Employers aiming to control rising health insurance costs often consider making design changes to their current employee benefit plan. Usually, this would be a consideration at the beginning of a plan year, and shared with employees during an open enrollment period, preceding the start of the plan year. However, there are opportunities to make mid-year changes to an employee benefit plan.
Q: Can employers make changes mid-year?
A: Yes, however, there may be restrictions to those changes, so check your current plan for any restrictions or penalties. Even if your carrier permits mid-year changes without penalty, consider the following before making a final decision:
- What is the main reason for changing plans mid-year?
- What are the options for modifying your existing plan?
- Can you make changes to employee contributions mid-year?
- Can an employer cancel a plan mid-year?
Q: What is the main reason for changing plans mid-year?
A: Typically, an employer makes this decision to maintain access to providers or to contain costs.
Q: What happens when you lose access to doctors and hospitals that were in your network?
A: Occasionally, when an insurer and a doctor/hospital are unable to reach an agreement on a contract, the network contract ends. This means that your employees may have to find new doctors, or pay out-of-network rates to continue seeing their doctor or using familiar facilities. Employers may want to consider switching plans if their employees’ services and treatments will be disrupted by a contract dispute or cancellation. With PHP, you’ll get to keep credit for deductibles and out-of-pocket maximum expenses which have been met for the current plan year under your prior health plan.
Q: What are the options for modifying your existing plan to control costs?
A: The following plan design changes should be considered when an employer is looking to control rising costs:
- Increase employee cost-sharing (that is, deductibles, copays and out-of-pocket maximums).
- Create a new plan design that places more financial responsibility on employees (for example, a high deductible health plan).
- Implement a wellness program that motivates employees to take steps toward improving their health and well-being.
- Implement a spousal carve-out or surcharge for spouses who are eligible for other health coverage, such as coverage through the spouse’s employer.
Q: Can employers make changes to employee contributions mid-year?
A: Yes; however, there may be restrictions to those changes. Employers should consider the following steps before increasing employee contributions:
- Review how the increase in employee contributions may impact your potential liability under the Affordable Care Act’s employer shared responsibility rules, if applicable to you.
- Analyze whether the increase in employee contributions may impact your ability to satisfy the carrier’s minimum participation requirements, if applicable to you.
- Determine whether your plan will allow employees to change their benefit elections due to midyear contribution increase.
Q: Can employers add a waiting period?
A: If your health plan does not include a waiting period before employees can participate in the plan, you may wish to consider adding this plan design feature. Keep in mind that, as a general rule, the Affordable Care Act prohibits waiting periods that exceed 90 days.
Q: Can employers cancel a health insurance plan mid-year?
A: Yes; however, there may be restrictions to those changes. If you are thinking about pursuing this avenue, consider the following:
- Confirm all termination provisions under your current plan document and insurance contract.
- Decide what formal company action is needed to terminate the plan.
- As a courtesy, notify employees in writing, 60-days prior to the plan termination.
Q: How do I make the switch?
A: We know keeping your employees healthy and on the job is important to your company’s success. A large part of employee satisfaction is employee benefits that are valued and trusted. That’s why PHP offers access to all large regional hospital systems and associated physician groups—Parkview, Lutheran, and IU Health; to assure employers and their employees have access to the care they prefer.
If you want to consider switching employee benefit carriers’ mid-year, PHP will walk you through the process. And remember, your employees will get to keep credit for deductibles and out-of-pocket maximum expenses which have already been met. We make switching easy.
Talk to your benefits advisor or PHP today by calling 260-421-4500.
If you want to see if a doctor or healthcare facility is part of the PHP network, visit our website here.