Archive for the ‘Benefits’ Category

5 Tips For Implementing A Group Benefits Plan

Tuesday, January 24th, 2017

The post below is a guest blog from Jordan Whichard, IV, GBA who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

If you operate a startup company, or your established business has recently grown larger than 50 employees, one of the most daunting items on your 2017 to-do list may be implementing a group benefits plan for the first time.  Starting a benefits plan from scratch can be an intimidating – not to mention time-consuming – process, especially without a partner to help you understand the background and minutiae of it all. Here are some tips if you find yourself staring down a brand new group benefit plan in 2017:

  1. Know your timeline and stick to it

Whether you want your benefits plan to begin in June or January, you’ll want to begin the process at least six months in advance of your anticipated start date. That will give you ample time to evaluate different benefit options, plan designs, funding platforms, and other factors that you will need to consider. Medical carriers will generally be able to offer early numbers about three months prior to your effective date.  You’ll want to approach the carriers as close as possible to that date in order to start understanding your potential rates.

  1. Firm up your census

Changes in your workforce are bound to happen, especially if you operate a rapidly growing business.  But beware, medical carriers reserve the right to re-rate your population if your census changes by more than 10% between the date of the quote and the date of final implementation.  If possible, holding your workforce numbers relatively stable for several months before your first open enrollment will help alleviate any stress that a re-rate would generate.

  1. Know your population

All workforces are different, but knowing your employees wants and needs can be a big help when designing your first benefit plan.  A brief employee survey could be a valuable tool in determining what benefits your employees are most interested in.  By the same token, many benefit plans have participation requirements – a percentage required to guarantee rates in the first year.  If you have less than that, the benefits may be more expensive than originally thought.

  1. Beware individual underwriting

Depending on the size of your group, some medical carriers may require individual employees to go through an underwriting process to help the carriers determine the risk associated with your group. If you have a stable workforce and know everyone wants coverage, that may not be a problem; but groups with a geographically or economically diverse workforce will want to think twice before committing to the individual underwriting process. Either way, you should understand that the first numbers a carrier presents may not necessarily be their final proposal!

  1. Tie it all together

Once you have all of your plans in place, you’ll want to make sure that the benefits are working effectively for you and your employees.  Ensure that the appropriate plans are written under Section 125 of the IRS code so that employees are able to pay their premiums before any taxes are deducted from their paychecks.

If these tips sound like things that you’d like explained or explored further, contact a consultant at HCW today.  Implementing the plan is just the beginning – next comes developing your long-term strategy, ensuring regulatory compliance, and managing your costs. We’re ready to help guide you through the process from start to finish.

Form 5500 Revisions Impact Both Small And Large Employers

Tuesday, September 20th, 2016

The post below is a guest blog from Rob Krieg who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

hcw5500revisionsblogThe Department of Labor (DOL), the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) recently proposed significant changes to the form 5500 which has implications for both large employers and small employers. Targeting an effective date of 2019 plan year filings, the recent DOL Factsheet explains that many changes are on the horizon in an attempt to modernize and improve the Form 5500 annual return/report filed by employee benefit plans.  They identify the driving forces behind the changes include a desire to 1) modernize financial reporting, 2) provide greater information regarding group health plans, 3) enhance data mine-ability, 4 ) improve service provider fee information, and 5) enhance compliance with ERISA and the code.

The most notable proposed changes include:

  • Removing the small group exemption where previously many employers with less than 100 enrolled participants were exempt from filing;
  • Adding a new comprehensive schedule J (Group Health Plan Information) requirement;
  • New Schedule C requirement for each service provider;
  • And an expanded schedule H for funded plans.

Regardless of a group’s size, benefit plans should pay special attention to the new Schedule J requirements. Plans will now be asked to complete information on the types of benefits offered and the funding methods, including if benefits are HDHP, health FSA or HRA.  There will also be questions on participant contributions and employer contributions as well as enrollment information, including participants and dependents.  There appears to be requirements for claims data (including claims submitted, denied, appealed, paid, and where claims are paid from – insurer, trust or employer general assets.  And last but not least, there will be a focus on plan compliance with questions around COBRA, grandfathered status, MLR rebates, HIPAA, GINA, MHP SBC requirements, and SPD requirements.

As traditionally occurs, the DOL has asked for comments to the proposed regulations and these comments are due by October 4, 2016.  It is clear that the agencies are working together to significantly increase Form 5500 reporting obligations for many employers with group health plans. As explained in the fact sheet, the agencies are looking to update the filing requirement to gather data sufficient to support their enforcement efforts. Therefore, employers should take note and make sure to tighten up their benefit plan compliance over the next year.  The silver lining is that the agencies have provided plenty of lead time for employer’s to get into compliance.

If you have questions about these new regulations, or about your health benefit plan’s compliance with some of the regulations mentioned in the proposed regulations, contact your HCW consultant.

Spousal Health Coverage Costs Continue To Rise

Thursday, April 21st, 2016

Guest blog from Joy Binkley who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

Spousal Health CoverageThe cost of health insurance continues to rise, but the cost of covering one’s spouse is looking to be quite expensive for those spouses that waive their own employer-sponsored benefits. According to a recent survey of U.S. employers, the use of spousal surcharges is expected to double by 2018, from 27% to 56%. The average spousal surcharge is $1,200 per year, which is tacked on the previously determined payroll deduction.

The surcharge is going on top of the fact that employers are just asking employees to pay more to cover spouses and dependent children. More than half (56%) of employers are increasing payroll deductions for spouses, while just under half (46%) are increasing the cost to cover children. This is a trend we are seeing here in North Carolina as well. The most recent CAI 2015-2016 North Carolina Benefit and Cost Survey shows the average medical cost increasing for family rates going up 6.2% versus the previous survey’s increase of 4.4%. Employers are consistently asking employees to pay roughly the same portion as last year, which is 47% of the total premium cost.

Employers are continuing to focus on ways to impact healthcare cost. Besides asking those to pay more that are waiving their own employer plans, some are considering dropping spouses all together. The elimination of spousal health coverage is permitted under the Affordable Care Act criteria. The rational to drop coverage entirely can depend on the underlying benefit strategy. Some employers are dropping coverage due to low (or no current) participation on their plans, therefore eliminating coverage just entitles those that may be subsidy eligible to earn those governmental credits. Other may be considering it due to a financial hardship. Regardless, of the reason the current landscape is quickly changing for spousal health coverage.

Look back on the trends in spousal health coverage in 2014 and 2015, and see how the numbers have changed over the past couple of years.

Study Shows Possible Negative Effects of Special Enrollment Periods

Tuesday, October 20th, 2015

Blog 015 PictureThe post below is a guest blog from Jay Lowe who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

Recent data from the Centers for Medicare and Medicaid Services show that enrollment in Marketplace plans during Special Enrollment Periods (SEP) continues to increase. Between February 23 and June 30, 2015, CMS reports that close to 950,000 people enrolled in coverage. Under the ACA, a qualifying life event allows someone to enroll in Marketplace coverage at that time. One does not have to wait until the normal open enrollment period that begins November 1 for coverage to be effective January 1. The SEP could be triggered by such things as loss of group coverage, birth of a child, marriage or divorce. While this is a provision of the law that ensures Americans will not have to go without coverage, the SEP could prove to play a big part in the rising rates of the individual market year after year.

The Good and the Bad

The data in the CMS report suggests that during this SEP timeframe those enrolling tended to be younger than average. This can account for things like children aging off of their parents’ plans and parents enrolling their newborns in coverage. This is good as those that are younger tend to be healthier and have more predictable costs year in and year out. Insurers like this as the premium they pay in helps to offset the costs for those that have more health-related issues and tend to use more healthcare. Insuring the young, healthy population is a vital piece in helping to keep Marketplace costs lower and something that the insurance companies count on when determining rates every year. But the SEP provision for the Marketplace can pose a potential problem for these insurance companies.

So that insurers can more accurately determine the risk of their blocks of business and set rates accordingly, the ACA provides for an open enrollment period once per year. Without an SEP, a person is unable to enroll and must wait until the beginning of the next calendar year to have coverage. The problem that the SEP creates is now people can buy coverage outside of the normal annual open enrollment period. While the addition of the younger, healthier members is good, the SEPs also provide an opportunity for unhealthy members to join. The ACA requires insurance companies that participate in the Marketplace to provide coverage to anyone who enrolls. No longer can somebody be denied coverage or be rated up based on a health condition. While many who enroll during an SEP are young and healthy (which the insurance companies like), there are many who are sick and unhealthy. The insuring of this unknown risk poses a big problem for insurers as they are unable to adjust rates during the course of the year based on the medical conditions of those entering the plans. Members who enroll during an SEP get the same rates (based on age and plan design) as those that enrolled in the annual open enrollment period.

Ultimately, insurance companies may be forced to raise rates as claims and loss ratios go up. The SEPs provide a much needed avenue for people to buy insurance coverage. But what will this do to rates? As we enter in to the third year of the Marketplace it will be interesting to see how the insurers continue to respond to constant dilemma.

 

Cadillac Tax May Force Employers To Eliminate FSAs

Thursday, September 17th, 2015

The post below is a guest blog from Dax Hill who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

What does the future hold for Flexible Spending Accounts (FSAs) and why ask this question now?FSA

With many employers now comfortable with the “pay or play” regulations and 6055/6056 reporting requirements, companies are beginning to shift their focus on the “Cadillac Tax” and are realizing FSA contributions will accumulate to the cost thresholds – potentially leading to increased employer taxes. In 2018, the Cadillac tax imposes a non-deductible 40% excise tax on employers to yearly amounts over $10,200 for plans covering an individual and $27,500 for those plans that cover more than just one person.

A recently released study by the Kaiser Foundation determined that 16% of employers would be subject to the 40% excise tax in 2018 – assuming 5% medical inflation. However, when the Kaiser Foundation included FSA contributions, the percentage of employers that would be responsible for the Cadillac Tax surged from 16% to 26%. Additionally, the study determined that 42% of employers would be impacted by the Cadillac tax by 2028 – which has led to some individuals calling this far reaching tax the “Camry tax” instead.

Employers are already reviewing options to limit the liability associated with the excise tax – including the possibility of eliminating their FSA. This would be unfortunate to employees, since many individuals rely on the pre-tax benefits of the FSAs to help offset healthcare expenses incurred throughout the year. For 2015, an employee can contribute up to $2,550 to their FSA on a pre-tax basis.

Not only will the Cadillac tax be a financial burden, but the coordination and calculation of the excise tax could be overly cumbersome for employers. Among the requirements of the Cadillac tax, the employer will be responsible for determining and notifying each coverage provider’s share of the pro-rata tax along with the IRS. We’ve outlined additional complexities in our most recent Healthcare Reform digest post if you would like more information on the calculation and payment details.

Companies are going to do everything possible stay under the Cadillac Tax thresholds in order to avoid the 40% non-deductible excise tax. If the current regulations stay in place, one of the first employer benefits to go by the wayside will be their FSA – leading to further financial strain for employees.

Worksite Wellness Programs Not Just A Fad, Survey Shows

Thursday, August 20th, 2015

The post below is a guest blog from Meaghan Roach who serves as Health Management Advisor for CAI’s employee benefits partner Hill, Chesson & Woody.

BalanceA few weeks ago, the Society for Human Resource Management (SHRM) unveiled the results of their 2015 employee benefits survey at their national conference. The results? Of no surprise to many in the industry, health and worksite wellness programs continue to grow in prevalence and popularity. SHRM attributes much of this to employers’ desires to combat rising health care costs. In addition to slowing the cost trend, health management programs may also increase productivity, decrease absenteeism, and improve a company’s ability to recruit and retain top talent.

Based on the survey, popular health management programs included biometric screenings and health assessments, tobacco cessation programs, lifestyle coaching, and preventive programs targeted at employees with chronic conditions. New to the scene this year are company-provided fitness/activity trackers and fitness competitions, which are offered by 13 percent and 34 percent of the respondents, respectively. New offerings in the past few years seem to have a common theme of physical activity, with standing desks (25 percent of respondents offered in 2015), on-site fitness classes (17 percent), and off-site fitness class subsidies (16 percent) all being added to the survey’s options in the past three years.

Health and wellness benefits that saw the largest increase in prevalence over the past five years involved premium differentials for participation in a variety of activities, including preventive care, completion of an annual health risk assessment, and not using tobacco products.

BenefitsPro summarized several other areas of the survey – including telecommuting, health savings accounts and family friendly benefits – but noted that wellness programs are certainly a key takeaway from this year’s results. In fact, as more millennials enter the workforce and demand a strong company culture, worksite wellness programs are becoming almost expected in the minds of potential employees. Eighty percent of survey respondents provide employees with wellness resources and educational information, and seventy percent indicated that they offer wellness programs, suggesting an attempt to integrate health initiatives into company culture across the majority of organizations in the United States.

Interested in how your company can offer initiatives like the above that can have a positive effect on employee morale and productivity, and ultimately your bottom line? Contact our Health Management team and allow us to help guide you through development of a wellness program to complement your employee benefits package.

 

 

Summer Interns and The ACA

Tuesday, June 16th, 2015

The post below is a guest blog from Rob Kreig who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

summer intern and acaSchool is almost out for summer, and that means many employers are getting ready to start hiring summer interns. However this year, in addition to determining which students will be the best fit for your organization, you also need to consider how the Affordable Care Act may require you to offer benefits to the interns who you hire.

I’ve been asked numerous times in the last month whether interns who work 30+ hours a week must be offered health benefits on the same schedule as a full-time employee. The answer to this question is generally “yes”. An intern who works more 30 hours a week should be offered benefits under ACA if they are going to be employed for longer than an employer’s eligibility period (can be up to 90 days) if the employer wishes to avoid potential ACA penalties.

However, employers should be aware that there is a possible exception for seasonal workers where some employers are finding that interns may fit.  To qualify, the individuals who fill a particular position will work less than 6 months, and are hired at the same time every year.  For these individuals an employer can apply the look back measurement method to determine benefit eligibility rather than make the employees eligible at the expiration of a health plan waiting period.

For more information on seasonal employees, the 4th paragraph of question #54 in this IRS document has some additional information including the definition under ACA.

If you have questions about your specific intern situation, check out our free, on-demand presentation: “Temporary Employees and the ACA.”

Top 5 Things Employees Enjoy Most about Working for Their Company

Thursday, May 28th, 2015

In today’s video blog, Sean Walsh, CAI’s Survey Support Specialist, shares the top five reasons employees say they enjoy working for their employers.

He starts by asking, “Have you ever wondered what your employees think of your organization?”

Finding out whether your employees love or hate their workplace can be discovered by measuring employee attitudes through an Employee Opinion Survey (EOS). Sean says they are one of the tried-and-true methods of HR.

He shares that in 2014, over 3000 employees completed an employee opinion survey with CAI. In the video, Sean reveals the top five things that employees enjoy most about working for their current employers and why they enjoy these five workplace aspects:

 5) Benefits 

 4) Management

 3) Schedule / Hours 

 2) Job Responsibilities / My Work 

 1) Fellow Employees / Enjoy the People 

If you have any questions regarding Employee Opinion Surveys, or possibly conducting an Employee Opinion Survey yourself, please feel free to reach out to Sean at Sean.Walsh@capital.org.

 

Are We Beginning To See Price Transparency In Healthcare?

Thursday, April 16th, 2015

The post below is a guest blog from Jay Lowe who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

healthcare transparencyAs pricing in the healthcare market continues to rise, we, as consumers of this healthcare, will begin seeking more cost-efficient ways to pay for this. Many experts agree that one way to begin to slow this rise is to become smarter with our healthcare buying decisions. A ‘smart healthcare consumer’ is one who seeks out the highest quality of care at the lowest price and understands the impact of their healthcare buying decisions.

One of the major hurdles to this is the lack of understanding on where to find information. In areas where there is a lot of competition for healthcare, costs can vary for the same procedure at different facilities. However, based on one’s medical plan, the cost to the patient may be the same by the time the deductible and coinsurance limits are met. The patient doesn’t realize there is a cost difference because his or her out-of-pocket expenses remain the same. It is the insurance company that is ultimately paying the difference, which causes potential increases to premiums at the next renewal.

This disconnect of the user of the healthcare (the patient) and the payer of the healthcare (the insurance company) is beginning to shrink as we see a shift to more consumer-driven health plans like high deductible plans and HSA-qualified plans. More of the actual charges are now being paid by the member on these types of plans. Due to this, the demand for greater pricing transparency is increasing.

We are now beginning to see the marketplace respond as third party companies are unveiling new technology designed to give us more precise information on the cost and quality of the services we seek. The Milkin Institute School of Public Health points to a number of new resources designed to give consumers cost information. Additionally, the health insurance carriers are redesigning their cost comparison tools on their member websites. Just recently, Blue Cross Blue Shield of NC introduced a new pricing tool that integrates the member’s underlying health plan to show actual out-of-pocket cost for procedures at different facilities. This gives members a true shopping experience when seeking care.

Some carriers have developed phone apps that compare expenses and outcomes for many services and procedures, allowing consumers to find healthcare providers, urgent care centers, and emergency facilities, as well as average costs for medical services.

Ultimately, we will be able to evaluate our healthcare costs quickly and easily. It will be our responsibility as consumers to use this information efficiently and hopefully make an impact to our premiums.

Top Tips To Gain Executive Support For Health Management

Tuesday, March 17th, 2015

The post below is a guest blog from Meaghan Roach who serves as Health Management Specialist for CAI’s employee benefits partner Hill, Chesson & Woody.

health management supportAccording to the Wellness Council of America (WELCOA), gaining executive support for your work site health management initiatives is a crucial first step to a successful program. Leadership support is a significant driver in getting employees to pay attention to and engage in the program. An executive champion serves to communicate the program to the masses, and sets a positive example of the desired healthy behaviors. However, this is often easier said than done.

If you are struggling to get your C-Suite on board with your plans for a health management program, try following these key steps:

  1. Establish Common Ground. How does the program tie in with your overall business strategy? How can you relate it to the company’s mission and vision statements? The CDC breaks down the reasoning for having a health management program into three key arguments: the Health Care Cost Argument, the Productivity Argument and the Great Please to Work Argument. Consider, for example, that you are part of a small company, thus your medical insurance is community rated. The Health Care Cost Argument may not be as important, but your field may be highly competitive, and being considered a “Best Place to Work” could be key for recruiting top talent. In order to capture the attention of your audience, you must know what issues are important to them and use those to your benefit.
  2. Understand the Obstacles. Often, members of leadership are dealing with their own health issues, and don’t want to appear hypocritical by pushing a health promotion program on their employees. They may not fully understand how their role fits in to the bigger picture, and what responsibilities fall on them. Be specific with what type of commitment you are requesting from them and what they will need to do to make the program successful.
  3. Build the skills. Once you have members of leadership on board, it is essential to help them hone their expertise to effectively lead the company’s health management initiatives. The key to effective support is to make the leaders be vocal, visible, and visionary for the program. Get your champions to push out important communication pieces, as well as be present at the events. Additionally, encourage executives to keep an innovate mindset throughout the process. Creative methodologies can help spark employee engagement.
  4. Respect that it is a Process. While it would be great if the entire C-Suite were committed to being champions of the program after the initial introduction, this is a lofty goal. The truth is: it will take time and perseverance to move their interest to a boiling point. Continue to bring success stories, employee testimonials, and hard data highlighting the progress the program has made. As they begin to see the impact of the program, they will be swayed in the desired direction.

Getting your entire workforce supporting and engaging in your health management program can be tricky, but it is necessary for the success of your plan. If you have more questions about how to obtain leadership support, contact our Health Management team.