Higher Deductible Plans Are the New Black and Speaking of Enrollment . . .

With 2014 wrapping up, attention is quickly turning to the benefits enrollment period for 2015 including enrollment for health insurance.  A new survey out by Towers Watson, the National Business Group on Health, and PriceWaterhouseCoopers provides a glimpse into how employers are thinking about these benefits.  One conclusion is that, for health insurance, higher deductible plans are the new black. Since the passage of the Affordable Care Act (ACA), one of the big questions is what, if any, impact its passage would have on employer-provided health care benefits.  At least a partial answer to this question is that most employers are expecting to continue to provide coverage.  Most large employers are expecting to pay between 4 and 5 percent more in 2015 for employee healthcare benefits after taking into account any adjustments to those plans.  However, a bigger trend emerged from the survey. The survey noted that many employers are concerned about the excise tax required by the ACA for so-called “Cadillac Plans.”  The ACA provides for tax-free caps on benefits of $10,200 for individuals and $27,500 for families.  Starting in 2018, there will be a 40 percent excise tax on any difference between the cost of the benefits and these caps.  Anticipating this, approximately 81 percent of those surveyed said they “plan to moderately or significantly alter health-care benefits to reduce costs.”  This includes turning to higher deductible plans.  81 percent of employers that offer health insurance offer high deductible plans with accompanying health savings accounts. Whether this is a direct result of the ACA or if this is a result of an increase in health care costs over the year is unclear. On a related note, on September 16, 2014, the Government Accountability Office (“GAO”) released a report stating that Healthcare.gov, while in a better position than it was even at the beginning of 2014, still has a number of security and privacy issues which could be exploited by non-authorized users. In its report, the GAO made several technical recommendations for improving the security of the website.    

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