Category Archives: Insurance

California Puts up a Fight Against Association Health Plans

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employer researching health insurance plans

California Ban

California is the first state to legislatively ban some of its residents from taking advantage of a Trump administration rule that expanded access to small business health plans. No associations seem to be the key to this legislature.

The state now bans sole proprietors from joining what’s known as cheap, short-term health insurance plans (association health plans). The plans were recently expanded under a Labor Department regulation that allows more small businesses, including self-employed individuals and independent contractors, to band together and buy-in on health plans as a large group. So far, they have yet to make inroads across the country.

The move by California will mean real estate agents, and others who operate as sole proprietors, won’t be able to join association health plans. The National Association of REALTORS is a major supporter of the DOL’s expansion of the plans.

California is one of a dozen states that went to court to sue the Labor Department, though the case is still pending.

For those who have been hoping to form association health plans, this CA law comes as a blow. For employers, it means more of the same and no new options for care or insurance.

History of Fraud

California’s law comes in response to years of fraud and insolvency it experienced with similar plans known as multiple employer welfare arrangements that were around before enactment of the ACA. Between 2000 and 2002, those plans left 200,000 people throughout the U.S. without coverage and racked up $252 million in unpaid bills, according to a 2004 Government Accountability Office report.

The move to ban said plans are part of a broad effort, at the state level, to dull actions by the Trump administration to untangle the federal health care law after President Donald Trump and Congress failed last year to repeal and replace Obamacare.

Finding dominance in an evolving industry is never easy. What should you invest in to make sure you keep up to date with the competition but also find a competitive edge?

CorpStrat can provide an outside perspective to help companies assess their internal operations in Insurance, Employee Benefits, HR, and Payroll.

Contact us and we’ll be sure to get you on the right track and keep you up-to-date.

Get Ready for Year End Open Enrollment Season

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Young employee listening to his manager explain open enrollment options

This is the time of the year where companies of all sizes struggle to get quality employee engagement during Open Enrollment period.

Even with technology offering automated benefits management tools, the challenges still persist when it comes to making it easier for employees to sign up for the benefits that are the best for them and/or their families.

To challenge this disconnect, employers and their Human Resources administrators can follow these tips in creating more employee engagement for Open Enrollment season.

Keep the initial communications on Open Enrollment simple

The very first message regarding Open Enrollment should be short and simple. This is not the time to throw everything at them all at once with boatloads of information on the varying offerings Open Enrollment provides.

Provide them with a clear message of the importance of the upcoming Open Enrollment process, varying deadlines, contact information and any upcoming meetings you have planned.

Keep the language simple and clear on the documentation of your benefits packages.

When describing what each plan is and what is covered, make sure to use bullet points in highlighting key details and while comparing and contrasting the available offerings.

Use your means of communication methods

Be mindful of your employee’s different thoughts, feelings, problems and more regarding their offerings. Communicate the differences to them and work with them to recognize and use their preferred means of communication.

While some people prefer their communication method delivered via email, you may have others who need a hard copy brochure to get your message across. They even might need something tangible they can hold in their hands like a poster or flier to bring home to their families to discuss.

Whichever way your employees prefer to receive their Open Enrollment information, make sure to change up the look-and-feel. Try to keep it fresh and engaging with design and layout changes, even as the information stays pretty much the same throughout.

Create engaging messages around the individual and/or their families

Organizations who are successful with higher employee engagement rates during Open Enrollment do a great job of cutting out the noise by highlighting what’s the most important information for an individual and/or their families in the offerings they are choosing from.

For example, employers may dive deep into what the actual costs are for employees on high deductible health plans, or, they might highlight a new voluntary benefit—added to their offering package. Addressing key components that make the benefits so attractive to add with their traditional healthcare selections.

Promoting voluntary benefits to create employee engagement

In 2016, the cost of care hit over $10,000 per person. With more-and-more employers turning to High-Deductible Healthcare plans to help offset the rising costs of healthcare and to keep premiums lower, we are seeing more people struggle to find the coverage they need as a result.

Voluntary Benefits are extremely important for employers to offer because it gives their employees the power to prepare for the worst when it comes to their healthcare. Today, a traditional healthcare plan might not be enough to support a person or their family financially in the event they get really sick.

Above all, it’s important to stay organized, keep a tight schedule and when in doubt, remember the challenge is to communicate 10x better and more frequently to get your message past all the noise.

DTwo strands of DNA exposed by the Human Genome Project

DNA Genetic Testing and Insurance: Can They Co-Exist?

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Two strands of DNA exposed by the Human Genome Project

Genomics is transforming medicine, and slowly but inevitably will be reshaping insurance. It was only a matter of time…

The secrets once buried deep, hidden in the paired strands of DNA every person carries. The mysteries of the genome (an individual’s complete set of DNA) remained veiled when the Human Genome Project began, which was an international scientific research project with the goal of determining the sequence of nucleotides that made up the human DNA. Then in 2003, the international research project completed its mission, sequencing the genome.

This rapidly advancing science in forcing the insurance industry to navigate a multitude of actuarial, ethical, privacy and even reputational concerns.

The fundamental business models for life, disability, critical illness, and long-term care insurers could be at stake, given the growing existential threat of information as more people buy insurance, without disclosing their predisposition to certain diseases.

Genomics just may become the greatest disruptor to the insurance industry, the equivalent to global warming, or cybersecurity risks in the property/casualty space.

The sequencing of the human genome, DNA genetic testing (such as 23andMe), and genome editing are changing the way of how we are detecting diseases early on, treatment and even prevention through precision medicine. However, genetic testing companies are in line to influence everything from how insurance is underwritten and priced to how products are designed.

The Rise of DNA Testing

testing the blueprint for every human's DNA with 23andMeTake, 23andMe for example, which offers risk reports for multiple diseases, providing the public with intimate genetic information. Those who test positive to a serious predisposed illness could buy more coverage than they need and at an unpriced rate. And, those who test negative, could delay purchasing insurance coverage, or allow their policies to expire.

According to Nabholz, Swiss Re’s head of research and development, life and health “more than 12 million people have taken direct-­to-consumer DNA tests, with almost 8 million of those tests occurring since 2016.”

“People who get a genetic test back that is unfavorable, of course, they’re going to seek to protect themselves and their family,” Nabholz goes on to say. “That’s a natural reaction.”

But, insurers will have to move cautiously. The science is relatively immature. The regulatory landscape remains uncertain with at least one state proposing a ban on using genetic information to underwrite life policies.

And then there is the matter of privacy, data ownership, and media coverage concern that would follow the rejection of applicants due to gene mutations or variants.  The questions that are unanswered are as frequent as the questions yet asked.

One thing is certain: genetic testing will open doors to longevity, healthcare, prevention, and screening, and will ultimately lead to us leading healthier and longer lives.

The Uncertainty of Googling HR Issues

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hr professional typing on a laptop computer in an office building

Why Googling HR Issues Is A Bad Idea:

In a recent conversation with a client, we spoke of employees having access to the internet. We both agreed that this can be a blessing or a curse depending on the day of the week in the HR world. Prior to working with CorpStart HR, this client said their company handled information on employment laws and other topics one of two ways:

  •    Googling it themselves, or
  •    Calling an attorney.

Calling their attorney was often a good experience. As a trusted advisor with extensive knowledge of their business, they knew they could trust the information being provided. At times this became cost prohibitive so they would Google the issue. This resulted in a mixed bag of opinions with a sprinkle of the law depending on the subject.

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ERISA Compliance – What Every Employer Needs to Know About Plan Documents

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Imagine an agent from the Department of Labor walks in your office and asks for your ERISA documents. For 90% of employers, the answer would be “what is that?”. Yet for every employer, maintaining ERISA documents is essential – and here is why:

ERISA is a federal law that sets minimum standards for employee benefit plans maintained by private-sector employers.

ERISA includes requirements for both retirement plans (for example, 401(k) plans) and welfare benefit plans (for example, group health plans). ERISA has been amended many times over the years, expanding the protections available to welfare benefit plan participants and beneficiaries.

The Department of Labor (DOL), through its Employee Benefits Security Administration (EBSA), enforces most of ERISA’s provisions. Violating ERISA can have serious and costly consequences for employers that sponsor welfare benefit plans, either through DOL enforcement actions and penalty assessments or through participant lawsuits.

All welfare plans are subject to ERISA (medical, dental, vision, life, disability, certain employee assistance and wellness programs, for example) and are required to have a plan document that is memorialized in writing. ERISA further required that the plan document contain specific, express provisions. This means if you deliver any type of benefit program to employees, it’s likely you need a current ERISA document.

How does the DOL enforce ERISA?

The DOL has broad authority to investigate or audit an employee benefit plan’s compliance with the ERISA. The DOL’s EBSA division handles audits of employee benefit plans. To perform these audits, EBSA employs over 400 investigators working out of field offices, many of whom are lawyers or CPAs or have advanced degrees in business or finance. The DOL has authority to assess civil penalties for many different types of ERISA violations.

How can an employer minimize its risk of being audited by the DOL?

As a practical matter, an employer has little control over whether it will be audited by the DOL. However, an employer can take the following steps to help minimize its exposure to a DOL audit:

  • Respond to participants’ benefit questions and requests for information on a timely basis;
  • File Form 5500 on time and make sure it is complete and accurate;
  • Create and distribute participant notices required by law (for example, the summary of benefits and coverage) by the deadline; and
  • Make timely updates to plan documents and summary plan descriptions (SPDs) to reflect legal and design changes.

How can employers be prepared for a DOL audit?

The best way to prepare for a DOL audit is to remain in compliance with the law and establish a recordkeeping system for maintaining all of the important documents relating to your employee benefit plans. Retaining complete and accurate records will help move along the audit process and provide an accurate picture of an employer’s benefit package. As a general rule, these records should be retained for seven years.

Because the DOL has increased the frequency of health plan audits, employers should consider reviewing their health plans for compliance now, before they are selected for audit. It is important for employers to get their health plans’ paperwork in order as part of this process. Don’t be fooled into thinking you are “too small” for ERISA. Employers of every size who provide any type of Employer Sponsored Benefit Plan are subject to ERISA. Ask your broker if you need documents and get them done!

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