Author: Byrne

“Complaining is not a strategy.”– Jeff Bezos, Founder and Chief Executive Officer, Amazon.com

It’s no secret that the insurance benefits industry is rapidly changing, probably at the fastest rate in its history. United Benefit Advisor’s Chief Executive Officer, Thom Mangan, has been outspoken about the fact that advisors who don’t keep up with the changing benefits industry will quickly get left behind. Mangan is often recognized for his drive to stay one step ahead of the game and was recently honored with the CEO Leadership Award from the Institute of HealthCare Consumerism (IHCC) as a result of his leadership in this area. In this brief interview with the IHCC, he shares his thoughts on the future.

IHCC: In your view, how is the world of the health benefits advisor changing? 

Mangan: Clients are no longer looking for a transactional insurance agent but a consultative advisor.  The advisor must have tools and resources such as claims analytics, benchmarking data, national footprint and compliance resources in order to stay in business. 

IHCC: What are you hearing are the biggest obstacles for benefits advisors going forward? 

Mangan: Access to resources needed to remain relevant. 

IHCC: Where are the greatest opportunities for advisors going forward? 

Mangan: Those who invest in their business will succeed beyond the level they are today while those 90 percent who do not will die a quick death.  An advisor can no longer be a generalist in insurance, but must have a “Ph. D.” to drive to the next level. 

IHCC: What opportunities can a smaller benefits advisor firm — one that may be a UBA Partner — provide for an organization over a larger, multinational firm? 

Mangan: Health insurance is a local choice dealing with local business.  UBA Partner Firms have real people in more than 250 communities across the nation who can make changes at the speed of a PT boat versus a national advisor who moves at the speed of an aircraft carrier.

IHCC: What trends in health care and employee benefits are you currently most “bullish” about? 

Mangan: The more complex the federal government makes health insurance, the more valuable a modern advisor becomes to their clients. 

IHCC: How has the Patient Protection and Affordable Care Act (PPACA) impacted the benefits advisor field? How has UBA helped advisors in this area?

Mangan: Clients have been looking to their advisor to provide guidance regarding PPACA.  Unlike most advisors who just forward carrier information or articles, UBA has a group of nine ERISA attorneys who generate relevant information quickly for the 40,000 employers that are clients of UBA Partner Firms.

IHCC: In your view, what are some of the most interesting or relevant points from this year’s Health Plan Survey? 

Mangan: 2013 is the calm before the storm.  While the past two years have shown renewals of 4 percent and 5 percent respectively, 2014 is a headwind that will turn out to be a hurricane.  Where the Northeast annual cost per employee per month is $10,808 those in the Southeast are $7,846. Most of this pricing is based around plan design.  In 2014, PPACA will force employers to offer much richer health plans in the rest of the country which will raise the rates for the lower cost areas anywhere from 20 percent to 60 percent. 

IHCC: How would you describe your overall vision for UBA going forward?

Mangan: Having been a part of this industry for more than two decades, this, to me, is one of the most exciting times in history, with great opportunities ahead. For example, UBA just launched two new private health insurance exchanges – Benefits Passport® and benefitbay™ – which are part of UBA’s continued innovation. There is much more to come and the excellent people who make up UBA are leading the way. I’m honored to be a part of this organization.

Like the classic child question, “Why?” and the time-tested parent response, “Because!” there are some things in benefits that we as HR professionals just need to know even if they are not that remarkable. It’s just good for us. Like eating vegetables….

Delay, delay, delay … Error, delay, repeal. That seems to be the trend with health care reform, but it doesn’t mean employers are exempt from compliance in 2015 or the requirements that remain in effect for 2014 under the Patient Protection and Affordable Care Act (PPACA). 

Under PPACA, employers still have varying degrees of responsibility, based on number of employees, for providing health coverage that is both affordable and offers a minimum standard of coverage. 

Tunnel vision on PPACA compliance, however, is not an optimal long-term employee benefits strategy. Moving beyond compliance to achieve greater control over health care benefits costs requires a broad-view approach coupled with in-depth analysis using benchmark data relevant to size, industry and region. Weighing your funding options, benefits packages and employee needs is no easy task, but the right tools can certainly get you started in the right direction. 

United Benefit Advisors is hosting a webinar for HR professionals and employers titled “Health Care Reform: Options, Obligations and Opportunities” on Thursday, Dec. 12, 2013 at 2 p.m. ET. To register for this webinar, visit https://webinars.ubabenefits.com/tabid/1932/Default.aspx?wid=114 and enter code “UBAPOP” to receive the $149 discount. This webinar has been submitted to the Human Resource Certification Institute to qualify for 1.50 recertification credit hours. 

The webinar will cover: 

• Budgeting for potential penalties associated with PPACA’s “Play or Pay” mandate
• Building a total compensation strategy to avoid the 40 percent excise tax on health plans
• Moving beyond PPACA compliance to achieve greater control over health care benefits costs
• Offering a greater range of benefit options to employees, including the new health FSA carryover option
• Establishing employee eligibility for federal insurance subsidies and tax credits
• Reviewing a timeline of the new federal regulations
• Maximizing opportunities presented by health care reform 

Presenters will be Terriann Procida, President of Innovative Benefit Planning, and Mike Tate, Director of Business Development for Hanna Global. Both are experts working on the front lines of health care reform, private exchanges and health care cost strategies.

Health care reform and the shift towards a defined-benefits model have moved voluntary benefits from the fringes of corporate benefit plans into the spotlight. Skyrocketing costs and ballooning compliance duties have pushed more employers to a tipping point, and companies are slashing or eliminating their medical plans. Those shrinking benefits, though, can crush a company’s ability to recruit and retain a top-notch workforce. To remain competitive, many employers are turning to ancillary (voluntary) products as a way to lighten the impact of reduced health care coverage and to broaden the overall appeal of their compensation package.

Policies like flextime, corporate and social responsibility charters and voluntary benefits may become the cornerstones of your recruitment and retention strategy. In fact, United Benefit Advisors predicts, based on results from the 2013 Ancillary Products Survey, these policies will be a greater differentiator in 2014 than ever before.

In an upcoming Employee Benefit News webinar, The Hottest Voluntary Benefits for 2014, UBA CEO Thomas Mangan and Dale Alexander of Alexander & Company, a UBA Partner Firm, will explain the significance of this shift and how businesses can use voluntary benefits to their maximum advantage.

The presentation will cover:

• What are the different categories of voluntary benefits and which ones promise the greatest benefits to employees and clients
• Why voluntary benefits should be an important part of a corporate benefits strategy
• How voluntary benefits can increase the ROI on employee benefits
• How to use voluntary benefits to increase employee loyalty and satisfaction

The webinar will take place on Tuesday, Nov. 19, 2013 at 2 p.m. ET/11 a.m. PT and will feature a live Q&A.  Click here to register.

The IRS does not consider the availability of the health exchanges/marketplaces a change in status event that would allow an employee to make a mid-year change under a Section 125 plan. However, the IRS has said that it will allow an employer with a non-calendar year plan to amend the plan to allow employees to make mid-year election changes to move from the plan to the marketplace, to allow employees who previously declined coverage to enroll in the plan as of Jan. 1, 2014, or both. (Because coverage purchased in the marketplace will be effective Jan. 1, 2014, calendar year plans should not have this issue.) There had been some question about whether this option was only available to large employers; the IRS has now clarified that employers of all sizes may amend their plan to allow for mid-year changes because of the new marketplace coverage.

The IRS has delayed the individual shared responsibility requirement for individuals who are eligible for coverage under an employer-provided non-calendar year group health plan to the start of the employer’s 2014 plan year, so obtaining coverage by Jan. 1, 2014, is not as urgent as previously thought. Employers may still wish to allow employees to enroll in their plan mid-year, and with the required plan amendment (most likely to both the Section 125 and group health plans) this will be allowed. An employer considering a mid-year enrollment option may want to get the approval of its insurer or reinsurer before offering this opportunity – insurers are not required to allow mid-year enrollment.

Download the complete UBA summary of this notice called “IRS Liberalizes the Health Flexible Spending Account ‘Use it or Lose It’ Rule” here.

Read the full text of IRS Notice 2013-71.

On Sept. 13, 2013, the IRS issued details on permissible health reimbursement arrangements(HRAs), providing some clarification on minimum essential, minimum value and affordable coverage, and addressing payment of individual premiums through an employer-provided plan.

Most people had expected that standalone HRAs would have difficulty meeting PPACA’s prohibition on dollar limits, and the Notice confirms this. Beginning with the 2014 plan year, an HRA will not be permitted unless:

• It is integrated with a group medical plan that does not have dollar limits and that provides first-dollar benefits for preventive care,* or
• The HRA only provides “excepted benefits” such as standalone dental or vision, or
• The HRA only covers retirees.

In order for an HRA to be integrated:

• The HRA must only be available to employees who are actually enrolled in group medical coverage (either through the employee’s or a family member’s employer); and
• The employee receiving the HRA must actually be enrolled in a group medical plan (either through the employee’s or a family member’s employer); and
• The HRA must be written to give the employee the opportunity at least annually to permanently decline participation in the HRA, and when employment terminates the employee must be allowed to permanently decline participation in the HRA or the balance must automatically be forfeited at termination.

United Benefit Advisors developed a full summary on this guidance, which includes additional information on the following:

• Further details on integrated vs. stand-alone HRAs
• How HRAs intersect with minimum essential coverage
• HRA impact on minimum value and affordability
• Definition of premium reimbursement arrangements (now called “employer payment plans”)
• Next steps employers should consider when it comes to HRAs

* Grandfathered plans are not required to provide first dollar coverage for preventive care.

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

It is finally here. The Patient Protection and Affordable Care Act (PPACA), along with all the “stuff” that has been following it is really happening. Of course, with any major change there are bumps along the way. Apple had a bump with it new iOS7, and was able to respond and issue an update to fix the problems in short order. Perhaps the only difference is that Apple employees are still working… Okay, in fairness, so are the health care reform exchange employees.

So what about the employees of your company? The latest tracking polls from the Kaiser Family Foundation (source: http://kff.org/health-reform/) indicate that the public’s top two questions about health care reform are:

1. How much will the law cost me and how is it paid for?
2. What does the law do and how does it work?

With information coming at employees from all angles, it is hard to know what to believe, let alone what parts need to be understood. More and more, employers are looking to their trusted advisors to help answer their employees’ questions. With 49 percent of the United States receiving employer-based health coverage, looking to their employers is the obvious choice.

Source: http://kff.org/other/state-indicator/total-population/

So as an employer, the question becomes how to respond. As with most things, communication, communication, communication is the key. Employers and employees need to communicate. And, if they don’t know the right answer both should look to their trusted advisor as the best educated resource to the right answer. Here are 10 tips from the International Foundation of Employee Benefits to assist with communicating the health care reform law to your employees.

1. Explain ACA simply and concisely. The law and its regulatory guidance are far-reaching, complicated and lengthy. Stick to the basics when communicating with your participants.
2. Focus on the most immediate changes. Cover what is happening during open enrollment and what changes are coming in 2014.
3. Focus on the areas that most impact your workers.
4. Clarify that your workers do NOT need to purchase health insurance through the public exchanges.(Most employers are maintaining their coverage. If you are dropping coverage for some or all of your employees, be explicit in the steps they need to take.)
5. State the value of your health coverage in dollars per person. You may also include total cost spent by the organization or cost per payroll, but a worker will better appreciate and understand the value when positioned per individual rather than the organization’s perspective.
6. Remind workers of the health care providers available through your plan.
7. Inform workers of any existing or changing cost-sharing provisions. Clarify provisions such as deductibles, copayments, premiums, etc.
8. Explain design changes to your plan due to ACA. Cover changes that may impact your workers including preventive services coverage and elimination of out-of-pocket maximums.
9. Emphasize your company’s commitment to providing health care in the future.
10. State why you offer benefits in the first place. Whether it is to attract the best talent, be competitive or to take care of workers, explain to your workers what you offer and why you offer it.

Source: http://www.ifebp.org/News/FeaturedTopics/HCRC/acahowto.htm

Mike Humphrey
Sr. Benefit Advisor
The Wilson Agency, a UBA Partner Firm 

The Affordable Care Act (ACA) has so many provisions to be aware of that it can be downright overwhelming.  Here are the top three, often overlooked, strategies to help your company get ready for the changes to come.

1. Determine who is eligible for the marketplace subsidy.  Unless you pay for 100 percent of your employees’ premium, you have the possibility of a backlash from your staff.  Here’s how it works: If their income is 400 percent or less of federal poverty levels, they are eligible for a federal subsidy to offset their premium and sometimes co-pay expenses (this could make the marketplace plan less expensive than your employers’ group health plan).  If you are providing affordable coverage for your employees this means they end up missing out on their subsidy.  This step may take additional footwork as you will need to find out what their household income is.  You can accomplish this through a simple survey, though you’ll want to make sure it is HIPAA compliant to protect their information.
2. Review all your options.  Purchasing health insurance is a completely different process now.  Self-funding options are now available for smaller groups. New products and financing options are surfacing that mimic group insurance but are individual products,   taking the perceived risk of self-funding out of the picture.
3. Evaluate your compliance.  Certain mandates will automatically be dealt with or are already put in place, such as essential benefits, dependent coverage and lifetime limits.  Others are set at the company policy level and many will need to be updated to stay in compliance.  In particular, note what your waiting period is (must be less than 90 calendar days from the date of eligibility) and how many hours worked are needed to be eligible for coverage (30 hours will be the new federal full-time standard on Jan. 1, 2015).  If you have seasonal or part-time employees, you’ll want to spend extra effort managing the hours they work so eligibility doesn’t catch you unaware.  Payroll services are adapting their products to assist business owners with tracking the hours of part-time and seasonal employees.                                                                                                         

Certainly there is a lot more to consider and know regarding the compliance, management, administration and strategy of health care reform.  Unless you’re a large company with dedicated benefit professionals, you probably don’t have the staff or the time to dedicate to these new regulations.  Lean on your benefit advisor for guidance on other strategies you can use as you prepare for 2014 and beyond.

We’ve had a lot of employers request a simple, at-a-glance way to see all the PPACA requirements that apply to their business. This is no easy task given group size, SHOP exchanges and self-funding variables! Let’s just look at a few provisions that are effective for the plan year beginning on or after 1/1/2014:

Here’s what (non-grandfathered) large group insured plans (more than 50 employees) should be focused on:

• Eligibility waiting period maximum of 90 days
• Pre-ex not permitted on anyone
• Annual dollar limits prohibited on essential health benefits
• Protections for those in clinical trials
• Out of pocket may not exceed $6,350/$12,700
• Guarantee issue and renewal apply
• Revised wellness program rules

For an at-a glance chart of over 40 PPACA requirements, whether they apply to large groups and their respective effective dates, request Large Group Insured Plans (More Than 50 Employees) and PPACA.

If you are a (non-grandfathered) small group (50 or fewer employees) insured plan, keep a watch on the following requirements that apply BOTH inside and outside the SHOP exchange:

• Modified community rating applies
• Essential health benefits (EHBs) must be offered
• Deductible generally may not exceed $2,000/$4,000
• Out of pocket may not exceed $6,350/$12,700
• Must meet metal levels (60%, 70%, 80%, 90%)
• Guarantee issue and renewal apply (subject to participation)
• Single risk pool
• Revised wellness program rules
• Eligibility waiting period maximum of 90 days
• Pre-ex not permitted on anyone
• Annual dollar limits prohibited on essential health benefits
• Protections for those in clinical trials

For an at-a glance chart of over 40 PPACA requirements, whether they apply to small insured plans outside and/or inside the SHOP exchange and their respective effective dates, request Small Group Insured Plans (50 or Fewer Employees)  and PPACA

If you are a small OR large self-funded plan, the following requirements should be on your radar:

• Eligibility waiting period maximum of 90 days
• Pre-ex not permitted on anyone
• Annual dollar limits prohibited on essential health benefits
• Protections for those in clinical trials
• Out of pocket may not exceed $6,350/$12,700
• Revised wellness program rules
• Transitional reinsurance fee, including reporting

For more information on over 40 PPACA requirements, whether they apply to small and/or large insured group self-funded plans and their respective effective dates, request Self-funded Plans and PPACA.

States have two major decisions to make with respect to the Patient Protection and Affordable Care Act (PPACA) – whether they will run the health exchange themselves, and whether they will expand Medicaid to cover most individuals whose income is below 133 percent of the federal poverty level.

Do you know where your state stands, and what your options are? If not, read on…

Exchange Election

Beginning in 2014, all states will have a health exchange (also known as the health marketplace). If a state chooses not to run an exchange, the federal government will run the exchange for the state. An exchange run by the federal government for a state is called a federally facilitated exchange (FFE). States may also choose to share the operation of an exchange with the federal government – that is called a partnership exchange. (For more information about the exchanges see our PPACA Advisor Appendix on Exchange Election.)

Medicaid Election

States also have to decide whether they will expand Medicaid coverage to most individuals who have an income below 133 percent of the federal poverty level (FPL). The FPL is $11,490 for a single person and $23,550 for a family of four in 2013. The federal government will pay most of the cost of expanded Medicaid coverage, but some states have concerns about the ultimate cost of the expansion to the states. (For more information about Medicaid and PPACA, see our PPACA Advisor Appendix on Medicaid Election.)

To see where your state stands on exchanges and medicaid, click here for a free chart of state status as of September 17, 2013.