by Brian Beyerbach | Apr 10, 2023 | Employee Benefits
Employee benefits packages are designed to help families manage their finances and protect their long-term economic health. As part of the worker’s overall compensation, benefits typically include health insurance, life insurance, disability insurance, retirement savings plans, and other types of coverage.
In the modern workplace, family benefits are becoming increasingly important to employees. With more people working remotely, and many unable to take traditional family vacations due to the pandemic among other reasons, it’s no surprise that employees are looking for ways to keep their families connected and supported.
Employees Increasingly Value Family-Friendly Benefits
Family-friendly benefits are becoming more and more attractive to employees. They provide employees with increased flexibility in juggling work life and home life. This encourages peace of mind and a sense of security when it comes to their family’s future that allows them to more fully focus on their job-related obligations when they are at work.
Companies that offer flexible work schedules, parental leave policies, and other family-friendly benefits have an advantage in attracting and retaining top talent.
In addition, providing these types of benefits can help improve employee morale and productivity. As such, it is essential for employers to understand the value of family benefits in order to stay competitive in today’s job market.
Unfortunately, these benefits are often the first to be cut when it comes to reducing expenses in the workplace.
Problems in the Workplace
Employers and workers alike feel the pressure due to the lack of economic stability. During times of economic unease, companies will often take a look at their employee benefits as a way to reduce costs while protecting jobs and preserving wages. Although this can seem to be the lesser of two evils, it can also be a substantial source of fear and anxiety for many workers.
Plus, after the Supreme Court’s decision to overturn Roe v. Wade brought reproductive rights into question, workers have increasingly been concerned about their access to reproductive health benefits. In fact, nearly 41% of employees feel their employers could do more, with almost one in ten considering changing jobs for one with better benefits.
These conflicting objectives may make reductions to family benefits appealing to employers while they directly oppose the preference of the workers. Feeling valued and appreciated as a member of the team is essential for people to feel secure and comfortable with the stability of their jobs.
When an individual’s employee benefits are secure and they know they can expect reasonable compensation in the future, their satisfaction increases along with their motivation. This leads to a heightened sense of responsibility for their job and a higher level of performance that is worthy of note. Additionally, it also increases their loyalty to the company.
Basic Family Benefits Package
Many employers offer their employees a basic family benefits package. Unfortunately, it usually does the minimum toward caring for the needs of their workers and their families.
Most packages include the following:
- Family health benefits parity globally
- Fertility and adoption support
- Maternity and parenting support
- Postpartum and pediatric care
- Reproductive health care
Unfortunately, there is a growing disparity between the family benefits packages offered by employers and the ones wanted by employees. This gap often leads to a lack of job satisfaction among employees, which can lead to decreased productivity and higher turnover rates.
The Disparity in Family Benefits
Studies show that nearly 2/3 of employees have either left or considered leaving a job without decent family benefits. Furthermore, an even larger percentage have had to miss work or lose opportunities because of concerns related to their family’s health.
These statistics demonstrate the importance of providing adequate family benefits in the workplace. Evidently, family benefits policies are prized more highly than ever.
In addition to the typical benefits offered by the majority of U.S. companies, workers have identified the following as areas where the packages offered by their companies often fall short.
- Caregiver support
- Paid parental and caregiver leave
- Preconception support
- Reproductive health support
Fortunately, there are solutions.
Possible Solution
In order to bridge this gap, employers must take into account the needs of their employees when creating family benefits packages. They should consider things like childcare options, flexible work hours, family health insurance coverage, and other benefits that could help improve employee morale and well-being.
This could begin with a dialogue with employees encouraging them to identify where they feel the need most greatly. Assess which areas would provide the most improvement in the lives of the greatest number of employees. Communication ensures they feel part of the solution. Their needs are being met.
By taking these steps, employers can ensure that they are providing fair and equitable family benefits packages that meet the needs of both themselves and their employees.
by Jim Taylor | May 5, 2022 | Compliance, Employee Benefits
Health savings account (HSA) contribution limits will significantly increase in 2023 and will likely continue to rise in the near future. On April 29, the IRS announced that it would drastically increase contribution limits. The announcement was made in response to the recent surge in inflation, and provides employers sponsoring high-deductible health plans (HDHPs) sufficient preparation time before the approaching open enrollment season.
With the annual inflation-adjusted limit, the maximum contribution limit for a family HSA is now $7,750, up from $7300. This is an increase of 5.5 percent from 2022’s limit, where the increase for the previous year was a mere 1.4 percent. Self-only coverage HSA contributions will increase from $3,650 to $3,850 in 2023.
The IRS verified the projected 2023 HSA contribution limits and the maximum out-of-pocket expenses and minimum deductibles for the paired HDHPs in the Revenue Procedure 2022-24.
2023 Increase Is a “Significant Jump” Over Previous Years
As more employers weigh the benefits of making income-based contributions, the number interested in matching the HSA contributions of their employees has grown. Although this practice is similar to the those used to match 401(k) retirement plans, it is particularly beneficial to lower-paid employees who might require additional help with health care expenses under high-deductible plans.
HSA Bank’s Chief revenue officer, Kevin Robertson, claims the 2023 higher limits are “a significant jump” from previous annual increases. As employer contributions generally spur employees to assign a higher value to their health care benefit packages, he believes news of the increase can be used for a few purposes.
- Employers can use the open enrollment season to encourage employee contributions.
- Employers may be persuaded to contribute to HSAs where they had not previously.
- Employees may raise their rate of contribution or begin contributing to their personal or family accounts.
Even with small amounts, employer contributions add up and promote a more collaborative approach to the employee accounts and the perceived value of those accounts.
Inflation Results in Contribution Limit Adjustments
Generally, October heralds announcements regarding various tax-advantaged accounts’ contribution limits for the following year. Those concerning HSAs, however, are announced in late April or May.
Although the adjusted contribution amount is regulated by statute, the limits are adjusted annually for inflation using the Consumer Price Index for All Urban Consumers. They use data compiled from the 12 months ending on March 31 and round to the nearest $50 to arrive at the precise amount.
The Employers Council on Flexible Compensation (ECFC) represents the sponsors of various account-based benefits plans. Legislative and technical director of ECFC, William Sweetnam, explains that limit increases for HDHP and HSA are:
“released much earlier than other employee benefit limits so that insurance companies that offer high-deductible health plans—which participants must be enrolled in to make HSA contributions—can get their insurance products approved by state insurance regulators.”
Differing Limits for ACA
Based on the Affordable Care Act (ACA), there is more than one set of health plan out-of-pocket expenses annually determined by federal agencies. This can cause considerable confusion for the administrators of the plans.
Under an ACA-compliant plan, annual cost-sharing limits for basic health benefits are established by the Department of Health and Human Services (HHS). These out-of-pocket limits are higher than the maximum limits set by the IRS. For a plan to qualify as an HSA-compatible HDHP, however, they can not exceed the out-of-pocket maximum limit of the IRS.
Regardless of whether a person is enrolled in a family or self-only plan, the ACA’s cost-sharing limits apply to every person in a non-grandfathered health plan.
Maximum Limit for Excepted-Benefit HRAs
Additionally, Revenue Procedure 2022-24 raises the employer contribution maximum amount to an excepted-benefit health reimbursement arrangement (HRA) for year 2023. Excepted-benefit HRAs are restricted to paying only for dental and vision or comparable benefits that the employer’s primary plan doesn’t pay and are also not covered by the ACA. The HRA for 2023 is raised $150 higher from the 2022 amount of $1,800 to $1,950.
The Announcement Allows Employers to Plan Ahead
Sweetnam claims that, since employers often discuss health care choices and limits during the open enrollment season, the limits for 2023 are “good to know.” To plan ahead, employers should consider updating payroll to mitigate the coming year’s cost-of-living adjustments and incorporate the announced HSA limits.
by Carolyn Kick | Feb 15, 2022 | Diversity & Inclusion, Employee Benefits
The importance of workplace diversity, equity, and inclusion (DEI) has made steady progress over the last few decades, but 2021 was the year where many employers finally made DEI a priority in their organization. An enormous undertaking for even a modestly sized company, these initiatives require challenging introspection and analysis regarding topics like strategic goals, hiring practices, workplace environment, and yes, benefit offerings.
It is impractical to expect every company aiming to improve on DEI measures to succeed in a matter of just one or two years. For many, this is a transition that will take much longer to come to fruition in a meaningful and measurable way. While enthusiasm should be applauded, trying to bite off too much in too short of a space of time can be overwhelming and ultimately does a disservice to the importance of the project. Breaking this process down into smaller, more manageable goals is a far better strategy than tackling the entire thing at once and then becoming discouraged when results do not meet expectations.
A great place to get started on this journey is with the single largest non-salary employee expense: healthcare. In order to truly achieve a more equitable workplace, where inclusive benefit offerings lead to improved health outcomes, plans need to be tailored to the individual needs of all employees.
What does healthcare discrimination look like?
Understanding inequities in the healthcare system begins with examining the underlying factors that impact health outcomes, known as the social determinants of health (SDOH). SDOH encompasses aspects of a person’s environment that have a major impact on their health, wellbeing, and quality of life. The unfortunate reality is that differences in socioeconomic status, geographic location, and racial background often result in substantial disparities in health outcomes. For example: if people don’t have access to grocery stores with healthy foods, they are less likely to have good nutrition, increasing their risk for a variety of health conditions like obesity, heart disease, and diabetes.
How are employees affected by discrimination in the health care system?
Employees can be left vulnerable to increased health risks either by lack of access to quality health care or by lack of adequate education about the resources that are available to them. Data from a recent Harris Poll survey of more than 2,000 adult Americans showed that 54% have delayed care in the past year due to cost. The 2020 Health Insurance Literacy Study from Policy Genius found that only 32% of Americans can define the terms deductible, copay, and premium. Whatever the cause, many employees lack the resources necessary to take care of their physical and mental well-being, which could potentially result in long-term health issues.
How can employers make the health care system more equitable?
Recognizing that there is no universal strategy to improving employee well-being allows you to diagnose the specific gaps and obstacles that your employees experience in their access to healthcare. The importance of personalizing clinical and wellness offerings to the needs of the individual is a factor that is often overlooked when administering healthcare benefits. That being said, here are some common barriers and strategies to address:
- Add wellness programs to your overall benefits package that take into consideration how your employees’ diverse backgrounds and experiences impact their health. Wellness subsidization has the dual benefit of promoting healthy behavior while also lowering the employee’s financial burden.
- Ensure your health plan uses clear and accessible language. 36% of Americans making less than $75,000 annually reported that they have avoided care due to uncertainty over what their health insurance covered. Inaccessible language can prevent even the most carefully designed benefit package from providing equitable healthcare access.
- Provide first-dollar coverage and improved cost certainty. High prices, lack of cost certainty, and high deductibles are the most commonly cited reasons for skipping or postponing medical care. 44% of American adults don’t have $400 in savings, leading to a disproportionate impact on lower-income individuals and families.
In a recent survey, 7 in 10 employers said that they plan to bolster DEI-related aspects of their benefit packages in the next few years. While most organizations have their employees’ wellbeing in mind, few are truly aware of how these decisions impact their overall health. These investments are also good for the bottom line, as the fewer medical procedures and doctor visits your employees require, the fewer claims are submitted. A survey from Monster indicated that 86% of job candidates say DEI initiatives in the workplace are important to them, demonstrating the impact these programs can have on recruitment and retention.
From personalized benefit offerings to proper benefits education and improved cost certainty, there are many options available for employers to work toward providing equitable health plans. This is an important project that will likely take years to bring to fruition, but it is the right thing to do not only for your employees but also for your organization itself, and it is never too early to get started.
by Carolyn Kick | Oct 8, 2021 | Employee Benefits
What if I told you that there is a hidden crisis affecting 1 in 5 Americans, causing millions to leave the workforce earlier than expected, hindering productivity, all while most employers remain out of touch with what is happening? That is precisely the conclusion of a report by Homethrive on the results of their 2021 survey investigating the impact and difficulties of employee caregiving.
Employees are engaged in a precarious juggling act, balancing the pressures of work, finances, healthcare, childcare, and, for 53 million Americans, the care of their aging loved ones. As a culture we have come to tacitly accept that, fairly or not, the burden of elderly caregiving falls entirely upon the individual. As a result, affected employees are left to make an impossible choice between their career aspirations and being there for their loved ones when they need them the most. This is a problem that is expected to grow, as 72 million baby boomers approach the average age of an elderly care recipient at 70 years old.
Homethrive surveyed hundreds of adult caregivers to take a closer look at the impact this is having on their employment. While individual employees may always bear the brunt of the responsibility, companies are also suffering losses in productivity and higher turnover as a result. 43% of respondents said that they are distracted, worried, or focused on caregiving – and not their jobs – at least 5 hours each workweek, while 20% reported experiencing this for 9 hours or more each week. 1 in 3 reported that their supervisors had noticed an impact on their job performance either from changing work habits or from being noticeably stressed. Finding a way to support these caregivers is the compassionate thing to do, but it also makes a lot of business sense.
Perhaps the most surprising finding from Homethrive’s report was how out of touch employers seem to be in the face of this crisis. More than half of respondents said that their supervisor is not as supportive as needed regarding their outside-of-work caregiving responsibilities. One reason employers aren’t seeing the impact here is that they aren’t looking, as 40% reported that their supervisor wasn’t even aware of these additional obligations.
Most employers care, they just need to do more to understand this need among their workforce and provide benefits that support them. While the vast majority of caregivers are receptive to the idea of their employer offering a benefit to help address this challenge, most companies are not yet offering anything in terms of resources, guidance, or support for caregiving. Choosing the right caregiver benefit should be near the top of the priority list when considering the “must-haves” in a modern benefits portfolio.
To learn more about the impact of elderly caregiving on employment, check out Homethrive’s report here.
by Carolyn Kick | May 13, 2021 | COVID-19 Resources, Employee Benefits
As we enter the halfway point in the year following the year of the pandemic, by now most of us are familiar with the term “return to work.” Many businesses have brought their employees back to the workplace, while some have adopted a more hybrid model of maintaining some people on-site and allowing others to remain remote work employees.
Even though we have begun to return to a pre-COVID way of life, the way of 2021 is not the same as that of 2019. According to writer, Amy Quarton, “Trying to make the workplace what it used to be before the pandemic is not only impractical and untenable for many reasons, it is just as (if not more) disruptive than the initial work-from-home transition.”
Post-Pandemic Employee Benefits Trends
The way employees view benefits has changed. Some benefits that were high priority a year and a half ago are no longer as important as they once were, while benefits that may have seemed unnecessary or less important have made their way to the top of the priority list for many employees.
Reporter, Kristen Beckman states, “This shift in the work environment is an ideal time for employers to begin thinking about how they want to work with employees to help them recover financially and emotionally from the disruptions and stress of the pandemic.”
With this new perspective on benefits in mind, here are a few that will have an impact on how employee benefits evolve moving forward.
Employee Financial Health Benefits
For most employees, the financial impact brought by the pandemic was heavy. While some were fortunate enough to have retirement or emergency savings to fall back on, they likely had to use a good portion of those funds to maintain their lives. According to Beckman, “The resulting financial instability can cause a strain on employees that can impact productivity especially at a time when they are transitioning back to work.”
Here’s what we are seeing as a result:
- Increasing numbers of providers are offering education and coaching, budgeting and savings tools, and financial advising and planning.
- Various emergency savings programs are now offered by payroll vendors, retirement plan providers, and others, but no matter the vendor, the key feature is easy employee access to those funds.
- Typically administered through a third party, student loan repayment assistance benefits are enabling employers to make regular contributions directly to workers’ student loan servicer.
More Benefits Options
For several employees, there was a realization of just how flexible the workplace could be when businesses were forced to begin working remotely. Flexibility in the workplace and having more options provides the employee to have more control of their daily life and the work/life balance.
Here’s what we are seeing as a result:
- Flexible work hours ”will likely be made widely available and be in high demand as physical workplaces reopen,” writes Quarton, and many new scheduling tools have been launched to help employers maintain social distancing.
- The most helpful option for addressing mental health is to offer better insurance coverage for mental health care. Other options include adding more visits via EAPs and providing apps for meditation, mindfulness, and stress relief.
- Help with caretaking includes reimbursements for or assistance finding daycare, elder care, after-school care, remote tutoring, remote safety monitoring, and more.
- Vendors have brought telehealth capabilities not just to computers but to phones, and virtual appointments are remaining an option, post-pandemic.
Tech at the Center
Many have become far more comfortable interacting virtually whether it be through zoom meetings, virtual schooling, and even online court appearances. And while occasional technical difficulties can be problematic, reliance on tech is becoming more and more acceptable and even preferred for many tasks.
Here’s what we are seeing as a result:
- Going virtual can be made interesting and informative with the use of interactive tools such as webinars, virtual booths, and live chats. David Karlin writes that being able to access virtual open enrollment at home “allows family members, like spouses, to be easily included in the decision-making process.”
- “The range of digital health apps, platforms, services, and new products spawned or accelerated by the pandemic can hardly be mapped,” according to writer Dan Cook. Hundreds of employee benefits apps and tools are readily available, with new ones launching weekly for benefits and health monitoring and management, provider and pharmacy searches, 401(k) funds monitoring, wellness tracking, and more.
While some trends will come and others go, one thing we know for sure is that as we continue to define what normal looks like, employers and the benefits they offer to their employees will certainly have a pivotal role.
by Jim Taylor | Apr 14, 2021 | Employee Benefits
Amongst all the things that 2020 brought to the foreground of our attention, the importance of having a benefits plan that puts employees first is more important than ever. In a recent study, research showed that COVID-19 has had a major impact on how important the majority of employees view their benefits plan. In fact, more than 77% of employees claim that their benefits plan is an important part of their overall compensation, with approximately 73% claiming that benefits play a major role in their decision to stay with their current employer. And with 75% of employees claiming that being provided benefits from their employer is more important than ever, the effects that COVID-19 has had on the way employees view benefits are clear.
Employee benefits are now viewed in ways unlike ever before. For example, benefits that in the past have seemed more like rewards than necessities (i.e. remote work) are now seen as essential by employees. While healthcare benefits are clearly a top priority, the list doesn’t stop there – including those benefits that don’t always get the most attention.
In today’s article we’ll explore several tax-advantaged benefits programs that must be on the radar for modern employers in 2021 and beyond.
Tax-Advantaged Benefits
1. HSAs
Did you know that more than 28 million Americans had a health savings account last year? Health savings accounts or HSAs are accounts that are designed to help employees with higher deductible health plans better save for their medical expenses, and the number of employees that have HSAs has been steadily growing for years. In fact, 95% of employers now provide HSAs to their employees. Because they give employees the opportunity to set aside pre-tax dollars to better manage healthcare costs that are unexpected, HSAs have become increasingly more popular.
2. FSAs
Additionally, flexible spending accounts or FSAs have also become more popular in the last decade, with a reported 32 million Americans currently having an FSA. FSAs, like HSAs, give employees the opportunity to set aside pre-tax dollars for unexpected healthcare costs. The difference being that FSAs allow employees to access the entire amount that they decide to set aside from the first day of their plan year.
3.HRAs
Another increasingly popular tax-advantaged benefit is health reimbursement arrangements or HRAs, with approximately 14 million Americans having an HRA. HRAs are self-insured arrangements that help to minimize premiums and allow employees to have more control of their healthcare expenses. They are also completely funded by the employers and reimbursements are not taxable.
Pros of Tax-Advantaged Benefits
1. HSAs Remain After a Lost Job
As we endured the worst of the COVID-19 pandemic, HSAs certainly helped many American employees. While many people were laid off due to closures and downsizing, many Americans lost their jobs. However, because they did not lose their HSAs, they were able to use their existing funds on qualified medical expenses.
2. Feminine Care Products are Included
The CARES Act allowed for HSAs and FSAs to include feminine care products for the first time ever. This allowed women to spend tax-free dollars on all feminine products (i.e. tampons, pads, liners, cups).
3. FSAs Continue to Update
Last year was full of all kinds of unforeseen changes and with it, FSAs continued to update. For example, employees with FSAs were able to open or close accounts and change their contributions last year, without the stipulation of having a life-changing event. Additionally, for the purposes of maintaining their FSAs, furloughed employees were able to be considered full-time employees.
4. Over-the-Counter Meds
Another major pro of HSAs and FSAs is the eligible expenses with over-the-counter medicines. Thanks to the CARES Act, individuals no longer have to have a prescription for over-the-counter meds in order to use FSA or HSA money.
5. New HRAs
HRAs helped employers maintain their benefits throughout the worst of COVID-19. In 2020, the US Government gave employers an opportunity to offer employees a new type of HRA called an ICHRA or individual coverage health reimbursement arrangement.
Cons of Tax-Advantaged Benefits
1. Ensuring PPE is Considered a Qualified Medical Expense
While medical professionals have recommended the use of PPE and sanitizers in order to slow the spread of COVID-19, it remains unclear if they fall under qualified medical expenses under current provisions of the tax law.
2. Dependent Care Needs to Be Improved
Dependent care FSAs allow individuals to set aside pre-tax dollars to balance work-related dependent care costs (i.e. preschool, before and after school programs, etc.). Unfortunately, their effectiveness is diminished due to the fact that limits have not been updated in over 20 years. Because they have never adjusted for inflation, their amounts do not meet the dependent care needs in most areas of the country. Throughout the COVID-19 pandemic, several parents had to leave their jobs or significantly reduce their hours due to a lack of childcare, though, many essential workers didn’t have that option and were left scrambling for childcare.
3. COBRA is lacking
With unemployment still rampant across the country, several Americans are left wondering how they will manage to pay for their medical expenses this year. Most of those who were furloughed or lost their job in 2020 were placed in the Consolidated Omnibus Budget Reconciliation Act or COBRA. Not only is COBRA expensive, but it is also confusing for both employees and their employers. COBRA is simply not working for several Americans and is a high-priority health care concern in an economy ravished by COVID-19.
