Each year, our team of advisors identify trends emerging in the workplace. And since many challenges are unique to small businesses, we’ve outlined several trends we see coming to fruition in 2018.
Employers are looking for simple systems that are user friendly, won’t break the bank, and even have helpful reporting tools. Not to mention, an app would be nice, too! So many tasks can be technology based and eliminate the files we have been storing for onboarding, training, learning management, payroll, benefit enrollment, benefit education, and offboarding. There are many options to consider, but one thing to note: One size does not fit all. A thorough evaluation is needed before making a commitment. Systems take time to build and customize. And you don’t want to change often. The hard work of evaluating and comparing systems is well worth the time spent.
ACA and Health Care Reform
Not much has changed around the Affordable Care Act, despite all the noise. The exchange option is less appealing as more carriers exit. Community rated renewal trends ranged from 8% to 12% depending on the carrier and the location of the business. It’s also important to pay attention now and in the future to your full-time employee counts. As you break over thresholds, such as 50, there are different aspects to consider.
Professional employer organizations (PEO)
These are still a hot topic: Should we join or should we not? PEOs can be a good fit for some employers and bring some new efficiencies. For others, giving up control is not as appealing. The diligence around knowing what a PEO may require when partnering with them—all the way to long-term costs—will help you make this decision. Add in compliance requirements and payroll implications, and you’ll have a good decision checklist to work from.
Prescription cost strategies
This area of health care has received much attention in 2017. For self-funded plans, there are controls such as Formulary List Changes, New Drugs to Market, Prior Authorization, Step-Therapy, and Mandatory Generics. These cost-savings approaches benefit the employee and the health plan spend. For fully insured customers, the options are a bit limited; however, carriers are making moves to accomplish similar outcomes for employers and employees. The implementation of new formularies, as well as “Level One” and “Level Two” pharmacy benefits, is just the beginning as we look toward the future.
Funding alternatives and options
There’s no question employers want data, flexibility, and control to impact their health plan outcomes. Within carrier regulations, this can be difficult as a fully insured group. This desire has pushed the market to provide various options in funding, including level funding, refund agreements, and others to evaluate as financial and benefit offering decisions are made each year.
Captives and associations
Some trade and other professional associations offer medical plans and other ancillary coverages to their association members. In many cases, entrance into these plans includes employee count limits or requirements. Association plans allow smaller employer groups to join a larger benefit plan that spreads risk across a larger population with the intent of mitigating risk to avoid large-scale claim fluctuations. Small groups who are part of a trade or other professional association should inquire about whether an association plan is an option for them.
Captives offer groups who are willing to take on the risk of self-funding a unique way to quantify and transfer the risk of their health plans. Captives combine health plans of multiple companies and then utilize traditional stop loss reinsurance placements in conjunction with a “captive layer” to transfer risk and set liability levels for employer groups. The best captives actively manage the risk of the entire captive enrollment through population health and other wellness initiatives. Groups must be willing to look at a captive solution as a long-term strategy, as entry and exit from captives have tighter control than that of traditional stop loss coverage.
Business succession planning
Do you know what would happen to your business if one of your key employees or even a business partner became disabled or passed away? What about the benefit you might pay to the surviving family? You may have your core benefits in place with a strong strategy, but without thinking about these additional components, such as buy-sell agreements, executive disability insurance, or key-person life insurance, you may have gaps when it comes to your key employees.