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Communicating to Employees About Health Insurance Open Enrollment

health insurance open enrollment

Ahh, open enrollment season. It’s the time human resources and benefits professionals spend much of the year preparing for, even though many American workers don’t think twice about their health benefits from one year to the next.

However, this year, open enrollment should be given a second thought … and maybe third and fourth thoughts, too.

According to the 2013 Aflac WorkForces Report, 90 percent of consumers are on autopilot, meaning they select the same health insurance plan year after year. This statistic becomes alarming when coupled with data from Aflac’s Open Enrollment survey, which found that as of August 2013, 70 percent of employers had not communicated changes to health benefits as a result of reform, despite the Oct. 1 deadline.

What this means is people may be apt to select the same coverage again for 2014 without understanding how their company’s health insurance plans have changed. This could lead to wasted funds if workers are paying for extra coverage they won’t need. Alternatively, employees could find themselves without some coverage if their insurance benefits have decreased.

You may be wondering, “How can my small business communicate effectively to employees while also meeting reform’s many requirements?”

The six key messages below can enable you to cut through the noise to help your employees avoid costly mistakes.

Communicating About Health Insurance Open Enrollment

Your Company’s Plan

By Oct. 1, 2013, most small businesses should have told workers whether or not they plan to offer employer-sponsored major medical insurance, and to provide information about the Health Insurance Marketplace [1] (also known as exchanges) and potential subsidies.

Take note, and know that if you have 50 or fewer full-time equivalent employees, you will be eligible to participate in the Small Business Health Option Program (SHOP) Marketplace next year.

Workers’ Risk of Losing Employer Contributions

If workers purchase coverage through exchanges, they may miss out on employer contributions to company-offered health benefits. They may also lose the tax break from employer contributions that are excluded from federal income taxes.

This information should have also been included in the Oct. 1 notice.

Your Company’s Benefits-Coverage Level

Workers need to know your company’s level of benefits coverage to compare plans accurately. Today’s average actuarial value (AV) of employer-provided coverage is 80 to 89 percent. Actuarial value (AV) is the amount a plan is expected to pay, on average, for the Essential Health Benefits (EHBs) offered by the plan. The remaining amount is represented as co-payments, deductibles, and co-insurance and would be paid by the covered individual(s).

In addition to offering plans with 80 and 90 percent AVs, the public Health Insurance Marketplace will offer plans with the same benefits levels but lower AVs (60 and 70 percent), which means lower premiums but more of out-of-pocket costs such as copays, deductibles and co-insurance.

Money Your Small Business Contributes

Talk to employees about your company’s investment to paint a clear picture of their total compensation packages.

Since health care costs continue to rise, your total contribution can have a substantial effect on workers’ wallets.

Voluntary Benefits Offerings

Even for those with major medical insurance, voluntary insurance policies can provide a financial safety net in the event of serious illness or injury.

Because dental insurance is the only voluntary benefit offered through the public Health Insurance Marketplace, other voluntary options such as disability, life and accident coverage must be purchased separately.

Your Company’s Total Rewards Strategy

If your company offers perks such as a wellness program [2], flex time or discount gym memberships, boast about them during open enrollment. It is the perfect opportunity to educate workers about all your company has to offer.

Some might not enroll in these programs, but awareness will improve employees’ opinions of your company’s benefits.

[1] [3] Gabel, J.R., Lore, R., McDevitt, R.D., Pickreign, J.D., Whitmore, H. Slover, M. & Levy-Forsythe, E. (2012). More Than Half Of Individual Health Plans Offer Coverage That Falls Short Of What Can Be Sold Through Exchanges As Of 2014. Health Affairs, 31(6):1339-1348.

Health Care [4] Photo via Shutterstock