Category: Blog

The Family and Medical Leave Act (FMLA) regulations that became effective in 2009 provide employers with mechanisms by which we can better curb FMLA abuse. However, there are also some traps employers can fall into if they do not review the regulations carefully and administer leave requests appropriately. 

The following are the top 10 mistakes employers make that allow FMLA abuse and can create liability for employers:

1. Improperly Determining Eligibility: Some things to consider when determining eligibility include: employees must have worked for a covered employer, they must have worked 1,250 hours and 12 months, and they must have worked at a worksite where there are 50 employees in a 75-mile radius.
    
2. Deeming Employees FMLA Eligible: An employer cannot “deem” an employee eligible for FMLA if they are not eligible. An employer cannot deem an absence to be FMLA-covered if it is not. 
    
3. Failure to Provide Required Notices: Employers have to give four notices: a general notice, eligibility notice, rights and responsibilities notice, and a designation notice. It’s important to know how and when these notices can be given.
    
4. Using a Calendar Year 12-month Period: An employer can choose the method by which the applicable 12-month period is measured (calendar, fixed year, measured forward or rolling backward) during which an employee is entitled to leave.
    
5. Failure to Calculate Leave Entitlement Appropriately: There are different regulations that determine how holidays within FMLA are treated, how much leave an employee is entitled to take based on their actual workweek, what to do if an employee’s schedule varies from week to week, and how to calculate FMLA time for an employee that was scheduled to work overtime but could not do so due to an FMLA qualifying event.
    
6. Failure to Properly Designate FMLA Time: Employers must designate FMLA time within five business days of determining that leave qualifies as FMLA. Employers can also track intermittent leave in the smallest increment used to track other forms of leave, provided it is not more than one hour. Special rules apply.
    
7. Inappropriate Use of Medical Certifications: An employer must provide an employee written notice that a certification is incomplete or insufficient. An employer can also contact the Health Care Provider for clarification or authentication, but it is important to know who can make contact.
    
8. Failure to Request a new Certification and Re-determine Eligibility in a new Leave Year: Once an employee is determined to be eligible for FMLA, he or she remains eligible for one year for that leave reason. It is important to know, however, what to do if an employee’s need for leave lasts beyond a year. There are steps employers can take to protect against abuse in this area.
    
9. Improper Use of ReCertifications: Recertification cannot be requested more often than every 30 days unless certain parameters are in place. However, regardless of the minimum duration of the condition, recertification can be requested every six months.
    
10. Failure to Monitor Intermittent Leaves Closely: There are many things an employer can do to watch for abuse; for example, watch for patterns of absence, request recertifications as often as possible, and require employees to attempt to schedule planned medical treatment at less disruptive times. 

Employers need to know the laws so they can adopt leave policies that prevent abuse while maintaining compliance. 

For further information including best practices in all of the top 10 areas of FMLA mistakes, attend UBA’s webinar, “Curbing FMLA Abuse,” on Thursday, July 10, 2014, at 2:00 p.m. ET / 11:00 a.m. PT. Go to http://bit.ly/1pJqIfR and enter code UNUMUBA for a $149 discount. 

On June 30, 2014 the U.S. Supreme Court issued a decision in a case generally referred to as the Hobby Lobby case. Hobby Lobby is a family-owned for-profit corporation. The family that owns Hobby Lobby strongly believes that it would violate their deep…

The Patient-Centered Outcomes Research Institute (PCORI) fee is due July 31, 2014, for virtually all group medical plans.

Who is responsible for this fee?

The carrier is responsible for paying the fee on insured policies, and the employer/plan sponsor is responsible for paying the fee on self-funded plans [including Health Reimbursement Arrangements (HRAs)]. IRS Form 720 is used to report and pay the fee.

What is PCORI? 

PPACA created a private, non-profit corporation called the Patient-Centered Outcomes Research Institute (PCORI). The Institute’s job is to research the comparative effectiveness of different types of treatment for certain diseases, and to share its findings with the public and the medical community. The goal is to improve quality of treatment and reduce unnecessary spending. The fee is to support this research.

The PCORI fee applies from 2012 to 2019. The fee is due based on plan/policy years ending on or after October 1, 2012, and before October 1, 2019. The fee is due by July 31 of the year following the calendar year in which the plan/policy year ended. This means that the first fee was due July 31, 2013, for those on November, December, and calendar year plan years. The first fee is not due until July 31, 2014, for those with plan years that start January 2 through October 1.

Get the latest information on fee start and end dates, calculation methods, reporting rules and more with UBA’s recently updated PCORI resources, including:
 

1.  Highlights of the PCORI Fee. For those interested in a condensed explanation of the PCORI fee, this document includes:

• How the fee is calculated
• Who the fee applies to
• What is included in “group health coverage”
• Options for calculating the fee

Download the free highlights now.
 

2.  Frequently Asked Questions (FAQ) about the PCORI Fee

View the FAQ now. 

3.  Comparison Chart of PCORI and TRF. Many employers are gearing up to comply with the new fees under the Patient Protection and Affordable Care Act (PPACA). UBA offers a comparison of the PCORI fee and the Transitional Reinsurance Fee (TRF) that gives a side-by-side comparison of each, including start and end dates, reporting methods, fee due dates, exclusions, calculation methods and more.

Request the PCORI and TRF Comparison Chart now.

For further information, please contact a UBA Partner Firm near you.

By Josie Martinez, Senior Partner and General Counsel
EBS Capstone 

As of January 1, 2014, the Patient Protection and Affordable Care Act (PPACA) requires pediatric dental benefits to be one of the 10 essential health benefits (EHB) that must be included in individual and small group medical coverage, as well as coverage offered through the Exchanges. 

The EHB dental benefit applies to children ages 0-18.  It is estimated that as many as 5.3 million additional children will receive dental coverage as a result of PPACA. The services covered may include preventive and diagnostic services, basic and major restorative services. It also applies to “medically necessary” orthodontic services. Since “medically necessary” is subject to interpretation, prior authorization is recommended as there are pre-treatment requirements.  The expectation is that pediatric dental procedures covered will be fairly similar to those covered today under separate commercial plans. Specific coverage provisions, however, are a state-by-state determination because each state has its own EHB packages [obviously guided by the Department of Health and Human Services (HHS)]. Therefore, a state could choose to only cover semi-annual preventative visits with x-rays and sealants.  Some states will include orthodontia; others may not. 

Historically, the vast majority of dental benefits have been sold under a dental policy separate from medical.  At a federally run Exchange, consumers will continue to have the option to purchase stand-alone dental coverage for themselves and dependents over 18.  However, under the new rules outside the Exchanges, ALL medical policies offered to consumers in the individual and small group markets MUST include pediatric dental benefits. 

Employers and employees that have pre-existing medical and dental insurance plans are finding this confusing… there may be duplication of dental coverage for children under 18 as of 2014 for employees that have both stand-alone dental coverage and medical coverage. 

Which coverage applies?  Who is covered?  When should I use my dental plan?  In most cases, the medical plan coverage will be primary to any additional dental policy that applies.  So, when a child under 18 visits the dentist now, the employee should be directed to show the medical plan ID card in addition to any dental plan coverage.  If the medical plan includes pediatric dental coverage, the member may not need to take any additional action to process the claim.

To avoid duplication of premiums, employees can drop their children from their separate dental plans.  However, before doing so, they should be advised to consider 1) the network of dentists and 2) the scope of services.  Depending on the network size and scope of services provided by the medical plan, employees may want to keep supplemental dental coverage to ensure more comprehensive benefits.

1. What must I do to avoid the employer taxes?

Beginning in 2015, if you average enough full-time employees or full-time employee equivalents during a calendar year to be considered an “applicable large employer,” to avoid the shared-responsibility penalty you must provide medical coverage that:

• Provides “minimum essential coverage;” and
• Is “affordable” and provides “minimum value.”

2. What is an “applicable large employer?”

An “applicable large employer” (large employer) is an employer that had a certain number of full-time and full-time equivalent employees during the prior calendar year. For 2015, a large employer is an employer that has 100 or more full-time or full-time equivalent employees in 2014. An employer with 50 to 99 employees also will be considered large for 2015 if it does not meet coverage maintenance requirements. For 2016 and later, a large employer is an employer that had 50 or more full-time or full-time equivalent employees during the prior calendar year.

3. How do I know if I have 100 or 50 full-time or full-time equivalent employees?

An employee is counted as a full-time employee if the employee was employed an average of 30 hours per week during the prior calendar year. 

An employee counts toward a full-time equivalent employee if the employee worked an average of less than 30 hours per week during a calendar month. To calculate the number of full-time equivalent employees for a month, the hours of all full-time equivalent employees are totaled and then divided by 120.

EXAMPLE: During January, Company A has 30 employees who average 40 hours per week, 19 employees who average 30 hours per week, 1 employee who worked 60 hours during the entire month, and 1 employee who worked 82 hours during the month. 

Company A has 49 full-time employees [30 + 19] and 1.2 full-time equivalent employees [(60 + 82) ÷ 120 = 1.18]. Therefore, Company A has 50 employees for that month for purposes of the penalty. 

Note: There are special rules for employers with seasonal employees. Employers in a controlled group, or affiliated service group, are combined when deciding how many employees they have.
 

4. Who is an “employee”?

The Patient Protection and Affordable Care Act (PPACA) says that “common law” employees are the workers covered by the law.

5. Do I have to cover dependents?

Employers need to offer coverage to children up to age 26 by 2016 to avoid penalties for not offering coverage. Employers do not have to offer coverage to spouses.

For further information about the health care reform requirements for your business, download UBA’s complimentary guide, “PPACA Compliance and Decision Guide for Small and Large Employers” from the PPACA Resource Center at http://bit.ly/1nHbaWv.

PPACA Symptom Checker Diagnoses Your Penalty Prognosis

Understanding the penalties for not offering adequate coverage under the Patient Protection and Affordable Care Act (PPACA) is tricky for many employers. Use UBA’s chart below to see if your company will have to pay a penalty. For further information about the health care reform requirements for your business, download UBA’s complimentary guide, “PPACA Compliance and Decision Guide for Small and Large Employers” from the PPACA Resource Center at http://bit.ly/1nHbaWv. If you are not sure if you are a large or small employer under PPACA, request UBA’s Counting Employees Under PPACA.  

By Carol Taylor
Benefits Advisor
D&S Agency 

For employers and their employees, past and present, there may be a few issues that you need to consider before enrolling through products sold in the Federally-Facilitated Small Business Health Options Program (FF-SHOP).

Nestled among the multiple emails received last week from the regulatory agencies over the Patient Protection and Affordable Care Act (PPACA), under the heading of FAQ Updates on the SHOP, Agent-Broker – Other is FAQ 1955. The short FAQ announces that the Consolidated Omnibus Budget Reconciliation Act (COBRA) transactions will not be supported in the FF-SHOP Exchange for small businesses as of November 15, 2014, but will only be supported in a future release. The FAQ can be found here: https://www.regtap.info/faq_viewe.php?i=1995

For small employers that meet the requirements to offer COBRA continuation to their former employees or dependents, the FF-SHOP will not be an option, even if they qualify for the Small Business Tax Credit (SBTC). While the Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS) work out the information technology on how to allow for these transactions, any tax credit the business would qualify for would be quickly negated with the $100 per day fine for each qualified beneficiary entitled to COBRA. So, if a family of four qualified for COBRA, that would be a $400 per day fine for each day they were not given notice, or for each day they were not allowed to enroll in that coverage. COBRA, which is enforced by the Department of Labor (DOL), has been around for several decades for employer groups that have more than 20 full-time equivalent employees working at least 50% of the days of the prior calendar year. Controlled organization rules also apply in determining the count. It is not likely the DOL will allow for any transitional relief for this issue given how long the laws have been in place.

This also brings into question whether this FAQ would also be applicable to states where “mini-COBRA” must be offered. These “mini-COBRA” rules apply to employers in states that have enacted continuation laws for groups that do not meet the federal requirements. These groups have fewer than 20 full-time equivalent employees. Not all states have these requirements, but many do and this will likely also be problematic for them to utilize the FF-SHOP initially. This will likely be a concern, even though no official word has been released yet from HHS or CMS, on this issue.

For employee consideration, a new COBRA model election notice was released several weeks ago to include a statement about options in the individual Marketplace. However, the federal or state continuation may be the persons’ best option versus going to the Marketplace for coverage. In many areas of the country, the individual Marketplace products have higher deductibles and out of pocket maximums than the group coverage. There is likely no deductible credit on the individual product, so if they have already met it this year on their group plan, they will start all over again. Also, there may be limited networks offered in the individual Marketplace products, or even a limited choice of insurance carriers.

It will likely be in the employers’ best interest to delay utilizing the FF-SHOP, at least until the issues have been worked out surrounding COBRA continuants. 

There’s no denying it. The vast majority of workers won’t be ready financially for retirement. Seventy percent are behind schedule in saving for retirement and half of all Americans have less than $10,000 in savings. Of immediate importance is the fact that nearly half of the oldest boomers are at risk of not having sufficient retirement resources to pay for basic retirement and healthcare costs!  

Why should you care about retirement readiness? The answer is simple: Because retirement delays can hurt your bottom line.

The majority of employers expect the cost of healthcare and other benefits to rise due to delayed retirements. And they’re exactly right. In fact, for each employee over the age of 65, a plan sponsor could be paying $5,000 more per year for health care. (Source: EBRI Estimates) 

In addition, the cost of employees working beyond the normal retirement age can have potentially significant implications for your business as a whole.

So how do you know if employees are saving enough, and how do you measure success?

Simple plan design changes can have huge impacts on participant outcomes. Features like automatic enrollment and automatic deferral increases, for instance, use participants’ inertia to their advantage.

In fact, 91% of participants stay in the plan when automatically enrolled. And 88% of employees participate in an automatic escalation program when it’s a default feature—only 12% opt out. But when they have to sign up on their own, just 6% participate.

UBA, in partnership with Principal Life, are hosting the complimentary webinar “Breaking Through the Barriers to Create Retirement Plans that Work for Everyone” on Thursday, June 19, 2014 at 2:00 pm EDT / 11:00 am PDT.

Webinar attendees will receive practical tips on how to:

• Evaluate a plan to determine the income replacement ratio
• Determine if effective plan design features are in place
• Implement plan design changes to help employees retire on time

To register for the webinar, visit UBA’s WisdomWorkplace webinar series at http://bit.ly/1hzjaTW and enter code UBAPFG to receive the complimentary $149 discount.

As the cost of employer-sponsored health insurance continues to rapidly outpace wages and inflation, now more than ever employers are looking for ways to keep costs down. One way to do so (that requires very modest investment) is by improving benefits communication, a critical component of employee engagement.

Industry research has shown that employees have a positive perception of their benefits (even when the overall package is mediocre) if there is an excellent communications plan in place. Unfortunately, three out of four employees say they need more education to understand how changes in their benefits affect their financial safety net*.

And, as more and more employers move to high deductible health plans, making employees aware of how to use their benefits and take control of their health care consumption will be the key to cost savings.

UBA’s white paper, “A Business Case For Benefits Communications,” addresses how best to reach employees, what they need to know, and how they prefer to receive the information. 

For example, here are a few examples from the white paper:
 

HIDDEN PAYCHECKS

Total compensation statements, or “hidden paychecks,” serve as excellent ways to inform employees about what the company is providing for them. These statements not only outline an employee’s wages but also display the employer’s contributions to benefit plans such as medical, life, retirement, and more.
 

MAKING EMPLOYEES ‘STEWARDS’ OF THE PLAN

Sharing the financials associated with the health plan and other benefits help employees understand and become ‘stewards’ of the plans, wanting to become better consumers and help control costs. It’s helping employees understand what they can and can’t control in the health care puzzle.
 

BENCHMARKING DATA

Communicating benchmark data about how an employer’s plan compares with those of other companies is another way to drive home the value of a benefits package.

“We use the benchmark data from the UBA Health Plan Survey to compare not only benefits, but contribution levels,” says Andrea Kinkade, president/employee benefits advisor with Kaminsky & Associates, a UBA Partner Firm in Ohio. “We even use it during open enrollment meetings to illustrate how our clients’ benefits and contributions levels are better than their peers. It is an extremely beneficial and key part of the renewal process as many companies struggle with what level of coverage to offer and how much cost sharing to include. When their benefits exceed the benchmarks, it is a great reminder to employees of just how good a medical program they have.” 

Download a copy of UBA’s white paper today for an in-depth look at employee benefits communication strategies: http://bit.ly/1gJR3GE.

*Colonial Life survey

The regulatory agencies have recently issued two sets of guidance that affect an employer’s Consolidated Omnibus Budget Reconciliation Act (COBRA) obligations and opportunities under the Patient Protection and Affordable Care Act (PPACA).

Special Enrollment for COBRA Beneficiaries

Under the Marketplace special enrollment rules, a person who has a COBRA qualifying event may enroll in a Marketplace policy as a special enrollee when the person first becomes eligible for COBRA.  A qualified beneficiary also may enroll mid-year as a special enrollee when COBRA expires.  In both of these situations, the person is eligible to apply for a premium subsidy. However, a qualified beneficiary may not drop COBRA part way through the coverage period to enroll in Marketplace coverage – unless he or she does so during open enrollment. 

The regulatory agencies were concerned that qualified beneficiaries did not understand these rules and therefore the federally-facilitated Marketplaces are offering a special enrollment period until July 1, 2014.  According to guidance issued by the Department of Health and Human Services (HHS) on May 2, 2014, during this special enrollment period qualified beneficiaries may drop COBRA and enroll in the federal Marketplace.  (State-run Marketplaces may, but are not required to, offer this special enrollment period.)  Employers are not required to notify qualified beneficiaries of this special, extended enrollment period, but they may wish to do so.

Updated COBRA Notices

The Department of Labor (DOL) has updated both the model General Notice of COBRA Continuation Rights and the model COBRA Continuation election notice to include information about the Marketplace.  The model general notice now includes basic information about Marketplace coverage and includes a Web address the participant can consult for more information. The model election notice, which was revised in 2013 to include information about the Marketplace, has been revised again to include more detailed information about Marketplace coverage, rules, and options. Employers are not required to re-distribute the General Notice, but they may wish to provide it as part of the next open enrollment period to help ensure that individuals who become COBRA-eligible consider the possibility of purchasing Marketplace coverage, rather than COBRA. 

The election notice still must be provided to new qualified beneficiaries within 14 days after the plan administrator is notified that a qualifying event has occurred.  There is also a 30-day period for an employer to notify the plan administrator that a qualifying event has occurred, so in many cases the notice does not need to be given until 44 days after the qualifying event.  Employers may wish to provide election notices well before the deadlines to give qualified beneficiaries adequate time to choose between COBRA and Marketplace coverage, since the special enrollment period for Marketplace coverage ends 60 days after employer-provided coverage ends.   

There is no deadline to begin using the updated notices, but employers should begin using them as soon as they can. The notices are models, so the employer may modify them to better fit its situation.

For further information about the health care reform requirements for your business, download UBA’s complimentary guide, “PPACA Compliance and Decision Guide for Small and Large Employers” from the PPACA Resource Center at http://bit.ly/1nHbaWv.