This document outlines 26 important employee benefits issues ("ABCs") that need attention in 2016, as summarized by Ed Bray. It discusses key actions and considerations regarding Affordable Care Act compliance and reporting, benefits strategies and costs, technology spending, same-sex marriage implications, and ensuring compliance with various other regulations. It emphasizes preparing for ongoing changes, communicating proactively with employees, and leveraging external support and wellness programs to help manage rising costs.

1. 30 February 2016 Employee Benefit News ebn.benefitnews.com
CONGRATULATIONS ON MAKING IT
through one of the most legally and
administratively challenging years in
employee benefits history. But, as you
know, employee benefits never sleep.
Here is the 2016 ABCs of employee
benefits — what I call the annual “just
tell me what I need to do” list.
ACA reporting aftermath. Ensure
you keep all the documentation sup-
porting the reporting decisions made
(e.g., employee benefits eligibility
coding, alternative reporting meth-
ods, transitional relief, control group
decisions, etc.) and profusely thank
everyone who helped you complete
this arduous task.
Benefits websites. Benefits in-
formation — good, bad, and ugly
— is everywhere you look. Here are
sources of credible information: ebn.
benefitnews.com, BenefitsLink and
government ACA websites such as
healthcare.gov and the DOL’s health-
care reform site.
Consider self-insurance. Ac-
cording to the 2015 PwC Health and
Well-being Touchstone Survey, 66%
of employers with 500-1,000 employ-
ees are self-insured, up from 59% in
2014. Perform a cost/benefit analysis
to determine if self-funding is right for
your organization. Don’t forget to cal-
culate the expected ACA fees (PCO-
RI and transitional reinsurance) and
“cost” of performing extra reporting
responsibilities.
Develop an annual compliance
calendar. Given multiple employee
benefit legal requirements, create an
annual compliance calendar so you
can keep track of what you must com-
ply with and when. Major require-
ments will fall in the following areas:
ERISA, ACA, COBRA, HIPAA, etc.
Execute appropriate benefit
strategies. Refocus on determining
strategies to control rising healthcare
costs. According to the 2015 Willis
Towers Watson/NBGH Best Practices
in Health Care Employer Survey, the
top priorities of employers’ healthcare
activities over the next three years in-
clude increasing focus on employee
well-being, including health, finan-
cial and workplace experience (96%);
evaluating health and pharmacy plan
design strategy (95%); and develop-
ing/enhancing a workplace culture
where employees are responsible for
their health (94%).
Familiarize yourself with ERI-
SA section 510. Lawsuits are already
being filed by employees alleging that
their employer reduced their hours to
keep them from having health insur-
ance coverage. To minimize your risk
and exposure, consult counsel before
taking any actions that will affect em-
ployee benefits eligibility.
Growing interest in benefits
technology. EBN’s second annual
technology survey indicates that 38%
of respondents plan to increase their
spending on employee benefits tech-
nology next year, with 44% having al-
ready increased their spending from
2014 to 2015. Much of that spending
is directed toward new employee por-
tals and front-end systems to better
integrate and utilize various benefits
functionalities (health, retirement,
voluntary benefits and more.)
Here comes HIPAA. The U.S.
Department of Health and Human
Services Office of Civil Rights has
announced a new phase of covered
entity and business associate audits
for compliance with the privacy and
security rules under HIPAA. If you
haven’t already, ensure that your or-
ganization is complying with the ap-
propriate HIPAA privacy and security
rules (policies and procedures, priva-
cy notice, training, etc.)
Impact of Supreme Court rul-
ing on same-sex marriage. The U.S.
COMMENTARY
The ABCs of employee benefits
BENEFITS MANAGEMENT
A look at 26 benefits issues you need to pay attention to in 2016
BY ED BRAY, J.D.

2. Employee Benefit News February 2016 31
Supreme Court ruled in Obergefell v.
Hodges that the Constitution guar-
antees same-sex couples the right to
marry. Consult legal counsel and your
health insurance carriers to discuss
any legal and business decisions as a
result of this ruling, including wheth-
er to offer domestic partner benefits
into the future.
Jury still out on private exchang-
es. According to the Deloitte Center
for Health Solutions 2015 Survey of
U.S. Employers, 30% of respondents
are interested in moving to a private
exchange and early adopters feel that
private exchanges make it easier to
offer a defined premium approach
(62%), simplify their company’s role
in benefits administration (60%), and
improve access to broader physician/
hospital networks (57%.)
Keep the Cadillac tax in mind.
According to the IFEBP 2015 Em-
ployer-Sponsored Health Care: ACA’s
Impact Survey, 34% of employers, up
from 24.5% in 2014, have started tak-
ing action to avoid triggering the Ca-
dillac tax. Actions include moving to
a CDHP (52.9%), reducing benefits
(36.9%), and adopting wellness and
preventive initiatives (28.3%). Run a
financial projection to determine if
your organization is expected to be
impacted by the Cadillac tax. If you
expect to be impacted, consider cost
mitigation strategies and keep an eye
out for upcoming proposed regula-
tions.
Learn financial wellness. Nine-
ty-three percent of employers are
very or moderately likely to create
or broaden their efforts on financial
wellness topics in a manner that ex-
tends beyond retirement decisions,
according to Aon Hewitt’s 2015 Hot
Topics in Retirement Survey. Such
topics include basics of financial mar-
kets, healthcare planning, financial
planning, debt management, budget-
ing, and saving for life stages. Given
employee interest, look into which
topic/s will provide the greatest val-
ue-add and work with your retire-
ment provider to lead financial well-
ness meetings.
Make the business case for help.
Now and over the next few years, ACA
administrative requirements are go-
ing to become unmanageable for
one department/person to handle
on their own. In fact, according to
the IFEBP 2015 Employer-Sponsored
Health Care: ACA’s Impact Survey,
employers say their biggest challenge
isn’t cost (20.6%), but rather admin-
istrative issues (56.9%). Given signif-
icant penalties for noncompliance,
engage help as soon as possible, es-
pecially from your broker/consultant
and internal departments (payroll, IT,
communications).
Notify your CFO. It’s a whole new
world of corporate healthcare costs.
Whereas costs have historically been
based on trend and experience, the
cost impact of the ACA (new employ-
ee eligibility, fees, etc.) and internal/
external support resources (consul-
tants, third-party vendors) must now
be figured in. Determine your 2016
costs and discuss them with your CFO
in order to avoid any surprises.
Obey state and local laws. With
so much attention being paid to ACA
compliance, it’s easy to lose sight of
the fact that some states and cities are
introducing legislation affecting em-
ployee benefits, especially paid sick
leave laws. Ensure that you have the
means to learn and comply with such
legislation.
Prepare for telehealth-mania.
Seventy-four percent of employers
plan to offer telehealth this year in
states where it is legal, up from 48%
last year, according to the National
Business Group on Health’s Large
Employers’ Health Plan Design Sur-
vey. Given the costs associated with
in-person visits and the upcoming
Cadillac tax, this may be a great op-
portunity for your organization to
mitigate health insurance costs.
Questions galore. Given the com-
plexity of the ACA, employees are
confused and questions will increase.
According to the IFEBP 2015 Employ-
er-Sponsored Health Care: ACA’s Im-
pact Survey, common questions ben-
efit managers should be prepared to
answer include: How will our benefits
change? Is this benefits change be-
cause of the ACA? How does the law
affect me? Do I need to do anything
(tax-related) or otherwise? What will
this cost me? Why are my costs going
up? Remind employees that you (and
not the news, neighbors, or relatives)
are in the best position to answer their
questions, especially at open enroll-
ment and employee benefit meetings.
When talking about the ACA with em-
ployees, however, make sure you are
not providing legal or tax advice.
Ramp up proactive employee
communication. Given the ACA in-
dividual mandate and exchange op-
portunities, communicate proactively
with employees in key situations that
could have a negative effect on them
or the organization (e.g., remind new-
ly benefits-eligible employees to de-
termine their exchange subsidy eligi-
bility, require employees who decline
benefits coverage to sign a waiver,
ensure employees know if and when
they are eligible for employee benefits
or not, etc.).
Study the ACA. In addition to
the obvious compliance reasons, the
ACA’s requirements will have a sig-
nificant impact on current and future
benefit program costs (plan design,
eligibility, fees, etc.). Thus, it’s criti-
cal to learn and understand the ACA
to allow you to develop appropriate
short- and long-term cost control
strategies.
Tackle low-hanging employee
benefits compliance fruit. Between
the ACA reporting requirements
(W-2 cost of benefits, IRS reporting)
and payment of new fees (PCORI,
transitional reinsurance), the federal
government’s magnifying glass over
your benefits program has increased
significantly, thus increasing its ex-
posure to an audit. If the government
arrives at your organization, they
may inquire about non-ACA benefits
compliance including plan documen-
tation (ERISA, Section 125), HIPAA
(policies and procedures, training),
non-discrimination testing, wellness
programs, etc.
Understand employee benefits
eligibility. Ensure you truly under-
stand how the employee benefits el-
igibility rules work and are applying
them accurately because there are
three policing functions: the federal
government, employees, and tax ad-
visers through the ACA’s IRS report-
ing process. You could be subject to
significant penalties if you don’t of-
fer health insurance coverage to the
appropriate employees. This is espe-
cially important for 2016 where the
offer of benefits coverage threshold
increases from 70% to 95% of full-time
employees.
Visualize the light at the end of
the tunnel. There’s a good chance that
over the past five years you have done
more heavy lifting in the employee
benefits space than you have in your
entire career. Between learning and
implementing the ever-changing
ACA, coupled with managing your
pre-ACA benefit responsibilities, you
should be very proud of the work you
have accomplished. The good news is
that there is light at end of the tunnel
in that the ACA implementation re-
quirements should slow down over
the next year, allowing you to focus on
the strategy side of this new world of
employee benefits.
Write your broker/consultant’s
job description. And, speaking of
this new world of employee bene-
fits, task your broker/consultant with
providing hands-on support in the
following areas: compliance, commu-
nications, analytics, administration,
and strategic solutions. If they are un-
able to meet your wants, needs and
expectations, find a new one who will.
It’s a buyer’s market.
X-amine new notices, regula-
tions, instructions, etc. There was
a good chance that the ACA would
roar like a lion once the U.S. Supreme
Court decided King v. Burwell and
it certainly has. We are seeing com-
pliance regulations being issued on
a continuous basis with no end in
sight. Ensure that you have external
resources in place to alert you to any
new information affecting your health
insurance plan.
Year of new vendors and ser-
vices. When it comes to determining
benefits eligibility and completing
IRS ACA reporting, new vendors have
entered the market. If you decide to
use a third-party vendor, perform a
thorough vetting process. Key areas
to cover include: determining exactly
what they are going to do for your or-
ganization, gaining assurance in writ-
ing that they will meet key IRS com-
pliance dates, learning how they will
collect necessary information from all
sources, and determining the accessi-
bility of your dedicated support team.
Zero in on employee well-being.
According to the 2015 PwC Health
and Well-being Touchstone Survey,
more employers (73%, up from 71% in
2014) have introduced wellness pro-
grams to mitigate the impact of their
major cost drivers and more CFOs are
willing to listen. Eighty-seven percent
of employers with wellness programs
offer incentives; of those, 27% offer
cash incentives of at least $100. Deter-
mine what type of wellness program
can positively impact your key cost
drivers and then take the appropriate
implementation action. ■
Contributing Editor Ed Bray is senior
vice president of compliance with As-
cension. He can be reached at ebray@
ascensionins.com.