Issue link: https://www.e-digitaleditions.com/i/131821
The Benefits Package New Challenge, New Solutions Responding to healthcare reform requires clear eyes and sharper tools. By Dave Tolve The dawning era of healthcare reform in the United States is driving new employer perspectives on how to deliver health insurance to employees, especially now that full implementation of the Patient Protection and Affordable Care Act (ACA) is less than a year away. And the implications for benefits outsourcing providers are no less profound. The reality of the ACA is generating a completely different set of questions from employers and employees, clearly pushing the outsourcing industry toward the next generation of delivery. This will bring the challenge to provide seamless, innovative health and benefits administration, along with an expanded ability to answer employers' need for solid expertise and execution in a new environment. This type of innovation has already emerged and is shaping the outsourcing landscape—private exchanges, the rise of a defined contribution (DC) model for health insurance, and other new tools. In addition to tactical execution, employers also need to educate employees on the coming changes in order to maximize their productivity and engagement during the interim. We've seen evidence of real employee concern in our annual Mercer Workplace Survey, which samples a cross-section of more than 1,600 active benefits participants in U.S. companies of all sizes. In the 2011 survey, workers were mixed to moderately negative on most aspects of healthcare reform: 28 percent felt that they would be better off overall, while 33 percent worried they would be worse off; in 2012, 43 percent had fallen into the worse-off camp, with only 23 percent feeling they'd be better off. Employees in the 18-to-34 age group are generally more positive about reform, while workers 35 and older are generally more negative. This is probably less significant than the fact that the number of employees who reported receiving helpful and steady communication about coming changes in their health benefits—especially at smaller companies—fell in 2012. This suggests that many employers felt unsure about the still unfolding complexities of ACA regulations and were uncertain about how they would comply. While evidence from our most recent Mercer Survey of EmployerSponsored Health Plans shows that more than 90 percent of companies intend to continue to provide health insurance to their workers once the ACA is fully implemented, how they will do so remains an open question. Implications for Employers For outsourcing providers, the opportunity and imperative to help clients navigate this sea of uncertainty are stronger than ever. On the most fundamental level, companies that rely on third-party benefits administrators should continue to expect first-rate call center and employee communications options and best-in-class technology platforms for enrollment and claims service. But the implementation of ACA also brings with it the need for expert advice on plan design, expanded offerings, and deeper expertise in answering employees' questions regarding both employer and public options. [58] HRO TODAY MAGAZINE | APRIL 2013 A key tenet of the ACA is the establishment of new public exchanges through which Americans can directly purchase health insurance. But an emerging option from the outsourcing world is to offer health insurance through private exchanges that provide access to a range of health plans along with a full suite of employer-sponsored and voluntary benefits. The private exchange landscape is growing quickly, as a number of players, including Mercer, have introduced private marketplaces for both large and small firms. One major advantage to a private exchange is the direct contribution (DC) approach to providing benefits coverage, mirroring the defined benefitto-defined contribution revolution in retirement plans. A DC approach to benefits funding limits the open-ended costs of traditional arrangements and gives employers more control over future cost increases. Inherently, an exchange model requires a shift in the employer-employee relationship, since it allows employees to exert greater control as consumers in the benefits marketplace. As a result, the role of the benefits provider must also evolve. With private exchanges operating much like markets in any economic sector, health plans and other benefit providers will be competing for the consumer's business, so the market forces of innovation and price competition will apply. Those of us offering private exchange solutions must provide compelling support and access to other benefit products, enabling employees to manage their risks better, and drive adoption of medical plans that will be less expensive, with a slower rate of cost increase. Employers will rely on exchange sponsors to excel at benefits management functions, including handling the compliance complexities of the ACA. A seamless consumer experience—from employee education to decisionsupport tools, shopping, and customer-service enhancements—is crucial. It is vital that the employee experience be a good one; simply shifting costs to employees will be an unacceptable outcome for many stakeholders. More than ever, employees need help in decoding unfamiliar terms and abbreviations, and they should be able to do so with a mouse click or a tablet touch. A decoder tool can also improve health with tips, videos, and calculators to help employees lower health risks, boost fitness levels, and eat healthier. Clearly, the next generation of benefits outsourcing is a fertile field not only for the outsourcing community but for employers and employees who stand to benefit from a truly active embrace of the challenges and opportunities of healthcare reform. Employers might feel themselves, somewhat uncomfortably, on the frontlines of a new era, but with our best and most innovative efforts as benefits administrators, we can ensure that elusive win-win in the ACA era. Dave Tolve is partner and U.S. product leader for Mercer's outsourcing business, based in Norwood, Mass.