How to Take your 2020 Benefit Change Rollout to the Next Level

Employers are faced with the challenge of how to engage employees each year during open enrollment. Instead of printouts and email campaigns, try a new communication method this year. Read this blog post for easy tips to try this open enrollment season.


With open enrollment right around the corner, employers are faced with the annual question: how are we going to get employees engaged, while helping them make the smartest benefit decisions for their individual situations?

This year, instead of plain old printouts and email, try a new method. Whether you are changing providers, introducing new features, or simply showcasing existing options, switching up your enrollment process can be easier and more enjoyable than you’d think. Give these quick and easy tips a try for a better time come January 1.

Have a Lunch & Learn

Who doesn’t love a lunch & learn? Free food and a little break from the status quo is a much-welcomed way to get on board with the changes 2020 will bring. Whether you are opting for an informative webinar or an in-person presentation, providing a free lunch is a great way to encourage employee participation while boosting team morale.

If you are hosting an in-person benefits presentation, be sure to have your information nicely (and concisely!) summarized. Having a paper takeaway or a digital follow-up is key, as sometimes open enrollment can be overwhelming. Many people prefer to have something they can reference at a later date to help make their decision, so be sure those materials are available.

Teamwork Makes the Dream Work

If it’s possible, why not get the whole team involved in asking questions and brainstorming? Benefit changes can be complex and confusing, and sometimes people feel too shy to ask questions during a formal presentation. Try breaking up into smaller groups and challenging each mini-team to answer ten questions related to open enrollment and benefits. The group that gets the most right answers wins a prize!

Design Your Rollout Mobile & Digital First

Mobile. It might seem like a no-brainer, but employees are going to be quicker to respond to changes if there’s an easy process that meets them where they are: their mobile devices. Reminding employees of a mobile registration option is a great way to capture high engagement rates. The key to a user-friendly registration is making it as turnkey as possible. If employees have to fish around for URLs, passwords, group numbers, et cetera, they are going to be less likely to complete these items in a timely fashion. Provide all the information you can upfront.

Add Social to Your Strategy. If you are not taking advantage of a social strategy such as Facebook, Slack, LinkedIn, Twitter, and more, the time is now! Digital quizzes, surveys, and chat channels can work wonders for engaging your employees during the open enrollment process while facilitating knowledge sharing. Why not create an internal Facebook group or Slack channel where your team can ask questions and exchange information? The outcome of benefits decisions usually lasts all year, so it’s important for people to have their questions answered in a casual, user-friendly environment. A big benefit for your HR team is that a digital-first strategy will cut down on “random question” drop-ins and interruptions at your office. Send everyone to one place in the digital space!

SOURCE: Olson, B. (15 October 2019) "How to Take your 2020 Benefit Change Rollout to the Next Level" (Web Blog Post). Retrieved fromhttp://blog.ubabenefits.com/how-to-take-your-2020-benefit-change-rollout-to-the-next-level


‘Eye’ spy a savings opportunity for health and vision benefits

Traditionally, vision benefits were offered as an elective, with coverage is focusing on vision tests or discounts for corrective eyewear, but this often can result in inadequate coverage for employees and their dependents. Read this blog post to learn more about vision benefits.


Sixty-one million adults are at high risk for serious vision loss, according to the National Eye Institute, but most U.S. employers don’t include eye care as part of their benefits package. Vision benefits have traditionally been offered as an elective, where coverage is focused on vision tests or discounts for corrective eyewear.

This often results in inadequate coverage for employees and dependents, which can result in unrecognized and untreated issues that impact employee health and productivity, as well as an employer’s bottom line.

Comprehensive eye exams are recommended for adults under the age of 65 at least every two years, according to the American Optometric Association (AOA). These exams are the only way a doctor can detect signs and symptoms of serious conditions without cutting into or scanning body parts.

The total economic burden of eye disorders and vision loss in the U.S. was $139 billion in 2013, which includes $65 billion in direct medical costs strictly due to eye disorders and low vision. Loss of vision among workers results in $48 billion in lost productivity per year.

When it comes to benefit management priorities employers often focus more on chronic condition management. Yet, eye health is often linked to common chronic conditions including diabetes and hypertension. Without early detection of eye and vision health issues, employees cannot properly manage these conditions. Delaying medical treatment can lead to increased absenteeism and reduced productivity, eventually resulting in treatment that comes too late, and at a much higher price tag for employers, employees and family members.

About 68% of Americans with diabetes have been diagnosed with eye complications, many of which could have been prevented through a comprehensive eye exam. Diabetes is the leading cause of blindness among adults, according to the National Institutes of Health. Its prevalence is increasing as one in 10 people worldwide may be affected by 2040, according to research from the International Diabetes Federation.

Nearly half of Americans don’t know that diabetic eye diseases have visible symptoms, according to a 2018 AOA survey. More than one-third of respondents didn’t know a comprehensive eye exam is the only way to determine if a person’s diabetes will cause blindness. These exams, considered the gold standard in clinical vision care, should be covered under the employees’ medical benefits.

Three years ago the Midwest Business Group on Health began a collaboration with the AOA to better understand how employers think about and implement eye health and vision benefits. As part of this partnership, a no-cost eye care benefits toolkit was developed to support employers in evaluating their current eye health and vision care benefits to:

  • Understand the importance of early detection so that employees can effectively manage chronic and more serious conditions
  • Recognize how to integrate primary and preventive eye care into an overall medical benefit design
  • Educate employees on the importance of periodic eye examinations

It’s important that employers better understand the impact of vision care benefits, including lower costs, better employee health, improved job satisfaction, better employee quality of life, and work productivity.

SOURCE: Larson, C. (20 September 2019) "‘Eye’ spy a savings opportunity for health and vision benefits" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/vision-loss-resulting-in-billions-in-lost-productivity


Health insurance surpass $20,000 per year, hitting a record

An annual survey of employers recently revealed that the cost of family health coverage has now surpassed $20,000, a record high. The survey also revealed that while most employers pay most of the costs of coverage, workers' average contribution for a family plan is now $6,000. Read this blog post from Employee Benefit News to learn more.


The cost of family health coverage in the U.S. now tops $20,000, an annual survey of employers found, a record high that has pushed an increasing number of American workers into plans that cover less or cost more, or force them out of the insurance market entirely.

“It’s as much as buying a basic economy car,” said Drew Altman, chief executive officer of the Kaiser Family Foundation, “but buying it every year.” The nonprofit health research group conducts the yearly survey of coverage that people get through work, the main source of insurance in the U.S. for people under age 65.

While employers pay most of the costs of coverage, according to the survey, workers’ average contribution is now $6,000 for a family plan. That’s just their share of upfront premiums, and doesn’t include co-payments, deductibles and other forms of cost-sharing once they need care.

The seemingly inexorable rise of costs has led to deep frustration with U.S. healthcare, prompting questions about whether a system where coverage is tied to a job can survive. As premiums and deductibles have increased in the last two decades, the percentage of workers covered has slipped as employers dropped coverage and some workers chose not to enroll. Fewer Americans under 65 had employer coverage in 2017 than in 1999, according to a separate Kaiser Family Foundation analysis of federal data. That’s despite the fact that the U.S. economy employed 17 million more people in 2017 than in 1999.

“What we’ve been seeing is a slow, slow kind of drip-drip erosion in employer coverage,” Altman said.

Employees’ costs for healthcare are rising more quickly than wages or overall economy-wide prices, and the working poor have been particularly hard-hit. In firms where more than 35% of employees earn less than $25,000 a year, workers would have to contribute more than $7,000 for a family health plan. It’s an expense that Altman calls “just flat-out not affordable.” Only one-third of employees at such firms are on their employer’s health plans, compared with 63% at higher-wage firms, according to the Kaiser Family Foundation’s data.

The survey is based on responses from more than 2,000 randomly selected employers with at least three workers, including private firms and non-federal public employers.

Deductibles are rising even faster than premiums, meaning that patients are on the hook for more of their medical costs upfront. For a single person, the average deductible in 2019 was $1,396, up from $533 in 2009. A typical household with employer health coverage spends about $800 a year in out-of-pocket costs, not counting premiums, according to research from the Commonwealth Fund. At the high end of the range, those costs can top $5,000 a year.

While raising deductibles can moderate premiums, it also increases costs for people with an illness or who gets hurt. “Cost-sharing is a tax on the sick,” said Mark Fendrick, director of the Center for Value-Based Insurance Design at the University of Michigan.

Under the Affordable Care Act, insurance plans must cover certain preventive services such as immunizations and annual wellness visits without patient cost-sharing. But patients still have to pay out-of-pocket for other essential care, such as medication for chronic conditions like diabetes or high blood pressure, until they meet their deductibles.

Many Americans aren’t prepared for the risks that deductibles transfer to patients. Almost 40% of adults can’t pay an unexpected $400 expense without borrowing or selling an asset, according to a Federal Reserve survey from May.

That’s a problem, Fendrick said. “My patient should not have to have a bake sale to afford her insulin,” he said.

After years of pushing healthcare costs onto workers, some employers are pressing pause. Delta Air Lines Inc. recently froze employees’ contributions to premiums for two years, Chief Executive Officer Ed Bastian said in an interview at Bloomberg’s headquarters in New York last week.

“We said we’re not going to raise them. We're going to absorb the cost because we need to make certain people know that their benefits structure is real important,” Bastian said. He said the company’s healthcare costs are growing by double-digits. The Atlanta-based company has more than 80,000 employees around the globe.

Some large employers have reversed course on asking workers to take on more costs, according to a separate survey from the National Business Group on Health. In 2020, fewer companies will limit employees to so-called “consumer-directed health plans,” which pair high-deductible coverage with savings accounts for medical spending funded by workers and employers, according to the survey. That will be the only plan available at 25% of large employers in the survey, down from 39% in 2018.

Employers have to balance their desire to control costs with their need to attract and keep workers, said Kaiser’s Altman. That leaves them less inclined to make aggressive moves to tackle underlying medical costs, such as by cutting high-cost hospitals out of their networks. In recent years employers’ healthcare costs have remained steady as a share of their total compensation expenses.

“There’s a lot of gnashing of teeth,” Altman said, “but if you look at what they do, not what they say, it’s reasonably vanilla.”

SOURCE: Tozzi, J. (25 September 2019) "Health insurance surpass $20,000 per year, hitting a record" (Web Blog Post). Retrieved from https://www.benefitnews.com/articles/health-insurance-costs-surpass-20-000-per-year


IRS Releases Draft Forms and Instructions for 2017 ACA Reporting

Here are the latest updates in ACA Reporting, including the released IRS draft forms and instructions.


Read the original article here.

Source:

Capilla D. (5 October 2017). "IRS Releases Draft Forms and Instructions for 2017 ACA Reporting" [Web Blog Post]. Retrieved from address http://blog.ubabenefits.com/irs-releases-draft-forms-and-instructions-for-2017-aca-reporting-1

 

Under the Patient Protection and Affordable Care Act (ACA), individuals are required to have health insurance while applicable large employers (ALEs) are required to offer health benefits to their full-time employees.

Reporting is required by employers with 50 or more full-time (or full-time equivalent) employees, insurers, or sponsors of self-funded health plans, on health coverage that is offered in order for the Internal Revenue Service (IRS) to verify that:

  • Individuals have the required minimum essential coverage,
  • Individuals who request premium tax credits are entitled to them, and
  • ALEs are meeting their shared responsibility (play or pay) obligations.

2017 Draft Forms and Instructions

Draft instructions for both the 1094-B and 1095-B and the 1094-C and 1095-C were released, as were the draft forms for 1094-B1095-B1094-C, and 1095-C. There are no substantive changes in the forms or instructions between 2016 and 2017, beyond the further removal of now-expired forms of transition relief.

In past years the IRS provided relief to employers who make a good faith effort to comply with the information reporting requirements and determined that they will not be subject to penalties for failure to correctly or completely file. This did not apply to employers that fail to timely file or furnish a statement. For 2017, the IRS has unofficially indicated that the “good faith compliance efforts” relating to reporting requirements will not be extended. Employers should be ready to fully meet the reporting requirements in early 2018 with a high degree of accuracy. There is however relief for de minimis errors on Line 15 of the 1095-C.

The IRS also confirmed there is no code for the Form 1095-C, Line 16 to indicate an individual waived an offer of coverage. The IRS also kept the “plan start month” box as an optional item for 2017 reporting.

Employers must remember to provide all printed forms in landscape, not portrait.

When? Which Employers?

Reporting will be due early in 2018, based on coverage in 2017.

For calendar year 2017, Forms 1094-C, 1095-C, 1094-B, and 1095-B must be filed by February 28, 2018, or April 2, 2018, if filing electronically. Statements to employees must be furnished by January 31, 2018. In late 2016, a filing deadline was provided for forms due in early 2017, however it is unknown if that extension will be provided for forms due in early 2018. Until employers are told otherwise, they should plan on meeting the current deadlines.

All reporting will be for the 2017 calendar year, even for non-calendar year plans. The reporting requirements are in Sections 6055 and 6056 of the ACA.

 

For an at-a-glance chart of all reporting requirements, as well as information on penalties for failure to file, 6055 requirements and instructions for certain boxes/lines on 1095C, request UBA’s ACA Advisor, “IRS Releases Draft Forms and Instructions for 2017 ACA Reporting“.

 

Read the original article here.

Source:

Capilla D. (5 October 2017). "IRS Releases Draft Forms and Instructions for 2017 ACA Reporting" [Web Blog Post]. Retrieved from address http://blog.ubabenefits.com/irs-releases-draft-forms-and-instructions-for-2017-aca-reporting-1


Healthcare strategies that can save employers money

Todd Rolland compares the traditional strategies to new stratigies for healthcare savings in the artilce below.

It is no secret that employee benefit costs are rising. As an employer, we wonder what can be done to reduce costs and as an employee, we are curious if we are getting the best deal. Medical insurance costs are rising faster than many companies’ profit margins and outpacing inflation on a year-to-year basis.

Rising healthcare costs are eroding revenue unlike any other element within a business. Government regulations and rising premiums are also affecting cash flow which can impact all areas of business operations. Separating rhetoric and marketing from meaningful, impactful company-wide solutions is becoming increasingly difficult. However, as the paradigm shift of healthcare strategies gains momentum, sustainable solutions are becoming clearer.

There are evolving options with this new paradigm shift of healthcare strategies: traditional, direct contracting, reference-based pricing and bundled pricing. A strong market push for pricing transparency has created additional opportunities for employers to save money and control costs, and they are doing just that. Employers now have the ability to function much like the traditional PPO has historically functioned by negotiating directly with providers.

The traditional approach includes elements such as reinsurance, administration, PPO networks, pharmacy benefit managers, population health management, predictive modeling, multiple plan designs and wellness strategies.

New options
Direct contracting is also a viable option because providers are much more willing to contract directly with employers than ever before. The idea is to establish a delivery and pricing contract that accomplishes two primary objectives:

  1. An agreed-upon fee schedule for services performed that is less than typical insurance company PPO-contracted rates.
  2. Incentive for participants to utilize contracted providers for the care needed.

The third option, reference-based pricing, allows employers to structure partial self-funding plans that reimburse a certain percentage of Medicare reimbursements levels for claims. PPO fee schedules can be 100-200% higher than these Medicare rates. As a result, the reimbursement plan can save employers a considerable amount. However, there is still a risk in balanced billing. The direct contracting option protects the employer with balanced billing issues that they would otherwise experience with reference-based pricing methodologies.

Bundled pricing is rapidly evolving and creates a significant opportunity for employers to save money. Employers simply pay agree-upon cash pricing for surgeries performed on an outpatient basis, and in certain cases, an inpatient basis. The price includes all services including facility, surgeon, anesthesiology, pathology, radiology, etc.

Additionally, two strategies that are gaining attention around prescription costs are average script pricing and pass-through average sales price prescription pricing. Both offer employers opportunities to find significant claims savings.

See the original article posted on EmployeeBenefitAdvisor on August 9, 2016 Here.

Source:

Rolland, T. (2016, August 9). Healthcare strategies that can save employers money [Web log post]. Retrieved from http://www.employeebenefitadviser.com/news/healthcare-strategies-that-can-save-employers-money


5 Crucial Wellness Strategies for Self-Funded Companies

Original post careatc.com

Instead of paying pricey premiums to insurers, self-insured companies pay claims filed by employees and health care providers directly and assume most of the financial risk of providing health benefits to employees. To mitigate significant losses, self-funded companies often sign up for a special “stop loss” insurance, hedging against very large or unexpected claims. The result? A stronger position to stabilize health care costs in the long-term. No wonder self-funded plans are on the rise with nearly 81% of employees at large companies covered.

Despite the rise in self-insured companies, employers are uncertain as to whether they’ll even be able to afford coverage in the long-term given ACA regulations. Now more than ever, employers (self-insured or not) must understand that wellness is a business strategy. High-performing companies are able to manage costs by implementing the most effective tactics for improving workforce health.

Here are five wellness strategies for self-insured companies:

Strategy 1: Focus on Disease Management Programs

Corporate wellness offerings generally consist of two types of programs: lifestyle management and disease management. The first focuses on employees with health risks, like smoking or obesity, and supports them in reducing those risks to ultimately prevent the development of chronic conditions. Disease management programs, on the other hand, are designed to help employees who already have chronic disease, encouraging them to take better care of themselves through increased access to low-cost generic prescriptions or closing communication gaps in care through periodic visits to providers who leverage electronic medical records.

According to a 2012 Rand Corporation study, both program types collectively reduced the employer’s average health care costs by about $30 per member per month (PMPM) with disease management responsible for 87% of those savings. You read that right – 87%! Looking deeper into the study, employees participating in the disease management program generated savings of $136 PMPM, driven in large part by a nearly 30% reduction in hospital admissions. Additionally, only 13% of employees participated in the disease management program, compared with 87% for the lifestyle management program. In other words, higher participation in lifestyle management programs marginally contributes to overall short-term savings; ROI was $3.80 for disease management but only $0.50 for lifestyle management for every dollar invested.

This isn’t to say that lifestyle management isn’t a worthy cause – employers still benefit from its long-term savings, reduced absenteeism, and improved retention rates – but it cannot be ignored that short-term ROI is markedly achieved through a robust disease management program.

Strategy 2: Beef Up Value-Based Benefits

Value-Based Benefit Design (VBD) strategies focus on key facets of the health care continuum, including prevention and chronic disease management. Often paired with wellness programs, VBD strategies aim to maximize opportunities for employees make positive changes. The result? Improved employee health and curbed health care costs for both employee and employer. Types of value-based benefits outlined by theNational Business Coalition on Health include:

Individual health competency where incentives are presented most often through cash equivalent or premium differential:

  • Health Risk Assessment
  • Biometric testing
  • Wellness programs

Condition management where incentives are presented most often through co-pay/coinsurance differential or cash equivalent:

  • Adherence to evidence-based guidelines
  • Adherence to chronic medications
  • Participation in a disease management program

Provider Guidance

  • Utilization of a retail clinic versus an emergency room
  • Care through a “center of excellence”
  • Tier one high quality physician

There is no silver bullet when it comes to VBD strategies. The first step is to assess your company’s health care utilization and compare it with other benchmarks in your industry or region. The ultimate goal is to provide benefits that meet employee needs and coincide with your company culture.

Strategy 3: Adopt Comprehensive Biometric Screenings

Think Health Risk Assessments (HRAs) and Biometric Screenings are one and the same? Think again. While HRAs include self-reported questions about medical history, health status, and lifestyle, biometric screenings measure objective risk factors, such as body weight, cholesterol, blood pressure, stress, and nutrition. This means that by adopting a comprehensive annual biometric screening, employees can review results with their physician, create an action plan, and see their personal progress year after year. For employers, being able to determine potentially catastrophic claims and quantitatively assess employee health on an aggregate level is gold. With such valuable metrics, its no surprise that nearly 51% of large companies offer biometric screenings to their employees.

Strategy 4: Open or Join an Employer-Sponsored Clinic

Despite a moderate health care cost trend of 4.1% after ACA changes in 2013, costs continue to rise above the rate of inflation, amplifying concerns about the long-term ability for employers to provide health care benefits. In spite of this climate, there are still high-performing companies managing costs by implementing the most effective tactics for improving health. One key tactic? Offer at least one onsite health service to your population.

I know what you’re thinking: employer-sponsored clinics are expensive and only make sense for large companies, right? Not anymore. There are a few innovative models out there tailored to small and mid-size businesses that are self-funded, including multi-employer, multi-site sponsored clinics. Typically a large company anchors the clinic and smaller employers can join or a group of small employers can launch their very own clinic. There are a number of advantages to employer-sponsored clinics and it is worthwhile to explore if this strategy is right for your company.

Strategy 5: Leverage Mobile Technology

With thousands health and wellness apps currently available through iOS and Android, consumers are presented with an array of digital tools to achieve personal goals. So how can self-insured companies possibly leverage this range of mobile technology? From health gamification and digital health coaching, to wearables and apps, employers are inundated with a wealth of digital means that delivering a variation of virtually the same thing: measurable data.

These companies curate available consumer health and wellness technology to empower employers by simplifying the process of selecting and managing various app and device partners, and even connecting with tools employees are already be using.

Conclusion:

Self-insured companies have a vested interest in improving employee health and understand that wellness is indeed a business strategy. High-performing companies are able to manage costs by implementing the most effective tactics for improving workforce health including an increased focus on Chronic Disease Management programs; strengthening value-based benefit design; adopting comprehensive biometric screening; exploring the option of opening or joining an employer-sponsored clinic; and leveraging mobile technology.


Get the Facts on COBRA Coverage – Who, When and How Long?

Original post ubabenefits.com

As we mentioned in the first edition of this mini-series on the Federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), “marketplaces” or “exchanges” created by the Patient Protection and Affordable Care Act (ACA) did not make COBRA obsolete. Rather, COBRA is still going strong. And while the general rule of COBRA is not necessarily that difficult to understand, the timeframes, notice requirements, intricacies, and the ways in which COBRA interacts with other laws presents employers with potentially extremely expensive outcomes.

I introduced COBRA, with a general guide to determine which employers are subject to federally mandated continuation coverage – generally, private sector employers sponsoring group health plans that have 20 or more employees on more than half of the business days in the previous calendar year. In this edition, I will discuss the who, when, and how long of COBRA – who is eligible, when is that person entitled to coverage, and how long the federally-mandated continuation coverage lasts.

Who is eligible for COBRA?

Group health plans subject to COBRA must offer continuation coverage to “qualified beneficiaries.” To be a qualified beneficiary, the individual must have been covered under the group health plan the day before the qualifying event and must be a covered employee, a covered spouse of the employee, a covered dependent of the employee, or a child born to or placed for adoption with a covered employee during a period of COBRA continuation coverage.

A qualified beneficiary might also be a covered employee who had retired on or before the date of substantial elimination of group health plan coverage due to the bankruptcy of the employer. Any spouse, surviving spouse, or dependent child of such a covered employee is also a qualified beneficiary if, on the day before the bankruptcy qualifying event, the spouse, surviving spouse, or dependent child is a beneficiary under the plan.

Let’s take a closer look at a couple of the common COBRA missteps.

A covered employee might not be an employee.

A “covered employee” is a defined term and means an individual who is (or was) provided coverage under a group health plan by virtue of the performance of services by the individual for one or more persons maintaining the plan. Therefore, agents, independent contractors, and directors who participate in the group health plan may be covered employees.

Be careful of domestic partner coverage.

Although plans may allow for domestic partner eligibility, COBRA is available to a “covered spouse of the employee.” Because domestic partners are not “spouses,” they are not qualified beneficiaries.

What does “placed for adoption” mean?

A child that is born to, adopted by, or placed for adoption with a covered employee during the covered employee’s COBRA continuation period becomes a qualified beneficiary when enrolled in the benefit. “Placement for adoption or being placed for adoption” means that the covered employee has assumed a legal obligation for total or partial support of a child in anticipation of the adoption of the child. The child's placement for adoption with the covered employee terminates upon the termination of the legal obligation for total or partial support.

In contrast, if a covered employee who is a qualified beneficiary does not elect COBRA continuation coverage during the election period, then any child born to or placed for adoption with the former qualified beneficiary (covered employee) on or after the date of the qualifying event is not a qualified beneficiary.

Qualified beneficiaries can forfeit their status.

A qualified beneficiary who does not elect COBRA continuation coverage in connection with a qualifying event ceases to be a qualified beneficiary when the election period ends. This lost right generally cannot be resurrected.

When is the individual entitled to coverage?

Only certain events, called “qualifying events,” trigger an entitlement to continuation coverage. The qualifying events and the respective qualified beneficiaries affected are:

  • Termination of employment for any reason other than gross misconduct – for the covered employee, covered spouse, and covered dependent children
  • Reduction in working hours of a covered employee – for the covered employee, covered spouse, and covered dependent children
  • The death of a covered employee – for the covered spouse and covered dependent children
  • Divorce or legal separation of a covered employee from the employee’s spouse – for the covered spouse and covered dependent children
  • Loss of coverage due to election of Medicare – for the covered spouse and covered dependent children
  • Loss of dependent child status under the terms of the plan – for covered dependent children
  • Chapter 11 bankruptcy of an employer – for retirees

How long does the continuation coverage last?

Generally, the maximum continuation coverage period is determined by the qualifying event and is measured from the qualifying event date.

If the qualifying event is loss of coverage due to a covered employee’s reduction in hours or termination of employment other than by reason of gross misconduct, the maximum coverage period for all qualified beneficiaries is 18 months.

The maximum coverage period is 36 months for a spouse and dependent children who are qualified beneficiaries when the qualifying event is the death of a covered employee, the divorce or legal separation of a covered employee from the employee's spouse, or the covered employee’s becoming entitled to Medicare benefits.

There may be times when the 18-month maximum continuation coverage due to the employee’s reduction in hours or termination of employment is extended.

  • Under the extended notice rule, also known as the delayed employer notice rule, the maximum coverage period runs from the date of loss of coverage, rather than from the date of the triggering event. For example, if a qualifying event occurs on April 5, 2016, and the plan provides for coverage to extend through the end of the month, the loss of coverage does not occur until April 30, 2016. If the plan requires that the employer notify the plan administrator within 30 days of the loss of coverage – rather than within 30 days of the triggering event – then the coverage period will be through October 30, 2017, instead of October 5, 2017.
  • The disability extension rule is applicable in certain situations where a qualified beneficiary is determined to be disabled. The coverage period is extended from 18 months to 29 months for the disabled qualified beneficiary.
  • The multiple qualifying event rule extends the maximum coverage period to 36 months for spouses and children of the covered employee when a second qualifying event occurs during the initial period. The second qualifying event must result in a loss of coverage and will typically be either a covered employee’s death, divorce or legal separation from the covered employee, or a dependent child’s loss of eligibility.
  • The pre-termination (or pre-reduction of hours) Medicare entitlement rule extends the 18-month period for spouses and children when the covered employee becomes entitled to Medicare within 18 months of the date of the triggering event.

When the qualifying event is the bankruptcy of the employer, the coverage period for the retired covered employee ends on the date of the retired covered employee's death. The maximum coverage period for a qualified beneficiary who is the spouse, surviving spouse, or dependent child of the retired covered employee is 36 months from the death of the retired covered employee.

Administration Procedures

It is extremely important that employers have procedures in place to examine potential COBRA situations. Regardless of whether the employer contracts COBRA administration to a third party, the plan sponsor/employer is the liable party. Employers should have processes in place for identifying which individuals are entitled to coverage when coverage terminates, and ensuring proper identification of potential qualified beneficiaries. Failure to properly identify COBRA qualified beneficiaries can be very expensive. In the next segment, we will look at the notice requirements and potential liabilities for employers.


Technology, interaction, variety: What Millenials look for in a benefits package

Millenials are thinking differently about their company's benefit packages. Understanding what this growing generation in the workforce is looking for could help with your company's recruiting efforts.

A Millenial is someone born after 1980 and the first generation to come of age in the millennium. Pew Research reports this group will number 75 million this year. That's greater than Generation X and Baby Boomers.

But not all Millenials in the workforce are signing up for a benefits package. The Society for Human Resources Management found that just under half of all Millenials consider their overall benefits package to be very important.

Those that find the benefit package important are likely to offer up these answers when asked about employee benefits, according to benefitspro.com.

"I want choice and variety."

Millennials are accustomed to having access to what they want when they want, especially when it comes to information. They want choices and are often offended by a one-size-fits-all approach. Overall, they look for a well-rounded array of benefits, which may mean that a mix of employer-paid products with supplemental and voluntary products will play an increasingly important role for many employers.

"I want customization and control."

Personalization is highly important to millennials. When they’re offered benefits, they expect those benefits to be tailored to their needs. And, they want control over how they spend their money. While giving them plenty of options puts them in the driver’s seat, too many options may paralyze them. Try to strike a healthy balance by considering a choice of plan designs within a product category, or perhaps core/buy-up options.

"I want true simplicity."

Employee benefits shouldn’t be complicated, and communication is the key. Millennials are looking for simple, clear, easy-to-follow steps, which includes systems that are easy to use. It will be to your advantage to recommend working with a carrier who embraces simplicity and offers varying enrollment strategies. This gives you flexibility in recommending the one that’s likely to be most effective.

"I want interaction and collaboration."

Social is the name of the game for the millennial generation. Peer networks play a huge role in decision-making. Employers would be wise to offer ways their employees can interact and network to get information. Blogs are an important way millennials build trust, gather information and connect. Promote them with your clients. They work.

"I want technology, not paper."

Clearly, the biggest difference between millennials and other generations is their use of technology … and their expectation that technology also be important to others with which they interact. They want to use tools that make benefits easier, such as apps and online portals. And they want alternatives to paper. They trust technology.


10 things to check when planning 2016 health benefit packages

The clock is ticking down to 2016 which means time is running out to dot the 'i' and cross the 't' for your health benefit packages. Employee Benefit Adviser has these tips.

1) Employer shared-responsibility (ESR) strategy: Ensure the intended goal of avoiding or paying ESR assessments for 2016 coverage is supported by coverage offers, administrative and recordkeeping processes, and benefit documents.

2) ESR reporting: Arrange data sources, systems and administrative processes to collect all information about enrollees with minimum essential coverage (MEC), full-time employees, and coverage offers needed for reporting on 2016 coverage. Create a process for correcting any erroneous IRS filings and personal statements.

3) Preventative care: Ensure “non-grandfathered” group health plans comply with the final ACA rules and recent guidance on cost-free preventive services.

4) Other ACA reporting and disclosure requirements: Review delivery operations for summaries of benefits and coverage (SBCs) and watch for revised SBC templates. Prepare for round two of online submission and payment of ACA’s reinsurance fee.

5) Mid-year changes to cafeteria plan elections: Decide whether to permit mid-year changes to cafeteria plan elections for either or both of the status-change events in IRS Notice 2014-55.

6) ACA’s out-of-pocket maximum: Verify that self-only and other (e.g., family) coverage tiers in “non-grandfathered” plans meet ACA’s 2016 out-of-pocket (OOP) limits for in-network care. Confirm that family coverage also satisfies ACA’s self-only OOP limit for each enrollee.

7) Same-sex marriages and domestic partnerships: Assess how the U.S. Supreme Court’s Obergefell v. Hodges ruling that legalizes same-sex marriage nationwide affects your benefit programs and employment policies. Also, consider the decision’s indirect implications for domestic partner coverage.

8) Mental health parity: Check that plan designs and operations provide parity between medical/surgical and mental health/substance use disorder (MH/SUD) coverage. Federal audits of health plans now evaluate compliance with the final Mental Health Parity and Addiction Equity Act (MHPAEA) rules that took effect in 2015. In addition, state legislative activity and litigation around parity issues continue.

9) Wellness: Review employee wellness programs against the proposed Equal Employment Opportunity Commission (EEOC) rules requiring voluntary participation and restricting incentives for completing health risk assessments and/or biomedical screenings. Be prepared to make changes after EEOC finalizes these rules for nondiscriminatory wellness plans under the Americans with Disabilities Act.

10) Fixed-indemnity and supplemental health insurance: Review fixed-indemnity and supplemental health insurance policies to ensure they qualify as excepted benefits under the ACA and the Health Insurance Portability and Accountability Act (HIPAA).


Overcoming Employee Disengagement

Originally posted by United Benefit Advisors (UBA).

Peter Freska, CEBS
Advisor

The LBL Group, a UBA Partner Firm

I have sat with hundreds of employers that want to make a difference. They want to make a difference in how their teams work, how productive the employees are, and better yet...in how they, as an employer, can attract, retain and engage the best and brightest people for long-term sustainable (profitable) growth of the organization. But many companies fall short. And, while most employees are 100% engaged when they start a new job, a recent Dale Carnegie Training study indicated that only 29% are fully engaged. In another article entitled "Overcoming Employee Disengagement," the author mentions that the "2013 RAND Health Study found that less than half of employees (46%) participate in health risk assessment (HRA) or clinical screenings, and out of those identified as needing a wellness program, less than one fifth chose to participate." (August 2014, Benefits Magazine) The point of the article was simple: that people create their own barriers to success.

So the question to pose is: With such low levels of overall engagement and low participation in something like an HRA, a simple thing that could help save a person's life, what can an employer do to really affect personal change for its employees? The answers are in Total Population Health Management, but let's concentrate on why employees maintain barriers and what is needed to make a difference.

When companies build and develop programs, they typically have productivity, efficiency, or most likely cost reduction motives. Well, what if a company builds a program that changes this paradigm by concentrating on more than just the bottom line?
For example, Costco is well noted for turning its nose up at Wall Street in years past. Costco pays its employees a living wage, provides benefits for almost 90% of its employees, pays the CEO much less than others in similar size companies, and it paid workers $1.50 per hour more over three years during the economic crisis. And the result of all these things is a fantastic shopping experience for you and me, with employees who tend to be fiercely loyal to the company and the members they serve.

There are more examples of service to the employees and customers that come to mind...Trader Joe's, TOMS Shoes, and Dogeared to name a few. All of these companies are working to do their part to make this world a better place, while still being a profitable company.

The methods that these organizations implement tend to break down the personal barriers that employees build up. These personal barriers come in many varieties; from emotional to cognitive, to environmental and deep-rooted habits, and even physiological. By creating a unified mission, vision, and set of core values at the root of an organization's culture, these personal barriers gradually diminish. And, as you know, just saying or writing it is not enough. Organizations need to actually live it every day. In fact, to really establish an organization's foundation of culture and values, these things need to happen every day through ongoing learning and reinforcement.