Your relationship with your insurance and employee benefits advisor is an important aspect of your business.

“Your advisor should take the time to learn about your business so he or she can find the right solutions for your needs,” says Amy Broadbent, vice president at JRG Advisors, the management arm of ChamberChoice. “The goal should be working together to implement a long-term strategy for your business.”

Smart Business spoke with Broadbent about what to look for when selecting an insurance and employee benefits advisor.

Why is choosing the right insurance and employee benefits advisor so important?

Today’s demanding environment dictates a change in the way you purchase and manage your insurance programs. Securing the best insurance and benefits package for your business begins with planning. Your advisor should be a partner who provides ongoing assistance, consultation, and service that will help you control expenses and choose the best plans for your company’s needs. A consultative advisor will be engaged with you and your business throughout the year — not only to deliver your renewal.

What should you look for in an advisor?

The current benefits arena requires far more than brokering quotes from multiple insurance companies. The value proposition of a successful advisor must encompass more in order to bring value to your employee benefits management and insurance programs. You need an advisor who will:

  • Analyze your risks and make cost containment recommendations.

  • Evaluate, negotiate with and recommend insurance companies and business partners based on a rigorous selection criteria and performance objectives.

  • Implement an action plan to control costs.

  • Offer resources for your employees when they have benefits questions and claim problems.

  • Promote a healthy work environment for you and your employees.

  • Research and recommend possible technology solutions.

  • Ensure you are compliant with health care reform, COBRA, HIPAA, FMLA, Medicare, ADA and state-specific legislation.

Employee satisfaction is paramount to retaining top employees and, ultimately, your success. An advisor should help you measure employee satisfaction and engagement,and offer strategies to improve these areas. Employee communications are critical. Many employees do not take full advantage of their benefits because they do not understand them. Your advisor should help you educate employees about their benefits and how to best utilize them; plus, help employees understand how various laws such as health care reform, COBRA and FMLA impact them and their families. Is your advisor creating customized education materials, tools and communications to help streamline and simplify things, not only during open enrollment but also on an ongoing basis throughout the plan year?

When selecting a qualified advisor, what should you specifically ask?

When seeking an advisor, request referrals from existing clients. Also inquire about the advisor’s relationships with insurance companies. Often overlooked, this should be taken into consideration as the advisor will have an easier time resolving issues, securing coverage and getting things accomplished in a timely manner with companies with which he or she has positive working relationships.

Also, ask your advisor to explain how he or she is compensated. A reputable advisor will be happy to disclose this information and will not make recommendations based on insurance company commission or bonus money. Instead, he or she will have the client’s best interest at heart regardless of the payment from any given insurance company. Your advisor relationship is an important aspect of your business and you have a right to know how he or she is compensated for the work done for you.

The main priority for an advisor should be obtaining the best possible plans at the most competitive prices, while providing the best possible client service, technology risk management and cost containment. Not all advisors are created equal. Choosing an advisor to be your long-term strategic partner will make working with him or her much more meaningful to your business.

Amy Broadbent is a vice president at JRG Advisors, the management arm of ChamberChoice. Reach her at (412) 456-7250 or

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Young adults ages 19 through 29 are the largest growing age group in the U.S. at risk for being uninsured. Officials estimate this age group accounts for approximately 13 million of the 47 million Americans living without health insurance.

“As young adults transition into the job market, they often have entry-level jobs, part-time jobs, or jobs in small businesses and other employment that typically come without employer-sponsored health insurance,” says Keith Kartman, client advisor at JRG Advisors, the management arm of ChamberChoice.

The Dependent Insurance Coverage provision in the Patient Protection and Affordable Care Act (PPACA) was designed to address the millions of young adults currently uninsured.

Smart Business spoke with Kartman about how dependent coverage laws work.

What are the dependent coverage laws?

The PPACA requires private insurers that offer dependent coverage to children to allow young adults up to the age of 26 to remain on their parent’s insurance plan.

A number of states also require insured health plans to cover dependents past age 26. Every group health plan purchased by employers from commercial health insurers and health maintenance organizations must comply with Pennsylvania’s dependent coverage laws. However, self-funded plans subject to the Employee Retirement Income Security Act are exempt from this dependent coverage law. Pennsylvania’s dependent coverage only applies to medical. This excludes dental and vision only, hospital indemnity, accident or specified disease only, Medicare supplement, long-term care and individual health insurance policies.

Who qualifies for this dependent coverage? 

Regulations specify a young adult can qualify for this coverage if he or she is no longer living with a parent, is not a dependent on a parent’s tax return or is no longer a student. Both married and unmarried young adults can qualify, although that coverage does not extend to a young adult’s spouse or children.

The law also states that young adults can only qualify for dependent coverage through group health plans in place prior to March 23, 2010, if they are not eligible for another employer-sponsored insurance plan. In other cases, a young adult can choose to remain insured through a parent’s dependent coverage, even if the young adult is eligible for other employer-sponsored coverage.

What do employers need to know?

The Department of Health and Human Services has stated that young adults gaining dependent coverage under the PPACA can’t be charged more for coverage than similar individuals who didn’t lose coverage due to the end of their dependent status. Also, young adults newly qualifying as dependents under the law must be offered the same benefit package as similar individuals who were already covered as dependents.

What are the tax implications?

Treasury Department-issued guidance on the tax benefits states that employer-provided health coverage for an employee’s child is excluded from the employee’s income through the end of the taxable year in which the dependent turns 26. The benefit applies regardless of whether the plan’s coverage is required or voluntarily.

Key elements include:

  • The tax benefit continues beyond extended coverage requirement. Some employers may decide to continue coverage beyond the 26th birthday. In that case, if an adult child turns 26 in April but stays on the plan through Dec. 31 — the end of most people’s taxable year — all health benefits that year are excluded for income tax purposes.

  • Broad eligibility. This tax benefit applies to various workplace and retiree health plans, as well as self-employed individuals qualifying for the self-employed health insurance deduction on federal income tax returns.

  • Health premium shares for both employer and employee are excluded from income. In addition to excluding any employer contribution toward qualifying adult child coverage from income, employees can receive the same benefit by contributing toward the cost of coverage through a cafeteria plan. The IRS states that a cafeteria plan allows employees to choose from two or more benefits consisting of cash or qualified benefit plans.

Keith Kartman is a client advisor at JRG Advisors, the management arm of ChamberChoice. Reach him at (412) 456-7010 or

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According to The World Health Organization, the United States spends more annually on health care than any other country in the world. Many health problems are a direct result of smoking, lack of exercise, poor diet, excess stress and other unhealthy lifestyle choices.

An unhealthy employee costs U.S. employers an average of $670 per year and obesity accounts for about $400 of those costs, according to the Society of Human Resource Management.

“Through workplace wellness programs, an employer can raise awareness on leading health issues and offer options to help impact the overall health of their employees,” says Renay Gontis, communications coordinator at JRGAdvisors, the management arm of ChamberChoice.

Smart Business spoke with Gontis about how to create a workplace wellness program to lower health benefit costs over time.

What is a workplace wellness program?

Workplace wellness programs are made up of long-term strategies and activities geared toward reducing benefit costs through improved employee health. Wellness programs may include education classes, onsite health screenings, subsidized use of fitness facilities, healthier options in vending machines, and internal policies designed to promote and encourage healthier behavior.

Individual employee health is directly tied to employee morale, absenteeism and productivity — healthier employees are less likely to miss work, be more productive during the day and be happier overall. Improved employee health can also reduce health plan utilization, which will, in turn, lower health benefit costs over time and improve a company’s bottom line.

What are common wellness initiatives?

Common initiatives include onsite flu shots, general health and safety communications for employees, weight management programs, smoking cessation, health fairs, health risk assessments and walking programs. Learn about your employees to develop a program based on their goals, risks and needs. In addition, employers are offering incentives, as well as connecting participation to the medical premium cost.

How will the Patient Protection and Affordable Care Act (PPACA) impact health insurance and employee wellness decisions?

PPACA includes enhanced wellness incentives through health insurance plan designs that reward targeted wellness participation and the attainment of specific improvement in health outcomes.

How does PPACA encourage wellness incentives into health plan design?

Specifically, proposed regulations provide for increases in the maximum reward or penalty from 20 to 30 percent of the total cost of employee coverage and increase the reward or penalty from 30 to 50 percent for tobacco cessation programs in 2014.

How do you create a wellness program?

To develop a successful program:

  • Gain upper management support.  Management must understand the benefits for employees and the organization, and be willing to put funds toward development, implementation and evaluation.

  • Create a wellness team. The team — made up of all levels of employees — will be responsible for developing, implementing and evaluating the results of the program.

  • Tailor initiatives to employee needs. Gather data through internal focus groups or surveys to help assess your employees’ health interests and risks.

  • Establish an annual plan. An annual operating plan should include a mission statement for the program, along with measurable short- and long-term goals.

  • Create a supportive environment. It is important to provide ongoing encouragement, support, opportunities and rewards to keep employees engaged.

  • Consistently evaluate outcomes. Throughout the program, especially at the end, review whether goals and objectives have been achieved. It’s important to adjust as needed to achieve the most favorable outcome for the employee and company.

If an employer is interested in starting a wellness program, contact your adviser and insurance company for ideas on cost-effective wellness programs. Most insurance companies offer their own programs, which can be used individually or in conjunction with your company’s customized program.

Renay Gontis is the communications coordinator at JRGAdvisors, the management arm of ChamberChoice. Reach her at (412) 456-7000 or

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The Health Insurance Portability and Privacy Act (HIPAA) governs the use of Protected Health Information (PHI), and failure to comply with the requirements of the policy can be a costly mistake.

As an employer who sponsors a health plan, it is important to fully understand your responsibilities under the act, as failing to do so can result in severe penalties, says Jessica Galardini, president and COO of JRG Advisors, the management arm of ChamberChoice.

“As an employer, you may think that HIPAA doesn’t apply to you,” says Galardini. “But if you are an employer that also sponsors a health plan, ignorance of the law could lead to fines and even jail time.”

Smart Business spoke with Galardini about what plan sponsors need to know about HIPAA and how to ensure that you remain compliant.

What is the HIPAA Privacy Rule?

As required by the Health Insurance Portability and Accountability Act of 1996, the U.S. Department of Health and Human Services (HHS), in December 2000, released final federal regulations that govern the use and disclosure of personally identifiable health information — the HIPAA Privacy Rule. In most cases, the deadline for compliance with the HIPAA Privacy Rule was April 14, 2003. The rule was then updated by the Health Information Technology for Economic and Clinical Health Act (HITECH Act), which took effect in 2010.

The HIPAA Privacy Rule directly regulates health plans, health care clearinghouses and health care providers that conduct certain transactions electronically, and indirectly regulates plan sponsors.

What information is governed by the HIPAA Privacy Rule? 

The HIPAA Privacy Rule governs personal health information, which is defined as information that is oral, written or electronic; individually identifiable; created or received by a covered entity; and relates to the past, present, or future physical or mental health or condition of an individual, the provision of health care to an individual, or the past, present, or future payment for the provision of health care to an individual.

What are plan sponsors required to do? 

The compliance requirements indirectly imposed upon a plan sponsor by the HIPAA Privacy Rule vary based on whether or not the plan sponsor has access to PHI. A plan sponsor that offers a fully insured group health plan will be minimally impacted by the HIPAA Privacy Rule if its access to health information is limited to the following plan sponsor functions:

  • Assisting employees with claim disputes as permitted by the employees’ written authorization.

  • Receiving Summary Health Information (SHI) for purposes of obtaining premium bids or modifying, amending or terminating the plan.

  • Conducting enrollment and disenrollment activities.

A plan sponsor that has access to PHI in order to perform plan administration functions must amend the plan documents to include a description of permitted uses and disclosures of PHI by the plan sponsors; certify to the group health plan that the plan documents have been amended; and comply with all of the administrative requirements contained within the HIPAA Privacy Rule.

What are the administrative requirements of the HIPAA Privacy Rule?

In general, the HIPAA Privacy Rule requires plan sponsors with access to PHI, together with the group health plan, to comply with all of the administrative requirements contained within the HIPAA Privacy Rule. For a summary of requirements, contact your benefits advisor or visit

What are the penalties if an organization fails to comply with the HIPAA Privacy Rule?  

Failure to comply with the HIPAA Privacy Rule may result in civil or criminal penalties. HIPAA’s civil penalties were increased by the HITECH Act but may not apply if the violation is corrected within 30 days. For violations in which the individual is not aware that the violation has occurred, the minimum penalty remains $100 per violation, up to $25,000 per calendar year for identical violations.

If the violation is due to reasonable cause, the minimum penalty is $1,000 per violation, up to $100,000 per calendar year. For corrected violations that are caused by willful neglect, the minimum penalty is $10,000 per violation, up to $250,000 per calendar year.

The maximum civil penalty for any type of violation and the minimum penalty for uncorrected violations caused by willful neglect is $50,000 per violation, up to $1.5 million per calendar year for identical violations.

The criminal penalties are:

  • $100 per violation, up to $25,000 per year, per standard, for disclosures made in error.

  • $50,000 and/or one year in prison for knowingly obtaining or disclosing PHI.

  • $100,000 and/or up to five years in prison for obtaining information under false pretenses, and $250,000 and up to 10 years in prison for obtaining PHI with an intent to sell, transfer, or use it for commercial advantage, personal gain or malicious harm.

Taking the time to understand the rules will ensure that your organization is complying as it should under the law.

Jessica Galardini is president and COO of JRG Advisors, the management arm of ChamberChoice. Reach her at (412) 456-7231 or

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While the future of health care reform in its entirety remains uncertain, many provisions of health care reform are already in place as a result of the Patient Protection and Affordable Care Act (PPACA). And there are things that businesses must be doing now to stay on the right side of the law.

As an employer, have you taken the necessary measures to ensure your business is compliant? If you haven’t, you could find yourself in trouble with the Department of Labor, says Ron Smuch, insurance and benefits analyst at JRG Advisors, the management arm of ChamberChoice.

“The  DOL has begun exercising its investigative authority to enforce compliance with the health care reform law, requesting that health plan sponsors provide proof of compliance with PPACA’s mandates,” says Smuch.

Smart Business spoke with Smuch about the DOL’s audit requests related to PPACA compliance and what businesses need to know to stay on the right side of the law.

What areas has the DOL been looking into?

The DOL’s audit requests related to PPACA compliance have been divided into three categories — requests for grandfathered plans, requests for nongrandfathered plans and requests for all health plans.

A grandfathered plan is a group health plan that existed as of March 23, 2010 — the date PPACA was enacted — and that has not had certain prohibited changes made to it since that date. If a plan is grandfathered, it is exempt from certain health care requirements, such as providing preventive health services without cost sharing. However, if a plan makes changes — including changing providers, increasing co-insurance charges, significantly raising co-pays or deductibles, significantly lowering employer contributions, etc. — it loses its grandfathered status and must comply with additional health care reform requirements.

Regulations require a plan to disclose to participants (every time it distributes materials describing plan benefits) that the plan is grandfathered and, therefore, not subject to certain PPACA requirements. For grandfathered health plans, the DOL has been requesting records documenting the terms of the plan on March 23, 2010, and the participant notice of grandfathered status included in materials that describes the benefits provided under the plan.

If a plan has lost its grandfathered status, what must it do differently? 

Plans that do not have a grandfathered status must comply with additional PPACA mandates, including providing coverage for preventive health services without cost sharing. For nongrandfathered health plans, DOL audits are requesting documents related to preventive health services for each plan year beginning on or after September 23, 2010, the plan’s internal claims and appeals procedures, contracts or agreements with third-party administrators, and documents relating to the plan’s emergency services benefits.

Some of PPACA’s mandates apply to all health plans, regardless of whether they have grandfathered status. For example, all plans must provide dependent coverage to age 26 and must comply with the PPACA’s restrictions on rescissions of coverage and on lifetime and annual limits on essential health benefits.

The DOL has been requesting the following information from both grandfathered and nongrandfathered health plans: a sample notice describing enrollment opportunities for children up to age 26; a list of participants who have had coverage rescinded and the reason(s) why; documents related to any lifetime limit that has been imposed under the plan since September 23, 2010; and documents related to any annual limit that has been imposed under the plan since September 23, 2010.

What else do employers need to demonstrate?

Employers should be prepared to further demonstrate their compliance by producing records of the steps they have taken to comply with PPACA requirements, including plan participation information, plan amendments or procedures that were adopted, and notices that were provided to those covered, such as the notice of grandfathered status or notice of enrollment for children up to age 26. Plans must also show that they cover out-of-network emergency services without requiring more cost sharing that would otherwise be required by covered participants using in-network emergency services.

If a plan’s PPACA compliance documents are maintained by a service provider, the employer should make sure the necessary documents are being retained and can be produced upon request. Your adviser can work as an intermediary with the insurance company/service provider to ensure compliance requirements are satisfied.

And if your company receives a PPACA audit request from the DOL, consult with your advisors immediately for more information on how to proceed.

What are the penalties for failing to comply?

Penalties are significant. Under PPACA, employers with more than 50 employees are required to provide coverage. Those that fail to do so will be assessed a fine of $2,000 per employee per year, minus the first 30 employees. So an employer with 50 employees that does not provide coverage would pay a penalty on 20 employees, or $40,000 a year.

An employer that offers coverage can also find itself in trouble. For example, an employer’s willful and intentional failure to comply with the Summary of Benefits and Costs requirement may result in a penalty of  $1,000 per day per participant. And while the cost of providing coverage for employees is tax-deductible for employers, the cost of paying penalties is not.

Ron Smuch is an insurance and benefits analyst with JRG Advisors, the management arm of ChamberChoice. Reach him at (412) 456-7017 or

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Published in Pittsburgh
Monday, 01 October 2012 11:49

What employers need to know about Medicare

Reaching age 65 is an important turning point for many baby boomers, particularly if they are not retiring from work. In the past decade, Americans working past the Medicare-eligibility age has become far more common.

Accordingly, companies are in a unique position to take steps to coordinate their health care coverage options for employees who are eligible for Medicare, says Crystal Manning, Medicare specialist at ChamberChoice, the management arm of JRG Advisors.

“As an employer, knowing the rules and assisting employees can be difficult,” says Manning.

Smart Business spoke with Manning about Medicare rules and what employers need to know about this challenging arena.

What is Medicare?

Medicare is a federal health insurance program established by Congress in 1965 that provides health care coverage for those ages 65 or older. It also covers those younger than 65 who have certain disabilities or end-stage renal failure. Medicare is not a welfare program and should not be confused with Medicaid.

Medicare is financed by a portion of the payroll taxes paid by workers and their employers. Coverage under Medicare is similar to that provided by private insurance companies, as it pays a portion of the cost of medical care. Often, deductibles and co-insurance (partial payment of initial and subsequent costs) are required of the beneficiary.

What are the different parts of Medicare?

Medicare is composed of several different parts, or insurance:

  • Part A is hospital insurance and covers any inpatient care a Medicare recipient may need. It also covers skilled nursing facilities and hospices. Most U.S. citizens qualify for zero premium Medicare Part A upon attainment of age 65.

  • Part B is the actual ‘health’ coverage under Medicare. It covers physician visits, screenings and the like. As with Part A, most U.S. citizens qualify for Part B upon attainment of age 65.

  • Part C is a Medicare Advantage Plan. This is a plan that offers Parts A and B, sometimes with Part D, through a private health insurer.

  • Part D is the newest Medicare coverage, established with the Balanced Budget Act of 1997, which provides prescription drug coverage to the elderly.

What are Medicare enrollment periods?

Medicare enrollment periods are a surprisingly complex subject. Medicare Initial Enrollment Period is the seven-month period that starts three months before turning 65, includes the month when an individual turns 65, and ends three months later. During that time, individuals can sign up for Medicare Advantage and/or a Medicare Part D prescription drug plan.

Those who do not sign up for Parts A, B and D can face penalties for every month they do not have coverage. An enrollment penalty may be assessed from Social Security payments if the employee does not apply when eligible for either Part B or D.

What is required of an employer?

Employers are required to file annual Centers for Medicare and Medicaid Reporting and Employee-Notice Distribution letters even if one employee has coverage under Medicare Parts A, B, or C. Usually companies receive letters from their insurance companies asking for a Federal Tax Identification number and the group size of employees each year.

If your company has 19 or fewer full- and part-time employees, Medicare is almost always primary. Here, it is essential that employees turning 65 enroll in Medicare Parts A and B. If they do not, generally they will have to pay anything that Medicare would have covered. If your company is larger, various rules determine whether your group plan is the primary or secondary payer. MSP requirements also apply for Medicare-eligible employees who are disabled or have end-stage renal disease.

Once per year, written notice distribution is required to all Medicare-eligible employees. This must inform the employee whether the employer’s prescription drug coverage is ‘creditable’ or ‘noncreditable.’ Notice can be sent electronically, but it is often easier to distribute in written format. These need to be sent before October 31.

It is a good idea for employers to provide employees with written details about their employer-provided coverage, which will help them decide how to handle their Medicare choices.

What does an employer need to do if the employee in question is on COBRA?

COBRA coverage is usually offered when leaving employment; if the employee has COBRA and Medicare coverage, Medicare is the primary payor. If an employee has Medicare Part A only, signs up for COBRA coverage and waits until the COBRA coverage ends to enroll in Medicare Part B, he or she will have to pay a Part B premium penalty.

Employees should be disenrolled in COBRA once they turn 65. A number of Medicare beneficiaries have delayed enrolling in Medicare Part B, thinking that because they are paying for continued health coverage under COBRA, they do not have to enroll in Medicare Part B. COBRA-qualified beneficiaries who have delayed enrollment in Medicare Part B do not qualify for a special enrollment period to enroll in Part B after COBRA coverage ends.

According to the Department of Labor Bureau of Labor and Statistics, the number of workers age 65 and older has increased dramatically since the late 1990s. With that trend expected to continue, companies have an excellent opportunity to assist employees in their health insurance decisions. Navigating the ever-changing Medicare rules can be tricky.

However, with the help of a qualified Medicare specialist, the process can be rewarding for the employer and employees.

Crystal Manning is a Medicare specialist at ChamberChoice, the management arm of JRG Advisors. Reach her at (412) 456-7254 or

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Published in Pittsburgh

The Supreme Court ruled in June that health care reform is constitutional and upheld the Patient Protection Affordable Care Act (PPACA) in its entirety. As a result, health care reform will continue to be implemented as planned and provisions that are already in effect will continue, says Jessica Galardini, president and COO of JRG Advisors, the management company of ChamberChoice.

“The individual mandate requiring individuals to purchase health insurance or pay a penalty is the major component of the law. Because the court upheld that mandate, it did not need to decide whether other provisions of the law are constitutional,” says Galardini.

Smart Business spoke with Galardini about the impact of the PPACA on employers and the benefits that they offer to employees.

What does this ruling mean for employers?

All aspects of the law already implemented will remain in effect. These include the ability for adult children to remain on their parents’ coverage until age 26, no exclusions for children with pre-existing conditions and certain preventive services without cost sharing for nongrandfathered plans. A grandfathered plan is one that has been in existence continuously since before the act was passed and is not required to comply with select provisions of PPACA as long as it meets certain other requirements.

Provisions of the law not yet in effect will be implemented as planned. Although much attention has been paid to the big changes slated for 2014, there are numerous smaller requirements that employers need to be aware of and prepare for now.

For example, insurers have already started issuing rebates to employers with fully insured health plans who qualify due to medical loss ratio (MLR) rules. The MLR rules require insurance companies to spend a certain percentage of premium dollars on medical care and health care quality improvement rather than on administrative costs.

Rebates can be issued in the form of a premium credit, lump sum payment or premium ‘holiday’ during which premium is not required. Any portion of a rebate that is a plan asset must be used for the exclusive benefit of the plan’s participants and beneficiaries, for example, reducing participants’ premium payments.

What other changes do employers need to be aware of regarding benefits?

Effective September 23 of this year, insurers must provide a summary of benefits and coverage (SBC) to participants and beneficiaries. The SBC is to be a concise document with stringent criteria as to the number of pages and print font that provides information about the health benefits in a simple and easy-to-understand format. The SBC will need to be distributed to employees during open enrollment, with any material modifications to the plan throughout the year being communicated at least 60 days in advance.

Additionally, beginning with the 2012 tax year, employers that issue 250 or more W-2 forms must report the aggregate cost of employer-sponsored group health insurance on employees’ W-2 Forms. The cost must be reported beginning with the 2012 W-2 Forms, which are due in January 2013.

What changes are looming for 2013?

Changes scheduled for 2013 include limiting pretax contributions toward flexible spending accounts (FSAs) to $2,500. This limit will be indexed for cost-of-living adjustments for 2014 and later years.

Employers will also be required to provide all employees with written notice about health insurance exchanges and the consequences if an employee decides to forego employer-sponsored coverage and purchase a qualified health plan through an exchange.

Finally, employers will be required to withhold an additional 0.9 percent Medicare tax on an employee’s wages in excess of $200,000, or $250,000 for married couples filing jointly.

What is happening in 2014?

By all accounts, 2014 will be the most significant year. Annual dollar limits for health services will be eliminated, as will medical underwriting and exclusions for pre-existing conditions. Additionally, insurance exchanges will be enacted for individuals and small employers with fewer than 50 employees. This is a key component of health care reform law. Individuals will be required to have health insurance or pay a tax for not having it.

Businesses with 50 or more full-time employees must provide health insurance for employees or pay a tax for not doing so.   And for states that choose not to set up their own exchanges, the federal government will do it for them. To date, Pennsylvania has not passed legislation authorizing its own exchange.

Although the Supreme Court upheld the health care reform law, the future remains somewhat uncertain. Opponents will continue to challenge the law and debate its constitutionality through the November 2012 elections, and the strength of the economy and the response of private insurance companies with innovative products and funding solutions will also impact private and public options for individuals and employers.

What is certain is that health care benefits, funding and delivery are changing.  Employer and employee decisions are far more complex and require educated consideration.  Work with your advisor to learn more about your options and to understand exactly what is required of your company to remain compliant with the law.

Jessica Galardini is president and COO of JRG Advisors, the management arm of ChamberChoice. Reach her at (412) 456-7231 or

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Published in Pittsburgh

Employee productivity is important to any business’ success, and if an employee is too overwhelmed by personal or behavior problems to perform at his or her highest level, the company’s productivity will suffer as a result.

To address those issues, many employers are turning to Employee Assistance Programs (EAPs). An EAP can help identify issues facing troubled employees and direct employees to resources such as short-term counseling, referrals to specialized professionals or organizations, and follow-up service to help them address those issues, says Ron Carmassi, a sales executive with JRG Advisors, the management arm of ChamberChoice.

“EAPs offer a safe environment where an employee can discuss problems with a counselor who can make a confidential and professional assessment and provide referral to a mental health professional if necessary,” says Carmassi.

Smart Business spoke with Carmassi about EAPs and how they can assist your employees, improving both the lives of your workers and the productivity of your business

What are EAPs designed to accomplish?

First created many years ago in response to businesses’ concerns about the impact of employee alcohol and drug abuse on bottom-line productivity, employee assistance programs are now designed to deal with a much wider and more complex range of issues that are confronting today’s work force. Modern EAPs are designed to help workers with issues including family and/or marriage counseling, stress, depression, financial difficulties, crisis planning, illness, pre-retirement planning and other emotional, personal and wellness needs.

The expansion in the scope of EAP counseling is often attributed to the change in our social fabric. Double wage-earning households, an increase in the number of single parent households, economic crises, changing and more demanding career patterns, and technological advances have created new and different types of stresses, which affect the health and productivity of many employees.

Individuals experiencing a personal or family crisis and who are under chronic stress often have nowhere to turn for advice and assistance other than the EAP that is offered by their employer.

What is the benefit to employers that offer EAPs?

Many employers realize a direct link between employee well being and employee productivity.  The difference in value and productivity between happy and unhappy employees can be profound, as personal and work-related problems can manifest themselves in poor job performance, adversely impacting the company’s overall productivity.

Employers often perceive that the biggest advantage of an EAP is the positive impact it can have on employee productivity, but there are other benefits as well. For example, businesses offering EAPs often see a reduction in absenteeism, an increase in morale, fewer work-related accidents, a reduction in incidents resulting from substance abuse and an overall reduction in medical costs, resulting in a significant savings for the company.

In addition, employers that include an EAP as part of their benefits package are often viewed as more ‘employee-supportive’ than competitors that do not offer this type of program. That, in turn, makes the EAP a tool for both employee attraction and retention, potentially resulting in lower turnover.

Another advantage of the EAP is that it frees up the company and its personnel to focus on operations, rather than devoting work time to issues that are not directly related to productivity, deadlines and other business activities that result in growth and added revenue.

What should an employer consider when choosing an EAP?

The characteristics of EAP programs vary, so it is important to compare programs to understand exactly what you are getting before you sign on. In addition to cost structure, other factors to consider before purchasing an EAP include the qualifications of the staff that will provide counseling.

Staff should be professionally licensed with established relationships with local and/or national health groups and they should also be engaged in continuing education initiatives so that they remain current. Be sure to inquire about the extent of training services because EAP training programs vary in scope and subject matter.

Convenience of services and responsiveness of staff are also important factors to consider, and business owners should seek out EAP providers with facilities in the same geographic region as the company so that employees can visit before, during or after work. The EAP should also include a toll-free telephone line that is operational around the clock

What would you say to employers who say they can’t afford to sponsor yet another benefit?

While employers understand the value of an EAP, many are concerned about the cost of implementing and maintaining this type of program, particularly with increasing costs for other insurance and employee benefit programs. And while it is true that the employer generally bears the cost of the EAP, many employers are surprised to learn they can institute an EAP at a relatively small expense to the company, often with monthly fees ranging from just $2 to $6 per employee.

More often than not, once employers become involved in an EAP, they come to believe that the return on that investment is well worth the cost.

Insights Employee Benefits is brought to you by JRG Advisors, the management arm of ChamberChoice.

Published in Pittsburgh

With health care costs continuing to rise, many employers are turning to their health plans to find ways to cut costs. And one way to do so is to make sure that your health plan covers only those who are eligible, which can result in significant cost savings. Most employers do not like to hear the word audit, but a dependent eligibility audit can save a business a significant amount of money on their employee benefits, says Craig Pritts, a sales executive with JRG Advisors, the management arm of ChamberChoice.

“The objective of a dependent eligibility audit is to identify dependents who are not eligible to be on the health plan,” says Pritts. “Those can include dependents who have exceeded the age limit that allows them to be covered, divorced spouses or even friends, roommates or other relatives who are not eligible.

It is estimated that between 3 percent and 15 percent of dependents on an average plan are not actually eligible for coverage. And just one ineligible participant can have a substantial impact on a health plan, depending on the costs of their claims.

Smart Business spoke with Pritts about how performing a dependent eligibility audit and removing ineligible dependents from a health plan can translate into significant cost savings for employers.

Why should employers consider performing a dependent eligibility audit?

ERISA includes stringent eligibility rules for plan sponsors, and employers need to ensure that all plan documents, including the summary plan description (SPD), are consistent when defining dependents. A dependent audit helps ensure that you are in compliance with ERISA by providing benefits only to eligible participants.

It is recommended that plan documents be amended to reflect the process that will be followed in determining dependent eligibility going forward, i.e., frequency of audits, the verification process, potential penalties, etc.

One important factor to remember is the rule for dependent children based on the 2010 Patient Protection and Affordable Care Act (PPACA). For all plan years beginning on or after Sept. 23, 2010, children can be considered dependents until age 26, regardless of marital status and student status.

What are the steps to performing an audit?

There are typically two steps to performing a dependent audit. First, employers should establish a period of amnesty during which employees can voluntarily remove ineligible dependents from the plan with no penalty. The most common way of doing this is to notify employees of eligibility rules in writing so that they can review the status of covered dependents. Employers generally give employees one month to notify them of ineligible dependents they may have on the plan.  Ineligible dependents that are voluntarily removed are then terminated from the plan at the end of the following month.

Second, for all dependents remaining on the plan after the initial amnesty period, employers should require employees to provide documentation to verify the dependent status/relationship and to confirm that such a relationship still exists. Examples of required documentation could include marriage certificates, domestic partner affidavits, birth certificates, adoption papers, tax forms, etc.

If an employee is unable to show proof of a dependent relationship — or declines to do so — the employer may impose penalties, terminate coverage or seek reimbursement for claims that were paid for dependents during the time in which they were deemed to be ineligible. While employers typically do not seek disciplinary action as a result of the initial audit, this is an option.

Many cases of dependent ineligibility are the result of oversight, such as forgetting to remove a child when that child reaches the maximum age limit, but other instances, such as failing to remove a former spouse, or stepchildren who live elsewhere, can be intentional and can be a serious issue to the employer. The health plan’s ability to provide for its intended beneficiaries is significantly compromised when ineligible dependents receive benefits.

Who should conduct the dependent eligibility audit?

Many employers choose to hire an independent firm to conduct an audit. This can be done on a risk-sharing basis, in which payment to the firm is based on the percentage of recovered amounts or estimated savings as a result of the removal of ineligible dependents from the plan. Using an outside firm can help your business with your employees’ perception of the independence and objectivity of the audit and make them less suspicious of the company gathering what they may perceive to be private information.

For a smaller employer who chooses to perform the audit internally, this may result in additional work but the potential savings can be worth the time and effort exerted to do so. It is important to weigh your company resources against the potential payoff of cost control and ongoing risk exposure when determining if a dependent eligibility audit is right for your company.

Talk to your benefits advisor to learn more and determine if a dependent eligibility audit is right for you. Because as many as 15 percent of dependents enrolled in a plan may not actually be eligible, spending money on an audit could prove to be an investment that saves your company a significant amount of money.

Craig Pritts is a sales executive with JRG Advisors, the management arm of ChamberChoice. Reach him at (412) 456-7253 or

Insights Employee Benefits is brought to you by ChamberChoice

Published in Pittsburgh

Health care reform is a topic that is on everyone’s mind, and for good reason.

How health care reform evolves over the next several years will impact all of us. We have already witnessed more than 1 million dependents under the age of 26 being added to their parents’ employer group insurance plans.

In addition, these plans no longer have lifetime limits for coverage and many plans have removed any cost sharing, such as copays, deductibles and coinsurance for selected preventive services. High-risk pools have also been established for those who have previously had difficulty obtaining coverage, says Chuck Whitford, a client advisor with JRG Advisors, the management arm of ChamberChoice.

“As we move through 2012, there are several events that will determine exactly what health care reform will look like in 2014, the first full year of full reform implementation as spelled out in the Patient Protection and Affordable Care Act (PPACA) legislation that President Barack Obama signed into law more than two years ago,” says Whitford.

Smart Business spoke with Whitford about health care reform and the impact it will have on your business.

What is the first major action that will impact health care reform?

The first major action that will have an impact on reform will come in June from the United States Supreme Court. In March, the Supreme Court heard arguments over legal challenges to the health care reform law. The main controversy with the law has been whether Congress had the authority under the Constitution’s Commerce Clause to require individuals to purchase a product — health insurance -— or be required to pay a penalty (referred to as the individual mandate).

The court also heard a challenge to the health care reform law’s expansion of the eligibility requirements of Medicaid to cover individuals beginning in 2014. A third issue is whether the law can function as intended if the individual mandate is found to be unconstitutional.

Are there new requirements in the law that will impact employers?

The health care reform law does contain new requirements for 2012 that employers need to be aware of. The first one is the Summary of Benefits and Coverage (SBC), which must be provided to participants following the guidelines established by the regulations.  The SBC will be limited to four double-sided pages and provides straightforward and consistent information about health benefits and coverage provided by the employer.

Its purpose is to help health plan consumers better understand the coverage that they have and to help make easy comparisons of different options. The SBC must be provided on the first day of the first open enrollment period that begins on or after Sept. 23, 2012.

What does the Patient Protection and Affordable Care Act require plans to provide?

PPACA requires plans and issuers to provide at least 60 days’ notice of any material modifications in plan terms or coverage. The final regulations clarify that plans and issuers are required to issue the 60-day advance notice when:

  • A material modification is made that would affect the content of the SBC
  • The change is not already included in the most recently provided SBC
  • The change is a mid-plan year change — that is, it does not occur in connection with a renewal of coverage

Under the final regulations, plan and issuers must provide the SBC each year at renewal. When a plan timely provides the 60-day advance notice in connection with a material modification, the final regulations provide that the plan will also satisfy ERISA’s requirement to provide a Summary of Material Modification (SMM)

What changes are coming later this summer?

Effective for health plan years starting on or after Aug. 1, 2012, nongrandfathered plans must cover specific preventive health services for women with no cost sharing. These services include well-women visits, STD screening and contraceptives.

In addition, fully insured plans may be entitled to receive rebates in August 2012 if they qualify due to the medical loss ratio rules requiring insurance companies to spend a certain percentage of premium dollars on health care, rather than on administrative or other expenses. The rebates must be used for the benefit of the plan’s enrollees, which may include reducing enrollees’ premium payments.

Also, beginning with the 2012 tax year, employers that are required to issue 250 or more W-2 forms must report the aggregate cost of employer-sponsored group health coverage on employees’ W-2 forms. For now, smaller employers are exempt from this requirement until further guidance is issued, but they may be subject to it at a later date.

It has never been more critical for employers to understand what they must do to be in compliance with health care reform as it continues to evolve and be absolutely clear on their responsibilities from a reporting standpoint.

Advisors who are knowledgeable on health care reform can be a great asset to any organization as employers undertake a level of change that has never been seen before.

Chuck Whitford is a client advisor with JRG Advisors, the management arm of ChamberChoice. Reach him at (412) 456-7257 or

Insights Employee Benefits is brought to you by ChamberChoice

Published in Pittsburgh
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