As Cost of Benefits Rises, Employees See Shift in Spending

Have you seen a reduction in the amount of money your company spends on their employee benefits program? Take a look at this interesting column by Royce Swayze of Employee Benefits Adviser on how the rising cost of employee benefits is causing employers to look for new ways to lower their costs while trying to help increase their employees financial and physical well-being.

Are employees getting the benefits they really want? Maybe not, a recent Willis Towers Watson analysis found. The study, “Shifts in Benefit Allocations Among U.S. Employers,” revealed that from 2001 to 2015 the cost of employer-provided benefits, measured as a percentage of pay, rose 24%, and, during that time, employers shifted benefit dollars to areas that may not meet employee preferences.

Specifically, the study shows the overall cost of benefits — retirement, healthcare and post-retirement medical benefits — climbed from 14.8% of pay in 2001 to 18.3% of pay in 2015, for a total increase of 24%, driven largely by a doubling in healthcare benefit costs.

While healthcare costs more than doubled from 5.7% to 11.5% of pay, retirement costs, which include defined benefit, defined contribution and post-retirement plans, decreased by 25%, falling from 9.1% to 6.8% of pay.

In the past decade and a half, benefit costs have done an about-face.

“In 2001, active healthcare costs comprised about two-fifths while retirement benefits made up the remaining three-fifths,” the analysis reads, “By 2015, the ratio had flipped, with active healthcare benefits accounting for slightly less than two-thirds of costs and the retirement share dropping to slightly more than one-third.”

“Healthcare benefits are eating up a larger portion of dollars while the amount spent on retirement programs is on the decline,” says John Bremen, managing director of the Human Capital and Benefits division at Willis Towers Watson. “This reallocation has major implications for employers and employees alike.”

The study explains that the decrease in retirement costs is a result of the large shift in employers offering a traditional defined benefit plan to usually replacing them with enhancements to their defined contribution plan. Even though defined contribution plan costs rose by 1.6 percentage points between 2001 and 2015, this increase was not sufficient to offset the 2.9 percentage point decrease in the cost of defined benefit plan costs.

While Willis Towers Watson’s Global Benefits Attitudes Survey notes that employees value their healthcare benefits just as much as their retirement benefits, many employees seem to have reached the maximum they are able or willing to pay for healthcare benefits. Also, employees are concerned about their current and future financial circumstances and worry that they will not have sufficient funds saved for retirement and will thus have to work past the usual retirement age.

Taming costs
Alexa Nerdrum, a senior retirement consultant at Willis Towers Watson, says there are a couple of ways employee benefit advisers can help employers tame these costs.

“I think one would be for employers really to identify and understand the financial needs and the priorities of the workforce. I think for a long time we’ve had employers kind of construct this as a one-size-fits-all,” says Nerdrum.

Nerdrum suggests that employers may need to reevaluate how benefit dollars are allocated to better fit the needs and concerns of their employees. While each company’s solution would be different, Nerdrum notes that employers could explore using tax-efficient saving mechanisms, like health savings accounts, and also just spend more wisely on healthcare.

“The other big piece would be improving financial literacy. By and large, a lot of employees just don’t understand what they need to be doing and how to make the right choice,” says Nerdrum. “So — to the extent employers can invest in education, technology and tools to improve financial literacy — I think that’ll go a long way toward somebody not just continuing the status quo and making a right decision for them. In turn [this leads] to healthier choices, which kind goes down the line of lowering employer costs and improving the financial wellness of the workforce.”

See the original article Here.

Source:

Swayze R. (2017 August 4). As cost of benefits rises, employees see shift in spending [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/as-cost-of-benefits-rises-employees-see-shift-in-spending?brief=00000152-1443-d1cc-a5fa-7cfba3c60000


For Jamie, Chili Time Is Family (and Football) Time

This month, we are bringing you some food favorites of our own Jamie Charlton!

Jamie is the founding partner and CEO of Saxon Financial Services. He graduated from the University of Michigan in '98 and has been in the Financial Services industry ever since. Did we mention he's a Wolverines fan?

When it comes to eating out with the family, The Silver Springhouse is the place to go. "If we have kids, it is an easy decision as we are usually coming from a ball field or a gym. We like it because the atmosphere is fantastic, especially in the summer time, allowing for a relaxing place to take the whole family. We really don’t have a favorite dish because we like chicken and you have a hard time getting bad chicken at the Springhouse, thus we like most everything!"

Need directions?

At home, he enjoys making big family meals and his Homemade Texas Chili pairs perfectly with fall weather and football season! "It is a great family activity because the kids each have a task. As it cooks, we head out to rake the leaves and just as the Michigan game is about to start we all come in, grab a bowl to warm up and have a great time cheering the Wolverines to victory!"

For the recipe, Jamie doesn't really measure and ultimately it's all up to his taste buds, but below you'll find the recipe for his Homemade Texas Chili. The amounts of each ingredient are really up to you!

Here's what you'll need:

  • 1lb ground beef
  • 1lb spicy sausage
  • diced onion
  • a few cloves of chopped garlic
  • 2 cans of red kidney beans
  • 2 cans of red chili beans
  • 2 cans of stewed tomatoes
  • 1 can of diced tomatoes
  • 1 chopped bell pepper
  • a container of mushrooms
  • 1/2 a jalapeno
  • 1 1/2 cup of chili powder
  • 2 tablespoons ancho chili pepper
  • Frank's Red Hot Sauce
  • yellow mustard
  • brown sugar
  • Worchestshire Sauce

 

Here's how Jamie does it:

  1. Brown 1lb of ground beef and 1lb of spicy sausage - you can pick the spice level - at the same time, make sure to include a diced onion and a few cloves of garlic. (Stirring the meat while browning is a great task for a child).
  2. Once the meat is browned, everybody else jumps into the pool! Add 2 cans of red kidney beans, 2 cans of red chili beans, 2 cans of dark red kidney beans, 2 cans of stewed tomatoes, and 1 can of diced tomatoes. (The kids love to open the cans with an old fashion can opener).
  3. Add 1 chopped bell pepper (I use red because it blends in and the kids don't see it), a container of mushrooms, and 1/2 a jalapeno. (Chopping is a great activity for an older child).
  4. Now is the time where measuring goes out the window and cooking to taste begins!
  5. Add a 1 1/2 cup of chili powder, 2 table spoons of ancho chili pepper, 5-10 dashes of Frank's Red Hot Sauce, a long squeeze of yellow mustard, a handful of brown sugar, 5-10 dashes of Worchestshire Sauce.
  6. The best part is to taste as it cooks and adjust your flavor accordingly. Add more chili powder for spicy, sugar for sweet.
  7. Last step - get a bowl of chili, top with cheddar cheese, sour cream and get a bag of Frito Scoops instead of a spoon and enjoy the game!
  8. For adults, a nice red wine or lager complete the meal!

 

Can we have game day at your house, Jamie? Sounds like there's good food and good times to go around!


Prospect for Tax Reform Remains Unclear as Mounting Priorities Compete for Attention

Has the news surrounding tax-reform left you worried about your employee benefits program? Check out this great article by Kathleen Coulombe from SHRM on what you should know about the potential over haul of our tax code and what it means for your employee benefits program.

As efforts to repeal and replace the Affordable Care Act continue to plod along in Congress, House and Senate tax writers have been working with the Trump administration to find a way forward on tax reform.

Hearings continue to take place, most recently last week with both the House Ways and Means Tax Policy Subcommittee and the Senate Finance Committee looking at a path forward on tax reform. One area Members of Congress are reviewing is the tax-favored status of employer-sponsored retirement and welfare benefits.  The House Ways and Means Tax Policy Subcommittee hearing focused on individual reform, which frequently touched on retirement security. One of the key issues discussed during the hearing was shifting the way individuals plan and save for retirement from a traditional pre-tax 401(k) account to an after-tax Roth model (aka "Rothification"). While hearing panelists noted that moving individuals saving for retirement to an after-tax 401(k) model would generate additional tax revenue for the U.S. Government, it could also disrupt the current retirement system.

SHRM believes a comprehensive employer-sponsored benefits package is a key component that employers use to attract and retain top talent. Two of the most widely utilized benefits are employer-provided health care and retirement plans. SHRM believes tax incentives should be used to expend access to and participation in health care and retirement savings plans.

The SHRM-led Coalition to Protect Retirement has expressed concerns to congressional members about moving individual retirement to an after-tax approach, as we believe it will undermine savings for retirement.

While tax reform legislation is not expected to be released until the fall, a set of principles will be released prior to the House adjourning for its August recess.

In the absence of a comprehensive tax reform plan moving ahead, there remains the strong possibility that a bill aimed strictly at tax cuts could be an alternative and could move as soon as members return to Washington in early September.

Aside from charting the course on tax reform, members must also fund the government for FY2018 by September 30 and increase the debt ceiling limit. While the House Budget Committee approved a FY18 budget resolution along party lines that contained tax reconciliation instructions, to move forward the resolution will have to pass both chambers and be signed by the president.

The resolution also requires congressional committees in both the House and Senate to achieve specific deficit reduction levels for 2018-2027 and submit recommendations by October 6, 2017. Given the challenges the budget resolution is facing and the fact that the House and Senate have not passed any of the 12 appropriations bills necessary to fund the government, a short-term continuing resolution will need to be enacted by October 1 to keep the federal government open and it could include an increase in the debt ceiling.

See the original article Here.

Source:

Coulombe K. (2017 August 1). Prospect for tax reforms remains unclear as mounting priorities compete for attention [Web blog post]. Retrieved from address https://blog.shrm.org/blog/prospect-for-tax-reform-remains-unclear-as-mounting-priorities-compete-for


Vacation Time can boost Employee Performance

Who doesn't love taking a vacation from work? Vacation time is a great benefit that employers can offer that has been shown to improve performance among employees.  Find out more about how vacations can be beneficial for both employees and employers in this great article by Amanda Eisenberg from Employee Benefit News.

Employers who want to boost employee performance may want to encourage workers to take a break from working.

New research indicates that high-performing employees take more vacation time, suggesting that a generous — or unlimited — vacation policy benefit has a positive impact on the workplace.

The report from HR technology company Namely analyzed data from more than 125,000 employees and found that high performers take about 19 days of paid time off a year, five more than an average performer under a regular PTO plan.

Still, vacation time is underutilized, the firm said. Nearly 700 million vacation days went unused last year, but 80% of employees said they felt more comfortable taking time off if a manager encouraged them.

Namely said that unlimited vacation policies may be beneficial for employers, adding that it’s a myth that employees with such benefits abuse the policy. For the 1% of companies that offer unlimited vacation days, employees only take about 13 days off, according to Namely’s “HR Mythbusters 2017” report.

“Unlimited vacation time can be a strong benefit that increases employee engagement, productivity, and retention — but only if the policy is actually utilized,” according to the report.

Computer software company Trifacta, for example, encourages its employees to use their paid time off with a recognition program.

“We offer a discretionary PTO policy because we want people to truly take the PTO they need,” says Yvonne Caprini Sorenson, Trifacta’s senior manager of HR. “We have a recognition program called Above + Beyond. Employees can nominate high-performing peers, and the winners receive $1,000 to spend toward travel. It’s a great way to encourage vacation use and to make it clear that Trifacta supports work-life balance.”

See the original article Here.

Source:

Eisenberg A. (2017 July 30). Vacation time can boost employee performance [Web blog post]. Retrieved from address https://www.benefitnews.com/news/vacation-time-can-boost-employee-performance?brief=00000152-14a7-d1cc-a5fa-7cffccf00000


Kaiser Health Tracking Poll – August 2017: The Politics of ACA Repeal and Replace Efforts

With the Senate's plan for the repeal and replacement of the ACA failing more Americans are hoping for Congress to move on to more pressing matters. Find out how Americans really feel about the ACA and healthcare reform in this great study conducted by the Kaiser Family Foundation.

KEY FINDINGS:
  • The August Kaiser Health Tracking Poll finds that the majority of the public (60 percent) say it is a “good thing” that the Senate did not pass the bill that would have repealed and replaced the ACA. Since then, President Trump has suggested Congress not take on other issues, like tax reform, until it passes a replacement plan for the ACA, but six in ten Americans (62 percent) disagree with this approach, while one-third (34 percent) agree with it.
  • A majority of the public (57 percent) want to see Republicans in Congress work with Democrats to make improvements to the 2010 health care law, while smaller shares say they want to see Republicans in Congress continue working on their own plan to repeal and replace the ACA (21 percent) or move on from health care to work on other priorities (21 percent). However, about half of Republicans and Trump supporters would like to see Republicans in Congress keep working on a plan to repeal the ACA.
  • A large share of Americans (78 percent) think President Trump and his administration should do what they can to make the current health care law work while few (17 percent) say they should do what they can to make the law fail so they can replace it later. About half of Republicans and supporters of President Trump say the Trump administration should do what they can to make the law work (52 percent and 51 percent, respectively) while about four in ten say they should do what they can to make the law fail (40 percent and 39 percent, respectively). Moving forward, a majority of the public (60 percent) says President Trump and Republicans in Congress are responsible for any problems with the ACA.
  • Since Congress began debating repeal and replace legislation, there has been news about instability in the ACA marketplaces. The majority of the public are unaware that health insurance companies choosing not to sell insurance plans in certain marketplaces or health insurance companies charging higher premiums in certain marketplaces only affect those who purchase their own insurance on these marketplaces (67 percent and 80 percent, respectively). In fact, the majority of Americans think that health insurance companies charging higher premiums in certain marketplaces will have a negative impact on them and their family, while fewer (31 percent) say it will have no impact.
  • A majority of the public disapprove of stopping outreach efforts for the ACA marketplaces so fewer people sign up for insurance (80 percent) and disapprove of the Trump administration no longer enforcing the individual mandate (65 percent). While most Republicans and Trump supporters disapprove of stopping outreach efforts, a majority of Republicans (66 percent) and Trump supporters (65 percent) approve of the Trump administration no longer enforcing the individual mandate.
  • The majority of Americans (63 percent) do not think President Trump should use negotiating tactics that could disrupt insurance markets and cause people who buy their own insurance to lose health coverage, while three in ten (31 percent) support using whatever tactics necessary to encourage Democrats to start negotiating on a replacement plan. The majority of Republicans (58 percent) and President Trump supporters (59 percent) support these negotiating tactics while most Democrats, independents, and those who disapprove of President Trump do not (81 percent, 65 percent, 81 percent).
  • This month’s survey continues to find that more of the public holds a favorable view of the ACA than an unfavorable one (52 percent vs. 39 percent). This marks an overall increase in favorability of nine percentage points since the 2016 presidential election as well as an increase of favorability among Democrats, independents, and Republicans.

Attitudes Towards Recent “Repeal and Replace” Efforts

In the early morning hours of July 28, 2017, the U.S. Senate voted on their latest version of a plan to repeal and replace the 2010 Affordable Care Act (ACA). Known as “skinny repeal,” this plan was unable to garner majority support– thus temporarily halting Congress’ ACA repeal efforts. The August Kaiser Health Tracking Poll, fielded the week following the failed Senate vote, finds that a majority of the public (60 percent) say it is a “good thing” that the U.S. Senate did not pass a bill aimed at repealing and replacing the ACA, while about one-third (35 percent) say this is a “bad thing.” However, views vary considerably by partisanship with a majority of Democrats (85 percent), independents (62 percent), and individuals who say they disapprove of President Trump (81 percent) saying it is a “good thing” that the Senate did not pass a bill compared to a majority of Republicans (64 percent) and individuals who say they approve of President Trump (65 percent) saying it is a “bad thing” that the Senate did not pass a bill.

The majority of those who view the Senate not passing an ACA replacement bill as a “good thing” say they feel this way because they do not want the 2010 health care law repealed (34 percent of the public overall) while a smaller share (23 percent of the public overall) say they feel this way because, while they support efforts to repeal and replace the ACA, they had specific concerns about the particular bill the Senate was debating.

And while most Republicans and supporters of President Trump say it is a “bad thing” that the Senate did not pass ACA repeal legislation, for those that say it is a “good thing” more Republicans say they had concerns about the Senate’s particular legislation (21 percent) than say they do not want the ACA repealed (6 percent). This is also true among supporters of President Trump (19 percent vs. 6 percent).

WHO DO PEOPLE BLAME OR CREDIT FOR THE SENATE BILL FAILING TO PASS?

Among those who say it is a “good thing” that the Senate was unable to pass ACA repeal and replace legislation, similar shares say the general public who voiced concerns about the bill (40 percent) and the Republicans in Congress who voted against the bill (35 percent) deserve most of the credit for the bill failing to pass. This is followed by a smaller share (14 percent) who say Democrats in Congress deserve the most credit.

On the other hand, among those who say it is a “bad thing” that the Senate did not pass a bill to repeal the ACA, over a third place the blame on Democrats in Congress (37 percent). About three in ten (29 percent) place the blame on Republicans in Congress while fewer (15 percent) say President Trump deserves most of the blame for the bill failing to pass.

HALF OF THE PUBLIC ARE “RELIEVED” OR “HAPPY” THE SENATE DID NOT REPEAL AND REPLACE THE ACA

More Americans say they are “relieved” (51 percent) or “happy” (47 percent) that the Senate did not pass a bill repealing and replacing the ACA, than say they are “disappointed” (38 percent) or “angry” (19 percent).

Although two-thirds of Republicans and Trump supporters say they feel “disappointed” about the Senate failing to pass a bill to repeal and replace the ACA, smaller shares (30 percent and 37 percent, respectively) report feeling “angry” about the failure to pass the health care bill.

MAJORITY SAY PRESIDENT TRUMP AND REPUBLICANS IN CONGRESS ARE RESPONSIBLE FOR THE ACA MOVING FORWARD

With the future of any other replacement plans uncertain, the majority (60 percent) of the public say that because President Trump and Republicans in Congress are now in control of the government, they are responsible for any problems with the ACA moving forward, compared to about three in ten Americans (28 percent) who say that because President Obama and Democrats in Congress passed the law, they are responsible for any problems with it. Partisan divisiveness continues with majorities of Republicans and supporters of President Trump who say President Obama and Democrats are responsible for any problems with it moving forward, while large shares of Democrats, independents, and those who do not approve of President Trump say President Trump and Republicans in Congress are responsible for the law moving forward.

Moving Past Repealing The Affordable Care Act

This month’s survey continues to find that more of the public holds a favorable view of the ACA than an unfavorable one (52 percent vs. 39 percent). This marks an overall increase in favorability since Congress began debating ACA replacement plans and a nine percentage point shift since the 2016 presidential election.

The shift in attitudes since the 2016 presidential election is found regardless of party identification. For example, the share of Republicans who have a favorable view of the ACA has increased from 12 percent in November 2016 to 21 percent in August 2017. This is similar to the increase in favorability among independents (11 percentage points) and Democrats (7 percentage points) over the same time period.

NEXT STEPS FOR THE ACA

The most recent Kaiser Health Tracking Poll finds that after the U.S. Senate was unable to pass a plan to repeal and replace the ACA, the majority of the public (57 percent) wants to see Republicans in Congress work with Democrats to make improvements to the 2010 health care law but not repeal it. Far fewer want to see Republicans in Congress continue working on their own plan to repeal and replace the ACA (21 percent) or move on from health care to work on other priorities (21 percent). About half of Republicans (49 percent) and Trump supporters (46 percent) want Republicans in Congress to continue working on their own plan to repeal and replace the ACA, but about a third of each say they would like to see Republicans work with Democrats on improvements to the ACA.

Six in ten Americans (62 percent) disagree with President Trump’s strategy of Congress not taking on other issues, like tax reform, until it passes a replacement plan for the ACA while one-third (34 percent) of the public agree with this approach. Republicans and Trump supporters are more divided in their opinion on this strategy with similar shares saying they agree and disagree with the approach.

MOST WANT TO SEE PRESIDENT TRUMP AND REPUBLICANS MAKE THE CURRENT HEALTH CARE LAW WORK

Regardless of their opinions of the ACA, the majority of the public want to see the 2010 health care law work. Eight in ten (78 percent) Americans think President Trump and his administration should do what they can to make the current health care law work while fewer (17 percent) say President Trump and his adminstration should do what they can to make the law fail so they can replace it later. About half of Republicans and supporters of President Trump say the Trump administration should do what they can to make the law work (52 percent and 51 percent, respectively) while about four in ten say they should do what they can to make the law fail (40 percent and 39 percent, respectively).

This month’s survey also includes questions about specific actions that the Trump administration can take to make the ACA fail and finds that the majority of the public disapproves of the Trump Administration stopping outreach efforts for the ACA marketplaces so fewer people sign up for insurance (80 percent) and no longer enforcing the individual mandate, the requirement that all individuals have insurance or pay a fine (65 percent). While most Republicans and Trump supporters disapprove of President Trump stopping outreach efforts so fewer people sign up for insurance, which experts say could weaken the marketplaces, a majority of Republicans (66 percent) and Trump supporters (65 percent) approve of the Trump administration no longer enforcing the individual mandate.

The Future of the ACA Marketplaces

About 10.3 million people have health insurance that they purchased through the ACA exchanges or marketplaces, where people who don’t get insurance through their employer can shop for insurance and compare prices and benefits.1 Seven in ten (69 percent) say it is more important for President Trump and Republicans’ next steps on health care to include fixing the remaining problems with the ACA in order to help the marketplaces work better, compared to three in ten (29 percent) who say it is more important for them to continue plans to repeal and replace the ACA.

The majority of Republicans (61 percent) and Trump supporters (63 percent) say it is more important for President Trump and Republicans to continue plans to repeal and replace the ACA, while the vast majority of Democrats (90 percent) and seven in ten independents (69 percent) want them to fix the ACA’s remaining problems to help the marketplaces work better.

UNCERTAINTY REMAINS ON WHO IS IMPACTED BY ISSUES IN THE ACA MARKETPLACES

Since Congress began debating repeal and replace legislation, there has been news about instability in the ACA marketplaces which has led some insurance companies to charge higher premiums in certain marketplaces.  Six in ten Americans think that health insurance companies charging higher premiums in certain marketplaces will have a negative impact on them and their family, while fewer (31 percent) say it will have no impact.

There has also been news about insurance companies no longer selling coverage in the individual insurance marketplaces and currently, it’s estimated that 17 counties (9,595 enrollees) are currently at risk to have no insurer on the ACA marketplaces in 2018.2 The majority of the public (54 percent) say health insurance companies choosing not to sell insurance plans in certain marketplaces will have no impact on them and their family. Yet, despite the limited number of counties that may not have an insurer in their marketplaces as well as this not affecting those with employer sponsored insurance where most people obtain health insurance, about four in ten (38 percent) of the public believe that health insurance companies choosing to not sell insurance plans in certain marketplaces will have a negative impact on them and their families.

The majority of the public think both of these ACA marketplace issues will affect everyone who has health insurance and not just those who purchase their insurance on these marketplaces. Six in ten think health insurance companies choosing not to sell insurance plans in certain marketplaces will affect everyone who has health insurance while about one-fourth (26 percent) correctly say it only affects those who buy health insurance on their own. In addition, three-fourths (76 percent) of the public say that health insurance companies charging higher premiums in certain marketplaces will affect everyone who has health insurance while fewer (17 percent) correctly say it will affect only those who buy health insurance on their own.

MAJORITY SAY PRESIDENT TRUMP SHOULD NOT USE COST-SHARING REDUCTION PAYMENTS AS NEGOTIATING STRATEGY

Over the past several months President Trump has threatened to stop the payments to insurance companies that help cover the cost of health insurance for lower-income Americans (known commonly as CSR payments), in order to get Democrats to start working with Republicans on an ACA replacement plan.3 The majority of Americans (63 percent) do not think President Trump should use negotiating tactics that could disrupt insurance markets and cause people who buy their own insurance to lose health coverage, while three in ten (31 percent) support President Trump using whatever tactics necessary to encourage Democrats to start negotiating. The majority of Republicans (58 percent) and President Trump supporters (59 percent) support negotiating tactics while most Democrats, independents, and those who disapprove of President Trump do not (81 percent, 65 percent, 81 percent).

See the original article Here.

Source:

Kirzinger A., Dijulio B., Wu B., Brodie M. (2017 Aug 11). Kaiser health tracking poll-august 2017: the politics of ACA repeal and replace efforts [Web blog post]. Retrieved from address http://www.kff.org/health-reform/poll-finding/kaiser-health-tracking-poll-august-2017-the-politics-of-aca-repeal-and-replace-efforts/?utm_campaign=KFF-2017-August-Tracking-Poll&utm_medium=email&_hsenc=p2ANqtz-9GaFJKrO9G3bL05k_i4GzC04eMAaSCDlmcsiYsfzAn-SeJdK_JnFvab4GydMfe_9iGiiKy5LR0iKxm6f0gDZGbwqh-bQ&_hsmi=55195408&utm_content=55195408&utm_source=hs_email&hsCtaTracking=4463482c-5ae1-4dfa-b489-f54b5dd97156%7Cd5849489-f587-49ad-ae35-3bd735545b28


Employers Spend $742 per Employee for Wellness Program Incentives

How much money are you spending on your employees and their wellness program? Check out this great article by Brookie Madison from Benefits News on how employers are encouraging more of their employees to sign-up for company sponser wellness programs.

Wellness programs are popular with employers but employees continue to need motivation to participate. Seventy percent of employers are investing in wellness programs, while 73% of employees say they are interested in wellness programs, but 64% of employees undervalue the financial incentives to join the wellness programs, according to UnitedHealthcare’s Consumer Sentiment Survey entitled “Wellness Check Up.”

Only 7% of employees understand the four basic terms of health care —premium, deductible, copayment and coinsurance — which is why UHC didn’t find it surprising that workers underestimate their financial incentives in wellness programs, says Rebecca Madsen, chief consumer officer for UnitedHealthcare.

Despite this disconnect between what employers are offering to help ensure their employees’ health and what employees are willing to do to maintain a healthy well-being, the most appealing incentives to employees for wellness programs are health insurance premium reductions (77%), grocery vouchers (64%) and health savings accounts (62%).

Employees find the financial incentives of the wellness programs appealing, yet only 24% of employees are willing to give up one to three hours of their time per week to exercise, attend wellness coaching sessions or research healthier recipes to eat.

“Unwilling to engage is part of the problem why a third of the country is obese and another third is overweight. We have a real problem in terms of keeping people healthy and that’s what we want to help address,” says Madsen.

Madsen recommends that employers promote their wellness programs and incentives multiple times throughout the year. Gift cards, reduction of premiums and contributing to health savings accounts are leading ways to reward employees. “Incentives on an ongoing basis get people engaged and motivated to participate for a long period of time,” says Madsen.

Wellness programs also provide a way for employers to adjust their benefit packages to be customized and be more than a ‘one size fits all’ approach. “Look at your insurance claims, work with insurance providers and identify common health challenges. See where you have prevalent healthcare needs and who your high risk populations are to develop programs that target those results,” suggests Madsen.

Wellness programs need endless support from advisers, insurance providers, consultants, consumers, friends, family members and employers in order to encourage employees to live healthy lifestyles, according to UnitedHealthcare.

Madsen suggests that employers have onsite biometric screenings. “Helping people know their numbers will help them understand where they have an opportunity to improve their health, which would make them motivated to engage more,” says Madsen.

New trends of wellness programs incorporate the use of activity trackers. Twenty-five percent of employees use an activity tracker and 62% would like to use one as part of a wellness program.

See the original article Here.

Source:

Madison B. (2017 July 17). Employers spend $742 per employee for wellness program incentives [Web blog post]. Retrieved from address https://www.benefitnews.com/news/employers-spend-742-per-employee-for-wellness-program-incentives?feed=00000152-18a4-d58e-ad5a-99fc032b0000


Reduce Employee Financial Stress

Are your employees struggling to reach their financial goals? Here is a great article by Heather Garbers from SHRM on what employers can do to help their employees reduce their financial stress and reach their monetary goals.

More American workers are living paycheck to paycheck than ever before, just making ends meet. Nearly three-fourths have less than $1,000 saved; and 34 percent have nothing in savings. Student loan debt totals over $1.3 trillion among some 44.2 million borrowers in the U.S. Unexpected expenses are not budgeted for and people are placing themselves at great financial risk.

As HR practitioners, we need to recognize that people are struggling financially – and that it is taking a toll not only on them personally, but also in the workplace. There are innovative benefit options and strategies that can help relieve financial stress on employees:

Student loan assistance. Today’s Millennials are challenged to get their lives going despite the crushing burden of student loan debt, and trust their employers for advice on how to manage it. Doing so can make you stand out in attracting the best talent and help win loyalty.  Programs are available that not only assist Employees in refinancing and managing their debt, but also allow you to make contributions to loan balances, and assist Employees in setting up a 529 savings plan.

Employee Purchasing Programs (EPP). When people are experiencing financial stress and are confronted with unexpected expenses, they may take on high interest credit card debt or a payday loan. Employee purchasing programs are a great way for them to avoid amassing high interest rate charges when purchasing consumer goods.

Low Interest Installment Loans and Credit. A major danger for financially stretched employees is the ease with which they can get payday loans or cash advances on their credit cards without fully understanding the risk. The exorbitant interest rates only worsen the vicious cycle of debt. There are services, however, that underwrite low-interest rate installment loans well below the going rates and allow Employees to make payments through payroll deduction. Employers can sponsor the service at no cost as a voluntary benefit, and Employees can use the funds however they need to – whether it is paying a medical bill or purchasing a new air conditioner.

Financial planning and wellness services. Whether offered as one-on-one, personal coaching or online resources with interactive money management tools, everyone appreciates when employers offer resources to help them understand how to repair or build their credit and better manage their money. By offering these services, you have the opportunity to occupy a position of trust and cement long-term employee loyalty.

See the original article Here.

Source:

Garbers H. (2017 July 17). Reduce employee financial stress [Web blog post]. Retrieved from address https://blog.shrm.org/blog/reduce-employee-financial-stress


Voluntary Benefits Key to Helping Employees with Rising Health Costs

With the cost of healthcare rising day by day, many employees are struggling to pay for their healthcare expenses. Take a look at this interesting article by Nick Otto from Employee Benefit Adviser and see how employers are leveraging their voluntary benefits to help employees offset some of their healthcare costs.

As workers continue to struggle with out-of-pocket medical bills, there’s a growing opportunity for benefits managers to hold more conversations with employees on voluntary benefits that can help offset costs.

“The rising cost of healthcare has driven many employers to offer supplemental group insurance products, often in conjunction with a health savings account,” says Elias Vogen, director of group insurance client relationships for financial services firm Securian. “This combination can be cost-effective for both employer and employee … and when employees are aware that these benefits are available to them through work they opt in at a high rate.”

According to a recent survey from Securian, 28% of employees with health insurance through work facing an out-of-pocket expense of $5,000 or more would use their personal savings to pay rather than other means, including an HSA (8%) or supplemental group insurance (7%).

Further, a majority of respondents said they do not know how they would pay for an out-of-pocket expense (21%), or that they would need to rely on credit cards (12%), a loan from their 401(k) (7%) or family/friends (4%), their tax return (5%) or by selling/pawning a personal possession (2%).

“Healthcare costs continue to rise and that almost certainly will not change anytime soon,” Vogen says. “As a result, employers and employees will continue to look for options to help ease the cost crunch. The popularity of benefits like accident, critical illness and hospital indemnity insurance will continue to rise. These benefits are here to stay.”

A multi-touch strategy is the best way for employers to communicate with employees about voluntary benefits, according to Vogen.

“We recently conducted accident and critical illness insurance enrollment campaigns with a large employer that involved six points of contact: direct mail, e-mail, videos, digital materials, an interactive benefits guide and webinars,” he says. “By using a variety of channels, we were able to educate employees on the value of these voluntary benefits in ways that were convenient and comfortable to them.”

Voluntary benefits relieve a key concern for employees: While the survey revealed that paying for out-of-pocket medical expenses would be the top financial concern for a plurality (42%) of workers facing a debilitating injury, a critical illness diagnosis or a hospitalization, 58% say their top concern would be lost wages from work, the ability to pay for regular monthly expenses such as groceries, or the need to take on additional expenses such as lawn care or cleaning.

“If you break your leg, or your critically ill spouse needs specialized medical care out of state, these benefits can be used to help pay for expenses like hiring out your household chores, paying for travel costs, extra child care and more,” says Vogen. “You don’t have to turn in your receipts; you’re able to use the funds as you wish. The flexible nature of these benefits can be instrumental in warding off financial troubles from an unexpected health event.”

According to the survey, employees were asked if they are offered six different voluntary benefits by their employer:

· Life insurance (54% said yes)
· Disability insurance (38%)
· Health savings account (36%)
· Accident insurance (24%)
· Critical illness insurance (15%), and
· Hospital indemnity insurance (9%).

Further, 12% of employees said they are offered none of these benefits, and 18% said they are not sure if these benefits are offered by their employer.

Of these six benefits, life insurance is the most popular, with 75% of employees who have access to life insurance through their employer saying they are enrolled. “Accident insurance ranked second, with 64% of employees offered this insurance enrolled. Hospital indemnity insurance came in third at 59%, followed by disability insurance at 54%, health savings account at 52% and critical illness insurance at 47%,” says Vogen.

Employers recognize that healthcare costs have become burdensome to their workers and their families, and it’s important to remember that these cost increases have impacted employers’ bottom lines as well, according to Terry Holloway, an employee benefits adviser and executive vice president with insurance broker Cobbs Allen.

“Supplemental group insurance benefits are a cost-effective solution for both employers and employees,” Holloway says. “We have seen a significant increase in employer interest in these and other voluntary benefit platforms in the past five years, along with innovative enrollment solutions from insurance carriers.”

See the original article Here.

Source:

Otto N. (2017 July 20). Voluntary benefits key to helping employees with rising health costs [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/voluntary-benefits-key-to-helping-employees-with-rising-health-costs?feed=00000152-a2fb-d118-ab57-b3ff6e310000


What Could Happen If The Administration Stops Cost-Sharing Reduction Payments To Insurers?

Has the President's recent threat to slash Cost-Sharing Reduction Payments for insurers left you worried about your healthcare costs? Find out how the loss of Cost-Sharing Reduction Payments will impact your health insurance in this informative column by Timothy Jost from Health Affairs.

August 4 Update: Voluntary Insurer Reporting Of Catastrophic Coverage Offered Through Exchange Continued

On August 3, 2017, the Internal Revenue Service released Notice 2017-41  informing insurers that for 2017, as for 2015 and 2016, they would be encouraged but not required to report coverage under catastrophic plans in which individuals were enrolled through an exchange. Insurers and employers are generally required to file 1095-B or 1095-C forms with the IRS, and to provide these forms to individuals whom they cover, documenting that the individuals have minimum essential coverage as required by the individual mandate.

Insurers are not, however, required to report qualified health plan coverage provided through the exchanges, because the exchanges themselves file 1095-A forms documenting QHP coverage and provide these forms to enrollees. But catastrophic health plans are not QHPs, so exchanges do not report catastrophic coverage either.

The IRS proposed regulations in 2016 to require insurers to report catastrophic coverage issued through the exchange and thus to fill this gap.  These rules have not yet been finalized however.  In the meantime, the IRS has encouraged insurers to report catastrophic coverage issued through an exchange voluntarily. The guidance extends this policy for another year. Insurers that voluntarily report catastrophic coverage will not be subject to penalties with respect to returns and statements reporting this coverage.

Original Post

Although the decision of the Court of Appeals for the District of Columbia Circuit to allow attorneys general from 17 states and the District of Columbia to join the House v. Price cost-sharing reduction (CSR) litigation as parties complicates President Trump’s ability to simply stop the CSR payments, rumors continue that he is preparing to do so. The CSR payments are made monthly; the next installment is due on August 21, 2017. If the administration intends not to make the August payment, it must announce its decision soon.

Changes to qualified health plan (QHP) applications in the federally facilitated exchange (FFE) are due on August 16, 2017, as are final rates for single risk pool plans including QHPs. Final contracts with insurers for providing QHP coverage through the FFE must be signed by September 27. If the Trump administration is going to defund the CSRs, now is the time it will do it.

The back story on the CSR issue can be found in my post on July 31, while the intervention decision is analyzed in my post on August 1. This post focuses on issues that will need to be resolved going forward if the Trump administration decides to defund the CSRs.

The Choices Insurers Would Face If CSR Payments Were Ended

First, insurers would have to decide whether to continue to participate in the exchanges. Those in the FFE have a contractual right to drop participation for the rest of 2017, but how exactly they would do this would depend on state law, and would probably require 90 days notice. Insurers would also not be able to terminate the policies of individuals covered through the exchange, although once the insurers left the exchange premium tax credits would cease and many policyholders would drop coverage. Insurers that tried to leave immediately would likely suffer reputational damage, and those that could financially would likely try to hold on until the end of the year.

Some insurers might well decide that the government is an unreliable partner and give up on the exchanges for 2018. Indeed, some would conclude that the individual market is too risky to play in at all. The individual market makes up a small part of the business of large insurers; even though it has become more profitable in the recent past, some insurers might conclude that the premium increases that would be needed to make up for the loss of the CSRs would drive healthy enrollees out of the individual market. Rather than deal with a deteriorating risk pool, they might leave the individual market entirely (although they would probably have to give 180 days notice to do so.)

Insurers that decide to stay would have to charge rates that would allow them to survive without the $10 billion dollars the CSR payments would provide. They would need to raise premiums significantly to accomplish this. How they did so would depend on guidance that they got from their state department of insurance or possibly from the Centers for Medicare and Medicaid Services.

The California Experience

On August 1, 2017, Covered California announced its 2018 rates. The California state-based marketplace is an example of how the Affordable Care Act can work in a state that fully supports it and has a big enough market to form a balanced risk pool. For 2018, the average weighted rate increase in California is 12.5 percent, of which 2.8 percent is attributable to the end of the moratorium on the federal health insurance tax. Consumers can switch to plans that will limit their rate change to 3.3 percent in the same metal tier. All 11 health insurers in California are returning to the market for 2018 (although one insurer, Anthem, is leaving 16 of the 19 regions in which it participated for 2017) and 82 percent of consumers will be able to choose between three or more insurers. About 83 percent of hospitals in California participate in at least one plan.

Covered California instructed its insurers to file alternate rates that would go into effect if the Trump administration abandons the CSR payments. The insurers were instructed to load the extra cost onto their silver (70 percent actuarial value) plans, since the CSRs only apply to silver plans. The alternative rates filed by the insurers project that if the CSRs are not funded, they would have to essentially double their premium increases, hiking premiums by an additional 12.4 percent.

Virtually all of this increase would be absorbed by increased federal premium tax credits for those with incomes below 400 percent of the federal poverty level. As the premium of the benchmark second-lowest cost silver plan increased, so would the tax credits. A Covered California study concluded that the premium tax credit subsidy in California would increase by about a third if the CSR subsidies are defunded.

Bronze, gold, and platinum plan premiums would not be affected by the silver plan load. As the premium tax credits increased, many more enrollees might be able to get bronze plans for free, and gold plans would become competitive with silver plans in price. More people would likely be eligible for premium tax credits as people higher up the income scale found that premiums cost a higher percentage of their household income.

Consumers who are not eligible for premium tax credits would have to pay the full premium increase themselves. Covered California has suggested, however, that insurers load the premium increase only onto silver plans in the exchange, since CSRs are only available in the exchange. Insurers would likely encourage their enrollees who are in silver plans in the exchange to move to similar products off the exchange that are much more affordable. Bronze, gold, and platinum plans would cost more or less the same on or off the exchange.

Other States Would Likely Make Different Choices Than California’s

It is likely that not all states would follow California’s lead. If state departments of insurance do not allow insurers to increase their premiums, more insurers would leave the individual market. If state departments require insurers to load the CSR surcharge onto all metal-level plans, both on and off the exchange, bronze, gold, and platinum plans would be more expensive and individual insurance would become much more costly for all consumers who are not eligible for premium tax credits. If insurers leave the market or consumers drop coverage, more consumers would end up using care they cannot afford, increasing medical debt and the uncompensated care burden of providers, and of hospitals in particular.

Some insurers in other states have likely already loaded a substantial surcharge onto their 2018 premiums in anticipation of CSR defunding and of other problems, such as uncertainty about the Trump administration enforcing the individual mandate. If insurers in fact profit from excessive rates, consumers might eventually receive medical loss ratio rebates, but 2018 rebates would not be paid out until late in 2019, if the requirement is still on the books by then.

Other Ramifications Of Ending CSR Payments To Insurers

CSR defunding could have other effects as well. Insurers have been reimbursed each month for CSRs based on an estimation of what they are paying out to actually reduce cost sharing. Each year the insurers must reconcile the payments they have received with those they were actually due. Insurers were supposed to have filed their reconciliation data for 2016 by June 2, 2017, and were supposed to be paid any funds due them, or to refund overpayments, in August. Reconciliation payments may also be due in some situations for 2015. If the administration cuts off CSR payments, it could conceivably cut off reconciliation payments as well.

Finally, defunding of CSRs would likely have an effect on risk adjustment payments as well. The risk adjustment methodology has been set for 2018 in the 2018 payment rule. It would likely not be amended for 2018 in light of the CSR defunding. Defunding would increase the statewide average premium on which risk adjustment payments are based. This would generally exaggerate the effects that risk adjustment would otherwise have. In particular, insurers with heavy bronze plan enrollment would end up paying more in, while insurers with more gold or platinum plans might receive higher payments.

Looking Forward

President Trump claims to see the CSR payments as a “bailout” to insurers, which surely they are not. They are a payment for services rendered, much like a Medicare payment to a Medicare Advantage plan. The effects of defunding would reverberate throughout out health care system, likely causing problems far beyond those identified in this post.

Fortunately, Senators Alexander (R-TN) and Murray (D-WA), the chair and ranking member of the Health, Education, Labor, and Pensions Committee, have announced that they will begin hearings on a bipartisan approach to health reform when the Senate returns in September, and funding of the CSR payments for at least a year seems to be at the top of their list. A bipartisan group of House members has also called for funding the CSRs. And pressure to fund the CSRs continues from the outside, with the National Association of Insurance Commissioners calling for it again last week. It is to be hoped that President Trump will not take steps that would sabotage the individual market and that a solution can quickly be found to the CSR issue that will bring stability to the market going forward.

See the original article Here.

Source:

Jost T. (2017 August 2). What could happen if the administration stops cost-sharing reduction payments to insurers? [Web blog post]. Retrieved from address http://healthaffairs.org/blog/2017/08/02/what-could-happen-if-the-administration-stops-cost-sharing-reduction-payments-to-insurers/


Eating a Little Bit Healthier Helps You Live Longer

Are your eating habits having a negative effect on your body? Check out this great column by Alice Park from Time for some great tips on how you can tweak your current diet to help improve your quality of life.

No surprise here: people who follow healthy diets tend to lead longer, healthier lives. But most of the studies backing this assertion compared people who ate well to people who didn't. Does changing your own diet over many years make much of a difference?

In a new study published in the New England Journal of Medicine, researchers found that it did. People who added in some wholesome foods over time—even if they didn't necessarily commit to making over their entire way of eating—improved their chances of living longer.

Researchers looked at data from the same group of people over 12 years to see if those who changed their diet for better or for worse—either by eating more healthy foods or more unhealthy foods—lived longer or died earlier than those who didn’t change what they ate.

The study involved more than 73,700 men and women enrolled in two long-term health studies. People were asked to record their typical diet at the start of the study, then to fill out food questionnaires every four years for 12 years after that. The researchers then scored the diets by ranking the healthfulness of food components including vegetables, fruit, whole grains, nuts, red meat, fish and dairy, as well as things like sugar-sweetened beverages. Using the reports, researchers were able to gauge how much of a person’s eating habits changed over time.

People who said they ate more healthy foods over time had a lower risk of dying during the study period. The more healthy foods people added to their diet, the lower their risk. It worked the other way, too. Those who ate more unhealthy foods over time saw their risk of dying during the study go up.

The good news is that adding in any amount of healthy foods may help lower the risk of early death. Improving diet by just 20% was linked to a 8-17% lower risk of premature death. (Eating 20% more of unhealthy foods, in contrast, contributed to a 6-12% increased risk in death.)

Even cleaning up one meal a day seems to help. Swapping out one serving of red or processed meat a day with healthier nuts or legumes was linked to any where from an 8% to 17% drop in the risk of premature death.

See the original article Here.

Source:

Park A. (2017 July 12). Eating a little bit healthier helps you live longer [Web blog post]. Retrieved from address http://time.com/4855506/healthy-diet-live-longer/