Month: December 2014

The IRS has released final regulations that address how wellness incentives or penalties, contributions to a health reimbursement arrangement, and employer contributions to a Section 125 plan are applied to determine affordability. While these regulations were issued in connection with the individual shared responsibility requirement (also called the individual mandate), the agencies said that they expect to use the same approach when determining affordability for purposes of eligibility for the premium tax credit and the employer-shared responsibility/play or pay requirements.

The regulations provide that when deciding if the employee’s share of the premium is affordable:

• Wellness incentives or surcharges, except for a non-smoking incentive, may not be considered. In other words, the premium for non-smokers will be used to determine affordability (even for smokers). Any other type of wellness incentive must be disregarded, even if the employee has earned one.
• If an employer makes contributions to a health reimbursement arrangement (HRA) that the employee may use to pay premiums, the employee’s cost of coverage may be reduced by the employer’s current year contribution to the HRA, provided that the planned employer contribution is publicized before the enrollment deadline.
• If an employer makes flex contributions through a Section 125 cafeteria plan, the employee’s required contribution may be reduced by flex contributions that (1) may not be taken as a taxable benefit, (2) may be used to pay for minimum essential coverage, and (3) may only be used to pay for medical care.

Because an employer’s contribution to a health savings account (HSA) generally may not be used to pay premiums, employer contributions to an HSA may not be used when determining affordability. For a complete checklist, download UBA’s PPACA Advisor, “Preparing for 2015 – Key PPACA Requirements”.

www.thinkhr.com H3N2 influenza viruses led to record numbers of deaths in the 2004, 2008, and 2013 flu seasons. Doctors are concerned because this type of virus appears to be dominating the 2015 flu season. Employers should stress optimal health and hand-washing behaviors in their workplaces to avoid the threat of flu and keep their workplaces … Continued

While wellness programs have increased in popularity, according to the 2014 UBA Health Plan Survey, actual wellness program adoption has been in a holding pattern. As one might expect, the highest percentage (58.8%) of plans offering wellness benefits came from employers with 1,000 or more employees and the lowest percentage (8%) of plans offering wellness benefits came from employers with fewer than 25 employees. On average, wellness programs are down slightly by 1.3%. It’s no wonder given all the pending litigation and regulation surrounding these programs, including the fact that the health of an employee population is no longer a rating factor for smaller employers.

On the other hand, corporate wellness programs do have many positives. From a global perspective, wellness programs combat the rising costs of health care. Employers also benefit from wellness programs by creating healthier workforces. Healthier employees are more productive and have less absenteeism. Moreover, employees who participate in wellness programs enjoy the extrinsic reward provided by their employer (or the spouse’s employer), and they also realize the intrinsic value of changing their lives through healthier living. Regardless of the motive and intent of employers who establish corporate wellness programs, they just may find themselves in hot water – I mean, court – with the EEOC or on the other side of the aisle from a grieved employee.

What makes wellness programs particularly complicated is the numerous rules and regulations, many of which are discordant with other regulatory provisions. Employers should take due diligence to ensure that they are not sponsoring a wellness program that is ripe for litigation. The programs should be analyzed under the Americans with Disabilities Act (ADA)/Americans With Disabilities Act Amendments Act (ADAAA), the Genetic Information Nondiscrimination Act (GINA), the Employee Retirement Income Security Act (ERISA), Internal Revenue Code (IRC), the Patient Protection and Affordable Care Act (PPACA), the Health Insurance Portability and Accountability Act (HIPAA), Title VII and other EEOC regulations, and state law, being mindful that adherence to one regulation, e.g., PPACA, does not guarantee compliance with another, e.g., ADA or GINA.

The last three months have seen as many complaints filed by the EEOC against wellness programs. On August 20, 2014, the EEOC brought its first direct challenge of a wellness program under Title I of the ADA against Orion Energy Systems, Inc. (Orion suit). On September 30, 2014, the EEOC initiated its second ADA action against Flambeau, Inc.’s wellness program (Flambeau suit). The latest suit was filed on October 27, 2014, against Honeywell International, Inc.’s wellness program (Honeywell suit), and it included counts under both the ADA and GINA. 

In the following days, I will briefly review the various statutory and regulatory language governing wellness programs, outline the employers’ wellness programs that are the center of current litigation, address the EEOC’s concerns, and discuss what employers should do to guard against running afoul. 

For more data on wellness programs and other plan design trends, download the 2014 Health Plan Executive Summary. This survey – which has been conducted every year since 2005 – is the nation’s largest health plan survey and provides more accurate benchmarking data than any other source in the industry.  You can contact a UBA Partner Firm for a customized benchmark report based on industry, region and business size.

Many employee benefit limits are automatically adjusted each year for inflation (this is often referred to as an “indexed” limit). The Internal Revenue Service and the Social Security Administration have released a number of indexed figures for 2015.
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Posted by Linda Rowings Premium tax credits are only available to individuals who obtain health coverage through a Marketplace. A dispute has arisen as to whether the IRS has the ability to interpret PPACA to allow the subsidy to individuals who obtain coverage through any Marketplace, or whether the language of PPACA limits eligibility to … Continued

(NewsUSA) Americans catch approximately 1 billion colds each year, and the Centers for Disease Control and Prevention estimates that as many as 20 percent of people in the U.S. will get the flu this cold and flu season. A majority of people (seven in 10) will use over-the-counter (OTC) medicines to treat their symptoms, and … Continued

Data in the 2014 UBA Health Plan Survey is based on responses from 9,950 employers sponsoring 16,967 health plans nationwide. Results are applicable to the small to midsize market that makes up a majority of American businesses, as well as to larger employers, providing benchmarking data on a more detailed level than any other survey. To help employers benchmark their health plan costs by organization size, the chart below shows average costs in descending order.

Copyright © 2014 United Benefit Advisors, LLC. All Rights Reserved.

Looking at the smallest employer groups, the 2014 findings show an interesting flip in rate increase patterns. Contrast this with last year’s findings, which showed the following increases over 2012 among the same groups.

Copyright © 2014 United Benefit Advisors, LLC. All Rights Reserved.

Historically, employers with 1 to 49 employees felt the brunt of increases, which ranged from 4% to 5% or more. However, in this year’s survey results, these groups saw more modest increases of approximately 1%. Conversely, employers with 50 to 199 employees have historically had more modest increases of 1% to 2%, while this year they saw increases of approximately 3% to 4%.

The ability for small groups to “renew as is” (by grandmothering or by delaying renewals) is having a huge impact on keeping their rates level, at least at this point. Many small groups had the choice of moving to a PPACA-compliant plan or staying with the plans they had (thanks to grandmothering in some states and other delay tactics). Healthy groups tended to stay with the plans they had, which often was the most cost-effective approach. As these groups move to PPACA-compliant plans and become subject to community rating, they will likely see significant cost increases. But this year, they had a reprieve.

For more information to help you benchmark your health plan, download the 2014 UBA Health Plan Survey Executive Summary or contact a local UBA Partner for a customized benchmarking report.