Employee Benefits Blog

There are several comprehensive federal statutes that impact workplace wellness programs. While employers who invest in wellness initiatives almost always do so with the best of intentions, violations of these regulations can be costly.

Today we'll focus on three key federal laws which employers should keep in mind when building out a wellness plan. They are as follows;

1. The Health Insurance Portability and Accountability Act

The Health Insurance Portability and Accountability Act (HIPAA) includes nondiscrimination rules that apply to wellness plans being offered in connection with group health plans. Under HIPAA, workplace wellness programs are divided into two categories: participatory wellness programs and health-contingent wellness programs.  

Here are the main differences between these two types of programs;

You don’t have to be a health insurance expert to know that healthcare coverage makes up a significant portion of businesses’ operating costs. Looking ahead to next year, Willis Tower Watson predicts the average annual per-employee cost for health insurance will increase 5.3% to $12,850 (up from $12,200 in 2017).

Understandably, employers are always looking for ways to get a firmer handle on rising healthcare costs and often turn to wellness programs as a possible solution.   

Three Important Federal Laws That Affect Wellness Plans

Before you launch a wellness program, it’s important to do your homework. Mistakes can be costly for both your employees and your bottom line. One area you should pay particularly close attention to is the intersection of wellness plans and federal law.

There are several comprehensive federal statutes that impact workplace wellness plans, so before you put your plan in place, make sure you consult with a legal expert who can help you stay on the right side of the law.

This afternoon the IRS officially announced the final 2020 election/contribution limits for Flexible Spending Accounts (FSAs), qualified Commuter Benefits, and several retirement savings vehicles. (See comparison tables, below.)

Considering that many employers have already held their employee benefits Open Enrollments for 2020, today’s announcements by the IRS can best be filed under the “better late than never” category.

These IRS statements finally set official contribution limits for Health Care FSAs, Dependent Care FSAs, Limited Purpose FSAs, Qualified Parking and Qualified Transportation Saving Plans, 401(k)s, 403(b)s, most 457 plans, IRAs, SIMPLE Plans, and the Federal Government’s Thrift Savings Plan.

All of these saving plans provide participants with the opportunity to save money, either by paying for qualified expenses with pre-tax savings contributions, or by saving for retirement with pretax elections. 

Companies across the U.S. are chasing a Monday deadline to provide the federal government with full disclosures of how they compensate workers of all genders, races and ethnicities. The data collection exercise, the largest and most detailed ever, is part of an effort by the government to close gaps in earnings.

Subject to the requirement are the more than 70,000 private U.S. companies with more than 100 workers. Collectively these companies employ more than 54 million American workers. These firms must submit their compensation information to the Equal Employment Opportunity Commission (EEOC) by September 30th.

This deadline comes almost two years after the rule, issued under the Obama administration, was originally scheduled to go into effect. In 2017 the Trump administration pumped the breaks on the rollout of the new rule, arguing that the collection and aggregation of such in-depth salary information was a burden on companies. (Advocacy groups sued the EEOC to get the pay-reporting requirement reinstated.)

EEOC officials say that this detailed compensation data, which will span virtually every industry and region of the county, will help them quickly ascertain which discrimination complaints deserve closer scrutiny, from the tens of thousands that are filed with the EEOC annually. (They received over 75,000 in 2018 alone.)

Many companies stick with their employee benefits broker for years on end, not giving too much thought to whether a change is warranted. HR directors always have long to-do lists full of time-sensitive issues, so finding a new broker is typically the last thing on their minds — except maybe during contract renewal season if the news isn’t good (and it never seems to be with health insurance these days).

The issue here is that there is a point when it’s time to fire your broker, but recognizing it when the time comes is difficult because you have a million things on your mind and far more pressing matters at hand.

However, there are some definite signs it’s time to find a new employee benefits broker and it’s important to keep an eye out for them. Here are some of the big ones.

Sex, politics, and religion. That was the list of topics I was taught when growing up to never discuss when we had guests over for dinner. Those were pretty much the ground rules Google set-out to establish last month when it issued new guidelines limiting employee discussion of politics in the workplace.

Google claimed their guidelines were intended to protect a “productive work environment” by corralling what has already become very heated water cooler talk in the run-up to the 2020 presidential election. Nevertheless, late last week the National Labor Relations Board ordered Google to stand down. In its ruling, it instructed Google to affirm employees’ rights to express their views, within the workplace environment, on political and workplace issues.

The settlement was born less out of Google’s issuance of new guidelines but rather as a result of recent complaints from conservative employees who claim they were fired due to their political views.

According to a recent New York Times article, accusations of political bias at major tech companies has become a powerful rallying cry among conservatives. This includes accusations by President Trump that engineers in Silicon Valley intentionally skewed the way their systems display content online to reflect liberal positions. For their part, major technology companies deny these accusations of bias.

To be fair, Google’s new guidelines didn’t forbid discussing politics at work, but they did require managers to address conversations that became disruptive. The updated guidelines were an attempt to dial back what has historically been the company’s wide open discourse. In addition to politics, Google also advised employees to avoid name-calling, including making blanket statements about groups or categories of people.

An increasing number of married employees are obtaining health insurance coverage through their own plans rather than their working spouses’.

Regardless of whether this reflects sound economic strategy (depending on employer contributions), personal preference, or is the result of spousal carve-outs instituted by employers as a cost-mitigation strategy, having two working spouses each go on their own individual high-deductible health plans (HDHP) increases the chance of overfunding health savings accounts (HSAs). This is not unlike the situation some married couples find themselves in when they accidentally overfund their Dependent Care FSA by each accidentally maxing out their contributions through their individual employers.

HSA Contribution Limits for 2019

Unlike last year when the IRS adjusted HSA contribution limits multiple times during the year, the 2019 HSA contribution limits are set and fairly straightforward. They are as follows:

• $3,500 self-only contribution limit
• $7,000 family contribution limit
• $1,000 catch-up limit for people age 55 and over

These represent a $50 increase for individuals and a $100 increase for families compared to last year’s numbers. The catch-up limit has remained unchanged. (All of these figures include both employer and employee contributions.)

When just one person is contributing to an HSA, these limits are easy to apply. A bank representative can explain the account to them and help them make contributions that don't exceed the applicable limit.

In situations that involve two spouses, however, staying within the contribution limit becomes a little more involved. 

At the start of this calendar year, Arizona became the latest state to adopt a mini-COBRA law, which impacts small employers. The new law specifically applies to employer-sponsored medical plans issued or renewed on or after January 1, 2019. (Employers with plans that were issued or renewed prior to this date have a little more time to comply with the law.)

The law requires small employers – those that offer group health plans, including medical, dental and vision - to offer continuation coverage to eligible employees and qualified dependents who experience Qualifying Events that would typically result in a loss of coverage.

These events include such things as loss of employment (for reasons other than gross misconduct), divorce or separation from the covered employee, or death of the covered employee.

Employers impacted by this new legislation are those that have fewer than 20 employees for more than fifty percent of its typical business days during the prior calendar year.

Although the new mini-COBRA continuation coverage requirements are very similar to the Federal COBRA requirements that apply to larger employers, there are some key differences. We invite you to download our side-by-side comparison of COBRA and Arizona’s Mini-COBRA of how these requirements compare with one another.