As companies continue to rebound from the pandemic, ongoing challenges — including staffing shortages, unpredictable demand, and rising supply costs — have businesses on the hunt for any advantage. Evaluating funding strategies for medical benefits programs may be a good place to start.

With employers offering richer benefits to employees as a recruitment and retention incentive, organizations are taking a hard look at the options available. Captive insurance can be an ideal solution for medical benefits, offering mid-sized companies across most industries the opportunity to control medical and pharmaceutical costs and design a more customized health plan.

Compared to companies offering traditional, fully insured plans, companies retain more control and transparency through participation in a medical captive. Employers may also save as much as 30% to 50% in total prescription costs through an actively managed pharmacy program. Overall healthcare expenses may also trend lower over time, creating a cost advantage over competitors and a benefit to the bottom line. However, participating in a benefits captive involves more work and oversight in exchange for plan flexibility and the chance to create healthcare savings.

Just as HR professionals quickly adapted to changes at the height of the pandemic, they must now adapt and respond to today’s evolving expectations of organizations and employees alike.

As such, savvy HR leaders and professionals will approach 2023 with human-centric strategies that holistically support and benefit workers. Organizations will benefit from putting people first and listening to what their people need.
 
Today we'll highlight six HR trends to follow in 2023.

On nearly the eve of its expiration, Congress has extended the ability of high deductible health plans (“HDHPs”) to offer first-dollar telehealth coverage through plan years beginning before January 1, 2025. This will allow participants receiving this coverage to continue to contribute to a health savings account (“HSA") for this purpose.

Separately, the agencies responsible for enforcing prescription drug reporting have issued good faith relief, an extension, and some additional flexibility in reporting.

Deciding how many HR professionals an organization needs to operate effectively is a hotly debated topic. Some organizations rely on metrics to guide them in making this decision.

One of the most common metrics organizations use when deciding whether to hire HR professionals is the HR-to-employee ratio. When properly analyzed, this ratio can aid employers in meeting their HR needs and benchmarking their organizations against others.

It can help employers determine not only how to fill their HR staffing needs, but also analyze how well their HR professionals are delivering on organizational goals.
 
Today we'll explain the HR-to-employee ratio, how organizations can use it, and what employers should consider when deciding whether to hire HR professionals.

Employers subject to Affordable Care Act (ACA) reporting under Internal Revenue Code Sections 6055 or 6056 should prepare now to comply with reporting deadlines

in early 2023.

For the 2022 calendar year, covered employers must: a) furnish statements to individuals by March 2, 2023; and b) file returns with the IRS by Feb. 28, 2023 (or March 31, 2023, if filing electronically).

Penalties may apply if employers are subject to ACA reporting and fail to file returns and furnish statements by the applicable deadlines.
 
Note that while the annual deadline for furnishing statements to individuals is Jan. 31, the IRS finalized a 30-day automatic extension to the annual furnishing deadline. Thus, the deadline for furnishing statements to individuals for the 2022 calendar year is extended from Jan. 31, 2023, to March 2, 2023.

In addition, the IRS has provided an alternative to automatically furnishing statements to covered individuals in certain situations.

Emboldened by a strong labor market, employees find themselves in the driver's seat these days when it comes to demanding pay transparency. And with a growing list of jurisdictions now requiring employers to share compensation information, this trend shows no signs of slowing down.

In this post we will address the rules surrounding pay transparency across the country and workers’ growing demand for it. We will also discuss employer pros and cons, as well as strategies to implement pay transparency practices in an organization.

WHAT IS PAY TRANSPARENCY?

Pay transparency is when an employer openly communicates pay-related information through established practices to current or prospective employees. Employers can provide this information through various channels, such as online job sites, job postings, or during an interview.

Employers in Arizona may think they are immune to the nationwide surge in the enactment of Paid Family Medical Leave (PFML) programs. Nevertheless, they may want to reconsider this as they review their overall benefits strategy. This is especially true because there are actions Arizona employers can take now to better adapt in the future.

From a national perspective, there are 13 states that either have or are implementing PFML programs, representing over 25% of the country where employers will need to participate in some fashion.

States with PFML, such as California, Oregon, Washington, and Colorado, all surround Arizona, and some of our neighbors, such as New Mexico, have tried to get a PFML law passed for the last few years.

With over a million ballots cast so far statewide, Arizona voters are already making their voices heard in the 2022 mid-term election. In addition to Arizona's more obvious races in the national spotlight, Arizona has a measure on the ballot that may also interest those living outside the state.
 
Known as Prop 209, this measure would reduce the maximum interest rate allowable on medical debt from 10% to 3% and expand the assets exempt from medical debt collectors.

If it passes, it may prompt other states to move in this direction, especially those more progressive states or those states with significant populations in medical debt.

The IRS has finally announced adjustments to 2023 contribution limits on various tax-advantaged health and dependent care spending accounts, retirement plans, and other employee benefits such as adoption assistance and transportation benefits. Many of these contribution limits, though not all, are indexed to cost-of-living adjustments.

Together, these combined announcements by the IRS detail 2023 adjusted limits to the amounts employees can tuck away pretax into Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), transportation benefits, and retirement plans such as 401(k)s.

While IRS limits for HSAs and HDHPs are required, by law, to be announced by June 1st, limits for these other pretax savings vehicles always seem to come so late in the year that many employers have already completed their employee benefits open enrollments.

Employers who have already completed open enrollment for 2023 have two choices when it comes to communicating these updates; 1) they can do nothing, since there isn't an obligation to make the maximum election amounts available to employees, or 2) they can reopen the enrollment process and let employees who want to increase their elections do so before December 31st, for calendar year plans.

What follows is a consolidated summary of the new IRS limits;

Earlier this year the IRS announced proposed regulations extending ACA affordability to other tiers of employer-sponsored group medical coverage (employee + child/spouse, family, etc.). Today the IRS released final regulations.  

Previously, ACA affordability was based solely on the employee-only tier of coverage. If an employee was offered affordable, minimum-value coverage, the spouse and dependent children would not be eligible to purchase subsidized coverage on the exchange.

Under this new rule, if the family tier of coverage is not affordable, spouses and/or dependent children will now be eligible to purchase subsidized coverage on the exchange, provided they don’t have their own offer of affordable coverage.