Employee Benefits Blog

Many employers understand that an employee handbook can be an invaluable resource for codifying important information. Despite this, a fair number of small businesses choose to forgo this critical training, compliance and communication tool.

Some view an employee handbook as too time-consuming to prepare. Others just don’t see it as a priority. For companies with a lot of tasks on their plate (and who doesn't fit that bill) an employee handbook just never seems to make it to the top of the to-do list.

Be forewarned, however, that failing to put your company policies in writing could cause headaches down the road. Any time you save now by not documenting and circulating policies and procedures is likely to be spent later on the phone answering the same question over and over, or sitting in a crisis management meeting because someone on staff mishandled an situation.

Not only do employee handbooks ultimately save you time, but a well-crafted handbook could help you avoid litigation, thus providing you with invaluable peace of mind. Whether it’s policies, benefit details, or payroll and time off schedules, your employee handbook should be a go-to resource for your workforce. Here’s how to get the most value out of yours.   

Group health insurance renewals, a critical part of the employee benefits planning process, are time consuming and stressful for everyone involved — employers, employee benefits brokers, and insurance carriers alike.

We’ve yet to meet an employer who enjoys hearing about how their rates are likely increasing...yet again. And no employee likes to find out their premiums, deductibles, and copays are going up, let alone that they have to choose a new medical plan and a new set of healthcare providers because you’re changing carriers — again.

As an employer, it’s also hard to know if you’re getting a good deal on your health insurance renewal as the components of pricing are complex and seemingly nebulous. It’s not all cloak and dagger though, and with knowledge comes understanding. Therefore, it’s important to understand what goes into a health insurance renewal so you and your employee benefits advisor can negotiate better rates for your business.

The Three Major Purposes of Annual Health Insurance Renewals 

While the process can be tedious, annual health insurance renewals serve three major purposes:

• First, they provide employers with the opportunity to switch insurance carriers or health plans, as well as adjust contribution levels, prescription drug formularies, eligibility rules, and coverage decisions (just to name a few of the many plan design options which can be modified).
• Second, they allow insurance carriers the opportunity to update plan options, rules and regulations, and most importantly, reassess the estimated risk of covering your group for the upcoming year.
• Third, they allow both insurance carriers and employers to renegotiate pricing for the upcoming year.

Health insurance renewals don’t have to mean a change in carriers — in fact, there’s a lot to be said for sticking with the same providers year-after-year. But that being said, there’s nothing wrong with trying to get a better deal, especially if circumstances have changed and most especially if you can make a fact-based case for your appeals. This is much easier to achieve if you work with an employee benefits broker with underwriters on staff who can negotiate on a peer-to-peer basis with carrier underwriters (more on that later.)

One of the most common questions we receive as an employee benefits broker is how much the average employer contributes to their employees’ health insurance premiums. It’s a tough question because there are a lot of different factors involved, but luckily, there are some excellent resources available to help us source reliable answers.

In addition to our own proprietary client roster, one of our favorite resources is the annual Kaiser Family Foundation (KFF) Health Benefits Survey because it succinctly summarizes data from an accurate (and broad) representation of employers across the country and provides charts and graphs to make the information more easily digestible. This allows us to show our clients trends over long periods of time and perhaps help predict what they can expect for the upcoming year.

Here’s what the 2017 KFF Health Benefits Survey reported for employer contributions to health insurance and how the data compares to the previous benefits year.

Today, many employers are facing an interesting phenomenon companies have never experienced before. There are at least three generations making up the bulk of workforce, with two other generations filling things out at both ends of the age spectrum. Each of these generations has a different set of priorities, which presents unique management and employee benefits challenges for employers. Each of these generations is influenced by the period of time in which they were raised; their work lives are shaped by world events, cultural phenomena and personal experiences.

How is one employer supposed to make three (or even five) generations of people happy? Managing employee benefits across a multigenerational workforce might not be easy, but it’s certainly not impossible.

Defining the Generations

Whether you have 50 employees or 500, chances are you have a mix of generations working for you. So let’s first discuss the various generations before diving into multi-generational benefit design. Here's a breakdown of these five groups.

The Silent Generation

Born between 1928 and 1945, a good portion of this generation grew up (or was born) during the Great Depression and were named such because, at the time, it was believed children were meant to be “seen and not heard.” The older portion might have served toward the end of World War II. People in this generation are at least 72 years old as of 2017. This portion of the workforce is rather small at this point — about 2 percent.

Because this entire generation is above the traditional “retirement age,” most of the people still working in this age bracket are in high level positions, while others are running their own businesses or still working in a family-run company. That said, there are some who work in part-time, hourly and seasonal positions primarily to keep themselves busy and to interact with people.

When your company is healthy and growing, it’s not uncommon for the subject of a merger or acquisition to come into play. They can be excellent strategic moves to help you gain additional distribution, capital, access to patented processes, or simply broaden your customer base.

But while the CEOs, CFOs, and COOs are working out the details of the sale, your HR department will be dealing with the day-in-day-out human component. They’ll be fielding questions from concerned employees, figuring out how your employee benefits will be affected, and looking for possible solutions.

CHROs have a tough job ahead of them during mergers and acquisitions and we have some experience in assisting employers through the process. Here’s what we’ve learned and how you can apply it to your own employee benefits issues in mergers and acquisitions.

The Role of HR in Mergers and Acquisitions

Mergers and acquisitions are complicated endeavors, involving an incredible amount of work and attention to detail. Because HR departments are the ones who deal with the human component (arguably the most valuable in any company), they’re tasked with some of the most difficult pieces of the puzzle.

After all, a case can be made that human resources is far more complex than most other departments because every person is different. Each employee has different needs, motivations, and goals, which will cause each person to feel differently about the merger or acquisition. Some may feel apprehensive or scared, while others may be excited at the new possibilities.

As such, the failure to reach objectives after a merger or acquisition is oftentimes blamed on the human resources department. Reasons such as “incompatible cultures, [differences in] management styles, poor motivation, loss of key talent, lack of communication, diminished trust and uncertainty of long-term goals” are typically cited as barriers to success.

But if HR-related issues can be blamed for failure, there’s no reason they can’t be praised for the successful merger of two companies or acquisition of another. We’re willing to bet that the objectives behind such business strategies couldn’t be obtained without talented HR professionals easing the transition.

At this point, everyone knows the Affordable Care Act (ACA) requires all employers with 50 or more full-time equivalent (FTE) employees to offer affordable coverage to their workforce. This requirement is called the employer mandate.

What’s less clear for some employers is to whom the coverage must be extended. Do employers have to offer family health insurance coverage? Dependent health insurance? What about coverage for spouses? The answer is pretty straightforward, so let’s dive right in and clear up all that confusion.  

ACA Requirements for Employers

The ACA requires that applicable large employers (ALEs) offer affordable coverage to their full-time employees and their dependents up to age 26. However, the law makes no requirement for spousal coverage, nor does it mandate that employers pay for any portion of the premium for dependents.

So in short — employers are not required to offer family health insurance. That being said, many employers choose to offer coverage for spouses and families, regardless of whether dependents are older or younger than 26 years of age. In addition, most choose to subsidize a portion of the premium as well.

One trend picking up steam in the past decade is to only offer spousal coverage if the spouse isn’t able to obtain health insurance through his or her own employer (or if the spouse doesn’t work).

Another common practice is for an employer to levy an additional surcharge for spouses who can obtain insurance through their own employers, but prefer to be on their spouses’ insurance instead. The reasons for doing so are often wide and varied. Nevertheless, the surcharge is often relatively minimal — perhaps around $100.

Insurance terminology sometimes makes discussions about healthcare feel like we’re all speaking in different languages. The jargon insurance companies use is oftentimes confusing for the average person to understand, only further exacerbated by the legalese in which everything insurance-related is written. It feels like we all need a translator just to figure out what insurance policies cover and what participants will be responsible for.

The truth of the matter is that people understand less about health insurance than they like to believe. A 2016 survey by PolicyGenius found that just 4 percent of those polled could correctly identify four common insurance terms: copayment, copay (some people think they mean something different), deductible, and coinsurance. And while 83 percent of people believed they understood the word “copay,” only 52 percent could actually define it correctly. To make matters worse, only 36 percent of millennials could define any of the four terms properly.

As a member of the human resources team, the responsibility of bridging this knowledge gap and educating your workforce oftentimes falls to you. An educated workforce will make better employee benefit enrollment decisions, and will be less of a burden on your employee benefits hotline.

With that in mind, we’ve put together a glossary of common insurance terminology that you can easily slip into your employee benefits enrollment guide or your employee handbook. While we’ve included 11 of the most common terms here, you can download another 52 by clicking here.  

As much as we hear about large companies and their impact on the economy, small businesses employ nearly half the workforce. According to data from the Small Business Administration, small businesses employed 58.9 million people (or 47.5 percent of the workforce) in 2015, creating 1.9 million net jobs in 2015 alone.

Small businesses have a major impact on the economy and on the welfare of their employees’ lives, but they don’t typically have the resources (cash or otherwise) that larger employers do, limiting their options when it comes to providing health insurance (which is still the most important employee benefit).

Of course, small businesses with fewer than 50 full-time employees aren’t held to the employer mandate — it’s up to each employer to decide if they want to offer health insurance to their employees. However, many small business owners view health insurance as one of the most effective ways to attract and retain the best employees and improve productivity (by keeping everyone healthy).

But when the numbers game counts against them, what options are available to small employers?

So it was with great interest that we took note of last Friday’s White House Rose Garden announcement by President Trump to “bring soaring drug prices back down to earth” by promoting competition among pharmaceutical companies, and giving private entities more tools to negotiate better deals on the behalf of consumers, insurers and employers.

Somewhat surprising in his announcement was his abandonment of some of the more populist proposals which he boasted about during his presidential campaign, including his promise to authorize the Feds to negotiate directly with drug companies in an effort to lower Medicare drug prices and disallowing American consumers from importing low-cost prescription drugs from overseas.

Nevertheless, both Republican and Democrats (as well as all of us here at the JP Griffin Group) welcomed the President’s attention on combating high drug prices. The looming question remains just how the President’s promises to lower drug prices will play out and if the concepts proposed will ever come to pass.

We certainly hope the plan gains traction as both employers and employees alike could sure use a break from escalating drug prices which have now become a primary driver of health-related expenditures.

As if there weren’t enough questions surrounding the type of health insurance plans you offer your employees, there’s also the question of how to best fund the program. Fully funded, self-funded, and level funded health plans can be found throughout every industry, but small businesses tend to face more funding challenges with health insurance than their larger counterparts.

While they aren’t required by law to offer healthcare to their employees, many small businesses (as defined by the ACA) nevertheless feel inclined to do so. Some choose to do it simply because they want to take care of their employees, while others do it to strengthen their recruitment and retention strategies. Of course, many employers do it for all three reasons.

Regardless of their intentions, small employers who offer healthcare to their workforce know the cold, hard facts: health insurance is still ranked among the most important factors for potential employees in a compensation package. Job-seekers see how volatile the individual marketplace is and understand that the most reliable and cost-efficient way to obtain healthcare is still through an employer.

Because fully funded health insurance plans tend to be expensive for small businesses, many are turning to level funded health plans, which blend the economic advantages of self-funding with the financial predictability of fully funded plans. That said, level funded plans aren’t without their detractors.

What is a Level Funded Health Plan?

A level funded health plan (also known as a partially self-funded plan) is a type of health insurance plan that combines the cost savings and customization of self-funding with the financial safety and predictability of fully funded plans. Employers still contract with insurance companies, but agree to take on more of the financial risk.