Understanding the New ARPA COBRA Subsidy

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On March 11, 2021, President Biden signed the American Rescue Plan Act (ARPA) into law. This law includes provisions that impact employers. Most notably, it includes a new COBRA subsidy. Employers should learn all they can about this subsidy and how it might affect their business.

ARPA Requires Employers to Cover the Costs of COBRA Continuation Coverage

For a limited period of time, the ARPA requires employers to cover 100% of the employer’s cost of continuing group health coverage under COBRA for up to six months following the loss of coverage by an employee or former employee. This new law covers any employee that elects COBRA continuation following the involuntary reduction of hours or involuntary termination for reasons other than gross misconduct. Under the ARPA, eligible individuals also get a second chance to elect COBRA coverage or renew their coverage after allowing it to lapse.

COBRA beneficiaries receiving coverage on April 1, 2021 are automatically covered by the subsidy. Under the new law, employers must inform previous employees that did not initially elect COBRA coverage as well as those that allowed their coverage to lapse of the special enrollment period that begins on April 1, 2021. This enrollment period ends 60 days after the employer provides notification to potential beneficiaries.

Notifying Potential Beneficiaries

ARPA will require employers to identify and notify individuals eligible for coverage by May 30, 2021.  In addition to identifying and notifying eligible beneficiaries, employers must also update termination documentation to include information about the COBRA subsidy and the special enrollment period.

Who’s Eligible?

Eligible individuals include those whose initial COBRA period ended or would have ended between April 1, 2021 and September 30, 2021 or later.  It’s important to note that the ARPA COBRA subsidy does not increase the COBRA period. If an employee’s COBRA coverage begins after April 1, 2021 or ends before September 30, 2021, the ARPA subsidy will remain in effect for less than six months. It’s also worth mentioning that individuals that qualify for coverage under another employer’s health plan or Medicare do not qualify for the ARPA COBRA subsidy.

Although the federal government provides the ARPA COBRA subsidy, employers must pay any premiums owed to their COBRA provider or plan administrator. Eligible employers will receive a dollar-for-dollar tax credit on their quarterly tax filing.

The ARPA COBRA subsidy applies to insured and self-insured plans subject to COBRA. It also applies to self-funded and insured plans subject to continuation coverage under state law.

COBRA Coverage

Previously, employers could require an electing employee to pay the employee’s share and the employer’s share plus a 2% administrative fee to continue group coverage under COBRA. While COBRA coverage often costs more than switching health plans, many employees elect COBRA continuation over searching for a new health plan that might not offer the same coverage or options.

MEBO offers employee benefit plans customized to meet the needs of organizations today. Please contact us for more information about our services or to schedule a consultation.

 

 

 

Should Employers Offer Benefits to Gig Workers?

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COVID-19 has changed the way many of us live and work. Throughout the past year, unemployment rates have skyrocketed. Caused by forced closures and stay-at-home-orders, several businesses around the U.S. have had to reduce staff or permanently close their doors. According to the Department of Labor, over 48 million Americans applied for Unemployment Insurance within the past year. Many unemployed workers turn to gig jobs to make ends meet.

What Are Gig Workers?

Gig workers include independent contractors, freelancers, contract firm workers, temporary workers, and online platform workers. These workers may enter into contracts with companies to provide services on an as-needed basis. It’s estimated that as many as ten percent or more U.S. workers take advantage of some form of alternative work.

Health Benefits Provide Peace of Mind and Financial Protection

As an increasing number of U.S. businesses turn to independent contractors to assist with projects on a temporary basis, many have considered the possibility of offering these workers benefits. For gig workers that perform potentially life-threatening tasks during the pandemic like ride-sharing and other jobs that put them in direct contact with strangers, health benefits can provide peace of mind and may increase worker interest in these types of jobs.

Employers that utilize independent contractors on a regular basis might want to consider offering some form of benefits. Although it’s important to note that employers don’t have to offer the same types of benefits that they offer their full-time employees. For example, many employers do not allow gig workers to participate in a 401K plan, but will provide them access to healthcare coverage. These employers allow gig workers to pay monthly premiums to participate in the company’s group health plan. These types of plans generally cost significantly less than individual health plans.

Employers that decide to offer benefits to gig workers should ensure their workers aren’t receiving benefits from a temp agency or other party. It’s also important that employers avoid working with temp agencies that pass the cost of benefits to the employer. If the temp agency offers benefits, it is their responsibility to pay for these benefits for their workers.

Other Benefits

Although health insurance tops the list of preferred benefits, many companies choose to reward gig workers with bonuses. Offering bonuses for working during difficult hours or putting in extra effort shows workers they’re appreciated. It can also make them more willing to continue working for the company.

While offering benefits to gig workers can provide significant benefits, it’s important that employers weigh the risk as well. Providing gig workers with the same benefits as regular employees may make it difficult for organizations to attract workers to permanent roles within the company.

Employers have many factors to consider when selecting benefits for their workers. MEBO works directly with employers to evaluate their needs and develop a comprehensive solution, tailored to the organization’s budget and objectives.

Please contact us to schedule a consultation.

Understanding Prescription Drug Pricing Trends

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Employers often find it difficult to manage their healthcare expenses. Unfortunately, fluctuating prescription drug prices can make this process even more complicated.

According to Statista, Americans spent 358.7 billion dollars on prescription drugs in 2020. This was an increase of 13 billion dollars from the previous year. Prescription drug spending makes up 10% of national healthcare costs. Although this number seems relatively low, prescription drug spending has increased rapidly in recent years. This makes prescription drug spending an important factor for employers to consider when deciding on their employee health plan.

Specialty Drugs

Rising specialty drug prices remain one of the biggest drivers of prescription drug spending. These high-cost oral or injectable medications are used to treat a variety of complex chronic conditions. The average annual cost of treatment using specialty prescription drugs totaled $78,871 per drug, per year in 2017.

Although specialty drugs make up a smaller portion of prescriptions, this may change in coming years. Around 66% of the drugs approved by the FDA in 2019 were specialty drugs. It seems that these drugs may soon replace lower-cost therapies for many conditions.

Price Increases

In 2020, drug makers increased prices by approximately 5% on more than 860 drugs. In January 2021, several drug makers announced they would raise prices on over 300 drugs in the United States. These increases occurred as drug makers struggle to remain profitable throughout the COVID-19 pandemic. Over the past year, people have limited their visits to the doctor, causing a decrease in demand for certain drugs.

Unfilled Prescriptions

According to the Journal of General Internal Medicine, as many as 31% of prescriptions go unfilled each year. This is bad news for employers, as employees that do not take the advice of their physician could experience more serious and costly problems in the future.

According to OptimizeRx, 73% of physicians base their prescribing decisions on the out-of-pocket cost of prescription drugs. An astounding 70% of physicians believe the high cost of prescription drugs leads to unfilled prescriptions. It’s not surprising that patients are less likely to fill prescriptions with a high co-pay.

What Can Employers Do to Control Prescription Drug Spending?

Rising prescription drug costs may lead to sticker shock for both employees and their employers. Fortunately, there are a few things employers can do to manage their healthcare spending.

Employers need to educate employees about their health insurance coverage, prescription options, and best practices. This not only helps reduce healthcare costs, but also helps employees better understand their health benefits and coverage.

Employers worried about rising prescription costs may also want to consider other health plan options. Switching to a level-funded health plan can help keep prescription drug costs in check, while ensuring adequate coverage for employees. However, it’s important that employers fully evaluate their needs before switching their employee health plan. Employers could benefit from contacting an experienced employee benefit specialist.

 

 

 

 

 

 

 

Tips for Selecting the Right Employee Benefits Broker

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Companies spend a lot of money on employee benefits. A recent report released by the U.S. Bureau of Labor Statistics found that benefits accounted for 29.8 percent of employer costs. While most employers understand the importance of offering benefits, many aren’t sure how to go about finding the best options for their business. Unfortunately, employers might not know they have multiple choices when it comes to choosing their health plan. These employers could benefit from speaking with an experienced employee benefits broker.

Look for an Experienced Benefits Broker

When it comes to choosing the right employee benefits specialist, it’s important that employers look for a benefits broker with years of experience. The benefits broker should have the resources and know-how to customize employee health plans to meet the needs and goals of each organization they work with.

Employers should avoid partnering with a benefits broker that simply shops around for the best price. While the plan might look good on paper, it’s not uncommon for employers to find they have little to no visibility or control over how their healthcare dollars get spent. This can create serious problems for the employer. Without complete transparency, employers cannot properly manage their healthcare costs.

Coverage & Support for Employees

Serious illness and accidents can occur at any time. These life changing events often happen when we least expect them. The right employee health plan not only helps employers manage healthcare spending, it protects the health and well-being of employees and their families.

With so much at stake, it’s crucial that employers take their time locating a qualified benefits broker. The right broker will ensure employees not only have all of the coverage they need in a major event, but the resources and support they need as well.

Specialties

Most employers find the process of selecting a benefits package confusing. It’s important that employers locate a broker with experience in multiple areas. This is the best way to ensure the most comprehensive plan.

Excellent Customer Service

The right benefit specialist becomes a trusted partner of the business. They do much more than just help employers locate the right benefit plan for their business. They work as an extension of their HR team. Excellent benefits brokers help employers better understand their health plan and educate their employees.

Employee Benefits Specialists in California

MEBO works directly with organizations to analyze their needs and develop a comprehensive benefits plan. Our staff has years of experience assisting employers in a wide range of industries. Our solutions help employers increase transparency and reduce financial risk. Please contact us for more information or to schedule a consultation with one of our benefits specialists. We look forward to hearing from you.

 

 

 

How Employers Can Support Employees Working from Home

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According to Upwork, an American freelancing platform, 41.8% of the American workforce currently works from home. It’s estimated that around 26.7% of these remote workers will not return to the office this year. By 2025, it’s expected that 36.2 million Americans, or 22% of the entire American workforce will be working from home. This represents an 87% increase in the number of remote workers since before the pandemic.

Although working from home provides a convenient option for many employees, it creates challenges as well. Employees working from home can feel disconnected from the workplace. It’s crucial that employers do all they can to keep company culture alive and support employees working from home. This not only benefits the employee, but the organization as a whole. When employees feel supported and connected to company culture, they become more productive.

Flexible Hours

Many employees find it difficult to balance their work and personal life when working from home. Allowing employees to set their own hours puts them in control. Offering flexible hours allows employees to make the most of their day and work around other schedules. This soft benefit costs employers absolutely nothing but provides significant benefits.

Face-to-Face Time

Employees are happier at their jobs when they get along well with their co-workers. A study conducted by Gallup, an American analytics and advisory firm, found that work friendships boost employee satisfaction by as much as 50%. Another study found that women that have a best friend at work are 63% more likely to engage fully in their work.

While many employers understand the importance of friendships and comradery in the workplace, working from home doesn’t create the type of environment where employees can foster friendships. Employers can encourage employees to stay connected through regular face-to-face meetings in-person or over video conferencing software. To ensure the best results, employers need to keep these sessions purely social.

Health Insurance Benefits

Many employees worry about paying for medical expenses for themselves and their loved ones. This is especially true now, as COVID-19 continues to threaten the health and safety of Americans. Offering employees health insurance benefits ensures employees receive the care they need. This can reduce stress and make employees more satisfied with their job.

Lifestyle Benefits

In addition to health benefits, many employers have started offering lifestyle benefits to remote workers as well. Popular benefits include gym memberships, fitness-related expense reimbursements, education, and childcare. Employers often choose to provide a monthly allowance for employees to use to pay for certain expenses.

Employee Benefits Specialists

Employers have a lot to consider when deciding how best to support their employees. MEBO works directly with employers to help them develop a comprehensive employee benefits plan that fits their needs and budget. Please contact us to schedule a consultation.

 

 

 

What’s the Real Cost of Your Benefit Plan?

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Businesses spend a lot of money each year. While business owners have transparency of what they spend on goods and services, this isn’t typically true for healthcare. This is a problem as healthcare represents the second largest expense after payroll for most U.S. businesses. Another issue, most leaders have very little say when it comes to negotiating their employee benefit plan. This can lead to overspending with little understanding as to why.

Understanding the Real Price of Employee Healthcare

Leaders have many factors to consider when it comes to figuring out the true cost of their health plan. Although many insurance carriers would like employers to believe their annual bundled lump sum premiums make up the total cost of their health plan, there’s more that goes into figuring out this total. Employee health plans are made up of several different components. Each component has its own cost.

The components of an employee health plan include:

  • Medical claims
  • Pharmacy claims
  • Administration costs
  • Advisor commissions and fees

For years, insurance carriers have told employers that it’s difficult, if not impossible to control the total cost of their healthcare plan. This benefits no one but the insurance carrier.  Unfortunately, employers get very little information regarding what they pay for each component of their healthcare plan.

In 2018, a survey conducted by the National Alliance of Healthcare Purchaser Coalitions (National Alliance) found that 60% of employers estimate that up to 25% of their employee healthcare spending was wasted. Unfortunately, without transparency into healthcare spending, employers can only guess how much money gets wasted each year.

Employers Need Greater Transparency Into Their Healthcare Spending

At MEBO, we believe employers should have complete transparency of the costs of their healthcare plan. Employers shouldn’t blindly accept increases each year without knowing where they spend their dollars and why. Without this information, employers can’t plan budgets or understand how they spend their healthcare dollars.

In order to increase transparency and control over healthcare spend, employers could benefit from changing their approach to purchasing healthcare. All key components must be unbundled and a total cost provided for each area. This allows leaders to fully analyze what areas drive their healthcare costs. They can then use this information to develop a comprehensive plan based on what their employees actually need.

Using a level-funded approach, employers gain visibility, predictability, and greater financial protection over their healthcare spending. However, this approach may not be the best choice for every company. It’s important that employers speak with an experienced employee benefit specialist before deciding on or switching their health plan.

MEBO works directly with employers to evaluate their needs and develop a comprehensive solution custom-tailored to their requirements. Our process puts employers in the lead. This reduces costs and ensures complete transparency. Please contact us to schedule a consultation.

 

The IRS Has Extended Certain ACA Reporting Deadlines – Here’s What It Means For Your Business

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Every year, employers around the country must file Forms 1095-B and 1095-C with the IRS and send copies to their employees. Part of the Patient Protection and Affordable Care Act (PPACA), sometimes referred to as the ACA or Obamacare, employers with 50 or more full-time or full-time equivalent (FTE) employees and all self-insured employers must use these forms to report employee healthcare coverage information to the IRS.

Form 1095 Distribution Deadline Extended

Applicable Large Employers (ALEs) must provide full-time workers with minimum essential coverage. By filling out forms 1095-C and 1095-B employers prove they offer acceptable coverage as required under the ACA.

Previously, the deadline for providing employees with a copy of their 1095-C or 1095-B was January 31st. Last October, the IRS announced it would extend the deadline to March 2nd, 2021. While the IRS extended the date for providing employees with 1095 forms, eligible businesses must still file these forms with the IRS by February 28th for paper filing and March 31st for electronic filing.

The IRS also extended “good faith effort” transition relief to employers for 2020 reporting. This means that the IRS will not impose penalties on companies that show they made good-faith efforts to comply with the information reporting requirements. This only applies to employers that submit incorrect or incomplete information. It does not apply to employers that fail to submit the required information on time. It’s important to note that this relief is transitional, meaning the IRS does no intend to offer it in future years.

Are You Prepared?

Even with the extended deadlines, employers may want to start gathering the information needed to complete, distribute, and file their returns sooner than later. It can take time to gather the appropriate paperwork and information, and companies that do not meet the deadline will face penalties.

As COVID-19 continues to spread throughout much of the country, employers need to think carefully about how they will distribute 1095 forms this year. Although many companies are operating remotely, sending these forms via email is only allowed if employees consent in advance.

MEBO offers employee benefits to small businesses, ALEs, and large corporations. We work directly with our clients to evaluate their needs and develop a comprehensive benefits plan that fits their budget. Please contact us for information about our services or to schedule a consultation.

 

Reduce Stress in the Workplace

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Most people experience stress at work at some point in their career. While some stress can be beneficial, possibly improving performance and health, too much stress can decrease productivity and cause anxiety and health problems. It’s important that employers encourage employees to communicate issues and take necessary steps to keep their stress level in check.

De-Stress the Environment

Adding personal touches like photos of loved ones, plants, or décor to a workspace can help relieve stress. When employees customize their workspace, they tend to feel more established in the office. This can boost morale and improve overall mood and well-being.

Encourage Breaks

Sometimes all it takes is a little break from work to start feeling better about things. Encouraging employees to get up and walk around every few hours not only reduces stress; it helps employees gain focus and energy.

Create a Space Where Employees Can Recharge

Create a breakroom where employees actually want to spend their free time. Add books, puzzles, comfortable seating, and snacks. Try to keep the space as quiet and relaxing as possible. This will give employees a chance to relax and recharge before going back to work. This might be just the mental break they need.

Choose Tea Over Coffee

Although most workers associate coffee with energy, drinking tea can have a much more positive effect on both mood and health. Offer a selection of different options. This helps ensure you have something for every team member.

Encourage Exercise

Many employers offer wellness programs that include on-site fitness centers, yoga classes or other exercise options. Regular exercise reduces stress and improves mood. Even simple breathing exercises can have a positive impact on employee well-being.

Stress & Physical Health

Stress impacts all areas of our lives. In addition to emotions and behaviors, stress can affect physical health as well. Long-term stress can cause serious mental health problems like depression, anxiety, and personality disorders. It can also cause serious health conditions like heart disease, high blood pressure, heart attacks, and stroke. Workers that experience high levels of stress are less productive and may take more time off work. It benefits everyone in the workplace when employers focus on stress management.

MEBO offers employee benefits to organizations throughout California. We are committed to helping employers get the most out of their benefits package. Please contact us to set-up a consultation with an employee benefit specialist.

What Are the Most Important Benefits to Employees?

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The right benefits package can help employers attract more candidates. Companies that offer benefits experience lower employee turnover, have healthier and happier employees, and get to take advantage of tax credits and deductions. While large organizations can offer comprehensive benefits packages, smaller companies and start-ups have to be more selective. When choosing which benefits to offer, these companies could benefit from learning which are most important to employees.

2020’s Most Sought-After Employee Benefits

2020 was a strange year. As we get further into 2021, it doesn’t seem that much has changed as far as what employees want. The following were the most sought-after employee benefits in 2020:

Remote Work

Stay at home orders forced many employees to make the switch to working from home. Although this seemed like a novelty at first, employers and employees have discovered this option provides significant benefits. Remote work reduces operational costs. Another benefit, remote work completely eliminates barriers caused by physical location. Remote work allows employers to expand their talent pool to any location in the world. For employees, remote work improves work-life balance, health, and eliminates the stress associated with commuting to work.

Although it’s not clear whether remote work will become permanent for most companies, it’s definitely become more common, and not just during the pandemic. 69% of companies surveyed by Miro have at least one team member working remotely. Of these remote employees, 70% have been working remotely for over three years.

Health Insurance Benefits

Although employees have always rated health insurance benefits highly, they’ve never been quite as important as during the pandemic. Many people worry about affording healthcare for themselves or their loved ones. Offering health insurance benefits reduces employee stress and improves employee satisfaction.

According to a study by Employee Benefit Research Institute, around 7.7 million workers lost jobs with employer-sponsored health insurance last year. These employees are currently looking for work. Employers wishing to attract and retain top talent need to offer a good benefits package.

Paid Time Off

Everyone needs a break from work sometimes. Even remote workers agree that paid time off is important. By offering employees paid time off, employers show they care about their employee’s well-being and the future of their business.

Employee Benefit Specialists

At MEBO, we understand that many California small businesses worry about the costs associated with employee benefits. We work with our clients to evaluate their needs and develop a benefits package that fits their budget and provides the greatest benefits to both their team and their business. Please contact us to schedule a consultation.

Can Employers Make the COVID-19 Vaccine Mandatory?

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Throughout 2020, COVID-19 caused major changes to the way that people go about their daily lives. For employers, COVID-19 has created major challenges. In addition to stay-at-home orders forcing employees to work from home, leave due to illness has become a recurring problem since returning to the office. In an effort to reduce the transmission of COVID-19, many employers wonder if they can make the COVID-19 vaccine mandatory.

Can Employers Require Vaccination?

Many employers already require employees to get their yearly flu vaccine. Schools and other organizations where employees are exposed to potentially vulnerable populations also require vaccines against measles, whooping cough, and other diseases. According to experts, employers can require employees to take safety measures to protect themselves and others. This includes vaccinations like the COVID-19 vaccine. However, requiring vaccination doesn’t necessarily mean employers can fire employees that refuse.

On December 16th, 2020, the Equal Employment Opportunity Commission (EEOC) provided answers regarding COVID-19 vaccination. Although employers can encourage or even require COVID-19 vaccination, their policies must comply with the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964 (Title VII) and other workplace laws.

What this means is that while employers can suggest or require vaccination, employees with religious objections or disabilities must be excluded or accommodated. In addition, employers may need to reach an agreement with unions before mandating vaccines with union-represented employees.

Increasing Access to Vaccines

As the number of COVID-19 cases fluctuates in California, many employers worry about the impact the virus will have on their workforce. Vaccination has the potential to reduce the number of sick days and health insurance spend companies incur. However, requiring vaccination might cause more problems than its worth.

Employers wishing to encourage employees to get the COVID-19 vaccine could benefit from removing all barriers that exist preventing vaccination. Taking effective measures to ensure employees have access to vaccination without incurring out-of-pocket expense can increase the number of employees willing to receive the vaccination.

Final Thoughts

It’s crucial that employers weigh their options before attempting to make vaccination mandatory. While patients do not have to pay for the COVID-19 vaccine, providers can still charge a fee for administering the vaccine. This fee is covered by most health insurance plans. Offering health insurance benefits to employees could increase the number of workers willing to receive the vaccine.

Employers interested in learning about available health insurance plans should speak with an experienced employee benefit specialist. MEBO works with organizations in California to develop benefit plans, customized to the needs and goals of each organization.  Please contact us for information about our services or to schedule a consultation.