IRS bumps up 401(k) contribution limit for 2019

Do you offer a retirement plan to your employees? The IRS recently raised the annual contribution cap for 401(k) and other retirement plans. Continue reading to find out what the new contribution caps are.


Participants in 401(k) and other defined contribution retirement accounts will see their annual contribution cap raised from $18,500 to $19,000 in 2019, according to the Internal Revenue Service.

The catch-up contribution limit on defined contribution plans remains unchanged at $6,000.

Savers with IRAs will see the annual contribution cap raised from $5,500 to $6,000 — the first time the cap on IRA deferrals has been raised since 2013. The annual catch-up contribution for savers age 50 and over will remain at $1,000.

Cost-of-Living Adjustment (COLA) increases will also be applied to the deduction phase-out scale for IRA owners who are also covered by a workplace retirement plan:

  • for single filers the scale will be $64,000 to $74,000, up $1,000
  • for joint filers where the spouse contributing to an IRA is also covered by a workplace plan, the phase-out slot increase to $103,000 to $123,000
  • for an IRA contributor whose spouse is covered by a plan, the income phase-out is $193,000 to $2003,000

Single contributors to Roth IRAs will see the income phase-out range increase to $122,000 to $137,000, up $2,000 from last year. For married couples filing jointly the range will increase to $193,000 to $203,000, up $4,000 from last year.

More low and moderate-income families may be able to claim the Saver’s Credit on their tax returns for contributions to retirement savings plans. The threshold increases $1,000 for married couples, to $64,000; $48,000 for head of households, up $750; and $32,000 for singles and single filers, up $500 from last year.

The deferred compensation limit in defined contribution plans for pre-tax and after-tax dollars will increase $1,000, to $56,000. And the maximum defined benefit annual pension will increase $5,000, to $225,000.

SOURCE: Thornton, N. (1 November 2018) "IRS bumps up 401(k) contribution limit for 2019" (Web Blog Post). Retrieved from https://www.benefitspro.com/2018/11/01/irs-bumps-401k-contribution-limit-for-2019/


8 scary benefits behaviors employees should avoid

Nothing is more scary to benefits professionals than employees failing to review their open enrollment materials. Continue reading for eight of the scariest benefit mistakes and tips on how you can correct them.


Halloween is already frightening enough, but what really scares benefits professionals are the ways employees can mishandle their benefits. Here are eight of the biggest mistakes, with tips on correcting them.

Participants don’t review any annual enrollment materials

Why it’s scary: Employees are making or not making decisions based on little or no knowledge.

Potential actions: Employers can implement a strategic communications campaign to educate and engage employees in the media and format appropriate for that employee class, or consider engaging an enrollment counselor to work with participants in a more personalized manner.

Employees don’t enroll in the 401(k) or don’t know what investment options to choose

Why it’s scary: U.S. employees are responsible for much of their own retirement planning and often leave money on the table if there is an employer match.

Potential actions: Employers can offer auto-enrollment up to the matching amount/percent; consider partnering with a financial wellness partner, and provide regular and ongoing communications of the 401(k)’s benefits to all employees.

Employees don’t engage in the wellness program

Why it’s scary: The employee is potentially missing out on the financial and personal benefits of participating in a well-being program.

Potential actions: Employers need to continuously communicate the wellness program throughout the year through various media, including home media. Employers also should ensure the program is meeting the needs of the employees and their families.

Employees don’t update ineligible dependents on the plan

Why it’s scary: Due to ambiguity where the liability would reside, either the employee or the plan could have unexpected liability.

Potential action: Employers can require ongoing documentation of dependents and periodically conduct a dependent audit.

Employees don’t review their beneficiary information regularly

Why it’s scary: Life insurance policy proceeds may not be awarded according to the employee’s wishes.

Potential action: Employers can require beneficiary confirmation or updates during open enrollment.

Employees do not evaluate the options for disability — whether to elect a higher benefit or have the benefit paid post-tax

Why it’s scary: Disability, especially a short-term episode, is very common during one’s working life; maximizing the benefit costs very little in terms of pay deductions, but can reap significant value when someone is unable to work.

Potential action: Employers can provide webinars/educational sessions on non-medical benefits to address those needs.

Employees do not take the opportunity to contribute to the health savings account

Why it’s scary: The HSA offers triple tax benefits for long-term financial security, while providing a safety net for near-term medical expenses.

Potential actions: Employers can select the most administratively simple process to enroll participants in the HSA and allow for longer enrollment periods for this coverage.

Employees do not use all of their vacation time

Why it’s scary: Vacation allows an employee an opportunity to recharge for the job.

Potential actions: Employers can encourage employees to use their vacation and suggest when the workload might be more accommodating to time off for those employees who worry about workloads.

SOURCE: Gill, S. & Manning-Hughes, R. (31 October 2018) "8 Scary Benefits Behaviors Employees Should Avoid" (Web Blog Post). Retrieved from https://www.benefitnews.com/slideshow/8-scary-benefits-behaviors-employees-have?brief=00000152-14a5-d1cc-a5fa-7cff48fe0001


How to Handle Employee Requests for Time Off to Vote

Do you know how to handle employee requests for time off to vote? In some states, it is a requirement to give employees time off to vote. Read this blog post to learn more.


Many employees will be eligible to cast their ballot on Nov. 6, but will they have time to vote? Some states require employers to give workers time off to vote, and even in states that don't, some businesses are finding other ways to get employees to the polls.

With Election Day around the corner, employers should be mindful that, while no federal law provides employees leave to vote, many states have enacted laws in this area, said Marilyn Clark, an attorney with Dorsey & Whitney in Minneapolis. Depending on the state, employers may have to give workers notice about their voting rights and provide paid or unpaid time off to vote.

Even in states where there is no voting leave law, it is good practice to let employees take up to two hours of paid time off to vote if there isn't enough time for the employee to vote outside of working hours. "Encouraging and not discouraging employees should be the general rule," said Robert Nobile, an attorney with Seyfarth Shaw in New York City.

Encourage Employees

"Here in the United States, too many people don't vote because they don't have time due to jobs, child care and other responsibilities," said Donna Norton, executive vice president of MomsRising, an organization of more than 1 million mothers and their families. "Getting to the polls can be especially challenging for people in rural communities [or] single-parent households, and those who are juggling multiple jobs."

About 4 in 10 eligible voters did not vote in the 2016 presidential election, according to research conducted by Nonprofit VOTE and the U.S. Elections Project. And voter turnout has been historically lower for midterm elections, such as this year's, which are held near the midpoint of a president's four-year term, according to Pew Research Center.

"Businesses can help solve this problem by making sure that all employees have paid time off to vote," Norton said.

Some employers are offering solutions by making Election Day a corporate holiday, offering a few hours of paid time off for employees to vote and giving employees information about early and absentee voting, according to TheWashington Post.

Giving employees time off to participate in civic or community activities tends to improve worker performance, said Katina Sawyer, Ph.D., an assistant professor of management at George Washington University. Employers who are offering paid time off to vote will likely reap the benefits through improved employee attitudes and performance.

Know the Law

Employers in states with voting-leave laws should be familiar with the specific requirements, as some state laws have a lot of details. Even in states without such laws on the books, employers should check to see if there are any local voting leave ordinances in their cities.

Employers required to give workers time off to vote should plan for adequate work coverage to ensure that all employees can take time off, Clark said.

In many states, the employer may ask workers to give advance notice if they need time off and may require that workers take that leave at a specific time of the workday. In some states where leave is paid, employers might have the right to ask employees to prove they actually voted. Most states prohibit employers from disciplining or firing an employee who takes time off from work to vote.

"Ultimately, fostering an environment that generally encourages employees to exercise this important right is a good practice to mitigate the risk of a potential retaliation claim," Clark said.

Although state laws vary, "the general theme across the U.S. with respect to voting laws is that employees will be given time off to vote if there is insufficient time between the time the polls open and close within the state and the time employees start and finish work," Nobile said. "Typically, two to three consecutive nonworking hours between the opening and closing of the polls is deemed sufficient."

Some state laws provide unpaid leave to vote or do not address whether the leave must be paid. Oregon and Washington no longer have voting leave laws because they are "vote-by-mail" states.

voting leave laws.jpg

In some states, such as California and New York, employers must post notices in the workplace before Election Day to inform employees of their rights. Employers might have to pay penalties if they don't comply.

The consequences for denying employees their voting rights can be harsh, with some states even imposing criminal penalties, Clark noted.

Create a Policy

At a minimum, employers should adopt a policy spelling out the voting rights available to employees under applicable laws, Clark said. For businesses that operate in states that don't have a voting-leave law, employers may still wish to adopt a policy outlining their expectations about time off for voting.

Multistate employers may elect to adopt a single policy that includes the most employee-friendly provisions of the state and local laws that cover them. "By taking this approach, employers avoid the administrative burden of adopting and promulgating multiple policies for employees working in different locales," Clark said. All voting-leave policies should be sure to include strong anti-retaliation provisions, which make clear that the employer will not take any adverse action against employees for exercising their voting rights.

"It's important to remember that the law sets the floor," said Bryan Stillwagon, an attorney with Sherman & Howard in Atlanta. "Companies with the happiest and most-engaged employees recognize that positive morale comes from doing more than what is required."

Nagele-Piazza, L. (29 October 2018) "How to Handle Employee Request for Time Off to Vote" (Web Blog Post). Retrieved from https://www.shrm.org/ResourcesAndTools/legal-and-compliance/state-and-local-updates/Pages/How-to-Handle-Employee-Requests-for-Time-Off-to-Vote.aspx

Dana Wilkie contributed to this article. 


3 steps to negotiating a better employee benefit annual renewal

Do you know how to negotiate your annual employee benefits renewal? Employee benefits are commonly the second-highest expense for employers, coming in second behind employee payroll. Read on to learn more.


Employee benefits are typically the second-highest expense for employers — right behind payroll. But unlike payroll, benefits are difficult to budget for each year because the upcoming annual renewal rate can feel like a total mystery.

Not knowing what the renewal rate will be until the end of the plan year complicates the balance that employers must strike between offering rich benefits employees appreciate at a cost the finance team can live with. It doesn’t have to be that way.

Knowing how to approach the annual renewal with your health carrier, pharmacy benefits manager and other players can help the savvy employer save some money while maintaining the same level of benefits as before. The ticket is planning for the annual renewal all year long, which removes the mystery and leads to a predictable rate.

Here are three steps to negotiating the annual renewal with your carrier.

1. Create a good carrier relationship. A great way to gain control of what happens at the end of the benefit plan year is to set the tone from the beginning. This means outlining expectations before signing a contract and communicating wants and needs throughout the plan period. If you’ve developed a good relationship with your carrier, you should have an easier time coming to an agreement on the annual renewal rate.

Building good carrier relationships extends beyond the carrier you’re currently working with to others in the market. One way to maintain a good relationship is to avoid marketing to all carriers for the best rate before each renewal period. Carriers spend time and money responding to requests for proposal (RFPs); if they respond year after year without winning the business, they may lose interest when you are ready to move your benefits plan.

2. Get plan renewals early. Left unchecked, most carriers hold the benefit plan renewal rate as long as possible (60-75 days before the end of a contract). But receiving your carrier’s initial renewal rate earlier gives you more time to evaluate the renewal and negotiate the rate. (Yes, it’s true — you don’t have to accept the first number the carrier offers.) The best way to ensure your request for an early renewal rate is heard and followed is to discuss it before signing a contract.

By receiving your renewal rate approximately 120 days before the end of your contract, you have enough time to evaluate the rate together with your health and welfare benefits broker and underwriting team and then respond with another offer. And if you feel that another carrier can offer better rates, you can also market your benefits plan and still have time to switch carriers before the contract ends.

3. Offer a fair and reasonable rate. After you receive your annual renewal rate, work with your internal team and your benefits broker to begin negotiations. Importantly, this doesn’t mean countering with a number so low that the carrier finds it untenable and unreasonable. In that case, the insurer may not meet your demand and you’ll be forced to turn to other carrier options without having planned for that possibility.

Instead, respond with a fair and reasonable rate increase backed by data. The goal is to counter offer with a number that creates stability and predictability for renewals in the future.

Learning your renewal rate for each plan year can be stressful, but it doesn’t have to be. Getting information early, negotiating a fair rate and maintaining good carrier relationships can help you create a better annual renewal with better predictability and improved budgeting year after year.

SOURCE: Strain, M (24 October 2018) "3 steps to negotiating a better employee benefit annual renewal" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/3-steps-to-negotiating-a-better-employee-benefit-annual-renewal?brief=00000152-1443-d1cc-a5fa-7cfba3c60000


Addressing Long-Term Care Concerns

When insurance plan conversations lead to discussions about after retirement, there are certain hot-button issues that will swing employee conversations out of your control. When helping older employees with retirement and beyond, two topics will change the atmosphere in the room. One is the long-term viability of Social Security, which frequently comes up as a question. The second is on the conversation of long-term care, which has the possibility to make or break a retirement plan. In this installment of CenterStage, Donald McClurg, one of our financial advisors, breaks down what matters and offers answers to many of the questions concerning long-term health.

What Exactly is Long-Term Care? What’s Gobbling up Your Retirement?

You place insurance on the things that are valuable to you, such as your car, your home and possibly your pet. What about your life? Is your family of importance to you, and beyond that, what about your legacy (i.e. any funds left over from your lifetime given into your living family members)? Currently, there’s about a 50% chance a 65-year-old will require care such as an in-home nurse or a medical/assisted living facility that can deliver optimal, specialized care. For employees near retirement or the 65 years-old mark, there is a trove of questions surrounding long-term care, including:

  • Should I consider a hybrid long-term care plan?
  • Is the insurance worth it for me, given how insurers have been increasing the price of premiums?
  • How do I avoid a government facility should I need care?
  • How much money should be saved and when should saving begin?
  • Can I afford this/Will I make it?
  • What are my blind spots?

Unfortunately, the “right” answer to these vexing questions regarding long-term healthcare is exclusively individual-specific. Factors in the determination are dependent upon the individual’s wealth, age, desire to leave a bequest and a need for peace of mind, amongst all other factors. Donald believes, “The biggest risk to a financial plan is not running out of money, it is incurring a financial catastrophe later in life and not having protection. Right now, that catastrophe has the highest probability of showing up in the form of long-term care.”

Commonly viewed as less superior to other insurance options already being taken out of a paycheck, the fact of the matter is this is not another out-of-pocket expense placed on you, such as renters or car insurance. Rather, long-term care should be seen as a valuable choice; an investment in your future and for your family. As a “numbers guy”, Donald brings up the importance of three variables in particular: 70, 90, and 5, which mean:

  • Singles 65 and older stand a 70% chance of needing long-term coverage
  • Couples 65 and older stand a 90% chance of needing long-term care
  • Only 5% of Americans have long-term coverage plans

The Driving Factor for Long-Term Care

Individuals display an adversity to paying for long-term coverage, as they are worried about the chance of paying for it and not needing it or having to leave their homes and live out their lives in a facility. If that’s you, you may consider a hybrid plan. Most hybrids solve the two main deterrents of long-term care insurance by:

  • Allowing for in-home care (that’s right, they don’t force you into a facility)
  • Return of unused premiums. (i.e. whatever portion you don’t use is returned to your beneficiary)

According to the U.S. Department of Health and Human Services, the average cost for a semi-private room in a nursing home is $6,844 per month, with the average stay being around 2.5 years. As previously listed, 52.3% is the expected percentage of people turning 65 who will have to have a long-term care need during their lives. That is over half the population of individuals turning 65 years of age who will need the assistance offered through long-term care.

The most misleading stat is that 63% of people spend $0 on long-term care. This is because roughly half of Americans have exactly $0 in savings or will have $0 when/if they need long-term care. Those individuals typically find themselves at facilities who accept Medicaid, meaning they are more than likely falling short of the care they need. Here’s the most under reported and most impactful fact of long-term care: the burden is falling on your employees. In total, an estimated $3 trillion in lifetime wages is lost due to unpaid care-giving responsibilities.

How Can Employers Offer Better Long-Term Care Solutions?

It has been said that happy employees are productive employees, and as an employer, you naturally want to increase both the productivity and well-being of employees. Of the many things your employees stress about (home, kids, work, etc.), money is always at the top of the list. In fact, a study investigating employee productivity and well-being found that employees spend 3-4 hours per week, 4-5 times per hour worried about finances. At Saxon, we are happy to help employers implement useful financial tools for their employees to leverage.

For the majority of the working world, healthcare derives from employers, thus, the head of the organization is the one responsible for properly educating employees on their coverage. As the saying goes, “proper planning prevents poor procedure.” With Saxon, employers can schedule a brief, in-house seminar with one of our stellar financial advisors and a long-term care specialist. Through these seminars, clients and employees will discover clear solutions to anything that may still have them on the fence about investing in long-term health. Employees will come to learn the real value in long-term care, such as the reason behind asset location mattering more than asset allocation.

Ready to explore your options and become one of the 0.5% of businesses currently offering long-term care insurance to their employees? If so, don’t hesitate; pick up the phone and call Donald with Saxon Financial today at (513) 609-4404 or toll-free at (800) 847-1733 to discover how you can avoid the single largest threat to your employees’ retirement.

Why Saxon Is the Right Choice for You

At Saxon, we care about you – your family, your company, your finances, and your future. We cultivate our years of practice and experience to deliver exceptional service to you every time. We empower you by placing the tools and knowledge necessary into your hands to deliver remarkable returns on investment. An engagement with Saxon is unique. This is because we have invested in developing a culture where business is personal. Our clients are the central heart of our organization; meaning that without you we have no purpose.

To Saxon, experience matters. We know that outcome is crucial, but to us, it matters how we get there. By taking intentional action in an authentic manner, we are a catalyst for your success that is positively refreshing. We invite you to explore the Saxon way.


5 things small business owners should know about this year's open enrollment

The benefits small business owners offer are crucial to the way they attract and retain employees. Read this blog post for five things small business owners should know for 2019 open enrollment.


As a small business owner, offering competitive employee benefits is a crucial way to attract and retain strong talent. Whether you currently provide them and are planning next year’s renewal, or you are thinking of offering them for the first time, here are five things you should consider before your employees enter the open enrollment period for next year on November 1st:

1. Small businesses don’t have to wait until open enrollment to offer benefits to their employees

While your employees won’t be able to enroll in health insurance plans until November comes along, small business owners don’t have to wait at all to secure health insurance for their employees. The sooner you act, the better, to guarantee that you and your employees are protected. According to recent studies, healthier employees are happier employees, and as a result, will contribute to a more productive workplace. And a more positive and constructive work environment is better for you, your employees, and your business as a whole.

2. Health literacy is important

Whether you’ve provided health insurance to your employees before, or you’re looking into doing so for the first time, it is always worthwhile to prioritize health insurance literacy. There is a host of terminology and acronyms, not to mention rules and regulations that can be overwhelming to wrap your head around.

Thankfully, the internet is full of relevant information, ranging from articles to explainer videos, that should have you up to speed in no time. Having a good understanding of insurance concepts such as essential health benefits, employer contributions, out-of-pocket maximums, coinsurance, provider networks, co-pays, premiums, and deductibles is a necessary step to being better equipped to view and compare health plan options side-by-side. A thorough familiarization with health insurance practices and terms will allow you to make the most knowledgeable decisions for your employees and your business.

3. Offering health insurance increases employee retention

Employees want to feel like their health is a priority, and are more likely to join a company and stay for longer if their health care needs are being met. A current survey shows that 56 percent of Americans whose employers were sponsoring their health care considered whether or not they were happy with their benefits to be a significant factor in choosing to stay with a particular job. The Employee Benefit Research Institute released a survey in 2016 which showed a powerful connection between decent workplace health benefits and overall employee happiness and team spirit—59 percent percent of employees who were pleased with their benefits were also pleased with their jobs. And only 8 percent of employees who were dissatisfied with their benefits were satisfied with their jobs.

4. Alleviate health insurance costs

High insurance costs can be an obstacle for small business owners. A new survey suggests that 53 percent of American small business owners stress over the costs of providing health care to their employees. The 2017 eHealth report reveals that nearly 80 percent of small businesses owners are concerned about health insurance costs, and 62 percent would consider a 15 percent increase in premiums to make small group health insurance impossible to afford. However, there are resources in place to help reduce these costs, so they aren’t too much of a barrier. One helpful way to cut down on health insurance costs is to take advantage of potential tax breaks available to small business owners. All of the financial contributions that employers make to their employees’ premiums are tax-deductible, and employees’ financial contributions are made pre-tax, which will successfully decrease a small business’ payroll taxes.

Additionally, if your small business consists of fewer than 25 employees, you may be eligible for tax credits if the average yearly income for your employees is below $53,000. It is also beneficial to note that for small business owners, the biggest driver on insurance cost will be the type of plan chosen in addition to the average age of your employees. Your employees’ health is not a relevant factor.

5. Utilize digital resources

You don’t have to be an insurance industry expert to shop for medical plans. There are resources and tools available that make buying medical plans as easy as purchasing a plane ticket or buying a pair of shoes online – Simple, transparent. Insurance is a very complex industry that can easily be simplified with the use of the advanced technology and design of online marketplaces. These platforms are great tools for small business owners to compare prices and benefits of different plans side-by-side. Be confident while shopping for insurance because all of the information is laid out on the table. Technological solutions such as digital marketplaces serve as useful tools to modernize the insurance shopping process and ensure that you and your team are covered without going over your budget.

SOURCE: Poblete, S. (15 October 2018) "5 things small business owners should know about this year's open enrollment" (Web Blog Post). Retrieved from https://www.benefitspro.com/2018/10/15/5-things-small-business-owners-should-know-about-t/


HR’s recurring headache: Convincing employees to get a flu shot

According to The National Institute for Occupational Safety and Health, the flu cost U.S. companies billions of dollars in medical fees and lost earnings. Read this blog post to learn how HR departments are convincing their employees to get a flu shot.


Elizabeth Frenzel and her team are the Ford assembly line of flu shots: They can administer about 1,800 flu shots in four hours.

Frenzel is the director of employee health and wellbeing at the University of Texas MD Anderson Cancer Center, and with 20,000 employees, she is no stranger to spearheading large flu shot programs. The center where Frenzel administers flu shots has roughly a 96% employee vaccination rate. Back in 2006, only about 56% of employees got their shots.

“When you run these large clinics, safety is critically important,” she says.

Problems like Frenzel’s are not unique. Every fall, HR departments send mass emails encouraging employees to get vaccinated. The flu affects workforces across the country, costing U.S. companies billions of dollars in medical fees and lost earnings, according toThe National Institute for Occupational Safety and Health. It is not only a cause of absenteeism but a sick employee can put their coworkers at risk. Last year the flu killed roughly 80,000 people, according to the Centers for Disease Control.

Even if an employer offers a flu shot benefit, the push to get employees to sign up for the vaccine can be a two-month slough, with reminder emails going unanswered. Moreover, companies often contend with misconceptions about the shot, such as the popular fallacy that shots will make you sick, running out of the vaccine, and sometimes just plain employee laziness.

In Frenzel’s case, increasing the number of employees who got flu shots weren’t just a good idea, but it was needed to protect the lives of the cancer patients they interact with every day. The most startling fact, she says, was that healthcare workers who interact with patients daily were less likely to get vaccinated.

“So that’s how we started down the path,” she says. “Really targeting these people who had the closest patient contact.”

Frenzel credits the significant increase in employee participation in the flu shot program to several factors. They made the program mandatory — a common move in the healthcare industry — but Frenzel says their improvement also was related to flu shot education. The center made it a priority to explain to staff members exactly why they should get vaccinated. Frenzel made it more convenient, offering the vaccine at different hours of the day, so all employees could fit it into their schedule. They also made it fun, offering stickers for employees to put on their badge once they got a shot. Every year, she says, they pick a new color.

Employers outside of the medical industry are focused on improving their flu shot programs, including Edward Yost, manager of employee relations and development at the Society for Human Resource Management, who helped organize a health fair and flu shot program for 380 employees.

Yost says onsite flu shot programs are more effective than vouchers that allow employees to get vaccinated at a primary care doctor or pharmacy. The more convenient you make the program, he says, the more likely employees will use it.

“There’s no guarantee that those vouchers are going to be used,” he says. “Most people aren’t running out to a Walgreens or a CVS saying, please stab me in the arm.”

Besides the convenience, employees are more likely to sign up for a shot when they see co-workers getting vaccinated, Yost says. If a company decides to offer an onsite program, planning ahead is key. Sometimes employees will not sign up in advance for the vaccine but then decide they want to get one once the vendor arrives onsite. Yost recommends companies order extra vaccines.

“Make sure that you’re building in the expectation that there's going to be at least a handful of folks who are more or less what you call walk-ins in that circumstance,” he says.

Incentivizing employees to get the flu shot is also important, Yost says. Some firms will offer a gym membership or discounted medical premiums if they attend regular checkups and get a biometric screening in addition to a flu shot. He recommends explaining to employees how a vaccine can help reduce the number of sick days they may use.

“Employees need to see that there’s something in it for them,” Yost says. “And quite honestly, being sick is a miserable thing to experience.”

Affiliated Physicians is one of the vendors that can come in and administer flu shots in the office. The company has provided various employers with vaccines for more than 30 years, including SourceMedia, the parent company of Employee Benefit News andEmployee Benefit Adviser. In the past 15 years, Ari Cukier, chief operating officer of the company, says there’s been an increase in the amount of smaller companies signing up for onsite vaccines. HR executives should be aware of the number of employees signing up for vaccinations when scheduling an onsite visit.

“We can’t go onsite for five shots, but 20-25 shots and up, we’ll go,” Cukier says.

Cukier agrees communication between human resources departments and employees is crucial in getting people to sign up for shots. Over the years, he’s noticed that more people tend to sign up for shots based on the severity of the previous flu season.

“Last year, as bad as it was, we have seen a higher participation this year,” he says.

Brett Perkisonassistant professor of occupational medicine at the University of Texas School of Public Health in Houston, says providing a good flu shot program starts from the top down. The company executives, including the CEO and HR executives, should set an example by getting and promoting the shots themselves, he says.

It’s also important to listen to employee concerns. Before implementing a program, if workers are taking issue with the shot, it’s best to hold focus groups to alleviate any worries before the shots are even being administered, he says.

Some employees may even believe misconceptions like the flu shot will make one sick or lead to long-term illnesses, he says. Others may question the effectiveness of the shot. Having open lines of communication with employees to address these concerns will ensure that more will sign up, Perkison says.

Regardless of the type of flu shot program, the most important part is preventing illness, SHRM’s Yost says. While missing work and losing money are important consequences of a flu outbreak, having long-term health issues is even more serious, he says. Plus, no one likes being sick.

“Who’s going to argue about that?” he says.

This article originally appeared in Employee Benefit News.

SOURCE: Hroncich, C (24 October 2018) "HR’s recurring headache: Convincing employees to get a flu shot" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/news/hrs-recurring-headache-convincing-employees-to-get-a-flu-shot


8 ways to maintain HSA eligibility

Is your high-deductible health plan still HSA qualified? Ensuring your high-deductible health plan remains HSA qualified is no easy task. Read this blog post for eight ways employers can maintain HSA eligibility.


For employers sponsoring high-deductible health plans with health savings accounts, ensuring that the HDHP continuously remains HSA qualified is no easy task. One challenge in this arena is that most of the rules and regulations are tax-related, and most benefit professionals are not tax professionals.

To help, we’ve created a 2019 pre-flight checklist for employers.

With 2019 rapidly approaching and open enrollment season beginning for many employers, now’s a great time to double-check that your HDHP remains qualified. Here are eight ways employers can maintain HSA eligibility.

1. Ensure in-network plan deductibles meet the 2019 minimum threshold of $1,350 single/$2,700 family.

To take the bumps out of this road, evaluate raising the deductibles comfortably above the thresholds. That way, you won’t have to spend time and resources amending the plan and communicating changes to employees each year that the threshold increases. Naturally, plan participants may not be thrilled with a deductible increase; however, if your current design requires coinsurance after the deductible, it’s likely possible on a cost neutral basis to eliminate this coinsurance, raise the deductible and maintain the current out-of-pocket maximum. For example:

Current Proposed
Deductible $1,350 single / $2,700 family $2,000 single / $4,000 family
Coinsurance, after deductible 80% 100%
Out-of-pocket maximum $2,500 single / $5,000 family $2,500 single / $5,000 family

This technique raises the deductible, improves the coinsurance and does not change the employee’s maximum out-of-pocket risk. The resulting new design may also prove easier to explain to employees.

2. Ensure out-of-pocket maximums do not exceed the maximum 2019 thresholds of $6,750 single/$13,500 family.

Remember that the 2019 HDHP out-of-pocket limits, confusingly, are lower than the Affordable Care Act 2019 limits of $7,900 single and $15,800 family. (Note to the U.S. Congress: Can we please consider merging these limits?) Also, remember that out-of-pocket costs do not include premiums.

3. If your plan’s family deductible includes an embedded individual deductible, ensure that each individual in the family must meet the HDHP statutory minimum family deductible ($2,700 for 2019).

Arguably, the easiest way to do so is making the family deductible at least $5,400, with the embedded individual deductible being $5,400 ÷ 2 = $2,700. However, you’ll then have to raise this amount each time the IRS raises the floor, which is quite the hidden annual bear trap. Thus, as in No. 1, if you’re committed to offering embedded deductibles, consider pushing the deductibles well above the thresholds to give yourself some breathing room (e.g., $3,500 individual and $7,000 family).

For the creative, note that the individual embedded deductible within the family deductible does not necessarily have to be the same amount as the deductible for single coverage. But, whether or not your insurer or TPA can administer that out-of-the-box design is another question. Also, beware of plan designs with an embedded single deductible but not a family umbrella deductible; these designs can cause a family to exceed the out-of-pocket limits outlined in No. 2.

Perhaps the easiest strategy is doing away with embedded deductibles altogether and clearly communicating this change to plan participants.

4. Ensure that all non-preventive services and procedures, as defined by the federal government, are subject to the deductible.

Of note, certain states, including Maryland, Illinois and Oregon, passed laws mandating certain non-preventive services be covered at 100%. While some of these states have reversed course, the situation remains complicated. If your health plan is subject to these state laws, consult with your benefits consultant, attorney and tax adviser on recommended next steps.

Similarly, note that non-preventive telemedicine medical services must naturally be subject to the deductible. Do you offer any employer-sponsored standalone telemedicine products? Are there any telemedicine products bundled under any 100% employee-paid products (aka voluntary)? These arrangements can prove problematic on several fronts, including HSA eligibility, ERISA and ACA compliance.

Specific to HSA eligibility, charging a small copay for the services makes it hard to argue that this isn’t a significant benefit in the nature of medical care. While a solution is to charge HSA participants the fair market value for standalone telemedicine services, which should allow for continued HSA eligibility, this strategy may still leave the door open for ACA and ERISA compliance challenges. Thus, consider eliminating these arrangements or finding a way to compliantly bundle the programs under your health plan. However, as we discussed in the following case study, doing so can prove difficult or even impossible, even when the telemedicine vendor is your TPA’s “partner vendor.”

Finally, if your firm offers an on-site clinic, you’re likely well aware that non-preventive care within the clinic must generally be subject to the deductible.

5. Depending on the underlying plan design, certain supplemental medical products (e.g., critical illness, hospital indemnity) are considered “other medical coverage.” Thus, depending on the design, enrollment in these products can disqualify HSA eligibility.

Do you offer these types of products? If so, review the underlying plan design: Do the benefits vary by underlying medical procedure? If yes, that’s likely a clue that the products are not true indemnity plans and could be HSA disqualifying. Ask your tax advisor if your offered plans are HSA qualified. Of note, while your insurer might offer an opinion on this status, insurers are naturally not usually willing to stand behind these opinions as tax advice.

6. The healthcare flexible spending account 2 ½-month grace period and $500 rollover provisions — just say no.

If your firm sponsors non-HDHPs (such as an HMO, EPO or PPO), you may be inclined to continue offering enrollees in these plans the opportunity to enroll in healthcare flexible spending accounts. If so, it’s tempting to structure the FSA to feature the special two-and-a-half month grace period or the $500 rollover provision. However, doing so makes it challenging for an individual, for example, enrolled in a PPO and FSA in one plan year to move to the HDHP in the next plan year and become HSA eligible on day one of the new plan year. Check with your benefits consultant and tax adviser on the reasons why.

Short of eliminating the healthcare FSA benefit entirely, consider prospectively amending your FSA plan document to eliminate these provisions. This amendment will, essentially, give current enrollees more than 12 months’ notice of the change. While you’re at it, if you still offer a limited FSA program, consider if this offering still makes sense. For most individuals, the usefulness of a limited FSA ebbed greatly back in 2007. That’s when the IRS, via Congressional action, began allowing individuals to contribute to the HSA statutory maximum, even if the individual’s underlying in-network deductible was less.

7. TRICARE

TRICARE provides civilian health benefits for U.S Armed Forces military personnel, military retirees and their dependents, including some members of the Reserve component. Especially if you employ veterans in large numbers, you should become familiar with TRICARE, as it will pay benefits to enrollees before the HDHP deductible is met, thereby disqualifying the HSA.

8. Beware the incentive.

Employers can receive various incentives, such as wellness or marketplace cost-sharing reductions, which could change the benefits provided and the terms of an HDHP. These types of incentives may allow for the payment of medical care before the minimum deductible is met or lower the amount of that deductible below the statutory minimums, either of which would disqualify the plan.

SOURCE: Pace, Z.; Smith, B. (22 October 2018) "8 ways to maintain HSA eligibility" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/8-ways-to-maintain-hsa-eligibility


4 FAQs about 2019 Medicare rates

Some high-income enrollees of Medicare Part B may experience premium increases of 7.4 percent. According to Medicare managers, Medicare Part B premium increases will be held to about 1.1 percent for most enrollees in 2019. Read on to learn more.


Medicare managers announced last week that they will hold increases in Medicare Part B premiums to about 1.1 percent for most enrollees in 2019. For some high-income enrollees, however, premiums will rise 7.4 percent.

Medicare Part B is the component of the traditional Medicare program that covers physician services and hospital outpatient care.

Here’s a look at how the monthly Part B premiums will change, by annual income level:

  • Individuals earning less than $85,000, and couples earning less than $170,000:$135.50 in 2019, from $134 this year.
  • Individuals earnings $160,000 to $500,000, and couples earning $320,000 to $750,000: $433.40 in 2019, from $428.60 this year.
  • Individuals earning $500,000 or more, and couples earning $750,000 or more: $460.50 in 2019, from $428.60 this year.

The annual Medicare Part B deductible will increase by 1.1 percent, to $185.

Another component of the traditional Medicare program, Medicare Part A, covers inpatient hospital bills.

Medicare managers use payroll taxes to cover most of the cost of running the Medicare Part A program. Few Medicare Part A enrollees pay premiums for that coverage. But, for the enrollees who do have to pay premiums for Medicare Part A coverage, the full premium will increase 3.6 percent, to $437 per month.

The Medicare Part A deductible for inpatient hospital care will increase 1.8 percent, to $1,340.

Why are high earners paying so much more for Medicare Part B?

Congress has been increasing the share of Medicare costs that high earners pay in recent years.

For 2018, the top annual income category for Medicare Part B rate-setting purposes was for $160,000 and over for individuals, and for $320,000 and over for couples. Premiums from those Medicare Part B enrollees are supposed to cover 80 percent of their Part B claims.

In the Balanced Budget Act of 2018, Congress added a new annual income category: for individuals earning $500,000 or more and couples earning $750,000 or more. Premiums from Part B enrollees in that income category are supposed to cover 85 percent of those enrollees’ Part B claims.

Who do these rate increases actually affect?

Medicare now has about 60 million enrollees of all kinds, according to the CMS Medicare Enrollment Dashboard.

About 21 million are in Medicare Advantage plans and other plans with separate premium-setting processes.

About 38 million are in the traditional Medicare Part A, the Medicare Part B program, or both the Medicare Part A and the Medicare Part B programs. CMS refers to the traditional Medicare Part A-Medicare Part B program as Original Medicare. The rate increases have a direct effect on the Original Medicare enrollees’ costs.

How do the Medicare increases compare with the Social Security cost-of-living adjustment (COLA)?

The Social Security Administration recently announced that the 2019 Social Security COLA will be 2.8 percent.

That means the size of the COLA will be greater than the increase in Medicare premiums for all Medicare enrollees other than the highest-income Medicare Part B enrollees and the enrollees who pay the full cost of the Medicare Part A premiums.

Why should financial professionals care about Original Medicare premiums?

For consumers who already have traditional Medicare coverage, the Part A and Part B premiums may affect how much they have to spend on other insurance products and related products, such as Medicare supplement insurance coverage.

For retirement income planning clients, Medicare costs are something to factor into income needs calculations.

Because access to Medicare coverage is critical to all but the very wealthiest retirees, knowledge about how to get and keep eligibility for Medicare coverage on the most favorable possible terms is of keen interest to many consumers ages 50 and older. Some consumers may like to get information about that topic from their insurance agents, financial planners and other advisors.

Resources

Officials at the Centers for Medicare and Medicaid Services, the agency that runs Medicare, are preparing to publish the official 2019 Medicare rate notices in the Federal Register on Wednesday. A preview copy of the Part A notice is available here, and a preview copy of the Part B notice is available here.

SOURCE: Bell, A. (16 October 2018) "4 FAQs about 2019 Medicare rates" (Web Blog Post). Retrieved from https://www.benefitspro.com/2018/10/16/medicare-posts-2019-rates-pinches-high-earners-412/


How to Optimize Open Enrollment for Workers

From the rising cost of prescription medications to the ever-changing status of the ACA, benefit administrators are faced with many challenges when it comes to healthcare programs. Read this blog post to learn more.


Administrators of employer-sponsored healthcare programs face myriad challenges these days, from the rising cost of medications to the fluctuating status of the Affordable Care Act and state healthcare exchanges. As we head into the 2019 open enrollment season, it’s clear that these issues will continue to impact every type and rank of employee in the coming year.

To that end, I’ve outlined several key trends in open enrollment that frazzled HR leaders should explore before enrollment season begins. If it’s too late to make changes to your program this year, use these key points as a basis for measuring and evaluating current programs so you can begin planning for a more engaging, transparent and streamlined process next year.

You don’t have to take it all on yourself.

Employers are realizing that as great as some decision support and health advocacy tools may be, attempts to make employees better healthcare consumers have been only marginally effective.  High-performing (aka narrow) networks may be a viable solution as they enable better rates negotiated with the carriers and providers while reducing waste, errors and unnecessary costs. It’s the steerage option, but plan designs can provide incentives for employees to elect these plans and networks. In turn, the HPNs can provide:

  • more concierge-like service;
  • better coordinated care between providers for high-cost claimants—where much of runaway costs reside; and
  • support to ensure compliance with treatment protocols—for chronic conditions such as diabetes, CAD, COPD, etc.

In turn, these plans have the potential for shaving points off healthcare cost trend.

But it’s vital that communication strategies help reduce fears of reduced network choices (avoiding bad memories of restrictive HMO networks) while increasing confidence in the ability of the HPNs to drive results that actually enhance care while also reducing costs.

The best strategy is to provide easy-to-understand examples and scenarios that represent typical situations based on your company’s demographics and employee personas.

Use all the channels you have.

Education and engagement need to be done through a variety of channels to address the specific needs and preferences of demographic groups. Employees need to compare their options based on anticipated needs to look at both premiums (per paycheck costs) and out-of-pocket costs (deductible, copays, coinsurance), as well as employer-provided HSA contributions and incentives. The premium doesn’t tell the whole story—some people over-insure themselves by paying a higher premium for coverage that they may not use because they fear a higher deductible and out-of-pocket maximum.

Cost-comparison tools, interactive personalized assessment tools, microsites that are mobile-optimized with clear, consistent messaging, and extremely brief interactive videos make the message relevant to each individual.

Remember too that your company portal is both a useful tool in ensuring a personalized message to the employee, and a way for you to collect aggregated data about your employees’ interests, needs, action or inaction, and the user experience.

Don’t try to hit all the bases.

Trying to communicate too much information at one time tends to obscure the key message. Focus only on providing information needed to make effective enrollment decisions and use other points during the year to educate about broader topics like wellness.

A common failure is going paperless and forgetting that you really need to drive employees to resources to get them to pay attention. There may be very robust online content and resources but a very low rate of use of that valuable information. Remember that spouses at home often may be making the majority of the healthcare decisions for a family or, at the very least, for themselves. So going too far with the paperless approach can miss getting the message—and the needed information—to those key stakeholders.

Don’t fear transparency.

It’s intriguing to me that some employers are wary about communicating their level of cost-sharing with employees and how it benchmarks against peer companies. Employees often assume they are paying a far larger share than they are. There are other ways of being transparent about cost-sharing beyond the employer-employee split. For instance, we created an infographic for a client to explain the concept of self-insurance and are using it in an ongoing educational series with fact sheets and videos, getting across the idea that the decisions each of us make about our health and informed healthcare purchasing affect the costs in our individual as well as collective pockets.

The bottom line is that helping employees get smart about how they use healthcare and choose insurance options will save your company money. That’s not as callous as it sounds. If employers can’t find more and better ways to control healthcare and benefits costs, they’ll simply have to shift more of the burden to employees. Healthcare access is onerous enough. No one wants to make it harder or deprive workers of needed care. Healthy, satisfied, financially stable workers are better for business, productivity and the overall economy. Commit to exploring these key trends and making meaningful improvements to open enrollment in 2019 and beyond.

SOURCE: Brooks, B. (16 October 2018) "How to Optimize Open Enrollment for Workers" (Web Blog Post). Retrieved from http://hrexecutive.com/how-to-optimize-open-enrollment-for-workers/