Heading into the final quarter of 2023, employers will start to feel the impact of shifting benefits trends. While some of these changes are new, many are not.
As employers, understanding the benefits landscape is crucial as you evaluate your offerings to better meet employee needs, respond successfully to challenges and earn a competitive advantage.
In a recent webinar, Greg Puig and featured guest Eric Paley from Nixon Peabody discussed where employers should focus their efforts in the coming months. This article summarizes their findings.
A primary concern for employers should be ensuring their health plans are in order. While retirement plan fiduciaries are likely well-versed in navigating their responsibilities, many of the same compliance rules now apply to health plans as well.
We are beginning to see more legal action being taken against employers who fail to provide price transparency or have excessive fees associated with health plans.
To help mitigate fiduciary risk, employers must start thinking about their health offerings in the same way they think about their retirement plans. Many best practices can be directly translated; for example, if you have a committee for your 401k plan, you should make a similar one to regulate your health offerings as well.
Establish these best practices as soon as possible to help ensure you remain prudent and compliant with new regulations.
Since the public health emergency ended earlier in 2023, much of the COVID-era legislation has been terminated as well. While every state runs their Medicaid program a bit differently, they have steadily begun a redetermination process to determine who is still eligible for the program.
Many individuals who joined Medicaid over the past few years are losing their eligibility, which means employers can expect an influx of participants joining their plans outside of open enrollment. Losing eligibility for Medicaid is a qualifying event, which means participants can join their employer-sponsored health plan outside of open enrollment.
Keep it on your radar that you may have an influx of participants in your health plan who were not considered in original cost predictions.
Hospital networks and providers are constantly renegotiating fees/contracts with their respective health insurance carriers. However, there has been increased concern in the marketplace that current contract negotiations may take longer this time around for a number of factors.
Inflation, challenges in the health care job market, and the pandemic's negative impact on hospital finances collectively create a complex situation. Consequently, there will need to be an increase in what carriers ask for from a fee-based perspective that may slow down the re-contracting process.
If your contract is close to expiring, participants of your employer-sponsored health plan may receive notices that state their hospital network is no longer in the carrier system. While this usually gets sorted out before the contract is up, the process may be more drawn out than past years.
While SECURE 2.0 has been a massive conversation this year, many of the changes will not be implemented before 2024. However, there are a few items to keep in mind regarding plan design and operations.
One key change concerns the timeframe for imposing the new Roth catch-up contribution rule. While this change was originally supposed to start in 2024, the IRS delayed enforcement of these provisions for 2 years. We hope to get more guidance from the IRS over time.
There are a couple other plan design changes of which employers should be aware:
Even though legally employers can begin providing these changes to participants, many recordkeepers are not yet ready for them. Keep the lines of communication open with your recordkeeper to determine when to start rolling these out.
For the full conversation and more details, you can watch the recording here. If you have any questions, please contact us.
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