By Cyril Tuohy
With the enrollment period for health care coverage under the Affordable Care Act (ACA) little more than four months away, employers are gearing up to inform their workers of the big changes ahead.
For employers who have not yet decided whether to continue offering health coverage or pay the fine for dropping coverage, “now is the time to think about that,” Andrew Molloy, assistant vice president of health management and insurance programs at Unum, said in an interview with InsuranceNewsNet.
So far, it appears the vast majority of employers will keep their coverage for full-time workers, according to a recent poll by the Foundation of Employee Benefit Plans. The survey found that 69 percent of employers will “definitely” continue to provide employer-sponsored health care when the exchanges go live Jan. 1, 2014.
Proponents of health reform, including President Barack Obama, said workers who receive good coverage under their employer-sponsored plan are likely to maintain that coverage, either with existing plans or something very similar.
Employees have an advantage under employer-sponsored coverage models, thanks to the power of group health pricing. Employers benefit as well because of the tax advantages associated with offering workplace-based coverage.
Corporate human resources departments, therefore, are working overtime to inform employees of the big changes. Everyone from insurance carriers to benefits brokers to payroll administrators are racing to inform clients of the changes through brochures, podcasts, blog postings, webinars and dedicated webpages.
“We know that everybody needs to comply with the Affordable Care Act and they are going to try as hard as they can to reduce cost under their respective health care plan and certainly you need a health care compliance strategy to achieve that,” Dave Sanders, health and benefits legal practice with AonHewitt, said in a recent webcast.
For now, companies can focus on the compliance strategy. But, in the long term, they also will need a health care strategy, he said.
Government websites also are full of information about what employers and employees need to know before employees make an enrollment decision. Earlier this month, for instance, the Department of Labor issued guidance to companies on notification procedures of coverage options to employees under Section 18(B) of the Fair Labor Standards Act.
Unum, which offers, life, disability and voluntary benefits coverage, believes a more informed employer makes life easier for employees and insurance carriers.
“It’s important in our role that we educate our clients, and we mean it so that requires us to help our clients, or in some cases brokers, to understand what their implications are on their total benefit of decision making,” Molloy said. “We recognize that medical is the biggest driver of the benefit decision.”
The majority of employer-sponsored health plans begin coverage Jan. 1, 2014, following the three-month enrollment period from Oct. 1 to Dec. 31.
“Some employees will qualify for subsidies and qualify for the exchanges, and employees will be asking questions,” he said. If employees are not asking lots and lots of questions they really should be, Molloy said.
Unum clients and brokers, who play a key role in advising clients, have snapped up the company’s 50-page pamphlet outlining key steps and strategies companies should think about for 2014 and beyond, Molloy also said.
Big-picture questions many employers will want answers to include:
- whether to “pay or play,” meaning to pay the fine or play in the employer-sponsored health benefits marketplace
- whether they meet the 50 full-time-equivalent threshold under which they don’t have to offer coverage
- which states have a state-run exchange or have elected to default to the federal exchange (Fewer than half the states are establishing an exchange.)
The finer points of the law -- such as compliance with deductible limits and out-of-pocket expenses, the contributions to the Transitional Reinsurance Program by sponsors of self-insured group health plans, new limitations on Flexible Spending Accounts, who qualifies for subsidies and levies on medical device manufacturers -- are better left to benefits brokers and advisors.
Still, employers need to be informed in upcoming discussions with their brokers, and with Memorial Day weekend around the corner, many advisors and corporate benefits experts can expect this to be, if not a hot summer, then at least a long one.
“If you are a company that’s going to play and you haven’t thought about it, it’s time,” Molloy said.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].
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