When most experts think of group healthcare plans, Preferred Provider Organization (PPO) plans largely come to mind—though higher cost, they dominate the market in terms of plan distribution and employee enrollment. But Consumer-Directed Health Plans (CDHPs) have made surprising gains. Despite slight cost increases, CDHP costs are still below average and prevalence and enrollment in these plans continues to grow in most regions—a main reason why it was one of the top 7 survey trends recently announced.

In 2017, 28.6% of all plans are CDHPs. Regionally, CDHPs account for the following percentage of plans offered:

Prevalence of CDHP Plans

CDHPs have increased in prevalence in all regions except the West. The North Central U.S. saw the greatest increase (13.2%) in the number of CDHPs offered. Looking at size and industry variables, several groups are flocking to CDHPs:

Regional offering of CDHPs

When it comes to enrollment, 31.5% of employees enroll in CDHP plans overall, an increase of 19.3% from 2016, after last year’s stunning increase of 21.7% from 2015. CDHPs see the most enrollment in the North Central U.S. at 46.3%, an increase of 40.7% over 2016. For yet another year in the Northeast, CDHP prevalence and enrollment are nearly equal; CDHP prevalence doesn’t always directly correlate to the number of employees who choose to enroll in them. Though the West held steady in the number of CDHPs offered, there was a 2.6% decrease in the number of employees enrolled. The 12.6% increase in CDHP prevalence in the North Central U.S. garnered a large 40.7% increase in enrollment. CDHP interest among employers isn’t surprising given these plans are less costly than the average plan. But like all cost benchmarks, plan design plays a major part in understanding value. The UBA survey finds the average CDHP benefits are as follows:

CDHP benefits

By Bill Olson
Originally Published By United Benefit Advisors

Recently, the Internal Revenue Service (IRS) issued the instructions for Forms 1094/1095 for the 2017 tax year, announced PCORI fees for 2017-18, and announced cost-of-living adjustments for 2018. The IRS provided additional guidance on leave-based donation programs’ tax treatment and released an information letter on COBRA and Medicare. Here’s a recap of these actions for your reference.IRS Announces Cost-of-Living Adjustments for 2018

The IRS released Revenue Procedures 2017-58 and Notice 2017-64 to announce cost-of-living adjustments for 2018. For example, the dollar limit on voluntary employee salary reductions for contributions to health flexible spending accounts (FSAs) is $2,650, for taxable years beginning with 2018.

Request UBA’s 2018 desk reference card with an at-a glance summary of the various limits.

IRS Announces PCORI Fee for 2017-18

The IRS announced the Patient-Centered Outcomes Research Institute (PCORI) fee for 2017-18. The fee is $1.00 per covered life in the first year the fee is in effect. The fee is $2.00 per covered life in the second year. In the third through seventh years, the fee is $2.00, adjusted for medical inflation, per covered life.

For plan years that end on or after October 1, 2016, and before October 1, 2017, the indexed fee is $2.26. For plan years that end on or after October 1, 2017, and before October 1, 2018, the indexed fee is $2.39.

For more information, view UBA’s FAQ on the PCORI Fee.

IRS Provides Additional Guidance on Leave-Based Donation Programs’ Tax Treatment

Last month, the IRS provided guidance for employers who adopt leave-based donation programs to provide charitable relief for victims of Hurricane and Tropical Storm Irma. This month, the IRS issued Notice 2017-62 which extends the guidance to employers’ programs adopted for the relief of victims of Hurricane and Tropical Storm Maria.

These leave-based donation programs allow employees to forgo vacation, sick, or personal leave in exchange for cash payments that the employer will make to charitable organizations described under Internal Revenue Code Section 170(c).

The employer’s cash payments will not constitute gross income or wages of the employees if paid before January 1, 2019, to the Section 170(c) charitable organizations for the relief of victims of Hurricane or Tropical Storm Maria. Employers do not need to include these payments in Box 1, 3, or 5 of an employee’s Form W-2.

IRS Releases Information Letter on COBRA and Medicare

The IRS released Information Letter 2017-0022 that explains that a covered employee’s spouse can receive COBRA continuation coverage for up to 36 months if the employee became entitled to Medicare benefits before employment termination. In this case, the spouse’s maximum COBRA continuation period ends the later of: 36 months after the employee’s Medicare entitlement, or 18 months (or 29 months if there is a disability extension) after the employment termination.

 

By Danielle Capilla
Originally Published By United Benefit Advisors

I’m happy to report that this year’s UBA Health Plan survey achieved a milestone. For the first time, we surpassed 20,000 health plans entered—20,099 health plans to be exact, which were sponsored by 11,221 employers. What we were able to determine from all this data was that a tumultuous Presidential election likely encouraged many employers to stay the course and make only minor increases and decreases across the board while the future of the Patient Protection and Affordable Care Act (ACA) became clearer.

There were, however, a few noteworthy changes in 2017. Premium renewal rates (the comparison of similar plan rates year over year) rose nearly 7%, representing a departure from the trend the last five years. To control these costs, employers shifted more premium to employees, offered more lower-cost CDHP and HMO plans, increased out-of-network deductibles and out-of-pocket maximums, and significantly reduced prescription drug coverage as six-tier prescription drug plans exploded on the marketplace. Self-funding, particularly among small groups, is also on the rise.

Percent Premium Increase Over Time

UBA has conducted its Health Plan Survey since 2005. This longevity, coupled with its size
 and scope, allows UBA to maintain its superior accuracy over any other benchmarking survey in the U.S. In fact, our unparalleled number of reported plans is nearly three times larger than the next two of the nation’s largest health plan benchmarking surveys combined. The resulting volume of data provides employers of all sizes more detailed—and therefore more meaningful—benchmarks and trends than any other source.

By Peter Weber
Originally Published By United Benefit Advisors

Fall.  With it comes cooler temperatures’, falling leaves, warm seasonal scents like turkey and pumpkin pie, and Open Enrollment.  It goes without saying; employees who understand the effectiveness of their benefits are much more pleased with those packages, happier with their employers, and more engaged in their work. So, as your company gears up for a new year of navigating Open Enrollment, here are a few points to keep in mind to make the process smoother for both employees and your benefits department. Bonus: it will lighten the load for both parties alike during an already stress-induced season.

Communicate Open Enrollment Using a Variety of Mediums

Advertise 2018 benefit changes to employees by using a variety of mediums. The more reminders and explanation of benefits staff members have using more than one mode of media, the more likely employees will go into Open Enrollment with more knowledge of your company’s benefit options and when they need to have these options completed for the new year.

  • Consider explainer videos to simplify the amount of emails and paperwork individuals need to review come Open Enrollment time. These videos can increase the bottom line as well, eliminating the high cost of print material.
  • Opt for placards placed throughout your high-traffic areas. Communicate benefit options and remind employees of Open Enrollment dates for the new year by posting in such areas as the lobby, break room and bathroom stalls.
  • Choose SMS texting. Today, over 97% of individuals use text. Ninety-eight percent of those that use text open messages within the first three minutes of receiving them; 6-8 times higher than the engagement rate for email. Delivering a concise message to employees’ mobile devices creates more touch points along the Open Enrollment journey. The key, however, is making it quick so as to entice your employees to take action.
  • Promote apps and in-app tools. Push notifications and apps like Remind 101 can help drive employee engagement during Open Enrollment season simply by providing short messages reminding them to enroll. Notifications like these can also be tailored to unique employee groups based on location, job level, eligibility status and more.

Utilize Mobile Apps and Web Portals for Open Enrollment

Now that your company has communication down pat for Open Enrollment, simplify the arduous task employees have of enrolling for the coming year by going paperless. Utilize web portals through benefit brokers and companies like ADP to eliminate the hassle of employees having to fill out paperwork both at renewal, and at the time of hire.  With nearly three quarters of individuals in the United States checking their phone once an hour and 90% percent of this time is spent using one app or another as a main source of communication, mobile apps can make benefits engagement much easier due to the anywhere/anytime accessibility they offer.

The personal perks for employees are great too! Staff members with a major lifestyle event can make benefit adjustments quickly with the ease of mobile apps.  Employees recognize this valuable and time-saving trend and enjoy having this information at their fingertips.

Open Enrollment season can be a stressful time but hopefully these tips will help for a smoother transition into the next year for your business. Simple things like using explainer videos, placing reminders in high traffic areas and utilizing mobile apps and text messaging can save time and stress in the long run for your employees and benefit department.

 

What an informative luncheon (on Wednesday 10/25) with our very own Elizabeth Kay discussing the most recent updates of the Affordable Care Act! She discussed the most recent executive order and how if it takes effect, it will more likely impact the individual market, not the group market. Thank you to the San Mateo County EAC and the Employment Development Department for putting it all together!

 

Thursday, October 19, 2017 our team attended the MyOHR Annual Seminar in Palo Alto. We learned about new labor laws that were passed October 12th, discussed the past and present of the Affordable Care Act, and delved into worker’s comps claims and what employers can do to make the process smoother for themselves and the employee. A shout to our great speakers Trina Clayton at Ad Astra, Owen Fennern at Armstrong Law Firm and Elizabeth Kay from our very own AEIS (not pictured). Thank you to all the guests who were able to make it during this busy time of year! We hope to see you at next year’s Annual Seminar!

If you’re one of the millions of Americans who owns a permanent life insurance policy (or are thinking about getting one!) you’ve probably done it primarily to protect your loved ones. But over time, many of your financial obligations may have ended. That’s when your policy can take on a new life—as a powerful tool to make your retirement more secure and enjoyable.

Permanent life insurance can open up options for you in retirement in three unique ways:

1. It can help protect you against the risk of outliving your assets. Structured correctly, your policy can provide supplemental retirement income via policy loans and withdrawals. Having a policy to draw from can take the pressure off investment accounts if the market is sluggish, giving them time to rebound. Some policies may also provide options for long-term care benefits. At any time, you may also decide to annuitize the policy, converting it into a guaranteed lifelong income stream.

2. It can maximize a pension. While a traditional pension is fading fast in America, those who can still count on this benefit are often faced with a choice between taking a higher single life distribution, or a lower amount that covers a surviving spouse as well. Life insurance can supplement a surviving spouse’s income, enabling couples to enjoy the higher, single-life pension—together.

3. It can make leaving a legacy easy. According to The Wall Street Journal, permanent life insurance is “a fantastically useful and flexible estate-planning tool,” commonly used to pass on assets to loved ones. Policy proceeds are generally income-tax free and paid directly to your beneficiaries in a cash lump sum—avoiding probate and Uncle Sam in one pass. Your policy can also be used to pay estate taxes, ensure the continuity of a family business, or perhaps leave a legacy for a favorite charity or institution.

“Having a policy to draw from can take the pressure off investment accounts if the market is sluggish, giving them time to rebound.”

If you do expect your estate to be taxed, you can even establish a life insurance trust, which allows wealth to pass to your heirs outside of your estate, generally free of both estate and income taxes.

Where to start? A policy review
If you’ve had a life insurance policy for awhile, schedule a policy review with your life insurance agent or financial advisor. By the time you reach mid-life, you may have a mix of coverage—term, permanent, group or even an executive compensation package.

Your licensed insurance agent or financial advisor can help you assess your situation and adjust a current policy or structure a new policy to help you achieve your retirement planning goals.

If you have no coverage at all, there’s no better time than today to get started. Life insurance is a long-term financial tool. It can take decades to build permanent policy values to a place where you can use them toward your retirement goals. And, health profiles can change at any time. If you’re healthy, you can lock in that insurability now and look forward to years of tax-deferred (yes!) policy growth.

Retired already? The best thing you can do is meet annually with your personal advisors to ensure your plans stay on track. Market conditions and family circumstances change, so that even the best-laid plans require course adjustments over time.

By Erica Oh Nataren
Originally Published By Lifehappens.org

A dependent care flexible spending account (DCFSA) is a pre-tax benefit account used to pay for eligible dependent care services. The IRS determines which expenses are eligible for reimbursement and these expenses are defined by Internal Revenue Code §129 and the employer’s plan. Eligible DCFSA expenses include: adult day care center, before/after school programs, child care, nanny, preschool, and summer day camp. Day nursing care, nursing home care, tuition for kindergarten and above, food expenses, and overnight camp are ineligible expenses.

Qualifying Individuals

Only qualifying individuals are eligible for dependent care expenses. A qualifying individual is an individual who spends at least eight hours in the participant’s home.

Dependent care includes care for a child who is under the age of 13 and in the participant’s custody for more than half the year. Dependent care also includes care for a spouse or relative who is physically or mentally incapable of self-care and lives in the participant’s home.

If parents are divorced, then the child is a qualified dependent of the custodial parent. A non-custodial parent cannot be reimbursed under a DCFSA even if the parent claims the child as a tax dependent.

Contributing to a DCFSA

The election is the participant’s contribution amount, which is the amount the participant puts into a DCFSA at enrollment. Participants may change the amount of money to be withheld within a 31-day window after a qualifying event, such as marriage, birth or adoption of a child, dependent death, divorce, or change in employment. Participants may enroll in or renew their election in a DCFSA during open enrollment. Participation is not automatic. Participants must re-enroll every year by the enrollment date.

The employer determines the minimum election amount and the IRS determines the maximum election amount. The IRS sets the following annual contribution limits for a DCFSA:

  • $2,500 per year for a married employee who files a separate tax return
  • $5,000 per year for a married employee who files a joint tax return
  • $5,000 per year for the head of household
  • $5,000 per year for a single employee

Even though a different maximum contribution limit may apply depending on the employer’s plan, the maximum contribution cannot exceed the following earned income limitations:

  • If you are single, the earned income limit is your salary, excluding contributions to your DCFSA.
  • If you are married, the earned income limit is the lesser of: your salary, excluding contributions to your DCFSA, or your spouse’s salary.

All DCFSA contributions are subject to IRS use-it-or-lose-it rules, which means that unused funds within the plan year will be forfeited to the employer unless the employer’s plan offers a grace period extension. Some plans include a two-and-a-half-month grace period.

Participants must report their DCFSA contributions on their federal tax return along with the name, address, and Social Security number (if applicable) of the dependent care service provider.

Reimbursement Requests

A valid DCFSA claim will either have the dependent care provider certify the service by signing the claim form or have the participant provide an itemized statement from the dependent care provider that includes the following: service dates, dependent’s name, type of service, amount billed, and the provider’s name and address along with a completed claim form.

Participants should save supporting documentation related to their DCFSA expenses and claims because the IRS may request itemized receipts to verify the eligibility of their expenses.

By Danielle Capilla
Originally Published By United Benefit Advisors

Quantitative research guides health care decision makers with statistics–numerical data collected from measurements or observation that describe the characteristics of specific population samples. Descriptive statistics summarize the utility, efficacy and costs of medical goods and services. Increasingly, health care organizations employ statistical analysis to measure their performance outcomes. Hospitals and other large provider service organizations implement data-driven, continuous quality improvement programs to maximize efficiency. Government health and human service agencies gauge the overall health and well-being of populations with statistical information.

Health Care Uitilization

Researchers employ scientific methods to gather data on human population samples. The health care industry benefits from knowing consumer market characteristics such as age, sex, race, income and disabilities. These “demographic” statistics can predict the types of services that people are using and the level of care that is affordable to them. Health administrators reference statistics on service utilization to apply for grant funding and to justify budget expenditures to their governing boards.

Resource Allocation

Heath care economists Rexford Santerre and Stephen Neun emphasize the importance of statistics in the allocation of scarce medical resources. Statistical information is invaluable in determining what combination of goods and services to produce, which resources to allocate in producing them and to which populations to offer them. Health care statistics are critical to allocative and production efficiency. Inevitably, allocation decisions involve trade-offs–the costs of lost or missed opportunities in choosing one economic decision over another. Reliable statistical information minimizes the risks of health care trade-offs.

Needs Assessment

According to Frederick J. Gravetter and Larry B. Wallnau, statistics “create order out of chaos” by summarizing and simplifying complex human populations. Public and private health care administrators, charged with providing continuums of care to diverse populations, compare existing services to community needs. Statistical analysis is a critical component in a needs assessment. Statistics are equally important to pharmaceutical and technology companies in developing product lines that meet the needs of the populations they serve.

Quality Improvement

Health care providers strive to produce effective goods and services efficiently. Statistics are important to health care companies in measuring performance success or failure. By establishing benchmarks, or standards of service excellence, quality improvement managers can measure future outcomes. Analysts map the overall growth and viability of a health care company using statistical data gathered over time.

Product Development

Innovative medicine begins and, sometimes, ends with statistical analysis. Data are collected and carefully reported in clinical trials of new technologies and treatments to weigh products’ benefits against their risks. Market research studies steer developers toward highly competitive product lines. Statistics indirectly influence product pricing by describing consumer demand in measurable units.

By Rae Casto
Originally Published By Livestrong.com

Switching over to AEIS Advisors was the best decision we’ve made this year. Ronald and his team were able to identify discrepancies on our billing statements which got missed by our last broker, and they saved us over $8,000 in credits! AEIS has proven to be an attentive and caring company, looking out for the best needs of their clients."

- Director of Operations

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