Author Archives: CorpStrat News

Rising Health Care Costs – Is There Hope for Change?

Rising Healthcare costs

Company-provided health insurance is getting more expensive. As the most common form of health coverage in the United States, the cost of employee-sponsored coverage is expected to rise another 5% in 2020.

What does this entail? Well, when employees go in for a check-up, they may learn that their doctors will no longer be covered. Or they may notice higher deductibles being charged on their payroll. Either way, rising costs will affect millions of employees who rely on their company’s health insurance policy. In addition, employers will not be immune to these rising costs either—insurance bills they need to pay off will continue to rise, probably higher than wages and inflation.

While in search of a better solution, employers may have heard about the “Medicare for All” plan, a proposal by Democratic candidates to reform the system. But how feasible is this proposal?

The biggest obstacle of this proposal is the lack of a concrete solution—how do they plan to make the health insurance delivery system “more efficient”? Candidates are throwing around vague plans to “expand access to health care” without actually addressing how the care is going to being delivered.

One possible solution to the delivery system comes in the form of telemedicine. Employers have recently shown interest in covering telemedicine to improve access to care. Telemedicine has been a growing field in the health care industry, as seen through the announcement of Amazon Care. Through a virtual clinic, telemedicine makes healthcare more accessible and cost-effective. Physicians and patients can share information and receive a diagnosis without having to wait for an appointment and in the comfort of their own home. But some employees may be slow to adopt this technology since they are not used to accessing heath care this way.

Health care is a complex topic, but one fact is simple: employers want their employees to have access to the most efficient, high quality and affordable health care possible. Some companies have been bringing in more services to help employees navigate their benefits, navigate the delivery system, and understand their treatment options. However, these companies may want to cut down on these costs if they don’t want to charge higher deductibles, especially with the rising costs of health benefits in 2020.

Want to understand health care and what the New Year means for your company’s health insurance? Feel free to contact us at CorpStrat.

Another Reason Health Insurance Premiums Continue to Rise – The 2020 Health Insurer Fee/Tax

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IRS Rising Costs Health Care

Rising health insurance premiums are no joking matter. Whether you are a business or individual, no one is immune to the rising costs and increasing exposures of health insurance.

Who and what’s to blame? Technology? Physician costs? Hospitals? Laboratories? Prescription costs? Consumer behavior? Fast Food? The economy? Multiple factors can be attributed to the rising premiums within the health care system, which represents 17% of the GNP. The health care industry is a large chunk of the economy, and the current political climate hasn’t made any progress in combating rising costs.

To understand what is causing this change, we must look behind the curtain.

Affordable Care Act

Since the inception of the Affordable Care Act (ACA) in 2010, also known as ObamaCare, the costs of health insurance have nearly doubled.

To help fund the creation and ongoing operation of the federal and state marketplace exchanges, the ACA requires that all insurers offering fully insured health insurance programs pay an annual Insurer Tax. Although the tax was initially $8 billion since its first year in 2014, the amount has increased each year. Now, in the upcoming 2020, IRS expecting to collect a little over $15 billion dollars cumulatively from all carriers.

When the ACA was first introduced, former President Barack Obama assured everyone that the ACA would lower costs: “If you like the plan you have, you can keep it. If you like the doctor you have, you can keep your doctor, too. The only change you’ll see are falling costs as our reforms take hold.”

However, in today’s present day, this has proven to be a misconception. In 2016, Bill Clinton summarized ACA’s impact perfectly: “So, you’ve got this crazy system where, all of a sudden, 25 million more people have health care and then the people who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half. It’s the craziest thing in the world.”

How It Will Impact Plan Sponsors

The health insurance tax will impact all insurers offering medical, dental and vision insurance (called “covered entities”). If the IRS implements ACA’s Insurer Tax as planned, the fee is expected to add an estimated 3-4% on medical plan renewals.

No relief is in sight for counteracting these increasing premiums. Employers must rely on design strategies, contribution formulas, and other ways to bring vibrancy to their plans by consulting with their insurance brokers.

Contact CorpStrat to learn about how we can help you navigate this upcoming change in the health care industry.

Is Your Life Insurance Policy a Ticking Time Bomb?

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Life Insurance Ticking Time Bomb

Imagine finding out that the life insurance policy you’ve been paying for is destined to explode—or, even worse, not be in effect when you need it the most?

Over the past couple of years, thousands of universal life policyholders have been informed that their insurers are using the fine print of their policies to increase their long static “premiums”. Now, we are already seeing major insurance carriers announce increases in the “raw costs” of certain policies. Some carriers are even limiting amounts of insurance they are willing to write.

This is the result of the low interest climate, which has significantly impacted the life insurance industry. Many life insurance policies have been adversely affected due to substantial changes such as:

Significant reductions in interest/dividend crediting resulting in lower values;
Disruption in accumulation goals or income projected from policy values;
Higher premiums required to assure coverage to specified year/age;
And the forceful lapsing of a policy if corrective action is not taken.

We, at CorpStrat, have developed a program called The Life Insurance Audit™, designed to ensure that every client has the best possible life insurance solution available in the market today. Through the audit, you will receive an objective evaluation of you or your client’s current policy, including comparisons to today’s marketplace and pricing.

The Life Insurance Audit™ provides a consultative review and results in an analysis that can be delivered by you to your client. In light of recent changes, every cash-value or interest/dividend sensitive insurance policy must be evaluated.

Interested in learning more? Check out our methodology here at: https://www.corpstrat.com/life-insurance/.

What’s More Important – Cash or Benefits? You May Be Surprised…

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Cash or Benefits Important

No matter the size of your business, employee benefits are a crucial factor in the job market. A QuickBook Payroll study shows that 87% of employees of small businesses would rather get additional benefits instead of a pay raise. If your benefits package isn’t up to par, employees will feel under-appreciated, leading to low morale and, possibly, desertion.

Benefits help employees feel supported and understood in their workplace. Fun perks like free food and drinks, remote work options or flexible work schedules go a long way in keeping morale high and employees satisfied. However, your company doesn’t need to offer all these “fun” benefits. 38% of employees just want an extra week of paid vacation.

In the current job market, 39% of respondents say they are not satisfied with their current benefits offering. Not only did 35% of people looking for a new job in the past year place a heavy focus on better benefits, but also 41% said they wouldn’t want to work for a company that offered no benefits such as health insurance, paid vacation and sick days, retirement plans or dental insurance.

The study also reported the following:

93% get at least one benefit from their small employer, but what they get and how much varies greatly.
While 57% get paid time off for vacations, only 48% get paid sick leave and 37% get paid personal time.

Employees highly value a good benefits package. 26% of employees said they would recommend their company to others only if they were offered the right benefits package. Another 21 percent said a great benefits package is what makes them love their job. If you are a small business considering whether or which benefits to offer, it is important to remember that benefits are the key to retaining and attracting productive employees.

Reach out to CorpStrat to learn how we design and manage employee benefits at competitive rates so your company can attract, reward, and retain your employees.

4 Best Labor Law Compliance Practices Your Business Should Adopt

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Best Practices Labor Law Compliance

Last time, we explained the importance behind labor law compliance. To recap, employers have a legal responsibility to keep track of any labor law changes and update their posters accordingly. That being said, we understand that poster compliance can be tricky. To help you navigate poster compliance, here are four best practices you can adopt.

1. Stay up to date on labor law changes

Failure to post up-to-date labor law notices can result in hefty fines up to $33,486. Of course, to receive this maximum fine, your company would need to continually or knowingly be in violation of labor law poster compliance. But fines and penalties vary by agency and are determined on a case-by-case basis. So, we advise to make it a habit to research and stay to up to date on labor law changes.

2. Post compliance posters in Spanish, and in any other languages

The requirement for posters in Spanish vary depending on the percentage of workers as well as language fluency and literacy. Additionally, government agencies don’t always provide specifics about language requirements. Regardless, it is an employer’s responsibility to inform all employees of their rights under employment law, no matter what language. So, you should ensure best practice by posting notices in English and Spanish, or in any other dominant language, if you have a large non-English speaking workforce.

3. Display posters in a common area

Have you ever heard of the saying location, location, location? Location is important and poster location is no exception. If posters are not displayed in accordance with labor law poster guidelines, you can be penalized. But there is no need to freak out; all you need to follow are two simple rules:

Must be displayed in a common area frequently used by employees.
Positioned at eye-level with an unobstructed view.

We personally recommend displaying the posters in the break room, kitchen, or near a time clock for easy access.

4. Purchase employment law posters

With labor law posting requirements changing frequently, we understand that staying up to date is difficult and time-consuming. Since 2013, there has been an average of over 100 posting updates per year. Most businesses do not have the patience, resources or know-how to be compliant successfully each time.

To avoid hassle and save precious time, we advise companies to purchase employment law posters instead of obtaining them from the government. When you purchase posters, they come laminated and ready to be displayed. In addition, your posters will always be correct. There is no need to spend time researching, downloading, and laminating the correct posters when you can streamline the process by ordering from a trusted poster compliance provider, like CorpStrat.

As part of our comprehensive labor law solution, CorpStrat offers a pay-as-you-go labor law poster update service. You don’t have to waste energy looking for the correct posters when you can easily receive posters with our e-update service. So how does it work?

Receive your all-in-one state and federal labor law poster.
When a change occurs, we alert you with a call, and email you the updated posting.
Print the updated poster.
Display your updated posting in your favorite spot.
Receive an updated all-in-one state on the anniversary of your subscription.

With these four best practices, you are guaranteed to have a worry-free compliance.

Interested in our pay-as-you-go labor law poster update service? Contact CorpStrat to learn more our comprehensive labor law compliance solution and how you can sign up.