In late Fall, the President signed two bills that should make it easier for pharmacists to help customers find the lowest cost, appropriate medications. The “Know the Lowest Price Act of 2018” and “Patient Right to Know Drug Prices Act” bills are designed to crack down on “gag clauses” that prevent pharmacists from telling patients about more affordable options for prescription drugs. Having developed a “drug pricing blueprint” to promote greater price transparency, the President praised these bills as representing significant steps in that direction.
You might be surprised to hear that millennials represent one third of the American workforce, but Pew Research Center confirms it. If your health benefit plan hasn’t adapted to the needs and lifestyles of these young people, you’re missing an opportunity to boost retention, build loyalty and enhance wellness.
For starters, it’s important to realize that 45% of young adults age 18 to 29 do not have a primary care doctor. They do, however, have a smartphone and you can bet they use it to access the internet constantly. With online sources like WebMD offering so much healthcare information, it’s no wonder that millennials are likely to self-diagnose and even treat one another at home before seeing a doctor. If young people can find much of the healthcare information they need in the palm of their hand, you can bet they expect to find benefits and enrollment information easily accessible as well.
They Want Information Now
Just like so many of us who have come to expect an immediate response to everything, millennials who do need a doctor expect the visit to happen quickly and easily. According to PNC Healthcare, this explains why 34% of millennials prefer to use a retail clinic rather than waiting several days to see a primary care physician in their office – a rate twice as high as baby boomers. It would also seem to point to an increased use of telemedicine.
Cost Matters to Millennials
Millennials face more than their fair share of financial pressures and take their finances seriously. Surveys show they are more willing to request a cost estimate prior to choosing a treatment option than baby boomers or seniors ever were. This not only makes cost transparency tools important, but it’s a very positive trend that should contribute to lower claim costs going forward.
Whether it be treatment options, provider access or cost of care, the demand for health and benefit plan information will only increase as more and more millennials enter the workforce. In order to respond to change, self-funded employer groups will need the resources of an independent TPA that can combine the right plan design with more personalized, interactive communications and more innovative ways for younger employees to access the more personalized care they will need going forward.
Currently, only 21 states offer some protection against balance billing and most existing laws apply to emergency services required from out-of-network providers. Few, if any, address balance bills received for treatment by an out-of-network provider in an in-network hospital. In Pennsylvania, the Governor and General Assembly have introduced two bills aimed at taking consumers out of the middle of the reimbursement process. These bills have come after several other states have adopted more comprehensive laws that prohibit balance billing entirely.
Some measures addressed in Connecticut, New York, Maryland, Florida and New Jersey include:
- Protections in emergency department and in-network hospital settings
- Prohibiting providers from balance billing and requiring carriers to hold their members harmless
- Adopting reimbursement rate standards and a payment dispute resolution process
- Applying these laws to all types of managed care products, including HMOs and PPOs
The goal of the proposals is to keep covered persons out of the middle of carrier-provider payment disputes. In non-emergency procedures, healthcare facilities in New Jersey are required to disclose whether they are in-network and advise the covered person to ask if their physician is in or out-of-network. Individual healthcare professionals must inform the patient if they do not participate in the person’s plan network and provide a billing estimate and applicable CPT codes. With healthcare costs continuing to rise and a lack of federal regulations, we can expect more states to take measures to protect healthcare consumers. We will strive to keep our clients informed as changes develop.
The International Foundation of Employee Benefit Plans reports that individuals enrolled in employer-sponsored healthcare plans are now paying an average deductible of $1,491 for individual coverage and nearly $2,800 for family coverage. These numbers are up from $1,300 and $2,500, respectively, in 2016.
Individuals covered by HDHPs have average deductibles of $2,296, with families averaging $4,104 – more than twice the averages for traditional, non-high deductible plans. The online survey included nearly 700 U.S. members of IFEBP and was conducted in February.
From Amazon, Berkshire Hathaway and JP Morgan to Walmart and Humana – disruption is all around us. The future of our healthcare system is unfolding right before our eyes and regardless of how this giant chess match turns out, health plan participants just may be the biggest winners.
The Retail Effect
While many healthcare plans have done well under Obamacare, they need to review what many retailers have experienced since Amazon began building its Prime subscriber base of 100 million plus. When you consider the scope of Walmart, their potential for retail clinics is virtually unlimited. Whether by Amazon, Walmart or others, home delivery of prescriptions could make things very difficult for brick and mortar pharmacies. No matter what area you examine, these mega-partnerships have the potential to impact access to care in ways that most traditional healthcare providers have never imagined. And, if recent retail history means anything, healthcare consumers are sure to benefit.
Self-Funding Will Rule
Most working Americans are already covered by self-funded health plans, and we would expect the new Amazon, Berkshire Hathaway, JP Morgan family to offer at least one self-funded option. Studies show that self-funded plans offer employers far more flexibility than fully insured counterparts and Berkshire Hathaway’s Specialty Services unit certainly has the resources to provide the required stop loss insurance.
A Transparency Opportunity
With a little creativity, the transaction processing infrastructure of JP Morgan could make real-time claims processing a reality for fellow plan members. Real-time payments may encourage providers to discount more. Add telehealth and enable physicians to view electronic medical records and patients may know what to expect from their visit and what they will pay before they make the appointment. The bottom line is that as the level of information sharing increases, cost transparency and the potential for savings will grow.
As a TPA dedicated to controlling costs for self-funded health plans and members, we know these deals will keep more people out of the hospital and increase competition for outpatient care. Technology will move forward, actionable data will be more accessible and consumers will have their day as costs become more transparent and delivery more user-friendly.
In late June, the Department of Labor introduced final rules on Association Health Plans (AHP), which will allow bonafide associations to offer healthcare plans to member companies. While we had hoped for a different approach to regulating these plans, association health plans will be regulated by states as MEWAs.
According to the final rules, an association that wants to establish a healthcare plan must already exist for another purpose. In other words, an association cannot be formed for the exclusive purpose of offering healthcare plans to its members. Another stipulation is that new self-funded association health plans cannot be established until April 1, 2019.
Association Health Plans will be exempt from the federal mandate on essential health benefits, but will remain consistent with popular Obamacare rules such as coverage of pre-existing conditions and bans on lifetime limits.
While reserve requirements will vary from state to state, we expect that these plans will be quite costly to establish and closely monitored by state regulators. Nonetheless, for large associations with significant cash reserves, we expect this option to make it possible for thousands of small businesses to lower their cost of employee health benefits.
This article was published on October 3, 2018 on BenefitsPro, written by Emily Payne.
When the Kaiser Family Foundation started tracking employer health benefits 20 years ago, employee deductibles weren’t a concern. Over the years, though, the survey has adjusted to reflect not just the growing percentage of employees with a deductible (85 percent in 2018) but the growing amount of that deductible ($1,573 for an individual in 2018) .
In fact, according to the 2018 KFF Employer Health Benefits Survey, the burden of deductibles has tripled in the past decade and increased eight times faster than wages. Among small employers, 42 percent of workers pay a deductible of $2,000 or more.
“Rising health care costs absolutely remain a burden for employers, but they’re a bigger problem for workers, as cost-sharing has been rising much faster than wages in recent years,” KFF president and CEO Drew Altman said in a press briefing.
This year’s survey shows no dramatic shifts in the employer-sponsored health care space but continues to illuminate a number of trends, including increasing health care premiums, greater focus on employee wellness and alternatives to traditional health care providers.
Premiums have increased five percent this year, costing a family for four an average of $19,616. Of that cost, employees contribute $5,547, and employers pay the rest. For single-coverage, premiums increased 3 percent to $6,896.
“Premium growth is important, but it’s only part of the story,” noted Altman. “The bigger issue is rising cost-sharing. What happens with wages can be as important to closing that gap as what happens to cost-sharing itself.”
Almost half of employers continue to offer PPO plans, while three in 10 offer a high-deductible plan with a savings component. Some employers (13 percent) offer an incentive to encourage employees to opt for one plan over another.
HDHP adoption is stagnating, comprising 29 percent of all plans. Part of this slowdown may be due to the uptick in the economy. “Given the economy is good and health care costs are relatively tame, I think employers don’t have a strong incentive at the moment to push people into plans they may not be as comfortable with,” said Gary Claxton, KFF vice president and director of the Health Care Marketplace Project. “I think we’ve stalled a bit on the growth of HDHPs. Things will get more interesting if we move into a recession.”
Wellness is getting more of employers’ attention. Seventy percent of large firms now offer health-risk assessments, and 81 percent use data from those assessments to better understand health risks, target their wellness program promotions, design new programs and/or measure health care costs. “As employers have gotten more involved in trying to develop programs to encourage employees to be healthy, having the info is necessary to determine what kind of programs to sponsor and what employees need information about,” Claxton said.
More employers are looking at workers’ activity data–21 percent now collect information from a wearable device as part of their wellness program, an increase from last year’s 14 percent.
Interest in telemedicine and retail clinics continues to grow. Among large employers, 74 percent offer telemedicine services, an increase of 63 percent since last year. In addition, 76 percent cover retail clinic services, and some offer employees a financial incentive to choose these services.
A number of factors, including wages and the economy, will continue to impact the employer health care space in the coming years. Ten percent of employers expect that the elimination of the individual mandate will result in fewer workers purchasing employer-sponsored coverage.
Another factor asked about during the briefing was the increase in prices by health care systems and providers. Consolidation among major health care systems continues to shift the balance of power when it comes to price negotiation. “We’re in a competitive health care system,” Claxton noted. “We rely on private insurers and employers to mediate prices. They haven’t been very successful in recent years. It is hard because most workers work for fairly large employers with multiple locations. It’s hard to develop narrow, efficient networks that would cover all of your employees, and the large health plans don’t really have an incentive to create these options.”
This article was published on September 4, 2018 on BenefitsPro, written by Cort Olsen.
How do you make clients understand that fully insured plans are costing them hundreds of thousands dollars a year?
With premiums constantly on the rise for employers offering fully insured health plans, brokers are searching for ways to convince their small and mid-size clients that switching to self funding can cut costs on their top line items.
Switching to one of these plans means that the employer assumes more risk, with stop-loss insurance providing financial protection against catastrophic claims. They can also pay medical claims as incurred as they would other corporate expenses, or can deposit expected or maximum costs into an account each month.
There are many ways brokers are going about convincing their clients to make the leap, from educating them on the cost of the medical loss ratio, highlighting the financial pressure health care is placing on their business, or just making them feel as uncomfortable as possible by explaining their fully insured payment methods.
Bob Gearhart Jr., partner at benefits brokerage DCW Group in Boardman, Ohio, says explaining the MLR and how it guarantees fully insured premiums will rise is a great starting point when initiating the conversation.
“Benefits is one of the few areas the CFO has not optimized and they are feeling pressure from the CEO to drive earnings to the bottom line,” Gearhart says. “This organizational pressure coupled with health care in the headlines is slowly changing the buyer within the organization.”
Gearhart adds that leading HR professionals recognize this and proactively engage the C-suite in the buying decision.
Robson Baker, employee benefits and HR adviser for Clarus Benefits Group in Houston, Texas, says getting the C-suite and HR through the awareness phase of the conversation is the hardest part.
“The broker needs to educate and bring the pain points to the forefront of their minds,” Baker says. “Then it moves to consideration — which can be led by a strategic CFO and compassionate HR department.”
Framing health care cost as a financial decision allows the broker to approach the CFO first and then bring the self funding plan down to HR and out to the other employees. Continue reading
This article was published on August 29, 2018 on Employee Benefit Adviser, written by Rebecca Madsen.
Technology continues to reshape how employers select and offer healthcare benefits to employees, putting access to information at our fingertips and creating a more seamless and interactive healthcare experience. At the same time, these advances may help employees become savvier users of healthcare, helping simplify and personalize their journey toward health and, in the process, help curb costs for employers.
The revolution can be important to remember during open enrollment, which occurs during the fall, when millions of Americans select or switch their health benefits for 2019. With that in mind, here are five tips employers should be aware of during open enrollment and year-round.
Make sense of big data. Big data is a buzz word, but the applications are only meaningful if employers can make sense of that information. To help with that, employers are gaining access to online resources to help enable them to more easily analyze and make sense of health data, taking into account aggregate medical and prescription claims, demographics, and clinical and well-being information. This can provide an analytics-driven roadmap to help employers implement tailored clinical management and employee engagement programs, which may help improve health outcomes, mitigate expenses and help employees take charge of their health.
Help people understand their options. More than three-quarters (77%) of employees say they are prepared for open enrollment, yet most people struggle to understand basic health insurance terms, according to a recent UnitedHealthcare survey. In fact, only 6% of survey respondents could successfully define all four basic health insurance concepts: plan premium, deductible, co-insurance and out-of-pocket maximum. To support employees during open enrollment, employers can adopt online platforms designed to personalize and simplify the experience to help people select a health plan based on their personal health and financial preferences, while encouraging them to select a primary care physician and enroll in programs such as smoking cessation or weight loss.
Encourage your people to move more. An estimated 35% of employers now integrate wearable devices into their well-being programs, helping employees more accurately understand their daily activity levels. As these programs become more common, there may be opportunities for cost savings for companies and their workforce. For instance, some wearable device wellness programs may enable people to earn more than $1,000 per year by meeting certain daily walking goals, while employers can achieve premium renewal discounts based on the aggregate walking results of their employees.
Offer incentives to employees who comparison shop for care. More than one-third (36%) of Americans say they have used the internet or mobile apps during the last year to comparison shop for healthcare, up from 14% in 2012, according to the UnitedHealthcare survey. To encourage employees to participate in this trend, some employers are offering financial incentives — such as $25 or $50 gift cards — to employees for using healthcare transparency resources. Healthcare quality and cost varies widely within a city or neighborhood, so encouraging the use of online and mobile transparency resources may yield savings for employers and employees.
Integrate medical and ancillary benefits. Open enrollment is also the time for people to select important ancillary benefits, such as vision and dental coverage. While some people may overlook these plans, offering this coverage as part of an employee’s menu of benefits options may maximize the effectiveness of a company’s healthcare dollars, provide families with added peace of mind and help build a culture of health. Combining medical and ancillary benefits under a single health plan may enable for the integrated analysis of a wide range of data that can facilitate proactive outreach and clinical support for employees, including for people with chronic conditions such as diabetes, or to help prevent the development of such conditions.
It’s undeniable: the cost of healthcare is rising and as a result it’s getting harder for your clients to pay for the care their employees need. Traditional health insurance policies aren’t right for everyone, and strong alternatives have emerged. Consumer Driven Health Plans can put the power back in the hands of members. Health Savings Accounts (HSAs) create a financial incentive to spend dollars wisely, because unspent dollars accumulate tax-free in their own personal accounts. This encourages consumers to shop around, compare prices and providers, and select the medical services that are most important for them.
Let’s take a closer look at HSAs:
What Are HSAs?
A HSA is a tax-free account in which funds can be deposited by individuals, employers or both to pay for out-of-pocket health care expenses (including medical, vision or dental expenses under Section 213(d) of the Internal Revenue Code), that may not be reimbursable by their individual or employer-sponsored health plan.
How Do I Know If My Client Is Eligible to Offer HSAs?
If your client currently has a high deductible plan that includes HSA in the name, they’re eligible! If your client’s plan name doesn’t include HSA, encourage them to consult with their insurer. The IRS has outlined that high deductible plans that offer a minimum annual deductible of $1,350 for individuals or $2,700 for families, as well as a maximum annual deductible of $6,650 for individuals and $13,300 for families, are eligible for HSAs.
Learn more about eligibility, see IRS Publication 969.
How Much Can Individuals Save in a HSA Annually?
As of 2018, members with individual coverage can save a maximum of $3,450 annually, while those with family coverage can save up to $6,900. For clients 55 or older by the end of the year, an additional $1,000 can be saved. This amount can be deposited as a lump sum or deposited over time.
For more details, including rules for married people, refer to IRS Publication 969.
HSAs are underutilized, but carry great benefits for individuals. If your clients aren’t utilizing a HSA because you haven’t recommended it as an option, you’re selling them short. Staying up-to-date on HSA qualifications and providing your clients with these and other cost saving techniques will set you apart from your competitors.