(303) 369-3200

Displaying items by tag: group health insurance broker

Sunday, 22 March 2015 18:00

Healthcare Cost Management Strategies

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 many brokers aren’t sustainable.

Learn how employers of all sizes can manage their health care costs down, by taking an out-of the box approach in multiple areas. Register now for our webinar on Tuesday, May 19th, to start taking charge of the cost factors you CAN control.


Published in Best Practices

The IRS recently releasedIRS Notice 2015-17 to give more guidance to small employers (less than 50 full time equivalents) who do not offer healthcare coverage, but do reimburse employees for the cost of their premiums when those employees purchase health care coverage on their own.

The IRS gave previous guidance that defined Employer Payment Plans in IRS Notice 2013-54, and indicated that a stand-alone plan that directly paid for or reimbursed employees for health insurance obtained elsewhere (including Medicare), would not be compliant with the Affordable Care Act, and would be subject to an excise tax (Section 4980D) of up to $100 per employee per day.  

What does Notice 2015-17 accomplish and whom does it affect?

  1. Small Employers with an Employer Payment Plan will receive transition relief until July 1, 2015 from the Code 4980D Excise Tax, and from the responsibility to file Form 8928 (utilized to self-report violations and compute the penalty tax)
  2. Transitional relief will ONLY apply to small employers who are defined as an employer who is NOT considered Applicable Large Employers (ALEs) and does NOT average more than 50 full-time employee (including full-time equivalent employees)
  3. Transition relief will be extended to June 30, 2015. Beginning July 1, 2015, an employer who does not comply may be subject to the penalties

According to the Notice, “This relief does not extend to stand-alone HRAs or other arrangements to reimburse employees for medical expenses other than insurance premiums.” So, if your company has an arrangement where no group insurance is provided but actual out-of-pocket medical expenses are reimbursed, this plan should be discontinued immediately, and if needed, any violation after 1/1/2014 should be self reported.

Employers with Employer Payment Plans not currently in compliance with the market reforms should take the necessary steps now to bring their plans into compliance. 

In the past, many were under the belief that it was OK to reimburse for individual or Medicare Premiums as long as it was post tax.  Now, it’s clear this has changed, if the employer requires proof of purchase of coverage.  The IRS’s treatment of increases in employee compensation to assist with insurance cost is spelled out as follows:

  • Employers who increase an employee’s taxable compensation and do not require that the additional compensation be used to purchase health insurance coverage do NOT create an Employer Payment Plan and are NOT considered to have a group health plan

  • If an employer requires that an employee uses the increased compensation to purchase health coverage, this does create an Employer Payment Plan and is subject to the excise tax (Section 4980D), EVEN if the payment is taxable

Medicare premium reimbursement arrangements (for Medicare Part B or D) for active employees are considered an Employer Payment Plan, and they are subject to the ACA market reforms if they cover two or more active employees. Thus, such reimbursement arrangements are not allowed.  Employers wishing to encourage employees over 65 to move over to Medicare may wish to consider a taxable and unconditional increase in compensation for those who opt off of the group medical plan, especially if more than one employee is affected.

The Notice also provided guidance for the tax treatment of the health insurance premiums of S-Corporation owners as well as certain Medicare and TRICARE-related reimbursements.  See the Notice itself for more details

Here are our recommendations:

  • Employers who have not been offering premium reimbursement plans need not take any action

  • Small employers who have been paying directly or reimbursing premiums for individual insurance contracts must stop doing so no later than June 30, 2015, to avoid the possibility of an excise tax (Section 4980D)

  • Employers who are paying Medicare premiums or reimbursement for more than one active employee should also cease this practice

  • If the employer wishes to continue helping employees with the cost of coverage, payments conditioned on proof of coverage should be converted to unconditional and taxable compensation increases

  • Employers with 50 or more Full Time Equivalent employees should immediately review any Employer Payment Plans to ensure they do not contain reimbursement for premiums and cease any pre- OR post-tax reimbursement practices they have in place

Disclaimer.  Please remember that the information we provide is not to be construed as legal advice. For further interpretation of how this topic specifically affects your group health plan, we always suggest checking with an ERISA attorney. 


Published in Healthcare Legislation
Thursday, 05 March 2015 11:59

Supreme Court Hears ACA Subsidy Challenge

In a much watched case, the Supreme Court heard arguments yesterday about a provision that could eliminate the Affordable Care Act (ACA) individual market premium assistance, depending on how it is interpreted by the Court.  This would affect the roughly 70% of states who have not established their own exchange; please note that Colorado is NOT one of the states affected. The provision relates to language in the ACA that indicates subsidies for low-income individuals are available on “Exchanges established by the states.”  The debate is between a literal reading of that language, or looking at the larger context of what Congress intended.


A ruling is not expected until late June, but expert opinion appears to be leaning slightly in favor of predictions that the Supreme Court will uphold the subsidies as currently implemented.  If it goes the other way, an estimated 7.5 million Americans in those states who did not choose to set up their own Exchange will lose access to subsidized coverage.  If too many of them choose to not purchase coverage as a result, it will likely raise premiums for those remaining, and may destabilize the individual insurance marketplaces in those states.


Keep in mind there is NO impact on insurance in Colorado, regardless of the outcome of the case.

Published in Healthcare Legislation
Wednesday, 18 February 2015 17:00

Should You Survey Your Employees About Benefits?

An employee survey can give you some great insight into what employees think about your current benefit package, but could you also be setting yourself up for negative responses and backlash?  There are both pros and cons of asking your employees to complete a benefit survey.

One of the best reasons to do a survey is to gauge your employees’ satisfaction level with the current benefit package offered at the company.  Are there benefits that are glaringly missing in your package that would increase their satisfaction?  Are there benefits being offered that are not important to employees and possibly being underutilized?  You can even have your employees rank the separate benefits in the order of importance to them.  

If you are a smaller group or fully insured, an employee survey may be the only way to find out what your medical utilization is on your plans.  You can ask employees to answer questions about whether they met their deductible or out-of-pocket maximum that year.  You can ask how many times they go to the doctor for preventive care visits or for illness.  You can also ask how many prescriptions they fill in a month and what the average cost of those medications is.  This information can then be used to target certain plan features that may better fit the needs of your population.

If you are thinking about implementing a wellness program, you can also find out what type of services and programs your employees might value most.

One of the drawbacks of doing a survey is that if you ask what employees want, it may create an expectation that they will get what they ask for.  If the budget is tight that year and the requested benefits can’t be offered, there may be some dissatisfaction over that decision.  One way to solve this is to ask them to rank priorities or pose a tradeoff of what they would be willing to give up to get something else that is more important to them. If you ask about their personal plan utilization, you might receive a little grumbling.  We recommend three ways to cope with that:

  1.  Explain the reasons you are asking for personal info;

  2.  Stress that the survey is anonymous; and

  3.  Emphasize that you as the employer care about their benefits package and want to make sure the plans are meeting their needs.

Fall River offers employee surveys to our clients as part of our pre-renewal planning.  If a company is unsure about their next steps in the benefits arena, a survey can give valuable information about carrier or plan changes that need to be made, employer contribution changes to consider, and benefits that should be added or done away with.  We will often do a survey for our new clients, which many times reveal problems that have not been addressed in the past.  Companies can sometimes uncover areas of spending on one item that could be better spent on a benefit that employees value much more.  

In our experience, the risk of doing an employee survey is usually outweighed by the beneficial information you receive.  Feel free to This email address is being protected from spambots. You need JavaScript enabled to view it. for more ideas and suggestions on making a survey work for your group!


Published in Best Practices
Tuesday, 11 November 2014 17:00

Make Your 2015 Compliance Game Plan

It's almost 2015.  Is your benefit compliance game plan ready? 

We'll help you create the plan you need to ensure you are ready for the coming year:

  • What you need to do in 2015 to meet ACA requirements and deadlines;
  • An overview of what all private employers MUST do to comply with ERISA; and 
  • The most common mistakes employers make on Section 125 plans.

Join us on Wednesday, December 17th, from 10-11 am to learn the latest up-to-date information. Register now to get your game plan in place!


Published in Best Practices
Monday, 03 November 2014 17:00

Do You Need to Amend your FSA Plan?

Many employers have calendar year Flexible Spending Account (FSA) plans even if their benefits renew in a different month.  Just a reminder this time of year – you may need to amend your FSA plan document as your plan anniversary approaches.  Here are three reasons you may need to make a change:

  • You want to take advantage of the inflation indexing on the Healthcare FSA.  Beginning January 1, 2015, the annual allowable dollar limit for employee contributions for Healthcare Flexible Spending Accounts (FSAs) will increase $50 to $2,550. Plan sponsors are not required to adopt the new limit; however, for those employers-sponsored plan who will offer the increase an amendment to the Section 125 plan document will be needed. 
  • You want to take advantage of the $500 Rollover Provision.  Last year the Treasury Department and the IRS modified the “use-it or lose-it” rule for the FSA. Plan participants are now allowed to carryover up to $500 of their unused balances into the next plan year. If you didn’t take advantage of this last year, you may wish to amend your plan document this year to do so. 
  • You want to add a grace period.  If you are not using the $500 Rollover, you may add a Grace Period.  This allows employees to incur additional expenses during the first 2 ½ months of the next plan year to spend any unused funds from the current plan year. This is in addition to the “run out” period that all plans have to submit receipts after the expenses are incurred.

Keep in mind that plans cannot offer both a grace period and the $500 rollover at the same time. It must be one or the other. The only time that both would ever apply would be if an employer-sponsored plan had the Healthcare FSA set up as a rollover option, but with a grace period  on the Dependent Care Assistance Program (DCAP).   

Whichever option you choose, be sure to amend your Section 125/FSA plan document! 

Published in Best Practices
Tuesday, 21 October 2014 18:00

Commission Disclosures and Broker Transparency

When a group insurance policy is obtained, your insurance broker is paid a commission on each line of coverage.  But did you know that there is a law that requires a broker to disclose the total amount of compensation they receive from your insurance carriers? 

In 2009 a Colorado state law was established requiring insurance brokers to notify their clients about the standard compensation earned from the policies that make up their employee benefits package. Standard Compensation includes a flat dollar amount or percentage commission the insurance company pays the broker for selling their insurance policy.  

  • This type of compensation MUST be disclosed after a new policy is selected by the client and coverage begins
  • A disclosure notification must be mailed, hand delivered by the broker or emailed to the client
  • The broker will keep a copy of the disclosure for the current calendar year and two years prior

Standard compensation does not include renewal commissions. Disclosures are only required at new sale or upon moving to a new carrier. Fall River sends a Commission Disclosure to all of our clients every single year, exceeding the transparency required by the law.  If your broker is not disclosing commissions at all, we encourage you to ask him or her for more information. 

There is another type of compensation that does not have to be disclosed. This is contingent compensation, which carriers pay based on the overall size or retention rate of a broker’s book of business. For many brokers, especially large firms where bonuses are a much higher portion of revenue, this type of compensation can comprise a significant portion of the broker’s income.  For some firms, this additional revenue appears to be a driving force to recommend certain carriers over others.

Fall River always puts the client’s needs first and considers the carrier that fits our client’s goals the best, regardless of any bonuses we might receive.  Our number one value is integrity, and our commission will never take priority over our client’s best interest.  Our number one value is integrity, and our commission will never take priority over our client’s best interest.

Published in Best Practices

Employers who have non-calendar year plans have had challenges in the past when employees wanted to enroll in the Exchange Marketplace, but have already made a pre-tax election to take the employer’s health plan which binds them for the entire plan year.  This problem has been eliminated with a recent joint guidance, Notice 2014-55, issued by the Treasury and the IRS September 18, 2014.

Employers may now allow an employee to drop coverage in the middle of the plan year if it coincides with the annual open enrollment period of the Exchange Marketplace, and if the employee replaces their employer coverage with a Marketplace policy beginning the day after the employer coverage ends.

For example, an employer with a July 1 anniversary generally requires all employees to be enrolled until June 30 under their pre-tax election, barring a qualifying event.  Because the new rule expands the list of qualifying events, employees may be permitted to drop their employer coverage enroll in the marketplace coverage anytime during the open enrollment period of November 15 to February 15.  This employee could be allowed to have an effective date anywhere from January 1 to March 1, and can drop their employer coverage effective the day before their Marketplace policy begins.

The notice indicates that “A cafeteria plan may rely on the reasonable representation of an employee who has an enrollment opportunity for a Qualified Health Plan through a Marketplace that the employee and related individuals have enrolled or intend to enroll in a Qualified Health Plan for new coverage that is effective beginning no later than the day immediately following the last day of the original coverage that is revoked.” This means you don’t have to personally verify the enrollment but can simply accept a statement (we suggest this be in writing) from your employee.

The cafeteria plan must be amended to allow for these types of election changes, no later than the last day of the plan year during which these new elections are to be allowed.  This will allow Marketplace elections retroactively back to the first day of that same plan year as long as all participants are notified of the amendment. If you plan to allow employees to move to the Marketplace during the 2015 open enrollment period, be sure to amend your Section 125 plan prior to the last day of your plan year in 2015.

If you aren’t sure whether you have a Section 125 plan document at all, please This email address is being protected from spambots. You need JavaScript enabled to view it. so we can help you get in compliance! 


Published in Healthcare Legislation
Thursday, 25 September 2014 08:13

What is your Healthcare Strategy Score?

The Affordable Care Act aside, employers everywhere are struggling with the rising cost of healthcare.  Even though annual trend levels have tapered off, the costs were already so high that adding even one extra dime to healthcare costs can feel like the straw that broke the camel’s back.

There are some factors affecting your healthcare costs that you don’t control.  But what about those you CAN control?  Are you taking advantage of all of the potential ways you can engage your employees as consumers, help them get healthy, and then use creative funding strategies to capture the resulting savings? 

First of all, you’ll want to check out our Tackling Healthcare Costs webinar next Tuesday, October 7th, at 10 am.  But also, you’ll want to take advantage of Fall River’s new Healthcare Strategy Score system, where we meet with you to benchmark how proactive and creative your current strategies are on a scale of zero to 100%, then lay out a game plan of how you can up your score and save on your costs as a result.


Request your Healthcare Strategy Score now!

Published in Best Practices

As a company grows and wants to attract the best workforce, their benefits strategy needs to change with them.  While a smaller start-up company may offer the bare-bones benefits, a larger company may need to offer a very comprehensive benefits package to suit the needs of all employees, along with a creative strategy to make it affordable. We thought we’d share a case study to demonstrate how active the evolution of benefits needs to be.


Fall River has worked with a rapidly-growing Denver software consulting firm for about eight years.  They started with us with just three employees on the benefits, and offered a fully-insured traditional medical plan, as well as dental, vision, and basic life insurance.  


Within just a few years they had grown to have dozens of employees all over the country, and discovered that they needed a richer benefits package to attract the specialized talent they were looking for.  They also found themselves at the mercy of their small group renewals, even though their demographics were better than average.


We started by implementing a creative plan design strategy, allowing the company to offer richer benefits at a lower cost.  Since they had almost as many locations as employees, we helped them conduct all their enrollment meetings via Web Conference. At this point we suggested adding more extensive Life insurance coverage and Disability policies that fit the needs of their high-end, growing workforce. We also helped them identify global benefit resources for their employees outside the United States.


By moving the group to a partially self-funded plan a few years later, we were able to take advantage of their good demographics and save them even more money.  Under this strategy, they also received claims data that they never had before, allowing us to help them to target their employee education and wellness incentives.  This laser-sharp focus enabled them to keep their renewals under control, thus allowing for the continuation of their extremely rich benefit plan.  As this company continues to grow and is now approximately 100 employees, their robust benefits package continues to be a significant part of their recruiting success.


This year, this dynamic firm has successfully completed a sale to a private equity firm that will enable them to make significant equity payouts to the employee owners of the company, and to enter into a new phase of growth.  We’re in the strange position of being both humbled by the amazing accomplishments of these leaders, who have become our friends, yet also feeling like proud parents sending their kids off to college as we wish this fabulous client success in the next stage of their journey!


There are many other considerations for companies that are growing quickly.  If this is your situation, we’d be happy to provide additional guidance as you navigate the rapids of change. This email address is being protected from spambots. You need JavaScript enabled to view it.


Published in Best Practices
Page 9 of 9