Here's a newsflash: The Patient Protection and Affordable CareAct is changing the way health insurance is bought, sold anddelivered in this country. This year, major provisions take effect,and by 2014, employers must be prepared to fully participate in thenew law.

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Although benefits brokers alreadyhave been working with clients to help answer questions and advisethem on the “pay or play” provision, they'll be called upon to doeven more in the coming weeks. 

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Brokers, for example, should be prepared to help employers thinkthrough their benefits strategies more broadly and provide thetools and advice they'll need to reassess their total benefitspackages. With annual enrollments—usually held in the fall—gettingcloser, here are some issues that brokers might want to stayabreast of as the law continues to unfold.

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Meeting therequirements  

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Because of the new health care exchanges, employees now will beable to choose between an employer-provided health care plan—if oneis offered—or a qualified health plan they buy themselves outsideof work in the individual market. Enrollment for the newmarketplaces will begin this October, with coverage beginningJanuary 2014.

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Because the law requires employers to tell their employees byOct. 1 in writing about the new exchanges and how they relate totheir workplace benefits, brokers should be prepared to work withtheir clients to help workers understand the provisions of plansthey are considering. They also should help employers ensure thehealth care coverage they provide is both adequate—providingessential health benefits—and affordable so they can avoid possiblepenalties.

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Brokers play a critical role in this year's enrollment. Gettinga plan administrator or CEO's buy-in is the first step. Becauseemployees now have a choice of health plans, participation ratesfor employer-sponsored medical coverage might vary from previousyears.

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Some employees might decide paying the penalty is less expensivethan buying coverage − and might drop or decline to enroll inemployer plans. Some who've declined employer coverage in the pastmight decide to sign up to comply with the mandate. Brokers need tohelp employers prepare for these unexpected higher or lowerenrollments.

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Another key objective for brokers will be helping to educateemployees both before and during enrollment. Developing a scriptthat informs employees about the new state insurance marketplacesand available subsidies will go a long way in helping workers makebetter-educated health care decisions. Employees also should bemade aware that they might be eligible for a tax credit andcost-sharing reduction if they buy coverage through an exchange,but that they might not receive any employer contribution towardtheir premium, or any related tax advantage.

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The biggest task for brokers, however, will behelping employers understand the impact of health care reform onthe benefits plans they offer going forward.

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The reality is that the cost sharing trend already evident willcontinue to shift to employees. Today, the typical corporatemedical plan pays about 80 percent of an employee's annual costs,according to Truven Health Analytics.

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In the state exchanges, however, the government will permitplans with an actuarial value of 60 percent or more to beoffered.

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If employers begin moving their plans toward similar levels,cost-sharing will shift even more significantly. In fact, a recentsurvey from Deloitte found that 69 percent of employers anticipateincreasing employee deductibles and co-payments in the next threeto five years, while 68 percent anticipate increasing employeepremium contributions and 52 percent anticipate introducing highdeductible/consumer-driven health plans over the same timeperiod.

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Facing the new reality

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As employees shoulder an unprecedented share of health-coveragerisk—and as medical insurance becomes available outside ofwork—other workplace benefits are becoming more important. Forexample, the shift in cost sharing might leave employees morevulnerable to the high costs of an unexpected injury or illness, sofinancial protection benefits will become more essential thanever.

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In fact, more and more personal bankruptcies are due to medicalbills. Statistics show that greater than 60 percent of thoseindividuals filing for bankruptcy do so because of medical bills.Most of these people are well-educated homeowners from the middleclass.

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What's more troubling is that although three-quarters of thepeople with a medically-related bankruptcy had health insurance,they couldn't afford the high deductibles, co-pays or out-of-pocketcosts, according to the American Journal of Medicine.

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Employers will now have the opportunity—and responsibility—toaddress the financial risks their employees face in this newenvironment, from life-altering events such as death, long-termdisability and critical illness to significant events such asshort-term disability to common events that include dentalexpenses. Addressing these risks means employees need to have awhole financial protection package available to them. But how canemployers afford to offer a complete, well-rounded benefits packagethat offers protection for whatever life brings?

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That's where advisors come in—they should be out in front askingtheir clients what coverages they plan to offer to help protectemployees, and then presenting benefits options to consider. Oneeffective way employers can offer a full package is throughworksite benefits.

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Once considered optional, these coverages are now a necessarypart of an employer's offerings. These valuable benefits can beoffered through several funding options: employer-paid, shared, oremployee-paid, which gives employees access to additional financialprotection with little to no effect on an employer's bottomline.

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Employee education

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A major responsibility will be educating employees about howgroup and voluntary benefits such as disability, life,hospitalization, accident and critical illness insurance can helpprotect them and their families against the new financialresponsibilities they might be asked to shoulder by filling thegaps created by high deductibles, co-pays and co-insurance.

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Brokers should be prepared to help their clients offerdisability and voluntary plans at enrollment. Additionally,advisors can play a key role in helping employees understand theneed for coverage before enrollment.

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Because coming changes in health care will requirebetter-educated benefits consumers, employers−with the help oftheir brokers—must clearly and effectively communicate benefitsoptions and their value to employees.

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If employees don't understand the benefits they're offered, theymight have difficulty choosing those most relevant to their age andstage of life. But when employees understand their benefits, thepayoff can be powerful. In fact, Unum research shows that employeeswho understand their benefits are more loyal to their employers,have higher levels of job satisfaction, and feel employers careabout their well-being.

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