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.
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:
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.
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.
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.
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/
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.”
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
Does the implementation of the AHCA have you worried about your employee benefits? Take a look at this great article from Employee Benefit News about what the implementaion of the AHCA will mean for employers by Joel Wood.
In breaking down the Congressional Budget Office’s assessment of the proposed American Health Care Act, let’s look at the impact of the AHCA on employer-sponsored plans. The CBO estimates that 2 million fewer Americans will have employer-sponsored coverage in 2020, growing to seven million by 2027. Here’s CBO’s rationale:
These are valid points. The CBO experts are basing their estimates on sound economics and inside the constraints of their authority, and so of course we worry about any proposal that devolves employer-sponsored care. But, we also have to note that the CBO said much the same about the Affordable Care Act, which largely didn’t happen. And CBO notwithstanding, we at the Council of Insurance Agents & Brokers, too, feared something of a death spiral after the ACA was enacted.
The ACA’s employer penalties were very small in comparison to premiums, and it made sense that many would dump their plans, give their employees cash, and send them to the subsidized exchanges. Also, the subsidies were pretty rich — graduating out at 400% of the poverty line. That’s more than $90,000 for a family of four.
What we didn’t take into account in reference to the ACA were a number of things:
So employer-sponsored health insurance has, well, thrived since the enactment of the ACA — perhaps in spite of it, not because of it.
If the CBO is correct and seven million people lose ESI over the next decade, that’s problematic. But it ignores other opportunities that are being created through the proposed GOP bill and Trump Administration executive actions.
Republicans propose significant expansion of HSAs that will compliment higher-deductible ESI plans. They want work-arounds for state mandates on essential health benefits, even though their goal of “buying across state lines” can’t be realized through the tricky budget reconciliation process. And, ultimately, Republicans want to realize the potential for the ACA wellness provisions that have been eviscerated through years of EEOC/ADA/GINA conflicts. That would be a big win for employers.
The most important tradeoff between the “discussion draft” of a few weeks ago and the AHCA is that GOP House leaders junked their plan to tax 10% of employee contributions for ESI plans, in favor of pushing the Cadillac tax out five more years, to 2025.
Personally, I figure I’ve got another decade left in me to lobby for this industry, and that would get me eight years along the way. That’s a terrific tradeoff in my book, especially as Ways & Means Chairman Kevin Brady (R-Texas) emphasized he never intends for that tax to go into effect — it’s purely a budgetary gimmick. And, it’s a ridiculous “score” from CBO anyway. Everybody knows that no employer is going to pay that tax; they’ll work their plan design to get under the numbers.
Where does Donald J. Trump stand on parental leave, minimum wage and other important workplace issues? Here’s what employers need to know.
My conclusions at this moment in time, thus, are:
Sometimes, when lobbying blank-faced Republican leaders on the importance of ESI, I feel like the old BB King lyric: “Nobody loves me but my mother, and she could be jivin’, too.”
But because of, or in spite of, current legislative efforts that are dominating the headlines, I feel relatively well-poised for ESI to continue to be the means through which a majority of Americans receive the health insurance they like and they want to keep. Our job is for them to keep it. Notwithstanding lots of obstacles, we will.
Wood J. (2017 March 21). CBO estimate of AHCA impact on employer-sponsored benefits is off the mark [Web blog post]. Retrieved from address https://www.benefitnews.com/opinion/cbo-estimate-of-ahca-impact-on-employer-sponsored-benefits-is-off-the-mark
Are you looking for a new solution for cutting your healthcare cost? Take a look at the great article from Employee Benefits Advisor about what other employers are doing to cut their cost healthcare cost by Phil Albinus
As employers await a new health plan to replace the Affordable Care Act and consensus grows that high deductible health plans (HDHPs) are not the perfect vehicle for cutting healthcare costs, employers are incorporating innovative strategies to achieve greater savings.
Employers are offering HSAs, wellness incentives and price transparency tools at higher rates in an effort to cut the costs of their employee health plans. And when savings appear to plateau, they are implementing innovative reward plans to those who adopt these benefits, according to the 2017 Medical Plan Trends and Observation Report conducted by employee-engagement firm DirectPath and research firm CEB. They examined 975 employee benefit plans to analyze how they functioned in terms of plan design, cost savings measures and options for care.
The report found that 67% of firms offer HSAs while only 15% offer employee-funded Health Reimbursement Arrangements. As “use of high deductible plans seem to have (at least temporarily) plateaued under the current uncertainty around the future of the ACA, employer contributions to HSAs increased almost 10%,” according to the report.
Wellness programs continue to gain traction. Fifty-eight percent of 2017 plans offer some type of wellness incentive, which is up from 50% in 2016. When it comes to price transparency tools, 51% of employers offer them to help employees choose the best service, and 18% plan to add similar tools in the next three years. When these tools are used, price comparison requests saw an average employee savings of $173 per procedure and average employer savings of $409 per procedure, according to CEB research.
“What was interesting was the level of creativity within these incentives and surcharges. There were paycheck credits, gift cards, points that could be redeemed for rewards,” says Kim Buckey, vice president of client services at DirectPath. “One employer reduced the co-pays for office visits to $20 if you participated in the wellness program. We are seeing a level of creativity that we haven’t seen before.”
Surcharges on tobacco use has gone down while surcharges for non-employees such as spouses has risen. “While the percentage of organizations with spousal surcharges remained static (26% in 2017, as compared to 27% in 2016), average surcharge amounts increased dramatically to $152 per month, a more than 40% increase from 2016,” according to the report.
Tobacco surcharges going down “is reflective of employers putting incentives in, so they are taking a carrot approach instead of the stick,” says Buckey.
Telemedicine adoption appears to be mired in confusion among employees. More than 55% of employees with access to these programs were not aware of their availability, and almost 60% of employees who have telemedicine programs don’t feel they are easy to access, according to a separate CEB survey.
Employers seem to be introducing transparency and wellness programs because the savings from HDHPs appear to have plateaued, says Buckey. She also noted recent research that HSAs only deliver initial savings at the expense of the employee’s health.
“With high deductible plans and HSAs, there has been a lot of noise how they aren’t the silver bullet in controlling costs. Some researchers find that it has a three-year effect on costs because employees delay getting care and by the time they get it, it’s now an acute or chronic condition instead of something that could have been headed off early,” she says.
“And there is a tremendous lack of understanding on how these plans work for lower income employees, [it’s] hard to set aside money for those plans,” she says.
Educating employees to be smarter healthcare consumers is key. “What is becoming really obvious is that there is room to play in all these areas of cost shifting and high deductible plans and wellness but we can no longer put them in place and hope for the best,” she says. We have to focus on educating employees and their families,” she says. “If we are expecting them to act like consumers, we have to arm them with the tools. Most people don’t know where to start.”
She adds, “we know how to shop for a TV or car insurance but 99% of people don’t know where to start to figure out where to shop for prescription drugs or for the hospital where to have your knee surgery. Or if you get different prices from different hospitals, how do you even make the choice?”
When asked if the results of this year’s report surprised her – Buckey has worked on the past five – she said yes and no.
Given that the data is based on information from last summer for plans that would be in effect by 2017, she concedes that given the current political climate “a lot is up in the air.” Most employers were hesitant to make substantive changes to their plans due to the election, she says. We may see the same thing this year as changes are made to the ACA and the Cadillac Tax, she adds.
“What I was interested in were the incremental changes and some of the creativity being applied to longstanding issues of getting costs under control,” she says.
Albinus P. (2017 March 05). Employers embrace new strategies to cut healthcare costs [Web blog post]. Retrieved from address http://www.employeebenefitadviser.com/news/employers-embrace-new-strategies-to-cut-healthcare-costs?brief=00000152-1443-d1cc-a5fa-7cfba3c60000
Did you know that ACA repeal could have and effect on health savings plans (HRA)? Read this interesting article from Benefits Pro about how the repeal of the ACA might affect your HRAs by Marlene Y. Satter
With the repeal of the Affordable Care Act looming, one surprising factor in paying for health care could see its star rise higher on the horizon—the retirement planning horizon, that is. That’s the Health Savings Account—and it’s likely to become more prominent depending on what replaces the ACA.
HSAs occupy a larger role in some of the proposed replacements to the ACA put forth by Republican legislators, and with that greater exposure comes a greater likelihood that more people will rely on them more heavily to get them through other changes.
For one thing, they’ll need to boost their savings in HSAs just to pay the higher deductibles and uncovered expenses that are likely to accompany the ACA repeal.
But for another—and here’s where it gets interesting—they’ll probably become a larger part of retirement planning, since they provide a number of benefits already that could help boost retirement savings.
Contributions are already deductible from gross income, but under at least one of the proposals to replace the ACA, contributions could come with refundable tax credits—a nice perk.
Another proposal would allow HSA funds to pay for premiums on proposed new state health exchanges without a tax penalty for doing so—also beneficial. And a third would expand eligibility to have HSAs, which would be helpful.
But whether these and other possible enhancements to HSAs come to pass, there are already plenty of reasons to consider bolstering HSA savings for retirement. As workers try to navigate their way through the uncertainty that lies ahead, they’ll probably rely even more on the features these plans already offer—such as the ability to leave funds in the account (if not needed for higher medical expenses) to roll over from year to year and to grow for the future, and the fact that interest on HSA money is tax free.
But possibly the biggest benefit to an HSA for retirement is the fact that funds invested in one grow tax free as well. If you can leave the money there long enough, you can grow a sizeable nest egg against potential future health expenses or even the purchase of a long-term care policy. And, at age 65, you’re no longer penalized if you withdraw funds for nonapproved medical expenses.
And if you don’t use the money for medical expenses in retirement, but are past 65, you can use it for living expenses to supplement your 401(k). In that case, you’ll have to pay taxes on it, but there’s no penalty—it just works much like a tax-deferred situation from a regular retirement account.
Satter M. (2017 January 16). HSAs could play bigger role in retirement planning [Web blog post]. Retrieved from address http://www.benefitspro.com/2017/01/16/hsas-could-play-bigger-role-in-retirement-planning?ref=hp-news
Employees are feeling the stress of healthcare costs. In the article below by Jack Craver, he provides insight as to the pressures workers are currently dealing with in todays healthcare marketplace.
Original Post from BenefitsPro.com on July 29, 2016
In case you haven’t noticed, Americans are in a tough spot on health care.
For one, their health care costs far more than that in any other country. Even worse, perhaps, they increasingly have many more decisions to make about how to pay for that care.
A new report demonstrates the frustration and hopelessness that grips so many in the face of health care decisions.
The study by Alegeus, the benefit account platform, surveyed 4,000 adults about their health care choices. It showed that there are seldom health or insurance-related choices that Americans make with relative ease or comfort.
There are no health care finance decisions, for instance, that a majority of Americans don’t find challenging. At the top of the list was “planning for out-of-pocket costs,” which two-thirds of respondents say they found either challenging or very challenging. Fifty-five percent say the same about choosing health care benefits.
Fifty-two percent said they found “maintaining health and wellness” challenging. If respondents are being completely honest with themselves (and the pollster), that figure would probably be much higher, considering that three-quarters of Americans are overweight or obese, and a certain percentage of those who aren’t still engage in unhealthy habits, such as problem drinking, substance abuse, or smoking.
One of the reasons health care is so expensive, many argue, is that for so long, Americans have been shielded from the true cost of care by generous employer-based insurance policies. As employers increasingly shift to high-deductible plans or consumer-driven health plans, millions of Americans are for the first time confronting decisions that in the past were left to higher-ups.
Alegeus CEO Steve Auerbach explained the shifting dynamics of health care shopping to BenefitsPRO.
“In the past, with health plans paying for the majority of health care costs, consumers have been conditioned to be disengaged,” he says. “This shift to consumer directed health care represents a complete paradigm shift in how consumers will need to manage their healthcare going forward — and there is a sizeable percentage of consumers who are resistant to this change. It is definitely going to take time for consumers to acclimate, build confidence, and rise to the occasion.”
He noted, however, that a similar “paradigm shift” took place with retirement benefits two decades ago, as many companies moved from defined-benefit pensions to 401(k)s.
“The infrastructure for education and support had to be built, and consumers had to adapt,” he says. “But now 401(k)s have become ubiquitous.”
See the original article here.
Craver, J. (2016, July 29). Workers overwhelmed by health care decisions [Web log post]. Retreived from http://www.benefitspro.com/2016/07/29/workers-overwhelmed-by-health-care-decisions?kw=Workers%20overwhelmed%20by%20health%20care%20decisions&cn=20160801&pt=Daily&src=EMC-Email&et=editorial&bu=BenefitsPRO&slreturn=1470060827
Get the latest trends in healthcare benefits in the survey conducted by SHRM.
Original Post from SHRM.org on July 13, 2016
Originally posted June 19, 2014 by Dan Cook on www.benefitspro.com.
Women, on average, don’t have as much money in their health savings accounts than do men. This nugget is among the findings of an Employee Benefit Research Institute study, which was conducted on the 10th anniversary of the creation of HSAs.
At the end of 2013, men had an average of $2,326 in their account, while women had $1,526, EBRI said.
While the male-vs.-female gap went unexplained by the researchers, that output was perhaps the most surprising to come from the study. Other findings were more or less in line with expectations about those who choose HSAs to pay for their health care.
EBRI reported that older individuals have considerably more money in their accounts that do younger HSA users: Those under 25 had an average of $697, while those ages 55-64 $3,780 those 65 or older had an average account balance of $4,460.
Younger ones used a small percent of their account balances for health-related expenditures, and they also tended to take fewer distributions from their accounts that did older individuals. Yet at a certain age, the likelihood of a distribution fell significantly.
“The likelihood of taking a distribution increased from 44 percent among individuals under age 25, to 66 percent among those ages 35–44 and 45–54,” EBRI said in a release. “That likelihood dipped slightly (to 64 percent) among those ages 55–64 and still further (to 49 percent) among those ages 65 and older.”
“The decline in the average amount distributed, as well as the likelihood of there being a distribution for health care claims at older ages, may have been a reflection of fewer people covered by the HSA-eligible health plan as fewer dependent children are covered by older account owners,” said Paul Fronstin, director of EBRI’s health research and education program, and author of the report.
Input for the study came from data collected from HSA providers with total assets of $2.7 billion as of Dec. 31, 2013. This represents 14 percent of the universe of HSAs and 14 percent of HSA assets, EBRI said.
Originally posted May 9, 2014 by Julie Appleby on http://capsules.kaiserhealthnews.org.
High deductible health plans paired with tax-free savings accounts — increasingly common in job-based insurance and long a staple for those who buy their own coverage – pose financial difficulties for people with chronic health problems. That’s because they have to pay the annual deductible, which could be $1,250 or more, before most of their medications and other treatments are covered.
In a white paper released Thursday, researchers at the University of Michigan say such plans would be more attractive if the IRS broadened the kinds of preventive care insurers were allowed to cover before the patient paid the deductible. Currently, only a limited set of preventive care benefits is included.
“I want the deductibles removed on those things I beg my patients to do,” such as getting annual eye exams if they are diabetic, says author A. Mark Fendrick, a professor of medicine and director of the University of Michigan Center for Value-Based Insurance Design.
If insurers were allowed to offer high-deductible plans that covered “secondary prevention,” such as eye exams, or insulin for diabetics, they would attract 5 million buyers on the individual market, the report projects. Many consumers would see the policies as an improvement over more “bare-bones” coverage, even if the premiums were higher, said co-author Steve Parente, a professor of finance at the Carlson School of Management at the University of Minnesota. At least 10 million in job-based insurance might also switch, some of them from more expensive plans that have limited networks of doctors and hospitals, Parente said. Such plans would be most attractive to those with chronic conditions such as diabetes, asthma or high blood pressure.
“If it is attractive to the chronically ill, it could be a major change,” said Parente. The Gary and Mary West Health Policy Center, a nonpartisan research group in Washington, D.C, funded the report.
Still, such plans would carry premiums at least 5 percent higher than current high-deductible health saving account plans, according to the report.
Whether the IRS would consider changing the rules for high deductible plans connected with health savings accounts is unclear. The agency did not respond to questions. If it altered the rules, insurers would also have to choose to offer the plans.
Currently, more than 15 million Americans have high-deductible plans that can be paired with tax-free savings accounts, called HSA-eligible plans, according to America’s Health Insurance Plans, the industry trade group. Of those, about 2 million buy their own policies and the rest get them through their jobs.
Under federal rules, such plans must have at least a $1,250 annual deductible for singles and a $2,500 deductible for families. Workers can contribute money pre-tax to the special savings accounts to help pay those deductibles. Most large employers offer such a plan as an option and an estimated 15 percent of firms offer only HSA plans or a similar arrangement, called a health reimbursement account, according to the benefit firm Towers Watson.
IRS rules say only primary prevention can be fully covered by the plan outside of the deductible, including such things as routine prenatal and well-child care, some vaccines, and programs to help people lose weight or quit smoking. The rules say such preventive care does not generally include treatments for “existing illness, injury or condition.”
Fendrick and colleagues want the definition changed to allow insurers and employers more options, including allowing coverage of any kind of medical services, including drugs that would prevent complications from or a worsening of a chronic condition, such as diabetes, heart disease or major depression.
“This would be entirely optional for health plans,” Fendrick said. “One plan could [cover] just about everything before the deductible, and another might say they cover five or six drugs, some doctor visits and maybe glucose test strips.”
Originally posted May 7, 2014 by Jerry Geisel on www.businessinsurance.com
Enrollment in health savings accounts continues to surge as more employers are moving to consumer-driven health care plans, Fidelity Investments said Wednesday.
Fidelity said in a statement that the number of HSAs it administered in 2013 jumped to 269,000; up nearly 48% compared with 182,000 in 2012 and a 126% increase over 2011, when Fidelity administered 119,000 HSAs.
“Fidelity continues to drive adoption of its health savings account business as companies and their employees realize their potential advantages both today and over the long haul,” Will Applegate, a Fidelity vice president in Boston, said in the statement.
Numerous surveys have found that the cost of high-deductible consumer-driven health care plans linked to HSAs are less costly compared with other health care plans.
For example, a survey last year by Mercer L.L.C. found that the cost of coverage in CDHPs with HSAs is about 20% lower, on average, than the cost of preferred provider organization coverage — $8,482 per employee compared with $10,196 per employee for preferred provider organization coverage.
That cost difference will become even more important starting in 2018, when a health care reform law provision that imposes a 40% excise tax on health care plan costs exceeding $10,200 for single coverage and $27,500 for family coverage kicks in.