Which Path to Pursue: HR and the PPACA
With the rollout of the Patient Protection and Affordable Care Act over the fall it was almost impossible to escape the barrage of media coverage. The initial deployment of the heathcare.gov website and its infamous revamping will live on as a “how to” for failed product launches, but there are a lot of aspects to the PPACA which HR will have to contend with.
HR leaders need to become well versed with all of the benefit options available under the plans. While some firms may be interested in downgrading the employee plan in today’s world in immediate responses on social media, there is the potential for fallout to the employer brand creating more difficult sourcing going forward. McKinsey & Company note in a 2011 survey that, “Contrary to what many employers assume, more than 85 percent of employees would remain at their jobs even if their employer stopped offering ESI (employer-sponsored insurance), although about 60 percent would expect increased compensation.” Leaders will need to weigh the costs and risks of which path they choose to follow.
Another major item firms will engage with is Public versus Private Exchanges. Firms will be able to stop short of sending all of the employees to the public exchange by participating in a private exchange. Accenture in their research define a private exchange as, “an online benefits marketplace that lets individuals shop for insurance products including health, dental, vision, life, auto and home. Typically an employer will provide a “defined contribution” (e.g., $5,000 that works like a gift card) that can be used to purchase products that best meet individuals’ needs, offering greater choice and flexibility than traditionally available.” According to Accenture, “1 in 5 Americans will purchase benefits from a health insurance exchange, yet consumers are unaware and ill prepared.” Leaders can use this option to provide for their employees and give them more direct control over their plan but will need to take the time to educate their workforce of the option.
Under the PPACA companies with 50 or more employees will need to offer healthcare coverage to all staff who work 30 hours or more. This will lead to a host of strategies for firms from restructuring how scheduling takes place to exploring any of the many options for healthcare plans. Again, each of the paths a firm chooses to follow will come with differing costs and benefits, and firms will need to be strategic as they proceed.
Join HCI this January 23, 2014 at 1pm for the webcast What You Need to Know to Understand the ACA and hear Bob Clements and Amy Kozleuchar, workforce management consultants from the Axsium Group, share strategies and real life examples for HR to understand and successfully navigate the coming changes.