Attention has been focused on the idea of health insurance exchanges with the enactment of the Affordable Care Act (ACA). The law makes available multiple private insurance options in standardized coverage tiers through a federal or state sponsored exchange to people buying insurance on their own. Additionally, depending on income, they may be eligible to receive a tax credit to subsidize their premiums. Though not fully implemented in most of the country, the ACA also created SHOP exchanges for small businesses.

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An emerging option for employers

Both fully-insured and self-insured employers are looking to a new strategy that offers their employees diversity of choice, leverages technology to aid in making decisions regarding health benefits but still allows the employer the ability to manage its health costs from year-to-year. This strategy includes the deployment of a retail marketplace that offers a wide array of health insurance products to employees and sets an allocation of dollars per employee. This retail marketplace is often referred to as a private health insurance exchange or a “private exchange”.

What are exchanges?

Private exchanges are marketplaces of health insurance and other related products. Employers purchase health insurance through the private exchange, and then their employees can choose a health plan from those supplied. A big attraction for private exchanges is they allow employers to retain some involvement in their employees’ healthcare all while shifting to a defined contribution model.

What are the advantages to a private exchange?

There are two major classifications of exchanges that have emerged:

Single Carrier Exchange-This type of exchange is promoted by a single payor and targets employers that want to keep some control by choosing both the insurance carrier and design of the plan. Products can be customized and priced for the employee group or individuals, depending on how involved employers want to be in benefits design and negotiation.

Multi Carrier Exchange-This type of exchange is promoted by third-party intermediaries such as brokers or benefits consultants who will provide a broad range of payor and plan design options encouraging employers to take a more hands off role.

However, making the choice between a broker and TPA is similar to taking action in other areas of HR operations. You start by laying out the details of your business needs and objectives, and then determine which solution is the right fit. The process will give you insight on which is best for your company, at which point you can transition your employee retirement plan forward.

How is a TPA different from a broker?

A TPA consults with you to decide upon the best retirement investment vehicles available for your company’s specific needs, while also performing certain administrative tasks in accordance with a contract. The TPA is a registered investment advisor that helps you determine the advantages of different plan details as employer matching, IRA rollovers, employee deferrals and profit sharing. This person or organization isn’t a provider, but is rather a manager of a company’s plan to ensure it aligns with business objectives.

An insurance broker assists businesses with sorting through the vast array of employee retirement plans available, based on budget, size, objectives and other considerations. The broker facilitates the relationship between the company and a retirement plan vendor, but doesn’t actually provide any plan-related services or advisement. The task of selecting the right fit is somewhat challenging for companies to take on themselves, whether because they don’t have the time or aren’t knowledgeable in the field. Therefore, a broker is retained for the job.

Why choose a TPA?

If you’re looking for a close relationship with your employee retirement benefits provider, a TPA might be the better option. These organizations typically assign a specialist to your account, and this person serves as the point of contact for your entire company. The agent will have a comprehensive overview of your plan, accounts and other details; HR staff, employees and others have a direct line of communication to discuss questions and have concerns addressed by a credentialed investment advisor.

When is a broker a wise decision?

Companies may opt for an employee retirement plan broker when they’re looking for a person to help them find the right plan to fit their budget and business goals. A broker might be a good fit if you’re quite knowledgeable about retirement plans and benefits options you want, but you don’t have the connections to determine what vendors offer them. Once the broker points you in the right direction, they’re no longer involved with the process. Your relationship is with the provider.

What qualities are important when choosing a TPA?

• Reputation: Ask for referrals from similarly-situated companies and do research to find the right TPA. If appropriate, check licenses and industry registrations.
• Expertise: Your TPA should be knowledgeable in plan options and be able to offer creative, proactive solutions to maximize employee benefits.
• Communication: It’s essential that you get quick responses to questions and concerns, so make sure your TPA is reasonably accessible.

The choice between a TPA and an employee retirement benefits broker isn’t an easy one, but hopefully some of these considerations can help steer you to the right choice. Paypro offers an array of solutions to assist your company with administering a plan that coincides with your objectives, taking the burden off HR’s shoulders. Our specialists assist with daily issues, conduct periodic assessments and serve as an extension of your HR staff.

Paypro Corporation, a workforce management provider of payroll, HR, time and attendance, and employee benefits solutions, has partnered with Kronos SaaShr as a full suite licensee to deliver an integrated, single-database workforce management solution via the cloud to its customers. More than 1,000 organizations across the New York metropolitan area trust Paypro to deliver workforce management solutions combined with exceptional service that help turn payroll and HR processes into a strategic management asset and dynamic cost savings tool.

Ken Porcelli, chief operating officer, Paypro Corporation commented: “The Paypro partnership with Kronos SaaShr proves our commitment to exceptional service and technology. Our clients can provide their employees with easy-to-use solutions delivered in the cloud to effectively manage their business as well as their relationships with employees. As we continue to accelerate our own growth, this partnership will help our customers grow with us.”

The Kronos SaaShr partnership allows Paypro to further expand its workforce management and human capital management capabilities by offering customers a complete solution on a single cloud platform that is accessible anytime, anywhere and is easy to use for managers and employees alike.

“Paypro’s expertise and longevity in the workforce management market is a benefit for all its customers. The Kronos SaaShr partnership will enable Paypro to offer several innovative technology solutions running on a single database in the cloud while further improving its ability to provide the high-quality service its customers have come to expect”, remarked Bob DelPonte, vice president and general manager, small and midsize business, Kronos.

By offering a single platform for payroll, HR, time and attendance, and employee benefits, Paypro can provide its customers with the tools to manage their people and help grow their business while continuing to offer consultative services through a dedicated team of payroll, tax, time and labor, and employee benefits specialists.

Through its partnership with Kronos SaaShr, Paypro is now uniquely positioned to help its customers more effectively manage their workforces with an intuitive platform that helps control labor costs, minimize compliance risk, and improve productivity while empowering employees with increased self-service functionality to submit time-off requests, manage benefits, and access critical payroll data and tax documentation.

With such a mammoth project at hand, it’s helpful to know the proper items to put on your evaluation checklist. Here are four key steps as you’re choosing the right HRIS for your company.

1. Initial Considerations and Needs Assessment

It’s important early on to determine who will be spearheading the selection process, whether it’s the in-house HR or a consulting firm. Smaller HR departments that are busy with daily operations might need some help from professionals, so hiring an expert may be a wise choice.

The initial stage involves determining organizational needs as well. HR managers certainly have a wish list of features and functions, but there’s also a budget to consider. Companies just getting started with HRIS might start small with integrated payroll or build time and attendance tools onto their existing system. Because benefits administration is growing in complexity and promises to be a challenge, this might be a consideration as well.

2. Evaluate Vendors Suitable for Company Needs and Goals

Now that you’ve identified requirements and future needs, it’s time to work on a ratings system to assess the vendors that offer suitable HRIS. Create a list of specific requirements and include desirable features. Then, check off whether different vendors and their products fit the bill. Some items might include:

• Integration with existing payroll system
• A combined HR/payroll package
• Performance management functions
• Time and attendance monitoring
• Reporting capabilities, including custom
• Job and pay history
• Benefits administration
• Employee self-service
• One on one support

3. Demonstrations

Once you’ve narrowed down your list of potential HRIS vendors, you should start scheduling demonstrations of their products. Select 3-5 companies to do an onsite demonstration if possible, though an online demonstration is a common way solutions are showcased. Use the list of requirements that you created during Stage #2 to ensure that an HRIS meets your needs and prepare a list of questions in advance. You might consider assigning a value to each of the items on your checklist so you can rate solutions when you’ve seen all demonstrations

4. Final Decisions

As you’re coming closer to a final decision, it’s time to do reference checks and talk with the vendor’s other customers. Then, reconvene your selection committee for one final walkthrough of your requirements, concerns and questions. When you’re down to just two choices, bring out the scorecard to see how well each company compares to the other. You should be able to reach a HRIS decision at the conclusion of this phase.

Hopefully, these steps will help guide the evaluation process as you’re looking for an HRIS that suits your needs. At Paypro, we understand the importance of implementing robust solutions that focus on each essential HR function, from payroll and taxes to benefits administration and ACA compliance. Contact us and let us tell you why our HRIS meets all your business objectives.

Unfortunately, COBRA can be difficult to manage in an organization, especially for business owners who are inexperienced with it. Here are some of the best practices for handling COBRA concerns in your organization.

Understand the Difference between COBRA and the Affordable Care Act

The biggest difference between COBRA and the Affordable Care Act (ACA) is that COBRA is continuation coverage for people who have recently left a job or were laid off.

The Affordable Care Act is a sweeping reform to healthcare, both employer-sponsored and individual. The Affordable Care Act has resulted in the creation of insurance marketplaces, where employers and employees can go to shop for the plans that work best for them. COBRA does not have this type of open plan system; it is limited to one plan, the same one that the employee had at their former workplace.

Generally speaking, someone who has eligibility for COBRA will also be able to purchase an insurance plan on a state’s marketplace. However, COBRA usually requires the policy holder to pay for the full cost of the insurance premium, while the Affordable Care Act provides tax credits for citizens below a certain income level.

Know who is eligible

COBRA isn’t just for employees; it also extends to their dependents, including spouses and children. However, there are some qualifying events that may cause a person to lose COBRA coverage. For example, if an employee divorces their spouse, they can only get COBRA coverage for a maximum of 36 months after the divorce is finalized. This is why it’s important to take a thorough survey of your team and understand who is eligible for COBRA benefits.

Provide employees with sufficient information

It’s very important that your staff knows their rights when it comes to COBRA and other insurance concerns. For example, last year the Department of Labor announced that employers must make it clear to employees eligible for COBRA that they are allowed to choose a plan from the Health Insurance Marketplace. You should also be certain that you have a resource available for them to consult with when they need to get questions answered about the various employer-sponsored insurance options that are available.

Keep up to date with legislation and eligibility changes

It’s vital to make sure that you are up to date on laws that relate to COBRA and the Affordable Care Act, as this is an area that is currently changing quickly as a result of new legislation going into effect over the next few years.

To help you create an easier, more efficient system of monitoring, consider investing in modern tools designed to simplify the way that businesses handle COBRA and other insurance concerns. Paypro offers numerous HR solutions to help manage insurance plans, as well as a number of group health options to ensure that your employees have access to all of the health insurance that they need. You can also turn to Paypro for help with your benefits administration: the Employee Self-Service platform allows your team to get the information they need, while our Benefits Specialists are able to provide expert insight into how you should be managing employee benefits. Paypro has everything your business needs to spend less time worrying about staying compliant with insurance laws and more time leading the company to success.

Flexible spending accounts (FSAs) continue to garner significant interest and questions from employees during open enrollment. But open enrollment doesn’t have to be complicated. The following tips can help employers to educate their workforce about the benefits of these tax-advantaged accounts.

Tips for Employers

Last year, the U.S. Treasury Department and IRS made some favorable changes to FSAs by altering the long-standing “use it or lose it” rule, allowing employers to offer a carryover of up to $500 in unused FSA funds to the following year or to continue a grace period option giving a two-and-a-half month extension to spend remaining FSA funds. FSAs cannot have both a carryover and a grace period option, and employers are not obligated to offer either extension.

Employers should consider their options:

• If you recently changed your plan documentation to allow for a carryover option, communicate to your employees about this feature before and during open enrollment. Employees may not be aware that they would be able to carry over up to $500 in unused FSA funds to the next year.
• If choosing to keep the grace period option, emphasize in your benefit communications that employees should keep track of their plan-year deadlines and use their available balance during the year to avoid forfeiting FSA funds.
• Educate employees about FSA-eligible expenses covered by their plan, including qualified medical services and medical products for themselves and their dependents, to reduce confusion and promote use of this benefit.
• Offer an FSA debit card to lower the amount of paperwork participants must fill out for reimbursement.
• Point employees to an online FSA calculator and other resources that will help them understand their account better.

Tips for Employees

Open enrollment communications are an opportunity to provide employees with the following pointers on FSA use:

• Learn about plan extensions. Check if your FSA offers a carryover option or a grace period.
• Keep track of deadlines. Be aware of how much you contribute to your FSA and how much you’ve spent per month by checking your account balance throughout the year.
• Research eligible expenses. Read your plan guidelines to know what your FSA plan covers in terms of qualified products and services.
• Calculate your contribution. Use an online FSA calculator to estimate yearly expenses and learn about the savings available to you through these plans. If you’re unsure about how much to set aside, go for a conservative estimate, but know that you can contribute up to $2,500 in pretax funds per FSA account.
• Ask questions before open enrollment. Open enrollment can be stressful, but if you are well-equipped by understanding the plan, coverage and reimbursement policy, then enrolling will be a breeze.

In addition, here are some ways for employees to use their accounts that they may not be aware of:

• Prep for warm weather travel with sunscreens and other FSA-eligible products.
• Relieve muscle pain and keep moving with hot and cold packs.
• Update a first-aid kit for your home, office or car.
• Schedule annual dental and vision exams, and use your FSA to cover out-of-pocket expenses related to these visits.

Source: SHRM