Zenefits made the list of the year’s most-read EBA stories twice, including a defamation lawsuit that ADP filed against the Silicon Valley startup. Other attention-grabbing articles included the Aetna-Humana merger, Cadillac tax repeal efforts, attempts to tweak the ACA and the elimination of broker commission.
Here are the top 10 stories that garnered the most pageviews in 2015:
In July, Aetna agreed to buy Humana, the second-largest provider of private Medicare insurance, for $37 billion in cash and stock to broaden its health care coverage. Analysts had predicted an Aetna acquisition was ‘imminent’ as carriers continue to grapple with the implementation of the Affordable Care Act and its impact on carrier costs and risk.
While there is plenty of disagreement between Democrats and Republicans when it comes to the ACA, there is one aspect that members of both parties agree on — the Cadillac tax should be repealed.
In April, Democrats unveiled their repeal effort, the Middle Class Health Benefits Tax Repeal Act, a bill that is co-sponsored by Reps. Joe Courtney (D-Conn.), Dina Titus (D-Nev.) and Donald Norcross (D-N.J.). The Republican counterpart, H.R. 879, was introduced by Rep. Frank Guinta (R-N.H.) in February.
In the beginning of 2015, Republicans ramped up their efforts to change the ACA’s definition of full-time employment from 30 hours a week to 40 hours a week. Business associations, employer groups and industry organizations joined the effort, urging House leadership to pass the bill, which it did, 252-172.
The Milwaukee, Wis.-headquartered insurance carrier Assurant Health announced in February that it will no longer pay commissions on new business in certain markets of the U.S. Assurant Health has cut commissions on new business in Florida, Nevada, Georgia, Indiana, Michigan, Pennsylvania and Texas.
A spokesperson for the insurer says the changes impact individual major medical products, but not the supplemental, short-term medical or small group products Assurant Health offers. “Assurant Health is making adjustments to our sales approach to manage our business appropriately,” says Mary Hinderliter, vice president of communications for Assurant.
Payroll services giant ADP filed a defamation lawsuit against Zenefits in June, heating up a quarrel between the companies that ignited when ADP disabled Zenefits’ access to its systems for shared clients.
In late October, ADP agreed to drop the lawsuit, giving Zenefits a big win in the months-long dispute fought in the public eye. Experts say advisers and other industry stakeholders feeling heat from similar market disruptors should heed the win as a ‘shot across the bow’ — a warning to remain flexible.
ACA reporting requirements for applicable large employers begin in 2016, but many employers and their benefit advisers remain confused about requirements for certain employers with special circumstances. Prompted by industry questions and concerns, the IRS has issued updated guidance to clarify some these circumstances and the requirements employers will be expected to comply with.
Beginning next year, applicable large employers must report whether: an individual is covered by minimum essential coverage; and that an offer of minimum essential coverage that provides minimum value was made to each full-time employee.
Employer payment plans for individual health insurance coverage that fail to comply with the ACA are subject to an excise tax of up to $100 per day ($36,500 per year) for each affected employee. An employer cannot reimburse employees for the purchase of an individual market policy, regardless of whether the employer treats the payment as a tax-free benefit or as additional taxable wages to the employee.
A new producer service fee arrangement introduced by Aetna looks to eliminate broker commissions on small-group business, a move advisers claim hurts their business, their clients and most likely doesn’t comply with the ACA’s medical loss ratio regulations.
Beginning with July 1, 2015 effective dates, Aetna’s new “Producer Service Fee model will be the compensation model on all new and renewing group business with up to 100 lives,” according to an e-mail, obtained by EBA, from the carrier to an agent in Georgia. The Producer Service Fee model requires brokers and their clients to negotiate a service fee that will be paid by the customer/employer to Aetna, and then paid out by Aetna to the broker.
In a unanimous vote, the House passed legislation in late September that would rescind the ACA’s expanded definition of a small employer. The bipartisan bill has had strong support from employers and benefit industry insiders who feared the expansion could lead to premium increases and jeopardize the ability for small and mid-sized businesses to compete in today’s market.
EBA’s April cover story focused on Parker Conrad, the co-founder and CEO of Zenefits, a San Francisco-based tech startup-turned brokerage.
Conrad has been known to make some inflammatory remarks about the profession —“these guys don’t do very much” and “all of the existing brokers today are all [expletive],” as he’s told national consumer media outlets. But Conrad believes the reason his peers dislike Zenefits comes down to simple economics.
“Zenefits is viewed by other brokers as a profoundly evil company because we’ve stolen a lot of business from folks. I get it. I get that that’s painful. I hate losing clients myself,” he says. But, he adds, such detractors have “no idea what we do,” having never seen the product or understood its value proposition.
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