Increasing healthcare costs, ACA compliance, balancing ever-precarious budgets, retaining valuable staff…midsize nonprofit organizations must consider many factors related to offering and managing group health coverage these days. More than ever, they need a better solution to the dilemma of providing mandated and high-quality employee healthcare while also watching the bottom line.
While traditional fully-funded healthcare can be expensive and self-funded coverage comes with a significant financial risk, partially self-insuring melds the two into a more affordable health insurance option with less monetary risk.
Nowadays, employers are shifting more healthcare costs to employees to help balance financial responsibilities. However while cost-shifting has slowed healthcare spending, the rising costs of deductibles and copays has grown at a pace faster than the average income – resulting in a difficult situation for consumers who are expected to bear more and more of these out-of-pocket costs. Because of this, recent studies report that consumers are delaying or out-right avoiding attending to their medical needs. In fact, even when services are covered (i.e. preventative care) consumers may still eschew them altogether. In the end, higher out-of-pocket costs may lead to “people [making] decisions about care that isn’t in their best interests.”
With the Supreme Court’s June ruling signifying that the ACA is here to stay, many are now looking ahead to the 2018 Cadillac tax as more of a reality – and its heating up discussions among economists, large corporations, unions, and politicians. In fact, later this month a lobbying group called The Alliance to Fight the Forty is launching to attempt to repeal the tax. And legislation to repeal the tax was introduced by both Republicans and Democrats in the Spring.
On July 6, 2015, the Department of Labor (DOL) issued a proposal to more than double the minimum salary level that white-collar workers must be paid to be exempt from overtime, from $23,660 to $50,400 annually (or from $455/week to $970/week). With a debate centering around if the proposed salary levels are set correctly (and how future increases will be considered), a public forum for written comments is open until September 4th, 2015. The proposed amounts are at the 40th percentile of weekly earnings for US employees, and apply only to non-exempt employees (e.g. any employee not considered “executive, administrative or professional”). If approved, the Obama administration says that these changes would impact nearly 5 million US workers within the first year.
In 2016 employers who provide minimum essential coverage to employees will be required to begin mandatory reporting of employee health coverage. In addition applicable large employers (ALEs) will be required to report compliance with the employer shared responsibility provisions (e.g. “pay or play”). To help organizations prepare for new reporting mandates, the IRS is disseminating information around reporting guidelines and penalties.
If your organization sponsors a self-insured plan, you may be on the hook to contribute to the Patient-Centered Outcomes Research Institute (PCORI) Research Trust Fund by July 31, 2015. This fee applies to applicable self-insured plans, including health reimbursement arrangements (HRAs) and flexible spending arrangements (FSAs) that don’t qualify as excepted benefits. In addition, employers who provide COBRA coverage and major medical coverage that falls under multiple policies or plans may also be obligated to contribute to PCORI.
Our final post in the series about preparing for the 2016 renewal season discusses how to better satisfy both employee needs and your bottom line by designing more customized healthcare options (previous posts looked at compliance and cost).
Over the past week, we have been looking at how nonprofits can prepare for the 2016 healthcare renewal season (which goes into effect November 1), specifically with regards to compliance, cost, and employee needs. In this post, we will discuss innovative approaches to health coverage that can actually reduce costs while still offering rich employee benefits.
In a previous post, we overviewed three main areas that nonprofits should consider before the 2016 healthcare renewal season begins on November 1: compliance, cost-effectiveness, and employee needs. In this post, we’ll look more closely at compliance, specifically grandfathered plans, applicable large employer (ALE) status, and new IRS reporting requirements.
