The Affordable Care Acts requirement that qualified health plans offer pediatric vision insurance coverage affords benefit advisers an opportunity to talk to employers about vision insurance from a broader lens. This benefit can not only close gaps in adult vision care coverage but also aid employer clients with attracting and retaining employees.
The ACA designates pediatric vision services as one of the 10 essential health benefits that all qualified health plans need to offer if they intend to sell on the public health insurance exchanges available for individuals and small-group employers to shop for coverage. This means that as of January 2014, all small employers with 50 or fewer employees must provide pediatric vision care coverage embedded in a medical benefit for children up to age 19, or face a penalty. In January 2016, this will extend to individual and small groups with 100 or fewer employees.
Self-insured plans, large-group plans and grandfathered plans (purchased on or before March 23, 2010) are not required to offer essential pediatric vision care, but if they do, the coverage must be embedded in their medical plan and cannot have annual or lifetime dollar limits.
The opportunity
The ACAs requirement has exposed a gap in coverage for adults that some benefit industry insiders say is prompting an uptick in voluntary vision benefit sales and creating an opportunity for benefit advisers to have a dialogue with employers about how these voluntary benefits can help employers ease some of the shifting burden of health care costs employees are experiencing.
Tim Falanga, executive vice president of the Managing Agency Group, a division of AmWINS Group Benefits, says the ACA pediatric requirement has undoubtedly created awareness among human resources professionals who may have triggered an increase in vision coverage sales and quotes. Is some of our recent visionary benefit quote activity happening because HR people and employers have had a red flag waved? Im sure theres a percentage of it, he says.
More than half (58%) of employers offered voluntary vision benefits in 2013, up from 44% in 2012 and just 26% in 2011, according to the most recent Aflac WorkForces Report.
Keith Pellerin, vice president of product management and innovation at Aflac agrees: Were certainly seeing an uptick in voluntary vision benefit sales, because the fact its offered for children exposes the gap when its not being offered for adults as well, and that helps enable a conversation between the broker and the employer.
Many employees, employers and consumers in the U.S. do not realize that the essential benefit designation only provides vision coverage for children and that they have to find a plan that covers themselves, as adults, as well, says Pellerin. Educating and ensuring that were enabling brokers and benefit advisers to educate the public more about gaps in coverage like that is going to be important.
A lot of employers think the only way they can offer vision benefits is through employer-paid sponsorship, but thats not always the case, Pellerin adds. The broker can help the employer understand varied plan designs, some of which can offer vision benefits and services to their employees at no additional cost to the company.
Once employers understand that, we see brokers and advisers being able to share solutions around that gap and were seeing that certainly driving an upward trend in employees and individuals getting vision coverage, he says.
Smith Wyckoff, an account manager for Transitions Optical, says advisers and employers also need to do a better job of helping employees understand their vision benefit offerings.
Most vision plans dont do a great job of communicating what products and services are covered, says Wyckoff, adding that when they do discuss benefits theyre often summarized in vague terms or using complicated language, such as lens names, the employees dont understand.
Working with employers to host vision education days for employees or lunch and learn events can help workers make more informed decisions about their vision care, he adds.
At a time when health care costs are increasingly being pushed onto employees, advisers can also help employers understand that offering a vision plan can be used as a tool to attract and retain key talent.
Employees, employers, brokers and agents all acknowledge the cost burden is switching to the consumer, Pellerin says. Voluntary benefits such as vision offer employers an opportunity to ease some of the cost burden for their employees, he adds.
A vision care program is a very low-cost option where the employer can contribute a couple of bucks and the employee says Wow, my employer is kicking in half the premium for this vision benefit, Falanga says. That helps offset the negative reaction the employee has every time their health plan costs go up.
Nearly seven out of 10 employees surveyed by Aflac for its 2014 WorkForces Report say they see a need for voluntary benefits and nearly eight out of 10 say they would purchase the benefits if they were offered by their employer.
Its important for the employer and the broker to see that thats what the customer is asking for, says Pellerin.
And vision coverage is well known to be a very effective purchase in terms of a pricing and value standpoint, says AmWins Falanga.
A vision benefit is seen as a high-value and high-return product by employees, according to Alexandria, Va.-based The Vision Council, because employees dont have to be sick to use it and its cost is typically one-tenth that of a medical plan or less.
About 14 million Americans have some form of visual impairment and two-thirds of all adults report wearing some type of eyewear, according to the Bethesda, Md.-based National Eye Institute.
Market trends
Further, the market itself is evolving based on what customers are asking for, as well, he says, adding that advisers engaging employers about vision care offerings need to take note.
While vision care traditionally has focused on covering eye exams and materials, Pellerin says Aflac has responded to customer needs and evolved some of its vision plan designs to include coverage for diseases, as well.
Employees are also looking for plans that are paperless, Falanga says. Ease of administration and use is clearly a trend, he adds. The easier it is to use, the higher the level of satisfaction and the better the value to the employee.
Falanga says another trend hes seen in the vision care market is carriers offering additional flexible spending dollars to be used by employees at the point-of-service.
So, rather than receiving only a fixed amount of money for frames and a fixed amount of money for lenses, this bucket of money approach allows employees the flexibility to choose to purchase a more expensive frame or instead a more expensive lens coating.
The employee can choose to spend the dollars in several different ways.
The ACAs pediatric vision requirements allow for the coverage of one eye exam and pair of corrective lenses each year.
