August 8, 2014
Open enrollment rates for employer-sponsored health plans in 2014 remained flat, but advisers and their employer clients are already putting strategies in place to prepare for expected growth in 2015 enrollments.
Despite the Affordable Care Act’s requirement that individuals seek health insurance coverage in 2014 and the fact that employers are already preparing for the health reform law’s employer shared responsibility provision, open enrollment levels for employer-sponsored health plans remained mostly unchanged from 2013, new research from Mercer shows. On average, 69.3% of employees enrolled in employer-sponsored health plans in 2014, up only slightly from 69.1% in 2013.
In 2015, researchers expect there will be at least some growth; especially since the individual mandate penalty for obtaining coverage will be higher and more employers will open their plans to newly eligible employees under the ACA shared responsibility rules.
Benefit advisers have already begun to work with employers to put strategies in place to diminish the burden of increased health care costs an enrollment surge could bring.
Managing growth in eligibility
To manage a potential uptick in employees eligible for health coverage in 2015, 10% of employers will decrease the number of employees working 30+ hours per week by next year, the Mercer survey found. Another 14% are making additional adjustments to their workforce strategies.
The survey found retail and hospitality industries, which have a higher proportion of low-wage, part-time workers, are most concerned about higher enrollment in plans. These groups are followed by the higher education sector, in which adjunct professors make up a significant portion of the faculty, yet typically are not eligible for health benefits.
What’s more, employers are concerned about becoming “dependent magnets” and attracting additional dependents and spouses, as more employees become eligible for coverage and the individual mandate penalty stiffens. About 20% of employers said they would raise the employee contribution for dependent coverage in 2014.
To further curb the number of dependents on their plans in 2015, employers are considering special provisions for employees’ spouses who have other coverage available. Currently only one-fifth of employers have such a provision in place —12% require a surcharge and 8% exclude spouses with other coverage entirely. However, this practice may gain in popularity as many employers are considering it —16% considering a surcharge and 12% considering a spousal exclusion, the survey found.
In 2015, researchers expect there will be at least some growth; especially since the individual mandate penalty for obtaining coverage will be higher and more employers will open their plans to newly eligible employees under the ACA shared responsibility rules.
Benefit advisers have already begun to work with employers to put strategies in place to diminish the burden of increased health care costs an enrollment surge could bring.
Managing growth in eligibility
To manage a potential uptick in employees eligible for health coverage in 2015, 10% of employers will decrease the number of employees working 30+ hours per week by next year, the Mercer survey found. Another 14% are making additional adjustments to their workforce strategies.
The survey found retail and hospitality industries, which have a higher proportion of low-wage, part-time workers, are most concerned about higher enrollment in plans. These groups are followed by the higher education sector, in which adjunct professors make up a significant portion of the faculty, yet typically are not eligible for health benefits.
What’s more, employers are concerned about becoming “dependent magnets” and attracting additional dependents and spouses, as more employees become eligible for coverage and the individual mandate penalty stiffens. About 20% of employers said they would raise the employee contribution for dependent coverage in 2014.
To further curb the number of dependents on their plans in 2015, employers are considering special provisions for employees’ spouses who have other coverage available. Currently only one-fifth of employers have such a provision in place —12% require a surcharge and 8% exclude spouses with other coverage entirely. However, this practice may gain in popularity as many employers are considering it —16% considering a surcharge and 12% considering a spousal exclusion, the survey found.
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