By Mike Wojcik, MBA, CLU, CFP®, Senior Vice President of Horton Benefit Solutions
The Affordable Care Act (ACA) continues to dominate the news concerning the future of Healthcare and Health Insurance. Under its current course, one of the largest employee benefits and related expenses facing employers might no longer be sustainable!
The new Administration calls for repeal and replacement of the ACA to offer a better option. To date, Congress passed a bill in the House on May 4, 2017. From our view that bill, the American Healthcare Act, would still favor employer sponsored benefits for the majority of Americans, especially due to the related tax efficiencies. The Senate Bill is yet to be determined. As with most things, the devil is in the details! Employers will need to have them soon to implement a very important strategy for their 2018 - 2020 plan years.
What are the big questions remaining for employer plans?
Will ACA health plan taxes, including the Cadillac Tax, remain?
Will employers and employees be capped on the tax exclusion?
Will employer reporting remain?
The IRS still plans to adhere to all compliance penalties for 2017!
The new legislation is calling for insurers to offer more choice and lower cost options to meet personal needs. We expect to see greater incentives to consider High Deductible Health Plans with Health Savings Accounts (HSAs). The discussion centers around the individual market however, they will ultimately impact employers and their strategies to attract and retain key talent in our multi-generational, multi-cultural workforce.
No matter what develops, communications to help health plan literacy will play a very important role. Employers will need to invest in additional staff and resources to help in this area with a three-tiered approach: on-site meetings, benefit guides and online benefit enrollment and administration systems. New innovations to help control costs and fill gaps in care will also need to be communicated, such as telemedicine to support greater primary care and ongoing maintenance needs. Transparency tools have also improved to help the patient determine procedure costs.
Pharmacy remains untouched in the process, doing nothing to curb the cost of rapidly growing high- cost biogenetic (specialty) drugs. Plan design alone will not solve this challenge however, for now, higher generic utilization, narrow networks and closed formularies will be the answer.
Eligibility Management will play a significant role preserving benefit and compensation dollars for those it is meant for. We see higher cost sharing developing in the dependent categories and post 65 retiree carve-out programs being implemented to shift risk from the active-member group plan.
It is possible we will see a new healthcare law to understand and engage by year end. Optimization of plan value while controlling cost will be more critical this time around as our economy reaches a full employment environment and competition for talent will become greater.
About the Author
Mike Wojcik serves as a Senior Vice President of Horton Benefit Solutions, Chairman of the National Healthcare Task Force of the Independent Insurance Agents and Brokers of America in Washington D.C. and has testified several times to Legislative Committees; written and co-authored several white papers on healthcare reform and works extensively with the Department of Insurance and the Director of Outreach for The Health Insurance Marketplace regarding the impact of the Affordable Care Act.
