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Have group health plans outrun their logistical limits?

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By:          Zack Pace, SVP, Benefits Consulting

This week, I had the privilege of attending NCQA’s 2016 Quality Talks. CBIZ was a proud sponsor of this year’s event, which featured the best and brightest minds in healthcare outlining their vision of healthcare’s future. The “TED”-style talks were visionary, inspiring, and actionable. I’m excited about converting many of the ideas shared into techniques employers can use to both improve its employees’ healthcare experience and to lower plan costs.

For example, the final speaker, Reed V. Tuckson, MD, FACP, articulated the efficiency challenges telehealth is solving and shared how this technology will further revolutionize healthcare in the years to come. The examples he shared extend far beyond an individual simply video-conferencing with a physician.

However, the trouble in incorporating many of these exciting ideas into employer sponsored health plans is that we seem to have outrun our logistical limits. It reminds of Batu’s 1241 military campaign across the Hungarian plains. Do you remember that history lesson? In 1236, Genghis Khan’s grandson, Batu, led the Mongolian army on a westward campaign. The army encountered little resistance as it swept across the vast Eurasian steppes and into Eastern Europe. But, as he came across the Hungarian plain, Batu’s horse archer cavalry encountered a new kind of resistance – fortified masonry castles.1

Perhaps, nowadays, the rapid advancement of healthcare technology and innovation is like a benevolent, lightening western campaign and ERISA, the Affordable Care Act (ACA), and existing IT limitations are the fortified masonry castles (no, I’m not arguing that Batu was benevolent).

Coincidentally, my latest essay for Employee Benefit News, Why employers need to verify compliance with new benefits, shared a story of our recent encounter with one of these fortified masonry castles. In short, an employer seeking to leverage telehealth technology to improve its employees’ mental health almost ran right into the massive ACA 4980D penalties, and, further, almost disqualified its employees’ Health Savings Accounts. Luckily, we called off the advancement just short of these fortified castles.

Here’s the full article – Why employers need to verify compliance with new benefits. 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.

  1. If you’re interested in studying Batu’s western campaign, an excellent source is the audio course The Barbarian Empires of the Steppes via the Great Courses. Professor Kenneth W. Harl, Ph.D. is superb.

Exploring the unintended consequences of spousal exclusion policies

By:          Zack Pace, SVP, Benefits Consulting

As we’ve discussed over the years, when an employer sponsored health plan features an unusually high amount of spousal enrollment, it’s usually a symptom of an imbalance in the employee contribution rates. It usually means that the employer is charging less for spousal coverage than what an average employer charges for employee only coverage. If so, an employer can easily bring balance by adding additional enrollment tiers, if necessary, and increasing the cost of employee + spouse and full family coverage. Many of you have seen firsthand how this simple, innocuous change gently leads spouses onto their own employers’ plan.

Meanwhile, in lieu of using this simple method, more and more employers are instead adding other employer spousal exclusions to their health plan policies. Under these arrangements, employers bar spouses from joining the health plan if the spouses are eligible for coverage from their own employer. These arrangements often usher in confusion and feature the hassle and risk of trying to enforce this policy via employee affidavits.

Last July, in one of my first essays for Employee Benefit News, I described the challenges of these spousal exclusions and made the case for the alternative method: The alternative to health plan spousal exclusions.

Nevertheless, one year later, the popularity of other employer spousal exclusions continues to build. Thus, I decided to share the real world story of a spouse that decided to not transition to full-time employment precisely because of her husband’s employer’s spousal exclusion policy. I believe her story is worth our careful consideration. You can read about her story here: The unintended consequences of spousal exclusions.

You may need to register with Employee Benefit News to view the entire article.

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.

Have You Considered Introducing Audiobooks as a New Employee Benefit?

By:          Zack Pace, SVP, Benefits Consulting

Last year, inspired by The Power of Habit by Charles Duhigg, I isolated my poor business habits, replaced them with productive activities and made several exciting discoveries along the way. One was the replacement of dead driving time with college-level lectures from The Great Courses. I shared these discoveries in Business Habits, Time Management, & Label Makers.

Recently, I read that Twilio buys a Kindle for each of their employees and funds $30 a month for book purchases. I then pondered if Twilio’s initiative will increase employee productivity & wellbeing for the average employer. In my latest essay for Employee Benefit News, I make the case that it should: The value of audiobooks as a new employee benefit.

I am interested in your thoughts on this idea.

Speaking of Charles Duhigg, I just finished reading his latest – Smarter Faster Better. It summarizes the latest research and case studies in the ongoing quest to improve the productivity of business teams. I highly recommend this book.

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.

How small businesses can use ‘big data’ (Part 1)

“Big data” is changing business, from the software programs businesses use, to how data is gathered. Analytics, prediction, and visualization all aid in helping business leaders make key decisions for their companies.

In a two part series for BizJournals.com, Jim Brummitt, of CBIZ MHM, explains the ins and outs of ‘big data’.

Here’s an excerpt from part 1:

Most businesses rely on a variety of software programs to manage different aspects of the operation — each generating its own data set. Big data describes the increasing volume and detail of information captured by a business’ legacy systems as well as social and multi-media information. In this sense, big data describes the collection and analysis of information to make better management decisions.

The full article can be found here.

Jim Brummitt can be reached at 301.951.3636 or jbrummitt@cbiz.com, and on LinkedIn.

Summary of the New Maryland Stop Loss Law

Given the impact and complexity of Maryland House Bill 552, we are posting our compliance practice’s full summary of this new law, below. For organizations based in Maryland that are actively considering moving to a self-funded contract, including “level-funding” contracts, understanding the impact of this bill is critical:

Health Insurance – Medical Stop-Loss Insurance – Small Employers (HB 552)

Effective date: Applies to all medical stop–loss insurance policies and contracts issued, delivered, or renewed in the State on or after June 1, 2015

A medical stop–loss insurer may not issue, renew, deliver, or offer a policy or contract of medical stop–loss insurance, if the policy or contract has a specific attachment point of less than $22,500 or an aggregate attachment point of less than 120% of expected claims.

A medical insurer who issues a stop-loss policy or contract to a small employer shall:

  • Guarantee the rate for at least 12 months without adjustment, unless there is a change in the benefits provided under the small employer’s health benefit plan; change in the ownership or control of the small employer; or a change in the number of covered lives by a significant percentage resulting from an acquisition or divestiture;
  • Pay stop-loss claims incurred during the policy or contract period and submitted within 12 months after the expiration date of the policy or contract; and
  • Disclose to the small employer prior to entering into a policy or contract for medical stop-loss insurance the total costs of the policy or contract, the dates the policy or contract takes effect and terminates, the provisions for renewal, the aggregate attachment points, and any limitations on coverage.

A medical stop-loss insurer may not:

  • Impose higher cost sharing for a specific individual within a small employer’s health benefit plan than is required for other individuals in the plan;
  • Decrease or remove stop-loss coverage for a specific individual within the plan; or
  • Exclude any employee or dependent from a policy or contract on the basis of an actual or expected health status-related factor or condition.

Policies issued on or before May 31, 2015, including the renewal of such policies after that date are grandfathered as long as the specific attachment point is not less than $10,000 and aggregate attachment point is not less than 115% of expected claims.

Small employer means an employer that, during the preceding calendar year, employed an average of not more than 50 employees if the preceding calendar year ended on or before January 1, 2016 or 100 employees if the preceding calendar year ended after January 1, 2016.

This Act shall remain in effect until June 30, 2018 and with no further action required by the General Assembly, this Act shall be abrogated and of no further force and effect.

If you have questions about this new development, please leave a comment below or reach me on zpace@cbiz.com or via Twitter. My collection of LinkedIn essays is located here.

2 from CBIZ to Present at the GWSCPA Employee Benefit Plan Conference

GWSCPA EBP Conference 04242015

 

The 2nd annual Employee Benefit Plan Conference, hosted by the Greater Washington Society of CPA’s (GWSCPA) is set to take place on May 5th at the Grand Hyatt – Washington in D.C.

Margaret Blaine, CBIZ MHM; and Patricia Cage, CBIZ Benefits & Insurance will present “Qualified Retirement Plan Operational Deficiencies That Threaten Fiduciary Compliance”, one of many timely topics to be presented at the conference.

The Employee Benefit Plan Conference is intended for both plan auditors and fiduciaries, covering topics relevant to your EBP audits. Topics will cover auditing of investments and participant data/contributions. The presentations will also provide an overview of common plan failures, correction programs, and fiduciary compliance, as well as new auditing and accounting standards.

For more information, to register for the conference, and to view the complete agenda, please visit the GWSCPA’s website.

Behind the Numbers: A photo contest for CFOs

2015CFOPhotoContest

 

Calling all CFOs: Do you have a fun interest or hobby? We want to hear about it!
Enter the CBIZ “Behind the Numbers” photo contest for a chance to win great prizes and recognition.

The winner receives a CFO gift basket including:

  • A brand new Apple iPad Air
  • Apple iPod
  • Portable speaker
  • Contest plaque
  • & other great items

The top ten finalists will also receive a gift basket featuring:

  • An Apple iPod
  • Mobile speaker
  • Office plaque
  • & more

Entering is easy! Head on over to the CBIZ Facebook page to submit your photo of what’s really behind your business day.

The deadline to enter is April 6, 2015. Please feel free to share this post with your CFO colleagues, friends and family.

We’re looking forward to your photos!

 

The Wizard of Oz Revelation of the Benefits World

By Zack Pace, SVP, Benefits Consulting

I’m always enchanted when someone shows me that the obvious is hiding in plain sight. For example, I’ll never forget when my college professor shared that E.T. the Extra-Terrestrial was 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 ski. He asked, “Does this image remind of you anything?”

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

My friends that work for large companies have a similar reaction when I tell them that their health plan doesn’t have a health insurer, only a health plan administrator. The knowledge that their employer is paying the claims of the plan dramatically changes their entire outlook on the benefit and its direct impact on their Total Compensation.

In response to LinkedIn’s call for essays predicting the Big Ideas of 2015, I submitted Stop Calling Health Plan Administrators, Health Insurers. After reading this essay, a friend wrote me this e-mail:

“When I tell people at work that [our employer] is paying all our claims with cash, people look at me like some wild conspiracy theorist. But the evidence is all there – they want us to be cost-conscious: the health fund incentives, the biometric screenings, the surveys. It’s just odd that [the plan being self-funded] is not discussed openly. Both sides, it would seem, would benefit from information sharing here.”

And, our Operations Director, Sandi Guy, commented:

“This is such a good point! I am always surprised when the “average worker” does not know if their plan is self funded or the impact that has. When I share with them why it matters, you see the lights come on.”

I realize that this partnership strategy isn’t advisable for every employer, especially those with high turnover. Still, I’m surprised that it’s not more commonplace in 2015.

The full essay is available here: Stop Calling Health Plan Administrators, Health Insurers.

You can reach me on zpace@cbiz.com. My collection of LinkedIn essays is located here. Please follow me on LinkedIn & Twitter.

Annual Business Update Announced!

We are pleased to announce our Annual Business Update, which will be held on Wednesday, January 14, 2015, in Bethesda, MD.

A buffet breakfast and networking will begin at 7:30 a.m., followed by a packed program from 8:15 a.m. to 11:30 a.m. Session topics will highlight key issues facing business and nonprofit organizations in 2015.

This year’s Update will be held at The Bethesda Blues and Jazz Supper Club, located just minutes from the Metro and offering ample, convenient public parking.

Full program details, including a complete schedule of topics, will be announced soon. In the meantime, we hope you’ll save the date, tell a friend or colleague, and subscribe to our email updates (on the right hand side of the screen) to receive the complete program and registration details when they are announced.

Best regards and warmest wishes for a wonderful Thanksgiving holiday,

CBIZ & Mayer Hoffman McCann P.C.
Bethesda & Columbia Offices

Affordable Care Act December Double-checks

By Zack Pace, SVP, Benefits Consulting

This week, CBIZ published 6 ACA Compliance Items to Double-check this December on our national website. In this essay, I discussed six items that continue to create confusion:

  1. For employers with 50 – 99 employees, Employer Shared Responsibility isn’t automatically delayed until 2016
  2. Control group rules apply
  3. Under the ACA, there’s no such thing as an Intern or a Temp
  4. Proper administration of Independent Contractors classifications remain important
  5. The only way to eliminate the Shared Responsibility penalty risk is to offer adequate and affordable coverage to 100% of all full-time employees
  6. ACA related policy changes should be incorporated into plan documents, summary plan descriptions (SPDs), insurance contracts, and Section 125 plans

The full essay is available here.

Do you have any ACA December homework to complete? If so, as you have questions, we’re here to help.

You can reach me on zpace@cbiz.com. Please follow me on LinkedIn & Twitter.