Benefits open enrollment 2019: What you need to know

Open enrollment can be a complicated process, especially if decisions surrounding the employee benefits plan selections are delayed. To make matters more interesting, there are legal changes affecting the design and administration of benefits for plan years beginning on or after Jan. 1, 2019, says Aaron Ochs, managing consultant at JRG Advisors.

In addition, if any changes are made to your company’s health plan benefits for the 2019 plan year, those changes should be communicated to plan participants through an updated Summary Plan Description or a Summary of Material Modifications. Employers should confirm that open enrollment materials contain the required participant notices, when applicable. Some participant notices also must be provided annually or upon initial enrollment.

With the assistance of a knowledgeable benefits professional, employers should thoroughly review plan documents to confirm they include any required changes in adherence to the Affordable Care Act (ACA).

Smart Business spoke with Ochs about a few important plan design considerations to carefully review at open enrollment.

What’s important to understand about grandfathered status, the ACA affordability standard and out-of-pocket maximums?

Grandfathered plan status — If an employer has a grandfathered plan, it needs to determine whether it will maintain its grandfathered status for the 2019 plan year. A grandfathered plan’s status affects its ACA compliance obligations from year to year. If an employer’s plan will maintain its grandfathered status, then the Notice of Grandfathered Status should be provided in the open enrollment materials. If the plan is losing its grandfathered status, the employer should confirm that the plan includes all of the additional patient rights and benefits required by the ACA.

ACA affordability standard — Currently under the ACA, an applicable large employer’s health coverage is considered affordable if the employees’ required contribution does not exceed 9.5 percent of their household income for the taxable year. For plan years that begin on or after Jan. 1, 2019, the affordability percentage is 9.86 percent. Employers should ensure that at least one of the health plans offered satisfies the ACA’s affordability standard. Since the percentage increases from 2018, employers could have additional flexibility to increase the employee share of the premium while still avoiding a penalty under the pay or play rules.

Out-of-pocket maximum — Employers should review the out-of-pocket maximum of their health plan to ensure that it complies with the ACA’s limits for the 2019 plan year. The limits for 2019 are $7,900 for self-only coverage and $15,800 for family coverage.
It is important to remember that a high deductible health plan (HDHP) must be compatible with a health savings account (HSA), and the out-of-pocket maximum must be lower than the ACA’s limit. The out-of-pocket maximum for HDHPs beginning in 2019 is $6,750 for self-only coverage and $13,500 for family coverage.

If the employer’s plan utilizes multiple service providers to administer benefits, it should ensure that the plan coordinates all claims for essential health benefits across the plan’s service providers, or that the plan divides the out-of-pocket maximum across the categories of benefits, with a combined limit that does not exceed the maximum for 2019.

How are the HDHP and HSA limits changing?

The IRS limits for HSA contributions and HDHP cost sharing are increasing for 2019. The HSA contribution limit increases from $3,450 to $3,500 effective Jan. 1, 2019. Effective for plan years beginning on or after Jan. 1, 2019, the HDHP maximum out-of-pocket limit increases from $6,650 to $6,750 for self-only coverage and from $13,300 to $13,500 for family coverage. Employers should review their HDHP’s cost sharing limits and determine if an adjustment is required to meet the 2019 limits.

If an employer communicates HSA contribution limits to its employees as part of the open enrollment process, the enrollment materials should be updated to reflect the increased limits that apply for 2019.

Insights Employee Benefits is brought to you by JRG Advisors

New health plan option for small businesses

Employers with 50 or fewer employees have wrestled with rising health care costs and the Affordable Care Act (ACA) reforms for several years. While small employers recognize that health insurance is a critical benefit to attract and retain a workforce that builds a successful business, many have opted to forgo offering benefits altogether due to affordability and administrative burdens.

On June 19, 2018, the Department of Labor (DOL), after much debate, finalized a new rule that small businesses have been waiting for — the ability to again purchase health insurance in a more effective way, as part of an Association Health Plan (AHP).

These arrangements can pave the way for access to more affordable health insurance. In addition, with AHPs, small employers can avoid certain ACA reforms that apply to the small group market. According to the DOL, this will also provide small employers with more affordable health insurance coverage options.

“Small employers joining together to purchase health insurance is not a new concept to the industry. Under current restrictive regulation, however, these types of plans are not considered a single ERISA (Employee Retirement Income Security Act) plan,” says Ron Smuch, insurance & benefits analyst at JRG Advisors. “Each employer is separately responsible for compliance requirements relating to group health plans to include HIPPA (Health Insurance Portability and Accountability Act of 1996), COBRA (Consolidated Omnibus Budget Reconciliation Act) and the ACA. Furthermore, under current regulations participating employers with 50 or fewer employees are required to comply with additional requirements under the ACA.

“Most notable are the requirements to offer ‘essential health benefits’ and to comply with restrictive community rating rules when calculating premiums. The combination of additional complex administrative burden and continued increased premium costs have made today’s fully insured association health plan less attractive for small employers,” he says.

Smart Business spoke with Smuch about how AHPs could work for your organization.

Why is the new AHP ruling a win-win?

The passage of the DOL’s new association health plan ruling is a win-win and without a doubt will be a more advantageous option for small employers, their employees and sponsoring associations going forward.

For employees, AHPs will be an attractive, more cost-effective alternative to ACA plans. Small employers will now have the ability to join together and take advantage of economies of scale to reduce administrative costs while also offering coverage that is more affordable to employees. Furthermore, the employer will be exempt from some of the burdensome ACA requirements. For the sponsoring associations, offering health plans will prove to be a valuable tool for attracting and retaining employer members.

When does the new rule take effect?

The final rule includes a ‘phased’ applicability date.

  • Fully insured plans were allowed to begin operating under the new rule on Sept. 1, 2018.
  • Existing self-insured AHPs can begin operating under the new rule on Jan. 1, 2019.
  • New self-insured AHPs can begin on April 1, 2019.

What should small employers consider?

Small employers should exercise a certain level of caution when considering an AHP. While this new ruling and benefits arrangement may yield reduced health insurance premium costs, some AHPs may actually cover fewer benefits. Most AHPs will not be subject to the ACA’s requirement for group plans to include coverage for the 10 core ‘essential health benefits.’

Employers should carefully review the benefits design with an experienced professional to ensure the plan is adequate for their overall benefits strategy and workforce coverage needs.

Insights Employee Benefits is brought to you by JRG Advisors

How to ensure HR and benefits technology work together

Many human resource leaders have a conflicted relationship with HR and benefits technology. And it’s only growing more complicated as employees demand easy-to-use technology and a personalized experience, and telecommuting and the gig economy gain popularity. Companies must also cope with the threat of cybertheft, and a surge of new vendors and products that touch every facet of the employer-employee interaction.

In light of these developments, the strategic management of HR and benefits technology has become essential.

Smart Business spoke with Gallagher’s Joe Roberts, area vice president of Benefits & HR Consulting, and Rhonda Marcucci, vice president of HR & Benefits Technology Consulting, about how to blend HR and technology.

What are the key workforce trends?

Employees are increasingly working from home and elsewhere. They expect HR systems and processes to accommodate their demands, and many want applications to be easy to use and personalized at a level that’s similar to smartphones. That’s especially true of millennials. Also, employers that participate in the emerging gig economy may hire temporary or part-time employees, even for core enterprise functions. To make sure these workers don’t cross eligibility thresholds for mandated benefits, employers must track contractors’ availability, schedule their work and support time-keeping.

How should employers navigate the proliferation of HR and benefits technology?

When salespeople push innovative products, employers must keep their underlying business objectives in mind. Advanced tools that streamline and enhance processes can certainly help engage, support and manage employees, from hire to retire. However, staying current on new capabilities and their potential value for HR operations is difficult. One risk is vendor updates to installed systems (often automatic) that deliver new and unknown functionality. This can lead to underutilized or duplicated capabilities.

Integration remains a challenge with no right answers — just trade-offs that should be carefully weighed. Even best-in-class solutions with better functionality may bring integration complications. Employers are purchasing an ongoing relationship with their service providers. Getting to know the company and its support philosophy — before committing — is a sound approach.

What can be done to protect employee data?

HR information systems are vulnerable to cyberthreats, and unfortunately no employer is free of this risk. Data loss can range from a misaddressed email that exposes one person’s information to breaches affecting thousands.

Investing in enterprise-wide technology is critical to identifying and stopping cyberattacks, but it’s just as important for HR leaders to work with corporate IT on safeguards. They should have clear sight into how data is collected, held and classified, who has access and which laws apply. In many cases, the greatest vulnerability is the HR team itself. Highly sophisticated phishing and other social engineering techniques may trick unwary employees into divulging information that enables access to sensitive data. One of the best protections is continual and thorough training.

If there’s a breach, a forensic analysis will determine its nature and extent. Companies may be reluctant to inform employees, but an apparent lack of transparency can be damaging when rumors circulate. To minimize fallout, employers need to engage a cybersecurity lawyer who is an expert on personnel data breaches.

What are the steps to better align technology with strategy?

Before decision-makers can align HR and benefits technology with the organization’s human capital management strategy, they need to clearly define that strategy. Next, they should window-shop to understand the range of available technology options. The last step is creating an HR technology governance committee to maintain the strategy, which includes staying on top of current technology releases.

Employers should also implement cybersecurity and incident response plans. These will train HR staff on phishing tactics and other risks, lay out the required internal responsibilities and sequence of necessary actions, and identify external management experts and their roles.

Insights Employee Benefits is brought to you by Gallagher

Could self-funding be the strategy for you?

Self-funding is not a new strategy. But while historically utilized for large employer groups, its availability for medium and small employers is new. And the concept is showing impressive results when it comes to giving employers greater input in health plan design and more control over rising medical benefit costs.

Smart Business spoke with Domenic Pascucci, consultant at JRG Advisors, about the benefits of a self-funded health plan.

Why is control of a health plan so important?

Employers need to focus on where their medical dollars are spent to accurately implement and assess a benefits strategy that stabilizes costs. Employers that cling to their fully insured plan must face the reality that they have no control. They wait until 60 to 90 days from their renewal, hoping for a favorable renewal offer, but they’re often slapped with an increase. And so, the last-minute scramble begins — they modify their plan design, switch insurance companies and shift costs to employees.

These methods are a temporary solution at best. They never serve as a long-term strategy to effectively or efficiently manage an employee benefits program. In a self-insured or self-funded health plan, the employer takes on direct financial responsibility for employees’ health care costs. Rather than being in a large, fully insured risk pool, the self-funding employer takes on the risk for its group.

Why do some employers hesitate to switch?

Self-funding has grown in popularity and proven to save money, but ‘taking on risk’ can be an uncertain and intimidating concept. Many employers are misinformed and hesitate to make the leap from fully insured plans. A Sun Life Financial study found that nearly 50 percent of employers were skeptical of self-funding because of the fear of financial risk and 40 percent were fearful of incurring catastrophic claims.

Most self-funded employers, however, purchase stop-loss insurance to cover catastrophic claims, which protects the employer and caps the financial risk exposure. Furthermore, self-insured health plans are exempt from most state insurance laws and mandates. Not having to pay regular premiums to an insurance company can produce substantial savings. An employer is only paying for claims that actually occur in the self-funded model.

How do employers know if their organization is a good candidate for a self-funded plan?

Self-funding is not the right fit for every employer. Some careful research and analysis should be conducted by an experienced consultant that specializes in this type of funding arrangement. Identifying an employer’s financial situation, risk tolerance, cash flow, historical performance of claims and coverage needs are all factors that will help an employer decide.

What do employers need to know about setting up a self-funded plan?

If employers are viable candidates, their broker should guide and educate them on making the transition. Once an employer is committed to a pre-determined strategy that meets the company’s needs and affordability, a financial model should be developed. It will help identify potential outcome scenarios that will not only reduce the employer’s concerns, but also reduce the risk of incurring a large financial pitfall from a costly claim. Various stop-loss deductibles and their impact should be modeled out.

Once the financial model is set up, the broker can examine plans and benefits to find those that best suit the needs of the employer and employees. This is also a good time to review the responsibilities for managing the cost and affordability of the self-funded plan. To make the transition as smooth as possible, the self-funded plan should be similar to the fully insured plan. Finally, employers need a clear understanding of a third party administrator’s role, the various levels of insurance, network availability and which networks are best suited for them.

What’s the takeaway for employers?

If your goal is to take control of your benefits program and rising costs, it’s worthwhile to examine if self-funding is a solution for you. Seek the guidance of an experienced insurance professional who can provide a detailed analysis of your liability — only then will you be informed and ready to decide whether this strategy is for you.

Insights Employee Benefits is brought to you by JRG Advisors

The advantages of taking work breaks to boost productivity

Many of us spend our work time sitting at a desk, staring at the computer screen, straining our eyes and wondering why we have a nagging ache in our neck and shoulders.

“We are all guilty of not taking enough breaks at work — or any at all,” says Doug Fleisner, sales executive at JRG Advisors. “A workday without breaks drains our mental capacity and lowers productivity; while taking breaks throughout the day is extremely beneficial, both physically and mentally.”

Smart Business spoke with Fleisner about the benefits of stepping away from your office or workstation to take a breather and recharge.

What impact can short breaks have on employees?

  • It promotes creativity and passion. Even if you do not think of yourself as the meditating type, studies have proven that breaks during which meditation and mindfulness are applied lead to a boost in creativity, both in and out of the office. Mindfulness and meditation also increases your compassion and reduces your stress level, which could play a major factor in getting through your work day without flying off the handle at a co-worker, depending on your office environment.
  • It re-focuses your attention and concentration. Did you know that the average attention span for adults ranges from 15 to 40 minutes? Everything that you do throughout the course of a day subtracts from your cognitive resources, which can leave you feeling like you are running on empty at times. Your attention span and concentration need to be rebooted at several points throughout a day. Simply stepping away from your desk to take a walk can actually help the brain regroup, get back on track and focus better.
  • It trims the waistline. Who isn’t looking to trim a few inches from their waistline, right? Turns out a fancy gym membership isn’t the only solution. The Centers for Disease Control and Prevention recommends getting up and moving around for five minutes every hour, which can lower your body mass index and help your waistline, too. Although it’s not rigorous exercise, getting up to stretch and get a glass of water for a few minutes is body movement and every little bit helps.
  • It improves brain function with lunch. Remember mom preaching that breakfast was the most important meal of the day? A midday meal is equally as important. While taking time out for lunch increases productivity, it is important to remember to choose foods that don’t make you feel tired and sluggish. Recommended foods include fish, vegetables, fresh fruits, nuts and even dark chocolate.
  • It protects against job-related accidents. Exhaustion and fatigue are the two main causes of on-the-job accidents. Keeping yourself mentally refreshed and alert with regular breaks can help prevent clouded judgement and keep on-the-job accidents to a minimum.
  • It promotes healthy and happy eyes. Constantly staring at a computer screen for prolonged periods of time can lead to a condition called Computer Vision Syndrome (CVS). Symptoms of CVS include eye strain, blurred vision, and neck and shoulder pain. Taking your eyes away from your computer screen, phone or tablet every two hours for 15 minutes, and looking into the distance for 20 seconds will help keep your eyes, head, neck and shoulders feeling great.

What else should employees expect from taking regular breaks?

It keeps your stress at a minimum. Overloading your brain with continuous thoughts and concerns is not healthy. According to the American Psychological Association, taking time to step away, recharge and relax has a major impact on lowering stress and preventing work burnout.

Developing a ‘break routine’ will force you to stick to a schedule and improve your work effectiveness and productivity. Our thought process isn’t built to be continuous; it needs a breather as much as the rest of our body.

Insights Employee Benefits is brought to you by JRG Advisors

How to develop a strategy to compete effectively for key employees

Business owners and top executives are responsible for developing, nurturing and maintaining the crucial relationships, proprietary processes and valuable assets that make an organization successful and sustainable. Often these key personnel are integral to your competitive advantage. And, knowing today’s increasing competition for talent, it’s important to have the right strategy to attract, retain and engage key personnel and set your organization as a destination employer.

Rory Lough, area vice president of Executive Benefits Consulting at Gallagher, says, “It’s critical that employers evaluate their approach to executive benefits as it can lead to long-term sustainability and ensure the future of an organization.”

“Executive benefits help you invest in talent, in the hopes that talent will help grow the business and stay long term,” says Joe Roberts, area vice president of Health & Welfare Consulting and Key Accounts at Gallagher.

Smart Business spoke with Lough and Roberts about how executive benefits work.

How are executive benefits packages different than general employee benefits?

An executive benefits program is more individualized and flexible. Often, business owners like that flexibility because they can be creative, but so many options also can be a challenge. They need to find a plan that benefits the organization and speaks to the motivations of the key employees.

These plans typically aren’t publicized to the general employees. They may be in an employment negotiation contract or retention contract. Depending upon the type, IRS and Employee Retirement Income Security Act (ERISA) rules may or may not need to be followed. Non-qualified deferred compensation plans offer employers many advantages, such as the fact that the plan isn’t subject to these nondiscrimination rules and, therefore, can be customized for each participant. Employers can provide benefits in excess of the qualified retirement plan limits, create financial incentives (golden handcuffs), and supplement disability income protection and key man protection for the company and employee’s family.

What’s important to understand about developing an executive benefits plan?

It’s a good starting point to link executive benefits programs to organizational goals and objectives. It could be based upon performance, total years of service, total income, job title or even a combination.

You also need to decide which roles and employees are instrumental to the business’s growth. You don’t have to target executives alone. You can design a benefits package for top executives, and a second package for another tier of employees.

You’ll want a plan that addresses the underlying motivations. Why will they continue to work for your company? What attracts, retains and rewards one executive or key employee might differ. The art of designing executive benefit packages includes understanding and identifying those sticking points, the risk exposure, and the laws of taxation or power of tax deferral.

Each package has its tax advantages and disadvantages, so you need to understand all of the implications.
It’s a complicated arena, so make sure you work with a team that specializes in executive benefits strategy. There’s no right answer or perfect puzzle piece. That’s why an expert team can help you identity what will work best for your organization.

How often does a plan need to be adjusted?

Typically, when you implement a plan to make sure you’re accomplishing a certain goal, if that goal changes, then the plan needs to be adjusted. If there are tax changes, the plan needs to be adjusted. Every year, your employee benefits adviser will review the plan. The key is to continually keep this topic in mind when evaluating your overall approach to benefits and reward planning.

Insights Employee Benefits is brought to you by Gallagher

This material was created to provide accurate and reliable information on the subjects covered, but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The services of an appropriate professional should be sought regarding your individual situation.
Gallagher Benefit Services, Inc., a subsidiary of Arthur J. Gallagher & Co., (Gallagher) is a non-investment firm that provides employee benefit and retirement plan consulting services to employers. Securities may be offered through Kestra Investment Services, LLC, (Kestra IS), member FINRA/SIPC. Investment advisory services may be offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Certain appropriately licensed individuals of Gallagher are registered to offer securities through Kestra IS or investment advisory services through Kestra AS. Neither Kestra IS nor Kestra AS are affiliated with Gallagher. Neither Kestra IS, Kestra AS, Gallagher, their affiliates nor representatives provide accounting, legal or tax advice.

What your employees really want in their benefits package

In today’s job market, employers are finding it increasingly difficult to offer their employees what is of top importance to them — money. This results in the need for employers to get creative when it comes to recruiting and retaining top-notch talent. Where salaries fall short, many employers bolster their benefits packages in conjunction with other incentive-based offerings, says Rob Higginbotham, finance and HR director at JRG Advisors.

Here’s the million-dollar question: What matters most to employees?

Smart Business spoke with Higginbotham about the key areas where employers should pay attention in their employee benefits.

How much does money matter?

Probably without question, the most important factor for any employee is salary. After all, we all want to be paid what we are worth, right? The reality is we are all worth more than simply what a dollar amount reflects, but salary negotiations are a big component to attracting and retaining quality employees.

As an employer, you must pay your best and brightest, and give no reason for these employees to polish up their resumes. Pay attention to the compensation standard in your industry and region. Know what your competitors are paying. And by all means, do not hesitate to proactively talk about compensation with transparency and clarity.

What needs to be included in a comprehensive employee benefits package?

Providing access to a good benefits package that meets the needs of your employees is a worthwhile investment that pays dividends. Although health insurance ranks as the primary concern for employees, providing added benefits to your program goes a long way to strengthening the overall compensation package. Consider including short- and long-term disability insurance, life insurance, dental, vision and voluntary benefits like critical illness, cancer riders, and tuition savings and reimbursement plans. Sponsoring a retirement savings plan is a benefit that can separate your company from the competition, too.

A well-rounded benefits program fosters healthy and productive employees. It bolsters employee morale and demonstrates that you care about your employees’ health, well-being and future potential.

Where does work-life balance come into play?

Your employees’ work-life balance is a crucial factor when it comes to accepting a new job or leaving a current job. Plain and simple, overworked employees develop resentment and that can lead to burn out. There are only so many hours in a day. The more time an employer demands, the less quality time an employee has to spend with his or her family or to pursue interests or hobbies that are critical to his or her well-being.

The balancing act for employers is enabling employees to have lives outside of the workplace, while ensuring that the job gets done. More companies are beginning to offer flex-time schedules, job sharing and unique paid time off plans to help employees achieve the proper work-life balance.

What’s important to understand about career development and providing purpose?

Employees need to know they have opportunities for advancement within a company because it increases the likelihood of loyalty and dedication. If an employee feels stagnant, bored, overlooked or underappreciated in their position, chances are they will actively seek a job opportunity elsewhere. Provide on-going training programs and help employees further develop their skills. Senior management can motivate employees with open dialogue, a chance to work on a new project and constructive feedback, too.

Employees want jobs that provide them with a sense of purpose. In other words, a company’s goals and its measurement of success must be defined by more than financial earnings. Many employees find a great deal of satisfaction working with a company that aligns with their own values, a company that is socially responsible and aims to have a positive impact on society.

Employers can also foster a sense of purpose by taking the time to acknowledge employees, celebrate their achievements and reward hard work. After all, we all want to grow personally and make a meaningful difference.

Insights Employee Benefits is brought to you by JRG Advisors

How to increase employee engagement with alternative benefits offerings

As a trusted partner and advisor, benefits brokers have the opportunity to educate and counsel employees year-round on benefits offerings to keep them engaged. All too often though, benefits professionals become entangled in the process — only focusing on the employer or HR director. They develop tunnel vision when it comes to recognizing and minimizing the impact selecting benefits each year has on employees.

“The bottom line, benefits are confusing and stressful. Many employees make their benefits decisions without fully understanding the offerings available to them, how they work and more importantly whether or not a plan is suited for their unique needs,” says Ron Carmassi, sales executive at JRG Advisors.

Smart Business spoke with Carmassi about how alternative benefits can help alleviate dissatisfaction with benefits programs.

Where do some benefits programs fall short and how can employers fix this?

A 2016 Harris Poll revealed that half of employees find benefits decisions to be stressful, 20 percent regretted their choices and 41 percent found open enrollment to be extremely confusing. The poll also found that while HR directors spend a significant amount of time and effort throughout the year preparing and sourcing options for employees, only one-third of employees actually read the material. This lack of education and knowledge creates anxiety and dissatisfaction around the benefits program.

The secret ingredient lies in education. Most employees associate ‘benefits’ with ‘health insurance.’ While health insurance is the main staple, there are a wide array of lesser-known benefits to offer and employees may not be aware of all their options. Alternative benefits offerings, aside from standard health insurance, can play a vital role in increasing employee satisfaction and ultimately their engagement.

What are examples of alternative benefits?

Voluntary benefits: These benefits are a great way to enhance your total program and increase employee satisfaction, with little impact on the budget. Some types of voluntary benefits that can deliver convenience and value are accident, critical illness and pet insurance. Employees need a clear understanding of not only how the coverage works, but also the benefits of having coverage and the potential risks of going without.

Life insurance: While it can be depressing to prepare for your mortality, it’s an important topic. LIMRA, a research and consulting firm, determined that 30 percent of Americans don’t have life insurance, and 48 percent of households have an insurance gap of $200,000 or greater. The research also found that from 2010 to 2016, life insurance enrollment increased 10 percent among millennials as they began aging, buying homes and having children. A life insurance plan can be valuable to younger employees who may be starting families. If you already offer life insurance, all employees should be reminded to review and update their policies.

Short-term/long-term disability: Regardless of whether your workforce is young or old, long-term disability should be considered. No one is immune, so take a multi-generational approach. Many of the older employee population have families and recognize the importance of protecting themselves in the event they’re unable to work. For younger employees, it’s an opportunity to remind them that disabilities are a real possibility. While ‘disability’ is commonly associated with a catastrophic condition, it could simply mean being temporarily unable to work due to back problems or surgery. In any case, it’s always better for employees to be safe than sorry.

Retirement plans/401(k): Whether employees are close to retirement or have decades left in the workforce, saving for retirement is a key component of financial security. Offering a 401(k) or other retirement benefits can increase employee loyalty and is a great recruitment and retention tool. But they are only helpful if employees are aware of and understand them. Many people participate in a 401(k) contribution plan and develop an out-of-sight, out-of-mind mindset. Open enrollment is the perfect time to review retirement savings. If an employer provides a 401(k) match up to a certain percentage, employees should be encouraged to increase their contribution to that threshold.

Insights Employee Benefits is brought to you by JRG Advisors

What benefits approach makes a positive impact for your business?

Historically, if you are like many businesses trying to provide employees with a quality benefits package at the most affordable price, it is likely that you repeat the same old process year after year and at the plan renewal.

It typically begins with a few prayers to the renewal gods for a low premium increase, followed by reviewing quotes, comparing benefits and networks — leap frogging from one insurance company to another and shifting more costs to your employees.

To make matters worse, the Affordable Care Act (ACA) has placed even more regulatory requirements and administrative burden on employers.

Now more than ever, employers need to break tradition and work with a broker who can negotiate, innovate and leverage technology to support your plan’s enrollment, communications, data and reporting.

Smart Business spoke with Ron Smuch, insurance and benefits analyst at JRG Advisors, about key areas employers should consider when selecting an insurance broker.

Are you provided with year-round support?

Accessibility and support is the foundation for maintaining an effective benefits program.

While it’s true that open enrollment is a challenging time of year, employers need to ask themselves, ‘What is my broker doing for my benefits plan the other months of the year, when it comes to customer service, compliance support, education, technology and strategic planning for the next renewal?’

What advantages can ACA compliance tools provide?

The rules and regulations governing employee benefis plans are complex, but technology is available to guide employers.

For example, there are tools to determine your number of full-time employees, ensure that your health plan provides minimum value and deciphers complex IRS reporting requirements.

To avoid compliance violations and penalties, choose an experienced, technology-based broker who provides access to tools, resources and offers qualified guidance.

What are examples of how technology can be used in benefits?

Technology now exists that allows an employer to gain de-identified employee health data and risk factors. Armed with this information, gaps in care can be identified, employee education can be specific and emerging health insurance claims can be reduced.

As far as open enrollment, this process can be not only a lot of work for the employer, but also a very confusing process for employees.

By using technology-based enrollment, however, an employer can save time and money and make the process more efficient and user-friendly for the human resources department and their employees. Many technology-based systems have forged their way toward improved communications, increased productivity, streamlined processes and cost savings for employers.

What are the takeaways for employers that want to become more innovative when it comes to their benefits?

The balancing act for an employer, which is trying to maintain a cost efficient, effective and competitive benefits package, requires an innovative benefits expert who can implement and maximize technology to meet your company’s unique employee benefit needs.

As an employer, ask yourself, ‘Is my broker making a difference for my company?’ A benefits expert who provides technology, resources, data analysis, targeted solutions and strategy to impact cost has the expertise and innovation you should be demanding.

Insights Employee Benefits is brought to you by JRG Advisors

Benchmarks to help you attract top talent and compete

The employers that win the current and future talent wars are those that address talent issues and rewards from a human capital investment management perspective. They make decisions about rewards resource allocation that align with their organizational fingerprint and that maximize return on talent investment.

With an ongoing process of situational assessment, strategy and tactics development, and decision-making, these organizations are moving away from budget-driven rewards tactics and toward strategy-driven rewards budgeting.

Smart Business spoke with Joe Roberts, area vice president of Health & Welfare, Key Accounts, and Keith Friede, area vice president of Talent & Organization Development, at Gallagher, about how employers can move in front of their competitors as a destination for talent.

What challenges are employers facing?

A tsunami of benefits and HR legislation and accompanying regulations during the past few years has inundated employers — so much so that most employers, from a practical perspective, cannot successfully comply with all the requirements to which they are subject. The workforce continues to diversify. A one-size-fits-all approach to rewards, while simpler, is no longer a sustainable approach for employers wishing to attract, retain and engage top talent. Technology continues to change, which can disrupt revenue and profit models. This may result in difficult decision-making and in some cases, reluctance to make changes.

How does this impact benefits and HR?

Employers have to rethink and refocus their strategies. Attracting and engaging top talent is the ultimate goal, so employers should couple competitive short-term and long-term rewards with a strong engagement program. They should also focus on linking local outcomes and costs to employee career and global business success. Two other closely related elements, controlling health care costs and improving employee total wellbeing, require employers to balance increasing health care costs with other total rewards costs by reducing controllable spend. In its simplest form, the process starts with creating a culture of employee health that accounts for a person’s social, emotional, career, community and physical wellbeing.

For regulations, employers must develop a comprehensive human capital risk approach that identifies all types of human capital (not just compliance) risks comprehensively, and then assesses risk potential and degree of severity, determines the appropriate treatment for each risk (across a wide range of possibilities), and finally communicates decisions to key constituents. Too many employers wait for the next wave of legislation/regulation and then react, often in a way that complicates strategic objectives.

Employers should look at customizing rewards and overall employee experience. This isn’t just about generations. It’s about recognizing a range of differences, including life stage, career aspirations, risk tolerance, financial circumstances, family size and situation, health, spouse’s employment, etc.

Most employers utilize technology to address regulatory compliance and administration needs. But the employers that harness technology to help drive organizational and human capital strategy will have a competitive advantage.

What trends have you seen? What do you anticipate seeing this year?

Legislation and regulation will continue to proliferate. Workforce demographics will continue to diversify. Technology advances will result in greater choices and complexity (and cost). Compensation and benefits costs will continue to increase.
In 2018, there should be a bigger focus on employee engagement. Many organizations focus on improving customer satisfaction, increasing the bottom line and achieving other crucial business outcomes. These can be optimized with improved engagement.

Are companies structuring compensation or benefits differently as a result?

Too many organizations try to maintain the status quo — the same human capital investment mix, and with each legislative change, the same compensation or benefit investment within the new requirements. Top-performing organizations are clear about the human capital implications of their strategy, and then make decisions consistent with those implications and their strategy.

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