Employee Benefits Blog

When building a comprehensive benefits package, many business owners are (understandably) grateful just to be able to offer medical coverage. But some employers also tend to leave out voluntary benefits, which can enrich the employment experience and be a helpful recruitment tool for potential employees — all at little or no cost to the employer. If voluntary benefits are outside your purview, check out this quick-reference guide to fill in the blanks.

What Are Voluntary Benefits?

While the definition of voluntary benefits has become somewhat blurred over the years (and are sometimes referred to as worksite benefits or even ancillary benefits) they are, for the most part, insurance products meant to fill in healthcare gaps where health, dental, and vision insurance might not reach, and can increase the value of your employee benefits package. Typically, voluntary benefits are paid in full by the employee and made easy through payroll deductions — most of the time at a lower rate than what can be found on the individual market and frequently taken out of wages pre-tax.

Common examples of voluntary benefits include:

• Accident Insurance: Provides compensation to employees if they suffer major physical harm due to an accident. Some insurance policies even reimburse employees for seeing their doctor a couple times per year.
• Critical Illness: Provides a lump sum to enrollees in the event of a critical illness (such as a heart attack or stroke) which can be used to pay medical or non-medical expenses (like child-care) while an employee is unable to work.
• Cancer Insurance: In the event of a cancer diagnoses, an enrollee receives money with which to pay for treatment and sometimes, to help pay non-medical expenses.

Are you missing the mark with your efforts designed to promote wellness, as well as target other population health issues? Is this inability to effectively target the right employees as well as drive real behavioral change driving up your claim costs, and ultimately your premiums?

If you’re like most small businesses, you’re relying on your employee benefits broker to help out in this area. Unfortunately, most brokers aren’t equipped to help you “unearth” these issues and they certainly aren’t staffed to help guide any effort towards taming your workforce’s true health issues. In fact, when faced with this challenge, most brokers typically hand their clients a set of somewhat generic carrier-generated posters and flyers and call it their “strategic communications plan.”

Here is what you should expect from your employee benefits broker and why customized content is far more effective than cookie-cutter fliers in the break room.

Flying Blind With Generic Marketing Pieces Just Doesn’t Cut It

Setting aside the inability to identify and target true population health risks for a moment, let’s just talk about the efficacy (or inefficacy more likely) of these communication materials. Generic fact-sheets frequently miss the mark because they are written for such a general audience that they fall flat and lack a meaningful call-to-action.

When starting a business, most entrepreneurs want to attract employees by offering them a robust benefits package. Then, reality sets in, and they realize that this will have to wait until they establish positive cash flow. Well regardless of if an employer is just starting out or if they’re already well established, employers need to realize that there are certain required employee benefits they MUST offer in order to maintain compliance with the law; failure to do so can trigger large penalties. Here are required employee benefits employers cannot skip — and some that are only applicable as a business grows.

Required Employee Benefits For Employers of Any Size

1. Social Security and Medicare Benefits

Every employer, regardless of size, is subject to the required employee benefit of matching their employees’ social security and Medicare contributions. The current rate for social security is 6.2 percent of the employee’s wage from each party, equalling 12.4 percent in total, up to the first $127,200 in earnings. This amount is also known as the “wage base limit.”

While employers across the country are battling the rising cost of health care, Arizona employers are facing unique challenges of their own. Arizona’s border with Mexico presents unique circumstances many states don’t encounter, and certain state laws have created a challenging environment for employers to cultivate meaningful employee benefits packages. Here are four issues Arizona employers are facing in 2017 when it comes to employee benefits:

Arizona Employee Benefits Issue #1: Lack of Exchange Options

For small businesses with fewer than 50 full-time equivalents (FTEs), offering a SBHRA (Small Business Healthcare Reimbursement Arrangement) can be a challenge. Taking advantage of newly passed legislation regarding SBHRAs should generally help small businesses with recruitment and retention — however, the lack of Exchange options in Arizona is likely to frustrate employees, rather than appeal to them.  

This lack of Exchange options means competition is virtually non-existent, which generally leads to higher healthcare prices. Of course, this means employees are having difficulty finding affordable healthcare that fits within their budget, leading some employers to feel obligated to increase the amount they offer via SBHRAs.

Many employers are making the move from traditional healthcare plans such as HMOs, POSs, EPOs, or PPOs, to high deductible health plans, commonly referred to as HDHPs. Employers find that HDHPs allow them to save on premium costs while at the same time encouraging workers to become more active and educated consumers of healthcare. Some companies might offer HDHPs as one of two or more medical plan options, although this strategy does them little good in terms of saving money if the majority of employees fail to adopt an HDHP plan.

Regardless of the options employers choose to offer, consumer-driven healthcare is on the rise and high deductible health plans aren’t going away anytime soon. As they continue to become more and more prevalent, it’s important for HR to step up their communication efforts. Employees will be (understandably) concerned and confused by the differences in HDHPs, but it’s nothing education, patience and a bit of behavioral economics knowledge can’t solve to ward off buyer's remorse. Here are some ways to help employees embrace high deductible health plans.

1. Communication is Key

As with any other change in your company, you must be very explicit and intentional in your communication. Remember that people like to have explanations for what is happening (and why), rather than have changes dictated to them without any kind of supporting information. Just remember Benjamin Franklin's oft-cited adage "Tell me and I forget, teach me and I may remember, involve me and I learn."

When introducing a HDHP, it's critical to hold an active (vs. passive) enrollment. It's also smart to hold an open enrollment meeting so your employees can ask you questions - just make sure they’re prepared for it by sending out the benefits information a few days prior to presentation. In this way, they'll have time to review the information and come prepared with any questions they might have. Be as candid as possible so they feel as though you’re understanding their concerns - and do your best to be as patient as you can to assuage their fears. This course of action will go a long way toward a smooth transition.

2. Educate Employees about How High Deductible Health Plans Work

If your employees have never been enrolled in a high deductible health plan before, they’ll have plenty of questions about how they work. Why aren’t there copays? How much does an office visit cost at the doctor? What if one of the members on the plan is seriously injured? For what type of person are HDHPs most appropriate? Although HDHPs are growing in popularity among employers, employees tend to know very little about them and therefore, shy away from them.

State lawmakers are currently reviewing a piece of legislation that could improve Arizona healthcare for a number of residents. Senate Bill 1441 seeks to solve a common Arizona healthcare problem: surprise medical bills from out-of-network physicians after receiving treatment or having surgery through in-network providers. It’s a frustrating (and confusing) situation, especially for those who have done their research beforehand to make sure all providers were covered by their insurance policy. How are people getting unexpected bills? And what will this legislation do about it?

The Arizona Healthcare Problem: Surprise Bills

In the state of Arizona, people seeing in-network doctors and utilizing in-network hospitals systems frequently receive surprise bills from out-of-network providers. It’s become a common Arizona healthcare narrative these days. If it hasn’t happened to you, you probably know someone who has encountered this issue in the past.

How does this happen? Well, it’s actually pretty complicated.

Let’s say you need surgery. You do your necessary diligence by researching the hospital, the surgeon, and the other doctors you know you’ll be in contact with. You make sure they’re all in-network so you’re minimizing the bills you receive after the fact. Everyone (including the hospital network) is covered. You should be all set, right?

Some employers choose to take on employee benefits administration with paper forms and spreadsheets, thinking they’ll save money. They see the cost of online automation, coupled with the monthly commitment — usually per employee, per month (PEPM) — and find it hard to believe the benefits of the software would be worth the investment. It’s true that employee benefits administration software is not free, but the benefits of automation far outweigh the cost.

The reality of the situation is that regulation complications, paperwork, and human error end up costing employers far more time than it's worth. And of course, that doesn’t include the fines your business could incur as a result.

Here are six ways leveraging employee benefits administration software with automation can save you time and money.

1. Increased Efficiency for Both Employer and Employee

Automated employee benefits administration increases efficiency for both the administrator, and your employees who use it. Regardless of the task you are trying to complete, it will, in short order, take less time when it’s automated as opposed to old-fashioned spreadsheets, or worse, paper. 

Many companies still have employees fill out paper forms, which an HR director or assistant then has to manually enter into a payroll system, an HR system, and the health insurance system. What took two or three people to accomplish could have taken one — the employee — if an employee benefits administration software was used.

With well-organized systems, all of those different parts talk to each other and disperse the information where it needs to go, which means you get to focus on real work instead of paperwork.

Discover how our platform-agnostic approach to automation transformation provides the confidence our clients demand when implementing the perfect platform for any enterprise. Click here to learn more.

The healthcare landscape looks quite different than it did 20 years ago. In the 1990’s, getting decent health insurance through your employer wasn’t unheard of — it was assumed. But back then, healthcare wasn’t nearly as expensive; rates have increased every year for nearly two decades and it’s unlikely they’ll reverse course anytime soon.

In order to afford health benefits for employees, many businesses have had to restructure their offerings, causing a rise in the popularity of high deductible health plans (HDHPs). In 2015, nearly one-third of large employers chose to only offer high deductible health plans to employees and over 80 percent added HDHPs to their list of health insurance offerings.

Because HDHPs don’t seem to be going away anytime soon, it’s important that all business owners and employees familiarize themselves with how these plans function.

The History of High Deductible Health Plans

Healthcare costs began to increase noticeably (and more consistently) around the year 2000. In 2009, the Kaiser Family Foundation reported a 131 percent increase in family premiums (105 percent for individuals) over the previous decade. Since then, premiums have continued along the same path. Between 2009 and 2013, family and individual premiums each increased about 78 percent — with no realistic end in sight.

In the early 2000’s, as health insurance prices increased, businesses providing healthcare for employees began looking for ways to save money. At that point, high deductible health plans were few and far between, but some companies picked them up, believing that it was their best option.

There’s no doubt that the healthcare industry has shifted dramatically since the early 2000’s. Anyone dealing with health insurance has noticed the difference, from HR Directors to CFOs to employees and individuals shopping in both the group and individual markets. Perhaps the most apparent and imposing trend we’re seeing is the increase in overall cost, which has caused everyone to search for more economical solutions.

The Current Trend: Consumer Driven Health Plans

For qualified large employers, an increasingly common solution is to offer consumer driven health plans (CDHPs), which are better known as high deductible health plans (HDHPs). HDHPs are sometimes called “catastrophic-only” and, as the name would indicate, they always come with higher deductibles. In turn, these plans typically come with lower premiums, which saves the employer (and in some cases, the employee) money. With HDHPs, the employer may even be able to take on a larger portion of the premium due to lower costs overall.  

In addition to lower premiums, many HDHPs are eligible for health savings accounts (HSAs), allowing both employer and employee to contribute tax-free funds to a real savings account. These funds can be used to pay eligible medical, dental, and vision expenses, but unlike flexible spending accounts (FSAs), there is no “use it or lose it” clause. The funds stay in the account until they are used — even if decades pass. In fact, unspent funds can eventually be converted into retirement accounts with unique tax-saving advantages.

What Consumer Driven Health Plans Mean for Policyholders

At first glance, it might seem as though these two ideas are a bit contradictory. High deductible health plans are still chosen by employers, so what makes them “consumer driven” health plans?

The first of two confirmation hearings for Georgia U.S. Rep. Tom Price for Health and Human Service Secretary will come just two days before Donald Trump is set to be sworn in as president.

The Senate Health, Education, Labor and Pensions Committee plans to hold a hearing on Price’s nomination on January 18, according to the office of the panel’s chairman, Tennessee’s Lamar Alexander. The Senate Finance Committee will also be holding its own confirmation hearing for Price. That’s also expected in the weeks ahead.

Majority Leader Mitch McConnell has expressed his desire for the Senate to confirm many of Trump’s Cabinet nominees on Jan. 20, the date of Trump’s inauguration, as has been custom in recent years. But the Kentucky Republican has not divulged his specific plans for Price.

Democrats are not happy about the Roswell Republican’s selection as Trump’s health chief, but they likely don’t have the votes to kill the nomination. They can, however, draw out the Senate’s consideration process for a day or two.

Dr. Price is an orthopedic surgeon representing a district north of Atlanta. He has been studying how to accomplish the goal of dismantling the Affordable Care Act for more than six years, according to the New York Times. The bills he has introduced into congress since 2009 have included detailed replacement plans, and much of what he advocates has involved removing the federal government from healthcare and other employee benefits programs.

Based on these previous submissions, here's how Trump'sHHS Secretary nominee may impact healthcare and employee benefits.