Navigating Transgender Leave

The societal understanding of what it means for an employer to be truly inclusive of all diversity groups has expanded exponentially since the turn of the 21st century. Employers are increasingly faced with multifaceted Human Resources related topics including cannabis, cybersecurity, sexual harassment, and a push, in many states, for equal opportunity for paid leave. Equal opportunity accommodations do not just vary between male and female employees but also between groups based on race, religion, and gender identity.

Gender identity itself varies extensively, but one concentration is the difference between individuals that identify as either cisgender (the same gender as their sex at birth) or non-cisgender (not the same gender as their sex at birth). The non-cisgender identity includes a wide umbrella of individuals who do not identify or present themselves with the sex they were assigned at birth, including transgender (not the same gender as their sex at birth) and non-binary (neither exclusively female or male) individuals. This particular group of individuals has historically faced major roadblocks in society and until recently, had not experienced inclusion and accommodations in the corporate world. Even with the progress that has been made, there is still a gap in today’s employee benefits environment for anyone deviating from “the norm”.

Fill out the form below for the full white paper, which covers:

  • Unique challenges faced by LGBTQ employees and their employers, including leaves of absence and insurance coverage
  • Terminology and proper usage
  • Protective regulations, including a state-by-state analysis
  • How to expand inclusivity to the LGBTQ population and tips for building a benefits program and culture that accommodates accordingly

 

5 Things to Think About Before Introducing a Student Debt Benefit

In 2018, Americans held a whopping $1.5 trillion in student loan debt, beating both the national auto and credit card debt rates. This number has grown exponentially in recent years, having an impact on all employees but arguably hitting the millennial generation hardest. As a result, employees are deferring home purchases and retirement savings due to their student loan obligations. In turn, this creates a challenge for employers working to recruit these employees, who are experiencing financial challenges and not at optimal productivity or engagement.

Employers across the country are recognizing this crisis, and implementing solutions to mitigate its effects for employees. However, nothing is simple. In considering a student debt relief benefit, organizations need to think about:

  1. Strategic goal(s)

  2. Financial wellness

  3. Funding and taxability

  4. Administrative complexity

  5. Employee demographics

In this article, we will elaborate on these factors and outline the pros and cons of several established student debt benefit programs. We will also provide our perspective on the future of the market – is this a short-term trend or something that is here to stay? Click here to read the full article.

Government Shutdown and Its Impact on Employee Benefits

As the federal government partial shutdown continues, employers who rely on government contracts or have business models that depend on a fully operational government are now forced to make difficult decisions regarding their workforce. Some employers are contemplating reductions in force, layoffs, or furloughs to weather the financial ramifications of the
shutdown. This leads to questions about employee benefits, and how benefits should be handled during these leaves of
trump maternity leaveabsence.

Employers contemplating a reduction in force, layoff, unpaid leaves of absence, or furloughs, should review the following:

  1. Review their employee handbook and plan document for eligibility provisions. How plan eligibility is determined will be critical in determining how benefits are or are not continued.
  2. Review their carrier contracts, including stop-loss or reinsurance provisions regarding eligibility.
  3. If they are an applicable large employer, review their obligations under the employer mandate
    play or pay provisions.
  4. Communicate process for benefit premium payments, if applicable.
  5. Provide COBRA notices appropriately, when necessary.

Eligibility Policies

Employers are obligated to follow the provisions put forth in their plan documents, and mirrored in their employee handbooks, for benefit eligibility. Employers whose handbooks do not contemplate layoffs, furloughs, or reductions in force, or who have conflicting language between documents, should consult with their legal counsel.

Carrier Contracts

Employers should work closely with their carriers, including stop loss and reinsurance carriers, to ensure that both parties agree about who is and who isn’t eligible for benefits. Conflicts between parties will require legal counsel.

Applicable Large Employers (ALE)

To comply with the ACA, applicable large employers must offer their full-time employees health coverage or pay one of two employer-shared responsibility/play or pay penalties. An applicable large employer has 50 or more full-time or full-time equivalent employees in the prior calendar year. Full-time employees are employees who are credited with 30 hours of service a week or more. A full-time equivalent employee is calculated by combining the number of hours of service of all non-full-time employees for the month (not including more than 120 hours of service per employee) and dividing the total by 120.

Under the ACA, any hour for which an employee is paid or entitled to payment must be counted as an hour of service. This includes:

  • An hour worked
  • Holiday
  • Incapacity (including disability)
  • Military duty
  • Vacation
  • Sick time
  • Layoff
  • Paid leave

This means that employees of applicable large employers will continue to accrue hours of service during a leave of absence due to the layoff provision if they are paid. If the employer is an ALE, and the employee is still considered full-time (e.g., due to being in a stability period), the employer will continue to be obligated to offer the full-time employees affordable, minimum value health coverage. Failure to do so would risk triggering ACA penalties (i.e., the “affordability” penalty, as the COBRA coverage offered due to the reduction in hours is likely to be “unaffordable”).

Employers are provided with two methods to determine an employee’s full-time status: the monthly method, and the measurement
and lookback method.

  • Under the monthly method, the employer looks at each employee’s actual hours of service each calendar month (an hour worked or an hour of paid time for vacation, holiday, sick time, incapacity including disability, layoff, jury duty, military duty, or other paid leave) each calendar month. An employee is full-time for the month if he or she works 130 hours, no matter how long or short the month is.
    • Under the look-back method, the employer looks at the number of hours the employee averaged during a look-back period called a “measurement period.” Once the employer determines whether the employee worked full-time during the measurement period, that determination generally will apply throughout the immediately following stability period regardless of the number of hours the employee actually works during the stability period (unless the employee’s employment ends).

Layoffs

If the employee is laid off during a stability period (not terminated) and is considered full-time, affordable coverage must be offered during the layoff to avoid exposure to potential penalties. Once the layoff is over, if the employee returns to work within 13 weeks (26 weeks for educational institutions), coverage must be reinstated by the first day of the month
following his return to work.

The time on layoff will not count as hours of service for purposes of the measurement period if the leave is unpaid. If coverage is terminated and the layoff exceeds 13 weeks, the employee can be treated as a new employee, with a new waiting period or initial measurement period, when he returns (of course, the plan may be designed to reinstate all returning employees immediately upon return). Generally, if the employee had coverage during the layoff (e.g., through COBRA or another extension of coverage), coverage will be reinstated upon return. There will be no hours of service to measure during unpaid leave (except for unpaid jury duty, FMLA or USERRA leave).

Unpaid Leave

If the employee is on an unpaid leave of absence (except FMLA) and in a stability period as full-time, the employee must be offered affordable coverage through the stability period to avoid potential penalties. When the employee’s hours are calculated during the measurement period, the leave of absence (except FMLA) will count as zero hours of service. Employers that are ALEs should seek experienced legal counsel to ensure that their plan documents reflect their practices during any furlough, layoff, reduction in force, or leave of absence to mitigate risk under the ACA.

Payment of Premiums

Employers who continue offering benefits during a furlough, layoff, or reduction in force will need to establish a process for premium payment.

Employers that already have an established process for premium payment during unpaid FMLA leave or during a pay shortage (for example, for tipped employees) should utilize those policies. The IRS has not provided guidance or regulation for handling pay shortages without a loss of benefit eligibility. Employers often refer to the rules provided for handling employee contributions during an employee’s unpaid Family Medical Leave Act (FMLA) leave. There are three options that employers have during unpaid FMLA leave:

  • Pre-payment
  • Pay-as-you-go on an after-tax basis
  • Catch-up salary reduction upon return from leave

During the government shutdown, it is likely that only the second two options would be feasible. The premium payment policy should be uniformly enforced for all employees. Employers may set a time limit for the employee to catch up on contributions before terminating coverage, as well as a maximum period of time over which employees may spread payments. Employees should be allowed uniform periods of time to pay back missed contributions; for instance, management should not be given three months to pay back missed contributions when other employees are only given one month.

COBRA

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) allows qualified beneficiaries who lose health benefits due to a qualifying event to continue group health benefits.COBRA

COBRA qualifying events include what is called a “reduction in hours.” A reduction of hours commonly occurs when an employee goes from full-time to part-time, when an employee is temporarily laid off or furloughed, or when an employee goes on a leave of absence. The IRS COBRA regulations provide that a reduction of hours in a covered employee’s employment “occurs whenever there is a decrease in the hours that a covered employee is required to work or actually works, but only if the decrease is not accompanied by an immediate termination of employment.”

In this event, employers who are subject to COBRA should timely provide affected employees with their COBRA election notice if their reduction in hours results in a loss of coverage under the plan.

COBRA Strategy for ACA Compliance or Culture Concerns

In the event that a plan document, employee handbook, or carrier policy determines a furloughed or laid off employee is no longer a benefits eligible full-time employee, employers who are subject to COBRA could offer impacted employees COBRA coverage and assist the employee with premium payment.

Under the ACA play or pay provisions, an offer of COBRA coverage is considered an “offer of coverage” and if an employer assists in premium payments, COBRA coverage could potentially be made affordable to ensure the employer was not triggering ACA penalties for failing to offer affordable, minimum value coverage.

Association Health Plans | Everything You Need to Know About AHPs

As the future of healthcare in the U.S. remains uncertain and, at times, confusing, we wanted to take a moment to share a potentially game-changing provision in a Presidential Executive Order that came late last year regarding Trade Associations and Small Businesses across the country.

Association Health Plans Executive Order

The provision relates to the expansion of Association Health Plans (AHPs) and, given that Spring is a facilitator for one of the only two State-Approved Healthcare Cooperatives in Massachusetts, we are tentatively excited to see the administration loosening regulations for AHPs and recognizing the benefits that buying together offers to small businesses and employers. By joining together to purchase coverage for their employees, these businesses can dramatically cut costs while both better serving their employees and reinvesting in their own economic growth.

Small businesses specifically benefit from the freedom to join together across state lines and, in some cases, pool their risk by forming an AHP, because it opens up the freedom to craft coverage that better suits the needs of the companies and their employees. Without this option, these smaller employers often are forced to purchase overpriced plans that are either excessive or ill-suited for their workforce, wasting resources and straining their already tight finances.

This small provision in the executive order – and the new regulations that will soon follow – may well enable small businesses much greater control over building their benefits packages, but constructing a stable long-term Association Health Plan remains complex and challenging. Spring Consulting Group has developed best-in-class solutions for AHPs and their members, and recognizes the key role benefits play in helping businesses attract and retain the best possible workers.

The Executive Order was signed in October of 2017 and then went to the Department of Labor (DOL) and the Centers for Medicare and Medicaid Services (CMS) for consideration. As of January 4th, 2018, the proposed regulations are still on the table, and we are in a comment period until March 6th.

In what ways would the proposed regulation expand the market for Association Health Plans?

  1. Association Health PlansIt would allow a reclassification for AHPs, eliminating some prerequisites that previously existed, such as the provision of mental health services. This means more groups would qualify as AHPs.
  2. It would allow individuals to buy an AHP, something which wasn’t permitted previously.
  3. It would allow small business to band together for the purpose of affordable group healthcare, whereas before an AHP could only be formed as a sort of spin-off of a group that already existed for some other reason not pertaining to health plans.
  4. It would allow AHPs to be sold across state lines.

These are the most notable ways this could be a positive change for US healthcare, and one that opens many doors that had previously been closed. Now more than ever, it is critical that the accessibility of affordable yet effective health plans increases.

More About Association Health Plans

This video below spotlights what the AHP regulation means for businesses and existing associations. We provide an overview of AHPs, the current laws that pertain to them and the ways in which this could be a game-changer for your business or association.

Find Out More

Employer Alert: Congress Delays Key ACA Taxes

Lost in much of the drama of this weekend’s government shutdown and the inclusion of the Children’s Health Insurance Program (CHIP) funding extension in the continuing resolution (CR) that finally passed, was that the CR also addressed a few of the more onerous aspects of the Affordable Care Act (ACA). Here is a quick rundown:

ACA Tax UpdateThe ACA’s Cadillac Tax implementation was pushed back even further to January 1st, 2022. You’ll recall that this 40% excise tax on higher-cost employer medical plans was originally set to go into effect in 2018 and was then moved to 2020 back in 2015. While this latest delay doesn’t kill the tax, the constant kicking of this can down the road certainly gives its opponents hope that it will never actually see the light of day.

The ACA’s Medical Device Tax has been delayed 2 years to 2020. This 2.3% tax on medical devices was included in the ACA legislation to offset some of its costly insurance subsidies, much like the Cadillac Tax.

The Health Insurance Tax (HIT) will be suspended for all of 2019. It will be collected in 2018 and then presumably again in 2020, unless another suspension or other Congressional act occurs. The HIT is essentially a health insurance excise tax which was included in the original ACA legislation and took effect this month.

What this means to employers: in the short-term, not much. Your health insurance premiums likely already reflect the 2018 HIT and the other two taxes have not taken effect yet, so their delay will not have any immediate financial impact on your company.

In the medium-term, this is a win for employers, as the HIT will go away for at least a year, resulting in temporarily lower 2019 renewals. Further, any employer with generous benefits won’t have the Cadillac Tax looming over their heads for at least four more years.

If the HIT is reinstated in 2020, fully-insured groups will see a big 2020 rate increase. Self-funding with stop-loss would avoid this unknown. It is also worth noting that these delays and suspensions, combined with the recent tax bill’s repeal of the ACA’s individual mandate, significantly reduce the ACA’s funding mechanism. We will be watching these issues closely and will be issuing further employer alerts as the ACA picture gains a bit more clarity.

Voluntary Benefits: No Longer Voluntary for Employers (A White Paper)

The evolution of voluntary benefits – that is, those made available by employers but typically funded by employees – over the last five to ten years is truly significant. Once considered a burden that just wasn’t sought after enough by employees to be worth the effort, voluntary is now a critical component to many corporate benefits packages. It offers a win-win-win solution for employers, employees and vendors alike. It allows employees access to more customized products and services without the employer needing to shoulder the cost, in a time when rising healthcare costs are already keeping them up at night.Voluntary Benefits

In this white paper, we’ll take a deep dive into this market shift and uncover the advantages of voluntary programs for all stakeholders. We’ll also share tips and best practices for getting started – or maintaining – your voluntary benefits program, as well as point out potential pitfalls of voluntary plans and how to avoid them. We’ll discuss things like plan design, workforce demographics, ERISA, program communications and other factors that come into play.

Whether you’re already offering voluntary benefits or are considering starting, you’ll want to read our advice and guidelines. We’ve been helping clients navigate these tricky waters for years, and have picked up quite a few tricks of the trade along the way! Fill out the form below for your copy of the white paper, “Voluntary Benefits: No Longer Voluntary for Employers.”

 

 

Watch the Webinar: ERISA Considerations for Voluntary Plans

Once a bit of an afterthought, voluntary benefits are now quite mainstream and used as a tool for employers to provide top-notch, competitive benefits to employees while not increasing their costs. At a time when organizations are struggling to battle the rising costs of healthcare while retaining and recruiting top talent, many have recognized the value of a voluntary program in recent years. With such increased popularity, it’s important for employers to understand all the legal ramifications of their offerings.ERISA voluntary benefits

The Employee Retirement Income Act of 1974 (ERISA) is a federal law that outlines standards for certain pension and health plans. ERISA effectively guides what an employer is allowed and prohibited from doing when it comes to establishing, maintaining and publicizing these benefits. When it comes to voluntary plans, its relationship with ERISA is a bit murky:

  • which plans does ERISA apply to?
  • what is the safe harbor policy?
  • what are the consequences of violating ERISA for voluntary?

In this recorded webinar, I explain the answers to these questions and more. Failing compliance when it comes to voluntary and ERISA is likely a misunderstanding that your organization cannot afford, and it’s important to know the legal nuances that exist when talking about ERISA and voluntary benefits vs. other types. With many employers turning to voluntary programs to solve some of their benefits challenges, it’s critical that they are executed within the realms of the law.

Fill out the form below to learn all about this complex topic. I’ll outline key points and info and you’ll be able to listen to real questions asked by your peers.

 

5 Potential Pitfalls of Voluntary Benefits & How to Avoid Them

You already read that Voluntary Benefits Are No Longer Voluntary for Employers. Now it’s time to dig deeper into Voluntary Benefits best practices- program design, what constitutes success when it comes to voluntary benefits and outline tips to prevent an ineffective voluntary program.

The term voluntary benefits was coined long ago when employers fully funded (or significantly subsidized) core benefits and voluntary benefits were an add-on, paid for by the employee through payroll deductions.  As the landscape changed, core benefits evolved to be partially funded by employers and partially funded through payroll deductions. As a result, many benefits became voluntary.

For today’s employees, it’s not as simple as core and voluntary; it’s about choice.  Employees need to balance what limited disposable income they have for all benefits, regardless of what they are labeled. Even still, the concept of core and voluntary resonates with employers as an industry norm, so it’s important to identify ways to avoid common pitfalls of voluntary program implementation:

  1. Think holistically
  2. Don’t forget about ERISA
  3. Consider enrollment options as a critical component in overall design
  4. Remember that education is key
  5. Help employees get the most from their plan

Think Holistically About Voluntary BenefitsVoluntary Benefits Tips

Many employers think offering voluntary benefits is like checking a box – something that can be done quickly and without much deliberation. However, programs without thoughtful preparation are rarely successful in terms of education, enrollment and satisfaction.  Voluntary benefits should be considered an integral part of the overall benefits package.  A strong offering should take into account various factors, including but not limited to:

Current population:

Although a one-size-fits-all approach does not and should not exist, employee demographics can help you pinpoint which products would be most sensible for your collective audience.  Generally speaking,                  those that are starting out in their careers have different priorities than those nearing retirement, and employees falling somewhere in the middle of the spectrum will have their own set of benefits needs as                well.  For example, accident insurance is more popular for families than for singles or empty nesters, while student loan repayment is more relevant for those in their 20’s and 30’s than for older employees.

Current benefit offering:

When considered in tandem, voluntary benefits can serve to protect employees and reduce their risk or perceived risk for various physical or financial troubles.  For example, introducing a high deductible                   health plan offering complementary voluntary products (i.e. hospital indemnity, critical illness, accident insurance) can help decrease the financial burden on employees.

Don’t Forget About ERISA Considerations for Voluntary Benefits

Voluntary Benefits Best PracticesVoluntary benefit programs may or may not be subject to the Employee Retirement Income Security Act of 1974 (ERISA), depending on how they are structured and supported by the employer.  ERISA provides important protections but can also pose constraints for employers and employees.  Assuming you do not want your voluntary programs to be covered under ERISA, you must be careful to manage enrollment and administration separately from your core benefit programs.  If you would like your voluntary plans to be subject to ERISA, then coordinating administration and enrollment will not be problematic; however, understand the potential impacts.  ERISA compliance and your potential fiduciary duties should never be an afterthought.

Consider Enrollment Options as a Critical Component in Overall Design

Our research affirms that employees better understand the offering and have higher enrollment when they participate in group meetings or individual meetings.  In addition, vendor partners are often willing to offer more competitive pricing and waive enrollment requirements if they can meet with employees directly or send them some type of material in the mail.

While some employers welcome the “free” education and enrollment, others are concerned about aggressive selling or having employees using work hours to meet with potential vendors.  If you think of voluntary benefits as part of your holistic offering, then leveraging work hours will be less of an apprehension when voluntary is an element of your complete attraction and retention tool.

The key is to think about the enrollment process as an essential design component of your voluntary program.  Ensure that decisions surrounding enrollment fit with the overall program strategy and make sense for your population.  Providing comprehensive enrollment with core and voluntary may be a best practice for your group.  This allows employees to make coordinated decisions regarding their contributions and programs.  It also enables you to offer complementary plans for optimal plan selection.  While that structure works for some, other employers feel employees have too many decisions to make during annual enrollment and prefer to stagger voluntary enrollment to allow more time for thoughtful decision making. There’s no right or wrong answer – each company and population is different.

Remember that Education is Important

Decision support tools have continued to evolve, providing employees with strong advocacy for traditional plans and voluntary benefits alike.  Although voluntary benefits are designed to be less complex and easier to understand, for some employees the language is new.  Summarizing the program(s) and sharing scenarios to help employees understand the products is often the best way to introduce a new plan.Voluntary Benefits Enrollment

Regardless of who funds the program, as the employer it is important that you educate your employees on the available offering.  Employees should not elect a benefit they do not understand and employers should not offer benefits that are not valued by employees, or that employers themselves cannot explain effectively.  Every dollar spent on voluntary benefits is money your employees are not spending on other necessities like monthly bills, student debt, groceries, emergency savings, or even 401k contributions; make sure they are knowledgeable about what they are buying and ensure that it’s a competitive product in the market.

Education can be facilitated in many ways including traditional employee meetings, brochures, benefit fairs, and onsite sessions with vendors.  At Spring we have also assisted clients with quick videos that provide the highlights of a program and generate interest.  These videos have been well received and employees are able to retain the information from a creative video more easily than a detailed presentation.  Videos are also shareable and can be viewed by family members who may be a critical part of the decision-making process.

Help Employees Make the Most of the Plan

Voluntary Benefits Vendors

After you have implemented a voluntary program and educated your membership it’s important that you continue to monitor the program and assist your employees in optimization.  Sometimes employees forget about the benefits they have available to them and continue to make monthly contributions to plans but they neglect to file claims because they don’t remember what they have elected.  A few simple actions can help your employees make the most of the plan:

  • Send a quarterly newsletter to all employees, or just those enrolled in voluntary benefits. This will give you the opportunity to remind them of the program benefits.  It can also help facilitate changes (i.e. enrolling spouses, children) and provide an opportunity to ask questions.
  • Partner with your vendors. For example, if you have a purchase program in place, they often run specials and send postcard reminders.  Take advantage of those specials!  Perhaps you could run a joint wellness campaign linked to specials on health equipment.  Ask if they would be willing to raffle off something like a treadmill or vacation to align with your wellness strategy.
  • Remind your employees to file claims. Even if you cannot leverage actual data, you can send a reminder at the midpoint of every year for wellness visits with a link to the claim form.  For example, most critical illness and accident plans offer a wellness rider – find out how many employees use that benefit and try to increase that percentage.
  • Ensure the program remains competitive from a pricing and design standpoint. Employees should feel assured that the benefit they’re purchasing through their employer remains is top tier.

Taking the above factors into account will help you establish a voluntary benefit offering that is accessible and relevant to your employees and that is well worth the effort on your part. Today’s workforce has come to expect more than just the basics when it comes to benefits, and voluntary products allow you to diversify your benefits package, keeping you competitive with market standards without any significant cost increase.

However, it is not enough merely to offer voluntary products and services – they need to be the right ones for your population, they need to be communicated effectively, they need to be readily understood, they need to account for regulations like ERISA, they need to be fully utilized and they need to be rolled out in a way that makes sense for your organization. By covering these bases you’ll be able to avoid the most common pitfalls and successfully offer a valued voluntary benefits programs.