How 2012 ACA Compliance Can Support Employers’ Benefit Goals

The following is an article published by Shargel & Co, Insurance Services.

While the political battles over health reform continue, the US Supreme Court’s decision to uphold the Affordable Care Act requires insurers and employers to proceed with implementation of the law. Fortunately, the requirements for employers for 2012 are quite simple and straightforward. Thoughtful planning can turn compliance into an opportunity to support employers’ critical benefits goals: controlling costs and promoting a healthy work force. 

Insurance Rebates

The first significant ACA date in 2012 was August 1st, the deadline for insurers to rebate premiums for 2011. The ACA requires insurers to spend 80% of premiums collected for small business and individual plans and 85% of premiums for larger plans on health care and health quality improvements. 
Kaiser Family Foundation estimated that $1.3 billion dollars was returned to businesses and consumers. Although our clients were disappointed to receive little or no premium rebate, the ACA provision is now focusing our attention on the actual issue: the cost of health care. 

Summary of Benefits and Coverage (SBC)

ACA is bringing the cost of care to employees’ attention through new Summary of Benefits and Coverage (SBC) documents. These SBC documents, prepared by insurers, must be distributed by employers to their employees prior to plan renewals after September 23rd, 2012. These summaries may be posted on your intranet website, or distributed in soft or hard copy. 

Your employees are most likely accustomed to looking at only their copayment amounts for medical services. When I have asked my daughter or her friends whether they know the cost of their maternity care, they have told me the amount their insurance required them to pay. They are not aware of the full cost of having their beautiful babies. 
For the first time, employees will see the actual cost of medical procedures. The required ACA summary shows the average national cost of two common medical services: pregnancy, $7540 and management of type 2 diabetes, $4100. The summary also shows your employees their cost under their insurance plan if their services were billed at the national average. 
We recommend that you direct your employees to this useful and important cost information. 
Many insurers are taking a giant step ahead of the ACA requirements. They are placing cost estimators on their websites that show the cost of services for many common medical procedures charged by preferred providers in your area. 

W-2 Insurance Cost Reporting

The new ACA regulations require that the cost of insurance benefits be placed in the very location employees are most likely to look – on their W-2’s. The ACA requires employers who issue 250 or more W-2’s in 2012 to meet this requirement. We strongly recommend that all employers report the cost of health benefits to their employees. Smaller employers may prefer to use their own total compensation reports rather than the W-2 form. 
We believe the more information your employees have about the cost of insurance and the cost of medical care, the more likely they are to consider cost as a factor in their selection of providers and their decisions about treatment options. 

Expansion of Women’s Health Coverage

The ACA eliminates employee cost in one crucial area--preventive care. 
Health reform supports your healthy workforce initiatives by removing all financial barriers to accessing preventive health services. The ACA required many preventive care services to be covered at no cost in 2011. This fall (plan years starting on or after August 1st) the expansion women’s preventive health coverages began. Newly covered services include well woman exams, FDA approved contraceptive methods, and breast feeding support and supplies. Your renewal packets contain these benefits updates. 

We encourage employers to promote these new benefits during open enrollment meetings. Urge employees to “Take Control of Your Health” and set up medical appointments for these free and necessary preventive medical services. Direct your employees to your insurer’s website for complete information. 

We also invite you to keep up with the changing benefits world by visiting the Health Reform section of our new www.shargel.com