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  • Health insurance comes with many responsibilities for small business owners. Regardless of whether you’re trying to cut health insurance costs or reward specific employees, you may wonder exactly how those responsibilities affect who you offer health insurance coverage. Can you pick and choose who can be a part of your health plan, or are there federal regulations involved? As you may expect, there are some rules you need to follow.

    Employees at a company that offers group health insurance coverage.

    Do I Have to Offer Health Insurance to Everyone?

    If you’re a small business owner, the answer depends on if you decide to offer health insurance to your employees. Businesses with fewer than 50 full-time employees aren’t required to offer health coverage, although many do because good health insurance is an attractive benefit for employees. Once you decide to offer health coverage, you must offer it to all full-time equivalent employees. As we noted in our post on small business health insurance requirements, full-time equivalent employees include those who meet “an average of 30 hours of service per week for a calendar month or at least 130 hours of service in a month.”

    It’s important to note that this means that you aren’t required to offer health coverage to part-time employees. You can choose to include part-time workers in your plan, but the setup is the same as it is with the full-time employees; if you offer coverage to one part-time worker, you will be required to offer it to all part-time workers.

    Benefits PDF

    Do I Have to Offer the Same Health Insurance to Everyone?

    While you can’t pick and choose which individual employees get health insurance and which don’t, you don’t necessarily have to offer all your workers the same level of health insurance. As an employer, you can offer varying levels of benefits based on employee-based classifications. These distinctions include:

    • Full-time vs. part-time (if part-time is even offered health coverage)
    • Different geographic locations
    • Date of hire or length or service
    • Job titles

    While you may be able to justify different levels of benefits through employee classifications, it can’t be for discriminatory reasons. It’s illegal to base decisions on benefits or other employment privileges on any factors protected by law. These include:

    • Race
    • Color
    • Sex
    • Religion
    • Health factors
    • National origin
    • Age
    • Disability
    • Genetic information

    Offer Group Health Insurance Coverage Through a PEO

    One of the reasons that small business owners are hesitant to invest in health insurance is that it can be expensive. Fortunately, a PEO can offer you a more cost-effective solution that can help attract and retain top talent. 

    Since Group Management Services represents multiple small businesses, we can leverage our buying power to get lower premiums on quality plans. Not only can we help you offer an attractive health insurance plan to your employees, we can also assist you with benefits management so that you get the most bang for your buck while helping you stay compliant. Contact GMS today to talk to one of our experts about how outsourcing payroll administration can benefit your business.

  • Even if you only follow on the fringes of healthcare reform, the inception of the ACA in 2010 may have shed light on the lack of bipartisan effort surrounding reform policies. Regardless of which side of the political spectrum you sit, the ACA (Patient Protection and Affordable Care Act) is widely regarded as the most impactful healthcare policy since the rollout of Medicare & Medicaid by President Lyndon B. Johnson in 1965. Irrespective of the clout this policy holds in the eyes of leaders within our domestic healthcare system, it has not operated within its short eight-year tenure without controversy.  

    The debate surrounding the longevity of this policy continued last Thursday (June 7, 2018) in unprecedented manner as the Justice Department filed a briefing recommending that the U.S. District Court of Texas (Fort Worth Division) rule the insurance reform provisions of the ACA unconstitutional.

    Book of recent updates in healthcare reform.

    How We Got Here

    To understand the severity of the proposed lawsuit, we must briefly glance at NFIB v. Sebelius, a previous legal decision surrounding the ACA which cleared a path for the above briefing to be filed.

    In 2012, a group of 13 states, a pair of individual plaintiffs, and the National Federation of Independent Businesses filed a motion (in the District court of Northern Florida) that the ACA was unconstitutional. According to Supreme Court multimedia archive Oyez, “The plaintiffs argued that: (1) the individual mandate exceeded Congress’ enumerated powers under the Commerce Clause; (2) the Medicaid expansions were unconstitutionally coercive; and (3) the employer mandate impermissibly interfered with state sovereignty.“ The conclusion of the suit resulted in the Supreme Court backing the ACA under the precedence that the individual mandate “is an appropriate use of Congress’ power under the taxing Clause and is, therefore, constitutional” according to a case brief for NFIB v. Sebelius.

    The important take away from this dispute is that the ACA was backed by Congress under the idea that the individual mandate was a tax and that it was “severable” from other provisions included in the ACA. This means that the judgement of one mandate within the ACA can be siloed and will not affect the policy as a whole. 

    The Filing at a Glance

    On Dec. 22, 2017, the individual mandate was repealed as a part of the Tax Cuts and Jobs Act of 2017 written in by President Trump and his administration. In ordinance with the repeal, many right-wing-leaning states have proposed the idea that an individual mandate (as of today, the requirement to have qualifying medical insurance still exists) without a penalty to do so (previously written in as a tax) is unconstitutional. The process of proving unconstitutionality within the ACA is based on “inseverability.” In short, if one mandate within the ACA is unconstitutional, the entire ACA is then unconstitutional and should be eradicated. 

    Now as defined above, the unique nature of this case is that the Department of Justice not only supports this idea but is urging the District Supreme Court to render the ACA invalid without reference to the previously approved filing of severability in 2012. The inconsistencies in the law from 2012 to current are unnerving to many analysts following this case. The provisions have been approved by Congress and signed into federal law and are not meant to be easily challenged or rehashed within a legal setting with such overarching consequences. In 2016, the domestic healthcare system within the U.S. reached $3.3 trillion dollars annually and accounted for 17.9 percent of the Gross Domestic Product. The security of such would be woefully undefined if the ACA (and mandates within it) were to be diminished without proper recourse or without a proper replacement. 

    Impacts of a Successful Repeal 

    The major concerns surrounding the impending decision are ones that largely propelled the positive social opinion of the ACA. Namely, the pre-existing conditions clause that prevented individuals with chronic illnesses from being denied coverage through ACA exchanges. The current “community rating” system of the ACA is also at risk if this motion goes without congressional defense.

    With or without the most polarizing and divisive reform policy of the last five decades, the future of our domestic healthcare system is cloudy at best. Only informed citizens having insightful conversations will spur positive change. If until now you’ve been asleep at the wheel regarding healthcare reform, this briefing should serve as a wake-up call.

    Small business owners are especially vulnerable to the ongoing healthcare uncertainty. It’s difficult to keep up with the ACA and other key policies that can affect your business. At Group Management Services, we provide owners with access to quality health insurance coverage at reasonable rates and keep them informed about changes in policies that can impact their business. Contact GMS today to talk to one of our experts about how we can help your business through these uncertain times.

  • A recent article written by the Wall Street Journal  outlines some startling financial data in regard to our domestic health insurers and their cryptic billing process established by CMS (Center for Medicare/Medicaid Services). Although GMS typically focuses on the private insurance markets—as they are the most relevant for businesses—examining the continued failures of CMS may provide some insight as to why our domestic healthcare system operates so poorly and why prices for both public and private health insurance markets are sky-rocketing.  

    Costs associated with the U.S. healthcare system. 

    A Look into the Market’s Rising Prices

    Medicare is a socially-funded program meant to provide health benefits for tax-paying citizens age 65 and older and permanently-disabled individuals of all ages. Medicare, a majority of the CMS which also splits some funding with state and federal Medicaid programs, is typically divided into four parts, coined Medicare parts:

    • A (Hospital insurance)
    • B (Supplementary Medical insurance)
    • C (Medicare Advantage)
    • D (Medicare prescription drug benefit(s)) 

    Medicare is funded primarily by tax-payers and Medicare subscribers who are required to pay a monthly premium to utilize the benefits provided through CMS policies.

    What most citizens don’t know is that CMS is the largest buyer of healthcare policies in the world and files enough fraud, waste, and abuse statistics to land itself within the Fortune’s 500 top 50 based solely on the amount of money lost each year. That’s right, the fraud waste and abuse of Medicare in 2017 was enough to top revenue for entire organizations like Best Buy, Disney, and Fed-Ex. The figure also dwarfs the full budgets for programs like Homeland Security, the EPA, and NASA by tens of billions of dollars, if not more. 

    As astonishing as those statement may be, these trends have continued almost every quarter, year, and decade since 1965:

    Healthcare loss trends. 

    Contributing to this $60 billion eyesore is an antiquated billing system that largely remains confidential. What the WSJ highlighted (and what we’ll continue to discuss for the remainder of this article) are the overpayments made to Medicare Part-D insurers for inaccurate estimations of cost for upcoming fiscal years (FY). As detailed above, Part-D handles the Rx benefits for Medicare subscribers and is interestingly administered 100 percent by private insurers. 

    These “overpayments” surpassed the $9 billion mark from 2006-2015 and were paid out to private insurers on top of existing revenue for administering these Part-D plans. The question as to how $9 billion seemingly slipped through taxpayers’ hands and into the revenue stream of top-insurers is what’s intriguing… or maybe infuriating is the right word to use here. 

    The Bidding Process for Private Insurers

    In order to address that question, we’ll need to take a brief look into the bidding process for these private insurers and how re-payments by CMS are made on an annual basis.

    Every summer Part-D insurers send detailed cost-projections for what it would take to fund all Medicare Part-D subscribers’ prescription costs for the following year (about 40 million people). These projections are split into two main categories: Direct Subsidies and Reinsurance Subsidies.

    Direct Subsidies contain projections for the majority of services through Part-D. When insurers submit these bids and real costs fall below what was originally projected, CMS allows insurers keep a portion of the difference. Keep in mind that these “projections or bids” are what Medicare bills to taxpayers to ensure proper coverage. In this case, insurers are seemingly incentivized to inflate their bids (by an obvious but overlooked billing loophole) knowing they’ll get to keep some of what isn’t used by the Medicare Part-D population while taxpayers get to bear the financial brunt of these egregious errors. 

    Reinsurance Subsidies are siloed for Medicare subscribers that have extremely high-costing medications. These high-costing medications, sometimes referred to as “specialty” meds, can often times be upwards of $5,000 for a 30-day supply. Humira, a popular drug that’s used to treat Rheumatoid Arthritis among other chronic illnesses and is often advertised on television, will run you about $6,409 for a 28-day supply without applicable medical or prescription insurance. For these subsidies, insurers must pay back any overages in cost projections should they fall above what was actually spent. However, if insurers’ projections fall below what was actually spent, Medicare will fund the remaining amount. 

    Imagine you’re the controlling party for one of these large private insurers. If you could legally receive billions of dollars simply by “over-projecting” one of your bids and legally save billions of dollars by undercutting a different bid with the sum of those earnings or savings being pushed off to the subscribers you’re insuring and American tax-payers, what would you chose? 

    The Grave Reality of the U.S. Healthcare System

    Given the above details, the first question that comes to mind might sound something like this: “So Medicare Part-D allows 100 percent administration of a federally subsidized program by private insurance companies, but also allows said companies to submit their own budget forecasts and allows them to keep some of that allocated money if they’re wrong in creating those budgets?” With an 11 percent error rate in 2016 Medicare payments, it’s not hard to see how this staggering $9 billion figure is only a fraction of what the programs wastes annually. Applying these malpractices to a $3.5 trillion-dollar industry (the United States healthcare system, which is showing steady annual spending growth and will likely eat over 25 percent of the GDP within the next decade) and the grave reality of what’s at stake is easily recognizable. 

    I would highly encourage anyone interested to read more about the WSJ’s findings, but will conclude with the following:

    As the economic epidemic of our healthcare system continues to worsen, it’s articles like this from the WSJ that bring to light how much taxpayer money is truly wasted through an irresponsibly administered system like CMS. The issues found here can be replicated time and time again throughout various programs in our healthcare system and are a big piece of why healthcare costs, specifically insurance premiums, continue to climb. 

    Although it’s not always enjoyable to put these concerning statistics and unsavory business practices in frame for our readers, the transparency that GMS owes to our clientele will always reign. If you’re interested in working with realistic brokers to create modern solutions for your group’s health plan, contact GMS to speak with a dedicated healthcare professional.

  • In the past, business owners in Michigan had the option of whether they wanted to offer paid sick leave for their employees. However, Michigan adopted the Earned Sick Time Act (ESTA) Sept. 5, 2018, making it the 11th state to have a mandatory paid sick leave law in effect. Within a few months, the state’s legislature amended the bill, adopting the Paid Medical Leave Act (PMLA) as a modified version of the initial act that will go into effect starting March of 2019. 

    With all the changes in Michigan’s paid sick leave laws, it’s time for business owners in the state to take stock of exactly what the PMLA requires of them, if they should reevaluate their paid leave policies, and what they need to do to be compliant with the new law.

    An employee staying home through her company’s paid sick leave policy. 

    What the Paid Medical Leave Act Does

    The short answer is simple: staring in March, employees in Michigan will accrue paid sick time based on the amount of time they work. 

    Which Businesses are Affected

    While the ESTA originally impacted all businesses to some degree, the PMLA only covers employers with 50 or more individuals. However, small employers with fewer than 50 individuals may offer paid medical leave if they choose to do so.

    Which Employees are Affected

    The ESTA had a broader definition of eligible employees, which included full-time employees, part-time employees, independent contractors, and temps. The PMLA limits the scope of which employees are eligible for paid sick leave with a dozen exclusions listed out in the senate bill.

    • An individual who is exempt from overtime requirements under section 13(a)(1) of the fair labor standards act, 29 USC 213(a)(1)
    • An individual who is not employed by a public agency, as that term is defined in section 3 of the fair labor standards act, 29 USC 203, and who is covered by a collective bargaining agreement that is in effect
    • An individual employed by the United States government, another state, or a political subdivision of another state
    • An individual employed by an air carrier as a flight deck or cabin crew member that is subject to title II of the railway labor act, 45 USC 151 to 188
    • An employee as described in section 201 of the railway labor act, 45 USC 181
    • An employee as defined in section 1 of the railroad unemployment insurance act, 45 USC 351
    • An individual whose primary work location is not in Michigan
    • An individual whose minimum hourly wage rate is determined under section 4b of the improved workforce opportunity wage act, 2018 PA 337, MCL 408.934b
    • An individual described in section 29(1)(l) of the Michigan employment security act, 1936 (Ex Sess) PA 1, MCL 421.29
    • An individual employed by an employer for 25 weeks or fewer in a calendar year for a job scheduled for 25 weeks or fewer
    • A variable hour employee as defined in 26 CFR 54.4980H-1
    • An individual who worked, on average, fewer than 25 hours per week during the immediately preceding calendar year

    How Time is Accrued

    Both the ESTA and PMLA agreed that eligible employees are set to earn paid medical leave as soon as the act goes into effect March 2019. However, the FMLA changes the rate of accrual from one hour per every 30 hours to one per every 35 hours of service time. It also limits accrual to only one hour of paid sick leave in a calendar week. 

    In addition, the FMLA lowers the cap for paid leave to 40 hours per year instead of the ESTA’s 72. Time can be carried over into the next year, but usage is still capped at 40 hours. The PMLA also added an allowance for employers to add a waiting period of 90 calendar days before new hires can use paid sick leave.

    How Time is Used

    In terms of use, employees have a lot of wiggle room. Foreseeable leave, such as planned surgeries, procedures, etc., require up to seven days of notice. However, a sudden illness is not foreseeable, which means employees only need to give notice of sick leave as soon as reasonably possible. Earned paid leave can be used in one-hour increments, although the PMLA does permit employers to set a different increment policy in their employee handbooks.

    Another notable difference between the PMLA and the ESTA is that the amended bill gives employers more freedom to request documentation. Per the PMLA, employers can require reasonable documentation when employees use paid leave for absences of less than three days. In addition, employees have at least three days to provide the necessary documentation for absences.

    What it Means for Your Business

    If you have a business in Michigan and that business has fewer than 50 individuals, the PMLA won’t directly affect you. However, the act is part of a growing trend of more states adopting some form of required paid sick leave. This trend can serve as an opportunity to attract and retain better talent.

    Whether or not paid sick leave is mandatory for your business, you can still make it feel like a benefit for your employees. According to Access Perks, 88 percent of employees named sick leave as one of the most desirable PTO benefits. By offering paid sick leave—especially one that goes beyond any legally-required minimums—you can make your business more attractive to potential job candidates while rewarding your current employees.

    It is important to note that some business owners may be concerned that employees may abuse paid sick leave. However, that may not necessarily be the case. Monster notes that absenteeism did not notably increase when a paid sick leave law was passed in San Francisco and that the same employees who were likely to falsely call in sick in the past are the same who would abuse paid leave when it’s offered. 

    In fact, Access Perks notes that “89 percent of employees come to work sick with 19 percent admitting to doing this more than once a month.” By giving your employees the opportunity to take paid sick leave, they’ll be more inclined to use it when they really need it instead of forcing themselves to come to work and infecting other employees.

    How to Protect Your Business

    Regardless of your paid leave policy, you’ll need to adjust your policies and employee handbook. An outdated handbook can open you up to liability concerns, so it’s important to have your paid leave policy laid out so that employees have a clear understanding of the rules. It also allows you to have documentation in place to protect you from any legal claims against your company.  

    Another way to be safe is to work with experts who can help you roll out a new paid sick leave policy or any other program. As a Professional Employer Organization, GMS can help you establish an attractive benefits package and update your handbook appropriately. We can also help you stay ahead of new legislation or upcoming changes that may impact your business so you can act ahead of time. 

    Whether you need help with a paid leave policy or some other important business need, our Detroit branch or one of our other locations across the country can assist with risk management, outsourcing payroll, benefits administration, and other key HR functions. Contact GMS today to talk to one of our experts about how we can help your business.

  • When Donald Trump ran for the Presidency in 2016, a major plank of his platform was the repeal and replacement of the Affordable Care Act. In fact, pretty much every Republican in 2016 ran on that promise.

    In the summer of 2017, several Republican Senators and every Democrat Senator torpedoed that promise by not agreeing to a plan. Since then, this administration has made several attempts to sink the ACA where they could.

    A gavel of a judge blocking new association health plan rules meant to sink the affordable care act.

    The Trump Administration’s Attempts to Sink the ACA Through AHPs

    The first, and perhaps most powerful as far as Washington D.C. is concerned, attempt is the decision to no longer enforce the individual mandate. If you recall, there was supposed to be a financial penalty on any individual who didn’t have an insurance plan through an employer or on their own. The problem with that plan was always twofold:

    • If you weren’t working or weren’t filing taxes, there was no way for the IRS to collect that penalty.
    • In many instances, the penalty was less costly than the insurance itself.

    The administration began creating new rules for Association Health Plans (AHPs). These AHPs allowed “businesses and individuals [to] band together to create group health plans that offer less expensive coverage than the ACA.” In other words, Associations could pull together multiple employers and individuals into a larger group, offering better rates. In most cases, the trade-off was no protections for what was deemed “minimal coverage.”

    Recently, a federal judge ruled that the Trump Administration attempted an “end run” around the ACA and, in effect, violated the Affordable Care Act.

    Affordable Healthcare Options for Business Owners

    If you are a business owner and you thought these plans were a way to get out from under the considerable financial burdens of the ACA, you may be back at square one.

    Well, there may still be a multiple-employer healthcare option for you. If you would like to learn more about the large group buying power of a Professional Employer Organization (PEO), as well getting additional HR services and regulatory and tax protections, please contact GMS to talk to one of our experts today.

  • As we approach the 2020 political season, healthcare remains an eternal “hot topic” issue; one that acts as an economist’s reoccurring bad dream. Much like a bad dream, the obvious warning signs of our domestic system’s atrophy disappear into the cognition of the economist’s mind and are forgotten by mid-morning. The economist, much like the rest of the country, has an eerie feeling due to this reoccurring healthcare nightmare, but can’t quite seem to pinpoint the root of their discomfort or begin to answer the lingering paradox of “How can we make healthcare in the U.S. financially sustainable?”

    The answer to that question is a large, complex, and convoluted issue to tackle. An alternative approach is to look at our ongoing mistakes as an industry and start to peel back some of the fraud, waste, and abuse at least long enough to get our collective head above water to propose a semi-legitimate long-term solution. 

    A doctor pocketing money from a staggering healthcare bill. 

    Diagnosing a Questionable Healthcare Diagnosis

    Individuals, facilities, insurance entities, CMS, and providers are just some of the key players necessary to stop the financial hemorrhaging. Not often enough do we evaluate the role of the physician from an economic standpoint and their direct effect on the industry. A recently released edition of “Bill of the Month,” a crowdsourced investigation of medical bills by Kaiser Health News and NPR, allows us to do just that. 

    To paraphrase the article: A New York City patient went to a PCP (Primary Care Physician) with symptoms of a head cold. About to leave on vacation, this individual thought nothing of a typical provider visit to address some minor discomforts before traveling. A throat swab, a quick round of antibiotics, and a $25 co-pay sends this patient (aka consumer, customer, client, etc.) seemingly out the door without a hitch. 

    Upon returning from vacation, this healthcare consumer has a staggering $28,395.50 bill from their provider relating to the previous “head cold” visit. This physician ultimately sent the throat swab (claiming to test strep, among a myriad of other unlikely diagnoses) to a non-network lab facility with which this patient’s insurer (BCBS) did not have an established contracted rate. Normally, these tests run through an in-network provider would run the same insurer about $653 – a 191 percent price difference coordinated through the discretion of this physician. 

    As I read through the article, a handful of painfully obvious questions came to mind. Namely:

    1. Why intentionally use an out-of-network lab service?

    a. The physician office had applicable and valid insurance info from the patient and could easily check for a list of in-network providers. They chose to use an out-of-network facility.

    2. Why were so many unnecessary tests run for likely influenza (common cold) diagnosis?

    a. “In my 20 years of being a doctor, I’ve never ordered any of these tests, let alone seen any of my colleagues, students, and other physicians, order anything like that in the outpatient setting,” said Dr. Ranit Mishori in Kaiser Health News. “I have no idea why they were ordered.”

    b. “There are about 250 viruses that cause the symptoms for the common cold, and even if you did know that there was virus A versus virus B, it would make no difference because there’s no treatment anyway.”

    3. Why were antibiotics prescribed for a viral infection? 

    a. There’s a lesser-known, but just as frightening scenario where continued unnecessary antibiotic use within the general population will lead to widespread antibiotic resistance that will affect not only our healthcare industry but veterinarian and agricultural industries as well. Antibiotics cannot effectively treat viral infections. 

    Here’s the kicker from Kaiser Health News: “The third reason for the high bill may be the connection between the lab and Kasdan’s doctor. Kasdan’s bill shows that the lab service was provided by Manhattan Gastroenterology, which has the same phone number and locations as her doctor’s office.”

    Undoubtedly, this physician or practice is getting a kickback from the lab’s profit by billing this patient’s insurer an absurd and unnecessary amount. Coincidentally, Kaiser Health News points out that “Manhattan Gastroenterology” (the out-of-network lab running these tests) “is registered as a professional corporation with the state of New York, which means it is owned by doctors.” Maybe this primary care doctor in particular? 

    Now the point of this blog isn’t to uncover fraudulent billing practices. Those occur every minute of every day within our healthcare system. Rather, its aim is to point out that if we want anything close to a sustainable system for the baby-boomer generation’s progress into older age, or for the generations that follow, we’re all responsible to do our part in turning this thing around. That means you too, physicians. 

    Regardless of which individual ends up settling the $28,000 bill from this PCP, the moral of the story is that billing tens of thousands of dollars to the healthcare system opposed to hundreds, by choice, are the decisions that, when multiplied and repeated over decades, gets us to where we are today: a seemingly insurmountable amount of debt. Furthermore, and most important to employers, high claims like these that could and should be otherwise avoided will ultimately lead to higher insurance premiums in future years for the employer and its employees. 

    What can we (healthcare consumers) do to mitigate national healthcare debt?

    Staying informed, asking the right questions, and taking ownership of our personal health habits are surefire ways to reduce the expenditure and volatility of our health system. Working with consultants from an employer-centric company like GMS can only help educate employers on the successes and failures within our system and how those points can be used towards the advantage of those offering benefits while mitigating unnecessary financial loss. 

    GMS is an employer for employers, constantly striving to provide transparency and sustainability for those we serve. Contact a local office today to begin your healthcare partnership with GMS.

  • The holidays are typically a time of joy and celebration, but they also require business owners to make some additional considerations about holiday pay. This type of pay makes it possible for employees to stay home for a selection of holidays and still get paid for those days. However, this benefit isn’t always a guarantee depending on the needs of your business. 

    Are you unsure about how to handle holiday pay for your business? We broke down some common holiday pay questions to help you determine how holiday pay can affect your business and the best plan of action for your specific situation.

    A piggy bank with Christmas lights representing holiday pay. 

    Do Businesses Need to Provide Holiday Pay?

    While many businesses offer holiday pay, it is not a legal requirement. According to the Department of Labor, “The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations or holidays (federal or otherwise).” In essence, a holiday is treated just like any other workday. As such, employers would only pay non-exempt workers for the time they worked (exempt employees would simply receive their normal salary regardless of whether they had the holiday off or not).

    While holiday pay isn’t required, employers may opt to provide it to employees. The terms of the holiday pay is subject to an agreement between the employer and its employees, although you aren’t required to pay a premium rate specifically for holiday pay.

    Do Businesses Need to Provide Time Off for Holidays?

    As with holiday pay, employers are not required by federal law to provide time off on the holidays and may choose to close for certain holidays on their own. Holidays are considered regular workdays, so any employee who works those days is entitled to normal pay as opposed to overtime pay. 

    The one exception in regards to time off for certain holidays is that employers are expected to provide reasonable accommodation for any employees that observe a religious holiday. One way to accommodate this would be to provide floating holidays that allow workers to use their time off for an observed holiday. Other options include allowing employees to take a vacation day or unpaid time off for a specific holiday unless the employer can show that their absence would create undue stress for the business.

    What are the Benefits of Offering Holiday Pay?

    There are a couple reasons why you may decide to provide holiday pay. One reason is to give workers a chance to celebrate various holidays with their family and friends without having to worry about how that time off will affect their paychecks. By offering some of these days off along with holiday pay, you can show your employees some appreciation for their hard work throughout the year.

    Another reason why you’d offer some holidays off with pay is to make your company appear more competitive in the hiring process. While a holiday may be the same as any other day in terms of pay, they can feel a lot more important to your employees. Offering those days off with pay can help make a difference when trying to attract and retain talented people.

    Are All Employees Entitled to Holiday Pay if It’s Offered by the Company?

    If you decide to offer holiday pay, you don’t have to provide it to all your employees. As long as the basis of choosing who gets holiday pay isn’t discriminatory, you can provide the benefit to some employees and not others. For example, you can opt to provide holiday pay to only full-time employees or office workers if you so choose. However, you can’t base your decision on a protected classification such as age or race.

    How Should I Set up a Holiday Pay Policy?

    Since you dictate the specifics of your holiday pay policy, it’s important to include that policy in your employee handbook and communicate it to your employees. This will allow you to clearly list the exact details of your policy if you decide to provide certain holidays off and if you choose to provide holiday pay. The details of this policy should include:

    • A list of dates designated as holidays (whether it follows the list of federal holidays or a modified list)
    • Which employees are eligible for holiday pay
    • The rate for holiday pay or if there are any bonuses attached to working a holiday
    • How a paid holiday works if they fall on a weekend

    What’s the Right Call for My Business?

    Ultimately, the decision of whether you want to provide holiday pay or not is up to you. Some businesses that employ multiple non-exempt employees may not have the funds to provide pay for days off, while others may require people to regularly work on holidays. Each case is different, so it’s best to find an option that makes sense for your business.

    Running a business involves making several important decisions. This responsibility requires a lot of time and effort from any business owner, but you don’t need to handle this load alone. At GMS, our HR experts can help you manage a variety of key business functions ranging from payroll to benefits administration. When you need assistance, we can provide the services and expertise necessary to keep your business prepared for the future.

    Ready to talk to an expert about holiday pay or any other business need? Contact GMS today to talk to us about how we can help your make your business simpler, safer, and stronger.

  • As a business owner, you have to make countless decisions about the types of benefits your business offers. From health insurance plans to PTO, your benefits package impacts your employees and your bottom line. Deciding on the type of benefits you want to offer your employees, like maternity and paternity leave, can be a tricky situation.

    Two new parents with their baby while on maternity and paternity leave from their employers. 

    Is My Business Required to Offer Maternity and Paternity Leave?

    The answer to that question depends on the size of your company and its location. Maternity and paternity leave is regulated by U.S. labor law, which includes the Family and Medical Leave Act of 1993 (FMLA). This law applies to any employee who has worked for your company for at least 12 months and has logged at least 1,250 hours in that span. Any employee who meets FMLA criteria is then able to take up to 12 weeks of unpaid leave in a 12-month period for any of the following reasons.

    • The birth of a child and time to bond with that newborn child within one year of birth
    • The placement of a child for adoption or foster care and to bond with the newly placed child within one year of placement
    • A serious health condition that makes the employee unable to perform the functions of his or her job
    • To care for the employee’s spouse, son, daughter, or parent who has a serious health condition

    However, FMLA doesn’t affect every business. According to the Department of Labor, FMLA applies to “all public agencies, all public and private elementary and secondary schools, and companies with 50 or more employees” on a federal level. 

    There are some states with different rules in regards to which businesses are impacted by FMLA. For example, New Jersey updated its Family Leave Act to drop its threshold to 30 employees. In addition, New Jersey offers paid family leave. These individual state laws can differ dramatically from the federal norm, so you’ll want to check your local laws to see where your company stands in terms of your parental leave obligations. If your business does not meet the employee threshold for FMLA in your state, you are not required to provide paid or unpaid leave for maternity and paternity leave.

    Should I Offer Maternity and Paternity Leave Benefits Anyway?

    Even if FMLA doesn’t apply to your business, you may want to consider some form of maternity and paternity leave for your employees. There are advantages and disadvantages associated with your various parental leave options, so it’s important to identify some factors that may impact your decision.

    The costs of offering leave

    Your parental leave policy can have different financial impacts. Not offering a leave policy is the lowest cost option, at least in terms of how it’ll impact your day-to-day operations. Conversely, paid leave means that you’re still on the hook for paying your employees while they’re out of the office. In addition, the following factors can affect your bottom line whether you offer paid or unpaid leave:

    • The impact of lost productivity while your employee is on leave
    • The cost of a temp worker to pick up the extra work
    • The cost of covering benefits while an employee is gone

    All of these factors can add up, which can make the decision to offer some form of paid or unpaid parental leave a pricy policy. However, it’s important to also consider the financial impacts of not having a formal maternity or paternity policy.

    No maternal or paternal leave policy can be a big reason as to why an employee leaves your company – or why a potential job candidate accepts a job somewhere else. If a talented employee plans on having a child at some point, he or she may look for other opportunities to cut down on the amount of stress after childbirth and afford them more time to bond with that child. In fact, a study by the Center for Women and Work at Rutgers found that women are “93 percent more likely to be working nine to 12 months after giving birth than those who didn’t take leave.”

    Not only will that departure affect your business’ productivity, replacing that employee can cost as much as half of his or her salary. If you’re in a position where you want to avoid turnover, some form of parental leave policy may be the more cost-effective solution in the long run.

    Employees want paid leave

    Just how attractive is an opportunity for paid leave to a typical employee? BenefitsNews shared the results of a survey that asked workers about the most desirable benefits outside of health insurance and retirement plans. Paid family leave eked out flexible/remote work options as the most coveted option, which can make it a very desirable option to help you attract and retain talented employees.

    The growing desire for parental leave benefits hasn’t gone unnoticed. According to SHRM, more business have offered paid parental leave in recent years. The number of business offering paid maternity leave has nearly tripled between 2014 and 2018, rising from 12 percent to 35 percent. Paid paternity leave wasn’t far behind, increasing from 12 to 29 percent in that time.

    What are Some Parental Leave Options for a Small Business?

    Now that you’ve weighed a few factors that may impact your decision on whether you should or shouldn’t offer maternity and paternity leave. There are a few different options you can take based on the needs of your company.

    • No parental leave
    • Unpaid parental leave
    • Paid parental leave
    • A combination of paid and unpaid parental leave

    So which is the best choice? Ultimately, the decision lies with what’s right for you and your company. You’ll need to balance the financial implications along with how your policy can impact your employees, which requires an internal perspective from someone who knows and understands the company. 

    You’re the best person to judge which type of maternity and paternity leave policy works for your company, but you don’t have to make this call alone. At Group Management Services, we can help you determine which route may be best for your particular situation and put together a company policy to keep your employees informed (and protect you from potential claims). Contact GMS today to talk to one of our experts about how we can help you strengthen your business through employee benefits administration and other key HR functions.

  • Health insurance is one of the most sought-after employee benefits, but not all health plans work the same way. There are several different types of group health insurance that differ in terms of how the insurance is purchased and how it affects the group’s premiums and plan options.  

    What Is Group Health Insurance? 

    Group health insurance is a type of health care coverage that’s provided to a group of individuals, typically employees of a company or members of an organization. This form of insurance means that all members of the group are covered under one policy. As opposed to individual insurance policies, where each person’s risk is assessed individually, group health insurance allows for the pooling of risk across all members. This often results in more favorable premium rates for the entire group. 

    One of the key advantages of group health insurance is that it can provide coverage for individuals who might otherwise struggle to obtain insurance on their own due to cost or pre-existing conditions. Employers or organizations purchase the policy and offer it to their members, often extending the coverage to include dependents. 

    Benefits Of Group Health Insurance

    Group health insurance offers numerous advantages for both employers and employees. For employers, it’s a powerful tool for attracting and retaining top talent, as it demonstrates a commitment to the well-being of the workforce. Employees benefit from lower premiums and better coverage options, often with pre-existing conditions covered. The buying power of a group ensures more comprehensive coverage at a reduced cost. In addition, group health insurance plans contribute to a healthier workplace, leading to a reduced absenteeism and increased productivity. Overall, it’s a win-win situation that fosters a supportive and healthy work environment. 

    Group Health Insurance Options

    While all these health plans have certain advantages and disadvantages, it’s up to you to decide which makes the most sense for your needs. Here are some of the common types of group health insurance options available for small businesses.

    Fully-Insured Plans

    Of all the types of group health insurance, the fully-insured plan is one of the more traditional options. Fully-insured plans involve the insurance company taking on the risks involved with healthcare costs and charging your business an annual premium for the benefits in the insurance policy, which is partially paid for by the employees. 

    The insurer uses a variety of factors used to calculate group health insurance premiums, including:

    • Size and health of the group
    • Average age of the group
    • The employer’s claims history
    • Types of occupation
    • Level of coverage and add-on benefits

    Self-Funded Plans

    While the insurance company covers the expense of employee health costs in a fully-insured plan, self-funding places that burden on the employer. This can often lead to more affordable rates and more control over a plan, with the tradeoff of your business accepting the risk of having to pay for any catastrophic claims. 

    This path is often seen as an option for large businesses, but small groups can also take advantage of self-funded plans. Small businesses can opt for a partially self-funded plan with stop-loss insurance. This option limits your risk so that you can still reap some of the benefits of self-funding without taking on the entire burden in case any catastrophic claims occur.

    Level-Funded Plans

    Unlike the more traditional plans with annual premiums, level-funded plans are based on a monthly payment rate. Insurance carriers will use census information to determine the amount your small group should pay. This rate is based on factors like claims allowances, fees, and stop-loss coverage premiums. Once the year is finished, the carrier will adjust the monthly level based on group performance.

    Health Maintenance Organization (HMO)

    An HMO is a group coverage setup where group members pay for specific health services through monthly premiums. Through an HMO, you’ll have access to a network of healthcare providers and locations, but services will be limited to those that fall under that network. This arrangement allows HMOs to be more affordable than other types of health insurance plans, although seeing any physicians or facilities not included in your HMO network can result in a group member having to foot the full bill.

    Preferred Provider Organization (PPO)

    PPO plans are like HMO plans, except with more flexibility. PPOs feature a network of healthcare providers and facilities, but group members have the option to go to physicians or locations without being completely on the hook for the entire bill. Instead, these visits will result in higher co-pays and additional service costs, giving members some more freedom than HMO plans.

    High-Deductible Health Plan (HDHP) with a Savings Option (HDHP/SO)

    An HDHP is based around lower premiums and higher deductibles for group members. This means that members with this type of healthcare insurance will have to pay more out-of-pocket before the plan pays for its share. The tradeoff, however, is that this route allows monthly premiums to be lower, making it a good group health insurance option for employees who don’t use many medical services. 

    In addition, HDHPs can be paired with savings options like a health savings account (HSA). These accounts allow members to make tax-free contributions to an account that can be used to pay for healthcare costs, ranging from copays to major medical services. The funds in these accounts rollover every year, making them a great retirement savings option, too.

    Health reimbursement accounts (HRAs) are another potential savings option that can be tied to an HDHP. These accounts are similar to HSAs, except employers make the contributions instead of employees.

    Choose the Right Type of Health Insurance for Your Small Business

    It can be difficult to find the right group health insurance plan for your budget. Balancing benefits administration and budget can be overwhelming for anyone without a strong grasp of the healthcare system. 

    That’s why many small business owners work with a Professional Employer Organization (PEO) to help weigh their group health insurance options and handle the administrative burden of healthcare coverage. Contact GMS today to talk to one of our experts about how we can help you offer quality healthcare plans that work with your budget.

  • Changes in healthcare are prompting many small business owners to rethink the role of employee benefits like health insurance at their companies. According to PricewaterhouseCoopers, health insurance premiums are expected to rise by 6 percent in 2020, which can weigh heavily on your bottom line. Below, we explored some of the top health insurance trends that will impact small businesses and how you can adapt in the ever-changing benefits landscape.

     Small business health insurance is changing in 2019.

    Small Business Health Insurance Trends

    In order to stay competitive in an ever-tightening market, small business owners must develop savvy benefits strategies to attract and retain top talent. From trending workplace initiatives to increases to federal regulation changes, here’s how small business healthcare is changing in 2020.

    Increase Deductibles

    To combat rising premium costs, many small businesses are switching their insurance offerings to high deductible health plans (HDHPs). HDHPs can be paired with health savings accounts (HSAs), which allows employers to make tax-free contributions to their employees’ accounts and receive tax benefits. Additionally, the funds rollover every year, making them a great supplement for retirement savings accounts and an attractive employee benefit.  

    According to the Society of Human Resource Management (SHRM), 56 percent of employers offer HSAs as a benefit—a percentage that is expected to see rapid growth in the coming years. According to Devenir, HSAs have risen 12 percent year-over-year, with assets growing by 20 percent annually. The investment advisory and consulting firm projects that by the end of 2021, the HSA market will approach $88 billion in assets held by more than 30 million accounts.

    Prioritize Preventive Care

    With rising health care premiums, unhealthy habits can further drive up small business healthcare expenses. As a result, preventive care will become a larger priority for small business owners in the coming years.

    Already, the Centers for Disease Control and Prevention reports that almost half of U.S. businesses offer some type of wellness program. Moving beyond counting steps or logging water intake, initiatives like gym memberships, screening tests, and smoking cessation programs will be commonplace among small businesses in 2020. 

    Benefits PDF

    Offer Virtual Care

    Seeing a doctor in person can be inconvenient and costly when you factor in scheduling issues and co-pay fees. Many small businesses have found telemedicine, also referred to as telehealth or virtual care, to be a good solution. According to the National Business Group on Health, 56 percent of the companies surveyed currently offer telemedicine services to employees. NBGH projects nearly all companies offering group health care plans will also provide telemedicine by 2020.

    Telemedicine allows a patient to have a consultation with a medical provider via a computer, smart phone, or tablet. It’s an attractive benefit that allows patients to see a doctor around the clock, saving you and your employees time and money. In fact, insurance broker firm Willis Towers Watson found that employers could save up to $6 billion per year by providing telemedicine.

    Utilize Benefits Technology

    Small firms are increasingly looking to better utilize technology for help managing employee benefits. A Guardian Life Insurance study found that nearly half of all small businesses are more digital than paper-based—a percentage that will continue to grow as more business owners realize the low cost and high potential. 

    Migrating benefits administration to a web-based portal offers a simpler and more efficient way for employers to manage their back office in one place. In addition to managing benefits, small businesses can look to digitize payroll, employee reviews, timekeeping, PTO requests, and company communication.

    Improve Compliance

    As a small business owner, you know your employees, business, and industry like the back of your hand, yet when it comes to federal regulations, you’re likely left scratching your head. After all, it can be challenging for small businesses to stay up to speed on regulations and the changes made to them each year. 

    This past year was no exception, as we saw a few legal changes to health insurance. For businesses with at least 50 employees, business owners must offer the minimum essential health coverage that’s affordable or pay a penalty. In deciding whether to pay or play, keep in mind that penalties will increase by nearly 30 percent in 2020. 

    Outsource Benefits

    Managing healthcare is a timely chore for small business owners that takes them away from focusing on client relationships and workplace satisfaction. Perhaps that’s why so many small businesses have found that the best option is to outsource benefits management to a professional employer organization (PEO). 

    PEOs take on the responsibility of providing and managing things like health insurance, so employers can focus on growing their business. Not to mention, PEOs will also take on the regulatory liability of your employees, so small business owners can have better peace of mind. Working with a PEO also allows small business workers to gain access to big-business employee benefits like wellness programs and health, dental, life and other insurance offerings.

    Get Small Business Health Insurance

    With each passing year, healthcare will only become more complex. Small business owners will need greater support to navigate the changes and develop benefits strategies. 

    Group Management Services (GMS) provides a Master Health Plan, offering small business owners the best healthcare benefits at lower premium costs. We leverage our buying power through mass policies, so small businesses can purchase multiple policies like health, vision, dental and other types of supplemental insurance coverage. Additionally, GMS provides payroll and tax, human resources, and risk management services to further meet your small business needs. 

    Contact GMS today to talk with one of our experts about how your small business can offer quality health insurance at a lower cost.