ACA News & Publications

ACA Pathways: Burnham Benefits Interviewed on Critical Mass for Business Internet Radio Show

July 2010

On July 6, 2010, Ed Bray, Burnham Benefits' Director of Compliance, had the opportunity to be interviewed regarding health care reform's impact on employers on the Critical Mass for Business Radio Show on OC Talk Please see below for excerpts from the show and a link to his radio interview.

Excerpts from Radio Show Interview

1) Discuss and highlight your business with particular focus on what makes Burnham Benefits differentiated in the market. Burnham Benefits is an Orange County‐based benefits brokerage and consulting firm with over 40 years of employee benefits consulting experience. There are currently 28 staff members specializing in the employer marketplace of 100 to 5,000 employees. Burnham Benefits has approximately 200 clients.

What differentiates Burnham Benefits is the fact that 100% of their efforts are focused on employee benefits. There are no other lines of business. These efforts have resulted in a 97% client retention rate versus 85% for the industry. In addition, the firm partners with other top‐notch firms should a client require assistance with another line of business (e.g., Burnham Gibson for retirement/wealth management assistance). Lastly, Burnham's owner, Kris Allison, has a very good business sense in regards to supplementing her business model with resources that will be a true value‐add to the firm's clients (e.g., introducing an internal director of compliance position with the introduction of health care reform).

2) What you have learned through your business experience that helps you in your position with Burnham Benefits today? One of the unique characteristics I have brought to Burnham is the fact that I can truly look at how health care reform will affect Burnham's clients from a 360 degree perspective. What this means is that not only am I am comfortable reading and interpreting the legislation but my 12 years of practical benefits experience helps me understand what pieces of health care reform HR and benefit professionals within corporations should be focused on more so than others. For example, benefit professionals have spent years encouraging participation in the company's flexible spending account by saying that if the employee had any FSA funds remaining at the end of the year, to use those funds to pay for over‐the‐counter drugs so they would not lose that money. Now, starting in 2011, over‐the‐ counter drugs (without a prescription) will not be reimbursable under a flexible spending account program. Thus, it will be critical to communicate this to employees, especially current FSA participants.

3) What are some of the ways that health care reform will affect employers and for how long? There are numerous provisions in the United States Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act that will affect employers, including those that are small, large, fully‐insured, self‐insured, offer coverage to retirees, and have collective bargaining agreements. From a timeline perspective, the first provisions took effect in June 2010 and will continue through 2018. That said, it will be very important for employers of all shapes and sizes to thoroughly review the legislation and understand what and when the health care reform provisions will affect them.

4) Can you talk to our audience about a current unresolved challenge facing your business? Although health care reform legislation was introduced in March 2010, many provisions requiring employer action still need further guidance and interpretation from the respective regulatory agencies before employers can truly understand the impact to their company and how to effectively introduce them. For example, until recently, employers had to try to determine the true definition of a grandfathered plan with very little guidance. From a Burnham perspective, the challenge is making sure clients understand that this situation is causing a "wait and see" or "best conservative educated guess" approach when reviewing an employer's next steps for many provisions and we will continue to communicate pertinent information and updates to them as soon as we receive it.

5) Based on this uncertainty and given the fact that there are so many provisions for an employer to be cognizant of and take action on, what is the best way for an employer to manage to the health care reform legislation over the next few years?

I would recommend that an employer take the following four steps to help them effectively and efficiently manage the health care reform maze over the next few years:

  • Use the services of a broker/consultant who not only has the ability to understand the legislation on its face but can assist with the "tough" employer benefit program decisions and provide a practical implementation and communication action plan that will appease senior management and the employees alike.
  • Spend a significant amount of time developing a comprehensive communication strategy and plan. Senior management will be asking more questions than ever (how will this affect the business, what should we do, what are our competitors doing) and employees will need to be provided with a significant amount of benefits information (many health care reform provisions affect employees). Plus, employees will have more questions about benefits than ever before (materials received, what they see on TV, exchange opportunity analyses).
  • Build a flexible health care reform implementation action plan incorporating short and long‐term benefit strategy and focus on the year‐by‐year action items. I would not recommend thinking too far ahead given the fact that health care could change significantly in the future. This is based on the fact that many provision effective dates are well into the future and there will be court cases, elections, and regulatory guidance and interpretation between now and then. Plus, it would be impractical to try and do seven years of benefits compliance work now.
  • Establish and maintain credibility with your functional areas. Based on the compliance requirements of health care reform, HR and benefit professionals will be counting on the resources and services of their functional areas (such as Finance, Accounting, HRIS, Legal, Payroll, IT, Communications) more than ever before. For example, Payroll, IT, and/or HRIS will be required to do a considerable amount of work in implementing the new W‐2 reporting requirements. That said, given the breadth of work, coupled with the continual challenges with implementing the legislation based on future regulatory interpretation and guidance, it will be vital for HR and benefit professionals to give the speech to their functional areas that things will go up, down, left and right regarding health care reform provision implementation before they go straight and need them to understand that now (or else things could get very uncomfortable in the future). Such a conversation will also assist with functional area future resource and staffing decisions.

6) Can you talk about a painful business lesson you have learned in managing health care reform from the broker/consultant side? As mentioned earlier, it is going to be very important for clients to understand the true art of interpretation that their broker/consultants, in conjunction with their attorneys, will be performing as health care reform for employers takes shape. Although there are some "black and white" provisions, many have grey areas. For example, there is language in the grandfathered plan regulations that say "modestly exceed." It will be up to broker/consultants and attorneys to interpret what this means in the context of an employer making a meaningful business decision. Based on this, it will be very important for broker/consultants to provide as clear information as possible so that employers can make good, well‐based business decisions for any grey area issues.

7) Based on everything discussed today, what should employers do right now? I would recommend that employers focus on four main things right now:

  • Make sure they are using the services of a broker/consultant who has the capabilities and resources to guide and assist with the health care reform strategy and implementation within their company.
  • Determine whether any of their benefit plans are grandfathered. This will allow them to be exempt from some of the health care reform provisions that start to take effect as soon as September 23, 2010. Some examples of the provisions they would be excluded from include: covering specified preventive care services at 100% and enhancing their participant claims appeals process.
  • Determine how to effectively communicate health care reform to senior management and employees.
  • Speak to the functional areas in the company that will assist with the health care reform implementation plan.

8) Is there anything else about you or Burnham Benefits that we have not talked about today that you would like to say? If any of your listeners is interested, I would be happy to perform a complimentary health care reform readiness analysis for them which will include many of the components we discussed today. This analysis will allow an employer to build a solid health care reform implementation action plan for which the services of a good broker like Burnham could support their plan with solid technical and practical guidance and compliance.

9) How does someone get in touch with you to have a readiness analysis completed or to learn more about Burnham Benefits? If interested, I may be reached at or 949‐252‐4572. In addition, I would encourage your listeners to visit Burnham Benefits website at, including our section on health care reform.

For More Information
For more information about this ACA Pathways or about any other health care reform-related provisions, please contact your Burnham Benefits consultant or Burnham Benefits at:

Burnham Benefits

This ACA Pathways is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

The information contained in this ACA Pathways includes emerging health care news from a limited perspective and does not encompass all views. The information was selected from a wide range of sources selected on the basis of their potential impact on employers and/or their employee benefit plans. For more information, please contact Burnham Benefits.

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