For the longest time, most employee benefits programs have consisted of one-size-fits-all group policies for health and life insurance.
A large part of the reason why group policies have reigned supreme for so long was that they provided guaranteed coverage.
Employees had every reason to sign up for such policies since they didn’t require a medical exam or and employees didn’t have to answer any health questions to qualify.
With the advent of the ACA, individual health insurance policies are on par with group policies.
A transition from group to individual policies will have major implications for employee benefits.
Employees can choose the benefits best for them. Benefits are owned by the employee, not the employer. Benefits are fully portable. All pre-existing conditions are covered. Government subsidies reduces the cost for many Americans.
By offering individual policies, employees can pay for these benefits via direct deposits into benefits accounts rather than through payroll deductions. For employers, this has the benefit of eliminating the hassle of having to conduct monthly reconciliation reviews. Offering access to individual policies takes the employer out of the health insurance business and effectively removes them from punishing government mandates and sanctions.