businessman explaining group health needs

Group Health Coverage Basics for Small Businesses

Offering health insurance to your employees may sound like an overwhelming process — but it doesn’t need to be. Once you’ve identified your business’s needs and know the basics of group health insurance, the rest is easy. So, what do you need to know first?

What’s the difference between group and individual health plans?

According to the U.S. Department of Labor, “A group health plan is an employee welfare benefit plan established or maintained by an employer or by an employee organization (such as a union), or both, that provides medical care for participants or their dependents directly or through insurance, reimbursement, or otherwise.”

In other words, a group health plan is designed to cover a group of employees, but each enrollee has their own plan with benefits – and the plan’s monthly premium is calculated differently than if it were purchased as an individual health plan.

The monthly premium for all health plans is determined by the perceived risk of the carrier in offering coverage. With a group health plan, the group seeking coverage has their risk pooled together as one, which in some cases, may lower the monthly cost.

Unlike individual plans, group health plans are also available in different types designed to help your business save the most money and make the best coverage decisions. To learn more about these different plan types and ways that your business can save money on group health coverage, feel free to check out this group health webinar.

As a business owner, do I have to offer group health insurance to my employees?

Depending on the size of your business, the answer could be no. The Affordable Care Act (ACA) stated that businesses with fewer than 50 full-time employees are not legally obligated to provide health insurance to their employees — but many choose to regardless.

Looking for a better benefits package is one of the most common reasons people change jobs. And if your business doesn’t offer a health insurance benefit, it may give current and prospective employees reason to look somewhere else for employment.

If you are federally mandated to offer health insurance to your employees, you will need to ensure you are following the rest of the ACA’s rules and regulations for small businesses.

How to Handle Rising Group Health Costs

When was the last time you thought about your group health insurance and benefits offerings?

Maybe it’s not something you think about every quarter (or even every year) but in today’s economy, employer-based health insurance and benefit packages have never been more important.

The Growing Cost of Group Health Insurance

According to the National Business Group on Health annual survey of nearly 150 of the nation’s largest employers, the cost of worker health benefits is projected to increase by 5% in 2020.

To offset the rising cost of group health insurance premiums, you may be tempted to cut your employee benefit offerings. Don’t.

Providing your employees with a comprehensive benefits package may be pricey, but it could help you to avoid costly turnover in the future. Research shows that there may be a correlation between job satisfaction and good benefits packages.

So, how can you lower your business’s costs without sacrificing coverage?

  1. Level Funding

Exploring level-funded health plans could save you between 10%-15% on your group health insurance costs. The plans are offered by industry-leading providers and boast a nation-wide network of hospitals and doctors that your employees will have access to. The best part of level-funded plans? A return of premium option if your claims costs are lower than expected.

  1. Reference-Based Pricing 

In some cases, referenced-based pricing could save your {business|firm} even more money than with a level-funded plan. These plans bypass the traditional provider network, giving you access to any doctor or hospital in the country, and offer an advocacy team to help you pay the lowest out-of-pocket costs. Typically, medical providers are reimbursed, saving you and your employees thousands of dollars annually. Reference-based pricing puts the control in the hands of the business owners, not the insurance companies.

  1. Health Savings Accounts

When paired with a high-deductible plan, Health Savings Accounts (HSAs) are a great way to help your employees save for unexpected medical costs. Since becoming available, these plans have expanded in popularity and surpassed 25 million accounts. Furthermore, according to Denevir’s 2019 Year-End HSA Research Report, the number of HSA accounts continues to grow 13% each year.

employee benefits book on a wooden desk with glasses succulent coffee and notebooks

Trending Employee Benefits That Companies Should Be Aware Of

The U.S. unemployment rate is now at its lowest levels since 1969. This strengthening of the American job market has given many workers the confidence to reassess their employment situations in a way that they may not have felt comfortable doing ten years ago.

Employers are realizing that it is becoming harder to attract top talent and keep them. Previous benefits packages such as PTO and 401(k) offerings don’t seem to be enough anymore. So many businesses are now tasked with developing new ways to find and retain good staff.

While a comfortable salary is nice, a growing number of workers are placing a higher value on voluntary benefits. According to the Organization for Economic Co-operation and Development (OECD), the United States ranks 7th in the world for Countries With the Worst Work-Life Balance. So the more companies do to make their employees’ lives easier outside of the workplace, the more appealing and valuable those jobs become.

These are some of the most sought-after benefits right now:

Identity Theft Protection

According to Javelin’s 2019 Identity Fraud Study, over 14.4 million people fell victim to identity fraud in 2018 and over 23 percent of victims were not reimbursed for personal expenses. As technology continues to evolve, protecting your identity has never been more important. With new reports of data hacks every month, it’s at the forefront of many minds. Offering identity-theft protection could give employees an invaluable benefit: peace of mind.

Student Loan Refinancing

At the start of 2019, over 44 million U.S. citizens owed more than $1.56 trillion in student loan debt – signaling the highest amount ever recorded. According to Forbes, “Student loan debt is now the second highest consumer debt category – behind only mortgage debt – and higher than both credit cards and auto loans.” For the majority, this level of debt will continue to weigh them down for decades making this a crisis that impacts more than just recent college graduates.

This has led many businesses to begin offering student loan benefits to their employees in the form of refinancing options – or even help to pay down some of their debt (usually a set amount over a period of years). Some businesses who have implemented this approach have seen increased employee retention rates.

Wellness

Providing your employees with the tools they need to maintain their overall physical health can benefit not only them but your business as well. As a result, many employers are choosing to invest in everything from gym memberships to telemedicine options for their employees.

While exercise is a great way to relieve stress and improve overall cognitive abilities such as learning and concentration, sometimes that isn’t enough to fight off common depression and anxiety symptoms.

Roughly 1 million workers are absent from their jobs every day because of stress. According to The American Institute of Stress, “Unanticipated absenteeism is estimated to cost American companies $602.00/worker/year and the price tag for large employers could approach $3.5 million annually.”

Improving the access and affordability of mental health services is something that could greatly benefit businesses and employees alike. Many telemedicine services, such as Teladoc, have ventured into the realm of mental health counseling. This gives employees an additional benefit while allowing them to access crucial mental and physical health services wherever and whenever they need.

business leaders discuss group health insurance options

Making the Most of Your Group Health Care Benefits

Have you recently enrolled or been offered enrollment in a group health care plan through your employer? If so, this can be a great way to enjoy benefits for yourself and your loved ones. Of course, when enrolling in group healthcare (or any health care plan, for that matter), making sure you’re making the most of your benefits is a must. By following a few steps, you can make that happen.

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professional sitting behind desk conducting HR self-assessment guide

HR Self-Assessment Guide

The HR Self-Assessment Guide is composed of six modules. Each HR assessment section may be taken independently of the others, and is separately graded. You may take each module as many times as you like. Once you complete a module, your score will be calculated and displayed along with explanations for the answers in that module. Your scores are not stored in a database, so please print the results page for each module if you need it for future reference.  The six modules comprising the Guide are listed below:

  1. HR Management Practices
  2. Employee Classification, Compensation and Benefits
  3. Employee Relations
  4. Recruitment and Selection
  5. Safety, Health and Security
  6. Training and Development

Please follow the instructions below as you answer the questions:

  • Please answer all questions unless otherwise instructed. In some cases, selecting an answer will require you to skip some of the subsequent questions. If you inadvertently make an entry in a question that should be skipped, your response will not be considered.
  • Keep in mind that the questions apply to company-wide human resources practices.
  • Some questions may require internal research to arrive at an accurate answer. As much as possible, base your answers on a review of documentation maintained by your company.

Click to get started.

young female professional sitting at a desk wearing a headset

HR Compliance Quick-Check

Whether your company has 5 or 500 employees, it’s important to conduct a regular review of your HR and benefits-related notices, records and procedures to ensure compliance with the law and prevent potential liabilities and employee lawsuits. The checklist below features key steps for evaluating your management practices to help keep your company HR compliant.

Hiring

  • Job descriptions, advertisements, and interviews are ADA compliant and meet state requirements.
  • Review employment applications for compliance with any applicable state laws regarding prohibited questions or statements that should be included.
  • All interview questions are appropriate and relate directly to the position and the applicant’s ability to perform the job’s essential functions. Questions do not discriminate based on race, sex, religion, age, ethnic group, national origin, marital status, military service, disability or other protected status.
  • Written authorization is obtained for background checks and Fair Credit Reporting Act requirements are satisfied, along with any state requirements for conducting background checks.
  • Policies and procedures related to drug testing, use of arrest and conviction records, and other candidate-information requests comply with applicable federal and state law.
  • Evaluate all recruitment and hiring strategies, policies, and procedures to ensure compliance with federal and state nondiscrimination laws.
  • Job offer letters are reviewed by an HR specialist or employment law attorney and include a statement regarding employment at-will.
  • Forms I-9 are completed for all new employees within 3 business days from the first day of work for pay.
  • New hire reporting requirements are satisfied and necessary tax forms (Form W-4 and any required state forms) are collected from new employees.
  • Review your orientation/onboarding program for welcoming new employees and familiarizing them with the company’s basic management practices.

Employee Pay

  • Employees are properly classified as exempt or non-exempt based on their specific job duties and compensation. (Note: Job titles alone do not determine an employee’s exempt or non-exempt status.)
  • Review all pay practices, including minimum wage and overtime compensation, for compliance with the Fair Labor Standards Act and any state laws that are more favorable to employees.
  • Employee pay periods (weekly, bi-weekly, semi-monthly) are scheduled in accordance with state wage payment timing requirements.
  • Pay and incentive programs treat employees equitably, and decisions regarding promotions and merit raises are based on clear, objective criteria.
  • Independent contractor relationships are carefully reviewed to prevent misclassification.

Benefits

  • Employee benefit plans (medical and retirement) comply with all requirements under federal and state law, including new Health Care Reform notices and other requirements for group health plans.
  • Review all plan documents, including enrollment forms and employee communications, to ensure they are accurate, consistent, and in compliance with applicable law.
  • Summary plan descriptions (SPDs) and other benefit plan notices are distributed to employees as required under federal and state law.
  • All reporting and filing requirements related to medical and retirement benefits are satisfied.
  • Employees are provided required notices regarding continuation of health coverage under COBRA or state “mini-COBRA” laws (if your company is subject to those requirements), and all obligations with respect to continuation coverage are fulfilled.
  • Review policies and procedures relating to paid vacation, holiday and sick leave (including compliance with FMLA or similar state laws that may apply to your company) on a regular basis, along with other benefits offered such as flex-time and telecommuting.
  • Information regarding benefits is clearly communicated to employees, and policies and procedures related to benefits are applied fairly and consistently.

Employee Policies & Procedures

  • All company policies and procedures comply with federal and state labor laws related to employee leave, equal employment opportunity, sexual harassment, worker safety and other requirements.
  • Every employee is provided with a handbook explaining the company’s policies and procedures related to standards of conduct, nondiscrimination, benefits and other terms and conditions of employment. (Be sure the employee signs a receipt acknowledging that he or she has reviewed the handbook.)
  • Labor law posters required to be displayed under federal and state law are posted where employees can easily see them.
  • Procedures are in place for maintaining employee records and files as required by law, including what information should be collected, confidentiality, and how long to keep records. Medical records and other confidential documents are kept in a separate file from the employee’s personnel file.
  • Employees receive necessary skills and regulatory training, including safety and sexual harassment.
  • Human resources policies and procedures apply equally to all employees, and are applied fairly and consistently throughout the company.

Performance Reviews

  • Performance reviews are conducted for all employees on a regular basis.
  • Job expectations and responsibilities are clearly communicated to employees, including the conduct and results required and the performance standards by which they will be measured.
  • Systems for measuring performance are in place (e.g., number of sales or customer satisfaction), based on specific job-related functions and criteria set forth in the employee’s job description.
  • Employee job descriptions are reviewed and updated at least annually.
  • Accurate documentation regarding performance is kept for each employee and documentation is direct, factual, and detail-oriented to support disciplinary or other personnel decisions.
  • Employee performance reviews are based upon specific, job-related criteria and feedback provided is honest, factual and complete.
  • Performance is compared against job descriptions and goals to offer ongoing feedback.
  • The review process and systems for measuring performance treat employees equitably.

Employee Discipline & Termination

  • All policies and procedures for handling employee disciplinary actions and investigations are clearly defined, written, and communicated to employees as appropriate.
  • All matters involving employee discipline warnings, investigations, and terminations are carefully and accurately documented, and related notices are reviewed on a regular basis.
  • Termination meetings are conducted to inform the employee of the termination, discuss the return of company property, deliver the final paycheck, and facilitate the employee’s departure. A summary of the meeting and any related information is prepared and placed in the employee’s personnel file.
  • Departing employees are provided with a written summary of accrued benefits and notices regarding post-termination benefits, including, where applicable, compensation for vacation and sick time, continuation of health coverage, severance pay and 401(k) plan information. Be sure to comply with any applicable federal or state requirements.
  • Policies are in place for collecting keys and other company property from the terminated employee and confirming that access to computer systems, email, and voicemail are deactivated.
  • Final paychecks are delivered at the time of termination or as otherwise required by state law.
  • Neutral references confirming a former employee’s position held and dates of employment are available upon request in accordance with company policy.
  • Review all discipline, investigation, and termination procedures for compliance with applicable federal and state laws and enforce them fairly and consistently.

Please note that the above list is not all-inclusive. If an HR assessment reveals violations that are not subsequently corrected, your company could be at risk for costly fines or lawsuits.  If you have any questions regarding your obligations under the law or about best practices when it comes to HR compliance, please consult with a knowledgeable employment law attorney for individualized guidance.

Supervisor having a tough conversation with an employee regarding discipline and termination

Introduction to Discipline and Termination

Terminating an employee, whether for misconduct or a reduction in force, is never a pleasant task.  However, at times it is a necessary part of managing a workforce.  Voluntary termination by an employee through resignation or retirement may not carry the negative stigma of an involuntary termination, but it does trigger certain responsibilities for the employer.

Involuntary Termination

Each step in the process of terminating an employee should be carefully executed.  Each step must be carefully and thoroughly documented.  If an employee is discharged for poor performance and later sues alleging discrimination, the employer will have a difficult time defending if the personnel file is devoid of any documentation of the poor performance over a reasonable period of time.

Note: Terminating an employee is a very sensitive matter, requiring careful communication and documentation to avoid potential lawsuits or other future problems. It is prudent to consult an employment law attorney or HR specialist before taking any specific steps should the need to terminate an employee arise.

Although “at will” employment is common to virtually all states, employees do have substantial statutory protection as well as remedies found in judicially recognized exceptions to the at will employment rule.

Statutory Protections

  • Federal law prohibits any adverse employment action based on race, color, sex (including pregnancy and certain protections for lesbian, gay, bisexual, and transgender (LGBT) individuals), age, national origin, disability, military service or genetic information.
  • Federal law further prohibits adverse employment action because an employee:
    • Participates in an investigation or proceeding related to a claim of discrimination, or opposes discriminatory conduct.
    • Reports violations of wage and hour laws, such as minimum wage and overtime.
    • Reports workplace safety violations under the Occupational Safety and Health Act.
  • State and local laws often prohibit discrimination based upon such factors as marital status as well as the factors contained in the federal legislation.
  • Employees of employers with more than 50 employees have the right to leave under the Family and Medical Leave Act.  Some states provide such protection as well, often covering smaller employees.  Many states also provide job-protected military leave.
  • Voting leave under state law.
  • Jury and witness leave under state law.
  • Terminations which may be construed to be implemented to avoid payment of benefits under a plan covered by ERISA.
  • COBRA continuation coverage of group health care benefits or state “mini-COBRA” benefits.
  • The right to notice by larger employers of certain mass layoffs under the WARN Act, which requires advance notice to employees terminated as a result of a plant closing or mass layoff.

Although this list is not exhaustive, you can see the need for sound HR practices regarding termination, because there are many potential pitfalls for employers surrounding terminations.

The Termination section covers:

team of professionals going over finances with check book to record

Understanding IRS ‘Pay or Play’ Penalty Letters

Employers Have Opportunity to Respond Before ‘Pay or Play’ Penalty Assessment

The Internal Revenue Service (IRS) is currently issuing Letter 226-J to certain applicable large employers (ALE)—generally those with at least 50 full-time employees, including full-time equivalent employees, on average during the prior year—it believes owe a penalty for failing to comply with the Affordable Care Act’s employer shared responsibility provisions (“pay or play” provisions). In conjunction with Letter 226-J, employers will receive Form 14764, which they can use to respond to Letter 226-J. Employers who submit Form 14764 to the IRS will generally receive one of 4 letters back:

  • Letter 227-J, which acknowledges receipt of Form 14764 and the employer’s agreement to pay the penalty;
  • Letter 227-K, which acknowledges receipt of Form 14764 and shows that the penalty has been nullified;
  • Letter 227-L, which acknowledges receipt of Form 14764 and shows that the penalty has been revised; or
  • Letter 227-M, which acknowledges receipt of Form 14764 and shows that the penalty amount did not change.

For more information on IRS “pay or play” penalty letters, click here.

Visit our “Pay or Play” (Employer Shared Responsibility) section for more on pay or play compliance.

 

image of contract, glasses, laptop, and medical tools on table

Form 5500 Filing Deadline for Many Health Plans is July 31

Certain Group Health Plans Required to File

Group health plan administrators are reminded that Form 5500 must be filed with the U.S. Department of Labor (DOL) by the last day of the seventh month after the plan year ends. For calendar-year plans, that due date falls on July 31.

Who Must File Form 5500

In general, all group health plans covered by the Employee Retirement Income Security Act (ERISA) are required to file Form 5500. However, group health plans (whether fully insured, unfunded [meaning its benefits are paid as needed directly from the general assets of the plan sponsor], or a combination of the two) that covered fewer than 100 participants as of the beginning of the plan year are exempt from the Form 5500 filing requirement. For more on the Form 5500 requirement, click here.

How to File Form 5500

Forms 5500 must be filed electronically with the DOL using either the IFILE web-based filing system or an approved vendor’s software.

Visit our ERISA section for more ERISA compliance information.

 

storm clouds overlooking city with lightning

6 Tips for Protecting Your Business Against Natural Disasters

FEMA Guidance on Protecting Company Documents and Equipment

As this week’s severe storms have demonstrated, natural disasters can happen suddenly at any time. It is prudent to take special precautionary steps to protect your company in the event of a natural disaster. The following actions are recommended by the Federal Emergency Management Agency (FEMA):

  1. Protect Business Records. Determine which on-site records, files, and materials are most important to normal business operations; consider their vulnerability to damage during different types of disasters (such as floods and hurricanes) and take steps to protect them (i.e., regularly back up vital electronic files and store copies in a secure off-site location).
  2. Know What Insurance Will Cover. Make sure you are aware of the details of your flood insurance and other hazard insurance policies, specifically which items and contents are covered and under what conditions. Check with your insurance agent if you have questions about any of your policies.
  3. Develop An Emergency Action Plan. Assign disaster mitigation duties to your employees. For example, some employees could be responsible for securing storage bins and others for backing up computer files and delivering copies to a secure location.
  4. Obtain Cost Estimates. Estimate the cost of repairing or replacing each essential piece of equipment in your business. Your estimates will help you assess your vulnerability and focus your efforts.
  5. Maintain Written Inventories. For both insurance and tax purposes, you should maintain written and photographic inventories of all important materials and equipment. The inventory should be stored in a safety deposit box or other secure location.
  6. Perform Building Evaluations. Periodically evaluate the building envelope to make sure that wind and water are not able to penetrate the building. Perform regular maintenance and repairs to maintain the strength of the building envelope.

The cost of these measures will depend on the size and contents of your business, the nature of the potential hazards, and the effort required to ensure proper protection. Click here for additional tips and information.

For guidelines on developing an emergency action plan to protect your employees and business during a disaster, visit our section on Planning for Workplace Emergencies.

 

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