The Affordable Care Act (ACA) is sparking employers to consider new approaches to benefits funding and delivery, according to the Guardian Life Insurance Company of America. Among compliance and benefit design challenges, plan sponsors are rolling up their sleeves to meet ACA challenges that range from offering more choices to enhancing the enrollment experience, all the while finding ways to control costs and funding.
“Preparing for a post-health care reform era” is a vital benefits objective, say 61% of plan sponsors surveyed in the Guardian Workplace Benefits Study, but just four in 10 feel prepared to meet it. As employers face this myriad of reforms and regulations, 60% admit they need help managing the ACA terrain, with three trends—increased outsourcing, reliance on private exchanges, and consideration of self-insurance—gaining momentum.
One in three employers expects to outsource more aspects of their benefits program as a direct result of the ACA. Nearly 70% of employers expect greater compliance and administrative burdens.
About 20% of employers expect to offer benefits on a private exchange in the next year. The top reasons: to increase employee choice and to improve the employee experience. Seven in 10 employers say it is highly important to offer benefits that meet their employees’ personal needs and help them make better benefits choices.
Of those thinking of self-insuring, 58% say the ACA is the main reason. Half of those planning to self-insure expect to carry stop-loss insurance, which pays employees’ medical bills after the plan sponsor has paid a predetermined amount. Some policies are designed to protect against high claims by any one employee or family member. Self-insuring medical plans is a less-common funding option for smaller firms but on the heels of ACA is receiving more attention. Seventy-eight percent of employers expect benefit cost increases because of the ACA, which would have an impact on the health benefit offering.
Employers need brokers and carriers to help them navigate the ACA and identify the best options for moving forward in a changed benefits landscape, according to Ray Marra, senior vice president of group products at Guardian. “As employers adapt to the ACA, we’re seeing greater adoption of private exchanges and self-funded medical plans paired with stop-loss insurance, so employers can deliver the workplace benefits their employees rely on while addressing the challenges they are facing.”
The Guardian Workplace Benefits Study aims to illustrate how the workplace can be a source of financial security for many American households, and how employees rely on benefits for overall feelings of financial preparedness.