6 Steps to Hurricane Preparedness

Posted on August 31st, 2020

It’s hurricane season and it’s sobering to reflect on the tremendous destruction that hurricanes are capable of. Hurricane Katrina, which struck the nation in August 2005, totaled more than $160 billion in economic damage, the costliest natural disaster hurricane on record.  As noted by the National Hurricane Center, the peak season for hurricanes is late-August through late October. 

Follow these six steps from the Insurance Information Institute (III) to minimize the danger that you and your family may face in the event of a hurricane:

1.   Plan your evacuation route well ahead of time

If you live on the coast or in a mobile home, you may have to evacuate in the event of a major storm.

While you’ll no doubt get instructions from the local government, it’s wise to create your evacuation plan well before a disaster strikes. This way, you can know ahead of time about the nearest shelters, take your pets into account in your plan, make sure to take important papers and make a trial run.

2.   Keep non-perishable emergency supplies on hand

What’s the first thing people do when there’s a hurricane warning? Rush to the stores. That is not one of the six steps. As much as possible, get ahead of the rush and have the following on hand:

  • Extra batteries
  • Candles or lamps with fuel
  • Matches (keep these dry)
  • Materials and tools for emergency home repairs — such as heavy plastic sheeting, plywood, a hammer, etc.
  • Prescription drugs
  • A three-day supply of drinking water
  • Food that you don’t have to refrigerate or cook
  • First-aid supplies
  • A portable NOAA weather radio
  • A wrench and other basic tools
  • A flashlight

If you need to evacuate, you’ll bring these supplies with you. As expirations dates approach (for example, food or batteries), use the items and replenish your emergency stash.

3.   Take an inventory of your personal property

Create a home inventory to help ensure that you have purchased enough insurance to replace your personal possessions. It can also speed the claims process, substantiate losses for income tax purposes and is helpful should you need to apply for disaster aid. In the event that you need to evacuate, be sure your home inventory is among the important documents you take with you.

4.   Review your insurance policies

Make sure you understand your coverage and whether it’s adequate to repair or rebuild your home, if necessary, and to replace your belongings. Call us if you’re in doubt!

Keep in mind that your homeowners' insurance covers the cost of temporary repairs for hurricane damage, as well as reasonable additional living expenses (ALE) over and above your normal living expenses if you have to relocate (such as the extra expense of getting to work or to school if your temporary home is in a different community).

However, your homeowners' policy doesn’t cover flood damage, so you may want to consider looking into flood insurance. If you live by the coast, you may also need a separate policy for protection against wind and wind-blown water damage.

If you have questions about what your current policy will cover or need to augment your current coverage, please call us.

5.   Take steps to protect your home

Hurricane-force winds can turn landscaping materials into missiles that can break windows and doors and much of the property damage associated with hurricanes occurs after the windstorm when rain enters structures through broken windows, doors and openings in the roof.

If you can’t afford to retrofit your home to protect against these possibilities all at once, start to do so in stages:

  • Replace gravel or rock landscaping materials with shredded bark, which is lighter and won’t cause as much harm.
  • Cut weak branches and trees that could fall on your house and keep shrubbery trimmed.
  • Install storm shutters to protect your windows from breakage. Alternately, fit plywood panels to your windows. When a storm approaches you can nail them to your window frames.
  • Make sure exterior doors are hurricane proof and have at least three hinges and a deadbolt lock that is at least one inch long.
  • Sliding glass doors should be made of tempered glass and, during a storm, covered with shutters or plywood. These types of doors are more vulnerable to wind damage than most other doors.
  • Replace old garage doors and tracks with a door that is approved for both wind pressure and impact protection. Wind coming into your home through a hole as large as this poses grave problems for the rest of your home — especially your roof.
  • Seal outside wall openings such as vents, outdoor electrical outlets, garden hose bibs and locations where cables or pipes go through the wall. Use a high-quality urethane-based caulk to prevent water penetration.
  • If you live in a mobile home make sure you know how to secure it against high winds and be sure to review your mobile home insurance policy.
  • If you have a boat on a trailer, know how to anchor the trailer to the ground or house—and review your boat insurance policy.

6.   Personalize your disaster preparedness with a specialized app developed by the III. 

The Know Your Plan™ Mobile App includes preloaded checklists to identify key mitigation and preparation steps or you can use it to create your own lists from scratch. Either method lets you set due dates, chart progress, and include notes, contact lists and other information — and share your checklists with family and friends. 

For more information please contact us at info@aleragroup.com. 

Weekly Wellbeing Resources – August 31

Posted on August 31st, 2020

I hope you all had a wonderful weekend! Below please find this week’s curated list of wellbeing resources. Feel free to share these resources, as appropriate, with your team. Please note, there will be no resources next week due to the holiday.

Have a safe and healthy week!

 

Career Wellbeing

 

Social & Family Wellbeing

 

Financial Wellbeing

 

Physical Wellbeing

 

Emotional Wellbeing

 

Community Wellbeing

 

Employer Focused Wellbeing

  • From Crisis to Resilience & Belonging: A 30-Day Mindfulness Challenge for Your Organization (Oct 1-30, 2020) – This challenge, brought to you by Wisdom Labs and LinkedIn, is designed to help your workplaces face the ongoing crises with greater resilience by learning science-based skills using the Wise@Work app. Over 30 days, participants establish a routine of daily learning and practice designed to create sustainable behavior change. Your organization will receive a Challenge Toolkit full of tips, easy-to-use email templates to support engagement and your organization’s personalized engagement dashboard. FREE.

 

About the Author

Andrea Davis, Director of Wellbeing
Andrea joined Alera Group Northeast (formerly CBP) in July 2013, bringing over 15 years of experience in management consulting and strategic solutions. As the Director of Wellbeing, she is responsible for assisting with the development, implementation and evaluation of comprehensive wellness strategies for existing and prospective Alera Group clients. She provides assistance and support to Alera Group clients by developing personalized programs that fit clients’ unique health management needs, wellness program implementation, committee development, promotion and marketing of their programs to encourage participation. In addition, Andrea conducts program analysis and generates reports related to program participation, health assessment and client utilization. 

Alera Group’s Lisa Allen Invited to Join U.S. Department of Labor’s ERISA Advisory Council

Posted on August 27th, 2020

Allen is Only Expert Chosen to Represent the Insurance Industry

Lisa Allen, Senior Compliance Consultant at Alera Group, has been named to the U.S. Department of Labor’s ERISA Advisory Council in the Insurance category. Her appointment is effective immediately and concludes December 31, 2022.

The ERISA Advisory Council is a federal advisory committee and subject to the Federal Advisory Committee Act (FACA). The Department of Labor cited Allen’s depth and breadth of experience with ERISA as the reason she was selected.

“Lisa’s expertise in tax matters and employee benefit compliance management – two extraordinarily complicated topics – will help shape the federal government’s regulations and rulings going forward,” says Danielle Capilla, Vice President of Compliance, Employee Benefits at Alera Group.

“When the U.S. Department of Labor needed one expert to represent the entire insurance industry, they intentionally invited an Alera Group compliance expert. We are proud that our people and our company are making a significant and noteworthy difference in compliance for employers everywhere,” said Sally Prather, Executive Vice President and Employee Benefits Practice Leader at Alera Group.

Allen – whose credentials include CAPPP, CHRS, CFC, and CAS and who earned the Certificate of Achievement in Public Plan Policy (CAPPP) through the International Foundation of Employee Benefit Plans (IFEBP) – also serves on the IRS Advisory Council’s Tax Exempt and Government Entities (ACT) Sub-Committee. 

Allen brings more than 25 years of employee benefits experience to her role as Alera Group’s legal and regulatory compliance subject matter expert. She manages regulatory updates and client council regarding ERISA, Section 125, the Affordable Care Act, and employee eligibility.

Allen is a frequent speaker for the WNY National Association of Health Underwriters (NAHU), New York State Society for Human Resource Management (SHRM), several area Chambers of Commerce, NAHU, Benefit Advisors Network, (BAN), Employer Council on Flexible Compensation (ECFC), and the International Foundation of Employee Benefits Plans (IFEBP), and the National Assocation of Professional Women, among others.

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About Alera Group

With over 80 locations across the country and more than 2,000 teammates, Alera Group works together to deliver solutions in employee benefits, property and casualty, retirement services and wealth management. Built on a unique model of collaboration, Alera Group is now the 17th largest independent insurance agency in the United States. For more information, visit www.jmjwebconsulting.com.

Mental Health Resources

Posted on August 27th, 2020

Only 43% of adults with mental illness get treatment, and the average delay between symptom onset and treatment for mental illnesses is 11 years. If you want to support your teammates with mental health issues, check out the resources below. 

Mental Health Screening Tools

  • Mental Health America: Leverage available mental health tests to share with your doctor if you might be experiencing a mental health condition.

Stigma-Free Company Resources:

Therapist Resources:

  • Black Female Therapists: Resource guide to help locate a therapist in your area.
  • Dr. Alfiee (Instagram): Follow Dr. Alfiee on Instagram as she is committed to normalizing #mentalhealth in communities of color.
  • Couched in Color Podcast: Weekly podcast by Dr. Alfiee designed to enlighten and encourage dialogue on the mental health needs of youth, young adults, families, and communities of color.  

Mental Health Foundations:

Diversity and Inclusion Resources:

Coronavirus Workplace Mental Health Resources for HR and People leaders:

  • Toolkit and Forbes article: Action-oriented tips and company examples to help managers and leaders support employee mental health during this time.

Creating a Mental Health Employer Resource Group (ERG):

Mindshare Workplace Mental Health Training:

  • Training Solutions: Learn about Mind Share Partners' workplace mental health training solutions including manager series, executive sessions, company-wide training and more.
  • MindShare Partners Free Webinar: Next one on September 10, 2020. This is a recurring webinar series that gives HR, People, Culture, and D&I leaders an introduction to developing a mental health strategy for their company and an opportunity to learn more about Mind Share Partners
  • Mind Share Partners Institute: (Next cohort starts October 1) An online certification program to equip you with the knowledge and skills to create a culture of support for mental health at your organization.

Want to learn more, watch our Reducing Mental Health Stigma in the Workplace Webinar Recording

The Five Ws, and One H of Health Reimbursement Arrangement (HRAs)*

Posted on August 25th, 2020

This is the third article in our Compliance 101 blog series where we use six questions to break down key compliance terms. Below you will learn more about a Health Reimbursement Arrangement, or HRA.

Download this article.

Who may participate in an HRA?   

  • HRAs are only available to common law employees (or former employees).
  • Self-employed individuals, partners in a partnership, and more than 2% shareholders in an S corporation are ineligible to participate on a tax-favored basis.
  • Employers generally may design their HRA to be available to only a specific population within their workforce (e.g. hourly employees) if the restrictions do not favor highly compensated individuals.
  • HRAs may be structured to reimburse qualified 213(d) medical expenses of an employee’s spouse and tax dependents, including children under the age of 27 as of the end of the taxable year.  (Domestic partners who are not a tax dependent under federal tax law are not eligible.)

What is the definition of an HRA?

  • An HRA is an arrangement that:
    • is paid for solely by the employer and not provided pursuant to salary reduction election or otherwise under a § 125 cafeteria plan;
    • reimburses the employee for § 213(d) medical care incurred by the employee and the employee’s spouse and dependents; and
    • is generally considered to be a self-funded group health plan within the meaning of ERISA, the Public Health Service Act (PHS Act) and is subject to the rules applicable to traditional major medical plans (e.g. ERISA, COBRA, HIPAA).

Why would an employer offer an HRA?

  • Help employees lower their out of pocket costs (e.g. copayments, deductibles).
  • May be offered with any type of health coverage, it does not need to be a high deductible health plan (HDHP).
  • Provides a tax advantage to the employer (contributions are tax deductible).
  • Contributions are not included in an employee’s income.
  • Reimbursements to the employee are tax free.
  • Unused balances generally default to the employer.
  • Employers decide how much to contribute & when:       
    • There is no statutory annual limit for a traditional HRA (i.e. an HRA integrated with the group health plan),  Individual Coverage HRA (ICHRA), and retiree-only HRA, therefore the amount an employer can contribute during the coverage period is determined by the employer.
    • The annual limit for an Excepted Benefit HRA (EBHRA) is $1,800 (for 2020) – indexed annually for inflation
    • The annual limit for a Qualified small employer HRA (QSEHRA) is $5,250 for self only coverage, $10,600 for family coverage (for 2020) – indexed annually for inflation. *

Where do employers run into the most compliance issues with HRAs?

  • ACA
    • The Affordable Care Act requires that a Summary of Benefits and Coverage (SBC) describing the HRA benefits be provided to all plan participants for most HRAs. In general, this should be included in the group health plan SBC but there is no one size fits all approach.
    • PCORI fees must be paid before July 31st: 
      • If the plan sponsor also maintains a self-funded medical plan with the same plan year, the medical plan and HRA may be treated as one plan for purposes of the PCORI fee.
      • If the medical plan is fully-insured, the medical plan and HRA must be treated as separate plans for purposes of the PCORI fee with the insurer paying the fee for the medical plan and the employer/plan sponsor paying the fee for the HRA.
    • Traditional HRAs must be integrated with a group health plan and only available to employee’s covered by the group health plan to comply with market reforms.
  • COBRA
    • In general, when an HRA is integrated with the group health plan of an employer subject to COBRA, when the participant loses coverage due to a COBRA qualifying event (e.g. termination of employment) the participant must be provided the opportunity to continue the group health plan and the HRA.
  • ERISA
    • Requires a plan document and summary plan description
    • Annual Form 5500, unless a regulatory exemption applies
  • Health Insurance Portability and Accountability (HIPAA)
    • Employers offering an HRA must have HIPAA privacy policies & procedures in place with rules to safeguard protected health information (PHI).

When may it be challenging to offer an HRA?

  • Employers who offer a High Deducible Heath Plan (HDHP)  
    • A general purpose HRA impacts HSA eligibility (i.e. an employee is ineligible for HSA contributions)
  • Employers who offer a health FSA
    • A medical care expense may not be reimbursed from a health FSA if the expense has been reimbursed or is reimbursable under the HRA.
    • If coverage is provided under both an HRA and health FSA for the same medical care expenses, amounts available under an HRA must be exhausted before reimbursements may be made from the health FSA.
    • However, before the health FSA plan year begins, the plan document for the HRA may specify that coverage for the HRA is available only after expenses exceeding the dollar amount of the FSA have been paid.

How are COBRA premiums determined?   

  • If a qualifying event occurs, each qualified beneficiary has a separate and independent right to elect HRA COBRA coverage. If an individual elects COBRA, the maximum amount of the HRA available for the individual at the time of the COBRA qualifying event must be made available under continuation coverage. Likewise, the HRA amount must be increased at the same time and by the same increment that it is increased for similarly situated non-COBRA beneficiaries (and by decreasing it for claims reimbursed). Premiums are determined under the existing rules in § 4980B. (See our previous blog: The Five Ws, and One H of COBRAHow much can group health plans charge for COBRA?)
  • Employer may charge two COBRA premiums: 1) for the HRA 2) for the medical plan and allow COBRA for each to be elected separately, or they may require the HRA and the insured coverage to be elected together.
  • Information letter 2017-0027 provides IRS guidance that the COBRA applicable premium under an HRA may not be based on a qualified beneficiary’s reimbursement amounts available from the HRA. (e.g. the COBRA rate is not dependent on the balance of the participants HRA and must be determined prior to the 12-month determination period.
  • The IRS has not issued specific guidance on how to determine the applicable premium, only that the cost of COBRA premium HRA may be determined in one of two ways:
    1. Past Cost Method – The rate is determined based on past year's HRA claims history, plus the 2% admin fee. This reflects the cost to the employer of administering the HRA. It is "blended" so it is the same for all HRA qualified beneficiaries regardless of their account balance.
      • For example, if the annual funding is $1,200 but employees only use $600 on average, the monthly COBRA premium is $50 + 2% admin fee.
    2. Actuarial Method –A reasonable estimate of the cost to the employer of administering the HRA is determined on an actuarial basis, generally based on utilization trends, when the past cost method cannot be used (e.g. a brand new HRA and no history, significant changes to the HRA coverage limits).
      • For example, if it is estimated based on the facts and circumstances that on average employees who participate in the HRA will spend 75% of the available $2,000 HRA, or $1,500, the monthly COBRA premium is $125 + 2% admin fee.

NOTE: The IRS has not defined a 'safe harbor' nor max utilization % in the regulations. Rather a reasonable determination must be made based on the facts (e.g. annual limit, type of expenses it covers, and whether it is a traditional or post-deductible HRA)

*As of the publish date of this article, there are 6 different types of HRAs available, each with various requirements and plan design options beyond the scope of this article.  

  1. Traditional HRAs integrated with group health plans
  2. Limited Purpose HRAs – only pay excepted benefits (e.g. limited scope dental, vision coverage),
  3. Retiree-only HRAs – pays for medical expenses after retirement
  4. Qualified Small Employer HRAs (QSEHRAs) – available to employers with less than 50 full-time employees who do not offer a group health plan
  5. Excepted Benefit HRAs (EBHRAs) – for employers of any size who offer a group health plan
  6. Individual Coverage HRAs (ICRAs) – for employers of any size who do not offer a group health plan to the same class of employees

 

Disclaimer: This blog was written by Michelle Turner, MBA, Compliance Consultant, Alera Group Central Region. This blog post intends to provide general information regarding the status of, and/or potential concerns related to, current employer HR & benefits issues. This blog should not be construed as, nor is it intended to provide, legal advice. The opinions expressed herein are based upon the author’s experience as a Compliance Consultant and may not reflect the opinions of your counsel.

The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such. Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice. This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.

This article was last reviewed and up to date as of 08/17/2020

Weekly Wellbeing Resources: Back-to-School Anxiety, HIIT Workouts & Mental Health

Posted on August 24th, 2020

Our Alera Wellbeing Team is extremely grateful to be hosting a panel discussion this week on Reducing Mental Health Stigma in the Workplace with a Focus on Diversity, Equity, and Inclusion.  Our panelists are Kelly Greenwood (CEO of Mind Share Partners), Kerry Graves (Executive Director of NAMI Metro Baltimore) and Charita Cole Brown (author of Defying the Verdict & Mental Health Advocate).  Please join us on Tuesday, August 25th at 2:00 PM ET!  Have a safe and healthy week!

Career Wellbeing

Social & Family Wellbeing

  • 10 Ways to Have a Better Conversation – In this 10-minute TED talk, Celeste Headlee draws upon decades of interview experience as a radio host to deliver 10 powerful rules for having better conversations. Notably, she implores listeners to recall all the past advice they’ve been given – like “smile and nod to show you’re paying attention” – and throw it out the window. Instead, she offers the rules that all great interviewers live by. Even if you only master one of them, she says, you’ll be on your way to becoming a better communicator.
  • Tips for Managing Back-to-School Anxiety – After many months away from the classroom, kids may feel especially anxious about starting the new school year.  Some kids will be undertaking a new round of distance learning and others may face re-entering a classroom that looks very different.  This article details some symptoms to look out for and tips to help manage anxiety.  

Financial Wellbeing

  • Managing Your Finances in the Age of COVID-19 – Making sense of your personal finances can be a daunting task, especially in this time of uncertainty.  This webinar will discuss how to evaluate your current financial situation, a framework for developing your financial goals, and factors to consider when investing.  Wednesday, August 26th at 12pm ET.  RSVP HERE.

Physical Wellbeing

Emotional Wellbeing

Community Wellbeing

Employer Focused Wellbeing

  • Reducing Mental Health Stigma in the Workplace with a Focus on Diversity, Equity, and Inclusion – Our Alera Wellbeing team is hosting a webinar and panel discussion to address what mental health stigma is, how to create a workplace culture that is stigma-free, and examples of employer-led initiatives that are helping to address stigma. We will also be exploring the strong connection between Diversity, Equity, and Inclusion and mental health and why it’s so important for employers to bridge the gap between the two. Our panelists are Kelly Greenwood (CEO of Mind Share Partners), Kerry Graves (Executive Director of NAMI Metro Baltimore) and Charita Cole Brown (author of Defying the Verdict & Mental Health Advocate).  Tuesday, August 25th at 2:00 PM ET. RSVP HERE.

 

About the Author

Andrea Davis, Director of Wellbeing
Andrea joined Alera Group Northeast (formerly CBP) in July 2013, bringing over 15 years of experience in management consulting and strategic solutions. As the Director of Wellbeing, she is responsible for assisting with the development, implementation and evaluation of comprehensive wellness strategies for existing and prospective Alera Group clients. She provides assistance and support to Alera Group clients by developing personalized programs that fit clients’ unique health management needs, wellness program implementation, committee development, promotion and marketing of their programs to encourage participation. In addition, Andrea conducts program analysis and generates reports related to program participation, health assessment and client utilization. 

Alera Group Acquires FNL Insurance Group

Posted on August 20th, 2020

Alera Group, a national employee benefits, property and casualty, retirement services and wealth management firm, announced today that is has acquired FNL Insurance Group.

For over 40 years, FNL Insurance Group has been helping clients with their employee benefit and health care insurance needs. The firm is located in Timonium, Maryland, where they partner with small and mid-sized employers to develop sustainable benefits programs that support employees while keeping costs low.

“We are delighted to welcome Frank Lotman and the FNL Insurance team to Alera Group,” says Alan Levitz, CEO of Alera Group. “As part of our collaborative organization, the FNL Insurance team will help us to continue to elevate the client experience throughout the Baltimore area and the mid-Atlantic region.”

“FNL Insurance Group is very excited to become an Alera Group company,” says Frank Lotman, President of FNL Insurance Group. “We look forward to the expanded resources available to us as part of Alera Group and look forward to continued growth alongside firms throughout the region.”

FNL joins Alera Group through Silberstein Insurance Group (SIG), an Alera Group company. The FNL team will continue serving clients in their existing roles. Terms of the transaction were not disclosed.

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About Alera Group

Based in Deerfield, IL, Alera Group’s over 2,000 employees serve thousands of clients nationally in employee benefits, property and casualty, retirement services 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.

Alera Group Acquires Banasky Insurance Inc.

Posted on August 18th, 2020

P&C Firm Marks Alera Group’s Expansion into Utah

Alera Group, a national employee benefits, property and casualty, retirement services and wealth management firm, announced today that it has acquired Banasky Insurance Inc., effective August 1, 2020.

With locations in Price, Utah, and Draper, Utah, Banasky Insurance creates property & casualty insurance solutions for their clients, including commercial, life & health, and personal lines solutions. With specific expertise in builder’s risk and commercial fleet coverages, the firm offers unique solutions for clients of every size and industry.

“We are thrilled to welcome Banasky Insurance to Alera Group as we add our first Alera Group location in Utah,” said Alan Levitz, CEO of Alera Group. “With more than 60 years of industry experience, the Banasky team, led by Ryan Banasky, has a proven record of organic growth.  Banasky will provide powerful collaboration opportunities for firms throughout the region. We look forward to the continued growth with Ryan and the entire Banasky team as an Alera Group company.”

“Our firm has been supporting clients throughout Utah and the surrounding area for decades. We are excited to take the next step in providing outstanding insurance solutions for our clients by becoming an Alera Group company,” said Ryan Banasky, President of Banasky Insurance. “As part of Alera Group, we will have access to national resources and expertise, expanding our ability to serve clients and grow our business.”

The Banasky Insurance team will continue serving clients in their existing roles. Terms of the transaction were not disclosed.

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About Alera Group

Based in Deerfield, IL, Alera Group’s over 2,000 employees serve thousands of clients nationally in employee benefits, property and casualty, retirement services 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

The Five Ws, and One H of COBRA

Posted on August 17th, 2020

This is the second article in our Compliance 101 blog series! Below you'll learn key components of the Consolidated Omnibus Budget Reconciliation Act, better known as COBRA. 

Download this article.

Who is required to offer COBRA? *

  • All private sector employers with 20 or more employees on at least ½ of their typical business days in the preceding calendar year offering employer-sponsored group health plans  
  • Private sector employers offering a group health plan whose employee count fluctuates above 20 employees during a calendar year, become subject to COBRA on the following first day of January.
  • Private sector employers offering a group health plan whose employee count goes below 20 employees during a calendar year, will continue to offer COBRA through the end of that calendar year. (Existing COBRA participants coverage does not terminate even after the end of the calendar year.)
  • Most state or local governmental employers (e.g. city, county, public schools) must comply with “public sector” COBRA.
  • Churches can be exempt from COBRA.

What does COBRA require?

  • Group health plans must offer temporary continuation coverage to qualified beneficiaries (i.e. individuals covered under the group health plan the day before a COBRA qualifying event occurs, does not include domestic partners) who experience an event which would cause their group health plan coverage to end (e.g. termination of employment, reduction of hours, divorce).
  • Employers (or their COBRA Administrator) must notify qualified beneficiaries of their COBRA rights – there are two primary required notices:
    • General (initial) notice: within 90 days of health plan coverage enrollment
    • Election notice: within 45 days upon a qualifying event occurring
  • Each qualified beneficiary has the option to independently elect and maintain COBRA for the coverage in effect at the time of the qualifying event.  Domestic partners are not qualified beneficiaries, therefore, in general do not have independent COBRA election rights.
  • Qualified beneficiaries have the same rights under the plan as similarly situated active employees. (e.g. qualified beneficiaries may change their plan elections at open enrollment)

Which plans are subject to COBRA?  

  • All group health plans defined under Treasury Regulation §54.4980 B-2, Q/A-1 that provide ‘medical care’ based on the IRC 213(d) definition. This includes:
    • Medical, dental, vision plans, health FSA, Health Reimbursement Arrangements (HRAs) 
    • Some employee assistance programs (EAPs) & wellness programs depending on the plan’s benefits or design
    • On-Site medical clinics providing more than first aid

When may COBRA be terminated? 

  • The maximum coverage period is 18 or 36 months unless the qualified beneficiary becomes disabled or a second qualifying event occurs.
    • 18 months: termination, reduction of hours
    • 36 months (spouse/dependent only): death of employee, Medicare entitlement, divorce or legal separation, dependent child ceasing to be a dependent
    • 18 months + additional 11 months (29 months total) if qualified beneficiary is deemed by the Social Security Administration to be disabled by or before the end of the first 60 days of COBRA
  • Coverage may be terminated early and an early termination notice provided if: 
    • Qualified beneficiary fails to make a timely payment (initial payment due 45 days from the election date, prospective monthly premiums must be allowed a minimum 30-day grace period each and every month from the payment due date.)
    • Qualified beneficiary becomes covered by another group health plan or Medicare after electing COBRA
    • The employer cancels or ceases to maintain any group health plan

Why worry about COBRA compliance?  

  • Depending on the type of COBRA violation, an employer may be exposed to:
    • IRS penalties: excise taxes of $100 per day for each impacted qualified beneficiary,
    • ERISA penalties: up to $110 per day and
    • Employee lawsuits which may result in liability for medical expenses, attorney’s fees, etc.

How much can group health plans charge for COBRA?

  • The COBRA premium must be computed and fixed before the “determination period”, which is any consistent, year to year, 12-month period the employer chooses. However, it typically coincides with the beginning of the plan year or policy renewal date.  
  • The maximum employers are allowed to charge is up to 102 percent of the “applicable premium” defined as “the cost to the plan for such period of coverage for similarly situated beneficiaries to whom a qualifying event has not occurred (without regard to whether such cost is paid by the employer or employee)”.  
    • For an insured plan this is generally the premium charged by the insurer.
    • A self-insured plan, there is no clear regulatory guidance on how this is calculated, other than “in good faith compliance with a reasonable interpretation”. Often the COBRA premium for a self-insured plan is based on past cost history or determined with actuarial assistance based on plan specifics (e.g. claims data, administrative costs, stop-loss, average number of participants).  
  • The premium for the additional 11 months of a disability extension may be increased to 150 percent of the applicable premium.

Though not addressed in this brief overview, there are normally very strict timelines for qualified beneficiaries to elect and pay for COBRA. Due to the COVID-19 national emergency, those time periods have been extended. As of the publish date of this overview, there is no end to those time periods.

*Several states have their own laws requiring coverage to continue similar to COBRA, often called “Mini-COBRA” for employers with less than 20 employees sponsoring a fully-insured group health plan. A fully-insured plan not subject to COBRA may have an obligation to continue coverage under state insurance law. Check with your Alera consultant for additional details.

Resources:

 

This article was last reviewed and up to date as of 08/13/2020.

Disclaimer: This blog was written by Michelle Turner, MBA, Compliance Consultant, Alera Group Central Region. This blog post intends to provide general information regarding the status of, and/or potential concerns related to, current employer HR & benefits issues. This blog should not be construed as, nor is it intended to provide, legal advice. The opinions expressed herein are based upon the author’s experience as a Compliance Consultant and may not reflect the opinions of your counsel. 

The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such.  Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice.  This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.

Wellbeing Resources – Week of August 17

Posted on August 17th, 2020

I hope you all had a wonderful weekend. Below please find this week’s curated list of wellbeing resources. Please feel free to share these resources, as appropriate, with your team. 

Have a safe and healthy week!

 

Career Wellbeing

Social & Family Wellbeing

  • How to End Pandemic Fights with Your Partner – The intensity of constant togetherness and the added pressures resulting from COVID-19 can be overwhelming for many couples right now. This piece shares some ways to think differently about how to resolve your disagreements. 
  • Mom Shame and the Pandemic – This is a wonderful piece about the heaviness of the decision’s parents are facing about how to educate their children this fall. No matter what choice you make, most families are feeling like they are failing.

Financial Wellbeing

  • Retirement savings accounts: The differences and what’s best for you. Just like there are a lot of ways to spend your time in retirement, there are also a lot of ways to save for retirement—even beyond the common 401(k). Whether you’re just starting out on your savings journey or are experienced and want to learn about more ways to save, it’s important to understand the differences between retirement savings accounts and what’s best for your situation. Join Principal Financial for this webinar on Wednesday, August 19th at 12 PM ET. RSVP HERE.

Physical Wellbeing

  • Your Brain on Food: How Your Diet Affects Your Mental Health – Celebrity Nutritionist Kelly Leveque interviews the Director of Nutritional and Lifestyle Psychology at Mass General to explore the science behind the food-mood link and offer actionable nutrition recommendations to optimize your mental health. 
  • FAQ 2020 Flu Season – the CDC has published an FAQ related to the 2020 Flu season and overlap with COVID-19.

Emotional Wellbeing

  • 3 Tips to Get Out of a Bad Mood – Even in the best of times, bad moods happen. Best-selling author, Gabby Bernstein, shares a few techniques to put into practice the next time you’re struggling to break out of a bad mood.

Community Wellbeing

  • Operation Backpack – This organization connects children in need with a new backpack filled with grade-specific school supplies. Learn more here about how you can support them here!

Employer Focused Wellbeing

 

About the Author

Andrea Davis, Director of Wellbeing
Andrea joined Alera Group Northeast (formerly CBP) in July 2013, bringing over 15 years of experience in management consulting and strategic solutions. As the Director of Wellbeing, she is responsible for assisting with the development, implementation and evaluation of comprehensive wellness strategies for existing and prospective Alera Group clients. She provides assistance and support to Alera Group clients by developing personalized programs that fit clients’ unique health management needs, wellness program implementation, committee development, promotion and marketing of their programs to encourage participation. In addition, Andrea conducts program analysis and generates reports related to program participation, health assessment and client utilization. 

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