TCIG discusses employer benefit plans and how to best handle the new changes in the group insurance marketplace.

The media is full of reports about the insurance exchanges and various deadlines for obtaining coverage.  These stories all relate to individual medical insurance, not employer benefit plans. However, buried in the 2,000 pages of the Patient Protection and Affordable Care Act (ACA) are countless mandates for the design and pricing of group medical plans that directly affect employers.  These rulings require insurance companies to abandon their existing plans and restructure their offerings to meet ACA directives.  In addition, carriers must now comply with complex formulas for determining monthly premiums for each plan.

This new pricing includes:

• Ending discounts for healthy employer groups;
• Younger employees subsidizing the cost of older workers;
• Elimination of popular low-cost plans that do not meet ACA guidelines.

Late last year, carriers introduced their 2014 plan portfolios.  Each insurer adopted a different strategy for their programs.  As a result, the marketplace is now a hodgepodge of plans and pricing that has little semblance to the old plans  with which employers and employees were familiar.

HOW TO COPE:

2014 will be a year of disruption and confusion in the group insurance marketplace.  The new plans and premiums will require ongoing education to understand how the plans work and how the new premiums affect employer and employee contributions.  Here’s how to cope:

• Even if your plan doesn’t renew until later in the year, start reviewing your
  options now.
• Work with an experienced broker who can guide you through the disruption.
• Once a new benefits program is selected schedule at least two open-enrollment meetings to allow employees to absorb the changes, understand the new plans, and adjust to the new pricing.

In our next post, we’ll talk about specific issues to address in redesigning your benefits plan.