The dust has settled on the Supreme Court's decision to uphold the Patient Protection and Affordable Care Act. Now, for employers, the decision point remains the same: Continue to offer health benefits directly to employees or pay the penalty for opting out of group health coverage and "push" employees to enroll in a health exchange.
Recent survey results published by Deloitte show that approximately 10% of employers plan on opting out of group health coverage. An additional 10% are not sure if they will continue to offer the coverage. Other studies have shown a range of results. The bottom line is that employers will continue to struggle with this decision until the health insurance exchanges become operational in 2014. How can they make a decision without knowing what an employee will experience in an exchange, and beyond?
One way to make that decision is to do the math. Do health insurance premiums cost more than PPACA penalties? All of the studies have shown that there is a group of employers that will make this decision based purely on the math, most likely that 10% to 20% in the Deloitte survey. However, one thing that has remained constant is that a majority of employers believe their benefits program is a key component of talent acquisition and retention.
Total compensation statements have long been available from a variety of vendors. These statements are provided in printed formats (often beautifully designed) or online, or both. Following are the results of a survey of employees, conducted by a division of Ebix Health, about the value of their total compensation statements:
* 89% of employees understand their compensation and benefits better with a total rewards statement.
* Six out of 10 employees say their contribution is nominal when compared to the benefits they receive.
* 86% of employees are satisfied with their total compensation and benefits package.
* More than 90% of employees say total rewards statements help them understand their benefits options.
So, for that majority of employers that consider their benefits program a key to talent acquisition and retention, total compensation statements are an excellent tool in documenting the value of that program. Employers can not only use total compensation statements now to communicate the value of their program, but they can also use the tools and process to play "what if" scenarios about the future value of their program.
Using the data from a total compensation statement project, employers can plug in values for defined contributions, health insurance premium adjustments made on wellness outcomes, or the effect of pushing employees to an exchange. What a great way to engage employers in a strategic discussion about the value of their benefits program now and in the uncertain environment ahead.
Ultimately, the decision to continue to offer health care benefits is a strategic HR decision. It is a decision that will impact a company's second biggest cost after salaries. It is also an important decision in the level of employee engagement affecting both the acquisition and retention of employees. There are two benefits to you as brokers. First, you can sell more services. But, second, you can use total compensation statements as a strategic planning tool with your employer groups to chart a path through the turbulent waters of planning for PPACA.
Lamb is VP and group head of the EbixBenergy business unit at insurance software company Ebix Health. Reach him at email@example.com.
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