With health insurance, there has always been explaining to do.
This year, there's more.
Health care reform and the new individual and small-business marketplaces to open Oct. 1 are part of the reason. The other part is a systemic shift toward consumerism that industry insiders say began long before Obamacare became law.
Together, they equal a need for lots of educating and answering of questions.
The looming deadline
In addition to being the much- heralded date of the marketplace opening, Oct. 1 is also the deadline for companies to notify their employees of the existence of those marketplaces. There are two model notices for employers to use for that purpose — one if they offer health benefits and one if they don't. But to communicate meaningfully with their employees, some businesses are crafting cover letters.
All the notices really communicate is that the marketplace exists and that the company does or does not offer its own plan, says Rob Glus, partner and consulting actuary at Conrad Siegel Actuaries, which is based in Susquehanna Township.
"I don't want to confuse my employees into thinking that they should be going to the marketplaces," Glus says, particularly because, in 2015, the employer mandate will kick in with penalties for businesses that have 50 or more full-time-equivalent employees, don't offer affordable and adequate coverage and therefore have employees receiving subsidies on the marketplaces.
However, neither should employers mislead or discourage employees who may qualify from checking out the marketplaces.
"To me it's all about making it clear," Glus said.
Because employers may offer benefits to some employees but not others, he says, that may call for some rather general statements followed by an invitation to stop by the human resources department with any questions.
"But that's going to put a lot of burden on those HR departments," Glus says. "The HR folks are going to be inundated with questions from employees: 'Is this going to be a good deal for me?'"
David Vassilaros, senior vice president of operations at The Benecon Group, says Benecon prepared cover letters for clients and sent them out last week, "which was an incredibly laborious process."
"This information is complicated and has a lot of terms in it that employees have never heard before," Vassilaros says.
The next day, the U.S. Department of Labor provided new information to the business world: Although the notices are required, there is no fine or penalty under the law for failing to provide them.
Vassilaros says he thinks plenty of employers will still send out the notices, but news that there is no financial risk in not doing so may cause some to skip it.
The DOL news took an edge off Oct. 1, and only a small number of employers are expected to enroll in the small-business marketplace plans. Individual enrollment, too, is projected to be small in 2014 compared with the number of people who have employment-based coverage.
Still, Matthew Scott, senior vice president of the HDH Group, says employers will definitely be watching what happens with the marketplaces.
As the individual mandate comes into effect in 2014, employees may start pressuring their companies to provide qualifying coverage, Scott says, and employers who were thinking about offering coverage for 2015 to avoid penalties may have difficulty getting employees on board if they have already signed up and received subsidies on the marketplaces.
Also, what the Pennsylvania marketplace rates and plan networks will be is still unknown, not to be revealed by the federal government until Oct. 1. As employers and employees alike consider their options, that segment and its effect on the rest of the market matters.
The long-term shift
That the considering is not being done just by employers signals the other change that is requiring explanation, Glus says: Health insurance is becoming increasingly consumer-centric, with more information available to consumers and more required of them, in terms of both decisions and dollars.
"There's nothing new about the idea of consumerism," Glus says, attributing its rise primarily to long-standing health insurance rate increases. But it's getting a lot of attention now as insurers roll out transparency tools, and options such as higher deductibles, defined-contribution plans, wellness incentives, self-insurance and tiered plans are increasingly prominent.
"Employers are saying, 'To handle my bills and the rising cost every year, I'm going to go to a defined-contribution platform and let my employees decide,'" Vassilaros says.
That requires more consumer education and involvement, and Vassilaros sees that as a good thing: "I think the more people know about and understand their insurance and how health care works, on an individual level, the better it is."
But, he says, it can tend to diminish the safety net aspect of employer-provided coverage, particularly as it relates to calling the HR department for insurance answers.
Aji Abraham, senior vice president of business development for Susquehanna Township-based nonprofit insurer Capital BlueCross, also says he sees a continuous progression in the evolution of health insurance to become more reliant on insurers and brokers to explain things.
"It's not necessarily because their HR departments don't want to do it or can't do it, but because health care and health insurance has gotten so much more complicated over the last five to 10 years, and most HR departments, except in the large companies, have either shrunk or been outsourced," Abraham says.
Insurers have, in turn, been reaching out to consumers through a variety of means, from plan tools to workplace meetings to online educational materials to physical stores where people can walk in and ask questions.
That the shift from employer to insurer explaining is happening doesn't mean anyone knows exactly how it will work, especially with the pressure of health care reform thrown in the mix. But Vassilaros says what happened the first day Oregon opened its health care reform and marketplace call center is instructive.
"It got 900 calls the first day," he says. "Take that and extrapolate how many of those calls would go to the carrier, the employers — and that's only the people who knew about the call center."
In other words, he said, it's going to be a big job.
Here's when some key aspects of health care reform will hit.
Oct. 1, 2013: Marketplace opens, enrollment begins and businesses must notify employees of the marketplace existence.
Jan. 1, 2014: Individual mandate and marketplace coverage begin.
March 31, 2014: Marketplace open enrollment ends.
2015: Employer mandate begins.