Health insurance surpass $20,000 per year, hitting a record
According to an annual survey of employers, the cost of family health coverage has now surpassed $20,000, a record high. The survey also revealed that while most employers pay most of the costs of coverage, workers' average contribution for a family plan is now $6,000. Read this blog post from Employee Benefit News to learn more.
The cost of family health coverage in the U.S. now tops $20,000, an annual survey of employers found, a record high that has pushed an increasing number of American workers into plans that cover less or cost more, or force them out of the insurance market entirely.
“It’s as much as buying a basic economy car,” said Drew Altman, chief executive officer of the Kaiser Family Foundation, “but buying it every year.” The nonprofit health research group conducts the yearly survey of coverage that people get through work, the main source of insurance in the U.S. for people under age 65.
While employers pay most of the costs of coverage, according to the survey, workers’ average contribution is now $6,000 for a family plan. That’s just their share of upfront premiums, and doesn’t include co-payments, deductibles and other forms of cost-sharing once they need care.
The seemingly inexorable rise of costs has led to deep frustration with U.S. healthcare, prompting questions about whether a system where coverage is tied to a job can survive. As premiums and deductibles have increased in the last two decades, the percentage of workers covered has slipped as employers dropped coverage and some workers chose not to enroll. Fewer Americans under 65 had employer coverage in 2017 than in 1999, according to a separate Kaiser Family Foundation analysis of federal data. That’s despite the fact that the U.S. economy employed 17 million more people in 2017 than in 1999.
“What we’ve been seeing is a slow, slow kind of drip-drip erosion in employer coverage,” Altman said.
Employees’ costs for healthcare are rising more quickly than wages or overall economy-wide prices, and the working poor have been particularly hard-hit. In firms where more than 35% of employees earn less than $25,000 a year, workers would have to contribute more than $7,000 for a family health plan. It’s an expense that Altman calls “just flat-out not affordable.” Only one-third of employees at such firms are on their employer’s health plans, compared with 63% at higher-wage firms, according to the Kaiser Family Foundation’s data.
The survey is based on responses from more than 2,000 randomly selected employers with at least three workers, including private firms and non-federal public employers.
Deductibles are rising even faster than premiums, meaning that patients are on the hook for more of their medical costs upfront. For a single person, the average deductible in 2019 was $1,396, up from $533 in 2009. A typical household with employer health coverage spends about $800 a year in out-of-pocket costs, not counting premiums, according to research from the Commonwealth Fund. At the high end of the range, those costs can top $5,000 a year.
While raising deductibles can moderate premiums, it also increases costs for people with an illness or who gets hurt. “Cost-sharing is a tax on the sick,” said Mark Fendrick, director of the Center for Value-Based Insurance Design at the University of Michigan.
Under the Affordable Care Act, insurance plans must cover certain preventive services such as immunizations and annual wellness visits without patient cost-sharing. But patients still have to pay out-of-pocket for other essential care, such as medication for chronic conditions like diabetes or high blood pressure, until they meet their deductibles.
Many Americans aren’t prepared for the risks that deductibles transfer to patients. Almost 40% of adults can’t pay an unexpected $400 expense without borrowing or selling an asset, according to a Federal Reserve survey from May.
That’s a problem, Fendrick said. “My patient should not have to have a bake sale to afford her insulin,” he said.
After years of pushing healthcare costs onto workers, some employers are pressing pause. Delta Air Lines Inc. recently froze employees’ contributions to premiums for two years, Chief Executive Officer Ed Bastian said in an interview at Bloomberg’s headquarters in New York last week.
“We said we’re not going to raise them. We're going to absorb the cost because we need to make certain people know that their benefits structure is real important,” Bastian said. He said the company’s healthcare costs are growing by double-digits. The Atlanta-based company has more than 80,000 employees around the globe.
Some large employers have reversed course on asking workers to take on more costs, according to a separate survey from the National Business Group on Health. In 2020, fewer companies will limit employees to so-called “consumer-directed health plans,” which pair high-deductible coverage with savings accounts for medical spending funded by workers and employers, according to the survey. That will be the only plan available at 25% of large employers in the survey, down from 39% in 2018.
Employers have to balance their desire to control costs with their need to attract and keep workers, said Kaiser’s Altman. That leaves them less inclined to make aggressive moves to tackle underlying medical costs, such as by cutting high-cost hospitals out of their networks. In recent years employers’ healthcare costs have remained steady as a share of their total compensation expenses.
“There’s a lot of gnashing of teeth,” Altman said, “but if you look at what they do, not what they say, it’s reasonably vanilla.”
SOURCE: Tozzi, J. (25 September 2019) "Health insurance surpass $20,000 per year, hitting a record" (Web Blog Post). Retrieved from https://www.benefitnews.com/articles/health-insurance-costs-surpass-20-000-per-year
Hospital pricing transparency: More information, more confusion?
As of January 1, a new rule that requires hospitals to list the prices of all their services and medications they provide is in effect. Read this blog post to learn more about this ruling.
As of the first of this year, a new rule is in effect that requires hospitals to list the price for all the services they provide and medications they prescribe for patients while they’re in the hospital. In theory, this should give patients more information that can help them decide where it makes the most economic sense to receive hospital care. In actuality, while there’s a wealth of new data available, it can be difficult to find — and nearly impossible for people outside the healthcare industry to understand.
The document that aggregates the price information is called a chargemaster, and it can contain tens of thousands of entries. The new rule doesn’t require that the information be written in plain language, only that it be machine readable, so much of the data reads like it’s in a yet-to-be-discovered language. For example, if you download Memorial Sloan Kettering’s chargemaster, you’ll find an Excel spreadsheet that contains 13,088 entries such as “CAP MALE/FEMALE RAIL, $765” and “BX SUBCUT SKIN/INC, $1,771.” Even if a patient puzzles out the meaning of these abbreviations, the prices listed are different from the lower fees that insurers negotiate, so estimating how much you would pay for care is complicated at best and impossible at worst.
The goal of the hospital pricing transparency rule is to help patients understand the cost of their care and choose more wisely when deciding where to receive that care. Unfortunately, the information that is now available adds to the confusion and doesn’t help patients make one-to-one price comparisons when choosing where to receive care. In addition, the rule only covers care delivered by a hospital, so patients don’t have the information they need to make price comparisons for services performed in doctor’s offices, urgent care facilities, diagnostic test sites and outpatient surgical centers.
Though the new rule generally doesn’t help employees, employers can.
Even if price transparency doesn’t help workers better understand the cost of care and choose where to receive that care, there are strategies and resources that employers can provide to help their employees make more informed decisions about healthcare. Here are some of them.
Second opinions. Wrong diagnoses, inappropriate treatments (treatments that don’t meet the evidenced-based standard of care) and medical errors all drive up healthcare costs for both employers and employees and can lead to poorer health outcomes. One strategy to lower the risk of these types of problems is providing employees with streamlined access to second opinions from experienced physicians.
A second opinion can confirm or change an employee’s diagnosis, suggest other treatment options and pinpoint misdiagnoses, especially in the case of serious and complex conditions like cancer, autoimmune disease and back and joint problems. In fact, a Mayo Clinic study found that 88% of people who sought a second opinion from the hospital’s physicians for a complex medical condition received a new or refined diagnosis. Employers can make second opinions available to employees through several channels, including a health insurance plan or as a standalone benefit.
Care coordination. Duplicate testing and medical care is another source of wasted healthcare dollars. When communication between healthcare providers is inconsistent or medical records aren’t updated and shared among all treating physicians, employees may undergo repeat testing — for example, when a primary care physician and a cardiologist both order a cardiac stress test for a patient with shortness of breath. Employers can offer care coordination through a case manager for employees who are living with multiple health conditions.
This support can lower the risk of duplicative testing as well as duplicate prescriptions or medications that can result in interactions, which can put an employee’s health needlessly at risk. Another piece of this equation is the review and coordination of medical records, which is especially important when employees see multiple physicians. A medical records management service should include a review of the employee’s records by an RN or physician, consolidation of a comprehensive medical record, and the creation of a secure electronic medical record that can be shared with the employee’s permission with all treating physicians.
Guidance on where to receive care. While you can undergo a colonoscopy, medication infusion or a range of common surgical procedures at a hospital, that may not always be the most appropriate or cost-effective place to receive care. By offering employees the ability to talk with a care manager or adviser about the procedure they need and the options for where they can receive that care (a hospital, outpatient surgery center or doctor’s office), employers can help them receive the care they need and lower both claims costs and employee out-of-pocket costs.
Medical bill review. Another resource employers can offer to make sure healthcare costs are carefully managed is a medical bill review. Experts estimate that between 30% and 80% of medical bills contain errors that increase costs. There are many different causes of these errors, including the use of the incorrect billing codes and use of out-of-network healthcare providers. In addition to offering employees the services of a medical billing review and negotiation firm, they can provide education that lets employees know what types of errors are commonly made and how to spot them on their own bills.
SOURCE: Varn, M. (13 February 2019) "Hospital pricing transparency: More information, more confusion?" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/hospital-pricing-transparency-more-information-more-confusion?brief=00000152-14a5-d1cc-a5fa-7cff48fe0001
More part-time workers getting access to benefits
A new study by the International Foundation of Employee Benefit Plans found that more employers are moving toward extending more benefits to part-time workers. Continue reading this blog post to learn more.
Gone are the days that new talent might come to work for a company part-time in exchange for some extra cash and the promise of discounted merchandise.
Employers are moving toward extending more benefits to part-time workers, according to a new study by the International Foundation of Employee Benefit Plans. The Flexible Work Arrangements: 2017 Survey Report found that 78% of organizations employ part-time workers, and 90% of those organizations define part-time work as fewer than 30 hours a week.
And part-time workers can thank the tight labor market for the increase in benefit offerings.
“In order to attract and retain key talent, employers are seeing the need to broaden the scope of work from the traditional ‘40-hour per week model,” says Julie Stich, CEBS, associate vice president of content at IFEBP. “They’re also seeing that benefit offerings and other workplace perks are essential for growing any talented organization, regardless of the number of hours employees work per week.”
The most favorable medical benefits among employees working fewer than 30 hours a week were healthcare coverage (54%), prescription drug coverage (53%), dental and vision care (52%), flexible spending accounts (47%) and health savings accounts (33%), according to the report.
In addition, paid leave benefits offered to part-timers saw an uptick to include holidays, bereavement leave, sick pay, short-term disability, maternity leave, parental/family leave and personal leave.
Clothing retailer H&M recently announced its plan to offer six weeks of paid leave to the company’s 18,000 employees — including part-timers.
In addition, Eataly, said in September its new paid parental leave policy — eight weeks of time off for both mothers and fathers following the birth or adoption of a child — is available to all employees who have been working at the company for at least a year, regardless of hours worked per week. Dollar General also introduced a new paid parental leave benefit in March, offering two weeks of paid time off for all eligible full-time and part-time employees, and eight weeks of paid time off for birth mothers.
“U.S. organizations are not required to provide paid leave to part-time workers, but many do for several reasons: to retain high-performing workers, attract high-quality applicants, build worker loyalty and provide work-life balance,” Stich adds.
Paid time off and healthcare were also key benefits identified in the Society for Human Resource Management’s annual survey, with a 10% increase in companies offering healthcare benefits and more than half saying they offer some sort of paid time off to part-time workers.
More employers will likely offer benefits to part-time workers as the workforce shifts toward more flexible work options, Stich says. “Certainly, each organization is structured differently, and company cultures vary, but if offering part-time work arrangements and benefits is appropriate, they can be a vehicle for attracting top-tier talent while providing additional flexibility for current employees.”
SOURCE: Otto, N. (12 December 2018) "More part-time workers getting access to benefits" (Web Blog Post). Retrieved from https://www.benefitnews.com/news/more-part-time-workers-getting-access-to-benefits?brief=00000152-14a7-d1cc-a5fa-7cffccf00000
Association Health Plans Meet the 2018 Form M-1
The Employee Benefits Security Administration (EBSA) recently released the 2018 version of the Form M-1. Read this blog post for more information about the new Form M-1.
The Employee Benefits Security Administration (EBSA) is continuing to do what it can to help bring the new class of association health plans (AHPs) to life.
EBSA, an arm of the U.S. Department of Labor, unveiled the 2018 version of the Form M-1 Monday.
Administrators of multiple employer welfare arrangements (MEWAs) that provide medical benefits use Form M-1 to report on the MEWAs’ operations to the DOL.
The administration of President Donald Trump completed work on major new AHP regulations in June. The administration is hoping small employers will use the new AHPs to shield themselves from some state and federal mandates and to get a chance to benefit from being part of a large coverage buyer.
Any AHPs out there, including any AHPs formed under the new regulations, will need to file the 2018 Form M-1 with the Labor Department, EBSA said Monday.
An AHP, or other MEWA, can use Form M-1 both to register a new plan and to file the annual report for an in-force plan.
The 2018 annual report for an AHP or other MEWA in operation now will be due March 1, 2019.
If agents, brokers, benefit plan administrators or other financial professionals are trying to start AHPs, they are supposed to use Form M-1 to register the AHPs at least 30 days before engaging in any AHP activity.
“Such activities include, but are not limited to, marketing, soliciting, providing, or offering to provide medical care benefits to employers or employees who may participate in the AHP,” EBSA officials said in the form release announcement.
Resources
Links to AHP information, including information about the 2018 Form M-1, are available here.
SOURCE: Bell, A. (4 December 2018) "Association Health Plans Meet the 2018 Form M-1" (Web Blog Post). Retrieved from https://www.thinkadvisor.com/2018/12/04/association-health-plans-meet-the-2018-form-m-1/