Tackling employee benefits and third party risks

As seen in Captive International

The “new normal”, whether it feels normal or not, is not on the horizon, but at your doorstep. Cutting-edge businesses are taking a modern approach to address the challenging market conditions while still providing competitive benefits, retaining and attracting talent, and being risk-smart and mindful of their bottom lines.

Thinking holistically and reframing your strategy around medical stop-loss, life and disability, and voluntary benefits are just a few of the ways you can use your captive to stay ahead.

 

Can Health Advocacy Help Piece Together the Healthcare Puzzle?

Dazed and Confused

Think about your last visit to the doctor. Did you know what questions to ask? Did you leave with a clear picture of the next steps or alternative options? Did you know the cost of your appointment and treatment path before starting it, or what would be covered by your health insurance? If you answered “no” to any of these questions, you are certainly not alone.Health Advocacy Tools

Bend Financial[i] recently conducted a survey that showed that only 29% of people were completely confident in their ability to navigate the healthcare system, whereas 56% were entirely confused when it comes to health insurance. Unfortunately, an alarming subset of consumers opt to avoid healthcare completely, too defeated by the complexity.

Beyond health insurance, employees must navigate the suite of benefits offered to them by their employer. While these are meant to provide support, they can cause more confusion when employees are looking for assistance. Employers must consider how introducing a new program or benefit will fit into their overall strategy and integrate the resources, without adding to the complexity employees face.

Breaking Through the Fog

Advocacy tools have popped up as a response to the confusing environment. These tools offer a wide variety of clinical, educational and administrative resources, such as:

  • Helping members understand test results or treatment plans
  • Advocating for members with complicated conditions and managing their care
  • Coordinating care at inpatient facilities
  • Identifying top providers
  • Arranging second opinions
  • Providing information about alternative prescription options
  • Assisting employers to understand health risks through biometrics, claims and other data
  • Developing customized Employee Assistance Programs (EAPs) or other life coaching services
  • Reviewing medical bills and allowing for transparency of costs
  • Facilitating prescription drug delivery
  • Assisting with wellness goals
  • Accessing telemedicine
  • Booking appointments and sending reminders
  • Optimizing HSA, FSA and HRA accounts
  • Integrating with other vendors offered by the employer

The landscape for these platforms is robust and ever-changing. The spectrum of vendors include those that offer:

  1. A holistic approach. Major players may provide all of the above features in a one-stop shop model for employees.
  2. Preventive approach. Some vendors focus on prevention of common conditions, encouraging employees to get annual eye exams, diabetes screenings, cancer screenings, medication adherence, and more.
  3. Targeted approach. This last category of vendors specialize in support for employees with common chronic conditions including diabetes, hypertension and high cholesterol. While likely not the most costly conditions, the potential for savings and member support is significant when factoring in the volume at play. These vendors aim for condition management by giving members the tools to monitor and manage their conditions better on their own, hopefully necessitating less emergency care in the future.

    Comparatively, other tools focus only on the highest cost conditions and members, such as cancer diagnoses. Offering a specialized tool for members going through this difficult time enables them to procure the best and most cost-effective care, while also giving them access to resources related to nutrition, mental health, and more.

While available on a standalone basis, advocacy solutions may also be accessible to employers through their insurance carriers, Third-Party Administrators (TPAs), or Employee Assistance Programs (EAPs). Programs embedded with a carrier or TPA tend to focus on overall health management programs, disease management and wellness, as well as resolving billing issues and comparing costs of providers.

A commonality across platforms is the prioritization of the consumer experience – offering easy, self-service access in mobile apps or online portals. Members typically have a single point of contact at the advocacy company, so they know who to call and do not have to navigate being transferred or having an unfamiliar staff member pick up their case.

Overall, for employees, health advocacy platforms may:

  • Help them get the most out of their insurance plans and programs
  • Cut through the clutter of healthcare
  • Promote health and productivity
  • Increase preventive behavior

For employers, health advocacy tools can:

  • Cause an uptick in employee engagement and satisfaction
  • Increase health plan utilization.
  • Yield savings in healthcare costs by allowing employers to better understand cost drivers,
  • Facilitate the creation of more informed preventative and wellness programs and ultimately lead to a healthier population

Advocacy Adoption: Is It Right For You?

Ultimately, it is up to the employer to determine what programs would best support their employees. Based on the 2020 Integrated Disability Management (IDM) Employer Survey conducted by Spring Consulting Group, 61% of employers offer a health advocacy solution today, compared to only 41% in 2018. Determining which model and which vendor to select can be difficult as there are many players in the market. In assessing whether an advocacy tool would be a good fit for your organization, any decision around advocacy solutions should be tied to program objectives.

  • Are you primarily concerned with cost savings?
    • Health advocacy solutions can provide cost savings to employers or health plans, as they direct employees to access only necessary healthcare services, perhaps at a lower cost facility than they otherwise would have used. A tool like this should, in theory, help avoid bigger, high-cost problems down the road by assisting the employee with addressing issues early. Certain vendors may even offer a cost savings guarantee. However, it will take time to see a possible Return on Investment (ROI). On the flip side, an advocacy solution can encourage greater utilization, such as for behavioral health services. While a higher utilization rate may mean increased claims, giving employees tools to access the services they need can lead to less emergent or high-cost care down the road. As such, you should determine if you are looking for immediate or long-term results.
  • Are you looking for higher engagement in your health and benefits plans?
    • There is a lot of logic behind the argument that an advocacy tool will increase engagement. However, if an employer has had trouble engaging employees in the past, such as in wellness challenges, incentives, education, etc., nothing is guaranteed. Vendors claim that anywhere from 30% to 80% of employees will participate in their program, but this is highly variable based on different aspects of the program and the employer, such as program features or employer incentives.
  • Are you focused on population health management?
    • By equipping members with the necessary tools to make health care decisions based on value and outcomes, better outcomes are achieved. The plan data will guide your decision related to population health management. For example if you are struggling with diabetes specifically, you may want to consider a targeted point solution focused on diabetes management before committing to a more comprehensive program that tends to be more expensive.
  • Are you hoping to improve the employee experience?
    • With an advocacy tool, members have support to mitigate confusion around healthcare services, surprise billing, complex diagnoses…but it only works if members leverage the support. Programs should be communicated often and where possible linked to activity within the plan. We always recommend eliciting employee feedback before launching a program such as this, to ensure you are solving for problems that really exist for employees, instead of problems you think exist for employees. Sometimes our clients even roll out a smaller pilot program as a test before implementing the wider solution for the whole organization.

 

Most organizations will have a few different goals at play, which are not limited to those listed above, but typically there is a hierarchy to consider. Working with a trusted advisor can help to understand key differences and ensure programs are designed to work for the employer and their employees. At Spring, we routinely help employers vet solutions to find the one that is optimal for their goals and population.

Conclusion

Overall, health advocacy tools have risen in popularity for a reason. They address critical problems in our healthcare system – confusion, expenses, access, lack of trust – and serve as a different avenue for employers to limit the rising costs associated with healthcare. Advocacy helps ensure employees are understanding the care they receive and have greater visibility into actual costs. While results will vary by platform and organization, vendors are confident in their results; they report significantly lower healthcare trend for clients, compared to previous years when there was no advocacy program in place. With an ever-changing landscape, it is possible that health advocacy programs can bridge the gap between consumers and care, but only time will tell if they can make a long-term impact on the market.

[i] https://www.bendhsa.com/newsroom/more-than-half-of-americans-confused-by-health-insurance-including-hsas

Navigating Transgender Leave: Updated 2021

A lot has changed since we first wrote about this in 2019. Here is an updated view!

Introduction

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. Pride Month employers

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”.

To begin with, most transgender individuals have different day-to-day fundamental needs, such as public (retail stores, restaurants, etc.) accommodation, legal protection, and healthcare access than cis-LGBQ individuals. This gap in provided care and accommodation practices appears in a variety of system-related and brick and mortar ways, but also in regard to compassion and understanding regarding an employee’s reason for needing time away from work, and often whether or not they are granted a requested leave of absence.

We are happy to report that the Human Rights Campaign (HRC) Foundation reported a record number of 767 companies achieving a top score for LGBTQ-inclusive workplace policies in 2021, up from 686 companies in 2020. The report also shows that 94% of Fortune 500 companies have gender identity protections in their nondiscrimination policies, and that 71% of Fortune 500 companies offer transgender-inclusive health insurance, something that zero companies were providing in 2002. Despite this tremendous advancement, throughout the United States the trans population is still up against unique challenges and hardships, particularly when it comes to intentional or unintentional employment-related adversity.

Patchwork of Protections

While areas of the United States are becoming more progressive and accepting of the overall LGBTQ community, and indeed there are some regulations in place to protect this population, laws remain ambiguous at best and nonexistent at worst (i.e. in certain states). At the federal level, The Civil Rights Act of 1964 outlaws employment discrimination on the basis of “sex”, among other things, but until recently, the term was vague and ill-defined. This ambiguity caused historical irregularity in not only leave management but also court handlings. Because of this uncertainty, Congressional Democrats recently reintroduced the Equality Act, which would add “sexual orientation” and “gender identity” to the groups protected by the Civil Rights Act. The bill passed the House in May of 2019. Then, in June of 2020, the U.S. Supreme Court ruled that the Civil Rights Act does protect against gay or transgender employees from employment discrimination, effectively outlawing termination for sexual orientation or gender identity reasons. Most recently (May of 2021), President Biden restored a provision of the Affordable Care Act (ACA) that protects against sexual discrimination in healthcare, including sexual orientation and gender identity.

In the well-known case of Macy vs. Holder/Department of Justice, the court ruled that The Civil Rights Act does protect against gender identity and transgender discrimination. In this scenario, a police detective, at the time presenting herself as a man, aligning with her birth gender, interviewed for a job in California. A director at the company informed the individual that the position would be theirs as long as their background check did not present any ‘problems’. Following the individual’s open commencement of transition and promptly following a notification to the hiring company, the individual was informed the position was ‘no longer available’. Although this instance concluded in favor of the prospective employee and can serve as a guide and a beacon of hope for the transgender community, it does not mean that a different court will rule the same.

Many pieces of legislation are outdated simply by having language that omits a large portion of the population.  The Americans with Disabilities Act, for example, does not count transsexualism in itself as a disability, but medical conditions that may result from a difference between someone’s gender identity and sex assigned at birth, such as gender dysphoria, are not excluded.[1]  Further, the ADA may cover side effects from transgender exclusion, such as depression, drug addiction, and alcoholism.pride month HR

LGBTQ rights is one area where federal and state regulations often clash. From a statutory perspective, the following jurisdictions have the highest regard for LGBTQ equality, with laws in place that specifically and pointedly protect against transgender discrimination:

  • California
  • Colorado
  • Connecticut
  • Delaware
  • Hawaii
  • Illinois
  • Iowa
  • Maine
  • Maryland
  • Massachusetts
  • Minnesota
  • Nevada
  • New Jersey
  • New Mexico
  • New York
  • Oregon
  • Rhode Island
  • Vermont
  • Washington
  • Washington, D.C.

New Hampshire, Delaware, Virginia, New Mexico and Puerto Rico are rated as “medium” when it comes to LGBTQ protective policies. In addition, the cities of Atlanta, Austin, Kansas City, Milwaukee and Philadelphia, among others, have their own ordinances in place, regardless of their state’s stance. This can both assist with and complicate matters, as does the fact that several states (Alabama, Georgia, Nebraska, South Carolina, South Dakota, Tennessee,) are classified as having “negative” policies when it comes to transgender rights[2]: Luckily, with the 2020 Supreme Court Ruling, employees in states without transgender protections still have legal recourse if they are fired for their sexual orientation or expression. This protection, however, does not cover all hardships a person could face such as difficulty in being hired or interviewed, experiencing harassment, or being treated differently when it comes to pay and career advancement.

The Equal Employment Opportunity Commission (EEOC) is an independent federal agency that aims to safeguard transgender workers and uphold the Equal Employment Opportunity (EEO) laws. The EEO laws state that a person cannot be denied a job, fired, or harassed due to their gender identity. It also mandates that employees be given access to the restroom that coincides with the gender with which they identify, regardless of what it may say on their birth certificate. Most recently (May of 2021), President Biden restored a provision of the Affordable Care Act (ACA) that protects against sexual discrimination in healthcare, including sexual orientation and gender identity.

Despite movement forward, legal protections for the transgender population are full of disparities and confusion and may or may not be strictly enforced. Regardless of your political stance, lawsuits, grievances, and recruitment and retention problems surrounding transgenders in the workplace will continue to arise. In March of 2019, for example, the state of North Carolina was sued for having a health plan that violates federal law by eliminating coverage of certain medically necessary procedures for transgender people. Just before, in February of 2019, an Iowa nurse was granted $120,000 in damages as a result of being barred from using the gender exclusive restroom with which he identified. In 2021, despite recent progress, we have seen a record-setting number of anti-LGBTQ legislation, including a bill that outlaws gender-affirming treatment for minors in Arkansas; laws that allow discrimination based on religious principles in Montana and South Dakota; and many others related to sports, education, and birth certificates[3].

Medical Procedures

From an outside cis perspective, what is often sensationalized the most related to transgender employees taking leave is gender reassignment surgery. According to the National Survey of Transgender Individuals, approximately 55% of transgender women either have had or have wanted neovaginoplasty surgery, and 22% of transgender men have either wanted or have had phalloplasty surgery. It is important to note, though, that some transgender or non-binary individuals never have nor want to have surgery to align their physical anatomy with their gender identity.

Depending on the procedure, and without complications, an employee who chooses to undergo transitive surgery can expect to be out of work for about six weeks (although like any major surgery this may vary by individual). The financial costs and recovery time for an employee undergoing transgender surgery and hormone treatments may surprise you. Hormone replacement therapy costs are often undertaken alone by an individual, if not covered by an insurance carrier, and can cost around $130 a month out-of-pocket. Like all invasive surgeries, full transitive operations are costly
(up to $100K). Some health plans cover portions of these treatments, such as Medicare, which supports hormone therapy. Still, many individuals are left to tackle these costs themselves. In these cases, employers should at least be aware of the financial stress a transitioning employee is likely experiencing.

Gaps in Leave

Many working transgender individuals rely on sick leave or paid time off (PTO) banks as they recover from surgery, but it typically only covers a portion of the days taken. In terms of medical leave, FMLA leave should be an option, especially if there is overnight hospitalization at play, such as with a surgery. At this time, though, no clarifying law or regulation exists that addresses gender treatments specifically.

Instead, each instance must be fact specific in determining if it qualifies as a “serious health condition” under the FMLA. This has created challenges for trans and cis employees alike, as the federal definition may not include all treatments and conditions associated with things like Gender Identity Disorder (also known as Gender Dysphoria) or with a person’s medically supervised gender transition. Further, even if the protection is granted, the leave is unpaid under the federal FMLA.

Paid leave may be available through Paid Family and Medical Leave (PFML) laws or specific employer paid leave programs. PFML laws provide paid leave for medical and family care reasons, wherein medical leave is available to eligible employees experiencing a serious health condition. The definition of serious health condition varies by state and may or may not apply to an individual’s situation. These programs are currently in place in Massachusetts, Washington, and Washington, D.C. Connecticut, Colorado and Oregon will be implementing programs over the next few years. Additionally, states including California, New Jersey, New York and Rhode Island offer state disability insurance programs, wherein employees who meet the definition of disability may be eligible for paid leave. Similarly, many employers offer short term and long term disability to their employees, who may be eligible if they meet the specific conditions set forth. Various programs are continuously being considered by states and jurisdictions throughout the country, as well as on a federal level, so medical and disability leave programs may become increasingly available. Purchasing individual disability insurance as a transgender person is typically more difficult and costly, based on how the carrier calculates individual risk, but it is possible.

Parental leave is another area that is not always offered equally to transgender and cisgender employees. These policies are based on the definition of what qualifies as a parent, thus are subject to the specific federal, state or company-specific terms at hand. While the Department of Labor has clarified that employees, including LGBTQ employees, can take leave under the FMLA to care for a child for whom the employee is serving as a parent, even if there is not a legal or biological relationship to the child, the federal law does not recognize same-sex relationships. Employers continue to examine the inclusivity of their leave policies. A trend seen in the market is the language used to name and define leaves. Parental leaves, for example, are becoming more common than “maternity” or “paternity” leaves and may be available to “birth parents” or “non-birth parents” as opposed to a mother or father.

In some of these scenarios, it can be difficult for the individual as well as the employer to determine which kind of leave, if any, would best suit the employee’s needs. As a rule of thumb, if your company has leave benefits for cisgender individuals, a transgender equivalent should be considered.

LGBTQ employeesAccommodating Your Transgender Employees

It is important for employers, especially those with a robust benefits program, to be educated, have a plan in place and perhaps consider a unique accommodation program, preferably before a trans employee is hired or comes out to their manager or an HR representative.

The extent to which you change or complement your existing benefits program and corporate policies is up to you, but below are some guidelines for treating transgender employees equally and with compassion. It is important to remember that although transgender people represent a minority group, their basic necessities should be able to be reconciled, same as if they were cisgender; anything else may be considered discrimination. At a minimum, consider the following:

  1. Educate yourself and the rest of your workforce as to correct pronoun usage and courtesy
  2. Enforce or reinforce your discrimination policy; train your workforce to be aware
  3. Understand what kind of coverage your health plan offers for things like hormone therapy, and consider alternatives if feasible
  4. Define the family members for which an employee is eligible to take leave to include same-sex partners as well as the children of a same-sex partner, regardless of biological or adoptive status
  5. Include Gender Identity Disorder and procedures relating to gender transition as qualifying conditions for employer granted medical leave for both the employee and their partners
  6. Implement a flexible work schedule or leave policy (whether paid or unpaid) for treatments and non-medical appointments
  7. Assign a suitably trained counselor or advocate for when your transgender employee returns from their leave
  8. Update your restroom and dress code policies for greater inclusivity – potentially including non-gendered restrooms
  9. Update records to reflect name and gender changes, as applicable
  10. Respect the privacy, or willingness to go public, of employees who are coming out as transgender to you

Conclusion

LGBTQ, and more specifically transgender, rights have become a hot topic and a widely debated political issue. Our intent here is not to change your beliefs or take a political stance, but merely to increase awareness of the reality of this timely and increasing human resources challenge.

 

 

[1] Result of Kate Lynn Blatt v. Cabela’s Retail, Inc. 2017.

[2] https://transgenderlawcenter.org/equalitymap

[3] https://www.hrc.org/press-releases/2021-officially-becomes-worst-year-in-recent-history-for-lgbtq-state-legislative-attacks-as-unprecedented-number-of-states-enact-record-shattering-number-of-anti-lgbtq-measures-into-law

 

Moving With the Market: Defined Contribution Cost Delivery Model

At Spring we pride ourselves on helping employers find creative solutions for all of their insurance and benefits needs. In this market, rising healthcare costs, in tandem with a world in pandemic recovery and evolving workforce expectations, further necessitate innovative strategies. In this guide, we explore Defined Contribution (DC) Cost Delivery Models, outlining the different options, advantages, how to get started and a detailed client case study that exhibits proven results.

Download our guide here to ensure you are Moving With the Market.

Congress Passes the American Rescue Plan Act

Congress has passed, and President Biden has signed, the American Rescue Plan Act, 2021 (ARPA), the third COVID-19 stimulus bill.  This new $1.9 trillion stimulus package includes several health and welfare benefits-related provisions relevant to employers and plan sponsors, as summarized below. COVID-19 law

FFCRA Paid Leave Extended and Enhanced

While COVID-19 vaccines are starting to become more readily available, the pandemic continues. In recognition, Congress extended through September 30, 2021, the refundable payroll tax credits for emergency paid sick leave (EPSL) and extended family and medical leave (E-FMLA), which were enacted pursuant to the Families First Coronavirus Response Act.  As with the extension through March 31, 2021 under the second stimulus package (the Consolidated Appropriations Act, 2021), only the tax credits are extended, which means compliance with the EPSL or E-FMLA requirements is voluntary for employers after December 31, 2020.

The ARPA expands FFCRA leave in several ways for employers who choose to offer it from April 1, 2021 through September 30, 2021:

  • The 10-day limit for EPSL resets as of April 1, 2021. Employees were previously limited to 80 hours from April 1, 2020 through March 31, 2021.
    • Paid leave continues to be limited to $511 per day ($5,110 total) for an employee’s own illness or quarantine (paid at the employee’s regular rate), and $200 per day ($2,000 total) for leave to care for others (paid at two-thirds of the employee’s regular rate).
  • A new “trigger” is added under both the EPSL and E-FMLA provisions.  Employees qualify for leave if they are:
    • seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19, and the employee has been exposed to COVID–19 or the employee’s employer has requested such test or diagnosis;
    • obtaining immunization related to COVID–19; or
    • recovering from any injury, disability, illness, or condition related to such immunization.
    • MBWL Note:  The ability of an employer to receive a tax credit for providing paid time off for an employee to receive the vaccine is a clear indication of the federal government’s desire to facilitate employees receiving a vaccine.
  • Leave under the E-FMLA provision is increased from $10,000 to $12,000, with $12,000 being the maximum an employer may claim for an employee in 2021.
  • Leave under the E-FMLA provision is expanded to be available for any EPSL-qualifying reason, which is when an employee is unable to work or telework because the employee:
    • is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
    • has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
    • has COVID-19 symptoms and is seeking medical diagnosis;
    • is caring for an individual who is subject to a quarantine or isolation order;
    • is caring for a child if the school or day care center has been closed, or the child-care provider is unavailable, due to COVID-19 precautions; or
    • is experiencing any other substantially similar condition specified by the regulatory agencies.
  • E-FMLA leave taken on or after April 1, 2021 is not subject to the 10-day elimination period that applied previously under FFCRA.
    • An employee’s eligibility for E-FMLA may depend on when they used E-FMLA previously and how the employer establishes its 12-month FMLA period (e.g., calendar year, fixed period, measure-forward, or “rolling” 12 months).
  • For leave taken on or after April 1, 2021, the employers may take a credit against Medicare payroll tax only (1.45%); however, the credit continues to be refundable.
    • ESPL and E-FMLA credits are available for qualified health plan expenses and for the employer’s share of Medicare and Social Security taxes.
  • ARPA clarifies that refundable credits may be received by state and local governments that are tax exempt under Code 501(a).
  • ARPA adds a new nondiscrimination requirement that eliminates the credit for any employer that discriminates in favor of highly compensated employees, full-time employees, or employees based on tenure.

Dependent Care Assistance Program Limit Increase

In February, the IRS released Notice 2021-15, which provides guidance related to the relief for health FSAs and dependent care assistance programs (DCAPs) contained in the second stimulus bill. Unfortunately, the Notice failed to clarify with any certainty whether an employee may be taxed on any DCAP reimbursements in excess of $5,000 for the calendar year.  That issue is now settled by the ARPA, which increases the DCAP exclusion from $5,000 to $10,500 (from $2,500 to $5,250 in the case of a separate return filed by a married individual) for 2021. This relief is only available for calendar year 2021; however, it also implies that an employee could elect to increase their DCAP election to the newly available $10,500 limit for 2021 (based on the relief in Notice 2021-15).  A DCAP must be amended by the end of the 2021 plan year to take advantage of the increased exclusion limit.

Temporary Premium Tax Credit Enhancements

The Affordable Care Act’s premium tax credit program is significantly enhanced for 2021 and 2022. The existing income limit of 400% of the federal poverty level, after which individuals will no longer qualify for a premium tax credit, is lifted for 2021 and 2022. In addition, the applicable percentage of household income that individuals must pay for Marketplace coverage has been reduced at all income levels.  Special rules also apply to those individuals receiving unemployment compensation during 2021.

MBWL Note: The increased eligibility for premium tax credits makes it ever more important for applicable large employers (ALEs) to offer affordable, minimum value coverage to their full-time employees to avoid potential penalty exposure.

Temporary PTC Percentages Under ARPA
In the case of household income (expressed as a % of poverty line) within the following income tier: The initial premium percentage is— The final premium percentage is—
Up to 150.0% 0% 0%
150% to 200% 0% 2%
200% to 250% 2% 4%
250% to 300% 4% 6%
300% to 400% 6% 8.5%
400% and up 8.5% 8.5%

 

2021 PTC Percentages (Pre-ARPA)
In the case of household income (expressed as a % of poverty line) within the following income tier: The initial premium percentage is— The final premium percentage is—
Up to 133.0% 2.07% 2.07%
133% to 150% 3.10% 4.14%
150% to 200% 4.14% 6.52%
200% to 250% 6.52% 8.33%
250% to 300% 8.33% 9.83%
300% to 400% 9.83% 9.83%
400% and up Ineligible for PTC

COBRA Subsidy

The ARPA provides significant assistance to employees and their families who are eligible for COBRA (or state mini-COBRA) due to an involuntary termination of employment or reduction in hours.  The law provides a 100% subsidy for COBRA premiums from April 1, 2021 through September 30, 2021. The subsidy applies to group health plans other than health FSAs.

Employers who are subject to COBRA under ERISA (private employers) or the PHS Act (state and local governmental employers) are responsible for complying with the COBRA subsidy provisions.  Insurance companies are responsible for complying with the COBRA subsidy provisions for insured group health plans that are not subject to federal COBRA (e.g., when state “mini-COBRA” requirements apply to small plans that are not subject to federal COBRA, or to large group plans after federal COBRA is exhausted).  Additional highlights include:

  • The subsidy applies to an “assistance eligible individual” (AEI) who is any COBRA qualified beneficiary who is eligible for, and elects, COBRA during the period of April 1, 2021 through September 30, 2021, due to an involuntary termination of employment or reduction in hours.  (The reduction in hours is not required to be involuntary.)
  • AEIs must be offered at least a 60-day window within which to elect COBRA coverage.
    • The 60-day period begins April 1, 2021 and ends 60 days after the date the notice is provided to the individual.
    • AEIs include individuals in their COBRA election period, and individuals who would be AEIs but whose COBRA coverage lapsed due to non-payment prior to April 1, 2021.
    • MBWL Note: Many AEIs will still be within their COBRA election period as a result of the Department of Labor’s disaster relief (Notice 2021-01).
  • COBRA coverage elected during the subsidy period will be effective April 1, 2021; employees are not required to elect retroactive to the date of their qualifying event or any other date prior to April 1, 2021, nor are they required to pay outstanding premiums for prior periods of coverage in order to secure subsidized coverage.
  • Employers will be entitled to an advanceable, refundable tax credit against Medicare payroll taxes (1.45%) to pay for coverage during the subsidy period. The DOL will provide forms and instructions for employers to apply for the credit.
    • Additional guidance is expected for multiemployer (union) plans and professional employer organizations (PEOs).
  • The subsidy is available until the first to occur of:
    • the qualified beneficiary becoming eligible for other group health plan coverage (other than coverage consisting only of excepted benefits, such as dental or vision, coverage under a health FSA, or coverage under a qualified small employer health reimbursement arrangement (QSEHRA));
    • the qualified beneficiary becoming eligible for Medicare;
    • the end of the qualified beneficiary’s maximum COBRA duration; or
    • September 30, 2021.
  • Qualified beneficiaries who fail to notify the plan that they are no longer assistance-eligible can be liable for a $250 penalty, which may be waived if the failure was due to reasonable cause and not willful neglect. An intentional failure can result in a penalty of $250 or 110% of the amount of premium assistance received, if greater.
  • Employers may allow currently enrolled AEIs to select new plans.  An individual has 90 days from the date they are notified of the enrollment option to elect a different plan.  This option is available only if:
    • the premium for such different coverage does not exceed the premium for coverage in which such individual was enrolled at the time such qualifying event occurred;
    • the different coverage in which the individual elects to enroll is coverage that is also offered to similarly situated active employees; and
    • the different coverage is not coverage consisting only of excepted benefits, such as dental or vision, coverage under a health FSA, or coverage under a QSEHRA.
  • Required Notices to Individuals
    • General Notice / Notice of Subsidy Availability. Individuals who become eligible to elect COBRA during the subsidy period (April 1, 2021 – September 30, 2021) must be provided a notice that describes the availability of the premium assistance. The notice requirement may be satisfied by amending existing notices or by including a separate attachment. The notice must include:
      • the forms necessary for establishing eligibility for premium assistance;
      • the name, address, and telephone number to contact the plan administrator and any other person maintaining relevant information in connection with such premium assistance;
      • a description of the extended election period;
      • a description of the obligation of the qualified beneficiary to notify the plan when they are no longer eligible for a subsidy and the associated penalty for failure to do so;
      • a description, displayed in a prominent manner, of the right to a subsidized premium and any conditions thereon; and
      • a description of the option to enroll in different coverage if the employer so permits.
    • Notice of Extended Election Period. AEIs must be offered at least a 60-day window within which to elect COBRA coverage.
      • The 60-day period begins April 1, 2021 and ends 60 days after the date the notice is provided to the individual.
      • This includes:
        • individuals terminated on or after April 1, 2021;
        • individuals in their COBRA election period on April 1, 2021 (including any COVID-19-related extensions); and
        • individuals who would be AEIs but whose COBRA coverage lapsed due to non-payment prior to April 1, 2021.
    • Notice of Subsidy Expiration. Informs AEIs that the subsidy period is ending.
    • The notice must disclose that:
      • premium assistance for the individual will expire soon and the date of such expiration;
      • the individual may be eligible for coverage without any premium assistance through COBRA or coverage under a group health plan.
    • The subsidy expiration notice is not required if the subsidy is ending due to the individual becoming eligible for another group health plan or Medicare.
    • This notice must be provided not more than 45 days but no less than 15 days before the premium assistance ends.
    • Model Notices. The DOL must issue model notices of subsidy availability and extended election period within 30 days of enactment, and a model notice of subsidy expiration within 45 days of the law’s enactment.

What Does This Mean For Employers?

Employers and plan sponsors should consider whether they will adopt the extended FFCRA leave provisions and/or use them to incentivize employees to receive a COVID-19 vaccine. They should also ensure their COBRA vendors are prepared to assist in identifying and notifying assistance eligible individuals within 60 days of April 1, 2021.  The DOL also plans to provide outreach consisting of public education and enrollment assistance relating to premium assistance. Their outreach will target employers, group health plan administrators, public assistance programs, States, insurers, and other entities as the DOL deems appropriate. The outreach will include an initial focus on those individuals eligible for an extended election period. We also expect the DOL and other agencies to issue guidance on various issues related to the subsidy in the coming weeks.

About the Author.  This alert was prepared for Alera Group by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on ERISA-governed and non-ERISA-governed retirement and welfare plans, executive compensation and employment law.  Contact Stacy Barrow or Nicole Quinn-Gato at sbarrow@marbarlaw.com or nquinngato@marbarlaw.com.

The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients.  This is not legal advice.  No client-lawyer relationship between you and our lawyers is or may be created by your use of this information.  Rather, the content is intended as a general overview of the subject matter covered.  This agency and Marathas Barrow Weatherhead Lent LLP are not obligated to provide updates on the information presented herein.  Those reading this alert are encouraged to seek direct counsel on legal questions.

© 2021 Marathas Barrow Weatherhead Lent LLP.  All Rights Reserved.

9 Areas of Focus for HR Right Now – Parts 8 and 9

We are wrapping up our thoughts on key issues industry professionals are still up against as a result of the pandemic. We appreciate you taking the time to tune in, and we hope you numbers 1-7 provided some useful insights, or at least reassured you that you’re not alone. Here are our final thoughts (for now), numbers 8 and 9.Remote Corporate Culture

 

  1. Benefits & Culture

No matter where you work, things looked markedly different this year. HR professionals have been tasked with maintaining a culture virtually. Benefits professionals are wondering if what they offer is what is needed. Employees are facing so many challenges that engaging with their organization might be the last thing on their mind – they just want to do their jobs and get by. Some employers are implementing outside-the-box ideas for fringe benefits, such as:

  • Childcare assistance
  • Caregiver benefits
  • Paying for Netflix or other streaming services
  • Money toward grocery delivery
  • Fitness app subscriptions
  • Virtual classes on meditation, cooking, or language learning
  • Sharing recipes
  • Start a virtual book club
  • Anything that can boost mental, physical, social and financial health

In addition, telehealth services are obviously more pertinent than ever, and employers need to be sure they have some sort of telehealth option. If you have employees that aren’t wild about the idea of telehealth, have conversations about why, or share your own experiences.

Another new trend we noticed popping up was that some organizations have taken “flexibility pledges”, where meetings are prohibited during certain hours, employees are encouraged to decline meetings they truly don’t need to attend, etc.

Something that has stuck with me and should stick with employers is that employees will remember what kind of support they received from their company during this time. When the dust settles, that will impact their loyalty. So, whatever you do, do something. Don’t pretend that nothing has changed.

When it comes to leadership, executives and managers need to be talking the talk. If you want to encourage work-life balance, maybe avoid sending emails at 9PM. Schedule calls that all parties take while on a walk outside. Say thank you on a regular basis for all of the hard work being put in.

  1. Beyond COVID

As employers and employees alike get more comfortable with what is more like the “normal” now, versus the “new normal”, it’s important for us to look to the future, one that hopefully does not involve COVID-19. Regardless of any changes made by the Biden administration, the consensus seems to be that we’ve all seen the value and importance of having paid leave options, and we expect this to be more than passing trend. We are starting to see a movement for caregiver leave specifically, and there was discussion around possible changes to the Fair Labor Standards Act (FLSA) to accommodate more flexible work schedules. We definitely expect state leave laws to continue to develop at an increasing rate and to encompass a gamut of areas: sick leave, caregiver leave, paid family and medical leave, parental leave, etc.

While we are still in the thick of the pandemic, there are positive signs ahead – treatments are improving, vaccines being administered, and we’ve figured out to some degree what safe behavior looks like. Once COVID-19 passes, testing and treatment of other viruses, like the flu or strep throat, might change when it comes to the workplace, and you can bet employees will think twice before showing up to work when sick.

 

At the end of the day, employers should remember that, above all else, we need to be extra human right now. This may manifest in different ways depending on the organization, but I hope these reflections on COVID challenges have given you some food for thought, and some ideas to take back to your company.

Understanding the Impacts of Massachusetts’ New Healthcare Law

Massachusetts has long been a leader in the provision of quality, affordable and accessible healthcare. At the beginning of this year, Governor Charlie Baker signed off on ‘Laura’s Law’ which addresses a range of healthcare issues highlighted as a result of the COVID-19 pandemic.Massachusetts Healthcare Law

  • Telehealth: the law mandates equal coverage for virtual visits, including for behavioral health. It also provides a short-term model for how these services should paid. This should provide Massachusetts residents to expanded access to safe, virtual healthcare.
  • COVID-19: Laura’s Law states that treatment and testing for COVID-19 must be covered by insurance companies, including MassHealth. This applies to all inpatient, emergency and cognitive rehab services as well as necessary outpatient services related to the virus. Testing for the asymptomatic is also covered in this provision.
  • Surprise Billing: the new law states that providers must tell patients in advance of anything out-of-network, and Massachusetts plans to recommend a default rate for out-of-network billing later this year.
  • Expansion of Care for MassHealth Members: Laura’s Law eliminates referral requirements so that MassHealth subscribers can access urgent care facilities more easily.
  • Medicaid: under the new legislation, community hospitals will receive two years of enhanced Medicaid reimbursements, a 5% bump in the average monthly Medicaid payment at a collective cost of up to $35 million per year.
  • Scope of Practice: the pandemic necessitated an increase in scope of service for certain healthcare workers to meet the surging demand for care. Under Laura’s Law, this increase in scope will remain permanent for Advanced Practice Nurses and Optometrists.

Lastly, the state is calling for the undergoing of a study to examine the impact of COVID-19 on the healthcare system, especially in Massachusetts.

Governor Baker referenced a silver lining upon rollout of this law, wherein the pandemic garnered the momentum needed for policymakers to support changes, and the collective healthcare experience of Massachusetts residents in 2020 informed the legislation, so it should be effective in addressing the gaps in healthcare that became obvious. We won’t be surprised if other states being to issue similar policies.

11 Essential Pieces of the Stimulus Bill for Employers

The $900 billion COVID-19 relief bill passed by Congress at the end of 2020 is robust and nuanced. It covers a lot of ground, and can be confusing to navigate. As professionals in the insurance and benefits field, we went ahead and summarized the key points most relevant to our clients and colleagues.

 

  1. FFCRA Paid Leave

The COVID-19 pandemic continues and the vaccine is unlikely to be available on a wide-scale basis in the next several months. In light of this, the refundable payroll tax credits for emergency paid sick leave (EPSL) and extended family and medical leave (E-FMLA), which were enacted pursuant to the Families First Coronavirus Response Act, are extended through March 31, 2021.  Notably, only the tax credits are extended, which means compliance with the EPSL or E-FMLA requirements is voluntary for employers after December 31, 2020.

COVID Relief Bill

 

The policy behind this may have been to incentivize employers to continue allowing employees in the middle of FFCRA leave as of January 1, 2021 to finish out, and be paid for, any remaining leave to which they would have otherwise been entitled.  The tax credit is only available for leave that would otherwise satisfy the FFCRA, had it remained in effect, i.e., if employees for whom the employer provides paid leave would otherwise meet the eligibility requirements under the FFCRA and did not use the full amount of EPSL or E-FMLA leave between April 1, 2020 and December 31, 2020.

  1. FSAs and DCAPs

  • Employers offering a Dependent Care Assistance Program (DCAP) or health FSA may allow participants to carry over all unused DCAP and health FSA contributions or benefits remaining at the end of the 2020 plan year to the 2021 plan year.
  • Employers offering a DCAP or health FSA may extend the grace period for using any benefits or contributions remaining at the end of a plan year ending in 202
    0 or 2021 to 12 months after the end of the applicable plan year.
  • Similar to DCAPs, employers offering a health FSA may allow participants who cease participation during the 2020 or 2021 plan year to continue to be
  • reimbursed from any unused benefits through the end of the plan year (and applicable grace period) in which participation ceased.  This is often referred to as a “spend down” provision when included in a traditional DCAP.
  • Employers offering DCAPs may reimburse employees for dependent care expenses for children who turned 13 during the pandemic.  The relief applies to plan years with open enrollments that ended on or before January 31, 2020 (e.g., calendar year 2020 plans).  It also applies for the subsequent plan year (e.g., calendar year 2021 plans
    ) to the extent the employee has a balance at the end of the 2020 plan year after any relief adopted by the employer, such as an extended grace period or carry over.  The relief allows the employer to substitute “age 14” for “age 13” for purposes of determining eligibility for reimbursement of a child’s expenses.  In general, DCAP eligibility ends at age 13, except in cases of mental or physical incapacity.
  • Employers offering a health FSA or DCAP may allow employees to make prospective election changes (subject to annual limitations) to their 2021 contributions without experiencing a change in status event.
  1. Surprise Billing

A hot topic of late, surprise billing will be banned starting in 2022. This includes a ban on the consideration of reimbursement rates by Medicare, Medicaid, CHIP, or TRICARE, as well as a ban on “usual and customary charges” which should prevent providers from suggesting higher rates.

 

More specifically, healthcare consumers won’t get balance bills when they seek emergency care, are transported by air ambulance, or upon receiving nonemergency care at an in-network facility but from an out-of-network physician or laboratory. Instead, they will pay the deductibles and copays outlines in their in-network plans, and the insurer and the provider will use arbitration to come to an agreement on acceptable payments, leaving the patient out of the process. For those without insurance, the secretary of the Department of Health and Human Services will create a provider-patient bill dispute resolution process.

 

  1. Direct Economic Relief

While not quite as generous as the last wave, this $286 billion portion of the latest stimulus bill allows for:

  • Direct payments of $600 for individuals making up to $75,000 per year, and $1,200 for couples making up to $150,000 per year, as well as a $600 payment for each dependent child
  • An additional $300 per week for all workers receiving unemployment benefits will be provided through March 14, 2021
  • An extension of the Pandemic Unemployment Assistance (PUA) program, with expanded coverage to the self-employed, gig workers, and others with nontraditional work engagements
  • The Pandemic Emergency Unemployment Compensation (PEUC) program, giving additional weeks of federally-funded unemployment benefits to individuals who exhaust their regular state benefits
  • An increase in the maximum number of weeks an individual can claim benefits through state employment, the PEUC program, or the PUA program, to 50 weeks

 

  1. Small Business Relief

As the Amazons of the world rake in revenue, small businesses have been left in a tough spot throughout the pandemic. The $325 billion piece of the bill includes the following relief for small businesses:

  • Over $284 billion for first and second forgivable Paycheck Protection Program (PPP) loans
  • Lending options
  • Expanded PPP eligibility for 501(c(6) nonprofits
  • $20 billion in grants for small businesses in low-income communities
  • $3.5 billion worth of continued small business administration (SBA) relief
  • Enhancements for SBA lending
  • $15 billion allocated toward live venues, independent movie theaters, and cultural institutions

 

  1. COVID-19 Testing, Treatment & Prevention

As the US grapples to keep up with the demand for testing and treatment as cases continue to surge, Congress has set aside $69 billion to address this dire situation. This section includes funding for the procurement of vaccines and therapeutics as well as for vaccine distribution. $300 million of this will be reserved for high risk and/or underserved areas. $22 billion will go to states for testing, tracing and mitigation programs. Mental health, support for healthcare providers, and COVID-19 research are all accounted for within this bucket.

  1. Schools

As schools of all types and levels struggle with remote learning and protection from the virus, the bill includes $82 billion to assist, including allowances for states, K-12 schools, and higher education institutions that have been significantly impacted.

  1. Child Care

Child care has become one of the biggest struggles for working parents throughout COVID-19. How can they mind their children at home while doing their jobs? Or, how can child care centers keep children and their families safe? As such, $10 billion has been allocated for the child care sector through the Child Care and Development Block Grant (CCDBG) program. The funds can be used to provide child care assistance to families, as well as to aid child care businesses with their new challenges. Of this, $250 million will be set aside for the Head Start providers for low-income children and families.

 

  1. Coronavirus Relief Fund Extension

The bill includes a provision that extends the availability of funds provided to states and localities by the Coronavirus Relief Fund in the CARES Act from 12/30/20 to 12/31/21.

 

  1. Employee Retention Tax Credit

The bill extends and expands the refundable Employee Retention Tax Credit (ERTC), part of the CARES Act, helping to keep more employees on payroll and more small businesses and nonprofits afloat.

  1. Student Loans

    The student loan provision of the original bill was been extended, so through the end of 2025, employers can make payments toward employees’ student loans – up to $2,500 annually – and have that amount be excluded from workers’ taxable income.

 

 

In addition, the bill expanded the lifetime learning credit, a tax break worth up to $2,000 per return can be used to offset the cost of undergrad, grad, or professional degrees.

There are also two important, miscellaneous tax issues we wanted to mention:

  • You are able to deduct qualifying expenses that exceed 7.5% of adjusted gross income on your federal income tax return, as long as you itemize your return. This is now permanent.
  • Workers whose payroll taxes have been deferred since September now have until 12/31/21 to pay back the government (extended from 4/30/21).

On top of our abbreviated list of must-knows, the bill also includes sections pertaining to Private Mortgage Insurance (PMI), environmental tax credits, broadband, transportation, farming and agriculture, and more. What the bill does not include is state and local aid funding, liability protection from COVID-19 lawsuits, and relief for the restaurant industry, among other areas.

 

If you have questions about what you’ve read or need help bringing your health, benefits, or leave programs up to speed, please get in touch (insight@springgroup.com).