Over the past several years, many private health insurance exchanges have started to spring up amid the ill-fated launch of the Affordable Care Act. Private health insurance exchanges look to create new value in the group health insurance market. The constant malfunctioning of the Small Business Health Options Program (SHOP) along with huge administrative burdens, have led business owners to look for other alternatives to employee health insurance.
For the first time since World War II employers can now break or otherwise alter their time-honored employee social contract. Subsidized insurance markets, standardized benefits, as well as the dissolution of requirements on pre-existing conditions and medical underwriting related to individual insurance products available through public ACA exchanges, may clear employers of certain considerations. This has caused some employers to exit the major medical benefits market in recent years, primarily in the small group space. We believe that like large businesses, small businesses should remain highly focused on retaining and recruiting the most skilled and competitive workforce in their respective industries. Offering less in the avenue of employee benefits ensures a loss of skill and talent. NARFA believes ALL BUSINESSES should offer programs supporting the general health and well-being of their employees. The future of the small business health insurance market lies in private exchanges, and as always, our Members’ best interests are kept at the top of our priorities.
Small and medium businesses (SMBs) are the heart of the economy, accounting for 54 percent of all U.S. sales and 66 percent of all new jobs. However, SMBs have a significant challenge compared with large corporations. Only half (54 percent) of companies with fewer than 200 employees offer traditional health benefits, compared to nearly all (98 percent) of companies with more than 200 employees. This is problematic for attracting and keeping the right talent.
Let’s take a look at the automotive industry and its contribution to the workforce:
- Over 7 million private sector jobs supported by auto manufacturers, suppliers and dealers in the United States
- $500 billion paid in annual compensation to employees supported by the automotive industry
- Every vehicle manufacturer job creates almost 7 other jobs in industries across the economy
- All direct auto industry employment creates almost 4 additional jobs in other industries across the economy
- Foreign direct investment (FDI) currently valued at $74 billion—approximately 3 percent of all FDI in the United States
- The automotive industry has collectively invested almost $46 billion expanding and retooling U.S.‐based facilities since 2010.
Knowing how important these jobs and employees are to the U.S. economy, its our job to protect them with the right employee benefit solutions and choices.
What makes private health insurance exchanges successful?
NARFA has successfully operated a private health insurance exchange for almost 10 years, and has helped hundreds of businesses improve the selection, eligibility, enrollment, management, and administration of employee benefits. Some estimates have private exchange enrollment will outpacing public exchange enrollment by 2018. We encourage you to consider several factors contributing to our success:
- Increasing administrative requirements: Employers face increasing administrative requirements each year under the Patient Protection & Affordable Care Act (PPACA), such as new minimum essential coverage reports due to the IRS (section 6055). These requirements add to an already substantial compliance workload (e.g., ERISA, HIPAA, COBRA). The NARFA private health insurance exchanges significantly reduces these issues with robust reporting and compliance services, and full administrative support to ease the burdens of your already taxed human resources department.
- Employer Mandate: The Employer Shared Responsibility Provision, more popularly known as the Employer Mandate, will compel employers to revisit their benefits strategy. Coupled with lower than expected SHOP enrollment, smaller firms in particular may increasingly consider the merits of private exchanges to deliver a simpler path to comprehensive coverage in a compliant fashion. NARFA delivers comprehensive coverage, fully compliant strategies, and a much easier enrollment process.
- Employers maintaining coverage: Many employers have not dropped coverage altogether, as some initially forecasted. In fact, most employees view health insurance as a critical employer-provided benefit, limiting some employers’ ability to drop or defund health coverage. Accenture research showed that 76 percent of consumers see health insurance as the primary or an important factor for continuing to work at their current employer. As employers seek a compelling alternative, the private exchange model of reducing costs and administrative burden emerges as a clear favorite, while maintaining best in class talent at their companies.
- Cadillac Tax: The 40 percent excise tax on high-cost plans, often termed the Cadillac Tax, will go into effect in 2018. This could affect as many as 38 percent of large employers and 17 percent of all American businesses3 if insufficient action is taken. Private health insurance exchanges will provide an ideal alternative to simultaneously migrate away from these legacy high-cost plans, and provide employees with new options to manage their health. We encourage you to contact us to find out how to buy like a large group on the NARFA Private Exchange and enjoy the savings and support of NARFA.
NARFA offers solutions designed specifically for the automotive, roads, fuel, and related industries. Programs include health insurance, vision, dental, life, fully integrated short and long term disability programs, wellness, and much more. We are enjoying our 87th year of success and have continued to protect small businesses during these uncertain times. New legislation continues to create a difficult environment for employers to maintain the coverage and benefits employees desire but NARFA remains strong and growing! Join us today.