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June 11, 2010

HR Fact Friday: Most Employers to Wait to Cover Adult Children

Filed under: Insurance — Tags: , , , , 8:38 am

Many companies do not intend to comply early with a provision in the new health care reform law that will require group health care plans to extend coverage to employees’ young adult children up to age 26, according to a survey released Tuesday, June 8.

Among the 501 large employers responding to a Hewitt Associates Inc. survey, 77 percent said they will wait until the effective date before offering the coverage. Ten percent of respondents said they will extend coverage early to all eligible adult children, 9 percent said they will continue coverage for graduating students already covered in their plans, and 4 percent were undecided.

The law requires the extension to be made on the first day of the plan year starting after September 23, 2010. For calendar-year plans, which are the most common, the effective date of the provision would be January 1.

Source: Jerry Geisel, Business Insurance, a sister publication of Workforce Management.


October 16, 2009

HR Fact Friday: Employers Look to Performance-Based Awards During 2009

Spending on performance-based bonuses for exempt workers has grown from 10.8 percent of payroll in 2008 to 12.0 percent of payroll in 2009, according to a survey of large employers by Hewitt Associates, a consulting firm. In 2009, employers also dedicated a larger percentage of their payrolls to bonuses for nonexempt employees.

Fifteen years ago, such variable pay spending accounted for approximately 5 percent to 6 percent of payroll. The survey found that employers are budgeting their variable pay bonuses at 11.8 percent of payroll for 2010.

Many employers have had to freeze or cut salaries because of the economic climate. With performance-based bonuses, however, employers can reward their high performers without their budget taking as big a hit as with pay raises across the board.

“Even in the toughest economies, companies are willing to reserve money for top-performing employees as a way to reward their performance and ensure they retain these employees after the job market rebounds,” says Hewitt’s Ken Abosch. “Over the past decade, we’ve seen companies steadily shift from a fixed pay model to one that emphasizes true performance-based awards, and we expect this trend will continue.”

For those interested in learning more about variable pay system planning and implementation, please contact HRN Management Group. On October 20, 2009 HRN is launching a revolutionary new online incentive planning and administrative product called Incentive Pro. Go to for mor information.