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As a dedicated broker in the construction industry, we pride ourselves on going above and beyond to meet the evolving needs of our clients. Recognizing the critical importance of subcontractor prequalification and the power of analytics, we have forged strategic partnerships with leading firms to provide comprehensive solutions. One such partnership is with Maple Insight, a company formed to address these specific industry challenges and deliver exceptional value through innovative analytics. A well-structured prequalification process can be the key to securing the right project partners and avoiding the risks of costly Subcontractor delays. For Construction Managers and General Contractors (CM/GCs), prequalification is essential for identifying Subcontractors who meet both financial and operational requirements. For Subcontractors, a thorough prequalification submission can unlock new project opportunities. This article provides actionable steps for both CM/GCs and Subcontractors to optimize the prequalification process. By emphasizing relevance, precision, and clear communication, here are a few strategies for making the prequalification process as effective as possible for all involved. Focus on Relevant Information Construction Managers : Design your prequalification process to gather only information that genuinely matters. Avoid generic questions that add little insight. For instance, asking Subcontractors about their largest project completed may not be useful for assessing a Subcontractor’s fit for a smaller, highly specialized, or time-sensitive project. Further, information revealed by questions regarding legal and safety history often must be verified independently anyways to ensure accuracy, regardless of the response. If the process does not yield reliable, relevant data that screens Subcontractors for the unique needs of each project, it risks becoming a cumbersome formality. Subcontractors : Invest the necessary time to provide complete, honest, and relevant information. Ensure each response is accurate, detailed, and clear. Avoid submitting incomplete or vague answers just to move through the application quickly - mismatched numbers or unclear responses can decrease your chances of award if the CM/GC team must validate your information further. A reliable, complete submission is not just a compliance step; it is a chance to stand out and make a strong impression.   Treat It Like a Job Interview Construction Managers : Each submission should be evaluated with the project’s unique needs in mind. Avoid a one-size-fits-all approach; instead, consider the Subcontractor’s suitability for the specific project type and the acceptable risk level. Rather than relying on annual reviews, request updated prequalification submissions for each bid and evaluate each Subcontractor based on the unique needs of the project and the timing of the award. Business circumstances can change, and this approach provides a current picture of each “applicant,” helping you to make informed decisions. Subcontractors : Present your firm as you would in a job interview, tailoring your responses to the project's specific needs. For example, curating a list of references from projects similar to the one you are bidding on is more relevant than listing only large projects. A follow-up with the CM/GC purchasing team (as appropriate) to emphasize your interest and offer additional information can also set your firm apart, especially if the CM/GC staff is not already familiar with your company. The more trust you can build in a prospective client, and the easier you can make their decision, the better your chance of earning a repeat client.   Quantify Risk for Clear Decision-Making Construction Managers : Make data-driven prequalification decisions. Instead of relying on subjective ratings like “medium risk” or letter grades, quantify default risk in financial terms to better evaluate risk/reward balance. As yourself: does the potential financial upside justify the risk? Or do the risk indicators suggest the need for additional protective measures? When risks are expressed in quantified terms, teams can make more informed, objective decisions, which ultimately helps keep projects on schedule and within budget. Subcontractors: When CM/GCs use data-driven insights to make decisions, it is important to provide them with high-quality data. For instance, self-prepared financial documents often present challenges to the CM/GC who must analyze them and assess your appropriateness for a project. Paying an accountant for Reviewed financials may seem costly upfront, but it provides the high-confidence data that CM/GCs need. Providing high-quality and verified data points (in any part of the application, not only the financial component) differentiates your firm and enhances your chances of success.   A successful prequalification process does more than eliminate unfit Subcontractors—it lays the groundwork for long-term partnerships between CM/GCs and dependable trade professionals. By following these strategies, CM/GCs can achieve more informed decision-making, while Subcontractors gain a stronger platform to secure new business and build a lasting reputation. Written by Thomas Kellogg, President of Maple Insight in partnership with Cottingham & Butler.

As we reported at the beginning of the year, the Paperwork Burden Reduction Act was signed into law allowing employers to meet Form 1095 distribution requirements for the 2024 reporting year by posting a notice of availability and then only distributing upon request . On February 21, 2025, the IRS released Notice 2025-15 providing further detail on how to satisfy the notice requirement and confirming that such notice must be posted by March 3, 2025 for the 2024 reporting year.  If you still choose to distribute the 1095 forms to all employees, those must be delivered by March 3, 2025. Form 1094 along with all Form 1095s must be submitted electronically to the IRS by March 31, 2025. Failure to timely distribute or report complete, accurate information can result in penalties up to $330/form. Alternative Manner of Furnishing – Posting Notice of Availability If you choose to post the notice instead of delivering the 1095 forms, please follow the requirements just released by the IRS and use the Sample Notice provided at the end of this Alert.  The notice requirements are as follows: A clear and conspicuous notice must be posted on a website that is reasonably accessible to all possible Form 1095 recipients (i.e., full-time employees and individuals covered under the employer’s level-funded or self-funded plan, if applicable). Therefore, a benefits portal or payroll portal that is only available to current employees is unlikely to work. The employer’s public-facing website is probably more appropriate. A statement reading “Tax Information” on the website’s main page in an appropriate font-size along with visual clues or graphics to draw attention could then lead to a secondary page including the actual notice. For the 2024 reporting year, the notice must be posted by March 3, 2025 and remain in the same location on the website through October 15, 2025. The notice must include an email address, physical address, and telephone number that can be used to request a copy of Form 1095. If after posting notice of availability the employer receives a request for a Form 1095, the Form 1095 must be provided within 30 days and would have to be hand delivered or mailed unless the employer obtains specific consent from the individual to provide the Form 1095 electronically. Sample Notice A model notice has not been made available, but something like the following may be appropriate:   IMPORTANT HEALTH COVERAGE TAX DOCUMENTS​ The 2024 Form 1095s are prepared and available upon request. The Form 1095s provide information about offers of coverage made to full-time employees [ if your plan is self-funded, also include: “as well as coverage information for those who enrolled in ABC Company’s group health plan ”]. To request a copy of your Form 1095 or for further information about Form 1095s, you can reach out to [ include contact name or department ] via [must include an email address, physical mailing address, AND telephone number ].​ If you have any questions about your reporting or posting responsibilities, please contact your Cottingham & Butler service team today.

In today's economy, skyrocketing healthcare costs create significant challenges for employers and employees alike. How can organizations provide valuable benefits while managing expenses? The Family Advantage Health Plan offers an innovative solution – providing eligible employees with 100% healthcare coverage for their families while helping employers save 5-15% on health plan costs. Key Benefits This program requires no changes to your current plan, networks, or broker relationships. Employees receive a payroll bonus to enroll in another employer's health plan, plus full reimbursement for all out-of-pocket expenses through a Health Reimbursement Arrangement. Employees with higher healthcare needs gain complete coverage, while employers improve their risk profile and reduce costs – a true win-win. Simple Eligibility Two requirements apply: Employees must have been enrolled in your major medical plan for at least 12 months They must have access to another employer-sponsored health plan (typically through a spouse) How It Works Participants enroll in their spouse's employer plan as primary insurance and the Family Advantage Health Plan as secondary coverage. They receive a debit card for smaller expenses and an app for claiming larger reimbursements. Additionally, families receive approximately $50 per covered member monthly to offset premiums. On average, employers save $10,000 for every family of four that transitions to this program. Learn More Watch our video below to discover how the Family Advantage Health Plan can revolutionize your benefits strategy while reducing healthcare expenses.

Being the subject of a roadside inspection or FMCSA investigation can be overwhelming, especially if your business involves hauling hazardous materials. Our latest webinar examined how hazardous material roadside inspections are conducted and how to improve hazardous material shipping and transportation safety. Our experts outlined the key regulations associated with common violations that can lead to an investigation, and best practices for preparedness and compliance to ensure the safe and successful transportation of hazardous materials. Key Takeaways Having general knowledge of the Hazmat Regulations is essential before accepting any hazmat load. Roadside inspections play a key role in safely transporting hazardous materials. Common violations that focus on hazmat, such as failing to have the required insurance limits, proper registrations, non-compliant shipping papers, securement, and proper labeling of loads, can lead to serious consequences. It's critical to adhere to these regulations to prevent potential hazards.   Many violations and hazardous materials incidents can be prevented by properly training all hazmat employees to recognize their role. Each employee plays a vital part in preventing violations while transporting hazardous materials.   Further education, which should include emergency response information and accident prevention methods and procedures, is a crucial step in preventing accidents. It's important to continuously update your knowledge in this field. Click here to view the presentation.

In this webinar, we delved into the essential requirements and best practices for maintaining compliance with OSHA's regulations. Key points of discussion included understanding which incidents must be recorded, the criteria for reporting severe injuries and illnesses, and the specific forms required for documentation. We also covered the timelines for reporting and the importance of accuracy in recordkeeping to avoid potential penalties and ensure workplace safety. Additionally, the webinar provided practical tips for organizing and maintaining records, including solutions to streamline the process. By the end of the session, participants gained a clear understanding of OSHA's recordkeeping and reporting requirements and were equipped with the tools and knowledge to implement effective recordkeeping practices in their organizations. Key Takeaways Understanding Reporting Criteria : Participants learned which workplace incidents must be recorded and the criteria for reporting severe injuries and illnesses to OSHA. Documentation Requirements : Attendees became familiar with the specific forms required for OSHA documentation and the timelines for reporting. Best Practices for Recordkeeping : Participants discovered practical tips for organizing and maintaining accurate records, including solutions to streamline the process.

Key Results The Situation A rapidly growing construction company faced significant challenges as their sub costs nearly tripled. Their existing insurance program had significant exposures, such as critical coverage gaps and no management liability protection. Poor broker representation left them vulnerable to unnecessary risk and excessive premiums during a crucial growth phase. Why They Need Change Dramatic growth with sub costs rising from $20M to $55M 22 identified coverage gaps leaving company assets vulnerable Complete lack of management liability protection Ineffective broker relationship hampering strategic planning "Cottingham & Butler sat on our side of the table, working collaboratively to understand our business and create strategic solutions that actually worked." The Cottingham & Butler Approach Comprehensive Risk Analysis Our evaluation process began with a deep dive into the company's current coverage structure and operational risk. By analyzing their needs, we created a detailed roadmap for program enhancements that allowed the company to continue to grow. Key findings include: Conducted detailed coverage gap analysis Assessed growth-related risk factors Benchmarked current program against industry standards Strategic Market Optimization With a clear understanding of the company's needs, we activated our carrier relationships to secure optimal coverage terms. Our team's broad market knowledge and strong carrier partnerships enabled us to negotiate enhanced protection while reducing overall costs. Through this process, we: Secured multiple competitive quotes Negotiated enhanced coverage terms Implemented cost-effective management liability program Long-term Risk Management Success required more than short-term improvements. We developed a sustainable risk management strategy that could grow with the company and provide ongoing value. Overall, establishing new protocols and systems for the company's long-term success. Our analysis delivered an impact financially, and created strategic improvements: Resolved 19 out 22 coverage gaps Added all five management liability coverages Reduced total premium from $183,000 to $138,000

For today's employees, navigating the complex web of modern healthcare benefits has become a daunting challenge. While employers invest heavily to provide comprehensive coverage, the sophistication of these offerings often prevents workers from utilizing them effectively. This disconnect isn't just frustrating - it's creating a crisis that affects both the financial health of organizations and the physical wellbeing of their workforce. However, it also represents a significant opportunity for employers willing to rethink their approach to benefits. The Paradox of Complexity Today's healthcare benefits packages have evolved far beyond simple insurance plans. They now encompass a sprawling ecosystem of options, from traditional medical coverage to wellness programs, mental health services, and specialized care. For employees facing a non-emergency health issue, this complexity can quickly become overwhelming. They must navigate a maze of in-network providers, deductibles, authorization requirements, and estimated costs - all while risking thousands in unnecessary expenses with a single misstep. It’s reported that employees spend an average of 4-6 hours annually just trying to understand their benefits, that’s time they're not focused on their actual work. The impact extends far beyond individual productivity. HR teams often find themselves inundated with basic benefits questions, siphoning resources away from strategic initiatives. Studies indicate that benefits-related inquiries can occupy upwards of 15 hours per week for HR staff. The Personal and Financial Toll Perhaps the most concerning impact of benefits complexity is its effect on healthcare decisions. When faced with uncertainty about coverage and costs, many employees simply avoid seeking care altogether. In fact, 40% of workers report delaying or skipping necessary medical treatment due to confusion about their benefits. This avoidance of care has serious ramifications. Minor issues, left untreated, often develop into more serious - and expensive - conditions. The result is poorer health outcomes for employees and higher long-term costs for both individuals and their employers. We see organizations facing a 30% or more increase in their healthcare spend due to improper benefits utilization. That includes everything from unnecessary ER visits to the use of out-of-network providers when in-network options are available. The Hidden Toll on the Healthcare System  The challenges employees face in navigating their healthcare benefits don't just impact individual workers and their employers - the ripple effects extend across the entire healthcare ecosystem. When employees avoid seeking care due to confusion over costs and coverage, it leads to more serious medical conditions that require extensive, expensive treatment down the line. This drives up healthcare spending for both employers and the broader system. Conversely, the lack of price transparency and inability to make informed decisions often results in the overutilization of high-cost providers and services, fueling the upward spiral of healthcare inflation. Additionally, the administrative burden placed on HR teams and the productivity drain on employees actively managing their benefits diverts resources away from more value-adding activities. This inefficiency ultimately gets passed on to the healthcare system in the form of higher costs. Solving the benefits navigation challenge represents a rare opportunity to meaningfully bend the cost curve. By empowering employees to become savvier healthcare consumers, organizations can drive systemic savings that benefit the entire healthcare ecosystem - from patients and providers to payers and the government. The Path Forward The good news is that solutions exist to help employees navigate the complex healthcare landscape. Leading-edge benefits platforms combine sophisticated digital tools with dedicated human experts, providing workers with personalized guidance at their fingertips. These modern navigation platforms give employees real-time access to cost transparency, provider quality metrics, and benefits specialists who can explain complex terms and coordinate care. When workers have the knowledge and confidence to make informed healthcare decisions, the results are transformative. Cottingham & Butler's MyAdvocate360 is a powerful tool that delivers transformative results. Employees who use MyAdvocate360 are more likely to seek preventive care, choose high-quality providers, and find cost-effective options. This leads to better health outcomes and lower out-of-pocket expenses - not just for the employee, but for the entire organization. Beyond the immediate financial savings, comprehensive navigation support also boosts employee satisfaction and retention. When workers feel empowered to effectively utilize their benefits, they're more likely to appreciate the value of their employer-provided healthcare package. MyAdvocate360 is saving employers an average of $4,200 per healthcare service that employees shop for, with savings ranging from $500 on imaging tests to over $20,000 on major surgeries. One client saw an employee save the company $22,000 on a single surgery by using MyAdvocate360 to find a high-quality, lower-cost provider, while the employee also pocketed a cash bonus. These results demonstrate the significant cost savings that can be achieved when employees are empowered with the right tools and incentives to shop for affordable, quality healthcare. Rethinking Benefits as a Strategic Asset  For forward-thinking employers, investing in modernized benefits navigation represents a powerful opportunity to transform their healthcare offerings from a cost center into a strategic asset. By providing employees with the tools and support to get the best care at the lowest cost, organizations can unlock significant financial and productivity gains while enhancing their employee value proposition. The path forward is clear: Organizations that embrace the power of benefits navigation will be better positioned to attract and retain top talent, improve workforce health and wellbeing, and drive meaningful financial savings. In an era of ever-increasing healthcare complexity, this comprehensive approach to benefits may be the key to unlocking a healthier, more productive workforce - and a healthier bottom line. Ready to transform your healthcare benefits strategy? Schedule a demo of MyAdvocate360 and speak with our benefits experts today. MyAdvocate360 is empowering employees to make smarter healthcare decisions, driving significant cost savings for organizations like yours. Contact us now to learn how this innovative navigation platform can help your company unlock the hidden opportunity in your benefits program.

This informative webinar seeks to help shop owners, managers, and safety professionals identify and address common OSHA violations. Ensuring compliance with OSHA regulations is crucial for maintaining a safe and productive work environment. This webinar will give you the knowledge and tools to recognize potential hazards and implement practical corrective actions. 5 Key Takeaways on Identifying & Addressing Common OSHA Violations : Understanding Common OSHA Violations Identifying common OSHA violations in shop environments is essential for maintaining a safe workplace and avoiding penalties. Awareness is the first step towards effective safety management.   Mitigation Strategies Implementing proper procedures, training, and routine inspections can significantly mitigate the risk of violations. Consistent application of these strategies ensures ongoing compliance and safety.   Case Studies and Real-World Examples Learning from real-world case studies provides practical insights into how violations can be addressed effectively. These examples highlight successful resolutions and best practices.   Creating a Culture of Safety Fostering a safety culture within the shop is crucial for long-term success. Encouraging employee participation and open communication about safety concerns enhances overall safety.   Continuous Improvement Regularly reviewing and updating safety protocols, training programs, and equipment helps maintain a high safety standard. Continuous improvement and feedback loops are vital for adapting to new challenges and ensuring compliance. Click here to download the presentation.

Written by Larry Nedder, Vice President, Transportation Group In the wake of unprecedented investments in infrastructure, Texas Transportation Commission has approved a 100.6 billion-dollar plan. According to Senator Cesar Blanco's recent announcement, major changes are coming to El Paso's transportation landscape. With the recent approval for El Paso and significant I-10 construction, your trucking operations face both opportunities and challenges. While these historic changes are needed and promise to enhance long-term efficiency, the short-term implications for the industry are significant. Road closures, detours, and delays are already creating challenges for an industry grappling with driver shortages, fuel costs, and tight delivery schedules. The Scope of Infrastructure Overhauls is impressive as outlined in the article by. ( 2024 Unified Transportation Program ) Pain Points for Trucking Companies Increased Operations Costs & Delays Construction zones create bottlenecks, extending transit times and increasing fuel consumption which ultimately disrupts delivery schedules. Detours can force trucks onto less efficient routes, increasing wear and tear on vehicles and directly impacting your bottom line. Driver Fatigue and Turnover  Infrastructure projects force route changes, longer and unpredictable schedules, and contribute to driver fatigue and stress. This also contributes to already existing recruitment challenges, particularly for smaller trucking companies. Congestion in Urban and Rural Areas  Both urban and rural areas are experiencing significant construction activity. Urban construction often causes congestion, while rural projects may lack alternate routes altogether, leaving trucking companies with limited options. Increased Litigation environment The rise in work zone incidents has led to an increase in exposure to litigation and higher insurance premiums. This evolving risk landscape requires carriers to implement more robust safety protocols and risk management strategies. The Silver Lining: Long-Term Benefits Despite these short-term hurdles, the industry stands to benefit immensely from these infrastructure upgrades. Ultimately it will enhance the flow of goods and will have a positive impact.  The best trucking companies are already working on strategies for Navigating the transition and mitigate the risk that are created with this change.    Don't let one lawsuit or accident put your entire business at risk. Our team at Cottingham & Butler understands the trucking landscape. With decades of industry experience, they offer comprehensive coverage specifically designed for Texas trucking companies. We go beyond basic insurance, providing insight and coverage second to none.   For more information about managing your fleet's risks and costs while Texas is undergoing a large infrastructure change, contact your Cottingham & Butler representative .

In recent years, there has been a major shift in how American workers access paid family and medical leave. While the U.S. does not have a federal paid leave program, individual states are stepping up to fill this crucial gap. Lets take a deep dive into what employers should know and be on the look out for when it comes to State Paid Family & Medical Leave (PFML) programs. What is State Paid Family & Medical Leave? State PFML programs are mandatory insurance-style benefits that provide paid time off for employees experiencing qualifying life events. These programs ensure workers continue receiving  income during their time away from work, acting as a safety net that assists employees with balancing their work with life's major challenges. Common Qualifying Life Events: Personal medical conditions Caring for family members with serious health conditions Welcoming a new child through birth, adoption, or foster care Other qualifying family and medical situations Core Program Elements Location - Based Coverage PFML coverage will depend on where your employees work, rather than where your company is headquartered. For example: An employee working in Washington state must be covered by Washington's PFML program, even if the company is based in Oklahoma Remote workers are covered by the PFML laws of their work location state Multi-state employees may need individual evaluation for coverage determination   Current Company Benefits Some employers offer some sort of employer-paid or voluntary STD plan, or paid parental leave for new parents. In most cases, these existing plans don't satisfy PFML requirements because they typically: Don't cover all eligible employees Don't provide benefits for all qualifying reasons Offer lower benefit amounts than required by law   Funding Mechanisms The details of how each state funds its PFML program will vary enormously. States offer three primary ways to fund PFML programs: Payroll Tax Contributions: In most states, this is the standard funding mechanism. Employers and/or employees contribute a percentage of wages through regular payroll deductions, similar to Social Security taxes. Private Insurance Policy: Companies can purchase approved insurance plans from authorized carriers to meet state requirements, offering more control over program administration. This is not available in all states. Self-Funding : Large organizations may opt to pay benefits directly, though this requires substantial financial reserves and state approval. Benefit Coordination Some states permit employees to combine PFML with other paid leave to reach 100% of their regular wages, while others have strict limitations on benefit combinations. How PFML coordinates with these other benefits varies from state to state, those benefits being: Short-term disability Paid time off (PTO) Vacation Time Sick Leave Employer-provided parental leave Current PFML Landscape Active Programs California Colorado Connecticut District of Columbia Hawaii Massachusetts New Jersey New York Oregon Rhode Island Washington Upcoming Programs Delaware (2025-2026) Maine (2025-2026) Maryland (2024-2026) Minnesota (2026) Action Steps for Employers Map Your Workforce: Review employee work locations and identify which states apply within your organization. Evaluate Benefits: Compare your current leave policies against PFML requirements and adjust as needed. Plan Ahead: Budget for contributions and update your systems for new or upcoming state programs. Stay Compliant: Monitor program changes and regularly review your policies with benefits experts. Looking Forward The PFML landscape continues to evolve and change within more states. Successful navigation of these requirements requires ongoing attention to: New state program implementations Changes to existing programs Coordination with other leave benefits Employee communication strategies Summary State Paid Family & Medical leave programs are expanding across the U.S., requiring employers to carefully navigate various state requirements. Effective PFML management requires understanding that coverage is based on work location, existing benefits often need supplementation, and funding mechanisms differ by state. As these programs continue to change, it is important for multi-state employers to stay up to date on state requirements and compliance. ***This information is current as of November 2024. As state PFML programs continue to evolve, consult your state's specific program for the most up-to-date requirements.

The trucking industry faced record congestion-related challenges in 2021, with costs reaching a staggering $94.6 billion according to new research from the American Transportation Research Institute (ATRI). This significant increase in congestion costs highlights the growing challenges fleet operators face in maintaining efficient operations. Key Findings This study revealed several concerning trends for the transportation industry: Record-Breaking Delays : Trucking companies experienced 1.27 billion hours of delay—equivalent to 460,000 drivers sitting idle for an entire year Substantial Fuel Waste : Over 6.7 billion gallons of diesel fuel were wasted due to congestion, resulting in $22.3 billion in additional fuel costs Rising Costs Outpace Inflation : From 2016 to 2021, congestion costs increased by 27%, more than double the Consumer Price Index increase of 12.9% during the same period What's Driving the Increase? Several factors contributed to the surge in congestion costs following the pandemic: Economic Growth : 2021 saw the highest GDP growth (5.7%) since 1984 Return to Office : The resumption of commuter traffic as workers returned to the office Increased Freight Demand : Higher consumer spending led to increased trucking volumes Regional Impact The impact of congestion varies significantly by location, with certain states and metropolitan areas bearing the brunt of these costs: Top 5 Most Impacted States: California: $9.0 billion Texas: $7.3 billion Florida: $7.2 billion New York: $4.9 billion Louisiana: $4.2 billion Most Affected Metropolitan Areas: New York City Metro: $5.5 billion Miami Metro: $2.6 billion Chicago Metro: $2.6 billion Philadelphia Metro: $2.1 billion Los Angeles Metro: $1.8 billion Environmental Impact The environmental consequences of these delays are substantial: 69 million metric tons of CO2 emissions from wasted fuel This environmental impact underscores the need for both operational efficiency and sustainability initiatives Looking Forward The federal Infrastructure Investment and Jobs Act of 2021 includes $350 billion for highway investments that could help alleviate these congestion issues. This investment presents an opportunity for strategic infrastructure improvements that could benefit the trucking industry and broader supply chain. Risk Management Implications For fleet operators, these findings emphasize the importance of: Route optimization and planning Fuel management strategies Operating cost control measures Environmental impact consideration Strategic scheduling to avoid peak congestion periods Understanding and adapting to these congestion patterns is crucial for maintaining competitive operations in today's challenging transportation environment. Fleet operators should consider these factors in their risk management and operational planning strategies. For more information about managing your fleet's risks and costs in today's challenging environment, contact your Cottingham & Butler representative.

Every few years, there seems to be an uptick in wellness program-related litigation. While the lawsuits are typically of the class-action variety targeting large, deep pocket companies, the risk is still real enough to motivate any employer sponsoring a wellness rewards program to make sure they’re running those programs as compliantly as possible.   A recent string of lawsuits filed by the Department of Labor (DOL) and private plaintiffs primarily relate to tobacco incentive (or disincentive) programs. Many of these lawsuits allege similar violations under HIPAA’s nondiscrimination rules centered around the Reasonable Alternative Standard (RAS) requirements. While this litigation mostly relates to employers charging a premium surcharge for those employees who use tobacco-related products, similar issues can arise with any nicotine prevention or outcome-based wellness incentive program. This brief alert will discuss the basis of the lawsuits and provide ways to ensure your wellness program is less susceptible to being a civil suit target.   Alleged Failures in Tobacco-related Wellness Programs The following are four of the most common allegations against employers offering tobacco-related wellness programs: Employer offers a tobacco incentive (or assesses a premium surcharge) without offering an RAS . An RAS must be offered to those employees who use tobacco.  Basically, tobacco users must be offered another way to earn the full reward or avoid the full surcharge.  The most common RAS for tobacco-related programs is completion of a tobacco-cessation program. The availability of an RAS is not adequately disclosed or communicated . Written materials describing the terms of outcome-based wellness program and the communication informing a participant of a failure, must include a notice about how that participant may earn the incentive by completing an alternative standard. RAS options, who to contact, and any deadlines for completion must also be included in the notice.  These notices should appear in benefit guides, open enrollment presentations and in the tobacco affidavits, to name a few obvious places. Not recognizing what constitutes completing the RAS . In the case of tobacco related incentives, the employee merely needs to complete the tobacco-cessation program. Requiring the employee to successfully quit tobacco use in order to earn a reward or avoid a surcharge is not considered to be a reasonable alternative standard under the law. Not providing the full incentive if the employee completes the RAS . The employee must receive the full annual incentive (or avoid the full annual surcharge) if they successfully complete the RAS within a reasonable time period. If the employee does not complete the RAS until well into the start of the plan year and the employer has been charging the surcharge in the interim, the employer must refund the surcharge paid to date as well as discontinue the surcharge going forward until the end of the plan year. Under the Affordable Care Act, health plans offer tobacco cessation programs at no cost to participants. Therefore, identifying a RAS for your tobacco incentive wellness program should be a straightforward process. Contact your team at Cottingham & Butler for help in setting up a compliant RAS for your wellness initiatives and gain access additional wellness compliance resources.