Are your employees asking questions about Obamacare?
by David Bottoms
January 13, 2014 12:00 AM | 803 views | 0 0 comments | 9 9 recommendations | email to a friend | print
Have you been receiving a barrage of questions from employees over the past few weeks about "Obamacare," HealthCare.gov and the practical impact of the Affordable Care Act on your employee's coverage options? If so, you are not alone and this column will arm you with some key items you need to know as you help your employees discern the differences between your group health plan offering and individual coverage in the three key areas: pricing, plan design, and network access.

Perhaps not surprisingly, the first thing people tend to look at when comparing health plans is the price. As a result of ACA, the ability to compare pricing is not as easy as you might think. For starters, the premium subsidies for those with incomes below 400 percent of the Federal Poverty Level are not available to individuals with access to "minimum essential" or "affordable" group coverage. Taking it one step further, immediate family members of those employees who also have access to an employer funded plan are also ineligible for government premium subsidies, regardless of whether the premium is "affordable" for the non-employed family members on the plan. So, in short, preparing your employees for the fact that they likely won't qualify for any subsidies is important, lest they claim a subsidy, enroll in coverage and then end up with a plan that is a lot more expensive than they expected once the subsidy is removed.

Also, I have found that many employees have a hard time understanding the significant value of their pre-tax payroll deductions for employer provided coverage. Educating your employees such that they understand that premium paid for an individual plan is a post-tax expense; whereas, coverage through your group plan is pre-tax is an important distinction that is often overlooked.

Assuming the hurdle of pricing is cleared, the next thing to help employees understand is the likely difference in plan design between your group health plan and the exchange plans. Most exchange plans have very high deductibles and out-of-pocket limits. Considering most of the employees considering the exchange will be those on the lower end of your company's income spectrum, you will want to make sure they understand the out-of-pocket cost that they would need to be prepared to incur should they, for instance, enroll in a "bronze" plan with a seemingly low premium, but with no coverage for claims until $6,300 of out-of-pocket costs have been incurred. Most employer plans have significantly lower out-of-pocket costs and thus, paying a little extra in premium may be a better idea than buying an insurance policy your employee can't afford to use.

Lastly, network access is an often overlooked issue that is sure result in some serious buyer's remorse in early 2014. Traditionally, the major players in the health insurance industry have had very similar networks that provided broad access to most major healthcare providers. While, for the most part, group health plan networks will remain extensive, individual health plan networks have been ravaged as a result of ACA and there are some who speculate that getting a doctor's appointment with an exchange-based individual health plan could result in "appointment-slot rationing" currently only quietly utilized for those with Medicare and Medicaid. The reasons for this speculation are complex and relate to reduced reimbursement rates and "grace period" provider exposure, but nonetheless, as things stand today, the concern is legitimate.

As such, no longer is it safe to assume that selecting a "brand name" health plan will enable you to continue seeing your doctor. As an example, ACA-compliant Blue Cross Blue Shield of Georgia individual plans beginning in 2014 will not allow access to the Wellstar, Piedmont or Emory health systems. Unless your employee is OK going to Grady, Atlanta Medical Center or Northside, they may want to dig a little deeper to find a plan with broader network access.

To be sure, health insurance isn't the most exciting thing to talk about; however, for most people, the decision regarding which health plan to elect represents one of the single largest financial decisions made in a given year and the costs (and hassles) associated with making an improper selection can be significant.

As an employer, your ability to provide clarity as your employees search for answers will help them avoid expensive mistakes and, in most cases, result in enhanced employee appreciation for the value inherent in the health plan you provide as part of your company's benefit package.

David Bottoms is senior vice president of The Bottoms Group and a principal of TBX Benefit Partners.

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