑POCKET LIMITS?

With the IRS’s recent announcement regarding the health savings account (HSA) inflation adjustments for 2015 (see “IRS Announces HSA Inflation Adjustments For 2015” in this issue of HR Focus), the National Legal and Research Group was asked what the out-of-pocket (OOP) limits for a non-grandfathered, non-high deductible health plan (HDHP) are for 2015.

The Patient Protection and Affordable Care Act (PPACA) includes among its coverage reform provisions a section that disallows cost sharing that exceeds certain thresholds on essential health benefits under a non-grandfathered group health plan. (An overall limit on cost sharing is referred to as an OOP maximum.) This provision and the specified dollar limits on OOP maximums were effective for plan

years starting on or after January 1, 2014. For 2014 plan years, the thresholds were set at $6,350 for self-only coverage and $12,700 for other coverage. Additional information about the OOP limits can be found in Willis Human Capital Practice HR Focus, August 2013, Issue 74, “Since You Asked: How Does A Plan Comply with PPACA’s Out-of-Pocket Maximums?”

For the 2014 plan year, PPACA specifically tied the cost-sharing limits to the 2014 OOP limits for HDHPs. However, while the inflation adjustments for the maximum HDHP OOP limits are tied to the Consumer Price Index for All-Urban Consumers (CPI-U), the cost-sharing limits under PPACA use the “premium adjustment percentage” calculated by the Department of Health and Human Services (HHS). The “premium adjustment percentage” is defined as the percentage (if any) by which the average per capita premium for health insurance coverage in the U.S. for the preceding calendar year exceeds such average per capita premium for 2013. This means that for 2015 and beyond, PPACA’s OOP maximum limit will no longer match the HDHP OOP maximum limit. HHS recently announced that the 2015 PPACA OOP maximum limit will be $6,600 for self-only coverage and $13,200 for other coverage.

PPACA’s cost-sharing limits have no effect on the IRS’s HDHP OOP limits. This means that for 2015, a non-grandfathered HDHP cannot exceed the IRS’s limits for such plans, $6,450 for self-only coverage and $12,900 for other coverage. However, a non-grandfathered, non-HDHP group health plan can have OOP limits up to $6,600 for self-only coverage and $13,200 for other coverage. Grandfathered, non-HDHP group health plans will not be required to impose any OOP maximum limits.

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COMPREHENSION AND EDUCATION:COMMUNICATING HEALTH CARE REFORM

Tuesday, June 17, 2014 2 PM Eastern

Presented by:Holly Flontek, MHS, GBASenior Communication ConsultantHuman Capital Practice

Affordable Care Act, Obamacare, Health Insurance Marketplaces, Exchanges, Minimum Essential Coverage…is your head spinning yet? Health care reform lingo can be difficult to keep up with, so how should you communicate these topics to your employees without sounding like a professor?

During this session, we will discuss:

� The complex communication requirements of Health care reform

� How to continue the Health care reform conversation with employees

� Best practices to educate employees on benefit programs and how health care reform can assist with engagement

To RSVP, click here.

NOTE: Advance RSVP is required to participate in this call. Registration ends 1 hour prior to the call start time.

WELLNESS PROGRAMS – AFTER (AND BEYOND) NEW REGULATIONS

Wednesday, July 15, 2014 2 PM Eastern

Presented by:Beth Stewart, MS, RDSenior Health Outcomes ConsultantWillis Human Capital Practice

Jason Sheffield J.D. National Legal and Research Group Willis Human Capital Practice

For two decades, increased health insurance expenses have outpaced workers’ wages, the consumer price index, and the cost of doing business. With the increased costs associated with health care reform, it’s no wonder employers are obsessed with controlling health care expenses. Yet the 2014 Willis Health and Productivity Report reports that while 93 percent of employers believe healthier employees are more productive, they are not measuring the impact of productivity on employees’ absenteeism, presenteeism, and FMLA requests. Additionally, employers now have the added opportunity to take advantage of changes permitted under PPACA which provide more opportunities to utilize effective Wellness Programs.

During this session, we will review:

� Why the new focus is on operational impact (a CEO concern) as opposed to medical plan costs (a CFO concern)

� Ways to help employees minimize their health risks to reduce corporate liability

� Health care reform compliant wellness programs � Compliance concerns and challenges

To RSVP, click here.

NOTE: Advance RSVP is required to participate in this call. Registration ends 1 hour prior to the call start time.

Both of the above programs have 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.

WEBCASTS

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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

Overland Park, KS 913 339 0800

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

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 955 0111

San Jose, CA408 436 7006

Seattle, WA800 456 1415

50327/05/14

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.