ACA In Play

Using Voluntary Benefits to Maintain Robust Coverage

 Avoid the “Cadillac Tax”

The report of findings from the SHRM/EBRI 2014 Health Benefits Survey reveals that, at present, no option dominates as the primary planned action to avoid the Cadillac Tax, and many plan sponsors (29.4 percent) do not yet know what they will do to avoid it.

About 17 percent said they plan to change plans, 10.6 percent said they plan to reduce coverage, and 9.7 percent said they plan to increase employee contributions. Only 4.7 percent said they plan to introduce a high-deductible health plan (HDHP), and only 3.5 percent said they plan to introduce a private health insurance exchange.

About 4.7 percent said they plan to do nothing to avoid the Cadillac tax. Overall, 29.4 percent did not yet know what they plan to do to avoid the tax. In response, Steve Adams, CEO of Navera, says, “The Cadillac tax may prevent employers from offering ‘rich’ plans; i.e., those that exceed the cap on benefits coverage put in place by the Affordable Care Act (ACA)."

Voluntary enhances core plans

One way for employers to ensure comprehensive coverage without triggering the Cadillac tax is by offering a robust package of voluntary benefits in conjunction with their core medical plans. Voluntary plans do not fall within the ACA’s guidelines, and they enable employers to offer ‘rich’ coverage and lower-premium medical plans. Comprehensive coverage goes a long way toward retaining and attracting top talent—provided employees come away from the enrollment process feeling confident about their decisions.

The Cadillac tax may prevent employers from offering ‘rich’ plans

“The challenge, however, is that many employees are not familiar with voluntary benefits and how they fill gaps in benefits coverage in their healthcare plans. Nor do they understand how a healthcare plan, for example a high-deductible health plan, in conjunction with a voluntary benefit, such as Critical Illness or Hospital Indemnity, can be a better alternative than a more expensive healthcare plan," Adams said.

For employees to come away from enrollment feeling confident about their decisions, they need to have the information necessary to understand what each benefit covers, why others like themselves select a particular benefit, and whether the benefit is right for them based on their personal financial and wellness goals.

Specifically, they need a ‘portfolio approach’ to enrollment that enables them and their families to see how the benefits they select will work together—much like an investment portfolio—to provide them with the most complete and cost-effective coverage.”


About Navera
Navera is a leading provider of a cloud-based benefits engagement service that enables consumers to select the healthcare and voluntary benefits that most closely match their needs. Headquartered in San Francisco, Navera takes a portfolio approach to benefits enrollment and provides users with an engaging and personalized consumer experience that provides a better understanding of benefit options and how they work together to provide the most complete and cost-effective coverage. Consumers are able to make confident, well-informed decisions while enjoying an informative and entertaining enrollment process. To learn more about Navera and the new 2014 Fall Release, please visit