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Last fall, President Barack Obama signed the Protecting Affordable Coverage for Employees Act (PACE), which preserved the historical definition of small employer to mean an employer that employs 1 to 50 employees. Prior to this newly signed legislation, the Patient Protection and Affordable Care Act (ACA) was set to expand the definition of a small employer to include companies with 51 to 100 employees (mid-size segment) beginning January 1, 2016.

If not for PACE, the mid-size segment would have become subject to the ACA provisions that impact small employers. Included in these provisions is a mandate that requires coverage for essential health benefits (not to be confused with minimum essential coverage, which the ACA requires of applicable large employers) and a requirement that small group plans provide coverage levels that equate to specific actuarial values. The original intent of expanding the definition of small group plans was to lower premium costs and to increase mandated benefits to a larger portion of the population.

The lower cost theory was based on the premise that broadening the risk pool of covered individuals within the small group market would spread the costs over a larger population, thereby reducing premiums to all. However, after further scrutiny and comments, there was concern that the expanded definition would actually increase premium costs to the mid-size segment because they would now be subject to community rating insurance standards. This shift to small group plans might also encourage mid-size groups to leave the fully-insured market by self-insuring – a move that could actually negate the intended benefits of the expanded definition.

Another issue with the ACA’s expanded definition of small group plans was that it would have resulted in a double standard for the mid-size segment. Not only would they be subject to the small group coverage requirements, but they would also be subject to the large employer mandate because they would meet the ACA’s definition of an applicable large employer.

Note: Although this bill preserves the traditional definition of a small employer, it does allow states to expand the definition to include organizations with 51 to 100 employees, if so desired.

By Vicki Randall
Originally published by www.ubabenefits.com

Cafeteria plans, or plans governed by IRS Code Section 125, allow employers to help employees pay for expenses such as health insurance with pre-tax dollars. Employees are given a choice between a taxable benefit (cash) and two or more specified pre-tax qualified benefits, for example, health insurance. Employees are given the opportunity to select the benefits they want, just like an individual standing in the cafeteria line at lunch.

Only certain benefits can be offered through a cafeteria plan:

  • Coverage under an accident or health plan (which can include traditional health insurance, health maintenance organizations (HMOs), self-insured medical reimbursement plans, dental, vision, and more);
  • Dependent care assistance benefits or DCAPs
  • Group term life insurance
  • Paid time off, which allows employees the opportunity to buy or sell paid time off days
  • 401(k) contributions
  • Adoption assistance benefits
  • Health savings accounts or HSAs under IRS Code Section 223

Some employers want to offer other benefits through a cafeteria plan, but this is prohibited. Benefits that you cannot offer through a cafeteria plan include scholarships, group term life insurance for non-employees, transportation and other fringe benefits, long-term care, and health reimbursement arrangements (unless very specific rules are met by providing one in conjunction with a high deductible health plan). Benefits that defer compensation are also prohibited under cafeteria plan rules.

Cafeteria plans as a whole are not subject to ERISA, but all or some of the underlying benefits or components under the plan can be. The Patient Protection and Affordable Care Act (ACA) has also affected aspects of cafeteria plan administration.

Employees are allowed to choose the benefits they want by making elections. Only the employee can make elections, but they can make choices that cover other individuals such as spouses or dependents. Employees must be considered eligible by the plan to make elections. Elections, with an exception for new hires, must be prospective. Cafeteria plan selections are considered irrevocable and cannot be changed during the plan year, unless a permitted change in status occurs. There is an exception for mandatory two-year elections relating to dental or vision plans that meet certain requirements.

Plans may allow participants to change elections based on the following changes in status:

  • Change in marital status
  • Change in the number of dependents
  • Change in employment status
  • A dependent satisfying or ceasing to satisfy dependent eligibility requirements
  • Change in residence
  • Commencement or termination of adoption proceedings

Plans may also allow participants to change elections based on the following changes that are not a change in status but nonetheless can trigger an election change:

  • Significant cost changes
  • Significant curtailment (or reduction) of coverage
  • Addition or improvement of benefit package option
  • Change in coverage of spouse or dependent under another employer plan
  • Loss of certain other health coverage (such as government provided coverage, such as Medicaid)
  • Changes in 401(k) contributions (employees are free to change their 401(k) contributions whenever they wish, in accordance with the administrator’s change process)
  • HIPAA special enrollment rights (contains requirements for HIPAA subject plans)
  • COBRA qualifying event
  • Judgment, decrees, or orders
  • Entitlement to Medicare or Medicaid
  • Family Medical Leave Act (FMLA) leave
  • Pre-tax health savings account (HSA) contributions (employees are free to change their HSA contributions whenever they wish, in accordance with the their payroll/accounting department process)
  • Reduction of hours (new under the ACA)
  • Exchange/Marketplace enrollment (new under the ACA)

Together, the change in status events and other recognized changes are considered “permitted election change events.”

Common changes that do not constitute a permitted election change event are: a provider leaving a network (unless, based on very narrow circumstances, it resulted in a significant reduction of coverage), a legal separation (unless the separation leads to a loss of eligibility under the plan), commencement of a domestic partner relationship, or a change in financial condition.

There are some events not in the regulations that could allow an individual to make a mid-year election change, such as a mistake by the employer or employee, or needing to change elections in order to pass nondiscrimination tests. To make a change due to a mistake, there must be clear and convincing evidence that the mistake has been made. For instance, an individual might accidentally sign up for family coverage when they are single with no children, or an employer might withhold $100 dollars per pay period for a flexible spending arrangement (FSA) when the individual elected to withhold $50.

Plans are permitted to make automatic payroll election increases or decreases for insignificant amounts in the middle of the plan year, so long as automatic election language is in the plan documents. An “insignificant” amount is considered one percent or less.

Plans should consider which change in status events to allow, how to track change in status requests, and the time limit to impose on employees who wish to make an election.

Cafeteria plans are not required to allow employees to change their elections, but plans that do allow changes must follow IRS requirements. These requirements include consistency, plan document allowance, documentation, and timing of the election change. For complete details on each of these requirements—as well as numerous examples of change in status events, including scenarios involving employees or their spouses or dependents entering into domestic partnerships, ending periods of incarceration, losing or gaining TRICARE coverage, and cost changes to an employer health plan—request UBA’s ACA Advisor, “Cafeteria Plans: Qualifying Events and Changing Employee Elections”.

By Danielle Capilla
Originally published by www.ubabenefits.com

On December 13, 2016, former President Obama signed the 21st Century Cures Act into law. The Cures Act has numerous components, but employers should be aware of the impact the Act will have on the Mental Health Parity and Addiction Equity Act, as well as provisions that will impact how small employers can use health reimbursement arrangements (HRAs). There will also be new guidance for permitted uses and disclosures of protected health information (PHI) under the Health Insurance Portability and Accountability Act (HIPAA). We review the implications with HRAs below; for a discussion of all the implications, view UBA’s Compliance Advisor, “21st Century Cares Act”.

The Cures Act provides a method for certain small employers to reimburse individual health coverage premiums up to a dollar limit through HRAs called “Qualified Small Employer Health Reimbursement Arrangements” (QSE HRAs). This provision will go into effect on January 1, 2017.

Previously, the Internal Revenue Service (IRS) issued Notice 2015-17 addressing employer payment or reimbursement of individual premiums in light of the requirements of the Patient Protection and Affordable Care Act (ACA). For many years, employers had been permitted to reimburse premiums paid for individual coverage on a tax-favored basis, and many smaller employers adopted this type of an arrangement instead of sponsoring a group health plan. However, these “employer payment plans” are often unable to meet all of the ACA requirements that took effect in 2014, and in a series of Notices and frequently asked questions (FAQs) the IRS made it clear that an employer may not either directly pay premiums for individual policies or reimburse employees for individual premiums on either an after-tax or pre-tax basis. This was the case whether payment or reimbursement is done through an HRA, a Section 125 plan, a Section 105 plan, or another mechanism.

The Cures Act now allows employers with less than 50 full-time employees (under ACA counting methods) who do not offer group health plans to use QSE HRAs that are fully employer funded to reimburse employees for the purchase of individual health care, so long as the reimbursement does not exceed $4,950 annually for single coverage, and $10,000 annually for family coverage. The amount is prorated by month for individuals who are not covered by the arrangement for the entire year. Practically speaking, the monthly limit for single coverage reimbursement is $412, and the monthly limit for family coverage reimbursement is $833. The limits will be updated annually.

Impact on Subsidy Eligibility. For any month an individual is covered by a QSE HRA/individual policy arrangement, their subsidy eligibility would be reduced by the dollar amount provided for the month through the QSE HRA if the QSE HRA provides “unaffordable” coverage under ACA standards. If the QSE HRA provides affordable coverage, individuals would lose subsidy eligibility entirely. Caution should be taken to fully education employees on this impact.

COBRA and ERISA Implications. QSE HRAs are not subject to COBRA or ERISA.

Annual Notice Requirement. The new QSE HRA benefit has an annual notice requirement for employers who wish to implement it. Written notice must be provided to eligible employees no later than 90 days prior to the beginning of the benefit year that contains the following:

  • The dollar figure the individual is eligible to receive through the QSE HRA
  • A statement that the eligible employee should provide information about the QSE HRA to the Marketplace or Exchange if they have applied for an advance premium tax credit
  • A statement that employees who are not covered by minimum essential coverage (MEC) for any month may be subject to penalty

Recordkeeping, IRS Reporting. Because QSE HRAs can only provide reimbursement for documented healthcare expense, employers with QSE HRAs should have a method in place to obtain and retain receipts or confirmation for the premiums that are paid with the account. Employers sponsoring QSE HRAs would be subject to ACA related reporting with Form 1095-B as the sponsor of MEC. Money provided through a QSE HRA must be reported on an employee’s W-2 under the aggregate cost of employer-sponsored coverage. It is unclear if the existing safe harbor on reporting the aggregate cost of employer-sponsored coverage for employers with fewer than 250 W-2s would apply, as arguably many of the small employers eligible to offer QSE HRAs would have fewer than 250 W-2s.

Individual Premium Reimbursement, Generally. Outside of the exception for small employers using QSE HRAs for reimbursement of individual premiums, all of the prior prohibitions from IRS Notice 2015-17 remain. There is no method for an employer with 50 or more full time employees to reimburse individual premiums, or for small employers with a group health plan to reimburse individual premiums. There is no mechanism for employers of any size to allow employees to use pre-tax dollars to purchase individual premiums. Reimbursing individual premiums in a non-compliant manner will subject an employer to a penalty of $100 a day per individual they provide reimbursement to, with the potential for other penalties based on the mechanism of the non-compliant reimbursement.

By Danielle Capilla
Originally published by www.ubabenefits.com

Employer-sponsored health insurance is greatly affected by geographic region, industry, and employer size. While some cost trends have been fairly consistent since the Patient Protection and Affordable Care Act (ACA) was put in place, United Benefit Advisors (UBA) finds several surprises in their 2016 Health Plan Survey.

Based on responses from more than 11,000 employers, UBA announces the top five best and worst states for group health care costs.

Check out this video and contact us to go over the UBA Health Plan Survey.

 

 

 

 

Many employee benefit limits are automatically adjusted each year for inflation (this is often referred to as an “indexed” limit). UBA offers a quick reference chart showing the 2017 cost of living adjustments for health and Section 125 plans, qualified plans, Social Security/Medicare withholding, compensation amounts and more. This at-a-glance resource is a valuable desk tool for employers and HR practitioners.

Here’s a snapshot of a section of the 2017 health plan limits; be sure to request the complete chart from a UBA Partner.

2017 health plan limits

Originally published by www.ubabenefits.com

 

Proposed regulations for revising and greatly expanding the Department of Labor (DOL) Form 5500 reporting are set to take effect in 2019. Currently, the non-retirement plan reporting is limited to those employers that have more than 100 employees enrolled on their benefit plans, or those in a self-funded trust. The filings must be completed on the DOL EFAST2 system within 210 days following the end of the plan year.

What does this expanded number of businesses required to report look like? According to the 2016 United Benefit Advisors (UBA) Health Plan Survey, less than 18 percent of employers offering medical plans are required to report right now. With the expanded requirements of 5500 reporting, this would require the just over 82 percent of employers not reporting now to comply with the new mandate.

While the information reported is not typically difficult to gather, it is a time-intensive task. In addition to the usual information about the carrier’s name, address, total premium, and payments to an agent or broker, employers will now be required to provide detailed benefit plan information such as deductibles, out-of-pocket maximums, coinsurance and copay amounts, among other items. Currently, insurance carriers and third party administrators must produce information needed on scheduled forms. However, an employer’s plan year as filed in their ERISA Summary Plan Description, might not match up to the renewal year with the insurance carrier. There are times when these schedule forms must be requested repeatedly in order to receive the correct dates of the plan year for filing.

In the early 1990s small employers offering a Section 125 plan were required to fill out a 5500 form with a very simple 5500 schedule form. Most small employers did not know about the filing, so noncompliance ran very high. The small employer filings were stopped mainly because the DOL did not have adequate resources to review or tabulate the information.

While electronic filing makes the process easier to tabulate the information received from companies, is it really needed? Likely not, given the expense it will require in additional compliance costs for small employers. With the current information gathered on the forms, the least expensive service is typically $500 annually for one filing. Employers without an ERISA required summary plan description (SPD) in a wrap-style document, would be required to do a separate filing based on each line of coverage. If an employer offers medical, dental, vision and life insurance, it would need to complete four separate filings. Of course, with the expanded information required if the proposed regulations hold, it is anticipated that those offering Form 5500 filing services would need to increase with the additional amount of information to be entered. In order to compensate for the additional information, those fees could more than double. Of course, that also doesn’t account for the time required to gather all the data and make sure it is correct. It is at the very least, an expensive endeavor for a small business to undertake.

Even though small employers will likely have fewer items required for their filings, it is an especially undue hardship on many already struggling small businesses that have been hit with rising health insurance premiums and other increasing costs. For those employers in the 50-99 category, they have likely paid out high fees to complete the ACA required 1094 and 1095 forms and now will be saddled with yet another reporting cost and time intensive gathering of data.

Given the noncompliance of the 1990s in the small group arena, this is just one area that a new administration could very simply and easily remove this unwelcome burden from small employers.

Originally published by www.ubabenefits.com

In a few weeks, a second season of shared responsibility reporting will begin. For some of you, last year’s inaugural year of reporting may have felt eerily similar to Lewis Carroll’s famous book. You know the one. It included a little girl falling down a dark hole, a rabbit frantically checking his watch and a lot of other crazy characters. Now that you have the benefit of one year of reporting under your belt, let’s look at the reporting forms and try to make them less confusing by breaking them down.

Background

The Patient Protection and Affordable Care Act (PPACA), commonly called the Affordable Care Act (ACA), included various mandates to ensure all citizens have affordable coverage for health care expenses. There is a mandate at the individual level and then other mandates at the employer level.

  • Individual Shared Responsibility Mandate: This mandate requires all citizens to have minimum essential coverage (MEC). If they do not, they must qualify for an exception or they will be subject to a penalty. Individuals use the 1095 forms, or a similar statement, to document that they have the required coverage.
  • Employer Shared Responsibility Mandates: These mandates apply to group health plans. One requirement is that all plans that provide MEC must report who is covered by their plan. There are also requirements which only apply to employers that are considered to be an applicable large employer (ALE), which is defined as any employer that employed, on average, at least 50 full-time employees. These requirements mandate that all ALEs must provide MEC to their full-time employees and this MEC needs to be affordable. If they do not provide MEC, they could be subject to a penalty (sometimes referred to as the “A” penalty). If the MEC they provide does not meet the definition of affordable, then the ALE could be subject to a different penalty (sometimes referred to as the “B” penalty).

In general, the objective of 1094/1095 reporting is (1) to verify those individuals who had the required MEC; and, (2) to make sure ALEs are offering affordable MEC to their full-time employees. If this isn’t happening, 1094/1095 reporting provides the information necessary for the IRS to know whether a penalty to the individual, or to the ALE, is in order.

1095-B vs. 1095-C, “I don’t understand the difference!”

1095-B

Form 1095-B provides evidence that an individual had MEC. It provides reporting strictly for the individual shared responsibility mandate. It will not trigger any employer shared responsibility penalties. It is used to provide documentation for an individual to preclude them from an individual penalty. The 1095-B is required of employer group health plans in two situations:

Situation 1: the plan is fully-insured. It is the insurance carrier’s responsibility to file the 1094/1095-B with the IRS.

Situation 2: the plan is self-insured and you are not an ALE. It is the employer’s responsibility to file with the IRS.

In these situations, a Form 1095-B is to be generated for all covered individuals regardless of employment status.

When is a Form 1095-B required

1095-C

Form 1095-C provides evidence that an ALE offered, or did not offer, affordable MEC to all full-time employees. In other words, it documents whether an ALE met the employer shared responsibility requirements. For self-insured ALEs, Form 1095-C also provides documentation that an individual had MEC, thereby meeting the individual shared responsibility requirement.

Because, in some situations, this form reports on both the employer and the individual shared responsibility mandates, it can feel nonsensical at times. To make sense, a short history lesson may be helpful.

History of Form 1095-C

When the proposed reporting regulations were first released for comment, the 1095-B was to be used for individual shared responsibility reporting and the 1095-C was to be used exclusively for employer shared responsibility reporting. As such, the 1095-C was only a two-part form with Part I being employer identification information and Part II being information on the offer of coverage that was made to full-time employees.

If the reporting forms had remained as initially proposed, self-insured ALEs would have been required to make two filings (the 1094/1095-B filing and 1094/1095-C filing). Why? Because they have a responsibility to report everyone that has MEC through their plan and they also have a responsibility to report on the offers of coverage they made to full-time employees.

Debate over this double filing requirement ensued and ultimately resulted in change. This change eliminated the double filing requirement for self-insured ALEs by revising the 1095-C. The resulting form still has Parts I and II referenced above, but it now also has Part III where employers can report the individual coverage information that was originally proposed to be reported on the 1095-B.

All ALEs are required to file Form 1095-C. However, which parts of the Form 1095-C you complete will be determined according to three situations as follows:

Situation 1 – Fully-insured Health Plan: You will complete Parts I and II for all individuals that were full-time employees at some point during the year. Part III information will be reported by your insurance company on Form 1095-B.

Situation 2 – Self-insured Health Plan: You will complete Parts I, II and III for all individuals that were full-time employees at some point during the year, as well as for individuals that have MEC through your plan.

Situation 3 – No Health Plan: If you are an ALE with no health plan, you will complete Parts I and II for all individuals that were full-time employees at some point during the year.

Which parts of Form 1095-C does an ALE need to complete

Let’s recap the 1095-C:

  • The 1095-C is required of all ALEs.
  • The 1095-C is a three-part form.
    Part I captures employer identification information.Part II is the area used to report what offers of coverage were made and whether or not those offers were affordable. This part addresses the employer shared responsibility mandates and determines whether or not employers are at risk for an employer penalty.Part III, which only gets completed if you have a self-insured plan, is the area used to report who had MEC through your plan. This part addresses the individual shared responsibility mandate and determines whether or not an individual is at risk for an individual penalty.

Final Thoughts

Keep in mind, if you have a self-insured plan, a Form 1095-C is required for all full-time employees, as well as anyone who had coverage through your plan, so there may be situations where you are required to produce a 1095-C for individuals that do not meet the ACA full-time employee definition that identifies those employees for whom you have an employer shared responsibility requirement. In these situations, Part II can cause concern, or an initial fear, that a penalty could be assessed because these individuals may not meet the affordability requirement. Remember, these individuals do not meet the full-time definition, therefore, they cannot trigger an employer shared responsibility penalty.

That’s 1095-B and 1095-C in a nutshell, albeit a very large nutshell. Although there are still a lot of crazy characters associated with ACA reporting, perhaps this has shed some light on the dark hole you may feel like you fell into and, hopefully, you can parlay it into a smoother reporting process in the new year. Happy reporting!

Resources

Employers that did not fulfill all of their obligations under the employer shared responsibility provision (play or pay) in regard to the 2015 plan year might owe a penalty to the IRS. In addition, employers will be notified if an employee who either was not offered coverage, or who was not offered affordable, minimum value, or minimum essential coverage, goes to the Exchange and gets a subsidy or “advance premium tax credit.” To understand this “Employer Notice Program” the appeals process, and how affordability must be documented, request UBA’s newest ACA Advisor, “IRS reporting Now What?”

UBA has created a template letter that employers may use to draft written communication to employees regarding what to expect in relation to IRS Forms 1095-B and 1095-C, and what employees should do with a form or forms they receive. The template is meant to be adjustable for each employer, and further information could be added if it is pertinent to the employer or its workforce. Employers can now request this template tool from a local UBA Partner.

Originally published by www.ubabenefits.com

Measuring program value, or return on investment, is critical and imperative in managing a healthy wellness program. Further, clearly identifying and objectively evaluating the impact helps keep the vendor focused on what is critical for the employer. If these programs are not having the impact intended, then the cost of those services is only adding to medical spending waste.

When adding wellness services to any employer benefits package, it is imperative to clearly identify the intended impact and outcome. Outcomes fall into three general categories:

  1. Employee satisfaction with the employer, which adds to recruitment and retention
  2. Reducing biometric risk and improving the health of the population
  3. Reducing medical spending

Employee Satisfaction

In the book, Shared Values, Shared Results by Dee W. Eddington, Ph.D., and Jennifer S. Pitts, Ph.D., the value of employees appreciating the benefits an employer offers is clearly outlined as a win-win strategy. If an employer’s intent in providing wellness services is to improve the support for its employees, then measuring the satisfaction related to those outcomes is critical. Employee surveys are typically the best approach to gather outcomes related to these intended programs. Some key questions to ask may include:

  • Is working at this organization beneficial for my health? (“Strongly Agree” to “Disagree” responses)
  • Do I trust that my organization cares about me? (“Strongly Agree” to “Disagree” responses)
  • Which of the following wellness program initiatives do you find to be valuable? (list all programs offered)

Collecting employee, or spouse, feedback on these programs will provide insight to allow an employer/ consultant to know if programs are appreciated, or if modifications are required in order to achieve the desired outcomes.

Reducing Biometric Risk and Controlling Disease

If the intent of a wellness program is to help improve the health of individuals so that future medical spending will be reduced, then it is critical to determine if the program is engaging the correct members and then measure the impact on their risk. At Vital Incite, we utilize Johns Hopkins’ risk indexing along with biometric risk migration to provide feedback to vendors and employers of the impact of their programs. Some suggested goals may include:

  • Engaging 80 percent of persons with high risk biometrics
  • Reduction in weight of persons overweight or obese by greater than 5 percent in 30 percent of the engaged population
  • Of diabetics with an A1c greater than 7 percent, 80 percent will reduce their A1c by 1 percent in one year
  • Of persons with blood pressure in the high-risk range, 40 percent will have achieved controlled blood pressure without adding medications in one year
  • Of persons who take fewer than 10,000 steps per day, 70 percent will increase their average step count by 20 percent or more

These goals need to be very specific and targeted to address the exact needs of your population, measuring what is most likely to have an impact on a person’s long-term health. This provides specific direction for your wellness providers, but allows an employer/consultant to monitor the impact throughout the year to continue to redirect communication and services to help provide the best outcomes.

The first step in any program is to engage the intended audience. UBA’s Health Plan Survey finds that 54.6 percent of employers with wellness programs use components such as on-site or telephone coaching for high-risk employees, an increase of 7.5 percent from last year. Once you target the intended audience, engagement of those at risk is critical. Monitoring this subset of data can make sure the vendor resources are directed appropriately and, many times, identify areas where the employer may be able to help.

Engagement of High Risk Individuals in CoachingOf course, engagement is only the first step and the intended outcome is to reduce risk or slow down the progression of risk increasing, that is really the final outcome desired. The following illustration allows employers and the vendor solution to monitor the true impact of the program by reviewing the risk control, or improvement based on program participation.

Participant vs non-participant results

Reducing Medical Spending

Although many employers are interested in helping their employees become healthier, the reality is these efforts have to help reduce medical costs or increase productivity so these efforts are sustainable. Since, to date, few employers have data on productivity, the analysis then is focused on reducing medical spending. The correct analysis depends on the size of your population and the targeted audience, but a general analysis to determine if those engaged are costing less than persons who have similar risk on your plan would look something like the analysis below.

participant engagement chart

If your program is targeted specifically on a disease state, then the impact on the cost to care for that disease state may be more appropriate. In the example below, the employer instituted a program to help asthmatics, and therefore, the analysis is related to the total cost to care for asthma comparing the year prior to the program to the year of the program. In this analysis, the impact is very clear.

Impact of Program on Cost for all ID-Asthma

The employer anticipated first year savings due to high emergency room (ER) utilization for persons with asthma and the report proved that along with ER utilization declining, the total cost of care for asthma significantly declined.

Summary

In summary, having a clear understanding of the expectation and desired outcomes and monitoring that impact throughout the year, we believe, drives better outcomes. When we first started analyzing outcomes of programs, the impact of many programs were far less impressive than vendor reports would allow us to believe. That false sense of security is not because they were trying to falsify information, but the reports did not provide enough detail to fully illustrate the impact. Most vendor partners don’t have access to all of the data to provide a full analysis and others will only show what makes them look good. But, if you identify the impact you need in order to achieve success, all parties involved focus on that priority and continually work to improve that impact. We believe that wellness programs can have an impact on a population culture, health and cost of care if appropriately managed.

Originally published by www.ubabenefits.com

Recently, the U.S. Department of the Treasury, Department of Labor (DOL), and Department of Health and Human Services (HHS) (collectively the Departments) issued final regulations regarding the definition of short-term, limited-duration insurance, standards for travel insurance and supplemental health insurance coverage to be considered excepted benefits, and an amendment relating to the prohibition on lifetime and annual dollar limits.

Effective Date and Applicability Date

These final regulations are effective on December 30, 2016. These final regulations apply beginning on the first day of the first plan or policy year beginning on or after January 1, 2017.

Short-Term, Limited-Duration Insurance

Short-term, limited-duration insurance is a type of health insurance coverage designed to fill temporary gaps in coverage when an individual is transitioning from one plan or coverage to another plan or coverage. Although short-term, limited-duration insurance is not an excepted benefit, it is exempt from Public Health Service Act (PHS Act) requirements because it is not individual health insurance coverage. The PHS Act provides that the term ‘‘individual health insurance coverage’’ means health insurance coverage offered to individuals in the individual market, but does not include short-term, limited-duration insurance.

On June 10, 2016, the Departments proposed regulations to address the issue of short-term, limited-duration insurance being sold as a type of primary coverage.

The Departments have finalized the proposed regulations without change. The final regulations define short-term, limited-duration insurance so that the coverage must be less than three months in duration, including any period for which the policy may be renewed. The permitted coverage period takes into account extensions made by the policyholder ‘‘with or without the issuer’s consent.’’ A notice must be prominently displayed in the contract and in any application materials provided in connection with enrollment in such coverage with the following language:

THIS IS NOT QUALIFYING HEALTH COVERAGE (‘‘MINIMUM ESSENTIAL COVERAGE’’) THAT SATISFIES THE HEALTH COVERAGE REQUIREMENT OF THE AFFORDABLE CARE ACT. IF YOU DON’T HAVE MINIMUM ESSENTIAL COVERAGE, YOU MAY OWE AN ADDITIONAL PAYMENT WITH YOUR TAXES.

The revised definition of short-term, limited-duration insurance applies for policy years beginning on or after January 1, 2017.

Because state regulators may have approved short-term, limited-duration insurance products for sale in 2017 that met the definition in effect prior to January 1, 2017, HHS will not take enforcement action against an issuer with respect to the issuer’s sale of a short-term, limited-duration insurance product before April 1, 2017, on the ground that the coverage period is three months or more, provided that the coverage ends on or before December 31, 2017, and otherwise complies with the definition of short-term, limited-duration insurance in effect under the regulations. States may also elect not to take enforcement actions against issuers with respect to such coverage sold before April 1, 2017.

For information on final regulations regarding excepted benefits, specifically similar supplemental coverage and travel insurance—as well as information on the definition of essential health benefits for purposes of the prohibition on lifetime and annual limits, view UBA’s ACA Advisor, “Regulations Regarding Short-Term Limited-Duration Insurance, Excepted Benefits, and Lifetime/Annual Limits.”

Originally published by www.ubabenefits.com

Most Partners of United Benefit Advisors (UBA) and their clients have benefits enrollment down pat. They know what to communicate to employees, and when. Employees, too, are usually familiar with the process. For example, they know what to expect when they start comparing their medical plan options to their 401(k) contributions. But not all benefits are created equally. Some require more communication, understanding, and detail. Long-term care insurance (LTCi) is one of those products. More than any other benefit, it calls for well-thought-out employee education.

LTCi education is critical to employees for the following reasons:

Underwriting concessions are available for a limited time only and an employee’s health determines approval. Employers are able to offer LTCi with reduced underwriting, but the employees can only take advantage of this offer during initial enrollment. It will not be available at any other time – including during future open-enrollment periods – so it’s essential that employees understand the advantages of this benefit at a time when they will receive their best opportunity for approval.
LTCi isn’t just another voluntary benefit, it’s an important component of any employee’s retirement plan. Long-term care can be a huge financial burden for many Americans. Those who buy LTCi are doing so to protect their savings and assets down the road. As a result, LTCi becomes a critical aspect of an overall retirement plan. Employees will want guidance on which coverage options best suit their financial needs.
LTCi is often a one-time purchase and employees may face closed plans and rate increases. Unlike other benefits where providers may change from year-to-year, the majority of LTCi purchasers will hold on to their original plan for life. As the market evolves and carriers develop new products, an employer may be administering multiple LTCi programs to employees. Employees will be curious how their plan stacks up – especially if they have a plan with MetLife, John Hancock, Prudential, or CNA since those carriers no longer offer new LTCi plans. Employees may also be impacted by rate increases with these carriers and will need education-based support on what decisions to make regarding their increased premium. Helping employees compare programs will allow them to make an informed decision about their plan.

What Employees Need to Know

Employees need focused time, separate from other benefits education, to learn about LTCi. It is important to communicate with them, both in writings and through in-person or Web meetings, so that they can learn:

What long-term care is, how likely it is they will need it, how it’s delivered, and the costs associated with it
What LTCi covers and how it differs from other benefits
The risks associated with not having LTCi
Myths about long-term care coverage (for example, that it’s only needed by the elderly or that it only covers nursing home care)
An overview of options and an understanding of all possible solutions for long-term care
Tax incentives available for LTCi
The right time to buy LTCi and the risks associated with waiting
Decision-making tools to help select the best coverage levels for their needs

We’ve had a great reception from UBA Partners and clients who are interested in LTCi for their employees. One of the primary themes we continue to hear is that LTCi is on the to-do list for many brokers and employers. When employees have all of this information laid out in an accessible, easy-to-understand way, they will be able to make informed decisions about this valuable benefit.

Originally published by www.ubabenefits.com