Benefits December 19, 2016

Employers Focused on Modernizing Health Benefits in 2017

Willis Towers Watson has noted trends aimed at employer-sponsored health and well-being benefits, including shifting from a ‘one-size-fits-all’ mantra to providing options that tailor to employees’ individual needs, and increasing voluntary benefits for younger generations.
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Driven by an increase in Millennials in the workforce and new technologies, Willis Towers Watson sees employers focusing on modernizing their health care and voluntary benefits in 2017.   

The firm notes five trends aimed at employer-sponsored health and well-being benefits, including shifting from a ‘one-size-fits-all’ mantra to providing options that tailor to employees’ individual needs, and increasing voluntary benefits for younger generations.

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Updated benefits for 2017 include extended coverage for autism spectrum disorders; transgender-inclusive medical; and short-term disability, said to cover treatments and procedures necessary for gender identity disorder.

Furthermore, voluntary benefits including identity theft protection, critical illness insurance, student loan repayment programs and pet insurance will be added to cater to Millennials’ needs. As Gen Xers face the emotional toil of caring for aging parents and dependent children, employers will be updating benefits for the age group as well, adding critical illness and hospital indemnity; accident or injury coverage; legal assistance; and financial counseling to the line of benefits.

Another trend for 2017 is the introduction of technologies and tools, including social media usage to select benefits and manage health; and tech-enabled lifestyle coaching and fitness wearables to track exercise and nutrition.

“Another factor driving employers’ efforts to modernize benefits is the availability of a broad range of innovative technologies and tools to help employees select benefits, and build and manage personalized benefit portfolios, which gives employees more control over their benefits and improves the overall experience,” says Frank Giampetro, managing director of group exchanges for Willis Towers Watson.

In addition to physical health, employers aim to expand the definition of wellbeing to include mental, emotional, social and financial health in 2017 and 2018, by adopting more holistic approaches in day-to-day work life and company culture, according to the report.

To deliver all personalized benefits to a large workforce, employers are considering applying private benefit exchanges to accelerate delivery, daily management and to afford an enhanced benefit experience, including greater flexibility and education.

More information regarding the report can be found here.

Compliance December 19, 2016

Municipally Sponsored IRAs Granted Safe Harbor

States were already granted the authority to establish their own IRA programs for private-sector workers; now the largest individual cities are being given the opportunity.
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The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) revealed a final rule to assist large cities and other political subdivisions as they establish payroll deduction individual retirement account (IRA) savings programs for workers who do not have access to workplace savings arrangements.

The rule adds to and amends a similar rule related to state-based savings initiatives published earlier in 2016, further opening up the number of government entities eligible to establish IRAs for private-sector workers. 

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“More workers saving for retirement now means more financially secure retirees in the future,” notes outgoing U.S. Secretary of Labor Thomas E. Perez. “This is good for workers and families trying to build their nest eggs, and good for the long-term strength of the economy.”

Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi adds that “there is no silver bullet when it comes to solving the retirement savings issues facing workers and our nation. Increasing access to savings opportunities, improving transparency and reducing conflicts of interest in investment advice are all critically important policy tools that this administration has pursued.”

According to Borzi and Perez, the final rule published today provides additional guidance for eligible cities and other political subdivisions to help them design IRA programs “by providing a safe harbor describing circumstances in which an employer’s actions in complying with the municipal law do not result in the creation of an Employee Retirement Income Security Act compliant plan.”

As such, the safe harbor will reduce the risk of ERISA preemption of the relevant municipal laws.

NEXT: Details from the latest DOL rulemaking 

According to the DOL and EBSA, by establishing a clear standard, the new rule will also provide greater predictability and certainty to municipalities considering action around implementing IRAs for private-industry workers.

“Importantly, the rule also protects workers’ rights by ensuring they have the ability to opt out of auto-enrollment arrangements,” Borzi says. The rule will go into effect 30 days after its pending publication in the Federal Register.

Under the final rule, a limited number of cities and other political subdivisions, defined as “those with populations at least as large as that of the least populous of the 50 states, that are located in a state that does not already have a payroll deduction IRA plan of its own, that have experience sponsoring a plan for employees, and that meet other criteria laid out in the final rule,” are eligible to enact such a program.

Representatives from three cities—New York, Philadelphia and Seattle—have publicly expressed interest in potentially establishing programs.

The final rule will be published in an upcoming issue of the Federal Register and can also be viewed here. A fact sheet is available here.

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