By Nick Otto
November 3, 2015
As employers face growing challenges
trying to balance employees’ well-being with containing benefits-related
company costs, many are seeking guidance on how to manage the administrative
and compliance requirements of the Affordable Care Act.
And as the health care law continues
to evolve, be it through Congressional bills or Supreme Court rulings,
employers are battling a number of reforms and regulations, and 60% of
employers say they need help managing the ACA landscape, according to the
Guardian Workplace Benefits Study.
“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,” says Ray Marra, Guardian’s senior vice president, group products.
As companies reassess their approach
to benefits, the report notes, three trends are gaining momentum: increased
outsourcing, interest in private exchanges, and consideration of
self-insurance.
“The ACA has intensified challenges
for a majority of employers,” Marra says. “They must deal with administrative
and compliance requirements, trying to offer employees wider benefits choices
and an effective enrollment experience and controlling costs.”
The study notes 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 because of the law.
And the market for benefits
outsourcing appears to have considerable room for expansion, according to the
report. Only 16% of all employers are engaged in a “high level” of outsourcing
(where all administration tasks are outsourced to a vendor), while at the other
end of the spectrum, just 15% report doing no outsourcing.
Companies with fewer than 1,000
employees are more likely than larger companies to outsource their benefits
administration to a single third-party administrator (36% versus 22%),
according to the report. Nearly half (47%) of employers that outsource all of
their administration and enrollment tend to use a single vendor compared to 25%
of those doing just a little to no outsourcing.
“It’s important for brokers to
provide guidance on emerging options for funding and delivering employee
benefits which can help employers respond,” says Marra.
In addition, some other key findings
from the report include:
- About 20% of employers expect to offer benefits on a
private exchange in the next year. Top reasons are to increase employee
choice and to improve the employee experience. Seven in ten 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 impetus and half of those planning to self-insure expect to carry
stop-loss insurance. Self-insuring medical plans is a less common funding
option for smaller firms but is receiving increased attention due to the
ACA. Seventy-eight percent of employers expect benefit cost increases due
to the ACA, impacting an employer’s health benefits offering.
- A tailored benefits and communication approach is
becoming increasingly critical to address employees’ financial needs at
different points in their work stages.
