Spotlight on PEOs

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Join us as JA hosts our next Journey+ event featuring panelists from FullStack to gain insight on PEOs, how they work, common misconceptions, and insight to help determine if a PEO may be right for your organization.

During this session, you will gain actionable insight on :

  • - What do PEOs solve
  • - How the PEO model works
  • - Insight on the experts, FullStack
  • - FullStack + JA Benefits, a unique partnership
  • - Debunked: Myths & misconceptions
  • - Assessing if a PEO is right for you

Walk away from this session with a deeper understanding and be ready to take action within your organization by joining us on October 12th at 8:30a ET.


Healthcare Quality and Cost

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Join us as JA hosts our next Journey+ event featuring panelists from Healthcare Bluebook. This session will leverage data to provide insight and clarity for employers into the proven relationship and balance between healthcare quality and cost. 

During this session, you will gain actionable insight on :

  • - Level set understanding of quality and cost 
  • - Variances found in quality as well as cost
  • - Why is this problematic
  • - Marrying quality and cost
  • - Case studies

Walk away from this session with a deeper understanding and be ready to take action within your organization by joining us on June 24th at 10a ET.


Tackle growing healthcare costs with earned wage access

Each year, there comes a time where health care costs rise, and many are looking for ways on how they will be able to afford out of pocket costs when it comes to their care. Benefits managers may help in more ways than they ever thought possible. Read this blog post to learn more.


It’s that time of year when we all learn that health care costs are going up (again).

As the nonprofit Business Group on Health reported, the average employee will be hit with $15,500 in out-of-pocket costs next year, and the average employer will pick up about two-thirds of that tab. Even with shared responsibility, those are big hits for both employer and worker, which is why health care strategy must be integral part of workforce management.

However, benefits managers may not be aware of a tool that may help keep health care costs down for both employers and workers, and which lets employees more fully participate in the economy they helped create.

Earned Wage Access (EWA), sometimes known as on-demand pay, is a revolutionary benefit that I wrote about back in May. It comes at no cost to employers, and is available to workers at little or even no cost, depending on the provider.

Earned Wage Access allows workers to access a portion of their earned wages that they have not yet been paid on. Depending on the provider, those wages can be immediately accessed on the provider’s payroll card, or just about any debit card.

What does on-demand pay have to do with health care?

When employees receive medical services, payment is often required up front. If employees only get their paycheck every two weeks, they may not have access to liquidity to pay for those services. The result is that an employee may be forced to delay a necessary visit or procedure, and if they are suffering from an acute condition, their health may be severely compromised.

However, with immediate access to the money employees have earned, but not yet been paid on, they have access to health care in the moment. Waiting rooms are bad enough. Waiting periods for basic health care are unnecessary and harmful.

There’s another reason why on-demand pay is critical to your health care strategy. There is a stealth health care crisis brewing in America. Millions have delayed preventative and necessary care due to the COVID-19 situation.

Every delayed preventative screening, test or check-up can result in a failure to discover a serious medical condition that requires treatment. That raises treatment costs down the line for both company health plan and employee.

By wrapping earned wage access into your health care strategy, you can encourage workers to utilize preventative and maintenance care at any time — not just on payday. Doing so also eliminates a common impediment: some people just don’t like to go to the doctor. If they have the excuse not to go, they’ll use it. EWA removes that psychological obstacle.

The same goes for access to medications. High cholesterol, high blood pressure, anxiety/depression, and many other chronic conditions require regular doses of prescribed drugs. Missing even a single day of some of these medications can significantly increase risk of adverse consequences in patients.

Earned wage access allows employees to refill medications when they need to. Waiting can be deadly. Some EWA providers even offer prescription discounts with their smartphone app.

Physicians encourage timely health care for obvious reasons. Employers should encourage it as well, not only out of concern for workers, but because timely health care can result in lower health care costs. However, it’s one thing to encourage timely health care visits. It’s another to offer timely pay to workers so they can meet that request. Earned wage access creates immediate health care access.

On-demand pay usually comes at no cost to employers. Some providers are already integrated with the largest payroll services, and others are integrated with dozens of them. The cost of earned wage access varies by provider, but certain ones offer the service at no cost for employees who use the provider’s payroll card. Other services have costs that are extremely low.

Adding earned wage access to your benefit plan will benefit your overall health care strategy, and your employees.

SOURCE: Meyers, L. (05 October 2020) "Views: Tackle growing healthcare costs with earned wage access" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/tackle-growing-healthcare-costs-with-earned-wage-access


How benefit advisers can hold healthcare plans accountable for their prices

 


Brokers and consultants already know that much of the growth in health benefit costs is not driven by insurer and TPA rate increases, but rather by the increase in the price and volume of healthcare services. While some of these costs are due to growing survivability rates for serious diseases and therapeutic improvements, much are avoidable, such as expenses associated with unnecessary care and unnecessarily expensive care. Evidence of variability of costs is found in the fact that unit cost and utilization can vary wildly from health system to health system, even within the same market.

Read more: 4 drivers of healthcare costs — and what advisers should do

Just because macro healthcare economics is the primary driver of overall health costs, doesn’t mean that health plans are powerless to control price increases. Even though health plans can and do negotiate rates directly with health systems in their networks, too often they don’t do everything they can to offer exceptional value to their customers. They don’t ask the right questions of health systems, they don’t practice thorough utilization management, and they don’t contract exclusively with providers who focus on high-value care. In other words, they don’t work hard enough to eliminate unnecessary costs or to bring prices down. Instead, they treat them as a given and pass those costs on to their customers.

Too often, benefit advisers take the whole healthcare market as a given, especially due to the popularity of broad preferred provider organization (PPO) networks, which include almost every system in an area. But the reality is that economics vary dramatically from system to system, so employee benefit advisors need to understand local economics in order to effectively evaluate network differences and find value. They can do this by:

  • Heavily and skeptically questioning carriers and TPAs to understand their networks and participating providers. Examples of questions to ask include: Tell me your opinion about different health systems in your network? How much do negotiated fees vary for outpatient services, professional services, etc.? Why is a specific expensive provider part of your narrow / high-performance network?

It’s also important to ask when a contract with a specific health system is up and if it will be renegotiated soon, since a new contract could include very different rates from the current one. Note that some of the time, carriers will discuss rates as a function of Medicare, but because Medicare DRG rates can vary dramatically from hospital to hospital, an adviser needs to understand Medicare base rates.

  • Analyzing claims. Every adviser has plenty of these available to them, and they should be analyzing those claims to determine which providers are lower cost and which are higher cost. In particular, it’s important to look at outpatient rates, facility rates, and professional rates, by specialty. It’s also important to compare the same diagnosis codes across providers. For example, claims could reveal that a hypothetical Dr. Jones operates on 100 patients out of 100, while a hypothetical Dr. Smith operates on only 50 patients out of 100 with the same condition. To figure out why this discrepancy exists, we would have to dig deeper since some doctors or practices may cater to only high-risk patients. Claim data can help shed light on health plan information that is not typically available to the public as health plan rates are often proprietary but appear on claims.

Taking all of these steps will help benefit advisers achieve something essential: holding health plans accountable for their prices. If a health plan doesn’t aggressively hunt for high value providers and reward them, you should ask why. And if you don’t like their answer, you probably identified a plan that isn’t a good fit for your clients because it doesn’t deliver on what matters most: quality care offered at an affordable price without compromising coverage.

SOURCE: Cohen, A. (04 November 2020) "How benefit advisers can hold healthcare plans accountable for their prices" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/how-benefit-advisers-can-hold-healthcare-plans-accountable-for-their-prices


New direct primary care rules are a tough pill for HSAs

By law, to qualify for an HSA, individuals must be covered by a high deductible health insurance plan. Read this blog post to learn more.


As an employee benefits attorney and compliance consultant, last summer’s executive order on “improving price and quality transparency in American healthcare to put patients first” piqued my interest. In particular, I honed on in section 6(b), aimed at treating expenses related to direct primary care arrangements as eligible medical expenses.

As someone dealing with a complicated medical history, digging into the order and digesting the resultant proposed IRS rule was more than my job – it was and is part of my life.

Several years ago, I decided to give direct primary care a try. For about $100 a month, I gained direct access to and the undivided attention of a physician who knows me and my unique medical needs. I pay a flat, upfront fee and my doctor coordinates and manages my treatment, which isn’t always smooth sailing for someone dealing with a complex connective tissue disorder. My primary care physician serves as the coach and quarterback of my medical care, directing tests, meds, and visits to various specialists like rheumatologists or neurologists. If I have a common cold or infection, she’s readily available to prescribe treatment and set my mind at ease.

Since arriving on the scene in the 2000s, direct primary care has grown in popularity and availability. In the age of skyrocketing monthly premiums and a multitude of confusing options, more Americans are flocking to direct primary care to supplement their existing coverage. Some employers are even looking at it to drive down costs.

Now, direct primary care only covers, well, primary care, so I’ve paired it with a high-deductible healthcare plan and a health savings account to pay for my many additional medical expenses. I’m not alone: more than 21 million Americans are following the same path.

However, rather than making direct primary care more accessible, the proposed regulations actually make it virtually impossible for all of us with HSAs. Remember, by law, to qualify for an HSA, individuals must be covered by a high deductible health insurance plan. The rationale for this is consumers with more on the line are more responsible in controlling their health care costs and thus rewarded with the tax-advantaged benefits of an HSA.

Here’s the problem: the proposed regulations define direct primary care as a form of insurance – one that is not a high-deductible health plan and would therefore disqualify me from having access to an HSA.

Regulators point out that direct primary care arrangements provide various services like checkups, vaccinations, urgent care, lab tests, and diagnostics before the high deductible has been satisfied. According to the preamble to the proposed regulations, “an individual generally is not eligible to contribute to an HSA if that individual is covered by a direct primary care arrangement.”

Keep in mind, 32 states consider direct primary care a medical service rather than a health plan and exempt it from insurance regulation. Even the Department of Health and Human Services shares that view, noting in a March 12, 2012, final exchange rule that “direct primary care medical homes are not insurance.” In addition, the proposed rule itself includes some contradictory language and implications when it comes to defining direct primary care relating to other factors.

By its very nature, direct primary care is a contract between patient and physician without billing a third party. In cutting out the insurance companies, it seems obvious that direct primary care is not a competing insurance plan, but instead, a valuable service that can accompany existing coverage.

Furthermore, there is no clear justification for painting direct primary care as disqualifying medical insurance for those with HSAs. The IRS has more than enough flexibility and discretion to determine that direct primary care does not count as insurance. Regulators could do so while still treating direct primary care as a tax-deductible medical expense, which seems to be the intention of the proposed rule in the first place.

For millions of Americans, direct primary care has been a godsend in taking control of medical care, cutting through frustrating options, and gaining peace of mind when it comes to both health and healthcare costs. In short, direct primary care is everything primary care should be and was supposed to be. It’s an option that individuals should be permitted to access to complement (not compete with) high deductible health insurance plans and HSAs.

Although the comment period for the proposed regulations is now over, I am hopeful with a few tweaks and small changes they can better align with the stated purpose of the executive order, empowering patients to choose the healthcare that is best for them. If not, the new rules would likely be a hard pill to swallow for the entire direct primary care community.

SOURCE: Berman, J. (26 August 2020) "New direct primary care rules are a tough pill for HSAs" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/new-direct-primary-care-rules-are-a-tough-pill-for-hsas


Getting digital transformation in healthcare on the fast track

There are tremendous opportunities for digital transformation in the healthcare industry. Outdated protocols, overextended workforces and hundreds of wasted hours in administrative tasks are just a few of the opportunities for digital overhaul in the healthcare industry. Read this blog post to learn more.


At first glance, the healthcare field seems to be a goldmine for digital innovation. An overextended workforce, outdated protocols, hundreds of wasted hours in administrative tasks, a patient population that is wide open to digital solutions, a multitude of inefficiencies and redundancies — the opportunities for digital overhaul in healthcare are myriad.

Yet every year the graveyard of digital health tools gets more crowded as innovators fail to overcome healthcare’s uniquely complex barriers to their adoption.

Goldmine and graveyard, the tremendous opportunities for digital transformation in healthcare and the seemingly insurmountable barriers to its adoption are two sides of a coin. They spring from the same root causes: the lack of financial incentives to implement digital solutions; the high stakes that necessitate a cautious approach; and most significantly, providers’ seeming unwillingness to abandon proven workflows or sunk costs to take a chance on a disruptive solution.

This last cause is often the greatest barrier to getting innovation through the door.

Clinicians are the primary end-users of digital health, and a clinical champion can make all the difference in whether a solution is adopted. But in the face of the physician shortage in the United States, doctors don’t have time to trade out their proven workflows to take a risk on a solution that may or may not be successful, and will almost certainly take time to learn and implement into their practice. The majority of providers are already at capacity — 80% have no time to see more patients or take on more duties. Thus what seems like an unwillingness to change is often an inability to find the time to change.

Many physicians agree that digital tools and solutions are worthwhile in theory, but with an average workload of 40-60 hours a week, they don’t have the space in their schedules to evaluate these solutions. As it is, the amount of patients that a physician sees in a day (the most rewarding part of their jobs, according to 80% of doctors) has been reduced in recent years to make time for the mountains of non-clinical paperwork and administrative duties that they are responsible for.

Because of their packed schedules, physicians often default to the status quo for sanity’s sake: 40% of physicians see up to 20 patients per day, with another 40% seeing more (anywhere from 21 to over 70); and all spend almost a quarter of their day on administrative duties like inputting data into EMRs. If physicians do have a chance to sit down with innovators, it’s in the margins of their day — instead of an exciting opportunity for change, a pitch-meeting with an innovator represents another 15 minutes they have to take from their family at the end of a long day, an extra 10 minutes of sleep lost in the morning to get into the office early, the interruption of the small respite of a lunch break.

It’s no surprise that in a 2018 survey conducted by the Physician’s Foundation, 89% of physicians polled felt that they had somewhat to very little influence on changes in healthcare — they have no time to research chances to optimize their practice, and thus essentially no voice in its improvement. Yet only a physician has the kind of intimate knowledge of his or her needs and workflow that can drive effective innovations. Perhaps digital innovations have failed to take hold because the people making decisions around tools to help doctors are not doctors.

If we are going to break the barriers to digital transformation in healthcare, we need to expect physicians to think critically about how their job needs to evolve. And no one can do this without time to reflect on and evaluate the status quo. In the corporate world, executives and other employees are encouraged to do research, to take time in their schedules for professional development. Many tech giants — most famously Google, but also Facebook, Linkedin, Apple, and others — employ the 20% time model, where roughly one-fifth of an employee’s schedule is focused on personal side projects (those side projects have turned into Gmail, Google Maps, Twitter, Slack, and Groupon, to name a few). This is the model that we need to embrace in the healthcare system.

We need to look past the excuse that “doctors are traditionally conservative” and that is why innovation is dead in the water. While that narrative may have explained why cutting edge technology is not more readily adopted by physicians, there are other problems that it doesn’t account for — like why rates of compliance for new protocols and best practices are abysmally low. Those symptoms should point us to a different solution, a solution we can do something about. Not “doctors need to get with the times” but doctors need to get some time.

One solution is to advocate for a higher price per consultation that can eliminate the existential need to pack daily schedules with patient appointments. Under the current model, doctors are incentivized to take as many appointments as possible, double — even triple — booking slots to squeeze as much productivity out of current rates of reimbursement. But with increased reimbursement per consultation, physicians can more easily cover the cost of their salaries for their employers, which can then allow providers to take more time out of the clinic and in the office, thinking critically about their roles and how to improve their delivery of care.

Of course, this begs the question — who pays? The ones who stand to benefit most, of course. Giving physicians more time to develop professionally and research solutions is in the best interest of those who take on the burden of health costs, health insurance providers and the government (ie, taxpayers). Patient outcomes are almost guaranteed to improve when physicians have the time to stay up to date on best practices, and this directly reduces the burden of cost on those stakeholders.

Physician salaries represent a very small part of healthcare costs, paling in comparison to drugs and diagnostic care. If more money was paid to the physician on the front end to develop and implement more preventative solutions — by payers or government subsidies — the cost savings would increase exponentially, making an increase in physician salary an astute business move as well as one that can have a dramatic impact on patients’ lives.

SOURCE: Pablo Segura, J. (11 October 2019) "Getting digital transformation in healthcare on the fast track" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/getting-digital-transformation-in-healthcare-on-the-fast-track


Health insurance surpass $20,000 per year, hitting a record

The cost of family health coverage has now surpassed $20,000, a record high, according to an annual survey of employers. The survey also revealed that while most employers pay most of the costs of coverage, workers' average contribution for a family plan is now $6,000. Read this blog post to learn more.


The cost of family health coverage in the U.S. now tops $20,000, an annual survey of employers found, a record high that has pushed an increasing number of American workers into plans that cover less or cost more, or force them out of the insurance market entirely.

“It’s as much as buying a basic economy car,” said Drew Altman, chief executive officer of the Kaiser Family Foundation, “but buying it every year.” The nonprofit health research group conducts the yearly survey of coverage that people get through work, the main source of insurance in the U.S. for people under age 65.

While employers pay most of the costs of coverage, according to the survey, workers’ average contribution is now $6,000 for a family plan. That’s just their share of upfront premiums, and doesn’t include co-payments, deductibles and other forms of cost-sharing once they need care.

The seemingly inexorable rise of costs has led to deep frustration with U.S. healthcare, prompting questions about whether a system where coverage is tied to a job can survive. As premiums and deductibles have increased in the last two decades, the percentage of workers covered has slipped as employers dropped coverage and some workers chose not to enroll. Fewer Americans under 65 had employer coverage in 2017 than in 1999, according to a separate Kaiser Family Foundation analysis of federal data. That’s despite the fact that the U.S. economy employed 17 million more people in 2017 than in 1999.

“What we’ve been seeing is a slow, slow kind of drip-drip erosion in employer coverage,” Altman said.

Employees’ costs for healthcare are rising more quickly than wages or overall economy-wide prices, and the working poor have been particularly hard-hit. In firms where more than 35% of employees earn less than $25,000 a year, workers would have to contribute more than $7,000 for a family health plan. It’s an expense that Altman calls “just flat-out not affordable.” Only one-third of employees at such firms are on their employer’s health plans, compared with 63% at higher-wage firms, according to the Kaiser Family Foundation’s data.

The survey is based on responses from more than 2,000 randomly selected employers with at least three workers, including private firms and non-federal public employers.

Deductibles are rising even faster than premiums, meaning that patients are on the hook for more of their medical costs upfront. For a single person, the average deductible in 2019 was $1,396, up from $533 in 2009. A typical household with employer health coverage spends about $800 a year in out-of-pocket costs, not counting premiums, according to research from the Commonwealth Fund. At the high end of the range, those costs can top $5,000 a year.

While raising deductibles can moderate premiums, it also increases costs for people with an illness or who gets hurt. “Cost-sharing is a tax on the sick,” said Mark Fendrick, director of the Center for Value-Based Insurance Design at the University of Michigan.

Under the Affordable Care Act, insurance plans must cover certain preventive services such as immunizations and annual wellness visits without patient cost-sharing. But patients still have to pay out-of-pocket for other essential care, such as medication for chronic conditions like diabetes or high blood pressure, until they meet their deductibles.

Many Americans aren’t prepared for the risks that deductibles transfer to patients. Almost 40% of adults can’t pay an unexpected $400 expense without borrowing or selling an asset, according to a Federal Reserve survey from May.

That’s a problem, Fendrick said. “My patient should not have to have a bake sale to afford her insulin,” he said.

After years of pushing healthcare costs onto workers, some employers are pressing pause. Delta Air Lines Inc. recently froze employees’ contributions to premiums for two years, Chief Executive Officer Ed Bastian said in an interview at Bloomberg’s headquarters in New York last week.

“We said we’re not going to raise them. We're going to absorb the cost because we need to make certain people know that their benefits structure is real important,” Bastian said. He said the company’s healthcare costs are growing by double-digits. The Atlanta-based company has more than 80,000 employees around the globe.

Some large employers have reversed course on asking workers to take on more costs, according to a separate survey from the National Business Group on Health. In 2020, fewer companies will limit employees to so-called “consumer-directed health plans,” which pair high-deductible coverage with savings accounts for medical spending funded by workers and employers, according to the survey. That will be the only plan available at 25% of large employers in the survey, down from 39% in 2018.

Employers have to balance their desire to control costs with their need to attract and keep workers, said Kaiser’s Altman. That leaves them less inclined to make aggressive moves to tackle underlying medical costs, such as by cutting high-cost hospitals out of their networks. In recent years employers’ healthcare costs have remained steady as a share of their total compensation expenses.

“There’s a lot of gnashing of teeth,” Altman said, “but if you look at what they do, not what they say, it’s reasonably vanilla.”

SOURCE: Tozzi, J. (25 September 2019) "Health insurance surpass $20,000 per year, hitting a record" (Web Blog Post). Retrieved from https://www.benefitnews.com/articles/health-insurance-costs-surpass-20-000-per-year


8 renewal considerations for 2020

Open enrollment is quickly approaching. With a new renewal season comes new considerations for plan administrators. Read this blog post from Employee Benefit News for 8 considerations to make this year.


The triumphant return of the Affordable Care Act premium tax (the health insurer provider fee).

This tax of about 4% is under Congressional moratorium for 2019 and returns for 2020. Thus, fully insured January 2020 medical, dental and vision renewals will be about 4% higher than they would have been otherwise. Of note, this tax does not apply to most self-funded contracts, including so-called level-funded arrangements. Thus, if your plans are presently fully insured, now may be a good time to re-evaluate the pricing of self-funded plans.

Ensure your renewal timeline includes all vendor decision deadlines.

As the benefits landscape continues to shift and more companies are carving out certain plan components, including the pharmacy benefit manager, you may be surprised with how early these vendors need decisions in order to accommodate benefit changes and plan amendments. Check your contracts and ask your consultant. Further, it seems that our HRIS and benefit administration platforms are ironically asking for earlier and earlier decisions, even with the technology seemingly improving.

Amending your health plan for the new HSA-eligible expenses.

In July of this year, the U.S. Treasury loosened the definition of preventive care expenses for individuals with certain conditions.

While these regulations took effect immediately, they won’t impact your health plan until your health plan documents are amended. Has your insurer or third-party administrator automatically already made this amendment? Or, will it occur automatically with your renewal? Or is it optional? If your answer begins with “I would assume…,” double-check.

Amending your health plan for the new prescription drug coupon regulations.

As we discussed in July of this year, these regulations go into effect when plans renew in 2020. In short, plans can only prevent coupons from discounting plan accumulators (e.g., deductible, out-of-pocket maximum) if there is a “medically advisable” generic equivalent.

If your plan is fully insured, what action is your insurer taking? Does it seem compliant? If your plan is self-funded, what are your options? If you can keep the accumulator program and make it compliant, is there enough projected program savings to justify keeping this program?

Is your group life plan in compliance with the Section 79 nondiscrimination rules?

A benefit myth that floats around from time to time is that the first $50,000 in group term life insurance benefits is always non-taxable. But, that’s only true if the plan passes the Section 79 nondiscrimination rules. Generally, as long as there isn’t discrimination in eligibility terms and the benefit is either a flat benefit or a salary multiple (e.g., $100,000 flat, 1 x salary to $250,000), the plan passes testing. Ask your attorney, accountant, and benefits consultant about this testing. If you have two or more classes for life insurance, the benefit is probably discriminatory. If you fail the testing, it’s not the end of the world. It just means that you’ll likely need to tax your Section 79-defined “key employees” on the entire benefit, not just the amount in excess of $50,000.

Is your group life maximum benefit higher than the guaranteed issue amount?

Surprisingly, I still routinely see plans where the employer-paid benefit maximum exceeds the guaranteed issue amount. Thus, certain highly compensated employees must undergo and pass medical underwriting in order to secure the full employer-paid benefit. What often happens is that, as benefit managers turnover, this nuance is lost and new hires are not told they need to go through underwriting in order to secure the promised benefit. Thus, for example, an employee may think he or she has $650,000 in benefit, while he or she only contractually has $450,000. What this means is the employer is unknowingly self-funding the delta — in this example, $200,000. See the problem?

Please pick up your group life insurance certificate and confirm that the entire employer-paid benefit is guaranteed issue. If it is not, negotiate, change carriers, or lower the benefit.

Double-check that you haven’t unintentionally disqualified participant health savings accounts (HSAs).

As we discussed last December, unintentional disqualification is not difficult.

First, ensure that the deductibles are equal to or greater than the 2020 IRS HSA statutory minimums and the out-of-pocket maximums are equal to or less than the 2020 IRS HSA statutory maximums. Remember that the IRS HSA maximum out-of-pocket limits are not the same as the Affordable Care Act (ACA) out-of-pocket maximum limits. (Note to Congress – can we please align these limits?)

Also, remember that in order for a family deductible to have a compliantly embedded single deductible, the embedded single deductible must be equal to or greater than the statutory minimum family deductible.

Complicating matters, also ensure that no individual in the family plan can be subject to an out-of-pocket maximum greater than the ACA statutory individual out-of-pocket maximum.

Finally, did you generously introduce any new standalone benefits for 2020, like a telemedicine program, that Treasury would consider “other health coverage”? If yes, there’s still time to reverse course before 2020. Talk with your tax advisor, attorney, and benefits consultant.

Once all decisions are made, spend some time with your existing Wrap Document and Wrap Summary Plan Description.

For employers using these documents, it’s easy to forget to make annual amendments. And, it’s easy to forget, depending on the preparer, how much detail is often in these documents. For example, if your vision vendor changes or even if your vision vendor’s address changes, an amendment is likely in order. Ask your attorney, benefits consultant, and third party administrators for help.

SOURCE: Pace, Z. (Accessed 9 September 2019) "8 renewal considerations for 2020" (Web Blog Post). Retrieved from https://www.benefitnews.com/list/healthcare-renewal-considerations-for-2020


Employers look to virtual services to curb rising health costs

According to the National Business Group on Health, 64 percent of employers believe virtual care will play a significant role in healthcare delivery. Employers are looking for ways to stem the rising costs of healthcare and find ways to better engage employees. Continue reading this blog post to learn more about virtual services.


WASHINGTON — With the continued cost of healthcare benefits expected to increase by another 5%, topping $15,000 per employee, employers are looking for ways to stem the increase and better engage employees in holistic well-being.

One of those ways is through virtual care. The number of employers who believe virtual care will play a significant role in how healthcare is delivered in the future continues to grow, up to 64% going into 2020 from 52% in 2019, according to the National Business Group on Health’s annual healthcare strategy survey.

“Virtual care solutions bring healthcare to the consumer rather than the consumer to healthcare,” Brian Marcotte, president and CEO of NBGH said at a press briefing Tuesday. “They continue to gain momentum as employers seek different ways to deliver cost-effective, quality healthcare while improving access and the consumer experience. Of particular note is the growing interest among employers to offer virtual care for mental health as well as musculoskeletal conditions.”

The majority of respondents (51%) will offer more virtual care programs next year, according to the survey. Nearly all employers will offer telehealth for minor, acute services while 82% will offer virtual mental health services — a figure that’s expected to grow to 95% by 2022.

Virtual care for musculoskeletal management shows the greatest potential for growth, the study noted. While 23% of employers will offer musculoskeletal management virtual services next year, another 38% are considering it by 2022. Physical therapy is the best way to address musculoskeletal conditions and help avoid surgery, but it can be inconvenient and costly, said Ellen Kelsay, chief strategy officer at NBGH.

“Where we’ve seen a lot of development in areas of virtual solutions is to provide remote physical therapy treatments,” she said. “Employees can access treatment through their virtual app wherever it’s convenient for them.”

Regardless, employee utilization of virtual services still remains low. For example, while roughly 70% of large companies provide telemedicine coverage, only 3% of employees use it,according to prior NBGH data.

But many resources are out of sight and out of mind, Kelsay said. However, employers are focusing on offering high-touch concierge services to help workers better navigate the healthcare system.

Employers are reaching a point of saturation with the number of solutions that are available, but from the employee’s perspective, they just don’t know where to start, she added. “These concierge and navigator services really help point employees in the direction to the solution at the point in time they need it.”

In addition, the use of predictive analytics and claims data is also an opportunity to help employers get the right programs in front of employees in the moment, Marcotte added.

“Some of these engagement platforms are getting at personal messaging and predictive analytics. It’s not where we want it to be yet, but as that continues to get better, I think you’ll see utilization go up,” he said.

Source: Otto, N. (13 August 2019) "Employers look to virtual Services to curb rising health costs" (Web Blog Post). Retrieved from https://www.benefitnews.com/news/employers-look-to-virtual-services-to-curb-rising-healthcare-costs


Employers shouldn’t fear expansion of Medicare

Forty-five percent of large employers believe that Medicare should not be expanded, according to a new survey from the National Business Group on Health. Continue reading this article from Employee Benefits Advisor to learn more about the potential expansion of Medicare.


Like a significant chunk of American voters, a majority of large employers want to expand Medicare. Just not too much.

A new survey of 147 large employers from the National Business Group on Health found that 55% of them support a Medicare expansion that’s limited to older Americans. Only 23% think eligibility should drop to age 50, however, and 45% don’t think it should expand at all. A majority believe that a broader “Medicare for All” plan would increase health costs.

The same survey also highlights why employers should consider coming around on health reform that reduces their role in the system. The growth in health costs has outpaced inflation and wage growth for years, and the surveyed businesses expect it to rise 5% to $15,375 for each employee next year.

About 70% of those costs will fall on the companies, which plan to try everything from boosting virtual health services to investing in health concierges to rein them in, according to the survey.

History suggests that their best efforts might not amount to much.

Employer-sponsored insurance is America’s single largest source of health coverage. That’s mostly true because the IRS exempted employer health benefits from taxes in 1943, a move that created the federal government’s single biggest tax expenditure. Large companies derive some benefit from the current system because they can provide a significant tax-free benefit that helps them compete for talent and pay people less. But it comes with significant drawbacks. Employers have to devote substantial resources to providing healthcare and controlling costs. Many of them have no particular expertise or advantage in doing so.

The results are mixed. Yes, individuals with private insurance are generally satisfied with the quality of their coverage. They’re not nearly as happy about the cost as deductibles rise. The U.S. pays more than any other developed country for healthcare and medicines and receives worse results on a variety of metrics.

Employers pay particularly high prices and spend heavily on plans that have higher overhead than public alternatives. A recent RAND study found that employer-sponsored plans paid hospitals at 241% of Medicare rates in 2017. Employers are already effectively subsidizing public programs, not to mention the profitability of insurers, health care providers and drugmakers.

It’s not entirely their fault. The American system inherently fragments negotiating power, which gives providers a significant advantage and makes it difficult for even the largest employers to get a good deal. Turning a larger piece of healthcare over to the government would free companies to focus more time and resources on their actual business instead of on navigating the world’s most expensive and convoluted healthcare market.

Big businesses most likely fear big Medicare expansion in large part because it would lead to a significant tax increase. But looking at any tax increase as an enemy is a mistake. Those taxes represent a trade-off; they would replace some or all of the billions of dollars that employers are currently spending on care. Depending on what taxes are imposed and whether the public plan is able to control costs better than the current system — and it could hardly do worse — many employers could come out ahead.

There are a lot of unknowns when it comes to Medicare for All and plans that move the country in that direction. Employers are right to be skeptical until they know more, but the results could well shake out in their favor, and they shouldn’t be so quick to discount the approach.

SOURCE: Nisen, M. (15 August 2019)"Employers shouldn’t fear expansion of Medicare" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/articles/employers-shouldnt-fear-expansion-of-medicare