ACA employer mandate in action: Avoiding the missteps of 2014
Originally posted December 12, 2014, by Deborah Hyde on Employee Benefit News.
Soon we will be ushering in the New Year, which marks the first for the roll-out of the employer shared responsibility provisions under the Affordable Care Act. Though numerous guidelines were put forth to inform employers of how to satisfy the requirements under this employer mandate, 2014 also provided an opportunity to understand ways in which employers will fail (or at the very least, struggle) to meet these same obligations.
Cutting corners
Faced with the requirement to provide medical coverage to an expanded population of employees, some employers sought strategies that required the least amount of commitment while still meeting the demands of the law. “Skinny” or “minimum value” plans were just such a strategy, as these plans provided the absolute minimum amount of coverage to employees. The IRS and the Department of Labor, however, swiftly came down on these plans and stated that these plans do not meet the minimum standards contemplated by the ACA and therefore fail to satisfy the employer mandate.
Similarly, employers considered reimbursement arrangements as a way to provide funding for employees’ health expenses while avoiding the obligation to put in place a group plan. On several occasions, however, the government made clear that stand-alone reimbursement arrangements fail to comply with the ACA, regardless of whether done on a pre- or post-tax basis. Simply put, the IRS and DOL made clear in 2014 that cutting corners won’t “make the cut” at all.
Delaying the inevitable
Despite the overwhelming amount of rules that employers are facing, there are more on the horizon. Enforcement of certain provisions under the ACA has been delayed, and while this allows employers more time to prepare, employers should not postpone the creation of a competent strategy. For example, the ACA extends nondiscrimination rules to fully-insured plans. The federal government has stated that these nondiscrimination rules will not be enforced until more information thorough guidelines is provided, but employers would be wise to keep these rules in mind when designing health plans and avoid the need for a total re-design in the future.
In addition, Section 6055 and 6056 reporting to the IRS is not required until 2016. This requirement is over a year away, but employers need to be diligent in their preparations to efficiently and effectively meet this obligation. Putting in place a reliable HR reporting system now will avoid an unnecessary scramble later.
Denying the current Reality
The most detrimental strategy for compliance is for employers to deny the need to comply altogether. By now, it is clear that the employer mandate will be in effect in a matter of weeks. Employers should not hold out for significant changes to, or even a complete repeal of, the current law. A now-Republican majority in Congress brings with it much grandstanding and political rhetoric concerning a repeal of the ACA, but such discussion should be taken with a grain of salt. Any overhaul to the existing law won’t be seen for some time – if at all. And though the U.S. Supreme Court will soon be hearing arguments regarding the role of federally-established marketplace exchanges, the Court’s decision is not only many months away, but is unlikely to result in the unraveling of the employer mandate.
2015 will be the first year of enforcement for the employer shared responsibility rule, but in many instances, 2014 served as a prime guide for employers by highlighting not only the steps to take, but also the steps to avoid, in creating a successful compliance strategy.
Making and Keeping New Year’s Resolutions
Originally posted by Elizabeth Halkos on https://www.purchasingpower.com
It’s a new year, and for millions of Americans that means New Year’s resolutions are in order. Many of us will promise to exercise more and eat less to lose weight in 2014. Some of us will set income or sales goals, and some will set goals for what they want to buy this year. Some goals may be to spend more time with friends and family, or even to take long-needed vacations.
Every year it seems we’re excitedly setting our New Year’s resolutions, but by mid-February, those promises are out the window. Why can’t most of us stick to those resolutions? Psychiatrist Sarah Vinson, MD, says many people quit in the first few weeks because they don’t see results. The best method, she says, is to break the resolution down into manageable goals.
Dr. Vinson said people should do three things when making a resolution:
1. Set manageable goals. Instead of saying “I will lose 50 pounds this year,” make a promise to work out twice weekly and have the goal of losing five pounds in a month.
2. Have an accountability partner to help you stay on track. Find someone with similar goals and tackle them together.
3. Determine the factors that prevented success in the first place. Think about what got in the way of you accomplishing the goal in the past, and fix it. For instance, if you plan to work out every morning, but can’t get up, try going to bed an hour earlier the night before.
Here’s to a prosperous New Year for all of us – and achieving our resolutions!
A top focus for 2014: talent retention
Originally Posted January 6, 2014 by Wendy Keneipp and Kevin Trokey on https://eba.benefitnews.com
Many would predict the top trend of 2014 to be some new cost-shifting strategy, voluntary product, or the pushing of employees to the exchanges, something that has to do with the employer, writing a check or the avoidance of writing a check.
However, the trend that we see for 2014 is largely focused on the interaction between employers and employees. We see a shift away from the myopic focus on health care plans and core benefits to a larger view of embracing the pre-recession focus on employee attraction and retention.
Several factors are aligning to, once again, drive this focus. The result will be a perfect storm of turnover; making attraction and retention a top concern for businesses.
Jobs numbers are trending positively. Baby boomers are going to be retiring in significant numbers and many employees are more than anxious to find a new employer. Add to those realities the recession-forced lesson of how to do more with less and employers will have to face the reality that they need their high performers more than ever before and they need the high performers more than the high performers need them.
The most insightful of employers will identify their best talent, start engaging that talent in ways that will repair the tenuous ties that currently bind them to the organization and start putting the pieces in place to ensure their long-term retention. These same, insightful employers will also become more purposeful in identifying the key talent they need to attract. As with the retention of existing key talent, companies will have to develop and execute on a purposeful attraction strategy to ensure that the key talent chooses them.
The best talent will seek out employers with strong cultures and with whom they find a cultural fit, who will provide access to the right training, and who will continually provide opportunities for personal and professional growth.
For employers, this perfect storm isn’t only going to make attraction and retention of the best talent a competitive advantage; it is going to make it necessary for their very survival.
The game is about to get significantly more difficult for employers. Up until now, they were in control and, they found most of their answers tied to their checkbook. The answers of the not too distant future are much more complicated than a checkbook; they are about creating healthier organizations that are powerful magnets to the best talent in the market.
Now, that is a trend worth getting excited about.
For a gallery of what other experts see as the top health care trends in 2014, click here.
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.