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Table of contents
1 Decide whether to pay or play 4
2 Manage required benefits reporting 5
3 Weigh the pros and cons of an HDHP 6
4 Switch to a health insurance exchange 7
5 Make voluntary benefits part of the benefits package 8
6 Offer tools to help employees make benefits decisions 9
7 Use high-tech gadgets and wellness incentives 10
8 Plan for spouse or partner coverage options 11
9 Start now to prepare for the Cadillac Tax 12
3. 3
9 benefits decisions facing employers in 2016
May your choices reflect your hopes, not your fears. – Nelson Mandela
When you come to a fork in the road, take it. – Yogi Berra
Making decisions about employee benefits is no small task. Health
care costs continue to increase, so the fine details of benefits plan
options, communication and delivery can have a very real effect on
employee satisfaction and retention. A company’s benefits package
can be the deciding factor when a prospective employee considers
a job offer, and improving benefits is one thing many employees say
their companies could do to keep them in their jobs.1
As your business
tackles tough questions about benefits, here are nine important deci-
sions to consider in the year ahead.
4. 4
Decide whether to pay or play
In 2016, employers with at least 50 full-time equivalent employees
(FTEs) must offer affordable, minimum-value health coverage to at
least 95 percent of their full-time employees and their dependents, or
face a penalty. Employers will need to be certain they are providing
coverage that meets the law’s requirements. Only small employers
(those with fewer than 50 FTEs) will remain unaffected by penalties
for not providing affordable, minimum-value coverage to their
workforces. For more information, see 5 things to know and do
to guard against health care reform penalties and calculate your
company’s FTEs with the FTE calculator.
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5. 5
Manage required benefits reporting
Starting in 2016, businesses will be required to report information
about their employee health coverage, including basic employee
data, dates and type of coverage, cost-sharing and any other infor-
mation required by the IRS. Since many employers struggle to make
heads or tails of health care reform requirements, they may choose
to have a consultant or provider help file the reports. To learn more
about exactly what’s required, take a look at these fact sheets:
»» Employer-Sponsored Coverage Reporting
»» Minimum Essential Coverage Reporting
»» W-2 Reporting
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6. 6
Weigh the pros and cons of an HDHP
Rising health care costs have led many employers to consider high-deduct-
ible health plans (HDHPs). A recent PricewaterhouseCoopers study found
that 83 percent of employers are now offering HDHPs, and 25 percent are
offering only HDHPs.2
It’s important to note that roughly half of workers (52
percent) who chose HDHPs last year at least somewhat agree they regret
their decisions. Still, many will select high-deductible plans again, some
because they’re the only employer-sponsored insurance options available,
others because cost is the driving factor for plan selection.3
To learn more
about how to implement an HDHP with out-of-pocket cost protection,
see: The perfect team: How voluntary insurance complements
high-deductible health plans.
3
83%of employers are now
offering HDHPs, and
25%are offering only
HDHPs.2
7. 7
Switch to a health insurance exchange
Exchanges are online benefits marketplaces where individuals and
businesses can buy insurance. Exchanges can do some of the
heavy lifting that usually accompanies workplace benefits, such
as paperwork or coordinating between multiple carriers. This can
help businesses to save on administrative costs. Additionally, some
exchanges offer a defined contribution option, so employers can
pay a fixed amount for benefits, allowing employees to buy up if they
want additional health care coverage and helping to make health care
costs predictable for employers. To learn more, see 6 key facts about
health care exchanges.
4
8. 8
Make voluntary benefits part of the benefits
package
Voluntary insurance has long served as a way to help protect
employees when they’re sick or injured – regardless of their ma-
jor medical insurance coverage. But now, more than ever, these
benefits help provide employees with a financial safety net for
unexpected medical expenses.
Voluntary policies can be offered at no direct cost to the policy-
holder’s employer and provide cash for costs not covered by major
medical insurance. To learn more, see What is voluntary insurance
and why do employees need it?
5
9. 9
Offer tools to help employees make benefits
decisions
With greater responsibility for their health care costs, employees are
eager to have the resources they need to make sound benefits deci-
sions. Many even anticipate them: 89 percent of employees at least
somewhat agree that they expect more decision-making tools and
support during their health insurance and benefits selection/enroll-
ment experiences, because they’re more responsible for their health
care costs than in years past.1
A few resources that employees say
are helpful include interactive online tools and summaries of past
medical claims and expenses.2
To learn more about open enrollment
best practices, see 2015 Open Enrollment Trends.
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10. 10
Use high-tech gadgets and wellness incentives
Health care reform rules encourage employers to use incentive pro-
grams, and allow employers to reward employees with up to 30 per-
cent lower rates for participation (and up to 50 percent for tobacco
use cessation). So do employees use these tools? Aflac’s 2015 Open
Enrollment Survey found that many employees use them when their
employers make them available. For instance, just 10 percent of em-
ployees say their employers offered wearable devices to track well-
ness or other health conditions, but over half (54 percent) of those
with the option used it.3
Learn more about the wellness programs
under the Affordable Care Act.
7
11. 11
Plan for spouse or partner coverage options
Health care reform doesn’t require companies to extend coverage
to spouses, which means businesses have flexibility when it
comes to offering spouse or partner coverage. With the legalization
of same-sex marriage, some employers are making benefits
requirements universal for all families applying for benefits. Still,
others are cutting back on spousal benefits entirely.
Before making drastic changes to spousal coverage, it’s important
to consider the ramifications for your business: Among employees
married or living with partners, 72 percent say they’d feel extremely
or very negatively if their company dropped spouse/partner coverage
from their employer-sponsored health insurance.1,5
Learn more about
the importance of benefits to employees.
8
12. 12
Start now to prepare for the Cadillac Tax
While it’s not going into effect this year, a 40 percent Cadillac Tax
(also called the health care law’s excise tax) is weighing heavy on
many employers’ minds. As it stands, the law is scheduled to take
effect for applicable coverage with plan years beginning on or after
Jan. 1, 2020. Although the tax is still several years away and regula-
tions may evolve before it is implemented, employers should begin
now to determine how their plans may be affected when the tax
becomes reality. For a more in-depth discussion about this tax, see
Cadillac Tax frequently asked questions and answers.
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13. 13
Sources
1
2015 Aflac WorkForces Report, conducted by Research Now Jan. 26 – Feb.
11, 2015, among 1,977 benefits decision-makers and 5,337 employees at U.S.
companies with at least three employees.
2
PricewaterhouseCoopers. “Health and Well-being Touchstone Survey results.”
Accessed Sept. 24, 2015.
3
2015 Aflac Open Enrollment Survey, conducted by Lightspeed GMI June 23 –
July 2, 2015, among 2,000 adults ages 18 and older who are employed full or
part time in the U.S. at a company with three or more employees.
4
The Henry J. Kaiser Family Foundation (2015). Health Insurance Deductibles
Outpacing Wage Increases, Study Finds. Accessed on Sept. 24, 2015.
5
Among those with employers that currently offer spouse/domestic partner
coverage.
S
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This article is for informational purposes only and is not intended to be a solicitation.
This material is intended to provide general information about an evolving topic and
does not constitute legal, tax or accounting advice regarding any specific situation.
Aflac cannot anticipate all the facts that a particular employer or individual will have to
consider in their benefits decision-making process. We strongly encourage readers
to discuss their HCR situations with their advisors to determine the actions they need
to take or to visit healthcare.gov (which may also be contacted at 1-800-318-2596)
for additional information.
Keep up to date
and follow Aflac at:
@Aflac us.linkedin.com/company/Aflac
YouTube.com/Aflac
HCR15033R 1/14/16
