Taking the first steps to a long-term benefits strategy
A common struggle for many companies that are searching for a cost-effective, successful employee benefits strategy is that HR professionals and finance professionals have conflicting objectives. Continue reading this blog post to learn more.
The quest for a cost-effective and successful employee benefits program can feel like a search for the Holy Grail. To most, it’s an elusive goal within the context of rising and unsustainable costs.
Unlike “Monty Python and the Holy Grail,” in which a comedy of errors made for a hilarious movie, nonsensical benefits strategies can have serious consequences.
One major challenge is that many HR and finance professionals have conflicting objectives. HR’s mission is to design a program that is competitive in the marketplace for human capital needs while supporting the organization’s culture. Finance, on the other hand, is charged with managing to a budget by controlling expenses to mitigate year-over-year increases. The result, in spite of best intentions, leaves organizations unable to commit to a multi-year plan and opt in favor of living year-to-year.
So, how do you overcome this challenge?
Step 1: Key HR and finance stakeholders need to align on goals and objectives. They also need to remain engaged in the process throughout the year (not just at renewal). Once you achieve alignment, these objectives should be memorialized into a benefits philosophy. Why? So the collective team has guiding principles for future decisions.
Step 2: Identify the cost drivers of the program. Many employers have little line of sight into how their plan is performing until it’s too late. Once you are staring down the barrel of a 25% increase, an organization may be forced to make swift changes to soften the blow to their bottom line rather than follow a strategic approach that comes with preparation. Unfortunately, this type of knee-jerk reaction only temporarily relieves the pressure and may create unintended consequences to the employee value proposition.
Step 3: Understand where you were, where you are and where you want to be. After 25 years in the consulting industry, one thing I know for certain is there are only so many levers you can pull to rein in escalating benefit costs. Identify the levers and how far you want to pull them.
Step 4: Determine success metrics. I’ve seen many organizations implement new tactics, such as a health savings account. When I ask them if it was successful, they can’t answer because they didn’t set an internal bar for success. That barometer will help you gauge success and determine what changes need to be made to your approach to achieve your goal.
Step 5: Commit the plan to writing and review it periodically. Just like your company’s overall business plan, you will need to make adjustments along the way as your business changes.
Regardless of strategy, I recommend employers take steps toward a self-funding benefits model. Historically, self-funding was for groups with 1,000 lives and above. But that’s no longer the case. Self-funding provides that all-important line of sight into cost drivers because of access to claims data. Having a deeper understanding of the “why” behind costs allows an organization to implement a data-driven approach to the overarching benefits strategy. Self-funding also provides more plan design flexibility and eliminates the internal costs that an insurance carrier builds into a plan for profit.
It’s more effective to create a benefits strategy that is sustainable over time, so when you inevitably endure a higher-than-normal renewal cycle, typically every three to five years, you are prepared to stay the course.
Consider timing. When you make changes to a benefit plan is just as important as what changes you make. Evaluate the timing of benefit changes, how they are implemented and how adjustments will impact your workforce now and in the future.
For example, if you plan to add new voluntary benefits, such as indemnity plans, it may make sense to run them “off cycle” from the core medical benefits open enrollment season. This gives employees more time to conduct research about the new product option and make an educated decision.
Strive for simplicity. I can’t stress this enough. The Affordable Care Act, an increase in voluntary benefit options, new funding models and benefit trends have created an enormous amount of noise in the insurance industry. Tune it out and simplify your process as much as you can. Your HR and Finance teams are overwhelmed and so are your employees. Instead of throwing new benefits at them each year, focus on educating them and making choices simple. In fact, any long-term benefits plan worth its weight always includes an education and communications component.
Benefit illiteracy is rampant, and confusion over options at open enrollment can have consequences for the employee throughout the plan year. If your employees choose their benefits online, spend the open enrollment meeting educating them on how to buy and consume insurance, rather than just what the benefit choices are for the plan year, or how to use the online enrollment tool. You should also communicate throughout the year, rather than just at open enrollment to support employees’ understanding of their benefits program.
Identify other areas where employees might struggle. One trend is to offer transparency tools to help them choose a doctor or specialist. But be aware that the sheer number of doctors in a given list can be overwhelming. Rather than offering employees a choice of 50 doctors, narrow it down to five providers with the best healthcare outcomes.
Making it simpler for employees to be better consumers of healthcare will help you cut costs and get on the right path to a long-term benefit strategy. Of course, you’ll have to check in each year and consider making small adjustments to the program, and data will help guide these changes. Adjustments should all be in service of a long-term plan. If you begin your long-term plan by asking the question, “Where were we, where are we now and where do we want to be in the future?” you’re halfway there. You may eventually find that your Holy Grail is within reach.
SOURCE: Bloom, A. (14 May 2019) "Taking the first steps to a long-term benefits strategy" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/taking-the-first-steps-to-a-long-term-benefits-strategy
Digital health revolution: What we’ve learned so far
Digital health devices provide personalized feedback to users, helping improve their health. Continue reading this blog post to learn more about the evolving digital health revolution.
The promise of the digital health revolution is tantalizing: a multitude of connected devices providing personalized feedback to help people improve their health. Yet, some recent studies have called into question the effectiveness of these resources.
While still evolving, many compelling use-cases are starting to emerge for digital health, including a set of best practices that can help guide the maturation of this emerging field. In the near future, many people may gain access to individual health records, a modern medical record that curates information from multiple sources, including electronic health records, pharmacies and medical claims, to help support physicians in care delivery through data sharing and evidence-based guidelines.
As these advances become a reality, here are several digital health strategies employers, employees and healthcare innovators should consider.
Micro-behavior change.
Part of the power of digital health is the ability to provide people with actionable information about their health status and behavior patterns. As part of that, some of the most successful digital health programs are demonstrating an ability to encourage daily “micro-behavior change” that, over time, may contribute to improved health outcomes and lower costs. For instance, wearable device walking programs can remind people to move consistently throughout the day, while offering objective metrics showcasing actual activity patterns and, ideally, reinforcing positive habits to support sustained change. Technology that encourages seemingly small healthy habits — each day — can eventually translate to meaningful improvements.
Clinical interventions.
Big data is a buzz word often associated with digital health, but the use of analytics and technology is only meaningful as part of a holistic approach to care. Through programs that incorporate clinical intervention and support by care providers, the true value of digital health can be unlocked to help make meaningful differences in people’s well-being. For instance, new programs are featuring connected asthma inhalers that use wirelessly enabled sensors to track adherence rates, including frequency and dosage, and relay that information to healthcare professionals. Armed with this tangible data, care providers can counsel patients more effectively on following recommended treatments. Rather than simply giving consumers the latest technologies and sending them along, these innovations can be most effective when integrated with a holistic care plan.
Real-time information.
One key advantage of digital resources, such as apps or websites, is the ability to provide real-time information, both to consumers and healthcare professionals. This can help improve how physicians treat people, enabling for more customized recommendations based on personal health histories and a patient’s specific health plan. For instance, new apps are enabling physicians to know which medications are covered by a person’s health plan and recommend lower-cost alternatives (if available) before the patient actually leaves the office. The ability to access real-time information — and act on it — can be crucial in the effort to use technology to empower healthcare providers and patients.
Financial incentives.
Nearly everyone wants to be healthy, but sometimes people need a nudge to take that first step toward wellness. To help drive that engagement, the use of financial incentives is becoming more widespread by employers and health plans, with targeted and structured rewards proving most effective. From using mobile apps and comparison shopping for healthcare services to encouraging expectant women to use a website to follow recommended prenatal and post-partum appointments, financial incentives can range from nominal amounts (such as gift cards) to hundreds of dollars per year. Coupling digital health resources with financial rewards can be an important step in getting — and keeping — people engaged.
The digital health market will continue to grow, with some studies estimating that the industry will exceed $379 billion by 2024. To make the most of these resources, healthcare innovators will be well served to take note of these initial concepts.
SOURCE: Madsen, R. (14 March 2019) "Digital health revolution: What we’ve learned so far" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/digital-health-revolution-what-weve-learned-so-far?brief=00000152-14a5-d1cc-a5fa-7cff48fe0001
4 ways to help employees master their HDHPs in 2019
Now is a great time to help your employees better understand their High Deductible Health Plans (HDHP) for 2019. Continue reading this blog post for steps HR can take to help employees stay on the right track.
As 2018 draws to a close, it’s a great time to give HDHP veterans and newbies at your company some help understanding — and squeezing more value out of — their plans in 2019.
Here are four simple steps your HR team can take over the next few months to put employees on the right track.
1. Post a jargon-free FAQ page on your intranet
When: Two weeks before your new plan year begins
Keep your FAQ at ten questions (and answers!), maximum. Otherwise, your employees can get overwhelmed by their health plans and by the FAQ.
When writing up the answers, pretend you’re talking directly to an employee who doesn’t know any of the insurance jargon you do. Keep it simple, straightforward, and free of insurance gobbledegook.
[Image credit: Bloomberg]
Make sure your questions reflect the concerns of different employee types: Millennials who haven’t had insurance before, older employees behind on retirement, employees about to have a new kid, etc. To get a clear sense of these concerns, invite a diverse group of 5-7 employees out for coffee and ask them.
Some sample questions for your FAQ might be:
• Is an HSA different from an FSA?
• Do I have to open an HSA?
• How much money should I put in my HSA?
• This plan looks way more expensive than my PPO. What gives?
2. Send a reminder email about setting up an HSA and/or choosing a monthly contribution amount
When: The first week of the new plan year
When your employees don’t take advantage of their HSA not only do they miss out on low-hanging tax savings, your company misses out on payroll tax savings, too.
So right at the start of the new year, send an email that explains why it’s important to set up a contribution amount right away.
A few reasons why it’s really important to do this:
- You can’t use any HSA funds until your account is fully set up and you’ve chosen how much you’re going to contribute.
- If you pay for any healthcare at all next year, and don’t contribute to your HSA, you’re doing it wrong. Why? You don’t pay taxes on any of the money you put into your HSA and then spend on eligible health care…which puts real money back in your pocket. (Last year, the average HSA user contributed about $70 every two weeks and saved $267 in taxes as a result!)
- There’s no “use it or lose it” rule! Any money you put into your HSA this year is yours to use for medical expenses the rest of your life. And once you turn 65, you can use it for anything at all. A Mediterranean cruise. A life-size Build-a-Bear. You name it!
3. Give your HDHP newbies tips on navigating their first visit to the doctor and pharmacy
When: The week insurance cards are mailed out
When employees who are used to PPO-style co-pays realize they have to pay more upfront with their HDHP, they can get…cranky. And start to doubt their plan choice — or worse, you as their employer choice.
So set expectations ahead of time to avoid employee sticker shock and to prevent you from getting an earful. Specifically, remind employees which types of visits are considered preventative care (and likely free) and which aren’t. Then explain their options when it comes to paying for — and getting reimbursed for — the visit.
4. Share tips on saving money on care with all your HDHP users
When: Any time before the end of the first quarter of the year
Specifically, you might recommend that your employees:
- Check prescription prices on a site like Goodrx.com before they buy their meds
- Visit an urgent care center instead of the ER, if they’re sick or hurt but it’s not life-threatening
- Use a telemedicine tool (if your company offers one) to get free online medical advice without having to leave their Kleenex-riddled beds
Sure, following this communication schedule requires extra elbow grease. But if you defuse your employees’ stress and confusion early, they’ll feel more prepared to take control of their healthcare and get the most out of their plans. And as a bonus, you and your team get to spend less time answering panicked questions the rest of the year.
SOURCE: Calvin, H. (17 December 2018) "4 ways to help employees master their HDHPs in 2019" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/4-ways-to-help-employees-master-their-hdhps-in-2019?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/
What’s in store for voluntary benefits in 2019
Voluntary benefits will continue to be popular with benefit managers who are trying to lower healthcare costs and retain employees. Read this blog post for more 2019 voluntary benefits trends.
Benefit managers are still catching their breath as the curtain closes on this year’s open enrollment season. But smart benefits managers are already evaluating new products and benefit changes for the 2019-2020 season.
Themes around cost-saving strategies concerning healthcare premiums will continue to resonate — but what else will happen in the upcoming year? Voluntary benefits will continue to hold the key for many benefit managers looking to lower costs and maintain value for employees by providing flexibility to a diverse workforce.
Voluntary benefits offer pivotal advantages to employers and employees alike. By offering these programs through an employer, employees often receive better pricing, plan designs and underwriting support compared to what is available on the individual market. Payroll deduction capability and enrollment as part of their normal core enrollment process and portability are also available.
Here are three voluntary benefits to watch in 2019.
Employee purchase programs.
Nearly one quarter of all Americans do not have adequate emergency savings, according to a survey by consumer financial services company Bankrate. This means that if they need to make a significant purchase, they are likely to withdraw a loan from their 401(k) plan.
Employee purchase programs help employees pay for items they may need immediately, but may not have the funds or credit available. These programs generally allow employees to spread out the payments on the purchased products — such as appliances, car tires or computers — over a period of time through payroll deduction. Young employees who are trying to establish credit while managing student loan repayments — and may be strapped for cash — can especially benefit from an employee purchase programs.
Group legal insurance plans.
Group legal plans are not new, but they are still valuable for employees. For a cost that is less than a cup of coffee, group legal plans provide employees with access to attorneys for will preparation, estate planning, dealing with elderly parents, traffic violations, real estate purchases, and document review and preparation. These plans offset the expense of professional legal representation and the time it takes to locate the right representation to handle legal matters.
These plans may be especially valuable to employees who are thinking of buying a house, adopting a child or planning for their estate. Still, group legal insurance plans are available to all employees, and can provide a buffer for workers who may need to navigate identity restoration after a theft or combat an unforeseen traffic ticket. These plans also save employees time and money when the need for a legal professional arises.
Student loan benefits.
Student loan benefits have been one of the hottest topics in voluntary benefits in 2018 and it’s not going away any time soon. An IRS private letter ruling this past August allowed one company to amend its 401(k) plan to allow employer contributions of up to 5% to individuals who contribute at least 2% to their student loan. This may just be the start to more legislation concerning student loan debt solutions.
In the interim, as the tuition debt crisis grows, employers are seeking ways to support their employees. There are several strategies that can be employed.
Some solutions can be offered at no cost, while others have administrative charges and the cost of contributions to factor in. For employers who have the budget, a student loan repayment plan may be the answer. There are many vendors who can partner with an employer to help develop a plan that is designed to meet the company’s goals.
Employers without a budget can seek a student loan solution partner that offers comprehensive educational tools such as written materials, debt navigation tools, FAQs, one-on-one counselors and webinars. Another option is to offer student loan refinancing. These lenders can help employees manage their debt. Even though refinancing is not for everyone, well-vetted student loan refinancing partners should be considered as part of a comprehensive student loan debt solution strategy. Understanding the approval rate is important, as well as whether there are any other incentives, such as a welcome bonus, that may be applied to the loan principal.
SOURCE: Marcia, P. (28 November 2018) "What’s in store for voluntary benefits in 2019" (Web Blog Post). Retrieved from: https://www.benefitnews.com/opinion/whats-in-store-for-employers-and-voluntary-benefits-in-2019
Addressing Long-Term Care Concerns
When insurance plan conversations lead to discussions about after retirement, there are certain hot-button issues that will swing employee conversations out of your control. When helping older employees with retirement and beyond, two topics will change the atmosphere in the room. One is the long-term viability of Social Security, which frequently comes up as a question. The second is on the conversation of long-term care, which has the possibility to make or break a retirement plan. In this installment of CenterStage, Donald McClurg, one of our financial advisors, breaks down what matters and offers answers to many of the questions concerning long-term health.
What Exactly is Long-Term Care? What’s Gobbling up Your Retirement?
You place insurance on the things that are valuable to you, such as your car, your home and possibly your pet. What about your life? Is your family of importance to you, and beyond that, what about your legacy (i.e. any funds left over from your lifetime given into your living family members)? Currently, there’s about a 50% chance a 65-year-old will require care such as an in-home nurse or a medical/assisted living facility that can deliver optimal, specialized care. For employees near retirement or the 65 years-old mark, there is a trove of questions surrounding long-term care, including:
- Should I consider a hybrid long-term care plan?
- Is the insurance worth it for me, given how insurers have been increasing the price of premiums?
- How do I avoid a government facility should I need care?
- How much money should be saved and when should saving begin?
- Can I afford this/Will I make it?
- What are my blind spots?
Unfortunately, the “right” answer to these vexing questions regarding long-term healthcare is exclusively individual-specific. Factors in the determination are dependent upon the individual’s wealth, age, desire to leave a bequest and a need for peace of mind, amongst all other factors. Donald believes, “The biggest risk to a financial plan is not running out of money, it is incurring a financial catastrophe later in life and not having protection. Right now, that catastrophe has the highest probability of showing up in the form of long-term care.”
Commonly viewed as less superior to other insurance options already being taken out of a paycheck, the fact of the matter is this is not another out-of-pocket expense placed on you, such as renters or car insurance. Rather, long-term care should be seen as a valuable choice; an investment in your future and for your family. As a “numbers guy”, Donald brings up the importance of three variables in particular: 70, 90, and 5, which mean:
- Singles 65 and older stand a 70% chance of needing long-term coverage
- Couples 65 and older stand a 90% chance of needing long-term care
- Only 5% of Americans have long-term coverage plans
The Driving Factor for Long-Term Care
Individuals display an adversity to paying for long-term coverage, as they are worried about the chance of paying for it and not needing it or having to leave their homes and live out their lives in a facility. If that’s you, you may consider a hybrid plan. Most hybrids solve the two main deterrents of long-term care insurance by:
- Allowing for in-home care (that’s right, they don’t force you into a facility)
- Return of unused premiums. (i.e. whatever portion you don’t use is returned to your beneficiary)
According to the U.S. Department of Health and Human Services, the average cost for a semi-private room in a nursing home is $6,844 per month, with the average stay being around 2.5 years. As previously listed, 52.3% is the expected percentage of people turning 65 who will have to have a long-term care need during their lives. That is over half the population of individuals turning 65 years of age who will need the assistance offered through long-term care.
The most misleading stat is that 63% of people spend $0 on long-term care. This is because roughly half of Americans have exactly $0 in savings or will have $0 when/if they need long-term care. Those individuals typically find themselves at facilities who accept Medicaid, meaning they are more than likely falling short of the care they need. Here’s the most under reported and most impactful fact of long-term care: the burden is falling on your employees. In total, an estimated $3 trillion in lifetime wages is lost due to unpaid care-giving responsibilities.
How Can Employers Offer Better Long-Term Care Solutions?
It has been said that happy employees are productive employees, and as an employer, you naturally want to increase both the productivity and well-being of employees. Of the many things your employees stress about (home, kids, work, etc.), money is always at the top of the list. In fact, a study investigating employee productivity and well-being found that employees spend 3-4 hours per week, 4-5 times per hour worried about finances. At Saxon, we are happy to help employers implement useful financial tools for their employees to leverage.
For the majority of the working world, healthcare derives from employers, thus, the head of the organization is the one responsible for properly educating employees on their coverage. As the saying goes, “proper planning prevents poor procedure.” With Saxon, employers can schedule a brief, in-house seminar with one of our stellar financial advisors and a long-term care specialist. Through these seminars, clients and employees will discover clear solutions to anything that may still have them on the fence about investing in long-term health. Employees will come to learn the real value in long-term care, such as the reason behind asset location mattering more than asset allocation.
Ready to explore your options and become one of the 0.5% of businesses currently offering long-term care insurance to their employees? If so, don’t hesitate; pick up the phone and call Donald with Saxon Financial today at (513) 609-4404 or toll-free at (800) 847-1733 to discover how you can avoid the single largest threat to your employees’ retirement.
Why Saxon Is the Right Choice for You
At Saxon, we care about you – your family, your company, your finances, and your future. We cultivate our years of practice and experience to deliver exceptional service to you every time. We empower you by placing the tools and knowledge necessary into your hands to deliver remarkable returns on investment. An engagement with Saxon is unique. This is because we have invested in developing a culture where business is personal. Our clients are the central heart of our organization; meaning that without you we have no purpose.
To Saxon, experience matters. We know that outcome is crucial, but to us, it matters how we get there. By taking intentional action in an authentic manner, we are a catalyst for your success that is positively refreshing. We invite you to explore the Saxon way.
Medicare: Why an Advisor Makes All the Difference
Often those approaching Medicare eligibility are overwhelmed by the quantity of information available – and understandably so. As a form of insurance, Medicare is fundamentally different from other group/employer, individual, or family plans in that it is centered around the individual, yet any decisions made could potentially affect family members. In order to understand the costs, benefits, plans, and overall structure of Medicare, professional advice is strongly recommended when weighing options. That’s why, in this installation of CenterStage, Rob Glover, our Senior Solutions Advisor at Saxon, provided the following insightful information. Generally speaking, Medicare plans are explored during a significant lifestyle change. Having an insurance sales agent to facilitate retirement planning can help in adjusting Medicare options.
A Two-Way Relationship
Insurance agents are able to conform Medicare options around desired preferences and requirements. Each beneficiary is unique and therefore deserves a plan that delivers a standard of quality that is suited to varying budgets and ways of life. Agents can act as personal advisors and offer close collaboration when sifting through insurance plans. After becoming aware of defined healthcare coverage needs, Medicare advisors can narrow the search and find a solution that will safeguard both the individual and his or her family from looming financial damages.
It’s best to have a licensed agent with years of experience in Medicare. While textual knowledge is certainly important, learned wisdom is paramount in avoiding pitfalls throughout the process. Agents with real experience in the field are the best guides in navigating the processes, policies, and terminology of Medicare. Also, there are benefits in maintaining a relationship with them, since they are well-versed in the details of plans germane to the area. They are likely more familiar with supplier and provider networks and, using this knowledge, can provide guidance on which Medicare plan to choose.
The beneficiary-advisor relationship doesn’t end after the sale. In fact, they are often an advocate for many years after, offering consultations that address subsequent concerns with coverage. Medicare advisors can help review healthcare needs on a yearly basis to ensure the plan is lining up with changing criteria.
Services Worth Using
Independent advisors can offer many options across a multitude of carriers. Some agents are able to compare dozens of providers by contracting many different insurance companies. This method of contracting also aids in eliminating biases during plan research and comparison. The independent advisor can assist in making an informed decision on a Medicare insurance plan that is in line with the individual needs of the beneficiary. There aren’t any fees associated with merely utilizing an advisor. To elaborate, the rates linked to insurance plans already cover advisors’ commissions and thus render the decision on whether or not to employ one free from frugal urges. Therefore, there’s no reason not to seek the advice of a discerning sales agent to make the enrollment process easier. Licensed sales agents in the Medicare field take part in numerous hours of continued education and training annually. They are knowledgeable to pertinent information that could shape the decision-making process in addition to their understanding of a client’s defined parameters. Nevertheless, beneficiaries can only change insurance once within a year and can wind up “stuck” in a chosen plan unless the said beneficiary is eligible for a Special Enrollment Period. Regardless of position in the retirement process, time becomes increasingly more important. Utilizing an informed advisor will lead to time saved on plan comparison and research as they can help pinpoint a solution that fits the circumstances rather than waste time through trial and error. Licensed advisors are able to grant a one-stop shopping experience. Through innovative technology, they can access any and all relevant information at any time. Some create webinars regarding important issues, answer frequently asked questions, and elicit 24/7 assistance. Within some websites, beneficiaries can enroll in Medicare Advantage plans, request proposals, and research and compare options.
If you would like to learn more, contact Rob Glover at 513.703.7720 or rglover@gosaxon.com.
3 questions advisers should ask about the potential CVS-Aetna deal
In a rapid changing market, stay ahead of the curve by asking these three questions on the potential CVS-Aetna deal to help determine how it will impact the health insurance industry.
The news that CVS has reportedly launched a $66 billion bid to buy Aetna shows that once unimaginable mergers are becoming the norm. But it also raises some important questions for brokers about the future of group benefits, and how to operate in a fast-moving and constantly changing landscape.
Here are three questions to ask when determining how this potential business deal will impact the employer-based health insurance market:
1) Will this move give Aetna a competitive advantage in the group space?
How are other carriers going to feel about having to compete with an insurer that has pharmacy data on the majority of Americans? Anthem may be at the top of the list with worries, as the company just last week announced that it will partner with CVS to launch its own pharmacy benefits manager called IngenioRx.
2) Are healthcare companies too focused on M&A?
A year ago, Aetna was trying to acquire Humana, and Anthem was trying to buy Cigna. Brokers everywhere were concerned about carrier consolidation and what a lack of competition would do to group prices. How have things pivoted to pharmacy so quickly?
The CVS deal may represent gains for both parties. The deal would give Aetna a new avenue for business growth, and CVS would gain some much needed ground against Amazon’s rumored entrance into the drug business.
But what does this emphasis on inorganic, M&A growth say about the healthcare industry? Healthcare consolidation has been a trend for years, but it hasn’t always worked in consumers’ favor, which could leave brokers wary of this deal.
3) Why should employers care?
What impact will this deal have on prescription prices for employers? Prescription drug costs are one of the largest drivers of employer healthcare spend, so the question is critical. Will Aetna and CVS be able to improve efficiencies and lower costs, or monopolize their group markets?
Another point of interest for employers is the possibility of narrowed prescription options. With narrowing provider networks becoming standard, this deal could result in limited consumer options when it comes to prescription drugs.
On the other hand, the deal could spark cost-saving changes in healthcare delivery. It’s not hard to imagine CVS augmenting their MinuteClinic operations with Aetna’s volume.
Employees might find they like having retail access to primary care at a lower price point, with after-hours service, easy-to book appointments, and pharmacy services built right in. This partnership may be the push retail healthcare needs to become a cornerstone of the primary care model.
SOURCE:
Tolbert, B (22 June 2018) "3 questions advisers should ask about the potential CVS-Aetna deal" [Web Blog Post]. Retrieved from https://www.employeebenefitadviser.com/opinion/3-questions-advisers-should-ask-about-the-potential-cvs-aetna-merger
Study: What benefits do employees go for on private exchanges?
Jack Craver gives insight on the best benefits options for private exchanges
A new study offers insight into the types of benefits and benefit designs employees go for when given the choice.
The study, by the Private Exchange Research Council, analyzed hundreds of thousands of benefit purchases made by workers whose employer offers benefits through a private exchange.
The average employer that uses a private exchange offers 14 different benefits and six medical plans, the study found. Employees purchased an average of 4.4 products in 2015, up from 3.6 the previous year.
Older workers are more likely to buy more coverage, with 44 percent of Gen Xers and 42 percent of baby boomers buying more than four products, compared to only 30 percent of millennials.
While employers are increasingly demanding that employees accept high-deductible health plans accompanied by a health savings account, the majority of workers analyzed in the study appear to have traditional health plans, although the percentage with HSAs is rising. Forty-two percent of employees had an HSA in 2015, up from 38 percent in 2013.
Those who opt for high-deductible HSA-qualifying plans tend to be younger and healthier; that’s no surprise. However, the study also found that men and high-paid employees tend to favor such plans more than women and lower-paid employees.
Perhaps surprisingly, the study also found that nontraditional insurance products, such as pet insurance, legal insurance and identity theft insurance, are more likely to be offered by smaller companies.
Private exchanges and the employers that use them describe them as a way to increase employees’ engagement with their benefits. In a health care system that many have argued is overpriced and inefficient because the costs have been hidden behind health plans largely paid by employers, private exchanges are touted as a way to make individuals more sophisticated health care consumers that make conscious decisions about what services they want and need.
Private exchanges got a big boost earlier this year when Starbucks announced that it would be offering its employees an array of health plans to choose through an exchange run by Aon.
In a statement accompanying the study’s release, Christopher Condeluci, one of the principals of Private Exchange Research Council, described the group and its research as addressing a lack of data on the types of benefits that individual consumers favor.
"Knowing what plans people want and how they choose them will go a long way in helping the benefits industry better meet employers' and employees' needs,” he says.
See the original article Here.
Source:
Craver, J. (2016 October 20). Study: what benefits do employees go for on private exchanges? [Web blog post]. Retrieved from address https://www.benefitspro.com/2016/10/20/study-what-benefits-do-employees-go-for-on-private?kw=Study:%20What%20benefits%20do%20employees%20go%20for%20on%20private%20exchanges?&et=editorial&bu=BenefitsPRO&cn=20161024&src=EMC-Email_editorial&pt=Daily
