Showing posts with label paid. Show all posts
Showing posts with label paid. Show all posts

Monday, February 29, 2016

My Thoughts on Hillary Clinton's Paid Family and Medical Leave Plan

In 1993, President Bill Clinton signed the Family and Medical Leave Act into law.  Wikipedia provides an accurate summary of the law as follows:
The Act allows eligible employees to take up to 12 work weeks of unpaid leave during any 12-month period to attend to the serious health condition of the employee, parent, spouse or child, or for pregnancy or care of a newborn child, or for adoption or foster care of a child. In order to be eligible for FMLA leave, an employee must have been at the business at least 12 months, and worked at least 1,250 hours over the past 12 months, and work at a location where the company employs 50 or more employees within 75 miles.
Now, Hillary Clinton wants to expand upon it by using taxpayer money to provide income to the employee while on leave.  The income will equal at least two-thirds of someones pay and will be paid for, predictably, by taxing the rich.  In justifying this paid leave plan, she says the following from her own website:
Today, the United States is the only developed nation in the world with no guaranteed paid leave of any kind. In fact, only 13 percent of American workers have access to paid family leave—with the lowest paid workers up to four times less likely to have access than the highest paid.
First, let me address  "with the lowest paid four times less likely to have access than the highest paid". Of course this is true.  Most higher paid employees, at any company, are salaried, and not usually subject to a loss of pay when taking time off.  But, also understand, salaried employees typically work more hours with no overtime pay; and from my experience as a senior manager, salaried personnel seem to be a less sick than hourly workers who have more to lose in pay.  Just an experienced observation.

Now to the issue of "no guaranteed paid leave of any kind".  This too is true to the extent that the government doesn't guarantee paid time off by law.   However, what Hillary conveniently forgets to tell you is that the majority of companies voluntarily provide various forms of paid leave for holidays, vacation, sickness, personal issues, funerals, jury duty, and military. And, yes, 15% of large companies provide paid family leave.  This, all according to the Bureau of Labor Statistics.

But, here's my problem with 12 weeks of "paid" Family and Medical Leave.

In 2007, the Society of Human Resource Management conducted a randomized survey among it's more than 210,000 members with regard to various types of leaves allowed under the Family and Medical Leave Act of 1993.  Some of the key findings were as follows:
  • Overall, 8% of the employees at the companies surveyed requested family leave in the last 12 months.
  • The most frequent request was for personal medical issues; making up 59% of all leave requests.  
  • These types of requests were up 81% in the last 5 years when compared to the 5 year period prior to that.  
  • Leave requests are a growing problem for employers when trying to fill the void created by the employee.  
  • While most leave requests give about two months advance notice, personal medical leaves rarely give notice with 50% of serious health issues giving one day's notice and 38% of non-serious providing the same.
  • When notice is given for a medical reason, the amount of time off is usually indeterminable while other employees pick up the slack in terms of double duty and overtime.  In longer term cases, the employer is saddled with hiring a temp who may or may not be as experienced or productive as the person they are filling in for.  Again, placing an additional burden on other employees to shepherd the activities of the temp.
  • These facts are reported to have created moral problems; loss of overall productivity; and even increased medical leave.
  • Human Resource Managers believed that 4 in 10 requests were not legitimate but did not pursue verifying that, for fear of a federal lawsuit over questioning what turned out to be legitimate.
All the statistics, above, would go higher if nearly a quarter of a year's paid leave is available to all workers under Hillary's plan.  That's because, simply,the disincentive of losing pay would be taken away.  It is common sense that some -- not all -- employees will abuse the system.

At the very least, you could apply the Pareto Principal whereby you could expect 80% of the abuse of the family/medical leave to be by 20% of the employees.   I know this to be true.  As a former senior manager at a major company who provided 10 paid sick days, approximately 20% of the hourly employees reporting to me took exactly 10 days sick pay per year.  Most of those people perceived paid sick days as a benefit that would be lost if not taken.

Lastly, my biggest problem with the original Family and Medical Leave Act and, now, Hillary's proposal is that It allows up to 12 weeks of leave as if all reasons for taking leave are equal; and they are not. In my opinion, this makes the law purely political and not logical.  As usual, with any federal mandate, businesses are forced into compliance; even if they can't afford to do so.  Thus, like other mandates, such as the employer mandate of ObamaCare, job and wage growth continue to be weak.  We, as a country should follow the lead of most other nations and provide for 12 weeks of paid maternity leave and paid family leave for a provable seriously ill immediate family member or for the employee themselves.  But, in other cases, a full 12 weeks is questionable.  Again, we don't need another government program that is subject to abuse and which is a one-size-fits-all political -- not practical -- solution to something that may or may not be a problem;  just to garner votes.

References:

Hillary Clinton on the Issues: Paid Leave: https://www.hillaryclinton.com/issues/paid-leave/

Family and Medical Leave Act of 1993: https://en.wikipedia.org/wiki/Family_and_Medical_Leave_Act_of_1993

Bureau of Labor Statistics:   Paid leave in private industry over the past 20 years: http://www.bls.gov/opub/btn/volume-2/paid-leave-in-private-industry-over-the-past-20-years.htm

Family and Medical Leave Act and its impact on organizations: https://www.shrm.org/Research/SurveyFindings/Documents/FMLA%20And%20Its%20Impact%20On%20Organizations%20Survey%20Report.pdf

America's current maternity policy has nothing to do with families and everything to do with politics: http://mashable.com/2015/01/25/maternity-leave-policy-united-states/#xwhp6eeYkkqz

Pareto Principal: https://en.wikipedia.org/wiki/Pareto_principle


Monday, March 31, 2014

6 Million ObamaCare Signups: A Meaningless Number

The last time Health and Human Services (HHS) announced the number of ObamaCare signups, it was 5 million with 25% of that being younger, 18-to-34 year-olds; a percentage far short of the 38% needed to keep the current insurance rates from skyrocketing next year but, an improvement from the 24% in the month prior.  With this latest 6 million signup announcement, the "18-to-34" count was nowhere to be found.  That only means one thing: a deterioration of the "younger" signups. Otherwise, this  "most transparent" administration in history, would be screaming that number from the mountain tops. 

Then, too, the 6 million is far short of the 7 million that HHS Secretary Sibelius said was their signup goal. Now, Obama is claiming that, in fact, they have met the goal with this lower number.  Between the modified goal and all the delays, it is like trying to play football with the goal line and goal post  constantly moving away from you.

More importantly, that 6 million number is totally meaningless without knowing some of the facts behind it.  One of the most glaring is how many people have gone the final step by paying for what they've signed up for.  For example, in Maryland, only 46% of those "enrolled" have yet to actually do this.  Until they pay, they are not insured.

Then there's the issue as to whether or not ObamaCare is making a dent in the nearly 50 million uninsured in America; a key objective of upending our health care system.  A McKinsey & Company study reviewed the signups and found that only 11% previously had no insurance.  If this is true, and after 6 months of enrollment only 660,000 have signed up, it could take up to 40 years before all the previous uninsured are covered.

We also don't know if the enrollment of women exceeds that of men.   If too many women are signed up, the advantage of men cost sharing for so many of women's "free" healthcare benefits that are mandated by ObamaCare is lost.  Unlike men, women get one free doctor visit per year.  They also get free  contraception, mammograms, cervical cancer screenings, prenatal care, maternity services, pediatric care, and so many other services.  If there aren't enough men to cover the cost, the premiums would f course, need to be increased.

Another problem with this simplistic enrollment number is that we don't know how "sick" the enrollees are.  If "sick" people primarily dominate the enrollments, then the insurers are in trouble because they won't have collected enough to cover the heavy cash outlays for a sicker group of insured.  Again, this would necessarily force premiums to skyrocket going forward.

Then, too, why would anyone believe the 6 million number when the President and his people have lied so much about the healthcare law?

Health insurance is not a single number game but, a science of many thousands of numbers. Numbers that take into consideration people's ages, sex, economic and marital status, good and bad habits, and so much more. That's why insurers have rooms full of actuaries whose full time job it is to predetermine the healthcare costs for every single person who might buy insurance from them.  But, they must also predict the proper mix of those buying insurance from them.  If they don't get it right, that company would be toast. This is why it is ridiculous for either Obama or Sibelius to declare ObamaCare a success based on a simplistic enrollment number. 


References:

'Obamacare' reaches sign-up goal of six million: http://www.bbc.com/news/world-us-canada-26780662

Kathleen Sebelius: Exchange enrollment goal is 7 million by end of March: http://www.politico.com/story/2013/06/kathleen-sebelius-says-exchange-goal-is-7-million-by-march-93301.html

The ObamaCare Numbers Racket: http://news.investors.com/ibd-editorials-obama-care/032614-694734-obama-delays-enrollment-deadline-hides-data-to-inflation-enrollment.htm

Exchanges See Little Progress on Uninsured: http://online.wsj.com/news/articles/SB10001424052702304149404579326992266662838