The government gave health insurers the green light this month to send out 2015 renewal notices to everyone currently enrolled in a medical plan through the public exchange. Here are a few considerations that might make employers re-think messaging for their own 2015 open-enrollment communications.
- Insurers are sending renewal notices. However, members will automatically be re-enrolled in the current option if they do not actively make a change for 2015. If they currently receive a subsidy for coverage in 2014, that amount could change in 2015 if there is a change in household income or if they become eligible for employer-sponsored coverage.
- For employers expanding eligibility to comply with the requirement to offer coverage to all employees working 30 or more hours per week, newly eligible employees could be negatively impacted and not realize it. Any worker with access to a minimum value plan with affordable contributions (as defined by the ACA) is not eligible for a government subsidy in the public exchange. So workers who may have obtained subsidized coverage in 2014 may not be eligible to continue the subsidy in 2015 as a result of an offer of coverage from their employer.
- The exchange is supposed to send a notice to employers when their employees sign up for subsidized coverage in the public exchange. It does not appear that this is happening yet (with the exception of the Connecticut exchange). So it is likely that employers are not aware of employees receiving subsidized coverage in the public exchange.
A best practice would be to send a special communication to newly eligible employees to advise that they will have an opportunity to elect medical coverage in 2015 that meets the government requirements for minimum value coverage and affordable contributions and could impact their current options. You may even want to include instructions for how to follow up with the public exchange to discuss the continuation of the subsidy in 2015, and the amount.
Why should employers get involved? The IRS will reconcile the amount of the subsidy obtained with actual income and other considerations, such as access to employer coverage, when the individual files their income taxes (a requirement for anyone that obtains a subsidy). If the amount of the subsidy is incorrect or provided in error for that tax year, the IRS will seek reimbursement. An individual must be low income (below 400% FPL) to obtain a subsidy, so getting a tax bill for thousands of dollars the following year could be devastating. While the employer community has been diligently working to empower employees and dependents to be more accountable for their own health care decision-making, a little extra hand-holding in this open enrollment period could make a big difference. There's significant potential for confusion, and the consequences of getting it wrong would be a tough pill for any worker to swallow.