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Saturday, February 21, 2009

Lean Times Call for Cutbacks in Health Care Benefits

Bailout Offers Some Relief to Unemployed, But Part-Time Staff Stand to Lose Insurance

Employers are cornered into making distressing decisions between providing health care benefits to workers and staying in business during a recession, say experts.


“Employers are cutting benefits for part-time employees,” says John Beyer, owner of AMS Benefits Insurance Services, an insurance broker. “We are definitely seeing employers require increased employee participation in the monthly premiums.”


Though insurance lines have decreased in premium price, health care rates are rising, in turn causing reduction in staff for employers and loss of benefits for employees and their dependents.


He adds that health insurance premiums were a source of concern even before the downturn.


To help you find better cost solutions for your company:

Thursday, February 19, 2009

The Furlough Weekend: An Alternative To Layoffs?

Would you like 10 more three-day weekends per year?

Would you still take them if the third day was unpaid -- and if your alternative was getting laid off?

One of the biggest costs of any employer is payroll. In the ongoing economic crisis, employers are looking for any way to cut costs and many are resorting to layoffs.

But many others — from an RV-maker in Oregon to the state government of California — have turned to involuntary furloughs, or unpaid days off, as a way of cutting payroll costs while avoiding painful layoffs.

That got us here at The Ticker thinking: What if employees facing furlough could choose their furlough days?

Call it the Furlough Weekend.

While this idea may not be for everyone due the type of work, importance of a worker or manager it can be employed by those who would be creative and want to keep valuable workers availabel for the future when the economy will turn around.

Tuesday, February 17, 2009

It's time to fix the 401(k)

The 401(k) plan can be a powerful savings tool. But for more of us to enjoy a secure retirement, we need a bigger, better idea.

Alicia Munnell is a Harvard-trained economist. She served as an assistant secretary of the Treasury and is regarded as one of America's foremost experts on 401(k)s. You'd think she'd be terrific at managing her own retirement, but even she has to fess up to some mistakes. "When my son got married, I took some money out of my plan to help," says Munnell, who heads Boston College's Center for Retirement Research (CRR). "And I ended up paying a 10% penalty and taxes."

In the jargon of the retirement business, that's called leakage. It's a common problem: About 60% of job switchers with a 401(k) plan cash it out.

That's just one of the many pitfalls. Lots of people start saving too late, save too little or make missteps with their portfolio. And all of us are vulnerable to risks that we can't control. Your employer might not offer a plan or might choose one with second-rate investments. Or you may hit a market storm at precisely the wrong moment: the year you stop working.

That last problem is especially obvious now. Over the past 12 months, a 64-year-old investor in an age-tailored "target date" mutual fund has lost 26%. Savers with high balances can recover from that. But many lost more, and the typical near-retiree with a 401(k) has less than $50,000 stashed away in it. That will spend down quickly, and once the money's gone, it doesn't matter if the market roars back.

A recent CRR study shows that a bear market retiree could easily end up with just half the income from a 401(k) as someone retiring during a bull market. "Any system that delivers such wild swings in retirement income is just not working," says Munnell.

She isn't the only one who's worried. A growing number of policy experts who study 401(k)s think they fall short. So why not rethink America's retirement system from the ground up? No, it won't be easy: We're in an economic crisis, and lobbyists for the financial services industry will fight like tigers for the status quo. But that doesn't make the task any less urgent. Some 78 million baby boomers are hurtling toward retirement. Their poverty, if it comes to that, will be a burden to their children and lead to calls for taxpayers to support them.

What would a better system look like? It would be universal and strike a more conservative balance of risk and return. Most of all, it would be designed for savers, not employers or money managers. Here are five principles for reform.

To learn more:

It's time to fix the 401(k)

Thursday, February 05, 2009

Tool of the Month: Employee Handbook

While it is considered a best practice as oppose to a legal requirement to have an established company Employee Handbook, not having one could put your business at greater risk of unfair employment-related claims.

An effective Employee Handbook should include topics and items such as:

At-Will Statement,
Equal Employment Opportunity Statement,
Harassment Policy,
Confidentiality Policy,
Disclaimer, and
Acknowledgement of Receipt.

In the HR Support Center website under the “Essentials” tab section, you can easily download a sample template for handy reference. A free Value Added service to our clients.

Wednesday, February 04, 2009

Study suggests seniors who reach Medicare's "doughnut hole" are less likely to use prescription drugs.

CQ (2/4, Attias) reports, "Two studies released Tuesday show that, while the Medicare Part D drug benefit reduced out-of-pocket spending for seniors and increased their use of essential medicines during its first year in 2006, Part D patients increased their use of less beneficial medications and decreased medication usage when they entered the coverage gap known as the 'doughnut hole.'" Therefore, the studies' authors "recommended redesigning the benefit to provide additional coverage in the doughnut hole to prevent adverse health effects in seniors." CQ notes that the "coverage gap was originally implemented to keep the cost of the program within the amount specified by the congressional budget resolution." Although "the Centers for Medicare and Medicaid Services did not comment directly on the studies, agency spokesman Peter Ashkenaz said CMS data show that in 2007 and 2008, the average number of prescriptions filled showed little change as enrollees entered the coverage gap." Both studies were published online in Health Affairs.