Expect health care premiums to increase next year thanks to prescription drugs: Nonprofit research company 46 Brooklyn found that pharmaceutical companies are raising prices for over 700 medications in January alone, with the average increase sitting at about 4.5%. Popular weight-loss drug Ozempic, for example, will see a price hike of 3.5%, while the antidepressant Wellbutrin will increase by 9.9%. Comparatively, an estimated 24 medications will drop in price, with insulin leading the pack after Medicare capped monthly prices were at $35. However, not all hope is lost. According to the Congressional Budget Office, more than 90% of the prescription drugs dispensed are generic and likely more affordable for the employer and employee. But the specialty drugs that make up less than 10% of what's being used are driving prices up for the whole system and leaving employers with benefits budgets stretched far too thin. Therefore, employers need to have strategies in place knowing drug pricing may be driving health care premium costs up. Source: EBN 1/25/24
Healthcare optouts may or may not be part of base pay for OT purposes: In a case before the Federal 9th Circuit Court of Appeals, the court held that optout fees should be exempted as “contributions irrevocably made by an employer to a trustee or third person pursuant to a bona fide plan for providing” health insurance, per the statutory exemption set forth in 29 U.S.C. § 207(e)(4). The opt-out fees deducted from the credit employees received were provided to their union, and employees had no ability to access this sum. However, if the employee has access to and receives the optout payout, the payout should be added into the base rate. Group health plan opt-out arrangements are allowed under the law, but if employers want to offer them, they should offer them to all employees. Selectively offering opt-out arrangements can put an employer at risk of discrimination in a variety of ways, such as violating the Health Insurance Portability and Accountability Act (HIPAA) nondiscrimination rules. Source: Proskauer Rose LLP 1/25/24, Curative 10/30/21
Not engaged at work? Join the crowd: In 2023, employees in the U.S. continued to feel more detached from their employers, with less clear expectations, lower levels of satisfaction with their organization, and less connection to its mission or purpose, than they did four years ago. They are also less likely to feel someone at work cares about them as a person. These are among the findings of Gallup’s most recent survey of U.S. employee engagement, which stagnated for the second half of 2023 following a slight improvement earlier in the year. At midyear, 34% of U.S. full- and part-time employees were engaged in their work and workplace. For the full year of 2023, 33% were engaged, reflecting a slight recent decline. This figure lags behind the annual high -- since Gallup began reporting U.S. employee engagement in 2000 -- of 36% in 2020 and a peak of 40% in late June of the same year. The engagement peak occurred after a decade of steady growth, followed by two years of decline, beginning in the second half of 2021 when it dropped to a 32% low in 2022. On a positive note, the percentage of actively disengaged workers has declined from 18% in 2022 to 16% in 2023. Source: Gallup 1/23/24
Long-term, part-time employees not included in discrimination testing for retirement plans: Under the SECURE Act and the SECURE 2.0 Act, employers must provide long-term, part-time employees the opportunity to make elective deferrals under their 401(k) plans and, beginning in 2025, their 403(b) plans. When this occurs, certain special rules apply to such employees that impact whether they must be included in annual nondiscrimination testing or receive required top-heavy vesting and benefits. As a result, it is important for employers to understand these requirements, as they may impact how annual testing is performed and the results. The recently proposed regulations issued by the Internal Revenue Service (IRS) confirm that employees who enter a plan as long-term, part-time employees may be excluded from coverage testing, ADP/ACP testing, and benefits, rights, and features testing. The rules also confirm that, for employers with safe harbor plans, choosing to exclude long-term, part-time employees from receipt of safe harbor contributions (i.e., only making them eligible for elective deferrals) will not jeopardize a plan’s safe harbor status. In addition, the rules explain that while such long-term, part-time employees must be counted for purposes of completing top-heavy testing, they are not required to receive enhanced top-heavy vesting or benefits (which applies when plans fail to pass such testing). Source: McDermott Will & Emery 1/23/24
Unhappy workers cost $1.9 trillion in lost productivity: Disgruntled employees cost U.S. companies an estimated $1.9 trillion in lost productivity last year, according to research from Gallup that puts a price tag on workplace unhappiness. The stakes are high for companies because an engaged workforce increases productivity and that helps boost sales and profit. Connecting better with staff also improves worker retention. Having motivated employees is linked to “a lot of different outcomes that are important to organizations,” said Jim Harter, chief scientist for Gallup’s workplace practice. Gallup calculated the cost of reduced productivity by estimating the dollar value impact of an employee being unengaged and then extrapolating that for the working population. The overall hit to the global economy totaled an estimated $8.8 trillion, the company said. To remedy this, Harter suggested individual weekly check-ins and guidance on how to work with their coworkers. When employees are told how to collaborate with one another, role clarity rose to about 80% from less than 50%. This kind of strategy is especially needed for younger workers because they are much more likely to switch jobs in search of a more fulfilling work-life balance. Source: Bloomberg 1/23/24