Despite Delayed Key Provision, Health Care Reform Triggers Benefits Action Among Employers
Originally posted March 03, 2014 on https://www.voluntary.com
Employers report impact on benefits funding, opening opportunity for voluntary benefits
NEWARK, N.J.--(BUSINESS WIRE)--With Affordable Care Act deadlines imminent in 2014 and 2015, employers are reporting the increased impact of health care reform on various aspects of employee benefits. According to Health Care Reform: Full Steam Ahead, the first in a series of five research briefs based on The Prudential Insurance Company of America’s (Prudential’s) Eighth Annual Study of Employee Benefits: Today & Beyond, nearly half (49%) of employers report they are extremely or very likely to make a high-deductible health plan their only health insurance option.
“The Affordable Care Act could very well usher in a new era for and emphasis on voluntary benefits. More employers are utilizing them for recruiting and retaining talent and employees increasingly view them as a cost-effective way to protect their families’ financial futures.”
“Although employers anticipate scaling back benefit offerings due to cost considerations, there’s great opportunity for them to offer voluntary benefits in order to continue providing attractive benefits to their employees,” said Vishal Jain, vice president, Strategy, Planning and Business Insights, Prudential Group Insurance. “The Affordable Care Act could very well usher in a new era for and emphasis on voluntary benefits. More employers are utilizing them for recruiting and retaining talent and employees increasingly view them as a cost-effective way to protect their families’ financial futures.”
According to the report, 73% of employers say the law is having an impact on benefits service and support and 69% report there is an impact on benefits communications. “With a shifting benefits landscape, carriers are now focused on being a trusted resource for employers while offering a full spectrum of services such as enrollment communications, benefits education, record keeping, and administrative services,” Jain said.
In addition to highlighting the law’s potential impact on voluntary benefits, health insurance exchanges central to the legislation are top of mind for employees surveyed. Key findings include:
Employees are increasingly confident more Americans will be covered under the Affordable Care Act (43%, up 7 percentage points from 2012). An expanding number feel fewer employers will offer health insurance (44%, a 13 percentage point increase from 2012), and 38% of those employees believe their employer will drop coverage.
Most employees report having neither a favorable nor unfavorable opinion toward both public and private exchanges.
About one-third of employees report they have heard of but know little about public or private exchanges while one-in-five say they have never heard of either before the survey.
“As employers evaluate the implications of public and private exchanges, the importance of their partnerships with carriers will continue to grow. Employers will look for carriers that provide value, make benefits administration easier, help employees make better benefit decisions, and provide excellent customer service,” said Jain. “We’re poised to support our customers with innovative and cost-effective benefit solutions, coupled with a full array of services designed to improve employees’ financial wellness.”
People may keep old health insurance another year
Originally posted March 05, 2014 on https://www.usatoday.com
WASHINGTON — Americans can buy insurance policies that don't meet the requirements of the Affordable Care Act for another year, if their states' insurance regulators allow them to renew their policies this year, administration officials said Wednesday.
The change represented another midcourse correction for the law, which is still recovering from the flawed opening of the federal and state health care exchanges last Oct. 1 and the delay of several key provisions. Last July, the administration delayed the requirement that businesses provide health insurance for their employees, and President Obama said in November that those with pre-ACA insurance plans could keep them if they wanted.
"These policies implement the health care law in a common-sense way by continuing to smooth the transition for consumers and stakeholders and fixing problems wherever the law provides flexibility," Health and Human Services Secretary Kathleen Sebelius said Wednesday.
The law originally required that everyone buy a policy that complied with its requirements in 2014. That meant skimpy plans, which sometimes cost more in premiums than the coverage they provided, had to be replaced by plans that included hospital stays and prescription benefits, as well as other basic benefits. The change came following political backlash after Obama told people that they would be able to keep the same health care plans after the law was enacted.
Obama offered insurers the option to continue to offer the old plans, though some states chose to mandate ACA-compliant insurance. The new rule states that individuals and small groups may continue to renew old policies up to or beginning Oct. 1, 2016.
The number of people in those policies is dropping, Sebelius and other officials said, but they wanted to give insurers time to make sure consumers knew about the options they have through the state and federal exchanges. Officials said that applies to about only 500,000 people.
It's still hard to determine how many people have moved to compliant plans because people are buying insurance both through the exchanges and through insurance companies, Sebelius said.
The delay should be made permanent, said Sen. Mary Landrieu, D-La.
"The administration's action today is a step toward keeping the promise that was made to the American people that if they liked their health plan, they could keep it," said Landrieu, a supporter of the law who faces a tough re-election fight this fall. "And I intend to hold the administration to that promise."
Officials also announced that employers that self-insure would be able to report insurer and employer provisions in one stream-lined form, as well as allowing the option of reporting which employees "may be" full-time, as opposed to "are" full-time.
"Today's announcement is part of the administration's effort to provide certainty and early guidance about major health policies so employers, small business owners and other individuals can plan for 2015," said Assistant Secretary for Tax Policy Mark J. Mazur. "Treasury's final rules significantly streamline and simplify information reporting while making it easier for employers and insurers of all sizes to provide the quality, affordable health coverage that every American deserves."
This affects 4% of employers officials said, but comes in response to concerns that the process was time-consuming for those employers.
HHS also announced more protections for insurers who based premium prices on the assumption customers would shift from old plans to newer ones that met the law's requirements. It simplified reporting requirements for employers. The changes are part of a review of regulations required to implement the law, officials said, and reflect the experiences from earlier changes.
They also announced:
• Open enrollment for 2015 will begin Nov. 14, 2014, and end Feb. 15, 2015, so that insurers have more time to prepare.
• States have until June 15, rather than Jan. 1, to have a approved blueprint in place to transition to a state-based marketplace.
• That the cost-sharing limits for individuals for 2015 will be $6,600 and $13,200 for families.
• Allows federal SHOPS to offer stand-alone dental plans or a choice of plans, and allows employers to provide different contribution rates for full-time and part-time employees after 2015.
Changes to the enrollment period will give people more time to sign up after the holidays, said Brian Haile, senior vice president for health policy at Jackson Hewitt Tax Service Inc. It will also give them a chance to see how not having insurance in 2014 will affect their taxes, assuming they file early. Beginning in 2014, people who don't have health insurance must pay a fine when they file their taxes in early 2015.
Officials said they expect no more major announcements for the rest of the year, and that March 31 will remain the last day people may sign up for health insurance in 2014.
Budget proposal phases out some PPACA funding
Originally posted March 04, 2014 by Allison Bell on https://www.lifehealthpro.com
Managers of some new Patient Protection and Affordable Care Act (PPACA) programs will have to wean themselves off of PPACA startup funding.
The Obama administration has included cuts in several sources of the PPACA grant money that has been flowing into state government and state public health insurance exchange offices the past few years.
The administration posted the proposal on the White House website today.
The budget would affect spending in fiscal year 2015, which starts Oct. 1.
An appendix that gives some details on the U.S. Department of Health and Human Services (HHS) funding proposal shows that outlays on state regulators' commercial health insurance premium review operations would fall to $50 million, from $80 million this year.
Gross spending on the Pre-existing Condition Insurance Plan (PCIP) program -- a "risk pool" program for people who could not qualify to buy conventional major medical coverage before the PPACA ban on use of personal health status information took effect -- would fall to 0, from about $1 billion this year.
Total new budget obligations for PPACA public exchange construction would fall to $836 million, from $1.3 billion, and gross outlays would fall to $1.9 billion, from $2.4 billion.
New budget obligations for Consumer Operated and Oriented Plan (CO-OP) carriers -- the new member-owned, nonprofit carriers created by PPACA -- would drop to zero, from $221 million this year.
Elsewhere in the administration's budget proposal:
- Obligations for tax credit subsidies for private PPACA exchange plans -- "qualified health plans" (QHPs) -- and for QHP cost-sharing subsidies could increase to $60 billion, from $38 billion for 2014 and from nothing last year.
- Spending on a new, temporary, PPACA "risk corridor" program -- a program that's supposed to protect QHP issuers against underwriting losses -- could total $5.5 billion. The risk corridors program is supposed to be funded mainly by health insurers in the commercial individual and small group markets that earn underwriting profits, but the federal government may have to chip in if the entire individual market and the entire small-group market do poorly.
- Two of other PPACA "3 R's" risk management programs -- the temporary PPACA reinsurance program and a permanent risk adjustment program -- are supposed to get their money solely from insurer contributions. The reinsurance program would get $20 million for administration and pay out about $10 billion in reinsurance payments. The risk administration program would start with $3.4 billion in budget authority.
- Families in the top 3 percent in terms of taxable income would face a 28 percent cap on their ability to use itemized deductions and some other tax breaks to reduce tax liability. The cap would apply to employers' group health and retirement plan contributions.
Final Employer ACA Regs from IRS Provide Transition Relief to Mid-Sized Employers
Originally posted on https://www.ifebp.org
The Internal Revenue Service (IRS) issued final regulations implementing the employer responsibility provisions under the Affordable Care Act (ACA) that take effect in 2015.
The final rules implement the employer shared responsibility provisions of the ACA, under section 4980H of the Internal Revenue Code. The rules make a number of changes in response to input on the proposed regulations issued in December 2012.
Highlights of the rules include addressing a number of questions about how plans can comply with the employer shared responsibility provisions; ensuring that volunteers such as firefighters and emergency responders do not count as full-time employees; and phasing in provisions for businesses with 50 to 99 full-time employees and those that offer coverage to most but not yet all of their full-time workers.
The final rules provide, for 2015, that:
- The employer responsibility provision will generally apply to larger firms with 100 or more full-time employees starting in 2015 and employers with 50 to 99 full-time employees starting in 2016.
- To avoid a payment for failing to offer health coverage, employers need to offer coverage to 70 percent of their full-time employees in 2015 and 95 percent in 2016 and beyond, helping employers that, for example, may offer coverage to employees with 35 or more hours, but not yet to that fraction of their employees who work 30 to 34 hours. (Proposed regulations would have required employers to offer coverage to 95 percent of their full-time employees in 2015.)
Various Employee Categories
The final regulations provide clarifications regarding whether employees of certain types or in certain occupations are considered full-time, including:
- Volunteers: Hours contributed by bona fide volunteers for a government or tax-exempt entity, such as volunteer firefighters and emergency responders, will not cause them to be considered full-time employees.
- Educational employees: Teachers and other educational employees will not be treated as part-time for the year simply because their school is closed or operating on a limited schedule during the summer.
- Seasonal employees: Those in positions for which the customary annual employment is six months or less generally will not be considered full-time employees.
- Student work-study programs: Service performed by students under federal or state-sponsored work-study programs will not be counted in determining whether they are full-time employees.
- Adjunct faculty: Based on the comments received, the final regulations provide as a general rule that, until further guidance is issued, employers of adjunct faculty are to use a method of crediting hours of service for those employees that is reasonable in the circumstances and consistent with the employer responsibility provisions. However, to accommodate the need for predictability and ease of administration and consistent with the request for a “bright line” approach suggested in a number of the comments, the final regulations expressly allow crediting an adjunct faculty member with 2 ¼ hours of service per week for each hour of teaching or classroom time as a reasonable method for this purpose.
U.S. Treasury Press Release
U.S. Treasury Fact Sheet
IRS Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act
Look Out for the ACA’s ‘Double Whammy’ in 2016
Originally posted January 21, 2014 by Daniel Hood on https://eba.benefitnews.com
While they are currently exempt from the employer mandate to provide insurance and not considered part of the “Small Group Market”, small businesses with between 50 and 100 employees will find that all that changes for the worse in 2016, according to Mark Dietrick, CPA, ABV, author of The Financial Professionals Guide to Healthcare Reform and past chair of the American Institute of CPAs’ National Healthcare Industry Conference Committee.
Speaking in an American Institute of CPAs’ online conference, “Health Care Reform: A Deep Dive into the Affordable Care Act,” Dietrich explained that by 2016 the employer mandate will kick in for companies with between 50 and 100 employees, and they will be moved into the “Small Group Market” for insurance coverage.
In the Small Group Market, insurers charge higher premiums, not least because, “It’s cheaper to insure 200 people under a single contract than it is to insure 40 groups of five under 40 contracts, or 200 individuals” Dietrich said. While the group had previously been for companies with 50 or fewer employees, the ACA raised the limit to 100 employees — though the increase was put off to 2016 because the law gave states the option to postpone, which they all took.
It is one of the “least understood” parts of the ACA, Dietrich said. “By 2016, those with between 50 and 100 employees will be pushed into the Small Group, where the rates are higher. They need to think about it now, or they will be facing rate shock.”
“The reason they’re forcing these people into the Small Group Market is to expand the actuarial base and to absorb some of the expected losses,” he said. At the same time, Small Group premiums are likely to rise even more, he said, because of the benefit requirements in the ACA, which limit deductibles and don’t allow insurers to turn down those with pre-existing conditions.
Worse yet, he warned, states may eventually merge the Small Group Market with the markets for individuals. “If states don’t get the enrollment of young people that they expect [to make state insurance exchanges viable], then the likelihood of states combining the Small Group and individual markets will go up.”
If the two are merged, premiums will likely rise even more. Among other things, individual deductibles tend to be higher, but the ACA caps deductibles.
Possible Solutions
Dietrich noted that these rules don’t apply to the Large Group Market – and to companies that are self-insured.
“Virtually every large company in the country is self-insured,” he explained. “They insure them themselves, but work through an insurance company. … Ordinarily, I wouldn’t have suggested self-insuring for a business with less than 100 employees, but the insurance industry is offering new products to help companies escape some of the more burdensome requirements of the ACA.”
He’s seen a similar change in previous circumstances -- specifically under the health insurance reform program instituted early in the decade in Massachusetts, which many cite as the model for the ACA: “The pattern of looking for self-insurance has been running in Massachusetts for eight years.”
“Play or Pay” Rules Delayed Until 2016 for Smaller Employers
Originally posted by https://blog.thinkhr.com
The Department of the Treasury and the Internal Revenue Service announced today that the Affordable Care Act’s health coverage mandate for employers with more than 50 employees but fewer than 100 employees working at least 30 hours per week will be delayed another year until 2016.
Employers with over 100 employees working at least 30 hours per week will become subject to the health coverage mandate under the Affordable Care Act (ACA) as previously announced beginning in January 2015. If these employers decide not to offer insurance to their employees, they will make an employer shared responsibility payment beginning in 2015 to help offset the costs to taxpayers for employees getting tax credits through the Health Insurance Marketplace.
“While about 96 percent of employers are not subject to the employer responsibility provision, for those employers that are, we will continue to make the compliance process simpler and easier to navigate,” said Assistant Secretary for Tax Policy Mark J. Mazur in the Treasury press release. “Today’s final regulations phase in the standards to ensure that larger employers either offer quality, affordable coverage or make an employer responsibility payment starting in 2015 to help offset the cost to taxpayers of coverage or subsidies to their employees.”
Today’s announcement included final regulations for implementing the employer shared responsibility provisions under the ACA, often referred to as the “Play or Pay” rules that will take effect in 2015.
To avoid this payment for the failure to offer affordable coverage meeting the minimum requirements as set forth in the regulations, these large employers will need to offer coverage to 70 percent of their full-time employees in 2015 and 95 percent starting in 2016. Full-time employment is defined as regularly working at 30 or more hours per week.
The immediate practical impact for employers includes:
- For employers with fewer than 50 employees: No impact, as this group was not subject to the employer shared responsibility provisions previously.
- For employers with 50 to 99 employees: For employers in this group that do not provide full-time employees with quality affordable health insurance, they will not have to pay any employer responsibility penalties in 2015. For 2015, this group will still be subject to provide an employee and coverage report as outlined in the ACA rules but will have until 2016 before the employer responsibility payments begin.
- For employers with 100 or more employees: Employers in this group are still subject to the mandate starting in 2015. What follows below are the highlights of the final regulations released today impacting the mandate for these employees to comply in 2015.
Key Elements of the Final Rules Impacting Employers with 100+ Employees in 2015
According to the Treasury Department Fact Sheet, the final regulations include the following changes:
- Coverage Thresholds: To avoid a payment for failing to offer health coverage, employers need to offer coverage to 70 percent of their full-time employees in 2015 and 95 percent starting in 2016. The original ACA rules required the 95 percent coverage beginning immediately.
- Full-time Employee Definitions:
- Volunteers: Bona fide volunteers for a government or tax-exempt entity, such as volunteer firefighters and emergency responders, will not be considered full-time employees.
- Educational employees: Teachers and other educational employees will not be treated as part-time for the year simply because their school is closed or operating on a limited schedule during the summer.
- Seasonal employees: Those in positions for which the customary annual employment is six months or less generally will not be considered full-time employees.
- Student work-study programs: Service performed by students under federal or state-sponsored work-study programs will not be counted in determining whether they are full-time employees.
- Adjunct faculty: Until further guidance is issued, employers of adjunct faculty are to use a method of crediting hours of service for those employees that is reasonable in the circumstances and consistent with the employer responsibility provisions. However, to accommodate the need for predictability and ease of administration and consistency, the final regulations expressly allow crediting an adjunct faculty member with 2 ¼ hours of service per week for each hour of teaching or classroom time as a reasonable method for this purpose.
- Full-time Employee Measurements: The final rules remain unchanged from the proposed rules that allow employers to use an optional look-back measurement method to determine whether employees with varying hours and seasonal employees are full-time. On a one-time basis, in 2014 preparing for 2015, plans may use a measurement period of six months even with respect to a stability period – the time during which an employee with variable hours must be offered coverage – of up to 12 months.
- Affordability Safe Harbors: As with the proposed regulations, the final rules provide safe harbors for employers to determine whether the coverage they offer is affordable to employees, including the W-2 wages, employees’ hourly rates, or the federal poverty level.
- Other Provisions of the Final Regulations:
- Employers first subject to shared responsibility provision: Employers can determine whether they had at least 100 full-time or full-time equivalent employees in the previous year by reference to a period of at least six consecutive months, instead of a full year.
- Non-calendar year plans: Employers with plan years that do not start on January 1 will be able to begin compliance with employer responsibility at the start of their plan years in 2015 rather than on January 1, 2015, and the conditions for this relief are expanded to include more plan sponsors.
- Dependent coverage: The policy that employers offer coverage to their full-time employees’ dependents will not apply in 2015 to employers that are taking steps to arrange for such coverage to begin in 2016.
Treasury and the IRS stated that additional final regulations will be forthcoming to streamline the ACA reporting requirements. Final rules will be published in the Federal Register on February 12th. We will continue to provide updates as more information is known.
For more information:
Treasury Press Release: https://www.treasury.gov/press-center/press-releases/Pages/jl2290.aspx
Treasury Fact Sheet: https://www.treasury.gov/press-center/press-releases/Documents/Fact%20Sheet%20021014.pdf
IRS Regulations (227 pages): https://s3.amazonaws.com/public-inspection.federalregister.gov/2014-03082.pdf
Taking A Strategic Look at Health Insurance and PPACA
Originally posted February 05, 2014 by Thom Mangan on https://eba.benefitnews.com
I checked in with Peter Freska, CEBS, Benefits Advisor with UBA Partner Firm, The LBL Group, and asked him what he’s seeing in the employer-sponsored insurance marketplace. Peter specializes in the large employer market and emphasizes long-term strategic planning to his clients.
Thom: Peter, what are you seeing as the top questions on employers’ minds as they begin to plan (if they have not already) for how best to adapt to the changing health insurance market?
Peter: Healthcare.gov offers some interesting insight into what business owners are asking, with the following questions:
While these questions may be a good place to start, employers are still faced with rising insurance premiums and reduced benefits. Planning for next year has always been important, but unfortunately, many employers only look as far ahead as the next renewal. The health care landscape is rapidly changing. With the current insurance companies re-filing new plans and networks, and new companies trying to break into the health insurance market and the continued vertical and horizontal integration of health care delivery systems — well, the times they are a-changin’.
Thom: What, currently, is the most pressing aspect of health care reform in the eyes of many employers?
Peter: As it sits, the “Cadillac Tax” legislation that’s slated to take effect on January 1, 2018.
Employers who provide health plans that are too rich (“Cadillac plans”) must pay a non-deductible 40% excise tax on the value of health plan coverage that exceeds $10,200 (indexed) for individual coverage and $27,500 (indexed) for family coverage. Value is based on both employer and employee contributions for medical coverage, health FSAs, HRAs, onsite clinics and employer HSA contributions.
Thom: Yes, according to the most recent UBA Health Plan Survey, employers in the Northeast are particularly at risk of facing the “Cadillac Tax” because of their high annual cost per employee (total cost). The Northeast has the highest total cost in the country at $10,808 per employee, which also saw the largest increase in cost at 5.35% (mostly because they still offer low deductible plans). The Southeast, however, remains the lowest cost region at $7,846 per employee with a renewal of 1.98%. A combination of non-deductible plans in the Northeast with a prevalence of massive state-mandated benefits is what’s driving the high costs of the Northeast (if fully insured).
So this impending tax poses some interesting questions for employers. What are they doing to prepare for this event?
Peter: Good question, Thom. Some wonder if they even should plan for this event! Many feel that these limits are too low, as there are plans today that exceed these numbers. Others feel that the inflation rate that the health plan values are indexed to after 2018 (CPI-U + 1%) is too low, stating that it does not meet medical inflation rates (Health Policy Briefs – Excise Tax on ‘Cadillac’ Plans).
But ultimately, when coming face-to-face with this excise tax, businesses will have to get their costs under control in order to avoid it. The question is, how do they do that?
We’ll likely see more of the same that they have done for many years: more managed care and cost shifting through contribution and benefit changes. The question that remains is, “will this be enough?” As medical costs continue to rise and more minimum value plans are offered by employers, when will the wiggle room be gone?
Employers with a strategic viewpoint are working with their trusted advisor to review the possibilities. They are strategizing on options now so that they are prepared for what lies ahead. There might be changes to the “Cadillac Tax,” but this is only one of several taxes under PPACA. Additionally, there are employer reporting requirements going into effect. Employers have more to manage than ever before. It is more important than ever to partner with an advisor that understands these new responsibilities, and is able to work with an employer to meet their goals. Always review the scope of work from an advisor to make sure it can align with the strategic goals of the organization. With or without PPACA, this is how an employer can make a difference in how it provides benefits.
Thom: Yes, although challenging, it’s an exciting time to be a benefits advisor. Thank you, Peter, for sharing this information.
Economists see little effect on hiring from ACA
Originally posted January 27, 2014 by Carolos Torres on https://ebn.benefitnews.com
The vast majority of U.S. companies said the implementation of the Obama administration’s health care law will have no effect on their businesses or hiring plans, according to results of a poll issued Monday.
About 75% of those surveyed said the Affordable Care Act hasn’t influenced their planning or expectations for 2014, according to data from the National Association for Business Economics. Twenty-one percent of 64 respondents said that the law would have a negative impact on business conditions and 5% said it will be positive.
Most, 85%, also said the law wouldn’t prompt a change in their hiring practices, according to the survey. Some 6% said it would lead to more employment of part-time help and fewer full-time staff, while 8% said it would lead to less hiring of all types of workers.
Participants were also sanguine about changes in Federal Reserve monetary policy, with 70% saying tapering of record stimulus would have no effect on profitability, and the remaining split almost evenly between positive and negative implications for earnings. An overwhelming majority of participants, 94%, said uncertainty regarding what direction policy makers would take prompted no change in capital investment plans.
“A significant majority of survey respondents anticipate little material impact on business conditions from the implementation of the Affordable Care Act or from possible changes in the Federal Reserve’s accommodative monetary policy stance,” Jack Kleinhenz, NABE president and chief economist at Kleinhenz and Associates in Cleveland Heights, Ohio, said in a statement. “On net, survey respondents are more optimistic in their economic outlook and, regardless of any changes in monetary policy, expect their firms’ performance in 2014 will be superior to that in 2013.”
Top 3 voluntary products poised for takeoff in 2014
Originally posted January 06, 2014 by Caitlin Bronson on https://www.ibamag.com
As small businesses and individuals consider their healthcare strategies within the context of the Affordable Care Act, several industry research bodies suggest voluntary benefits and services will emerge as a boom market for producer sales in the next five years.
According to the Towers Watson 2013 Voluntary Benefits and Services Survey, the importance of voluntary products in a company’s rewards strategy will grow 27% in that timeframe, while nearly 90% of producers surveyed by Eastbridge Consulting Group said they expect sales of voluntary benefit plans to increase.
While the most common voluntary products like vision, dental and disability will continue to see stable sales, however, Towers Watson said the following three are the ones to watch in 2014.
If you’re not already offering these plans, now may be the time to make a concentrated push for clients looking to expand their rewards strategy in a cost-effective way.
Critical Illness
Small businesses with fewer than 50 employees are not required to offer employee medical coverage under the Affordable Care Act, but many are looking to provide some sort of benefit plan to attract and retain quality workers.
As such, Towers Watson expects affordable medical benefits like critical illness or accident insurance to increase in sales in the upcoming two years. In a survey of small business employers, Towers Watson found 8% plan to introduce a critical illness plan in 2014 and another 13% are considering such a plan in 2015.
Accident plans are already popular, but another 9% of survey respondents said they are considering adding one by 2015.
This tallies with the experience of Tye Elliott, vice president for core broker sales with Aflac.
“Critical illness and accident plans have been thought of as secondary, but that’s not the case anymore,” Elliot said. “Small businesses want to invest in their employees, but they want to do it practically. At a very small out-of-pocket cost, [critical illness benefits] are amazing in terms of the loyalty that builds among your clients.”
Financial Counseling
Nearly 20% of small businesses told Towers Watson they were considering adding financial counseling benefits within the next two years, particularly during this fall’s 2014 enrollment season.
Towers Watson expects employers will want to increase workers’ retirement and personal finance knowledge as the burden of financial planning falls increasingly to individuals, who pay as little as $5 to $20 a month for such benefits.
Financial counseling can even be paid solely by employees through payroll deferral, meaning no cost for employers and increased ease and peace of mind for workers.
Identity Theft Protection
With widely publicized cyber breaches like the ones that afflicted Target and Snapchat this holiday season, identity theft protection is going to be a hot item in 2014.
In fact, a recent poll from LifeLock indicated nearly 60% of producers have fielded requests from commercial clients on identity protection benefits.
Like other voluntary packages, identity theft protection is available at a generally low cost to employers. Average coverage ranges from $7 to $20 a month, with most policies offering coverage of up to $1mn.
Greg Meyer of N.C.-based Worksite Benefit Advisors said the real market for producers is in small- to medium-sized businesses, as larger employers are often targeted directly by vendors. An effective pitch from an educated agent could do wonders.
“Brokers really need to show employers the impact that ID theft plays on lost productivity caused by ID theft of an employee,” Meyer said. “If you have an employee whose identity is stolen on the road, this not only impacts that company’s corporate credit card account, it impacts productivity because the road warrior will be off the road coping with the stress and drama that goes along with trying to recover and recoup his or her credit.”
According to Towers Watson, 20% of small businesses are considering adopting identity theft protection policies by 2015.
DOL issues FAQs on ACA's implementation
Originally posted January 23, 2014 by Ilyse Wolens Schuman on https://ebn.benefitnews.com
The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued the latest in its series of Frequently Asked Questions (FAQs) on the Affordable Care Act’s (ACA) implementation. The latest guidance (Part XVIII) addresses questions on coverage of preventive services and limitation on cost-sharing requirements under the ACA. The FAQs also provide guidance on expatriate plans, wellness programs, fixed indemnity insurance and the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).
Preventive Services
With respect to preventive services, the ACA requires non-grandfathered group health plans and health insurance coverage offered in the individual or group market to provide benefits for, and prohibit the imposition of cost-sharing requirements with respect to, the following:
Evidenced-based items or services that have in effect a rating of "A" or "B" in the current recommendations of the United States Preventive Services Task Force (USPSTF) with respect to the individual involved, except for the recommendations of the USPSTF regarding breast cancer screening, mammography, and prevention issued on or around November 2009, which are not considered current;
Immunizations for routine use in children, adolescents, and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention (CDC) with respect to the individual involved;
With respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA); and
With respect to women, evidence-informed preventive care and screening provided for in comprehensive guidelines supported by HRSA, to the extent not already included in the current recommendations of the USPSTF.
On September 24, 2013, the USPSTF issued new recommendations with respect to breast cancer. Accordingly, the FAQ explains that for plan or policy years beginning one year after September 24, 2014, non-grandfathered group health plans and non-grandfathered health insurance coverage offered in the individual or group market will be required to cover such medications for applicable women without cost sharing subject to reasonable medical management.
Cost-Sharing Limitations
The FAQs include a number of questions about the application of the ACA’s cost-sharing limitation. For plan years beginning in 2014, the annual limitation on out-of-pocket costs applicable to non-grandfathered group health plans and group health insurance coverage is $6,350 for self-only coverage and $12,700 for coverage other than self-only coverage. For subsequent plan years, the annual limitation on out-of-pocket costs will increase by the premium adjustment percentage described in the ACA. A previous FAQ provided guidance on out-of-pocket maximums for the first year of applicability where a group health plan or group health insurance issuer utilizes more than one service provider to administer benefits that are subject to the annual limitation on out-of-pocket costs. This latest guidance explains that for plan years beginning on or after January 1, 2015, non-grandfathered group health plans and group health insurance coverage must have an out-of-pocket maximum that limits overall out-of-pocket costs on all essential health benefits (EHB). In addition, plans and issuers are permitted to structure a benefit design using separate out-of-pocket limits, provided that the combined amount of any separate out-of-pocket limits applicable to all EHBs under the plan does not exceed the annual limitation on out-of-pocket maximums for that year. The FAQs clarify that a plan that includes a network of providers is not required to count an individual's out-of-pocket expenses for out-of-network items and services toward the plan's annual maximum out-of-pocket limit. A plan is not required to count an individual's out-of-pocket costs for non-covered items or services (such as cosmetic services) toward the plan's annual maximum out-of-pocket limit either.
Expatriate Plans
The FAQs include clarification of the temporary transitional relief exempting expatriate health coverage from certain ACA provision. For purposes of the transitional relief, an insured expatriate health plan is an insured group health plan for which enrollment is limited to primary insureds for whom there is a good faith expectation that such individuals will reside outside of their home country or outside of the United States for at least six months of a 12-month period and any covered dependents, and also with respect to group health insurance coverage offered in conjunction with the expatriate group health plan.
Wellness Programs
Final regulations regarding nondiscriminatory wellness programs in group health increased the maximum permissible reward under a health-contingent wellness program from 20% to 30% of the cost of coverage, and further increased the maximum permissible reward to 50% for wellness programs designed to prevent or reduce tobacco use. The DOL explains that the FAQs address several issues that have been raised since the publication of the final regulations.
If a participant is provided a reasonable opportunity to enroll in the tobacco cessation program at the beginning of the plan year and qualify for the reward (i.e., avoiding the tobacco premium surcharge) under the program, the plan is not required (but is permitted) to provide another opportunity to avoid the tobacco premium surcharge until renewal or reenrollment for coverage for the next plan year.
The FAQs describe a scenario in which a plan participant's doctor advises that an outcome-based wellness program's standard for obtaining a reward is medically inappropriate for the plan participant and the doctor suggests a weight reduction program (an activity-only program) instead. The FAQs explain that the plan does have a say with respect to how a weight reduction program is selected. The plan must provide a reasonable alternative standard that accommodates the recommendations of the individual's personal physician with regard to medical appropriateness. Many different weight reduction programs may be reasonable for this purpose, and a participant should discuss different options with the plan.
The final wellness regulations provided sample language that may be used to satisfy the requirement to provide notice of the availability of a reasonable alternative standard. The FAQs state that plans and issuers are permitted to modify this sample language to reflect the details of their wellness programs, provided that the notice includes all of the required content.
Mental Health Parity
With respect to mental health parity requirements, the guidance states that the ACA builds on the MHPAEA and provides that mental health and substance use disorder services are one of 10 EHB categories. Under the EHB rule, non-grandfathered health plans in the individual and small group markets are required to comply with the requirements of the parity regulations to satisfy the requirement to provide EHB.