Advisers today need to be able to manage their clients’ benefits enrollment and ongoing communication while also monitoring costs and ensuring plans are in compliance with ever-expanding regulations. Michael Grant, executive managing director for Crystal & Company, says keeping his clients in compliance with the ACA stood out as one of his biggest priorities this year.
“There were a lot of administrative things that needed to be done in 2016 to become compliant, particularly in the area of reporting to the IRS,” Grant says. “In many ways, it was an administrative nightmare and a huge burden for the employer to gather all of the data.”
Then, once the data was in hand, Grant adds, there were complications with accessing the online portal needed to submit the information to the IRS. Problems included the site running slowly or site crashes due to many last-minute submissions.
“As we look back in the rearview mirror of 2016, we see a lot of time spent in the area of complying with the regulations so that the employer would not be fined, taxed or penalized for lack of compliance,” Grant says. “As good as the Affordable Care Act is with the intention to cover individuals to age 26, take care of millions of uninsured and eliminate pre-existing conditions, the compliance piece has been a huge challenge for the employer because many of the guidelines came out late, they were interpreted in different ways and there were short deadlines.”
One such area of ACA compliance difficulty says TJ Revelas, benefits managing partner at Lawley Insurance, was the change in community rating from 50 lives to 100. “That was a big change for companies that were rated differently between 51 and 99 just a year ago,” Revelas says. “That was one of the biggest changes we had to face with our clients in that space.”
Consumerism and transparency
What stood out for Greg Hodges, co-CEO for strategy, sales and finance at Hodges-Mace, in 2016 is the continuation of common employer notions of promoting consumerism, transparency and employer responsibility to help employees spend their money wisely on their benefits.
“We saw increased adoption of high-deductible health plans and more adoption of transparency tools,” Hodges says. “Another [trend] that we’re seeing that follows along the same theme is promoting alternatives to traditional providers.”
Hodges says many people will go to their regular doctor when they need care, or if they need help on the weekends they might go to the ER if necessary, and many of those services can be expensive.
“An employer may put an onsite clinic on a large location or they may introduce a telemedicine plan,” Hodges says. “Those are all things that were not invented in 2016 but are certainly coming of age and gaining popularity among employers.”
When brokers look to 2017 and what is in store for the benefits business, Grant says uncertainty will continue in regards to ACA and other compliance regulations. “There is certainly going to be change, but what that change looks like, no one has a crystal ball to identify that,” Grant says. “There is this great state of flux we are all in.”
Revelas says the benefits business does better when the economy is better, and is optimistic that the economy will continue to improve into next year. “We’re optimistic that economic recovery moves forward and moves up. It has been kind of anemic until now, and that affects all business,” Revelas says. “We are all going to be on pins and needles in terms of what develops with the new president regarding the ACA and what ‘repeal and replace’ really looks like.”
In terms of what trends will be focused on next year, Hodges says financial stability, supplemental medical benefits, parental leave and retirement preparation trends will all carry over into next year and will affect clients of all ages.
“The notion of consumerism increases complexity for employees,” Hodges says. “While it is good over all for managing cost, employees have new responsibilities, and a lot of new resources and tools thrown at them to manage those responsibilities.”
With more tools and more responsibilities moving to more simplified platforms is something that, Hodges says, every employer will need to consider. “There is great stuff out there that employers are adopting, but the lack of engagement or adoption from the employee side could be attributed to being lost in the shuffle of the minutiae of information being thrown at them,” Hodges says.
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