Reader Responses May 6, 2013

SURVEY SAYS: Communicating Health Care Changes

May 6, 2013 (PLANSPONSOR.com) – The health care reform law has led to changes in employers’ benefit offerings, and more changes are coming.
Reported by

Last week, I asked NewsDash readers, has your company communicated coming health care offering changes to employees?  

One-quarter (25.5%) of responding said their companies have started communicating changes to employees, while 19.1% indicated their firms are waiting for the annual open enrollment period. Seventeen percent each reported their companies have not communicated anything yet, and their firms’ benefit offerings are not changing. Nearly 15% said their organizations’ have not decided about changes to health care offerings yet.  

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Around 6% of respondents chose “other.” Those responses indicated some companies plan to start communicating changes between now and open enrollment and some have educated employees about changes already made, but not about changes coming next year.  

In verbatim comments readers expressed frustration with the health care law in general, but many specifically discussed how difficult employee education is with the complexity of new rules and need for more communication guidance. For the Editor’s Choice this week, I couldn’t help but take advantage of the plug. It goes to the reader who said: “If I didn’t read NewsDash, sadly I would have no idea of the pending changes…Thank God I can manage my own accounts.”

Verbatim   

We are trying to inform our employees about the increasing coverage mandated and the costs that we are anticipating increasing to cover these additional items and additional insured individuals.  

No matter how well we try to explain all the changes and options from the new health care requirements, it is going to be hard for our workforce to understand. The governmental delays in guidance for the standard format of such communications and info on the exchanges is going to make a difficult task even harder. To explain adequately and prepare to deal with the questions and issues, employer HR staffs need time to prepare too. This should be delayed if the government doesn't already have all the decisions made and ready to give to employers by this point.  

We have already added an HDHP with HSA and communicated that it was in response to the FSA limits. We have also been communicating about the Open Enrollments this fall that will coincide with our regular Open Enrollment.  

We might not have any changes; one can only hope!  

Things are kept close to the vest around here, so even though I work in HR, and in the famous words of Schultz, (from Hogan's Heroes)...I know nothing!  

I believe we were e-mailed a 1-2 page information sheet. That's it.  

Our company has complied with all the required documentation under PPACA. 

This new Health Care Bill is going to cause a lot of problems for Employers and Employees get rid of the bums who are forcing this on us. 

We are interested in communicating about the 2014 changes but are finding that there are very few if any resources at the present time geared to employees.

Verbatim (cont.)  

We're a commercial construction company with many project sites and employees all over the city. It's very difficult to gather all of the people for meetings.  

clear as mud  

Communication isn't the issue so much as it's the actual changes. For example, we used to have a choice between deductible/no deductible. Obviously the premium was higher for no deductable. There is no choice. We now apparently must have a deductible. That means I'm forced to pay lots out of my pocket at the beginning of the year, rather than being able to spread it over the year in premium payments. How in the world is that making health insurance more affordable? Your government dollars at work.  

If I didn't read NewsDash, sadly I would have no idea of the pending changes...Thank God I can manage my own accounts.  

If you think health care is expensive now, wait until it's free!  

Educate them about what? The State we do business in has chosen not to offer an exchange. Has the Federal Government outlined their health insurance exchange yet?  

Up till now (or recently), it’s all been about the new benefits; adult dependent mandate (talk about your oxymorons), coverage of pre-existing conditions, "free" contraception coverage. Well, that "free" lunch that everybody likes so much in the polling is coming to an end. Forget about the $1 trillion this will cost American taxpayers over the next decade, your healthcare costs are getting ready to rise steeply, and your services likely to diminish (though perhaps more gradually). Then we'll see how much everyone "likes" the new health care law. "If you like the healthcare you have, you can keep it", my eye!  

 

NOTE: Responses reflect the opinions of individual readers and not the stance of Asset International or its affiliates.
Compliance May 3, 2013

Budget Proposal Could Create Administrative Headache

May 3, 2013 (PLANSPONSOR.com) - President Obama’s proposal to cap individuals' retirement savings not only has the potential to affect participants — it could also add administrative work for sponsors and advisers. 
Reported by

The proposed fiscal year 2014 budget would place a cap on retirement savings, prohibiting employees from saving more than $3 million in individual retirement accounts (IRAs) and other tax-deferred retirement accounts. Analyses from the Employee Benefit Research Institute suggest that up to 5% of retirement plan participants could be affected by this cap (see “SavingsCaps Could Affect 5% of Participants”).

“I don’t think it would have any impact on the bigger companies,” Richard Del Monte, president of Del Monte Group LLC, told PLANSPONSOR. “They just adjust and move forward.”

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He said, however, the impact on small businesses could be significant. Dentists and doctors with a staff of five people or fewer, for example, may stop offering a retirement plan altogether if the proposal passes, because their personal deductibility—which Del Monte said is huge for them—would be affected.

The proposed budget could mean that small-business employees will lose out on the opportunity to save at work, as well as contributions the owner would have made on the employee’s behalf to pass nondiscrimination rules, said Brian H. Graff, executive director and CEO of the American Society of Pension Professionals & Actuaries (ASPPA) (see “Budget Proposals for RetirementSavings—A Deterrent or Not?”). 

As a result in a loss of benefits, employers could lose highly skilled workers to other companies with a more competitive offering, Del Monte added.

But some sources like Lee Topley, managing director of Unified Trust, do not think the budget provisions would encourage job switching because these restrictions would be everywhere. He thinks the $3 million cap will only affect a small percentage of participants, but it is too early in the proposal to make definitive conclusions. 

Administrative Burden on Sponsors, Advisers  

The bigger potential problem with the $3 million cap, Topley said, is that it could burden advisers and sponsors alike with administrative hassles related to monitoring IRAs outside of a participant’s current plan.

If this burden falls on the plan sponsor, it could ultimately increase the cost of offering a defined contribution plan because of the added administrative expense, he said. “So I think there could be a negative impact [on sponsors],” Topley said. “It is going to add another level of complexity to what the adviser is doing, as well.”

Rather than placing a $3 million cap on IRAs and other tax-deferred retirement savings, Del Monte suggests eliminating the stretch provision in pensions for non-spouse beneficiaries. Instead of allowing these beneficiaries to take distributions from the inherited IRAs over their lifetime, the government could require them to take out the money within five years.

The $3 million cap proposal is flawed, Del Monte contends, because tracking down every IRA and the amount in it is difficult. “People have balances all over the place,” he said. “I really can’t imagine it would ever get enacted.” 

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