The Affordable Care Act (aka ACA or "ObamaCare") is on the top of everyone's mind, and employers are looking to health benefits brokers and advisors for guidance.
In fact, one recent survey found that 72% of small groups rely on advisors to keep informed on current government regulations, including the ACA. And, 94% of small groups predicted the need for an outside employee health benefits advisor will increase or stay the same in the next two years.
It's not surprising that small groups are looking for guidance. Another recent survey found over half (56%) of small groups don't understand how the ACA impacts them.
So, what are the key ACA issues brokers and advisors should be discussing with clients? Here are our top four ACA topics brokers and advisors should be prepared to discuss with clients and prospects.
1. ACA Compliance
Employers of all sizes have new ACA regulations to comply with. Advisors should help clients understand which provisions apply to them, and create a game plan for compliance.
The provisions an employer needs to comply with depends on how many workers are employed and the type of health benefits offered.
For example, a small client with 10 employees offering a defined contribution health plan has different compliance and reporting requirements than a large client with 1,000 employees sponsoring a self-funded group health plan. There are numerous resources and checklists online to use with clients (for example, see this health care reform compliance checklist).
2. ACA Play or Pay Navigation
Should your clients play, pay, or play differently with the upcoming ACA employer mandate requirement? Many clients are relying on advisors to help them:
Calculate their FTE employees to understand if the employer mandate even applies to them, and when it starts
If they are subject to the employer mandate, calculate the costs of playing (offering qualified group health insurance), paying (choosing to pay penalties), or playing differently with defined contribution
Understand their health insurance coverage options
Provide quotes for different health insurance coverage options
Create a timeline for implementation
There are several resources and worksheets online to help clients navigate the play or pay decisions (see this play or pay guide as an example).
3. ACA Tax Credits
As clients navigate the ACA, brokers and advisors should be discussing the health insurance tax credits. This includes helping clients understand:
How the individual health insurance tax credits work for employees, and their family members
The income levels of employees, and eligibility for individual health insurance tax credits
How the business can take advantage of the individual health insurance tax credits for overall cost savings
Eligibility for the small business health care tax credit
There are several resources online to help clients understand, and take advantage of, the health insurance tax credits (for example, see this guide).
4. New ACA Small Group Health Insurance Options
Clients, especially small groups, are researching traditional group health insurance, as well as new health insurance options such as the exchanges and defined contribution allowances.
Small groups are looking to new health insurance options because they are priced out of the small group market, and/or they see the advantages of the individual health insurance.
Even if you don't want to bring up these new approaches, there are two new health insurance approaches you should be prepared to discuss, and offer solutions for:
Defined Contribution Health Plans: The most popular new option small groups are researching is a pure defined contribution health plan, where the business gives employees a healthcare allowance instead of purchasing a group health plan. Employees use their healthcare allowance to purchase an individual health plan of their choice, and those eligible can access the individual health insurance tax credits. Advisors should be prepared to discuss how these plans work, prepare quotes for plan set up and administration, and be an advisor for employees purchasing individual health insurance.
Health Insurance Exchanges: Small groups are also researching coverage through the new small business SHOP Exchanges. Advisors should be prepared to discuss how the SHOP works, quote and compare plans, and assess eligibility for the small business tax credit (for groups with fewer than 25 employees). Until later this year, small groups are required to enroll through a registered, licensed broker.
These two options offer nontraditional approaches to health insurance, and are controversial to some brokers and advisors. But, the demand is out there for more affordable solutions, so if you aren't prepared to discuss them and offer them, you will likely lose their business to another broker or advisor who does.
What other ACA issues are key to talk about with clients and prospects? Leave your feedback or a question below.