You and your employees are probably gearing up for a busy holiday season, but before you deck the halls and wrap the gifts, there's another important season you need to think about: open enrollment.
Nov. 1 marked the beginning of the Health Insurance Marketplace's open enrollment period, when anyone can sign up for health care coverage and other related benefits for the coming year. For many companies, this period coincides with employer-sponsored benefits enrollment, and workers across the country will be making decisions about which plans to sign up for.
If you're one of the countless employers discussing benefits options with your staff in the next several weeks, here are a few helpful tips and things to keep in mind as you conduct your open enrollment meetings.
ACA changes and important regulations
Although health insurance comprises only a small part of the potential benefits package an employer may offer, the Affordable Care Act (ACA) has made health care one of the most important considerations for companies that have employees. Here are some of the key compliance issues small businesses should be aware of this year:
- In early October, President Obama amended the ACA to reclassify companies with 51 to 100 employees so they are not subject to the reform provisions on small-group insurance, which would have led to higher premiums and fewer protections. However, unlike this past year, these midsize employers will be required to offer health insurance to employees in 2016, unless those companies self-fund their workers' claims.
- Any company classified as a "small business" — 50 or fewer employees — remains exempt from having to offer a health care plan to its staff. However, if a small business does choose to offer health insurance, the plan must meet the minimum essential coverage provisions, outlined here by the IRS. Michael Stahl, senior vice president of insurance marketplace and comparison site HealthMarkets, reminded employers that, while some states grandfathered in plans that failed to meet the guidelines, those plans are beginning to expire as premiums increase.
- If you employ fewer than 25 workers who earn an average of $50,000 or less per year, you may qualify for the Small Business Health Care Tax Credit, which covers up to 50 percent of your contributions toward your employees' premium costs if you use the Small Business Health Options Program (SHOP) Marketplace.
- Individuals who own multiple small businesses (each with fewer than 50 employees) will need to determine whether their combined total workforce makes them a midsize or large employer under ACA. If so, they are required to comply with all measurement, reporting and insurance-coverage laws, said David Dent, major accounts manager at payments services provider JetPay.
The SHOP Marketplace operates differently in each state, so be sure to check your local marketplace options before selecting a plan. For more information on how the ACA affects small businesses, visit Business News Daily's guide.
Finding the right plans for your business
If you're currently shopping around for health care, retirement and other benefits plans, here's what you should think about as you review your options.
Group or individual/family plan?
When considering health insurance benefits, most small business owners aren't aware of all their options, Stahl said. Group health insurance is the traditional means of providing employees with insurance benefits, but individual/family health insurance plans can enable employees to obtain more personalized and affordable coverage, and save the business owner significant administrative time and expense.
"By doing that, you access substantial government subsidies that lower the cost of coverage by 70 percent on average," Stahl said. "Moreover, employees aren't shoved into a one-size-fits-all health plan. Instead, they can choose the plan that best fits their needs, from thousands of options nationwide."
Stahl noted that a health insurance agent can help you assess whether group or individual/family insurance is the best structure for your business and your employees. This individual can help you review health plan options from multiple insurance companies and can provide a level of professional expertise and advice to help you make the right decision.
"Work with a knowledgeable insurance [and] benefits broker or consultant who will make sure the benefits you offer are compliant with ACA," Dent added.
Consider costs to you and your employees
Every type of insurance plan has a price tag, and employees don't always consider the administrative fees associated with plans like 401(k)s. Andrew Meadows, vice president of brand and culture at Ubiquity Retirement + Savings, reminded employers to read the fine print and make sure they choose a plan with minimal charges.
"Be aware of the costs, from front end to back end," Meadows said. "Have a great mix of funds that perform well but don't cost much. If it's eating away at your [retirement] savings, it may not be worth it."
Meadows recommended speaking with an adviser you trust to help you understand and communicate how your plan choices will affect employees.
Listen to your workforce
John Neumaier, executive vice president of Arthur J. Gallagher & Co., a global insurance broker and risk-management service firm, said that before you make any decisions, you should listen to your employees and better understand their needs and preferences.
"By strongly engaging employees, an organization can create a benefits package which is more appealing to them, thus ultimately increasing an employer's competitive edge in the marketplace," Neumaier told Business News Daily. "Quarterly employee-benefits round tables are a great way to engage employees and solicit feedback. We encourage these round tables to include the full spectrum of employee groups represented within a company, since the perceived value of a benefits program can vary greatly among different demographic groups within an employer's workforce."
Lesley Grady, senior director at advisory and brokerage services company NFP Corp., agreed that employees feel empowered when they have choice, but added that too many choices are daunting and can lead employees astray. Your staff needs options, but those options need to tie to the company's strategy and workforce culture, she said.
Communicating benefits options to your staff
Once you've chosen your plans and set up coverage offerings, you'll need to communicate those plans to your employees in a way they can easily understand. The way you approach and explain your benefits can mean the difference between employees taking full advantage of their package and missing out on some crucial coverage.
John Park, chief strategy officer at Alegeus, a provider of consumer directed healthcare solutions, noted that many people find the process of benefits enrollment to be difficult and complex. This is especially true when you introduce changes, which lead to an increase in confusion and anxiety.
"Employers are overconfident about communication regarding benefits," Park said. "Most employers only communicate once per year, during open enrollment, [but] communication should be ongoing about enrolling in and using benefits."
"Annual open enrollment is morphing into so much more than employers just sending out a memo and letting employees change their plan elections," Grady added. "It's about engagement [and] providing employees with the tools to make informed decisions, not just to manage their health care, but [also] to manage their health."
Our sources offered their best advice for discussing benefits.
"Educate your employees on basic benefits terminology — deductible, premium, etc. — during each open enrollment cycle. Employees who fully understand their benefits packages are more likely to appreciate them. In fact, employers should use their open enrollment cycle to communicate with their employees, and [should] provide them with as many of the required annual notices permitted to be included in their open enrollment material. This will not only help employees understand their benefits, but will also lessen the burden on employers the rest of the year." – George Katsoudas, division senior vice president, compliance counsel at Arthur J. Gallagher & Co.
"As employers increasingly ask their employees to be better consumers of health care, companies must equip them with the information necessary to make wise cost decisions. A good first step is to ensure that employees know how to access the free transparency tools provided online by most medical carriers. Provide employees with a breakdown of medical and pharmaceutical cost increases to avoid 'sticker shock.' Don't let the worry of overwhelming your employees with information hinder you." – John Neumaier
"Employees need to know what they're getting out of it. Invite [an adviser] to the enrollment meeting. Having an adviser lends credibility [to your retirement plan]. An expert on site can give advice about personal investments." – Andrew Meadows
"Give people the combination of choice and personal accountability for their health care. Part of this is a benefit design that promotes financial responsibility [and] being able to utilize their benefits in the most effective way. In the long term, it will result in better choices and behavior changes that will lead to better health and lower costs." – John Park