Category Archives: Employee Benefits

May 2017 Updates

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A few updates of interest:

  1. This coming Tuesday, May 16th, my colleague Wendra Johnson, SPHR and I are hosting the CBIZ webinar event, The Business Case for Understanding Benefits and HR Trends. Start time is 2 PM EDT. We’ll survey recent developments, chart where we might be heading next, and share strategies to consider. We’re especially focused on cutting through the ACA & AHCA noise and focusing on what matters to large group employer health plans, both fully insured and self-funded.
  2. In the meantime, CBIZ HRB 128 provides the latest updates on the AHCA bill.
  3. Historically, we’ve posted brief introductions to my monthly Employee Benefit News (EBN) essays to this blog site. EBN archives these essays one week after publishing. In order to allow my clients & friends indefinite access to these essays, EBN kindly now permits me to repost the essays to LinkedIn’s publishing platform, on my author page.

Thus, we’ve ceased providing introductions, here. The essays published to date, include:

If you’d prefer to continue receiving notifications when these essays are posted, please drop me an email.

Best regards,

Zack

You can reach me on zpace@cbiz.com or via Twitter.

Chart a course around the approaching voluntary product thunderstorm

By:          Zack Pace, SVP, Benefits Consulting

Did you glance back over your shoulder this summer at the proposed regulations the federal government issued regarding voluntary supplemental medical products (e.g., hospital indemnity, critical illness, etc.)? These regulations, as proposed, will greatly alter the voluntary product landscape. In my latest essay for Employee Benefit News, How to avoid the approaching voluntary product thunderstorm, I explore:

  • Why the regulators are concerned that individuals will confuse these products with major medical coverage
  • How the regulators’ train of thought could extend to other voluntary products
  • What employers that sponsor voluntary supplemental medical products should do now to assess and eliminate its penalty risks

I also share a sailing story that you might enjoy.

Here’s the full article – How to avoid the approaching voluntary product thunderstorm. You may need to register with Employee Benefit News to view it.

The proposed regulations are available here, CBIZ’s regulatory affairs bulletin is here, and a helpful summary of the regulations published by Alden Bianchi of the firm Mintz Levin is located here.

You can reach me on zpace@cbiz.com or via Twitter. My collection of LinkedIn essays is located here, and my Employee Benefit News articles are available here.

A simple way to find 4% savings in 2017 group health renewals

By:          Zack Pace, SVP, Benefits Consulting

Do you remember last December when the Cadillac Tax was delayed until 2020? Do you remember reading that the same law also placed a one-year moratorium on the annual fee the Affordable Care Act (ACA) imposes on most health insurers?  Because this moratorium was for 2017, I filed this latter news in the too good to be true long-term bin, announced the Cadillac Tax delay, and turned my focus to which marinade to use for our chargrilled 2015 Christmas turkey.

Meanwhile, seven months later, this moratorium is quietly set to go live this January. Short of an act of Congress, it will. What this means, on paper, is that most employers sponsoring fully insured medical, dental and vision plans will see January 2017 renewals 3% to 4% lower than what they would have been, otherwise.

In my latest essay for Employee Benefit News, Reduce health plan premiums by leveraging the 2017 ACA health insurer fee moratorium, I explore:

  • The impact of this fee moratorium
  • The ways employers can leverage the moratorium to their financial advantage
  • What might happen when the moratorium ends in 2018

The short version is that as fully insured medical, dental, and vision renewals cross my desk, we’ll be ensuring that this 4% premium reduction becomes a windfall for our clients, not extra margin for the insurers.

Here’s the full article – Reduce health plan premiums by leveraging the 2017 ACA health insurer fee moratorium. You may need to register with Employee Benefit News to view it.

You can reach me on zpace@cbiz.com or via Twitter. My collection of LinkedIn essays is located here, and my Employee Benefit News articles are available here.

10 Ways to Improve Employee Benefit Design

By:          Zack Pace, SVP, Benefits Consulting

Congratulations, after six long years, our epic journey together through the Affordable Care Act employer requirements is just about complete. Aside from the Cadillac Tax, which is delayed until at least 2020, and the seemingly stalled out nondiscrimination regulations, all of the major deadlines have passed.

In my latest essay for Employee Benefit News, I recommend fine-tuning areas of our benefits programs that were placed on the back-burner during the height of the ACA deadlines – 10 ways to fine-tune benefit design and improve ROI. I also share a quick story set in Charm City’s Inner Harbor about the now obsolete ACA knowledge I’ve accumulated. You may need to register with Employee Benefit News to view the entire article.

I hope you find these 10 questions beneficial – 10 ways to fine-tune benefit design and improve ROI. If you would like me to provide a deeper dive into any of the 10 mentioned topics, please let me know.

You can reach me on zpace@cbiz.com or via Twitter. My collection of LinkedIn essays is located here, and my Employee Benefit News articles are available here.

Making sense of the Mid-Atlantic group health marketplace

By: Zack Pace, SVP, Benefits Consulting

Map of DC Graphic 2

Geographically and economically, the greater Baltimore / District of Columbia / Northern Virginia region operates as a single, integrated region. However, politically, these three sub-regions might as well be in different time zones. As a result, policies and procedures dramatically differ throughout the greater region.

Specific to group health plans, when a Mid-Atlantic client calls with a question, we must run through a quick mental check-list before answering. For example, is the employer:

  1. Based in DC, Maryland, or Virginia?
  2. Subject to ACA Shared Responsibility?
  3. Subject to ACA Fair Health Insurance Premium Rules?
  4. Fully insured? Self-funded?

Fortunately, since the advent of the PACE Act last October, much of the complexity regarding who is subject to the Fair Health Insurance Premium rules (AKA age-banded rates) has ebbed. Thus, for employers with more than 50 full-time employees + full-time equivalents, there are now more similarities and differences within the three sub-regions. However, in the small group market, stark differences remain. Here is the chart we use to keep it all straight. I thought you might find this summary helpful.

Below is a chart preview. For a PDF file with clickable links to the resources mentioned, please click here.

health exchange graphic_making sense of the mid atlantic group health marketplace

You can reach me on zpace@cbiz.com or via Twitter. My collection of LinkedIn essays is located here, and my Employee Benefit News articles are available here.

Exploring the irregularities and opportunities in fully insured health plan pricing

By:          Zack Pace, SVP, Benefits Consulting

Over the last nineteen years, I’ve learned that when it comes to fully insured health plan pricing, in order to reach the best financial outcome, one often has to depart from the realm of logic, reason and actuarial principles.

In my latest Employee Benefit News essay, Why a logical approach to health plan design can be financially disastrous, I share:

  1. Why I initially didn’t understand this truth
  2. Why pricing irregularities and implicit financial incentives continue to be commonplace in the fully insured market
  3. The long term financial danger of ignoring pricing anomalies
  4. A recent case study

I hope you find this memoir and case study beneficial. The full essay is available here: Why a logical approach to health plan design can be financially disastrous.

What other benefit topics, trends, and challenges are on your mind? Please let me know, and I’ll write about them in future Employee Benefit News essays.

You can reach me on zpace@cbiz.com or via Twitter. My collection of LinkedIn essays is located here, and my Employee Benefit News articles are available here.

CBIZ Webinar – FLSA Overtime Regulatory Changes

By:          Zack Pace, SVP, Benefits Consulting

Last week, Stephen Miller of SHRM interviewed me regarding the probable impact of the new FLSA overtime regulations on employee benefit eligibility terms. In short, I don’t foresee a major impact. The resulting article is available, here: Overtime Pay Changes Will Affect Employee Benefits, Too.

On the other hand, as many of you have already fervently explained to me, the impact to cash compensation structures could be sweeping. Fortunately, my colleagues in CBIZ Compensation, Ed Rataj and Amber Duncan, have closely followed these proposed and final regulations since the beginning. Along with Karen McLeese, JD, they will share what they’ve learned and what to do next in upcoming webinars on:

  • May 25th at 11:30 AM EDT
  • June 14th at 11:30 AM EDT

Which date and time is more convenient for you?

Agenda for the webinar:

  • Overview the new regulations
  • Review the ramifications, potential unintended consequences, and long-term implications
  • Discuss creative implementation strategies
  • Review illustrative examples

The full invitation is available here: https://attendee.gotowebinar.com/rt/5803185362686746370

I hope you can join us.

You can reach me on zpace@cbiz.com or via Twitter.

Do your employees know that your health plan is self-funded?

By:          Zack Pace, SVP, Benefits Consulting

I’m always enchanted when someone shows me the obvious, hiding in plain sight. For example, I’ll never forget when my college professor shared that E.T. the Extra-Terrestrial was Steven Spielberg’s way of telling the Wizard of Oz story from the eyes of the lion, scarecrow and tin man. He reinforced this point by displaying the famous image of Elliott and E.T. flying their bike across the twilight sky. He asked, “Does this image remind of you anything?”

“Yes, it does. Good grief, how could I have missed that?”

My friends who work for large companies have a similar reaction when I tell them that their health plans don’t have health insurers, only health plan administrators. The knowledge that their employers are paying the claims of the plans dramatically changes their entire outlook on their health benefits and total compensation.

In my recent essay for Employee Benefit News, I make the case that employers sponsoring self-funded health plan should tell their employees that the health plan is self-funded: Why plan sponsors should be upfront with workers about self-funding.

I hope you enjoy it. The full article is available here: Why plan sponsors should be upfront with workers about self-funding.

You can reach me on zpace@cbiz.com or via Twitter. My collection of LinkedIn essays is located here, and my Employee Benefit News articles are available here.

Rising group health care plan costs among small employers: A comparison.

By: Neil Model

It doesn’t come as a surprise that group health care plan costs are expected to rise in the coming years. The question becomes how much the costs will rise and for whom. While larger companies may be looking at a modest rise in costs, increases for small size employers could be quite significant.

I came across an article last week, Group health care plan costs expected to rise modestly.  And while it’s true that costs are expected to rise for all employers across the board, I feel it’s important to mention the continued double digit increases many small employers are still facing.

The factors determining business size vary according to number of employees and an average of annual receipts. Often, business size classification is also determined by industry as well.  In my experience, most employers with less than 100 employees have already made many of the moves to mitigate cost increases in the past. It’s also important to take a look at resources available in implementing cost saving healthcare trends among both large and small employers.

Where large employers have the luxury of centers of excellence and/or near-site health centers, it is often not feasible for many small-sized employers to offer these same benefits. Telemedicine and additional wellness initiatives may indeed be available for small businesses, but these employers are limited in the ways they can actually effect cost.

The primary method for effecting cost in small business group health plans is actually by shifting expenses to employees either by plan design or contributions. Many fail to overlook this unfortunate reality for small businesses.

The above article highlights the options available to larger employers, therefore giving a false impression to most of the smaller US employers. I think it’s important to remember these differentiations when examining the effects of rising group health plan costs. Size of company and resources available will affect every employer differently based on many of the factors mentioned here.

Neil Model is the President of CBIZ Model Consulting, and  Vice President of Development for CBIZ Benefits & Insurance Services, Inc. He can be reached at nmodel@CBIZmodel.com. He can also be found on Twitter.

Please join us: March 10th Pharmacy Benefit Management Seminar

By: Zack Pace, SVP, Benefits Consulting

Twelve years ago, pharmacy claims were the least of our worries. Nowadays, it’s not uncommon for an individual on a specialty medication to accrue $100,000 in annual claims. CBIZ’s National Pharmacy Practice Leader, Mike Zucarelli, PharmD, and I wrote about these emerging claim risks in our recent Employee Benefit News essay What frogs and boiling water have in common with stop-loss and prescription drugs.

On March 10th in our Columbia, Maryland office, Mike will be on-site to describe the current pharmacy cost drivers, forecast the approaching challenges, and share cost mitigation techniques.

Pharmacy Benefit Management Seminar Invitation

If our Plymouth Meeting, PA area office (just outside Philadelphia) is more convenient for you, we are hosting the same webinar there on March 9th. Sue Roberts is taking reservations for the Plymouth Meeting event: sroberts@cbiz.com.

You can reach me on zpace@cbiz.com  or via Twitter. My collection of LinkedIn essays is located here,and my Employee Benefit News articles are available here.