Tag Archives: employees

Cyber Risk: Is It Worth All the Pain?

With an onslaught of bad recent cyber news, is cyber risk worth the trouble, and how should corporate directors be looking at this issue? The recent news is the high-profile breach of 4 million employee records at the U.S. Office of Personnel Management by alleged Chinese hackers and the news that even the security experts are getting hacked, with Kaspersky Labs reporting a breach supposedly committed by a nation state.

President Obama also made cyber security an emphasis of his G7 talks in Germany, commenting that the U.S. government needs to be more “nimble, aggressive and well-resourced” to combat this threat. He also urged the U.S. Congress to pass the 2015 Cybersecurity Information Sharing Act, a first step in a coordinated and systemic public/private response to cyber risks.

The attacks show no signs of slowing. PwC’s 2015 Global State of Information Security Survey indicates a compound annual growth rate of 66% for cyber incidents since 2009. The 10,000 respondents to the survey reported almost 43 million detected incidents during 2014 alone—or 117,339 incoming attacks every day of the year.

Is cyber security risk worth it? Yes, but with a caveat. Without a doubt, the many innovations currently taking place with today’s information technologies open up many new vulnerabilities. Risks are now difficult to isolate, and a protect-and-defend model is not effective against the systemic risks inherent across any corporate ecosystem.

Attacks can also come from a growing list of sources, including hacktivists, foreign and domestic nation-states, customers, employees, partners, consultants, competitors, organized crime and the bored neighbor kid living in the basement and surviving on a diet of Cheetos, Red Bull and your weak IT security infrastructure. The direct and indirect costs of mounting an effective cyber security defense are only getting more expensive, and the risks are only increasing.

Despite this, these technologies also have an upside—a significant one as they are now competitive table stakes, as new business tools always are. These tools are changing market dynamics and customer preferences, and the technologies embody distinct economic advantages such as the lowering of transaction and engagement costs. Business models and competitive advantages are changing as a result of these tools.

These tools are shaping and defining business success, but the risks are holding many companies back. Which takes us to the caveat. The upside of these technologies outweighs the downside.

Cyber is worth the risk, but boards, directors and managers need to be looking to exploit the business advantages of these tools, while at the same time mounting a “a nimble, aggressive and well-resourced” approach to mitigating these incessant risks.

This is easier said than done; 89% of companies listed on the Fortune 500 in 1955 are no longer on the list. Business cannibalizes the companies that can’t capitalize on the opportunities presented by changing market conditions, including new technologies.

Directors need to be diligent in overseeing cyber risk as part of a comprehensive IT governance and enterprise risk governance approach. But they also need to be on top of governing cyber opportunity—that’s the only way that they can make cyber security risk worth it.

14 Things to Know About ACA Software

If you are a large employer or employee benefit broker, chances are you have spent a lot of time trying to determine the best ACA 6056 reporting and compliance solution. At ACA Reporting Service, we do not sell software – rather, full-service reporting. However, we have researched almost a dozen different Affordable Care Act employer reporting and compliance vendors, and we thought we would pass along what we learned.

Beginning Questions to Ask Yourself

As an employer or benefit broker, this is how the ACA software question breaks down for you.

1). Some employers will have their online enrollment (benefits administration) and payroll with the same vendor. In those cases, as long as the client is willing to pay for it, it will likely to make sense to just perform this required ACA reporting of IRS forms 1094 and 1095 with that vendor.

2). Some employers will not have an outside benefits administration vendor or payroll. They do everything in-house. For these employers, there is going to be a lot of ACA work to be done, and obviously you will need a stand-alone solution.

3). Finally, you have some employers that have payroll and benefits administration with different vendors. This would include the scenario where one of these functions is performed in-house. In these cases, you will either need to consolidate both payroll and benefit plan elections with one vendor, or you will need a stand-alone solution.

Basic conclusion: If you are an employee benefit broker with various types of employer clients, we don’t see a scenario where you can get away without having a stand-alone ACA software solution to help your clients meet their 6056 Affordable Care Act employer reporting requirements.

What do you need to know in evaluating ACA stand-alone software vendors? Here are some questions to ask yourself:

1). Security? What if all the Social Security numbers of your client’s employees were stolen? Can you imagine the fallout? Many of the systems we reviewed were severely lacking in terms of security. What level of encryption is being used for the data?

2). Branded to your company? Many different ACA reporting vendors offer the ability to brand a portal to your company and let your employer clients log in.

3). Is the system mainly a benefits administration system? This can make an extreme difference. Will this add costs for the ACA reporting module? Also, with many benefits administration systems, there are additional charges for EDI (electronic data interface – where election data is sent to insurance carriers). Will additional fees apply with this new ACA reporting?

4). Is the ACA reporting solution even built yet? Many, MANY of the ACA reporting module demos we sat in on were from vendors that do not even have the software built yet.

5). How long will your data be stored? The IRS has said that audits will begin starting in about 18 months of filings, and that can last for 7 years total. If you do not have a methodology to get back to your data at the time of inquiry, you are stuck.

6). Is your vendor set up to file with the IRS? Did they just lie to you and say yes to that question? As of the writing of this blog, no one is set up to file with the IRS electronically (efile) for forms 1094 and 1095. The IRS has literally just issued the guidelines to begin getting started with this.

7). Variable hour tracking? Do you need variable hour tracking to determine eligibility? For many employers, a simple spreadsheet will do the trick. Many vendors have quite robust capabilities in this area, and for some employers this will definitely make sense.

8). The “Gotcha Moment.” This comes at the end of a great presentation when you’re told there is an additional charge of $3 to $5 per employee to file the forms with the IRS. Generally, these costs will render noncompetitive whatever solution you were just shown.

9). Robust ACA logic? We cannot tell you how important this is! If you have spent as much time looking at these forms as we have (especially in terms of form 1095c lines 14, 15 and 16), you will know that performing this reporting is MUCH MORE than just uploading a spreadsheet. The codes for these lines are based on logic. Most systems do not have this logic built into their system, so it will be up to you as an employer or benefit broker to figure this out. For most employee benefit agencies, you can count on this little “bug” shutting down your operations in January.

What if you decide to just file them incorrectly? When your largest client has 100 employees bring them letters from the IRS, you will then realize this was a very bad idea.

Also, without robust logic built into the system, there will be no accommodation for situations such as someone terminating in November/December and then electing COBRA in January. The codes for these situations are different.

10). Are forms stored for future access and corrections? Bottom line – there are going to be issues with the reporting from time to time. Do you have the ability to go back into the system and create a new/corrected 1094 or 1095 form on behalf of the employee? Many systems that rely solely on a census upload would require you to basically start over to make this one fix. OR, your staff can just manually create one in .pdf, which will take a lot of time.

11). Do you have to pay for the whole system up front, or are there monthly options? Do you need to commit to multiple years with the software vendor? Do you have to pay continually for the solution or only once? Are there implementation costs? Are there separate fees for the IRS form file reporting and all other functions in the system?

12). Can the employee elections be uploaded via census, or do you need to type it all in?

13). Will the vendor have adequate customer support between Jan. 1 and Jan. 31 so that you can KNOW you will be able to get all the work done?

14). Do you want to just let the payroll vendor do the work for your client? Do you really want to recommend that your client have another function performed by someone who wants nothing more than to take your business away from you?

. . . OK, that is enough! We hope you find this helpful.

Why Invest in Suicide Prevention?

While no detailed and independent data exists on the cost of suicide and suicidal behavior to the Australian economy, every death does have a financial impact. A cost estimate produced by Mendoza and Rosenberg in 2010 proposed a plausible estimate to the Australian economy of $17.5 billion per year. This figure included estimated productivity costs.

Research conducted by SuperFriend and IFS Insurance Solutions estimated that, in 2012, death claims paid out in Australia by group life insurers in superannuation where suicide was the “known” cause of death amounted to more than $100 million. For some SuperFriend partner funds, suicide death claims account for more than 20% of their total death claims administered.

There is a relationship between stress and work-related suicide. While suicidal behavior is an extreme outcome of stress, significant productivity gains are to be had by managing workplace stress. Medibank private-commissioned research found that stress-related “presenteeism” (showing up at work but at far less than 100% capacity) and absenteeism cost the Australian economy $14.8 billion a year, with 3.2 days per worker lost each year because of stress.

Work-related mental stress claims are the most expensive form of workers’ compensation claim, as they are often associated with long periods of absence from work. Given that only 70% of workers who report that they have experienced work-related mental stress actually apply for workers’ compensation, the potential cost of worker stress is much higher.

Measures taken to reduce or eliminate work stressors will contribute to suicide prevention while providing the additional benefit of lowering costs.

Suicide in Australia

Suicide prevention is a substantial issue for Australian society. Official figures put the lives lost from suicide at about 2,300 people each year in Australia (population: 23 million); the true figure is more likely around 3,000 deaths each year. About 75% of these deaths are among males. Each death gravely affects families, friends and communities.

Suicide becomes more prevalent in adolescence and rises with age, peaking at around 45 years old in men and 40 in women, then declines, before becoming more prevalent again in those over 80. Most deaths by suicide in Australia are in people of working age (data is not routinely collected on employment status at the time of death).

It is estimated that approximately 2.1 million adults in Australia have had serious thoughts about ending their lives, and 500,000 adults have made a suicide attempt. Approximately 65,000 suicide attempts occur every year.

Work and Mental Health

Nationally, about 12.3 million people are in the labor force, with 11.6 million employed at December 2012. Roughly speaking, a third of these will be self-employed or working in small businesses of fewer than 20 people, a third will be working in medium-sized businesses of 20–199 people, and a third will be working in large businesses of 200 people or more.

The World Health Organization (WHO) estimates that adults spend a third of their waking hours at work. The workplace provides a unique opportunity to reach working age adults and provide key health information and intervention.

The impact of mental health problems on work functioning and performance is at least comparable to the impact of physical injury.

Mental health problems in the workplace typically manifest themselves as performance issues, such as:

  • Increased absenteeism
  • Reduced productivity
  • Increased employee turnover
  • Increase in short- and long-term disability days
  • Increased disability claims

Employers are increasingly recognizing that mentally healthy staff are more productive and that there are cost benefits to addressing mental health issues in the workplace.

Using the Workplace to Prevent Suicide

Most deaths by suicide are among people of working age. Suicide is the leading cause of death for males aged 25–44 years and females aged 25–34 years. The proportion of suicides that are work-related is unclear. One Australian study found that 17% of suicides in Victoria from 2000–2007 were work-related. Applying this estimate to deaths across Australia, approximately 3,800 suicides over the decade to 2011 may be work-related.

Adults spend about a third of their waking hours at work. The workplace provides a unique opportunity to provide key health information and intervention. Suicide Prevention Australia (SPA) sees the workplace as playing a vital role in the creation of a suicide safe community.

The World Health Organization suggests worker suicide is a result of a complex interaction between individual vulnerabilities and work-related environmental factors that trigger stress reactions and contribute to poor mental well-being. Employers have a legal responsibility to provide a safe and healthy workplace, including managing psychosocial stressors.

Suicide Prevention Australia believes urgent action is required to address a range of systemic issues including managing unemployment, workers compensation and coronial processes. In addition, we call on organizations of all sizes to implement workplace policies and programs that promote a mentally healthy workforce and prevent suicide behaviors.

Understanding of the cost of workplace stress is continuously building and includes productivity losses because of “presenteeism” (the act of coming to work despite sickness, physical or mental) and absenteeism as well as workers’ compensation claims. No detailed and independent costing exists on the cost of suicide and suicidal behavior to the Australian economy.

A plausible estimate was calculated to be $17.5 billion per year, including productivity costs. Death claims paid out by Group Life Insurers in Superannuation for suicide exceeds $100 million per year. Monetary value aside, suicide cuts lives short and leaves scars.

Suicide is mostly preventable, yet significant gaps exist in our understanding of the relationship between work and suicide, limiting prevention efforts. SPA has reviewed the existing evidence, and we believe urgent action is required to address a range of systemic issues including managing unemployment, workers’ compensation and coronial processes. In addition, we call on organizations of all sizes to implement workplace policies and programs that promote a mentally healthy workforce and prevent suicide behaviors.

We ask employers to draw on the information provided in this document and call on them to:

  • Promote a workplace culture that is inclusive, de-stigmatizes mental health problems and encourages help-seeking. Sharing stories about personal experiences with suicide and mental health problems can be a powerful way to address stigma. In appropriate settings and with support and informed consent of all parties involved, leaders are encouraged to share their own stories, highlighting positive coping strategies and sources of help.
  • Prioritize psychosocial workplace safety. This includes identifying ways to reduce work-related stressors.
  • Understand and value the person as a human being rather than a resource. This includes understanding the interactions between what happens within the workplace and other aspects of life including family, relationships, cultural background, health, etc. This will help facilitate an understanding of the meaning of work for people and the impact of stress, loss or failure of work on their lives.
  • Promote mental health and suicide awareness within the workplace, paired with clear and communicated pathways to support for those in need.
  • Establish mechanisms for the recognition and early detection of mental health and emotional difficulties in the workplace.
  • Provide employees with access to appropriate self-help or professional interventions and treatment, for example via employee assistance programs linked to external community health resources. Pathways to care should be well promoted within the workplace, making sure employees feel encouraged to draw on these supports and understand the confidential nature of services. This will help overcome potential fear of breach of privacy.
  • Frame suicide prevention programs in a manner that respects the cultural backgrounds and needs of the target audience, taking into account factors such as cultural and linguistic diversity, indigenous status and diverse sexualities and genders.
  • Be prepared for suicide to touch the lives of your employees and to respond appropriately. Lived experience of suicide can include having thoughts about taking one’s own life, making a suicide attempt, caring for someone who is suicidal, being bereaved by suicide, witnessing a suicide or being exposed to suicide in some other way. These experiences will take on different meaning and importance for every person and can have lasting impacts.

To assist individual employers to achieve this, we ask that industry and employer groups:

  • Establish relationships with key suicide prevention and mental health organizations.
  • Develop industrywide guidelines for suicide prevention.
  • Invest in the development of multifaceted suicide prevention programs tailored for the industry. This is especially urgent for industries characterized by relatively ready access to suicide means, elevated risk of suicide or a high proportion of male workers.

Government plays a vital role in suicide prevention. Action
is required by government to address systemic issues that contribute to work-related suicide. We call on government to:

  • Promote policies and practices that encourage employment, as this will give more people protection against one of the more significant risk factors for suicide.
  • Invest in both labor market programs and suicide prevention programs (including mental health promotion) during times of economic downturn.
  • Provide access to counselling services (via employment pathway services) for individuals unemployed for more than four weeks.
  • Provide suicide intervention skills training for front-line staff working with the long- term unemployed.
  • Fund research into the relationship between work and suicide to inform suicide prevention activities.
  • Review the role of the workers’ compensation system in suicide prevention, minimizing harm and maximizing opportunities for intervention with those vulnerable to suicide. To achieve this, workers’ compensation claims databases require improvement, and research is required to better understand the relationship between workers’ compensation and suicide.
  • Give coroners adequate resources to ensure that coronial investigations include the role of work in suicide deaths.
  • Develop guidelines for suicide prevention in line with the Australian Work Health and Safety Strategy 2012-2022.
  • The proposed harmonized workplace health and safety regime increases focus on duty of care including mental health. We call on state and territory governments to implement recommendations under the proposed regime.
  • Invest in mental health and suicide prevention in the workplace.

The Daily Grind Is Good for the Mind

The human brain thrives on what work gives us: activity, routine, social contact and identity.

The act of working gives employees far more than just the benefit of earned income. The World Health Organization names it as a health factor that, when present, contributes to health and, when absent, can increase the chances of ill health. This is particularly relevant in the discussion about mental health. What is it about work that contributes to mental health, and why should employers and insurers consider the health benefits of work?

Activity

When human beings are engaged in doing things, areas of the brain related to attentiveness are stimulated. When someone is off work, it is harder to find regular daily activity—it is not as easy to find the many everyday behaviors we do when we are working. Work provides a structure that tells us what to do. We then engage in hundreds of behaviors every day. Being in the act of doing these behaviors keeps us healthy. When we are not working, it can be hard to answer the question: “So what did you do today?” This absence of activity can have a profound impact on a person’s sense of accomplishment and purpose, which has an impact on mental health.

Routine

Work forces us into a rhythm and regular behavioral patterns that are actually good for us, even if sometimes we may resent the structure. Our bodies and brains enjoy the routine and benefit from the repeated predictable patterns of behavior. If we don’t have something to get out of bed for, it can be difficult to get out of bed. When someone is off work for any reason, the lack of daily direction can have a significant impact on well-being.

Social contact

We spend more waking hours with the people we work with (when we are working full-time hours) than with the people we love and live with. Human beings as mammals are social creatures and seek and thrive on social contact. Neural activity related to social contact is crucial to mental health, and social isolation is a risk factor for mental illness. We are connected to our co-workers because we are social beings who are genetically programmed to monitor and build social connections. We rely on the hundreds of exchanges inside the social context at work to meet our needs for belonging and connection. When people are off work, they lose this continuing social contact, and the isolation has a significant impact on well-being.

Identity

Work gives us identity. When we work we have a title, a position, a clearly defined set of tasks and a label that provides information to the world about who we are, this informs us about who we are in relation to others, and in how we view ourselves. Loss of this identifier has a significant negative impact on self-esteem and self-worth, with a predictable risk to mental health. When employees are off work, it is hard for them to answer the common question: “So, what do you do?”

Any person facing unemployment experiences changes in all of these factors and is at risk for developing mental health issues. A person who already is experiencing mental health challenges, and then goes off work, may find it difficult to build steady recovery, because the essential health need of work is not present.

Many disability plans have an all-or-nothing approach to an employee’s ability to work. If employees are off work, they are deemed not able to work. If employees wish to find regular daily activity to help build their recovery, they may put their claim at risk. This approach to disability management may actually be making employees stay off work longer. The longer an employee is off work, the harder it is to return to work. Systems that do not allow employees who are on a disability claim to work, even to perform volunteer work, are preventing employees from tapping into the health benefits of working and may be contributing to needless work disability.

Employers may also have the mindset that an employee who is sick should be off work. When it comes to mental health issues, it is not best practice to use this all-or-nothing approach. The key here is for employers to have the capacity to address individual employee needs as they return to work or, better yet, have flexible processes and structures that allow employees to stay at work. Staying at work during early days of recovery could be part-time, with the disability benefit covering the balance of an employee’s income from salary.

Continuing activity, routine, social contact and identity build employee recovery and can reduce the cost of the disability claim. There is less work disruption, and continuity can be maintained for the employee and the family, the work team and the organization. This contributes to increased employee health. And healthy employees are productive and engaged employees.