What Employers Want From Their Broker

Insurance is changing. And with these changes, Employers are looking to evolve their company’s benefit plans to not only offer the best value available, but also views their employees holistically and sees the need for them to achieve a satisfying work-life harmony. Providing solution based advice for employers can be a valuable benefit should they seek guidance.

Most employers are doing just that. According to insurance giant MetLife’s most recent benefit trends study, at least 81% of employers surveyed say an insurance agent or a broker plays a crucial role when they are developing their benefit plans, and another 75% say a benefits consultant or consulting firm assisted them during their renewal period.

As a guide to benefits advisers, as well as a helpful checklist for employers, MetLife has created a list of 15 areas that employers most often seek advice about from their agents or brokers, along with the percentage that inquiries about those specific benefit areas increased from 2015 to 2016. The areas range from providing global benefit solutions to healthcare reform requirements. The list provides an interesting insight into the changing landscape of employee benefits.

15 Employee Benefit Plan Specifics Companies Most Commonly Seek Advice About

  1. Providing assistance with creating and maintaining an employee benefit handbook: 2015 52% – 2016 62%. Putting together an employee handbook that is comprehensive and informative, yet easy to understand, and keeping it updated as needed, can be a daunting task for any HR department, even those with benefits specialists on staff. An insurance agent or broker can provide valuable guidance about best-practices and effective solutions.
  2. Providing prompt, effective service and answering questions on time: 2015 60% – 2016 68%. Great customer service is one of the keys to a great employee benefit plan. There’s nothing more frustrating than having to spend time on the phone and getting passed around to different departments just to get answers to basic questions about benefits.
  3. Recommending new and innovative benefit solutions: 2015 57% – 2016 65%. This is an important area these days, with so many new solutions coming onto the market, especially for smaller companies with 100 employees or less, towards which a lot of new products are being marketed. New technologies are rapidly changing the way employee benefits are administered.
  4. Recommending cost savings alternatives: 2015 61% – 2016 68%. Everyone is interested in saving money obviously, and an experienced agent or broker can recommend the best values for both employers and employees.
  5. Help with legal, regulatory, and compliance issues: 2015 56% – 2016 64%. With the complexity of the myriad government regulations and new legislation, it doesn’t take much for a company to run afoul of the rules, and incur severe penalties and fines. Professional advice in this area is almost a must.
  6. Providing insights on employee needs and desires for benefits: 2015 53% – 2016 63%. An agent who is experienced in advising on benefit plans for companies in a wide range of industries will be able to help tailor a plan for different types of employees. For instance, companies that hire mostly younger, single people will have different needs than companies that employ mostly older, married individuals.
  7. Reducing the frequency and expense of claims: 2015 56% – 2016 65%. An obvious goal of any employer, there are many ways to achieve it, including employee awareness and educational programs.
  8. Recommending non-medical benefit solutions: 2015 48% – 2016 58%. These are usually preventative programs such as exercise, diet, nutritional, and other health and wellness programs, but also non-traditional medical solutions such chiropractic, massage and aromatherapy, acupuncture, and herbal treatments, among many others.
  9. Advising on employee physical wellbeing strategy: 2015 50% – 2016 60%. This parallels #8 above, but might be considered a more comprehensive, holistic approach encompassing many elements, both physical and mental, leading to total wellbeing.
  10. Advising on employee financial wellbeing strategies: 2015 50% – 2016 60%. Financial stability is actually an important part of a holistic health strategy, as the stress associated with money problems can lead to serious mental and physical illnesses, as well as family issues including divorce and domestic violence.
  11. Creating benefits statements: 2015 52% – 2016 62%. Employees need clear, easy to understand benefits statements on a regular basis throughout the year, at least quarterly, so that they know their exact status. A professional can inform an employer on best practices and technologies for generating these important reports.
  12. Advising on healthcare reform requirements: 2015 57% – 2016 64%. Healthcare reform is one of the biggest political issues of the day, and employers need to keep abreast of changes in legislation that might affect their benefit plans, and what they need to do to stay in compliance with the law.
  13. Providing benefits administration: 2015 54% – 2016 64%. Administering benefit plans can be a huge task for larger companies, an no easy chore for smaller ones either. New technologies and platforms are making the job easier for both, and employers need to be aware of their options.
  14. Recommending product bundling that will meet employee needs: 2015 55% – 2016 64%. There are many products on the market today that can make managing employee benefit plans much easier and more efficient. Finding the right combination for a particular company’s needs requires a professional who is thoroughly familiar with what’s available and the strengths and weaknesses of specific products.
  15. Providing insights regarding benefits trends: 2015 54% – 2016 62%. Like just about everything else, benefits follow trends, and a good, up-to-date plan will take the latest ones into account. An agent or broker will be aware of these and can advise an employer accordingly.

 

Terry and Debbie Denesha have been advising businesses both large and small on their insurance and employee benefits plans for over a decade. Contact us at 661-397-0041 to arrange a consultation and find out how they can help create a plan to meet your company’s unique requirements.

 

 

California Paid Family Leave

In 2002, California became the first state to adopt a paid family leave law, which provides
employees with up to 6 weeks of paid family leave (PFL) through the State Disability
Insurance (SDI) program. The following chart is a general overview of the law and its
requirements.
Who Pays for PFL? PFL is funded entirely by employee contributions to the SDI program, which
are made through payroll deductions.
Which Employers Must
Deduct SDI Contributions?
The PFL program applies to all California employers, regardless of size.
Which Employees Are
Eligible for PFL?
To be eligible for PFL, an employee generally must:
 Be unable to perform his or her regular or customary work for at least 8
days due to the need to provide care to a seriously ill family member or to
bond with a new child;
 Have paid into SDI in the past 5-18 months;
 Have not taken more than 6 weeks of PFL in the past 12 months; and
 Have a qualifying life event (depending on the life event, other eligibility
requirements may apply).
Which Life Events Qualify for
PFL?
An employee may file a claim for PFL through the SDI program for the
following reasons:
 To care for a seriously ill child, spouse, parent, parent-in-law, grandparent,
grandchild, sibling, or registered domestic partner; or
 To bond with a new child (including newly fostered and adopted children).
How Long Can an
Employee Be Out on PFL?
Up to 6 weeks within any 12-month period
Must an Employer Maintain
an Employee’s Health
Benefits While He or She is
Out on PFL?
Maintenance of health benefits is not required under PFL. However, it may
be required under the California Family Rights Act (CFRA) or the federal
Family and Medical Leave Act (FMLA).
Is an Employee Entitled to
His or Her Position Upon
Return from Leave?
Maintenance of job position is not required under PFL. However, it may be
required under the CFRA or the FMLA.
Are Employers Required to
Post or Provide Notices to
Employees Regarding PFL?
Yes. Employers are responsible for providing information on PFL to their
employees by:
o Posting DE 1857A; and
o Providing DE 2515 and DE 2511 to new hires and employees who notify
their employer that they need to take time off from work due to a nonwork-related
illness, injury, pregnancy, or childbirth.
Additional Information
For more information, employers may review the California Employment Development
Department’s website on PFL.
3
California Paid Family Leave
Provided by:
Denesha Insurance Agency
9711 Holland St
Bakersfield, CA 93309
Phone: 6613970041
www.denesha.net/HOME
Note: The information and materials herein are provided for general information purposes only and have been taken from sources believed to be reliable,
but there is no guarantee as to its accuracy. © 2017 HR 360, Inc. | Last Updated: July 24, 2017

DOL Sues Health Plan Alleging SPD and Wellness Program Failures

On August 16, 2017, the Department of Labor (“DOL”) filed a lawsuit against Macy’s Inc. Health and Welfare plan
(and its third party administrators) under ERISA Title I.
Specifically, the complaint alleges:
• The health plan and its fiduciaries failed to follow the written terms of the health plan’s Summary Plan Description
(SPD) when reimbursing out-of-network claims; and
• The wellness program that includes a tobacco surcharge violated the HIPAA wellness program rules.
The complaint alleges breach of fiduciary duty and asks, in part, for readjudication of all out-of-network claims
administered outside plan terms and for restitution of all the tobacco surcharges imposed.
Failure to Amend SPDs
According to the DOL’s complaint, Macy’s changed the reimbursement threshold for out-of-pocket claims from
“the lesser of the provider’s normal charge for a similar service or supply or between 75%-80% of usual and customary
charges” to the Medicare Allowable Rate when it is less than the provider’s normal charge for a similar service or supply.
Allegedly, the SPD was not amended to include language describing that the reimbursement for out-of-network claims
would be the Medicare Allowable Rate when less than provider’s normal charge. Additionally, the health plan participants
were not provided a copy of any summary of material modification reflecting the change in reimbursement.
DOL Sues Health Plan Alleging SPD and
Wellness Program Failures
Published: August 23, 2017
CA Insurance License 0F98081
Terry Denesha | Denesha Insurance Agency | (661) 201-0571 | tdenesha@earthlink.net
This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You
should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional. ©2017 Emerson Reid, LLC. All Rights Reserved.
DOL Sues Health Plan Alleging SPD and Wellness Program Failures Published: August 23, 2017 | Page 2
Wellness Program Failures
The DOL alleges the tobacco cessation wellness program
sponsored by Macy’s did not meet the requirements of
the wellness regulations to provide a nondiscriminatory
wellness program for the years 2011 to present day.
Briefly, the employer imposed a surcharge on an
employee’s premium for individuals who were smokers.
While such surcharges are permissible, there are specific
guidelines that must be followed to comply with HIPAA
wellness regulations.
Specifically, the DOL alleges the wellness rules were
violated because the program:
• Required covered members participating in a
tobacco cessation program to be tobacco free for
six consecutive months in order to avoid a premium
surcharge;
• Did not allow individuals who completed the
tobacco cessation program to avoid the entire
surcharge (i.e., retroactively correct the application
of a surcharge); and
• From 2011-2013, the materials describing the
wellness program failed to include a notice of
a reasonable alternative standard to avoid the
surcharge.
Why is this Important?
The recent filing by the DOL of this complaint signals
the agency has not backed away from pursuing ERISA
violations against employer-sponsored health plans.
It also highlights the importance for plans to keep
documents up-to-date to ensure administration is
consistent with the written terms of the plan. Finally,
it highlights the importance of following the rules when
it comes to wellness programs, specifically offering a
reasonable alternative to achieve the reward without
conditioning it on satisfying the original standard
(e.g., non smoker status) and making the full reward
available upon completion of the alternative.
It will be interesting to see Macy’s response and to follow
developments in this litigation and any actionable items
for plan sponsors. We will continue to keep you apprised.

Employer Penalty and 1094-C/1095-C Reporting

Applicable large employers (“ALEs”) may be resting easy, having had no notification from the IRS of 2015 or 2016
assessments under the Employer Shared Responsibility Provisions (the Employer Penalty) and having reasonably
expected that the Republican-led administration would limit or choose not to enforce this mandate.
However, the recent failure in the Senate to pass legislation to repeal and replace the Affordable Care Act (“ACA”) has left
many employers wondering whether:
• Penalties associated with the Employer Penalty will be enforced; and
• Forms 1094-C and 1095-C will be required going forward.
Recently, the IRS published draft versions of the 2017 Forms 1094-C (https://www.irs.gov/pub/irs-dft/f1094c–dft.pdf) and
1095-C (https://www.irs.gov/pub/irs-dft/f1095c–dft.pdf).
These versions are substantially similar to past Forms. Notably though, the Form 1094-C has reserved areas once used
to reflect available transition relief (Line 22 Certifications of Eligibility, Boxes “B” and “C”). Final versions of the Forms are
expected in the fall. Draft instructions for the 2017 Forms have not yet been released.
To date there has been no guidance issued by the IRS that eliminates penalties for Employer Penalty violations or fines
associated with failures to accurately complete, provide and/or file Forms 1094-C and 1095-C. While some employers
may think a Trump-led IRS will ignore these requirements, absent non-enforcement guidance from the agency, employers
should continue to comply.
Nineteenth Set of FAQs on the ACA Issued
Published: May 12, 2014 Update
Employer Penalty and 1094-C/1095-C Reporting
Published: August 22, 2017

CA Insurance License 0F98081

Terry Denesha | Denesha Insurance Agency | (661) 201-0571 | tdenesha@earthlink.net

This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You
should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional. ©2017 Emerson Reid, LLC. All Rights Reserved.
Update: Employer Penalty and 1094-C/1095-C Reporting Published: August 22, 2017 | Page 2

Why Comply? The Alternative may be
Expensive.
The potential penalties are not limited to the “A” and “B”
Employer Penalty assessments (which are substantial).
There are also significant penalties associated with
failures to accurately complete, provide and/or file Forms
1094-C and 1095-C:
• The penalty for failure to file a correct information
return is $260 for each return for which the failure
occurs, with the total penalty for a calendar year not
to exceed $3,193,000.
• The penalty for failure to provide a correct payee
statement is $260 for each statement for which the
failure occurs, with the total penalty for a calendar
year not to exceed $3,193,000.
• Special rules apply that increase the per-statement
and total penalties if there is intentional disregard
of the requirement to file the returns and furnish the
required statements.
An employer intentionally ignoring the 1094-C and 1095-
C requirement could be assessed penalties of more than
$520 per form, up to $6,386,000 per year.

Next Steps
At this point, ALEs should:
• Prepare for CY 2017 Form 1094-C and 1095-C
reporting. The Form 1095-C for CY 2017 will be

due January 31, 2018 to ACA FTEs and, for self-
insured group health plans, any covered non-ACA

FTEs. Filings to the IRS are expected electronically
by April 2, 2018 (and, for those eligible, on paper
by February 28, 2018). We will update you if any
extension of time is announced.
• Prepare to address notifications of a potential
penalty assessment from the IRS. Likely, any
notices associated with the 2015 calendar year
would be issued first, with 2016 notices to follow.
• Continue to identify ACA FTEs using the
appropriate measurement method (monthly or
look-back) and manage offers and affordability of
coverage. Understand any potential penalty liability
that exists in your organization.
• Await updates from the IRS, including issuance of
the final CY 2017 Forms and Instructions, likely in
September or October.

Five Most Common Open Enrollment Mistakes

A company’s open enrollment period can be a hectic time for management, HR staff, and employees alike. While a successful open enrollment period can increase employee health and satisfaction, an unsuccessful open enrollment period can result in compliance risk and reputational damage.

Learn the five most common open enrollment mistakes and how to avoid them below.

Mistake #1: Not Informing Employees of the Value of the Health Plan

Retention is greatly increased when employees understand the value of their employer-sponsored health plan. To aid this understanding, employers should consider providing their employees with:

  • A well-organized benefits summary which addresses the key features of the health plan; and
  • A total compensation statement which emphasizes that health plan benefits are a form of compensation received by the employee.

Mistake #2: Not Informing Employees of Health Plan Changes

If the employee has not experienced a job or family change, he or she may simply re-enroll in the health plan without giving it a second thought. However, health plan premiums, deductibles, and coverage networks may change each plan year, and the employer may be offering new benefits with unique requirements. As a result, it is important for the employer to inform employees of plan changes. Employers should consider using tools such as benefits summary documents, emails, in-person meetings, and social media posts to help ensure that employees fully understand their health benefits.

Mistake # 3: Not Responding to Employee Questions or Concerns

Some employees may have specific questions about the health plan which go unaddressed, while others may want a benefit that is not part of the current health plan. Employers should be mindful of these concerns and seek to better understand what employees want from their health plan. By using online surveys and other methods to obtain employee feedback during open enrollment, employers can satisfy concerned employees and learn how to enhance their health plan.

Mistake #4: Not Offering Coverage to Dependents

Under the Affordable Care Act (ACA), employers with 50 or more full-time employees (including full-time equivalent employees) may be liable for a penalty of over $3,000 per full-time employee if they do not offer coverage to the dependents of their full-time employees. In addition, the ACA requires all plans that offer dependent coverage to offer coverage to plan enrollees’ adult children until they reach age 26, even if the child is eligible for coverage through his or her own employer. As a result, it is very important for employers to offer dependent coverage and inform employeesof its availability.

Mistake #5: Not Fully Explaining any Tax-Favored Accounts Offered

To take the sting out of high plan deductibles and other out-of-pocket costs borne by employees, many employers have begun offering health savings accounts (HSAs), health flexible spending arrangements (health FSAs), and health reimbursement arrangements (HRAs) in conjunction with their health plans. However, the rules governing these tax-favored accounts can be complicated, and violations of their specific participation, contribution, and distribution requirements can lead to tax penalties. Employers should take the time to fully explain any tax-favored account they offer, and remember to emphasize that the employer’s establishment of and contribution to these accounts is yet another part of the employee’s total compensation.