Help your employees find time for fitness
If you asked, the majority of your employees would say they would like to get more exercise. But many would add it's hard to find the time.
Fitting in fitness benefits not only your employees, but you, the employer. Why?
Ann Wyatt, with HealthFitness, lays out the facts in her blog, "8 ways to help your employees find time for fitness."
- Physical inactivity and its adverse health effects are comparable to that of smoking and obesity.
- Sedentary jobs have increased 83 percent since 1950.
- More than 80 percent of American adults do not meet the recommended amounts of physical activity.
- Not only does being physically active boost the health of your employees, but it’s good for your business as well. Research shows that workers who exercise during the day reported a 15 percent boost in performance, a happier mood and increased ability to meet deadlines.
So, how can you help you employees find time for fitness. Wyatt offers these suggestions:
Leadership support. At one of our technology client sites, a focus group shared that a key barrier to participation was an underlying perception that if they were seen working out, they will be seen as slackers and not working. We helped change that perception by recruiting C-suite leadership to work out while on the clock, opening the door for employees to see that fitness was a priority all of the way up the ladder.
Offer a variety of fitness options. To appeal to the range of ages and diversity of employees at a leading biotech company, HealthFitness offers a variety of 15 group exercise classes each week—from strength training to Pilates to HIIT (high-intensity interval training) classes.
Extend hours of corporate fitness center. At one of our manufacturing client sites, the staff has extended the hours of the fitness center early and late to accommodate different work shifts. At another site, employees at a high-tech company work a variety of hours throughout the day. To meet the needs of this diverse group of employees, the fitness center is open 24/7 and is staffed from 7 a.m. to 6 p.m.
Step up to better health. An eight-week walking program at a leading car manufacturing company encourages participants to use pedometers to track steps taken on the production line, in the lunchroom, during breaks, off campus and at home.
Take a hike at work. Walking trails give employees the opportunity to exercise at work. At one of our client sites, the trails are clearly marked and measured so employees can keep up with how far they walk. Employees can walk a shorter route during breaks and take a longer walk during lunch.
Encourage at-desk workouts. To inspire employees at a biotech client site to sit less and move more, HealthFitness staff host 15-minute energy breaks in conference rooms where employees learn workouts do to at their desks.
Provide a virtual fitness trainer. To reach employees who are not comfortable going to the gym—or exercising with their co-workers—HealthFitness staff at one of our high-tech client sites create and post short videos with exercise tips on the company’s intranet site.
Despite delay, employers adopt ‘Cadillac Tax’ strategies
Original post by John Scorza, shrm.org
Hope for the best, but prepare for the worst, may be the best advice for employers when it comes to the uncertain future of the “Cadillac tax.”
The Affordable Care Act’s (ACA’s) 40 percent excise tax is now slated to be levied on costly employer-sponsored health insurance coverage beginning in 2020. The plans subject to the tax are those with benefits valued above $10,200 for single coverage and $27,500 for family (other than self-only) coverage, indexed annually for inflation.
The levy—popularly known as the “Cadillac tax”—has employers on edge, with many acting to reduce their risk of exposure while keeping an eye on repeal efforts. A brief repreive was provided by the Consolidated Appropriations of 2016, enacted in December 2015.
As regards the Cadillac tax, the omnibus measure:
- Delayed the effective date by two years, from 2018 to 2020.
- Made the excise tax deductible by businesses.
“The two-year delay gives Congress more time to devise a longer-term solution to the excise tax, including potentially amendment or repeal,” commented Kathryn Bakich, J.D., national health care compliance practice leader at Segal Consulting in Washington, D.C.
Even with this delay, it's wise for employers not to bank on its ultimate repeal, as noted below, and to use any expanded breathing room to consider steps to avoid the tax's grasp—or just to keep health benefit spending under control.
Restraining Spending & Raising Revenue
The excise tax was designed to accomplish two primary goals:
- Lower overall spending on health care by making employer-sponsored health plans less comprehensive, and thereby fostering more cost-conscious spending decisions by employees.
- Generate federal revenue to pay for other provisions of the ACA, including subsidies provided through federal and state health exchanges for low-to-moderate-income employees who lack affordable coverage through their employer.
The Cadillac tax is estimated to raise nearly $90 billion through 2025. Twenty-five percent of those funds will come directly from employers. The other 75 percent will be generated by taxes on higher employee wages that presumably would result from lower health care costs—although there’s no guarantee that companies will raise wages as health costs go down. “There’s evidence both for and against” that assumption, noted Paul Fronstin, director of the Employee Benefit Research Institute’s (EBRI’s) health research and education program, at a Dec. 10 EBRI policy forum in Washington, D.C.
Opposition to the tax is strong. The tax eventually will affect nearly all 175 million Americans with employer-sponsored health plans, said Katy Spangler, senior vice president of health policy at the American Benefits Council. That’s because the thresholds that trigger the tax are indexed to the consumer price index (CPI), but medical inflation rises much faster than the CPI. As a result, more and more plans will become subject to the tax, Spangler said. Additionally, the tax is forcing employers to shift costs to employees in the form of higher deductibles and co-pays, she said.
That’s the main tactic employers are using to prepare for the tax, according to Richard Stover, principal with Buck Consultants. He identified five possible employer strategies:
- Shift costs. Many companies are doing this, at least as a component of their overall strategy, by imposing higher deductibles, reducing medical benefits, implementing high-deductible health plans combined with health savings accounts (HSAs) and offering voluntary benefits that help employees cover medical expenses. “Unfortunately, the primary way [to achieve significant cost-savings], the easiest way to do it, is to shift costs to employees,” Stover said.
- Absorb the cost. This is not a viable long-term strategy because of the cost impact and the administrative burden that would result, Stover said. “No one wants to absorb the cost,” he remarked.
- Improve plan efficiency. Employers can consider three broad approaches here, according to Stover. First, manage utilization through tactics such as onsite clinics, high-performance networks, and telehealth and transparency tools. Second, manage unit costs by using medical and prescription discounts and finding more effective vendors, for instance. Third, promote health through wellness and disease-management programs.
- Eliminate ancillary health benefits. Options here include reducing or eliminating employer HSA contributions and limiting or eliminating employee pretax HSA contributions (see the SHRM Online article HSA Strategies to Avoid the Cadillac Tax).
- End health plan sponsorship. Just as most employers are not willing to absorb the costs of the tax, most are not considering dropping their health plans, either. Organizations that terminate their plans will likely face significant recruiting and retention problems unless they provide employees with additional wages to purchase coverage on a public exchange. But even that is no panacea. “There’s really no tax-effective way to do that,” Stover said.
Regarding these five strategies, Stover stressed that “No one of these levers is enough. Employers are looking at combinations of these approaches that they could use to better manage the costs of their programs.”
Repeal Sought
Spangler at the American Benefits Council is optimistic that Congress will ultimately repeal the excise tax. The council is a member of the Alliance to Fight the 40, a coalition of nearly 90 organizations opposed to the levy.
Others have noted, however, that revenues lost due to repeal would need to be replaced with other income sources.
In the immediate future, President Barack Obama has pledged to veto any repeal measure. In any event, benefit advisors are telling employers not to leave themselves vulnerable to triggering the tax, if and when it should take effect.
John Scorza is associate editor of HR Magazine.
Don't forget to update benefit plan documents
Original post thinkhr.com
This year came with notable compliance changes that may require updating group health plan materials extending into the new year. Employers should review these requirements and make the necessary changes to materials offered to participants at plan renewal.
The Affordable Care Act’s (ACA) employer shared responsibility provision (§ 4980H), also referred to as “play or pay,” took effect January 1, 2015. Under the employer mandate, large employers may be assessed a penalty for failure to offer health coverage to full-time employees if at least one employee receives a government subsidy to buy individual coverage through an Exchange (Marketplace). However, some employers were able to take advantage of one or more transition relief provisions to avoid potential penalties for part or all of 2015 (and part of 2016, in some cases). This relief expires in 2016, along with transition relief impacting calculations of the possible assessable payment.
Applicable large employers (ALEs) must ensure their group health plans are designed to meet minimum value coverage and are deemed affordable to limit assessment of penalty. For plan years after 2015, the required contribution percentage under the affordability safe harbor is 9.5 percent, based on employee-only coverage. ALEs who have variable hour employees should establish and document their designated measurement periods for determination of “full-time” employees.
The employer shared responsibility provision also establishes employer reporting requirements. For calendar year 2015, the first reports are due February 1, 2016 and are required annually thereafter on January 31st. These reporting requirements include:
- Under I.R.C. § 6056, large employers must report information about health coverage offered to full-time employees.
- Under I.R.C. § 6055, large employers with self-funded plans must report information about the coverage provided to each individual.
ALEs should review their Summary Plan Descriptions (SPDs) to ensure measurement periods used in the determination of the employee counts are documented. To comply with the Employee Retirement Income Security Act (ERISA), the health plan’s SPD must describe the plan’s eligibility requirements. The SPD’s description of the measurement method should clearly define the measurement periods and plan eligibility requirements so that it is understandable to the average participant.
Employers should review their ability to maintain grandfathered status for 2016. While grandfathered plans can continue, ALEs will need to determine if offering these plans conforms to the play or pay rules to limit assessable payment. If the plan will lose its status, the plan should include all of the additional patient rights and benefits required by the ACA for nongrandfathered plans (e.g. coverage of preventive care without cost‐sharing requirements).
Several indexed inflation increases have been announced, which may require updates to Summary of Benefits and Coverage (SBC) documents and other participant plan materials, such as contributions to health savings accounts (HSAs), out-of-pocket spending under high deductible health plans (HDHPs), and essential health benefits (EHBs).
The annual cost-sharing and out-of-pocket maximums increase for plan years beginning on or after January 1, 2016. A health plan’s out‐of‐pocket maximum for EHBs may not exceed $6,850 for self‐only coverage, and $13,700 for family coverage.
The out‐of‐pocket maximum, however, continues to apply to all nongrandfathered group health plans, including self‐insured health plans and insured plans.
The minimum annual deductible and out-of-pocket expenses for HDHPs renewing on or after January 1, 2016 have increased in 2016:
- The minimum annual deductibles under an HDHP must be at least $1,300 for self-only coverage (no change from 2015) and $2,600 for family coverage (no change from 2015).
- The maximum out-of-pocket expense limit for self-only HDHP coverage for 2016 is $6,550, which is up from $6,450 in 2015. For family HDHP coverage, the maximum out-of-pocket expense limit for 2016 is $13,100, which is up from $12,900 in 2015.
The annual dollar limit on the combination of employer and employee contributions to HSAs remains at $3,350 for an individual with self-only coverage under a HDHP; however, this limit increases to $6,750 for an individual with family coverage under an HDHP (an increase of $100 dollars from 2015).
Note: The HDHP maximums for HSA-qualified HDHPs are lower than the ACA out-of-pocket maximums. Employers offering HSA-qualified plans will need to ensure they satisfy these lower HDHP out-of-pocket maximums.
The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSAs) is $2,550 (no change from 2015).
Under the small business health care tax credit, the employer must employ fewer than 25 full-time equivalent employees (FTEs) whose average annual wages are less than $50,800 (indexed for 2015). The tax credit phases out for eligible small employers when the number of its FTEs exceeds 10 or when the average annual FTE wages exceeds $25,900 for tax year 2016 (up from $25,800 in 2015). Only qualified health plan coverage purchased through a Small Business Health Options Program (SHOP) marketplace is available for the tax credit, and it is available only for a two-consecutive year period.
Employers managing compliance with benefits-related mandates under the ACA and other benefits rules for coverage, documentation, and reporting requirements should be aware of applicable penalties that compliance failures may trigger. Potential fines and penalties vary depending upon the provision under the Internal Revenue Code, ERISA, or the Department of Health and Human Services and Department of Labor rules. While these agencies are working towards helping plan sponsors comply with the new rules, compliance failures can be costly. Take the best approach and make it a new year’s resolution to be aware of the compliance requirements and develop plans for meeting them!
Congress vote delays Cadillac tax by 2 years
Original post by Shelby Livingston, businessinsurance.com
The $1.1 trillion budget deal that Congress approved Friday would delay the notoriously unpopular Cadillac tax for two years and put a repeal in reach of the congressional leaders and business groups who oppose it.
But benefits experts say delaying the excise tax until 2020 is unlikely to ease the aggressive strategies companies have put in place to avoid triggering it.
The House voted 316-113 Friday to approve the omnibus spending deal that congressional leaders unveiled earlier in the week. The Senate followed quickly with a 65-33 vote to approve the package and send it to President Barack Obama, who indicated he would not veto the measure.
Opponents of the 40% excise tax, which would be imposed on the portion of group health plan premiums that exceed $10,200 for single coverage and $27,500 for family coverage under the Patient Protection and Affordable Care Act, say the two-year delay is a major win for employers.
“The ACA relief is welcome and appreciated,” the National Retail Federation said in a statement.
The delay is “the first step toward full repeal,” the Alliance to Fight the 40, a lobbying group opposed to the tax, said in a statement.
For Victoria Nolan, risk and benefits manager for Hillsboro, Oregon-based Clean Water Services, a water resources management utility, the delay would “provide more breathing room to look at what additional things can be done to keep under the Cadillac tax in the future.”
Others say postponing the excise tax signals a repeal is on the way.
“We see the two-year delay as a down payment on a full repeal,” said Katy Spangler, senior vice president of health policy at the Washington-based American Benefits Council, which has backed repealing the tax on behalf of the hundreds of large employers it represents.
“If we keep the pressure on Congress, the delay may help us move toward” a repeal, American Benefits Council President James Klein said.
Geoffrey Manville, principal of government relations at Mercer L.L.C. in Washington, said the congressional vote “really increases the odds that this tax will not go into effect,” but he added the final decision would come down to “the next Congress and the next president.”
The odds for a repeal are “better than even,” he said.
While delaying the tax gives employers more time to find ways to reduce their exposure, it's unlikely to halt much of the aggressive cost-management strategies employers have already set in motion to avoid triggering the tax, sources said.
“The majority of employers will continue down that road like they have been before the excise tax — whether or not it's delayed or repealed,” said Steve Wojcik, vice president of public policy with Washington-based National Business Group on Health, of many employers' shift to high-deductible health plans. “As long as overall spending for health care continues to climb faster than general inflation, there's going to be this pressure.”
Seventy-two percent of employers expect at least one of their benefit plans to hit the excise tax in 2020 if they don't control costs, according to an NBGH survey in August. Mr. Wojcik said that number could potentially be reduced with the delay.
Delaying the tax also does nothing to fix ongoing cost increases squeezing employers' benefits plans, prompting them to shift more costs to workers, sources said.
Employers saw group health plan costs rise 3.8% in 2015 to an average $11,635 per employee, according to Mercer.
Supporters of the excise tax see it as a way to slow U.S. heath care spending, which the U.S. Centers for Medicare and Medicaid Services said topped $3 trillion in 2014.
According to the bipartisan nonprofit Committee for a Responsible Federal Budget, delaying the Cadillac tax until 2020 would cost the government $16 billion. Repealing it would cost $91.1 billion over the next 10 years, the committee said last week.
In addition to the two-year delay Congress passed Friday, the omnibus budget bill also calls for a study by the U.S. comptroller general and the National Association of Insurance Commissioners of whether the ACA uses “suitable” benchmarks to determine if the tax should be adjusted to reflect age and gender factors in setting the excise tax thresholds.
Still, the delay means Clean Water Services has more time before it might need to reduce the amount workers are allowed to contribute to their flexible spending accounts, a strategy the company is considering because pretax contributions to FSAs — as well as health savings accounts and health reimbursement arrangements — would be included in the excise tax calculation, Ms. Nolan said.
But a full repeal of the Cadillac tax would eliminate the company's need to reduce the FSA limit on contributions altogether, she said.
Tips to succeed at your New Year Resolution
Wellness, which covers more than fitness, is at the top of many resolution lists year after year. Wellness can also mean eating healthier, quitting smoking or reducing stress.
People with all the desire in the world to succeed at their resolution fall short within the first week.
Ipswich life coach Ronita Neal shared some advice with The Queensland Times on ways to keep your resolutions in 2016.
Think through your resolution
"The problem is seven seconds from midnight and maybe with a few drinks under your belt is not the best time to make a resolution about change," Ronita said.
Don't make too many resolutions
"It is not useful to make a whole heap of impulsive resolutions that it will be impossible to keep and so you start the year as a failure."
Make 'smart' resolutions
Ronita describes smart resolutions as being specific, measurable, achievable, relevant and time bound.
"Change is hard and we need to make sure we have carefully considered what we want in the context of our life goals," Ronita explained. "It is a good idea to think about all the different areas of your life and where you would most benefit from making changes."
Remember change takes time
"In order to keep your resolutions and achieve your goals, you will need to keep up your motivation over a long period of time, but most of us give up too quickly," she said.
Sticking to change could take up to three months of constantly making the choice.
"When you are trying to break a habit your brain usually has a very short-term focus and will throw a "tantrum" to get what it wants (the old way) now. Just remind yourself why you are making the change (long-term goal) and don't go for the short-term pleasure."
Resolve to change what you can control
Setting a goal to lose a certain amount of weight in a certain number of weeks may seem like a good resolution. But while it's specific and measurable, the outcome isn't entirely under your control.
According to Ronita, a resolution we can control is how much effort we put in.
"Have you been for your walk, did you do your weights session at the gym, did you leave the yummy packet of chocolate biscuits in the shop, and have you avoided the deep fried chips this week?" Ronita said.
"This continued effort, if at a sufficiently serious level, will eventually yield results such as being fitter, healthier, more active, more toned and happier."
Don't stop working
"Set progressively harder targets and make sure there is no end point for habits you need to keep going (for example, lose five kilograms for a specific event) because then your brain will have no reason to continue with the new habits."
Take small steps
"If you are confident and are working on bigger work goals make sure you still cut them down into smaller steps. Measure, reward ... and review frequently."
You may look more productive skipping lunch, or eating at your desk. But you aren’t.
Original post Ellie Krieger, The Washington Post
The hour-long lunch may be a charming relic of the past, like phone cords and typewriters, but in today’s 24-7 work culture, many of us don’t take any lunch break at all.
Fewer than 20 percent of American workers regularly step away for a midday meal, and 39 percent usually eat at their desks, according to a survey done by Right Management.
This trend is fueled by the notion that the most dedicated, effective workers are constantly available and on-task, and that taking a lunch break is counterproductive. It’s a perception that’s especially powerful in the tech sector, which gave birth to the meal-replacement drink Soylent so you don’t need to stop what you are doing to eat. The tagline for the product is “free your body,” which implies we’d be better off liberated from the pesky burden of needing to be fed.
But the idea that breaking for a meal hinders accomplishment is plainly wrong. The truth is, stopping to eat can actually make you much better at what you do.
Part of the reason lunch can boost your performance at work is that food literally fuels your brain, which needs a constant supply of energy to function optimally. So, the worst thing you can do for your midday mental performance is to skip lunch; and the best thing you can do, it seems, is to eat one with a balance of carbohydrates, protein, and fat.
Carbohydrate is the brain’s primary fuel and study after study, on everyone from children to airline pilots to the elderly, show improvement on memory tests after eating carbs, especially slow-release carbohydrates such as whole grains and vegetables. But it turns out that protein and fat have distinct roles in powering our brains as well.
In a 2001 study published in the American Journal of Clinical Nutrition looking at how carbs, protein and fats affect thinking, researchers concluded that each of the macronutrients enhanced performance on different kinds of tasks. So the optimal power-lunch should include all three — carbs from vegetables and/or whole grains; a protein such as lean meat, eggs, beans or nuts; and a healthy fat like olive oil or avocado.
Mobile gadgets, longer hours worsening sleep
Original post shrm.org
Lack of sleep hasn’t gotten as much attention as other well-known employee health-risk factors, such as insufficient exercise, poor nutrition and high levels of stress. But sleep deprivation results in poorer health and lower productivity, and the problem appears to be getting worse, according to an October 2015 report by MAXIS Global Benefits Network, a partnership between insurance providers MetLife, in New York City, and AXA France Vie, in Paris.
The report, Sleep: A Business Case for Bedtime, notes that corporate culture often confuses long hours on the job with high performance. But lack of sleep—typically, less than six hours nightly—significantly impacts workers’ cognitive abilities and overall health.
Researchers at Cornell University’s Institute for Health and Productivity Studies analyzed medical claims from 138,820 workers younger than 65 who were covered by self-insured, employer-sponsored health insurance plans. They found that both medical and indirect costs (such as those related to missed work, or lack of concentration while at work) were about $1,253 higher per individual for workers who had insufficient sleep than for those who got enough sleep.
Smartphones and tablets may be making the problem worse on two fronts:
- They make it easier—and often expected—for employees to stay wrapped up in workplace issues late into the evening.
- “They emit blue light that the eyes confuse with daylight, lowering the presence of sleep-inducing melatonin in the brain,” Dr. Lena Johns, MetLife’s global medical and wellness director, said in an interview with SHRM Online.
“Most of the time, employees don’t know how this is harming them,” Johns explained, “because when they look at their Facebook or their messages, they get a kick of dopamine, which is very addictive. But these blue-light devices also stop melatonin from being produced. You want to educate your employees that this is what’s happening and, as a consequence, they will struggle to sleep or won’t reach a deep level of sleep and will be fatigued the next day.”
What Employers Can Do
As an example of efforts employers can make to address sleep deprivation, Johns noted that French car manufacturer Renault provides sleeping pods and encourages employees who feel fatigued to take a 20-minute power nap between 1 p.m. and 3.p.m., “which it feels is the ideal time. Even if [employees] don’t sleep, just going in there and powering down lets people unwind and relax.”
Another example: Dutch-based Shell Oil has a fatigue risk-management program, Johns said. “This system looks at staffing levels and workloads to forecast if employees have enough time to sleep each night. And that information is factored into crew policies and shift-work overtime policies,” she noted.
Johns also recommended focusing on the following areas:
- Education and awareness. Education can be provided by holding seminars with sleep-deprivation experts, sharing relevant online articles with tips on improving sleep, incorporating getting sufficient sleep into wellness program goals and making managers sensitive to issues relating to sleep-deprived workers.
- Prevention and screening. Encourage managers to make schedules more predictable, or promote telecommuting. Health assessments can screen workers for sleep disorders. For employees who volunteer to take part in sleep-screening efforts, wearable devices can report back on how much sleep they’ve had, Johns said. “This [data collection] allows for individual assessments so individuals can determine what’s causing their sleep loss and provides for personalized interventions.” (For more on wearable devices, see the box below.)
- Behavior modification. “Employers can help employees to change some of their habits, like late-night logging into computers and looking at Facebook or Twitter just before they go to sleep,” Johns said.
Addressing Shift Issues
Late-night shift workers are more prone to getting sick. “There’s a disruption of their circadian rhythm, which is the natural time clock,” Johns said. “People who work in shifts have poorer immunity and are 2.9 times more likely to get colds and infections. There’s higher risk of hypertension and stroke.”
When night workers finish their shifts, it’s often daytime, “so they could use something to block the sunlight from entering their eyes,” Johns said, such as by wearing a blue-light blocking sunshade that looks like amber-colored sunglasses. By reducing exposure to daylight, night-shift workers are more likely to be able to sleep, and sleep soundly, once they’re home in bed.
Education can be targeted directly to the shift workers about when they should go to sleep in the morning, when they should wake up prior to their shift and what kind of light they should have during their night shift.
“It’s time to draw attention to this,” Johns said.
ACA reporting: Why 12 minutes is such an important metric
Original post hrbenefitsalert.com
If you’re wondering how long the actual ACA reporting process is likely to take, the IRS may be able to help.
When the Service released the final instructions for 1095-C reporting, it included another critical piece of information: The amount of time its likely to take employers to complete each ACA return.
The IRS estimates it’ll take employers an average of 12 minutes to complete each 1095-C return.
12 X 50, 100, 150 …
When you consider that at the bare minimum, employers subject to the ACA reporting requirements will be completing 50 returns, the reporting process is a significant time commitment. At 12 minutes per form, those 50 returns should take 600 minutes or 10 hours to complete.
Of course, this is just an estimate and, considering this is a brand-new, high-stakes process, it’s likely to take many employers longer than the average amount of time the IRS estimates. Still, the estimate does help give you some type of perspective on the time-commitment necessary for the actual reporting process.
Lines 14 and 15
While you’ll no doubt want to go over the IRS’ instructions with all parties involved in the reporting process, there are two lines in the instructions that are likely to be particularly helpful when it comes time to do the actual reporting:
Line 14: This line deals with the reporting process when an employee is terminated and COBRA continuation coverage is offered. If the terminated employee enrolls, the instructions say to use the appropriate indicator code. The indicator codes are listed on page 10 of the final instructions.
The IRS instructions also tell you what code to use on this line if an employee is terminated and denies an offer of COBRA continuation coverage.
When this occurs, you just use code 1H (no offer of coverage) for any month that the offer of COBRA continuation coverage applies.
Line 15: For this line, the IRS offered a quick way to calculate the lowest cost of the monthly premiums available for each employee.
To determine an employee’s monthly contribution, employers will divide the total employee share of the premium for the plan year by the number of months in the plan year.
What is the real cost of COBRA?
Original post by Chini Krishnan, eba.benefitnews.com
Whether you’re a benefit adviser, HR consultant or a broker, it’s important to understand the financial implications of COBRA and alternative solutions. By taking the right approach, you can become a cost-savings hero for both the employer and insured individuals. Here’s what you need to know to help educate your clients about COBRA alternatives that will put money back in everyone’s wallet next year.
While most individuals enrolled in a COBRA plan are keenly aware of the notoriously high expense, most companies don’t realize how much COBRA enrollees actually cost them – roughly 54% more in claims costs than active employees, according to Spencer’s Benefits Report. Here’s the breakdown:
- The average COBRA enrollee costs employers $11,000 in annual costs (versus $7,204 for the average active worker)
- Average rate of COBRA uptake by terminated employees: 10%
- Average recipient stays on COBRA 7.4 months
Why does COBRA cost employers so much? In part because former employees who opt in to COBRA generally do so because they have a pre-existing condition or other health issues, which drives the claims rates and costs up. Self-insured employers are most at risk for high COBRA costs because they cover the entire cost of their employees’ health insurance claims, including COBRA enrollees’ claims.
And, there’s more to consider when looking at COBRA’s bottom line. Having former employees on COBRA leads a company to be considered more of a risk when it comes time for annual renewals, or when shopping around for new plans. In fact, if a company chooses look for a new plan, it will start getting declined by carriers if it has more than 10% of its population on COBRA — the exact percentage of average uptake. So, in the end, having too many people on COBRA can hike up the premiums for active employees, too.
A better bet
Leveraging new opportunities available under the Affordable Care Act, employers and brokers can transition COBRA enrollees to a marketplace plan. This move is a huge win-win for both companies and their former employees. Employers save on the cost of claims, while former employees can save literally thousands of dollars a year compared to the cost of COBRA. Let’s look at the numbers from an enrollee’s perspective based on Kaiser Family Foundation’s 2015 Employer Health Benefits Survey:
- The average COBRA premium for a family in 2015 is $17,895.90 per year or $1,491.33/month
- Average individual premium (HHS/healthcare.gov states) before the Advanced Premium Tax Credit (APTC) is $374
- Average individual premium (HHS/healthcare.gov states) after the APTC is $105
- Average COBRA premium of $531.33/month
Considering these statistics, marketplace plans have the potential to be 80% less than COBRA.Plus,Centers for Medicare and Medicaid Services recently cited an HHS analysis stating “about eight out of 10 returning consumers will be able to buy a plan with premiums less than $100 dollars a month after tax credits; and about seven out of 10 will have a plan available for less than $75 a month.”
One of the common misconceptions is that marketplace plans don’t hold their own when compared to group insurance. But that’s hardly the case, especially when you consider that, after tax credits, enrollees could even upgrade their plans for the same price as COBRA. With such significant savings possible, it pays to be educated. In this case, what employers don’t know will hurt their bottom line. Don’t miss the window of opportunity to transition COBRA enrollees to the public marketplace.
Chini Krishnan is co-founder & CEO, GetInsured.
Wellness programs in 2016: What employers need to know
Original post by Sheryl Smolkin, ebn.benefitnews.com
In 2016 an increasing number of employers will buy in to a shifting perspective on wellness that will move from simply supporting the physical and mental health of their workforce to enhancing their quality of life by promoting social connectedness, job satisfaction and financial security.
As a vice president with the National Business Group on Health, LuAnn Heinen works with large self-insured employers. “We don’t need to ask anymore if our members offer any kind of a wellness program because virtually all of them are doing something,” she says.
A survey conducted by the NBGH and Fidelity in early 2015 revealed that onsite flu shots (90%), health fairs/educational seminars, promotions (84%) and health risk assessments (83%) were the most prevalent health risk management programs offered by employers.
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Heinen says typical wellness programs have been growing in popularity for the last decade because employers viewed them as a way to deal with increasing healthcare costs and to improve the health of their employee populations. Nevertheless, she notes, “recently there is an exciting new trend as more and more companies are looking beyond wellness to employee well-being.”
One aspect of total wellness that is expected to show continued growth in 2016 is a focus on financial security, personalized by the employees’ stage of life. “For example, millennials are interested in financial education about buying a house, having a baby and saving for their kids’ college education,” she says. “How to handle student loans and manage other debts are also big areas of concern.”
Bruce Elliott, manager of human resources at the Society of Human Resources Management, agrees that the trend to supporting employee financial wellness is on the rise. He points to PwC’s new employee benefit announced in September which will pay $1,200 a year for its associates and senior associates with one to six years of work experience to help reduce their student burden. The company expects that over time, this benefit could help reduce student loan principal and interest obligations by as much as $10,000 per employee, and shorten loan payoff periods by up to three years.
When it comes to segmented wellness programs, Elliott says they can be delivered in many ways including via lunch and learns, webcasts and individual appointments with financial planners. “But demographics are really key to programs offered,” he says. “It’s one thing to offer robust retirement planning services but if the average age of your employee population is 28, what kind of bang for your buck are you going to get, because retirement is not really their focus.”
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What other wellness trends do experts anticipate moving into 2016?
“Employers will find ways to re-energize their approach to programs supporting the physical health of their population to make these programs a more positive employee experience and increase their engagement,” believes Heinen.
She cites the example of retail giant Target offering Fitbit activity trackers to its 335,000 U.S. employees as a way to improve workers’ fitness and reduce health costs.
She also believes we will see more benefit and HR managers getting out of their silos and partnering with other internal groups to support the health and well-being of employees. “This could involve working with the real estate or facilities group to look at changing workspaces, purchase standing desks or setting aside more spaces for social connection like coffee bars. Providing healthy meals in the cafeteria and promoting health and safety will also require partnerships with other departments,” she says.
Elliott believes that in 2016 more employers will look for creative ways to enhance the financial wellness of employees. For example, he notes that that Starbucks now pays most of the tuition costs for employees who get a degree from Arizona State University Online.
The coffee company announced in September 2015 that employees who work at least 20 hours a week and enroll in the university’s online bachelor’s degree will get $6,500 – about half of their tuition – reimbursed for the first two years plus full tuition for the final two.
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In the medical-wellness space, Elliott sees the use of DNA testing and genetics to develop personalized disease prevention plans as definitely leading edge. In fact, Newtopia recently signed an agreement with Aetna to begin offering its enterprise health engagement platform to the insurance company’s largest employer customers and their employees.
The agreement follows the successful completion of a robust pilot program with Aetna employees who had, or were at risk for, metabolic syndrome, a combination of health factors that increase an individual's chance of developing diabetes, stroke, and heart disease. By analyzing key health markers and health benefit claims in the pilot program, Aetna verified that participants lost weight, reduced their waist size and had high levels of engagement in the program.
And because Elliott views provision of mental health services currently as the weakest link in employer wellness programs, he predicts 2016 will bring continued expansion of employee assistance programs and mental health provider networks.
Sheryl Smolkin is a lawyer and freelance writer based in Toronto.