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.
Five predictions for 2014: revolutionizing employee engagement
Originally posted January 29, 2014 by Keith Kitani on https://ebn.benefitnews.com
In 2013, the crucial parts of health care reform became a reality after months of debate and discussion, employers across the country revamped plans while consumers attempted to make sense of the complex and confusing new landscape. As we begin the New Year, educating employees about new benefit programs through innovative, digital communication will be absolutely crucial. Here are five predictions for what 2014 will bring:
Education will trump uncertainty – Health care reform created a massive opportunity for companies to re-think how they communicate about health plans. This will be the year for organizations to step up their communications to ease the uncertainty many felt in 2013.
The shift to digital – Smartphones and tablets are the new M.O. for consuming information. Employers will make the shift to communicate important content in digital formats available to employees anytime, anywhere.
The customized economy – Greater customization will emerge for engaging a company’s workforce and for influencing company culture. Companies will communicate with employees in the company's unique voice and style, and provide consistent and digestible messaging regardless of employee location or job function.
Employee engagement will be measured – With communications going digital, companies will have more concrete ways to measure employee sentiment, by tracking actual behavior. This new awareness will drive new initiatives to address and further improve employee engagement.
Wellness programs will become more prevalent – With more focus on high deductible health plans, due to HCR, wellness programs will become more mainstream to promote positive health, as well as to help companies attract and retain talent.
2014 will be the year when employers start to embrace more innovative ways to communicate with employees. Those employers who focus on employee education, leverage digital channels, and customize their communications appropriately will not only enjoy higher employee engagement but also a greater awareness of the level of that engagement. We see, time and time again, that engaged employees are more productive employees. Those companies who get employee engagement right will see it in their bottom line.
Kaiser Health Tracking Poll for January 2014
Originally posted January 30, 2014 on https://kff.org
January 1st may have been a monumental date for those working on and closely following the Affordable Care Act (ACA), but the latest Kaiser Health Tracking Poll finds little change in the public’s knowledge and views of the law. With enrollment in new coverage options underway, a majority of the public believes that only “some” of the ACA’s provisions have been put into place, while just about one in five think “most” or “all” of the law has been implemented. Awareness of the law’s individual mandate and health insurance exchanges has increased slightly since last year, but about four in ten of the public overall and half the uninsured remain unaware of other major provisions. For the third month in a row, overall views of the law remain at their post-rollout more negative levels (50 percent unfavorable, 34 percent favorable), though over half the public – including three in ten of those who view the law unfavorably – say opponents should work on improving the law rather than keeping up efforts to repeal it.
Among the uninsured – a key group for outreach under the law – unfavorable views now outnumber favorable views by roughly a 2-to-1 margin (47 percent versus 24 percent). This is a change from last month when 43 percent of the uninsured had an unfavorable view and 36 percent were favorable. More of those without coverage say the law has made the uninsured as a group worse off (39 percent) than better off (26 percent). Despite these views, large shares of the uninsured see health insurance as “very important” and say they need it, while four in ten say they’ve tried to get coverage in the past 6 months, and half expect to get it this year.
January 1st Didn’t Register With The Public
The latest Kaiser Health Tracking Poll finds that even after most of the ACA’s major provisions took effect on January 1, a large majority of the public (62 percent) continues to believe that only “some” provisions of the ACA have been put into place thus far. Only about one in five (19 percent) say “most” or “all” provisions have been implemented, up somewhat from 9 percent last March.
When it comes to the individual elements of the law, awareness has increased slightly for two of the big ones: the individual mandate (81 percent now say it is part of the law, up from 74 percent last March) and the health insurance exchanges (68 percent, up from 58 percent). Still, large shares of the public – and even higher shares of the uninsured – remain unaware of some other major provisions of the law. For example, roughly four in ten adults overall, and about half of the uninsured, are not aware that the law provides financial help to low- and moderate-income Americans to help them purchase coverage, gives states the options of expanding their Medicaid programs, and prohibits insurance companies from denying coverage based on pre-existing conditions.
| FIGURE 2: Many Uninsured Remain Unaware Of Some Major ACA Provisions | ||||
| Total public | Uninsured, age<65 | |||
| To the best of your knowledge, would you say the health reform law does or does not…? | Yes, law does this | No/Don’t know | Yes, law does this | No/Don’t know |
| Require nearly all Americans to have health insurance or else pay a fine | 81 | 19 | 79 | 22 |
| Create health insurance exchanges or marketplaces where people who don’t get coverage through their employers can shop for insurance and compare prices and benefits | 68 | 31 | 62 | 38 |
| Provide financial help to low and moderate income Americans who don’t get insurance through their jobs to help them purchase coverage | 63 | 38 | 54 | 46 |
| Give states the option of expanding their existing Medicaid program to cover more low-income, uninsured adults | 58 | 42 | 49 | 51 |
| Prohibit insurance companies from denying coverage because of a person’s medical history | 54 | 46 | 48 | 53 |
On a more personal level, 44 percent of the public overall – including 66 percent of the uninsured –continue to say they don’t have enough information to understand how the law will impact their families.
Overall Views Remain Negative, But Public Wants Opponents To Work On Fixes Rather Than Repeal
Views of the law overall remain more negative than positive this month, with 50 percent saying they have an unfavorable view and 34 percent favorable, almost identical to the split in opinion since November. Still, more than half the public overall, including three in ten of those who view the law unfavorably, say opponents should accept that it’s the law of the land and work to improve it, while fewer than four in ten want opponents to keep up the repeal fight.
Most Continue To Say They Haven’t Felt An Impact From The ACA, But More Feel They’ve Been Affected Negatively Than Positively
At the same time, most Americans continue to report no personal experience with the law to date. Roughly six in ten say they haven’t been directly impacted by the law in a positive or negative way, though the share who perceive that they’ve been negatively impacted continues to be larger than the share who feel they’ve benefited (27 percent versus 15 percent). Those who feel they’ve been negatively impacted by the law are most likely to point to high costs of health care and insurance as the reason. With official data showing that only a very small share of the public overall have enrolled in the ACA’s coverage arrangements so far, these shares likely reflect people’s perceptions of being helped or harmed by the law, rather than actual experiences with new insurance options under the ACA.
Among The Uninsured, Unfavorable Views Outnumber Favorable By 2-to-1, And More Believe They’re Worse Off Under The Law Than Better
Among the uninsured – a key group targeted by the ACA – views of the law shifted negative this month. A quarter (24 percent) of those who currently lack coverage now say they have a favorable view of the law, while nearly twice as many (47 percent) have an unfavorable view and about three in ten (28 percent) decline to offer an opinion. In December, views among the uninsured were more evenly split (36 percent favorable, 43 percent unfavorable).
More than half of the uninsured (54 percent) say the law hasn’t made much difference for their families, and the share who feel they’re worse off as a result of the law is more than twice the share who feel they’re better off (30 percent versus 13 percent). When asked about the uninsured as a group, those without coverage are more likely to say the law has left this group worse off than better (39 percent versus 26 percent). We will continue to track these perceptions as more of the uninsured gain coverage.
Most Uninsured Say They Need Coverage; Four In Ten Have Tried To Get It In The Last 6 Months; Half Expect To Get It This Year
The survey also finds that most of the uninsured see health insurance coverage as very important (70 percent) and something they need (73 percent). Among those who currently lack coverage, four in ten say they have tried to get it in the past 6 months, including about one in five each who tried to get coverage from Medicaid (19 percent), directly from a private insurance company (19 percent), and through a state or federal health insurance exchange (18 percent).1
When told or reminded of the law’s requirement that most Americans obtain insurance or pay a fine, half the uninsured say they expect to get coverage, including about one in five (18 percent) who expect to purchase it themselves (either from a private insurance company or through an exchange), 8 percent who expect to get it from Medicaid, and 6 percent who expect to get coverage from an employer. A sizable share (17 percent of the uninsured overall) say they expect to get coverage but are unsure where.
Four in ten of those without coverage say they expect to remain uninsured, with most of these saying they don’t think they’ll be able to find an affordable plan. As noted above, many of the uninsured remain unaware of the additional options available to them under the ACA, including the insurance exchanges, subsidies, and expanded Medicaid in some states.
A Quarter Of The Public Overall Report A Change In Their Insurance Situation In The Past 6 months, Including One In Ten Who Attribute It To The ACA
As we pointed out in this Data Note [hyperlink], national public opinion polls aren’t the best vehicle for measuring the experiences of the small group of people who’ve actually gained coverage through the ACA so far. One thing we can do on the Kaiser Health Tracking Poll is to measure people’s perceptions about changes in their insurance situation and what role they think the law has played in those changes. This month’s poll finds a quarter (24 percent) of the public reports that they’ve had a change in their health insurance situation in the past 6 months, and four in ten of these (10 percent of the public overall) believe this change was a result of the health care law.
Among the 10 percent who perceive that their insurance status has changed as a result of the ACA, twice as many believe it was a change for the worse rather than for the better. However, about half this group currently has coverage through an employer, and most report that the change in their coverage was a change from one plan to another, suggesting that many of them may be attributing regular changes in insurance coverage to the law.
| FIGURE 11: Perceptions And Demographics Of Those Who Believe They Had A Change In Insurance Status As A Result Of The ACA | |
| Among the 10% who had a change in insurance status and believe it was a result of the ACA | |
| Would you say the change in your health insurance situation was a change for the better or a change for the worse? | |
| Better | 29% |
| Worse | 61 |
| No difference/Don’t know/Refused | 10 |
| Which best describes the change in your health insurance situation? | |
| Changed plans | 45 |
| Lost or dropped coverage | 14 |
| Got health insurance after being uninsured | 15 |
| Costs went up (vol.) | 12 |
| Some other change | 10 |
| Current health insurance status/type | |
| Insured (NET) | 92 |
| Employer | 50 |
| Self-purchase | 19 |
| Medicare | 6 |
| Medicaid | 13 |
| Other coverage | 3 |
| Uninsured | 6 |
| Don’t know/Refused | 2 |
More Report Seeing News Stories About Negative Rather Than Positive Impacts On People
This month’s poll also examined views of the media environment surrounding the ACA, and finds the majority say coverage of the law is focused more on politics and controversies (56 percent) rather than on how the law might impact people (6 percent), shares that have held steady since last fall. When it comes to personal stories in the news, about half the public (47 percent) reports hearing at least one story in the last month about an individual or family who was impacted by the law, with about twice as many saying they saw more stories about people being harmed (27 percent) as saying they saw more stories about people being helped (13 percent).
1. Multiple responses were allowed, since people may have tried to get coverage from more than one source in the past 6 months
IRS Issues Regs on Wellness Program Incentives
Originally posted January 28, 2014 by Jerry Geisel on https://www.tirebusiness.com
Financial incentives that employers provide to employees participating in wellness programs generally could not be included in determining if an employee is exempt from a healthcare reform law requirement to enroll in a plan offering minimum essential coverage under newly proposed regulations.
Healthcare plan premium contribution discounts are an example of such an incentive.
The Internal Revenue Service (IRS) regulations proposed Jan. 23 and published in the Jan. 27 Federal Register involve the relationship between a premium affordability test established by the Patient Protection and Affordability Act and the financial incentives employers provide for employees to participate in wellness programs.
Under the healthcare reform law, employees are required to enroll in a plan offering minimum essential coverage. If they do not, they are liable for a financial penalty. In 2014, the penalty is $95 or 1 percent of income, whichever is greater.
Employees are exempt from the penalty, however, if the premium their employer charges for coverage is “unaffordable,” which the law defines as greater than 8 percent of household income, and they did not enroll in the plan.
Under the proposed regulations, financial incentives, such as premium discounts for wellness program participation, would be excluded in running the 8 percent affordability test.
For example, if an employer charged employees a monthly premium of $100 for single coverage if they participated in a wellness program and $120 if they did not, the $120 premium assessment would be used to determine if the employee had access to affordable coverage.
In the case of premium discounts offered in connection with tobacco-cessation programs, however, the lower premium offered to employees participating in these programs would be used in running the premium affordability test, the IRS said.
“This rule is consistent with other Affordable Care Act provisions, such as one allowing insurers to charge higher premiums based on tobacco use,” the IRS said.
“There is more of a consensus among regulators on the benefits of tobacco-cessation programs compared with other wellness programs,” said Amy Bergner, managing director of human resources solutions at PricewaterhouseCoopers L.L.P. in Washington, referring to the different treatment for tobacco-cessation programs than other wellness programs.
This report appeared in Crain’s Business Insurance magazine, a Chicago-based sister publication of Tire Business.
Committee approves full-time worker bill
Originally posted February 04, 2014 by Allison Bell on https://www.benefitspro.com
Members of the House Ways and Means Committee today voted 23-14 to pass H.R. 2575, the Save American Workers Act bill.
For purposes of applying the Patient Protection and Affordable Care Act employer “shared responsibility” coverage mandate, the bill would define a full-time worker as an employee who works 40 hours or more per week.
PPACA now defines a full-time employee as an employee who works 30 or more hours per week.
PPACA requires employers that have the equivalent of 50 or more full-time employees to provide a minimum level of health coverage if one or more workers apply for coverage from a PPACA health insurance exchange.
Part-time workers count when employers are calculating the number of full-time equivalents they have, but employers subject to the PPACA “play or pay” mandate penalties tied to the number of actual full-time workers they have. When employers are calculating the actual penalty payment amounts, they can exclude part-time workers.
Rep. Todd Young, R-Ind., the sponsor, said the 30-hour limit is encouraging many employers to limit hours to avoid penalties.
“An employee seeing their hours cut from 39 hours to 29 hours will lose an entire week’s paycheck over the course of a month,” Young said.
Democrats on the committee said the bill would gut the coverage mandate by letting employers classify workers who work as many as 39 hours per week as part-time workers.
Rep. Xavier Becerra, D-Calif., noted that Ways and Means leaders gave the bipartisan Joint Committee on Taxation only a week to analyze the bill.
Budget analysts have not yet estimated how the bill might affect federal spending, taxes or the federal budget deficit, Becerra said.
“We’re essentially voting in the blind,” Becerra said.
Public Exchanges Competitive with Employer-Sponsored Plan
Originally posted January 30, 2014 by Michael Giardina on https://eba.benefitnews.com
Premiums for health plans on new state exchanges under the Affordable Care Act are comparable to – and in some cases lower than – those being offered by employers with similar levels of coverage, according to a study released Thursday by PricewaterhouseCooper’s Health Research Institute.
HRI analyzed the average premium costs for a working population nationally in the public exchanges, and calculated that the median 2014 premium for a plan with coverage similar to that of the average employer-sponsored plan was $5,844. By comparison, the average employer premium for a single worker was $6,119, a difference of 4%. The premiums do not include subsidies.
The ACA allows for consumers to shop on its 51 new state exchanges within four plan levels; these include bronze, which pays 60% of healthcare costs; silver, which covers 70%; gold, which covers 80%; and platinum, which covers 90% of the bill.
Currently, employer-sponsored health plans cover about 85% of healthcare costs, with the remaining costs being charged to employees, the PwC study states.
Across the board, at every level, average exchange premiums are lower than this year’s average premiums for employer-sponsored coverage, according to the data.
“Employers may be surprised that exchange premiums in 2014 are comparable to employer premiums and in some states significantly lower than employer-based premiums,” says the report. “Employers contemplating future limits to their health care spending could face less resistance if employees are given a wider range of options at different price points via an exchange.”
The report cautions, however, that future fluctuations in public exchange rates are possible because health plans are competing under a new set of underwriting rules which provide some protections against financial risk. “As a result of this uncertainty, the first-year exchange rates vary significantly. It may take several years for this new market to reach equilibrium,” it says.
HRI’s analysis is based data of employer-sponsored premiums of 156 million people in 2013. The analysis compares the premiums paid by employers for single worker coverage to premiums paid for similar coverage in the state exchanges.
Will Your Plan Cover Spouses?
Originally posted by Keith R. McMurdy on https://www.mondaq.com
I happened upon two interesting articles today about spousal coverage under employer sponsored benefit plans. The first was an article about UPS eliminating spousal coverage and blaming PPACA. The second was a study conducted by the Employee Benefits research Institute that concluded that, on average, spouses cost more to insure than employees, but elimination of spousal coverage may not save money in the long run. Without opining on whether or not the elimination of spousal coverage makes financial sense, there is an issue here about how to eliminate spouses from eligibility under a health plan which bears some consideration.
Generally, PPACA defines affordable coverage based on the single "employee only" rate. Employers are required to offer dependent coverage, but that requirement excludes an obligation to offer coverage for a spouse. So, like UPS, an employer can eliminate coverage for souses, keep coverage for children and still satisfy PPACA's requirements. But UPS did not eliminate all spouses from eligibility, only those with coverage available from their own employer. So if the decision is made to eliminate spousal coverage that is not necessarily the end of the process.
Will the coverage be offered to spouses who don't have other options or will all spouses be excluded? What are the definitions of dependent in the plan? Do you offer family coverage and not "single plus children" or "single plus spouse'? It comes down to the ongoing requirement to make your PPACA compliance plan meet the ERISA requirements. Remember that eligibility is dictated by plan terms and if your plan does not define terms like "spouse," "dependent" and "family," you could be creating a problem with ERISA by having conflicting interpretations of those terms. Then, assuming your definitions are complete, you have to make sure the eligibility rules you outlined not only use those definitions but also clearly explain the eligibility requirements. In the case of UPS, what does it mean to have "other available coverage"?
If you decide to offer coverage to spouses who don't have other coverage, how will you verify eligibility? What are your rules for confirming eligibility? How are these rules communicated? There are no absolute answers to these questions and employers have a variety of options for plan administration if they decided to go this route. But they have to think these things through in advance. Never lose sight of the fact that when an employer provides health insurance to employees, it is a plan sponsor under ERISA. Make sure that if you decide to restrict spousal coverage because of PPACA, you follow ERISA rules in the process.
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