Benefit providers are having a tough year in 2015. Potential obstacles loom for providers if they're not ready to face them. If you want to be successful, you must provide benefit plans that are effective enough to help your clients recruit and retain top talent.
Here are the top five challenges affecting benefits providers:
1. The employer mandate
Perhaps the issue that needs benefit providers' attention the most is the employer mandate provision of the Patient Protections and Affordable Care Act. This mandate requires businesses with 50 or more full-time equivalent employees to provide health insurance to at least 95 percent of these individuals. Companies that fail to comply with this requirement will be subject to a penalty fee. Originally planned to go into effect in 2014, Congress delayed implementation until 2015 for businesses with 100 or more workers and until 2016 for companies with 50 to 99 employees. As the mandate goes into effect for a good number of companies this year, many businesses will need help navigating the regulations to ensure they provide adequate employee benefits to avoid any potential fees.
According to JD Surpra Business Advisor, the Supreme Court recently rejected the latest challenge to the employer mandate, which means it is the official law of the land now. For those benefits providers who might have been hedging their bets against the court upholding this mandate, employers should now do everything can to comply with the law. Failure to adhere to the mandate can cost employers and benefits providers up to $2,000 per year.
2. High-deductible health plans
Leah Binder, president and CEO of The Leapfrog Group, said workers with HDHPs increased 20 percent between 2006 and 2013, according to the Harvard Business Review.
"HDHPs are rapidly becoming the plans of choice - for employers, for other purchasers of health benefits, and for public sector plans offered through state exchanges under the Affordable Care Act," wrote Binder. "In short, HDHPs have unleashed forces that will compel stakeholders to adjust to new realities."
For clients looking to provide these options for customers, adding in voluntary benefit plans can ease the risk equation for HDHP enrollees. These plans can supplement HDHP benefits with first-dollar coverage as well.
3. Rise of chronic conditions
Conditions like obesity and diabetes are on the rise. According to the Centers for Disease Control and Prevention, 34.9 percent of U.S. adults are obese and end up paying $1,429 more in medical costs than non-obese individuals. This condition leads to heart disease, strokes, type 2 diabetes and cancer. These conditions represent some of the leading causes of preventable death in the country. To combat these conditions, many employers are implementing wellness and productivity programs and incorporating these into the benefits plan. By introducing wellness programs, such as fitness trackers, health-oriented smartphone applications and wearables like activity or diet trackers, providers can give customers incentives to stay healthy and potentially lower the overall cost of an individual's health insurance.
4. Increasing health care costs
Health care costs continue to rise year after year. Many clients have reduced their policies while others have dropped coverage altogether because they could not afford it. In many cases, providers need to diversify their products to solve this challenge. One way clients can offer coverage for the most people without breaking the bank, involves offering defined contribution. This means employers reimburse employees for individual health insurance, thereby controlling costs.
5. Telecommuting employees surge
More employees are now working from home than ever before. Despite forecasts of worker productivity declining because of this trend, the exact opposite has happened and now many employees find themselves working around the clock. Constant contact via smartphones and home computers leaves the door open for potential discrepancies with overtime pay as well as the fine line between part-time and full-time employees. Providers need to work with customers and employees to ensure insurance options and overtime pay wages remain accurate and benefit everyone involved.
If you'd like to read more on benefit administration, see One way to simplify voluntary benefits administration.
At Genius Avenue, we assist benefit providers, carriers and MGA/MGUs on how to overcome challenges related to benefit product communication and promotion. Learn more on our website.