Communicating with Employees about Health Care Reform: 4 Talking Points
Posted on September 13, 2013
Update: The January 1, 2014 deadline for individuals to obtain health insurance or pay a penalty has been extended until March 31, 2014.
75% of workers think their employer will educate them about changes to health care as a result of the Affordable Care Act (ACA), according to a recent survey by Aflac. However, only 13% of employers say educating employees on health care reform is important to the organization. So, most employees are expecting their employers to educate them, while most employers are not making health care reform education a priority. What responsibilities do employers have to educate their employees?
The Department of Labor requires all employers to distribute health insurance marketplace notices to their employees by October 1, 2013. But HR experts suggest employers go a step further by proactively educating their employees about how the changes will affect them.
Here are four talking points organizations can use to teach their employees about the health care reform law:
1. The Affordable Care Act is law
While some provisions of the law have been delayed, such as the employer shared responsibility requirement, the ACA is still in effect. Explain to employees what this means for their health plans using the following points:
* Children under 26 can remain on their parents’ health insurance.
* Preventive services are now covered with no deductibles or co-pays.
* Starting in 2014, insurance companies can no longer deny health coverage based on pre-existing conditions.
* Also starting in 2014, waiting periods for health benefits cannot exceed 90 days.
* Everyone will be required to obtain health insurance by March 31, 2014, whether it’s through their employer or a plan they purchase themselves.
* Those who do not obtain coverage by that date will pay a penalty.
2. The individual mandate is in place
Explain to your employees that the “pay-or-play” requirement that has been delayed only applies to large employers: all individuals must obtain health insurance by March 31, 2014, or pay a penalty. If individuals cannot afford insurance and aren’t offered an affordable, minimum-value plan by their employer, they will be eligible for a tax credit to help them purchase coverage in a health insurance marketplace (also known as an exchange). Also be sure to explain what qualifies as affordable and minimum-value.
3. Health insurance marketplaces will be available
By October 1, 2013, all employers must distribute notices to their employees that explain the health insurance marketplaces. The Department of Labor provides a model notice template for employers to use. But employees are expecting more than the bare minimum—they are looking to employers for guidance. The notices and the government’s advertising efforts may lead some employees to believe they will be able to obtain less expensive coverage through the health insurance marketplace than through their employer. This may be true in some cases, but it could be that your plans are the better option for the majority of your employees.
Help your employees understand what they will pay for your plans versus what they will pay in the marketplace:
* Explain the costs of each of your plans and what is covered, and also
how much you contribute.
* Marketplace plan costs and information will be available on October 1, 2013, and employees can learn more about their options at healthcare.gov.
4. You must have coverage or pay a penalty
The penalty for not having coverage was mentioned in the first two talking points, but it bears repeating: individuals who do not obtain coverage by March 31, 2014, must pay a penalty. Explain to employees that they should consider the costs of this penalty as they are weighing their health coverage options. The penalty will be:
* The higher of $95 or 1% of taxable income in 2014
* The higher of $325 or 2% of taxable income in 2015
* The higher of $695 or 2.5% of taxable income in 2016
Show employees what the annual costs of each of your plans are, so they can decide if it’s better to purchase your coverage or pay the penalty.
The Affordable Care Act is a complex, constantly-changing law—but it is the law. Your employees are expecting you to educate them, and these four talking points will help you get started.
Learn more about Paycor’s health care reform management solutions for your organization.
Sources: Aflac Health Care Reform Survey, HRMorning