Professional Documents
Culture Documents
Towers Watson June 2015
Towers Watson June 2015
com
Insider
Volume 25|Number 6|June 2015
In This Issue
1
Seven Things to Know About
Employee Retention Risks
5
IRS Says Self-Certification for
Hardship Distributions Not
Allowed
7
The Human Factor: How
Employee Attitudes Toward
Change Affect Change
Management
11
IRS Determination Letter
Program to BeCurtailed
13
Embedded Individual
Out-of-Pocket Maximums
Apply to Health Plans in 2016
15
More Than Hard Hats and
Safety: Engaging Workers in
the Natural Resource Sector
19
SECs Pay-for-Performance
Proposal Will Require New
Pay Calculations
20
Making Brick-and-Mortar
Retail Dance: Employees
Make the Difference
25
New FAQs Address ACA
Preventive ServicesMandate
News in Brief
12
Massachusetts Delays Paid Sick
Leave Law for Employers With
Preexisting PTO Policies
Attributes
Not likely to leave in the next two years
Would prefer to remain with their organizations even if a
comparable opportunity arises
Not likely to leave in the next two years
Would not prefer to remain if a comparable opportunity arises
Are likely to leave in the next two years
Would like to remain with their organizations even if a
comparable opportunity arises
Are likely to leave within the next two years
Would not prefer to remain if a comparable opportunity arises
See 2014 Global Talent Management and Rewards Study: Making the Most of the Employment Deal, Towers Watson, August 2014.
See The 2014 Global Workforce Study: Driving Engagement Through a Consumer-Like Experience, Towers Watson, August 2014.
% of all
employees
45%
28%
9%
18%
Insider
Insider is a monthly newsletter developed
and produced by Towers Watson Research
and Innovation Center.
Insider authors
Precious Abraham
Catharina Anandikar
Puneet Arora
Ann Marie Breheny
Cindy Brockhausen
Lucia Carrera
Khushboo Chaudhary
Lynn Cook
Matt Deruntz
Alec Dike
Stephen Douglas
Richard Gisonny
Anu Gogna
who leave their organizations for another firm typically come from one of these
groups. A would-be job applicant who initiates contact rather than being sought
out is probably a Leaver or an At Risk.
Russ Hall
Amy Johnson
William Kalten
Patrick Kulesa
Benjamin Lupin
Richard Luss
Brendan McFarland
Steven Nyce
Dave Ronald
Kathleen Rosenow
Steven Seelig
Urvi Shriram
Jing Wang
Reprints
towerswatson.com/research/insider
Publication company
Towers Watson
Research and Innovation Center
901 N. Glebe Road
Arlington, VA 22203
T +1 703 258 7635
The articles and information in Insider do not constitute legal,
accounting, tax, consulting or other professional advice. Before
making any decision or taking any action relating to the issues
addressed in Insider, please consult a qualified professional advisor.
2 towerswatson.com/research/insider
With Leavers and At-Risk workers making up about one-quarter of the employee
population and the need for most organizations to increase their recruiting and
retention efforts to support their business objectives it is important to
understand these people and what makes them tick. Every organization has to
determine which of their employees represent high retention risks and which
employees they should target for hiring based on their business strategy and
employment deal. Nevertheless, it can be helpful to start with a general
understanding of the characteristics of employees who are more likely to have
one foot out the door or to submit their resume in response to an opening.
Here are seven things to know about the Leavers and the At Risk (hereafter high
retention risks):
1. They are not lemons.
Picture this scenario. Someone wants to sell a car and advertises in the newspaper
and online. The advertisement attracts a potential buyers attention and the two
discuss terms. As you would expect, the seller extols the virtues of the car.
What is the one question running through the potential buyers mind? Thats right:
If this car is so great, why are you selling it?
This is what economists often refer to as moral hazard, which occurs in any situation
in which the seller knows more than the potential buyer about the product, a very
common occurrence. What often happens is that potential buyers assume the car,
or any product for sale, has problems and discount the price they are willing to pay
to reflect that assessment. But because that price is too low for a good car, the
only sellers are those whose cars have problems (often referred to as lemons),
thus justifying the buyers initial skepticism. The used car market thus becomes
what is known as a lemons market.
As an employer interviews applicants for open positions, that same suspicion may
come into play. If these would-be employees are so great, why are they available?
What do their current employers know that the interviewer will only find out after
theyre on the job? Contrary to such misgivings, however, roughly one-third of
high-retention-risk employees received a rating of exceeds or far exceeds
expectations in their most recent performance review, while only one in five got a
review below met expectations (Figure 2, next page). These numbers are not
that different from employees generally.
Moreover, many desirable employees fall into higher retention risk groups. More
than one in four employees who have been formally identified as high potential are
also in a higher retention risk group. Between 25% and 30% of employees in such
critical positions as engineers, nurses, sales professionals and IT professionals
also fall into these high-risk groups.
Too many high-retention-risk employees are top performers, high potentials or
have critical skills to ignore or downplay the retention challenges they represent.
2. They may come from unexpected sources.
There is a common perception that turnover risk is high at certain key points over
a workers career and very low at others. While high-retention-risk employees are
more likely than low-risk employees to have at least one year of experience but
Figure 3. Retention risks do not drop dramatically until employees have been
with their organization over a decade
All
Lower
risks
High retention
risks
39%
40%
34%
Met expectations
44%
44%
45%
17%
16%
21%
All
Lower
risks
7.6%
High retention
risks
6.8%
9.9%
8.6%
6.8%
13.6%
22.6%
20.5%
28.8%
25.6%
26.0%
24.3%
10 years or more
35.6%
39.9%
23.4%
All
Lower risks
High retention
risks
22%
19%
32%
Lower risks
High retention
risks
Highly engaged
40%
45%
28%
Unsupported
19%
20%
15%
Detached
17%
15%
21%
Disengaged
24%
20%
36%
But there is another reason to view high-retentionrisk employees as a potential productivity risk:
Too
performers, high
See Towers Watson, Career Management: Making It Work for Employees and Employers, October 24, 2014.
This research also shows employees financial priorities and the impact of recent economic events on their worries about their finances and their preferences for security.
See Global Uncertainty Fuels Workers Desire for Retirement Security, Towers Watson Insider, July 23, 2014.
See The 2014 Global Workforce Study: Driving Engagement Through a Consumer-Like Experience, Towers Watson, August 2014.
See The Power of Three: Taking Engagement to New Heights, Towers Watson, February 2015.
towerswatson.com/research/insider 3
half of workers in
high-retention-risk groups
are already looking for a
new job.
4 towerswatson.com/research/insider
Conclusion
The global financial crisis did not put an end to the
long-term tightening of labor markets or the scarcity
of talent it just gave organizations some breathing
room to adapt. But the time for complacency has
passed, as hiring activity and turnover have ticked
up. More than one quarter of employees fall into a
high-retention-risk category, and many of them are
top performers or high potentials and possess the
critical skills necessary for hard-to-fill positions.
Employers will find it useful to understand the
characteristics of these employees: They are not
necessarily young or in that one-to-five years of
experience slot. Many of them feel that their career
has stalled and the only way to move up is to move
on. Others are worried about their financial situation
and that worry is affecting their productivity. Many
are also disengaged.
Almost half of workers in high-retention-risk groups
are already looking for a new job and are open to
perhaps even excited by the prospect of a
fresh start in a new job. Time might be running out
for keeping these employees. But, even if they stick
around, employers still need an engagement strategy
to keep their productivity from flagging.
A successful engagement strategy is fueled by a
deep understanding of employee attitudes and
needs. Employers can obtain such an understanding
through focus groups, a total rewards optimization
analysis, an employee engagement survey or
microsegmentation tools that open a window into
areas outside the work experience. This employee
research should be linked to predictive analytics to
develop models that help the organization understand
the factors associated with lower productivity or
increased turnover levels.
Organizations can also calculate the financial return
of these investments by modeling the financial
cost of turnover.7 Other analyses can examine the
relationships among employee characteristics,
program features, use of and satisfaction with health
A
successful engagement
strategy is fueled by a deep
understanding of employee
attitudes and needs.
Background
401(k) and other DC plans often allow participants
to take distributions in cases of hardship. In 401(k)
plans, hardship distributions can generally be taken
only from accumulated elective deferrals (but not
from earnings on such deferrals), employer nonelective contributions (sometimes referred to as
1
The
See Keep documentation for hardship distributions and Keep documentation for plan loans, Employee Plans News, Issue No. 2015-4, April 1, 2015.
towerswatson.com/research/insider 5
According
to the IRS,
there is no rule in the
401(k) regulations
permitting participants
toself-certify the nature
of their hardship.
Plan loans
The IRS newsletter also articulates the agencys
position on obtaining documentation for purposes of
plan loans made to purchase a principal residence
(most loans are not taken for this purpose).
Going forward
Plan distributions that do not qualify for hardship
may not qualify under other distribution criteria and
thus could constitute a disqualifying event. If the IRS
adheres to this position, it could seek penalties from
plan sponsors. Given the strong reaction, it is certainly
possible that the IRS will reconsider its position.
Plan sponsors should review their policies and
procedures for approving hardship distributions and
loans to assess whether their practices comply with
Plan
sponsors should
review their policies and
procedures for approving
hardship distributions
andloans.
Activity
Grown or expanded
32%
20%
5%
19%
1%
5%
15%
Restructured
16%
4%
28%
69%
Merger or acquisition
55%
Outsourcing/offshoring
55%
Workforce reduction
23%
Source: Towers Watson 2014 Global Talent Management and Rewards Study2
See The 2014 Global Workforce Study: Driving Engagement Through a Consumer-Like Experience, Towers Watson, August 2014.
See 2014 Global Talent Management and Rewards Study, Towers Watson, April 2014.
towerswatson.com/research/insider 7
0%
10%
6
6
16
13
11
10
10
10
5
5
7
7
5
4
5
6
6
4
20%
8
8
7
6
6
6
4
4
While
On the other side of the coin, employees at highperforming organizations tend to have much more
favorable opinions than those at organizations
undergoing significant changes or than employees
overall. The largest gaps between these organizations
and high-performing organizations are in the areas
of company image (24 percentage points),
communication (22 percentage points), leadership
(20 percentage points) and competitiveness
(19 percentage points).
Revamping the benefit program can also be disruptive.
Pension plan changes have broad impact, typically
leading to lower satisfaction with the plan and reduced
desire to remain with the employer particularly
among less engaged employees who had considered
the plan an important reason to join or remain with
the organization. Employees at organizations that
have made changes to their pension plans are more
likely to reevaluate their own retirement plans and to
worry about their financial situation, an important
factor in employee engagement and retention.4
8 towerswatson.com/research/insider
See How Does Change Affect Employee Engagement? Towers Watson, January 2015.
See Attracting and Keeping Employees: The Strategic Value of Employee Benefits, Towers Watson Insider, May 2014.
See 2013 2014 Change and Communication ROI Study, Towers Watson, December 2013.
Figure 4. Employees tend to prefer new technologies and ways of doing things
Degrees of preference toward new technology and new ways of doing things
Prefer A
1
Option A
New technology vs.
proven technologies
Prefer experimenting
with new technology
Prefer change
Prefer change
Prefer stability
Other employees
Prefer stability
Other employees
Neutral
4
3
56%
33%
4%
40%
17%
56%
50%
9%
67%
33%
Prefer B
Option B
7
35%
5%
22%
64%
28%
45%
13%
23%
Employees who
prefer stability
Other employees
Employees who
prefer change
We are changing at
the right pace
25%
41%
61%
21%
41%
62%
Employees who
prefer stability
Other employees
Employees who
prefer change
Highly engaged
19%
37%
57%
Unsupported
16%
20%
18%
Detached
19%
19%
12%
Disengaged
46%
24%
12%
towerswatson.com/research/insider 9
Employees who
prefer stability
Other employees
Employees who
prefer change
Leavers
18%
20%
19%
5%
8%
14%
Soft Stays
37%
28%
22%
Stayers
40%
45%
45%
At Risk
Employees
who prefer
change might be
champions of change but
represent turnover risks,
while employees who
prefer stability may resist
change and represent
productivity risks.
Conclusion
The pace of change at most organizations is unlikely to
slow dramatically in the future and, given the returns
on handling change well, effective change management
will likely provide a sustainable competitive advantage
in the future. Despite its importance and the time
and effort devoted to studying the best levers to
drive success in these areas, only one out of four
changes achieves its objectives.
While the tools and processes for communicating
and managing change have improved, the people
side remains a challenge. Some employees are
fundamentally predisposed to embrace change, while
others have an affinity for stability. The differences
Highly
engaged
64%
5%
5%
28%
6%
34%
86%
5%
16%
21%
11%
43%
9%
52%
Employee group
Leavers
At Risk
5%
10 towerswatson.com/research/insider
Recognizing
the challenges
these types of employees
can pose is an important
step in managing changes
well, and helping them
survive the process with
their productivity and
engagement intact.
Cycle A submissions (due January 31, 2017) will be the last filings accepted by the IRS under the current determination letter program for individually designed plans.
towerswatson.com/research/insider 11
Implications
If
the changes proceed as
planned, sponsors of
individually designed
retirement plans will face
significantly higher
compliance risks.
News in Brief
Massachusetts Delays Paid Sick Leave Law for
Employers With Preexisting PTO Policies
By Cindy Brockhausen and Bill Kalten
The Massachusetts Attorney Generals Office (AGO) has established a
safe harbor under its paid sick leave law for employers that had a paid
time off (PTO) or paid sick leave policy in place as of May 1, 2015.
Employers that meet the safe harbor conditions in the recently issued
final regulations will be considered to be in compliance with the new
paid sick leave law through December 31, 2015. To be eligible:
The PTO or paid sick leave policy must provide full-time employees the
right to earn and use at least 30 hours of paid leave during 2015.
Beginning July 1, 2015, all employees not previously covered by the
PTO or paid sick leave policy including part-time employees,
seasonal employees, temporary employees, new employees and per
diem employees must either (a) accrue PTO at the same rate of
accrual as covered full-time employees or (b) receive a prorated lump
sum allocation (based on service after July 1, 2015).
PTO or paid sick leave earned under this transition rule must be
job-protected leave subject to the laws anti-retaliation provisions,
available for the purposes set forth in the new law, and, if unused, such
leave must be rolled over or cashed out. The final regulations, an Earned
Sick Time Notice, which employers should post in a conspicuous
location and distribute to employees, and other information about the
law are available at www.mass.gov/ago/earnedsicktime.
12 towerswatson.com/research/insider
IRS initial determination letter. Such documentbased claims might arise through an IRS audit or
through a participant dispute about plan benefits. In
an audit, the sponsor could face penalties as part of
the correction process and might need to modify
benefit amounts retroactively.
If a plan were disqualified due to a defective plan
document, the trust would incur income tax for which
the IRS could seek payment from the trustee.
Trustees might seek additional protections from
sponsors for this exposure. The lack of a current
determination letter might also have implications for
mergers and acquisitions, annuitization of benefits
through insurance products and other transactions
where involved parties look to the current
determination letter for assurance that the plan
document meets all qualification requirements.
Finally, reduced oversight from IRS agents could
adversely affect participants if sponsors decide to
terminate their plans rather than continue without a
favorable determination letter.
Going forward
If sponsors of individually designed retirement plans
no longer receive determination letters between
initial qualification and plan termination, they will
need to find other ways to manage their compliance
risk. Periodic reviews of plan documents could
ensure that all required changes on the latest IRS
cumulative list have been made and that any other
plan amendments satisfy IRS rules. Some sponsors
already have such a process in place, and more
sponsors will likely look to internal or external
experts to conduct such reviews.
Any document defects discovered during such a
review may be submitted to the IRS through its
Voluntary Correction Program (VCP) for remediation,
which involves a submission fee but avoids IRS
penalties. Some sponsors might decide to adopt a
standardized plan, such as a volume submitter
document, although the standard language of these
documents significantly limits flexibility.
More details about the program cutback are
expected this summer, along with a request for
public comments.
For comments or questions, contact
Russ Hall at +1 914 289 3388,
russ.hall@towerswatson.com;
William Kalten at +1 203 326 4625,
william.kalten@towerswatson.com; or
Dave Ronald at +1 952 842 6344,
dave.ronald@towerswatson.com.
Background
For plan years beginning on or after January 1, 2014,
the Affordable Care Act (ACA) required all nongrandfathered group health plans, including selfinsured plans, to establish an annual OOPM for
in-network EHBs within prescribed dollar limits. For
this purpose, out-of-pocket expenses include
deductibles, coinsurance, copayments or similar
charges, and any other required expenditure for
covered EHBs.
To determine which benefits are EHBs for purposes
of complying with the ACA, HHS considers a selfinsured group health plan to have used a permissible
definition of EHBs if the definition is authorized by
HHS (including any available state benchmark
option). Thus, many self-insured group health plans
have selected a state benchmark plan to define
EHBs for the purpose of cost-sharing limits (along
with the ACA prohibition against annual/lifetime
dollar limits). Self-insured health plans that fail to
adopt a permissible definition of EHBs must include
all covered expenses in the cost-sharing limit
required by law.
The
OOPM cannot
exceed $6,850 per
covered individual in a
family tier of coverage
in2016.
towerswatson.com/research/insider 13
Employers
should review
their group health plan(s)
before finalizing 2016
designs and pricing to
ensure that the OOPMs
conform to the law and
the recent guidance.
14 towerswatson.com/research/insider
Going forward
Employers should review their group health plan(s)
before finalizing 2016 designs and pricing to ensure
that the OOPMs conform to the law and the recent
guidance. They also should discuss administration
and implementation of the embedded OOPM with
TPAs and/or carriers. Some vendors are reportedly
concerned about having enough time to implement
the changes by 2016. Employers will likely want to
explore all available options with their vendors.
For comments or questions, contact
Rich Gisonny at +1 914 289 3377,
rich.gisonny@towerswatson.com;
Benjamin Lupin at +1 215 246 4333,
benjamin.lupin@towerswatson.com; or
Kathleen Rosenow at +1 507 358 0688,
kathleen.rosenow@towerswatson.com.
Studies
towerswatson.com/research/insider 15
Opinion
Empowerment
69
High-performance
companies
Leadership
58
Performance evaluation
55
Company image
57
Source: Towers Watson employee opinion database
20%
40%
60%
Company image
73
72
74
74
74
Leadership
72
72
73
73
74
Performance evaluation
55
57
58
57
Safety
62
83
82
81
79
81
n 2011
n 2012
n 2013
n 2014
100%
64
64
65
63
63
Empowerment
n 2010
80%
Safety
75
16 towerswatson.com/research/insider
20%
40%
60%
80%
100%
Safe to speak up
78
60
Clear job responsibilities
77
64
Employee involvement
91
79
Leaders develop employees' abilities
77
69
Company environmentally responsible
88
80
Support for company values
50
42
Confidence in leadership
53
46
80
Fair
towerswatson.com/research/insider 17
Line
20%
40%
60%
80%
100%
77
57
61
Leaders' decisions consistent with values
96
78
Support for company values
65
50
Employees respected
85
72
Employees given input
72
60
18 towerswatson.com/research/insider
Dodd-Frank requirement
Section 953(a) of the statute imposes the following
requirements:
The Commission shall, by rule, require each
issuer to disclose in any proxy or consent
solicitation material for an annual meeting of
the shareholders of the issuer a clear
description of any compensation required to
be disclosed by the issuer under [the proxy
disclosure rules], including information that
shows the relationship between executive
compensation actually paid and the financial
performance of the issuer, taking into account
any change in the value of the shares of
stock and dividends of the issuer and any
distributions. The disclosure under this
subsection may include a graphic representation
of the information required to be disclosed.
Pay-for-performance proposal
While there would be strict rules for the pay-forperformance table and the related narrative or
Definition of compensation
The proposed SEC definition of executive
compensation actually paid uses the Summary
Compensation Table (SCT) definition of compensation
as the starting point for the pay disclosure, with some
adjustments for equity awards and pension amounts:
Stock and option awards as they vest, based on
their fair value on the vest date (the SCT shows
fair value on the grant date; both values would be
disclosed, as would any underlying assumptions
that differed from those for the SCT)
Pension values, which would be the actuarially
determined service cost for the executive during
the applicable year (the SCT requires disclosure of
the increase in the present value of the accrued
benefits using financial accounting assumptions in
the applicable year; note that smaller reporting
companies2 would not be required to make
adjustments in pension amounts)
Salary earned for the period, even if deferred
(same as SCT)
Bonus earned for the period, even if deferred
(same as SCT)
Non-equity incentives earned for the period, even
if deferred (same as SCT)
If
the rule is finalized
this year, calendar-year
companies could be
required to provide these
new disclosures in their
2016 proxies.
Measure of performance
Performance would be measured by total shareholder
return (TSR), and the disclosures would have to show
values for both the company and its selected peer
group. Of the 27% of Fortune 500 companies already
disclosing pay for performance, 68% use TSR as
their performance metric and 39% use other metrics,
either exclusively or in concert with TSR, according to
Towers Watson research.
Executives covered
The SEC proposal applies to named executive officers
(NEOs) and requires two separate disclosures:
Compensation for the principal executive officer
Average compensation for other NEOs identified in
the SCT
See Towers Watson Survey Sheds New Light on How Companies Assess and Disclose Executive Pay-for-Performance Alignment, Executive Pay Matters, October 30, 2014. For our
latest analysis of pay-for-performance disclosures, see Explaining Pay for Performance An Inexact Science, for Now, Executive Pay Matters, March 25, 2015.
As defined by the SEC, a company with a public float of less than $75 million on the last business day of its second fiscal quarter qualifies as a smaller reporting company.
towerswatson.com/research/insider 19
Time period
Dodd-Frank was ambiguous on the time frame for
measuring pay and performance. Under the SECs
proposal, the disclosures would cover a five-year
period (three years for smaller reporting companies),
phased in as follows:
Under
Format of disclosure
To enable easy comparisons across companies,
disclosures would have to be tagged in an interactive
data format using eXtensible Business Reporting
Language (XBRL).
Going forward
The proposal was adopted by a 3-2 vote. SEC
Commissioner Luis Aguilar called it an important
step forward in the usability and comparability of pay
disclosure.
Republican members were far less enthusiastic.
Commissioner Daniel Gallagher called the proposal
another of Dodd-Franks intrusions into the realm of
corporate governance, while Commissioner Michael
Piwowar complained that the proposal is a highly
prescriptive measure that takes a one-size-fits-all
approach. Both Commissioners believe that the
emphasis on TSR will encourage a short-term focus
and be susceptible to gaming via tactics such as
stock buybacks and cuts in R&D spending, which
can undermine long-term value creation.
Comments to the SEC are due July 6.
For comments or questions, contact
Puneet Arora at +1 703 258 8310,
puneet.arora@towerswatson.com;
Bill Kalten at +1 203 326 4625,
william.kalten@towerswatson.com; or
Steven Seelig at +1 703 258 7623,
steven.seelig@towerswatson.com.
article focuses on
five retailers and the
patterns uncovered across
separate linkage analytic
projects completed by
Towers Watson.
20 towerswatson.com/research/insider
See A.T. Kearney, On Solid Ground: Brick-and-Mortar Is the Foundation of Omnichannel Retailing.
Omnichannel retailing refers to consumers increasingly using a variety of shopping channels, including brick-and-mortar stores, smartphones and computers, to purchase goods.
WORK-TEAM
ORGANIZATION
Physical conditions
People
Procedures
Stronger
financial results
Less employee
turnover/absence
Lower rates of
product loss/damage
PASSION FOR
SERVICE
Tone from the top
Local supports
SUSTAINABLE
ENGAGEMENT
Engaged
Enabled
Energized
Stores
Sustainable engagement
The financial benefits of a more engaged workforce
have been well-documented over the last decade.
Engagement the bond between employees and
employer is measured by employees buy-in to
goals and objectives, pride in organizational
membership and willingness to go the extra mile to
support success.
At a deeper level, these retailers are also measuring
employee enablement to excel and employee energy
to deliver results. Stores with higher scores on this
composite of traditional engagement, enablement
and energy collectively called sustainable
engagement have higher sales, less employee
turnover and lower rates of absenteeism.
This is often traced to the foundational work summarized in Rucci, Kirn and Quinns 1998 Harvard Business Review article on people-performance linkages at Sears.
towerswatson.com/research/insider 21
Work-team organization
The third differentiator of top performance is how
effectively work and teams are organized. Greater
work-team organization predicts higher customer
satisfaction, less employee turnover and
Figure 2. Effects of passion for service and work-team organization on
customer satisfaction
Overall customer satisfaction (%)
0%
20%
40%
60%
80%
100%
Company A
Company B
69.7
74.5
Company C
82.9
86.1
58.0
61.4
Company B
69.0
74.2
Company C
82.6
86.1
Work-team organization
Company A
58.2
62.0
2%
4%
6%
8%
10%
12%
58.0
Figure 4. Effects of engagement and work-team
organization on turnover
61.4
20%
40%
60% 69.0
80%
74.2
Sustainable engagement
Company B
76
53
82.6
86.1
Work-team organization
Company B
77
59
58.0
61.4
82.9
86.1
100%
2%
4%
6%
8%
10%
Work-team organization
Company E: Waste vs. budget
9.2
4.1
Company A: Shrink as percent of sales
2.3
2.0
82.9
86.1
61.4
Organizational
values
69.0
74.2
Greater
customer satisfaction
WORK-TEAM
ORGANIZATION
Physical conditions
People
Procedures
PASSION FOR
SERVICE
82.6
Tone from the top
86.1
Local supports
Stronger
financial results
Less employee
turnover/absence
Lower rates of
product loss/damage
Leadership
Career
development
SUSTAINABLE
ENGAGEMENT
Engaged
Enabled
Energized
Across
a large retail
network, such differences
can translate into millions
of dollars.
towerswatson.com/research/insider 23
Both
Even
as Internet retailing
gains a larger share of
purchases, the retail
employee of the future
remains critical.
24 towerswatson.com/research/insider
Background
The ACA requires non-grandfathered self-insured
group health plans and health insurance offered in
the individual or group market to provide benefits, at
no cost to participants, for the following categories
of preventive care:
Evidenced-based items or services recommended
by the U.S. Preventive Services Task Force
(USPSTF), with the exception of its 2009
recommendations for breast cancer screening,
mammography and prevention
Routine immunizations for children, adolescents
and adults that are recommended by the Advisory
Committee on Immunization Practices
For infants, children and adolescents, evidenceinformed preventive care and screenings endorsed
by the Health Resources and Services
Administration (HRSA)
For women, evidence-informed preventive care and
screening endorsed by HRSA or the USPSTF
If a recommendation or guideline does not specify
the frequency, method, treatment or setting for a
Plans
towerswatson.com/research/insider 25
The
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Coverage of colonoscopies
If a colonoscopy is scheduled and performed as a
preventive screening procedure for colorectal cancer,
the plan may not impose cost sharing on related
anesthesia services that the provider has
determined are medically appropriate.
Conclusion
Employers are encouraged to review their group
health plans to determine whether coverage is being
provided at no cost to participants for the full range
of preventive services described in the new FAQs, as
well as in previous guidance and recommendations.
The FAQs repeatedly note that health plans may use
reasonable medical management techniques to
control costs and promote efficiency. Consequently,
as employers evaluate the financial and health care
delivery consequences of any expansion in covered
preventive services, they may also consider
reasonable cost-saving medical management
strategies.
For comments or questions, contact
Rich Gisonny at +1 914 289 3377,
rich.gisonny@towerswatson.com; or
Kathleen Rosenow at +1 507 358 0688,
kathleen.rosenow@towerswatson.com.