Employees Need More Health Benefits Education

The article below was published on October 9, 2017 by Plansponsor, written by Rebecca Moore.

The youngest employees especially feel unprepared to decide what plan they should choose, according to a survey from Aflac.

dg-questionsBenefits enrollment findings from the 2017 Aflac WorkForces Report, a national online survey of 5,000 U.S. workers, found that 67% said they are confident they understood everything they signed up for.

However, these results may indicate an underlying false sense of confidence. The survey, conducted between January 26 and February 17 by Lightspeed GMI and released by Aflac, also uncovered that 76% of workers make health benefits decisions without a complete knowledge of their health plan. When asked specifically about understanding its policies, such as concerning deductibles, co-pays and providers in their network, only 24% of these workers could respond that they understood everything. This result has been steadily declining since 2015, when nearly half (47%) believed they knew everything; in 2016,  39% believed they did.

“It’s counterintuitive to see that workers are reporting a positive benefits enrollment experience, but so many are still struggling with a good understanding of the various aspects of their health care coverage,” says Matthew Owenby, senior vice president, chief human resources (HR) officer at Aflac. “Benefits enrollment is one of the most important decisions a worker can make each year. Ensuring workers are more educated will require a sustained effort by employers and employees alike to better understand all aspects of benefits, including coverage options and costs.”

Aflac conducted a separate survey among 1,000 20- to 26-year-olds, employed either full or part time. The Aflac WorkForces Report First-Time Enrollees Survey was conducted from August 24 through 28 and found that more than half (51%) of young workers will choose their health care benefits for the first time this enrollment season. Yet only 19% feel confident, and just 31% say they feel prepared. Their biggest concern about choosing their own health insurance plan is cost (44%), followed by understanding how health insurance works (36%).

Of respondents currently on their parents’ plan (35%), more than half (54%) are leaving that coverage in the next year to purchase their own benefits for the first time. More than two-thirds (69%) of those on their parents’ plan are unaware how much their health insurance coverage even costs; however, 41% indicated they contribute financially to their parents’ plan.

“We know from our experience and past data that fewer people each year say they understand everything about their plans and their options, which means Americans are clearly hungry for answers to insurance questions,” Owenby says.

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Improving the ACA: What’s on employers’ wish list

The article below was published on September 27, 2017 by Employee Benefit News, written by John Barkett and Julie Stone.

The Affordable Care Act brought some significant changes to employer-sponsored healthcare, which employers factored into their long-term healthcare strategies. Revised plans were built to comply with the law’s many complex requirements, even though employers hoped for relief from the law’s more onerous provisions. Yet, despite the recent legislative drama and the promise of repeal and replace, seven years later the ACA is still the law of the land.

But just because employers continue to execute on their ACA-compliant healthcare strategies, doesn’t mean they aren’t yearning for improvements to the existing law. In fact, there are a number of items on their “ACA improvements wish list.”

Of greatest concern to employers about the ACA is the Cadillac tax, the excise tax on what the law defines as “high-value” health plans. Even though imposition of the tax is delayed until 2020, most employers believe it will constrain their flexibility to expand or improve benefits as competition for talent intensifies. They also worry that with low limits on plan values and many open questions on the administration of the tax, it has the potential to prevent them from creating a total rewards portfolio aligned with their overall talent strategy.

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Image Source: Benefitnews.com

A 2014 Willis Towers Watson analysis, completed when the Cadillac tax was set to go into effect in 2018, found that nearly half of large U.S. employers would start to incur the tax in its first year. In response, many employers redoubled their efforts to anticipate and modify plans to avoid the tax.

Regardless, employers want the tax eliminated. If that cannot be accomplished, they would like to see regulatory guidance that addresses the provision’s inherent flaws and challenges. Employers would also want the thresholds that trigger the tax revised upward, which would give them more latitude to offer a slate of benefits that meets their business need.

Another ACA provision employers would like to see eliminated is the employer mandate. The mandate requires employers with 50 or more full-time equivalent employees to offer affordable healthcare coverage or face penalties. Employers object to this provision more on principle than out of a desire to discontinue offering healthcare benefits; they want to see less government involvement in employer-sponsored healthcare. But our research shows that the vast majority of employers — especially large employers — have no intention of discontinuing employee health benefits.

A more tactical reason employers want to see the mandate eliminated is because it created onerous compliance and reporting requirements that have significantly increased employers’ annual administrative costs and the complexity of day-to-day management.

Recently, it was revealed that a bipartisan group of lawmakers in the House have been quietly working on a bill that, among other things, would raise the employer mandate size limit from 50 to 500 full-time equivalent employees. Although completely eliminating the employer mandate would be preferred, this would be a welcomed by some employers while exacerbating inequities in the law for others.

Looking even more broadly at ways to improve the ACA, high on employers’ wish list are provisions that would address the high cost of healthcare. Reducing costs was a stated goal of the ACA, but as the law took shape and was debated in Congress, there was little to no agreement on how to achieve this. Interestingly, one of the most significant provision aimed at lowering costs was the creation of the excise tax.

Bottom line: When the ACA was first passed, most employers were apprehensive about several of the law’s provisions and worried about their ability to meet some of its requirements. Seven years later, nearly all employers have made the changes necessary to co-exist with the law. And now, after several attempts to pass healthcare legislation friendlier to employers have failed, many are now hoping Congress will turn its attention to the more productive work of improving existing law.

Fighting Specialty Drug Costs

drug-bottlesTo help control rising specialty drug costs, the National Business Group on Health has issued a lengthy report including 5 public policy recommendations they hope will educate the marketplace and encourage effective, strategic partnerships.

According to NBGH officials, plan design is the key to managing the use of specialty prescriptions as well as the costs. The report details progress resulting from the aggressive use of utilization review, case management and prior authorization for specialty drugs. Other measures yielding positive results are the design of a specialty tier into the benefits plan and taking measures to administer specialty prescriptions in a facility separate from the hospital. Prescriptions authorized by a hospital or billed under the medical benefit are harder to track and often more costly.

Responding to Growing Demand for Transparency

Experts agree that a lack of true price transparency has contributed significantly to the inefficiency in healthcare. Several websites compare the costs for certain procedures at varying hospitals, but it’s still very difficult, if not impossible, to make an informed choice when preparing for a non-emergency procedure. As a result, most people still go to doctors participating in a covered network and follow physician referrals when a specialist is required. In most cases, these choices are made without any knowledge of the cost.

Powerful Mobile Technology

Today, leading TPAs are providing self-funded health plan members with a variety of very powerful mobile transparency tools. One new mobile app enables members to identify fair pricing for more than 200 common procedures, including surgeries, imaging and diagnostic testing. By linking a rewards program, the app awards financial incentives when high quality, competitively priced providers are selected over those with lesser ratings.

Another software maker that describes a third of healthcare procedures as “shoppable”, has introduced a mobile app that enables plan members to search for physicians by procedure, location and price. This tool even goes beyond facts and figures to provide detailed descriptions of the procedure being searched. When members need further assistance, care navigators are available to provide online support via a live chat option.

Expert Administration Still Matters

While a totally open pricing system may never be possible in a business as complex as healthcare, TPAs are making self-funded health plans more transparent all the time. Strategies such as Reference Based Pricing and Concierge Health Advocacy are having a tremendous impact on cost and employee engagement. And while insurance carriers typically withhold claims data from fully insured groups, TPAs are experts at helping their clients put valuable claims data to work to identify cost drivers and manage chronic conditions in ways that help the plan avoid catastrophic claims in the future.

As the transition from volume to value-based healthcare continues, more responsibility will land in the hands of plan members. Smart employers know that a well-designed health plan can foster positive change and lower costs only if members understand their benefits. As long as self-funded plans, highly personal service and creative ideas are allowed to flourish, the number of engaged consumers capable of making economically wise healthcare decisions will continue to grow.

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Why employees should max out HSA contributions

The article below was published on September 13, 2017 by Employee Benefit News, written by Robert Lawton.

With healthcare open enrollment season quickly approaching, 401(k) plan sponsors may want to spend some time educating participants on the use of health savings accounts. If you offer a high-deductible health plan to your employees, they probably have the ability to contribute to HSAs. I believe that nearly everyone eligible to contribute to an HSA should max out their HSA contributions each year. Here’s why.

HSAs are triple tax-free
HSA payroll contributions are made pre-tax and when balances are used to pay qualified healthcare expenses, they come out of HSA accounts tax-free. Earnings on HSA balances also accumulate tax-free. There are no other employee benefits that work this way.

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HSA payroll contributions are truly tax-free

Unlike pre-tax 401(k) contributions, HSA contributions made from payroll deductions are truly pre-tax in that Medicare and Social Security taxes are not withheld. Both 401(k) pre-tax payroll contributions and HSA payroll contributions are made without deductions for state and federal taxes.

No use it or lose it
Employees may confuse HSAs with flexible spending accounts, where balances not used during a particular year may be forfeited. With HSAs, unused balances carry over to the next year. And so on, forever. Well at least until the employee passes away. HSA balances are never forfeited due to lack of use during a year.

Retiree healthcare expenses
Anyone fortunate enough to accumulate an HSA balance that is carried over into retirement may use it to pay for many routine and non-routine healthcare expenses. HSA balances can be used to pay for prescription drugs, medical premiums, COBRA premiums, dental expenses, Medicare premiums, long-term care insurance premiums and of course any co-pays, deductibles or co-insurance amounts. There are no age 70 1/2 minimum distribution requirements on HSA accounts like there are on 401(k) and IRA accounts. This makes HSA accounts a much more tax-efficient way of paying for healthcare expenses in retirement, especially if the alternative is taking a taxable 401(k) or IRA distribution. Continue reading

Wake-Up Call Saves Health Plan Over $3,000

dg-realtimechoices-blogWhen a plan member was referred recently to a New York area physician for a sleep study, she took it upon herself to compare costs at other facilities. Her research quickly showed that the provider’s price of $4,302 was much higher than the “fair” price of $1,300 available at another facility in her area. By using RealTimeChoices to access the Healthcare Bluebook, the member not only found a high quality local provider to conduct the sleep study, but saved $3,002 in the process!

RealTimeChoices is a convenient healthcare cost transparency tool (mobile app) available from Diversified Group, New England’s first and longest standing independent Third Party Administration firm. Easily accessed by website or mobile device, the RealTimeChoices app enables plan members to shop for and identify fair prices for healthcare services from physicians and other providers in their local area.

By following familiar red, yellow and green “traffic light” graphics, members can see the range of prices charged by various local providers for common services or procedures. Providers offering “fair” prices are easily identified by green indicators. Quality ratings and patient reviews are also available.

For more information on RealTimeChoices and other cost transparency tools, contact Diversified Group at 888-322-2524 or visit dgb-online.com.

Healthcare Hiring Slows

healthcare-hiringThe Altarum Center for Sustainable Health Spending reports a significant drop in health hiring, pricing and spending during the first five months of this year. On average, 22,000 jobs per month were added by hospitals and ambulatory care facilities, compared to 32,000 per month during the same period in 2016. While the healthcare sector continues to be the biggest contributor to overall U.S. job growth, Founding Director Dr. Charles Roehrig expects the 3-year run of greater than 5% growth in overall health spending to end, mostly due to uncertainty over efforts to repeal and replace ACA and a smaller increase in overall spending by consumers.

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