Over the past two years, employers and their advisors have been working to digest, decipher, strategize and adjust to the impact the Affordable Care Act (ACA) has and will have on their company, its health plan and their employees. For most, this has created additional work, confusion, cost and anxiety. However, despite all of the real and potential negative impacts to employers, the insurance industry is on the precipice of a transformational change that will benefit employers and employees – Private Marketplaces.
The “bad [extra work/cost]” stuff:
The regulatory impact on employers is dramatic. Here is a sample list of challenges:
- Plan requirements:
- Dependent to age 26
- Preventive care covered at 100%
- No pre-existing condition limitations
- Minimum Essential Benefits
- For large employers: offering a plan that is “affordable” and of “minimum value” to “substantially all” of your full-time employees (not more than 9.5% of income, covers 60% of the cost of service and offered to 95% of employees that work more than 30 hours per week, respectively)
The “good” stuff:
Aside from the introduction of Health Maintenance Organizations (HMO) and the development of Consumer Driven Health plans (CDHP), the sleepy insurance industry has been plodding along without significant change for 30+ years. It was in need of a shake up and that time has arrived.
The ACA has been the transformational catalyst that has forced insurance carriers to:
- Upgrade or change antiquated legacy technology
- Expand their ability to provide and support an increased number of plan options
- Shift their focus and support structure toward the individual as a consumer
- Increase their ability to be flexible with third parties
The Private sector is now poised to take advantage of the labor expended in response to ACA in the form of Private Marketplaces. The individual as the consumer is the concept that will dramatically change the social contract between employer and employee forever.
With the advent of the Affordable Care Act and Insurance Marketplaces, employees now have more options than ever before. In the past, employers have navigated their employees through their health insurance choices--now they can hand that challenging task to the team behind a Marketplace.