Posts Tagged ‘Steve Byrd’

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.

Shifting Sands in the Small Group Market Under the Affordable Care Act

Thursday, April 24th, 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 april picMany questions have arisen from the ever changing Affordable Care Act (ACA), specifically amongst the small group employers. Many feel as though they have been left out in the cold with more questions than answers when it comes to the changing regulations.

“Should I renew early and what happens if I do? How do I handle the new small group age rates? How do I communicate the new benefit changes concerning, smoker rates, out-of-pocket maximums, age-rated premium schedules, metallic levels, pharmacy MAC pricing changes, pediatric dental/ vision changes, and deductible limit requirements?”

With new regulations published every week and a variety of health-care related bills moving through Congress every day, it is difficult for a large company much less a small employer, to keep up with the changes.

One bill recently passed through Congress and signed by the President (Protecting Access to Medicare Act of 2014)) is worthy of special attention by small employers. This bill, known as the “doc fix” bill, includes a section that ends the limitations on deductibles for small group employer-sponsored health plans that was previously imposed by the Affordable Care Act.

Prior to passage of this bill, deductible levels of no more than $2,000 for individuals and $4,000 for families were required in the small group market. This deductible cap made it extremely difficult for small group carriers to offer a wide range of plan designs within their small group plan offerings.

Small group carriers struggled to design plans that met the deductible requirements while also meeting the required Actuarial Value (AV) bands. The ACA requires small group carriers to offer plans at four specific AV levels (called Metallic Levels): Platinum (90%), Gold (80%), Silver (70%), and Bronze (60%). Deviations of no more than 2% are allowed. To operate within these Metallic Levels, many small group carriers made changes that resulted in higher per occurrence copays and increased costs for non-generic medications.

The passage of the Protecting Access to Medicare Act of 2014 allows carriers designing plans for the small group market to move beyond the $2,000/$4,000 deductible level and still meet the required Metallic Levels. It also allows small employers to remain creative in their plan designs, especially those that have focused benefits strategies around Consumer Driven Health Plans. To find out more about this recent change to the ACA, continue on to Robb Mandelbaum’s coverage on the “doc fix” bill.

Defining a Full-Time Employee

Tuesday, February 26th, 2013

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

HCW 2 26 2013Under the Patient Protection and Affordable Care Act (PPACA), employers with more than 50 full-time equivalent employees will have to provide affordable benefits to all full-time employees who work 30 or more hours a week by 2014. Failure to do so can result in an assessment of $2,000 per year for each full-time employee, excluding the first 30 full-time employees.

What exactly qualifies as a “full-time employee working 30 hours a week” under federal guidelines? While the IRS has issued Notices 2011-36 and 2011-73 that easily clarify the Employer Mandate for most cases, employees working variable hours present a special challenge.

 Variable Hour Employees

The IRS Notice 2012-58 says employers can determine plan eligibility for new and ongoing variable hour employees this way:

1) Choose an initial measurement period between three and 12 months to average employee work hours.

2) If a new variable-hour employee averages 30 or more hours per week during this initial measurement period, then you have 30 to 90 days to offer and enroll the individual on the medical plan.

3) For those working less than 30 hours on average, benefits do not need to be offered, but the position must be measured periodically for redetermination.

These regulations include other employer options with time frame selections for measuring which employees qualify as full-time ones.

Whatever criteria is chosen, employers with 50 or more full-time equivalent employees will need to closely and consistently track the various measurement periods. Those same companies with employees working less than 30 hours a week will need to reassess their procedures around these positions while staying within compliance of PPACA requirements starting in 2014 and monitoring whether the status of those employees need to be reclassified due to changing circumstances.

What Should Large Employers Do?

As it is expected that the majority of employers with 50 or more full-time employees will continue to offer benefits to recruit and retain top talent.  To stay competitive and in compliance with PPACA, you should:

1) Evaluate the level of benefits you are providing and see if they remain financially feasible.

2) Understand the new markets created by the healthcare exchanges.

3) Reorient your employees toward more prudent usage of your programs. 

4) Establish an effective and efficient system that avoids time-consuming paperwork to keep track of classifications.

The latter system can vary given your operation’s scope, number of employees and individuals who are involved in monitoring this item.

To learn how to set up processes that work best for measuring and following the qualifications for full-time employees, contact Hill, Chesson & Woody at info@hcwbenefits.com. Additionally, we have several healthcare reform webinars available on-demand on our website to assist you in understanding the provisions and how they impact employers.