Last week I wrote about the many consequences of healthcare reform based on the prognostications of medical industry observers. In this post I’ll share what I expect to happen with healthcare reform and six questions which I think employers need to start finding the answers.
Healthcare reform is so big and far reaching that no one can accurately predict the end result. The literal language of a new law is never the last word. Regulators are working hard to add meat to the bones.
Take this to the bank: your renewal and strategy meetings with plan advisors will be 50 to 80 percent different in coming years, and it will include tax, penalty, network, employee household income, essential coverage and plan viability issues you have never confronted. I believe you can count on rules making it more attractive for some employers to pay the fine and to turn a plan over to the Exchanges, and to make the single-payer option more attractive (or necessary) to the public in future years.
An example is the recently issued rule defining “Grandfathered Plans,” making it unlikely any plan can meet the standard for very long. Whether this is good or bad is less important than the effect on your own planning process. Will the Exchanges become viable alternatives accepted by employees as substitutes for legitimate, mainstream employer plans?
I believe we will eventually face bifurcated healthcare: one for most of us defined by the “essential coverage” rules and offered increasingly by Exchanges; and one for some of us defined by supplemental plans providing better access to physicians and non-baseline services.
How to Prepare
An important role for company executives is to ensure a strategy for marketplace competitiveness into the future. Longer-term thinking will be rewarded. Begin seeking answers to these questions:
1) Will employer-sponsored healthcare remain a key part of your total rewards plan into the future? What are the alternatives?
2) Is it worth the contortions to remain grandfathered if you are likely to lose that status soon?
3) Will new supplemental benefits strategies, or even wage supplements in lieu of coverage, become the differentiator?
4) If predications of a de facto single payer system come true in the medium term, what is the best transition plan for your workplace?
5) Does your size affect your decision-making?
6) Is your benefits consultant up to the challenge of teaching you and considering all options and business needs? Put them to the test now and stay informed.
Healthcare reform is one of the major themes to be covered at CAI’s 2010 Compensation and Benefits Conference on Sept. 16-17 in Raleigh. Please visit www.capital.org/compconf for additional information.