Archive for the ‘Company News’ Category

2018 ACA Safe Harbor Percentages Will Decrease

As the Hays Research and Compliance team plans ahead, we want to inform our clients that there will be safe harbor changes to consider for 2018.

The affordability percentage, under the Affordable Care Act (ACA), for 2018 will be 9.56%, a decrease from the 2017 safe harbor percentage of 9.69 %.

Overview

On May 5, 2017, the Internal Revenue Service (IRS) issued Revenue Procedure 2017-36 to index the contribution percentages in 2018 for purposes of determining the affordability of an employer’s plan under the Affordable Care Act (ACA).

For plan years beginning in 2018, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:

  • 9.56 percent of the employee’s household income for the year, for purposes of both the pay or play rules and premium tax credit eligibility; and
  • 8.05 percent of the employee’s household income for the year, for purposes of an individual mandate exemption (adjusted under separate guidance).

Affordability, as used for compliance with the employer mandate under the Affordable Care Act (ACA), relates to the maximum amount an individual must pay for single-only coverage relative to that person’s household income without triggering a penalty for the employer.  Employers may use any one of the “safe harbors” for affordability (W-2, hourly rate-of-pay or the federal poverty line) to set single-only premium contributions that are deemed affordable under the ACA.

For example, an employer can set the amount an employee pays for single-only coverage based upon 9.56% of the federal poverty line and that offer of coverage will be deemed affordable for purposes of compliance with the ACA.

Why are the Safe Harbor Percentages decreasing? 

The 2018 percentage decrease is due to the projected rate of premium growth as it relates to the projected rate of personal income growth.

Issues to Consider for 2018 Renewals:

2018 ACA Maximum Out-Of-Pocket Expenses (non-grandfathered plans)

  • $7,350 for self-only coverage
  • $14,700 for family coverage

2018 HSA & HDHP Design Maximums

  • HDHP minimum annual deductibles:
    • $1,350 for self-only coverage
    • $2,700 for family coverage
  • Out of pocket maximums:
    • $6,650 for self-only coverage
    • $13,300 for family coverage
  • Maximum annual HSA contributions:
    • $3,450 for self-only coverage
    • $6,900 for family coverage
    • Catch-up contribution (Age 55 and older by the end of the tax year) $1,000

Note: DOL, HHS and IRS guidance requires group health plans to embed an individual out-of-pocket maximum in the plan’s family coverage when the family out-of-pocket maximum exceeds the ACA’s out-of-pocket maximum for self-only coverage.

Action Steps

These updated affordability percentages are effective for taxable years and plan years beginning Jan. 1, 2018. This is the first time since these rules were implemented that the affordability contribution percentages have been reduced. As a result, some employers may need to reduce their employee contributions for 2018 to meet the adjusted percentage.

If you have any questions, please contact your local Hays Consultant.

By: Ben Graves, J.D., Director of Research and Compliance at Hays Companies.

 

 

Take Back Our Roads: Tips to Prevent Distracted Driving

Pandora. GPS. Radio Commercials. Drinking Coffee. Talking to your kids in the backseat. Even if you’re not texting behind the wheel, chances are high that something happens while you’re driving that prevents you from giving the road your full attention. And while most of these activities seem fairly innocent, taking only a second or two to address, they each represent a different form of distracted driving that can dramatically increase your risk of an accident.

Fully 94% of all vehicle crashes are caused by human error – a sobering fact when you consider the real life implications behind the statistics. Hays Vice President of Risk Management Services, Tom Goeltz, understands this better than most as his daughter, Megan Goeltz, was killed at the age of 22 by alleged distracted driver, leaving behind a three-year-old daughter and a loving family.

For Goeltz, distracted driving is a national epidemic. OSHA agrees, having launched a distracted driving initiative in recent months. In a supporting compliance article, the administration states “The top priority of the Occupational Safety and Health Administration (OSHA) is keeping workers safe. While workplace fatalities have been decreasing in recent years, motor vehicle crashes continue to be one of the leading causes of death among American workers.” In addition, a study conducted by the University of Utah discovered that cell phone users demonstrated higher levels of impairment then drivers who had been drinking.

To prevent distracted driving, OSHA recommends implementing policies that prevent individuals from reaching for their phones in the first place. Goeltz supports the position, arguing that breaking the habit of distracted driving requires a similar mentality shift as our approach to drinking and driving. In our society, driving under the influence has become a universal taboo, resulting in using a designated driver or a service like Uber. As Goeltz says, the same can be done with distracted driving habits.

With their most recent iOS update, Apple will be doing their part to keep the roads safe with the new “Do Not Disturb While Driving” feature. The feature, which will be triggered when a phone is connected to a car via Bluetooth or cable, will withhold all notifications while the car is moving. Users will still be able to access Apple Maps, but the majority of apps will stay locked for the duration of the drive.

Not an iPhone user? Goeltz offers some additional tips to prevent distracted driving:

  1. Turn your phone off or put it in airplane mode.
  2. Use a Cell Slip, which blocks all incoming and outgoing cell phone signals while the phone is in the slip or keep your phone out of reach.
  3. Have an App installed on your phone to silence incoming texts, emails, phone calls.  We recommend one of the following:
    1. In-Traffic Reply (Samsung Exclusive)
    2. DriveMode (AT&T exclusive)
    3. Drivewise (Allstate Exclusive)
    4. Drive Safe & Save (State Farm Exclusive)
    5. Cellcontrol (Subscription-based app that blocks phone use while driving)
    6. Drive Safe Mode (Control and monitor mobile use while driving – perfect for teens!)
    7. Live2Text (Blocks incoming calls and texts while driving)

But most importantly, remember that no message is worth life or death. It can wait.

Hays Financial Group Welcomes James Miley as Vice President

MINNEAPOLIS, MN – James Miley has joined the Hays Financial Group as a Vice President. A division of Hays Companies, Hays Financial Group provides investment, wealth management, and fiduciary services on behalf of their clients.

Miley brings with him 10+ years of experience in wealth management with a focus on corporate retirement planning, which was accrued in his former role as a Financial Advisor at RBC Wealth Management and Merrill Lynch, respectively. Miley has also achieved the Chartered Retirement Planning Counselor certification from the College of Financial Planning and the Accredited Investment Fiduciary® (AIF®) from FI360, which he acquired to better serve his client’s retirement planning needs and to help the ever-evolving 401(k) market. In 2016, he was listed as one of the top 401 Retirement Plan Advisors by the Financial Times.

In his new role, Miley will continue to relentlessly pursue his client’s desired outcomes, offering personalized advice and access to the specialized investment services demanded by sophisticated investors. His listening skills and passion for successful outcomes keep him engaged in helping clients coordinate their financial affairs.

When he isn’t working, James can be found training for an endurance event, spending time with one of his four children, or participating in an event for one of the many non-profit organizations of which he is a volunteer and board member (notably: Boys & Girls Club, Nativity County Fair, and the St. Thomas Academy Alumni Association).

* The AIF designation signifies knowledge of fiduciary responsibility as well as the ability to implement policies and procedures that meet a defined standard of care.

2018 ACA Out-Of-Pocket Maximums and Health Savings Account Limits

As the Hays Research and Compliance team plans ahead, we want to inform our clients that there will be two plan design changes to consider for 2018:

  1. Affordable Care Act out-of-pocket maximum dollar limits, and,
  2. High Deductible Health Plan limits.

 

Affordable Care Act Out-Of-Pocket Maximum Dollar Limits

Last December, the U.S. Department of Health and Human Services (HHS) released the 2018 HHS Final Notice of Benefit and Payment Parameters.  For plan years beginning in 2018, the annual cost sharing limitation for essential health benefits will be $7,350 for employee only (single) coverage, and $14,700 for other than employee only (family) coverage.

 

 

High Deductible Health Plan Limits

In addition, the Internal Revenue Service (IRS) recently released the Revenue Procedure 2017-37, which announces the inflation-adjusted limits for Health Savings Accounts (HSAs) And High Deductible Health Plans (HDHPs) for 2018. These limits include:

  • The maximum HSA contribution limit;
  • The minimum deductible amount for HDHPs; and,
  • The maximum out-of-pocket expense limit for HDHPs.

These limits vary based on whether an individual has self-only or family coverage under a HDHP.

It is important to note that the IRS limits for HSA contributions and HDHP cost-sharing will all increase for 2018:

 

 

The following chart illustrates the HSA/HDHP limits for 2018, as compared to 2017. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.

 

 

Action Steps

Because the cost-sharing limits for HDHPs (minimum deductible and maximum out-of-pocket) will change for 2018, employers that sponsor these plans may need to make plan design changes for plan years beginning in 2018. Also, if an employer communicates the HSA contribution limits to employees as part of the enrollment process, these enrollment materials should be updated to reflect the increased limits that apply for 2018.

In addition, if utilizing the full HDHP maximum out-of-pock limits, make sure that the limit applicable to a single individual will not exceed the ACA maximums for single only coverage.

If you have any questions, please contact your local Hays Consultant.

 

By: Ben Graves, J.D., Director of Research and Compliance at Hays Companies.

Hubbard Broadcasting: Lowering Healthcare Costs

Hubbard Broadcasting, Inc. is a family-owned and operated broadcasting company with 10 television stations, 43 radio stations, and a national cable and satellite entertainment channel. View the full story on how Hays Companies helps Hubbard make data driven decisions that helped implement effective and efficient healthcare plans and how Hays Companies supports Hubbard’s continued growth as an extension of the team.

 

 

How Can EventGuard Protect Your Events?

As Murphy’s Law states, “Anything that can go wrong, will go wrong” – which is why Hays Companies created EventGuard, our event cancellation program, to help protect your important events from unexpected losses.

EventGuard provides valuable coverage for lost revenue and expenses incurred from a delay or cancelation of an event. Whether you are planning a concert, festival, sporting event or simply a conference or convention, Hays Companies will cover you in case of:

  • Cancelation of Event
  • Non-appearance of Speaker/Entertainer
  • Postponement of Event
  • Communicable Disease Outbreak
  • Forced Change of Venue
  • Terrorism
  • Inability to Vacate Premises
  • Reduced Attendance

Learn more about what our event cancellation insurance can do for you at our website: https://eventguard.haysprograms.com/

Brian Whinnery named a “2017 Young Gun”

Brian Whinnery, director of Hays Financial Group at Hays Companies, has been named a “2017 Young Gun” by the National American Retirement Association (NAPA). The award recipients are recognized as the future leaders of the retirement plan advisor industry. Congratulations, Brian!

To read the full article, please click here.

Centered on fiduciary governance for employer groups and the individual financial goals of their employees, Brian provides customized solutions in the qualified retirement plan space. Brian was formerly a financial advisor at RBC Wealth Management for over 5 years prior to joining Hays Companies. He has over 12 years of corporate retirement plan experience and was previously named by the Financial Times as one of the top retirement plan advisors in the country in 2015.

If you have any questions, please contact Brian Whinnery at bwhinnery@hayscompanies.com

Tax Season and Fraudulent Cyber Activity

While many companies have become familiar with fraud attempts aimed at convincing employees to wire funds to criminals’ bank accounts, few are familiar with W-2 phishing scams.

Like fraudulent wire transfers, criminals typically impersonate an employee in the C-suite and ask for copies of all employees’ W-2s. These W-2s are then used to file fraudulent tax returns in hopes of intercepting tax refunds.

According to IRS Commissioner John Koskinen, “This is one of the most dangerous email phishing scams we’ve seen in a long time. It can result in the large-scale theft of sensitive data that criminals can use to commit various crimes, including filing fraudulent tax returns. We need everyone’s help to turn the tide against this scheme.’’

The W-2 phishing scam is occurring earlier in the tax season and to a broader scope of organizations. As far as action an employer should take, it is recommended to send a W-2 scam email to phishing@irs.gov and place “W2 Scam” in the subject line.

To view the official statement from the IRS, you can click here.

These risks are easily insured against with Cyber Liability Insurance policies. For a consultation or assistance with any cyber inquiries, please contact Dave Wasson, VP, Hays Cyber Liability Practice Leader, or Scott Stence, AVP Executive Risk to learn more about our risk management techniques to avoid these scams.

Post-Election Compliance Update

By: Ben Graves, JD., Director of Research and Compliance at Hays Companies.

With Republican control of both houses of Congress and the Presidency now confirmed, we wanted to provide an update of how we think employee welfare benefits will be impacted from a compliance perspective for the near future.

The rules that were already in place before the election are still in place.  There are looming deadlines including employer reporting and payment of reinsurance fees that will occur by the end of January.  Having said that, there should be some great opportunities to take advantage of new flexibility and options that have been off the table for a few years now.  One example would be the possible return of premium reimbursement plans, which were a great tool for employers operating in markets where it was difficult to get a reasonable quote (or any quote at all).  Hays Companies Research and Compliance will work diligently to help identify these opportunities as they appear.

Our ACA Compliance newsletter provides an overview of the election’s impact on employee welfare benefit plan compliance issues.

Also, we are providing an educational webinar titled “Compliance After the Election”.  During the webinar we will discuss:

  1. What employers should do for the immediate future,
  2. Possible changes to the Affordable Care Act and other employee benefits laws,
  3. Possible new legislation or regulations, and possible future opportunities

We are offering two webinar date options:

Monday, December 5th, 2016 3:00 PM, Central Time

Tuesday, December 6, 2016 11:00 AM, Central Time

Click Here to Register

If you have any questions, please contact Hays Companies Research and Compliance team at compliance2@hayscompanies.com.

 

Want Innovation? Ask the Right Questions

Innovation is a hot topic right now, with websites, researchers, authors, and consultants sharing regular insights and revelations about how businesses can be more innovative in an economy that continues to be challenging.

While innovative businesses typically point to famous industry disrupters like Apple, Google, Amazon and Uber for creating new products and services while ramping up the quality of consumer experiences, pioneers do not have to have a household name. Smart, nimble insurance brokerage firms, for example, regularly deliver innovative programs using some of the same principles that made the major disrupters so famous.

According to a study of insurance sector innovation by KPMG International, disrupters and innovators do not necessarily create something brand new, such as a new coverage or new program. Instead, they learn from traditional competitors and other disrupters and they leverage successes and experiences and create new propositions and approaches to “delight customers and create value.” Disrupters, by nature, are always customer-centric.

Here are some examples of what questions to ask to determine innovation.

Contrariness

Innovators do not take the first solution they come up with. Instead, they ask questions: How can I make this better? What can I learn from the past? What approaches can I borrow from other industries/companies to make something old new again? They take an approach that questions all assumptions.

To discover if your broker is being “contrary” enough to benefit your company, ask yourself these questions: Is your broker doing things the way he or she has always done them? Are you being introduced to new ideas such as cross-analyzing benefits and workers’ comp data, trying out data-driven population health management and employee engagement approaches within your company versus the industry static wellness approach? Is your company protected from risks that could have an infrequent but devastating effect on your bottom line, such as social engineering, infectious disease epidemics, and cyberhacking/ransomeware? Is your benefits program “delighting” your company’s employees and improving their health outcomes?

Cross-pollination of ideas

Innovation is built on generating a lot of ideas, learning from successes and failures, and putting together something new through this process. This is the key, according to Wharton professor and author Adam Grant’s book, Originals: How Non-Conformists Move the World.

He notes in his blog that “originals learn to see failure not as a sign that their ideas are doomed, but as a necessary step toward success. “A failure signals a gap in knowledge or a poor strategy, and motivates us to go back to the drawing board and get it right. Without failure, complacency can creep in.”

Innovators regularly identify the gaps in their knowledge that may lead to failure. Such experience creates a strong, cross-pollinated breeding ground for new approaches. Is your broker working hard to invent something new in this way?

A recent Wall Street Journal article on innovation reports that “most companies continue to assume that innovation comes from that individual genius, or, at best, small, sequestered teams that vanish from sight and then return with big ideas. But the truth is most innovations are created through networks — groups of people working in concert.”

Choice matters

Innovators identify and try out a variety of ideas to find approaches that work best — and customers benefit from having a range of choices. Is your broker giving you options or just offering the “one-and-only proprietary solution that you’ll ever need?”

For example, a proprietary HRIS/employee benefits module means that companies can be trapped by their broker’s limited offerings. Is your broker offering you several options, instead of just delivering a cookie-cutter product, service or technology? Are the systems truly user-friendly? Can features be added? In short, solution neutrality is key to getting the most innovative product and service.

Keeping up with technology

Basing decisions on strong empirical data and experience instead of top-level claims data is a key hallmark of innovation these days. Is your broker delivering on this best practice of mining data for the insights and innovations it hides? Are these approaches used on the employee benefits side as well as the property & casualty insurance side? How long has your broker used data independent of the carrier and what is their expertise? Any broker can lease or rent a “system” to interpret data, but their experience in developing an analytics system as well as the institutional knowledge developed by using these systems can be a significant advantage for their clients. Today, companies have access to the sorts of modeling tools long used by insurers, giving them the ability to better assess and manage a claim before it has the opportunity to spiral out of control. Is your broker providing you with such tools and do they have the experience and institutional knowledge to offer you the best choices?

Independence

When it comes to innovation, bigger is not always better. One of the most valuable attributes of innovators is their independence, giving them the ability to find and develop the very best ideas, regardless of their source.

How does independence play out in the insurance sector? It means your broker can provide the widest range of program choices that meet your company’s needs. Privately-held, debt-free, independent brokers can also review the entire marketplace to find solution-neutral options that are not tied to any one carrier or to their own ownership interests. In turn, that means you can choose among a variety of solutions and ensure you get the appropriate attention to implement and work with those solutions instead of being forced to accept a broker-centric program that benefits your broker’s bottom line, but may not work for your company.

Solution-neutral options also mean customers can retain them even if their insurer or broker changes. For example, proprietary internal systems for employee benefits and property and casualty programs promise efficiency and cost savings — but they are tied to a specific insurance program and broker. That limits a client’s ability to retain programs and systems if they want to make a change.

Choices also can be limited by brokers who merge and/or acquire other companies. Financing this growth means either incurring debt or paying higher shareholder returns and that can lead to constricting R&D investment and limiting customer choices and services. Knowing how financially independent your broker is will help you know if your interests are being well served.

What do you believe?

Finally, you will be most satisfied if you choose an innovative company whose values resonate with your own. Leadership consultant and author Simon Sinek is often quoted for his insight into why customers choose innovative companies: “People don’t buy what you do; people buy why you do it. If you talk about what you believe, you will attract those who believe what you believe.”

In the end, customers want their broker to provide innovative solutions that still satisfy the basics of providing the right coverage, controlling expenses, and delivering exceptional, experienced service — all in the name of helping your company thrive in a more competitive economic environment that rewards the innovators of our world.

About the Authors:

Eric Kasen is President of Hays Companies Northeast, Craig Dandrow is the Employee Benefits Practice Leader, and Owen Callaghan is the Property & Casualty Practice Leader. All three are based in the Hays Companies’ Boston office that provides Health and Welfare Brokerage and Consulting, Pension Consulting and Commercial Risk Brokerage and Consulting.

 

  [1] KPMG