Healthcare Reform Updates

DOL Releases Proposed Rule Expanding Association Health Plans

Earlier this month, the U.S. Department of Labor (DOL) issued a proposed rule to expand the opportunity of unrelated employers of all sizes (but particularly small employers) to offer employment-based health insurance through Association Health Plans (AHPs). This rulemaking follows President Trump’s October 12, 2017 Executive Order 13813, “Promoting Healthcare Choice and Competition Across the United States,” which stated the Administration’s intention to prioritize the expansion of access to AHPs.

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New Maryland Paid Sick Leave Law

The Maryland General Assembly voted on January 12, 2018 to override Governor Hogan’s veto of the “Maryland Healthy Working Families Act,” a bill that will require Maryland employers to provide “Earned Sick and Safe Leave” (ESS) to employees.  The law will go into effect on February 11, 2018 unless the General Assembly acts to delay its implementation.

The new paid sick leave law applies to all employers in the State of Maryland (including a unit of State or local government), regardless of size.  Employers with 15 or more employees will be required to provide employees with paid leave for the reasons listed below, and employers with fewer than 15 employees will be required to provide unpaid leave for those same reasons.  The number of employees is calculated by using the average monthly number of all employees (including full-time, part-time, temporary, and seasonal) who were employed during the immediately preceding 12 months.

Employers must allow employees to earn ESS at a rate of at least one hour for every 30 hours worked, up to 40 hours a year.  Employees may carry over ESS from year-to-year, although the carryover amount may be capped at 64 hours. The total amount of ESS that an employee may actually use in a year may also be capped at 64 hours.  As is the case with comparable laws in jurisdictions such as Montgomery County and the District of Columbia, employers may use Paid Time Off (“PTO”) plans to meet their Maryland ESS obligations.

Employees may take ESS for the following reasons:

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DOL Announces April 1 Applicability of Final Disability Plan Claims Procedure Regulations

The U.S. Department of Labor (DOL) announced its decision for April 1, 2018, as the applicability date for ERISA-covered employee benefit plans to comply with a final rule (released in December 2016) that imposes additional procedural protections (similar to those that apply to health plans) when dealing with claims for disability benefits.  In October 2017, the DOL had announced a 90-day delay of the final rule, which was scheduled to apply to claims for disability benefits under ERISA-covered benefit plans that were filed on or after January 1, 2018.

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2017 HR Technology Conference & Exposition Recap

HR Tech 2017 is now in the history books. We thought it would be helpful to share our take aways from the Annual HR Tech Conference. This event is attended by every major provider in the industry and is the go-to place to learn about up-and-coming start-ups. We sent our team to gather as much information as possible about new and existing applications, industry trends and best practices. Here are our team’s big takeaways which we have organized around three themes:

  • Industry growth
  • Digital transformation
  • Artificial intelligence
Industry Growth
  • Over $5.5 billion have been invested in HR tech start-ups since 2014! There has been more money invested in HR technology in the past three years than in the previous 20 years combined.
  • An ex-senior VP of Google reviewed the six steps for creating a team and organizational innovation:
  1.  Connect people with a mission that matters.
  2. Tap into and interdict motivators; team, pride, autonomy.
  3. Reduce fear and increase psychological safety.
  4. Build portfolio of moon shots and roof shots.
  5. Know your enemy (and it’s not in this room).
  6. Be lucky and encourage casual collisions.
  • The much-awaited 20th edition of Sierra Cedar HR Systems survey was launched and some quick highlights are:
    • 40% increase in Cloud adoption.
    • 5% increase in overall HCM satisfaction.
    • Increased movers want more customizable and better service.
    • Biggest growth areas include talent management, recruiting analytics.
  • The mid-market is driving HR technology (defined here as less than 5,000 employees). HRWINS debuted its 2018 Future of HR Technology Report which revealed some interesting insights about the new market:
    • The new market is on the rise. This is where employment happens in the U.S.
    • Mid-market businesses are adopting HR technology at accelerated rates--significantly impacting the direction of HR technology innovation.
    • More than 50% of mid-market is considering a change in payroll systems this year.
    • The biggest mid-market challenges are in integration and ease of use.
Digital Transformation
  • “86% of companies say their organization’s structure is getting in the way of their digital transformation”, “65% of people view technological disruption as an opportunity rather than a threat”. Priorities to focus in on digital transformation:
  1. Foundation and data—You can’t build on an unstable foundation.
  2. Work force experience—Focus on how it will make them feel.
  3. Automation versus digitalization—Stop thinking linear.
  4. Reskilling of HR—New skills might be required in your current team.
  • Important concept of digital transformation is that HR technology isn’t a destination, but is “intravenous” to the work force and should be running through the veins of all organizations, influencing every process. In short, these are not tools for HR, but tools for your employees. However, the true value of HR technology isn’t revealed without first having a vision. Employers must set goals to see valuable returns.
  • Some comments that were heard relating to people and changed management that we found insightful:
    • “HR transformation requires changed management.”
    • “You have to create your vision for transformation and sell it for success.”
    • “Unlock the power of your people.”
    • “Technology is the enabler of strategy.”
    • “The difference between a company being okay and being awesome is its people.”
    • “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”
    • “Work force technology—it’s no longer software for HR—it’s for employees.”
Artificial Intelligence (AI)
  • Artificial intelligence (AI) is taking the HR technology world by storm. In their latest systems upgrades, SAP SuccessFactors, ADP, Workday, Ceridian and Oracle all showed hallmarks of AI.
  • Although sales of AI tools are brisk, currently there is no fully-realized AI system available. AI needs time to learn and adapt just as we do. If you’re buying AI, make sure you are really buying AI and not complex analytics.
With all of the changes recently in the area of HR Technology, we encourage all of our clients who have not reviewed their marketplace, pricing or new enhancements in the last two years to get in touch with our Director of HR Technology, John Tunney, to review their situation. A brief phone call could help you determine if any opportunities exist that are not being leveraged.

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New Tax Law will Change the Individual Mandate and Affect Other Employee Benefits

What:  The Tax Cuts and Job Act (the "Act") makes significant changes to the Affordable Care Act's individual mandate. The Act also makes other changes to tax rules that may impact employer-sponsored benefit offerings.

When: President Trump signed the Act into law today.  Changes to the individual mandate will take effect in 2019. The effective date of many other provisions in the Act are slated to take effect in 2018 and others may be delayed even further.

Who: While the main purpose of the Act is to reform U.S. tax law, the Act does contain provisions that will impact the insurance industry and employer-sponsored benefits. This update is intended to provide a high-level summary of these provisions.

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