Create Organizational Sustainability With An Employee Benefits Strategic Plan

Many companies may feel they just got through the implementation of their 2015 benefits and can breathe a sigh of relief. However, due to the fiscal realities of healthcare costs and new ACA compliance and reporting standards your organization’s future financial performance may be impacted in ways you need to be prepared for.

Because the financial performance of a company can impact shareholder value, human capital, culture, etc. a short-term employee benefits plan may not cut it anymore. The “let’s follow what we did last year” approach needs to be replaced with a strategic planning process that can yield unique and innovative ideas that will work for your company.

Employee Benefit Plan Review recently reported on ways to create a strategic plan. The article, The Secret Weapon of Modern Benefits: A Strategic Plan calls for employers to set specific priorities and goals in regards to their total compensation package. They recommend taking the time and involving a variety of stakeholders to specifically develop an employee benefits plan using the same business approach they use to develop a new product or service.

The reason using a strategic planning model may work better than other planning efforts is because it involves a number of components in its process such as: discover/analyze/design/build/review structure. This requires commitment from up above to begin. Next, in addition to human resources and executives, employees from major functional areas should be involved to help have a broad range of representatives who may identify issues not considered by top management. Lastly, it may bring value to the process to engage an expert to facilitate your planning model.

According to the article, having a purposeful employee benefit strategic plan will help your organization establish realistic goals that can be clearly communicated. Goals that are unique to your company and which will help you avoid just duplicating your competitors best practices and calling it a day.

Finally, taking the time to develop such a plan should provide your organization with sustainability to stay ahead in your industry. And remember, you’re creating a living document, so don’t be afraid to make adjustments along the way.

Source:  Employee Benefits Plan Review. The Secret Weapon of Modern Benefits: A Strategic Plan. March 2015. PP 12-13.

COBRA Services: Changes to HIPAA Certificates in 2015

New final regulations published by the U.S. Department of Health and Human Services (HHS) on May 16, 2014 confirm the end of the requirement to issue certificates of creditable coverage. Certificates of creditable coverage are no longer required after December 31, 2014.

HRC Total Solutions will remove the HIPAA Certificate options from our COBRA service offering starting December 30, 2014.

HRCTS currently offers clients the option to include HIPAA Certificates with the following notices:

  • QB Specific Rights notice
  • QB Termination notice
  • NPM Special Enrollment Rights notice 

Below is the updated regulatory language.
Evidence of creditable coverage.

  1. The rules for providing certificates of creditable coverage and demonstrating creditable coverage have been superseded by the prohibition on preexisting condition exclusions. See §2590.715-2704 for rules prohibiting the imposition of a preexisting condition exclusion.
  2. The provisions of this section apply beginning December 31, 2014.

Additional Permitted Election Changes for Health Plans: IRS Notice 2014-55

The Internal Revenue Service recently released IRS Notice 2014-55 which states that as of September 18, 2014 participants in an employer sponsored section 125 cafeteria plan have two additional reasons to change their health insurance plan elections during a plan year.

How does this affect participants?

All employees covered by a company cafeteria plan now have two additional reasons to change their health insurance plan elections during the plan year. These include the following two scenarios:

  • If an employee’s hours are reduced to fewer than 30 hours (on average) per week and the employee is still eligible for the employer’s health plan coverage.
  • If an employee chooses to stop participating in the employer’s group health plan in order to purchase coverage through an ACA marketplace.

How does this affect employers?

Employer cafeteria plans will need to be amended to reflect these changes before the last day of the plan year in which elections are allowed. These amendment changes can be made retroactive to the first day of your plan year, assuming your plan follows the IRS guidance and employers have communicated these amendments to your participants. For plan years beginning in 2014, employers can amend the plan at any time before the last day of the plan year beginning in 2015.

What do I do now?

If you decide to opt into these new election change offerings you will need to update the amendment for your plan document and Summary Plan Description (SPD).  Once this amendment has been adopted you will need to keep this on file with your plan document and provide it to your employees as this would be a material change to your benefits offering.  You can find the proposed amendment document here.

What about future plan documents?

Unless otherwise specified, HRCTS will include this new election change offering with our standard template documents moving forward.  If you require customized documents you will need to notify us whether you have adopted these new election change offerings.

ACA Changes to HRA plans: HRA Opt-Out Option Plan Amendment

Attached please find the HRA Opt-Out Option Amendment and SMM (summary of material modifications) for your HRA plan documents. This amendment is for your company’s document and the SMM is for the summary plan description for your employees. These are not documents that we need to have returned to us at HRCTS but only for your records.

The purpose of this Amendment is to adopt the opt-out option under a Health Reimbursement Arrangement (HRA) Plan allowing employees and former employees the opportunity to permanently opt out of and waive future reimbursements from the HRA at least annually. Upon termination of employment, the HRA must either be forfeited, or it must allow the employee to permanently opt out of and waive future reimbursements.

HRCTS will include this in any HRA document that we prepare for you in the future.  If you would like more information on the HRA Opt-Out Amendment please review the following IRS publication here and contact our sales team.

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