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Address confusion over reform; your health plan vs. the marketplace "metals"
Workers will be confronting a changed benefit landscape in 2014. For one thing, all Americans will be required to have health care coverage or face a penalty. By Oct. 1, 2013, employees should have received a required notice about their options under federal- or state-run health care exchanges (marketplaces), notices that many will find more confusing than enlightening. Employers also may be making changes to rules that determine which employees are eligible for health coverage, perhaps excluding part-time workers who previously received coverage. But the recent Supreme Court decision that resulted in federal recognition of same-sex marriages may mean more spouses and dependents are eligible for benefits.
"Employees typically spend very little time choosing their health benefits each year," Craig Rosenberg, leader of consultancy Aon Hewitt's health and welfare benefits administration practice, said in a news release. "This year that can be a risky, and potentially costly, strategy. In some cases, not making an active decision during enrollment means employees could get defaulted into a health care plan that doesn't meet their needs."
To ensure workers make the best benefits choices for themselves and their families, organizations should send or post the following tips during enrollment season, Rosenberg suggests.
• Participate in the enrollment process. Make sure you understand what's changing, when you need to make your choices and what your employer is requiring of you. Use the information and tools provided to get educated about your options and to make your decisions.
• Review coverage that your employer offers before making a decision about purchasing health insurance through a state marketplace. You will hear a lot about these new marketplaces, including the availability of federal subsidies based on your income. In most cases, if your employer offers coverage that meets certain minimum coverage and cost levels, you will not be eligible for a subsidy in the marketplace. Make sure you take the time to understand the health plans your employer offers before declining coverage to purchase insurance through the marketplace. It is important to note that most employers subsidize coverage they offer and allow you to pay for it on a pretax basis, which saves you money by lowering your taxable income. Coverage purchased through the marketplace, however, is not pretax. You can visit healthcare.gov to learn more about the marketplaces.
• Reassess your and your dependents' health care needs. Reserve time before open enrollment begins to take a fresh look at your health care needs for the year ahead and how you and your family have used health care in the past year. Consider how much you've spent out of pocket (e.g., deductibles, co-pays and co-insurance), the number of doctor visits you typically make and the cost of regular prescription drugs. Online tools can help you calculate your past expenses and estimate your future health care needs.
If you are enrolled in a health care flexible spending account (FSA), evaluate whether your contribution is right based on your actual and expected expenses. Remember: You must use any money in an FSA within the current year (or, if the plan permits, within an extra grace period ending two months and 15 days later) or you'll lose it.
• Evaluate whether a CDHP is right for you. Consumer-directed health plans (CDHPs) often have lower premiums but higher deductibles, coupled with employer-funded health reimbursement arrangements (HRAs) or health savings accounts (HSAs) that can be used to pay for eligible out-of-pocket costs. You can save money with an HSA by contributing dollars on a pretax basis—up to $3,300 in 2014 or $6,550 if you have family coverage, with no use-it-or-lose-it rule.
When evaluating CDHPs, you should figure out how much you are likely to spend out of pocket before you meet your deductible. Also factor in how much your employer will put into your HRA or whether your company will make contributions to your HSA. If you plan to enroll in a CDHP with an HSA, make sure you understand that any additional FSA would be limited to dental and vision care coverage. (For more about these accounts, see the SHRM Online article "Consumer-Driven Decision:Weighing HSAs vs. HRAs.")
• Take advantage of wellness program opportunities.Most employers offer wellness-promoting tools and programs, such as health-risk questionnaires and biometric screenings (e.g., blood pressure and cholesterol testing). And you may even receive a financial incentive from your employer for participating in these programs. By learning more about your health risks, you can take action earlier.
• Understand supplemental benefits and their costs. As you assess your health plan options for 2014, look holistically at your health and financial well-being, including health care, life and disability insurance, and retirement planning. Many employers include voluntary supplemental coverage, such as income-replacement insurance or extra critical-illness coverage, as part of their annual enrollment process. Be sure to carefully review the available options and their costs, and then determine if certain voluntary coverage meets your needs.
Your Health Plans vs. the Marketplace 'Metals'
Health care reform's individual mandate under the Patient Protection and Affordable Care Act (ACA) takes effect in 2014, and starting Oct. 1, government-run health care exchanges (marketplaces) will be beckoning your employees, according to Jennifer Benz, founder and CEO of Benz Communications, an HR and benefits communication strategy firm.
"The high-visibility advertising and marketing efforts insurance exchanges are using to attract enrollees give employers a terrific opportunity to show workers the real value of the plans they offer," said Benz. "Based on the ACA plan levels—Bronze, Silver, Gold, Platinum—plans offered by the majority of large employers are equivalent to the Platinum and Gold plans being offered by the exchanges."
Moreover, "While the ACA and the health insurance marketplaces are throwing up a lot of hurdles for you to scale, they also offer you a chance to back up the value statements you've broadcasted for years about your generous benefits plans," Benz noted.
The Allure of Exchange Subsidies
Employees may be tempted by publicity about government subsidies for exchange-based plans. Benz advises employers to directly address the issue and inform workers they most probably aren't eligible for them.
"Without a subsidy, employees will be paying more for less coverage. Let them know that the coverage they are getting from your company is fuller and provides better value than anything they will get on an exchange. Show them—using detailed comparisons of your plan vs. exchange plans—that they are getting a Gold or Platinum plan for the price of a Bronze plan," she recommends.
Employers considering this tactic should be aware that there isn't a national example of a Platinum plan—nor one for a Bronze, Silver or Gold plan—since the Department of Health and Human Services is allowing states choose their own benchmark plans and what services will be included in addition to those deemed essential. With so many states defaulting to the federal exchange, however, there may be a de facto national standard for the majority of Americans.
Still, "It will be very difficult for employees to make a pure apples-to-apples comparison of an employer's plan and an exchange-offered Platinum plan—even with a new Summary of Benefits and Coverage," Benz observed. She recommends including the following to help employees navigate the exchanges.
Address What the ACA Does, and Doesn't, Change
Along similar lines, the International Foundation of Employee Benefits Plans has posted online "Explaining the Affordable Care Act (ACA) to Your Workers: A How-To Guide," with tips for educating employees, a glossary of ACA-specific terms, a timeline detailing the implementation of the law and a fact sheet about what the ACA means for employees. Here is a sample from the Top-10 list:
Stephen Miller, CEBS, is an online editor/manager for SHRM.
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