30 February 2016 Employee Benefit News ebn.benefitnews.com

CONGRATULATIONS ON MAKING IT

through one of the most legally and administratively challenging years in employee benefits history. But, as you know, employee benefits never sleep. Here is the 2016 ABCs of employee benefits — what I call the annual “just tell me what I need to do” list.

ACA reporting aftermath. Ensure you keep all the documentation sup-porting the reporting decisions made (e.g., employee benefits eligibility coding, alternative reporting meth-ods, transitional relief, control group decisions, etc.) and profusely thank everyone who helped you complete this arduous task.

Benefits websites. Benefits in-formation — good, bad, and ugly — is everywhere you look. Here are sources of credible information: ebn.benefitnews.com, BenefitsLink and government ACA websites such as healthcare.gov and the DOL’s health-care reform site.

Consider self-insurance. Ac-

cording to the 2015 PwC Health and Well-being Touchstone Survey, 66% of employers with 500-1,000 employ-ees are self-insured, up from 59% in 2014. Perform a cost/benefit analysis to determine if self-funding is right for your organization. Don’t forget to cal-culate the expected ACA fees (PCO-RI and transitional reinsurance) and “cost” of performing extra reporting responsibilities.

Develop an annual compliance calendar. Given multiple employee benefit legal requirements, create an annual compliance calendar so you can keep track of what you must com-ply with and when. Major require-ments will fall in the following areas:

ERISA, ACA, COBRA, HIPAA, etc. Execute appropriate benefit

strategies. Refocus on determining strategies to control rising healthcare costs. According to the 2015 Willis Towers Watson/NBGH Best Practices in Health Care Employer Survey, the top priorities of employers’ healthcare activities over the next three years in-clude increasing focus on employee well-being, including health, finan-cial and workplace experience (96%); evaluating health and pharmacy plan design strategy (95%); and develop-ing/enhancing a workplace culture where employees are responsible for their health (94%).

Familiarize yourself with ERI-SA section 510. Lawsuits are already being filed by employees alleging that their employer reduced their hours to keep them from having health insur-ance coverage. To minimize your risk and exposure, consult counsel before taking any actions that will affect em-ployee benefits eligibility.

Growing interest in benefits technology. EBN’s second annual technology survey indicates that 38% of respondents plan to increase their spending on employee benefits tech-nology next year, with 44% having al-ready increased their spending from 2014 to 2015. Much of that spending is directed toward new employee por-tals and front-end systems to better integrate and utilize various benefits functionalities (health, retirement, voluntary benefits and more.)

Here comes HIPAA. The U.S. Department of Health and Human Services Office of Civil Rights has announced a new phase of covered entity and business associate audits for compliance with the privacy and security rules under HIPAA. If you haven’t already, ensure that your or-ganization is complying with the ap-propriate HIPAA privacy and security rules (policies and procedures, priva-cy notice, training, etc.)

Impact of Supreme Court rul-ing on same-sex marriage. The U.S.

COMMENTARY

The ABCs of employee benefitsBENEFITS MANAGEMENT

A look at 26 benefits issues you need to pay attention to in 2016

BY ED BRAY, J.D.

Employee Benefit News February 2016 31

Supreme Court ruled in Obergefell v. Hodges that the Constitution guar-antees same-sex couples the right to marry. Consult legal counsel and your health insurance carriers to discuss any legal and business decisions as a result of this ruling, including wheth-er to offer domestic partner benefits into the future.

Jury still out on private exchang-es. According to the Deloitte Center for Health Solutions 2015 Survey of U.S. Employers, 30% of respondents are interested in moving to a private exchange and early adopters feel that private exchanges make it easier to offer a defined premium approach (62%), simplify their company’s role in benefits administration (60%), and improve access to broader physician/hospital networks (57%.)

Keep the Cadillac tax in mind. According to the IFEBP 2015 Em-ployer-Sponsored Health Care: ACA’s Impact Survey, 34% of employers, up from 24.5% in 2014, have started tak-ing action to avoid triggering the Ca-dillac tax. Actions include moving to a CDHP (52.9%), reducing benefits (36.9%), and adopting wellness and preventive initiatives (28.3%). Run a financial projection to determine if your organization is expected to be impacted by the Cadillac tax. If you expect to be impacted, consider cost mitigation strategies and keep an eye out for upcoming proposed regula-tions.

Learn financial wellness. Nine-ty-three percent of employers are very or moderately likely to create or broaden their efforts on financial wellness topics in a manner that ex-tends beyond retirement decisions, according to Aon Hewitt’s 2015 Hot Topics in Retirement Survey. Such topics include basics of financial mar-kets, healthcare planning, financial planning, debt management, budget-ing, and saving for life stages. Given employee interest, look into which topic/s will provide the greatest val-ue-add and work with your retire-ment provider to lead financial well-ness meetings.

Make the business case for help. Now and over the next few years, ACA administrative requirements are go-ing to become unmanageable for one department/person to handle on their own. In fact, according to the IFEBP 2015 Employer-Sponsored Health Care: ACA’s Impact Survey, employers say their biggest challenge

isn’t cost (20.6%), but rather admin-istrative issues (56.9%). Given signif-icant penalties for noncompliance, engage help as soon as possible, es-pecially from your broker/consultant and internal departments (payroll, IT, communications).

Notify your CFO. It’s a whole new world of corporate healthcare costs. Whereas costs have historically been based on trend and experience, the cost impact of the ACA (new employ-ee eligibility, fees, etc.) and internal/external support resources (consul-tants, third-party vendors) must now be figured in. Determine your 2016 costs and discuss them with your CFO in order to avoid any surprises.

Obey state and local laws. With so much attention being paid to ACA compliance, it’s easy to lose sight of the fact that some states and cities are introducing legislation affecting em-ployee benefits, especially paid sick leave laws. Ensure that you have the means to learn and comply with such legislation.

Prepare for telehealth-mania. Seventy-four percent of employers plan to offer telehealth this year in states where it is legal, up from 48% last year, according to the National Business Group on Health’s Large Employers’ Health Plan Design Sur-vey. Given the costs associated with in-person visits and the upcoming Cadillac tax, this may be a great op-portunity for your organization to mitigate health insurance costs.

Questions galore. Given the com-plexity of the ACA, employees are confused and questions will increase. According to the IFEBP 2015 Employ-er-Sponsored Health Care: ACA’s Im-pact Survey, common questions ben-efit managers should be prepared to answer include: How will our benefits change? Is this benefits change be-cause of the ACA? How does the law affect me? Do I need to do anything (tax-related) or otherwise? What will this cost me? Why are my costs going up? Remind employees that you (and not the news, neighbors, or relatives) are in the best position to answer their questions, especially at open enroll-ment and employee benefit meetings. When talking about the ACA with em-ployees, however, make sure you are not providing legal or tax advice.

Ramp up proactive employee communication. Given the ACA in-dividual mandate and exchange op-portunities, communicate proactively

with employees in key situations that could have a negative effect on them or the organization (e.g., remind new-ly benefits-eligible employees to de-termine their exchange subsidy eligi-bility, require employees who decline benefits coverage to sign a waiver, ensure employees know if and when they are eligible for employee benefits or not, etc.).

Study the ACA. In addition to the obvious compliance reasons, the ACA’s requirements will have a sig-nificant impact on current and future benefit program costs (plan design, eligibility, fees, etc.). Thus, it’s criti-cal to learn and understand the ACA to allow you to develop appropriate short- and long-term cost control strategies.

Tackle low-hanging employee benefits compliance fruit. Between the ACA reporting requirements (W-2 cost of benefits, IRS reporting) and payment of new fees (PCORI, transitional reinsurance), the federal government’s magnifying glass over your benefits program has increased significantly, thus increasing its ex-posure to an audit. If the government arrives at your organization, they may inquire about non-ACA benefits compliance including plan documen-tation (ERISA, Section 125), HIPAA (policies and procedures, training), non-discrimination testing, wellness programs, etc.

Understand employee benefits eligibility. Ensure you truly under-stand how the employee benefits el-igibility rules work and are applying them accurately because there are three policing functions: the federal government, employees, and tax ad-visers through the ACA’s IRS report-ing process. You could be subject to significant penalties if you don’t of-fer health insurance coverage to the appropriate employees. This is espe-cially important for 2016 where the offer of benefits coverage threshold increases from 70% to 95% of full-time employees.

Visualize the light at the end of the tunnel. There’s a good chance that over the past five years you have done more heavy lifting in the employee benefits space than you have in your entire career. Between learning and implementing the ever-changing ACA, coupled with managing your pre-ACA benefit responsibilities, you should be very proud of the work you have accomplished. The good news is

that there is light at end of the tunnel in that the ACA implementation re-quirements should slow down over the next year, allowing you to focus on the strategy side of this new world of employee benefits.

Write your broker/consultant’s job description. And, speaking of this new world of employee bene-fits, task your broker/consultant with providing hands-on support in the following areas: compliance, commu-nications, analytics, administration, and strategic solutions. If they are un-able to meet your wants, needs and expectations, find a new one who will. It’s a buyer’s market.

X-amine new notices, regula-tions, instructions, etc. There was a good chance that the ACA would roar like a lion once the U.S. Supreme Court decided King v. Burwell and it certainly has. We are seeing com-pliance regulations being issued on a continuous basis with no end in sight. Ensure that you have external resources in place to alert you to any new information affecting your health insurance plan.

Year of new vendors and ser-vices. When it comes to determining benefits eligibility and completing IRS ACA reporting, new vendors have entered the market. If you decide to use a third-party vendor, perform a thorough vetting process. Key areas to cover include: determining exactly what they are going to do for your or-ganization, gaining assurance in writ-ing that they will meet key IRS com-pliance dates, learning how they will collect necessary information from all sources, and determining the accessi-bility of your dedicated support team.

Zero in on employee well-being. According to the 2015 PwC Health and Well-being Touchstone Survey, more employers (73%, up from 71% in 2014) have introduced wellness pro-grams to mitigate the impact of their major cost drivers and more CFOs are willing to listen. Eighty-seven percent of employers with wellness programs offer incentives; of those, 27% offer cash incentives of at least $100. Deter-mine what type of wellness program can positively impact your key cost drivers and then take the appropriate implementation action. ■

Contributing Editor Ed Bray is senior vice president of compliance with As-cension. He can be reached at ebray@ascensionins.com.