New data from New Highroads Compliance shows employers are still facing challenges with the Affordable Care Act (ACA) communication requirements, and compliance-related challenges. And with the increased communication requirements stemming from the healthcare law, organizations have a murky picture of the aggregate costs of writing, producing and distributing documents.

New Highroads predicts that the continued challenge of compliance could be the “contributing factor” to the decision of some employers to move their employees and or retirees to a private exchange. Nearly 88 percent of survey respondents indicated that they’ve mulled moving to a private exchange in the next five years. However, New Highlands’ research shows that private exchanges neither will not eliminate plan sponsor responsibly for compliance.

“What we are seeing is the continued struggle of employers to comply with ACA requirements, yet wisely manage resources and costs. It is a challenge that will only increase as new regulations under the ACA take effect, current safe harbors and postponed effective dates expire, and enforcement of the regulations begin in earnest,” said Kim Buckey, principal, compliance communication services,

New Highroads has served as the benefits systems of record for many of the largest organizations in the country for the last 15 years. Buckey cited for example, that plan sponsors had had a two-year “best efforts” safe harbor for complying with SBC regulations around format and length.

“Employers have been waiting for the other shoe to drop … and this may be the year,” added Buckey.

Highroads surveyed mid-to-large companies representing 5 million total plan participants about their compliance and governance operations including their approach to producing, updating and distributing Summary Plan Descriptions (SPDs), and the steps they are taking to generate the Summary of Benefits and Coverage (SBC) and other required notices under the ACA.

Highlights from the survey include:

  • Despite the risks associated with non-compliance, only two-thirds of respondents have a formal compliance strategy and, while 69 percent have a dedicated governance and/or compliance team, 31 percent do not.
  • Fewer employers planned to update their SPDs this year, with just 16 percent planning a rewrite for readability (down 50 percent) and 67 percent planning content updates.
  • About a quarter (26 percent) of respondents update and distribute SPDs to their active employees every year, but by far summaries of material modification (SMMs, 67 percent) or notices in annual enrollment material (46 percent) were the preferred methods for alerting participants to new plan changes.
  • More employers (45 percent) are using or planning to use social media (such as Twitter or Facebook) to communicate with employees and retirees.
  • The biggest challenges facing employers when it comes to producing SPDs are having sufficient resources and managing the review process. And twice as many respondents as last year indicated “writing” was a challenge.
  • More employers are producing ACA-required materials in-house than in previous years. Forty percent of respondents generated SBCs themselves this year (up from just 18 percent last year) and 68 percent planned to produce the Notice of Coverage Options in-house.

For more on the ACA, check out the following:

Employers beware: Avoiding Affordable Care Act can lead to litigation claims

New solution aids HIPAA compliance in the cloud