So, if you were to ask an insurance broker to prioritize their response to the ACA for 2014, what would they say?
I recently did exactly that, asking four of my colleagues at Gregory & Appel for one idea each for employers in general, and for employers larger than 100 employees in particular. Their responses, in no particular order:
Explore a self-funded plan. Plan flexibility is harder to design with the ACA. Self-funding has significant new advantages in 2014 and beyond, as it means your health plan is not subject to the ACA's community rating requirements, therefore giving firms more flexibility in how you respond to state regulations. This tactic can restore some room to be creative, room that is being removed via the many regulations faced in the fully insured marketplace. Just understand that self-funding (by definition) means you are assuming more risk, and that needs to be a part of your overall risk management strategy.
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Do wellness well. In large-group plans that are not affected by community rating, encouraging employees to be healthier can help keep long-term health costs down by reducing overall medical claims. There was recent guidance from HHS on how wellness must be done, so make sure your plan design is this year's model, not last. The new plans allow an increase in the incentive you can offer, but make things more complex in how participation can be rewarded and tracked. A good example is smoking cessation, where you can now charge smokers who don't enroll in a program up to 50 percent of the cost of their coverage.
Track everything. One of the ways the ACA is to be funded is with fines from employers that are not in compliance, and potential fines are hidden throughout the legislation. Be very aware of missed compliance issues, and document aggressively. The Department of Labor is ramping up its audit staff and is already knocking on doors, and many of the audit questions are focused on tracking employee's hours worked. This should be a part of your payroll service, but don't assume it, confirm it.
Communicate early and often. It's more than an employee relations issue; it's good business.There is a lot of bad data and misinformation swirling around out there. Given the large amounts being spent on benefit plans, be sure the details are well-communicated. Many benefits professionals are sticking with traditional channels (email and print) when key staff members may be using new media. It is always better to over-communicate.
I see some clients hunkered down and waiting for the storm to blow over, while others are starting with a clean sheet of paper to design a new set of strategies that will guide them through whatever new surprises are ahead. Expect overlapping guidance, random deadlines, arbitrary rule changes and occasional flashes of brilliance.
Simply put, how the ACA affects business in 2014 and beyond depends on how flexible you are, and how strategic you can be.
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