It’s almost time for group health insurance open enrollment and your top priority should be to drive participation by helping your employees make informed decisions about their options.
You’ll want to help your staff understand all of their options so they can choose plans that are best for their age, health and life situation.
This is an important exercise to ensure that any of your workers don’t pick a plan that costs them too much in premium if they rarely use their health insurance, or costs them too much in out-of-pocket expenses if they are frequent users of health care.
It’s a balancing act, since each employee has different needs. Here’s our advice for the open enrollment:
Listen to your workforce
Before you make any decisions, you should listen to your employees and better understand their needs and preferences.
With answers and feedback in hand you can create a benefits package that is more appealing to them, which in turn gives you a competitive edge when attracting and retaining workers.
Engage employees and solicit feedback through quarterly employee-benefits round table meetings. Invite employees from different age groups and different departments to participate in these meetings, to ensure you have a good cross-section of your staff represented.
Give advance notice
You can start now with simple reminders for them to start thinking about open enrollment and evaluate their current health plans. Send out memos and place posters in high-traffic areas.
If you start with this in September or October, they can have time to assess their options, particularly if anything has changed in their lives like marital status, new children or health issues.
Costs are paramount
You can work with us to settle on plan arrangements that will be within your and your employees’ budgets, and that comply with the Affordable Care Act’s affordability and minimum value rules.
Employees have a right to understand the costs they’ll be facing in each plan, including:
Their share of the premium,
Their deductible,
Their copays or coinsurance, and
Other out-of-pocket expenses.
Typically, the higher the premium on a plan, the lower the employee’s out-of-pocket costs are. The lower the premium on the plan, the higher the deductibles and copays.
Get an early start
If your plan year starts Jan. 1, you should hold open enrollment meetings and dispense plan materials in October or November.
This will give your workers time to review all of their options and compare costs and coverages.
Communicate effectively
Your task is to get employees out of cruise control and truly assess all of their options.
This is especially true if you are making changes to cost-sharing, introducing new plans, or offer voluntary benefits, a wellness plan or health savings account or flexible spending account.
You should use a variety of different media to communicate with them. Use video, virtual and live meetings, e-mail communications, text messages and print materials to get through to your employees. Each generation will often have a preferred medium, so using a multi-pronged approach may be most effective.
Get spouses involved
If you also offer insurance to your workers’ families, you should communicate through your employees that their spouses are also invited to join your open enrollment meetings.
You may also invite them to view any electronic material you may post online, like the aforementioned videos.
If they cannot make a general meeting, you can invite them to come in to meet with your human resources manager if they have questions.
Remind staff of the ACA
You can use open enrollment as a way to remind your workforce of their responsibilities to secure coverage under the ACA.
Let them know that employees who refuse coverage that complies with the ACA from their employer and opt to purchase it on a public exchange, will usually not be eligible for government premium subsidies.
The meeting
Send out meeting notices early to give your employees time to prepare and set aside time.
Try to make the meeting engaging with props, videos, printed materials and more. You may also want to consider recording the session so that staff who can’t make the meeting can watch it, particularly if you have employees that don’t work on-site.
Provide enough time for the main presentation, as well as for questions from your employees.
The takeaway
Open enrollment can be a hectic and stressful time for both the employer and workers. By getting a head start on planning and communications, you will be ahead of the game and your employees won’t feel harried into making a decision. That benefits both them and your organization.
Some of the nation’s largest insurers have announced plans to roll back their prior authorization requirements for medical services.
Prior authorization — or prior approval — has always been a thorn in the side of patients, often keeping them from accessing care in a timely fashion. The moves by these insurers come after the Centers for Medicare and Medicaid Services (CMS) announced earlier this year that it would require health insurers to automate prior authorization and return decisions more quickly.
These developments are good news for your employees and should improve their health care experience and access to timely care. Many of these changes took effect immediately and some will start in 2024.
Under prior authorization, doctors and other health care providers must obtain advance approval from a health plan to qualify for coverage before they deliver a specific service to the patient. Health insurers have lists of services that require prior approval, in order to control their costs.
During the process, a provider must submit administrative and clinical information to the insurer when requesting approval for a certain procedure or service. The process can sometimes be time-consuming, and doctors argue that it often delays care and results in negative outcomes.
On the other hand, insurers say that prior approval helps protect patient safety and improve affordability by increasing adherence to evidence-based standards of care.
Not all services require prior authorization, and each insurer has a different list of services that require it.
What insurers are doing
Here are what a few of the nation’s largest health insurance players are doing:
Cigna — In August 2023, Cigna announced with immediate effect that it would no longer require prior approvals for nearly 25% of medical services. That includes some 600 prior authorization codes in its commercial plans. This adds to the more than 500 codes that Cigna had removed prior authorization for since 2020, according to the insurer.
UnitedHealthcare — UnitedHealthcare, starting in Spring 2023 and lasting through the end of the year, aims to eliminate almost 20% of its current prior authorizations. In 2024, the insurer plans to roll out a “gold card” program, which will allow certain providers, whose prior authorization requests are consistently approved, to perform most procedures without needing prior approval.
Independence Blue Cross — The insurer and Philadelphia-based Penn Medicine are piloting a program that will allow qualifying physicians to skip prior authorization approvals needed for ultrasounds, CT scans and PET scans.
Aetna — In 2022, The insurer rolled back prior authorization requirements on cataract surgeries, video EEGs and home infusion for some drugs. Aetna said that it had also reduced automated prior authorizations by more than 10% in 2022, with plans to more than double that this year, according to press reports.
Forcing insurers’ hands
Analysts say that insurers are reacting to regulators’ and lawmakers’ attempts to address some of the problems that prior authorization creates.
The CMS in April 2023 announced a rule that would require health insurers to automate prior approvals and expedite decisions. That was followed by a rule addressing prior authorization in Medicare Advantage plans.
Meanwhile, there are bipartisan efforts in Congress that aim to streamline prior authorization, in order to speed it up and reduce the chances of delayed care in Medicare Advantage plans.
States are also taking matters into their own hands. Legislation in Pennsylvania, for example, requires health insurers to provide a more streamlined process for approval of non-urgent and emergency services. Texas exempts doctors with a 90% authorization approval rate for certain services from prior authorization requirements.
The takeaway
As regulators and lawmakers bear down on health insurers around the country, expect more carriers to roll out plans to reduce the use of prior authorizations for services.
The reasoning among many insurers is that they can get ahead of them by taking steps before regulations and laws are implemented. It will be your employees who will benefit from these actions.
The Equal Employment Opportunity Commission has issued new guidance for employers to provide reasonable accommodations for visually impaired workers who request it.
About 18.4% of all American adults have at least some difficulty with their vision, even when wearing corrective lenses, according to the U.S. Centers for Disease Control and Prevention.
The new guidance addresses what employers who have a vision-impaired job applicant or worker can and can’t do under the Americans with Disabilities Act and what to do if they request, or if you want to offer them, specific accommodations to help them perform their jobs better and more safely (or help them complete the application process).
Under the ADA, if a worker with a disability asks for accommodation so they can better perform their job, their employer must enter into an interactive process with them to discuss ways that accommodation would be possible. You do not have to provide accommodation if doing so would be an “undue hardship.”
Here are the main points of the EEOC guidance:
Reasonable accommodation
The guidance lays out a number of accommodations that employers can provide for workers or job applicants with visual impairments, including:
Guide dogs,
Assistive technology, including:
Screen readers (or text-to-speech software). These are software applications that can convert written text on a computer screen into spoken words or a Braille display. These tools can allow individuals to quickly review written text.
Optical character-recognition technology that can create documents in screen-readable electronic form from printed ones, including an optical scanner (desktop, handheld or wearable).
Systems with audible, tactile or vibrating feedback, such as proximity detectors, which can alert individuals if they are too close to an object or another person.
Website modifications for accessibility. This entails taking steps to ensure that job applicants and employees can access and timely complete job applications, online tests or other screening tools.
Documents in Braille or large print.
Ambient adjustments (such as brighter office lights); and sighted assistance or services (such as a qualified reader).
Asking about vision impairment
According to the new guidance, applicants are not required to disclose they have any type of vision impairment or disability unless they are seeking a reasonable accommodation to assist with some aspect of the application process, such as a larger font or Braille on the written application.
Employers cannot generally ask questions about obvious vision impairment. However, if you “reasonably believe” the applicant will need an accommodation to perform the job, you may ask if one is needed, and if so, what type.
For example, if a job applicant uses a white cane when entering the room for a job interview, you can ask if they would need a reasonable accommodation in the workplace.
Once someone is hired or after they’ve received an offer, you may ask certain questions such as:
How long the applicant has had the vision impairment.
What, if any, vision the applicant has.
The applicant’s specific visual limitations and what reasonable accommodations may be needed to perform the job.
The takeaway
The EEOC guidance is expansive, and this article focuses on the main parts of it. Among the other areas it covers are:
How an employer should handle safety concerns about applicants and employees with visual disabilities.
How an employer can ensure that no employee is harassed because of a visual disability.
The importance of keeping medical records of workers with a vision disability confidential.
How to avoid discriminating against individuals who are vision-impaired.
Finally, considering that nearly one in five U.S. adults has some form of visual impairment, this guidance aims to help employers find a solution for reasonable accommodation. Many accommodations can be implemented with little cost to a business.
If you have questions about the new guidance, please call us.
The IRS has significantly reduced the group plan affordability threshold — which is used to determine if an employer’s lowest-premium health plan meets the Affordable Care Act rules — for 2024.
The threshold for next year has been set at 8.39% of an employee’s household income, down significantly from 9.12% this year. The lower threshold will likely require employers to reduce their employees’ premium cost-sharing level for their lowest-cost plans in 2024, to avoid running afoul of the ACA.
This is happening just as group health plan premiums are expected to climb at a much faster clip in 2024 than the last three years.
Under the ACA, “applicable large employers” — that is, those with 50 or more full-time or full-time equivalent employees (FTEs)— are required to offer at least one health plan to their workers that is considered “affordable” based on a percentage of the lowest-paid employee’s household income.
The lowest level yet
The new level is the lowest affordability threshold since the ACA took effect, and almost one-and-half percentage points lower than the 9.89% threshold in 2021. The new threshold will apply to all health plans when they incept in 2024. For plans that incept after Jan. 1, the 2023 threshold will apply and change to the new rate when they renew later in the year.
Employers can rely on one or more safe harbors when determining if coverage is affordable:
The employee’s W-2 wages, as reported in Box 1 (at the start of 2022).
The employee’s rate of pay, which is the hourly wage rate multiplied by 130 hours per month (at the start of 2022).
The federal poverty level.
Example: The lowest-paid worker at Company A earns $25,987 per year. To meet the 2024 affordability requirement, they would have to pay no more than $2,180 a year in premium (or $181 a month).
Employers with a large low-wage workforce might decide to utilize the federal poverty level ($14,580 for 2024) affordability safe harbor to automatically meet the ACA affordability standard, which requires offering a medical plan option in 2024 that costs FTEs no more than $101.94 per month.
If an employee’s coverage is not affordable under at least one of the safe harbors and at least one FTE receives a premium tax credit for coverage they purchase on an ACA exchange, the employer may have to pay a penalty, known as the “employer shared responsibility payment.”
The shared responsibility payment for 2024 will be $4,460 per employee that receives a premium subsidy on an exchange, up from $4,320 this year.
The takeaway
As 2024 nears, you should review your health plan costs and premium-sharing to ensure that your lowest-cost plan complies with the affordability requirement.
We can help you assess affordability to ensure you don’t run afoul of the law. It will be particularly crucial in 2024, considering the significant drop in the threshold.
A new report by Aon warns employers to expect average group health insurance costs to increase 8.5% in 2024, as inflation starts hitting the cost of delivering care as well as pharmaceuticals.
The report predicts that employers will pay an average of $15,088 in 2024, compared to the average this year of $13,906. The cost hike is almost double the 4.5% increases employers saw in 2022 and 2023.
Despite the large expected premium increases, employers still seem to be reluctant to pass on more of the premium cost to their covered workers. For example, for this year, employees saw their premium payments increase an average of just 1.7%.
The challenge will be for employers to properly budget for these cost increases, while not pushing too much of the hike onto their employees, particularly in this highly competitive job market.
The cost drivers
There are a few reasons rates are climbing:
Health care inflation — This is the main culprit behind the expected rate hikes. While health care providers have been contending with inflation since 2021, they’ve been unable to pass them on to health insurers because they usually enter into three-year contracts with locked-in rate hikes.
As these contracts are renewed, health care providers are demanding higher fees for services due to their own costs increasing, particularly for staff wages, equipment and supplies. For example, the cost of emergency services supplies, including ventilators, respirators and other critical equipment, increased by almost 33% between 2019 and 2022.
New technologies — New technologies that hospitals use are also increasing in cost, as is the cost of servicing and installing the equipment.
Catastrophic claims — Every catastrophic claim requires varying levels of intervention and care. Many will require specialized medical care, extensive rehabilitation, advanced medical equipment and potential vehicle and home modifications. Catastrophic claims costs are increasing due to:
Hospital staffing shortages
More high-cost injectable drugs
Increasing cancer rates
Longer hospital stays resulting from multiple conditions, complications and complex procedures
Higher medical equipment costs
Skyrocketing costs of home modifications.
Pharmaceutical costs — There are two significant drug cost drivers:
Specialty drugs: These are significantly more expensive than their traditional drug counterparts, often costing more than $2,000 per month per patient. However, some pharmaceuticals cost much more. The drug Tretinoin, which can help manage complications of leukemia, costs $6,800 a month. Others cost upwards of $100,000 per year. The cost and utilization of these drugs is growing, according to Aon.
New weight-loss drugs: The newest pharmaceutical cost driver is the proliferation of trendy new weight-loss drugs like Wegovy, Saxenda and Ozempic, which cost more than $1,000 a month. These have proven to be highly effective in helping people lose weight and are in high demand. Insurers typically won’t cover these medications if someone simply wants to lose weight, though.
Cost-shifting hesitation
The report predicts that employers will be hesitant to make significant changes to how much their employees contribute to their health plan premiums.
Aon estimates that the average employee premium contribution in 2023 is $2,682, while they pay out another $1,993 in deductibles, copays and coinsurance.
“We see employers continuing to absorb most of the health care cost increases,” Farheen Dam, North American Health Solutions leader at Aon, said. “In a tight labor market, plan sponsors are hesitant to shift significant cost to plan participants and make benefits less affordable.”
Talk to us about your options as 2024 approaches. We can help you with different plan designs and cost-sharing arrangements that may reduce your firm’s premium outlays.
If you are running a business, you need to get an early start on preparations for your small group health plan open enrollment, particularly now as so much confusion abounds about the state of health insurance in the country.
With recent new regulations, options have changed for employers and you need to stay focused on maximizing your outcomes within your budget. You also want to drive participation, as that too can reduce overall rates for you.
Understand your options
Familiarize yourself with the various options that you have:
Health maintenance organizations – HMOs are typically the least expensive plans because they require enrollees to visit their personal physicians and tightly controlled in-network doctors. Going out of network is discouraged with high out-of-pocket costs. An HMO will usually only pay for care outside of the plan network when it’s an emergency or another unusual situation.
Preferred provider organizations – PPOs contract with hospital and provider networks to help control costs. While they will cover services outside of the network, the cost is higher than going in-network. PPOs are more flexible than HMOs, but premiums are often higher – as are some out-of-pocket costs.
One difference from an HMO: PPO enrollees don’t need a referral from their primary care physician if they are going to a specialist.
Point of service – A POS health plan is a mix between an HMO and a PPO-style health insurance policy. With a POS health plan, your staff has more choices than with an HMO, but they will usually need to select a primary care provider and need a referral to see a specialist.
Exclusive provider organizations – The EPO is also a PPO-HMO hybrid. Enrollees need to receive covered services inside of the network, except in a few instances, but they can also see a specialist without a referral from their primary care doctor.
Besides the above, you will also need to decide if you want to reduce the premium for your organization and staff by offering high-deductible health plans. These plans can be either an HMO or a PPO, but they have the same feature of having a high deductible that needs to be met before benefits really kick in.
For 2024, for a plan to qualify as an HDHP the deductible must be at least $1,400 for an individual and $2,800 for a family. The average HDHP deductible is $2,349, but many plans exceed $3,000.
These plans usually have an attached health savings account to which your workers can transfer funds pre-tax from their paychecks to use for paying deductibles, copays and other medical expenses.
Check your budget
In 2022, group health insurance premiums averaged $659 a month ($7,911 annually) for single coverage, and $1,872 per month – or $22,463 per year – for a family, according to a survey of employers by the Kaiser Family Foundation.
You can reduce your premium outlays by imposing higher premium cost-sharing requirements on your staff. But, make sure you stay within the guidelines of the Affordable Care Act, which requires that plans be “affordable,” meaning they cannot cost more than 9.12% (in 2023) of an employee’s household income. This number changes each year, and the percentage has not yet been set for 2024.
Be mindful, though: if you try to unload too much of the premium on your workers, you may see people leave your plan and, if too many decide not to participate, you may not be able to offer the policy. Try to offer plans that will be valuable to your staff as well as affordable.
Maximizing enrollment
If you want to find out what your employees expect from their benefits, you can run a survey of all your staff. It can cover the basic elements of the plans you are going to choose from, and ask them which ones they would find most valuable. Then, move forward organizing your plan based on their response.
Your goal is maximum participation, and you can work with us to start disseminating materials and reaching out to those who may need plans explained to them. Give them some time to look the plans over. Employees want to know what changes are being made to their benefits packages in advance, so make sure you give them time to look through the offerings.
Next, plan to hold a meeting a month before open enrollment starts, in order to go over the plans and options with your staff, as well as any significant changes you’ve made.
During the meeting, highlight the value of each of the plans you are offering. Unfortunately, there will be those among your staff that haven’t really paid attention at all to the plan documents you gave them earlier.
