4 ways employers can prepare for healthcare changes

The article below was published on June 23, 2017 by Employee Benefit News, written by Mark Johnson.

The new healthcare bill, revealed by U.S. Senate Republicans Thursday, could bring significant changes to organizations and their employees. Granted, there’s a long way to go before any Obamacare replacement legislation is signed. But health insurance is a complex component of running any business, and it’s important that employers start preparing for what might come.

Here are four actions items employers should be addressing now.

1. Create a roadmap. A compliance calendar is a helpful tool in identifying major deadlines. Employers are legally obligated to share health insurance and benefits updates with their employees by certain dates. Employees must be given reasonable notice — typically 30 days prior — of a major change in policy. There will likely be a set date for compliance and specific instructions around notice requirements that accompany the new legislation.

One step to compliance is adhering to benefit notice requirements. Benefit notices (i.e., HIPAA, COBRA, Summary Plan Descriptions, Special Health Care Notices, Health Care Reform, Form 5500 and others) vary by the size of the organization. Other steps can be more involved, such as required changes to plan design (e.g., copays, deductibles and coinsurance), types of services covered and annual and lifetime maximums, among others. Create a compliance calendar that reflects old and new healthcare benefit requirements so you can stay on track.

Senate Majority Leader Mitch McConnell (R-Ky.)
Image Source: benefitnews.com

2. Rally the troops. Managing healthcare compliance spans several departments. Assemble key external and internal stakeholders by department, including HR, finance, payroll and IT.

Update the team on potential changes as healthcare legislation makes its way through Congress so they can prepare and be ready to execute should a new bill be signed. HR is responsible for communicating changes to employees and providing them with information on their plan and benefits. Finance needs to evaluate how changes in the plan will affect the company’s bottom line. Payroll must be aware of how much of an employee’s check to allocate to health insurance each month. In addition, payroll and Human Resources Information Systems (HRIS) are used to track and monitor changes in employee population, which helps employers determine benefit notice and compliance requirements. All departments need to be informed of the modified health insurance plan as soon as possible and on the same page.

3. Get connected. It’s essential to verify information as it’s released, via newsletters, seminars, healthcare carriers, payroll vendors and consultants. These resources can help employers navigate the evolving healthcare landscape. Knowledge of changes will empower an organization to handle them effectively.

4. Evaluate partnerships. There’s no better time for employers to examine their current partners, from an insurance consultant or broker to the accounting firm and legal counsel. An employer’s insurance consultant should be a trusted adviser in working on budgeting and benchmarking the company plan, administering benefits, evaluating plan performance and reporting outcomes. Finding an insurance solution that meets a company’s business goals, as well as its employee’s needs, can be accomplished with a knowledgeable, experienced insurance partner.

Staying ahead of healthcare changes is essential for organizations to have a smooth transition to an updated healthcare plan. Strategic planning, communication among departments and establishing the right partnerships are key. Employers must be proactive in addressing healthcare changes so they are ready when the time comes.

DG Compliance

Why U.S. Health Care Costs Defy Common Sense

The article below was published on June 26, 2017 by CNN, written by Elisabeth Rosenthal.

supreme-court

(CNN) – When Jeffrey Kivi’s rheumatologist changed affiliations from one hospital in New York City to another, less than 20 blocks uptown, the price his insurer paid for the outpatient infusion he got about every 6 weeks to control his arthritis jumped from $19,000 to over $100,000. Same drug; same dose — though, Kivi noted, the pricier infusion room had free cookies, Wi-Fi and bottled water.

Mary Chapman, diagnosed with multiple sclerosis, started taking a then-new drug called Avonex in 1998, which belongs to a class of drugs called disease-modifying therapies. Approved in 1996, Avonex was expensive, about $9,000 a year. Today, two decades later, it’s no longer the latest thing — but its annual price tag is over $62,000.

Marvina White’s minor elective outpatient surgery to remove an annoying cyst on her hand was scheduled in 2014 based on her doctor’s availability. Because it was booked in a small facility that is formally classified as a hospital (with two operating rooms and 16 “spacious private suites”) rather than the outpatient surgery center where the doctor also practiced, the operating room fee was $11,000 rather than $2,000.

Len Charlap had two echocardiograms — sonograms of the heart — within a year: One, for $1,714, involved extensive testing at a Harvard training hospital; the other, for $5,435, was a far briefer exam at a community hospital in New Jersey.

It is not just that US healthcare is expensive, with price tags often far higher than those in other developed countries. We know that. At this point, Americans face astronomical prices that quite simply defy the laws of economics and — as each of the above patients noted when they contacted me — of decency and common sense.

‘The balance sheet just doesn’t work out’

“It’s the prices, stupid.”

This phrase, part of the title of a 2003 scholarly article in the journal Health Affairs explaining high US health expenditures, has been bandied about by a number of health economists for years.
But politicians have long been prone to ignore this essential wisdom. They do so today at their own peril. Outraged Americans at Town Hall meetings are wising up. Like patients who I’ve spoken to in my last few years of reporting, they have experienced the bankrupting and baffling illogic of US medical prices firsthand.

With the prices the US medical system demands for care, it’s no wonder that Republicans have had so much trouble finding a recipe to replace the Affordable Care Act, aka Obamacare, with “something better” for less money, as they’ve promised endlessly to do. Ironically, despite the extreme differences, the GOP is stumbling on the same underlying problem that ultimately tarnished the ACA in critics’ eyes: spiraling prices often necessitated skyrocketing premiums and deductibles, belying the “affordable” moniker. The balance sheet just doesn’t work out.

Any plan to solve America’s health care mess must confront this reality: Our prices for tests, drugs, hospitalizations and procedures — old or new — have gone up dramatically year by year, and are vastly higher than in other developed countries. Indeed, prices for similar interventions in other countries have often declined.

Why? The United States — more or less alone among developed countries — has no direct mechanism to rationalize prices for medical encounters, to insure they are at least nominally related to value. Worse still, we alone effectively allow businesses — mostly for-profit — to set the asking price. And, as these examples show, price and value have in many cases become completely uncoupled, allowing price to travel into the stratosphere.

The perils of ‘sticky pricing’

According to the rules of economics, the prices of innovative, breakthrough medical offerings should go down as they become more common. Competition should reduce prices as more manufacturers enter the field allowing purchaser-prescribers to choose from alternatives.
The pricing of pharmaceuticals and treatments in the United States often does exactly the opposite. Continue reading

Tailored wellness programs improve the bottom line

The article below was published on June 21, 2017 by Employee Benefit News, written by Alicia Kelsey.

Employer-sponsored health plans are taking up an increasing amount of real estate on companies’ operating budgets, and management has had to get creative in order to slow the rise in costs.

One creative solution that companies have turned to is a customized employee wellness program. By using data of the health of their population, enlisting industry specialists and vendors to help structure plans, and applying new technologies, many employers are seeing that tailored plans are surprisingly effective at managing costs.

“Tailored” is the key word when creating an effective employee wellness program. The first step is for an employer to know the health issues that their employees, and their spouses and dependents face. This is commonly done by asking plan members to complete a health risk assessment. Health reimbursement arrangements now include such details as average hours of sleep per night, nutritional and exercise habits, and biometric data including weight, cholesterol levels and blood pressure.

dgb-treadmill

Image Source: benefitnews.com

The latter information in particular, introduced into the HRA process in the past decade, adds the critical physician component into health management. Typically collected by third-party vendors following doctor visits for privacy reasons, biometric details provide a superior snapshot of the overall well-being of a person. This data, when paired with advanced claims details and analysis, have vastly improved companies’ abilities to tailor their employee wellness programs to their employees’ needs. The more a company can perfect that tailoring, the more effective that company will be at managing costs and risks.

Technology has notably played a key role in improving the data available to companies and increased the participation and utilization of their wellness programs. Whereas physical activity was once self-reported, for example, a fitness device can now provide not only more accurate, but also more extensive information.

Similarly, programs can be administered online, increasing ease of use and reducing implementation costs. Many wellness companies have the ability to sync fitness activity from devices into their platforms so it can be managed all in one place.

It’s difficult for companies to manage all of this on their own, and it’s not a one-size-fits all solution. While there are many pre-existing program options out there, it’s better to tailor it to a company’s population. In the past decade, the number of options available has increased exponentially. Companies now have access to wellness tools of all shapes and sizes — arguably to an overwhelming degree. In other words, now is a good time for companies to look at their wellness programs and ask some sharp questions. Is the program tailored to the company’s employees? Does it meet the employer’s goal?

An effective program requires a concerted effort from the company’s leadership team. To incorporate a properly designed wellness program, a company must take time to determine both the needs of its employees and the goals of the company.

A third party — usually in the form of an insurance broker — can provide key assistance in these efforts by bringing in both the health claims data, benefits plan integration and an extensive knowledge of the wellness program options available. They have the ability to help the employer research and vet the right wellness vendor for the issues plaguing their population as well as fit it into the companies’ overall employee benefits strategy.

Wellness programs are no longer a stand-alone initiative. They are becoming more baked into the overall management of a company’s health population. With increasing healthcare costs, now is a perfect time for companies to revisit how they are managing their wellness program and what can be done to align it with their overall benefits goals.

Corporate Fitness & Health

Alexa Has Health Answers

alexaIn the race to bring health-related information to your digital world, Amazon is certainly not falling behind. Beginning in early March, Amazon enabled “Alexa” users to obtain answers to medical questions. According to a press release, with help from WebMD, Alexa devices will respond to medical questions with physician-reviewed, medically appropriate answers in plain, understandable language. Answers to questions such as how to treat a sore throat or the side effects of certain substances can also be sent in text form to those using the Alexa app.

why-diversified-group

10 compliance issues for 2018 health and benefit planning

The article below was published on June 18, 2017 by Employee Benefit News, written by Brian M. Kalish.

Compliance

Image Source: benefitnews.com

Introduction
Despite the uncertain future of the Affordable Care Act and pending replacement legislation, clients should continue finalizing their 2018 health and benefit offerings, contribution strategies, vendor terms, plan operations and employee communications, according to Mercer. The company hosted a recent webinar to share the top 10 issues for 2018.

“As employers begin to strategize for their 2018 benefit programs, it is important not to lose sight of new and ongoing compliance obligations and prepare to make any changes that may be necessary in employee benefit plan design and administration,” says Katharine Marshall, principal at Mercer. “Despite what may – or may not – come of ACA repeal and replace legislation, there are a number of compliance concerns that employers can count on sticking around – like HIPAA privacy and security requirements, mental health parity requirements and ERISA fiduciary duties, just to name a few.”

Employers and their advisers, Marshall adds, should keep these issues in focus because the consequences of sidelining them can be costly.

Employed shared responsibility strategy and reporting
Even with plans to dramatically alter or eliminate the Affordable Care Act pending in Congress, most of the legislative body’s reconciliation rules do not allow for the repeal of the employer shared responsibility, says Katharine Marshall, principal at Mercer.

While the minimum value requirement remains unchanged for 2018, affordability has decreased and an employer cannot charge a full time employee more than 9.56% of household income, down slightly from 9.69% in 2017.

It is critical for employers to document their offers of coverage and “most importantly,” waivers of that coverage, Marshall says. “As you head to 2018, correct any mistakes in prior year filings,” she adds.

Cadillac Tax
Employers should review their risk of exposure for when the tax is scheduled to begin in 2020. Although the American Health Care Act as it stands now delays the implementation of the tax until 2026, the fate of that bill is uncertain, Marshall says.

The best way to do that is to review an employer’s risk of exposure by identifying plans and benefits that could be a factor, such as flexible spending accounts, health reimbursement arrangements and health savings accounts, she says. An employer should also focus on pre-65 retiree plans and high-cost plans due to geographic location and claims history.

Preventive services
For employers to comply with this requirement they need to stay abreast of updates to what must be covered.

Changes are made on a rolling basis. For Jan. 1, 2018, preventive services now include screening for depression in adults, low dose aspirin for certain at-risk adults ages 50-59, syphilis screening for asymptomatic non-pregnant adults, among others, Marshall says. Continue reading

Millennials Drive HSA Growth

dgb-millennialsThe State of Benefits report from BenefitFocus shows that workers under the age of 26 are investing 20% more of their salary in HSAs than other generations. This is certainly due to the fact that nearly half have elected to enroll in high deductible health plans in 2017. While PPO plans remain very popular, especially among older adults, employee contributions to HSAs and FSAs are rising. A growing interest in savings among young people is another factor contributing to the increased popularity of HSAs.

why-diversified-group

 

Views Limiting the employer tax exclusion for healthcare is the wrong idea

The article below was published on June 7, 2017 by Employee Benefit News, written by Craig Hasday.

The Republicans are looking everywhere for funds to fix healthcare, as well they should. This problem is not an easy one to solve, however. Under the Affordable Care Act, employers were faced with the Cadillac tax. As a result, they wasted no time planning to mitigate the effect. While the Democrats seemed to believe that this was a pot of gold available to solve some of the cost issues, the reality turned out much differently.

Consultants, like me, have spent the last few years planning for our clients to avoid ever paying the Cadillac tax. Employers fled to health savings accounts, self-insured plans and any strategy that would reduce costs below the taxable threshold. Instead of a pot of gold, there was a leprechaun at the end of the rainbow waiting to laugh at the CBO scoring, which had predicted billions in revenue.

Now, some prominent Republicans are looking to limit the employee health insurance tax exclusion or its counterpart, the employer deduction, to fund healthcare for the uninsured. I am hopeful that they take the time to look closely at the potential impact of this decision.

Peeling back the onion, altering the tax-favored status of employer-provided benefits will have the same effect as the Cadillac tax — employers are going to plan around it. More than 175 million Americans get healthcare through their employer, and this is not a progressive benefit. If the employer exclusion is eliminated there would be little incentive for employers to continue to provide benefits — and if they do, the pressure to reduce costs, and thus benefits, will be intense. The impact on lower-paid workers would be far greater than the more highly-compensated group.

Finding the pot of gold

Politicians may not be listening, but the effect of this change in tax treatment would be the opposite of what is desired. We need to go after the cost of healthcare. That’s the pot of gold.

Here are some suggestions to go after cost:

  • Further encourage the shift from pay-for-volume or pay-for-services-rendered to reimbursement of providers based upon value and the outcome of treatment.
  • Make drug pricing fairer; eliminate rebates which obscure real prices and regulate obscene pharmaceutical profits for patent-protected drugs.
  • Introduce meaningful tort reform.
  • Expand Medicaid in every state. This is the platform that should be used for subsidized care.

Each one of these changes is going to require a great deal of effort, but they are better than an ill-fitting Band-Aid which is just going to make healthcare even more expensive for the individual.

why-diversified-group