WEBINAR: Group Health Insurance for Small Businesses
Table of Contents
- Okay hello everyone this is Roo Gloria with a cap asset management thank you...
- Policy on the exchange it is because they're getting some type of subsidy so...
- Insurance bill in every month and an employer might write the employee a...
- Go down that road gives employees access generally to better benefits than the...
- Something that a good agent would take into consideration network adequacy if...
- Have it because if you don't there can be penalties down them down the road and...
00:00
okay hello everyone this is Roo Gloria
with a cap asset management thank you
everyone for joining we're gonna give it
about another minute or so before we
start the presentation and just to kind
of give chance everyone to kind of start
logging in you'll notice everyone that
there's a chat box on the bottom
right-hand corner of your screen please
go ahead and use that to send us any
questions you might have or if you're
00:31
not able to see the screen or you're not
able to see the slides please go ahead
and let us know through that chat box
and we'll go ahead and try to correct
everything and I think we should go
ahead and get started my name again is
RO Maria and I'm with a cap asset
management and today I have the distinct
pleasure of having Amy Evans with us who
is a president of Calibri insurance
services and just before I kind of go
into a brief background with with Amy I
want to point out the importance of
01:03
health insurance and the Affordable Care
Act and and just the dramatic changes
that are going on in the health industry
the past few years and which which is
why it's so important to bring this
subject matter to our audience because
as business owners or as individuals
we're so often confused with what's
going on with the health insurance
industry's how are our premiums changing
our coverage is changing so I've asked
Amy to come in as an industry expert to
shine some light on some of these
01:34
changes that are going on and hopefully
provide us with some guidance and tools
that we can use whether in our
businesses or personal lives to you know
hopefully less than the cost of of
insurance so quickly I'm going to give a
bio about Amy Amy Evans is the president
of Calibri insurance services an
employee benefits consulting firm that
works with employers to design and
implement and communicate a cost
effective Employee Benefit strategy in
this dynamic and involving evolving
02:04
health insurance environment she uses
her tremendous knowledge of the health
insurance industry and health insurance
in general to
on a variety of project prior to
establishing a consulting firm in 2015
Amy word was a spice president of
employee benefits at division of Lebanon
Shirin services in LA and part of which
is part of the levites group
she has over 15 years of experience in
the insurance industry and she has a
degree in English and French from the
02:35
University of San Francisco amy is an
active member of the National
Association of health and underwriters
and also providers which is how I know
Amy she is a regular contributor to the
insurance industry publications and was
named one of PAS
top 10 industry trendsetters to watch in
2016
she is definitely an enthusiastic user
social media and you can find our
posting regularly about health insurance
topics so with that great introduction
03:06
I'd like to introduce Amy Evans thanks
are a good morning everybody I am really
happy to be participating in this
webinar in partnership with Aurra and
with a cap and excited to get into this
and hopefully give you some information
that you will find helpful as health
insurance consumers and also as business
owners who may want to offer health
insurance benefits to your employees
03:35
so as ARRA said I am a 15 year veteran
of the health insurance industry I've
seen a lot of changes I worked with an
insurance carrier for 10 years and then
entered the insurance broker arena so
instead of working directly with a
carrier I was working on behalf of my
clients to help them determine the best
employee benefits packages and I did
that first with a national firm and then
started my own agency Calibri insurance
services about three years ago and I
04:08
love working with business owners
helping them navigate this very
confusing and constantly changing world
of employee benefits so wanted to give
you an overview of what we're going to
go over today and as our I mentioned the
web
being recorded so you'll have access to
all these slides and the audio that goes
with it after we finished the webinar
things that we're gonna cover today
current challenges in the individual
health insurance market I talked to a
04:39
lot of business owners who have
individual coverage so not through an
employer plan but directly with one of
the insurance carriers here in
California and there are a lot of
changes going on in the individual
market that are making it more and more
challenging to have individual coverage
and so I want to talk a little bit about
those and why setting up an employer
plan for your business may help mitigate
some of those challenges there are ways
05:10
or I should say there is a way for
employers to reimburse employees for
their individual coverage so if you're a
small business owner maybe you have an
individual policy you're happy with
maybe your employees have policies with
other carriers that they're happy with
and rather than having them cancel that
coverage and set up a new employer
sponsored plan maybe as an employer you
just want to give your employees money
to help them cover the cost of their
individual plans there is a way to do
that and we'll talk about that a little
bit also I want to talk to you about a
05:43
health insurance agent or broker like me
can help to simplify the process of
determining whether or not to reimburse
employees for individual plans set up a
group plan select carrier select plan
designs determine employer contribution
there are a lot of factors that go into
that decision making process and a good
agent will help you to make that process
as easy as possible on you and your
employees and then there are a lot of
06:15
rules and requirements for group health
insurance plans if you haven't gone down
that road you may not be aware of some
of the legal issues and then also some
of the carrier insurance carrier
specific issues rules that all insurance
carriers have when working with
employers and I want to talk a little
bit about that so that if this is
something that you're interested in
pursuing you have a good perspective on
what you'll be required
do as an employer so that's an overview
of what we'll be going through today and
06:46
I want to talk about the health
insurance market I use a lot of terms
that I'm used to using on an everyday
basis but I recognize not everybody's
going to know what I'm talking about so
I want to define some of these terms
first the individual market so when I
say that I mean a plan that an
individual person and maybe their family
members has directly with an insurance
carrier
so they've signed up separate from any
07:17
employer plan it's not through their job
they're not paying for it through
payroll deduction they're paying the
insurance carrier directly and when I
say insurance carrier I mean any one of
those insurance companies here in
California that offers individual
coverage that can be Kaiser Blue Shield
health net United Healthcare those are
all insurance carriers so an individual
plan or policy would be directly with
one of those insurance companies covered
07:50
California is the exchange that the
state of California set up under the
Affordable Care Act to make the purchase
of the process of purchasing individual
coverage a little bit easier and so it
is a a web-based program where
individuals can go and shop for
individual insurance policies for
themselves and their families and they
pay the carriers directly for that
coverage so that is one way to get
08:22
individual coverage there are also group
policies available through covered
California I'm not going to spend time
on those today but primarily covered
California is used for individual
coverage so that is also generally not
an employer sponsored program that's
something that someone would purchase
individually by going to the covered
California website so you may have
employees who say that they have a plan
through covered California and that's
what they mean they've purchased it on
the exchange in most cases when someone
makes a purchase
08:54
policy on the exchange it is because
they're getting some type of subsidy so
government money to help cover the cost
of the premium I just want to remind
people if they've got questions please
go ahead and type it into the question
box we've got a couple already but just
a reminder if you do have questions or
need clarifications type it into the
question box I promise we're going to
get to all the questions at the end we
are also recording this as Amy mentioned
so it will be available for for queuing
09:25
on various different platforms sorry Amy
perfect no thank you appreciate it so
then there are the employer sponsored
health insurance plans so there are both
small group and large group employer
sponsored plans and this is when an
employer decides that they want to make
health insurance available to their
employees so the employer goes to one of
those carriers I mentioned kaiser Health
Net Blue Shield anthem and sets up a
contract between the employer and the
09:57
carrier the employers involved in the
decision making process about which
plans they're going to offer to the
employees HMOs PP o--'s small network
skinny networks and the employer is also
involved in in contributing towards the
cost of one or more of the plans that
they select and then the employer
collects the premium for the insurance
coverage through the employees paychecks
if the employees have any contribution
and then the employer pays the monthly
10:27
bill to the carriers so that's really
what we're going to focus on today is
those employer-sponsored plans and the
carriers are very specific about small
group and large group definitions so
depending on the number of full-time
employees your company has that will
determine whether you go into the small
group division of that insurance
carriers plans or the large group
division and even under one carrier
umbrella small group and large group are
very different things the rates are
10:59
different the plan designs are different
the network's can be different and also
the customer service is diffe
in small group versus large group so
your your company size will determine
which of those you fall in and small
group is 2 to 100 employees a large
group is a hundred and one or more and
then finally I can't have a health
insurance conversation without
mentioning the Affordable Care Act and
are I you mentioned that in your
introduction the Affordable Care Act is
11:30
a law that went into place about seven
years ago that defined what health
insurance policies should include and
how health insurers should behave and
it's created a lot of benefits and a lot
of chaos in our industry and the
important thing when talking about
employer sponsored insurance is that if
you are an employer who has more than 50
full-time employees you are subject to
certain obligations under the Affordable
12:00
Care Act or if you choose not to abide
by those obligations you will pay a
penalty so it's totally separate from
the definition of small group and large
group with the insurance carriers you've
also got to consider whether or not you
are considered what's called an
applicable large employer or a le under
the Affordable Care Act and then you may
have to follow their rules regarding
what kind of coverage you offer and how
affordable it is for your employees so
12:31
that's another thing to keep in mind so
moving on from that I said I was going
to talk a little bit about the
individual health insurance market
because what I'm finding is the
challenges in the individual insurance
market are pushing some business owners
who have individual plans to say gosh
I'm not really happy with my individual
plan anymore towards the end of last
year I saw individual premiums going up
30 and 40 percent when the plans renewed
on January 1st and that's untenable for
plans that are already with family
13:04
premium could be over a thousand dollars
and with an increase of 30 or 40 percent
a lot of people just can't afford that
and are not happy with that so a small
group so individual insurance holders
who have businesses are considering
maybe
setting up a small group plan to try and
keep their costs down important related
to the Affordable Care Act was the
individual mandate originally the ACA
required that everybody have insurance
13:36
coverage or pay a penalty and the
individual mandate was designed to
motivate everybody or penalize everybody
into purchasing coverage so that we
would have healthy people well and sick
people paying premiums into the
insurance pool that's the way to keep an
insurance pool healthy if only sick
people are purchasing insurance then the
claims that carriers are paying out are
higher than anticipated and that means
the rates have to go higher and
unfortunately in the recent tax
14:09
revisions the individual mandate was
repealed and that's telling people that
they don't have to have insurance if
they don't want to and unfortunately
that means that fewer people purchase
insurance when that happens it means
premiums go higher and I certainly
believe that some of those massive
increases I was seeing at the end of
2017 are related to that change it's a
it's part psychology it's part economics
but the the fewer people we have in the
pool the higher the premiums are gonna
14:40
go so that's having an impact on the
individual market also anthem was one of
our biggest individual insurance policy
providers in California and they decided
that they didn't want to play anymore in
the individual market and they pulled
out of all but three I believe counties
in California at the end of 2017 so
there was a massive group of people who
had Anthem coverage on an individual
basis and they were forced to move to a
15:11
different insurance carrier when they
renewed their policies on January 1st
and that was very upsetting and anthem
does still participate in the small
group market so I have worked with some
employers who really like their anthem
plans like their networks like the plan
design and since they couldn't have it
on an individual basis they decided they
wanted to move to small group
so that they could keep their anthem
coverage so it's another important
impact on the individual market
insurance providers are super frustrated
15:41
with all this chaos so doctors offices
that just don't want to deal with the
stuff anymore and employ medical billing
people to try and sort all of this out
for all of their patients providers are
more and more pulling out of contracts
with individual carriers and not wanting
to bother with it and so that's creating
some chaos as well and there was a big
change to the rating the way that
premiums are determined for families a
long time ago it used to be that you
16:14
could get one rate for a whole family
now in the individual market people are
rated individually and children used to
be rated in a in with one rate for a
wide number of children's ages and then
they changed that and now more children
are rated individually and every time
another person gets rated individually
it makes the overall family premium go
up so that's been another contributor to
the increase in premiums in the
individual market and there were some
16:45
grandfathered plans you may have heard
that term what that means is they were
old plans that were written before the
Affordable Care Act came into being and
those old plans had didn't have to have
all of the bells and whistles that the
Affordable Care Act required of new
plans and people were allowed to keep
those for a few years after the
Affordable Care Act was rolled out and
those plans were generally cheaper than
Affordable Care Act compliant plans
because they didn't have those bells and
17:17
whistles and those grandfathered plans
are expiring in 2018 so they're no
longer available so I am seeing people
who have grandfathered plans who are now
having to move on to ACA compliant plans
and there's a huge premium increase
there because they have to make they're
forced to make that change this year so
lots of things in the individual market
that are making it harder and harder to
keep individual health insurance plans
so I talked about
a way for employers to reimburse
17:49
employees for individual coverage so
even with all those challenges in the
individual market you may be an
employers who's happy with your plan you
may have employees who have their own
individual plans and they're happy with
them but as an employer you want to
provide a benefit and find a way to help
employees with the cost of their
individual insurance it used to be that
a lot of employers did that but it was
non it was non-compliant employers might
have an employee bring a copy of their
18:19
insurance bill in every month and an
employer might write the employee a
check to reimburse them for part or all
of that cost or they might add some
money to their paycheck doing any of
that is a is a problem because it
establishes a group plan and then makes
that group plan subject to all the laws
about employee benefits that fall under
the ERISA law so even though it seems
like a nice thing to do and it seems
like it's a little under the table and
18:50
may be off the books and not a big deal
it actually opens up an employer to a
whole lot of problems if they get a
disgruntled employee that wants to make
some noise and it is not advisable to to
handle reimbursements for premiums that
way so at the end of 2016 the prior
administration signed the twentieth
century cures Act and this Act among
other things created a vehicle that
allows employers to reimburse employees
19:21
for their individual insurance premiums
and not create all those other legal
challenges and that vehicle is called a
Kucera or a qualified small employer
health reimbursement arrangement that is
a mouthful and a cue sarah has a plan
document that the employer sets up in
signs and the employer makes some
decisions about who's eligible for this
benefit and once they make that decision
it has to apply to all employees you
can't pick favorites and it allows
19:53
employees to have individual coverage
and
omit their bills to a third-party
administrator that the employer pays and
when the third-party administrator
approves a claim then they tapped the
employer to provide the money that then
is used to reimburse the employees so an
employer can say I want to give all my
employees $400 a month towards their
individual health insurance and the
third-party administrator then manages
that make sure that the employee
20:25
actually has valid health insurance
needs to see proof and then will pay
that $400 out to the employee when they
provide the proof of their coverage so
that's really the only legal viable way
that an employer can provide employees
with money to cover individual health
plans but again if if a small employer
has their own health insurance and is
happy with it and the employees have
their own health insurance and they're
happy with it rather than upsetting all
of that and setting up a new plan Accu
20:56
Sara might be a viable way to provide
some money in a in an illegal and
acceptable and non-discriminatory way so
let's talk about the group health
insurance market
this is employer sponsored coverage so
like I described earlier an employer
sets up a contract with a with an
insurance carrier and the employer is
involved in the decision making process
about which insurance plans are going to
21:27
be offered to the employees and then if
the employees are paying for part of
their coverage the employer makes
payroll deductions and the employer pays
the group the health insurance bill to
the carrier every month benefits of the
group health insurance market it is
currently currently more stable than the
individual insurance market so where
we're seeing carriers pull out like
anthem from the individual market anthem
is still in the group insurance market
now we still have a lot of chaos with
carriers talking about merging and
22:00
pharmacies and prescription providers
there's all kinds of stuff going on that
does have an impact on the group
insurance market but right now I feel
safe saying that the group market is
more stable than the end of it
market there are yeah related to that I
mean lately we've heard this news about
Amazon JP Morgan and Berkshire Hathaway
kind of collaborating on something
related to health insurance can you give
us some more information about that I
mean I think it's still relatively new
but maybe tried some light on that yeah
it's it's interesting and I've
22:32
definitely been following it what what I
anticipate they're going to do is pull
all of their employees together tens of
thousands or hundreds of thousands of
employees under what's called a
self-funded plan so that's a whole
different conversation but it means that
they as a group will set up their own
insurance plan and they'll use their
money to pay claims rather than using
their money to pay premium to an
insurance company to pay claims and
23:03
self-funded plans are very common in the
fortune 500 sized employer groups so my
and my expectation is that that's what
they'll do is pull everyone together and
they'll also get a lot of data that
they'll essentially and I'm I hope this
doesn't sound too critical they'll
they'll be using their employees health
information though they'll be using
their employees as guinea pigs they'll
be getting a lot of data about their
employees prescription use and surgeries
23:36
and follow-up care and chronic diseases
and they'll be able to look at that data
over a huge employee population and
figure out what's working and what's not
working when they figure out what's
working and what's not working that
information may then trickle down to
smaller employers and provide some some
good care management information but I
don't see what they're doing as having
an impact in the near future on the the
24:08
small group and the large group health
insurance markets that we're talking
about right now that makes sense thank
you cool so other benefits of the group
health insurance market more plan
designs so HMOs with small deductibles
and large deductibles and accountable
organizations or a cos P poz POS I know
that's a lot of acronyms but it means
that overall there are a lot of
different choices for an employer to
make about the kind of plan that will be
24:39
the best for their employees so more
flexibility in the group market than the
individual market also more carrier
participation we discussed anthem and
more provider participation meaning that
doctors seem to be friendlier to group
plans than they are to individual plans
and that makes less confusion at the
time of service for employees when they
go to get care and provide their
insurance card so two two ways to go in
25:09
the current environment if an employer
wants to take care of their employees
and the first we already talked about is
the queue sera option so the benefit of
that is that employees can keep their
individual plans maybe you have one
employee who loves Kaiser and doesn't
want to leave and then you have another
employee who's with Blue Shield and you
have another employee who's with Health
Net and you can see that bringing one
plan in and making everybody pick from
one carrier may not go over very well
so letting them keep their individual
coverage and instead providing them with
25:39
some money towards that premium might be
from a PR perspective a better way to go
it's still a benefit that can attract
and retain employees so it can set a
small employer apart from their
competitors if their competitors aren't
doing anything related to health
insurance for their employees and it
keeps the employer compliant with those
nasty ERISA laws I was talking about so
you you remove the challenge the problem
of under-the-table contributions if you
set up a queue Sara there is an
26:10
administrative fee for setting up a
queue Sara and then there there's
ongoing maintenance fees so it's not
free but it is probably overall going to
be less expensive than setting up a
small group plan one important point you
cannot have small group health insurance
and a queue Sara at the same time so
it's really a one or the other kind of
discussion and I am very
sceptical that if you are an employer
26:40
who already has a small group plan that
you're offering to your employees I'm
very skeptical that pulling that and
offering a cuse there instead would go
over very well
I think cuse areas are probably best for
an employer who's never offered health
insurance before so they haven't set
that expectation and again if they've
got employees who already have plans and
the employees are happy with them Accu
sarah could be a good way to to provide
some money for that I think that's the
best scenario so the other option is to
set up a small group plan so we're gonna
27:12
go down that road gives employees access
generally to better benefits than the
individual market and more market
stability gives you a way to keep the
anthem Network if you had an anthem
individual plan and you were happy with
that and you can get it back in small
group it is a great way to attract and
retain employees and it keeps you
compliant there there are there are
guidelines you have to follow but
assuming you're following those
guidelines that keeps you compliant with
ERISA laws so again if you're currently
27:43
paying the employees under the table
that creates a problem a smoker with
group health plan will help to resolve
that so q sarah's one strategy small
group health plan is another strategy
and now i want to talk just a little bit
about what what a health insurance agent
or broker does and i will confuse the
heck out of you because I will use the
term agent and broker interchangeably
agent is my official title through the
California Department of Insurance but I
consider myself a broker because I work
28:14
on behalf of my clients I'm appointed
with all the insurance carriers and I
help my clients select the best coverage
for them and for their employees so I
function as a broker although under the
Department of Insurance terminology I'm
officially an agent so you see the word
agent more often but no I mean the same
thing so an agent should understand your
specific industry and your specific
needs and we'll talk a little bit on the
next side about what that looks like but
28:46
staffing companies is a niche that I
have they have very specific needs that
are a lot different
a lot of other groups restaurants would
be another example where not only is the
employee population specific but also
the way to offer benefits to them and
enroll them can be a challenge if all
the employees aren't sitting in one
office building where you can go in and
do an open enrollment meeting so you
want an agent who understands the
specifics of your business some agents
29:17
provide additional support outside of
just the marketing and the placement of
your insurance so they can provide
online enrollment tools they can help
educate your employees about not only
the plans but how to use them how to get
the best value out of prescriptions how
to file claims some agents will provide
ACA reporting tools so if you are one of
those employers who's got over 50
full-time employees and you're subject
to those ACA requirements there are
tools that will help you track
29:49
information so that you can report
easily to the IRS also some agents will
provide compliance documents things like
pre-tax plans and wrap documents and
things you've probably never thought of
if you don't have a small group
insurance plan but there are agents who
will help you with those things above
and beyond just the placing of the
insurance I know a lot of companies
especially larger companies are trying
to just kind of push you to their
website and have you you know troll
30:21
through there to find the answers that
you're looking for but as a you know as
an employer especially if you're a large
employer and you're you know obviously
very busy well you know what you know
can these HR people contact you like
what service do you provide that's you
know really above and beyond what these
just you know really web-based services
are providing that the HR person can
just contact you and get the information
they need and a five-minute phone call
and they can go back to doing what
they're doing
sir yeah that is what a what a good
30:54
agent will do so a good agents gonna
know your specific company and your
specific employee population and be the
the quarterback and the go-between
between the
bini at usually the HR person and the
insurance carriers I have clients that I
talk to every day multiple times a day
and then I have some clients who don't
need me as often but I am absolutely a
part of their team
to help them deal with billing issues
enrollment issues employees who are at
31:27
the dentist but the dentist says they
can't confirm the coverage there there's
a lot that a good broker will do to make
sure that this process is working as
smoothly as possible and work yes
directly with the HR person as a
right-hand person also at renewal so
when when an insurance contract is in
place it's a 12-month contract so when
it comes up for renewal there's really
about a three month process prior to
31:57
renewal that an agent should be involved
in looking at the renewal rates and the
plan changes and helping the employer to
understand whether or not moving
carriers or changing plans or changing
contribution is a good strategy at that
time and what I found a lot with
companies that work with some of those
web-based services like the one that
starts with a Z whose name I won't
mention they don't get they don't get
32:28
that service they get an email that says
hey here are your renewal options and
they don't get strategy and conversation
and consultation to help them make the
best decision because those web-based
services don't want to put any time into
those changes it just costs them more
the more time they have to put into it
so a good broker is really involved way
before renewal time to help a client
understand what the current market looks
like and help tweak anything to keep
32:58
affordability in the right spot for both
the employer and for the employees thank
you that's great so I like to say that
the the factors the best factors for
selecting an agent are their strategy
their service and their synergy and I
think we really covered that in these
previous bullet points in truth for them
most part all agents have access to the
same carriers and the same plan designs
and the same rates especially in the
small group market under a hundred
employees so I can't go to a carrier and
33:30
get a special plan that other agents
can't get to or I can't go to a carrier
in small group and say hey will you
lower my clients rates by a couple
percent just because you like me there
isn't that negotiating room in the small
group market so it's not about cost I'm
not going to show you something that's
cheaper than another agent can show you
but I can tell you why this plan would
be better than that plan given the
things I understand about your company
and that's really the strategy that I
think is important and I think it's
34:03
important to know agents are compensated
by the insurance carriers they're paid
Commission's on the premium for the
insurance policies so there's no
additional cost to an employer for
working with an agent the the
Commission's are already built into the
rates so whether an employer goes
directly to a carrier or not or works
with an agent it's going to cost them
the same so in essence we are we are
free labor and you should fully take
advantage of us because we the the good
ones know what we're doing but again
34:33
we're working on behalf of you and your
employees to find the best coverage for
you and and keep it as affordable as
possible so factors that go into
selecting a group health insurance plan
i've alluded to some of these there's a
lot that an agent will consider when
making a recommendation understanding
your employee demographics a young IT
company with a bunch of invincible
20-somethings is going to have different
needs for their insurance than an older
35:04
population that might be doing a lot of
say diagnostic exams and cancer
screenings or a mid age female
population that is that has a lot of
pregnancies all of those factors will
determine what kind of plan what kind of
network the hospitalization coverage the
deductible the prescription coverage all
of those things will vary depending on
the the age and the gender and the life
stage of an employee populate
so that should be taken into
35:34
consideration geographies important
there are certain carriers that are
really good in Southern California but
terrible in Northern California so if
you have employees in both locations
that that should be taken into
consideration Kaiser is great I'm a big
fan of Kaiser I think it's best when the
employees are relatively close to one of
the big Kaiser facilities that that's
that's not a blanket statement but I I
think that that's when Kaiser works the
36:05
best so considering how big the networks
are and whether or not your employees
have access to enough doctors in their
home zip codes is really important a
plan may have a really skinny network of
not very many doctors close to your
place of employment and that plan may
look really cheap but if employees live
out in places like Palmdale or the
Inland Empire and the network doesn't
extend out there that's not going to be
the greatest fit so that that would be
36:36
something that a good agent would take
into consideration network adequacy if
you already have doctors that you care
about then we have the ability to run a
provider check to see if those doctors
are in other carriers networks plan
design I mentioned co-pays deductibles
coinsurance prescriptions
hospitalization emergency room Urgent
Care all of those things are are factors
37:06
that can make the cost of a policy go up
or down and should be taken into
consideration with your specific
employee population again and then
employer and employee contribution so
there's a premium for a policy and an
employer in a group coverage situation
is required to contribute towards the
cost of that and then that may leave
some that the employee has to contribute
as well so understanding what the
employees can afford what the employer
37:36
can afford giving employees maybe buy up
options if there's a basic plan that the
employer pays for but if the employees
want a fancier plan they can throw in a
little their money
to buy up all kinds of strategies there
special programs carriers are doing
special things all the time if you
bundle mm dental insurance and vision
insurance along with your medical you
can get a 5% discount or normally we
require 75% of employees to participate
38:08
but right now we'll take a new group at
50% of employees all those things are
happening all the time so a good agent
is gonna help you figure that out and
then there are ways to have multiple
carriers in in one employer contract
even in small group so you may have
three employees who want Kaiser and four
employees who want anthem and normally
you wouldn't be able to go directly to
Kaiser and say I just want to put a few
people on and go to anthem and say I
just want to put a few people on because
typically the carrier's want everybody
38:40
under one contract but there are ways to
offer multiple carriers
under one contract and again a good
agent can help you figure that out if
that's a good option for you so general
insurance carrier requirements if this
is a road that you want to go down what
are the carrier's going to require of
you as an employer typically at least
one w-2 employee and six weeks of
payroll now I mentioned carrier specials
I have seen carriers say I forget the
39:11
payroll we don't need to see that if you
have a contract already with an
insurance carrier and you just want to
move contracts they may just want to see
the bill from the prior carrier but if
you're setting up a contract brand-new
generally at least one w-2 employee and
six weeks of payroll and proof of
full-time employment status for the
employees on payrolls so they might want
to see quarterly de9 see that shows all
the employees that were paid in the
previous quarter and what their hours
were and what their wages were or they
39:41
might want to see payroll records all of
this is set up to avoid two people
getting together and going hey let's
just incorporate so we can get good
health insurance so the carriers are
careful about avoiding that that's what
these requirements are for also a
carrier is going to require an employer
define eligibility
so who of your employees is eligible for
this coverage and that is those are
rules that apply across the board
and typically it's an employee who works
40:11
30 hours a week or more for you and can
sign up for coverage after a
probationary period which can be as
little as 1st of the month after date of
hire or 1st of the month following 30
days or as long as 1st of the month
following 60 days so that's the longest
that you can make an employee wait after
they've been hired full time before they
are eligible for coverage so an employer
defines that also the employer
40:42
determines the contribution typically
the late the lowest contribution an
employer can make under a group contract
is 50% of employee only coverage for the
lowest cost plan so you may only offer
one plan and then it would have to be
50% of that but you may offer an HMO
which is typically sometimes cheaper
than a PPO and you may choose to pay 50%
of the HMO but if employees want the PPO
they would pay the difference in cost
41:12
between what would cost for them to be
on the HMO and then what it would cost
for them to be on the PPO and that's
called buying up so an employer would
have to understand that there would be
an employer contribution to the cost you
can't set up a group contract and say
how the employees are gonna pay for it
all there is some employer financial
participation and then participation
requirement the carrier's want to know
how many full-time eligible employees
you have and how many of those are gonna
sign up for your coverage and they
41:43
typically require somewhere between 25%
and 75% of your eligible employees and -
valid waivers means if someone has a
valid insurance coverage somewhere else
like say through their spouse's employer
that means that your employee who has
coverage through their spouse is
considered that's considered a valid
waiver so they're not counted in the
overall participation total and some
carriers count individual coverage as a
valid waiver and some don't
42:15
so it really depends on the specific
insurance carrier that you work with and
also non-discrimination is really really
really important so I know with small
employers a lot of times especially when
they were born really really small maybe
out of a cutoff a kitchen table or out
of a garage and they employed family
members and friends and college buddies
there might be a lot of special
exceptions that are made for particular
people but in this in the group health
42:45
insurance environment you cannot make
special exceptions if you're gonna
provide coverage for anybody working 30
hours or more who's been with you for at
least 60 days you gotta provide it to
everybody you can't leave somebody out
or pay less for their coverage or pay a
hundred percent for one person's because
you really really like them but you're
only gonna pay fifty percent for
everybody else the the
non-discrimination rules that fall under
ERISA really really important to follow
so know that you if you set up a group
43:17
plan you're gonna have to to to abide by
those rules so additional considerations
this is the last slide and then we'll
get to questions employee communication
if you're going to offer group health
insurance plan in my opinion you want
employees to understand the value
because you're gonna be as an employer
contributing money towards the cost of
it so it is a benefit for them it
increases their overall compensation and
you you want them to understand how to
43:47
use the coverage there's no point in
providing coverage and then not helping
anybody figure out what to do when they
get sick or hurt or need to fill a
prescription so education about the
coverage and the value of it and helping
them enroll is something that's part of
setting up a group insurance plan so
once you've decided how much you want to
pay and what plans you want to offer
then you actually need to roll it out to
the employees and help them make their
selections and a good agent would help
you with open enrollment meetings and
44:17
employee communication to accomplish
that payroll deductions so if you're an
employer offering a group plan if
employees are contributing to the cost
at all then that that
that they're contributing would come out
of their paychecks and you would have to
enter payroll deductions and then use
that money plus the money you're
contributing to pay the carrier bill on
a monthly basis so setting up payroll
deductions is an important part of the
process there'll be a monthly invoice
payment to the insurance carrier that
44:47
you as the employer would have to manage
you might want to have a premium
conversion plan it's all it's got a
million names pop plan premium only plan
cafeteria plans section 125 plan it all
means the same thing it allows you to
deduct employee contributions on a
pre-tax basis which means employees
don't pay income tax on the money
they're using for their health insurance
premium and you also don't pay payroll
taxes as an employer so it's a benefit
for both you and the employees but you
have to set that up to be able to do it
properly it's easy but it's important to
45:19
have it because if you don't there can
be penalties down them down the road and
then ongoing administration for new
hires and terminations
so as you hire employees they're subject
to the same waiting period the same
eligibility so once they satisfy their
eligibility period they have to be
offered coverage typically you would
give them a packet of information give
them a deadline by which they have to
make a decision fill out their
application submit their application and
then make sure that they get enrolled
and start their payroll deductions and
45:49
then the reverse for terminations if
somebody's enrolled and they leave your
employment you would notify the carrier
of the termination so that they would be
removed from your bill so that's some
ongoing administration and then we've
we've talked a few times about adherence
to ERISA so a good broker is going to
help you understand what your
requirements are under the law but you
ultimately are responsible as an
employer for adhering to ERISA
requirements so that's something you
would want yourself or your Human
46:20
Resources person to to be aware of and
assisting this so I think I have covered
a heck of a lot and I'm sure we've got a
couple questions that I am happy to
answer yeah we definitely covered a lot
of information and boy that was a very
very comprehensive Amy thank you very
much and we do have a lot of questions
I'm not surprised
the importance of this topic and
everybody has the need and the
requirement for health insurance so let
46:50
me go ahead and I will moderate the
questions I'll start asking them because
they're popping up on the chat box and
I'll ask you and then you can go in to
answer them and then I'll go ahead next
one if we can kind of keep the answer
short that'd be very helpful so that way
you can go through all the motions yes
so the first question is can you have a
small group health plan for some
employees and iqs you Sarah for others
you cannot it is one or the other okay
relevant to this slide I'm not sure
47:21
which side they were referring how much
time does it take to set up a group
contract great question I would
recommend at least two months prior to
whatever the effective date is so if I
was working with a group right now mid
March I would say we certainly don't
have enough time for April first we may
have enough time for May first but I
would say probably June 1st because
you've got to collect a census get the
47:52
census out to the insurance carriers get
the quotes analyzed the quotes make the
decisions about which plans and what the
contributions are and then set up open
enrollment to educate the employees
about all these decisions so it's not a
it's not an impossible process I do it
all the time but I think two months is a
good healthy amount of time to be able
to make good solid decisions okay the
next question which I think is related
to what you just answer it is when can
48:23
an insurance contract be initiated is
that kind of the same thing that you're
just asking
that's a great question a lot of
business owners have calendar year in
their heads and I understand a lot of
things related to finances or calendar
year and so there's a perception that
the only 12-month cycle that your
benefits can be on is January 1 through
December 1 and a lot of companies are on
that cycle but the truth is you can set
up an insurance contract to have an
effective date always the first of the
month but any first of the month
throughout the year and my
48:54
recommendation
to avoid fourth-quarter avoid December
1st and January 1st particularly as much
as possible because about 80% of group
contracts renew either December 1st or
January 1st so everybody is completely
insane at that time of year it's like
tax time times a hundred so any other
time of the year you can hat you can set
one up what was as a accounting firm in
tax form we definitely know what that
49:23
feels like so the next question is how
can an employer forecast or a budget
there was health insurance cost is there
like a good inflation factor like if
you're if you're an employer you're
trying to forecast the cost going out
that's a great question
and there's there's two parts to that so
the first is as somebody who's been in
this business for 15 years and talks
along a lot to a lot of insurance
49:54
brokers our general feeling is that an
increase of under 10% is not bad so if
our client if I get a renewal for a
client for a contract that's renewing
say June 1 and it's less than 10% that's
a good starting point that doesn't mean
I'm not gonna look at other options and
make recommendations on how to reduce
costs but I would say if you're
budgeting 10 to 15% year over a year is
50:25
a reasonable expectation now I'm saying
that in the middle of March of 2018 I
have no idea what's going to happen six
months or 12 months from now with
carrier compression and changes in the
laws and it's complete wild wild west
but right now if I was recommending that
a client you know forecast an increase I
would say 10 to 15 percent and then the
other part of that that that's really
hard in small group is that the rates
are based on employees ages so if you're
50:55
contributing 50% of the employee premium
what you contribute as an employer for a
21 year old is a lot less than what you
contribute as an employer for a 51 year
old so budgeting your costs is hard if
you don't know the age of your of
the people you haven't even hired yet
which I know is frustrating but I don't
have a good workaround for that okay
yeah I think 10 or 50 percent is just
absolutely crazy
it is okay I'm gonna limit it to the
next two questions because we're running
out a little bit of time but so two more
51:27
questions and then if there are any
other follow-up questions please as I
said earlier this is gonna be recorded
this is being recorded we're gonna post
on our social media on our website dobe
plenty of opportunities for you to ask
follow-up questions but let me go into
the last two questions which is one is
if the cost becomes too prohibitive for
the employer can they stop the coverage
can they they do that I know there's you
know a goodwill issues with their
employees but yeah yeah the answer is
yes I've had that happen with a client
51:57
and they're not locked into the 12-month
contract so if someone starts on June
first and by December 1st they say we
just can't keep going with this they can
absolutely cancel the contract there's
no penalty but you're right that there's
a big goodwill problem if that happens
okay and then the last question is I
think I already know the answer to this
one but you know I gotta ask it since
it's in here can you have a plan that
benefits the executives versus the
52:28
employees so if you you know I'm
assuming this means like if you've got
highly compensated employees or you know
owners can you have one that benefits
them more than the employees so there
are ways to do that by class of employee
it's very specific so you you have to
play by the rules and the rules may not
always fit what you're trying to
accomplish and know that built into the
Affordable Care Act was an elimination
of the ability to do that but that's
53:00
been put on hold
although it could be passed at any time
so right now you can still do that you
still have to follow carrier rules like
salaried versus hourly management versus
non management there are ways to do that
but that that the ability to do that
already has a sunset on it built-in
they've into the Affordable Care Act
okay perfect and more importantly oh I
was just gonna ask that question how can
people get a hold of you and there it is
53:29
so where Aimee is ubiquitous so our
omnipresent so you can contact Amy
through social media or email phone
phone number again this is being
recorded so this is available for you
I want to thank Amy for doing this
presentation it was enormously helpful
not only for me but also for our clients
or audience
any last words Amy thank you I
appreciate your time and I'm happy to be
54:02
a resource for you if you have more
questions about this thank you again and
this ends our presentation it's also a
part of a series of presentations we're
going to do to educate our clients and
also our audience on different subject
matters this particular one was about
health insurance cost group health
insurance costs for employers but we're
gonna have other subject matters as well
in the future so please stay tuned and
thank you again for participating have a
good day everyone