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Part Three: Services

Chapter Nine: Accommodation and Enhancement Benefits

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Learning Objectives

In this chapter you will gain an understanding of:

accommodation and enhancement benefits and why companies offer them.

how companies promote the mental and physical well-being of employees and family members.

various family assistance programs.

different types of educational benefits.

support programs for daily living, including transportation services and physical fitness.

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Overview

Chapter nine begins by defining accommodation and enhancement benefits.

The chapter continues with a look at employee assistance programs and wellness programs.

Followed by family assistance and adoption assistance programs, and education benefits.

The chapter concludes with a look at support programs for daily living.

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Defining Accommodation and Enhancement Benefits

As discretionary benefits, accommodation benefits and enhancement benefits promote one or more of the following four objectives:

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Mental and physical well-being

Family assistance

Educational benefits

Support for daily living

Rationale for Accommodation and Enhancement Benefits

The decision to provide these benefits is based on three considerations.

The cost of absenteeism and tardiness is usually higher than offering these benefits.

Many employees are not sufficiently productive for a variety of health-related reasons.

Promoting educational opportunities yields benefits to both employers and employees.

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Origins of Accommodation and Enhancement Benefits

Alcohol use on the job was socially acceptable up until industrialization, concerns included:

low productivity, inefficiencies, and accidents.

The 1940s saw a move towards rehabilitation.

Highly stressful work situations.

Additional staffing requirements.

Returning soldiers used alcohol to cope.

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The Mental and Physical Well-Being of Employees and Family Members

Companies may choose to offer one or both programs:

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Employee assistance programs (EAPs)

Wellness programs

Employee Assistance Programs

Employee assistance programs (EAPs)

help employees cope with personal problems that may impair their personal lives or job performance.

Examples include:

alcohol or drug abuse,

domestic violence,

the emotional impact of AIDS or other diseases,

clinical depression, and

eating disorders.

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Employee Assistance Programs

Companies offer EAPs because:

20% of workers experience difficulties that interfere with job performance, and

$44 billion in lost work productivity each year.

In 2015,

51% of workers were eligible for an EAP,

56% of full-time workers and 36% of part-time workers had access,

73% of union workers and 49% of nonunion workers had access to an EAP.

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Employee Assistance Programs

EAP costs are substantial, but possible benefits should outweigh the costs of:

increased employee turnover,

absenteeism,

health insurance premium costs,

unemployment insurance costs,

workers’ compensation rates,

accident costs, and

disability insurance costs.

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Employee Assistance Programs

The federal government has contributed to the rise in EAPs with the:

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Drug-Free Workplace Act of 1988

mandates that companies holding federal contracts worth at least $100,000 promote a drug-free workplace

Exhibit 9.2

Typical Services of Employee Assistance Programs

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EAP Services

Outplacement assistance programs in EAPs is a recent phenomenon.

Many companies use these programs for employees terminated for a variety of reasons:

elimination of specific positions,

massive layoffs,

changes in management,

mergers and acquisitions,

plant closings, or outsourcing.

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EAP Services

Outplacement assistance provides:

personal counseling,

career assessment and evaluation,

training in job-search techniques,

resume and cover letter preparation,

interviewing techniques, and

technology training.

Also promotes a positive company image.

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EAP Delivery Options

Referral EAPs

Lists contact information for a variety of professional help services.

Crisis hotlines, substance abuse programs, etc.

Employers do not have a contract with providers.

Large employers may negotiate reduced rates.

Full-service EAPs

Offers services through:

In-house services

staff are employees.

Third-party services,

contracts specify services.

Or, consortium EAPs

smaller companies combine resources with third-party providers.

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Procedures for Employee Participation in EAPs

Employees participate based on self-initiative, or a referral.

Some employees mistrust EAPs.

Before making a referral, a supervisor should

engage in constructive confrontation.

When making a referral, supervisors should only describe signs, not diagnose.

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Confidentiality

Confidentiality is essential to successful EAPs.

Service providers generally need written consent before releasing information.

Some situations require EAPs to disclose information to legal entities.

For example, child abuse and neglect, or

if an employee poses a risk to themselves or others.

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Evaluating Employee Assistance Programs

Employers seek information to evaluate the effectiveness of these programs.

Requires a variety of complex tasks, such as:

survey development and implementation.

Companies may rely on professionals for advice about EAPs.

Methods of evaluation include:

interviews, peer review, and case analysis.

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Employer Liability

Employers may be legally responsible.

Possible trouble spots:

Misdiagnosis.

Provider does not have proper credentials.

Abandonment.

Inappropriate relationships with clients, such as:

sexual,

social, or

business.

Defaming an employee’s character for participating in an EAP.

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Relationship with Employee Benefits Laws

ERISA.

EAP referral services only are exempt.

COBRA.

Applies if the EAP qualifies as a welfare plan, or

qualifies as a health care plan.

PPACA.

Referral services are exempt but if providing medical care it applies,

unless it is an excepted benefit.

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Wellness Programs

Employers may choose on-site or off-site programs.

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Wellness programs

promote and maintain employee’s physical and psychological health

Programs may include:

back care

stop smoking

For every dollar spent:

medical costs fall by $3.27

stress control

weight control and nutrition,

health risk appraisals

absenteeism costs fall by $2.73

Wellness Programs

Employers sponsor back care programs to reduce injuries to shoulders and backs.

Links to absences are substantial.

Employers may invest in smoking cessation programs where the costs for employees:

absenteeism is $218.5 billion, and

an additional $59.4 billion in health-care costs.

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Wellness Programs

Stress management programs help employees cope with factors inside and outside of work.

Employers benefit through increased productivity, reduced absenteeism, and lower health care costs.

Weight control and nutrition programs educate employees about proper nutrition.

Health risk appraisals inform employees of potential health risks based on an examination.

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Wellness Programs and the Law

In 2016, the EEOC issued rulings to clarify how wellness programs relate to:

Title I of the ADA, and GINA.

The ADA-related ruling allowed employers to make inquiries about employees’ health or do examinations as a voluntary health program.

The GINA-related ruling is an exception to the prohibition against acquiring genetic info. when part of a voluntary health service.

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Family Assistance Programs

The least expensive programs are referral services.

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Family assistance programs

help employees provide care to young children and dependent elderly relatives

Family Assistance Programs

Programs range from:

Making referrals to on-site child or elder care.

Elder care programs provide assistance for aging parents, spouses, or other relatives.

Child care programs focus on preschool-age dependent children.

Day care is another possible benefit and some companies subsidize child or elder day care.

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Adoption Assistance Programs

Adoption benefits fall into three categories:

Information resources – may be referrals, support groups, and experts who educate employees.

Financial assistance varies from a lump sum to reimbursing employees for adoption fees.

Parental leave apply to both biological and adoptive children.

The IRC defines qualified adoption expenses.

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Educational Benefits for Employees

83% of companies offer some type of educational benefits, mostly to full-time employees.

Employees garner a college education they may otherwise be unable to afford.

Companies should benefit but often fail due to the lack of career development programs.

There are three types of educational benefits:

IRC Section 127 educational assistance,

tuition reimbursement, and

scholarship programs.

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Educational Assistance

The IRS defines two types:

educational assistance benefits, and

educational assistance programs.

Benefits include tuition, fees, books, supplies, and equipment.

Programs allow employees to exclude up to $5,250 of educational assistance from gross income.

Employees are taxed on amounts exceeding $5,250, unless it is a working condition fringe benefit.

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Tuition Reimbursement Programs

Tuition reimbursement programs

fully or partially reimburses education or training expenses.

Employers cost of tuition reimbursement is tax-deductible as a business expense.

Employees receive tax benefits when plans meet the criteria for a working condition fringe benefit.

When instruction or training is essential to job skills, or required by employers or laws.

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Scholarship Programs

Scholarship programs cover some or all of tuition in a two- or four-year college.

The IRC describes qualified scholarship programs that grant tax benefits to employees.

Qualified tuition reductions include the reduction granted by the employer’s program.

Not all tuition reductions and related expenses qualify for tax benefits.

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Support Programs for Daily Living

Employers may offer programs for managing common daily challenges, such as:

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Transportation services

Physical fitness

Transportation Services

Some employers sponsor transportation services to facilitate travel to work and back.

Many employers offer this to comply with the Clean Air Act Amendments of 1990.

The IRC distinguishes two categories:

A de minimis transportation benefit is for any nominal local transportation benefit.

A qualified transportation benefit is transit passes, vanpooling, bicycling, and parking.

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Physical Fitness

Some employers have on-site centers while others sponsor membership at a health club.

Employers benefit from lower absenteeism and lower health insurance claims.

They deduct costs as a normal business expense.

Employees may exclude the value from income if facility is under control of the employer, by either

operating the facility or contracting with the facility.

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Summary

Chapter nine began by defining accommodation and enhancement benefits.

The chapter continued with a look at employee assistance programs and wellness programs.

Followed by family assistance and adoption assistance programs, and education benefits.

The chapter concluded with a look at support programs for daily living.

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