by jeffp | Oct 5, 2016 | Employee Benefits, Uncategorized
Open enrollment for individual and family healthcare plans for 2017 is rapidly approaching. It begins on November 1, and many employers choose a similar timeline when allowing workers to sign up for, or make changes to, their participation in the company’s benefits offerings. As such, now is a vital time to review your benefits package and ensure your plans are in compliance with all government regulations before you roll them out to your workers during the open enrollment period.
Retirement Plans
In April, the U.S. Department of Labor (DOL), issued a final rule to address conflicts of interest in retirement advice. This fiduciary standard applies to anyone who provides investment advice to sponsors and participants in workplace retirement plans and individual retirement accounts including 401(k)s and IRAs, and is expected to impact compliance issues and costs for employers who offer employer-sponsored retirement plans as part of their benefits package.
In essence, the definition of ‘fiduciary’ has been expanded by the new rule, and many vendors who service employer-sponsored retirement plans who were not formerly considered fiduciaries now will be. This includes broker-dealers and mutual-fund representatives. Experts recommend that employers carefully evaluate all of their retirement plan advisors and services and cut ties with those who do not want to comply with the new fiduciary standard.
Healthcare Plans
The Department of Health and Human Services continues to update regulations that can have direct effects on the healthcare benefit employers offer. Before you roll out your non-grandfathered 2017 healthcare insurance selections to your workforce, you’ll want to makes sure each one covers all essential health benefits including:
- Ambulatory patient services
- Emergency services
- Hospitalization
- Maternity and newborn care
- Behavioral health treatment for mental health and substance use disorders
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventative and wellness services (including chronic disease management)
- Pediatric services (including dental and vision care)
The medical options offered must also meet established minimum value, minimum essential coverage and affordability standards. For example, in order to avoid making employer shared responsibility payments to the IRS, your employer-sponsored plan must cover at least 60 percent of the total allowed cost of benefits that are expected to be incurred under the plan.
Finally, you must make sure that the healthcare plans you’re offering—and the insurers who back them—meet the final Department of Health and Human Services (HHS) regulations under the Patient Protection and Affordable Care Act (ACA, section 1557) which prohibit any discrimination on the basis of race, color, national origin, sex, age or disability when offering or providing health coverage. This includes denying or limiting coverage for health services provided to transgender individuals, categorically excluding all coverage for health services related to gender transition, or denying or limiting coverage for specific health services related to gender transition.
Wellness Plans
If your employee wellness program includes a health risk assessment, biometric screening, asks for a spouse’s information, or includes a financial incentive for participants, you’ll want to ensure it meets new Equal Employment Opportunity Commission (EEOC) rules.
While the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) generally prohibit employers from asking for information about their workers’ health conditions or the health conditions of their family members, they do not prevent employers from asking health-related questions or conducting certain medical examinations to determine risk factors as part of a voluntary wellness program.
Under the Health Insurance Portability and Accountability Act (HIPAA) as amended by the ACA, wellness programs are only considered voluntary if they offer incentives that are 30 percent or less than the cost of an individual’s health insurance premium. The maximum incentive for spouse participants is also limited to 30 percent. No additional incentives are allowed in exchange for specific genetic information (such as family history or genetic test results) of an employee, employee’s spouse, or employee’s children. Smoking cessation programs can offer an incentive up to 50 percent of the cost of individual healthcare coverage.
The Bottom Line
Benefits plan compliance has always been complicated and has only become more so in recent years. If you’re uncertain that your 2017 offerings meet government standards and regulations, contact your benefits professional for a review and assistance.
by jeffp | Aug 9, 2016 | Employee Benefits
Americans are notoriously bad at taking vacations. According to a study commissioned by Project: Time Off, 55 percent of workers had unused vacation days in 2015. This was equal to 658 million days, of which 222 million could not be rolled over or paid out in any way. While that might sound like good news for the employers who didn’t have to work around their employees’ time off or pay for the unused vacation days, constant work without adequate downtime can actually lead to higher stress and lower productivity. And a workforce suffering from either of those is not healthy for your bottom line.
How can you encourage your employees to use their hard-earned vacation time? You can start by reducing their guilt. An Alamo Rent A Car study found that 47 percent of workers feel shame or guilt when asking for vacation time. The percentage jumps to 59 percent among Millennial employees, 42 percent of which do not hesitate to shame their co-workers who do decided to take vacations.
In addition, consider implementing the following best practices at your workplace:
- Formulate a solid vacation policy. Whether you choose to offer a set number of days off for all employees or enable them to earn more vacation days with additional years of service, put your terms in writing. This includes determining how many days—if any—employees can roll over to the next year or setting a cap on the total amount they can accrue, two policies that may help prevent employees from sitting on unused vacation time.
- Communicate it frequently. Don’t just talk about vacation time when interviewing potential hires. Make sure your vacation benefit is spelled out in your employee handbook and periodically review the details at staff meetings. Keep an eye on vacation time accrued by each employee and encourage them to use it.
- Help workers redistribute their workloads. The Project: Time Off study also found that 30 percent of employees don’t take time off because they don’t think anyone else can do their job. Thirty-seven percent are afraid they’ll return to a mountain of work. You can encourage your team to use their vacation time by offering to aid in the redistribution of their workload and cross training other employees to cover vital duties.
Set a good example. It’s important for your employees to see you—and your management team—take vacation time off.
by jeffp | Jul 27, 2016 | Employee Benefits
Mental illness affects more of your workforce than you may realize. According to the National Alliance on Mental Illness, 43.8 million U.S. adults—or approximately one in five—experiences a mental illness in a given year. For 10 million of them, the mental illness is serious enough to substantially interfere with or limit one or more of their major life activities.
While depression and anxiety disorders—including posttraumatic stress disorder, obsessive-compulsive disorder and specific phobias—are the most common, your employees may also be dealing with other mental illnesses such as bipolar disorder and schizophrenia. It is estimated that serious mental illness costs America $193.2 billion in lost earnings every year.
Most of your employees who suffer from mental illnesses will do their best to never have to tell you about them. However, it’s up to employers to be proactive and establish ways to handle employee mental health issues at work when they arise. Experts advise addressing them on a case-by-case basis using the following steps.
- Acknowledge the issue. Whether an employee comes to you directly or you notice signs and symptoms that seem to point to a possible mental illness, the first step is to acknowledge the issue and speak candidly yet sensitively with the employee.
- Gather the facts. Evaluate the effect of the mental health issue on your employee’s job performance. You should discuss this with the employee as well as his or her supervisors and managers. Consider reasonable accommodations you may be able to make to help the employee continue functioning productively.
- Learn more about the mental illness itself. Consider speaking with a healthcare provider as well as a lawyer to learn more about reasonable expectations, possible accommodations and any legal requirements associated with the particular mental health issue. Legal obligations in regards to mental health accommodations may vary from state to state. Many mental illnesses are considered disabilities and protected accordingly under the Americans with Disabilities Act.
- Make any necessary changes. Based on your conversations, legal obligations and what you’ve learned about the nature of the mental health issue your employee is dealing with, adjust job duties and/or expectations. Continue to check in with your employee to make sure the changes are working for them and progress is being made.
Managing mental health issues in the workplace can be challenging. In addition to the steps above, adding an employee assistance program (EAP) to your benefits package may help. EAPs are voluntary, confidential programs that benefit any employee with a personal or work-related problem—not just those suffering from mental illness. Short-term counseling and assessments can help workers deal with alcohol and substance abuse problems, stress, grief and family difficulties as well as psychological disorders. To learn more about your EAP options, contact us today.
by jeffp | Jul 13, 2016 | Employee Benefits
Hand writing Benefits with white marker on transparent wipe board.
Americans are struggling with student loan repayment. Given the hardships this very common debt can cause, consider these reasons a student loan repayment assistance program could be a powerful addition to your company’s benefits arsenal.
It will help you attract more job candidates. According to 2015 data from the Society for Human Resource Management, only 3 percent of employers are currently offering student loan repayment assistance as a benefit—despite the fact that the majority of American workers would find it attractive. A recent survey of more than 1,700 employees conducted by Student Loan Hero, a financial education website, found that 77 percent of respondents rank student loan repayment assistance benefits as slightly to very important. Only 23 percent were uninterested in this benefit. When asked if they’d prefer student loan repayment assistance or additional vacation/paid time off, 53 percent chose the former.
It will keep you keep your employees engaged. Engaged employees are actively invested in their work and committed to their employer. Unfortunately, financial distractions—such as student loan repayment struggles—can interfere with that engagement. According to the results of a survey conducted by American Student Assistance, 62 percent of respondents with student debt report it poses a hardship on their budget when combined with other household spending. Thirty-five percent say student loan payments make it difficult for them to purchase daily necessities. And more than half say student loan debt has affected their decision or ability to make larger purchases such as a car or a home.
It requires little sales effort or benefits education
Unlike 401(k) plans, health savings accounts and life insurance, you don’t have to convince your employees that they need student loan repayment assistance. They’re already dealing with the immediate reality that debt every day. Additionally, a repayment assistance program is much easier to administer. There’s no complex terminology to understand, and no need to spend hours educating your team about options or how the program functions.
It appeals to all employee demographics
Student loan repayment assistance doesn’t just appeal to workers in the Millennial Generation (currently between the ages of 18 and 34). Those from Generation X (ages 35 to 50) are equally burdened by education debt. A Gallup poll found 20 percent of Americans have student loans, including 35 percent of Millennials and 25 percent of Gen Xers. Those from Generation X actually have the largest average loan balances (more than $30,000) outstanding. Six percent of Baby Boomers are also paying off student loans.
It will improve the use of your employer-sponsored 401(k) plan
Many workers postpone contributions to a retirement account until they have their student loan debt under control (50 percent according to one survey). If your employer-sponsored 401(k) plan is underutilized, adding a student loan repayment assistance benefit may help.
If you’d like to explore enhancing your company’s employee benefits package with a student loan repayment assistance program, contact your benefits advisor today.
by jeffp | Jun 22, 2016 | Employee Benefits
According to PwC’s Health Research Institute, medical costs in the U.S. will increase 6.5 percent in 2016. Benefit plan changes, such as narrower provider rangers and higher deductibles, will reduce the increase to 4.5 percent, though many consumers and the companies that employ them will continue to struggle to afford healthcare services. What can you do to continue to provide the health insurance coverage your workers need without devastating your budget? The answer is to do what you can to control healthcare costs. Consider the following strategies to help you do so without drastically reducing the benefits you’re able to offer.
Use a level-funded plan. While traditional fully insured plans involve predetermined and fixed payments per employee per month (with the insurer assuming the risk after co-pays and deductibles), and a self-funded plan lays all of the claims on the employer, a level-funded plan is a hybrid of the two. It’s filed as a self-funded plan but the employer is billed a predetermined and fixed premium per employee per month. However, after a certain period, the employer may qualify for a premium refund (if claims are lower than expected) or premium increase (if claims are higher than expected).
Get serious about wellness. Whether you already have an employee wellness program in place or want to establish one, it’s important to tailor it to individual employees if you want to get the most benefit. Offer a program that encourages each worker’s health goals and supports them with comprehensive resources. Some companies have found that they can increase their employees’ wellness engagement even further with incentives and rewards.
Offer a taxed-advantage program in addition to health insurance. These programs are funded with pre-tax dollars, making your employees’ wages or salary go further. They include flexible spending accounts or FSAs, health savings accounts for HSAs, health reimbursement arrangements (HRAs) and premium offset plans (POPs) and can lighten your company’s rising medical expenses as well as that of your employees.
FSAs are particularly popular, as they allow your workers to save money tax-free to use for the payment of medical expenses. Voluntary and automatic paycheck deductions make FSA deposits convenient for employees. As an employer, you can also make contributions towards your workers’ FSA accounts.
HRAs are also very useful. Funded by the employer, an HRA reimburses employees for their health insurance premiums and qualifying medical expenses. Employer contributions are 100 percent tax deductible when paid out and are also tax-free to the employee. HRAs are a flexible way to supplement the health insurance benefits your company offers and help your team pay for medical expenses that aren’t covered by the insurance plan.
If you’d like to learn more about these strategies for reducing healthcare costs for your business and employees, we’re here to help. Give us a call to review your current benefits plan and explore your options.
by jeffp | May 25, 2016 | Employee Benefits
In 2015, the Employee Benefits Security Administration (EBSA), through its enforcement of the Employee Retirement Income Security Act (ERISA), recovered $696.3 million for direct payment to plans, participants and beneficiaries. They closed 2,441 civil investigations, 275 criminal investigations and 201,000 inquiries through the informal complaint resolution process. The later resulted in $402.9 million restored to U.S. workers. To say the Department of Labor (DOL) and EBSA were busy would be an understatement.
If you’d like to avoid landing on their hit list in 2016, take these steps to avoid a DOL audit of your employer-sponsored 401(k) plan.
- Always be responsive. DOL audits are often triggered by employee complaints. Promptly respond to all retirement plan questions you receive. Should you need to part ways with an employee, do so as professionally as possible. Terminated employees who feel that they’ve been treated unfairly are among the most likely to register a complaint with the DOL.
- Improve your benefit communication. Retirement plans can be confusing, and accompanying documentation that is incomplete or difficult to understand can frustrate employees and lead to DOL complaints. In addition to annual benefit education meetings, consider addressing 401(k) plan questions at other employee meetings and/or your company newsletter.
- Fix any problems before as soon as you find them. This includes tracking down lost participants, dealing with uncashed distribution checks, and properly accounting for ERISA spending account expenses. Miscalculation of contribution amounts and profit sharing as well as failing to enroll or vest employees on time can also trigger an audit.
- Conduct your own audit. Whether you do so yourself or hire a consultant to do it for you, an internal audit can be helpful in identifying potential issues with your 401(k) plan.
- Correctly file your 5500. While employee complaints are the most common cause of DOL 401(k) plan audits, errors on your annual Form 5500 are a close second. By some accounts, the most common errors include failing to answer multi-part questions, forgetting to attach the required schedules, and ignoring EFAST 2 Electronic Filing Guidance. Failing to file on time will also catch the attention of the DOL.
Are you concerned about your employer sponsored 401(k) plan? If so, we can help. Contact us today to learn more about retirement plan compliance, Form 5500 filing, DOL audits and the importance of benefit communication.
