Good news abounds for our economy, but a changing business environment equals changes for employers. The low national unemployment rate means that workers have a bit more power in choosing jobs that best suit their needs and desires, and employers must become a bit more competitive in return.
While health insurance and other benefits will always remain at the top of most prospective workers’ wish lists, we’re definitely seeing some changes in those preferences. The one-size-fits-all approach to healthcare plans and wellness programs is increasingly being replaced by a smorgasbord of options. Today’s workers want a menu of options, so that they can keep their current physicians, seek specialized care, engage in specific wellness programs, and essentially structure their benefits plans to best meet their individual needs.
When you’re developing a health and wellness program for your company, consider the following three factors.
Check out the competition. You already know that in business, it’s important to keep your eye on trends. After overall compensation, benefits programs are the second most important important factor to workers looking for new employment. Investigate options offered by similar employers, and seek to keep your benefits program competitive.
Communicate with current and prospective employees. Good leaders know that involving the whole team in important decisions makes everyone happier with the final outcome. Ask employees what health benefits or wellness programs are most important to them, and how you can improve the workplace for everyone.
Offer customizable benefits. The team’s desires might sometimes overshadow the individual’s needs. Offering a customizable menu of health and wellness options is the best way to ensure that each employee is satisfied with their benefits package. And of course, we know that healthy, happy employees are loyal and productive workers.
Some of today’s popular customizable options include:
- Allowing employees to choose specific hospitals or doctors
- Different levels of healthcare plans (with different deductibles and premiums)
- Flexible work options
- Employee family leave
- Life and/or disability insurance
- Employee discounts to local retailers or attractions
- Wearable device allowances
- Health club memberships or onsite gyms
- Identity theft protection
- Financial planning resources
- Pet insurance
Contact us to learn more about customizable health and wellness benefits. We can help you put together a menu of popular options, to appeal to today’s diversified and discerning workforce.
Now that January first has come and gone, you might be getting started on your New Year’s resolutions. But what if you forgot to sign up for a health insurance plan during Open Enrollment? The deadline for coverage beginning January 1 was December 21… So what now? Are you going without health insurance for the next year?
No, you still have a chance to enroll for health insurance. The final deadline is January 15, for coverage that begins February 1. If you hurry, you can still get a health insurance plan in place beginning next month.
Otherwise, if you miss that deadline, then you might be out of luck until Open Enrollment begins in the fall. But under certain conditions, you could qualify for a Special Enrollment period. These conditions include, but are not limited to, these common circumstances:
- You are eligible for Medi-Cal (in this case, you can sign up any time during the year)
- You lose your current health insurance coverage, due to job loss or some other circumstance
- COBRA coverage expires (unless it’s because you didn’t pay your premium)
- You turn 26 years old, and can’t be covered under your parents plan anymore
- Your student health coverage expires
- You move and gain access to new plans
- You are released from prison
- You get married, divorced, or add a child to your family
If you do experience a qualifying event, please remember that you must apply for new coverage within 60 days of the event. Otherwise, you will miss the opportunity, and will have to wait until Open Enrollment begins on October 15 (for coverage beginning January 1, 2020).
What you apply for health insurance coverage, you will supply information related to your family size, income, home address. Based on these factors, you might qualify for a subsidy to help with the cost of your premiums.
If you need help enrolling in a health insurance plan, please contact us right away. We can also help you during the year, if you need to determine whether a situation qualifies you for a Special Enrollment period. If you’ve already enrolled, but know someone who hasn’t, please refer them to us! We can help get them enrolled before the deadline on January 15.
The deadline for sending out 1095 forms to your employees has been extended by roughly 5 weeks.
The new deadline applies to the 2018 Minimum Essential Coverage (Section 6055) and the Large Employer Shared Responsibility (Section 6056) reporting forms. The original deadline, by which forms 1095-B and 1095-C must be provided to employees, was January 31. Now, you have until March 4 to get these forms distributed.
Remember, this extended deadline only applies to the date by which you must send 1095 forms to your employees. You must still file these forms with the IRS by February 28, if you are filing fewer than 250 paper forms, or by April 1 if filing electronically.
If your employees have already filed their taxes before receiving their forms, they won’t be required to amend their returns. However, they should file forms 1095-B or 1095-C in their records, in case they are needed later.
Who is responsible for reporting?
If you have employ fewer than 50 full-time workers and self-fund your health plan, you only need to report the Minimum Essential Coverage for employees covered by the plan (using the 1095-B). Form 1095-B will be completed and mailed out by your insurance provider.
Large employers (more than 50 full-time employees or equivalent) must complete Form 1095-C for all full-time, covered employees and their dependents.
Large employers who self-funded a health plan will use Form 1095-C for all individuals covered under that health plan.
Contact us for more information.
Yes, these regulations can get confusing. If you have any questions about the forms you need to file, please don’t hesitate to contact us. Even with the deadline extension, it is always a good idea to get started early to prevent any missteps.
Healthcare Open Enrollment for individuals is in full swing, as you might already know. However, Open Enrollment for your group benefits might happen now, or at a different time of the year. Regardless of your time frame, watch out for these potential mistakes when it’s time to re-enroll in your group plan.
Forgetting your paperwork. Follow all reporting requirements to the letter; even those who self- fund employee health care must report certain information to the IRS.
Even companies that are not required to offer group health insurance must keep accurate records of hours worked. These records serve as your proof that you are complying with the law.
Offering inconvenient enrollment methods. Some employees are more comfortable with an old-fashioned paper approach, while others need the convenience of an online portal. Allow employees at least two different methods to complete their enrollment, and make sure they know whom to ask for help.
Restricting choices too severely. It can be tempting to pick one group health plan and go with it, for the sake of simplicity. But employees consistently report that health insurance options are more important than ever. Luckily we have ways to allow employees to opt into additional forms of insurance, or programs such as a health savings plan, that most business owners can accommodate within their budgets.
Even if they have to pick up the cost, many employees say that the option to add benefits to their packages will inspire company loyalty. Add-on options keep you competitive as an employer, so be sure to explore everything available to you.
Failing to communicate. Of course, you won’t know which benefits are important to employees, if you don’t ask. Keep the lines of communication open, encouraging employees to make suggestions. Ask questions at company meetings, or poll your employees on their preferences.
Finally, whether you offer group health benefits or not, the Affordable Care Act all companies subject to the Fair Labor Standards Act to communicate with employees regarding health insurance coverage. All employees must be notified regarding their group healthcare plan (or lack thereof) so they can make a decision.
For more information on employer requirements, such as communicating benefit options to employees, give us a call. We can help you sort out your benefits package regardless of when your Open Enrollment period occurs.
Retirement planning advice abounds, and you’ve probably heard or read a variety of theories on this subject. But one rule definitely stands out as solid, practical advice that applies equally to everyone: Save as much as you can.
After all, we’ve never heard of a retiree complaining, “gosh, I saved too much money!”
Not only is saving a powerful step toward planning for a secure future; stashing funds in your 401(k) earns you a valuable tax break each year. Because all contributions up to the annual limit are tax-free, you essentially lower your taxable income for the year. You’re saving for your future, but also saving money right now.
That’s why we were pleased to hear the news that 401(k) contribution limits will increase in 2019. In 2018, you were able to max out your contribution at $18,500. In 2019, that limit will increase to $19,000. This threshold also applies to 403(b) and Governmental Section 457 plans.
For those age 50 and older, you can make an additional “catch-up” contribution to your qualified retirement account each year, in the amount of $6,000. This limit hasn’t changed for 2019, but catch-up contributions still serve as a valuable tool in your last decade or so before retirement. Make sure you’re taking full advantage of this opportunity.
One last note about increasing limits for 2019: The Social Security taxable wage base will jump from $128,700 to $132,300 next year. Yes, that means a bit more of your income could be subject to Social Security taxes. All the more reason to take advantage of those tax savings from your qualified retirement plan!
For more information on contribution limits, or if you have questions about your 401(k) in general, give us a call. If you own a business, we can even help you set up a 401(k) plan for your employees.
Ask people about their financial concerns these days, and you’ll notice that most have something in common: We all tend to worry about the same things! For many of us, the cost of healthcare (particularly rising health insurance premiums) will fall near the top of our priority list. At the same time, you might also hear that retirement is a common concern. The, of course, there are taxes.
What if we told you there might be one way to address all three of these concerns?
With regard to health insurance, many of you face a dilemma: Pay higher premiums for a low-deductible plan, or opt for the lower premiums on a high-deductible plan. The first choice can strain some budgets, while the other leaves you vulnerable to large medical bills before your insurance kicks in to cover the rest.
That’s why health savings accounts (HSAs) are becoming more popular. With this type of account, you can save money to be used toward qualified healthcare expenses. So, you don’t have to worry about meeting your deductible when you have money in the bank. Since the funds roll over from year to year, you can enjoy peace of mind knowing that you’re prepared for this occasion in the future.
What if you never use all of the funds in your account? Don’t worry; that money isn’t lost. You can keep rolling it over all the way into retirement. At that point you can use the funds for certain expenses like Medicare premiums, dental care, vision check-ups and supplies, medications, and more. Essentially, an HSA could actually help you save a bit more for retirement!
At the same time, the money you’re stashing in your HSA can be deducted from your paycheck on a pre-tax basis. That means you lower your overall income tax liability just a bit, and you don’t have to pay taxes on the money you set aside for qualified medical expenses.
As you can see, a health savings account is a way to “kill two birds with one stone” – except, in this case, it’s three birds!
A health savings account is only eligible to certain people who are enrolled in lower-premium, high-deductible healthcare plans. Give us a call to learn more about this money-saving opportunity, and we can help you decide if an HSA is right for you.
As a business owner, Fall will become a busy time for you. As you guide employees through their health insurance enrollment choices, remember that this task is more than a courtesy. You are required by law to issue certain reminders to them, such as this one regarding Medicare Part D.
Essentially, this notice applies to employees who are eligible for Medicare. If you provide prescription drug coverage to these workers, you must provide notice informing them whether your drug plan is creditable or non-creditable.
“Creditable” means that the prescription plan provided by the employer is equivalent to, or richer than, the level of coverage provided by Medicare Part D. “Non-creditable” mean that your provided plan will offer, on average, less coverage for prescription drugs than Part D would provide.
This is called the Medicare Part D Disclosure Notice, and you must provide it to all Medicare-eligible employees before the Annual Enrollment Period begins on October 15, 2018.
This notice will allow your Medicare-eligible employees the opportunity to evaluate their options, and enroll in Part D prescription drug coverage if they so desire. If these employees do not maintain creditable prescription drug coverage for more than 62 days from their initial Medicare enrollment period, they will be subject to a late enrollment penalty if they later choose to enroll in Part D. This enrollment penalty is permanent, so allowing these employees the opportunity to make this decision is of utmost importance.
Second, if you do provide prescription drug coverage to Medicare-eligible employees, you must submit an online disclosure to the Centers for Medicare and Medicaid Services (CMS) each year, and any time a change in coverage affects creditable status. The deadlines for providing this notice are as follows:
- Within 60 days of the start of the coverage year
- Within 30 days after termination of prescription drug coverage
- Within 30 days after changes in creditable coverage status
If you have further questions about either of these notices, please contact us for more information. We can guide you through the process, and help you evaluate all of your health insurance options as Open Enrollment and the Annual Election Period get underway this Fall.
Silver and Bronze-tier plans often make excellent choices for group health insurance policies. You’re able to offer your employees important healthcare benefits, while keeping your own costs in line with your budget. Unfortunately, some employees might feel less than thrilled with the high deductibles inherent within these plans. Luckily we have several options to help you deal with that problem.
Aflac actually offers a couple different add-on insurance options, that can help your employees manage situations in which high deductibles can become a problem for them.
Hospital Insurance is designed to address some of the costs associated with a hospital stay, which might not be covered by the employee’s primary health insurance policy. Many different conditions, even seemingly common ones, can result in expensive care within a hospital setting. For example, a first-time asthma attack costs an average of $11,285. It’s easy to imagine the financial burden that would befall an employee in the event one of their children develops asthma, a relatively commonplace condition.
Several different types of Hospital Insurance policies are available, and these plans can be customized with add-ons.
Accident Insurance can accomplish a similar goal, but is designed to cover expenses relating to accidental injuries only. These plans even offer additional benefits for injuries sustained while participating in organized sports, making them a great addition to family healthcare plans.
Just consider the average cost of one common injury: A broken leg can trigger $9,300 in medical bills, only part of which will be covered by the patient’s primary health insurance policy. Yet for approximately the cost of a box of adhesive bandages each week, your employees could enjoy the extra coverage of Accident Insurance.
These add-ons can be paid by the employer, or by the employees themselves. Even if your workers pick up the cost, they will be grateful for the opportunity to elect the additional coverage they need.
Give us a call to learn more about programs such as Aflac’s Hospital and Accident Insurance, and we will explain how these extra types of insurance make a perfect complement to higher-deductible Bronze and Silver-tier healthcare plans.
October 15 will arrive more quickly than you might think. That’s the date Medicare opens up their Annual Election Period, during which you can change between one plan to another or add additional coverage. Since the AEP only lasts from October 15 to December 7, you won’t have a lot of time to make a decision about your coverage. That’s why we urge all of our clients to think about these issues now. Review your current coverage and compare plans to see if there might be a better deal for you.
With time running short, you might rush into a decision that isn’t just right for you. So, in addition to researching the Medicare plans available to you, we urge you to watch out for these mistakes.
Don’t base your decision solely on premiums. It’s tempting to go with the lowest price. But because Medicare Advantage plans can vary, with different deductibles and even offering different types of coverage, it would be wise to consider whether paying just a bit more per month would actually be the better deal in the long run.
Don’t overlook plan benefits. Not all plans are created equally. Some offer benefits that might or might not appeal to you specifically. Check the coverage details carefully, to see if your plan offers coverage for services you need and value, and whether additional benefits are offered (like a fitness membership, for example). Another plan might be a better fit for your health needs and personal priorities.
Don’t overlook Medicare Supplement Insurance (Medigap). This policy can cover your out of pocket expenses for Medicare Parts A and B plans, like co-pays and deductibles. Medigap can be a good idea for those who anticipate frequent medical care. If you’re accepted now, your Medigap provider can’t charge you more when you develop a serious or expensive health condition.
Don’t forget about prescription (Part D) coverage. Premiums for this type of coverage are calculated based on how long you were eligible, but did not enroll. In other words, if you delay enrolling in Part D, your premiums will be higher when you decide to enroll later. Consider carefully whether you anticipate the need for drug coverage in the future.
Don’t miss the deadline. If you don’t make a decision by December 7, you will be automatically re-enrolled in your current plan. That means you will miss the opportunity to identify coverage that might actually be a better fit for you, and save you money in 2019. Give us a call if you need help, and we will be happy to assist you in identifying your needs and comparing different Medicare plans.
Beginning in 2022, many employers will face an excise tax on high-cost healthcare plans, commonly called the Cadillac Tax, as a part of the continuing changes rolled out by the Affordable Care Act. Congress has also debated plans to completely eliminate the tax, an idea often touted by President Trump, but so far the tax stands. Employers who want to make changes to avoid the Cadillac Tax are getting started now.
The tax won’t apply to everyone. It was specifically designed to target employer-provided healthcare plans that exceed certain annual thresholds for contributions from both employers and employees. Currently, that threshold remains at $10,200 for individual plans, and $27,500 for family plans, in most situations. Payments above those amounts will be taxed at a rate of 40 percent. However, deductibles and co-pays are not included within these limits.
For certain situations the thresholds will be higher, such as when the majority of employees are engaged in high-risk professions, or for retirees who haven’t reached the age of 65 (Medicare eligibility).
In order to avoid the Cadillac tax, many employers are considering a switch to higher-deductible, lower-premium plans. These plans do assign more responsibility for healthcare costs to the employee, but we have ways of mitigating that situation.
A common option, which has proven effective, is to pair a high-deductible healthcare plan with a tax-exempt health savings account. This pairing keeps costs lower for both employer and employee, while allowing the employee to set aside pre-tax money in a savings account to handle the annual deductible. If the money in that HSA is not used in a particular year, it rolls over to the next year. In fact, unused funds in an HSA can be rolled over all the way to retirement, when the money can then be used for qualified medical expenses.
Employers are also exploring other improvements to reduce overall healthcare costs, such as worksite clinics or tele-health options. In many cases, these cost reductions result in more convenient healthcare for employees; a win-win situation for everyone.
For more information on the Cadillac Tax, and how it will be calculated, give us a call. We can assess your current healthcare expenditure, anticipate future increases, and help you assess your options to keep costs in line with your budget.