A well informed employee is a self-sufficient employee. Our goal should be to bring employees up to a level of understanding and appreciation of the benefits they are offered from the company. We as HR professionals can arm employees with knowledge about their benefit plans which in turn allows them to better allow them to utilize their benefits. We are in the midst of incredible healthcare reform and if this is confusing to you as an HR professional, imagine what level of confusion this has caused with employees. Before we are able to communicate the changes in healthcare plans we must educate employees with the basics of benefits.
Pitfalls of Benefits Communication:
- Jumping right in to specifics of the plan before your employees understand the basics
- Using acronyms without explaining what they mean
- Moving on to the next topic without ensuring all employees have and understanding of what you just shared with them.
How to Best Communicate Benefits Information:
- Explain the differences between: PPO, HMO, POS, etc.
- If your plan has an “Open Access” HMO explain the difference between that and a traditional HMO
- Distinguish between co-pays, co-insurance, deductibles, out of pocket max, etc
- Once the definitions of the “nuts and bolts” are fully understood by the employees, proceed to the particulars of your company’s plan
- Explain the what/when open enrollment is and provide examples of qualifying events
In the simplest terms you want to make sure that you use terminology that your employee understands and if they don’t, use this time to educate them. Once they have the foundation, you can build on that with the intricacies of your plan. Once your employees understand benefits lingo, then you will be able effectively communicate the changes from plan year to plan year and the reasons why the plans have changed or not changed. If you are able to articulate why your employees’ cost share has increased they will be more likely to accept that news. On the flip side, when you have good news to share they will be more appreciative of the effort the company takes to provide a good benefits package. Employers spend a lot of money each year on benefits so let’s educate employees so they can take full advantage of what their plans have to offer!
Needless to say, it can be difficult to fully understand all of the talk about Healthcare Reform and the regulations that are coming out of it. As an employer, you’ve probably found yourself asking “what are my benefits options?” If you’ve found yourself asking this question, you may want to consider administering your employer benefits through a private exchange.
What is a Private Exchange?
An exchange can easily be understood as an online marketplace for your employees to select the health and wellness benefits that best suit their individual needs. With the onset of healthcare reform, the federal government has set up a federal exchange where individuals who do not have access to insurance, or determine they would prefer the exchange over company provided benefits, can go to obtain insurance coverage. Some states have established their own state exchange that will be made available to state residents vs. utilizing the federal exchange available to them. A private exchange allows organizations to set up their own exchange for their employees where they can select the benefits they desire.
Organizations that opt to provide insurance to their workforce through a private exchange work with the exchange to determine what selections are available to the employees. They then allocate a specific dollar amount to each employee on an annual basis for them to use towards health benefits coverage.
What are the Benefits of a Private Exchange?
- As an employer who utilizes a private exchange, budgeting healthcare expenses becomes a much simpler task. Instead of forecasting expected expenses that may or may not be incurred by employees, budgeting becomes the allocation of the same dollar amount to each employee in the organization’s annual budget.
- Employees are able to determine how the dollars the company is spending on their healthcare benefits are allocated by selecting the benefits plans that they feel are the best fit for them and their families.
- Benefits administration becomes less cumbersome to the organization as the employees are enrolling and making changes directly through the private exchange.
- Organizations are able to select what options are available to their employees on the private exchange.
What are the Risks of a Private Exchange?
- The concept of a healthcare exchange is new in the benefits world. There may be a few unknowns to the private exchange owners that are left to be worked out.
- As employees are overwhelmed with the idea of Healthcare Reform and the impact it has on them as an individual, they may be hesitant to such a significant shift in the way your organization offers benefits. Your organization will want to consider offering training to employees on the “how, what, and why” of the private exchange within your company.
- As Healthcare Reform regulations continue to evolve, the private exchanges will have to adapt to meet federal requirements when providing healthcare.
With the continuous changes in federal regulations related to Healthcare Reform, it is important for your organization to understand all of your options and choose the best fit for your organization and employees, and a private exchange may be a perfect fit for you company.
When someone mentions healthcare reform what exactly are they referring to? This term has become synonymous with The Affordable Care Act that was signed into law March 2010 by President Obama. The law, which rolls out over the next few years with most changes occurring in 2014, is a common topic in America’s boardrooms as companies develop their strategic plans for future growth. The decisions made in these boardrooms over the next few years will provide the backdrop for the future of healthcare coverage in the workplace.
The law was designed with the intention that medical coverage will not only become affordable for every American, but by 2014 each American will be required to have coverage. In addition, employers will be faced with the “Pay or Play” decision in 2014, which simply means that employees will either be provided healthcare by their employer (the Play option) or coverage will have to be purchased through an Exchange on an after tax basis (the Pay option). If employers choose to “Pay” rather than “Play”, employees will be forced to purchase healthcare coverage somewhere else.
The most recent changes that took place in 2011 include coverage for children up to the age of 26, removal of lifetime maximums from existing and new medical plans and no cost sharing for preventive healthcare. In addition, the exclusion of over the counter drugs paid by Flexible Spending accounts was enacted.
Going forward in 2012 employers will be required to report the value of employee health coverage on individual W2’s. The plan value will not be included as taxable income for employees. This W2 reporting is a tracking mechanism and was designed to support the 40% excise tax employers with high cost plans will be subject to in 2018. Employers will want to take a proactive approach and discuss these W2 requirements with their payroll providers to ensure they are planning for these upcoming changes.
As 2014 draws closer, the debate in Congress continues over healthcare reform. The issue is bipartisan and some organizations are jumping on the bandwagon by filing lawsuits claiming the law is unconstitutional. Whatever the outcome, the next few years are going to be very interesting as organizations decide whether or not to use a health plan as a competitive advantage in attracting top talent.