group insurance Archives - Page 7 of 11

The Opioid Epidemic: How Employers Can Be Part of the Solution

With the coronavirus pandemic dominating the news cycle, some of the focus has been taken off one of our country’s other major health crises: the epidemic of opioid addiction. This epidemic has claimed almost 600,000 lives over the past two decades, and it shows no signs of slowing down. In fact, the American Medical Association has recently said that it is “greatly concerned” that opioid overdoses seem to be rising in at least 30 states. It makes sense: stress levels have been high and many people have been feeling disconnected. Some people might also feel disconnected from their healthcare providers, and might be choosing the easiest option for dealing with chronic pain. Dr Mike Brumage, former director of the West Virginia office of drug control policy, puts it this way: “the opposite of addiction is not sobriety, the opposite of addiction is connection. Clearly, what we have lost with the pandemic is a loss of connection.”

Whatever the cause, opioid misuse is not something employers should ignore, whether or not they think it’s a problem in their workplace. You can make yourself a point of connection for an employee who might be struggling with addiction or who is dealing with chronic pain, and you can make your healthcare plan a part of the solution.

Treating Addiction

Opioid addiction is not someone else’s problem. It spans all socio-economic classes, genders, and cultures. It could very well reach into your workplace, if it hasn’t already. You would obviously want to help an employee who is struggling with addiction, not only for the sake of them and their family, but also for the sake of your business.

Whatever their job is, one employee who is abusing prescription painkillers can pose a physical risk to other employees, or a financial risk to your business if they make a mistake or are interacting with clients while under the influence. In fact, missed work days and lost productivity due to the abuse of prescription painkillers cost employers an estimated $25.6 billion a year. So it is in everyone’s best interest to provide care (or to prevent misuse, if possible, which we will discuss below) – and you can do this by simply offering an ACA-approved healthcare plan to your employees.

caucasian hands on a notebook while holding a pen — *All plans must cover behavioral health treatment, such as psychotherapy and counseling.*

Thanks to the Affordable Care Act (ACA), all healthcare plans have to cover 10 essential health benefits, and “mental and behavioral health services” is considered one of these essential benefits. Here’s what this means for your plan, and how it relates to substance abuse:

All plans must cover: behavioral health treatment, such as psychotherapy and counseling; mental and behavioral health inpatient services; and substance use disorder (commonly known as substance abuse) treatment.
Pre-existing mental and behavioral health conditions are covered, and spending limits aren’t allowed. This means that even if an employee was struggling with addiction before signing up for your plan, they will still be covered for it after signing up.
All plans have to provide “parity” of coverage, meaning that limits applied to mental health and substance abuse services can’t be more restrictive than limits applied to medical and surgical services. The rules have to be the same financially (for example, there can’t be a higher copay or deductible for mental health services), in terms of treatment (for example, there can’t be a limit on a number of mental health-related visits covered if there isn’t one for medical visits), and for how care is managed (for example, there can’t be a requirement to get authorization for treatment for one type of care and not the other).

Be very clear with your employees about what their options are when it comes to mental health services, and remember to make it clear that your workplace is a safe space and that employees should always take advantage of these services if they are needed.

Obstacles to Seeking Care

As long as you are offering your employees a quality healthcare plan (which you should be doing in any case!), then they are at least assured of basic care if they’re facing substance abuse issues. But the question is, are they accessing it? If not, why not?

Privacy concerns: Some employees may be reluctant to seek care because they’re not sure if their situation will be kept confidential. It should be made clear to employees that the Health Insurance Portability and Accountability Act of 1996 (HIPAA) means that there are very strict rules surrounding who can see an employee’s claims and how they can use that information. They may need to be reminded that any claims that they make will be kept secure, and any communication they have with an Employee Assistance Program, for example, is strictly confidential.
Find a plan where employees have access to a doctor including telehealth services.

Authorization requirements: Some employees may benefit from going to an inpatient treatment facility, but many plans require that they first seek treatment at an outpatient facility, which may be difficult for some people. Take a closer look at your plan: it might allow authorization by phone for a medical or surgical inpatient stay. If it does, then it must do so for a mental health or substance abuse inpatient admission, as well.
Access to a provider: As with seeking authorization, sometimes barriers to care are simply that it’s too difficult, inconvenient, or even costly to seek help. Again, look at your plan: does your network include options? Will employees have to go out-of-network, and will it cost them a lot to do so? Are there treatment facilities or clinics available in your area, and would an employee feel comfortable going to one (say, for example, that you are in a small town or rural area, and an employee might feel that everyone will know their business)? If this is an issue, look into a plan that includes expanded access to telemedicine as a way to encourage employees to seek help.

How You (and Your Healthcare Plan) Can Help Prevent Addiction

The old saying goes: “an ounce of prevention is worth a pound of cure.” Yes, all ACA-approved healthcare plans need to cover mental health and substance abuse treatment, but most people would agree that preventing addiction in the first place would be ideal. Consider this: Roughly 21-29%of patients prescribed opioids for chronic pain misuse them, and between 8-12%develop an opioid use disorder. What can employers do to stop their employees from becoming one of these statistics?

Education: You can educate your workforce on a variety of topics, such as: description of opioids and common brand and generic names, common risk factors for opioid misuse, reasons for opioid prescriptions (acute pain versus chronic pain), pain relief alternatives, and what to ask prescribers before filling an opioid prescription.

Policies: Have a clear, compassionate drug-free workplace policy, but also have a flexible medical leave policy, so employees don’t feel like they have to rush to come back to work after an injury or procedure. They might turn to stronger painkillers if they feel pressured to return to work, or they may end up taking these drugs more often or longer than they need to, which can lead to addiction.

Culture: Try to create a positive, low-stress work environment for your employees. Make sure to support your employees, encourage self-care, and show ways that they can prevent common or repetitive strain injuries. Consider adding a workplace wellness program in order to promote a culture of health and wellness.
Benefits: Covering essential mental health care is a great start in terms of preventing the psychological reasons for addiction, and in terms of treating addiction. But what about treating physical pain without using opioids? Unfortunately, some insurance companies have been slow to include alternative treatments in their health insurance policies, so it is up to you to look for a plan that allows employees to seek these types of therapies (think: acupuncture, chiropractors, and physical therapy) without having to rack up huge medical bills. To stop opioid use before it starts, you can also consider adding an Employee Assistance Program (EAP), which will include mental health-specific extras like counselling, or a pharmacy benefit management program, which can step in before an employee fills their first opioid prescription and offer advice and alternatives.

There’s a lot to consider when choosing a healthcare plan for your employees, especially if you’re looking to have the safest, most compassionate workplace that you can. It’s important to foster a positive work environment, but it is also important to find an insurance company that is willing to help keep employees from falling into addiction. EZ can help you in your search – we will sort through all the plans available to you, and find you one that will help you and your employees rest easy. Get started with us today for fast, accurate quotes: simply enter your zip code in the bar above, or you can call 888-998-2027.

High Deductible Health Plan? Make Sure Your Employees’ Is HSA-Qualified!

An increasing number of employers are jumping on the high deductible health plan bandwagon. In 2006, only around 6% of companies that offered healthcare plans offered High Deductible Health Plans, but in 2019 that number soared to 26%. There are definitely good reasons to consider offering one of these plans to your employees, but you do need to know that not all high deductible plans are the same. With some high deductible plans, you can offer your employees a Health Savings Account (HSA), which has tax advantages for them and for you. But first you need to make sure you’re choosing the right plan.

What Makes an HDHP HSA-Eligible?

person's hand holding a pen while checking off a checklist — *In order to offer an HSA, your high deductible health plan must meet certain criteria.*

It might seem like a small distinction, but not every high deductible plan is a High Deductible Health Plan (HDHP) with a capital “H.” The difference is that an HDHP not only has a high deductible, but it also meets certain criteria. If your plan meets this criteria then – and only then – can you offer an HSA alongside it. To be an HDHP, the plan must have:

A deductible that meets minimum requirements. A “high deductible” isn’t just a matter of opinion; each year, the IRS sets the minimum deductible amount for a plan to be considered HSA-eligible. For 2020, the deductible for an individual must be at least $1400, and for families, it must be at least $2800 for the plan to be an HSA-eligible HDHP.

A maximum out-of-pocket amount. Having a high deductible plan means having higher out-of-pocket expenses, but the good thing is that there is usually a limit to how much you have to fork out each year in deductibles and copays. To be an HSA-eligible HDHP, this out-of-pocket maximum must be below a certain amount. For 2020, that number is $6,900 for an individual and $13,800 for family.
No insurance coverage until the deductible is met. In order to take part in all of the advantages an HSA has to offer, you do have to give up some coverage. But don’t worry, there are some exclusions. Wellness and preventative care, which even includes things like help with weight loss and quitting smoking, as well as regular checkups and care resulting from accidents, can all be covered before the deductible is met in an HDHP with HSA.

These are the rules for offering an HSA alongside a high deductible plan, and there are also a few other rules surrounding contributing to an HSA to be aware of. In addition to being covered by an HDHP, you also cannot:

Have any other health coverage

Be enrolled in Medicare

Be claimed as a dependent on someone else’s tax return

Why Offer an HDHP with HSA?

Now that you know what makes a high deductible plan HSA-eligible, the next question is: why offer this type of plan to your employees? It all comes down to savings. Offering a healthcare plan to your employees is the right thing to do, and studies have shown that employees with healthcare are happier and more productive. But there’s no doubt that it’s expensive. Choosing a plan with a high deductible is one way to keep your costs down, because premiums on these plans are usually much lower.

Just look at this comparison: in 2019, the average employee contribution to a healthcare plan without a high deductible was around $6,200 for an individual and $14,700 for a family. For HSA-eligible HDHPs that number was around $5,200 and $14,000 respectively – a savings of $700 – $1,000.

Of course, HDHPs are not perfect. To some employees, especially lower income ones, the out-of-pocket expenses can feel like a burden. This is why it’s important to make sure the plan you choose is HSA-eligible. Having the HSA allows them to set aside money pre-tax to help pay for medical expenses that come up throughout the year; you can also help them out by contributing to their HSA (the maximum contribution allowed by both you and your employee combined is $3,550 for an individual and $7,100 for a family).

Offering an HSA alongside a HDHP (and contributing to it!) means that your employees will be more likely to enroll in your plan. It may also be the difference between them skipping out on preventative care or necessary treatments – possibly leading to poor health and more sick days in the future – and using their plan when they need it.

There’s a lot you need to know when you’re the boss. You’ve got to know your business, and also know what’s best for your employees – and sometimes that means reading up on things that aren’t your business – like health insurance. But don’t worry, you don’t have to go it alone! EZ can answer any questions you have, and can help you find the plan that works best for your employees and your business. There’s nothing we can’t answer, and we’ll never hassle you or charge you for our services. If it’s just quotes you’re after, stop by, give us a few seconds of your time, and be on your way. You’ve got enough to do! To get started with us, enter your zip code in the bar above. Or to speak with an agent directly, call 888-350-1890

How To Insure Your Employees During Tough Times

All businesses go through rough patches, whether it be when they first start up, or when they are faced with unforeseen circumstances. If your business falls on hard times, you might end up feeling stressed out and overwhelmed. It’s important, though, not to forget what it is that keeps your business running: your employees. You need to be there for your employees through tough times because they are your most important asset. One of the best things you can do for them is to look out for their physical and mental health by offering (or continuing to offer) them health insurance.

Offering a healthcare plan might seem out-of-reach during hard times, but showing your employees you care enough to provide them health insurance will help with employee retention and will ultimately boost your business’s growth and productivity. If you are unsure how to keep a group health plan going at this time, we have some tips – and we have agents who can talk you through all of your options.

Healthcare On A Budget

Keeping your employees insured will help your business in the long run, as it will relieve some stress and support your employees’ well-being. Stressed and unhealthy employees are less productive, less present, and less likely to stay in their jobs. Here are some things to consider when shopping for a group insurance plan on a tight budget:

Ask what they need- Ask your employees what kind of insurance they need by giving them an anonymous health insurance survey. By taking the time to ask some simple questions, you will have a good idea of where to start when looking for a plan to cover your employees. You might find that most of your employees would be happy with a high deductible health plan, which would cut down on your premium contributions.
Help your employees understand their options and learn about the benefits available to them, so they can take advantage of everything being offered.

Update or offer wellness programs– Wellness programs not only offer your employees ways to get happier and healthier, they can also help you save money in the long run. They can lower your overall healthcare costs over time by encouraging employees to adopt a healthier lifestyle. Even making simple changes like setting up a space for meditation or relaxation in your workspace can do wonders to relieve stress.
Provide resources– Help your employees understand their options and learn about the benefits available to them, so they can take advantage of everything being offered.
Find a carrier that offers the right mix of benefits– Working with many carriers for different benefits is more of a headache than it’s worth. Find a carrier that can provide all the benefits you want for your employees.
Consult an EZ agent- One of the best ways to insure that you can offer your employees good health insurance is to compare plans and see if there are ways to save some extra money. We will find a carrier that meets all your needs and within the best price.

Contact Your Current Health Insurer

If you’ve already got a group health plan that you’re happy with, but are worried about keeping up with the costs, there are a couple of things you can do before canceling it. You can contact your current group health insurance company and request an extended grace period for premium payments on your group plan. If you cannot get one, then consider shopping for a new group insurance plan. One of EZ’s agents can find you a plan that will keep a little more money in your pocket during these trying times.

Federal & State Resources

You can also look into The Payroll Protection Program, which is part of The Coronavirus Aid, Relief, and Economic Security (CARES) Act. This program was set up to help small businesses pay up to eight weeks of payroll cost including benefits. All small businesses as well as individuals who are self-employed, are eligible for the program if they meet the size standards. At least 60% of the loan must be used to fund payroll and employee benefit costs, and the remaining 40% can be spent on:

Mortgage interest payments
Rent and lease payments
Utilities

If All Else Fails, Encourage Employees To Get Individual Insurance

If you do end up having to lay off employees or place them on temporary furlough, you can encourage them to get their own individual insurance. Anyone who has lost their job or is furloughed qualifies for a Special Enrollment Period and can enroll in an individual plan. If the employee qualifies, they could be eligible for significant premium reductions, as long as they sign up for a plan within 60 days of losing their job. Send them to us: EZ will work with each employee and direct them to the best plan for their financial situation and health needs.

Your employees need health insurance during hard times, not only for their physical well-being, but to manage their mental health too. Insuring your employees can cost you a lot, which can seem like a burden during tough times, but there are ways to continue offering your employees the healthcare they need. EZ.Insure will help you keep your employees insured, whether through a group plan or with individual insurance. We work with all available carriers in your area, and can compare plans within minutes. We’ll make the process easy and pain-free. You will be provided with a highly trained agent who will compare all available plans and help you decide which plan is best for your business. To get free quotes, enter your zip code in the bar above, or to speak with an agent, call 888-998-2027.

Insurance from a Distance: Can You Offer Healthcare to Employees in Different States?

Thanks to modern technology, anywhere can be an office or a workspace, and you can have meetings with people you’ve never actually met in person. You might employ people in different parts of the country, and your only contact with them might be through email and Zoom, but they are still part of your team, and should be treated as such. Offering healthcare to your employees – wherever they are – is a great way to show you value them. It is also a way to attract the best candidates for your remote positions. Figuring out a group health plan can be hard enough, but adding employees from different states into the mix can make it feel impossible. But there are ways to make it happen!

Why Offer a Healthcare Plan and Where to Start

If you’re running a small business with a handful of employees working remotely, you might be questioning whether it’s worth it to even look into a group healthcare plan. Rest assured, it is worth it. There are multiple studies that show that offering healthcare boosts retention rates, employee satisfaction, and productivity.

If you’re looking to find – and keep – the right people for your remote positions, then consider what employees told a Willis Towers Watson study. 45% said that their employers’ healthcare benefits were a reason they chose their job, and 55% said their healthcare benefits were a reason they stayed at their job.

Everyone loves to have days off, but it turns out that employees love not having to worry about huge medical bills even more. According to a survey done by Glassdoor, 40% of employees chose healthcare as their number one most desired benefit, edging out more vacation time and performance bonuses. Glassdoor also found that having healthcare increased employees’ satisfaction with their jobs more than did perks like extra vacation time, retirement benefits, or even parental leave. And remember, satisfied (and healthy!) employees are more present and productive when they’re working.

It is important to note that you can’t just throw any old cookie-cutter plan at your employees, especially those who are working remotely and who you don’t know very well. Studies have shown that 80% of employees say that having health benefits customized to meet their needs is important to them. So the best way to start when looking to cover your far-off employees is to simply ask them what they want. Anonymous health surveys are great for finding out about employees that you don’t know well; include questions about how much coverage they want/need, whether they have dependents they want covered, etc.

The Obstacles

womans hands counting money at a table with a pen and notebook in front of her. — *Your employees might want to choose their own plans, but have you help out with costs.*

So the benefits of offering healthcare to employees are clear, but if they’re in different states, it’s not necessarily an easy thing to do. There are some obstacles that might limit your options. For example:

Some insurance companies won’t cover out-of-state employees. Others might, but will require a majority of the employees to be located in the same state.
Your state might have specific insurance requirements that make it difficult for you to find an insurance company (which are regulated at the state level) that can offer the same plan to all of your employees.
Your employees might want to choose their own plans, but have you help out with costs.
If you qualify for an ACA SHOP plan, you may be put off by the process of getting plans in multiple states.

Don’t get discouraged by these difficulties! It can be done, and we can take you through the ways that you can successfully navigate the process of choosing coverage.

Your Options

Covering out-of-state employees basically boils down to four options, all of which have their pros and cons.

1. Separate state plans – You can actually offer different plans to different employees in different states, which would allow everyone to get the right plan for them. If you qualify for an ACA SHOP marketplace, there is an option to choose a plan that operates in different states, and you might be able to qualify for the small business healthcare tax credit.

On the downside, though, if you decide to offer different plans to different employees, you might find the whole process of choosing and managing separate plans overwhelming. In addition, if you go through SHOP and your state has its own exchange, you’ll be stuck making separate accounts for each marketplace, instead of being able to use a single account with the federal exchange. And if you have the option through SHOP to offer a single plan, you may find that it doesn’t work for all of your employees.

2. A national plan – If the idea of multiple plans in multiple states gives you a headache, you can also look into a national plan. Some insurance companies, such as Aetna, Humana, and United Healthcare now offer the option of healthcare plans that are accessible from multiple states. With a national plan, you don’t have to keep track of multiple states’ rules and can offer everyone the same plan, although again, this can be a downside if your employees are diverse. National plans can also be much more expensive than other plans, such as those offered through SHOP, so they may be out of reach for some smaller businesses.

3. A self-funded plan – With self-funded plans, you basically take on the responsibility of paying for your employees’ healthcare costs using a pool of money that everyone pays into. This might work well for employees that are diverse and spread out over multiple states, but there are downsides to this type of plan, as well. Typically, smaller businesses have been wary of self-funding because of the risks of major claims wiping out a large chunk of their finances.

4. A health reimbursement arrangement – This might just be the best option for small businesses looking to ensure employees in multiple states. With a health reimbursement arrangement (HRA), like a QSEHRA or ICHRA, you set aside a fixed monthly amount for your employees (QSEHRAs have a limit, while ICHRAs do not) and employees can choose and purchase their own plans and then come to you for reimbursement. They can also get reimbursed for other qualified health expenses. So, employees get the plan that they want, you save money on payroll taxes by putting aside tax-free money for reimbursement, and you save yourself the headache of picking a one-size-fits-all plan that you need to manage over multiple states. You also get to keep any money that is not claimed at the end of the year. It’s certainly something to consider.

Whatever options you are looking into to do right by your far away employees, EZ can help cut through the jargon and make the whole process a lot less confusing. When you come to us, we’ll set you up with your own personal agent who can answer all of your insurance questions, give you fast and accurate quotes, and even sign you up when you’re ready – all for free! So stop wondering what’s possible when it comes to insuring your remote workforce and get started with us today! Simply enter your zip code in the bar above, or to speak with an agent directly, call 888-350-1890. No hassle, no obligation!

Group Health Newbies: Don’t Be Caught Off-Guard When Shopping for Your Business’ Plan

If you’re a newbie shopping for group health insurance for your small business, how are you feeling about the whole process? Confident? Nervous? Confused? We get it, there’s a lot of feelings to feel when it comes to picking a plan. But we’re here to guide you, and steer you past some of the common surprises and pitfalls that may come your way.

You Might Need More Info Than You Thought

caucasian hand holding a pen filling out a survey — *Conduct an anonymous employee health survey prior to shopping, so that you know what your employees want in a plan.*

We’ll start you off with an easy one. When it comes to getting accurate quotes, you used to be able to simply provide the age ranges of employees. Now you need to have their exact date of birth, as well as the dates of birth of any spouses or dependents they want to cover. Don’t be caught fumbling around for info, make sure you’ve collected all of your data before even looking for a plan. We would suggest conducting an anonymous employee health survey prior to shopping, so that you have all of the facts at your fingertips, as well as a good idea of what your employees are looking for in a plan.

A Provider You Thought Was Covered Isn’t

A lot of people are attached to a certain doctor or healthcare provider. When choosing a plan, you need to pay close attention to the network that is offered, especially since many plans are reducing the size of their networks to cut insurance costs. You could end up with unhappy employees who are unwilling to enroll in your plan if the network is too small or if their doctor isn’t included. And if this is your second time offering insurance, pay extra close attention to any changes made to the network; plans can change from year to year, so the providers that you were sure were covered, may not be.

Your Employee Isn’t Eligible

time sheet — *Employees are usually required to work at least 30 hours to be eligible for certain plans.*

This one might really come as a surprise. You’ve decided to offer healthcare to all of your employees, but that doesn’t mean that all of your employees are eligible. The state your business is in, your insurance company’s rules, or even the policy you choose can dictate the number of hours an employee must work to be eligible for your plan. Employees are usually required to work at least 30 hours to be eligible for certain plans; they must also satisfy a waiting period before they are covered. It could be disastrous to extend coverage to an employee who signs up, only to find out later that they were ineligible for the plan. They could end up saddled with a giant medical bill even though they thought that they had insurance.

You Need to Communicate with Your Employees – A LOT

Keeping your employees informed about their health coverage is not a courtesy, it’s an absolute must. You need to provide a Summary of Benefits Coverage (SBC) to participants and beneficiaries prior to enrollment in the plan, at renewal of the plan, within 90 days of a special enrollment period, and within 7 business days of a written request.

You also need to give each employee covered under the plan a Summary of Material Modification (SMM) when there are changes made to their health benefits. We know, that sounds like a lot of paperwork, but it’s important that you familiarize yourself with all of these notices. Remember, EZ’s agents can help you manage all of the crazy insurance admin that you have to deal with!

Prescription Drug Pricing Is Complicated!

If your employees are counting on prescription drug coverage in their group health plan, then you’re going to want to take a closer look at how your chosen plan covers medications. All drugs are priced differently, and generics cost less than brand name medications, but what you might not know is that the same drug may be priced differently by different insurance companies. The same drug might even have a different copay on different plans with the same company. Familiarizing yourself with different plans’ drug formularies can help to cut down on prescription price surprises.

One more thing that you might not have realized in regards to prescription drug coverage is that some plans now actually have a separate drug deductible. Just as with a general deductible, your employees would have to meet a set amount of drug expenses out-of-pocket before their plan would begin covering the cost of prescription medications. Again, this is where an employee health survey would help to give you an idea of what your employees need, and what you need to avoid when looking at healthcare plans.

A High Deductible Isn’t Always a Bad Thing

Yes, a high deductible can sometimes be a burden to employees, especially those with lower incomes, and you might think that if you’re providing healthcare you should avoid any plans that might pile high out-of-pocket costs onto your employees. But you might be surprised to find that some employees actually prefer these lower premium plans, especially if they rarely use medical services and are just looking for a safety net in case of emergency. This is especially true if you pay a higher percentage of their (low) premiums (meaning you’ll still be saving money), choose a plan that is HSA-eligible, and then contribute to those health savings accounts. HSAs have tax advantages for both you and your employees, and having that money put aside means that employees will be able to cover a surprise medical expense.

The list of things you need to know about healthcare plans as an employer can seem endless, and it may feel like you are constantly being surprised by some new rule or protocol. But we promise, you’ve got this! And we’re here to support you, simply contact one of EZ’s knowledgeable agents and you’ll have all the answers to your insurance questions at your fingertips. We can also sort through all of the plans on offer and get you instant, accurate quotes so you can find the best plan for your business and your employees – and we’ll do it all for free! No hassle, no obligation, and no surprises! To get started with us, enter your zip code in the bar above, or to speak to an agent, call 888-350-1890.

New IRS Rule Allows Mid-Year Plan Changes

There are many ways you can describe the health insurance system, but when it comes to enrollment, “flexible” isn’t always one of them. Each year, you choose your company’s plan and your employees have a set enrollment period (either the ACA open enrollment period or another one of your choosing) during which they can sign up. Once they do, that’s pretty much it for the year, unless they experience a qualifying life event, like marriage or the birth of a child. But 2020 hasn’t been an ordinary year. The IRS has decided to recognize this fact and allow mid-year changes to healthcare plans, and they are leaving the decision about whether to allow these changes up to you, the employer.

What the IRS Is Allowing

cafeteria plan written on a white piece of paper — *The IRS has decided to allow mid-year changes to healthcare plans including cafeteria plans.*

If you offer your employees a healthcare plan under IRS Section 125 – otherwise known as a Cafeteria Plan – and/or a flexible spending account (FSA), then you have a decision to make this year. The normally rigid rules surrounding when and how employees can make changes to these plans have been suspended by the IRS, and you now have the option of letting them make a one-time change to their plan. This comes at a time when employees may need relief from premium payments, extra coverage, or even more time to use their FSAs. You are not required to let employees make any changes, but if you decide to, you can allow them as many options as you like, including:

Enrolling in the plan if they had previously declined coverage
Changing from a higher to a lower cost plan, or vice versa
Moving from family to individual coverage, or vice versa
Dropping coverage, but only if they have another plan in place

Again, you don’t have to allow all or any of these changes. You also have to be sure that you make the options fair and equal to everyone. The IRS even suggests that employers only offer options that would improve healthcare coverage, such as moving from an individual to a family plan or from a plan that covers very little to a more comprehensive plan, to make clear that these changes are meant to benefit your employees, not simply lower your premium contributions.

In addition to changes to their healthcare coverage, employees now also have more flexibility when it comes to their FSAs. Your employees might be finding it harder to make the most of their FSA dollars these days because they haven’t been going to the eye doctor or dentist, for example. If they use these accounts for dependent care, they may have been unable to send their children to summer camp this year. For this reason, the IRS has extended the grace period for using 2019 funds through the end of 2020. Employees will also be able to roll over more of their funds through 2021.

What Employers Need to Consider

Your employees might welcome the chance to change their insurance policies right now, but you also have to think about how it will affect your business. Consider:

How it will financially impact your business if employees drop their plans, especially if it is the healthier employees who opt out and the employees who need more care who stay in
Your plan’s requirements. If your plan is fully-insured, there may be a minimum number of participants, so having employees opt out or change plans might mean having to rethink your whole healthcare policy.
The admin! It will take a lot of time and resources to review and process all of the changes.

It’s a tough decision to make. These are crazy times, and both you and your employees have a lot on your plates. As a small business owner who may already be struggling to provide healthcare, but who also wants the best for your employees, you may want to allow changes, but limit them. Consider following the example set out by the IRS and offer your employees the ability to enroll in or upgrade their plans. You can also decide to do an emergency stock-take: throw together a mid-year employee health survey and see what is on your employees’ minds. You have until December 31, 2021 to adopt your plan (which can be retroactively implemented), so don’t stress too much!

If you find yourself completely confused, then remember, EZ’s knowledgeable agents can answer any questions you have. And if you find YOU need a change in policy for your company, then come to us for instant, accurate, free quotes. We’re ready, willing, and able to shoulder some of the burden of small business healthcare, so get started with us today. Simply enter your zip code in the bar above. Or to speak with an agent directly, call 888-350-1890. No hassle, no obligation!

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