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# Monday, September 23, 2013
6 Ways Obamacare is Affecting Open Enrollment

The Affordable Care Act is making this open enrollment season unlike any other. It’s important for employers and employees to understand the impact that Obamacare is having on the process. Here are six ways healthcare reform legislation is affecting open enrollment.


1. A New Benefit Choice


The Affordable Care Act creates a new health insurance choice for all employees: insurance through state and federal exchanges.


Many organizations offer only two or three highly distinct health insurance benefit options that remain relatively unchanged year after year. Frequently, employers offer a high-deductible, low-premium plan; a low-deductible, high-premium plan; and perhaps one plan with both a medium deductible and premium. For employees, having highly distinct options makes their enrollment decision easier.


The option to purchase insurance through exchanges will make the decision more difficult for some employees, since the exchanges offer plans with varying deductibles and premiums. The exchange option should be most appealing to lower-paid workers, as the plans are heavily subsidized for people with lower incomes.


2. More Engagement From Employees


In a typical year, employees tend to spend little or no time considering their benefit options.


In fact, a 2012 Aflac survey (http://www.shrm.org/hrdisciplines/benefits/articles/pages/perplexed-benefits-choices.aspx) found that 89 percent of employees simply chose the same benefits option each year.


This, however, isn’t a typical year.


Not only do the exchanges offer a new health insurance option, but some organizations are updating the plans they offer — in order to comply with Obamacare’s regulations even though the “employer mandate” has been delayed until 2015, or to reduce costs. As a result, some workers won’t have the option of keeping their existing plan.


But employees forced to select a new plan won’t be alone in being more heavily engaged with benefit decisions this enrollment season. Due to skyrocketing healthcare costs, companies passing a greater percentage of insurance costs to workers, and the controversy and publicity surrounding Obamacare, employees in general are increasingly concerned about the present and future of their benefits.


3. More Confusion


But even if employees are highly concerned about the rising cost of their insurance, many are unlikely to make significant changes if they are confused about their options.


So, while many people may consider getting insurance through an exchange, they may ultimately take a wait-and-see approach, and not sign up until a later date. According to a report (http://www.reuters.com/article/2013/09/16/us-usa-healthcare-investors-idUSBRE98F0WK20130916) by Reuters, while the Congressional Budget Office forecasts that 7 million Americans will seek insurance through exchanges, due to widespread confusion about Obamacare, many investors believe the number will be closer to 4 million.


Many employers are also confused and concerned about health insurance benefits. They have questions about how to prepare for and comply with the 2015 employer mandate without causing their own costs to leap.


As a result, while some companies have made changes to the plans they offer, others are watching and waiting before making any major changes.


4. Benefits Communication Is Even More Important


Effective communication is always important, but it’s even more so during a time of confusion. While the federal government recently declared that organizations won’t face a financial penalty for failing to provide employees information about their insurance options, it’s in employers’ interest to familiarize themselves with the new benefits reality under Obamacare, and then to educate their workers.


This is true for a several reasons, but the one we’ll focus on is strong benefits helps companies retain employees. Effective communication can increase the perceived value of the benefits your organization provides, and by educating employees about their current options, you can help ensure that they make the choices that will be most appropriate for them. By providing this valuable service, you can increase employee loyalty.


5. Cost Concerns Lead To Cost-Avoidance Strategies


As indicated earlier, employers’ health insurance-related costs have been rising, and many are worried that the employer mandate, when it kicks in in 2015, will cause those costs to increase at an even faster rate. As a result, employers are attempting to reduce the price they pay for their employees’ health care in a variety of ways.


These include instituting and expanding wellness programs to encourage employees to be healthy, using self-insurance to avoid the cost of performing Obamacare’s full reporting requirements, or switching to consumer-driven health plans.


6. Automated Online Enrollment is More Valuable


Given the increases in options, confusion and expenses that you’re facing, technology that can simplify the process and reduce costs is extremely valuable.


One such technology is online benefits enrollment. It results in fewer errors than manual systems; streamlines the enrollment process and reduces paperwork for employers; makes the process comfortable and convenient for employees; and reduces costs for employers by saving on printing, postage, paper and more.


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