I was honored to be asked to convert a previous blog post into a presentation for my fellow Goldman Sachs 10KSB Alumni. Here it is:
Here is a personal look at the impact of the impact the Affordable Care Act has had on me and my family. For reference, in the beginning of 2016, I was 45, my wife 42 and my kids 13, 10 and 5. Unfortunately, we are all a year older going into 2017.
I am using Blue Cross of Louisiana’s most popular Gold-level plan for my unsubsidized premium comparison. The plan has a $1,000 deductible ($3,000 for the family) and and out of pocket maximum of $5,000 going down to $4,800 in 2017 ($10,000 going down to $9,600 in 2017 for the family).
- 2016 Premiums – $1,583.70 per month or $19,004.40 for the year
- 2017 Premiums – $2,023.05 per month or $24,276.60 for the year
That is an increase of $439.35 per month or $5,272.20 for the year. It also represents a 27% rate increase. OUCH!!!
My wife and I both work (pretty hard, I might add). To be fair, if our combined income was lower, we would qualify for some help with this premium. You can check your own subsidy availability here. At $113,000 in combined family income, we would qualify for $303/month in help. At $114,000 or more, we do not qualify for any help. I think this is what President Clinton referred to as “the craziest thing in the world.”
Some more broad trends of note:
- the % increase on some “more affordable” plans (silver and bronze level) is as much as 44%
- there are more “narrow network” plans this year – both in total number and more drastically in % of total plans available.
- comparable small group plans are significantly better priced and offer significantly more coverage options. See – The Small Business Health Insurance Roller Coaster – What is Next? – If you have a business or influence with your small employer, it may be time to run some numbers.
I hope our next President and Congress work together for a better solution for all of our sake. This is not sustainable.
The New Year is always a time for fresh starts and forward thinking resolutions. Here are a few HR Resolutions for 2016:
5. Eliminate/Reduce use of paper for things like employee notices and enrollment forms. Compared to stone tablets, paper was a game-changer. But, in today’s world, it is NOT the best means to deliver mandatory notices or request information from employees. There is (and has been) a better way. It is time to embrace it.
4. Develop at least one HR Metric to track to measure success. This is one of those goals that can meet you where you are. If you currently do not track anything related to HR, maybe keeping an eye on something relatively easy to calculate like turnover or average length of service is a good start. If you are already metric-rich as an organization, it’s time to roll up your sleeves and determine what result would most impact your organization. Focus on your burning question and a metric can be built for you.
3. Increase networking and learning opportunities. HR people, by the nature of their profession, are generally good at networking (know lots of experts in various/related fields) and like to learn new things (which is a good thing given all that has been thrown at HR in the lats 3 years). But, HR people who are not consistently networking with their peers and professional support network AND learning something new regularly CANNOT keep up with the pace of change in 2016 and beyond. Networking is about personal connections and contacts. Though LinkedIn and other social networking sites can accelerate the number of connections, they are not a substitute for personal interaction.
2. Embrace new means of communicating with Millenials and Gen Z’ers. This may be about WAY more than communication and is probably worthy of more than 1 resolution. But, this is where you need to start. From a recent article – “In 2020, Millennials (born between 1980 and 1994) will make up nearly half of the workforce and 20 million members of Generation Z (born between 1995 and 2010) will start their careers.” That is a big deal and relying solely on traditional means of communication will not get your point across appropriately. Mobile and web-native communication technology will be a must, and is certainly worthy of some focus from HR.
1. Get your IT together. With all of your new, post-ACA HR jobs – Compliance Management, Hours Tracking, Notifications, 1095 Reporting,. etc. – it is time to make friends with someone in your company (or a trusted outside resource) that can help you gather, configure, push and pull data from multiple systems. This includes HRIS, Payroll, Time and Attendance, Recruiting, Insurance Carrier, Administrative Vendor, etc. Though data is commonly shared between these parties, you are the one someone will come to when the data does not flow properly. Automatically sharing data between third parties can be tricky and if something goes wrong, they always point at the other one – while you still have an issue to solve.
The world of small employer benefits has changed. Isn’t it time you made some changes too?
Reduce the stress of paper-based Benefits Enrollment and disconnected systems for ongoing Benefits Management.
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We build your site to include all your unique eligibility and business rules. This promotes accurate enrollment and eligibility tracking, as well as enabling HR to quickly access all data at any time.
The online system reduces paper work and enrollment errors. Moreover, employees no longer have to fill out multiple forms such as, Medical, dental, flex benefits, etc. One electronic form takes care of it all.
As healthcare reform continues to loom large on the horizon, many owners of small and medium-sized businesses are wondering how the changes will affect them on January 1, 2014. Designed to improve national access to healthcare coverage and medical treatment, the Affordable Care Act will allow Americans to obtain insurance through a new Health Insurance Marketplace. This Marketplace will be a comprehensive resource for “one-stop shopping.” Individuals and employees of small and medium-sized businesses will be able to compare options between private health insurance companies.
Along with this healthcare reform, the Department of Labor has recently issued an employer mandate to help clear up confusion and promote communication with employees. Many Americans are unfamiliar with how the Affordable Care Act will affect them directly or influence their ability to seek medical treatment. The Department of Labor has instructed that all corporations must provide their employees with a written notice that outlines details of how the healthcare reform will affect them. This can include, but is not limited to, informing the employee about the Marketplace, identifying employees that are eligible for premium tax credits, and acknowledging situations in which the employee loses employer contribution coverage to their health benefits plan.
Employer penalties will be enforced for owners of small and medium-sized businesses that fail to take appropriate notification steps regarding the Department of Labor mandate. Originally scheduled to roll out on March 1, 2013, the Department of Labor has changed the deadline with the hopes that employees will receive the information during later summer and fall months when it is due to influence them the most. This new timetable coincides with the open enrollment period for the Marketplace that begins October 1, 2013.
Small and medium-sized businesses that are affected by the employer mandate include those that employ more than one individual and are engaged in interstate commerce, the production goods, care of mentally or physically ill individuals; or work for schools or hospitals. This also includes all local, state, and federal government agencies. As of October 1, 2013, all employers will be required to provide this notice to new employees and offer notification to existing employees. The Department of Labor has provided an example of effective language and terminology to help communicate these changes appropriately. An example for companies that offer a health plan and those that do not offer a health plan can be found on the Department of Labor website.
This afternoon, I gave the following presentation, based on a previous white paper (also below), via webinar. It is approximately 30 minutes long.
In the presentation, I begin with a brief discussion on the History of Health Insurance and a high level summary of some basic elements of Health Reform. With that as a backdrop, I then discuss the following 3 strategies to help employers prepare for Health Reform:
- Defined Contribution Approach
- Health Reimbursement Arrangements (HRA’s)
- Choice and Education
Presentation slides available here:
With many industries now beginning to feel the impact of the current recession, it has become more important than ever for employers and their employees to get the most value possible from their healthcare dollar. Here are 5 tips for stretching these dollars:
1. Give Options – Employer groups of just about all sizes could benefit from providing their employees with choices of health insurance plans. Bottom line is all health insurance choices are expensive. However, since most employers pay a percentage of employee premium, lower cost alternatives are lower cost for employers and their employees. Employees who are given a choice, may just take that choice electing to bear some risk themselves which, if unrealized, results in lower cost for all.
2. Offer High Deductible Plans – When evaluating your plan options, do not overlook qualified high deductible plans. Though these plans may seem like they are too much for average employees to digest or budget for, they are valuable for a segment of most employee populations. Employees are more capable of evaluating these alternatives than employers think – particularly employees who are engaged in the process and aware of their funding alternatives.
3. Flexible Spending Accounts – These plans have been around for a number of years. However, even with relatively recent expansions in eligible expenses, extension of grace period and an general increase in member responsibility from current health plans, average FSA usage is still low. These types of plans offer employers an extremely low cost way to help their employees increase their spending power for what could be a large part of their family expenses.
4. Health Reimbursement Arrangements – HRAs are tools employers can use to directly reimburse a large number of eligible healthcare expenses that their employees incur. The values of HRAs are their flexibility of design (employers can define reimbursable expenses) and their unfunded liability status. An unfunded liability (essentially a promise to an employee) is only paid when the expense is incurred. Though this approach bears some risk, the risk can be defined and budgeted. In addition, it can be funded at least in part by premium savings and any cost of a reimbursement is not a premium expense that will be subject to a rate increase each year.
5. Communicate – None of the things I have mentioned here can be accomplished without a well thought out, ongoing communication plan. These concepts are not the most riveting conversation topics. However, as the dollars (premium, copays, deductibles, etc.) rise, interest in the topics tend to rise as well. Giving employees both access to information and the tools they need to combat escalating healthcare costs are essential to building a benefit plan with the maximum perceived value.