It's natural to want to defer any major decisions or changes until next year, but this would mean a lost opportunity to new tax savings options for plan participants and lower costs for employers at a critical time.
Speculation around the benefits cost impact of COVID-19 continues. Some are expecting a double-digit increase in health care costs, while others, a decrease (based on expected delayed services with shelter-in-place restrictions). There's unprecedented unpredictability of what's to come – just as routine yearly benefits reviews would typically be taking place for 2021.
The most common reaction is for employers and brokers to take a "wait and see" mentality. But this overlooks the reality of the underlying situation – health care is evolving, permanently. Benefits offerings must keep up to better accommodate employees and further reduce employer health care costs. The one-solution-fits-all approach is over and done with.
|Don't delay your benefits review
To call the situation around us a distraction would be downplaying the intensity of COVID-19. If you haven't had a virtual meeting interrupted by a partner, child, or pet, you are in the minority. Also, it's not just you; internet connections around the country are degraded. So, trying to conduct business, as usual, is not only hard but nearly impossible.
Yet, these are the circumstances that we all now operate within. It's natural to want to defer any major decisions or changes that need to happen until next year's open enrollment, such as moving to a consumer-driven health olan (CDHP). However, this would mean a lost opportunity to new tax savings options for plan participants and lower costs for employers at a critical time. The market has been moving toward CDHPs for years, and two-thirds of employers offered one in 2018. CDHP plan adoption is projected to accelerate even further as the industry continues to reel in response to COVID-19.
|Virtualize and personalize your benefits approach
We are living in a virtual world. Meetings, calls, and benefits education are all being done remotely. The same problem we are all facing helps shape the solution. You often hear providers say they can deliver a newer, more advanced solution. In reality, these new technology requirements (like virtual meetings) help you discern the experts from the imposters.
Think of this as the new feature requirement for open enrollment. Why? It's Simple, there is a very high probability that most provider onboarding and education will need to be virtual as well. If they can't get it together for a sales call, how will it look when a virtual room full of employees can't view the portal in real-time?
While the approach has changed significantly, your objective and goals haven't. You still want to deliver the best and most cost-effective benefits solution. This is more important than ever as employers are forced to reconcile budget constraints with business objectives. Offering a lean, automated, and ROI positive benefits solutions will help employers retain employees and move once again from the red into the black.
With that in mind, you must continue to offer more personalized benefits packages. Look to providers that can shoulder that burden. Look to providers that are willing to share product-agnostic education materials so you can help with participant plan selection as you concurrently review and select providers.
The good news is you have the wind at your back. Benefits offerings have been changing, and if you have been actively reviewing your existing partnership against new offerings, you are well on your way. You just might have to do it a little sooner than anticipated.
|How to get open-enrollment ready
First things first – employers and brokers have less time and more to do this year. From managing current year benefits to planning for next year, no matter your company size, gone are the days of the 6-to-9 month review, strategy, and implementation plans to get ready. These plans will be cut down to 3-to-4 months, at best. Brokers and employers alike should and will push toward the integration of modern third-party benefits systems and providers that can speed up traditional implementation timelines.
Choose providers that help lighten the load and shorten the timeline
It's okay to ask for help, and with your benefits providers, it's okay to demand it. Lean on your benefits provider to help. Test-driving your benefits provider with your education, plan integration, and even compliance questions will be a preview into the speed at which they can work. You need them to shorten the implementation timeline to have success. You have been asked to do the same in less amount of time, and you should expect the same from them.
Don't miss the CDHP train
A CDHP is the marriage of a qualifying high-deductible health plan (HDHP) with a pre-tax payment account, like a health savings account (HSA), flexible spending account (FSA), or health reimbursement account (HRA).
Offering employees a qualifying HDHP with lower premiums and higher deductibles generally means an average of $776 less per individual plan or $1,596 per family plan, per year, compared to PPO or HMO insurance premiums. If you have 100 employees, that's a premium savings of $77,600 per year. In 2019, an individual employer-sponsored HDHP plan compared to an HMO plan provided an annual premium savings of $826, while an employer-sponsored HDHP plan versus a PPO plan provided a premium savings of $1,263.
Offering a CDHP has numerous benefits to employees. Employees will immediately benefit from the reduction in their premium cost with an HDHP. They can use those extra funds to contribute to a triple tax-advantaged HSA. Funds deposited into the HSA are pre-tax, grow tax-free, and when withdrawn for qualified medical expenses are tax-free. HSAs complement the HDHP, which enables participants to pay for the deductible, qualified medical expenses, and future health expenses. Plus, these funds never expire.
It's not too late to get started
The future feels uncertain. Employees could be faced with the same feeling of anxiety when considering health care costs and expenses this year and next. Which means, your benefits review and vendor selection, now, is more critical than ever. With all of that understood, "wait and see" seems as far away from the ideal as our current health and economic situation.
Even as you navigate current year benefits changes and the new normal, it's not too late to get started with your vendor review and benefits selection for next year. Taking the virtual approach might feel awkward or uncomfortable at first, but you'll adjust. Rely on your vendors to help you craft a personalized CDHP for open enrollment. The heavy lifting you do this year will set you up for the years to come.
Shobin Uralil, co-founder and COO of Lively, a top consumer-rated health savings account.
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