9 tips to help employees transition to public exchanges
Originally posted on https://ebn.benefitnews.com.
According to the Obama administration, the state insurance marketplaces set up under ACA are on schedule to begin open enrollment on Oct. 1. To aid in communicating health care reform changes this fall, here are nine tips for transitioning employees into the public marketplace from Sara Taylor, health solutions development leader at Aon Hewitt.
While the model notice provided by Health and Human Services helps employers comply with provisions of the Affordable Care Act, the notice itself is likely to generate confusion and more questions from employees than it answers. Employers should supplement the model notice with additional education on the ACA and proactively answer the question, "What do I need to do with this notice?"
Explain your benefits strategy and provide context on how the public marketplaces fit within your benefits strategy.
The ACA and marketplaces may impact different employee groups in different ways. Think through the messages that impact all employees and those messages that affect only specific audiences.
What do employees need to do and by when? This information can get lost. Be sure to clearly call out specific required action steps and deadlines – both for your benefits plans and for marketplaces.
Public marketplaces are only one option for employees to obtain medical insurance. With many states expanding Medicaid eligibility, Medicaid or other public programs may be viable alternatives for some employees.
No matter how well you communicate, some employees will have questions or need additional assistance and they will likely look to you for help. Ahead of time, determine who will be handling questions, identify likely questions and have answers and others resources prepared ahead of time.
Enrolling in health benefits can be overwhelming for many individuals, and the introduction of the marketplaces adds a whole new layer of complexity. There are resources and tools available today that can help individuals understand their options, model program eligibility — including whether they may qualify for a premium tax credit (or subsidy) in a marketplace — and in some cases, enroll in a health plan.
Ensure that your leadership is aware of and on board with your benefits strategy and how the public marketplaces fit into that strategy. Encourage your HR team and managers to be advocates for your strategy to employees.
Employees that apply for financial assistance in the marketplaces need to provide information about any health insurance available to them from an employer (e.g., cost of "you only" coverage). Individuals will be instructed to ask their employers to fill out the employer information section of the form. Know how you will handle these requests. Or better yet, give employees self-service access so they can complete the application themselves.
10 post-DOMA tips for benefits managers
Originally posted by Dan Cook on https://www.benefitspro.com
When the U.S. Supreme Court ruled in United States v. Windsor that the federal government is required to recognize same-sex marriages performed in states that allow such marriages, benefits managers started dialing 911.
In an article posted on the Sutherland Asbill & Brennan website, attorneys Vanessa Scott, Carol Weiser, Joanna Myers and Mikka Gee Conway offer considerable guidance on how to amend a benefits plan to meet the implications of Windsor.
Their 10 tips should be read with the understanding that forward-looking plan managers will be anticipating that same-sex marriages will sooner or later be part of the domestic law landscape and will revise their plans accordingly. One major issue currently centers on the state in which a same-sex marriage was performed vs. the state where a same-sex couple resides. But again, assume that residence will eventually prevail for those couples married elsewhere.
Here are their 10 tips:
1. Generally, spousal provisions in an employer’s employee benefit plans, including qualified retirement plans, welfare plans and fringe benefit plans, should apply to same-sex spouses in the same manner as they are applied to opposite-sex spouses.
2. There may be an exception to the general rule above in the case of welfare plans and fringe benefits that define covered “spouses” by reference to the law of a state that does not recognize same-sex spouses or such plans that do not clearly define the term “spouse.” In these cases, plan administrators may still have the authority to interpret the term “spouse” to exclude same-sex spouses. However, it is unclear whether such interpretation might now be considered “arbitrary and capricious” if challenged in litigation following the Windsor decision.
3. Any plan or benefit policy amendment or interpretation that relates to spouses —including prospective verification of spousal status — should be applied to opposite-sex couples in the same manner as same-sex spouses.
4. Plans that do not currently offer spousal benefits at all will not be required to offer spousal benefits as a result of the Windsor decision.
5. For qualified retirement plans, there are implications for application of qualified joint and survivor annuity rules, Internal Revenue Code (Code) section 415 maximums, minimum required distributions, and qualified domestic relations orders. The implications for health plans include the need to offer COBRA to same-sex spouses.
6. Welfare plans that currently offer benefits to same-sex spouses of employees and impute income on the value of the benefit to the employee for federal tax purposes will no longer need to do so. This may require amendments to plan documents and communication materials.
7. Welfare plans that do not impute income on the value of benefits provided to same-sex spouses for state tax purposes in states that allow (or recognize) same-sex marriage will continue this practice. In states that do not allow (nor recognize) same-sex marriage, welfare plans will continue to impute income on the value of benefits provided to same-sex spouses for state tax purposes.
8. It is unclear whether the Windsor decision will have a retroactive impact. Guidance on this issue from federal agencies is anticipated in the coming days and weeks. However, a retroactive application by agencies, such as the Internal Revenue Service (e.g., if the Service reads the Code as if Section 3 of DOMA was never enacted) could be costly, even for plans that currently provide same-sex spousal benefits.
9. Employers will no longer be required to pay FICA taxes on the value of welfare benefits provided to a same-sex spouse. Employers that currently offer same-sex benefits should consider whether they should seek a refund for FICA taxes paid on those benefits during the past three years.
10. The Windsor decision does not require employers to recognize rights granted under “marriage-like” relationships, such as domestic partnerships and civil unions.
Satisfaction with health plan costs improving
Originally posted July 23, 2013 by Andrea Davis on https://ebn.benefitnews.com
Employer satisfaction with health plan costs is going up, according to the J.D. Power 2013 Employer Health Plan Study, yet health plans may risk losing group business unless they improve satisfaction in other areas.
The study, now in its fourth year, measures six factors that affect employer satisfaction with health plans: employee plan service experience, account servicing, program offerings, benefit design, problem resolution and cost. Satisfaction with cost is improving as more consumer-driven health plans are offered to employees, which 82% of employers indicate are controlling costs.
Employer satisfaction with costs “went up significantly in all the attributes we measure. Significantly more employers are offering CDHP products to their employees and so that has been a cost shifting measure that they are satisfied with,” says Scott Hawkins, director, health care, J.D. “But one of the things we see on the member side is that when employees are put on those products and they don’t really understand them, their satisfaction is lower. So I think it’s really important that employers work with the health plans to help their members understand how to manage those costs once they’re on those products or they’re going to have dissatisfied employees.”
Fifteen percent of employers say they “definitely will not” or “probably will not” continue sponsoring coverage in five years.
Perhaps not surprisingly, cost satisfaction among employers that indicate they intend to continue sponsoring coverage in the future is 106 points higher (on a 1,000-point scale) than among those that intend to drop coverage (696 vs. 590, respectively.)
“You can minimize the impact on satisfaction with the members and employees if you offer value-added benefits. And one of the things we’re seeing in our data and the employer data is that while health plans are offering a lot of the primary and secondary services that the employees are asking for, a lot of the employers aren’t taking advantage of those things; they’re not offering them to their employees,” says Hawkins.
Simple things like gym memberships, health risk assessments, drug compliance plans for employees with chronic conditions, for example, “will help satisfy the members and help them feel they’re getting value for what they’re paying,” says Hawkins. “But what we see now is that a lot of plans are offering them to employers, but not many of them are taking them up on it.” He suspects cost is the main reason employers may be reluctant to offer these programs to employees.
In both the fully insured and self-funded groups, employer satisfaction with program offerings, such as preventive health programs, disease management or wellness initiatives, is a key area of differentiation between employers that intend to offer coverage in the future and those that intend to drop coverage. In the program offerings factor, the gap in satisfaction scores between fully insured employers that intend to offer coverage in the future and those that intend to drop coverage is 104 points — 705 among employers that intend to offer coverage, compared with 601 among those that intend to drop coverage. Among self-funded employers, the gap in satisfaction scores between those that intend to offer coverage in the future and those that intend to drop coverage is also 105 points — 689 among employers that intend to offer coverage, compared with 584 among those that intend to drop coverage.
The 2013 Employer Health Plan Study is based on responses from 5,857 employers.
Pet insurance growing as an employee benefit option
Originally posted on https://www.stockhouse.com
An increasing number of companies in North America are offering pet insurance to employees in an effort to attract better hiring candidates, U.S. experts say.
According to Veterinary Pet Insurance president Scott Liles, around 3400 companies and associations offer the benefits as an employee enticement and retention tool.
Nevada's largest employer, MGM Resorts International (NYSE: MGM, Stock Forum), added pet insurance for employees in 2006 and Chipotle (NYSE: CMG, Stock Forum) has been offering the benefits since 2002.
Of the 165 million pets estimated to reside in the United States, only a small portion are covered by pet insurance, but as veterinary costs rise, an increasing number of employers are providing it as part of their benefits package, with Chipotle subsidizing $10 per month, per pet, for up to three per employee.
The organization says only around a hundred employees take them up on the offer, which covers the low end of pet insurance costs of anywhere up to $57 a month, according to a company official talking with UPI.
Pet retailer PetSmart (NYSE: PETM, Stock Forum) offers insurance for employee pets, offering comprehensive coverage for illness and accidents, coverage for tests, X-rays, medication, hospitalization and surgery, a 5 per cent group rate discount and enrolment fee waiving, and death benefits.
-Chris Parry, Stockhouse.com
Rethink rewards on a personal level
Originally posted July 30, 2013 by Tristan Lejeune on https://ebn.benefitnews.com
Estimates from organizations including Mercer and WorldatWork put next year’s average U.S. base salary increase at approximately 3% -- a healthy gain for most of the industrial world, which actually saw pay fall this year, but a disappointing “new normal” for benefits pros who remember sunnier days. With budgets for rewards and compensation stretched like sausage casings – thin and fragile, but holding it all together – companies will be looking for even more low- and no-cost ways to recognize top performers and achievers than they have in years past.
That works just fine for David Olson and Dr. Bob Nelson, co-founders of Recognition PRO. Olson and Nelson have spent years tracking incentivized behavior and corporate rewards, and, like the song says, the best things in life are free. They say the best-motivated workforces aren’t driven by plaques, coffee mugs or even bonuses; they’re driven by deeper personal connections with their managers and coworkers, and personalized recognition that comes from those relationships.
“I’m a culture consulting coach with CEOs” Olson explains how he and Dr. Bob connected a few years ago. “[We] recognized the need to improve employee recognition culture within workforces, and we came up with a unique way to go about doing that,” Olson adds. “Most of the $50 billion [incentive] industry has tried to solve the problem by throwing merchandise at employees. That doesn’t really create a culture of recognition; creating a culture of recognition comes down to strengthening manager-employee relations …”
Nelson, the best-selling author of “1001 Ways to Reward Employees” looks at the problem from a psychological perspective. The ultimate goal of psychology, some say, is to improve behavior – in this case, group behavior. “I’m not in the incentive industry,” Nelson says. “I’m really a behaviorist.” Out of the 13 most-motivating management behaviors, he says, the top nine cost an organization nothing at all.
DOMA decision raises as many questions as answers
Originally posted on July 5 by Brian Magargle on https://ebn.benefitnews.com
The Supreme Court that struck down a key provision of the Defense of Marriage Act and required the federal government to recognize same-sex marriage will have far-ranging implications for employee benefit plans.
In 1996, Congress enacted the DOMA, which defined marriage as "only a legal union between one man and one woman as husband and wife. . . ." Last week's decision declared that section of DOMA to be unconstitutional, so couples that have married in states that recognize same-sex marriage are now entitled to the same federal protections and privileges that come with traditional marriage, including in the employee benefits arena. Pending additional federal guidance, employers and their advisers should now begin considering these issues and the benefit administrative areas affected.
Factual background of U.S. v. Windsor
In 1963, Edith Windsor and Thea Spyer met in New York City and began a long-term relationship. They registered as domestic partners when New York City provided that right to same-sex couples in 1993. In 2007, they traveled to Canada to be lawfully married under Canadian law since Ms. Spyer's health was deteriorating, but they continued to reside in New York City. The State of New York deemed their marriage to be valid because of the city ordinance recognizing domestic partnerships.
Ms. Spyer died in 2009 and left her entire estate to Ms. Windsor. Because DOMA denied federal recognition to same-sex spouses, Ms. Windsor did not qualify for the marital exemption from the federal estate tax. Without that exemption, Ms. Windsor paid more than $360,000 in estate taxes. She then filed suit against the Internal Revenue Service for a full refund by challenging the federal definition of marriage in DOMA, and her case eventually landed in the Supreme Court this year.
The Supreme Court's reasoning
In reaching its 5-4 decision, the court first noted that the definition and regulation of marriage has historically been treated as a state, not federal, matter. Since DOMA is a federal law, it affected marriages in all states, including those states which have opted to recognize same-sex marriage. The effect in those states was that the marriages of same-sex couples were valid under state law but invalid for purposes of all federal laws.
The court found the definition of marriage in DOMA to be unconstitutional because it violated basic due process and equal protection principles applicable to the federal government. Writing for the majority and joined by Justices Breyer, Ginsburg, Kagan, and Sotomayor, Justice Anthony Kennedy said that "[t]he avowed purpose and practical effect of the law here in question are to impose a disadvantage, a separate status, and so a stigma upon all who enter into same-sex marriages made lawful by the unquestioned authority of the States. Were there any doubt of this far-reaching purpose, the title of Act confirms it: The Defense of Marriage."
Issues and challenges for employee benefit plans
The Windsor decision has an impact on the application of more than 1,000 federal laws, including laws that apply to the administration of employee benefit plans, such as certain sections of the Internal Revenue Code and the Employee Retirement Income Security Act of 1974. Benefit plans of all types are now faced with significant decisions about how the Windsordecision will affect the treatment of same-sex spouses. These decisions will be especially difficult because currently there are no regulations or guidance as to what is considered legally correct treatment of same-sex spouses.
In the states where same-sex marriage is recognized, decisions will be more straightforward because benefit plan administrators should be able to treat same-sex spouses the same as all other married couples. Same-sex marriage is currently recognized in Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont, Washington state and the District of Columbia. Also, as of last Friday, California again recognizes same-sex marriage after a surprisingly fast decision by the U.S. Court of Appeals for the Ninth Circuit permanently refusing to enforce the state's Proposition 8 gay marriage ban. So, in these states, we expect benefit plan administrators to have a relatively easy transition for covered same-sex spouses.
The real challenges arise in situations like the following: a same-sex couple gets legally married in a state that recognizes same-sex marriage but then moves to a state which does not. What then? These situations will be especially complex because the Supreme Court struck down only the definition of marriage in DOMA, which was Section 3 of the law.Section 2 was not at issue in or affected by the Windsor decision, and it says that no state "shall be required to give effect to any public act, record, or judicial proceeding of any other state … respecting a relationship between persons of the same sex that is treated as a marriage under the laws of such other state … or a right or claim arising from such relationship." In other words, a state that does not recognize same-sex marriage is not required to recognize the legal marriage of a same-sex couple married in one of the jurisdictions listed above.
This tension between state laws for couples who move from one state to another will be felt by retirement plan administrators when determining beneficiary/survivor rights under 401(k) plans and other pension plans. Administrators for both self-funded and insured health plans will need to consider how to approach covering same-sex spouses as dependents of active employees, spousal COBRA obligations after a qualifying event, and structures of health flexible spending accounts. In addition, since health coverage for same-sex spouses is no longer a taxable benefit under the Internal Revenue Code, payroll taxes and withholdings will need to be reviewed and probably revised for same-sex couples.
Action points
Until guidance is issued in some form on the treatment of legally married same-sex spouses in other states where such marriages are not legal, employers and plan administrators should take a reasonable, good-faith approach applied on a consistent basis across all locations. Although it is impossible to know with any certainty, we expect that when the federal government does issue guidance, it will largely favor recognizing same-sex marriages for benefit plan purposes even in states in which such marriages are unlawful.
In any event, employers should start considering these issues now so that they will be as prepared as possible when employees ask questions or when an enrollment or benefits decision needs to be made for a same-sex couple. Once organizational decisions are made, then employers will need to review and possibly amend their plan documents and summary plan descriptions accordingly.
Constangy's ERISA/Employee Benefits Practice Group is continuing to study the Windsor decision and to monitor federal and state developments as they may affect the treatment of same-sex spouses under benefit plans. In the meantime, all employers and especially multi-state employers should begin discussing what issues they may be facing and identifying which plan administration areas will be affected by this major court decision.
Used with permission by Constangy, Brooks & Smith, LLP. Magargle is an attorney in the firm’s Columbia, S.C. office.
The firm has counseled employers on labor and employment law matters, exclusively, since 1946. A "Go To" Law Firm in Corporate Counsel and Fortune Magazine, it represents Fortune 500 corporations and small companies across the country. Its attorneys are consistently rated as top lawyers in their practice areas by sources such as Chambers USA, Martindale-Hubbell, and Top One Hundred Labor Attorneys in the United States, and the firm is top-ranked by the U.S. News & World Report/Best Lawyers Best Law Firms survey. More than 140 lawyers partner with clients to provide cost-effective legal services and sound preventive advice to enhance the employer-employee relationship. Offices are located in Alabama, California, Florida, Georgia, Illinois, Massachusetts, Missouri, New Jersey, North Carolina, South Carolina, Tennessee, Texas, Virginia and Wisconsin. For more information, visit www.constangy.com.
Now What? Employer Benefits Obligations Post-DOMA
Originally posted by Stephen Miller on https://www.shrm.org
On June 26, 2013, the U.S. Supreme Court, in United States v. Windsor, found unconstitutional Section 3 of the federal Defense of Marriage Act (DOMA), which had prohibited the federal government from acknowledging marriages between same-sex couples. Same-sex marriages were recognized as legal by 12 states and the District of Columbia at the time of the ruling. In a related case, Hollingsworth v. Perry, the court ruled that those challenging a California state court decision that made same-sex marriage legal in California (by overturning a state ballot initiative known as Proposition 9) lacked standing to do so—a finding that will restore legal same-sex marriage in the state.
“The Windsor decision is as many expected," Roberta Chevlowe, senior counsel in law firm Proskauer's employee benefits practice center in New York, told SHRM Online. "While the court held that Section 3 of DOMA (which defines 'marriage' and 'spouse' as excluding same-sex partners) is unconstitutional on equal-protection grounds, the decision does not force same-sex marriage on the states, which appear to continue to be free to define marriage as they wish and not recognize same-sex marriage."
For employers, "the Windsor decision means that there is much work to do with regard to the employer's benefit plans, even for employers who do not operate in states that recognize same-sex marriage," Chevlowe added. "On the health benefits side, among other things, employers will need to revisit the definition of 'spouse' in their plans to ensure that the definition is consistent with the employer's intent, in light of the decision. Employers may also need to cease imputing income to employees for the value of the health benefits they provide to same-sex spouses. With regard to qualified pensions, plan language and procedures will need to be considered because same-sex spouses have additional rights to federally protected benefits."
In addition, "Employers should expect that employees will immediately start asking questions about their rights with regard to various employee benefits, and employers will need to consider carefully the scope of the decision and various issues relating to the implementation and effective date of the decision with regard to these issues,” Chevlowe said.
Expanded Obligations
In an e-mail, Todd Solomon, an employee benefits partner at law firm McDermott Will & Emery LLP in Chicago, identified the following as key benefits implications for private-sector organizations (but not necessarily state government and church employers) now that Section 3 of DOMA has been struck down.
For a legally married couple who live in a state where same-sex marriage is recognized:
- Federal laws governing employee benefit plans will require companies to treat employees’ same-sex and opposite-sex spouses equally for purposes of the benefits extended to spouses.
- Employers with self-insured welfare plans (meaning benefits are paid out of the company’s general assets) may not have to extend spousal-benefit coverage to same-sex spouses, because federal law does not require spousal welfare-benefit coverage and because state insurance law mandates do not apply to self-insured plans. However, employers that continue to provide benefit coverage only to opposite-sex spouses "are almost certain to face legal challenges under federal discrimination law," Solomon advised.
- Employees will no longer have to pay federal income taxes on the income imputed for an employer’s contribution to a same-sex spouse’s medical, dental or vision coverage. And workers can pay for same-sex spouses’ coverage on a pretax basis under a Section 125 plan.
- Businesses will have to offer COBRA continuation coverage to same-sex spouses.
- Employers with pension plans will be required to recognize same-sex spouses for purposes of determining surviving-spouse annuities. Same-sex spouses must also agree to receive payment of their deceased spouse’s pension benefits in a form other than a 50 percent joint and survivor annuity, with the same-sex spouse as the beneficiary.
- Organizations with 401(k) plans will have to recognize same-sex spouses for purposes of determining death benefits, and same-sex spouses must consent to beneficiary designations.
- Employees must be permitted to take family and medical leave to care for an ill same-sex spouse.
"The above rules only apply to same-sex spouses who were married in and live in a state where same-sex marriage is legal,” Solomon clarified. “The big open question is what happens to same-sex spouses who live in states such as Florida or Texas," which don't recognize same-sex marriages. "No one can answer the question until additional guidance is issued. It is possible that the answer can vary for different purposes—for example, state of residence will likely carry the day for tax filing and imputed income purposes, but it is possible the IRS could say that 'state of celebration' governs for pension plan purposes. In the meantime, it appears that employers can choose either approach, but it will be imperative to amend plans to add clear plan language to document the employer's approach."
The decision "will affect retirement plan administration because plans will have to obtain the consent of the same-sex spouse to permit a waiver of the qualified joint and survivor annuity (QJSA) form of benefit or for any other purposes for which the consent of an opposite-sex spouse is required," in states that recognize same-sex marriages, concurred Leslye Laderman and Marjorie Martin, principals at Buck Consultants LLC. "It is unclear from theWindsor ruling whether employers will be required, or permitted in the case of the QJSA, to recognize same-sex spouses of employees living in states that do not recognize same-sex marriages as spouses for purposes of these laws. Additional guidance is needed."
Retroactive Benefits
Another question is whether employees can claim benefits retroactively—for instance, seeking past tax relief for spousal health care benefits—if they've been married to their same-sex spouse in a state that recognizes same-sex marriage. Solomon observed: "It is certainly not clear yet, but I would think employees should be able to amend tax returns for open years to claim refunds. And employers should be able to get refunds of FICA taxes for prior open years."
Retroactivity “is one of the most important practical questions facing employers and plan sponsors" following the DOMA ruling, added Joanne Youn, an ERISA and benefits law attorney at Caplin & Drysdale in Washington, D.C. "While the court did not specifically address retroactivity broadly, the decision arose out of a claim for refund of estate taxes paid by a same sex-spouse in a prior tax year. The IRS has authority under existing law to grant relief from retroactivity; however, even if it were to do so, its authority would not extend to other statutes affecting employee benefits, such as ERISA. The decision itself references the fact that over 1,000 federal laws contain provisions specifically applicable to spouses that may be affected and should be coordinated. Therefore, I would expect that additional guidance will be issued in the coming months.”
Deferring to State Law
Rita F. Lin, a partner at Morrison Foerster in San Francisco, said that many federal laws governing spousal benefits do not contain a statutory definition indicating which law governs whether an individual is “married.”
"Typically, federal laws defer to state law on this issue,” Lin explained, “but it will often be an open question under choice-of-law principles whether the applicable state law is the law of the state in which the couple was married or the state in which the couple currently resides. Some federal statutes (e.g., Social Security) look to whether a couple is married at the time that benefits are sought, which may suggest that the law of the state of current residence will apply. Others (in the immigration context) look to the state where the couple was married."
Lin revealed that there are "rumors that the administration may be considering an executive order that directs federal agencies, in interpreting federal statutes, to treat the state where the marriage celebration occurred as the governing state for purposes of determining whether couples are married.” She added: “I would note that, though there may be some short-term confusion, this is not technically a new issue. The states vary in their definitions of marriage on issues like common-law marriage, first-cousin marriage and age of eligibility, so this could always be an issue when married couples move to a new state that does not recognize their marriage. Of course, the issue is now going to be presented on a much larger scale than before, so we may see an attempt to resolve this in a more uniform fashion."
Presidential Action
Similarly, Hunter T. Carter, a litigation partner at Arent Fox in New York and Washington, D.C., said: "The president is crucial to implement the Supreme Court decision overturning DOMA, and employers will be watching to see what the president does. Everywhere he can do so, President Obama is expected to approve regulations and interpretations that apply the term 'spouse' to same-sex couples who were legally married, regardless where the couple was from or has moved."
Changing regulations that define "spouse" may take longer than an executive order, Carter said, "but again, President Obama will be crucial. Currently, the IRS and Social Security determine marriage status by where the couple lives, not where they married, so anyone in the 38 states that don't yet recognize or allow same-sex marriage will be unmarried for IRS and Social Security purposes until regulations can be changed. This is true even though they are otherwise identical to their neighbors who may have married in another state, like New York, which also allows same-sex marriage. Other agencies will not need to change, like the Defense Department, which interprets marital status based on where the couple was married."
Ways to improve employee benefits communications
Original article from https://www.businessinsurance.com
Benefit management experts' recommendations for improving employee benefit communications
DO
• Make it relevant: “Instead of one version of the information that contains everything an employee could ever want to know, regardless of their situation, why not create multiple versions of that information tailored to the specifics of your business units or demographic groups,” said Ruth Hunt, a Minneapolis-based principal at Buck Consultants L.L.C.
• Scale down, if necessary: Where larger employers may roll out robust Web platforms loaded with plan information and decision-support tools, smaller employers could distill their content down to a few pages of key information alongside a blog or online newsletter. “It doesn't have to be flashy,” said Jennifer Benz, founder and CEO of San Francisco-based Benz Communications. “People want really simple, actionable information, and that's certainly within the realm of what most small and midsize employers can support.”
DON'T
• Flood them with jargon: “Keep things simple, and in as plain a language as possible,” Ms. Benz said. “Benefit managers usually assume a much higher level of understanding among employees in terms of how health care works. Additionally, your corporate counsel is going to want to be very cautious and make doubly sure that the communications are legally compliant, even at the expense of basic understandability.”
• Wait for annual enrollment: “One of the biggest missteps we see, especially among mid-market employers, is treating annual enrollment like it's the Super Bowl,” said Joann Hall Swenson, health engagement best practice leader at Aon Hewitt in Minneapolis. “It might be compliant with the law and it might get people enrolled in your benefit plan, but it's not going to drive any of your employees to get healthier. Instead, what if you spread some of that money and effort over the course of the full year, and focus your communications on actually helping people use the benefit plans?”
• Tell them what they already know: “What we've found is that consumers already know what to do to be healthier,” Ms. Swenson said. “About 90% of employees can recite to you that they should eat right, exercise, not smoke, etc.”
Employers taking 'bold steps' with health benefits
https://www.benefitspro.com/2013/03/04/employers-taking-bold-steps-with-health-benefits
By Kathryn Mayer
Don’t count on employers to stop offering health benefits altogether, but do count on big changes in how they offer the benefits.
That’s the main finding from recent analysis by Aon Hewitt. The vast majority of large and mid-size U.S. employers — 94 percent — say they’ll continue to offer health benefits to their employees in the next three to five years, but almost two-thirds plan to move away from a traditional “managed trend” approach to one that requires participants to take a more active role in their health care planning.
The consulting firm surveyed nearly 800 large and mid-size U.S. employers covering more than 7 million employees.
“The health care marketplace is becoming increasingly complex,” says John Zern, executive vice president for Aon Hewitt. “New models of delivery, new approaches to managing health and new compliance requirements are challenging employers to think differently about their role in owning health insurance responsibilities for employees and their dependents.”
Aon Hewitt says the amount employers spend on health care has increased by 40 percent in the past six years to approximately $8,800 per employee. Meanwhile, employee premium and out-of-pocket costs have increased 64 percent to almost $5,000 per year. Aon Hewitt estimates that health care costs for both employers and employees will continue to rise 8 percent to 9 percent per year for the foreseeable future.
Zern says though employers are staying in the health benefits game, they are taking “bold and assertive steps to achieve more effective results” — and they are doing so at a faster pace than has been seen in previous years.
Almost 40 percent of employers expect to migrate toward a “house money/house rules” approach in the next three to five years. For example, participants who take health risk questionnaires and biometric screenings may be rewarded in the form of lower premiums or access to broader health coverage. Other employers may waive prescription drug co-pays if an employee demonstrates they are following their doctor’s orders with regard to a chronic condition. Lastly, some leading-edge employers are working with health plans to incentivize participants to use a small provider network of high quality, cost-efficient providers, Aon Hewitt finds.
Though just 6 percent of employers plan to exit health care completely in the next three to five years, 28 percent say they’re planning to move to a private health care exchange.
Jim Winkler, chief innovation office the U.S. Health & Benefits practice at Aon Hewitt, says that private exchanges are an “increasingly attractive option” to organizations that want to offer employees health care choice while lowering future cost trends and lessening the administrative burden associated with sponsoring a health plan.
“The allure of exiting completely is strong until you look at the numbers,” Winkler said. “Between the Affordable Care Act penalties for failing to offer coverage and the ensuing talent flight risk, most employers believe they need to continue to play a role in employee health, but want a different and better outcome.”
5 Steps to Assess Employees' Benefits Eligibility Under PPACA
Source: https://ebn.benefitnews.com
By Laurie S. Miller
"Health care reform is overrated," a broker responded flippantly to his (now former) employer-client after the employer initiated the call. "I'll email you a one-page cheat sheet." The client had reached out to his broker following a two-hour presentation about the impact of health care reform from the broker's competitor. This was the same broker who, for the last two years, had faxed over the client's renewal and had delegated the servicing of the employees to the client's bookkeeper. Shaking his head, the client hung up the phone, then dialed his broker's competitor and moved the business.
Consulting firms around the nation have deployed significant resources and compliance teams to help clients proactively manage the strategic, financial and operational impact of the Patient Protection and Affordable Care Act. There are significant penalties for noncompliance so it is important that employers keep up with the regulations. In addition, employers may see increased enrollment as employees seek to comply with the individual mandate, which requires coverage.
Eligibility for coverage is one area that employers need to assess. PPACA defines a full-time employee as working 30 hours per week. Many employers currently set their eligibility threshold at a higher level, such as 35 or 40 hours a week.
"We could potentially have 40 new enrollees on our plan," pointed out one human resources executive at a recent health care reform seminar, as she weighed the cost impact.
If your plan defines eligibility as greater than 30 hours a week or excludes certain classes of employees (for example, a nine-month non-certified employee at a school vs. a 12-month employee), this is the time to assess the impact of the legislation and determine an action plan. Here's a checklist to get you started:
1. Review employees who currently waive the plan. Model potential plan costs if these employees join the health plan.
2. Review employees who are currently ineligible due to higher eligibility thresholds (greater than 30 hours per week.) Assess the financial impact of newly eligible employees joining the health plan.
3. Review variable-hour employees. If they exceed an average of 30 hours a week during the measurement period, they may be eligible for benefits.
4. Are partial-year employees eligible for coverage? (i.e., nine-month employees who don't work during the summer months?) If currently excluded, assess potential impact if they exceed 30 hours per week.
5. Review seasonal employees. Do they exceed 120 days per year? They may be eligible for benefits.
There are many other components to developing a strategic approach to health care reform. Look for a broker that offers a proprietary financial modeling tool that can help your company determine a cost-effective strategy for the future.