The healthcare marketplace is changing. Here’s how to maximize employee participation and prevent penalties due to non-compliance.
Health insurance is one of the most in-demand employee benefits, and employers deliver. Fifty-five percent of small firms and 99% of large organizations offer healthcare benefits to their workers. But most companies are running against obstacles when employees try to use their insurance.
According to a recent UnitedHealthcare survey, only 9% show some solid understanding of their health plan.
This isn’t entirely surprising. Over the years, health insurance has become more and more complicated. Employees are now trying to decode jargon like “eligible dependents,” understand ever-changing regulations, and determine the difference between health savings accounts (HSA) and flexible spending accounts (FSA).
The good news is that you can help your employees make sense of their health coverage. But before we get into our tips for employee education, let’s talk a bit about what is expected of your business when it comes to medical care.
Are employers required to provide health insurance in 2021?
Yes, many companies will be required to provide health insurance in 2021. But even if you aren’t required by law, offering some benefits can be a boost to your employee retention.
If you have less than 50 full-time employees on staff, you are technically not obligated to offer anything according to the law. However, not offering any benefits at all can be a huge deterrent when it comes to hiring new staff.
The biggest question aside from pay is health insurance-related, and most people who come looking for work are looking for these benefits. If they can’t afford private health insurance on the pay they’ve got, then they’re going to be actively looking for other work while they’re clocking in.
You want your employees to be focused on what they bring to your office, not how fast they can hand in their 2-week notice. For motivated, happy employees that take excellent care of your business, you’re going to want to be more than just a paycheck until they find something else.
If your budget is holding you back, you may want to look into resources such as the Small Business Health Care Tax Credit. Small businesses with less than 25 full-time employees — that don’t pay them more than $51,600 per annum — might be able to get a tax reduction.
Larger organizations get far less leeway. If your business has more than 50 full-time employees, you are considered an applicable large employer (ALE) and will receive a tax penalty of $3,860 per employee if you do not offer health insurance.
Help employees understand health insurance 101
Now, for those of you choosing to offer health insurance, the next challenge is how to create a benefits strategy and then explain these benefits to your employees.
In the past, it was enough to provide your employees with a health insurance plan brochure. But that isn’t enough anymore, especially if you have multiple healthcare options — such as adding an HSA to your High Deductible Health Plan (HDHP). You may also have health-related benefits, such as employee assistance programs (EAP) that offer telemedicine, life insurance, or other online tools.
To keep things simple and streamline your health insurance onboarding and education, try out these 4 tips.
1. Break down health insurance options
First things first, you’ll want to sit down and create a “guide” to your healthcare plans. Ideally, this plan should simplify the key things your employees should know about their health insurance and basic terminology. This is to ensure that, if nothing else, they can understand the basic plan and how to use it.
You’ll want to sit down and create a “guide” to your healthcare plans. Ideally, this plan should simplify the key things your employees should know about their health insurance and basic terminology.
Every health insurance option, from group health benefits to a health reimbursement arrangement (HRA), typically has the same components. So you’ll want to explain, in simple terms, the following.
Also referred to as “managed plans,” the provider network highlights what doctors, hospitals, labs, and clinics are covered by the employee’s insurance plan. The most common types of provider networks are health maintenance organizations (HMOs), preferred provider organizations (PPO), and point-of-service (POS). You’ll want to summarize their specific managed plan model and provide resources for them to search their network for covered medical institutions.
Also called a “drug formulary,” this section basically covers the different tiers of co-pays for prescription drugs and other medical expenses. You will want to outline the general co-pay tiers and provide broad examples of what is covered and what isn’t.
Most employees will gravitate to this section because this is how much they are paying every month and it’s fairly straightforward.
Some healthcare plans require plan participants to reach a deductible limit before the insurance kicks in. In some cases, a higher deductible can result in lower monthly fees. These are not co-pays and are more similar to out-of-pocket expenses.
Additional plan benefits
In addition to their core offerings, some plans provide additional insurance benefits. This may include hospitalization, urgent care services, and care for certain life events — such as pregnancies or newborn care.
You’ll also want to explain common terms they may struggle with while reading the plan’s educational material, such as “plan participant,” the differences between deductibles and monthly premiums, and other jargon.
Furthermore, you’ll want to highlight other essential information related to their healthcare needs, such as:
- How they can access their insurance
- Where they can find more information about their network or coverage
- Open enrollment deadlines, if applicable
- Sick leave policies
- Dependent care policies
2. Automate the process
Manual education initiatives, such as paper packets and individual check-ins can be hard to track. As your organization scales, it’s typically much easier to use an automated benefits administration system to keep your employees informed.
Not only can automation and online resources help you to distribute information quickly and effectively, they can allow you to also answer questions on most platforms.
3. New hire and ongoing engagement and support
Human Resources is a key touchpoint for ensuring employees understand their healthcare needs and medical services covered under their plan.
However, most employees only hear about their health insurance once, and that’s when they’ve joined the company. While new hire onboarding is crucial, you’ll also want to provide annual support to field questions about health insurance plans and potential changes.
4. Use different communication strategies
Not everyone learns the same way, and when it comes to conveying information as important as health insurance, it can be useful to have more than one way to explain your organization’s plan.
You can make a short video to explain key concepts, use graphs and images from your healthcare provider, or even create short quizzes employees can take to ensure they’ve read the material.
First, we highly recommend investing time in tip one to summarize essential plan information and ensuring that it’s easily accessible. If you do decide to automate or put your plan details on an employee platform, you can also add other media to offer additional insights. For example, you can make a short video to explain key concepts, use graphs and images from your healthcare provider, or even create short quizzes employees can take to ensure they’ve read the material.
While this may appear like a lot of upfront work, once you create these documents, you shouldn’t have to change them again unless there is a significant update to your healthcare plan. This means you can reuse the materials over and over, and provide your employees with more support. It’s a win-win.
More on healthcare benefits
Healthcare benefits are likely to remain the most popular perk. Part of providing health insurance is ensuring that your employees know how to use it. But you’ll also want to make sure that your plan makes sense as a part of your overall benefits strategy.
To see if your plan stacks up, check out this free 2021 Benefits Benchmarking Report.