Employee Benefits Blog

Anyone who has ever signed up for cellular phone service with a mobile phone carrier knows what a burdensome service agreement looks like. It's pages and pages of terms and conditions, often delivered by an anxious salesperson consumed with an expectation that the customer desiring service will sign the carrier agreement on the spot.

While consumer law often provides protections to the little guy when big corporations require the signing of contacts like this, the courts aren't nearly as understanding when it comes to agreements between business parties. In many of these cases, the courts expect business-to-business agreements to be fully enforced.

This is particularly unfortunate given what's occurred over the last decade in the employer-sponsored group benefits space. These agreements have morphed from straightforward, comprehendible documents to verbose and cryptic agreements that shift virtually all risk to the plan sponsor (e.g., the employer) while relieving the vendor from almost all meaningful liability.

Plan sponsors have seen some of this behavior abate in recent years, fueled by their successful push back against commercially unreasonable contract provisions. Furthermore, the DOL's Fiduciary Rule, which went into effect July 1, 2019, has also helped neutralize some of these more unreasonable provisions.

Nevertheless, employers should resist the temptation to view the provisions of their employee benefits vendor contracts as minor details. The wrong provisions could easily bankrupt a small to medium-size business or cripple the growth of a larger one.

Although every single word of every vendor contract needs to be reviewed carefully by not only you and your employee benefits broker, but also qualified legal counsel, here is a list of five common provisions that require special attention.

By 2025, almost 23% of the U.S. workforce is expected to work fully remote, according to Upwork. That’s nearly double the percentage of people who were working remotely (full time) prior to the pandemic. 

While this prediction might be lower than some employers are expecting, (and some employees may be hoping for), any shift of this magnitude, or greater, will fundamentally change the way employers attract and retain talent.

With remote work quickly becoming one of the most desirable benefits an employer can offer in today’s tight labor market, employers are already discovering that they are competing for top candidates not only locally, but globally. 

For some highly desirable employers, this can be seen as a huge boon to their recruiting efforts. For other employers, especially those in less desirable industries, or those with poor reputations and/or employee benefit plans, this should be viewed as a tremendous concern.

Here are some unique qualities of strong remote workers and best practices for attracting and recruiting them. 

The COVID-19 pandemic is finally getting under control. As more Americans get vaccinated, states are gradually lifting restrictions, and life is returning to pre-pandemic normalcy. Finally, individuals can get to the tasks they’ve been postponing for more than a year.

Unfortunately for employers looking to retain employees, some employees are now ready to find new jobs.

Turnover is a common occurrence throughout any given year. However, during the COVID-19 pandemic, year-over-year turnover trends drastically reduced. Workers instead clung to their jobs as a way to maintain financial security, having seen countless others get furloughed or laid off.

Now, as the economy opens back up, employers are pushing for employees to return to the workplace. But, a significant number of employees are unwilling to return to the status quo that was established pre-pandemic.

Employers bracing for a post-pandemic baby boom can rest easy. A spike in post-pandemic pre- and postnatal healthcare costs, as well as an influx of maternity and paternity leaves, aren’t likely to come to fruition. 

While nationwide data on birth numbers isn’t expected to come until later this year, an Associated Press analysis of data from 25 states indicates that the anticipated baby boom looks more like a bust. Recently released data by the CDC and the U.S. Census Bureau also supports much of the same. 

The data indicates that births have fallen dramatically in many states during the coronavirus outbreak. Births for all of 2020 were down 4.3% from 2019. Still, more tellingly, births in December 2020 and in January and February 2021 (nine months or more after the spring 2020 lockdowns) were down 6.5%, 9.3%, and 10%, respectively, when compared with the same periods a year earlier.

Together these declines account for an 8% decline versus a year ago, making this period the lowest the birthrate has dropped in over 40 years. This is good news for employers since childbirth and newborn care are oftentimes the most expensive medical conditions billed to employer-based insurers.

That said, falling birthrates present a host of other challenges that dwarf high claims costs.  

Visit most any restaurant these days and you’ll quickly interact with one of the “winners” of this pandemic. I’m talking about QR codes. These “bar codes on steroids”, now used to launch menus and online ordering apps, made a roaring comeback in 2020 thanks to their usefulness in the socially-distanced era of COVID-19.

That same can be said for telemedicine. While telemedicine has been around for decades, it’s acceptance by both patient and provider was somewhat anemic, at best, until the pandemic hit. Before COVID-19, it wasn’t at all uncommon to see telemedicine utilization rates in the single digits. Now it’s not unusual to see utilization rates in the 60 to 70 percent range.

While it’s wonderful to see a more widespread acceptance of this highly convenient and efficient healthcare delivery method, there is immense confusion over the set of terms used somewhat haphazardly (and interchangeably) to describe these virtual health services.

In the past year, we’ve heard carriers, employers, patients, policy makers, payers, and providers use everything from “telemedicine”, “telehealth”, and “telecare”, to “virtual medicine”, “virtual health” and “virtual care” to describe health services delivered via telecommunication technologies.

This post attempts to shed some light on the difference between these terms. While the differences might not seem all that important, they can be when working across different organizations, especially where reimbursement, data exchange, and data protection is concerned.

I’ll make a prediction. It’s going to be very difficult for all of us to become more informed consumers of healthcare when large swaths of that very system seem to be working against us at every turn.

For years now, my organization has championed price transparency in healthcare. We believe it to be the very best solution to bringing down runaway medical care and prescription drug costs, which have pushed up the cost of employer-sponsored health insurance by more than 50% this past decade.

We believe price transparency holds this power to improve group health insurance rates because it ideally allows employers to better ascertain which insurers offer the best discounts while at the same time allowing employees to shop around for healthcare services and prescription drug costs amongst various providers.

That’s why we were hopeful regarding a Trump administration rule that took effect in January, mandating that nearly all hospitals must make their prices public – a move that hospitals sued to stop but lost in both district and circuit courts.

For years now, it seems as if insurance companies have been the ones who have been made out to be the bad guys, and while they aren’t entirely off the hook, it’s nice to see hospitals finally identified as complicit in this mess.

On the flipside, we’re disappointed that just this week the Department of Health and Human Services (HHS) issued an order to delay the effective date for another Trump era executive order designed to lower prescription drug costs, again through actions which would bring about more pricing transparency. 

Setting aside what is hopefully just a temporary setback to the drug pricing transparency effort, one has to believe that the ruling on hospital price transparency alone holds great promise. And this would be true if it weren’t for the outrageous and rather nefarious transgressions being instituted by many hospitals around the country to circumvent this ruling.

These actions certainly have us wondering if consumer-directed healthcare even stands a chance.

Employer reimbursement of gym memberships was a popular employee benefit before COVID-19 hit the U.S. back in March 2020. Since then, workout facilities have suffered some of the highest pandemic-related losses and may not be a viable option for as many employers in the future.

From prolonged forced closures to capacity limits to time-consuming enhanced cleaning protocols, many fitness industry insiders and gym members themselves feel that gyms will never be the same as they were pre-pandemic. 

Despite these setbacks to the fitness industry, people are anxious to exercise again, especially after a long period of inactivity during quarantine. This is not to say that some people haven't doubled down on exercise during the pandemic, but the vast majority of people have not.

Faced with this quandary, employers may find it challenging to determine which fitness-related benefits to offer as we transition from lockdowns into such an altered physical and attitudinal landscape.

Today's blog post explores how the fitness landscape has changed and some potential options to consider in place of traditional gym memberships.

While my blog post yesterday provided an overview of the American Rescue Plan of 2021 (ARPA), I thought it might be helpful to take a closer look and deeper dive into the employment-related provisions of the ARPA, which President Joe Biden signed into law last night before his televised address to the nation.

Along with providing financial relief to individuals, schools, businesses, and state and local governments, the law contains the following measures of which will undoubtedly be of special interest to employers and their employees:

• A subsidy for COBRA premiums, funded through employer tax credits
• Extension of employer tax credits for FFCRA employee leave voluntarily provided through Sept. 30, 2021
• Expansion of employee earnings eligible for the FFCRA tax credit
• Inclusion of testing and immunization as reasons for FFCRA leave
• Extension of $300 increase in weekly unemployment benefits
• Extension of weekly unemployment benefits for workers who otherwise wouldn’t qualify for these benefits
• Expansion of subsidy for ACA premiums
• Increase in DCAP contribution limits
• Extension and expansion of the employee retention tax credit

Let’s discuss each of these in further detail;

Seven weeks into President Biden’s term, the American Rescue Plan Act, his first major piece of legislation, is set to become law. The House passed a final version of the $1.9 trillion relief bill yesterday afternoon, and just moments ago the President signed it into law, in advance of his first prime time address to the nation later today.

Most experts agree that the relief package is more than just a stopgap measure to shore up the economy or respond to the coronavirus pandemic. The bill contains major federal investment in low- and middle-income Americans, intended to drive economic growth by aiming money at people who are more likely to spend it versus those who might be more likely to save the money. (Critics of the bill argue that many of its provisions are aimed at strengthening the country’s social safety net and have little to do with the coronavirus pandemic.)

Highlights of the bill include extended unemployment benefits, direct checks to individuals, housing assistance, aid to schools and child care, and more.

While some of the bill was changed during its time in the Senate, it’s largely similar to the initial version passed by the House. However, some key provisions, such as a higher minimum wage, were scrapped amid efforts to pass the bill swiftly.

In addition, the bill does not include an extension of the eviction moratorium or an expansion of mandated paid sick and family and medical leave. While neither were included in the original House bill, these were popular provisions contained within one of the previous bills.

The $1.9 trillion package enjoys broad public support, with 70 percent of Americans expressing a favorable opinion of it, according to a Pew Research Center poll released yesterday. That includes nearly all Democrats and more than two in five Republicans, although it should be noted that no Republican lawmakers in Congress voted for the bill.

Here are the most relevant provisions included in the bill.

As COVID-19 vaccines become more widely available, many employers are starting to consider setting-up onsite COVID-19 vaccination programs.

For many employers, operationalizing an onsite service like this may seem like nothing new since many have offered onsite flu shots as part of their workplace wellness programs for quite some time. That said, and as we all know by now, COVID-19 is nothing like the seasonal flu. Therfore, employers need to take heed of this advice as they begin planning for onsite vaccination efforts.

Most of the advice that follows comes by way of guidance from the Centers for Disease Control and Prevention (CDC). As of this writing, vaccine programs are not yet available to very many employers. Nevertheless, vaccination programs will eventually extend to additional workplaces as vaccine availability increases, meaning that employers should begin planning accordingly. 

As I addressed in an earlier blog post about employer rights with regards to offering and/or requiring workforce COVID-19 vaccinations, employers are in a unique position to help propel vaccinations, accelerating the country towards the 75% vaccination target that has been cited by top infectious disease experts as being required to fully eliminate the need for social distancing.

Company leaders find themselves in this unique position because it's widely believed that they can, in most cases, legally compel most of their employees to get vaccinated, making it compulsory and a requirement for returning to work. Regardless, just making vaccinations more convenient and easily accessible will also go a long way in helping to accelerate inoculations.

As I stated in my earlier blog post, and wish to reiterate here, just because something can be done doesn't necessarily mean it should be done. Setting that aside, today's blog post simply addresses the guidance the CDC is currently providing with regards to employer-led vaccination programs.