Making the Most Out of Open Enrollment

OpenEnrollment

Nearly half of employees are stressed by the open enrollment process and only half are confident about the benefit decisions they made last year, according to a study by MetLife. Millennials are the most stressed and confused. When asked about the most effective benefit resources, respondents ranked one-on-consultations well above other resources. In fact, Millennials led their generational counterparts in valuing one-on-one consultations. However, only half of employers offer one-on-one consultations. Sixty percent of Millenials consult with their families and friends on benefits. MetLife says that employers need to help their employees connect the value of non-medical benefits to their day-to-day lives. Employers should also do the following:

  • Make sure that employees fully understand key terms such as “deductible,” “premium,” “PPO,” and “HMO.”
  • Have employees ask themselves, “Do I have a big life event coming up, such as marriage or retirement?” It’s critical to choose benefits based on present and future needs.
  • Make sure that employees review their benefits and fully understand them. Only half of employees said they thoroughly reviewed their benefits choices last year.

The survey also reveals how employees feel about their benefits:

  • Financial uncertainty: In contrast to decreasing unemployment numbers, American workers remain pessimistic about their financial future. Less than half feel in control of their finances. Even fewer expect their situations to improve in the next year (46% in 2015, compared to 52% in 2014). More than half are concerned about having enough money to cover out-of-pocket medical costs as well as meeting monthly living expenses and financial obligations. These worries that have increased every year since 2012.
  • Job Satisfaction: More than half of employees are satisfied with their jobs and are committed to the organizations’ goals. An increasing number plan to be with their companies a year from now.
  • Financial Benefits: 71% of employees consider work to be the foundation of their financial safety net. Sixty-two percent of employees want more financial security benefits. Millennials are more financially vulnerable compared to their counterparts. Gen Xrs say they are less secure than other generations.
  • Appreciation of benefits: Half of employees agree strongly that their benefits help them worry less about unexpected health and financial issues. Seventy percent of employees say that having customizable benefits would increase their loyalty to their employer.
  • Supplemental benefits: Employees continue to ask for a range of solutions, especially for more common benefits, such as medical, prescription, 401(k), dental, life, and vision care. Employers are keeping pace with many of their employees’ top benefit requests. However, there are large gaps in accident insurance, critical illness, and hospital indemnity. Most employers understand how non-medical benefits can provide financial protection, such as offsetting out-of-pocket medical expenses. Yet, only 47% of employees believe that supplemental health benefits can help close these gaps.
  • A streamlined plan design: Plan design, claims management, and implementation rank highly as advantages of streamlining the number of carriers that employers use.
  • Use of enrollment firms: Three-quarters of employers have positive attitudes towards enrollment firms. Seventy-one percent of employers say that working with an enrollment firm helped them improve benefit communications.
  • Wellness plans: More than two thirds of employees are interested in physical well-being programs that reward healthy behavior. This is especially true among Millennials (75%) and female employees (72%).
  • Retirement Benefits: Forty percent of employees say that having retiree benefits is a key reason to stay with their employer. Millennials feel the most strongly about this, probably due to their lack of financial confidence. About a third of employees plan to postpone retirement, an increase of 5% over 2015. Almost 6 in 10 employees plan to work or consult once retired. Of this 60%, 44% plan to work part-time.
  • Older workers: With today’s workers redefining what it means to be a retiree, employers must also redefine what retiree benefits look like in order to appeal to this rich reservoir of talent. For example, 63% of employees say that dental is a must-have retiree benefit while only 42% of employers offer it. Similar gaps can be found across other critical non-medical benefits, such as vision and life insurance. More than half of employees say that their employer does not offer any employer-paid non-medical benefits. With retiree benefits being such an important loyalty factor for many employees, employers have an opportunity to keep pace in 2016 and beyond.

Consumers Spend Little Time Choosing Health Plans

With open enrollment for 2016 underway, 59% of consumers say they will spend less than 30 minutes selecting a plan, according to an October HealthMine survey. “Consumers are treating an increasingly complex and costly purchase with inertia. With rising out-of-pocket costs, narrowing networks, and growing prevalence of chronic disease, not doing your due diligence on healthcare coverage could be hazardous to your health—and to your pocketbook,” said Bryce Williams, CEO and president of HealthMine.

The most important factors in selecting a health plan are monthly premiums and out-of-pocket costs. However, 76% of consumers don’t know what they spent in total out-of-pocket on drugs in the past year. And 67% don’t know what they spent out-of-pocket for doctor visits and labs. In addition, 42% don’t understand their total spend on monthly premiums.

Even though 85% of respondents say they have a good idea of needed services in the coming year, 36% find their plan somewhat or very confusing. Of those, 58% are most perplexed about which services are covered by their plan. Another 46% are confused about costs. Twenty-eight percent don’t know how to get the most from their wellness program. Sixty-six percent of consumers don’t plan to make any changes to their health plan in this enrollment period. Forty percent say that there has been no recent change to their plan’s quality and value. Another 35% say their plan is getting better.

What Employees Need to Ask During Open Enrollment

Transamerica is offering a list of questions that employees should be asking during open enrollment. Renee Preslar, communications manager at Transamerica Employee Benefits said, “It’s important to spend time reviewing your company’s voluntary benefit options. With high deductible health plans on the rise, supplemental insurance can add value to your benefit portfolio and help you save money on your annual medical expenses. Here are the questions:

  • What’s my share of medical costs? Deductibles, copays, and coinsurance amounts are on the rise, so be sure to find out what they are. An important part of financial planning is understanding what you would have to pay for a costly medical event, such as an accident or critical illness.
  • What are my out-of-pocket non-medical expenses? Your major medical insurance does not cover expenses, such as transportation, child care, and lost income due to missing work. These non-medical costs can add up quickly.
  • Do I want to use my savings for these expenses? Even if you have enough money in the bank to handle these expenses, wouldn’t you rather use your savings elsewhere? The cost of supplemental insurance can be far less than the cost of a medical emergency. For example, a critical illness policy would pay a lump-sum cash benefit after a heart attack; that money could be used for travel to see a specialist or to cover child care while you focus on recovery.
  • How would I make up for lost income if I became disabled? One of the most crucial items to protect is your income. Many employers offer some coverage for long-term disability. Consider what could happen if you couldn’t work for three to six months due to a back injury. Short-term disability insurance provides a percentage of your pay for a specified period.
  • What’s my health history? Past problems could indicate a predisposition to other problems. It’s not fun to think about risks to your health by things like smoking or watching sports on TV versus actually exercising. Whether or not you’re ready to make changes today, you may need medical treatment based on health habits, so it makes sense to get a policy like hospital indemnity insurance, which pays benefits for hospital stays.
  • What’s my family medical history? Has anyone in your family had cancer, heart disease, or high blood pressure? Consider how cancer insurance or critical illness insurance can help if you’ve inherited certain family illnesses.
  • What does my family like to do in our spare time? Are you playing sports, hiking, or spending time at the lake? Some activities carry more risk for injury. If you or your child has an accident, you’ll need to cover increased expenses. Accident insurance pays benefits you can use for medical bills and other out-of-pocket expenses.
  • Do I go in for routine eye exams and dental cleanings? Your eyes can help detect potential health issues. Plus, protecting your oral health is a crucial disease-prevention strategy. Vision and dental insurance can be a great value. Consider what you’d spend without one or both of these types of policies, and balance that against the cost of coverage.
  • How does my age affect my health risk factors? Getting older can make insurance even more important. At younger ages, the risk is lower so some types of insurance are more affordable. Take a look at your employer’s group rates—they may be lower than you think.
  • Does anyone need my income in the event of my death? Do I have life insurance? Do I have enough life insurance? Group life insurance is competitively priced and offers certain levels of coverage on a guaranteed-issue basis.

What You Need to Know for Medicare Fall Open Enrollment

Medicare’s Fall open enrollment occurs from October 15 to December 7, and is the time of year when people with Medicare can make unrestricted changes to their coverage. As we approach Fall open enrollment, the Medicare Rights Center offers the following important updates for 2016:

  • Part B Premiums May Increase for Some
    The standard Part B Premium is expected to remain stable for 70% of Medicare beneficiaries at $104.90 per month; it may increase to $159.30 per month for the remaining 30%. This group includes people who enroll in Medicare during 2016 and people who do not collect Social Security benefits. Also affected by this increase are beneficiaries who pay a higher, income-related premiums based on their income, according to the Medicare Trustees report. Final 2016 Part B premiums will be announced in the fall. People with Medicare should consider the final premium amounts as they make plan selections during open enrollment.
  • There Are More Four-Star and Five-Star Plans
    In 2015, 61% of Medicare Advantage plans are rated from four to five stars in Medicare’s Star Quality Rating. This is up from 52% in 2014 and 37% in 2013.

Covered California Considers Vision Plans and Medi-Cal

Covered California Considers Vision Plans and Medi-Cal
Last month, the Covered California Board introduced potential policy changes affecting everything from vision plans to Medi-Cal. The board is looking for ways to offer vision benefits through Covered California. Under the ACA, adult vision benefits are not considered Essential Health Benefits. Also, unlike dental plans, stand-alone vision plans are not considered qualified health plans, which means that they are not eligible for tax subsidies. Also, resources from Covered California’s qualified-health plans cannot be used to manage vision programs.
To offer these benefits, Covered California is considering providing a simple link from its website to the websites of vision plans. Covered California would collect payments from participating plans to fund the administration of vision benefits program. This model is used by Colorado’s exchange. The board lists these core considerations for the proposal:

  • Covered California would not conduct independent assessments of the networks or scope of benefits in the initial offering year.
  • Standard contract terms would include limits on co-branding and indemnification.
  • Qualified-health plan issuers could offer independent vision plans to supplement medical coverage.
  • Participation would not reflect an endorsement by Covered California.

With an active purchasing model, benefit designs would be standardized and customized to Covered California’s consumers; and there would be rate and service negotiations as well as systems integration (one-stop shopping). Other options are to build upon the CALHEERS enrollment and eligibility system and the Covered California for Small Business system (Pinnacle). The board expects to release an RFP this month, approve a solution on October 8, select vision plan vendors in late October, and link to selected vendors in November. Additional options may be possible after the 2016 initial offering of vision plans.

Covered California is also looking at whether it should still require health insurance agents to help consumers enroll in Medi-Cal without compensation. One option is to allow agents to refer Medi-Cal applicants to county eligibility workers or other certified enrollers. This would connect consumers with the service channel that’s best positioned to help them. But consumers may not follow through, according to the board.

The board also detailed the following program updates that have gone already into effect:

  • Expanded Open Enrollment
    Covered California has added open enrollment dates for the 2016 plan year (November 1, 2015 through January 31, 2016.) Covered California also added a special enrollment period for victims of domestic abuse and spousal abandonment.
  • Expanded Carrier Options
    Two new carriers, United and Oscar, will be offered on the exchange. With the new carriers, and the expanded service area of Blue Shield, Health Net and Molina, over 99% of Covered California consumers will have at least three carrier options. In some cases, consumer will have as many as seven carriers from which to choose. Blue Shield is expanding to all zip codes in the state; Health Net is expanding to cover partial areas of regions three and one; and Molina is expanding to cover partial areas of regions 13 and 17.
  • Premiums
    If consumers switched to the lowest cost carrier in their same metal plan, the average rate decrease would be 4.5%. California’s historical average rate increase for the three years before 2014 was 9.8% in the individual market, so there has been significant improvement in the past two years. Consumers in the Southern California will see lower increases (1.8%) compared to those who live in Northern California (7%). The average premium in Northern California is $384 compared to $296 in Southern California. Twenty percent of Covered California will see premium decreases in 2016.
  • Transparency
    For 2015 open enrollment, Covered California will report results from the qualified-health plan CAHPS survey. Covered California is sharing results from the first survey of exchange enrollees. Only satisfaction scores are available at this time.

Experts float off-season enrollment for voluntary benefits

Some employment insurance experts are recommending moving enrollment for voluntary benefits to a time other than open enrollment periods, when employees are focused on health insurance decisions. Understanding the value of ancillary benefits can be challenging for employees, say experts, but because the products are more important than ever to a comprehensive financial protection strategy, benefits professionals need to ensure employees get the resources they need. Employee Benefit Adviser (3/17)

Some taxpayers will get special ACA open enrollment period

Uninsured tax filers in states using the federal exchange who were unaware they would be penalized for not having health insurance will get another chance to enroll, the Obama administration announced. The special enrollment period will be from March 15 to April 30. The IRS is also sending new forms to about 800,000 tax filers to correct subsidy errors. Reuters (2/20), The Washington Post (tiered subscription model)/Wonkblog (2/20)

Study Supports Shortening the Exchange Enrollment Period

People who shop for exchange plans tend to do so around key dates with shopping dropping off afterward, according to a HealthPocket study. The analysis supports shortening of the annual enrollment period and shifting it to the tax season. Moving Affordable Care Act enrollments to tax season would help consumers make the most informed health plan decisions since tax season is when consumers review critical issues relating to health insurance.

Consumer shopping interest was down more than 50% in the second half of the annual enrollment period for ACA exchange plans compared to the first half of the period. The government has proposed that the Obamacare annual enrollment period for 2016 be shortened to 76 days and start on October 1st. Since the Medicare enrollment period for Part D and Medicare Advantage plans is only 54 days and enrolls millions more people, HHS is expected to eventually reduce the enrollment period for the Affordable Care Act to 54 days. Based on HealthPocket’s analysis of consumer shopping behavior, such a reduction would not cause significant inconvenience for consumers. Reducing the enrollment period to 54 days could also be combined with changing the start date to avoid the overlap of the enrollment periods for the Affordable Care Act and Medicare, which results in call center congestion at insurance companies. Bruce Telkamp, CEO at HealthPocket said, “These changes would not only benefit consumers, but also reduce advertising expenditures by exchanges and insurance companies.

ACA Open Enrollment Tips

Steve Dorfman, CEO of Health Benefits Center, a nationwide insurance provider based in Hollywood, Fla. says that, compared to last year his office has noticed a strong, steady gain in consumers seeking ACA plans. One reason is that second-year enrollees are noticing premium jumps in their renewals and are looking for a better deal.  He said that the ACA website has vastly improved since the 2013 rollout, but it still suffers glitches and shutdowns from time to time. He ansers these FAQs:

  • What happens if I don’t enroll? – You face a higher penalty this year. It’s 2% of your income or $325 per adult and $162.50 per child – whichever is more. That’s more than triple the penalty for 2014. There is a penalty of 1% of your income or $95. Translation, if you are an individual or family of four making $50,000 a year, your penalty is $1,000. If you are making $100,000, your penalty is $2,000.
  • Do I pay a penalty if I am insured through my employer or through a plan off the exchange? – Not if it is a regular PPO or HMO.
  • If I am unhappy with my insurance plan, can I change it over the next year? – Not unless you can prove a life-changing event – such as loss of a job, a drastic pay cut, or a move to another state. Then, you can go back on the exchange. Otherwise, you are locked into your policy. To change it, you must wait until the next open enrollment period begins in November 2015. Also, you will  be re-enrolled in your policy automatically when the next open enrollment period comes. The premium could well change, too. Therefore, it is important to stay on top of your insurer and the healthcare.gov website.
  • What happens if an automatic deduction bounces and I lose my policy? – You can seek another insurance policy in the open market, but not through the exchange.
  • Other than avoiding penalties, what are the advantages for signing onto Obamacare? — One big advantage is that any pre-existing conditions are included in your coverage. Even people with routine medical issues have been denied insurance, and Obamacare helps that. You will pay higher premiums as you get older, or if you smoke. Aside from that, a healthy 45-year-old nonsmoker pays the same premium as an ailing 45-year-old nonsmoker, but a smoker pays more, whether healthy or sick. Perhaps the great advantage is that an Obamacare plan covers your annual exam and such vital preventive procedures as pap smears, breast exams, and colonoscopies.
  • I am a single man. Does my insurance policy still need to cover maternity costs? — Yes, maternity has to be included under the Affordable Care Act even if you have no reason to pay maternity costs. Hence, your insurance rate is higher than it might be otherwise.
  • My employer is charging me a very high rate. Should I try Obamacare? — You should certainly consider it. With your insurance plan, you can qualify for a subsidy if your annual health care premium is more than 9.5% of your household income. So, if you make $50,000 a year, your insurance rate needs to exceed $4,750 a year or about $396 a month.
  • What is my income limit to qualify for a subsidy? – A family of four making $95,400 or less can get a tax subsidy under the program. The lower the income, the bigger the subsidy. A family making $50,000 can get a rate break approaching 70%. The uninsured in particular stand to benefit, especially if they qualify for Medicaid.
  • My child is on a university insurance plan. Can I keep that plan and still have Obamacare for the family? – Not if you want a subsidy. For your children, it must be one policy or the other, as many college parents are discovering to their surprise. One option is to keep your children on their individual plans through their colleges or universities while insuring the parents as an individual or couple. The rates are structured to encourage full family participation.
  • Are costs higher this year? – Generally, premiums are averaging about 7% to 9% more than last year. Catastrophic policies are as much as 18% higher. However, there is wide variation. Certain policies have remained static or even dropped slightly in price. Check your premium if you have an existing policy that rolled over automatically on January 1.
  • Where can I go for more information? – Before you connect with a well-informed agent, it’s best to be armed with information. Two good places to start are the federal government’s healthcare website at www.healthcare.gov. To calculate your subsidy, the Kaiser Family Foundation offers an excellent interactive website at: http://kff.org/interactive/subsidy-calculator/. If not, call a trusted insurance broker, who can tailor a plan to your budget and your needs.

Out-of-sync enrollment periods complicate health plan switches

Getting married, having a child or losing health insurance coverage through an employer’s plan are among the triggers for a special enrollment period, when people can enroll in a spouse’s plan. At other times, people may enroll in a spouse’s plan during open enrollment, but when open enrollment periods do not coincide, employers are within their rights to refuse to allow a switch, says legal expert J.D. Piro, a senior vice president with Aon Hewitt. Kaiser Health News (12/5)

Last Updated 10/20/2021

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