April 15 COBRA Subsidy Extension

On April 15, 2010, Congress approved another short term extension for COBRA health insurance premium subsidy for jobless Americans.

The Continuing Extension Act of 2010, which extends the COBRA subsidy provided under the federal stimulus bill, includes employees involuntarily terminated between April 1 and May 31, 2010. The 65% subsidy continues to be available for qualifying individuals for a maximum period of up to 15 months.

At a minimum, employers should expect that they will be required to provide updated notices to individuals in the following two groups:

1. Employees who were involuntarily terminated since April 1, 2010. It appears this notice will permit a retroactive election and a 60-day period within which to elect coverage.

2. Individuals who experience a qualifying event (of any type) on or after April 1, 2010 but prior to May 31, 2010.

The DOL has acted quickly in the past to provide updated model notices. BRG anticipates they may provide updated notices and related guidance in the next few weeks.

There is additional legislation in Congress, The American Workers, State, and Business Relief Act of 2010, that will potentially extend the subsidy through the end of 2010. We will provide more information on any future extensions and the impact on employers as the legislation develops.

If you have any questions, please contact Cindy LaQuatra at 216-393-1848 or by email at claquatra@benefitsrg.com .

Intercontinental warfare

Global employer pits U.S., U.K. workforces against each other for wellness bragging rights

Theresa Ayala had a tall order when it came to implementing a wellness program at National Grid, an electricity and natural gas delivery company that serves 3.4 million customers.

The organization had never had any kind of formal wellness program, but Ayala, National Grid's wellness program manager, wasn't daunted. A nurse practitioner by training, she had a pretty good understanding of the health issues confronting employees and decided to forgo trying to get them to complete a health risk assessment.

"Even though we have 18,000 U.S. employees, we're still a sample of what's happening in society at large," she says. "Rather than spend the time and energy and an entire year trying to find out about the problems I already knew existed, I decided to jump right in, understanding the three drivers to disease development are lack of physical activity, smoking and obesity."

Through her research, Ayala came across Shape Up the Nation, a wellness company founded in 2006 that uses social networking to promote weight loss and healthy behavior. (Read more about how the Shape Up the Nation program posted big results on a smaller scale in "Small state, big ideas: Rhode Island on reform," from EBN March.)

"The support, motivation and accountability our peers can provide dramatically increase our chances of succeeding at reaching our health goals," says Rajiv Kumar, co-founder of Shape Up the Nation. "There's been a great deal of research showing that behaviors related to health actually spread within a social network, so that if someone loses weight, the people who are around them in their trusted social network are likely to lose weight as well."

Shape Up the Nation creates a calendar of events for employers, usually a series of 12-week challenges related to exercise, weight loss, healthy eating and healthy behavior. Employees sign on to participate in the challenges, using Shape Up the Nation's social networking Web site.

Kumar says that about 3% to 5% of an organization's employees are "early adopters" - people who are naturally inclined to sign up for a wellness program. "We get those individuals engaged, they sign up, and then they start to invite their peers, and they start to form teams," he says. "And they're sending out e-mail invitations and recruiting their colleagues in a grassroots fashion."

A walk across the pond

Last year, National Grid implemented Shape Up the Nation's 12-week pedometer challenge. Ayala and her colleagues challenged National Grid's parent company in the U.K. to see which division - U.S. or U.K. - could walk across the pond first.

The program was launched using all of National Grid's usual communication channels - e-mails, newsletters and posters. "I know the popular thing to do is offer incentives to get people to participate," says Ayala. "It's a way to attract people, but it's not a way to keep people. We just put the program out there, and employees were very interested to see it and get involved. And I found we were very competitive, which drove participation."

Employees who signed up received a kit containing a wristband, a pedometer and a tracking calendar. They created profiles on Shape Up the Nation's social networking platform, formed teams and started walking. Approximately 700 teams, comprising 5,500 employees from both the U.S. and U.K., participated. Employees were able to track their progress through an online map, updated every two weeks, which showed each division's movement across the ocean.

And even though the U.K. employees made it across the pond first, Ayala says the program more than exceeded her expectations. "I didn't expect the popularity of the program. I didn't expect it to be the talk of the building," she says. "No matter where you went, you could see people with their pedometers. We'd hear stories from employees who were on teams with people they didn't normally work with, which was great. It supported the whole teamwork piece, and I didn't expect that."

She still gets requests for pedometers, even though the program is over, and employees continue to ask if National Grid will run the program again this year.

And while it's tough to say whether the program had an impact on health claims data, Ayala believes employee testimonials speak far louder than numbers ever could. "When you're running something that's 12 weeks, it's hard to say what we did in 12 weeks impacted [claims]," she says. "It's much stronger to show the real changes you've made in the employees by their personal testimonials, and that's what we're going for."

Social incentives

Could the power of social incentives be the demise of financial incentives for wellness program participation? "We've seen cases of employees getting thousands of dollars simply to take a health risk assessment," notes Kumar. "It doesn't change behavior. It simply gives you a baseline of information. Financial incentives have been a response to programs that were not activating employees."

Instead of financial incentives, Shape Up the Nation relies on the grassroots, peer-to-peer interaction to motivate employees and keep them interested. A little friendly competition doesn't hurt either, as National Grid's experience showed.

"That inner competitive nature we all have to some degree makes people more likely to participate and stick with the program," says Kumar. "And we make it fun. Traditional wellness programs have been focused on coaching or health risk assessments, and they haven't been fun. People are looking for something that's fun and enjoyable to participate in."

The average team size across the company's book of business is nine. "One team captain is getting eight other people to be a part of his or her team, and I think that really speaks to the viral nature of a peer-to-peer approach to wellness."

Employers are responding to the idea of social incentives, says Kumar, who says clients report improved morale and retention, decreased absenteeism, increased productivity and increased collaboration between departments. And, "the platform becomes an engagement engine that drives utilization of other wellness offerings. Most wellness programs do work. They can help people change their behavior, but if people don't sign up and use them, then they're useless. The Holy Grail of wellness programs is actually getting people to engage, and I think we've been able to do that."



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Numbers at a glance

Here are the average results per U.S. employee who participated in National Grid's 12-week pedometer challenge:

Weight loss: 6.4 lbs

Exercise: 38 minutes a day

Steps: 8,772 per day

IRS offers guidance on tax credits in healthcare reform law

The Internal Revenue Service recently launched a new Web page that provides guidance on tax credits in the new health reform law for small employers and tax-exempt organizations that provide health insurance coverage.

Under the new law, the maximum credit is 35% of premiums paid in 2010 by eligible small businesses and 25% of premiums paid by eligible employers that are tax-exempt organizations. In 2014, this maximum credit jumps to 50% of premiums paid by eligible small employers and 35% of premiums paid by eligible employers that are tax-exempt organizations.

“This credit provides a real boost to eligible small businesses by helping them afford health coverage for their employees,” explains IRS Commissioner Doug Shulman. “We urge small businesses and tax-exempt employers to look closely at this important tax break — which is already effective — to see if they qualify,” he adds.

The online portal helps small-business owners determine if they are eligible for the tax credit and outlines the financial rewards earned by taking advantage of the credit. In addition, users can review a “Frequently Asked Questions” section that discusses, in part, the calculation of the credit and how to claim the credit. The Web page also includes a section that illustrates scenarios on how the credit applies to employers in different circumstances.

The government defines a small employer as one with fewer than 25 full-time equivalent employees paying wages averaging less than $50,000 per employee per year. However, “because the eligibility formula is based in part on the number of FTEs, not the number of employees, many businesses will qualify even if they employ more than 25 individual workers,” IRS officials report. The maximum credit goes to smaller employers with 10 or fewer FTEs that pay annual average wages of $25,000 or less.

The tax credit on health-insurance premiums was created to encourage small employers to provide health insurance coverage for the first time or maintain coverage they already have, according to IRS officials. The credit is also aimed at small businesses and tax-exempt organizations that primarily employ low and moderate income workers.

IRS officials state that “eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011.”