Category: Blog

Beginning in 2014, small employers may choose to provide health coverage to their employees through a Small Business Health Options Program (SHOP) Marketplace. Here are the top 5 questions we hear about SHOP:

How will a SHOP Marketplace operate?

For 2014, states with a federally facilitated Marketplace will have the employer choose one plan for all of its employees. Most state-run SHOP Marketplaces will allow employee choice of a plan at a metal level chosen by the employer beginning in 2014. Many of the federally-run Marketplaces will  add this option in 2015, although a state may delay employee choice to 2016 if the insurance commissioner believes a delay would be in the best interest of consumers.
 

Are there requirements to participate in a SHOP Marketplace?

Yes. The employer must have employed an average of one to 50+ employees during the prior calendar or plan year. Part-time employees will generally count as full-time equivalent employees, using the same method as is used for determining whether the employer is large enough for employer-shared responsibilities to apply.

The small employer must offer SHOP coverage to all eligible full-time employees. There is no requirement under PPACA that employer contributions be made, but insurers may require contributions at a certain level.  Employers that cannot meet minimum participation requirements may be limited to enrolling during an open enrollment period.
 

I have employees working in multiple states. How will that work?

Generally, the small employer will enroll all employees in the SHOP Marketplace in which its principal worksite is located. However, the employer may enroll employees in the SHOP of any state in which it has an office.
 

Is there annual re-enrollment in the SHOP Marketplace?

Yes. Employers will participate in the SHOP Marketplace for a 12-month plan year (which does not need to be a calendar year). If employees are allowed to choose their plan, they will be able to change their plan choice as part of the employer’s re-enrollment in the SHOP Marketplace.
 

Can new employees enroll midyear? What if an employee has a life event?

Newly eligible employees may enroll midyear, and their coverage will begin on the date they become eligible. An employee who has a special enrollment event may enroll or change plans within 30 days after the event.

+ The state may choose to set the maximum at 50 employees for 2014 and 2015 and all states have chosen to do this for 2014. The threshold will increase to 100 in 2016. 

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.

To meet federal requirements, large health plans must obtain a national health plan identifier number (HPID) by November 5, 2014. For this requirement, a large health plan is one with more than $5 million in annual receipts. The Department of Health an…

What do all employees have in common? They all have a burning dislike for their morning commute! Let’s face it, it’s not the actual commute that most people dislike, it’s the hassle of dealing with traffic, long lines, and rude people that make the trip so despised.

It doesn’t matter how an employee gets to work — whether it’s by car, train, plane, boat, or just walking, there’s always one or more aspects of a long commute that a person would like to change. How an employee starts the day is an important indicator of his or her attitude for the rest of that day.

You know the ad that proclaims 15 minutes could save you 15% by switching to some insurance? Well, I cut my commute time in half by switching my car’s horn from a beep to sounding like a machine gun. At least I wish I did. My former commute to work was 70 miles each way. While the traffic was always light, that commute still extracted a fair amount of energy from me due to the time spent on the road. Luckily for me, my supervisor allowed me to work from home two days a week.

Managers need to determine what an employee needs to be the most productive while at work. Some things are within their control such as having the best equipment, providing the most up-to-date training, or even a supplying a kick-start of coffee or a snack. However, there are a plethora of items outside their control that can disrupt productivity such as the need for eight hours of sleep, family issues, or even a particularly grueling commute. According to a recent Gallup poll, fourteen percent of all American workers report they spend at least 45 minutes getting to work. Gallup found that commutes of this length are linked to poorer overall wellbeing, daily mood, and health.

If a manager doesn’t have to endure the horrors of a long and demanding commute, it might be difficult for that person to understand the impact it has on an employee’s productivity and overall morale. Considering that the average worker spends five weeks a year commuting, it’s easy to see how someone might not feel motivated when he or she reaches the workplace.

Fortunately, restoring motivation in an employee with a lengthy commuting is relatively easy. That being said, it takes a manager who is willing to make compromises, have a fair amount of trust in his or her employees, and the necessary equipment — or the ability to lay the groundwork — to let them telecommute if the situation arises.

“Commuting can be a major challenge for employees,” says Jason Reeves, MBA, Director of Survey at United Benefit Advisors. “Employers can ease this burden by allowing telecommuting and flexible work schedules to take the burden off of long commutes during the rush hour.”

There is no doubt that a manager assumes a small amount of risk when letting an employee work from home, but if that manager is confident in the employee’s work ethic, then there should not be a reason to worry. In fact, most employees who telecommute report that they actually work harder from home than they do in the office because they felt like they had to “prove themselves” to their colleagues and show that they were pulling their weight.

When telecommuting is not an option, there are plenty of small changes in the workplace that can be made to help ease the pressure on workers who commute long distances:

• Allow commuting employees to work one day a week from home. The break from the commute will ease their stress and show them that you understand their situation.
• If employees primarily take public transportation as a way to get to work, then count one hour toward their time in the office as long as they use a laptop or other device to do job-related functions.
• Have flexible office hours so that employees can arrive, work an appropriate amount of time, then leave so as to avoid both morning and evening rush hours.
• Offer support (such as moving expenses, paid time off, etc.) to workers who are willing to relocate closer to the office.

Finally, be sympathetic. An employee may not have a choice when it comes to their commute and a little understanding can go a long way in making that person feel as though someone understands their morning struggle.

Wondering what other perks employees appreciate most? Download a copy of UBA’s 2013 Ancillary Survey executive summary to see which voluntary benefits employers use most to boost employee satisfaction, engagement, and retention. http://bit.ly/1sLxgGM

By Mary Drueke-Collins, FSA

As more and more Americans face high deductible health plans (HDHPs) and increased up-front out-of-pocket costs, it is more important than ever to closely monitor medical bills for errors. According to the Medical Billing Advocates of America, more than 80% of medical bills contain errors, which can cost patients thousands of dollars. Those errors may be simple mistakes, double billings, or in some cases, abusive charging practices.

One of the biggest problems for unforeseen fees is when an individual utilizes an out-of-network provider. 

Most insurance plans – medical, dental, and vision – have preferred provider networks that help reduce the charges when an in-network doctor is used. If an individual does not use an in-network provider, he or she may be subject to “balance billing.” Here’s what occurs under a balance-billing situation:

• The insurance company reimburses out-of-network doctors according to a schedule or a percentage of the usual and customary amount. Often times, the doctor’s charge is more than the reimbursement they receive from the insurance company. The doctor can then ask the individual to pay the balance, or the difference between what the insurance company reimburses them and their charges. 
• If an individual uses out-of-network providers, not only will he or she be responsible for the deductible, coinsurance and copayments, but he or she may also be responsible for this balance billing. Balance billing is common in medical, dental, and vision plans.

If an individual is covered by an HMO plan, he or she may not even have coverage for non-network doctors and hospitals. Before an appointment to see a doctor or have a procedure is done, make sure the doctor is in-network and the procedure(s) will be covered by the insurance plan. 

Know The Benefits

Some medical plans have copayments for services – emergency room visits, inpatient hospital stays, certain kinds of surgeries. It’s a good idea to understand what benefits an individual’s insurance plans cover before he or she has a major service. Then there won’t be any surprises after the procedure. 

Preventative Procedures

Most medical plans provide coverage for annual preventive exams, including pap smears, mammograms, and immunizations for children and adults. This coverage is usually provided without the individual having to pay anything – no copayments, not subject to deductible and coinsurance. Sometimes when the claim is sent to the insurance company from the doctor, the claim isn’t submitted correctly (as a preventive exam). In those instances, the individual has to pay a copayment or the cost of these claims. 

If an appointment for a preventive exam is scheduled with a doctor and the insurance company does not pay for the exam like someone thinks it should be paid, then that person should call his or her insurance company and/or doctor and ask them why. This person should also check with his or her doctor before any blood work is completed to ensure the tests are all covered under the insurance plan. 

Health Savings Accounts (HSAs)

If a business owner offers an HSA eligible plan to his or her employees, that person should consider going to a corporate bank and asking them to waive the fees for the employees on their Health Savings Accounts (an HSA eligible plan is also called a qualified High Deductible Health Plan). This is especially valuable if the employer is contributing to the HSA accounts and every employee is opening one. 

The Explanation of Benefits (EOB)

Always check the doctor’s bill versus the Explanation of Benefits received from the insurance company. Make sure all of the charges line up and that the doctor actually performed all those services. 

Shop Around

The cost of services in general can vary dramatically from doctor to doctor.  Most insurance plans offer cost and quality information on their websites. Most consumers shop around and do research when purchasing a TV or a new car, but they don’t take that extra step when it comes to their health. Insurance companies are providing more of that information. Consumers need to get in the habit of taking advantage of the information that’s available to them. 

Prescriptions

On the prescription drug side, medical plans may require an individual to pay a portion of the prescription drug costs if that particular drug has a generic alternative. When a prescription is filled at the pharmacy, it may not just cost someone the copayment, but the extra penalty for not selecting the generic. In some instances, that penalty will not apply if the prescription is written as “dispense as written” (DAW) by the doctor. 

The insurance plan may require an individual to try some lower cost alternatives before it will pay for a higher-cost drug. This is called  “step therapy.” Or, the insurance plan may require an individual to get prior authorization (PA) before filing the prescription. A doctor or pharmacist should be able to help someone identify the drugs that fall into these scenarios.

If someone is on a very expensive drug or a drug that requires special administration or delivery (often called a specialty drug), the insurance plan may require that person to get the prescription filled through a particular pharmacy. If that person does not fill the prescription through the insurance company’s specialty pharmacy, he or she is often charged a penalty or the claim may be denied. 

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Employee communication is critical, and helping them understand how to save money by keeping an eye on their medical bills as well as how they use medical services could save an organization and their employees a lot of money.

To make sure your plan design offers the best value to you and your employees, have a UBA Partner benchmark your health plan against other employers your size and with those in your region and industry. Find out more about benchmarking here: http://bit.ly/17u3M5T.

Mary Drueke-Collins is Vice President Employee Benefits for Swartzbaugh-Farber, a United Benefit Advisors partner firm in Nebraska.  

On February 10, 2014, the IRS issued final regulations on the employer shared responsibility requirements, often known as “play or pay.”  The play or pay requirements originally were to take effect in 2014, but on July 2, 2013, the White House announced that compliance would be delayed until 2015.

These requirements apply to “applicable large employers,” which the law defines as an employer that has 50 or more full-time or full-time equivalent employees within its controlled group.  However, the final regulations provide a transitional rule that will give many employers an additional year before they need to comply. While employers with 100 or more full-time or full-time equivalent employees will still need to meet the play or pay requirements in 2015, those with 50 to 99 full-time or full-time equivalent employees do not have to comply until 2016 if they meet certain requirements.  For these mid-size employees to be eligible for the delay, the employer will have to certify that:

• It has not reduced the size of its workforce or the overall hours of service of its employees so that it could qualify for this delay; and
• It has not eliminated or materially reduced any coverage it had in effect on February 9, 2014.  A material reduction means that:
  • The employer’s contribution is less than 95% of the dollar amount of its contribution for single-only coverage on February 9, 2014, or is a smaller percentage than the employer was paying on February 9, 2014;
  • Any change that was made to the benefits in place on February 9, 2014, will not cause the plan to fall below minimum value; or
  • The class of employees or dependents eligible for coverage on February 9, 2014, has been reduced.

This certification will be part of the reporting form that all applicable large employers will need to file early in 2016. 

The delayed play or pay compliance date does not affect the effective date of the other changes that apply in 2014 – most employers still must implement the 90-day maximum for waiting periods, discontinue pre-existing condition limitations, remove annual dollar maximums, and apply cost-sharing (out-of-pocket) limits.  Small insured groups still need to offer the 10 essential health benefits at the metal levels (i.e., platinum, gold, silver, and bronze) and use community ratings starting in 2014.

Large Employer Responsibilities and Potential Penalties

If an employer is large enough for the play or pay requirements to apply, two separate requirements, and potential penalties, apply.

The first requirement is that the large employer offer “minimum essential” (basic medical) coverage to most of its employees.  For 2015, “most” means 70%.  For 2016 and later, “most” means 95%. If the employer does not meet this requirement, it will owe $2,000 per full-time employee, even on employees who are offered coverage.  However, for 2015 the first 80 employees are excluded from this calculation.  Beginning in 2016, the first 30 employees are excluded.

Beginning in 2016, the requirement to offer minimum essential coverage includes dependent children (up to age 26).  An employer that offered coverage for dependent children in 2013 or 2014 is expected to maintain that eligibility.  Coverage does not have to be offered to stepchildren, foster children, or spouses to meet play or pay requirements.  However, employers will still need to offer coverage to stepchildren and foster children to meet the requirement to offer coverage to dependents to age 26.

The second requirement is that the large employer offer coverage that is both “affordable” and “minimum value” to its full-time (30 or more hours per week) employees or pay a penalty of $3,000 per year for each full-time employee who receives a premium tax credit/subsidy.  Therefore, an employer that provides minimum essential coverage to most of its employees and avoids the $2,000 per employee penalty still will have to pay the $3,000 penalty on an employee who is either in the group that is not offered coverage or who is offered coverage that is not both affordable and minimum value if the employee receives a premium tax credit. 

Note that these penalties are indexed, so the actual penalties will increase each year based on cost-of-living adjustments.  This adjustment may occur as early as 2015.

Coverage is considered affordable for purposes of the play or pay requirement if the cost of single coverage for the least expensive plan option that provides minimum value does not exceed 9.5% of the employee’s safe harbor income or Federal Poverty Level (FPL).  The cost of single coverage is always the measure of affordability, even if the employee has family coverage.  An employer may use any of three safe harbors when measuring the employee’s income:

• The employee’s Box 1 W-2 income for the current year
• The employee’s rate of pay on the first day of the plan year, multiplied by 130 for hourly employees to create the employee’s assumed monthly income
• The most recently published FPL for a single person (for 2014, FPL for a single person in the 48 contiguous states is $11,670; for Alaska it is $14,580 and for Hawaii it is $13,420)

Coverage is considered minimum value if the actuarial value of the coverage is at least 60%.

Additional information is available through a Treasury Department fact sheet and an IRS Questions and Answers sheet. 

For more help making your “Play or Pay” decision, Download UBA’s “Employer’s Guide to ‘Play or Pay'”.

04.27.2014

The IRS has released the 2015 minimums and maximums that apply to health savings accounts (HSAs) and related high-deductible health plans (HDHPs). These increases occur annually based on a cost-of-living formula.  Because the inflation rate is fai…

Employers of all sizes are challenged to rethink employee benefits in this new world of health care reform. Tight budgets and a still-recovering economy are spurring benefits managers to think beyond health insurance and look at their benefits as a whole.

United Benefit Advisors and Colonial Life are hosting a WisdomWorkplace webinar for HR professionals and employers, titled “Managing Benefit Costs – A Top Business Priority” on Wednesday, April 23, 2014 at 2:00 p.m. ET. 

Although the employer-based benefits landscape is radically changing, several truths are certain:

• Employees will need reliable, actionable information to make wise decisions about benefits.
• Voluntary offerings that are mostly untouched by the hand of health care reform are more attractive tools than ever to enhance employment recruitment and retention.
• Voluntary benefits continue to offer valuable and affordable financial protection for working Americans.
• Benefits communication that is meaningful and personalized provides an effective means to combat the confusion of health care reform and create an environment of choice, value and security.

Join Belinda Maffei, Director of Broker Market Development at Colonial Life, for a webinar on how voluntary benefits and benefits education & communication can be tremendous assets to employers looking for a cost-effective way to offer a competitive benefits package.

To register for the webinar, visit UBA WisdomWorkplace webinars and enter code “COLUBA” to receive the complimentary $149 discount. This webinar has been submitted to the Human Resource Certification Institute to qualify for 1.25 recertification credit hours.

By Josie Martinez
Senior Partner and Legal Counsel 
EBS Capstone, A UBA Partner Firm

The Department of Labor (DOL) collected more than $1.6 billion in fines in fiscal year 2013 and has hired 700 new agents to enhance its enforcement and plan audit efforts.  As a result of an uptick in DOL audits, those employers that might not have been targeted before are now being targeted, regardless of size, industry, or location.  What we have come to learn is that the easier and smoother an employer makes the audit process for the auditor, the less painful the audit will be for the employer.  What may have been scheduled as a multi-day audit can instead be wrapped up in a matter of hours.  Preparation and organization are vital. 

Recently, it seems that the audit letters received by employers grant a short window of time until the on-site field investigation is scheduled to take place, thereby making adequate preparation almost impossible, particularly when one considers the fact that many of the documents requested need to be obtained from third parties.  Therefore, upon receipt of the DOL audit letter, an employer should immediately contact the DOL investigator assigned to the case and ask for a 30-day extension.  This will give the employer some breathing room to collect and organize the necessary information. 

Break down what the DOL wants.  Along with the audit letter, the employer will receive an attachment that lists the various documents and information requested. Sometimes, requests such as “Materials describing …” or “samples of …” are vague.  It is important to identify exactly what documents and information will be responsive to each request before the collection process can begin so you have a thorough, exhaustive list of what documents to obtain and from whom to request them.

Collection of requested documents and information.  Having created a detailed list of the necessary documents, it is now time to reach out to carriers and relevant third parties to obtain the necessary documentation.  As the documents arrive, each should be indexed in a folder according to the DOL request to which each is responsive.  For example, if the DOL request number 1 seeks “plan document and all amendments,” then the employers’ wrap document should be identified to respond to this particular request.  It is also wise to designate sections of documents or excerpts from plan documents that may be responsive to a particular request and have those provisions copied separately so that the auditor does not have to search for the information relevant to the request.  The more specific and narrow the employer is in providing the information, the easier it will be for the auditor to review it. 

Provide a roadmap. To make the process even more efficient, provide a log detailing the request number, the item description and the responsive documentation including any necessary comments so that the auditor has a master list from which he or she can work.  The list helps to demonstrates that every request has been met and, if not, the reason why such documents are not available, or why such information is not applicable and does not exist.

Whatever process the employer chooses to follow in order to prepare for the on-site investigation, preparation, organization, and accessibility of information are critical to an efficient audit.

Many group health plans will need to be amended to reflect the required changes to benefits and waiting periods that take effect in 2014. Employers also should consider whether eligibility language will need to be updated to reduce the number of hours the employee must work to be eligible, to address look-back periods, and/or to base eligibility on actual hours worked instead of the “regularly scheduled to work” standard that is common now.

Section 125 plans have until December 31, 2014, to amend the plan for any or all of these changes:

• The required reduction in the maximum employee contribution to a health care FSA of $2,500
• A one-time opportunity to make a mid-year change during the 2013-2014 plan year because of the individual mandate and/or opening of the health Marketplace [available to non-calendar year plans only]
• Adoption of the newly permitted health care FSA rollover (and elimination of any available grace period)

HRAs must be amended to allow an employee, or a former employee, to permanently opt out of and waive future reimbursements from the HRA and to provide that upon termination of employment either the remaining amounts in the HRA will be forfeited or the employee will be permitted to permanently opt out of and waive future reimbursements from the HRA.  The IRS has added this requirement because a person is ineligible for a premium tax credit if covered by minimum essential coverage. HRAs are considered minimum essential coverage, and the IRS does not want individuals to lose a premium tax credit simply because they have a small balance in their HRA.

Health plan amendments are an important part of preparation for PPACA. For information on all aspects of PPACA readiness, including determining “large employer” status, 2014 benefit requirements, and 2015 requirements for large employers, download Preparing for PPACA – A Readiness Checklist.

By Lisa Weston, CWC, CWPC
Director of Employee Wellness Promotion
the bagnall company, a UBA Partner Firm

More than 75 cents of every health care dollar spent in the United States goes toward treating chronic diseases such as arthritis, asthma, cancer, cardiovascular disease, and diabetes, according to the Centers for Disease Control and Prevention. Because these conditions are the No. 1 cause of death and disability, and consequently the primary factor in rising health care costs, moving toward prevention-based care will be the key that helps both employers and employees pull health care costs back from the edge of crisis over the long term.

According to the 2013 UBA Health Plan Survey of nearly 11,000 employers, 19.2% of all insurance plans offer some sort of wellness program. Health Risk Assessments (HRAs) remain the most popular offering with 81% of plans participating, 62.3% offer incentive awards (a 3.1% decrease), 61.3% offer a physical exam (a 1.1% decrease); the programs that saw the biggest increase were coaching at 56.2% (a 4.9% increase) and online wellness portals at 54.7% (a 4.7% increase).

The questions are whether comprehensive wellness programs are effective and how are results measured?  

Whether or not a wellness program is effective depends on many factors, and most importantly, the organization’s goals. Typically, a wellness program is trying to increase employee engagement and productivity, while lowering long-term costs.

For all employers with wellness programs, the goal is to meet the needs of the employees to impact their overall health. In order to measure effectiveness, keep track of everything. Track participation in all events, onsite education, and challenges. Track cost per person, and most importantly, total population participation. Track progress and participation from year to year to see the overall impact of the program. Also, develop the wellness program around the medical claims trends.  If available, use Health Risk Assessment (HRA) data and biometric data, as well.  

How wellness programs impact productivity is difficult to measure, but not impossible. Return on investment of wellness related to worker productivity can be determined primarily with the utilization of an employee HRA that addresses the following four areas:

1. Absenteeism (work time missed): Percentage of work time missed due to health problems or a specific condition.
2. Presenteeism (reduced on-the-job effectiveness): Percentage of impairment while working due to health problems or a specific condition.
3. Work productivity loss (absenteeism plus presenteeism): Percentage of overall work impairment due to health problems or a specific condition.
4. Activity impairment (other than work): Percentage of activity impairment due to health problems or a specific condition.

Implementing an HRA and having employees self-report how their health problems or specific conditions impact these four areas will provide employers with a method to determine the impact wellness has on productivity. Furthermore, the utilization of the HRA allows for employers to obtain aggregate reporting specific to productivity and participation.
 
Unfortunately, not all employers wish to implement an HRA campaign. Without having HRA data available, determining the impact wellness has on productivity is very difficult.

As previously mentioned, the key to finding value in developing a wellness program is ensuring the program has offerings and programs in which employees actually want to participate.  Careful planning is essential.  Employers must assess employee’s needs with an HRA or biometric data and also assess their wants with interest and incentive surveys. The question each employer should ask themselves is “What target am I trying to hit?” Then they should plan their program accordingly.

For further information about wellness trends, download a copy of the 2013 UBA Health Plan Survey Executive Summary http://bit.ly/PSEFrx.