everything nonprofits need to know about employee benefits
TRANSCRIPT
Everything Nonprofits Need to Know About
Employee Benefits
12/1/16 1pm Eastern
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Our guest presenter »Danielle Mason
• VP, Client Strategy at Benefit Innovations, LLP • specializes in group benefits for medium to
large employers, with focus on cost-containment, employee communication, and ACA compliance
• consults with employers to assist in navigating the nuances of the Affordable Care Act and has spoken about the bill and it's implications to a range of audiences
Not-for-Profit
Benefit StrategyDanielle Mason, HCRS
Benefit Innovations, LLP
2016
Benefit Concerns for NFP’s Comply with the ACA Employer Mandate
All businesses with 50 or more full-time equivalent employees (FTE) provide health insurance to at least 95% of their full-time employees and dependents up to age 26, or pay a fee
Attract & retain good employees
Create employee loyalty Nearly 40 percent of employees say a wide selection of
benefits would make them feel more loyal to their employer
Keep administration simple
Include cost-containment
Why offer benefits?
Attract & Retain talent
Reduce costs through group coverage vs.
individual market
Increase employee loyalty
Make options available: medical, life
insurance, dental, vision, disability,
cancer, hospital policies, telemedicine,
student loan consolidation, etc.
Compliance with ACA Employer
Mandate for Applicable Large
Employers
Applies to employers averaging 50 FTE (full
time equivalents).
1 FTE is one employee working an average
of 30+ hours per week, OR two part time
employees working an average of 15+
hours per week.
Requires that coverage is "sufficient” and
“affordable” in order to be wholly
compliant with the mandate.
“Sufficient” and “Affordable”
Sufficient: requires that medical insurance
covers at least 60% actuarial value of the
costs of healthcare
Affordable: requires that the cost of
coverage offered by an employer does
not exceed 9.5% of employee’s
household income
W-2 Safe Harbor: Use of the employee’s W-2
wages to determine compliant expense
What does non-compliance
cost? Sledge hammer tax: the tax that an employer is
exposed when nothing is offered and any employee attains a PTC on the FFM ~$2K* per employee per year, less the first 30
employees.
Tack hammer tax: the tax that an employer is exposed to if offering coverage that does NOT meet the requirements of “sufficient and affordable”: ~$3K* per employee per year that receives a PTC
on the FFM, to a maximum of (the sledge hammer tax) ~$2K* per employee per year less the first 30 employees.
What if I have less than 50 FTE?
Employer mandate does not apply
Benefits are still an important strategic decision for the ownership and stakeholders.
Individual Mandate still applies to employees of a small employer.
Important to track hours and staff carefully to ensure awareness of the 50 FTE cutoff.
Medical Plan Options Comprehensive/major medical/”sufficient
and affordable” coverage.
Fully insured through a carrier like Anthem, United Healthcare, etc.
Partially self-insured, level premium plan (looks and acts like a fully-insured policy); comes with potential savings from a refunding provision.
Self-insured with a TPA and a reinsurance carrier; exempt from state mandates but still exposed to all federal mandates. Overseen by DOL instead of the DOI
Medical Plan Options
Minimum Essential Coverage
Covers at 100% no cost-share the entire list of preventive care services as dictated by the CMS
Offers a relatively inexpensive way to shelter an employer from the sledge hammer tax should they choose to offer nothing
Allows the employee to comply with the individual mandate
Medical Plan Options
Limited Medical Plans
Offer scheduled payments for certain services such as physician visits, X-rays, ER visits, inpatient visits, surgery, etc.
Limited medical plan payouts are often modest in comparison to the actual facility bills themselves
Lesser expensive, but not up to par as “sufficient” due to 60% actuarial value requirement
Medical Plan Options
Cost-plus pricing strategy
Claims from facilities are re-priced
according to CMS reported costs
Facilities receive a check and agreement
to terms upon cashing
Allows for significant claims savings in the
ballpark of 60-70% on facilities claims as
opposed to PPO discounting of 25-40%
Cost Containment Strategies Telemedicine
Lowers costs to plan of PCP visits, ER visits, urgent care, etc.
70% or better of all office visits can be handled by phone or by video
24/7 access helps redirect out of emergency or urgent care situations
Medical Advocacy Programs Helps employees navigate the “system”
Helps to direct care in-network
Employees are able to get assistance finding the least expensive or highest efficiency care
Billing Advocacy Programs Scours bills for mistakes or replications
Negotiates discounts on behalf of the employee
Cost Containment Strategies RX Funding Programs
Allows for those with expensive medication to seek assistance in affording said medication
Connects those with interest in giving financial donations with those in need of RX assistance.
Wellness Initiatives Keeps plan members healthier in the long-term an in
doing so, pushes medical claims down over time and consistent application
On-site/Near-site/Shared Clinics Creates access to care near the employees themselves
and lowers cost of using standing PCP offices, clinics, urgent care, etc.
Creating responsible consumerism of healthcare and the employer plan.
Other Valuable Benefits
Life, dental, vision, disability, critical illness, personal accident, telemedicine, etc.
In many instances, you can offer a full panel of voluntary benefits at no cost to the employer, which still giving employees access to benefits on a group basis, rather than purchasing as an individual
Can be offered with or without medical as a benefits package.
Pay or Play: Look at the Cost
Which is more advantageous for an ALE?
Example: 100 FTE Employer, exposed to
individual mandate; let’s say without offering,
15 people would go to the healthcare.gov
exchange and attain a subsidy.
Offering nothing: ~$140K/Year in tax penalty
~$117 PEPM
Cost of Turnover: Defending
the Expense of Benefits
Average cost of turning over an
employee is 16%-20% of annual salary.
Someone working $10/hour will cost $3300
to replace, while someone earning $50K
would cost $10K to replace.
What kind of erosion to the bottom line
does long-term high-turnover do to your
company?
Questions?
Danielle Mason, HRCS
Vice President, Client Strategy
Benefit Innovations, LLP
317-663-4044
https://bloomerang.co/resources
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