Recent triagency guidance finalized the template and related materials for the ACA’s summary of benefits and coverage (SBC). The new SBC materials will apply for the first annual open-enrollment period starting on or after April 1, 2017, for a plan year beginning on or after that date. This means calendar-year group health plans will use the new SBC materials during fall 2017 open enrollment for the 2018 plan year. Plans that don't hold annual open enrollment will have to use the revised SBC materials starting with the first plan year that begins on or after April 1, 2017. The new template is available on CMS website.
The average age of first-time mothers in the U.S. is now at an all-time high of 26 years old, according to a recent release by the CDC. Still, many first-time mothers are under 26 – which means, thanks to the Affordable Care Act, they are eligible as dependents on their parents’ health insurance plans. But getting coverage for labor and delivery as an adult child on a parent’s plan can be tricky. As Mercer employee benefits attorney Wade Symons explains, “the ACA requires well-woman services to be provided, including prenatal care, but not labor and delivery or other maternity costs.” In addition, having the newborn baby covered under the mother’s parents’ plan “would be covering the dependent of a dependent…Employers won’t offer health insurance for their employees’ grandkids." This creates a situation where the mother-to-be will need to seek other options for coverage to make sure she and her baby are covered appropriately. One option is the public health insurance exchange, though Symons clarifies that “there are only limited periods of open enrollment” and that some women “may not qualify for a special enrollment if [they’re] pregnant and voluntarily opt out” of their parent’s coverage. If you don’t cover maternity services for adult children, you might want to review health plan materials to make sure this is clear and help avoid unpleasant surprises.
A recent report from the Gallup-Healthways survey that found only 11.9% of adults did not have health insurance for the first three months of this year, the lowest level of uninsurance since the survey began tracking it in 2008. There were a number interesting details from The New York Times article covering the survey results. First, as expected, the uninsured rate declined more slowly in this most recent sign-up period than in the first open enrollment season (by 1 percentage point, compared to 1.5 points last time). The open enrollment period was shorter this year, but it’s also likely that those who wanted coverage the most were the first to sign up, and those who remain without insurance are less motivated, less aware of the exchange, or lack the means to pay for coverage. Given the slow-down in year two, one wonders how long it will take — or what it will take — to get all the way to the goal of universal coverage. Second, while people at all income levels have used the exchange, the biggest gains were among those making less than $36,000 — a group that has had a hard time finding and keeping health insurance in the past. Their uninsured rate dropped 8.7 points since the end of 2013. Most of these people would have qualified for the federal subsidy, now at risk pending the decision of the Supreme Court in King v. Burwell.
With open enrollment results for 2015 now in, an important question has been answered. While the ACA’s new eligibility requirements that went into effect this year had a big impact on some employers, overall the level of enrollment in employer-sponsored plans was unchanged.
Mercer’s new survey of nearly 600 US employers, “Health Care Reform Five Years In,” found the average percentage of all employees — full-time and part-time — enrolled in respondents’ plans remained constant from 2014 to 2015. While there was a 1.6% increase in the absolute number of employees enrolled, that was the result of a 2.2% increase in the size of the workforce, rather than the changes required by the ACA.
In 2015, employers were required to offer coverage to all employees working 30 or more hours or face penalties. Across all employers in the survey, the average percentage of employees who were eligible for coverage rose one percentage point, from 87% to 88%, but the average percentage of eligible employees who enrolled dropped a point, from 84% to 83%. That left the average percentage of all employees (both eligible and ineligible) who enrolled in 2015 essentially unchanged from 2014, at 74%.
Still, for some employers, enrollment did grow. For one in ten employers in the survey, the percentage of their workforce enrolled in a health plan rose by 5% or more from 2014 to 2015. But others that extended coverage saw low take-up among the newly eligible employers, who either had coverage through a parent’s or spouse’s plan or through Medicaid, or are continuing to go bare. Further, about a third of respondents actually reported lower levels of enrollment, perhaps partly the result of some workers leaving employer plans to seek less expensive coverage through Medicaid or the public exchange.
To understand why the 30 hours rule didn’t have a bigger impact on enrollment overall, it’s important to keep in mind that most employers — 81% of the survey respondents — were already in compliance with the eligibility requirement prior to 2015. And among those employers that did extend coverage to more employees, many found that few of the newly eligible chose to enroll. Among respondents in food and lodging businesses, the industry sector most affected by the 30 hours rule due to high concentrations of part-time workers, the average percentage of employees eligible for coverage rose from 57% to 60%. But overall growth in the percentage of employees enrolled rose by less than one percentage point, to 34%.
Going into 2015, employers were uncertain about the impact of the individual mandate on enrollment levels. While the individual mandate — which requires all individuals who can afford it to obtain coverage or face a tax penalty — went into effect in 2014, in 2015 the tax penalty became much steeper. While it may have inspired some employees to enroll for the first time, other factors may have drawn employees out of employer plans. While 18% of all respondents (and 31% of those with 5,000 or more employees) believe that more employees elected coverage than in past years due to the individual mandate, 7% of all respondents (and 14% of those with 5,000 or more employees) believe some former enrollees now waive coverage because they are eligible for expanded Medicaid.
Additionally, some employers took steps to hold down enrollment growth. This included reducing hours of at least some employees who consistently worked 30 or more hours per week so that they did not become eligible for coverage, or keeping new hires to less than 30 hours per week. However, very few respondents — just 2% — said they cut staff to avoid covering more employees.
The survey also found that employers remain firmly committed to offering coverage. Only 3% of respondents say they are likely to drop their plans within five years. The need to compete for talent is the number-one reason employers don’t drop health coverage — a highly valued benefit — but for those that might be tempted, the ACA makes it that much harder to do.
Attend our free webcast (1:00 p.m. EDT on Tuesday, Mar. 17) to learn about Mercer’s newly released health care reform survey that answers the questions on everyone’s minds:
- What happened with open enrollment for 2015 — and what does it mean for 2016?
- How are employers handling new reporting requirements?
- What are employers doing now to avoid the excise tax in 2018?
We will also share insights about how strategy and design may evolve in the future.
The public exchange open enrollment period is going much more smoothly this year—and generating less media attention as a result. Still, there was a flurry of articles about the end-of-year enrollment numbers released by HHS last month. By December 26, at least 7.1 million individuals had enrolled in a plan through either the HealthCare.gov enrollment platform or a state-run exchange. The government expects to hit its own goal of 9.1 million by February 15, the end of the enrollment period, though this is less than the 13 million originally projected by the Congressional Budget Office. One surprising finding, discussed in this New York Times article, is that many of those who enrolled last year actively shopped for a plan for 2015, rather than being automatically reenrolled in their same plan. HHS officials said more than 30 percent of federal marketplace customers who re-enrolled for 2015 did so by returning to Healthcare.gov and picking a plan. That’s much higher that what you might expect based on consumer behavior in other health coverage marketplaces, and presumably this will help keep insurance companies on their toes when setting prices. On that front, a new report from the Commonwealth Fund finds that overall, premiums on the public exchange were flat from 2014 to 2015, although average premium cost rose in some states and declined in others. The report includes a chart with results by state. Interestingly, deductibles in exchange plans rose by just one percent on average.
The Obama Administration received flack last year for major issues and site crashes with the online exchange enrollment site, HealthCare.gov. When open enrollment for 2015 began this past Saturday, about 500,000 people logged onto the site and 100,000 submitted insurance applications. As this Wall Street Journal article reports, the general consensus is that the process is much smoother this year. There were issues with resetting passwords that resulted in people getting locked out of the site, and some lapses in communication between carriers when enrollees switched plans. And some current enrollees were not pleased to discover that rates for their plans had increased, although in most cases they could find lower rates by switching plans. The state of Washington, which runs a separate state exchange, experienced the most severe online enrollment issues; their site was forced to go offline for a day because it was incorrectly calculating subsidy amounts. However, these issues are minor in comparison to the problems that plagued the 2014 open enrollment. If you have employees who are not eligible for coverage in your plan and have been communicating with them about public exchange options, you might want to remind them that open enrollment has started and pass along the good news that the website seems to be running smoothly. A word to the wise would be to avoid the high-traffic periods near the December 15 deadline for current enrollees to make changes and the February 15 end of open enrollment.
As employers, we all know how hard it is to get our employees’ attention. Looks like the government is having an equally hard time getting the attention of their target audience – the uninsured. A new study by Kaiser Family Foundation reports that 89% of the uninsured are unaware that open enrollment begins in November. The survey also reveals low awareness of the public marketplace, plan options, and affordability. Perhaps with the November 1 launch of open enrollment for the public exchange, we will begin to see mass marketing efforts in the way of TV ads and signs on the sides of busses. But if you have non-eligible employees who might benefit from the public exchange, don’t assume they know all about it. A little extra communications effort now might help your workers take that important first step of learning about their exchange options.
This article is a good comparison of the government’s enrollment site last year to the new, improved version being rolled out this year. There are a couple of noteworthy points for employers. First, it will be easier to “window shop” plans if you want to look and see how the public offerings compare to employer-sponsored plans. Secondly, the article points out that the lowest penalty for not having coverage under the individual mandate – just $95 last year -- is going up to $325 in 2015, with the actual penalty calculated as a percentage of income. This may spur more individuals with access to an employer plan to enroll. The window for the public plans opens Nov 15 and goes until February. However, for coverage to be effective January 1, elections must be made by December 15. That’s about the same length as most employers’ open enrollment periods, and it will happen at approximately the same time. Fingers crossed this open enrollment will go more smoothly than last year!
From now through early December, shoppers at 2,700 Wal-Mart stores across the country can step up to a counter and speak with a licensed agent about health plan options. Targeted at those in the market for a Medicare plan as well as customers interested in the public exchange, the service overlaps with the enrollment periods for those two programs. Wal-Mart is partnering with DirectHealth.com, an online insurance comparison site. DirectHealth agents will provide information on thousands of plans offered by hundreds of carriers, and will receive a commission if an in-store customer enrolls in a plan. For employers located near a Wal-Mart offering the service, called “Healthcare Begins Here”, it’s another possible source of health plan information and guidance for non-benefit-eligible employees and retirees. Of course, your eligible employees also might decide to “shop” for health insurance to see what else is available – which will likely help them appreciate the value of their employer-sponsored plan!
The Wall Street Journal ran a story about the challenges expected during the second open enrollment period for the public exchange. The individuals who signed up during the successful first-year enrollment are referred to as the “low hanging fruit,” and it’s expected that the remaining uninsured will be harder to convince to enroll. Of interest is that four out of ten people said they enrolled because of the individual mandate, according to a recent study. One of the marketing strategies for this open enrollment season will be to focus on the legal requirement and the tax penalty imposed on those without coverage. Employers did not see much change in enrollment in 2014 when the individual mandate first went into effect, but it’s possible that this marketing campaign -- along with the higher tax penalty -- will have an impact on enrollment in employer-sponsored plans for 2015. It’s a good thing to keep an eye on.
It’s going to be a busy open enrollment season for Mercer Marketplace. In 2014, its first year of operations, Mercer’s private benefits exchange provided access for 52 companies, with 220,000 eligible employees, retirees, and dependents. For 2015, those numbers have grown by about a factor of five: 247 companies have chosen Mercer Marketplace to provide access to more than 1,000,000 lives. Additional enrollments for 2015 will continue throughout 2014.
“The growth in people and companies attracted to our exchange platforms is a powerful demonstration of the broad applicability of Mercer Marketplace solutions,” said Julio A. Portalatin, our President and Chief Executive Officer. “Our clients and their employees are confirming that we offer the most flexible and complete private exchange in the market that meets the real needs of a wider spectrum of companies. Further evidence of our momentum is the acquisition of 40 new clients not previously served by Mercer’s health business in addition to our continued growth with existing clients.”
A 2014 analysis of purchasing behavior on Mercer Marketplace showed that, given the opportunity to choose from a range of benefit options, many consumers purchased lower-cost medical plans. That, combined with access to Mercer Marketplace network arrangements, care management and prescription drug programs, allows employers to achieve up to 15% medical plan cost savings. In addition, Mercer Marketplace drove an average savings of 10% on the cost of life and disability benefits. These savings are enjoyed by both employers and employees.
“These savings result from Mercer Marketplace’s purchasing power combined with consumer decisions to purchase coverage that is more appropriate to their personal needs,” said Sharon Cunninghis, Mercer Marketplace Leader. “The fact that employers were able to achieve significant cost savings while offering their employees the ability to personalize their benefits is exciting news. This satisfaction from both companies and individuals gives others confidence in the exchange experience and positions this as one of the standard benefits models of the future.”
In addition to the employer active and retiree clients, several companies have selected Mercer Marketplace as the platform for delivering voluntary benefits, with 330,000 employees (730,000 lives including dependents) eligible to select benefits through this program. Mercer also provides access to individual medical insurance coverage to an additional 750,000 individuals through our relationship with GetInsured. While enrollment in these offerings may initially be modest, using Mercer Marketplace for delivery of voluntary benefits and individual medical insurance provides an avenue for both employers and employees to begin to experience the advantages the exchange platform offers.