Guest Article by Kristen Deevy, Strategic Retirement Partners

The long wait it over! The Department of Labor (DOL) has finalized its Conflict of Interest rule. The question is “Did you know you were waiting for it?” As an employer you may not have heard about this new regulation, but your financial advisors have!

The DOL rule will dramatically affect how advisors and their broker dealer or Registered Investment Advisor (RIA) firms interact with employers who sponsor ERISA retirement plans and their plan participants, especially for IRA rollovers. Most of the rule’s provisions will go into effect in April 2017 while others go online in January 2018.

Are you paying more and more for worse benefits? While some aspects of rising healthcare costs are driven by factors outside our control, there are MANY factors within our control, even for smaller employers.  The problem is that the strategies used by most brokers aren’t sustainable.

Learn how employers of all sizes, but especially with at least 20 employees, can manage their health care costs down, by taking an out-of-the box approach in multiple areas:

• Re-thinking your provider delivery model
• Focusing on paying for health improvements rather than just paying for sick care
• Heavily incenting positive health changes without costing you a dime 
• Harnessing the natural “outrage” in your employees to lower your costs
• Taking advantage of innovative product and funding designs that help you cash in on the savings achieved by the other methods (check out our Self Funding Feasibility Study to see if this is right for you!)

Much of this work is best done well before the renewal starts, so now may be a great time to get started on this type of strategy work.  Join our webinar on April 7th from 10-11:15 am to jump start your game plan for your upcoming plan year! Register now!

This event is a Webinar only.  The day prior to the Webinar, all registrants will be sent the weblink and dial-in instructions to attend the program.

While Section 125 plans seem basic on the surface, we find this to be one of the greatest areas of misunderstanding in benefit plans.  Almost all HR professionals are familiar with the basic qualifying life event rules of a Premium Only Plan, and the use-it-or-lose-it rules of a Medical Flexible Spending Account.  But there are still common questions about when an employee can add or drop coverage during the year, without the standard “life events”, as well as some interesting benefit design questions that are surprisingly governed by your Section 125 plan.

Sometimes the situations can get tricky.  How would you handle the following scenarios?

1. The owner of the company wants to make matching contribution into HSA accounts for everyone including herself, up to a set dollar limit. What requirements and limitations should she be aware of?
2. Your anniversary date is 5/1, but on 9/1 an employee wants to opt off your plan onto his spouse’s plan.  Assuming there has been no life event such as marriage, divorce, birth or death, what conditions would make this possible? 
3. You have a calendar year FSA plan with a large number of participants. On your 7/1 policy year anniversary, the company’s leadership decides to switch to a sole option High Deductible Health Plan strategy. What do you need to do for the 6 months until your FSA plan year ends?
4. You have a 10/1 plan but an employee wants to drop coverage 1/1 because they found a cheaper policy on the state or federal exchange.  Can he or she do so?

Scroll down for the answers:

1. First of all remember that HSA contributions tied to a match or to wellness incentives must be run through a Section 125 plan, subjecting it to non-discrimination and other requirements.  In this example, the owner can certainly make matching contributions to employees, but she herself, her immediate family (even if they are also employees), and anyone else who owns more than 2% of an LLC or S-Corporation may NOT participate. If the organization is a C-Corporation (including non-profits) or a government entity, there are no limitations on owners or key employees participating as long as discrimination tests are performed and passed.
2. There are two optional events which employers CAN choose to designate as qualifying events, but these must be written into your Section 125 Cafeteria plan document.  We also recommend writing them into your overall ERISA Wrap Plan Document and Summary Plan Description which govern your plans (if you don’t have one of these documents, let us know and we can help!). These two events are:  availability of other coverage (ie the open enrollment) such as that of another employer, a spouse, or a parent; and a significant change in the cost or coverage you are offering.  If the employer has made these two events available as qualifying events, the employee in question could drop coverage on 9/1 to take coverage with another job they have, or with a spouse or parent. 
3. Implementing an HDHP plan mid-way through your FSA plan year can be tricky if you don’t plan in advance for it. First of all, it should be communicated that anyone who made an FSA election, is bound by that election for the entire calendar year, even if they’ve used up the money before you make the plan change. In this case, where everyone is moving to the HDHP option since the company is choosing to eliminate other plans, this means that anyone who participated in the FSA that year may not contribute to an HSA account (or receive employer contributions) until the end of the FSA plan year. We recommend that the employer hold off on contributing for all employees until the start of the new year to avoid confusion, and perhaps consider a one-time contribution in the new year equal to some or all of what they would have contributed had the employees all been eligible.  We also recommend that if your FSA plan offers a rollover feature, that the rollover amounts be converted to a limited purpose FSA plan (for non-medical expenses only) so that employees can begin using the HSA accounts 1/1.  Finally, we’d recommend moving both the FSA plan year (if you’re keeping such a plan at all) to match your anniversary date of 7/1, as well as changing your deductible to run on your 7/1 policy year rather than calendar year, if your carrier will allow it.  (Incidentally, this same scenario is present for any employee changing benefits in a company with a dual option offering, if their medical plan year does not match their FSA plan year. Some employers think they have to have a 1/1 effective date to implement an HDHP/HSA plan for these reasons, but as long as you can match your deductible year up with the medical and FSA plan year, any plan anniversary will work just fine.)
4. Yes.  Since the issuing of IRS Notice 2014-55, there is now a new optional qualifying event for all Section 125 plans, allowing individuals to opt out if they purchase coverage in the state or federally-facilitated marketplaces, if the employer chooses to include this in their plan document.  They may only return to the group coverage, however, at your regular open enrollment period or with a traditional life event.  Please note that while they can drop coverage to enroll during the annual open enrollment period (typically including 1/1, 2/1, or 3/1 effective dates), they cannot drop coverage to go to the exchange at other times of the year unless they have another qualifying event.

Guest Article by Brad Cooper, CEO of US Corporate Wellness

The research is in, and it warrants an exclamation point!  An effective employee wellness program will provide a 125-600% ROI or more through decreased health care, sick time and disability costs, as well as improved recruitment, retention and employee engagement (and that doesn’t take into account the personal enhancements participants experience in their own lives!).  The result of this research has been a two-fold increase in the number of organizations that have launched wellness programs for their employees in recent years.  Only one problem – the first word in the phrase “Effective Employee Wellness Program.”

There are many approaches to employee wellness.  Common entry level approaches include holding an internal “biggest loser”-like contest or providing paid memberships at the local health club. 

While both of these types of programs provide proof to employees (and customers) that the organization is somewhat serious about really doing something beyond lip service, their true effectiveness is limited.  With the “biggest loser”-type of contest, 97% of the people who lose weight will gain it back without an ongoing process.  And in terms of paid health clubs, you’re likely to find that – while a great tool as part of a personalized program – when done as a singular approach, this typically only provides a benefit for 10-20% of employees, the vast majority of whom would have joined a gym anyway.  Both scenarios are missing a key element that can result in participation – and movement – by 50-70% or more of your employees. What is that key element that will move your program from “nice to have” to truly “effective”? 

Personalization

As you’ve probably noticed many times over, every employee is different.  They are each unique in their goals, histories, situations and pursuits.  As a result, generic, impersonal approaches to employee wellness simply don’t work over the long haul.  Only personalized approaches create the desired results.  Here are a few tips to get you started:

• Avoid “One Size Fits All” approaches.  We’ve found a clear trend when it comes to employee wellness – the popular “one size fits all” actually turns out to be “one size fits NONE.”  As you look over your proposed approach (or review your wellness vendor’s proposal), think about a few of your employees on opposite ends of the spectrum.  If it won’t meet the needs of these “extremists,” there’s a good chance it won’t work for your organization
• Build a “customization” ability into the program.  People adjust, grow, back-slide, excel, and change their goals.  For an employee wellness program to be effective, it needs to be able to move along with the individual.  An employee who’s never even owned a pair of running shoes the first 42 years of her life might lose 15 lbs and decide to train for and run a half marathon down the road.  Does the program adjust along with her life?  Or is it all just about weight loss?
• Take Temperament into account.  This brief article is obviously not intended to review the various personality or temperament styles that exist within your team.  But you see it everyday – people are inherently different in the way they approach various aspects of their lives, including wellness pursuits.  Without getting into details, it’s important for any effective wellness program to take those individual styles into account.  Simply stated – a program that’s perfect for a “Guardian” (who craves structure at the core) will be an absolute disaster for an “Artisan” (a temperament that requires freedom, options and variety), and vice-versa.  
• Involve others.  There are many ways to put this into practice, ranging from accountability groups to partnership programs.  But one thing is certain – the involvement of others is absolutely essential to achieving long-term success in the area of wellness.  “We become the people with whom we spend time” is an ageless truth that can be effectively integrated into your wellness program.

The “why” is no longer in doubt, as study after study has confirmed the ROI of employee wellness programs.  But as these programs gain acceptance and a broader range of providers step into the marketplace, the “how” is still far from consistent.  As you look for ways to maximize your ROI, be absolutely certain that “personalization” is a central part of the equation as you create a one size fits ONE approach to improving the lives of your employees (and as a result – your own bottom line).

Brad Cooper is CEO of US Corporate Wellness, Inc., the only Colorado-based firm to earn Full Accreditation as a Comprehensive Wellness Provider through URAC and an organization known for helping create meaningful wellness program strategies.  He can be reached personally at 303-521-1570 or This email address is being protected from spambots. You need JavaScript enabled to view it..  More information and a special report on integrating temperament into your wellness program strategy are available by emailing This email address is being protected from spambots. You need JavaScript enabled to view it..

On Friday, December 18th, Congress passed and the President signed a very significant Omnibus spending bill.  This bill includes several tax relief measures related to the ACA:

• A two year delay (from 2018 to 2020) on the Excise Tax, commonly known as the Cadillac Tax
• A two year moratorium (2017-18) on the medical device tax that is currently in effect
• A one year moratorium (2017) on the ACA insurer tax which has been built into all fully insured premiums since 2014

Each of these changes is a temporary rather than permanent elimination of these taxes. The moratorium on the latter two taxes, since they are already in effect, may result in a slight easing of your 2017 renewal increase if you have a fully insured medical plan (self funded plans are not subject to the health insurer tax, which is by far the larger of the two).  In the absence of new legislation to make the changes permanent, the restoring of the insurer tax two years later could then bump up the 2019 fully insured renewal increases, much as employers experienced in 2014 when this tax first went into effect.

The great debate that will continue is whether these bills increase the likelihood of eliminating the taxes altogether.  While many employers are in favor of permanent elimination, the costs of even the temporary elimination could result in a significant addition to the national deficit, since there were no corresponding “pay for’s” in the legislation to replace the lost revenue. Permanent elimination could add quite a bit more to the deficit, which affects us all as taxpayers.

The spending bill also included some notable features unrelated to the Affordable Care Act, such as the extension of healthcare benefits for 9/11 first responders, the removal of the ban on U.S. exports of crude oil, and an extension of a business tax credit for research and solar/wind credits, as well as other popular tax deductions. Notably for employers with Section 132 pre-tax parking and transit benefits, the bill awarded equal status between transit and parking, allowing a monthly income exclusion of up to $250 for both transit passes/vanpools as well as parking.

If you have any questions about the impacts of this bill on your ACA planning or compliance, please This email address is being protected from spambots. You need JavaScript enabled to view it.

It's not easy being an employer these days, and Benefits can be one of the most challenging topics of all.  You've got new compliance obligations coming in 2016, and costs are always creeping up.  How do we tackle these head on?

Get a jump start on your planning with our free webinar on December 15th, called 2016: What’s Ahead for Benefits.  

In this webinar we'll cover:

• 2016 Compliance obligations under the Affordable Care Act
• Compliance under ERISA, which has been around 40 years but most employers still don't comply on their health plan!
• Some top cost containment strategies that successful employers are using to reign in their healthcare costs
• Technology to help you deal with benefits and HR issues like PTO and employee onboarding much more painlessly

Register today!   

2015 Reinsurance Fees are due soon for partially self-funded plans.  These fees began in 2014, and were created by the ACA to stabilize the individual insurance markets for three years after the elimination of medical underwriting. The fee is $44 per average covered life (both employees and dependents) on the health plan in 2015. The fee was $63 last year and will be $27 in 2016, the final year of the program.

Partially self-funded plans need to take action soon by reporting their average number of covered lives for the first 9 months of 2015 to The Department of Health and Human Services (HHS) by the deadline of November 16th, 2015.  Some third-party administrators will provide assistance, at least with tallying the membership, but the self-funded groups themselves are ultimately responsible for reporting their enrollment counts and paying their fees.

HHS has outlined several methodologies for counting the average number of covered lives:

• Actual Count: Count the total covered lives for each day of the plan year and divide by the number of days in the plan year.
• Snapshot Dates: Count the total number of covered lives on a single day in a quarter (or more than one day) and divide the total by the number of dates on which a count was made. The date or dates must be consistent for each quarter. We expect this to be the most common method.
• Snapshot Factor: In the case of two tiered coverage, determine the sum of: (1) the number of participants with self-only coverage, and (2) the number of participants with other than self-only coverage multiplied by 2.35, then use the Snapshot Date method as above.
• Form 5500 Method (for those with 100+ participants):  Assuming the coverage allows for dependents to enroll, the average number of total lives is the sum of total participants covered at the beginning and the end of the plan year, as reported on the Form 5500.

Whichever method they choose, self-funded plans need to upload their covered lives data into www.Pay.gov, and submit the form by November 16, 2015.  No fee payment is due on this date.  You can either pay the fee in one installment on January 15th of $44 per covered life, or pay 5/6 of it on that day and the remainder on 11/15/16.  Most employers will simply pay it all in January and get it over with.

Here’s a recap of the payment schedules and deadlines:

2015 payment schedule:

• Nov 16, 2015 – Membership counts due to HHS via pay.gov
• Jan 15, 2016 – Due date for making full or partial payment.  Please note if you plan to pay early, payment cannot be made within 30 days of membership submission to pay.gov.
• Nov 15, 2016 – Due date for making the second installment, if paying in two installments.  This is also expected to be the reporting deadline for the 2016 enrollment, and the cycle starts all over.

For Fully Insured plans, the Reinsurance Fee is already being calculated in your premium.  There is nothing further you need to do. Health Reimbursement Arrangements, a type of self-funded plan that does have to report and pay PCORI fees each July, are NOT subject to this reinsurance fee.

If you have any questions, see the Frequently Asked Questions at https://www.pay.gov/WebHelp/HTML/payments_frequently.html, or justThis email address is being protected from spambots. You need JavaScript enabled to view it.

This September 16th marked the 10 Years since the founding of Fall River Employee Benefits, and we celebrated by hosting an Open House attended by dozens of clients and partner organizations. We are so thankful for the support of all of the wonderful people who have contributed to our success over this decade.

In the ten years we have been business, we have tried to give back to our community through:

• Publishing over 300 educational articles via our monthly newsletter, the Fall River Journal
• Delivering almost 100 free educational seminars and webinars on healthcare cost containment strategies and compliance issues
• Donating tens of thousands of dollars to the United Way and other important charities in our communities, including many of our own non-profit clients
• Awarding thousands of dollars in direct scholarships through the Fall River Inspiration Scholarship (http://fallriverbenefits.com/meet-fall-river/inspiration-scholarship)
• A number of service projects allowing us to directly volunteer  in the community

We are so grateful for our many blessings, which include fabulous clients, an amazing team, and a brand new office building we purchased and into which Fall River recently moved.  Thank you again to all of you who have been a part of us living our dream of being the most proactive and innovative healthcare benefits broker on the Colorado Front Range.