Call 800-272-1144

Employee Benefits Adviser

This is the Employee Benefits Adviser category of the Broad REach Benefits blog. At Broad Reach Benefits, we focus on employers that have between 30 and 500 benefit eligible employees. We’re employee benefit specialists, not a big box brokerage firm or payroll company with a sales force peddling policies.

Medicare Part D Changes May Impact Creditable Coverage Status of Employer Plans

The Inflation Reduction Act of 2022 (IRA) includes several cost-reduction provisions affecting Medicare Part D plans, which may impact the creditable coverage status of employer-sponsored prescription drug coverage beginning in 2025.

Employers that provide prescription drug coverage to individuals who are eligible for Medicare Part D must inform these individuals and the Centers for Medicare and Medicaid Services (CMS) whether their prescription drug coverage is creditable, meaning that the employer’s prescription drug coverage is at least as good as Medicare Part D coverage.

CMS’ Draft Part D Redesign Program Instructions state that given the significant changes that the IRA made to Medicare Part D, one of the methods for determining whether employer-sponsored prescription drug coverage is creditable will no longer be valid as of calendar year 2025. These draft program instructions are subject to change, and CMS will issue final program instructions for 2025 after considering the public comments received in response to the draft program instructions.

Creditable Coverage Determination

A group health plan’s prescription drug coverage is considered creditable if its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage, as demonstrated through the use of generally accepted actuarial principles and in accordance with CMS guidelines. In general, this actuarial determination measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage is at least as much as the expected amount of paid claims under the Medicare Part D prescription drug benefit. For plans that have multiple benefit options (for example, PPOs, HDHPs and HMOs), the creditable coverage test must be applied separately for each benefit option.

Under existing CMS guidance, there are a few different ways for an employer to determine whether its …

By |March 26th, 2024|Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Health Care Reform, Medical, U.S. Department of Labor|Comments Off on Medicare Part D Changes May Impact Creditable Coverage Status of Employer Plans
Read More

HHS Encourages Urgent Review of HIPAA Compliance Following Health Care Cyberattack

The U.S. Department of Health and Human Services (HHS) recently issued a letter addressing the cybersecurity incident impacting Change Healthcare, a unit of UnitedHealth Group. Given the “unprecedented magnitude” of this cyberattack, HHS’ Office for Civil Rights (OCR) is investigating whether these entities comply with the HIPAA Privacy, Security and Breach Notification Rules (HIPAA Rules), including whether a breach of protected health information (PHI) occurred.

OCR is also encouraging HIPAA-covered entities (e.g., health plans, health insurance issuers and health care providers) and their business associates to review their cybersecurity measures “with urgency” to ensure that health information is protected.

While many employers do not have access to PHI from their health plans, employers that use third-party vendors, such as third-party administrators (TPAs) and pharmacy benefit managers (PBMs), should investigate and verify these vendors’ cybersecurity measures during the selection process. Employers should also ensure they have business associate agreements in place that include adequate security protections for electronic PHI.

Health Care Cyberattacks

On Feb. 21, 2024, Change Healthcare, one of the largest platforms for managing health insurance billing and payments in the United States, experienced a large-scale cyberattack. This attack affected millions of health care providers and patients across the country. Cybersecurity experts have deemed the incident one of the most disruptive attacks in history.

According to OCR, ransomware and hacking are the primary cyberthreats in health care. Over the past five years, there has been a 256% increase in large breaches reported to OCR involving hacking and a 264% increase in ransomware. In 2023, hacking accounted for 79% of the large breaches reported to OCR.

Compliance Resources

Safeguarding PHI is a top priority for OCR. To help covered entities and business associates protect their systems from cyberattacks, OCR …

By |March 25th, 2024|Compliance, Employee Benefits, Employee Benefits Adviser, Human Resources, Legislation|Comments Off on HHS Encourages Urgent Review of HIPAA Compliance Following Health Care Cyberattack
Read More

Legal Alert- Medicare Part D Disclosures due by Feb. 29, 2024 for Calendar Year Plans

Each year, group health plan sponsors are required to complete an online disclosure form with the Centers for Medicare & Medicaid Services (CMS), indicating whether the plan’s prescription drug coverage is creditable or non-creditable. This disclosure requirement applies when an employer-sponsored group health plan provides prescription drug coverage to individuals who are eligible for coverage under Medicare Part D.

CMS Disclosure Deadline

The plan sponsor must complete the online disclosure within 60 days after the beginning of the plan year. For calendar year health plans, the deadline for the annual online disclosure is Feb. 29, 2024 (since 2024 is a leap year).

In addition to the annual disclosure requirement, the disclosure to CMS must be made whenever any change occurs that affects whether the coverage is creditable. More specifically, within 30 days after any change in the plan’s creditable coverage status or after the termination of a plan’s prescription drug coverage.

Online Disclosure Method

Plan sponsors are required to use the online disclosure form on the CMS creditable coverage website. This is the sole method for compliance with the disclosure requirement unless the entity does not have internet access.

The disclosure form lists the required data fields that must be completed in order to generate the disclosure notice to CMS, such as types of coverage, number of options offered, creditable coverage status, period covered by the disclosure notice, number of Part D-eligible individuals covered, date the creditable coverage disclosure notice is provided to Part D-eligible individuals, and change in creditable coverage status.

CMS has also provided guidance and instructions on how to complete the form.

Action Steps

To determine whether the CMS reporting requirement …

By |February 5th, 2024|Compliance, Employee Benefits, Employee Benefits Adviser, Medical|Comments Off on Legal Alert- Medicare Part D Disclosures due by Feb. 29, 2024 for Calendar Year Plans
Read More

IRS Announces 2024 Retirement Plan Limits

The Internal Revenue Service (IRS) has released Notice 2023-75, containing cost-of-living adjustments for 2024 that affect the amounts employees can contribute to 401(k) plans and individual retirement accounts (IRAs).

2024 Increases

The employee contribution limit for 401(k) plans in 2024 has increased to 23,000, up from $22,500 for 2023. Other key limit increases include the following:

  • The employee contribution limit for IRAs is increased to $7,000, up from $6,500.

 

  • The IRA catch‑up contribution limit for individuals aged 50 and over remains unchanged at $1,000 for 2024 (despite this limit now including an annual cost‑of‑living adjustment because of legislation enacted at the end of 2022, referred to as “SECURE 2.0”).

 

  • The employee contribution limit for SIMPLE IRAs and SIMPLE 401(k) plans is increased to $16,000, up from $15,500.

 

  • The limits used to define a “highly compensated employee” and a “key employee” are increased to $155,000 (up from $150,000) and $220,000 (up from $215,000), respectively.

 

  • The annual limit for defined contribution plans (for example, 401(k) plans, profit-sharing plans and money purchase plans) is increased to $69,000, up from $66,000.

 

  • The annual compensation limit (applicable to many retirement plans) is increased to $345,000, up from $330,000.

 

  • The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $7,500. Therefore, participants in these plans who are 50 and older can contribute up to $30,500, starting in 2024.

The income ranges for determining eligibility to make deductible contributions to traditional IRAs, contribute to Roth IRAs and claim the Saver’s Credit (also known as the Retirement Savings Contributions Credit) also increased for 2024.

More Information

The IRS’s news release contains more details on the cost-of-living adjustments for …

By |November 1st, 2023|Broad Reach Benefits, Employee Benefits, Employee Benefits Adviser, Employee Communications, Human Resources, IRS, Legislation, Retired, Voluntary Benefits|Comments Off on IRS Announces 2024 Retirement Plan Limits
Read More

Biden Administration Announces Plan to Ban Medical Debt From Credit Scores

On Sept. 21, 2023, the Biden administration announced an initiative that would prevent unpaid medical bills from impacting Americans’ credit scores. If enacted, this regulation could prevent medical debt from lowering consumer credit scores. Low credit scores can make it more difficult to get hired, rent an apartment or receive a loan. This initiative has the potential to impact tens of millions of Americans who have medical debt on their credit reports, making it one of the most significant federal actions to tackle medical debt to date.

An analysis by the Kaiser Family Foundation found that credit reporting—a threat used by hospitals to induce patients to pay their bills—is the most common collection tactic used by hospitals. Additionally, researchers at the Consumer Financial Protection Bureau (CFPB) have found that medical debt isn’t an accurate predictor of consumers’ creditworthiness, which undermines the worth of including it in a credit report. Nevertheless, a 2022 report by the CFPB found that medical bills account for about 58% of all uncollected debts reported to consumer credit reporting bureaus.

In 2022, the three largest credit agencies, Equifax, Experian and TransUnion, voluntarily announced that they would no longer include certain medical debt on credit reports, such as debts under $500 and paid-off bills. However, the agencies’ actions excluded millions of patients with larger medical debts on their credit reports, prompting numerous groups, such as the National Consumer Law Center and Community Catalyst, to advocate for further action.

Representatives of the debt collection industry and hospital leaders have argued that, if enacted, such regulations could prevent medical providers from getting their bills paid, which could cause more medical care providers to require upfront payment for care. Furthermore, opponents of the proposed initiative have noted …

By |September 24th, 2023|Broad Reach Benefits, Employee Benefits Adviser|Comments Off on Biden Administration Announces Plan to Ban Medical Debt From Credit Scores
Read More

Open Enrollment 2024 – Health Savings Accounts (HSAs)

Employers who sponsor high deductible health plans (HDHPs) that are compatible with health savings accounts (HSAs) should prepare for open enrollment by:

  • Ensuring that employees understand how HSAs work, including the benefits of opening an HSA; and
  • Updating their HDHP’s design and communicating any plan changes to employees.

There are many advantages to selecting an HDHP/HSA option at open enrollment time—for example, HSAs have three levels of tax savings and HDHPs typically have lower monthly premiums. However, many employees may not be aware of these advantages or understand how the HSA rules apply to them. Employers should help their employees understand key HSA features during the open enrollment process.

In addition, to be compatible with HSAs, HDHPs must comply with IRS limits regarding the plan’s annual deductible and out-of-pocket maximum. The IRS adjusts these limits for inflation each year. Employers should review their plan limits to make sure they comply with the limits for the plan year beginning on or after Jan. 1, 2024.

HDHP Plan Design

To prepare for open enrollment, employers with HDHPs should:

  • Review their plan’s minimum deductible and out-of-pocket maximum limits to ensure they comply with the IRS’ limits for 2024;
  • Review coverage options for telehealth and COVID-19 testing and treatment; and
  • Communicate any plan changes to employees.

Communicating HSA Rules to Employees

As part of the open enrollment process, employers that offer HSA-compatible HDHPs should help their employees understand the benefits of opening an HSA and making tax-free contributions. Employees may be confused about the rules surrounding HSAs and may not realize all the advantages associated with these accounts.

Alera Group can provide sample resources for communicating the HSA rules to employees.

HSA Advantages

Open enrollment is an ideal time for employers to highlight to eligible employees the advantages …

By |August 22nd, 2023|Broad Reach Benefits, Employee Benefits, Employee Benefits Adviser, Employee Communications, Human Resources, Voluntary Benefits|Comments Off on Open Enrollment 2024 – Health Savings Accounts (HSAs)
Read More

Unemployment Claims Trend Up, Reach Highest Level Since 2021

During the week ending June 3, 2023, workers filed 261,000 seasonally adjusted new unemployment claims, an increase of 28,000 from the previous week’s revised numbers. This is the highest number of new claims since Oct. 30, 2021. Before last week, initial unemployment claims had plateaued last month.

In May, the unemployment rate increased to 3.7% from 3.4% in April, even though the economy added 339,000 jobs. May’s unemployment rate represents a seven-month high. However, despite the increase in the unemployment rate, it remains low compared to historical data.

The surge in initial unemployment claims was driven by claim spikes in Ohio and California. Unadjusted initial claims in Ohio increased by 6,345 and by 5,173 in California. This claims data includes the Memorial Day holiday; there’s typically increased volatility in claims numbers during public holidays.

The four-week moving average of unemployment claims increased by 7,500 to 237,250. The four-week moving average is considered to be an accurate measure of current labor market trends.

Takeaways

Since the rise in new unemployment claims can be attributed to increases in a handful of states, it’s likely too early to draw conclusions regarding the pace of layoffs throughout the United States. While an increase in initial unemployment claims could signal a jump in layoffs, the recent volatility of weekly unemployment claims makes it difficult to draw any definitive conclusions.

Economists had expected layoffs to increase in 2023 in response to increases in interest rates. However, this has not happened as predicted, as demonstrated by the U.S. economy’s surprisingly strong job growth in May. While the labor market continues to be stronger than previously believed, many experts still believe a mild recession may arrive during the second half of 2023 or early 2024. As these workforce trends …

By |June 12th, 2023|Employee Benefits Adviser, Human Resources|Comments Off on Unemployment Claims Trend Up, Reach Highest Level Since 2021
Read More

What Employers Need to Know About Medicaid Redeterminations

In 2020, the U.S. Congress passed the Families First Coronavirus Response Act in response to the COVID-19 pandemic, requiring states to maintain Medicaid coverage for most enrollees during the public health emergency (PHE). During this period, individuals receiving Medicaid did not have to reapply to remain eligible for benefits. In December 2022, the 2023 Consolidated Appropriations Act was passed, uncoupling Medicaid redeterminations from the PHE and establishing a timeline for states to restart the Medicaid redetermination process. As a result, as many as 15 million Americans may soon no longer be eligible for Medicaid because of redeterminations, according to U.S. Department of Health and Human Services estimates.

Medicaid provides health insurance to millions of eligible Americans with limited income and resources. Each state administers its own Medicaid program, and enrollees must apply annually to qualify for Medicaid benefits. This process is known as redetermination, renewal or recertification. The Medicaid redetermination process helps evaluate whether Medicaid enrollees are eligible for continued health coverage. Eligibility for continued health coverage depends on various factors, including changes in age, disability status, household size and income. States were able to resume annual Medicaid renewals starting April 1, 2023. This means coverage terminations have resumed for Medicaid enrollees who have been redetermined by state agencies as ineligible for Medicaid, resulting in the loss of their health care coverage. The precise date of resuming coverage terminations will vary by state.

A Primer on Stop-loss Contracts

Stop-loss insurance is coverage self-funded employers purchase to manage their health care costs and protect against unexpected or catastrophic claims by establishing a limit for the amount they pay in health claims. This coverage is not a form of medical insurance, and employers can add stop-loss insurance to an existing …

By |May 15th, 2023|Broad Reach Benefits, Employee Benefits, Employee Benefits Adviser, Employee Communications, Human Resources, Medical, Private Health Care Exchange, U.S. Department of Labor, Wellness|Comments Off on What Employers Need to Know About Medicaid Redeterminations
Read More

Attracting New Employees in the Insurance Industry

Attracting talent is more complex than ever—and the insurance industry isn’t immune from today’s labor challenges. It’s time to figure out ways to keep people engaged in current insurance roles and entice new talent to try the industry. When it comes to talent attraction, the most successful employers will be creative and find ways to make the industry appealing and a great place to start a new career and grow professionally. This article explores how employers in the insurance industry can attract new employees.

Understanding Today’s Challenges

Employee attraction is top of mind for many employers in the insurance industry. According to Zywave’s 2023 Employee Benefits Market Pulse Report, attracting, retaining, and developing talent remains a top challenge facing brokers in 2023 (50.28%), which aligns with recent years. However, in older surveys, brokers ranked attraction and retention as the third most pressing employee benefits challenge. Attracting, retaining, and developing talent moved to the top of the list as organizations struggled to fill a record-high number of job openings in 2022. There was a significant gap between the number of job openings and available workers last year, increasing competition among employers to recruit new hires and retain existing employees. As a result, employees gained the advantage in negotiations, with many feeling confident to leave their jobs to find better opportunities (e.g., higher pay, better benefits). While the labor market has shown signs this may be changing, attraction, retention, and talent development remain major concerns for brokers, and these challenges are expected to continue in 2023. 2 These issues are compounded, as the insurance industry will face some of the most significant labor losses as more baby boomers steadily retire and reduce their participation in the labor force. According …

By |April 25th, 2023|Broad Reach Benefits, Employee Benefits, Employee Benefits Adviser, Employee Communications, Human Resources|Comments Off on Attracting New Employees in the Insurance Industry
Read More

Insurers Take Steps to Overhaul Prior Authorization Processes

Insurers, such as UnitedHealthcare, Cigna, and Aetna, are announcing plans to revamp their prior authorization processes. These decisions were made as insurers await an impending federal regulation that will shorten prior authorization decision time. Prior authorization, also known as preauthorization, is when a physician must get approval from an insurer for medication or treatment before administering it.

A proposed Centers for Medicare and Medicaid Services (CMS) rule would limit the time insurers have to approve prior authorization requests. The rule is expected to be finalized in the near future. Starting in 2026, the CMS rule will require plans to respond to a standard request within seven days—instead of the current 14-day time frame—and within 72 hours for urgent requests. Physicians argue that the additional administrative steps associated with the preauthorization process can delay necessary services and increase the administrative burden.

The Changes

Major health insurers plan to revamp their prior authorization processes by boosting automation and speeding up decision-making. Starting this summer, UnitedHealthcare will reduce the use of its prior authorization process by 20% for nonurgent surgeries and procedures. The company will also implement a national “gold card” program in early 2024, allowing certain eligible providers to perform most procedures without authorization.

Cigna has removed prior authorization reviews from nearly 500 services since 2020. Around 6% of medical services for their customers are subject to prior authorization and Cigna continuously reviews the need for prior authorization on services.

Similarly, Aetna continues to review and assess utilization and the need for prior authorization requirements on select services.

What’s Next?

The CMS is expected to soon finalize its rule to streamline the prior authorization process, easing the burden on providers and patients. We’ll keep you apprised of any notable …

By |April 4th, 2023|Broad Reach Benefits, Employee Benefits, Employee Benefits Adviser, Human Resources, Medical|Comments Off on Insurers Take Steps to Overhaul Prior Authorization Processes
Read More