With 2016 just a few months away, employers are gearing up for another open enrollment period and honing their employee benefits strategies. So what can employers expect for 2016?
Unfortunately, rising medical costs are one thing you can count on. According to the June 2015 report, Medical Cost Trend: Behind the Numbers 2016 by Pricewaterhouse Coopers’ Health Research Institute (HRI), employers can expect to see a 6.5 percent increase in their health care costs next year. However, it’s not all bad news. The HRI report also points out three factors that should slow down the rate of growth in health care costs in 2016:
- More cost-shifting due to upcoming “Cadillac tax.” The Affordable Care Act’s (ACA) tax on high-value “Cadillac” plans goes into effect in 2018, with a 40 percent tax on plan premiums over $10,200 for individual coverage and $27,500 for self and spouse or family coverage. To avoid the tax, employers are already making changes to their plan designs and increasing employee contributions.
- Virtual health care. Hospitals have used remote monitoring to improve outcomes and lower treatment costs for years. With advances in technology, large companies are now seeing telehealth as a more efficient and convenient option than traditional medical care.
- Employee education. To achieve true health care savings, employees must learn to make smart choices about health care consumption. To assist with that goal, advisory services and educational resources are increasingly available for employers.
These are just a few of the options employers are using to help lower their health care costs. And according to the HRI report, employers can actually reduce their health care cost increase from the projected 6.5 percent to 4.5 percent next year by making strategic plan design changes.
Don’t forget about benefits compliance issues you’ll face in 2016, including:
- Employer shared-responsibility assessments. Your data sources, systems, and administrative processes need to be firing on all cylinders to collect the necessary information about enrollees with minimum essential coverage (MEC), full-time employees, and coverage offers required for reporting in 2016 coverage.
- Summaries of benefits and coverage (SBCs). Review your delivery operations, watch for revised SBC templates, and be ready for the second round of online submission and payment of ACA’s reinsurance fee.
- ACA’s out-of-pocket maximum. Ensure that self-only and family coverage tiers in non-grandfathered plans meet the ACA’s 2016 out-of-pocket (OOP) limits for in-network care, and confirm that family coverage meets ACA’s self-only OOP limit for each enrollee.
- Fixed-indemnity and supplemental health insurance. Review your fixed-indemnity and supplemental health insurance policies to ensure they qualify as excepted benefits under the ACA and Health Insurance Portability and Accountability Act (HIPAA).
- Wellness. Review your wellness programs for compliance with the proposed Equal Employment Opportunity Commission (EEOC) rules requiring voluntary participation and limiting incentives for completing health risk assessments and/or biomedical screenings.
Want more information on making cost effective benefit plan choices for 2016? Talk to the group benefits experts at Higginbotham Insurance.
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