Assure Elite: Small Employers' New Favorite Healthcare Program

Employers of multi-generational employees often fret about the delicate and difficult balance of offering health coverage. The typical generalization is that younger employees tend to cost less to insure, while older employees cost more. The truth is, not every young employee is going to require less health coverage because they are presumed to be young and healthy. Likewise, not all older employees are going to cost an arm and a leg to insure. With each employer comes unique employees, and therefore, there is a need to have options to benefit and reward small employers and their employees alike – enter the Assure Elite program. In this installment of CenterStage, Tonya Bahr, a Benefits Advisor at Hierl Insurance, has highlighted the game-changing aspects of this unique healthcare program.

What Exactly is Assure Elite?

Assure Elite is a small employer focused healthcare program aimed at offering the best options for small employers who want to take control of their healthcare spending. “As a partnership between Hierl Insurance, Network Health and Agnesian Healthcare (SSM Health), employers can have peace of mind knowing their healthcare options are backed by three local companies who know healthcare expenses are out of hand in our community,” explained Tonya. Through this partnership, Hierl creates unique plan designs with deep discounts reflected in the premium costs, placing money back in the pockets of employers and employees. 

What sets Assure Elite apart is actualization, not generalization. Among other issues facing the modern healthcare scene, age of employees plays a large factor in coverage pricing. The tendency is to believe older employees will cost an employer more to insure due to a greater prone to injury, sickness and other ailments. On the other hand, younger employees are in better shape and theoretically removed from any costly health issues.

However, not always is this the case. By working with a partnership established around the goal of providing the most cost-effective and honest coverage for small employers, Assure Elite bases pricing on the overall health of the employee. Taking age out of the equation and replacing it with health ensures the proper coverage is received.

How Does the Program Work?

Assure Elite is a level-funded program, meaning premium is based on actual healthcare utilization rather than age. Healthier overall groups will pay less than a group who is unhealthy (or high users of healthcare). Being a level funded program, Assure Elite is a hybrid between a traditional, fully-insured medical plan and a partially self-funded plan. With a fully-insured plan, employers are paying a fixed monthly premium for coverage, meaning the amount only fluctuates when the number of employees on the plan changes. Often, employers are unaware they are overpaying in premium due to claims paid out by the insurance carrier are less than the premium paid in by the employer. With a partially self-funded plan, an employer still faces fixed costs, (much lower than a fully-insured plan), but also pays for medical claims as the employees incur expenses. Therefore, groups don’t overpay like they do on fully-insured plans because the cost of the claim is what the group’s actual expense is. Cash flow fluctuation can arise from this, and many smaller employers do not prefer this risk. A level funded plan like Assure Elite offers the best of both worlds: providing the fixed monthly premium costs of a fully-insured plan, but at the end of the year, offering the employer 50% of the balance back if the amount paid in is less than the amount paid out by the carrier. Many different options are available to choose from; both EPO and POS, as well as traditional and HDHPs. Employers can dual choice up to 4 plan options. Adherence generic prescriptions are $0 copay and office visits are only $10. Low cost, convenient virtual visits are available, as well. All plan options come with a wellness component offered through Agnesian’s Know & Go program, which includes health risk assessment questionnaires, biometric screenings, coaching, and an employee portal with educational materials, food and exercise trackers, online workshops, a blog, a mobile site and more – all at no additional charge.

How Do I Go About Getting a Quote?

The application process is completely pain-free. Base rates for Assure Elite are released after a current census statement, billing statement and wage and tax statement are received. Employers wishing to move forward with the process would go through medical underwriting to obtain final rates. This includes the completion of a three-page application covering basic demographic information and a brief medical questionnaire. Some groups choose to go through underwriting immediately rather than receiving base rates first, but each decision is unique to each employer. Despite remaining largely competitive for groups having 2 to 49 employees, discounts are still acquirable for group sizes up to 100.

To begin your journey toward optimal employee healthcare coverage, speak with Tonya at Hierl Insurance, Inc. With a passion for educating employees who may not understand their insurance, misuse their coverage and spend more than they need, Tonya is ready to assist in discovering cost-effective care without any missteps. You can reach her at 920.921.5921 or at tbahr@hierl.com.


Retirement ABCs: How employers can help baby boomers prepare

Sixty-six percent of baby boomers are working past the traditional retirement age. There are specific rules and regulations regarding contributions and withdrawals in retirement. Continue reading to learn how employers can help prepare their employers for retirement.


Seventy-four million: That’s the estimated number of baby boomers, according to the U.S. Census Bureau. And 66% of baby boomers are working past traditional retirement ages for a variety of reasons. Some feel they can’t afford to retire, particularly with the looming high costs of healthcare; others may choose to work longer to keep their brains active or because they fear the adjustment to a less structured lifestyle.

Older workers approaching full retirement age (which varies, depending on when they were born) where they can begin receiving 100% of Social Security, face some daunting decisions about Medicare, Social Security and retirement plans such as health savings accounts and 401(k)s — unchartered territory until this point in their lives. There are specific rules about contributions and withdrawals in retirement, and employers should help with the education process. Here are three ways to do so.

Break down the HSA rules from a retiree perspective. If you offer HSAs to your employees, it’s important they understand how HSAs work with Medicare: The IRS dictates that a person can’t contribute to an HSA if they’re enrolled in part of Medicare (Part A, Part D, etc.) However, they can draw on funds already in the account to pay for qualified medical expenses and premiums for Medicare Parts B, C and D (but generally not Medicare supplement plans or Medigap insurance premiums).

Importantly, your employees may be penalized for delaying Medicare, depending on the number of employees you have and whether you have group health insurance. These requirements may not be well known by your employees and should be communicated clearly.

Of course, because Medicare, Social Security and any retirement plans involve several layers of government rules and financial regulations, there are some tricky issues your employees need to know about. One is retirement “back pay.”

When employees sign up for Social Security at least six months beyond the full retirement age, they’ll receive six months of retirement benefit back pay. This is problematic if your employees contributed to their HSAs over the previous six months — they are liable for tax penalties on HSAs. Create an education strategy that includes this information for employees looking to retire, so that they can stop contributing to their HSA six months before retirement and avoid costly mistakes.

Help employees understand how all their benefits work together. Your employees have contributed their knowledge and skills to you; it’s important to help them understand their options as they work toward retirement. For those just a few years out from retirement, your education plan may include helping employees understand eligibility requirements for both Social Security and Medicare, as well as any penalties that might arise from applying late to Medicare.

As your employees age, they are also eligible to contribute “catch-up” funds to HSAs, IRAs and 401(k)s in preparation for retirement. Your 401(k) partners and financial wellness resources can help employees assess their financial situations and prepare for retirement. For example, it’s a good idea to encourage employees who may have multiple 401(k) plans to consolidate them into one — this will make it easier to manage when they retire. They may ultimately roll these into an IRA to access additional investment options.

Maintain a focus on wellness. If you have a wellness program in place, take measures to boost participation and steer employees, especially older participants, toward healthy habits to help them live well and be productive leading up to retirement.

Wellness may extend outside of physical, emotional and mental wellness to professional development. Help them improve their retirement outlook by keeping job skills up to date so they are better prepared if they need to take on other employment to supplement their retirement.

For anyone nearing retirement age it’s a good idea to become acquainted with “Medicare and You,” the government’s official Medicare handbook. While each employee’s situation will differ, there’s no doubt that planning and education are key to a successful retirement strategy and, as an employer, you can support these efforts.

SOURCE: Metzger, L (14 August 2018) "Retirement ABCs: How employers can help baby boomers prepare" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/how-to-best-educate-baby-boomer-workers-on-retirement


10 Things You Didn’t Know About Life Insurance

Did you know that there are different kinds of life insurance? Many people don’t know much about life insurance. Continue reading to learn more.


Life insurance blah blah blah. Is that what you hear when someone mentions it as part of your new job’s employee benefits round-up or when you see something about it on TV or social media?  Not to worry: we’ve got the low-down on what you need to know. And it’s really not as overwhelming (or underwhelming) as you might think.

1. It’s part of a sound financial plan. You know about savings, you know about retirement. You might know a bit about investments and long-term financial planning for your health and happiness. And life insurance helps with planning for your loved ones’ long-term health and happiness, especially those who depend on your income, in case something were to happen to you.

2. There are different kinds of life insurance. In addition to employment-based life insurance (which typically only lasts as long as your employment at your job), there’s term and permanent life insurance.

Term life insurance: You typically pay lower premiums for term life insurance, but your coverage is just for a specified amount of time, say 20 years, for example. At the end of the term, your insurance coverage ends.

Permanent life insurance: With permanent life insurance (whole, universal, variable) you typically pay higher premiums in the short term, but then these policies generally allow you to accumulate cash value over time. Your coverage is designed to last as long as you continue to pay premiums.

3. Life insurance is surprisingly affordable for most people. Sure, there are forms of life insurance that get pricier the more features you add on to it, and the price goes up if you’re a smoker or dealing with health problems. But most people think life insurance costs about three times as much as it really does, according to the Insurance Barometer Study by Life Happens and LIMRA. Just as a general guide, a healthy nonsmoking 30-year-old man can get a $250,000 20-year level term policy for about $16 a month.

4. Key life events are often the best time to get on board. Getting married? Having kids? Changing jobs? Bought a house? Significant life events are often the time you become most aware of the need for life insurance—and on that note…

5. You can change your life insurance. Perhaps you have a life insurance policy that your parents got for you when you were a baby. Perhaps you have a term policy from when you bought your house but now you have a bigger family and you’re concerned about getting them all through college. Or perhaps you want to bump up your coverage because your overall cost of living has changed. And on *that* note …

6. You may well need more coverage than you think. Sometimes people think life insurance is to pay off their own debts and funeral expenses. But a key advantage of having life insurance is to ensure that the people who depend on you will be OK with their ongoing and future financial needs if something happens to you. Need help figuring this out how much? Go to this online calculator: www.lifehappens.org/howmuch.

7. Life insurance pays out quickly. Because life insurance doesn’t get tangled up in estate claims, it generally pays out quickly, sometimes in days or weeks, usually inside of a month.

8. Life insurance proceeds are generally tax-free. Compare this to, say, crowdfunding options like “GoFundMe” that have become so popular yet create tax consequences for the people they’re meant to help (to say nothing of fees and the lack of guaranteed benefit). It’s also helpful when you’re trying to create an inheritance for a beneficiary.

9. Life insurance protects your family, but only if you let it. Keep your premiums paid up and your beneficiaries up to date, and the door with your agent open so that your loved ones know who to call if they need to. Keep your paperwork with your other vital documents.

10. Life insurance can be more than just life insurance. Using “riders,” or an addendum to a life insurance contract, or even a specific kind of policy, life insurance benefits can become “living benefits,” money you can access before you die, or use to pay for long-term care, as two examples.

If you still need help getting a handle on all this, talk to an agent. They can help you understand the ins and outs and the best policy for your budget and needs. Because of course—the most important thing to know about life insurance is that it’s there to help the people you love the most.

SOURCE: Mosher, H. (29 June 2018) "10 things you didn’t know about life insurance" (Web Blog Post). Retrieved from https://www.lifehappens.org/blog/10-things-you-didnt-know-about-life-insurance/


Bringing personal services to work

Are you looking to incorporate onsite benefits in your employee benefits package? Read this blog post from SHRM to learn more about the different onsite benefits employers are offering.


Onsite employee benefits that go beyond big-ticket items like health clinics, gyms and child care centers are now within the reach of many employers.

When Cassandra Lammers, vice president of total rewards at Audible Inc., a publisher of audio books in Newark, N.J., wanted to encourage employees to schedule regular dental visits, she focused on the large percentage of the firm's employees who are part of the Millennial generation. These younger workers tended not to use their dental benefits, claims records showed.

To address the situation, Lammers began researching mobile dental services, looking for a vendor that would provide dental care onsite during the workday. That was not as easy as it sounded. "Most of these services are designed to help the elderly and the disabled who are not able to get to a dentist's office," she noted.

See also: 15 employee benefits on the rise

After many months of looking, Lammers connected with Henry the Dentist, a mobile dental office that parks its trailer at an employer's location for a few days to provide onsite dental services. The trailer offers state-of-the-art dental services and can serve three patients at a time.

The biggest selling points for Audible were the convenience for employees and the fact that all of the dentists were in-network providers for the company's dental plan, so audible does not have to pay for the service.

"We now schedule a few days each quarter to help employees get into a normal cycle for dental visits," Lammers said. The initial visit was scheduled to last only two or three days. However, employee demand for appointments was so great that the visit lasted six full days to serve 189 employees. Lammers expects to schedule five days per quarter going forward.

"The feedback from employees has been fantastic, and they love the convenience," she said.

Alexandria Ketcheson, marketing and brand director at Henry, said that under the company's current employment model "all our dentists are full-time employees of Henry," and that "a large part of our promise to our corporate clients is that their employees will see the same medical staff during every visit."

Fill'er Up

Onsite benefit programs should be designed to save employees time and to make their lives easier. Miami-based Carnival Cruise Line offers a range of onsite benefits to accomplish just that, including dry cleaning, a coffee shop and deliveries from a flower vendor every Friday so that employees can buy fresh flowers for the weekend.

"This is all part of our effort to be an employer of choice," said Tami Blanco, the company's vice president of shoreside human resources. "We focus on providing services that employees use or need regularly. Employees want to spend their time off with family, not running errands."

One of the more popular onsite benefits is access to Neighborhood Fuel, a service that comes to Carnival Cruise employees in South Florida and fills up their gas tanks in the parking lot while they are working.

See also: The Changing Landscape of Employee Benefits

By using a smartphone app, employees can request a fill-up, leaving the gas cap door ajar on their cars. Once the fuel truck completes the fill-up, the app sends an alert with the total cost of the gas.

So far, half of Carnival Cruise's Miami-based employees have signed up to use the service, and 75 percent of those employees say it is of great value to them, Blanco said.

Beware Upselling

When an employer offers any onsite benefit to employees, it comes with an implicit endorsement of the vendor's services, so it's important for employers to proceed with caution when choosing those vendors.

Carnival Cruise Line, for example, often offers new services to one group of employees as a pilot project to see if it is something the company wants to offer to all employees.

Before offering onsite dental care, Lammers not only read the reviews of the dental providers working for Henry the Dentist but also asked pointed questions about how the service ensures the safety of employees while they are walking to and from the mobile facility and while they are inside receiving treatment. "We also wanted to understand how they operate [and] how they interface with employees, ensure confidentiality, et cetera," said Lammers, who inspected the mobile dental facility personally.

See also: How millennials are shaping employee benefits

Once employees begin using any onsite service, employers should check in periodically to make sure employees are happy with the service and comfortable using it. For example, if employees feel a vendor is putting pressure on them to buy more or to upgrade, that's something an employer may want to address directly with the vendor so that employees don't feel pressured.

SOURCE: Sammer, J (5 July 2018) “Bringing personal services to work” (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/bringing-personal-services-to-work.aspx


15 employee benefits on the rise

Retirement plans and employer-sponsored health insurance are two vital employee benefits, but there are numerous others that are on the rise. Continue reading to learn more.


Employer-sponsored health insurance and retirement plans are always a vital part of the employee benefits conversation. But a number of other benefits — think wellness and perks that promote work-life balance — are becoming table stakes as employers look to attract and retain talent in a tightened labor market. Here are 15 of the employee benefits that are on the rise, according to the Society for Human Resource Management’s recently released annual benefits survey.

Health savings accounts

Health savings accounts continue to rise in popularity. The number of employers offering HSAs — which offer triple tax benefits for employees — rose just one percentage point from 2017 to 2018 (from 55% to 56%), but has increased by 11% in the last five years.

Paid parental leave

The availability of paid parental leave increased significantly between 2016 and 2018 for every type of parental leave, according to SHRM. Paid maternity leave increased from 26% in 2016 to 35% in 2018, and paid paternity increased from 21% to 29%. Meanwhile, adoption (20% to 28%), foster child (13% to 21%) and surrogacy (6% to 12%) leave also increased in the last two years.

A number of large employers have added or enhanced paid parental leave programs in the last year. Dollar GeneralTD Bank and Unum are among the companies that added parental leave benefits for employees, while IBMTIAA and Walmart are among those that expanded their programs.

Company-organized fitness competitions/challenges

The last year has seen a substantial uptick in employers targeting employee wellness through company-organized fitness competitions and challenges. The percentage of employers offering the perk increased from 28% in 2017 to 38% in 2018.

Standing desks

Standing desks are one of the fastest-growing employee benefits: The percentage of employers offering standing desks to workers increased from 20% in 2014 to 53% in 2018. In the last year alone, the benefit increased 8 percentage points.

Research indicates long hours of sitting are linked to obesity, diabetes, heart disease and cancer, so employers are looking for benefits to help combat the problem.

Critical illness insurance

One in four employers now offer critical illness insurance to their employees, according to SHRM. That’s an 8% increase from 2017 and a 10% increase from 2014. As healthcare costs continue to mount for both employers and employees, voluntary benefits offer workers some additional protections for financial emergencies at a low cost, benefit experts say.

Telecommuting

Flexible working benefits, such as telecommuting, flextime and compressed workweeks, encourage work-life balance and can result in higher productivity and more engaged employees, SHRM reports. That’s likely the reason that more than two-thirds (70%) of organizations offer some type of telecommuting, either on a full-time, part-time or ad-hoc basis, up from 62% last year and 59% in 2014.

CPR/first aid training

A growing number of employers are getting serious about safety: The prevalence of CPR/first aid training increased 7 percentage points (47% to 54%) in the past year.

Acupressure/acupuncture medical coverage

Nearly half of employers (47%) now provide acupressure/acupuncture medical coverage, according to SHRM. The benefit experienced significant growth over just the last year: 38% of employers offered the coverage in 2017.

Onsite stress management programs

A growing number of employees report they are stressed out — and the effects are showing at work. So employers are increasingly taking action. The number of employers offering workplace stress management programs is on the rise, with 12% of companies offering these programs. That’s up from 7% last year, and just 3% in 2014.

Lactation rooms

More employers are offering benefits that help new mothers adjust to getting back to work after having a baby. Nearly half (49%) of organizations now offer onsite lactation rooms, according to SHRM, up seven percentage points since 2017 and almost doubling since 2014 (28%).

Casual dress benefits

Dressing down is going up: More employers are embracing casual dress benefits, according to SHRM statistics. The most common practice is to allow employees to “dress down” one day per week, up six percentage points since 2014 (to 62%) and three percentage points since 2017. Half of employers say they allow casual dress every day, up six percentage points since 2017 and 18 percentage points since 2014. And about one-third (34%) of organizations offer the perk on a seasonal basis, up seven percentage points since 2017 and 15 percentage points since 2014.

Service anniversary awards

The percentage of employers offering service anniversary awards, the most common type of compensation benefit, rose by nine percentage points — to 63% — since 2017, SHRM reports.

Spot bonuses

Nearly half (48%) of employers told SHRM they offer employees spot bonuses/awards. That’s a 3% increase from 2017 and a 7% increase since 2014. A number of employers, including Comerica BankHostessLowe’s and McCormick, have announced bonuses for employees in the last six months as a result of financial savings from the GOP tax law.

Life insurance

Company-paid group life insurance is offered by 85% of organizations, and 80% of organizations offer supplemental life insurance for employees, a four-percentage-point increase from 2017, SHRM reports. A substantial increase was seen for life insurance for dependents with more than two-thirds of organizations (70%) offering this benefit in 2018, an increase of 13 percentage points since 2017 and 16 percentage points since 2014.

Paid time off to volunteer

An increasing number of employees are interested in volunteer opportunities — and employers are listening. SHRM reports that 24% of employers now offer employees paid time off to volunteer, up from 22% in 2017 and 16% in 2014.
SOURCE: Mayer, K (6 August 2018) "15 employee benefits on the rise" (Web Blog Post). Retrieved from https://www.benefitnews.com/slideshow/telecommuting-life-insurance-trending-employee-benefits

How to motivate millennials to participate in retirement savings

Millennials make up a third of today’s workforce, but according to The National Institute on Retirement Security, not even half of millennials that are offered retirement plans participate in them. Continue reading to learn more.


Millennials comprise one-third of the U.S. labor force, making them the single-largest generation at work today, according to Pew Research Center. But they don’t appear to be functioning as full-fledged members of the workforce just yet — at least when it comes to participating in benefit plans.

The National Institute on Retirement Security found that two-thirds of millennials work for employers that offer retirement plans, but only about half of that group participates. That means just one-third of working millennials are saving for retirement through employer-sponsored plans.

The culprit for such low participation originates primarily with eligibility requirements. Millennials are more prone to disqualifying factors like minimum hours worked or time with the company — products of being relative newcomers to the workplace and spending the early parts of the careers in a deeply challenging labor market. The passage of time will hopefully help relax these eligibility limitations.

But there are other headwinds bearing down on millennials that could be holding them back from plan participation, and which present an opportunity for plan sponsors to demonstrate value to the largest working generation. For one thing, millennials have earned the most college degrees as a share of their generation, according to the Center for Retirement Research at Boston College, all while tuition costs have continued to outpace inflation. The resulting financial burden is compounded by the fact that millennials are earning less so far in their careers, despite their education gains, than older generations were earning at their age.

It’s important for sponsors to figure out how to enroll more millennials, and not just because it will generate goodwill. Boomers will continue to roll assets out of their plan accounts as they retire. The flight of their outsized share of plan assets will leave a smaller pool to share plan costs. Increased millennial engagement can offset this drawdown.

Plan design that gives due consideration to the rise of millennials should consider how to help with their financial needs and play to their strengths.

Harness millennial tech savvy

Growing up immersed in an electronic and interconnected environment reduces the learning curve that millennials might face in using planning tools. Simple offerings like a loan payment calculator or retirement savings projection interface can make a profound difference on the path to financial preparation.

The flipside to millennials’ willingness to tinker is that they tend to over-scrutinize their investment mix. TIAA found that millennials are three times as likely as boomers to change their investment allocation amid a market downturn — typically a decision that ends in regret. The compulsion to de-risk tends to strike after the worst of the damage is done, leaving investors ill-prepared for the ensuing recovery.

Solutions like target-date funds can remove the need to think about allocations altogether, so millennials can focus on more effective factors like retirement savings or loan repayment rates and stretching for their full matching contributions.

Provide an education benefit umbrella

Compound interest — the accelerant that makes saving and investing for retirement over several decades so effective — works in a similar way against borrowers that are slow to repay their loans. This is an acute problem for millennials, but it doesn’t stop with them. Almost three-fifths of 22 to 44-year-olds have student debt, and they’re joined by more than one-fifth of those over 45-years-old.

Employer-sponsored student loan repayment assistance can take a variety of forms. It can be as simple as directing participants to enroll for dedicated loan payments, and can extend all the way to helping them refinance at a better rate or consolidate multiple loans.

The education benefit umbrella can also cover tuition reimbursement programs for employees that want to continue their education but are hesitant to spend the money. These programs can also serve employee retention goals as they’re typically offered with a payback period if workers leave shortly after being reimbursed.

Any program that lowers employee financial stress will likely help improve productivity. From a practical standpoint, workers have more disposable income — and feel wealthier — once they’ve vanquished their loans.

Being an advocate in helping employees accomplish that goal has obvious benefits for organizations that are seeking to retain members of the country’s largest working generation.

SOURCE: Zito, A (9 August 2018) "How to motivate millennials to participate in retirement savings" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/motivating-millennials-to-participate-in-retirement-savings


One sure-fire way to engage employees in voluntary benefits

Employers are trying to help employees by offering voluntary benefits. Continue reading to learn how to engage employees in voluntary benefits.


Whether your employees are 22 or 62, they need to plan for the unexpected. A sudden injury or illness can dramatically derail their financial well-being and retirement readiness. As the responsibility for healthcare costs shifts to employees, employers are taking steps to help their employees by offering voluntary benefits, like critical illness and accident insurance.

The hitch, however, is that many employees aren’t taking advantage of these benefits.

There are many reasons for this: Employees may not have much appetite for voluntary insurance benefits after choosing medical benefits. They may not understand what’s being offered or how it is relevant to their lives. Further, if they haven’t been close to someone who has dealt with a catastrophic health issue, they may not grasp how destabilizing that is and how voluntary benefits can help at a difficult time.

So how do employers keep employees from hitting the snooze button on voluntary insurance benefits, and wake them up to how these benefits can help with their overall financial wellbeing?

One way is to understand what employees might need given their life stage, family situation or other variables. To help employees sort this out, here are few scenarios of how voluntary benefits could help employees — with fictional people based on a combination of our experiences with customers.

Leaving nothing to chance

Scott tends to be a worrier. His friends joke that he’s a 45-year-old man in a 25-year-old body. He is in the “adulting” stage of life — getting settled in a career, figuring out his personal life, and living on a salary that’s just a few steps up from entry-level. Scott worries about what might happen if he gets sick or injured and can’t meet his portion of his high-deductible plan. He’s also open about the fact that he doesn’t want to move back in with his parents. Unlike most of his friends, he’s also thinking decades ahead and is already contributing to a 401(k).

Scott wants it all — financial protection now and for the future. Based on what he’s seen happen to friends and colleagues close to his age, he chose critical care and accident insurance coverage during benefits enrollment at work. These options will help cover unexpected costs if an unexpected covered event does happen, and the cost won’t take a big chunk out of his paycheck thanks to his employer’s group rate. What’s more, the benefit is tax-free if he ever needs to use it, and can help keep him independent, and out of his parents’ house.

For employers, these kinds of benefits can help mitigate employees’ financial stressors so they can focus on wellness and getting back to work if an unexpected health issue strikes.

Weekend warriors and thrill-seeking hobbies

Catherine is a marketing manager who is married with two children. She is 44 and in the “balancing” stage of life, between “adulting” and “planning.” Her main concern when looking at voluntary insurance benefits was her husband, who likes high-thrill, risky sports. While Catherine tends to shy away from motorcycles and extreme sports, she is a bit of a weekend warrior since it’s hard to find time to exercise during the week. Her kids are also active and perpetually on the go, whether playing sports or just running around with the neighborhood kids.

Once Catherine learned about voluntary benefits, it was a no-brainer to choose accident insurance for her entire family. While she hopes that her family will only have fun — and avoid injury — doing what they all enjoy, she knows they have to be prepared for anything.

Employers can help employees choose the right benefits by encouraging them to think about how they and their families spend their leisure time, including sports, hobbies, adventure travel or any other activities.

Taking account of a family history of cancer

Meet Justin. He’s 55, married, and has a daughter. He is at the “planning” stage of life — following “adulting” and “balancing.” While Justin is healthy, his family history of cancer is a concern when he considers his future. He’s seen family, friends and colleagues struggle with the costs of a serious illness. He also is acutely aware of saving enough for retirement as he has only 10-15 more years in the workplace, during which he can save.

For Justin, his life stage, family history of cancer and concern for his family’s physical and financial well-being led to his purchasing decisions. To help mitigate financial setbacks if he should become ill, Justin purchased critical illness insurance. He also purchased critical illness and accident coverage for his wife and daughter.

From an employer point of view, emphasizing that employees should consider their family and individual medical history — and how an adverse event could impact them and their families — is a compelling way to make voluntary benefits relevant.

Making it real for employees

Many employers want to help their employees choose the right benefits for their specific needs to protect their financial well-being now and for the future. Showing how needs change with age and lifestyle sheds more light on how voluntary insurance can provide benefits for covered events that will help mitigate financial losses and reduce stress.

Digital technology is making it easier than ever to engage employees across channels with easily digestible but important information. Employers can set up “decision tools” that help employees make choices, offer videos that bring different situations to life, develop app-based calculators, and tell stories about how voluntary benefits can help them and their families during an unexpected illness or injury.

Employees have a lot on their minds. The key to making voluntary benefits real is to show employees why they matter and how to choose the right products. What many employees don’t know is that employers are working hard behind the scenes to offer benefits tailored to their workforce. This is an opportunity for employers to personalize the experience and demonstrate to employees that they truly care.

Grubka, R. (27 June 2018) "One sure-fire way to engage employees in voluntary benefits" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/engaging-employees-in-voluntary-benefits?tag=00000151-16d0-def7-a1db-97f024870001


Compliance Recap July 2018

July was a quiet month in the employee benefits world. The Internal Revenue Service (IRS) released draft Forms 1094-B, 1095-B, 1094-C, and 1095-C. The IRS also released an information letter on the employer shared responsibility provisions.

UBA Updates

UBA released two new advisors:

UBA updated existing guidance:

IRS Releases Draft Forms 1094-B, 1095-B, 1094-C, and 1095-C

The Internal Revenue Service (IRS) released draft Forms 1094-B, 1095-B, 1094-C, and 1095-C. Employers will use the final version of these forms to report on offers of health coverage to full-time employees and their family members, and enrollment in health coverage by employees and their family members (for employers that sponsor self-insured health plans).

There are no substantive changes to draft Forms 1094-B, 1095-B, or 1094-C for 2018. There is a minor formatting change to draft Form 1095-C for 2018. There are dividers for the entry of an individual’s first name, middle name, and last name.

Employers will have more information about any additional changes to these forms when the IRS releases its draft instructions for these forms.

IRS Releases Information Letter on Employer Shared Responsibility

The Internal Revenue Service (IRS) released its Information Letter 2018-0013 to reiterate how the employer shared responsibility provisions would apply to an applicable large employer. Specifically, the IRS explained how the Service Contract Act (SCA) interacts with the Patient Protection and Affordable Care Act (ACA).

As background, the SCA requires workers who are employed on certain federal contracts to be paid prevailing wages and fringe benefits. An employer generally can satisfy its fringe benefit obligation by providing the cash equivalent of benefits or a combination of cash and benefits. Alternatively, an employer may permit employees to choose among various benefits, or various benefits and cash. An employer may choose to provide fringe benefits under the SCA by offering an employee the option to enroll in health coverage provided by the employer (including an option to decline that coverage). If the employee declines the coverage, that employer would then generally be required by the SCA to provide the employee with cash or other benefits of an equivalent value.

This Information Letter refers to IRS Notice 2015-87 which describes how the ACA and the SCA may be coordinated for plan years beginning before January 1, 2017, and until further guidance is issued and applicable. Notice 2015-87 clarifies that, for employees under the SCA, the choice of a cash-out payment will generally not require an employer to pay a greater share of the cost of the health coverage for the coverage to be considered affordable.

Question of the Month

  1. What if a plan sponsor fails to file or pay the PCORI fee?
  2. Although the PCORI statute and its regulations do not include a specific penalty for failure to report or pay the PCORI fee, the plan sponsor may be subject to penaltiesfor failure to file a tax return because the PCORI fee is an excise tax.

The plan sponsor should consult with its attorney on how to proceed with a late filing or late payment of the PCORI fee. The PCORI regulations note that the penalties related to late filing of Form 720 or late payment of the fee may be waived or abated if the plan sponsor has reasonable cause and the failure was not due to willful neglect.

If a plan sponsor already filed Form 720 (for example, for a different excise tax), then the plan sponsor can make a correction to a previously filed Form 720 by using Form 720X.


Everything benefits managers need to know about Generation Z

Say hello to Generation Z. Yes, they have some similarities to Millennials, but they have they own thoughts and attitudes when it comes to work and benefits. Read this blog post to learn more.


Just when you thought you had finally figured out the millennial generation, there’s another young cohort of professionals entering the workforce. Sure, they’ve got some similarities to tech-focused millennials, but they have plenty of their own attitudes and opinions about money, relationships and, of course, work and benefits. Meet Generation Z.

Generation Z was raised in a post-9/11 world, following the dot-com boom and bust and during the midst of the Great Recession. There’s no doubt that these world events have colored the way they think and the way they work. Generation Z is a large cohort of about 72.8 million people and about 25% of the population. It’s a generation that employers will need to understand to create meaningful relationships. Here’s what you need to know.

They’re true digital natives. Generation Z was born between the 1995 and 2010, which makes them the first truly digital native generation. By the time they were heading off to Kindergarten, the internet had reached mainstream popularity and Mark Zuckerberg had already launched Facebook across college campuses.

Like many of us, Generation Z is rarely without their phones. But unlike your older colleagues, Generation Z may be more connected than ever — documenting their days on Instagram Stories and Snapchat, and messaging friends by text and other messaging platforms.

However, they’re also a relatively private bunch. Rather than broadcasting their lives on Facebook (like their parents, aunts, uncles and grandparents), they favor networks that allow for privacy. Snapchat snaps disappear, as do Instagram Stories. Gen Z also gravitates toward apps like Whisper, an anonymous social network for sharing secrets.

Here’s the takeaway for HR pros: Rather than seeing this as a barrier to communication, look at it as an opportunity. Try using text message reminders for open enrollment deadlines or creating a Slack channel for benefits communication, in addition to email and paper updates.

They’re seeking financial security. Generation Z grew up during the Great Recession, during which they may have seen their parents lose their jobs or deal with serious financial hardships. Because of this, Generation Z is focused on financial stability.

Unfortunately, many Gen Zers may join your company drowning in student loan debt from college. Consider offering benefits that help them get out of debt and begin saving for the future. Student loan debt repayment benefits with platforms like SoFi or Gradifi provide appealing avenues to pay off debt faster. You can also promote tax-deferred savings programs such as a 401(k) or health savings accounts to minimize their tax liability and maximize savings opportunities. These benefits may also appeal to millennials struggling with student loan debt and the prospect of saving for retirement — all while they start families.

Financial wellness benefits are attractive to all of your employees — Gen Z included. Consider partnering with local banks or credit unions to provide other savings options and financial education. Make this education appealing to everyone by providing it in different formats — in-person for anyone to attend, as well as on-demand webinars or Skype meetings for those who appreciate a more interactive experience.

Gen Z wants to actively participate. Generation Z is the most connected generation yet; they’re used to Googling an answer before you can finish your question or chatting with their friends throughout each day.

This hyper-connectedness lends itself to more interactive workplace meetings. Keep your Gen Z employees engaged and garner feedback by incorporating polls into your meetings, or creating recordings and presenting to computers and smartphones using a platform like ZeetingsPresentain or Mentimeter.

Whereas millennials were known for their interest in collaborating with each other, Gen Z wants to own their work a little bit more and compete against colleagues. Use this to your advantage to introduce gamification into your programs. Platforms such as Kahoot cannot only help you create some fun competition, but it can improve information retention.

They have a surprising communication preference. We’ve established that Generation Z is a hyper-connected cohort. But research uncovered one surprise about this generation’s preference for feedback: they prefer to be in-person. Use this knowledge to mentor your managers who will deliver feedback, and use it to make your benefits more appealing, too. For example, a confidential advocacy program with phone, email and chat options can be a great source for Gen Zers who want more information on their benefits.

While not everyone in this age group will conform to these attitudes and feelings, it can be helpful to pull back the curtain and understand how this generation could be different from millennials, Gen Xers and baby boomers.


Specialty Drugs and Health Care Costs

Prescription drug spending is rising every year and a significant portion of that spending it on specialty drugs. Read on to learn more.


This November 2015 fact sheet was updated in December 2016 to reflect new data.

Overview

Spending on prescription medications continues to rise each year in the United States.1Specialty drugs— including those used to treat conditions such as cancer and hepatitis C—represent a significant portion of this spending. The high cost of these novel therapies, which often offer advancements in patient care, raises affordability concerns for health plans, patients, and consumers.

What is a specialty drug?

The Pew Charitable Trusts defines specialty drugs as medications with high costs for a course of treatment or a year of therapy. Some health plans also categorize drugs as specialty if they are novel therapies; require special handling, monitoring, or administration; or are used to treat rare conditions. In general, elevated costs are a distinguishing characteristic of specialty drugs. A recent survey found that 85 percent of health plans consider high cost a determining factor in identifying specialty drugs.2 Medicare’s definition of specialty drugs is also based on price: Pharmaceuticals costing $600 or more per month are considered specialty.3

See also: How employers can manage the skyrocketing cost of specialty drugs

Cost implications

The estimated price tag for treating a patient with a specialty drug is high: For some chronic conditions, a year of treatment with a specialty drug can exceed $100,000.4 In 2015, only 1 to 2 percent of the American public used specialty drugs, yet they accounted for approximately 38 percent of total drug expenditures.5 And the price of many specialty drugs continues to rise: In 2015, specialty drug unit costs increased by 11 percent.6 More patients are treating their health conditions with these drugs; utilization rose by 6.8 percent in 2015 because of increased use of existing drugs and the introduction of new pharmaceuticals.7 In 1990, only 10 specialty drugs were on the market,8 but there are now more than 300,9 33 of which became available in 2015 alone.10 And nearly 700 specialty drugs are under development.11 Because of higher prices and increased use, spending on specialty drugs represents an increasing share of total health care costs.12 In 2015, specialty drug spending reached $121 billion on a net price basis.13 The estimated number of Americans with annual drug costs greater than $50,000 increased 63 percent in 2014, from 352,000 people to 576,000.14 Many of these patients take multiple drugs, and 92 percent use high-priced specialty drugs.15 Importantly, patients who need specialty drugs face higher out-of-pocket (OOP) costs, because health plans often require a co-insurance payment, which is a set percentage of a drug’s price. Some plans charge a co-insurance payment as high as 33 percent.16

Managing specialty drug costs

To deal with the high cost of specialty medications, payers in public and private programs use a number of strategies to control patient OOP costs and member premiums, such as negotiating with manufacturers to obtain rebates and other discounts that help reduce the prices that plan members pay for medications. Payers also use different benefit design strategies to ensure the appropriate use of medications and manage total drug spending, including:

Formularies and cost sharing: Specialty drugs are typically placed in a health plan’s highest drug formulary tier, where OOP costs are most expensive. Patients are often required to pay co-insurance in order to access these medications. Research shows that requiring patients to pay more out of pocket reduces their use of prescription drugs.17 In their negotiations with drug manufacturers, payers can sometimes achieve lower prices by allowing patients to pay lower OOP costs for drugs.

See also: A Look at Drug Spending in the U.S.

Step therapy: When multiple treatment options are available for a patient’s condition, plans sometimes require patients to try, and fail, treatment with a cheaper, traditional drug before letting them access a specialty drug. Patients with rheumatoid arthritis, for example, are sometimes required to attempt therapy with traditional oral medications before they can use specialty biologics.18

Prior authorization: These policies require a health care professional to provide documentation that validates a patient’s need for a particular medication. Under most prior authorization criteria, clinical information is necessary to verify that a specialty drug is medically appropriate for a patient before coverage is granted.

Looking forward

Many specialty drugs offer meaningful therapeutic advances over existing treatments. However, if current trends continue, the high cost of specialty drugs will have a significant impact on overall health care spending and patients’ OOP costs. Pew is focused on identifying and evaluating policy options that balance the need to control overall health care spending with ensuring patient access to appropriate medications.

Endnotes

  1. Express Scripts, 2015 Drug Trend Report (2016), https://lab.express-scripts.com/lab/drug-trend-report.
  2. EMD Serono, EMD Serono Specialty Digest, 10th Edition: Managed Care Strategies for Specialty Pharmaceuticals (2014), http://specialtydigest.emdserono.com/pdf/Digest10.pdf.
  3. Centers for Medicare & Medicaid Services, Announcement of Calendar Year (CY) 2016 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter (2015), http://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2016.pdf.
  4. Bradford R. Hirsch, Suresh Balu, and Kevin A. Schulman, “The Impact of Specialty Pharmaceuticals as Drivers of Health Care Costs,” Health Affairs 33, no. 10 (2014): 1714–1720, http://content.healthaffairs.org/content/33/10/1714.short.
  5. Express Scripts, 2015 Drug Trend Report.
  6. Ibid.
  7. Ibid.
  8. American Journal of Managed Care, “The Growing Cost of Specialty Pharmacy—Is it Sustainable?” (2013), http://www.ajmc.com/payer-perspectives/0213/the-growing-cost-of-specialty-pharmacyis-it-sustainable.
  9. Ibid.
  10. Express Scripts, “FDA Approvals Set All-Time High” (2016), https://lab.express-scripts.com/lab/insights/drug-options/fda-approvals-set-all-time-high.
  11. IMS Health, “Overview of the Specialty Drug Trend: Succeeding in the Rapidly Changing U.S. Specialty Market” (2014), http://docplayer.net/4230764-Overview-of-the-specialty-drug-trend.html.
  12. The estimates in this section are based on published reports, some of which use different definitions for a specialty drug. However, the various authors do note that drug price or cost is used as part of their definitions of specialty.
  13. Quintiles IMS Institute, “Medicines Use and Spending in the U.S.: A Review of 2015 and Outlook to 2020,” (2016), http://www.imshealth.com/en/thought-leadership/quintilesims-institute/reports/medicines-use-and-spending-in-the-us-a-review-of-2015-and-outlook-to-2020.
  14. On an invoice price basis, specialty spending was $150.8 billion in 2015.
  15. Express Scripts, “Super Spending: U.S. Trends in High-Cost Medication Use” (2015), http://lab.express-scripts.com/lab/insights/drug-options/super-spending-us-trends-in-high-cost-medication-use.
  16. Kaiser Family Foundation, Medicare Part D at Ten Years: The 2015 Marketplace and Key Trends, 2006-2015 (2015), http://kff.org/medicare/report/medicare-part-d-at-ten-years-the-2015-marketplace-and-key-trends-2006-2015/.
  17. Dana P. Goldman, Geoffrey F. Joyce, and Yuhui Zheng, “Prescription Drug Cost Sharing: Associations With Medication and Medical Utilization and Spending and Health,” Journal of the American Medical Association 298, no. 1 (2007): 61–69, http://jama.jamanetwork.com/article.aspx?articleid=207805.
  18. Express Scripts, Drugs That Require Prior Authorization (PA) Before Being Approved for Coverage (2015), https://www.express-scripts.com/art/medicare15/pdf/prior_authorization_choice.pdf.

SOURCE: PEW (16 November 2015) "Specialty drugs and health care costs" (Web Blog Post). Retrieved from http://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2015/11/specialty-drugs-and-health-care-costs