Posts Tagged ‘healthcare reform’

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.


Change Is Inevitable in the Workplace—Are You Prepared?

Thursday, May 2nd, 2013

May 13 quote blog

Many changes are taking place in the business world. The full effects of healthcare reform will soon come to fruition, the competition for top talent still rages on with no plans for stopping, and your employees are looking for better ways to manage both their responsibilities at work and outside of it.

How will you handle the changes that you and your organization face? In order to continue to achieve success at your business, or even just to stay afloat, you must start by creating a plan to address your most pertinent issues.

Review the following articles for help handling the changes that you and other employers will likely see:

Changes in Healthcare Reform

Are you interested in knowing the top healthcare issues of 2013 and how they will affect employers? Our benefits partner, HCW Employee Benefit Services, put together an article highlighting this information. Check it out here:

Compete for Top Talent and Win

Many organizations are struggling to find high-performing talent to fill their open positions. If you aren’t finding the right candidates, you may want to review your hiring process. Finding an excellent employee isn’t something you can attain quickly. Just like other projects you work on, you must have a solid plan for securing top achievers. Here’s an article to help:

Dealing with Workplace Change             

Changes in the business world aren’t just affecting employers; they are also affecting your workforce. Understanding the concerns your employees may have about various workplace changes is important for growing your organization with a loyal team.  Review this article to gain strategies for helping your staff deal with company changes:

Employees Crave Work/Life Balance

Engaged employees help drive the business results that you want. They are productive team players who strive for excellence. Their work life is important, but so is the life they’ve established outside of your company. Help them manage both well. When you do, you’ll see a number of benefits. Read more about them here:

For additional advice or information for dealing with change at your workplace, please call a member of CAI’s Advice and Counsel Team at 919-878-9222 or 336-668-7746.

The Top 10 Healthcare Industry Issues Of 2013 – How They Will Affect Employers?

Tuesday, March 19th, 2013

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

healthcare_industry_issues This year it is crucial for employers to have a clear understanding of the timeline of each of the components in healthcare reform and a defined strategy around them. It is evident that, while there is change on the horizon, even more change will occur as employers, insurance carriers and members react to the new options and requirements at hand.

 As employers are considering these issues, PricewaterhouseCoopers has released its annual list of the top 10 issues for the healthcare industry, and the topics include a few items of particular importance for employers. This is the list, followed by the implications for employers:

 1)      States on the frontlines of the implementation of the Affordable Care Act (ACA). State officials will decide how to run insurance exchanges, whether to expand Medicaid coverage and what type of insurance market regulation is needed. The biggest challenge facing state governments over the next year is information technology, as most must conduct significant upgrades to existing systems.

 2)      Caring for the nation’s most vulnerable: Dual eligible. Dual eligibles (individuals eligible for both Medicare and Medicaid coverage) are among the nation’s sickest and poorest and often fall through the cracks of two programs not designed to work together. The result is a lack of coordination that often leads to poor quality, inefficiency and avoidable costs. With the ACA set to add 16 million people to Medicaid by 2019, the number of dual eligibles is certain to increase.

 3)      Bigger than benefits: Employers rethink their role in healthcare. Employers have never had a better opportunity to re-examine their long-term role in providing healthcare coverage for their employees. This year will likely be the turning point for how healthcare benefits evolve over the next decade.

 4)      Consumer revolution in health coverage. More Americans will be shopping for their health insurance. As a result, consumers want convenience in how they purchase coverage and transparency in comparing their options. Nearly 40 percent of consumers surveyed by PricewaterhouseCoopers’ Health Research Institute (HRI) said they would purchase insurance at a private insurance company retail store. Consequently, an increase in the use of retail clinics is expected as consumers seek lower cost options for minor ailments.

 5)      Consumer experience hits the pocketbooks of healthcare companies. The Medicare Advantage Star Quality rating system relies on consumer input to generate penalties and bonuses for hospitals and insurers. This could mean a bonus payout of more than $3 billion for insurers and a holdback of $850 million for providers in 2013 based on the impact of the results. Hospitals and health systems are feeling the pinch, as nearly a third of the federal government’s value payment program connects to consumer experience and satisfaction. Moreover, customers support the trend.

 6)      Goodbye cost reduction, hello transformation. With more than 40 percent of consumers postponing care because of costs, hospitals must be competitive. Organizations are making full-scale transformations of their care delivery models, including how and by whom care is delivered. To maintain high quality while implementing sustainable cost reductions, health systems are involving clinicians, staff and patients in redesigning the delivery of care.

 7)      The building blocks of population health management. Population health management shows promise for better health at a lower cost by creating an integrated system of care. Expect to see more partnerships between providers as companies build their population health infrastructure to include shared responsibility for patient outcomes and satisfaction, data collection and analysis, member education and engagement, and a focus on at-risk populations.

 8)      Bring your own device: Convenience at a cost. Only 46 percent of hospitals have a security strategy regulating the use of mobile devices. With more hospitals permitting clinicians to access electronic health records on their personal devices, privacy and security concerns need to be addressed.

 9)      Meeting the new expectations of pharma value. Interest is growing among insurers to partner with pharmaceutical companies to determine unmet medical needs, and improve medication adherence and clinical outcomes. In a recent HRI insurer survey, 43 percent of insurers agreed that they would benefit from a data sharing partnership with pharma companies.

 10)   Medtech industry braces for excise tax impact. The 2.3 percent excise tax on medical devices effective this year could prompt consolidation in a $308 billion global industry consisting mainly of small start-ups with lean product portfolios. Federal bank accounts stand to gain $29.1 billion over the next 10 years from this tax included in the ACA.

 HCW Viewpoint

 Since employers spend a considerable amount of money on healthcare coverage for their employees, health industry issues are of key interest. With the most impactful year regarding healthcare reform implementation quickly approaching, employers are even more eager for information. The decisions facing them are significant, and mistakes could prove costly. 

 Employers have been watching as states decided whether to have a state run exchange, state/federal partnership or a federal run exchange, and whether to implement the Medicaid expansion. For some employers, the Medicaid expansion would provide coverage to additional employees, lowering their possible play or pay penalties effective beginning in 2014. Additionally, employers are determining who they will be required to offer coverage to, whether their benefits are rich enough and whether they meet the affordability requirement. 

 Employers will need to make decisions regarding if they intend to offer coverage to employees in 2014 and beyond, or send their employees to the exchange and pay the penalty. More information regarding the exchanges is emerging, and there may be hundreds of plan designs offered among the four coverage levels. While sending employees to the exchange may sound like the cheapest and easiest option, doing the math generally supports continuing to offer coverage. HCW has developed a “Play or Pay Calculator” that can assist employers in making an objective decision regarding what is otherwise a subjective, reactive one.

 New delivery systems such as accountable care organizations and tiered networks can provide additional options for employers to provide appropriate, cost-effective care over the next few years. These should be part of the overall strategy regarding what actions to take in 2014 and beyond. Staying abreast of health industry issues is critical for employers as decisions are being made. Employers need a custom strategy that is updated with emerging information to allow them to successfully navigate healthcare reform.

 HCW will continue to track these issues throughout 2013, as well as additional emerging information regarding healthcare reform. HCW offers one-hour meetings to walk employers headquartered in North Carolina through a Reform Readiness Plan. To take advantage of this guidance, call 919-403-1986 today and schedule a meeting with on of our experts.

7 Takeaways from CAI’s 2012 Compensation and Benefits Conference

Thursday, September 6th, 2012

CAI hosted its annual Compensation and Benefits Conference on Tuesday, Aug. 28 and Wednesday, Aug. 29 at the McKimmon Center in Raleigh. More than 200 HR professionals and company leaders participated in the event that focused on trends and best practices in total rewards.

The conference featured presentations from a variety of professionals responsible for advising companies on their compensation and benefits strategy. Some notable presentations included CAI’s Director of HR Services, Molly Hegeman, detailing marketplace trends for salaries and benefits in North Carolina, and Peter Marathas, Partner in the Employee Benefits & Executive Compensation Group, who imparted the audience with tips to handle the recent changes in health care.

Other topics covered at the conference included flexible scheduling, health care management, mistakes related to wage and hour law, and multi-generational retirement planning. Below are some key takeaways from last week’s conference:

  1. Marketplace trends show an increase in consumer-driven health plan options (CDHP), well-being programs, and companies giving employees financial education and advice. These trends show a decrease in 401K matching, salary budget, promotions, teleworking and recognition programs.
  2. Employee time off costs are virtually equal to health care costs, and time off is one of the highest valued benefits to employees, second only to pay.
  3. Top 5 Wage-Hour mistakes include considering salaried employees exempt, averaging work hours, errors in recording work schedule, believing child labor laws aren’t applicable to your own child, and thinking any person may be an independent contractor.
  4. Chronic diseases make up 75 percent of national medical costs, and 80 percent of chronic conditions are modifiable or preventable. National data supports that effective wellness programs improved employee health and impact overall healthcare costs.
  5. A survey from AonHewitt revealed that health benefits satisfaction is declining, more than half of employees do not know how their pay is determined, most employees don’t understand the value of their pension plans, and 80 percent of respondents fear that they will not have enough money in retirement.
  6. According to CAI’s 2012 Wage & Salary Survey, NC companies project to increase employee salaries by 2.9 to 3.6 percent for 2012. Percentage of companies giving performance-based merit increases is 81.2 percent and those giving general increases in 36.2 percent.
  7. Companies that don’t manage total rewards effectively are missing valuable input from their employees, leading to lower engagement and higher turnover; missing opportunities to manage total rewards as a portfolio, which may lead to higher costs and lower effectiveness; and introducing unnecessary risk into their total rewards approach.

CAI holds four conferences each year. The Triad Employment Law Update is CAI’s next conference and will take place at the Koury Center in Greensboro on Wednesday, Nov. 7, 2012. For more information related to CAI’s conferences, please check out CAI’s conference page.

The Calm Before the Storm: Surviving the Impending Supreme Court Decision on Healthcare Reform

Tuesday, June 19th, 2012

The post below is a guest blog from Lindsey Surratt who serves as the Compliance Officer for CAI’s employee benefits partner, HCW Employee Benefit Services.

The United States Supreme Court is on the verge of issuing an opinion on the Patient Protection and Affordable Care Act.  The forecast is somewhat unpredictable, but the Court’s ruling can be narrowed down to a few possible outcomes.  The Court could take an “all-or-nothing” approach and either uphold or strike down the entire law.  Or, the Court could eliminate the Individual Mandate and allow the remainder of the law to stand.  The Court could also strike down other provisions in addition to the Individual Mandate, such as the prohibition on pre-existing conditions and community rating.

The tone of oral arguments and questions asked by the Justices, including Chief Justice John Roberts and Justice Anthony Kennedy (likely the swing votes in this case), seem to indicate that the Individual Mandate will not survive.  But, predictions based on questioning in oral arguments have been an unreliable indicator of past Supreme Court decisions.

The arrival of the Court’s decision, much like a hurricane, is inevitable.  However, the preparation of carriers and employers thus far, as well as the response from carriers, employers, individual voters and State and federal governments, will shape the future of healthcare reform in the aftermath of the Court’s decision. The opinions of industry experts and legal scholars run the gamut from pandemonium to uneventful.

Dr. Bruce Vladeck, former Director of Medicare and Medicaid under President Clinton, predicts a decision overturning part or all of the law will result in “chaos” and an increase in the number of deaths among the uninsured population.  Other experts, including Gail Wilensky, Director of Medicare and Medicaid under President George H.W. Bush, predict a much more tempered result with reforms taking place at a slower pace.  Some reforms will continue regardless of the Court’s decision, with UnitedHealthcare, Aetna and Humana announcing voluntary extensions of certain insurance benefits regardless of the Court’s opinion.

Whether the Court’s decision wipes out the entire law or leaves pillars of it standing, state and federal legislators will continue to rebuild various aspects of the healthcare system in the United States.  There is no doubt that healthcare reform will emerge again as a pivotal issue in the 2012 Presidential Election.   What proactive steps can employers take to survive the upcoming Supreme Court decision outside of legislative and regulatory mandates?  Just as healthcare reform continues to evolve, so should an employer’s benefit strategies.

Implementing or expanding wellness program offerings, thoughtful evaluation of contribution strategies that incentivize employee involvement in healthcare delivery choices, consideration of alternate funding options, and increasing benefits education opportunities for employees will help employers weather the storm.  Although the regulatory landscape of healthcare reform will continue to change, the ultimate goals of increased efficiency, improved outcomes, and cost containment will remain the same.

By engaging in thoughtful benefit strategy choices, employers have the power to generate change in the healthcare market, even in the face of turbulent legal and legislative action.

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?

Don’t Make These 4 Common Mistakes When Filling Out an I-9

Tuesday, March 27th, 2012

The I-9 form can be a tricky document for employers. The government has created specific rules that must be followed when completing the deceivingly simple document. Your organization may be penalized and fined if the regulating agency discovers incorrect information or mistakes in your employees’ I-9 forms. To stay compliant with state and federal regulations, avoid these common I-9 mistakes:

1.  Does Everyone Have an I-9 Form on File?

Your organization should have a correctly completed I-9 form for every employee. Making sure that you do is important to stay in compliance. If the U.S. Immigration and Customs Enforcement (ICE) agency conducts an audit or investigation and learns that you’re missing forms for any of your employees, you will most likely be fined.

2.  Missing and Misplaced Information

Missing and misplaced information are mistakes that can easily be avoided if you and your employees spend adequate time filling out the documents and reviewing for errors. Here are some examples of information that is frequently misplaced or left out: wrong date, no signatures and information in incorrect boxes.

3.  Not Following the Three-Day Rule

You are required to complete a new hire’s I-9 form within three days of his first day of paid work. After an applicant has been offered and has accepted the job, ensure the new employee is aware of the types of acceptable identifying documents they may choose to provide to accurately fill out their I-9 forms. Helping your employees prepare for their first day of work will help you steer clear of potential fines.

4.  Incorrect Corrections

If there is incorrect information on an I-9 form, do not use a marker to cross out the information. Using white out is another mistake that employers often make when trying to correct information. Failing to initial and date corrections will also make an employee’s I-9 form erroneous. If these mistakes are made and the document lacks clarity or is not easy to follow, filling out a new form is appropriate. Make sure the original document is attached to the new one. Never backdate changes.

For more information on staying compliant with state and federal regulations, please join us on May 2nd and 3rd at the McKimmon Center in Raleigh for the 2012 Employment and Labor Law Update. The conference will feature experienced lawyers from Ogletree Deakins who will update you on the most recent regulatory and legal changes affecting employers. Some of the topics they’ll discuss include the ADAAA, Workers’ Compensation and Healthcare Reform. You can register for the event and see the additional topics here:

Photo Source: Victor1558

Healthcare Reform Likely to Encourage Employers to Consider Self Funding

Tuesday, December 20th, 2011

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

Provisions of the Patient Protection and Affordable Care Act (PPACA) are causing shifts in the marketplace on all sides of the issue. Insurance carriers, employers, providers and consumers are each reacting to the government’s regulations that are designed to get everyone insured, control costs and improve health outcomes.

Three specific provisions of reform — medical loss ratio, the modified community rating and guaranteed issue of medical plans — will encourage organizations to consider a move away from fully insured funding to self insurance. Currently, only 13 percent of organizations with less than 100 employees fund their employee health plans in a self funded manner.

Because healthcare reform is reducing competition in the market place, an environment of rising healthcare costs is being fostered. Since reinsurance carriers are not bound by loss ratios or modified community ratings, employers with healthy employee demographics that shift from a fully insured medical plan to a self funded plan potentially will be able to improve their cost position and have more plan design flexibility.

Based on the current PPACA regulations, we believe more small employers will explore self funding as an option. Taking into consideration your organization’s demographics, risk tolerance and goals for self funding is a necessary step that will ultimately determine if this type of funding is a viable option to stem the tide of healthcare reform.

For more information or to discuss your organization’s funding type, please call Hill, Chesson & Woody at (919) 403-1986.

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.

Take Note of Regulations Requiring Free Preventive Care

Tuesday, September 28th, 2010

Effective Sept. 23, new private health plans must provide recommended preventive care services without cost-sharing such as co-pays or deductibles. The U.S. Departments of Health and Human Services, Labor and the Treasury jointly issued these regulations in July.

The new regulations put covered services into four groups:

  • Recommendations made by the U.S. Preventive Services Task Force with a grade of “A” or “B.” Here is a list of the “A” and “B” graded services.
  • Recommendations of the Advisory Committee on Immunization Practices that have been adopted by the Centers for Disease Control and Prevention. That list can be found here.
  • Recommendations by the Health Resources and Services Administration for preventive care and screenings for children.
  • Recommendations by the Health Resources and Services Administration for preventive care and screenings for women.

People who keep their existing individual or group plans will not be entitled to the free services unless the plans make substantive changes from Sept. 23 onward. More about its effects on “grandfathered” plans can be found at

More details on the regulations can be found at For additional information, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo Source: U.S. Department of Defense