Articles Tagged with: Scriptsourcing
Home / Blog Archives

Study: More Than Half of Workers Regret Open Enrollment Decisions

More than half of employees regret the coverage decisions they make during open enrollment, according to a new study.

Part of the problem may be that the average employee spends only 30 to 60 minutes selecting their benefits during open enrollment, which typically lasts about two weeks in most workplaces, according to the study by financial service firm Equitable. For perspective, the average American spends 120 minutes a day on social media.

The findings in the study underscore the importance for continuing education and outreach on their benefits and providing your workers the opportunity to ask questions in a private setting.

The top reasons employees cited for regretting their decisions include:

  • 25% said they failed to adjust their benefits to match their lifestyle changes.
  • 20% forgot to make changes to their benefit selections by the deadline.
  • 19% did not understand the options available or the benefits they selected.

It should be noted too that sometimes the regret comes after the plan year starts and an employee in a high-deductible plan, low- or no-premium plan has a health issue that crops up or an accident, and has to pay thousands out of pocket. At that point they may rue their choice, even though they would have paid more in premiums.

One of the more disturbing findings from the study is that nearly 25% of workers said they go to social media to educate themselves about employee benefits. The numbers were highest among Gen Z workers (43%) and millennials (37%).

On the other side of the spectrum, 67% of baby boomer employees and 60% of Gen X workers were more likely than younger generations to rely on information provided to them by their employer and benefits broker when making health plan and other coverage decisions during open enrollment.

How you can help

Employers can help their employees make smart health plan decisions by:

Not inundating them with lengthy educational materials. Often clear and concise materials are best, especially ones that use bullet points and infographics. Benefits experts recommend providing employees bite-sized information that can help them whittle down their choice.

The materials should give different scenarios for workers to help them decide on a plan, such as:

  • A 27-year-old single female employee with no health problems, spouse or dependents.
  • A 46-year-old married father of three young kids.
  • A 58-year-old divorced woman with high blood pressure and asthma.

Keeping the open enrollment period short. Many brokers will tell you that the longer the open enrollment period, the more likely it is that employees will procrastinate on choosing their plan(s) and rush at the last minute. For best results consider a two-week period, and a run-up that includes education and outreach.

Helping them prioritize the basics. There are a few areas that they should review to make sure they choose wisely.
Some areas they can focus on include:

Retaining their doctor — Even if you are offering the same plan as last year, it’s a good idea to tell your employees to check the plan to see if their physician or their kids’ pediatricians are on the list of providers. Health plans make changes every year, so it’s important to check.

Getting the financial balance right — Many people end up spending more up-front on higher premiums in exchange for lower out-of-pocket maximums and/or deductibles, when they shouldn’t.

A young, healthy person that rarely visits the doctor may be better off with a plan that has lower premiums and a higher deductible, which they will not likely reach.

Worst-case-scenario calculation — Your employees should understand the implications if they suffer a medical crisis. For a full perspective, they can:

  • Calculate the total premium they will pay for the entire year (their monthly premium contribution x 12), and add
  • The out-of-pocket maximum for the plan.

Are Your Benefits Enough to See Employees Through a Crisis?

Middle class families — those with incomes of between roughly $50,000 and $100,000 per year — are becoming increasingly reliant on workplace benefits to ensure their financial well-being in case of a disability or critical illness.

Simple health insurance is insufficient to carry the load. The loss of a breadwinner’s or caregiver’s financial contribution through death or disability is often devastating.

A recent survey by benefits provider Guardian indicates that families in this category are struggling when it comes to achieving their financial goals. Of those workers surveyed only half believe they would be able to manage if the household lost an income due to death or illness.

Workplace benefits are critical 

According to Guardian’s researchers, the middle-market population is overwhelmingly reliant on the quality and breadth of the benefits they receive at work — over and above cash compensation.

Over 80% of middle-market respondents report that they got their health insurance, disability insurance and retirement plan all through their employer.

Meanwhile, six in 10 have no life insurance in place outside of the workplace. This means that the solid majority of working families are relying entirely on workplace benefits to see them through the death of a family breadwinner.

And in the event of disability ending a breadwinner’s income, the situation is even more dire: Only 7% of the middle market owns any kind of disability insurance protection, outside of what they are able to access via their employer.

Are life insurance benefits adequate? 

For young families, the primary role of life insurance is to replace the income of a deceased breadwinner. But many employers cap life insurance benefits at $50,000 — the maximum figure that allows employers to deduct premiums as a workplace benefit under IRC 7702.

The actual need for many of these families is several hundred thousand to a million dollars, and occasionally more. That’s what it takes to replace the income of a worker who earns $50,000 to $100,000 per year until the children are out of college and a surviving spouse is taken care of.

A solution

One solution is to offer voluntary benefits to workers. These include a menu of benefits, such as:

  • Group life insurance
  • Group disability insurance
  • Long-term care insurance
  • Critical illness coverage

Often many of these benefits can be offered at little or no cost to the employer.

Premium costs are simply deducted from the worker’s wages and forwarded to the insurance company via payroll deduction. In this way, workers can purchase much more coverage and provide protection for their families — and it doesn’t cost the employer a dime.

In some instances, it can even save on payroll taxes. To learn more, call us. 

Your Last-Minute Open Enrollment Checklist

By now you should be prepared and ready to go for your  2025 policy year employee benefits open enrollment. You should have all your plan documents and have prepared or held presentations for your staff to explain the benefits package and any major changes to plans that you offer.

Employees should be familiar with how to use the enrollment portal and who they should talk to if they have questions.

To ensure success, there are a few things you should do to make sure you maximize enrollment, that your employees have the correct materials and that you are in compliance with the law.

Take an active role — Most of the policy selection is done online, but that doesn’t mean you can’t support your employees and let them know you are there in case they have any questions or are confused about any aspect of the benefits package.

You should want all of your employees to choose the package that best fits their individual needs. To ensure they make the best possible choices and have a successful experience, motivate them to take an active role in their education by encouraging questions and showing them where they can find answers in the online enrollment platform.

Last-minute blasts — You’ve probably sent a few e-mail reminders to you staff, but most certainly some of them still missed those communications. Make sure you send a few extra blasts at different times of the week, like Tuesday at 10 a.m. and another on Thursday at 2 p.m.

You should also have all of your employees’ mobile phone numbers, and be sending them reminder text messages is a sure-fire way to get in front of the ones who may not be as diligent about monitoring their e-mail.

Double-check your plan materials — Do a final review of your plan documents for any necessary updates regarding member eligibility, plan benefits, new vendors and name changes to ensure that the current state of your benefits offerings is complete and accurate.

Also, do a final review of your summary of benefits and coverage (SBC) and your summary plan description (SPD) to make sure they reflect any changes from the prior year. This is crucial as both documents are required under the law.

The SPD may include the elements necessary to meet the requirements of the SBC, but it also needs to be a separate document that can be handed out with respect to each coverage option made available to the participants.

To account for the annual open enrollment window, double-check your open enrollment schedule, deadlines, documents and forms, coverage options and changes, phone numbers, and website and mobile information for contacting resources, statement of current coverage, and plan-specific summaries and rates.

Identify staff that didn’t enroll last year — To make sure you maximize participation and that nobody misses out, run a list of all your staff who didn’t sign up for benefits last year so you can approach them individually and convey the importance of securing health coverage.

While you’re at it, make sure that all of your new hires in the past year have also signed up for coverage and that you didn’t miss them when sending out reminders about open enrollment.

Check compliance with ACA — If you are an “applicable large employer” under the Affordable Care Act, meaning that you have more than 50 full-time or full-time equivalent employees, you are obligated under the law to provide health coverage to your staff that is “affordable” and covers 10 essential benefits.

There is a figure for what is considered affordable, which changes every year. For your plan to be considered ACA-compliant in 2025, it must not cost an employee more than 9.02% of their household income. 

The takeaway

To ensure maximum enrollment it pays to plan ahead and also focus on educating your staff about the importance of their group health plan and why it’s so important to choose a plan that is right for them and that is within their budget in terms of premium-sharing and out-of-pocket costs.

The key regular communications and having an open-door policy so individual employees can ask questions in private.

3 in 4 Workers Would Accept Lower-Pay for Better Benefits: Survey

A new study has found three out of four U.S. workers would accept a job with a slightly lower salary if it offered better health care and medical coverage.

The main driver in workers prioritizing benefits is the rapidly rising cost of group health insurance premiums and out-of-pocket costs, according to the study by Voya Financial.

Besides looking for better health coverage, there’s growing interest among employees for voluntary benefits that can buffer health care costs, like critical illness, accident and dental and vision insurance.

As we approach open enrollment season for policies incepting at the start of the year, the study findings provide food for thought as you try to balance your benefit offerings with employee salaries.

The general theme of the poll was that health insurance and out-of-pocket costs like copays, coinsurance and deductibles are having a real effect on many workers’ finances, and in particular, their ability to save for retirement.

Consider the following:

  • 72% of workers surveyed strongly or somewhat agreed they would take a job with a slightly lower salary for better health care and medical coverage, including lower premiums and out-of-pocket costs.
  • 51% said that high health care costs were having a major or significant impact on their ability to save for retirement.
  • 51% said they would be more likely to stay with their current employer if it provided access to a health savings account (HSA).
  • 51% said they would be more likely to stay with their employer if it provided access to voluntary benefit offerings, and
  • 54% said they would be more likely to stay with their employer if it provided access to mental health benefits and resources.

The above bullet points have one theme in common: reducing the employees’ premium and out-of-pocket outlays.

The takeaway

As open enrollment approaches, consider holding information sessions to help your staff understand the true value the benefits you offer can provide.

Voya Financial found that 75% of workers surveyed strongly or somewhat agreed they were interested in receiving support to maximize their workplace benefits dollars across their:

  • Health insurance,
  • HSAs,
  • Voluntary benefits, and
  • Retirement savings.

For example, “Many individuals may not realize that voluntary benefits can help lessen the financial impact of a covered event such as an illness or accident and can potentially reduce the need to tap into a retirement account for any out-of-pocket medical or other expenses,” said Christin Kuretich, vice president of supplemental products at Voya Financial.

With that in mind, offering benefits like critical illness or accident insurance can provide a safety net in case of one of these events hits one of your staff. 

To better explain benefits to your staff, providing training, individual guidance and literature that explains how best to maximize their benefits. Importantly, employees are increasingly interested in digital tools (like apps or websites) that can provide tools and advice to help them make decisions related to health care, workplace benefits and retirement.

Finally, HSAs can also reduce an employee’s total costs and also help lower their taxable income. HSAs are accounts to which workers contribute with pre-tax funds and then reimburse themselves for out-of-pocket medical costs. Those funds are also not taxed.

Reminder: Employers with 10 or More Staff Must File ACA Forms Online

With 2025 just a few months away, it’s important that small employers understand their group health insurance reporting obligations under the Affordable Care Act as they changed at the start of 2024.

Before 2024, only employers that sent out 250 or more Forms 1094-B/1095-B and 1094-C/1095-C were required to file them online with the IRS. But since early 2024 (and affecting the 2023 tax year), employers filing 10 or more ACA reporting forms have been required to file electronically.

It’s important that you understand your filing obligations to avoid fines that can quickly add up.

Here are the deadlines for 2025

Meeting the filing deadlines for Forms 1094-C and 1095-C is critical to complying with ACA requirements. Here are the deadlines for next year:

Jan. 31, 2025 — Employers must by this date have sent Form 1095-C to all of their full-time employees, who must supply the form to the IRS when they file their taxes.

Feb. 28 — This is the deadline to file Forms 1094-C and 1095-C by paper with the IRS for the few employers who are still eligible to do this.

March 31 — This is the deadline to file Forms 1094-C and 1095-C electronically with the IRS.

Filing electronically

You can file your forms electronically on the ACA Information Returns (AIR) Program, which is run by the IRS. This page includes all of the resources and guidance you need to understand and use it.

Hardship waivers

Employers can request a waiver for filing electronically if they can prove that doing so will cause an undue hardship on them or if it goes against their religious beliefs. Employers must submit their waiver request at least 45 days prior to the due date for returns by using this form.

Penalties

Employers who offer their workers health insurance and who fail to file the ACA forms electronically despite being required to do so (and if they don’t have a waiver) can be subject to a fine of $310 per return that was not reported electronically.

There are also other penalties regarding ACA reporting forms:

  • Failure to file correct information on a form: $310 per return for which the failure occurs. The maximum penalty an employer may incur under this penalty is nearly $3.8 million per calendar year.
  • Failure to provide a correct information return or payee statement: $310 per return for which the failure occurs. The maximum penalty that may be incurred is nearly $3.8 million per calendar year.

ACA Group Health Plan Affordability Level Up Sharply

The IRS has significantly increased the group health plan affordability threshold — which is used to determine if an employer’s lowest-premium health plan complies with the Affordable Care Act rules — for plan years starting in 2025.

The threshold for next year has been set at 9.02% of an employee’s household income, up from 8.39% this year. The higher threshold will give employers a little more wiggle room when setting their workers’ premium cost-sharing level for their lowest-cost plans in 2025, to avoid running afoul of the ACA.

Under the ACA, “applicable large employers” — that is, those with 50 or more full-time or full-time equivalent employees (FTEs)— are required to offer at least one health plan to their workers that is considered “affordable” based on a percentage of the lowest-paid employee’s household income.

If an employer’s plan fails this test, it will be deemed as non-compliant with the law, resulting in hefty penalties for the employer.

The new threshold will apply to all health plans whenever they incept in 2025. The affordability test applies only to the portion of premiums for self-only coverage, and not for family coverage.

Also, if an employer offers multiple health plans, the affordability test applies only to the lowest-cost option that provides also minimum value (another ACA plan metric).

Calculating

Employers can rely on one or more safe harbors when determining if coverage is affordable:

  • The employee’s most recent W-2 wages, as reported in Box 1.
  • The employee’s rate of pay, which is the hourly wage rate multiplied by 130 hours per month (at the start of 2022).
  • The federal poverty level.

Employers with a large low-wage workforce might decide to utilize the federal poverty level ($15,060 for 2024) safe harbor to automatically meet the ACA affordability standard, which requires offering a medical plan option in 2025 that costs your full-time employees no more than $113.20 per month.

If an employee’s coverage is not affordable under at least one of the safe harbors and at least one FTE receives a premium tax credit for coverage they purchase on an ACA exchange, the employer may have to pay a penalty, known as the “employer shared responsibility payment.”

The shared responsibility payment for 2025 will be $4,350 per employee that receives a premium subsidy on an exchange, down from $4,460 this year.

The takeaway

As 2025 nears, you should review your health plan costs and premium-sharing to ensure that your lowest-cost plan complies with the affordability requirement.

We can help you assess affordability to ensure you don’t run afoul of the law. It will be particularly crucial in 2025, considering the significant change in the threshold.

How Your Staff Can Save on Childcare, Health Services

One of the most underused employee benefits available is the “cafeteria” plan ― which can benefit both the employer and the employee.

These plans allow workers to withhold a portion of their pre-tax salary to cover certain medical or childcare expenses. The benefits are free from federal and state income taxes, employees’ taxable income is reduced and that means that employers don’t have to pay FICA on those dollars.

Cafeteria plans enhance your employee benefits package while boosting your margins. They have three specific flexible benefits for your employees to choose from:

1. Pre-tax health insurance premium deductions

Premium-only plans allow your employees to elect to withhold a portion of their pre-tax salary to pay for their portion of the premium contribution to their employer-sponsored plan. The plan offers a simple way to reduce the cost of their benefits.

2. Flexible spending accounts

An FSA allows you to fund certain medical expenses on a pre-taxed basis through salary reductions to pay for out-of-pocket expenses that aren’t covered by insurance (think: deductibles, copayments, prescriptions, over-the-counter drugs and orthodontia).

Each paycheck, a certain amount is withheld pre-tax and put into an account. Employees pay for medical expenses up front out of pocket and then seek reimbursement from their FSA.

The average U.S. worker spends more than $1,000 every year on these types of benefits.

And there’s one more benefit: By participating in an FSA, your employees’ taxable income is reduced, which increases the percentage of pay they take home.

3. Dependent care FSAs

The dependent care FSA is an attractive benefit for employees who have to pay for childcare or long-term care for their parents.

Many employees don’t take advantage of this benefit and may be unaware of the significant tax savings. Employees may hold back as much as $5,000 annually of their pre-tax salary for dependent care expenses.

Qualified dependent care expenses include, but are not limited to:

  • The care of a child under the age of 13,
  • Long-term care for parents,
  • Care for a disabled spouse or a dependent incapable of caring for her- or himself, and
  • Summer day camps.

What you get out of it

Every dollar that goes through a cafeteria plan reduces your payroll by the same amount. That means you don’t have to pay FICA or workers’ comp premiums on that part of your workers’ salaries.

The savings can add up to as much as 20% of every dollar being passed through the plan.

It’s also a great recruitment tool and an essential part of a larger employee benefits package.

Balancing Cost Control and Quality Care: ScriptSourcing’s Approach for Self-Insured Brokers

Self-insured brokers face a tough challenge: helping clients control healthcare costs while maintaining quality care for employees. This balancing act is especially hard when it comes to prescription drugs, where prices keep going up fast. ScriptSourcing, started by CEO Gary Becker, offers a smart solution to this problem.

Key Programs

ScriptSourcing combines several important programs to help employers cut Rx costs and risks without reducing benefits:

International Pharmacy Management: This program lets employers buy certain medications, especially expensive specialty drugs, from carefully chosen Tier-1 countries at much lower prices. The savings can be big, often 50-75% less than U.S. prices.

Comprehensive Services: ScriptSourcing does more than just find cheaper drugs. They offer a full set of services to improve pharmacy benefits:

  • Employee education
  • Finding savings opportunities
  • Helping employees with insurance and pharmacy issues
  • Ongoing cost and use tracking

Benefits for Self-Insured Brokers

Partnering with ScriptSourcing can help brokers in several ways:

  • Offer clients a proven way to control Rx costs
  • Help employees get affordable medications
  • Show innovative thinking and added value
  • Build stronger client relationships through real cost savings

A Holistic Approach

By looking at the whole picture, ScriptSourcing helps brokers tackle one of the biggest issues for self-insured employers today. Their approach allows for big cost savings while making sure employees can still get the medications they need. This strikes that crucial balance between controlling costs and providing quality care.

As healthcare keeps changing, brokers who can offer these kinds of complete solutions will be in a good position to help their clients manage self-funded health plans.

Get an Early Start on Open Enrollment

As open enrollment is right around the corner, now is the time to make a plan to maximize employee enrollment and help your staff select the health plans that best suit them.

You’ll also need to make sure that you comply with the Affordable Care Act if it applies to your organization, as well as other laws and regulations.

Here are some pointers to make open enrollment fruitful for both your staff and your organization.

Review what you did last year

Review the results of last year’s enrollment efforts to make sure the process and the perks remain relevant and useful to workers.

Were the various approaches and communication channels you used effective, and did you receive any feedback about the process, either good or bad?

Start early with notifications

You should give your employees at least a month’s notice before open enrollment, and provide them with the materials they will need to make an informed decision.

This includes the various health plans that you are offering your staff for next year.

Encourage them to read the information and come to your human resources point person with questions.

Help in sorting through plans

You should be able to help them figure out which plan features fit their needs, and how much the plans will cost them out of their paycheck. Use technology to your advantage, particularly any registration portal that your plan provider offers. Provide a single landing page for all enrollment applications.

Also, hold meetings on the plans and put notices in your staff’s paycheck envelopes.

Plan materials

Communicate to your staff any changes to a health plan’s benefits for the next plan year through an updated summary plan description or a summary of material modifications.

Confirm that their open enrollment materials contain certain required participant notices, when applicable – such as the summary of benefits and coverage.

Check grandfathered status

A grandfathered plan is one that was in existence when the ACA was enacted on March 23, 2010, and is thus exempt from some of the law’s requirements.

If you have a grandfathered plan, talk to us to confirm whether it will maintain its grandfathered status for the next plan year. If it is, you must notify your employees of the plan status. If it’s not, you need to confirm with us that your plan comports with the ACA in terms of benefits offered.

ACA affordability standard

Under the ACA’s employer shared responsibility rules, applicable large employers must offer “affordable” plans, based on a percentage of the employee’s household income. For plan years that begin on or after Jan. 1 of next year, the affordability percentage is 9.86% of household income. At least one of your plans must meet this threshold.

Get spouses involved

Benefits enrollment is a family affair, so getting spouses involved is critical. You should encourage your employees to share the health plan information with their spouses, so they can make informed decisions on their health insurance together.

Also, encourage any spouses who have questions to schedule an appointment to get questions answered.

Employers Use Variety of Strategies to Provide Competitive and Cost-Effective Health Care Benefits

As they wrestle with providing attractive but affordable health care benefits for employees, employers are trying a variety of strategies. A recent report from insurance brokerage Gallagher shows businesses are balancing workers’ physical and emotional health against ever-rising costs.

There are many cost drivers in health care and insurers and employers are in a fine balancing act of trying to keep a lid on costs and also keeping their employees happy. And while firms are leaving no stone unturned in their quest for reducing costs, some are also adding new services employees are keen on.

Here’s what the report found:

Offering more plans

To combat rising costs, many employers (80%) offer more than one health plan. A growing share of employers offer high-deductible health plans (HDHPs) and health savings accounts (HSAs) to employees. The percentage of companies offering such plans has increased five consecutive years and is now at 56%. At the same time, 24% of employers report more employees choosing HDHPs than the other offered plans.

Employers and employees contribute to the HSAs. When employers contribute, they provide about $500 or more for single coverage and $2,000 or more for family coverage.

Weight-loss drugs

Weight-loss drugs such as Ozempic and Wegovy are growing in popularity. However, these drugs (known as GLP-1s) are expensive, and employers are trying to manage the effects of those costs.

Slightly more than half of employers surveyed include weight management in their benefits programs, but they attach strings to the use of weight-loss medications. This may include:

  • Step therapy, which entails trying other, less expensive yet proven pharmaceuticals and health and fitness regimens first.
  • Prior authorization before approving their use.
  • Eligibility requirements. Around one-fifth of employers set eligibility requirements that include a combination of minimum body mass index and comorbid conditions. They do not pay for the drugs for otherwise healthy employees looking to drop a few pounds.

Plan eligibility and scope

Despite rising costs, some employers are expanding eligibility for and the scope of their health care plans.

The Gallagher report shows a small increase in the share of employers offering coverage to employees’ domestic partners and to part-time employees, though these remain the minority.

Some are also offering more specialty coverages. For example, more than half cover hearing aids and behavior analysis for employees’ children with autism. A small but growing fraction (17%) cover gene therapy.

Almost half of employers cover some form of treatment for infertility, including drugs, specialist evaluations, in vitro fertilization and other fertilization procedures. However, controversies surrounding some of these procedures have led to a patchwork of state mandates and restrictions. This has made providing these benefits more complex for companies.

Mental health and leave

More employers are paying attention to their employees’ mental and emotional states in addition to physical wellness. Most are concerned about staff suffering from burnout and stress.

However, they also believe their managers are not able to recognize the signs. More than a fifth now offer training to managers and human resources staff on identifying warning signs and referring employees for help, and that share has grown in the past two years.

Finally, more firms are offering family-focused leave policies. This recognizes the growing emphasis employees place on work-life balance amid tight labor markets.

Almost 90% offer paid bereavement leave (outside vacation leave,) while almost half provide paid time off to bond with a new child, and 15% provide it for taking care of ill or disabled family members.

The takeaway

Employers are faced with two difficult realities. The workforce is aging, meaning that retirements will shrink the pool of available skilled workers. At the same time, health care costs are ever-increasing.

To meet both these challenges, employers are using the strategies detailed above, as well as other approaches. Some combination of them will help you compete in the war for talent while protecting your bottom line.

© 2023 ScriptSourcing LLC  |  Privacy Policy  |  Terms  |  Careers