6 health care trends for 2014
Originally posted by EBA https://eba.benefitnews.com
2013 was a pinnacle year in health care with the opening of the Affordable Care Act’s health care exchanges. But what can we expect in 2014? EBA spoke with experts across the spectrum to find out.
1. Complying with the ACA
The Affordable Care Act will continue to have a lasting impact into 2014. With the employer mandate pushed off and the penalties delayed as well, brokers will spend most of 2014 making sure their clients are complaint for 2015, says Mark S. Gaunya, principal at Borislow Insurance.
2. Losing coverage
In addition to focusing on compliance in 2014, Gaunya believes that many people will be in for a big surprise on Jan. 1 when “millions wake up and can’t see their doctor.” Gaunya predicts that many people who had coverage will lose it — 110,000 alone in his home state of Massachusetts — and some won’t even realize it until they go to the doctor.
3. Health care eligibility issues
With the ACA and Windsor decision on DOMA, employment lawyer Keith R. McMurdy of Fox Rothschild LLP believes many plan sponsors in 2014 are going to have problems with plan eligibility definitions. “Lots of employers don't really remember that changing eligibility and participation requirements requires an update of plan documents, revisions to SPDs and summaries of material modification,” he says. “I think that as the year progresses between litigation and EBSA audits we are going to see a lot of plans that have conflicting language over how they are being administered. “Plan sponsors that don't do complete review of these eligibility rules are going to find themselves in a world of hurt,” he adds.
4. Uneven risk pool hurts carriers
Insurance carriers whose plans are sold through the exchanges will issue earnings reports much worse than average in 2014, predicts Thom Mangan, CEO of United Benefit Advisors, due to the failure to enroll the young and healthy. Mangan says that after that happens the federal government will offer “some financial assistance to insurance carriers but not enough to make them whole.”
5. A small rise in health care costs
In 2014, the medical cost trend is estimated to be 6.5% by PricewatehouseCoopers Health Research Institute — one full percentage point below 2013’s estimate. After accounting for benefit design changes, such as higher deductibles, the net growth rate will be 4.5% in 2014, pWc predicts.
6. A request to drop coverage
In 2014, individual employees will realize they can get individual health coverage for less than their employer's group health plan, says Rick Lindquist, president of Zane Benefits Inc. “As a result, employees will start asking their employers to drop coverage, which will cause the small businesses health insurance market to implode in favor of defined contribution health benefits,” he says.
Join the January 13 Event
Originally posted on https://www.rwjf.org
Building on its original work from 2009—which helped advance a national movement to address non-medical factors that affect our health—the RWJF Commission to Build a Healthier America will release new recommendations on Monday, January 13, 2014, at 2:30 p.m. ET, during a live online event.
Watch the YouTube video on Creating a Culture of Health: https://youtu.be/XeIfRaKqDnw
During the event featuring Commission Co-Chairs Mark McClellan and Alice Rivlin, Commissioners will offer recommendations covering three key areas:
- Prioritizing investments in America’s youngest children
- Encouraging leaders in different sectors to work together to create communities where healthy decisions are possible
- Challenging health professionals and health care institutions to expand their focus from treating illness to helping people live healthy lives
IRS limits PPACA group tax credit relief
Originally posted December 18, 2013 by Allison Bell on https://www.benefitspro.com
A few U.S. counties might have a slightly easier time using the federal health insurance tax credit next year.
The Internal Revenue Service has temporarily eased the qualification rules for the tax credit – but only for employers in five counties in Wisconsin and 37 of the 39 counties in Washington state.
The IRS will let small employers in those counties use the tax credit in 2014 without offering a health plan from a public health insurance exchange, according to IRS Notice 2014-6.
Carriers in the affected counties won’t be offering any small-group exchange plans in 2014, officials say.
Section 1421 of the Patient Protection and Affordable Care Act created the tax credit by adding Section 45R to the Internal Revenue Code.
Before 2014, any small employer with modestly paid employees could use the tax credit.
Once the Small Business Health Options Program exchange plans open, employers are supposed to use the credit to pay for SHOP exchange plan coverage.
Uptick in wage growth likely in 2014, Bloomberg index says
Originally posted December 18, 2013 by Dan Berman on https://www.benefitspro.com
Here’s a year-end forecast that might give private-sector workers reason to smile: Bloomberg BNA’s Wage Trend Indicator sees the pace of income growth accelerating in the second half of 2014.
After consecutive quarters of flat wages, the index rose to 98.78 in the fourth quarter from 98.70.
“We are beginning to see some improvements in the labor market, with the unemployment rate falling to 7 percent in November,” said economist Kathryn Kobe, a consultant who maintains and helped develop Bloomberg BNA’s WTI database.
In the coming months, Kobe said private-sector wage growth was expected to be 2 percent, slightly above the 1.8 percent year-over-year gain reported by the Labor Department in the third quarter.
The index measures seven components. Of those, three were positive in the fourth quarter, three were negative and one was neutral.
The three positive components were the unemployment rate; the average hourly earnings of production and non-supervisory workers, both from the Labor Department; and the share of employers reporting difficulty in filling professional and technical jobs, reported by a Bloomberg BNA survey.
Negative factors were job losers as a share of the labor force, from the Labor Department; the share of employers planning to hire production and service workers in the coming months, from Bloomberg BNA’s survey; and industrial production, as reported by the Federal Reserve Board.
The neutral component was forecasters’ expectations for the rate of inflation, compiled by the Federal Reserve Bank of Philadelphia.
The index is published monthly and Bloomberg BNA said it is designed to detect changes in wage growth before they become apparent in the BLS’ employment cost index.
Top 10 craziest business expenses of 2013
Originally posted on https://eba.benefitnews.com
What’s the strangest expense your organization has charged to the company credit card? These 10 employers have expensed some pricey and downright unusual items to entertain clients and travel in style. Here are the 10 most interesting responses from over 60,000 business travelers surveyed by online expense management provider, Certify.
One banking company definitely has a sweet tooth; it expensed $500 worth of taffy apples last year, according to its executive vice president.
This expense was labeled as ‘entertainment’ but as the accounting firm admits, it was more accurately described as “table dancing.”
An indoor trampoline entertained employees and clients at an expensed event.
A financial adviser expensed “golf swing analysis” for his client.
For this unusual tradeshow booth, “we purchased 200 used hubcaps [for a] display revolving around a celebrity chef with a huge ego,” writes a director of treasury about the company’s most bizarre expensed item.
Purchasing autographed basketballs are considered a business expense at one organization, where a director of finance expensed nine official NBA basketballs signed by Magic Johnson.
“Purchasing a human skull for a medical experiment, I would say this classifies as an out-of-ordinary expense,” explains a finance manager for an antique business.
Employers don’t just make up appearances, they go above and beyond for a client. “Hair salon highlights for a client [was] one of the craziest expenses I have had to approve,” wrote a senior payroll manager at a technology company.
One finance director expensed a luxury fishing trip with clients. The week-long deep sea fishing adventure in the Bahamas cost $91,237.
One creative business traveler to Hong Kong didn't fret when every hotel room was booked due to the Consumer Electronics Show. “I had to rent an apartment and then cancel the lease,” explains a vice president of business development at a telecommunications company.
What’s ahead in 2014 for PPACA
Originally posted December 18, 2013 by Nathan Solheim on https://www.benefitspro.com
Let’s be honest. In the history of American health care, the year 2013 won’t exactly go down as a time that went as smoothly as one of President Barack Obama’s campaign speeches.
At mid-year, most observers could see some of the downsides: rising premiums and dropped policies. Deadlines had to be pushed back, and some parts of the law demanded rewrite.
And by October — when the exchanges rolled out — there were (are) glitches with state websites and www.healthcare.gov, which prompted calls for Silicon Valley to rescue the $600 million mess. Tea Party Republicans partially closed the government in an attempt at political blackmail, while Democrats quickly distanced themselves from the program’s failures. It was difficult for any good news about PPACA — such as reduced premiums for some consumers and the ability for people with pre-existing conditions to buy coverage again — to cut through the media morass.
But even though PPACA implementation has been bumpy, it will continue — and 2014 will prove to be a pivotal year. Much of the law’s major provisions take effect next year, and yes, there are likely to be more delays or problems. Brokers can count on clients, employees and HR managers turning to them for advice on coming into compliance with the law and helping make decisions in the uncertain business environment ahead.
“In some respects, someone who’s new to insurance and is learning the new scheme — they’ll have an advantage because the stuff we used to know doesn’t apply anymore. It’s all new,” says Pamela Mitroff, director of state affairs for the National Association of Health Underwriters. “I answer the bulk of compliance questions from our members. I get 20–30 a day, and they’re not just one simple question. Many of them will have a page of questions.”
Here’s a look at what’s ahead in 2014 for PPACA:
The individual mandate
Beginning Jan. 1, 2014, Americans must buy health insurance from a private insurance provider or through a public program. While the glitch-marred exchange website debuted in October 2013, individuals must have insurance by Jan. 1 in order to comply with the new regulation. The penalty for failing to do so is either $95 or 1 percent of a person’s income — whichever is higher.
Market reforms
PPACA includes a bevy of market reforms — the most notable being that carriers will have to cover people with pre-existing conditions. Others include prohibiting lifetime limits, defining small employer groups as between 1–100 employees (some states can define as 50 employees until 2016), and limiting annual deductibles to $2,000. Brokers and agents point to PPACA’s edict on modified community ratings as a major factor in potential increases in the cost of plans. PPACA mandates a 3:1 community rating, while some states are as high as 8:1. Carriers also will not be able to charge more for women.
“You’ll see younger people with plans that go up in price, and the older folks, in all likelihood, stay where they were,” says Zach Zinser of Zinser Benefit Service in Louisville, Ky. “They’re going to raise the bottom up.”
Tax credits begin
Because of the individual mandate, Obamacare also includes tax subsidies for individuals to help them afford the cost of health insurance. However, the tax credits are dependent on annual income and access to private plans. Brokers have answered a lot of questions from employees about whether they qualify for a tax credit and will continue to do so.
“The No. 1 question I get is, ‘Am I eligible for a subsidy?’” says Trish Freeman of Trish Freeman Insurance Service in Gonzalez, La.
“When people hear Affordable Care Act or they hear comments from [The Department of] Health and Human Services or the president, they’re expecting something affordable,” says Darlene Tucker, owner of Darlene Tucker Insurance and Financial Planning in Scotts Hill, Tenn. “And they may or may not find it affordable. We’re going to see a lot of people where the premium is not affordable. And I think we’ll still see people who can’t afford the premium who aren’t eligible for the subsidy.”
New tax No. 1
To help pay for it, architects of the law built in several new taxes and fees on carriers. Perhaps the most expansive is called the Health Insurance Tax, which is expected to generate $8 billion in 2014 and more than $100 billion over 10 years, according to America’s Health Insurance Plans. Several groups — and unions that have negotiated top-shelf plans for their members — have started lobbying to repeal the tax.
New tax No. 2
Another tax comes in the form of the “transitional reinsurance fee.” A fee of $63 for each life covered on a health insurance plan will be collected yearly from carriers. The fee will be first be collected in 2014, and it will continue being collected through 2016. The fee is supposed to offset the extra cost of covering people with pre-existing conditions.
Brokers and agents credit these two new taxes and others as contributors to premium increases across the country.
“Those are all taxes that will be built into the price now,” Zinser says.
Medicaid expands
Medicaid — the state-federal program that provides health coverage for the poor — will expand to cover individuals whose incomes are 133 percent of the federal poverty level. Some states have opted not to take part in the Medicaid expansion.
Health care co-ops
Co-ops will be allowed to compete for consumers on the exchanges. An Oct. 22 story in theWashington Post, however, reported some co-ops are in trouble and might not have enough funding to adequately begin operations. In some states, though, co-ops have launched.
“Unfortunately, when everyone in Michigan had to submit their rates, it was a guessing game, and [the co-op’s] rates are higher,” says Denise Van Putten, an account executive with the Grand Rapids, Mich.-based Lighthouse Group. “I think a co-op is a good idea if we can get the rates to be competitive.”
Freeman pointed out the relative youth of the co-ops — many of which were created during the time since Obamacare’s passage — could affect consumers’ perception about their quality and affordability.
“In Baton Rouge, there are two companies on the exchange — we have Blue Cross and the Louisiana co-op,” Freeman says. “People are a little leery about companies they don’t know anything about.”
Minimum standards
All health insurance policies must adhere to standards set forth under PPACA. People who’ve lost policies in 2013 and those who will continue to lose coverage in 2014 will do so because their existing plans don’t meet 10 minimum standards mandated under PPACA.
Those standards include:
- ambulatory patient services
- emergency services
- hospitalization
- maternity and newborn care
- mental health and substance use disorder services, including behavioral health treatment
- prescription drugs
- rehabilitative and habilitative services and devices
- laboratory services
- preventive and wellness services and chronic disease management
- pediatric services, including oral and vision care
Waiting periods defined
Also starting Jan. 1, the waiting period for people to sign up for health insurance will be set by PPACA. Waiting periods of more than 90 days will be prohibited for all health plans. Brokers and agents say this provision mainly affects businesses and industries that experience high turnover.
Wellness worth more
PPACA also allows employer-sponsored wellness programs to increase the value of incentives. After Jan. 1, employers can increase the value of incentives to 30 percent of premiums. For reducing tobacco use, employers can increase the maximum reward up to 50 percent.
Factor in the new regulations with parts of the law that are already in effect, and brokers and agents agree that there has been a profound impact on the individual and small-group markets. Some warn that the market could disappear, while others say the market can withstand Obamacare’s regulations.
“For brokers that work in the small-group arena, the vast majority of groups with under 50 employees are going to look at dropping their coverage,” Tucker says. “That’s been my opinion since the law passed, and nothing has happened to change my mind.”
Van Putten says that among the more than 500 small groups he manages, less than 10 percent will drop their coverage.
“The rates out there for individuals are high,” she says, “so they’re completely different from the group plans.”
So as 2014 looms, brokers around the country are continuing to advise clients. But they’re also looking around for new opportunities and developing strategies to keep their own businesses afloat. Some have advised a wait-and-see approach, while others have been more aggressive.
Freeman says at the end of the day, it’s about helping clients.
“I can’t bail on them,” she says. “I can’t leave them with a navigator — someone who’s had 20 hours of training when I’ve had 20 years of training. I will get my clients through this, and as long as I don’t lose money in the future, I’ll be here.”
6 voluntary trends and opportunities for 2014
Originally posted on https://eba.benefitnews.com
Experts in the voluntary field share predictions for the coming year — and some pretty crazy products that can now be sold through payroll deduction. Comments compiled at SourceMedia’s Workplace Benefits Transitions conference in Chicago Dec. 10-12
Voluntary overall
“[Voluntary] prospects are outstanding because change brings opportunity. Not only today, but going into the future, it’s going to present a lot of great opportunities for us,” said Charlie Grim, sales manager at The BenefitSource in Elmhurst, Ill. While conference co-chair Walter Podgurski noted that Gil Lowerre, president of Eastbridge Consulting and leading expert in voluntary research, has predicted that 2014 will once again be a banner year for the products with health reform fully in place.
Long-term care
Technology
Employer actions need to catch up with financial wellness wishes
Originally posted December 12, 2013 by Andrea Davis on https://ebn.benefitnews.com
Employers are embracing the concept of financial wellness, with 81% of HR professionals saying they believe they are at least somewhat responsible for their employees’ financial wellness, according to a survey released this week by Bank of America Merrill Lynch.
Seventy percent of the 1,000 companies surveyed offer various forms of education related to retirement and, to a lesser extent, planning for health care costs (38%), as well as debt management and budgeting (15%).
And while employers say they’re interested in the concepts of financial wellness and retirement readiness, their actions may have some catching up to do. Less than half of large companies (48%) has a financial wellness strategy in place for employees or plan to add one in the next two years. Among medium-sized companies, the percentage drops to 43%. Among small companies, 26% have a financial wellness strategy in place or plan to add one in the next two years.
“It will be interesting to see how quickly do they then adopt practical, tangible programs to realize their aspirations of what they want to do with their employees,” says Kevin Crain, senior relationship executive for Bank of America Merrill Lynch. “It’s still early stage in their thinking.”
Perhaps not surprisingly given all the attention the Affordable Care Act is receiving, one-third (32%) of HR professionals say they’ve increased the time they spend educating employees about the role workplace benefits play in their financial security.
One area many employers agree needs greater focus and employee education is the rising cost of health care. Eighty-one percent of companies report an increase in health care costs during the last two years, and many admit to having had to pass these rising costs along to their employees. The study found that more than one-third (35%) of employers now provide employees with education about what health care could cost them during retirement, up from 21% in 2012. Among employers who provide at least some education about retiree health care costs, nearly half (45%) believe more needs to be done in this area.
“Employers now understand their employees need far more transparent and easier ways to understand what the cost of health care will be in the future,” says Crain. “The health care expense piece [of retirement] was always, in my mind, not as robust as it could have been.” With all the attention on the ACA, health care costs in retirement is an issue “that’s been brought to the forefront,” he says.
Co-worker relationships more important for employee engagement
Originally posted December 12, 2013 by Amanda McGrory-Dixon on https://ebn.benefitnews.com
When it comes to having an engaged workforce, who your employees work with — rather than who they report to — is an increasingly important factor, according to a recent survey.
The survey from TINYpulse reveals that relationships among co-workers are more responsible for their happiness than their managerial relationships by 23.3%. This finding is supported by a recent survey by the Society for Human Resource Professionals, which shows that 79% of respondents in 2012 regarded their relationships with co-workers as important, up from 76% in 2011. The same SHRM survey also shows that the importance of their relationships with direct supervisors dropped from 73% in 2011 to 71% in 2012.
Among the most desirable traits of co-workers are team play and collaboration, 44.3% of respondents say. Meanwhile, knowledge, skills and talent are considered the top traits of co-workers by only 26.4% of respondents.
"This shows that who you work with is becoming more important than who you work for,” says David Niu, founder and CEO of TINYpulse, which conducted the survey. “We often think of employee happiness and satisfaction as being manager-driven, but now as the workplace becomes more cross-matrixed, collaborative and ‘bottom-up,’ the importance of co-worker relationships continues to grow."
But the leading driver of employee engagement is management transparency, according to the survey.
"Not only are capital markets demanding transparency, employees want the same from their leadership,” says Niu. “The cost of improving transparency is almost zero, and we are seeing an increasing number of companies using transparency as an advantage when attracting and retaining top talent."
The survey findings suggest that organizations must focus on management transparency and recruiting more collaborative employees if they expect to keep employees engaged. Many respondents, however, are already practicing transparency as 82% say their managers have openly communicated their roles and responsibilities. Still, just 42% of respondents report knowing their organizations’ visions, missions and values.
The survey included more than 40,000 responses from 300 organizations.
Bosses: Here are 7 New Year’s resolutions to help retain your talent
Originally posted on December 16, 2013 by Tim Loh on https://blog.ctnews.com
Each year, employees make career-related New Year’s resolutions much more frequently than their bosses — but their top resolution is to find a new job, according to Danbury’s OI Partners-Cunis & Gontin, a coaching and leadership development consulting firm.
And so, Cunis & Gontin has put together a list of New Year’s resolutions for bosses that should help them retain their top talent.
“If more managers resolved to develop their employees’ leadership skills, invite their input, demonstrate continued interest in their careers and recognize their contributions, fewer workers would be determining to find new jobs each year,” said Mary Ann Gontin, Managing Partner with OI Partners-Cunis & Gontin.
Retaining talented employees has become a higher priority in an improving job market, the firm said, as more than three-fourths of employers worry about losing key employees, according to a survey by OI Partners.
Here are the top seven resolutions managers can make to help retain talent:
1. Coach workers in how to become more influential and persuasive. “Explain the implications of their actions and decisions on internal politics and help them become savvier. Provide training and guidance in how to craft their messages to meet the needs of others. Managers are too often frustrated by employees’ inability to work effectively through others. Teach them how to win over people in appropriate ways,” said Gontin.
2. Develop employees’ leadership skills. “Use challenging ‘stretch assignments’ that motivate workers, require them to learn new skills and build coalitions. Look for opportunities where members of your team can step into leadership roles. That may mean you have to be in the background more and become comfortable with sharing the spotlight,” said Gontin.
3. Improve your feedback and increase their accountability. Most managers are inconsistent in communicating expectations and holding people accountable. Be clear about your expectations and give timely feedback to your team when they do a good job or miss the mark.
4. Tap into employees’ wealth of knowledge and experience. Encourage employees at all levels to suggest, create and communicate new ideas based on the direct experience of those on the line. Personally ask people for their input to get the best recommendations.
5. Demonstrate continued interest in employees’ careers. Reassure employees that they are appreciated for the work they’re doing. Increase the frequency of discussions about their careers and one-on-one meetings with their managers.
6. Recognize and reward contributions. Managers should be certain they recognize employee contributions, both big and small. A compliment from the boss can be as effective as a monetary reward. Many employees feel that their managers do not spend enough time thanking them for a job well done, but are too quick to criticize them for making mistakes.
7. Build teamwork and provide developmental coaching to workers.
Look for ways to partner employees on projects and concentrate on assembling compatible teams. Include ground rules on how they should work together, check in with them periodically throughout the assignment and facilitate a discussion on what’s working and what’s not. Coordinate a debriefing at the end of the project for overall feedback and lessons learned. Developmental coaching sharpens employees’ leadership skills and helps retain the most talented workers.