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The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) released advance informational copies of the 2017 Form 5500 annual return/report and related instructions.

Specifically, the instructions highlight the following modifications to the forms, schedules, and instructions:

  • IRS-Only Questions. IRS-only questions that filers were not required to complete on the 2016 Form 5500 have been removed from the Form 5500 and Schedules.
  • Authorized Service Provider Signatures. The instructions for authorized service provider signatures have been updated to reflect the ability for service providers to sign electronic filings on the plan sponsor and Direct Filing Entity (DFE) lines, where applicable, in addition to signing on behalf of plan administrators on the plan administrator line.
  • Administrative Penalties. The instructions have been updated to reflect that the new maximum penalty for a plan administrator who fails or refuses to file a complete or accurate Form 5500 report has been increased to up to $2,097 a day for penalties assessed after January 13, 2017, whose associated violations occurred after November 2, 2015. Because the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015 requires the penalty amount to be adjusted annually after the Form 5500 and its schedules, attachments, and instructions are published for filing, be sure to check for any possible required inflation adjustments of the maximum penalty amount that may have been published in the Federal Register after the instructions have been posted.
  • Form 5500-Plan Name Change. Line 4 of the Form 5500 has been changed to provide a field for filers to indicate that the name of the plan has changed. The instructions for line 4 have been updated to reflect the change. The instructions for line 1a have also been updated to advise filers that if the plan changed its name from the prior year filing or filings, complete line 4 to indicate that the plan was previously identified by a different name.
  • Filing Exemption for Small Plans. The instructions indicate that for a small unfunded, insured, or combination welfare plan to qualify for the filing exemption, the plan must not be subject to the Form M-1 filing requirements.

Be aware that the advance copies of the 2017 Form 5500 are for informational purposes only and cannot be used to file a 2017 Form 5500 annual return/report.

By Danielle Capilla
Originally Published By United Benefit Advisors

When most experts think of group healthcare plans, Preferred Provider Organization (PPO) plans largely come to mind—though higher cost, they dominate the market in terms of plan distribution and employee enrollment. But Consumer-Directed Health Plans (CDHPs) have made surprising gains. Despite slight cost increases, CDHP costs are still below average and prevalence and enrollment in these plans continues to grow in most regions—a main reason why it was one of the top 7 survey trends recently announced.

In 2017, 28.6% of all plans are CDHPs. Regionally, CDHPs account for the following percentage of plans offered:

Prevalence of CDHP Plans

CDHPs have increased in prevalence in all regions except the West. The North Central U.S. saw the greatest increase (13.2%) in the number of CDHPs offered. Looking at size and industry variables, several groups are flocking to CDHPs:

Regional offering of CDHPs

When it comes to enrollment, 31.5% of employees enroll in CDHP plans overall, an increase of 19.3% from 2016, after last year’s stunning increase of 21.7% from 2015. CDHPs see the most enrollment in the North Central U.S. at 46.3%, an increase of 40.7% over 2016. For yet another year in the Northeast, CDHP prevalence and enrollment are nearly equal; CDHP prevalence doesn’t always directly correlate to the number of employees who choose to enroll in them. Though the West held steady in the number of CDHPs offered, there was a 2.6% decrease in the number of employees enrolled. The 12.6% increase in CDHP prevalence in the North Central U.S. garnered a large 40.7% increase in enrollment. CDHP interest among employers isn’t surprising given these plans are less costly than the average plan. But like all cost benchmarks, plan design plays a major part in understanding value. The UBA survey finds the average CDHP benefits are as follows:

CDHP benefits

By Bill Olson
Originally Published By United Benefit Advisors

The age-old adage, “you get what you pay for,” certainly holds true in the stop loss industry. I cannot stress enough how important it is to look at more than just the premium rates on a spreadsheet.

To understand the importance, let’s use the auto insurance industry as a comparable example. If you were purchasing car insurance for yourself, would you always accept the lowest price without doing a coverage comparison? How would you know if that insurance company might jack up your rates on renewal, or once you have an accident, or possibly delay your claims and find every reason or loophole not to pay them?

Apply that same thinking to stop loss coverage with larger dollar amounts at risk. Not every stop loss policy is alike and not every carrier is going to provide you with the coverage you are seeking. As an employer, you want to make sure the employee benefit plan you sponsor for your employees will not result in any significant liabilities for your company. You want the peace of mind of knowing there won’t be any surprises along the way.

All stop loss carrier policies are different. Over my 20-plus years in the industry, I have seen some very unique language and provisions in stop loss policies that most people would not notice without looking at the fine print. You must be aware of these potential provisions that could cause significant gaps in coverage between your employee benefit plan and your stop loss policy.

How can you best protect your company? You can start by working with your broker or administrator to narrow down the list of stop loss providers to those that best meet your needs. Brokers and administrators are best suited to understand the complexities of stop loss insurance and provide you with the best possible information regarding policies and choices.

By keeping this, and the following items, in mind during your selection process, you should be able to find a carrier to serve your needs.

The most important advice I can provide is to look beyond just price and at the actual stop loss policy. The lowest price doesn’t always mean the best value. So make sure to:

  • Read the stop loss policy before you purchase your coverage
  • Ask for a sample policy
  • Understand ALL the provisions of the policy itself
  • Ask your broker or administrator to review the policy if you don’t understand all the provisions

Additionally, there are a few other things you will want to look for, or ask about, when selecting a stop loss carrier. In part two of this blog, which will be posted the first week of April, I will discuss some of the most frequent items I have seen that cause issues or gaps in coverage.

By Steven Goethel, Originally Published By United Benefit Advisors

Dear Ron, Thank you so much for generously supporting [us] and our AIDS walk team this year. It was a lovely foggy Sunday morning in Golden Gate Park, with thousands of folks walking to fight AIDS. It has been a pleasure working with you over the years. You have saved us LOTS of money! I want you to know how much we appreciate all that you do!

- San Francisco, Non-profit organization

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