More than 85% of employers are projecting cost increases to result from the Affordable Care Act, but there are still ways to use the ACA to cut costs:
Shopping around With ACA has come the dawn of better cost comparison services for healthcare. In the past, employers and employees had to either choose medical providers on a whim or plough through reams of small print, but now there are services that will compare prices and quality so you can find one that best fits your budget. Services like Healthgrade and FAIR Health can quickly give you an idea of what sort of costs to expect
Private exchanges According to the Private Exchange Evaluation Collaborative, 25% of employers think that moving to a private exchange and allowing employees to choose their own plan will save them money. These exchanges operate in a similar manner to the state-run exchanges, except that they are run by companies such as Mercer and Aon Hewitt. Under private exchanges, employers still cover or subsidize insurance, but they simply offer employees a set amount and allow the workers to choose their own plans. Given that 80% of employees say it’s very important or extremely important that their employer offers a choice in health plans (Employee Benefit Research Institute), private exchanges could also keep staff satisfied
On-site or near-site clinics Because more people will have access to healthcare, many people are predicting that hospitals and clinics will be overwhelmed with demand, meaning that employers could end up effectively paying while employees wait to see a doctor or get treatment. On-site clinics are one way to regain control of medical costs, and can end up saving larger employers money over the long term. This can be done through your insurance company or through a specialist consultant
Wellness programs Healthy people are going to cost employers less. The government allows you as an employer to recognize that and charge higher premiums to those that are costing you more. This means that your company can diminish some costs by shifting a higher proportion of premiums to employees who do not meet certain health benchmarks
Key ACA rules for employers
- 30/130 rule Employers must provide healthcare to employees who work more than 30 hours a week, or 130 hours a month
- Coverage must be “affordable” Employee contributions cannot exceed 9.5% of household income
- Deductible limits Deductibles for non-grandfathered medical plans must not exceed $2,000 for individuals and $4,000 for other levels, such as family or partner-inclusive coverage
- Small group tax credits Many small group employers and non-profits will qualify for tax credits of up to 50%
- Increased premium reward/penalty limits If employees participate in wellness programs or meet certain health benchmarks, employers may offer rewards or penalties of up to 50% of insurance premiums, up from a 20% reward/penalty cap pre-2014
