Any time there is a change, particularly one as complex as the Affordable Healthcare Act (ACA), there is bound to be misinformation. There is a lot of information to digest with this particular act, and many phases and components to be implemented that impact individual and employer healthcare plans, particularly in the area of compliance. Therefore, we have decided to tackle a few of the areas that we see misinformation continuing to be communicated, so that you can make decisions based on facts, not fiction.
Costs are Going Up, Up, Up
This news topic gets a lot of buzz. The truth is that the impact will be individualized into one of three categories:
1. What we term “ACA Advantaged” –
- People who benefit either by access (they couldn’t buy coverage through traditional means before) or
- Companies who will have lower rates due to the law’s changes in the rating mechanisms for the insurance companies (i.e. Companies that had very high rates in the past, often due to large numbers of high claims. These companies can no longer be rated on health claims.
2. What we term “ACA Disadvantaged” –
- Those people who had very low rates (often younger and healthier) that will now pay more to counterbalance those who had previously paid higher rates (often older, less healthy people).
- Companies who will have higher rates due to the law’s changes in the rating mechanisms for the insurance companies (i.e. really healthy young companies who had very low rates will receive rate increases to offset older sicker people in the new rating structure).
3. What we term “ACA Neutral”
- Middle health, middle age individuals and companies who will notice little impact to their rates/coverage.
- Companies and individuals whose profit margins and cost structures put them in a financial position that a large swing will be absorbed with minimal disruption to their business or personal interests.
Do I Shop the Exchange or Should I Work with a Broker?
Another piece of confusing information being spread is that employers can shop the State and/or Federal Exchanges or meet with their benefits broker to work out the details of a company-wide plan. The truth is that a good broker or consultant will help you navigate plans both on and off the exchange. Since there are very few experts in insurance and the healthcare reform law, it’s a good idea to work with someone who can understand both and provide your organization and your employees with the best option.
Part of the misinformation regarding this topic is cost. It won’t cost you more in premium dollars to work with an expert. However, if you pick the wrong plan, shop the exchange when you should not, or try to do it yourself, your company could end up paying large penalties and fees.
For 2014, some smaller and lower income employee businesses may be eligible for a tax credit, so it’s worth it to spend some time with a benefits broker to understand your options. It’s also important to begin a relationship with a well-informed broker or consultant as the options will expand in the coming years. It will pay to be prepared.
UPS Dropped Spousal Coverage. Should I Consider It?
UPS is not alone in evaluating the impact of the ACA and making changes. There are many companies changing the way they manage part-time employees, evaluating the types of coverage they currently provide and trying to figure out how to best balance ACA compliance while providing employee benefits. There is no “silver bullet.” The best strategy is one that is tailored to the specific needs of your company and your employees.
Let’s take UPS for example. They dropped coverage for “working spouses that have coverage available through their employer” because they did the due diligence and discovered this group was the largest claimant on their self-insured health plan.
The approaches and strategies are really only best if tailored to your specific organization and employee structure. Some industries utilize many part-time or seasonal workers. Others make use of contractors. The best way to ascertain your organization’s best move is to meet with an expert benefits broker and uncover all the nuances required for your organization to thrive.
How Do I Manage Employee Expectations?
One of the more tragic scenarios we see is mismanagement of communication that results in the loss of talent. There is a lot of misinformation about the law and associated requirements. If your employees are getting information from the media, they are at a minimum concerned and potentially panicked. It’s up to you to manage expectations appropriately.
- Build Trust – don’t wait to communicate. If nothing is going to change, let the employees know. They will look to you for answers, so become that trusted resource. If your team is not quite ready to handle all the questions, we can help. If your organization is not providing insurance but want to provide a resource, we have an individual health insurance department that will help them determine if they are exchange subsidy eligible and educate them on available resources.Bottom line is to be the voice of reason amongst the chaotic media feeding frenzy so that your employees can have questions answered and then get back to work. Otherwise, ACA can become an unwelcome distraction.
- There is No Free – Communication will do more than alleviate concerns – it will ensure that your employees feel appreciated and do not leave. We have been in more than one enrollment meeting where employees want to know if insurance is free under the law. Obviously healthcare benefits have a significant cost associated with them, and it is normal business practice for employees to carry some of that cost. Make sure that employees are aware, and that the recruiting and hiring teams are communicating this fact as well.
- No Insurance – Communicate Anyway – if your organization is considered a small organization, or if you have a group of employees that you do not plan to offer health benefits to, make sure you communicate this and provide them with resources so they can navigate the Federal Exchange. Again, we have an individual health insurance department that will provide good information and answer all their questions.
As always, we are prepared to answer your questions whether business-related or your employees have questions regarding individual health care. Fortunately, you are not alone and have help getting through the chaotic, and sometimes misinformed, information on healthcare reform!