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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.

 

 

 

 

Clear the Shelters 2015!

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Calling all animal lovers!!  A friendly reminder from Team Kaminsky … the Annual Clear the Shelter Day is August 15th!  Adoption fees will be waived!  Please help find forever homes for deserving animals.  Find out more here!

IRS Issues Drafts of Instructions for Employer and Individual Responsibility Reporting Forms

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IRS Issues Drafts of Instructions for Employer and Individual Responsibility Reporting Forms

The following is a summary of draft instructions.

Some of this information may change when the final forms and instructions are released.

In order for the Internal Revenue Service (IRS) to verify that individuals have the required minimum essential coverage, individuals who request premium tax credits are entitled to them, and large employers are meeting their shared responsibility (play or pay) obligations, employers and insurers will be required to report the health coverage they offer. Reporting will first be due early in 2016, based on coverage in 2015.

The reporting requirements are in Sections 6055 and 6056 of the Patient Protection and Affordable Care Act (PPACA); IRS Form 1095-B is basically used to meet the Section 6055 minimum essential coverage requirement and IRS Form 1095-C is basically used to meet the Section 6056 large employer play or pay requirement and to help determine if an individual is eligible for a premium tax credit.

On August 28, 2014, the IRS issued draft instructions for completing the forms; drafts of the forms were issued on July 24, 2014. The IRS has said that the final forms and instructions will be available by the end of 2014. While there will probably be a few changes between the draft and final versions of the requirements, the reporting requirements are becoming clear enough for employers to begin planning to meet this requirement. The IRS has also issued a Q and A on Section 6055 Reporting and a Q and A on Section 6056 Reporting. Both the instructions and Q and A documents contain detailed information that employers may find very helpful.

Although reporting will not begin until 2016, the reporting will reflect coverage offered and elected during the 2015 calendar year (regardless of whether the plan is a calendar year or non-calendar year plan). Employers with 50 or more employees should soon begin assessing their data gathering and systems to be sure they will be able to access and report the needed information when reporting begins. An employer’s reporting obligation varies by its size, its funding method (self-funded or fully insured), and whether it is part of a controlled group.


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Employer with Fully Insured Plans and Fewer than 50 Full-Time and Full-Time Equivalent Employees in its Controlled Group

An employer will not have any reporting requirement if it had fewer than 50 full-time and full-time equivalent employees in its controlled group during the prior calendar year and it sponsors a fully insured medical plan. The insurer will provide reporting to each covered employee using IRS Form 1095-B – this form will report which months the employee and any dependents had minimum essential (basic medical) coverage. If an employer sponsors the plan, that also will be reported on the form.

Employer with Self-Funded Plan and Fewer than 50 Full-Time and Full-Time Equivalent Employees in Controlled Group; Self-Funded Multiemployer Plans of All Sizes

An employer with fewer than 50 full-time and full-time equivalent employees in its controlled group and which sponsors a self-funded medical plan will provide reporting to each covered employee using IRS Form 1095-B. Likewise, the plan sponsor of a self-funded multiemployer plan (such as its board of trustees or committee) will be responsible for providing a completed Form 1095-B to each covered member, regardless of how large the multiemployer plan is. This form describes which months the employee or member and any dependents had minimum essential (basic medical) coverage. See Appendix A for details.

The plan sponsor also will file a Form 1094-B transmittal form with a copy of each Form 1095-B it provided to a participant.

Employer with Fully Insured Plan and 50 or More Full-Time and Full-Time Equivalent Employees in its Controlled Group

An employer that had 50 or more full-time and full-time equivalent employees in its controlled group during the prior calendar year and that sponsors a fully insured medical plan will be required to complete several parts of IRS Forms 1095-C and 1094-C to report its compliance with the play or pay requirements. Although the play or pay requirements do not apply to many employers with 50 to 99 employees for 2015, reporting is still required for 2015 to help the IRS administer the individual requirements and premium tax credit eligibility. A series of codes will be used by the mid-size employer to alert the IRS to its status as an employer in the 50 to 99 employee group, and that penalties therefore are not due for 2015.

Form 1095-C will be used to determine whether an employee, spouse and children were offered minimum essential coverage, and if so, whether the coverage offered to the employee was affordable and met minimum value. This information will be used to help determine whether the employee or dependent is eligible for a premium tax credit, and whether penalties apply to the employer. Extensive information must be reported, generally by calendar month. See Appendix B for details on the information that likely will need to be provided. Form 1095-C must be provided to any employee who worked full-time for the employer at any time during the year – even if the person only worked for one month, or was never eligible for coverage. Therefore, the form will need to be provided to an individual who retired during the year.

Note: The insurer will provide reporting to each covered employee using IRS Form 1095-B. This form will describe which months the employee and any dependents actually had minimum essential (basic medical) coverage that satisfies the individual mandate. As a result, employees will receive forms from both the employer and the insurer.

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Employer with a Self-Funded Plan and 50 or More Full-Time and Full-Time Equivalent Employees in its Controlled Group

An employer with 50 or more full-time or full-time equivalent employees in its controlled group during the prior calendar year and which offers a self-funded plan is responsible for completing all parts of Form 1095-C and much of Form 1094-C. Extensive reporting will be needed, by employee by calendar month, as to whether minimum essential coverage was offered, whether minimum essential coverage was actually in effect, and whether affordable, minimum value coverage was offered. See Appendices B and C for details on what must be reported.

Form 1095-C must be provided to any employee who worked full-time for the employer at any time during the year – even if the person only worked for one month, or was never eligible for coverage. The form will need to be provided to an individual who retired during the year. The employer also must provide a Form 1095-C to any employee who received coverage during the year, even if the employee is not full-time.

An employer may only file one Form 1095-C per employee, which means, for example, that if different divisions have different benefits, and an employee moves between divisions during the year, the employer will need to consolidate data onto one 1095-C form.

The employer also will file a Form 1094-C transmittal form with a copy of each Form 1095-C. Form 1094-C also requires information about the employer’s workforce. Multiple Form 1094-Cs may be filed if that is easier, but one must be designated as the “authoritative transmittal.”

Employer in a Controlled Group with 50 or More Full-Time and Full-Time Equivalent Employees

An employer that is in a controlled group (basically, a situation in which an individual, group of individuals or company owns a significant part of more than one entity) must list all of the employers in its controlled group (or the 30 largest if there are more than 30 employers in the controlled group) on Form 1094-C. Each employer within the controlled group must file its own Forms 1095-C and 1094-C, although one entity can prepare all of the forms for the group. See Appendix D for details on the information that will be needed.

Due Dates and Privacy

The individual’s Form 1095 will first be due on February 1, 2016. The employer’s “roll-up” and other reporting using an IRS Form 1094 will first be due on February 29, 2016, if filing with paper and by March 31, 2016, if filing electronically.

An employer that is concerned about maintaining and transmitting Social Security numbers may use truncated numbers (XXX-XX-1234) on Form 1095-C it provides to the employee, but not on the version it provides to the IRS. Substitute forms will be permitted.

An employer must make three attempts to obtain the Social Security number of the individual. One attempt must be made when the person first becomes covered, with additional attempts the following calendar years.

 

 

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In summary, the reporting requirements are:

Fully Insured
< 50 FTEs
Fully Insured
50+ FTEs
Self-Funded
< 50 FTEs
Self-Funded
50+ FTEs
Marketplace Coverage
Forms to employee 1095-B 1095-B /

1095-C (Parts I and II only)

1095-B 1095-C (all Parts) 1095-A
Filed by Insurer Insurer / Employer Plan Sponsor (generally the employer) Plan Sponsor (generally the employer) Marketplace
Forms to IRS 1094-B 1094-B (with copies of all 1095-Bs) /

1094-C (with copies of all 1095-Cs)

1094-C (with copies of all 1095-Cs) 1094-C (with copies of all 1095-Cs) 1094-A
Filed by Insurer Insurer / Employer Plan Sponsor Plan Sponsor Marketplace

 

Employees who receive a premium tax credit/subsidy through the Marketplace will file an IRS Form 8962 with their federal income tax return, using information provided on Form 1095-A. Employees who claim an exemption from the individual-shared responsibility requirement will use Form 8965 to claim the exemption.

The IRS will match information provided on the various forms to determine whether the employer or individual owes a penalty and if premium tax credits were made in the correct amount. Employer penalties are expected to be assessed during the summer of the year in which reporting occurred. Individual penalties will be applied to any refund due the employee. Any needed adjustment to a premium tax credit will be made as an additional income tax refund or amount due from the employee when the employee files his federal income tax return.

 

 

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Appendix A

Based on the draft reporting forms and instructions, the following information will be needed to complete Forms 1095-B and transmittal Form 1094-B. Form 1095-B will be completed by insurers, employers with fewer than 50 full-time and full-time equivalent employees in their controlled group that sponsor self-funded plans, and plan sponsors of self-funded multiemployer plans.

Form 1095-B will be used to report that individuals had minimum essential coverage in effect and will include:

  • The name, address, and Social Security number of the “responsible individual” (typically the employee, union member, or primary insured (date of birth may be used if a Social Security number is not available)
  • The name and Social Security number (or date of birth if a Social Security number is not available) of each covered spouse and dependent
  • The calendar months each employee, spouse, or dependent child was covered (if the person was covered for the whole year, that must be reported by year rather than month by month)
  • The origin of the policy (whether coverage is through the SHOP Marketplace, an employer, the government, individual insurance, a multiemployer plan, or miscellaneous minimum essential coverage)
  • The name, address, and Employer Identification Number (EIN) of an employer sponsoring the plan
  • The Small Business Health Options Program (SHOP) Marketplace unique identifier if coverage is provided through the SHOP

Each responsible individual will receive a Form 1095-B describing the person’s own coverage. In addition, the employer must file the Form 1094-B transmittal form with a copy of each completed Form 1095-B. To complete the Form 1094-B this information is expected to be needed:

  • The insurer’s or plan sponsor’s complete name, address, and EIN and the name and phone number of a contact person (who does not need to be an employee)
  • The total number of 1095-B forms submitted with that particular transmittal form.

 

Appendix B

Based on the draft reporting forms and instructions, this information will be needed by all large employers (those that averaged 50 or more full-time or full-time equivalent employees in their controlled group during the prior calendar year), regardless of whether the plan is fully insured or self-funded, in order to complete Parts I and II of Forms 1095-C:

  • The name, address, and Social Security number of the employee
  • The name, address, federal Employer Identification Number (EIN) and a contact telephone number for the employer (it appears that the contact telephone number can be that of a third party)
  • Information on the coverage offered to the employee, using a series of codes. If coverage did not vary during the calendar year, the employer must use one code to report all 12 months. If coverage varied during the year, a code is needed for each month. The reporting will be made on a calendar year basis, even if the employer has a non-calendar year plan. All months must be completed even if the employee only worked for the employer for part of the year. Coverage is measured as of either the first day or the last day of the month (this is the employer’s choice, but the same date must be used consistently). The proposed codes are:
    • Offered minimum value coverage to the employee with an employee contribution for self-only coverage less than or equal to 9.5% of the federal poverty level (FPL) for the 48 contiguous states and offered minimum essential coverage to the spouse and dependent children (a “qualifying offer”)
    • Offered minimum value coverage to the employee only
    • Offered minimum value coverage to the employee and at least minimum essential coverage to the employee’s dependent children (but not to the spouse)
    • Offered minimum value coverage to the employee and at least minimum essential coverage to the spouse (but not to the employee’s dependent children)
    • Offered minimum value coverage to the employee and at least minimum essential coverage to both the dependent children and the spouse
    • Offered coverage that is minimum essential coverage but does not provide minimum value to the employee, or to the employee and the employee’s spouse or dependents, or to the employee the employee’s spouse and dependents
    • No medical coverage offered at all, or the coverage that is offered is not minimum essential coverage
    • Offered self-funded coverage to an employee who works less than full-time
    • 2015 qualifying offer transition relief (employee, spouse or dependents received no offer of coverage, or received an offer of coverage that is not a “qualifying offer,” or received a “qualifying offer” for less than all 12 months but 95% of the employees did receive such an offer; see Appendix E for details)
  • If the offered coverage meets minimum value, the employee share (to the nearest cent) of the lowest cost monthly premium for self-only minimum value coverage for which the employee is eligible for each month (not the premium for the coverage the employee has elected)
  • Employee status codes, which in some cases will be used by the IRS to determine whether a penalty is owed. The status codes are:
    • Employee was not employed during the month
    • Employee was not a full-time employee
    • Employee was enrolled in the coverage offered
    • Employee was in a “limited non assessment period” (for example, a new employee was within the first three full calendar months of employment)
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Multiemployer interim rule relief applies (essentially, the employer is credited with its contribution for coverage under a multiemployer plan)

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Coverage is affordable using the W-2 safe harbor (the cost of single coverage for the least expensive option that provides minimum value did not exceed 9.5% of the employee’s Form W-2, Box 1 income for the year that is being reported)

  • Coverage is affordable using the federal poverty line safe harbor (the cost of single coverage for the least expensive option that provides minimum value did not exceed 9.5% of the FPL for the 48 contiguous states for the year that is being reported)
  • Coverage is affordable using the rate of pay safe harbor (generally, the cost of single coverage for the least expensive option that provides minimum value did not exceed 9.5% of the employee’s rate of pay at the beginning of the coverage year that is being reported)
  • Non-calendar year transition relief applies (i.e., the employer is using a plan year other than a calendar year and qualifies under the transition rules to delay compliance with the play or pay requirement until the start of the 2015 plan year)

If an employee qualifies for more than one code, there are rules as to which one to use.

Each full-time employee will receive a Form 1095-C describing the employee’s own offer. In addition, the employer must file the Form 1094-C transmittal form with a copy of each completed Form 1095-C. To complete the Form 1094-C this information is expected to be needed:

  • The employer’s name, address, and EIN and the name and phone number of a contact person (who does not need to be an employee)
  • The total number of 1095-C forms submitted with that particular transmittal form. (An employer may file more than one Form 1094-C if that simplifies reporting. However, one of the forms must then be designated as the “authoritative transmittal.”)

One Form 1094-C must be designated as the “authoritative transmittal” and include:

  • The total number of 1095-C forms submitted by the employer
  • Whether the employer is part of an ALE Aggregated Group (i.e., a controlled or affiliated service group) with 50 or more full-time or full-time equivalent employees
  • Whether the employer is exempt from some or all reporting or penalties because of its size, 2015 transition rules, or offering coverage to a very high percentage of individuals (see Appendix E for details)
  • On a month by month basis (or for the full year if nothing changes):
    • Whether minimum essential coverage was offered to at least 95% of full-time employees and dependents (excluding those in a waiting period)
    • The total number of full-time employees of that employer for the calendar month excluding those in a waiting period (the count may be made as of the first day or the last day of the month, but a consistent date must be used; an employer that offers affordable minimum value coverage to 98% of its full-time employees and their spouse and dependent children does not need to report the employee count)
    • The total employee count, including part-time employees, for the calendar month (the count may be made as of the first day or the last day of the month, but a consistent date must be used)
    • W hether the employer is part of a controlled or affiliated service group for a calendar month, or the full year
    • Whether the employer qualifies for transition relief for 2015 either because it had 50 to 99 employees or because of the “free 80 employees” rule

“Minimum essential” coverage is basic medical coverage. Coverage does not need to include the 10 essential health benefits to be considered minimum essential coverage. “Minimum value” coverage is medical coverage that has an actuarial value of at least 60%.

 

Appendix C

Based on the draft reporting forms and instructions, large employers (those that averaged 50 or more full-time or full-time equivalent employees in their controlled group during the prior calendar year) and that sponsor a self-funded plan will need this information to complete Part III of Form 1095-C. These employers will also need to complete Parts I and II of Form 1095-C (see Appendix B for details) and Transmittal Form 1094-C.

To complete Part III the employer will need:

  • The name and Social Security number (or date of birth if a Social Security number is not available) of each covered person
  • The calendar months each person was covered (if the person was covered for the whole year, that must be reported annually rather than month by month)

 

Appendix D

Based on the draft reporting forms and instructions, large employers that were part of a controlled or affiliated service group also must complete Part IV of Form 1094-C.

Each employer must enter the name and EIN of all other employers that were part of the group during all or part of the calendar year. If there are more than 30 employers in the group, only the 30 largest will be reported. The other employers must be listed in descending order with the employer with the largest average number of full-time employees listed first.

The employer will report which months it was part of the controlled group in column (d) of Part III of Form 1094-C.

 

Appendix E

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Employers that offer particularly generous coverage may use alternative, simplified reporting instead of the “general” reporting explained above. Depending on the situation, the employer may be able to use alternative reporting for some employees even though it must use the general reporting method for

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others. The employer also may use different alternative reporting methods for different groups of employees. Three alternative methods will be available for reporting on coverage offered in 2015:

  1. If the employer makes a “qualifying offer” for each month in the calendar year, it can provide a code instead of the cost of coverage information on line 15 of Form 1095-C and provide streamlined reporting to the covered employees. The streamlined reporting must include the employer’s name, address and EIN, a contact name and phone number, and a statement indicating that, for all 12 months of the calendar year, the employee and his or her spouse and dependents, if any, received a “qualifying offer” and therefore are not eligible for a premium tax credit. If the employee was not eligible for the full year, this alternative method may not be used for that employee. A “qualifying offer” is an offer that meets all of these requirements:
  • Is offered to the employee and to any spouse and dependent children
  • Provides minimum value
  • Has an employee contribution for single coverage that is less than 9.5% of the federal poverty level (FPL) in the 48 contiguous states (which would be a maximum contribution for 2014 of $92.38 per month)

 

  1. If the employer offers affordable, minimum value coverage to at least 98% of its total employees (regardless of whether they are full-time or part-time) it does not need to report whether an employee is full-time and it does not need to provide a count of its full-time employees. However, it will still need to provide a Form 1095-C to each of its employees which includes all of the other information required, and if an employee requests a premium tax credit, it will need to respond to an IRS inquiry about the employee’s work and coverage status.

 

For 2015 only, an employer may take advantage of the “qualifying offer method transitional relief method” if it has provided a “qualifying offer” to 95% of its full-time employees, their spouses, and dependents during 2015. Instead of reporting the cost of coverage on Form 1095-C the employer will use a code for each month to indicate whether the employee did or did not receive a qualifying offer for the month. Instead of providing the completed Form 1095-C to the employee the employer may provide a statement that includes the employer’s name, address and EIN, a contact name and phone number, and one of two statements. If the employee and his or her spouse and dependents, if any, received a qualifying offer for all 12 months of the calendar year and therefore are not eligible for a premium tax credit the statement will indicate that the employee and any dependents are not eligible for any premium tax credits for the year. Any full-time employees that do not receive a qualifying offer for all 12 months must receive a statement that they may be eligible for premium tax credits for any months in which a qualifying offer was not made. The employer

Employers Procrastinating? | Ohio Benefits Broker

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By Peter Freska, Benefits Advisor at The LBL Group
A UBA Partner Firm

Employee Benefit News published an article titled, “Employers procrastinating on ACA recordkeeping compliance.” It is an interesting read, as it refers to a recent survey by PricewaterhouseCoopers in which “Only 10% of some 480 employers in 36 industries responding to a recent poll have implemented an in-house or outsourced solution to comply with Affordable Care Act reporting requirements.” This is an alarming number, as employers may be subject to significant penalties for non-compliance.

To address these concerns, United Benefit Advisor (UBA) Partner Firms, such as The LBL Group, are working with our strategic partners to provide employers with solutions. Employers will need to address the following reporting requirements:

PPACA reporting requirements

Our solutions include both stand-alone and integrated tracking, measurement and filing systems so that employers affiliated with UBA Partner Firms can choose the solution that best fits their needs, rather than the needs of the service provider. In addition, our national compliance team continues to monitor and educate our partners on the latest developments, as they happen. These PPACA updates are available to the more than 17,000 plan sponsors working with trusted advisors from UBA.

In essence, employers are working with multiple data sources, systems, and people. For large and small employers this can be a daunting task. Education, understanding, services and systems, are all great, but having an advisor from a UBA Partner Firm on your team can make all the difference in how employers choose to move forward in complying with the laws of the land.

For comprehensive information on PPACA reporting requirements including coverage requirements, due dates, special circumstances, controlled groups and how to complete the forms – including sample situations – request UBA’s PPACA Advisor, “IRS Issues Final Forms and Instructions for Employer and Individual Shared Responsibility Reporting Forms”.

Topics: PPACA, UBA Partner Firms, PPACA Affordable Care Act, PPACA reporting, employer-shared responsibility reporting, The LBL Group

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The Key to Reducing Health Care Costs – Have We Found It?

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By Elizabeth Kay, Compliance & Retention Analyst
AEIS Advisors
A UBA Partner Firm

Self-funding is a very hot topic these days for a number of reasons. For small group employers offering a self-funded plan this means they can charge a composite premium rate based on the employee population versus the community rates that are based on each individual enrollee’s age. For all employer sizes this also means that they are not subject to all of the taxes under the Patient Protection and Affordable Care Act (PPACA), which alone can translate into a savings of 3% to 4% of their premiums.

However, could self-funding be one of the keys to locking down the inflating cost of health care?

In recent years, insurance carriers came out with products called Consumer Driven Health Plans (CDHPs). These plans all had very high deductibles and many of them did not cover any services until the deductible had been met. Some were Health Savings Account (HSA) compatible, meaning that if you enrolled in a qualified HSA plan, you could also open a Health Savings Account and deposit funds on a pre-tax basis that could be used for qualified medical expenses.

These plans were generated with the thinking that if the consumer knew how much it was going to cost for them to get that MRI, or that shoulder surgery, then maybe they would think twice to determine if it was really necessary. Or they may shop around at different pharmacies to see where they could get their medication for the least amount and thereby reduce the spending and reduce the cost of health care and health insurance premiums.

Unfortunately, this plan backfired for a number of reasons. First, the premiums were so low on many of these plans that it was worthwhile for someone with severe health problems to enroll and then pay for their procedures with tax-free money. And the best part was that the insurance carrier paid for all in-network claims at 100% after they met their deductible. For example, if you expected to be undergoing knee replacement surgery, you could pay your $2,500 deductible with tax-free dollars, and have no other out-of-pocket costs for the rest of the calendar year for medical procedures. This resulted in huge premium increases to offset the amount of claims and utilization the carriers were experiencing under those plans.

Second, many people, especially in low income areas, did not get the care they should have received because it was too expensive, and then had higher cost of care later on to treat something that could have been prevented, or caught at an earlier, more treatable stage.

Third, the concept of CDHP plans did not address the fact that the people who have the highest cost of medical care per year ($48,580 on average) are the aging population above 85 years old. They are mostly enrolled in Medicare, and Medicare Supplement plans, not CDHP plans. Their spending has not been affected as a result of this strategy and the 85 and older population is continuing to grow at a steady pace. In fact, it is the largest growing age bracket. Medicare pays a very low rate for services to providers, and in order to cover the expense, the provider charges those with private insurance more for the same services to help cover their losses. When Medicare was created, four taxpayers helped to subsidize the cost of medical care for one person on Medicare. By 2050, it is projected that this ratio will be one-to-one. Every taxpayer will be subsidizing the cost of care for someone that is enrolled in Medicare. Can you imagine what will this do to insurance premium rates and the overall cost of health care?

But what is the answer? Is there a key that will unlock the door to reduced health care costs? In reality, the door most likely has many locks, and each component that factors into the cost of health care will need to be addressed if we are really going to find a long-term solution. But could one of the keys be self-funded medical plans?

Living in the Information Age, we know that data can tell us a lot. Whole industries are based on the simple collection and analysis of data. When a plan is self-funded, it gives employers access to data. This claims data allows an employer, with the help of an Employee Benefits Advisor, to analyze where they have the highest areas of utilization, where there may be some unnecessary spending (for example, employees seeking emergency room services when they could have been easily treated at an urgent care facility), and areas where the plan benefits are not being used (such as acupuncture benefits), and modify the plan accordingly to reduce spending and reduce premiums. For example, the employer could increase emergency room copays and reduce urgent care copays to encourage more utilization of lower cost urgent care facilities, instead of going to the emergency room, and cut out acupuncture benefits, thereby reducing the plan premiums and overall claims spending for the following plan year.

This helps the consumer, or employee make better choices, and helps to address the needs of the employees themselves, instead of asking them to utilize an insurance plan that was just taken off the shelf, so to speak, and making it work for them.

Another way that self-funding plans can have an impact on health care costs is their focus on wellness. It has been well established that the healthier a group is, the fewer claims they will experience, and the higher their presenteeism will be in the workplace. So it is no wonder that when an employer implements a self-funded health plan, it wants its employees to be as healthy as they can be and, in many cases, implements a wellness program that may include issuing Fit-Bits (i.e., biometric/fitness trackers) to all of its employees, sponsoring biometric screenings on-site for employees and spouses, and offering flu shot clinics, as just some examples.

So we know that employers can have an impact on the cost of health care by modifying their benefit plan designs to meet the specific needs of their employees, encouraging wise utilization, and implementing wellness plans. But what about the carriers themselves?

Cigna has implemented a Collaborative Care Program with more than 120 physician groups in 29 states, including provider groups Palo Alto Medical Foundation (PAMF) and Brown & Toland in the San Francisco Bay Area. According to Peter Welch, the Northern California President of Cigna Healthcare, Cigna and PAMF were able to reduce their inflation trend by 5% compared to other providers in the San Francisco Bay Area through this collaboration. The Collaborative Care Program includes a number of different critical pieces that range from clinical care coordinators, to health education and access to clinical programs that address disease management for chronic conditions, to Cigna providing detailed reports to the providers showing efficiency and quality of the care provided to their Cigna patients. These reports help to identify trends and cost outliers, and allow the provider to target opportunities where they can improve care and cost effectiveness of procedures.

Cigna and its providers participating in the Collaborative Care Program have successfully reduced health care costs through their combined efforts, which is wonderful. Could these collaborations between carriers and providers, in conjunction with wellness programs in the workplace, and employers implementing customized benefit plans through a self-funded insurance plan with the help of their trusted benefits advisor be the key to unlocking the door leading to reduced health care costs?

What about the long-term effects? If providers can become more effective at offering improved quality of care, and we as a society can be healthier, is it possible that as our population ages, the average annual spending for the 85 and older age bracket could go down? If we implement a healthier lifestyle during our careers, will we have fewer complications and medical conditions that we will need to be treated for as we age, and thereby reduce the number of times we need to see a doctor when we’re in our 70s, 80s, and even into our 90s? Can we put an end to shifting the cost of Medicare from the government to the private sector?

When it comes to reducing the cost of health care, every player has to do their part. I am encouraged by the progress that programs like Cigna’s Collaborative Care Program have made, and I am looking forward to seeing more. Every time I read a story about a company that implemented a self-funded health plan and wellness program, and how it helped to reduce their costs, boosted company morale and presenteeism, I get all warm and fuzzy inside. We can do it!

Topics: wellness, health care costs, self-funding, self funded health plans, consumer-driven health plan, Elizabeth Kay, Cigna Collaborative Care Program, claims data

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Proposed Rule on Wellness Programs under the Americans with Disabilities Act | Ohio Employee Benefit Advisors

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By Danielle Capilla, Chief Compliance Officer at United Benefit Advisors

Federal agencies recently released a Proposed Rule to amend regulations and provide guidance on implementing Title I of the Americans with Disabilities Act (ADA) as it relates to employer wellness programs.

Title I of the ADA applies to employers with 15 or more employees, prohibits discrimination against people with disabilities, and requires equal opportunity in promotion and benefits, among other things. Under the Proposed Rule, wellness programs that are part of or are provided by a group health plan or by a health insurance issuer (carrier) offering group health insurance in conjunction with a group health plan are required to provide a notice and describe the use of incentives. In the Proposed Rule, “group health plan” refers to both insured and self-insured group health plans. All of the other proposed changes relate to “health programs,” which include wellness programs regardless of whether they are offered as part of or outside of a group health plan or group health insurance coverage. The term “incentives” includes financial and in-kind incentives for participation such as awards of time off, prizes, or other items of value.

Rules for wellness programs have been in effect since 2007, with additional rules that went into effect for the 2014 plan year under the Patient Protection and Affordable Care Act (PPACA). Wellness programs are either “participatory” or “health-contingent.” A participatory program is one that either has no reward or penalty (such as providing free flu shots) or simply rewards participation (such as a program that reimburses the cost of a membership to a fitness facility or the cost of a seminar on nutrition). As long as a participatory program is equally offered to all similar employees, no special requirements will apply to the program.

Health-contingent wellness programs are either classified as “activity only” or “outcome based.” Health-contingent wellness programs are programs that base incentives or requirements in any way on an employee’s health status. Health status includes things like body mass index (BMI), blood glucose level, blood pressure, cholesterol level, fitness level, regularity of exercise, and nicotine use. A wellness program with health-contingent requirements must meet all of these requirements:

  • Give employees a chance to qualify for the incentive at least once a year
  • Cap the incentive at 30 percent of the total cost of employee-only coverage under the plan, including both the employee and employer contributions, with a 50 percent cap for tobacco cessation or reduction
  • Be reasonably designed to promote health or prevent disease
  • Provide that the full reward must be available to all similarly situated individuals with a “reasonable alternative” method of qualifying for the incentive for some individuals
  • Describe the availability of the alternative method of qualifying for the incentive in written program materials

The ADA restricts employers from obtaining medical information from employees by generally prohibiting them from making disability-related inquiries or requiring medical examinations, with an exception for voluntary medical examinations for wellness programs. The Proposed Rule announced that federal agencies decided that allowing certain incentives related to a wellness program, while limiting them to prevent economic coercion that could make the program involuntary, is the best way to achieve the purposes of the wellness program provisions of both the ADA and HIPAA.

Download UBA’s PPACA Advisor, “Proposed Rule on Wellness Programs Under the Americans with Disabilities Act” for comprehensive information on how the Proposed Rule:

  • Defines “voluntary”
  • Addresses the disclosure of medical information
  • Limits incentives
  • Defines when smoking cessation programs would be subject to incentive limitations
  • Would protect individually identifiable health information

The Proposed Rule requested comments from the industry on wellness programs generally as well as providing a list of specific topics on which it seeks input.

Topics: discrimination, wellness incentives, wellness programs, PPACA Affordable Care Act, Group health plans, Americans with Disabilities Act, ADA

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Tips for Handling Employee Pay Issues Caused By Mother Nature

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If you are inclined to believe “Punxsutawney Phil,” we’re in for another six weeks of wintry weather. When the groundhog emerged from his dwelling at Gobbler’s Knob in west-central Pennsylvania on February 2nd, he did not see his shadow. Let’s all hope for an early spring while we stay vigilant for more bad weather. Super storms packed punches in the Midwest and Northeast to start the New Year and continue adding to the area’s already taxed weather relief efforts. While your business may not have been affected by the recent superstorms, it is a great wakeup call to think through how businesses should handle the employee relations and pay issues that arise when they are forced to close due to inclement weather and/or when employees simply cannot get to work due to transportation or personal difficulties.

What should an employer do? Pay employees to stay at home? After all, in most cases, they are not at work through no fault of their own. Many businesses, however, do not have the financial resources to pay employees not to work. What follows are the rules regarding paying employees who miss work due to Mother Nature, along with some practical tips. From an employee relations perspective, the more generous you can afford to be to your employees who are suffering as a result of a weather-related disaster, the better. Employees (and their families) do pay attention to how they are treated, and a little extra time off and compassion for individual circumstances can go a long way towards enhancing employee loyalty.

If the company has no power and sends employees home for the day, should they be paid? And does it matter if the employee is exempt or nonexempt?

In general, there are two sets of rules for paying employees depending upon their classification under the Fair Labor Standards Act (FLSA) as it relates to eligibility for overtime. With nonexempt employees (those eligible for overtime pay), there is no obligation under federal or state law to pay for time not worked. However, under certain state laws, employers may have an obligation to compensate nonexempt employees under call-in/reporting pay laws, especially if the employees were not advised that they should not report to work and were denied work upon arrival at the workplace.

These pay obligations vary by state. With respect to salaried exempt employees who must be paid on a “salary basis” under the FLSA, employers may not make salary deductions for absences that result from an employer’s partial-week closing of operations, including closings due to weather-related emergencies or disasters. The bottom line is that exempt employees must be paid their full salary if they perform any work in a workweek and only miss work time due to the employer’s closure of operations. Closures for a full workweek need not be paid if no work is performed.

Are these rules different if the company can tell the employee not to come to work the next day?

For nonexempt employees, if they are told in advance not to come to work and the employees stay home, then the employer is under no obligation to pay them for the time off. The employer and the employee can choose to use accrued paid time off to compensate the employee for the missed workdays.

For exempt employees, the “salary basis” rule still applies. In some cases the employee may be working from home during the bad weather days. If state laws permit employers to do so, employers may deduct from the exempt employees’ accrued paid time off balances to resolve the issues related to “salary basis” compliance. The employer should ensure, however, that these employees have not done any work from home during the office closure prior to deducting time from the accrued paid time off bank balances.

If an employee is on Family and Medical Leave Act (FMLA) leave, do those “bad weather days” count against the employee’s 12-week allotment of time off?

The FMLA regulations are silent about bad weather office closures. However, the regulations do allow for situations when the employer’s business stops operating for a period of time and employees are not expected to come to work (plants closing for a few weeks to retool, mandatory company-wide summer vacation, etc). In that case, the week the business is closed and no employees are reporting to work would not count against the employee’s FMLA leave entitlement. If the business is closed for a shorter period of time, the general thinking is that the FMLA regulations relating to holidays would likely apply. Under those rules, if the business is closed for a day or two during a week in which the employee is on FMLA leave, then the entire week would count against the employee’s FMLA leave entitlement. If, however, the employee is on intermittent FMLA leave, then only the days that the business is closed and the employee is expected to be at work would count against the leave entitlement.

How do we handle attendance issues where the office is open but public transportation is not available due to the weather and employees cannot come to work?

If the business remains open but employees cannot get to work because of the weather, employers will need to consider their own attendance policies and practices in determining what flexibility to give employees as it relates to attendance. Employers may encourage employees to car pool or assist them in establishing alternative methods of transportation to get to work.

Under the FLSA rules as it relates to pay, however, employers do not need to pay nonexempt employees if they perform no work. For exempt employees, if the business remains open but an employee cannot get to work because of the weather, an employer can deduct an exempt employee’s salary for a full day’s absence taken for personal reasons without jeopardizing the employee’s exempt status. Employers cannot, however, deduct an exempt employee’s salary for less than a full-day absence without jeopardizing the employee’s exempt status.

Does a company have to allow employees to work from home (exempt or nonexempt) if the office is closed due to bad weather?

No, the employer does not need to allow employee to work from home, regardless of their FLSA status (exempt or nonexempt). The employer can make those decisions based upon the work that can be done remotely and based on the needs of the business. The employer should have clearly communicated policies and expectations regarding working from home during office closures.

The bottom line is that every employer should think about the needs of the business, its financial resources, and employees’ needs and have plans in place to manage business issues due to inclement weather. Thinking through what the wage and hour laws require and developing your policies and then applying them consistently and fairly with all employees can reap huge dividends in employee loyalty and retention.

Source: ThinkHR.com

Important Update from Kaminsky & Associates Concerning the Anthem Breach

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Safeguarding our clients’ personal, financial and medical information is one of our top priorities.  Unfortunately, one of the vendors we work with announced a breach due to a cyber-attack which may have compromised data on file for our clients who currently have or previously had Anthem for their insurance program.

Anthem BCBSM has announced that they were the target of a very sophisticated external, cyber attack. These attackers gained unauthorized access to Anthem’s information technology (IT) system and have obtained personal information from their current and former members such as their names, birthdays, member ID/Social Security numbers, street addresses, email addresses and employment information, including income data for those groups that they provided disability benefits for. Based on the information that Anthem has provided, they indicate that there is no evidence that banking, credit card, medical information (such as claims, test results, or diagnostic codes) were targeted or compromised.

Anthem has indicated that they immediately made every effort to close the security vulnerability, contacted the Federal Bureau of Investigation (FBI) and began fully cooperating with their investigation. Anthem has also retained Mandiant, one of the world’s leading cybersecurity firms, to evaluate their systems and identify solutions based on the evolving landscape.

Anthem is currently conducting an extensive IT forensic investigation to determine what members are impacted. The Anthem teams are working around the clock to determine how many people have been impacted and will notify all Anthem members who are impacted through a written communication.

Anthem has emailed all group contacts on file with important information, if you have not received correspondence and are currently insured with Anthem or have been insured with them in the past, please visit the links listed below to view.

We will continue to provide updates as new information becomes available.

 

Sincerely,

Team Kaminsky

Further Resources

Employer Toolkit – FAQ for Employees

Open Letter to Employers

Open Letter to Employers

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To our valued customers:

Safeguarding your employee’s personal, financial and medical information is one of our top priorities, and because of that, we have state-of-the-art information security systems to protect your data. However, despite our efforts, Anthem was the target of a very sophisticated external cyber attack. These attackers gained unauthorized access to Anthem’s IT system and have obtained personal information from our current and former members such as their names, birthdays, member ID/Social Security numbers, street addresses, email addresses and employment information, including income data. Based on what we know now, there is no evidence that banking, credit card, medical information (such as claims, test results, or diagnostic codes) were targeted or compromised.

Once the attack was discovered, Anthem immediately made every effort to close the security vulnerability, contacted the FBI and began fully cooperating with their investigation. Anthem has also retained Mandiant, one of the world’s leading cybersecurity firms, to evaluate our systems and identify solutions based on the evolving landscape.

Anthem’s own associates’ personal information – including our own – was accessed during this security breach. We join you in your concern and frustration, and we assure you that we are working around the clock to do everything we can to further secure your employees’ data.

Anthem will individually notify current and former members whose information has been accessed. We will provide credit monitoring and identity protection services free of charge so that those who have been affected can have peace of mind. We have created a dedicated website (www.AnthemFacts.com ) where members can access information such as frequently asked questions and answers. We have also established a dedicated toll-free number that both current and former members can call if they have questions related to this incident. That number is: 1-877-263-7995. As we learn more, we will continually update this website and share that information with you. And, we developed a memo template and FAQ to help you answer questions you may receive from your employees.

We want to personally apologize to you and your employees for what has happened, as we know you expect us to protect your information. We will do everything in our power to make our systems and security processes better and more secure, and hope that we can earn back your trust.

 

Sincerely,

Ken Goulet
President, Commercial and Specialty Business