Viewing posts from: March 2016

Employer Healthcare Plan Trends for 2016

Posted March 30, 2016 by Megan DiMartino

green arrow in business graphHealth plan cost containment is a popular topic among employers. Employers no longer have the struggle with deciding where to begin to make their health plans more cost effective while also improving the employee’s health. There are ten trends in health care strategies that employers find happening now.

The first trend is the rise in deductibles, which regardless of the type of plan offered, employers continue to increase individual and family deductibles. Individual deductibles rose 40%, and family deductibles rose 17% in a relatively short amount of time.

The second trend is further cost shifting. While deductibles seem to be increasing, employers are offering high-deductible plans to members in exchange for lower cost premiums. High-deductible health plans have grown to be more prevalent in the last couple of years, and the increase in 2016 was minimal.

The third trend is out-of-pocket maximums, and in 2016 they did not change much. Those companies that offered plans with high out-of-pocket costs barely increased.

The fourth trend is plan surcharges. Plans with surcharges increased this year, and most plans included tobacco and spousal coverage surcharges. About 20% of the plans have a tobacco surcharge and another 25% said they want to add a tobacco surcharge. Only 12% said that they had spousal charges, while 30% are going to include them in the future.

The fifth trend is outpatient surgery. Employers are now reducing the copay cost for outpatient surgery to encourage plan members to address surgical matters in advance, while raising copay costs for inpatient stays. Outpatient copay costs decreased at 25%, and inpatient costs increased at 68%.

The sixth trend is emergency room copays. Employers want their members to consider visiting the emergency room as a last resort, and with this comes rising copays at 22%. Urgent care copays have remained untouched.

The seventh trend is prescribing drug copays. Employers struggle to find sweet spots with pharmaceutical cost control regarding specialty drugs. Employers are taking a hit as specialty drugs increased by 50% this year.

The eighth trend is maternity cost control. Employers are now sifting out maternity costs that they do not fully automatically cover under the Patient Protection and Affordable Care Act (PPACA). For in-hospital delivery, the copay increased an average of 35% in 2016.

The ninth trend is telemedicine. There is no potential cost control for telemedicine currently, but employers are going to find out, over time, what controls should be put into place. By 2018, there will be more tele-medical services offered to patients.

The tenth trend is wellness incentives, and employers are slowly by surely finding out which incentives work and which ones do not. Almost half the survey respondents offered at least one wellness plan incentive (ranging from a low of $52 to a high of $1,600) – more proof that there’s still a lot to be learned from trying here.

Source: Benefitspro | 10 employer health plan trends for 2016

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

Proper Treatment for Employer’s Opt-Out Incentives

Posted March 28, 2016 by Megan DiMartino

PPACAQuestions remain about the proper treatment for employer’s opt-out incentives (cash/rewards offered by employers to their employees in exchange for waiving coverage under that employer’s health plan). There are two types of opt-outs: unconditional and conditional. An unconditional opt-out arrangement is an arrangement that provides for a payment that is solely conditioned on an employee declining coverage under an employer’s health plan. A conditional opt-out arrangement is an arrangement that provides for a payment after a meaningful requirement is satisfied; for example, proof of coverage on another plan (such as coverage from a spouse’s employer).

One of the main components of PPACA’s shared responsibility requirements is affordability. An employer can become subject to a penalty if an employee obtains a premium credit from the Marketplace due to the employer’s plan not being affordable or not providing minimum value. Employees are not eligible for premium tax credits for any month that the employee is offered affordable coverage by the employer. Employers also offer incentives to entice employees to waive coverage. These incentives can include (extra) cash to employees. Until recently, there were only a few unofficial IRS comments on opt-out incentives and affordability. Opt-out payment can have an effect on raising employee contributions for health coverage that would exceed the amount of salary reduction contributions.

The IRS expects regulation to require the presence of unconditional opt-out incentives in employee contributions for opt-out arrangements adopted after the date of December 16, 2015. For dates prior to December 16, 2015, the opt-out arrangement will be treated as adopted if: the employer offered the arrangement with regards to any health coverage for plan years including December 16, 2015, if a board committee or authorized officer of an employer adopted the opt-out arrangement prior to December 16, 2015, or if the employer provided written communication to an employee on or prior to December 16, 2015, to indicate that the opt-out arrangement would be offered in the future. Employers who have opt-out arrangements in effect before December 16, 2015, do not have to replicate opt-out incentives in any affordability calculations or include it on the Form 1095-C. Arrangements after December 16, 2015, are required to be included in any affordability calculations as well present on Form 1095-C.

Links: See our prior article on this topic | Opt-Out Payment 180!

Source: ERISA Diagnostics, Inc. | The Impact of Opt-Out Incentives on ACA Affordability Calculations

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

Do You Know the Meaning Behind These Easter Symbols and Traditions?

Posted March 25, 2016 by Megan DiMartino

Easter HeaderOrigin of Easter

Easter derives its name from Eostre, an Anglo-Saxon goddess of spring. Easter always falls between March 22 and April 25 (depending on the phases of the moon), which April had been name “Eostremonat,” or Eostre’s month, leading to “Easter” becoming applied to the Christian holiday that usually took place within the month. Prior to that, the holiday had been called Pasch (Passover), which remains its name in most non-English languages. The Christian holiday has taken on the traditional symbols of the resurrection of Jesus, which emphasizes the triumph of life over death.

Easter Eggs

In Medieval Europe, eggs were forbidden during Lent. Eggs laid during that time were often boiled or otherwise preserved. Eggs were thus a mainstay of Easter meals and a prized Easter gift for children and servants. In addition, eggs have been viewed as symbols of new life and fertility through the ages. It is believed that for this reason many ancient cultures, including the Ancient Egyptians, Persians, and Romans, used eggs during their spring festivals.

  • The first chocolate Easter egg was produced in 1873 by Fry’s. Before this, people would give hollow cardboard eggs filled with gifts.
  • The first Cadbury Easter egg was made in 1875.
  • According to the Guinness Book of World Records, the largest Easter egg ever made debuted in 2011. It was just over 34 feet tall and weighed nearly 16,000 pounds.

Easter Bunny

The inclusion of the hare into Easter customs appears to have originated in Germany, where tales were told of an “Easter hare” who laid eggs for children to find. Stemming from Ostara, the German goddess of springtime, the German’s “Oschter Haws” laid a nest of colored eggs as gifts for good children. German immigrants that came to America – particularly Pennsylvania – brought the tradition with them and spread it to a wider public. Germany has also pioneered the practice of making chocolate bunnies.

  • 90 million chocolate bunnies are made for Easter each year.
  • According to 89% of Americans, chocolate bunnies should be eaten ears first.
  • Chocolate bunnies didn’t go hollow until World War II when a cocoa bean rationing was in force.

Easter Candy

Easter candy has been a more modern addition to the holiday celebrations. The first Easter baskets were designed to give it an appearance of a bird’s nest so they could hold the Easter eggs and gifts. Since then, candy has become a staple of the holiday.

  • More than 120 million pounds of candy are purchased for the holiday each year.
  • 16 billion jelly beans are made each year for Easter.
  • Bethlehem, Pennsylvania-based candy manufacturer Just Born (founded by Russian immigrants Sam Born in 1923) began selling Peeps in the 1950s.
    • Americans buy more than 700 million Marshmallow Peeps each Easter season, making them the most popular non-chocolate Easter candy.

Have a “Hoppy” Easter!

Fact Monster | Easter Symbols and Traditions
The Holiday Spot | Easter Facts and Trivia
Lovefood | Ten Things You Never Knew About Easter Eggs!
Infoplease | Sweet Easter Facts
The Daily Meal | 7 Things You Never Knew About the Easter Bunny
ABC News | 90 Million Chocolate Bunnies and Other Fun Easter Facts
History | Easter Symbols and Traditions

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

IRS Releases Publication 969 and Publication 503

Posted March 18, 2016 by Megan DiMartino

IRS Issues 2015 Version of Publication 969 on HSAs, HRAs, Health FSAs, and MSAs

Publication 969 has been updated for use in preparing 2015 tax returns. This publication provides basic information about HSAs, HRAs, Healthcare FSAs, Archer MSAs, and Medicare Advantage MSAs, including brief descriptions of benefits, eligibility requirements, contribution limits, and distribution issues.

There are only minor changes to the 2015 version. An IRS-reminder contains updated information about the federal tax treatment of same-sex married couples. The HSA contribution limits and HDHP deductibles and out-of-pocket maximums (“OOPmax,” see our timeline that includes the 2017 limits), and the Archer MSA deductibles and out-of-pocket maximums, have all been revised for 2015. Adjusted limits and thresholds for HSAs and HDHPs for 2016 have also been provided (see our chart, linked below). In addition, the publication notes that the limit on Health FSA salary reduction contributions for plan years beginning in 2015 increased to $2,550.

Business people at work in their office

Additional AP Benefit Advisors Links and Resources:

IRS Releases 2015 Publication 503 and Form 2441 for Child and Dependent Care Expenses

The IRS has released the latest versions of Publication 503 and Form 2441 (and its accompanying instructions) for the 2015 tax year. Publication 503 explains the requirements that taxpayers must meet to claim the dependent care tax credit (DCTC) under code §21 for child and dependent care expenses. Taxpayers file Form 2441 with Form 1040 to determine the amount of their available DCTC, and dependent care assistance program (DCAP) participants must file the form with Form 1040 to support the income exclusion for their DCAP reimbursements. The 2015 versions of these items are substantially similar to their 2014 counterparts. If you or your employer offers a Dependent Care Reimbursement Plan then you may be interested in reviewing Publication 503 since it is the same guidance that is applicalbe to the types of dependent care expenses that would be eligible under your plan.

Additional AP Benefit Advisors Links and Resources:

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

Enjoy Some St. Patrick’s Day Facts!

Posted March 17, 2016 by Megan DiMartino

St. Patrick's Day HeaderGreen wasn’t always associated with St. Patrick’s Day. Blue was his hue! That’s right, St. Patrick’s color was a light blue. Green became associated with the day after being linked with the Irish independence movement in the late 18th century.

St. Patrick was British! Although he introduced Christianity to Ireland in the year 432, St. Patrick himself was not Irish. He was born to Roman parents in Scotland or Wales in the late 4th century.

New York may have one of the largest parades on this day (250,000 marchers!), but Chicago paints the town green! Well actually, just the river. The Plumbers Local 110 union dumps 40 pounds of environmentally friendly orange powder into the river which turns green once it hits the water.

The shamrock was originally a teaching tool to explain the Holy Trinity to the pagan Irish – the Father, the Son, and the Holy Spirit, which are separate entities, yet one in the same.

March 17th is the date of St. Patrick’s death (461 AD).

According to legend, St. Patrick drove all the snakes out of Ireland. This most likely did not occur as there is no evidence that snakes have ever existed in Ireland due to the climate being too cold for them to thrive. Scholars suggest that “snakes” metaphorically refer to pagan religious beliefs and practices.

Your odds of finding a four-leaf clover are about 1 in 10,000.

St. Patrick’s Day was a dry holiday from 1903 to 1970, as it was declared a religious observance for the entire country which meant all pubs were shut down for the day. The law was overturned in 1970, when St. Patrick’s Day was reclassified as a national holiday…which is good business for Guinness as 13 million pints of the stout are consumed on this day.

And to clear it up once and for all – it is St. Paddy’s Day, not St. Patty’s Day. Paddy is derived from the Irish, Pádraig, which is a variant of Patrick. Patty is derived from Patricia…so don’t use it unless you’re looking for a real Irish brawl!

Have a happy and safe St. Patrick’s Day!

mental_floss | 15 Delightful Facts About Saint Patrick’s Day
IrishCentral | Top ten facts you never knew about St. Patrick’s Day
Catholic Online | Bet you didn’t know these 10 things about St. Patrick and Ireland!
Chicago Tribune | How the Chicago River is dyed green | How much Guinness do people drink on St. Patrick’s Day?
Paddy Not Patty

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

New SBC Updates from the DOL

Posted March 16, 2016 by PHaynes

PPACA ComplianceOn Friday, March 11, 2016, the DOL, HHS and the Treasury Departments, jointly issued PPACA FAQ  Part 30, which provided the deadline by which health plans and plan issuers will have to use the new SBC (Summary of Benefits and Coverage) template and the other corresponding activity associated with that.

Start Using them on/after April 1, 2017

Beginning with the first open enrollment period that is on or after April 1, 2017 (for coverage that takes effect after that date) the new forms must be used.    [And, for plans and issuers that do not have an annual open enrollment period, the deadline for use of the new template (and corresponding documents) is the first day or the first plan (or individual policy) year beginning on or after April 1, 2017].


The FAQ (Part 30) provided this deadline in response to the Departments’ request for public comments on the revised SBC template that was issued on February 26, 2016.  You will find the updated documents using the first link below.   While the comment period remains open until March 28, 2016, by providing this new “start date” for using the new SBCs, the Departments are signaling a bit more flexibility.  They have promised to issue the final SBC templates quickly after the close of this comment period.

So What’s New?

Proposed changes to the template include:

  • Streamlined content, e.g., removal of Q&A about coverage examples, which reduced the template to 5 pages (SBC limit remains 8 pages/4 double-sided pages)
  • An additional cost example for a foot fracture treated in an emergency room
  • Updated claims/pricing data for the coverage example calculator
  • New minimum essential coverage and minimum value language, as well as new continuation and appeals/grievance rights language
  • Revised language for some sections of the template
  • An updated Uniform Glossary

No Impact on Expatriate Plans

Both U.S. issued fully insured and self-funded expatriate plans are exempt from the SBC requirements. This new template does not impact expatriate plans.


Prior guidance


HRCI Pre-Approved* Crawford Webinar – The Cost of Compliance: How Evidence Based Medicine Adherence Can Reduce Healthcare Spend

Posted March 15, 2016 by Megan DiMartino

Girl in white and falling dollar banknotes. Currency and lottery concept. Young slim woman.

Join AP Benefit Advisors’ Director of Data Analytics, Scott Mayer, for this HRCI Pre-Approved* webinar, and learn how evidence based medicine adherence can reduce healthcare spending. Wellness programs and population health management strategies tout “return on investment” to validate spending on an array of programs. From biometrics, to risk assessments, to weight loss challenges and on-site fitness programs, vendors push theoretical solutions to curb the growing benefits spend.

The key to reducing healthcare spending can be found much more easily and at a lower cost to employers. It all stems from people following best practices for the treatment of their existing health conditions. In this complimentary, one-hour webinar, AP Benefit Advisors will review how much money is saved when individuals follow through with treatment protocols, and discuss ways in which HR departments can educate and incentivize employees to be smarter about their health, and more engaged with their healthcare providers.

Webinar Details:

  • Wednesday, March 23, 2016
  • 1:00 – 2:00pm EDT
  • No Cost to Attend
  • This webinar is open to all HR and Finance Professionals – but not to brokers, agents, TPAs and PEOs.

Register Now Callc Red

*This activity has been approved for 1 (HR(General)) recertification credit hours toward California, GPHR, PHRi, SPHRi, PHR, and SPHR recertification through the HR Certification Institute. The use of this seal is not an endorsement by the HR Certification Institute of the quality of the activity. It means that this activity has met the HR Certification Institute’s criteria to be pre-approved for recertification credit.


For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

DOL Establishes Rule Implementing Paid Sick Leave for Federal Contractors

Posted March 8, 2016 by Megan DiMartino

Recently, the Department of Labor (DOL) issued and established the proposed rule that implements the Executive Order (EO) 13706, which establishes paid sick leave for federal contractors. The DOL estimates that the order will provide paid sick leave to about 828,000 employees of federal contractors as well as 437,000 employees that currently receive no paid sick leave at all. All covered contractors will be required to carry extensive record keeping as well as administrative burdens.

Flu cold or allergy symptom. Closeup of sick young woman girl with fever sneezing in tissue. Health care. Studio shot. Black and white photo.The order will require covered contractors to allow those employees covered to accrue at least one-hour of paid sick leave for every 30 hours that they work with a minimum of 56 hours per year. The covered contracts include service contracts that are covered by the Service Contract Act (SCA), Davis Bacon Act (DBA), concessions contracts, and contracts with federal Government regarding federal property related to offering services to federal employees including their dependents or general public. The new order has set a variety of permissible uses for leave that include preventive care, illnesses, preventive and treatment care for family, seeking/providing assistance for domestic violence, sexual assault, or stalking. The rule adds new or extended requirements that warrant contractor’s attention. This includes interaction with SCA, DBA and other laws, covered employees, carryover/payout/reinstatement, administration of sick leave requests, employee notices, record keeping, conditions of payment, and definitions.

The proposed rule states that contractors are not allowed to count required sick leave as a bona fide fringe benefit under the SCA or DBA. Any sick leave that is provided above the minimum is able to be counted as bona fide fringe benefits. The proposed rule also covers both employees performing services under covered contracts and employees who spend a minimum of 20% of their workweek by performing services of those covered contracts. The rule requires applying the 20% limit on workweek-by-workweek basis. The rule also covers employees that are exempt from overtime and minimum age requirements by the Fair Labor Standards Act (FLSA). The proposed rule now requires contractors to accept employees to carry over accrued sick-leave days year to year, although, the rule makes it accessible for contractors to limit the number to total accrued employee hours available on a one-time basis. In regards to administration of sick leave requests, the rule requires speedy responses to employee’s requests for sick leave. Under the new rule, contractors are required to update employees on accrued sick-leave balances on a rolling basis. The contractors have to provide written notices once a month when employees request sick leave, balance updates, termination of employment, or when sick leave balance is reinstated.

Regarding record keeping, contractors are required to retain wage and timekeeping records of the following for 3 years after a covered contract: copies of all hours notices, copies of leave requests, written denial copies, and accrued leave balance records. Within the new rule, compliance is now a condition of contract payment. This allows False Claim Act liabilities or other liabilities to be set up for non-compliant contractors. Various provisions were added within the proposed rule that expands the order’s provisions for circumstances that the employees can utilize sick leave, how their leave requests can be processed, and how records should be kept. The DOL intends for contractors to apply rule requirements in ways not practiced by other federal and state laws or regulations. As an example, employers have to grant sick leave for employees to care for a sick child. The rule defines a child as a biological, adopted, step, or foster child.

Source: Wiley Rein LLP | DOL Proposes Rule Implementing Paid Sick Leave Executive Order

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

Small Business Health Care Tax Credit

Posted March 3, 2016 by Megan DiMartino

IRS-logoThe small business health care tax credit is a component of the Affordable Care Act (ACA). This tax credit can benefit small employers that provide health coverage for their employees. If the employer has fewer than 25 full-time employees, pays an average amount of $51,600 per year in salary, and pays half of the employee’s health insurance premiums, they qualify for the credit.

In order to understand what the tax credit is and how it can affect a small business or a tax-exempt business, here are some additional considerations. The tax-exempt employer-paid premiums credit percentage is 35 compared to 50 percent for employer-paid premiums. Small employers can claim tax credit for two, consecutive, taxable years only that begin in tax year 2014 forward. For the year 2015, credit is phased out when average wages equal $25,800. It is completely phased out when average wages surpass $51,600. The wage phase out gets adjusted yearly regarding inflation. Small employers are usually required to purchase a Qualified Health Plan from the Small Business Health Options Program Marketplace in order to be eligible to claim credit. There is also transition relief (provided from that requirement) available to some small employers. Some small employers may be eligible to claim tax credit regarding tax years before 2014. Those employers who were eligible to claim for years prior to 2014, but did not, should consider if they are still eligible to claim credit.

Source: IRS | Understanding the Small Business Health Care Tax Credit

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

EEO-1 Update and What You Need to Expect

Posted March 1, 2016 by Megan DiMartino

EEOCThe Equal Employment Opportunity Commission (EEOC) wants to collect data on 63 million employees. The White House announced that they are taking action in advancement of equal pay. This means that filling out EEO-1s will become more burdensome.

As a reminder, EEO-1 is a compliance survey that qualifying businesses report their employment data, which is categorized by race and ethnicity, gender, and job category. Private employers and federal contractors that have 100 or more employees have to file the EEO-1 Report.

Beginning in 2017, companies with 100+ employees will have to provide data on the employee’s W-2 earnings and their worked hours. There will be a new proposed EEO-1 form. The EEOC has a plan to use this wage data to measure discrimination complaints, identify pay disparities, and focus on agency investigations. The new requirement will help employers when evaluating their pay practices in order to prevent any pay discrimination and to strengthen the enforcement of federal anti-discrimination laws put in place.

Source: The Employer Handbook by Eric B. Meyer | Those EEO-1s you love to complete are gonna get more complicated

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

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