Mercer’s Washington Resource Group recently released our top 10 compliance priorities for 2017 health benefit planning. There aren’t any surprises on this list. In fact, we’ve recently blogged about many of them. Employee Benefit News created a slide show on our Top 10 and here is a list of related posts and podcasts if you want to take a deeper dive into a topic.
- Wellness Plans (podcast): More innovative designs make it critical to know the new rules that begin on January 1, 2017.
- Essential Health Benefits (podcast): Check those dollar limits and maximum out-of-pocket maximums against updated benchmark plans for 2017.
- Mental Health Parity (podcast): Make sure your benefits are aligned with current law and best practices.
- Employer Shared Responsibility: Affordability (podcast): Know the impact of opt-out cash and flex credits; 30-hour (podcast): Understand what payments must be converted to hours of service; ACA Reporting (podcast): Make sure it’s right – no more good faith standard and the old deadlines return for the 2016 reporting year.
- Preventive care: Modify benefit terms to reflect latest recommendations and guidance on preventive care.
- Summary of Benefits and Coverage (podcast): New model SBC must be used for open enrollments on and after April 1, 2017.
- FLSA overtime rules: It’s not just a compensation issue – don’t forget to consider the benefits implications.
- Expatriate group health plans: Position group health plans covering globally mobile employees to take advantage of ACA relief.
- HIPAA privacy, security, and electronic transactions: Revisit health plans’ privacy and security obligations.
- DOL fiduciary rule: Assess the impact on welfare plans with an investment component.
The thinking on financial wellness has evolved a lot in the last few years. It’s no longer just about planning for retirement—it’s about how to make progress towards goals and reach financial independence. In a diverse employee population, people are in different life stages and have different mindsets, which affect their financial concerns. Here are five tangible ideas to start a conversation about financial health in your workplace to bring about positive change.
1. Understand the strategic benefits
Financial stress can lead to absenteeism, presenteeism and low productivity among employees, but financial wellness programs can tackle these problems and complement talent acquisition, retention and other people-related issues that determine an organization’s future success.
High-performing programs have a clear tie to business results. Improving your workers’ financial wellness has an effect on how patient, productive and engaged they are on the job – and ultimately on revenue and profits.
2. Provide individualized content
An effective financial wellness program resonates with each and every individual. Say “401(k)” to the 23-year-olds just out of college and they might just tune out. However, they may be more likely to listen if the conversation is about saving to move out of their parents’ house or paying off their student loans. Gathering quality data about your own employees lets you know what vendors and resources to invest in. Don’t make assumptions about your people – ask them what is top of mind. Of course, there are some issues with self-reporting – some might be overly optimistic about the true state of their financial affairs and others might not know – but this is a good place to start.
3. Focus on real action
A lot of Americans aren’t financially savvy, which has real consequences on their finances. Even when financial education programs are offered for employees, it is difficult to get them to make the connection between learning and acting on what they have learned. Employees should be given the proper tools to be guided on an action-oriented path for their individual circumstances in order to make significant strides towards financial wellness.
4. Rely on thoroughly vetted, integrated and monitored vendors
Every day, there seems to be a new services provider offering ways to improve your employees’ financial health. It’s a jungle out there – and picking the wrong vine to swing from could land your employees in an alligator-infested pond! Every vendor chosen for employees should be highly regarded in their area of expertise and then monitored to confirm that they maintain this standing, uphold the promised level of service, and minimize ongoing reputational and operational risk.
5. Employ insightful metrics
As you start to understand statistically significant segments of your population, you can then think of targeted strategies for each group, rather than speaking to your employees as a homogenous whole. For example, cluster analysis is a statistical method of grouping people based on important shared characteristics: gender, ethnicity, age, location. While there will always be exceptions, this “profiling” does generally provide a relatively accurate picture of the needs of different employee groups because it’s based on actual data.
As a new field, financial wellness is not yet well-established and is evolving rapidly. As we learn what works and what doesn’t work, we need solutions and products that can adapt and respond rapidly. A key buzzword in this area is “iteration,” where we see what is working or not and adapt the solution in response to that feedback. In the case of digital solutions, this can lead to weekly or monthly releases of enhanced solutions.
If you’re thinking of introducing a financial wellness program in your organization, find out what’s keeping them your workers from meeting their various financial goals, instead of just making assumptions. Then you’ll be better equipped to find the solutions that will fit for the needs you discover.
This post is part of our 2017 Planning Checklist series.
In an unprecedented move, JAMA published President Obama’s status report on the ACA. In it, the President details the impact of the ACA using charts and data from various sources and offers up some suggestions for what should happen next.
The law was passed with three goals – to provide health insurance to those without it, to bring down the cost of care, and to improve healthcare quality. Progress toward the first goal is well documented: nearly 17 million more people have coverage today as a result of the ACA. That is a clear victory. Less clear, however, is the ACA’s impact on cost, at least in employer-sponsored health plans – which still cover more than half of all Americans with insurance. The report asserts that the ACA has slowed cost growth in in private insurance, but hasn’t resulted in a higher out-of-pocket cost share for those enrolled in employer plans.
That improbable combination raised some eyebrows here at Mercer. The report mentions a few of the more popular ACA mandates – preventive care at no charge, eliminating life-time maximum benefits, and expanding dependent eligibility. Those provisions could only increase cost, while at the same time another ACA provision, the excise tax, was established to penalize health plans that cost too much! The President defended the excise tax in his article, but fact is that it has led employers to shift cost to employees, chiefly with high-deductible health plans. Our data shows that fully one-fourth of all covered employees are now in high-deductible consumer-directed health plans, and even deductibles in traditional PPOs have risen at a faster pace than healthcare cost increases. That’s not surprising, given that three years ago, nearly half of employers were on track to hit the excise track threshold in 2018, the year it was first supposed to go into effect. That number has dropped each year as employers have taken steps (often unwanted, as our recent survey found) to shift cost to employees to lower cost. We’ve maintained from the beginning that the “Cadillac tax” was going to unfairly hit plans that had high cost for reasons other than rich plan design, and were pleased to learn yesterday that more than 300 members of the House of Representatives – nearly 70% – have signed onto legislation to repeal the tax.
I will say that I wished President Obama could have given employers a little more credit! Compliance with the ACA has been a huge effort and expense to employers – new fees, communications requirements, reporting requirements and compliance costs – and in the end, they continue to cover all the same people they have always covered. That’s more than half of all Americans with health insurance.
As for the future of the ACA, so much will be determined by what happens in elections and how lawmakers can work together. Will there be a public option? Will Americans age 50+ be able to buy into Medicare? Will employees be taxed on their employer-sponsored health insurance? Time will tell. In the meantime, employers remain committed to providing healthcare benefits to their employees.
There’s a lot of buzz about the health care cost report from the Obama administration just published in Health Affairs. Robert Pear in The New York Times provides a balanced take, but the news is being spun in many different directions. The report estimates that national health spending increased 5.5 percent in 2015, to a total of $3.2 trillion, and will easily surpass $10,000 per person this year. That’s faster than the historically low increases we’ve seen in the recession and years of slow recovery (bad), but still slower than during the two decades prior to the recession (good). One reason for the faster growth is a stronger economy, allowing more people to afford the care they need (good); another is soaring prescription drug costs (bad). The report predicts that health spending will grow an average of 5.7 percent a year from 2017 to 2019 and then 6 percent a year from 2020 to 2025. Our National Survey of Employer-Sponsored Health Plans finds that employers, with a lot of hard work, have been holding average annual increases in health benefit cost per employee to about 4% and expect to do so this year as well. That’s also both good and bad – it’s slower than national spending growth overall, but still faster than inflation and in the long run unsustainable. The most sobering number in the government report? The prediction that by 2025 health care spending will account for 20% of the GDP, a far higher percentage than any other developed country in the world (ugly). Of course, back in 1993, it was predicted we would hit that milestone in 2003 and we didn’t – that’s the good news, if you want to call it that.
The move from fee for service to payment for value is real. This blog post on the Health Affairs site provides a glimpse into the progress being made with this new approach to contracting with providers. I was struck by one sentence in particular – Patients are the most underutilized resource to help reach positive medical outcomes. Since 155 million Americans are covered by employer-sponsored health plans, employers are in a unique position to be able to influence patient behavior. With the advent of consumer-directed health plans, health advocacy and other well-being programs, we have made strides in promoting consumerism and empowering patients. While we have a long way to go to get plan members more comfortable and confident in this role, there’s a big potential upside.
We got a question in response to our post Checklist: Want to Increase Your CDHP Enrollment? Try This.
Q: How? If my execs are enamored with PPO.
A: One of the key tenets we pursue in helping clients develop a CDHP strategy is to focus stakeholder attention on what would change, and what would not. In the case of moving from a traditional PPO to a CDHP, the change could be focused entirely on just a couple elements. For example, there’s no requirement for a change in:
- Plan actuarial value
- Covered expenses, or
- Out-of-pocket maximums.
In fact, one preferred approach is to install CDHPs that are approximately equal in actuarial value (AV) to a competing traditional plan, but which offers employees lower premium contributions (because their utilization will generally subside in a CDHP vs. a PPO) and, in the case of an HSA-compatible plan, the opportunity to contribute to and accumulate a portable, tax-protected account that’s generally superior even to their 401(k).
While many employers hesitate to pursue a CDHP strategy because account-based plans can appear to simply be (or, if poorly-designed, can actually be) a means of cost shifting to members, they don’t have to be so, at all. In fact, we generally try to avoid use of CDHPs as “low value” plans, but rather encourage clients to position their CDHP offering(s) to compete with more traditional plan options on AV as well as premium contribution. Further, we see and help many employers move to strategies that reward positive health behaviors through HRA/HSA funding by the employer. These strategies provide first-dollar HRA/HSA funding to offset higher deductibles for those exhibiting healthy behaviors.
Finally, with the rapid expansion of CDHP offerings we’re seeing among employers, it’s likely your company will begin competing for candidates who’ve been enrolled in a CDHP and may even have an HSA balance they’d like to port with them to your company, and in which they’d like to continue contributing. By not offering them the opportunity to enroll in a CDHP – particularly an HSA-compatible version – you may inadvertently be inhibiting your ability to attract quality candidates whom you’d like to hire.
DOL overtime rules are not just a compensation issue. Check out this slide show with advice on how to approach compliance with the new rules, compliments of Employee Benefit News and our Mercer colleagues. But when evaluating changes in your compensation strategy, don’t forget to consider the benefits implications as well. Be sure to quantify the impact of the new salary threshold ($47,476/year) on benefit costs – for defined benefit plans, 401k match, life insurance, LTD, etc. Compliance with these new DOL rules could be an opportunity to reconsider affordable contributions under the ACA, since increases to salary base may allow for higher employee contributions for employers using rate-of-pay or W-2 safe harbors. Separately, evaluate whether reclassified employees will be subject to a different tracking method under the ACA 30-hour rule – it can get complicated! From a documentation perspective, check eligibility definitions for benefits to be sure they are consistent across plans and align with your compensation strategy.
Key provisions of IRS proposed rules released last week cover many issues related to ACA premium tax credits including the affordability impact of opt-out payments to employees who decline employer coverage. The affordability of employer-provided coverage affects whether employees and their family members can receive premium tax credits or cost-sharing subsidies from public exchanges, which in turn can trigger employer shared-responsibility assessments. The proposed rules on opt-out arrangements would, if finalized, apply to plan years beginning on or after Jan. 1, 2017.
Congress enters its final week before recessing for the summer with further action on health care legislation – including a House-passed mental health parity bill – likely to slip to September. The mental health bill directs regulators to come up with an "action plan" for coordinating enforcement and to issue more guidance on parity topics for employers and issuers, such as nonquantitative treatment limits that satisfy Mental Health Parity and Addiction Equity Act regulations. Other provisions would clarify that parity standards apply to any eating disorder benefits, including residential treatment, covered by a plan. Despite overwhelming House approval, similar legislation remains ensnared in the gun control issue in the Senate, but the measure could break free and become law this year.
Hillary Clinton is pledging to follow through on progressive health care policies in a new campaign document as Democratic delegates meet on the party's platform and she woos Bernie Sanders' supporters. The Clinton proposal affirms positions she has taken during the primaries, including extending Medicare as an option to Americans 55 years and older and taking steps to lower out-of-pocket costs.
The latest and top iPhone App – Pokémon Go – has some unexpected health benefits. The new app from Nintendo (that’s right, the makers of Wii and Wii Fit) requires users to walk around outside and capture the Pokémon around them. The app has users walking, running, and jumping through their neighborhoods to capture the Pokémon. Check out the description in this Mobi Health News article. Perhaps this app will inspire your next workplace wellness challenge.
I was interested to read about a Harris poll on millennials’ savings priorities. The good news is that they are saving – in fact, they are saving more than their Gen X counterparts. The not-so-good news is that they have a lot of priorities that come before saving for retirement – and they’re hoping to retire, on average, at a youthful age 62! Just another nudge for employers to step up communications encouraging optimal use of all the employer-sponsored benefits and provide tools to support effective financial planning. We’re not talking about adding new benefits – just better packaging and communications for higher employee engagement and appreciation.
I don’t know about you, but I was having a hard time understanding the merits of selling insurance across state lines. My main questions were, how does it work, who benefits, and what the impact would be on employers. I found my answers in the new video series, “Sounds Like a Good Idea,” created by Kaiser Health News to debunk concepts being discussed by the presidential candidates. (Not that we really needed to be told to watch out for campaign promises!) The video on selling insurance across state lines explains the origin of the idea, which, interestingly, goes back more than ten years. While states can do this now under the ACA, only three are actually doing it. The biggest complicating factors are network access in the affiliated state and lack of oversight (and recourse) in the affiliated state if there are problems. Unfortunately, things that sound too good to be true, often are.
Last week, an employer I was speaking with on my favorite subject, value-based care, made the comment, “None of my carriers are charging me any ACO fees.” I didn’t want to be a wet blanket, but I had to point out that unfortunately this was most likely not the case. So how does it happen that an employer might not know about fees for value-based care? And what should they do about it?
The national carriers all have Accountable Care Organization (ACO) or Patient Center Medical Home (PCMH) contracts with physician or provider groups embedded within their broad PPO networks. Members who frequently utilize physicians from these groups are deemed “attributed” to the group, and their plan sponsor is assessed a care-coordination fee and/or shared-savings payments. In some cases these charges appear on an invoice, but in other cases they are deducted directly from the employer’s ASO bank account. Many employers are not even aware that this is happening.
So what should you do? The answer is simple – ask!
- Request a summary report listing the number of attributed members and value-based care charges paid (typically care coordination fees and shared savings bonuses)
- Request reporting on the cost and quality outcomes for members who are attributed to an ACO or PCMH
- Obtain carrier agreement to provide this reporting on a routine basis, for example, as part of quarterly dashboards or annual plan reviews
- Ask what guarantees are available regarding performance of these provider groups; some carriers will refund care coordination fees
The first step is asking the right questions. Don’t give up if you have trouble deciphering the responses. You have the right to know what you are being charged and if you are getting value for the money.
This post is part of our 2017 Planning Checklist series.