Many insurance carriers estimate that the direct cost of this initial compliance with PPACA with be around 3 to 4 percent increase in premiums - that's aside from any natural increase that will occur from medical claims throughout the year. After many discussions with average business owners about what there level of knowledge is regarding this huge legislation, the response is surprisingly very little. Employers don't have the luxury of just waiting until 2014 to see how this will impact them. They need to act now in light of all the penalties and new taxes that will result for non-compliance. My strong recommendation is to make sure that you're with a health broker that you're confident in there ability to help you wade through the maze of complexity. The role of a trusted health insurance advisor will be more important than ever. Here are some practical tips to help you better prepare for your health insurance renewal:
- Give yourself plenty of time before your actual effective date. Don't let your broker dictate that pace. Your insurance carrier may take a little longer this year to get out renewal rates because they've been busy complying with PPACA but it's still wise to start discussion about potential tweaks to your plan or identifying other carriers that might suite your needs better.
- Your plans deductible is the only real way to make significant impact on your monthly premiums so start discussions about what would be palatable for your employees.
- With the prospect of raising deductibles, discuss with your broker what suite of supplemental/voluntary benefits would best fill the gaps left by larger deductibles.
- Start looking for a broker and an insurance carrier that has a robust health and wellness component to their plans. The unhealthy lifestyles of your employees will continue to be the largest contributing factor to escalating health premiums so you need to take a proactive approach to stem that tide.
- Discuss implementing a defined contribution plan versus a defined benefit plan. So, for example, the single rate on your plan is $250 per month. If you establish a policy going forward that you will hold that contribution steady at $250, your cost becomes a fixed instead of a variable. Now, having said that, you do have to be careful of one possible pitfall. Most group health plans require the employer to pay a minimum of 60% and up towards the single rate. So, you have to monitor going forward that you don't violate that provision.
- Depending on the size of your group, consider researching self-insured plans for both medical and dental. Many of the new health reform compliance provisions don't apply to self-insured plans.
