Legal Alert: Massachusetts Employers Must File HIRD Form by December 15

Massachusetts Employers Must File HIRD Form by December 15

As part of Massachusetts’ expanded Employer Medical Assistance Contribution (EMAC) program, employers with 6 or more employees in Massachusetts must submit a health insurance responsibility disclosure (HIRD) form annually, which collects information about employer-sponsored health insurance offerings.  Employers throughout the Commonwealth should have received email communication from the Department of Revenue (DOR) indicating that the HIRD form must be completed by December 15, 2019Massachusetts HIRD Form

The HIRD reporting requirement is administered by MassHealth and the DOR through the employer’s MassTaxConnect (MTC) account.  Employers may complete the HIRD form by logging into their MTC Withholding Tax account and selecting the “File HIRD” hyperlink under the “I Want To” section. The form will be available starting November 15 and will be used to assist MassHealth in identifying its members with access to qualifying insurance who may be eligible for the MassHealth Premium Assistance Program.  The DOR has published FAQs available here: https://www.mass.gov/info-details/health-insurance-responsibility-disclosure-hird-faqs.

Under the law, employers who knowingly falsify or fail to file the form may be subject to a penalty of $1,000 – $5,000 for each violation.

Next Steps

Employers should check with their payroll provider to determine if they will assist with the filing.  While the HIRD form may be filed by either the employer or its payroll company, it’s the employer’s responsibility to ensure that the form is timely filed.

The form is used to indicate whether the employer has offered to pay or arrange for the purchase of health insurance and information about that insurance, such as the premium cost, benefits offered, cost sharing details, eligibility criteria and other relevant information.  The HIRD form will be used to assist MassHealth in identifying its members with access to qualifying insurance who may be eligible for the MassHealth Premium Assistance Program. The Premium Assistance Program helps eligible working individuals and families pay for qualifying employer-sponsored insurance.

 

About the Authors.  This alert was prepared for Spring Consulting Group by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act.  Contact Peter Marathas or Stacy Barrow at pmarathas@marbarlaw.com or sbarrow@marbarlaw.com.

Spring’s SVP Speaking at the National Workers’ Compensation and Disability Conference

We are excited to share that our Senior Vice President, Karen English, has been invited to speak at this year’s National Workers’ Compensation and Disability Conference & Expo, which runs from November 6th-8th in Las Vegas. Karen, winner of the 2019 Power Broker award for Workers’ Compensation, is an expert in the field and will bring great value to the audience. Workers' Comp and Disability

Her session, Getting Smart Integrating Workers’ Comp, Disability and Leave Programs, runs from 2:30-3:45 PM on Wednesday, November 6th. She will be presenting alongside Kerry Daley, Absence Program Manager at Robert Half. Together they will cover the full spectrum of integrated program benefits, such as:

  • Cost reductions
  • Increased productivity
  • Greater efficiency
  • Deeper understanding of employee health
  • More consistent claims

The duo will offer best practices for integrating, and will demonstrate different approaches, implementation challenges and results through a case study. Attendees will leave with enhanced knowledge about the dangers of a program of silos, and with a plan of attack for integrating and/or maintaining their leave program.

 

DOL Issues Ruling to Further Support Retirement Income Security for Small & Mid-Sized Employers

Summary

The U.S. Department of Labor (DOL) finalized a ruling that will improve retirement security for small and mid-sized employers as it estimates that 38 million private sector employees do not have access to retirement benefits. The ruling was issued on July 29, 2019 and was effective September 30, 2019. The ruling is as a result of an executive order issued by President Trump in October 2018 that focused on retirement plan security for small and mid-sized employers. The DOL used its delegated authority under ERISA to create this ruling. The ruling from the DOL is specific to defined contribution plans and did not include defined benefit plans.Association Retirement Plans

The DOL ruling states that small and mid-sized employers can now offer retirement savings plans through Association Retirement Plans (ARPs), otherwise known as Multiple Employer Plans (MEPs). These plans allow employers to come together to offer retirement plans to their employees. For this purpose, the association can be in a certain geography (i.e., split by city, state, or multi-state metropolitan area) or in a common industry with-out regard to geography. The DOL ruling also provides a safe harbor for a Professional Employer Organization (PEO) to offer an ARP.

An ARP is considered a single ERISA plan and therefore ERISA requirements (such as reporting, disclosure, plan documents, and investment monitoring) do not apply to each participating employer separately as the ERISA requirements instead apply to the ARP. The participating employers, however, would still have a fiduciary duty to ensure the plan is operating appropriately.

Key Reasons to Consider an ARP or MEP

Organizations that would like to offer traditional 401(k) retirement plans to help retain and attract new talent, may want to consider these types of programs as they will be more cost effective and will require far less internal resources than a traditional individual employer plan. Importantly, ARPs can provide substantial fiduciary support and improved level of governance, including investment management and oversight services. Outsourcing plan administration and investment fiduciary services will provide for better overall plan management and much lower risk for each adopting employer versus setting up individual employer plans.

In addition, there could be access to lower cost investment options that would be available in the ARP due to larger purchasing power versus an individual small employer plan. While there is a single plan document, each adopting employer still has the flexibility to design key provisions of the benefit program that would work for them. Examples include plan eligibility, contribution levels, and vesting provisions.

Association Retirement Plans versus Association Health Plans

A similar ruling was passed for Association Health Plans (AHPs) in 2018. However, in March 2019, a federal district court found that the ruling violated ERISA. This case developed after push back by several states and the District of Columbia of the AHP ruling. It is possible that the federal dis-trict court’s decision could be overturned in the appeals process. AHPs have had very different outcomes versus ARPs, given involvement from the states for AHPs. ARPs are federally regulated and therefore consistent in all areas.

Conclusion

Retirement income security continues to be an important topic for employers and employees. The DOL ruling provides additional opportunities for small and mid-sized employers to offer defined contribution retirement benefits to their employees in this competitive employment landscape. We expect more of these employers to focus on retirement benefits as they assess their over-all benefits package for recruiting and retention purposes.

3 Unique Use Cases for Captives, From VCIA 2019

Every year for over a decade, Spring has sent team members to Burlington, Vermont in late summer for the annual Vermont Captive Insurance Association (VCIA) conference. As a leading US Captive domicile, Vermont has long been at the forefront of captive expansion and policy, and their yearly summit brings together some of the best and the brightest in the industry. This VCIA in particular was special for me personally, as I was recognized as an emerging professional in the field. It is always special when you win an award, more so, when it is your peers who recognize you.Captive Review Award Winner 2019

As per usual, seminars covered a wide range of topics, from drones and artificial intelligence, to ROI, reinsurance negotiation and tax updates. However, after taking the time time to reflect on what really stuck with me from the conference (and to jot it all down), I realized that many were interested in the different, perhaps untraditional ways to use a captive. As such, I am sharing some key takeaways centered around that theme below.

  1. Product & Program Innovation

Not only are captives in and of themselves are a mode of innovation, but they also serve to proliferate further innovation, in terms of coverage lines, products and program structures.  In one Innovation Spotlight session, edHEALTH and HCMS Group highlighted their use of captives to reduce health spend, implement population health management and develop predictive modeling. In “Captive as Laboratory”, Steve McElhiney and Ed Koral covered emerging and future risks, encouraging the audience to think about what unique risks their organization faces, both internally and externally. They then discussed how to use a captive to provide a tailor risk
offering with potential risk support, for risks such as TRIA or contingent business interruption.

  1. Group Health Plans

Unfortunately for both employers and employees, the unaffordable healthcare trend doesn’t appear to be going anywhere. Reducing healthcare spend is a key component of many organizations’ captives, as they allow for more control and transparency. Beyond that, there is an opportunity for captives to serve as a group health exchange structure for like organizations who band together. As mentioned above, edHEALTH is a great example of a group of higher education institutions joining together for group purchasing power for health and other benefits. Further, Spring’s Managing Partner, Karin Landry, spoke on Association Health Plans, which have hit some regulatory hurdles, but have a clear tie to the self-insured captive model. This session featured a case study on Agri-Services Agency, a subsidiary of the Dairy Farmers of America, who is in the process of using a captive to allow for the provision of group healthcare for its diverse membership, many of whom reside in rural areas or are sole proprietors.

 

  1. Retention

“Utilizing a Captive as a Talent Retention Tool” brought a different angle to the benefits and use cases of captives. The presentation emphasized how captives can boost employee benefits in a noticeable way to the end-user: the employee. Captives also create unique roles and responsibilities within an organization that enable valuable experience and growth for employees.

 

As you see, in between an exciting awards ceremony for myself and Spring, and plenty of dinner and cocktail receptions, I was certainly still able to further my industry knowledge and I met a lot of great people along the way. We are already looking forward to VCIA’s 2020 conference and hope to see you there!

4 Areas That Kept Popping Up at the DMEC Annual Conference

Now that the dust has settled and we are even ahead to next year’s conference, we’ve had the time to reflect on key learnings from the 2019 DMEC Annual Conference. Spring, and myself, have been active participants in the organization’s events and programs for many years, and the Annual Conference is one of the industry’s largest hubs for thought leadership. This year was no exception. Between cocktail receptions and dueling piano bar outings, there was a lot of knowledge shared among the (approximately) 500 professionals who came together from August 5th-8th in the D.C. metropolitan area.

As a general practice, we at Spring like to reinforce a conference’s highlights by putting pen to paper (or fingers to keyboards) and jotting them down to share with our colleagues. While the pre-conference material was focused on behavioral health in the workplace, there were four other hot topics that we couldn’t help but notice creating a thematic backbone to the main conference. Generally, what piques people’s interest most at a conference like DMEC is a good indicator of trends in the HR and benefits market at large. So, here they are!

  1. Paid Leave

I wasn’t surprised that paid leave was on a lot of people’s minds at the conference. After all, eight states and Washington D.C. have now enacted statewide paid leave policies, and there are several more, similar legislations being proposed in other states. While this is all great progress for the American workforce, it does complicate things from an HR and leave administration and compliance perspective. Various DMEC presenters were out to share their experience to help employers across the country who are grappling with the policies.

 

There was, “A Case Study: Developing a Paid Parental Leave Program”, which walked the audience through Halliburton’s approach. We also heard from an attorney on how to design a compliant paid sick leave policy, and in “They’re Here! A Deep Dive Into Paid Family and Medical Leaves”, we were given a national, trend-based overview as well as a granular, state-by-state look at the existing paid family and medical leave programs, as well as tips for employers getting started with a program.

  1. Data

Not all of the work of benefits and disability management professionals is always at the forefront of a business, but it sure does make an impact. As such, there was a heavy focus on the data and numbers behind all of that work being done. In “Got ROI?”, led by two of our Senior Vice Presidents, Teri Weber and Karen English, data was name of the game  – what types to look for, how to collect it, how to measure success, and how to take numbers and turn them into actionable insights.

 

Further, one session focused on paid leave data, and how it ties into corporate communications, cyber security and onboarding. CoreHealth Technologies presented on data specifically for healthcare organizations, focusing on their unique challenges. Lastly, in “How to Use Absence and Disability Data to Understand Your Workforce”, discussions revolved around turning health and populatio

Employee Absence Management

n data into insights you can use for various early intervention tactics.

 

  1. Employee Experience

It’s the employee’s world and we’re just living in it. Not really, but there was a definite emphasis at DMEC on the customer, which in many cases means the employee. Our very own Teri Weber led a workshop called “Your Self-Audit Checklist”, which, at its core, is really centered around making processes more seamless and compliant-friendly so that employee and employer alike have a more pleasant work environment. Another session revolved around advocacy, and how it can be used to elevate the employee experience. In “Winning the War for Talent by Perfecting the Employee Experience”, a panel discussed the importance of the employee experience for retention and recruitment, and suggested strategies for improvement.

 

  1. ADA/FMLA

With a name like Disability Management Employer Coalition, the ADA and FMLA are always prevalent at the conference. This year, however, with the DOL’s proposal of form changes for FMLA and several high-profile court cases around both policies, we wanted to make sure to note it yet again as a pressing priority for professionals in this space. The topic(s) appeared in the following presentations:

  • “It’s Complicated: The Always-Evolving ADA/FMLA Relationship”, which covered how shifts in technology and business needs necessitates pivots to your FMLA and ADA approach.
  • “Opioids and the ADA/FMLA”, where a doctor and a representative from Lincoln Financial Group discussed the opioid epidemic, how it came about, how it impacts the workplace, what to watch out for and how to develop employer policies and strategies for prevention and management.
  • “Reducing Your ADA Burden by Implementing a Return to Work Strategy” outlined myths and benefits of return-to-work and stay-at-work programs, an employer’s ADA obligations, EEOC guidelines and tips for a successful program.
  • “FMLA/ADA Lessons Learned: Jury Verdicts, Settlements & Recent Court Cases” provided an overview of court cases like Gunter v. Bemis Company, Hawkins v. Grinnel Regional Medical Center, Jacobs v. Wal-Mart Stores, and Ramirez v. Jack in the Box. The presenters reiterated what it means to be compliant in areas such as reasonable accommodations and “essential job functions”, so that employers in the audience were better equipped to prevent having their own court case on their hands one day.

I hope you found our event recap useful. From attending great industry events like DMEC, we know that sharing knowledge is the best way to make progress, so we wanted to pay it forward. You might also be interested in this summary on another session my colleague Karen English led, called “The RFP Process: A Deep Dive”.

We are already looking forward to – and planning for – DMEC’s two annual conferences next year.

Tufts & Harvard Pilgrim – Will They Really Merge, And What Happens If They Do?

As many of you now know, on August 14th, Harvard Pilgrim Health Care (Harvard Pilgrim) and Tufts Health Plan (Tufts) reached an agreement to combine into a single company that would serve nearly 2.4 million lives in New England. Since the announcement, our team as been working to collect as much information as possible on the pending merger. We did not want to rush to judgement the day of the announcement, and instead have done our due diligence, speaking to carriers and lawmakers alike to get a full picture of what this could mean for our clients and the industry at large. Here is what we’ve uncovered.

Tufts & Harvard Pilgrim merger

 

The Goal

First, what’s in it for the carriers? What are they trying to accomplish? Primarily, they are looking for increased market share and membership. Currently Blue Cross Blue Shield has over 40% of the commercial market in Massachusetts, with 2.8 million subscribers. Tufts and Harvard Pilgrim follow with 12.6% and 12.4% of the market, respectively. By joining forces, the two would still follow behind Blue Cross Blue Shield, but by a much smaller margin. Their new size could allow them greater influence over hospitals, doctors and drug companies.

By expanding its coverage network to five states (CT, MA, RI, NH, ME), Tufts and Harvard Pilgrim will also be in a better position to compete with national providers like Aetna and Humana. Further, Harvard Pilgrim has been experiencing decreased membership numbers over the past few years, and this is their latest attempt, following the proposed merger with Partners HealthCare in 2018, to boost their subscriber base.

The new group plans to offer employer-sponsored plans, Medicare and Medicaid. Tufts, already a big player in the Medicare market, can build upon its footprint in this area. The two carriers have also stated their plans to innovate and use new tools to improve population health quality.

The Patient Experience

CEO of Tufts Health Plan, Tom Croswell, who would lead the unnamed unified organization as CEO, noted four areas that health plan subscribers in New England are currently struggling with:

  1. Affordability
  2. Access
  3. Quality
  4. Continuity (or lackthereof)

Croswell stated that by combining resources, the two carriers will be able to tackle each of these issues.

Will it Pass?

This proposed merger is far from a done deal. While leaders from both Tufts and Harvard Pilgrim have spoken out about their intent to use this partnership to alleviate healthcare costs for consumers in New England, many worry it could have the opposite effect.

Harvard Business School research shows that insurance mergers typically lead to higher premiums, and we know that the Aetna and Prudential merger of 1999 did in fact just that. When it comes to Tufts and Harvard Pilgrim combining, there are major concerns that consumers would be negatively impacted both through costs and the choices offered, which could be lessened as a result of the merger.

Details of the merger must now go through review by the Massachusetts Attorney General, Maura Healey, the Massachusetts Division of Insurance, and federal regulators as well. The state departments will be assessing whether the merger will disrupt access to healthcare for consumers, among other things. Governor Charlie Baker has said that any healthcare merger should result in greater transparency, lower prices and better outcomes for patients, so we do expect regulators to be looking at the full patient experience when considering the deal. Financial terms of the agreement have not yet been released, but those will also be assessed.

I personally don’t see this as an easy approval process or a slam dunk, but if it does pass, here’s what you can expect.

Looking Ahead

I believe that more competition is better for the consumer and with a limited number of carriers that offer health insurance in Massachusetts already, I don’t see how having less options will offer more affordable health coverage for consumers and businesses in the Commonwealth of Massachusetts.  Consumers and businesses will have fewer overall choices of insurance plans and, more than likely, higher rates.  Further, this could result in lower reimbursements to insurance providers, which could reflect in higher costs passed on to the consumer. Also, with these consolidations, there is always a possibility of minor disruptions due to incompatible systems for claims payments and enrollments.

If Harvard Pilgrim and Tufts do go through with the merger, it will be following another major merger in the New England healthcare market – that of Beth Israel Deaconess Medical Center and Lahey Health – which closed in May. This trend toward centralization and rapid expansion is an indicator of healthcare at the national level, where smaller players are finding it nearly impossible to remain profitable. However, there is something to be said for having regional expertise, which Tufts and Harvard Pilgrim could still keep even if combined.

No matter which way things end up, you can be certain that the deal will take 18 to 24 months to be truly approved, finalized and implemented. You can also count on our team at Spring Insurance Group being there to help you every step of the way – deal or no deal – to ensure you still have the best coverage at the best rates available, with minimal interruptions to your business operations.

 

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

 

Spring Wins Two of Captive Review’s 2019 Awards

We are incredibly excited to announce that the Spring team had a great night this past Monday at the CaCaptive Review Award Winner 2019ptive Review awards reception in Burlington, Vermont.

Spring took home the award for Employee Benefits Specialist of the year, and our Senior Consultant, Prabal Lakhanpal, won the Emerging Talent award for service professionals.

Our team works tirelessly day in and day out to deliver the best, research-driven and innovative service to our clients, with the goal of always producing tangible results. All of our staff is encouraged to participate in educational and industry related events and organizations so they can continue to build their skills and knowledge, and Prabal is a prime example of this development and growth. Always at the forefront of employee benefits and how they intersect with captives, we are constantly thinking outside-the-box to help clients fund competitive benefits packages that makes sense for their organization, its culture and its risk profile. This has been a particularly strong year for us, and we thank Captive Review for the recognition.