by admin | Apr 7, 2017 | Human Resources, Retirement
With apologies to the band R.E.M., this article is not about their music, nor their album, but about how automatic enrollment has significantly helped people. Think of all the payments you currently have automated. You probably have automatic deposit of your paycheck, automatic bill pay for your utilities and other monthly bills, and maybe even a recurring automatic payment and delivery of pet food from Amazon. Now, think of something that’s important that you wish you could automate. This is not the time to mention your daily fix of Starbucks, but about saving enough money for retirement.
There are families that have a similar system where they placed a large jar in the kitchen. Everyone, kids included, would put their spare change in the jar every day. At the end of the month, the family would use that accumulated money in a fun way. An article titled, “Automation Making Huge Retirement Plan Impact,” in Employee Benefit News references how a defined contribution plan provides an excellent way for employees to seamlessly save money for retirement. As employees started joining the plan, with a typical contribution of 10 percent or higher, including employer matching, participation increased nearly 20 percent in the company’s retirement benefit according to the article. This was up more than seven percent from just five years ago. Looking at this by generation, millennials are used to automation and, consequently, are reaping huge rewards from this type of plan.
However, all age groups benefit and a company can modify the plan to increase participation. For example, if a company has a matching rate of 50 cents on the first three percent to 25 cents on the first six percent, it automatically gets employees saving an additional three percent they wouldn’t normally save. Another way is to have annual automatic increases in contributions. A bump of a percentage point every year up to a maximum rate will help employees the earlier they start.
Of course, there should always be an opt-out option for people who don’t want to have the contribution rate increased, have a separate retirement plan, or simply don’t want to save using the company plan.
By Bill Olson, Originally Published By United Benefit Advisors
by admin | Apr 5, 2017 | Benefit Management, Group Benefit Plans
In the first part of this two-part blog, I recommended a number of important items to keep in mind as you select a stop loss carrier. Additionally, here are a few other things you will want to look for, or ask about, when selecting a stop loss carrier. While this is not an exhaustive list, these are some of the most frequent items I have seen that cause issues or gaps in coverage.
Plan Mirroring
Does the stop loss carrier “mirror” its policy to your employee benefit plan document? I like to think of this whole plan mirroring approach as kind of hand in glove. The relationship between the employee benefit plan document and the stop loss policy should be a complement to one another.
Your employee benefit plan document and your stop loss policy are two separate documents containing many different provisions and terms. Without plan mirroring, stop loss carriers will audit to their stop loss contracts, which can, and do, result in gaps in coverage. Make sure you work with a carrier who will provide plan mirroring.
Medical Necessity Determinations
Although a stop loss carrier can follow plan language, some do, and will, question determinations made by the plan for medical necessity. Stop loss carriers differ on their level of scrutiny in this area. The reality is the medical field is not always black and white on how to treat a patient. It is important to understand the carrier’s position and also the medical guidelines used by your administrative services only (ASO) carrier or third-party administrator (TPA) in making medical determinations.
Recognition of Network Requirements
With your employee benefit plan, you are most likely using a preferred provider organization (PPO) network where provider claims are subject to payment based on an agreed schedule. The agreement you have to access this network predicates what the plan will pay the provider for their services.
A stop loss carrier who is not party to this agreement may question the payment methodology, or feel it can do better on certain claims. They rely on cost containment vendors to review claims and determine what they might feel would be “reasonable” payments. If this is the case, you, as an employer, may be left with a gap in coverage as you are required under your employee benefit plan to reimburse the provider at the contracted rate, but your stop loss carrier may not reimburse you to that level.
It is important to know your stop loss carrier’s position on this type of situation.
Claim Turnaround
Find out what the carrier’s commitment is to paying claims. Many carriers have standards that can vary greatly by carrier. With stop loss, you are typically dealing with large dollar amounts and from a cash flow perspective, you want to know what your carrier’s policy is regarding claims payment.
Will the carrier allow for “advanced funding?” If so, the claim is first adjudicated and processed, but not paid until the stop loss carrier has reimbursed the portion over the stop loss deductible. This, in turn, minimizes the disruption to your cash flow. Many, but not all, carriers offer advanced funding and some will charge an additional fee.
You will want to check with your broker or administrator on the carriers you are considering and what their specific requirements are for advanced funding.
Reasonable and Customary (R&C)
R&C is also known as usual and customary (U&C). As noted earlier, most employee benefit plans take advantage of PPO networks, where provider claims are subject to payment based on an agreed schedule. Outside of claims through a PPO, most plans limit claims payments or reimbursements to R&C charges. This describes the amount an ASO carrier or TPA decides to use as the starting point in the payment for a service.
In each case, it is important to ensure that the employee benefit plan’s definition agrees with the stop loss policy, or that the stop loss policy will follow the provisions of the employee benefit plan.
Secondary Network Access Fees
Typically, a TPA or ASO carrier will provide access to a “secondary” or specialty-type network, such as a transplant-only network. The advantage is that the employee benefit plan and member gain access to discounts, or additional discounts above and beyond that of the primary network offering.
In these cases, there is typically an access fee usually set as a percentage of the savings achieved that is the responsibility of the employee benefit plan. These fees are NOT always reimbursable by the stop loss carrier, or the stop loss carrier may put a limit on the amount reimbursed.
Check with your broker or administrator on whether stop loss carriers you are considering will reimburse you for these types of fees.
While these six considerations are not a comprehensive list, they will certainly set you on the right path for discussions with your broker, or administrator, on selecting a stop loss carrier that not only meets your needs, but also provides the protection necessary for your employee benefit plan and company.
By Steven Goethel, Originally Published By United Benefit Advisors
by admin | Mar 31, 2017 | Employee Benefits, Group Benefit Plans, Human Resources
The age-old adage, “you get what you pay for,” certainly holds true in the stop loss industry. I cannot stress enough how important it is to look at more than just the premium rates on a spreadsheet.
To understand the importance, let’s use the auto insurance industry as a comparable example. If you were purchasing car insurance for yourself, would you always accept the lowest price without doing a coverage comparison? How would you know if that insurance company might jack up your rates on renewal, or once you have an accident, or possibly delay your claims and find every reason or loophole not to pay them?
Apply that same thinking to stop loss coverage with larger dollar amounts at risk. Not every stop loss policy is alike and not every carrier is going to provide you with the coverage you are seeking. As an employer, you want to make sure the employee benefit plan you sponsor for your employees will not result in any significant liabilities for your company. You want the peace of mind of knowing there won’t be any surprises along the way.
All stop loss carrier policies are different. Over my 20-plus years in the industry, I have seen some very unique language and provisions in stop loss policies that most people would not notice without looking at the fine print. You must be aware of these potential provisions that could cause significant gaps in coverage between your employee benefit plan and your stop loss policy.
How can you best protect your company? You can start by working with your broker or administrator to narrow down the list of stop loss providers to those that best meet your needs. Brokers and administrators are best suited to understand the complexities of stop loss insurance and provide you with the best possible information regarding policies and choices.
By keeping this, and the following items, in mind during your selection process, you should be able to find a carrier to serve your needs.
The most important advice I can provide is to look beyond just price and at the actual stop loss policy. The lowest price doesn’t always mean the best value. So make sure to:
- Read the stop loss policy before you purchase your coverage
- Ask for a sample policy
- Understand ALL the provisions of the policy itself
- Ask your broker or administrator to review the policy if you don’t understand all the provisions
Additionally, there are a few other things you will want to look for, or ask about, when selecting a stop loss carrier. In part two of this blog, which will be posted the first week of April, I will discuss some of the most frequent items I have seen that cause issues or gaps in coverage.
By Steven Goethel, Originally Published By United Benefit Advisors
by admin | Mar 29, 2017 | Cybersecurity, Human Resources
I’ve looked at clouds from both sides now
From up and down and still somehow
It’s cloud illusions I recall
I really don’t know clouds at all
— Joni Mitchell, “Both Sides, Now”
And like that song from 1969, it appears that most employees really don’t know cloud computing at all. In an article on the Society for Human Resource Management’s website titled, “Public Enemy No. 1 for Employers? Careless Cloud Users, Study Says,” a North American IT solutions and managed services provider called Softchoice found that 1 in 3 users of cloud-based apps (e.g., Google Docs and Dropbox) download the app without letting their IT department know. Cloud computing became popular a few years ago because people could store all their documents, photos, and other information and then access that data from anywhere at any time and on any device.
What makes this such a bad situation is not the cloud computing itself, but that the vast majority of employees lack any sense of cybersecurity. That same study found that 1 in 5 employees:
- Keep their passwords in plain sight (e.g., on Post-it Notes on their desks).
- Have accessed work files from a device that was not password-protected.
- Have lost devices that weren’t password-protected.
Complicating this further is that the employees who actually do use passwords usually have weak passwords. That is, they are easy to guess (e.g., “1234,” “password,” or their username). Rather than leave a company and its network vulnerable to attack, some IT people suggest a ban on cloud accounts for work.
Security breaches involving a company’s intellectual property can be very costly. Sometimes referred to as “ransomware,” the important data of an organization will either be stolen or encrypted and will not be released until a fee is paid.
A better solution to a ban on cloud accounts would be to educate employees on the necessity for cyber security, train them to improve their online security habits, and remind them that IT rules are in place to make a company more secure, not make it more difficult for employees to be productive. Cyber thieves are clever and when they can’t break into a system using technology, they often rely on the flaws of human nature.
As we become more and more connected to the Internet, we leave ourselves and the companies where we work more accessible to cyber threats. It’s imperative that employees keep everything locked down.
By Tara Marshall, Originally Published By United Benefit Advisors
by admin | Mar 24, 2017 | ACA, Group Benefit Plans, IRS
A fixed indemnity health plan pays a specific amount of cash for certain health-related events (for example, $40 per office visit or $100 per hospital day). The amount paid is neither related to the medical expense incurred, nor coordinated with other health coverage. Further, a fixed indemnity health plan is considered an “excepted benefit.”
Under HIPAA, fixed dollar indemnity policies are excepted benefits if they are offered as “independent, non-coordinated benefits.” Under the Patient Protection and Affordable Care Act (ACA), excepted benefits are not subject to the ACA’s health insurance requirements or prohibitions (for example, annual and lifetime dollar limits, out-of-pocket limits, requiring individual and small-group policies to cover ten essential health benefits, etc.). This means that excepted benefit policies can exclude preexisting conditions, can have dollar limits, and do not legally have to guarantee renewal when the coverage is cancelled.
Further, under the ACA, excepted benefits are not minimum essential coverage so a large employer cannot comply with its employer shared responsibility obligations by offering only fixed indemnity coverage to its full-time employees.
Some examples of fixed indemnity health plans are AFLAC or similar coverage, or cancer insurance policies.
Recently, the IRS released a Memorandum on the tax treatment of benefits paid by fixed indemnity health plans that addresses two questions:
- Are payments to an employee under an employer-provided fixed indemnity health plan excludible from the employee’s income under Internal Revenue Code §105?
- Are payments to an employee under an employer-provided fixed indemnity health plan excludible from the employee’s income under Internal Revenue Code §105 if the payments are made by salary reduction through a §125 cafeteria plan?
By Danielle Capilla, Originally Published By United Benefit Advisors
