5 Key Steps to a Successful Open Enrollment

Courtesy of UBA Benefits

In previous posts, I have talked about several aspects of strategic benefits communication. Now it’s time to put those strategies into action. As we approach enrollment season, let’s look at five key steps to ensuring this year’s open enrollment is successful for you and your employees.

1. Determine your key objectives

What do employees need to know this enrollment season? As you review your benefit plan designs, think once again about your key objectives, and for each, how you will make employees aware and keep them engaged. What are the challenges employees face when making their benefits decisions?

  • Are you rolling out new medical plan options? Does this include HDHP options? An HSA? Are there changes in premiums and contribution levels?
  • Are there any changes to other lines of coverage such as dental, life insurance, disability insurance?
  • Are you adding new voluntary plans this year? How do they integrate with your medical plans? Do they plug gaps in high deductibles and out-of-pocket expenses? Are there existing voluntary plans with low participation?
  • Are there other important topics to share with employees, like new wellness programs, or health-driven employee events?

Once you’ve gathered this information, you can develop a communication strategy that will better engage employees in the benefits decision-making process.

2. Perfect your script

What do you know about your employee demographics? Diversity doesn’t refer only to age or gender. It could mean family size, differences in physical demands of the job, income levels, or simply lifestyle. It isn’t a one-size-fits-all world anymore. As you educate employees on benefits, you will want to give examples that fit their lives.

You will also want to keep the explanations as simple as possible. Use as much plain language as you can, as opposed to “insurance speak” and acronyms. Benefit plans are already an overwhelming decision, and as we have seen in our research, employees still don’t fully understand their options.

3. Use a multi-faceted communications strategy

Sun Life research and experience has shown that the most appreciated and effective strategies incorporate multiple methodologies. One helpful tactic is to get a jump-start on enrollment communication. As enrollment season approaches, try dynamic pre-enrollment emails to all employees, using videos or brochures. Once on-site enrollment begins, set up group meetings based on employee demographics. This will arm employees with better knowledge and prepared questions for their one-to-one meeting with a benefits counselor.

Consider hard-to-reach employees as well, and keep your websites updated with helpful links and provide contacts who are available by phone for additional support.

Also, look to open enrollment as a good time to fill any employee data gaps you may have, like beneficiaries, dependents, or emergency contacts.

4. Check your tech!

We have talked in previous posts about leveraging benefits administration technology for effective communications. For open enrollment, especially when you may be introducing new voluntary insurance plans, it is important to check your technology. I recommend this evaluation take place at least 6 to 8 weeks before open enrollment if possible.

Working with your UBA advisor, platform vendor and insurance carriers, some key considerations:

  • Provide voluntary product specifications from your carrier to your platform vendor. It is important to check up front that the platform can handle product rules such as issue age and age band pricing, age reduction, benefit/tier changes and guarantee issue rules. Also, confirm how the system will handle evidence of insurability processing, if needed.
  • Electronic Data Interface (EDI). Confirm with your platform partner as well as insurance carriers that there is an EDI set-up process that includes testing of file feeds. This is a vital step to ensure seamless integration between your benefits administration platform, payroll and the insurance carriers.
  • User Experience. Often benefits administration platforms are very effective at moving data and helping you manage your company’s benefits. As we have discussed, when it comes to your employee’s open enrollment user experience, there can be some challenges. Especially when you are offering voluntary benefits. Confirm with your vendor what, if any, decision support tools are available. Also, check with your voluntary carriers. These could range from benefit calculators, product videos, and even logic-driven presentations.

5. Keep it going

Even when enrollment season is over, ongoing benefits communications are a central tool to keeping employees informed, educated, and engaged. The small window of enrollment season may not be long enough for people to get a full grasp of their benefits needs, and often their decisions are driven by what is easily understood or what they think they need based on other people’s choices. Ongoing communications can be about specific benefits, wellness programs, or other health and benefit related items. This practice will also help new hires who need to make benefits decisions rather quickly.

In summary, work with your UBA consultant to customize benefits and enrollment communications. Leverage resources from your provider, who may, as Sun Life does, offer turnkey services that support communication, engagement, and enrollment. Explore third-party vendors that offer platforms to support the process. The whole thing can seem daunting, but following these steps and considerations will not only make the process easier for you, it will make a world of difference to your employees.

To help employers communicate their plan’s advantages, UBA Partners (li can benchmark your plan against others in your industry, region and groups size. Request your free benchmarking report.

By Kevin D. Seeker, GBA, AVP, Benefit Communication, Sun Life Financial, A UBA Strategic Partner

 

Employer Strategies for Managing Prescription Drug Costs

Courtesy of UBA Benefits

Modern medicines have resulted in longer, more productive lives for many of us. Prescription drugs soothe sore muscles after a strenuous workout or manage the conditions of a chronic disease. Unfortunately, this use of prescriptions drugs can come with a hefty price tag.

Americans are spending more money on prescription drugs than ever before and the United States as a nation spends more per capita on prescription drugs than any other country. With the cost of some drugs exceeding thousands of dollars for a 30-day supply, this can translate into financial hardship for many Americans.

For employers sponsoring a medical plan, managing the cost of these prescription drugs is also becoming a task. Insurance companies and employers struggle with the ability to provide affordable medical plans, and the ever-increasing prescription drug costs are a primary driver of this difficulty. As a result, prescription drug plan designs are changing shape – moving to a model that helps push more of the cost of these drugs to the member along with increasing awareness of the true cost of the prescriptions.

Flat dollar copay plans have become an expected norm in medical plans for almost a decade. However, insurance companies underwriting fully insured medical plans and employers sponsoring self-funded medical programs now need to make modifications to these plan designs to manage the ever-increasing prescription drug costs. As a result, we are seeing more prescription drug plans combining some aspect of coinsurance along with or in place of the flat dollar copayments.

According to the 2016 UBA Health Plan Survey, copay models are still the most popular, with a three-tier copay structure the most prevalent. Median retail copayments for these three-tier plans are $10 for generic drugs, $35 for preferred brand drugs (drugs on the carrier’s prescription drug list) and $60 for non-preferred brand drugs (drugs not on the carrier’s prescriptions drug list). While 54.5 percent of all prescription plans are copay only, approximately 40 percent of all prescription drug plans have co-insurance along with (or in lieu of) copays--a plan design that is particularly common among four-tier plans.

Coinsurance models have many unique designs. Some plans are a straight percentage of the cost of the drug; some may involve a maximum or minimum dollar copayment combined with the coinsurance. For example, a plan may require 40 percent coinsurance for a preferred brand drug, but there is a minimum copayment of $30 and a maximum copayment of $50. Typically, we see a higher coinsurance percentage for non-preferred brand drugs and specialty drugs. The member cost of the drug is calculated after any negotiated discounts, so members covered by a coinsurance plan are reaping the benefits of any discounts negotiated with the pharmacy by the pharmacy benefit manager (PBM).

Coinsurance plans do provide several advantages to managing prescription drug costs. Under a flat dollar copay plan design, members may not truly understand the full cost of the drug they are purchasing. Pharmacies are now disclosing the full cost of drugs on the purchase receipts. Yet, most consumers do not take note of this disclosure, focusing only on the copayment amount. When a member pays a percentage of the cost of the drug as in a coinsurance model, the true cost of the drug becomes much more apparent.

Another advantage of the coinsurance model is that it automatically increases the member share of the cost as the price of the drug increases. Under the flat dollar copayment model, as the true cost of the drug increases, the member pays a smaller portion of the total cost. When the member’s portion is determined by a coinsurance percentage, the member pays more as the cost of the drug increases.

As the costs of health care overall continue to increase, we all need to become better consumers of our healthcare. Members covered by a prescription drug plan with a coinsurance model will have a better understanding of the true cost of their prescriptions. As members become more aware of the true costs of their care, they make better health care decisions, managing the overall cost of care.

We expect to see prescription drug benefit plans change even more as the cost of health care – especially prescription drugs – escalates. These changes will likely result in more of the cost being pushed to the patient. There are resources available to patients for assistance with some of these out-of-pocket costs. It is vital for the patient to understand their costs and know how to maximize their benefits. In a few weeks, the UBA blog will highlight some of these resources and provide information on how to educate employees on maximizing their benefits and the industry resources available to them.

For all the cost and design trends related to health and prescription drug plan costs by group size, industry and region, download UBA’s Health Plan Survey Executive Summary.

By Mary Drueke-Collins, FSA, Vice President of Employee Benefits for Swartzbaugh-Farber & Associates, Inc.
A UBA Partner Firm

 

ERISA's "Church Plan" Exception

Courtesy of UBA Benefits

The Employee Retirement Income Security Act (ERISA) was signed in 1974. The U.S. Department of Labor (DOL) is the agency responsible for administering and enforcing this law. For many years, most of ERISA's requirements applied to pension plans. However, in recent years that has changed, and group plans (called "welfare benefit plans" by ERISA and the DOL) now must meet a number of requirements. Government and church plans do not need to comply with ERISA.

However, some employers are unsure if they meet ERISA's "church plan" exception. Entities associated with churches such as hospitals, schools, nursing homes, and charities are often unclear about whether they meet the exception. Under ERISA, a church plan is "any employee benefit plan established and maintained by a church or by a convention or association of churches that is exempt from tax under IRS Code Section 501 with respect to which no election has been made under IRS Code Section 410(d). The plan must be established and maintained primarily for benefit of the employees of a church or convention or association of churches. Substantially all the covered individuals under the plan must be employees of the church or the convention or association of churches.

Although this might seem straightforward at first glance, determining whether a church or convention or association of churches exists is dependent on the facts and circumstances of an organization. Organizations may request a DOL opinion letter, or an IRS private letter ruling (although the DOL reserves the right to review IRS determinations via private letter) to determine if they meet the definition. To add another layer of uncertainty, courts are not bound by either DOL or IRS determinations.

For more information on the three-factor test that determines if a plan meets ERISA's "church plan" exception, the related 2017 Supreme Court ruling, and ambiguous areas employers should be aware of, request UBA’s Compliance Advisor, “ERISA's ‘Church Plan’ Exception”.

By Danielle Capilla, Chief Compliance Officer at United Benefit Advisors