August 2014

W2 vs 1099 Worker – ACA Regulations make it Important to Get It Right

By August 27th, 2014   Compliance - ACA & Other, Human Resources

July 16th we blogged IRC 60566/6056 “will prove to be the most cumbersome and costly part of Obamacare.” We wrote: “Employers with part-time, seasonal and variable hour workers (someone working for a company with different job functions/classifications, thus hours under two different pay codes) will particularly have difficulties and will need a managed solution. This makes it more important than ever to properly class workers under either W2 or 1099.

Answer YES to the following and it indicates the worker is an Employee (W2).

  1. Does the business provide instructions to the worker about when, where and how too\ perform the work?
  2. Does the business provide training to the worker?
  3. Are the services provided by the worker integrated into the business’ operations?
  4. Must the services be rendered personally by the worker?
  5. Does the business hire, supervise and pay assistants to the worker?
  6. Is there a continuing relationship between the business and the worker?
  7. Does the business set the work hours and schedule?
  8. Does the worker devote substantially full time to the work of the business?
  9. Is the work performed on the business’ premises?
  10. Is the worker required to perform the services in an order or sequence set by the business?
  11. Is the worker required to submit oral or written reports to the business?
  12. Is the worker paid by the hour, week or month?
  13. Does the business have the right to discharge the worker at will?
  14. Can the worker terminate the relationship with the business at any they wish without incurring liability to the business?
  15. Does the business pay the traveling expenses of the worker?

If the answer is YES for the following questions, it indicates the worker is an independent contractor (1099)>

  1. Does the worker furnish significant tools, materials and equipment?
  2. Does the worker have a significant investment in the facilities?
  3. Can the worker realize a profit or loss as a result of his or her services?
  4. Does the worker provide services for more than one firm at a time?
  5. Does the worker make their services available to the general public?

What Makes a Great EAP?

By August 20th, 2014   Healthcare Services, Human Resources

Most employers now believe Employee Assistance Programs (EAP) are important elements in their total compensation and benefits offerings.  They know the equation:  by helping employees identify and solve personal concerns, EAPs create the opportunity for employees to focus and perform at their highest levels.  The return for employers is proven time and again by staff who are more engaged and work harder to achieve organizational goals.

However, selecting an Employee Assistance Program (EAP) can be a complicated process.  EAP service delivery models vary greatly as do the depth, quality and comprehensiveness of clinical, management consultation and training services offered.  EAP “parent organizations” are also disparate; health plans, life insurance companies, workers compensation and even payroll services now offer EAPs, although usually with limited benefits.  While some large employers choose to offer in-house EAPs, most organizations contract with external providers and offer a broad range of professional and confidential EAP services, from brief assessment and referral models to comprehensive early intervention, counseling, crisis management, education and wellness programming.

Below are some questions to consider when choosing an EAP:

  • Does the EAP provide easy access with 24-hour response?
  • Are employees and family members able to participate in confidential, professional, thorough assessments and face-to-face counseling services with skilled, licensed clinicians?
  • If specialized or ongoing care is indicated, do employees receive well-matched referrals to treatment or community resources?
  • Does the EAP offer expert Drug Free Workplace Programs such as DOT/ SAP assessments, management support and mandated supervisory referrals ?
  • Is there significant follow-up to assure employee satisfaction, compliance and best outcomes?
  • Is the EAP skilled assisting leadership prevent workplace violence and responsive when there is a need for crisis intervention, de-escalation or post-traumatic event management?
  • If a crisis occurs at the workplace, are professional and unlimited crisis intervention services provided?
  • Does the EAP offer FREE and targeted promotion to heighten EAP awareness and utilization, including outreach to engage employees with the most severe problems (many with devastating and costly substance abuse and mental health issues)?
  • Are unlimited EAP promotional materials and employee orientations included?
  • Are on-site services such as employee education, management training, mediation and organizational development core elements of the EAP offering?
  • Is the EAP “all-inclusive”?  A high quality EAP should be comprehensive and not charge extra for management referrals, strong utilization rates, crisis debriefings, EAP orientation or supervisory training programs; these items should be included in the quoted rate.

Selecting an EAP begins, first, with understanding your organizational needs and how an EAP can help you meet them.  Be aware of choosing an EAP that is “free” or “embedded” in another benefit product. This may seem like an economic option, but may not be the best value or quality for your organization or employees. A great EAP should be highly promoted, well utilized by employees and families, and the “go to” resource for employers who want results.

This article was contributed by Melissa Fabrikant, LCSW, CIRS – Director of Project Management from Managed Care Concepts EAP www.theemployeeassistanceprogram.com.

Shocking News: The Government Did Not Plan Well!

By August 13th, 2014   Healthcare

Employee Benefit Advisors believes the following is important information. It supports EBA’s belief that Healthcare is best served by the private sector. Imagine the total number of policies and comprehensive coverage if either a) the government had given one billion dollars away for insurance premiums, or b) allocated one billion dollars in claims for the uninsured. As for Medicare, we are headed for trouble. (Or, the unthinkable, reduce a debt.)

Health Reform Weekly – A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country. Week of August 4, 2014

A new General Accounting Office (GAO) report released last week found that the government did not plan well and did not properly oversee the launch of the new federal health exchange in October. The report went on to warn that the problem-plagued federal website still faces risks for the next open enrollment period unless oversight is increased and continuing back-end issues are resolved. The original contractor for the site has been replaced because of the flawed rollout, but some key federal marketplace capabilities remain unavailable. Congressional auditors noted that Healthcare.gov costs are now running close to $1 billion.

In other news, the Medicare and Social Security Board of Trustees has issued its 2014 annual report on the financial health of the Medicare program, projecting that the Medicare Hospital Insurance Trust Fund will exhaust its reserves in 2030, four years later than projected last year. The trustees project “slight surpluses in 2015 through 2022, with a return to deficits thereafter until the fund becomes depleted in 2030.” This improvement is attributed primarily to factors that include lower-than-expected spending in 2013 for most hospital service categories.

7 Advantages of Partially Self-Funded Health Plans

By August 6th, 2014   Healthcare, Human Resources

Obamacare allows no rate consideration for health conditions on fully-insured small group plans. Rates are the same whether a group is very healthy or very sick. Healthier groups must subsidize the cost for sicker groups. Since groups are not underwritten, the business owner usually has no way of knowing if the cost includes a subsidy for sicker groups.

Self-insured small group health plans are allowed to underwrite and set rates for each group based on the health of the group. By going through this underwriting process, a small business owner can see the price based on the health of the employees. Once the rates for a self-insured plan are determined, the business owner can make a decision of what is best.

Very few plans a totally self-funded, so when EBA refers to the self-funded it important to realize these plans are partially self-funded.

  1. Lower Costs – Savings may result from underwriting, fewer mandates, greater flexibility in plan design, tax savings, and a refund of claims funds. The savings can be significant.
  2. Tax Savings – Self-funded plans save on state insurance taxes and ACA taxes. State insurance tax is paid only on the stop loss insurance portion of the cost. This is typically less than one half the total plan cost and results in a typical savings of one half or more of the state premium tax.
  3. Money Back from Claims Fund – In years that claims are less than funded for, the money left over in the claims fund belongs to the employer.
  4. Monthly Claims Report – The employer receives monthly claims reports showing where dollars are being spent. This information can be used by the employer and advisor to design a plan that works best for the specific business.
  5. Not Subject to State Mandates – Carriers selling fully insured plans must spend large amounts of resources just to comply with the different state mandates. With a self-funded plan, the employer selects benefits that work best for the employees.
  6. Underwriting Based for Type of Business, Age, Sex, Health and Lifestyle – With a fully-funded plan, the healthier and younger groups must subsidize the cost for older and less health groups. The underwriting process used for self-funded plans allows you to be charged the correct amount for your group, rather than being included in a community rated traditional plan. This can result in significant savings.
  7. More Latitude in Plan Design – With self-funded plan an employer is allowed to select the benefit that works best for that specific business. Deductibles, co-insurance, co-pays, prescription benefits and other options allow for a custom design.
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