Employees report difficulty navigating healthcare options

Benefits issues can lead to diminished productivity, finds new research, as workers spend an average of three and a half hours a month dealing with healthcare issues at work. READ MORE »

California Passes Minimum Wage Hike

California Law Alert April 4, 2016

California Passes Minimum Wage Hike Today Governor Jerry Brown signed a bill that will incrementally raise the California minimum wage to $15 per hour over the next seven years. Below is the schedule of increases by size of employer. Employers with 26 or more employees: 1. $10.50 – January 1, 2017 2. $11.00 – January 1, 2018 3. $12.00 – January 1, 2019 4. $13.00 – January 1, 2020 5. $14.00 – January 1, 2021 6. $15.00 – January 1, 2022 Employers with 25 or fewer employees: 1. $10.50 – January 1, 2018 2. $11.00 – January 1, 2019 3. $12.00 – January 1, 2020 4. $13.00 – January 1, 2021 5. $14.00 – January 1, 2022 6. $15.00 – January 1, 2023 The bill allows the governor to delay a particular increase for one year in the event of a budget crisis or an economic downturn. With these increases, California joins New York in becoming the first states to pass legislation that will result in a statewide minimum wage of $15 per hour.

The ACA: What’s been repealed, delayed or retained

 By Zack Pace
January 20, 2016

SourceMedia's Partner Insights program enables marketers to deliver relevant content and insights directly to the Employee Benefit News audience via SourceMedia's digital media platforms. Partner Insights content is produced by the marketer. To find out more, contact Jim Callan at James.Callan@sourcemedia.com

 

Commentary: As you’ve no doubt noticed, the federal government made sweeping legislative and regulatory changes to the Affordable Care Act during the fourth quarter of 2015. During the last two weeks of December, I felt like I was drinking from a six-inch fire hose. How about you?
For 2016 planning purposes, I began making a list of the key items that have been repealed or delayed and those that we should continue to keep a keen eye on. With this list now complete, I thought I’d share.
Repealed provisions
1. Free-choice vouchers. Remember those? They were repealed back in 2011.
2. Form 1099 reporting. Remember how much added administrative work this provision would have created?
3. The $2,000-deductible ceiling. This provision coupled with Repealed Provision No. 5 (below) was scheduled to create a perfect storm this year for employers with 51 to 100 employees.
4. The automatic enrollment mandate. Reportedly, our elected representatives pressed for this provision’s repeal not because of its administrative infeasibility but because of the projected loss in tax revenue from increased salary reductions via Section 125 plans. Seriously.
5. The mandatory expansion of small group to 100 employees. I wish I had a quarter from everyone that joked, “Hey, Zack – they named an ACA after you!” How thrilling.
Delayed provisions
1. ACA nondiscrimination requirements. While these TBD rules were delayed indefinitely some time ago, some insiders expect finalization relatively soon. Sections 125 and 105(h) nondiscrimination rules remain alive and well.
2. The Cadillac tax. This excise tax is delayed until 2020. Per industry insiders, it seems awfully likely that this tax will be repealed before then. We’ll see. For those employers that began a multiple-year incremental mitigation strategy (aka glide path), they’ll need to decide if that strategy ought to be put in moth balls for a couple of years. Keep in mind that many employers can likely keep this excise tax at bay until 2022 by simply ending the flexible spending account, making health savings account contributions post-tax and eliminating their richest medical plan. 2022 is six years from now. Who knows where we’ll be by then. When it comes to increased taxation on employer- sponsored health plans, the more immediate concern, apparently, is that Section 125 becomes a bargaining chip during the budget negotiations next year between Congress and the new administration.
Lingering provisions of keen importance
1. Annually determining large-employer status. To determine status for 2016, ask your accountant to run Treasury’s formula to determine how many full-time employees plus full-time equivalents your firm averaged in the previous calendar year. Employers with 50 or more are generally subject to shared responsibility. Employers in most states with 51 or more are generally not subject to the fair health insurance premium rules (only fully insured plans are subject to these latter rules). Can anyone explain to me why they didn’t simply select 50 or 51 for both definitions?
2. Employer shared responsibility. Didn’t we make this topic a little more complicated than it needed to be? It turns out that it’s relatively easy to eliminate this penalty risk by offering to all employees that work 30 hours or more a week a low-cost plan (relatively speaking) that meets minimum value and that has an employee contribution rate for single coverage that meets the federal poverty-level safe harbor (i.e., less than around $93 per month). We can offer this “ACA easy button” plan, continue offering the normative health plans employees prefer and call it a day. Of course, for those employers with seasonal and/or variable-hour employees, tracking complications remain.
3. Eliminating opt-out credits. Under pending regulations, employers that offer cash to those employees that waive the health plan will find it harder to satisfy the affordability requirements of employer shared responsibility. See No. 5 in the below further reading list for more detail.
4. ACA reporting. Also known as Form 1095-C/1094-C reporting. The topic du jour.
5. The market reform rules. For example: elimination of pre-existing condition limitations, age 26 expansion, out-of-pocket limit ceiling, 100% coverage for preventive services (grandfathered plans are exempt from these latter three). If your health plan is fully insured, the insurer should have made these changes. If your plan is self-funded, the TPA should have. Either way, double-check.

Employers advised to prepare for questions on ACA reporting form

 

By Andrea Davis
January 21, 2016

 

As employers prepare to distribute Forms 1095 to employees by the newly extended IRS deadline of March 31, they should brace for increased questions from employees about the new forms.
In Notice 2016-4, issued by the IRS on Dec. 28, the agency extended the deadlines for both providing individuals with the reporting forms required as part of the Affordable Care Act and for filing them with the IRS, although it also said “employers and other coverage providers are encouraged to furnish statements and file the information returns as soon as they are ready.”
In the year-end notice, “the IRS indicated to employers that there’s going to be no more extensions,” says Laura Kerekes, chief knowledge officer with ThinkHR Corporation. “This is already more generous than what the initial filing extension was. The feeling is that you better get these done and into the government.”
The IRS notice also provides guidance to those who might not receive a 1095-C by the time they file their 2015 tax returns, saying people can rely on information they’ve already received from their employer outlining whether they’re enrolled in employer-sponsored coverage or not.
“That’s pretty important for employers to just make note of and maybe get ahead of with communication to their employees to say the filing deadlines have been extended so the company will not have your 1095-C done,” says Kerekes, adding employers can let employees know “this is the information we've already provided you, you can rely on it when you're working on your taxes and filing by your April 15 deadline.”
And while employers with more than 50 full-time employees need to compile data for the new forms to demonstrate employee healthcare coverage offerings under the ACA, two-in-five employers say they are unfamiliar with these forms altogether, finds a recent study from ADP.
“The good news is that 60% were highly or very familiar with the 1094-C and were working on it,” says Vic Saliterman, senior vice president and general manager of ADP’s healthcare reform business. “The fact that, given the nature of the way the law is written and the penalty, 40% were not familiar [with the forms] was certainly concerning.”
More than half (52%) of midsized businesses and 45% of large employers are unsure if they’re at risk of violating ACA compliance requirements this year and nearly one-in-five employers think they are at risk of not complying with Form 1095-C requirements, according to the ADP report.

Understanding the retiree benefit of HSAs

In this age of high-deductible healthcare plans, industry experts say employers and employees should increasingly consider the benefits of health savings accounts as a retiree benefit. HSAs, they say, offer cost-shifting benefits for employers and employees that advisers should be educating clients about.“Retiree benefits are going through a dramatic change,” says Seth Ravine, chief revenue officer of the Tampa, Fla.-based Acclaris. “Employers are looking for ways to cut costs, and retirees are feeling the brunt of that.”

According to Mercer’s latest data from the Inside Employees' Minds Survey, there is a growing concern about healthcare expenses in retirement. The survey also found most employees between the ages of 35 and 64 place a high value on an employer’s retirement benefits and low healthcare costs, ranking them as the second and third most valued elements of the employment deal, behind base pay.
A high-deductible healthcare plan coupled with an HSA is a way for employers to cut healthcare costs for the company, yet still satisfy employee retirement and healthcare needs, experts say.
Also see: “7 things employers and employees don’t know about HSAs.”
“The individual or employee is going to have to take on more control and financial burden than any other previous generation,” Ravine says.
“A high-deductible healthcare plan has short term and long-term gains,” he says, adding that advisers should work with employers to understand the short term and long-term goals.
“Most employers will see the short-term drops of healthcare costs immediately, but you haven’t actually changed the trend of your healthcare liability,” he says. “What HSAs can do long term is, if employees start them early, invest in them early, and learn how to utilize them — including when to draw from HSAs and when it is best to pay out of pocket — now you’re giving real dollars to individuals. At the same time you’re giving yourself as the employer the ability to push more costs onto employees.”
Education
Educating employees about what an HSA is and how it can be used as a tool for meeting healthcare costs in retirement is key, experts say.
“Most Americans are unprepared for healthcare costs in retirement, and an HSA is the best way to save for that,” said Eric Roberts, a consultant at Nyhart Actuary & Employee Benefits, during a recent webcast hosted by the Healthcare Trends Institute.
“If you have already made it into the retiree population and haven’t had the ability to open an HSA, you’re in a tight spot,” says Ravine. “Once you’re on Medicare, you can’t contribute to an HSA anymore, but the next generations have a real chance to utilize HSAs in their retirement.”
Still, employers and employees hold several misconceptions about how an HSA works, indicating a need for adviser help to understand them, including how an HSA differs from an FSA and an HRA.
Employees have a lack of awareness surrounding several HSA features and benefits, says HSA custodian company HealthEquity. For example, for some employees and employers the fact that HSA funds roll over and are not “use it or lose it,” is not common knowledge, the company says.
Many consumers also don’t know that after age 65, you can withdraw money from an HSA for any type of purchase (not just medical expenses) without penalty.
If used for other expenses, the amount withdrawn will be taxable as income but will not be subject to any other penalties. Individuals under age 65 who use their accounts for non-medical expenses must pay income tax and a 20% penalty on the non-qualified withdrawal.

By Melissa A. Winn
      
 

Could state waivers undo the ACA's employer mandate?

The ACA allows states, beginning in January 2017, to ask the federal government to waive almost every major coverage requirement of the health care reform law, including the employer mandate. Employers and other benefit industry stakeholders hoping to be relieved from ACA requirements may consider state waivers the elixir they’ve been waiting for, but are they? READ MORE »

Reminder: Affordable Care Act 2016 Changes

Under the Affordable Care Act, there are several changes for large employers (100+ full time equivalent employees) and mid-sized employers (50-99 full time equivalent employees) coming in 2016. Here are the major ones to be aware of: Employer Mandate Reporting Begins (Section 6056 Reporting) – Beginning in the 2015 tax year, all mid-sized and large employers are required to perform Section 6056 reporting. Just like W-2s, copies of the forms must be provided to employees by January 31st and filed with the IRS by February 28th (paper) or by March 31st (electronic). The first reporting will take place early in 2016. Mid-Sized Employer Transitional Relief Expires – In 2015, there was some transitional relief that exempted most mid-sized employers from being subjected to employer mandate penalties. This transitional relief expires in 2016, so both mid-sized and large employers will be subject to employer mandate penalties attributable to 2016. Most mid-sized employers will enjoy reprieve until their plan renews in 2016. Counting Employee Transitional Relief Expires – In 2015, employers were permitted to determine their total number of full-time equivalent employees by averaging any consecutive 6-month period in 2014. However, in 2016, the employer will be required to average their FTEs for all 12 months in 2015 to determine if they are required to comply with the mandate. (Note: It is possible that this transitional relief may be extended.) Employer Mandate Margin of Error Shrinks – In 2015, large employers could fail to offer coverage to up to 30% of their full-time employees and still not face employer mandate penalties. In 2016, the margin of error shrinks to 5%. So in 2016 and beyond, both large and mid-sized employers will be required to offer coverage to 95% of their full-time employees or face a penalty. Employer Mandate Penalty Calculation Changes – In 2015, when calculating the "A" or "no coverage" penalty, large employers could subtract out their first 80 full-time employees. In 2016 and beyond, both mid-sized and large employers may subtract out only their first 30 full-time employees when calculating the "A" penalty.

More Companies Increased Contributions to Help Employees Pay Premiums

Companies are more likely to have added or increased contributions to their employees’ premiums this year compared to the last two years, according to a study by the Transamerica Center for Health Studies (TCHS). The study of 1,500 employers was conducted by the Harris Poll from August 14 to September 3. Forty-four percent of companies expect their healthcare costs to increase in the next 24 to 36 months.

Most employers are trying to keep constant their contribution to employees’ premiums (57%), deductibles (60%), and co-pays/coinsurance (58%). Thirty percent want to maximize their contributions to employees’ premiums to help manage health insurance costs. TCHS Executive Director Hector De La Torre said, “The anticipated increase in healthcare costs correlates to improved quality for many employers.” Forty percent expect the quality of health insurance they offer employees to improve in the next 12 to 36 months while only 10% expect the quality to decline. Companies are most concerned about managing healthcare costs related to cancer (71%), drug expenses (69%), and diabetes and obesity (68%).

Sixty-one percent of employers offer wellness programs. Forty-nine percent of employers that have had a wellness program in the past 12 months say that saving money was the motivation. Eighty-two percent of companies say their wellness program improved workers’ health; 80% say it improved productivity and performance, and 71% say it reduced healthcare costs. De La Torre said, “Providing the best healthcare benefit package possible remains the top healthcare-related priority for employers. Interestingly, employers that offer healthcare benefits are more likely to anticipate profitability, hiring and wage increases in the next two years.”

Navigating the employer mandate for 2016

 

Employer Mandate

IN THIS GUIDE:

How Do I Know if the Employer Mandate Applies to Our Organization?

When Did the Employer Mandate Begin?

How Do I Immunize My Organization from Employer Mandate Penalties?

Do I Have to Offer Coverage to Part-time, Seasonal and Variable Hour Employees?

How Are Employer Mandate Penalties Calculated?

What Employer Mandate Reporting is Required?

 

Navigating the Employer Mandate  (send for a free copy to;

 

info@amsisure.com

subject line: guideline to health care reform 2016 

 

2-Minute HR

Our 2-Minute HR trainings serve up important HR topics in segments that you can watch in less time than it takes to drink a cup of coffee. So take a couple of minutes to learn some great HR basics, tips, and best practices.  Browse our most recent trainings below, or filter them according to the HR topic you're most interested in.

 

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• Health Plans Expect Group Premium Increase of 7.2% in 2016, 10.8% for Individual Plans

• Health Plans Expect Group Premium Increase of 7.2% in 2016, 10.8% for Individual Plans

You can check for the plans and relates of all companies in privacy, then contact us to assist you.

January 2016 rates now available.

 

Group Health Plans

 

Small Business (2-50 Employees)

Individual / Family Health Plans

• Standard Health Insurance

info@amsinsure.com

Employers plagued by ACA administrative burdens

By Nick Otto
November 3, 2015

As employers face growing challenges trying to balance employees’ well-being with containing benefits-related company costs, many are seeking guidance on how to manage the administrative and compliance requirements of the Affordable Care Act.

And as the health care law continues to evolve, be it through Congressional bills or Supreme Court rulings, employers are battling a number of reforms and regulations, and 60% of employers say they need help managing the ACA landscape, according to the Guardian Workplace Benefits Study.

Also see: “The long regulatory road trip for benefits professionals.”

“As employers adapt to the ACA, we’re seeing greater adoption of private exchanges and self-funded medical plans paired with stop-loss insurance, so employers can deliver the workplace benefits their employees rely on while addressing the challenges they are facing,” says Ray Marra, Guardian’s senior vice president, group products.

As companies reassess their approach to benefits, the report notes, three trends are gaining momentum: increased outsourcing, interest in private exchanges, and consideration of self-insurance.

“The ACA has intensified challenges for a majority of employers,” Marra says. “They must deal with administrative and compliance requirements, trying to offer employees wider benefits choices and an effective enrollment experience and controlling costs.”

The study notes one in three employers expects to outsource more aspects of their benefits program as a direct result of the ACA. Nearly 70% of employers expect greater compliance and administrative burdens because of the law.

Also see: “Boosting benefits enrollment with technology.”

And the market for benefits outsourcing appears to have considerable room for expansion, according to the report. Only 16% of all employers are engaged in a “high level” of outsourcing (where all administration tasks are outsourced to a vendor), while at the other end of the spectrum, just 15% report doing no outsourcing.

Companies with fewer than 1,000 employees are more likely than larger companies to outsource their benefits administration to a single third-party administrator (36% versus 22%), according to the report. Nearly half (47%) of employers that outsource all of their administration and enrollment tend to use a single vendor compared to 25% of those doing just a little to no outsourcing.

Also see: “Budget reconciliation sought for ACA repeal.”

“It’s important for brokers to provide guidance on emerging options for funding and delivering employee benefits which can help employers respond,” says Marra.

In addition, some other key findings from the report include:

• About 20% of employers expect to offer benefits on a private exchange in the next year. Top reasons are to increase employee choice and to improve the employee experience. Seven in ten employers say it is highly important to offer benefits that meet their employees’ personal needs and help them make better benefits choices.
• Of those thinking of self-insuring, 58% say the ACA is the impetus and half of those planning to self-insure expect to carry stop-loss insurance. Self-insuring medical plans is a less common funding option for smaller firms but is receiving increased attention due to the ACA. Seventy-eight percent of employers expect benefit cost increases due to the ACA, impacting an employer’s health benefits offering.
• A tailored benefits and communication approach is becoming increasingly critical to address employees’ financial needs at different points in their work stages.

 

Federal repeal of small group expansion won't impact California

On October 8, 2015, the federal government repealed the decision to redefine customers with 51 to 100 employees as small groups. That means these customers will continue to be defined as large groups and must purchase health coverage in the large group market. The federal legislation still allows individual states the option to expand the definition of small group from 1 to 100 employees in 2016, which is the definition currently set by the California legislature. Unless further guidance is issued by the state, we are moving forward with the transition of groups with 51 to 100 employees in California to small business at their 2016 renewals. We'll keep you updated should more information become available. If you have questions, please contact your Kaiser Permanente representative.

Focus on Nonqualified Deferred Compensation Plans

If certain executives are critical to the success of your business, providing them with a nonqualified deferred compensation (NQDC) plan could be an effective retention strategy. Such a plan represents an agreement whereby one person (or legal entity) promises to pay compensation at some time in the future. The plan is a contractual agreement between the employer and an employee, which specifies when and how future compensation will be paid.
When the plan is properly arranged, the employee defers taxation until benefits are actually paid. Because these plans are not governed by Federal pension laws, they are considered "nonqualified," and they can be extremely flexible. Their very flexibility—and the associated risks—means that professional guidance from tax, legal, and financial professionals is required. From a business standpoint, it is important to establish an informal funding mechanism to help ensure the benefits are available when the employee is entitled to them. From a tax standpoint, it is important to ensure that the employee's benefits are taxed upon receipt, and not before. Professional advice is advised to ensure compliance with all tax issues related to NQDC plans, including the Internal Revenue Service's "constructive receipt doctrine" and IRC Section 409A, the latter of which prescribes rules regarding the timing of deferral elections,
acceleration of benefits, and distribution of deferred amounts.

ACA Spurring Interest in Self-Insurance

Self-insurance can create risk exposures that most smaller employers don’t want to take. Still, 15 percent of smaller employers (1-199 employees) find the benefits outweigh the risks. Read on for details.

How to Survive the Surge with the expanding world of ACA Audit & Penalty Enforcement

While there have been audits since 2012, it is now growing as we move into the need for revenue generation from the various forms of penalty noncompliance.  With more agencies now doing audits; Department of Labor, Department of Health and Human Services, and the big gun Internal Revenue Service your chances are growing of having an audit.

Agencies are making it easier for people to file complaints with agencies on line, and with all the forms being reviewed it is making it easier to be an audit target.  There are significant penalties for both small and large businesses.  Self-reporting on the various forms is making it difficult for employers and giving the agencies an opportunity to have information to look at doing an audit.  Also cross fertilization from one agency to another can lead to audit  uncovering a problem covered by different agency.

KNOW the ENFORCEMENT ZONES

DOL

·         ACA

·         Erisa including Form 550, Plan documents, and summary plan descriptions

·         HIPPA

HHS

·         Summary of benefits coverage

·         HIPPA privacy, security, and breach of notification rules

·         Medicare secondary payer through CMS

IRS

·         ACA including reporting

·         Misclassification of employees as independent contractors

·         COBA

·         Employee benefit related tax issues, such as group term life insurance, valuation.  Cafeteria plan operations, and discrimination testing duties

Equal Employment Opportunity Commission (EEOC)

·         Americans with Disabilities Act

·         Age Discrimination in Employment Act

Genetic Information

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Your  key employees need their wages. Have you talked to them about getting their income covered - with Disability Income Insurance?

 

 

We want to provide you with something that is of value to you as an employer and your key employees.  Its easy to provide a benefit at a low cost unlike other benefits. Contact us for a no obligation quote.

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Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act

On Feb. 10, 2014, the IRS and Treasury issued final regulations on the Employer Shared Responsibility provisions under section 4980H of the Internal Revenue Code. More information is available on the employer shared responsibility page. The following questions and answers provide helpful information about the guidance:

• Basics of the Employer Shared Responsibility Provisions: Questions 1-3
• Which Employers are Subject to the Employer Shared Responsibility Provisions: Questions 4-14
• Identification of Full-Time Employees: Questions 15-17
• Liability for the Employer Shared Responsibility Payment: Questions 18-23
• Calculation of the Employer Shared Responsibility Payment:Questions 24-26
• Making an Employer Shared Responsibility Payment: Questions 27-28
• Transition Relief: Questions 29-39
• Basics for Small Employers: Questions 40-42
• Related Provisions: Questions 43-47
• Additional Information: Questions 48-56

Basics of the Employer Shared Responsibility Provisions

1. What are the Employer Shared Responsibility provisions?
For 2015 and after, employers employing at least a certain number of employees (generally 50 full-time employees or a combination of full-time and part-time employees that is equivalent to 50 full-time employees) will be subject to the Employer Shared Responsibility provisions under section 4980H of the Internal Revenue Code (added to the Code by the Affordable Care Act). As defined by the statute, a full-time employee is an individual employed on average at least 30 hours of service per week. An employer that meets the 50 full-time employee threshold is referred to as an applicable large employer.
Under the Employer Shared Responsibility provisions, if these employers do not offer affordable health coverage that provides a minimum level of coverage to their full-time employees (and their dependents), the employer may be subject to an Employer Shared Responsibility payment if at least one of its full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Affordable Insurance Exchanges, also called a Health Insurance Marketplace (Marketplace).

Workers missing out on billions in unclaimed 401(k) matches

by Andrea Davis

MAY 13, 2015
11:39am ET

 

While the majority of employers offer a company match on their 401(k) plan, employees are not taking advantage of the benefit, passing up the chance to potentially receive thousands of dollars every year.

 

A new research report from Financial Engines, an investment advising company, estimates that Americans leave $24 billion in unclaimed 401(k) company matches on the table each year.
Financial Engines examined the saving records of 4.4 million retirement plan participants at 553 companies, and found that one-in-four employees (25%) miss out on receiving the full company 401(k) match by not saving enough. The typical employee failing to receive the full match leaves $1,336 of potential “free money” on the table each year, which equates to an extra 2.4% of annual income not received. With compounding, this could amount to as much as $42,855 over 20 years.

Disability Month; learn how to protect your income!

Now is a great time to learn about protecting your most valuable asset – your income. Watch this video to find out what you need to know. Watch the video now!

Employers report limited premium increases in wake of ACA

Health care in the U.S. is a hot button issue but the early consensus is that the Affordable Care Act has been integrated well by employers.

“One of the big concerns [about the ACA] is this is going to drive up our premiums and the cost of healthcare,” says Christopher Ryan, vice president, Strategic Advisory Services at ADP.
But, he adds, this has not materialized as originally thought. “I give credit do business,” he adds, “I think business looked very carefully at their current practices and … has been well managed.”

A new study suggests that premiums for employees and headaches for employers have been minimal. The 2015 ADP Annual Health Benefits Report says that for companies with more than 1,000 employees, insurance premiums have risen 9.4% since 2011 – and only 2.6% from 2014 to 2015.