It’s not surprising that 2017 stands to be the year many will have an experience to share using a Telemedicine or a Virtual Doctor service. With current market trends, government regulations, and changing economic demands, it’s fast becoming a more popular alternative to traditional healthcare visits. And, as healthcare costs continue to rise and there are more strategic pricing options and digital models available to users, the appeal for consumers, self-funded employers, health systems and health plans to jump on board is significant.
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Many employers have invested in benefits administration systems to streamline their processes and connectivity with payroll systems as well as external vendors. From an efficiency and reporting perspective, this works wonderfully. However, when it comes to leveraging that technology for open enrollment and benefits communication, there can be gaps that limit effectiveness.
Our recent survey found that while technology plays a big role (47 percent of surveyed employees used a platform to enroll in their benefits), only 15 percent used an online tool to learn about their options. The good news is that of those who sought information, 90 percent found that interactive digital experience to be helpful.
The question then is, how do we encourage employees to seek information about the benefits available to them?
In a previous blog post, we talked about the power of personalization. Employees want the ability to customize their benefits package to meet their needs. This can seem challenging if your enrollment experience is limited to a simple (or overly complex) menu of benefits, only accompanied by the ability to elect participate, or waive (some may include links to product information). From a data perspective, this can be a seamless HR experience—but is it a great experience for employees?
There are several ways to create a better employee experience and your UBA advisors and vendor partners can help.
When you are planning your next open enrollment, ask your benefits administration partner what, if any, benefits communication tools they may have. Some platforms have started to incorporate dynamic video and animated presentations that help personalize the enrollment experience. Highlight these tools to your employees as part of the pre-enrollment communication package.
Insurance providers and other vendors are also great resources. Insurers may have product calculators to help employees determine coverage amounts that make sense for them. They may also have videos as well as single sign-on links that provide employees additional information. The same types of tools may be available from other vendors, such as health savings account (HSA) administrators.
Consider one-to-one employee meetings with a benefits counselor. Eighty-six percent of surveyed employees said they want a clearer explanation of benefits choices, and 80 percent want one-on-one time. Remember, your employees learn differently, and many could benefit from having a personal conversation about their needs. In many cases, it is possible to work with a carrier, or vendor, that can actually conduct the meetings and enroll employees on the benefits administration platform. The one-on-one meetings help employees learn about options specific to their circumstances, and the on-site representative can help guide them on how to use the system. This can also be an opportunity to update employee information such as dependents, beneficiaries, and contact information. Successfully blending personalized benefits communication strategies with benefits administration technology can help increase employee engagement and streamline your processes.
By Kevin D. Seeker
Originally Posted By www.ubabenefits.com
In conversations with HR professionals and benefit brokers, we find that the topic of long-term care insurance (LTCi) is often covered in less than two minutes during renewal meetings. When I ask why the topic of conversation is so short, they tell me, “Employees just aren’t asking about it, so they must not be interested.”
If employees aren’t asking about LTCi, does it mean they aren’t interested? They just may be unaware of the value of LTCi and that it can be offered by their employer with concessions not available in the open market. Here are the top seven reasons why LTCi should be a bigger part of the employee benefits conversation.
Do you know LTCi can be offered as an employee benefit? There are multiple employer-sponsored products, including those with pricing discounts, guarantee issue, and payroll deduction.
Do you believe Medicaid and Medicare will provide long-term care for employees? This is a popular misconception. Medicare and Medicaid will restrict your employees’ choices of where and how they receive care. These options will either not offer custodial or home care, or they’ll force employees to spend down their assets for care.
Do you think LTCi is too expensive, or that your employee population is too young to need it? Many plans can be customized to meet personal budgets and potential care needs. It’s also important to know that rates are based on employees’ ages. The younger the employees are, the lower their rates will be.
Are you aware of the variety of LTCi plans? Many policies offer flexible coverage options. Depending on the policy an employer selects, LTCi can cover a wide range of care—in some cases even adult day care and home safety modifications.
Do you believe the market is unstable?
Today’s products are priced based on conservative assumptions, and employers are enrolling very stable LTCi plans for their employees. Each month, we see new plan options and products being introduced along with new carriers entering the market.
Do you already offer an LTCi plan but it’s closed to new hires? Being able to offer a similar LTCi benefit to all employees is crucial for most employers. Find a partner that can assist with the current LTCi plan and can assist with bringing in a new LTCi offering for new hires
Under Internal Revenue Code Section 105(h), a self-funded medical reimbursement plan must pass two nondiscrimination tests. Failure to pass either test means that the favorable tax treatment for highly compensated individuals who participate in the plan will be lost. The Section 105(h) rules only affect whether reimbursement (including payments to health care providers) under a self-funded plan is taxable.
When Section 105(h) was enacted, its nondiscrimination testing applied solely to self-funded plans. Under the Patient Protection and Affordable Care Act (ACA), Section 105(h) also applies to fully insured, non-grandfathered plans. However, in late 2010, the government delayed enforcement of Section 105(h) against fully insured, non-grandfathered plans until the first plan year beginning after regulations are issued. To date, no regulations have been issued so there is currently no penalty for noncompliance.
Practically speaking, if a plan treats all employees the same, then it is unlikely that the plan will fail Section 105(h) nondiscrimination testing. What Is a Self-Insured Medical Reimbursement Plan?
Section 105(h) applies to a “self-funded medical reimbursement plan,” which is an employer plan to reimburse employees for medical care expenses listed under Code Section 213(d) for which reimbursement is not provided under a policy of accident or health insurance.
Common self-funded medical reimbursement plans are self-funded major medical plans, health reimbursement arrangements (HRAs), and medical expense reimbursement plans (MERPs). Many employers who sponsor an insured plan may also have a self-funded plan; that self-funded plan is subject to the Section 105 non-discrimination rules. For example, many employers offer a fully insured major medical plan that is integrated with an HRA to reimburse expenses incurred before a participant meets the plan deductible. What If the Self-Insured Medical Reimbursement Plan Is Offered Under a Cafeteria Plan?
A self-funded medical reimbursement plan (self-funded plan) can be offered outside of a cafeteria plan or under a cafeteria plan. Section 105(h) nondiscrimination testing applies in both cases.
Regardless of grandfathered status, if the self-funded plan is offered under a cafeteria plan and allows employees to pay premiums on a pre-tax basis, then the plan is still subject to the Section 125 nondiscrimination rules. The cafeteria plan rules affect whether contributions are taxable; if contributions are taxable, then the Section 105(h) rules do not apply. What Is the Purpose of Nondiscrimination Testing?
Congress permits self-funded medical reimbursement plans to provide tax-free benefits. However, Congress wanted employers to provide these tax-free benefits to their regular employees, not just to their executives. Nondiscrimination testing is designed to encourage employers to provide benefits to their employees in a way that does not discriminate in favor of employees who are highly paid or high ranking.
If a plan fails the nondiscrimination testing, the regular employees will not lose the tax benefits of the self-funded medical reimbursement plan and the plan will not be invalidated. However, highly paid or high ranking employees may be adversely affected if the plan fails testing. What Are the Two Nondiscrimination Tests?
The two nondiscrimination tests are the Eligibility Test and Benefits Test.
The Eligibility Test answers the basic question of whether there are enough regular employees benefitting from the plan. Section 105(h) provides three ways of passing the Eligibility Test:
The 70% Test – 70 percent or more of all employees benefit under the plan.
The 70% / 80% Test – At least 70 percent of employees are eligible under the plan and at least 80 percent or more of those eligible employees participate in the plan.
The Nondiscriminatory Classification Test – Employees qualify for the plan under a classification set up by the employer that is found by the IRS not to be discriminatory in favor of highly compensated individuals.
The Benefits Test answers the basic question of whether all participants are eligible for the same benefits.
By Danielle Capilla
Originally Posted By www.ubabenefits.com
With all of the focus that is put into managing and controlling health care costs today, it amazes me how many organizations still look past one of the most effective and least disruptive cost-saving strategies available to employers with 150 or more covered employees – self-funding your dental plan. There is a reason why dental insurers are not quick to suggest making a switch to a self-funded arrangement … it is called profit! Why self-fund dental?
We know that the notion of self-funding still makes some employers nervous. Don’t be nervous; here are the fundamental reasons why this requires little risk:
When self-funding dental, your exposure as an employer is limited on any one plan member. Benefit maximums are typically between $1,000 and $2,000 per year.
Dental claims are what we refer to as high frequency, low severity (meaning many claims, lower dollars per claim), which means that they are far less volatile and much more predictable from year to year.
You pay for only what you use, an administrative fee paid to the third-party administrator (TPA) and the actual claims that are paid in any given month. That’s it!
Where do you save when you self-fund your dental? Trend: In our ongoing analysis over the years, dental claims do not trend at anywhere near the rate that the actuaries from any given insurance company project (keep in mind these are very bright people that are paid to make sure that insurance companies are profitable). Therefore, insured rates are typically overstated. Claims margin: This is money that insurance companies set aside for “claims fluctuation” (i.e., profit). For example, ABC Insurer (we’ll keep this anonymous) does not use paid claims in your renewal projection. They use incurred claims that are always somewhere between three and six percent higher than your actual paid claims. They then apply “trend,” a risk charge and retention to the overstated figures. This factor alone will result in insured rates that are overstated by five to eight percent on insured plans with ABC Insurer, when compared to self-funded ABC Insurer plans. Risk charges: You do not pay them when you self-fund! This component of an insured rate can be anywhere from three to six percent of the premium. Reserves: Money that an insurer sets aside for incurred, but unpaid, claim liability. This is an area where insurance companies profit. They overstate the reserves that they build into your premiums and then they earn investment income on the reserves. When you self-fund, you pay only for what you use. Below is a recent case study
We received a broker of record letter from a growing company headquartered in Massachusetts. They were hovering at about 200 employees enrolled in their fully insured dental plan. After analyzing their historical dental claims experience, we saw an opportunity. After presenting the analysis and educating the employer on the limited amount of risk involved in switching to a self-funded program, the client decided to make the change.
After we had received 12 months of mature claims, we did a look back into the financial impact of the change. Had the client accepted what was historically a well-received “no change” fully insured dental renewal, they would have missed out on more than $90,000 added to their bottom line. Their employee contributions were competitive to begin with, so the employer held employee contributions flat and was able to reap the full financial reward. This is just one example. I would not suggest that this is the norm, but savings of 10 percent are. If you are a mid-size employer with a fully insured dental plan, self-funding dental is a cost-savings opportunity you and your consultant should be monitoring at every renewal.
By Gary R Goodhile, Originally Published By United Benefit Advisors
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.
