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Workplace open enrollment for 2015 health plans: Trends, costs and laws

When you choose your health insurance plan for 2015 during your employer's next open enrollment period, you may find some things have changed. And you may not like it.

Here are five trends among employers that are “early adopters” of workplace health insurance ideas, along with other important information to help you navigate open enrollment this year.

Private health insurance exchanges for employers

Some midsize and large companies are dumping their workplace plans and shifting employees into private health insurance exchanges. These online systems are separate from the state- and federally run health insurance marketplaces.

Under this system, your employer determines how much it will contribute toward your health coverage. Then you take that money and go online to the employer’s private exchange to shop for the plan that best suits your family's needs.

Average group health insurance premiums

Are you paying more than the average
for group health insurance?

Workplace plan type

Worker contribution

Employer contribution

PPO - single

$1,134

$5,082

PPO - family

$4,877

$12,456

POS - single

$984

$5,182

POS - family

$4,849

$11,188

HDHP w/savings option - single

$905

$4,394

HDHP w/savings option - family

$4,385

$11,016

HMO - single

$1,182

$5,041

HMO - family

$5,254

$12,129

Averages for employee cost-sharing

Average annual deductible: $1,217

Average copayments for in-network doctor visits: $24 for primary care and $36 for specialists.

Average copayments for prescription drugs: $11 for generics, $31 for preferred brands, $53 for non-preferred brands and $83 for specialty drugs.

Source: "2014 Employer Health Benefits Survey" by the Kaiser Family Foundation/Health Research & Educational Trust.

Private exchanges should give employees more choice, says Jim Winkler, chief innovation officer for health at Aon Hewitt, a benefits consulting company that started a private exchange for its employees in 2012 and has since opened it to outside companies. The move to private exchanges is similar to the shift to 401(k) contributions for retirement versus defined benefit plans. The employer still provides health care dollars but puts more responsibility in the hands of its employees, Winkler says. Private exchanges can offer insurance plans from one carrier or multiple carriers. It's up to the employer and the private exchange it selects.

Winkler believes that in most cases private exchanges will give employees more choices.

Decision-support tools for workers

In the past, employees were given little guidance about choosing a health plan at open enrollment time, says Jeffrey C. Hadden, a partner with LHD Benefit Advisors in Indianapolis.

Maybe you were given a booklet that described the different plans, but often that was it. Now employers are taking advantage of technology to help employees with their selections. Your employer might direct you to an online tool where you answer questions about yourself and your family members and everyone's health.

"The questions can be general to very detailed," Hadden says. The answers help you predict what your health care expenses might be for the coming year and whether you're better off choosing a health plan that costs more but has lower copays and co-insurance.

Financial incentives for healthy behavior

Christopher Ryan, vice president at employee-benefits firm ADP, expects you will not only see more financial incentives for healthy behaviors such as exercising regularly and quitting smoking but also that those incentives will be greater than in the past.

For example, your employer might have offered you $100 toward your health savings account if you completed a biometric screening. A biometric screening is an assessment of your overall health. It takes into account your blood pressure, weight, waist circumference, good and bad cholesterol levels, and blood sugar. This year, the incentive could be as much as $200, Ryan says. And the following year it could be as much as $500.

Group health insurance laws

Does your employer have to offer coverage?

Beginning in 2015, employers with 50 or more employees, including for-profit, non-profit and government employers, are generally required to offer health insurance to each full-time employee or pay a penalty, called an “employer responsibility provision.”

For employers with less than 50 employees, there is no penalty for not offering a health plan. The IRS notes that the vast majority of businesses are below the 50-employee threshold.

 The health plan offered must meet the “minimum essential coverage” requirement, defined as "Bronze level," where the plan will pays at least 60 percent of the cost of each health service or treatment.

The Affordable Care Act requires employers with more than 200 employees to automatically enroll employees into health insurance plans offered by the employer.  However, workers can opt-out of enrollment in the coverage.

Are you a "full-time employee"?

The IRS defines a full-time employee as someone who works an average of at least 30 hours a week. Here are more details from the IRS.

Do you have to buy the workplace health plan?

While the Affordable Care Act mandates that almost all Americans have health insurance, there’s no law that says you have to buy your employer’s plan. There are a few exceptions: You’re stuck with the workplace health plan if your employers pays 100 percent of the plan premium, or if you agreed to buy the workplace plan through an employment agreement or union contract.

In most cases, though, you can choose to strike out on your own to buy health insurance. You can buy an individual or family plan on your own through your state’s health insurance marketplace, directly from a health insurance company, through a health insurance agent, or through a website that aggregates quotes from multiple carriers.

Ryan expects incentives will increase because, under the Affordable Care Act, employers can use up to 30 percent of the total value of premiums to get their employees to focus on key health and preventive activities. "Before the ACA, it was limited to 20 percent," he says.

Also, he says, employers have had time to see how past incentives have worked. "Employers are getting much better at understanding which incentives work with their employees and how to design them to get more of their employees to take advantage of them," he says.

Requiring an employee to complete a task to receive an incentive or be eligible for additional benefits is known in the industry as "gating."

Hadden has found that more employers are requiring employees to participate in healthy activities in order to get "bonuses" toward their health care expenses.

"In the past, they might have just given them out," he says. "But now they want you to get your annual physical or track your physical activity for 30 days before they add money to your health savings account."

Penalties for unhealthy habits

Just as your employer may reward you for good behavior, it may also try to discourage you from unhealthy behaviors such as smoking by imposing increased premiums or surcharges. If you work for a company that has more than 200 employees, thanks to a new rule by the Labor, Treasury and Health and Human Services departments that took effect last year, your employer can charge you up to an extra 50 percent of your health insurance premium if you smoke.

However, your employer must also provide you with a "reasonable alternative" to the penalty, such as the option of participating in a smoking cessation program before imposing the penalty.

Reference based pricing

A reference-based pricing plan requires you to find and use a provider who accepts a fixed amount for certain procedures. This could mean you’re limited to a small group of providers.

If you choose a provider that charges more than your insurance pays, you pay the difference. If you choose a provider that charges less than what your insurance is willing to reimburse you, you pay nothing.

An AON Hewitt survey of nearly 800 large and midsize employers in the U.S. found that only 8 percent limited reimbursements to a set dollar amount for certain medical services. However, the survey found that two-thirds (62 percent) were considering adopting reference-based pricing in the future.

Winkler says this type of approach has been common for prescription drug coverage for some time. You pay a set amount for generics and a set amount for brand names. Employers realized that they could apply this same model to medical treatments, he says.

The larger your employer, the more likely you are to see these changes at open enrollment. Like most trends in group health insurance, they start with the larger employers and eventually work their way down to smaller employers, too.

Workplace health insurance trends

Other things your employer might be up to

Kicking spouses off health plans

Some employers won’t allow you to add your spouse as a dependent if your spouse has access to their own plan at work.

Wellness programs

Employers may offer incentives for actions such as taking a health-assessment screening. Whether incentives work is questionable. Here are some dirty little secrets of wellness programs.

Tiered networks

Under some plans, employees get incentives for using providers in a certain tier of the network. Generally these providers are judged to be lower cost or offer better care.

Coverage for retail-based clinics

Most employer-based plans have coverage for care at clinics within pharmacies and grocery stores.

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