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What’s New in Benefits for 2018

By Chris Wrba, Venefits, LLC

Chris Wrba of Venefits LLC discusses what you can expect from 2018 health insurance plans.

Affordable health plans with low premiums and high deductibles are expected to plateau in 2018. Employers have typically relied upon these plans as a cost-controlling strategy. In an increasingly competitive market, employers will find it difficult to offer such plans, which have scaled-back benefits.

The upside is with over the counter drugs. Several patents for branded drugs have expired, bringing down the overall revenue from pharmaceutical sales in the U.S. For employers, this means that in 2018 there will be fewer opportunities to purchase less expensive generic drugs.

There is increasing pressure on Big Pharma to moderate drug prices. This scrutiny is expected to limit increases in price and bring less expensive alternatives to the market in 2018. The focus is on providing value and minimizing waste. Employers will have access to new treatments and technologies and will benefit from strategies such as limited prescription quantities.

Increased cost sharing with the consumer and lower utilization as a method of reducing medical costs will no longer be an effective strategy. Employers will have to develop new strategies to curb employee medical costs.

It is interesting that in the five years from 2011 to 2016, the insurance premium for employer-provided family coverage increased by 20 percent. With health spending continuing to outpace economic growth, the increased cost of health insurance is eroding into the ability of the consumer to pay for necessities such as food, housing, and transport. It is projected that in 2018, medical costs will continue to grow faster than the GDP and take up an even bigger share of the economy. This will lead to increasing dissatisfaction with low-premium health plans that entail a high deductible and force consumers to forgo services such as preventive healthcare. In 2018, therefore, businesses will need to tackle medical costs in the new health industry landscape with a focus on both the price of services as well as utilization rate. In 2018, employers are looking at cost strategies like raising deductibles and adding a gap plan to cover the out of pocket medical expenses associated with hospitalization and diagnostic testing for the employees.

For assistance on your benefit needs, or to see how Vensure can help solve your benefit concerns with these ever-changing issues, contact benefits@vensure.com or visit:

https://vensure.com/blog/peo-services/employee-benefits/

Selecting the Right Benefit Plan

Once you have great employees on board, how do you keep them from jumping ship? One way is by offering a good benefits package.

In today’s competitive marketplace, offering benefits is a valuable part of the compensation package, but the complexities of finding the right benefit offerings, as well as the costs associated, can be overwhelming.

Rebecca, an employee who had been working for the XYZ Widget Company, made an appointment with her Human Resources Manager, Mrs. Brown. Her purpose for scheduling the meeting, to request an increase in benefits, since she had been with the company for three years. After all, she was instrumental in helping the company achieve a 28 percent increase in sales within the past year, so she felt that an “appropriate” reward would be a better health insurance package.

As Rebecca spoke to Mrs. Brown, she pointed out that during her time of employment with the XYZ Widget Company, her department increased sales, which resulted in increased revenues. As she made her point, she said she felt her department should receive a more comprehensive health insurance package, an increase in annual leave and a larger percentage bonus at the end of the calendar year. Rebecca indicated that the entire department put several hours of overtime and hard work in the plan to bring the government in as a customer. As long as they continue ordering the widgets they need and XYZ Widget continues meeting their needs, the company as a whole will benefit and profits will only continue increasing.

As Mrs. Brown listened to Rebecca, she acknowledged the achievement the sales department had made. Nevertheless, there was more to consider… XYZ Widget had to look at not only the sales the department has made, but the costs of running the company. Mrs. Brown explained that she felt the insurance plan was adequate, and the eight days per year in annual leave, as well as the 10 percent bonus was fair.

Rebecca expressed that it had been five years since the company reviewed their health insurance benefits and made changes. As for the annual leave, comparable companies provide their employees 10 days a year of annual leave. Regarding annual bonuses, the same companies provided their employees 15 percent of their annual income.

With so much competition, it is important to set your company apart by offering those incentives that will attract talent and promote loyalty. Benefit options are evolving. Don’t stay stagnant because you think you have limited or no options. Regardless of your situation, Vensure can help you select the right package for you and your employees needs, whether it involves reviewing your current package, or starting from scratch. Sometimes we may even be able to help put money back in your pocket! Contact your Client Relations Manager for more information.

Disability Insurance More Affordable Than You Might Think!

Your ability to make a living is one of the most valuable assets you possess. The money you earn during your working life is what enables you to plan for retirement, save for the education of your children and buy a home. If that income stream were interrupted, you would probably find it very difficult to make ends meet. That is why disability insurance is such a vital employee benefit

Disability is designed to protect you in the event of an illness, accident or other event that renders you unable to earn a living. If you do not yet have this vital insurance in place, VenSure can assist with finding a plan that protects you and your family.

No one wants to think about death or disability, but it is important to prepare for both contingencies. If you have a family that depends on you and your income, you need to safeguard, not just your life, but your earning power as well.

VenSure offers affordable solutions to your short term disability needs. We have partnered with The ABACUS Group. ABACUS will customize a disability program that will be right for you. Please contact benefits@vensure.com for additional information.

Answers To Employer’s Questions – 401(k)

Running a business is a daily learning experience. New questions and situations arise concerning employees and it’s up to you to find the right answer. The following situation, which occurred at one business, could easily occur at any business. Understanding what your company’s 401(k) plan allows, in advance of any employee questions or actions, assures you of being prepared to address any situation that arises regarding 401(k) contributions.

Problem

The question involves an employee who resigned, and the company employing him paid out accrued vacation time along with his final wages. The employee had chosen to have 15% of his wages withheld for his 401(k) during his time of employment, and the company withheld that amount from the accrued vacation payout. The employee informed the company they were not allowed to deduct a 401(k) withholding from his vacation payout. The company needs to know if they were correct in their actions or if the employee’s statement is correct.

Solution

If the employee benefits in question were accrued prior to the employee’s separation date, and provided the company’s plan allows it, you may deduct a 401(k) contribution from the vacation payment. There are plans that clearly define only “current” employees as eligible to participate in the 401(k), and if a deduction were made from a resigned employee’s vacation payout it could be considered a violation of the plan. When a plan does not state there is a “current” employee limitation, it is permissible for the company to withhold a 401(k) contribution from the vacation payout.

It’s important to know there is no restriction against the employee changing the 401(k) contribution amount to zero, prior to tendering his resignation. It may be in the best interest of the company to remind employees who are separating from the company that the final payment, including an accrued vacation payout, may include a withholding contribution to their 401(k) plan. Benefits provided to an employee only after separation, such as a severance package, may not include a contribution to a 401(k) plan.

Understanding your 401(k) plan, and what it allows, provides for a smooth transition when an employee resigns.

Should you need further information, please feel free to contact VenSure’s Director of Human Resources and Employee Benefits, Kris Hansberger, at kris.hansberger@vensure.com.

ACA Benefit Plan Offering Effective 1-1-15

Affordable Care Act Benefit Plan Offering

We are happy to announce our Patient Protection and Affordable Care Act (ACA) compliance services effective January 1, 2015.

The ACA appears to be here to stay and for large employers, the ACA requires you to provide minimum essential health benefits which provide minimum value at a premium that is affordable, to at least 70% of your full-time employees (95% in 2016). Our goal is to help you make informed decisions about ACA compliance and minimize the impact on your company’s bottom line. For those of you who are considered large employers, or will likely be considered such at some point in 2015, we will be contacting you before the end of September,
to discuss our services, answer your questions and schedule a meeting, as needed, to present our solutions. If you would prefer for us to communicate with your insurance agent, we are happy to do so. Please have him/her contact us as soon as possible.

In this first communication, we want to let you know that we have selected a benefit plan option through Essential StaffCARE (“ESC”). We have been using ESC for many years now and they are uniquely qualified and well positioned to provide ACA compliant benefit plans to all of our clients. ESC has designed two benefit plans which will minimize or avoid the penalties imposed by the ACA. Here is a brief look at these plans and the compliance elements they satisfy.

The Minimum Essential Coverage Plan (“MEC”) will require no employer contribution because the premium is paid directly by your employees who elect this coverage. By simply offering the MEC plan, you will not be liable for the “A” penalty, which is assessed monthly at the rate of $166.66 per full-time employee less the first 80 (reducing to 30 in 2016). Employees who purchase this coverage satisfy the individual mandate of having minimum coverage, and will therefore avoid the individual penalties imposed by the IRS.

The Minimum Value Plan (“MV”), is referred to as a “bronze” level benefit plan, and must be “affordable” to all full-time employees in order to avoid the “B” penalty, which is assessed monthly at the rate of $250.00 per month per employee who purchases coverage from the government exchange and receives a subsidy. One definition of affordability is that the employee premium may not exceed 9.5% of the employee’s W-2 income.

We will be sending you the premium rates for each of these plans in the near future. We have done extensive research, shopped the marketplace and explored many solutions finding the ESC benefit plans to be the most comprehensive and affordable option. However, ACA compliance is not a one-size-fits-all and therefore, we have other solutions available.

In addition to the benefit plans, we will provide a compliance tracking software system that will measure, monitor, analyze, alert and report to help you achieve your desired level of compliance. Below are a few things you can expect from the tracking solution:

  • Measure employee count and determine large employer status.
  • Monitor employee status to identify full-time employees to whom coverage must be offered.
  • Analyze compliance level and cost of offering benefits verses paying penalties.
  • Alert you when employees become eligible.
  • Report on current and future status of employee population allowing you to evaluate and adjust compliance strategy; and generate annual IRS reports.

We look forward to providing you with solutions which you can rely on as you make important decisions related to ACA compliance. If you have any questions or concerns that need addressed prior to us contacting you later in the month, please reach out to either Kris Hansberger, Director of Employee Benefits or Ryan Scott, V.P. of Sales at 480-993-2650.

ACTION REQUIRED: ACA Mandate Opt-Out

Dear Valued Clients,

Beginning October 1, 2013, the Affordable Care Act(ACA) requires employers subject to the Fair Labor Standards Act (FLSA) to provide a notice to current and new employees regarding health plan coverage options available through State/Federal Insurance Marketplaces, aka Exchanges. We have identified you as an employer subject to FSLA, and therefore, you must provide a notice to all of your active employees by October 1, 2013. New employees hired after September 13, 2013 must be provided a notice within 14 days of their start date.

Employers must provide the notice to each employee, regardless of whether:

  • you offer health insurance,
  • the employee is enrolled in a health plan OR
  • the employee works part-time or full-time.

Vensure is pleased to offer this compliance service by mailing these required notices directly to your employees. Our cost for postage and handling of the initial notice is $1.00 per active employee. New hire notices will be provided as part of our normal service offering at no additional cost. We will invoice you for the one-time cost with your first payroll in October.

In order for us to help you comply, please complete the Affordable Care Act (ACA) Employer Coverage Notification Mandate form to either opt-out of the service and manage the process yourself, or provide us with the necessary information to prepare, print and mail the notices. By opting out, you release Vensure of current and future liability as it pertains to your compliance obligations under the ACA’s employee notification mandate. The opt out form will need to be completed and returned to benefits@vensure.com or faxed to 480.993.2653, Attention: Kris Hansberger, no later than Thursday, September 12th.

In addition to this correspondence, it is our goal to personally contact you to answer any questions you may have about what is required. However, if you would like to call us first, please contact your Client Relations Manager, Ryan Scott or Kris Hansberger. Please do not hesitate to call if you have questions, and do not delay completing and submitting the Affordable Care Act (ACA) Employer Coverage Notification Mandate form.

Sincerely,
Vensure Employer Services

ACA Employer Mandate Delay

Dear Valued Clients,

Last week, the US Treasury Department announced that it will delay the enforcement of the mandatory employer and insurer reporting requirements under the Affordable Care Act (ACA) for one year. Employers now have until 2015 to comply with the health care reform law. The Treasury is referring to this delay as the “2014 Transition Period,” where they will do real-world testing of reporting systems in 2014 that will contribute to a smoother transition to full implementation in 2015.

According to the announcement, the government health exchange for individual coverage will still open on schedule this October 1st, and the corresponding premium subsidies will be available to help pay for individual plan premiums in 2014.

The White House says this decision is the result of “listening to businesses about the health care law.” American businesses have already incurred tremendous expense and lost opportunity costs having to deal with a law that the politicians didn’t read or understand themselves when they so carelessly passed it in the first place. The fact that they are delaying implementation at this late stage of the game and are “cutting red tape, simplifying the reporting process and giving businesses more time to comply,” is an indictment of their incompetence.

Within the next week, the Administration will publish formal guidance describing this transition. Look for more information from Vensure about the ACA in the coming weeks.

The Patient Protection and Affordable Care Act and Its Employer Shared Responsibility Mandate

The employer shared responsibility mandate, often referred to as pay-or-play, of the Patient Protection and Affordable Care Act (PPACA or ACA), otherwise known as Obama Care, will take effect on January 1, 2014. While various provisions of the ACA have already been implemented over the past two years, the key element requiring employers to “share the responsibility” are activated at the end of 2013. The ACA is complicated, unclear, ill-defined and costly. Despite the empty promises of our government servants that the new law will lower the cost of healthcare, costs have already risen and they will continue to rise into the near future. Insurance premiums are increasing as a result of the coverage mandates and industry taxes which the ACA places on medical providers, device/ equipment manufactures and insurance companies. The increased costs will be paid for by businesses, individuals, consumers and taxpayers. If you happen to bear one of these monikers, you’ll want to pay attention as the law unfolds.

Is Your Company a Qualified Large Employer (QLE) and Required to Provide an ACA?

The first thing you need to determine is whether or not your company meets the definition of a qualified large employer (QLE) and therefore required to provide an ACA compliant group health insurance plan to your employees. An employee is a worker who is employed by you under the common-law test. This means that VenSure is not the employer, nor does your relationship with VenSure effect your situation. A QLE is one who employed at least 50 full-time (FT) employees on business days during the preceding calendar year. A full-time employee is anyone who is employed, on average, at least 30 hours per week. Additionally, part-time and seasonal employees must be counted to determine the number of full-time equivalents (FTE). For example, three part-time employees working an average of 10 hours per week, equals one FTE. The sum of all FT’s and FTE’s determines whether or not you are a QLE. The ACA does not specify how you must determine your FTE count but it does offer a safe harbor method which, if followed, will exempt you from penalties associated with miscalculating. This “safe harbor” method involves a look-back measurement period of up to 10 months.

Don’t forget to include the employees of commonly controlled companies in your analysis, as those employees are also included in the calculation. For assistance processing your calculation, please contact Kris Hansberger, Benefits Manager.

If you are a QLE, then the shared responsibility mandate requires you to offer a minimum essential coverage (MEC) health plan that is affordable. If you are not a QLE, then you are exempt from the mandate and the non-compliance penalties. If you think you might become a QLE in the near future, you’ll want to continue reading.

As a QLE, you must either provide an MEC or pay the no coverage assessable penalty. If you purchase a health plan from a licensed insurance company, they will offer you several MEC plan options. As far as it being affordable, well, that is where the rubber meets the road. The IRS defines “affordable” as generally meaning that the employee portion of the employee-only premium for the employer’s lowest cost MEC compliant plan cannot exceed 9.5% of the employee’s household income.

So, you might be asking, how do I know what my employee’s household income is? Realizing that this could be an issue, the IRS has identified a safe harbor method of using the employee’s Box 1 wages that were reported on the employee’s Form W-2. For example, if Box 1 wages were $28,500, then the maximum amount payable by the employee for his/her employee only coverage is $225.63 per month. ($28,500 x 9.5%) / 12 = $225.63

Penalties a QLE Could Incur

Beginning in 2014, there are two assessable penalties (a.k.a. taxes) which a QLE could incur under the shared responsibility mandate. The first penalty is for failing to offer employees the opportunity to enroll in an employer sponsored MEC. For any month in which you fail to provide your full-time employees (and their dependents) the opportunity to enroll in an employer sponsored MEC plan for that month; and at least one full-time employee has been certified to receive a premium tax credit or cost sharing reduction from having applied for coverage via an exchange plan, you will be charged a per employee penalty. The penalty will be charged for each month that the above conditions apply. The annual penalty is $2,000 for every full-time employee after 30. In other words, if you have 65 full-time employees, on average, for the entire year, you are responsible for paying the penalty on 35 employees. If you fail to comply with this part of the mandate for 5 months of the year, you would pay $29,166.66 ($2,000 / 12 * 5 * 35).

The second assessable penalty is for failing to provide an MEC that meets the minimum value requirement or is unaffordable for some employees. This penalty is only paid for those full-time employees who have been certified as receiving an applicable premium tax credit or cost-sharing reduction. This penalty amount is $3,000 per year per employee, or $250 per month. This penalty cannot exceed the amount of the first assessable penalty for failing to offer coverage to your full-time employees (and their dependents). Keep in mind, if your MEC meets the safe harbor test for affordability, then you are exempt from this second penalty, even if the employee receives a premium tax credit or cost-sharing reduction.

One Last Thought

The Health Insurance Tax (HIT), otherwise known as the premium tax imposed on insurance companies, poses a major challenge to the goal of reducing the cost of health insurance premiums. Insurance companies will need to raise premiums on consumers, small businesses and seniors to make up for the additional financial obligation. In addition, state Medicaid budgets will face higher costs as a result of this tax. It is estimated that nationally, the tax could raise premiums by an average of more than 2 percent in 2014. As you might have surmised, the delta between the cost of compliance and simply paying the penalties gets larger as premiums rise, especially for those employers who have lower paid workers; because the employer must make up the difference between what the employee can afford (under the rules) and the premium. Unfortunately, the PPACA imposes a significant tax on small business and the working class and has already caused premiums to rise, and does very little to improve quality or expand access.

Although we have covered the major impetus of the Employer Shared Responsibility Mandate, we have only scratched the surface. As you can imagine, there are hundreds of questions and scenarios to consider. As is always the case with new laws, the unintended consequences create more problems than the law was designed to solve.

Look for more information from VenSure about the PPACA in the coming weeks.

 

Tom Lindsay, CPCU

ConsultingExecutive

VenSure Employer Services

Answers to Your Unemployment (UI) Benefits Questions

Q&A with Sarah Skinner, Administrative Support

Sarah has worked for VenSure Employer Services for 4 years. She processes on average 20 claims a day. In addition to processing VenSure’s unemployment claims, Sarah is one of our amazing payroll techs. In this interview, Sarah talks about VenSure‚Äôs unemployment claim process and what you can expect when an employee files a UI claim.

What should clients expect when an employee is filing an UI claim?

It will vary by state. If the state is an electronic filing state, the UI claim is automatically sent to Equifax; therefore, the employee files an electronic version of the claim, then Equifax will email me if there is missing information they need to get back to the state. Not all states are electronic filing, but it seems like they are all moving in that direction. Some states, like New Jersey, send both paper and electronic filings.

Who is Equifax?

Equifax is the third party administrator that we use to manage our unemployment claims. I act as the liaison between our clients and Equifax. So, we have the benefit of getting information to the state quickly as well as access to the ins and outs with all of the different states.

Why is my employee filing for unemployment?

An employee, regardless of the situation, can file for unemployment at any time. However, this doesn’t mean the employee will be awarded benefits, but we do need to respond to all claims because if we don’t, the state is automatically going to go with whatever the employee stated on the claim form. The state checks with every
employer that the employee has worked for in the last two years, so it is possible to receive a claim on an employee that has worked for you at any time in the past 2 years.

What if the employee is still working?

If the employee had a reduction in hours then they can claim unemployment for the difference. Is there information that is often missing for claims that you receive?
The biggest issue is with the section “Detailed Reason for Separation.” Most of the time, the state is going to come back asking for those details. The state wants information such as the names of supervisors that let the employee go, any write ups, and any warnings. For example, if you terminate an employee due to attendance issues, the state will want to see records of the employee being written up. It is only in the employer’s best interest to provide as much information as possible to the state.

What if our client receives a notice of an appeal?

An appeal is sent to the client when the employee has received what is called an “unfavorable decision,” meaning the state has awarded the claimant UI benefits. At that time, the client has an option to “appeal” the decision. The appeals representative from Equifax contacts the client to see if they would like to go that route. If so, the representative submits the appeal.There are exceptions to this rule in the states of NC, SC, and MO.

If a client gets a notice of a hearing?

The hearing representative from Equifax will prepare clients on what they should be prepared for. A client will typically not get an appeal or hearing notice out of the blue. Most of the time, I have been in contact with clients prior to these notices, and the hearings usually take place over the phone.

Does VenSure or Equifax participate in the appeal or the hearing?

We do not participate in hearings or the appeals process as we do not have working knowledge of the employees; however, either myself or one of our representatives are more than happy to help you get prepared. We are here to provide as much information as needed in order for you to feel comfortable during this process.

Closing thoughts?

I just want our clients to know that I am always happy to answer questions and will do whatever I can to make the processes as painless as possible.

 

Sarah Skinner

2013 FMLA Federal All-In-One Poster Change

Federal Wage and Labor Law Institute: Poster Change Notice

All-In-One Poster:
Federal English & Federal Spanish

Specific individual state poster that has changed:
Family Medical Leave Act

What is the change?
The Family Medical Leave Act notice has been revised to reflect the changes caused by a recently approved Rule. The definition of “Veteran” has been revised to include both those who serve and those discharged in the past 5 years. Previously it was only those who served. The explicit definition of “Serious Injury or Illness” was removed as well, replaced by a notice that there are differences between the definition of “Serious Injury or Illness” for a service member or veteran, and “Serious Health Condition” under the FMLA.

This is a substantive change. We will ship a new Federal All-In-One poster to any location covered under a current AutoComply subscription. Due to the large number of businesses affected by this change, we will begin shipping the new Federal All-In-One poster by February 18, 2013. If your AutoComply subscription covers Spanish or Bilingual posters, we will be sending an updated Spanish Federal All-In-One poster as well.

Date of the poster change:
February 2013

Please note:
Labor posters are automatically updated and mailed to you through our 3rd party vendor. Should you not receive your updated poster within 30 days of the effective date, please contact your Client Relations Manager for assistance at 480-993-2650.

Sincerely,
Vensure Employer Services

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