If you’re like most human resources practitioners, you face the annual benefits enrollment with a mixture of dread and anticipation each year. Dread for the expected price increases and anticipation for newer, less expensive and better plans that may be easier to administer and more valued by employees.

This year brings an added complication—uncertainty. With the Trump administration and Congress proposing significant changes in healthcare and tax reform and new twists being reported in the news every day, you and your employees undoubtedly have questions about what these proposals might mean for your insurance plans. New appointees to the federal regulatory agencies, such as the Occupational Safety and Health Commission, the National Labor Relations Board and the Equal Employment Opportunity Commission, to name a few, also have the potential to impact your safety and employment law risks.

Our advice? Get ahead of the game and start the planning early. Open discussions with your broker and begin to consider how to best ensure your employees get all the information they need in a format that works for them.

Be Prepared to Overcommunicate
Together with your broker and internal management teams, develop an employee communication strategy. Keeping in mind that employees are hearing and reading about health care reform, you’ll need to be prepared to help them separate the fact from the speculation. This year, anxiety could be playing a large role in your employees’ lives. In fact, a recent survey by Woman’s Day magazine found that 82 percent of respondents worry about finances, particularly the rising cost of healthcare, and 84 percent of women are concerned about the status of health care reform.

Understand the Power of a Strong Benefits Package
Properly designed, positioned, and communicated, the employee benefits package is one of the best tools in your arsenal to attract the right talent, enhance employee engagement, and retain the most valuable employees. Today’s employees expect more. In fact, according to a recent survey sponsored by Anthem Life Insurance Company, more than one in three millennial job applicants have turned down job offers with poor health insurance that didn’t meet their needs. Although millennials are the largest group in the workforce today, they are not alone in their expectations. The same survey found that 27 percent of those from other age brackets responded that they also declined job offers due to an employer’s lackluster benefits offer.

Other surveys are finding the same results relating not only with attracting new employees but also in retaining them. Employees today expect their employers to be creative, consider employee needs, make the benefits easy to use, and offer them choices to help manage their lifestyles. Besides health insurance, benefits protecting their incomes, such as disability insurance, financial planning and retirement benefits are important. In addition, consider that employees are tech savvy and expect to have online tools and calculators, along with complete communications, to assist them in making decisions regarding their insurance options.

Steps for Success
To prepare for this year’s enrollment, work with your broker early determine the best benefits packages and communications program. Make the most of marketing your benefits programs to employees by:


  1. Reviewing workforce demographics and benefits usage to get a better understanding of employees’ stages in the lifecycle. Knowing your audience and targeting benefits communications to meet those lifecycle needs makes the benefits more personal and relevant. Employees with young families, older workers preparing for retirement, empty nesters, and young singles all have distinctly different benefits needs and interests.
  2. Packaging benefits by target group and promoting messaging that speaks to that group’s needs while consistently reinforcing the overall benefits strategy and employer branding in the messaging. Different communications delivery systems may also be important to different employee groups.
  3. Starting the messaging with “why” the benefits are structured as they are and “what” the company’s overall benefits strategy is designed to accomplish for employees. Most employees are smart, so don’t sugarcoat any bad news about changes in the benefits program. This is a good time to highlight the important value of their benefits programs, promote wellness, encourage retirement savings, and incent cost-effective usage of benefits programs.
  4. Being ready to address the questions triggered by the federal and state proposals to change tax and benefits rules. Clear the misconceptions and incomplete information and focus on how the benefits package has been designed to comply with the current laws in place.
  5. Keeping the messaging straightforward. Provide clear information, checklists, and decision support tools that are easy to follow. Have the details available but keep the key messages and “what you need to do for enrollment” information central to the enrollment materials.
  6. Bringing company managers and supervisors into the discussions prior to launch. Give them a heads up regarding the upcoming benefits changes and enlist their help in the process.
  7. Tackling the “how” of the benefits communications program, including:
  8. Communications delivery methods. With the variety of mediums available, the world is your oyster. Consider electronic communication, mobile apps, webinars, in-person company meetings, text messages, direct mail home to involve the entire family, social media, or even a live hotline for questions.
  9. Enrollment methods. Will enrollment be online? Manual? Mobile? Make it as administratively simple as possible for employees. Use electronic tools if the budget allows.
  10. Establish a timeline working backwards from the date that the information must be completed then work forward to deliver the communications program.
  11. Employees need time to consider their options and allow the information to soak in. Consider sending employee prompts and reminders so that the enrollment process is completed in a timely manner.

The annual open enrollment communications opportunity is precious—you can influence how employees see benefits or cost changes, alleviate any fears about federal and state benefits or tax law changes that are still being considered by lawmakers and regulators, motivate employees to change their health or savings habits, and let employees know that management is listening, considering their feedback valuable, and responding to their needs.

If you can afford health insurance but choose not to buy it, you must have a health coverage exemption or pay a fee. (The fee is sometimes called the “penalty,” “fine,” “individual responsibility payment,” or “individual mandate.”)

The fee for not having coverage in 2015

If you don’t have coverage in 2015, you’ll pay the higher of these two amounts:

  • 2% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
  • $325 per person for the year ($162.50 per child under 18). The maximum penalty per family using this method is $975.

The fee for not having coverage in 2014

If you didn’t have coverage in 2014, you’ll pay the higher of these two amounts:

  • 1% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
  • $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

The fee in future years

If you don’t have coverage in 2016, you’ll pay the higher of these two amounts:

  • 2.5% of your yearly household income
  • $695 per person ($347.50 per child under 18)

In future years, the fee is adjusted for inflation.

How you pay the fee

You’ll pay the fee on the federal income tax return you file for the year you don’t have coverage. Most people will file their 2014 returns in early 2015 and their 2015 returns in early 2016.

Learn more about the individual shared responsibility payment from the Internal Revenue Service.

More answers

  • What if I’m uncovered for just part of the year?

    If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you’re uninsured.

    If you’re uninsured for no more than 2 months of the year, you don’t have to make a payment.

  • If I’m unemployed, do I have to pay the fee?

    It depends on your household income. If insurance is unaffordable to you based on your income, you may qualify for an exemption from the fee. Other exemptions are based on low income too. Learn more about exemptions and how to claim them.

  • How is the penalty collected?

    You’ll pay the penalty when you file the federal income tax return for the year for which you’re seeking coverage. Most people fill out their 2014 tax returns early in 2015 and their 2015 tax returns early in 2016.

  • What happens if I don’t pay the fee?

    The IRS will hold back the amount of the fee from any future tax refunds. There are no liens, levies, or criminal penalties for failing to pay the fee.

  • Are the rules the same in each state?

    Yes. The rules about paying penalties are the same whether the Marketplace is run by your state or the federal government.

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