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.

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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.

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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

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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.

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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.

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On the Horizon: Compliance Issues

The article below was published on June 2, 2017 by BenefitsPRO, written by Nathan Solheim.

In several “Star Trek” series, an alien villain known as the Borg travels the galaxy, assimilating creatures from all walks of life into its space-borne collective. Serious fans know that it’s almost impossible to escape the Borg and its nefarious designs. The Borg’s catchphrase, “resistance is futile,” has since been assimilated into the lexicon.

When it comes to the matter of compliance, benefits professionals across the nation must be feeling exactly like those brave men and women from Federation starships who had the misfortune of coming across the Borg. From the Affordable Care Act to ERISA to the EEOC to a number of other alphabet-soup agencies and regulatory bodies, 2017 is shaping up to be the year of compliance.

Brokers and agents simply need to accept it.

Immediate issues

For most benefits professionals, the ACA will dominate compliance issues that are top of mind. The ACA, at least for the time being, is still the law of the land. While House Republicans tried earlier this year to repeal and replace the ACA with the American Health Care Act (AHCA), they came up short thanks to internal disagreements. After the initial failure, they redoubled their efforts and passed the American Health Care Act. The AHCA will now head towards the Senate, where its future is impossible to predict.

While the political wrangling makes for an uncertain compliance environment, brokers and agents should keep their clients in compliance with the ACA.

“No matter what you predict, it will not happen that way,” says David Contorno of the Hilb Group’s Lake Norman Benefits in Mooresville, North Carolina. “We have a set of rules and we operate within those rules—that’s our obligation to clients. That’s our job. Our job is not to predict what will happen, it’s to help advise our clients on their options and what they should be doing at the end of the day.” Continue reading

Three Approaches to Controlling Rx Costs

The article below was published on May 11, 2017 by the Mercer Signal, written by David Dross.

With all the uncertainties around healthcare legislation swirling, cost control of pharmacy spend remains top priority for employers. On one hand, employers obviously want their employees to have access to the medications they need: drugs like insulin, blood pressure treatments, and cholesterol blockers have long played a critical role in employees’ health. But now new specialty biotech drugs – some of them true medical breakthroughs – are flooding into the market, at costs much higher than previous therapies. Drug prices spiked by 9.8% between May 2015 and May 2016, and there are more sharp increases ahead. Drug costs are quickly becoming unsustainable, for both employers and, increasingly, plan members. Many high-cost brand name drugs may have rebates to reduce their net cost, but the member or patient typically does not see these rebates so their out-of-pocket cost is still high. And even the cost of some generic drugs has risen dramatically.

Fingers are being pointed everywhere—from regulations and research to the cost of lawsuits when new drugs perform poorly. While other stakeholders work on those issues, there are actions employers can take to shift the equation in their favor. Here are a few ideas:

Analyze the data on prescription drug spend in your plan

Prescription drugs are the top driver of health benefit cost increases today. In a recent report by the Pharmacy Benefit Management Institute, pharmacy benefit costs increased 10.2%, driven by 19.2% growth in specialty pharmaceuticals.

It’s important to know what’s driving cost growth in your program. When looking at your data, here are a few things to focus on:

  1. Drugs – What drugs are plan members using?
  2. Channel – From where patients receive their drugs and are they leveraging the lowest-cost channels?
  3. Supplier – Are you maximizing the prescription benefit manager relationships?
  4. Care – How do the drug therapies match up to best practices and evidence based medicine?

Educate employees on what they can do to lower their Rx costs

Employers can help employees be smarter when talking to their physician about their medications and making purchasing decisions. If your program includes any of these cost-saving Rx benefit features, make sure your employees understand them:

  • Lower copays for generic drugs
  • Lower copays for drugs in formularies
  • Preferred pharmacies
  • Mail-order suppliers
  • Prior authorization requirements
  • Step therapy requirements (members try lower-cost drugs first before they can move up to higher-cost prescriptions)

Focus on specialty drugs now

Specialty drugs for complex conditions account for 38% of all prescription spending even though they are used to treat about 1 to 2% of all patients. (Consider this recent example of how one employer discovered just two plan members were accounting for 2.5% of their total health budget due to specialty medication prescriptions.) The most expensive biologic breakthrough treatment regimens can exceed $750,000 per year. For the entire US healthcare market, specialty medication spending has nearly doubled since 2011, reaching more than $160 billion. With 40-50 new specialty medications set to enter the market each year, there is no end in sight.

To help gain control over your spending on specialty drugs, consider working with an expert to conduct a specialty diagnostic of medical and pharmacy plans to assess the current state and identify areas for improved management. Once the diagnostic results are in, employers can make informed decisions on revisions to their plan structure. We see savings typically in the 5-10% range. However, these savings occur in the short-term, and so it is a good idea to revisit the plan structure at least semi-annually as provider capabilities change over time.