Archive for the ‘Health Care Reform’ Category

Do the New Government Healthcare Requirements Impact Your Current Compensation?

ACA LogoIn 2014, the Affordable Care Act made 10 “Essential Healthcare Benefits” (EHB) mandatory, no matter the size of the company you work for or your healthcare provider. These requirements are set to come online in 2017.

Importantly, healthcare plans must be balanced among the 10 categories, namely,

  1. Outpatient care (care you get without being admitted to a hospital)
  2. Trips to the emergency room
  3. Treatment in the hospital for inpatient care
  4. Care before and after your baby is born
  5. Mental health and substance use disorder services
  6. Prescription drugs
  7. Services and devices to help you recover if you are injured, or have a disability or chronic condition
  8. Lab tests
  9. Preventive services
  10. Pediatric services

Your insurer can substitute benefits within each category, but cannot substitute one of the main categories, and it can change coverage, such as a benefit’s duration. Finally, under the EHB, your plan cannot discriminate against you because of your age, disability or your expected length of life. Here is some greater detail about the services that must be included.

Ambulatory patient services. These are the services that you likely use the most, since they cover your regular doctor’s visits. Most plans, regardless of your company’s size, usually cover this service.

Laboratory services. The new law requires that healthcare insurers cover preventive tests like Pap smears for women and prostate exams for men. However, your insurance coverage can bill other types of diagnostic, so check to see what is covered on Employee Compensation Reports.

Prescription drugs. The EHB mandates that all healthcare plans now cover some prescription drugs. All plans must now cover at the minimum one drug in every category and class of medications approved for use in the United States. And, when you pay for prescriptions the cost must be applied to your annual out of pocket expenses.

Maternity and Newborn Care. This new requirement entitles all mothers and babies healthcare before and after the baby is born since prenatal care is preventive care, so it must be given at no additional cost.

Emergency services. Your coverage extends to trips to the emergency room. EHB allows you to get emergency services even out of network with no extra fees.  And, your plan can no longer require that you get preauthorization before you seek emergency services.

Hospitalization. This new requirement means your healthcare insurance must cover inpatient treatment for any serious medical concern. It does not mean, however, that you are exempt from paying a copay which can be quite expensive if you are still under your annual out of pocket limit.

Mental health and substance use disorder services. Perhaps this is one of the most extensive additions required by the EHB that is laid out in the Employee Compensation Reports. Your healthcare plan must include behavioral health care, substance abuse, and mental health coverage on par with that of the plan’s physical health benefits.

Rehabilitative and habilitative services and devices. Your plan likely already covers rehabilitation therapies like pain relief or learning to walk again, and cover equipment like wheelchairs. However, now habilitative services must also be covered, which are therapies that help with long-term disabilities like Parkinson’s disease.

Preventive and wellness services. These services include things like vaccinations, counseling and screenings that help to prevent more serious illnesses.

Pediatric services (including oral and vision care). Under EHB, now all children under the age of 19 can get dental and vision services, including one pair of glasses every year.

It’s important for employees to know what benefits they receive. Savvy employers use Employee Compensation Reports, like those from, to highlight the total compensation an employee receives. After all, you can’t appreciate what you are getting if it’s not clearly spelled out. No one knows what changes the new administration will make, but such changes take time, so the aforementioned may be valid for a while to come.


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Category: Employee Benefits, Health Care Reform

Keys to an Effective Employee Compensation and Benefit Plan

In order to attract new employees and retain your best people, it works to have a competitive Employee Compensation and Benefit plan in place. Employees are looking for more than just the financial reward of a salary; to avoid losing excellent workers to your competitors, you need to consider offering them additional benefits. A compensation and benefits program is an ideal way to meet your staff’s wants and needs while a total compensation statement makes them aware of all of the value of your contributions.

Total Compensation Statements

Demonstrate to your employees the total value of the benefits program through total compensation statements. These provide information about the complete pay package an employee receives annually, including both direct and indirect compensation.

What to Include in a Compensation and Benefits Package

There are many types of benefits that any business should consider including in its benefits package:

Retirement Benefits

When choosing the appropriate retirement plan, you should take into account your company’s needs as well as your employees’ wishes.

  • SEP-IRA plans are ideal for small organizations as they are easy to establish and have no government filing requirements. Employers may make contributions of up to 25 percent of the total amount of their pay.
  • SIMPLE-IRA plans are suitable for companies with up to 100 employees. Some administration is required. Employers may match employee contributions or designate a percent of workers’ wages.
  • 401(k) plans are popular for their flexibility and higher limits for contributions; however, some require significant administration and annual filings.

Health Insurance

Although health insurance can be quite expensive, it is something most employees are looking for in a company. There are a wide variety of plan options available, meaning you should be able to find something that is both affordable and meets your employees’ demands. Also consider offering healthcare through the defined contribution model, which gives you greater flexibility about how much you contribute and allows each employee to choose a plan that meets his or her needs.

Vacation Days + Sick days + Personal Days = Personal Time Off (PTO)

Set out a clear policy that allows employees to take time off when they need it. One week vacation per year served, up to three weeks off, is often thought to be a standard – plus some amount of sick days paid and some considered personal time off (could be in half days) for doctor appointments, family care, etc. Sometimes a competitively engineered program here can be a deal-maker in recruitment. Be creative, but don’t lose site of what’s important for the business.

One great program that we used to provide in my prior life, and our employees absolutely loved it, was Friday afternoons off between Memorial Day and Labor Day. But everyone had to extend their other weekday work to make the 4 hours off good. In our case, we had billability minimum requirements, so they had to still make that minimum. And you couldn’t take Friday morning off or that cost you an entire day off.

Education Reimbursement

Help employees acquire further training in fields relevant to your business. You can offer either partial or full reimbursement for these classes. You would be amazed how important your best learners, who often can be your best employees, see this as an alluring benefit!

Much More

Take a look around your environment. What are you offering, or can you offer, to your employees that are, or would be, meaningful to them, which wouldn’t necessarily cost you more? Even things like free coffee and free parking have value. Or provide them a $50/month cell phone reimbursement, but for that they must be available by cell to your customers. Consider quantifying all of these in annual compensation statements.

Setting up a compensation program can be simple and inexpensive for your business. Whatever benefits you choose to include, ensure the focus is on providing employees with greater flexibility and value, and allows you to share the cost of fundamental benefits such as retirement plans and healthcare insurance.

Disclaimer: Any advice relating to finance, investments, companies, securities or any other financial matters whatsoever reflects the private opinion of the person giving this advice. It is not the advice of a financial or other expert. COMPackage, its employees and representatives take no responsibility for any consequences resulting from following such advice. Anyone seeking financial and/or investment advice is strongly advised to conduct their own research or consult a professional adviser. You are solely responsible for any decisions you make based on this information.

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Category: Health Care Reform, HR Communications, Reducing Compensation Costs, Reducing Employee Turnover, Total Compensation, Total Compensation Report Software

PPACA’s Effects on Insurance Agencies

The new health care reform act is affecting many different industries and businesses, from the amount of health care coverage provided for employees, to the way businesses report the costs associated in their employees’ compensation packages. With so many changes set to occur in the next several years, the industry that will perhaps be most impacted by the new legislature is the insurance agency industry.

PPACA's Effects on Insurance Agencies

So, the question is, when the Patient Protection and Affordable Care Act (PPACA) opens up buying pools to individuals, will insurance agencies lose out on this business and have to consolidate or downsize, or will they begin to offer different services? Will small business clients of insurance agencies give up their insurance plans and leave it to employees to manage their own health care plans, or will insurance agencies step up their efforts, in either marketing their product or providing new additional solutions within their industry space?

These are questions many insurance agencies are asking themselves. As insurance agencies rely on COMPackage Total Benefit Statements to prepare compensation reports for their clients, Joe Blattner, Founder and President of COMPackage, decided to ask some of his customers this very question. Here’s one very thoughtful response from one client worth sharing with you here:

Patrick Paule, Employee Benefits Advisor for OneSource Benefits Solutions and author of Benefits Guy Blog, how his company plans on altering its business in the face of healthcare reform. Below is Mr. Paule’s thoughtful and exemplary reply:

“PPACA is an evolving monstrosity filled with complexities beyond any health professional’s wildest dreams. Between now and 2014 we will undergo a change that is so big in scope that even those who wrote the bill can not comprehend.

It is very clear that the main focus of the legislation isn’t reforming our health care system, but rather reforming our health insurance delivery system. All of the changes that have been implemented to date have dealt with access to insurance products, enhancement of insurance benefits, and regulation of insurance markets.

Two major pieces of the legislation will have significant impact on compensation paid to agencies and independent agents. The Minimum Loss Ratio requirement is already in effect and has caused insurance companies to reduce commissions especially in the individual and small group markets. Under the requirements insurers must now spend 80% (85% for groups over 100 employees) of all premiums on medical claims. Anything below this number must be rebated to the clients. In the past our compensation had been viewed as a pass through. Now it is considered part of the administrative costs. The second piece is a work in progress and must be ready to operate on January 1, 2014. An online marketplace known as a Health Insurance Exchange must be created to allow people to purchase insurance. The key to this exchange is that the only way an individual can qualify for subsidized insurance is if they purchase through the exchange. The compensation that may be paid to agents for selling these products hasn’t been established, but based off of how the high risk pools are being run the amount is nominal.

Other items, such as the guaranteed issue of insurance regardless of medical conditions, in the legislation will make it easier for small employers to discontinue their plans and push employees into purchasing on their own. They will look to do this because they can avoid the added administrative expenses they will incur in order to keep a plan in compliance. Not to mention it will eliminate a costly expense.

Insurance agencies are going to have to adjust in order to survive. The way we are planning to survive is by leading the charge into a world where we can serve as a consultant. In our new role we will aid in human resource consulting, payroll services, third party administration, long term benefits planning, and compensation practices. We must provide more value and give clients tools such as COMPackage that enhance our position. As I tell my clients, as head coach you are important to the success of a team. As your point guard I will follow your lead and help create a program of championship caliber.”

How is your insurance agency thinking of handling the changes? What plans have you already set in place to combat the changes? Would love to hear your thoughts in the comments below!