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Tuesday, April 22, 2014

Don't Elect COBRA! Buy Exchange Coverage

One of the little-talked-about benefits of the Affordable Care Act's Insurance Marketplace is that people who lose their health coverage during the year become eligible to sign-up.  The same COBRA qualifying events that make you eligible to elect COBRA also make you eligible for mid-year sign ups on state or federal Exchanges.  Employers can charge you 102% of the full premium for your existing coverage, and generally employees pay about 1/3 to 1/2 of the full premium.  COBRA premiums, then, are sure to be anywhere from double to triple what you normally pay.

Exchange coverage will be 100% of the full premium.  The coverage pool is also larger than most employers.  Chances are your premiums will be the same or less than COBRA coverage.  However depending upon your income you could be eligible for a subsidy which could make the coverage less expensive.  Another advantage is that if you did not elect a certain coverage as an employee you cannot elect it under COBRA.  Exchange coverage, as I understand it, has no such restrictions.

Before electing COBRA check out your state or federal exchange.  It will almost certainly cost you the same or less and provide you more flexibility in what you choose to elect.

Saturday, April 12, 2014

How to Construct Great Interview Questions

Interviews are possibly the most important thing a manager will do.  Hiring the right people, and keeping the wrong fit out, is one cornerstone of good performance for the whole team.  A poor contributor, or poor attitude, or both will drag down a whole team.  All-stars properly motivated left the whole group. Bad interview technique can also lead to legal exposure if questions drift into non-job-related subjects. I have found that this happens far more out of ignorance and lack of planning than prejudice.

With this in mind here is how to construct interview questions that will keep you legal and focused on the search for great people. Plan your interview questions into two groups:

1. Task-based
2. Probing for Past Performance and Attitudes

Task-Based Questions

You want to know if the candidate can perform the essential functions of the job.  To do that you want to marry the duties of the job with the prepositional phrases from Behavioral Interviewing.  Here's how:

1.  Start with the job description.  If you don't have one, or the one you have is poorly-written and 5 pages long (hey, it happens), write down the 4-6 most important aspects of the job.
2. Apply these Behavior Interviewing phrases in front of each of the most important aspects:
     * Give me an example of a time when you... (insert task)
     * When in your career have you...(same thing)
     * At what former job have you ever...
     * Can you think of a time when you have.....

These leading questions do two things: they avoid the "yes" or "no" answer from the candidate and they give a good indication of whether or not the person has the experience you seek.

Probing Questions

Here you want to know how people think or lead; what they prefer in the type of jobs or supervisors, and where they want their career to go.  These are all legal and will give you an indication of how well the candidate fits the job you have for them.

1. What accomplishments in your career are you most proud of?
2. Without naming names, tell me about the best supervisor you ever worked for? What made them a great supervisor?
3. Without naming names, lets reverse the question.  Tell me about the worst supervisor you ever worked for and why you feel that way about them.
4. Describe a time when you had a really bad problem at work and how did you resolve it?
5. If we called your last employer what would they say about you? (you'll be surprised how much the prospect that you might call will cause a very candid answer)
6. Other than a paycheck, why do you do what you do for a living?  (you are looking for passion)
7. Of course we have other candidates, so tell us why we should hire you?
8. What questions do you have for me? (this will measure preparation which indicates interest)

Together this gives you 12 - 14 great, job-related and legal questions that provide insight into the candidate.  It is easier, always, to know what you can say than to remember all the HR warnings about questions you should not ask.  This list can also be used by a single interviewer or divided into two or three interviews for structured panel interviews.

Please use these with my compliments.  Also, if you are scheduled for an interview with me and are doing research, don't get too comfortable.  I have plenty more.  :-)

Thursday, January 16, 2014

My Opinion: Plan Now to Discontinue Executive Benefits Next Renewal

Part of my first-year's learning in Senior Living has been discovering that some communities, even with small workforces, have special benefits for their management teams.  This will become problematic and potentially cause employers to pay penalties once the Affordable Care Act is fully implemented.  Since most plans are based upon the calendar year and have renewed for 2014 now is the time to plan and communicate a discontinuation of those plan options. The regulations have not yet been written and so implementation is delayed: this gives employers time to eliminate those plans for 2015.

Section 2716 of the Affordable Care Act prohibits discrimination based upon salary in the provision of benefits under a pre-tax benefits plan. In layman's terms, your highly compensated management cannot receive better benefits than the rest of your employees and your plan still enjoy pre-tax status.  For the definition of "highly compensated employee" the government could have used a simple definition ($115,000 for 2014) but of course, why do something simple regarding the ACA? 

Instead of the simple definition the Act uses the test included in Section 105(h)(5) of the Internal Revenue Code.  Under this test an employee is "highly compensated" if any of the three criteria below are met:
  1. The employee is one of the five highest paid officers in the company.
  2. The employee is a shareholder who owns more than 10% of the employer's stock.
  3. The employee is among the highest paid 25% of employees.
In small workforces virtually all the management team will be included in #3 above.  In privately held "mom and pop" communities where the Executive Director has equity, it is possible to meet #2.  In privately held communities where the owner or spouse are employed they may meet all three criteria.

While this test applies primarily to self-insured plans, the news for fully insured plans is worse.  Those tests have not ye tbeen issued but will include a formula to account for part-time employees.  Remember, the Employer Mandate penalties under ACA were delayed for this year because the definition of an eligible part-time employee has not yet been settled.  Employers with fully-insured plans who want to keep an executive tier of coverage therefore have no way of knowing if their plan will pass or be determined as discriminatory.

If you already have a separate Executive Plan that is grandfathered in you may keep it.  However if you simply have one plan and give your executive team better pricing or benefits your plan will probably not pass testing under Section 2716.  Your best course of action is to communicate this now and give your management team time to adjust to the loss of benefits.  Since this change will save the employer money, you may also want to consider repurposing those savings into increased salary or paid time off (both still unregulated) as compensation for lost benefits.



Wednesday, January 01, 2014

Wait Just a Minute: the Affordable Care Act May Work

The withering criticism of the Affordable Care Act ("Obamacare") has led many to believe that it is a disaster, that it will never work, etc...  If you only watch conservative television or listen to conservative talk radio and politicians then you might be convinced of this "fact".  Best to hang on for a moment.

One of the criticisms is that "nobody is signing up" as often-reported on Fox News which is omnipresent in the YMCA where I work out.  Early in the enrollment process there were daily reports of "single digit" enrollments in some states.  This was due to the HHS software being as bad at reporting as it was at enrolling.

The software bugs are being fixed and enrollments are happening, and this week no more conservative voice than The Washington Post reports that HHS may actually meet their first enrollment goal of 7 million enrollees for 2014.  If that target is attained, given the large amount of negative publicity, the daily rants from conservative media, the software debacle and a Republican campaign last fall to discourage enrollment by uninsured Americans, it will be a significant accomplishment.

Personally I have seen two anecdotal situations that affirm this forward momentum.  I have a family member who was unable to afford coverage for himself and his wife because of her preexisting conditions.  Last month they secured subsidized coverage for the two of them for $120/month.  The first month of Exchange enrollment I had a friend, a small-market realtor, who looked on line and complained to me that single coverage for her would be over $600/month.  After working through the repaired website and getting to the subsidy calculations, she secured free coverage for a bronze plan.

Time will tell what full implementation of the ACA brings.  Right now it is still a political football with supporters looking past every flaw and detractors ignoring every success.  Looking at it impartially (although I am on record as supporting universal, non-employer-sponsored coverage) the program has a fighting chance to overcome Kathleen Sebelius' incompetence and the Republican opposition machine.  It will certainly have unintended consequences: all changes of this magnitude do. The ultimate question will be 2-3 years down the road when we attain full implementation, see the consequences both intended and unintended, and judge for ourselves if this was or was not a societal step forward.

Tuesday, December 10, 2013

What Does It Really Mean to Be in a Right to Work State?

In a Right to Work state an employee's employment is at the will or whim of the employer unless there is a contract such as an individual Employment Agreement or a union Collective Bargaining Agreement.  That is technically correct, but widely misunderstood in its practical application.

Among my liberal friends this is a controversial topic.  The idea that in a Right to Work state an employee can be fired for any reason at any time is unconscionable and violates the dignity of the worker.  For my conservative friends who run businesses there is no controversy: they believe the law entitles them to make any decision they choose.  Both are wrong.

At the heart of this misunderstanding is one huge exception to Right to Work: it does not apply to state or federal discrimination or harassment laws.  These laws are the majority of risk in employment. While retaining or terminating an employee may be at the complete discretion of the employer, if that discretion is abused such that the employee is discriminated against based upon some protected class status then the employee has full recourse through state or federal agencies and through the courts.

If you are employed in a Right to Work state you have the same rights regarding equal treatment under state and federal anti-discrimination law as you would in any other state.  If you employ or supervise people in one of these states you have about as much protection under Right to Work as if you rolled yourself in bubble wrap and jumped off a bridge.

When making employment decisions I would advise you the same way I advise my clients: to have an Employee Handbook, follow it, and never let Right to Work enter into your thinking.  The real definition of Right to Work: "A false sense of security that causes you to write large checks."

Wednesday, October 23, 2013

What Constitutes a Hostile Work Environment

There is probably no more misused term or misunderstood concept in most workforces than "hostile environment".  For a whole generation of workers this term has become synonymous with harsh supervisors or rude co-workers. Legally that is just dead wrong.  Often complaints come in to HR departments using the "hostile environment" term as a hot-button to spur action against the offending supervisor or co-worker. It is the hollow "gotcha" of employee complaints.

So here's the problem: there is no law against being an awful boss or a toxic co-worker unless the harassing behavior is based upon some protected class status.  A friend of mine is a great labor lawyer in Nashville who coined "The SOB Defense"  which goes something like this: "Yes, Your Honor, my client is a Son of a Bitch...to young, old, black, white, male, female, Jew, Gentile, and everyone in between." In other words, as long as you are a jerk to everybody then being a jerk is not illegal.

An exception to this concept is sexual harassment: where the hostile environment is made so by unwanted sexual attention or information in the workplace.  While technically gender-based, anyone of either gender can find the sexual attention or information unwelcome, so even if everyone is offended it is still harassment.

So how do you know when an unpleasant environment is a hostile environment?
  • If you are the only person of your demographic in the work group (only woman, only non-white, only person over 40, etc...) and you are the only person experiencing the hostility.
  • If you and the other people who look like you receive unfavorable treatment but others do not.
  • If the unpleasant behavior is of a sexual nature.
Otherwise you work for or with a jerk.  That stinks, but it isn't illegal.  Find another job and walk out with your head held high and your middle finger held higher.


Sunday, September 22, 2013

Tennessee Health Insurance Exchange Coverage

October 1st is less than two weeks away, and on that date adult U.S. citizens will be able to purchase health insurance from the Insurance Exchanges set up under the Affordable Care Act.  If you live in Tennessee, however, it can be confusing as to how you enroll.  Here is a quick primer.

Tennessee, like most Republican-led states, opted not to participate in the Exchange program.  There is no financial advantage to non-participation; actually not participating costs the state more money in the long run.  However the "anti-Obamacare" fever whipped up by Fox News and conservative talk radio made state participation tantamount to support of Healthcare Reform.  No Republican can survive a primary election if they are seen as supporting "Obamacare".  Instead these states, Tennessee among them, choose non-participation, which then requires the federal government to set up an Exchange for them.

Since Tennesseans have to use the federal Exchange program let's look at how you do that.

The federal program is called the Insurance Marketplace and enrollment is done on-line.  If you try to Google "Tennessee Insurance Exchange" or something similar you will get a page telling you that there is no state Exchange in Tennessee.  It is unhelpful in that it does not provide you with a link to the federal site so I am not linking to it here.

As of today you cannot yet get information from the Insurance Marketplace site regarding plans and premiums.  Those are coming October 1st.  You can roam the site and get a list of local offices where you can get one-on-one help in reviewing plans and enrolling.

Finally let's take a quick look at who should, and should not, be concerned about enrollment in the Insurance Marketplace.

  • If you have health coverage through your employer and are satisfied with it then you do nothing.
  • If you are covered by benefits through the government, a retirement plan, or the military you should do nothing.
  • If you have health insurance coverage offered through your employer but can't afford it you should look into Insurance Marketplace coverage.  You may qualify, based upon income, for a tax subsidy either instantly or at tax refund time.
  • If your employer does not offer health coverage then the Insurance Marketplace is for you.
  • If you are self-employed and have no coverage, or your coverage is expensive, the Insurance Marketplace is for you.
  • If you or a dependent have a pre-existing condition and have not been able to get coverage in the past, the Insurance Marketplace has guaranteed-issue coverage with no pre-existing exclusions.

Most of the people who are critical and/or screaming about this program are not affected by it.  There are even conservative groups in some markets trying to discourage uninsured people from enrolling.  Don't get sucked up into the political and philosophical hype: we are all paying for the Affordable Care Act so that 30 million uninsured Americans can have coverage.  If you are one of them go enroll.