A.I. in Employee Health Benefits

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All HR professionals are aware of Artificial Intelligence (A.I.) and its ever-growing influence on today’s modern organizations. Many organizations have used A.I. and its abilities in their recruiting programs, yet few have thought about A.I., and its predictive powers of data for designing and maintaining employee health benefits programs. Now, however, cutting-edge organizations are starting to do just that.

A.I. for health benefits is still very new; nevertheless, it is starting to become more pervasive in health benefits programs. We are all familiar with benefits chatbots that help employees with the more administrative aspects of navigating benefits, or how to submit a claim, but very soon A.I. and predictive data analytics are going to move way beyond that, and organizations have to prepare for the advantages and challenges that come along with great technological leaps.

Sam Barrett, in the article “How artificial intelligence is influencing the world of employee benefits,” discusses some of these new technological interventions, and the employee benefits considerations that go with them. For example, in the future, the predictive data power of A.I. may be used in benefits programs to help employees make healthier lifestyle choices for themselves, along with customizing recommendations for change to an employee’s benefits plan.

This could be very beneficial for the employee, because they’ll have a flexible health benefits plan designed just for them. What the results of this will be, is hard to know—it could increase the cost of the plan drastically, or, if employees’ lifestyles become healthier, there could be an overall cost reduction.

With every new technological advancement, there should always be consideration for possible problems as well. In this case, the biggest problem could come from breaches in security meant to protect private and sensitive employee data.

LifeLabs is a Canadian medical laboratory, which just suffered a cyber-attack, where 15 million patients’ health records were compromised. When an organization’s records are moved onto a digital platform, to be handled by A.I., how can an HR department guarantee that their employees’ private data will be kept confidential? This is a primary concern that must be addressed before any HR department plans to implement an A.I. system for benefits programs.

Additionally, there are even more difficult questions that need to be addressed before venturing down the path of A.I. for benefits:

  • Who owns the employee health benefits data? Is it the company, the employee, or the benefits provider?
  • What happens if the A.I. systems decide that an employee is not entitled to life insurance benefits, because their healthy lifestyle score is too low?

Depending on how organizations answer these questions, there may be a turning point to if and when A.I. and predictive data analysis are accepted in the workplace for usage in employee benefits programs.

Discussion Questions:

  1. Identify the advantages and disadvantages of the employee, the employer, and the benefits provider owning the employees’ health benefits data.
  2. Determine who you feel should own and control the employees’ health benefits data —the employee, the employer, or the benefits provider. Defend your position.

Sick of Sick Notes

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Everybody gets sick. Think about the last time you were sick. Perhaps you had a nasty cold or the flu which included fever, body chills, sweating, aches, pains, coughing, and a number of emissions from various body parts. Perhaps you were so sick that you could not go to work and you needed to stay home to rest and recover.

Instead of staying at home in bed, however, you had to go to your doctor’s office. Unable to get a same-day appointment with your doctor, you then had to go to your local walk-in clinic or to the hospital and wait for service in an already busy health-care space. You had to do all of this not because you needed treatment, but because your employer needed a note from a doctor verifying that you were actually ill and not able to go to work.

It seems a ridiculous scenario.

Unfortunately, it is one that plays out every day in workplaces and health-care settings across the country. Rather than focusing on priority patients who need urgent medical care and assistance, the employer requirement for doctor’s notes from employees, who are legitimately ill, clogs up an already overloaded health care system for no apparent purpose.

Why does this happen? A recent article published by Maclean’s magazine explores this question and provides some not very comforting responses.

Click here to read the Maclean’s article.

A more practical and responsible approach to dealing with employee illness and absence can be found through the design and implementation of a comprehensive attendance management program (AMP). An AMP forms part of an overall compensation strategy. It provides for both indirect and direct pay options that acknowledge the need for employees to be absent from work and promotes attendance at work in a proactive manner.

The AMP provides context and content for a reasonable workplace approach to the management of employee attendance and absenteeism. For example, instead of focusing on the requirement for sick notes from employees for every absence due to illness from work, an AMP would provide a layered approach, defining when, how and for what purpose sick notes are required. Most AMP’s outline the requirement for verification of absences from employees in the case of ‘patterned absenteeism’, rather than the single incident focus as noted in our sick note scenario.

‘The 5 Key Elements of an Attendance Management Program (AMP)’ provides us with a legal insight into the components of this type of program along with a rationale for implementing it in the workplace.

Click here to read about the insights for an AMP.

With clear compliance requirements, a good AMP lets us let go of the need for unnecessary sick notes. It gives us time and a plan that moves towards a healthy, wellness-focused approach in supporting employee attendance at work.

Discussion Questions:

  1. As an HR practitioner, what will you include in an Attendance Management Program regarding timing and requests for sick notes from employees? Explain your rationale.
  2. What types of employee sick-time costings would you include in the design of and budgeting for an indirect pay plan?
  3. Instead forcing employees to use ‘sick days’ for non-illness related absences, what other types of paid or unpaid leaves from work would you put into place for employees through an Attendance Management Program?

Benefits Fraud – It’s a Fact

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Q: What happens when compensation monitoring goes awry?

A: Benefits fraud

B: Costly consequences

C: Negative public disclosure

D: All of the above and more

If this was a multiple choice question, the answer is D: All of the above and more.

A real-life example for this response comes from the Baycrest Centre in Toronto. In July 2019, the centre announced that 150 employees were terminated from the organization (resigned or let go) as a result of their participation in a long-term benefits fraud scheme. Allegedly, these health-care employees had defrauded their benefits plan of millions of dollars over the past eight years.

Click here to read about the allegations of benefits fraud at the Baycrest Centre.  

Unfortunately, benefits fraud is not something unique to one particular organization or sector. In 2016, the Toronto Transit Commission (TTC) hit the media headlines with a very similar and significant employee benefits fraud problem.

Click here to read about the TTC’s benefits fraud investigation.

In fact, the benefits industry continues to deal with increasingly creative approaches by employees who participate in fraudulent benefits activity resulting in losses of billions of dollars.

Click here to read about the impact of employee benefits fraud on the insurance industry.

As noted in the articles, benefits fraud is theft. It is stealing. It is exactly like taking money from someone else’s wallet without their express knowledge or permission.

Unlike other crimes, however, it is rare that perpetrators of benefits fraud are charged with a criminal offense. Until recently, it was also rare for employers to act on what was sometimes perceived as an act of ‘entitlement’ on the part of employees.  This perceived inaction on the part of employers does not come from a lack of interest or an act of conscious negligence. It may come from a lack of rigour in monitoring or systems controls which must be included as part of effective compensation management planning.

Not all employees steal from their employer. That is a fact. Some employees do steal from their employer. That is also a fact. Who pays for the consequences of stealing from their employer in the form of benefits fraud? We all do. That is the ultimate and most costly fact. Good compensation planning should take all of these facts into consideration, both positive and negative, in a proactive way so that the actual benefits of an organization’s benefits plan provide support and assistance for those who need it the most.

Discussion Questions:

  1. What types of monitoring systems or controls would you put into place as the Compensation Manager in these types of situations?
  2. The Baycrest and TTC articles state that this type of benefits fraud has been going on for years. How would you go about changing the organizational culture and a possible ‘entitlement’ approach in each organization?
  3. Is benefits fraud a ‘victimless’ crime? Explain your rationale

Compensating for Eldercare

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It is an undeniable truth that we all get a little bit older each and every day.

As we move along the aging path, so do our parents, at what seems to be an increasingly rapid rate. One day your parent is the way you have always perceived them to be – healthy, active, and independent. In the blink of an eye, that parent is suddenly not healthy, inactive and increasing dependent on others to get through the day. That other is usually a family member (you) who has to take on the role of caregiver to look after the physical and mental health of their aging parent.

While this is not a new trend for the Canadian workforce, the number of adult children who have taken on eldercare responsibilities continues to increase. According to a recent article published in The Globe & Mail, approximately thirty-five percent of Canada’s workforce have primary care responsibilities for one or both parents. There is no doubt that this percentage has a direct impact on organizational and employee productivity for those who have to take time off from work to care for their parents.

Click here to read the article.

While there are organizations that can offer a flexible work schedule or the ability for employees to work from home, many companies do not have a benefits strategy dedicated to workers with eldercare responsibilities. As noted in the article, eligible employees may be able access compassionate care benefits through federal employment insurance plans. The eligibility requirements, however may not be applicable in all cases. Most employees with eldercare responsibilities have to take time off from work without pay to attend medical appointments, emergency calls as well as attending to the day-to-day needs of their aging parent. From a compensation perspective, organizations should be looking at lost productivity costs balanced against the provision of both monetary and non-monetary eldercare benefits in order to reduce those losses.

This is a real compensation challenge for Canadian workplaces. With every challenge comes an opportunity to improve the situation. Hopefully effective compensation planning can provide increasing support to employees who have to care for parents who have spent their lives caring for them.

Discussion Questions:

  1. What would you include in an eldercare plan as part of a compensation strategy?
  2. If you had to take time away from work right now to care for an aging parent, what would you have to do? How would your pay and benefits be impacted?
  3. The article states that thirty-five percent of Canada’s workforce has eldercare responsibilities. How is this number reflected in your current (or most recent) work environment? What percentage of your current workforce has eldercare responsibilities?

Survey Says: Show Me the Money

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What is the best way to determine pay increases for employees?

For most organizations, calculating pay increases are included as part of an annualized budget planning process. On the face of it, budget planning appears to be pretty simple – money in vs. money out. How much money do we have to spend? Where are we going to spend it? What are the revenues? What are the expenses? What is the time frame for the upcoming budget plan? Is there a need for a contingency plan? Suddenly, the appearance of budgeting simplicity starts to become more complicated as we have to go through the assessment of multiple and competing expense priorities.

Paying employees must be at the top of that priority list.

While pay decisions do take affordability into consideration, they must also be aligned with workplace pay increase expectations. This is where the importance of data collection, through salary and compensation surveys, comes into play.

Most employees do have an expectation that their pay will be adjusted in a positive way from year to year. This is highlighted in a recent salary survey which showed that Canadian workers expect to receive a pay increase in this current year (2019) based on a number of variables. Specifically, the survey indicates a 2.8% salary increase is expected in Canadian workplaces.

Click here to read the results of the survey.

As we know from our compensation studies, data collection and survey results do provide fact-based evidence that employers can use to make pay decisions. Whether or not the employer can meet the demands arising from survey data sets up another complication in the budget planning process. While employees may expect to see the money, the employer may decide that it can not afford to show it.

Discussion Questions:

  1. How can these types of survey results influence organizational pay strategy?
  2. As an employee, how would you justify requesting an annual pay increase in excess of 2.8%?
  3. From a compensation management perspective, how would you justify giving your employees less than an annual 2.8% wage increase?