(Subheader)How to Play the Hand for You and Your Employees

To paraphrase Woody Allen, “managing benefits is like playing bridge.  If you don’t have a good partner, you’d better have a good plan.”

Health Care Reform along with other legislation implemented last year required—and continues to require—a significant effort for employers. The wide range of plan design and administrative requirements that need to be implemented and communicated comes with substantial cost—both in terms of the internal and external resources needed, and the attendant hike in premiums to accommodate such changes as the elimination of lifetime maximums, dollar amounts on preventive care, and the mandatory coverage of adult dependents. Some employers have even gone so far as to eliminate or substantially reduce benefits in an effort to escape the requirements of such recent legislation (most recently, the Screen Actors’ Guild eliminated mental health coverage to avoid the requirements and cost of mental health parity).

But the new legislation also offers a “bright” side: the chance to offer your employees meaningful benefit choices that create a true partnership.
As we move ahead into 2011, most companies have already taken advantage of the golden opportunity to begin more open communications with their employees about their benefits – and, with good cause. A recent poll  suggests that changes due to health care reform encouraged over two-thirds of employees, in recent annual enrollments, to review their benefit options more closely. And an equal number of employees are looking for ongoing communications concerning how legislative changes will continue to impact their benefits and associated costs. While some of the messages communicated—such as premium increases—may have left a bad taste in employees’ mouths, the focus now is how to show employees how actions can determine the impact new legislation will have on their benefits down the line.

So what can employers do?

Leverage What Exists

• 100% Preventive Care Benefits and Wellness. The legislative requirement to provide preventive care benefits at 100% is a perfect launch pad for creating a partnership with your employees. Because “prevention” is closely linked to “wellness,” use this focus on prevention to encourage employees to become accountable for their health and well-being. Social media venues– such as blogs, Twitter, and Facebook – enable you to keep your employees constantly updated on trends in prevention, newly covered preventive tests and diagnostics, and focused topics related to your population’s “pain points” with disease and illness (such as diabetes, high blood pressure, and heart disease).
• “We’re Ahead of the Curve.” If you’ve never imposed a lifetime maximum on benefits or were already covering preventive care at 100%, let your employees know that the company has been ahead of the curve. This positions you as a company with its employees’ best interests in mind.
• Don’t ignore non-medical benefits. Although recent legislation has scarcely touched these benefits, communicating these “employee focused” benefits is now more important than ever. According to a recent PPACA poll conducted by MetLife , “71% of employees who say they have a good understanding of health care reform also say that their non-medical benefits are very important in driving their feelings of employer loyalty.”  Make sure your employees understand the full package of benefits available to them—especially those that are provided at low or no cost.
• Your 401(k) Program. In December 2010, President Obama extended the Bush-era tax cuts, including a one-year reduction in workers’ Social Security taxes by nearly a third, from 6.2 percent in 2010 to 4.2 percent. Your employees will have more in their paycheck, giving you the opportunity to boost your 401(k) participation by encouraging them to redirect those funds to another form of retirement security—one they have control over.

Look Ahead

• Incentives, incentives, incentives. Although the Health Insurance Portability and Accountability Act (HIPAA) brought more attention to wellness programs and having incentives in place for employees who participated in these programs, the Patient Protection and Affordable Care Act (PPACA) will place greater focus on having this type of program in place by 2014. The law will permit rewards or penalties, such as premium discounts, of up to 30 percent of the cost of coverage – an increase of 10% of the total premium set by HIPAA. And, as premium rates continue to rise, being able to communicate to your employees that they have a chance to negate the increased cost with participation in a wellness incentive plan provides you a chance to shift priorities in health care from diagnosis and treatment to focus on prevention and wellness and move responsibility to your employees.

Solidifying Your Partnership: If you already have a wellness program in place, investigate how to bring your incentives up to the current 20 percent of cost of coverage limit between now and 2014 – this will put you in a position to leverage the 10% increase in 2014 and offer your employees more ways to save. Be sure to communicate to employees the impact of participating and not participating in the program in terms of percentages added or subtracted from their current premium rate.

•  W-2 Reporting. As of January 2012, employers must report the aggregate cost of health coverage on employees’ W-2. This is an outstanding opportunity to show employees the “real” dollar value of their benefits. The true cost- sharing partnership will be evident, and employees will see the impact your contribution has to their pocketbook.

Solidifying Your Partnership: Think about incorporating a more effective disclosure of health-care cost information—such as a total rewards statement—into your current communications to employees. Incorporating total rewards statements as an integral part of their employee communications, companies are achieving higher returns on their investment in their employees by helping them understand the overall value of their employment and the link between collective efforts and personal success. 

• Expanded Review Process. While the expansion of the internal and external review process adds another step to the Claims and Appeals process, it also provides an opportunity to provide an opportunity for you to communicate “one extra step” in place to protect your. . It also allows you to eliminate some of the “grey” area around adverse benefit determination. 

Solidifying Your Partnership: Treat this as an opportunity to communicate to employees the non-biased approach to your Claims and Appeals Process. Many employees think their employers are the “bad guy” in these circumstances. Recent legislation allows employers to provide employees with a more detailed, specific understanding of their options – once again, adding value by placing emphasis on employee-driven outcomes.

The administrative challenges associated with recent legislation are daunting. But, the security employees expect from their benefit programs—not to mention the loyalty they hope for in an employer—seem to put perspective on the task at hand. To paraphrase Woody Allen, planning is a good idea, but having a good partner is the first at hand.  Make your choices with that partnership in mind.

Quotes

To paraphrase Woody Allen, “managing benefits is like playing bridge.  If you don’t have a good partner, you’d better have a good plan.”

About The Author

Jenni Aldred is a Senior Project Manager/Writer for HighRoads, Inc. She joined HighRoads with 12 years of communication consulting experience with Buck Consultants and Watson Wyatt Worldwide. Using her extensive understanding of new Health Care Reform legislation, Jenni currently provides our clients with the information needed to navigate the changes occurring now and in upcoming years.