Tips to help with negativity in the workplace
Originally posted on https://www.hr.com
Tips for solving negativity in the workplace
A lot of the time people feel that the workplace can be pretty stressful and they are not always so lucky to like every single one of their coworkers and not everyone has the most amazing boss. These are things you must be aware of in the workplace. You have to expect the negatives but to keep it from driving you insane, you have to at least try to keep a positive attitude and potentially come up with solutions to these negative attitudes.
1. Vent: Do not let your negative feelings about something build up, that could lead to a big explosive confrontation, which is obviously something you want to avoid. After work talk to a friend/spouse/ even a pet or anyone that will just sit and listen to your frustration. It gives you an opportunity to share all of your negative feelings, no filter involved and to possibly get some suggestions that might help with the issues you are dealing with. Writing it all down is also a good way to cope. It gives a chance to see them all in front of you, and can potentially give you your own insight on how to solve the negativity.
2. Come to terms: Keep in mind that you do not have the power to change everything that may cause negativity in the workplace. Focus on the things that are in your power and make the appropriate changes to make the negatives into positives. Coming to those terms will help you to further yourself instead of being stuck in a pit of negativity. Stay positive and keep moving forward and you will boost your potential to be successful.
3. Embrace what you have: Remember that things will not always go the way YOU want them to. Just know it isn’t just in your place of business, that’s life. It goes along with step number two where there is a point where you just have to learn to come to terms and accept that yes, there are some negatives you can change but for the ones you can’t, embrace them. It is the only thing you can do.
Stick with the positives and you will be much more likely to succeed. The negatives will be there, but if you learn to get past them or at least learn to work with them, then you will be in the right mind set to get what you worked for.
Time for Open Enrollment
Originally posted by Susan M. Heathfield October 15, 2013 on https://humanresources.about.com
Open enrollment season is upon us, and as employers, we have an obligation to educate our employees about their benefits. Not just a "nice to," to help employees make good choices for their families, this education also lets employees know what their employer is spending for their benefits above and beyond their base salary. This helps employees understand and appreciate their complete compensation package.
How confused are employees about their benefits?According to Forbes, "How confusing is it? Three-quarters of Americans admit to making mistakes during open enrollment, according to a 2011 Aflac WorkForces Report. Just 40% of employees feel well-informed about the benefits their companies offer, and less than half (46%) feel their HR departments are extremely or very knowledgeable about those benefits, Aflac found."
This is why I have written about how educating employees is critical for their understanding and so they make good choices about coverage for themselves and their family. But, benefits are definitely misunderstood. In one recent study, employees estimated that benefits added 30% to their employer's costs to employ them. In fact, the figure was 43%.
I recommend an annual evening benefits review event, so spouses can attend, that emphasizes the cost of the benefits and how employees can best take advantage of the benefits they have for themselves and their families. You want to promote employee appreciation of their benefits.
What better time to offer such an event as during open enrollment when employees are making changes? Employers are already making insurance representatives available to talk to employees - or they should be - as employers are not benefits experts and should trust professionals that they have vetted. Why not extend an educational opportunity?
To provide the basics about open enrollment and to emphasize some must do areas for employers, I email interviewed Erich Sternberg, president of AlwaysCare Benefits of Baton Rouge, Louisiana. Take a look at our interview for a concise overview of open enrollment. Additionally, Erich supplies a list of steps he recommends every employee take during open enrollment.
Additional information about open enrollment is available from About.com's Michael Bihari, MD.
Brace yourselves, winter is coming: Tips to survive an ICE I-9 compliance audit
Originally posted October 15, 2013 by Holly Jones on https://hr.blr.com
Despite months of legislative inactivity on a stalled federal immigration reform bill, federal immigration enforcement activities have not slowed. Just before Labor Day, 1,000 businesses across the U.S. were notified by U.S. Immigration and Customs Enforcement (ICE) that they would need to prepare documents for I-9 compliance and worksite enforcement audits. This is the largest round of these inspections, known as "silent raids," since 2009.
The newest round of audits hit restaurants, food processing, high-tech manufacturing, agriculture, and other industries, but no industry is insulated from the possibility of I-9 audit. In the last 4 years, the government has audited at least 10,000 employers and imposed more than $100 million in administrative and criminal fines, and this enforcement push is unlikely to slow.
So, what can you do to ensure that you are prepared for a visit from ICE?
What to expect during an ICE audit
The first step of an administrative inspection is receipt of a "Notice of Inspection" (NOI), which requires the employer to produce all Forms I-9 within 3 business days. In some cases, supporting documentation such as payroll records, employee lists, and licenses may be required.
After thorough examination of these documents, ICE will issue any of several notices, depending on its findings. The "Notice of Suspect Documents" and "Notice of Discrepancies" are issued when employees are either determined to be unauthorized to work or when a determination cannot be made. Employers will be given the opportunity to present additional documentation to establish employment eligibility—otherwise, employers will be advised to terminate the work relationship.
If errors in the Forms I-9 are found, a "Notice of Technical or Procedural Failures" will be issued, and employers will have 10 business days to correct these errors (otherwise they will become substantive violations.) When the review is complete, a Notice of Intent to Fine will be issued, upon which the employer may negotiate a settlement or request an administrative hearing within 30 days. If no further action is taken, a Final Order will be issued and the employer will be liable for all penalties assessed.
Fines for knowingly hiring or continuing to employ unauthorized workers can reach as much as $16,000 per violation, while substantive and uncorrected technical violations can be as much as $1,100 per violation. What’s more, certain "enhancements" can be added to fines based on business size, history of violation, and seriousness of the violation.
It’s not all about immigration
It is important to note that, while civil and criminal fines for employing undocumented workers can be quite extensive, the possibility of a hefty ICE fine is not limited to those who hire unauthorized labor. The fines for technical I-9 violations can also add up quickly. Further, though the new revision of Form I-9, as released in March, 2013, includes anextensive instruction handbook to walk employers through the documentation process, there is significant room for error on this seemingly innocuous form, whether in storage methods, documents accepted, or even proper correction of previous errors.
So, what can employers do to avoid I-9 violations and the subsequent fines? Find out now in part 2 of this article.
Holly K. Jones, J.D., is a Legal Editor for BLR’s human resources and employment law publications. She understands the existing and emerging needs and challenges of human resources professionals thanks to several years of experience managing, writing, and editing key legal and compliance publications for BLR. Prior to joining BLR, Ms. Jones worked for the Tennessee Legislature's Office of Legal Services.
She graduated magna cum laude and Phi Beta Kappa with a B.A. in English Rhetoric and Writing, Political Science, and Psychology from the University of Tennessee in Knoxville, Tennessee, where she also received a 2001 Citation for Extraordinary Academic Achievement. She received her law degree from Vanderbilt University Law School and is licensed to practice law in Tennessee.
Can Obamacare Beat Your Employer's Insurance?
Originally posted October 14, 2013 by Susan Ladika on https://finance.yahoo.com
If you already have health insurance through your job, you're probably wondering whether Obamacare will give you some new options. Will you be able to comparison-shop for a plan on the new online exchanges that might be better than your employer health insurance? The answer is a big, resounding "maybe."
Like almost everything else having to do with health care reform, there are plenty of nuances and caveats. Trying to decipher them and choose the best health insurance plan for your situation "makes homeowners insurance seem really simple," says Brian Haile, senior vice president for health policy at the tax services company Jackson Hewitt.
Exchanges will be open to all, but ...
The exchanges are online health insurance marketplaces set up under the Affordable Care Act. In 34 states, the marketplaces operate through the federal government's HealthCare.gov website, while 16 states and the District of Columbia are running their own exchanges.
Even if your employer already offers health insurance, there's nothing to prevent you from shopping on your state's exchange. However, if you decide to leave your work-based plan and purchase coverage on the exchange, you "may not qualify for some of the benefits that the uninsured have," notes E. Denise Smith, a professor of health care management at Gardner-Webb University in Boiling Springs, N.C.
Here's the big hiccup: Unless your employer's coverage for an individual is considered unaffordable under the law (that is, if your share of the premiums costs more than 9.5 percent of your household income) or inadequate (picking up less than 60 percent of the cost of covered benefits), you aren't eligible for a government subsidy to help pay for your insurance. Subsidies are one of the things that can make plans on the new state exchanges appealing.
Subsidies in the form of tax credits are available even if you earn up to 400 percent of the federal poverty level, currently about $46,000 for an individual and $94,000 for a family of four. The subsidies vary based on income and the size of your family.
Trade in your employer plan?
And that brings us back to the central question: If you have employer health insurance, should you check out the Obamacare exchanges anyway? There are differing opinions.
"It would generally not benefit an employee to leave their employer-sponsored plan," Smith concludes, adding that your employer would be under no obligation to help pay for an exchange plan.
Haile says you may not be able to do better than your work-based coverage. "Look at how robust your employer plan is" and the benefits it provides, such as whether it includes dental and vision care, which are not part of the essential health benefits that must be offered with plans sold in the Obamacare exchanges, he says.
Still, if your employer-sponsored health insurance seems to eat up a big chunk of your budget, you might want to explore your options on the state exchange, Haile says.
Few workers have 'unaffordable' plans
Again, one of the key criteria of whether you'd qualify for subsidized insurance through your state's exchange is if your share of the premium for an individual health plan where you work would amount to more than 9.5 percent of your household income. Whether you take more expensive family coverage doesn't matter; the benchmark is what an individual policy would cost.
The rule means that someone earning $40,000 a year and paying $3,775 for individual coverage would not be eligible for a subsidy, says Brian Poger, CEO of Benefitter, a software company that's helping employers navigate their way through health care reform. That same worker paying even more for family coverage would still not be eligible because, again, the premium for an individual is less than $3,800 (or 9.5 percent of $40,000).
The 9.5 percent-of-income threshold is one that few workers would meet, according to one recent study. The ADP Research Institute found that only 8.6 percent of employees are required to pay premium contributions that would meet the Affordable Care Act's definition of "unaffordable."
How will you know whether your premiums and income put you in that group and make you a good candidate for an exchange plan? Right now, it's a little unclear.
"The answer is sort of a mish-mash," Haile says. Many of Obamacare's employer requirements were delayed until 2015, though companies were still supposed to provide notices by Oct. 1 telling workers whether their current coverage would be considered affordable. But the U.S. Labor Department says there's no fine or penalty for failing to provide the notices.
Exchange coverage for family members
Under those same delayed "employer mandate" provisions, companies with at least 50 full-time workers will be required to offer health insurance to their workers and the workers' dependent children in 2015. But coverage for workers' spouses will not be mandatory, notes Christine Barber, senior policy analyst at Community Catalyst, a health care advocacy group.
"If your spouse isn't covered by your employer's insurance and doesn't have insurance through his or her own employer, your spouse could shop for insurance on the exchange and potentially qualify for a subsidy," Barber says.
Others who might find it valuable to shop on the exchanges are working singles under the age of 30 who don't have health issues and would be able to purchase a catastrophic plan, Haile says.
Catastrophic plans available on the state exchanges will have low monthly premiums but high deductibles. According to Haile, they're not eligible for subsidies.
All workers at a particular company often pay the same rate for their employer health insurance, regardless of age or medical history, he says. Opting for an Obamacare catastrophic plan "could be cheaper if you're the young kid on the block," especially if your co-workers are decades older, which could drive up everybody's insurance costs.
56% of employers offer CDHP, 44% may make it the only choice: Aon Hewitt
Originally posted October 09, 2013 by Jerry Geisel on businessinsurance.com
Once a rarity, consumer-driven health care plans have become a mainstream design among large employers.
Fifty-six percent of midsize to large employers responding to an Aon Hewitt survey released Wednesday said they now offer CDHPs. Such high-deductible plans are linked to health reimbursement arrangements or health savings accounts, which employees can use to pay for a portion of uncovered health care expenses.
The prevalence of CDHPs is expected to grow, as 30% of respondents said they are considering offering a CDHP in three next three to five years.
Because of their high-deductible feature, CDHPs are much less expensive than other plan designs, according to several studies. For example, a Kaiser Family Foundation survey released in August found that the average cost of family coverage through CDHPs was nearly $1,500 less per employee than coverage through a preferred provider organization.
“Employers are increasingly embracing plan designs that are cost-effective, promote consumer choice and accountability, and encourage employees to be more deliberate in how they spend their health care dollars,” Maureen Fay, an Aon Hewitt senior vice president in Norwalk, Conn., said in a statement.
Only health care option for some
In addition, many employers are considering making a CDHP their only health plan choice.
While just 10% of employers now offer CDHPs as their only plan, 44% said they are they are considering doing so in the next three to five years, according to the survey.
The findings are based on the responses of 837 employers, 57% of which had more than 2,500 employees.
Shutdown stalls remaining DOMA guidance
Originally posted October 10, 2013 by Andrea Davis on ebn.benefitnews.com
While much attention has been focused on the federal government shutdown and its effect on Affordable Care Act regulations, employers are still awaiting guidance on another key piece of legislation with benefits plan implications, the Defense of Marriage Act.
“The good news is the most critical guidance has already been issued,” says Todd Solomon, partner in the employee benefits practice of Will McDermott & Emery. “The IRS and DOL have already come out with their notices that explain the state of celebration rule for federal tax purposes so we know the way forward for plan administration.”
Plan sponsors, however, are still awaiting federal guidance on two key issues: retroactivity and the deadline for plan amendments.
“The retroactivity is a bigger issue because plans can and probably will be getting claims with or without the IRS guidance,” says Solomon. “The theory was that the IRS was going to address what employers had to do with retroactivity, and employers were going to hold their breath and hope nothing came with respect to retroactive claims until the IRS guidance came out.”
A delay in the guidance will only affect employers if they get claims for retroactive benefits, says Solomon, with the most likely scenario being a claim for a survivor annuity within a pension plan.
“If a same-sex employee died six months ago, for example, and the plan didn’t pay a survivor benefit to the same-sex spouse, the spouse can make a claim. The plan has to decide whether it’s going to pay that benefit and there’s no clear answer right now on whether the plan is required to,” he says.
“Plans without guidance are in a bit of a box — on the one hand, you could say ‘just pay,’ because that makes the issue go away but, of course, just paying costs money to the trust and if it’s not something that’s required under the terms of the plan, money should never leave a retirement plan trust.”
The IRS also needs to issue guidance about a deadline for when plans need to revise their definition of the term ‘spouse.’
“Absent guidance, it would need to be done by the end of the year,” says Solomon. “If they [federal agencies] want to extend that, they’d need to do that fairly quickly. … it’s not hard guidance to issue so I would guess the shutdown should not impact that too much as long things don’t go on too long.”
Following the Supreme Court’s decision striking DOMA down last June, the Internal Revenue Service and Department of Labor issued regulations adopting a state-of-marriage approach — anyone who is legally married in a state or country recognizing same-sex marriage is now treated exactly the same as an opposite-sex spouse for all qualified plan purposes, including the taxation of medical, dental and vision benefits.
PPACA hasn’t killed COBRA – yet
Originally posted by Gina Binole on https://www.benefitspro.com
With full implementation of the Affordable Care Act looming – delays in the employer mandate aside – many in the HR world have been wondering whether health care reform will render COBRA obsolete.
The short answer: yes – and no.
While the new law has no direct impact to the Consolidated Omnibus Budget Reconciliation Act, the indirect effects of the Patient Protection and Affordable Care Act could eventually render COBRA meaningless.
COBRA was designed to bridge coverage for employees who lose their job, or lose health coverage through their job. This was deemed necessary because individual policies can be expensive and quite often imposed pre-existing condition exclusions.
The PPACA, however, seeks to sever the link between employment and health care. It does this by prohibiting pre-existing condition exclusions and creating state exchanges where individual coverage is supposed to be available at affordable rates.
Beginning Jan. 1, individuals who lose employer-provided coverage will have the choice of either purchasing COBRA coverage, or purchasing coverage through the exchanges. While COBRA only allows people to elect the coverage in which they were enrolled on the date they lost their job, the exchanges are meant to offer a range of options and coverage levels.
The premium subsidies that will be available to individuals with household incomes up to 400 percent of the federal poverty level also are expected to make purchasing coverage through an exchange more attractive than paying for insurance through COBRA.
But COBRA isn’t going to disappear overnight, if ever.
“Heath care reform is being marketed as a mechanism for enhancing choice in health care options. (Once Obamacare goes into full effect), the option to remain on an employer’s plan is likely to remain a choice, in addition to plans available through the exchanges,” said Iris Tilley, an Oregon-based benefits attorney. “In addition, while COBRA coverage is typically expensive, for some individuals it may remain less expensive than exchange coverage because the cost of exchange coverage correlates directly to an individual’s age, while employer coverage (and in turn COBRA coverage) reflects a broader range of ages.”
Tilley said individuals who suffer a loss of coverage are likely to weigh the plans available through the exchanges against their employer’s plan. For some, COBRA will make sense.
Moreover, employers with a qualified health plan still will be required to provide the opportunity for a person to elect COBRA coverage. Its rules will remain in force. Tilley also noted that the PPACA does not cover dental, vision, Medical Flexible Spending Accounts, Health Reimbursement Accounts or Employee Assistance Plans, which are subject to COBRA regulations.
“There is certainly a perception that the health care exchanges eliminate the need for COBRA since with the health exchanges, individuals will have access to insurance in ways they don’t today. But employers subject to COBRA today will remain subject to COBRA until such time as Congress decided to potentially do away with COBRA,” Mary Jo Davis, Ceridian’s vice president of product management said during a recent podcast.
Davis sought to clear up what she described as a few myths surrounding COBRA and PPACA. First, she said individuals assume health exchanges will be consistent across every state. But the reality is that states will have latitude to design their own coverage. Secondly, she said people are counting on the exchange premiums to be much cheaper than employer-sponsored health care coverage.
“We don’t know that. It could be more expensive,” she said.
Finally, she said people also assume that health care exchanges will be an option for all employees and consumers in 2014. But that is true only for small employers. Depending on the state, that means those with 100 employees or fewer or 50 and fewer.
Individuals also might have met their out-of-pocket deductible costs with their employer, and it would be costly for them to switch to an exchange. Another reason for COBRA to stay relevant might be that people want to stick with existing health care providers.
Other points to consider:
- One of the qualified events that trigger the need for a COBRA notice is a dependent losing eligibility under the health plan. Now that the age for dependents to lose coverage has been extended to age 26 under PPACA, it is possible that an adult dependent can continue for an additional 36 months under COBRA or until age 29 on the employer’s health plan.
- Under PPACA, waiting periods for coverage will be no more than 90 days. This means former employees may not need COBRA coverage for as long as in the past. However, depending on the viability and quality of health plans offered through the state exchanges, it might make more sense for a former employee to elect COBRA coverage if it looks like they will have more than a three-month gap in coverage during the year that could result in a penalty under the individual mandate.
State exchanges not viable choice for active employees
Originally posted October 03, 2013 by Andrea Davis on https://ebn.benefitnews.com
The state and federally facilitated health care exchanges are not a realistic option for active employees, according to one expert. Bryce Williams, managing director of exchange solutions for Towers Watson maintains that while the public exchanges offer a good solution for early retirees and COBRA-eligible participants, “it’s not yet a viable alternative to move [active employees] to state or public exchanges.”
Employers showed little confidence in public exchanges, according to a recent survey from Towers Watson that was released prior to the public exchange launch earlier this week. Eighty-eight percent of employers said they were not confident that the public health insurance exchanges would provide a viable alternative to employer-sponsored coverage for active full-time employees in 2014.
“They were prescient in terms of what would happen given the complexity of the launch,” says Williams.
Employers expressed skepticism even heading into 2015, with 71% saying they were not confident the public exchanges would provide a viable alternative to employer-sponsored coverage for active full-time employees.
“We believe later this fall public exchanges will right themselves and be in good shape, but certainly they’ve gotten off to a bumpy start,” says Williams, adding he continues to see employers not making any big changes this year. “They want to see results.”
Still, “public exchanges continue to be a great alternative to early retiree coverage, to any of the mini-meds they’re providing to seasonal and part-time workers – this [public exchange] is a vastly better ecosystem and [offers] better coverage,” he says.
Towers Watson runs three private exchanges: OneExchange Retiree, a Medicare exchange for retirees; OneExchange Active, a self-insured exchange for active employees; and OneExchange Access, a concierge service that connects part-time employees, early retirees, dependents and others who aren’t eligible for employer-sponsored coverage, to the state exchanges.
Regs Limit Use of HRAs for Exchange-Purchased Coverage
Original content from https://www.shrm.org
On Sept 13, 2013, federal agencies issued further guidance via IRS Notice 2013-54 and DOL Technical Release 2013-03, reiterating that health reimbursement arrangements (HRAs), premium reimbursement arrangements (PRAs) and other employer payment plans cannot be used to pay for individual policy premiums on a pre-tax basis, such as when indivdiual coverage is purchased by employees through a public health insurance exchange or on the individual market.
For a true “retiree-only plan” under the tax code and ERISA, employers can still sponsor an HRA or PRA and reimburse individual policy premiums on a pre-tax basis.
Also, employers can provide their active employees with a defined dollar amount, on a pre-tax basis, to purchase group coverage through a private exchange, as explained in the SHRM Online articles "On Private Health Exchange, Choice Drives Satisfaction" and "Time for Defined Contribution Health Benefits?"
A set of frequently asked questions and answers (FAQs) issued by federal regulators on Jan. 24, 2013, will limit the use of employer-provided health reimbursement arrangements (HRAs) to fund employee purchases of individual (nongroup) coverage on government-run health care exchanges, scheduled to launch in 2014.
HRAs are employer-funded notional accounts that are often, but not always, linked to high-deductible group health plans. They typically consist of an employers' promise to reimburse an employee's out-of-pocket medical expenses through a dollar amount contributed annually to the employee's HRA, with unused amounts carried over to help reimburse medical expenses in future years. When the employment relationship ends, the HRA reverts back to the employer since, unlike a health savings account (HSA), an HRA is not employee owned and not portable. (To learn about HRAs and how they operate, see the SHRM Online article "Consumer-Driven Decision: Weighing HSAs vs. HRAs.")
The new guidance, jointly issued by the U.S. Departments of Health and Human Services, Labor and Treasury, distinguished between HRAs that are "integrated" with other coverage as part of a group health plan and HRAs that are not integrated ("stand-alone" HRAs).
The FAQs clarify that an HRA that is not integrated with group health plan coverage but provided as a stand-alone benefit is subject to the Patient Protection and Affordable Care Act (PPACA) prohibition on limiting the amount of an employee's annual health care spending subject to insurance coverage. Beginning in 2014, for employers with more than one employee, restricted annual dollar limits are not permitted.
Because of the prohibition on annual dollar limits, an employer-sponsored, stand-alone HRA cannot be used to fund the purchase of individual market coverage, or an employer plan that provides coverage through individually purchased policies, including those that might be purchased on a government-run exchange.
Public Exchanges and HRAs Don't Mix
"Some employers had hoped that with the advent of the [government-run] exchanges in 2014, they would be able to offer their employees a fixed-dollar contribution through an HRA, which would permit the employee to take advantage of the tax subsidies currently available through HRA coverage but get the employer out of the health insurance business," explained Timothy Jost, a professor at the Washington and Lee University School of Law in Virginia, in a commentary about the new FAQs posted on the journal Health Affairs' blog.
In addition, "some consumer advocates had hoped that employees would be able to couple funds offered by employers through HRAs with advance premium tax credits available through the exchanges to make individual health policies truly affordable," Jost wrote.
However, he noted, the FAQs clarify that this approach will not be permitted. "The agencies intend to issue further guidance on the issue but have concluded that stand-alone HRAs used to purchase individual coverage will not be considered to be integrated coverage that complies with the annual dollar limit requirement" under the PPACA.
Moreover, if employees are offered an HRA and group coverage but decline the latter, they still may not use the HRA to purchase individual policies, Jost said.
Not a Blanket Prohibition?
However, according to Peter Antoine, a compliance communications specialist at Middleton, Wisc.-based Employee Benefits Corporation, the fact that under the FAQ guidance a stand-alone HRA is subject to the no-limit provision does not mean that it can’t be used to reimburse the cost of an individual plan, even one purchased on an exchange. Rather, “the non-integrated HRA would have to have an unlimited benefit available, unless certain exemptions apply that weren’t spelled out in the FAQs,” he told SHRM Online.
Moreover, Antoine explained that “we believe that non-integrated HRAs that operate as health flexible spending accounts (FSAs), as described in IRS Notice 2002-45 and Internal Revenue Code Section 106, are not subject to the no-limit provision. Consequently, a stand-alone HRA that satisfies the health FSA definition could have a limited benefit, reimburse individual plan premiums and comply with health care reform.”
However, an analysis by law firm McKenna Long & Aldridge LLP concludes:
"Note that some experts have challenged whether the annual dollar limit prohibition even applies to an HRA used to fund individual premiums, since the law only prohibits annual dollar limits on EHBs [essential health benefits]. ... Other experts argue that the HRA premium reimbursement arrangements for individual market coverage should be exempt from the annual dollar limit prohibition as health flexible spending accounts meeting the definition of Code Section 106(c)(2) (i.e. the maximum amount available for reimbursement under the plan may not exceed 500% of the value of the coverage). However, the Departments apparently take a different view given the clear statement in the FAQ that HRAs reimbursing employees for individual market insurance premiums will violate the annual dollar limit prohibition."
Private Exchanges: Employer's Subsidy and Employee's Contributions Remain Pre-Tax
In Aon Hewitt's private Corporate Health Exchange, which launched in fall 2012 for plan year 2013, "the contracts between insurers and employers are traditional group contracts" covered under the Employee Retirement Income Security Act (ERISA), Ken Sperling, Aon Hewitt national health exchange strategy leader, explained to SHRM Online. "The employee contributions are still covered under Section 125, so the employer subsidy is deductible and the employee contributions are pre-tax, just like today. Nothing changes from a tax perspective."
Private exchanges are not eligible for government-subsidized coverage, and thus differ from the new public exchanges (to learn more, see the SHRM Online article "On Private Heatlh Exchange, Choice Drives Satisfaction.")
Small-group employers skip SHOP, move to individual exchanges
Originally posted October 03, 2013 by Elizabeth Galentine, additional reporting by Brian Kalish on https://ebn.benefitnews.com
While President Barack Obama has frequently told Americans, “if you like your plan, you can keep it,” that is not ringing true for some small groups across the country. A number of small-group employers are already planning to send their employees to the Affordable Care Act’s exchanges. It’s an outcome predicted by many in the industry, but one surprise to some is the choice of exchange.
Rather than utilize the Small Business Health Options Program (SHOP exchanges) that the ACA has set up for employer groups of 50 or fewer full-time employees, some brokers are finding their clients are more interested in sending their employees to the individual exchanges instead.
Kelly Fristoe, owner of Financial Partners in Wichita Falls, Texas, is wary of the fact that his state’s SHOP exchange only has one insurance company participating at this point. Rather than deal with potential consequences of that, he is steering his small-group clients interested in the exchange market toward the individual plans. “We’ve had some small-group customers — not a lot — telling us that they’re going to dump their plan and send their employees to the individual market,” says Fristoe, president of the Texas Association of Health Underwriters.
“So we’ve made some arrangements with those employers to be able to be the agent that sits with those employees. They’re going to let us have time with their employees to educate them on purchasing insurance through the marketplace and qualifying for a subsidy.”
Because he wants to keep those individuals as clients no matter what, Fristoe was particularly “frustrated” Tuesday when technical glitches kept him from checking out the plans on healthcare.gov. “I’m needing to salvage that business and I need to know what those individual rates are so that I can go back to those people and show them how to qualify for a subsidy, if they qualify, and get them enrolled,” he says. “… We’re going to be the agent that’s going to try to salvage that business instead of it going to one of our competitors.”
David Smith, vice president at Ebenconcepts in Morrisville, N.C., agrees that accessing the information on exchange rates is of the utmost importance right now. “You have to recognize that we’re going to have some percentage of very small groups that have already decided they’re not going to offer a group health insurance plan next year,” he says. “So if you have four or five employees a lot of them have made a business decision to not do it, and they just want to get a feel for what it’s going to cost their employees when they make that decision.”
As an administrator for the testing process for agents to be certified with Covered California, Neil Crosby, director of sales at Warner Pacific Insurance Services in Westlake Village, Calif., is surprised that the majority of people attending his classes so far have been serving the individual market. “I’m shocked at how many … are coming to primarily do it individually. There’s so many of them,” he says. “Some of the ones that do individual they also do small group, of course, but a lot of them are representing the individual. I’d say maybe 65% of people in the room.”
A lot of agency owners “want to get a feel for” for the individual market exchanges, says Ebenconcepts’ Smith, because it is very appealing for micro groups, those with nine, 10 employees, to “go to the marketplace for subsidized coverage and maybe pay less for that than they would for their group insurance today.” An employer who is looking at saving $3,500 to $5,000 in premiums by making the switch, “they’re not walking that border, they’re running to that border,” says Smith.
A common sentiment among several brokerages contacted by EBA, EBN’ssister publication, in the days following the opening of the exchanges was that they have yet to take a look at the individual or SHOP exchanges. While online enrollment in SHOP exchanges run by the federal government is delayed until Nov. 1, applicants still have the option of submitting over the phone or through the mail.
Some are using the delay as a reason not to take a look at SHOP exchanges yet, but Michael Wolff, chief operations and financial officer at Dickerson Employee Benefits in Los Angeles, cautions against such an approach. “I don’t think that’s a good idea. … I think you want to have all the tools in your tool box. In California at least they have been successful in negotiating with the carriers to come to the table and give their best offers … there’s a chance they are giving a very good rate,” he says.
Wolff references the SHOP exchange tax credit for small businesses with low-wage earners that is available for 2014. “Of course we don’t know how long that will be upheld, but it’s a real tax advantage for next year at least,” he says. “… Why not have it in your portfolio to show? Everybody’s talking about it. You don’t want to say, ‘Well, I don’t know about it, but it’s probably bad because [it’s] the government [offering it].’ Well, maybe some clients will believe you, but it’s a better story if you say, ‘Yeah, I have that, and this is what they offer.’ Why would you not?
“Our model is … to bring a representation of the market to the agent and to the client,” adds Wolff, whose agency is one of only four in the state of California authorized to be a wholesaler for Covered California’s SHOP exchange, which did open on time Oct. 1. “This is a market phenomenon right now that we want to offer and explain. That is our role. We are ready.”
Meanwhile, like millions of others in the last few days, Don Garlitz, executive director of exchange technology provider bswift Exchange Solutions, logged on to a couple of SHOP exchanges to do a little window shopping. However, he could not get past the registration screen. If people are going to purchase such plans, the window shopping experience needs to improve, he says.
“People will look until they [get] what they want. [On Tuesday] I wasn’t able to find any kind of window shopping experience, which will be important for consumers,” he said. “They will not want to go through a 35-45 minute application process just to look at a rate. The call center I spoke with was not sure if there would be window shopping available. That will be an important thing for the federal government to consider.”