Benefits 101: What Is an EAP?

Benefits 101: What Is an EAP?

As much as employers might prefer that employees’ personal affairs do not interfere with their work, the reality is that problems outside of the workplace can and do impact job performance.  Many of these issues go unaddressed due to fear of stigmatization, leading to further declines in employee health and productivity.  Anxiety and stress, financial troubles, substance abuse and other personal problems can also lead to increased absenteeism.  To help combat these issues, many employers offer a workplace benefit called an Employee Assistance Program (EAP) that is designed to help employees address everyday challenges.

What is an EAP?

An EAP provides voluntary, confidential services to employees who need help managing personal difficulties or life challenges. The idea is to address personal issues before they interfere with work performance. The employee assistance program is one of the top benefits employers offer in America—for a good reason. They are one way that companies support the well-being of their employees.  An EAP generally offers confidential assessment, short-term counseling, referrals and follow-up services for employees.

Typically, an EAP grants employees access to a set number of sessions with a therapist, and the employee would not accrue any co-pay, deductible, or other out-of-pocket costs for the service. For example, Nick has been struggling with depression. To sooth his anxiety, he has begun drinking every day. It’s gradually escalated to the point where he is late to work, has frequent absences, and is missing deadlines. He knows he needs to talk with someone who can offer him alcohol abuse resources. He accesses his company-sponsored EAP.

Meredith is a full-time, married employee with two small children and is also caring for her aging mother who suffers from Alzheimer’s.  She is constantly stressed due to the heavy burden of her daily life.  The schedule has left her exhausted and she misses work each month due to feeling burnt out.  She reaches out to her EAP counselor for time management and mental health tips.

Here are some other common services included in EAPs:

One reason behind the popularity of EAPs is that it’s a mutually beneficial program for employers and employees.  After all, your employees are the foundation of your company.  Healthy and happy employees are more productive and engaged in their jobs which is great for your company’s bottom line!

What Is a Total Rewards Package?

What Is a Total Rewards Package?

Total rewards packages refer to the compensation and benefits plans that companies offer. This phrase, however, extends beyond mere salary or wages and traditional benefits, like health insurance, to provide both recruits and employees with a rundown of what makes the employer special. Some in Human Resources might regard the total rewards package as the starting line for employee value proposition (EVP).

Here are the different components of a total rewards package:

Compensation

Compensation, which may refer to wages or salary, is the obvious main feature of the total rewards package. People get paid for their work, so they can afford housing, food, and the basic necessities of life. The money you’re paid to work may include the chance for bonuses and other merit-based rewards, in addition to salary or wages.

Basic Benefits

The most well-known benefits include health, vision, and dental insurance. People have come to expect some form of medical insurance for full-time employment in the United States. In fact, most rely on this benefit for their healthcare because private insurance is astronomically expensive without group membership, and the United States does not have a public option.

Retirement Plans

Offering 401(k) or IRA plans have also become the norm. Companies previously rewarded loyalty with pensions that could help people survive after employment ended. However, nowadays, pensions have been replaced by these other retirement plans, which rely on sometimes volatile markets. There are penalties for taking the money out of such accounts before retirement.

Paid Time Off (PTO)

Paid time off is not a given in every job. However, it refers to the time people are allowed to take vacation, recover from illness or injury, and celebrate holidays while still getting paid. This can include vacation days, sick days, and bank holidays.

Nowadays, some companies are getting creative with PTO. They may include shared days off, where the entire organization takes a break and gets paid. Or they might have unlimited PTO, which means people do not have to accrue or earn days based on seniority. Rather, they can take off when they need to without limit. In those cases, however, employers use an honor system to ensure people do not take advantage of the system.

Family Leave

This is key for new parents, those tending to loved ones who are ill or elderly, or those facing a longer-term illness themselves because they can take time off for care. However, family leave does not have to be paid. Approved family leave requires employers to hold the position for the person, but they do not have to be paid during that time off. It depends on whether they company offers pay for family leave. Many do pay for maternity leave for up to three months, and many others are offering paternity leave now, too. Assessing employment law is a necessity in these cases. And job applicants must do their due diligence when vetting potential employers if they think they may need leave at some point.

Learning and Development and Career Paths

Employees are seeking opportunities to learn, grow, and develop in their careers while on the job. Therefore, more employers are trying to offer training, classes, reimbursement for tuition or coursework, mentorship, leadership development, and other opportunities to gain skills necessary for raises and promotions. It will also help the individual and the employer remain relevant as the skills gap becomes more of a problem in the future of work.

Mental Health and Wellness Programs

For decades now, people have looked to their employers for gyms or gym membership. But now everyone is thinking beyond physical health to mental health as well. As a result, access to mental health help, employee assistance programs (EAPs), classes on mindfulness or yoga, apps for stress management, and more are on the table. Many employers are responding with a wealth of benefits related to wellness and well-being.

Free Food

Providing free lunches, snacks, or special occasion treats has been a hallmark of American companies. Many of the tech giants have campuses that provide services from dry cleaning to dental work, and free food in the cafeteria is a given. As employers try to convince people to return to the office in this post-pandemic era, they try to lure them with bagels or pizza or even other more gourmet options.

Work-Life Balance

Flexibility in where and/or when people work is going mainstream. As the gig economy gains steam, people expect to have more flexibility in their scheduling. Offering remote or hybrid work schedules, understanding when someone must pick up their kid from school or go to a doctor’s appointment, and allowing people to execute asynchronous work during off hours are benefits that impact work-life balance.

Ultimately, the total rewards package a company offers is the first sign of its relationship with employees. It tells the story of how talent is valued by an organization. It usually requires more than just money to satisfy recruits and employees.

By Francesca Di Meglio

Originally posted on HR Exchange Network

Compliance Recap April 2023

Compliance Recap April 2023

2024 BENEFIT PARAMETERS FOR MEDICARE PART D CREDITABLE COVERAGE DISCLOSURES ANNOUNCED

The Centers for Medicare and Medicaid Services (CMS) released a Fact Sheet announcing the 2024 benefit parameters for Medicare Part D. These factors are used to determine the actuarial value of defined standard Medicare Part D coverage under CMS guidelines.

Each year, Medicare Part D requires that employers offering prescription drug coverage to Part D eligible individuals (including active or disabled employees, retirees, COBRA participants, and beneficiaries) disclose to those individuals and CMS whether the prescription plan coverage offered is creditable or non-creditable. Creditable coverage meets or exceeds the value of defined standard Medicare Part D coverage.

Insurance carriers and providers of the prescription benefit will typically notify the plan sponsor if their prescription plan is creditable or non-creditable. The 2024 parameters for Medicare Part D are:

The Online Disclosure to CMS Form must be submitted to CMS annually, and upon any change that affects whether the drug coverage is creditable:

  • Within 60 days after the beginning date of the plan year
  • Within 30 days after the termination of the prescription drug plan
  • Within 30 days after any change in the creditable coverage status of the prescription drug plan
QUESTION OF THE MONTH

Q: Where can I find the updated RxDC reporting instructions?

A: The most recent version of the reporting instructions and templates can be found on the Centers for Medicare and Medicaid website.

To receive an email when the instructions are updated, create a Registration for Technical Assistance Portal (REGTAP) account. Select the checkbox “Please send me updates for the Consolidated Appropriations Act / No Surprises Act” in your account settings.

© UBA. All rights reserved.

This information is general in nature and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.

 

Up and Away – Healthcare Costs Are Taking Off

Up and Away – Healthcare Costs Are Taking Off

Healthcare costs, and consequently employee health benefit costs, have been growing at an alarming rate in recent years. The U.S. as a nation spends more on health care than any other developed country but has worse health outcomes.  How is this possible?

Four Key Factors Driving U.S. Healthcare Costs:

  • Aging Population

Healthcare gets more expensive when the population expands, as people get older and live longer.  The Baby Boomers, one of America’s largest adult generations, is approaching retirement age. Because of this, the 65+ population is growing at an unprecedented rate. According to the U.S. Census Bureau, 21% of the entire population will be age 65 or older by 2030. Older Americans will make up almost one-quarter of the population by 2060.

This growth is likely to contribute to rising healthcare costs in two important ways:

  1. Growth in Medicare enrollment
  2. More complex, chronic conditions
  • U.S. Population Is Growing More Unhealthy

According to the Center for Disease Control and Prevention (CDC), 6 out of every 10 adults in the U.S. have at least one chronic disease, such as asthma, heart disease, high blood pressure, or diabetes, which all drive up health insurance costs.  In 2020, the health care costs of people with at least one chronic condition were responsible for 86% of health care spending.

Additionally, recent data finds that nearly 20% of children and  40% of adults over 20 in the U.S. are either overweight or obese, which can lead to chronic diseases and inflated healthcare spending.

  • Rising Drug Prices

On average, Americans shell out almost twice as much for pharmaceutical drugs as citizens of other industrialized countries pay.  Moreover, prescription drug spending in the U.S. will grow by 6.1% each year  through 2027, according to the Centers for Medicare and Medicaid Services (CMS) estimates.

Drug pricing strategies also contribute to rising healthcare costs. Drug manufacturers establish a list price based on their product’s estimated value, and manufacturers can raise this list price as they see fit. In the United States, there are few regulations to prevent manufacturers from inflating drug prices in this way.

  • Administrative Costs

Simply put, multiple systems create waste.  “Administrative” costs are frequently cited as a cause for excess medical spending. The U.S. spends about 8% of its health care dollar on administrative costs, compared to 1% to 3% in the 10 other countries the JAMA study looked at.

Why is administrative spending so high in the United States? The U.S. operates within a complex, multi-payor system, in which healthcare costs are financed by many different payors. With so many stakeholders involved, healthcare administration becomes a complicated, inefficient process.

These inefficiencies contribute to excess administrative spending. The main component of excess administrative spending is billing and insurance-related (BIR) costs. These are overhead costs related to medical billing, and include services like claims submission, claims reconciliation and payment processing.

Administrative costs, an aging population, rising prescription drug costs, and lifestyle choices all play a factor in ballooning healthcare expenses. While some of these factors are not in your control, others are. Find out where you can make a difference, not only in health insurance costs, but also to your overall health!