More than 80% of employers look to adviser for PPACA education

Beginning in 2014, the Patient Protection and Affordable Care Act requires employers with more than 50 employees to offer minimal essential health coverage to employees or be subject to a penalty. More than three-fourths of employers plan to continue to offer coverage for employees once this new requirement takes effect. However, a majority of respondents are also concerned about their ability to offer affordable health coverage to full-time employees.

The 2012 Health Care Reform Survey was conducted from January 6 to February 24 by Milwaukee-based Zywave, a software provider for the insurance and financial service industries. More than 7,800 employers nationwide participated in the survey.

Respondents are from 14 business sectors, with heaviest representation from services (18%), manufacturing (15%), nonprofit (11%), health care (10%) and construction (9%). Respondents spanned organization size: 43% with less than 50 employees, 17% with 50–99 employees, 27% with 100–499 employees and 14% with more than 500 employees.

Among those surveyed, 51% will definitely continue to offer health benefit coverage, 29 % will likely continue coverage, 3% will likely discontinue coverage and 1% will definitely discontinue or have already discontinued coverage. Meanwhile 19% are unsure what they will do when the requirement goes into effect in 2014.

“These findings are consistent with other recent surveys on the topic,” says Zywave attorney Erica Storm. “Given the uncertainty surrounding health care reform, employers do not appear eager to make big changes to their benefit offerings. Plus, employers remain concerned about competing for talent and seem nervous that dropping coverage could affect recruiting and retention efforts, despite other health care options provided for in the law.”

Other survey results include:

• 57% of employers responding are concerned about their ability to offer affordable health coverage to full-time employees.

• More than three-quarters of respondents have already seen an increase in their organizations health benefit costs or expect to see an increase as a result of PPACA provisions. Sixty-three percent of employers plan to pass these increases on to employees.

• PPACA requires group health plans that provide dependent coverage of children to make that coverage available to children up to age 26. In response to this requirement, 10% of employers surveyed increased the employee share of premiums or benefit costs for all coverage, 9% increased the employee proportion of dependent coverage cost and 2% eliminated dependent coverage.

• PPACA provisions that employers are most concerned about implementing and administering include: new reporting, disclosure and notification requirements (57%), the requirement to automatically enroll new employees in a health plan (40%) and additional W-2 reporting requirements (49%).

By Marli D. Riggs

Sleep Deprivation Has Same Impact as Binge Drinking

Although drink driving is socially unacceptable sleep deprivation is so extreme in the UK that one million people are doing the equivalent of getting behind the wheel intoxicated every day, without alcohol passing their lips, having a profound impact on their employer and workplace.

The data, from Vielife's online health & wellbeing assessment, also shows that one in three (approximately 100 million European working adults) suffer from 'poor sleep'. These people are living in danger of a semi-conscious existence equal to repeatedly driving their car well over the alcohol limit.

Women are more at risk than men - 35% have poor sleep compared to 31% of men. Depression has a profound correlation with poor sleep.

The survey found people working a five day week generally have better sleep than people working more or less than five days.

Being 'sleep drunk' is caused by the tiredness felt after prolonged waking hours which has the equivalent effect as a raised blood alcohol level above the legal limit to drive.

Tony Massey, Vielife's chief medical officer, said: "Being 'sleep drunk' is a common issue that causes personal and work life issues and a healthy lifestyle is at the heart of solving it."

The data is based on 'sleep scores' recorded by users of Vielife's online health & wellbeing platform. A sleep score indicates the overall quality and satisfaction of a person's sleep as part of a wider 'wellbeing score' used to help people identify and work to improve their health issues.

This research was based on 38,784 assessments of people employed in the UK taken between 2009 and 2011.

By David Woods

Health Insurers Move Ahead, With or without Individual Mandate

For the health policy world, the Supreme Court's tough questioning of the individual mandate last week was a seismic event.

But in Hartford, Conn., the city sometimes called the epicenter of the insurance industry, David Cordani isn't quaking.

Cordani is the CEO of Cigna, the nation's fourth-largest health insurer. He says the insurance industry started changing itself before the Affordable Care Act became law in 2010. And the changes will continue regardless of what happens at the high court.

"The broader health care debate is way larger than the individual mandate," Cordani said during an interview in his sunny corner office, just a few hours after some of the justices seemed ready to strike down the mandate.

Cigna, like the broader insurance industry, hasn't taken a position on whether or not the mandate requiring Americans to buy health coverage is constitutional. Cordani points out that it really only deals with expanding care to people in the small-group and individual markets. That's a fraction of the total number of people insured, and it's not a major market for Cigna.

Cordani says the act does a fair enough job at expanding access to care, but it doesn't do as much to improve the quality of care and drive down costs. That's his focus: changing the way we think about insurance, from paying for "sick care" to paying for "health care," driving consumers to stay healthy and giving doctors incentives to keep them that way.

"What we've been doing is innovating programs around that, with or without the Affordable Care Act," Cordani says.

He says Cigna is still deciding how and where to sell insurance in the new exchanges – the health insurance marketplaces that will open for business in 2014. That's not exactly easy, according to Tom Wildsmith of the American Academy of Actuaries. Actuaries evaluate future risk, and Wildsmith says what's keeping them up at night is trying to figure out who they're going to be covering next year.

"The challenge with health care reform is that it injects some uncertainty in the system that means that, even in the aggregate, we don't know exactly how things are going to work out," he says.

Even if all of the rules were set in stone, there's still uncertainty about who will be in a particular insurer's risk pool and what the Supreme Court will do.

Among insurer worries: If the mandate goes, will the young and healthy buy in or will they wait until they are sick to buy insurance? And what if a state's new baseline coverage – called essential health benefits – is just too expensive?

"If essential health benefits package means that many of their customers will have to buy up from a Yugo to a Chevy, they are concerned that they may lose some customers in the buy-up process," Wildsmith says.

Karen Ignagni, CEO of America's Health Insurance Plans, the industry lobby, says insurers aren't waiting to find out. They're working with hospitals and doctors to change the way care is paid for and to keep costs down, just as Cigna's Cordani wants. She cites two studies that say Medicare plans run by private insurers are succeeding at keeping seniors from being readmitted to the hospital after procedures.

"We're leading the way, according to government data on readmissions," she says. "That's a win-win on both sides. There's real data now to support the contention that these strategies and these tools work very, very effectively."

What wouldn't work, Ignagni says, would be to ditch the individual mandate and still make insurers continue to accept all comers regardless of the status of their health.

"In every state that tried market reforms without bringing everyone into the system, we saw those markets blow up," she says.

Insurers will be just fine — particularly if the part of the law that subsidizes insurance for lower income Americans survives the Supreme Court challenge, according to Mila Kofman of Georgetown University's Health Policy Institute.

"We're looking at billions of dollars into the pockets of the health insurance industry," says Kofman, who is a former superintendent of insurance in Maine. "So I'm not worried about the health insurance industry and their financial health at all. This is going to be very good for their bottom line."

In fact, even on the day the Supreme Court looked like it was ready to toss the individual mandate, Cigna's stock was up 4 percent and other insurers saw similar gains.

By Jeff Cohen, WNPR

Not as Simple as Paying or Playing

By Jenny Ivy

With roughly half of employers saying they'll definitely be offering health coverage even after insurance exchanges begin, speculating with certainty (a bit of an oxymoron) that it's only a matter of time before companies drop health coverage is a futile argument.

Likewise, it's fair to say that there are several legitimate reasons for companies (particularly the bigger ones) to keep offering coverage, but we're only assuming the status quo won't change dramatically once health reform is in full effect. All you have to do is look at the numbers that are already dropping, and dropping hard. [See: Reform driving up health plan costs]

Studies, including the one released last week by Towers Watson and the National Business Group on Health, show there is a commitment among employers to do what they can to keep offering coverage in the near-term. Beyond 10 years, however, is when things get debatable. According to their employer survey, only 3 percent of employers are somewhat to very likely to discontinue health care plans for active employees in 2014 or 2015 without providing a financial subsidy. By the same measure, 45 percent of employers are somewhat to very likely to offer coverage to only a portion of their work force and direct the others to the exchanges.

While most employers will remain focused on sponsoring the design and delivery of their health care programs through 2015 (77 percent), they are much less confident that health care benefits will be offered at their organization over the longer term. Less than one in four (23 percent) companies are very confident they'll continue to offer health care benefits 10 years from now, down from a peak of 73 percent in 2007.

Unless there's a revolutionary way of delivering health insurance, employers will be circulating through all the options to combat high health care costs. The Towers Watson/NBGH survey shows health care costs per employee are expected to rise 5.9 percent this year, as compared to 5.4 percent in 2011. Health care costs per employee averaged $10,982 last year, and is expected to rise to $11,664 in 2012. Employees’ share of costs increased 9.3 percent during this period, to $2,764. This amount represents a 40 percent increase in costs from just five years ago, as compared to a 34 percent increase for employers over the same time period.

“As employers try to maintain the balance between containing costs and offering competitive total rewards packages, they are realizing that their future health care benefit choices are not quite as simple as ‘paying or playing,’” says Ron Fontanetta, senior health care consulting leader at Towers Watson. “In fact, there is a wide spectrum of design choices that will allow employers to develop a health care strategy that matches their unique objectives and workforce demographics.”

Besides actually cultivating healthier employees, the survey shows there are several emerging tactics they plan to use to control their costs:

  • Spousal and dependent coverage surcharges: Roughly half of the companies (47 percent) increased employee contributions in tiers with dependent coverage, and about a quarter (24 percent) are using spousal surcharges, with another 13% planning to do so next year.
  • Growth in Account-Based Health Plans (ABHPs): Nearly one in six companies (59 percent) are offering an ABHP today, and another 11 percent plan to do so by 2013. ABHP enrollment has nearly doubled in the last two years, from 15 percent in 2010 to 27 percent in 2012.
  • Changing pharmacy landscape: Six in 10 companies have added or expanded step therapy or prior authorization programs, and 21 percent reduced pharmacy copays last year for those using a generic with a chronic condition (with another 16 percent planning to add this feature in 2013).
  • Vendor management and transparency: Three in 10 companies (30 percent) have consolidated their health plan vendors in the past two years, and 11 percent plan to do so next year.

Confidence in Voluntary Benefits Rises

Profitability outlook increases over 2011 estimates

More brokers are confident about the voluntary employee benefits industry, a new survey shows. Results from Eastbridge Consulting Group’s Voluntary Industry Confidence Index finds confidence increased to 99.7 at year-end, up from 98.4 in a mid-year 2011 survey.

The index is calculated using three key expectation measures about the voluntary industry: sales growth, profitability of the industry, and employee enthusiasm about voluntary products.

“Feelings about the profitability of the industry rebounded the most,” says Gil Lowerre, president of Eastbridge. The percentage expecting lower profitability declined to just eight percent (down from 18 percent last time) and the percentage expecting increased profitability was up to 54 percent. “The percentage expecting sales growth for 2012 also improved nicely, with 95 percent expecting more sales,” Lowerre says.

The only measure that showed a decrease was employee enthusiasm about voluntary products. The mean was down from 3.82 to 3.80 primarily because more people said there would be “no change” in employee enthusiasm, explains Eastbridge vice president Bonnie Brazzell.

Eastbridge conducts the survey semi-annually and includes responses from individuals active in the market, among them carriers, brokers, vendors and employees. Like other confidence indices, the index is a single number that compares the current results to a baseline measure. The first Confidence Index survey was completed in December of 2005; the results from that survey serve as the “base” year (meaning the index was at 100 for that year).

By Kathryn Mayer

Survey: New wellness programs on the rise, existing ones to expand

By Marli D. Riggs | April 4, 2012

More plan sponsors continue to start wellness programs, while the majority of organizations with programs currently in place are looking to expand and invest, according to the 2011 Willis Health and Productivity Survey by Willis North America's Human Capital Practice.

According to the survey, 60% of respondents indicate they have some type of wellness program, an increase of 13% from 2010. Additionally, 58% indicate they plan to expand their wellness initiatives with added programs or resources.

“Wellness programs continue to evolve and it is encouraging to see more organizations initiate programs despite economic pressures and continuing challenges in accurately measuring outcomes and results,” says Jennifer Price, senior health outcomes consultant at Willis Human Capital Practice.

Other key findings from the survey include:

  • The most common types of wellness programs being offered by respondents include: physical activity programs (53%), tobacco cessation programs (49%) and weight management programs (45%).
  • Although 29% of survey respondents consider themselves to be a global organization, only 15% indicate they have implemented a wellness program for their global employees.
  • Forty-three percent of plan sponsors say the leading barrier to measuring success was difficulty in determining the influence of wellness compared with other factors impacting health care costs.

This year’s survey included a subset of questions that also asked employers about work/life balance programs. Findings reveal that 51% of respondents reported promoting work/life balance programs within their worksite wellness program. After employee assistance programs, flexible start/end times are the most common offering of work/life balance program options, say 81% of respondents. The survey finds helping employees achieve work/life balance is reported to be a significant concern by 18% of respondents, and somewhat of a concern by 54%.

“It is exciting to see more employers offering work/life balance programs as a part of their broader wellness efforts. Employers seem to realize that employees need resources to find the proper balance between the demands of work and personal life,” adds Price.

The survey represents the findings received from 1,598 plan sponsors. Forty-four percent of respondents had 1,000 or more employees.

Employers Continue to Look for Savings

The recent trend of shifting more health care and benefit costs to employees is showing no signs of letting up, according to new industry research.

A survey displayed that 22 percent of employers had medical deductibles of at least $1,000 this year for in-network services for their most popular plans, according to a report in Business Insurance, compared with just 8 percent in 2008. Twice as many employers (44 percent) imposed that deductible level on out-of-network services this year, the survey found.

"The biggest change in the past two years has been the increase in cost sharing with employees," said Michael Thompson, a principal. "Employers have been careful not to shift premium costs to employees, but have decided that the better way to shift costs is to require those who use health care services to pay more."

A separate report by Milliman also points to an increase in cost sharing in PPO family plans. According to Healthcare Town Hall, a website sponsored by Milliman, the survey found that the average premium cost of those plans this year increased $1,319, or 7.3 percent. Of the total cost increase, employers paid $641, while workers picked up the rest, totaling an increase of $275 in additional cost sharing and an additional $403 in payroll contributions..

Many employers, however, are searching for solutions beyond deductible increases. More employers -- especially midsize companies -- are turning to voluntary benefits to reduce their burden while still offering valuable benefits to their employees, according to a new LIMRA study. While employers traditionally have used voluntary benefits as a morale booster, nearly 80 percent of polled employers said they are most interested in voluntary worksite benefits because they bring no direct costs to their business, an onlinePLANSPONSOR news report noted. Two-thirds said they offer such benefits because it boosts their overall benefits package and allows workers to receive services cheaper than if they tried to buy coverage in the marketplace.

Although the trend of cost sharing is growing, U.S. workers are starting to see improvements in their overall compensation, which is creeping back toward pre-recession levels, according to a recent survey published on the Society for Human Resource Management's website. Only 9 percent of polled employers still have a pay freeze in place - down from 48 percent in mid-2010. More companies also are restarting bonus programs in an effort to retain top talent, the survey said.

Voluntary benefits can help contain company costs

To recap a previous blog post before jumping straight in to the questions:  Voluntary benefit plans help employers round out their employee benefit offerings amid cutbacks in company-paid core health care, allowing employers to provide employees with additional benefits without bearing the weight of increasing cost pressures.  These optional benefits can serve as value-added tools to help attract and retain top talent. Employees often pay 100 percent of the premium on these voluntary benefits through payroll deduction.  Many of these benefits can be offered to family and friends as well.  It's up to the employee; it's their money, and it's not costing the employer anything.
How can companies determine if adding a voluntary benefit program is the right choice for them?

They have to look at the true cost of running a company.  Adding a voluntary benefit program can help offset those costs for them.  Many companies are looking to ways to cut costs in the health insurance  arena.  It is extremely costly to maintain these major benefits.  Often, what these companies are doing, ultimately, is passing those costs on to their employees.

Most voluntary benefit programs will help reduce that cost to employees because of the unique system of these benefits.  If employers decide to lower their cost of mandatory benefits by passing some of that cost on to their employees, the employees can then offset those costs by participating in, for example, auto and home insurance programs saving them money over the traditional coves they would shop on their own.

What should companies look for in a voluntary benefit program?

You want to choose a company that can provide access to a variety of types of voluntary coverage and choice for your employees in the plans available.  The last thing you would want to do is to present a variety of new benefits to your employees, only to have them ultimately be confused about the different types of coverage, from different sources and the costs of each one.  You will want to work with a company that can provide a powerful, effective and simple voluntary benefits package that will be communicated clearly to your employees to achieve the highest level of participation and acknowledgement of the added perks.

What is the benefit of having several policies within the same voluntary benefit package?

Simply put, the renewal process for any benefit plan can be extensive to research and implement at the term of each and every policy, not to mention having to do that multiple times across multiple carriers for multiple plans.  That is a huge migraine in the making just thinking about it!  By having your plan developed and presented in a unified way to your employees, you will not only save administrative costs communicating these benefits, but you will also save time and money when it comes time to renew.


If you have additional voluntary benefit questions, please do not hesitate to contact our office to learn more!

Employers Get Creative with Tight Budgets....

Voluntary benefits are on the rise, but why is that the trend we are seeing?  The economy is in recovery, but it is and will continue to be a slow climb up a very tall mountain.  Company belts have not loosened and with the overall impact of healthcare reform still uncertain, it still may be quite some time before they let those belts out a notch or two.

According to HR Daily Report, this is why more employers are looking at Voluntary Benefits as a lower-cost incentive to attract new and retain existing talent.  Employers are taking to offering employees everything from auto and home insurance to legal plans or even pet insurance.  All of these being growing trends in employers looking to stay competitive.  That's the assertion at a recent presentation at the 2011 Health Care Benefits NY conference.  Outlined in the course of that presentation was a list of the most popular group voluntary benefits, now and in the future.

Most popular now included:

  • life insurance
  • disability (long and short-term plans), and
  • vision plans
Projected to be the most popular in the future:
  • long-term care
  • legal plans, and
  • auto and home insurance
There is one secret to success however, according to experts on the subject.  The success of your voluntary benefits program has absolutely nothing to do with WHAT you are offering, but rather HOW you are offering it!  The biggest tip to success is to be sure that your company sets up a payroll deduction for employees to participate.  This accomplishes two goals.  One, it helps employees sock away the money to cover the costs of premiums, etc, and two, it further reinforces with employees that your company endorses that specific benefits plan.
So the question still hangs as to why these types of benefits are the growing trend, especially when employees are paying for these benefits themselves?  For one, organizations can get group rates, allowing employees the chance to obtain these benefits less expensive than if they went and shopped for rates on their own.  Disability and life insurance are benefits companies may be offering already.  However, companies are now taking a closer look at enriching these benefit packages.  "Not only does offering voluntary benefits cost employers virtually nothing and help level the benefits playing field with much larger companies, it also affords employees access to various types of insurance coverage, typically with looser underwriting requirements and at group rates that are lower than is they went out and got the coverage on their own," explains
So how much savings potential for employees are we really talking about and how?
  • Because it provides protection against lost income, disability insurance (short and long-term) is perhaps the most popular voluntary benefit today.
  • The financial security afforded by life insurance makes it an especially popular voluntary benefit in uncertain economic times.  While term life is still most prevalent, a "fight to qualify" among employers and employees is making permanent life insurance more popular.
  • Voluntary dental insurance holds great appeal to both employees and employers because you can design plans so that it is not very expensive.
  • Relatively new among voluntary benefits, supplemental limited-benefit plans that provide a set dollar amount per day for hospital stays are gaining popularity, as are gap insurance policies that pay a certain amount up to a deductible.
  • More targeted in their coverage, but also appealing, especially to small businesses with high-deductible plans, are supplemental accident insurance and critical illness insurance.
Bottom line is that voluntary benefits can help keep your employees happy with little to no effect on your budget.  That is the type of Win-Win scenario that most companies in today's economy jump on.  If your organization already includes these types of benefits, be sure that they are being highlighted as part of your recruitment strategy.  Just because the employee ultimately covers the costs, doesn't mean that the accessibility of the benefits isn't very valuable.  Voluntary or now, you should utilize any perks or benefits your organization provides to set you apart from the competition!