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​Gaps and Updates in Employee Benefits

​​By Matthew Roberts, Director of Raffa Group Benefits, Raffa Financial Services

Managing an employee benefits program used to be a lot easier, I think. Most of us yearn for the good old days of rate stability, less onerous compliance and richer employee benefit programs.  Today’s dynamic environment means that the benefits consultant-client relationship is constantly and rapidly evolving. All clients want regular communication and prompt service, however, a recent broker services survey identified a significant service gap between what clients feel is important and whether or not they are being provided certain resources by their current advisor. 

The key gaps:

  1. Strategic benefit planning. Do you have a two to five-year plan for your employee benefits program that outlines goals, objectives and action plans?  What we generally find is most employers adopt the wait-until-we-see-how-bad-next-year’s-renewal-is-and-then-make-changes model.
  2. Employee communications on improving health and becoming better consumers of health care. As more employees transition from traditional health insurance to high deductible health plans (HDHPs/HSAs/HRAs), more resources are needed to help employees navigate the “new” insurance landscape. 
  3. Access to policies, compliance and HR tools. Just like the job of employee benefits consultant/broker continues to have more tasks added to it, so does Director of HR, CFO, etc.
  4. Plan design benchmark information.  It’s always surprising to see how few companies have formally done this.  Benchmarks are not a blueprint; however, it’s helpful to have some idea of how your benefits stack up with respect to your peers.

Updates

There’s this tiny piece of legislation out there that some of you may have heard of – the Affordable Care Act (ACA).  Everyone wants to know what’s next now that the Republicans have control of Congress and Donald Trump is in the White House. It’s easy to say “repeal and replace” but what does that actually mean? The answer is TBD. While all those not in favor of Obamacare would like to see it go away and quickly, the reality is doing something rash would have major ramifications in the individual market which then, in turn, would very likely impact the group market.  A recent study by the Congressional Budget Office (CBO) found that repealing the individual mandate would increase the number of uninsured by 18 million and cause premiums to increase by 20% to 25% in the following plan year! Based on this, I hope they spend a good amount of time on the “replace” half of the equation.

Sticking with the compliance theme, if you’re an applicable large employer (ALE), I’ve told many clients to wait and see in regards to the 6055/6056 reporting due March 2. It’s not that I’m endorsing procrastination, it’s just that this reporting is extremely tedious.  Can you imagine spending countless hours completing this project only to find out that it falls under the “burden” umbrella of the recently signed executive order?  With that said, I don’t recommend waiting until February 28 to start this project, but perhaps the first full week of February.  For all you overachievers out there that have already completed your 1094 and 1095s, good job!

Quick tips:

  • Medical inflation/trend - In a static environment, this is still at about 10%.
  • Health Savings Accounts (HSAs) – if you haven’t implemented one yet, strongly consider it. There are a lot of ways to present these to employees while softening the blow.  Virtually all of us will be covered under these types of plans in the near future.
  • Telemedicine – most insurance carriers have this as part of their plans, and one (Kaiser) doesn’t even charge for it! While it doesn’t appeal to me personally, it’s something that is being heavily promoted.
  • Wellness Programs and Financial Incentives – having the former without the latter almost always leads to a lack of success. Start with rewards focusing on participation before moving to results-based programs.
  • Medicare Part D Disclosure to CMS – sending out the Medicare Part D creditable coverage notices back in October was the first step in a two-step process.  Notifying CMS 60 days after the beginning of your plan year is the often overlooked second step.  So for all medical plans on a 12/1 plan cycle, the deadline is January 29, while those on a 1/1 cycle have until March 1.  Get to it!

If you would like to receive monthly compliance updates or if you have any questions, please email at matthew@raffafinancial.com.