Posts Tagged ‘Employee Benefits’

The Importance of Explaining Your Healthcare Plan to Employees

Tuesday, November 27th, 2012

The post below is a guest blog from CAI’s employee benefits partner, HCW Employee Benefit Services.

Have you heard your employees ask: “Why do I have to pay more for my healthcare plan this year?” or maybe, “I’ve been to my doctor only for my physical this year and passed it, so what’s the problem?”

The answer to these questions is complex, and your employees need the right information from you for a credible response.

To be effective in explaining healthcare plan costs to employees, you need to emphasize the following:

1)      Healthcare costs continue to rise. We all know this, but the exact figures bring home the stark impact of what is happening.

2)      Efforts to control these costs have produced few savings. No reform launched so far to address the situation has made a significant dent in keeping fees down. The impact of the Affordable Care Act may change this, but there are already indications that at least some features of it will place additional reporting and projecting burdens for insurers. That will likely mean the costs of those activities will be passed along to your employees through their healthcare plans.

3)      There is no easy solution. Healthcare costs may not improve until the overall health of U.S. citizens improve. While there have been various efforts to encourage groups to diet and exercise more, we lack a national effort designed to curb our bad habits, which is hurting us.

Obesity in particular raises the risk of many diseases that are expensive to treat, and the results are increased premiums for all of us to cover. Higher healthcare costs will naturally follow when the Centers for Disease Control and Prevention:

Another factor is that the existing healthcare system favors quantity over quality in terms of service. The emphasis for physicians is on patient volume rather than outcomes, satisfaction and cost savings for patients. This setup encourages excessive services and treatments for patients, which leads to expensive healthcare plans for employers.

To lower the costs of healthcare, we need to overhaul changes in these areas in a unified effort. Improved patient outcomes, more efficient delivery of care and reduced health risk factors are all components that must be combined with lower costs per unit in order to lower the total cost of healthcare.

If you need to provide additional information to your employees, contact HCW Employee Benefit Services. We provide employers with those details so they can illustrate what factors are increasing healthcare costs, as well as what employees can do to help their organization keep health plans affordable.

(Photo:  Phil Sexton)

Pay or Play Mandate 2014 – Do You Have Your Head in the Sand?

Tuesday, April 24th, 2012

The post below is a guest blog from Dax Hill who serves as the Principal, Health & Welfare Consultant for CAI’s employee benefits partner, HCW Employee Benefit Services.

There is a book titled “Hope Is Not a Strategy.”  I believe this statement to be particularly true regarding the Healthcare Reform “Pay or Play” mandate.   This regulation will require great attention as employers determine their future path in offering employee benefits.

As you are probably aware, the following penalties will apply to employers with 50 or more full-time equivalent employees, effective 2014:

1)      If you provide no group medical insurance: you will pay a $2,000 per employee per year penalty.  The first 30 employees are exempt from the penalty.

2)      If you provide unaffordable insurance coverage:  applies to employees making between 100% and 400% of the Federal Poverty Level (400% of the FPL equates to a single employee making ~$44,000) AND EITHER your group medical insurance plan provides less than 60% value OR payroll deductions for employee-only coverage are more than 9.5% of the employee’s W-2 income.  If one of these employees receives a subsidy through the state exchange, the penalty will be subject to the lesser of:  1) a $3,000 penalty per employee receiving a subsidy through the insurance exchange OR  2) $2,000 for all employees (the first 30 employees are exempt from the penalty).

Have you asked yourself the following questions?

  • How will the government penalties impact us if we don’t offer group medical insurance?
  • What will be the financial impact if some employees opt out of our group medical insurance plan and purchase individual coverage through the state insurance exchange?
  • Should we drop our employer-sponsored coverage all together and direct our employees to the exchange?  If we go this route, how are we going to differentiate ourselves as an employer?
  • Or, are we better off continuing to offer our group medical insurance plan?

So, which approach are you taking?

  1. “Let’s wait and see…hopefully this will all go away” approach while waiting for the Supreme Court’s decision before analyzing what type of impact the Play or Pay mandate will have on your company.
  2. “This doesn’t apply to my organization” so I have no reason to consider options related to this mandate.
  3. “Let’s plan now in order to determine which options would provide us with the best possible outcome,” I want to make sure I have a great plan to make this a competitive advantage as possible for my organization.

While 2014 seems so far away, it is not.  Many employers are currently planning for the future and determining which option provides the most favorable outcome based on today’s regulations.  HCW is helping employers quantify those scenarios.  These are just a couple of different scenarios employers are considering:

1)      Stay the course on our current medical insurance plan.

2)      Drop coverage and pay the penalty for all employees. This could be most disruptive and provide no perceived value to the employees.  Additionally, higher compensated employees might not be eligible for any subsidy, which would be a negative impact.

3)      Offer a high/low option for all employees and base the premium contribution on the base plan.

4)      Adjust the “employee-only” premiums in order to meet the 9.5% threshold and prevent any penalties.

5)      Redistribute the premiums from Family to Employee-only coverage to meet the 9.5% threshold.

6)      Have employees work less than 30 hours in order to avoid penalties.

7)      Add all employees to the plan and adjust other forms of compensation to balance the budget.

So, will you Pay or Play? There are many more solutions to consider.  The key is to QUANTIFY possible solutions that align with your culture and the direction of your organization.  This will enable you to make educated decisions around this important benefits strategy.  It’s time to think strategically and not rely on hope.   What steps have you taken to map out a plan?

Form 5500? Huh?

Tuesday, November 15th, 2011

The post below is a guest blog from Zach Nichols who serves as the Triad Regional Manager for CAI’s employee benefits partner Hill, Chesson & Woody.

Are you tired and ready for the holidays?  Almost 65% of you have recently completed your benefit renewals and hope to move forward in 2012 with a few less gray hairs.  Once things get going in the first quarter, who’s in charge of filing your Form 5500s?  “Form 5500 what?” you might ask.  “I heard you say something about 5500. Is that a new Holiday bonus I’m getting this year?”

Well, for those of you who are compliant, this isn’t a big deal. You already know what it is and who is responsible for filing it.  Shockingly, according to the Department of Labor, almost 47% of employers in the United States are non-compliant when it comes to filing their 5500s.  Since almost half of employers have never heard of Form 5500 or don’t understand its importance, here’s a quick rundown of what it is and how it pertains to your organization.

Plan sponsors who maintain qualified employee benefit programs such as pension plans, 401k plans or Health & Welfare plans generally must file an annual report with the Employee Benefits Security Administration/Department of Labor. This annual report, known as a Form 5500, is due within seven (7) months after the end of a plan year. 

The Form 5500 Series is part of ERISA’s overall reporting and disclosure framework, which is intended to assure that employee benefit plans are operated and managed in accordance with set standards. It also assures that participants and beneficiaries, as well as regulators, are provided or have access to sufficient information to protect the rights and benefits of participants and beneficiaries under employee benefit plans.

“Okay, you got me. I need to be filing this but my broker never told me!  How do I become compliant?”

The Department of Labor (DOL) has eased the penalties for late or missing Forms 5500 substantially by implementing the Delinquent Filer Voluntary Compliance Program (DFVCP). Under this program, sponsors will face a penalty of $10 per day up to a maximum of $750 for small plans and $2,000 for large plans (if a plan’s 5500 filing has been missed for multiple years, the penalty cap is $1,500 for small plans and $4,000 for large plans, regardless of the number of late filings submitted).  Given the statutory ability of the DOL to assess up to $1,100 per day in civil penalties, this provides a significant incentive to correct past failures to file. If the DOL determines that the Form 5500 reporting requirement was willfully avoided, fines can reach $100,000 per plan so the $2,000 DFVCP is a no brainer!

So, no, the 5500 you heard about isn’t that new Holiday bonus you were hoping for. But, it’ll ensure the DOL isn’t getting an extra holiday bonus courtesy of your organization.

Three Reasons to Benchmark your Employee Benefits Plan

Tuesday, September 20th, 2011

 Hill, Chesson & WoodyThe post below is a guest blog from Chris Tutino who serves as Communications Specialist for CAI’s employee benefits partner Hill, Chesson & Woody.

With January 1 annual renewals right around the corner for a majority of employers, how do you know if your employee benefits plan is in alignment with other plans around the country and state? What about within your company’s industry and size?

Early this year, we worked with our partner, CAI, on the 6th Annual N.C. Healthcare Benefits and Cost Survey. This benchmarking report is the only one of its kind in North Carolina and one of only a handful in the country. Typically, when a benefits plan is benchmarked, it is done against nationwide data. While this is better than not benchmarking at all, a statewide comparison provides a better data set and a more relevant look at who your organization is competing against.

There are a number of ways benchmarking benefits your company, one of which is the invaluable information gained by human resources managers and CFOs. And, in the wake of healthcare reform, experts agree that benchmarking has received a higher level of interest, albeit for different reasons.

Another reason to benchmark is because what used to be a way to look over the shoulder of your competition has turned into a means to determine whether to offer health benefits at all. And, if your organization does decide to offer benefits or is forced to do so because of healthcare reform, benchmarking allows you to see how your costs fall in alignment with like-sized companies in similar industries.

Lastly, employers who navigate healthcare reform effectively will emerge with plans that benchmark where they need to be in order to remain competitive, manage expenses in innovative ways, and do so with the confidence that options do exist should the plan ever become cost-prohibitive.

Check out the executive summary from the 2010/2011 NC Healthcare Benefits & Cost benchmarking survey to see how your company stacks up on some key metrics, today.

NC Companies Projected to Increase Salary Budgets in 2012

Thursday, September 1st, 2011

CAI’s 2011 Wage & Salary Survey revealed that many North Carolina companies will be rewarding their employees with annual salary increases in 2012. Eighty percent of the nearly 500 organizations surveyed anticipate raising employee pay in 2012 by an average of 3.0 percent.

 

National Predictions Match NC

CAI has conducted its annual Wage & Salary Survey for more than 20 years, and it remains the most comprehensive and in-depth survey conducted of North Carolina Employers. This year’s survey represented 535 facilities in the state. Survey data was collected between April and May of this year. The results from North Carolina employers align greatly with salary data on a national scale. WorldatWork’s 2011-12 Preliminary Salary Budget Survey showed projections of 2.9 percent in 2012. Similarly, the Hay Group received results showing median pay increase of 3.0 percent in 2012.

 

 Salary Increases in 2011 

 

Count

(including 0%)

 

% Increase

(including 0%)

 

Count

(excluding 0%)

 

% Increase

(excluding 0%)

 

Exempt 

491

 

2.4%

 

369

 

3.1%

 

Hourly

468

 

2.2%

 

354

 

2.9%

 

 

 

Projected Salary Increases for 2012

 

Count

(including 0%)

 

% Increase

(including 0%)

 

Count

(excluding 0%)

 

% Increase

(excluding 0%)

 

Exempt 

446

 

2.5%

 

365

 

3.1%

 

Hourly

421

 

2.3%

 

338

 

2.9%

 

 

 Trends to Watch

The 2011 survey results indicated that only 19 percent of the participating facilities planned to not give annual salary increases in 2012. This statistic is lower than the 2009 results, which showed that almost 50 percent of participating organizations did not provide staff salary adjustments.

 

Survey results also revealed that there will be a limited use of “cost of living” or “across the board” increases where all employees typically receive the same percent increase. Now organizations are divvying up raises based on the performance of staff members to acknowledge and reward their high performers.

 

Additional Survey Data

The complete CAI 2011 Wage & Salary Survey includes company wage structure, pay practices and compensation philosophy, base pay increases for 2011, base pay projections for 2012 and detailed pay data for up to 358 jobs common to North Carolina employers. 

 

CAI is the premier provider of comprehensive survey data on the pay, policies and benefits provided by NC employers.

Create a Healthier Workplace with a Company Wellness Program

Tuesday, August 30th, 2011

GymEmployee-sponsored wellness programs provide organizations with many benefits. Designed to help employees maintain healthy lifestyle choices, wellness programs can strengthen staff morale, raise productivity and decrease health care related expenses for employers. To create a successful program, it is important to make sure the initiative’s focus is on helping employees get healthier rather than helping the organization save money—though both can occur.

An effective wellness program begins with involvement from a company’s leadership team. Like most business pursuits, employees are less skeptical to buy-in when senior managers and c-suite executives participate. There are multiple options to choose from when deciding to create a wellness program. Most are offered in partnership with an organization’s benefits provider, but agencies that specialize in developing and launching wellness programs are additional options for companies that want to create their own.

In addition to involving senior leadership, the start of a company wellness program should be communicated to all eligible employees through multiple channels, such as the company’s intranet and newsletter or a company-wide email.  Organizations should also set and publicize goals that they would like the program to accomplish. Progress throughout the duration of the wellness initiative should be measured as well.

With careful planning and execution, a wellness program can help organizations lower insurance costs, reduce absenteeism and help employees improve their overall physical and mental health. Here are a few suggestions for creating a healthier work culture at your company:

  1. Offer Financial Incentives: reward employees who opt into the wellness program by offering them benefits, such as lower insurance premiums and contributions to their flexible spending accounts.
  2. Survey Employees: to gauge the effectiveness of the wellness program, as well as track employee morale, organizations can gather updates from staff members via employee opinion surveys.
  3. Encourage Team Spirit: help employees get motivated to pursue healthier lifestyle choices by personalizing items that inspire exercise and good nutrition. For example, organizations can order water bottles and pedometers personalized with the company logo or names of staff members.
  4. Throw It Out: If your organization provides poor food options in vending machines, replace them with healthier choices, such as low-calorie or reduced-fat snacks.

For more information on creating a wellness program for your organization, please contact a member of CAI’s Advice and Counsel Team at 919-878-9222 or 336-668-7746.

Photo Source: Ben Sisto

N.C. Employers: How Do Your Healthcare Benefits and Costs Measure Up?

Tuesday, November 30th, 2010

On Nov. 15 CAI opened up our 6th annual N.C. Healthcare Benefits and Cost Survey.  Designed with our employee benefits partner, Hill, Chesson and Woody, this survey provides employers with the information that is critical to managing their employee benefits plan, allowing for a comparison of plan designs, premiums and cost-sharing arrangements with that of other N.C. companies.

The geographic focus is one of the things that makes this survey exceptional. It has more N.C.-based data than any other employer survey out there.  The 2009/2010 survey included data from 516 N.C. employers, and we anticipate that the 2010/2011 version will include more than 600 participants.

If you make decisions or are charged with gathering information about employee benefits for your organization, I highly encourage you to participate in this survey.  All survey participants will receive a free electronic report (early March 2011) and an invitation to an in-depth debriefing of the results.  The report and debriefing will help you and your organization:

  • Compare and benchmark your benefits plan with other N.C. employers with similar numbers of employees and/or by industry
  • Get access to the data you need to develop an effective employee benefits strategy
  • Learn how other employers are reacting to healthcare reform
  • Stay competitive in the labor market

Both traditional and consumer-driven health plans are covered in the survey.  Data is further filtered by number of eligible employees, industry and funding arrangement.  In addition to the yearly numbers, the survey addresses longer term trends and competitive practices within the market.

To take advantage of this opportunity to get critical information that will help you manage your employee benefits plan, please go to http://bit.ly/cai10survey.  For additional information or survey assistance, please contact our survey team at cai-survey-team@capital.org.  For one healthcare plan the survey requires as little as 20 minutes to complete.  The survey will close on Dec. 17.

Photo Source: CarbonNYC