Juliet Lucero

Charter School HR & Employee Benefits Blog

Category: Human Resources

The History of Benefits Administration Systems

Technology is a part of every aspect of our lives. From video conferencing to video games, we all touch technology in some form or fashion. Unfortunately, in the Employee Benefits space, technology has always been very far behind the other areas of our lives. In my over 15 years of working in the Employee Benefits field, I want to really lay out the issues and benefits of the systems I have personally experienced over the years. 

When I was 17 years old, I learned HTML and made several of my own websites. I also learned how to install and edit various content management systems like WordPress for example. In high school and when I was out of college, I had the opportunity to work at my dad’s Farmers Insurance agency. Farmers had their own proprietary systems for managing their insurance programs. You would imagine they would being such a giant in the industry. But most Insurance Brokers did not have this kind of technology. In fact, I was hired at Regional Employee Benefits Council because they needed someone who knew how to make them a website who also had insurance knowledge. These were not common skills together.

After I completed the website for REBC, I began to delve more into the processing of the Employee Benefits paperwork. Back then, all the health insurance carriers required you to fax in paper applications. The process was:

  1. Print out a stack of paperwork including plan designs and blank applications
  2. Have employees complete all the paperwork and turn it in
  3. Review the applications for missing items
  4. Request missing items and wait for the responses
  5. Fill in the missing information on the applications
  6. Fax in the paperwork to the carriers
  7. Call the carriers a week later to verify if paperwork had been processed.

Roughly, this was the process and some companies are still doing this process today.

I started to figure out ways to make our office paperless while helping our schools to enroll in their benefits a little easier. It all started with a dental pool we created. I was able to create an online form for the school to simply type in their employee’s information. We then took that data and submitted it to the dental carrier electronically. This was the start to a whole new way of doing employee benefits, electronically.

Fast forward several years and systems started becoming more popular. However, these systems were designed primarily for very large employers. One system in particular took the small business industry by storm and became very popular very quickly. This company was Zenefits. This was a software company who was providing their BenAdmin system to employers for no cost as long as they were the broker on the Employee Benefits. This was a great way for employers to save time and the hassle of having to deal with paper applications. But in reality, there was no real connectivity to anywhere in the background. You had Zenefits employees manually processing enrollments and the software was more of just a user front end with mice running in a wheel in the background.

Plus, when you turn over your benefits and insurance to software people, you no longer are getting that experienced insurance consultant to help you navigate the ins and out of the industry. So the Zenefits model failed quickly and up popped more software companies including payroll companies that were now trying to get in on the action. I really love the idea of payroll integrated with the BenAdmin system. It makes doing your ACA reporting so much less of a hassle and it also saves your HR department some time with not having to enter data in 2 systems. However, a company like ADP are experts in Payroll, not in Insurance. When it comes to those hairy claims that need to be unraveled, you are not going to get much assistance for you and your employees.

Today there are many solutions for BenAdmin systems. The system that is right for your company is going to heavily depend on the benefit plans your company provides. In the school and public agency market, most of these entities are in some sort of a pool. The pools have their own rules and their own ways to enroll in benefits. I am going to give you some examples of the systems you can use for a variety of programs.

Small Group Plans (Under 100 employees) – These plans are typically aged based and the rates are published with the state for each health carrier. Many of the smaller charter schools I work with are in these types of plans. Depending on which carriers you offer your staff, the options of enrollment systems are very limited. Most small group Insurance Brokers provide their clients a system called EaseCentral. This system is unique in the fact that it populates the paper applications with the enrollment data and the employees can sign these applications electronically. However, the downside is the Employer or Broker must download the completed applications from the system and submit these forms to the carriers for processing. Some carriers allow Employers to key in the enrollments via their websites, but some carriers do not have this capability at all. 

CharterLife – This is an example of one of the Charter School Benefits Trusts for charter schools. Anyone that enrolls in their program must use their own proprietary system to submit enrollments. I’ve had charter schools enroll into this program using their system and it’s very simple and easy to use and employees are in the carrier’s systems within one week of enrolling. The downside is, if you don’t have all of your plans and programs through CharterLife, you must use two systems to enroll in your benefits or use paper applications for part of your enrollment process.

CALPERS – Many public agencies and school districts get their medical benefits through CalPERS. However, CalPERS only offers medical insurance. The dental, vision, life and voluntary benefits must be obtained elsewhere. One of the only BenAdmin systems that will download enrollment data to CalPERS is BenefitBridge. This is a proprietary BenAdmin system developed by Keenan & Associates, the company I work for. Schools can enroll in medical through CalPERS, Delta, VSP, and any other insurance carriers in one system. BenefitBridge then transmits enrollment data to the various entities. Keenan also has many other JPAs and Trusts that we manage where the enrollment data must be sent through BenefitBridge. This is very similar to the CharterLife Trust I was just previously speaking about.

I can continue to give you additional examples of programs and their BenAdmin systems, but which system your school needs is dependent on the programs you are in. Many schools are stuck in their programs for one reason or another. If you want to discuss your school’s specific situation, I would be happy to help you iron out needs. Please contact me at (760) 622-6080 or by using my Contact Form. You may also contact me through any of my social media accounts.

—Juliet Lucero

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Marketplace Notices that Your Charter School needs to be Aware of

The IRS is hiring! They have hired 700 new agents this year alone to enforce the Affordable Care Act. Many employers just think that nothing will happen to them. But these new laws are being enforced and your charter school will be audited too.

So you offer health insurance to your full time staff. What is considered full time at your charter school? In years past, full time meant 40 hours. But the ACA says full time is 30 hours. Do you have variable hour employees? If those employees are working 30 hours or more, you must offer them health insurance.

julietlucero-comLet’s say an employee works 30 hours and the school only covers 80% of the cost of health insurance. This employee does some research herself and finds out that she qualifies for a subsidy on the Exchange because her income falls within the guidelines. Her cost for health insurance on the Exchange with the subsidy comes out to be less than what her payroll deduction would be at the school. So she decides to not enroll in the benefits at your school and does not complete any paperwork. She then goes to the Exchange, purchases health insurance on her own, collects the subsidy and is happy because she is paying less than through her charter school.

Well here’s the problem. She does not qualify for a subsidy on the Exchange. Why? That’s because her employer (your charter school) offered her affordable coverage. However, she marked off a wrong box on the website saying she wasn’t offered affordable coverage because it wasn’t affordable she thought. It cost less on the Exchange so the Exchange was affordable but her employer’s plan was not. Can you see how many employees will think this same way?

So since she collected a subsidy on the Exchange and the IRS knows she is employed by your charter school, the IRS is going to send your charter school a notice. This notice will include a fine. The IRS will automatically assume that you did not offer her coverage and remember, your employee did not complete any paperwork or a waiver. So you have no proof that coverage was offered to this employee. This is why it is very important to obtain a waiver form for each employee that does not enroll in the benefits.

These are the notices that you may be receiving in the mail in the next few months:

  1. Marketplace Notice

These notices come from the Marketplaces (i.e., Exchanges) and are sent to employers who have an employee that is deemed eligible for a premium tax credit or cost-sharing subsidy.  The Federally-facilitated Marketplaces have just started sending out these notices.  Covered California plans to start sending out notices in the Fall of 2016.  Other states with State-based Exchanges may have also started sending out notices.

Employers may appeal the determination.  They are not required to do so.  Not appealing will have no impact on whether an Employer Mandate penalty is assessed by the IRS.  The appeals process for Federally-facilitate Marketplaces is through HHS.  Some State-based Exchanges are also using HHS, including Covered California, but others will handle their own appeals.

  1. IRS Notice

The IRS will separately send notices to employers to inform them that they may be assessed a penalty under the Employer Mandate.  The IRS has not provided dates when these notices will start to be sent but it’s anticipated they will start in November 2016 at the earliest.  Employers will have an opportunity to respond to the notice before any Notice and Demand for Payment is issued.

To view an example of the notices that you may receive in the mail, click the download now image below.

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If you have any questions regarding these marketplace notices or need any assistance with your employee benefits for your charter school, please contact me at (760) 622-6080 or by using my Contact Form. You may also contact me through any of my social media accounts.

—Juliet Lucero

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Paid Family Leave for Charter Schools in California

California’s rules and laws regulating employment leave are, to say the least, very involved. Covering different circumstances from sickness to having a baby, the Golden State currently has seven types of employee leave. Some of them are paid, whereas other promise job reinstatement for a specific amount of time. It isn’t surprising both employees and employers have a lot of questions. I am going to talk about how these laws will affect your charter school.

Paid Family Leave for Charter Schools in California

On April 11, 2016, California’s Government Brown signed the AB 908 bill, which is going to increase the percentage of wage substitution employees should receive when they take an absence leave from work. Brown explained that globalization has placed pressure on benefits and salaries. ‘’California is currently going more in the aggregate than other states,’’ he said. ‘’We are trying to make up for the gross inequality that isn’t a concept, but it is currently bringing down a lot of people’s lives who reside in California’’. He also said that providing more help to the lowest earners in California on family leave will assist in fixing the increasing income disparity in the state. Gov. Brown delayed approving the family leave bill during his negotiations with different labor unions in California to increase the minimum wage of the state. He accepted a plan to increase the minimum wage in California to $15 per hour by the year 2022.

The leave is going to be covered by California’s Paid Family Leave (PFL) or State Disability Income (SDI) programs. Payroll taxes include these programs, so there isn’t a direct effect on employers because of this change. However, the bill is expected to have an indirect effect on employers because of increased use of leave benefits and provisions by employees. Currently, employees in California can take six PFL weeks to care for sick family members or to bond with a newly adopted child, foster child, or newborn babies. Eligibility expires one year from the date of adoption, placement in foster care, or birth.  Throughout the leave, employees are going to get a 55% wage replacement to a weekly benefit worth $1,104.00, modified every year based on the state’s average wage.

The SDI program

The State Disability Income (SDI) program is for employees that can’t work because of pregnancy, sickness, or injuries that aren’t related to their job. To qualify for the program, employees should have their disability confirmed by a medical professional. Employees approved for receiving SDI will receive 55% of their overall wages. The amount is going to be up to the maximum amount of benefits up to fifty-two weeks. Many employees and companies in California add to the fund to pay the benefits, including charter schools.

AB 908 is going to do the following, starting January 1, 2018:

  • Increase the rate of wage replacement for the Paid Family Leave (PFL) or State Disability Income (SDI) programs from 55% to:-
  • $50 per week for employees with a salary more than $929 per quarter but lower than 33% of the average quarterly wage in California.
  • 70% of wages for employees who make 33% of the average quarterly wage in California.
  • Employees who make 23.3 % or more of California’s average weekly wage.
  • Employees who make 33% or more of the average quarterly wage in California.
  • States that the weekly benefit amount of employees shouldn’t go beyond the maximum employees’ payment temporary disability guarantee weekly benefit amount set the by the Industrial Relations Department.
  • Sunset the percentage of increase during January 1, 2022.
  • Remove the one-week waiting duration for Paid Family Leave (PFL) claims.
  • Entail the Employment Development Department (EDD) to inform the Legislature by March 1, 2021, on the use of Paid Family Leave (PFL) or State Disability Income (SDI) benefits based on categories of income, the cost of the increased wage rates of replacement, and the contribution rates of SDI.
  • Entail the Employment Development Department (EDD) to conduct a cost/benefit evaluation of the one-week waiting direction for SDI claims. The EDD should then report that study’s results to the Assembly Insurance Committee, Senate Labor, and Committee of Industrial Relations.

The amounts of payroll deduction funding both the Paid Family Leave (PFL) and State Disability Income (SDI) is set by the EDD on an annual basis. It is most likely that the payroll’s deduction wage ceiling and rate can increase under the new formula for benefits. It is also most likely that the legislature is going to pass legislation to make increases in the rates of wage replacement permanent, before the sunset date of the law.

Regarding companies’ and employers’ effect, this new law is supposed to make it easier for employees to take more time to spend with a new child. Also, the law will have an insignificant effect on public school districts in California because many school districts don’t pay into the State Disability Income (SDI) program. Most of the charter schools do pay into the State Disability Income (SDI program, and those schools will most likely be affected.

Exclusions Teachingis thegreatest actof optimism.

Fathers and mothers-in-law are not included as care recipients. On July 1, 2014, the law was expanded to give time off to take care of an ill grandchild, sister, brother, grandparent, or parent in law.

An employee might not receive Paid Family Leave (PFL) insurance benefits if they are qualified or are receiving disability insurance from the state. An employer shouldn’t give time off or hold the job for an employee unless the employee qualifies for the Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA).

My company recently conducted a webinar on California Family Leave Law. You can watch a recording of this webinar by clicking here: California Family Leave Law: Are CFRA and FMLA Finally Playing in Unison?

If you have any questions regarding family leave or need any assistance with your employee benefits for your charter school, please contact me at (760) 622-6080 or by using my Contact Form. You may also contact me through any of my social media accounts.

—Juliet Lucero

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