Employee Benefits Blog

Employers have been struggling to find the best way to provide affordable health benefits to their workers for many years now. One promising option, especially for those with smaller workforces, is to offer insurance through multiple employer welfare arrangements (MEWAs) and association health plans (AHPs).

The idea behind MEWAs is to bundle small groups into a larger community, thereby spreading risk over a larger and more diverse pool of covered individuals. It’s the same principle large employers benefit from by way of lower insurance premiums.  

If your small business is looking for cheaper healthcare options, MEWAs and association health plans may be good options for you to investigate.

What is a MEWA?

MEWA stands for multiple employer welfare arrangement, but is also sometimes referred to as a multiple employer trust (MET). MEWAs allow small employers to essentially team up to create a larger pool of employees to capitalize on the economies of scale that larger employers enjoy. This could mean as few as two employers in the group, or as many as deemed necessary to form a large enough employee pool.

Each employer gets a say in plan design, as well as plan offerings. If one employer has an older population who prefers more traditional plans, they can request such for their workforce. If another employer has a younger workforce for whom high deductible health plans would be more appealing, they could request more consumer-driven healthcare options for their employees. With these groups banded together, the premium costs should be lower than if each employer tried to get insurance on their own.

Around 10,000 baby boomers turn 65 every single day, which means 10,000 more people become eligible for Medicare. If your human resources department hasn’t yet been inundated with questions from your older employees about Medicare eligibility, they will at some point — and soon.

After all, many boomers are choosing to work a bit longer than the standard retirement age of 65 for a variety of reasons — some are still physically able to work, so they’re taking advantage of it, others are trying to save more for retirement (because so many people haven’t saved nearly enough, if anything), and others just aren’t ready to give up their day jobs yet.

It’s possible that some of your employees have deferred Medicare eligibility because they haven’t actually retired yet, but some people who are still employed find it’s cheaper to take the leap into Medicare (and all its parts) than to stay on their employer-sponsored health plan (though many choose to enroll in both). That said, it’s not quite that cut and dry when it comes to those enrolled in health savings accounts (HSAs) through high deductible health plans (HDHPs).

Here are the things that need to be considered when an employee or covered spouse turns 65:

Medicare Part A

With the exception of those employees actively contributing to an HSA, there’s really no reason for them not to enroll in Part A, which covers hospitalization, home health care, care at nursing homes, and hospice care. As long as employees have worked and paid Medicare taxes during a minimum 10-year period of time (the period of time deemed long enough by the government), Medicare Part A comes premium-free (however, it does come with coinsurance). The situation gets a bit more complicated when employees who are ready to enroll in Medicare are also contributing to an HSA.

Everyone is looking for ways to save money on their healthcare costs — especially employers, who are shouldering a large portion of the burden when it comes to insurance premiums. If you’re looking into self-funded insurance options, you’re certainly not alone. Self-funding is surging in popularity among companies of all sizes, including those with as few as 50 employees.

Employers are drawn to self-funding because of the promise it holds to curtail costs, the freedom it provides to customize plans, and the desire to be unburdened by strict regulation. Regardless of whether or not you choose to move to a self-funded insurance option, it’s worth exploring this funding alternative so you can make the right decision for your business.

What is Self-Funded Insurance?

Self-funded health insurance is a form of employer-sponsored healthcare that doesn’t use traditional insurance carriers as a conduit for medical care. Instead, premiums are paid to the employer, which the company uses to pay for medical claims. Self-funding has traditionally been found in larger businesses, typically 1,000 employees or more, because they’re more likely to have larger reserves and cash flow to absorb a bad claim year than a small business.

The financial upside of self-funding is that employers get to keep any premiums which aren’t spent on claims. In a fully-funded environment, those savings are retained by the insurance company as profit.

The downside is that you’re opening yourself up to greater degrees of expense variability. In a low claims year, you’ll save money — but in a high claims year, you'll have to be prepared to absorb any overruns in healthcare expenses. Regardless, in our opinion, employee benefit expenditures should always be looked at over a multi-year time horizon. 

At some point or another, every human resources employee helps to facilitate a leave of absence under the Family Medical Leave Act (FMLA). HR personnel can probably recite FMLA guidelines and regulations in their sleep, but the average employee is pretty much out of touch with what the law entitles them to, and quite often they don't realize what’s actually required of their employers.

FMLA rules are designed to protect both the employer and the employee. From an employee’s perspective, they’re able to take necessary medical leave without fear of losing their job. For employers, it helps them work toward the goal of true, equal opportunity employment for both men and women.

Let’s face it, healthcare has become a major expense for everyone in this country. To help offset a portion of this costly burden for employees, employers typically offer two very popular tax-advantaged savings accounts: HRAs and HSAs. But what’s the difference between these two healthcare savings plans, what are the legal distinctions, and which is better for your employees and your company?

Making an informed decision about these tax-advantaged reimbursement plans can help you maximize the benefits for both your employees and your company.

(For a side-by-side comparison of these plans, including comparisons to FSAs and QSEHRA tax-advantaged accounts, click here to download our four page guide.)

Defining HRAs and HSAs

Not to be confused with a flexible spending account (FSA), an HSA, or health savings account, is a savings account specifically linked to a qualified high deductible health plan (HDHP); it’s meant to help offset the higher out-of-pocket expenses that potentially come with plans of this design.

More and more companies are choosing to forego the traditional method of funding health insurance and are instead opting for a self-funded insurance program. 

For many companies, this is a great way to reduce expenses because the employer gets to drop any collected but unspent premiums to the bottom line. (In a fully-funded scenario that profit would go straight to the insurance company.) That said, self-funding is also a gamble, since an employer can also experience a plan year in which medical claims are higher than collected premiums.

This is where stop loss insurance comes into play.

What is Stop Loss Insurance?

Stop loss insurance is essentially insurance for an employer’s self-funded insurance plan (the technical term is Reinsurance or Excess Insurance). It caps the amount an employer would be responsible for paying in the event of a catastrophic claim, or series of catastrophic claims.

Stop loss caps come in many shapes and sizes and are typically driven by the risk tolerance of the company putting them in place. Stop loss insurance can prevent you from ending up in a number of financially dangerous situations because of employee illness or injury, including:

• Decimating your budget (or your emergency reserves) for the year out of a need to cover employee healthcare costs.
• Being unable to pay employee healthcare costs, then finding yourself being sued as a result.
• Losing great employees due to the fact that you're no longer providing the coverage they expected (and used to receive) from their employer.

Employee morale can ebb and flow in an office environment. Sometimes dips in morale have nothing to do with actual work — it could mean people are struggling with personal issues and it’s seeping into their professional life. The trouble is, emotions are contagious. We start mimicking each others faces when we’re just hours old and it doesn’t stop in adulthood. At work, positive feelings can spread throughout your staff, just like negative ones — and both can spread through your work and impact morale.

If you notice that multiple employees are displaying negative behaviors (eye-rolling, sarcastic comments, reluctance to get work done, or coming in late), it may be time to boost morale at work. Boosting employee morale doesn’t have to involve a series of complicated incentives. Most of the time, it’s about providing some outwardly noticeable benefits that your workforce enjoys — the kinds of things they’d tell their family and friends about when boasting about the place they work.

With baby boomers starting to retire, millennials have become the largest portion of today’s workforce. For years now, employers have been asking themselves how they can attract and retain this elusive generation — crafting tailored employee benefits packages — and just when they think they’ve got the hang of it, Generation Z pops up.

Gen Z is also known as the post-millennials, the digital generation, and the iGeneration, but regardless of what you call them, they’re beginning to enter the workforce. Though they may be dreading the prospect, it’s already time for HR Directors to start thinking about what kind of employee benefits package will recruit a whole new generation.

Who are Generation Z?

The boomer generation is the only one with agreed upon dates recognized by the census bureau (1946 through 1964), but the media has spent plenty of time defining (and debating) the others. For the most part, people agree that Gen Z begins sometime between 1997 and 2001.

Some make the case for defining this generation as starting on September 11, 2001, in recognition of the historical event on that day which changed every facet of American life, including the way we raise our children. Without a doubt, Gen Z is being raised with an entirely different perspective on life than those who came before them.

Most employers in America have some kind of workplace harassment training in place. The majority of the time, it’s hokey, outdated videos full of unrealistic scenarios that completely miss the nuances of personal interaction, followed by a series of questions with very obvious answers. Pretty much anyone could correctly answer those questions without actually paying attention to the videos. We all know the “right” answers because they’re so obvious.

The recent sexual harassment allegations in the news have left many business owners and HR departments wondering what they can do to improve sexual harassment training in their companies, while enduring push back from staff who are dreading yet another terrible seminar.

It’s important for every company to have effective workplace harassment training and subsequent guidelines for how to handle accusations, as not doing so can leave you vulnerable to lawsuits. But not having proper training and procedures can also create a breeding ground for workplace harassment, giving rise to employees feeling unsafe at work, which doesn’t create the type of environment people enjoy working in — and it’s definitely not the kind of place that recruits and retains the best talent.

Workplace Harassment in the News

Sexual harassment has been prevalent in the news lately, as more and more women (and men) are coming forward about their experiences with workplace harassment. Discussions of harassment and assault have been picking up momentum since the summer of 2016, when 24 women made assault or harassment allegations against then-presidential candidate Donald Trump.

Since then, multiple men have been accused, including former Fox News CEO Roger Ailes, former Fox News host Bill O’Reilly, filmmaker Morgan Spurlock, celebrity chef Mario Batali, Metropolitan Opera conductor James Levine, former host and creator of the radio show "A Prairie Home Companion" Garrison Keillor, former Today Show anchor Matt Lauer, journalist Charlie Rose, hip hop producer Russell Simmons, former Minnesota Senator Al Franken, actor Kevin Spacey, comedian Louis C.K., defeated Alabama Senate candidate Roy Moore, and of course, movie mogul Harvey Weinstein. The list goes on, and on, and on.

Now that nearly every adult has a smartphone, employers are realizing the need to develop policies that address cell phone use at work. As useful and helpful as our handheld devices are (and we do use them for everything), they can be distracting, and at times, a security risk.

In many ways, employers have helped foster this problem. Many employers expect their workforce to always be available, which makes it hard to tell employees they can’t use their cell phones at certain times or in certain settings at work. It might sound a bit hypocritical of us to make such demands and then tell employees they’re on their phones too much. All of us — from the top of the organization down — have gotten so used to a device in our hands that it gets admittedly difficult to put it down.

Cell Phone Use at Work and How it Affects Productivity

A survey conducted by staffing firm OfficeTeam found that employees spend about 56 minutes per day using their cell phones for personal business while at work. While managers surveyed assumed their employees were looking at social media, many employees said they were actually reading and responding to personal emails. In addition, 58 percent of workers reported using their cell phones to visit websites that were blocked or banned by their employer.