Archive for the ‘Benefits’ Category

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.

Medical Care is not a Priority to Millennials

Tuesday, January 20th, 2015

millennials workMillennials put a lower priority on medical care than other generations according to a new analysis from Aon Hewitt. However, this generation is also more likely to want their employers to play a strong role in supporting their overall health and wellbeing. The data comes from the 2014 Consumer Health Mindset report from Aon Hewitt, the National Business Group on Health, and the Futures Company. Participants included 2,700 U.S. employees and their dependents. The joint survey analyzed the health and wellness perspectives, behaviors and attitudes of employees from different generations.

The survey showed that Millennials are the least likely of the generations to participate in activities focused on prevention and maintaining or improving physical health. Some specifics of that data included 54 percent of them had a physical in the last 12 months, compared to 60 percent of Generation X and 73 percent of Baby Boomers. Additionally, only 39 percent say preventive care is one of the most important things to do to stay healthy in comparison to 49 percent of Generation X and 69 percent of Baby Boomers.

With only 21 percent participating, this group is also not as likely to participate in healthy eating/weight management programs, compared to 23 percent of Generation X and 28 percent of Baby Boomers.  However, 63 percent of Millennials are likely to engage in regular exercise, compared to 52 percent of Generation X and 49 percent of Baby Boomers.

“Given their younger age, most Millennials are relatively healthy, so they may not feel a sense of urgency to go to the doctor regularly or eat a well-balanced diet,” said Ray Baumruk, employee research leader at Aon Hewitt. “However, the lack of health prevention and maintenance when they’re young may lead to greater health risks as they get older. Employers should communicate the importance of participating in health related activities now to avoid serious health issues later in life.”

While they do not feel an urgent sense of preventative care, the data shows that Millennials are the most likely to embrace support from employers in their overall health and wellbeing compared to other generations. Fifty-two percent of participants from this generation say “living or working in a healthy environment” influences their personal health, while only 42 percent of Generation X and 35 percent of Baby Boomers feel the same way.

If you want to help your Millennials reach their fitness and overall health goals, while also making them aware of the importance of prevention and improving their health, Aon Hewitt experts suggests the following steps for employers:

  • Understand motivation. It’s important for employers to understand what motivates and engages this group. Fifty-five percent of Millennials report their motivation is “to look good,” and not as much to “avoid illness.” Employers should modify their strategy and communications to show how poor health can impact an individual’s energy and appearance.
  • Reach your audience correctly. Millennials are significantly more likely to prefer mobile apps, text, or popular social channels, such as Facebook and Twitter to access both general and personal health information. Organizations should also take advantage of apps and mobile-friendly websites to help engage employees in health and wellness campaigns.
  • Easy and convenient is key. Forty percent of Millennials say they are more likely to participate in health and wellness programs if they are “easy or convenient to do.” Employers should remove barriers to helping this generation create good health choices and habits by focusing on programs that meet their work/life balance.
  • Competition for fun. Millennials are the generation most likely to be interested in “friendly competitions.” Employers may want to explore ways they can include competitions to motivate and engage Millennials, such as company-wide well-being or fitness challenges.

For additional tips to help keep your Millennial staff engaged, please call a member of CAI’s Advice and Resolution team at 919-878-9222 or 336-668-7746.

Photo Source: ITU Pictures

Top 5 Resolutions For Maintaining A Strong Benefit Plan

Thursday, January 15th, 2015

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

resolutionsYou may think New Year’s resolutions only apply to bettering yourself, but don’t forget about the health of your benefit plan! Follow these five resolutions for keeping your benefits strong:

 

  1. Look for new opportunities to communicate the value of your benefits. Many employers pull their employees together once a year to review their benefit offerings during the annual open enrollment.  Make a point to pick 2 or 3 other times a year to stress the benefits of your health plan.  For example, distribute a hidden paycheck, highlight one of your benefit offerings at a staff meeting or hold a Lunch & Learn event supported by one of carriers during the year.
  2. Test your plan for ACA and overall compliance.List all of the notices you are required to release each year.  Take inventory of all of your employee categories and know which ones are eligible for coverage under your plan.  Make certain you are able to access contracts and policies without difficulty.  Review your time recording structure and be assured it will assist you with the new 2015 reporting requirements.
  3. Develop a health and wellness calendar.Challenge your organization to engage in a health and wellness event once a month.  Select a small group of employees or form a committee to develop an activity or event each month to support.  These events can range from a lunch time walk, encouraging others to eat more fruits and vegetables or supporting a team effort at a local charity walk.  With a little forethought, these activities can be a great way to remind your employees that their health is important.
  4. Plan ahead; don’t wait until the last minute to review your plan options for 2015.Review how things are running with your current benefits mid-year and see if they are supporting your overall business objectives for the year. Are your benefits helping you retain and attract the right talent for your organization to succeed?  If not, what may you need to change or initiate to help you meet this goal.
  5. Look for ways to enhance your plan offerings.Employees are looking to their employers to offer them more choices in plans that may meet their unique needs.  The worksite benefit landscape has evolved a lot over the past few years.  Introducing new voluntary benefits are a great way to enhance your benefit portfolio.  These benefits can provide additional financial assistance or incentives to many employees alongside their major medical plans.

Regardless of which direction you go in 2015, now is the perfect time to take a step back and assess what is working well for your plan.  Talk to your benefits consultant to identify different avenues to explore in the New Year!

 

Which Pays First – Medicare or Private Insurance?

Tuesday, December 16th, 2014

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

Picture1As we go through Medicare Open Enrollment for this year, it’s important to remember some basics about how Medicare interacts with traditional private medical insurance plans. Many individuals who are entitled to Medicare benefits are still actively working and eligible for employer sponsored health insurance. When a person has multiple insurance plans, coordination of benefits takes place.This determines which payer (insurance company) pays first.

In most instances where group health insurance is involved, Medicare is the secondary payer. That means that the group plan will pay first, paying the amount that its maximum coverage allows, and then Medicare will be asked to pay the remainder. This is important, because when you determine your potential liability, you don’t want to exclude members who may be on Medicare and assume that your group plan will not be responsible for any claims.

Check out the details in our on-demand webinar on Medicare Secondary Payer.

It’s also important to remember some prohibitions that come with Medicare and employer-sponsored group health plans. It is illegal to incentivize employees off of the group plan and onto Medicare. While some feel that this could improve their demographics and potentially eliminate some high cost claimants, the government makes it clear that penalties can be assessed for each time an incentive is offered, whether it is verbal or written.

Another consideration is when your company offers a High Deductible Health Plan paired with a Health Savings Account (HSA). Those who are entitled to Medicare, meaning both eligible and enrolled, cannot contribute to an HSA on a tax-preferred basis. If this is the only plan option your company offers, your Medicare entitled employees may not be able to take advantage of the full benefit of the plan design. Employees who carry a balance in an HSA that was accumulated prior to enrolling in Medicare may still use those funds for Medicare premiums and out of pocket expenses.

If you have any specific questions about Medicare, CMS has a variety of detailed resources.

Employers Need To Be Prepared For The Cadillac Tax

Tuesday, November 18th, 2014

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

cadillac taxWhile most employers are focused on managing through 2015 and the upcoming employer mandate, the Cadillac Tax will present another significant challenge for many in 2018 and deserves attention.

The Cadillac Tax is an excise tax on health coverage deemed to be high cost.  The tax begins in 2018, and levies a 40 percent excise on the value of health insurance benefits exceeding the threshold of $10,200 for individual coverage and $27,500 for family coverage (indexed to inflation) on an annual basis. The thresholds increase for individuals in high-risk professions e.g. police officers/fireman and for employers that have a disproportionately older population.

While these thresholds seem high for some, when most evaluate their current premium and apply three years of  a trend increase to it, it is easy to see how in  2018 many employers will be  close to hitting or even exceeding the thresholds.  Industry estimates show that nearly 50% of employers will be impacted in 2018.  Making matters worse, it is not just the cost of health insurance that goes into the calculation.  Employer or employee contributions to a health flexible spending accounts must be included as well as employer contributions health savings accounts and health reimbursement accounts (HRAs).

The outcome is that employers will likely have to reduce the value of the plan they are offering, reduce the limit of their Flexible Spending Account, and eliminate any employer contributions to an H.S.A. or a combination of these tactics in an effort to avoid the tax.

The tax will apply to employers regardless of plan funding (fully insured or self insured) and is scheduled to begin in 2018 and go into perpetuity.  The tax is non deductible for employers so many employers may experience an increased tax burden due to the loss of deductibility.  The Congressional Budget Office estimates the tax will raise $80 billion between 2014 and 2023.

Employer reaction has been mixed with many taking a wait and see attitude and delaying a decision as long as possible.  In a recent survey of 333 large employers by the National Business Coalition on Health and the Benz Corp, according to the results, “the Cadillac Tax is currently not driving major benefit change.”  Of the employers surveyed, 30 percent have not made any decisions around their course of action with 46 percent of employers keeping benefit coverage the same.

Since the inception of the Affordable Care Act (ACA) there has been wide talk that the Cadillac Tax would be repealed.  Pundits proclaimed that large employers and unions would not stand for it.  As the ACA marches on, the Cadillac Tax is becoming more and more of a reality.  Congress is counting on the tax to be a major source of revenue so repealing the Tax could be unlikely.  There is a possibility that the Cadillac Tax could be redesigned or some form of compromise reached.  The long term impact to employees will most likely be reduced benefits and higher out of pocket costs which may create morale and retention issues.

Employers need to plan now and estimate what the potential costs of the Cadillac Tax to be for their organization and determine a strategy moving forward.

 

 

How Can Staffing Firms Manage The Employer Mandate?

Thursday, October 16th, 2014

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.

hcw 10 16 14Be sure your staffing firm is ready to be part of the solution, not part of the problem.

Many companies use staffing firms to fill placement needs within their organizations. The placements can be for short-term coverage needs or longer term work assignments. Under the Employer Mandate portion of the Patient Protection and Affordable Care Act (PPACA), these temporary employees must be classified just as any other permanent employee based on their job description or role within the company. The classification determines whether or not this temporary employee should be offered health coverage. Improper classification and failure to offer health coverage to a full-time but temporary employee could result in significant tax penalties levied against the client employer.

The Problem

When PPACA was initially enacted, the rules around staffing firms were not clearly defined. There was some speculation that these entities would not be subject to the Employer Mandate or penalties and that companies who use staffing agencies would not be required to offer their ”staffed” or “temporary” employees coverage. Earlier in 2014, however, the IRS and the Department of Labor issued clarification around this and deemed that the Common Law Employer is to be responsible for providing coverage to staffed employees and will receive the penalty if out of compliance with the Employer Mandate.

The Common Law Employer may or may not be the staffing agency and is to be determined using the IRS 20 factor test. This determination would be made regardless of any agreement or contract between the staffing agency and the client employer. Additionally, the issuing company of an employee’s Form W-2 is not determinative of who is responsible for offering coverage. In many cases, the Common Law Employer is the client employer who receives the temporary employees from the staffing firm. When the client employer is the Common Law Employer, the burden of offering coverage (and the risk of penalty) lies with the client employer.

The Solution

The Employer Mandate final rules provide some relief to companies using staffing firms, by allowing a staffing firm to make an offer of coverage on behalf of the Common Law Employer. A compliant offer of coverage for staffed employees releases the Common Law Employer (i.e., the client employer) of the Employer Mandate obligations for those employees procured through the staffing agency. The rules around this are simple:

  1. First, the offer of coverage must be made by the staffing firm. The coverage will consist of a medical plan that meets or exceeds the 60% actuarial value limit set by law and be affordable to the employee (total annual premium cost to the employee of no more than 9.5% of their W-2 income).
  2. Second, the plan that is offered is a group health plan established or maintained by the staffing firm.
  3. Third, the fee paid to the staffing firm by the client employer is higher for those temporary staffers who enroll in the plan than it is for those temporary staffers who choose not to enroll. Basically, the staffing company is required to pass along a portion of the cost of insurance to their client employer.

What should you do now?

Employers who use temporary employees should ask their staffing firms questions about how they are complying with the PPACA regulations, as that could have a significant impact if penalties are triggered. Conversely, staffing firms must be prepared to answer the questions they will receive from their clients.

Questions that should be asked and answered are:

  1. How do you plan to comply with PPACA in 2015?
  2. Do you plan to offer MEC to full‐time employees?
  3. Will the MEC be of minimum value (i.e., 60% plan value)?
  4. Will you be charging a different fee for employees enrolled in the plan than for employees not enrolled in the plan?
  5. If yes, what will the differential be?
  6. Will you obtain and maintain waivers for those employees who waive coverage?

Ultimately, there is a vital necessity for any company that uses temporary employees to have an open channel of communication with their staffing firm. Employers must educate their staffing firms on types of employees they need with respect to their classification. Conversely, staffing firms must educate their employer clients on how they plan to manage the Employer Mandate and what to expect regarding pricing and coverage on the employees they place. Staffing firms and their employer clients must work together to develop a plan to reduce and/or eliminate the exposure to penalties.

Private Exchanges Are Here – Now What?

Tuesday, September 16th, 2014

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

hcw 9 12 14By now you have probably heard the term “Private Exchange.” Private exchanges are the hot new topic in the benefits world and something that employers should become familiar with as it may be an option to consider in the future. Private exchanges are nothing new. In fact, they have been around for about 20 years but without the fancy title.

The creation of the federal and state-based exchanges, where individuals can buy their own insurance, has brought new life back to the private exchange idea. Under this model, an employer is able to offer an à la carte selection of benefits for their employees to choose from. All of this is managed through a Human Resources Information System (HRIS) during annual open enrollment, or at the time of hire, and streamlines the administration process for the employer.

With the re-emergence of the private exchanges we will begin to see the shift to a true defined benefit strategy from employers who implement this. Heath Insurance Underwriter indicates that in order for private exchanges to be successful, they must find ways to continue to be competitive. This is especially good news for small employers (under 50 employees) as options are reduced and premiums begin to rise. In a recent New York Times article, Accenture predicts that by 2018 enrollment through private exchanges will surpass that of the state and federal exchanges. However, this will come at a cost. Benefits in the private exchanges are expected to become leaner as companies try to stay within budgets.

What’s important to understand is that this is not a new concept, just a re-branding of an old idea. Private exchanges are risk pools that should be considered just like any other risk pool: weighing out the pros and cons for your organization. As we move forward into the post-Reform world, we will continue to see new players enter the marketplace with their own versions of private exchanges. There is good news, though. The market is evolving under Reform to meet the needs of employers.

 

2014 NC Policies & Benefits Survey Reveals Total Rewards Practices of NC Employers

Tuesday, September 9th, 2014

survey dataDuring last month’s Compensation and Benefits Conference, Molly Hegeman, CAI’s Vice President of HR Services, shared information on what NC employers are doing in regard to their total rewards packages. Her presentation included statistics from the 2014 NC Policies & Benefits Survey. The only local survey of its kind shares employers’ answers to 320 questions related to workplace policies and employee benefits practices.

This year’s survey had participation from 384 employers located throughout North Carolina. Forty-four percent of participants are located in the Research Triangle region, 25 percent are in the Charlotte area and 17 percent are located in the Piedmont/Triad region with the remaining participants in the East/Southeast region.

Some key findings from the survey revolving around health and welfare benefits include:

  • Nearly all employers provide medical insurance to their employees. About 78 percent of employers offer a traditional PPO plan, about 27 percent offer a consumer driven HAS plan.
  • Regarding employer contribution to the insurance premium, on average, employers pay 80 percent of the premium for employee only PPO coverage and 55 percent of the premium for family PPO coverage for full-time employees.
  • About 71 percent of employers do not offer domestic partner benefits. In turn, about 18 percent of employers do offer domestic partner benefits regardless of sex of partner. About 11 percent offer benefits with sex restrictions.

The survey also covered time off and results revealed several things, such as:

  • About 72 percent of employers have a PTO policy. On average, employers provide 6 days of PTO upon hire, 13-14 days of PTO after 1 year of service, 15 days of PTO after three years of service, 17-18 days of PTO after 5 years of service and 20-21 days of PTO to employees after 10 years of service.
  • About 68 percent of employers have a formal sick plan that is separate from a PTO policy. On average, employers provide 9 sick days to full-time employees per year.
  • On average, employers provide 9 paid holidays to full-time employees and 5 paid holidays to part-time employees per year.
  • About 9 percent of employers offer a maternity leave policy separate from short-term disability or FMLA.

Pay practices is another subject the survey tackled. Participant responses include:

  • About 61 percent of employers indicated a pay philosophy of paying employees at or above market rate. In turn, 34 percent have no formal pay philosophy.
  • To determine compensation decisions, about 77 percent of employers use external market analyses, about 70 percent use internal job evaluations, about 58 percent use skill or competency-based methods, and 11 percent have no formal method.
  • The most common type of base pay increase employers give is performance based according to up to 83 percent of employers. About 22 percent give an across the board increase, about 17 percent give a cost of living increase, and about 6 percent give some other type of increase.

CAI provides this survey every two years. Other topic areas the survey covers include retirement plans, workplace culture, recruiting and staffing, termination and HR metrics.

The 2014 NC Policies & Benefits Survey can be purchased from CAI’s store here. If you’re interested in participating in next year’s survey, please contact a member of CAI’s survey team at cai-survey-team@capital.org.

 

 

In An Environment Of Uncertainty, Prepare To Comply With The ACA

Thursday, August 14th, 2014

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

hcw 8 14In the last few weeks, there’s been multiple Affordable Care Act (ACA) developments, ultimately impacting large employers with 50 or more employees. How and when will they occur is another story, and it is easy to see why some employers are perplexed. Predicating what the ACA will look like a year from now is very difficult with some saying the employer mandate may be delayed again. Let’s review the recent events and how they are contradictory in many ways.

On July 22, the United States Court of Appeals for the District of Columbia Circuit concluded that PPACA’s subsidies should only be available to individuals purchasing health insurance in exchanges operated by a state – calling into question all the subsidies that have been obtained to date through the Federal exchange. Hours later in Richmond, Va., the United States Court of Appeals for the Fourth Circuit decided that legislative intent was to make tax subsidies available to individuals purchasing health insurance through a federally funded exchange or a state-based exchange if the state failed to create one. These two conflicting rulings are likely to go to the Supreme Court. For now, subsidies/tax credits will continue to be granted on the Federal Exchange. If the D.C. Circuit’s decision is upheld, it could strike a serious blow to the employer mandate since receiving a subsidy is a primary trigger of the employer mandate.

On July 24, the IRS published draft forms for the Code 6056 employer Minimum Essential Coverage reporting and disclosure requirement to the IRS and to individuals. This reporting requirement has multiple purposes as it allows the IRS to enforce the employer mandate, enforce the individual mandate, and confirm eligibility for premium tax credits for coverage purchased through an Exchange. This reporting along with the associated forms take effect in 2015 and are due in January 2016.

So in the same week, we witnessed a decision by an appeals court that called into question the viability of the Employer Mandate and suggested a possible delay, and then actions by the IRS which seem to indicate the Employer Mandate is moving forward as scheduled.

Regardless, large employers need to be prepared to comply with the employer mandate in 2015 and the associated reporting requirements. This should include a review of current payroll and HRIS systems to ensure they will be able to meet the new reporting requirements. The safe play is to assume that the employer mandate will go into effect without another delay, and if a delay occurs, organizations will have more breathing room to implement.

Are Gated Health Plans the Way of the Future?

Tuesday, July 22nd, 2014

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

hcw 7 14As employers continue to identify new ways to control their health plan costs, many employers are considering gated health plans as an option. A “gated” health plan, offers a different spin on the traditional wellness incentive that employers and employees have become used to.  Instead of offering employees lower payroll deductions through the completion of a health assessment or completion of a biometric screening, employers are now considering the option of offering richer benefits as well.

In a recent survey, more than 1,000 employers were asked to disclose current plan designs and changes they expect in the next three to five years. It’s a way for employers to control costs and reward employees for their healthy lifestyles.

52 percent of employers said their current health plan focuses on traditional trend mitigation approaches, such as employee cost shifting. Interestingly enough, it dropped to 21 percent when asked if this would be their preferred approach in three-to-five years.

Employers are beginning to lean more towards plans that require employee action.

In the upcoming years, over 60 percent of employers plan to introduce a gated plan, where employees must complete a task to obtain access to richer design options, compared to only 20 percent who “gate” their employees today. In the past we’ve seen incentives to help lower payroll deductions, but now with gated plans, there is an option to improve benefits.

Employees are also considering implementing the following tactics to mitigate health costs:

  • 72 percent of employers are or will be reducing subsidies for dependents
  • 52 percent of employers anticipate using unitized pricing—where employees pay per person and not individual versus family—up from 5 percent today
  • 42 percent of employers are considering offering high-deductible health plans as a full replacement plan, up from 15 percent today
  • 24 percent of employers plan to offer employees tools to guide decisions in plan selection and utilization, up from 19 percent today
  • 92 percent plan to offer cost transparency tools, up from 49 percent today

While employers are evaluating these new options, and continuing to ask their employees to become more engaged, it is important they evaluate their plan designs carefully.  These new gated plan options are permissible under HIPAA wellness rules.  However, it is very important to ensure they are designed correctly, as they must be carefully structured to comply with both ADA and GINA requirements.  Also, these plans would need to provide a reasonable accommodation to anyone who can’t participate due to a disability, as restricting eligibility in a plan based on participation could be seen as more of a penalty than a monetary premium differential.