Yearly Archives: 2016

  • Regulations Regarding Short-Term Limited-Duration Insurance, Excepted Benefits, and Lifetime/Annual Limits | CA Benefit Advisors

    December 29, 2016

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    Recently, the U.S. Department of the Treasury, Department of Labor (DOL), and Department of Health and Human Services (HHS) (collectively the Departments) issued final regulations regarding the definition of short-term, limited-duration insurance, standards for travel insurance and supplemental health insurance coverage to be considered excepted benefits, and an amendment relating to the prohibition on lifetime and annual dollar limits.

    Effective Date and Applicability Date

    These final regulations are effective on December 30, 2016. These final regulations apply beginning on the first day of the first plan or policy year beginning on or after January 1, 2017.

    Short-Term, Limited-Duration Insurance

    Short-term, limited-duration insurance is a type of health insurance coverage designed to fill temporary gaps in coverage when an individual is transitioning from one plan or coverage to another plan or coverage. Although short-term, limited-duration insurance is not an excepted benefit, it is exempt from Public Health Service Act (PHS Act) requirements because it is not individual health insurance coverage. The PHS Act provides that the term ‘‘individual health insurance coverage’’ means health insurance coverage offered to individuals in the individual market, but does not include short-term, limited-duration insurance.

    On June 10, 2016, the Departments proposed regulations to address the issue of short-term, limited-duration insurance being sold as a type of primary coverage.

    The Departments have finalized the proposed regulations without change. The final regulations define short-term, limited-duration insurance so that the coverage must be less than three months in duration, including any period for which the policy may be renewed. The permitted coverage period takes into account extensions made by the policyholder ‘‘with or without the issuer’s consent.’’ A notice must be prominently displayed in the contract and in any application materials provided in connection with enrollment in such coverage with the following language:

    THIS IS NOT QUALIFYING HEALTH COVERAGE (‘‘MINIMUM ESSENTIAL COVERAGE’’) THAT SATISFIES THE HEALTH COVERAGE REQUIREMENT OF THE AFFORDABLE CARE ACT. IF YOU DON’T HAVE MINIMUM ESSENTIAL COVERAGE, YOU MAY OWE AN ADDITIONAL PAYMENT WITH YOUR TAXES.

    The revised definition of short-term, limited-duration insurance applies for policy years beginning on or after January 1, 2017.

    Because state regulators may have approved short-term, limited-duration insurance products for sale in 2017 that met the definition in effect prior to January 1, 2017, HHS will not take enforcement action against an issuer with respect to the issuer’s sale of a short-term, limited-duration insurance product before April 1, 2017, on the ground that the coverage period is three months or more, provided that the coverage ends on or before December 31, 2017, and otherwise complies with the definition of short-term, limited-duration insurance in effect under the regulations. States may also elect not to take enforcement actions against issuers with respect to such coverage sold before April 1, 2017.

     

    By Danielle Capilla, Originally published by United Benefit Advisors – Read More

  • New Law Allows Small Employers to Pay Premiums for Individual Policies | California Employee Benefits

    December 26, 2016

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    This week, the U.S. Senate passed the 21st Century Cures Act which includes a provision allowing small businesses to offer a new type of health reimbursement arrangement for their employees’ health care expenses, including individual insurance premiums. The act was previously passed by the House and President Obama is expected to sign it shortly. The provision for Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs), a new type of tax-free benefit, takes effect January 1, 2017. Further, the act retroactively relieves small employers from the threat of excise taxes under prior rules for plan years beginning before 2017.

    Background

    Employers of all sizes currently are prohibited from making or offering any form of payment to employees for individual health insurance, whether through premium reimbursement or direct payment. Employers also are prohibited from providing cash or compensation to employees if the money is conditioned on the purchase of individual health insurance. (Some exceptions apply; e.g., retiree-only plans, dental/vision insurance.) Violations can result in excise taxes of $100 per day per affected employee.

    The prohibition, implemented under the Affordable Care Act (ACA), was intended to discourage employers from canceling their group plans and pushing workers into the individual insurance market. The rules have been particularly disruptive for small businesses, however, since previously it had been common practice for many small employers to subsidize the cost of individual policies instead of offering group coverage. The new law, passed this week with broad bipartisan support, responds to the concerns of small businesses.

    New Qualified Small Employer HRAs

    The new law does not repeal the ACA’s general prohibition against employer payment of individual insurance premiums. Rather, it provides an exception for a new type of arrangement — a Qualified Small Employer HRA or QSEHRA — provided that specific conditions are met.

    First, the employer must meet two conditions:

    • Employs on average no more than 50 full-time and full-time-equivalent employees. In other words, the employer cannot be an applicable large employer as defined under the ACA; and
    • Does not offer a group health plan to any of its employees.

    Next, the QSEHRA must meet all of the following conditions:

    • It is funded solely by the employer; employee contributions are not permitted;
    • It is offered to all full-time employees, although the employer may choose to include seasonal or part-time employees and/or may exclude employees with less than 90 days of service;
    • For tax-free QSEHRA benefits, the employee must have minimum essential coverage (e.g., medical insurance under an individual policy);
    • It pays or reimburses healthcare expenses (e.g., § 213(d) expenses) and premiums for individual policies;
    • It does not pay or reimburse contributions for any employer-sponsored group coverage;
    • The same benefits and terms apply to all eligible employees, except the benefit amount may vary by:
      • Single versus family coverage;
      • Prorated amounts for partial-year coverage (e.g., new hires); and
      • For premium reimbursements, variations consistent with the age- and family-size rating structure of a representative individual policy; and
    • Benefits do not exceed $4,950 if single coverage (or $10,000 if family coverage) per 12-month plan year. Amounts are prorated if covered for less than 12 months. Limits will be indexed for inflation.

    Coordination with Exchange Subsidies

    Coverage under a QSEHRA will affect the employee’s eligibility for a subsidized individual policy from an insurance Exchange (Marketplace). Any subsidy for which the employee would otherwise qualify will be reduced dollar-for-dollar by the QSEHRA.

    Benefit Laws

    Group health plans are subject to numerous federal laws, including SPD and other notice requirements under ERISA, coverage continuation requirements under COBRA, and benefit mandates under the ACA. The new law specifies that QSEHRAs are not group health plans, so COBRA and other requirements will not apply.

    QSEHRA Notices

    Small employers offering QSEHRAs will be required to provide a notice to each eligible employee that:

    • Informs the employee of the QSEHRA benefit amount;
    • Instructs the employee that he or she must give the QSEHRA information to the Exchange if applying for a subsidy for individual insurance; and
    • Explains the tax consequences of failing to maintain minimum essential coverage.

    QSEHRA notices should be provided at least 90 days before the start of the plan year.

    Employers also will be required to report the QSEHRA coverage on Form W-2, Box 12. The reporting is informational only and has no tax consequences. Although small employers usually are exempt from this type of W-2 informational reporting, apparently it will be required for QSEHRAs starting with the 2017 tax year.

    More Information

    To learn more about QSEHRAs starting in 2017, or for details about the relief from excise taxes for small employers before 2017, see the 21st Century Cures Act. The relevant provisions are found in Section 18001 beginning on page 306.

    Employers that are considering QSEHRAs are encouraged to work with legal counsel and tax advisors that offer expertise in this area. Starting in 2017, employer-funded QSEHRAs can offer valuable tax-free benefits to employees as long as they are designed and administered to meet all legal requirements.

     

    Originally published by ThinkHR – Read More

  • FAQs on Tobacco Cessation Coverage and Mental Health / Substance Use Disorder Parity | California Employee Benefits

    December 23, 2016

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    Recently, the Department of the Treasury, Department of Labor (DOL), and Department of Health and Human Services (HHS) (collectively, the Departments) issued FAQs About Affordable Care Act Implementation Part 34 and Mental Health and Substance Use Disorder Parity Implementation.

    The Departments’ FAQs cover two primary topics: tobacco cessation coverage and mental health / substance use disorder parity.

    Tobacco Cessation Coverage

    The Departments seek public comment by January 3, 2017, on tobacco cessation coverage. The Departments intend to clarify the items and services that must be provided without cost sharing to comply with the United States Preventive Services Task Force’s updated tobacco cessation interventions recommendation applicable to plan years or policy years beginning on or after September 22, 2016.

    Mental Health / Substance Use Disorder Parity

    Generally, the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) requires that the financial requirements and treatment limitations imposed on mental health and substance use disorder (MH/SUD) benefits cannot be more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits.

    A financial requirement (such as a copayment or coinsurance) or quantitative treatment limitation (such as a day or visit limit) is considered to apply to substantially all medical/surgical benefits in a classification if it applies to at least two-thirds of all medical/surgical benefits in the classification.

    If it does not apply to at least two-thirds of medical/surgical benefits, it cannot be applied to MH/SUD benefits in that classification.

    If it does apply to at least two-thirds of medical/surgical benefits, the level (such as 80 percent or 70 percent coinsurance) of the quantitative limit that may be applied to MH/SUD benefits in a classification may not be more restrictive than the predominant level that applies to medical/surgical benefits (defined as the level that applies to more than one-half of medical/surgical benefits subject to the limitation in the classification).

    In performing these calculations, the determination of the portion of medical/surgical benefits subject to the quantitative limit is based on the dollar amount of all plan payments for medical/surgical benefits in the classification expected to be paid under the plan for the plan year. The MHPAEA regulations provide that “any reasonable method” may be used to determine the dollar amount of all plan payments for the substantially all and predominant analyses.

    MHPAEA’s provisions and its regulations expressly provide that a plan or issuer must disclose the criteria for medical necessity determinations with respect to MH/SUD benefits to any current or potential participant, beneficiary, or contracting provider upon request and the reason for any denial of reimbursement or payment for services with respect to MH/SUD benefits to the participant or beneficiary.

    However, the Departments recognize that additional information regarding medical/surgical benefits is necessary to perform the required MHPAEA analyses. According to the FAQs, the Department have continued to receive questions regarding disclosures related to the processes, strategies, evidentiary standards, and other factors used to apply a nonquantitative treatment limitation (NQTL) with respect to medical/surgical benefits and MH/SUD benefits under a plan. Also, the Departments have received requests to explore ways to encourage uniformity among state reviews of issuers’ compliance with the NQTL standards, including the use of model forms to report NQTL information.

    To address these issues, the Departments seek public comment by January 3, 2017, on potential model forms that could be used by participants and their representatives to request information on various NQTLs. The Departments also seek public comment on the disclosure process for MH/SUD benefits and on steps that could improve state market conduct examinations or federal oversight of compliance by plans and issuers, or both.

     

    By Danielle Capilla, Originally published by United Benefit Advisors – Read More

  • Ask the Experts: Dealing With FSA Carryover Funds | California Benefit Advisors

    December 19, 2016

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    Question: If an employee has a small health flexible spending account (FSA) balance with a carryover to the next year, and the employee chooses not to participate in the new FSA year, can the employer force the employee to use those funds so as not to incur additional administrative fees in the next plan year?

    Answer: An employer can prevent “perpetual carryovers” by carefully drafting the cafeteria plan document with respect to carryover amounts. IRS guidance allows carryovers to be limited to individuals who have elected to participate in the health FSA in the next plan year. Health FSAs may also require that carryover amounts be forfeited if not used within a specified period of time, such as one year. Note that this plan design requires additional administration (to track the time limit for each carryover dollar, for instance) as well as ordering rules (e.g., will carryovers be used first?), so you will need to carefully review the cafeteria plan document. Under no circumstances are amounts returned to participants.

    According to IRS guidance, a health FSA may limit the availability of the carryover of unused amounts (subject to the $500 limit) to individuals who have elected to participate in the health FSA in the next year, even if the ability to participate in that next year requires a minimum salary reduction election to the health FSA for that next year. For example, an employer sponsors a cafeteria plan offering a health FSA that permits up to $500 of unused health FSA amounts to be carried over to the next year in compliance with Notice 2013-71, but only if the employee participates in the health FSA during that next year. To participate in the health FSA, an employee must contribute a minimum of $60 ($5 per calendar month). As of December 31, 2016, Employee A and Employee B each have $25 remaining in their health FSA. Employee A elects to participate in the health FSA for 2017, making a $600 salary reduction election. Employee B elects not to participate in the health FSA for 2017. Employee A has $25 carried over to the health FSA for 2017, resulting in $625 available in the health FSA. Employee B forfeits the $25 as of December 31, 2016 and has no funds available in the health FSA thereafter. This arrangement is a permissible health FSA carryover feature under Notice 2013171. The IRS also clarifies that a health FSA may limit the ability to carry over unused amounts to a maximum period (subject to the $500 limit). For example, a health FSA can limit the ability to carry over unused amounts to one year. Thus, if an individual carried over $30 and did not elect any additional amounts for the next year, the health FSA may require forfeiture of any amount remaining at the end of that next year.

    Originally published by ThinkHR – Read More

  • Employer Exchange Subsidy Notices: Should You Appeal? | California Employee Benefits

    December 16, 2016

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    Under the Patient Protection and Affordable Care Act (ACA), all public Exchanges are required to notify employers when an employee is receiving a subsidy (tax credits and cost-sharing reductions) for individual health insurance purchased through an Exchange. According to the final rules published in August 2013, employers have the right, but are not required, to engage in an appeal process through the IRS if they feel an employee should not be receiving a subsidy because the employer offers minimum value, affordable coverage.

    Some states began sending notices from public Exchanges indicating that one or more employees are currently receiving a subsidy in 2015, but the U.S. Department of Health and Human Services (HHS) announced that all federally-facilitated Exchanges will begin sending notices in 2016. Just because the employer receives a notice, it does not mean the employer will actually owe a penalty payment under Section 4980H.

    Dan Bond, Principal, Compliancedashboard, offers this important commentary: “I think it’s important for employers to remember that just because they may receive one of these notices from the IRS telling them that one of their employees is receiving a subsidy on the exchange, it does not necessarily mean the employer has exposure to a penalty. There are various reasons that someone might have received a subsidy so the employer can use this notice to determine exactly why and whether or not they have any exposure. In fact, small employers will also receive these notices and they are not even subject to the employer shared responsibility mandate so they will not be subject to penalties, regardless.”

    subsidy appeal chart

    Appeal Form and Process
    So long as the requirements in the final rules are met, each state Exchange is allowed to set up its own process and procedures. Information about how to file an appeal is usually included in the notice, but it may be necessary to check with the applicable Exchange to find out exactly how to handle the appeals process, the particulars of which are managed by each Exchange separately.

    The form currently used by federally-facilitated Exchanges, as well as by eight states, may be found on Healthcare.gov (approximately half of the states are currently using this form and process). The forms and processes for all other states may be found by visiting a state’s Exchange site. The process generally involves filing a paper appeal, providing documentation, and in some cases participating in a hearing.

    Conclusion
    The employer does not have to appeal to avoid a penalty under Section 4980H, and penalties will not apply until after the employer reporting (via Forms 1094-C and 1095-C) is reconciled. There is some speculation that it may be more beneficial to appeal with the Exchange rather than waiting to appeal later with the IRS. This is a fairly new process, so the best approach for employers may remain somewhat unclear until the first year of employer reporting is completed.

    Filing an appeal as soon as possible may help avoid hassles with the IRS and prevent the individual from receiving a subsidy for which they are ineligible. At the same time, although the appeals process does not appear to be a difficult one, it is possible that everything could be cleared up more quickly by simply communicating directly with the employee that they may be receiving the subsidy in error.

     

    By Vicki Randall, Originally published by United Benefit Advisors – Read More

  • The New HSA Under Trump’s Proposed Health Plan | California Benefit Advisors

    December 13, 2016

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    piggybankWith the election of a new President, health care plans and the fate of the Affordable Care Act are a hot topic of discussion. As part of his 7-tier health plan, President-Elect Donald Trump has proposed a shift in the way health savings accounts (HSAs) are offered to working Americans. Simply put, an HSA is a savings account for medical expenses. They are tax advantaged accounts an individual can open in addition to their current health plan to pay out-of-pocket expenses ranging from co-pays to surgery deductibles. Typically, HSAs have been offered to individuals with high deductible health plans (HDHPs). However, if the President-Elect’s new health plan strategy is enacted, an HDHP would no longer be an eligibility requirement, significantly impacting healthcare options for millions of Americans.

    HSA vs. FSA – Which one is right for you?

    When choosing a savings account for medical expenses there are two options: HSAs and FSAs. Each type of account is generally non-taxable for qualified medical expenses, except under certain circumstances in which a medical expense was incurred prior to opening an HSA, and each is accumulated by contributions from your paycheck. Some employers offer HSA and FSA matching contributions.

    In the past, there have been some prominent differences between health savings accounts and flexible spending accounts (FSAs). Traditionally, FSAs have been the option for those who choose health plans with low deductibles. The money you contribute from your paycheck into your FSA account must be spent within the year, and cannot be rolled over. Conversely, you must have an HDHP to open an HSA, and funds accumulated from paychecks can be rolled over into the next year if left unused.

    Accumulating tax advantages have made HSAs more popular and beneficial in comparison to FSAs. When it comes to changing jobs, HSAs typically are not affected, while FSAs are impacted due to restrictions in rollover of funds. However, FSAs do not have eligibility requirements, which have made them more widely available to individuals.

    What’s Next? How HSAs would change under Trump’s health plan

    Trump’s new health plan would make HSAs readily available to everyone by removing the HDHP eligibility requirements that are currently in place. In addition to this drastic barrier removal, Trump has said he will change policy to allow families to share the accounts between one another. Any contribution or interest-earned by an HSA is tax-deductible, and individuals with HSAs can withdrawal money tax-free for certain medical expenses ranging from transplants to acupuncture. The combination of these three tax-advantages creates an unmatched savings option for those who choose HSAs. While Trump has said he will change some factors of HSAs, he plans to keep these tax advantages.

    Who will benefit from the new HSA model?

    In the past, HSAs have been more attractive for retirees. Health care costs tend to rise in the retirement stage of life, which makes an HSA a more cost-efficient option for retirees. Since individuals are allowed to take out money for medical expenses without being taxed, retirees have the potential to save large amounts of money in the later stages of their life. However, under Trump’s proposed plan, HSAs will also become increasingly attractive for younger people. Because individuals will continue to be allowed to roll over money contributed to their HSA in a given year into the next, young and healthy people will be able to save sizable amounts for use later in life.

    While much remains to be seen about which aspects of President-Elect Trump’s health plan will be enacted when he takes office, take the time now to educate yourself on how an HSA can work for you.

     

    By Nicole Federico & Kate McGaughey, eTekhnos

  • IRS Delay in 6055 and 6056 Reporting for 2017 | California Employee Benefits

    December 8, 2016

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    1208Under 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. In order for the Internal Revenue Service (IRS) to verify that (1) individuals have the required minimum essential coverage, (2) individuals who request premium tax credits are entitled to them, and (3) ALEs are meeting their shared responsibility (play or pay) obligations, employers with 50 or more full-time or full-time equivalent employees and insurers will be required to report on the health coverage they offer. Final instructions for the 1094-B and 1095-B and the 1094-C and 1095-C forms were released in September 2016, as were the final forms for 1094-B, 1095-B, 1094-C, and 1095-C. The reporting requirements are in Sections 6055 and 6056 of the ACA.

    Reporting was first due in 2016, based on coverage in 2015. Reporting in 2017 will be based on coverage in 2016. All reporting will be for the calendar year, even for non-calendar year plans.

    On November 18, 2016, the IRS issued Notice 2016-70, delaying the reporting deadlines in 2017 for the 1095-B and 1095-C forms to individuals. There is no delay for the 1094-C and 1094-B forms, or for forms due to the IRS.

    Original Deadlines Delayed Deadlines
    DUE TO THE IRS
    The 1094-C, 1095-C, 1094-B, and 1085-B forms were originally due to the IRS by February 28, if filing on paper, or March 31, if filing electronically
    Deadline to the IRS for all forms remains the same.
    DUE TO EMPLOYEES
    The 1095-C form was due to employees by January 31 of the year following the year to which the Form 1095-C relates.
    DUE TO EMPLOYEES
    The 1095-C form is now due to employees by March 2, 2017.
    DUE TO INDIVIDUALS AND EMPLOYEES
    The 1095-B form was due to the individual identified as the “responsible individual” on the form by January 31.
    DUE TO INDIVIDUALS AND EMPLOYEES
    The 1095-B form is now due to the individual identified as the “responsible individual” on the form by March 2, 2017.

     

    For information on the extension process as well as the impact on individual taxpayers, view UBA’s ACA Advisor, “IRS Delay in 6055 and 6056 Reporting for 2017”.

     

    By Danielle Capilla, Originally published by United Benefit Advisors

  • California Dreamin – new laws affecting employer employee relationship

    December 6, 2016

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    arrowlogoAB 2337 – employers with 25 or more employees must provide written notice to employees of their rights to take protected time off for domestic violence, sexual assault or stalking.  This is an expansion of existing law, now requiring that notice be provided.  Conformity with the law is required once the Labor Commissioner develops the proper notice.

    New Workers Compensation rules – which will be issued as a package from the Division of Workers Compensation over the course of 2017.  Also, the WCIRB (Workers Compensation Rating Bureau) has recommended a 4.3% drop in 2017 premiums as part of pure premium.

    SB 1167 – OSHA must provide, by January 1, 2019, a heat illness and injury prevention standard applicable to workers working in indoor places of employment.

    SB 1234 – establishes the Secure Choice Retirement program for all covered private sector employees.  Mandates the creation of savings accounts for covered workers whose employers do not offer a retirement savings option to be automatically enrolled.  The program will be phased in over a 36 month period and overseen by a new Secure Choice Retiremetn Savings Investment Board:

    • Groups of 100 or more employees – must implement within first 12 months
    • Groups of 50-99 employees – must implement within 24 months
    • Groups of 5 to 49 employees – must implement within 36 months

    Employees do have the right to opt out of the program.  The Board to set the initial employee contribution between 2 and 5% of their gross wages and employers always retain the right to provide their own employer sponsored retirement plans in lieu of the new program.

  • The Shift Away from Health Risk Assessments | California Employee Benefits

    December 2, 2016

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    1129Historically, employers have utilized health risk assessments (HRAs) as one measurement tool in wellness program design. The main goals of an HRA are to assess individual health status and risk and provide feedback to participants on how to manage risk. Employers have traditionally relied on this type of assessment to evaluate the overall health risk of their population in order to develop appropriate wellness strategies.

    Recently, there has been a shift away from the use of HRAs. According to the 2016 UBA Health Plan Survey, there has been a 4 percent decline in the percentage of employer wellness programs using HRAs. In contrast, the percentage of wellness programs offering biometric screens or physical exams remains unchanged – 68 percent of plans where employers provide wellness offer a physical exam or biometric screening.

    One explanation for this shift away from HRAs is an increased focus on helping employees improve or maintain their health status through outcome-based wellness programs, which often require quantifiable and objective data. The main issue with an HRA is that it relies on self-reported data, which may not give an accurate picture of individual or population health due to the fact that people tend to be more optimistic or biased when thinking about their own health risk. A biometric screening or physical exam, on the other hand, allows for the collection of real-time, objective data at both the individual and population level.

    Including a biometric screening or physical exam as part of a comprehensive wellness program can be beneficial for both the employer and employees. Through a biometric screening or physical exam, key health indicators related to chronic disease can be measured and tracked over time, including blood pressure, cholesterol levels, blood sugar, hemoglobin, or body mass index (BMI). For employees, this type of data can provide real insight into current or potential health risks and provide motivation to engage in programs or resources available through the wellness program. Beyond that, aggregate data collected from these types of screenings can help employers make informed decisions about the type of wellness programs that will provide the greatest value to their company, both from a population health and financial perspective.

    One success story of including a physical exam as part of a wellness program comes from one of our small manufacturing clients. From the initial population health report, the company learned that there was a large percentage of its population with little to no health data, resulting in the inability to assign a risk score to those individuals. It is important to note that when a population is not utilizing health care, it can result in late-stage diagnoses, resulting in greater costs and a burden for both the employee and employer. In addition, there was low physical compliance and a high percentage of adults with no primary care provider. In order to capture more information on its population and better understand the current health risks, the company shifted its wellness plan to include annual physicals as a method for collecting biometric data for the 2016 benefit year. Employees and spouses covered on the plan were required to complete an annual physical and submit biometric data in order to earn additional incentive dollars.

    By including annual physicals in its wellness program, positive results were seen for employees and spouses and the company was able to make an informed decision about next steps for its wellness program. After the first physical collection period, the percentage of individuals with little to no information was reduced from 31 percent to 16 percent (Figure A). Annual physical compliance increased from 36 percent in 2015 to over 80 percent in 2016 (Figure B), which means more individuals were seeing a primary care provider. As a result of increased biometric data collection and one year of Vital Incite reporting, the company was able to determine next steps, which included addressing chronic condition management, specifically hypertension and diabetes, with health coaching or a disease management nurse.

    Figure A – RUB Distribution 2014 – 2016

    RUB Distribution 2014-2016

    Figure B – Preventive Screening Compliance

    Preventive Screening Compliance

    Employers that are still interested in collecting additional information from employees may consider including alternatives to the HRA, such as culture or satisfaction surveys. These tools can allow employers the opportunity to evaluate program engagement and further understand the needs and wants of their employee population.

     

    Originally published by United Benefit Advisors – Read More

  • BREAKING NEWS: Texas Court Issues Injunction Blocking New December 1st Overtime Regulations | California Benefit Advisors

    November 29, 2016

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    Ten o'clock on the white wall clocksOn November 22, 2016, a federal district court in Texas granted a preliminary injunction that temporarily blocks the U.S. Department of Labor (DOL) from implementing and enforcing its recently revised regulations on the white collar exemptions to the Fair Labor Standards Act (FLSA). The regulations, which were released in May and scheduled to go into effect on December 1, would more than double the minimum salary requirement certain executive, administrative, and professional employees must receive in order to be exempt from overtime.

    Employers should note that this is only a temporary injunction, not a permanent one. The injunction applies nationwide and simply prevents the regulations from going into effect on December 1. There will be a decision issued at a later date on the actual merits of the case, so changes in the FLSA salary threshold for exemption may be back.

    Impact for Employers

    For many employers, this is good news for the time being. As a result, employers that have not made the necessary changes to their compensation plans have more time to plan for the changes in the event the regulations are upheld. Employers that have already made changes to their compensation plans will need to determine if they want to continue with the changes, suspend the changes, or roll back those changes pending any legal developments. These decisions should be made in accordance with any applicable state or local laws. Employers should consult their attorneys to determine what course of action is best for them.

     

    Originally published by ThinkHR – Read More

  • Why Technology Plays an Important Role as Workplace Demographics Shift | California Benefit Advisors

    November 25, 2016

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    resized-millennial-techAs an increasing number of Baby Boomers retire and leave the workforce, millennials are positioned to take on more leadership roles in the business world. Millennials bring with them a unique and evolving knowledge of technology and innovative HR practices that differ greatly from their Baby Boomer predecessors. As managerial roles are transferred from the Baby Boomer generation to millennials, forward-thinking businesses will create plans that adapt to the innovative processes and practices millennials bring to the table. Worthwhile risks and changes must be made to ensure companies keep up with their rapidly evolving competitors. To successfully transition millennials into top management positions, here are a few factors companies should keep in mind.

    Millennials are technology-driven.

    75% of millennials believe that technology helps them operate more efficiently in the workplace. Millennials are the first generation to truly incorporate technology as an imperative tool for maximum efficiency. Millennials look for efficiency, digital communication, and mobility founded in technology in the workplace, and use of technology helps facilitate innovation, engagement and clarity.  Baby Boomers in management who are getting ready to hand over the reins to their younger counterparts can facilitate a smooth operational transition by embracing new systems and processes led by technology.

    Efficiency is key.

    Millennials have grown up in a fast-paced culture where new technologies are constantly being developed, and because of this they find it natural to lean on technology to efficiently tackle daily work tasks. As opposed to previous generations, millennials are used to instant gratification and desire work to be completed in the most practical and timely manner. One example of state-of-the-art technology is automated task management systems which allow you to complete work ahead of time. For example, social media scheduling platforms like Hootsuite allow you to schedule posts ahead of time and select when you want them to post automatically. The automation process creates a more efficient way to complete time-consuming, yet simple tasks.  Another task management tool is Asana. Asana provides a single outlet for companies to manage projects, assign tasks and track progress, all through one system. Asana ensures a safe and organized portal for your company to complete tasks in the most practical manner.  Invest time in researching technological tools your millennial employees find helpful in their day-to-day work, and start implementing them now.

    Digital communication is here to stay. 

    Communication is vital to facilitating an engaged company culture. Being able to communicate well with not only clients, but with employees, is crucial. Millennials have grown up utilizing technology as a main form of communication, and they have mastered the art of making it work for them in the office as well. The mass amount of information that must be learned when implementing a new technology company-wide can be overwhelming, and keeping track of relevant news within your company can be difficult. To create an organized and effective internal communication strategy many companies are turning to social intranet software. This type of software creates a portal that keeps all of the company’s internal information in one place making mass communications easier to streamline. Digital communication fosters more efficient and timely transfer of information and problem solving. The impact of incorporating digital technology reaches beyond the office and can even help you prepare your employees to be social media advocates for your brand in their off time.

    Mobility is the new norm. 

    One of the most attractive assets of technology is mobility. Technology has completely disrupted the workplace by allowing employees to work anywhere at any time. Employees no longer have to complete their typical workday in the office. Working from home or remote locations provides room for great work/life balance and creative inspiration. A prime example of an effective technology when it comes to remote work and flexible hours is video conferencing through apps like Skype or FaceTime. By incorporating video conferencing, companies can easily expand their client base country wide and even internationally, at a much more cost effective price.

    As millennials continue to take over the workforce and we see more innovations and improvements made to current technology, be sure your company stays up to date on the latest trends. Ensuring your employees are engaged with and fluent in technologies that are being globally implemented is vital to your company’s success in this digital age.

     

    By Nicole Federico

  • Who decides on discrimination? The government believes it has discriminating tastes

    November 22, 2016

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    arrowlogoIn 2017 the federal government will begin collecting pay data for all employers with 100 or more employees to help identify and address pay inequities – as part of the annual EEO-1 process.
    We know the goal, but what are the potential consequences?

  • 2016 Election Results: The Potential Impact on Health and Welfare Benefits | California Employee Benefits

    November 18, 2016

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    1114Following the November 2016 election, Donald Trump (R) will be sworn in as the next President of the United States on January 20, 2017. The Republicans will also have the majority in the Senate (51 Republican, 47 Democrat) and in the House of Representatives (238 Republicans, 191 Democrat). As a result, the political atmosphere is favorable for the Trump Administration to begin implementing its healthcare policy objectives. Representative Paul Ryan (R-Wis.) will likely remain the Speaker of the House. Known as an individual who is experienced in policy, it is expected that the Republican House will work to pass legislation that follows the health care policies in Speaker Ryan’s “A Better Way” proposals. The success of any of these proposals remains to be seen.

    Employers should be aware of the main tenets of President-elect Trump’s proposals, as well as the policies outlined in Speaker Ryan’s white paper. These proposals are likely to have an impact on employer sponsored health and welfare benefits. Repeal of the Patient Protection and Affordable Care Act (ACA) and capping the employer-sponsored insurance (ESI) exclusion for individuals would have a significant effect on employer sponsored group health plans.

    Trump Policy Proposals

    President-elect Trump’s policy initiatives have seven main components:

    • Repeal the ACA. President-elect Trump has vowed to completely repeal the ACA as his first order of Presidential business.
    • Allow health insurance to be purchased across state lines.
    • Allow individuals to fully deduct health insurance premium payments from their tax returns.
    • Allow individuals to use health savings accounts (HSAs) in a more robust way than regulation currently allows. President-elect Trump’s proposal specifically mentions allowing HSAs to be part of an individual’s estate and allowing HSA funds to be spent by any member of the account owner’s family.
    • Require price transparency from all healthcare providers.
    • Block-grant Medicaid to the states. This would remove federal provisions on how Medicaid dollars can and should be spent by the states.
    • Remove barriers to entry into the free market for the pharmaceutical industry. This includes allowing American consumers access to imported drugs.

    President-elect Trump’s proposal also notes that his immigration reform proposals would assist in lowering healthcare costs, due to the current amount of spending on healthcare for illegal immigrants. His proposal also states that the mental health programs and institutions in the United States are in need of reform, and that by providing more jobs to Americans we will reduce the reliance of Medicaid and the Children’s Health Insurance Program (CHIP).

    Speaker Ryan’s “A Better Way” Proposal

    In June 2016, Speaker Ryan released a series of white papers on national issues under the banner “A Better Way.” With Republican control of the House and Senate, it would be plausible that elected officials will begin working to implement some, if not all, of the ideas proposed. The core tenants of Speaker Ryan’s proposal are:

    • Repeal the ACA in full.
    • Expand consumer choice through consumer-directed health care. Speaker Ryan’s proposal includes specific means for this expansion, namely by allowing spouses to make catch-up contributions to HSA accounts, allow qualified medical expenses incurred up to 60 days prior to the HSA-qualified coverage began to be reimbursed, set the maximum contribution of HSA accounts at the maximum combined and allowed annual high deductible health plan (HDHP) deductible and out-of-pocket expenses limits, and expand HSA access for groups such as those with TRICARE coverage. The proposal also recommends allowing individuals to use employer provided health reimbursement account (HRA) funds to purchase individual coverage.
    • Support portable coverage. Speaker Ryan supports access to financial support for an insurance plan chosen by an individual through an advanceable, refundable tax credit for individuals and families, available at the beginning of every month and adjusted for age. The credit would be available to those without job-based coverage, Medicare, or Medicaid. It would be large enough to purchase a pre-ACA insurance policy. If the individual selected a plan that cost less than the financial support, the difference would be deposited into an “HSA-like” account and used toward other health care expenses.
    • Cap the employer-sponsored insurance (ESI) exclusion for individuals. Speaker Ryan’s proposal argues that the ESI exclusion raises premiums for employer-based coverage by 10 to 15 percent and holds down wages as workers substitute tax-free benefits for taxable income. Employee contributions to HSAs would not count toward the cost of coverage on the ESI cap.
    • Allow health insurance to be purchased across state lines.
    • Allow small businesses to band together an offer “association health plans” or AHPs. This would allow alumni organizations, trade associations, and other groups to pool together and improve bargaining power.
    • Preserve employer wellness programs. Speaker Ryan’s proposal would limit the Equal Employment Opportunity Commission (EEOC) oversight over wellness programs by finding that voluntary wellness programs do not violate the Americans with Disabilities Act of 1990 (ADA) and the collection of information would not violate the Genetic Information Nondiscrimination Act of 2008 (GINA).
    • Ensure self-insured employer sponsored group health coverage has robust access to stop-loss coverage by ensuring stop-loss coverage is not classified as group health insurance. This provision would also remove the ACA’s Cadillac tax.
    • Enact medical liability reform by implementing caps on non-economic damages in medical malpractice lawsuits and limiting contingency fees charged by plaintiff’s attorneys.
    • Address competition in insurance markets by charging the Government Accountability Office (GAO) to study the advantages and disadvantages of removing the limited McCarran-Ferguson antitrust exemption for health insurance carriers to increase competition and lower prices. The exemption allows insurers to pool historic loss information so they can project future losses and jointly develop policy.
    • Provide for patient protections by continuing pre-existing condition protections, allow dependents to stay on their parents’ plans until age 26, continue the prohibitions on rescissions of coverage, allow cost limitations on older Americans’ plans to be based on a five to one ratio (currently the ratio is three to one under the ACA), provide for state innovation grants, and dedicate funding to high risk pools.

    Speaker Ryan’s white paper also addresses more robust protection of life by enforcing the Hyde Amendment (which prohibits federal taxpayer dollars from being used to pay for abortion or abortion coverage) and improved conscience protections for health care providers by enacting and expanding the Weldon Amendment.

    Speaker Ryan also proposes other initiatives including robust Medicaid reforms, strengthening Medicare Advantage, repealing the Independent Payment Advisory Board (IPAB) that was once referred to as “death panels,” combine Medicare Part A and Part B, repealing the ban on physician-owned hospitals, and repealing the “Bay State Boondoggle.”

    Process of Repeal

    Generally speaking, the process of repealing a law is the same as creating a law. A repeal can be a simple repeal, or legislators can try to pass legislation to repeal and replace. Bills can begin in the House of Representatives, and if passed by the House, they are referred to the Senate. If it passes the Senate, it is sent to the President for signature or veto. Bills that begin in the Senate and pass the Senate are sent to the House of Representatives, which can pass (and if they wish, amend) the bill. If the Senate agrees with the bill as it is received from the House, or after conference with the House regarding amendments, they enroll the bill and it is sent to the White House for signature or veto.

    Although Republicans hold the majority in the Senate, they do not have enough party votes to allow them to overcome a potential filibuster. A filibuster is when debate over a proposed piece of legislation is extended, allowing a delay or completely preventing the legislation from coming to a vote. Filibusters can continue until “three-fifths of the Senators duly chosen and sworn” close the debate by invoking cloture, or a parliamentary procedure that brings a debate to an end. Three-fifths of the Senate is 60 votes.

    There is potential to dismantle the ACA by using a budget tool known as reconciliation, which cannot be filibustered. If Congress can draft a reconciliation bill that meets the complex requirements of our budget rules, it would only need a simple majority of the Senate (51 votes) to pass.

    Neither President-elect Trump nor Speaker Ryan has given any indication as to whether a full repeal, or a repeal and replace, would be their preferred method of action.

    The viability of any of these initiatives remains to be seen, but with a Republican President and a Republican-controlled House and Senate, if lawmakers are able to reach agreeable terms across the executive and legislative branches, some level of change is to be expected.

     

    Originally published by United Benefit Advisors – Read More

  • What Employers Can Expect from the Trump Administration | California Benefit Advisors

    November 15, 2016

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    1110

    The U.S. Presidential race win by Donald Trump will impact labor, employment, and HR professionals in the key issues of immigration, paid leave, tax reform, and health care.

    Significant Shift in Immigration Policy

    Trump has been vocal about his stance on immigration in regard to deportation and illegal immigration. He also seeks to strengthen U.S. jobs, wages, and security through the nationwide use of E-Verify. Trump plans to work with Congress to strengthen and expand the use of E-Verify as currently less than half the states require employers to use E-Verify; however, more than 16.4 million cases were run through E-Verify in fiscal year 2016 by employers in every industry, state, and U.S. territory. E-Verify ensures a legal workforce, protects jobs for authorized workers, deters document and identity fraud, and works seamlessly with Form I-9. Employers may also look to the changes in the Form I-9 effective January 21, 2017 designed to make the form more user-friendly and alleviate mistakes, although this was established prior to Trump’s presidency.

    Paid Leave for New Mothers

    Although the specifics are unclear right now, Trump has proposed six weeks of paid maternity leave to new mothers. These payments would come from recapturing fraud and improper payments in the U.S. unemployment insurance system. Trump has also discussed allowing parents to enroll in tax-free dependent care savings accounts for their children (read in-depth analysis of paid family leave from our own in-house expert Laura Kerekes). According to the National Partnership for Women and Families, employers can expect paid leave to improve worker retention, reduce turnover costs with increased worker productivity, and increase employee loyalty.

    Tax Reform

    Trump has advocated for significant tax cuts “across the board” by increasing the standard deduction to $30,000 for joint filers (from $12,600), and simplifying the tax code. Trump plans to collapse the seven tax brackets to three with low-income Americans at an income tax rate of 0 percent. Trump’s tax plan also seeks to lower the business tax rate from 35 percent to 15 percent, and eliminate the corporate alternative minimum tax. Proponents of lowering business taxes assert that it creates jobs in the United States rather than overseas, encourages investment in our infrastructure, and because the United States has the highest corporate income tax rates, businesses are at a significant disadvantage. Trump intends to apply this lower rate to all business, both small and large. Additionally, according to Trump’s tax plan, businesses that pay a portion of an employee’s childcare expenses would be permitted to exclude those contributions from income. Employees who are recipients of direct employer subsidies would not be able to exclude those costs from the individual income tax and the costs of direct subsidies to employees could not be used as a cost eligible for the credit.

    Repeal of the Affordable Care Act

    The Affordable Care Act will be challenged under Trump’s administration. Trump seeks to remove healthcare exchanges and replace them with tax-free health savings accounts for people with high-deductible insurance plans. Trump has also advocated state-based high-risk pools for people with medical conditions that make it hard to get coverage on their own. He also seeks to allow companies to sell insurance across state lines to boost competition and drive down prices.

    What’s Next for Employers

    Interestingly, the largest impact of a Trump presidency may not be from his stance on these issues but may be seen when it comes time to naming the next U.S. Supreme Court Justices as he will likely appoint four justices during his term in office. Experts predict four because the average age of retirement for a Supreme Court justice has been approximately 78.7 years old, and currently three of the eight justices range in age from 78 – 83. The fourth open seat remains unoccupied since Justice Antonin Scalia’s death in February.

    Understandably, there are opposing views to these presented issues, and neither candidate provided many details about how their plans for these issues would be financed or implemented. ThinkHR will follow the changes in labor and employment laws and will provide information and tools to help employers make sense of the changes that impact American businesses.

     

    Originally published by ThinkHR – Read More

  • Employer FYI: Individual Mandate Requirements and Proposed Regulations | California Benefits Broker

    November 11, 2016

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    1109Though employers are not required to educate employees about their individual responsibilities under the Patient Protection and Affordable Care Act (ACA), it is helpful to know about the individual mandate.

    The individual responsibility requirement (also known as the individual mandate) became effective for most people as of January 1, 2014. Under the individual mandate, most people residing in the U.S. are required to have minimum essential coverage or they must pay a penalty. Many individuals will be eligible for financial assistance through premium tax credits (also known as premium subsidies) to help them purchase coverage if they buy coverage through the health insurance Marketplace (also known as the Exchange).

    For 2014, the penalty for an adult was the greater of $95 or 1 percent of household income above the tax filing threshold. For 2015, the penalty was the greater of $325 or 2 percent of income above the tax filing threshold. For 2016, the penalty is the greater of $695 or 2.5 percent of income above the tax filing threshold.

    The penalty for a child under age 18 is 50 percent of the adult penalty. The maximum penalty per family is three times the individual penalty. The penalty is calculated and paid as part of the employee’s federal income tax filing.

    A person must have “minimum essential coverage” to avoid a penalty. Minimum essential coverage is basic medical coverage and may be provided through an employer, Medicare, Medicaid, CHIP, TRICARE, some VA programs, or an individual policy (through or outside the Marketplace). Acceptable employer coverage includes both insured and self-funded PPO, HMO, HDHP and fee-for-service plans, as well as grandfathered coverage, COBRA, retiree medical, and health reimbursement arrangements (HRAs). It does not matter whether the coverage is provided directly by the employer or through another party, such as a multiemployer plan, a collectively bargained plan, a PEO, or a staffing agency.

    While most people must obtain coverage or pay penalties, individuals will not be penalized if they do not obtain coverage and:

    • They do not have access to affordable coverage (cost exceeds 8 percent of modified adjusted gross household income)
    • Their household income is below the tax filing threshold
    • They meet hardship criteria (such as recent bankruptcy, homelessness, unreimbursed expenses from natural disasters)
    • Their period without coverage is less than three consecutive months
    • They live outside the U.S. long enough to qualify for the foreign earned income exclusion
    • They reside in a U.S. territory for at least 183 days during the year
    • They are a member of a Native American Tribe
    • They belong to a religious group that objects to having insurance, including Medicare and Social Security, on religious grounds (for example, the Amish)
    • They belong to a health sharing ministry that has been in existence since 1999
    • They are incarcerated (unless awaiting trial or sentencing)
    • They are illegal aliens

    If the person has access to employer-provided coverage as either the employee or an eligible dependent, affordability of the employer-provided coverage is the only factor considered for purposes of the individual mandate.

    • For the employee, coverage is unaffordable (so no penalty applies for failure to have coverage) if the cost of single coverage is more than 8 percent of household income.
    • For a dependent, coverage is unaffordable (so no penalty applies for failure to have coverage) if the cost of the least expensive employer-provided dependent coverage is more than 8 percent of household income.
    • If the employee and spouse both have access to coverage through their own employer, the cost for each person’s coverage is based on the cost of their own single coverage, but the totals are then combined to see if the total cost exceeds 8 percent of household income.

     

    Originally published United Benefit Advisors – Read More

  • What implication will state changes have? The Supreme Court allows Michigan to proceed

    November 9, 2016

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    arrowThe state of Michigan levies a tax on health claims made under self funded plans – 1% flat to those rendered in state to in state residents, along with recordkeeping and reporting obligations.  The Supreme Court has vacated its earlier ruling and the Sixth Circuit has concluded that ERISA does not preempt the tax.  Will other states follow?  A great way to make money but not so great for self funded plans trying to save it.

  • IRS Announces 2017 Retirement Plan Contribution Limits | California Benefit Advisors

    November 4, 2016

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    US Currency: Wads of US bills fastened with rubber bands, close-upOn October 27, 2016, the Internal Revenue Service (IRS) released Notice 2016-62 announcing cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2017. Many pension plan limitations will not change in 2017 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment. Some items, though, will see minor increases. The following is a summary of the limits for 2017.

    For 401(k), 403(b), and most 457 plans and the federal government’s Thrift Savings Plans:

    • The elective deferral (contribution) limit remains unchanged at $18,000 for 2017.
    • The catch-up contribution limit for employees aged 50 and over who participate in these plans remains at $6,000 for 2017.

    For individual retirement arrangements (IRAs):

    • The limit on annual contributions remains unchanged at $5,500 for 2017.
    • The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000 for 2017.

    For simplified employee pension (SEP) IRAs and individual/solo 401(k) plans:

    • Elective deferrals increase to $54,000 for 2017, based on an annual compensation limit of $270,000 (up from the 2016 amounts of $53,000 and $265,000).
    • The minimum compensation that may be required for participation in a SEP remains unchanged at $600 for 2017.

    For savings incentive match plan for employees (SIMPLE) IRAs:

    • The contribution limit on SIMPLE IRA retirement accounts remains unchanged at $12,500 for 2017.
    • The SIMPLE catch-up limit remains unchanged at $3,000 for 2017.

    For defined benefit plans:

    • The basic limitation on the annual benefits under a defined benefit plan is increased to $215,000 for 2017 (from $210,000 for 2016).

    Other changes:

    • Highly compensated and key employee thresholds:
      • The threshold for determining “highly compensated employees” remains unchanged at $120,000 for 2017.
      • The threshold for officers who are “key employees” in a top-heavy plan increases to $175,000 for 2017 (from $170,000 for 2016).
    • Social Security cost of living adjustment: In a separate announcement, the Social Security Administration stated that the taxable wage base will increase to $127,200 for 2017, an increase of $8,700 from the 2016 taxable wage base of $118,500. Thus, the maximum Social Security tax liability will increase for both employees and employers.

     

    Originally published by ThinkHR – Read More

  • 2016 Health Plan Survey: Topline Trends at a Glance | California Benefit Advisors

    November 2, 2016

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    1102The 2016 UBA Health Plan Survey contains the validated responses of 19,557 health plans and 11,524 employers, who cumulatively employ over two and a half million employees and insure more than five million total lives. Our data reflects the experiences of 99% of U.S. businesses in rough proportion to their actual prevalence, not just the largest employers who are often the sole focus in other surveys. As a result, our findings are extensive, so we’ve compiled a topline list of the biggest trends below.

    Cost-shifting, plan changes and other protections work to hold rates steady.

    • Increased prevalence and enrollment in lower-cost CDHP and HMO plans.
    • “Grandmothered” employers continue to have the options they need to select cheaper plans (ACA- compliant community-rated plans versus pre-ACA composite/health-rated plans) depending on the health status of their groups.
    • The Protecting Affordable Coverage for Employees (PACE) Act protects employers with 51 to 99 employees from higher-cost plans.
    • Increased out-of-network deductibles and out-of-pocket maximums, as well as prescription drug cost shifting, are among the plan design changes influencing premiums.
    • UBA Partners leverage their bargaining power.

    Overall costs vary significantly by industry and geography.

    • Retail, construction and hospitality employees cost the least to cover; government employees (the historical cost leader) cost the most.
    • Plans in the Northeast cost the most; plans in the Central U.S. cost the least.
    • Retail and construction employees pay the most toward their coverage; government employees pay the least (bad news for taxpayers).

    Plan design changes strain employees financially.

    PPOs, CDHPs have the biggest impact.

    • Preferred provider organization (PPO) plans cost more than average, but still dominate the market.
    • Consumer-directed health plans (CDHPs) cost less than average and enrollment is increasing.

    Overall, wellness program adoption holds steady, but program design is changing.

    • Health risk assessments continue to decline, while chronic condition coaching is on the rise.

    Metal levels drive plan decisions.

    • Most plans are at the gold or platinum metal level. In the future, we expect this to change since it will be more difficult to meet the ACA metal level requirements and still keep rates in check.

    Key trends to watch in 2017:

    • Slow, but steady: increase in self-funding for all group sizes, decrease in employees electing dependent coverage, increase in plan options, and mail order pharmaceutical programs more for convenience than cost savings.
    • Cautious trend: increased CDHP prevalence/enrollment.
    • Rapidly emerging: increase of five-tier prescription drug plans, increased out-of-pocket maximums.

     

    Originally published by United Benefit Advisors – Read More

  • As goes San Francisco, and Oakland, and…now goes Berkeley with Paid Sick Leave Law

    November 1, 2016

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    arrowBerkeley has officially amended its minimum wage law and codified a new law concerning hospitality service charges along with a Paid Sick Leave law that takes effect October 1, 2017.

    1)    All employers with a Berkeley business license are subject to the law
    2)    Different standards will apply to a small business with fewer than 25 employees
    3)    Applies to all employees who work at least 2 hours a week within Berkeley city limits
    4)    Collective Bargaining Agreements may supersede the sick pay rule
    5)    If employer already has a similar law including accrual they are not subject to new law
    6)    Covered employees can use accrued leave 90 days after employment begins
    7)    Each qualifying employee is entitled to one sick leave hour for every 30 hours worked
    8)    Employees are allowed to accumulate 72 hours a year – small businesses only 48
    9)    Allowed for physical or mental illness or injury, obtaining diagnosis or treatment, getting a physical exam, or to care for a sick family member

    Employers must conspicuously post at any workplace or job site a city created notice informing employees of their paid sick leave rights.  Employers must keep employee payroll records for a period of four years that identify hours worked, wages paid and paid sick leave accrued.

    This law may be changed when Berkeley voters go to the polls, but…

  • 3 Life Insurance Myths That Could Hurt Young Families | California Benefit Advisors

    October 28, 2016

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    Portrait Of Family Group Tailgating In Stadium Car ParkWhen you’re just starting out, it often seems that a dollar never stretches far enough. And with new commitments, such as buying your first home or having children, comes the responsibility to make sure your loved ones will be provided for financially, no matter what life may bring.

    If you were to die unexpectedly, life insurance is there to make sure your loved ones can maintain their standard of living, stay in your home, send your kids to the same schools and keep their plans for the future on track. It also gives the grieving spouse or partner time to make decisions, or in some cases find work outside the home, without worrying about finances.

    But common misconceptions often prevent young families from purchasing the life insurance they need.

    Myth 1: I only need life insurance if I’m the primary breadwinner in my family. Whether you bring home the largest paycheck in your household or a smaller one, your family relies on your income to maintain its quality of life, and it would be missed if something were to happen to you. Even if you don’t work outside of the home, having life insurance is a smart choice. Stay-at-home parents perform valuable services such as childcare, cooking, housecleaning and household management, which can be costly to replace for a surviving spouse or partner.

    Stay-at-home parents perform valuable services such as childcare, cooking, housecleaning and household management, which can be costly to replace for a surviving spouse or partner.

    Myth 2: If I buy a term life insurance policy and find that I still need protection when the term ends, I can always renew the policy. Term policies are quite popular with many young families, and for good reason: They typically offer the greatest coverage for the lowest cost. Term insurance provides protection for a specific period of time (the “term”), and can be ideal for people who feel they have financial needs to cover that will disappear over time, such as a mortgage or a child’s education.

    However, many families realize that even after the kids are grown and the mortgage is paid off, their need for insurance continues—to provide income for a surviving spouse, eliminate debts, pay taxes, etc. Because life insurance premiums increase with age, renewing your policy when the term expires can be very expensive. Moreover, poor health may make renewal impossible.

    Myth 3: I only need term life insurance. Term life insurance makes sense for many young families because their need for coverage is great and their budgets are often limited. But that doesn’t mean it’s the only type of insurance you should consider.

    Permanent life insurance policies provide a death benefit as well as other unique features such as lifelong protection and the ability to accumulate cash values on a tax-deferred basis, similar to assets in most retirement-savings plans. You can access the cash values for important uses like a child’s education or a business opportunity. (Keep in mind, however, that withdrawing or borrowing funds from your policy will reduce its cash value and death benefit if not repaid.)

    If these features appeal to you, it might make sense to buy a large face amount term policy, giving you the death benefit protection you need, and combine it with a smaller permanent policy. When your budget permits, you can gradually increase your permanent insurance coverage.

     

    Originally published by LifeHappens – Read More

  • What to Expect in 2016 – Clarifying Some of the Confusion of the ACA | California Benefit Advisors

    October 27, 2016

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    1025One thing rings true when it comes to the Affordable Care Act (ACA): “expect the unexpected.” I know this sounds cliché, but it was my best attempt to describe the experience HR professionals encounter as they attempt to comply with this somewhat murky piece of legislation. Last year on December 28, we were alerted a month from the approaching deadline that the forms and filing requirements had moved two and three months out to address challenges. This was a fairly drastic move within a month of a significant compliance deadline.

    As a leading provider of ACA solutions to hundreds of employers, we are finding this concern about uncertainty spills into the 2016 tax season. To provide some useful guidance, I thought it would be helpful to share with you a roll-up of common questions and key issues we are receiving from our clients over the past several months:

    1. Will the ACA be delayed again in 2016? We do not see the filing requirements delayed again in 2016. The delay for 2015 was a one-time delay, and the IRS has signaled this to be the case on their conference calls.
    2. What changes do we need to be concerned with in the 1094-C and 1095-C forms? Overall, the changes to these forms are minor in 2016. The 2015 Qualifying Offer, a form of transition relief, was eliminated from the 1094 form. The biggest changes are with two contingent offer of coverage codes 1J and 1K. The idea behind these new offer codes is that employer coverage is contingent upon not having coverage available elsewhere. If this better describes how you offer coverage, you may want to consider selecting these codes over the traditional 1A or 1E.
    3. Will it be easier to work with name/TIN mismatches flagged through the corrections process? In the first year it was difficult to work with IRS requested corrections because you often could not identify which covered individual generated the error (we didn’t know if it was the employee, a dependent, or both). Several IRS conference calls have signaled they will be providing more detail on the corrections this year. If your ACA solution communicates with the IRS Affordable Care Act Information Returns (AIR) system, you will likely be able to display the detail of this error message and act on it. A side-note: remaining corrections from 2015 do not have a specific due date, but should be addressed as soon as possible.
    4. Why do we still have transition relief in 2016? The expectations for many is that transition relief was simply a 2015 phenomenon. While non-calendar year and 2015 Qualifying Offer Transition Relief have been eliminated, 4980H Transition Relief has remained into 2016 for “non-calendar” plans that meet certain criteria. This means that employers who might be facing shared responsibility penalties in 2016 can still take advantage of one of the two types of relief: 1) if you average 50 to 99 FTEs you are shielded for the 2015 non-calendar year plan for the months that spill into 2016 (e.g., a July 1 plan will be shielded for the first six months of 2016), or 2) the same applies for 100+ clients in terms of being able to leverage the 70 percent offer requirement.
    5. Will it be easier this year? This is a general question that depends on the solution you use. Overall, we believe the answer is a resounding “YES!” With our solution, a large number of clients are able to take advantage of an automated renewal process that transitions setup from 2015 and trends existing employees from December 31, 2015, into 2016. Vendors have learned how to make this process easier for their customers after all the pain they experienced in 2015. Everything from data collection, filing and corrections process should be more automated this year.

     

    Originally published by United Benefit Advisors – Read More

  • How do we cut back on the increases? Reduce the size of provider networks

    October 25, 2016

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    arrowThe ACOs offered under the ACA were supposed to do this, and some have.  We also saw carriers forced to reduce the network sizes in response to the Exchanges implementing formal guidelines on rates and rate increases.  Now the carriers are thinking about doing this as a general practice…which is funny, because that is what they were supposed to be doing when they started HMO and PPO plans years ago.  By making the lists more “exclusive” they could extract greater discounts.  Then the lists expanded and costs continued to climb.  So now we go back to the beginning and see what happens…and what complaints will follow.  The difference these days is that the discount comes with reduced availability as practices begin to fill.  Then what?

  • Extension for Enforcement of OSHA Anti-Retaliation Provisions | California Employee Benefits

    October 20, 2016

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    1020On October 18, 2016, in response to a request from a federal judge presiding over a legal challenge, the Occupational Safety and Health Administration (OSHA) agreed to extend the effective date of the anti-retaliation provisions in its new final rule, Improve Tracking of Workplace Injuries and Illnesses, to December 1, 2016. Federal Judge Sam Lindsay of the Northern District of Texas is considering a complaint and motion for preliminary injunction filed by several industry groups challenging the anti-retaliation provisions of the new rule to the extent that OSHA seeks to limit routine post-accident drug testing and incident-based safety incentive and recognition plans. The case seeks to permanently delay the effective date of the rule until a decision is reached.

    In its final rule, OSHA not only revised recordkeeping requirements but included anti-retaliation provisions intended to prevent employers from retaliating against employees for reporting work-related injuries or illness. According to OSHA, the final rule would require employers to inform employees of their right to report work-related injuries and illnesses free from retaliation; would clarify the requirement that an employer’s procedure for reporting work-related injuries and illnesses must be reasonable and not deter or discourage employees from reporting; and would incorporate the existing statutory prohibition on retaliating against employees for reporting work-related injuries or illnesses.

    Of note, this is the second delay in enforcement as the OSHA provisions were originally scheduled to go into effect on August 10, 2016, then delayed to November 1, 2016, and now employers have until December 1, 2016 to comply.

     

    Originally published by ThinkHR – Read More

  • HSA limits change again in 2017

    October 19, 2016

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    arrowFor an individual with self only coverage the new maximum allowance will be $3,400.

    For those covering any dependents the new maximum allowance will be $6,750.

    They’re serious now…the penalties are getting real from the Department of Labor.

    They have not made any adjustments in some time, but that time has now ended.
    Effective immediately, and with future adjustments to be made every January 15, the penalties for non compliance with various parts of the DOL edicts are as follows:

    Failure to file a 5500 form – raised from $1,100 per day to $2,063 per day – each day late
    Failure to provide a SBC to employees is raised from $1,000 to $1,087 per failure
    Failure to provide a 401k preemption notice when automatic contribution arrangements are in place is raised from $1,000 to $1,632 per day of noncompliance

    So yeah, get it done…

  • 4 Easy Ways to Step Up Your Employee Wellness Program | California Benefit Advisors

    October 17, 2016

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    Brooklyn BridgeEmployee Wellness Programs are a key factor in employee engagement and overall company success in today’s business world. Wellness programs are consistently evolving and changing as employee demands shift. Companies are constantly looking for new ways to engage and encourage their employees, preferably at a lower cost. Below are some effective and cost-efficient ways to enhance your employee wellness programs, leaving your employees happier and more excited about work!

    1. Walk and Talk Meetings

    Walk and Talk meetings are becoming a popular new way that companies can encourage employee fitness in the workplace. The average American employee spends the vast majority of the day sitting at the desk, and studies show that 86% of them hate it. The walk and talk meetings provide a way to get up and move around, while still being productive with the work that needs to be accomplished. In addition, walking boosts creativity and new environments produce fresh ideas. A Stanford study recently found that, “walking has a very specific benefit – the improvement of creativity.” So, next time you’re looking for a boost of creativity and activity in your schedule, consider taking your meeting for a walk.

    1. Fit Bit Challenges

    Fit Bits are one of the most popular fitness trackers on the market. Several employees already have personal Fit Bits so bringing them into the workplace is an easy transition. For those that do not, many companies are buying them in large bundles for resale at discounted rates to their employees. Companies are finding innovative ways to incorporate Fit Bits into their wellness programs to keep employees active while also fostering teamwork. According to Fit Bit, by holding challenges and competitions using the Fit Bit, companies create group health that is easily trackable. More specifically, “Fit Bit users with one or more friends are 27% more active.” The concept of using the Fit Bit with other employees builds better relationships as well as holds them accountable for being active.

    The challenges are a simple and cost efficient way to improve overall health and many companies have had great success through using the Fit Bit. For example, The Cleveland Cavaliers’ employees did a Fit Bit walking challenge in which they logged their daily activities and food. In order to entice workers to take part, they held competitions with prizes that spiked employee participation and overall health and happiness. The result of the challenge- “employees reached their personal fitness and weight loss goals, conference room meetings became walking meetings, and elevator trips were nixed in favor of the stairs. By the time their challenge came to a close, participants had recorded a cumulative 76.6 million steps—more than 38,000 miles—and created new healthy habits to take into the future.” Your company could be the next to see amazing FitBit challenge results!

    1. Healthy Vending Machines

    In order to achieve a healthy lifestyle, the combination of exercise and healthy eating is essential. For busy employees, grabbing a quick snack is a typical daily routine, however these quick grabs are often unhealthy. Keeping healthy vending machines, or stocking the fridge with fruits and vegetables allows workers to snag a healthy snack that will aid overall health and also satisfy mid-day hunger cravings. In addition, eating healthy has many cognitive benefits that can transfer into employees’ work. For example, typical benefits that arise from healthy eating are an increase in concentration and alertness, generating better work from each of your employees.

    1. Competitions

    Competitions can easily be tailored to fit your company’s culture! One of the most popular workplace competitions is the Biggest Loser challenge. In this type of challenge, the employee or team of employees sets a weight loss goal. The group that loses the most weight by the end of the allotted competition time wins! Another popular challenge is signing up for local 5Ks or half marathons and running the race with your co-workers. You can encourage employees to partake in fitness challenges by having prizes or monetary rewards. Aside from the obvious health results, challenges like these encourage teamwork and healthy competition inside the workplace. Above all else, it’s important to get creative with whichever competition you choose!

    The key to a successful wellness program is to make it personal to what your employees enjoy and will want to participate in. These are just a few ways that you can find success in employee wellness throughout your company. So, boost your overall employee morale and efficiency by implementing these simple yet cost efficient wellness ideas in your daily routines!

     

    Contributed by Nicole Federico

  • Nondiscrimination Rules for Cafeteria Plans | California Benefit Brokers

    October 14, 2016

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    1013A cafeteria plan is an employer-provided written plan that offers employees the opportunity to choose between at least one permitted taxable benefit and at least one qualified employee benefit. There is no federal law that requires employers to establish cafeteria plans; however, some states require employers to have cafeteria plans for employees to pay for health insurance on a pre-tax basis.

    To comply with Internal Revenue Code Section 125, a cafeteria plan must satisfy a set of structural requirements and a set of nondiscrimination rules. Violations of the structural requirements will disqualify the entire plan so that no employee obtains the favorable tax benefits under Section 125, even if the plan meets the nondiscrimination rules. Violations of the nondiscrimination rules have adverse consequences only on the group of employees in whose favor discrimination is prohibited.

    A cafeteria plan must pass an eligibility test, a contributions and benefits test, and a concentration test for highly compensated individuals to receive the tax benefits of Section 125. Failure to meet these nondiscrimination requirements has no effect on non-highly compensated cafeteria plan participants.

    The IRS issued proposed cafeteria plan regulations on August 6, 2007. Final regulations have not been issued. According to the proposed regulations, taxpayers may rely on the proposed regulations for guidance pending the issuance of final regulations.

    The proposed cafeteria plan regulations make it clear that the plan must meet the nondiscrimination tests. Also, the plan must not discriminate in favor of highly compensated participants in its operation. For example, a plan might be considered discriminatory if adoption assistance is added to the plan when the CEO is in the process of adopting a child and adoption assistance is dropped when the adoption is final.

    Be aware that Section 125 nondiscrimination rules are separate from and unrelated to Section 105(h) nondiscrimination rules. Further, Section 125 nondiscrimination rules apply to all cafeteria plans regardless of their status as fully insured, self-funded, church plan, or governmental plan.

    As a practical matter, these nondiscrimination rules prohibit executive health plans offered through a cafeteria plan.

    Nondiscrimination testing can help employers avoid rule violations. But there are a number of definitions of key terms used in the tests that must be understood prior to completing the tests:

    Highly Compensated Individuals. Highly compensated individuals are defined as:

    • Officers
    • Five percent shareholders
    • Highly compensated employees (HCEs)
    • Spouses or dependents of any of the preceding individuals

    Highly Compensated Participant. A highly compensated participant is a highly compensated individual who is eligible to participate in the cafeteria plan.

    Officers. Officers include any individual who was an officer of the company for the prior plan year (or current plan year in the case of the first year of employment).

    Five Percent Shareholders. Five percent shareholders include any individual who – in either the preceding plan year or current plan year – owns more than five percent of the voting power or value of all classes of stock of the employer, determined without attribution.

    Highly Compensated. Highly compensated means any individual or participant who – for the prior plan year or the current plan year in the case of the first year of employment – had annual compensation from the employer in excess of the compensation amount specified in the Internal Revenue Code and, if elected by the employer, was also in the top-paid group of employees for the year. For 2016, the applicable compensation amount is $120,000.

    Key Employee. A key employee is a participant who, at any time during the plan year, is one of the following:

    • An officer with annual compensation greater than an indexed amount ($170,000 for 2016)
    • A five percent owner of the employer
    • A one percent owner having compensation in excess of $150,000

     

    Originally published by United Benefit Advisors – Read More

  • Health plan opt out options are being considered – new IRS regulations forthcoming

    October 12, 2016

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    arrowSome organizations let employees opt out of their medical plan election, in return for which they are given some taxable compensation.  The problem is that if employees are not participating in the plan, there may be a penalty for non-compliance with the ACA.  Now the government has made it simple – or at least clarified appropriate opt outs.  If it is CONDITIONAL – which means an employee may only opt out and receive cash if the employer makes the payment conditional upon proof of having other group coverage (with annual update) then it will pass muster.  IF, however, it does not have any conditions placed upon it…you have a problem.

  • Reporting Minimum Essential Coverage | CA Benefits Broker

    October 7, 2016

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    Minimum essential coverage (MEC) is the type of coverage that an individual must have under the Patient Protection and Affordable Care Act (ACA). Employers that are subject to the ACA’s shared responsibility provisions (often called “play or pay”) must offer MEC coverage that is affordable and provides minimum value.

    In the fall of 2015 the IRS issued Notice 2015-68 stating it was planning to propose regulations on reporting MEC that would, among other things, require health insurance issuers to report coverage in catastrophic health insurance plans, as described in section 1302(e) of the ACA, provided through an Affordable Insurance Exchange (an Exchange, also known as a Health Insurance Marketplace). The notice also covered reporting of “supplemental coverage” such as a health reimbursement arrangement (HRA) in addition to a group health plan.

    Recently, the IRS released the anticipated proposed regulations, incorporating the guidance given in Notice 2015-68. These regulations are generally proposed to apply for taxable years ending after December 31, 2015, and may be relied on for calendar years ending after December 31, 2013.

    The proposed regulations provide that:

    1. Reporting is required for only one MEC plan or program if an individual is covered by multiple plans or programs provided by the same provider.
    2. Reporting generally is not required for an individual’s eligible MEC only if the individual is covered by other MEC for which section 6055 reporting is required.

    These rules would apply month by month and individual by individual. Once finalized, the regulations would adopt the same information provided in the final instructions for reporting under sections 6055 and 6056 of the ACA.

    For examples under the first rule and more detail on the second rule, as well as how to avoid penalties, view UBA’s ACA Advisor, “Reporting Minimum Essential Coverage”.

    Originally published by www.ubabenefits.com

  • HIPAA Phase 2 Audits | California Employee Benefits

    October 6, 2016

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    1006The U.S. Department of Health and Human Services’ (HHS) Office for Civil Rights (OCR) began a pilot program in 2012 to assess the procedures implemented by covered entities to ensure compliance with the Health Insurance Portability and Accountability Act (HIPAA). OCR evaluated the effectiveness of the pilot program and then announced Phase 2 of the program on March 21, 2016. Phase 2 Audits focus on the policies and procedures adopted by both covered entities and business associates to ensure they meet selected standards and implementation specifications of the Privacy, Security, and Breach Notification Rules. Covered entities include health plans, health care clearinghouses, and health care providers; whereas, business associates include anyone handling health information on behalf of a covered entity.

    Phase 2 Audits of business associates focus on risk analysis, risk management, and reporting of HIPAA breaches to covered entities. OCR emphasizes the importance of audits as a compliance improvement activity in order to identify best practices and proactively uncover and address risks and vulnerabilities to protect health information (PHI).

    OCR chose entities to audit through random sampling of the audit pool. Communications from OCR were sent via email, so it is important to check spam filters and junk emails for communications from OSOCRAudit@hhs.gov. OCR emailed a notice to verify contact information. Once the contact information was verified, OCR emailed a pre-audit questionnaire to gather data about size, type, and operations of the entity. This data was used with other information to develop pools of potential covered entities for making audit selections.

    Phase 2 Audits consist of three sets of audits. The first set of audits will be desk audits of covered entities and the second set of audits will be desk audits of business associates. These audits will examine compliance with specific requirements of the Privacy, Security, or Breach Notification Rules and covered entities will be notified of their audit in a document request letter. All desk audits in this phase will be completed by the end of December 2016. OCR will select entities and request they electronically submit documentation within 10 days. The third set of audits will be onsite and examine a broader scope of requirements from HIPAA Rules.

    On July 11, 2016, 167 covered entities were notified that they were selected for a desk audit. Desk audits of business associates will begin this fall. Download the complete Compliance Advisor, “HIPPA Phase 2 Audits” for best practices for covered entities facing desk or field audits.

    Originally published by United Benefit Advisors – Read More

  • Finally, a New I-9 | California Benefit Consultants

    September 29, 2016

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    0928Since the current version of the Form I-9, Employment Eligibility Verification, expired on March 31, 2016, employers have been awaiting a new, updated form. On August 25, 2016, the federal Office of Management and Budget (OMB) approved a revised Form I-9. Consequently, the U.S. Citizenship and Immigration Services (USCIS) has 90 days to update the form and must publish a revised form by November 22, 2016. According to the OMB Notice of Action, this new Form I-9 will expire on August 31, 2019 — a three-year validation period similar to previous validation periods. In the meantime, employers may continue using the current version of Form I-9 (with a revision date of 03/08/2013 N) until January 21, 2017. After January 21, 2017, all previous versions of Form I-9 will be invalid.

    Changes to the Form

    Many of the Form I-9 changes were designed to help with completing the form and assist in reducing technical errors. For instance, new smart error-checking features have been added when the form is completed using an Adobe PDF viewer or application. Some other new features include:

    • Addition of a supplement where more than one preparer or translator is used to complete Section 1 (translator certification where an employee must check that he or she did or did not use a preparer or translator in completing the form).
    • Controls within the form for users to electronically access the instructions, print the form, and clear the form.
    • Drop-down calendars and lists.
    • Embedded instructions for completing each field.
    • Provision of additional spaces to enter multiple preparers and translators.
    • Quick-response matrix barcode (QR code) that generates once the form is printed and may be used to streamline audit processes.
    • Rather than all other names used, only requiring employees to provide other last names used in Section 1.
    • Removing the requirement that aliens authorized to work provide both foreign passport information and Form I-94 in Section 1 after attestation of such status.
    • Separating instructions from the form.
    • Specific area to enter additional information that employers are currently required to notate in the form’s margins.
    • Validations on certain fields to ensure information is entered correctly.

    The new Form I-9 instructions also provide revised abbreviations for use on the form. Employers should use these abbreviations although longer, commonly used abbreviations may still be acceptable. For example, “Permanent Resident Card” is now “Perm. Resident Card (Form I-551).”

    Related Rulemaking

    Also important, the federal Office of Special Counsel (OSC) has proposed to revise regulations implementing a section of the Immigration and Nationality Act concerning unfair immigration-related employment practices. In these revised regulations, the OSC proposes a new definition of discrimination along with a revision to the language related to unfair documentary practices. The proposed definition clarifies that discrimination is the act of intentionally treating an individual differently, regardless of the explanation for the discrimination, and regardless of whether it is because of animus or hostility, to include the process related to completing the Form I-9.

    There is also a proposed unfair documentary practices portion to prohibit unfair immigration-related employment practices. It would replace the current document abuse provision, which prohibits requiring more or different documents than presented if the employee presented documents from the list of acceptable documents. This also goes to an employer’s rejection of employee-completed Section 1 — which may be considered a discriminatory employment practice.

    Currently, the USCIS provides this guidance in the prevention of discrimination in the Form I-9 process.

    What to Do

    As a response to the many pending changes to the Form I-9 and related laws, the next step for employers is to review current policies and procedures. For instance, employers will still be permitted to print and complete the new Form I-9 by hand, but that may not be a permanent option. In fact, employers and employees may elect to fill out any or all sections of the form by computer, by hand (printed), or a combination of both.

    Originally published by ThinkHR – Read More

  • Yes, there are complaints, yes there are problems, so what’s the deal with the ACA?

    September 28, 2016

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    arrowFirst, we don’t know, because the election will decide a few things.  Mr. Trump proposes to dismantle the ACA but doesn’t say what will take its place (the Republicans have some ideas, but will he follow the party, and are their ideas fully worked out? (no would be the answer))
    If Mrs. Clinton takes the seat, she can, will and should resume the conversations she was having when Mr. Clinton first arrived in office, which will include consideration of the “public (read – nuclear) option” which means replacement of the ACA with a government run system
    for health care delivery.

    The weird thing is that the government is denying that there are any medical “inflation” problems because the subsidies, which continue to be paid, offset these increases considerably.  So how long will the subsidies continue…especially in a Trump White House?

    Meanwhile, the insurance companies have lost hundreds of millions of dollars and three of the largest – United, Humana and Aetna – have decided to drop out of most of the Exchanges in which they currently participate.  They are still very much in the game for group coverage, where they have long adapted to rules that affect how plans are delivered, but the individual plans continue to present a problem – a problem that everyone saw coming.  It’s a classic case – the carriers lowered their rates to be attractive, the government forced the issue by having negotiations with carriers that compelled them to be competitive, and then when older, sicker enrollees got on the plan, costs went up (no kidding).  And so here we are, facing the predicted “death spiral” which will only get worse as costs go up, those who need the coverage will continue while those that don’t won’t (and the cost of coverage remains considerably above the penalties imposed for failure to have coverage), more carriers will pull out (now some states only have one left, and what if they lose money?) which reduces competition, leading to even higher rate increases to go along with the deteriorating pool – and then either the ACA fails and the government abandons the issue…or the government doubles down and does it all.

    A sampling:

    Aetna pulls out of 11 of its 14 markets, and United out of 31 of its 34 markets
    Enrollment in the ACA Exchanges are now said to be half of the original forecasts
    Some states will now be down to one carrier of “choice”
    Georgia regulators have approved double digit rate hikes for ACA plans
    Connecticut increases supposed to be 25%
    Florida should see increases of 19%
    Nebraska increases will be an average of 35%
    Thousands of West Virginians are unable to qualify for subsidies due to high incomes

    And the list goes on (or the beat goes on, or something like that).

  • Why Care About Diabetes and What You Can Do as an Employer | California Benefit Consultants

    September 27, 2016

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    0927Diabetes is an expensive disease: $322 billon in America! Costs are compounded because diabetes is the leading cause of heart disease, stroke, kidney disease, lower limb amputation, and blindness, and also has connections with some cancers, arthritis, gum disease and Alzheimer’s disease. To add some perspective, consider these facts: Today, 3,835 Americans will be diagnosed with diabetes. Today, diabetes will cause 200 Americans to undergo an amputation, 136 to enter end-stage kidney disease treatment, and 1,795 to develop severe retinopathy that can lead to vision loss and blindness.

    Nearly 30 million Americans have diabetes and 86 million have pre-diabetes. While Type 1 diabetes presents suddenly, Type 2 diabetes is known as a silent killer. One can have it for years before displaying symptoms but, during that time, damage is occurring throughout the body.  For that reason, prevention or early diagnosis of diabetes is imperative. In Vital Incite’s benchmark data of just under 12,000 individuals with A1c values who have not been diagnosed with diabetes, 8 percent of those individuals had A1c values greater than 7 percent. Those values indicate uncontrolled diabetes, but these individuals were not yet diagnosed. In order to reduce risk, and reduce disease burden, the goal is to control diabetes in its early stages so it does not progress. Yet, in examining the control of A1c values, we find that more than 39 percent of diabetics have A1c values that are not controlled.

    ID with Diabetes and A1c Value

    Using the appropriate resources to control diabetes is critical because, as risk increases, cost also jumps. More importantly, these individuals experience a significant reduction in their quality of life.

    Diabetes costs increase with risk

    According to Carol Dixon, Regional Director for Community Health Strategies at the American Diabetes Association Indiana, the American Diabetes Association offers many free resources to support you.

    Wellness Lives Here℠ (wellnessliveshere.org): With year-round opportunities, Wellness Lives Here will help your organization educate and motivate employees to adopt healthful habits. For some, it means fewer sick days and higher productivity. For others, it means looking and feeling better. For everyone, the result is empowerment—Americans who are better able to control or prevent diabetes and related health problems.

    Wellness Lives Here resources include:

    • Engagement with the local American Diabetes Association office for lunch and learns and health fairs
    • Stop Diabetes @Work – Handouts on many health topics that can be co-branded, monthly newsletter articles to communicate healthy lifestyle messages, and a multitude of resources to integrate health into the corporate culture
    • Mission Engagement Days – Specially designed, easy to use toolkits are provided, including Get Fit, Don’t Sit Day (May), and Healthy Lunch Day (November)
    • Health Champion Designation – This special recognition goes to organizations that inspire and encourage a culture of wellness.
    • The CEO Leadership Circle brings together invited executives for the opportunity to work jointly with the local Association office toward specific health goals and objectives for their company.

    For more information on how the American Diabetes Association can support your wellness program, contact your local chapter or visit their website at diabetes.org. Read our recent blog on other cost-effective wellness strategies, particularly for small employers.

    Originally published by United Benefit Advisors – Read More

  • Top Wellness Program Components | California Benefits Broker

    September 23, 2016

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    0922-2While wellness programs and offerings continue to evolve among new trends and regulations, there are seven key components that tend to drive the most successful and effective programs we have seen with our clients.

    Biometric Data Collection

    Whether in the form of a biometric screening event or annual physical exam with a primary care provider, collecting biometric data (such as height, weight, blood pressure, blood sugar, hemoglobin and cholesterol levels) is a key piece to any wellness program. Identification of high risk biometrics and potentially undiagnosed chronic diseases are critical to get employees engaged with proper care and treatment, but to also show progress and risk migration over time.

    Disease Management and Case Management

    While many wellness programs have engaged health coaches, we have found significant merit with specific disease management or case management programs to address the specific needs of the member population. Using collected biometrics to identify uncontrolled chronic conditions and getting employees engaged with a disease management nurse that can assist with condition and medication management can have a greater impact on overall disease control and progression. Similarly, with case management, the goal to engage participants prior to major events such as hospitalization, to better manage risk and overall spend. Telephonic coaching for high-risk individuals is on the rise, according to the UBA Health Plan Survey. For the latest statistics examining wellness program design among 19,557 health plans and 11,524 employers, pre-order UBA’s 2016 Health Plan Survey Executive Summary which will be available to the public in late September.

    Health Action Campaigns

    While in recent years employers have started looking for more ways to show hard dollar savings with wellness programs, we have begun seeing a return to including components of the “softer” side of wellness, such as lunch and learns, physical activity challenges, or general education topics. Although it may be more difficult to show the impact and savings associated with these programs, the fact remains that employees generally enjoy and appreciate these types of programs. Health action campaigns can provide an easy entry into wellness programs for employees that otherwise may be hesitant to join, and it meets the need of providing information and options for those healthy and lower risk members not involved with disease or case management.

    Communication Portal

    A clear communication plan, including consistent messaging and branding and a main source of information, is a key component to keeping the wellness program moving throughout the year. A wellness portal is often useful for this task, as well as housing key participant information including incentive tracking. There are numerous options for portal vendors, and employers have had success with building a wellness page as part of an existing Intranet page. Establishing a wellness committee or wellness champions is helpful for relaying communication and generating engagement from various departments within an organization.

    Incentive Structure

    While the goal of every employer would be to have its employees intrinsically motivated to improve their own heath, employees often need some extrinsic motivation to get them started. Whether in the form of health savings account (HSA) contributions, premium reductions or various other incentives, simplicity is essential. Adding complex details, multiple dates, and rules complicates the program and often drives employees to only seek the details to qualify for the rewards, instead of making changes and being invested in their own health. For both participation-based and outcome-based programs, an easy-to-understand and interpret incentive structure will help to engage employees in the overall program. To understand legal requirements for wellness programs, particularly as it relates to incentive structure, request UBA’s ACA Advisor, “Understanding Wellness Programs and Their Legal Requirements,” which reviews the five most critical questions that wellness program sponsors should ask and work through to determine the obligations of their wellness program under the ACA, HIPAA, ADA, GINA, and ERISA, as well as considerations for wellness programs that involve tobacco use in any way.

    Senior Leadership Support

    The one key component to any program that you can’t buy – but that could ultimately be most critical to the success of the program – is the support from senior leadership. This could take the form of communication of their commitment to employee well-being, engagement in the programs, and tasking managers to support the program are all critical items to the long-term success of any program. Without clear support and engagement, participation is likely to remain with those already committed to wellness and lessen the impact on those who could benefit most from the programs.

    Data Analytics and Program Evaluation

    Every program should start and end with data analytics. Using data to first identify the risks within the population and medical spend waste within the plan supports the development and implementation of a carefully thought out strategy. Clear metrics and goals for all vendor partners can be established and data analysis on a quarterly or annual basis allows us to see the progress and success (or lack thereof) of interventions and programs within the population.

     

    Originally posted by United Benefit Advisors – Read More

  • The FLSA Overtime Changes and Their Impact on Employee Benefits | CA Employee Benefits

    September 22, 2016

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    0915Most employers should be reviewing payroll budgets and job descriptions to ensure that changes to salaries and job classifications are all in order by the December 1 deadline based on the new overtime exempt salary threshold and other final rule changes to the Fair Labor Standards Act (FLSA). Another area that will be impacted by these changes and needs review now is employee benefits.

    Review Now

    This is the best opportunity to review your company’s eligibility requirements for certain benefits and benefit levels. Some benefit plans may include eligibility requirements based on exempt versus nonexempt status or salary versus hourly status. With the FLSA changes soon approaching, and many companies preparing for their annual open enrollment periods, you may want to use these next few months to review your eligibility requirements and make any necessary changes. These classification changes may unintentionally cause a reduction or loss of certain benefits for some of your employees.

    Retirement Plans

    Often, company contributions to retirement savings plans are based on an employee’s salary level. These contributions will increase as you raise salaries or incur additional overtime costs. The costs of short-term disability, long-term disability, and group life insurance plans are frequently based on an employee’s annual earnings; therefore, there may be an increase in these benefits costs as well. Review the eligibility requirements for health and welfare benefits and other fringe benefits offered by your company. Determine if any employees may be impacted and consider whether you will make any changes to those benefit plans.

    Affordable Care Act

    With regard to the Affordable Care Act (ACA), higher pay may increase the employee threshold for affordability if your company is using the rate of pay or W-2 safe harbor methods to determine health care affordability. Additionally, higher pay may reduce any government-provided health care subsidies that employees may currently be able to receive.

    Tracking

    Your company’s tracking method for recording hours of service when reviewing your employees’ measurement and stability periods should also be reviewed. Some employers may use different methods for different classes of employees. A change in class for certain employees may impact their measurement and stability period for health care benefit eligibility.

    Time Off

    Paid time off accruals, paid sick leave accruals, and workplace flexibility will all need to be addressed as you work through these changes. It is extremely important for you to be able to explain the changes to your employees and reinforce the fact that the new overtime law does not negate their importance to the company.

    Communicating Changes

    Managers should already be talking to employees about these changes and allowing employees to ask questions. Companies need to think about new ways of maintaining the same level of flexibility and autonomy that many of their exempt employees have enjoyed in the past. This may mean thinking of new and different ways of getting the work done that will provide a sense of empowerment and autonomy to the employees. Cross training, work sharing, and fine-tuning processes will allow better efficiencies enabling employees to accomplish more without the need for excessive work hours.

    Employee engagement and morale issues are critical concerns as many currently exempt employees, particularly managers, will feel that they have lost their status and prestige. HR professionals and other senior leaders in the organization should be available to have open discussions with these employees to explain the new law and reinforce that this has nothing to do with their overall job performance or level of responsibility. For most, this does not mean a change in job duties; it merely means a change in the recording of hours and method of payment. When managed correctly, employees should not see a reduction in their wages. They should earn approximately the same as or more than their current salary, based on a wage increase, overtime earnings, or adjustment to a comparable hourly wage.

    There is no argument that these changes will be significant for many employees. The continued FLSA minimum salary adjustments scheduled to occur every three years will create a new paradigm shift in how exempt and nonexempt employees are viewed. No longer can it be said that all managers are exempt employees, as many will continue to manage employees and also be eligible for overtime. Remember that you can pay your nonexempt employees a salary, but you also must have a method to record their hours worked and you must compensate them for overtime.

    These changes are estimated to impact 4.2 million employees across the United States. How you communicate these changes to your employees will help tremendously in preserving a positive morale in your workplace.

    Originally published by ThinkHR – Read More

  • Striving for a Culture Change in Your Wellness Program (Part 2) | CA Benefit Advisors

    September 17, 2016

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    0914wellnessMany wellness programs start off with good intentions, offer some education and fun, but even after several years, have failed to meet their original goals or produce real culture change. We recently reviewed the first three steps to a successful, sustainable workplace program. Here we conclude with steps four through six for setting up a successful program.

    4.  Find internal wellness champions; develop and embrace an organizational vision for wellbeing.

    Now that the stars are beginning to align, management is invested in the program, the partners, tools, and resources needed have been established, you can now begin to look internally at where to go next. Most wellness vendors, and consultants like me, recommend setting up a committee to champion the program. Smaller organizations might have one or two people, while a larger organization may have a larger group. To obtain a well-rounded perspective, the committee should represent the office as a whole, not just certain pieces. Different divisions, remote employees, various departments, or other organizational demographics should all be represented. A successful program needs a group of people who are in charge of equal parts of the organization and who are actively engaged in effective change. These champions are the ones the employees come to rely on for information; they are the wellness cheerleaders of your organizations, walking the talk! Members can be appointed or volunteer, but I highly recommend setting guidelines and expectations for committee members up front.

    Create a vision within the committee or team and gain insight on what the employees want in a program. What is the goal and purpose of having a health and wellness program? This might seem basic, but it is a necessary question. What do you want to accomplish? Is your organization looking to drive down the cost of claims? Although cost containment may be reason to look at wellness, it should not be your only goal. Successful groups implement programs to improve the lives of employees and their families. Your vision does not have to be formal, but the purpose of the program and why it is being put in place should be communicated. As the employer, sit down and ask the employees what they want in a wellness program. You would be surprised at the number of employers I have worked with that have not asked their employees anything. Engagement with employees is vital to the success of the program; build your vision and plan with their help.

    5.  Set health goals and tailor program elements and incentives to meet them.

    With the aggregate data in hand, it is time to define a program outline and set goals. It is easy to get ahead of yourself when beginning this program by creating unrealistic goals that are too demanding of employees. You will not have 100 percent participation in your first year. Strategize and establish measurable goals with your committee, wellness vendor, and benefits consultant. Setting realistic expectations is crucial for program success.

    Find the balance between offering enough activities to keep employees engaged, but not overwhelming them with so many activities that it becomes taxing. Do not be afraid to want to see your program succeed! Look ahead and create a six- to 12-month program. I prefer to create a 10-month program with some type of monthly healthy activity. Select programs and topics that relate directly back to the aggregate data you collected. For example, if you have data that says less than five percent of your population uses tobacco, then you do not need to implement a 12-week tobacco cessation program. Instead, assist that five percent by providing some free education and resources for support, then focus on where your organization might need more attention.

    Find programs that support employees on their overall health journey. Ask questions to identify programs that will encourage and influence behavior changes. For most organizations, it is common to offer programming geared to employees that are pre-hypertensive or hypertensive, overweight, obese, have high cholesterol, or employees experiencing high stress and anxiety. Rely on your benefits consultant or wellness vendor to make the best practice recommendations for creating behavior changes related to these risk areas. You may be able to use your existing Employee Assistance Program (EAP) and market it more heavily. In more extreme cases, you may need to utilize health coaches available with your wellness vendor or through your disease management program.

    Think of setting goals in terms of the percentage of participation would you like to see in the first, second, third, and future years. For example, you may want to see utilization of medical preventive care benefits increase from 57 to 75 percent, or see employee engagement increase from one activity to the next. Setting two to five measurable goals early on, then evaluating those goals monthly, provides valuable insight into the program’s success. Make goals and programming obtainable; create an atmosphere of success for your employees.

    Do not forget to use incentives. What will get your population “moving?” The discussion of whether intrinsic or extrinsic incentives are more effective is a lengthy one and of much debate these days.

    From internal case studies, it is my expert opinion that employers willing to link their wellness program incentives to their benefit plan design in the form of reduced medical premiums, or making contributions to an employee’s health savings account or flexible spending account, see the greatest level of participation and overall behavior change in their employees. Of course, this does not occur overnight, but rather over time in coordination with your benefits consultant. This becomes a way of creating a cost-effective and consumer-driven healthcare plan that uses incentives to encourage your employees to make high-value decisions. A testimonial from one of our client’s employees says it all when it comes to intrinsic vs. extrinsic incentives.

    “In short, I came for the savings, I stayed for my health. The first year I only participated for cost savings thinking, ‘Who would really like this?’ The following year I signed up for a health coach. Now I’m living healthier, eating better, exercising more, and more importantly, feeling better. Now I think, ‘Who wouldn’t really like this’?”

    6. Kick it off, communicate and evaluate.

    Roll out your program! Hold a kick-off party for the employees in the office, and conduct a webinar for the employees who work off-site. Provide employees with an overview of the program so they understand why your organization has created a wellness program, what employees should expect from their program, and the vision of the program.

    Make sure to communicate about the program weekly, and use all forms of communication. Ask your employees what frequency of emails they prefer. Many of our clients, including my own company, like to have two emails a week to remind them of what is going on. Use social media, provide videos, webinars, etc. The more buzz that can be created around the program the better. Keep employees engaged and excited when it comes to your program, but do not overwhelm them with communication. Send emails about the challenges keeping employees engaged and involved, on who is winning, and success of activities. Create an environment of success using these communication methods.

    Last, evaluate the program realistically. What went well? What needs improvement moving forward? Get real-time reporting from the vendor for participation. Review the program throughout the year and adjust as needed – no program is ever static. If you are not making changes each year, you are not being realistic. Improvements can always be made. Survey employees about things they learned, what they liked, and what they would do differently. You can use your vendor or benefits consultant to assist here. Make sure that the feedback from the employee surveys is taken into consideration when moving forward with the program. The more employees engage in the wellness program in its entirety, the more success you will have moving forward.

    Originally published by United Benefit Advisors – Read More

  • Striving for a Culture Change in Your Wellness Program (Part 1) | CA Benefit Advisors

    September 9, 2016

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    0909klbgblMany of us have seen or heard about the various wellness programs referred to as “participation–based” programs. These participation-only programs continue to be the starting point for many organizations when they enter the world of workplace wellness. Participatory programs typically include a few individual and team-based activities, offer a level of electronic or onsite seminar education, and offer employees biometric screening and personal health risk assessments. Organizations may even award prizes, hold drawings, or offer giveaways.

    These programs are typically created with the goals of promoting and encouraging healthier lifestyles for their employees and their families, reducing healthcare costs of the organization, or simply because ownership feels it is the right thing to do.

    Fast forward a few years, and the same program is being offered. In most cases, employees have received some education and had fun, but the organization has yet to meet its original goals or experience a real culture change. Employees still seem to be leading unhealthy lifestyles, productivity and morale seem lower than ever, and healthcare claims continue to skyrocket. So why do you even have this wellness program?

    In my eight years working as Wellness Program Manager for a mid-sized benefits consulting firm, I have been a part of and have seen the good, the bad, and the ugly of the programs. I have learned from mistakes made early on, and I value sharing those experiences with those I have the opportunity to consult with. I share firsthand examples from my own company’s program, as well as the experiences of my clients and other business partners. A program set up successfully – with the right support, tools, partners, and initial incentives – will absolutely reap the reward, and your organization should recognize a true cultural change.

    These are the key factors that I believe contribute most to the success of a wellness program.

    1. Secure senior management commitment and participation.

    It is easy for business owners to say they want a wellness program, but it is a different story when they actually embrace the concept, support the process, and engage in the program themselves. Owners of organizations have come to me for help in implementing a wellness program. They assign one person to be in charge of the program, typically someone whose time is already limited, and for one reason or another the program stalls. If the top leadership of the organization is not supportive or engaged, it could take anywhere from six months to five years trying to get a sustainable wellness program off the ground. The program may not even take off at all.

    I have seen these programs fizzle for many reasons, including a shift in business objectives, lack of established goals, or lack of participation or role-modeling from management or ownership. It can be recognized early whether a program is going to succeed by the support it has from its leaders. Think of a successful program much like the game “follow the leader.” Good leaders and owners should not only sponsor the program, but should also be actively engaged and supporting it, leading by example. When employees see owners and employers participating and supporting the program, they too will “follow the leader.” Once you have backing from the people who invoke change within your organization, laying the groundwork for the program will become a smoother process.

    2.  Survey the organization and gather aggregate data to establish need and risk areas.

    Once you have built the foundation, it is a good time to collect and gather data to determine need and evaluate aggregate risks in the organization. Of those organizations that created the participatory programs we discussed earlier, how many of them do you think actually asked their employees first what they wanted or needed in order to change unhealthy behaviors or lead a healthy lifestyle? What lifestyle-related claims is the organization experiencing that might be able to be controlled with interventions? What health risks exist within the organization? Organizations typically roll out the program before they gather the data, and then look back and wonder why their participation in their program was so low. Logically, it is because the employees didn’t want or need it or see the value.

    When working with a benefits consulting firm, organizations ask for employees to be surveyed annually on their likes and dislikes in medical and dental coverage. It only makes sense that employees also be surveyed about their needs in a wellness program. The employee wellness survey may include questions about areas where they may want help, programs they would be willing to participate in, what would motivate them to engage in the program, and whether or not they are even looking to make any changes. Do not worry or be discouraged, as there is always five to ten percent of a population that is resistant to anything and will never participate regardless of what you provide.

    Additional data is then obtained by analyzing your organization’s aggregate claims, if data is available. Along with claims data, organizations may also compile aggregate data through health screenings, biometrics, health and fitness diagnostics and assessments, blood work, and more.

    3.  Utilize existing tools and resources, establish partnerships and seek guidance.

    Many organizations may not be aware of the variety of wellness program tools and resources available to them. First, look to your benefits insurance consultant. Qualified, reputable benefit consulting firms now have credentialed wellness program managers or coordinators on staff to work alongside you and your team. Consultants can help navigate what is available to you from your insurance carrier or third party administrator and are likely tapped into local and national resources, wellness vendors, and other workplace wellness tools. One of the best parts of my role as a Wellness Program Manager is to share my passion for wellness with our clients and help them design a sustainable program. If you have a benefits consultant that is not providing this level of support or staff, it is worth inquiring.

    Establish a partnership with a wellness vendor. This is one resource that is often overlooked because organizations try to do it themselves. Sustainable programs have vendors that can design programs based on need and risk, manage day-to-day program tasks, provide ongoing reporting, and recommend best practices for goal achievement.

    Over the last few years, hundreds of new wellness vendors have entered the marketplace. I have worked with great vendors and vendors that I will not work with again. Employers should not settle for a “cookie cutter” program. Look for a partner that shares a similar view on wellness, one who will customize a program to satisfy your organization’s objectives. Ensure that you partner with a vendor that offers actual guidance and management of your program. CAUTION: Many vendors promote account management as a top service they provide, but few deliver. A great way to find the right vendor is through the partnerships your employee benefits consultant has established or from other business referrals and testimonials. When I place a client with a vendor, the most important thing I look for is the type of service my client will receive. Accept nothing but high quality and service.

    Subscribe to the UBA blog for part 2 in this series, which will cover the final steps to successfully set up a program with the right support, tools, partners, and initial incentives.

    For additional trends among wellness programs, download In UBA’s new whitepaper: “Wellness Programs — Good for You & Good for Your Organization”.

    To understand legal requirements for wellness programs, request UBA’s ACA Advisor, “Understanding Wellness Programs and Their Legal Requirements,” which reviews the five most critical questions that wellness program sponsors should ask and work through to determine the obligations of their wellness program under the ACA, HIPAA, ADA, GINA, and ERISA, as well as considerations for wellness programs that involve tobacco use in any way. With over 20 pages of comprehensive guidance, examples and frequently asked questions, this is an invaluable employer resource.

    For the latest statistics from the UBA survey examining wellness program design among 19,557 health plans and 11,524 employers, pre-order UBA’s 2016 Health Plan Survey Executive Summary which will be available to the public in late September.

    Originally published by United Benefit Advisors – Read More

  • Employer Medicare Part D Notices Are Due Before October 15 | Petaluma Employee Benefits

    September 8, 2016

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    Deadline text on the calendar (or desk planner) underlined with red markerAre you an employer that offers or provides group health coverage to your workers? Does your health plan cover outpatient prescription drugs — either as a medical claim or through a card system? If so, be sure to distribute your plan’s Medicare Part D notice before October 15.

    Purpose

    Medicare began offering “Part D” plans — optional prescription drug benefit plans sold by private insurance companies and HMOs — to Medicare beneficiaries many years ago. Persons may enroll in a Part D plan when they first become eligible for Medicare. If they wait too long, a “late enrollment” penalty amount is permanently added to the Part D plan premium cost when they do enroll. There is an exception, though, for individuals who are covered under an employer’s group health plan that provides “creditable” coverage. (“Creditable” means that group plan’s drug benefits are actuarially equivalent or better than the benefits required in a Part D plan.) In that case, the individual can delay enrolling for a Part D plan while he or she remains covered under the employer’s creditable plan. Medicare will waive the late enrollment premium penalty for individuals who enroll in a Part D plan after their initial eligibility date if they were covered by an employer’s creditable plan. To avoid the late enrollment penalty, there cannot be a gap longer than 62 days between the group plan and the Part D plan.

    To help Medicare-eligible persons make informed decisions about whether and when to enroll in a Part D drug plan, they need to know if their employer’s group health plan provides creditable or noncreditable prescription drug coverage. That is the purpose of the federal requirement for employers to provide an annual notice (Employer’s Medicare Part D Notice) to all Medicare-eligible employees and spouses.

    Employer Requirements

    Federal law requires all employers that offer group health coverage including any outpatient prescription drug benefits to provide an annual notice to plan participants. This notice requirement applies regardless of the employer’s size or whether the group plan is insured or self-funded.

    • Determine whether your group health plan’s prescription drug coverage is “creditable” or “noncreditable” for the upcoming year (2017). If your plan is insured, the carrier/HMO will confirm “creditable” or “noncreditable” status. Keep a copy of the written confirmation for your records. For self-funded plans, the plan actuary will determine the plan’s status using guidance provided by the Centers for Medicare and Medicaid Services (CMS).
    • Distribute a Notice of Creditable Coverage or a Notice of Noncreditable Coverage, as applicable, to all group health plan participants who are or may become eligible for Medicare in the next year. “Participants” include covered employees and retirees (and spouses) and COBRA enrollees. Employers often do not know whether a particular participant may be eligible for Medicare due to age or disability. For convenience, many employers decide to distribute their notice to all participants regardless of Medicare status.
    • Notices must be distributed at least annually before October 15. Medicare holds its Part D enrollment period each year from October 15 to December 7, which is why it is important for group health plan participants to receive their employer’s notice before October 15.
    • Notices also may be required after October 15 for new enrollees and/or if the plan’s creditable versus noncreditable status changes.

    Preparing the Notice(s)

    Model notices are available on the CMS website. Start with the model notice and then fill in the blanks and variable items as needed for each group health plan. There are two versions: Notice of Creditable Coverage or Notice of Noncreditable Coverage and each is available in English and Spanish:

    Employers that offer multiple group health plans options, such as PPOs, HDHPs, and HMOs, may use one notice if all options are creditable (or all are noncreditable). In this case, it is advisable to list the names of the various plan options so it is clear for the reader. Conversely, employers that offer a creditable plan and a noncreditable plan, such as a creditable HMO and a noncreditable HDHP, will need to prepare separate notices for the different plan participants.

    Distributing the Notice(s)

    You may distribute the notice by first-class mail to the employee’s home or work address. A separate notice for the employee’s spouse or family members is not required unless the employer has information that they live at different addresses.

    The notice is intended to be a stand-alone document. It may be distributed at the same time as other plan materials, but it should be a separate document. If the notice is incorporated with other material (such as stapled items or in a booklet format), the notice must appear in 14-point font, be bolded, offset, or boxed, and placed on the first page. Alternatively, in this case, you can put a reference (in 14-point font, either bolded, offset, or boxed) on the first page telling the reader where to find the notice within the material. Here is suggested text from the CMS for the first page:

    “If you (and/or your dependents) have Medicare or will become eligible for Medicare in the next 12 months, a Federal law gives you more choices about your prescription drug coverage. Please see page XX for more details.”

    Email distribution is allowed but only for employees who have regular access to email as an integral part of their job duties. Employees also must have access to a printer, be notified that a hard copy of the notice is available at no cost upon request, and be informed that they are responsible for sharing the notice with any Medicare-eligible family members who are enrolled in the employer’s group plan.

    CMS Disclosure Requirement

    Separate from the participant notice requirement, employers also must disclose to the CMS whether their group health plan provides creditable or noncreditable coverage. The plan sponsor (employer) must submit its annual disclosure to CMS within 60 days of the start of the plan year. For instance, for calendar-year group health plans, the employer must comply with this disclosure requirement by March 1.

    Disclosure to CMS also is required within 30 days of termination of the prescription drug coverage or within 30 days of a change in the plan’s status as creditable coverage or noncreditable coverage.

    The CMS online tool is the only method allowed for completing the required disclosure. From this link, follow the prompts to respond to a series of questions regarding the plan. The link is the same regardless of whether the employer’s plan provides creditable or noncreditable coverage. The entire process usually takes only 5 or 10 minutes to complete.

    Originally published by ThinkHR – Read More

  • Speaking of Hits…what will happen with the remaining exchanges?

    September 7, 2016

    arrowThe good news is that they had three years on the public dole to finalize startup expenses and get things rolling. The bad news is that may not have been enough time. The Congressional Quarterly said the exchanges “survived startup problems with botched technology and political threats but continue to grapple with a fundamental challenge – financial sustainability” So look for rates to increase just because they do, further drop off from the exchanges and some desperate political lobbying, particularly in California, to stave off bankruptcy. Should be fun.

  • The Hits Keep Coming at Zenefits…reorganization means downsizing

    September 6, 2016

    arrowIn February they had 250 layoffs. In mid June they had 106 layoffs. In late June 110 employees took voluntary buyouts after the CEO declared that only committed workers should stay. Now they are down to 950…and in free fall?

  • How to Realize the Full Potential of a Private Exchange | California Benefits Broker

    September 1, 2016

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    0901In Part 1 of this series, I took a few shots at some of the hype around private exchanges, but I still come down firmly on the “pro” side of the conversation.

    Given the right circumstances, and by taking the right approach, a private exchange can deliver a tremendous amount of value while solving many of the challenges facing employers who wish to offer a sustainable and effective employee benefits program.

    For many large employers, those with thousands of employees, this is not news. By deploying private exchanges, they’ve been able to achieve exceptional cost and performance outcomes while gaining a strategic advantage over their competitors.

    For small to mid-sized employers, this is big news!

    Solutions that were once available only to the largest employers are now available to employers of practically any size. And, if you use your private exchange wisely, you too can enjoy a key strategic advantage over your competitors.

    So, let’s begin by looking at the circumstances indicating that participation in a private exchange may be a wise move for a small to mid-sized employer.

    The Benefit Value Grid

    For nearly 100 years, the primary method for people to access healthcare in the U.S. has been through employer-sponsored benefit plans. Now, we’ve reached a point where strategic thinking has largely been replaced by an annual train wreck of tactical reaction to an ever-increasing cost burden.

    Understanding health care inflation

    Looking back, increases in annual medical spending tracked almost perfectly with the Consumer Price Index (CPI) until 1965. Every year since then, the increase in healthcare cost has exceeded CPI, sometimes by two to three times. What happened in 1965? That’s the year Medicare was introduced. We’ve been trying to tame the beast ever since.

    Most of the subtleties and opportunities have been lost because offering benefits has been turned into a political talking point. No one ever asks if you should be offering benefits. We’re simply being told, “You must offer benefits.”

    So, let’s begin at the beginning by asking, “Does offering benefits make sense for your business?”

    Despite the hype, benefits are simply a tool – one of many tools you can use – for recruiting and retaining employees. Which means the use of benefits has to align with your business strategy. Two factors are key here: Are you competing for employees with other employers and how much work are you willing to do to design, implement and sustain an effective benefits program?

    Using these factors and a couple of others, I’ve plotted a number of benefit solutions on The Benefit Value Grid. Your first task is to decide where your company lands on the grid.

    Benefit Program Value Grid

    What’s right for your company is simply right for your company

    By that I mean, your strategy should dictate your approach. Starting with tactics first (switching carriers or plans to reduce benefits cost or increasing cost sharing or any of a number of tactics used to try to bend the cost curve) is the wrong approach. Don’t let anyone tell you otherwise.

    So, for the sake of argument (and to make the rest of this blog relevant!), let’s assume you fall in the upper right quadrant: benefits are important to your success, you’re willing to do the work, and you have clear outcomes you wish to achieve.

    While learning to connect wisdom to technology, I have observed what does and doesn’t work when it comes to designing and maintaining a successful private exchange. From this, I have developed a very basic “how to” model for you to use if you are considering moving to an exchange or want to get more out of the one you currently use.

    Your first step is to get expert advice

    You’re looking for someone with the experience and knowledge necessary to help you choose and actively manage the best technology available. As I said in Part 1 of this blog, the developers of successful exchanges now know that open, flawless, and fully mobile technology is the cost of entry into the private exchange game. A good advisor can help you find a provider who meets this new minimum standard.

    And, here’s a key distinction: you’re looking for someone who takes responsibility for being much more than a broker. You’re looking for an advisor. This is an important development in the benefits industry. In the traditional world of the benefit drumbeaters, where benefits are seen as a commodity and one carrier is considered to be much the same as another, the broker has an arms-length relationship with vendors. Their job is to solicit bids on your behalf, present the bids to you, and let you decide which fits your needs… or, in far too many instances, which is the lesser of several evils.

    It’s much different with an “open architecture” exchange model; the more intimate the relationship between your advisor and the exchange provider, the greater the opportunity to innovate and improve. The capability to completely customize a solution does not just depend on technology; it also requires a collaborative partnership between you, your advisor, and the exchange provider.

    A good example of this type of capability – one that goes even farther and leverages the collective wisdom of many advisors and the pooled purchasing power of many employers – is the private exchange created by United Benefit Advisors (UBA) called Benefits Passport.

    You then develop a plan that fits your strategy

    If you are making the switch from a fully insured to a self-funded plan hosted on a private exchange, the good news is your basic plan design is most likely going to look very similar to what you’ve done in the past. That’s because offering benefits that fit your strategic needs makes sense regardless of the funding method or technology used (or not used).

    Even better news is that, with an open architecture private exchange, you can weave your strategy into every element of the employee experience. You can purposefully customize each interaction your employees have with the exchange and its associated technology.

    Sound like a lot of work? There’s no denying it does take time, effort, and strategic thinking. But, if you think about the traditional, annual rehash of frustrating cost control tactics that slowly gut the value and effectiveness of your plan without actually controlling costs, then perhaps there is sanity in taking a longer view and doing the work.

    If you do take this on, the big promise you realize is that next year, instead of going back to the drawing board to find new ways to scrimp and save, you can actually use the data and information the exchange provides to build on the foundation your plan has created. The “lather, rinse, repeat” madness of a traditional renewal becomes a thing of the past. The monster that annually emerged from the closet is permanently locked away.

    And there is so much more you can do

    For example, during and after enrollment you can continuously reinforce your company’s commitment to its employees. The opportunity to brand your benefits to achieve greater loyalty and engagement – not to mention greater appeal to would-be employees – can be realized by including education about the why behind your benefits plan. Telling your employees why you think benefits are crucial to their (and their families’) well-being and success, and why you want them to have the best possible plan, can be easily facilitated on an open architecture private exchange platform.

    During enrollment, the best employers provide education, information, and support to empower employees to make the best choices for them and their family. In Part 1 of this blog, I proposed new breakthroughs occur when employers and their advisors adopt an open attitude toward the way they and the employees can put the technology to use. A subtle but important concept here is to be open to the idea that the technology, no matter how functional, may be a poor replacement for real, live human interaction.

    Traditionally, after enrollment, employees contact insurance carriers directly when they use their benefits. With a strategic, purposefully designed plan, one including ongoing employee engagement, you can help employees not only better manage carrier interactions, but also help them become aware of and more discerning in choosing cost-effective care options. You also have a continuous opportunity to nurture and reinforce an overall healthier approach to life. Which, of course, is a wonderful way to reduce plan cost: fewer claims = lower cost!

    A caveat: there is a natural sequence to engaging employees and creating a culture of health and well-being accountability. You must first educate and motivate employees to become active participants in benefit utilization before you can engage them in becoming more active in their own health management.

    There are two additional items to consider while designing your plan.

    First, exchange providers have the opportunity to have better, more aligned relationships with preferred carriers. Similar to the new, more collaborative relationship advisors have with a preferred exchange provider, with carriers, it can lead to preferential products and services being made available on the exchange. Guiding employees to these preferential options helps you control cost while enhancing the perceived and real value of your benefits program.

    Second, private exchange technology can make it a lot easier for you to meet regulatory and reporting requirements. During plan development, be sure to take advantage of as much compliance automation as possible.

    An Open Attitude: Two examples

    Cited earlier, UBA’s private exchange, Benefits Passport, provides two examples of how an open attitude impacts technology utilization.

    First, UBA’s private exchange gives employees access to live human advice, assistance, coaching, and advocacy where it is most needed.

    Second, “openly” acknowledging where their expertise begins and ends motivated the Benefits Passport team to form a strategic partnership with a technology-based employee education firm called Touchpoints. The integrated platforms enable employers and their advisors to fully customize the communication component of every interaction employees have with the exchange and with their benefits.

    It’s your data… use it!

    Finally, modern private exchange technology gives you the information you need to accurately measure the effectiveness, expense, and impact of your plan design and delivery. Instead of being clubbed each year by trend, the carriers’ favorite cudgel, and instead of making decisions based on someone else’s information and opinion, you now have the opportunity to make sound decisions based on facts.

    To do so, you must insist on complete transparency wherever possible. And, perhaps more important, you must be willing to take an open – there’s that word again – and honest approach to accepting what the data is telling you.

    The last word… until Part 3!

    It is important to repeat that this is a long-term strategic process that begins with creating the best possible platform for progress and then working with your advisor and all other key partners to learn as you go. I believe the future of healthcare delivery lies beyond exchanges, but we must walk before we can run.

    Turning the promise of modern, technology-empowered employee benefits programs into reality, now and in the future, requires adopting a modern, three-pronged approach.

    1. Adopt an open attitude to the role technology and expert advisors can play
    2. Step up to the plate when it comes to accessing and utilizing your data
    3. Continuously build on the foundation you create to expand your strategy for benefits delivery and employee engagement (remember, this is not a “set it and forget it” proposition)

    Coming soon

    Part 3: A look at the future of private exchanges

    Originally published by United Benefit Advisors – Read More

  • Do You Know Who Your Primary Care Physician Is? Well, You Should. | California Employee Benefits

    August 30, 2016

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    0830The Affordable Care Act (ACA) has brought about many changes to the health insurance industry. As we are now in the sixth year of implementation of the Act, we are seeing more changes coming just around the corner.

    Generally speaking, most health plans can be classified into two categories: HMO and PPO. With an HMO plan, you choose your physician group where you will seek services, and you choose a primary care physician that you will see for all of your needs, who will refer you to a specialist or other service facility, if needed. The HMO model is designed to be as cost-effective as possible, only providing services when the physician deems it necessary, or solely for the benefit of the patient.

    Due to the ACA, with an HMO plan, a woman is no longer required to get a referral from her primary care physician to an OB-GYN, and a parent is not required to get a referral to a pediatrician for his or her children even though neither are classified as primary care physicians.

    In contrast, a PPO plan has more flexibility for the patient. With a PPO plan you are encouraged to see physicians and providers that are participating in your plan’s network, but are not required to do so. You can, in fact, see any doctor or provider that you wish, when you wish to see them, and without a referral from your primary care physician.

    However, times they are a-changin’. Beginning January 1, 2017, Covered California, California’s state insurance exchange, will require both HMO and PPO enrollees to specify their primary care physician during the enrollment process. If one is not selected, the plan will select one for the plan participant. A plan participant is allowed to change their primary care physician at any time. Right now, this is only being implemented for individual plan subscribers.

    It is expected that this change will be implemented for group PPO plan subscribers in 2018.

    Beginning in 2012, the ACA implemented the Patient-Centered Outcomes Research Institute (PCORI) fee. This is a charge of $1 to $2 per enrollee, per year in a plan. If the plan is fully insured, the fee is paid to the government directly by the insurance carrier. If the plan is self-funded it is paid by the plan sponsor using IRS Form 720 and is due by July 31 for the previous plan year.

    The purpose of the PCORI is to help analyze the overall costs of health care and identify trends to find ways to best reduce the overall cost of health care.

    HMOs like Kaiser Permanente have fully integrated information systems that allow them to track each patient electronically so that they can see everything about the patient in one place. By tracking each patient, notes from the nurses and physicians, treatments, and medications, they can track costs and trends easily by mining the data from the system.

    Most PPO plans do not track this data, in part because patients in the past have not had to choose a primary care physician or provider group. When they can see whomever they choose, it makes tracking of this data very difficult across multiple providers. In addition, participants in a small group, fully-insured plan are pooled with other small groups where claim data is not shared with the plan sponsor, and there is no need to track it closely as the information at the patient level is not relevant to the actuaries that calculate plan costs and premiums.

    However, that is going to change. In order to study the overall cost of medical care, identify trends, and discover ways to curb inflating costs, data is needed, and selecting a primary care physician for plan participants is the first step.

    Cigna, which provides both HMO and PPO plans, has implemented a Collaborative Care Program with more than 120 physician groups in 29 states, including provider group Palo Alto Medical Foundation (PAMF) in the San Francisco Bay area. By tracking client claims data and patient outreach programs to help patients to remember to take their medications as prescribed and continue with follow up treatments, PAMF has been able to reduce its inflation trend by 5 percent compared to other providers in the San Francisco Bay Area. The goal is to duplicate and build on the success that Cigna has already shown through its program and control and reduce the cost of health care.

    So when you or your employees are applying for health insurance, make sure that primary care physician information is handy, because it is going to be needed.

    Originally published by United Benefit Advisors – Read More

  • COOPS leaving the coop…fewer and fewer hurt the ACA promise

    August 30, 2016

    arrowThere were 23 in 2014. Now there are seven. Soon there will be four. Even those remaining are changing things with a couple diversifying to serve large employers and one no longer limiting themselves to ACA mandated plans. Survival is the issue of the day. Yet they were the promise to change the bad old ways of the insurance companies and a beacon of hope. Now the beacon is slowly being extinguished….

  • Salary Considerations under the New DOL Standards | CA Benefit Advisors

    August 19, 2016

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    0818On December 1, 2016, the Department of Labor (DOL) will implement changes raising the minimum compensation for exempt employees to $47,476 annually. While salary is just half of a two-part equation that includes a duties test of essential job functions, scrutiny is under way to analyze compensation and find solutions to avoid conflict with the new rule. Many employers are asking: Why not just have all employees work 40 hours and get approval for overtime?

    The statutory definition of “employ” is “to suffer or permit to work.” The phrase “suffer or permit” to work does not mean “approve.” Hence, any time a nonexempt employee works, the employee must be compensated. A nonexempt employee cannot volunteer to work off the clock, so activities as innocuous as an employee arriving early and just starting their day become problematic. Common advice is to issue progressive discipline for employees who work unapproved overtime, but writing up a good employee for what they reasonably perceive to be initiative can open a new can of worms.

    Employers further bear the burden of capturing and recording all time worked. Documenting compensable time is complicated when reviewing the variations of what constitutes work time. The non-exhaustive list includes:

    • Waiting or on-call time when it is on the employer’s premises (for example, waiting for a shift replacement to arrive)
    • Work-related training activities (including travel time if they are off-site
    • Eating meals while checking emails or answering phones
    • Work travel outside of the employee’s normal commute
    • Answering work emails or completing reports after work hours
    • Attendance at required company functions, including volunteer activities and social events

    Even with a sophisticated time-keeping system, capturing all hours is a challenge. So what are some solutions? View the latest UBA Compliance Advisor, “Salary Considerations under the New DOL Standards,” which reviews workable solutions using salary increases, bonuses or incentives—as well as important considerations when paying nonexempt staff on a salary basis.

    Originally published by United Benefit Advisors – Read More

  • CPR & AED Training

    August 18, 2016

    Be a Community Hero!

    Arrow Benefits Group, is sponsoring CPR & AED training to help you safeguard lives at work and in your community.

    • Approximately 220,000 sudden cardiac arrests occur annually.
    • Waiting for emergency medical system personnel results in only 5-7% survival rate.
    • Providing immediate CPR and AED (Automated external defibrillators) within 3-5 minutes of collapse increases survival rates by as much as 70%; survival rates with CPR alone are about 7%.

    CPR & AED Training
    September 24, 2016
    9:00 a.m. – 12:30 p.m.
    Petaluma Valley Hospital

    To reserve your seat:
    Andrew McNeil 707.992.3789
    (remember to mention that you are a TPP client)

    Details on the training
    Details on OSHA’s cardiac arrest statistics

    Arrow Community Wellness Initiative offers training programs aimed at increasing community health and wellness.

    Petaluma Health Care District’s HeartSafe Community works to increase community preparedness in responding to cardiac emergencies.

  • 2016 VETS-4212 Filing Period Is Open | CA Employee Benefits

    August 16, 2016

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    0727ssgReminder: the VETS-4212 reporting cycle for 2016 is now open, and the filing deadline is September 30. Filing information is available on the Department of Labor’s Veterans’ Employment and Training Service (VETS) website.

    The Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) (located at 38 U.S.C. § 4212(d)), requires federal contractors and subcontractors subject to the act’s affirmative action provisions in § 4212(a) to track and report annually to the Secretary of Labor the number of employees and new hires that are covered veterans, by job category and hiring location, who belong to the specified categories of veterans protected under the statute. Under the most recent amendments to the statute, those categories are:

    • Disabled veterans;
    • Veterans who served on active duty in the Armed Forces during a war or in a campaign or expedition for which a campaign badge has been authorized;
    • Veterans who, while serving on active duty in the Armed Forces, participated in a United States military operation for which an Armed Forces service medal was awarded pursuant to Executive Order 12985 (61 FR 1209); and
    • Recently separated veterans (veterans within 36 months from discharge or release from active duty). The reporting form for this requirement is administered by VETS; generally the reporting cycle begins annually on or around August 1 and ends September 30.

    Note that the threshold for VETS-4212 reporting was increased from $100,000 to $150,000 on October 1, 2015. Accordingly, for the 2016 filing year beginning on August 1, the filing threshold for contracts entered into prior to October 1, 2015, is still $100,000; for contracts entered into on or after October 1, 2015, the filing threshold will be $150,000. The filing threshold for contractors continuing to file their VETS-4212 reports for 2015 is still $100,000.

     Originally published by ThinkHR – Read More

  • It’s not that simple! | CA Employee Benefits

    August 9, 2016

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    By Mathew Augustine, GPHR, REBC, CEO of Hanna Global Solutions, a UBA Partner Firm

    EmployeeAttentionExit or remain, welcome refugees or build a wall to keep them out, guns or no guns, black or white, include all or be exclusive… the list of extreme positions that people are taking goes on and on. What is driving this sudden increase in polarized thinking in the world? The world was getting smaller, technology was supposed to ”level the playing field,” and people were supposed to become more connected. What happened to the ”it’s a small world after all” thinking we hoped to grow up to realize?

    There is a surfeit of complexity in the world, and we are under more and more pressure from this complexity. We cannot live in our simple silos of thinking any more. There is more travel, more migration, more interaction between people who come from different life situations and history. As these complex systems collide, it creates even more complex problems to which there are no simple solutions.

    Yet we search for simple solutions. We come to realize that there is a limit to the complexity that can be tolerated by a normal human mind. The reduction of complex domestic and foreign policy strategies into text that scores at a fourth-grade reading level, and the nave sound bites that seem to make the world simple and ring with truth, have filled our world politics for over a decade. We search for simplicity, and when we find it, are willing to pay an additional price for it. We pay more for a phone with just one button. We can see that less is more.

    However, this desire for simplicity can lead to some complex problems. The Brexit vote is an example of what appeared to be a simple referendum where people were asked to vote for Britain to exit or remain in the European Union. In reality, it required that simple people with a limited appreciation of the complexity and implications of the situation make a world-changing decision. Could Britain have found a consensus-building process that allowed the complex issues to surface and address the desire for exit? Could it have found a way to work with the rest of the EU and make necessary adjustments to the hard line position? That sort of complex analysis and consensus cannot be done by the average person. We rely on and trust elected representatives and other subject-matter experts to better engage with the complex questions to arrive at the best available option. That is the democratic system – that uses the will of the people as a guide, while giving itself the ability not to be overwhelmed by it.

    What does all this mean to the employee benefits business? The issues are too important for employers and employees to make choices about benefits without proper study and assessment, but the overwhelming complexity of coverage options and regulations make this difficult. For this we need experts who can be trusted to understand all dimensions of complexity and present the non-experts with easy-to-understand solutions. There will be trade-offs and fewer options, but the options would take into account the complex underlying issues.

    The recommendation engine that helps employees choose an appropriate health plan is an example. Instead of the employee doing the what-if analysis on different plans for their specific family status and need for health services, a better starting point is a tool that looks at their current plan utilization and presents the option that would best suit them if all things stayed the same.

    Similarly, employers have so many options to choose from – fully-insured, self-funded, level funding, unbundled stop-loss, captive, different methods of stop-loss gain sharing arrangements, so on and on. Short of a system with artificial intelligence capabilities, there is no way to have a simple interface to this problem-solving method. Except—if you get help from an advisor you can trust, an advisor who has the wisdom, insight and experience to understand your situation, your risk tolerance, business model, and employee demographics and their risk tolerance, and can recommend the best options for you from among the plethora of those available. Good benefits advisors will embrace this challenge to make complex things simple for their clients without losing integrity. It is not easy. Employers should seek out advisors who can adapt to the new complexity of this world and rise to the challenge of simplifying it for their clients.

    How do you identify the right advisor? You have to avoid being mesmerized by the exaggeratedly simple solution that disregards underlying complexity, and look for those who make the complex simple for your benefit, without subjecting you to the complexity that hides the simple solution. A quote attributed to Einstein, who grappled with the most complex of concepts, goes “Everything should be made as simple as possible, but not simpler.” Evaluating employee benefits options is tough work, but the right employee benefits advisor can make it seem simple. The duck swimming across a pond seems to glide across the water effortlessly. Under the water, however, its feet are paddling like mad!

    United Benefit Advisors is full of such ”ducks” – paddling tirelessly to make the complex world of employee benefits simple for our employer clients and their employees.

    Read more here …

  • What the federal government giveth…someone sues to recover

    July 6, 2016

    At the inception of the Affordable Care Act, the federal government guaranteed carriers a subsidy to help them offset anticipated losses from the new “guaranteed issue” enrollment rules. With no underwriting permitted, health carriers anticipated (correctly) greater losses on their book of business, and the government was willing to give them a break, except that now they are going broke (well, not broke exactly, but they are limping) In the end, insurers received payment under the “risk corridor” allowance on only 12.6% of the amount claimed. As a result, Highmark, which is the fourth largest “Blues” company, has filed suit to recover their losses, claiming they were down $222 million in the ACA market in 2014 and $590 million in 2015.
    And since everyone likes a good pile on, other carriers are expected to join the suit. OK…

  • Qualifying Life Event’s | Benefit Specialist California

    July 5, 2016

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    Abridged from www.healthcare.gov

    WeddingRingsA change in your situation – like getting married, having a baby, or losing health coverage – that can make you eligible for a Special Enrollment Period, allowing you to enroll in health insurance outside the yearly Open Enrollment Period.

    There are 4 basic types of qualifying life events. (The following are examples, and is not a full list)

    Loss of health coverage

    • Losing existing health coverage, including job-based, individual, and student plans
    • Losing eligibility for Medicare, Medicaid, or CHIP
    • Turning 26 and losing coverage through a parent’s plan

    Changes in household

    • Getting married or divorced
    • Having a baby or adopting a child
    • Death in the family

    Changes in residence

    • Moving to a different ZIP code or county
    • A student moving to or from the place they attend school
    • A seasonal worker moving to or from the place they both live and work
    • Moving to or from a shelter or other transitional housing

    Other qualifying events

    • Changes in your income that affect the coverage you qualify for
    • Gaining membership in a federally recognized tribe or status as an Alaska Native Claims Settlement Act (ANCSA)
    • Corporation shareholder
    • Becoming a U.S. citizen
    • Leaving incarceration (jail or prison)
    • AmeriCorps members starting or ending their service

    For more information and advice regarding this or any other health insurance topics, please contact our office today to speak to one of our dedicated professionals.

    Read more here …

  • And the winner is…Oscar is going to have to raise their rates

    July 1, 2016

    They’ve only been in New York and New Jersey, but that was tough enough for an out of town tryout. Last year, New York authorities only allowed Oscar to raise their medical rates 4.5%. This year, anticipated increases are ranging between 8 and 30% — and the New York authorities have not yet weighed in on what they will allow. At first, Oscar had low rates to entice new enrollees – then they ran into state requirements over the size of their increase (did they not see that coming?). Now they are trying to save money by reducing the size of their networks (a very unpopular move as we have witnessed with “the Blues” singing them in California) Fortunately? They have also expanded into Texas and California. Oh, great.

  • Exempt from exemptions – major new FLSA thresholds for determination of overtime

    June 28, 2016

    Effective December 1, 2016 there will be new FLSA standards which affect the ability of organizations to have an employee be classified as exempt from overtime rules. California rules were already stricter but now the salary limits have been exceeded. The new threshold for consideration of potential exemption is now $47,476 per year, which compares to the previous Federal threshold of $23,660 and the current California threshold of $41,600. A new provision allows up to 10% of the minimum salary to be met by non discretionary bonuses, incentive pay or commissions, if made at least on a quarterly basis. California rules still apply to duties, where at least 50% of an exempt employee’s work must be spent on exempt duties.

    What does this mean? Employers must now identify those positions they consider to be exempt with salaries below $47,476 – and realize that they are no longer exempt.

  • Make it on your own or don’t make it at all – Covered California’s new challenge

    June 24, 2016

    Enrollment is dragging, but rates are still up, which may lead to more of a drag, as rate hikes should average 8% vs. the 4% consumers were used to in the last two years. It doesn’t help that the churn rate on the exchange is 47%, and enrollment should be dropping overall. Add to that the biggest challenge – the exchange has to be fully self sustaining in the fiscal year
    2016-17, as federal subsidies are scheduled to end. That’s not just a little number – in its first fiscal year the subsidy was 87% of total revenue ($324.5 million) and 47% in the second year ($157.2 million). That’s a big drop, not just a drop in the bucket.

  • We’ve all been wondering what she’d say, if she were in a position to get her way

    June 22, 2016

    It’s been a long time since she was tasked with reforming health care and the reimbursement associated with it, and a long time since she was blamed for the failure to enact such reform. Many have speculated, and been concerned, with what Hillary Clinton would propose as part of her Presidential platform. Now we know – she would expand Medicare by lowering the eligibility age to either 50 or 55. This stirs a few thoughts (of course):

    1) Some have tried to raise the Medicare age, since the actuarial expectations first derived in 1965 have gone, well, missing, given that the average life expectancy has increased so much since that time. As a result, Medicare keeps raising its fees, but still loses money. Not only are people living longer, but the cost of care and treatment for them once they hit a certain age has risen astronomically.

    2) Many cost saving mechanisms have been instituted to reduce the continued and expanding losses attributed to Medicare, and still Medicare loses money and its end is predicated annually (they should form a betting pool on the date of its supposed demise)
    The current projection is bankruptcy of Medicare by 2030.

    3) Mrs. Clinton has suggested that younger retirees would have to buy in to the program to some extent (yes, more fees), they “would be buying into such a big program that the costs would be more evenly distributed” This is and should not be true. Insurance carriers have huge pools of participants, but at some point there are diminishing returns. A pool can only grow so much before its size is of no real consequence. In the meantime, Medicare would be adding an additional cohort of older Americans who will need to use its services. When you have a bigger pool of less desirable risks, what you have is even more trouble.

    4) This is recycled Clinton rhetoric – under President Bill Clinton a proposal was made to allow those age 55 or above who had retired to buy in to Medicare with a cost of $400 per month (and that was then – what would they charge now?). Congress didn’t like it then, so how much more will they like it now (especially with Republicans in control) That detail, of how much the government, and the newly Medicare eligible would pay, is still missing from the proposal

    5) Expanding Medicare to younger retirees could lead to more provider cost shifting to those covered by employer plans

    6) There is discussion of how the cost of this would be offset – using Health Reimbursement Accounts to pay for the premiums – but HRAs are themselves being changed and restricted

    7) This wouldn’t be pandering to another class of voters, would it?

  • CMS Data Match – not words you want to hear – but proceed with what you see

    June 21, 2016

    CMS is the Center for Medicare and Medicaid Services – essentially, the government arm that runs Medicare. While they have been doing audits for some time, this has recently intensified and you are advised to respond when they come calling.

    Essentially, they are looking for those who are in violation of the 1984 ADEA rule which made group coverage primary for employees who are 65 and older. Some employers have given employees incentives to drop off the group plan and thus make Medicare primary. This is positively prohibited…and they are now looking to catch those who are guilty of this “crime”

    Simple solution – give us a call if it happens to you and we will walk you through the process

  • They still want the ACA to go away…a judge judges one key provision to be against the law

    June 15, 2016

    Only Congress can allocate funds to support a federal initiative. The Affordable Care Act authorizes subsidies to make coverage more affordable, authorizing the Treasury Department to make funds available. According to Federal District Court Judge Rosemary Collyer, however, the Health and Human Services Department, which carried out the ACA, “does not have the authority to spend billions of dollars on a key program under the ACA” Since Congress did not explicitly allow for such funding, “such an appropriate cannot be inferred”

    Of course, her decision will be appealed, and then we will have moved on to a new Presidental administration and…and…

  • How Much Life Insurance Do You Really Need? | CA Benefits Broker Services

    June 13, 2016

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    Marvin H. Feldman
    www.lifehappens.org

    apple and tapeSome people equate life insurance with tragedy and death. In truth, life insurance is for the living. Without it, the sudden demise of a key breadwinner could leave a family stranded without the resources to maintain their lifestyle—or even retain their home.

    Not so long ago, professionals recommended that families carry a life insurance policy with a death benefit of 10 times their annual household income. Today, however, in light of rising house prices in many parts of the country, spiraling college costs and low interest rates most advisors now recommend up to 20 times your household income.

    Unfortunately, most American families are underinsured. The gap between what households have and what they need is nearly $320,000, according to LIMRA’s study Closing the Life Insurance Gap, 2015.

    If you’d like to get a working idea of how much life insurance you may need (or how much more you may need), you can use our quick Life Insurance Needs Calculator.

    A Cornerstone of Your Financial Plan
    Life insurance is a cornerstone of your financial plan, for these reasons.

    1. It provides income replacement. For most people, their most valuable economic asset is their ability to earn a living. If you have dependents, then you need to consider what would happen to them if they could no longer rely on your income. A life insurance policy can also help supplement retirement income, which can be especially useful if the benefits of your surviving spouse or domestic partner will be reduced after your death.

    2. It covers outstanding debts and long-term obligations. Without life insurance, your loved ones must shoulder burial costs, credit card debts, and medical expenses not covered by health insurance using out-of-pocket funds. The policy’s death benefit might also be used to pay off a mortgage, supplement retirement savings, or fund college tuition.

    3. It can be used for estate planning. The proceeds of a life insurance policy can be earmarked to pay estate taxes so that your heirs will not have to liquidate other assets to do so.

    4. You can use it to support a charity of your choice. If you have a favorite charity, you can designate some or all of the proceeds from your life insurance to go to this organization.

    Read more here …

  • What they should have learned in medical school…errors now the third leading cause of death

    June 10, 2016

    The CBS Evening News reported that “medical errors are now the third largest cause of death behind heart disease and cancer” Anything we say here may be a mistake…

  • CPR & AED Training | Arrow Benefits Group

    June 9, 2016

    Tags: , , , , ,

    CPR

    Date:

    June 25, 2016, Saturday

    Time:

    9am – Noon

    Place:

    Petaluma Valley Hospital
    400 N McDowell Blvd – Burns Hall
    Petaluma, CA 94954

    Cost:

    $0 – Sponsored by Arrow Benefits Group

    Please call Andrew McNeil at 707.992.3789 to reserve your seat.  Space is limited.

    arrowCPR1

  • Some news is just odd…but the Exchange is trying to increase their odds of success

    June 7, 2016

    California lawmakers are now taking steps to allow undocumented immigrants to purchase health insurance through the Covered California Exchange. Kaiser Health News says the proposal “could engender a combustible reaction” particularly in an election year. Well, yeah.
    What is interesting is that this can be considered a play by the Exchange to increase enrollment and thus bolster their failing fortunes. It is also a politically “correct” move – or not – by the government. Who is trying to impress whom…and how does this interact with federal law?

  • Marketplace Notices Are Coming | Petaluma Employee Benefits Specialist

    June 2, 2016

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    www.thinkhr.com

    HealthMarketplaceUnder the Affordable Care Act (ACA), each Health Insurance Exchange (Marketplace) must notify employers when they have an employee who has received a government subsidy to enroll in a health plan through the Marketplace. These notices will begin being sent to employers in the coming weeks and months, either individually or in batches. Because the notice procedure is being phased in, you may or may not receive notices, even if you have employees who received subsidies through a Marketplace. Here’s what you need to know.

    Reason for Notice

    These notices, also called 1411 Certifications in reference to the pertinent section of the ACA, will be sent to employers as part of the government’s verification efforts regarding persons who received Marketplace subsidies for individual health insurance. Marketplaces want to confirm whether the individual was eligible for, or enrolled in, an employer’s health plan since those facts can affect someone’s eligibility for subsidies.

    You may receive a notice (similar to the sample found here) for each employee that received a subsidy to enroll in insurance through a Marketplace. The notice only informs you that the employee was granted a subsidy — it is not a notification that you have been assessed any penalty. Under the ACA’s play or pay rules, penalties may be assessed later by the Internal Revenue Service to applicable large employers for failing to offer full-time employees affordable minimum value coverage; however, play or pay penalties, and notice of them, are a separate process entirely.

    What You Should Do

    • Even if you do not believe that any of your employees obtained individual coverage through a Marketplace, be on the lookout for these notices because you have 90 days from the date of the notice to file an appeal, if necessary. Notices may go to a subsidiary instead of the parent company or to a particular worksite instead of the employer’s main office, depending on the information the employee provided to the Marketplace. Alert all departments and worksites to watch for mail in envelops from a government agency or insurance Marketplace.
    • Important:Keep these notices confidential because employers are prohibited by law from discriminating or retaliating against employees who may receive subsidies. Consider segregating functions so staff involved in reviewing notices is separate from staff involved in employment or benefit plan decisions.
    • Establish your audit process for reviewing any notices you may receive and for filing appeals when appropriate. Confirm that the information is correct based on your employment and payroll records. If you are an applicable large employer subject to the ACA’s play or pay rules, you also should check if the employee was a full-time employee and, if so, whether you had offered affordable minimum value coverage to the employee. Read more about the notice and appeal process here.
    • File an appeal within 90 days of receipt of the notice if any of the information is incorrect. To do this, be sure to retain the notice and follow the directions for appeal. Remember that these notices will not advise you of any penalties on large employers, so appeals at this stage are to correct any mistakes in employment information. In addition:
      • If you are a small employer and not subject to the ACA play or pay rules, you are not impacted directly but your appeal may alert the Marketplace that the individual was enrolled in your group health plan and not eligible for subsidies.
      • If you are an applicable large employer who is subject to the ACA’s play or pay rules, you should be proactive in appealing the Marketplace’s subsidy determination if any information is incorrect. (An applicable large employer generally is one that employed an average of 50 or more full-time and full-time-equivalent employees in the prior calendar year. Related employers in a controlled group are counted together.) Although Marketplaces cannot access play or pay penalties, your appeal may help establish the facts and head off later penalty action by the IRS.

    Read more here…

  • Some subsidies end, and thus there is no end in sight to medical premium increases

    June 1, 2016

    The good news is that this applies to individual plans only. The bad news is that it is going to happen. Health insurers are expected to significantly increase premiums for ACA plans due to massive losses. These losses have been offset by a government reinsurance subsidy, which ends this year. Without the subsidy, the losses are direct…and directly coming back to affect policyholders. Evidence is based on initial rate filings, but these are only preliminary. The government, of course, downplays their significance…we shall see.

  • Digital Eye Strain and Vision Benefits | Employee Benefits California

    May 30, 2016

    Tags: , , ,

    By Geoff Mukhtar
    Communications Manager at United Benefit Advisors

    GlassesEyeChartEighty-one percent of employees have elected vision benefits in 2016, up from 78 percent last year, according to Transitions. This increase moved vision into a tie with dental as the second most popular benefit election behind medical.

    Digital eye strain, which is detailed by a report from The Vision Council, could be a contributing factor to the trend. Some of the Council’s findings include:

    • 65 percent of Americans report experiencing symptoms of digital eye strain, including 70 percent of women.
    • Nearly 90 percent of Americans use digital devices for two or more hours daily and nearly 60 percent do so for five or more daily.
    • 77 percent of those who suffer from digital eye strain use two or more devices simultaneously, with women more likely to do so than men. In comparison, only 53 percent of those who use only one device at a time suffer from digital eye strain.

    The symptoms of digital eye strain include neck/back/shoulder pain, headache, blurred version and dry eyes. In addition to the health concerns they bring, these symptoms can also negatively impact employee productivity.

    An article in Employee Benefit News by Dr. Linda Chous, UnitedHealthcare’s chief eye care officer, titled “Digital Eye Strain Among Workers Causing Employers to Rethink Vision Benefits,” has several prevention tips for reducing digital eye strain in your employees:

    1. Employees should keep computer screens about 30 inches away from their eyes.
    2. Employees should rest their eyes every 15 minutes.
    3. Employees should blink frequently, which reduces dry eye and helps maintain eye health.

    Chous also advocates for regular eye exams, for reasons beyond digital eye strain. She writes, “The eyes are also a window to overall health. Regular eye exams play an important role in identifying and managing serious, chronic conditions, including diabetes, high cholesterol, hypertension, multiple sclerosis and some tumors.”

    She goes on to note how some employers are now “embracing an integrated approach to vision and medical benefits that support patients and health care professionals with information, decisions and outcomes.” These programs have a variety of features, such as:

    • Eye care practitioners can be encouraged to code claims with chronic condition categories, and patients with those diagnoses can be automatically referred to disease management programs.
    • Eye care practitioners can be notified of patients with at-risk conditions during the exam authorization process.
    • Patients with certain conditions (such as diabetes and hypertension) can be notified with a phone call about the importance of their annual eye exam.
    • For patients who may have chronic conditions, eye care practitioners can use specially designed online forms to refer them to primary care providers or specialists.

    As an employer, you have the ability to help protect your employees’ eye health–which, in turn, influences their overall health and productivity. And, with adults under 30 experiencing the highest rates of digital eye strain (73 percent) of all age groups, taking actions and providing benefits that protect employees’ eye health is likely to become even more important.

    Read more here …

  • Moving toward millennial status – how to engage them on benefits (so says the survey)

    May 27, 2016

    Consumer Health Mindset Study 2016 says 56% of millennials think employers should direct participants to facilities or providers for the most appropriate care or cost, compared to 40% for all other generations.  Nearly a third of millennials who responded say they support employers imposing consequences for less than healthy conditions compared to 21% of Gen Xers and 14% of baby boomers

  • Same-Sex Marriages and Group Health Benefits | Benefits Broker Petaluma

    May 26, 2016

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    By Danielle Capilla
    Chief Compliance Officer at United Benefit Advisors

    WeddingRingsFrom 2013 to 2015, a series of Supreme Court cases and government updates have changed the landscape of the way employers must consider same-sex spouses in relation to employee benefits.

    Most recently, in June 2015, the Supreme Court ruled in Obergefell v. Hodges, that the 14th Amendment requires a state to license a marriage between two people of the same sex, and to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out of state. Prior to the Supreme Court’s decision in Obergefell v. Hodges, approximately two-thirds of states recognized same-sex marriage (whether performed within the state or another state or country that recognizes same-sex marriage).

    In February 2015, the Department of Labor (DOL) issued an updated definition of “spouse” under the Family and Medical Leave Act (FMLA) to make compliance easier, and defined “spouse” as a husband or wife, which refers to a person “with whom an individual entered into marriage as defined or recognized by state law.” The governing state law is that of the celebration state, or where the marriage took place. This definition was set to go into effect across the United States on March 27, 2015, but litigation in Texas, Arkansas, Louisiana, and Nebraska prevented the new rule from going into effect in those states immediately. After the ruling in Obergefell, which severely undermined the arguments of the objecting states, the injunction was dissolved.

    In June 2013, the Supreme Court ruled that the Defense of Marriage Act (DOMA), which provided that, for federal law purposes, marriage could only be between a man and a woman, was unconstitutional.

    Implication for Employers

    For individuals with a same-sex spouse (validly married in a state allowing same-sex marriage) who reside in a state that did not previously recognize same-sex-marriage, the ruling in Obergefell likely triggered a change in status event for Section 125 plans. That is because, as of June 26, 2015, the individual was considered married under state law, whereas they were not the day before.

    As a result of these changes, employers need to review the eligibility requirements in their group life and health plans, Section 125 plans, and health reimbursement arrangements. The Employee Retirement Income and Security Act (ERISA) requires employers to administer their plans according to the terms of the plan, which means that the plan’s definition of a covered spouse is key. A plan that covers “spouses” or “lawful spouses” must offer coverage to same-sex spouses.

    While most practitioners agree that fully insured plans are required to cover same-sex spouses, employers should contact their carrier to verify this approach.

    Download UBA’s Compliance Advisor, “Same-Sex Marriages and Group Health Benefits” for comprehensive information on tax treatment of same-sex spouses, FMLA administration, and whether self-funded plans may exclude same-sex spouses.

    The IRS has issued Frequently Asked Questions that employers and employees may also find helpful. The questions and answers that relate to benefits begin with Question 10.

    Read more here …

  • They agree to disagree but they do keep disagreeing

    May 24, 2016

    The Congressional Budget Office has new numbers and they are dismaying, but Health and Human Services is pointing to the success of the Affordable Care Act, stating that ACA premiums have increased less than anticipated last year with 8% on average. When the tax credits for individuals are factored in, the net increase is only 4% – but wait, isn’t that our money?

  • Dental Insurance and Preexisting Conditions | CA Benefits Broker

    May 23, 2016

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    By Barb Nefer
    www.livestrong.com

    toothInsurance is designed to offset major expenses in various life areas. For example, a homeowner’s policy covers damage to your house, while car insurance pays for repairs after an auto accident. Medical policies do not cover dental work, but you can get dedicated dental insurance. Dental policies vary, and many limit or exclude coverage for pre-existing conditions.

    Definition

    Dental insurance is a type of insurance that pays for dental care. It covers preventative procedures like cleanings, and the Dental Insurance Helper information site states it often covers problems like cavities or chipped teeth and restorative work like crowns and bridges. Coverage levels may vary depending on the type of procedure. For example, a plan might pay 100 percent of cleanings, 80 percent of fillings and 50 percent for restorations. You may get dental insurance through your employer or purchase it on your own.

    Limitations

    Dental insurance often has limitations on coverage for pre-existing conditions, according to the Animated Teeth dental information site. The term “pre-existing condition” usually refers to major work rather than minor problems like cavities or deep fillings that eventually need to be crowned. For example, replacement of a missing tooth would be considered a pre-existing condition if it was lost or removed before you joined the insurance plan. The insurance might also exclude replacement of crowns, bridges and dentures unless they are older than a certain number of years.

    Considerations

    Certain conditions have a waiting period for coverage. The insurance plan will pay for them once that period has passed. Animated Teeth explains this commonly applies to procedures like fillings, root canals or crowns. Initially your dental insurance might pay only for cleanings, X-rays and other preventative treatments. It will pay for the other work after a predetermined period, which typically runs between six months and a year. Sometimes there will be immediate coverage, but the payment level will be lower until the designated time period passes.

    Timeframe

    Your dental insurance benefits are often capped at an annual limit. You may pass the six-month waiting period for coverage of expensive procedures or root canals, but they may not be covered fully because of the cap. For example, your plan may only pay $2,000 per year for restorations. You are liable for $2,000 if you get two crowns that cost $3,000 each. You may be able to avoid this restriction by delaying some work until the next annual period begins.

    Alternatives

    You may have some payment alternatives for pre-existing conditions if your dental insurance does not cover them. Many dental offices work with finance companies specializing in dental care loans. You can borrow funds to cover the treatment if your credit is reasonably good. You also can purchase a dental discount plan. This is different than insurance because it does not pay directly for treatment. It pre-negotiates discounts on various procedures. Members who use participating dentists pay the lower rates. The Dental Plans information site explains most plans do not have caps or pre-existing condition exclusions. Discount plans have an annual fee, so you do not have to renew the plan once your work is completed.

    Read more here …

  • Clarification of reimbursement for spouse’s medical insurance

    May 20, 2016

    A recent Chief Counsel Advice memo explains when an employer can reimburse employees on a tax free basis when the coverage is provided by the spouse’s employer. It follows common sense – you can only have one tax free event. Thus, if a spouse has coverage with another employer and pays the premium on an after tax basis, then the employee’s employer may reimburse the employee for the spouse’s coverage on a tax free basis. There was some doubt about whether a reimbursement was possible at all, but this allows it – ONLY where there is a taxable event on one side, erased by the tax free event on the other. This is also meant to apply to situations where a Health Reimbursement Account pays for premiums.

  • Mileage update by IRS

    May 18, 2016

    Your accountant has been a little busy, so here’s an update on employer vehicles used by employees. For 2016, the maximum values for which the cents per mile rule may be used are $15,900 for passenger automobiles and $17,700 for tucks or vans

    The standard mileage for use of an automobile to obtain medical care will be 19 cents for 2016, a drop of 4 cents from 2015

  • Will individual rates continue to increase? Oh, yes, for clear and obvious reasons

    May 16, 2016

    Carriers selling individual plans now have a problem due to the expiration of two key provisions of the Affordable Care Act which are due to expire in 2016. These are collectively called “The Three R’s” – risk adjustment, reinsurance and risk corridors. Without these additional protections, carriers will be forced to look directly at their losses on this book of business and adjust their rates accordingly.

  • Even the Blues are singing of trouble in health care costs

    May 10, 2016

    The national Blue Cross Blue Shield Association, which represents 36 of the plans covering 105 million people, released a study stating the following:

    1) Newly enrolled members in individual health plans have higher rates of many major or potentially expensive diseases (e.g. hypertension, diabetes, depression and others)

    2) Newly enrolled members received significantly more medical care in 2014 and 2015 on average than those who had been on the Blues plans prior to 2014

    3) New enrollees used more medical services across all sites of care

    4) Medical costs of care for the new individual market members were on average 19% higher than employer based group members in 2014 and 22% higher than in 2015

    They won’t be singing the Blues of course – they will simply raise their rates

  • The hits keep on coming and jury is still out…mixed metaphors abound in judging Obamacare

    May 4, 2016

    The Congressional Budget Office can’t seem to make up its non partisan mind.  In its latest report they have shown several measures by which national health care reform is failing:

     

    • The enrollment goals for the exchanges have been reduced from 22 million to 18 million
    • The average subsidy was projected to be $4,040 but it is not $4,240
    • Subsidies are expected to average $4,550 next year, mostly due to premium increases
    • More people may go on the rolls as employer provided coverage has displaced nearly 9 million when the original projection was 3 million
    • Medicaid expansion has forced the Medicaid cost projection to increase $146 billion due to enrollment rising by 2 to 4 million more than originally projected
    • The number of uninsured was supposed to drop 32 million, but is revised to 24 million
    • The employer mandate will raise $12 billion less than they said last year, the individual mandate penalty $6 billion less and the Cadillac tax $28 billion less

     

    So what of the promise not to add anything to the deficit?  Seems unlikely now.

  • 6 Reasons Single People May Need Life Insurance | Employee Benefits Petaluma

    April 25, 2016

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    By Maggie Leyes
    www.lifehappens.org

    moneybankMany people make the assumption that life insurance is for married couples and those with kids. While it is true that not all single people need life insurance, there are a number of reasons when it can make (really) good sense.

    1. You have student loan debt. Many people assume that your debt dies with you, but that’s not always the case. While the loans through the federal government are discharged (aka forgiven) if you were to die, personal loans that have a cosigner are generally not. That means if your parents, for example, co-signed your student loan through a bank, they would be responsible for paying the rest of the loan if something happened to you. There are instances when the bank has called for the loan to be paid in full immediately following a death. You don’t want to leave your parents dealing with grief and loan payments.

    2. You’re living with your significant other. When you’re living together, a lot becomes shared financial responsibility. Consider this example: You need both your incomes to meet the mortgage or rent where you’re living. Have you thought about what happens if one of you dies prematurely? Would the other partner have to sell up? Find a new place to live immediately? And this is just one example of many shared financial responsibilities couple have. Adequate life insurance is an easy answer to those questions.

    3. You plan on having kids … someday. It may not be now, but when kids do come, so do the expenses and bills. According the USDA, it costs $245,340 to raise a child to age 18, and that’s without factoring in the cost of college. Getting life insurance in place now means you have coverage in place for when you do have a child. Plus, you protect your insurability for the future. … and that leads us to the next reason.

    4. You’re young and healthy. Age and health are two major drivers of how much you’ll be paying for life insurance. Why not lock in a low price if you have both of those working for you? Did you know that a health 30-year-old can get a 20-year $250,000 term life insurance policy for about $13 a month? Doable, right? Don’t wait until a health issue or age puts life insurance out of your reach.

    5. You know you’ll be taking care of family members in the future. This may mean aging parents or perhaps you have a special-needs sibling that you help care for and support financially. What would happen to them if something happened to you and your support disappeared? Life insurance can ensure that there is money in place to fund those needs into the future. This is where it might be wise to consider a permanent life insurance policy (one that’s there for your lifetime, as long as you pay your premiums).

    6. It will pay for your funeral. No one likes to think about such things, but the truth is if you die, someone will have to pay for your funeral. You wouldn’t want to leave your parents, partner or other family members struggling with grief as well as paying for a funeral and burial, which can cost an average of $7,100.

    Read more here …

  • Seven Common Mistakes That Could Trigger a DOL Audit | Benefits Broker Petaluma

    April 21, 2016

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    By Bill Olson
    Chief Marketing Officer at United Benefit Advisors

    DOL-CTA-BLOGNot many things incite more fear than receiving a notice that you’re about to have an audit, especially from the Department of Labor (DOL). The DOL is a cabinet-level department of the U.S. federal government responsible for occupational safety, wage and hour standards, unemployment insurance benefits, re-employment services, and some economic statistics. It is headed by the U.S. Secretary of Labor.

    What can trigger a DOL audit? Usually it’s one of two things — either a complaint, which leads to an investigation, or it’s totally random. While a DOL audit may or may not be triggered by the following, there are certain ways in which employers expose themselves to unnecessary risks:

    1. Not submitting Form 5500 reports on time if they have 100 or more participants
    2. Not having Summary Plan Descriptions (SPDs) for each Employee Retirement Income Security Act (ERISA) covered benefit or not using an SPD wrap document. Read more on the perils of neglecting written policies and procedures.
    3. Not completing all the various annual employee notifications such as Medicare Part D, Children’s Health Insurance Program (CHIP), Mental Health Parity Act (MHPA), Newborns’ and Mothers’ Health Protection Act (NMHPA), Women’s Health and Cancer Rights Act (WHCRA), Patient Protection and Affordable Care Act (ACA), Health Insurance Portability and Accountability Act (HIPAA), Health Exchange, etc.
    4. Not generating Summary of Material Modification (SMM) whenever there are material changes to benefits and then not saving these SMMs for future reference
    5. Not keeping Section 125 Premium Only Plan (POP) and flexible spending account (FSA) documents current and accurate
    6. Not filing Form 1095/1094 reports in a timely fashion, or if having conflicting information on these reports
    7. Not properly following the controlled group rules for owners of multiple organizations

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

    Read more here…

  • Should Failed Co-ops be responsible for paying back what they borrowed when they’re broke?

    April 20, 2016

    The government lent them $1.2 billion. They went broke – 12 of them. The money was spent and cannot be returned. Congressman Rob Portman said “these failed CO OPs were a costly experiment gone wrong, and real people got hurt – including the more than 700,000 Americans who lost their health plans” while CMS Acting Administrator Andy Slavitt said the CO OPs “challenges should be viewed as a small business startup problem” rather than a problem of the program itself (of course not – only 12 of the 23 went broke, spending half the total government loan) Senate Republicans have now gone on record saying they want the CO-Ops to pay back the money – with what?

  • Group Healthcare Premiums by State: How does your plan stack up? | California Employee Benefits

    April 19, 2016

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    By Bill Olson
    Chief Marketing Officer at United Benefit Advisors

    We recently highlighted the top five best and worst states for group health plan costs. See below for your state’s average monthly premiums and read our breaking news release with the cost findings by industry.

    2015HealthcarePremiumByState

    To quickly benchmark your plan by industry, region, or employer size, download our Quick Check Benchmarking Tool.

    UBA’s Health Plan Survey analyzes a wide range of health care costs trends. To comprehensively benchmark your exact plan to your peers, contact a UBA Partner near you to run a custom benchmarking report.

    For detailed findings from our Health Plan Survey, view the Executive Summary, or download our free highlights.

    For more information, please click here…

  • What doesn’t control – what does Medicare require and not?

    April 15, 2016

    An employee was on a medical leave and considered able to return to active employment.
    She had been receiving benefits under her employer’s medical plan rather than Medicare.
    In this instance, she did not receive benefits from the plan, which stated that Medicare was to be the primary carrier, contraindicated by previous claims payment. The court, however, held that while someone in “current employment status” would normally have the plan be the primary payor, they also said that such status does not extend beyond six months, and therefore the plan was correct in denying the claim.

  • What controls – SPD or plan document – court decision says it is the plan document

    April 12, 2016

    In Apollo Education Group Inc. vs. Henry (Arizona) the company sought to recover damages from a third party paying due to an accident. The plan participant asserted that the plan had no right to reimbursement because the formal plan document did not contain any reimbursement provisions. The plan contended these rights were contained in the Summary Plan Description.
    The court said the plan document was the controlling piece here. “The court rejected the plan’s argument that the documents were effectively one and the same due to the incorporation by reference, pointing to an SPD provision specifying that the formal plan document would govern any conflict as evidence that the documents were distinct

  • Changes, more changes – to the ACA – premiums may steady, but not the total cost

    April 8, 2016

    The maximum out of pocket cost allowed to be charged by the health plans under the ACA will be adjusted to $7,150 for an individual and $14,300 for a family. The current levels run a bit amok, tending from $6,200 to $6,500. The increase is substantial – will rates go down? (don’t hold your breath)

  • North Bay employers learn new language of Affordable Care Act compliance | Arrow Benefits Group

    April 7, 2016

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    BusinessJournalhttp://www.northbaybusinessjournal.com

    North Bay employers learn new language of Affordable Care Act compliance
    Interview with Andrew McNeil

     

    “We are still getting new clients, people we should have been talking to about this a couple of months ago,” said Andrew McNeil, principal, Arrow Benefits.

    McNeil’s advice to employers is to track employees on a monthly basis. “Then their records will be in better shape,” he said.

    Penalties for non-compliance with the mandate are $2,000 per employee. As long as employers make a good faith effort to file, however, the IRS has said they would be lenient and not issue a fine.

     

    Read the entire article here

    North Bay Business Journal – April 2016

  • Inflation adjustments…the ACA continues to change

    April 1, 2016

    The $2,000 excise tax is adjusted to $2,160 for the year 2016
    The $3,000 excise tax is adjusted to $3,240 for the year 2016
    The definition of affordability is raised to 9.66% of annual wages

  • They’ve taxed our resources so we must tax them which will be a trying and taxing task

    April 1, 2016

    For years, the four major California health carriers – Health Net, Kaiser, Blue Shield and Anthem Blue Cross – have either partly or completely avoided the mandatory 2.35% state premium tax on collected premiums. The companies claim to be “health service plans” because doctors are required to assume financial risk and that they are nothing like CIGNA or Aetna. Uh huh…needless to say health care and consumer advocates disagree (if it walks like a duck, etc)
    There is now a court case to bring the carriers to task…with the suit just being heard at the end of January. Governor Brown’s administration, however, has sided with the plans in this case, despite his pledge to continue balancing the budget.

  • They can have it but you can’t – third party subrogation is not available to plan administrator

    March 30, 2016

    The United States Supreme Court decided in Montainile v. Board of Trustees of the National Elevator Industry Health Benefit Plan that a plan administrator may not bring a subrogation claim against a participant whose third party settlement is dispersed into non-traceable items.
    The decision is actually not that clear cut. The plaintiff had filed a negligence claim for uninsured motorist’s insurance, obtained a settlement of $500,000, but the trustees of the plan did not file their claim within the time limit set by the plaintiff’s attorney…and thus were denied reimbursement. The court upheld original decisions to deny the payment, mainly because of the timing issue.

  • California Employment Law Update – March 2016 | Employee Benefits Petaluma

    March 28, 2016

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    www.thinkhr.com

    Amended FEHA Regulations

    californiaCalifornia has amended its Fair Employment and Housing Act (FEHA) regulations. The FEHA prohibits harassment and discrimination in employment because of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, mental and physical disability, medical condition, age, pregnancy, denial of medical and family care leave, or pregnancy disability leave.

    Among the more notable changes in the amended regulations is the requirement that employers with five or more employees have a written policy against unlawful harassment, discrimination, and retaliation in the workplace that:

    • Is in writing.
    • Lists all current protected categories covered under the FEHA.
    • Indicates that the FEHA prohibits co-workers and third parties, as well as supervisors and managers with whom the employee comes into contact, from engaging in conduct prohibited by the FEHA.
      • Creates a complaint process to ensure that complaints receive:
      • An employer’s designation of confidentiality, to the extent possible;
      • A timely response;
      • Impartial and timely investigations by qualified personnel;
      • Documentation and tracking for reasonable progress;
      • Appropriate options for remedial actions and resolutions; and
      • Timely closures.
    • Provides a complaint mechanism that does not require an employee to complain directly to his or her immediate supervisor, including, but not limited to, the following:
      • Direct communication, either orally or in writing, with a designated company representative, such as a human resources manager, EEO officer, or other supervisor; and/or
      • A complaint hotline; and/or
      • Access to an ombudsperson; and/or
      • Identification of the Department of Fair Employment and Housing and the U.S. Equal Employment Opportunity Commission (EEOC) as additional avenues for employees to lodge complaints.
    • Instructs supervisors to report any complaints of misconduct to a designated company representative, such as a human resources manager, so the company can try to resolve the claim internally. Employers with 50 or more employees are required to include this as a topic in mandated sexual harassment prevention training, pursuant to § 11024 of the regulations.
    • Indicates that when an employer receives allegations of misconduct, it will conduct a fair, timely, and thorough investigation that provides all parties appropriate due process and reaches reasonable conclusions based on the evidence collected.
    • States that confidentiality will be kept by the employer to the extent possible, but does not indicate that the investigation will be completely confidential.
    • Indicates that if at the end of the investigation misconduct is found, appropriate remedial measures will be taken.
    • Makes clear that employees will not be exposed to retaliation as a result of lodging a complaint or participating in any workplace investigation.

    Employers must disseminate their policies by one or more of the following methods:

    • Printing and providing a copy to all employees with an acknowledgment form for the employee to sign and return;
    • Sending the policy via email with an acknowledgment return form;
    • Posting current versions of the policies on a company intranet with a tracking system ensuring all employees have read and acknowledged receipt of the policies;
    • Discussing policies upon hire and/or during a new hire orientation session; and/or
      Any other way that ensures employees receive and understand the policies.

    Any employer whose workforce at any facility or establishment contains 10 percent or more of persons who speak a language other than English as their spoken language must translate the policy into every language that is spoken by at least 10 percent of the workforce.

    The amended regulations go into effect on April 1, 2016.

    View the Amended Regulations

    Read more here …

  • 2017 Benefit and Payment Parameters Rule and HIP FAQ | Health Insurance CA

    March 24, 2016

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    By Danielle Capilla
    Chief Compliance Officer at United Benefit Advisors

    2017FeeThe 2017 Benefit and Payment Parameters (BPP) rule, an annual rule that sets policies relating to the Patient Protection and Affordable Care Act (ACA), has been released by the Centers for Medicare and Medicaid Services (CMS). The 2017 rule contains numerous updates, including the annual open enrollment periods for the individual market, rating areas for small group health plans, guaranteed availability and renewability, broker and agent registration to assist consumers with applying for Exchange coverage, the employer notice system when its employees are determined to be eligible for a tax credit, and exemptions to the individual mandate. The rule also set cost sharing limits for 2017.

    In conjunction with the rule, the Department of Health and Human Services (HHS) released an FAQ on the implementation of the 2017 moratorium on the Health Insurance Provider (HIP) fee. The FAQ states that insurers will not be charged the HIP fee for the 2017 fee year, based on 2016 information. Insurers should adjust premiums downward as a result.

    Finally, HHS also released a bulletin that extends transitional plans from expiring on October 1, 2017, to the end of 2017 to allow individuals to enroll in an ACA-compliant plan beginning in calendar year 2018, rather than having to account for October through December 2017 prior to the new calendar year.

    Cost Sharing Limits

    The rule set the 2017 maximum annual limitation on cost sharing at $7,150 for self-only coverage and $14,300 for other than self-only coverage.

    Open Enrollment – Exchange

    Open enrollment for 2017 and 2018 will be from November 1 until January 31. No new special enrollment periods are being added, and no current special enrollment periods are being eliminated.

    Employer Notice

    Employers will be notified when an employee actually enrolls in a qualified health plan through the Exchange. Currently employers are notified when an employee is determined to be eligible for federal financial assistance. The Exchange can either notify employers on an employee-by-employee basis or for groups of employees who enroll with financial assistance. The notice employers receive will indicate that the law prohibits retaliation against employees who receive financial assistance on the Exchange.
    For more information on standardized plans, small employer definition, reinsurance fees, rating areas, guaranteed availability, and exemptions, download UBA’s ACA Advisor, “Benefit and Payment Parameters Rule and HIP FAQ”.

    Read more here …

  • The coverage is mandatory but what if they don’t want it – rules on opt out arrangements

    March 23, 2016

    Many organizations provide employees the opportunity to waive their right to the offered medical coverage and receive taxable reimbursement in return. But how does that get reported on the newly required 1095-C form? IRS Notice 2015-87 has now stated that all such arrangements in place prior to December 17, 2015 need not do any reporting of this option. The notice does provide that such payments will be added to the employee’s cost of coverage for purposes of determining the employee’s eligibility for a subsidy on the Exchange and whether the employee might be exempt from a penalty under the individual mandate. The calculation for affordability will, however, be the amount the employee receives for the opt-out plus the amount the employee would have had to pay in the absence of the opt-out provision.

    All this is true…of course…until the final regulations are issued, so…

  • Top Talent Prefers Being Recruited Via Their Mobile Device | Petaluma Benefits Broker

    March 22, 2016

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    By Bill Olson
    Chief Marketing Officer at United Benefit Advisors

    TopTalentIf you haven’t noticed, newspapers are shrinking in size. Fewer people, especially the younger demographic of 18- to 40-year-olds, read them and this especially applies to when they’re searching for jobs. Employers who continue to use only the older methods of recruitment – classified ads and job boards – may not attract the most coveted applicants due to them not seeing the posting, or worse, feeling that the company looking to fill the position is old-fashioned and not technologically up to date.

    According to an article on the website of Society For Human Resource Management titled, “The Most Sought-After Talent Prefer Mobile Recruitment,” almost 70% of applicants labeled as “high-potentials” were attracted more to companies with mobile recruiting options versus just over 50% of other applicants. Another comparison of high-potentials shows that about 75% use mobile devices when searching for jobs while only 40% of other potential employees do.

    Because most people tend to do everything on their tablets or smartphones, it makes sense that searching for a job would just be another addition to that list. The article bears that out, noting that convenience is one of the primary reasons that high-potentials do this. Besides convenience, another benefit noted is that information can be obtained quickly via mobile device and high-potentials can respond faster to job postings.

    The article states that everyone, at some point, will use a mobile device when job hunting, but those who are high-potentials take it to the next level. Everything from researching companies, receiving job alerts, filling out job applications, and even taking assessments was more likely to be done by a high-potential candidate on a mobile device. Furthermore, high-potentials were nearly two times as likely to prefer text messages and communication through social media (e.g., LinkedIn).

    So, what’s the message to employers? If you want to attract top talent, then you must utilize mobile recruiting. Employers can build such a program by integrating all their job search functions, such as listings, applications, assessment tests, etc. on a mobile platform. They also need to make it simple and streamlined. As the article states, you don’t want a candidate who’s a high-potential to skip through your job recruiting process due to frustration.

    Read more here …

  • Case Study: Using Data to Identify Healthcare Savings for a Mid-size Manufacturer | California Employee Health Insurance

    March 16, 2016

    Tags: , ,

    Historically, companies have struggled with the best way to package and deliver benefits to attract talent and retain staff. Today, companies understand that they need to leverage a variety of solutions to provide meaningful healthcare coverage, promote wellbeing and mitigate cost. UBA Partners offer innovative product and service solutions to identify medical spend waste and improve efficient spend, allowing employers to reinvest in the correct resources that will improve employee health. For one mid-sized manufacturer, UBA Partner LHD Benefit Advisors used Vital Incite risk scoring tools to coordinate efforts between the employer HR and C-suite, the advisor and the population health consultant.

    Key information unique to this employer:

    • Japanese owned and multiple nationalities employed with little knowledge of the American health care system other than in the HR team
    • Manufacturing company with predominately male employees
    • Onsite clinic opened April 2014 with initial services including primary care, physical therapy, massage therapy, lab, nurse health coaching
    • Increase in medical plan participation due to growing workforce and rich medical plan offered at a low cost to employees.

    Value of what was delivered:

    • Improved risk migration of high/very high risk members (total population and same cohort)
    • Improved efficiency of medical plan utilization and improved unit cost
    • Improved care coordination (decreased ER visits, decrease in multiple medications, increase in number of members with a primary care physician)
    • Targeted outreach from onsite clinic to improve overall health of members

    Problem 1: Increase in medical plan spend

    Prior to the clinic opening, the medical plan saw utilization of ER visits and imaging services along with associated costs above benchmark. The number of covered lives (employees and spouses) was also increasing as well as the average employer paid amount per member due to high cost utilization of an unmanaged workforce. Current medical plans were two low deductible, PPO plans with little consumerism and offered at low cost to employees.

    Problem 2: Low onsite clinic utilization

    The first six months the clinic was open showed low utilization for several services resulting in the employer reducing services effective January 1, 2015, through March 31, 2015, to help reduce costs. The suspended services included patient advocacy, evening clinic hours, reduced health coaching hours and physical therapy. In order to fully recognize the benefit of an onsite clinic, employees needed easier access to the clinic during working hours, a better understanding of services provided (i.e. labs, medications and nurse coaching) and targeted outreach to key members.

    Problem 3: Increase in risk migration of member population

    Data revealed employees carried the majority of the high/very high risk, and risk migration from 2013 to 2014 showed a neutral to slight increase (Figure 1). Further analysis showed a higher than average percentage of untreated chronic conditions, including diabetes, high cholesterol and high blood pressure. Cost information from a disease perspective showed the potential impact specific disease programs within the clinic could have on employee health and medical cost.

    Risk Distribution - high to very high riskRisk distribution bar chart

    Analysis of Avoided Costs

    The data reported from the population health team was instrumental in developing a strategy to have an impact on the member population and a successful onsite clinic. Once there was an understanding of the prospective risk and impact of chronic disease management by the employer C-suite, the HR team gained support for the initiatives developed by the population health and HR teams. A key illustration (Figure 2) to this point was showing a cost avoidance calculation for key services provided by the onsite clinic.

    Avoided cost calculation

    To learn about the recommended solutions, the implementation strategies, and how data was used to measure results, download the full case study.

    Read More…

  • What happens to benefits eligibility during an unpaid leave of absence? | Petaluma Employee Benefits

    March 14, 2016

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    By Danielle Capilla
    Chief Compliance Officer at United Benefit Advisors

    Question mark at the computer key

    Question mark at the computer key

    Question: If an employee of an applicable large employer takes an unpaid leave of absence (not Family and Medical Leave Act), what happens to their benefit eligibility during that time?

    Answer: The answer depends on whether the employer is using the measurement and lookback method of tracking employees or the monthly method.

    Measurement and lookback: If the employee is on an unpaid leave of absence and in a stability period, the employee must be offered coverage through the stability period. When the employee’s hours are calculated during the contemporaneous measurement period, the leave of absence will count as zero hours of service. If an employee declined coverage for a stability period, and then has a leave of absence that is less than 13 weeks, upon return the employer is not obligated to make a new offer of coverage to the employee.

    Monthly: The employee would not be credited with hours of service. Once the employee drops below 30 hours per week for the month, the employer does not need to offer coverage.

    Employers should note that unpaid FMLA is handled differently and special rules apply for educational institutions.

    Leaves of absence can make it difficult for an employer to determine if or how an employee counts toward the applicable large employer (ALE) threshold of 100, as well as determining if an employee is considered full time and must be offered coverage. Request UBA’s ACA Advisor, “Perfect Attendance! How to Handle Leaves of Absence under the ACA” which defines service hours, exceptions, methods for counting hours, FMLA, USERRA, and jury duty, unpaid leave, layoffs, disability, conveying policies, determining ALE status, and crediting hours to employees.

    Read more here …

  • The Debates Continue – and on health care it is getting nasty

    March 11, 2016

    We stay out of the overall debate – who wins, who loses is less a concern than what works on a practical basis and how it will get through Congress, then the administrators and the market, etc. It is a little weird, though…as Donald Trump is saying the same thing as Bernie Sanders where it concerns health care (Single Payer is our prayer, or something like that). Hillary Clinton has taken aim at Sanders (so is it also a swipe at Trump?), telling supporters at a rally that he would replace their health insurance with something more expensive. “He wants to have a new system that would be quite challenging because you would have to give up the insurance you have now, and it would cost a lot of money”

  • Life Insurance & Sports | CA Employee Benefits

    March 10, 2016

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    www.lifehappens.org

    BOOTSQuestion: “Will my sport cause me problems in purchasing new life insurance?”
    Answer: in most cases no, but there are some hobbies that may be a problem for the underwriters in the insurance company.

    Here is a list of seven high-risk sports that are problematic when it comes to getting life insurance.

    1. Ice climbing. Unlike their mountain-climbing counterparts, ice climbers are in constant danger of causing a self-inflicted stab wound from one of their razor-sharp crampons, which is their No. 1 source of injury. Not to mention the possibility that the ice they are climbing may crack and take them down with it.

    2. Free running. Free running is jumping from roof to roof at maximum speed. No ropes, no parachute, no insurance. Free running is practiced in urban areas that feature lots of railings and concrete walls for participants to jump, flip and tumble over in an acrobatic fashion. I call it run, jump, bleed.

    3. Base jumping. Talk about insane! I don’t like looking down from a tall building, and I certainly have no desire to jump into the unknown from any height. Yes, I can remember when I was a kid and wanted to fly like superman, but a base jumper? No way. By the way, base-jumping is illegal in the U.S., unless it’s being performed by a professional at an event, so not only will you not get insurance, but you may end up in jail.

    4. Heli-skiing. A skier is dropped from a helicopter onto fresh white powder in a remote section of the mountains, a place where there is no other way to get there. There’s a possibility of starting an avalanche or falling through an ice patch, and if you do, it may be near impossible to get rescued.

    5. Street luge. Loosely described, this is the equivalent of lying on your skateboard and having your friend push you down Lombard Street in San Francisco. Riders on street luge boards can reach 70 mph.

    6. Big-wave surfing. Surfers dream of riding the “big” wave and are willing to travel around the world to catch one, and by big I mean the 50-foot monster. What are the risks? Broken bones, drowning, shark attacks. No thanks. I will watch this on TV.

    7. Cliff diving. Have you thought about jumping off a 90-foot cliff? Into water that will feel like concrete when you hit it? The biggest issue is not hitting the water, because you may hit the side of the cliff on the way down; or slam against the rocks in the ocean below you. You could also break a hip or incur a spinal cord injury by landing feet first in the water. If it was me, I would die of a heart attack on the way down.

    So yes, there are sports for which only the very brave or foolish should participate in, but if you do, don’t expect to buy preferred-rated life insurance or perhaps any life insurance.

    Read more here …

  • Hacking of health care records coughs up a lot more detail – an 11,000% increase

    March 8, 2016

    I can’t count that high but NBC News announced that “experts say health care record hacking is skyrocketing” and this means that “roughly one out of every three Americans” have had their healthcare records compromised, which are then sold on the dark web, where complete health care records can go for $60 each. I’m sure I bring the average down, but…

  • Best and Worst Health Savings Accounts for Singles, Families | Benefits Broker Petaluma

    March 7, 2016

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    By Bill Olson
    Chief Marketing Officer at United Benefit Advisors

    We’ve just released the latest findings from the UBA Health Plan Survey related to how health reimbursement arrangements (HRAs) and health savings accounts (HSAs) are being used among employers. (Spoiler alert: California employers lead the way with the most generous account-based plans.)

    So which is faring better in the industry, HRAs or HSAs? The answer very much depends on where you are in the country, what industry you’re in, and how many employees you have. See our free special report for all the detailed findings.

    At a glance, here are the winners and losers when it comes to HSA plans:

    HSAPLANS

    A health reimbursement arrangement (HRA) and a health savings account (HSA) have many things in common, but also several key differences that define their purpose and benefits. For a closer look at the differences and similarities, see the UBA document HRAs, HSAs, and Health FSAs – What’s the Difference?

    Read more here

  • They finally did it – only to be rebuffed (and not surprisingly) Obamacare redux redux redux

    March 4, 2016

    There have been so many attempts they have almost lost count – but it is over 60. Over 60 times the Republicans have proposed legislation to repeal the Affordable Care Act. In January they finally got enough votes from both the House and the Senate to pass repeal legislation. It went to the President’s desk, which was promptly vetoed. Surprise…but President Obama said “rather than refighting old political battles by once again voting to repeal basic protections that provide security for the middle class. Members of Congress should be working together to grow the economy, strengthen middle class families, and create new jobs” Well, yeah, but…

  • But there are also new rules on what makes premiums affordable – the rules expand

    March 2, 2016

    Employer flex contributions will reduce the amount of an employee’s premium contribution only if the amount may not be taken as cash, is used to purchase minimum essential coverage and may only be used for medical care (as per IRC Code Section 213)

    Cash in lieu of benefits does not apply to the affordability analysis

    Employer contributions to Health Reimbursement Arrangements (HRA) may reduce the employee’s required contribution for affordability for the employer mandate – thus the amount that an employer has agreed to contribute to an HRA reduces the amount the employee is deemed to “owe” for their health insurance (e.g. $1,200 HRA technically reduces the counted premium for the employee by $100 per month, even though it does not support the premium)

  • The Team That Eats Together Performs Better | Petaluma Employee Benefits

    February 29, 2016

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    By Bill Olson
    Chief Marketing Officer at United Benefit Advisors

    burgerDo your employees often eat alone? If so, you may be missing an opportunity, according to an article on the Society For Human Resource Management’s website titled, “Breaking Bread At Work Boosts Bottom Line, Study Claims.

    This goes beyond the simple question of whether there’s food in the break room. The article suggests that communal eating has a marked improvement on performance. Researchers from Cornell studied fire departments in a large city and found that those with kitchens where firefighters ate together earned higher marks for their team performances versus ones who did not.

    Unlike fire departments, most companies in the U.S. don’t provide the perk of food at the workplace, whether it’s free or not. A few, such as Apple and Google, do provide food on-site with the goal of offering healthier food options as well as reducing distractions at work. A side benefit of this is that eating with coworkers promotes collaboration and the swapping of ideas.

    The article says that while eating at work may seem ordinary or even dull, it’s a powerful activity that fosters business objectives like improving communication among co-workers who might not otherwise talk with each other, increasing productivity due to employees not having to travel off-site for lunch, and even potentially lowering health insurance costs from the healthier choices offered at an on-site cafeteria.

    Essentially, everyone needs to eat and people at work have to choose where they eat and whether it’s alone or with coworkers. Companies can encourage communal eating and forge ahead with new and improved ways of doing business.

    Read More …

  • HRAs, HSAs, and Health FSAs – What’s the Difference? | Employee Benefits CA

    February 25, 2016

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    By Danielle Capilla
    Chief Compliance Officer at United Benefit Advisors

    HSA

    Health reimbursement arrangements (HRAs), health savings accounts (HSAs) and health care flexible spending accounts (HFSAs) are generally referred to as account-based plans. That is because each participant has their own account, at least for bookkeeping purposes. Under the tax rules, amounts may be contributed to these accounts (with certain restrictions) and used for health care on a tax-favored basis.

    The Patient Protection and Affordable Care Act (PPACA) has added new requirements that affect HRAs and HFSAs. Most HFSAs and HRAs will need to be amended to meet the new PPACA requirements. HSAs generally are not affected by PPACA.

    The chart below describes the main characteristics of these types of accounts.

    hsa2

    To help determine the best option for your particular situation, request the UBA PPACA Advisor, “HRAs, HSAs, and Health FSAs – What’s the Difference?” for a comprehensive chart comparing eligibility criteria, contribution rules, reimbursement rules, reporting requirements, privacy requirements, applicable fees, non-discrimination rules and other characteristics of these types of accounts.

    UBA’s Health Plan Survey analyzes a wide range of health care costs trends. To read the full press release announcing the latest findings related to HSA funding, click here. For all the latest health plan cost trends, download the UBA Health Plan Survey Executive Summary. To benchmark your plan to others in your region, industry or size bracket, contact a UBA Partner near you to run a custom benchmarking report.

    Read More …

  • New penalty amounts – just when you thought it was safe

    February 24, 2016

    So not only does affordability barely increase while rates are rising, the penalties for failure to comply have also increased, just as we get started. For calendar year 2016, Penalty A (failure to provide coverage at all) is $180 per month ($2,160 per year) multiplied by the number of full time employees less 30. For Penalty B, which concerns offering coverage that does not meet minimum standards or is unaffordable, the penalty is $270 per month ($3,240 per year).

  • Webinar Series | Arrow Benefits Group

    February 18, 2016

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    ubaMore complex compliance regulations and rapidly shifting benefits programs pose an increasing challenge to employers.

    We, as part of the United Benefit Advisors, (UBA) are committed to delivering knowledge that will help simplify those complicated choices and improve the effectiveness and success of your programs. In order to provide educational opportunities for a broad audience of human resource and benefits professionals, we have designed webinar’s to help you with the current issues affecting the benefits world.

    Each webinar is 60 – 90 minutes and is an exceptional value for only $149. Complimentary registration is available exclusively though us, a UBA affiliated Firm.

     

    Tuesday, March 8, 2:00 p.m. ET

    Plan Documents 101: Who Needs What and Best Practices

    Video Recording from Tuesday, January 19

    The Family and Medical Leave Act: Legal Considerations for Employers

     

    Most of our webinars have been sent for approval by the Human Resource Certification Institute to qualify for re-certification credit hours.

    Contact us today to find out more and to register:

    info@arrowbenefitsgroup.com

  • New safe harbors – the law is barely in place and the ACA amounts have changed

    February 17, 2016

    The definition of “affordability” for a health plan is one where the amount an employee pays for just their portion of the coverage at a level not to exceed 9.5%. This was increased last year and is now increasing again to 9.66% So employers get a break…sort of…as medical rate increases are at least 6% for the year and in two years the IRS has increased the threshold by a whopping 0.16% Thanks….

  • Top 10 Questions about the Minimum Value Penalty | California Employee Benefits

    February 16, 2016

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    By Danielle Capilla
    Chief Compliance Officer at United Benefit Advisors

    10QuestionsAn employer that offers minimum essential coverage to substantially all of its full-time employees may still owe penalties if the coverage it offers is inadequate because it is not “affordable” or it does not provide “minimum value.” It also may owe penalties on the employees it does not offer coverage to who receive a premium subsidy.

    Here we answer the top 10 questions related to minimum value penalties based on the IRS’s final regulation. More on minimum value can be found in our blogs on ACA Penalties, Taxes and Fees and on Minimum Value. Comprehensive answers to 120 questions related to the play-or-pay penalty and counting employees under ACA can be found in our ACA Advisor on Play or Pay and Counting Employees.

    Q1: What is “minimum value” coverage?
    A1: Coverage is “minimum value” if the coverage is expected to pay at least 60 percent of covered claims costs. It must provide substantial coverage for inpatient hospital and physicians’ services.

    Fully insured plans provided to small groups must provide coverage at bronze level, or better. Bronze level is an actuarial value of approximately 60 percent, and those plans are automatically considered to provide minimum value.

    The government has provided a calculator and several safe harbor plan designs to assist large insured plans and self-funded plans with their minimum value determinations.

    Q2: May an employer use wellness incentives when determining minimum value?
    A2: The employer may use non-smoking incentives when determining minimum value if non-smoking incentives are used to reduce cost-sharing (deductibles, coinsurance, copays, or the out-of-pocket maximum). If non-smoking incentives are available to reduce cost-sharing, essentially the employer may assume that all employees qualify for the non-smoker incentive. All other wellness incentives must be disregarded.

    Q3: May an employer use HRA contributions when determining minimum value?
    A3: When determining minimum value, an employer may apply HRA contributions for the current year if those contributions may only be used by employees for cost-sharing. (Cost-sharing generally means deductibles, coinsurance, or copays.)

    Q4: May an employer use HSA contributions when determining minimum value?
    A4: When determining whether coverage is affordable, an employer’s contributions to an HSA may be considered as a first-dollar benefit.

    Q5: What is the penalty for not offering affordable, minimum value coverage?
    A5: The penalty is $250 per month ($3,000 per year, indexed) for each full-time employee who:

    • Is not offered coverage that is both minimum value and affordable coverage, and
    • Purchases coverage through a government Marketplace, and
    • Is eligible for a premium tax credit/subsidy (so his household income must be below 400 percent of federal poverty level).

    Example: Jones, Inc. has 55 full-time employees and eight part-time employees. Jones offers coverage that is minimum value for all employees, but which is not affordable for 10 of the full-time employees (nine of whom buy coverage through the Marketplace) and all of the part-time employees (all eight buy through the Marketplace). Seven of the nine full-time employees and six of the eight part-time employees who buy through the Marketplace qualify for a premium tax credit.

    Jones owes a penalty on each full-time employee who enrolls in a Marketplace plan and receives a premium tax credit, so Jones owes $21,000 ($250 per month for each of the seven full-time employees who receive a premium credit; the part-time employees are not counted).

    Note that the first 30 (or 80) employees do count under this “inadequate coverage” penalty. Also, if the “no offer” penalty would be less expensive than the “inadequate coverage” penalty, the employer would pay the “no offer” penalty.

    Q6: Does the employer owe a penalty if the employee declines affordable, minimum value coverage offered by the employer and buys coverage through the Marketplace instead?
    A6: No. The employer simply has to offer affordable, minimum value coverage. (Specifically, the least expensive plan that provides minimum value coverage must be affordable based on the cost of self-only coverage.) If the employee chooses to obtain coverage through the Marketplace, he or she can, but the employee will not be eligible for a premium tax credit/subsidy and therefore the employer will not owe a penalty.

    Q7: Does the employer owe a penalty if the employer offers minimum essential coverage that is not affordable and minimum value coverage to an employee who would be eligible for a premium tax credit/subsidy, but the employee chooses to enroll in the employer’s plan?
    A7: No. If the employee chooses to obtain coverage through his or her employer instead of through the Marketplace, the employee can, but he or she will usually not be eligible for a premium tax credit/subsidy and therefore the employer will not owe a penalty.

    Q8: Is it possible for an employee to qualify for a premium tax credit/subsidy even though his or her employer offers affordable coverage?
    A8: Yes. If the cost of self-only coverage through the Marketplace is more than 9.5 percent (indexed to 9.56 percent in 2015, and 9.66 percent in 2016) of an employee’s actual household income, an employee could be eligible for the subsidy even though the coverage offered by his or her employer is affordable under one of the three safe harbors. This will be a fairly unusual occurrence, but could happen because certain deductions are allowed when determining household income.

    Q9: Must all plan options provide affordable, minimum value coverage?
    A9: No. Only the lowest cost option that provides minimum value coverage needs to be affordable to avoid the penalty. An employer is free to offer other options that do not meet affordability.

    Q10: Are there special rules for multiemployer plans?
    A10: Yes. If the employer is required to make a contribution to a multiemployer plan with respect to some or all of its employees under a collective bargaining agreement or related participation agreement and the multiemployer plan offers affordable, minimum value coverage to eligible employees, the employer will be considered to have offered affordable, minimum value coverage. In addition to the three affordability safe harbors, coverage under a multiemployer plan is considered affordable if the employee’s contribution toward self-only coverage does not exceed 9.5 percent (indexed to 9.56 percent in 2015, and 9.66 percent in 2016) of the wages reported to the multiemployer plan, based on either actual wages or an hourly wage rate under the bargaining agreement.

    Determining how many employees you have under ACA is critical to avoiding penalties. Request UBA’s comprehensive ACA Advisor that answers over 120 questions related to the play or pay penalty and counting employees under ACA, including:

    • The definitions of full time employees
    • How to count part-time employees on a pro-rata basis
    • How to treat seasonal employees
    • Who the law considers an “employee”
    • Counting hours correctly
    • Determining average hours worked
    • Penalties that result if a “large employer” doesn’t offer coverage

    Read More …

  • Minimum Value: HRA Contributions and Flex Credits | California Benefits Broker

    February 11, 2016

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    By Danielle Capilla
    Chief Compliance Officer at United Benefit Advisors

    HRAContributionsThe Internal Revenue Service (IRS) recently issued a final rule that clarifies various topics relating to the Patient Protection and Affordable Care Act (ACA) and premium tax credit eligibility provisions. Mirroring guidance from IRS Notice 2015-87, the final rule clarifies that health reimbursement arrangement (HRA) contributions by an employer that may be used to pay premiums for an eligible employer sponsored plan are counted toward the employee’s required contribution, subsequently reducing the amount required for their contribution.

    Similarly, an employer’s flex contributions to a cafeteria plan can reduce the amount of the employee portion of the premium so long as the employee may not opt to receive the amount as a taxable benefit, the flex credit may be used to pay for the minimum essential coverage (MEC), and the employee may use the amount only to pay for medical care. If the flex contribution can be used to pay for non-health care benefits (such as dependent care), it could not be used to reduce the amount of the employee premium for affordability purposes. Furthermore, if an employee is provided with a flex contribution that may be used for health expenses, but may be used for non-health benefits, and is designed so an employee who elects the employer health plan must forego any of the flex plan’s non-health benefits, those flex benefits may not be used to reduce the employee’s premium for affordability purposes.

    Download UBA’s ACA Advisor for an explanation of minimum value rules related to child income, wellness incentives, continuation coverage, and mid-month enrollment.

    Read More …

  • Obamacare will save money…no wait…its elimination will save money – huh?

    February 10, 2016

    The Congressional Budget Office is an objective means for Congress to determine the cost effect of various pieces of legislation. Unfortunately, it has weighed in too often and with even contradictory assessments of the potential cost of the Affordable Care Act. Now on the cusp of Congressional action to dramatically change or even eliminate the ACA, the CBO has now said that the GOP led effort for change would cost $42 billion less than previously expected and save more than half a trillion (yes trillion) over ten years. Of course, that is what they said about the passage of the ACA in the first place, so…

  • IRS Updates FAQs Related to 6055/6056 Reporting | Petaluma Employee Benefits

    February 8, 2016

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    By Danielle Capilla
    Chief Compliance Officer at United Benefit Advisors

    IRSUpdatesThe long-standing IRS FAQs related to reporting under sections 6055 and 6056 on requirements provided by the Patient Protection and Affordable Care Act (ACA) have been updated to reflect new information. Final instructions for both the 1094-B and 1095-B and the 1094-C and 1095-C were released in September 2015, as were the final forms for 1094-B, 1095-B, 1094-C, and 1095-C. On December 28, 2015, in Notice 2016-04, the IRS extended the information reporting due dates for insurers, self-insuring employers, other health coverage providers and applicable large employers. The updated FAQs take the information from Notice 2016-04 into account.

    The 6056 FAQ, which discusses information reporting for applicable large employers (ALEs), and the 6055 FAQ, which discusses reporting on minimum essential coverage (MEC), clarify that the deadlines for fixing mistakes on forms has been extended due to the overall extension for information reporting. For statements furnished to individuals under sections 6055 and 6056, any failures that reporting entities correct by April 30 and October 1, 2016, respectively, will be subject to reduced penalties.

    The 6056 FAQ also clarified that an employer may only issue one 1095-C per full-time employee.

    UBA offers key resources to help employers understand the reporting provisions contained in the IRS FAQs and notices:

    Final Forms and Instructions for Employer and Individual Shared Responsibility Reporting Forms: Employers with 50 or more full-time or full-time equivalent employees and insurers are now required to report on the health coverage they offer. This ACA Advisor has comprehensive information on what forms to use for employees, filing dates, responsible parties and forms to be sent to the IRS, including sample situations.

    Template Letter to Employees about IRS Forms 1095-B and 1095-C: UBA has created a template letter that employers may use to draft written communication to employees regarding what to expect in relation to IRS Forms 1095-B and 1095-C, and what employees should do with a form or forms they receive. The template is meant to be adjustable so employers can add pertinent additional information.

    IRS Provides Major Delay in 6055 and 6056 Reporting: This ACA Advisor explains the recent due date extensions, the extension process and the impact on employees.

    Read Mpre …

  • Employee Benefit Compliance Checkup | Arrow Benefits Group

    January 19, 2016

    More and more organizations are pressured to have their employee benefit plans fully compliant with all employee benefit laws (Affordable Care Act (ACA), ERISA, COBRA, HIPAA, etc.) or face fines, penalties, and loss of tax favorable status or even criminal charges. The Employee Benefits Security Administration (EBSA), a division of the Department of Labor (DOL), has been conducting extensive ERISA audits on pension and welfare benefit plans and show no signs of letting up.

    In this article, we cover critical areas of consideration in keeping your health and welfare benefit plans fully compliant. We do not cover compliance for retirement/pension plans or required benefit plans such as social security taxes, unemployment, workers compensation or disability.

    Plan Administrators
    All plan administrators and individuals managing benefits must follow judiciary requirements, looking out for the best interests of participants while managing plans to comply with all requirements and must follow these fiduciary requirements:
    • Making sure participants receive promised benefits;
    • Establish and maintain plans in a fair and financially sound manner;
    • Manage plans for the exclusive benefit of participants and beneficiaries;
    • Carry out their duties in a prudent manner and refrain from conflict of interest;
    • Fund benefits in accordance with the law and plan rules;
    • Report and disclose information on the operations and financial condition of plans to the government and participants; and
    • Provide documents required in the conduct of investigations to ensure compliance with the law.

    Fiduciary Bond
    If the plan administrator’s duty or activity creates a risk in which funds or property could be lost due to fraud, they may be required to maintain a fiduciary bond. If they have physical contact with cash or checks, including access to a safe deposit box, power of custody or power to transfer property, they may need a fiduciary bond.

    Employers with insured plans usually are not subject to the bonding requirements for those plans. No bonding is required when premiums or other payments made to purchase benefits, including health benefits, are paid directly from the employer’s general assets to an insurance carrier.

    Disclosure and Notification Requirements
    There are numerous notifications that are required, based on benefits offered and the number of employees. Below is a summary of the various notification requirements.

    Summary of Benefits & Coverage (SBC)
    Plan administrator or issuer must provide a uniform summary of benefits and coverage to participants and beneficiaries in medical insurance upon application for coverage and at renewal. Plan administrators and issuers must also provide a 60-day advance notice of material changes to the summary that take place mid-plan year. Plans and issuers must begin providing the summary to participants and beneficiaries who enroll or re-enroll in plans. The SBC is typically created by insurance providers or third party administrators and distributed by the employer.

    Notice of Patent Protections and Selection of Providers. (All who offer medical insurance)
    Plan administrators or issuers must provide a notice of patient protections and selection of providers whenever the summary plan description (SPD) or similar description of benefits is provided to a participant. These provisions relate to the choice of a health care professional and benefits for emergency services.

    Grandfathered Plan Disclosure/Notice (Only grandfathered plans)
    Organizations who offer a grandfathered plan are required to provide participants with a special grandfather notice periodically with materials describing plan benefits. These types of plans seem to be phasing out, with fewer and fewer employers offering grandfathered plans.

    Mental Health Parity and Addiction Equity Act (MHPAEA) Notice (50+ employees)
    The MHPAEA applies to group health plans offering mental health and substance use disorder benefits who have 50 or more employees. The MHPAEA imposes parity requirements on group health plans that provide benefits for mental health or substance use disorder benefits. For example, plans must offer the same access to care and patient costs for mental health and substance use disorder benefits as those that apply to general medical or surgical benefits.

    Health Care Reform – Employee Notice of Exchange (All employers)
    The Employee Notice of Exchange requirement applies to all employers who are subject to the Fair Labor Standards Act (FLSA). Employers are required to provide all new hires and current employees with a written notice about the health care reform law’s health insurance exchanges (Exchanges). This notice is designed to inform employees about the existence of the Exchange and give a description of the services provided by the Exchange. It explains how employees may be eligible for a premium tax credit or a cost-sharing reduction if the employer’s plan does not meet certain requirements. It informs employees that if they purchase coverage through the Exchange, they may lose any employer contribution toward the cost of employer-provided coverage, and that all or a portion of this employer contribution may be excludable for federal income tax purposes. Finally, the notice includes contact information for the Exchange and an explanation of appeal rights. Provide this notice to all employees regardless of whether or not they are on the medical insurance plan at least one time.

    COBRA Notices (20+ employees)
    Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), group health plans sponsored by an employer with at least 20 employees must provide various notices to participants. Organizations must provide each covered employee and covered spouse and dependents (if any) with written notice of their individual COBRA continuation coverage rights under the plan. These notices must be provided within 90-days of beginning coverage and written in plain language so that the average participant can understand.

    Send an Initial COBRA notice informing participants of COBRA rights and the need for them to notify the employer anytime a special a qualifying event occurs for which you may not know otherwise such as divorce, or child turning 26 year’s old.

    Send a COBRA Election Notice or Qualifying Event Notice within 14-days of a qualifying event such as termination of employment.

    Other COBRA notices may apply if participants are no longer eligible, are late on a payment or the employer is terminating the medical plan.

    Note: Employers with less than 20 employees may be subject to state continuation requirements. Contact your state insurance commission or state labor department for more information.

    Qualified Medical Child Support Order Receipt and Determination Letters
    (All who offer medical coverage)
    Group health plans are required to establish written procedures for determining the qualification of a Medical Child Support Order. The employer respond to an order is required within 20 business days of the date of the Notice.

    HIPAA Certificate of Creditable Coverage
    (Any employer offering medical coverage)
    A participant or beneficiary is entitled to demonstrate prior creditable coverage under an earlier plan, to reduce the amount of time for which a current health plan can impose exclusions based on a preexisting condition. The participant or beneficiary may obtain a certificate of creditable coverage from the plan sponsor or insurer that provided benefits previously.

    HIPAA Privacy Policies and Practices
    (Any plan with protected health information (PHI))
    Health Plans are required to establish written privacy policies and procedures regarding protected health information (PHI). Policies should include: 1) Permitted uses and disclosures, 2) Authorization requirement for other uses and disclosures, 3) Designation of privacy official, and privacy contact, 4) Sanctions for violations, 5) Privacy safeguards, 6) Complaints procedure, 7) Prohibition of retaliation and waiver of rights, 8) Documentation and record retention, and 9) Business Associates agreements. HIPAA notice must be provided to participants at time of enrollment and within 60-days of a material change.

    HIPAA Security Policies and Practices
    Plans that store, receive or transmit PHI are required to establish written policies and procedures regarding the maintaining and transmission of PHI. Business Associates agreements may need to be amended. Fully insured plans are excluded.

    Notice of Special Enrollment Rights (All medical plans)
    Administrators are to notify eligible participants of special enrollment rights when offered the opportunity to enroll in group health insurance, including a description of special enrollment events and enrollment procedures (e.g. birth, adoption, marriage, etc.).

    Medicare Part D Notice of Creditable Coverage (All who offer plans with prescription drugs)
    The Medicare Part D requirements apply to group health plan sponsors that provide prescription drug coverage to individuals who are eligible for Medicare Part D coverage. Medicare Part D requires a disclosure notice must be provided to Medicare Part D eligible individuals who are covered by, or apply for, prescription drug coverage under the employer’s health plan. It must be provided at certain times, including before the Medicare Part D Annual Coordinated Election Period (October 15 through December 7 of each year). Because of the difficulty in knowing if an employee or their dependents quality, it is recommended to provide this notice to the employee and dependents annually.

    Employers must disclose to the Centers for Medicare and Medicaid Services (CMS) whether the plan’s coverage is creditable on an annual basis (within 60-days after the beginning of the plan year) and upon any change that affects the plan’s creditable coverage status.

    Women’s Health Act Notice (All offering these benefits)
    Plans that provide medical and surgical mastectomy benefits are required to notify participants that such benefits are available. This notice must be provided to participants upon enrollment and annually.

    Newborns’ and Mothers’ Health Protection Act (All who offer maternity)
    If the plan provides maternity or newborn infant coverage, a statement that a stay for a normal delivery must be no less than 48 hours and 96 hours for a cesarean section should be provided annually.

    Children’s Health Insurance Program (CHIP) Reauthorization Act Notice (All who offer medical insurance in a state where CHIP is offered)
    The CHIPRA requirements applies to employers that maintain group health plans in states that provide premium assistance subsidies under a Medicaid plan or CHIP. This notifies employees of potential opportunities currently available in the state in which the employee resides for premium assistance under Medicaid and CHIP for health coverage of the employee or the employee’s dependents. Employers that maintain a group health plan in a state that provides medical assistance under a state Medicaid plan or CHIP must distribute the notice to participants upon enrollment and annually.

    Summary Plan Description (SPD) or SPD Wrap (All who offer ERISA covered plans)
    The SPD informs participants and beneficiaries of their rights and obligations under the plan. It must be written in a manner understandable to the average participant. This is generally more than is provided by the insurance company and must be provided for all ERISA covered benefits (i.e. medical, dental, vision, life, disability, HRA, FSA, POP, etc.). Generally, benefits where the employers share in the cost, endorse the plan or allow the plan to run through a 125 Plan paying for premiums on a pre-tax basis would be considered covered by ERISA and would require an SPD. Organizations excluded from this requirement include government plans, public schools and churches.

    An SPD must include the following: plan name; employer/sponsor name; EIN; type of plan; type of administration; plan administrator’s name, address, telephone number; name of person designated as agent for service of legal process; plan year; plan eligibility requirements; description of benefits; information regarding plan contributions and funding; information regarding claims and procedures; and a statement of ERISA rights.

    A common approach is to use an SPD Wrap that creates one overall SPD wrapping in all covered benefit plans, pulling in the missing insurance company information. SPD Wraps may include the plan document and the SPD in the same document or they can be separate.

    Summary of Material Reduction Notice
    (All ERISA benefit plans)
    Any modification in the terms of the plan that is a “material reduction” in covered services or benefits must be furnished to participants no later than 60-days after the date of adoption of the reduction. A reduction in covered services or benefits generally will include any plan modification or change that:
    • Eliminates benefits payable under the plan;
    • Reduces benefits payable under the plan;
    • Increases premiums, deductibles, coinsurance, copayments or other amounts to be paid by a participant or beneficiary;
    • Reduces the service area covered by a health maintenance organization; or
    • Establishes new conditions or requirements (e.g., preauthorization requirements) to obtaining services or benefits under the plan.

    Summary of Material Modification
    (All ERISA benefit plans)
    Any modification in the terms of the plan that is “material” and any change in the information required to be in the SPD, must be reported to plan participants within 210 days after the end of the plan year in which a modification or change is adopted.

    Other benefit laws

    Genetic Information Nondiscrimination Act (GINA) (All employers)
    GINA prohibits health plans and health insurance issuers from discriminating based on genetic information. GINA generally prohibits group health plans and health insurance issuers from: (1) adjusting group premium or contribution amounts on the basis of genetic information; (2) requesting or requiring an individual or an individual’s family members to undergo a genetic test; and (3) collecting genetic information, either for underwriting purposes or prior to or in connection with enrollment.

    Family and Medical Leave Act (FMLA) (50+ size groups)
    The FMLA provides eligible employees with job-protected leave for certain family and medical reasons or military exigency situations. An employer must maintain group health coverage during the FMLA leave at the level and under the conditions that coverage would have been provided if the employee had not taken leave.

    The FMLA requires employers to provide the following notices/disclosures:
    1. General Notice – Covered employers must prominently post a general FMLA notice where it can be readily seen by employees and applicants for employment. If the employer has any FMLA-eligible employees, it must also include the general notice in the employee handbook or other written employee guidance or distribute a copy of the notice to each employee upon hiring.
    2. Eligibility/Rights and Responsibilities Notice – Written guidance must be provided to an employee when he or she notifies the employer of the need for FMLA leave. The employer must detail the specific expectations and obligations of the employee, and explain the consequences for failing to meet these obligations.
    3. Designation Notice – After the employer has sufficient information, it must provide a designation notice informing the employee whether the leave is designated as FMLA leave. Model forms from the DOL are available at: dol.gov/whd/fmla/index.htm

    Reporting Requirements

    Form 5500 (100+ participants)
    Plan administrators must report specified plan information to the Department of Labor each year. Fringe benefit plans and welfare plans with less than 100 participants at the beginning of the plan year that are unfunded, fully insured or a combination of both are not required to file the form. Form 5500 must be submitted to the Employee Benefits Security Administration (EBSA) by the last day of the 7th month following the end of the plan year. Applicable schedules (i.e., Schedule A, C, H or I) may need to be attached. Employers using an SPD Wrap document would submit one 5500 report for the SPD Wrap, instead of submitting one for each benefit plan.

    Summary Annual Report (SAR) (If filed 5500 report)
    The SAR summarizes the form 5500 financial information as a narrative summary of the Form 5500, and includes a statement of the right to receive a copy of the plan’s annual report. The SAR must generally be provided within nine months after the end of the plan year to participants and beneficiaries.

    Health Care Reform – W-2 Reporting (250 Employee Size Groups)
    The Form W-2 reporting obligation applies to employers sponsoring group health plans who have 250 or more W-2 forms the prior year.

    Employers must disclose the aggregate cost of employer-sponsored coverage provided to employees on the employees’ W-2 Forms. The purpose of the reporting requirement is to provide information to employees regarding how much their health coverage costs. The reporting does not mean that the cost of the coverage is taxable to employees.

    ACA Reporting (50 + FTE or self-funded plans)
    Organizations who are Applicable Large Employers (ALEs), meaning they had 50 or more full-time (FT) or full-time equivalent (FTE) employees during the previous year, are required to provide anyone who was full-time for one month or more with Form 1095-C by January 31st (extended to March 31, 2016 for 2015 reporting year). ALEs are then required to submit transmittal document 1094-C to the IRS, along with copies of the 1095-Cs given to full-time employees by February 28th (extended May 31, if submitted manually or to June 31 if filing electronically for 2015 reporting year).

    Organizations who offer self-funded plans, who have less than 50 FT or FTE are required to provide FT employees with Form 1095-B, then submit transmittal Form 1094-B to the IRS on the same dates shown above for ALEs.

    BENEFIT ADMINISTRATION
    There are a number of recommended benefit administration practices that help you comply with the various laws, while maximizing benefits received by participants.

    Plan Year and Open Enrollment
    Organizations should define a plan year, then hold open enrollments prior to each plan year, reviewing coverage and provider options. Participants are allowed an opportunity to enroll or make changes to their plans during open enrollments. Though not recommended, organizations can have more than one open enrollment date for different benefits. Do not allow mid-year changes to selected benefit plans unless they experience a qualifying event or you risk violating section 125 plans (Premium Only or Flexible Spending Account) tax-favorable status of your plans, if applicable, and may violate agreements with insurance providers.

    ALE Medical Insurance Coverage Offers
    Most ALEs will elect to offer coverage to at least 95% of eligible employees that meets Minimum Essential Coverage (MEC), Minimum Value (MV) at affordable rates to avoid penalties. A plan meets MV if it covers at least 60% of the total allowed cost of benefits that are expected to be incurred under the plan. It is affordable if the medical insurance rates charged for the employee-only, MV coverage does not exceed 9.56% of the employee’s W-2 wages, federal poverty level or rate of pay safe harbors.

    It is a good practice to collect either an application or waiver of coverage from all employees offered coverage. Keep these on file demonstrating they were offered coverage.

    Eligibility & Waiting Periods
    Employers are to set up practices that comply with required Affordable Care Act (ACA) requirements related to waiting periods and eligibility. The waiting period must allow participants to join a medical plan within 90-days of their date of hire. Employers may elect a 30-day orientation period that occurs before the normal waiting period. The most common waiting periods are the first of the month following 30 or 60-days of employment.

    Classify employees as full-time if you anticipate they will on average work 30-hours or more per week, and make them eligible to join your medical insurance plan, if applicable. It is a good practice to also clearly define job classifications of part-time, full-time, temporary and seasonal to identify variable hour employees, helping you manage benefit eligibility. Monitor work hours for all employees to effectively manage eligibility over defined measurement periods. In addition to actual hours performed, work hours include vacation, sick leave, paid-time off, holiday pay or time out on an injury.

    Measurement Periods
    Establish a set measurement period where you will monitor work hours for new variable hour employees (part-time, temporary and seasonal) of 30 days to 12 months or you may elect to use the monthly measurement method. Those who average 30-hours or more during the measurement period would be eligible to participate in the medical plan. Have all measurement periods begin as of the first of the month following dates of hire, making it so you only have to review eligibility twelve times per year. If desired, you can have a separate measurement period for on-going employees, those who are past one standard measurement period.
    Administrative Periods
    Define an administrative period of 30 to 90-days, which is your allowed time between the measurement period and the insurance effective date to calculate eligibility, provide enrollment materials to eligible employees and perform other administrative functions. The combination of your selected measurement period for newly hired employees and administrative period may not exceed 13 months.

    Stability Periods
    Individuals who qualify for medical insurance coverage after completing the measurement period are eligible to remain on medical coverage, regardless of changes to their average work hours, for a period of time equal to your defined measurement period or 6 months, whichever is greater.

    ACA Reporting Data
    Because of the need to meet ACA reporting requirements, ALE’s need to establish tracking systems to monitor the following data used to complete documents 1095-C and 1094-C:
    • Employee names
    • Employee SS#
    • Employee address
    • Employee telephone number
    • The month coverage was offered to each employee and each month thereafter for which the employee was eligible for coverage
    • Number of employees (full-time and full-time equivalent)
    • Employee’s cost of the lowest cost monthly premium for self-only
    • Name, SS# OR DOB if no SS# is attainable for spouse and dependents for ALL self-funded plans (ALE and small employers)

    125 Premium Only Plans (POP) or Flexible Spending Accounts (FSA)
    Many organizations offer a POP, helping participants pay for premiums on a pre-tax basis, and/or an FSA, to set aside funds to cover anticipated uncovered medical costs (e.g. deductibles, co-pays, etc.) or to pay for work related dependent care, if applicable.

    It is important to maintain up-to-date POP or FSA documents and to communicate these services along with other benefits through distribution of Summary Plan Descriptions (SPDs) or SPD Wrap documents. There were recent updates to definition of spouse, new qualifying events for marketplace enrollment for POP documents, new health FSA maximums, and $500 rollovers for FSA that must be updated in these plan documents.

    If offering these plans, make sure to conduct annual discrimination testing of eligibility to participate, benefits and contributions, and key-employee-concentration to ensure plans do not violate discrimination testing requirements.

    COBRA
    As previously discussed, make sure to have procedures in place to provide required COBRA notices, manage COBRA payments and properly manage coverage for these participants. It is good to provide them with the same communication and rights as employee participants. Even if you outsource this administration, you still want good practices to ensure all participant rights are allowed and you are adding and taking someone on and off coverage in accordance with these laws. There are huge risks and penalties that can result for mishandling COBRA.

    In conclusion, there are many laws you need to know, many communication and notices to distribute to participants, and the need for clear, effective benefit administrative practices to help you offer effective benefits for employees. It is essential to have a knowledgeable insurance broker to help you manage your benefit systems and navigate the many benefit laws.

    By Ken Spencer, President & CEO, HR Service, Inc. & ERISA Solutions, www.HRServiceInc.com

  • IRS Provides Major Delay in 6055 and 6056 Reporting | Petaluma Benefits Specialist

    January 14, 2016

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    By Danielle Capilla
    Chief Compliance Officer at United Benefit Advisors

    ChangesAheadUnder 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. In order for the Internal Revenue Service (IRS) to verify that (1) individuals have the required minimum essential coverage, (2) individuals who request premium tax credits are entitled to them, and (3) ALEs are meeting their shared responsibility (play or pay) obligations, employers with 50 or more full-time or full-time equivalent employees and insurers will be required to report on the health coverage they offer. Final instructions for both the 1094-B and 1095-B and the 1094-C and 1095-C were released in September 2015, as were the final forms for 1094-B, 1095-B, 1094-C, and 1095-C.

    Reporting will first be due in 2016, based on coverage in 2015. All reporting will be for the calendar year, even for non-calendar year plans. On December 28, 2015, the IRS issued Notice 2016-4, delaying the reporting deadlines.

    The reporting requirements are in Sections 6055 and 6056 of the ACA. The 1094-C, 1095-C, 1094-B, and 1095-B were originally due to the IRS by February 28 if filing on paper (February 29, in 2016, because February 28 falls on the weekend), or March 31 if filing electronically. The 1095-C form was due to employees by January 31 of the year following the year to which the Form 1095-C relates (February 1, in 2016, because January 31 falls on a weekend). The 1095-B was due to the individual identified as the “responsible individual” on the form by January 31 (February 1, in 2016, because January 31 falls on a weekend).

    The transition relief provided by Notice 2016-4 extended the due date for furnishing Form 1095-B and 1095-C to individuals to March 31, 2016. The due date for filing all forms (1094-C, 1095-C, 1094-B, and 1095-B) to the IRS is moved from February 29, 2016, to May 31, 2016, if filing by paper. If filing electronically, the date is moved to June 30, 2016.

    Employers that have difficulty meeting the extended reporting deadlines are encouraged to file late, as the IRS will take late filing into consideration when determining whether to reduce penalties for reasonable causes. The IRS will also take into account if an employer made reasonable efforts to prepare for reporting, such as gathering or transmitting necessary information to a reporting service.

    For additional information on how the extension may impact your employees, as well as the extension process, download the UBA ACA Advisor, “IRS Provides Major Delay in 6055 and 6056 Reporting”.

    Read More …

  • Arrow Just Published…

    January 12, 2016

    Read our just published article by Principal Mariah Shields on the power of philanthropy….

    MariahShields

    I realize running a successful business means your plate is piled-high with daily priorities but there’s one often-overlooked business act that can fulfill, enrich and reward you if you make time for it: philanthropy. Giving back to your community can serve your business goals while taking care of the world around you. When you give to others, you’ll find you’re actually taking care of yourself—and your business.

     

    READ FULL ARTICLE HERE

  • COBRA and the Affordable Care Act | California Employee Benefits

    January 11, 2016

    By Danielle Capilla
    Chief Compliance Officer at United Benefit Advisors

    The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers to offer covered employees who lose their health benefits due to a qualifying event to continue group health benefits for a limited time at the employee’s own cost. COBRA provisions are found in the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code (Code), and the Public Health Service Act (PHSA). Employers with 20 or more employees and group health plans are subject to COBRA provisions. Most governmental plans, church plans, and certain plans of Indian tribal governments are exempt from COBRA. Employers should always consult with counsel about state continuation laws that are similar to COBRA and apply to small employers.

    Only seven events can trigger COBRA obligations and offers of coverage. They are:

    • Termination of employment
    • Reduction of hours
    • Divorce or legal separation
    • Death of the covered employee
    • A dependent child ceasing to be a dependent under the plan
    • Entitlement to Medicare
    • Bankruptcy

    These events must lead to an individual’s loss of coverage. For example, if a reduction of hours or entitlement to Medicare did not result in an employee’s loss of benefit eligibility, there would be no obligation to offer COBRA coverage. Conversely, employees might experience a loss of coverage that does not trigger COBRA; for example if they fail to pay their portion of the premium or their employer stops offering coverage to spouses.

    Affordable Care Act Impact on COBRA

    The Patient Protection and Affordable Care Act (ACA) did not directly impact or change COBRA obligations for employers, but other changes in related regulations will determine how and when employers offer COBRA coverage to employees.

    Beginning in 2015, to comply with the ACA large employers must offer their full-time employees health coverage, or pay one of two employer shared responsibility (play or pay) penalties. An employer is considered large, or an applicable large employer (ALE), if it has 50 or more full-time or full-time equivalent employees. Full-time employees are employees that average 30 hours a week or more. There are two methods that an ALE can use to determine which employees must be offered coverage to avoid penalties: the monthly method, and the measurement and look-back method. ALEs are also required to report on coverage that they did or did not provide.

    For an in-depth review of the measurement and look-back methods and options, as the reporting obligations and FSA carryovers, request UBA’s ACA Advisor, “Cobra and the Affordable Care Act”.

    Read More …

  • Health care costs are on the rise, the exchange isn’t saving…but, wait, what of Blue Shield?

    January 8, 2016

    No protection here. Blue Shield has reported that, while United may be reeling and the other carriers feeling less than sanguine about their chances for success, they have made $107 million in “excess profits” It was further reported that Blue Shield of California accounted for nearly 30% of the excess profits nationally from all exchanges. A Blue Shield spokesperson said “when pricing for 2014, like other insurers, we were doing it in the dark. We happened to get a healthier population. That was purely by chance” Uh, huh. So why are they increasing rates again in 2016? Must be purely by chance.

  • Temporary relief on Part B premiums – but we will have to see

    January 5, 2016

    The Medicare Part B premiums were supposed to increase substantially – as in 52% – in 2016 Now with the passage of the recent budget, there has been a reprieve, with an increase of “only” 15% – along with a flat $3 charge per month to help pay down a loan the government gave to Medicare to offset lost revenue (huh?)

  • How to Give Your 2016 Resolutions Staying Power | Arrow Benefits Group

    January 4, 2016

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    www.newsusa.com

    resolutionWith any new year comes a clean slate and a chance to take on new goals. For many, resolutions revolve around healthy changes, but experts caution that resolve begins to waver at the end of January — which is why setting specific, realistic goals is proven to be more effective.

    “When it comes to fitness resolutions, the focus should be on small steps,” said Tom Holland, exercise physiologist and Bowflex Fitness Advisor. “While having a big goal to work toward can be motivating, it’s important to have small, manageable goals that allow you to celebrate the milestones along your fitness journey.”

    Here are three examples of lofty fitness resolutions — and how to break them down into achievable goals:

    * “I want to run a marathon.” Training for a race takes months of commitment. Start with a 5K and work your way up to a 10K or half marathon, before deciding if you’re ready to complete the full 26.2 miles. To build endurance before you hit the pavement, consider starting your training on a running machine.

    * “I want to look like a bodybuilder.” This route takes serious patience. Begin with smaller goals, such as gaining one pound of muscle per month. You can accomplish this by increasing the amount of weight and reps with each workout.

    * “I want to go on a cross-country bike trip.” Like a marathon, months of training go into preparing for this long-distance journey. Experts suggest building up your stamina over time to avoid injury.

    Read More …

  • Regulations Regarding Short-Term Limited-Duration Insurance, Excepted Benefits, and Lifetime/Annual Limits | CA Benefit Advisors

    December 29, 2016

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    Recently, the U.S. Department of the Treasury, Department of Labor (DOL), and Department of Health and Human Services (HHS) (collectively the Departments) issued final regulations regarding the definition of short-term, limited-duration insurance, standards for travel insurance and supplemental health insurance coverage to be considered excepted benefits, and an amendment relating to the prohibition on lifetime and annual dollar limits.

    Effective Date and Applicability Date

    These final regulations are effective on December 30, 2016. These final regulations apply beginning on the first day of the first plan or policy year beginning on or after January 1, 2017.

    Short-Term, Limited-Duration Insurance

    Short-term, limited-duration insurance is a type of health insurance coverage designed to fill temporary gaps in coverage when an individual is transitioning from one plan or coverage to another plan or coverage. Although short-term, limited-duration insurance is not an excepted benefit, it is exempt from Public Health Service Act (PHS Act) requirements because it is not individual health insurance coverage. The PHS Act provides that the term ‘‘individual health insurance coverage’’ means health insurance coverage offered to individuals in the individual market, but does not include short-term, limited-duration insurance.

    On June 10, 2016, the Departments proposed regulations to address the issue of short-term, limited-duration insurance being sold as a type of primary coverage.

    The Departments have finalized the proposed regulations without change. The final regulations define short-term, limited-duration insurance so that the coverage must be less than three months in duration, including any period for which the policy may be renewed. The permitted coverage period takes into account extensions made by the policyholder ‘‘with or without the issuer’s consent.’’ A notice must be prominently displayed in the contract and in any application materials provided in connection with enrollment in such coverage with the following language:

    THIS IS NOT QUALIFYING HEALTH COVERAGE (‘‘MINIMUM ESSENTIAL COVERAGE’’) THAT SATISFIES THE HEALTH COVERAGE REQUIREMENT OF THE AFFORDABLE CARE ACT. IF YOU DON’T HAVE MINIMUM ESSENTIAL COVERAGE, YOU MAY OWE AN ADDITIONAL PAYMENT WITH YOUR TAXES.

    The revised definition of short-term, limited-duration insurance applies for policy years beginning on or after January 1, 2017.

    Because state regulators may have approved short-term, limited-duration insurance products for sale in 2017 that met the definition in effect prior to January 1, 2017, HHS will not take enforcement action against an issuer with respect to the issuer’s sale of a short-term, limited-duration insurance product before April 1, 2017, on the ground that the coverage period is three months or more, provided that the coverage ends on or before December 31, 2017, and otherwise complies with the definition of short-term, limited-duration insurance in effect under the regulations. States may also elect not to take enforcement actions against issuers with respect to such coverage sold before April 1, 2017.

     

    By Danielle Capilla, Originally published by United Benefit Advisors – Read More

  • New Law Allows Small Employers to Pay Premiums for Individual Policies | California Employee Benefits

    December 26, 2016

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    This week, the U.S. Senate passed the 21st Century Cures Act which includes a provision allowing small businesses to offer a new type of health reimbursement arrangement for their employees’ health care expenses, including individual insurance premiums. The act was previously passed by the House and President Obama is expected to sign it shortly. The provision for Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs), a new type of tax-free benefit, takes effect January 1, 2017. Further, the act retroactively relieves small employers from the threat of excise taxes under prior rules for plan years beginning before 2017.

    Background

    Employers of all sizes currently are prohibited from making or offering any form of payment to employees for individual health insurance, whether through premium reimbursement or direct payment. Employers also are prohibited from providing cash or compensation to employees if the money is conditioned on the purchase of individual health insurance. (Some exceptions apply; e.g., retiree-only plans, dental/vision insurance.) Violations can result in excise taxes of $100 per day per affected employee.

    The prohibition, implemented under the Affordable Care Act (ACA), was intended to discourage employers from canceling their group plans and pushing workers into the individual insurance market. The rules have been particularly disruptive for small businesses, however, since previously it had been common practice for many small employers to subsidize the cost of individual policies instead of offering group coverage. The new law, passed this week with broad bipartisan support, responds to the concerns of small businesses.

    New Qualified Small Employer HRAs

    The new law does not repeal the ACA’s general prohibition against employer payment of individual insurance premiums. Rather, it provides an exception for a new type of arrangement — a Qualified Small Employer HRA or QSEHRA — provided that specific conditions are met.

    First, the employer must meet two conditions:

    • Employs on average no more than 50 full-time and full-time-equivalent employees. In other words, the employer cannot be an applicable large employer as defined under the ACA; and
    • Does not offer a group health plan to any of its employees.

    Next, the QSEHRA must meet all of the following conditions:

    • It is funded solely by the employer; employee contributions are not permitted;
    • It is offered to all full-time employees, although the employer may choose to include seasonal or part-time employees and/or may exclude employees with less than 90 days of service;
    • For tax-free QSEHRA benefits, the employee must have minimum essential coverage (e.g., medical insurance under an individual policy);
    • It pays or reimburses healthcare expenses (e.g., § 213(d) expenses) and premiums for individual policies;
    • It does not pay or reimburse contributions for any employer-sponsored group coverage;
    • The same benefits and terms apply to all eligible employees, except the benefit amount may vary by:
      • Single versus family coverage;
      • Prorated amounts for partial-year coverage (e.g., new hires); and
      • For premium reimbursements, variations consistent with the age- and family-size rating structure of a representative individual policy; and
    • Benefits do not exceed $4,950 if single coverage (or $10,000 if family coverage) per 12-month plan year. Amounts are prorated if covered for less than 12 months. Limits will be indexed for inflation.

    Coordination with Exchange Subsidies

    Coverage under a QSEHRA will affect the employee’s eligibility for a subsidized individual policy from an insurance Exchange (Marketplace). Any subsidy for which the employee would otherwise qualify will be reduced dollar-for-dollar by the QSEHRA.

    Benefit Laws

    Group health plans are subject to numerous federal laws, including SPD and other notice requirements under ERISA, coverage continuation requirements under COBRA, and benefit mandates under the ACA. The new law specifies that QSEHRAs are not group health plans, so COBRA and other requirements will not apply.

    QSEHRA Notices

    Small employers offering QSEHRAs will be required to provide a notice to each eligible employee that:

    • Informs the employee of the QSEHRA benefit amount;
    • Instructs the employee that he or she must give the QSEHRA information to the Exchange if applying for a subsidy for individual insurance; and
    • Explains the tax consequences of failing to maintain minimum essential coverage.

    QSEHRA notices should be provided at least 90 days before the start of the plan year.

    Employers also will be required to report the QSEHRA coverage on Form W-2, Box 12. The reporting is informational only and has no tax consequences. Although small employers usually are exempt from this type of W-2 informational reporting, apparently it will be required for QSEHRAs starting with the 2017 tax year.

    More Information

    To learn more about QSEHRAs starting in 2017, or for details about the relief from excise taxes for small employers before 2017, see the 21st Century Cures Act. The relevant provisions are found in Section 18001 beginning on page 306.

    Employers that are considering QSEHRAs are encouraged to work with legal counsel and tax advisors that offer expertise in this area. Starting in 2017, employer-funded QSEHRAs can offer valuable tax-free benefits to employees as long as they are designed and administered to meet all legal requirements.

     

    Originally published by ThinkHR – Read More

  • FAQs on Tobacco Cessation Coverage and Mental Health / Substance Use Disorder Parity | California Employee Benefits

    December 23, 2016

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    Recently, the Department of the Treasury, Department of Labor (DOL), and Department of Health and Human Services (HHS) (collectively, the Departments) issued FAQs About Affordable Care Act Implementation Part 34 and Mental Health and Substance Use Disorder Parity Implementation.

    The Departments’ FAQs cover two primary topics: tobacco cessation coverage and mental health / substance use disorder parity.

    Tobacco Cessation Coverage

    The Departments seek public comment by January 3, 2017, on tobacco cessation coverage. The Departments intend to clarify the items and services that must be provided without cost sharing to comply with the United States Preventive Services Task Force’s updated tobacco cessation interventions recommendation applicable to plan years or policy years beginning on or after September 22, 2016.

    Mental Health / Substance Use Disorder Parity

    Generally, the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) requires that the financial requirements and treatment limitations imposed on mental health and substance use disorder (MH/SUD) benefits cannot be more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits.

    A financial requirement (such as a copayment or coinsurance) or quantitative treatment limitation (such as a day or visit limit) is considered to apply to substantially all medical/surgical benefits in a classification if it applies to at least two-thirds of all medical/surgical benefits in the classification.

    If it does not apply to at least two-thirds of medical/surgical benefits, it cannot be applied to MH/SUD benefits in that classification.

    If it does apply to at least two-thirds of medical/surgical benefits, the level (such as 80 percent or 70 percent coinsurance) of the quantitative limit that may be applied to MH/SUD benefits in a classification may not be more restrictive than the predominant level that applies to medical/surgical benefits (defined as the level that applies to more than one-half of medical/surgical benefits subject to the limitation in the classification).

    In performing these calculations, the determination of the portion of medical/surgical benefits subject to the quantitative limit is based on the dollar amount of all plan payments for medical/surgical benefits in the classification expected to be paid under the plan for the plan year. The MHPAEA regulations provide that “any reasonable method” may be used to determine the dollar amount of all plan payments for the substantially all and predominant analyses.

    MHPAEA’s provisions and its regulations expressly provide that a plan or issuer must disclose the criteria for medical necessity determinations with respect to MH/SUD benefits to any current or potential participant, beneficiary, or contracting provider upon request and the reason for any denial of reimbursement or payment for services with respect to MH/SUD benefits to the participant or beneficiary.

    However, the Departments recognize that additional information regarding medical/surgical benefits is necessary to perform the required MHPAEA analyses. According to the FAQs, the Department have continued to receive questions regarding disclosures related to the processes, strategies, evidentiary standards, and other factors used to apply a nonquantitative treatment limitation (NQTL) with respect to medical/surgical benefits and MH/SUD benefits under a plan. Also, the Departments have received requests to explore ways to encourage uniformity among state reviews of issuers’ compliance with the NQTL standards, including the use of model forms to report NQTL information.

    To address these issues, the Departments seek public comment by January 3, 2017, on potential model forms that could be used by participants and their representatives to request information on various NQTLs. The Departments also seek public comment on the disclosure process for MH/SUD benefits and on steps that could improve state market conduct examinations or federal oversight of compliance by plans and issuers, or both.

     

    By Danielle Capilla, Originally published by United Benefit Advisors – Read More

  • Ask the Experts: Dealing With FSA Carryover Funds | California Benefit Advisors

    December 19, 2016

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    Question: If an employee has a small health flexible spending account (FSA) balance with a carryover to the next year, and the employee chooses not to participate in the new FSA year, can the employer force the employee to use those funds so as not to incur additional administrative fees in the next plan year?

    Answer: An employer can prevent “perpetual carryovers” by carefully drafting the cafeteria plan document with respect to carryover amounts. IRS guidance allows carryovers to be limited to individuals who have elected to participate in the health FSA in the next plan year. Health FSAs may also require that carryover amounts be forfeited if not used within a specified period of time, such as one year. Note that this plan design requires additional administration (to track the time limit for each carryover dollar, for instance) as well as ordering rules (e.g., will carryovers be used first?), so you will need to carefully review the cafeteria plan document. Under no circumstances are amounts returned to participants.

    According to IRS guidance, a health FSA may limit the availability of the carryover of unused amounts (subject to the $500 limit) to individuals who have elected to participate in the health FSA in the next year, even if the ability to participate in that next year requires a minimum salary reduction election to the health FSA for that next year. For example, an employer sponsors a cafeteria plan offering a health FSA that permits up to $500 of unused health FSA amounts to be carried over to the next year in compliance with Notice 2013-71, but only if the employee participates in the health FSA during that next year. To participate in the health FSA, an employee must contribute a minimum of $60 ($5 per calendar month). As of December 31, 2016, Employee A and Employee B each have $25 remaining in their health FSA. Employee A elects to participate in the health FSA for 2017, making a $600 salary reduction election. Employee B elects not to participate in the health FSA for 2017. Employee A has $25 carried over to the health FSA for 2017, resulting in $625 available in the health FSA. Employee B forfeits the $25 as of December 31, 2016 and has no funds available in the health FSA thereafter. This arrangement is a permissible health FSA carryover feature under Notice 2013171. The IRS also clarifies that a health FSA may limit the ability to carry over unused amounts to a maximum period (subject to the $500 limit). For example, a health FSA can limit the ability to carry over unused amounts to one year. Thus, if an individual carried over $30 and did not elect any additional amounts for the next year, the health FSA may require forfeiture of any amount remaining at the end of that next year.

    Originally published by ThinkHR – Read More

  • Employer Exchange Subsidy Notices: Should You Appeal? | California Employee Benefits

    December 16, 2016

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    Under the Patient Protection and Affordable Care Act (ACA), all public Exchanges are required to notify employers when an employee is receiving a subsidy (tax credits and cost-sharing reductions) for individual health insurance purchased through an Exchange. According to the final rules published in August 2013, employers have the right, but are not required, to engage in an appeal process through the IRS if they feel an employee should not be receiving a subsidy because the employer offers minimum value, affordable coverage.

    Some states began sending notices from public Exchanges indicating that one or more employees are currently receiving a subsidy in 2015, but the U.S. Department of Health and Human Services (HHS) announced that all federally-facilitated Exchanges will begin sending notices in 2016. Just because the employer receives a notice, it does not mean the employer will actually owe a penalty payment under Section 4980H.

    Dan Bond, Principal, Compliancedashboard, offers this important commentary: “I think it’s important for employers to remember that just because they may receive one of these notices from the IRS telling them that one of their employees is receiving a subsidy on the exchange, it does not necessarily mean the employer has exposure to a penalty. There are various reasons that someone might have received a subsidy so the employer can use this notice to determine exactly why and whether or not they have any exposure. In fact, small employers will also receive these notices and they are not even subject to the employer shared responsibility mandate so they will not be subject to penalties, regardless.”

    subsidy appeal chart

    Appeal Form and Process
    So long as the requirements in the final rules are met, each state Exchange is allowed to set up its own process and procedures. Information about how to file an appeal is usually included in the notice, but it may be necessary to check with the applicable Exchange to find out exactly how to handle the appeals process, the particulars of which are managed by each Exchange separately.

    The form currently used by federally-facilitated Exchanges, as well as by eight states, may be found on Healthcare.gov (approximately half of the states are currently using this form and process). The forms and processes for all other states may be found by visiting a state’s Exchange site. The process generally involves filing a paper appeal, providing documentation, and in some cases participating in a hearing.

    Conclusion
    The employer does not have to appeal to avoid a penalty under Section 4980H, and penalties will not apply until after the employer reporting (via Forms 1094-C and 1095-C) is reconciled. There is some speculation that it may be more beneficial to appeal with the Exchange rather than waiting to appeal later with the IRS. This is a fairly new process, so the best approach for employers may remain somewhat unclear until the first year of employer reporting is completed.

    Filing an appeal as soon as possible may help avoid hassles with the IRS and prevent the individual from receiving a subsidy for which they are ineligible. At the same time, although the appeals process does not appear to be a difficult one, it is possible that everything could be cleared up more quickly by simply communicating directly with the employee that they may be receiving the subsidy in error.

     

    By Vicki Randall, Originally published by United Benefit Advisors – Read More

  • The New HSA Under Trump’s Proposed Health Plan | California Benefit Advisors

    December 13, 2016

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    piggybankWith the election of a new President, health care plans and the fate of the Affordable Care Act are a hot topic of discussion. As part of his 7-tier health plan, President-Elect Donald Trump has proposed a shift in the way health savings accounts (HSAs) are offered to working Americans. Simply put, an HSA is a savings account for medical expenses. They are tax advantaged accounts an individual can open in addition to their current health plan to pay out-of-pocket expenses ranging from co-pays to surgery deductibles. Typically, HSAs have been offered to individuals with high deductible health plans (HDHPs). However, if the President-Elect’s new health plan strategy is enacted, an HDHP would no longer be an eligibility requirement, significantly impacting healthcare options for millions of Americans.

    HSA vs. FSA – Which one is right for you?

    When choosing a savings account for medical expenses there are two options: HSAs and FSAs. Each type of account is generally non-taxable for qualified medical expenses, except under certain circumstances in which a medical expense was incurred prior to opening an HSA, and each is accumulated by contributions from your paycheck. Some employers offer HSA and FSA matching contributions.

    In the past, there have been some prominent differences between health savings accounts and flexible spending accounts (FSAs). Traditionally, FSAs have been the option for those who choose health plans with low deductibles. The money you contribute from your paycheck into your FSA account must be spent within the year, and cannot be rolled over. Conversely, you must have an HDHP to open an HSA, and funds accumulated from paychecks can be rolled over into the next year if left unused.

    Accumulating tax advantages have made HSAs more popular and beneficial in comparison to FSAs. When it comes to changing jobs, HSAs typically are not affected, while FSAs are impacted due to restrictions in rollover of funds. However, FSAs do not have eligibility requirements, which have made them more widely available to individuals.

    What’s Next? How HSAs would change under Trump’s health plan

    Trump’s new health plan would make HSAs readily available to everyone by removing the HDHP eligibility requirements that are currently in place. In addition to this drastic barrier removal, Trump has said he will change policy to allow families to share the accounts between one another. Any contribution or interest-earned by an HSA is tax-deductible, and individuals with HSAs can withdrawal money tax-free for certain medical expenses ranging from transplants to acupuncture. The combination of these three tax-advantages creates an unmatched savings option for those who choose HSAs. While Trump has said he will change some factors of HSAs, he plans to keep these tax advantages.

    Who will benefit from the new HSA model?

    In the past, HSAs have been more attractive for retirees. Health care costs tend to rise in the retirement stage of life, which makes an HSA a more cost-efficient option for retirees. Since individuals are allowed to take out money for medical expenses without being taxed, retirees have the potential to save large amounts of money in the later stages of their life. However, under Trump’s proposed plan, HSAs will also become increasingly attractive for younger people. Because individuals will continue to be allowed to roll over money contributed to their HSA in a given year into the next, young and healthy people will be able to save sizable amounts for use later in life.

    While much remains to be seen about which aspects of President-Elect Trump’s health plan will be enacted when he takes office, take the time now to educate yourself on how an HSA can work for you.

     

    By Nicole Federico & Kate McGaughey, eTekhnos

  • IRS Delay in 6055 and 6056 Reporting for 2017 | California Employee Benefits

    December 8, 2016

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    1208Under 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. In order for the Internal Revenue Service (IRS) to verify that (1) individuals have the required minimum essential coverage, (2) individuals who request premium tax credits are entitled to them, and (3) ALEs are meeting their shared responsibility (play or pay) obligations, employers with 50 or more full-time or full-time equivalent employees and insurers will be required to report on the health coverage they offer. Final instructions for the 1094-B and 1095-B and the 1094-C and 1095-C forms were released in September 2016, as were the final forms for 1094-B, 1095-B, 1094-C, and 1095-C. The reporting requirements are in Sections 6055 and 6056 of the ACA.

    Reporting was first due in 2016, based on coverage in 2015. Reporting in 2017 will be based on coverage in 2016. All reporting will be for the calendar year, even for non-calendar year plans.

    On November 18, 2016, the IRS issued Notice 2016-70, delaying the reporting deadlines in 2017 for the 1095-B and 1095-C forms to individuals. There is no delay for the 1094-C and 1094-B forms, or for forms due to the IRS.

    Original Deadlines Delayed Deadlines
    DUE TO THE IRS
    The 1094-C, 1095-C, 1094-B, and 1085-B forms were originally due to the IRS by February 28, if filing on paper, or March 31, if filing electronically
    Deadline to the IRS for all forms remains the same.
    DUE TO EMPLOYEES
    The 1095-C form was due to employees by January 31 of the year following the year to which the Form 1095-C relates.
    DUE TO EMPLOYEES
    The 1095-C form is now due to employees by March 2, 2017.
    DUE TO INDIVIDUALS AND EMPLOYEES
    The 1095-B form was due to the individual identified as the “responsible individual” on the form by January 31.
    DUE TO INDIVIDUALS AND EMPLOYEES
    The 1095-B form is now due to the individual identified as the “responsible individual” on the form by March 2, 2017.

     

    For information on the extension process as well as the impact on individual taxpayers, view UBA’s ACA Advisor, “IRS Delay in 6055 and 6056 Reporting for 2017”.

     

    By Danielle Capilla, Originally published by United Benefit Advisors

  • California Dreamin – new laws affecting employer employee relationship

    December 6, 2016

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    arrowlogoAB 2337 – employers with 25 or more employees must provide written notice to employees of their rights to take protected time off for domestic violence, sexual assault or stalking.  This is an expansion of existing law, now requiring that notice be provided.  Conformity with the law is required once the Labor Commissioner develops the proper notice.

    New Workers Compensation rules – which will be issued as a package from the Division of Workers Compensation over the course of 2017.  Also, the WCIRB (Workers Compensation Rating Bureau) has recommended a 4.3% drop in 2017 premiums as part of pure premium.

    SB 1167 – OSHA must provide, by January 1, 2019, a heat illness and injury prevention standard applicable to workers working in indoor places of employment.

    SB 1234 – establishes the Secure Choice Retirement program for all covered private sector employees.  Mandates the creation of savings accounts for covered workers whose employers do not offer a retirement savings option to be automatically enrolled.  The program will be phased in over a 36 month period and overseen by a new Secure Choice Retiremetn Savings Investment Board:

    • Groups of 100 or more employees – must implement within first 12 months
    • Groups of 50-99 employees – must implement within 24 months
    • Groups of 5 to 49 employees – must implement within 36 months

    Employees do have the right to opt out of the program.  The Board to set the initial employee contribution between 2 and 5% of their gross wages and employers always retain the right to provide their own employer sponsored retirement plans in lieu of the new program.

  • The Shift Away from Health Risk Assessments | California Employee Benefits

    December 2, 2016

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    1129Historically, employers have utilized health risk assessments (HRAs) as one measurement tool in wellness program design. The main goals of an HRA are to assess individual health status and risk and provide feedback to participants on how to manage risk. Employers have traditionally relied on this type of assessment to evaluate the overall health risk of their population in order to develop appropriate wellness strategies.

    Recently, there has been a shift away from the use of HRAs. According to the 2016 UBA Health Plan Survey, there has been a 4 percent decline in the percentage of employer wellness programs using HRAs. In contrast, the percentage of wellness programs offering biometric screens or physical exams remains unchanged – 68 percent of plans where employers provide wellness offer a physical exam or biometric screening.

    One explanation for this shift away from HRAs is an increased focus on helping employees improve or maintain their health status through outcome-based wellness programs, which often require quantifiable and objective data. The main issue with an HRA is that it relies on self-reported data, which may not give an accurate picture of individual or population health due to the fact that people tend to be more optimistic or biased when thinking about their own health risk. A biometric screening or physical exam, on the other hand, allows for the collection of real-time, objective data at both the individual and population level.

    Including a biometric screening or physical exam as part of a comprehensive wellness program can be beneficial for both the employer and employees. Through a biometric screening or physical exam, key health indicators related to chronic disease can be measured and tracked over time, including blood pressure, cholesterol levels, blood sugar, hemoglobin, or body mass index (BMI). For employees, this type of data can provide real insight into current or potential health risks and provide motivation to engage in programs or resources available through the wellness program. Beyond that, aggregate data collected from these types of screenings can help employers make informed decisions about the type of wellness programs that will provide the greatest value to their company, both from a population health and financial perspective.

    One success story of including a physical exam as part of a wellness program comes from one of our small manufacturing clients. From the initial population health report, the company learned that there was a large percentage of its population with little to no health data, resulting in the inability to assign a risk score to those individuals. It is important to note that when a population is not utilizing health care, it can result in late-stage diagnoses, resulting in greater costs and a burden for both the employee and employer. In addition, there was low physical compliance and a high percentage of adults with no primary care provider. In order to capture more information on its population and better understand the current health risks, the company shifted its wellness plan to include annual physicals as a method for collecting biometric data for the 2016 benefit year. Employees and spouses covered on the plan were required to complete an annual physical and submit biometric data in order to earn additional incentive dollars.

    By including annual physicals in its wellness program, positive results were seen for employees and spouses and the company was able to make an informed decision about next steps for its wellness program. After the first physical collection period, the percentage of individuals with little to no information was reduced from 31 percent to 16 percent (Figure A). Annual physical compliance increased from 36 percent in 2015 to over 80 percent in 2016 (Figure B), which means more individuals were seeing a primary care provider. As a result of increased biometric data collection and one year of Vital Incite reporting, the company was able to determine next steps, which included addressing chronic condition management, specifically hypertension and diabetes, with health coaching or a disease management nurse.

    Figure A – RUB Distribution 2014 – 2016

    RUB Distribution 2014-2016

    Figure B – Preventive Screening Compliance

    Preventive Screening Compliance

    Employers that are still interested in collecting additional information from employees may consider including alternatives to the HRA, such as culture or satisfaction surveys. These tools can allow employers the opportunity to evaluate program engagement and further understand the needs and wants of their employee population.

     

    Originally published by United Benefit Advisors – Read More

  • BREAKING NEWS: Texas Court Issues Injunction Blocking New December 1st Overtime Regulations | California Benefit Advisors

    November 29, 2016

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    Ten o'clock on the white wall clocksOn November 22, 2016, a federal district court in Texas granted a preliminary injunction that temporarily blocks the U.S. Department of Labor (DOL) from implementing and enforcing its recently revised regulations on the white collar exemptions to the Fair Labor Standards Act (FLSA). The regulations, which were released in May and scheduled to go into effect on December 1, would more than double the minimum salary requirement certain executive, administrative, and professional employees must receive in order to be exempt from overtime.

    Employers should note that this is only a temporary injunction, not a permanent one. The injunction applies nationwide and simply prevents the regulations from going into effect on December 1. There will be a decision issued at a later date on the actual merits of the case, so changes in the FLSA salary threshold for exemption may be back.

    Impact for Employers

    For many employers, this is good news for the time being. As a result, employers that have not made the necessary changes to their compensation plans have more time to plan for the changes in the event the regulations are upheld. Employers that have already made changes to their compensation plans will need to determine if they want to continue with the changes, suspend the changes, or roll back those changes pending any legal developments. These decisions should be made in accordance with any applicable state or local laws. Employers should consult their attorneys to determine what course of action is best for them.

     

    Originally published by ThinkHR – Read More

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