The government gave health insurers the green light this month to send out 2015 renewal notices to everyone currently enrolled in a medical plan through the public exchange. Here are a few considerations that might make employers re-think messaging for their own 2015 open-enrollment communications.
- Insurers are sending renewal notices. However, members will automatically be re-enrolled in the current option if they do not actively make a change for 2015. If they currently receive a subsidy for coverage in 2014, that amount could change in 2015 if there is a change in household income or if they become eligible for employer-sponsored coverage.
- For employers expanding eligibility to comply with the requirement to offer coverage to all employees working 30 or more hours per week, newly eligible employees could be negatively impacted and not realize it. Any worker with access to a minimum value plan with affordable contributions (as defined by the ACA) is not eligible for a government subsidy in the public exchange. So workers who may have obtained subsidized coverage in 2014 may not be eligible to continue the subsidy in 2015 as a result of an offer of coverage from their employer.
- The exchange is supposed to send a notice to employers when their employees sign up for subsidized coverage in the public exchange. It does not appear that this is happening yet (with the exception of the Connecticut exchange). So it is likely that employers are not aware of employees receiving subsidized coverage in the public exchange.
A best practice would be to send a special communication to newly eligible employees to advise that they will have an opportunity to elect medical coverage in 2015 that meets the government requirements for minimum value coverage and affordable contributions and could impact their current options. You may even want to include instructions for how to follow up with the public exchange to discuss the continuation of the subsidy in 2015, and the amount.
Why should employers get involved? The IRS will reconcile the amount of the subsidy obtained with actual income and other considerations, such as access to employer coverage, when the individual files their income taxes (a requirement for anyone that obtains a subsidy). If the amount of the subsidy is incorrect or provided in error for that tax year, the IRS will seek reimbursement. An individual must be low income (below 400% FPL) to obtain a subsidy, so getting a tax bill for thousands of dollars the following year could be devastating. While the employer community has been diligently working to empower employees and dependents to be more accountable for their own health care decision-making, a little extra hand-holding in this open enrollment period could make a big difference. There's significant potential for confusion, and the consequences of getting it wrong would be a tough pill for any worker to swallow.
Between new health care reform compliance requirements and the ongoing trend toward greater individual accountability, planning for this year’s open enrollment season is proving to be more complex than ever. On Aug. 7, Mercer presented a webcast to help employers prepare for a successful 2015 open enrollment period, focusing on employee communication and compliance issues. View the webcast replay here. Meanwhile, here are a few key open enrollment pointers from Mercer consultants.
Communicate early and often to the newly eligible (and to those who are not) — 2015 is going to be the big year for the employer shared responsibility mandate under ACA, as employers must now extend coverage to all employees working 30 or more hours per week. Mercer is urging sponsors that will have a large number of employees becoming newly eligible to start communicating with them right away to let them know that they are now eligible (and why), how eligibility was determined, and what they have to now consider. (This is particularly important if employees enrolled in subsidized coverage in the public exchange in 2014 and will not be eligible for a subsidy in 2015 when affordable, minimum value coverage is offered by their employer.) Information should also be delivered to those who remain ineligible and have options in the public exchange. We polled the webcast participants about their communication strategies in this regard, and about two-fifths of those with newly eligible employees said they are planning special communications to this population prior to open enrollment.
Make voluntary benefits a big part of the open enrollment message — Voluntary benefits can deliver significant value to employees and are an important element of a thoughtfully designed benefits program. For example, an employer that has introduced a high-deductible consumer-directed health plan should consider promoting a voluntary hospital indemnity plan to help assuage fears of potentially high out-of-pocket expenses. These offerings can also assist employees who remain ineligible for the employer-sponsored medical plan.
Use open enrollment as an opportunity to reinforce wellness campaigns — Mercer is encouraging all of its clients with new or existing wellness campaigns to use open enrollment as a means to reinforce the value and rules surrounding these programs. This is particularly important if any perceived compliance penalties are going to be introduced next year, such as higher premiums for those who do not participate in health screenings.
Deploy decision-support and mobile technology to support the accountability theme — Participants are being asked like never before to take accountability for their health benefit decisions and cost outlays. Employers can help by providing decision-support tools that empower participants at the exact time and place that they need to make important decisions. For example, some employers are providing digital “wallet cards” for smart phones and other devices that contain benefit information and contacts needed at the point of service or anywhere else a participant needs information or advice.
As a better way to ensure successful open enrollment outcomes, Mercer has developed a short checklist for employers to follow as they design, implement, and roll out their 2015 health benefit program offerings.
- Consider offering a consumer-directed health plan.
- Communicate early and often.
- Make voluntary benefits a big part of the message.
- Reinforce wellness campaigns.
- Support accountability with decision-support tools.
Read the full article outlining Mercer’s recommendations as published online by Employee Benefit News. We’re also hosting a live webcast at 1 p.m. ET on Thursday, Aug. 7, to provide information and suggestions for planning an open enrollment program that meets new and ongoing legal requirements, and the needs of participants and sponsors alike. Register now for this discussion on how to maximize the open enrollment process in light of health care reform changes.