Tuesday, April 8, 2014

Quote for the Day – The past cannot be changed. The future is yet in your power. Mary Pickford (Her Birthday)

Sunday, April 6, 2014

Payroll Deduction -- Now There's A Solution To The Hassle - Making Voluntary Plans and Services More Accessible!

Voluntary Benefits and Payroll Deduction - Over a period of thirty years working with Voluntary/Worksite Benefits, most of our experiences with Brokers and Employers have been positive and rewarding - Employees appreciated "Choice"! When discussing these plans and their almost flawless upside, there was always one downside - the necessity of Payroll Deduction! The paperwork has been an added burden for the Employers!

The Developing Marketplace - In the past several years, the number of Carrier/Providers - as well as types of insurance and non-insurance based Plans, Programs, and Services -  have increased dramatically.The utilization of Section 125 (pre-taxing) and Reimbursement Accounts has also been increasing.  Each new selection by an Employee - or change in status - creates new work for Owners/HR Departments in managing payroll.

In Recent Years - In part due to PPACA/Obamacare - Defined Contribution (DC) plan designs and the utilization of Private Exchanges have grown in popularity! With these opportunities the Employer's responsibility for accurate and timely payroll deductions have increased exponentially!

The time and cost of administering payroll deduction for Voluntary Benefits and new Plan Designs have deterred many Employers from making the Employee choices and designs available. Employers and Organizations have sighted the following concerns:

• Smaller Employers wanted to offer Voluntary Plans but did not want the hassle!
• Employers of all sizes were reluctant to offer multiple Carrier/Providers - as well as additional Plans - given the added work!
• The Defined Contribution plan designs that assist in budgeting the cost of Employee Benefits are soaring in popularity but have imposed greater stress to Payroll Administration.
• The new Private Exchanges seem to offer a viable opportunity but will generate more demand for payroll deductions.
• Associations, Credit Unions, Unions, Banks, etc. often wanted to offer the Plans, Programs, and Services to their constituencies but had no access to deducting from the Individual's paychecks!

A Solution - Our recent research uncovered a new methodology for eliminating the time, cost,
and hassle of Payroll Deduction while opening the door wide-open to offering Voluntary Plans, Program, and Services! New technology allows for Premium Direct Deposit (PDD). Quite simply, this is a secure, virtual bank account that belongs to the Employee from which the Premiums and Costs of Plans, Programs, and Services are paid directly to the Carriers.

To quote an article in the March edition Employee Benefit Advisor titled, The death of payroll deduction - " Instead of the employer reconciling the monthly list bill, deducting premiums each pay period and eventually sending those funds monthly to the carrier, PDD requires just a one-time setup by the employer for each employee buying WVB [Voluntary Worksite Benefits]".

It also should be noted that PDD is not a form of consolidated billing where all of the Employee's deductions are deposited in a single account. With PDD each Employee - or Individual Participant - has an individual FDIC-insured bank account created for the purpose of paying for Voluntary Plans, Programs, and/or Services.  All additions and changes are made directly by the Employee/Individual!

 Can You Imagine - The Employees or Organization Members can be directly tied to the Carrier/Providers without HR/Payroll caught in the middle! Some of the advantages:

• No more Payroll Slots
• No more Benefits Administration
• No more Bill Reconciliation
• No more File Feeds
• No more Renewals/Conversions
• And Many More Advantages

PDD offers Employers tremendous efficiency as well as time/cost savings with a measurable ROI! At the same time many new markets and doors are open for Carrier/Providers, Brokers and Consultants! Employers and Individuals can be provided more choices and control! It's a Win/Win/Win!

To date we have isolated one Company offering a patented, affordable PDD service. Click - For More Information or Call 216.577.5579. We welcome your input on other PDD providers!

Thursday, April 3, 2014

Quote for the Day – I don't care who does the electing, so long as I get to do the nominating. “Boss” Tweed (His Birthday)

Saturday, March 29, 2014

Self-Funded (Self-Insured) Health Plans - The Brokers and Employers Saving Grace?

Brokers and Employers Surviving "Disruptive Changes" -  In several of our recent articles, discussions and blogs we have been investigating methodologies to help Brokers and Employers survive the "Disruptive Changes" foist upon the U.S. Employee Benefits Marketplace in the past several years - mainly by PPACA/Obamacare.

Here's another - Brokers and Employers need to gain a thorough knowledge of Self-Funding (Self-Insuring), Stop-Loss Coverage, and the role of TPAs. The Broker - working with other advisors - needs to become the "Trusted Advisor" for the Employers and their Employees! 

Self-Funded Benefit Plans are a Risk Management Method in which calculated amounts of money are set aside to compensate for potential future claims (losses). A Self-Funded Health Plan is one in which the Employer assumes part or all of the risk for providing health care benefits to his Employees. The March 2014 issue of Rough Notes in an article titled "MEDICAL STOP LOSS" by Michael Moody notes "Self-funding employee benefits over time has become one of the most cost effective approaches to providing for employee health benefits".

With a self-funded plan the Employer takes control of the assets of his plan, invests to the organization's advantage, and eliminates the traditional Insurance Company's premiums and fees. When considering a self-funded plan the following should be taken into consideration:
          1). Self-funded plans are subject to Federal Regulations rather than State Regulations giving the Employer greater control over and flexibility with the plan.
          2). Using Brokers, Agents, and/or Consultants the Employer can design a plan, or set of plans, similar to a Traditional Fully-Funded Plan.
          3). If well communicated to the Employees, the Employer will be seen as the Benefit Provider creating an improved connection between the Employer and the Employees.
          4). With the Self-Funded Plan the Employer only pays benefits based on his Employee's histories and/or claims experience.
          5). The Employer retains control of his plan reserves maximizing interest income.
          6). The Employer does not pay state premium taxes - usually ranging from 2% to 3% of the monthly insurance premium.
          7) The impact of PPACA/Obamacare on self-funded plans has been minimal leaving the Employers with tremendous control and flexibility!

Stop Loss Coverage - In order to limit the potential risk (liabilities) to the Employer this element of Insurance is introduced. Most Employers purchase Stop-Loss Coverage (also called Excess Coverage) to minimize the impact of any large, catastrophic claims or excessive utilization by the Employees. The Rough Notes article mentioned above goes on to note "Most self-funded programs consider the acquisition of a well-designed stop loss program as a critical element to a successful , long-term operation". There are two main types of Stop-Loss Coverage:
           1). Aggregate Coverage - Insures against high claims incurred by the group as a whole above a certain dollar limit chosen by the Employer and agreed upon by the insurance carrier.
           2). Specific Coverage - Insures against a single catastrophic claim by an individual Employee that exceeds a dollar amount chosen by the Employer and agreed upon by the Insurance Carrier.

Choice of Plan Design - As with Traditional Health Insurance, the Employer has a choice of plans - including Tax-Advantaged Health plans like HSAs and HRAs. In addition, the Employer can include deductibles, co-pays,etc. as with Traditional Plans. Generally, the Group Medical Plan is the main focus of a Self-Funded Program. Other health related benefits are often included, such as dental, vision, prescription drugs, and short-term disability. Generally high risk, low frequency coverages, such as long-term disability; accidental death and dismemberment and life insurance are not included in the self-funded plan design.

Limiting Risk - An additional technique for substantially reducing risk and inherent claims (losses) is to implement a Wellness Plans and Employee Assistance Plans (EAPs). More and more statistical information is being generated by studies to show the ROI for implementing and maintaining these plans.

Administration of the Self-Funded Plan by Third Party Administrators (TPAs) - The Plan Administration is generally performed by a TPA. These organizations are specialists in claims management, compliance issues, and other day-to-day management functions inherent in self-funding. The TPA works with the Employer, Broker and Insurers/Carriers of Stop-Loss Coverage to design a plan to meet the needs of the Employer and Employees - on a near and longer term basis.

The Design, Implementation, and Management of a Self-Funded Plan requires the input and integration of Brokers/Consultants, TPAs, and Carriers combined with a well-planned  and implemented Employee Education, Communication and Enrollment Process.

For more information about what Brokers and Employers require to gain a thorough knowledge of Self-Funding, Stop-Loss Coverage, and the role of TPAs in the marketplace Email - max@benefitplace.biz or Call - 216.577.5579!.

Friday, March 28, 2014

Quote of the Day – “To increase the zone of peace is to build the inner core of a stable international zone” Zbigniew Brezinski (His Birthday)  

Thursday, March 27, 2014

Quote for the Day - “Means must be subsidiary to ends and to our desire for dignity and value.” Mies van der Rohe (His Birthday)  

Wednesday, March 26, 2014

Quote for the Day - “A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain” (Robert Frost – His Birthday)  


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