Open enrollment season is designed to not only allow employees to make changes to their plans, but also to educate them. Likewise, employers and advisers should use the fourth quarter as an opportunity to stay abreast of the latest changes in health care plans, particularly in the advent of the Affordable Care Act. With that in mind, here are six trends to watch for during the 2014-2015 open enrollment season:
1. Continued adoption of consumer-driven health care plans. These can include health savings accounts as well as pricing structures that put more of the onus on employees to choose and pay for care.
Were seeing employers increasingly promote HSAs to give employees more options and to take advantage of the favorable tax treatment that HSAs provide. Even employers that have historically offered generous health plans are considering bolt-on high-deductible health plans with HSAs as a potential anchor for future changes in anticipation of the Cadillac tax in 2018.
2. Financial incentives/deterrents. Plans will strongly reward wellness initiatives and care that can often include meeting certain requirements.
Examples include: encouraging employees to use preventative care, participating in disease/health management programs, completing biometric testing and achieving health improvement. We are expecting more employers to implement onsite health clinics.
Conversely, expect to see additional costs shifted to unhealthy lifestyles such as smoking. While we have seen employers apply non-tobacco incentives for many years, the ACA allows employers to charge up to 50% more in premiums for smokers than for non-smokers. However, some employers are faced with strict interpretations of state labor code regulations, which may deter them from implementation.
3. Transparency on costs. Technology is changing the game for cost transparency as more consumer-driven care is implemented. Employers and employees need to know about the new tools and platforms that can help direct them to the best care at a competitive price.
Many carriers are launching their own transparency sites, which may be free or at a very low cost to employers. Alternatively, we are seeing an uptick in interest for third-party transparency providers. Charges for these third-party vendors vary; likewise, their features can range from simple to cutting-edge.
Speaking of cost transparency, we are seeing employers consider narrowing their provider network base and assess high performance networks, which may have better patient outcomes and a greater focus on cost and quality of care.
4. Changes to dependent care. Health care reform focuses on the expansion of affordable employee coverage. It does not address health care affordability for dependents or spouses. This is leading to an increase in cost for employees to cover their spouses and children.
More employers are excluding coverage for working spouses eligible for other plans, requiring that working spouses enroll in their employers plan before enrolling in their spouses plan, or charging a hefty surcharge in order for spouses to enroll in a plan if they have alternative coverage options. For dependent coverage, some employers are charging per-dependent rates and stepping up dependent audit procedures.
5. Move to online health management. Manual paperwork will continue to decrease. Employers and employees can now adopt systems that provide decision support, telemedicine and wellness advice.
Employers are considering the value of telemedicine for both primary and specialty care, not just because of the reduced cost of care, but to reduce absenteeism and increase their teams productivity. Plans are now being designed to incentivize employees to seek care using e-visits with low or no copays.
6. Self-Funding. Many more employers, even smaller ones, are evaluating self-funding their medical plans.
For years, many self-funded employers realized significant cost savings due to the exemptions they receive from state and federal regulation, plan design flexibility and the elimination of significant carrier profits. However, the risk may have outweighed the potential reward, particularly for smaller employers. We are seeing a revitalization of interest in self-funding due to new ACA regulations and taxes. Employers are becoming savvy enough to understand the risks and make the leap.
With the health care space changing rapidly as a result of the ACA, technology developments and varying employee demands, its vital that employers stay ahead of the curve, watch for trends and implement changes when needed.
Grady is senior director at NFP in New York City, a provider of benefits, property and casualty and life insurance and wealth management services.
