Understanding Voluntary Benefits

You know the importance of having health care coverage and a 401(k), but are you taking advantage of all the benefits your organization offers? Voluntary benefits are additional benefit options offered through the company. Unlike traditional benefits like health coverage, employees are responsible for paying most or all of the cost of these voluntary options.

What’s the Advantage? 

You may wonder–if you’re responsible to pay, then why elect any voluntary benefits? There are several advantages.

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FMLA Administration Outsourcing

The Family and Medical Leave Act (FMLA) is a federal law that allows eligible employees to take unpaid leave for a variety of personal circumstances. Due to the numerous regulations and complexities of the FMLA, administering FMLA leave can be a daunting task for many HR departments. In an effort to make FMLA administration more accurate and efficient, many employers have opted to outsource their leave programs to outside vendors.

Why Do Companies Outsource FMLA Administration? 

Federal vs. New York family and medical leave laws – Part 4

The federal Family and Medical Leave Act provides eligible employees of covered employers with unpaid, job-protected leave for specified family and medical reasons.

In addition to the federal FMLA, New York has laws regarding pregnancy leave, adoptive parents leave, blood donation leave, bone marrow donation leave, military spouse leave and paid family leave (effective Jan. 1, 2018).

The comparison chart below concludes our review of federal vs. New York family and medical leave laws. This chart reviews leave requests, certification requirements, as well as other laws.

Federal vs. New York family and medical leave laws – Part 3

The federal Family and Medical Leave Act provides eligible employees of covered employers with unpaid, job-protected leave for specified family and medical reasons.

In addition to the federal FMLA, New York has laws regarding pregnancy leave, adoptive parents leave, blood donation leave, bone marrow donation leave, military spouse leave and paid family leave (effective Jan. 1, 2018).

The comparison chart below continues our review of federal vs. New York family and medical leave laws regarding an intermittent leave, reinstatement rights and the maintenance of health benefits during leave.

Federal vs. New York family and medical leave laws – Part 2

The federal Family and Medical Leave Act provides eligible employees of covered employers with unpaid, job-protected leave for specified family and medical reasons.

In addition to the federal FMLA, New York has laws regarding pregnancy leave, adoptive parents leave, blood donation leave, bone marrow donation leave, military spouse leave and paid family leave (effective Jan. 1, 2018).

The comparison chart below continues our review of federal vs. New York family and medical leave laws regarding the type of leave and criteria for a serious health condition/serious injury or illness.

Federal vs. New York family and medical leave laws – Part 1

The federal Family and Medical Leave Act provides eligible employees of covered employers with unpaid, job-protected leave for specified family and medical reasons. For example, under the FMLA, eligible employees may take leave for their own serious health conditions, for the serious health conditions of family members, to bond with newborns or newly adopted children or for certain military family reasons.

In addition to providing eligible employees with an entitlement to leave, the FMLA requires that employers maintain employees’ health benefits during leave and restore employees to their same or equivalent job positions after leave ends. The FMLA also sets requirements for notices, by both the employee and the employer, and provides employers with the right to require certification of the need for FMLA leave in certain circumstances.

In addition to the federal FMLA, New York has laws regarding pregnancy leave, adoptive parents leave, blood donation leave, bone marrow donation leave, military spouse leave and paid family leave (effective Jan. 1, 2018). Review the comparison chart below to learn more regarding the types of employers covered, employees eligible and leave amount.

2019 ACA compliance overview — Employer shared responsibility rules

The Affordable Care Act has made significant changes to group health plans since it was enacted in 2010. Many of these key reforms became effective in 2014 and 2015, including health plan design changes, increased wellness program incentives and employer shared responsibility penalties.

Changes to some ACA requirements, such as increased dollar limits, take effect in 2019 for employers sponsoring group health plans. To prepare for 2019, employers should review upcoming requirements and develop a compliance strategy.

This article provides an overview of the employer shared responsibility rules.

2019 ACA compliance overview — SBC and HIPAA

The Affordable Care Act has made significant changes to group health plans since it was enacted in 2010. Many of these key reforms became effective in 2014 and 2015, including health plan design changes, increased wellness program incentives and employer shared responsibility penalties.

Changes to some ACA requirements, such as increased dollar limits, take effect in 2019 for employers sponsoring group health plans. To prepare for 2019, employers should review upcoming requirements and develop a compliance strategy.

This article provides an overview of requirements for Summary of Benefits and Coverage and Health Insurance Portability and Accountability Act certification documents.

2019 ACA compliance overview — Cost-sharing limits

The Affordable Care Act has made significant changes to group health plans since it was enacted in 2010. Many of these key reforms became effective in 2014 and 2015, including health plan design changes, increased wellness program incentives and employer shared responsibility penalties.

Changes to some ACA requirements, such as increased dollar limits, take effect in 2019 for employers sponsoring group health plans. To prepare for 2019, employers should review upcoming requirements and develop a compliance strategy.

This article provides an overview of cost-sharing limits applicable to non-grandfathered plans.

2019 ACA compliance overview — Plan design changes

The Affordable Care Act has made significant changes to group health plans since it was enacted in 2010. Many of these key reforms became effective in 2014 and 2015, including health plan design changes, increased wellness program incentives and employer shared responsibility penalties.

Changes to some ACA requirements, such as increased dollar limits, take effect in 2019 for employers sponsoring group health plans. To prepare for 2019, employers should review upcoming requirements and develop a compliance strategy.

This article provides an overview of plan design changes for grandfathered plans and an update on FSA contributions.

Plan Health: Here’s why you’re here

To assess plan health, comprehensive Annual Plan Reviews continue to be of value, and plan providers are developing more concise versions of the report — offered on paper or online. According to the Lincoln Financial Group study, You are here: Understanding financial wellness, retirement readiness and plan health, plan sponsors use plan health data to get quick, timely updates on employee retirement preparedness levels and to help meet their goals by leveraging data to make informed plan design decisions.

Next steps for plan sponsors:

1. Review year-over-year trends to identify patterns and opportunities.
2. Compare your plan by industry, asset size, and number of participants to set competitive goals.
3. Work with your provider to optimize participant data to help limit assumptions and provide more accurate reporting.
4. Continue to monitor traditional success measures — balances, contribution rates and diversification — while adding new metrics, such as income replacement rates.
5. Work with your plan provider, advisor or consultant to prioritize the aspects of your plan health data that are most valuable to you; reporting will be more valuable with your input.

To learn more about this research or to begin developing your organization’s action plan toward optimal plan health, please get in touch by calling (855) 882-9177 or e-mail us at sbs@hanys.org.

Retirement Readiness: Where do you need to be?

In the Lincoln Financial Group study, You are here: Understanding financial wellness, retirement readiness and plan health, plan providers agree that retirement readiness is unique to each individual. A single, accurate income replacement rate does not completely define retirement readiness. Yet, replacement rate is the one measure that seems to be gaining momentum among plan sponsors. Whether plan participants need between 70% and 85% of pre-retirement income, or whether they plan to retire at age 62, 65, 67 or older, plan sponsors are unanimous in the belief that translating assets to potential income is critical.

Take action on retirement readiness

1. Work with your recordkeeper, plan advisors and consultants to generate greater employee engagement, and seek an approach that makes it easy for participants to take action.
2. Ask for employee communications to demonstrate the benefits and impacts of measured, realistic, small steps and to promote content that’s neither simplistic nor condescending.
3. Encourage employee interaction with retirement planning tools and automated features.
4. Ask participants to provide key data during open enrollment, when they’re already thinking about their benefits.
5. Use your plan health reporting to monitor the plan design choices impacting retirement readiness and to identify employee groups who may need more help to get on track to meet their retirement savings goals.

To learn more about this research or to begin developing your organization’s action plan toward optimal plan health, please get in touch by calling (855) 882-9177 or e-mail us at sbs@hanys.org.

Financial Wellness: You could be someplace better

In the Lincoln Financial Group study, You are here: Understanding financial wellness, retirement readiness and plan health, plan sponsors reported that employees need financial education, and they believe instituting a financial wellness program leads to improved job performance and increased employee loyalty. The industry defines “financial wellness” as a program of financial topics delivered through multiple channels to help people minimize their financial challenges. Financial wellness is aspirational, and the path to wellness for participants involves setting reasonable goals and taking positive steps forward.

As financial wellness programs become more prevalent and significant over the next few years, we anticipate closer alignment with health and wellness programs. New service providers and program opportunities are rapidly emerging.

Best practice considerations

1. Talk with your retirement plan provider, advisor or consultant about available financial wellness resources.
2. Survey participants and build programs based on topics of highest interest, deepest need and greatest likelihood of success.
3. When implementing a new program, start small and gradually roll out new elements to the program.
4. Connect financial wellness delivery to health program delivery to make the most of employee time and attention spans.
5. Offer programs to all employees, not just plan participants. Include one-on-one and group meetings and webcasts during, before and after work, at lunchtime, and over weekends to accommodate employees. Encourage employees to bring spouses and partners, and make meetings mandatory for high-impact topics. 

To learn more about this research or to begin developing your organization’s action plan toward optimal plan health, please get in touch by calling (855) 882-9177 or e-mail us at sbs@hanys.org.

Understanding financial wellness, retirement readiness and plan health

In the study, You are here: Understanding financial wellness, retirement readiness and plan health, the Lincoln Financial Group explored three emerging trends in retirement plan administration.

1. Financial wellness programs. Similar to health wellness programs, financial wellness programs can be adopted by a plan sponsor to improve an individual’s financial health so he or she can accomplish specific financial goals, such as saving amounts sufficient for retirement. In many cases, low participation and savings rates in retirement plans are the results of an inability to save due to financial challenges, such as poor budgeting and credit card debt.

Penalties Increased for Section 6055 and Section 6056 Reporting Violations

The Affordable Care Act (ACA) created new reporting requirements under Internal Revenue Code (Code) Section 6055 and 6056. These new reporting rules require certain employers to report information to the Internal Revenue Service (IRS) on the health coverage offered during the year.

Quick Facts:

• Signed into law on June 29, 2015, the Trade Preferences Extension Act of 2015 increases the penalties for reporting entities that fail to comply with Section 6055 or 6056 reporting.
• The increased penalties take effect for returns and statements filed in 2016.
• Short-term relief from penalties is available in certain limited circumstances.

Read the full article for more information on Section 6055 and Section 6056 reporting violations. Should you have questions, please contact Strategic Benefit Services by calling (855) 882-9177 or email us at sbs@hanys.org.

IRS Issues Notice 2015-52 on Cadillac Tax Implementation

For taxable years beginning in 2018, the Affordable Care Act (ACA) imposes a 40 percent excise tax on high-cost group health coverage. This tax, also known as the “Cadillac tax,” is intended to encourage companies to choose lower-cost health plans for their employees.

On July 30, 2015, the Internal Revenue Service (IRS) issued Notice 2015-52 to continue the process of developing guidance to implement the Cadillac tax. This notice supplements Notice 2015-16, issued on Feb. 23, 2015.

2016 Healthcare Reform Compliance Checklist

The Affordable Care Act (ACA) has made a number of significant changes to group health plans since the law was enacted over four years ago. Many of these key reforms became effective in 2014 and 2015, including health plan design changes, increased wellness program incentives and the employer shared responsibility penalties.

Additional reforms take effect in 2016 for employers sponsoring group health plans. To prepare for 2016, employers should review upcoming requirements and develop a compliance strategy.

This Legislative Brief provides a health care reform compliance checklist for 2016.

If you have questions about this checklist or changes that were required in previous years, please contact Strategic Benefit Services for assistance by calling (855) 882-9177 or email us at sbs@hanys.org.

Investment Policy Statements

An investment policy statement (IPS) defines the processes that a company has adopted to make investment-related decisions with respect to the assets of a ERISA 403(b) and 401(k) plan. The IPS identifies the investment goals and objectives of the plan, establishes how decisions will be made regarding the selection of investments and specifies the procedures for measuring investment performance. While the law does not require that a plan adopt an IPS, it may be the single most important task that a fiduciary performs for the following reasons:

404(c) Compliance Checklist

By complying with ERISA section 404(c), sponsors and other fiduciaries of retirement plans with participant-directed investments may shield themselves from liability for poor investment decisions made by plan participants. If a retirement plan meets the requirements of ERISA section 404(c), no plan fiduciary will be liable for any loss that is the direct and necessary result of a participant’s exercise of control over the investment of his or her plan account.

Qualified Default Investment Alternatives

Approximately one-third of eligible workers do not participate in their employer-sponsored defined contribution plans, such as ERISA 403(b) and 401(k) plans. Research suggests that almost all of these workers would choose to remain participants if they were automatically enrolled. The increased savings would significantly improve their retirement security and may result in improved workplace satisfaction.