4 Strategies for Reducing Health Benefits Costs in 2022

Health care costs continue to rise each year, and 2022 will likely be no exception. In the new year, experts predict a 6.5% increase in medical expenses alone, according to PricewaterhouseCoopers. In terms of health plan premiums, employers anticipate they may rise more than 5% in 2022, a Willis Towers Watson survey reports.

With these increases in mind, employers will want to strategize methods to rein in benefits spending. This article offers four ways to help.


5 HR Trends to Monitor in 2022

Human resources (HR) departments are given more responsibility each year, often with budgets that don’t match these changes. As a result, HR teams must constantly innovate and stay on top of trends to remain competitive in today’s labor market.

This article highlights five HR trends for employers to follow in 2022.

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5 HR Trends to Monitor in 2022

5 HR Technology Trends to Monitor in 2022

No matter a company’s size, its day-to-day needs can feel overwhelming for human resources (HR) leaders, especially when faced with new coronavirus-related responsibilities or evolving role duties. Amid the COVID-19 pandemic, many employers are leveraging tech to address today’s challenges.

Fortunately, technology can assist HR professionals in addressing today’s challenges by enhancing the employee experience, improving workflows and helping organizations respond to change. The rapid development of HR technology can seem intimidating at first; however, much of what employers use today is intuitive and user-friendly.

This article explores five technology trends for employers to watch for in 2022.

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5 HR Technology Trends to Monitor in 2022

DOL Announces Rule to Increase Federal Contractor Minimum Wage

DOL Announces Rule to Increase Federal Contractor Minimum Wage

On Nov. 22, 2021, The U.S. Department of Labor (DOL) announced a new rule that will increase the minimum wage rate for federal contractor employees. The new rule implements Executive Order 14026 and increases the minimum wage for individuals performing work on or in connection with federal contracts to $15 per hour on Jan. 30, 2022. The rule also allows the DOL to adjust this minimum wage rate beginning Jan. 1, 2023, and creates standards and procedures to implement and enforce minimum wage protections created by the executive order.


Market Snapshot: Why Is It So Hard to Find Workers Right Now?

Market Snapshot: Why Is It So Hard to Find Workers Right Now?

Brought to you by the insurance professionals at
C3 Group LLCEmployers across the country are facing a pronounced issue right now: too many open positions and not enough workers.

On its face, it might seem like there are not enough workers available for jobs—hence all the openings. But, confoundingly, that’s not the case. The unemployment rate is still hovering just below 5%, translating to around 7.5 million unemployed Americans, according to the Bureau of Labor Statistics.

Additionally, several key COVID-19 initiatives ended at the end of summer—expanded unemployment benefits ceased, and children returned to in-person classes. As such, many economists expected workers to be spurred back into the workforce this fall. That’s decidedly not been the case; while some individuals are returning to work, others are quitting in record numbers.

This article explores the current labor market, offering potential reasons why individuals have been slow to return to work despite available positions and suggesting ways for employers to attract some of these workers.


COVID-19 Vaccine Surcharges, Mandates and Incentives: What Employers Should Know

COVID-19 vaccinations are a highly contentious topic in America. Many U.S. adults still haven’t gotten the shot despite the Food and Drug Administration’s recent (FDA) full approval of the Pfizer-BioNTech vaccine.

This reluctance is seen as a problem by health experts, who contest that vaccination is the most effective way to control the widespread coronavirus Delta variant. It’s also a problem for employers wishing to maintain uninterrupted operations and keep employees healthy.

So, if an employer wants a vaccinated workforce but is dealing with vaccine skepticism, what are their options? This article explores this complicated situation and discusses the multitude of choices facing employers.

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COVID-19 Vaccine Surcharges, Mandates and Incentives: What Employers Should Know

Voluntary Benefits Benchmarking Overview

Introduction

In early 2021, employers across the country were surveyed about various employee benefits and human resources topics, and roughly 150 employers responded. The information collected demonstrates how employers across the country are utilizing their voluntary benefits. Most importantly, it shows how some are using voluntary benefits to combat the lingering effects of the COVID-19 pandemic. Voluntary benefits are those that employees can pick and choose from, offered in addition to core benefits (e.g., health insurance).

Typical voluntary benefits include dental coverage, vision insurance, financial counseling, critical illness insurance and others. Many voluntary offerings are 100% paid for by employees, but some employers may cover a portion of the premiums. As such, they can be an excellent way to provide meaningful perks to employees without raising costs. Amid the COVID-19 pandemic, these benefits have been particularly helpful. For many, COVID-19 has increased financial insecurity and negatively affected mental health. Voluntary benefits can help counteract these issues by arming employees with the tools they need to improve. And the survey data suggests exactly how some employers are leveraging their voluntary benefits.

Continue reading for key takeaways from the survey findings.


Level-Funded Insurance Plans: Helping to “Level” Healthcare Spending

Level-funding is quickly becoming the fastest growing trend in controlling employer-sponsored health insurance costs.

WHAT IS A LEVEL-FUNDED PLAN?

A level-funded health plan, also known as a partially self-funded plan, is a health insurance plan that combines the cost savings and customization aspect of a self-funding plan with the financial safety and predictability of fully funded plans. Level-funding is a form of self-insurance because an employer pays a steady fee each month.

Level funded health plans have recently been attracting more attention among smaller employers because there is little to no risk involved and they are exempt from ACA-mandated requirements. Here are the four main components that make up a level-funded plan:

  1. Administrative Costs: Administrative costs are fixed and charged per employee and will not change regardless of claims. Employers must pay these costs for network availability, claims adjudication, and prescription network.
  2. Aggregate Stop Loss Coverage: Aggregate stop loss coverage covers the entire workforce and acts similarly to the way a family deductible would for employees. Once either the group’s aggregate stop loss or an employee’s specific stop loss has been met, reinsurance takes over and pays the claims from there.
  3. Claims: This is the variable portion of level-funded health plans, but also where the most cost savings can occur. Unfortunately, this is an area where level funded health plans provide opportunities for carriers to increase their profits at the expense of an employer. As with a fully-insured plan, the insurance carrier estimates the cost that an employer’s group policy will charge for the year (including all four components) and then divide that number by the total number of employees. This number equals each person’s total premium, before it is split between the employer and employee. The difference with level-funded health plans is that if the claims are lower than originally expected, the insurance company will refund part or the full amount of the unused funds back to the employer.
  4. Individual Stop Loss Coverage: Employers pay this stop loss insurance to remain protected in the event that an individual claim is extremely high in a given plan year. If this individual claim hits the stop loss deductible, the reinsurance reimburses the employer for the claims.

BENEFITS OF LEVEL-FUNDED PLANS

There are many benefits of level-funded plans, to both employees and employers, including:

  1. Cost Savings: Fully insured health plans remove most of the risks from the employer, making the cost of the plan much higher for the employee. In contrast, a self-insured plan places the most of the risk on the employer, but has the greatest chance for producing savings in the form of claims being lower than premiums for the employee. Therefore, Level-funded health plans are the best of both worlds, making partial self-funding an easier and attainable option for a larger portion of employers, like small businesses. These plans save money for both the employee and the employer!
  2. Plan Design: Level-funded health plans provide employers with far more flexibility in plan design and are exempt from some ACA regulations such as the 80/20 rule we talk more about below.
    Regulation: Level-funded plans, even for small groups, do not have the same regulatory requirements as traditional, fully insured plans. This usually means that less administrative work is required from smaller companies who don’t have the same staffing size as larger ones.
  3. Regulation: Level-funded plans, even for small groups, do not have the same regulatory requirements as traditional, fully insured plans. This usually means that less administrative work is required from smaller companies who don’t have the same staffing size as larger ones.

6 Benefits to Attract and Retain Small Business Employees

Attracting and retaining employees is a constant struggle for organizations of any size, but it’s particularly so for small businesses. With smaller teams, employers need to hold onto talent whenever possible. And that can be a challenge, especially when resources are scarce as they are currently amid the lingering effects of the COVID-19 pandemic.

That’s why it’s critical for small employers to tailor their benefits offerings in a way that attracts and retains the most employees. One of the best ways to start this process is by surveying existing and potential employees. Employers can ask workers what types of benefits would interest them the most, then use that data to inform benefits decisions.

While each workforce will have unique needs and interests, there are some commonalities seen among small business employees. This article outlines six of the most popular benefits that small businesses are using to attract and retain employees.

1. Health Insurance

Health insurance is consistently one of the most desired benefits among small business employees. That may be because health care is so expensive and is unaffordable without employer-sponsored insurance. Amid the COVID-19 pandemic, having good health coverage is more critical than ever. This provides employers with an opportunity. By offering generous health benefits, employers can compete for top talent. In fact, doubling down on health insurance might be a better option for some employers than adding other ancillary benefits that employees don’t need or want.

2. Leave Benefits

The ability to take time away from work is an important consideration for employees. And, in the wake of the COVID-19 pandemic, employees may have more caregiving responsibilities than they had before—making scheduling flexibility all the more important. Leave benefits will vary by workplace, but they typically include paid time off (PTO), vacation days and sick time. These types of leave usually come with specific use requirements. For employers looking to attract and retain employees, expanding these benefits could be a great leverage tool. This may include allowing faster PTO accrual, providing more sick days or allowing for flexible scheduling.

3. Performance Bonuses

Employees want to be recognized for their hard work. Failing to do so can lower morale and affect retention. Introducing performance bonuses as an employee benefit can be a way to combat this. Performance bonuses will vary, but the general idea is to compensate employees in some way for a job well done. How this looks in practice will depend on the employer. For instance, employees might receive incentives such as gift cards, cash, additional PTO or other perks, depending on their achievement. However, before implementing such bonuses, employers should ensure compliance with any applicable workplace laws regarding employee compensation.

4. Retirement Planning

Financial security is very important to employees, and that sentiment grows as employees near retirement age. It’s also top of mind for those struggling financially thanks to the COVID-19 pandemic. Employees invest their time and energy into their work. As a tradeoff, many employees want their employers to invest service. Offering a 401(k) with contribution matching can be a powerful attraction and retention tool, as it demonstrates an employer’s investment in their workers in the long term.

5. Professional Development

Employees may leave a workplace simply because they want other opportunities or need more of a challenge, rather than being driven solely by compensation. Additionally, surveys suggest employees have been putting off job changes during the COVID-19 pandemic, meaning a wave of turnover may be coming soon. Employers may want to think proactively about ways to keep employees around.

In other words, when it comes to top performers, employers should be reluctant to let these employees go. That’s where professional development comes in. Generally, this involves cross-training employees on other positions or otherwise preparing them to take on additional responsibilities. This helps provide the employee with more growth opportunities while still keeping them within the business. Offering such development opportunities also signals to prospective employees that a workplace has upward mobility and is willing to help workers along with their career pathing goals—two factors that can weigh heavily in recruiting conversations.

6. Wellness Benefits

Wellness is a hot topic these days, and employees are looking more and more for employers who take wellness seriously. This can be especially true in the wake of the COVID-19 pandemic, where health consequences are interwoven with everyday decisions. In fact, through the lens of the pandemic, ignoring wellness initiatives may be interpreted as ignoring overall health—something employers obviously want to avoid.
Different workplaces will offer different wellness benefits, but the purpose of any of them is generally to increase employees’ overall well-being. For instance, benefits may include mental health counseling, health breakroom snacks, gym memberships, fitness trackers, yoga sessions or other perks. When it comes down to it, employees want to feel like their employers care about them as individuals. This means prioritizing well-being.

Conclusion

Knowing which employee benefits to offer as attraction and retention tools isn’t always easy. One of the best places to start is by surveying current and prospective employees, as the offerings are meant for them. Beyond that, the perks listed in this article have been shown to be popular among employees—making them a viable option to try as well.
However, these benefits aren’t employers’ only option to help attract and retain employees. Reach out to C3 Group LLC today to learn more about these perks and other potential incentives.

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Benefits Buzz Newsletter - June 2021

HSA/HDHP Limits Increase for 2022

On May 10, 2021, the IRS released Revenue Procedure 2021-25 to provide the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2022. The IRS is required to publish these limits by June 1 of each year.

Eligible individuals with self-only HDHP coverage will be able to contribute $3,650 to their HSAs for 2022, up from $3,600 for 2021. Eligible individuals with family HDHP coverage will be able to contribute $7,300 to their HSAs for 2022, up from $7,200 for 2021. Individuals who are age 55 or older are permitted to make an additional $1,000 “catch-up” contribution to their HSAs.

The minimum deductible amount for HDHPs remains the same for 2022 plan years ($1,400 for self-only coverage and $2,800 for family coverage). However, the HDHP maximum out-of-pocket expense limit increases to $7,050 for self-only coverage and $14,100 for family coverage.

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