Dental health savings plans suppress employer ACA aches
Originally posted February 14, 2014 by Michael Giardina on https://ebn.benefitnews.com
Industry onlookers are saying that the voluntary exemption in the Affordable Care Act will do little to improve dental health across the nation as projections point to federal and health exchanges doing little to lower costs for Americans. However, can private dental exchanges and savings plans help to fill this void?
With more than 120 million Americans in need of dental coverage according to data from the National Association of Dental Plans, DentalPlans.com, an exchange that has been in operation since 1999, says that adults will find that stand-alone dental plans will only be available on public exchanges with the purchase of medical insurance plans.
“The ACA does not require adults to be covered for dental services in medical plans,” says Jennifer Stoll, president of DentalPlans.com . “Therefore, adult dental benefits have to be purchased separately, because they are optional under the law.”
Due to the ACA, the NADP explains that about 30 to 40 million will enter the dental plan market while about 10 to 20 million will lose or change their current plans. Because of these expected changes, Stoll says employees can benefit with the savings plan model.
“Purchasing a dental savings plan can help the employee get the oral care they need with savings of 10% to 60% off what they would pay out-of-pocket,” says Stoll.
The American Dental Association said in a recent report that an estimated 5.3 million adults will attain oral health coverage as a result of the ACA. This will reduce the number of adults without dental benefits by about 5%, according to the April 2013 study, which notes that more than 8.7 million children will benefit from the new provisions.
“The ACA is a missed opportunity, and we have a long way to go in ensuring access to oral health for all Americans,” says Dr. Marko Vujicic, managing vice president of the ADA’s Health Policy Resource Centers. “This is especially true for adults, who have experienced greater financial barriers to dental care in recent years.”
Communicating these financial barriers could help employers and employees. DentalPlans.com currently offers plans to employers that start $6.00 per employee/month. For an average family, which includes two adults and two dependent children, families can save $626 on annual ADA recommended treatments, says the dental savings plan retailer.
DentalPlans.com offers more than 30 different plans, which fall under brands like Aetna, Careington, Signature Wellness and UNI-CARE.
“Since dental care for adults is not a required Essential Health Benefit under the ACA, employers are able to offer savings plans to their employees any time,” Stoll explains. “The plans can be offered completely voluntary with no employer contribution requirement. The employer is able to offer a dental savings plans that are affordable rather than offering nothing at all.”
But can dental health translate into more productive employees? Stoll says yes. Dental insurance can treat adults in the early stages of bleeding gums, infections and cavities so that employees do not miss work when the pain becomes unbearable.
“Adults miss work due to their own dental illnesses, but also many adults stay home with kids who have to miss school due to toothaches and dental illness as well,” Stoll says.
Moreover, Stoll explains that dental insurance, a missed and often forgotten voluntary option, can become an “added benefit to an employee’s compensation package.”
“Employers experienced enhanced productivity and performance of employees because they could take better care of their own and their families’ oral health,” Stoll explains. “With the recent slowdown in the economy, many employers wonder if they can continue to offer dental benefits to their employees.”
Final Employer ACA Regs from IRS Provide Transition Relief to Mid-Sized Employers
Originally posted on https://www.ifebp.org
The Internal Revenue Service (IRS) issued final regulations implementing the employer responsibility provisions under the Affordable Care Act (ACA) that take effect in 2015.
The final rules implement the employer shared responsibility provisions of the ACA, under section 4980H of the Internal Revenue Code. The rules make a number of changes in response to input on the proposed regulations issued in December 2012.
Highlights of the rules include addressing a number of questions about how plans can comply with the employer shared responsibility provisions; ensuring that volunteers such as firefighters and emergency responders do not count as full-time employees; and phasing in provisions for businesses with 50 to 99 full-time employees and those that offer coverage to most but not yet all of their full-time workers.
The final rules provide, for 2015, that:
- The employer responsibility provision will generally apply to larger firms with 100 or more full-time employees starting in 2015 and employers with 50 to 99 full-time employees starting in 2016.
- To avoid a payment for failing to offer health coverage, employers need to offer coverage to 70 percent of their full-time employees in 2015 and 95 percent in 2016 and beyond, helping employers that, for example, may offer coverage to employees with 35 or more hours, but not yet to that fraction of their employees who work 30 to 34 hours. (Proposed regulations would have required employers to offer coverage to 95 percent of their full-time employees in 2015.)
Various Employee Categories
The final regulations provide clarifications regarding whether employees of certain types or in certain occupations are considered full-time, including:
- Volunteers: Hours contributed by bona fide volunteers for a government or tax-exempt entity, such as volunteer firefighters and emergency responders, will not cause them to be considered full-time employees.
- Educational employees: Teachers and other educational employees will not be treated as part-time for the year simply because their school is closed or operating on a limited schedule during the summer.
- Seasonal employees: Those in positions for which the customary annual employment is six months or less generally will not be considered full-time employees.
- Student work-study programs: Service performed by students under federal or state-sponsored work-study programs will not be counted in determining whether they are full-time employees.
- Adjunct faculty: Based on the comments received, the final regulations provide as a general rule that, until further guidance is issued, employers of adjunct faculty are to use a method of crediting hours of service for those employees that is reasonable in the circumstances and consistent with the employer responsibility provisions. However, to accommodate the need for predictability and ease of administration and consistent with the request for a “bright line” approach suggested in a number of the comments, the final regulations expressly allow crediting an adjunct faculty member with 2 ¼ hours of service per week for each hour of teaching or classroom time as a reasonable method for this purpose.
U.S. Treasury Press Release
U.S. Treasury Fact Sheet
IRS Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act
In 2020, Workers Will Decide Health Benefits
Originally posted by Bill Toland February 09, 2014 on https://insurancenewsnet.com
By the end of the decade, the majority of American workers will be selecting their health benefits from an online menu of plans and paying for those benefits with a stipend from their employer, according to experts in the field.
If and when that day comes, it would mark a major shift for the nation's health care apparatus and a reversal of the method by which health insurance has been furnished to American workers for decades -- through a defined-benefits plan selected by an employer.
In 2020, private health "exchanges" will be the predominant way that health care benefits are delivered in this country, said Eric Grossman, a senior partner at Mercer and the exchange business leader in his company's benefits division.Mercer, based in New York with an office in Pittsburgh, is a global human resources, benefits and financial services consultant.
Mr. Grossman, like many other experts in the field, likens the transition in health insurance to the ongoing transition in retirement planning -- where once the "defined-benefit" pension was commonplace, now many companies offer "defined contributions" which employees can steer to a 401(k) or an investment mix of their choice.
That transition took two decades, but now, for anyone under the age of 35, employer-subsidized retirement -- where it still exists, that is -- generally means a defined contribution.
"Our prediction in health care is that a similar transition will happen, [but] it will happen more quickly," Mr. Grossman said.
Private health insurance exchanges -- some of which already exist -- work like this: Instead of an employer negotiating a standard benefits plan or two for its employees, companies instead make a defined cash contribution to employee accounts. Employees then use the cash to select from a menu of a half-dozen or so health plans, with varying price levels of coverage.
Exchanges are set up and managed by health insurers (such as Highmark), benefits consultants (such as Mercer), traditional benefits brokers and online brokers. Plans included in exchanges can be a mix of plans from regional and national insurers, depending on who is the sponsor. A Highmark exchange would offer only its own plans, for example, while a Mercer exchange would offer plans from several companies.
Businesses have dozens of plans to choose from within the exchange "universe" -- health as well as dental, vision and others -- but that list is whittled down to a handful before the plans are finally offered to employee groups.
These are called private, or closed, exchanges because the policies are available only to company employees -- not to the population at large, as is the case with the national and state-based marketplaces that came online Oct. 1 as part of the Affordable Care Act.
Right now, said Bill Brown, Highmark's manager of digital distribution, national marketplace penetration for private exchanges is about 3 percent and adoption rate among Highmark's client base is about the same. Large companies with more than 250 employees have been particularly cautious.
Highmark began offering large employers access to its "MyBenefits" exchanges Jan. 1.
"There's a lot of interest," Mr. Brown said. "But they're not ready to jump."
That's partly because, despite the 401(k) analogy, there's not much immediate cost savings in a health exchange, particularly for large groups. When big employers moved away from pensions and toward defined contributions, the point was to reduce immediate retirement costs and unload a major financial liability going forward. Today, less than 30 percent of Fortune 100 companies offer a defined-benefit retirement plan to new salaried employees.
But with health exchanges, big, self-insured employers that now pay all of their own medical claims will continue to do so. The impetus to move to an exchange, at least among larger employers, won't come from claims savings but rather the opportunity to offer a wider array of health plans to employees and to offload some of the benefits administration now handled by human resources departments.
The real savings will come for fully-insured small-and-mid-sized groups, Mr. Brown said.
They'll be able to offer far more variety to employees, and the entire process will happen online. "It really streamlines administration," he said.
If they "move onto [the] exchange, they get five medical options, four dental, four vision" plans, he said. Employees can choose the plan that is best for them and their family.
While the pension analogy is the one most commonly used to describe the shift, Mr. Brown said a comparison to the world of retail shopping might be more appropriate. Where once customers went to a store and were able to select from whatever the store had in stock, now they can go to Amazon.comand buy anything.
A decade or so ago, people might have been skeptical of the online shopping process, but not anymore -- at least, not in retail.
Mr. Brown believes that will be proven true in health insurance: 14 years ago, Highmark test-launched an online ("paperless," the press release described it) defined-contribution platform called BlueChoice. "It kind of fizzled out. Nobody was ready at that time."
But they soon will be. Part of it is just the ubiquity of the Internet. Part of it is getting used to health care as a retail market. And part of it, said Mr. Grossman of Mercer, is getting people to separate work from health insurance. If people don't buy auto or mortgage insurance through their employers, why do they get health insurance that way?
"The mindset for decades was, for most people, 'My employer provides it,' " Mr. Grossman said, and employers have done so, and continue to do so, for competitive reasons. Employer-sponsored health insurance became the norm in the U.S. following World War II, driven by recruiting needs and labor unions.
That era is ending, and Mercer is of the opinion that the "employee is in the best position to decide the best plan," Mr. Grossman said.
Mr. Brown predicted that in the next 18 months, up to 40 percent of small employers will be offering benefits through some kind of exchange and up to a quarter of midsized companies will do the same.
"The one thing I'm waiting for is someone really big to make a move [to exchanges] -- Walmart, McDonald's," Mr. Brown said. "That's the tipping point. And the entire market is going to start to switch."
Stress continues to boil up in American adults: APA study
Originally posted February 12, 2014 by Michael Giardina on https://ebn.benefitnews.com
Are Americans accepting ways to cope with ever skyrocketing stress levels that can make them more productive to employers? New research finds that traditional pressures continue to rise and more needs to be done to relieve this strain.
The American Psychological Association’s annual survey, released Tuesday, finds that stress continues to plague American adults. According to its Stress in America report, 42% say that stress levels have increased and 36% state that these levels have remained constant over the past five-years.
On average, despite reporting that a healthy stress level is 3.6 on a 10-point scale, survey respondents state their stress level is 5.1. APA says that only 10% of these adults actually make time for stress management activities.
Dr. David Ballard, who heads up APA’s Center for Organizational Excellence, explains that in stress “there is a sizeable gap of what people think is healthy and what they are experiencing.”
Ballard notes stresses related to money, work and the economy seem to support this year’s growth among the 2,000 adults who participated in the nationwide study. While “not unusual,” Ballard says the industry needs to act.
“[Employers] have a workforce…trying to be productive and engaged [but] who is overwhelmed,” Ballard says. “To have more than two-thirds of their workforce say that work is a major source of stress for them, it’s clearly something that employers and employees alike need to deal with.”
Individual stress interventions such as relaxation trainings, meditation, exercise or yoga classes and teaching time management skills are just some options for employers.
“The organizations that do take steps to address work stress typically are focusing on individual-level intervention….but this individual level approach by itself typically won’t be enough to prevent the stress from occurring in the first place and keeping it from being a problem,” Ballard continues. “The key is adding…organizational level things that can be done because when you look at what work stress really is, it’s a mismatch between the demands that employees are facing to the resources that they have available to cope with those demands.”
Previously, in February 2013, APA found that 31% of Americans who categorize themselves as suffering from high stress never discuss stress management with their health care provider. Moreover, 32% of Americans say they believe it is very or extremely important to talk with their health care providers about stress management, but only 17% report that these conversations are happening often or always.
In this year’s study, APA lists that stress impacts both sleep and exercise habits. Ballard says that employers can get ahead of the curve by first instituting hiring practices that find individuals who are a “good fit for the job and the organization.” He adds that additional training and development can help to handle conflicts that arise from positions, ambiguity of work tasks and the handling of high workloads.
Also, employers should assess social and work environment issues that can address team compatibility and workplace organization from both the social and physical dynamic, he says.
“When organizations understand that the health of their workforce and the performance and success of the company are linked together, then they’ll take steps that are both for the wellbeing of the worker and for the organization’s performance,” Ballard explains. “This isn’t just about doing the right thing and taking care of your workers, that is all true and it’s important, but it’s also smart business.”
Can Companies Screen Employees to Prevent Workplace Injuries?
Originally posted February 06, 2014 by Sandy Smith on https://ehstoday.com
Many companies are considering implementing functional capacity evaluations to ensure employees are fit enough to start new jobs or are ready to return to work after an injury.
What happens when increasing staff costs meet tighter skilled labor markets? Productivity becomes an issue, with increasingly more companies – particularly those with physically demanding work – looking to minimize staff downtime and ensure that workflow proceeds as smoothly as possible.
One way companies in Singapore are doing so is by accessing and ensuring that their employees are fit enough for the actual physical work to be done. The physical fitness level assessment of an employee to do his or her job is known as a functional capacity evaluation (FCE). As the name suggests, it measures the capacity of an employee to perform the tasks that their jobs require.
"In the past, it was generally large, foreign [companies] that were asking for FCEs but these days we have done evaluations for local companies,” said Sylvia Ho, the principal physiotherapist at Core Concepts, one of the largest private musculoskeletal healthcare groups in Singapore, specializing in spors medicine, workers’ compensation cases, massotherapy and physical and occupational therapy. “We see increasing demand [for FCEs] in the future. Rising operating cost and labor tightness will make the cost of conducting FCEs more and more viable.”
Functional capacity evaluations measure the ability of employees to carry out certain functional movements. Measurements include strength levels and stamina of certain basic movements involved in most job functions.
Ho said she takes it a little further to combine a musculoskeletal screening that also assesses the body's muscle, joint and skeletal structure to provide information about things like joint flexibility. “With our physiotherapy background, we aim to take a more comprehensive approach in detecting potential problems that may occur in the future,” she said. “Our clients come from a range of industries, including the pharmaceutical industry, the oil and gas industry and heavy manufacturing.”
FCE is only one piece of the productivity puzzle, but one of growing importance, said Ho.
“Singapore’s Ministry of Manpower has adopted a national, strategic and long-term approach to achieving sustainable, continuous improvement in workplace safety and health performance. We hope to play our role by helping industries prevent avoidable workplace health incidences,” she said.
Reminder: CMS Online Disclosure Due by March 1, 2014
This requirement is nothing new. In the past health plan sponsors have been required to complete an annual online disclosure form with the Centers for Medicare and Medicaid Services (CMS), to show whether the prescription drug coverage offered under the sponsor's plan/plans are "creditable" (at least as good as Medicare Part D's prescription drug benefit) or "noncreditable" (not as good). The plan sponsor must complete the disclosure within 60 days after the beginning of the plan year.
Who Is Exempt From this Process?
As an employer if you do not offer drug coverage to any Medicare-enrolled employee, retiree or dependent at the beginning of the plan year are exempt from filing. Similarly, employers who qualified for the Medicare Part D retiree drug subsidy are exempt from filing with CMS, but only with respect to the individuals and plan options for which they claimed the subsidy. If an employer offers prescription drug coverage to any Medicare-enrolled retirees or dependents not claimed under the subsidy, the employer must complete an online disclosure for plan options covering such individuals.
Filing with CMS is due by March 1, 2014.
A CMS filing is also required within 30 days of termination of a prescription drug plan and for any change in a plan's creditable coverage status. As described above some plans are exempt from the filing requirement.
Instructions related to the online filing discuss the types of information that are required, including the total number of Part D eligible individuals, the number of prescription drug options and which options are creditable and noncreditable. Click to access the instructions. Please save any documentation of this filing for your records.
Click to access the online portal that is used to complete the submission.
Look Out for the ACA’s ‘Double Whammy’ in 2016
Originally posted January 21, 2014 by Daniel Hood on https://eba.benefitnews.com
While they are currently exempt from the employer mandate to provide insurance and not considered part of the “Small Group Market”, small businesses with between 50 and 100 employees will find that all that changes for the worse in 2016, according to Mark Dietrick, CPA, ABV, author of The Financial Professionals Guide to Healthcare Reform and past chair of the American Institute of CPAs’ National Healthcare Industry Conference Committee.
Speaking in an American Institute of CPAs’ online conference, “Health Care Reform: A Deep Dive into the Affordable Care Act,” Dietrich explained that by 2016 the employer mandate will kick in for companies with between 50 and 100 employees, and they will be moved into the “Small Group Market” for insurance coverage.
In the Small Group Market, insurers charge higher premiums, not least because, “It’s cheaper to insure 200 people under a single contract than it is to insure 40 groups of five under 40 contracts, or 200 individuals” Dietrich said. While the group had previously been for companies with 50 or fewer employees, the ACA raised the limit to 100 employees — though the increase was put off to 2016 because the law gave states the option to postpone, which they all took.
It is one of the “least understood” parts of the ACA, Dietrich said. “By 2016, those with between 50 and 100 employees will be pushed into the Small Group, where the rates are higher. They need to think about it now, or they will be facing rate shock.”
“The reason they’re forcing these people into the Small Group Market is to expand the actuarial base and to absorb some of the expected losses,” he said. At the same time, Small Group premiums are likely to rise even more, he said, because of the benefit requirements in the ACA, which limit deductibles and don’t allow insurers to turn down those with pre-existing conditions.
Worse yet, he warned, states may eventually merge the Small Group Market with the markets for individuals. “If states don’t get the enrollment of young people that they expect [to make state insurance exchanges viable], then the likelihood of states combining the Small Group and individual markets will go up.”
If the two are merged, premiums will likely rise even more. Among other things, individual deductibles tend to be higher, but the ACA caps deductibles.
Possible Solutions
Dietrich noted that these rules don’t apply to the Large Group Market – and to companies that are self-insured.
“Virtually every large company in the country is self-insured,” he explained. “They insure them themselves, but work through an insurance company. … Ordinarily, I wouldn’t have suggested self-insuring for a business with less than 100 employees, but the insurance industry is offering new products to help companies escape some of the more burdensome requirements of the ACA.”
He’s seen a similar change in previous circumstances -- specifically under the health insurance reform program instituted early in the decade in Massachusetts, which many cite as the model for the ACA: “The pattern of looking for self-insurance has been running in Massachusetts for eight years.”
Top 10 Employee Training Mistakes
Originally posted on https://ebn.benefitnews.com
Employee training can be a valuable benefit, yet much of the money and time companies spend on training programs is wasted, contends John Tschohl, president of Service Quality Institute, a customer service training company. Here are the main reasons group training fails:
You can’t have a good group discussion if 100 people are in the room. Try to limit training sessions to 15 people so everyone has a chance to participate. If the group size is too large, most employees won’t participate.
It’s natural in groups for three people to speak up while everyone else stays silent. Facilitators must call on everyone in the room to participate — if they don’t, they won’t buy into the training goals.
People don’t like role-playing games. Games and exercises have to do with something that builds success as a team. Employees need to be actively involved in the exercise.
If the material is not easily understood, it will not be implemented. Test the material on several small groups. Make adjustments, then roll out the final version to the entire organization.
Facilitators should be seen and seldom heard. They should steer the conversation, but they should not dominate the discussion. They should ask leading questions and make sure everyone talks at some point.
Remember how you fell asleep when attending a boring lecture in college? Your employees are no different. Lectures are not an effective way to get employees to change their attitudes and beliefs or learn new skills.
If the material isn't relevant to their jobs, employees won’t accept it. They want ideas they can use immediately.
Learning can’t take place if employees aren't comfortable. Invest in a room that looks pleasant and professional, advises Tschohl. It sounds basic, but make sure the room is well heated or cooled and has comfortable seats. Offer refreshments. Make sure there aren't any outside distractions such as noise.
Employees can’t watch the same training materials twice. Organizations need to bring in new trainers with new information and different teaching styles.
Millennials may learn differently than their older colleagues and may get bored more easily. If the training isn't entertaining, you may lose their interest and participation.
“Play or Pay” Rules Delayed Until 2016 for Smaller Employers
Originally posted by https://blog.thinkhr.com
The Department of the Treasury and the Internal Revenue Service announced today that the Affordable Care Act’s health coverage mandate for employers with more than 50 employees but fewer than 100 employees working at least 30 hours per week will be delayed another year until 2016.
Employers with over 100 employees working at least 30 hours per week will become subject to the health coverage mandate under the Affordable Care Act (ACA) as previously announced beginning in January 2015. If these employers decide not to offer insurance to their employees, they will make an employer shared responsibility payment beginning in 2015 to help offset the costs to taxpayers for employees getting tax credits through the Health Insurance Marketplace.
“While about 96 percent of employers are not subject to the employer responsibility provision, for those employers that are, we will continue to make the compliance process simpler and easier to navigate,” said Assistant Secretary for Tax Policy Mark J. Mazur in the Treasury press release. “Today’s final regulations phase in the standards to ensure that larger employers either offer quality, affordable coverage or make an employer responsibility payment starting in 2015 to help offset the cost to taxpayers of coverage or subsidies to their employees.”
Today’s announcement included final regulations for implementing the employer shared responsibility provisions under the ACA, often referred to as the “Play or Pay” rules that will take effect in 2015.
To avoid this payment for the failure to offer affordable coverage meeting the minimum requirements as set forth in the regulations, these large employers will need to offer coverage to 70 percent of their full-time employees in 2015 and 95 percent starting in 2016. Full-time employment is defined as regularly working at 30 or more hours per week.
The immediate practical impact for employers includes:
- For employers with fewer than 50 employees: No impact, as this group was not subject to the employer shared responsibility provisions previously.
- For employers with 50 to 99 employees: For employers in this group that do not provide full-time employees with quality affordable health insurance, they will not have to pay any employer responsibility penalties in 2015. For 2015, this group will still be subject to provide an employee and coverage report as outlined in the ACA rules but will have until 2016 before the employer responsibility payments begin.
- For employers with 100 or more employees: Employers in this group are still subject to the mandate starting in 2015. What follows below are the highlights of the final regulations released today impacting the mandate for these employees to comply in 2015.
Key Elements of the Final Rules Impacting Employers with 100+ Employees in 2015
According to the Treasury Department Fact Sheet, the final regulations include the following changes:
- Coverage Thresholds: To avoid a payment for failing to offer health coverage, employers need to offer coverage to 70 percent of their full-time employees in 2015 and 95 percent starting in 2016. The original ACA rules required the 95 percent coverage beginning immediately.
- Full-time Employee Definitions:
- Volunteers: Bona fide volunteers for a government or tax-exempt entity, such as volunteer firefighters and emergency responders, will not be considered full-time employees.
- Educational employees: Teachers and other educational employees will not be treated as part-time for the year simply because their school is closed or operating on a limited schedule during the summer.
- Seasonal employees: Those in positions for which the customary annual employment is six months or less generally will not be considered full-time employees.
- Student work-study programs: Service performed by students under federal or state-sponsored work-study programs will not be counted in determining whether they are full-time employees.
- Adjunct faculty: Until further guidance is issued, employers of adjunct faculty are to use a method of crediting hours of service for those employees that is reasonable in the circumstances and consistent with the employer responsibility provisions. However, to accommodate the need for predictability and ease of administration and consistency, the final regulations expressly allow crediting an adjunct faculty member with 2 ¼ hours of service per week for each hour of teaching or classroom time as a reasonable method for this purpose.
- Full-time Employee Measurements: The final rules remain unchanged from the proposed rules that allow employers to use an optional look-back measurement method to determine whether employees with varying hours and seasonal employees are full-time. On a one-time basis, in 2014 preparing for 2015, plans may use a measurement period of six months even with respect to a stability period – the time during which an employee with variable hours must be offered coverage – of up to 12 months.
- Affordability Safe Harbors: As with the proposed regulations, the final rules provide safe harbors for employers to determine whether the coverage they offer is affordable to employees, including the W-2 wages, employees’ hourly rates, or the federal poverty level.
- Other Provisions of the Final Regulations:
- Employers first subject to shared responsibility provision: Employers can determine whether they had at least 100 full-time or full-time equivalent employees in the previous year by reference to a period of at least six consecutive months, instead of a full year.
- Non-calendar year plans: Employers with plan years that do not start on January 1 will be able to begin compliance with employer responsibility at the start of their plan years in 2015 rather than on January 1, 2015, and the conditions for this relief are expanded to include more plan sponsors.
- Dependent coverage: The policy that employers offer coverage to their full-time employees’ dependents will not apply in 2015 to employers that are taking steps to arrange for such coverage to begin in 2016.
Treasury and the IRS stated that additional final regulations will be forthcoming to streamline the ACA reporting requirements. Final rules will be published in the Federal Register on February 12th. We will continue to provide updates as more information is known.
For more information:
Treasury Press Release: https://www.treasury.gov/press-center/press-releases/Pages/jl2290.aspx
Treasury Fact Sheet: https://www.treasury.gov/press-center/press-releases/Documents/Fact%20Sheet%20021014.pdf
IRS Regulations (227 pages): https://s3.amazonaws.com/public-inspection.federalregister.gov/2014-03082.pdf
Taking A Strategic Look at Health Insurance and PPACA
Originally posted February 05, 2014 by Thom Mangan on https://eba.benefitnews.com
I checked in with Peter Freska, CEBS, Benefits Advisor with UBA Partner Firm, The LBL Group, and asked him what he’s seeing in the employer-sponsored insurance marketplace. Peter specializes in the large employer market and emphasizes long-term strategic planning to his clients.
Thom: Peter, what are you seeing as the top questions on employers’ minds as they begin to plan (if they have not already) for how best to adapt to the changing health insurance market?
Peter: Healthcare.gov offers some interesting insight into what business owners are asking, with the following questions:
While these questions may be a good place to start, employers are still faced with rising insurance premiums and reduced benefits. Planning for next year has always been important, but unfortunately, many employers only look as far ahead as the next renewal. The health care landscape is rapidly changing. With the current insurance companies re-filing new plans and networks, and new companies trying to break into the health insurance market and the continued vertical and horizontal integration of health care delivery systems — well, the times they are a-changin’.
Thom: What, currently, is the most pressing aspect of health care reform in the eyes of many employers?
Peter: As it sits, the “Cadillac Tax” legislation that’s slated to take effect on January 1, 2018.
Employers who provide health plans that are too rich (“Cadillac plans”) must pay a non-deductible 40% excise tax on the value of health plan coverage that exceeds $10,200 (indexed) for individual coverage and $27,500 (indexed) for family coverage. Value is based on both employer and employee contributions for medical coverage, health FSAs, HRAs, onsite clinics and employer HSA contributions.
Thom: Yes, according to the most recent UBA Health Plan Survey, employers in the Northeast are particularly at risk of facing the “Cadillac Tax” because of their high annual cost per employee (total cost). The Northeast has the highest total cost in the country at $10,808 per employee, which also saw the largest increase in cost at 5.35% (mostly because they still offer low deductible plans). The Southeast, however, remains the lowest cost region at $7,846 per employee with a renewal of 1.98%. A combination of non-deductible plans in the Northeast with a prevalence of massive state-mandated benefits is what’s driving the high costs of the Northeast (if fully insured).
So this impending tax poses some interesting questions for employers. What are they doing to prepare for this event?
Peter: Good question, Thom. Some wonder if they even should plan for this event! Many feel that these limits are too low, as there are plans today that exceed these numbers. Others feel that the inflation rate that the health plan values are indexed to after 2018 (CPI-U + 1%) is too low, stating that it does not meet medical inflation rates (Health Policy Briefs – Excise Tax on ‘Cadillac’ Plans).
But ultimately, when coming face-to-face with this excise tax, businesses will have to get their costs under control in order to avoid it. The question is, how do they do that?
We’ll likely see more of the same that they have done for many years: more managed care and cost shifting through contribution and benefit changes. The question that remains is, “will this be enough?” As medical costs continue to rise and more minimum value plans are offered by employers, when will the wiggle room be gone?
Employers with a strategic viewpoint are working with their trusted advisor to review the possibilities. They are strategizing on options now so that they are prepared for what lies ahead. There might be changes to the “Cadillac Tax,” but this is only one of several taxes under PPACA. Additionally, there are employer reporting requirements going into effect. Employers have more to manage than ever before. It is more important than ever to partner with an advisor that understands these new responsibilities, and is able to work with an employer to meet their goals. Always review the scope of work from an advisor to make sure it can align with the strategic goals of the organization. With or without PPACA, this is how an employer can make a difference in how it provides benefits.
Thom: Yes, although challenging, it’s an exciting time to be a benefits advisor. Thank you, Peter, for sharing this information.