Raise your hand if you’ve recently had a thoroughly positive conversation about healthcare in America, like one where people were smiling and talking about how great it is. No one mentioned the soaring costs, 3-minute doctor visits, confusing bills, or any other negative experience.
Right, thought so. As an employer, you may be asking yourself what can you do about it besides offer the best healthcare benefits you can.
But the truth is, employers are pivotal players in today’s healthcare system. Nearly two-thirds of all health coverage is employer-provided, which translates into a nearly one trillion dollar annual spend. Your purchasing power has clout.
Here are 4 ways companies like yours can help reshape the health benefits market in the years ahead.
- Pay For Value, Not Volume.
Value-based care is a term used to describe a number of strategies for reducing unnecessary care and encouraging the practice of evidence-based medicine by changing incentives for providers and patients. These include accountable care organizations, patient-centered medical homes and other types of narrow networks.
Studies point to the large degree of waste in the medical system, and as employers look at ways to flatten the medical trend curve, eliminating waste seems a logical place to start. Comparing utilization and claims data from a given market with national averages will reveal issues that can be addressed with value-based care strategies:
- Underuse: Is there too little preventative care, such as cholesterol and cancer screenings?
- Misuse: Are there too many complications following hospital stays, and a high re-admission rate?
- Overuse: Are there high numbers of procedures, such as knee and hip replacements, that may not always be necessary?
Value-based care can and should address these issues, improving the quality of care as it reduces unnecessary cost. But it also has certain entry costs for employers, such as care coordination fees and shared savings bonuses. All major carriers have agreements with value-based care providers, and if you’re self-funded, you’re likely already paying these added costs. To make sure you’re getting the greatest benefit, ask your carrier to be transparent about what you’re paying and what you’re saving.
- Join The Drive To Better Quality.
Quality means providers are delivering the right care at the right time in the right setting, error-free. It seems obvious, but the American healthcare system is still moving toward that goal.
Medical errors seriously injure or kill hundreds of thousands of Americans every year. And analysts estimate 34% of U.S. healthcare spending is wasted on things like inefficiency, unnecessary procedures, and the cost of treating medical injuries that could have been avoided.
How can you help turn this around? Make sure your providers are delivering quality data at least annually. If their numbers don’t thrill you, you can:
- Switch insurance carriers, or tie your contracts to higher-quality outcomes.
- Structure your insurance plans in a way that encourages your employees to seek out the higher-quality providers in your network.
- Personalize the Experience.
New technology is on your side in the challenge to engage employees in caring for their health. Here’s one example. Let’s say you discovered that 30% of your employees are smokers, and of those, most are between 20 and 30. Your smoking cessation program should offer:
- a sleek digital interface
- a buffet of online tools
- high-touch counselors who email and text
- rewards that appeal to Millennials, like gift cards
This kind of thinking can apply to medical providers, gyms, massage therapists—any business that provides healthcare to your employees. Hold your vendors accountable for achieving high patient satisfaction rates. Your employees are their customers.
- Embrace Disruption.
As an employer, you’re in a position to inject change into the healthcare system. Don’t be afraid to do it, even if it creates short-term disruption. Those quality goals you demand could be surprisingly effective, even if it means you switch to new wellness programs, providers—or even insurance companies.
Keep tabs on your vendors to ensure they’re producing outcomes that align with your company’s objectives. Define your expectations, and agree to a cadence for measurement and reporting.
If you have a weight loss program, for example, expect that a certain percentage of your employees will actually drop some body weight. As any physician will tell you, even small changes on the scale can produce major health improvements.
Four Strategies, Multiple Benefits
A healthier workforce means more productivity and better engagement overall. Your company, and your workforce, has everything to gain when you help lead the transformation of the healthcare sector. The bottom line—choose health partners that produce results. The expectation can create the reality.
You’ve been providing health benefits to your retirees for years. You’re glad you can: It rewards loyalty, protects people that you consider to be valued colleagues, and promotes engagement within your business. But as health reform adds to administrative burdens and the need to control cost intensifies, it feels like each day there’s less time to manage the retiree program.
Maybe the question isn’t whether your retiree health benefits are worthwhile...but whether you’re delivering the benefits in the right way. Take a look at your retiree health benefits plan, and ask yourself if it offers:
- A Variety of Plan Options
Whether you’re working with pre-65 retirees, or those who are eligible for Medicare, your benefits solution should be prepared to meet a wide range of needs.
Instead of a group plan solution, your retirees could benefit from access to individual plans with varying deductibles, out-of-pocket limits, coinsurance, and prescription coverage. Your solution can offer short-term medical, dental, and vision plans. Retirement can bring your employees the opportunity to customize a package of benefits to meet their changing needs.
- Dedicated Support for Retirees
Whether you have 200 people transitioning to retirement, or 2,000, the issues are the same:
- Moving to a new health plan can involve substantial paperwork.
- The retirees’ new deductibles, coinsurance, prescription coverage, and other benefits might vary from their old plans.
- Provider networks can change.
- Even once they’re settled into their new plans, retirees’ benefits can change from year-to-year.
The result? Questions, and more questions. This can create a full-time job for your human resources department—requiring time they don’t have.
The bottom line: Your retiree health benefits solution should have the bandwidth to assign each retiree a counselor. That specialist should guide the retiree from his or her point of enrollment through the remainder of their time on the health benefits plan.
This can create a continuity of guidance and an atmosphere of trust...and give your company the space it needs to focus on current employees while still ensuring your retirees are taken care of.
- A Multimedia Change Management & Communications Strategy
Your solution should go even further than dedicated counselors. It should offer:
- Easy-to-understand enrollment materials
- A call center with extended hours
- A website of its own
- Letters, flyers, postcards, and other updates in the mail
- Social media with tips on how to use benefits wisely
No two retirees are alike, so a wide range of channels is critical in keeping them up-to-date on their benefits. Regular outreach and education should be a priority of your benefits provider.
- Seamless, End-to-End Transitioning For You
Transitioning your retiree health benefits solution should be a seamless process. You need an implementation manager who picks up the ball and runs with it.
That means overseeing enrollment, ensuring your retirees are connected to counselors, making sure claims are being processed smoothly, and being available to answer your questions at any time.
The Mark of a Best-in-Class Solution
If offering retiree health benefits has grown too cumbersome, confusing, or time-consuming for your company, consider reaching out to a different provider for some guidance. It might be the best thing you’ve ever done for your retirees, and for you.
Mercer offers a high-touch experience for retirees transitioning to an individual health care plan with Mercer Marketplace 365 Retiree. Visit our web page for more information.
A plethora of Federal, state and local leave laws and regulations has made employer compliance and leave administration increasingly complex. It’s not surprising, then, that improving FML administration is the top priority for employers’ absence and disability programs. Employers are increasingly relying on outside vendors or licensing software to administer and manage these leaves and attempt to keep up with the ever-changing leave landscape. We’re seeing the fastest growth in outsourcing leave administration among small and mid-sized employers.
100 – 999 employees
1,000 – 4,999 employees
5,000 or more employees
*Co-sourcing was included as an option in the 2015 survey and results for both co-sourcing and outsourcing are included in the overall outsourcing figures
An additional benefit of outsourcing often includes a change from FML “tracking” to FML “management” as disability carriers actively apply key policy provisions including eligibility, re-certifications, and clinical intervention. Further, outsourcing FML administration to the STD or LTD carrier or administrator can improve the claimant’s experience with better, more seamless integration.
Employers that co-source may be using a tracking system, with or without a compliance component, or they may have outsourced the administration but are still heavily involved in the day-to-day tactical operations for FML. Most employers that still handle administration in-house have centralized this function; only about one in 10 respondents report that in-house administration is decentralized.
FMLA Administration tactics vary significantly based on employer size. The smallest employers are most likely to use a centralized in-house approach (74% of respondents with 100-999 employees). Among the largest employers, outsourcing is more common as these very large employers not only must deal with more FML absences, but they typically operate in multiple states, making FML compliance, and the associated risk, more complex. Over half of respondents with 10,000 or more employees use specialized absence tracking software to assist with administration.
The growth in outsourcing leave administration for small employers relative to more modest growth among large employers suggests a couple of things. First, it appears that outsourcing among large employers has somewhat stabilized. Those that can outsource have done so. Those who have not may have good reasons to keep leave administration in-house. As for smaller employers, much of the growth has been fueled by growth in the breadth and quality of vendor services as well as more competitive vendor fees.
Survey respondents report that the volume of leave requests is increasing, particularly for intermittent leave, which remains especially difficult to administer and can be disruptive to day-to-day business operations. Given this increase in leave requests, it is not surprising that improving the process for FML administration remains a top priority for the majority of respondents. The largest employers (respondents with 10,000 or more employees) are more likely to struggle with training managers and HR staff (66%) and managing ADAAA accommodations (47%).
Mercer recently published a report on the findings from our most recent Survey on Absence and Disability Management, a survey of over 450 US employers. The complete survey report, which includes data tables with results broken out by employer size, region and industry, is available for purchase here. We also will post survey highlights periodically on select topics here.
Rep. Tom Price (R-GA) was confirmed early Friday morning as Health and Human Services Secretary in a 52-47 vote down party lines. The vote comes at the end of a contentious confirmation process, which raised questions from Democrats about his healthcare stocks, his plans for Medicare, and his opposition to the ACA. President Trump said last month that he would file a plan to repeal and replace the ACA “as soon as the Secretary is approved,” but has more recently indicated that a replacement plan could take until next year. Many are now looking to Tom Price’s confirmation for clues about the new administration’s commitment to an ACA repeal-and-replace timetable. According to this Wall Street Journal article, Price is “expected to follow through on an executive order, issued by Mr. Trump on the first day of his administration, directing federal agencies to pare back regulatory elements of the ACA.” The article also speculates that he could overturn the mandate that health plans include contraceptive coverage at no cost to the patient, “a protection that isn’t explicitly written into the law.” More to come on this – we’ll be watching Price’s first days closely.
Robert Pear and Reed Abelson, The New York Times
- The campaign to repeal the Affordable Care Act has stalled as Republicans struggle to come up with a replacement and a key senator, Lamar Alexander (R-TN), has declared that the effort is more a repair job than a demolition. *A must read*
Sarah Kliff, Vox
- This article shines a light on the disconnect between Republican statements criticizing high deductibles and cost sharing and their support for policies that promote high-deductible health plans paired with health savings accounts. Sarah Kliff argues that until Republican rhetoric and policy positions align, it will be hard for the party to coalesce on a plan. *Interesting perspective*
Allison Bell, LifeHealthPro
- Here’s what the actuaries have to say about some popular health law proposals. *Worth the time*
J.B. Silvers, The New York Times
- This op-ed by a former health insurance executive covers the ramifications of “repeal and delay” for the individual insurance market. He agrees that the ACA has its flaws, but repealing it without a viable replacement is not an option if the replacers really want to use private insurers to meet society’s goals of access, affordability and quality in healthcare. *Interesting perspective*
Julia Belluz and Sarah Frostenson, Vox
- Our interest in this article is the reminder that broader immigration reform efforts could impact provider access. It’s certainly a topic to watch since provider shortages present challenges for health plan sponsors. *Skim this one*
The path Congress will take to repeal and replace the ACA has been anything but clear. Since the election, many approaches have been discussed, some that could take up to two years to implement. Trump is asking Congress to move more quickly. Last week, a committee of House Republicans released four bills that suggest a new direction. In an article in Health Affairs, author Timothy Jost says “…they are not aimed at destroying the ACA, but rather at trying to calm insurers and a nervous public. Some may even pass on a bipartisan basis. This is a very interesting development.”
Each bill is focused on a different piece of a replace strategy, addressing areas that seem to be creating the highest levels of angst. The first three are aimed at insurance company concerns in hopes of stabilizing the individual insurance market:
verification of eligibility to enroll and receive a government subsidy
expand the age category ratios for insurance company pricing
tighten the grace period for non-payment of insurance premiums
The fourth bill affirms a commitment to continuing to ban pre-existing condition limits, an issue that has captured the attention of members of both individual and group health plans.
These bills are to be the topic of a House Energy and Commerce hearing on Feb 2, which is a first step in the vetting process. While these bills do not directly address employer concerns, movement to stabilize the individual market sooner rather than later is a welcome response that will benefit individual and group health plans alike.
President Trump and congressional Republicans left last week’s planning meeting in Philadelphia still divided over the timing and substance of how to repeal and replace the Affordable Care Act. The effort continues this week in Washington as congressional committees hold a spate of hearings and work on writing legislation.
House panels will examine problems within the Medicaid program, replacement options that focus on patient-centered solutions, and proposals to shore up the individual market. A Senate committee will also seek options for stabilizing the individual market and look at ways to allow states to pursue their own health care reforms.
Despite President Trump’s recent orders to ease ACA compliance burdens and freeze regulatory activity, the administration’s ability to implement policy and advise Congress is currently hobbled by the wait for Senate confirmation of leadership posts at the Department of Health and Human Services. The Senate Finance Committee is set to vote this week, however, on the nomination of Rep. Tom Price (R-GA) as HHS secretary. The panel has yet to schedule a hearing on the selection of Seema Verma as administrator of the Centers for Medicare and Medicaid Services.
You’ve heard it before: It takes great health benefits to attract a great pool of talent. But as an SMB (Small or Midsize Business), you’re scratching your head over how to offer the buffet of options new employees expect.
You might think you’re stuck with a skimpy benefits offering, but that’s not necessarily true. Here are three myths SMBs often believe about their health benefit options -- and what the facts really are.
Myth #1: I Can’t Give My Employees a Wide Choice of Plans.
Negative. Actually, you can. Private exchanges help SMBs offer employees a wide range of plans. How? The best exchanges have relationships with a broad set of carriers and use a technology platform to offer many different predefined plans. That spares you the thankless task of trying to find one plan that meets the needs of all your employees.
Beyond a palette of plans, your employees can also get easy-to-use online tools, access to a knowledgeable benefits advisor, and more. Don’t expect less just because you’re an SMB. Your employees should have the same enrollment perks large companies have.
Myth #2: My Small Business Can’t Leverage Vendors.
Actually, you have more purchasing power than you might think. Private exchanges combine the purchasing power of multiple SMBs to leverage competitive pricing from vendors. The result? Lower administration fees and more services like personalized call center support and insightful decision support tools.
With private exchanges, SMBs are able to give their employees greater access to services and solutions that they wouldn’t be able to otherwise. And here’s a benefit for your organization: With a private exchange, your company can put a fixed amount toward each employee's health premium, no matter which plan they select, allowing for more predictable budgeting.
Myth #3: My Employees Won’t Consider High-Deductible Health Plans.
At first glance, a high-deductible health plan (HDHP) might sound like a hard sell. Your employees must pay for most health services out of pocket until they meet their deductible, which could be a few thousand dollars.
But here’s what makes employees take another look: Lower monthly premiums. That’s especially attractive to millennials.
For example, a healthy, 28-year-old employee who sees her doctor only for an annual check-up can save hundreds of dollars a year with a high deductible plan. And she’s not the only one: HDHPs also cut costs for your company, since you pay less for your portion of the plan cost.
Enrollment in HDHPs is on the rise. In 2016, 29% of covered employees enrolled in a high-deductible health plan, compared to 25% in 2015. Employees have shown more interest in these plans than many employers anticipated.
With all of these health benefits plan on the table you can pinpoint the best option for your business -- and that same old tired plan is not one of them. Talk to a benefits advisor about evaluating the options that are right for your company.
Almost immediately following the swearing in, President Trump signed his first executive order directing HHS, DOL, Treasury and other agencies within the government to waive, defer, grant exemptions from or delay provisions of the ACA that impose financial or regulatory burdens, to the extent allowed under the law. So what exactly is allowed? Here are the three main ways the administrative branch can exert influence over the ACA:
- Agencies can modify or revoke final rules through rulemaking process
- Agencies can decline to enforce (though not permanently ignore) statutes or final rules
- Proposed regulations can be ignored or revoked
Much has been written speculating about actions that will be taken under the executive order. The agencies could start to influence the individual mandate (by not enforcing penalties), subsidies (by seeking approval for temporary spending authority to reimburse insurance companies for plan design credits already paid), birth control coverage (making exemptions for religious non-profits) and Medicaid (allowing states more flexibility). However, the executive order should not affect the coverage of those currently enrolled in public exchange plans, since those plans are locked in for this year.
From an employer perspective, perhaps the biggest concern is the long term health and viability of the individual market. The ACA was designed to strike a delicate balance between requiring coverage to support a risk pool and insurance requirements to issue coverage, although that alignment has not been satisfactorily achieved thus far. Subsidies for health plans and the individual mandate are both “balancers” that were baked into the ACA, and removing or undermining them while the rest of the law remains in effect could have a negative impact on market stability. Market instability is bad for everyone, not just the individual market and those who rely on it.
With President Trump promising an ACA replacement bill of his own “very soon” and congressional Republicans struggling to reach agreement, two GOP senators – Bill Cassidy of Louisiana and Susan Collins of Maine – are proposing to let states choose their own path. Under the newly-proposed “Patient Freedom Act,” states would have three choices: To continue to operate under the ACA, to implement their own reforms with some federal funding and strings attached, or to design their own reforms without federal help.
The “strings” tied to the federal funding option have elements in common with other GOP proposals. Federal money that otherwise would have been used for subsidies and Medicaid expansion under the ACA would fund a tax credit to help people who buy their own insurance. The amount of the credit would not vary based on income. States could create a high-deductible catastrophic plan into which the uninsured would be automatically enrolled. The tax credit would cover the premium with enough left over to pre-fund a health savings account to help with expenses before the deductible kicked in. Although they would be automatically enrolled, people could opt out of this plan – in other words, there would be no individual mandate. (BTW, the employer mandate would go away under this option as well.)
This proposal was meant to appeal to both ACA fans and foes. “At some point in this process, we will need a bill that can get to 60 votes,” Senator Cassidy said at a press conference. “Now you can say to a blue-state senator who is invested in supporting Obamacare, ‘You can keep it, but why force it on us?’”
But with neither Republicans nor Democrats in the mood to compromise on this highly politicized issue, the proposal has not been met with enthusiasm on either side. Still, given the state of American politics today, a “red state, blue state” solution bears watching among the many proposals vying for our attention. The actual Patient Freedom Act bill was introduced Wednesday – the same day that Senator Rand Paul introduced a bill of his own (more on that later, after we’ve read it).
Meanwhile, during his confirmation hearing on Tuesday, HHS nominee Tom Price would not directly answer questions about whether he is working with President Trump on an ACA replacement plan to be revealed shortly, as the President has stated – the plan that will provide “insurance for everybody” and be “much less expensive and much better.” All Price would commit to is that he has had conversations with the President about healthcare.
A founding member of the House Freedom Caucus, Rep. Mick Mulvaney (R-SC) is known as a budget hawk -- a deficit hardliner and one of the key Republicans who led the charge to oust former Speaker of the House John Boehner in 2015. As President Trump’s pick to lead the Office of Management and Budget, Mulvaney will be tasked with keeping tabs on government revenue and spending and overseeing the Trump administration’s regulatory actions, which also means he’ll play a central role in health care and entitlement policy.
Mulvaney was one of the leaders of the effort to defund or delay the ACA that resulted in a 16-day government shutdown in 2013. He also pushed to shut down the government in 2015 instead of continuing to fund Planned Parenthood. As OMB director, he’ll be head of the office responsible for implementing any future shutdowns. Democrats have criticized this willingness to shut down the government and default on the national debt.
Some are predicting that Mulvaney may soon find himself at odds with the Trump administration’s mixed signals on fiscal discipline -- specifically, Trump’s promise of large tax cuts coupled with big spending on infrastructure and assurances that he won’t touch Medicare or Social Security. Not only will Mulvaney be responsible for pointing out when the budget doesn’t add up, he’s also been a leading advocate for Medicare reform, commenting in 2011 that we “have to end Medicare as we know it.” He’s actively supported proposals to privatize Medicare or impose other major changes to the program, and he’s argued that cutting programs like Medicare was the only way to “balance the budget.”
Mulvaney’s will be an important voice in a powerful agency that must approve any new major federal regulations. Trump has already issued a moratorium on new federal regulations and wants his cabinet to look for "job-killing" rules that should be repealed. If Mulvaney doesn’t quite get to make the rules, he will certainly have a lot of influence in whether they live or die.
The Trump administration has tapped Andrew Puzder, chief executive of CKE Restaurants (parent company of fast-food chains Carl’s Jr. and Hardee's) for the next head of the Department of Labor (DOL). While many see Puzder’s years spent in the restaurant industry as an asset, critics complain about his tendency to oppose regulations that would increase workers’ pay and benefits.
Puzder claims increased costs from the Affordable Care Act, for example, have hurt his and other restaurant chains’ ability to hire more employees. On the minimum wage, he opposes a $15 federal minimum wage and has proposed raising the federal standard to around $9 per hour, with a lower minimum-wage tiered system for entry-level workers. He also opposes the now-delayed overtime regulation that would have made more Americans eligible for overtime pay by requiring employers to pay overtime to all employees earning less than $913 per week.
It’s not clear, however, how Puzder would handle the so-called “fiduciary rule” from DOL that expands the definition of "investment advice fiduciary" to cover a wide range of interactions that service providers have with ERISA benefit plans and certain individual account owners. Although investment advice affecting retirement assets is the primary target, the rule also covers ERISA health and welfare plans that have an investment component, as well as HSAs. Many expect the Trump administration to delay implementation of the rule.
In addition to the Employee Benefits Security Administration and the Wage and Hour Division, the Occupational Safety and Health Administration (OSHA) also falls within the jurisdiction of the DOL. OSHA implemented several new regulations just within the past year. Based on Puzder’s opposition to many of the previous administration’s stances as they relate to labor, and as described in on op-ed he penned for Forbes, recent requirements for reasonable reporting for employees to report injuries and illnesses and an increase in OSHA penalties employers may be subject to for violations may be rolled back or modified.
He has also expressed frustration with the federal regulatory requirements and permits required to open new restaurant locations, saying he “can open a restaurant faster in Siberia than [he] can in California,” so changes or easing of such regulations may be afoot.
As of this writing, Senate confirmation hearings for Puzder have been pushed to February and he has reportedly expressed some hesitation on going forward with the new role. In addition, his required ethics and financial paperwork also has not yet been posted by the Office of Government Ethics -- historically, this has been completed before moving ahead with confirmation hearings for cabinet members, but this administration has not adhered to this precedent for all proposed appointees. If his confirmation process moves forward, we will continue to identify any potential workplace and benefits policy changes signaled by Puzder and the Trump administration.