How Healthy Employees Save You Money

America is one of the most obese countries in the world. As a result, many Americans suffer from chronic illnesses such as diabetes and heart disease. On average, two-thirds of all US medical spending goes toward combatting the complications associated with these two ailments. The majority of these expenses are related to health problems resulting from unhealthy, sedentary lifestyles that compound existing issues. For example, lack of exercise and poor diet exacerbates existing health issues and leads to employees visiting the doctor’s office rather than their workplace. To mitigate the prevalence of health problems and rising medical costs, employers offer workplace wellness programs.

What are workplace wellness programs?

Workplace wellness programs range from healthy lunch and snack options in the office break room to on-site fitness centers. The aim of wellness programs is to improve the health and well-being of employees, increase their productivity, reduce their risk of costly chronic disease, and improve control of chronic conditions. These programs consist of two components: a lifestyle management program and a disease management program. Lifestyle management programs promote the idea of health promotion, which according to the World Health Organization is the process of enabling people to increase control over, and to improve, their health. The other aspect, disease management, represents a coordinated effort to help employees with an existing chronic disease to take better care of themselves to avoid serious complications associated with their disease. Workplace wellness programs have grown in popularity and now represent a $6 billion a year industry in the USA.

What saves employers money?

According to a study conducted by the Rand Corporation, the workplace wellness program itself reduces health care expenses for the employer by about $30 per member per month (PMPM). In layman’s terms, a company can save a boat load of money if they pay attention to the health needs of their employees. Of the two components, the disease management program generates the most savings PMPM because the measures implemented in this component cut the number and length of expensive hospital stays as a result of chronic disease. On the other hand, lifestyle management programs do not offer massive savings PMPM; however, one must not forget about their importance in contributing to healthy lifestyles. More employees partake in the lifestyle management programs than disease management programs and participation in lifestyle management increases productivity and reduces absenteeism, two metrics that contribute to elevated company revenues.

Benefits of workplace wellness programs.

Workplace wellness programs benefit both the employer and the employee. For the employer, these programs allow them to save money on health care costs. While statistically disease management programs ultimately save the employer more money than lifestyle management programs, there are significant benefits to both. The benefits of disease management programs are realized in a shorter term because they combat imminent health care costs. Lifestyle management programs’ benefits are more of a long-term benefit because they contribute to prevention of chronic disease down the road. Employers need to have clear-cut goals for their workplace wellness program that focus not only on disease management to mitigate health care costs but also on lifestyle management so that the people that they employ can enjoy a better quality of life that translates into increased productivity. Workplace wellness is a win for everyone involved!

Do Activity Trackers Belong in Your Wellness Program?

Activity Trackers

Are activity trackers a step in the right direction?

Employers want healthier employees and some are willing to put money on it. Employers are buying, or subsidizing, activity trackers for their employees. This trend is showing momentum, but is it making an impact?

Of the many wellness articles on this subject, many companies are happy with their decision to provide fitness trackers to their employees. Some employers use it as tool for employees to take responsibility for their health and this is an avenue to assist them, while others use it for tracking and “friendly” competitions throughout the workplace. The end result is more active employees. For example the wellness vendor, beBetter, states that only 20% of their business uses some type of device or activity tracker. This number jumps to an 80% participation rate if the employer subsidizes the cost of an activity tracker.

A study done by the American College of Sports Medicine shows people who wore Fitness Trackers spent less time sitting, more time being active, and lost more weight. One of the many benefits of the devices is the social aspects which help motivate employees. Most devices allow the user to start or join competitions with coworkers and friends. This type of communication and reminders are great motivational tools that can spark more physical activity.

Fitbit seems to have the market on corporate wellness, but there are other products hitting the market. Here is an article from Wearable listing the best fitness trackers in 2016. They offer a quick review along with price points. The cost to implement is anywhere from $60 to $120 per employee, depending on the device.

When there are so many benefits to a healthy workplace, allocating money to a well-rounded wellness plan pays off in more way than one. Happy and healthy employees are more productive, engaged and may reduce your employee benefits costs in the long run. Please contact Trish Blocker, W3’s On-Site Wellness Coordinator, if you have any questions about instituting activity trackers into your wellness programs.

COBRA and Your Business

COBRA and Your BusinessFirst off, what is COBRA Insurance? The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows the continuation of group health insurance that would otherwise be terminated. It applies to group health plans maintained by: private-sector employers with 20 or more employees, employee organizations and state and local governments. COBRA allows the right to continue coverage temporarily at the group rates.

Eligibility of a Qualified Beneficiary

A qualified beneficiary is usually an employee, spouse or dependent child covered by a group health plan. They must be covered the day before a qualifying event. Other forms of qualified beneficiaries are retired employees (and their spouses and dependent children), and any child born to or placed for adoption with a covered employee during the period of COBRA coverage.

What is a Considered a Qualifying Event?

A qualified event is something that would cause an employee to loose health coverage. There are a number of qualifying events that trigger a qualifying event for a spouse or child of the dependent. The amount of time for the continuation of coverage depends on the qualifying event.

Employees:
  • Voluntary of involuntary termination of employment (other than for gross misconduct) (18 months)
  • Reduction in hours of employment (18 months)
 Spouse or Dependent Child:
  • Voluntary of involuntary termination of the covered employee’s employment (other than for gross misconduct) (18 months)
  • Reduction in hours of the covered employee’s employment (18 months)
  • Covered employee’s becoming entitled to Medicare (36 months)
  • Divorce or legal separation of the covered employee (36 months)
  • Death of the covered employee (36 months)
  • Loss of dependent child status under the plan rules (36 months)

Does Your Business Need to Offer COBRA?

Federal COBRA generally applies to employers that offer health coverage and employ 20 or more employees on 50% of its typical business days in the preceding calendar year. Both full-time and part-time employees count, but part-time employees only count as a fraction. The fraction is equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full-time. The determination of the number of hours required to be considered a full-time employee (or to determine the fraction for part-time) is based upon the employer’s employment practices, but not to exceed eight hours for any day or 40 hours for any week.

Determining the Number of Employees

An employer may determine the number of their employees on a daily basis or a pay period basis.

The result of using either method could yield different eligibility, but figuring based on a pay period basis could save you time. Remember, you can stop counting once you have the same result for 50% of the preceding year’s business days or periods. However, the basis used by the employer must be used with respect to all employees and must be used for the entire year.

It is important for employers to review the previous year’s payroll and determine if they are subject to Federal COBRA, or alternately a state continuation plan when applicable. If your COBRA eligibility has changed, you will want to notify your COBRA administrator, insurance carrier, and insurance advisor.

There are many aspects of COBRA that an experience advisor can assist you with. Maintaining compliance is very important for your business. Contact us for further assistance!

Why Your Employees Aren’t Participating in Wellness Programs

So you have done everything right, planned a lunch and learn, booked a fantastic speaker, provided lunch, and then waited for everyone to show up.  Or you had a grand idea about a walking competition to get everyone moving more. Then the lack of participation is shocking and you are left to wonder why. According to WELCOA (Wellness Council of America) the first few steps of a successful wellness program is to survey the employees about their interests. If you skipped that step, it is like getting a teenager to clean their room, it Is not happening. Remember “wellness is something you do FOR people, not TO them”.

HealthMine, provider of a personalized health portal for employers and insurers, surveyed 1,200 consumers  about wellness programs and the reasons that hold them back from participating. Lack of time is usually high on everyone’s list., which is not surprising and below are the other barriers listed on their aggregate report:

11 Reasons Why Employees Don't Use Wellness Programs

Many of these obstacles are similar to what clients at W3 are experiencing. The employee interest survey, senior level endorsement of the program, and proper promotion can help overcome some of these objections. Also, as you continue your wellness program you need to keep a pulse on the employees by tracking participation, using surveys and feedback constructively, and be consistent. Eventually, you will see a culture shift towards healthier lifestyles and the employees privacy and security concerns will lessen.

Be transparent with your aggregate results so the employee will feel some ownership in the wellness programming. A dashboard on your intranet displaying  aggregate biometric results, participation numbers from wellness competitions, success stories, and future wellness offerings can help make your program more sustainable.  “Arming individuals with clinical data helps make wellness meaningful. But overcoming inertia to take a healthy action is the first step,” said Bryce Williams, CEO and President of HealthMine. If your Wellness Program is not getting the participation that it should contact me to analyze where you can tweak your programming, promotions, incentives, etc to have better engagement.

Download Free Wellness Calendar

What Do 1095 Forms Mean to Your Business?

What do 1095 Forms Mean to Your Business?The 1095 forms are a brand new tax form implemented in 2016 that your employees will need to file their taxes. This form goes hand in hand with the Affordable Care Act (ACA) and its requirement to carry health insurance. The 1095 provides the IRS with information needed to validate whether employees and employers have satisfied the requirements of the ACA. It is considered your “Proof of Insurance”.

There are three different versions of 1095 that you need to be aware of:

  • 1095-A: This is a form that is provided to all individuals who purchased coverage through the ACA marketplace.
  • 1095-B: This version is the form filed and mailed by the insurance carrier. All insurance carriers are required to send this form to their insureds.
  • 1095-C: This 1095-C is the form that all employers with 50 or more employees need to complete and send to all of their employees that had health insurance coverage in 2015.

So what does this mean to me as an employer?

Well, that depends…

Do you have OVER 50 full-time employees?

  1. You are required to send the 1095-C form out to all your employees.
  2. Your employees will be receiving, AT LEAST, two 1095 forms. More if they have been at additional employers in 2015. They need to know what these forms are and that they need to keep them for their taxes. So if your employee had two different jobs in 2015, he or she would likely get FOUR separate 1095 forms. They are going to want to know what these are for and more importantly – to not throw these away! Download an employee communication regarding the 1095-C form
  3. Employers are also required to file form 1094, which is the summary transmittal form. It is just like the W-3 you send along with your W-2s.

Do you have UNDER 50 full-time employees?

  1. You are not required to send a 1095-C form, but must be able to explain to your employees what the 1095-B form is and why they are receiving it.
  2. It is in your best interest to communicate with your employees that they should not throw these forms away. Download an employee communication regarding the 1095-B form

How to Complete These Forms (OVER 50 Full-Time Employees)

By now, your benefits broker should have discussed what options you have regarding the completion of these forms. Many HRIS, payroll and Benefits Administration vendors have added modules that can be used to assist with this task. W3 also worked with our technology consultant to create a self-service tool much like “Turbo tax” that can be used to walk you through completion step by step.


What is your Deadline?

These deadlines where recently extended to give employers and other providers more time to analyze and report coverage information.

  • March 31, 2016 – Deadline for furnishing Forms 1095-B and 1095-C to individuals
  • May 31, 2016 – Deadline for filing Forms 1094-B, 1095-B, 1094-C and 1095-C with the IRS
  • June 30, 2016 – Deadline for electronically filing Forms 1094-B, 1095-B, 1094-C and 1095-C

Good to know…

Due to the delay of the ACA reporting deadlines, some individuals may not receive Form 1095-C by the time they file their income tax returns.

For 2015 only, individuals who rely on this information from their employers to determine whether or not they are eligible for premium tax credits do not need to amend their tax returns once they receive Form 1095-C.

Instead, they should keep this form for their tax records. This exception also applies to individuals who may rely on Form 1095-B to prove they had minimum essential coverage all year.

Under 50 Employees? 
Over 50 Employees?

6 Reasons Why “Technology-Backed” Trumps “Technology-Based” Employee Benefits

What do you expect from your broker when offering employee benefits? 

Employee BenefitsAre you looking for a trusted advisor who offers the expert help and service needed for you to choose the best employee benefits for your company? Or are you looking for a way to streamline paperwork and ease the administrative burden on HR? Either way, an independent insurance agency, like Wallace Welch & Willingham, is always going to be your best bet.

An independent agency gives you the expert guidance that makes the benefits selection, implementation, and analysis a smooth process. We use technology to offer you a variety of tools and resources that make the benefits administration process virtually painless.

If you are considering moving your HR tasks to a platform like Zenefits or Gusto you must take a look at the bigger picture. These companies can give you HR software, with benefits thrown into the mix, but they are, first and foremost, technology-based and technology-focused. You will not receive the benefits support and personalized service that a local agent provides.

Check out what Wallace Welch & Willingham can offer compared to these new technology-based companies.

1.) Industry Focused

We are focused on your needs and have the expertise necessary to guide you through the plan-choosing process. We’re here to answer questions, provide guidance, and support your HR needs with our HR tools: MillsonJames and the Seay HR Hotline. We’re here to serve you, and we have the personalized service, backed by technology, to help you succeed.

Technology-based companies are focused on providing you with HR software. Once they lure you in with free basic HR technology, they encourage you to switch to them for your benefits—helping  you with benefits is a concern secondary to the software.

2.) Local Presence

Wallace Welch & Willingham is located near you, and we’re proud members of this community. We understand what’s happening in the benefits marketplace, both locally and nationally, and we understand your business. If you want to communicate on the phone or over email, we’ll respond promptly. We’ll be there to sit down face-to-face and guide you through the benefits selection and strategic planning process. When you need us, we’re here for you.

Technology-based companies are headquartered in other states, working in virtual clouds. Zenefits, for instance, is based out of California. Their representatives rarely, if ever, meet with clients and they lack a local presence and understanding. If you enroll in benefits through them, you forfeit the ability to have personalized, face-to-face meetings to help you achieve your goals.

3.) Knowledge & Experience

We help you choose the best benefits, guide you through the open enrollment process, run health claims diagnostics, and sit down with you to develop strategic plans for lowering costs due to health claims. We understand that benefits are more than just benefits—they are an important recruitment and retention tool and choosing the right ones will help you keep your employees happy. We also provide you with compliance information and employee communications, so you are never left to struggle on your own. W3 has been in the insurance industry for over 90 years. We have the knowledge behind our products to offer the best solutions to our clients.

Technology-based companies will automate what they can, but, unfortunately, expert insight and advice cannot be obtained from a computer. Their sales people have were hired (recently) with one objective; to sell their product. Their ability to compete with local insurance agencies based on product knowledge is extremely limited.

4.) Service & Year-Round Support 

We are here for you year-round, and you never have to wonder if you’ll be able to reach someone. While open enrollment is often the most challenging time of the year, we don’t abandon our clients the other 11 months of the year. When you work with us, you’ll personally know who you’re talking to.  We bring an understanding of your business and a solid history of past exchanges to each new conversation. We provide consistent, prompt communication and guidance, and we are ready to serve you.

Zenefits is massive, but its size can be a disadvantage for clients who want to know who they are speaking to. You also want to know that your broker has a contextual and institutional understanding behind each new question or concern.

5.) Pricing Transparency

We are upfront with you about costs. If we are ever going to charge you a fee for an added service, we’ll let you know in a clear and timely manner so you can make an informed decision. We promise never to say “free” if we don’t mean it.

Technology-based companies claim to be free.  That statement is true for their “core features, ” however, beyond those basics, clients run into extra costs. These costs often include a monthly fee per-employee for certain features and even a per-employee charge for delaying implementation of core features.

6.) Compliance and Content

We provide our clients with content to meet business and employees’ needs.  We give you access to W3 Client Connect, a content portal, where you can target the information you need if you want to self-serve. Need help with compliance? Want employee newsletters? Need articles explaining benefits or related topics? Thinking about starting a wellness program? Want to make benefits education fun with short videos for employees? Whatever you’re looking for, we can deliver customized content and training for you.

These new technology-based companies don’t have a content library, employee educational articles, videos or newsletters, or wellness staff and program materials.

Technology-backed or Technology-based? 

When you are faced with a choice between Wallace Welch & Willingham and a technology-based company, consider what makes us different. Are you looking for a trusted advisor who can offer assistance while being backed by technology to make the process easier? Or are you looking for a technology-based solution that kicks service and expertise to the curb?

If you’re looking for a benefits expert who is technology-backed to meet your needs, contact Wallace Welch & Willingham today.

 

PPACA in 2013

PPACA in 2013

For employers and plan sponsors that have been adopting a “wait and see” approach before focusing on compliance with the Patient Protection and Affordable Care Act (PPACA), the wait is over. PPACA’s insurance mandates, market reforms, and employer requirements will move ahead as scheduled, with most of PPACA becoming fully effective in 2014. That is just one short year from now. Since the law left the task of working out specific details to the regulatory agencies (Department of Labor, IRS, and Department of Health and Human Services), employers can expect to see significant guidance between now and the end of 2013. We created this UPDATE to assist our clients with the complexities of PPACA, but must also give credit our legal partner, Proskeaur Rose, LLP for its preparation as several points come from a similar briefing prepared by their office on this topic.

THE NEW YEAR IS HERE, WHAT DO EMPLOYERS NEED TO KNOW AND DO FOR 2013?

For most employers, 2013 will be a critical “planning year” to prepare for the most notable PPACA provisions which impact plans in 2014. However, several important elements of the law were effective inlate 2012, or will become effective during 2013, including:

  • Expanded 100% coverage for women’s preventive care services, including certain contraceptives. (effective August 2012)
  • Mandatory W2 reporting on the aggregate cost of “applicable health coverage” for employers who issued more than 250 W2s for the 2011 tax year. The requirement will apply to all employers, regardless of size, when issuing W2s for 2013.
  • Issuance of Summaries of Benefits and Coverage (SBCs) to all eligible enrollees for open enrollment periods and plan years beginning on or after September 23, 2012.
  • $2,500 limit on pre-tax contributions to healthcare flexible spending accounts (FSAs) as of the first day of the 2013 plan year
  • Requirement to notify employees of the availability of health insurance exchanges (guidance pending; intended to be effective March 2013)
  • Increase in the Comparative Effective Research Fee (from $1 to $2 per participant per year) for the 2013 plan year
  • 0.9% Medicare payroll tax increase for individuals earning over $200,000 effective with the 2013 tax year

PREPARING FOR 2014

As noted above, the majority of PPACA’s most impactful provisions will arrive in 2014. Employers must start now and develop an action plan to prepare for the following legislative provisions and market reforms:

  • Maximum 90-day limit on eligibility waiting periods
  • Complete prohibition on preexisting condition exclusions for all individuals
  • Elimination on annual dollar limits for “essential health benefits”
  • Deductible limits of $2,000 single / $4,000 family for groups under 100 (clarification pending for larger employers)
  • Maximum Out-of-Pocket limits capped at the level set for HSA-compatible high-deductible plans ($6,250 single / $12,500 family) for groups under 100 (clarification pending for larger employers)
  • Coverage under non-grandfathered plans for certain approved clinical trials
  • Guaranteed availability and renewability of insured group health plans
  • Requirement for employers to certify to the Department of Health and Human Services regarding whether its group health plan provides “minimum essential coverage” (reports are actually due in 2015 based on 2014 benefits)
  • Fees commence under the Transitional Reinsurance Program. This assessment will be imposed from 2014-2016 in order to stabilize premiums in individual markets. Fees for the 2014 plan year are expected to be $5.25 per employee per month
  • Increase in allowable “outcome-based” wellness incentives from 20% to 30%
  • Initial phase of the Medicare Part D “donut hole” fix, which will eliminate the Medicare Part D coverage gap by 2020

PAY OR PLAY & THE EXCHANGE

Perhaps the most anticipated PPACA provision in 2014 is the “Pay or Play Penalty” and its impact on large employers. For purposes of this provision, large employers are defined as having 50 or more “full-time equivalent” employees. Full-time employees are those who work a minimum of 30 hours per week and there is an equivalency test for employers with significant numbers of part time employees. The determination of the number of full-time employees is based on the prior year. Further, an employer may take any consecutive six-month time frame during 2013 to determine if they will be subject to the large employer requirements in 2014.

The term “Pay or Play” refers to the requirement for large employers to offer full-time employees “adequate” and “affordable” coverage; or pay excise tax penalties for failing to do so. IRC §4980H & IRC §4980H (b) outline the applicable excise tax penalties for such employers. The penalties will be imposed when employees who do not have access to “adequate” and “affordable” coverage receive a tax credit for exchange-based coverage. Only citizens and legal U.S. residents who are not eligible for Medicaid and whose household income does not exceed 400% of the federal poverty level are eligible for exchange based tax credits.
The potential tax penalties foremployers are as follows:

Employers who do not offer coverage: An assessment of $2,000 per full-time employee per year will be charged to groups provided that at least one employee obtained a tax credit for coverage through the state or federal exchange. This fee will not apply to the first 30 full-time employees.

Employers who offer coverage that is “inadequate” or “unaffordable”: $3,000 per employee per year for each employee who obtains a tax credit for coverage through the state or federal exchange. Affordable means that the employee contribution for the lowest cost qualified plan does not exceed 9.5% of the employee’s prior year or annualized W2 wages as per the proposed IRS Safe Harbor rules. WWW can provide a pay or play analysis for you if you believe you may have an issue with a lower paid portion of your workforce.

Transitional relief will be provided for large employers who currently offer a non-calendar year plan. Such employers will not be liable for tax penalties under §4980H(b) for any months prior to the first day of their plan year beginning in 2014, so long as the 2014 plan is both “adequate” and “affordable”.

WHAT’S NEXT

In the coming weeks, plan sponsors should anticipate a flood of regulations which are expected to provide clarity on the above and other long-awaited topics such as the non-discrimination rules, testing framework to ensure that benefit plans do not discriminate in favor of highly compensated employees, and further clarification on the look forward/look back eligibility requirements to determine whether an organization is a large employer.

Amidst the uncertainty, it is clear that employers will see premium increases in 2014 when PPACA is fully implemented. While there are a variety of options to mitigate PPACA’s cost impact, employers must be mindful of employment law and ERISA implications when making such changes. Preplanning is essential. Employers considering workforce realignment, reduction in work-force, or benefit modifications should be discussing approaches with their consultants and advisors now. Proper compliance will likely require implementing certain changes in 2013 in order to satisfy any applicable “look-back” period requirement for 2014.

Wallace Welch & Willingham remains your committed partner
in PPACA compliance and looks forward to working with
each client on proper PPACA planning and strategy.

Now that the Supreme Court has ruled… what’s next?

Now that the Supreme Court has ruled... what's next?The individual mandate will stand as a “tax” versus commerce and Affordable Care Act will move ahead.  With all the fanfare Employers are beginning to plan for their next steps.

Some next steps Employers need to be thinking about:

1). Review your benefit offerings to make sure they meet the guidelines of essential coverage.

2). Watch your mail for notice of the MLR rebate and determine how you will distribute if your
plan qualifies.

3). Confirm with your carrier that your plan has been amended to comply with the Women’s Preventive Care provisions.  Must comply as plans renew beginning 8/1/12.

4.) Be on the lookout for your new Summary of Benefits and Coverage. Carriers are required to provide these for open enrollments/plan years beginning 9/23/12.

5.) If you have a Flexible Spending Account (FSA) you will need to check the allowable maximum. It is now restricted to $2,500 per person up to $5,000 per family.

6.) Employers who submit 250 or more W2 for 2012 must include the value of health care coverage in box 12 on employees W2. Check with your payroll vendor to make sure this amount can be tracked and reported.

Looking further ahead 2014 marks the deadline for many of the major provisions in Obama Care. Individual mandates begin, wellness initiatives are strengthened, automatic enrollment is mandated, waiting periods are restricted, penalties for NOT providing coverage begin, exchanges roll out, pre-existing provisions are eliminated and premium subsidies for lower income individuals become available.

Wallace Welch and Willingham is monitoring the events as they unfold and will keep you up to date on steps towards compliance. We welcome your questions and will be happy to assist.

This legislation still has many voids and unanswered issues. We anticipate seeing significant clarification and revision.  The 2012 presidential election could also have significant impact on the Affordable Care Act. So, for some employers “wait and see” may still be the best next step.