The statements can easily backfire – or contain inaccuracies. Here’s how to find and fix two common trouble spots:

1. Avoiding incorrect info

Accidental math errors are the most common – and damaging – problem with total comp statements.
They’re also the toughest for you to spot and correct before the firm sends out the statements, since you aren’t the one who crunches the numbers.

But there are two ways to minimize the risk:

• Make a list of the data sources you use, such as Payroll, your 401(k) provider and health plan carrier, and
• Ask each source to pull and review a few random samples. If they’re OK, chances are the rest will also be fine. But if they contain errors, you can be pretty sure others will have mistakes.

A related problem: Some statements are arranged as a single list of costs, one line after another. To cut the risk of putting something on the wrong line, break the statement down into small sections (e.g., salary, healthcare and retirement). Bonus: This helps make statements easier for employees to follow.

2. ‘Just increase my salary’ syndrome

Sometimes, total compensation statements can actually decrease salary satisfaction, rather than boost morale. A handful of employees may gripe, “Why can’t you just increase my salary instead?” That’s especially true for legally required benefits (like workers’ compensation) and low-profile benefits such as term life insurance. Two fixes that work:

• List “government-required benefits” as a section of the statement. Avoid the term “mandated,” since many employees are unfamiliar with it, and
• Consider adding a section that shows employees how much it’d cost them to line up their own coverage instead.

The U.S. Departments of Labor, Treasury, and Health and Human Services are seeking public comment before developing the final regs.

Specifically, the feds want input on  terminology that requires clarification to ensure compliance. Comments must be submitted by May 28, 2009 and can be e-mailed to E-OHPSCA.EBSA@dol.gov, or online at http://www.regulations.gov

It isn’t for substance abuse or depression. Actually, it’s financial in nature. Over the last five years, there’s been a reported 69% jump in employee EAP use related to personal financial concerns. The trend is not all that surprising in this era of salary freezes, high deductibles and cost-sharing of benefits premiums.

Statistics show that, for the first time since the Great Depression, the average American has negative savings — in other words, debt exceeds income — in a typical month. Many employees are racking up high credit card debt, make the problem worse.

Troubling trends

Here are some ominous numbers from a recent employee survey:

• 27% of respondents said they were “one major setback away from financial disaster”
• 22% say they were “worse off than last year, with less take-home income and more debt”
• 40% say their employer is “insensitive to their employees’ financial needs,” and
• only 6% said they felt comfortable with their current financial situation and ability to manage their debts.

The majority of personal-finance related EAP use arises from concerns over debt management, household refinancing and/or failed investments.

Over the last five years, there’s been a reported 69% jump in employee EAP use related to personal financial concerns. The trend is not all that surprising.

Statistics show that, for the first time since the Great Depression, the average American has negative savings — in other words, debt exceeds income — in a typical month. With salaries frozen in many organizations and many employees racking up higher and higher credit card debt, the problem may continue to get worse.

Troubling trends

Here are some ominous numbers from a recent employee survey:

• 27% of respondents said they were “one major setback away from financial disaster”
• 22% say they were “worse off than last year, with less take-home income and more debt”
• 40% say their employer is “insensitive to their employees’ financial needs,” and
• only 6% said they felt comfortable with their current financial situation and ability to manage their debts.

The majority of personal-finance related EAP use arises from concerns over debt management, household refinancing and/or failed investments.

Too often, employees remain reluctant to seek help – and their employers often pay the price.

A recent Harvard University study found poor EAP use costs American employers heavily in four different ways. The top three: presenteeism, absenteeism and medical claims for treatments that don’t work. The total employer cost per year is $50 billion.

The fourth way is through increased legal risk. In each of the last two years, companies have paid $4 million in damages to depressed workers who sued their employers under the ADA.

Meanwhile, a Mid America Coalition on Health Care study found:

• just 50% of 6,400 workers surveyed said they’d feel comfortable using a work-sponsored EAP if they felt overwhelmed by personal issues, and
• one-third said they didn’t even know how to access its resources.

On the flip side, the more actively a company promotes the availability and complete confidentiality of its EAP, the more comfortable most employees are in using it if they need help.

When supervisors act on their own and don’t communicate with you as well as they should, it leaves you with a mess to clean up and puts the company at risk of lawsuits.

Here are some proven ways to make your own life easier, and keep the firm protected.

Getting help from upstairs

No wants to go over supervisors’ heads, but when upper management is in your corner, it’s much easier to get supervisors to take policies seriously.

The good news: You have plenty of ammo to get the support you need from upstairs. A single foul-up can easily cost your firm big bucks – and it’s rarely due to a mistake by Benefits or HR. Here’s a dramatic example of how easily a situation can spin out of control when a supervisor acts on his own:

A Boston court awarded an employee with bipolar disorder $1.6 million — including nearly $856,664 for lost wages and retirement benefits – due to the firm’s handling of two medical leaves and his subsequent termination for poor job performance (Tobin v. Liberty Mutual).

What happened: The employee convinced the court that his employer failed to offer him the same amount of help it gave other workers with disabilities.

In reality, the firm approved two disability leaves for the employee. So the problem wasn’t with the firm’s policies. Rather, the issue stemmed from inconsistent enforcement by a supervisor. Not surprisingly, the root of the situation was a personality clash between supervisor and employee.

Shortly after he returned from the second leave, the employee was terminated. Meanwhile, another worker had received three similar assistances, with supervisor approval to take leave. The other employee was one whom the supervisor didn’t want to lose.

This situation could have been prevented if the company had enforced a uniform policy on mental disability benefits and re-entry to work. Instead, the supervisor was allowed to give more leeway to a favored employee to take leave to straighten out a personal problem than he did to one he disliked.

Situations like these are hardly uncommon, and many of them end in expensive settlements or drawn-out court battles. One of the hardest parts of being an HR/benefits manager is that you can’t protect your company without the cooperation of employees’ supervisors. 

In the real-life work world, there’s a triangular relationship between benefits/HR policies, upper management and supervisors’ behavior. A little fear goes a long way.

The more aware upper management is of the legal risks created by inconsistent enforcement, the more likely the company will take time to write and enforce consistent policies. 

In turn, the more supervisors realize their own jobs are at stake if they don’t communicate with HR/benefits about policy administration,  the more likely they are to act like you’re on the same team.

Three keys

Let’s go back to the example of a clash between a supervisor and an employee who takes leave for personal problems. There are three key facets to a successful policy for dealing with these situations, according to attorney Jonathan A. Segal:

• Disclosures. Require supervisors to report to HR and/or Benefits all voluntary disclosures of mental health issues, especially ones employees make when called in for disciplinary reasons
• Employee outreach. Have a written policy in employee handbooks requiring them – for their own protection – to come to HR or Benefits first if they think a personal problem could affect their job performance, and
• Inquiries. There should be a specific process for conducting medical inquiries to administer FMLA and disability benefits. It should always be done by HR/Benefits.

Some legal dos and don’ts when you’re handling inquiries: You can say, “We encourage you to go to the EAP to deal with your workplace problems.” Don’t say, “The EAP can help you with any personal problems.”

Reason: Legally, employers must accommodate only disabilities they’re aware of. The EAP, by its nature, focuses on non-workplace issues. But the key is the EAP provider, not you, shifts the emphasis to that area.

However, if you’re already aware there’s a mental health issue – such as for FMLA administration – you can legally ask the same sorts of questions of a therapist you would of a worker’s doctor for a physical health problem.

Benefits and HR managers are used to handling accommodation requests for an array of medical issues. But handling mental health issues are especially tricky — and filled with legal pitfalls.

As employees have become more aware that mental health issues like depression and anxiety are considered medical conditions, accommodation requests have shot up dramatically. How far does your organization need to go to honor such requests?

As long as the employee’s anxiety can be documented medically and unless honoring the request would create extreme economic hardship for your organization, you must honor the request. It’s also crucial to look at the employee’s job description. The key issue to look at is whether the employee can still perform essential job functions.

Also, the employee may not need a permanent accommodation. Example: He or she has started taking a new type of anti-anxiety medication.

Courts have ruled that ADA permits employers to obtain enough information from employees’ mental health provider (psychiatrist, psychologist, licenced clinical social worker, etc.) to determine whether an accommodation is needed and, if so, for how long.

Keep in mind: The purpose of ADA is to provide equal – not preferential – treatment to employees with physical or mental disabilities.

Reasonable vs. unreasonable requests

Legally speaking, mental health conditions are protected under the Americans with Disabilities Act (ADA). That means your organization must honor any reasonable accommodation request tied to a mental health issue. But what’s considered reasonable and unreasonable?

A reasonable request would be something like, “I have an anxiety disorder and my therapist says that I need to limit my work travel.”

An unreasonable accommodation request: “My therapist says my boss is the cause of my depression. I need a new supervisor.”

Even if the accommodation request is unreasonable, you may still have additional legal obligations. In the example above,  you may have a discrimination – rather than accommodation – case on your hands.

Key question to answer: Did the supervisor single the employee out for abuse or ridicule due to his or her mental-health condition? 

MHPA compliance

The Mental Health Parity Act (MHPA) also protects employees in most organizations. MHPA requires that your annual or lifetime dollar limits on mental health benefits (including through your EAP) be no lower than the limits for medical benefits offered through your firm’s health plan.

Even so, you still have discretion regarding the extent and scope of the mental health benefits you offer to employees and their families. This includes sharing the cost of premiums, limits on numbers of visits or days of coverage, and requirements related to proving medical necessity.

Supervisor training is crucial

In many cases, supervisors’ level of education and training in handling the challenges of mental health issues is your best defense – or biggest risk – in avoiding lawsuits. Experts recommend making it a top priority to train supervisors to follow three basic rules:

• Refer employees to the EAP program. Don’t play amateur psychologist if you suspect an employee has a problem.
• Direct employees’ accommodation requests and benefits-related problems (e.g., scheduled therapist appointments clash with work schedule) to HR/Benefits, and
• Avoid making – and don’t tolerate – inappropriate jokes or comments at the affected employee’s expense.

The last issue may be a sore spot with supervisors. But it’s critical. Employers have lost or been forced to settle multi-million dollar mental health discrimination lawsuits because of someone’s “innocent joke.”

Many EAPS fall into a common – and dangerous – category: Management thinks the program is great, but employees think it’s a waste. But it doesn’t have to be that way if you have an EAP or are considering one.

Seventy-three percent of all firms (59% of small employers) have an EAP. But how well does the typical EAP work? Not as well as we’d hope. A Mid America Coalition on Health Care study found:

• just 50% of 6,400 workers surveyed said they’d use the EAP if they felt overwhelmed by personal issues, and
• one-third said they didn’t even know how to access its resources.

The good news: Firms like yours have seen dramatic improvements in three relatively simple steps

1. Employee attitude surveys

The best starting place: Take the pulse of your employees with a short, confidential attitude survey.

Objectives: Ask employees if they know how to use the EAP’s resources. Then test workers’ knowledge and opinions of depression and other personal issues that may affect their workplace performance and/or safety. In the final section, find out how employees would handle a serious personal issue.

In other words, find out where your people would likely turn for help. Would workers seek out the EAP? Would they prefer to discuss the issue with their family doctor? A mental health professional?

The Mid America Coalition’s survey remains an excellent design model from which to craft a survey for your own employees.

2. Promote EAP through education

Your survey data should help you pinpoint areas where employees need more education about your EAP. Some awareness-boosting techniques that have gotten results:

• Lunch-and-learn sessions. Possible topics include dealing with personal-finance stress, caring for elderly parents, understanding depression or dealing with a dependent who has potential mental health issues.
• Employee newsletter. If you have a benefits newsletter, spotlight the EAP from time to time. Some companies without newsletters have done e-mail campaigns or targeted mailings instead.
• Workplace posters spotlighting EAP. The ones that work best are often posters designed around a specific theme (e.g., anxiety about personal debt) rather than a general “need help?” message. In addition to posters, you may want to distribute wallet cards with EAP contact info.

Need help finding educational material? There’s lots of free EAP-related handouts and FAQs here. Remember: When doing EAP education, constantly remind employees that the program is strictly confidential.

3. Work with supervisors

For legal reasons, supervisors need to tread carefully when they suspect an employee has a mental health issue.

What you don’t want: supervisors taking disciplinary actions without consulting HR or playing amateur psychologist and “diagnosing” the employee’s problems. Here is a PDF of some proven tips and talking points for doing supervisor-specific EAP education.

HIPAA compliance: Beware non-discrimination issues

HIPAA’s non-discrimination rules impact both mental health benefits and general health plans. Under current interpretations, health plans can no longer have benefits exclusions that deny benefits for injuries resulting directly or indirectly from pre-existing mental health issues.

That’s true even if the psychological condition wasn’t diagnosed until after the injury and even if the injury was self-inflicted. Example: Suppose an employee gets hurt in a workplace accident he or she caused. After the fact, the employee is diagnosed with a mood disorder that previously escaped detection by the employee’s doctor.

Under current regs, HIPAA-covered plans can’t deny benefits. This puts employers in a bind. Mental health issues like depression, anxiety or bipolar disorder are among the medical conditions that’re most likely to go undiagnosed or underdiagnosed.

That’s why, in most organizations, having a strong EAP is one of your best compliance tools.