It’s open enrollment season for Employer Health Plans (not to be confused with Open Enrollment for the Exchanges). Most medium to large businesses have open enrollment this time of year and employees have to make a decision about their plan choices. The trend lately has been for employers to cut back on their contribution towards both employee and dependent premium. Many employers don’t pay anything towards dependent coverage.
The Affordable Care Act (ACA) doesn’t address the high costs of dependent coverage. So, many people are forced to shop for better coverage elsewhere. I’ve had many clients opt for this strategy and have saved upwards of 50%, especially if the dependents are healthy and don’t mind a higher deductible plan. Even if selecting a comparable plan, the savings can be 25% or more.
The ACA will not allow people to qualify for subsidies if their spouse has affordable coverage offered through their employer. I’ve had to share this news with several people who who were hopeful they would qualify for a subsidized plan on Georgia’s federally facilitated exchange.
In the past, the strategy of dependents “opting out” of a group plan only worked well for healthy people. These healthy folks (with no chronic health conditions or expensive medications) get the best rates in the personal plans market. This is especially true now! There is a window of time – up until Dec. 15 — for people to lock into the lower-cost, non-ACA compliant plans until the end of 2014. These savings can be huge!
For those people who have pre-existing conditions, they can now apply for coverage and secure guaranteed-issue ACA compliant plans with effective dates of January 1, 2014. The costs will be higher since the plans cover the 10 Essential Health Benefits and cover pre-existing conditions, but this may still be a better option in many cases.
It is certainly worth taking the time to shop and see if better plans and savings are available. If you hear someone talk about the huge rate increase or reduced benefits offered through their employer, let them know about this strategy.
Greg Sanders Peachtree Insurance Advisors 678-236-1600