Many employers already have begun to move forward on planning for Jan. 1, 2014, and the new stipulations the law mandates. And while much could still change between now and then, the likelihood of stopping the act is very low.
One thing we do know for certain, there still will be many hourly and part-time workers in the United States. Those jobs don't go away and up to 1 million of those hourly and part-time workers are covered on limited medical benefit plans that received a waiver to operate until Dec. 31, 2013.
At the end of next year, those plans will be void and employers who adopted those plans and make payroll deductions for those employees will have some decisions to make for their populations.
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We know employers will continue to offer benefits to their part-time and hourly work force because there is a tax advantage to employees and employers offering benefits through payroll. Recruiting and retaining hourly and part-time employees will continue to be a challenge—and offering benefits can be a very successful recruiting/retention tool.
Employees will continue to buy benefits through their employer because it's the easiest way for them to do so. It is easy for them to enroll and pay for benefits through payroll deductions. Employees like the expertise they gain by having benefits professionals choose the options they may select. In addition, they get access to valuable benefits that may contain underwriting roadblocks when purchased individually.
As a benefits adviser, where do we go from here? Brokers will continue to sell benefits to employers with hourly and part-time workers.
What affordable products are available for the hourly and part-time workers? Consider fixed indemnity-style limited medical plans, which are not affected by the PPACA ruling and will continue to be available in 2014 and beyond. The fixed indemnity plans will not satisfy the employer or individual mandates—but they will be available if an employer wants to provide benefits to their part-time (less than 30 hours a week) employees.
With so much change taking place in the benefits business, savvy brokers should be thinking about how they are going to replace revenues. We believe a paradigm shift will occur and it's imperative that advisers become more persistent. In the limited medical world, brokers have tended to place business and leave it alone. This will change as employers are forced to evaluate their entire benefits offering.
What are they looking for? Enrollment marketing and educational tools are key factors when employers are looking at benefits. Products must be easy to administer, with features like Payroll Cycle and Missed Premium options. Product options that reach the largest amount of employees will also be important.
Employers and employees alike need options that comply with current regulations and provide flexibility to change through the implementation of the rest of this act. Experienced administration will be a key component in their decision-making process.
So where do we go from here? It's time for us to help employers make important decisions about their benefits offering.
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