Employee Benefits

14 Posts authored by: Touchpoint

By Iris Dorbian.


Benefits_body.jpgIt’s a dilemma that has plagued many small business owners: Should they offer employees a benefits package? And, if so, what should they offer that would both meet the needs of employees without incurring undue financial liability on the business?


While some business owners have, in the wake of the recent recession, opted to either slash or cut benefits entirely, giving employees the responsibility of finding insurance courtesy of the Affordable Care Act, this could be a flawed strategy.


According to a recent survey conducted by the insurance company Aflac, 57 percent of workers said they would likely accept a job with lower pay but better benefits. This is a finding that reinforces the importance of small business owners offering employees a benefits program to stem workforce attrition.


Below are some tips to help build an employee benefits package that’s the right fit for your business.


Work with a benefits broker

Just as the title indicates, a benefits broker can help you design an employee benefits package that will not only be fair to your finances but to your employees’ needs as well. He or she can help you understand how much of an insurance premium you can afford to get the coverage you feel is right for your employees. They can also help you explain to your workers the value of the benefits you’re offering.


Karen LaCroix, founder and president of SuperiorHR, a Dallas-based human resources solutions provider for small to medium-sized companies, believes in the value of this advice. But she does note that there is “marked difference in the insurance products available to companies with fewer than 50 employees,” as opposed to larger firms.


However, if a small business wants to be competitive in the workplace and attract top-notch talent, it would be wise to develop a benefits package that rivals what its competitors are offering.


Identify all the pieces

Few would argue that health insurance is the most critical element of an employee benefits package.


“Health insurance provides a safety net that protects an individual or family from the high cost of a catastrophic health event,” says LaCroix.


She also suggests that small businesses consider including long-term disability coverage as a benefits option. “Again, this is protection from lost income should an employee be disabled for a long period of time,” notes LaCroix.


Mick Hewitt, CEO and co-founder of MasteryConnect, a five-year-old educational technology firm in Salt Lake City, says in his company’s sector—the tech startup culture—the typical benefits package is constantly in flux and evolving.


Because of this, he says, “When we put together our benefits, we looked at the extremely competitive tech talent hunt and decided that we couldn't afford to offer anything less than the best health care. So we opted to pay the entire family premium for our employees' health and dental care. We view it as an essential investment into recruitment and retention.


The less time and energy an employee has to spend worrying about health care, the more time and energy he or she can pour into innovating for our company.”


Solicit employee feedback

When building an employee benefits package, it’s a good idea to consult employees about what they would like included. In addition to health insurance, some workers might view wellness programs as critical to their needs.


Tom Giddens, executive vice president and director of sales at Aflac, works with many small businesses and champions this tip.


“Offering the right benefits package is a matter of understanding what today’s employees want and need,” he says. “To gain insight, employers can hold town hall meetings, create idea boxes where employees can submit their benefits-related requests or even conduct employee surveys. All are easy ways for employers to start benefits conversations with their workforces and ensure they offer the most appropriate, competitive and cost-effective packages for their businesses and workers.”

This tactic also gives workers more of a proactive and less passive role in customizing a benefits package conductive to their needs.



Decide whether you need to offer benefits

If you operate a business that relies on seasonal, part-time or even contractor help, you might not need to offer benefits. Be realistic with what you can—or cannot—afford.


For uninsured workers, the ACHA’s Health Insurance Marketplace, provides a range of options. Plus, depending on their income, workers might qualify for a subsidy that can reduce their monthly premiums, thus making insurance affordable and accessible within their means.


But small businesses might be subject to penalties if they opt out of offering full-time employees health insurance.


Hewitt of MasteryConnect, has 35 employees, and says small businesses need to carefully consider the repercussions of not offering employee benefits.


“Companies have to weigh the cost of those penalties versus the cost of providing insurance,” he says. “If you neglect to offer a good health plan, you've got problems beyond financial penalties: No one will want to work for you. In our case, the AHCA ended up being a non-issue because we would never consider eliminating those benefits.”

QAKessler_Body.jpgby Erin McDermott.


The critics are clamoring and the press wants a comment. Face it, you need help dealing with your company’s crisis. Enter Karen Kessler, a public-relations specialist who works to mitigate some of the toughest situations imaginable. (How delicate? Even the producers of TV’s “The Good Wife” have sought her out to consult on their show.) Writer Erin McDermott recently spoke with Kessler, the co-founder of Evergreen Partners, about silencing Twitter fights, avoiding the drip of bad news, and the absolute worst thing a business owner can say to the media.     


EM: How did you get into crisis management? Were you always the girl who kept the coolest head when you were growing up?

KK: In many ways, it fit who I was, it fits who I am, and it fits what makes me feel comfortable. I’m dealing with people in very high-stress situations. I think if you can offer people some comfort when they’re in those situations and get them to dial down the drama and dial down the impulsive behavior, there’s a sense of relief for them in that. And if I can offer that sense of relief, it’s really very comforting and satisfying to me. That’s the psychology of it.


I kind of backed into it. It never was a field you could study when I was in school. I started out in a fairly traditional public relations background and then was hired as vice president of corporate communications at the New York Stock Exchange. I reported to Arthur Levitt, who went on to be the head of the Securities & Exchange Commission. In the course of that I worked with companies who were publicly traded and they had responsibilities to report changes in management or organization that might impact their stock price. I learned a lot about how the public reacts to news and when they react. When I started my own business, I found there were a lot of companies that started out thinking they had good news to share—but when you peeled back the layers, there was other stuff they weren’t sharing.


QAKessler_PQ.jpgEM: When a potential client approaches you, what happens? How does it work?

KK: Most times, we get our clients through attorneys that are working with companies and think that whatever’s going on has the potential to be unmanageable, either with customers, the public,  the media, or potential jury members. Other times, they come directly to us because they’ve heard of us or are referred.


The very first thing we do is ask to sit down with them. After we provide a little bit of comfort, we ask them to tell us everything that’s going on. Let’s talk about anything that can come out later so that we can begin to put together a plan to mitigate it. And what we find is, despite our request that it all comes out at once, it generally comes out piece by piece. Most people have a very hard time acknowledging what’s going on in the most direct fashion.


EM: Is really possible for an organization to think ahead about damage control?

KK: Absolutely. Can you envision every scenario that could possibly come and be prepared? No. But are there certain kinds of things and information that you can pull together—certain kinds of approaches you can instill in your employees, or values that you can emphasize or written policies you can put in place that will help you in these situations? Absolutely. Do most companies have them? Absolutely not.


EM: Social media must have seriously altered the landscape for you.

KK: It did. It’s more voices, and no deadlines. Now, it’s a race to get it up online. As we’re talking, they’re typing.


EM: What’s the worst thing a company can do in a crisis like this?

KK:  Use the phrase ‘no comment.’ That’s our least favorite thing in the world. If you say ‘no comment,’ you might as well write the word ‘guilty’ on your forehead.


SBC newsletter logo.gifEM: There are plenty of examples in the news of tiny companies coming under fire for public blunders. In cases like that, how do you tailor your services to small businesses?

KK: With small businesses, it’s often public missteps that might come off as tone-deaf—it’s not intentional on these kinds of things. It’s not earth-shattering, like putting out a product that’s going to hurt people or make people ill. It’s just a misstep or something that doesn’t work out. Or it’s a dispute with an employee—something between two people that gets escalated.


Right now, we have a very small organization we’re helping in which two people, one of whom is a former employee, are in a Twitter fight. Neither of them recognizes that this isn’t like 30 years ago, when you both just picked up the phone and yelled at each other. When you’re in a Twitter fight, it’s a public situation. We see these things all of the time now. Take 10 minutes and walk away before you decide to jump on your keyboard, because then it is forever.


This interview has been edited and condensed for clarity.


Stop Hiring Like a Startup

Posted by Touchpoint Oct 17, 2013

StartUpHiring_Body.jpgby Erin O’Donnell.

One of the biggest transitions for any entrepreneur is making the leap to employer. While it’s important to know how you’ll handle the cost of adding staff, recruitment and human resource professionals say there’s much more to figuring out whom you should be adding to your company, and when.

When you’ve been doing it all yourself, the challenge is learning how to let go, and what to let go of, says Scott Ragusa, president of contract staffing for WinterWyman, a recruitment firm based in Boston and New York City. For the passionate entrepreneur who has been living and breathing his or her business from day one, this marks a huge shift in thinking. It requires planning, self-awareness, and trust.

“An entrepreneur will hold onto the parts of the business he or she is not built for longer than they should,” Ragusa cautions. “The reality is, if Bill Gates was writing all the code, Microsoft would not have become Microsoft.”

Investing in people: the opportunity cost

As executive director of human capital services for TriNet, a third-party HR solutions firm based in the San Francisco Bay area, Debra Squyres guides startups and sole business owners on planning for staffing and growth. She sees entrepreneurs confronting the same dilemma over and over: they feel divided between selling and delivering their product or service. They experience peaks and valleys because they can’t sustain both in a scalable way. They realize they need help, but they’re worried about the cost.

Too often, she says, they haven’t forecast for staffing needs. “So many people default into growth, as opposed to having a strategy and a plan around it,” Squyres says.

When you realize you need help, that’s the perfect time to take the long view on your financials. Squyres recommends looking well beyond your month-to-month revenue and instead look at profit projections into the next two years or longer. Calculate revenue and profitability for each employee you want to hire, and build toward that.

Cliff Dank understands this both as a recruiting professional and as an entrepreneur. Three years ago, he started Elm Talent Group in New Haven, Connecticut, and now serves as the boutique recruiting firm’s president and managing partner. Dank says most small business owners are constantly looking at the opportunity cost of any investment, of time or resources. They should view staffing the same way.

“What would you otherwise spend this money on?” Dank asks. “If you include people as an investment, you can contrast that against other opportunities.”

Small businesses are necessarily frugal, but Ragusa cautions against going overboard. He urges business owners to view hiring not as an expense but as a revenue generator. Consider how extra staff will drive your production in six months, a year, or two years.

“Companies that do this well continually think about the future, not just about their exciting product but what it’s going to take to bring them to the next level. They’re not afraid to trust other people to help them with that,” Ragusa says.

StartUpHiring_PQ.jpgFind the utility players

When you’ve been a one-man band for a while, it’s hard to know which part to hand off to someone else. Squyres says this is the time to review your strengths. Then, invest in someone who will complement your skill set. “It’s critical in the early stages of development that business owners look for utility players, as opposed to specialists,” she says.

You’re not looking for your polar opposite. An entrepreneur needs to surround herself at first with other people who can also wear many hats, be flexible, and share her love of the bootstrap spirit. The workload will still be heavy.

Squyres recommends an exercise to get some perspective on where you might need help. Keep a time log for at least a month, and track what you spend your time on. Be sure to span a few periods of high and low activity to be as comprehensive as you can. As you analyze the log, key pivot points will begin to emerge.

“Look for what can easily be outsourced or delegated to someone you can hire at a reasonable salary so you can focus on activities with the greater ROI,” Squyres says.

For Dank, a different writing exercise helped with his clarity. When considering where you need help, think about where you might be the bottleneck in your process. Write down all the ways that additional staff could help you get unstuck, he says, and quantify which would be the most valuable thing to free up.

“Any effort toward being analytical is better than none,” Dank says.

Hire or outsource?

If you feel that the business of running a company is pulling too much of your focus, you may be able to move back-office functions off your plate through outsourcing. “That’s what those sole practitioners get bogged down in,” Squyres says. “They’re so busy selling and doing the work that there’s no one to send out the invoices or pay the electric bill.”

You may not need your own people to do the books, the billing, human resources, or risk management. More and more small businesses are turning to third-party companies to handle these functions. The National Association for Professional Employer Organizations (NAPEO) estimates its industry grew by $10 billion in gross revenues in 2010. About 110,000 small to mid-size U.S. businesses use a PEO.

Depending on the nature of your business, an independent contractor may also make for a good alternative to a full-time employee. In one survey, the Bureau of Labor Statistics found 7.4 percent of the U.S. work force was made up of these freelancers, consultants, and other “alternatively employed” workers who typically work on a project basis.

Ragusa says a common mistake among entrepreneurs is thinking you can continue to do everything singlehandedly just because you’re doing it now. “It’s not so hard being the accountant when there’s only one employee. But can you do that forever?” he says.

The hiring advantage of startups

Squyres watched one startup grow ambitiously, hiring top talent away from Fortune 500 firms. Problem was, they paid like they were already one of them. Those generous 95th-percentile compensation packages ultimately sunk the company.

The moral of the story is, you don’t have to pay top dollar to attract top talent. Squyres says small businesses commonly misjudge just how attractive they are to people looking for that kind of work environment. Stick to your budget and you can still hire talented, passionate people.

“What you find is that not everybody makes a decision based on compensation alone. You have to be competitive, but you don’t have to lead the market,” Squyres says. “Owners underestimate the value proposition they have to people who are hungry to be a big fish in a small pond.”

You want to find the people who are drawn to the energy and promise of a startup—and they’re out there. Like the entrepreneur, Ragusa says, they’re forward-thinking. They will relish the chance to touch many aspects of the business. Or they may be enticed by the chance to share in your future success.

“Someone who thinks, wow, if this thing takes off, what is my stake in it? That’s the person you want to hire,” Ragusa says.

MandateP2_Body.jpgby Erin O’Donnell.

Part 1 of our series on the Affordable Care Act explained that businesses with 50 or more employees now have an extra year to fulfill the employer mandate of the ACA. That means these businesses now must meet a Jan. 1, 2015 deadline to offer affordable health insurance or pay a penalty. Below, we explain the best ways for companies—especially those with seasonal workers—to figure out how to account for employee hours under the new law, and how affordability is defined.

CBG Benefits principal and founder Chris Costello says the employer mandate delay gives businesses more time to plan, but he warns against procrastination. “This is especially true for companies that are approaching the 50 full-time employee threshold or that hire a lot of seasonal workers,” Costello says. “I would strongly advise them to start taking action now.”

Employers in seasonal businesses have a complicated road ahead as they try to account for employee hours under the new law. They should start tracking now, because FTEs are counted by hours, not individuals. Seasonal hours are accrued, adding up to equivalents of full-time employees. If that number reaches 50, the company is subject to the pay-or-play mandate. The IRS has compiled a guide to determining FTEs, along with answers to other frequently asked questions about the health care tax credit for small businesses.

The FTE formulas can also help firms with 25 or fewer employees to determine if they qualify for a tax credit available to employers that pay a portion of their workers’ health insurance premiums.

Michael Taggart, president of Empyrean Benefits Solutions in Houston, says employers should start measuring hours for variable hour employees as early as October 3, 2013. That will allow them a full 12-month measuring period plus the full 90-day administrative period allowed under the law’s “safe harbors” provision for the pay-or-play rules.

The next steps Costello recommends for employers include contacting their benefits broker, attending webinars and seminars on the ACA, and making use of tools that allow them to track employee hours.

Exchange confusion

To ensure employers don’t try to avoid complying with the mandate, the law stipulates that if even one employee buys a government-subsidized individual policy on one of the state or federal exchanges, the company they work for will be subject to escalating tax penalties.

The government is encouraging employers to make voluntary reports to the IRS in 2014 and 2015 about their health coverage, says Heidi Savage, a former human resources professional who counsels small businesses on health care reform and also blogs about it. To avoid penalties, employers with more than 50 workers must offer a plan that meets two criteria:

  • Affordable: The employee’s share of the annual premium for self-only coverage is no greater than 9.5 percent of annual household income.
  • Minimum value: A plan that pays at least 60 percent of the total cost of medical services for a standard population.


If their plan does not meet those standards, then employees may qualify for government subsidies on the health care exchanges, or marketplace. Savage notes that people who decide to shop on the exchanges will have to supply their employer’s tax ID number, and this is how the government will be able to check whether the employee is eligible for subsidized coverage, or whether they should be covered instead under the plan they’re offered at work.

MandateP2_PQ.jpg“Anyone can shop on the exchanges, but the subsidies aren’t available to you unless your employer plan exceeds 9.5 percent of your household income,” Savage says.

Savage posts a four-question test for employers on her blog to help them stop ineligible employees from applying on the exchanges.

There’s a chicken-and-egg quality to the employer mandate delay, because some employers are looking to the insurance exchanges for guidance on what health plans will cost. However, a business that is already offering insurance is welcome to shop around for something better on the exchanges. That will help them decide which makes more financial sense for their firm: to pay for coverage, or pay the government $2,000 per employee.

The extension until 2015 is meant to give businesses a chance to better prepare for implementing the ACA’s rules. And Taggart warns employers not to squander this time, but to use it wisely by making necessary changes to their record-keeping systems. He and Savage note that by 2016, the IRS will require reporting about the employer-provided coverage, and to whom it’s offered, under sections 6055 and 6056 of the tax code.

“Your accountants will need this information,” Savage said. “Ultimately, it’s a risk management decision for the company.”

Disclaimer: Since the details of your situation are unique, you should always seek the services of a professional for advice specific to your business.

MandateP1_Body.jpgby Erin O’Donnell.

Note: This is Part 1 in a series on the Affordable Care Act. Part 2 can be read here.


The Obama administration announced in July that businesses would have an extra year to fulfill the employer mandate of the Affordable Care Act. That means companies with 50 or more employees now must meet a Jan. 1, 2015 deadline to offer affordable health insurance, or pay a penalty.

“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” wrote Mark Mazur, an assistant secretary at the treasury department, in a blog post announcing the delay. “We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.”

The announcement came as a surprise to some small businesses, but for many it only added to confusion about their obligations under the ACA.

“Many employers have mistakenly interpreted the employer mandate reporting delay to mean that the ACA itself is delayed for a year,” says Matt Thomas, president of WorkSmart Systems, which provides human resource services to about 300 small and medium-sized businesses in 37 states.

MandateP1_PQ.jpgOnly the “pay or play” provision is affected, Thomas says, and even that affects only a small percentage of small businesses. According to a the latest annual survey by the Kaiser Family Foundation and Health Research & Educational Trust, 91 percent of firms with 50 to 199 employees already offer group health plans.

According to the law, here’s what employers still must do by January 1, 2014:

  • Make sure their health plans are compliant with the ACA. (Visit the U.S. Department of Labor)
  • Adjust their health insurance waiting period to be no more than 90 days.
  • Make sure that employer contributions to health insurance plans are equitable to all eligible employees.
  • Distribute notices to employees about the Health Insurance Marketplaces, or exchanges, by October 1, 2013. Open enrollment for private insurance through the marketplaces begins in October 2013 for coverage starting as early as January 1, 2014. The marketplaces were created to help companies and individuals comparison-shop for private insurance plans.

For businesses that don't offer a group plan, the government has created a model notice to be given employees, available for download here.

Even with the employer mandate deadline extended by 15 months, Thomas says employers with 50 or more full-time employees should start working toward mandate compliance sooner rather than later. They’ll need that time to find affordable coverage and to plan for their variable-hour work force. And key point to reiterate: firms with less than 50 workers are not subject to the employer mandate.

Disclaimer: Since the details of your situation are unique, you should always seek the services of a professional for advice specific to your business.

EmployerHealth_Body.jpgby Jen Hickey.


Despite all the discussion surrounding the Affordable Care Act’s (ACA) (known by some as ObamaCare) as employer health mandate, there remains some confusion about who will be affected. A recent survey found that one-third of small business owners believed they would be required to provide health insurance for their employees in 2014, while another third wasn’t sure. It pays to know the details of this law, though.


According to the ACA, small business owners who have no employees will have to purchase health insurance for themselves to avoid paying a penalty. There is, as the Wall Street Journal notes, a “hardship exemption” for sole proprietors if the annual insurance premium costs will be more than eight percent of their household income. Though the rules and potential costs associated with this health care law can seem daunting, the federal government has begun to clarify these issues with new regulations. These new rules explain purchasing and coverage guidelines for the health care market as well as define essential health benefits and wellness requirements.


[Note: All data in this article is accurate at the time of publication, but because government regulations are often changed and frequently updated, any small business owner should confirm the latest rules regarding the ACA by visiting hhs.gov and irs.gov, and seek professional guidance before making any major changes regarding health insurance.]


Beginning in 2014, businesses with 50 or more full-time equivalent employees (FTEs) must offer health coverage that’s “affordable” and meets “minimum value.” (These two terms are defined as a) having a premium that does not exceed 9.5 percent of income and b) covering 60 percent of actuarial value, or the amount of expected health care expenses.) The annual penalty for not complying is $2,000 per employee not covered after the first 30 FTEs. According to the ACA, full-time workers are now defined as employees who work 30 hours or more a week (130 hours per month). While businesses are not required to offer coverage to part-time employees, part-time workers’ hours will still be used to determine whether they’re subject to the mandate. For example, three part-time employees that work 10 hours per week for a total of 30 hours will now equal one FTE.


Businesses with less than 50 FTE workers are not subject to the employer mandate, and those with fewer than 25 FTEs that also provide health coverage may even be eligible for certain tax credits. (The average annual wage of workers would have to be less than $50,000.) Through 2013, small businesses that pay at least half the cost of health premiums for each FTE can receive a credit for up to 35 percent of their contribution toward their employees’ coverage. And starting in 2015, when the new state and federally run “health exchanges” fully launch, small businesses that purchase coverage through these platforms can receive a tax credit for two years of up to 50 percent of their contribution.


Lenny Verkhoglaz, CEO and co-owner of Executive Care, a Hackensack, New Jersey-based home health care company, has considered offering insurance to his employees in the past. But he could never meet the 75-percent-participation rule many group healthcare plans demanded. Since many of Verkhoglaz’s employees are documented immigrants with family roots in other countries, he says, they prefer to send home the extra cash that they might instead use to pay health insurance premiums. What’s more, many of his workers are covered by their spouses or through New Jersey’s state-sponsored health insurance plan. And to complicate matters, determining whether his employees are full or part time can be a fluid calculation, since their status often depends on the nature of the assignment and length of time between clients.


“This is not a 9-to-5 job,” explains Verkhoglaz. “An aide may be servicing a client for 40 hours a week, and then that client passes away and they may be working few or no hours until another case comes along.” However, Verkhoglaz still believes he will be subject to the employer mandate, because of the use of part-time employees to calculate FTEs.


Even the insurance brokers Verkhoglaz has spoken with still seem to be grappling with how the mandate will affect businesses like his, with regulations still being issued on how certain industries will be classified. Despite the uncertainty, Verkhoglaz, who co-founded his company 10 years ago, recently franchised his business. “I haven’t changed my growth plans even though I’m not sure how my business will be affected,” he says. In the meantime, Verkhoglaz continues to reach out to home care associations and read industry publications for guidance. “It’s not clear if there will be differences in how these exchanges run from state to state,” he notes.


Because the annual cost of non-compliance is far less than the cost of typical health care premiums, Craig B. Garner, an adjunct professor at Pepperdine University School of Law who teaches a course on the ACA, says some business owners may opt to pay the penalty and shift their employees onto the new state health exchanges. “There’s more to benefits than just cost,” cautions Garner. “Often it’s the difference when it comes to recruiting and retention.” He points out that the exchanges are expected to function much like an online travel booking site. There, business will be able to shop various plans that offer different levels of coverage, ranging from bronze (which cover the minimum 60% of actuarial value) to platinum (which provides up to 90% of coverage).


EmployerHealth_PQ.jpgGarner does not believe the penalties will have much of a financial impact on those businesses already offering a health plan. Jim Edholm, owner and president of insurance brokerage firm Business Benefits Insurance in Andover, Massachusetts says dropping existing health coverage could prove more costly in the long run. “Your employees will be looking for a bump up in pay to make up for that lost benefit plus the amount that’s lost to payroll taxes,” he points out. “You’ll end up paying much more in the end.”


The ACA also calls for all non-grandfathered individual and small-group market insurance plans to cover 10 health benefits deemed “essential.” These include services most would expect to be covered, such as ambulatory care, emergency room visits, hospitalization, maternity, newborn, and pediatric care, prescriptions, and laboratory services. It also will include care for mental health and substance abuse and preventive and wellness services. “This prevents those mini-med plans with all kinds of limitations and maximums from calling themselves a health plan,” notes Edholm. Where it gets murky is coverage for mental health, which is not well defined and varies from state to state. “Some states, like Massachusetts deem biologically-based conditions, such as depression, as mental health disorders,” he explains, “while others like Alaska do not.”  And the federal benchmarks for essential benefits largely leave the definition of required mental health services to the discretion of the states.


Also in the ACA and set to take full effect in 2014 are several other changes to current health care regulations. First off, the new law puts an end to annual and lifetime caps on coverage. Second, it establishes penalties for businesses that have healthcare eligibility waiting periods of more than 90 days. Finally, it creates new reporting requirements (sections 1512-1514) for employers of 50 or more FTEs on whether they offer health insurance or not.


While Livingston, Montana-based PrintingforLess offers a high-deductible health plan (HDHP) for its 155 full-time employees, CEO Andrew S. Field says he has already seen higher administrative costs. “There’s a lot of disclosure and legalese that now has to be provided to our employees,” Field explains. “We had to bring on another person in human resources to help with the additional paperwork and time spent working with our provider and broker/consultant to make sure we remain compliant.”


Until recently, Field had primarily relied on full-time workers. However, he has altered his hiring practices to prepare for expected higher employee costs. “Partly because of ACA and partly because we don’t know what the future holds, we’re far more inclined to invest in technology that may save us on headcount,” Field says. And when they do hire, they’re more likely to bring on part timers, who now represent about 20 percent of the company’s work force.


There have also been changes to the individual and small-group insurance market (50 covered employees or less), which have historically been regulated by the states. Unlike large employers, which have a larger pool of employees to spread the risk of catastrophic illness, rates available to smaller employers have traditionally been much higher, since there is a smaller pool to spread that risk. However, the ACA is meant to curtail this practice by setting up health care exchanges that create more competition for that market and establish more uniform guidelines of how insurers can determine expected costs and, thus, price premiums.


Edholm believes many smaller businesses may opt for a self-insured health plan, which is exempt from costs and taxes related the ACA. One of these exemptions involves the 80/20 rule, which requires health insurers to spend at least 80 percent of collected premiums on medical costs. Under a self-insurance plan, an employer assumes the risks of all claims, whereas in a fully insured plan the employer pays a fixed rate regardless of whether the costs are incurred or not. As a recent National Association of Insurance Commissioners study points out, when self-funding, it’s often necessary for a small employer to purchase a secondary, stop-loss policy to protect against the risk of large expensive claims that can result from serious illnesses. However, stop-loss providers require detailed information about the health and demographics of your employees, which will be used to establish the deductible. And such cost savings largely depend on the relative health and age of your employees.


[Note: All data in this article is accurate at the time of publication, but because government regulations are often changed and frequently updated, any small business owner should confirm the latest rules regarding the ACA by visiting hhs.gov and irs.gov, and seek professional guidance before making any major changes regarding health insurance.]

QAdavidlewis_Body.jpgby Iris Dorbian.

As president of the 12-year-old OperationsInc, a Stamford, Connecticut-based company that offers HR solutions and consulting to small and medium-sized businesses, David Lewis is an expert when it comes to dissecting employment issues, particularly sick pay policies. In light of the recent flu outbreak, considered one of the worst to hit mainstream and corporate America in years, this topic has a special timely resonance. Recently, Lewis talked with business writer Iris Dorbian, where he offered up a few tips on how small businesses can institute an effective sick pay policy that both maintains productivity and respects employees who are genuinely ill and not faking it.

ID: As an HR professional/expert, what are some of the current trends and/or developments you see when it comes to SMBs' sick pay policies? Are they doing anything now that perhaps wasn’t done before?

DL: For a certain category of those businesses, which often tend to be more blue collar-oriented, they are being forced—and I do mean forced—to provide more comprehensive sick time policies than in the past. I’m referring to [new mandatory paid sick time laws] in the state of Connecticut and in major cities like Seattle and San Francisco. The idea of having a mandatory sick time policy [is increasingly becoming] more common based on state law and maybe on federal law.

So you have companies that traditionally had not paid you if you didn’t show up for work because you were sick now being forced to offer some minimum number of paid sick days. And then for the rest of the country, you have a bunch of [health] issues in the last several years where more small businesses are starting to formalize policy and offer paid sick time as a way to make their employees feel better about the company.

The majority of businesses in the white-collar space already offer some type of sick leave benefit. The standard is about five days of sick time [per year]. That’s not to say you won’t find more generous packages. [These can] range from more days to the ability to carry the time over and bank it, all the way to the point that you’ve got some trendier firms making the decision to offer unlimited sick time.

ID: What’s the cost of “presenteeism”? How does it impact productivity in the long run?

DL: Hugely. We have 5,000 subscribers to a newsletter and we put something out three weeks ago that talked about the importance of employers reaching out to their employees to remind them that being noble and dragging themselves to work while being infected with what’s being described as the worst flu ever is not doing anybody good. We have a couple of clients who lost 40 percent of their staff for a week because of the flu—40 percent of a small business’s workforce is just devastating.

[Unfortunately], it’s very much a mixed message out there in the business community: you’re allotted five paid sick days, but please note that if you use most or all of them it will be used against you when measuring your performance and dedication to the company. Of course, a policy’s message is never really communicated that way, but that’s what a lot of employees feel in terms of how companies respond to employees who wind up being out sick.

QAdavidlewis_PQ.jpgID: So how do you combat presenteeism and do it in a way that’s both favorable to the employer and employee?

DL: I think practically speaking when employees come to work while they’re sick they’re going to be likely spreading what they have to others in the workplace. Also, it’s probably going to be a less productive day for that individual who’s not operating at 100 percent. You have to look at the practicality of it for your business: if people who are feeling ill are compelled to work, see if it’s possible to have them work from home. In this day and age, more positions in the workforce can be performed at a remote level; if the person is able to do the job from home, then it’s even a dumber move to allow them to come into the office. Let them work from home. Get them a Skype account and have them participate in meetings through Skype where they’re not going to spread germs to others when they cough, sneeze, or shake hands.

ID: Based on your knowledge and experience, what would be your best practices to small businesses seeking to institute an effective sick pay policy?

DL: We advise our clients to provide their employees with five paid sick days a year, but don’t allow for carryover—have it be a “use it or lose it” policy. Never make it so rigid that if they have to take more than five days that it results in the person’s pay being docked or worse. Now the people who abuse it, the people who are faking illness or using it for vacation time—those people should be disciplined up to and including termination.


Look at it from the perspective that five days is a fair number. If your policies are written correctly in your handbook, they’ll always provide you, as the employer, with optimum flexibility to deal with situations on a case-by-case basis.

The big challenge here is that for some employees you’re not going to want to offer that option. For some employees you might view the sick time they’ve taken as excessive or questionable. You just have to be careful about how selective you are because you can put yourself in the position where you look like you’re being discriminatory in some fashion against some group of people by doing that case-by-case thing. And you don’t want to get yourself in the position that in an effort to do the right thing for certain employees and discipline others you wind up with a lawsuit or some type of complaint from a state or federal agency.

Disclaimer: The opinions expressed are solely those of the author and interviewees.  You should consult a qualified HR professional to assist you in developing and implementing sound personnel policies and practices.

Raises_Body.jpgby Robert Lerose.


Giving raises to employees has gotten more challenging over the past few years due to the dramatic upheavals in the overall economy. While there are some signs that conditions are improving and a recovery is underway, bumping up the salary of workers is still a complicated issue for some businesses. The easiest option is to simply postpone them, but is that the wisest action to take for the long-term health of your business? Here are three perspectives on how to think about the importance of employee raises.


Improves employee morale

Contrary to what you might think, raises are much more than simple financial transactions. Awarding pay increases can reverberate through an organization, pumping up spirits, and boosting productivity. "The first thing I tell business owners is that you need to keep morale up," says Rebecca "Kiki" Weingarten, a career and executive coach and co-founder of Atypical Coaching. "A raise will show that the employee is appreciated and that what they bring to the company is valuable."


This feeling is usually more acute in small businesses rather than large corporations, Weingarten notes, because owners are likely to interact with their employees more closely. "When you need a little extra effort, employees are going to be there for you because they feel that you've been there for them," Weingarten says. "These are the people who won't take off when they have a sniffle. It's amazing what a little good feeling will do."


Information and transparency about company policies are key to alleviating problems preemptively, Weingarten adds. A clear statement about how raises are determined can remove a lot of the questions employees secretly have and reduce their anxiety. Small business owners can give themselves wiggle room and relieve some of their own pressure, too. For example, the policy can state that yearly raises may be suspended due to a severe economic downturn or some other unforeseen calamity. The important thing is that employees know in advance what to expect.


"Think of it like a partnership," Weingarten says. "You have answered the question for them preemptively." Instead of stressing over their salary, employees will more likely channel that nervous energy into focusing on their work.


Encourages flexibility among workers

Clearly stated company policies on raises might work for some businesses, but not for all. Some small businesses have found success with a less formal, but surprisingly effective and personal way of handling pay increases. Case in point: Dinovite, a Kentucky-based manufacturer of all-natural pet products, founded in 2001 by Cindy Lukacevic and her husband, Ed.


Dinovite has 17 full-time employees, and the business is currently testing using temporary workers during peak periods. Full-timers are cross-trained to be able to handle different parts of the business—for example, a member of the marketing team may be pulled to work on the production line—and are expected to be flexible team players.


Raises_PQ.jpg"We hire rock stars who desire the best for Dinovite and come up with great ideas," Cindy says. "These are great people who take processes and make them better. We're asking for your brain and for you to give input. We look for people who are innovative and creative and enthusiastic. Those are the types of things we give raises for."


For example, when a key team member had to be replaced, Lukacevic knew who she wanted to move into that position—but she didn't want the employee giving up her existing responsibilities because she was doing such a good job. "So she kind of took on two hats and created this unique, eclectic type position. In return, she did get a raise," Cindy says. "She filled this huge hole, and it worked out really well for us."


Lukacevic and her husband set the pace at Dinovite, and they will quickly pitch in wherever and whenever the work needs to be done. Such flexibility makes them familiar with what's going on in the lives of their employees, and gives them the chance to intervene early in difficult situations. In one instance, an employee at the company was forced to take a second job because her family was splitting up. Lukacevic didn't want to see her work two jobs, so she gave her more money. "She's absolutely worth it. It filled a need in her life, and we were able to do it," Lukacevic admits.


For 2013, Dinovite is looking at implementing some kind of incentive program for employees. "When we're highly profitable, so is everybody," Lukacevic says.


Shows your appreciation in different ways

Like Dinovite, Paloma Clothing—a womens' clothing, jewelry, and accessories store in Portland, Oregon—doesn't have a formally stated policy on raises. But that doesn't drive employees away. In fact, it's just the opposite: employee retention has been at an all-time high for the past five years.


"We try to give employees what we call a three-percent cost-of-living raise every year when their annual review is up," says Mike Roach, co-owner of Paloma Clothing along with his wife. "We'll do bigger raises selectively where some employee has stepped up to greater responsibilities or given particularly outstanding performance. In the last six years, we've been largely preemptive by simply doing an annual review. Everybody knows when their review month is."


Roach emphasizes that it's important to give employees something to show your appreciation, even when times are rough. He was forced to put raises on hold during the worst of the recession in 2008–2009. In lieu of a cash bonus, he has given employees the equivalent of a gift certificate for store clothing and added extra vacation days to their allotment.


"Instead of thinking of yourself as the owner of the business, think of yourself as the coach of your employees," Roach suggests. "Recognize anything good that your employees do. That'll help them do more of it because they know you notice it."

Freelancers_Body.jpgby Robert Lerose.


Freelancers in the workplace are nothing new. Businesses have consistently relied on them under a variety of circumstances: to handle the overflow in a company's workload, to step in when key members of an organization take time off for vacation or maternity leave, or to provide a fresh perspective on a project. The game changer in this working relationship is technology. Today, thanks to the digital revolution, freelancers can specialize in many more services than a generation ago, and businesses can literally search the world for the best resources for their needs.


Still, even though the Internet has broadened the field for both sides, a measure of due diligence and open communication is recommended to forge a stable working relationship. We called on three experts from different realms of the freelance world to share their perspectives on working with outside service providers.


Get more done with a virtual assistant

A virtual assistant (VA) is generally someone who provides creative, technical, or administrative services from a remote, or offsite, location. Besides handling traditional chores such as transcribing and coordinating meeting schedules, today's VAs can give more hands-on support. For example, a VA can go through and prioritize your email before you wake up in the morning. They can write your blog posts, look after your Twitter and Facebook accounts, even update your website regularly.


Freelancers_PQ.jpg"They can do everything but bring your coffee," says Tawnya Sutherland, founder of VAnetworking, a social network for virtual assistants that she launched in 2003. "Once you work with them, you can outsource different things to clear up your schedule, so you can do things you love to do—whether it's marketing your product or producing more product, or whatever it is."


Evaluating a VA is no different than hiring a permanent, onsite employee, Sutherland says. Small businesses should check out the potential candidates’ websites, ask for references, and, of course, interview them—either over the phone or through webcam technology, such as Skype. Small business owners can also go through a network like Sutherland’s that lets them post requests on a job board.


A common mistake among small business owners is not maintaining clear, regular communications with their VAs. "If you're hiring them for five hours a month, you don't need a once a week meeting," Sutherland says. "But if you've got a fulltime VA, you need to be in contact with them, whether it's through texting, Skype, or a project management system."


The amount of contact is "a personal preference" that is hammered out between the VA and the client, according to Sutherland, depending on factors such as personality types, the number of work hours reserved, and the scope of the projects themselves. For example, hiring a VA to design a new website will likely require more contact than transcribing a recording.


Fees for virtual assistants are across the board, depending on their experience, type of services offered, and length of term. For example, you might be able to negotiate a discount rate for a VA who is on a monthly retainer. Other VAs offer package deals, such as writing a certain number of blog posts, editing and posting them, finding pictures for them, and handling comments—all for a fixed price.


"You're getting a full hour's work," Sutherland says. "If they get up to go to the washroom, they're not charging you for that time. What takes a secretary two to three hours to do with all the interruptions, a VA can do in an hour."


Distinguish your company with a graphic designer

Freelancers who provide creative services—such as copywriting or design—have always been prominent

in business, advertising, and marketing circles. Small businesses can find hidden benefits in working with them, such as getting an objective perspective on an inhouse project.


"It's good to have a fresh outlook," says Carrie Scherpelz, freelance graphic designer and sole proprietor of Design that gets results, based in Madison, Wisconsin. "[Creative freelancers] can help your business stand out and communicate well."


With a strong background in direct response, it's no surprise that Scherpelz is big on results when it comes to small businesses evaluating the work of freelance designers. For example, asking the designer how an ad performed or the number of responses that a brochure generated can help determine if they're right for your company.


Scherpelz collaborates closely with clients, especially new ones, to get a sense of what they want in a design. She'll give them samples to see what they like and what works for them, and then use those as a starting point before tackling an assignment.


"I don't believe in a big, glitzy presentation of three ideas that the client chooses from. Instead, I believe in rough sketches back and forth [to find] what they like. Then, I'll combine them in our second round into something. That way, it goes faster and you get a result that everyone's happy with."


For example, she recently submitted a wide range of logo roughs to a client, who told her by email that he didn't like any of them. Instead of replying by email, Scherpelz called the client and talked through the designs over the phone. During the call, the client realized that there was a logo that was close to what he wanted. Scherpelz added one word to the design and the client was satisfied. "It was kind of a mutual problem-solving exercise," she says. "It turned out there was even one in the first round of roughs that was very acceptable. But you have to get on the phone and say, 'What are you looking for? What are the specific things?' It can't just be through email."


Build your business with a bookkeeper

Like other outside service providers, freelance bookkeepers bring a fresh set of eyes that can help a business prosper beyond merely recordkeeping.


"As a business owner, you have so much going on in your head that it's really hard to see certain things in your financial setup that a freelancer can," says Susan Osborne, founder of SheBuildsABusiness, an online resource for solopreneurs.


She found that one of her small business clients was paying $50 a month for website hosting. Osborne created a new website for her and moved her to an $8-a-month hosting service. For another client who manufactures a diaper bag product, Osborne identified ways to increase her revenues and trim unnecessary costs. For example, she was able to cut her client's monthly cell phone bill from $200 to $160 by finding a plan with fewer bells and whistles.


"Like most small business owners, [my client was] so busy that she didn't have the time to look closely and think about these things," Osborne says. "But as the freelance bookkeeper, I do have the time. That's my job."


Whether your freelancer takes such an active role in your financial operations or not, it's imperative that you stay involved and refrain from turning over too much control. For example, business owners should still sign all checks and have the sole authority of moving money around from one account to another.


Osborne says that the accounting software can be handled in different ways. In most cases, the small business will supply the software—QuickBooks, she says, seems to be the preferred bookkeeping/accounting program—to the freelancer. In other cases, such as when the freelancer wants files stored in a cloud-based environment—which usually costs about $35 to $50 a month—some bookkeepers will work that into their fee and then handle paying for it themselves.

Many bookkeepers charge hourly rates ranging from $25 to $70. Freelancers who regularly handle a company's books can charge between $250 and $500 a month, according to Osborne. Business owners who want guidance beyond standard bookkeeping typically seek out a financial adviser or CPA, she says.


"Look at this relationship as a partnership or collaboration with another professional," Osborne says. "I approach it as how I can help them run their business better."


Where to find freelance help

In addition to the resources cited above, small business owners can also check out these sources of freelance help:


Elance: Businesses can post job requests for free, but they're charged a commission of between 6.75 percent and 8.75 percent of the project fee, payable upon approval of the work. Mostly for creative services and IT-related jobs.


Guru: Markets itself as providing technical, creative, and business specialists. Freelancers are charged both membership and transaction fees to be matched to the right business project. 


Freelancer: Bills itself as the largest outsourcing marketplace in the world with over 6 million service providers where freelancers bid on assignments.


oDesk: Lets you post jobs, in either a public or private forum, and interview freelancers for free, but charges a 10 percent commission on the fee for assigned projects.

Wellness_Body.jpgby Iris Dorbian.


One of the biggest health hazards is ignoring the mind-body connection. Stress and anxiety can exact a punishing toll on one’s health, leading to serious ailments. In the workplace, lowered employee morale and absenteeism can result. Although many small business owners are aware that their employees’ health is critical to productivity, few are doing anything about it.


According to a recent report commissioned by the National Small Business Association and Humana Inc., a heath insurance provider, 93 percent of employers say that employee health is important to the bottom line; however, only 22 percent of small firms offer wellness programs. The reason cited is a lack of confidence in their ability to implement such initiatives for employees.


It’s a dichotomy that has unsettling consequences. Consider this: According to the Bureau of Labor Statistics, unplanned absences among workers are costing American businesses an average of 2.8-million workdays each year, translating into a loss of $74 billion. In this vein, small business owners have a lot to gain by instituting best practices that can improve the health and wellness of employees, while increasing overall productivity and reducing health care costs. But how can every entrepreneur—even those who lack the financial resources to execute ongoing programs—encourage their staff to adopt a healthier lifestyle?


Wellness_PQ.jpgFoster healthier eating habits

Just like a guitar or a piano, your body is an instrument that needs to be maintained and fine-tuned on a regular basis. Outside of exercise, one of the best ways to achieve this is to eat a healthy, balanced diet, which includes daily intakes of protein, fruits and vegetables and avoidance of processed and deep fried foods.


Rosalie Moscoe, a Toronto-based nutritional consultant and stress relief expert who has worked with numerous small businesses, suggests having a “healthy eating” day.  “Each employee can bring in a healthy snack in the form of nuts, fruit, or homemade muffins with low sugar and whole grain flour,” she advises. “Or they can buy something from a health food store.  Keep in mind that sugar lowers immune function, so it’s best to avoid all sugars when you are sick.”


But you don’t need to wait for specific themed days. Stock up your work kitchen with all sorts of healthy food, ranging from yogurts to protein bars. Also, include blenders for employees to make smoothies and similar drinks using fresh fruit. Joel Gross, founder and CEO of Coalition Technologies, a Los Angeles and Seattle-based web design and marketing firm, adheres to this practice as routine.


“My employees are valuable assets and keeping them healthy and productive is a high priority,” he says. In addition to providing employees with an abundance of high-protein, healthy snacks, Gross also likes to keep multivitamin packs, Vitamin-C chews, zinc tablets and other nutritional supplements available and in the company kitchen.


Promote exercise and non-sedentary activities

Having a healthy and fit body is integral to maintaining good wellness habits and keeping stress at bay. Gross notes that small business owners can practice what they preach by offering free memberships to a local gym as a employee benefit or by encouraging their staff to partake in non-sedentary activities throughout the day, like an invigorating walk around a nearby park. (Gross does both.) Similarly, many health insurance plans now offer discounts to members who enroll in gym memberships


“I want to encourage [my employees] to get out, exercise and work off the stress that can build up working in an office,” Gross explains. Not all employees follow his advice, but, he notes, “I am constantly looking to enroll a greater number” to take advantage of the gym membership.


Punit Dhillon, CEO of OncoSec Medical, a two-year old San Diego-based biotech company that develops treatments for advanced-stage skin cancer, goes one step further: He keeps several “communal” bikes in his office to encourage his staff of 10 to use them during lunch. He also encourages them to take midday walks or runs, even going outside to play a game of frisbee.


Dhillon feels these are necessary supplements to what his company does. “Because of the program we’re working on, we’re trying to complement that with a positive environment, which comes down to not only building awareness of having a healthier lifestyle, but employing practices associated with it, like exercise and physical activity,” he explains.


Improve employee work/life balance

Very often absenteeism may be attributable to an employee having to handle responsibilities at home, which a stringent work schedule might not allow. Give your staff the option to work from home during those days when they feel their presence is urgently needed or create a schedule that’s more flexible. 


Initiate wellness seminars

Invite an expert from a local spa or wellness center to come to your workplace to share health-related tips. This can run the gamut from relieving stress and getting better sleep to boosting nutrition and improving time management. “These are all great topics to help boost immunity and morale,” says Moscoe, who is the author of Frazzled Hurried Woman! Your Stress Relief Guide to Thriving…Not Merely Surviving.


Defuse an intense work environment with laughter

This doesn’t mean you should use important meetings as a pretext to do stand-up, but if you can incorporate some levity into the work proceedings, then do it.


Lani Anderson, a Los Angeles-based holistic practitioner who has been working with small businesses for 10 years, cites a client of hers that always includes a humorous anecdote in their customer newsletters. “He and his staff share funny jokes and stories for inclusion,” she says. “Humor brings great health benefits and this team effort brings staff together, like a family, which is the way many in small businesses feel and it's healthy.”


Maintain cleanliness

Many small business employees work in close quarters, meaning infections like colds and the flu can often spread quickly. So, it’s important to keep high traffic areas in your workplace—especially shared surfaces like doorknobs, telephones, and other commonly-used items, as clean as possible as a preventive measure. Of course, a good way for this to happen is through the full participation of employees. But an owner should also take an assertive role here.


“Send expert health tips to your employees electronically and post reminders on message boards,” adds Moscoe. “ You won’t want to sound like their mothers, so try and keep it light and informative. Let your staff know that they should stay home when they are sick.”


Just because you have a small business doesn’t mean you can’t successfully inaugurate and implement a health and wellness program for staff on a budget. Whether it’s loading the kitchen with nutritious snacks or encouraging employees to take a work break with a walk around the block, these measures can be critical to boosting employee morale and immunity. Understanding the mind/body connection is critical to productivity and success. 

WelcomeHome_Body.jpgby Jen Hickey.


Since 9/11, the U.S. has deployed the largest number of active duty and reservists since the Vietnam War. Of the more than 2.3 million deployed (with over 760,000 National Guard and Reserve), about half have left the military (with about 640,000 Guard and Reservists deactivated). And over the next few years, it’s expected that even more soldiers, sailors, marines, and airmen will be returning to or seeking civilian jobs. For small businesses, filling the boots of those citizen soldiers during sometimes multiple deployments of a year or more has had its costs. But keeping the lines of communication open before, during, and after deployment can help ease their transition back into the workplace. There are also legal and logistical factors a small business must consider if temporary help has been brought in during those deployments.


When Frank Strong, a career reservist, got orders to deploy to Iraq in October 2005, he was one-third of the marketing team at Tysons Corner, Virginia based Managed Objects, a $30-million software company of 100 people at the time. “As soon as you get notification of deployment, you’re obligated to let your employer know,” explains Strong. “so they can make the necessary adjustments.”  Before he left, Strong’s co-workers had a party for him and bought him an iPod. While his employer brought in help during his deployment, his position was open when he returned, as is required by law.


According to the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), employers are obligated to reinstate uniformed services employees who have been deployed to the same position or one that is commensurate in responsibility and pay, as well as continue health benefits for up to 24 months. And depending on the length of deployment, returning uniformed services employees may be entitled to leave time before having to return to their civilian jobs. Returning service members are also entitled to any promotions and/or salary increases that may have occurred during their absence, as well as reinstatement of health benefits if they chose to use military health plan during deployment.


Including training leading up to his deployment, Strong was gone for about a year and a half, returning in the spring of 2007. But he kept in touch with his employer, exchanging emails with his boss at least monthly. “He’d keep me updated on what’s going on with the company,” recalls Strong. When he returned, Strong met with his boss and visited the office to let everyone know he’d be returning. “It’s important to show your face and let your employer know you’ll bet back,” notes Strong. “But employers should also encourage their employees to take the full time they’re allotted after their service, because you need that time to visit family and friends, arrange housing and get your life in order.” Upon his return from Iraq, Strong took the full 90 days he was entitled to before returning to work.


Louie Keen has employed several active-duty military, Reservists, National Guard, and veterans, as well as their spouses, at his three small businesses in St. Robert, Missouri, home to Fort Leonard Wood, the U.S. Army’s Maneuver Support Center, which trains up to 90,000 military and civilians each year. “When I hire someone, their family becomes part of the organization,” explains Keen. “Our soldiers are protecting our country, we try to do that for their families while they’re gone.” Keen keeps in contact with spouses and invites the families to company events and holiday parties. “It gives soldiers peace of mind knowing their families are being treated the same way while they’re away.”


WelcomeHome_PQ.jpgFor employees in key jobs gone for long and multiple deployments, Keen offers them comparable positions at the same pay until they get themselves acclimated. “For positions that require a lot of training like bartending, they’ll work the back of the bar for a while and then I’ll give them some bartending shifts once they’re back up to speed,” says Keen.


Social media and the Internet have also made it easier for Keen’s deployed employees and customers to stay connected. “Many friendships develop at our businesses,” notes Keen. “Connecting through our Facebook page gives them a sense of home while they’re away.” Keen also stays in contact with his deployed employees’ unit commanders or senior non-commissioned officers (NCOs), who can assist with sending care packages to deployed soldiers and help with transition after deployment. 


By the time he was deployed again in April 2011 as part of a multinational peacekeeping force sent to Egypt, Strong had moved onto Beltsville, Maryland-based Vocus, a cloud marketing software provider. It was much easier to stay in touch with his employer this time around, as Internet access was more readily available. “The technology was far better than in Iraq,” recalls Strong. “I was able to stay up to date real time through Twitter and the company’s web site and spoke to my boss about once a month.”  Like at his previous employer, Strong was placed on an unpaid leave of absence during his deployment, However, Vocus also offered to make up the pay differential between his higher civilian salary and lower military pay and continued to match Strong’s 401(k) contributions, though the company was not legally obligated to do so. Strong recommended his employer for an award through Employer Support of Guard and Reserve (ESGR), a Department of Defense agency created in 1972 to improve cooperation and understanding between National Guard and Reservists and their civilian employers.


For those small businesses that can’t afford to extend benefits or pay, they can still sign a statement of support for their Guard and Reserve member employees through ESGR, which also offers USERRA training in conjunction with the Department of Labor (DOL) and compliance assistance for employers.


“The military has gotten a lot better at taking care of soldiers once they come home since the early days or Iraq,” says Strong. Still, adjusting back to civilian life can be difficult, particularly for service members who have been deployed to combat zones. “If I see someone flipping that switch a little too quickly, I make sure they get some counseling,” notes Keen. “But the military has trained them to be that way in combat, so it takes some time to undo that.” In the 11 years since the start of the War on Terror, Keen has only had to let go two employees in 2004/2005 after their deployment for behavioral issues. “The transition usually takes a few months,” says Keen. “But the difference between 2006 versus 2012 is enormous with regard to how the military is helping to re-integrate the soldiers after their tours.”


To help with the transition, Strong recommends entrepreneurs open up the communication lines as the pace of adaptation at small businesses is often quick. “Have a conversation about expectations, metrics and goals, if the job description has changed or new responsibilities have been added,” Strong advises. Also, it might help to become familiar with resources like Military One Source, and the Center for Deployment Psychology’s free online training course in “military cultural competence,” which will also help increase employer sensitivity to some of the issues that their part-time military employees face during and after deployment.


Life after the military for new veterans

The Costa Mesa, California nonprofit Working Wardrobes, recently received a federal grant to launch its VetNet program, which offers veterans a much broader array of career development services and industry training and offers education to employers on how to recruit, train, and retain qualified veterans. “Having served veterans among our general population for the past seven years, we discovered that much more needed to be done to address issues unique to their situation,” explains Jerri Rosen, founder and CEO of Working Wardrobes. “Particularly in that transitional period after leaving the military.”


“Many veterans are very young, having enlisted just after high school, and don’t plan to return to jobs they had before they entered the military,” points out VetNet case manager Dr. Roberta Cone. “One of the things we focus on is translating skills and discipline they acquired in their military training and tour of duty to a civilian skill set.” The staff of VetNet all have military backgrounds and training and sensitivity to the unique challenges veterans face. “We have a lot of tools to help make that transition easier for the veteran and the potential employer,” explains Rosen. “It’s not just about finding a job, but retraining to be part of civilian and workplace culture.”


While small businesses need to be aware of their legal responsibilities, those costs are far outweighed by the value of retaining uniformed service employees. Employers can seek additional support by partnering with local nonprofits and state agencies that work with veterans. “One of the benefits of hiring a reservist is you get someone that’s very motivated and wants to do more than just the minimum,” notes Strong. “They’ve attached themselves to selfless service and duty of country. And that’s a trait you see replicated in their day-to-day work ethic.” But educating yourself and employees about the issues deployed service members face doesn’t cost a thing and can help ease their transition back to the workplace.

DebtofGratitude_Body.jpgby Erin McDermott.


Why was there no one to answer the phones at Windsor Resources the other day? Instead of a proverbial “Gone Fishin’” sign up on the front door, it would have been more apt had it said, “Tennis, anyone?”


More like tennis everyone: All 30 employees of the New York and Stamford, Connecticut, staffing and recruiting firm spent the day in Flushing Meadows at the National Tennis Center, checking out the action at the U.S. Open. It was a measure of thanks from Windsor chief executive and founder John Schapiro to his staffers, who he says have stuck by him through the ups and downs of running a small business.   


“Everyone’s given their all to make this opportunity for me and I want to give back,” Schapiro says. “I think everyone works with me and not for me. When you have a staff that shows such ethics, loyalty, and appreciation, you want to do something nice for them.”


DebtofGratitude_PQ.jpgWith Labor Day having just passed by on the calendar, it’s time to reflect on a holiday that pays homage to Americans’ work ethic and honors the effort that built this country and its giant economy.


It can also prompt small business owners to think about how they can show gratitude to their employees. While times have been tough at many companies recently, it’s still important to remember the long-term value of having employees who feel appreciated. “The costs associated with thanking our employees are minimal compared to the costs we incur when we have to replace them,” notes David Handmaker, president of Next Day Flyers, a Rancho Dominguez, California-based online printing company. “Letting employees know they are valued is a message which should be continually conveyed.”


So how can you give back without breaking the bank, while still giving employees something of genuine value? 


Start by thinking of what you can afford, says Jerry Ross, a longtime entrepreneur and now executive director of the National Entrepreneurial Center, a small business development group in Orlando, Florida. “A raise of a dollar an hour is nice, but after the first paycheck it may not mean much to them. It’s something that will cost you every week after that.”


Ross recalls taking his teams on brewery tours, go-kart racing outings, and pizza and beer nights—all focusing on building camaraderie, boosting morale, and making for fun memories. Over the years, he’d negotiate with clients to build up a stockpile of freebies and gift certificates, which he’d in turn offer to staffers deserving of a thank you. “People don’t usually leave companies because of money,” he says. “They leave because they have bad bosses.”


But what works? A few ideas from other small business people:


Know your staff.  Make it a general practice to chat throughout the year, to learn the names of significant others, kids, grandchildren, pets, activities, and challenges, too—the things that matter most to them. A small donation to a favorite charity or even a Bring Your Pet to Work Day will be long remembered.


Blow off steam together.  When significant goals or deadlines are reached, why not recognize hard work with a bit of a blowout? When employees can bond on other levels it can be good for your business, too. Shawn Farner, a web communications and marketing specialist in Harrisburg, Pennsylvania, says he fondly remembers his time in the insurance industry, when his company would pick up the tab for a quarterly day out with co-workers. “A bean counter might see that as a day of lost productivity and a couple of hundred dollars the company didn't need to spend, but I saw it as a great way to show appreciation,” says Farner. “A bonus is nice, but a good time is even better.”


Don’t forget significant others. If your staffers are putting in long hours, it’s likely affecting their personal lives, too. So aim your special rewards at not only your employees, but their loved ones, too. “I believe people appreciate stuff that’s done for people they love even more than stuff that’s done for them,” says Tolulope Akinola, founder of AppHere, a five-person app development company in Palo Alto, California. As someone running a startup on a tight budget, he says he still does his best to find opportunities to show his appreciation, such as gifts of dinner for two at a nice restaurant or spa gift certificates to spouses or partners who deal with his employees’ longer-than-usual absences.


Low-cost rewards don’t have to feel cheap. Consider a monthly drawing with inexpensive prizes, like a later start on a Friday or a Starbucks card. Celebrate an employee of the month and let the staff make the decision. A tower of cupcakes to celebrate when an employee passes a certification exam or achieves a periodic safety record is also a good idea. While financial incentives are always welcome by employees, smaller tokens of appreciation often have a more lasting effect in showing employees their hard work is not going unnoticed.


Think big, even with small actions. As much as running a small business may have its tough moments, it’s an unimaginable achievement for many people. One way to inject a dose of humility into the workplace: Open a running group donation to children in poverty, through groups like the Save the Children Foundation, or microloans to struggling entrepreneurs in the developing world, through sites like Kiva. Marlene Caroselli, author, speaker, and corporate trainer, suggests appointing one staffer to be the collector of loose change. On Friday afternoons, as people are prepping for their weekends, ask for donations of small coins. Many programs accept as little as $5 a week to sponsor a child who is living in impoverished conditions. Annual progress reports and other correspondence give new meaning to the word “grateful.”


Behold the power of food. Whatever you do, don’t forget birthday cakes. People bond over food—dining together helps break down barriers. From bringing pizzas or bagels on a Friday to even tomatoes from your home garden, engaging your staffers with a treat can build relationships and help you connect on more than a business level. Ross says he recalls at a job earlier in his career where all members of the sales team got a big box of Omaha Steaks as a reward for meeting a goal. Even though he was a newbie, his boss told him “Even though you’re on the bench, you’re still part of the team.” But more impressed, even months later, was his wife, keeper of the refrigerator freezer.


Heading out to their grill, Ross says his wife would always pause to note: “That’s a great company!”

Body_HSA.jpgby Sherron Lumley.


A health savings account (HSA) is an option available to small businesses that when used in combination with a high-deductible health plan (HDHP) provides an affordable way to offer medical benefit to employees. For the employer, there is a significant benefit—contributions made to an employee’s HSA are tax deductible. For the employee, the benefit from the employer is not considered part of gross income for tax purposes, so the funds contributed are not subject to federal income tax. Funds in the account belong to the employee from day one and accumulate if not spent from year to year.


“The HSA is very easy and efficient to set up,” says Sandy Abalos, CPA and small business owner of Abalos & Associates, a full-service accounting firm in Phoenix, Ariz. “I have 15 employees and we have an HSA plan here,” she notes.  “We pay 100 percent of the cost of the health plan deductible.  As the employer I can make contributions for the employees that are deductible to me.”


HSAs are a bit of a hybrid between flex spending accounts and individual retirement accounts (IRAs). They first became available in 2003 and have since experienced a slow, but steady adoption rate. The 2011 census released by America’s Health Insurance Plans, Center for Policy and Research showed 11.4 million people in the U.S. were covered by HSAs.


PQ_HSA.jpg“The HSA is like a medical IRA,” says CPA Sandy Abalos. “The money is not a use-or-lose situation.  It is [the employee’s] and the account goes on even if they change jobs or insurance coverage.” And much like an IRA, an HSA is established through annual contributions, which can be up to 100 percent of the plan's deductible amount or up to the maximum contribution levels determined by the Internal Revenue Service (IRS) each year. Details about contribution level limits are regularly updated in IRS publication 969.


Health savings accounts are managed by HSA trustees, usually a bank, insurance company or other financial institution. Typically, there is no charge for setting up the HSAs for employees. 


“Every employee has their own HSA account,” Abalos explains. “You set it up with a bank or insurance company, there is no application or authorization needed from the IRS, and no other fees.”


No other insurance allowed—with exceptions

However, in order to prevent people from obtaining the financial benefits of an HSA while protecting themselves with other health insurance plans, the law restricts the other coverage one may have. There are some exceptions, though, such as auto and life insurance, accident insurance, insurance for a specific disease or illness, and insurance that pays for a fixed amount per day for hospitalization. 

What else is new?

“What’s new is not necessarily positive,” says Abalos. “Before 2011, you could pay for over the counter (OTC) medicines with an HSA,” but now this is not the case.  As a result, small business owners should be aware that starting with tax year 2011, a medicine or drug will be a qualified medical expense only if it meets one of the following three criteria:


  1. Requires a prescription.
  2. Is available without a prescription (an over-the-counter medicine or drug) but you still get a prescription for it.
  3. Is insulin.


Insulin is now the only OTC medicine approved for reimbursement in 2012 without a prescription. The penalty of 10 percent for ineligible expenses paid with HSA funds increases to 20 percent in 2012.


New contribution limits:  In 2011, the IRS introduced new contribution limits of $3,050 for individuals or $6,150 for families. The annual catch-up limit for those 55 years of age and older is $1,000 (single or family). 


In 2012, these contribution limits will be raised to $3,100 for singles and $6,250 for families.  The catch-up limit (55 and over) stays the same at $1,000 for singles or families.


The new HDHP Minimum Required Deductibles:

Self: $1,200
Family: $2,400
HDHP Out-Of-Pocket Maximum - Family: $12,100
HDHP Out-Of-Pocket Maximum - Self: $6,050


An HDHP plan typically has lower premiums than a traditional plan. “Premiums were out-of-control and sky-rocketing,” recalls Abalos. “I asked myself, ‘If I were an employee, what would I like?’” She says that the HSA was an option that allowed her employees to have a health insurance plan with good coverage, but was still affordable.


“We pay 100 percent of the premium—that’s the amount that I put in the employees account,” says Abalos. “The money is not a use-or-lose situation,” she adds.  “It is theirs and the account goes on even if they change jobs or insurance coverage. It’s a great opportunity.”


Sidebar:  Additional HSA Resources:




For more HSA questions, try these IRS helplines:

1-800-829-1040 for individuals

1-800-829-4933 for businesses


As always, since every business's situation is unique, we recommend consulting a qualified tax advisor.

In the 15 years that a small metal finishing company has had an aggressive wellness program, the number of employees who smoke has decreased from 42 percent to 15 percent. The compliance rate could be due to the fact that non-smoking employees get automatic lower insurance premiums. However, the senior managers think employees are motivated by the program’s offerings, which include perks like a three-day, all-expenses-paid mountain climbing expedition in Colorado. The company also boasts insurance premiums that are 30 percent lower than comparable Midwestern outfits in their industry.


Wellness White-in article.pngA small oil drilling company was losing tens of thousands of dollars per year in lost productivity, sick pay, and recruitment costs every time a worker was injured. Since it realized that a number of workers were at high risk for injury and even death based on their body mass indices, blood pressure levels, and age, they knew that they needed to take proactive steps to improve its workers’ health. The company worked with an independent wellness consultant who showed them that their savings could be up to $125,000 for each employee, which could amount to $2.5 million over the average 20-year employee lifecycle.


A small network security company in Florida has been able to decrease its employee turnover through a competitive fitness program that keeps employees engaged, energized, and feeling valued. In a survey, 92 percent of the company’s managers reported an improvement in their workgroups’ morale, motivation and effectiveness since the wellness program was introduced.


Wellness Program Benefits

While 82 percent of American businesses with more than 50 employees have some kind of health program, small businesses have been slower than large businesses to institute full-fledged wellness programs. However, for small businesses the stakes can be even higher: As illustrated in the case studies above, well-managed, strategic health and wellness programs can help small businesses minimize healthcare costs, reduce lost productivity, and attract and retain the best employees – all of which will ultimately impact their bottom lines and long-term viability. The risk of being complacent is higher for small businesses as well: “One big medical claim can just destroy the premium structure of a small company,” says Bill Kizer, founder of Wellness Councils of America (WELCOA).


Defining “Wellness”

Before deciding if a wellness program is right for your business, let’s first define what “corporate wellness” is. Wellness is not a static, unchanging state; it is “an active process of becoming aware of and learning to make healthy choices that lead toward a longer and more successful existence.” A wellness program can comprise on-site fitness centers and health coaches; healthy food offerings; ergonomic workstations; educational workshops in such topics as CPR, stress management and nutrition; Web-based support groups; competitive companywide activities, like weight loss contests and softball teams; screenings for conditions like skin cancer and diabetes; and health risk assessments.


A word should be included here about health risk assessments (HRA): These are surveys that gather baseline self-reported health data from each participating employee, which in turn are used by employers to create customized interventions. Learning of risk factors and feeling empowered to address them are often key motivating factors for employee participation. Other possible incentives are bonuses or other financial rewards; reimbursement; flextime; healthcare premium discounts, or contributions to tax-free health accounts.Corporate Wellness Pull Quote.png


How to Start

Creating an effective program has several components:


  • Define your objectives, i.e. decreased absenteeism; better morale; healthcare cost savings.
  • Specify your needs, i.e. uncover health problems in your workforce.
  • Decide how you are going to address those needs, i.e. through a comprehensive in-house wellness program, or by starting small with discounted memberships to a local fitness center, for example. (If you need guidance, there are many private companies that offer wellness consulting, or you can seek information from organizations like the Red Cross, the American Cancer Society or the American Heart Association.)
  • Determine how you will motivate employees to participate – with financial rewards, time off, or prizes
  • Keep track of your progress, i.e. by periodically assessing program performance and participation levels and using internal communications to keep employees informed of new offerings.


Studies show that there are societal benefits to employee wellness programs as well: A report from the American Institute for Preventive Medicine states that employees who fall into 5 or more risk categories (stress; weight issues; high cholesterol; hypertension; lack of exercise; and smoking) generate three times more health-related costs than employees in only 1 to 2 categories. Additionally, employees who smoke one or more packs of cigarettes a day generate healthcare claims that are 18 percent higher than non-smokers; individuals with hypertension have health claims that are 11 percent higher, and being 30% or more overweight can result in 11 percent higher claims than being 20% overweight.


These may be some of the reasons that President Obama has highlighted prevention as integral to his health reform plans. As a small business, you should consider making wellness a central component of your short- and long-term growth strategy.

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