Insurance Newsletter

Health Savings Accounts (HSA) are designed to reduce insurance costs for both employers and employees.  If you are considering offering an HSA as part of your employee benefits plan, here are some additional benefits you will realize.

Lower insurance costs.  Switching to an HSA-qualified high-deductible health plan should reduce your insurance premiums.  In addition, rather than paying 100 percent of insurance dollars towards premiums, an HSA allows you to distribute some of these funds directly to your employees by making contributions to their accounts.

Offer a more diverse benefits package.  Including HSAs in your benefits plan can enhance your benefits package and aid in attracting and retaining key employees.

Reduce taxes.  Contributions you make to your employees’ HSAs are made with pre-tax dollars.*

Minimize administrative costs.  Employees own and administer their own HSAs, so there are minimal administrative and compliance issues for employers. 

Share the cost of health care benefits with your employees.  An HSA gives your employees the ability to build a savings account with tax benefits and motivates them to take a vested interest in their health care choices and expenditures — a win-win for all parties.

*States that do not provide state tax exemptions for HSA deductions are Alabama, California, New Jersey, and Pennsylvania.



An increasing number of employers are incorporating health savings accounts (HSA) into their group benefits plan.  The following is information you can share with your employees to help them understand the benefits and requirements of HSAs.

An HSA is an account set aside specifically for paying qualified medical expenses.  The account is typically set up as a tax-exempt trust or custodial account.  HSAs are offered by some employers to give their employees more control over funds allocated for health care services. 

Both employees and employers can contribute to an HSA.  The 2011 maximum annual contribution is $3,050 for individual coverage and $6,150 for family coverage.  These limits will increase in 2012 to $3,100 for individuals and $6,250 for families.  You can expect to see future changes in contribution limits as they are indexed to inflation. 

Individuals who have an HSA and are at least age 55 by December 31st may make a one-time annual “catch-up” contribution of $1,000 to their HSA (as long as they are not enrolled in Medicare).  Because accounts are owned by an individual and are technically not family accounts, when both a husband and wife are eligible to make catch-up contributions they must own separate accounts to do so.

For more information regarding health savings accounts, contact your Leavitt Group insurance advisor.

SOME OF THE BENEFITS* OF AN HSA ARE AS FOLLOWS:

• You can claim a tax deduction for HSA contributions made by you or someone other than your employer.
• Contributions made by the employer are excluded from taxable income.
• Unused contributions in your account roll over from year to year.
• Earnings on contributions are also not subject to income taxes. 
• Distributions for qualified medical expenses are tax free.
• Certain preventative services can be covered in full and not subject to a deductible.
• If you change employers or leave the workforce, you still own your HSA.   

YOU ARE ELIGIBLE FOR AN HSA IF:

• You are covered under a high deductible health plan (HDHP).
• You have no other health coverage except what is permitted by exception.  These exceptions include supplemental coverage without a high deductible for such things as specific injury insurance or accident, disability, dental, vision or long-term care insurance.
• You are not enrolled in Medicare.
• You cannot be claimed as a dependent on another person’s tax return.

*States that do not provide state tax exemptions for HSA deductions are Alabama, California, New Jersey, and Pennsylvania.
Sources:  IRS.gov and EBRI.org

As part of a benefits package offered to employees, many employers provide retirement options.  Two employee retirement plan options you can provide include a defined benefit plan and a defined contribution plan.

»  Defined Benefit Plan

»  Defined Contribution Plan





Understand basic investment principles.  A variety of factors will influence how much you will have saved at retirement, including inflation, type of investments, and how long your money has had time to grow.  Pay attention to your investments and meet with a financial advisor on a regular basis to ensure you are staying on track to meet your financial goals.  Diversify your investments to reduce risk and improve return.  Knowledge equals financial security.

Contribute to your employer’s retirement savings plan.  If your employer offers a retirement savings plan, start contributing.  Set a goal to contribute at least enough to qualify for the full employer contribution.

Set realistic goals and stay committed.  Set a realistic savings and investment strategy to meet your financial retirement goal.  Start small if you have to and increase the amount over time. The sooner you start saving, the more time your money will have to grow.

Don’t touch your retirement savings.  If you withdraw your retirement savings prematurely, you will lose principal and interest and possibly tax benefits.  You may also have to pay withdrawal penalties.  If you change jobs, don’t withdraw the savings; instead, roll them over to an IRA or your new employer’s plan.

Invest in an Individual Retirement Account (IRA).  There are two IRA options - traditional IRA or Roth IRA.  The tax treatment of your contributions and the after-tax value of your withdrawal will depend on the type of IRA you choose.  Annual contributions can be up to $5,000 and there are certain tax advantages in contributing to an IRA as well.

Learn about your Social Security benefits.  Review your annual Social Security statement so you are familiar with how much your estimated benefit will be and when you can expect to receive it.  On average, Social Security currently pays benefits that are equal to about 40 percent of what you earned before retirement.  For more information, visit www.socialsecurity.gov.

Ask questions.  While these tips provide suggestions for preparing for retirement, you need more in-depth information to determine your retirement needs and make sound investment decisions.  Consult with a financial adviser for more detailed information and guidance.

Source:  www.dol.gov

With increasing health care costs and major changes to the health care system, many employers are implementing wellness programs and health incentives for their employees. With a little creativity and participation from your workforce, you can create a wellness program that meets the needs of your employees and helps them maintain a healthy lifestyle.

Here are a few ideas to help you start or improve your own company wellness program:

Wellness Program Ideas & Initiatives:

• Sponsor fitness and weight loss competitions.
• Sponsor a walking program.
• Sponsor company sports events, such as softball tournaments or 5K races.
• Substitute snacks around the office with fresh fruits and vegetables.

Incentives for Participation in Wellness Programs:

• Provide a monthly cash incentive for meeting fitness goals. 
• Offer discounted health club memberships.
• Give gift cards for health-related products and services.

Wellness programs offer attractive benefits to employees, but they also add value to the employer as well.  Some of the reasons employees are motivated to participate in wellness programs include:

• Desire to achieve better overall health.
• Reduce personal health care costs.
• Increase longevity of life.

The benefits an employer can expect to see while maintaining a wellness program for employees include:

• Improved energy and productivity among employees.
• Employees will be motivated to work harder and perform better.
• Decrease in absenteeism due to illness.
• Improved employee moral.
• Decrease in health care costs as employees reduce unhealthy behaviors and maintain a healthy lifestyle.
• Gain control of illnesses, conditions, and unhealthy behaviors before they become more serious.
• Recruit and retain top talent - wellness programs can help employees feel more appreciated and also increase loyalty to the company.

   * “American Workers Say Wellness Works to Improve Health, Save Costs.”  Business Wire.  February 16, 2011.  

• Elimination of all or substantially all benefits to diagnose or treat a particular condition.

• Any increase in the employee percentage of co-insurance charges. 

• Increase in a deductible or out-of-pocket maximum by an amount that exceeds medical inflation plus 15 percentage points.

• Increase in an employee co-payment by an amount that exceeds medical inflation plus 15 percentage points (or, if greater, $5 plus medical inflation). 

• Decrease in the employer contribution rate toward the cost of coverage by more than 5 percentage points below the employer contribution rate on March 23, 2010. 

• Imposition of new annual limits if the plan did not include them on March 23, 2010, or a decrease in existing annual limits below the lifetime limit. 

• Changing employees to a less generous plan; corporate mergers/sales to avoid compliance.

Chances are you can’t satisfy every request, but you’ll build goodwill through this communication process, and you will be better able to craft a benefits package that is on target with your workforce’s needs. Do this well in advance of open enrollment.
Consider adding benefits you have not offered before.
This doesn’t have to be a costly proposition. You can bring in supplemental benefits on an employee-pay-all basis, or add pre-tax flexible spending accounts for health care and/or dependent day care. Employees appreciate when employers make these types of benefits available to them, even if the employer isn’t contributing to the cost.

Meeting with your benefits advisor to discuss any changes in your company will help determine if costs can be cut. If your company has experienced a significant change in the number of employees, you may qualify for better pricing on some of your benefits options.

1. Wellness Program: With the rising costs of health care, both employers and employees can take responsibility for their own health by participating in a wellness plan.

2. Company Discounts: Although often overlooked, employee discount programs can be a very popular benefit to staff. This gives employees the chance to buy brand-name products or services at a discount.
3. Education Plan: Today’s work force requires lifelong learning to keep pace with the changing demands of employment. You can consider varying levels of support, from paying the full tuition costs of an MBA program to a partial reimbursement or contribution to the cost of a community college course.

4. Commuter or Parking Benefits: Depending on employee commuting needs, you can consider covering the cost of a monthly city transit pass or paying an amount of pre-tax payroll dollars for vehicle parking.



Cafeteria plans create a great opportunity for employers to enhance the benefits package they offer their employees.  In addition, they offer tax saving advantages for both the employer and employee.  Employees' pretax contributions are not subject to federal, state, or social security taxes. Employers save on the employer portion of FICA, FUTA, SUTA, and workers' compensation insurance premiums. Both parties save on taxes and therefore increase their spendable income. (The rules that define “taxable wages” may vary by state.)




Cafeteria plans include Health Savings Account (HSA), Premium Only Plans, and Flexible Spending Arrangements.  Below are brief explanations of cafeteria plan options. 

Health Savings Accounts are available for individuals on certain high deductible health plans.  These accounts are funded by the employee or by the employer.  Similar to the FSA, Health Savings Account funds can be used to pay for certain medical expenses for eligible individuals and their spouses and/or tax dependents. 

The Premium Only Plan is an option that was created in an effort to make benefit programs more affordable for employees.  Under a Premium Only Plan, an employee may choose to pay for qualified benefit premiums with pre-tax dollars.  The qualified premiums (if offered by the employer) include:
   

• Health
• Accident
• Dental
• Vision
• Prescription
• Cancer
• Hospital indemnity
• Medicare supplement
• Disability (although not recommended)
• Employee group term life (up to $50,000)

A Flexible Spending Arrangement (FSA), commonly known as a flexible spending account, allows an employee to set aside a portion of his or her earnings to pay for qualified expenses.  Qualified expenses can include medical and dependent care costs.  Two common types of FSAs include the Medical FSA and the Dependent Care FSA:

• Medical FSA:  used to pay for medical expenses not paid for by insurance.  This typically includes deductibles, copayments, and coinsurance for the employee’s health plan, but it may also include expenses not covered by the health plan, such as dental and vision expenses. 
  
• Dependent Care FSA: can be established to pay dependent care expenses you incur while at work.  This includes child care for children under the age of 13 as well as adult day care for senior citizen dependents, such as parents.  

Beginning in July of 2010, employees with health problems  who have been uninsured for 6 months may be eligible to obtain coverage through a new high risk pool program. A temporary reinsurance program will help employers who provide coverage to their retirees in maintaining this coverage.

Beginning in plan years on or after September 23, 2010, pre-existing condition exclusions are prohibited for children under 19; dependents up to age 26 will be able to obtain coverage through parents’ health plans; routine preventive care will be covered without cost-sharing; and limits on lifetime coverage will be eliminated along with other changes.

In 2014 individuals and small businesses will be able to purchase coverage through state-based exchanges regardless of health status.  Premiums cannot vary because of health status. Individuals will be required to purchase health insurance or pay a penalty. Subsidies will be available on a sliding scale to help individuals or families with incomes up to 400 percent of the federal poverty level to purchase insurance through new state-based exchanges.




While some health care payers may look to consolidate assets and begin planning for market exits, other private and public payers will look to try out new payment systems, reduce administrative costs, and pilot new strategies to improve the health of populations while lowering the cost of care. Enterprising providers will find partners and strategies that create and capture value and will assume more accountability for outcomes than ever before.

Included in this landscape of change will be the reaction of employers in handling insurance for their employees.  One of the largest adjustments with PPACA* will be the nationwide pressure for employer-sponsored coverage.  Both small and large businesses will approach employer-based insurance differently now. 

Here are some basic elements from the health care reform that every business should know:

• It is important to note that the law does not require employers to provide health insurance coverage. 
• The law considers employees working more than 30 hours to be full-time employees in regards to providing insurance. 
• If an employee of a non or insufficient insurance providing employer obtains insurance through a state insurance exchange and receives a premium credit, the employer will be fined.
• New employees of companies with more than 200 employees must be automatically enrolled into the employer sponsored plan within 90 days of hire.
• Fines for employers can be larger for employers that provide “unaffordable” coverage than those who simply provide no coverage.
• The summation of hours that part-time employees work will be calculated into the formula evaluating business size.

*PPACA is the Patient Protection and Affordable Care Act, signed into law on March 23, 2010.

 

 

Ergonomics is the science of designing the job, equipment, and workplace to fit the worker. Proper ergonomic design can prevent repetitive strain injuries, which can develop over time and can lead to long-term disability. Here are some important tips to keep in mind:

• The top of the computer monitor should be at or just below eye level
• Head and neck should be balanced and in-line with torso
• Shoulders should be relaxed
• Elbows should be close to the body and supported
• Lower back should be supported
• Wrists and hands should be in-line with forearms
• There should be adequate room for the keyboard and mouse
• Feet should be flat on the floor

Source:  www.osha.gov

Group presentations and individual consultations can be one of the most effective ways to communicate.  Open conversation engages employees and allows them to ask questions relevant to their needs. 

Customized Employee Benefits Website
Benefits manuals can easily be lost or misplaced.  Offering employee benefit information online allows employees to quickly get answers to their questions.

Benefits-at-a-Glance Summary Sheets
Lengthy manuals can be overwhelming to an employee trying to understand offered benefits.  A “frequently-asked questions” sheet with concise answers can save employees unnecessary frustration.

Employee Newsletters
An employee newsletter with articles reviewing benefits, addressing questions, or announcing changes will remind employees of what is being provided.

*Source:  www.humana.com

We all know the holidays often come with feelings of stress given the high expectations for the season.  Here are some helpful hints to keep your employees productive and healthy throughout the holidays:

Set Work Expectations:  Set clear and reasonable goals with your employees as to what work should be completed prior to holiday time off.  Encourage time management in daily tasks to manage the workload.

Encourage Physical Activity:  Create incentives to maintain your wellness program throughout the season.  Post healthy holiday tips, like drinking plenty of water and exercising regularly.
Communicate Holiday Pay:  If a holiday bonus is not in the budget this year, be sure to let your employees know so that they can budget their holiday expenses.  Communicate paid holidays so employees can schedule time off accordingly.




Create a Harassment-Free Workplace

Harassment and discrimination can cause disruption in the workplace, lower employee morale, and could even result in a costly lawsuit.

The US Supreme Court has held that employers can be found liable for harassment and discrimination claims, even if the employer wasn’t directly aware that harassment and discrimination were occurring in the workplace. 

Harassment can include any verbal, written, or physical act that makes employees uncomfortable at work or interferes with their ability to perform their jobs. It can include jokes, emails, cartoons, drawings or other material that is suggestive or reflects negatively on a protected class. It can include slurs or offensive language.

As an employer, you can be held accountable for all forms of unlawful discrimination and harassment, so it pays to have a proactive policy to protect your business and your employees. Here are some ways you can begin to address the issue:

• Create a harassment and discrimination prevention policy:  Make sure employees know that you will not tolerate harassment or discrimination. Distributing a formal written policy outlining your commitment to a harassment and discrimination-free workplace is a good way to start.  Make sure you and
your managers demonstrate that you believe the policy
is important.

• Outline steps employees should take: Your policy should also include a reporting procedure for employees who feel they are being harassed or discriminated against. It is important to make sure the method is clear, easily accessible, and confidential.


• Conduct a thorough investigation: An immediate investigation is imperative to protecting your employees and business.  Once a complaint has been submitted, an objective and confidential investigation should be completed.  Retaliation should not be tolerated.  If it is determined that unlawful harassment has taken place, disciplinary action commensurate with the severity of the offense should be taken.

Are your employees contributing to their retirement fund?

Have your employees continued to contribute to a retirement savings plan despite the recession? If so, they are not alone. In the second quarter, more workers contributed to their retirement plan than reduced their contribution, according to a Fidelity Investments study. This is compared to the previous three quarters. In fact, the average account is up 13.5 percent from the first quarter due to the stock market rally and contributions.

Workers in their 30s and 40s continue to save and have a higher percentage of contribution in workplace plans than workers in their 20s – even though those in their 20s stand to benefit tremendously by investing early.

Tips for employees saving for retirement:

• Start saving early in your career
• Make wise investments
• Look beyond immediate gratification
• Save, even if it’s a small amount
• Use banks for your emergency funds

Will this flu season affect your business?

The coming flu season will likely include the H1N1 flu, which the World Health Organization has declared a global pandemic. They estimate that one-third of the world will be infected with H1N1 within the next two years. While it is hard to predict the severity of this flu strain, recent reports suggest
H1N1 will affect about 50% of Americans.

If your employees get the flu, have a plan in place for operating with a reduced workforce. Also take measures to prevent the spread of the flu among your employees. Consider being more flexible, such as not requiring written proof of illness and allowing telecommuting. Also, provide additional cross-training among employees, and recommend they get flu shots for the H1N1 and seasonal flu. Keeping workplaces as clean as possible can help in avoiding contamination. The flu can spread quickly, and a person infected with the virus can be contagious before any symptoms are noticed. If your employees show signs of flu symptoms, don’t hesitate to send them home.

Publicize these everyday prevention steps at work

• Cover your nose and mouth with a tissue when you cough or sneeze. Throw the tissue in the trash after you use it.
• Wash your hands often with soap and water, especially after you cough or sneeze. Alcohol-based hand cleaners are also effective.
• Avoid touching your eyes, nose or mouth to prevent spreading germs.
• Try to avoid close contact with sick people.

If you are sick with a flu-like illness:

• Stay home for at least 24 hours after your fever is gone, except to get medical care.