Every year, as the weather grows colder and the nights longer, HR and employee benefits professionals begin to look over their shoulders in fear. But it’s not the Halloween or Winter seasons these professionals are afraid of; it’s open enrollment season. With each fourth quarter comes the beginning of the open enrollment season.
And as with any aspect of employee benefits, you must be sure to you’re keeping up with all the latest industry news and changes. In this article, we’ll detail 20 emerging open enrollment trends your company should be aware of for the 2020 coverage year.
20 Open Enrollment Trends for 2020
1. Cost Increases
Employers should expect the total cost of health coverage for employees and their dependents to increase by 5 percent in 2020. This increase would boost the average cost of healthcare, including premiums and out-of-pocket costs, to $15,375. Most large employers are expected to continue to cover around 70 percent of these costs, or an average of $10,763. These figures leave employees responsible for an average of $4,612.
2. More Plan Choices
Over the past several years, many employers have reduced the number of plan choices they offer employees. Instead of choice, many employers have pushed their staff into high-deductible health plans (HDHP) to increase employees’ share of the cost of care. Last year, 39 percent of employers offered only HDHPs.
This dearth of plan options should abate in 2020. Next year, only an estimated 25 percent of employers will offer an HDHP as their sole option. Employers, usually at the behest of their staff, are reintroducing additional health plan options. These employers most often are adding a preferred provider organization (PPO) in addition to an HDHP.
3. Virtual Care
Virtual care services are a cost-containment solution many employers are increasingly utilizing to reduce the cost of healthcare. The number one most utilized virtual care service is telemedicine. A 2018 survey of large employers found, 96 percent offer telemedicine services to their employees. But in 2020, many employers are adding additional virtual care services.
According to SHRM, 82 percent of employers will provide mental health services to employees virtually. Similarly, 60 percent will provide virtual weight management programs. Though, these aren’t the only virtual healthcare tools you can use to offset the high costs of healthcare. Digital tools for musculoskeletal care, prenatal care and coaching, sleep, diabetes, and cardiac care management also exist and are expected to grow in use in the future.
4. Healthcare Decision Support Tools
More than 3 in 4 large employers (78 percent) plan on offering medical-decision support tools in 2020. Medical-decision support tools allow medical specialists to evaluate the appropriateness of a diagnosis based on a patient’s submitted records. These tools also provide second-opinion services to advise whether a less invasive, alternative treatment is available. And many employers are beginning to offer even more healthcare decision support tools.
Seventy-three percent of employers will offer virtual solutions to help with claims assistance. Similarly, almost 60 percent will provide full-service, high-touch medical concierge programs. These services help employees navigate the healthcare system and simplify the consumer experience.
5. Mental Health Parity
If your employee benefits package for 2020 offers mental health coverage, you’ll want to double-check your coverage meets the federal government’s Mental Health Parity and Addiction Equity Act. These acts have seen increased scrutiny under the country’s current opioid epidemic. Parity compliance, for some employers, requires knowledge of federal, state, and local laws.
6. Preventive Care
The federal government recently updated guidance on preventive care services for skin cancer, osteoporosis, cervical cancer, obesity, unhealthy alcohol use, and prenatal depression. Modify all non-grandfathered plans and related plan documents to reflect the latest recommendations and guidance on preventive care from the U.S. Preventive Services Task Force, the Health Resources and Services Administration, the Centers for Disease Control, and the Affordable Care Act (ACA).
7. Return of the ACA Premium Tax
This premium tax, around 4 percent, was under Congressional moratorium for 2019, but returns in 2020. So, fully insured medical, dental, and vision renewals for 2020 will be about 4 percent higher than they would have otherwise been. Note, this tax doesn’t apply to most self-funded contracts, including level-funded arrangements. So, if your plans are currently fully insured, now may be a good time to re-evaluate the pricing and potential of self-funded plans.
8. ACA Compliance
The ACA is currently being challenged in court, but until there’s a new development, employers need to monitor the news while remaining compliant. For 2020, employers with 50 or more full-time employees are again required to abide by the Employer Mandate. This mandate means any employer with 50 or more full-time equivalent employees must offer affordable coverage to 95 percent of their full-timers or be subject to an IRS penalty. If you do receive an IRS penalty notification letter, you’ll have 30 days to respond. Employers should evaluate the adequacy of their health benefits records now so that you can respond in a timely manner.
9. New Prescription Drug Coupon Regulations
There are new prescription drug coupon regulations that go into effect when plans renew for 2020. Health plans can now only prevent coupons from discounting plan accumulators (e.g., deductible, out-of-pocket maximum) if there’s a ‘medically advisable’ generic equivalent. If your plan is fully insured, ask what actions your insurer is taking. If your plan is self-funded, ask your advisor what your options are.
10. New HSA Limits
All employers need to know the new HSA and HDHP limits the IRS released this past June for the 2020 plan year. These contribution limits are as follows:
- HSA Contribution Limits: $3,550 for individuals; $7,100 for families; those age 55+ can still contribute an additional $1,000
- HDHP Minimum Deductibles: $1,400 for individuals; $2,800 for families
- HDHP Out-of-Pocket Limits: $6,900 for individuals; $13,800 for families
11. New HRA Rules
The Trump administration recently unveiled its final HRA rule, which will take effect on January 1, 2020. Now, through this new rule, companies of all sizes can offer “individual coverage HRAs” of up to $1,800 per year. These HRAs give an alternative to those who may not be able to afford their employer’s health premiums.
If you’re considering adding this new type of HRA, decide which employees you’ll offer this plan to. Employers can only offer the new HRA to different “classes” of employees, such as full-time, part-time, salaried, or non-salaried, temps, etc., to not discriminate against any worker.
The “class” size you need to achieve is based on the number of employees offered the plan. For example, if a firm has fewer than 100 employees, the minimum class size is 10. For 100 – 2000 employees, the minimum class size is equal to 10 percent of your total number of employees.
12. Still No Individual Mandate
The ACA’s federal individual mandate penalty has been $0 since the beginning of 2019. This lack of penalty will continue in 2020. Those who are uninsured in 2019 and beyond will not face a penalty unless they’re in a state that imposes its own individual mandate. But you should be sure to educate your staff about the potential downsides to going without healthcare coverage.
13. HIPAA Security
While preparing for your 2020 open enrollment, make sure to double-check your plans HIPAA security with your provider. Recent security breaches to HIPAA protected data may warrant increasing security and risk-management measures for this protected information. Additionally, state laws may impact the administration of your health and wellness programs. So, be sure to check how your state’s laws affect your handling of protected health information.
14. Growth of Mental Health Benefits
Over the past few years, employers have looking to reduce the stigma surrounding mental health conditions and treatment. According to SHRM, around 50 percent of large employers will conduct such a campaign next year. Additionally, more employers will offer:
- Online resources for mental health (69 percent)
- Manager training to help recognize mental health issues (47 percent)
- Onsite mental health counselors (33 percent)
- Online behavioral therapy for mental health issues (28 percent)
15. Unintentionally Disqualified Participant HSAs
Unfortunately, it’s easy for employers to inadvertently disqualify an employee from utilizing a health savings account (HSA). To avoid an unintentional disqualification, ensure deductibles are equal to or greater than the 2020 IRS HSA statutory maximums. Remember, the HSA maximum out-of-pocket limits aren’t the same as the ACA’s out-of-pocket maximum limits.
16. Wellness Incentives
Employers with a wellness program that includes a health screening should evaluate the need for plan design changes because of the EEOC’s incentive limit rules. Employers need to properly structure their wellness programs to ensure compliance with the reversal of 2016’s EEOC wellness plan incentive rule.
The most conservative approach is for employers to remove all incentives associated with wellness programs that are subject to the ADA or GINA. These include programs with health risk assessments, biometric or lab tests, and nicotine use tests.
17. Increased Focus on Quality
For 2020, employers everywhere are increasingly focused on not just the cost of healthcare, but the quality. Many employers are pushing the use of centers of excellence (COE) to get employees high-quality, cost-effective care. Approximately 27 percent of large employers will expand their COE offerings to address additional conditions or procedures.
Similarly, almost half of large employers will have COEs in place in 2020 for musculoskeletal conditions. Additionally, a growing number of employers are utilizing COE models for fertility and maternity programs. In fact, many employers are expanding incentives to increase employee use of COEs.
18. Group Life Compliance
There’s a widespread belief that the first $50,000 in group term life insurance benefits is always non-taxable. But that is only true if the plan passes the Section 79 nondiscrimination rules. If you have two or more classes for life insurance, the benefit is probably discriminatory. If you fail this testing, it simply means you’ll likely need to tax your Section 79-defined ‘key employees’ on the entire benefit, not just the amount in excess of $50,000.
Additionally, determine if your employer-paid benefit maximum for group life exceeds the guaranteed issue amount. If it does, certain highly compensated employees must undergo and pass medical underwriting to secure the full employer-paid benefit. But, as benefits managers/HR professional’s turnover, this nuance can be lost, and new hires aren’t told they need to go through the underwriting process.
So, for example, an employee may believe he or she has $500,000 in benefit, while he or she contractually only has $300,000. This scenario would result in the employer self-funding the delta – which in this example is $200,000.
19. Don’t Expect the Federal Government to Promote Open Enrollment
If you have employees who either can’t afford or don’t qualify for your healthcare coverage, they may look to the ACA exchange marketplace for their health insurance needs. But these employees shouldn’t expect the federal government to promote open enrollment for 2020. In 2017 the Trump Administration announced severe cuts for exchange marketing and enrollment assistance. Then, last year, the administration again slashed funding to the Navigator programs by more than $25 million.
Make sure these employees know where, when, and how to enroll in health coverage if they’re doing so through the exchange marketplace. Also, be sure that these employees understand state-based exchanges, and consumer advocates will continue to conduct outreach and enrollment assistance throughout the country.
20. Double Check Your Wrap Document and Wrap Summary Plan Description
If you use these documents, it can be easy to forget to make an annual amendment to match plan changes. Similarly, it can be easy to forget how much detail makes up these documents. An example of this, per Employee Benefits Adviser, if your vision vendor changes or even their address changes, an amendment to these documents is likely in order. So, double-check your SPD and other plan documents to ensure they’ve been amended to reflect any plan changes.
The only guarantee in the employee benefits industry is that industry is guaranteed to change. Follow The Olson Group for all the latest in industry news and analysis. And use this article to make sure your organization is aware of these 20 open enrollment trends to avoid the potential scares of this open enrollment season.
This article marks Part 1 of our 2020 Open Enrollment Series. Check back the next two weeks for more in-depth discussions of everything you need to know for open enrollment in 2020.