Apr 2, 2014

Zack Pace: Why employers with 51 – 100 employees should evaluate self-funding their health plan

In our last post, Employers with less than 101 employees and the ACA’s Fair Health Insurance Premium rules , we discussed the challenges employers with less than 101 employees that sponsor non-grandfathered fully insured plans will face in 2016.  And we cited that one way these employers can escape these onerous rules is by self-funding their plan.  In this follow-up post, we’ll briefly discuss why the Affordable Care Act’s new taxes on fully insured plans increases the financial benefits of self-funding.

First, what is self-funding? Continue reading »

Mar 26, 2014

Janet McNichol: The ROI of Wellness

There has been a lot of talk about the ROI of wellness programs lately. Some of the most discussed studies being the one published in 2010 by Harvard economist Katherine Baicker, the 2013 RAND corporation study of employee wellness and the 2014 PepsiCo disease management and wellness study. In the simplest terms: 

  • The Harvard study showed ”medical costs fall by about $3.27 for every dollar spent on wellness programs.”
  • The RAND study concluded that “Participation in a wellness program over five years is associated with lower health care costs and decreasing health care use. The average annual difference is an estimated $157, but the change is not statistically significant.”
  • The PepsiCo study demonstrated: “When we looked at each component [disease management and lifestyle management] individually, we found that the disease management component was associated with lower costs and that the lifestyle management component was not. We estimate disease management to reduce health care costs by $136 per member per month, driven by a 29 percent reduction in hospital admissions.” Continue reading »
Mar 19, 2014

Zack Pace: Offering Coverage to 70% of Your Full-Time Employees Does Not Eliminate Your 2015 Shared Responsibility Penalty Risk

If your business is subject to the Affordable Care Act’s (ACA’s) 2015 Shared Responsibility requirements and you do not currently offer coverage that is both adequate and affordable to 100% of your full-time employees, this post explains why the 70% relief provision offered in the final regulations does not eliminate your 2015 penalty risk.

Included in Treasury’s Final Guidance on Employer Shared Responsibility is relief stating that, generally, the “no coverage” penalty in 2015 will not be triggered if an employer offers Minimum Essential Coverage (MEC) to at least 70% of their employees working 30 hours or more per week (i.e. their full-time employees). This 70% relief only lasts one year and reverts to 95% in 2016. Continue reading »

Mar 7, 2014

Zack Pace:Employers with less than 101 employees and the ACA’s Fair Health Insurance Premium rules

One of the most confusing aspects of the Affordable Care Act (ACA) is its differing definitions of “large” and “small” employer.  For example, “large” employers with 50 or more full-time employees + equivalents (FTEs) are subject to Shared Responsibility, while “small” employers with less than 101 employees are subject to the Fair Health Insurance Premium rules. What’s that you say, you have less than 101 employees, and you haven’t heard of the Fair Health Insurance Premium rules?  If so, this post is for you.

First, what are the Fair Health Insurance Premium rules? Continue reading »

Feb 5, 2014

John Holmquist: 2014 for employers: Elections and more

So what do employers have to look forward to in the new year?  It is an election year so while the rhetoric on the state  and federal levels may increase, the likelihood of the enactment of additional employment laws is slim.  The federal agencies will continue to pursue the initiatives which were started in 2013.

For employers in Michigan, one of the most significant events will not occur until November when the statewide legislative and Congressional elections are held.  Organized labor will be mounting an aggressive campaign to elect legislators who will repeal the right to work legislation.  The race for governor will also be a major focus. A Democratic legislature and a Democratic governor would also increase the likelihood of the passage of a state law which would provide the same protections as contained in the proposed  ENDA legislation in  Congress. Continue reading »

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