Health-benefit costs rose 3.4% in 2020 for firms with 50-plus employees

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Total health-benefit costs rose 3.4 percent, on average, in 2020, reaching $13,674 per employee among all U.S. employer health-plan sponsors with 50 or more employees. That’s according to the annual Mercer “National Survey of Employer-Sponsored Health Plans 2020,” which the firm released Dec. 8. The 3.4 percent figure represents “the lowest annual health-cost increase in over two […]

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Total health-benefit costs rose 3.4 percent, on average, in 2020, reaching $13,674 per employee among all U.S. employer health-plan sponsors with 50 or more employees.

That’s according to the annual Mercer “National Survey of Employer-Sponsored Health Plans 2020,” which the firm released Dec. 8.

The 3.4 percent figure represents “the lowest annual health-cost increase in over two decades,” per an infographic from Mercer. Employers also demonstrated “concern” about workforce behavioral health as the pandemic continues to disrupt lives and business.

Mercer conducted its “flagship survey” of 1,812 U.S. employers between July and September 2020.

Early results from that same survey indicated the nation’s employers expect “moderate” health-benefit cost growth for 2021 of 4.4 percent, on average, compared to 2020. Mercer had announced the early findings Oct. 1.

The increase, based on 1,113 employer responses since early July, is “largely in line” with the average annual-cost growth over the past six years.

Large employers — those with 500 or more employees — reported a cost increase of just 1.9 percent, their lowest increase since 1997, as plan members avoided health-care facilities due to the pandemic, per the Dec. 8 information.

Large employers typically self-fund their plans, which means they may see costs fall as utilization falls, unlike fully insured employers that pay a fixed premium. Survey results suggest that many large employers plan to use money saved in 2020 to invest in programs to “support and engage” employees in 2021.

“The need to minimize exposure to the virus and ease the strain on overloaded health facilities caused many people to forgo care this past year, which translated to slower cost growth in 2020. Heading into 2021, that’s allowed employers to avoid cost-management tactics like shifting cost to employees,” Tracy Watts, a senior consultant at Mercer, said. “Instead, we’re seeing many focus on supporting employees with additional resources to help keep them engaged, productive, and healthy during these tough times.”

Amid concerns that workers are not getting the support they need, employers are making behavioral health a “top priority” in 2021, providing manager training and adding new resources. Child-care issues remain a “tough problem,” per the Mercer infographic.

The survey also found that the top five well-being priorities for 2021 include behavioral health (75 percent); diabetes (49 percent); financial well-being (48 percent); nutrition and weight management (40 percent); and physical activity (39 percent).

Telemedicine

Telemedicine-utilization rates are “climbing,” according to the Mercer data, and employers are generally pleased with how their programs are performing. Many have waived copayments to encourage use, and most foresee a larger role for all forms of virtual care going forward.

The survey found the average percentage of eligible members (including family members) using the service at least once during the plan year was 14 percent during the first half of 2020. That figure is up from 9 percent for all of 2019 and 2018; up from 8 percent in 2017; and up from 7 percent in 2016.

The survey also found that most employers were satisfied with the performance of their telemedicine vendor during the pandemic. The data indicates that 25 percent were very satisfied; 48 percent were satisfied; 2 percent were not very satisfied; and 24 percent didn’t have enough feedback to say.

The Mercer survey also found that 80 percent of employers anticipate a larger role for virtual care in general in their health programs in the future, per the infographic.

SUNY provost appointed acting president of SUNY Poly

Employee Benefits & Human Resources, Health Care, Subscriber Only

MARCY, N.Y. — SUNY Polytechnic Institute (SUNY Poly) begins the new year with new leadership. The SUNY board of trustees on Dec. 29 appointed SUNY Provost Tod Laursen as SUNY Poly’s acting president. His appointment is effective immediately. A search for a permanent SUNY Poly president will begin “shortly,” SUNY said in a news release.

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MARCY, N.Y. — SUNY Polytechnic Institute (SUNY Poly) begins the new year with new leadership.

The SUNY board of trustees on Dec. 29 appointed SUNY Provost Tod Laursen as SUNY Poly’s acting president. His appointment is effective immediately. A search for a permanent SUNY Poly president will begin “shortly,” SUNY said in a news release.

Laursen assumes the duties previously held by Jinliu (Grace) Wang, who had been serving as interim president of SUNY Poly for more than two years. Wang stepped down from her position Nov. 30 to become executive VP at Ohio State University.

In her new role, Wang joins former SUNY Chancellor Kristina Johnson who became the 16th president of Ohio State University at the start of this academic year.

Laursen will work with SUNY Chancellor Jim Malatras to ensure a smooth transition of his current responsibilities as senior vice chancellor and provost of SUNY system administration. Malatras has appointed Fatemeh (Shadi) Shahedipour-Sandvik as provost-in-charge, SUNY said.

Laursen has served as senior vice chancellor and provost since September 2018. He joined SUNY from Khalifa University (KU) in Abu Dhabi, United Arab Emirates, where he was the founding president and served as its leader since 2010.

Prior to becoming president of Khalifa University, Laursen was a member of the faculty of Duke University between 1992 and 2010, during which time he had appointments in civil engineering, biomedical engineering, and mechanical engineering.

He served as chair of Duke’s department of mechanical engineering and materials science from 2008 to 2010. He also served as senior associate dean for education in the Pratt School of Engineering from 2003 to 2008. In the latter capacity, he had oversight responsibility for all undergraduate and graduate engineering programs at Duke, SUNY said.

Laursen earned his Ph.D. and master’s degrees in mechanical engineering from Stanford University and a bachelor’s degree in the same subject from Oregon State University. He specializes in computational mechanics, a subfield of engineering mechanics involving development of new computational algorithms and tools used by engineers to analyze mechanical and structural systems.

He has published more than 100 articles, book chapters, and abstracts, and has authored or co-edited two books. His particular focus is development of methods to analyze contact, impact, and frictional phenomena in highly nonlinear and complex systems.

Laursen is a fellow of the American Society of Mechanical Engineers, the International Association of Computational Mechanics, and the U.S. Association for Computational Mechanics. Additionally, he has served on the scientific advisory committees of several of the “most important” national and international congresses in computational mechanics, SUNY said.

VIEWPOINT: Managed Accounts in 401(k) Plans & the Choice they Offer Plan Advisers

Business Mentors, Energy, Environment & Sustainability, Insurance & Financial Services, Subscriber Only

In a recent PlanAdviser magazine article, it was reported that a participant in Nestlé’s 401(k) Savings Plan had filed a proposed class-action lawsuit. It alleged a breach of fiduciary duties under the Employee Retirement Income Security Act (ERISA). Frankly, by itself, an article like this wouldn’t have caught my attention. Participant lawsuits alleging fiduciary wrongdoing are so

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In a recent PlanAdviser magazine article, it was reported that a participant in Nestlé’s 401(k) Savings Plan had filed a proposed class-action lawsuit. It alleged a breach of fiduciary duties under the Employee Retirement Income Security Act (ERISA).

Frankly, by itself, an article like this wouldn’t have caught my attention. Participant lawsuits alleging fiduciary wrongdoing are so common now that I hardly notice anymore. But this one was different because among its allegations, it charged that the plan fiduciaries had allowed excess fees to be charged to the participants for the managed accounts. The article states that the participants in the plan were offered a managed-account service that was provided by Voya Retirement Advisors. The annual fees were 0.5 percent of assets up to $100,000, 0.4 percent on the next $150,000, and 0.25 percent on assets above $250,000.

Managed accounts have become an increasingly popular service for plan advisers to recommend to their clients. In general, they aim to solve the problem of plan participants lacking the knowledge to invest their retirement money appropriately. In that sense, they compete with target-date-funds (TDFs), robo-advisers, and educational tools such as asset-allocation models.

To my knowledge, there are few who doubt the need of participants of 401(k) and related defined-contribution plans for professional guidance to help select investments among the plan’s menu of options. As we all know, while 401(k) plans have grown parabolically since the mid-1980s, financial literacy in America hasn’t had the same level of growth.

The opportunity is so compelling that I have heard — and I bet you have, too — that some plan advisers are now earning more from managed-account fees charged directly to the participants than they are from the fees they charge for traditional plan services. That is because part of the fees charged by the managed-account service provider is shared with the plan adviser for “distributing” the service. This distribution role subsequently creates a conflict of interest for the adviser, who stands to gain financially from the plan fiduciaries authorizing its availability to its participants.

So, are managed accounts a valuable service that addresses a substantial need among plan participants, or are they an easy sell that plan advisers can use to rev up their income, or both?

The consumers of financial advice are simply seeking one thing when they engage with an adviser — to get honest, expert advice on what to do. And that should be the goal of the plan adviser when working with plan participants.

But unfortunately, that isn’t always how managed accounts are being pitched to plan advisers. Instead, they are presented as a way to increase our fees — to sell our managed-account service and make more money. It is meant to play to our selfishness. If we take the bait, it is a shortsighted mistake and will hurt our profession in the long run.

Plan advisers are a relatively new specialty, having our roots in the broader financial-advice industry. Our newness allows us the opportunity to break from that past and build something much better. But that requires us to take a fork in the road before we have built traditions, cultures, and reputations. Stay on the path built by the broader financial-advisory industry or exit now and take the path of increased reputation, respect, and even income.

Professionalism requires us to put the clients’ interests first, which means to improve their financial standing or decline the work. It requires competence, objectivity, and transparency. But financial advisers, by and large, have abandoned this route, and that is precisely why plan participants are skeptical to seek out the advice of their plan’s adviser. We have a fresh opportunity to choose the better route, and I believe we would be better off for it as would those we seek to serve.

This choice is played out in the evaluation of managed accounts. Plan advisers should be the objective scrutinizer, not the sales team. We are professionals, offering something of value to our clients. Let’s not allow ourselves to become the distribution arm for anyone — record keepers, mutual-fund companies, broker/dealers, or managed-account providers.

I’m not against managed accounts. But let them stand on their own and compete among other managed accounts and other products, like TDFs that are trying to solve the same problem.

Our job is to evaluate and advise. That is professional work, honest work, and valuable work. It’s also what our clients want from us. Let’s forgo a few bucks now so that it can compound into big bucks in the future.

Brian Allen (www.pension-consultants.com) is the author of “Rewarding Retirement: How Fiduciary Committees Can Elevate Workers, Companies, And Communities,” and founder/chairman of Pension Consultants, Inc., a fee-only plan adviser.

Briggs & Stratton offers some MVCC students employment following welding internships

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UTICA, N.Y. — Some students at Mohawk Valley Community College (MVCC) have secured positions with the Sherrill location of Briggs & Stratton Corp. following their welding internships. MVCC says it partnered with Briggs & Stratton for the welding internships. Briggs & Stratton — headquartered in Wauwatosa, Wisconsin — says it is the world’s largest manufacturer

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KeyCorp names Fiala head of corporate responsibility

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KeyCorp (NYSE: KEY), parent of KeyBank, recently announced that it has appointed Eric Fiala as head of corporate responsibility. In this role, Fiala oversees the company’s community engagement; environmental, social, and governance (ESG); philanthropy, and Community Reinvestment Act teams. Fiala joined KeyCorp in 2002 and has held roles of increasing responsibility in corporate finance, analytics, and

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Insurers mandated to suspend preauthorization requirements

Employee Benefits & Human Resources, Insurance & Financial Services, Subscriber Only

The New York State Department of Financial Services (DFS) on Dec. 13 issued a letter directing insurers to suspend certain preauthorization and administrative requirements to help hospitals implement New York’s “surge and flex” protocol. The protocol — which mandates all hospitals to begin expanding their bed capacity to prepare for a COVID-19 surge — is part of

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The protocol — which mandates all hospitals to begin expanding their bed capacity to prepare for a COVID-19 surge — is part of the winter COVID-19 plan that Gov. Andrew Cuomo recently announced, per the DFS website.

The DFS letter was “developed in collaboration with the insurance industry and hospitals,” the department added.

With the action, hospitals will be ready to “quickly” transfer patients between hospitals and, “when appropriate,” discharge patients to skilled-nursing facilities or their homes to increase bed capacity and balance patient load.

Similar regulatory relief was granted in March during the first COVID-19 surge in the state, the DFS noted.

“After what we saw in the spring, we know that preventing hospitals from becoming overwhelmed needs to remain a top priority moving forward. …This new guidance will help streamline hospitals’ ability to quickly transfer patients between facilities, increase bed capacity and balance patient load,” Cuomo said.

The letter directs insurers to suspend certain requirements for 60 days. They include preauthorization review for urgent or non-elective scheduled inpatient surgeries, hospital admissions and transfers between hospitals; for inpatient rehabilitation and home health-care services following an inpatient hospital admission; and for inpatient mental-health services following an inpatient hospital admission.

“A temporary suspension of preauthorization and other administrative requirements provides necessary flexibility for hospitals during this critical time to maintain sufficient hospital bed capacity,” Linda Lacewell, DFS superintendent, said. “We encourage insurance companies and hospitals to continue to work together to ensure that COVID-19 patients receive the care they need.”

The state reminds insurers that they are prohibited from denying emergency department and inpatient hospital treatment provided during the declared state of emergency for diagnosed or suspected COVID-19 cases “as not medically necessary on retrospective review.” In addition, hospitals should use their best efforts to continue to provide insurers with notifications, including information necessary for the insurer to assist in coordinating care and discharge planning of emergency hospital admissions.

New Yorkers can use new paid sick-leave benefits under new state law

Employee Benefits & Human Resources, Health Care, Insurance & Financial Services, Subscriber Only

New Yorkers can begin using sick-leave benefits under the state’s paid sick-leave law that took effect Jan. 1. The new law secures paid sick leave for workers at medium and large businesses and paid or unpaid leave for those at small businesses, depending on the employer’s net income, the office of Gov. Andrew Cuomo announced Dec. 29.

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New Yorkers can begin using sick-leave benefits under the state’s paid sick-leave law that took effect Jan. 1.

The new law secures paid sick leave for workers at medium and large businesses and paid or unpaid leave for those at small businesses, depending on the employer’s net income, the office of Gov. Andrew Cuomo announced Dec. 29.

Cuomo first discussed the measure during his 2020 State of the State address and lawmakers approved it as part of the 2021 state budget.

Under this law, New Yorkers can use guaranteed sick leave to recover from an illness themselves; care for a sick family member; or address safety needs if they or a family member are the victim of domestic violence, sexual assault, stalking, or human trafficking.

“This public-health crisis has put that need in even greater relief. Now, …we are expanding this fundamental right to all New Yorkers,” Cuomo said.

Earning sick leave

New Yorkers earn sick leave based on the hours they work, earning one hour of leave for every 30 hours they work, retroactive to Sept. 30, 2020. New York’s new guaranteed sick-leave law requires businesses to provide different levels of sick leave depending on their size.

Businesses with 100 or more employees must provide up to seven days (56 hours) of paid sick leave per year. Companies with five to 99 employees must provide up to five days (40 hours) of paid sick leave per year.

In addition, businesses with fewer than five employees, but a net income of more than $1 million, must provide up to five days (40 hours) of paid sick leave per year. Smaller businesses with fewer than five employees and a net income of less than $1 million must provide up to five days (40 hours) of unpaid sick leave. However, those already providing paid sick leave can continue to do so.

Prior to the law’s passage, about 1.3 million New Yorkers did not have access to paid sick leave, “forcing them” to either take unpaid leave and risk losing their jobs or show up to work while sick, potentially spreading communicable diseases to coworkers and the general public, Cuomo’s office said. Nearly one-in-four workers had reported being fired or being threatened with termination for taking sick time.

VIEWPOINT: From Employee To Entrepreneur: Becoming Your Own Boss in 2021

Business Mentors, Employee Benefits & Human Resources, Insurance & Financial Services, Subscriber Only

Maybe you have dreamed of launching your own business for years but couldn’t summon the nerve — or the capital — to pull it off. Perhaps 2020 proved disastrous to your career aspirations when the company you worked for downsized or shut down altogether — and out the door you went. Either way, 2021 could be

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Maybe you have dreamed of launching your own business for years but couldn’t summon the nerve — or the capital — to pull it off.

Perhaps 2020 proved disastrous to your career aspirations when the company you worked for downsized or shut down altogether — and out the door you went.

Either way, 2021 could be the time to ask yourself this question: Are you ready to go from employee to entrepreneur?

It’s an easy question to ask, but a more difficult one to answer.

Maybe for people who lost their job this year, it’s an easier call because they aren’t giving up something to make the move.

For them, this might be the perfect opportunity to finally give in to any entrepreneurial urges. But leaving full-time employment with its relative security, regular paycheck, predictable infrastructure, and perks is a different matter and requires a certain kind of courage.

After all, success is not guaranteed. About 20 percent of small businesses fail in their first year, and half succumb by year five, according to the Bureau of Labor Statistics.

But for those considering taking the plunge, here is my advice:

• Look before you leap. Starting a business requires a certain amount of risk, but that doesn’t mean you should be foolhardy. While I agree you have to commit to any endeavor for it to succeed, I’m also pragmatic enough to know that the risk must be balanced. Have a comfortable safety-net before you jump. Chances are that debt will outweigh income at the beginning. So, for those currently employed, take advantage of the income from your full-time position before you cut ties.

• Consider doing what you already know. For many entrepreneurs, success can be attributed to the fact they started a business in a field they were familiar with because they worked in it or already had expertise in it. They had seen their industry from the inside and acquired a keen understanding of both its potential and its constraints. That’s not true for everyone, but in the cases where it is true, it definitely can make for a more solid transition and increase the likelihood of success.

• Be adaptable. One thing that separates successful businesses from ones that fail is the ability to adapt to changing circumstances. Being adaptable doesn’t mean just introducing a new product to your realm of offerings. It requires constant attention to what’s going on in the world, analyzing your competitors, and most importantly, not getting too comfortable at the top of the pyramid. The business cycle is much like a StairMaster — once you get to the top, you have to keep climbing to stay up there.

Ultimately, though, the only way to truly find out whether a person can succeed as an entrepreneur is to do it, no matter how unsettling taking that first step might be.

Making the shift from the steady life of a full-time employee to the unpredictable world of entrepreneurship takes smarts, guts, and support. But you’ll never know if it’s right unless you embrace the risk.

Adam Witty, co-author with Rusty Shelton of “Authority Marketing: Your Blueprint to Build Thought Leadership That Grows Business, Attracts Opportunity, and Makes Competition Irrelevant,” is the CEO of Advantage/ForbesBooks (www.advantagefamily.com) which he started in 2005. The company helps busy professionals become the authority in their field through publishing and marketing.

VIEWPOINT: Ask Rusty: I’m 66. When Should I Claim Social Security?

Business Mentors, Employee Benefits & Human Resources, Insurance & Financial Services, Subscriber Only

Dear Rusty: I’d like to get advice on when I should begin taking my Social Security benefit. I turned 66 in October 2020. Signed: Pondering Retirement Dear Pondering: Deciding when to claim your Social Security benefit is a personal choice which should consider several factors, most importantly: • Your need for the money at this time • Your

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Dear Rusty: I’d like to get advice on when I should begin taking my Social Security benefit. I turned 66 in October 2020. Signed: Pondering Retirement

Dear Pondering: Deciding when to claim your Social Security benefit is a personal choice which should consider several factors, most importantly:

• Your need for the money at this time
• Your current health and expected longevity
• Your marital status

Since you have already reached your full retirement age (FRA) for Social Security (SS) purposes, you are no longer subject to the “earnings test,” which limits how much you can earn. So, working won’t affect your monthly SS benefit amount in any way. But it could influence your decision on when to claim, because if working enables you to delay claiming Social Security until after your FRA, your benefit amount when you eventually claim will be higher.

In October 2020, you started earning Delayed Retirement Credits (DRCs) at the rate of 0.67 percent for each full month you delay past your FRA. That means that for each full year you delay claiming, your benefit will be 8 percent more. You can earn DRCs until you are 70, at which point your Social Security benefit would reach maximum and be 32 percent higher than it would be at your FRA. But delaying only makes sense if you don’t urgently need the money now, and if you expect to enjoy at least average longevity (which is about 84 for a man your age today). If you delay until age 70 to claim, your “breakeven age” (the age at which you will have collected the same amount of SS money as if you claim now) will be about 83. And if you live longer than that, you’ll continue to enjoy that higher SS benefit for the rest of your life, and you’ll collect more in cumulative lifetime benefits.

A higher benefit at an older age can be quite beneficial to offset inflation and is especially helpful if you’re married and your wife outlives you. If you are married and you predecease your wife, she will get 100 percent of the benefit you are receiving at your death, if that is more than her own benefit from her own lifetime work record and if she has reached her own FRA when she claims her widow’s benefit. So, for example, if you claim now at your FRA, your widow later will get your FRA amount when you pass away. But if you delay past your FRA to claim, when you die, your widow will get the higher benefit amount you are receiving because you delayed claiming. In other words, when you claim your Social Security benefits, if you are married, can affect the benefit your widow will get if you die first.

So, the bottom line is this: In deciding when to claim your Social Security you should consider your current financial needs, your health and expected longevity, and your marital status. Carefully evaluating the above factors will help you to decide the best age at which to claim your Social Security benefits.

Russell Gloor is a certified Social Security advisor with the Association of Mature American Citizens (AMAC). The 2.3 million member AMAC says it is a senior advocacy organization. Send your questions to: SSadvisor@amacfoundation.org

Author note: This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). The NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity.

VIEWPOINT: Who’s the New Boss? How to Avoid Succession-Planning Mistakes

Business Mentors, Employee Benefits & Human Resources, Insurance & Financial Services, Subscriber Only

Many corporations have endured a rough 2020 that included the designations of top executives at some major brands. Will their replacements be ready? It’s a fair question, especially if the new company leader is promoted from within. Studies show many senior leaders don’t think their firms to properly educate and prepare future leaders for succession. If

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If an organization has no pipeline of leaders ready to take over senior-leadership positions, then a lack of succession planning can be catastrophic for even the most enduring company.

Many companies don’t find the development of leaders significant until they are readying for succession planning, embarking on a new venture, or weathering storms that threaten their viability. This reactive approach is risky because development takes time.

It’s time for CEOs, senior leaders, and heads of HR to modernize their leadership development because of the ever-evolving business world, which is especially volatile now.

Leaders often weren’t ready to assume higher roles before the pandemic, and now it’s a bigger problem in terms of succession. A rapidly changing time, such as now, is a good reason to focus on succession to ensure the chances of a company’s long-term survival.

The common mistakes businesses make in their succession plans are:

• They start too late. Even when companies realize they will have a void in their leadership roles, they wait too long to get the succession process started. They may know people are retiring in two years, but they need to start their planning well before then. It takes three to five years to do it right.

• They only consider the CEO role in their succession conversation. When companies do a thorough evaluation of their people, looking not only at their present performance but also gauging their future, they might discover they don’t have the right kinds of people in the right roles. Companies that win think strategically and have a people plan to address those gaps. I recommend an overall development plan for the organization’s leaders as a whole and for individuals, and a succession plan for all key roles — not just for the CEO or C-Suite.

• The succession plan and development plan aren’t shared with leaders. Many companies worry that if their plans are known by the individuals slotted for upcoming senior roles, other people, not chosen, will leave. Having outlined all roles with expectations will help others aspire to gain the knowledge and skills they need, because then they know what is required at the next level.

• Decisions are made subjectively by the top leadership team. It is tough to create a succession plan without objective data about the future open roles and the employees that could potentially fit those roles with the right development.

Prepared leaders who are stepping into higher roles have never been more important than they are now. They are more adept during unforeseen disruptions and are able to pull their teams together. They can recraft a new, realistic, strategic direction quickly.

Jennifer Mackin (www.jennifermackin.com) is a ForbesBooks author of “Leaders Deserve Better: A Leadership Development Revolution,” and a leader of two consulting firms — CEO of Oliver Group, Inc. and president and partner of Leadership Pipeline Institute US.

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