Employee Benefits Blog

Inflation has increased the cost of goods and services for most every employer, while low unemployment rates have pushed-up wage and benefit costs across the country. Restaurants, in particular, have seen their costs across the board soar, impacting already slim margins.

Some businesses have started to provide line-item detail of these additional expenses to customers, typically to help justify price increases or to make a political statement.

While this practice isn’t entirely new (it started to gain prominence ten years ago with the passage of the employer mandate, part of the Affordable Care Act), recent actions in this regard by two Scottsdale Arizona restaurants resulted in a $20,000 fine.

A recent study by the International Foundation of Employee Benefit Plans suggests that 32% of employers offer weight management programs while 45% cover bariatric surgery. This same survey indicates that 22% of U.S. employers are now covering certain prescription drugs for weight loss.

Perhaps this increase in prescription drug coverage is due to advancements in weight loss medications, or the growing recognition that obesity is a disease that increases the risk of other chronic conditions, such as high blood pressure, type 2 diabetes, coronary heart disease, and some cancers.

After all, the costs of obesity are enormous: Up to half of new diabetes cases in the U.S. are linked to obesity, and obesity costs the healthcare system nearly $173 billion annually.

Nevertheless, these drugs are expensive, costing as much as $1,400 a month, and necessitate long-term dosing.  And it’s fair to say that some of these drugs are being misused and abused.

This raises the question of whether employer health plan sponsors should cover this new class of drugs to treat obesity.

Despite originally announcing that both the COVID Public Health Emergency and National Emergency would end on May 11, President Biden has signed a resolution ending the National Emergency effective as of April 10, 2023.

Plan sponsors will now have less time to react to the end of the National Emergency, but this does not mean that all COVID coverage mandates or extensions have ended.

What Is Ending?
The end of the National Emergency brings the end of the “Outbreak Period” which gives additional time for individuals to:

• elect and pay for COBRA,
• exercise HIPAA Special Enrollment Rights to change plan elections mid-year, and
• file claims and request appeals of adverse claim decisions under ERISA.

In today's blog post we'll address what's ending, what's not ending, and what plan sponsors need to now do.

When a plan participant or beneficiary has Medicare and other health insurance, such as employer group health plan insurance, retiree coverage, or Medicaid, there can often be confusion as to which insurance pays first on claims.

Coordination of benefits (COB) rules, which are specified in plan documents or insurance policies, decide which insurance pays first. One plan is considered the primary payer that covers most expenses, while the secondary plan covers any remaining allowable expenses not covered by the primary plan.

The COB allows health plans to provide health or prescription drug coverage to individuals receiving Medicare to determine their payment responsibilities. This helps ensure that the total amount paid by all insurance plans does not exceed the total costs of the health care expenses for Medicare-covered services and items.

Today's blog post provides a general overview of COB rules under Medicare.

“Organizational culture” may be an overused phrase, but culture — and the employer-employee connection culture generates — has become part of recruiting, retention, and the assembling of the right benefits package to engender long-term loyalty.

How important are culture and connection within an organization? They definitely can make a major difference in candidate interest and employee satisfaction. Just consider the following;

• Mentioning culture in job postings increases engagement with the listing (67%).
• One-quarter of employees say they’ll leave an employer if they’re not happy with an organization’s culture.
• Nearly 15% of job seekers will decline a job offer because they don’t feel comfortable organization’s culture. 

Employee handbooks are important tools for establishing employee expectations, addressing workplace issues, and defending against potential lawsuits.

Failing to update employee handbooks regularly can make employers vulnerable to legal risks and liabilities, resulting in costly fines, penalties, and attorneys’ fees.

Employment laws are often complicated, and employers need to be aware of any new regulatory developments that may impact their organizations and workforce. Each new calendar year provides employers with an excellent opportunity to review and update the policies in their employee handbooks.

Here are five employment policies employers should consider reviewing in 2023. 

A growing number of employers are currently experiencing a rise in catastrophic health claims, largely due to medical and pharmaceutical advances (e.g., specialty drugs and cell and gene therapies).

In the past, employers have expanded cost-sharing methods to reign in rising health expenses, such as offering high deductible health plans, but today’s employers are hesitant to shift costs onto employees amid the tight labor market.

As a result, many employers with self-funded health plans are actively looking for impactful mitigation strategies. One of the most common strategies is purchasing aggregate stop-loss insurance to help cover catastrophic health claims.

Let’s face it. Rising interest rates and stubbornly high inflation are causing financial stress among those who previously felt financially secure. One can therefore appreciate how this one-two punch is now overwhelming anyone who wasn’t already in a decent financial position before these two economic conditions took hold. 

It’s well documented that concerns over money and financial security are now contributing to declines in mental wellness. At present, 19.86% of American adults, equivalent to nearly 50 million people, are experiencing a mental illness of some sort.

Well-constructed and employer-led financial wellness programs can help alleviate some of this pressure, leading to greater happiness and workplace productivity. Financial wellness now plays an essential role in ensuring what we like to call a Quality Employee Experience or QEX for short.

Regulations aside, employee benefits management hasn’t changed much in several decades, so it’s notable that employers are beginning to use traditional marketing tactics to make sure their benefits efforts hit the mark for their employees. 

Case in point: HUB Workforce Persona Analysis.  It’s a smarter way to inform your benefits strategy, meeting employees where they are. If your organization isn’t taking steps to understand your population using audience segmentation, you should. (You can watch a video on Persona Analysis here.)

Analysis of workforce personas enables employers to design personalized experiences from multiple perspectives. Seeing benefits from different angles can make your benefits spend smarter, resulting in a return on investment 5% to 8% ahead of a one-size-fits-all approach. Just ask any consumer marketer and they nearly unanimously will tell you that personalization also deepens customer relationships.

So why can’t this approach also advance your employee relationships? It can, for organizations that stop to take the pulse of their workforce and apply what they learn to guide how we engage each other and nurture healthy employee cultures. These actions ultimately inform better benefits design, improved job performance, boosted impacts from leadership, and reduced employee churn.

Here's how to look at it;

As businesses expand beyond their borders, it can be a significant management challenge to structure an employee benefits program.

There’s the risk of failing to meet regulatory requirements or offering packages that are competitive in the United States, but aren’t appealing elsewhere, or are unnecessarily expensive.

In addition, acquired rights rules in most countries outside the U.S. make it difficult to rescind benefits after they’ve been offered, making it essential to get it right the first time.

What’s more, multinational employers need to devote sufficient management time and due diligence efforts to ensure that benefits are appropriately designed and cost-effectively delivered.