Archive for the ‘Health Insurance’ 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.

Marketplace Premiums Will Continue To Trend Upward In 2017

Tuesday, July 19th, 2016

marketplaceblogThe 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.

Now is the time when insurance carriers will begin determining premium pricing for their individual plans and filing for approval with state departments of insurance.  Undoubtedly, their goal will be to offer plans that meet the needs of most, maintain competitive pricing, and avoid losses associated with not being able to underwrite or deny coverage during the Annual Enrollment Period (AEP) or Special Enrollment Periods (SEP).  The Kaiser Family Foundation discusses some of the challenges that insurers will continue to face when determining rates for the upcoming calendar year.  One challenge that is of interest continues to be those individuals that remain uninsured.  The Kaiser article indicates that these uninsured individuals are generally healthier and their enrollment would help to offset costs as they are expected to have a fewer health care claims.  The Individual Mandate provision of the ACA requires everyone to have coverage, or else face a penalty.  In 2016, that penalty is $695 or 2.5% of household income, whichever is greater.  In 2017, these penalties will be adjusted upward for inflation.  As these penalties continue to rise it will be interesting to see how many people continue to remain uninsured and if their eventual compliance with the Individual Mandate actually has a positive impact on rates.

In North Carolina, the pricing challenge becomes more difficult in 2017 as one major carrier, United Healthcare, is pulling their individual plans from the Marketplace (where individuals can receive a federal subsidy for insurance premiums) as they have decided to no longer participate in this state. This will leave our state with only 1 major carrier offering subsidy-eligible plans, Blue Cross Blue Shield of North Carolina.   This may put additional pricing pressure on BCBSNC and drive their premiums even higher.  They have already been forced to make dramatic network changes in an effort to keep pricing at acceptable levels with both their members as well as the NC Department of Insurance.  Time will tell if these changes create more stability in premium pricing.

As 2017 approaches, those with individual insurance plans will be anxious to see what their premium increases will be for the next year.  Double-digit increases in the 20-30% range would not be a surprise as insurance carriers may still be trying to offset losses from prior years.  State Departments of Insurance will be responsible for approving any increase requests and plan design changes, as the carriers will most likely adjust benefit levels to maximum premium savings.  Regarding the Marketplace departure of United Healthcare in 2017, small group employers need to understand that UHC will continue to offer group-based plans.  With moving away from the Marketplace, UHC is looking 2-3 years to the future to ensure that they will continue to be competitive with individual plans outside of the Marketplace, as well as with their small group plans.  In North Carolina, will BCBSNC follow suit?  Time will tell.