Bundle the way to better coverage

Thanks to the Affordable Care Act, providing employees access to health insurance that complies with federal law is more difficult in 2015 now that another ACA requirement kicks in, mandating that employers with at least 50 full-time employees make available a minimum level of health insurance or begin paying penalties.

The basic premise of minimum essential coverage (MEC) plans is that they must provide coverage for preventive benefits, and failure to offer at least this minimum coverage triggers a $2,000 per employee penalty, with certain conditions applying. What employers may not know is that the individual penalty tax provides an ideal opportunity to step in and offer employees more robust benefits through inexpensive, but complementary voluntary health benefits.

More than penalty avoidance

Employees have reason to consider such benefits. In 2015, the individual penalty (for not having health insurance) rises from $95 per adult to $325 ($625 in 2016), or 2% (2.5% in 2016) of yearly household income, whichever is greater. For children, the penalty goes from $47.50 to $162.50 per child ($347.50 in 2016), and from $285 to $975 per family ($2,085 in 2016). While employees covered by a MEC plan will avoid the penalty and enjoy basic preventive health procedures, of which there are more than a few, they won’t receive coverage for hospital stays or prescription drugs, except contraceptives, with this simplest of plans.

Brokers can help their clients offer a more well-rounded solution to employees, giving them access to additional inexpensive benefits while avoiding federal penalty taxes. By wrapping an MEC plan with a limited health indemnity plan and a basic discount prescription drug plan — both paid entirely by employees — your clients’ employees receive a cost-effective combined benefit that provides financial relief for a variety of medical situations.

The health insurance indemnity plan pays eligible employee a fixed dollar benefit that covers hospital stays, surgeries, office visits and some diagnostic procedures. Because fixed indemnity plans are not subject to ACA compliance requirements, employers aren’t subject to even more red tape. Then, by offering a prescription drug benefit that encourages the use of generics, employers help employees financially meet additional health needs. Some of the more commonly used generics can save covered employees more than 90% over their brand name equivalents with this type of plan.

One-stop shopping

This innovative combination plan gives brokers a new opportunity to get in front of their clients, giving employers an opportunity to offer affordable health benefits to employees — many who did without in the past. Employers offering this inexpensive blend of an MEC plan, indemnity insurance and discount prescription drug coverage will not only meet federal requirements, but show employees how much they care.

There may be plenty of reasons to dislike the red tape, penalties and other complexities surrounding the ACA, but as a broker, you can use combo products like MEC plans not only to steer employers clear of penalties, but alsoprovide valued benefits employees will appreciate. Offering these products and administration from one trusted source will ultimately make your employers’ lives easier.

Fleet is president of AmWINS Group Benefits, a wholesale broker of comprehensive group insurance programs and administrative services. He can be reached at asksam@amwins.com.