24Jul2017

Should you offer Dental Benefits to your Employees?

2017-07-24

It is relatively inexpensive to include dental benefits in an employer’s benefits plan, and it may help the employer attract and retain highly skilled employees.

Because dental hygiene is associated with overall health, employees with dental plans are often healthier. Employees without dental benefits may postpone or forgo dentist visits in order to save money, and as a result, they can end up with more severe health problems. This may cost an employer more in the long run than if dental benefits were offered.

Various types of dental plans are available. An employer should select one that fits its budget and meets the needs of its employees. Besides traditional dental insurance plans such as managed care and fee-for-service, consumer-driven dental plans—such as dental flexible spending accounts—are becoming more popular.

Employers who are concerned about the cost of offering dental benefits may consider sharing the cost with employees through deductibles, coinsurance and by setting maximum amounts that the company will pay per individual in a specific time period. When designing a dental insurance plan, aim for a plan that is cost-effective and valuable to the company and its employees.

The decision to offer dental benefits is a business decision. Employers should consider their cultures and values as an organization and whether such benefits can help attract and retain valued employees. While dental benefits are an added expense, offering these benefits may save the employer money over time.

11May2017

FAQs on the ACA and COBRA

2017-05-11

ABN

Employee Benefits

Frequently Asked Questions

1. Did the ACA extend the COBRA premium reduction (subsidy)?

No. The ACA did not extend the eligibility time period for the COBRA premium reduction. Eligibility for the subsidy ended on May 31, 2010; however, those individuals who became eligible on or before May 31, 2010, could still receive the full 15 months as long as they remained otherwise eligible.

2. Did the ACA extend the time period individuals can have COBRA beyond 18 months?

No. The ACA did not extend the maximum time periods of continuation coverage provided by COBRA. COBRA establishes required periods of coverage for continuation health benefits. A plan, however, may provide longer periods of coverage beyond those required by COBRA. COBRA beneficiaries generally are eligible for group coverage during a maximum of 18 months for qualifying events due to employment termination or reduction of hours of work.

Certain qualifying events, or a second qualifying event during the initial period of coverage, may allow a beneficiary to receive a maximum of 36 months of coverage.

Individuals who become disabled can extend the 18 month period of continuation coverage for a qualifying event that is a termination of employment or reduction of hours. To qualify for additional months of COBRA continuation coverage, the qualified beneficiary must:

Have a ruling from the Social Security Administration that he or she became disabled within the first 60 days of COBRA continuation coverage (or before); and
Send the plan a copy of the Social Security ruling letter within 60 days of receipt, but prior to expiration of the 18-month period of coverage.

If these requirements are met, the entire family qualifies for an additional 11 months of COBRA coverage.

3. Did the ACA eliminate COBRA?

No. The ACA did not eliminate COBRA or change the COBRA rules.

4. How does the ACA affect an individual’s coverage under a group health plan?

The ACA makes many changes to employee health benefit plans. Some of the changes took effect for the first plan year that began on or after six months after enactment (Sept. 23, 2010)—so, for calendar year plans, Jan. 1, 2011. Many of the ACA’s key reforms (for example, the prohibition on pre-existing condition exclusions for all enrollees) took effect for plan years beginning on or after Jan. 1, 2014.

Source: Department of Labor

5Apr2017

What is Covered as a Preventative Care Service Under the Affordable Care Act (ACA)?

2017-04-05

ABN

Health and Wellness

The Affordable Care Act (ACA) requires non-grandfathered health plans to cover certain preventive health services without imposing cost-sharing requirements for the services.

Prescription Drugs

Under the ACA, all health care plans must cover at least one prescription drug in every class/category of approved medications in the United States. Furthermore, any patient costs for medication must now be applied towards the policy holder’s annual out-of-pocket expenses.

Mental Healthcare

With today’s increased focus on the importance of mental health, insurance plans must now offer coverage for mental and behavioral health services. Specific coverage varies from state to state, with some states requiring a set copay and others placing a cap on the number of approved therapy sessions per patient each year.

Rehabilitative Services

For both short and long-term rehabilitation from injuries and illnesses, the Affordable Care Act now requires insurance companies to provide coverage for therapy needed to help patients recover. This could include anything from medical equipment (canes and wheelchairs) to physical therapy sessions.

Laboratory Services

All preventative screenings, including pap smears for women and prostate exams for men, are now required to be covered under the ACA.

Maternity/Newborn Care

This was one of the major changes under the ACA, as many insurance plans did not offer this type of coverage in the past or if they did, charged more to include it as an additional rider. Today, all plans are required to cover prenatal care, childbirth, and infant care following delivery.

Pediatric Care

In addition to newborn care, children under the age of 19 will also be entitled to teeth cleanings, X-rays, and other basic medical/dental care under the ACA.

Preventative Services

As a result of the ACA, many insurance plans provide coverage for a range of preventative services and may not charge a copayment, deductibles, or coinsurance to patients receiving preventative care. Preventative care includes medical tests, immunizations, screening labs, preventative medications and other services that would prevent disease.

Hospitalization

Insurance companies must now cover hospitalization for serious medical issues under the new law. However, policyholders should review their policies carefully, as they may still be required to meet their annual out-of-pocket maximums before this coverage will kick in.

Emergency Care

In the event of a medical emergency, the ACA mandates you cannot be charged extra for seeing an out-of-network provider and that you no longer need pre-authorization to visit an emergency room.

Outpatient Care

Most plans already provide coverage for outpatient care, but the ACA has made coverage minimums, including network sizes, much more strict.

15Mar2017

The Top 3 Cobra Mistakes

2017-03-15

ABN

Human Resources

Compliance with the complex rules regarding COBRA coverage can be difficult and mistakes can be costly. Penalties for non-compliance can include IRS excise taxes and ERISA statutory fines. See below for some of the most common mistakes benefit administrators make when it comes to COBRA:

1. Bad Timing
In the context of COBRA, paying attention to the timing of providing coverage can be crucial for reducing exposure to COBRA costs and being compliant with the rules. The duration of COBRA coverage is controlled by the COBRA statute. Complying with these rules by providing the length of coverage required is important. At the same time, many plan sponsors want to minimize the likelihood of being responsible for large claims by COBRA QBs by only providing the minimum duration of coverage.

The period of COBRA coverage offered to QBs is known as the “maximum coverage period.” The length of the maximum coverage period depends on the type of qualifying event that has occurred. The maximum coverage period is 18 months for a termination of employment or reduction in hours and 36 months for all other qualifying events. There are situations where the maximum coverage period can be extended or terminated early.

2. No Documentation
No matter how good your COBRA compliance track record is, you can still run into trouble if you can’t prove it. Adequate documentation is important because it brings together all other elements of COBRA administration and compliance. Having thorough and accurate records will help streamline administration and support the plan in the event of a claim.

There are many different areas where documentation can help avoid COBRA compliance issues. For example, a plan’s COBRA notice information and procedures can be documented in the SPD and notice documents themselves, as well as the plan document if necessary. A plan administrator should also keep records of notices sent to and received from participants and QBs. Keeping track of payments received from QBs and made to insurers, as well as the deadlines for payments, will also assist in the proper administration of COBRA coverage.

3. Charging too Much (or not enough)

A health plan may charge COBRA QBs for the cost of providing COBRA coverage. It may require QBs to pay up to 102% of the “applicable premium” for the plan. In the case of a disability extension, it may charge up to 150% of the applicable premium for certain QBs. The applicable premium is the cost to the plan of providing coverage. For insured plans, the applicable premium is usually equal to the insurance premium paid to the insurance carrier. However, the calculation can be more difficult for self-funded plans and can be determined using past costs or an actuarial estimate of future costs. The applicable premium is the total cost to the plan for providing coverage, so it includes both employer- and employee-paid portions and can also include the administrative cost of providing COBRA coverage.

The plan must calculate the COBRA applicable premium in advance for a 12-month “determination period.” The plan can choose any 12-month period to be the determination period, but it must remain consistent every year. The COBRA premium may be changed for a new determination period if the applicable premium changes and there are certain limited situations where the COBRA premium may be changed during the determination period (for example, if the QB changes coverage to another benefit package with a higher applicable premium).

The plan administrator should use caution in calculating the COBRA premium as well as in communicating that premium to QBs. Fixing mistakes that result in over- or undercharging QBs for COBRA premiums can be administratively burdensome and raise COBRA compliance issues.

24Feb2016

Which employees should be paid overtime, and what are some basic rules to go by?

2016-02-24

ABN

Human Resources, Overtime Pay Human Resources

While many employers require that their employees have overtime approved prior to actually working it, if an employee does not receive prior approval, the employer is still required to pay the overtime. The employer may choose to discipline the employee for not following the correct procedure, but the overtime hours must be paid. The Fair Labor Standards Act (FLSA) states that nonexempt employees must be paid time and one-half their regular rate of pay for all hours worked over 40 in a seven-day workweek. Nonexempt employees are defined under the FLSA, and appropriate classification of employees is critical. In accordance with the FLSA, overtime pay may not be calculated over a two-week pay period to allow for more flexible scheduling.

Example: John works full time at Pet Mania and his hourly rate of pay is $8.75. Someone calls in sick on John’s day off, so he works an extra eight hours. For the week, John will be paid for his regular hours (8.75 x 40) as well as for the extra hours he put in (8.75 x 1.5 x 8). Therefore, rather than receiving $350 of pre-tax income for the week, John will receive $455 of pre-tax income because of his overtime pay.

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