While highly prepared employers and HR professionals are operating "business as usual" after the Supreme Court ruled to uphold health care reform's individual mandate, others who took the wait-and-see approach are scrambling to implement the 2013 provisions that impact employer-sponsored benefits — such as reporting health care on Form W-2, providing a standard Summary of Benefits and Coverage (SBC) and limiting Flexible Spending Account (FSA) contributions — before open enrollment. 

Preparing for 2013 benefits open enrollment in light of the health care reform decision

While highly prepared employers and HR professionals are operating "business as usual" after the Supreme Court ruled to uphold health care reform's individual mandate, others who took the wait-and-see approach are scrambling to implement the 2013 provisions that impact employer-sponsored benefits — such as reporting health care on Form W-2, providing a standard Summary of Benefits and Coverage (SBC) and limiting Flexible Spending Account (FSA) contributions — before open enrollment.

No matter how prepared your organization is, there are key action steps all companies should take now that the Supreme Court has spoken to ensure a smooth, cost-effective benefits open enrollment in 2013 and beyond.

"When it comes to your employee benefits program, it's crucial to form an action plan for tracking evolving health care reform regulations, implementing changing eligibility requirements, communicating changes to employees and containing costs in the long term," said Lydia Ophaug, senior product manager for Ceridian's Health & Welfare benefits eligibility and enrollment solution.

Managing these flow-through effects of health care reform takes a strategic combination of innovative technologies, efficient processes and employee engagement.


5 tips for your post-reform benefits program

  1. Contain health care costs: Does your benefits program promote long-term, sustainable cost containment? Implementing provisions will be expensive, and health care costs are continuing to rise. Limit operational costs through automated enrollment and premium billing, and form a multiyear strategy for creating a culture of health.
  2. Track compliance requirements: Can you stay on top of frequent federal guidance and regulation releases? Form a partnership that offers legislative updates to help you help you ensure timely awareness and compliance.
  3. Form a provision implementation strategy: How fast can you respond to changing benefits requirements? An online, highly configurable enrollment system will allow for quick response to eligibility and reporting changes.
  4. Communicate with employees: Do you have a low-cost, effective strategy for providing information to employees? Paper is expensive, but emails get lost in the mix. Provide interactive decision-support tools and an online knowledgebase for increased engagement.
  5. Make educated strategy changes:Do you have the data to make sound decisions? Leverage robust benefits reporting tools as your adjust your strategy to accommodate major provisions like automatic enrollment of new hires in 2014.
Cost containment

No matter where health care reform is headed, its primary goal should remain a core focus for employers: control spiraling health care costs. According to PwC, 2013 will bring a 7.5 percent increase in the cost of U.S. health care, however, the expansion of wellness and cost-sharing efforts could result in a smaller but still significant 5.5 percent growth in premiums for large employer-sponsored health plans.

Containing costs at their source has been Zions Bancorporation's benefits strategy since the turn of the century, according to Diana Andersen, senior vice president and director of corporate benefits. "We've had paperless benefits enrollment since 2001 and full-replacement consumer-directed health care (CDHC) with wellness incentives since 2008," Andersen said. "Our employees have only seen single-digit increases in their health care costs for several years now."

Through decreased administrative costs, time and inaccuracies, Zions' online benefits enrollment system saved it approximately $40,000 in the first year, according to Andersen. Integrated premium billing has furthered savings by automating what used to be tedious manual reconciliation between insurance carrier bills and Zions' benefits enrollment data.

"We used to have so much money budgeted just for paper during open enrollment," Andersen said, "Our online enrollment platform, decision-support tools and benefits knowledgebase have not only eliminated those paper costs, but also streamlined our open enrollment process by making employees directly accountable for their benefits elections."

Zions' plan design changes and wellness efforts have helped to contain costs using a similar consumer-driven strategy. "We've fully replaced our traditional health care plans with CDHC strategies, such as Health Savings Accounts paired with high-deductible insurance plans," Andersen said. "When pairing those plan designs with health risk assessments, coaching and a walking campaign, we've optimized our costs to the point where health care reform is much less of a shock for us than for many companies."

Compliance

"For employers, of course, last week's Supreme Court decision boils down to one word: compliance," said Ceridian's consultant on legislative affairs in Washington, D.C., Jim O'Connell. Now that health care reform has the green light, O'Connell believes that federal agencies will move quickly to issue regulations and begin enforcing effective provisions.

"Up to now the PPACA mandates were fairly straightforward," O'Connell said. "Starting in 2013, however, with W-2 reporting and the FSA cap, employer compliance will become more challenging, and the 2014 'Play or Pay' mandate could be the most difficult of all."

Amid continuing economic challenges, staying on top of the many increasingly complex health care reform regulations with fewer resources requires more than just diligence; it requires teamwork.

"Companies can no longer afford to go it alone," Ophaug said. "Strategic technology and service partnerships will help them mitigate these risks in a cost-effective way and keep their internal operations running smoothly." For example, according to Ophaug, a benefits partner can help by sending customer notices when new compliance requirements come out; providing relevant standard reports such as "participants nearing age 26"; and quickly changing configurations across the board when a new compliance requirement arises. Benefits partners can also relieve already overburdened HR staff by fielding employee questions, which are sure to increase as complex legislation takes effect.

Over at Zions, Andersen adds that employers should get involved in the legislation rather than just comply with it. "Only we know how to run our own businesses," Andersen said. "If you have compliance concerns, let your voice be heard."

Communication

Not only are employers required to communicate certain aspects of health care reform to employees, but the legislation's many changes also offer an invaluable opportunity for employers to actively engage employees in their health care decisions.

Many of the provisions taking effect in 2013 are geared toward improving communications with employees to enable better benefits decisions. "The Form W-2, SBC and exchange notification provisions together basically demand that employers educate employees about their health care options and costs," Ophaug said.

Employers should expand upon these communication initiatives to further empower employees to get involved in their health care decisions, Ophaug said. "Your employees are used to receiving concise, readily available, frequently updated information online, and with subscriber feeds like those on social media, they no longer have to seek it out," Ophaug said. "Innovative resources such as interactive decision-support tools and online benefits libraries provide the important information they rely on you to communicate, in the engaging formats they expect."

What are your concerns for 2013 open enrollment in light of the Supreme Court decision on health care reform?

For more information:

  • Listen to on demand webinar about Supreme Court decision
  • Follow our health care reform next steps checklist
  • Learn more about Ceridian's benefits administration solutions