If you’re in an industry with significant turnover and varied work schedules, a Minimum Value Plan may be an affordable way to meet the requirements of the Affordable Care Act.
A Minimum Value Plan is one that pays at least 60% of the total allowed cost of benefits expected under the plan. And while a traditional fully insured plan might cost $300 per month for employee-only coverage, a minimum value plan may cost just over $100 while still providing ACA-mandated care and coverage for inpatient hospitalization.
Determining Minimum Value
Businesses may need help determining that their plan reaches “minimum value” under the ACA. To meet this standard, the plan must pay at least 60% of the total allowed cost of benefits, which can be a moving target. Recent regulations also require that minimum value plans must offer substantial coverage for both inpatient hospitalization and physician services.
It should also be noted that minimum value plans must still offer “minimum essential coverage” and coverage that is considered “affordable” under the ACA. Offering such a plan, without meeting these requirements, may still expose your organization to liability under ACA employer shared responsibility rules.
Though minimum value plans can be an affordable solution, future growth may be a concern, since only organizations with fewer than 50 full-time employees and full-time equivalents are exempt from ACA coverage requirements.
New rules mandated by the Department of Labor could affect many small businesses, driving up labor costs and creating more red tape. These rules, effective on December 1, 2016, raise the salary threshold for eligible workers from $23,660 to $47,476 and to $134,004 for highly compensated employees. This means that salaried workers earning less than $47,476 will now be eligible for time-and-a-half for every hour they work beyond 40 hours per week. While the rules were intended to help millions of workers, they assume that every business will absorb the increased costs and pay overtime, rather than limiting hours for salaried employees.
Research by the National Federation of Independent Business shows that nearly half of all small businesses will be affected by the mandate. NFIB foresees a slowdown in productivity if salaried employees are forbidden from exceeding 40 hours per week. Another concern is that some employees may be converted from salaried to hourly, effectively receiving a demotion.
The rules also include a mechanism to automatically update the salary and compensation levels every three years in order to ensure that they continue to provide useful and effective tests for exemption.
With research showing that the average cost of healthcare surpassed $11,000 per employee in 2015, stretching every healthcare dollar is a must. Since self-funding is the foundation from which so many cost control strategies emerge, we encourage you to take this step if you haven’t already done so.
Understand the Needs of Your Group
Since every employer group is unique, it’s imperative that you look closely at demographics, prior claims and medical conditions. The availability of meaningful data is one of the biggest advantages of a self-funded plan, and key to making sure that those with chronic conditions such as diabetes or hypertension are receiving the treatment and attention they need. If your administrator isn’t helping in this critical area, you have the wrong administrator!
Self-funded health plans involve several parts that need to be working together. If you think healthcare is complex, put yourself in the shoes of your members and their families. Programs such as utilization review, hospital pre-certification, disease management and healthcare coaching can go a long way in managing costs. Services like patient advocacy and telemedicine can help members get the care they need in an efficient setting. For example, while office visits cost about $130, a telemedicine visit can be equally effective at a cost of about $40. With so many variables available today, it’s easy to see why customer service and care coordination are as important to your bottom line as they are to your employees.
Education and Wellness
Once a self-funded plan design and professional administration are in place, employee education and wellness integration must follow. Few factors influence healthcare costs more than lifestyle choices and the need to make informed buying decisions. And whether it involves understanding benefits or choosing a high quality, efficient provider, studies show that members need more support. To help in this area, many TPAs are integrating online access to comparative data on costs and providers.
When you consider that we can only manage what we can measure, delivering meaningful information to members, when they need to make a healthcare decision, should result in happier, healthier employees and lower costs for all.
A new report from the U.S. Equal Employment Opportunity Commission (EEOC) highlights best practices for employers to prevent and respond to workplace harassment.
Harassment is a form of employment discrimination that violates Title VII of the Civil Rights Act (Title VII), the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA). The EEOC defines harassment as unwelcome conduct that is based on race, color, religion, sex (including pregnancy, sexual orientation, and gender identity), national origin, age (40 or older), disability, or genetic information.
Harassment becomes unlawful where enduring the offensive conduct becomes a condition of continued employment, or the conduct is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive.
According to the EEOC report, employers should:
- Foster an organizational culture in which harassment is not tolerated;
- Adopt and maintain a comprehensive anti-harassment policy (which prohibits harassment based on any protected characteristic, and which includes social media considerations) and establish procedures consistent with the best practices outlined in the report;
- Ensure that any such anti-harassment policy–especially details about how to complain of harassment and how to report observed harassment–is frequently communicated to employees, in a variety of forms and methods;
- Ensure that where harassment is found to have occurred, discipline is prompt and proportionate to the severity of the infraction. Discipline should be consistent, and not give (or create the appearance of) undue favor to any particular employee; and
- Dedicate sufficient resources to training middle-management and first-line supervisors on how to respond effectively to harassment that they observe, that is reported to them, or of which they have knowledge or information–even before such harassment reaches a legally-actionable level.
Note: Employers may have specific obligations regarding harassment under state or local laws (e.g., training or notice requirements and/or additional protected classes).
More information regarding employer responsibilities under federal nondiscrimination laws may be found in our section on Discrimination.
The U.S. Department of Labor and other federal agencies have released two proposed rules revising the Form 5500 and Form 5500-SF Annual Returns/Reports that are required to be filed by certain employee benefit plans.
Among other changes, the proposed rules would:
- Introduce basic reporting requirements for all group health plans that have fewer than 100 participants and are covered by Title I of the Employee Retirement Income Security Act (ERISA)–most of which are currently exempt from reporting requirements;
- Create a new schedule (Schedule J), by which applicable group health plans would satisfy certain ERISA reporting requirements added by the Affordable Care Act (ACA); and
- Revise the Schedule C reporting requirements to more closely track the information that plan service providers are required to disclose to plan fiduciaries.
The target for implementing the proposed revisions is the Plan Year 2019 Form 5500 Series Annual Returns/Reports, though some form changes may be made earlier or later.
You may review our Benefits Notices Calendar for additional notice and disclosure requirements that apply to group health plans under federal law.
Employers that do not comply with certain requirements under a number of federal labor laws will face increased fines beginning with civil penalties assessed after August 1, 2016 (whose associated violations occurred after November 2, 2015).
Key Penalty Increases
Penalty increases announced by the U.S. Department of Labor that may be of particular interest include:
- Repeated or willful violations of the Fair Labor Standards Act (FLSA) minimum wage or overtime pay requirements will be subject to a penalty of up to $1,894 per violation (formerly $1,100);
- Willful violations of the Family and Medical Leave Act (FMLA) posting requirement will be subject to a penalty not to exceed $163 for each separate offense (formerly $110) (note: covered employers must post this general notice even if no employees are eligible for FMLA leave);
- Failure to provide employees with a Children’s Health Insurance Program (CHIP) notice will be subject to a penalty of up to $110 per day per violation (formerly $100);
- Failure to provide a Summary of Benefits and Coverage (SBC) will be subject to a penalty of up to $1,087 per failure (formerly $1,000);
- Failure or refusal to file a Form 5500 will be subject to a penalty of up to $2,063 per day (formerly $1,100); and
- Violations of the Occupational Safety and Health Administration’s posting requirement will be subject to a maximum penalty of $12,471 for each violation (formerly $7,000).
Our Compliance by Company Size chart features a summary of key federal labor laws that may apply to a company based on its number of employees.
Even though doctors currently have an ownership interest in just 5% of the 5,700 hospitals in the U.S., the ACA will not allow physicians to increase their ownership interest or pursue ownership in additional hospitals. The potential for conflict of interest and concerns about physician owners “cherry picking” the more profitable patients were the impetus behind Section 6001 of the Affordable Care Act that was passed in 2010.
Challenges to the law continue to come along, including a House bill sponsored by Representative Sam Johnson of Texas that would suspend the moratorium on expansion of physician-owned hospitals (POHs) for 3 years and grandfather in several POHs that were under development when the Affordable Care Act was passed. The legislation is based on a recent study that reviewed patient populations, quality of care, costs and payments in 2,186 hospitals, 219 of which were partly physician-owned. The study showed little difference in patient care between POHs and non-POHs, in fact 7 of the top 10 hospitals receiving quality bonuses in the new Hospital Value-Based Purchasing Program were physician-owned hospitals.
One study by the Centers for Medicare and Medicaid Services showed that a majority of physician owners have less than a 2% interest in their institution. As healthcare continues to evolve from fee-for-service to more value-based, there is no doubt that the debate over physician-owned hospitals will continue.