When employers are asked how they plan to control health benefit cost over the long term, they talk about improving employee health. This focus on employee health is one factor fueling growth in worksite clinics. Last year, Mercer’s National Survey of Employer-Sponsored Health Plans found that 29% of employers with 5,000 or more employees provided an onsite or near-site clinic offering primary care services, up from 24% in the prior year. Mercer followed up with these employers in a new, targeted survey on worksite clinics. Of the 134 respondents, 72% of those whose clinics provide general medical services said that managing employee health risk and chronic conditions is an important objective for the clinic.
Worksite clinics are a convenient way for employees to undergo biometric screenings (offered at 77% of clinics), participate in face-to-face chronic condition coaching (60%), and take part in lifestyle management programs such as smoking cessation (59%) or weight management (56%). Pharmacy services are offered at 38% of clinics, and just over a fourth (26%) provide mental health or employee assistance program (EAP) counseling in their clinics.
For more than two-thirds of survey respondents (68%), improving access to care was also an important objective. As the Affordable Care Act (ACA) expands health coverage to more Americans, primary care shortages in some parts of the US could be exacerbated. Establishing a new clinic, or expanding an existing occupational health clinic to provide general medical services, is one way employers can ensure that their employees — and in some cases employees’ dependents — will have access to quality care.
While the ACA may have spurred employer interest in worksite clinics, an IRS notice released this February has clouded the picture by suggesting that the cost of care received through the clinic must be counted in the ACA’s excise tax calculation. Some respondents (15%) believe their general medical clinic will hurt them in terms of the excise tax calculation by pushing them over the threshold for the excise tax, and some (11%) believe it will help, presumably by holding down the cost of the company’s health plan. Another 28% believe it won’t have an impact either way, and 46% simply don’t know how the clinic will affect the calculation. Typically, the cost of the clinic accounts for 10% or less of an employer’s total health care spend and for about half of the respondents, it accounts for 5% or less.
Measuring clinic success
The great majority of respondents — 85% — say that their organization generally perceives the clinic as a success. Specifically, 63% say it has successfully reduced lost work days, and 58% say it has been successful in helping members control chronic conditions.
Measuring return on investment (ROI) remains a challenge for employers, and only 41% of respondents were able to provide ROI data. An ROI of 1.00 to 1.99 was most common (23% of respondents reported ROI in this range), and 13% percent reported an ROI of 2.00 or higher. Only 5% have an ROI of less than 1.00.
The best measure of employee satisfaction may be utilization. Respondents report that 45% of employees, on average, used the clinic in 2014. Nearly half of respondents (48%) with a general medical clinic don’t require any copayment for clinic services, and 25% require a lower copayment than the employee would pay for comparable services under the company health plan. The majority of respondents with hourly employees (61%) do not require them to clock out of work for visits to the clinic.
For many employers, employee satisfaction is a more important measure of success than ROI. If employees are using the clinic, it means they haven’t been taking time off work to visit a doctor, and that they’re getting the medical care they need to stay healthy and productive.
Like most of my clients, you're probably immersed in health planning activities for 2017. I recently took stock of some of the interesting topics that I have been discussing during planning conversations with clients. I asked my colleagues to weigh in with their thoughts on things to consider now for 2017, or for the years ahead. Some of our best minds contributed posts in their areas of expertise that will help you evaluate initiatives around CDHP enrollment, behavioral health, value-based care, financial wellness, and more. Appropriately, we kicked off the series with a discussion of how to cope with – and maybe even enjoy – the challenges of innovation.
I hope you find the posts in our 2017 Planning Checklist series both informative and helpful as you finalize your plans. We've already published three of the posts at the links listed below and we’ll continue to update this page as new posts become available.
- How to Avoid the Innovation Summertime Blues
- A Fresh Look at Behavioral Health Benefits
- Want to Increase Your CDHP Enrollment? Try This
Employee well-being programs have become a mainstay in employers’ overall benefit offerings. Most large employers offer programs designed to support health and well-being, and each year our National Survey of Employer-Sponsored Health Plans finds that more are contracting optional and niche services from health plans or specialty vendors, as opposed to offering just their plan’s standard services or in-house initiatives (48% did so in 2015, up from 30% in 2012). That’s why we were surprised to see a recent Wall Street Journal article suggesting that employers may be taking a step back from wellness programs. The article pointed to SHRM’s 2016 Employee Benefits Survey, which found that certain wellness program elements have decreased in prevalence, notably onsite seasonal flu vaccinations and 24-hour nurse lines. But although certain services are being offered less, the study reports that more employers are increasing wellness offerings (45%) than decreasing them (19%). It also highlights that employers are becoming more strategic in their program offerings; if employers are taking a ‘step back’, they’re doing so to take stock of their current offerings and evaluate what works best for their workforce.
Other developments in the health care ecosystem may account for changes in wellness program offerings. As access to retail health clinics continues to expand, making flu shots easier and cheaper to obtain than with a primary care physician, some employers may pull back on this offering and dedicate those budget dollars to other well-being resources. And our survey found sharp growth in offerings of telemedicine in 2015 (from 18% to 30% of large employers) and advocacy services (from 52% to 56%), both of which may be taking the place of some previously offered 24-hour nurse lines.
Employee well-being programs will continue to evolve as employers assess their offerings, whether based on participation levels, employee surveys or ROI analysis. Health care market developments and innovations that arise will also impact well-being offerings, but it’s clear that these programs have become an essential part of the American workplace and are here to stay. There was lot of buzz earlier this year over a study published in JOEM (which we’ve written about here) linking robust health and well-being programs with better stock performance – perhaps because the findings resonated with many sponsors of high-performing programs who have been hoping for a better way to measure the value of their investments in employee health.
According to a new Gallup survey, 15.5 percent of adults say the cost of health care is not affordable. That’s the lowest number since Gallup began tracking this in 2008, which is the good news. But we think there’s reason to be concerned about affordability in the future.
Mercer’s annual survey Inside Employees Minds includes questions on the affordability of health care. The latest survey found that only 9% of employees say health care is not affordable –- but that 30% say it is not easily affordable. And when we ask about the cost of health care in five years, 23% worry it will not be affordable, with an additional 36% concerned it will not be easily affordable. It is safe to say that higher deductibles and higher prescription drug costs are fueling this concern.
We all know stress and financial concerns impact employee health and job performance. There are many things employers can do to help –
Provide tips on how to “shop” for health care using cost transparency tools
Arm employees with questions to ask when making an appointment or at the doctor’s office
Raise awareness of lowest-cost options for accessing care (like telemedicine)
Promote use of health savings accounts for current expenses and also for retiree medical costs
Remind employees about services available through the EAP and other programs that can help them with household budgeting and financial planning to make the best use of their money
Employees have access to so many tools and resources that it is hard to keep track of them all and know when to use them. Once again, communications is the key.
The e-file deadline for ACA reporting (Form 1094-C) is just days away. But before we take a collective sigh of relief, I would be remiss not to talk about corrections. After all, how often do you submit an electronic file to a third-party with zero errors? For 2015 reporting, the IRS will not penalize you for making a “good faith” effort to comply with the reporting requirements and error correction is part of that good faith effort.
If you haven’t seen it yet, you might check out this helpful video from the IRS on ACA information returns corrections. It covers:
- information reporting requirements
- what the IRS means by a corrected return
- how errors are identified; what errors require filing a correction and examples of corrected errors
- the timing for making corrections
- the electronic correction process
- penalties for ACA Information Returns
Consumer-directed health plans (CDHPs) have become a mainstream benefit offering. Spurred on by the need to avoid the excise tax, employers have added these low-cost plans at a fast clip over the past few years. In 2015, 29% of all employers – but 59% of those with 500 or more employees – offered an account-based CDHP, and a total of 25% of all covered employees were enrolled in one, according to Mercer’s National Survey of Employer-Sponsored Health Plans. Now more than a decade old, CDHPs were designed with the goal of holding down cost by encouraging cost-consciousness among consumers. The best CDHPs promote personal responsibility for maintaining or improving health and for choosing cost-effective, quality health care providers.
Most employers still offer a CDHP as an option alongside a traditional PPO or HMO plan. If you’re looking to increase your CDHP enrollment this year, we have a few tips to get your numbers up – whether you have a new or existing plan:
- Sweeten the deal. Offer some great features that you can advertise to your employees in your benefit communications. For instance, seed the HSA and provide funds in January to give employees a start. Our survey shows that in 2015, 37% of eligible employees enrolled in HSA-eligible CDHPs (if offered as a choice) when their employers contributed $800 or more to their HSAs, compared to just 22% when their employers didn’t contribute at all. Another idea is to pay for supplemental health policies, such as critical illness and accident coverage, to help fill gaps for employees.
- “Upset the apple cart” and disrupt current plan offerings and/or employee contributions by plan. The most effective way to get employees to migrate to HSA-eligible plans is, quite simply, to offer only these plans. But if, like most employers, you want to continue to offer a choice of a traditional plan, change up the entire array of plan offerings. Disruption can be a big motivator; without their current plans to fall back on, employees have to pause and spend time to review their options and choose a plan. Employees will be more likely to consider CDHPs under these circumstances, especially if employee contributions are favorable. Also, requiring active enrollment in this situation can translate into higher CDHP enrollment since employees can’t default into their current plan and must make an election.
- Provide decision support. Benefits enrollment isn’t exactly what most employees would call fun. You can at least make it easier by providing a tool during enrollment that allows employees to model which plan has the best cost/features for their situation. It’s also important to create a seamless enrollment experience for your employees, for electing an HSA-eligible plan and for opening the HSA at the same time. Some employees miss out on the employer’s HSA seed because they didn’t open the HSA (don’t need to add, but clarifies a bit).
And, once you’ve done all (or some) of this, make sure to get the word out to your employees. Communication is vital. Just over half of HSA plan sponsors say they provide extensive or very extensive communication to their employees, and among these employers, the average enrollment is 35%, compared to a mere 24% among those providing less extensive communication. In other words, it’s not enough just to provide tools and resources – you have to motivate your employees to use them to take control of their benefits decisions.
The House Republicans released a white paper outlining their plan to provide “High Quality Health Care for All” – the GOP’s proposed approach to replace the ACA. While it lays out some interesting strategies that could potentially be attractive to employers, the paper lacks the details necessary to be able to evaluate the impact on employer-sponsored health benefits as we know them today. And we all know the devil is in the details.
Here are some of the highlights:
- Let’s start with the good news for employers – no more employer mandate. The document doesn't go into detail on what exactly goes away. Presumably scratching the employer mandate would mean no more 30-hours requirement, hours tracking, minimum plan standards, affordable contributions, or reporting (pinch me, am I dreaming?). But none of these are specifically called out in the paper.
- No surprise, the most popular features of the ACA will remain. Dependents will continue to be eligible for coverage until age 26. Lifetime maximums and pre-existing condition exclusions will still be banned.
- The Excise Tax is replaced with a new cap on the employee tax exclusion for employer-sponsored health care coverage. Currently employees are not taxed on the value of the health care benefits provided by their employer. The GOP plan will cap the exclusion “at a level that would ensure job-based coverage continued unchanged”. The authors think employers will keep benefits under the cap and convert the reduced benefits to additional cash compensation. While this theory is continually touted by economists and academics, in numerous Mercer surveys, employers have told us they will not increase wages to “make up” for cuts in benefits.
- Which leads us to Health Savings Accounts. The proposal expands catch-up contributions for spouses and increases maximum contribution limits, among other changes to encourage broader use of these savings vehicles. In addition, HSA contributions won’t count when calculating the cap on the employee exclusion.
- In a show of support for private exchanges, employers would be allowed to fund health reimbursement accounts to be used by employees to buy coverage on a private exchange.
- Other notable features include changes to support insurance competition, medical liability reform, individual tax credits for those not eligible for an employer-sponsored plan, and additional reforms to Medicaid and Medicare.
Employers will no doubt push back on the cap on the tax exclusion. It’s important to note that this is only the beginning – it’s a white paper; not proposed legislation. Step one in what could be a long journey, or – depending upon the election results – no journey at all.
Model ADA notice for wellness programs posted
The Equal Employment Opportunity Commission (EEOC) has posted a sample notice for employer-sponsored wellness programs that must comply with recently issued Americans with Disabilities Act (ADA) regulations. An accompanying set of Q&As explains who must provide the notice, what formats are acceptable, and when employees must receive the notice. Employer-sponsored wellness programs that collect health information must provide the ADA notice. Employers can craft their own version to use in lieu of the EEOC sample, as along as the notice contains all required content. The ADA notice requirement takes effect for the plan year starting in 2017.
House panel OKs mental health parity changes
Bipartisan legislation (HR 2646) to improve federal-state enforcement of mental health and substance abuse parity rules received unanimous approval from the House Energy and Commerce Committee on June 15. A full House vote on the bill could occur as early as this summer.
The measure directs regulators to come up with an "action plan" for coordinating enforcement and to issue more guidance on parity topics, 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.
Similar legislation (S 2680) cleared a Senate committee in March, and bipartisan talks are underway on how to advance the Senate bill, but the outlook is uncertain. Propelled by concern over the opioid abuse crisis and gun violence, both House and Senate bills include a host of reforms aimed at improving the nation's delivery system for mental health care and better integrating it with medical care.
Here are a couple of eye-opening statistics. Behavioral health issues account for 4% of all medical claims on average, yet contribute to 21% of health care costs. And for employers, there are other consequences of failing to address behavioral health in the workplace: Costs associated with employee absenteeism and lack of productivity due to behavioral health issues account for nearly $17 billion dollars annually.
Employers across the country have noticed an uptick in medical claims related to behavioral health. One driving force behind this trend is substance use disorders in the adult dependent population (dependents ages 19-26 who are covered on their parents’ employer medical plan).
Here are some actions that employers can take to address behavioral health in the workplace:
- Integrate behavioral health resources
- Start with your EAP. Examine ways to integrate EAP services with your behavioral health coverage, whether offered through the medical plan or a carve-out vendor. Establishing formal referral practices will help ensure members receive the right care at the right time.
- Have an employee well-being program? Find out if the vendor or carrier offers a behavioral health screening tool to help members self-identify a need for behavioral health services. Be sure your well-being partner includes referral information to EAP and other relevant benefits on their portal.
- Talk to your medical carrier about utilization management. What are they doing to address out-of-network use for mental health and substance abuse services? Are behavioral health issues considered primary conditions within their case management services?
- Boost engagement with the EAP
- EAPs are often underutilized, in part because employees don’t know their services are available. Work with your EAP provider to create custom marketing campaigns that motivate members to use the service. Promote any work-life services offered, such as child-care concierge and financial and legal advice.
- EAPs can provide acute behavioral health care services. Effective referral pathways between your medical carrier and the EAP can get members who can benefit from EAP to the right care.
- Innovative EAP providers are leveraging technology to deliver enhanced services: web-based mindfulness solutions and cognitive behavioral therapy; tele-mental health services; video counseling; and text message interaction.
- Assess your organization’s culture
- Do employees feel comfortable addressing behavioral health issues in the workplace, or is stigma preventing individuals from seeking the care they need? Publicly available resources on addressing mental health stigma are available. (National Alliance on Mental Illness, Partnership for Workplace Mental Health)
- Consider developing behavioral health policies, including a vision statement, and specific objectives around behavioral health in the workplace.
- Ensure compliance Mental Health Parity & Addiction Equity Act (MHPAEA). A parity assessment might be appropriate if:
- You have a carve-out behavioral health vendor
- You recently changed your benefit design or cost-sharing
- You have a tiered network
- Your plan has exclusions or limitations on certain levels of care for mental health and substance abuse
- You have medical management or other non-quantitative limitations in your plan design
 Melek S, Norris D. Chronic Conditions and Comorbid Psychological Disorders. Seattle: Milliman, 2008.
 Hertz RP, Baker CL. The impact of mental disorders on work. Pfizer Outcomes Research. Publication No P0002981. Pfizer; 2002
Wow, it’s June already. Kids are playing outside, the smell of barbeque is in the air, and some of us, just maybe, are feeling the onset of the innovation summertime blues. What, you’ve never heard of this particular brand of the blues? Let me paint a picture and maybe it will look familiar.
You’d been hearing about all these new startups and innovations in the healthcare market, and one or maybe two of them caught your attention. So you took the plunge, and now you’re in the midst of planning a pilot or even a full blown rollout. But three to six weeks in, what you’re feeling now is “Wow, this is a lot of work! Is this all worth it?” or “Hmmm…this isn’t all that I expected. Seems like there’s some vaporware here that needs to be built before launch.”
Those, my friends, are the innovation summertime blues! The initial buzz and excitement has worn off and the real work, some of it pure drudgery, has begun. But take heart. Here are six tips to help battle this summer affliction:
- Preview your innovation with some potential employee users. Those who love the product will recharge your energy with fresh perspective…and those who are critics may push you harder to try to win them over.
- Become a real user of the product. If you really kick the tires on the system, you’ll reduce unpleasant surprises – like finding out that something you assumed was part of the product suite or service model, isn’t.
- Take a break and listen to this short motivational excerpt from Steve Jobs!
- Talk to other employers who have already rolled out the program. Hear what went well and what didn’t and see if there are learnings that you can apply.
- Put together contingency plans. What if user engagement is lower than your targets? (First off, what are those initial targets?) Do you have a plan (and potentially budget) to address low engagement? On the flip side, what if engagement is higher than expected? (One can dream…it has been known to happen!) If there is too much stress on the system, what’s Plan B? You can only foresee so much, but scenario planning can minimize anxiety beforehand and improve your response to problems afterwards.
- And last but not least, breathe! All these bumps in the road and challenges are supposed to happen – it’s the nature of innovation! In any case, before you know it, fall will be here and you’ll be in the thick of open enrollment. At least the kids will be back in school. :)
You won’t find many business leaders who would disagree that a healthy work-life balance is important for employee well-being and ultimately good for business. But when I looked at the most recent results from the HERO Health and Well-being Scorecard in Collaboration with Mercer, only 22% of the nearly 500 respondents say that their organization’s leaders are role models for prioritizing health and work/life balance – for example, they don’t send e-mail while on vacation. When I mentioned this disturbing statistic to my colleague Tracy, she pointed me to a recent WSJ article in which Marsh & McLennan CEO Dan Glaser discusses his approach to work-life balance. Over time, he says, he got better at keeping work and family life separate, but he wishes he’d figured it out sooner: “Your kids are only young once, and you can’t get that moment back,” he said. Others quoted in the article acknowledged the importance of setting an example for employees rising in the ranks. “It is critical for the CEO to set the tone,” said one exec. “If he doesn’t, there’s a secret kind of code, ‘if you take vacation, you’re not as serious an executive.’ ”
There’s been a lot of discussion lately about the gig economy. According to the Bureau of Labor Statistics, 15 million people in US were self-employed in 2015. It is predicted that by 2020 more than 40% of the workforce (60 million people) will be independent workers – freelancers, contractors, temporary employees. Harvard Business Review called it “the rise of the super-temp” and predicted that – perhaps contrary to current perceptions – these contractor positions will be held by the best and the brightest. There are even new platforms to pair talent with businesses, like Contently, Hourly Nerd, Field Nation, and our own Mercer PeoplePro.
Consider the next generation of workers – digitally savvy kids who see the global grid as their toy. Pair that with two more trends – an increasingly global labor pool and the aging baby boomer population interested in retirement on their own terms. What does this mean as we think about the future workforce and a possible “new normal” for benefits?
In Mercer’s 2016 Global Talent Trends study, 85% of the nearly 2,000 HR leaders who participated said that their talent management program and policies needed an overhaul. We also surveyed about 4,500 employees for the same study, and even including those who say they are generally satisfied with their current organization, one in three are seriously considering a change in employment in the next 12 months. Typical underlying factors include lack of development, outdated processes, and discontent with their manager’s role.
How big of an issue is pay? Looking at survey results from the past five years, we find that pay satisfaction levels have been steady – but with only about 55% of employees surveyed reporting that they are satisfied. Few think pay-for-performance is adequate. Fewer see how their work contributes to the organization’s overall goals. Few think they are fairly paid. What do they say about benefits?
- 89% say benefits are just as important as salary
- More than a third are already having trouble paying for health care now and about half express anxiety for the future
- Being able to afford health care in retirement is the top savings objective
Returning to the gig economy, it looks to me as if an employer that wants or needs full-time workers will have to make a case not only that their organization is a better place to work than their competitors’, but that full-time employment beats independent work! That will be harder to do if talented workers believe that the employer-sponsored health plan doesn’t provide adequate coverage and they need to take matters in their own hands in terms of paying for health coverage. And employers that can hire contract workers will still need to consider how to help keep them healthy, productive and engaged.
All of this to tee up a couple of questions that will need answers sooner than you might think: What do we need to do to attract workers going forward and what will the new normal for benefits be?
New tri-agency proposed regulations implementing the Expatriate Health Coverage Clarification Act of 2014 (EHCCA) outline the conditions an expatriate medical plan or policy must meet to exempt the plan, sponsoring employer, and expatriate health insurers from certain Affordable Care Act (ACA) requirements. Generally, EHCCA exempts plans or policies that meet the law's definition of an "expatriate health plan" from certain ACA market reforms, fees, and aspects of the "Cadillac" excise tax on high-cost health benefits. The proposal clarifies which individuals are qualified expatriates, which insurers can issue qualified expatriate coverage, as well as other important requirements to take advantage of the EHCCA relief.
The same regulatory project contains proposals on several types of insurance that may qualify as excepted benefits under the Health Insurance Portability and Accountability Act (HIPAA). Excepted benefits are exempt from many of the ACA’s plan design requirements that otherwise affect plans and policies. These proposed regulations describe requirements for exempt status of travel, group hospital indemnity or other fixed indemnity, specified disease or illness, and supplemental health insurance. Also proposed is restricting short-term limited duration coverage to policies with a maximum duration of less than three months; it’s thought this will avoid the use of short-term policies to circumvent ACA requirements while still permitting short-term coverage to assist individuals transitioning from one plan to another.
The proposals — issued jointly by the departments of Labor, Treasury, and Health and Human Services — are proposed to be effective for plan or policy years beginning on or after Jan. 1, 2017. Comments are due August 9. The proposed regulations can be relied on until final regulations take effect. If final guidance is more restrictive it will apply prospectively with time to come into compliance.