Most Employees Will See Changes in Health Benefits During Open Enrollment

Employees can expect a number of changes to their health benefits driven by rising health costs and the Patient Protection and Affordable Care Act, according to a report by Aon Hewitt. The following are some of the most notable changes employees may see:

A more expensive price tag: Most employers plan to subsidize employees’ health coverage at the same percentage rate as last year. However, employees’ out-of-pocket costs continue to climb as health care costs increase. In addition, nearly 20% have increased surcharges for adult dependents with access to coverage elsewhere.

More options for coverage: Starting in 2014, all Americans must have health care coverage or risk paying a penalty. Some employees may want to purchase individual coverage through the new state and federal marketplaces, particularly those who are not offered health coverage through their employer.

A higher probability of being in a consumer-driven health plan: Consumer-driven health plans (CDHPs) continue have surpassed HMOs as the second most offered plans by employers. In fact, a growing number of employers are offering CDHPs as the only plan option. While just 10% of companies do so today, another 44% are considering it in the next three to five years.

Programs that promote health awareness and education: More employers will offer programs that encourage employees to take a more active role in managing their health. For example, 75% of employers offer health-risk questionnaires and 71% offer biometric screenings such as blood pressure and cholesterol.

More incentive opportunities for exhibiting healthy behaviors: More employers will providing a reward or a penalty for completing or failing to complete programs, such as health-risk questionnaires and biometric screenings. Eighty-three percent of employers have such an incentive in place now.

New eligibility rules: Employers may change the rules that determine which employees are eligible for health coverage, particularly as they evaluate requirements of the employer mandate provision the ACA, which was delayed until 2015. In addition, the recent Supreme Court decision that resulted in federal recognition of same-sex marriages may mean more dependents will now be eligible for benefit coverage.

Craig Rosenberg of Aon Hewitt said, “Employees typically spend very little time choosing their health benefits each year…In some cases, not making an active decision during enrollment means employees could get defaulted into a health care plan that doesn’t meet their needs or leaves them and their families with no coverage at all. It’s up to employees to read the fine print and take an active role in understanding if and how these changes may impact them.” Aon Offers the following open enrollment tips to employees:

• In most cases, if your employer offers coverage that meets certain minimum coverage and cost levels, you are not eligible for a subsidy in the exchange. Most employers subsidize the coverage they offer and allow you to pay for it on a pre-tax basis, which saves you money by lowering your taxable income. Coverage purchased through the exchange is not pre-tax. You can visit healthcare.gov to learn more about the exchanges.

• When evaluating CDHPs, figure out how much you are likely to spend in out-of-pocket costs. Also factor in how much your employer will put into your HRA or whether they will make contributions to your HSA. Forty-four percent of employers that offer CDHPs subsidize premiums at a higher rate than other plan options. Many employers also couple these plans with health reimbursement accounts (HRAs) or health savings accounts (HSAs), which you can use to help pay for eligible out-of-pocket health care costs.

• HSAs allow you to save money by contributing up to $3,300 for individual coverage in 2014 and $6,550 for family coverage on a pre-tax basis, with no use it or lose it rule.

• Before open enrollment, look back at how much you’ve spent out-of-pocket for deductibles, co-pays, and co-insurance. Also look at the number of doctor visits you typically make and the cost of regular prescription drugs. Most employers offer online tools and modelers to help you calculate your prior expenses and estimate your future health care needs.

• If you are participating in a health care flexible spending account (FSA), evaluate if your contribution is too little or too much, based on your actual and anticipated expenses. Remember that you must use any money in an FSA within the year or risk losing it. If you plan to enroll in a CDHP with an HSA, ensure that you understand how your health care FSA is impacted as special rules apply. For example, the health care FSA may be limited to covering dental and vision care expenses.

• Most employers offer tools, such as health risk questionnaires and biometric screenings, and some offer financial incentives for participating.

• Consider any supplemental benefits your employer may offer. Aon Hewitt’s research shows that 28% of employers include access to voluntary supplemental coverage, such as critical illness and hospital indemnity insurance, as part of their annual enrollment process. Often, this extra coverage is available at a lower cost through your employer than if you were to purchase it on your own.

• Look at your health and financial wellbeing, including health care, income protection (For example, life and disability insurance), and retirement planning. Does your spending reflect your needs and priorities? For example, if you aren’t contributing to your 401(k) plan, now may be the time to start. Beginning to save earlier in your career helps to ensure you’re on track to meet your long-term savings goals.

For more information, visit www.aonhewitt.com.

Last Updated 09/23/2020

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