In this article published on June 2, 2016 in the Sacramento Business Journal, Sutter Health Plus Vice President of Strategic Sales and Marketing Monica Majors explains how to navigate the complex details of health plan benefits packages for small-to-midsize employers.
Nearly 60 percent of California businesses offer health coverage to workers as a benefit of employment, according to a 2014 California Employer Health Benefits survey. Major shifts in the health payer industry due to the implementation of the Patient Protection and Affordable Care Act (ACA) have changed the way health plans do business and the plan options available to small and large group employers.
Some employers allow employees to choose between several plans, while others have limited plan options. For small-to-midsize employers offering multiple plan options, navigating the complex details of benefit packages and employer costs may seem overwhelming without expert guidance. Fortunately, there are several ways for employers to keep the benefit selection process simple and easier to manage.
Use a Broker
Brokers have the expertise to guide employers through the process of selecting a benefit policy, negotiating with health plans, and understanding the current state of affairs in the health care industry.
A good broker has relationships with multiple carriers and can present employers with the right options for them. Brokers can help employers determine a price range and desired benefits, and obtain premium quotes from carriers.
Once employers select a product, brokers can assist employers in explaining benefit options to employees. Brokers can also assist employers to complete enrollment forms, ensuring they are enrolled, and receiving their description of benefits and member cards. Broker services can also continue after enrollment to assist when employees have problems such as denied claims or service issues.
Understand the advantages and drawbacks of coverage options
Depending on employer group size, there can be tax benefits or penalties for offering certain types of coverage. Expenses an employer incurs related to health coverage may be deductible as ordinary business expenses on state and federal income taxes.
Small-business owners should be aware that the ACA introduced health care tax credits to help offset the cost of insurance. In California, tax credits are available through Covered California’s Small Business Health Options Program, known as SHOP.
Large employers may need to restructure benefits in the future to avoid fines under the Employer Mandate, which requires they offer affordable minimum essential coverage or pay a penalty. Additionally, they need to be aware of the “Cadillac Tax” which is currently scheduled to take effect in 2020. This will be a 40 percent tax on benefit plans that exceed specified high-cost limits ($10,200 for individuals and $27,000 for families).
To help manage these types of issues and simplify the benefit plan process, employers may want to use a private exchange—like CaliforniaChoice—which offers features such as online enrollment processing, full and limited provider networks, optional benefits, consolidated billing, and online tools to help members compare plans and provider networks.
Focus on Convenience
Although we have a long way to go before we’re a paperless society, businesses should consider choosing a carrier that provides a high level of convenience, such as online tools and portals. These services are particularly important for members of the millennial generation, who are used to digital tools for all types of services, from ridesharing apps to online benefits enrollment. Employers also need to have tools and resources that are geared toward getting employees what they need quickly.
Provide Basic Coverage Education for Employees
In order to simplify benefits for employees who enroll in plan coverage, businesses should develop a comprehensive educational program that includes basic information on health care reform, laws, mandates, covered services, and network providers.
Many of these topics can be very confusing, and some employees may be completely new to health care coverage. It’s the employer’s role to help them understand what they are selecting and their coverage.
Ask Employees about their Preferences
The common belief is that it can be tricky to get feedback from employees on benefit choices. Many might assume that employees will simply choose the most comprehensive plans that cost the most for the employer. But that’s not always the case.
Solicit employees’ thoughts about a proper benefit mix, pricing and coverage details. Employees who have a voice in the selection process are more likely to accept and appreciate the benefits offered.
Given the breadth of benefit options available, there will always be some complexity. By consulting with experts, understanding coverage options, giving employees what they need through convenient tools, and including employees in the benefit selection process, you’re well on your way to simplifying benefits for you and your employees.
