Health Reform Expert: Here’s What HR Needs to Know About GOP Repeal Bill Passing

The House of Repersentives has just passed the American Health Care Act (AHCA), new legislation to begin the repeal process of the ACA. Check out this great article from HR Morning and take a look how this new legislation will affect HR by Jared Bilski.

Virtually every major news outlet is covering the passage of the American Health Care Act (AHCA) by the House. But amidst all the coverage, it’s tough to find an answer to a question that’s near and dear to HR: What does this GOP victory mean for employers? 

The AHCA bill, which passed in the House with 217 votes, is extremely close to the original version of the legislation that was introduced in March but pulled just before a vote could take place due to lack of support.

While the so-called “repeal-and-replace” bill would kill many of the ACA’s taxes (except the Cadillac Tax), much of the popular health-related provisions of Obamacare would remain intact.

Pre-existing conditions, essential benefits

However, the new bill does allow states to waive certain key requirements under the ACA. One of the major amendments centers on pre-existing conditions.

Under the ACA, health plans can’t base premium rates on health status factors, or pre-existing conditions; premiums had to be based on coverage tier, community rating, age (as long as the rates don’t vary by more than 3 to 1) and tobacco use. In other words, plans can’t charge participants with pre-existing conditions more than “healthy” individuals are charged.

Under the AHCA, individual states can apply for waivers to be exempt from this ACA provision and base premiums on health status factors.

Bottom line: Under this version of the AHCA, insurers would still be required to cover individuals with pre-existing conditions — but they’d be allowed to charge astronomical amounts for coverage.

To compensate for the individuals with prior health conditions who may not be able to afford insurance, applying states would have to establish high-risk pools that are federally funded. Critics argue these pools won’t be able to offer nearly as much coverage for individuals as the ACA did.

Under the AHCA, states could also apply for a waiver to receive an exemption — dubbed the “MacArthur amendment” — to ACA requirement on essential health benefits and create their own definition of these benefits.

Implications for HR

So what does all this mean for HR pros? HR Morning spoke to healthcare reform implementation and employee benefits attorney Garrett Fenton of Miller & Chevalier and asked him what’s next for the AHCA as well as what employers should do in response. Here’s a sampling of the Q&A:

HR Morning: What’s next for the AHCA?
Garrett Fenton: The Senate, which largely has stayed out of the ACA repeal and replacement process until now, will begin its process to develop, amend, and ultimately vote on a bill … many Republican Senators have publicly voiced concerns, and even opposition, to the version of the AHCA that passed the House.

One major bone of contention – even within the GOP – was that the House passed the bill without waiting for a forthcoming updated report from the Congressional Budget Office.  That report will take into account the latest amendments to the AHCA, and provide estimates of the legislation’s cost to the federal government and impact on the number of uninsured individuals …

… assuming the Senate does not simply rubber stamp the House bill, but rather passes its own ACA repeal and replacement legislation, either the Senate’s bill will need to go back to the House for another vote, or the House and Senate will “conference,” reconcile the differences between their respective bills, and produce a compromise piece of legislation that both chambers will then vote on.

Ultimately the same bill will need to pass both the House and Senate before going to the President for his signature.  In light of the House’s struggles to advance the AHCA, and the razor-thin margin by which it ultimately passed, it appears that we’re still in for a long road ahead.

HR Morning: What should employers be doing now?
Garrett Fenton: At this point, employers would be well-advised to stay the course on ACA compliance. The House’s passage of the AHCA is merely the first step in the legislative process, with the bill likely to undergo significant changes and an uncertain future in the Senate. The last few months have taught us nothing if not the impossibility of predicting precisely how and when the Republicans’ ACA repeal and replacement effort ultimately will unfold.  To be sure, the AHCA would have a potentially significant impact on employer-sponsored coverage.

However, any employer efforts to implement large-scale changes in reliance on the AHCA certainly would be premature at this stage.  The ACA remains the law of the land for the time being, and there’s still a long way to go toward even a partial repeal and replacement.  Employers certainly should stay on top of the legislative developments, and in the meantime, be on the lookout for possible changes to the current guidance at the regulatory level.

HR Morning: Specifically, how should employers proceed with their ACA compliance obligations in light of the House passage of the AHCA?Garrett Fenton: Again, employers should stay the course for the time being, and not assume that the AHCA’s provisions impacting employer-sponsored plans ultimately will be enacted.  The ACA remains the law of the land for now.  However, a number of ACA-related changes are likely to be made at the regulatory and “sub-regulatory” level – regardless of the legislative repeal and replacement efforts – thereby underscoring the importance of staying on top of the ever-changing guidance and landscape under the Trump administration.

Fenton also touched on how the “MacArthur amendment” and the direct impact it could have on employers by stating it:

“… could impact large group and self-funded employer plans, which separately are prohibited from imposing annual and lifetime dollar limits on those same essential health benefits.  So in theory, for example, a large group or self-funded employer plan might be able to use a “waiver” state’s definition of essential health benefits – which could be significantly more limited than the current federal definition, and exclude items like maternity, mental health, or substance abuse coverage – for purposes of the annual and lifetime limit rules.  Employers thus effectively could be permitted to begin imposing dollar caps on certain benefits that currently would be prohibited under the ACA.”

See the original article Here.

Source:

Bilski J. (2017 May 5). Health reform expert: here’s what HR needs to know about GOP repeal bill passing [Web blog post]. Retrieved from address http://www.hrmorning.com/health-reform-expert-heres-what-hr-needs-to-know-about-gop-repeal-bill-passing/


10 Things Your Employees Should Know About Social Security

Do you need help educating your employees on the importance of social security? Here is an interesting article form SHRM about the 10 things your employees should know about their social security by Irene Saccoccio.

Social Security is with you throughout life’s journey. Yet, most people don’t know about Social Security’s 80-plus-year legacy or all we have to offer. National Social Security Month is the perfect time to talk to your employees about some of the ways we help secure today and tomorrow.

1.     Social Security provides an inflation-protected benefit that lasts a lifetime. Social Security benefits are based on how long your employees have worked, how much they’ve earned, and when they start receiving benefits.

2.     Social Security touches the lives of nearly all Americans, often during times of personal hardship, transition, and uncertainty. It is important your employees understand the benefits we offer.

3.     We are more than just retirement. Social Security provides financial security to many children and adults before retirement, including the chronically ill, children of deceased parents, and wounded warriors.

4.     We put your employees in control by offering convenient services that fit their needs. For example, a personal my Social Security account is the fastest, most secure way for your employees to do business with us. They can verify their earnings, check their Social Security Statement, get a benefit verification letter, and more. They should open a my Social Security account today.

5.     Your employees can estimate their future retirement or disability benefits by using our Retirement Estimator. It gives estimates based on their actual earnings record, which can be invaluable as they plan for their future.

6.     Your employees can apply for benefits online by completing an application for retirementspousesMedicare, or disability benefits from the comfort of their home or preferred secure location.

7.     We offer veterans expedited disability claims processing. Benefits available through Social Security are different than those from the Department of Veterans Affairs and require a separate application.

8.     Medicare beneficiaries with low resources and income can qualify for Extra Help with their Medicare prescription drug plan costs. The Extra Help is estimated to be worth about $4,000 per year.

9.     Social Security is committed to making our information, programs, benefits, services, and facilities accessible to everyone. We will provide your employees, free of charge, with a reasonable accommodation to participate in, and enjoy the benefits of, Social Security programs and activities.

10.Social Security is committed to protecting your employees’ identity and information and safeguarding their personally identifiable information. Our online services feature a robust verification and authentication process, and they remain safe and secure.

Invite your employees to visit www.socialsecurity.gov today and learn how we help secure today and tomorrow.

See the original article Here.

Source:

Saccoccio I. (2017 April 19). 10 things your employees should know about social security [Web blog post]. Retrieved from address https://blog.shrm.org/blog/10-things-your-employees-should-know-about-social-security


Healthcare Services: Employees Want to Find Less Costly Care, but Need HR’s Help

Have your employees been looking for new ways to reduce their healthcare cost? Check out this article from HR Morning on how HR can be a great tool for helping your employees find the best healthcare for their budget by Jared Bilski.

HR pros have been urging employees to ask questions and shop around for less-costly, high quality health care for years now — and it looks like many employees are finally heeding the call.

That’s the good news regarding healthcare cost transparency.

Step in the right direction

Specifically, 50% of individuals have tried to find out how their health care would cost before getting care, according to a recent report by the Public Agenda and the Robert Wood Johnson Foundation.

A little more than half (53%) of the individuals who compared the prices of common healthcare services did, in fact, save money.

The report also broke down the various places employees turned to for price info before getting medical care and found:

  • 55% went to a friend, relative or colleague
  • 48% went to their insurance company (by phone or online)
  • 46% went to their doctor
  • 45% asked a receptionist or other doctor’s office staffer
  • 31% went to the hospital billing department
  • 29% asked a nurse
  • 20% relied on the Internet (other than their insurance company’s website), and
  • 17% used a mobile phone app.

Another encouraging finding from the report: Employees don’t think saving money on healthcare services means receiving lower quality care. In fact, 70% of individuals said higher prices aren’t a sign of better quality healthcare.

The bad news

But the report wasn’t all good news.

For one thing, many employees are painfully unaware of the disparity in pricing for similar healthcare services. In fact, fewer than 50% of Americans are aware that hospitals and doctor’s prices can vary.

There are also problems when employees do inquire or shop around for less costly health care.

Sixty three percent of Americans say there isn’t enough information about how much medical services cost.

And when employees do at least inquire about cost before seeking treatment, most don’t think the next and most critical step: comparing multiple providers’ prices. Just 20% of the study respondents who asked about pricing went on to compare pricing.

Where HR comes in

Overall, the report is good news for employers, and firms should take the findings as evidence employees are finally ready to help find ways to lower the company’s overall health costs.

But it’s up to HR pros to help them succeed.

One way: Rolling out “how to” session on healthcare service comparison tools and finding providers — and this is especially important for small- and mid-sized companies. Employees at these firms are more likely to seek medical services based solely on location.

As Tibi Zohar, president and CEO of DoctorGlobe put it:

“The reality for most small to mid-size companies is that their health plan members tend to continue to seek health care at the nearest hospital or the one recommended by their doctors or friends.”

Another effective tactic: Adding incentives when employees use cost transparency tools in the form of premium discounts, contributions to HSAs or FSAs or even old-fashioned gift cards.

Remember, the transparency tools are those that employees can relate to personally and show exactly how much they will pay out-of-pocket for medical services.

See the original article Here.

Source:

Bilski J. (2017 April 21). Healthcare services: employees want to find less costly care, but need HR’s help [Web blog post]. Retrieved from address http://www.hrmorning.com/healthcare-services-employees-want-to-find-less-costly-care-but-need-hrs-help/


An Employer’s Guide to Navigating the ACA’s Strong Headwinds

Great article from our partner, United Benefit Advisors (UBA) by Michael Weiskirch.

One might describe the series of events leading to the death of the American Health Care Act (Congress’s bill to repeal and replace the Affordable Care Act) as something like a ballistic missile exploding at launch. The Patient Protection and Affordable Care Act (ACA) repeal debate began nearly a decade ago with former President Barack Obama’s first day in office and reemerged as a serious topic during the 2016 presidential election. Even following the retraction of the House bill, repeal of the ACA remains a possibility as the politicians consider alternatives to the recent bill. The possibility of pending legislation has caused some clients to question the need to complete their obligation for ACA reporting on a timely basis this year. The legislative process has produced a great deal of uncertainty which is one thing employers do not like, especially during the busy year end.

While the “repeal and replace” activity is continuing, it is imperative that employers and their brokers put their noses to the grindstone to fulfill all required reporting requirements. To accomplish this, employers will need brokers that can effectively guide them through this tumultuous season. We recommend that employers ask their brokers about their strategies for

  • Implementing the employer shared responsibility reporting
  • Sending all necessary forms to the employer’s employees
  • Submitting the employer’s reporting to the IRS
  • Closing out the employer’s 2016 filing season

Employers should also inquire about any additional support that the broker provides. They should provide many of the services that we at Health Cost Manager provide to our clients: They should apprise their clients of the latest legislative updates through regular email communication and informational webinars. Brokers should also bring in experts in the field that have interacted with key stakeholders in Washington. And most important, they should remain available during this uncertain period to answer any questions or concerns from clients.

We know employers would prefer not to have to comply with these reporting obligations – many have directly told us so. We understand this requires additional work on their part to gather information for the reporting and increased compliance responsibility. Knowing how stressful the reporting season can be for employers, brokers should go out of their way to help their clients feel confident that they can steer through the reporting process smoothly. The broker’s role should be to take as much of the burden off the employer’s shoulders as possible to enable them to reach compliance in the most expedient manner possible. Sometimes this involves stepping in to solve data or other technical issues, or answering a compliance-related question that helps the client make important decisions. It’s all part of helping employers navigate through the ACA’s strong headwinds during these uncertain times.

Audit-proof your company with UBA’s latest white paper: Don’t Roll the Dice on Department of Labor Audits. This free resource offers valuable information about how to prepare for an audit, the best way to acclimate staff to the audit process, and the most important elements of complying with requests.

See the original article Here.

Source:

Weiskirch M. (2017 April 13). An employer’s guide to navigating the ACA’s strong headwinds [Web blog post]. Retrieved from address http://blog.ubabenefits.com/an-employers-guide-to-navigating-the-acas-strong-headwinds


Starting Early is Key to Helping Younger Workers Achieve Financial Success

Starting early is the best way to ensure dreams for life after work are realized, but when TIAA analyzed how Gen Y is saving for retirement, it found 32 percent are not saving any of their annual income for the future.

Knowing the importance of working with young people early in their careers to educate them about the merits of saving for a secure financial future, here are some approaches tailored to Gen Y participants:

  • Encourage enrollment, matching and regular small increases – Enrolling in an employer-sponsored retirement plan is a critical first step for Gen Y participants. Contributing even just a small amount can make a big difference, especially since younger workers benefit most from the power of compounding, which allows earnings on savings to be reinvested and generate their own earnings.

    Encouraging enrollment also helps younger workers get into the habit of saving consistently, and benefit from any matching funds. Emphasize the benefits of employer matching contributions as they help increase the amount being saved now, which could make a big impact down the line. Lastly, encourage regular increases in saving, which can be fairly painless if timed to an annual raise or bonus.

  • Help younger workers understand how much is enough – We believe the primary objective of a retirement plan is offering a secure and steady stream of income, so it’s important to help this generation create a plan for the retirement they imagine. Two key elements are as follows:
    • Are they saving enough? TIAA’s 2016 Lifetime Income Survey revealed 41 percent of people who are not yet retired are saving 10 percent or less of their income, even though experts recommend people save between 10 to 15 percent.
    • Will they be able to cover their expenses for as long as they live? Young professionals should consider the lifetime income options available in their retirement plan, including annuities, which can provide them with an income floor to cover their essential expenses throughout their lives.

      Despite the important role these vehicles can play in a retirement savings strategy, 20 percent of Gen Y respondents are unfamiliar with annuities and their benefits.

  • Provide access to financial advice – Providing access to financial advice can help younger plan participants establish their retirement goals and identify the right investments. By setting retirement goals early, and learning about the appropriate investments, Gen Y participants can position themselves for success later on.

    The good news is TIAA survey data revealed Gen Y sees the value financial advice can provide, with 80 percent believing in the importance of receiving financial advice before the age of 35.

  • Understand the needs of a tech-savvy and digitally connected generation – It’s important to meet this generation where they are—on the phone, in person or online. We’ve learned that this generation expects easy digital access to their financial picture, and we offer smartphone, tablet and smartwatch apps in response.
    • Engage Gen Y with digital tools – Choose ones that educate in a style that does not preach and allows them to take action. One way to reach Gen Y on topics such as retirement, investing and savings is through gaming.

      We’ve found that the highest repeat users of our Financial IQ game are ages 24-34, and that Gen Y is significantly more engaged with the competition, with 50 percent more clicks.

Perhaps more than any other generation, Gen Y needs to understand the importance of saving for their goals for the future even if it’s several decades away.  Employers play an integral role in kick-starting that process: first, by offering a well-designed retirement plan that empowers young people to take action; and second, by providing them with access to financial education and advice that encourages them to think thoughtfully about their financial goals—up to and through retirement.

See the original article Here.

Source:

McCabe C. (2017 April 14). Starting early is key to helping younger workers achieve financial success[Web blog post]. Retrieved from address http://www.benefitspro.com/2017/04/14/starting-early-is-key-to-helping-younger-workers-g?ref=hp-in-depth&page_all=1


Employers and the ACA – It’s Status Quo for Now

With the passing of the AHCA, the ACA is now the norm for employers’ healthcare. Find out what employers need to know about ACA and how it will affect them in the future in this interesting article from Think Hr by Laura Kerekes.

The Trump administration’s effort to repeal and replace the Affordable Care Act (ACA) through legislation failed last month when House Republicans were unable to push their proposal forward. The proposed bill, called the American Health Care Act, would have eliminated most of the ACA’s taxes and fees on health plans along with removing penalties on large employers that did not offer coverage to their full-time workers. It is unclear whether Congressional leaders will make another attempt to legislate major changes in the ACA this year. Meanwhile, federal agencies under President Trump’s direction may begin to take steps to revise regulations that do not require changes in law.

The situation certainly has caused some confusion among employers, so it is important to note that, as of now, nothing has changed. The ACA’s existing rules for group health plans, required notices, and employer reporting duties remain in effect. Applicable large employers (ALEs), generally entities that employed an average of 50 or more full-time-equivalent employees in the prior year, are still subject to the ACA’s employer mandate or so-called “play or pay” rules.

As a reminder, here is a brief summary of the key ACA provisions that require action by employers:

Notices:

  • Employer Exchange Notice: Provide to all employees within 14 days of hire.
  • Summary of Benefits and Coverage (SBC): For group medical plan, provide SBC to eligible employees at enrollment and upon request.

Health Plan Fees:

  • Patient-Centered Outcomes Research Institute (PCORI): For self-funded group health plans, pay small annual fee by July 31 based on prior year’s average participant count.
  • Transitional Reinsurance Program (TRP): For self-funded plans that provided minimum value in 2016, annual fee was due by January 15, 2017 (or by January 15 and November 15, 2017 if paying in two installments).

Reporting:

  • W-2 Reporting: Report total cost of each employee’s health coverage on Form W-2 (box 12). This is informational only and has no tax consequences. (Employers that filed fewer than 250 Form W-2s for prior year are exempt.)
  • Forms 1094 and 1095: ALEs only: Report coverage offer information on all full-time employees. Self-funded employers only (regardless of size): Report enrollment information on all covered persons.

Employer Mandate (“Play or Pay”): ALEs only. To avoid the risk of penalties, determine whether each employee meets the ACA definition of full-time employee and, if so, offer affordable minimum value coverage on a timely basis.

In summary, employers are advised to continue to comply with all ACA requirements based on the current rules.

On a related note, the ACA imposes several requirements on group health plans, whether provided through insurance or self-funded by the employer. Insured plans also are subject to the insurance laws of the state in which the policy is issued. In many cases, provisions matching the ACA are now embedded in state insurance laws. So future changes in the ACA, if any, may not apply to group medical policies automatically. Depending on the state and the type of change, additional legislation at the state level may be needed to enact the change.

See the original article Here.

Source:

Kerekes L. (2017 April 14). Employers and the ACA – it’s status quo for now [Web blog post]. Retrieved from address https://www.thinkhr.com/blog/hr/employers-and-the-aca-its-status-quo-for-now/


From Boomers to Millennials, Here are Workers’ Top 6 Benefit Needs

Do you know which benefits your employees crave the most? Take a look at this great article from HR Morning about the top employee benefits for each age group by Jared Bilski.

Depending on which demographic they fall into (Baby Boomer, Gen-X, Millennial, etc.), employees have vastly different benefit needs. So why do so many employers offer a one-sized-fits-all benefits package?  

At the 2017 Mid-Sized Retirement & Healthcare Plan Management Conference in Phoenix, AZ, President and CEO of Cowden Associates Inc., Elliot N Dinkin, used the flexibility of the benefits offered through a private exchange as a reason for employers to give the exchange option a serious look.

Private exchanges — like public exchanges — are online marketplaces employers can use to provide coverage to their employees on everything from traditional benefits, like health insurance, to increasingly popular voluntary plans, like life, disability or cancer insurance.

Dinkin also used some compelling research to show just how greatly employees’ benefits needs varied from generation to generation.

Citing stats from a recent LIMRA study, which asked employees to rank their benefit needs, Dinkin laid out the top six responses of workers from 34 and under to employees 65-plus.

It’s worth noting that base pay was the top “need” for each and every employee demographic. The rest of the responses, however, were all over the map.

34 and under

The youngest workers in the study ranked their benefits needs in the following order:

  1. base pay
  2. career opportunities
  3. retirement plan
  4. low healthcare costs
  5. bonus/incentive, and
  6. flexible schedule.

35-49

The mid-life workers prioritized their benefit needs like this:

  1. base pay
  2. retirement plan
  3. low healthcare costs
  4. bonus/incentive
  5. paid time off (PTO), and
  6. flexible schedule.

50-64

Workers entering the latter stage of their careers ranked their benefit needs like this:

  1. base pay
  2. retirement plan
  3. low healthcare costs
  4. bonus/incentive
  5. paid time off (PTO), and
  6. type of work.

65-plus

Older workers tend to place a premium on the type of work they’re doing and the reputation of their employers. Their priorities are as follows:

  • base pay
  • retirement plan
  • type of work
  • bonus/incentive
  • low healthcare costs
  • working for a respectable organization.

See the original article Here.

Source:

Jared Bilski (2017 March 31). From boomers to millennials, here are workers’ top 6 benefits needs. [Web blog post]. Retrieved from address http://www.hrmorning.com/from-boomers-to-millennials-here-are-workers-top-6-benefit-needs/


Workers Might See Employer Health Coverage Disappear Under New GOP AHCA

Do you receive your healthcare through an employer? Then take a look at this article from Benefits Pro about how the passing of the AHCA will affect employees who get their healthcare through an employer by Marlene Y. Satter.

It’s not just individuals without employer health coverage who could lose big under the newly revised version of the Republicans’ American Health Care Act.

People who get health coverage from their jobs could be left swinging in the wind, too—in fact, as many as half of all such employees could be affected.

That’s according to an Alternet report that says an amendment added to the bill currently being considered by the House of Representatives would allow insurers in states that get waivers from regulations put in place by the Affordable Care Act to deny coverage for 10 types of health services—including maternity care, prescription drugs, mental health treatment and hospitalization.

An MSNBC report points out that “because the Republican-led House is scrambling to pass a bill without scrutiny or serious consideration,” the last-minute amendment’s full effects aren’t even known, since “[t]his is precisely the sort of detail that would’ve come to light much sooner if Republicans were following the American legislative process. In fact, this may not even be the intended goal of the GOP policy.”

While the ACA prohibits employer-based plans from imposing annual limits on coverage and bare lifetime caps on 10 essential benefits, the Obama administration did loosen those restrictions back in 2011, saying that employers could instead choose to follow another state’s required benefits.

What the new Republican take on the AHCA does is push that further—a lot further—by allowing large employers to pick the benefit requirements for any state. That would let them limit coverage on such costly types of care as mental health and substance abuse services.

In a Wall Street Journal report, Andy Slavitt, former acting administrator of the Centers for Medicare and Medicaid Services under President Barack Obama, is quoted saying, “It’s huge. They’re creating a backdoor way to gut employer plans, too.”

The changes to employer-based plans would hit anyone not insured by Medicare or by small-business plans, because the bill includes cuts to Medicaid and changes to the individual market as well.

A report from the Brookings Institution points out that “One of the core functions of health insurance is to protect people against financial ruin and ensure that they get the care they need if they get seriously ill.” The ACA pushed insurance plans to meet that standard, it says, by requiring them to “limit enrollees’ annual out-of-pocket spending and [bar] plans from placing annual or lifetime limits on the total amount of care they would cover.”

However, while those protections against catastrophic costs “apply to almost all private insurance plans, including the plans held by the roughly 156 million people who get their coverage through an employer,” the Brookings report says, the amendment to the Republican bill “could jeopardize those protections—not just for people with individual market plans, but also for those with employer coverage.”

How? By modifying “the ‘essential health benefit’ standards that govern what types of services must be covered by individual and small group market insurance plans. The intent of the amendment is reportedly to eliminate the federal benefit standards that currently exist and instead allow each state to define its own list of essential health benefits.”

And then, with employers allowed to pick and choose which state’s regulations they’d like to follow, a loophole the size of the Capitol building would not only allow “states will set essential health benefit standards that are considerably laxer than those that are in place under the ACA,” says the report, but “large employers may have the option to pick which state’s essential health benefits requirements they wish to abide by for the purposes of these provisions.”

The result? “[T]his would likely have the effect of virtually eliminating the catastrophic protections with respect to large employers since employers could choose to pick whichever state set the laxest standards. The same outcome would be likely to occur for all private insurance policies,” the report continues, “if insurers were permitted to sell plans across state lines, as the Administration has suggested enacting through separate legislation.”

While the actual effect of the amendment is unclear, the Brookings report concludes, “there is strong reason to believe that, in practice, the definition of essential health benefits that applied to the catastrophic protections would be far weaker under the House proposal than under current law, seriously undermining these protections. These potential adverse effects on people with employer coverage, in addition to the potentially damaging effects of such changes on the individual health insurance market, are thus an important reason that policymakers should be wary of the House proposal with respect to essential health benefits.”

See the original article Here.

Source:

Satter M. (2017 May 4). Workers might see employer health coverage disappear under new GOP AHCA [Web blog post]. Retrieved from address http://www.benefitspro.com/2017/05/04/workers-might-see-employer-health-coverage-disappe?page_all=1


Advisers Seek Innovative Ways To Increase Retirement Savings

Are you struggling to save for your retirement? Check out this great article from Employee Benefits Adviser on what employee benefits advisers are doing to help their clients prepare for their retirement by Cort Olsen.

In a recent forum co-hosted by Retirement Clearinghouse, EBRI, Wiser and the Financial Services Roundtable, experts shared how automated retirement portability programs could be the key to increased participation in private-sector retirement plans.

Today, at least 64% of Americans say they do not have sufficient funds for retirement and less than half of private-sector workers participate in workplace retirement programs. Former U.S. Sen. Kent Conrad, a Democrat from North Dakota, says these statistics could improve through better access to workplace retirement savings plans.

“So many small businesses tell [Congress], ‘Look we’d like to offer a plan, but we just can’t afford it,’” Conrad says. “We take the liability off of their shoulders, we take the administrative difficulty off their shoulders and allow a third party to administer the plans, run the plans and have the financial responsibility for the plans, which makes a big difference for employers.”

With these improved access points to savings plans, Conrad says the opportunity arises to create new retirement security plans for smaller businesses with fewer than 500 employees, enabling multiple employers — even from different industries — to band together to offer their workers low cost, well-designed options.

“Once the [savings plan] has been put in place for a period of time, we then introduce a nationwide minimum coverage standard for businesses with more than 50 employees,” Conrad says. “Any mandate is controversial, but legally if you dramatically simplify (don’t require employer match) really all they have to do is payroll deduction, and then it becomes not unreasonable for employers with 50 or more workers to offer some kind of plan.”

How to achieve auto-portability
Once plans have been made available for employers of all sizes, Jack VanDerhei, research director for the Employee Benefit Research Institute, recommends three different scenarios for auto-portability of retirement plans between employers.

1) Full auto-portability. VanDerhei considers this to be the most efficient scenario, where every participant consolidates their savings in their new employer plan every time they change jobs. The goal would be that all participants arrive at age 65 with only one account accumulated over the span of their working life.
2) Partial auto-portability. In this scenario, every participant with less than $5,000 — indexed for inflation — consolidates their savings in their new employer plan every time they change jobs. “If you have $5,000 or less in your account balance at the time you change jobs, leakage would only come from hardship withdrawals,” VanDerhei says. This means that money would only leave the account if the participant determined it necessary to take money out to pay for a necessity.
3) Baseline: status quo. In addition to hardship withdrawals, there is a participant-specific probability of cashing out and loan default leakage at the time of job transition. These participant specific leakages can be age, income, account balance and how long the participant has been with the employer.

VanDerhei says the younger the participants are to begin using full auto-portability of retirement plans, the more likely they are to get the most out of their retirement savings once they reach the age of 65.

“If you look at people who are currently between the ages of 25 and 34, under a partial portability there is a chance for accumulation to reach $659 billion and under a full portability there is a chance to reach $847 billion in accumulation,” VanDerhei says. “As you would expect, accumulation will decrease as the age increases if they choose to enter into auto-portability later in life.”

Spencer Williams, president and CEO of Retirement Clearinghouse, LLC, says although retirement portability has been codified into ERISA there are not enough mechanisms involved to encourage participants to continue to save for retirement rather than cashing out.

“We have a little more than a third of the population cashing out when they change jobs,” Williams says. “The research shows that if you fix that problem, the difficulty moving peoples’ money, we will begin the process of reducing leakage.”

Once a retirement account reaches a certain amount, Williams adds that participants will begin to take the account more seriously and have more desire to continue investing in the plan.

“We need to create an efficient and effective means by which people can have their money moved for them, and in doing that we begin to change peoples’ behavior,” Williams says. “Finally, if we increase access and coverage, along with auto-portability, all of those benefits accrue from all those new participants in the system.”

See the original article Here.

Source:

Olsen C. (2017 April 6). Advisers seek innovative ways to increase retirement savings [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/advisers-seek-innovative-ways-to-increase-retirement-savings


3 Aspects of the GOP Healthcare Plan that Demand Employers’ Attention

The House of Representatives last week passed the American Health Care Act (AHCA) bill to begin the process of repealing the ACA. Find out what this new legislation means for employers in the great article from Employee Benefits Adviser by Daniel N. Kuperstein.

The extremely emotional journey to repeal (more appropriately, to “change”) the Affordable Care Act reached a significant milestone this week: The Republican-led House of Representatives passed an updated version of the American Health Care Act. While more than 75% of the provisions of the ACA remain intact, the AHCA gutted or delayed several of the ACA’s taxes on employers, insurers and individuals.

So what does this mean for employers?

First off, it’s important to remember that this new bill is not law just yet. The House version of the bill now heads to the Senate, where there’s no guarantee that it will pass in its current form; the margin for victory is much slimmer there. Only three “no” votes by Senate Republicans could defeat the bill, and both moderate and conservative Republican lawmakers in the Senate have expressed concerns about the bill. In other words, employers don’t have to do anything just yet, but it’s still beneficial to understand the major changes that could be coming down the pike.

As employers know from working over the last seven years to implement provisions of the ACA, there will be a million tiny details to work through if the AHCA becomes law.

But for now, we see three major aspects that demand employers’ attention.

There will be more emphasis on health savings accounts
Under the AHCA, health savings accounts will likely become far more popular — and more useful. The HSA contribution limits for employers and individuals are essentially doubled. Additionally, HSAs will be able to reimburse over-the-counter medications and allow spouses to make catch-up contributions to the same HSA. Of course, with this added flexibility comes increased responsibility — there will be a greater need for employees to understand their insurance.

There will be more flexibility in choosing a benchmark plan
For larger employers not in the small group market, the AHCA creates an opportunity to choose a benchmark plan that offers a significantly lower level of benefits to employees.

Currently, the ACA provides that employer-sponsored self-insured health plans, fully-insured large group health plans, and grandfathered health plans are not required to offer EHBs. However, these plans are prohibited from imposing annual and lifetime dollar limits on any EHBs they do offer. For purposes of determining which benefits are EHBs subject to the annual and lifetime dollar limits, the ACA currently permits employers sponsoring these types of plans to define their EHBs using any state benchmark plan. In other words, employers are not bound by the essential health benefits mandated by their state and can pick from another state’s list of required benefits.

Under the AHCA, we may see a big change to how the rules on annual and lifetime limits work. Notably, nothing in the AHCA would prohibit employers from choosing a state benchmark plan from a state that had obtained an AHCA waiver, which would allow the state to put annual and lifetime limits on its EHBs. This means that, if one state decides to waive these EHB requirements, many employers could decide to use that lower-standard plan as their benchmark plan. Of course, while choosing such a benchmark plan may benefit an organization by lowering its costs, such a move may have a negative impact on its ability to recruit and retain the best talent.

There will be a greater need to help employees make smart benefits decisions
The most important aspect of this for employers is to understand the trend in health insurance, which is undeniably moving in the direction of consumerism.

The driving philosophy behind this new Republican plan is to place more responsibility on individuals. However, this doesn’t mean employers can throw a party and simply wish their workers “good luck” — employers need to think at a macro level about what’s good for business. In a tightening labor market in which so many talented people consider themselves free agents, smart employers will focus on helping employees to make smart decisions about their health insurance.

See the original article Here.

Source:

Kuperstein D. (2017 May 5). 3 aspects of the GOP healthcare plan that demand employers attention [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/opinion/3-aspects-of-the-gop-healthcare-plan-that-demand-employers-attention