Jerry Lewis in Cinderfella, (Everett Collection)

This is the time of year when your employees are contemplating whether or not to eat that remaining peanut brittle or move on with 2012.  For employers considering investing more in corporate wellness programs, we wanted to pass along  a quick story and some rules for your folks who head to the gym.

We recently visited with a prospective client who shared with us their meticulously overcooked wellness program where participants could receive points and olympic levels of achievement for enrolling online, taking tests, watching videos, and reaching out to coaches as “engaged” members.  These “valuable” points could then be used to purchase a lot of left over things that retailers failed to sell over the holidays.

After listening intently how the employer was told the wellness plan would save the company a lost of money, we politely explained that this program was in reality money that could have been invested in a different way.  Our Health Risk Solutions team will be doing more of these interventions throughout the year.  For those who are not afraid of the truth … our gift to you is Jason Gay’s 27 Rules (as printed in today’s WSJ) to share with your people:

1. A gym is not designed to make you feel instantly better about yourself. If a gym wanted to make you feel instantly better about yourself, it would be a bar.

2. Give yourself a goal. Maybe you want to lose 10 pounds. Maybe you want to quarterback the New York Jets into the playoffs. But be warned: Losing 10 pounds is hard.

3. Develop a gym routine. Try to go at least three times a week. Do a mix of strength training and cardiovascular conditioning. After the third week, stop carrying around that satchel of fresh-baked chocolate chip cookies.

4. No one in the history of gyms has ever lost a pound while reading “The New Yorker” and slowly pedaling a recumbent bicycle. No one.

5. Bring your iPod. Don’t borrow the disgusting gym headphones, or use the sad plastic radio attachment on the treadmill, which always sounds like it’s playing Kenny Loggins from a sewer.

6. Don’t fall for gimmicks. The only tried-and-true method to lose 10 pounds in 48 hours is food poisoning.

7. Yes, every gym has an overenthusiastic spinning instructor who hasn’t bought a record since “Walking on Sunshine.”

8. There’s also the Strange Guy Who is Always at the Gym. Just when you think he isn’t here today…there he is, lurking by the barbells.

9. ”Great job!” is trainer-speak for “It’s not polite for me to laugh at you.”

10. Beware a hip gym with a Wilco step class.

11. Gyms have two types of members: Members who wipe down the machines after using them, and the worst people in the universe.

12. Nope, that’s not a “recovery energy bar with antioxidant dark chocolate.” That’s a chocolate bar.

13. Avoid Unsolicited Advice Guy, who, for the small fee of boring you to death, will explain the proper method for any exercise in 45 minutes or longer.

14. You can take 10 Minute Abs, 20 Minute Abs, and 30 Minute Abs. There is also Stop Eating Pizza and Eating Sheet Cake Abs—but that’s super tough!

15. If you’re motivated to buy an expensive home exercise machine, consider a “wooden coat rack.” It costs $40, uses no electricity and does the exact same thing.

16. There’s the yoga instructor everyone loves, and the yoga instructor everyone hates. Memorize who they are.

17. If you see an indoor rock climbing wall, you’re either in a really cool gym or a romantic comedy starring Kate Hudson.

18. Be cautious about any class with the words “sunrise,” “hell,” or “Moby.”

19. If a gym class is going to be effective, it’s hard. If you’re relaxed and enjoying yourself, you’re at brunch.

20. If you need to bring your children, just let them loose in the silent meditation class. Nobody minds, and kids love candles.

21. Don’t buy $150 sneakers, $100 yoga pants, and $4 water. Muscle shirts are for people with muscles, and rhythm guitarists.

22. Fancy gyms can be seductive, but once you get past the modern couches and fresh flowers and the water with lemon slices, you’re basically paying for a boutique hotel with B.O.

23. Everyone sees you secretly racing the old people in the pool.

24. If you’re at the point where you’ve bought biking shoes for the spinning class, you may as well go ahead and buy an actual bike. It’s way more fun and it doesn’t make you listen to C+C Music Factory.

25. Fact: Thinking about going to the gym burns between 0 and 0 calories.

26. A successful gym membership is like a marriage: If it’s good, you show up committed and ready for hard work. If it’s not good, you show up in sweatpants and watch a lot of bad TV.

27. There is no secret. Exercise and lay off the fries.

Source: Wall Street Journal, Jason Gay, The 27 Rules of Conquering the Gym 

In March 2011, the coast of Japan experienced one of the most devastating tsunamis to ever hit a populated industrialized economy of this magnitude.  But the forces that drive a tsunami come as a result of shifts that occur beneath the surface of the water, not visible when the cause triggers the effect above the sea line.  This event became one of the most documented natural disasters in history due to two things.  The first is the advancements in meteorology that signaled the massive 8.9 magnitude earthquake along a huge stretch of Japan’s north-east coast and personal technology that allowed real-time media capture for anyone with a modern day smart phone.   

This real life tsunami is really a metaphor for what occurs beneath the “sight line” of our health plans everyday.  It’s also why pouring through outdated historical experience to project future costs is as outdated as the “old midpoint trend method we all learned in underwriting boot camp.  To have a more accurate line of sight into your health plan, you will want to collect three primary components: 1) first is to leverage a firm that can gather your firm’s claims in a longitudinal data analytics warehouse.  This helps identify key drivers of health costs and gaps in care 2) second is to get a baseline of biometric measures on the greatest number of engaged participants.  This helps identify certain health risks factors of an individual, and 3) the final ingredient comes about by gathering self-reported health assessment responses to gauge lifestyle related factors missed by the other two components.

When you have all three, Dee Edington’s (PhD, Health Management Research Center, University of Michigan) research confirms an accuracy rating of between 70-85% predictability in identifying low, medium and high risk individuals three years before they manifest.  Our firm utilizes the InfoLock system comprised of 1.3 million individual’s claim records over a multi-year look back period that helps our health risk management and clinical staff identify cost drivers and gaps in care.

Once your HIPAA compliant business associates can identify these individuals, your organization can begin aligning the health of your people with the health of your business.  Health management programs must be data-driven and evidence-based, otherwise you could find the waves crashing over your head with escalating trend.

 If your interested in learning which health carriers our InfoLock system automatically interfaces with please submit your question through our “Contact” section to learn more.

Health plan sponsors are required to supply, at least annually, a special notice to their enrollees who are also covered by Medicare. The special notice indicates whether the plan’s prescription drug coverage is “creditable” – that is, at least as good as Medicare Part D, on an actuarial basis. The “Medicare Part D notice” helps enrollees who are covered by Medicare make informed and timely decisions about whether and when to enroll in Medicare Part D, and avoid a Medicare late enrollment penalty. Although a plan sponsor’s obligation to supply a notice extends only to enrollees who are covered by Medicare, plans sometimes do not know which enrollees actually have Medicare coverage. As a result, plans often simply distribute the Part D notice to all participants.

As a part of my firm’s services, we furnish our clients with the actuarial attestation of Medicare Part D creditable coverage along with the sample notice. What should be important to plan sponsors is an impending distribution notice due this year as early as October 15th.  If you are interested in receiving our firm’s analysis of the rules impacting this notice distribution deadline, a complimentary copy is being made available to members of our BenefitU group in LinkedIn.  

Listen in and apply these principles to our corporate-wellness initiatives.  We could not agree more that intrinsic over extrinsic motivators provide longer-term results.  We welcome your comments below and invite you to read Dan Pink’s Drive to compare with Thaler and Sunstein’s Nudge. 

Now onto two federal healthcare requirements that had our employer plan sponsor clients wondering if sanity would prevail in Washington.  As a reminder, the statute requires employers with 50 full-time employees or more to offer health insurance to employees and dependents in 2014.  The law requires the coverage to be both “affordable” and “qualifying” in order to avoid penalties.

The answer to both is good news for employer plan sponsors.  The IRS used broad discretionary powers to define affordability if the employee is not required to pay more than 9.5% of an employee’s current W-2 wages.  The more muddier definition of household income through AGI verfication now gives way to something the employer has in their purview as a data point. So an employee earning $40k a year would be prohibited from single contributions in excess of $316.67 a month.

Additionally, employers caught a reprieve by IRS guidance on the new “qualifying” definition, which varies from the standard imposed in the state exchanges.  The 60% standard has now been interpreted to mean the percentage of charges covered by the plan.  So for every dollar of eligible health expenses incurred under the plan, Uncle Sam wants to see the plan picking up sixty cents of the tab.  Finally, employers were given another bonus by exempting plan sponsors from the “essential benefits” definition being crafted for plans under the state exchanges.

For more information and a nice write up by our Health Reform Advisor Practice, please go here.

Finding individual health coverage can be discouraging, especially when you have a health condition.  But this post is about throwing you  a lifeline.   Texas is among many states which offer the Pre-Existing Condition Insurance Plan (PCIP), a federally funded insurance plan which offers insurance to people with ongoing or chronic medical conditions, at prices that are now more affordable.

These plans offer a broad range of coverage, including primary and specialty care, hospital care and prescription drug coverage.  Maximum annual out of pocket cost for covered services is $5950 for network services and $7000 for out-of-network care.   With a little help from the federal government, annual premiums are on the decline.  Kathleen Sebelius, Secretary of Health and Human Services, announced recently that premiums have been reduced 10-20% in Texas.  Similar cuts were made in Georgia, Indiana, Louisiana, Mississippi, Nebraska, South Carolina, Tennessee, West Virginia and the District of Columbia.  Even greater cuts, some up to 40%, were made in Alabama, Arizona, Delaware, Florida, Kentucky, Minnesota, Nevada and Virginia.  And, most remaining states have opted to take this federal money and design their own similar programs.  So, no matter where you reside, you should be able to find a plan to fit your needs without denial from a reputable insurance company.

You may be eligible for the PCIP if you:

1. Have been without health coverage for at least six months
2. Have a preexisting condition or have been denied health coverage because of a health condition
3. Are a U.S. citizen or reside in the U.S. legally

To apply for coverage in Texas, you must provide proof of residency and proof that you have been denied coverage.  Proof of coverage denial may be a doctor’s letter dated within the last 12 months, a denial letter from a Texas-licensed insurance company, a letter of ineligibility from a Texas-liscensed agent or insurance company, or an offer of coverage that excludes one’s preexisting condition.

Getting the protection you need is simple.  Apply online at www.pcip.gov, or visit the website to print out the application and submit it by mail or fax.

For questions about this and other state and federally supported insurance plans, you may contact the Texas Consumer Health Assistance Program (CHAP); they have the resources to help you when you need it the most.  Contact 1-855-TEX-CHAP, Monday through Friday, from 8 am to 5 pm CST, or go online at www.TexasHealthOptions.com.

If this post helped you or a former employee looking for assistance … please let us know.  It is important for us to hear feedback when information we publish helps others.

Sources:  Dallas Morning News, TDI Newsletter

U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, today unveiled the Family and Retirement Health Investment Act of 2011, bicameral legislation to strengthen and expand Health Savings Accounts (HSAs) and Flexible Spending Arrangements (FSAs) for American workers and retirees. Companion legislation was introduced in the U.S. House of Representatives by U.S. Rep. Erik Paulsen (R-Minn.).The Family and Retirement Health Investment Act of 2011 will streamline these health care products and simplify them for American families, seniors, and entrepreneurs.

Specifically, the legislation will:

• allow a husband and wife to make catch-up contributions to the same HSA;
• remove the onerous new restrictions on the use of HSA and FSA dollars for the purchase of over-the-counter drugs;
• allow individuals to roll-over up to $500 from their FSA accounts;
• clarify the use of prescription drugs as preventive care that will not be subject to an HSA-eligible plan deductible;
• reauthorize the use of Medicaid health opportunity accounts;
• promote wellness by expanding the definition of qualified medical expenses to encourage more exercise and better diet;
• allow seniors enrolled in Medicare Part A to continue contributing to their HSAs; and
• allow for the purchase of low-premium health insurance and long-term care insurance with HSA dollars.

We are witnessing an adoption rate of HSAs that is tracking with similar “hockey stick” patterns experienced by 401(k)s when first introduced.  While this is not a cure-all for the fee for service sick care delivery system, we applaud efforts to better align trade offs that improve tax efficiency in health plan design.

Source: The United States Committee on Finance

The employee benefit landscape continues to grow more administratively complex.   A recent posting on the Independent Review Organization rules that came out of federal health reform is a prime example.  With so many dates to remember and notice obligations, we wanted to provide you with an updated edition of our Welfare Plan Calendar and Health Plan Notice Matrix.

In order to furnish you this hard copy spiral bound compliance resource, members of my team will need your ERISA plan anniversary date and contact information.

If you are interested in our offer, please go here and denote your organization’s ERISA plan anniversary date in the “FEEDBACK”  section.  Your customized materials will arrive in the mail shortly thereafter.

IRS Adjusts HSA Limits for 2012

Last week the IRS released the parameters for health savings account-compatible high deductible health plans, or HDHPs, for 2012.

We continue to endorse our clients use of these tax-efficient vehicles as a fundamental strategy to health plan design.  Three primary reasons are 1) these are the most tax-efficient benefit available … better than HRA’s, IRA’s Roth’s and FSA’s. 2) the value of HSA’s will grow with importance as employers will seek tax efficiency with looming federal, state and local deficits, potential repeal of Bush tax cuts and higher taxes coming in 2013 and 2014 from federal health care reform; and 3) HSA’s require a qualified high deductible health plan and the purpose of insurance is for infrequent and catastrophic events.  So if you give your employees an account they can contribute to that rolls over each year you will find your plan participants will begin to make more rational economic choices with regard to their health.

These limits are tied to changes in the Consumer Price Index by application of cost-of-living adjustment rules. The limits for 2012 are set forth below:

Annual HSA Contribution Maximum: $3,100 for single coverage, $6,250 for family coverage (increase from $3,050 and $6,150 in 2011)

Annual Catch-Up Contribution Maximum: $1,000 (for HSA eligible individual age 55 or older) – no change from calendar year 2011

HDHP Minimum Deductible: $1,200 for single coverage, $2,400 for family coverage – no change from calendar year 2011

HDHP Out-of-Pocket Maximum: $6,050 for single coverage, $12,100 for family coverage (increase from $5,950 and $11,900 in 2011)

My personal family HSA balance is now approaching $10,000.  I still have strides to go before I reach an ideal health state … but now there is a direct incentive for me to save and avoid the financial burden of illness.  Our firm will soon be releasing a communications kit designed for 2012 rollouts of CDHP plans with HSA’s.  Our smartest clients will realize time and money saved with a turn-key campaign that is well thought through before effective date launch.

The purpose of this post is to alert you to a deadline associated with the HRA/FSA to HSA conversions required by January 1, 2012.

With higher taxes coming our way, we have to applaud any health care fund that shields an employee from paying more taxes than necessary, whether it’s a Flexible Spending Account (FSA), Health Reimbursement Arrangement (HRA) or Health Savings Account (HSA).  Many employers were quick to jump on the HRA bandwagon when the private letter ruling allowed for their adoption, but HSAs are emerging as the clear winner with an adoption rate double that of HRA’s.  In fact, HSAs have been growing at a rate that has exceeded that of HMO’s when they were first introduced.  This SHRM article confirms that in 2011, 41% of companies adopted an HSA (compared to 20% HRA) with another 12 percent of companies expected to do so in 2012.

So if you jumped into the HRA game and are considering a move to a more tax-efficient account that will allow your employee skin in the game and greater tax savings … you need to know that IRS will allow a rollover conversion, but the one-time rollover opportunity ends in 2011.

In working with our clients through these conversions, we have compiled the following IRS service rules that govern the rollover:

For more information concerning one-time rollover opportunities, you may elect to read this Lockton Benefit Group Compliance Alert.