Health Insurance Reform: Prep Your Staff for the Changes
In May, the U.S. Department of Labor released model notices that employers can use to inform their employees about the state health insurance exchanges launching next year as part of the Affordable Care Act, often referred to as Obamacare. Like many materials written by government bureaucrats, the notices are long, wordy and full of jargon. They're enough to make most business owners want to crumple them up and put them in the back of a drawer.
But ignoring the model notices would be a bad idea. That's because under the law, every employer is required to send out those notices by Oct. 1, regardless of whether you have more than 50 full-timers and therefore must offer health insurance, or you have fewer than 50 and are facing no such mandate. That means you need to start figuring out now what materials you should send along with the notices to help your employees prepare for the upcoming changes to their health insurance options.
"Even though small employers are not subject to many of these requirements, their employees are still going to have a lot of questions," says Amy Sheridan, an associate in the Boston office of law firm Sullivan & Worcester and former programming chair of the American Society of Pension Professionals & Actuaries Benefits Council of New England. "For the small employers, I would say get ahead of this as much as you can."
First, let's get some terminology out of the way. The state health exchanges are now called "Health Insurance Marketplaces." Anyone can shop at their state's marketplace, and some people may be eligible for tax credits if they buy their insurance there, particularly if their employers offer plans that are deemed substandard under the law, or if participating in their company's plan is going to cost the employee more than 9.5% of their family's household income. All of that is explained in the notices about the new marketplaces.
To allay confusion, benefits experts recommend packaging those marketplace notices with supplemental educational materials tailored to each company's particular situation.
Here's how to approach handling the requirement based on three possible scenarios businesses might face.
Scenario No. 1: You already offer insurance and will continue to do so. If you offer a health plan that's fully compliant with the new law, the existence of the health marketplaces may not be all that relevant for your employees. But you can still use the marketplace notices as an opportunity to boost morale, says Michael Ward, president of Insight Performance, a human-resources consulting firm in Dedham, Mass.
"There's a lot of worry around the law," Ward says. "If you offer insurance at an acceptable level according to the guidelines, you should play that up as a real employee benefit, and educate people about what they have available to them."
If you have employees that you suspect fall above the 9.5% threshold and therefore may be tempted to explore their choices on the public marketplaces, Ward recommends counseling them privately about their options. For example, if the company offers a selection of plans, you might urge those employees to switch to lower-cost options, he says.
Scenario No 2: You don't offer a health plan now but will next year. Regardless of whether you're required to offer health insurance under the Affordable Care Act, or you plan to start offering it so you can attract high-quality talent, you can use the marketplace notices as an opportunity to educate your employees about the new benefit that the company will provide in 2014.
The learning curve will be a bit steeper in this scenario than the previous one, so consider bringing in an outside consultant, or perhaps a representative from your insurance provider, to explain the ins and outs of their plan choices, Ward suggests.
Scenario No. 3: You don't offer a health plan and won't in 2014. If you don't offer insurance now, and you don't plan to, you can still consider the required marketplace notices as an opportunity to support your employees. Brian Driscoll, a founding partner of Ovation Benefits Group in Farmington, Conn., recommends bringing in an insurance agent or benefits expert to help your employees navigate your state's marketplace and buy insurance there.
Some state exchanges are training insurance agents and other folks to go into companies and help educate employees on their exchange choices. In Connecticut, the service is offered free-of-charge to companies, because the consultants are paid by the insurance carriers offering products on the exchange, Driscoll says. "Even though you don't offer a plan, you can still offer a service and help folks make the right selections," Driscoll says.
Regardless of what scenario you're facing, most experts agree that come Oct. 1, you should be prepared with a comprehensive educational package about the relevance of those state health marketplaces to your company. "Spend time crafting your general message and making it as clear and concise as possible," Driscoll says. "I think that will be the challenge."