Let’s face it. The only thing that is certain regarding healthcare legislation these days is that opinions vary. As an employer, you are likely to wonder what the future of employee benefits holds and how you can protect your employee benefits plans against changes in healthcare legislation. While there is not one correct answer, there are strategies you can take to future proof your benefits.
Create an overarching strategy
You need to craft an overarching philosophy about employee benefits. This helps you maintain a steady course in the face of uncertainty. For example, employee benefits trends indicate defined benefit plans help employers establish a baseline for their benefits offerings and expenses. From a tactical perspective, employers should consider two main factors for their defined benefit plans.
- Set a target benefit amount. First, employers should set a defined benefit amount they are willing and able to pay. Consider your historical contribution amounts. Also, determine what amount is needed to provide a competitive benefit package.
- Ensure benefits compliance with current healthcare legislation. Once you determine what you are comfortable with, it is important to verify the amount will meet or exceed current legislative requirements so that you do not incur any penalties. Current healthcare legislation sets standards regarding minimum essential coverage and affordability. Make sure you offer a baseline plan that meets both of these. Then, employees prioritize their benefit options.
Communicate with employees
Communicating with employees is key. Changes to benefit plans are inevitable.
- Be proactive. Employees need time to process and prepare for a change.
- Be consistent. You need to communicate a change at least three times (and likely in three different channels). Otherwise, employees have not likely heard (much less understood) you.
- Be honest. Let employees know what the change is and how it affects them. You will have greater support and build trusting relationships with employees.
Despite what changes may occur, regular and timely communication ensures the employer is still providing benefits that meet employees’ needs.
Offer plans designed to withstand changes
Health Savings Accounts (HSAs) are expected to survive (and possibly strengthen) under any legislative changes.
Not every plan or benefit is viewed equally in the current political environment. However, there are benefits that are expected to withstand change. For example, Health Savings Accounts (HSAs) are expected to survive (and possibly strengthen) under any legislative changes. HSAs are quickly becoming a core component to a comprehensive employee benefits package. Additionally, HSAs are viewed as a potential strategy to avoid “The Cadillac Tax”, should that come to fruition under current legislation.
According to Devenir’s Semi-Annual Health Savings Account survey, HSAs have grown to an estimated $42.7 billion in assets and over 21 million accounts as of June 30, 2017.
How do Health Savings Accounts work?
There are two basic parts of an HSA —the health savings account and a qualified high deductible health plan. The health savings account is used to pay for out-of-pocket medical expenses such as, deductible expenses and co-insurance. The qualified high deductible health plan provides comprehensive health plan coverage once an initial deductible is met.
How can we help?
As you and your benefits advisor review your benefits strategy, consider Benefit Resource for your Health Savings Account and other pre-tax health account needs. Request a proposal.