Communicating with employees about health care options more important than ever

While many employers are diligently preparing their internal systems for the changes coming with the PPACA, it's important not to overlook the importance of communication with employees and leveraging changes to enhance talent attraction and retention. With major health care reform changes planned for 2014, many employees are unaware of how this new marketplace will affect them, and it's important that employers get in front of the necessary communication now. Employees are receiving many mixed messages from friends, media, co-workers and others that can be misleading or confusing. A recent survey by Colonial Life & Accident Insurance Co. showed that most workers think their employers are not communicating effectively.

It's particularly important to take a lead role now because employees are expected to receive an avalanche of marketing materials from insurers, health insurance exchanges and government agencies in anticipation of health care reform, in addition to the company's benefits plan information. Think about the commercials for car insurance and imagine the same creative, targeted marketing for health insurance. Under the individual mandate of the 2010 Patient Protection and Affordable Care Act, all Americans will have to purchase health care insurance in 2014.

Jackie Cuthbert, principal at Mercer, a human resources consulting firm in New York City, recommends making a list of terminology that employees are seeing, such as exchanges, individual mandate, affordable coverage, essential health benefits and premium subsidies as well as a Frequently Asked Questions (FAQs) handout. A microsite can also be a helpful tool to keep information up-to-date.

Some suggestions that emerged from the survey by Colonial Life & Accident Insurance Co. include:

• Providing benefits information employees can access at home or at work, with 38 percent of employees saying this change would be helpful to them.

• Providing benefits information that's easier to understand was equally desired at 37 percent.

• Providing an opportunity for employees to talk with a benefits expert on company time was something that more than a third-34 percent-of employees would like their employer to do.

Other changes employees said would help included having choices to customize the benefits package (59 percent), receiving benefits information more frequently (31 percent) and receiving benefits information that's more personalized to their needs (30 percent).

There are many resources available and your CWCA can help.

Employer decisions about health reform may push up Workers' Compensation costs

Just when employers begin to feel they are getting a handle on the Patient Protection and Affordable Care Act (PPACA), an analysis by the National Council on Compensation Insurance, Inc. (NCCI) injects another consideration. The analysis concludes that decisions by employers on the implementation of the PPACA could affect Workers' Compensation premiums.

A March NCCI advisory notes that because administrative options will influence underwriters' tabulation of policy holders' payrolls and premiums, how employers comply with the law "has the potential to affect an employers' Workers' Compensation delineation." Employers' total payroll is a major determinant of premium in NCCI-rated states. Any cash an employer gives to employees as part of their gross wages to buy their own insurance, such as through an exchange, would be considered payroll.

In contrast, employers' payments to group health plans would not be included as payroll when determining Workers' Compensation premiums. Another factor is the rebates employers may receive from health insurers, which do not meet the premium percentage thresholds for spending on claims and quality improvements. This is known as the Medical Loss Ratio (MLR).

When employers that receive a MLR give the full rebate, or a portion thereof, to employees, the full or portion rebate amount is included in payroll for the purpose of determining the employer's Workers' Compensation premium. On the other hand, if the employer receives an MLR rebate from the health insurance provider and applies or uses the full rebate, or any portion of the rebate, for future health insurance premiums for the employee that full or portion rebate amount is excluded from payroll for the purpose of determining the employer's Workers 'Compensation premium.

The advisory also notes: "With regards to the employer handling of MLR rebates and health insurance coverage payments or contributions, it is important to note that per NCCI's standard Workers' Compensation and Employers Liability Insurance Policy, Part Five-Premium, an employer is required to keep records of information needed to compute premium. In addition, the employer must provide those records to the carrier, when requested, for the purpose of auditing the employer's Workers' Compensation policy."

NCCI provides rating service for 38 states and undertook this analysis to help insurers and agents understand the payroll effect and to help employers learn how their group health insurance purchasing decision might influence Workers' Compensation costs.