4 Strategies for Employers and Individuals to Manage Health Insurance Changes
The Patient Protection and Affordable Care Act (ACA) has been modified multiple times since its inception and is again under debate during this presidential election season.
At the heart of the ACA is the availability and affordability of health insurance for employers, employees and non-employed legal residents.
As one indication of success, according to the Kaiser Family Foundation, the percentage of uninsured, non-elderly persons dropped from 18.2 percent in 2010 (prior to the implementation of the ACA) to 10.5 percent in 2015.
However, those who oppose the legislation are quick to add that the cost of health insurance premiums has increased, and what was promised as “affordable” is still often too expensive.
Decreasing number of insurers participating in exchanges
Not only has the legislation been modified multiple times, but the way in which health insurance is made available has also transformed. For individuals and small employers, insurance is offered through what is commonly referred to as insurance exchanges.
However, many of the major insurance companies have stopped offering their insurance product as they have experienced huge financial losses. Following UnitedHealth’s pullback, Aetna, the third-largest insurance company, has also announced that it will stop offering insurance in 69 percent of the counties and 11 of 15 states where it currently offers plans.
The reduction of large insurers offering insurance plans could result in 2.3 million marketplace enrollees in 2017, or 19 percent of all enrollees, only having one insurance company offering plans. In 2016, only 2 percent of enrollees had one option.
Health insurance premiums expected to increase
Larger employers and their employees are not only facing greater regulation and reporting requirements, but they are also facing changes with health care insurance plans. The ACA now requires large employers to offer appropriate health insurance to at least 95 percent of their employees.
According to various studies, health insurance premiums are expected to increase at a greater rate in 2017 compared to 2016. Although it varies by market, 2017 increases are estimated to be 5 to 9 percent, compared to a 2 to 3 percent increase in 2016.
4 strategies for obtaining and paying for health insurance
The solution to the employer and individual mandate will require creativity and innovation, so employers and individuals need to consider different strategies for obtaining and paying for health insurance coverage.
1) Consider becoming part of a Professional Employer Organization (PEO)
The PEO gives employers, among other human resources benefits, the ability to buy health insurance for employees with large group pricing. According to the National Association of Professional Employment Organizations, in 2014, PEOs co-employed (and offered health insurance to) between 2.7 and 3.4 million people.
2) Consider offering more cost-controlled insurance options that might include a narrow provider (physicians, doctors, etc.) network
One recent study indicated that health insurance plans that used a small network of providers were 6.7 percent less expensive than a plan that offered a large network of providers.
3) Examine the relationship of the insurance premium to deductibles and co-pays
Drew Altman, president of the Kaiser Family Foundation, said the shift from comprehensive plans to plans with high deductibles and lower premiums is “the biggest change in health care in America that we are not really debating.”
Between 2014 and 2016, the percentage of workers using high-deductible plans rose from 20 percent to 29 percent. From 2011 to 2016, premiums with high deductible plans increased at a lower rate of 20 percent, compared to a 31 percent increase from 2006 to 2011.
4) Consider using wellness and disease management programs to help improve the health of employees, thereby lowering premiums
A Rand study examined 10 years of data from a Fortune 100 employer and found that the savings to the employer was about $30 per member per month. Employees who participated in the disease-management program generated a savings of $136 per participant per month.
For assistance in reviewing your ACA compliance plan and benefit structuring, or to discuss a cost-saving review of your entire insurance plan, use the adjacent form to schedule a meeting, or contact Ron Present, Partner and Health Care Industry Group Leader, at 314983.1358 or firstname.lastname@example.org.