Your Cyber Liability Policy & Handling Data Breaches Like A Pro

In the digital age we live in, it has never been more critical to have a focused, working cyber liability policy. A data breach for a company is a bad dream but having to tell their customers they’ve undergone a data breach is a nightmare. For this month’s CenterStage, Hierl’s wonderful VP of Property & Casualty, Cathleen (Cathy) Christensen, has brought you some helpful, informative advice on securing a reliable cyber liability policy, enabling you to handle data breaches like a pro.

About Cathleen

Cathleen Christensen is the current Vice President, Property & Casualty of Hierl Insurance, Inc. Cathy’s expertise lends itself well to helping local businesses with their commercial insurance and risk management needs. She attended Alverno College in Milwaukee, WI before her career in insurance. In her 25 years of experience in the industry, she has worked on the insurance company side as an underwriting manager, as well as on the agency side as an account executive. Cathy has also been an entrepreneur herself, which enables her to understand the demands businesses face today.

So, let’s get into it: how do you choose a successful cyber liability policy and avoid business fatal data breaches?

The 3 Big Issues of a Data Breach & How a Cyber Liability Policy Comes In Handy

When it comes to cyber liability, three issues plague business. First, there are 47 states in the United States that have separate data breach laws that regulate what business owners must do when a data breach has occurred. Companies that stretch across more than one state have the complication of knowing and going by these laws. Second, there is the public relation issue – attempting to share you’ve had a data breach with customers in a way that won’t completely destroy your company. The leak of private, customer information can lead to lawsuits, too, which leads us to what’s next. Finally, there is the price tag:

“In 2016, the average cost for each lost or stolen record containing sensitive and confidential information is a hundred and forty-one dollars. This is down ten percent from the previous year, but still incredibly significant.” -Ponemon Data Breach Study

When all three of these issues become a certain reality for your business, you are past the point of being able to protect yourself. You need third-party cyber liability experts to step in and help you handle the laws, the PR, and the price tag. Cyber liability insurance policies are tailored to meet your company’s specific needs and as part of their data breach coverage can include forensic, legal and public relations support. It is important to remember that in today’s environment, no company is immune to the possibility of being a victim of cyber crime. However, there are some things you can do to lower your risk of a data breach.

  1. Employee Corporate Security Policy Education. Did you know it’s more common for an employee to unintentionally leak information than it is to be hacked? This is why it’s crucial to educate your employees on cyber risks, but also to have a clear, focused Corporate Security Policy in place.
  2. Encrypt ALL Confidential Data. Even the simplest of things should be encrypted. Plus, don’t use the same password on EVERYTHING. Have different passwords or codes for as many things as possible. That way, if someone were to hack you, then they can’t unlock everything. If you’re someone who forgets your passwords easily, have a notebook or binder where your company information resides and keep it under lock and key without expressed permission to use.
  3. Backup, Backup, Backup. Let’s say your company’s entire computer system is shut down by a virus and you lose everything. That’s a frightening scenario, right? So, avoid it by having backups and many of them. A general rule of thumb is having three solid backup methods. Perhaps you have a couple online storages where you keep files and an external hard drive. It doesn’t matter – just make sure you have it backed up!

There are also a couple of relevant, key issues Cathy wanted to update employers on:

  • Ransomware & Social Engineering Fraud. The biggest scams of today are these two cyber crimes. Both work to steal company information by acting as perfectly normal requests, surveys or even Facebook personas. Employees fall into their traps, giving out company information freely, not realizing it was under false pretenses. Never, ever give out company information – even on something that seems like an official document – without consulting your manager or boss, first.
  • Federal Communications Commission (FCC). The FCC provides a tool for small businesses that can create and save a custom cyber security plan for your company, choosing from a menu of expert advice to address your specific business needs and concerns. It can be found at www.fcc.gov/cyberplanner.

Don’t sit back and wait for cyber doomsday. Take your policy into your own hands, set company standards, and consider cyber liability insurance to help protect your business from the cost of a cyber attack.

At Hierl, Property & Casualty coverage is a partnership; not a product. We look at your entire organization, listen to you, assess your risk, develop a complete strategy and deliver a full-service solution. Our team of experts start by looking at your risk and helping you to gain Insight™ into what is in store for tomorrow. If you have any questions or are interested in knowing if Hierl’s cyber liability solutions is a good fit for you, please contact Cathy at 920.921.5921.


Point-of-sale wellness: How health plans are cashing in

With skyrocketing healthcare costs, payers constantly look for ways to reduce costs and improve health. Continue reading to learn more.


Health care costs continue to skyrocket, and payers are constantly looking for ways to keep their populations healthier and to reduce these costs. Payers looking for more effective strategies to improve health and wellness for members should be aware of the new preventative approaches that more health plans are offering.

One such method that health plans are deploying to engage members is point-of-sale wellness, a type of incentive program that encourages members to actively make healthier purchases and lifestyle choices. As point-of-sale wellness becomes more prevalent among health plans, human resource managers and benefits brokers should understand how these programs work to best determine if they would be a valuable option for their employees and clients.

What is point-of-sale wellness?

Point-of-sale wellness is all about helping health plan members make smart, healthy purchasing decisions when they’re in a retail store or pharmacy. According to the Henry J. Kaiser Family Foundation, the average consumer visits their doctor 3.1 times per year. This same consumer will visit his or her favorite retailers multiple times per week. This presents the perfect opportunity for actionable engagement. It is often too easy for individuals to make impulsive decisions that favor cheaper care items or junk food that provides instant gratification but lead to an unhealthy lifestyle in the long run. Empowering consumers in these moments before checking out at the register with the understanding — and more importantly, the financial incentive — to make informed, smarter choices can lead to a healthier lifestyle and reduced health care costs. In short, the goal is to help individuals prioritize health and wellness at retail point of sale.

There are numerous ways that health plans can achieve this goal. One of the most common is by providing members with prepaid cards that are loaded with funds and discounts for the purchase of over-the-counter (OTC) items such as vitamins, diabetes care items and medications for allergies or cold and flu symptoms. The key component of these specialized prepaid cards is that they can be restricted-spend cards. In other words, they cannot be used to purchase any items that the health plan members want; they can only be used to purchase items off a curated list of products.

Under this arrangement, all parties, from the individual to the health plans and retailers, benefit. With a restricted-spend prepaid card in hand, an individual is rewarded for making purchases that contribute to a healthier lifestyle, while reducing health care costs both for themselves and the health plans administering the cards. In the meantime, the retailers partnering with the health plans to make point-of-sale wellness possible enjoy the opportunity to build long-term customer relationships with the health plan members using the cards.

Point-of-sale wellness in action

Point-of-sale wellness can be customized to be as general or specific as a health plan needs. For example, a health plan that supports a high number of new parents on a regular basis may offer a prepaid card designed specifically to assist members with newborn children. The first years of an infant’s life are among the most expensive from a health care perspective. More health plans are starting to offer new parents prepaid cards that are loaded with funds and discounts for items such as OTC medications, baby food and formula, diapers, strollers, car seats or thermometers. This opens an easier path for new parents to do basic at-home diagnostics and keep their babies’ health monitored so costly trips to an emergency room or urgent care center are not needed as often.

Payers that offer health and wellness programs to assist new parents in their populations can consider engaging health plans that offer these types of prepaid cards. Having a healthier child has the added benefit of reducing stress on the parents, which means they are in a better position to continue performing in the workplace.

Financial incentives for healthier choices

Most wellness programs are focused on informing participants of the best ways to support a healthier lifestyle, but that is only half of the equation. Point-of-sale wellness goes one step further to ensure participants are empowered from a financial perspective to make smarter purchasing decisions while shopping for daily care items. Businesses and benefits brokers who want to provide their employees and clients the best opportunities to live a healthier lifestyle should consider engaging health plans that prioritize these prepaid card incentives into their offerings.

Vielehr, D. (19 July 2018). "Point-of-sale wellness: How health plans are cashing in" (Web Blog Post). Retrieved from https://www.benefitspro.com/2018/07/19/point-of-sale-wellness-how-health-plans-are-cashin/


What's the best combination of spending/saving with an HSA?

Did you know you could save for retirement by spending money? Health savings accounts (HSAs) are a new way for employees to save for retirement and pay for healthcare expenses. Read on to learn more about HSAs and how they can help you save for retirement.


The old adage, “You need to spend money to make money,” is applicable to many areas of life and business, but when it comes to retirement, not so much. Particularly for people who are enrolled in retirement accounts, like the 401(k) or IRA.

After all, the more you’re able to fund these accounts on a yearly basis, the sooner you’ll be able to accrue enough money to retire to that beach condo or cabin in the backcountry.  But in recent years, a newcomer has entered the retirement planning picture offering a novel new way to save money: By spending it.

The health savings account (HSA) has the potential to influence the spending/saving conundrum many young professionals face: Do I spend my HSA money on qualifying health care expenses (which can save me up to 40 percent on the dollar) or do I pay out of pocket for the same expenses and watch my HSA balance grow?

What many people don’t realize is that yearly HSA contributions are tax-deductible. So if account holders aren’t factoring in doctor co-payments, prescription drugs and the thousands of over-the-counter health products that tax-advantaged HSA funds can cover, they may be missing an opportunity to save in taxes each year.

By maximizing their contributions and paying with HSA funds as opposed to out-of-pocket, HSA users can cover products they were going to purchase anyway with tax-free funds, while using whatever is rolled over to save for retirement.

Spending more to save more. Who knew?

Here’s some food for thought that savvy employersshould consider sharing with employees of all ages.

Facts about health savings accounts (HSAs)

HSAs were created in 2003, but unlike flexible spending accounts (FSAs) that work on a year-to-year basis, HSAs have no deadlines and funds roll over annually. HSAs also feature a “triple tax benefit,” in that HSA contributions reduce your taxable income, interest earned on the HSA balance accrues tax free, and withdrawals for qualifying health expenses are not taxed.

Account holders can set aside up to $3,500 (2019 individual health plan enrollment limit) annually and $7,000 if participating in the health plan as two-person or family, and these funds can cover a huge range of qualifying medical products and services.

HSAs can only be funded if the account holder is enrolled in an HSA-qualified high-deductible health plan (HDHP). If the account holder loses coverage, he/she can still use the money in the HSA to cover qualifying health care expenses, but will be unable to deposit more funds until HDHP coverage resumes. The IRS defines an HSA-qualified HDHP as any plan with a deductible of at least $1,350 for an individual or $2,700 for a family (in 2019 – limits are adjusted each year).

Despite their relatively short lifespan, HSAs are among the fastest growing tax-advantaged accounts in the United States today. In 2017, HSAs hit 22 million accounts for the first time, but a massive growth in HSA investment assets is the real story. HSA investment assets grew to an estimated $8.3 billion at the end of December, up 53 percent year-over-year (2017 Year-End Devenir HSA Research Report).

However, while HSAs offer immediate tax benefits, they also have a key differentiator: the ability to save for retirement. HSA funds roll over from year to year, giving account holders the option to pay for expenses out of pocket while they are employed and save their HSA for retirement.

If account holders use their HSA funds for non-qualified expenses, they will face a 20% tax penalty. However, once they are Medicare-eligible at age 65, that tax penalty disappears and HSA funds can be withdrawn for any expense and  will only be taxed as income. Additionally, once employees  turn 55, they  can contribute an extra $1,000 per year to their HSAs, a “catch-up contribution,” to bolster their HSA nest eggs before retirement. When all is said and done, diligently funding an HSA can provide a major boost to employees’ financial bottom lines in retirement.

What’s the best HSA strategy by income level?

HSAs have immediate tax-saving benefits and long-term retirement potential, but they require different savings strategies based on your income level.

Ideally, if you have the financial means to do so, putting aside the HSA maximum each year may allow you to cover health expenses as they come up and continue saving for retirement down the road. But even if you’re depositing far below the yearly contribution limit, your HSA can provide a boost to your financial wellness now and in the future.

I’ve seen this firsthand. Before we launched our e-commerce store for all HSA-eligible medical products, we extensively researched the profiles of the primary HSA user groups through partnerships with HSA plan providers.

We then created “personas” that provide insights on how to communicate with different audiences about HSA management at varying points in the account holder’s life cycle, and these same lessons can be just as vital to employers.

The following contribution strategies are based on these personas and offer insights that could help employees get their HSA nest egg off and growing. These suggestions offer a means of getting started.

As employees receive pay raises and promotions, they may be able to increase their HSA contributions over time, but this can be a way to get their health care savings off the ground and then adjust to life with an HSA.

Disclaimer: These personas are for illustrative purposes only and in all cases you may want to speak with a tax or financial advisor. Information provided should not be considered tax or legal advice.

1. Employee Type: Millennials/Gen-Z with an income between $35-75k/year

For the vast majority of young professionals starting out, health care is not at the top of their budget priorities. However, high-deductible health plans have low monthly premiums, and by contributing to an HSA, an account holder can cover these expenses until the deductible is exhausted. For this group of employees, starting off small and gradually increasing contributions as income increases is a sound financial solution.

Potential Contribution Range: $1,000-$1,500

2. Employee Type: Full-Time HDHP Users Enrolled with an income between $35-60k/year

With many companies switching to all HDHP health plan options, a large contingent of workers find themselves using HDHPs for the first time. For this group, it’s all about finding the right balance between tax savings and the ability to cover necessary health expenses. Setting aside money in an HSA will allow workers to reduce how much they pay in taxes yearly by reducing their taxable income, while being able to pay down their deductible with HSA funds at the same time.

Potential Contribution Range: $1,000-$1,500

3. Employee Type: Staff with Families with an income between $75-100k/year

Low premiums from an HDHP plan are attractive for these employees, but parents will have far more health expenses to cover and more opportunities to utilize tax-free funds to cover health and wellness products. With more opportunities to spend down their deductible with qualifying health expenses and the resulting tax savings, parents should strive to put the family maximum contribution ($7000 for 2019) into their HSAs.

Potential Contribution Range:$4,000-$6,900

4. Employee Type: Pre-Retirement Staff with an income between $100-200k/year

Employees who are in their peak earning years have the greatest opportunity to put away thousands in tax-free funds through an HSA. So whenever possible, they should be encouraged to contribute the largest possible allocation to their HSA on a yearly basis. Additionally, employees age 55 and over can contribute an extra $1,000 to their HSA annually until they reach Medicare age at 65 to fast-track their HSA earnings.

Potential Contribution Range: HSA Maximum ($3,500 individual, $7,000 families for 2019)

What else should employers know about HSAs?

Employers can help employees get the most out of HSAs. Here are some tips:

  • Employers should consider contributing to their employees’ accounts on an annual basis. Employer contributions to an HSA are tax-deductible, and this has the added bonus for employees of making it easier to max out their contributions annually.
  • Remember: Employer and employee contributions cannot exceed the yearly HSA contribution limits ($3,500 individual, $7,000 family for 2019), so make this information clear to employees during open enrollment.
  • If employees are still on the fence about HSAs, remind them that deductible expenses can be paid for with HSA funds, and yearly HSA contributions are tax-deductible for employees as well.

SOURCE:
Miller, J (2 July 2018) "What's the best combination of spending/saving with an HSA?" [Web Blog Post]. Retrieved from https://www.benefitspro.com/2018/06/08/whats-the-best-combination-of-spendingsaving-with/


Improve workplace fitness by focusing on the collective "we"

Employees are more likely to try wellness programs if they know their coworkers are participating as well. In this article, Maurer discusses how focusing on the collective "we" will increase participation in employee wellness programs.


Workplace wellness programs are implicitly focused on the individual: biometric screenings, individual incentives, gym member reimbursements. This approach can leave employees feeling less than motivated to take part because, even though the programs focus is on the individual, by no means does it make the program personalized.

As workplace wellness programs rapidly improve to meet the expectations of today’s workers, it’s important to remember the value of accountability and what a culture of health can do to create a workplace committed to wellness solutions.

Since wellness programs have traditionally focused on the individual, oftentimes employees never know if their colleagues are participating in any of the programs being offered. Bring it into the light by giving your employees a program they want to talk about, while still keeping it personalized. The collective “we” are not only more likely to try a wellness program, but we are also more likely to stick with it, if we know our peers are also partaking.

The power of sharing with your peers

We all know writing down a goal gives you a much higher chance of achieving it, but research from the Association for Talent Development says someone is 65 percent more likely to achieve a goal if the goal is shared with another person. Why? Because it creates accountability.

We are in the day and age of a social media frenzy, and, it’s cross-generational. We share everything we do and spend a lot of our time concerned with what our friends, family and co-workers are doing through these social platforms. Wellness practitioners can and should be taking advantage of this, especially as you build your culture of health.

To find the right wellness solution for your company or client, look for solutions that are social and easy to use. If the company as a whole has buy-in, or even a few internal advocates, word-of-mouth can be incredibly powerful. Whether that is around the water-cooler at work, on employees’ personal social media channels, or within the work intranet, create opportunities for employees to talk about your program and encourage them to use it. We know when an employee knows a few of their coworkers are planning to attend yoga or kickboxing on a Tuesday evening, they are much more likely to sign up and actually go.

These “wellness relationships” help not only build stronger bonds at work, but they also help you create and maintain healthy habits. You want your employees to engage with your wellness solution, so encourage them to share and become part of the “solution” themselves. At the end of the day, workplace wellness solutions are there to help everyone get healthier and stay that way, but they have to use the program.

More than just an incentive

We have spent at least a decade looking at incentives and how we align them to solve problems with low participation in our wellness program, when we should have focused on building a program that empowers our employees and puts them in the driver’s seat. I’m not suggesting you stop incentivizing your employees, but I do suggest you measure what it is you are rewarding. If it can’t be measured you may as well burn the money you are investing.

Remember, your employees are the real reason your program will sink or swim. Take care of your employees and encourage them to be and find their healthiest selves. Empower them in the process and give them choice in how, when and with who they participate in your wellness program and let them become your wellness solution.

Maurer E. (18 July 2018). "Improving workplace wellness by focusing on the collective 'we'" (Web Blog Post). Retrieved from https://www.benefitspro.com/2018/07/18/improve-workplace-wellness-by-focusing-on-the-coll/.


House passes bills expanding health savings accounts

Changes may be coming to health savings accounts (HSAs). On Wednesday, two bills were passed by the House of Representatives that, if advanced, would expand the use of HSAs. Read this blog post to learn more.


The House of Representatives on Wednesday passed two healthcare bills that would expand the use of health savings accounts, a move that, if advanced, could significantly drive higher employee enrollment in high-deductible health plans that feature HSAs.

The Restoring Access to Medication and Modernizing Health Savings Accounts Act, or HR 6199, takes several steps to modernize HSAs by allowing plans to provide coverage before the deductible is met, increasing flexibility for retail and onsite clinics, and treating certain over-the-counter drugs as qualified medical expenses. It passed 277-142.

The Premium Plans and Expanding Health Savings Accounts Act, meanwhile, passed 242-176. It delays the tax on health insurance from taking effect by two years. It also allows people to contribute more money to their HSAs.

Some provisions of the measures, if they ultimately become law, “could have a large impact” on employee enrollment in high-deductible health plans that feature HSAs, according to Paul Fronstin, director of health research for the Employee Benefit Research Institute.

The HSA legislation was also praised as “a step in the right direction” by several industry insiders, including Ilyse Schuman, senior vice president of health policy of the American Benefits Council. The measure’s prospects for passage in the Senate are unclear, but Schuman said she was “hopeful” that will occur.

When HDHPs are accompanied by an HSA, employers face several constraints on plan design. For example, they cannot provide first-dollar coverage for certain “high value” features that would make the plans more attractive to employees with chronic conditions. That means an HDHP plan offered in conjunction with an HSA could not include first-dollar coverage for an eye exam for an employee with diabetes, or other services required for monitoring a chronic condition. Nor could treatment at on-site or retail primary care facility be covered on a first-dollar basis.

The proposed legislation “will allow insurers to provide coverage for and incentivize the use of high-value services that can reduce healthcare costs more broadly, such as primary care visits and telehealth services,” according to Rep. Luke Messer (R-IN), a sponsor of the legislation.

“We’ve advocated allowing these plans to offer broader and more meaningful coverage,” Schuman says. Other health services that could be provided on favorable basis include telemedicine-based consultations.

Dollar caps on first-dollar coverage for newly includable health services would be $250 for an employee with individual coverage, and $500 for an employee with family coverage.

Other liberalizations under the measures include allowing employees to use HSA dollars for certain over-the-counter health-related items, including menstrual care products. Another provision would deem qualified “physical activity, fitness, and exercise” related services, including sports activities, as qualified medical expenses, allowing coverage for up to $500 of qualified sports and fitness expenses ($1,000 for family coverage).

The bill also would increase employee HSA contribution limits substantially — to $6,900 (from today’s $3,450) for individual coverage, and to $13,300 (from $6,900) for families. However, EBRI’s Fronstin is skeptical these changes would have a significant impact on enrollment in HDHPs.

“Only 13% of participants contributed the maximum amount in 2016,” he says. While those employees might save more in an HSA under the higher limits, he doesn’t think there are any employees who have chosen not to participate in a HDHP on the basis that the savings caps are too low.

If the measure ultimately becomes law, employers would have to opt to take advantage of the liberalized provisions; they would not otherwise be available to employees.

SOURCE: Stolz, R. (26 July 2018) "House passes bills expanding health savings accounts" (Web Blog Post) Retrieved from https://www.benefitnews.com/news/house-passes-bills-expanding-health-savings-accounts?brief=00000152-14a7-d1cc-a5fa-7cffccf00000


Who are Benefits for, Anyway?

Why do employees turn down benefits offered to them by their employers? Continue reading to find out why and how employers can educate them about the benefits that are offered.


With many Americans living paycheck-to-paycheck, U.S. employees have a significant need for financial protection products to secure their income and guard against unplanned medical expenses. However, employees frequently decline these benefits when they are offered at the workplace. Only two-thirds of employees purchase life insurance coverage at work when given the option, while roughly half enroll in disability coverage and less than one-third select critical illness insurance coverage. Why do so many employees choose not to enroll in benefits?

Is this right for me?

Some employees may opt out of nonmedical benefits because they do not believe these offerings are intended for people like them. In a recent report, “Don’t Look Down: Employees’ Understanding of Benefits and Risk,” LIMRA asked employees whether they thought life, disability, and critical illness products were “right for someone like me.”

While a majority of employees feels that life insurance coverage is appropriate for someone like them, they are on the fence about other coverages. Fewer than half believe they need disability insurance and only 36 percent feel they need a critical illness policy.

It is also noteworthy that a large portion of employees respond neutrally or only slightly agree or disagree with these sentiments, which suggests a lot of uncertainty. Given employees’ poor understanding of these benefits, many simply do not know if the coverage is intended for them.

Role of behavioral economics

Behavioral economics reveals that human behavior is highly influenced by social norms, particularly among groups that people perceive to be similar to themselves. In light of this, LIMRA asked employees if they think most people like them own certain insurance products. Their responses indicate that employees feel very little social pressure to enroll in these benefits.

Only 22 percent of employees think most people like them are covered by critical illness insurance, while 47 percent disagree. Similarly, 38 percent disagree that most people like them have disability coverage (versus only 34 percent who agree). Life insurance is the only product where a majority of employees (60 percent) think most others like them have the coverage.

Employees who believe others like them purchase benefits will tend to be influenced by this peer behavior. This could lead them to take a closer look at the information provided about these benefits and possibly enroll.

However, for the larger group of employees who think others like them do not have coverage, social pressure will discourage them from enrolling. These employees will perceive not having coverage to be the “norm” and assume it is safe to opt out, without giving these benefits proper consideration.

Who should purchase benefits?

If employees do not think insurance benefits are right for them, who do they believe these products are intended for?

Of employees who are offered disability insurance at work, only 38 percent recognize that anyone with a job who relies on their income should purchase this coverage. Troublingly, more than 1 in 5 think disability insurance is only for people with specific risk factors, such as having a physical or dangerous job, a family history of cancer, or a current disability.

Similarly, less than half of employees recognize that critical illness insurance is right for anyone. One in five think this coverage is only for people with a family history of cancer or other serious illness, while 15 percent believe the coverage is for people who have personally been diagnosed with a serious health condition.

Employees have a better understanding of life insurance. Eighty percent of employees recognize that life insurance is appropriate for anyone who wants to leave money to their spouse or dependents upon their death. However, some employees still express uncertainly about this or believe life insurance is only for high-risk individuals.

Confusion about who should purchase insurance benefits is contributing to low employee participation in these offerings. To counteract this trend, educating employees to understand how these products apply to their own lives is crucial. By clearly explaining what the products do and providing examples of how anyone could use them, benefit providers can help employees see the relevance of these offerings and help them make more informed financial decisions.

SOURCE:
Laundry, K (12 July 2018). "Who are benefits for, anyway?" [Web Blog Post]. Retrieved from https://www.benefitspro.com/2018/07/12/who-are-benefits-for-anyway/


Cryptocurrencies and what they mean for businesses

Technology has added efficiency and modern conveniences to daily life. Among these conveniences, computer experts have managed to apply digital traits to new, online currencies that are commonly called cryptocurrencies.

Simply put, cryptocurrency is digital money that operates independently of a bank and can be used similarly to cash around the world. However, the digital nature of these new currencies add some benefits that appeal to consumers and have led to their increasing popularity. Bitcoin—the most popular cryptocurrency—was declared legal tender in Japan in 2017, and online services like Microsoft, Overstock and PayPal also accept the currency.

While it can be easy to get caught up in the excitement and potentially lucrative nature of cryptocurrencies, it’s important to understand how they work as well as their positives, negatives and risks.

How Do Cryptocurrencies Work?

While it may seem confusing on the surface, the way cryptocurrencies function is actually quite simple. Like most currencies used around the world, cryptocurrencies store value, have specific exchange rates and are limited in supply. However, most cryptocurrencies are decentralized and work without administrators, and instead rely on encryption technology and verification to make transfers. This means that there is no central authority that manages the creation and use of cryptocurrency.

In the place of a central authority, most cryptocurrencies implement a network that allows users to make transactions directly between each other. These networks use a shared system of private keys and public ledgers to authenticate new transactions and create an encrypted log of past transactions. Bitcoin, the first cryptocurrency to implement this form of authentication, encourages users to participate in the system by rewarding them with additional bitcoins. In fact, this is the only way that new bitcoins circulate.

Despite concerns over cryptocurrencies like bitcoin, they aren’t going anywhere soon as an alternative method of payment, investment or means of raising capital.

To use cryptocurrencies, consumers and businesses must first acquire a cryptocurrency wallet account. These accounts work like a bank, but are designed specifically for individuals who want to purchase or accept cryptocurrency. Most cryptocurrency coins have an official wallet or recommended third-party wallets, and it’s important to conduct thorough research before choosing a service.

After you have acquired a wallet, you can purchase cryptocurrencies on open exchanges and use them for a variety of transactions. You can even convert cryptocurrencies to cash at a later date if you so choose.

The Positives and Negatives of Cryptocurrencies

Before adopting cryptocurrency at your business, you must consider how this new technology’s benefits and drawbacks may impact your operations.

The Benefits of Cryptocurrencies

  • Little or no processing fees—Unlike credit cards and other traditional forms of payment, cryptocurrencies often have no processing fees. This is because transactions are facilitated through the cryptocurrency’s public network on what’s known as a blockchain. Transactions are recorded on the blockchain chronologically, and users can create, verify and enforce transactions without an intermediary or central authority.
  • High transaction speed—Credit and debit card payments often take two to three days to process and clear. With cryptocurrencies, transactions happen in real time and take about 10 minutes or less. As an added bonus, cryptocurrency transactions are final, which means consumers can’t dispute a charge and negate a sale.
  • Increased payment options—The more payment options you can provide as a business, the better. As such, cryptocurrency has the potential to attract a wider customer base.

The Drawbacks of Cryptocurrencies

  • Price volatility—The value of bitcoins and other cryptocurrencies can change drastically over a small period of time. Bitcoin reached a value of $17,000 in January 2018 before falling to $7,000 less than a month later.
  • Anonymity—While the details of cryptocurrency users and transactions are often held in a public ledger, names and locations are encrypted. This can be an issue when complying with regulations on customer identification or fraud protection.
  • Cyber security—Cryptocurrencies exist digitally, and the proof of ownership is often limited to the private keys used to authenticate transactions. This makes cryptocurrencies a prime target for hackers, especially because many businesses aren’t aware of how to protect this new form of currency.

Should You Accept Cryptocurrency?

While global companies like Amazon and Microsoft accept cryptocurrency, that doesn’t necessarily mean it’s right for your organization, especially if you’re a small business. Before using cryptocurrency, it’s important to conduct adequate research and understand how it may impact your company. In addition, you should speak to a qualified insurance broker to determine how using cryptocurrency opens you up to new risks.

To learn more, contact Hierl Insurance Inc. today.

Download the PDF here.


Compliance Recap June 2018

June was a relatively quiet month in the employee benefits world.

The U.S. Department of Labor issued final regulations regarding association health plans. The U.S. Department of Justice filed a response in ongoing litigation regarding the constitutionality of the Patient Protection and Affordable Care Act. The Centers for Medicare and Medicaid Services released a form that certain plan sponsors will use for reporting limited wraparound coverage.

UBA Updates

UBA released two new advisors:

UBA updated existing guidance:

DOL Issues Final Regulations Regarding Association Health Plans

On June 19, 2018, the U.S. Department of Labor (DOL) published Frequently Asked Questions About Association Health Plans (AHPs) and issued a final rule that broadens the definition of “employer” and the provisions under which an employer group or association may be treated as an “employer” sponsor of a single multiple-employer employee welfare benefit plan and group health plan under Title I of the Employee Retirement Income Security Act (ERISA).

The final rule is intended to facilitate adoption and administration of AHPs and expand health coverage access to employees of small employers and certain self-employed individuals.

The final rule will be effective on August 20, 2018. The final rule will apply to fully-insured AHPs on September 1, 2018, to existing self-insured AHPs on January 1, 2019, and to new self-insured AHPs formed under this final rule on April 1, 2019.

Read more about the final rule.

Status of Court Case Challenging ACA Constitutionality

In June 2018, the U.S. Department of Justice (DOJ) filed a response in ongoing litigation regarding the individual mandate and the Patient Protection and Affordable Care Act (ACA).

As background, earlier this year, twenty states filed a lawsuit asking the U.S. District Court for the Northern District of Texas to strike down the ACA entirely. The lawsuit came after the U.S. Congress passed the Tax Cuts and Jobs Act in December 2017 that reduced the individual mandate penalty to $0, starting in 2019.

The DOJ argues that the individual mandate is unconstitutional without the penalty. The DOJ also argues that because the guaranteed issue and community rating provisions are inseverable from the individual mandate, the guaranteed issue and community rating provisions are also unconstitutional.

Further, the DOJ argues that because the individual mandate penalty of $0 starts in 2019, the district court should not immediately strike the individual mandate, guaranteed issue, and community rating portions of the ACA. Instead, the DOJ asks the district court to declare that the individual mandate, guaranteed issue, and community rating provisions will be unconstitutional as of January 1, 2019.

It’s too early to determine whether the plaintiffs, the DOJ, or the other defendants will prevail in their arguments. Even if the district court makes a decision in the next few weeks, its decision will likely be appealed.

Read more about this case.

CMS Releases Form for Reporting Wraparound Excepted Benefits

Under a 2015 final rule by the Internal Revenue Service, U.S. Department of Labor, and U.S. Department of Health and Human Services, certain employers may offer limited wraparound coverage under one of two narrow pilot programs.

These wraparound benefits are considered an excepted benefit and are generally exempt from certain requirements of federal laws, including ERISA, the Internal Revenue Code, and parts of the Patient Protection and Affordable Care Act.

Under the final rule, plan sponsors who offer limited wraparound coverage have reporting requirements. In December 2017, the Centers for Medicare and Medicaid Services (CMS) issued a notice for comments on a proposed reporting form.

On June 25, 2018, the CMS published its Reporting Form for Plan Sponsors Offering Limited Wraparound Coverage. A plan sponsor of limited wraparound coverage must file the form once, within 60 days of the form’s publication (by August 24, 2018), or 60 days after the first day of the first plan year that limited wraparound coverage is first offered.

Read more about limited wraparound coverage.

Question of the Month

  1. Who must pay the Patient-Centered Outcomes Research Institute (PCORI) fee and when is the fee due?
  2. The fee must be determined and paid by:
  • The insurer for fully insured plans (although the fee likely will be passed on to the plan)
  • The plan sponsor of self-funded plans, including HRAs
    • The plan’s TPA may assist with the calculation, but the plan sponsor must file IRS Form 720 and pay the applicable fee
    • If multiple employers participate in the plan, each must file separately unless the plan document designates one as the plan sponsor

The fee is due by July 31 of the year following the calendar year in which the plan/policy year ends. For example:

Plan/Policy Year Year Fee Is Due ($2.26, indexed/ person) Plan/Policy Year  Year Fee Is Due ($2.39, indexed/
person)
Nov. 1, 2015 - Oct. 31, 2016 July 31, 2017 Nov. 1, 2016 - Oct. 31, 2017 July 31, 2018
Dec. 1, 2015 - Nov. 30, 2016 July 31, 2017 Dec. 1, 2016 - Nov. 30, 2017 July 31, 2018
Jan. 1, 2016 - Dec. 31, 2016 July 31, 2017 Jan. 1, 2017 - Dec. 31, 2017 July 31, 2018
Feb. 1, 2016 - Jan. 31, 2017 July 31, 2018 Feb. 1, 2017 - Jan. 31, 2018 July 31, 2019
March 1, 2016 - Feb. 28, 2017 July 31, 2018 March 1, 2017 - Feb. 28, 2018 July 31, 2019
April 1, 2016 - March 31, 2017 July 31, 2018 April 1, 2017 - March 31, 2018 July 31, 2019
May 1, 2016 - April 30, 2017 July 31, 2018 May 1, 2017 - April 30, 2018 July 31, 2019
June 1, 2016 - May 31, 2017 July 31, 2018 June 1, 2017 - May 31, 2018 July 31, 2019
July 1, 2016 - June 30, 2017 July 31, 2018 July 1, 2017 - June 30, 2018 July 31, 2019
Aug. 1, 2016 - July 31, 2017 July 31, 2018 Aug. 1, 2017 - July 31, 2018 July 31, 2019
Sept. 1, 2016 - Aug. 31, 2017 July 31, 2018 Sept. 1, 2017 - Aug. 31, 2018 July 31, 2019
Oct. 1, 2016 - Sept. 30, 2017 July 31, 2018 Oct. 1, 2017 - Sept. 30, 2018 July 31, 2019

7/3/2018

Download the PDF here.


How to help millennials tackle 2 major financial pain points

Researchers say 65 percent of millennials reported being stressed about their finances. Read to find out why millennials are the most reluctant to face their financial struggles head on.


Stress. Shame. Confusion. Embarrassment.

That’s what comes to mind for millennial employees when they think about their personal finances. It’s draining employees’ ability to stay focused on the work at hand and maximize their creativity and productivity. According to a 2017 PWC Employee Financial Wellness Survey, 65 percent of millennials reported being stressed about their finances. Additionally, approximately one-third of employees report being distracted by personal finance issues while at work, with almost half of them spending three hours or more each week handling these matters during the work day.

While employee financial stress is not new, it’s particularly strong among millennials. This group is experiencing many firsts. They are the first generation to face such a large student loan debt crisis. They are the first to need to save enough money to fund retirements that may be the longest in human history. These are no small challenges.

With millennials set to comprise 50 percent of the global workforce in less than two years, it is essential that employers help this group garner the tools necessary to experience financial calm, clarity, and confidence in the face of these challenges. But first, we need to understand why millenials are reluctant to address their financial concerns head-on.

Millennial employees are distracted by money shame

Millennials tend to be a pretty outspoken group. So why are they not speaking up more about their financial stress and the degree to which it distracts them at work?

A big part of this is overarching “money shame.” After years of schooling and higher education, it frankly can feel embarrassing to admit one is struggling with money issues. This is particularly true if the money issues are due to student loan debt – a kind of “good debt” that was supposed to make their lives better. Many millennials are wondering how they can feel so bad (financially) when they “did all the right things” (educationally). As an employer, you need to recognize this money shame is causing your millennial employees to hold back asking for help.

How employers can help their millennials overcome money fears

Employers can help their millennial employees overcome their money woes by providing financial wellness education around the two areas causing the most financial stress for millennials: student loan debt and saving for retirement.

Both of these topics can be extremely overwhelming so baby steps are key. A good introduction to both of these topics could be an educational video laying the groundwork for the big concepts that need to be addressed to help ease employees into the reality of dealing with each of these vital issues.

With regard to student loans, the education here is trickier, as some employees will have government loans, some may have private loans and some may have a combination of both. Providing basic educational lunch-and-learn type lectures to review the role of budgeting in finding the extra funds to accelerate debt paydown, and to discuss various options for consolidation, income based repayment plans and other options can help give employees a sense of relief that they have some tools and information they can use.

When it comes to retirement, many 401k and 403b providers offer onsite education for plan participants. Instructing these providers to focus heavily on these three points can go a long ways towards helping millennials understand how to make smart choices here:

1. The mathematical impact of saving early (i.e. a dollar saved and invested for your retirement in your mid 20s is four to five times more valuable than a dollar saved in your mid 40′s due to the power of compounding).

2. It’s not enough to save for retirement; wise investment choices must be made too (and often the smartest and most cost effective decision here is to use target date retirement funds composed of underlying index funds).

3. The extremely positive mathematical implications of contributing to a retirement plan at least to the point of the employer’s match (i.e. that this is literally “free” money and equates to a guaranteed rate of return; if you are matched $0.50 on the $1.00 that’s a guaranteed 50 percent return which you will not get anywhere else!)

While there are very few “sure things” in the business world, investing in reducing millennial employee financial stress and increasing work enjoyment and productivity has the potential to generate positive “human capital” dividends for years to come.

SOURCE:
Thakor M (13 July 2018) "How to help millennials tackle 2 major financial pain points" [Web Blog Post]. Retrieved from https://www.benefitspro.com/2018/07/02/how-to-help-millennials-tackle-2-major-financial-p/


Self-driving tech could put motor carriers back in the driver’s seat

Self-driving vehicles may feel like something that will only be available in the distant future, but autonomous technology is already having an impact on the transportation industry. Many motor carriers are promoting new equipment to attract tech-savvy drivers, and advanced safety sensors are helping decrease accidents on the road.

Over 30 automakers and technology companies are working to make trucks fully autonomous, and many states have already passed self-driving legislation that allows for testing on public roads. But, even though this technology offers motor carriers a way to increase efficiency and improve safety, there are a number of topics your business needs to consider before adopting self-driving trucks.

The Different Levels of Automation

Most of the technology used in autonomous vehicles is an evolution of common safety features that use vehicle-mounted cameras and sensors, such as automatic brakes, lane departure systems and blind spot alerts. However, self-driving technology takes this concept a step further by having these systems work together to perform some or all driving functions.

Because there are multiple self-driving systems in development that offer different levels of autonomy, most companies use a system developed by SAE International to classify levels of autonomous vehicles. Levels 0-2 mainly define limited control systems that are commonly available in consumer and commercial vehicles:

  • Level 0: No automation—The driver performs all driving tasks, but automated system issue warnings may be present.
  • Level 1: Driver assistance—The vehicle and driver may share control in limited circumstances, such as adaptive cruise control and parking assistance. However, the driver must be ready to retake control at all times.
  • Level 2: Partial automation—The vehicle has combined automatic functions (such as controlling acceleration and steering simultaneously), but the driver must be constantly engaged and aware of the surrounding environment.

Self-driving trucks can offer motor carriers a way to increase efficiency and improve safety, but there are a number of topics to consider before these vehicles are adopted widely.

Levels 3-5 define vehicles that are commonly referred to as autonomous or self-driving:

  • Level 3: Conditional automation—A driver must still be present, but doesn’t have to monitor the environment. However, they must be ready to take control at all times and with no notice.
  • Level 4: High automation—The vehicle can perform all driving functions under certain conditions, and switching control back to the driver may be optional.
  • Level 5: Full automation—The vehicle can perform all driving functions at all times.

How Can Self-driving Trucks Help Carriers?

Self-driving trucks could help motor carriers address a number of common issues:

  • Safety—Properly functioning self-driving systems operate without the chance of human error and can react to changing traffic patterns faster than a regular driver.
  • Driver shortage—Regulations likely won’t allow vehicles to operate without a driver in the near future. However, the technology will attract applicants who don’t want to spend long stretches of time in full control of a commercial truck.
  • Increased efficiency—Autonomous technology can give carriers real-time information on location, maintenance status and traffic patterns in order to increase efficiency and better manage fleets.
  • Cost reductions—Motor carriers can reduce costs by sending autonomous trucks on more fuel-efficient routes or by platooning the vehicles together to reduce air drag.

What Risks Does This Technology Present?

Although autonomous technology is advancing rapidly, there are still a number of risks and obstacles to overcome before the vehicles can be widely adopted:

  • Public perception—Advanced sensors generally make self-driving trucks safe, but recent high-profile collisions and fatalities during tests have lowered the public’s opinion of the technology.
  • Long-term employment—Autonomous technology will help to attract new drivers in the near future, but some experts believe that fully independent vehicles may someday eliminate millions of jobs.
  • Liability—The liability of an accident involving human-driven vehicles is fairly easy to judge. However, self-driving trucks bring a nonhuman factor into the equation that makes it difficult to determine if an operator, technology developer, manufacturer or other party is at fault for an accident.
  • Compliance—Individual states, cities and jurisdictions currently manage laws regarding the testing and use of self-driving trucks, making interstate commerce more complicated. However, the FMCSA recently requested feedback on the regulations that would have to be updated, modified or eliminated to safely allow for the use of autonomous vehicles. Key questions discussed by the agency include the following:
    • How will motor carriers ensure automatic systems are functioning properly?
    • What changes, if any, should be made to distracted driving regulations?
    • How will enforcement officials determine a vehicle’s SAE classification level, and would easily identifiable classification signage negatively affect other drivers?
    • How should a driver’s hours of service be recorded when using an automated driving system?

Considering Your Options

As self-driving vehicles continue to develop, your business should carefully consider how both the advantages and risks of this new technology will impact its operations. Contact us at 920-921-5921 today for help analyzing your unique risk exposures.

Download the PDF here.