With open enrollment for 2015 qualified health plans just around the corner and marketplace benefits purchased in 2014 ending December 31, employers and employees are preparing for the second year of the Affordable Care Act (ACA). After the initial launch of the ACA that included a less-than-smooth start, flawed websites, and limited access to information, every US citizen now has the opportunity to buy medical insurance through public health insurance exchanges. These “marketplaces” are operated by either the federal government or the state. Citizens are also required to have insurance or pay a tax penalty. This means that the traditional landscape of health care benefits in the workplace is changing.
The launch of public exchanges created the most significant development in the medical insurance market since the introduction of Medicaid and Medicare. Employees and employers now have another option to get coverage and to access public subsidies to reduce the cost of coverage. Although many US employees were already covered by company health plans that met or exceeded ACA minimums, the act is changing the way millions of people access health care.
Even as the first wave of health care reform has crested and the first year is being cycled through, many unanswered questions remain. In addition, new changes are ahead for many companies. These developments will continue to drive critical conversations about employee benefits, individuals’ responsibilities, and companies’ value propositions and means of communicating the impact of these changes.
One topic that will be implemented in 2015 is the ACA regulation that requires employers to provide health care benefits to full-time employees (for companies with 50 or more employees, individually averaging 30 work-hours per week). This will force corporations to make strategic changes in their policies for hourly workers. These changes have broad implications, including the use of consumer-directed health plans (CDHPs) to increase consumer engagement and help manage costs. These plans offer many advantages for employers and employees, including the ability for both to contribute, on a tax-free basis, to health savings accounts (HSAs) and to save for annual and future expenses. For employers, the move toward CDHPs reflects the continuing evolution of the defined contribution (DC) approach to benefits, which provides greater cost control and transparency.
Even if the opening of the marketplace doesn’t have a dramatic impact on individual employers, that might not be the case for employees. With the ACA requirement that nearly everyone must have health insurance or pay a penalty, employees will likely face a barrage of information each year, whether from media outlets, direct mail, online sources, employers, or other sources. They may feel unsure or even confused about which options are right for their situation. Employers should anticipate an increase in employee questions and concerns and have an effective communications strategy in place.
If they have not already done so for the initial launch of the ACA, employers should consider taking the following steps:
Having a proactive and straightforward communication plan is vital so that employees know what to expect. As this year’s open enrollment draws near, organizations should think about how they communicated information in the past, how they can get their own information to stand out from the rest, and how to ensure that employees understand corporate versus marketplace options. Corporate plans, in many instances, are likely less expensive than marketplace plans and have easier enrollment. This fact can be exploited as an opportunity to reinforce the value of company benefits.
Companies that are migrating full-time employees to part-time status need to communicate how that shift affects benefits eligibility, subsidies, and compensation. They should also encourage employees formerly eligible for employer coverage to explore the public marketplaces as a more affordable option than COBRA. In most cases, public exchanges may offer comparable coverage at a lower cost, especially if the employee formerly covered by a corporate plan is eligible for a subsidy.
Companies that want to successfully launch a CDHP as a new employee option or a full replacement plan must adopt new thought processes and new skill sets. Employees have to think about short- and long-term health costs, educate themselves on different health plans and how they function, and take advantage of the new tools and resources available. Employees must be educated about budgeting to meet often-higher CDHP deductibles. That means preparing them for “sticker shock” that comes along with paying for doctor visits or for prescriptions in full.
Health care reform has had, without a doubt, a major impact on benefits on many levels. Its effects are so strong that it may even cause cultural shifts within organizations. With health care no longer so tightly bound to employment, a company’s value proposition may change, especially for companies whose health benefits played a major role in recruiting and retention. A culture of more empowered employees may lead to greater mobility and more turnover.
Proactive companies are re-examining the relationship between health care and employee culture. Corporations may need to broaden their definition of health care from basics, such as doctor visits and prescriptions, to include wellness programs, health incentives, education and communication tools, and better means for employee management of health care dollars and plans. The changes brought about by the ACA create an opportunity to bolster the employer/ employee relationship by taking advantage of new opportunities regarding health care, benefits, and individual responsibility.
Most employers are not prepared to be (nor do they want to be) their employees’ resource for ACArelated questions. One very practical approach can be to provide an online health care reform resource that answers those questions. Mercer offers a subscription microsite called Health Care Reform Made Simple that is updated throughout the year and organizes and simplifies the most relevant information about the ACA and employee options. This customizable education platform is accessible via desktop, tablet, or smartphone and effectively bridges information gaps. Two million employees at more than 100 companies had access to this valuable resource during the 2014 open-enrollment period, netting an estimated $4.1 million combined savings in HR and call-center costs.
Learn more about Mercer’s health care reform communication solutions.
|David Slavney (St. Louis)
Communication and Change
+1 314 588 2522
|Bev Willson (Cincinnati)
Senior Associate, Talent/Workforce
Communication and Change
+1 513 632 2616