2018 Open Enrollment:

Top 12 Critical Mistakes to Avoid this OE Season

Presented by: Caroline Smith, Esq. &

Patrick Haynes, Esq., LL.M.

Crawford Advisors Webinar Series | October 2017

About the Webinar

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Caroline is a compliance attorney with a law degree from the University of Akron and a license to practice law in Ohio. She assists brokers of AssuredPartners’ partner agencies and their client-employers with ACA and other federal regulatory compliance issues. Her expertise extends from benefits compliance and analysis to education webinars on healthcare reform and related updates.

Caroline drafts and reviews documents and policies pursuant to ACA, ERISA, HIPAA, the IRC, etc. to ensure compliance, providing organizations with clarity and administrative practices above reproach. She also writes a variety of blogs, update notices, and other informative documentation available on our website (www.assuredpartners.com).

Today’s Co-Presenters

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Today’s Co-Presenters

Patrick Haynes Education Temple University School of Law, LL.M. Rutgers University School of Law, J.D. Rutgers University School of Business, M.B.A. Rutgers University College of Arts & Sciences, B.A.

As Crawford Advisors’ GC and Vice President – Compliance, Mr. Haynes advises employers and plan sponsors in a variety of health and welfare benefit plan compliance matters, including, but not limited to, tax qualification and other Internal Revenue Code issues, PPACA, ERISA, COBRA and HIPAA portability, security and privacy issues. Mr. Haynes lectures frequently and has published many articles on health and welfare benefit plan compliance topics.

Practice Areas Employee Benefits & Exec Comp, ERISA, COBRA, HIPAA, §125, and §§ 105, 106, 129, 132

Admitted to Practice • U.S. Supreme Court • Federal and State Courts of

• New Jersey • Pennsylvania • Connecticut • District of Columbia

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Today’s Agenda

1. Failing to Communicate

2. Failing to Leverage Technology

3. Over-reliance on technology

4. Running Out the Clock

5. Cutting too many corners

6. Not pursuing a holistic approach

7. Nix the status quo benefit mix

8. Incomplete documentation

9. Don’t Forget the Family

10. Limiting enrollment options

11. Letting Benefits Go to Waste

12. Prematurely closing out your OE Processes

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12 Critical Mistakes to Avoid this OE Season

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But first…

How about a look back at prior webinars?

15 Critical Mistakes to Avoid during OE 1. Ineffective Communications (brochures, customer service, etc.) 2. Human Error (Data Entry) 3. Not taking advantage of latest trends in plan designs 4. Starting processes too late 5. Not using the latest technology to make communication, enrollment, and/or

administration easier 6. Not using OE to reinforce or drive wellness campaigns 7. The overage student verification process for dental and vision not being clearly

understood, communicated, implemented or enforced 8. Not reminding employees of the plan’s extra “features” (if any) 9. Forgetting (aka failing) to make timely decisions 10. Not reading the provided communication pieces about all of your benefit options 11. Not fully understanding your salary definition prior to sending salary file updates for

OE. (E.g. bonus, overtime, etc.) 12. Not reviewing your OE billing statements to ensure accuracy 13. Thinking what you did last time will prepare you for what you need now 14. Not verifying dependents before required/stated due dates 15. Not asking your HR department the appropriate questions regarding benefits and

possible wellness incentives

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2015/16’s List

Top 10 Challenges

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2017’s List

• Wellness Programs

1. EEOC Final Regulations (comply with notices, notices to spouses, ADA, EEOC, GINA, and HIPAA regs)

2. IRS Tax Guidance – Chief Counsel Advice memos (taxation of rewards)*

• 2017 Updates & Changes Affecting Your Next Renewal

3. SBC (on/after 4/1/17 use new SBC, new examples include foot fracture)

4. Preventive & Clinical Trials (routine patient costs must be covered)

5. Affordability (the ever changing percentage and reminders about opt-out credits, well vs non-well, smoker vs non-smoker, etc.)

6. HSA Update (limits change annually around April or May each year)

7. HIPAA Privacy & Security

8. Federal Mandates for All Group Health Plans

9. Marketplace Notices & Appeals

10. Form 5500 – Major Changes, Updates & Expansion (released but major overhaul not expected to hit until 2019’s filing. New Schedule J)

Failing to Communicate One of the most crucial steps, and found most often to be neglected, is the communication strategy of the plan. Effectively educating EEs of how the plan works will pay back three fold in responsible utilization.

Studies show that a well-designed communications strategy increases EE perception value by more than 50%. Suggestion: Reinforce that salary is merely a percentage of their total compensation with customized compensation statements.

Supply EEs with a company branded easy-to-read benefit guide during OE and periodic drips throughout the year. If you absolutely must have EEs make their elections on paper, distribute a consolidated enrollment form.

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• Stick1: The ACA requires all ERs subject to the FLSA to communicate with EEs about their health-care coverage, regardless of whether they offer benefits.

• Stick2: Many benefits are offered on a pre-tax basis (Sect. 125 plans) and you must provide notice and an OE period once every 12 months.

• Carrot1: Studies show that a well-designed communications strategy increases employee perception value by more than 50%.

• Carrot2: An Aflac study found that 80% of EEs agree that a well-communicated benefits package would make them less likely to leave their jobs. (And, 58% of them are somewhat likely to take a job with lower pay but with more robust benefits).

Failing to Communicate

Consider…

Poll #1

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A. Increases it by more than 80%

B. Increases it by more than 50%

C. Decreases it by more than 50%

D. Decreases it by more than 80%

A well-designed communications strategy regarding employees’ benefit packages does what to employees’ perceptions of value?

• Leveraging new technology and integrating that into the enrollment process can provide a remarkably improved process to EEs

• Millennials (for example) repeatedly express a preference for receiving and analyzing benefits information by computer, APP, phone or tablet

• Challenge – make the use as seamless as possible (for both EEs and spouses) and engage your non-tech-savvy workforce too

• Leverage broker’s expertise and Carriers too 13

Failing to Leverage Technology

Failing to Leverage Technology • Best-Fit tools

• askEMMA avatar

• Single-Sign-On process

• Combined enrollment process for all health & welfare benefits, etc.

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• At the opposite end of the spectrum we have too much technology---

• Technology is excellent for communicating with many people quickly. It’s efficient, accurate and useful later too.

• But, it can’t solve all problems, nor help an EE overcome a hurdle, ask a question about a spouse, or his/her unique situation

• Printed materials – leave behind, quick and efficient guides

• How to documents and FAQs

• OE meetings, GoToMeetings, follow up with HR, and Customer Service Representatives answering questions – these pieces are just as important as the technology you are leveraging

• Engage your EEs in as many ways as possible and you’ll enhance their faith in the benefits offered and confidence in selecting the plans they need

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Too Much Technology

• It can be frustrating to invest substantial time and effort into EE benefit education, only to have most of your EEs do nothing

• Yet that is what happens most of the time. Just 36% of workers make any changes from the previous enrollment, and 53% spend less than one hour making their selections, according to a LIMRA study.

• One reason may be that employees don’t feel assured they are making the right decisions

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Running Out the Clock

Poll #2

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A. True

B. False

A majority of employees make changes to their benefit elections from the previous enrollment.

• One of the most difficult financial decisions ERs make each year is deciding how much money to allocate to EE benefits

• Spending too much—goes right to the bottom line; you don’t want to lay off EEs you are trying to help

• Spending too little, however, can hurt EE retention & recruiting

• Voluntary benefits can offer a win-win solution. EEs, who pick up the costs, have more options to tailor a program that meets their own needs.

• In a recent study of small businesses, 85% of workers consider voluntary benefits to be part of a comprehensive benefits package, and 62% see a need for voluntary benefits

• Lincoln Financial Survey, June 2017: • 87% say they are more likely to enroll in benefits that they are familiar with/ educated about • 73% of EEs say their ER is proactive when explaining what benefits are available • 66% trust their ER’s judgement when it comes to selecting an overall benefits package for EEs

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Cutting Too Many Corners

• No, we’re not talking about wellness plans…

• We’re referring to an overall approach to enrollment and education about EE benefits

• Ongoing, personalized benefits education and counseling

• Dedicated services

• Allowing the ER/Plan Sponsor to focus on other aspects of their business, benefits and compensation

• Vendors that educate, train, touch and engage your population year round and not once a year • Education – scheduled, integrated

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Not Pursuing a Holistic Approach

Poll #3

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A. They allow employers to offer critical benefits without hurting their bottom lines

B. They assist employers in retention and recruiting of employees

C. They allow employees to have more options and buy benefits that fit their specific needs

D. All of the above

Voluntary benefits are a beneficial offering because:

• Offering one Medical/Rx plan is a thing of the past - most ERs offer several options

• Offering the same benefits as last year is not a winning formula • Have you conducted EE surveys to ask what they want, what they expect,

what their spouses’ ERs offer, etc.?

• As ERs compete for talented EEs, benefits that were once considered optional or “add-ons” are now considered mandatory

• Potential new hires expect to see dental, vision, life and disability offerings when considering working for you

• Healthcare FSA and Dependent Care Reimbursement plans are expected

• Parking/Transit are expected in large cities

• Many of these benefits can be offered at a savings if you consider that neither the ER nor the EE pays taxes on amounts deferred to these pre-tax vehicles

21 CIGNA – recent survey of 250 Employers

Nix the Status Quo Benefit Mix

• Satisfying your EEs is a worthy objective, but you must keep federal regulators and carriers happy too

• The ACA requires ERs that self-fund to report about MEC (Minimum Essential Coverage) to the IRS or they risk penalties

• Even if the ER is not required to provide coverage to part-time EEs, the ER is still required to keep detailed records of the EEs’ hours and the ER’s efforts to test its variable hour population to identify who must enroll and when

• See prior webinars/blog guidance for best approaches to managing your variable hour workforce

• Practice TIP-there’s no such thing as a full-time temporary worker. They could be a bona fide seasonal worker (tied to real seasonal work) and therefore eligible to be treated & tested as if they were a variable hour EE, but more often than not ERs fail that test.

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Incomplete Documentation

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• Remember the ACA only requires ALEs to offer coverage to FTEs and their natural/adopted children to age 26

• Spousal coverage is not required – although it is quite the norm and more often than not, expected • Many ERs use a working spousal

carve-out or a spousal-surcharge to encourage their EEs’ spouses to enroll at his/her ER’s plan

• Be certain to clearly communicate company policies regarding coverage of spouses (legally married regardless of gender), children (generally natural/adopted and stepchildren) and any domestic partners and their children (if your plan still permits them—and be sure to discuss the imputed income issues associated with covering DPs and children of DPs).

Don’t Forget the Family!

Poll #4

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A. Full-time employees

B. Full-time employees and their dependents

C. Full-time employees, their spouses and dependents

D. None of the above

The ACA requires ALEs to offer health coverage to the following:

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• Millennials and hi-tech ERs want all the technology they can use

• But, older workers need to be engaged too

• Will bringing kiosks in to facilitate enrollment help—sure, there can be less room for data entry errors, etc., but, engaging your population in a way that instills confidence is a better approach.

• Consider good old-fashioned paper approach, face-to-face enrollment, phone registration, etc.

• Some ERs see the kiosk approach as a solid compromise where a real-life-human assists members with the electronic process

• Builds trust for next year and goodwill

Limiting Enrollment Options

• EEs sign up for benefits and then forget to use them? YES! It happens all the time.

• Exhausted parents forget to use their EAP benefits for some much needed counseling

• Mail-order-Rx (if its just a cost-saving option and not mandated) are forgotten over the convenient fill at their local CVS/grocery store

• Using disability coverage for maternity leave is often forgotten by first-time parents

• The bottom line is that ERs must periodically check in with EEs and remind them to review, evaluate and use their benefits

• All EEs know/use/maximize their PTO (vacation/sick days, etc.) yet the same is often not true for all their health and welfare benefits

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Letting Benefits Go to Waste

• OE is over, all that stress, you just want to put it “all” in your rear-view mirror and move on…BUT….

• Use the end of the OE period to solicit EE feedback • What went well? • What worked? What didn’t? • What types of communication were the most effective?

• Postcard to the home, alerting the spouse? • Searchable PDF linked through an APP?

• Make sure you know what worked and what did not and then share that feedback with upper management, with your broker, vendors, consultants and carriers

• Consider ongoing surveys – maybe quarterly

• And, hold your EEs accountable too—make sure they check their paychecks for correct deductions, and enrollment, process life insurance increases only AFTER they have been approved under an EOI process, etc.

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Prematurely Closing Out Your OE Processes

Poll #5

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A. Employers should not worry about benefits until the next OE season

B. Employers should survey their employees to gather feedback about OE

C. Employers should communicate with vendors, brokers, carriers and their executive team regarding the OE process

D. Employers should continue to communicate with their employees about their benefit offerings throughout the year

E. B, C and D

Once open enrollment closes:

If you have any further questions about the information discussed in this webinar please feel free to contact us at:

Crawford Advisors, LLC an AssuredPartners Company

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Questions…

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