Has your employee benefits program grown old and stale? Take a look at the great article from Employee Benefits Advisors about the benefits of upgrading your employee benefits to match your employees needs by Chris Bruce
Historically, employee benefits have been viewed as a routine piece of the HR process. However, the mentality of employees today has shifted, especially among the growing population of millennial employees. Today’s workforce expects more from their employers than the traditional healthcare and retirement options, in terms of both specific benefit offerings and communications about those offerings.
For companies, it’s critical they address the evolving needs of their workforce. With unemployment rates plunging to their lowest levels since before the financial crisis, the search for talent is heating up, and organizations need to work harder than ever to retain top talent in a competitive job market. To do this, I see three steps that organizations need to take when rethinking their benefits strategy and engaging with employees: embrace a proactive rather than reactive benefits strategy, think digital when it comes to employee communications and consider the next generation of employee benefits as a way to differentiate from the competition.
1. Reconsider your benefits evaluation process
The benefits process at most companies is reactive — executives and HR only look to evaluate current offerings when insurance contracts expire or a problem emerges. When the evaluation does happen, the two factors that often concern employers the most are product and price. Employers often gravitate toward well-known insurers that offer the schemes that appear familiar. However, this can often lead companies to choose providers who fall short on innovation and overall customer experience for employees.
This approach needs to be flipped on its head. Companies should be proactive in determining which benefit schemes best meet the needs of their workforce. The first step is going straight to the source: talk to employees. Employers can’t know what benefits would be most appealing to their employee base unless they ask. By turning the evaluation process to employees first, companies can better tailor new benefits to meet the needs of their workers, and also identify existing benefits that might be outdated or irrelevant, therefore saving resources on wasted offerings.
Data and analytics also are playing an increasing role across the HR function, and benefits is no exception. By leveraging technology solutions that allow HR to track benefits usage and engagement, teams can better determine what is resonating with employees and where benefits can be cut back or where they should be ramped up.
2. Put down the brochure and think digital engagement
Employee education is another area of benefits that can often perplex companies. According to a recent survey from Aflac, half of employees only spend 30 minutes or less making benefit selections during the open enrollment period each year. This means employers have a short window of time to educate employees and make sure they are armed with the right information to feel confident in their benefits selection.
To do this effectively, HR needs to move past flat communication like brochures, handouts and lengthy employee packets and look for ways to meet employees where they live — online. By testing out innovations that create a rich experience, while still being simple and intuitive, employers can grab the attention of their workforce and make sure key information is communicated. For example, exploring opportunities to create cross-device experiences for employees so they can interact on-the-go, including augmented reality applications or digital interactive magazines. Additionally, for large corporations, hosting a virtual benefits fair can provide a forum for employees to ask questions in a dynamic setting.
3. Embrace the next-generation of benefits
As organizations become more savvy and nimble, personalization will have a huge impact in encouraging employee engagement and driving satisfaction among today’s increasingly diverse workforce. We have already started to see some companies embrace this new approach to benefits, adding out-of-the-box items to normal offerings — from debt consolidation services and wearable health tracking technology to genome testing and wedding concierge services.
The fact is, the days of “status-quo” benefits are gone, and employees today want benefit options that match their current life circumstances. To best engage employees, organizations need to be proactive in evaluating benefits regularly and using analytics to track usage, identify opportunities to implement digital communication elements and look for ways to introduce new benefits to meet the needs of their employee base. By following these steps, organizations can gain a competitive edge when it comes to attracting and retaining top talent.
See the original article Here.
Bruce C. (2017 March 10). Why employers should rethink their benefits strategies [Web blog post]. Retrieved from address http://www.employeebenefitadviser.com/opinion/3-steps-employers-can-take-to-rethink-benefits-strategy?feed=00000152-1377-d1cc-a5fa-7fff0c920000
Does the implementation of the AHCA have you worried about your employee benefits? Take a look at this great article from Employee Benefit News about what the implementaion of the AHCA will mean for employers by Joel Wood.
In breaking down the Congressional Budget Office’s assessment of the proposed American Health Care Act, let’s look at the impact of the AHCA on employer-sponsored plans. The CBO estimates that 2 million fewer Americans will have employer-sponsored coverage in 2020, growing to seven million by 2027. Here’s CBO’s rationale:
These are valid points. The CBO experts are basing their estimates on sound economics and inside the constraints of their authority, and so of course we worry about any proposal that devolves employer-sponsored care. But, we also have to note that the CBO said much the same about the Affordable Care Act, which largely didn’t happen. And CBO notwithstanding, we at the Council of Insurance Agents & Brokers, too, feared something of a death spiral after the ACA was enacted.
The ACA’s employer penalties were very small in comparison to premiums, and it made sense that many would dump their plans, give their employees cash, and send them to the subsidized exchanges. Also, the subsidies were pretty rich — graduating out at 400% of the poverty line. That’s more than $90,000 for a family of four.
What we didn’t take into account in reference to the ACA were a number of things:
So employer-sponsored health insurance has, well, thrived since the enactment of the ACA — perhaps in spite of it, not because of it.
If the CBO is correct and seven million people lose ESI over the next decade, that’s problematic. But it ignores other opportunities that are being created through the proposed GOP bill and Trump Administration executive actions.
Republicans propose significant expansion of HSAs that will compliment higher-deductible ESI plans. They want work-arounds for state mandates on essential health benefits, even though their goal of “buying across state lines” can’t be realized through the tricky budget reconciliation process. And, ultimately, Republicans want to realize the potential for the ACA wellness provisions that have been eviscerated through years of EEOC/ADA/GINA conflicts. That would be a big win for employers.
The most important tradeoff between the “discussion draft” of a few weeks ago and the AHCA is that GOP House leaders junked their plan to tax 10% of employee contributions for ESI plans, in favor of pushing the Cadillac tax out five more years, to 2025.
Personally, I figure I’ve got another decade left in me to lobby for this industry, and that would get me eight years along the way. That’s a terrific tradeoff in my book, especially as Ways & Means Chairman Kevin Brady (R-Texas) emphasized he never intends for that tax to go into effect — it’s purely a budgetary gimmick. And, it’s a ridiculous “score” from CBO anyway. Everybody knows that no employer is going to pay that tax; they’ll work their plan design to get under the numbers.
Where does Donald J. Trump stand on parental leave, minimum wage and other important workplace issues? Here’s what employers need to know.
My conclusions at this moment in time, thus, are:
Sometimes, when lobbying blank-faced Republican leaders on the importance of ESI, I feel like the old BB King lyric: “Nobody loves me but my mother, and she could be jivin’, too.”
But because of, or in spite of, current legislative efforts that are dominating the headlines, I feel relatively well-poised for ESI to continue to be the means through which a majority of Americans receive the health insurance they like and they want to keep. Our job is for them to keep it. Notwithstanding lots of obstacles, we will.
Wood J. (2017 March 21). CBO estimate of AHCA impact on employer-sponsored benefits is off the mark [Web blog post]. Retrieved from address https://www.benefitnews.com/opinion/cbo-estimate-of-ahca-impact-on-employer-sponsored-benefits-is-off-the-mark
Does the repeal of the ACA have you worried? Checkout this great article about some of the changes that will come with the repeal of the ACA by Jared Bilski.
A draft of the Republicans’ Affordable Care Act (ACA) replacement bill that was leaked to the public is likely to look a lot different when it’s finalized. Still, it gives employers a good indication of how Republicans will start to deliver on their promises to “repeal and replace” Obamacare.
It should come as no surprise to employers that the GOP replacement bill, which was obtained by POLITICO, would scrap a cornerstone of the ACA — the individual mandate — as well as income-based subsidies and all of the laws current taxes (at least one replacement tax is included in the legislation).
According to the discussion draft of the replacement bill, it would offer tax credits for purchasing insurance; however, those credits would be based on age instead of income.
For example, a person under the age of 30 would receive a credit of $2,000. A person over the age of 60, on the other hand, would receive double that amount.
Some of the other highlights of the leaked legislation include:
Obamacare’s essential health benefits mandates require health plans to cover 10 categories of healthcare services, which include:
Under the bill, individual states would make the decisions about what types of services plans must cover — beginning in 2020.
The Medicaid expansion under Obamacare that has covered millions of people will be phased out by 2020 under the GOP bill. The replacement proposal: States would receive a set dollar amount for each person.
There would also be variations in the funding amounts based on an individual’s health status. In other words, more money would be allocated for disabled individuals, which is a huge departure from the open-ended entitlement of the current Medicaid program.
One of the most popular elements of the ACA would apparently remain untouched under the GOP bill: the Obamacare provision that prohibits health plans from discriminating against people with pre-existing conditions.
However, the legislation does take aim at older individuals. The GOP would allow insurers to charge older people up to five times more for healthcare than younger individuals. The current ACA limits that difference to three times as much.
The bill does aim to remedy this discrepancy by providing bigger tax credits for older people.
There is a slew of taxes built into the ACA — the manufacturer tax, and taxes on medical devices, health plans and even tanning beds — and the Republican bill would repeal those taxes.
But those taxes help cover the cost of the ACA. So to make up for the shortfall that would result in killing those taxes, the GOP is floating the idea of changing the tax treatment of employer-based health insurance. As employers are well aware, employer-sponsored health plan premiums currently aren’t taxed. Under the GOP proposal, this would be changed for some premiums over a certain threshold — although the specifics of such a change remain murky.
Such a move would surely be met by fierce opposition from the business community. In fact, major employer groups are already preparing to fight such a proposition.
Bilski J. (2017 March 01). ACA replacement proposal leaked: some of the finer points for HR [Web blog post]. Retrieved from address http://www.hrmorning.com/aca-replacement-proposal-leaked-some-of-the-finer-points-for-hr/
Are you properly investing in your health saving account? Take a look at the this article from Benefits Pro about the importance of saving money for your healthcare by Reese Feuerman.
For all ages, it’s imperative to balance near-term and long-term savings goals, but the makeup of those savings goals has changed dramatically over the past 10 years.
With the continued rise in health care costs, and increased cost sharing between employers and employees, more employees and employers have been migrating to consumer-driven health care (CDH) to provide lower-cost alternatives.
With the increased adoption in these plans for employee cost savings purposes, employers have likewise realized similar cost savings to their bottom line. But what role does CDH play in the long term?
Republicans trying to find a way to repeal the ACA are turning to health savings accounts — new ones, called…
The Greatest Generation was able to rely on their pensions, Social Security, Medicaid, and the like as a means to support them in retirement for both medical and living expenses. However, as the Baby Boomers continue their journey towards retirement, reliance upon future proof retirement funds are fading into the sunset for coming generations. According to a 2015 study from the Government Accountability Office (GAO), 29% of American’s 55 and older do not have money set aside in a pension plan or alternative retirement plan.
To make matters worse, some experts are forecasting Social Security funding will be depleted by 2034, leaving even more retirees potentially without a plan. As such, Generation X and beyond must look for more creatives measures for savings to make up the difference.
In 1978, 401(k) plans were introduced to provide the workforce with a secondary means for retirement savings while also providing significant tax benefits. However, even when actively funded, with rising health care costs and a depleted Social Security system—the solution this workforce has paid into for their entire career—will not be enough.
According to Healthview Services, the average retiree couple will spend $288,000 for just health care expenses during retirement. This sum could easily consume one-third of total retiree savings. This is a contributing factor to the rise and rapid adoption of tax-advantage health accounts to supplement retirement savings. Introduced to the market in 2003, Health Savings Accounts (HSA) have provided employees with an option to set aside pre-tax funds to either cover current year health care expenses, like the familiar Flexible Spending Account (FSA), or carry over the funds year-over-year to pay for medical expenses later or during retirement. The pretax money employees are able to set aside in these accounts to cover health care expenses, will over time, be on par with retirement savings contributions, such as a 401(k) and 403(b), because of increasing costs and triple-tax savings.
It is important for consumers to understand these retirement options and how they could be leveraged for greater financial wealth. As a result, the Health Care Stack, an analysis authored by ConnectYourCare, acts as a life savings model and illustrates the amount of pretax money consumers can contribute for both their lifestyle and health expenses in retirement.
For illustrative purposes, according to current IRS guidelines, the average American under the age of 50 could set aside up to $24,750 each year pre-tax for retirement to cover their health care and living expenses. In this example, if a worker in his or her 30s starts to set aside the maximum contributions (based on IRS guidelines) for HSA contributions, assuming a rate of return of 3%, they would have $330,000 saved in their HSA to cover health care expenses once they reach the retirement age of 65. This number could be even greater if President Trump’s administration passes any number of proposed bills to increase the HSA contribution limits to match the maximum out-of-pocket expenses included in high deductible health plans. This allocation would not only cover average medical expenses, but also provide a triple-tax advantage for consumers from now through retirement.
In addition to the long-term retirement goals, the yearly pre-tax savings may be even greater if notional accounts are factored in, with approved IRS limits of a $2,600 per year maximum for Flexible Spending Accounts, $5,000 per year maximum for Dependent Care FSA, and $6,120 per year maximum for commuter plans. This equals $38,470 (or $44,820 if HSA contributions increase) of pre-tax contributions that consumers could save by offsetting the tax burden and could invest towards retirement.
For those consumers over the age of 50, the savings potential is even greater as they can contribute to a post retirement catch-up for their 401K plans equaling a total of $24,000, plus they may take advantage of the $6,750 HSA savings, as well as the additional $1,000 catch up. If certain proposed bills are passed, the increase could be $38,100 a year that they could set aside, in pre-tax assets, for retirement.
Not only will an individual’s expenses be covered, but there are other benefits brought forth by proper planning, including the potential to reach ones retirement savings goals early. Let’s say that after meeting with a licensed financial investor it was determined that an individual needed $1.8 million in order to retire, and according to national averages, close to $288,000 to cover health care costs.
Given the proper investment strategy around contributions to both retirement and HSA plans, an individual could – theoretically -save enough to meet their retirement investment needs by the age of 60 for both lifestyle and health care expense coverage, if they started making careful investments in their 20s (assuming the worker is making $50,000 per year with a 3% annual increase).
In comparison, under current proposals, which include the increased HSA limits, retirement savings could be achieved even earlier with the coverage threshold being at 57 for the average worker. This is a tremendous opportunity to transform retirement investment programs for all American workers who would otherwise be left on their own. Talk about the American dream!
While there is not a one-size fits all strategy, it is important for everyone to understand their options and see how these pretax accounts outlined in the Health Care Stack play an important consideration in ones future retirement planning.
Taking the time now to fully understand tax-favored benefit accounts will provide him or her with the appropriate coverage to enjoy life well into their golden years. Retirement is just around the corner, are you ready?
Feuerman (2017 March 02). How are your retirement health care savings stacking up?[Web blog post]. Retrieved from address http://www.benefitspro.com/2017/03/02/how-are-your-retirement-health-care-savings-stacki?ref=hp-in-depth
Are you looking for a new solution for cutting your healthcare cost? Take a look at the great article from Employee Benefits Advisor about what other employers are doing to cut their cost healthcare cost by Phil Albinus.
As employers await a new health plan to replace the Affordable Care Act and consensus grows that high deductible health plans (HDHPs) are not the perfect vehicle for cutting healthcare costs, employers are incorporating innovative strategies to achieve greater savings.
Employers are offering HSAs, wellness incentives and price transparency tools at higher rates in an effort to cut the costs of their employee health plans. And when savings appear to plateau, they are implementing innovative reward plans to those who adopt these benefits, according to the 2017 Medical Plan Trends and Observation Report conducted by employee-engagement firm DirectPath and research firm CEB. They examined 975 employee benefit plans to analyze how they functioned in terms of plan design, cost savings measures and options for care.
The report found that 67% of firms offer HSAs while only 15% offer employee-funded Health Reimbursement Arrangements. As “use of high deductible plans seem to have (at least temporarily) plateaued under the current uncertainty around the future of the ACA, employer contributions to HSAs increased almost 10%,” according to the report.
Wellness programs continue to gain traction. Fifty-eight percent of 2017 plans offer some type of wellness incentive, which is up from 50% in 2016. When it comes to price transparency tools, 51% of employers offer them to help employees choose the best service, and 18% plan to add similar tools in the next three years. When these tools are used, price comparison requests saw an average employee savings of $173 per procedure and average employer savings of $409 per procedure, according to CEB research.
“What was interesting was the level of creativity within these incentives and surcharges. There were paycheck credits, gift cards, points that could be redeemed for rewards,” says Kim Buckey, vice president of client services at DirectPath. “One employer reduced the co-pays for office visits to $20 if you participated in the wellness program. We are seeing a level of creativity that we haven’t seen before.”
Surcharges on tobacco use has gone down while surcharges for non-employees such as spouses has risen. “While the percentage of organizations with spousal surcharges remained static (26% in 2017, as compared to 27% in 2016), average surcharge amounts increased dramatically to $152 per month, a more than 40% increase from 2016,” according to the report.
Tobacco surcharges going down “is reflective of employers putting incentives in, so they are taking a carrot approach instead of the stick,” says Buckey.
Telemedicine adoption appears to be mired in confusion among employees. More than 55% of employees with access to these programs were not aware of their availability, and almost 60% of employees who have telemedicine programs don’t feel they are easy to access, according to a separate CEB survey.
Employers seem to be introducing transparency and wellness programs because the savings from HDHPs appear to have plateaued, says Buckey. She also noted recent research that HSAs only deliver initial savings at the expense of the employee’s health.
“With high deductible plans and HSAs, there has been a lot of noise how they aren’t the silver bullet in controlling costs. Some researchers find that it has a three-year effect on costs because employees delay getting care and by the time they get it, it’s now an acute or chronic condition instead of something that could have been headed off early,” she says.
“And there is a tremendous lack of understanding on how these plans work for lower income employees, [it’s] hard to set aside money for those plans,” she says.
Educating employees to be smarter healthcare consumers is key. “What is becoming really obvious is that there is room to play in all these areas of cost shifting and high deductible plans and wellness but we can no longer put them in place and hope for the best,” she says. We have to focus on educating employees and their families,” she says. “If we are expecting them to act like consumers, we have to arm them with the tools. Most people don’t know where to start.”
She adds, “we know how to shop for a TV or car insurance but 99% of people don’t know where to start to figure out where to shop for prescription drugs or for the hospital where to have your knee surgery. Or if you get different prices from different hospitals, how do you even make the choice?”
When asked if the results of this year’s report surprised her – Buckey has worked on the past five – she said yes and no.
Given that the data is based on information from last summer for plans that would be in effect by 2017, she concedes that given the current political climate “a lot is up in the air.” Most employers were hesitant to make substantive changes to their plans due to the election, she says. We may see the same thing this year as changes are made to the ACA and the Cadillac Tax, she adds.
“What I was interested in were the incremental changes and some of the creativity being applied to longstanding issues of getting costs under control,” she says.
Albinus P. (2017 March 05). Employers embrace new strategies to cut healthcare costs [Web blog post]. Retrieved from address http://www.employeebenefitadviser.com/news/employers-embrace-new-strategies-to-cut-healthcare-costs?brief=00000152-1443-d1cc-a5fa-7cfba3c60000
Great article from our partner, United Benefit Advisors (UBA) abut the change coming to the ACA thanks to PACE by Vicki Randall
Last fall, President Barack Obama signed the Protecting Affordable Coverage for Employees Act (PACE), which preserved the historical definition of small employer to mean an employer that employs 1 to 50 employees. Prior to this newly signed legislation, the Patient Protection and Affordable Care Act (ACA) was set to expand the definition of a small employer to include companies with 51 to 100 employees (mid-size segment) beginning January 1, 2016.
If not for PACE, the mid-size segment would have become subject to the ACA provisions that impact small employers. Included in these provisions is a mandate that requires coverage for essential health benefits (not to be confused with minimum essential coverage, which the ACA requires of applicable large employers) and a requirement that small group plans provide coverage levels that equate to specific actuarial values. The original intent of expanding the definition of small group plans was to lower premium costs and to increase mandated benefits to a larger portion of the population.
The lower cost theory was based on the premise that broadening the risk pool of covered individuals within the small group market would spread the costs over a larger population, thereby reducing premiums to all. However, after further scrutiny and comments, there was concern that the expanded definition would actually increase premium costs to the mid-size segment because they would now be subject to community rating insurance standards. This shift to small group plans might also encourage mid-size groups to leave the fully-insured market by self-insuring – a move that could actually negate the intended benefits of the expanded definition.
Another issue with the ACA’s expanded definition of small group plans was that it would have resulted in a double standard for the mid-size segment. Not only would they be subject to the small group coverage requirements, but they would also be subject to the large employer mandate because they would meet the ACA’s definition of an applicable large employer.
Randall V. (2017 February 16). Keeping pace with the protecting affordable coverage for employees act [Web blog post]. Retrieved from address http://blog.ubabenefits.com/keeping-pace-with-the-protecting-affordable-coverage-for-employers-act
The employer and broker roles could be on the verge of changing due to HSA expansion. Take a look at this article from Employee Benefits Advisor about some changes that could take place by Phil Albinus.
As Congress moves to repeal and replace the Affordable Care Act, details of the new plan are still coming together. Meanwhile, one element appears to have the support of several architects of the various alternative plans that are being proposed by Congress: An expanded use of health savings accounts.
Republicans are pushing for HSA expansion to include greater portability between insurance plans, an increased role for spouses and a raise in the amount that plan participants are allowed to invest. These elements appear in proposals put forth by Speaker Paul Ryan (R-Wis.), HHS Sec. Tom Price’s plan when he was a member of Congress last year, and in a new plan proposed by the Freedom Caucus — led by Sen. Paul Rand (R-Ky.) and Rep. Mark Sanford (R-S.C.).
With the role of HSAs becoming increasingly important in benefit plans, advisers must prepare for how they will handle expanding participation and how they interact with and educate employees on HSAs.
“The Republicans’ plan is more of an expansion of the HSAs. Creating greater rules around those HSAs allows greater portability, more participation with spouses and more protection from bankruptcy. It puts more focus on the participants and less on the employer. It’s not so much a new role as more an expanded and just wider adoption,” says Harrison Stone, general counsel at healthcare solutions provider ConnectYourCare, which is based in Baltimore.
By boosting HSAs under the upcoming Republican plan, the end user will have more control over healthcare spending. “The theory is that all of these consumer-owned and directed accounts are empowering. They fit with overall transparency and should force the market to change as providers are forced to more directly compete,” says Dennis Fiszer, first vice president and chief compliance officer for HUB International.
This could downplay the role of employers as employees have a greater say in the way their funds for medical expenses are spent.
“The HSA portion of the account really belongs to the individual. And so, apart from generalized information, the plan sponsor’s role is more hands off … similar to operation of 401(k) programs. The plan sponsor role is focused on operating and maintaining compliance for the accompanying high-deductible health plan. The employer absorbs all the traditional ERISA, COBRA, HIPAA-borne obligations through sponsorship of the HDHP,” says Fiszer.
HSAs by the numbers
More than 20 million Americans participated in an HSA in 2016, according to America’s Health Insurance Plans. And those numbers are set to climb.
Over the last decade, AHIP found that HSA participation has grown from 3.2 million in 2006 to 20.2 million in 2016. On average, plans surveyed in 2015 and 2016 enrolled an additional 648,000 consumers, which is an average net increase in HSA participants of 3.4%.
HSA adoption is set to take off, says John Young, senior vice president of consumerism and strategy of Alegeus.
“HSAs are at a tipping point for market adoption and have become a foundational pillar for the future success of healthcare, much like 401(k)s are for retirement spending and saving. HSAs are not the panacea to fix all ACA criticisms, but they are a key component of every GOP healthcare proposal,” says Young.
“Simple fixes to HSA accessibility, such as expanded availability to those receiving care under the VA/TRICARE and Indian Health Services, will enable more Americans to have the option of an HSA. Expanding HSA operability, such as increasing contribution limits up to the annual maximum out-of-pocket limit, and allowing spouses to make catch-up contributions to the same account, make HSAs easier to use and understand,” says Young.
Building a smarter healthcare consumer
Ultimately, Republican politicians hope that an expanded HSA will drive down costs as employees search for better bargains in their healthcare. Rand and Sanford’s plan, for example, would sever health insurance from a person’s employer and offer a $5,000 tax credit to fund HSAs.
“What if 30% of the public had health savings accounts?” Paul told The Washington Post. “What do you do when you use your own money? You call up doctors and ask the price… if you create a real marketplace, you drive prices down.”
This supposed HSA benefit will require greater data transparency among healthcare providers and advisers, as well as more interaction with plan participants, the employees.
“For this to work the way I think Congress would like it to work is we need greater transparency and [to] know what certain elements of healthcare costs. This country is kind of edging in that direction,” says Edward Fensholt of Lockton Company’s Lockton Benefit Group.
If an employee has a high deductible plan that is supplemented by an HSA, the theory is they would shop for the cheapest medical test or procedure, such as an MRI. In order to accomplish this, the plan participant will need more data from brokers and healthcare providers.
“That data is hard to come by,” says Fensholt. He adds that this proving this information to the plan sponsor is the role of the broker today — and that arrangement will likely have to change.
“Brokers are the ones helping employers drive the market toward that transparency and brokers are developing tools for this. There are some vendors out there that survey the market and sell their data to brokers or to employers as a positive add-on. I think this is all part of a larger theme as in, ‘Let’s put employees into more control and more responsibility to manage their healthcare.’”
Although HSAs came into existence in 2004 during the tax reforms of President George W. Bush, there is still confusion among employees as to how HSAs work and what the exact tax benefits are.
There is risk of HSAs overshadowing other important forms of CDH accounts like FSAs and HRAs, says Young. He adds that “while HSAs are a powerful tool, they are not the end-all-be-all and should not be positioned as such. FSAs and HRAs continue to have an important place in the market.”
As HSAs expand, Young believes that the industry needs to “laser-focus” on consumer education around healthcare consumerism in general and how to maximize the value of all health benefit account offerings. “Without such consumer education, these plans won’t achieve the optimal objective, to lower healthcare costs and improve health,” he says.
Albinus P. (2017 February 21). HSA expansion could change broker-employer role [Web blog post]. Retrieved from address http://www.employeebenefitadviser.com/news/hsa-expansion-could-change-broker-employer-role?brief=00000152-1443-d1cc-a5fa-7cfba3c60000
Make sure to stay updated with all the recent rules and regulation regarding the ACA, thanks to our partners at United Benefits Advisor (UBA).
A Summary of Benefits and Coverage (SBC) is four page (double-sided) communication required by the federal government. It must contain specific information, in a specific order, and with a minimum size type, about a group health benefit’s coverage and limitations. If an employer providing an SBC is a covered entity under the ACA’s Section 1557, additional requirements apply.
On April 6, 2016, the Centers for Medicare and Medicaid Services (CMS), the Department of Labor (DOL), and the Department of the Treasury issued the final 2017 summary of benefits and coverage (SBC) template, group and individual market SBC instructions, uniform glossary of coverage and medical terms, a coverage example calculator, and calculator instructions.
The SBC is to be used by all health plans, including individual, small group, and large group; insured and self-insured; grandfathered, transitional, and ACA compliant. The new SBC must be used for plan years with open enrollment periods beginning after April 1, 2017. It will not be used for marketplace plans for the 2017 coverage year.
For fully insured plans, the insurer is responsible for providing the SBC to the plan administrator (usually this is the employer). The plan administrator and the insurer are both responsible for providing the SBC to participants, although only one of them actually has to do this.
For self-funded plans, the plan administrator is responsible for providing the SBC to participants. Assistance may be available from the plan administrator’s TPA, advisor, etc., but the plan administrator is ultimately responsible. (The plan administrator is generally the employer, not the claims administrator.)
The template includes a new “important question” that asks “Are there services covered before you meet your deductible?” and requires family plans to disclose whether or not the plan has embedded deductibles or out-of-pocket limits. This is reported in the “Why This Matters” column in relation to the question “what is the overall deductible?” and plans must list “If you have other family members on the policy, they have to meet their own individual deductible until the overall family deductible has been met” or alternatively, “If you have other family members on the policy, the overall family deductible must be met before the plan begins to pay.”
Tiered networks must be disclosed and the question “Will you pay less if you use a network provider?” is now included. The SBC also includes language that warns participants that they could receive out-ofnetwork providers while they are in an in-network facility. The SBC also indicates that a consumer could receive a “balance bill” from an out-of-network provider.
The “explanatory coverage page” was dropped from the template.
The coverage examples provided clarify the “having a baby” example and the “managing type 2 diabetes” example, in addition to providing a third example of “dealing with a simple fracture.” The coverage example must be calculated assuming that a participant does not earn wellness credits or participate in an employer’s wellness program. If the employer has a wellness program that could reduce the employee’s costs, the employer must include the following language: “These numbers assume the patient does not participate in the plan’s wellness program. If you participate in the plan’s wellness program, you may be able to reduce your costs. For more information about the wellness program, please contact: [insert].”
The column for “Limitations, Exceptions, & Other Important Information” must contain core limitations, which include:
The template and instructions indicate that qualified health plans (those certified and sold on the Marketplace) that cover excepted abortions (such as those in cases of rape or incest, or when a mother’s life is at stake) and plans that cover non-excepted abortion services must list “abortion” in the covered services box. Plans that exclude abortion must list it in the “excluded services” box, and plans that cover only excepted abortions must list in the “excluded services” box as “abortion (except in cases of rape, incest, or when the life of the mother is endangered).” Health plans that are not qualified health plans are not required to disclose abortion coverage, but they may do so if they wish
Impact of Section 1557 of the ACA – Addendum Required for Covered Entities
On May 13, 2016, the Department of Health and Human Services (HHS) issued a final rule implementing Section 1557 of the Patient Protection and Affordable Care Act (ACA), which took effect on July 18, 2016. Under these regulations, covered entities must provide notices stating they do not discriminate on certain grounds in “significant public-facing publications.” HHS has gone on to confirm that an SBC is a significant public-facing publication.
ACA Section 1557 provides that individuals shall not be excluded from participation, denied the benefits of, or be subjected to discrimination under any health program or activity which receives federal financial assistance from HHS on the basis of race, color, national origin, sex, age, or disability. The rule applies to any program administered by HHS or any health program or activity administered by an entity established under Title I of the ACA. These applicable entities are “covered entities” and include a broad array of providers, employers, and facilities. State-based Marketplaces are also covered entities, as are FederallyFacilitated Marketplaces.
The final regulations are aimed primarily at preventing discrimination by health care providers and insurers, as well as employee benefits programs of an employer that is principally or primarily engaged in providing or administering health services or health insurance coverage, or employers who receive federal financial assistance to fund their employee health benefit program or health services. Employee benefits programs include fully insured and self-funded plans, employer-provided or sponsored wellness programs, employer provided health clinics, and longer-term care coverage provided or administered by an employer, group health plan, third party administrator, or health insurer
Practically speaking, employers with fully insured group health plans will be subject to the regulations (because the carrier is a covered entity and is prohibited from selling discriminatory plans), and many self funded employers will be considered a covered entity based on their business model or financial details. Furthermore, most third party administrators (TPAs) will be considered a covered entity. The Office of Civil Rights (OCR) will investigate a TPA when there is alleged discrimination in the administration of the plan. However, if the alleged discrimination is in benefit plan design (that is, the choice of the employer), the OCR will process the complaint against the employer or plan sponsor. If the OCR lacks jurisdiction over the employer, it will refer the matter to the Equal Employment Opportunity Commission (EEOC). This means that employers who are not covered entities, but have a self-funded group health plan that utilizes a TPA that is a covered entity, could become the subject of an EEOC investigation for discriminatory business practices.
Employers with self-funded group health plans should seek legal counsel to determine if they are a covered entity, and to obtain legal advice on the applicability of these regulations to their individual situation.
Covered entities must take steps to notify beneficiaries, enrollees, applicants, or members of the public of their nondiscrimination obligations with respect to their health programs and activities. Covered entities are required to post notices stating that they do not discriminate on the grounds prohibited by Section 1557, and that they will provide free (and timely) aids and services to individuals with limited English proficiency and disabilities. These notices must be posted in conspicuous physical locations where the entity interacts with the public, in its significant public-facing publications, and on its website home page. In addition, covered entities that employ 15 or more persons must designate a responsible employee to coordinate the entity’s compliance with the rule and adopt a grievance procedure. Employers who are covered entities should seek advice of counsel on the ways these requirements apply to them and their group health plan, and employers who are not covered entities but have a fully insured group health plan should discuss how the insurance carrier will meet these requirements.
The OCR has provided a model notice and model statement of nondiscrimination, and taglines for employers to use. The OCR has also created an FAQ and table relating to the top 15 languages spoken in each state.
HHS has stated that an SBC is a publication that is “significant” under the Section 1557 regulations. As a result, CMS requires the use of an addendum to the SBC to accommodate applicable language access standards. Accordingly, covered entities required to provide an SBC must include the nondiscrimination notice and taglines in its addendum along with other applicable language access standards. This addendum must contain only the Section 1557 nondiscrimination notice and taglines and other applicable language access information.
To download the full compliance alert click Here.
Great article from Kaiser Health News about all the changes that could be coming with the ACA overhaul by Michelle Andrews
As Republicans look at ways to replace or repair the health law, many suggest shrinking the list of services insurers are required to offer in individual and small group plans would reduce costs and increase flexibility. That option came to the forefront last week when Seema Verma, who is slated to run the Centers for Medicare & Medicaid Services in the Trump administration, noted at her confirmation hearing that coverage for maternity services should be optional in those health plans.
Maternity coverage is a popular target and one often mentioned by health law critics, but other items also could be watered down or eliminated.
There are some big hurdles, however. The health law requires that insurers who sell policies for individuals and small businesses cover at a minimum 10 “essential health benefits,” including hospitalization, prescription drugs and emergency care, in addition to maternity services. The law also requires that the scope of the services offered be equal to those typically provided in employer coverage.
“It has to look like a typical employer plan, and those are still pretty generous,” said Timothy Jost, an emeritus professor at Washington and Lee University Law School in Virginia who is an expert on the health law.
Since the 10 required benefits are spelled out in the Affordable Care Act, it would require a change in the law to eliminate entire categories or to water them down to such an extent that they’re less generous than typical employer coverage. And since Republicans likely cannot garner 60 votes in the Senate, they will be limited in changes that they can make to the ACA. Still, policy experts say there’s room to “skinny up” the requirements in some areas by changing the regulations that federal officials wrote to implement the law.
The law requires that plans cover “rehabilitative and habilitative services and devices.” Many employer plans don’t include habilitative services, which help people with developmental disabilities such as cerebral palsy or autism maintain, learn or improve their functional skills. Federal officials issued a regulation that defined habilitative services and directed plans to set separate limits for the number of covered visits for rehabilitative and habilitative services.
Those rules could be changed. “There is real room for weakening the requirements” for habilitative services, said Dania Palanker, an assistant research professor at Georgetown University’s Center on Health Insurance Reforms who has reviewed the essential health benefits coverage requirements.
Oral And Vision Care For Kids
Pediatric oral and vision care requirements, another essential health benefit that’s not particularly common in employer plans, could also be weakened, said Caroline Pearson, a senior vice president at Avalere Health, a consulting firm.
Mental Health And Substance Use Disorder Services
The health law requires all individual and small group plans cover mental health and substance use disorder services. In the regulations the administration said that means those services have to be provided at “parity” with medical and surgical services, meaning plans can’t be more restrictive with one type of coverage than the other regarding cost sharing, treatment and care management.
“They could back off of parity,” Palanker said.
Prescription drug coverage could be tinkered with as well. The rules currently require that plans cover at least one drug in every drug class, a standard that isn’t particularly robust to start with, said Katie Keith, a health policy consultant and adjunct professor at Georgetown Law School. That standard could be relaxed further, she said, and the list of required covered drugs could shrink.
Preventive And Wellness Services And Chronic Disease Management
Republicans have discussed trimming or eliminating some of the preventive services that are required to be offered without cost sharing. Among those requirements is providing birth control without charging women anything out of pocket. But, Palanker said, “if they just wanted to omit them, I expect that would end up in court.”
Pregnancy, Maternity And Newborn Care
Before the health law passed, just 12 percent of health policies available to a 30-year-old woman on the individual market offered maternity benefits, according to research by the National Women’s Law Center. Those that did often charged extra for the coverage and required a waiting period of a year or more. The essential health benefits package plugged that hole very cleanly, said Adam Sonfield, a senior policy manager at the Guttmacher Institute, a reproductive health research and advocacy organization.
“Having it in the law makes it more difficult to either exclude it entirely or charge an arm and a leg for it,” Sonfield said.
Maternity coverage is often offered as an example of a benefit that should be optional, as Verma advocated. If you’re a man or too old to get pregnant, why should you have to pay for that coverage?
That a la carte approach is not the way insurance should work, some experts argue. Women don’t need prostate cancer screening, they counter, but they pay for the coverage anyway.
“We buy insurance for uncertainty, and to spread the costs of care across a broad population so that when something comes up that person has adequate coverage to meet their needs,” said Linda Blumberg, a senior fellow at the Health Policy Center at the Urban Institute.
Andrews M. (2017 February 21). Health law’s 10 essential benefits: a look at what’s at risk in GOP overhaul [Web blog post]. Retrieved from address http://khn.org/news/health-laws-10-essential-benefits-a-look-at-whats-at-risk-in-gop-overhaul/
Did you know that a lot of your employees may be unaware of the health care options your company offers? Take a peek at this great article from HR Morning on how to improve your employees knowledge of their healthcare options by Jared Bilski
As an increasing number of employees are being asked to make smarter healthcare spending decisions, communication is more important than ever. Unfortunately, it looks like many firms have a lot of room for improvement.
That’s one of the alarming takeaways from healthcare administrator Alegeus’ recent “State of Denial” study.
A number of the stats from the study point to a major employee healthcare problem that’s only getting worse. That problem: While employees’ health options are becoming increasingly complex, most workers don’t have the knowledge and/or accountability to make wise decisions involving those options.
Here are some of the most alarming stats from the study:
The study also highlighted some of the contradictions between what employees said they wanted or needed, and how they acted.
For example, although 70% of employees said they’d like to take a more active role in their healthcare decisions, just 50% intend to conduct more due diligence when purchasing healthcare in 2017.
One of the most effective ways to improve employees’ benefits understanding is through one-on-one communications.
To help ensure this is effective, here are three things HR pros should keep in mind, according to Winston Benefits, a voluntary benefits plan provider:
When you’re doing a large-scale benefits presentation, you generally just hand out the materials, and employees look through and use those materials as they see fit.
But with individual sessions, benefits pros have to be prepared to explain those materials in any way an employee requests.
Example: Walking a worker through a tool or calculator in a step-by-step manner.
In many cases, benefits brokers are willing to go on site for one-on-one sessions, and companies should take advantage whenever possible.
Employees will be comfortable knowing there’s an in-house HR or benefits pro at the broker, and a broker’s expertise can really improve workers’ overall understanding.
The point of these meetings is to give employees all the time they need to understand their options and make informed decisions.
Rushing workers through these meetings will ensure the one-on-one education falls flat.
Bilski J. (2017 February 17). Employees desperately need more information on health plans, study says [Web blog post]. Retrieved from address http://www.hrmorning.com/employees-desperately-need-more-information-on-health-plans-study-says/