The public exchanges were a critical component of the Affordable Care Act intended to expand the options available to the general population, particularly for those who didn’t have employer-sponsored health coverage (or who had a less-than-desirable employer plan).
The first individual plans purchased via the exchange are now in effect as of the first of the year. So what has been the impact of the public exchange thus far? We see three major outcomes to date.
As predicted, most employer-sponsored health coverage didn't go away in spite of new individual product offerings. Rather than face fines (although that component of the ACA was delayed), employers are widely opting to take the tax-advantaged opportunity to offer something of value to their employees — and it remains more cost-effective to insure a group than it is for everyone to seek individual products on their own.
However, we are seeing some companies change their plans to carve out spouses and families, or adjust employee hours to restrict who’s eligible. Several high profile companies such as UPS and the University of Virginia have announced decisions to limit the eligibility for their plans. Every employee population is different, and a decision to change who’s eligible should not be taken lightly — but we would not be surprised to see more employers make similar moves.
The Obama administration openly announced a goal of enrolling 7 million Americans through the public exchange — but numbers reported last month show only about 360,000 signed up to date.
Navigating the federal exchange has been very difficult thus far. From our experience and from the feedback we’ve heard, it’s very confusing, people are concerned about the security of their information (rightfully so), and there continue to be website outages on an ongoing basis.
If you do have a subset of your employee base that isn’t covered by a group plan (or whose families aren’t covered) we would strongly recommend your company direct them somewhere they can get coverage or at least get help — as opposed to letting them “fend for themselves” in the public market. Why? It’s important for employee morale, for their ultimate health, and for recruitment and retention — and either way, they’re still probably going to HR with their questions!
As a side note: we’ve partnered with a FREE resource that allows employers to connect their part-time employees, independent contractors, retirees, and anyone else in need of individual coverage with a registered insurance advisor who will walk them through the process of finding individual coverage. Click here to check it out if you need assistance supporting your employees in this area.
The biggest trend we’re seeing as a result of the federal health marketplace? The number of employers asking about PRIVATE exchanges has skyrocketed now that the public exchanges are all over the news.
In a private exchange model, an employer can offer many more options (typically 4-8) and provide a defined contribution to allow employees to “shop” for coverage. We’re seeing interest surge for choice models that allow the same online shopping experience and flexibility that employees are used to having for other products.
Beyond the public health marketplace, 2014 ushers in several new components of the Affordable Care Act, including the implementation of the individual mandate, expansion of Medicaid, and changes to plan design requirements. One thing remains constant — CHANGE!
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