Health Reform Expert: Here’s What HR Needs to Know About GOP Repeal Bill Passing

The House of Repersentives has just passed the American Health Care Act (AHCA), new legislation to begin the repeal process of the ACA. Check out this great article from HR Morning and take a look how this new legislation will affect HR by Jared Bilski.

Virtually every major news outlet is covering the passage of the American Health Care Act (AHCA) by the House. But amidst all the coverage, it’s tough to find an answer to a question that’s near and dear to HR: What does this GOP victory mean for employers? 

The AHCA bill, which passed in the House with 217 votes, is extremely close to the original version of the legislation that was introduced in March but pulled just before a vote could take place due to lack of support.

While the so-called “repeal-and-replace” bill would kill many of the ACA’s taxes (except the Cadillac Tax), much of the popular health-related provisions of Obamacare would remain intact.

Pre-existing conditions, essential benefits

However, the new bill does allow states to waive certain key requirements under the ACA. One of the major amendments centers on pre-existing conditions.

Under the ACA, health plans can’t base premium rates on health status factors, or pre-existing conditions; premiums had to be based on coverage tier, community rating, age (as long as the rates don’t vary by more than 3 to 1) and tobacco use. In other words, plans can’t charge participants with pre-existing conditions more than “healthy” individuals are charged.

Under the AHCA, individual states can apply for waivers to be exempt from this ACA provision and base premiums on health status factors.

Bottom line: Under this version of the AHCA, insurers would still be required to cover individuals with pre-existing conditions — but they’d be allowed to charge astronomical amounts for coverage.

To compensate for the individuals with prior health conditions who may not be able to afford insurance, applying states would have to establish high-risk pools that are federally funded. Critics argue these pools won’t be able to offer nearly as much coverage for individuals as the ACA did.

Under the AHCA, states could also apply for a waiver to receive an exemption — dubbed the “MacArthur amendment” — to ACA requirement on essential health benefits and create their own definition of these benefits.

Implications for HR

So what does all this mean for HR pros? HR Morning spoke to healthcare reform implementation and employee benefits attorney Garrett Fenton of Miller & Chevalier and asked him what’s next for the AHCA as well as what employers should do in response. Here’s a sampling of the Q&A:

HR Morning: What’s next for the AHCA?
Garrett Fenton: The Senate, which largely has stayed out of the ACA repeal and replacement process until now, will begin its process to develop, amend, and ultimately vote on a bill … many Republican Senators have publicly voiced concerns, and even opposition, to the version of the AHCA that passed the House.

One major bone of contention – even within the GOP – was that the House passed the bill without waiting for a forthcoming updated report from the Congressional Budget Office.  That report will take into account the latest amendments to the AHCA, and provide estimates of the legislation’s cost to the federal government and impact on the number of uninsured individuals …

… assuming the Senate does not simply rubber stamp the House bill, but rather passes its own ACA repeal and replacement legislation, either the Senate’s bill will need to go back to the House for another vote, or the House and Senate will “conference,” reconcile the differences between their respective bills, and produce a compromise piece of legislation that both chambers will then vote on.

Ultimately the same bill will need to pass both the House and Senate before going to the President for his signature.  In light of the House’s struggles to advance the AHCA, and the razor-thin margin by which it ultimately passed, it appears that we’re still in for a long road ahead.

HR Morning: What should employers be doing now?
Garrett Fenton: At this point, employers would be well-advised to stay the course on ACA compliance. The House’s passage of the AHCA is merely the first step in the legislative process, with the bill likely to undergo significant changes and an uncertain future in the Senate. The last few months have taught us nothing if not the impossibility of predicting precisely how and when the Republicans’ ACA repeal and replacement effort ultimately will unfold.  To be sure, the AHCA would have a potentially significant impact on employer-sponsored coverage.

However, any employer efforts to implement large-scale changes in reliance on the AHCA certainly would be premature at this stage.  The ACA remains the law of the land for the time being, and there’s still a long way to go toward even a partial repeal and replacement.  Employers certainly should stay on top of the legislative developments, and in the meantime, be on the lookout for possible changes to the current guidance at the regulatory level.

HR Morning: Specifically, how should employers proceed with their ACA compliance obligations in light of the House passage of the AHCA?Garrett Fenton: Again, employers should stay the course for the time being, and not assume that the AHCA’s provisions impacting employer-sponsored plans ultimately will be enacted.  The ACA remains the law of the land for now.  However, a number of ACA-related changes are likely to be made at the regulatory and “sub-regulatory” level – regardless of the legislative repeal and replacement efforts – thereby underscoring the importance of staying on top of the ever-changing guidance and landscape under the Trump administration.

Fenton also touched on how the “MacArthur amendment” and the direct impact it could have on employers by stating it:

“… could impact large group and self-funded employer plans, which separately are prohibited from imposing annual and lifetime dollar limits on those same essential health benefits.  So in theory, for example, a large group or self-funded employer plan might be able to use a “waiver” state’s definition of essential health benefits – which could be significantly more limited than the current federal definition, and exclude items like maternity, mental health, or substance abuse coverage – for purposes of the annual and lifetime limit rules.  Employers thus effectively could be permitted to begin imposing dollar caps on certain benefits that currently would be prohibited under the ACA.”

See the original article Here.

Source:

Bilski J. (2017 May 5). Health reform expert: here’s what HR needs to know about GOP repeal bill passing [Web blog post]. Retrieved from address http://www.hrmorning.com/health-reform-expert-heres-what-hr-needs-to-know-about-gop-repeal-bill-passing/


Healthcare Services: Employees Want to Find Less Costly Care, but Need HR’s Help

Have your employees been looking for new ways to reduce their healthcare cost? Check out this article from HR Morning on how HR can be a great tool for helping your employees find the best healthcare for their budget by Jared Bilski.

HR pros have been urging employees to ask questions and shop around for less-costly, high quality health care for years now — and it looks like many employees are finally heeding the call.

That’s the good news regarding healthcare cost transparency.

Step in the right direction

Specifically, 50% of individuals have tried to find out how their health care would cost before getting care, according to a recent report by the Public Agenda and the Robert Wood Johnson Foundation.

A little more than half (53%) of the individuals who compared the prices of common healthcare services did, in fact, save money.

The report also broke down the various places employees turned to for price info before getting medical care and found:

  • 55% went to a friend, relative or colleague
  • 48% went to their insurance company (by phone or online)
  • 46% went to their doctor
  • 45% asked a receptionist or other doctor’s office staffer
  • 31% went to the hospital billing department
  • 29% asked a nurse
  • 20% relied on the Internet (other than their insurance company’s website), and
  • 17% used a mobile phone app.

Another encouraging finding from the report: Employees don’t think saving money on healthcare services means receiving lower quality care. In fact, 70% of individuals said higher prices aren’t a sign of better quality healthcare.

The bad news

But the report wasn’t all good news.

For one thing, many employees are painfully unaware of the disparity in pricing for similar healthcare services. In fact, fewer than 50% of Americans are aware that hospitals and doctor’s prices can vary.

There are also problems when employees do inquire or shop around for less costly health care.

Sixty three percent of Americans say there isn’t enough information about how much medical services cost.

And when employees do at least inquire about cost before seeking treatment, most don’t think the next and most critical step: comparing multiple providers’ prices. Just 20% of the study respondents who asked about pricing went on to compare pricing.

Where HR comes in

Overall, the report is good news for employers, and firms should take the findings as evidence employees are finally ready to help find ways to lower the company’s overall health costs.

But it’s up to HR pros to help them succeed.

One way: Rolling out “how to” session on healthcare service comparison tools and finding providers — and this is especially important for small- and mid-sized companies. Employees at these firms are more likely to seek medical services based solely on location.

As Tibi Zohar, president and CEO of DoctorGlobe put it:

“The reality for most small to mid-size companies is that their health plan members tend to continue to seek health care at the nearest hospital or the one recommended by their doctors or friends.”

Another effective tactic: Adding incentives when employees use cost transparency tools in the form of premium discounts, contributions to HSAs or FSAs or even old-fashioned gift cards.

Remember, the transparency tools are those that employees can relate to personally and show exactly how much they will pay out-of-pocket for medical services.

See the original article Here.

Source:

Bilski J. (2017 April 21). Healthcare services: employees want to find less costly care, but need HR’s help [Web blog post]. Retrieved from address http://www.hrmorning.com/healthcare-services-employees-want-to-find-less-costly-care-but-need-hrs-help/


Employers and the ACA – Its Status Quo for Now

With the passing of the AHCA, the ACA is now the norm for employers’ healthcare. Find out what employers need to know about ACA and how it will affect them in the future in this interesting article from Think Hr by Laura Kerekes.

The Trump administration’s effort to repeal and replace the Affordable Care Act (ACA) through legislation failed last month when House Republicans were unable to push their proposal forward. The proposed bill, called the American Health Care Act, would have eliminated most of the ACA’s taxes and fees on health plans along with removing penalties on large employers that did not offer coverage to their full-time workers. It is unclear whether Congressional leaders will make another attempt to legislate major changes in the ACA this year. Meanwhile, federal agencies under President Trump’s direction may begin to take steps to revise regulations that do not require changes in law.

The situation certainly has caused some confusion among employers, so it is important to note that, as of now, nothing has changed. The ACA’s existing rules for group health plans, required notices, and employer reporting duties remain in effect. Applicable large employers (ALEs), generally entities that employed an average of 50 or more full-time-equivalent employees in the prior year, are still subject to the ACA’s employer mandate or so-called “play or pay” rules.

As a reminder, here is a brief summary of the key ACA provisions that require action by employers:

Notices:

  • Employer Exchange Notice: Provide to all employees within 14 days of hire.
  • Summary of Benefits and Coverage (SBC): For group medical plan, provide SBC to eligible employees at enrollment and upon request.

Health Plan Fees:

  • Patient-Centered Outcomes Research Institute (PCORI): For self-funded group health plans, pay small annual fee by July 31 based on prior year’s average participant count.
  • Transitional Reinsurance Program (TRP): For self-funded plans that provided minimum value in 2016, annual fee was due by January 15, 2017 (or by January 15 and November 15, 2017 if paying in two installments).

Reporting:

  • W-2 Reporting: Report total cost of each employee’s health coverage on Form W-2 (box 12). This is informational only and has no tax consequences. (Employers that filed fewer than 250 Form W-2s for prior year are exempt.)
  • Forms 1094 and 1095: ALEs only: Report coverage offer information on all full-time employees. Self-funded employers only (regardless of size): Report enrollment information on all covered persons.

Employer Mandate (“Play or Pay”): ALEs only. To avoid the risk of penalties, determine whether each employee meets the ACA definition of full-time employee and, if so, offer affordable minimum value coverage on a timely basis.

In summary, employers are advised to continue to comply with all ACA requirements based on the current rules.

On a related note, the ACA imposes several requirements on group health plans, whether provided through insurance or self-funded by the employer. Insured plans also are subject to the insurance laws of the state in which the policy is issued. In many cases, provisions matching the ACA are now embedded in state insurance laws. So future changes in the ACA, if any, may not apply to group medical policies automatically. Depending on the state and the type of change, additional legislation at the state level may be needed to enact the change.

See the original article Here.

Source:

Kerekes L. (2017 April 14). Employers and the ACA – it’s status quo for now [Web blog post]. Retrieved from address https://www.thinkhr.com/blog/hr/employers-and-the-aca-its-status-quo-for-now/


Workers Might See Employer Health Coverage Disappear Under New GOP AHCA

Do you receive your healthcare through an employer? Then take a look at this article from Benefits Pro about how the passing of the AHCA will affect employees who get their healthcare through an employer by Marlene Y. Satter.

It’s not just individuals without employer health coverage who could lose big under the newly revised version of the Republicans’ American Health Care Act.

People who get health coverage from their jobs could be left swinging in the wind, too—in fact, as many as half of all such employees could be affected.

That’s according to an Alternet report that says an amendment added to the bill currently being considered by the House of Representatives would allow insurers in states that get waivers from regulations put in place by the Affordable Care Act to deny coverage for 10 types of health services—including maternity care, prescription drugs, mental health treatment and hospitalization.

An MSNBC report points out that “because the Republican-led House is scrambling to pass a bill without scrutiny or serious consideration,” the last-minute amendment’s full effects aren’t even known, since “[t]his is precisely the sort of detail that would’ve come to light much sooner if Republicans were following the American legislative process. In fact, this may not even be the intended goal of the GOP policy.”

While the ACA prohibits employer-based plans from imposing annual limits on coverage and bare lifetime caps on 10 essential benefits, the Obama administration did loosen those restrictions back in 2011, saying that employers could instead choose to follow another state’s required benefits.

What the new Republican take on the AHCA does is push that further—a lot further—by allowing large employers to pick the benefit requirements for any state. That would let them limit coverage on such costly types of care as mental health and substance abuse services.

In a Wall Street Journal report, Andy Slavitt, former acting administrator of the Centers for Medicare and Medicaid Services under President Barack Obama, is quoted saying, “It’s huge. They’re creating a backdoor way to gut employer plans, too.”

The changes to employer-based plans would hit anyone not insured by Medicare or by small-business plans, because the bill includes cuts to Medicaid and changes to the individual market as well.

A report from the Brookings Institution points out that “One of the core functions of health insurance is to protect people against financial ruin and ensure that they get the care they need if they get seriously ill.” The ACA pushed insurance plans to meet that standard, it says, by requiring them to “limit enrollees’ annual out-of-pocket spending and [bar] plans from placing annual or lifetime limits on the total amount of care they would cover.”

However, while those protections against catastrophic costs “apply to almost all private insurance plans, including the plans held by the roughly 156 million people who get their coverage through an employer,” the Brookings report says, the amendment to the Republican bill “could jeopardize those protections—not just for people with individual market plans, but also for those with employer coverage.”

How? By modifying “the ‘essential health benefit’ standards that govern what types of services must be covered by individual and small group market insurance plans. The intent of the amendment is reportedly to eliminate the federal benefit standards that currently exist and instead allow each state to define its own list of essential health benefits.”

And then, with employers allowed to pick and choose which state’s regulations they’d like to follow, a loophole the size of the Capitol building would not only allow “states will set essential health benefit standards that are considerably laxer than those that are in place under the ACA,” says the report, but “large employers may have the option to pick which state’s essential health benefits requirements they wish to abide by for the purposes of these provisions.”

The result? “[T]his would likely have the effect of virtually eliminating the catastrophic protections with respect to large employers since employers could choose to pick whichever state set the laxest standards. The same outcome would be likely to occur for all private insurance policies,” the report continues, “if insurers were permitted to sell plans across state lines, as the Administration has suggested enacting through separate legislation.”

While the actual effect of the amendment is unclear, the Brookings report concludes, “there is strong reason to believe that, in practice, the definition of essential health benefits that applied to the catastrophic protections would be far weaker under the House proposal than under current law, seriously undermining these protections. These potential adverse effects on people with employer coverage, in addition to the potentially damaging effects of such changes on the individual health insurance market, are thus an important reason that policymakers should be wary of the House proposal with respect to essential health benefits.”

See the original article Here.

Source:

Satter M. (2017 May 4). Workers might see employer health coverage disappear under new GOP AHCA [Web blog post]. Retrieved from address http://www.benefitspro.com/2017/05/04/workers-might-see-employer-health-coverage-disappe?page_all=1


3 Aspects of the GOP Healthcare Plan that Demand Employers’ Attention

The House of Representatives last week passed the American Health Care Act (AHCA) bill to begin the process of repealing the ACA. Find out what this new legislation means for employers in the great article from Employee Benefits Adviser by Daniel N. Kuperstein.

The extremely emotional journey to repeal (more appropriately, to “change”) the Affordable Care Act reached a significant milestone this week: The Republican-led House of Representatives passed an updated version of the American Health Care Act. While more than 75% of the provisions of the ACA remain intact, the AHCA gutted or delayed several of the ACA’s taxes on employers, insurers and individuals.

So what does this mean for employers?

First off, it’s important to remember that this new bill is not law just yet. The House version of the bill now heads to the Senate, where there’s no guarantee that it will pass in its current form; the margin for victory is much slimmer there. Only three “no” votes by Senate Republicans could defeat the bill, and both moderate and conservative Republican lawmakers in the Senate have expressed concerns about the bill. In other words, employers don’t have to do anything just yet, but it’s still beneficial to understand the major changes that could be coming down the pike.

As employers know from working over the last seven years to implement provisions of the ACA, there will be a million tiny details to work through if the AHCA becomes law.

But for now, we see three major aspects that demand employers’ attention.

There will be more emphasis on health savings accounts
Under the AHCA, health savings accounts will likely become far more popular — and more useful. The HSA contribution limits for employers and individuals are essentially doubled. Additionally, HSAs will be able to reimburse over-the-counter medications and allow spouses to make catch-up contributions to the same HSA. Of course, with this added flexibility comes increased responsibility — there will be a greater need for employees to understand their insurance.

There will be more flexibility in choosing a benchmark plan
For larger employers not in the small group market, the AHCA creates an opportunity to choose a benchmark plan that offers a significantly lower level of benefits to employees.

Currently, the ACA provides that employer-sponsored self-insured health plans, fully-insured large group health plans, and grandfathered health plans are not required to offer EHBs. However, these plans are prohibited from imposing annual and lifetime dollar limits on any EHBs they do offer. For purposes of determining which benefits are EHBs subject to the annual and lifetime dollar limits, the ACA currently permits employers sponsoring these types of plans to define their EHBs using any state benchmark plan. In other words, employers are not bound by the essential health benefits mandated by their state and can pick from another state’s list of required benefits.

Under the AHCA, we may see a big change to how the rules on annual and lifetime limits work. Notably, nothing in the AHCA would prohibit employers from choosing a state benchmark plan from a state that had obtained an AHCA waiver, which would allow the state to put annual and lifetime limits on its EHBs. This means that, if one state decides to waive these EHB requirements, many employers could decide to use that lower-standard plan as their benchmark plan. Of course, while choosing such a benchmark plan may benefit an organization by lowering its costs, such a move may have a negative impact on its ability to recruit and retain the best talent.

There will be a greater need to help employees make smart benefits decisions
The most important aspect of this for employers is to understand the trend in health insurance, which is undeniably moving in the direction of consumerism.

The driving philosophy behind this new Republican plan is to place more responsibility on individuals. However, this doesn’t mean employers can throw a party and simply wish their workers “good luck” — employers need to think at a macro level about what’s good for business. In a tightening labor market in which so many talented people consider themselves free agents, smart employers will focus on helping employees to make smart decisions about their health insurance.

See the original article Here.

Source:

Kuperstein D. (2017 May 5). 3 aspects of the GOP healthcare plan that demand employers attention [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/opinion/3-aspects-of-the-gop-healthcare-plan-that-demand-employers-attention


House Passes Obamacare Repeal

Find out more about the passing of the AHCA in this article from The Hill by Peter Sullivan.

House Republicans on Thursday passed legislation aimed at repealing and replacing ObamaCare, taking a major step toward a long-held goal and setting in motion an overhaul of the nation’s health system.

The narrow 217-213 vote is a victory for GOP leaders, who faced a tumultuous path to getting the bill to the floor. The measure had to be pulled in March because of a lack of votes, but a series of deals since then brought on board the conservative Freedom Caucus and then wavering moderates.

The bill, known as the American Health Care Act, repeals the core elements of ObamaCare, including its subsidies to help people get coverage, expansion of Medicaid, taxes and mandates for people to get coverage.

In its place, the bill provides a new tax credit aimed at helping people buy insurance, though it would provide less help than ObamaCare to low-income people.

The Congressional Budget Office found that 24 million more people will become uninsured over the next decade because of the bill. While some of that loss is because of people choosing not to get coverage when the mandate is repealed, much of it would come from Medicaid cuts and the smaller tax credit as well.

Republicans brought the measure to a vote without an analysis from the Congressional Budget Office on the updated bill, meaning lawmakers did not have the full nonpartisan analysis of what the bill would do.

In addition, while Republicans have long argued that Democrats rammed through ObamaCare in 2010, the final changes to the Republican bill were only released the night before the vote.

Republicans’ main argument is that ObamaCare is failing and needs to be replaced. They point to insurers pulling out of certain markets, while Democrats counter that uncertainty from Republican efforts to weaken the law are to blame.

“It’s been a winding road to this point but we’re here today to fulfill the promise that we made to the American people,” said Rep. Diane Black (R-Tenn.) who led GOP floor debate on the measure.

“Under ObamaCare, the situation is getting worse every day,” she said. “We can’t wait a moment longer than necessary to provide relief for the American people by repealing and replacing ObamaCare.”

House Democratic Leader Nancy Pelosi (Calif.), meanwhile, called the measure a “very sad, deadly joke.”

Pointing to the hundreds of billions of dollars in tax cuts, she said the bill “will have the biggest transfer of wealth in the history of our country — Robin Hood in reverse.”

The measure has deep cuts to Medicaid, the government healthcare program for low income people, including putting a new cap on payments and ending ObamaCare’s expansion of the program after 2020.

The bill was a tough vote for some electorally vulnerable members of Congress. Many remained publicly undecided until the last moment as leaders furiously whipped lawmakers over the last several days.

Rep. Mike Coffman (R-Colo.), for example, came out as a “no” hours before the vote. He cited the lack of a CBO analysis as well as weakening protections for people with pre-existing conditions.

The key move to bring the Freedom Caucus on board was an amendment that allows states to repeal one of ObamaCare’s key protections for people with pre-existing conditions, known as community rating. If that were repealed in a state, insurers could go back to charging exorbitant premiums to sick people, which could put coverage out of reach for many.

Republicans counter by pointing to money for high risk pools. A last-minute addition of $8 billion more in funding for people with pre-existing conditions was key to winning over several wavering moderates, though many experts doubt whether that will be close to enough funding.

The measure is expected to undergo a major overhaul in the Senate, especially on the Medicaid front, where several Republican senators from states that accepted the expansion are wary of cutting it off.

The path in the Senate is also even tougher, given that Republicans can lose only two votes and still pass the bill.
See the original article Here.

Source:

Sullivan P. (2017 May 4). House passes obamacare repeal [Web blog post]. Retrieved from address http://thehill.com/policy/healthcare/331937-house-passes-obamacare-repeal


Employers Want Lawmakers to Curb Rising Pharma Costs

Have to the cost of pharmaceuticals caused an increase in your health care costs? Find out how other employers are trying to combat rising costs in the great article from Employee Benefits News by Nick Otto.

A majority of employers say they were relieved to see the GOP’s repeal and replace plan fizzle out last month, and instead have their own ideas on how to best reform healthcare and how to rein in costs.

In a poll conducted by Mercer days following the crumbling of the American Health Care Act, more than half who invest in employer-sponsored healthcare said they were happy to see the GOP plan fail.

Nearly a quarter (24%) of employers told the consulting firm they “very relieved” of the legislation’s failure, while 32% said they were “relieved.”

Meanwhile, 16% said they were disappointed the legislation didn’t pass, 5% were “very disappointed” it didn’t pass, and the remainder of employers had no opinion. A planned vote on the ACHA was scrapped in late March at President Donald Trump’s request after a number of Republicans said they opposed the bill.

With more than 61% of covered Americans getting health coverage through employer plans, Mercer says businesses should help play a key role in recognizing and addressing the underlying cost concerns plaguing the healthcare market.

“Cost-shifting does not address the underlying causes of healthcare cost growth, and increasing burdens on employers will simply make it harder for them to provide affordable coverage to their employees,” Mercer says.

So what do employers say are the top issues lawmakers should address?

Topping the employer wish list, according to the Mercer poll, is help with controlling the climbing cost of pharmaceuticals with a score of 4.4/5 (employers ranked policymaker priorities 1-5, 5 being “top priority).

The following improvements also made the list of employer desires: improving price transparency (4.1), stabilizing the individual markets (4), maintaining Medicaid funding (4) and investing more in population health and education (3.7).

While neither the ACA nor the AHCA had any significant impact to how employers offer healthcare, there are aspects of both legislations that would still influence some employer plans.

Maintaining Medicaid funding and having a stabilized individual market will lower hikes to private payers by allowing people not in employer-sponsored plans have access to affordable coverage and avoid a rise in the number of uninsured.

See the original article Here.

Source:

Otto N. (2017 April 9). Employers want lawmakers to curb rising pharma costs [Web blog post]. Retrieved from address https://www.benefitnews.com/news/employers-want-lawmakers-to-curb-rising-pharma-costs?brief=00000152-14a7-d1cc-a5fa-7cffccf00000


Understanding the Evolution of Health Insurance in a Post-ACA World

With the fall of the AHCA, are you wondering where you are left standing with healthcare? Check out this great article from Benefits Pro on what the fall of the AHCA means for employers and how to proceed with healthcare from here by Eric Helman.

While much has been written about specific aspects of the ACA and how repeal, replace and repair will affect certain populations, the impact on employer-sponsored benefits is more convoluted.

In the world of employee benefits, to properly understand the post ACA world, we must reflect on the confluence of how five separate constituents react to the new health insurance landscape.

The issues and priorities of these five groups: government, carriers, employers, employees, and brokers/consultants, and how they relate to each other will dictate the evolution of health insurance in the post-ACA world.

These insights will illuminate what to expect in a post-ACA climate as the health insurance landscape continues to evolve under President Trump.

Government compliance issues ease

While we all may be a bit weary from the focus on Washington, the fact remains the federal government continues to be the single biggest catalyst for changes in the health insurance and benefits landscape.

For benefits professionals, it is important to recognize that for all the politicization around ACA, there is very little focus on the employer-provided benefits space, especially outside of the realm of small employers. The priority for government involvement in repeal-replace-repair is the individual market and Medicaid expansion.

Having said this, if the Republicans choose to use reconciliation to repeal the ACA with a simple majority, many aspects of the employer-provided system will be affected. Unfortunately, this will perpetuate the preoccupation with compliance in the employer space, continuing the trend of non-value add expenditure of resources that has plagued the industry for the last five years.

Carrier mandates relax

Perhaps surprisingly, the second area of significant change in the post-ACA era will be in the domain of the carriers. Against the backdrop of the Department of Justice opinions on the two proposed mega-mergers, we expect the greatest impact of repeal-replace-repair will manifest itself in the proliferation of new products which were “non-compliant” under the ACA.

Whether correct or not, one of the indictments of the ACA is increased mandates do more to destroy markets in terms of access and affordability than they do to advance these objectives.

Look for the relaxation of these mandates and the commensurate acceleration of new product development which will inevitably follow. Combined with the return of premium reimbursement plans in the small market, we expect the further commoditization of major medical insurance as low risk consumers choose less coverage for less premium.

Employers reallocate benefits compensation

Second only to the carriers, the employers have been the biggest victims of the ACA era. While many have applauded the decline in the rate of health care inflation, the reality is that benefits costs continue to grow more than inflation, placing an ever-increasing burden on total compensation planning.

Add to this the increased cost of compliance in an environment where employers are trying to reduce administrative costs in the face of a slow growth economy and you can understand the “ACA fatigue” many employers report.

Repeal-replace-repair, while it will bring uncertainty in the near term, is likely to lower the burden on employers and allow more strategic thinking about how they allocate compensation to benefits.

The increasing age diversity of their employees will force them to consider altering this allocation in favor of financial wellness (retirement and student debt) perhaps at the expense of traditional health benefits. The war for new talent precipitated by near full employment in skilled professions will only exacerbate this tension.

Employees wise up on benefit choices

For employees, the impact of the politicization of health care will continue to cloud their perception of their role in choosing and consuming the benefit programs offered by their employers.

While much has been written about the promise of “consumerism” to change the hyper-inflationary nature of fee-for-service health care, it is apparent that the deadly combination of employee illiteracy and entitlement about employer-provided health insurance is a greater impediment to real reform in the way health care is consumed in this country.

With the potential deregulation on mandated benefits and the increasing availability of retail health care alternatives, it will be incumbent on all the constituents to accelerate the employees’ education and appreciation for employee benefit choices customized to their informed perception of need and risk mitigation.

Brokers/consultants rise to the challenges

And now, the elephant in the room, the impact on brokers and consultants. One of my early mentors said, “There is profit in confusion.” For the skilled practitioners, I think they would agree that the net effect of the ACA was increased opportunity. It is important to note however, that this opportunity required focus on new disciplines.

No longer were the skills of customer relationship management, procurement management and vendor management sufficient to satisfy the needs of their clients. The best players were forced to develop expertise in compliance, regulatory impact, benefits technology and internal human resources processes that their predecessors could ignore. This, the low cost of money and the aging workforce of benefit producers has contributed to the continued wave of firm consolidation which changes the nature of competition.

Additionally, the widely publicized fall of market disruptors will have a chilling effect on innovation for the near term. In the post-ACA era, benefits professionals will be challenged to balance revenue, client retention and cost-of-service pressures in an environment where the future is uncertain.

The post-ACA era promises to be as exciting as the last five years. To paraphrase Richard Epstein on a separate topic, the real dilemma is that the people working on the problem lack the technical expertise and the political agnostic orientation necessary for real change.

In the meantime, successful participants in this marketplace will be forced to be both diplomats and opportunists, acutely aware of the issues and priorities facing all of the important constituents and balancing these to the most optimum outcome. I, personally, am comforted that we have some of the most creative people I know working on this challenge.

See the original article Here.

Source:

Helman E. (2017 April 7). Understanding the evolution of health insurance in a post-ACA world [Web blog post]. Retrieved from address http://www.benefitspro.com/2017/04/07/understanding-the-evolution-of-health-insurance-in?t=core-group&page_all=1


Are Healthcare Cost-Shifting Efforts at a Tipping Point?

Are you having trouble controlling your healthcare cost? Take a look at this interesting article from Employee Benefits Advisor on how rising healthcare costs are affecting employers by Bruce Shutan.

With the fate of healthcare reform in limbo, new research suggests employers are moving forward with a host of incremental changes to their health and wellness plans in hopes of curtailing costs on their own.

Kim Buckey, VP of client services at DirectPath, an employee engagement and healthcare compliance technology company, has noticed a slowdown in adoption of high-deductible health plans and cost-shifting strategies that aren’t quite living up to expectations. DirectPath’s 2017 Medical Plan Trends and Observations Report, based on an analysis of about 975 employee benefit health plans, found employers applying creative methods for cost control.

Buckey noted greater use of health savings accounts, wellness incentives, price transparency tools and alternative care options.

Slightly more than half of the employers studied by DirectPath offer a price transparency tool, while another 18% plan to do so in the next three years. Price-comparison services were found to save employees and employers alike an average of $173 and $409, respectively, per procedure.

In an effort to reduce costs and the administrative burden of tracking coverage for dependents, surcharges on spouses who can elect coverage elsewhere soared more than 40% within the past year to $152 per month.

The number of plans that offer wellness incentives rose to 58% from 50% between 2016 and 2017. Rewards included paycheck contributions, plan premium discounts, contributions to HSAs and health reimbursement arrangements and reduced co-pays for office visits. HSAs were far more popular than employee-funded HRAs (67% vs. 15% of employers examined), while employer contributions to HSAs increased nearly 10%.

Barriers to care and cost containment
A separate survey conducted by CEB, a technology company that monitors corporate performance, noted that although as many as one-third of organizations offer telemedicine, more than 55% of employees aren’t even aware of their availability and nearly 60% believe they’re difficult to access.

DirectPath and CEB both found that the average cost of specialty drugs increased by more than 30%. This reflects research conducted by the National Business Group on Health. Nearly one-third of NBGH members said the category was their highest driver of healthcare costs last year.

The pursuit of a panacea for rising group health costs has been meandering. When Buckey’s career began, she recalls how indemnity plans gave way to HMOs and managed care, then HDHPs, consumer-directed plans and private exchanges. “There is no one silver bullet that’s going to solve this problem,” she explains, “and I think employers and their advisers are starting to understand that it’s got to be a combination of things.”

More employers are now realizing that cost-shifting isn’t a viable long-term solution and that “whatever changes are put in place will require a well thought-out, year-round and robust communication plan,” she says.

There’s also a serious need to improve healthcare literacy, with Buckey noting that many employees still struggle to understand basic concepts such as co-pays, deductibles and HSAs. Consequently, she says it’s no wonder why they often “just shut down and do whatever their doctor tells them.

“So I think anything that advisers and brokers can do to support their employers in explaining these plans, or whatever changes they choose to implement,” she continues, will help raise understanding and eventually have a positive influence on behavior change. This, in turn, will help lower employee healthcare costs.”

See the original article Here.

Source:

Shutan B. (2017 April 5). Are healthcare cost-shifting efforts at a tipping point? [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/are-healthcare-cost-shifting-efforts-at-a-tipping-point


How Employers Should Proceed After the AHCA’s Collapse

Take a look at the great article from Employee Benefits Advisor on what employers need to know about healthcare with the collapse of the AHCA by Alden J. Bianchi and Edward A. Lenz.

The stunning failure of the U.S. House of Representatives to pass the American Health Care Act has political and policy implications that cannot be forecasted. Nor is it clear whether or when the Trump administration and Congress will make another effort to repeal and replace, or whether Republicans will seek Democratic support in an effort to “repair,” the Affordable Care Act. Similarly, we were unable to predict whether and to what extent the AHCA’s provisions can be achieved through executive rulemaking or policy guidance.

Here are some ways the AHCA’s failure could impact employers in the near term.

Immediate impact on employers
Employers were not a major focus of the architects of the ACA, nor were they a major focus of those who crafted the AHCA. This is not surprising. These laws address healthcare systems and structures, especially healthcare financing. Rightly or wrongly, employers have not been viewed by policymakers as major stakeholders on those issues.

In a blog post published at the end of 2014, we made the following observations:

The ACA sits atop a major tectonic plate of the U.S. economy, nearly 18% of which is healthcare-related. Healthcare providers, commercial insurance carriers, and the vast Medicare/Medicaid complex are the law’s primary stakeholders. They, and their local communities, have much to lose or gain depending on how healthcare financing is regulated. The ACA is the way it is largely because of them. Far more than any other circumstance, including which political party controls which branch of government, it is the interests of the ACA’s major stakeholders that determine the law’s future. And there is no indication whatsoever that, from the perspective of these entities, the calculus that drove the ACA’s enactment has changed. U.S. employers, even the largest employers among them, are bit players in this drama. They have little leverage, so they are relegated to complying and grumbling (not necessarily in that order).

With the AHCA’s collapse, the ACA remains the law of the land for the foreseeable future. The AHCA would have zeroed out the penalties on “applicable large” employers that fail to make qualified offers of health coverage, but the bill’s failure leaves the ACA’s “play or pay” rules in full force and effect. The ACA’s reporting rules, which the AHCA would not have changed, also remain in effect. This means, among other things, that many employers, especially those with large numbers of part-time, seasonal, and temporary workers that face unique compliance challenges, will continue to be in the position of “complying and grumbling.”

This does not mean that nothing has changed. The leadership of the Departments of Health and Human Services, Labor and Treasury has changed, and these agencies are now likely to be more employer-friendly. Thus, even though the ACA is still the law, the regulatory tone and tenor may well be different. For example, although the current complex employer reporting rules will remain in effect, the Treasury and IRS might find administrative ways to simplify them. Similarly, any regulations issued under the ACA’s non-discrimination provisions applicable to insured health plans (assuming they are issued at all) likely will be more favorable to employers than those issued under the previous administration.

There are also unanticipated consequences of the AHCA’s failure that employers might applaud. We can think of at least two.
1. Stemming the anticipated tide of new state “play or pay” laws
The continuation of the ACA’s employer mandate likely will put on hold consideration by state and local governments of their own “play or pay” laws.

In anticipation of the repeal of the ACA’s employer mandate, the Governor of Massachusetts recently introduced a budget proposal that would reinstate mandated employer contributions to help cover the costs of increased enrollment in the Medicaid and Children’s Health Insurance Program, known as MassHealth. Under the proposal, employers with 11 or more full-time equivalent employees would have to offer full-time employees a minimum of $4,950 toward the cost of an employer group health plan, or make an annual contribution in lieu of coverage of $2,000 per full-time equivalent employee. While the Governor’s proposal is not explicitly conditioned on repeal of the ACA’s employer mandate, the ACA’s survival may prompt a reconsideration of that approach.

California lawmakers were also considering ACA replacement proposals, including a single-payer bill introduced last month by Democratic state senators Ricardo Lara and Toni Atkins. Had the ACA’s employer mandate been repealed, those proposals were likely just the tip of an iceberg. When the ACA was enacted in 2010, Hawaii, Massachusetts, and San Francisco were the only jurisdictions with their own healthcare mandates on the books. But in the prior two-year period, before President Obama was elected and made healthcare reform his top domestic priority, more than two dozen states had introduced various “fair share” health care reform bills aimed at employers.

Most of the state and local “play or pay” proposals would have required employers to pay a specified percentage of their payroll, or a specified dollar amount, for health care coverage. Some required employers to pay employees a supplemental hourly “health care” wage in addition to their regular wages or provide health benefits of at least equal value. California, Illinois, Pennsylvania, and Wisconsin considered single-payer proposals.

To be sure, any state or local “play or pay” mandates would be subject to challenge based on Federal preemption under the Employee Retirement Income Security Act (ERISA). While some previous “play or pay” laws were invalidated under ERISA (e.g., Maryland), others (i.e., San Francisco) were not. In sum, given the failure of the AHCA, there would appear to be no rationale, at least for now, for any new state or local “play or pay” laws to go forward.

2. Avoiding upward pressure on employer premiums as a result of Medicaid reforms
The AHCA proposed to reform Medicaid by giving greater power to the states to administer the Medicaid program. Under an approach that caps Medicaid spending, the law would have provided for “per capita allotments” and “block grants.” Under either approach, the Congressional Budget Office, in its scoring of the AHCA, predicted that far fewer individuals would be eligible for Medicaid.

According to the CBO: CBO and JCT estimate that enacting the legislation would reduce federal deficits by $337 billion over the 2017 to 2026 periods. That total consists of $323 billion in on-budget savings and $13 billion in off-budget savings. Outlays would be reduced by $1.2 trillion over the period, and revenues would be reduced by $0.9 trillion. The largest savings would come from reductions in outlays for Medicaid and from the elimination of the ACA’s subsidies for non-group health insurance.

While employers rarely pay attention to Medicaid, the AHCA gave them a reason to do so. Fewer Medicaid-eligible individuals would mean more uncompensated care — a significant portion of the costs of which would likely be passed on to employers in the form of higher premiums. As long as the ACA’s expanded Medicaid coverage provisions remain in place, premium pressure on employers will to that extent be avoided.

Long-term impact on employers
As we conceded at the beginning, it’s not clear how the Republican Congress and the Administration will react to the AHCA’s failure. If the elected representatives of both political parties are inclined to try to make the current system work, however, we can think of no better place that the prescriptions contained in a report by the American Academy of Actuaries, entitled “An Evaluation of the Individual Health Insurance Market and Implications of Potential Changes.”

The actuaries’ report does not address, much less resolve, the major policy differences between the ACA and the AHCA over the role of government — in particular, the extent to which taxpayers should be called on to fund the health care costs of low-and moderate-income individuals, and whether U.S. citizens should be required to maintain health coverage or pay a penalty. And even if lawmakers can reach consensus on those contentious issues, they still would have to agree on the proper implementing mechanisms.

But whatever the outcome, employers are unlikely to play a major role.

See the original article Here.

Source:

Bianchi A. & Lenz E. (2017 April 6). How employers should proceed after the AHCA’s collapse [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/opinion/how-employers-should-proceed-after-the-ahcas-collapse