by Carolyn Kick | Oct 7, 2020 | Compliance, Employee Benefits
Employers and their group health plan sponsors will want to mark October 15, 2020 on their calendars. This is the deadline for plan sponsors to disclose to individuals who are eligible for Medicare Part D and to the Centers for Medicare and Medicaid Services (CMS) whether the health plan’s prescription drug coverage is creditable.
Although this responsibility primarily falls on group health plan sponsors, there are several important things that employers should be aware of that we’ll cover in this post:
- What is Medicare Part D?
- Where can resources and model notices can be found?
- Other timing and delivery rules to be aware of
What Exactly Does “Creditable Coverage” Mean, and How Is It Related to Medicare Part D?
“Creditable Coverage” is a term that involves two simple words, but most people have a hard time understanding what exactly it means in the world of Medicare.
A notice of creditable coverage is simply an official document given to an employee from their employer (or union) that states whether their prescription drug coverage plan is equal to or better than the prescription drug coverage provided through Medicare.
This notice helps the employee make decisions related to their benefits, as remaining under their employer’s prescription drug plan might be very advantageous for them as they approach retirement. For plans that are not creditable, employees should generally move to Medicare as this will save them money from future late-enrollment penalties in the future. Medicare allows employees who choose to stay on plans that are creditable to avoid these penalties should they choose to enroll later on.
In order for CMS to have an official record of an employer’s or union’s status as creditable or non-creditable, employers must disclose that status both to their Medicare Part D eligible employees as well as the CMS. Employers should work with their group health plan sponsors to send this notice, and it must be done by October 15th.
What Resources and Model Disclosures Exist?
Fortunately, the CMS has provided two model notices that employers can use:
- A model notice of creditable coverage when the health plan’s prescription drug coverage IS creditable. (click here to access this model).
- A model notice of non-creditable coverage when the health plan’s prescription drug coverage IS NOT creditable (click here to access this model).
Technically, employers do not have to use these model notices. However, if the models are not used, the notices still must include certain information. These requirements include a disclosure about whether the plan’s coverage is creditable, explanations of what creditable coverage means, and an explanation of why employees should take their coverage decisions seriously.
Employers and their group health care sponsor should strongly consider using these models. It’s the simplest way to make the disclosures and ensure that the required language is used. Another best practice is for employers and their group health plan sponsors to provide this notice to all plan participants, even to those that might not be qualified for Medicare Part D. This way, the employer can ensure that they “cover all their bases” and that they educate employees who will have to make this decision several years in the future.
What Other Rules Should You Be Aware of?
Employers should not that the most important time of year to deliver Part D Notices is prior to the Medicare Part D annual election period, which goes from October 15th to December 7th each year. However, there are other situations in which an employer or their group health plan sponsor must give this notice to an employee:
- Whenever a beneficiary requests the notice
- Whenever there is a change in an employer’s health plan that changes whether the plan is creditable or non-creditable
- Before the effective date of coverage for any Medicare-eligible individual who joins the plan
As we stated in the previous section, it’s not a bad idea to provide Part D notices at multiple times throughout the employment life cycle. Part D notices can even be included in new enrollment materials for employees.
It is important for employers to understand the rules about printed notices and electronic notices. A single printed notice may be delivered to an address, even if multiple beneficiaries of the plan live at that address. However, if it is known that a beneficiary of the plan lives at a separate address, a second printed notice must be sent to that address. Electronic notices can be compliant as well, assuming the employee has regular access to the electronic documents at their regular place of work.
From an official perspective, the Department of Labor (DOL) has three requirements for electronic delivery of Part D Notices:
- The plan administrator uses appropriate and reasonable means to ensure that the system for furnishing documents results in actual receipt of transmitted information.
- Notice is provided to each recipient, at the time the electronic document is furnished, of the significance of the document.
- A paper version of the document is available on request.
As we stated very early in this post, a notice must also be sent to the CMS in addition to the beneficiaries of the plan. This disclosure to the CMS must be delivered on an annual basis, and the following timeline requirements apply – the notice must be provided:
- Within 60 days after the beginning date of the plan year for which the entity is providing the form.
- Within 30 days after the termination of the prescription drug plan.
- Within 30 days after any change in the creditable coverage status of the prescription drug plan.
Key Takeaways
Part D Notices, or notices of “Creditable Coverage,” are simply an official document given to an employee from their employer (or union) that states whether their prescription drug coverage plan is equal to or better than the prescription drug coverage provided through Medicare. The purposes of these notices is to help beneficiaries of the plan make the best decision for their prescription health coverage moving forward.
Here are additional key takeaways related to these notices:
- The Centers for Medicare and Medicaid Services (CMS) provide sample notices that employers should consider using.
- Employers should work with their group health plan sponsors to ensure that these notices are delivered at the right time – which might end up being more frequently than you think.
- The notices can be provided electronically under certain circumstances.
by Carolyn Kick | Sep 24, 2020 | Employee Benefits, Open Enrollment
Open Enrollment is one of the trickiest things to figure out as an HR professional. As the people behind the coordination of the open enrollment process, it’s easy to think that employees will take full advantage of the opportunity to add new benefits, update beneficiaries, or are the very least, learn more about what the company has to offer. Unfortunately, all too often, this isn’t the case at most companies.
As an HR professional, you know how things really tend to go. You spend hours upon hours preparing pamphlets, presentations, and meetings to teach your employees about open enrollment. But by the end of the open enrollment period, you realize that your efforts have been in vain because most of your employees seemed to take little or no action.
Do things really have to be like this? At Launchways, we strongly believe that open enrollment can and should be better than the all-to-common example that we shared above. Based on successful examples that we’ve observed in the companies we work with and within our own expertise conducting hands-on open enrollments for our clients, we have some advice for how to have a successful open enrollment in 2020.
In this post, we’ll cover:
- Understand the employee point of view
- Make benefits information exciting and unique
- Take your responsibility to communicate seriously
Information Overload – Understand Your Employees’ Point of View
Take a moment to think about all the information your employees process every day – not only in their professional lives, but in their personal lives too. From emails to social media feeds to flyers to billboards to podcasts, your employees are constantly being bombarded with information. We didn’t even mention the advertisements that are embedded in most of those mediums, which are designed specifically to trap the attention of your employee.
If you want your employees to care about open enrollment, you are going to have to think of ways to breach this wall of information overload. We’ll talk more about strategies to do that later on in this post.
Research shows that most employees in most companies rush through their open enrollment actions. Employees generally spend less than one hour reviewing their current benefits and making decisions about any changes.
Put yourself in the shoes of your average employee. You have the obvious work and home responsibilities. However, with COVID-19 now impacting most people’s work and personal lives, things just got a lot more complicated. Now more than ever, employees might be so overwhelmed that open enrollment is the last thing in the world they’re worried about.
Now that we’ve talked about things you should consider from the perspective of your employees, let’s cover what you can do about these hurdles.
How to Make the Information Stick
You must learn how to make your open enrollment communications stick. To do this, you’ll need to deliberately differentiate your communications from anything else that your employees might be processing with their minds. In other words, you can’t expect to send a standard email and expect a high level of employee engagement. Your employees likely receive dozens, if not hundreds, of similar emails each day. Here are some strategies you can use to deliberately differentiate your communications:
- Establish an internal communications brand that is used in all communication about open enrollment. Determine which colors, fonts, and imagery you will use. This brand will need to be unique, so be bold with those design choices!
- Have a variety of opportunities for employees to learn about and participate in open enrollment. Leverage an HRIS platform that can handle the logistics of employee benefits decisions during open enrollment, but also go beyond digital platforms to provide more hands-on education.
- You should have in-person (or Zoom call) Q&A sessions, virtual workshops, and both prerecorded and live presentations available. You can also leverage a combination of printed materials as well as digital communications. In other words, cast a wide net! Every employee will learn things in different was, so the more diverse you can be, the more likely you are to find a strategy that connects with each employee.
- Be creative by having games, competitions, trivia, etc. related to open enrollment. Don’t forget the prizes! Your employees may enjoy the chance to get away from their typical responsibilities for an hour to compete with each other while learning about open enrollment.
Some of these recommendations may be challenging in the year 2020, especially if many of your employees are telecommuting due to COVID-19. For example, in-person Q&A sessions might not be practical indoors. If this is the case for your company, consider holding them outdoors or limiting the size of the group and having extra sessions (or transitioning to entirely virtual engagements).
Encourage Employees to Take Open Enrollment Seriously
The most important advice we can offer in this post is that you MUST take open enrollment seriously if you except your employees to take it seriously. As an organization, be willing to invest to improve employee understanding of open enrollment processes. Also, understanding the crucial role of modern benefits administration technology and leveraging an effective platform is key.
Make your marketing, communications, and public relations employees a core part of the open enrollment process. While HR professionals are fantastic at working on the people side of the business, they may not have a strong background in marketing or communications. Use the experts that you have available to you to make sure you implement the strategies we recommended in the previous section. Remember to brand your open enrollment messaging, differentiate the communications from other information that your employees will be processing, be creative, and cast a wide net.
Work With the Right Benefits Broker
The right employee benefits broker won’t leave you on the hook to figure out open enrollment. At Launchways, we conduct open enrollment on behalf of all our clients. We provide the highest caliber of employee education, so team members can select the right plan for them and their family. If you’re interested in learning more about what it’s like to work with Launchways as your broker, learn more today.
Key Takeaways
The basics of making open enrollment successful are the same in 2020 as they always have been. However, because employees are dealing with so many things in their professional and personal lives, employers will need to go above and beyond to make sure open enrollment communications and instructions motivate employees to act.
Here are some key takeaways from this post:
- Take time to visualize your open enrollment communication materials from the perspective of your employees. While visualizing, do you care about the information? If not, why? Use your findings from that thought exercise to guide your open enrollment communication strategy.
- Develop an internal communications brand that is incorporated into your open enrollment materials.
- Be creative and innovative with your open enrollment strategies. Remember, you are competing with “information overload” to connect with them.
- Take your preparation and strategy behind open enrollment very seriously. If you don’t, you’ll never have a successful open enrollment.
- Working with the right employee benefits broker can be a game-changer at open enrollment time.
by Jim Taylor | Sep 23, 2020 | COVID Healthcare Costs, COVID-19 Resources, Employee Benefits
Many HR professionals are awaiting key information from insurers on healthcare costs for 2021. Given all the uncertainty surrounding the COVID-19 pandemic and how it will impact healthcare costs for 2021 and beyond, employers may be faced with difficult decisions very soon.
To help employers navigate these uncertain waters, we’ve put together some key considerations that you may useful in light of COVID-19’s impact on the U.S. healthcare system.
In this post, we’ll cover:
- Avoiding the traps associated with short term gains
- Understanding key industry trends to keep in mind
- How to effectively communicate plan decisions to your team
Short-Term Gains are Deceiving
Even with the costs of treating COVID-19, many employers have seen savings in their health plans during 2020. These short-term gains are most likely because many employees have been putting off preventative or elective care due to lockdowns, financial uncertainty, or simply a desire to stay home during the spread of the virus.
Although these decisions have decreased health care costs as a whole during 2020, this trend is unlikely to continue into 2021. Employees will soon return to preventative care regimens, and likely with a much higher demand that usual, and a winter season during the pandemic could lead to an increase in costs to treat COVID-19. These two factors combined could lead to a substantial increase in healthcare costs, and employers should plan accordingly.
Industry Trends to Keep in Mind
A recent survey performed by Mercer reveals some interesting HR industry trends to be aware of:
- Nearly 32% of companies are considering, “Adding, expanding or incentivizing virtual care, telemedicine, and/or remote/online digital care.” On a related note, 66% of companies anticipate virtual health and wellbeing offerings becoming permanent fixtures in the workplace.
- Nearly 20% of companies are likely to change health care plans, or at least change the design of the health care plan, to share more costs with employees.
- Over 55% of companies are currently conducting, or are planning to conduct, on-site temperature screenings, and 40% are considering on-site symptom questionnaires. Both of these trends are presumably to help employers catch potential infections early on and reduce workplace spread.
- 16% of companies are planning to add or expand voluntary benefits. Doing so can help fill the gaps with things like hospital indemnity and critical illness coverage.
- 92% of employers have taken, or are planning to take, steps to provide more, “flexible work options to align to a new way of working.”
- 20% of employers are considering implementing, “New messaging to help employees consider how the pandemic might affect their usual benefit choices.”
If you are unsure about the potential need to make changes to your 2021 health benefit program due to the pandemic, you are not alone. Nearly 50% of companies surveyed indicated that they are not sure about what changes they’ll make in 2021 and they are currently monitoring the situation.
Of course, many of the trends listed above have associated implementation costs. On the other hand, these benefits are designed to improve employee health, which should drive down costs in the future. Research has shown that employers are extremely concerned with the mental health of employees during the pandemic. By reading the list above, and by reading more closely into the Mercer survey, it’s clear there are significant changes in the industry that are designed to help employees maintain their mental health.
The exact extent to which these industry trends will drive down costs is yet to be determined, but companies should be aware of these trends and consider implementing them if it makes the most sense for their business model and employee population.
Communicating Your Plan Changes with Employees
Regardless of what benefits decisions your company makes for 2021 and beyond, the need to communicate openly and frequently with your employees about their benefits options has never been more important. Employees deserve to be kept in the loop about the challenges that your company is likely facing. Doing so will help company leadership maintain the trust of employees, with is critically important during these difficult times.
Your company should have a designated employee, or team of designated employees, to plan the employee communications that go along with any benefits decisions. They should constantly be asking themselves, “If we change or eliminate X benefit, how will we appropriately communicate that to our employees?” Now, more than ever before, it is critical for employees to understand their benefits. Therefore, it is more important now than ever to master the art of communicating benefits changes to your employees openly and frequently.
Even better yet, working with a proactive benefits broker that takes on the employee communication piece of your plan rollout can be even more impactful. The right benefits broker will be able to help your employees see the true value in the benefits being offered, and can help employees select the plan that’s right for them and their family.
Key Takeaways
Nearly half of companies are unsure about what difficult benefits decisions they will have to make over the next few months. Hopefully, this article has provided useful information to you as an employer or HR professional to help you be better situated to make these tough decisions.
Here are some key takeaways from this post:
- Business leaders should not get deceived over the fact that their health care costs have been low during 2020. They will most likely increase substantially in 2021.
- Current industry trends indicate that companies are taking precautions to limit COVID-19 outbreaks at their workplaces. Companies are also taking extra steps to care for the mental health of their employees. Voluntary benefits options are also being expanded to fill in potential gaps that may be created by upcoming plan decisions.
- Employers should openly and frequently communicate with their employees about the challenging benefits decisions that may be taking place soon. Good communication is critical for maintaining positive relationships with employees, which matters now more than ever before.
by Jim Taylor | Jul 27, 2020 | COVID Healthcare Costs, COVID-19 Resources, Employee Benefits
The ongoing COVID-19 pandemic has created a new dynamic within the US healthcare system, leading to increased healthcare costs being passed onto employers. During this economically challenging time, it’s more important than ever before that employers are strategically managing and addressing rising healthcare costs.
There are three variable factors directly impacting healthcare costs: unit price of healthcare services, the number of services required, and the number of patients requiring service. In order to impact this equation, there are three strategies employers can deploy.
- Change the unit cost of healthcare.
Even prior to COVID, ineffective and uninformed healthcare decisions were already a leading cause of rising healthcare costs. Now, in a post-COVID world, the impact of poor healthcare decisions is having an even more significant impact on employers. This issue typically arises when employees lack the guidance, resources, and other information they need to make smart healthcare choices. This results in employees incurring higher costs of care and leveraging lower quality providers. These costs are then passed onto their employer. In order to combat this, employers must work with a hands-on broker that provides their employees with guidance during the benefits selection process. Additionally, the correct broker should provide employees support in selecting the best healthcare providers for their unique situation and life stage. By making more informed decisions, patients receive better healthcare outcomes and less costs are passed onto the employer.
- Impact the number of services used.
As the demand for routine and preventive healthcare services skyrockets in a post-COVID world, the ability for patients to receive the care they need, how and where they need it, has become increasingly important. Employees are more commonly demanding personalized guidance in managing their health. As an employer, implementing solutions that cater to employees’ unique situations or communication preferences can ensure they receive correct, accurate information that is relevant to them. Providing personalized content in easy-to-access channels helps employees proactively find care and identify other programs offered to them, such as telemedicine. As an employer, consider solutions that remove barriers to care as an important component of your overall cost-control strategy.
- Manage the demand for care.
The last recommended strategy is to proactively manage the number of people on your employer-sponsored healthcare plans. Each year, employers unknowingly spend millions on dependents that do not meet eligibility requirements for the benefits the company offers. By leveraging effective processes and strategies to eliminate ineligible users from their plans, companies can reduce healthcare costs. A key recommendation is to conduct a regular ineligibility audit to ensure your employee population and plans are managed in a consistent and fair manner to ensure equal treatment of employees to manage employer costs.
Are you interested in implementing these strategies at your business? Launchways can help, get in touch with us today.
by Jim Taylor | Jun 11, 2020 | COVID Healthcare Costs, COVID-19 Resources, Employee Benefits
Prior to the COVID-19 crisis unfolding, most US employers were anticipating healthcare cost increases in the range of 4-7%, based on trends in 2018 and 2019. However, COVID-19 has drastically altered the healthcare space and thus dismantled most employers’ previous predictions. While some are now anticipating decreased healthcare costs for 2020, this does not mean good news for employers. In fact, the monumental impact COVID-19 has had on the healthcare space could mean employers will be facing unprecedented cost increases in 2021 and 2022. These impacts are something employers must be preparing for now, rather than later.
In this post, we’ll explore the major ways COVID-19 has impacted the healthcare landscape. We’ll delve into what this means for businesses in the near-term (the duration of 2020), as well as crucial action steps employers must be taking now to prepare their businesses for 2021 and beyond.
How has COVID impacted healthcare costs?
Due to the COVID crisis, by late March 2020, many American businesses had temporarily ceased operations and closed their physical offices. The immediate impact of the virus was a significant surge in the demand for hospital space in markets with significant virus spread, such as New York. However, the most significant shift across the country was a stark decline in elective care.
For the most part, over the past few months no procedures or surgeries deemed as “nonessential” have been conducted, in order to preserve hospital space and supplies for those with COVID. The shutdown of nonessential medical services and procedures lead to the furloughs of tens of thousands of healthcare workers.
As a result of all these challenges, in the second financial quarter, Americans are receiving substantially less care than anyone could have ever predicted. This impact will result in an unprecedented $140B to $375B decrease in care costs (and this figure includes the costs of COVID-19 treatments).
However, this short-term cost decrease will do little to offset substantial future increases. Models predict that in 2021 and 2022, the trend of rising healthcare costs will reset at a higher lever with a higher slope indefinitely. Employers must be planning and preparing for these changes now by working hand-in-hand with their benefits broker to enact effective cost-control strategies.
What’s the bottom-line?
As an employer, it’s important to realize that COVID-19 has substantially altered the extent to which employees have been able to receive the care they need. Although this shift will result in short-term healthcare cost decreases, the long-term impact is grim. Employees will be driven to more expensive care settings as healthcare becomes available again, resulting in substantial costs increases in 2021 and 2022. Employers must begin preparing for these costs now, by working proactively with their broker on impactful cost-control methods.
by Carolyn Kick | Apr 30, 2020 | COVID-19 Resources, Employee Benefits
The Employee Benefits Security Administration (EBSA), IRS, and Department of the Treasury issued a joint announcement on April 28th stating that they are extending a variety of timeframes related to employer sponsored healthcare coverage, portability, and continuation under COBRA.
Generally speaking, these extensions are designed to maximize healthcare accessibility during the ongoing COVID-19 outbreak, continue coverage for as many Americans as possible, and loosen up claims negotiating windows in a way that prevents a processing bottleneck from weakening the system as a whole.
In this post we’ll explore:
- Extensions of employee healthcare deadlines under ERISA Section 518
- A few examples of what the extensions mean for employers
- The meaning of the HHS “measured enforcement period”
ERISA Section 518 Relief
Section 518 of ERISA allows for the extension of certain benefits-related filing and documentation deadlines by up to one year in the event of a presidentially declared national emergency.
With this week’s joint announcement, the government has declared that all employee health plans, disability plans and other employee welfare plans must disregard the period from March 1, 2020 until sixty (60) days after the announced end of the COVID-19 national emergency (“the Outbreak Period”) when determining the following periods and dates:
- The 30-day special enrollment periods for employees
- The 60-day COBRA benefit continuation election
- Dates for making COBRA premium payments
- The date for individuals to notify the provider of a qualifying event or determination of disability
- The date range within which individuals can file benefit claims
- The date by which claimants must file an appeal for an adverse determination
- The date range within which individuals can request an external review of an adverse determination
- The date range within which individuals may file information to perfect an external review of an adverse determination
For employers, this means that your plan administrator can’t count dates occurring during the Outbreak Period against employee deadlines. The spirit of these extensions is extremely employee-friendly, but it’s also HR and administrator-friendly, as it significantly reduces the pressure to process claims and push laid off or furloughed employees through off-boarding as quickly as possible.
To see the full text of the joint announcement’s final rule, click here.
What Will This Look Like in Action?
Open-Enrollment Examples
If an employee has a baby during the Outbreak Period, the child can be brought onto employee healthcare via special enrollment until 30 days after the Outbreak Period ends (90 total days after the announced end of the national emergency).
Similarly, if an employee got married shortly before or during the Outbreak Period, the new spouse’s special enrollment period will last until 30 days after the Outbreak Period ends (90 days total after the announced end of the national emergency).
COBRA Election Example
If an employee has been furloughed to the point where they no longer work enough hours to qualify for employer-sponsored coverage due to the national emergency, their COBRA election period must remain open until 60 days after the Outbreak Period ends (120 total days after the announced end of the national emergency).
COBRA Premium Payments Example
If an employee was receiving COBRA coverage at the beginning of the Outbreak Period, premium payments for COBRA coverage during the Outbreak Period will be considered timely if the payments are made within 30 days of the end of the Outbreak Period (90 days total after the announced end of the national emergency). As long as premiums for all months during the Outbreak Period are paid in a timely manner, the employee is eligible to continue coverage.
Claim Filing Example
If an employee has a 365-day filing window for any claim, that window will not begin for any claims made during the Outbreak Period until the Outbreak Period ends. Similarly, the entire date range of the Outbreak Period should be excluded from claims deadline calculations for care that occurred shortly before the national emergency.
The “Measured Enforcement” Period
The Department of Health & Human Services (HHS) officially concurs with the relief announced by EBSA in the joint statement and is relaxing enforcement for public healthcare, while encouraging states to adopt the spirit of the extensions EBSA is creating for private employer-sponsored programs.
No official end date has been announced for this period.
Takeaways
EBSA’s COVID-19 employee benefits deadline extensions are designed to help as many Americans as possible maintain their access to employer-sponsored healthcare during the coronavirus outbreak. While they’re largely employee-friendly, the extensions also help HR departments and benefits administrators reduce the bottleneck that COVID-19 has created.
Remember:
- The “Outbreak Period” is defined as March 1, 2020 until 60 days after the COVID-19 national emergency is declared over.
- Dates falling within the Outbreak Period should not be counted against employees for:
- Special enrollment windows
- COBRA premium payment due dates
- Requesting a claim review
- Perfecting a claim review
