Getting Creative Can Attract Talent

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With unemployment for college-educated people age 25 and above at just 2.2%, it’s been a long time since we’ve seen a jobs market this tight. To attract and retain workers in this environment, growing companies are offering more than just competitive health benefits, and this is especially true for smaller companies forced to compete with larger companies.

Executive search firms have shared examples of employers going above and beyond their health plan by offering additional compensation to cover a candidate’s projected out-of-pocket medical expenses going forward. Technology-related firms in competitive markets are adding wellness benefits like on-site clinics or pre-arranged access to nearby fitness centers. For early to mid-career employees, companies are expanding their family leave or flex-time policies to provide easier transitions for young parents returning to work.

Flexibility and More

Whether it be more paid time off or arranging your work day to meet outside demands on your time, flexibility is becoming increasingly important, especially when you’re dealing with millennials or X-ers. Equally important to young workers is the culture present at an organization and the opportunity to make a difference – to know that what they are doing is helping their community or the world at large.

From unique apprenticeship programs at manufacturing and industrial companies to help with retiring outstanding student debt, more employers are looking for creative ways to gain an edge that will appeal to qualified, prospective employees. In a really tight job market, it pays to be creative.

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Drug Cost Information Bills

dgb_drugcostsIn 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.

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Are You Encouraging Members to Shop for the Best Care and the Best Price?

It can be as easy as handing them a check for a percentage of savings.

In last month’s HCU, we discussed the flexibility that self-funding provides – emphasizing that within regulatory parameters, self-funding gives the employer significant power over plan design, selection of providers, ways to incentivize plan members and much more.

These days, more and more employers are choosing to reward employees who do their homework and find high quality care at more affordable prices. We’ve all heard about joint replacements in major markets ranging in price from $11,000 to $120,000 or hospital charges for baby deliveries varying from $8,000 to $35,000. Or how about the $300 nebulizer that can be found on Amazon for $118 – need we continue?

While naysayers are quick to complain about employees who seem oblivious to the healthcare cost crisis, smart employers are encouraging their members to become part of the solution.

Many incentivize employees to help lower prescription drug costs by waiving copays on generics. Encouraging the use of Telemedicine and Minute Clinics goes a long way to help reduce Emergency Room utilization.

Still other plans are giving a significant percentage of their savings back to every employee who chooses a recommended hospital for a costly procedure. This can amount to hundreds or even thousands of dollars – real money!

These measures are not rocket science. Rather they are good old-fashioned common sense – no different than choosing one credit card over another because it gives you cash back on your purchase. We respond to incentives all the time and so do your employees.

To learn how Diversified Group helps self-funded employer groups turn members into responsible healthcare consumers, just give us a call.

Tell Us How You Feel!

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States Crack Down on Balance Billing

Healthcare CostsCurrently, 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.

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Transparency in healthcare: The case for an employer bill of rights

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This article was published on January 31, 2019 on Employee Benefit News, written by Steve Kelly.

Today more than ever before, benefits and human resources professionals are struggling to provide their teams with quality coverage at affordable rates. Costs have skyrocketed for the more than 150 million Americans who receive healthcare coverage through their workplace — more than doubling since 2008, according to the Kaiser Family Foundation.

Private health spending by businesses has steadily grown year after year and accounts for 20% of the $3.3 trillion of total health spending in the U.S. Businesses are finding that they can’t afford to wait any longer. They need to take control of their healthcare costs and seek resources to make changes to the plans they currently offer.

With the complexities surrounding the decision-making process for benefits programs, businesses often feel unaware, or worse yet, misled when it comes to their foundational rights regarding health plans.

Enter the Employer Bill of Rights — an initiative to help business owners empower themselves to learn and exercise the basic rights often overlooked in today’s healthcare system and take an activist role as they investigate and select healthcare options.

Knowledge is power

The employer bill of rights is rooted in the mission that every business owner needs to take responsibility for providing the best possible benefits program to their employees. Businesses can utilize the employer bill of rights as a tool and learn how to pay for healthcare like any other business expense.

With the employer bill of rights, employers are empowered to:

1. Pay a fair amount for healthcare.
Healthcare costs are often the second largest operating expense after employee wages. Employers do not have to accept the status quo for their health plan and pay significantly inflated medical expenses.

2. Know what healthcare services actually cost.
A traditional PPO health plan typically leaves the employer in the dark about how plan parameters were set by the insurer and medical provider. Businesses have a right to know the cost of medical services.

3. Audit medical bills.
Billing mistakes and inflation of medical charges are common. Businesses and individuals have a right to carefully evaluate healthcare expenses. A line-by-line auditing of medical bills helps ensure the charges are accurate and fair.

4. Explore your health plan options.
By partnering with an informed and experienced healthcare consultant, employers can discover health plan options beyond the traditional PPO model. A self-funded health plan, where employers pay for medical claims as services are rendered instead of providing ongoing and advanced payments to an insurance company, can take employers on the path toward more control over healthcare spending.

Self-funding is on the rise, with the number of businesses deciding to self-insure increasing by nearly $37 between 1996 and 2015, according to the Employee Benefit Research Institute.

5. Offer your employees a comprehensive and affordable benefits program.
Employees count on their employer-sponsored health plans to be reliable and financially feasible. Employers have a right to offer healthcare solutions that minimize the financial burden on the plan member.

6. Design a health plan to meet your unique needs.
The best health plans are well-rounded and flexible. Employers have the right to customize their health plan to determine the approach that best suits the needs of their business and team. Unlike traditional health plans, self-funded plans are customizable.

7. Defend the best interests of your business and your employees when paying for healthcare.
Surprise medical bills and inflated prices are common, but healthcare finances do not have to be handled alone. Employers and individuals have the right to access advocacy services that support fair and reasonable healthcare payments and help employers meet their fiduciary responsibility.

8. Make direct connections with providers and health systems.
Fair outcomes can be achieved when people work together. By creating direct partnerships with providers and health systems in their communities, employers can become good stewards of healthcare by building bridges and driving quality healthcare experiences for all.

The path to activism

Change in healthcare is possible when businesses take charge and challenge the status quo. As we continue to see the rise of self-funded health plans, the growth of reference-based, or metric-based, pricing is following suit.

The reference-based pricing approach starts at the bottom with an actual cost amount, then adds a fair profit margin to calculate a total cost of service. Simply stated, it allows employers to utilize rational limits of payment to medical providers instead of relying on the traditional PPO model.

Businesses can be activists for change by standing up against out-of-control healthcare costs, and they can start by adopting the employer bill of rights and investigating reference-based pricing. By innovating their healthcare solutions and turning away from insurance plans which have failed to adapt to the changing healthcare landscape, business owners have the opportunity to improve the health plans they offer their employees, transform their bottom line and help spark reform for businesses across the country.

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Who says your health plan has to cost 5% more every year?

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Done right, self-funding provides the flexibility needed to control costs.

A 2018 Kaiser Employer Survey showed that the cost of employer-based, family coverage rose to $19,616, an increase of 5 percent from the prior year. While this increase may be considered moderate or acceptable by many employers, we work hard to help our self-funded clients raise the bar (or in this case lower the bar).

In contrast to fully-insured plans, partial self-funding gives employers the freedom to write their own plan document. This enables our clients to adopt a totally different mindset – a “take charge” attitude that not only allows a plan to meet employees’ needs but encourages members to do what they can to keep costs in check.

After focusing on plan design and cost management, we turn our attention to claims data. While others may be quick to pay claims, we help clients look closely at claim costs each month. We use the data to identify trends, treatment patterns or chronic conditions that have the potential to result in a high dollar claim. When we see something that raises a red flag, we go to work on it immediately, looking for ways to minimize costs while striving to achieve the best possible outcome.

The bottom line is that sitting back and hoping that healthcare costs won’t increase next year will not accomplish a thing. Managing the rising cost of healthcare takes know-how, expert administration and the ability to act when cost saving opportunities surface. These are the things we do for our clients each and every day. To raise the bar for your health plan, give us a call at your convenience.

Tell Us How You Feel!

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IRS Publishes PCOR Fees through September 2019

The Patient-Centered Outcomes Research Trust Fund fee is a fee on issuers of health insurance policies and plan sponsors of self-insured health plans that helps to fund the Patient-Centered Outcomes Research Institute (PCORI), which was established by the Affordable Care Act (ACA). The institute assists, through research, patients, clinicians, purchasers and policy-makers, in making informed health decisions by advancing the quality and relevance of evidence-based medicine. The institute compiles and distributes comparative clinical effectiveness research findings. Under the ACA, all medical plans are responsible for paying the Patient-Centered Outcomes Research fee to the IRS, based on the number of plan participants. If the plan is insured, the insurance carrier pays the fee on behalf of the policyholder. If the plan is self-insured, the employer/plan sponsor must file the Form 720 for the second quarter and pay the fee to the IRS directly.

The IRS recently published its PCOR fee for policy and plan years ending January through September 2019 and the applicable dollar amount is $2.45, which is multiplied by the number of covered lives determined for the appropriate period.

The PCOR program will sunset in 2019. The last payment will apply to plan years that end by September 30, 2019 and that payment will be due in July 2020. There will not be any PCOR fee for plan years that end on October 1, 2019 or later.

The PCOR fee is paid by the health insurer for fully insured plans. All self-insured medical plans, including health FSAs and HRAs must pay the fee unless they are considered an excepted benefit:

    • A health FSA is an excepted-benefit as long as the employer does not contribute more than $500/year to the accounts and offers another medical plan with non-excepted benefits.
    • An HRA is an excepted-benefit if it only reimburses for excepted-benefits (e.g., limited-scope dental and vision expenses or long-term care coverage) and is not integrated with the group medical plan.

The PCOR fee is calculated off the average number of lives covered during the policy year. That means that all parties enrolled will have to be accounted for such as dependents, spouses, retirees, and COBRA beneficiaries. Depending on when the plan starts and ends also can determine the fee per form. Participating employees and dependents are counted as covered lives. For HRA and health FSA plans, just count each participating employee as a covered life.

Clients who have elected to have Diversified Group assist with the PCOR fee calculation can expect an email in June 2019 which will include a copy of the completed Form 720 and a PCOR calculation worksheet with supporting documentation. For the current year, clients will need to file the Form 720 by July 31, 2019.

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