the 2016 abcs of employee benefits your to-do list · 4 –2017 aca irs reporting requirements •...

July 15, 2016

The 2016 ABCs of Employee Benefits

Your "To-Do" List

Ascension Benefits & Insurance Solutions

1277 Treat Blvd, Walnut Creek, CA 94597

CA License No: 0G55469

www.ascensionins.com

Ed Bray, JD, MBA

SVP, Compliance / Employee Benefits Strategy & Execution Leader

1

Disclaimer

PROPRIETARY & CONFIDENTIAL

The information provided during this presentation does not constitute legal or tax

advice. In addition, this program only provides a summary of certain complex and always evolving laws and regulations. Attendees should consult their legal counsel

and tax advisors for guidance on the application and implementation of the many federal and state laws that might impact their employee benefit plans, including

the topics discussed during this presentation.

2

What’s Happening Right Now? Hurricane “Make It Stop”


1 – 2017 Employee Benefits with January 1 renewal date

• Open Enrollment Prep (Summer / Fall 2016)

2 – Compliance with new DOL OT rules

• December 1, 2016 effective date

3 – Compliance with EEOC wellness program rules with a plan year that starts January 1

• January 1, 2017

4 – 2017 ACA IRS reporting requirements

• Don’t expect “incorrect or incomplete = ok” and reporting extensions

Recommend - Start working on these now and expect significant support from your broker

3

Introducing the 2016 ABCs of Employee Benefits


Welcome to the….

“Just tell me what I need to do, why I need to do it, when I need to do it, how I need to do it, where it needs to occur, and who is going to help me in regards to reducing benefit costs, keeping me and my executives out of jail, effectively communicating with my employees, helping me

better understand this crazy new world of employee benefits, and getting work off my desks in the most time-efficient way possible

because I already have 1,000,001 things to do and quite frankly don’t have time for anything else”…

2016 ABCs of Employee Benefits

4

Learn the New World of Employee Benefits

PROPRIETARY & CONFIDENTIAL 5

Study the ACA


In addition to the obvious compliance reasons, the ACA’s requirements will have a

significant impact on current and future benefit program costs (plan design, eligibility, fees, etc.).

Thus, it’s critical to learn and understand the ACA to allow you to develop appropriate short- and long-term cost control strategies.

Here are some additional reasons to learn the ACA:

• You are responsible and accountable for benefits program (risk tolerance)

• Executives are very interested (at the table and have questions)

• Be in the best position to question/challenge broker and vendor advice and guidance

• Communicate effectively, especially to employees and departments supporting ACA requirements

• Very good chance employees are going to be more vocal about benefits (often times in a negative way)

6

Benefit Information Websites to Visit


Benefits information - good, bad, and ugly - is everywhere you look these days.

Here are opportunities to obtain good, free, credible information:

• BenefitsLink (www.benefitslink.com)

• Government ACA websites (www.healthcare.gov, www.dol.gov/ebsa/healthreform/)

7

Learn Financial Wellness


Financial wellness is the new buzz phrase in employee benefits and 93% of employers

are very or moderately likely to create or broaden their efforts on financial wellness topics in a manner that extends beyond retirement decisions according to Aon Hewitt's

2015 Hot Topics in Retirement Survey. Such topics include:

• Basics of financial markets,

• Healthcare planning,

• Financial planning,

• Debt management,

• Budgeting, and saving for life stages

Given increasing employee interest, look into which topic/s will provide the greatest value-add and work with your current retirement provider to lead financial wellness

meetings.

http://www.benefitslink.com/

http://www.healthcare.gov/

http://www.dol.gov/ebsa/healthreform/

8

Reduce Benefit Costs


Execute Appropriate Benefit Strategies


Determine new strategies to control rising organizational healthcare costs.

According to the 2015 Towers Watson/NBGH Best Practices in Health Care Employer

Survey, the top priorities of employers’ health care activities over the next three years include:

• Increasing focus on employee well-being, including health, financial and workplace experience (96%)

• Evaluating health and pharmacy plan design strategy (95%)

• Developing/enhancing a workplace culture where employees are responsible for their health (94%)

10

Keep the “Cadillac Tax” in Mind


According to the IFEBP 2015 Employer-Sponsored Health Care: ACA's Impact Survey, 34% of employers, up from 24.5% in 2014, have started taking action to avoid

triggering the 2020 "Cadillac" 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 regulations. Although the effective date of this tax was recently delayed until 2020, keep it on your radar.

11

Prepare for Telehealth-Mania


74% of employers plan to offer telehealth (exchange of medical information to improve

health using 2-way video, email, smartphones, etc.) in states where it is legal this year, up from 48% last year, according to the National Business Group on Health's

Large Employers' Health Plan Design Survey.

Given the rising costs associated with in-person visits and the upcoming "Cadillac tax", this may be a great opportunity for your organization to proactively mitigate health

insurance costs.

12

Stay out of Jail


ACA Reporting Aftermath


No doubt you are DONE WITH BENEFITS for a while given that year 1 of the ACA IRS

reporting requirement is over BUT it will be worth it to take the extra time to ensure you store all of the documentation supporting the information that appears on your

ACA IRS reports. This information will be necessary should an employee or the IRS

comes knocking.

Why will this information be necessary?

• The ACA forms will reflect business decisions and calculations you made regarding your medical insurance program (employee benefits eligibility, control group decisions, etc.)

• The ACA forms could illustrate that you took advantage of transitional relief and/or alternative reporting methods that require passing a respective test/s (mid-size employer delay, non-calendar year plan, 98% offers, qualifying offer, etc.)

• The IRS expects that any reporting completing decisions made be in “good faith” so they will want to understand your processes (e.g., collection process for dependent social security numbers (for self-insured plans))

14

Tackle Your Low-Hanging Employee Benefits Compliance Fruit


Between the ACA reporting requirements (W-2 cost of benefits, IRS reporting),

payment of new fees (PCORI, Transitional Reinsurance), and the impact of the Individual Mandate on employees, the federal government's magnifying glass over your

benefits program has increased significantly, thus increasing exposure to an audit.

If the government arrives at your organization, good chance they will ask for:

• Benefits plan documentation (ERISA, Section 125)

• HIPAA Privacy and Security (policies and procedures, training)

• Non-discrimination testing results, including Section 125 (as applicable)

• Wellness program compliance (as applicable)

If your organization is not compliant in these areas, they may stay for a while.

15

Develop an Annual Compliance Calendar


Given multiple employee benefit legal requirements throughout the year, create an annual compliance calendar so you can keep track of what you must comply with and

when. Major requirements will fall in the following areas:

ERISA

ACA

COBRA

HIPAA

Medicare

16

Get Work Off My Desk


Write Your Broker/Consultant’s Job Description


In this new world of employee benefits, task your broker/consultant with providing

hands-on support in the following areas:

Compliance

Communications

Analytics

Administration

Strategic Solutions

At a minimum, they should have in-house compliance, communications, and analytics

experts. This will allow your lead consultant to play a more strategic role.

If they are unable to meet your wants, needs and expectations, find a new one that will.

It’s a buyer’s market (keep that in mind from a pricing standpoint too).

18

Jury Still Out on Private Exchanges


According to the Deloitte Center for Health Solutions 2015 Survey of U.S. Employers,

89% of respondents have not moved to a private exchange.

However, 30% are interested and adopters feel that private exchanges:

• Make it easier to offer a defined premium approach (62%)

• Simplify their company’s role in benefits administration (60%)

• Improve access to broader physician/hospital networks (57%)

While a private exchange may ultimately not be the right fit for your organization, the value-add promulgated by the adopters provide enough reason to consider performing

a pros/cons analysis.

19

Effectively Communicate to Everyone


20

Questions Galore / Ramp Up Proactive Employee Communication


Given the complexity of the ACA, employees are confused and questions will increase. According to

the IFEBP 2015 Employer-Sponsored Health Care: ACA's Impact Survey, common questions include:

• How will our benefits change?

• Is this benefits change because of the ACA?

• Do I need to do anything (tax-related) or otherwise?

Remind employees that you (and not the news, neighbors, or relatives) are in the best position to

answer their questions, especially at Open Enrollment and employee benefit meetings. When talking

about the ACA with employees, make sure you are not providing legal or tax advice.

Given the ACA Individual Mandate and exchange opportunities, communicate proactively with

employees in key situations that could have a negative effect on them or the organization (e.g.,

remind newly benefits-eligible employees to determine their exchange subsidy eligibility, 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.).

21

Understand Employee Benefits Eligibility


Ensure you truly understand how the employee benefits eligibility rules work and are

applying them accurately because there are three policing functions:

• Federal government

• Employees

• Tax advisors through the ACA IRS reporting process

You could be subject to significant penalties if you don’t offer health insurance coverage to the appropriate employees. This is especially important for 2016 where

the offer of benefits coverage threshold increases from 70% to 95% of full-time

employees.

22

Questions / Thank You


THANK YOU!

Ed Bray, JD, MBA, SVP, Compliance

[email protected]

925-322-6654

mailto:[email protected]

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