On August 26, 2019, the Departments of Labor (DOL), Health and Human Services (HHS), and Treasury released an FAQ that provides guidance to employers, plan sponsors and health insurance issuers regarding a recent HHS regulation that could be read to require group health plans to treat prescription drug manufacturers’ coupons as employee cost sharing for purposes of the ACA’s out-of-pocket limits, for plan years beginning in 2020. Currently, the ACA’s out-of-pocket limits for plan years beginning in 2019 are $7,900 individual / $15,800 family. The guidance in the FAQ is effective immediately, and provides that the Departments will not initiate enforcement action against a group health plan or issuer if the plan excludes the value of drug manufacturers’ coupons from the ACA’s annual limitation on cost sharing, even in circumstances in which there is no medically appropriate generic equivalent available.
The Departments have determined that HHS will address the interplay between manufacturers’ coupons and out-of-pocket limits in future guidance.
In its 2020 Notice of Benefit and Payment Parameters (2020 NBPP), HHS stated that drug manufacturers’ support to plan participants—in the form of discounts or coupons—“[is] not required to be counted” toward the cost-sharing limit of participants when a generic version is not available. Due to the strong negative inference in the rule (i.e., that coupons should count toward the participant’s out-of-pocket limit if a generic version is not available), the Departments received requests for clarification on whether group health plans and insurers are required to count the coupon or discount toward the annual cost-sharing with plan participants if a generic equivalent is not available.
If read to require a manufacturer’s coupon to count toward the out-of-pocket limit, the most significant complication with the HHS rule is that it could disrupt Health Savings Account (HSA) eligibility for individuals who participate in a High Deductible Health Plan (HDHP). If the drug discounts were to apply before the individual satisfies his or her deductible, it could impact eligibility to contribute to an HSA. In fact, under Q/A-9 of IRS Notice 2004-50, discounts for drugs or coupons from manufacturers or providers should not be counted when determining if an individual has met their minimum annual deductible requirements under an HDHP.
The issue arises due to the possible conflict between the 2020 NBPP and IRS Notice 2004-50. If a group health plan is required to count drug coupons or discounts towards out-
of-pocket limits, the plan would no longer be HSA-qualified because it would not comply with the requirement under Notice 2004-50 to disregard drug discounts and other manufacturers’ and providers’ discounts in determining if the minimum deductible for an HDHP has been satisfied and only allow amounts actually paid by the individual to be taken into account for that purpose.
Due to the potential impact on HSA eligibility and conflict between NBPP 2020 and the IRS Notice, the Departments have concluded that further rulemaking surrounding this issue must occur before enforcement can begin. HHS has decided to undertake the rulemaking in the NBPP for 2021 that will be released next year. Until this rulemaking occurs, the Departments will not initiate enforcement action against group health plans or issuers who exclude the value of drug coupons or discounts from the out-of-pocket limit, including in circumstances in which there is no medically appropriate generic equivalent available.
Impact on Employers
Until further guidance is issued, employers, plan sponsors and health insurance issuers may continue to exclude the value of prescription drug manufacturer coupons from participant cost-sharing under the ACA’s out-of-pocket limit rules, regardless of whether a medically appropriate generic equivalent is available. In 2019, HHS released the proposed 2020 NBPP in January and the final 2020 NBPP in April. A similar schedule is likely to be followed in 2020 for the 2021 NBPP.
It’s often difficult for highly compensated executives to save enough money in a traditional 401(k) plan to maintain their current living standards. Fortunately, companies can offer highly sought-after executives a retirement plan that not only offers a more comfortable retirement but also is a powerful enticement to stay with the company.
A Supplemental Executive Retirement Plan (SERP) is a non-qualified retirement plan for key employees who fall outside Employee Retirement Income Security Act (ERISA) guidelines. The company signs an agreement promising the executive a certain supplemental retirement income based on vesting and other eligibility conditions. In a typical plan arrangement, the company funds the SERP with cash flow, investment funds or cash-value life insurance. The executives have the opportunity to earn benefits equal to 70 percent of the high, three-year average compensation.
The most common way a company funds a SERP is by purchasing a cash-value life insurance policy. The company pays the premiums and is the policy beneficiary, and the policy’s cash value grows tax-deferred. When executives retire, they receive an income paid by the company using the policy’s cash value. If the executive dies before retirement, the company is the beneficiary and can use the benefit as it sees fit.
SERPs are fairly easy to set up. A SERP and insurance policy can be tailored to an executive’s needs, and the benefits accrue to the executive without any tax consequences until an income is paid.
With a cash-value life insurance policy, the value accumulates tax-deferred. When benefits are paid, the executive pays the taxes on the income and the company deducts them as an expense. If the employee quits, the company still has access to the policy’s cash value. The plan usually is structured in a manner that lets the company recover its cost.
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Many parents start saving for college as soon as their children are born. It’s little wonder. Tuition plus room and board costs put college out of reach for many high school graduates.
The College Board’s Trends in College Pricing survey reports that 2018-2019 tuition fees and room and board for a four-year public college are $90,000. Costs for private non-profit colleges are about $200,000. Add in some of the costs NerdWallet says many students forget — like paying for laptops, social activities, study abroad, transportation and extra classes and the importance of starting to save early becomes more imperative. Unfortunately, according to Sallie Mae’s study How America Saves for College, most parents only saved an average of $18,135.
As an employer, you can make your employees’ saving efforts for their children’s educational futures more successful by providing easy access to 529 college savings plans with payroll deduction and matching contributions.
A 529 plan is a tax-advantaged savings plan sponsored by states, state agencies or education and authorized by Section 529 of the Internal Revenue Code. Funds invested in the account grow on a tax-deferred basis and distributions are tax-free when used to pay for qualified expenses at any eligible public, private, two- or four-year college.
There are two types of 529 plans: prepaid tuition plans and education savings plans — although some states only offer one of them.
With a prepaid tuition plan, the account holder purchases units or credits at a participating public/in-state college or university to put toward future tuition and fees.
Prepaid plans are not guaranteed by the federal government, although some state governments guarantee the money paid into the prepaid tuition plans.
An education savings plan is an investment account that can be used to pay for future qualified higher education expenses, such as tuition, mandatory fees and room and board. The funds generally can be used at any U.S. college or university — and some non-U.S. college and universities also qualify. Education savings plans also can be used to pay tuition costs up to $10,000 each year at any public, private or religious elementary or secondary school.
A 529 Plan as an Employee Benefit
An employer-sponsored 529 plan is funded with after-tax money. When choosing a plan, it’s important to review the fees and investment options offered by the employer-sponsored 529 plan before enrolling.
Remember, a 529 account is not just for parents whose children might go to college. Grandparents, aunts and uncles or anyone who wants to help a family save for an education can set up and contribute to a fund. An employee also can set up a personal 529 so they can return to school. Another perk is your employees will have access to their plans even if they leave their job.
Employees should know that if they receive matching contributions to their 529 plan, they will owe federal and state income taxes on the amount contributed. However, there is federal legislation pending that would allow employer 529 plan contributions to be excluded from the employee’s gross income.
Tax Breaks for Matching Contributions
You can offer to tie payroll deductions to an employee-sponsored 529 plan and choose to match a portion of what your employees put into the account to help them reach their goal more quickly.
A new bill introduced in Congress, the 529 Expansion and Modernization Act of 2019 [S. 220], would allow an exclusion from income on federal income tax returns for employer contributions to 529 plans.
Six states already allow companies to earn a state income tax credit or deduction if they offer 529 plans and matching employee plan contributions. These states include Arkansas, Colorado, Illinois, Nevada, Utah and Wisconsin. Nevada, for example, offers companies a 25 percent tax credit for 529 plan contributions with an $800-per-employee tax credit per year.
For help setting up an employer-sponsored 529 plan, please contact us.
Simple safety precautions in the home can prevent needless deaths and injuries and save billions of dollars in costs.
According to the latest annual edition of the National Safety Council’s “Injury Facts” report, in the U.S. in 2017 there were 169,936 preventable deaths and 47.2 million injuries, totaling over $6 billion in costs. Here are 5 of the most common dangers found around the house and how to reduce them:
1 Cooking related fires: 2 out 5 home fires are cooking-related:
• Keep flammables at least 3 feet from the stovetop.
• Never leave your range or cooktop unattended while cooking.
• Clean up any spilled or splattered grease.
• Clean the stovetop after each use.
• Use your oven’s self-cleaning feature at least every 2 or 3 months.
• Keep a fire extinguisher nearby.
2 Electrical fires: Between 2012 and 2016, the average number of home fires per year was 355,400. Many of these fires involved electrical failure.
• Unplug small appliances and electronics when not in use.
• Replace frayed electrical cords.
• Have an electrician repair any loose electrical outlets.
• Replace old heating appliances.
• Replace cloth covered cords.
• Don’t force-fit a three-plug prong into an outlet with only 2 prongs.
3 Clothes Dryer Fires: 2,900 home clothes dryer fires are reported each year and cause an estimated 5 deaths, 100 injuries, and $35 million in property loss.
• Failure to clean the dryer (34 percent) is the leading cause of home clothes dryer fires
• Clean the lint filter each time you use the dryer.
• Clean the vent ductwork once a year.
4 Dishwasher Fires: Approximately 1200 fires per year involve dishwashers.
• Make sure rubber seals around the door are in good shape.
• Even though dishwashers and other electrical appliances have fail-safe switches that are supposed to power down if the device overheats, be wary of leaving your dishwasher running unattended; overnight, for instance.
• Check for product recalls.
5 Carbon Monoxide and Radon Danger: 20,000 emergency room visits occur each year because of unintentional CO poisoning. 21,000 lung cancer deaths occur each year because of radon.
• The main preventive against CO and radon poisoning is to install a battery-operated or battery-backup carbon monoxide detector in the hallway near each separate sleeping area in your home. (As a convenient reminder, replace batteries in the spring and fall when clocks change.)
• Have your furnace checked annually.
• Get your chimney checked and cleaned annually and make sure the damper is open before lighting a fire and until the fire is completely out.
• Never use a generator inside your home, basement or garage or less than 20 feet from any window, door or vent; fatal levels of carbon monoxide can be produced in just minutes, even if doors and windows are open. (National Safety Council)
Alera Group, an independent national insurance brokerage and wealth management firm, today announced its acquisition of Benefit Commerce Group, an award-winning, results-driven employee benefits consulting firm located in Scottsdale, Arizona.
Benefit Commerce Group has had strong growth over the past 10 years as a progressive employee benefits consulting firm. The company is a four-time honoree on the Inc. 5000 list of fastest-growing private companies in America. It has also been named one of the region’s Healthiest Employers annually since 2014 and a Best Places to Work each year since 2015.
“Benefit Commerce Group, led by Scott Wood and a tremendous leadership team, is an outstanding firm, recognized throughout the industry for their expertise and commitment to excellence. We are proud to welcome them to Alera Group,” said Alan Levitz, CEO of Alera Group. “The consistent growth achieved by BCG demonstrates the power of teamwork and will dovetail nicely with Alera Group’s culture of collaboration.
“We are excited and proud to be joining Alera Group,” said Scott M. Wood, Principal and CEO of Benefit Commerce Group. “Becoming an Alera Group company is an excellent step for our continued growth. Through the top-notch resources of Alera Group, we will continue the quality service and support we provide to our clients, now fueled by the power of national collaboration.”
All Benefit Commerce Group employees will continue operating out of the firm’s existing locations under the name Benefit Commerce Group, an Alera Group Company, LLC. Terms of the transaction were not disclosed.
About Alera Group
Based in Deerfield, IL, Alera Group’s over 1,700 employees serve thousands of clients nationally in employee benefits, property and casualty, risk management and wealth management. Alera Group is the 15th largest independent insurance agency in the country. For more information, visit www.jmjwebconsulting.com or follow Alera Group on Twitter: @AleraGroupUS
About Benefit Commerce Group
Benefit Commerce Group is a progressive and results-driven employee benefits consulting firm, committed to making life easier and better for HR teams. The firm strives to help their clients control employee benefit costs through sustainable strategies that yield real savings. Benefit Commerce Group has been recognized as an Inc. 5000 listing every year since 2015, a four-time honoree among the fastest growing private companies in America. For more information on Benefit Commerce Group, call (480) 515-5010 or visit www.benefitcommerce.com.
Alera Group: Rob Lieblein, Chief Development Officer, 717-329-2451,
Benefit Commerce Group: Nancy Zalud, Director, Communications, 480-565-7924
Employers can help control their health care coverage costs and improve employees’ care by addressing a key lifestyle risk — obesity.
Obesity is a sensitive topic, but is one that must be addressed. “The State of Obesity 2018 Report,” collaboration by Trust for America’s Health and the Robert Wood Johnson Foundation, found that almost 40 percent of adults nationally meet the criteria for obesity — a body mass index of 30 or greater.
The effects of obesity can be devastating. Obesity is a key factor in rising health care costs, disease, disability and reduced length and quality of life. Obesity also costs employers money through absenteeism, lost productivity, safety and health care costs. A report by professors at Cornell University and Lehigh University found that U.S. national medical expenditures devoted to treating adult obesity-related illness rose from 6.13 percent in 2001 to 7.91 percent in 2015.
Employers — who have access to 151 million employees between the ages of 18 and 65 (U.S. Bureau of Labor Statistics, 2016) — have the opportunity to control medical claim costs. These costs are driven by the demand for care by diabetes, heart disease, sleep apnea, depression, back and knee problems. Employer-sponsored programs and practices aimed at helping employees lose weight and make healthier choices can slow the obesity epidemic. According to a report by Thaler and Sunstein in 2008, workplace changes, such as offering fresh snacks, can be a very effective method to reduce obesity.
Population Health Management
Workplace influences can contribute to obesity. The American College of Occupational and Environmental Medicine (ACOEM) says that work may be a contributing factor to obesity. Risk factors include social stressors, psychosocial work factors, working hours, sleep and night shift work and sedentary behavior. Employers can help reduce risks by offering benefits and programs aimed at helping employees choose healthful lifestyles.
The Centers for Disease Control and Prevention and ACOEM found that the effectiveness of these obesity prevention and control programs depends on the intensity of program effort and the use of a variety of interventions. In short, the most successful programs are implemented as a campaign.
Campaigns can include:
• Offering health benefit coverage that includes lower premiums for employees who complete a health risk assessment and a recommended health-coaching activity, reimbursement for consultations with a registered dietician and cash or point rewards for regular physical activity.
• Onsite support for healthy activities, such as healthy dining and vending options; open stairwells, walking paths and signage marking distances and recommending physical activities; break rooms with stretching equipment; and free filtered water.
• Fostering a culture that supports positive changes by providing health and wellness programs or competitions.
• Implementing programs that also support employees’ families health by making healthy dinners-to-go available in the employee café; and expanding access to company fitness facilities to employees’ family members.
• Offering insurance coverage and access to bariatric surgery. ACOEM experts say that research shows obesity medications and bariatric surgery effectively cut medical costs in the long term.
The bottom line is to determine what you can do based on your resources. Take advantage of what you already have, like access to a health professional or space for fitness classes. Talk to your broker about the benefits and wellness programs offered by various carriers to find one that best fits your needs.
Alera Group, a leading national insurance firm, today announced its acquisition of Comprehensive Benefit Administrators (CBA), effective August 1, 2019. Terms of the transaction were not disclosed.
CBA, located in Norwell, Massachusetts, creates benefits programs that are focused on exceeding client expectations while minimizing costs. Their expertise in brokerage services, claims administration and enrollment allows them to design tailored benefit plans that deliver measurable results for their clients.
“We are excited to welcome Comprehensive Benefit Administrators to the Alera Group team, expanding our presence and expertise in New England,” said Alan Levitz, CEO of Alera Group. “Mike McKenna and the CBA team’s professionalism and industry expertise is an exciting enhancement of our existing solutions as we continue to enhance the client experience throughout the region and nationally.”
“Becoming an Alera Group company is a fantastic step for our firm as we continue to serve our clients with excellence,” said Michael McKenna, President of CBA. “We look forward to offering national resources to our clients alongside our powerful local relationships.”
All CBA employees will continue operating out of the firm’s existing locations under the name Comprehensive Benefit Administrators, an Alera Group Company, LLC.
Alera Group was formed in early 2017 and is one of the nation’s foremost independent insurance agencies. For more information on partnering with Alera Group, visit Partner With Us at www.jmjwebconsulting.com.
About Alera Group
Based in Deerfield, IL, Alera Group’s over 1,700 employees serve thousands of clients nationally in employee benefits, property and casualty, risk management and wealth management. Alera Group is the 15th largest privately held firm in the country. For more information, visit www.jmjwebconsulting.com or follow Alera Group on Twitter: @AleraGroupUS.
Rob Lieblein, Chief Development Officer
Jessica Tiller, Weiss PR
The need for home health care aids is expected to increase more than 1.3 million by 2020.
By 2020, aging Baby Boomers will make up one-third of the U.S. population and one-quarter of workers will be 55 or older. Unfortunately, with age and wisdom, also come physical ailments. America now is faced with the challenge of figuring out how to find the resources to care for 76 million senior citizens.
One solution being looked at closely is home-based care. Home-based care provides individuals the assistance they need when they want to live at home but require more health care and services than family members are able to provide. Observers say home health care is most effective when it’s used for prevention, as opposed to treating chronic disease. For instance, if someone is recovering from surgery, they might need nursing care on a short-, medium- or long-term basis. Or, they just might need help with basic tasks during the day while a family member is at work.
According to the Bureau of Labor Statistics, the number of home health agencies and personal care aides in this country will increase by more than 1.3 million by 2020. That’s a 70 percent increase from 2010.
Home-based care costs run about $30 to $100 per day. Hospital and nursing home care can run 50 times those costs. The savings are obvious and can go a long way to keeping medical and insurance costs down.
But what about the quality of care? The level of care required will determine whether you need someone with or without nursing qualifications. The more experience a home-based caregiver has, the more you’ll pay. Attempting to hire someone who is untrained may very well cost more in the long run if the provider doesn’t know how to lift or move a person properly — which could result in additional surgery or rehabilitation costs. Plus, caregivers often work in an environment not set up for health care and work largely unsupervised.
Many employees are looking for economical ways to save money while still receiving high-quality care. Here are the considerations that go into home-based care.
Levels of Care
First, determine the kind of care required.
• Medical Care – Caregiver should have medical and/or first aid training. The knowledge to provide care that includes reading and understanding vital signs; treating wounds; preventing bedsores, and managing medication is vital.
• Functional Care – Caregiver should have received training from a registered professional, although it does not have to be medical training. Helps with daily functions such as eating, bathing, lifting, dressing and toileting.
• Care – Caregiver should have knowledge of proper care techniques from a professional organization. Medical knowledge is not necessary. Tasks could include assisting with an exercise program or outings or preventing bedsores.
• Comfort and Lifestyle Services – Caregiver does not necessarily need the training to provide services such as companionship; making and taking someone to an appointment; maintaining a clean living area; planning meals; shopping; or reading. Additional Considerations If it’s decided that home-based care is a good solution be aware that there will be a transition period for everyone involved to get used to having a stranger in your home. Also, be prepared to ask the following questions before hiring a caregiver to promote the best outcome for everyone involved:
• What skillset and personality traits does the caregiver need? Ask for written proof of qualifications.
• Will insurance cover home-based care? If so, what information do they need?
• How many hours of care are needed and for how long?
• If working with an agency, will staff members receive supervision? What happens if the home-based caregiver can’t get to work?
• Are you required to sign a fixed-period contract?
For help adding a home health care benefit option to your benefits plan, please contact us.
Cybersecurity insurance can help protect you and your workers’ health and retirement benefit plans.
Group health and retirement benefit plan administrators keep personal information such as social security numbers, dates of birth and email addresses in electronic records. Employees could suffer serious financial or reputation damage if their information was stolen by a cyber thief. Personal information, unlike a credit card account number, cannot be changed by the account owner and can repeatedly be used by criminals to perform actions such as requesting a retirement plan distribution.
Health and retirement benefit plans are governed by the Employee Retirement Income Security Act of 1974 (ERISA). This federal law requires most plan sponsors and administrators to maintain at least minimum standards to protect employees who are members of these plans.
You are a plan sponsor if you have set up a health care or retirement plan, such as a 401(k), for your employees. Plan administrators and sponsors both have the ERISA fiduciary duty to ensure personally identifiable information (PII), protected health information (PHI) and plan assets are protected from cyber threats. Both entities also must show proof that a plan is in place to respond to a data breach and mitigate associated damages.
Questions to Ask:
As a plan sponsor, you should work with your health and retirement plan administrators to evaluate your plans’ overall potential risk. Questions you should ask include:
• Who ultimately is in charge of cybersecurity for the benefit plan?
• Is there a plan in place in case there is a data breach? Who would be the primary responder and what steps would be taken?
• Is a cybersecurity training program available for employees? According to a 2016 Association of Corporate Counsel Foundation report, employee error is the number one reason cited for data security breaches.
• What are the current legal and regulatory concerns?
• What state laws apply if there is a data breach?
Steps to Take:
The ERISA Advisory Council on Employee Welfare and Pension Benefits issued a report titled “Cybersecurity Considerations for Benefit Plans.” It lists effective practices, considerations, and policies to deter cyber theft. They include:
• Create a Strategy – Figure out where you are most at risk and establish procedures for how data should be stored, controlled, accessed and transmitted. You also need to make sure you have a plan for testing and updating technology, training personnel and managing third party risks
• Work Closely With Service Providers – Talk to your plan’s third-party administrator about current data security policies or procedures for passwords, social media use, document retention, and Internet privacy.
Commercial insurance policies provide general liability coverage to protect your business from injury or property damage. However, the policies might not cover cyber risks. Internet security risks vary based on the type of business or industry, therefore policies for cyber risk are more customized than other types of insurance policies and can be based on a variety of factors. These factors include the type of data collected and stored, or how employees and others are able to access data. Cybersecurity insurance can include liability for security or privacy breaches and costs associated with a privacy breach or business interruption.
For help developing a cybersecurity plan for your business, please contact us.