Steve Schilling, Team leader
Cole Nuyen, Co-leader
Fairmount Minerals Business Innovation Team
It’s easy to talk about innovation, and many businesses use the word and think that’s enough to demonstrate that their company is on the leading edge of new ideas. That’s never been the case at Fairmount Minerals and nowhere is that more evident than with the company’s Business Innovation Team.
Launched in 2008, the Business Innovation Team charged itself with designing and implementing an innovation program for Fairmount, including an innovation center concept and a process for innovation input from all facilities.
Led by Steve Schilling and Cole Nuyen, the result is a thriving program that is constantly flowing with new ideas to make Fairmount Minerals a better and stronger business. Communication portals were developed to allow ideas to be submitted and considered.
It’s a rigorous seven-step process to give the idea the best chance of succeeding. The seven steps are concept, feasibility, business case, development, testing and validation, implementation and launch.
An idea management subteam assigns roles and responsibilities for managing this process and facilitates conversations needed to keep an idea moving.
In 2012, the Fairmount family contributed 51 innovative ideas and generated more than $58,000 in cost savings.
One of the innovative ideas was for an alternative mixing paddle developed by a team at the Technisand Troy Grove facility in Troy Grove, Ill. It is made of better quality material, costs less and reduces the downtime needed for paddle repair. The product is already paying dividends at several Fairmount facilities.
How to reach: Fairmount Minerals, (440) 279-0245 or www.fairmountminerals.com
How often does this happen to you? The day after you attend a networking event, you get a few generic email requests to connect on LinkedIn with people you chatted with for two minutes. They say, “I’d like to add you to my professional network ...”
I get several of these unsolicited requests a week from second level connections I don’t even know or have only met briefly.
First, I check out their profile. For those I’m not interesting in connecting with, I simply ignore their request. For those people I am interested in, I politely respond by indicating that, “I prefer to get to know people better before formally connecting” and suggest that we begin an email dialogue.
The purpose of that dialogue is to begin to answer the question, “Is this a person I can help … or who can help me?” Notice it’s an “or,” not an “and.” I’m continually amazed at the high percentage of people who never respond to that initial suggestion.
Full disclosure here, I’ve been an enthusiastic and strategic networker since before it was called networking. Some colleagues even call me the “Godfather of Networking” — I like that. I prefer high touch to high tech and view social media as an effective tool to enhance and expand relationships generally started by face-to-face or voice-to-voice conversations. If you consider that approach as old school or antiquated, I’m guilty as charged.
That said, LinkedIn allows you a fast, simple and no-cost way to make a poor impression on people you just met or don’t even know. So, here are some simple best practices to help you avoid doing that and ‘link in’ with style and class:
1. Don’t be a LinkedIn loser. Some people believe that it’s more important and valuable to have quantity over quality in the number of contacts. I don’t. They call themselves LIONs — Linked In Open Networkers … but loser works fine for me.
Be selective about whom you invite to connect with and whom you agree to connect with. A primary use of the site is to ask others in your network to refer or recommend you and to do the same for them. That’s pretty hard to do when you don’t even know the person or the only connection you have is that you’re both in the same discussion group.
2. Don’t be generic. When you do invite someone to connect with you, avoid the generic system-generated request. Instead, take the extra minute to craft a brief personalized note indicating why you want to connect with them.
Try something like, “Bill, I enjoyed our brief chat at the COSE meeting last night about your new venture at Glitztronics. I’d like to learn more about it and look for some ways to help each other. Please accept my invitation to LinkedIn.” How hard was that? How much time did it take? More importantly, what kind of an impression did those three simple sentences likely make on Bill?
When you accept invitations from others, reply in a similar manner with a short note thanking them and suggesting some ways you might help each other.
3. Don’t be superficial. When you ask people for a recommendation or referral, also send a personalized note. Make sure they know your work well enough to write a specific and meaningful testimonial. Indicate in that note which of your qualities you’d like them to highlight.
And, of course, offer to reciprocate. When you agree to write a recommendation, check out their existing ones first so you can give yours a different spin.
This all sounds like common sense and common courtesy, doesn’t it? Well, our workplace culture killed off common sense years ago, and we allowed common courtesy to die off slowly from lack of use. So, if you want to connect with style and class, do it with uncommon sense and uncommon courtesy. How’s that for old school?
Phil Stella runs Effective Training & Communication Inc., where he empowers business leaders to communicate confidently. A popular trainer and executive coach on workplace communications and sales presentations, he is also on the Cleveland faculty at the University of Phoenix and the Goldman Sachs 10,000 Small Businesses Initiative. Reach him at (440) 449-0356, or email@example.com. For more information, visit www.communicate-confidently.com.
I found myself several years ago looking for a new opportunity in my business life. I had changed careers once before, but this time I didn’t want to make that kind of change. Instead, I wanted to find something better in the industry in which I was currently working.
As with so many other industries nowadays, I knew mine was poised for a technological revolution.
At the time, the term “social media” was just forming on the lips of those in the dot-com industry. Facebook was battling MySpace for leadership in the personal information arena, and other Internet-savvy companies were just beginning to develop networks of people involved in collecting and exchanging other types of information.
One company, LinkedIn, was quietly establishing a database of professionals that allowed subscribers to compile a list of contacts inside and/or outside their industry with the click of a button. Times certainly were changing.
Observing one of the originals
My first encounter with LinkedIn was with one of its original power users. He taught a class of outplacement recruits about establishing a LinkedIn account. I learned how to post a soft version of my resume online, develop a set of broad-based contacts and literally network my way into a job interview.
There were a number of tips and tricks he provided to get my name listed on the first page of a company’s search for candidates. Some of those are still useful, while others are now obsolete due to sophisticated search engine optimization techniques.
Today, my use of LinkedIn has gone far beyond looking for a new job. It has exploded to where I am now connected with thousands of people inside and outside my own industry that have common business interests.
Nurturing and extending
I have also become a hub of introductions and contacts for others, as well as myself, by nurturing and extending my professional persona via LinkedIn.
The usefulness of LinkedIn, especially for a C-suite officer, doesn’t just mean “friending” other C-suite executives. LinkedIn cuts across most company functions when it comes to people, organizations and groups of individuals with a common interest.
I use LinkedIn every time I come across a new company or name of an individual. A company’s website is often the first link I tap to peruse and gather information, but a company’s LinkedIn site seems to connect me deeper into the organization.
The company’s LinkedIn site gives me access to people who don’t appear on the company’s home page. Within this space, I can look for contacts with interesting backgrounds and experiences aligned to my own company’s interests or requirements.
Productivity tools abound
Many social media tools, like LinkedIn, are productivity tools for the C-suite executive. I get information and insight from the many user groups I have joined.
I participate in discussions regarding technology trends and channel opportunities. I learn about customer behavior, sometimes even competitor behavior. There are also comments and information I glean on potential new markets and future M&A business partners — everything pertinent to tier one interests of a senior executive.
If I am interested in finding a good person to fill an open job position, an outside recruiter or my HR department can always find a slate of qualified candidates. LinkedIn, however, serves as a handy tool for helping me peel back a few layers from each resume. I often get what I refer to as a 3-D view of the person behind the text of a CV.
In my humble opinion (IMHO), within the social media frenzy that now exists in cyberspace, the head of the class for business networking is LinkedIn.
Tom Salpietra is president and COO of EYE Lighting International, a manufacturer of lighting equipment. His company was awardeda the 2011 Evolution in Manufacturing Award. Reach him at firstname.lastname@example.org.
Although manufacturers can expect modest 2 percent growth through the remainder of 2013, the brief lull gives opportunistic executives a chance to prepare for an uptick in business next year.
Gus Faucher, senior economist for The PNC Financial Services Group, attributes his optimistic forecast to a rise in business investments, fueled by the resolution of murky tax and sequestration issues, and the continuation of record-low interest rates.
“I think the U.S. will maintain an edge in high value-add manufacturing because we have highly skilled, productive labor,” Faucher says. “Maintaining our competitive advantage requires ongoing development of our manufacturing workforce.”
As the economic recovery proceeds, in what areas will spending accelerate most? Manufacturers of home building products and materials, furnishings, appliances and so forth should have a strong 2014, thanks to the rebound in the residential real estate market. In turn, those manufacturers will purchase more production equipment, raw materials, parts and other items. The wealth effect in real estate will stimulate growth throughout the supply chain.
Will rising global demand for U.S. made products including semiconductors, medical devices and specialized materials manufacturing propel employment gains over the next few years? Post-recession hiring will wane next year as manufacturers look for productivity gains from workers added since employment levels bottomed out in early 2010. Although manufacturing is back up to 12 million workers, that’s still well below the 2006 peak of 14.2 million. The mantra continues to be: Do more with less.
How could the expansion of the shale oil industry affect manufacturing? Shale oil exploration and extraction will be a boon to ancillary industries and all U.S. manufacturers that rely on natural gas for production, since it will lower energy costs over the long-term. Moreover, it will give America a much-needed competitive advantage in today’s spirited global marketplace.
Augustine (Gus) Faucher is a senior economist for The PNC Financial Services Group. He is responsible for contributing to the preparation of PNC’s U.S. economic forecast and alternative economic scenarios.
The Rainforest: The Secret to Building the Next Silicon Valley
Victor W. Hwang and Greg Horowitt
Regenwald, 304 pages
What makes places like Silicon Valley tick? Can we replicate that magic in other places? How do you foster innovation in your own networks? Victor W. Hwang and Greg Horowitt propose a radical new theory to explain the nature of innovation ecosystems: human networks that generate extraordinary creativity and output. They argue that free market thinking fails to consider the impact of human nature on the innovation process.
These ecosystems, or Rainforests, can only thrive when certain cultural behaviors unlock human potential. The authors provide practical tools for readers to design, build and sustain new innovation ecosystems. The Rainforest challenges the basic assumptions that economists have held for over a century and will transform the way you think about technology, business and leadership.
The Coming Jobs War
Gallup Press, 220 pages
Drawing on 75 years of Gallup studies and his own perspective as the company’s chairman and CEO, Jim Clifton explains why jobs are the new global currency for leaders. To win, leaders need to compete. The business community needs to double the psychological engagement of workers so that it can compete with cheaper labor. Perhaps most importantly, leaders need to recognize universities, mentors and especially cities as a supercollider for job creation. There’s not a moment to waste: the war has already begun.
Innovation Nation: How America Is Losing Its Innovation Edge, Why It Matters, and What We Can Do to Get It Back
Free Press, 320 pages
John Kao first offers a stunning, troubling portrait of the recent erosion of U.S. competitiveness in innovation, then he takes readers on a fascinating tour of the leading innovation centers, such as those in Singapore, Denmark and Finland, which are trumping us in their more focused and creative approaches to fueling innovation. He then lays out a groundbreaking plan for a national innovation strategy that would empower the U.S. to marshal its vast resources of talent and infrastructure in ways that will produce transformative results.
If you are an entrepreneur, and you see what you think is a growth opportunity, you may be tempted to take the advice that’s been offered many times: risk all you can and jump in head first.
But if you catch your breath, the proper decision at that time is not really what to do. Your analysis lies more with if you think the opportunity is one for growth.
With that in mind, Smart Business interviewed some of the world’s greatest entrepreneurs and the leadership at EY about growth opportunities. These business leaders come from the more than 60 countries at the recent EY World Entrepreneur Of The Year conference in Monte Carlo.
“We’re looking at China and other Asian countries. The key to that market is to have big internationals that are creating value for their communities where we can sell our products. These are the kind of countries, those that can generate big internationals, that we are looking at.”
Martin Migoya, CEO, Globant
Entrepreneur Of The Year 2012 Argentina
“I have been tracking where I see money going. Where is the most foreign direct investment happening? Africa is clearly one. In South America, Colombia has been coming much more into its own, as have Indonesia and parts of Southeast Asia. Those are some of the markets you’ll start to see. Mexico is another one you have to watch because it’s close to the U.S. and its leaders have had change in their political landscape to be more pro-business.”
Herb Engert, Americas Strategic Growth Markets Leader, EY
“One of the ways that we encourage innovation is we partner with a lot of technology startup companies. We look for alliances and what’s next in technology that can drive improvements and enhancements in our industry.
When we see a technology that’s promising we’ll start working with them and provide them with real-world market feedback. That gives us the data and confidence to help them get to commercial deployment.
Our people are always looking for innovative ways to do things with the discipline of knowing that at Chevron we have to represent our brand and stand behind everything that we do and our customers expect us to keep them on that proven level of technology.”
Jim Davis, President, Chevron Energy Solutions
“I am in one of the newest economic blocs to emerge from Latin America, the Pacific Alliance, which seeks to create a Latin American gateway to Asian markets. Chile, Colombia, Mexico and Peru are members. The bloc hopes to make the commercial, economic and political forces among the members work more closely together.
The entrepreneurs representing Colombia chose me to be in that alliance two years after it was founded. What it is going to do is to join the market of those five countries — it is one market for everyone.”
Mario Hernandez, founder and president, Marroquinera
Entrepreneur Of The Year 2012 Colombia
“There continue to be tremendous opportunities in Brazil; it’s a big country, a big market. It will be back on the world stage even more with the 2014 World Cup and ultimately the Summer Olympics in 2016.
But when you look at Spanish-speaking countries, certainly Mexico is attracting a lot of direct foreign investment. The new administration, the federal government there, has definitely got a strong commitment to entrepreneurship.
We are seeing that as being important to them, and we are working with them on a number of different initiatives as the U.S. State Department and others try to help foster more entrepreneurial startups and more entrepreneurial growth in Mexico, both big and small.”
Bryan Pearce, Americas Director, Entrepreneur Of The Year and Venture Capital Advisory Group, EY
“There are always things you can do to improve and grow your business. You should be rethinking and retooling it every chance you get. The key thing is making sure everybody in the organization understands the story, where you’re going, are you going to get there in the belief that you are doing the right thing. People want to know their purpose, so that’s for me the biggest area to keep the energy going — keep a sense of purpose very strong.”
Dr. Alan Ulsifer, CEO, president and chair, FYidoctors
Entrepreneur Of The Year 2012 Canada
“Always be seeking new opportunity. Always be looking for new technologies, innovation and creativity within your people. The best ideas within our business have come from the people inside our company. You have to give opportunity to your people. Tell them it’s OK to be wrong and make mistakes. That’s important so people will learn from those mistakes and come up with better ideas.”
Lorenzo Barrera Segovia, founder and CEO, Banco BASE
Entrepreneur Of The Year 2012 Mexico
“The growth driver in the world is coming from entrepreneurs. They are the ones driving economic growth and driving job growth. If you look at leading indices of companies, they churn much more rapidly than they ever did before.
“It used to take 20 years to have a half of a churn in some of these indices. Now it takes four or five years. It’s because the entrepreneurs are building businesses so quickly. We have to keep investing and keep recognizing their strengths.”
Jim Turley, retired global chairman and CEO, EY
“It’s important to understand where the trends are going. So communication and information is important. I fully support the free market system. It’s a great way to understand where the best new ideas are coming from and where the value lies. We keep an eye on our competitors on technology and on alternative learning aspects. So to the extent that the web provides a better way to educate more students more efficiently, we’ll be using that.”
J.C. Huizenga, founder, National Heritage Academies
“I built the company based on people, not with experience from before, but willing to learn and try anything. We had a bunch of people that had never done this before. None of us had run companies. None of us had worked in high levels of companies. None of us were from Fortune 500s.
“Whatever you look for in people to bring them into a company — none of us had it. Most of the people came in from an entry-level position and now they’re leading departments. Chobani not only became a business that grew, but Chobani was like a school to us, including myself.”
Hamdi Ulukaya, founder, president and CEO, Chobani Inc.
Entrepreneur Of The Year 2012 United States and 2013 World Entrepreneur Of The Year
“Companies attracted by the Latin American market have to decide where to establish the operations in Latin America. They have many opportunities: Sao Paulo; Buenos Aires; Santiago, Chile; or maybe in Peru. But in Uruguay, there is a very small market. You have to operate with a different concept, much like an offshore company, to operate in Latin America.”
Orlando Dovat, founder and CEO, Zonamerica
Entrepreneur Of The Year 2012 Uruguay
Walking does not generally qualify as exercise. A movement or activity is not perceived as a stimulus by the body unless it is demanding. An activity that does not render a muscular failure — an inability of the muscle to continue, reached within one to three minutes — is not demanding.
Walking can be continued ad infinitum because there is no meaningful muscular taxation. If walking becomes impossible, it is because the subject has become sleepy, hungry, generally fatigued, ridden with blisters, injured or dehydrated.
The muscles, per se, do not fail. They can go on and on and on. And since they can go on and on, and they are never meaningfully challenged, overuse syndromes are proportionately probable.
There are exceptions. Walking may indeed be exercise for individuals whom find walking is all but impossible. In this instance of debility, walking is momentarily and meaningfully demanding. It is therefore exercise for these people — there will be an “exercise effect,” but is it appropriate for such patients?
In my opinion, it is not the best form of rehabilitation for these debilitated people. I would prefer that these people were performing specific strength exercise for the musculature that is required for walking; that remaining upright and gait training is included to regain the skill of walking after the muscles are conditioned enough to provide sufficient support.
The best exercise and the best physical rehabilitation are done with high-intensity and low-force exercise that tracks muscle and joint function. These compressive forces are nourishing and healthful to our joints and articular cartilage, as well as strengthening to muscle and bone.
Even with such a benign activity as walking, our stance limb may be exposed to 2.3 times our body weight with a brisk pace. Under normal conditions this is no great issue, but for someone with a functional leg length difference, someone experiencing back pain or a person with arthritic knees, excessive walking in the name of exercise will only exacerbate these conditions, while the compressive forces of slow-speed, strength exercise are far safer and more therapeutic.
I often hear the adjective: low impact. This term is used indiscriminately to imply low force. On the contrary, low impact does not indicate low force. Relatively high force is encountered without an impact. Forces occur and vary depending on the rate of change in movement. Thus, excessive force can be encountered merely by jerking your limbs around in the air (a gas) or water (a liquid) — not just against a solid.
Notice the deliberate heel strike of those on walking programs as they briskly march about the neighborhoods or in shopping malls. And if a so-called march fracture can put a soldier out of commission, just imagine the chain of events that might follow with an elderly man or woman: immobility, foot surgery to relieve bone spurs, increased danger of falling while maneuvering with crutches, infection subsequent to surgery, and on and on.
In reality, exercise is just as much a chore as brushing one’s teeth, making the bed, washing the clothes, mowing the grass, washing the dishes or taking a bath. It is an absolute requirement for a normal, healthy life, and must not be confused with recreation any more than flossing one’s teeth or scrubbing the kitchen floor. Not enjoying it doesn’t factor into the matter. It must be done.
I expect that some will read this and conclude that it is passé. People may feel this attitude toward walking overlooks the fact that the exercise physiologists and mainstream medicine now acknowledge strength training as an important component of exercise.
No, they don’t. Strength training is not a component of exercise. It is the exercise.
Ditch the steady-state, low-intensity activities. It is anti-exercise. It is empty exercise. It is counterproductive and can even be injurious.
Insights Health & Fitness is brought to you by Overload Fitness
Companies that have looked into using the IC-DISC (Interest-Charge Domestic International Sales Corporation) provisions of the tax code, intended to help U.S. companies compete internationally, might remember that the incentive essentially reduces the top federal tax rate on income from certain qualified goods and services from 39.6 to 20 percent.
“Partly because it is thought of as a manufacturing and export incentive, many companies have dismissed the IC-DISC. Many more have misinterpreted the rules, which actually do not require manufacturing or exporting,” says Amit Mathur, CPA, director at WTP Advisors.
Pete Chudyk, head of the tax consulting practice at Maloney + Novotny LLC, says “We have helped many companies realize that the definition of ‘qualified export’ sales for IC-DISC purposes is explicitly based on use outside of the U.S., and does not literally require the exporting of goods.”
Smart Business spoke with Mathur and top accounting firms about five IC-DISC myths that lead to business owners missing or underutilizing the valuable government incentive.
Myth 1: Products must be exported.
Perhaps the most widely held IC-DISC misinterpretation is that a company must export a product and sell to a foreign customer to qualify for benefits.
While the product generally must be ultimately used outside of the U.S. — without being further manufactured by another party inside the U.S. — there is no requirement that the product be exported, or that the customer be foreign. In some cases, the product may even return to the U.S. For example, an Ohio auto parts maker that sells to General Motors Co. can claim benefits if the parts are incorporated into a car GM builds in Mexico. A special component rule allows these parts to qualify after being incorporated into another product abroad that returns to the U.S.
Mike Trabert, a partner at Skoda Minotti, says “Any closely held manufacturer or distributor should examine where the ultimate use of their products occurs. While they may not consider themselves ‘exporters,’ significant and easy to implement tax benefits may be available.”
Myth 2: The taxpayer must manufacture the product.
Closely held distributors and brokers, as well as the final manufacturers, of any U.S.-made product are eligible for IC-DISC benefits for any given qualified sale or lease. Unlike the Domestic Production Activities Deduction often enjoyed in tandem with the IC-DISC — both benefits can be claimed — manufacture by the taxpayer is not required.
Myth 3: Business operations will be disrupted.
A popular misconception is that using an IC-DISC will require a new entity to sell qualified exported goods in order to obtain the tax savings. This fear of having to alter contracts, logistics, payments, etc., is totally unfounded. There is actually no effect on cash flow or any other business operations from using an IC-DISC. Other than receiving a commission from the related operating company and immediately paying a dividend back to the company, or its owners, the IC-DISC typically does not perform any activities whatsoever.
Myth 4: IC-DISC benefits are limited to $10 million of qualified sales.
No limitation exists on the amount of qualified export sales that can generate IC-DISC benefits. Originally, the IC-DISC provided a deferral benefit, and the amount that could be deferred was related to only $10 million of qualified export sales.
Myth 5: IC-DISC commission is 4 percent of export sales or 50 percent of export income.
IC-DISC savings result from allowable commission paid to an IC-DISC, generating an expense at ordinary rates (39.6 percent) with the same amount typically being paid from the IC-DISC to its shareholders as a dividend, taxed at dividend rates (top rate 20 percent). Many believe this commission amount is limited to 4 percent of export sales or 50 percent of export taxable income.
In reality, each qualified export transaction can use either of these basic methods, or a host of other methods explicitly encouraged in the regulations that can be more beneficial. Some methods even allow loss transactions to generate a commission.
Amit Mathur, CPA, is a director at WTP Advisors. Reach him at (216) 292-6732 or email@example.com.
Insights Tax Incentives is brought to you by WTP Advisors
It was the late C. Everett Koop, a former U.S. surgeon general, who once famously said: “Drugs don’t work in patients who don’t take them.” That’s a simple way to look at a costly and complex problem — medication non-adherence — where the failure to take drugs on time in the dosages prescribed is both dangerous for patients and costly to the health care system.
“There are a number of reasons that people either don’t take their medication or stop taking it before they should,” says Chronis Manolis, RPh, vice president of pharmacy for UPMC Health Plan. “But what it often comes down to is a lack of understanding of the disease and a lack of respect for the condition.”
Smart Business spoke with Manolis about the problem of medication non-adherence and the ways it can be addressed.
What does medication non-adherence cost?
This problem impacts the cost of health care in many ways. According to the Express Scripts Drug Trend Report, $329 billion was spent on avoidable medical and pharmacy expenses as a result of patients not being adherent to medication treatments. Approximately 50 percent of patients do not take their medication as prescribed, which results in increases in the overall cost of treating chronic conditions and increases the number of hospitalizations and emergency department visits.
Why is medication non-adherence a persistent problem?
Clearly, there are a number of reasons why people may not take their medicine as directed by their physician. Consider, for example, people who have asymptomatic conditions such as high blood pressure, cholesterol disease and Type 2 diabetes. For them, taking medication may have no immediate effect on the way they feel. And, when medicine does not make you feel better, some don’t understand why they need to take it. As a consequence, many do not.
What are other factors that contribute to medication non-adherence?
Well, first, there’s the cost of the prescription. If there’s no generic available, it can be expensive, and a patient may simply choose not to purchase it. Then, there’s forgetfulness, which is a factor for older patients, but also for others as well. Some patients may avoid taking medicine because they fear the possible side effects. Others may not take it because they do not believe that the medication is truly effective.
But, what is often the underlying cause is a basic lack of understanding of their condition. Many patients do not realize they are taking medicine now in order to stay healthy in the years to come and to avoid a more serious condition 10, 20 or 30 years later when it will be too late to treat it with medication. For some, that’s a hard concept to grasp.
What kinds of solutions would help promote medication adherence?
Solving the problem of medication non-adherence is complex because there is no ‘one size fits all’ solution. A comprehensive, multi-pronged solution is needed to improve medication adherence.
These include promoting the need for more conversation between physicians and patients concerning the importance of medication in the overall treatment plan. There also needs to be a way to involve pharmacists more. Pharmacists are uniquely positioned to reinforce the message regarding the importance of medication. This can include encouraging patients to use their medication as prescribed and asking patients if they understand why they are taking a drug and if they understand the condition that it’s being used for.
Health plans can play a role as well because they can determine if patients are refilling their prescriptions in a timely manner. Health plan pharmacists can reach out to non-adherent patients and provide customized solutions and tools for patients to improve adherence. Additionally, health plan pharmacists can help triage specific patient adherence issues to other members of the health plan’s team including care managers and health coaches. For example, if cost is a factor, often less expensive generics are available. If forgetfulness is a problem, pillboxes or enrolling in refill reminder programs could work. Or, finding a substitute for the medication or changing dosing and/or frequency of the medication can eliminate side effects.
Chronis Manolis, RPh, is a vice president of pharmacy at UPMC Health Plan. Reach him at (412) 454-7642 or firstname.lastname@example.org.
Insights Health Care is brought to you by UPMC Health Plan
Your entire employee population — even those part-time, seasonal and currently not eligible for benefits — will be increasingly impacted by health care reform. Beginning in 2014, a key provision of the Affordable Care Act (ACA) known as the “individual mandate” will require most individuals to purchase health insurance or pay a penalty. The requirement to maintain coverage applies to all ages, even children.
Smart Business spoke with Craig Pritts, sales executive at JRG Advisors, the management arm of ChamberChoice, about how the individual mandate may impact your employee population.
What are the penalties for not following the individual mandate?
The penalty for not obtaining acceptable health insurance coverage will be phased in over three years and will be the greater of either a flat dollar amount or a percentage of income. In 2014, the penalty will start at $95 per person or up to 1 percent of income. In 2015, the penalty increases to $325 per person or up to 2 percent of income. For 2016 and after, the penalty goes up to $695 per person or up to 2.5 percent of income.
For penalty calculation purposes, ‘income’ will be defined as the taxpayer’s household income minus the taxpayer’s exemption (or exemptions for a married couple) and standard deductions. The penalty will be calculated on a monthly basis and will be assessed for each month in which an individual goes without coverage. There will be no penalty for a single lapse in coverage lasting less than three months in a year.
Those covered under an employer-sponsored group health plan or a government-sponsored program such as Medicare or Medicaid can continue to be covered and will not be subject to a penalty.
Who is exempt from penalty?
Individuals may be exempt if they:
- Cannot afford coverage. Those for whom a required contribution for coverage would cost more than 8 percent of their household income.
- Experience a gap in coverage for less than three consecutive months.
- Have income below the tax-filing threshold.
- Receive a hardship exemption from the Department of Health and Human Services.
- Are incarcerated.
- Are members of a Native American tribe.
According to the Internal Revenue Service (IRS), if they are eligible for an exemption for a single day of a month, they will be treated as exempt for the entire month.
How will the IRS enforce the penalties?
Beginning in 2015, everyone who files a federal income tax return for the previous year will be required to report which family members are exempt from the individual mandate and whether each person not exempt had insurance coverage. A penalty will be owed for each nonexempt family member without coverage. Married couples filing a joint return will be jointly liable for the penalties that apply to either or both of them. Anyone claiming a dependent will be responsible for reporting and paying the penalty for that dependent.
The IRS will assess and collect penalties in the same manner as taxes. However, the ACA imposes certain limitations on the IRS’s ability to collect. It’s anticipated that assessable penalties will be subtracted from individual tax refunds, if applicable.
How will tax credits help people comply with the individual mandate?
The ACA created a premium tax credit to help eligible individuals and families purchase health insurance through an affordable insurance exchange, making coverage more affordable. Taxpayers may qualify for a premium tax credit if their annual household income is between 100 and 400 percent of the federal poverty level for their family size; if they cannot be claimed as a dependent by another taxpayer; or if they are not eligible for minimum essential coverage, which is coverage under an employer-sponsored group health plan or Medicare or Medicaid plans.
The health insurance arena is changing, and individuals have a responsibility to comply with new legislation or pay a penalty. Understanding the legislation is challenging, to say the least. It’s good to work with an advisor who has the resources to help employees sort through the confusion, understand options and responsibilities, and find the best solution to fit their needs.
Craig Pritts is a sales executive at JRG Advisors, the management arm of ChamberChoice. Reach him at (412) 456-7253 or email@example.com.
Insights Employee Benefits is brought to you by ChamberChoice