The Affordable Care Act (ACA) has been the law of the land since 2010, but the bulk of the law's provisions for employers have only been fully implemented over the past couple of years. By now, employers are aware of the general requirements under the law's employer shared responsibility provision, but plenty of employers are still working out the details in terms of the best practices for efficiently remaining in compliance with the ACA. And while Congress and the Administration could make changes to health care policy, until such changes happen, employers need to comply with the law as it currently stands.
The Importance of Open Enrollment Communications
In 2016, many employers shifted their ACA focus from rigorous preparation for full compliance to a much tougher environment, where Internal Revenue Service (IRS) requirements are effective and enforcement will begin. Specifically, 95 percent of a large employer's full-time employees must now be offered health coverage or the employer could be subject to penalties.
Responsibilities Beyond Coverage
But that's only half the battle. In addition to offering coverage, organizations also have to keep track of coverage offers, employees' responses to those offers, the affordability of the coverage that's offered and employees' hours of service during the year. The data then has to be compiled and reported to the IRS. The ACA adds an additional layer of complexity to previously established guidance in terms of how coverage offers and enrollment opportunities should be communicated to employees.
Most organizations hold open enrollment in the fall for coverage effective during the upcoming calendar year. This lines up with the headlines employees see throughout the fall regarding the open enrollment period for the individual market under the ACA. But for your employees, those headlines might create more questions than they answer.
There's a good chance you're making adjustments to your benefits for the coming year, which makes it particularly important to engage in open enrollment communications with your employees. An ADP Research Institute® study indicated that a significant number of organizations are changing the amount employees contribute to their premiums, adjusting the cost-sharing of the plan itself or adding new plans with lower actuarial value, particularly Consumer-Driven Health Plans (CDHPs). These changes — combined with the ongoing background noise your employees are likely hearing about the ACA — highlight the importance of initiating open enrollment communications early and often.
What the Law Requires
The ACA sets minimum requirements in terms of communicating about the health insurance exchanges when employees are hired and the summary of benefits and coverage (SBC) and uniform glossary that must be provided annually during your open enrollment period. There are also other communication requirements, such as the summary plan description (SPD), that pre-date the ACA.
Of course, in addition to ensuring that your employees understand the benefits package you're offering, you'll need to make sure they know the steps they must take to accept or decline the coverage offers. You'll also need to have a process for tracking coverage offers and employees' responses so that you can accurately report that data to the IRS.
It's important to coordinate the communication of information from multiple sources, including different departments within your organization and third parties such as brokers, benefits administrators or outsourced ACA compliance vendors.
Go Beyond the Basics
Beyond the minimum legal requirements, open enrollment communications that go beyond the basics — presented in a clear, easy-to-understand format — will make for a smoother open enrollment period. Your employees will look to you for guidance regarding which ACA changes apply to them and which do not. The more you do to address their questions and concerns early in the process, the less time you'll spend fielding emails and phone calls from your employees at the end of the year.
If you're providing generous benefits, make sure that comes across in your open enrollment communications. Your benefits package is a key part of your ability to attract and retain talented workers, and open enrollment is your opportunity to showcase how well your benefits package stacks up. Is it better than the coverage available through the exchanges? Are the provider networks broader? Would your employees pay more for coverage obtained on their own?
Clear communication of these details will boost satisfaction and enable employees to make educated decisions as they wade through a sea of options during open enrollment.