Get More from Your Healthcare Spend

spendWith research showing that the average cost of healthcare surpassed $11,000 per employee in 2015, stretching every healthcare dollar is a must. Since self-funding is the foundation from which so many cost control strategies emerge, we encourage you to take this step if you haven’t already done so.

Understand the Needs of Your Group
Since every employer group is unique, it’s imperative that you look closely at demographics, prior claims and medical conditions. The availability of meaningful data is one of the biggest advantages of a self-funded plan, and key to making sure that those with chronic conditions such as diabetes or hypertension are receiving the treatment and attention they need. If your administrator isn’t helping in this critical area, you have the wrong administrator!

Coordination Matters
Self-funded health plans involve several parts that need to be working together. If you think healthcare is complex, put yourself in the shoes of your members and their families. Programs such as utilization review, hospital pre-certification, disease management and healthcare coaching can go a long way in managing costs. Services like patient advocacy and telemedicine can help members get the care they need in an efficient setting. For example, while office visits cost about $130, a telemedicine visit can be equally effective at a cost of about $40. With so many variables available today, it’s easy to see why customer service and care coordination are as important to your bottom line as they are to your employees.

Education and Wellness
Once a self-funded plan design and professional administration are in place, employee education and wellness integration must follow. Few factors influence healthcare costs more than lifestyle choices and the need to make informed buying decisions. And whether it involves understanding benefits or choosing a high quality, efficient provider, studies show that members need more support. To help in this area, many TPAs are integrating online access to comparative data on costs and providers.

When you consider that we can only manage what we can measure, delivering meaningful information to members, when they need to make a healthcare decision, should result in happier, healthier employees and lower costs for all.

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EBSO Offers ACA Reporting Services For All Health Plans

ebso-aca-blogThere are numerous reporting and compliance challenges that can make managing a health benefit plan quite perplexing. As a full-service third party administrator (TPA), EBSO provides a comprehensive range of Compliance Management Solutions for self-funded health plans they administer, such as:

  • Standard Compliance Services
  • ACA Reporting Services
  • Legal Guidance & Support Services

EBSO Excels in ACA Reporting
Since many employers are not fully prepared for the complex ACA data gathering and reporting requirements that exist today, EBSO also offers a freestanding suite of ACA Reporting Services available to any employer group, regardless of how the plan is funded or administered. These services include options such as:

  • Reporting 6055 – self-insured (NON-ALE)
  • Reporting 6056 ALE not self-insured
  • Reporting 6055 & 6056 – ALE who are also self-insured
  • Populate 1094 and 1095 forms

EBSO offers all of the compliance resources necessary in today’s regulatory environment. With all these options, it’s time you trust EBSO as your ACA expert! To learn more, visit our website at: http://www.ebsobenefits.com/compliance-management.html

Comparing Spending Accounts

spendingIf your health plan is like most, finding ways to help members manage healthcare expenses is a top priority. Offering one or more tax advantaged healthcare spending account can help.

Health Savings Accounts (HSAs) – Employers and employees can contribute to an HSA tax free and funds can roll over from year to year. To qualify, a compatible health plan must have a minimum annual individual deductible of $1,300 or $2,600 for a family. All contributions count towards the annual maximum, which is $3,350 for individuals and $6,750 for a family. Catch-up contributions of $1,000 are allowed at age 55 or older.

Health Reimbursement Accounts (HRAs) – Like an HSA, this account can be used before a deductible is met and no minimum plan deductible is required. Unlike HSAs, only the employer can contribute; the account is not portable and the employer can approve a rollover provision.

Flexible Spending Accounts (FSAs) – Section 125 FSAs allow employees to defer part of their income to pay for medical expenses. Both the employer and employee can contribute, but the amount employees pledge to contribute cannot change during the year. If a required provision is in place, up to $500 can roll over to the next year.

The features of these accounts vary somewhat. HSAs offer great flexibility to the employee without an administrative burden for the employer. HRAs do not require a qualifying high deductible health plan, but only employers can contribute. FSAs allow the employee to contribute pre-tax dollars, but the use-it-or-lose-it requirement can be a disadvantage. For help in determining which option is most appropriate for your group, talk with your Third Party Administrator.

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Overtime Rules Tough on Small Business

overtimeNew rules mandated by the Department of Labor could affect many small businesses, driving up labor costs and creating more red tape. These rules, effective on December 1, 2016, raise the salary threshold for eligible workers from $23,660 to $47,476 and to $134,004 for highly compensated employees. This means that salaried workers earning less than $47,476 will now be eligible for time-and-a-half for every hour they work beyond 40 hours per week. While the rules were intended to help millions of workers, they assume that every business will absorb the increased costs and pay overtime, rather than limiting hours for salaried employees.

Research by the National Federation of Independent Business shows that nearly half of all small businesses will be affected by the mandate. NFIB foresees a slowdown in productivity if salaried employees are forbidden from exceeding 40 hours per week. Another concern is that some employees may be converted from salaried to hourly, effectively receiving a demotion.

The rules also include a mechanism to automatically update the salary and compensation levels every three years in order to ensure that they continue to provide useful and effective tests for exemption.

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Zika Virus and Summer Travel

zikaVSummer is upon us and with it comes more outdoor activities, more sunscreen and, for some, more travel. What you may not expect summer to bring is the risk of the Zika virus. But, U.S. health officials warn that mosquitos carrying the virus could hit the mainland’s southern borders, starting with Florida and the Gulf Coast, in a few weeks.

Whether you’re traveling this summer or you’re staying put, the CDC says the best way to reduce your risk is to avoid bug bites by using repellent and covering your skin. If possible while traveling, choose hotels with screens or air-conditioning. While using both sunscreen and repellent, apply the sunscreen first, let it dry and then apply the repellent. However, you do not want to use products that contain both sunscreen and repellent and you should not spray repellent on the skin under clothing.

Pregnant women, especially those in their first trimester, are most at risk for the virus and should take every possible precaution and are advised to avoid affected areas. A current list of countries where Zika is active can be found on the CDC’s main site – http://www.cdc.gov.

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Staying Safe in the Sun

sunscreenSummer is the season for getting as much outdoor time as possible. But, it is critical to protect your skin from the sun while you’re at it. Choosing sunscreens and knowing how different SPF levels will affect your skin can be tricky, so here are some fool-proof steps you can take to protect yourself and your children.

  • Limit your midday sun exposure; the most damaging rays are between the hours of 10am and 2pm.
  • Pay attention to your clothing. Loosely woven clothing and hats let UV rays through to your skin. However, these days there is specially designed SPF clothing available.
  • Choose sunscreens that protect from both kinds of ultraviolet light – UVA and UVB (labeled as “broad spectrum”). SPF between 30 and 50 is ideal.
  • Apply sunscreen 20 minutes before going outside and be generous with it!
  • Remember your lips and ears! A waxbased sunscreen stick can protect these areas well.
  • Be especially careful around water and snow, as the damaging sunrays are reflected by these surfaces and increase your exposure.
  • Sunscreen sprays are fine, but be careful to not inhale the fumes (especially when using on children).

Be sure to throw away last year’s sunscreens as it decays over time and can be less effective. If you plan on being in the sun often this summer, consider using a vitamin D supplement. You always want to make a conscious effort to have a good balance of being in and out of the sun. And, always remember to ask your doctor about regular screenings for skin cancer.

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HSA Act of 2016

hsa-fsaLegislation expanding health savings accounts (HSAs) and flexible spending accounts (FSAs) has been introduced in Congress and assigned to committee in the Senate. Just a few of the proposed changes contained in the bills include renaming “High Deductible Health Plans” to “HSA-Eligible Health Plans”; allowing Medicare recipients to contribute to their HSAs and use their funds to cover a hospital admission deductible; and allowing distributions to be used for over-the-counter medications as well as prescription drugs.

While these proposed changes and others included in H.R. 4469 and Senate Bill S. 2449 have received a good amount of support from legislators and industry trade groups such as the American Bankers Association (ABA) and the ERISA Industry Committee (ERIC), no action has yet been taken.

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Physician-Owned Hospitals and the ACA

levelfundingEven though doctors currently have an ownership interest in just 5% of the 5,700 hospitals in the U.S., the ACA will not allow physicians to increase their ownership interest or pursue ownership in additional hospitals. The potential for conflict of interest and concerns about physician owners “cherry picking” the more profitable patients were the impetus behind Section 6001 of the Affordable Care Act that was passed in 2010.

Challenges to the law continue to come along, including a House bill sponsored by Representative Sam Johnson of Texas that would suspend the moratorium on expansion of physician-owned hospitals (POHs) for 3 years and grandfather in several POHs that were under development when the Affordable Care Act was passed. The legislation is based on a recent study that reviewed patient populations, quality of care, costs and payments in 2,186 hospitals, 219 of which were partly physician-owned. The study showed little difference in patient care between POHs and non-POHs, in fact 7 of the top 10 hospitals receiving quality bonuses in the new Hospital Value-Based Purchasing Program were physician-owned hospitals.

One study by the Centers for Medicare and Medicaid Services showed that a majority of physician owners have less than a 2% interest in their institution. As healthcare continues to evolve from fee-for-service to more value-based, there is no doubt that the debate over physician-owned hospitals will continue.

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A Dose of Reality: PBM’s Job is Rarely To Save Costs

Article as seen in MyHealthGuide Source, written by Ron E. Peck, Esq., Sr. VP & General Counsel, The Phia Group, LLC, The Self-Insurer July 2016 – pages 10-15 Full Text

Utilization review. Precertification. Medical case management. It seems as if health plans have been, for lack of a better word, micromanaging how medical care is sought and obtained by plan participants, for decades upon decades. It makes sense. Whether I’m a fully insured carrier or a self-insured plan sponsor, I know that a complicated pregnancy, chronic illness, cancer diagnosis, or any other number of conditions will seriously hurt — if not sink — my plan.

As specialty drugs, implants and other devices usher in an age of skyrocketing costs, not enough attention is being paid to this area in dire need of improvement.

Drug costs already make up 25% of all healthcare expenses. Indeed, a recent study revealed that large employers spent — on average — almost a thousand dollars per covered life, on pharmacy costs in 2014.

  • Specialty and Compound drugs accounts for between 25% and 35% of total drug spending.
  • Further, the costs associated with specialty drugs is increasing at nearly double the 10% rate attributed to other drugs; meaning a 20% jump per year.
  • Even more startling, more than 50% of drugs in the later stages of FDA approval are specialty drugs.
  • Some existing medication have increased substantially, with some increases exceeding 47%.
  • All of this adds up to a total pharmacy spend projected to double by 2020.

The Role of the PBM

A report says that eighty percent (80%) of employers agree or somewhat agree that their Pharmacy Benefit Manager (PBM) is sufficiently managing drug costs. I’m sure — if asked about medical expenses in general — the same respondents would be full of complaints. Yet, when we focus on drug costs which — as described above — are one of the (if not the) fastest growing drivers of plan expense, 80%+ of plan sponsors are satisfied. Someone isn’t getting the memo!

  • PBMs are not necessarily the problem. The issue is that we — as an industry — don’t recognize their role, limits and mission. People assume PBMs exist to contain drug costs. This is simply not the case (with a few exceptions).

Plan sponsors contract with PBMs directly or through their third party claims administrator, to decide what drugs are covered, what the costs shall be and, as it relates to payment to pharmacies, the where, when and how much. Further, plans rely upon their PBM to set the participant cost-share and establish pharmacy networks. PBMs therefore serve many important roles; none of which are — first and foremost — dedicated to identifying cost containment opportunities.

  • Understanding the role of a traditional PBM, what they do to create revenue for themselves and recognizing the pros and cons of said arrangement, is the key to devising independent cost controls.

Some plan sponsors think that they simply pay the PBM for the cost of any drugs actually dispensed and usually an administrative fee for managing the prescription drug program. Little do they know, but many other costs — and conflicts — impact the bottom line when it comes to prescription drug purchasing and distribution, above and beyond the problem of rising drug costs.

The costs of the drugs purchased are exploding. Plans, however, are not only contending with the rising cost of the drugs themselves. They must also worry about lost refunds, PBMs pocketing spreads (the difference between what the plan pays and the pharmacy receives) and other revenue bolstering tactics, such as up-charging and therapeutic shifting. Continue reading

Apps and Wearables Double

mobileAccording to studies by Accenture, the number of U.S. consumers using wearables or mobile apps to manage their health has doubled in just the past 2 years. One interesting fact is that while the vast majority of users are willing to share the data collected with their doctors, and many with their health plans, fewer than a third want the information shared with their employer.

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