by admin | May 1, 2017 | ACA, Benefit Management, Group Benefit Plans, Human Resources
On April 18, 2017, the Department of Health and Human Services’ (HHS) Centers for Medicare & Medicaid Services (CMS) published its final rule regarding Patient Protection and Affordable Care Act (ACA) market stabilization.
The rule amends standards relating to special enrollment periods, guaranteed availability, and the timing of the annual open enrollment period in the individual market for the 2018 plan year, standards related to network adequacy and essential community providers for qualified health plans, and the rules around actuarial value requirements.
The proposed changes primarily affect the individual market. However, to the extent that employers have fully insured plans, some of the proposed changes will affect those employers’ plans because the changes affect standards that apply to issuers.
The regulations are effective on June 17, 2017.
Among other things impacting group plans, the rule provided clarifications to the scope of the guaranteed availability policy regarding unpaid premiums. The guaranteed availability provisions require health insurance issuers offering non-grandfathered coverage in the individual or group market to offer coverage to and accept every individual and employer that applies for such coverage unless an exception applies. Individuals and employers must usually pay the first month’s premium to activate coverage.
CMS previously interpreted the guaranteed availability provisions so that a consumer would be allowed to purchase coverage under a different product without having to pay past due premiums. Further, if an individual tried to renew coverage in the same product with the same issuer, then the issuer could apply the enrollee’s upcoming premium payments to prior non-payments.
Under the final rule and as permitted by state law, an issuer may apply the initial premium payment to any past-due premium amounts owed to that issuer. If the issuer is part of a controlled group, the issuer may apply the initial premium payment to any past-due premium amounts owed to any other issuer that is a member of that controlled group, for coverage in the 12-month period preceding the effective date of the new coverage.
Practically speaking, when an individual or employer makes payment in the amount required to trigger coverage and the issuer lawfully credits all or part of that amount to past-due premiums, the issuer will determine that the consumer made insufficient initial payment for new coverage.
This policy applies both inside and outside of the Exchanges in the individual, small group, and large group markets, and during applicable open enrollment or special enrollment periods.
This policy does not permit a different issuer (other than one in the same controlled group as the issuer to which past-due premiums are owed) to condition new coverage on payment of past-due premiums or permit any issuer to condition new coverage on payment of past-due premiums by any individual other than the person contractually responsible for the payment of premiums.
Issuers adopting this premium payment policy, as well as any issuers that do not adopt the policy but are within an adopting issuer’s controlled group, must clearly describe the consequences of non-payment on future enrollment in all paper and electronic forms of their enrollment application materials and any notice that is provided regarding premium non-payment.
By Danielle Capilla, Originally Published By United Benefit Advisors
by admin | Apr 21, 2017 | ACA, Human Resources
One might describe the series of events leading to the death of the American Health Care Act (Congress’s bill to repeal and replace the Affordable Care Act) as something like a ballistic missile exploding at launch. The Patient Protection and Affordable Care Act (ACA) repeal debate began nearly a decade ago with former President Barack Obama’s first day in office and reemerged as a serious topic during the 2016 presidential election. Even following the retraction of the House bill, repeal of the ACA remains a possibility as the politicians consider alternatives to the recent bill. The possibility of pending legislation has caused some clients to question the need to complete their obligation for ACA reporting on a timely basis this year. The legislative process has produced a great deal of uncertainty which is one thing employers do not like, especially during the busy year end.
While the “repeal and replace” activity is continuing, it is imperative that employers and their brokers put their noses to the grindstone to fulfill all required reporting requirements. To accomplish this, employers will need brokers that can effectively guide them through this tumultuous season. We recommend that employers ask their brokers about their strategies for
- Implementing the employer shared responsibility reporting
- Sending all necessary forms to the employer’s employees
- Submitting the employer’s reporting to the IRS
- Closing out the employer’s 2016 filing season
Employers should also inquire about any additional support that the broker provides. They should provide many of the services that we at Health Cost Manager provide to our clients: They should apprise their clients of the latest legislative updates through regular email communication and informational webinars. Brokers should also bring in experts in the field that have interacted with key stakeholders in Washington. And most important, they should remain available during this uncertain period to answer any questions or concerns from clients.
We know employers would prefer not to have to comply with these reporting obligations – many have directly told us so. We understand this requires additional work on their part to gather information for the reporting and increased compliance responsibility. Knowing how stressful the reporting season can be for employers, brokers should go out of their way to help their clients feel confident that they can steer through the reporting process smoothly. The broker’s role should be to take as much of the burden off the employer’s shoulders as possible to enable them to reach compliance in the most expedient manner possible. Sometimes this involves stepping in to solve data or other technical issues, or answering a compliance-related question that helps the client make important decisions. It’s all part of helping employers navigate through the ACA’s strong headwinds during these uncertain times.
By Michael Weiskirch, Originally Published By United Benefit Advisors
by admin | Apr 19, 2017 | Health & Wellness, Human Resources
I am proud to say that I have been involved in corporate wellness since the mid-1980s. Helping employees live healthier and happier lives, as well as supporting employers with best-in-class tools to improve their cultures, have been my passion and purpose. I have witnessed and worked on corporate wellness since the time when physical health was the most important aspect of workers’ health. I cannot say I have worked with wellness since its inception, though. Corporate wellness has been around longer than many people think. To predict the future of wellness, we must understand its past.
Writings about the effects of work exposure on workers and how to improve workers’ health and well-being can be found as early as the 1700s1. Later, the industrial revolution brought many health issues to workers such as working 14 to 16 hours a day, low wages, and very poor working conditions2. The World Health Organization’s (WHO) definition of health in the 1940s as “a state of complete physical, mental, and social well-being and not merely the absence of disease or infirmity” opened our eyes to the concept of health and wellness as a more complex one3. In addition, the work of Halbert Dunn in 1959 helped the word “wellness” circulate more widely in the public health field, but it was the CBS 60 Minutes program with Dan Rather in 1979 titled, “Wellness, there’s a word you don’t hear every day,” that created curiosity about what corporate wellness was at that time – emphasis on physical health4. Corporate wellness has evolved since then and many studies have been published leading to a wealth of knowledge on best practices, return on investment (ROI), value of investment, risk reduction, health improvement, and more. The March 2017 edition of Health Affairs was dedicated exclusively on the relationship of work and health, and health and work highlighting important recent studies on wellness. Wellness has moved from physical health to thriving in other dimensions such as emotional, financial, spiritual, social, and intellectual health. In addition, many theories on behavior change and behavior economics have been adopted in wellness programs and its incentive designs. Wellness has changed from a “nice to have” to a “must have” benefit, but it must be done right and implemented consistently in order to provide positive results that align with your company’s goals.
I don’t have a crystal ball or special powers, but I believe the future of wellness lies in the following:
- Millennials in the workforce will demand more sophisticated technology.
- The traditional health risk assessment will be replaced by a more holistic kind – check out the True Vitality Test from The Blue Zones. (The UBA Health Plan Survey finds that although 72.5 percent of wellness programs include health risk assessments, their use has been declining, dropping 10.5 percent in three years.)
- Wellness will be part of all successful companies’ business objectives – the Chief Wellness & Well-being Officer’s ultimate goal will be to build a culture of health, self-responsibility, and emotional balance. Wellness will be an important piece of this. For great examples of companies ahead of our time, check out Dr. Ron Goetzel’s work at the Institute of Health and Productivity Studies at John Hopkins School of Public Health.
- Non-traditional workplace environments will replace the health-damaging sitting and sedentary work environment of today.
- Wellness will be more integrated with benefits in general, but more specifically with high-deductible health plans (HDHPs) as a way to help employees fund them.
- ROI will no longer be the focus, and instead it will be part of a long-term business strategy.
- Wellness will have a wider impact overall where employees will thrive in the workplace and bring their health improvement skills to their families and communities.
We now know how to deliver wellness that positively affects cultures and population health. We don’t need any additional studies. All we need are brave and open-minded companies to embark on the journey of optimal wellness and well-being. This journey is full of trials and errors, but also full of self-discovery and growth that can build very profitable companies filled with employees who truly engage at work and thrive every day. Who is with me in this journey?
By Valeria S. Tivnan, Originally Published By United Benefit Advisors
by admin | Apr 12, 2017 | Benefit Management, Employee Benefits, Human Resources
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
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 | 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
