10 things to check when planning 2016 health benefit packages
The clock is ticking down to 2016 which means time is running out to dot the 'i' and cross the 't' for your health benefit packages. Employee Benefit Adviser has these tips.
1) Employer shared-responsibility (ESR) strategy: Ensure the intended goal of avoiding or paying ESR assessments for 2016 coverage is supported by coverage offers, administrative and recordkeeping processes, and benefit documents.
2) ESR reporting: Arrange data sources, systems and administrative processes to collect all information about enrollees with minimum essential coverage (MEC), full-time employees, and coverage offers needed for reporting on 2016 coverage. Create a process for correcting any erroneous IRS filings and personal statements.
3) Preventative care: Ensure “non-grandfathered” group health plans comply with the final ACA rules and recent guidance on cost-free preventive services.
4) Other ACA reporting and disclosure requirements: Review delivery operations for summaries of benefits and coverage (SBCs) and watch for revised SBC templates. Prepare for round two of online submission and payment of ACA’s reinsurance fee.
5) Mid-year changes to cafeteria plan elections: Decide whether to permit mid-year changes to cafeteria plan elections for either or both of the status-change events in IRS Notice 2014-55.
6) ACA’s out-of-pocket maximum: Verify that self-only and other (e.g., family) coverage tiers in “non-grandfathered” plans meet ACA’s 2016 out-of-pocket (OOP) limits for in-network care. Confirm that family coverage also satisfies ACA’s self-only OOP limit for each enrollee.
7) Same-sex marriages and domestic partnerships: Assess how the U.S. Supreme Court’s Obergefell v. Hodges ruling that legalizes same-sex marriage nationwide affects your benefit programs and employment policies. Also, consider the decision’s indirect implications for domestic partner coverage.
8) Mental health parity: Check that plan designs and operations provide parity between medical/surgical and mental health/substance use disorder (MH/SUD) coverage. Federal audits of health plans now evaluate compliance with the final Mental Health Parity and Addiction Equity Act (MHPAEA) rules that took effect in 2015. In addition, state legislative activity and litigation around parity issues continue.
9) Wellness: Review employee wellness programs against the proposed Equal Employment Opportunity Commission (EEOC) rules requiring voluntary participation and restricting incentives for completing health risk assessments and/or biomedical screenings. Be prepared to make changes after EEOC finalizes these rules for nondiscriminatory wellness plans under the Americans with Disabilities Act.
10) Fixed-indemnity and supplemental health insurance: Review fixed-indemnity and supplemental health insurance policies to ensure they qualify as excepted benefits under the ACA and the Health Insurance Portability and Accountability Act (HIPAA).
IRS unveils health care page for large employers
Original post by Jeff Stimpson, eba.benefitnews.com
The new ACA Information Center for Applicable Large Employers page on IRS.gov features information and resources for employers of all sizes on how the health care law may affect them if they fit the definition of an applicable large employer.
The page includes such sections as trends and resources for ALEs; how to determine if you are an ALE; and outreach materials including FAQs and links to forms, among other materials.
In 2016, ALEs must file an annual information return and provide a statement to each full-time employee reporting whether the company offered health insurance, and if so, what insurance it offered.
RELATED: How to Avoid ACA Filing Penalties
Companies that will file 250 or more information returns for 2015 must e-file the returns through the ACA Information Reports system. Draft Publication 5165, “Guide for Electronically Filing Affordable Care Act Information Returns,” contains information on the communication procedures, transmission formats, business rules and validation procedures for returns that companies must transmit in 2016.
Although most employers will not be affected, companies should determine if they are an ALE, which comprises an average of at least 50 full-time employees (including full-time equivalents) during 2014. A company with fewer than 50 full-time employees may be an ALE if it shares a common ownership with other employers.
If it's On-site, It's Alright
During this period of health care reform, most employers are looking at ways to control health care costs while still maintaining a healthy workforce and providing excellent medical services to their employees. One of the ways to accomplish this goal is by having an on-site clinic or one that’s nearby. A survey conducted by the National Association of Worksite Health Centers (NAWHC) revealed that 95% of the companies surveyed said they met their goals -- at least partially -- of increasing employee satisfaction and productivity with an on-site clinic. When you consider such a high percentage was achieved, it makes having an on-site clinic a no-brainer; right? Especially when that same survey also found that more than 80% reported that access to care was improved by their clinic and increased participation in worksite health programs was increased by 75%. Even more amazing is that nearly 70% said the clinic improved their health and 64% said reduced medical costs were achieved.
Dental gap: Coverage slips through reform's cracks
Originally post December 9, 2014 by Bob Herman on www.businessinsider.com.
Dental care is a peculiar niche of the U.S. healthcare system. Even though teeth and gums are just as much part of the human body as kidneys or elbows, they are insured differently — a lot differently.
When the Patient Protection and Affordable Care Act was written and debated, comprehensive dental insurance never really became a focal point. Lawmakers ultimately created a few provisions that may boost access to oral care, but dental coverage still escapes the grasp of millions of Americans.
Dental plans garnered national attention after it was discovered that HHS overstated 2014 enrollment figures in the ACA's insurance exchanges. The government included almost 400,000 stand-alone dental plans, which are much cheaper and separate from standard health plans. After accounting for those, the number of people who were enrolled in full-service medical plans was 6.7 million. A House committee plans to grill CMS Administrator Marilyn Tavenner on the numbers Tuesday.
Lost in that discussion, however, is the question of how much the law has done to advance dental care. Not enough, advocates argue.
The Affordable Care Act mandated pediatric dental services as one of the 10 essential health benefits for health plans, but adult dental services were excluded. In addition, all health plans must cover oral health risk assessments for children up to 10 years old with no copayment, coinsurance or deductible. The law also allowed states to expand Medicaid and its related dental benefits to more low-income children and adults.
But large gaps in coverage remain, primarily for adults who don't qualify for Medicaid. “More children have been enrolled (in dental plans) through the Affordable Care Act,” said Maxine Feinberg, president of the American Dental Association. “However, it really only helped adults in a minimal way.”
About 187 million people have some form of dental insurance, according to the National Association of Dental Plans. Coverage is provided through two main outlets: employers or public programs like Medicaid and the Children's Health Insurance Program.
A majority of people who have dental insurance get it through their employer. Almost nine in 10 employers with 200 or more workers and about half of all companies offer dental benefits, according to the Kaiser Family Foundation. The most common forms of coverage are like “prepaid gift cards,” Feinberg said. Routine cleanings and other preventive services are completely covered, and all other dental care needs are covered up to a yearly maximum figure.
But that leaves about 130 million Americans who have to pay for their dental care completely out of pocket or rely on supplemental dental policies. That figure includes millions of Medicare beneficiaries. Traditional Medicare does not cover dental care unless it's an emergency procedure during a hospital stay.
Medicare, Medicaid pitfalls
Cost and a lack of dental providers are cited as the key barriers for obtaining care. In some instances, the results have been lethal. The most famous case was Deamonte Driver, a 12-year-old boy in Maryland who died in 2007 after bacteria from an infected tooth spread to his brain. Deamonte's family lost its Medicaid coverage. More recently, in 2011, Kyle Willis, 24, died in Ohio after a wisdom tooth infection forced him to the emergency department. Mr. Willis had no insurance and couldn't afford antibiotics.
Ultimately, the Affordable Care Act is expected to bring some kind of dental coverage to 8.7 million kids and 17.7 million adults by 2018, according to an ADA-commissioned analysis conducted by actuarial consulting firm Milliman. A vast majority of those gains will be through Medicaid expansion, and some asterisks apply.
Medicaid dental benefits for adults vary widely in each state. Some states like Connecticut and New York offer extensive coverage that includes preventive cleanings and restorative services like fillings and crowns. But others offer zero dental coverage, or only cover emergency services that relieve tooth pain and infection. That means many people who live in states expanding Medicaid eligibility may only benefit marginally, and some others in non-expansion states won't benefit at all. The ADA study said of the 26 states expanding Medicaid, nine provide “extensive” adult dental benefits.
The scenario also assumes patients can find dentists accepting Medicaid. Only one-third of practicing dentists take Medicaid patients due to lower reimbursement rates.
Dr. Richard Manski, a dentistry professor at the University of Maryland who has studied dental insurance said the state programs that prioritize dental care actually offer “robust” coverage. But “the problem with the Medicaid plans is there's always a fixed pot of money,” he said.
Dental benefits are often the first to get cut when states need to get their Medicaid budgets in order. Even the federal government has encouraged state Medicaid programs to tinker with their dental care benefits when money gets thin. In 2011, then-HHS Secretary Kathleen Sebelius wrote letters to governors saying that limiting or eliminating dental care benefits is an effective way to save Medicaid funds.
The impact of the ACA's exchanges on dental care is similarly cloudy. Although dental benefits for children up to age 19 are required for all health plans sold on the individual and small-group markets, each exchange can take a different approach, said Colin Reusch, senior policy analyst at the Children's Dental Health Project. Some exchanges require health insurers to embed pediatric dental coverage. Others allow the benefits to be sold in stand-alone policies, requiring people to pay a separate premium.
The average cost differential between a medical policy with embedded dental coverage and a medical policy without dental coverage on the federally run exchanges ranges from $33.45 per month for a family with one child to $70.05 for a family with three or more children, said Evelyn Ireland, executive director of the National Association of Dental Plans.
Mr. Reusch said he's hopeful the gap between dental and medical care can be bridged, even though the ACA will leave many without dental insurance and nothing has changed with Medicare. Providers in accountable care organizations or patient-centered medical homes are now somewhat responsible for the oral health of patients, especially if dental issues ultimately lead to more complex health problems.
“In the long term, that's really beneficial in terms of shifting the oral healthcare delivery system towards integration, which is where we want to go,” Mr. Reusch said.
More on the EEOC and Wellness Programs
Source: ThinkHR.com
The U.S. Equal Employment Opportunity Commission’s (EEOC) recent litigation against employers over incentives granted to employees participating in wellness programs may be a concern for other employers. Specifically, the EEOC has asserted that the size of the incentive that is lost by employees that refuse to participate could render an employer’s wellness program “involuntary” and in conflict with the Americans with Disabilities Act (ADA). Our recent blog post on this issue highlights the concern.
The EEOC’s action raises issues that have confused employers and benefit advisors for many years: What types of wellness program rewards or penalties are acceptable under the ADA? Will programs that comply with other federal laws for employer-sponsored health plans avoid claims of discrimination under the ADA?
The ADA generally prohibits employers from requiring employees to answer disability-related questions or to undergo medical exams (except certain health/safety exams in specific professions or industries). The EEOC, which regulates various ADA provisions, has confirmed that employers may conduct health assessments or exams as part of a voluntary wellness program without violating the ADA. Medical records must be kept confidential and separate from personnel records.
While the EEOC has not published clear guidance as to the meaning of “voluntary” participation, the need for clarification is apparent. The Health Insurance Portability and Accountability Act (HIPAA), has long permitted health plans to make wellness rewards (incentives or penalties) up to certain limits — those limits were increased under the Affordable Care Act (ACA) starting in 2014. These ACA limits may inform strategy on employer implementation of incentives to promote participation in wellness programs.
Penalties and Rewards
The ADA speaks of penalties, but in the vernacular of the ACA, the term “reward” refers both to an incentive payment or a penalty surcharge. Further, the ACA categorizes wellness programs as either “participatory” or “health-contingent” and applies different rules for each category.
Participatory programs do not depend on health status and no specific health outcome is required. For example, a program that rewards all employees that complete a health risk assessment, without regard to the results, is a participatory program. A health-contingent program is one that offers the reward only to employees that either meet an initial health standard (such as satisfactory biometric screenings) or do not meet the initial standard but meet a reasonable alternative standard (such as attending an educational program).
Starting with 2014 plan years, the maximum allowable reward (incentive or penalty) in a health-contingent wellness program under the ACA is 30 percent of the health plan cost, or 50 percent if the program is designed to prevent or reduce tobacco use. (Health plan cost generally is the COBRA rate minus the 2 percent administrative fee.) If the program is merely participatory, however, there is no limit under the ACA for the amount of reward an employer can give an employee.
Regardless of the ACA provisions for wellness programs, the EEOC presently believes that compliance with the ADA prevents employers from offering rewards amounting to steep or enormous penalties — even in a participatory-only program. In its recent case, the EEOC cites the difference between employees paying 25 percent versus 100 percent of the cost for health insurance based on whether they participated in a wellness program as an “enormous penalty.”
Considering the EEOC’s public comments endorsing voluntary wellness programs, and that their enforcement activity is focused on programs imposing penalties that they describe as enormous or steep, it appears likely the use of wellness program incentives will continue to be permitted. However, compliance with the reward limits and reasonable alternatives required under the ACA needs to be complimented with awareness of the EEOC’s concern over excessive penalties. Formal guidance from the EEOC is still pending.
For more information about wellness programs under the ACA, read the Final Rule.
10 states with the highest uninsured rates post-ACA
Originally posted on https://ebn.benefitnews.com.
While the uninsured rate has dropped to a record low of 13.4% nationwide, according to Gallup figures, rates differ dramatically across states. Here are the 10 states with the highest uninsured rates in the aftermath of health care reform implementation, according to WalletHub.
A decreasing rate of uninsured Americans shows the Affordable Care Act has impacted the number of individuals with health care coverage, but that impact varies widely by state. We’ve already highlighted the 10 states with the lowest uninsured rates post-ACA. Here are the 10 states with the highest uninsured rates, according to WalletHub, which analyzed data from the Kaiser Family Foundation, the Centers for Medicare and Medicaid Services, the Department of Health and Human Services, and the U.S. Census Bureau. Seven states were excluded from analysis because of data limitations.
Pre-ACA uninsured rate: 21.66%
Post-ACA projected uninsured rate: 18.16%
Difference before and after: -3.50%
Pre-ACA uninsured rate: 18.92%
Post-ACA projected uninsured rate: 18.29%
Difference before and after: -0.63%
Pre-ACA uninsured rate: 19.76%%
Post-ACA projected uninsured rate: 18.33%
Difference before and after: -1.43%
Pre-ACA uninsured rate: 20.48%
Post-ACA projected uninsured rate: 18.96%
Difference before and after: -1.52%
Pre-ACA uninsured rate: 26.52%
Post-ACA projected uninsured rate: 19.58%
Difference before and after: -6.94%
Pre-ACA uninsured rate: 24.29%
Post-ACA projected uninsured rate: 19.59%
Difference before and after: -4.69%
Pre-ACA uninsured rate: 24.73%
Post-ACA projected uninsured rate: 19.61%
Difference before and after: -5.12%
Pre-ACA uninsured rate: 22.41%
Post-ACA projected uninsured rate: 20.91%
Difference before and after: -1.50%
Pre-ACA uninsured rate: 18.11%
Post-ACA projected uninsured rate: 21.46%
Difference before and after: 3.34%
Pre-ACA uninsured rate: 26.8%
Post-ACA projected uninsured rate: 24.81%
Difference before and after: -1.99%
3 Takeaways From the Medicare Trustees Report
Originally posted at 9:41 am EST, August 1, 2014 by Drew Altman on https://blogs.wsj.com.
The annual report from the Social Security and Medicare trustees predicted that Medicare will be solvent until 2030, four years later than the trustees predicted last year. That’s thanks to the recent slowdown in Medicare spending and a stronger economy that yields higher revenue through payroll tax contributions to the Medicare trust fund.
The administration and congressional Democrats are taking credit for elements of the Affordable Care Act that have helped to slow the growth in Medicare spending, and they warn against changes to Medicare that they fear would shift costs to seniors and undermine the program.
Republicans, however, see little good in the trustees’ report. “Don’t be fooled by the news that Medicare has a few more years of solvency,” Rep. Kevin Brady, chairman of the House Ways and Means subcommittee on health, said in a statement. More fundamental changes to Medicare are needed, many Republicans argue, such as transforming the program to a premium-support or voucher model.
Here are three points that might have been lost in the back and forth over the report by those on the left and the right:
* Contrary to conventional wisdom, Medicare appears to be outperforming the private sector. Medicare spending per capita rose at a 6.1% annual clip between 2000 and 2012 vs. a 6.5% growth rate for private health insurance. And Medicare spending is projected to rise at a 4% per capita rate between 2013 and 2022 vs. 4.9% for private insurance. (The bad news is that GDP per capita is projected to rise more slowly, at 3.7% per year.) Medicare’s problem is less poor performance and more the challenge of meeting the needs of an aging society and seniors who have modest incomes to pay for their health care.
* The ACA is projected to cut $716 billion in expected increases to providers and insurers between 2013 and 2022. Despite claims that cutting payments to providers and private plans could make the sky fall, there is no evidence so far that the industry or beneficiaries have been adversely affected by the reductions. In fact, enrollment has been growing in the private Medicare Advantage plans, which were hit by the most severe and controversial reductions, and the gains are projected to continue. So far, complex schemes to reform the way Medicare pays doctors and hospitals, which many believe hold promise, have produced mixed results in the effort to cut costs. But as $716 billion in Medicare savings demonstrates, the tried-and-true way to save money continues to be shaving a little off payment increases each year, as long as the health-care industry is still in the black and can absorb it.
* Perhaps the best news from the 2014 trustees report is that the country has a bit more time to hope for a more functional Congress that can figure out how best to finance Medicare for an aging population. It is almost impossible to envision the current Congress and administration working together on these long-term challenges.
With liberals and conservatives at odds over Medicare’s future direction and seniors such a strong voting group, it will be difficult to shift Medicare quickly in any direction. But there is good news for now in the trustees report.
Millennials under insured compared to other age groups
“A lot has been made of the so-called ‘young invincibles’ who are choosing to forgo health insurance,” said Laura Adams, senior analyst, insuranceQuotes.com. “This could be a costly mistake, especially because this group has easy access to health insurance. Young people typically pay much lower prices to obtain coverage via the health insurance exchanges and can receive subsidies depending on their income. Plus, they can stay on their parents’ health insurance policies until age 26.”
Millennials also are less likely than other age groups to own health, auto, life, homeowner’s, renter’s and disability insurance, according to the report. Some of the disparity can be attributed to living with their parents or having fewer assets to protect, insuranceQuotes.com said, but millennials appear to be under insured across all insurance lines.
“Fewer Gen Yers are buying houses and more are living at home with their parents,” said Kile Lewis, co-CEO and co-founder of oXYGen Financial, a financial planning firm serving generations X and Y. “But only 12 percent of 18- to 29-year-olds have renters insurance despite the fact that almost four out of five adults under 25 live on their own, and two-thirds of adults ages 25 to 29, rent their homes, according to a report from the Joint Center for Housing Studies of Harvard University.”
Highlights from the report:
- 95 percent of millennials said their overall financial security is very or somewhat important, almost the same number as consumers aged 30 to 64.
- 12 percent of millennials have renter’s insurance.
- 64 percent of millennials lack life insurance. The most common objection is that it costs too much.
- 36 percent of millennials do not have auto insurance, which could be attributed to declining numbers of young adult drivers.
- 10 percent of millennials have homeowners insurance, compared to half of consumers ages 30 to 49, and 75 percent of those 65 and older.
- 13 percent of millennials have disability insurance, compared with 37 percent of those 30 to 49.
“Despite all of this evidence that millennials do not have a lot of insurance, most millennials are confident they are prepared for the financial consequences of car accidents, having their belongings stolen, incurring substantial medical bills or becoming disabled,” InsuranceQuotes said. “Sixty percent of 18-29 year-olds are either very or somewhat confident that they are prepared for those risks; older adults are equally confident in their own preparations.”
The survey was conducted by Princeton Survey Research Associates International, and findings are based on responses from 1,003 adults in the continental United States. Statistical results were weighted to correct known demographic discrepancies; the margin of sampling error for the complete set of weighted data is plus or minus 3.5 percentage points,
Employers create game plan for expected health care cost increases
Originially posted on August 22, 2014 by Michael Giardina on https://ebn.benefitnews.com
Employers across the country predict that their health care costs will increase by 5.2% in 2015 if they decide to maintain their current health plan structures. With modest changes, this increase drops down to 4%, according to a recent Towers Watson’s survey of nearly 400 employee benefit professionals from midsize and large companies.
Meanwhile, Towers Watson finds that the rising tide of health care costs has become a main focus of executives, with two-thirds of chief financial officers and chief executive officers holding a key place in health benefit strategy discussions. It’s coming down to wire for many employers to get costs down as the ACA’s excise tax takes effect in 2018.
Randall Abbott, senior consultant with Towers Watson, says that many employers are approaching the cost conversation “as a balance of shareholder responsibility and social responsibility.” But it’s not a surprise that three-quarters of employers are worried about the excise tax, commonly referred to as the Cadillac tax.
“There is this impression that employers are just raising costs up,” Abbott explains, but highlights “they are doing it out of necessity.”
“They are trying to do it as thoughtfully and as responsibly as they can, and that’s a constant battle,” Abbott continues.
This battle, according to Towers Watson’s survey, is becoming a reality for many. More and more employers are planning to incorporate consumer-driven health plans, and other high-deductible health plans, into their coverage umbrella. By 2017, more than half of respondents expect to make this plan the only option, eliminating other plans.
“Inaction is not an option here,” Abbott explains, while noting that account-based health options such as health savings accounts can help all interested parties realize the costs at point-of-care.
Tom Meier, vice president of product development for Health Care Service Corporation, the nation’s largest customer-owned health insurer, agrees that CDHPs have been growing at record rates. Trade group America’s Health Insurance Plans reports that 15.5 million Americans were covered in HSA-eligible plans – a number that has tripled in the last six years.
“We’re seeing employers go all in on CDHPs, and I don’t see that slowing anytime soon,” Meier explains to EBN. “Employers are going to have to revisit their plan design and likely move out of those high cost benefit designs in order to comply and get under [the ACA’s excise tax] that threshold.”
Currently, HCSC has more than 2 million members enrolled in CDHPs under the insurer’s offering, which includes five Blue Cross and Blue Shield states. Meier adds that moving from $250 preferred provider organization health plan to a full-replacement $5,000 deductible CDHP is not something that employers should rush into. He adds that HR and benefit managers can also help to alleviate some of the expected employee unrest from the change by offering resources.
“As you’re asking them [employees] to be the consumers of care, you have to give them the tools to survive and thrive, or else you are kind of throwing them out into the wilderness,” Meier says.
Another growing trend for employees, which has been tabbed for movement in 2016 and 2017 by a third of Towers Watson survey respondents, is reducing company subsidies for spousal and dependent coverage. Also, 26% indicate they are considering excluding spousal coverage all together should they have coverage elsewhere.
Last summer, it was reported that UPS planned to stop providing coverage to a portion of employees’ spouses who were able to opt into medical coverage through their own employers. First reported by Kaiser Health News, it was disclosed that more cost associated with the landmark health care law was forcing the move. Of the more than 33,000 spouses being covered, UPS said that about 15,000 could gain coverage from their current employers.
UPS said in a memo to employees that “limiting plan eligibility is one way to manage ongoing health care costs, now and into the future, so that we can continue to provide affordable coverage for our employees.”
While UPS declined to comment on the past spousal health plan coverage change, Paul Fronstin, director of the Employee Benefit Research Institute’s health research and education program, notes that re-examining spousal coverage, as well as looking at HSA-eligible plans and health exchanges, are areas where employer interest is growing.
Fronstin adds that “everything is on the table,” however.
Are pharmacy discount cards still relevant?
Originally posted August 15, 2014 by Michael Giardina on https://ebn.benefitnews.com
Providers of prescription drug discount cards are increasing their efforts to reach out to employers, even as the Affordable Care Act is expected to decrease the ranks of those most likely to use the cards – those without health insurance.
The FamilyWize Community Service Partnership, which seeks to reduce the cost of prescription medicine for children, families and individuals by $1 billion by the end of 2015, is one provider looking to educate more employers about its discount card program.
“One of the areas we have really focused is with employers with lower waged workers because many of them do not work full-time, or they may not opt for the plan the company is providing because of costs,” says Lori Overstreet, vice president of marketing for FamilyWize. “Obviously, if they were part-time, then the company wouldn’t need to cover them, but this would give them a benefit, or if they opt out of the company plan this will also give them a benefit because the card is free to the consumer and free to the company.”
FamilyWize works with Envision Pharmaceutical Services, a pharmacy benefit management company, to negotiate prices at more than 60,000 brand name pharmacies such as Walmart, Kmart, CVS and Target. These negotiated prices are realized when FamilyWize discount drug card are used by consumers.
“The price depends obviously on the chain, the prescription itself, and even where they are,” says Steve Tremitiere, vice president of strategic partnerships at FamilyWize. He adds that most of the discounts appear with generics, but some can be for brand name drugs.
FamilyWize recently cemented 10-year national partnership with United Way Worldwide in an effort to address needs for the uninsured and underinsured. The average savings for FamilyWize discount card holders is 40% and can reach up to 75%, Tremitiere says.
Tremitiere, wants to be clear that all types of employees and employers can use the benefit, which easily be registered for online and printed out directly from a user’s home or work computer. “Employers are a good conduit because they are a trusted resource,” Tremitiere explains.
But not everyone agrees that these types of prescription drug discount cards still offer value in the post-ACA world.
“With the advent now of the Affordable Care Act and what’s involved, you probably have fewer and fewer people that would need it [prescription discount cards] because they can probably get the negotiated discount off their prescription drugs through their employers or exchanges,” says Michael J Staab, president and co-founder of Innovative Rx Strategies, a pharmacy consulting firm.
Gregory I. Madsen, a registered pharmacist and principal and co-CEO of Innovative Rx Strategies, adds that these discount cards are for “people who don’t have prescription drug coverage, which is very few people anymore.”
A virtual game changer of the prescription drug discount program was the introduction of Medicare Part D, also called the Medicare prescription drug benefit. The Medicare Prescription Drug Modernization Act was first signed into law by President George W. Bush in December 2003, and was seen as a safety net for seniors who were paying out-of-pocket for their prescription drugs.
“They were the cash-paying customer, they were the cash cows of the pharmacy world,” says Madsen. “They were paying cash for all their stuff and these cards were really targeting those people. And then Medicare Part-D came in and they got in under contracted rates and the cash-paying customer sort of went away, except for this small group of part-time employees that were employed.”
Even though the number of uninsured is shrinking because of the ACA, small employers may find value in discount prescription drug cards.
“If they [these employers] have less than 50 employees, they [employees] are part-time, this card will still be a better deal than them paying cash,” Madsen explains.
Other examples of prescription drug discount cards or prescription discount programs, in general, are surviving the ACA’s implementation. For instance, the National Association of Counties, the only national organization that represents county governments on Capitol Hill, offers the NACo Prescription Discount Card Program. The free program, operated by CVS Caremark, has been in place since 2005.
Andrew Goldschmidt, NACo director of membership marketing, says that the program is one of the “oldest and most mature” offered by the association, which dates back to administration of President Franklin Delano Roosevelt.
“You have a lot of folks that have a lot of prescriptions that are off formulary, depending on what kind of plan they have, or if they even have a plan,” says Goldschmidt. The NACo prescription discount card program has saved $570 million on 45 million prescriptions for employees in over 1,400 counties.
“The prescription drug program [usage] has gone down a bit, and rightly so if people are getting coverage through the ACA that didn’t have it before,” explains Goldschmidt, while noting that now it can be used as a good complementary program for employers.
Jackie Chin, executive vice president of New York State Restaurant Services, a division that handles all insurance programs for the New York State Restaurant Association, says the ACA “should not slow down registration” for its WellCard program. In addition to its prescription discounts, its WellCard offers discounts on dental, medical and vision coverage for uncovered employees and their families.
“Since there is no cost to participate in this discount card program, an employee can still register with WellCard because with regular health insurance through ACA or public health exchanges, your co-pays for prescription may be more expensive,” Chin explains. The New York State Restaurant Association includes a diverse group of approximately 10,000 members that range from small mom-and-pop restaurant owners to large restaurant groups.
“It differs from other prescription drug discount card because there is no membership fee and there is no cost to the employee and the employee's family member to avail themselves of any savings they can receive by using this discount card,” Chin says.