Health insurance: What employers need to know for open enrollment

This year, open enrollment for health insurance plans begins Nov. 1 and extends to Dec. 15 (although specific employers may have different deadlines and open enrollment periods within that timeframe, and certain states have already extended the deadline). During this time, employees can elect or change coverage, depending on their needs. Outside of special qualifying events, such as the birth of a child or marriage, this is the only time of year these changes can be made.

If last year's open enrollment period was any indicator, this year is sure to be a wild ride. HR managers across the country will have to work with their insurance providers to inform employees about their coverage options and answer questions about plan changes. These tasks may prove difficult, as the health insurance landscape changes with new regulations and provider requirements.

Talking to employees about health insurance

It seems like there's more news every day about how health insurance is changing, and that could mean an influx of questions from confused employees. To help them better understand changes to their coverage this year, HR personnel should take the time to meet with their insurance partners and develop materials that clearly explain what to expect in terms of coverage, premium costs and voluntary benefits.

"As with any business communication, it's important to communicate Open Enrollment and benefits offerings thoroughly, accurately and in a way that is easy to digest," explains Paige Charbonneau, Benefits and Compliance Manager for Beacon Hill Staffing Group. "It's also good to use multi-media campaigns which can reach the different learning styles of your audience. Open Enrollment is an important time where individuals and families have decisions to make and it's often a financial decision due to the trending consumer-driven health insurance environment. Equal effort should be put into properly communicating benefits offerings to employees and making information accessible to them as is put into strategizing the benefits package."

According to the Society for Human Resource Management, affordability will likely be one of the biggest points of discussion this year. This is especially true for employees with dependents.

"Employees can expect to see changes in the cost of spouse and dependent coverage, especially if the spouse is working and has access to his or her own employer-provided health coverage," Randall Abbott, a health care leader at Willis Towers Watson, told SHRM. "They can also expect employers to encourage use of treatment settings and service providers that deliver higher-quality health care at lower cost."

One of the main concerns employees have is the rising cost of health care premiums. However, while premiums on individual plans are on the rise, group coverage has remained stable. In fact, the Kaiser Family Foundation reported that premiums on group plans only rose by 3 percent this year, on average. HR managers should make it a priority to explain how group coverage can be more affordable than individual plans found through the marketplace.

Employees should also understand the risks of opting out of insurance. Failure to enroll in a health plan incurs a sizable fine, which still does not guarantee benefits. Even for employees who rely on their salaries for daily expenses, having health insurance is likely cheaper in the long run than not having it.

Why small businesses should consider offering benefits

Businesses with fewer than 50 employees are not required to offer health coverage under the Patient Protection and Affordable Care Act. However, providing some level of benefits can improve employee retention rates and boost talent attraction.

According to a Fractl survey, 88 percent of job seekers consider health benefits when deciding to work for a particular company. Indeed, many workers would consider taking a job that offered benefits even if it meant a lower salary.

"When our candidates are making a decision about an offer, the cost of benefits for individuals and especially families can definitely be a factor," says Lorri Zelman, Division Director of Beacon Hill's HR Division in New York. "There's no doubt low cost, high quality benefits are a major attraction and retention tool in today's market."

Small-business owners should weigh the costs of employee benefits against the potential costs of high turnover. The Center for American Progress reported that it costs 16 percent of an entry-level employee's salary to hire and train a replacement. As positions require more experience, the cost-to-hire rises as well. It could cost around $8,000 to replace a worker who earns $40,000 per year.

And that's not the only reason small-business owners should consider offering additional benefits. For instance, if a manager were deciding between providing benefits versus giving out raises, it may make more financial sense to choose the benefits. Raises could put employees into a higher tax bracket, effectively limiting how much they can actually earn and keep.

"When developing benefits offerings, it is important to take into consideration the behaviors of your benefits-eligible population, but also aim to target their financial and health goals and values," notes Ms. Charbonneau. "For example, this may involve offering wellness incentives, such as a gym reimbursement, to promote healthy living or implementing a pre-tax Health Savings Account option for those who are able to and thinking about investing in their current or future health needs. Beacon Hill Staffing Group understands and appreciates that a competitive benefits program attracts and retains those who are the essence of our growing business and success: our hard-working employees."

Additionally, health benefits are tax-deductible, unlike salaries. Try running the numbers both ways, to see which course of action works better for your small business. You may be surprised by how affordable group benefits can actually be.

To learn more about recruiting the best talent for your organization, contact the expert recruiters at Beacon Hill Staffing Group today.

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