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DOL Directed to Reconsider Fiduciary Rule by Trump Administration

In April 2016, the Department of Labor (DOL) released a final rule that expands who is considered a “fiduciary” when providing investment advice to retirement plans and their participants. According to the DOL, the final rule will protect investors by compelling advisors to put their clients’ best […]

By |February 20th, 2017|Compliance|Comments Off on DOL Directed to Reconsider Fiduciary Rule by Trump Administration

2016 Employer Health Benefits Annual Survey- Summary

The Kaiser Family Foundation and the Health Research & Educational Trust (HRET) conduct a survey each year to examine employer-sponsored health benefit trends. The following is a summary of the main points of the 2016 survey and suggests how they could affect employers.  Survey results need to be viewed with an understanding that your organizations medical plans are impacted by your claim experience, your employee demographics, industry, region and a host of other cost drivers.

Health Insurance Premiums

Premiums rose slightly for employer-sponsored health insurance in 2016. Family coverage rose 3 percent over the 2015 average, bringing the average premium to $18,142. Single coverage essentially remained the same, with an average premium of $6,435.  Once again, keep in mind that these are averages and your groups cost drivers will determine whether your premium increases are above or below national averages.  In the same period, workers’ wages increased 2.5 percent and inflation increased 1.1 percent.

Average premiums have significantly increased over the past 10 years. Family coverage increased 20 percent since 2011 and 58 percent since 2006. Compared to all plan types, high-deductible health plans with a savings option (HDHPs/SO) have significantly lower premiums, both for single and family coverage. The average HDHPs/SO single coverage premium was $5,762 in 2016, with the family premium at $16,737. Note, these premiums do not include employer contributions toward workers’ health savings accounts (HSAs) nor their health reimbursement arrangements (HRAs).

Employee Contributions

In 2016, employees’ average contributions toward their premiums were similar to last year, with employees contributing 18 percent for single coverage and 30 percent for family coverage. However, there is considerable variation between how much workers contribute, as with total premiums.

Just like average premiums, workers’ contributions have risen significantly over the past decade. […]

By |January 21st, 2017|Employee Benefits, Medical|Comments Off on 2016 Employer Health Benefits Annual Survey- Summary

What You Need To Know about Narrow Provider Networks

So what’s a narrow network?  Narrow networks are health plans that offer their subscribers a limited choice in health care providers compared to their larger national or regional network.  These plans contract with a smaller group of doctors, specialists and hospitals, and those entities are then considered in-network.

Because all plan participants are directed toward certain facilities and physicians, these providers can then reduce the cost for each visit and service—operating under the idea of “buying in bulk.” This, in turn, results in lower premiums for the consumer and cost savings for insurers.

In recent years, narrow networks have gained popularity.  Many unsuspecting consumers have purchased health plans in the market and were unaware that the plan they purchased had one of these narrow networks.

On the employer side do these narrow network options makes sense?  They can in the right situations such as using a narrow network plan as a low-cost employee option alongside your other medical plan offerings.  And of course, you absolutely need to effectively educate your employees.

Why are narrow networks becoming more popular?

Narrow networks have been around long before the Affordable Care Act (ACA). In fact, 23 percent of employer-sponsored health plans offered narrow networks in 2012. However, their popularity has accelerated since the ACA was signed into law and the Health Insurance Marketplace was created.

Since insurers can no longer compete to cover the healthiest group of individuals or raise deductibles past the ACA’s limits, some have turned to narrow networks as a way to manage expenses. According to a study by McKinsey & Co., a consulting firm, 70 percent of the plans sold on the Marketplace in 2014 featured a limited network. Premiums for those plans were 17 percent cheaper than those with […]

By |July 20th, 2016|Employee Benefits, Employee Benefits Adviser, Uncategorized|Comments Off on What You Need To Know about Narrow Provider Networks

Spousal Carve-outs and Surcharges- Working Spouse Provisions

Employers have a myriad of levers to pull in order to control their employee benefit costs.  The Working Spouse Provisions is one that is gaining momentum.

Working Spouse Provisions restrict coverage of spouses or require additional premiums for spousal coverage. These provisions take the form of spousal carve-outs (also known as “working spouse provisions”) or spousal surcharges. They can be cost-savings tools for health plans, particularly for plans with generous provisions for dependent coverage and plans where a significant portion of the enrolled population elects family coverage.

Also contributing to the growing popularity of spousal carve-outs is The Affordable Care Act (ACA). The ACA provides spouses who are ineligible for coverage under an employee’s group plan with a way to secure their own health insurance, through the law’s health insurance Exchanges and market reforms. Also, effective for 2015, the ACA’s employer mandate provision requires applicable large employers to provide health coverage to their full-time employees and dependent children or risk a penalty, but the coverage requirements do not apply to spouses. Further, because spousal coverage is expensive, implementing a spousal carve-out may help limit an employer’s exposure to the ACA’s tax on high-cost health coverage, which is scheduled to take effect in 2020.

What is a spousal carve-out? […]

By |June 17th, 2016|Compliance, Medical|Comments Off on Spousal Carve-outs and Surcharges- Working Spouse Provisions

Understand Your Group Long Term Disability Plans Income Offsets Before an Employee goes out on Disability

Long Term Disability coverage is one of the most important benefits you provide your employees.  If an employee is unable to work due to an accident or illness, Long Term Disability Insurance provides the money to replace their lost income.  And if they are out on disability you know that every penny counts.

It’s important to understand exactly how your Group Long Term Disability contract is structured to offset with other income sources.  Too many times no one takes notice until an employee actually goes out on disability.

Disability Payment Offsets

As an employer, you want to make sure your employees are taken care of but you also don’t want your employee who is out on long term disability earning more money from their disability coverage than they were earning while actively at work.  What is the employees’ incentive to come back to work?  To avoid a situation such as this, most disability policies have provisions that reduce or offset the Long Term Disability (LTD) benefits being paid when an employee has other sources of income.  Below is a summary of the five most common offsets for total disability claims: […]

By |May 15th, 2016|Uncategorized|Comments Off on Understand Your Group Long Term Disability Plans Income Offsets Before an Employee goes out on Disability

Start to Phase 2 of HIPAA Audit Program Announced by HHS

The U.S. Department of Health and Human Services’ Office for Civil Rights (OCR) announced on March 21, 2016 the start of phase 2 (Phase 2) of the Health Insurance Portability and Accountability Act (HIPAA) Audit Program. Phase 2 will consist of more than 200 desk and onsite audits of both covered entities and business associates to determine their compliance with HIPAA’s Privacy, Security, and Breach Notification rules. By contrast, the Phase 1 pilot audit program conducted in 2011 and 2012 targeted only covered entities and involved just 115 audits.

According to an OCR press release, Phase 2 will include “a broad spectrum of audit candidates” that OCR will randomly select from pools that “represent a wide range of health care providers, health plans, health care clearinghouses and business associates.”

OCR is currently verifying contact information and sending initial emails to potential subjects with a pre-audit questionnaire that will gather data about the “size, type, and operations of potential auditees.” Based on pre-audit questionnaires, OCR will choose the final pool of auditees and send letters shortly. OCR has stated that it is “committed to transparency about the process” and will post on its website updated audit protocols that have been developed based on the Phase 1 HIPAA Audits. Phase 2 Audits will include both desk and on-site audits for covered entities and their business associates. […]

By |April 12th, 2016|Compliance|Comments Off on Start to Phase 2 of HIPAA Audit Program Announced by HHS

EEOC Reminded that Congress Writes Laws- But Will It Do Any Good?

“I’m just a bill, yes I’m only a bill, and I’m sitting here on Capitol Hill…”

A generation of Americans first learned of the legislative process from the 1976 “Schoolhouse Rock” cartoon segment called “I’m Just a Bill.”  In the song, “Bill”—a fictitious bill proposed in Congress—starts as an idea by “some folks back home.”  A Congressman hears the call and brings Bill to Washington, where he first sits in committee and then is passed by the House of Representatives and then by the Senate.  If Bill is lucky enough to get signed by the President, he becomes law.  Bill reminds us near the end of the song that “it’s not easy to become law.” That’s true.  But the sequel to “I’m Just a Bill” might focus on the desire of some federal regulators to rewrite the laws after the process described in “I’m Just a Bill” is completed.

A case in point:  the Equal Employment Opportunity Commission’s (EEOC’s) position on the use of health risk assessments, biometric screening and other wellness-related tools (collectively referred to in this Alert as “HRAs”) used by employers across the country in their fight to control health insurance costs. […]

By |January 13th, 2016|Compliance, Medical, Wellness|Comments Off on EEOC Reminded that Congress Writes Laws- But Will It Do Any Good?

Happy New Year- ACA Reporting Deadlines Delayed


The Internal Revenue Service (IRS) issued Notice 2016-4 on Dec. 28, 2015 to delay the due dates for filing and furnishing forms under Section 6055 and 6056.

  • The due date for furnishing forms to individuals has been extended from Feb. 1, 2016, to March 31, 2016.
  • The due date for filing forms with the IRS has been extended from Feb. 29, 2016, to May 31, 2016 (or, from March 31, 2016, to June 30, 2016, if filing electronically)


The IRS is encouraging employers and other coverage providers to furnish statements and file information returns as soon as they are ready.

The new deadlines are more generous than prior extensions and apply automatically to all reporting entities. No request or additional documentation is required. Entities that had previously requested extensions will not be receiving formal approval of those requests. […]

By |December 30th, 2015|Uncategorized|Comments Off on Happy New Year- ACA Reporting Deadlines Delayed

An Important Reminder to Plan Fiduciaries: Hi-Lex v. Blue Cross

Hi-Lex v. Blue Cross: An Important Reminder to Plan Fiduciaries

For at least the last generation plan sponsors, and particularly plan fiduciaries, have devoted (or should have been devoting) significant time and energy monitoring the fees charged to participants in their 401(k) plans and ensuring appropriate disclosures. The Hi-Lex Controls, et. al. v. Blue Cross Blue Shield of Michigan case should serve as an important reminder to group health plan fiduciaries that under the Employee Retirement Income Security Act of 1974 (“ERISA”) monitoring plan fees is equally important in both their retirement and group health plans.

The Case
Hi-Lex Controls, Inc., an automotive parts supplier with approximately 1,300 employees, maintained a self-insured group health plan. Blue Cross and Blue Shield of Michigan (“BCBSM”) served as the plan’s third-party administrator. BCBSM’s services were provided pursuant to an “administrative services only” (“ASO”) agreement. Under the terms of the ASO agreement, BCBSM administered claims for the Hi-Lex self-insured group health plan (the “Plan”). BCBSM negotiated fees and established access within its provider networks to Plan participants. BCBSM was paid a monthly administrative fee based on the number of employees per month (“PEPM”) enrolled in the Plan. […]

By |November 6th, 2015|Compliance, Employee Benefits|Comments Off on An Important Reminder to Plan Fiduciaries: Hi-Lex v. Blue Cross

2015 ACA Health Reimbursement Arrangement (HRA) Reporting- IRS Reverses Course!

The IRS has reversed its earlier guidance regarding 2015 ACA reporting regarding HRAs.

An employer that has an insured major medical plan and an HRA in place, for which an individual can only enroll in if they are in the major medical plan, is not required to report the HRA coverage for an individual covered by both arrangements. If the employee has an HRA through one employer and medical coverage through another employer (such as spousal coverage) then each employer must report separately.

This relief by the IRS is great news for employers as separate reporting for the HRA will not be required. Contact any of the Broad Reach Benefits staff for complete details.

By |September 18th, 2015|Health Care Reform, Legislation|Comments Off on 2015 ACA Health Reimbursement Arrangement (HRA) Reporting- IRS Reverses Course!