How Employers Can Save While Providing Coverage that Meets the Affordable Care Act Mandates - Capstone Brokerage

By: Stephanie Edwards, Capstone Benefits Account Manager, July 21, 2016

Advisers are finding more and more employers interested in cost saving options for medical plan offerings with the new ACA mandates. Many brokers are advising high deductible health plans because of the lower monthly cost. Is there a gap in coverage from offering these seemingly inexpensive options? Many employees are satisfied with the monthly savings at first until they have a trip to the emergency room or find out they need surgery. With such high deductibles, many employees find themselves in a financial crisis, scrambling to come up with the thousands of dollars they need to pay out. What can an employer do to bridge this gap?

Voluntary benefits may be the answer. According to a survey by Benefitfocus, voluntary benefits are not steadily being offered with these high deductible plans. These voluntary benefits include critical illness, hospital indemnity, accident insurance, etc. These voluntary plans are fairly inexpensive and pay out in cash for certain covered incidents. While they won’t cover the financial gap completely, they do assist the employee in getting together the amount needed for medical expenses.

According to Bswift Benefits Study, 58% of employers with 500+ employees are now offering these high deductible plans for their employees, which is an increase from the 51% in 2014. Only 36% of employers offer at least one of the previously mentioned gap products and a mere 10% offering all three. A broker should be doing more active job of advocating for these products and explaining the value of the voluntary benefits to employees. This would help increase employee enrollment in these products which is only at 14% currently. It’s not just communicating the value of these products that’s important but WHEN to communicate this information. Shan Fowler, Senior Director of Product Strategy with Benefitfocus, states that most brokers who do recommend these voluntary products make the mistake of offering them to employees outside of their normal open enrollment. This off cycle timing only hurts the number of participants.

Once employees begin to understand how the voluntary products complement their medical coverage, it just begins to make sense. Technology can also be a key component to increasing enrollments and helping employees become aware of how to make both medical and voluntary benefits work in their favor. Using a system like a benefits admin system that can visually show an employee the gaps in their medical coverage and the coverage provided by adding a voluntary benefit will help amplify their understanding and increase enrollments. It’s important to show and educate employees on the value of these programs.

An educated insurance broker that is certified in Affordable Care Act requirements can further assist businesses to provide coverage to their employees. It is also beneficial to put together a voluntary benefits package to help further the employees options for coverage. If you have more questions about anything regarding the Affordable Care Act or voluntary benefits reach out to your insurance advisor.