Trending: Virtual Healthcare Gains Broader Acceptance
Original post benefitsnews.com
The Cadillac tax may have been postponed until 2020 but that doesn’t mean employers have put healthcare cost containment measures on the backburner. In fact, new research shows 90% of employers are planning myriad measures to control rising healthcare costs.
The 2016 Medical Plan Trends and Observations Report, released today by DirectPath and CEB, highlights top trends in employers’ 2016 healthcare strategies. Overwhelmingly, employers are continuing to shift a larger share of healthcare costs to employees, often through high-deductible health plans, according to the report.
The use of telemedicine, meanwhile, continues to grow, with almost two-thirds of organizations offering or planning to offer such a service by 2018 – a 50% increase from the previous year.
“Employees often say that they go to the emergency room because it's hard to get a doctor's appointment. With telemedicine, you've got 24/7 access and you don't necessarily need an appointment,” notes Kim Buckey, vice president of compliance communications at DirectPath. “That's certainly a huge driver of avoiding those visits to the emergency room or even the urgent care clinic because telemedicine is typically less expensive than an urgent care visit, as well.”
Buckey says it “makes sense” for employers to investigate telemedicine – the remote diagnosis and treatment of patients via phone calls, email and/or video chat – because employees are increasingly accepting of virtual access to just about everything.
“How many employees now are just grabbing their phones, iPads, or computers when they need information? That's something that people are comfortable with using and they don't have to leave their house to get quality care,” she says.
Spousal and tobacco surcharges are also expected to grow, according to the CEB data. Twelve percent of employers surveyed already have spousal surcharges in place, while 29% expect to introduce them in the next three years. Twenty-one percent of employers already have tobacco surcharges in place, while 26% expect to implement them in the next three years.
“I think we're going to see more and more of those, particularly as employers focus more on wellness initiatives,” says Buckey, adding that a robust communications plan is needed before implementing tobacco or spousal surcharges.
“People don't understand basic concepts like deductibles, co-pays, co-insurance, let alone how to make a decision about what plan to choose, or frankly, what's the best way of receiving care,” she says. “As more and more of these provisions are added to plans, they have the potential of being even more confusing and off-putting to employees, so having a robust communications plan in place that addresses all of these issues [is important]. ... There certainly will be cases where these surcharges aren't going to apply to a large percentage of the population. You just want to make sure that the folks who are affected, understand how they're affected and why.”
Using Compliance Reviews to Prepare Employers for Audit
Original post benefitsnews.com
A retirement plan sponsor has a fiduciary duty to ensure that the plan complies with all federal and state rules and regulations. Plan sponsors must follow the plan’s provisions without deviating from them unless the plan has been amended accordingly. Failure to follow the provisions can lead to plan disqualification. For the 2015 fiscal year, the Employee Benefits Security Administration reported that 67.2% of employee benefit plans investigated resulted in financial penalties or other corrective actions.
An operational compliance review can help. It’s different from a financial audit. An audit reviews the plan as it relates to the presentation of financial data; it is not designed to ensure compliance with all of ERISA’s provisions or other requirements applicable under the Internal Revenue Code. Operational compliance reviews, on the other hand, are concerned with validating the process being reviewed, with no restriction on whether it impacts the financials. An operational compliance reviewer wants to know that the process works, whether it is replicable, and consistent with the plan document.
Where to Begin
First, employers need to define the scope of the plan. To help define the scope, advisers and employers consider the following questions:
- Does the plan sponsor have a prototype, volume submitter, or individually designed plan document?
- Have there been any recent changes to the plan document?
- Have there been any changes to any of the service providers, including payroll and record keepers, over the past few years?
- Has the plan sponsor had to perform any corrections recently, perhaps without fully understanding how the errors occurred?
- Have there been any data changes or file changes as they are provided to the record keeper?
- Is there money in the budget to cover the review?
With the scope defined, a thorough operational compliance review should involve the following key steps:
- Review of the plan document and amendments, along with summary plan descriptions and a summary of material modifications;
- Review of required notices sent to participants, such as quarterly statements, initial and annual 404(a)(5) participant fee disclosures, Qualified Default Investment Alternative notices, safe harbor notices, etc.;
- Review of service provider contracts, such as record keepers and trustees/custodians;
- Discussions with the people who administer the plan, which may include the record keeper, trustee/custodian, payroll and benefits administration personnel;
- Review of plan administrative manuals, record keeper operational manuals, procedural documents and policy statements; and
- Review of sample participant transactions and data for each of the areas being reviewed.
Reviewing and comparing a record keeper’s administrative or operational manual with the plan document is an essential step in the review process. There tends to be a higher propensity for errors to occur when a record keeper is administering a plan that has an individually designed document versus its own prototype document. Lack of documented procedures can be cause for concern in ensuring the consistency and integrity of administering the plan, especially when there are any changes to the record keeping infrastructure, such as changes to plan provisions, modifications or upgrades to the record keeping system, or even personnel turnover.
While this process may lead to the discovery of errors you don’t necessarily want to find, you do want to gain perspective and overall confidence on your plan’s operations. Aside from finding errors, here are some things you should capture from an operational compliance review:
Areas of improvement for operational efficiency, including opportunities to maximize record keeper’s outsourcing capabilities;
- Answers to questions on whether the plan’s provisions and administration would be considered “typical”, and how they compare to industry best practices;
- An overall rating or report card of how a record keeper or service provider compares to industry peers; and
- Confidence that if your client’s plan is approached by the DOL or IRS, it’s ready for an investigation that will conclude with a letter saying “no further action is contemplated at this time”.
Embarking on an operational review may seem intimidating but, with a well-thought-out plan, process, and the right resources, a successful review will uncover potential issues that can be resolved the IRS or DOL arrive at your client’s door. The rewards for your efforts may include perspective on industry best practices and how you can operate the plan more efficiently.
Bill Would Allow Medicare-Eligible Retirees to Keep HSA Contributions
Original post businessinsurance.com
Health savings accounts are surging in popularity — and that can lead to some complications for older workers who enroll in Medicare.
Health Savings Accounts (HSAs) are offered to workers enrolled in high-deductible health insurance plans. The accounts are used primarily to meet deductible costs; employers often contribute and workers can make pretax contributions up to $3,350 for individuals, and $5,640 for families; the dollars can be invested and later spent tax-free to meet healthcare expenses.
Twenty-four percent of U.S. workers were enrolled in high-deductible health plans last year, according to the Kaiser Family Foundation - and 15% of them were in plans coupled with an HSA. That compares with 6% using HSA-linked plans as recently as 2010. Assets in HSA accounts rose 25% last year, and the number of accounts rose 22%, according to a report by Devenir, an HSA investment adviser and consulting firm.
But as more employees work past traditional retirement age, some sticky issues arise for HSA account holders tied to enrollment in Medicare. The key issue: HSAs can only be used alongside qualified high-deductible health insurance plans. The minimum deductible allowed for HSA-qualified accounts this year is $1,300 for individual coverage ($2,600 for family coverage). Medicare is not considered a high-deductible plan, although the Part A deductible this year is $1,288 (for Part B, it is $166).
That means that if a worker - or a spouse covered on the employer's plan - signs up for Medicare coverage, the worker must stop contributing to the HSA, although withdrawals can continue.
The normal enrollment age for Medicare is 65, but people who are still working at that point often stay on the health plans of their employers (more on that below). In certain situations, the worker or a retired spouse might enroll for some Medicare benefits. Moreover, if the worker or spouse claims Social Security, that can trigger an automatic enrollment in Medicare Part A and B.
That would require the worker to stop contributing to the HSA - and the contributions actually would need to stop six months before that Social Security claim occurs. That is because Medicare Part A is retroactive for up to six months, assuming the enrollee was eligible for coverage during those months. Failing to do that can lead to a tax penalty.
"The Medicare problem is a basic flaw in the way HSAs are designed," said Jody Dietel, chief compliance officer of WageWorks Inc, a provider of HSA and other consumer-directed benefit plans to employers.
Recognizing the problem, U.S. Senator Orrin Hatch and Representative Erik Paulsen proposed legislation last month that would allow HSA-eligible seniors enrolled in Medicare Part A (only) to continue to contribute to their HSAs.
The HSA complication is bound to arise more often as the huge baby boom generation retires, and as high-deductible insurance linked to HSA accounts continues to gain popularity among employers. High-deductible plans come with lower premiums - the average premium for individual coverage in a high-deductible health plan coupled with a savings option last year was $5,567 (the employee share was $868), KFF reports. By contrast, the comparable average premium for a preferred provider organization was $6,575 (with workers contributing $1,145).
Some experts also pitch HSAs as a tax-advantaged way to save to meet healthcare costs in retirement - although the HSA's main purpose is to help people meet current-year deductible costs, and employers often make an annual contribution for that purpose.
So far, there is not much evidence that large accumulations are building in the accounts. The average account total balance last year was $14,035, according to Devenir. The limits on contributions are one reason for that.
Deciding to delay a Medicare enrollment depends on your individual circumstances.
If you work for an employer with fewer than 20 workers, Medicare usually is the primary insurer at age 65, so failing to sign up would mean losing much of your coverage - hardly worth the tax advantage of continued HSA contributions. If you work for a larger employer, Medicare coverage is secondary, so a delayed Medicare filing is more feasible - so long as you or a spouse are not enrolled in Social Security. (Also make sure that the account in question is an HSA and not a Health Reimbursement Account - the latter is not a savings account and does not bring the Medicare enrollment problem into play.)
"We usually advise people to talk it over with a tax expert - it's more of a tax issue than a health insurance question," said Casey Schwarz, senior counsel for education and federal policy at the Medicare Rights Center, a nonprofit advocacy and consumer rights group.
Enrollment in vision plans remains high
Original post benefitsnews.com
Employers hoping to attract and retain employees need not look further than their vision benefit offerings. New research shows vision benefits have high engagement with employees, but some experts say employers need to work closer with advisers to build the benefit plan workers are seeking.
According to the 2016 annual Employee Perceptions of Vision Benefits survey conducted by Wakefield Research on behalf of Transitions Optical, eight in 10 people chose to enroll in employer-sponsored vision plans. It’s the only benefit to experience a year-over-year increase, the survey found, adding that some benefits such as life, dental and 401(k) plans saw a slight decrease in enrollment compared with 2015.
As more millennials enter the workforce, ancillary benefits such as vision may be considered a more immediate need than retirement plans or some medical benefits, Jonathan Ormsby, strategic account manager with Transitions Optical suggests.
“A competitive benefits package is a significant consideration and draw for workers,” he he says. “Nearly a third of survey respondents said they have, or know somebody, who has accepted a job in the last year because it offered a competitive benefits package – and one in five note that vision is the most appealing element of the package.”
The survey also found employees are increasingly making demands of their employers in terms of what options the vision plans cover. Forty-one percent say it is very important and 46% say it is somewhat important to have premium materials covered, including impact resistant polycarbonate lenses, photochromic lenses, anti-reflective treatment and others.
A desire for broader choice is also affecting the vision market, according to Srikanth Lakshminarayanan, senior director for the Center of Excellence at HGS Healthcare, which provides business process management and end-to-end services for healthcare payers and provider organizations.
“What we now hear from the customer is that they want a choice of options to be much broader,” he says. “They don’t want to be tied up to a particular vision care company” in order to obtain group discounts.
Education
“I think education is the top priority and one strategy we recommend for that is better collaboration between advisers and employers,” notes Ormsby.
For example, he says, “Advisers need to better educate employers on the materials especially the frames and lenses side of the benefits.”
Eighty-seven percent of employees say having premium material coverage is important when selecting their vision plan but more than a quarter are uninformed about the lenses covered by their vision plan, Ormsby says.
“So plenty of room for education,” he says.
Education should be a year-round initiative, he adds, something advisers should think about when working with employers. The survey found 29% of respondents felt a vision plan’s website was the most valuable resource in helping understand benefits, while 26% felt the benefits provider was valuable.
4 retirement trends to watch in 2016
Original post benefitspro.com
The Institutional Retirement Income Council has announced the top four retirement industry trends to watch in 2016.
- Financial wellness plans.
According to IRIC, financial wellness will be a big one.
Employers are expected to significantly expand wellness programs that currently focus on physical wellbeing so that they also include features focusing on financial wellbeing.
With all the financial challenges faced by employees—including medical expenses, credit card debt, college expenses, and retirement planning—financial wellness programs have been growing increasingly popular, with that trend expected to continue in the year ahead.
A 2014 Society for Human Resource Management survey reported that 70 percent of HR professionals predicted that baby boomers would likely participate in a financial wellness program if their employer offered one.
Such programs will likely include not just ways to manage debt and better save for retirement, but also how to calculate a spend-down plan once in retirement and how to incorporate Social Security into one’s overall strategy.
- Out of plan or in plan?
Next is the trend that pits out-of-plan income solutions against in-plan solutions.
In their quest to be sure that retirement savings will provide a regular source of income throughout retirement, participants have been looking outside of their retirement plans to find ways to translate a lump sum into a monthly check.
However, the Department of Labor’s expected implementation of a fiduciary rule will have a major effect on out-of-plan advisors, as well as in-plan options.
The release of a Center for Retirement Research study that showed IRAs’ rate of return a poor substitute for that of defined benefit plans will, according to IRIC, “make it all the more difficult for advisors to recommend moving out of a defined contribution plan to those eligible to keep their assets in the plan.”
As a result, it expects that participants will be more likely to leave their assets in a retirement plan rather than rolling them over.
- In-plan retirement income solutions.
The move to keeping assets inside retirement plans, IRIC said, “should cause an increase in participant interest in investment vehicles that provide solutions to the draw-down, rather than accumulation, of retirement assets.”
As a result, revisiting in-plan retirement income solutions will become a major focus for plan sponsors in 2016.
IRIC said that plans that have not considered this will be under pressure from participants to “consider new solutions to address the risks of retirement income sustainability, longevity risk, market timing risk and in-plan distribution options.”
- In-plan distribution flexibility.
Plan sponsors will have to consider the question of which distribution options will be available to terminated participants.
If a plan only offers two options—complete lump-sum distribution or keeping the entire balance in the plan—it’s likely that sponsors will want to explore the possibility of offering periodic withdrawal opportunities, so that they can encourage terminated participants to keep their assets in the plan—which can provide benefits not only to the participants, but also to the plan itself in the form of reduced administration and fee costs.
What employees need to know now to file tax forms for PPACA
Original post benefitspro.com
The Patient Protection and Affordable Care Act (PPACA) reporting deadlines are rapidly approaching, presenting a major administrative burden for employers who face penalties for failing to report in a timely and accurate manner.
While there has been significant discussion of employer roles and responsibilities, employees have been largely left out of the equation.
However, many employees will soon be receiving new forms that are critical to their ability to file their tax returns and to their employers’ ability to accurately fulfill their own reporting requirements. Among these are Forms 1095-A, 1095-B, and 1095-C.
With this in mind, it is important for employers to educate individual taxpayers on what they are required to do and when and how to complete these requirements in the easiest and most efficient manner.
1095-C
The most commonly received form will be the new 1095-C, which millions of Americans will be receiving for the first time this year.
This new government form is used to tell the Internal Revenue Service that you were eligible for insurance coverage under the Affordable Care Act and whether you took advantage of or waived this coverage.
This form will be sent by employers no later than March 31 to all eligible full-time employees who worked for a company with a total of 100 or more full-time or full-time equivalent employees in 2015. For the purposes of this form, full-time is any employee working 30 or more hours per week or 130 hours in a calendar month.
According to the IRS guidance, Form 1095-C helps to determine whether both the employer and the employee have complied with the “shared responsibility” clause of the ACA.
The form also determines whether an individual or family qualifies for the Premium Tax Credit, which reduces the burden of purchasing health insurance.
Anyone who does not have coverage elsewhere and chose to decline employer-sponsored health care coverage will be required to pay a penalty for not carrying coverage--this penalty will be assessed on their tax return.
For 2015, the penalty for declining all health care coverage is $325 per uninsured adult and $162.50 per uninsured child or 2 percent of household income, whichever is greater up to a family maximum of $975.
The penalty will increase to $695 per uninsured adult and $347.50 per child or 2.5 percent of household income up to a family maximum of $2,085 in 2016, and will continue to rise with inflation year-over-year.
However, the IRS offers special exemptions based on income, circumstance and membership in certain groups, so those without coverage should research their options or consult a tax professional. (The most common exemption is for those who declined employer-sponsored coverage that would have cost more than 8 percent of their total household income.)
Health care exemptions can be claimed by filing IRS form 8965 with your taxes. As previously noted, the form also determines who may be eligible for premium credits to help defray the expense of coverage.
Employers are required to submit insurance coverage information, along with social security numbers and other identifying employee information to the IRS, and employee failure to disclose a waiver of coverage may result in an audit and penalties greater than the ACA individual mandate penalty.
1095-B
Form 1095-B essentially serves the same purpose as form 1095-c, but is used by and sent to employees of companies with fewer than 100 employees.
It may also be sent directly by an insurer to certify that individuals/families had non-employer sponsored coverage in place in 2015. This coverage may have come from:
- Government health care plans such as Medicare Part A, Medicare Advantage, Medicaid, the Children's Health Insurance Program, and Tricare for military members, veterans’ medical benefits and plans for Peace Corps volunteers.
- Health coverage purchased through the "Marketplace" -- Web-based federal and state insurance markets set up under the Affordable Care Act.
- Any individual health insurance policy in place before the Affordable Care Act took effect.
Depending on the way a health care plan is structured, some employees may receive both a 1095-B and a 1095-C.
1095-A
Form 1095-A is only applicable to those who purchased their health care coverage through ACA’s health care exchanges.
This form plays a critical role in reconciling the Advanced Premium Tax Credits (also known as APTCs)--a yearly stipend based on modified adjusted gross income designed to help lower-income individuals and families defray the cost of purchasing exchange-based health insurance--for 2015 and in determining future credits for 2016.
Per IRS and ACA requirements, any excess APTC received in the previous year must be repaid through income tax.
What to do with these forms
Like the more familiar W-2 or 1099 forms, the 1095-A, B, and C will be needed to file a 2015 tax return for anyone who receives it.
Those using a tax preparer will need to bring it with them along with their other filing documents, and those doing their own taxes or using tax preparation software will need to keep this document with their tax records in case of any further inquiry /audit by the IRS.
Help is available
Of course, this is just one important factor in gaining a more thorough understanding of the complexities of the ACA. While the IRS has worked to streamline the process as much as possible, many employers and employees are struggling to understand and keep pace with changing requirements.
However, for quick questions, there are many good resources available to both employers and employees. One of the best is the IRS website.
As in all tax-related issues, the most important factors in handling ACA reporting for all groups are to know what’s coming, prepare in advance, keep excellent records, take note of deadlines and avail yourself of helpful resources.
Over-screening could be killing your wellness program
Wellness programs are seen as a way to hold down healthcare costs for companies. The idea is you give employees a helping hand to better their health and eventually their need for doctor visits and medications lessen.
But is it working?
Al Lewis, CEO of Quizzify and author of Surviving Workplace Wellness, believes the U.S. is "drowning" in over-diagnosis and over-treatment and wellness programs are partly to blame, according to EBA's article, 'Wellness programs ‘massively over-screening’ people'.
“This country is drowning in over-diagnosis and over-treatment, raising health care costs,” Lewis said.
Lewis believes the over-testing done on employees as a requirement in a company's wellness program could lead to false positives, unneeded medications or higher expenses for employers and employees.
Ron Goetzel, senior scientist at Johns Hopkins Bloomberg School of Public Health, agrees there are a lot of lousy wellness programs out there, but there are some good programs too.
“What we’re trying to do is figure out what works,” Goetzel said. “The most effective way is creating cultures of health where people go to work every day and come out healthier because of the culture, through leadership support and commitment, and a culture of doing everything to promote health.”
Lewis and Goetzel comments come from debate during the Population Health Alliance Conference in Washington, D.C. on Nov. 2, 2015.
Congress passes budget bill, what does it mean for employers?
Congress passed the Bipartisan Budget Act of 2015. President Obama released a statement Friday morning applauding Democrats and Republicans for their passing votes.
“I applaud the Democrats and Republicans who came together this morning to pass a responsible, long-term budget agreement that reflects our values, grows our economy and creates jobs,” President Obama said in the statement. “This agreement is a reminder that Washington can still choose to help, rather than hinder, America’s progress.”
The big picture on the bill approved a two-year budget deal that would increase spending limits and avert a damging default.
RELATED: Senate approves two year bipartisan budget agreement
What does the budget bill mean for employers?
The bill repealed the Affordable Care Act's provision requiring employers with more than 20 employees to automatically enroll a ful-time employee in a health plan if overage wasn't voluntarily chosen or declined by an employee. However, since 2012 regulators have not put great emphasis on the provision.
“Striking this redundant requirement off the books puts health decision-making back in the hands of American workers and their families, and provides employers with relief from potentially problematic and burdensome regulations,” Christine Pollack, vice president of government affairs at Retail Industry Leaders, told Employe Benefit Adviser. The RILA is a trade association representing more than 200 of the world’s largest retail companies, including Wal-Mart, Walgreens and Apple.
The bill also provides that the single-employer fixed Pension Benefit Guaranty Corporation (PBGC) premium would be raised to $68 for 2017, $73 for 2018 and $78 for 2019, and then re-indexed for inflation. The bill also bumps the due date up to the ninth calendar month beginning on or after the first day of the premium payment year. It was the tenth calendar month.
RELATED: Changes employers would see with the budget bill
Aging workforce means rethinking benefit strategies
More gray hair in the workforce is becoming the norm as more workers are putting off retirement.
The Center for Retirement Research at Boston College found workers are delaying retirement because of a lack of traditional defined benefit pension benefits, a later Social Security retirement age for full benefits and the declining number of employer-provided retiree health benefit programs. However, there are some that keep working for financial reasons or because it keeps them busy and sharp.
The Boston College researchers expect the average retirement age to increase by a full year from the current age of 61.8 to 62.8 over the next three decades.
Joanne Sammer, a New Jersey-based business and financial writer, shared with shrm.org how the older worker can affect your company's benefit plans.
Workplace Implications
An older workforce has significant implications for employers and the organizational culture. There are plenty of positive aspects of having more older workers in an organization. For one thing, many older workers are talented, well-trained, and have deep life and workplace experience that can be invaluable to any organization. But the value that comes from having older workers does not necessarily accrue automatically. Companies can cultivate this value by:
• Fostering generational ties. “Employers should develop strategies for capitalizing on the positive opportunities that multigenerational workforces can create, such as mentoring, knowledge transfer, diversity of perspectives, and cross-training on technology and other skills,” said Debra Friedman, member of law firm Cozen O’Connor in Philadelphia.
At the same time, employers will need to manage some of the challenges associated with older workers. “When employees stay in the organization longer, the balance of generations and the gaps between them become greater,” said Chris Cordery, senior vice president of sales at RealMatch, a recruitment technology firm in New York
Cordery suggested that employers pay close attention to how various generations interact and work together. Designing events and activities that allow employees from multiple generations to get to know each other and socialize a bit can also help prevent or ease any tensions in the workplace, he said.
• Offering accommodations. There are legal issues to consider as well. For example, “employers may experience a higher volume of Family and Medical Leave Act leave requests from its aging workforce, as older employees may have more serious health conditions and/or need to care for aging parents and spouses,” said Friedman.
Older workers may also require more accommodations in their work environment. In these cases, employers need to be vigilant in making sure the organization and individual managers and supervisors are well-versed on various legal requirements for making such accommodations, including the federal Americans with Disabilities Act and relevant state and local laws.
“Employers also should be proactive in training their workforces to prevent age bias in recruiting, hiring, performance management, retention and workforce reorganizations,” said Friedman.
• Phasing retirement. Just because employees are staying in the workforce longer does not mean that they want to keep working forever. Employers can offer flexible work arrangements, such as flexible hours and scheduling, and telecommuting opportunities. These efforts can include a formal phased retirement program that allows employees to keep working while reducing their hours, and potentially their responsibilities, over time.
“An employee who is aging may still want to play a vital role in the organization, but may not be able to contribute in the same way and at the same speed,” said Beth Zoller, legal editor for XpertHR USA, a provider of HR information resources. “If a worker is no longer able to perform a specific job, the employer should evaluate whether an employee’s skills and talents may be used elsewhere in the company.”
The Benefits Question
Benefits and compensation can also reveal the differences between older and younger workers. “Employees later in their careers may be more motivated by a 401(k) match, while employees earlier in their careers may be more excited about educational reimbursement,” said Jackie Breslin, director of human capital services at HR services provider TriNet in San Leandro, Calif.
Because older individuals tend to have higher health care expenses, employers with a large number of older workers could see higher health benefit costs. Friedman urged employers to implement wellness programs that can help the entire workforce to identify and manage any chronic health conditions.
Zoller suggested employers increase their workplace safety efforts to help older workers. For example, employers could install guardrails, better lighting and other improvements to help ease the strain on older workers.
Growing Awareness
Employers are recognizing the trend toward longer work lives and the implications for the workplace. A 2014 survey of nearly 2,000 HR professionals by the Society for Human Resource Management found that 36 percent were aware of the aging workforce trend and were examining their internal policies and management practices to address the change, while 20 percent had already done so and determined no changes were necessary. Another 19 percent were just becoming aware of these issues.
This awareness is critical. The changes and accommodations necessary for older workers are not extensive. They simply require employers to have open eyes, ears and minds in order to see potential challenges and pressure points for older workers and take steps to alleviate them.
Joanne Sammer is a New Jersey-based business and financial writer.
What Employers Need to Know About Court’s Gay-Marriage Ruling
Originally posted by Rachel Emma Silverman on June 30, 2015 on wsj.com.
The Supreme Court on Friday ruled that same-sex couples have a constitutional right to marry, meaning that same-sex marriages must be recognized nationwide. The ruling will have vast implications for employers, which until now have been operating under a patchwork of different state and federal laws governing the legal and tax treatment of same-sex unions.
Here’s what businesses should keep in mind as they navigate the new landscape.
If an employer offers spousal health-insurance benefits, do they need to offer them to all married employees, gay or straight?
In general, yes.
Companies that offer spousal health benefits and use a separate insurance company to fund their benefits will now be required to cover both gay and straight spouses. “Based on the court’s ruling. there is simply one type of spouse,” says Todd Solomon, a law partner in the employee-benefits practice group at McDermott Will & Emery in Chicago, who has been tracking same-sex employee benefits for nearly two decades.
But companies that are self-insured, which means they assume the insurance risks for their own employees, a common practice among large companies, aren’t under the same legal constraints. “There is technically no legal requirement that a self-insured company has to include a same-sex spouse,” Mr. Solomon says. As a result, self insurance “is where we are going to see a lot of activity and a lot of litigation.”
Companies should think twice about self-insuring but denying benefits to gay spouses because they will be vulnerable to discrimination suits, he says.
What if an employer has a religious objection to gay marriage?
They have limited options.
Companies could choose not to offer benefits to spouses altogether. Or they could self-insure and attempt to offer benefits to only straight spouses, but they run a high risk of discrimination suits, Mr. Solomon says.
Now that same-sex marriage is legal, will it add a lot of people to employers’ benefits plans? Will this be expensive for employers?
It could, but it depends on what type of plan a company already had.
If a company already covered unmarried same-sex domestic partners, it could be cheaper because covering spouses doesn’t have negative tax implications and is easier to administer than most domestic partnership benefits, Mr. Solomon says.
But if a company only offered spousal benefits, the ruling will add new couples that previously weren't allowed to marry.
Will the Supreme Court ruling lead to fewer employers offering spousal benefits?
Yes—that has been the trend, and the ruling might exacerbate it.
Employers have been cutting spousal benefits to save money, either dropping spousal coverage or imposing surcharges on spouses who can obtain health insurance elsewhere. A survey from consulting firm Mercer of more than 1,100 large employers found that 17% either excluded spouses with other coverage available or imposed a surcharge in 2014, compared with 12% in 2012.
The Supreme Court ruling might spur some employers who were already inclined to cut spousal benefits to do so, Mr. Solomon says.
What are the tax implications?
It equalizes the tax treatment of gay and straight married couples.
Until the ruling, there were a patchwork of state and federal tax laws governing same-sex couples. Employers, depending on the state, sometimes faced additional payroll taxes for same-sex employees, and workers sometimes faced additional income taxes.
Now, for both federal and state tax purposes, companies and employees won't face different tax treatment for gay and straight married couples. That will make benefits easier for companies to administer, Mr. Solomon says.
What does this mean for domestic partnership benefits?
This is a particularly complicated issue for employers.
Over the past decade, a growing number of companies offered “domestic partnership” coverage for gay employees and their partners as a way to provide equal benefits for couples who couldn’t legally wed. Others companies offer coverage more broadly to unmarried domestic partners, regardless of sexual orientation, recognizing that some employees simply prefer not to marry.
Companies that offer unmarried partnership benefits to both gay and straight couples will likely continue to do so.
But companies that offer partnership benefits just to gay couples may begin to phase them out because now all their employees can legally marry. Offering domestic partnership benefits just to gay couples but not straight ones might make firms vulnerable to reverse discrimination lawsuits, lawyers say.
On the other hand, firms may choose to keep domestic partnership benefits to help protect gay employees from discrimination. The majority of U.S. states lack anti-discrimination protection for gay employees, so workers can be fired for their sexuality. Because marriage certificates are public, forcing employees to get married for spousal benefits may end up “outing” an employee, while domestic partnerships are typically private matters, gay advocates say.