Complying with HR-related regulations
Helping businesses deal with increasingly complex HR requirements may lead agencies to new customers
By Len Strazewski
USERRA, FMLA, ADA, COBRA, ERISA.
If all those letters look like alphabet soup to you, get ready to choke. Those are acronyms for human resource-related regulations that require compliance from your commercial insurance customers. And when the chief financial officers, human resource directors and employee benefit managers don’t quite understand the requirements, they start to look around for help.
Agents and brokers who can educate their customers on the ins and outs of these regulations and help them develop compliance programs and procedures will have an edge in an increasingly complex human resources and employee benefits business.
What are the biggest names in HR regulations? Employers are affected by dozens of federal, state and local regulations, but here are a few of the most complicated and demanding that have the broadest impact on employers and employee benefits practices.
The Uniformed Services Employment and Reemployment Rights Act (USERRA) is one of the newest regulations that plague employers. Designed to protect the employment rights of reservists and National Guard troops deployed in Iraq and Afghanistan, the law requires that employers restore jobs and employee benefits with the same seniority and status that employees would have earned had they not been called to active duty.
The Family and Medical Leave Act (FMLA) requires employers to provide 12 weeks of unpaid leave for the birth and care of a newborn child or the recent placement of an adopted child, care of an ill or disabled family member or as personal medical leave for an ill employee.
The Americans with Disabilities Act (ADA) prohibits discrimination and ensures equal employment opportunity for persons with disabilities and under some circumstances, requires employers to provide reasonable accommodation and modification of the worksite for disabled employees.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows employees to buy health care benefits from their employer after they leave or are terminated, for a period of up to 18 months.
The Employee Retirement Income Security Act (ERISA) is the granddaddy of federal regulations and sets a wide range of standards and rules for both health and retirement employee benefit plans, including non-discrimination rules and fiduciary responsibility.
While regulatory compliance issues have been the territory of large consulting firms and expensive law firms, a growing number of agents are now providing HR-related compliance services as both value-added service to existing customers and a door-opener for new ones.
For example, the Conner Insurance Agency in Indianapolis offers regular free seminars for present and potential customers that focus on the details of the some of the most complicated human resource-related regulations, says President Jim Conner.
The seminars, he says, are an important component of the agency’s service-based business model and help the agency communicate the depth of the agency’s resources to prospective customers.
About half of the prospective customers who attend the seminars eventually sign broker-of-record letters and become full-service clients, he notes, and begin receiving both property/casualty and employee benefits services from the agency as well as regulatory compliance consulting.
“If the prospective clients attend two or three of our seminars over the course of a year, the odds are very high they will recognize the value and quality of the service we provide and become an insurance services customer,” he says. “After getting to know the employers with our seminars, we will usually invite the chief executive officer and other senior executives to a formal agency presentation. What we offer is usually very well received.”
Founded in 1949, the family-owned Conner Agency began as a traditional property/casualty producer-based organization with agents managing individual books of business, sharing office services.
The agency continues to be led by a core group of siblings, cousins and other family members: Jack Conner is vice president, Tom Conner is secretary/treasurer and Ben Conner is chief information officer. However, the agency re-organized in 2004 to de-emphasize individual producer accounts and emphasize group service in both property/casualty insurance and employee benefits, which until then had been a relatively minor part of the agency business.
“As we sought to differentiate ourselves in a seriously competitive environment, we began looking at the increasingly complex service needs of customers. We chose to take a risk management approach, which emphasizes the knowledge and resources we could bring to our clients rather than the individual products that we could sell them,” Jim Conner says.
The reorganization also demanded retooling of the agency’s professional resources and expertise, adds Jack Conner, leading to the addition of employees with expertise in employee benefits and human resources compliance issues. The agency now has 20 employees, with five involved in employee benefits, compliance seminar education.
The human resource compliance seminars are held several times a year and range in length from one hour to as long as three-and-half hours, depending upon the complexity of the topic, Jim Conner says. Most seminars are held in a designated training and education facility within the agency headquarters. However, the agency occasionally schedules sessions off site in local hotels and conference centers to accommodate employers and prospective customers not within an easy driving distance from the agency office.
Attendance ranges from six to 15, including business owners, senior executives, human resource and employee benefit managers who are responsible for compliance within their respective organizations.
The content of the seminars is educational in scope, not marketing presentations, Jim Conner says. “What we do is tell the attendees what the regulations actually say in plain language and how they impact the employee benefits programs and human resources operations. Then we provide some guidance about how their organizations should comply with the laws.”
He notes that the role of the human resources and employee benefits managers has increased greatly as a result of these regulations and that the increased complexity has also led to greater demands on agencies. “We have come a long way from the days when the agency simply processed the health insurance renewal and the human resources manager passed out the Summary Plan Descriptions once a year,” he says.
The present schedule of seminar topics includes: USERRA and I-9s (the immigration-related forms employers fill out for each employee), and ADA and Management Liability.
Although most of the seminars focus directly on human resources and employee benefits implications, Jack Conner notes that many of the laws and regulations also impact risk management and property/casualty insurance as well.
The Management Liability seminar, for instance, notes that failure to comply with standards set forth in the regulations may lead to discrimination claims and fiduciary liabilities that become issues in risk management.
The Conner Agency also offers a formal value-added compliance service, Compliance Check, to assist human resource managers with compliance procedures. Compliance Check consists of 19 regulatory modules that include a review of an employer’s current practices in each area, a critique and analysis of their procedures, recommendations for improvements and assistance in implementation of the recommendations.
The service can include expanded training, an update of administrative systems, and revision of employee manuals, supervisor training and ongoing consulting. (For more information, see www.cckinfo.com.) *
Len Strazewski has been covering employee benefits issues for more than 20 years and is employee benefits editor of Human Resource Executive magazine. He has an M.A. in Industrial Relations from Loyola University.