Addressing Financial Compensation for California’s Family ...



Addressing Financial Compensation for California’s Family Caregivers:A Review of the Literature for the California Task Force on Family CaregivingMay 2017Presented on Behalf of the California Task Force on Family Caregiving by the USC Administrative and Research Team with the support of the California AARP and Archstone FoundationAddressing Caregiver CompensationWhen the California Task Force on Family Caregiving first convened, Task Force members decided their recommendations would need to address the extent to which caregivers are compensated for the care they provide. Successfully tackling this issue would mean preventing caregivers from going into poverty as a result of caregiving.The economic impact of caregiving is extensive. Caregivers perform approximately $470 billion worth of unpaid labor. However, costs and benefits are shared by many. The recently released report, “Families Caring for an Aging America” from The National Academies of Sciences, Engineering, and Medicine highlights the economic effects of family caregiving at various levels including individual, family, and societal levels. Economic and cost considerations of caregiving include out-of-pocket costs, reduced work hours, replacing workers by employers, and savings to state and federal long-term care system. These are just some of the factors taken into account in this review. TOC \o "1-3" Addressing Financial Compensation for California’s Family Caregivers: PAGEREF _Toc483218563 \h 1A Review of the Literature for the California Task Force on Family Caregiving PAGEREF _Toc483218564 \h 1Addressing Caregiver Compensation PAGEREF _Toc483218565 \h 1Financial Strain Among Caregivers PAGEREF _Toc483218566 \h 3How Employment Impacts Financial Strain PAGEREF _Toc483218567 \h 4 PAGEREF _Toc483218568 \h 5Family Leave and Paid Family Leave in California PAGEREF _Toc483218569 \h 6State of Family Leave and Paid Family Leave in California PAGEREF _Toc483218570 \h 6How California Compares with Other States PAGEREF _Toc483218571 \h 8Paid Family Leave Has Little or No Negative Impact on Most Businesses PAGEREF _Toc483218572 \h 8Caregivers Underutilize California’s Paid Family Leave PAGEREF _Toc483218573 \h 9Final Thoughts on Family Leave and Paid Family Leave in California PAGEREF _Toc483218574 \h 10 PAGEREF _Toc483218575 \h 11Other Avenues for Compensation PAGEREF _Toc483218576 \h 12Flexible Work PAGEREF _Toc483218577 \h 12Non-Discrimination Legislation PAGEREF _Toc483218578 \h 12Sick Leave PAGEREF _Toc483218579 \h 13Employer Initiatives PAGEREF _Toc483218580 \h 14Social Security Credits and Medicare Eligibility PAGEREF _Toc483218581 \h 15In-Home Supportive Services (IHSS) PAGEREF _Toc483218582 \h 17Compensation Through the U.S. Department of Veterans Affairs PAGEREF _Toc483218583 \h 18Final Thoughts on Other Avenues for Compensation PAGEREF _Toc483218584 \h 19Conclusions PAGEREF _Toc483218585 \h 21Financial Strain Among Caregivers3412490-264160Caregiver income varies considerably by race and ethnicity. See the AARP report, Family Caregiving and Out-of-Pocket Costs: 2016 Report for more information.3?Caregiver income varies considerably by race and ethnicity. See the AARP report, Family Caregiving and Out-of-Pocket Costs: 2016 Report for more information.3?A recent survey by the AARP and National Alliance for Caregiving indicates that 36% of family caregivers to adults above the age of 50 report feeling financial strain as a result of their caregiving duties. A 2016 study on attitudes of California residents age 40 and older conducted by the Associated Press-NORC Center for Public Affairs Research found that only four in 10 indicate that “they are confident they will have the resources to pay for any ongoing care they may need.” Although studies unequivocally show financial strain among family caregivers, averages conceal considerable variation, making it difficult to draw comparisons to non-caregivers. For example, those providing care to an aging parent have just over $20,000 in additional net assets compared to non-caregivers, whereas those caring for a spouse have nearly $74,000 less in net assets compared to noncaregivers. This is likely because those with higher assets can afford to care for aging parents in the community. Ethnic minority and women caregivers are particularly vulnerable to financial strain. African-American and Hispanic caregivers have a median household income under $40,000, while Caucasian and Asian American caregivers far exceed this amount on average. Moreover, African-American and Hispanic caregivers are more likely to spend a proportion of their income on out-of-pocket costs to provide care averaging 44% and 34% of annual incomes, respectively, compared to 14% for Caucasian caregivers.29095701949450Women, who are more likely to be caregivers, face considerable financial challenges stemming from the precarious balance of being a caregiver and an employee. 0Women, who are more likely to be caregivers, face considerable financial challenges stemming from the precarious balance of being a caregiver and an employee. 2910840317500Among women, longitudinal studies suggest that being a family caregiver is associated with lower income and poverty. One study indicates that women who were caregivers had a lower household income than non-caregivers when researchers followed up with them two and four years later. Caregiving can also magnify the impact of stopping work on risk of poverty; women caregivers who stopped working were 4.3 times more likely to experience poverty than non-caregivers who did so. This statistic is particularly concerning since 10% of caregivers report stopping work or retiring early to provide care.1 How Employment Impacts Financial StrainPerhaps the most foundational cause of financial strain among caregivers is the effect of caregiving on employment. While 56% of family caregivers work full time, caregiving can considerably impact employment.3 Sixty-one percent of caregivers reported caregiving had impacted their work, causing them to lower work hours, turn down promotions, and make similar accommodations. Among those providing substantial healthcare assistance to a recipient, 20.0% reported missing work due to caregiving in the past month and 7.9% reported reduced productivity at work attributable caregiving (i.e., “presenteeism”).Still, caregivers’ financial strain stems from a variety of circumstances, not just changes in work and employment. For example, recently the AARP released a study indicating caregivers, on average, pay nearly $7,000 in out-of-pocket to care for recipients.6 However, these costs—particularly the high costs of long-term services and supports—will be discussed in a subsequent review, Affordable and Accessible Services. This forthcoming review will consider tax deductions for family caregivers, an option that has been proposed to address these high service costs, as well as long-term care insurance and options. Impacts of Financial Strain on Caregiver HealthThe impact of financial strain among caregivers has a far reach, extending beyond wallets and savings accounts. In a study on the effects of caregiving for older adults on women’s health, researchers found that both full-time employment and higher levels of income predicted better self-assessed health. Others have found caregivers reporting high financial costs from caregiving are significantly more likely to report being burdened. Burden is a state associated with a number of negative health outcomes including anxiety, sleep deprivation, or depression. Likewise, low income among caregivers is predictive of depression.The remainder of this review will consider other ways to address inadequacies in caregiver compensation. Given the considerable impact that family caregiving has on participation in the paid labor force, particular attention will be given to family leave policies. 102870302260Caregivers at and Near Retirement AgeAn increasing number caregivers take on this role at or near retirement age,1 when disruption in work can be especially damaging financial security in later life. When experienced and mature workers decrease hours or stop work, they forgo wages at a time when they have their greatest earning potential. Not only does this contribute to loss of present salaries, but higher earning years can yield greater Social Security benefits and annuities. As described below, a 2011 Metlife study indicates that lost Social Security income may even be higher than lost wages.53 And, with 30% of caregivers reporting dipping into their own savings to cover the costs of providing care and 15% report lessening retirement savings, multiple “legs” of the three-legged retirement stool (savings, pensions, Social Security) become compromised.3 00Caregivers at and Near Retirement AgeAn increasing number caregivers take on this role at or near retirement age,1 when disruption in work can be especially damaging financial security in later life. When experienced and mature workers decrease hours or stop work, they forgo wages at a time when they have their greatest earning potential. Not only does this contribute to loss of present salaries, but higher earning years can yield greater Social Security benefits and annuities. As described below, a 2011 Metlife study indicates that lost Social Security income may even be higher than lost wages.53 And, with 30% of caregivers reporting dipping into their own savings to cover the costs of providing care and 15% report lessening retirement savings, multiple “legs” of the three-legged retirement stool (savings, pensions, Social Security) become compromised.3 Family Leave and Paid Family Leave in CaliforniaCalifornia is a leader in family leave. State leaders passed job protections for family caregivers in 1992, one year before this legislation was available nationally via the Family Medical Leave Act. It was also the first state to pass a paid family leave law in 2002 (effective 2004), and has continued to expand on this legislation to provide more comprehensive coverage and progressive income distribution. Still, as other states pass their own paid leave laws, opportunities for continued improvement are becoming apparent.Several signs indicate that the time to pass more comprehensive leave laws is ripe. In the 2016 presidential election, both party candidates proposed a plan to provide paid leave, although only one of these plans included caregivers for older adults. In 2015, U.S. Congressmembers Kirsten Gillibrand and Rosa DeLauro introduced the Family and Medical Leave Insurance Act (FAMILY Act) to the Senate and House. Although it did not leave either house, this legislation would have provided partial paid leave to employees for up to 12 weeks nationally. Caregivers, too, recognize the value of paid leave. When asked about financial support policies, 30% of caregivers nationally supported being paid for the care they provided.3 These caregivers spent a higher number of hours caregiving and had a lower income than the 30% caregivers who supported receiving a tax deduction instead. This finding suggests policies supporting compensation may be most beneficial to caregivers who are most vulnerable to experiencing poverty. A 2016 survey among Californians age 40 and older found broad support for policies aimed at reducing financial costs associated with providing care to family members. In fact, 82% indicated support for a proposal that would provide tax breaks to those providing care to a family member.4 State of Family Leave and Paid Family Leave in CaliforniaFamily leave laws can be confusing, as eligibility and benefits vary at the federal, state, and local levels and are constantly changing. Before discussing opportunities to build on these laws, family leave legislation is briefly reviewed. 3082290112268000Under the federal Family Medical Leave Act (1993), eligible workers are provided 12 weeks of unpaid leave to provide care to certain dependent or seriously ill family members and for their own medical needs., This law applies to employees at private companies with over over 50 employees living within a 75-mile radius. To be eligible, employees must have worked at least 12 months with their employer, have provided 1,250 hours worked in the last year, and been on payroll for the past 20 weeks. Although the law has been used over 200 million times, it only covers only 55 to 60 percent of workers due to limitations in eligibility.1431794451752600Paid Family Leave is largely claimed for the caregiver to care for a spouse or a parent. See the 2013 AARP report on workplace leave policies for more information. 1900Paid Family Leave is largely claimed for the caregiver to care for a spouse or a parent. See the 2013 AARP report on workplace leave policies for more information. 19However, California is one of five states that have expanded on this legislation to include paid family leave (PFL). In addition to job protection, since 2004 most California employees are eligible for 6 weeks of PFL, where payment is funded by payroll taxes through the State Disability Insurance (SDI) program. In 2012, workers paid an average of $428.81 to be eligible PFL. In April 2016, California Governor Jerry Brown signed SB 908 amending the current compensation system, which provides 55% weekly wage replacement up to $1,067 in 2016.19,, The new law requires those with earnings near minimum wage to receive 70% of their usual pay while workers earning up to $108,000 per year would earn 60% of their usual pay starting in 2018. Unlike federal legislation, this law applies to all private and non-profit sector employers, not just those with over 50 employees. Public sector employees are eligible of their employer opts into the program. Amendments have also been made to broaden eligibility. In 2013, this law was amended to broaden the number of care relationship covered from children, spouses, parents, and registered domestic partners to include grandparents, grandchildren, siblings, and in-laws.,Despite having the oldest paid family leave law in the nation, just 10% of paid leave claims were taken by family caregivers in 2011. The remainder are used for bonding with a newborn, adopted, or foster child. Table 2 displays a breakdown of claims by care recipients, with caregivers for parents and spouses ranking among the most common claims. On average, care claimants use four of the six weeks of paid leave available to them. While usage is relatively high in the Bay Area, it is lower in Southern California particularly in Los Angeles County.166370234315Family Leave for New Parents and CaregiversAs noted in a 2013 AARP report, it is important to consider that family caregivers for older and disabled adults face unique circumstances compared to new parents.19 Although the Family Medical Leave Act and Paid Family Leave are intended to address the needs of both populations, there are important differences to consider. Older adults tend to face chronic and degenerative conditions; alternatively, children experience increasing independence as they develop. When caring for recipients with degenerative conditions, families often do not have a sense of what the older adult’s needs will be, and how long they will be providing care. Thus there is an added element of unpredictability that may factor into how family leave legislation benefits caregivers to older and disabled adults. 00Family Leave for New Parents and CaregiversAs noted in a 2013 AARP report, it is important to consider that family caregivers for older and disabled adults face unique circumstances compared to new parents.19 Although the Family Medical Leave Act and Paid Family Leave are intended to address the needs of both populations, there are important differences to consider. Older adults tend to face chronic and degenerative conditions; alternatively, children experience increasing independence as they develop. When caring for recipients with degenerative conditions, families often do not have a sense of what the older adult’s needs will be, and how long they will be providing care. Thus there is an added element of unpredictability that may factor into how family leave legislation benefits caregivers to older and disabled adults. How California Compares with Other StatesCalifornia passed its landmark PFL legislation in 2002, several other states have followed suit. Like California, New Jersey (enacted in 2008), New York (slated to begin in 2018), and Rhode Island (enacted in 2014) run PFL programs as a part of a payroll tax, making the PFL an insurance program.18 Washington has also passed a PFL law. However, this was never implemented, possibly due to the distinct funding mechanism chosen by the state. California has been a frontrunner on PFL but other states are moving ahead. In 2009, New Jersey passed its PFL law, which covered all private and public sector employees.19 In 2016, New York’s Governor signed a bill to extend PFL to 12 weeks to care for a seriously ill family member beginning in 2021., The New York law will offer wage replace at a rate half of what employees typically earn in wages or salary (up to $630 per week) starting in 2018, and two-thirds this rate beginning in 2012. Other states have also found ways to expand upon the federal FMLA program to improve job protections. For example, many states have changed eligibility criteria so that employers with fewer than 50 employers are eligible for 12 weeks of job protection, a feature not available as a part of California’s PFL law. The National Council for State Legislatures provides additional state-by-state comparisons.Paid Family Leave Has Little or No Negative Impact on Most BusinessesBusinesses were among the most critical of California’s paid family leave law when it was first introduced, fearing that the legislation would negatively impact profit if employees took leave and possibly abuse of the program.24 While these concerns were not unwarranted, evaluations after the program has been in place for several years indicate these fears are largely unfounded. A 2011 evaluation of California’s paid leave law indicates that 89% employers found a positive or unnoticeable effect of PFL on productivity, and 91% reported the same outcomes for profitability/performance.14 Very few were employers were aware of any abuses of the policy. This report also highlights the ingenuity among business in accommodating paid family leave, suggesting that businesses are capable of making do when employees take leave. In fact, while little research has been done in the area of eldercare, studies on families using PFL to bond with a child suggests that employment outcomes may actually improve as a result of PFL. Although PFL has been found to increase the length of leave taken, nine months after leave is taken researchers found an increase in work and reduction in unemployment. Moreover, among workers in low-quality jobs (jobs that do not require a degree, pay little, and are more likely to be part-time), retention rates for those who took paid leave were 10% higher than those who did not.24 Some estimates indicates this retention can yield cost savings for employers. Based on a 2016 study of the social impacts of Paid Family Leave in California, there was similarly no evidence that businesses with higher rates of leave-taking were burdened with either higher wage costs or increased employee turnover rates. Furthermore, the same study found that caring claimants are more likely to be attached to the labor market before and after the claim than are bonding leave claimants. Caregivers Underutilize California’s Paid Family LeaveStill, take up rates of Paid Family Leave in California are surprisingly low. As pointed out in a 2015 evaluation of the program, while 1 in 6 Americans are noted to be providing care to an aging family member, under 0.2% of Californian’s family caregivers claimed PFL in 2013 to provide care (as opposed to bonding).24 Of course, not all family caregiver necessarily need PFL—many provide low hours of care that do not interfere with work and others may be able to accommodate their needs using paid sick leave and vacation days. Still, the very low rate of uptake is concerning even with these considerations. In Rhode Island, for example, over a quarter of PFL claims are for caregiving for an older adult, a rate that is over double the proportion of care claims in California. An evaluation prepared for the California Employment Department by Andrew Chang & Company sheds light on several causes for this low take up rate.24The primary reason workers do not use PFL is that they do not know this program exists. In 2015, just 36% of California’s voters were aware of the program, a rate that actually dropped seven percentage points from a 2011 poll. In 2014, the state provided additional funding to increase awareness of the program, including researching current barriers. The resulting report uncovered a number of important findings regarding awareness and take up of the program, described below. One of the main barriers to making a PFL claim is misunderstandings surrounding the program. One of the most common misconceptions is that workers taking PFL are not entitled to job protection. While technically this is true—PFL does not include a job protection component—most workers eligible for PFL are also covered by the federal Family Medical Leave Act. Other misconceptions surround eligibility criteria; many employees assume they are not eligible, often believing PFL is a public assistance rather than an insurance program they have paid into through payroll taxes paid into the state disability insurance fund. Employees are not the only ones who could learn more about PFL. Human resource departments and professionals are among the most likely to advise employees on access to PFL, but of 78% of human resource professionals indicate additional PFL training is needed.24 Employee focus groups echo these findings, and indicate few employers inform employees about the family leave. Another consideration this report explores in great depth is the cultural relevance and appropriateness of the PFL program and accompanying marketing. These findings are too rich to fully describe here, but the authors of the report found a number of cultural and linguistic barriers preventing parents and caregivers from ethnic minority groups from making PFL claims. For example, health information is generally considered private among Latino populations. However, the PFL claims form requires this information to be listed; Spanish-speaking populations needing assistance to fill out the form in English may be even more hesitant to do so since someone else will see the information. Translations used in PFL awareness materials were also awkward at times. A Vietnamese focus group indicated the Vietnamese translation reads, “Get money to stay home” and is perceived as “seedy.” To address these issues, the report recommends using cultural brokers to raise awareness and broaden take up. Finally, this report and others have also found that low wage replacement is another key reason for not using PFL. One study suggests that one-third of those who were aware of the program did not make use of it because the inadequate level of wage replacement. However, evaluations are not recent enough to account for changes in wage replacement from SB 908, which raises replacement from 55% to 70% for the lowest earning workers. Final Thoughts on Family Leave and Paid Family Leave in CaliforniaAlthough California has long been a leader in Paid Family Leave policies, the advent of new state program allows opportunities for comparison and reveals opportunities for improvement. Evaluations of the program within the state further provide promising leads to expand take up of PFL. Below is a summary of possible areas for improvement, although this list is not exhaustive nor officially endorsed by the California Task Force on Family Caregiving:Broaden eligibility criteria to provide job protection for more workers, including lowering the number of employees required for a private sector employer to comply;Increase the number of weeks over which Paid Family Leave is provided;Expand paid family leave to apply to public sector employees instead of the current opt in program;Consider ways to tailor existing leave laws to meet the needs of caregivers to aging and disabled older adults;Improve awareness and knowledge about the program and eligibility criteria among employees and employers; and Raise awareness in culturally-appropriate ways, including the use of community brokers.952500Cumulative Disadvantage in Caregiver CompensationAlthough family caregivers are often described as a unitary group, this could not be farther from the truth. Family caregivers are highly diverse. The implications of the caregiver role on compensation and financial security has considerable variability. Cumulative disadvantage is a theory often employed by sociologists to describe a “snowball” effect of sociocultural disadvantages. While an individual might initially face a single disadvantage (e.g. racial discrimination in the workplace), this can amass into high levels social, economic, physical, emotional disparities (e.g., inability to be promoted causing financial insecurity, leading to negative health outcomes). (For more information on cumulative advantage/disadvantage see: Dannefer, D. (2003). Cumulative advantage/disadvantage and the life course: Cross-fertilizing age and social science theory. The Journals of Gerontology Series B: Psychological Sciences and Social Sciences, 58(6), S327-S337.)Cumulative disadvantage theory applies readily to family caregiving, and has been described with a particular eye to gender. At reproductive age, women are more likely to give up work to provide child care, both due to biological characteristics but also the high costs of childcare in light of relatively lower wages to men in heteronormative households. Re-entering the workforce after providing child care can put women at a disadvantage from falling behind on policies and technologies in the workplace, leaving them in less skilled and lower paying positions. Workers with less skilled jobs are less likely to receive flexible work schedules, making it difficult to accommodate caregiving for an aging parent,34 a role that women are also more likely to take on.4 This leads to a higher risk of job loss and, thus, financial insecurity. All the while, during years that women are providing child care and caregiving, they are not necessarily receiving Social Security, enhancing their risk of living in poverty in old age. Ethnic minority and LGBT caregivers—faced with additional discriminatory workplace practices—may be at an even greater disadvantage. See the Wakabayashi and colleague’s (2006) study for more information.5 One can see how a number of norms and practices interweave to form a complex web in which some caregivers find themselves trapped. Policies and practices supporting caregivers’ ability to be compensated can prevent this from happening. Implementation and enforcement of laws preventing workplace discrimination, employer support for flexible schedules, and provision of Social Security credits are just some ways to do this. 0Cumulative Disadvantage in Caregiver CompensationAlthough family caregivers are often described as a unitary group, this could not be farther from the truth. Family caregivers are highly diverse. The implications of the caregiver role on compensation and financial security has considerable variability. Cumulative disadvantage is a theory often employed by sociologists to describe a “snowball” effect of sociocultural disadvantages. While an individual might initially face a single disadvantage (e.g. racial discrimination in the workplace), this can amass into high levels social, economic, physical, emotional disparities (e.g., inability to be promoted causing financial insecurity, leading to negative health outcomes). (For more information on cumulative advantage/disadvantage see: Dannefer, D. (2003). Cumulative advantage/disadvantage and the life course: Cross-fertilizing age and social science theory. The Journals of Gerontology Series B: Psychological Sciences and Social Sciences, 58(6), S327-S337.)Cumulative disadvantage theory applies readily to family caregiving, and has been described with a particular eye to gender. At reproductive age, women are more likely to give up work to provide child care, both due to biological characteristics but also the high costs of childcare in light of relatively lower wages to men in heteronormative households. Re-entering the workforce after providing child care can put women at a disadvantage from falling behind on policies and technologies in the workplace, leaving them in less skilled and lower paying positions. Workers with less skilled jobs are less likely to receive flexible work schedules, making it difficult to accommodate caregiving for an aging parent,34 a role that women are also more likely to take on.4 This leads to a higher risk of job loss and, thus, financial insecurity. All the while, during years that women are providing child care and caregiving, they are not necessarily receiving Social Security, enhancing their risk of living in poverty in old age. Ethnic minority and LGBT caregivers—faced with additional discriminatory workplace practices—may be at an even greater disadvantage. See the Wakabayashi and colleague’s (2006) study for more information.5 One can see how a number of norms and practices interweave to form a complex web in which some caregivers find themselves trapped. Policies and practices supporting caregivers’ ability to be compensated can prevent this from happening. Implementation and enforcement of laws preventing workplace discrimination, employer support for flexible schedules, and provision of Social Security credits are just some ways to do this. Other Avenues for CompensationIn addition to paid family leave, there are several other policy avenues to support compensation of family caregivers. Although these are largely described in the 2016 National Academies report,2 this section aims to tailor research about these policies for California. Flexible WorkFamily caregivers to older and disabled adults often require additional flexibility in when, where, and how often they work in order to attend to care duties. Similar to new parents facing the high costs of childcare, the costs of long-term services and supports continues to increase, leaving families to unable to pay for services while they work. This can be challenging given the unique needs of many older adult care recipients: doctor appointments to address multiple chronic conditions, unexpected acute health incidents such as falls, and a trajectory of care needs with increasing demands as a result of degenerative conditions. Flexible work schedules may include options to work remotely, to alter start and end times of the work day, part-time work, job sharing, and even, for some industries, predictable work hours. According to a Council of Economic Advisors (2010) report, just a third of full-time workers have access to flexible hours, with workers in less skilled positions less likely to have access to flexible work hours. While some employers may object, this report also indicates that flexible work can reduce turnover and absenteeism, and possibly improve productivity. Still, some employees may be hesitant to ask employers to accommodate flexible work schedules, fearing it employers may build negative perceptions and partake in discriminatory practices. Indeed, this is one reason some caregivers do not ask employers to use paid family leave.24 In response, several countries have passed “right to request” laws, protecting employees from negative ramifications when they request flexible work schedule. In 2013, San Francisco passed the Family Friendly Workplace Ordinance, allowing employees to request flexible working schedules to provide care to a child, family member with a serious health condition, or a parent aged 65 and older. Eligible employees must provide at least 8 hours work a week and been with the employer for 6 months. The law does allow employers to turn down requests for flexible work, predictable hours, and work setting. Non-Discrimination LegislationAs indicated, family caregivers are often subject to Family Responsibility Discrimination (FRD), whereby employers negatively assess their performance, excessively scrutinize, make unwarranted assumptions, and/or openly treat employees with caregiving responsibilities unfairly because of their caregiving role.35 An employer who denies a family caregiver access to family leave when they are eligible is an example of FRD. According to a recent survey, two-thirds of caregivers support laws banning workplace discrimination based on caregiving responsibilities.3There are few federal laws available to protect workers from FRD. However, as described in a 2012 AARP report on FDR, several laws may apply to individual cases, including components of the the Family Medical Leave Act, Americans with Disabilities Act, the Rehabilitation Act (1973), the Employee Retirement Income Security Act (1974) the Civil Rights Act (1964), and Age Discrimination in Employment Act (1967).35 For example, Title VII of the Civil Rights Act forbids gender-based discrimination. Since women take on the bulk of caregiving, gender-based discrimination may be implicit in family responsibility discrimination.More specific legislation has been passed at state and local levels. In 2013, Senate Bill 404 (Jackson) was introduced in California to include “familial status” as a characteristic employers were barred from discriminating against. However, this bill did not make it out of the Senate. In contrast, in 2016, New York successfully passed legislation to expanded job protections to family caregivers, disallowing employment discrimination based on caregiver status.“Right to request” laws, described above, are a means of preventing caregiver discrimination. Besides San Francisco’s ordinance, however we are unaware of similar legislation in the state. Sick LeavePaid sick leave policies offer opportunities for family caregivers to be compensated when they must provide care during a short time period. Of the approximately 52% of American employers providing paid sick leave, the average allotted time for leave is around 5 days. In 2016, 68% of all workers were eligible for paid sick leave in the U.S. Again, California has shown leadership in this area and likely has higher rates of coverage than other states. San Francisco has been described as an exemplar for its 2007 Paid Sick Leave Ordinance that allowed employees to earn paid sick days after working three months with an employer. Evaluations of this program have been positive. A 2011 survey suggests that six out of seven employers report no negative impact on profitability, while more than half of employees reported experiencing a benefit from the program. Given its success, other cities, including Los Angeles, have passed similar policies in California.In 2014, California passed a statewide paid sick leave law, Healthy Workplaces, Healthy Families Act, such that employees working with the same employer for 30 or more days will, beginning in July 2015, accrue paid sick days. Accrual generally occurs such that employees receive one hour of leave for every 30 hours worked. In April 2016, this was amended to include IHSS workers beginning in 2018, although accrual rates are slightly different among this population of caregivers. Given the policy’s recent implementation it is difficult to identify gaps. However, many of these are likely to be similar to those found with current PFL laws, including confusion among employees and employers, fear of being negatively appraised as an employee for taking sick leave, and lack of awareness of the new law. Employer InitiativesIncreasingly, employers are adept at finding creative solutions to support employees who are family caregivers. Major employers are embracing caregiving as “the new normal” and adapting to make workplaces more caregiver-friendly. Respect a Caregiver’s Time (ReACT) is a coalition of companies and non-profits formed to better support employed caregivers. Partners include Pfizer, Microsoft, Lilly, Intel, and other large employers. This coalition has already produced resources to help employers make changes. ReACT’s “Employer Resource Guide” makes clear that workplace change can be subtle or robust. Even just checking in with employees who are caregivers see how they are doing from time-to-time can create a supportive work environment. Other changes are more formal, including employee assistance programs. An employee assistance program (EAP) is an employee benefit program that assists employees with personal and/or work-related problems that may impact their job performance, health, mental and emotional well-being. EAPs may provide assistance on a variety of issues, which can include concerns about aging parents and caregiving. The 2016 National Academies report, “Families Caring for an Aging America” describes several noteworthy examples. 2 These authors describe programs at Emory University, Duke University, and Fannie Mae to provide eldercare services, including geriatric case management to employees. Care management and consulting benefits can assist employees in finding services and supports of aging and disabled family members who would otherwise miss work or worry about recipients while at work. However, citing a 2014 Society for Human Resource Management report, the National Academies report notes that just 5% of employers provide such services. Employers may also provide educational support. The ReACT “Employer Resource Guide” emphasized a lack of information and education for family caregivers.46 In 2013, Exxon Mobile, Texas Instruments, and IBM worked with Mather Lifeways to development and implement an online version of the caregiver education program, Powerful Tools. An evaluation found lower rates of burnout among participants. Private sector businesses eager to offer competitive benefits to workers have also been improving paid family leave policies. In 2016, Deloitte, a consulting firm with 78,000 employees based in New York, began offering 16 weeks of fully paid leave to employees., However, new policies for family leave among California’s tech giants appear to focus on parental leave, without additions for family caregivers for aging and disabled adults. Breaking from this trend, in early 2017 Facebook announced six weeks of paid caregiving leave and up to 20 days of bereavement leave to employees. Unemployment Insurance Unemployment benefits are not a substitute for paid family leave. Unemployment Insurance (UI) is a federal-state social insurance program that provides weekly benefits based on previous earnings for up to 6 months to workers who have lost their job and meet the eligibility requirements. UI is paid through employer-paid taxes. In a qualitative study conducted by The AARP Public Policy Institute, researchers found that officials in California noted that some workers can use paid family leave and unemployment insurance in succession. The report presents an example of how a caregiver may access these two programs:A worker leaves his job to take care of a relative, having no alternative available from his employer (such as leave, transfer, etc.). The worker may receive paid family leave. . . When the family caregiver becomes available for work and begins to seek out employment, he may file for UI. This sequence means that for caregivers who are initially unavailable for work (and thus ineligible for UI), some financial support is available.Although these programs can be used in succession, the AARP Public Policy Institute report found that awareness of Unemployment Insurance rules that accommodate family caregivers is very low and implementation is often lacking. California State level data on Unemployment Insurance Access for Caregivers was not available as of the AARP’s 2015 report. Social Security Credits and Medicare EligibilityIn addition to forgoing current wages, leaving the paid labor force also undermines caregivers’ ability to build up Social Security credits and eligibility for Medicare. A Metlife survey estimates that women who leave the labor force to provide care lose $142,693 in wages and $131,351 in Social Security benefits. The difference in wages and income lost is even more dramatic among men, who stand to lose an average of $89,107 is wages but $144,609 is Social Security credits. Current paid family leave laws do not provide Social Security Credits or increase caregivers’ Medicare eligibility. (Nor do In-Home Supportive Service provider salaries.) In the U.S., workers must have at least 40 credits to receive Social Security (at least $1260 in 2016 per quarter, with workers able to earn up to 4 quarters per year), with benefits calculated based on an individual’s highest earning years. Since most employees are at their highest earning potential around the time they leave or lower work hours to provide care, this loss is particularly impactful. And, while not based on amount earned beyond the minimum threshold, 40 Social Security credits are generally required to be eligible for Medicare Part A without paying a premium. Several countries offer state pension credits for workers who take time off for caregiving. These policies generally aim to alleviate poverty and promote gender equality. However, the majority of these programs are based on policies supporting parents raising dependent children, not caregivers for older and disabled adults. In a comparison of seven Organisation for Economic Co-operation and Development (OECD) countries offering pension credits, Germany and the United Kingdom were the only two offering credit for caregivers for frail persons; Canada, Finland, France, Japan, Sweden did not. In both countries, caregivers must provide a minimum number of hours of care per week, 14 hours in Germany and 20 hours in the UK, and are generally limited in the extent to which they may engage in paid employment. 48, Although evaluations of these programs—particularly for caregivers of older adults— are limited, there is some indication that pension credits for caregivers pay off. In the UK, pension accommodations for caregivers were shown to mitigate the negative financial impact of taking time off work to provide care. Establishing a similar program in the United States would add thousands to caregivers’ Social Security earnings. In a program wherein full time caregivers receive up to four years of credits (16 of the 40 credits required) based on average income over the past three years, married caregivers would see a $8,448 benefit increase and single caregivers about a $13,632 bump using 2008 estimates. Still, Social Security is a federally administered program, and Medicare eligibility is established at the federal level. Thus, it is unlikely that California as an individual state would be able to pass legislation to alter these program. There may, however, be opportunities for advocacy. In-Home Supportive Services (IHSS)Family caregivers can also be paid to provide care through the state’s program, In-Home Supportive Services (IHSS). The program, in operation for over 40 years, is largely funded by the state (35% in fiscal year 2016-2017) and federal (53%) governments using Medi-Cal funding, but counties (11%) also share in the costs. Under this program, care recipients are the employer and may hire a family member to provide care services, although they are not limited to doing so. A 2009 report indicates that two-thirds of IHSS providers are family members. Because IHSS is a Medicaid program, care recipients must meet income and service need requirements. A needs assessment is conducted by a county social worker to determine the number of hours the state will fund per month, up to 283 hours per care recipient. The average number of hours per case across counties was 105.2 per month in 2016-2017, up from 85 hours in 2011-2012. Although providers may have more than one care recipient, they may only work up to 66 hours per week. Wages for providers vary by county, but ranged from $10.00 to $13.35 per hour in 2016, with an average of $10.77. When California’s minimum wage law came into effect in in January 2016, 29 counties had to increase their wages to IHSS workers. Wages will continue to increase, from $10.00 to $10.50 an hour in January 2017, then $11.00 in 2018, and so on until hitting $15 in 2022.IHSS wages earned by parent or spouse providers are not subject to federal FICA or FUTA taxes and thus these IHSS workers (approximately 20% of the workforce) do not accumulate Social Security, Medicare or Unemployment insurance benefits while working as a provider. It is still being considered whether IHSS workers will be eligible to participate in the state’s Secure Choice retirement program, described below. Under current plans, contributions to Secure Choice would be funded solely by employers with no match from employers. Though the program has had some detractors in the past, there is largely great support for the program as it is widely recognized as saving the state money. The average cost of care for an IHSS recipient is $13,000 annually, which is significantly less than the median annual cost of living in a skilled nursing facility in California– $89,000. Family caregivers employed by recipients for this role do not receive training beyond a mandatory statewide orientation, although there is a voluntary training curriculum available.57 Still, this generally true of caregivers at large. In addition, family IHSS caregivers may spend additional time out of the labor force that can impede recommencing participation in other parts of the workforce due to lost job skills. This can have long-term effects on financial security. Compensation Through the U.S. Department of Veterans AffairsVeterans have unique sources of caregiver compensation through the Department of Veterans Affairs (VA) Benefits Administration. While veterans providing uncompensated care for a family member or friend may only receive indirect assistance from the VA, financial assistance is available for assisting veterans in need of care. Veterans enrolled in the VHA Standard Medical Benefits package may be eligible for pension programs, Life Insurance, The Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA), Homemaker or Home Health Aide Program, and Respite Care. This report focuses on the first two sources, pensions and life insurance, programs that directly compensate caregivers; other programs will be discussed in the forthcoming report on Access and Affordability of Services.Pension ProgramsThe Veteran’s Pension Program provides tax-free financial support to war-time Veterans with annual incomes and net worth less than the low-income guidelines, which are set by Congress. In addition to being low-income, veterans must meet at least one of the additional criteria: aged 65 or older, have some form of disability, be receiving skilled nursing care, have SSI disability insurance, or are receiving supplemental security income. There are two types of this pension, Veteran’s Pension and Survivor’s Pension, and both provide only enough compensation to raise the veteran and/or their dependents to the low-income threshold set by Congress.The VA does not specify how the money from this pension program must be used, and therefore qualifying veterans may use the funds to supplement their income when acting as an uncompensated caregiver or to provide compensation for individuals caring for them. Low-income veterans who require caregiving may also apply for the Aid and Attendance and Housebound programs once they become a part of the Veterans Pension Program. Eligible candidates may obtain additional financial assistance (through only one of the programs) that helps cover the cost of a caregiver. Specifically, the Aid and Attendance program provides financial compensation to a caregiver responsible for helping the veteran with ADLs, while the Housebound program provides an allowance to veterans who are housebound. NOTEREF _Ref481584279 \h \* MERGEFORMAT 68 These programs are yet another source of possible indirect financial assistance to those providing uncompensated care for veterans, as they do not have strict requirements on the usage of funds. Life InsuranceVeterans with Veterans’ Group Life Insurance (VGLI) who have a life expectancy of nine months or less may request up to 50% of their coverage payment to cover their costs of care. This coverage may be used to compensate family caregivers of the covered veteran. In addition to this coverage, spouses of veterans enrolled in VGLI, who are enrolled in Family Service members’ Group Life Insurance (FSGLI), can apply for an Accelerated Benefits Option (ABO) Claim. ABO Claims are paid to the service member to help cover the costs of caring for their spouse, which can include reimbursing unpaid caregiving.Personal Care AgreementsPersonal care agreements, according to the Family Caregiver Alliance/National Center on Family Caregiving, serve as a contract between family members and care recipients. The agreement generally covers what kinds of tasks a caregiver will do for the recipient in the future, how many hours per week (generally, e.g. 20 or more hours per week) will be spent doing these, and what the compensation rate or sum will be. It is advised that compensation be competitive with fair market value for services. The benefits of a personal care agreement are that they can provide a means to compensate caregivers for valuable work they do, written documentation can prevent conflict and confusion in families, and they can prevent issues when applying for Medicaid, where the five-year look back requirement bars against gifting large sums of money to family to “spend down” to meet eligibility criteria. Personal care agreements shows that money exchanges was for legitimate services. Secure Choice Retirement Savings Program: California Secure Choice In coming years, the California Secure Choice Program may be another avenue to help caregivers achieve financial security. Starting in 2019, employers with 5 or more employees who do not have retirement plans already will be required to either provide a retirement plan or offer Secure Choice, a retirement plan managed by managed state. Plan would entail at least a 3% salary contribution to a personal retirement plan, with a maximum 8% contribution. The program will be implemented on a rolling basis so that larger employers (100+ employees) will be required to comply within one year of the program begins enrollment, and smaller companies (5 employees or fewer) will have 36 months. This program is not specific to family caregivers, but should be considered in discussions of future financial resources available to caregivers. Final Thoughts on Other Avenues for CompensationThere are many paths to reducing the risk of poverty among family caregivers, including legislation to make workplaces more caregiver-friendly as well as opportunities to partner with the private sector. Below is a brief list of possible pathways to reform. Again, these are not recommendations from the Task Force, but possible considerations given the literature reviewed.Consider a statewide right to request law to support workers seeking flexible work schedules from employers;Add caregivers to protected classes of workers to prevent and address family responsibility discrimination;Evaluate the new state-wide paid sick leave legislation, including its expansion to IHSS workers;Work with private sector employers to add case management and consultation services to help workers balance work and caregiving;Work with private sector employers to expand company-wide paid family leave policies—which may be more generous than the state program—to caregivers for older and disabled adults;Study the impact of family caregiving on Californian’s retirement income, and consider advocacy for Social Security credits and loosened Medicare eligibility criteria for family caregivers; and Look at opportunities to provide additional training programs for IHSS workers.ConclusionsFamily caregivers do not only serve and support recipients who benefit directly, but also the state. Care rendered by caregivers is worth nearly $60 billion dollars and comes at a high cost to those who provide it.1 By providing for today’s older and disabled adults, caregivers may risk their own financial security both in the present and at retirement. Fortunately, increased attention on family caregiving has given rise to opportunities to address lost compensation. This includes improvements on current family leave and paid family leave laws, options for more flexible work schedules and anti-discrimination laws to enable caregivers to remained employed, expansion of paid sick leave, and even provision of Social Security credits for those providing care full-time. In addition, private sector employers have proven capable of identifying creative solutions to better support family caregivers and retain workers.With the growth in the chronically ill population of older adults, the U.S. and other countries will need to continue amending current workplace and compensation policies for family caregivers. State-by-state, the U.S. has been able to make progress. California is integral to this effort, providing leadership on new laws and policies. ................
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