Month: September 2013

With many employers forced to move employees to part-time schedules, send employees to exchanges, drop spouse/family coverage—or coverage altogether, and/or increase employee costs, employers can’t necessarily rely on their health benefits to attract and retain employees. With everyone trying to thread the needle on minimizing penalties, maximizing tax benefits, controlling health costs, and helping employees qualify for subsidies, let’s face it: the health plan may not be your hallmark anymore. So polices like flextime, corporate and social responsibility charters and voluntary benefits may become the cornerstones of your recruitment and retention strategy. UBA took a preliminary look at voluntary benefit trends in its Ancillary Products Survey, which indicates vast differences in voluntary benefits offered by employer size, region and industry.

Employees these days are more diverse than ever and because of this, each employee has their own unique needs. Ancillary benefits provide employers with the ability to meet these needs on a variety of levels. The first step in crafting a benefits package with voluntary or ancillary choices is knowing what others in your industry or area are offering. With comprehensive benchmarking data you can best identify cost-effective solutions that employees truly want. Auto and home insurance is a main staple in the Northeast for example. In larger companies, group term life is a must-have. Short term disability is critical in the manufacturing industry. Long term disability is most common in the retail industry and much less common in the construction/mining industry. While 2.7% of employers overall offer identity theft insurance, nearly 30% of larger employers include this in their package. Comprehensive data for your size, region and industry are the key to smart decisions.

To help employers develop a cost-conscious, yet effective voluntary benefits strategy, United Benefit Advisors (UBA), in conjunction with the Principal Financial Group® is hosting a free webinar, “Maximize Your Employee Benefit Dollars with Voluntary Benefits,” on Sept. 26 at 2 p.m. EDT. To receive the $149 discount for this webinar enter the code “UBAP” when registering. To register, visit: https://webinars.ubabenefits.com/tabid/1932/Default.aspx?wid=108. This webinar has been submitted to the Human Resource Certification Institute to qualify for 1.25 recertification credit hours.

By Linda RowingsChief Compliance OfficerUnited Benefit Advisors
Many employers are uncomfortable foregoing the marketplace/exchange notice, even with the highly unusual DOL release stating that penalties would not be applied to employers that fail to p…

By Josie Martinez, Senior Partner and Legal Counsel
EBS Capstone, A UBA Partner Firm

Many U.S. employers offer self-funded insurance plans, with most of them purchasing stop-loss coverage from insurance providers.  Historically, most of these companies have been large employers.  However, given the fact that self-funded companies could avoid many PPACA regulations, more companies, particularly those will less than 100 employees, are considering this alternative strategy.  Popularity for self-funding comes at a time when employers, both small and large, are looking for more flexibility and lower costs while at the same time maintaining control in the design and financing of employee benefits.  To further this cause, carriers are now providing more self-funding options for smaller groups in an effort to satisfy employers’ interests and provide their clients with creative solutions to control and lower costs.   

Momentum is gaining and the industry could see a shift in the marketplace as smaller businesses avoid costly ACA requirements, such as the health insurance industry fee which will add 2 percent to premiums in 2014 and probably more in later years.  While there are still some PPACA fees that companies, self-funded or not, cannot escape (i.e. Patient-Centered Outcome Research Fee, Transitional Reinsurance Program Fee), in many markets changes to the use of specific rating factors in the group market are driving the move to self-insurance as well.  According to a recent CNBC article, nearly 80 million people received health benefits through self-insured plans last year — an all-time high statistic.  This means more than 60 percent of covered employees nationally use this funding mechanism. The number of smaller companies using self-insured plans increased to 15 percent in 2012 and continues to escalate.  

Granted, there are potential risks that must be considered when making the decision to switch to a self-funding program.  In any given year, there can be large swings in costs due to high-cost claims, or unexpected frequency of claims.  Evaluation of the risk/reward ratio should be conducted carefully so smaller employers purchase adequate protection.  The employer also needs to be prepared to be more involved in the benefits offered by the plan as well as the administration of the plan. In addition, although self-funded plans still enjoy more benefit flexibility than fully insured plans, plans must still comply with the new “no-annual-or-lifetime-limit-on-essential-health-benefit” rule.

Obviously, self-funding will not work for every employer. In order for self-funding to be a viable option, it should be a multi-year commitment and strategy.  Employers and their insurance advisors should consider the company’s benefit philosophy, risk tolerance, historical claims data and workforce demographics, among other things, in order to make an informed decision.  The point is, what might not have seemed like a viable option in the past for smaller employers, is now a real possibility and potential option for a new set of thoughtful employers.

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

I am constantly amazed when I hear that large employers (those with 100-plus employees, and especially those with 1,000-plus) do not know how they are going to handle health care reform yet. I recently read a post asking for information on how large employers are reacting to Health Care Reform. The responses to this post were very typical: adjust plans, reduce networks, change contributions and add additional cost controls like disease management, value based benefits or telemedicine. Or, what about charging for having a spouse with other plan options to come onto your employer based plan? Do these really help? Even having a spouse eligible for a plan presents a twist. Recall that under Health Care Reform, the definition of eligible dependents does not include a spouse. There is a reason for this: If a spouse is eligible then they cannot receive exchange subsidies.

So, what is an employer to do? Well, if they are a large employer – specifically a self-funded employer – they need to manage their plan; by this I mean the plan data. To do this a company must identify the real problems, and then apply real solutions. The key is to define near term cost-drivers. This is the crystal ball prediction that allows a plan to make the right changes at the right time. The typical model of census data along with medical and Rx has inadequate predictive power. Other data must be included to drive the predictability and manage near-term costs risk.

Why are employer based plans receiving double digit trends? The answers are simple: 1. Unknown cost drivers, and 2. Applying the wrong solution.  In order to make a difference a plan must uncover the right issues and implement the right solutions. If employers are to make a difference, or if the Board of Directors or trustees of the plans are to really understand why their plans cost continue to rise, they must think about health care the same way they think of other parts of their business. Does the typical large business have an understanding of those who consume their products? They had better! Why should health care be different? Employers spend millions of dollars each year to take care of employees and their families.

Keep this in mind: With the full implementation of health care reform upon us, private health insurance will continue to bear the costs in the health care system. The cost control answer for businesses is not with the typical clinical analytics, but with business intelligence analytics. This type of process will help large employers reduce claims cost and flatten their health care costs over the next three years.

PPACA requires employers covered by the Fair Labor Standards Act to provide a notice about the upcoming health marketplaces (also called exchanges) to their employees. The notice is due Oct. 1, 2013. On Sept. 11, 2013 the Department of Labor (DOL) anno…