Month: October 2013

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

By Thomas Mangan
CEO, United Benefit Advisors 

Paul, who owns a mid-size design firm in Atlanta, Ga., wanted to recruit some new talent and had some questions about how best to highlight the health benefits his firm could offer. In his research, he looked up national averages for single employee health plan cost: the amount the employee contributed to monthly premiums.

When compared against the national average for all plans, an employee at Paul’s firm pays $63 per month less, which he thought was pretty great! However, upon a closer look using more detailed benchmarking data from the 2013 UBA Health Plan Survey, he could see that when compared with other CDHPs in the Southeast region, his employee’s cost is actually $26 per month more expensive than the average. 

Taking another approach, however, by comparing his employee’s cost to the closest peers using a state-specific benchmark, which in Georgia is $419, it became clear his employee’s monthly single premium is actually $10 less than competitors in the state.

Subsequently, Paul chose to highlight to potential new employees that their plan was slightly less expensive than the state average, and further emphasized all of the other great voluntary benefits his firm offers – a smart and informed strategic move.

Historically, benchmarking data of this kind were unavailable to small and mid-size employers. Now, by using such detailed information, employers are able to more accurately evaluate costs, and ultimately gain a competitive edge in recruiting and retaining a superior workforce.

Download a copy of the 2013 UBA Health Plan Survey Executive Summary or request a customized benchmarking report from a UBA Partner Firm. 

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. 

By Linda RowingsChief Compliance OfficerUnited Benefit Advisors
With the advent of the health marketplaces, why do we still have COBRA?
The framers of PPACA decided that COBRA should be available even after the health marketplaces become available prim…

It’s that time of year for many employers: fall open enrollment! That means many administrators of group health plans (those up for renewal at this time of year) are working to provide Summary of Benefits and Coverage (SBC) to their eligible individuals. (Technically, for insured plans the insurer is responsible for providing an SBC to the employer within seven days after the employer completes an application.  The insurer and the plan administrator are each responsible for providing the SBC to participants, but only one of them needs to actually do it – they need to work out who will do the distribution.  For self-funded plans, the plan administrator is responsible for providing the SBC.  The plan administrator can hire others, like its TPA, to help, but the plan administrator is ultimately responsible.) Assuming you have determined who is responsible, it is a good time to review all the latest requirements (including those independent of renewal dates) to be sure you fulfill this obligation correctly and avoid penalties. SBCs must be provided: 

• At open enrollment
• At renewal if there is no open enrollment
• At initial enrollment 
• At special enrollment
• With a material mid-year change 

While the obligation to issue an SBC applies to all employers, regardless of size or type (private, government, not-for-profit)—including grandfathered plans—it primarily covers medical (PPO, HDHP, HMO, etc.) coverage and is not needed for the following: 

• Stand-alone dental and vision benefits (stand-alone means these benefits are elected separately from medical and have discrete premiums)
• Health FSAs unless the employer makes a significant contribution
• Health savings accounts (HSAs), although the high-deductible health plan will need an SBC; the HSA can be mentioned as a source of funds to meet deductibles, coinsurance, etc. if desired
• Hospital indemnity or specified illness coverage
• Long-term care, disability or accident coverage
• Retiree-only plans 

Remember that you must use the standard format prescribed by the regulatory agencies for the SBC. UBA offers a highlights document with a great summary of what and what not to include, alternate language requirements, electronic delivery guidelines and more. Make sure you: 

• Verify who will prepare the SBC (insurer, TPA, employee(s), advisor) – and make sure that this person knows what is expected of them. (See the UBA SBC Frequently Asked Questions document for detailed information on instructions and templates.)
• Verify the manner of distribution (paper or electronic) for different types of participants
• Work through coordinating information if some benefits are provided by other vendors (such as prescription drugs or managed behavioral care)
• Determine whether a non-English version of the SBC will be needed (see the UBA highlights document for a link to the list of the impacted counties)
• Ensure that newly-eligible employees receive the SBC or notification of SBC availability with their application materials
• If SBCs are provided electronically, implement a process to provide paper SBCs within seven days after they are requested

If you aren’t sure how to handle vision benefits, HRAs, EAP, wellness programs, HSAs, FSAs, carve-outs, information on premiums/contributions or how to complete the coverage examples or reconcile your plan terms with the glossary, view the UBA SBC Frequently Asked Questions document for detailed information.

So why does this process seem so inflexible? The purpose of the SBC is to make it easier for employees to compare coverage options.  The regulatory agencies believe that consistent presentation will make it easier for employees to do side-by-side comparisons. We hope these latest UBA tools (SBC highlights and SBC Frequently Asked Questions) help make this process more bearable!