What to consider before adding a genetic testing benefit
According to recent statistics from the Society of Human Resource Management (SHRM), 18 percent of employers provide health-related genetic testing benefits. Read this blog post for what employers should consider before adding a genetic testing benefit to their benefits package.
As employers look for new voluntary benefits to help attract and retain employees, a growing number are turning to direct-to-consumer genetic testing for all employees to their benefits plans. According to the latest statistics from the Society for Human Resource Management, 18% of employers provide a health-related genetic testing benefit, an increase of 6% over the previous year.
For the most part, it can be a smart move: Not only can the benefit differentiate one employer from others vying to hire from the same employee pool, genetic testing providers market the benefit as a way to potentially lower healthcare costs and increase employee wellness.
This type of testing can be valuable for employees at an increased risk for certain types of cancer, such as breast and ovarian cancer related to mutations of the BRCA1 and BRCA2 genes, those considering having a child who have risk factors for genetic conditions such as cystic fibrosis and Tay Sachs disease, those who have a family history of conditions like high cholesterol, and those who take medications such as blood thinners and anti-depressants. There also are tests that look for genes associated with conditions such as Parkinson’s disease, Alzheimer’s disease and celiac disease.
But employers also have to realize that genetic testing for all employees, regardless of family history and risk factors, comes with potential downsides. In fact, some physicians believe that widespread genetic testing of this type may even present a risk of harm. There’s also the issue of regulation and oversight of direct-to-consumer genetic testing. The industry is not currently regulated, which, some researchers have found, can lead to inaccurate or varying results. One study found that when the same genetic variant was provided to nine different labs for analysis, the answers provided were different 22% of the time, highlighting the risk of false positive and false negative results.
So for employers who offer — or are considering adding — a genetic benefit, make sure to think about the potential outcomes that can occur by doing so.
The potential for lower costs as well as unnecessary healthcare spending
If an employee’s genetic test is positive for a mutation that’s associated with cancer or another disease, he or she may be more proactive about screening for the disease and may make lifestyle changes that may lower the risk of developing the disease. There are potential healthcare cost savings to early detection of some conditions. For example, by some estimates, the cost for treating early-stage breast cancer is more than 50% less than the cost to treat the same cancer at an advanced stage.
For employees who undergo testing related to how effective a blood thinner or antidepressant will be, there can be better health outcomes as well as cost savings. One study found that when physicians prescribed the blood thinner Warfarin based on pharmacogenomic testing, adverse events decreased by 27%. Avoiding adverse events and making sure employees are taking the medications that can most effectively treat their conditions can help keep them healthy, out of the hospital and productively on the job, all of which has a positive financial impact.
But when you’re screening people who don’t have risk factors or a family history of these conditions, a positive test result can lead to unnecessary testing and medical procedures, potential complications from those procedures and the costs associated with that testing and care.
Before and after testing, education
Employers who offer genetic testing without a physician referral need to take steps to ensure that employees understand the risks and benefits of these tests upfront and that they know what a genetic test can and cannot tell them about their health now and in the future. The first step is for any employer offering genetic testing to provide education for employees.
Many employees don’t realize that having a gene mutation that’s associated with a disease does not mean that he or she will ever develop that disease. The risk associated with most genetic variations is, in fact, relatively small. Because of that misunderstanding, employees may experience needless worry or, if the test is negative for mutations related to a disease, may forgo screenings like mammograms, colonoscopies and cholesterol tests that can help detect health problems earlier when they are often more treatable. In the case of genetic testing for mutations associated with cancer, employees may not be aware that most cancers are not caused by a mutation in the single gene that the test screens for.
For some of the conditions that genetic tests screen for, like Alzheimer’s disease, there are currently no treatments. This can again cause anxiety for employees and their families. Genetic tests also have implications that reach beyond the specific employee who is tested. A positive test can affect siblings and children as well, opening the question of whether the employee wants or feels compelled to share the results with other family members who may also be at risk.
Employers who offer employees genetic testing should ensure that all employees who choose to undergo testing are guided by experienced genetic counselors who can help them interpret and understand the results of their test and can connect them with other healthcare providers for additional testing or treatment as needed.
SOURCE: Varn, M. (3 May 2019) "What to consider before adding a genetic testing benefit" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/what-to-consider-before-adding-a-genetic-testing-benefit
How to create a strong communication plan for open enrollment
What is your communication plan for open enrollment? Now that you have your plan changes locked in, it's time to focus on communicating those changes to your employees. Read this blog post to learn more.
Ready or not… the Benefits Super Bowl is here! Whether you are a broker, benefits manager or anywhere in between, you have been knee-deep on plan updates, rate reviews and benefit changes for months. Now that the plan changes are locked, it’s go-time! The focus is now on communicating and educating employees about their benefit options.
It takes an enormous amount of planning and execution to provide a productive open enrollment experience for employees. But, it is well worth it as this is often the only time during the year that employees stop to consider their benefit options.
Learn from past wins and misses
Consider previous years’ open enrollment communications and ask yourself the following:
- What is the feedback you received from employees (the good, the bad and the ugly)?
- What were the most common questions?
- Were there key pieces of information employees had difficulty finding?
Learn from the answers to these questions and then craft your content in a clear and concise manner that is easier for employees to digest.
The communication medium is key to your success
Now that you’ve developed the content to communicate, the next equally important step is determining how, when and where you deliver this information. Is there a centralized location where employees can find information for both core and voluntary benefits? Is the information in a format that the employee can easily share with his or her significant other?
It is critical to have multi-channel communications to reach your audience. Some employees may naturally gravitate to a company-wide email and the company intranet, while others lean on more interactive mediums like E-books, text messages, webinars or lunch and learns. Providing a variety of communication avenues ensures you are reaching employees where they want to receive information.
Make sure your communications campaign provides educational materials at each of the key milestones during the open enrollment journey–such as prior to enrollment, midway through enrollment, and right before enrollment closes. Wherever possible, always support employees through the process and give them options to reach out for help.
How to communicate the same benefits to a diverse workforce
You are likely communicating to a group of employees with diverse needs and wants. What may be appealing to an entry-level recent grad may not resonate with a senior-level employee nearing retirement. For example, employees with young children may be especially interested in accident insurance or pet owners might look to pet insurance to help offset the costs of well-visits and routine care. If possible, tailor your communications to different segments of the employee population.
Communicating voluntary health-related benefits
Core medical benefits are what employees gravitate to during the enrollment period. Are you offering voluntary benefits to employees? The most successful voluntary benefit programs are positioned next to core medical plans on the enrollment platform. This shows employees how those voluntary benefits (critical illness, accident insurance and hospital indemnity) complement the core offerings with extended protection.
When voluntary benefit programs are positioned as an integral part of the employee benefits experience, employees are more likely to understand the value and appreciate the support provided by their employer. For example, a critical illness program can help to bridge the gap of a high-deductible health plan in the case of a covered critical condition. Communicate that voluntary benefits can be an integral part of a “Total Rewards Package” and can contribute to overall financial wellness.
Review and refine
Finally, don’t miss your opportunity at the end of enrollment to review how your communication campaign performed. Pull stats and analyze your communication campaign for next year’s open enrollment… it is never too early to start! HR managers can glean valuable information and metrics from the employee experience.
SOURCE: Marcia, P. (1 November 2018) "How to create a strong communication plan for open enrollment" (Web Blog Post). Retrieved from https://www.benefitspro.com/2018/11/01/how-to-create-a-strong-communication-plan-for-open/
5 ways benefits educators can ease the open enrollment process
Are you prepared for open enrollment? HR professionals are responsible for effectively communicating plan options and changes to employees so they make informed decisions regarding their coverage and healthcare. Continue reading to learn more.
Open enrollment season is on its way, which means that HR’s already full plate just got a bit fuller. In addition to developing competitive health plans that attract and retain top talent – talent of all ages and with varying needs – HR pros are also responsible for effectively communicating plan options to employees to ensure that individuals make informed, cost-conscious decisions about their coverage and care.
See also: Here’s how HR pros can breeze through open enrollment
As the healthcare landscape becomes more complex, so do employee questions around their health care benefits. Many healthcare consumers today don’t feel comfortable navigating the health care system – which is why most roll over the same plan year after year. While HR teams want to manage the influx of employee questions around their benefits options, they struggle to provide the necessary guidance given their current bandwidth. Covering health plans in a large townhall meeting won’t provide the personalized information that employees need to make educated decisions. To deliver a more personal, empowering experience, organizations can look to benefits educators to supplement strapped HR teams.
Benefits educators can help individuals better understand the plan options available to them and select the package that offers the coverage they need at the price that best fits their budget. To ensure that benefits educators are aligned with the organization’s strategy, HR teams should arrange for educators well in advance of open enrollment so they are equipped to best explain the employer’s benefits plan options. Once up to speed, benefits educators can hold one-on-one conversations with employees to:
1. Define healthcare terms that employees don’t understand. With low healthcare literacy rampant across the U.S., disturbingly few employees are comfortable defining basic health terms such as “deductible,” “copay” or “coinsurance.” benefits educators cannot only explain these important terms but also help employees understand their significance in their coverage selection process.
2. Compare different plans to suit each employee’s needs. Benefits educators will work to understand the specific needs of each employee they meet. By taking the time to sit and get to know each employee, the benefits educator can recommend options that provide the coverage that best meets the needs of the employee and his or her family.
See also: Avoid these 12 Common Open Enrollment Mistakes
Third-party, independent benefits educators can be particularly valuable for employees who do not feel comfortable posing personal questions to their coworkers. By meeting one-on-one with an outsider who understands both benefits in general and company options in particular, employees are often more inclined to raise specific health or personal details that should guide their benefits selection. In fact, 45 percent of employees say they would prefer to speak to a benefits expert when choosing their coverage.
3. Equip employees with the information they need to choose their coverage. Left to their own devices, 83 percent of employees spend less than an hour reviewing their plan options before open enrollment – a lack of preparation that does not bode well for educated benefits selection. benefits educators can focus on the details that matter – saving the employee time and effort.
4. Explain voluntary benefits. Despite the increasing popularity of voluntary benefits, many employees are still confused about what they are, how they work and why they might be helpful. In reality, certain voluntary benefits can help control health costs and bridge the gap between medical coverage and out-of-pocket costs – added expenses that concern 61 percent of employees. In today’s multigenerational workforce – where employees have very different priorities when it comes to their health and financial wellness – benefits educators can dispel some of the mystery and suggest options that might meet individual needs.
5. Empower employees to make the most of their benefits year-round. Benefits educators can lay the groundwork for more educated health care consumers by directing employees to resources where they can find more information about their coverage and how their plans work after the open enrollment ends.
See also: 5 tips to make this the best open enrollment ever
More informed employees not only make smarter choices about their coverage and care but also better appreciate their employers – which has the potential to help with retention and business productivity. Ultimately, organizations see a win-win-win: happier employees who save on care, happier HR teams who save on time and happier executives, who see a significant return on their health care investments.
SOURCE: Murdock, G (21 September 2018) "5 ways benefits educators can ease the open enrollment process" (Web Blog Post). Retrieved from https://www.benefitspro.com/2018/09/21/5-ways-benefits-educators-can-ease-the-open-enroll/
The Effects of Ending the Affordable Care Act’s Cost-Sharing Reduction Payments
Controversy has emerged recently over federal payments to insurers under the Affordable Care Act (ACA) related to cost-sharing reductions for low-income enrollees in the ACA’s marketplaces.
The ACA requires insurers to offer plans with reduced patient cost-sharing (e.g., deductibles and copays) to marketplace enrollees with incomes 100-250% of the poverty level. The reduced cost-sharing is only available in silver-level plans, and the premiums are the same as standard silver plans.
To compensate for the added cost to insurers of the reduced cost-sharing, the federal governments makes payments directly to insurance companies. The Congressional Budget Office (CBO) estimates the cost of these payments at $7 billion in fiscal year 2017, rising to $10 billion in 2018 and $16 billion by 2027.
The U.S. House of Representatives sued the Secretary of the U.S. Department of Health and Human Services under the Obama Administration, challenging the legality of making the cost-sharing reduction (CSR) payments without an explicit appropriation. A district court judge has ruled in favor of the House, but the ruling was appealed by the Secretary and the payments were permitted to continue pending the appeal. The case is currently in abeyance, with status reports required every three months, starting May 22, 2017.
If the CSR payments end – either through a court order or through a unilateral decision by the Trump Administration, assuming the payments are not explicitly authorized in an appropriation by Congress – insurers would face significant revenue shortfalls this year and next.
Many insurers might react to the end of subsidy payments by exiting the ACA marketplaces. If insurers choose to remain in the marketplaces, they would need to raise premiums to offset the loss of the payments.
We have previously estimated that insurers would need to raise silver premiums by about 19% on average to compensate for the loss of CSR payments. Our assumption is that insurers would only increase silver premiums (if allowed to do so by regulators), since those are the only plans where cost-sharing reductions are available. The premium increases would be higher in states that have not expanded Medicaid (and lower in states that have), since there are a large number of marketplace enrollees in those states with incomes 100-138% of poverty who qualify for the largest cost-sharing reductions.
There would be a significant amount of uncertainty for insurers in setting premiums to offset the cost of cost-sharing reductions. For example, they would need to anticipate what share of enrollees in silver plans would be receiving reduced cost-sharing and at what level. Under a worst case scenario – where only people eligible for sharing reductions enrolled in silver plans – the required premium increase would be higher than 19%, and many insurers might request bigger rate hikes.
Figure 1: How much silver premiums would have to rise to compensate for loss of cost-sharing reduction payments
While the federal government would save money by not making CSR payments, it would face increased costs for tax credits that subsidize premiums for marketplace enrollees with incomes 100-400% of the poverty level.
The ACA’s premium tax credits are based on the premium for a benchmark plan in each area: the second-lowest-cost silver plan in the marketplace. The tax credit is calculated as the difference between the premium for that benchmark plan and a premium cap calculated as a percent of the enrollee’s household income (ranging from 2.04% at 100% of the poverty level to 9.69% at 400% of the poverty in 2017).
Any systematic increase in premiums for silver marketplace plans (including the benchmark plan) would increase the size of premium tax credits. The increased tax credits would completely cover the increased premium for subsidized enrollees covered through the benchmark plan and cushion the effect for enrollees signed up for more expensive silver plans. Enrollees who apply their tax credits to other tiers of plans (i.e., bronze, gold, and platinum) would also receive increased premium tax credits even though they do not qualify for reduced cost-sharing and the underlying premiums in their plans might not increase at all.
We estimate that the increased cost to the federal government of higher premium tax credits would actually be 23% more than the savings from eliminating cost-sharing reduction payments. For fiscal year 2018, that would result in a net increase in federal costs of $2.3 billion. Extrapolating to the 10-year budget window (2018-2027) using CBO’s projection of CSR payments, the federal government would end up spending $31 billion more if the payments end.
This assumes that insurers would be willing to stay in the market if CSR payments are eliminated.
Figure 2: How eliminating ACA cost-sharing reduction payments increases federal costs (2018)
Methods
We previously estimated that the increase in silver premiums necessary to offset the elimination of CSR payments would be 19%.
To estimate the average increase in premium tax credits per enrollee, we applied that premium increase to the average premium for the second-lowest-cost silver plan in 2017. The Department of Health and Human Services reports that the average monthly premium for the lowest-cost silver plan in 2017 is $433. Our analysis of premium data shows that the second-lowest-cost silver plan has a premium 4% higher than average than the lowest-cost silver plan.
We applied our estimate of the average premium tax credit increase to the estimated total number of people receiving tax credits in 2017. This is based on the 10.1 million people who selected a plan during open enrollment and qualified for a tax credit, reduced by about 17% to reflect the difference between reported plan selections in 2016 and effectuated enrollment in June of 2016.
We believe the resulting 23% increase in federal costs is an underestimate. To the extent some people not receiving cost-sharing reductions migrate out of silver plans, the required premium increase to offset the loss of CSR payments would be higher. Selective exits by insurers (e.g., among those offering lower cost plans) could also drive benchmark premiums higher. In addition, higher silver premiums would somewhat increase the number of people receiving tax credits because currently some younger/higher-income people with incomes under 400% of the poverty level receive a tax credit of zero because their premium cap is lower than the premium for the second-lowest-cost silver plan. We have not accounted for any of these factors.
Our analysis produces results similar to recent estimates for California by Covered California and a January 2016 analysis from the Urban Institute.
Self-funding and Voluntary Benefits: The Dynamic Insurance Duo
Did you know that self-funded health insurance and voluntary benefits can be a dream team when used in conjunction with each other? Check out this great article by Steve Horvath and Dan Johnson from Benefits Pro and find out how you can make the most of this dynamic insurance duo.
In an era of health care reform, double-digit rising health care costs, and plenty of “unknowns,” many employers view their benefit plans as a challenging blend of cost containment strategies and employee retention.
But perhaps they need to better understand the value of a little caped crusader named voluntary benefits.
Employers of all sizes share common goals when it comes to their benefits. They seek affordable, and quality benefits for their employees.
Some companies achieve these goals by cutting costs and going with a high-deductible, self-funded approach. While many associate self-funding with larger employers, in the current marketplace, it has become a viable option for companies across the board.
Especially when paired with a voluntary benefits offering supported by one-on-one communication or a call center, employers are able to cut costs and offer additional insurance options tailored to their employees’ needs. But there’s more.
Voluntary enrollments can help employers meet many different challenges, all of which tie back to cost-containment, streamlined processes and employee understanding and engagement. But before we explore solutions, let’s first understand why so many employers are going the self-funded route.
For most large and small employers, the costs of providing health care to employees and their families are significant and rising.
For companies who may be tight on money and are seeing their fully-insured premiums increase every year with little justification, self-funding serves as a great solution to keep their medical expenses down.
Self-funding: An overview
Self-funding allows employers to:
- Control health plan costs with pre-determined claims funding amounts to a medical plan account, without paying the profit margin of the insurance company.
- Protect their plan from catastrophic claims with stop-loss insurance that helps to pay for claims that exceed the amount set by their self-funded plan.
- Pay for medical claims the plan actually incurs, not the margin a fully insured plan underwrites into their premium, while protecting the plan with catastrophic loss coverage when large expenses are incurred. Plans may offer to share favorable savings with their employees through programs like premium holidays. These programs allow employee contributions to be waived for a period of time selected by the employer to reward employees for low utilization and adequate funding of their claims accounts and reserves.
- Take advantage of current and future year plan management guidance.
- Save on plan costs by using predictive analysis for health and wellness offered by the third-party administrator (TPA).
Beyond these advantages,self-funded plans may not be subject to all of the Affordable Care Act regulations as fully-insured plans, which is one of the reasons they provide a solution for controlling costs. Without these requirements, the plans can be tailored much more precisely to meet the needs of a specific employee group.
Boosting value: Advantages of adding voluntary benefits to a self-funded plan
Based on an employer’s specific benefit plan, and what it offers, employers are able to select voluntary benefits that can complement the plan and properly meet employees’ needs without adding extra costs to the plan.
Employees are then able to customize their own, personal benefit options even further based on their unique needs and available voluntary benefits.
This provides employees a myriad of benefits while also allowing them to account for out-of-pocket costs due to high-deductibles or plan changes, as well as provide long-term protection if the product is portable.
Voluntary solutions are about more than the products
Aside from the common falsehood that voluntary benefits are only about adding ‘gap fillers’ to your plan, you may be pleasantly surprised to learn that conducting a voluntary benefits enrollment can actually offer a number of services, solutions, and products, many of which may be currently unfamiliar to you.
Finding, and funding, a ben-admin solution
Some carriers offer the added bonus of helping employers install a benefits administration system in return for conducting a one-on-one or mandatory call center voluntary benefits enrollment.
The right benefits administration systems can help remove manual processes and allow HR to do what they do best—focus on employees and improving employee programs. No more headaches around changing coverage, change files to carriers, changing payroll-deductions or premiums.
Finding the benefits administration system that works best for your situation can make a big difference for your HR team.
Communication and engagement
Many employees are frustrated and scared about how changes to the insurance landscape will impact them. And with a recent survey noting that 95 percent of employees need someone to talk to for benefits information,1 they clearly are seeking ongoing communications and resources.
During the enrollment process, some carriers work with enrollment and communications companies who understand the employees’ benefit plan options and help guide them to the offerings that are best for them and their families.
At the same time, employers can enhance the communication and engagement efforts on other important corporate initiatives. For example, a client of ours increased employee participation in their high-deductible health plan (HDHP) via pre-communication.
Of the 90 percent of employees that went to the enrollment, nearly 70 percent said they were either likely or very likely to select the HDHP. Just a little bit of communication can go a long way toward employee understanding.
Providing education and engagement about both benefits and workplace initiatives increases the effectiveness of these programs and contributes to keeping costs down for employers. The more engagement employers generate, the healthier and better protected the employees.
Prioritizing health and wellness
Employers can also use the enrollment time with employees to remind them to get their annual exams. Many voluntary plans offer a wellness benefit (e.g. $50 or $100) to incentivize the employee and dependents.
The ROI for an employer’s health plan provides value as regular screenings can help detect health issues in the beginning stages so that proper health care management can begin and medical spend can be minimized.
Employers have also seized the opportunity of a benefits enrollment to implement a full-scale wellness program at reduced costs by aligning it with a voluntary benefits enrollment.
An effective wellness program will approach employee health from a whole-person view, recognizing its physical, social, emotional, financial and environmental dimensions. A properly implemented wellness program can ultimately make healthy actions possible for more of an employee population.
A formidable combination
What employers are seeking is simple -- quality benefits and a way to lower costs. With that in mind, offering a self-funded plan with complementary voluntary benefit products and solutions allows employers to take advantage of multiple opportunities while, at the same time, providing more options for their employees.
In today’s constantly changing landscape, self-funded plans paired with voluntary benefits is a formidable combination – a dynamic insurance duo.
See the original article Here.
Source:
Horvath S., Johnson D. (2016 November 23). Self-funding and voluntary benefits: the dynamic insurance duo [Web blog post]. Retrieved from address https://www.benefitspro.com/2016/11/23/self-funding-and-voluntary-benefits-the-dynamic-in?page_all=1
5 Things Millennials Need to Know About Life Insurance
As millennials grow older and start planning for their futures, one thing they will have to think about is life insurance. While access to the internet and mobile data has made learning about life insurance easier than before many millennials still have many unanswered questions when it comes to planning for their life insurance policy. Take a look at his great column by Helen Mosher from Life Happens and find out the top 5 thing Millennials need to know about life insurance.
1. Life insurance is a form of protection. If you Google “life insurance” you’ll get a slew of ads telling you how cheap life insurance can be, without nearly enough information about what you need it for. That’s probably because it’s not terribly pleasant to think about: this idea that we could die and someone we care about might suffer financially as a result. Life insurance provides a financial buffer for the people you care about in the event something happens to you. Think just because you’re single, nobody would be left in the lurch? Read the next point.
2. College debt may not go away. Did someone—like your parents—co-sign your student loans through the bank? If so, the bank won’t discharge that debt upon your death the way that the federal government would with federal student loans. That means your parents, or others who signed the paperwork, would be responsible for paying the full balance—sometimes immediately. Don’t saddle them with the bill!
3. If you don’t know anything about life insurance, it’s probably better if you don’t buy it off the internet. It’s what we’re used to: You find the thing you need or love on Amazon or Ebay or Etsy, click a few buttons, and POOF. It arrives at your door. But life insurance is a financial planning product, and while it can be as simple as a 20-year term policy for less than a cup of coffee each day (for real!), going through your options with an insurance professional can ensure that you get the right amount for the right amount of time and at a price that fits into your budget. And many people don’t know that an agent will sit down and help you out at no cost.
4. Social fundraising only goes so far. This relatively recent phenomenon has everyone thinking that they’ll just turn to GoFundMe if things go awry in their lives. But does any grieving person want to spend time administering a social fundraising site? The chances of going viral are markedly slim, and social fundraising sites will take their cut, as will the IRS. And there is absolutely no guarantee about how much—if any—money will be raised.
5. The best time is now. You’ll definitely never be younger than you are today, and for most of us, the younger we are the healthier we are. Those are two of the most important factors for getting affordable life insurance coverage. So don’t delay. And if you don’t have an agent, you can also use our Agent Locator. The key is taking that first step.
See the original article Here.
Source:
Mosher H. (2017 July 5). 5 things Millennials need to know about life insurance [Web blog post]. Retrieved from address https://www.lifehappens.org/blog/5-things-millennials-need-to-know-about-life-insurance/
Healthcare strategies that can save employers money
Todd Rolland compares the traditional strategies to new stratigies for healthcare savings in the artilce below.
It is no secret that employee benefit costs are rising. As an employer, we wonder what can be done to reduce costs and as an employee, we are curious if we are getting the best deal. Medical insurance costs are rising faster than many companies’ profit margins and outpacing inflation on a year-to-year basis.
Rising healthcare costs are eroding revenue unlike any other element within a business. Government regulations and rising premiums are also affecting cash flow which can impact all areas of business operations. Separating rhetoric and marketing from meaningful, impactful company-wide solutions is becoming increasingly difficult. However, as the paradigm shift of healthcare strategies gains momentum, sustainable solutions are becoming clearer.
There are evolving options with this new paradigm shift of healthcare strategies: traditional, direct contracting, reference-based pricing and bundled pricing. A strong market push for pricing transparency has created additional opportunities for employers to save money and control costs, and they are doing just that. Employers now have the ability to function much like the traditional PPO has historically functioned by negotiating directly with providers.
The traditional approach includes elements such as reinsurance, administration, PPO networks, pharmacy benefit managers, population health management, predictive modeling, multiple plan designs and wellness strategies.
New options
Direct contracting is also a viable option because providers are much more willing to contract directly with employers than ever before. The idea is to establish a delivery and pricing contract that accomplishes two primary objectives:
- An agreed-upon fee schedule for services performed that is less than typical insurance company PPO-contracted rates.
- Incentive for participants to utilize contracted providers for the care needed.
The third option, reference-based pricing, allows employers to structure partial self-funding plans that reimburse a certain percentage of Medicare reimbursements levels for claims. PPO fee schedules can be 100-200% higher than these Medicare rates. As a result, the reimbursement plan can save employers a considerable amount. However, there is still a risk in balanced billing. The direct contracting option protects the employer with balanced billing issues that they would otherwise experience with reference-based pricing methodologies.
Bundled pricing is rapidly evolving and creates a significant opportunity for employers to save money. Employers simply pay agree-upon cash pricing for surgeries performed on an outpatient basis, and in certain cases, an inpatient basis. The price includes all services including facility, surgeon, anesthesiology, pathology, radiology, etc.
Additionally, two strategies that are gaining attention around prescription costs are average script pricing and pass-through average sales price prescription pricing. Both offer employers opportunities to find significant claims savings.
See the original article posted on EmployeeBenefitAdvisor on August 9, 2016 Here.
Source:
Rolland, T. (2016, August 9). Healthcare strategies that can save employers money [Web log post]. Retrieved from https://www.employeebenefitadviser.com/news/healthcare-strategies-that-can-save-employers-money
5 Crucial Wellness Strategies for Self-Funded Companies
Originally posted on CareATC.com
Instead of paying pricy premiums to insurers, self-insured companies pay claims filed by employees and health care providers directly and assume most of the financial risk of providing health benefits to employees. To mitigate significant losses, self-funded companies often sign up for a special “stop loss” insurance, hedging against very large or unexpected claims. The result? A stronger position to stabilize health care costs in the long-term. No wonder self-funded plans are on the rise with nearly 81% of employees at large companies covered.
Despite the rise in self-insured companies, employers are uncertain as to whether they’ll even be able to afford coverage in the long-term given ACA regulations. Now more than ever, employers (self-insured or not) must understand that wellness is a business strategy. High-performing companies are able to manage costs by implementing the most effective tactics for improving workforce health.
Here are five wellness strategies for self-insured companies:
Strategy 1: Focus on Disease Management Programs
Corporate wellness offerings generally consist of two types of programs: lifestyle management and disease management. The first focuses on employees with health risks, like smoking or obesity, and supports them in reducing those risks to ultimately prevent the development of chronic conditions. Disease management programs, on the other hand, are designed to help employees who already have chronic disease, encouraging them to take better care of themselves through increased access to low-cost generic prescriptions or closing communication gaps in care through periodic visits to providers who leverage electronic medical records.
According to a 2012 Rand Corporation study, both program types collectively reduced the employer’s average health care costs by about $30 per member per month (PMPM) with disease management responsible for 87% of those savings. You read that right – 87%! Looking deeper into the study, employees participating in the disease management program generated savings of $136 PMPM, driven in large part by a nearly 30% reduction in hospital admissions. Additionally, only 13% of employees participated in the disease management program, compared with 87% for the lifestyle management program. In other words, higher participation in lifestyle management programs marginally contributes to overall short-term savings; ROI was $3.80 for disease management but only $0.50 for lifestyle management for every dollar invested.
This isn’t to say that lifestyle management isn’t a worthy cause – employers still benefit from its long-term savings, reduced absenteeism, and improved retention rates – but it cannot be ignored that short-term ROI is markedly achieved through a robust disease management program.
Strategy 2: Beef Up Value-Based Benefits
Value-Based Benefit Design (VBD) strategies focus on key facets of the health care continuum, including prevention and chronic disease management. Often paired with wellness programs, VBD strategies aim to maximize opportunities for employees make positive changes. The result? Improved employee health and curbed health care costs for both employee and employer. Types of value-based benefits outlined by the National Business Coalition on Health include:
Individual health competency where incentives are presented most often through cash equivalent or premium differential:
- Health Risk Assessment
- Biometric testing
- Wellness programs
Condition management where incentives are presented most often through co-pay/coinsurance differential or cash equivalent:
- Adherence to evidence-based guidelines
- Adherence to chronic medications
- Participation in a disease management program
Provider Guidance
- Utilization of a retail clinic versus an emergency room
- Care through a “center of excellence”
- Tier one high quality physician
There is no silver bullet when it comes to VBD strategies. The first step is to assess your company’s health care utilization and compare it with other benchmarks in your industry or region. The ultimate goal is to provide benefits that meet employee needs and coincide with your company culture.
Strategy 3: Adopt Comprehensive Biometric Screenings
Think Health Risk Assessments (HRAs) and Biometric Screenings are one and the same? Think again. While HRAs include self-reported questions about medical history, health status, and lifestyle, biometric screenings measure objective risk factors, such as body weight, cholesterol, blood pressure, stress, and nutrition. This means that by adopting a comprehensive annual biometric screening, employees can review results with their physician, create an action plan, and see their personal progress year after year. For employers, being able to determine potentially catastrophic claims and quantitatively assess employee health on an aggregate level is gold. With such valuable metrics, its no surprise that nearly 51% of large companies offer biometric screenings to their employees.
Strategy 4: Open or Join an Employer-Sponsored Clinic
Despite a moderate health care cost trend of 4.1% after ACA changes in 2013, costs continue to rise above the rate of inflation, amplifying concerns about the long-term ability for employers to provide health care benefits. In spite of this climate, there are still high-performing companies managing costs by implementing the most effective tactics for improving health. One key tactic? Offer at least one onsite health service to your population.
I know what you’re thinking: employer-sponsored clinics are expensive and only make sense for large companies, right? Not anymore. There are a few innovative models out there tailored to small and mid-size businesses that are self-funded, including multi-employer, multi-site sponsored clinics. Typically a large company anchors the clinic and smaller employers can join or a group of small employers can launch their very own clinic. There are a number of advantages to employer-sponsored clinics and it is worthwhile to explore if this strategy is right for your company.
Strategy 5: Leverage Mobile Technology
With thousands health and wellness apps currently available through iOS and Android, consumers are presented with an array of digital tools to achieve personal goals. So how can self-insured companies possibly leverage this range of mobile technology? From health gamification and digital health coaching, to wearables and apps, employers are inundated with a wealth of digital means that delivering a variation of virtually the same thing: measurable data. A few start-ups, including JIFF and SocialWellth, have entered the field to help employers evaluate and streamline digital wellness offerings.
These companies curate available consumer health and wellness technology to empower employers by simplifying the process of selecting and managing various app and device partners, and even connecting with tools employees are already be using.
Conclusion:
Self-insured companies have a vested interest in improving employee health and understand that wellness is indeed a business strategy. High-performing companies are able to manage costs by implementing the most effective tactics for improving workforce health including an increased focus on Chronic Disease Management programs; strengthening value-based benefit design; adopting comprehensive biometric screening; exploring the option of opening or joining an employer-sponsored clinic; and leveraging mobile technology.
Which strategies or tactics are you considering to implement in 2017?
Technology: Talking to a Financial Coach Reboots Financial Wellness and Narrows Gender Gap
Original post businesswire.com
In a year marked by increased market volatility and slow economic growth, it’s not a surprise that overall financial wellness levels remained virtually unchanged. Employees appear stuck, hitting a brick wall with debt, lack of emergency funds and inadequate retirement savings. However, the latest study from Financial Finesse shows that the way forward to improved employee financial wellness – and to narrow the financial Gender Gap – could be human-to-human coaching, with technology playing a supporting role.
The Year in Review: 2015, an analysis of employee financial trends based on anonymous data collected by workplace financial wellness firm Financial Finesse, describes a year where most employees have been treading water in terms of their financial wellness. Overall financial wellness levels were unchanged at 4.8 out of 10 vs. 4.7 in 2014.
The study shows that while technology was helpful in increasing employee awareness of their financial vulnerabilities, online interactions alone did not improve employee financial wellness. By contrast, employees who had five interactions including conversations on the phone or in person with a financial planner professional showed substantial progress. Those repeat interactions with a financial coach appear to help an employee get “unstuck,” and advance in key areas. For these regular participants:
- 80% have a handle on cash flow, compared to 66% of online-only users
- 72% have an emergency fund, compared to 50% of online-only users
- 98% contribute to their retirement plan, compared to 89% of online-only users
- 48% are on track for retirement, compared to 21% of online-only users
- 64% are confident in their investment strategy, compared to 42% of online-only users
Employers who offer financial wellness programs consider tailoring communications to address these vulnerabilities in particular:
- 58% may not be saving enough for retirement, with only 16% of Millennials on track to achieve their retirement goals.
- 51% don’t have an emergency fund. While this declines with age, a worrisome 25% of employees 65 and older still don’t have an emergency fund.
- 34% may be living beyond their means. For employees with family incomes of $100,000 or lower, less than half pay off their credit cards every month.
- 33% may have serious debt problems. Debt may be hurting African American and Latino employees the most, with 75% of African American and 66% of Latino employees saying getting out of debt is a top concern.
- Concern over market volatility is high. Many employees grew nervous about their retirement plan savings and turned to their financial wellness program for guidance on how to handle these market fluctuations.
5 Strategies to Cut Healthcare Costs without Cutting Benefits
Original post benefitsnews.com
For employers, it’s been an ongoing battle to keep health insurance costs down without cutting employee health benefits. According to a PwC report, healthcare costs will remain a challenge in 2016 as costs are expected to outpace general economic inflation with a 4.5% growth rate.
There is no single culprit in the battle against rising healthcare costs; rather, there are many drivers contributing to the increase. Soaring prices for medical services, new costly prescription drugs and medical technologies, paying for volume over value, unhealthy lifestyles and a lack of transparency concerning prices and quality are all factors contributing to the spike in premiums.
So what can you do?
It can be a difficult juggling act to keep your health insurance premiums from financially squeezing your business, while also providing a robust benefits package for your employees. However, you may have more options for controlling your company’s healthcare costs than you realize. With the right knowledge and planning, there are ways to keep health insurance costs from derailing your company’s profits while also providing your workforce with the benefits they need.
Here are five strategies to cut costs without minimizing the benefits offered to employees:
1. Level-funding company healthcare costs.
In between a traditional fully insured plan and a traditional self-funded plan lies an innovative solution known as level-funding.
Traditional fully insured plans are contracts between the employer and the insurer where the employer pays a predetermined and fixed amount per employee per month (PEPM) and the insurer assumes the financial (claims) risk, net of employee co-pays and deductibles.
Traditional self-funded plans are one in which the employer assumes the financial (claims) risk for providing healthcare benefits to its employees. In practical terms, self-insured employers pay for each out-of-pocket claim as they are incurred, and the model is almost always is packaged with stop-loss insurance in case of large claims.
Level-funding is a hybrid of the two aforementioned plans, whereby the plan is filed as a self-funded plan, but the employer is billed each month a fixed and unchanging premium per employee per month, and after a year or two may qualify for a refund of premium if claims were lower than expected, or receive a proposed increase to premiums at renewal if claims were higher than expected. Since these plans are filed as self-funded, they are typically exempt from state taxes and many of the federal healthcare law’s health insurance taxes, but subject to a modest annual transitional reinsurance fee.
Additionally, according to data from the U.S. Department of Health and Human Services, nearly 30% of employers with between 100 and 499 employees self-insures their benefits, and over 80% of employers with 500 or more employees self-insure their benefits.
2. Provide a proactive wellness initiative.
Health and wellness programs have become popular ways for employers to manage healthcare costs — and some companies are finding that employees are more engaged in these programs when they’re offered incentives, rewards or even disincentives for participating or attaining certain health-related goals. Some companies are also seeing an impact of incentives on their program ROI.
For wellness programs to be effective, they need to be robust and allow for individual needs and interests. Wellness programs need to be comprehensive and tailored to individuals; meeting them where they are and helping them keep their healthy goals and ambitions in check with robust resources.
One other important aspect of having an effective wellness program is measuring employee engagement. By determining their level of inclusion, employers can understand how to implement incentive-based initiatives for the future. And remember, leading by example is important to make your employees feel comfortable.
3. Implement tax-advantaged programs.
Tax-Advantage benefits programs allow for a reduced cost of living for employees by handling expenses using pre-tax dollars. This method ensures the use of money that is valued at 100% of a wage or salary, instead of paying with funds that are devalued due to taxation.
There are four major types of programs that utilize this method: flexible spending accounts (FSAs), health savings accounts (HSAs), health reimbursement arrangements (HRAs) and premium offset lans (POPs). Each program offers a different process for healthcare payments that involves both employers and employees, and can lighten the burden of rising medical expenses.
4. Use a flexible contribution arrangement (FSA).
Elaborating further on the aforementioned benefit programs, FSAs enable employees to collect and store money that can be used for medical expenses tax-free. FSAs may be funded by voluntary salary reductions with an employer, and there is no employment or income tax enforced.
Another benefit of FSAs stems from the ability of employers to make contributions towards an account that can be excluded from an employee’s gross income. From an employee’s mindset, an FSA allows for flexibility and a metaphorical safety net in case of a medical emergency.
5. Use deductible exposure mitigation vehicles (HRAs).
A health reimbursement arrangement is another tax-advantaged employer health benefit plan that can trim your tax bill and reduce the cost of medical services.
HRAs are an employer funded medical expensed reimbursement plan for qualifying medical expenses. These plans reimburse employees for individual health insurance premiums and out-of-pocket medical expenses. They allow the employer to make contributions to an employee's account and provide reimbursement for eligible expenses. All employer contributions are 100% tax deductible when paid to the participant to reimburse an expense. They are also tax-free to the employee.
Based on the plan design, HRAs can be an excellent way to supplement health insurance benefits and allow employees to pay for a wide range of medical expenses not covered by insurance.
What works, what doesn’t
It’s crucial to educate employees on available tools and programs — by doing so you can control costs, while simultaneously providing appropriate benefits and employee engagement. To make the most out of a conscientious business decision, take the time to understand what is and isn’t working for you on your current plan, and what your other options are.
By adopting these new healthcare benefit strategies, you are engaging your workforce and enabling them to have an active role in determining an appropriate course of action.
A proper benefits partner maintains track of legislation and regulatory changes, advocates for small to mid-sized businesses and has the expertise to prevent violations from unforeseen rules and laws. By enabling these programs and using the right benefits partner, you can see your company’s healthcare costs lower substantially.