The ABC's of employee benefits, Part 1
June 5, 2013 7:07 PM
Accountability is working.
Whether in health and welfare or wellness, employers are holding employees accountable for good health more than ever. According to the 2013 Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care, average total health care costs per active employee are only expected to increase 5.1% in 2013, the lowest increase in 15 years.
Barrage of regulations.
Since President Obama was re-elected, there have been a significant number of health care reform regulations released, including rules on health insurance exchanges, the 90-day waiting period and wellness. Using a good compliance resource can help you understand what all the regulations mean for your organization.
Consider outsourcing.
Benefits administration outsourcing isnt for everyone, but think about the time you could commit to things like developing strategy to manage the costs associated with the new complex world of employee benefits, including the impact of health care reform.
Don't forget the FMLA.
With the focus so much on health insurance, there is a chance you may not have seen the new 2013 FMLA requirements, including new forms and notice posting requirements. And dont forget about your compliance obligations under state leave laws.
Ensure you have good help.
Between new employee benefits compliance requirements, reduced staffs, and internal cost pressures, odds are youre moving a mile a minute. That said, make sure you not only have the proper internal resources but a broker/consultant capable of following, understanding and helping you in both the short-term (implementing the requirements) and long-term (developing strategies for the future).
Flexibility in work arrangements.
According to a SHRM Research Spotlight on Future HR Challenges and Talent Management Tactics, 40% of respondents feel that providing flexible work arrangements will be most effective in attracting, retaining, and rewarding the best employees over the next 10 years.
Grandfathered plans decreasing.
Not surprisingly, the number of companies with at least one grandfathered medical plan decreased to 58% in 2012, from 72% in 2011, according to the Kaiser Family Foundation/Health Research & Educational Trust 2012 Annual Employer Health Benefits Survey.
Health care costs.
Health care costs will continue to grow faster than the economy, despite the cost-control measures within the Affordable Care Act. Federal health care spending will increase the deficit by an average of $827 billion per year over the next 75 years, says a report from the U.S. Government Accountability Office. Why? Technological advancements, growth in personal income, expanded insurance coverage, and demographic changes all beyond the cost-control provisions of the ACA.
Importance of benefits to employees.
According to MetLife's 11th Annual Study of Employee Benefit Trends, three out of five employees who would recommend their employer as a good place to work say benefits are an important reason they remain with the company.
Justify resources now.
Given the complex benefits requirements your organization will face over the next few years, theres a good chance youll need external support in the form of legal counsel, consultants, actuaries, financial analysts and communications specialists. Review where you might need such assistance now so you can prepare and present a business case justifying your needs before every situation becomes an unbudgeted, last minute exercise.
Keep senior management informed.
Ensure that senior management is not only aware of the 2013 and 2014 health care reform provisions but also the expected financial impact of such provisions. This will assist with proper budgeting and staffing, plus minimize the surprise factor when its time to implement each provision (like next year's $63 reinsurance fee).
Losing grandfathered status.
Because 2010 seems like a lifetime ago, just a reminder that if one of your medical plans loses grandfathered status, you must implement the health care reform provisions associated with being a nongrandfathered plan.
Manage health care costs.
In a 2012 survey of finance executives by Prudential Financial, Inc. and CFO Research Services, 70% of respondents said controlling the employer cost for company-provided health care benefits was the top priority. Part of the solution will be for employees to bear a larger share of the costs.
