Employee Benefits Blog

Determined to pass health care legislation before the July 4th break, the Senate on Thursday night released a draft ACA replacement bill called the Better Care Reconciliation Act (BCRA). As of this morning, at least five Republican Senators have said they won’t vote for the bill. GOP Senate leaders can only afford to lose two members of their 52-senator caucus in order for the bill to pass. (The loss of two would require Vice President Pence to cast the tie breaking vote, assuming not a single Democrat supports the bill.)

While passage as the bill stands now seems dubious, Republicans and the White House see this as one of the last chances they have to pass healthcare legislation before they can move on to tax reform, so amendments are likely to win back some of these Senators. That process, however, could push the vote to after the July 4 break. Still, Majority Leader Mitch McConnell is a seasoned politician, and many pundits doubt he’d call for a vote before the recess if he didn’t have a few aces up his sleeve.

Let's look at several elements of the bill which are particularly pertinent to employers:

Navigating the alphabet soup of types of health insurance can make anyone’s eyes glaze over, but it doesn’t have to be so intimidating — or boring. HMOs, PPOs, EPOs, POSs, and HDHPs share similarities, but they all provide health benefits in slightly different ways — and some of those can be deal-breakers for employees. Here’s a go-to guide for differentiating the types of health insurance plans available on the market today.

HMOs (Health Maintenance Organization)

Created by the Health Maintenance Organization Act of 1973, HMOs are designed to be a less expensive type of health insurance plan than some of the alternatives — in fact, they are usually among the least expensive options, but with that perk generally comes narrow networks and less freedom of choice when it comes to doctors and hospital systems.

With HMOs, you must see a primary care physician (PCP) prior to seeing any kind of specialist, otherwise the visit and any treatment provided may not be covered. In addition, the insurance policy does not cover any portion of a bill accumulated from an out-of-network provider. However, if an enrollee is transported to an out-of-network hospital in the case of an emergency (such as in an ambulance or life flight), services must be covered at the in-network price. The exception to this rule may be doctors within that hospital because they can bill separately (such as an anesthesiologist).

This type of health insurance generally boasts the least amount of paperwork, which is appealing for many people in an age where insurance paperwork seems to be as endless as it is pointless. Policyholders are subject to monthly premiums, in addition to their deductible, copays at the doctor’s office and pharmacy, and coinsurance.

Employers are struggling to assemble impressive employee benefits packages under the crushing weight of ever-increasing healthcare costs. While these escalating expenses may be forcing companies to cut back on their overall benefits package, there are still plenty of innovative ideas that can enrich a company’s offerings without costing them a fortune. Here are 11 out-of-the-box employee benefits that won’t frustrate your finance department.

8 Affordable Employee Benefits

Convenience Benefits

Dry Cleaning Pickup

Picking up the dry cleaning is something no one wants to do. It’s certainly an unappealing errand before or after a long work day, so offering an on-site pickup and delivery service can be a welcome employee benefit. Employees will pay for the cost of the actual cleaning, so at most, the employer will only be on the hook for a delivery fee from the dry cleaner. It’s a cost-effective way to give some time back to employees.

Flexible Schedules

Allowing employees to work a flexible schedule is essentially free for employers. As work-life balance becomes an increasingly hot topic, workers will appreciate that they can get to their kid’s school event at lunchtime and make up the hours later that evening or on the weekend.

This is an easy employee benefit to offer — as long as there’s some sort of tracking system in place. Some companies use the honor system (assuming everyone will get their 40 hours in), while others use tracking websites, such as Toggl to “clock in and out” so supervisors can be assured their employees are all on task.

As employers search for ways to create meaningful employee benefits packages, many have turned to life insurance policies. It’s become fairly standard to offer life insurance in the amount of the employee’s annual salary at no cost to the worker. Beyond that, it’s common to offer “buy up” options for employees who might want additional coverage for themselves, or sometimes for a spouse. This could be double, triple, or even five times the amount of a person’s annual salary and in these cases, the premium for extra coverage is typically paid entirely by the employee.

Life Insurance 101: Understanding the Policies

Much like health insurance, life insurance options can be confusing. There are three different types (whole, universal, and term) and even variants among those three. How are people supposed to choose? How do they know which policy is best for their family? We put together a cheat sheet to prepare employees and HR professionals alike to make a more informed decision.

President Trump promised to repeal ObamaCare on “day one”. While it’s going to take a little longer than he had planned, it does look inevitable that an overhaul to the Affordable Care Act (ACA) will eventually pass both houses of Congress, even despite recent legislative setbacks.

One of the least popular provisions of the law, at least for employers, is the “employer mandate”, which requires certain employers with 50 or more “full-time equivalent” employees (FTEs) to provide an affordable healthcare plan. With the proposed law as it stands today, now in jeopardy, a pressing question is now looming over employers: if the employer mandate really is repealed, should they drop their health coverage?

The issue certainly isn’t cut and dry, with some believing that no matter what happens in Washington, employer-sponsored healthcare is dying and others predicting it will never really go away. Assuming the ACA’s employer mandate is repealed, every company will have an important decision to make, weighing the benefits and pitfalls of dropping coverage.

Repealing the Employer Mandate

Republican lawmakers have spoken on countless occasions about wanting to repeal the employer mandate. The Trump administration even ran on a platform of getting rid of it. In theory, this doesn’t seem like a big deal, but in practice, it’s more difficult than it seems. The employer mandate, after all, is the primary mechanism by which healthier people are brought into the overall risk pool, which is the only way a healthy insurance market works (healthy people subsidize the unhealthy, essentially). Without it, most experts predict that insurers would pull out of the healthcare exchanges and the entire program will collapse.

When building a comprehensive benefits package, many business owners are (understandably) grateful just to be able to offer medical coverage. But some employers also tend to leave out voluntary benefits, which can enrich the employment experience and be a helpful recruitment tool for potential employees — all at little or no cost to the employer. If voluntary benefits are outside your purview, check out this quick-reference guide to fill in the blanks.

What Are Voluntary Benefits?

While the definition of voluntary benefits has become somewhat blurred over the years (and are sometimes referred to as worksite benefits or even ancillary benefits) they are, for the most part, insurance products meant to fill in healthcare gaps where health, dental, and vision insurance might not reach, and can increase the value of your employee benefits package. Typically, voluntary benefits are paid in full by the employee and made easy through payroll deductions — most of the time at a lower rate than what can be found on the individual market and frequently taken out of wages pre-tax.

Common examples of voluntary benefits include:

• Accident Insurance: Provides compensation to employees if they suffer major physical harm due to an accident. Some insurance policies even reimburse employees for seeing their doctor a couple times per year.
• Critical Illness: Provides a lump sum to enrollees in the event of a critical illness (such as a heart attack or stroke) which can be used to pay medical or non-medical expenses (like child-care) while an employee is unable to work.
• Cancer Insurance: In the event of a cancer diagnoses, an enrollee receives money with which to pay for treatment and sometimes, to help pay non-medical expenses.

Are you missing the mark with your efforts designed to promote wellness, as well as target other population health issues? Is this inability to effectively target the right employees as well as drive real behavioral change driving up your claim costs, and ultimately your premiums?

If you’re like most small businesses, you’re relying on your employee benefits broker to help out in this area. Unfortunately, most brokers aren’t equipped to help you “unearth” these issues and they certainly aren’t staffed to help guide any effort towards taming your workforce’s true health issues. In fact, when faced with this challenge, most brokers typically hand their clients a set of somewhat generic carrier-generated posters and flyers and call it their “strategic communications plan.”

Here is what you should expect from your employee benefits broker and why customized content is far more effective than cookie-cutter fliers in the break room.

Flying Blind With Generic Marketing Pieces Just Doesn’t Cut It

Setting aside the inability to identify and target true population health risks for a moment, let’s just talk about the efficacy (or inefficacy more likely) of these communication materials. Generic fact-sheets frequently miss the mark because they are written for such a general audience that they fall flat and lack a meaningful call-to-action.

When starting a business, most entrepreneurs want to attract employees by offering them a robust benefits package. Then, reality sets in, and they realize that this will have to wait until they establish positive cash flow. Well regardless of if an employer is just starting out or if they’re already well established, employers need to realize that there are certain required employee benefits they MUST offer in order to maintain compliance with the law; failure to do so can trigger large penalties. Here are required employee benefits employers cannot skip — and some that are only applicable as a business grows.

Required Employee Benefits For Employers of Any Size

1. Social Security and Medicare Benefits

Every employer, regardless of size, is subject to the required employee benefit of matching their employees’ social security and Medicare contributions. The current rate for social security is 6.2 percent of the employee’s wage from each party, equalling 12.4 percent in total, up to the first $127,200 in earnings. This amount is also known as the “wage base limit.”

While employers across the country are battling the rising cost of health care, Arizona employers are facing unique challenges of their own. Arizona’s border with Mexico presents unique circumstances many states don’t encounter, and certain state laws have created a challenging environment for employers to cultivate meaningful employee benefits packages. Here are four issues Arizona employers are facing in 2017 when it comes to employee benefits:

Arizona Employee Benefits Issue #1: Lack of Exchange Options

For small businesses with fewer than 50 full-time equivalents (FTEs), offering a SBHRA (Small Business Healthcare Reimbursement Arrangement) can be a challenge. Taking advantage of newly passed legislation regarding SBHRAs should generally help small businesses with recruitment and retention — however, the lack of Exchange options in Arizona is likely to frustrate employees, rather than appeal to them.  

This lack of Exchange options means competition is virtually non-existent, which generally leads to higher healthcare prices. Of course, this means employees are having difficulty finding affordable healthcare that fits within their budget, leading some employers to feel obligated to increase the amount they offer via SBHRAs.

Some companies regrettably try to "go it alone" when it comes to crafting healthcare and employee benefits programs for their workforce. Perhaps because of a previous broker relationship which they feel didn't bear much fruit, some companies discount the impact a talented employee benefits broker can have on their business. Others fear that the services of a broker will be too expensive, or that it will be difficult to find one they can trust. Despite these objections, most HR professionals will concede that any decent employee benefits adviser knows far more about healthcare and the field of employee benefits than they ever could.

It's true that some employee benefits brokers are essentially "order takers" — simply taking instruction from employers who think they know best and/or are looking to get their benefit selections done as quickly as possible. The really good ones, however, will help companies approach their benefits programs in a highly strategic fashion, thereby driving impactful investment decisions while at the same time identifying critical savings opportunities.

Developing this symbiotic relationship with your benefits broker is a two-way street; these consultants and advisors can’t do all the work alone. To maximize impact, they need your assistance and cooperation. In that regard, here are a few things you can do to ensure you’re getting the best work out of your employee benefits broker — not just during open enrollment, but all year round.