Second of a three-part series, click here to access part-one
Making decisions about pay-based premiums
What does the old adage, “nothing ventured, nothing gained” have to do with the Affordable Care Act’s compliance and reporting requirements?
If you never venture into data brought to light by aggregating unrelated payroll, benefits administration and HRIS systems, you’ll never gain valuable insights into your workforce that can guide you into making better informed health care coverage decisions for your employees!
Take pay-based premiums, for example. Employers who are considering this health care coverage approach now, because of need to integrate ACA data, have easier access to benefit eligibility and enrollment information by pay grades.
Why is it important to consider pay-based premiums? Consider that, in 2017, the average monthly employee premium cost share for individual coverage was $130/month and $375/month for family coverage. An employee making 100% of the Federal Poverty Level (FPL – $12,060 annually in 2017), would pay an average of 13% of their wage for individual coverage and an average of 37% for family coverage premiums. It’s no wonder, then, that many lower-income employees may decline to enroll in your organization’s sponsored health benefits. See our Eligibility and Enrollment chart by FPL below.
What’s more, the data uncovered in our annual Insights Report illustrates that employees who are enrolled in your company’s benefits plans have a longer tenure than those who aren’t enrolled. This is especially true for lower-income workers. If the success of your business depends on retaining your employees (and whose doesn’t?), then implementing a pay-based premium plan can work to your advantage.
To build health benefits strategies that meet the needs of employees at all pay levels, employers would be well advised to look at their current offerings and enrollment by pay grade.
Questions to ask:
- What percentage of your employee base considers cost a barrier to health plan enrollment?
- What do your premium levels and claims data reveal about coverage usage by pay grade?
- If switching to a pay-based premium strategy isn’t an option, how is your organization communicating to lower-paid employees about public health care options that may be available?
Next: Building a gender equity strategy that works
October 18, 2018