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Mercer

With this post, we at the blog are officially kicking off annual planning for 2018. Over the coming weeks, we’ll be offering advice and check lists for 2018, including some special to-do’s for prescription drugs and time-off benefits. We thought a good place to start this year is with a list of best practices. The list below contains 25 health benefit best practices from the Mercer National Survey of Employer-Sponsored Health Plans. Each year we compare the performance of employers that use the most of these best practices with those using the fewest (the top and bottom quartiles). And each year we find that those using the most best practices have lower average healthcare cost increases. (In 2016, the two groups had average increases of 3.8% and 4.8%, respectively.)

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House Republican leaders are working to win the votes needed to pass a revised version of their health care reform bill, the American Health Care Act (AHCA), that aims to lower health insurance premiums for some individuals by letting states obtain waivers to opt out of the Affordable Care Act's (ACA) essential health benefits, community rating, and age banding requirements.

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It has been a month since the American Health Care Act was pulled because House Republicans lacked the votes to advance it to the Senate. Here’s a run-down of all that has happened since then, including our perspective on what it means to employers.

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Offerings of HSA-eligible high-deductible health plans have more than doubled in the past five years. Our 2016 National Survey of Employer-Sponsored Health Plans found that more than half of large employers (53%) now provide this type of plan to their employees, and nearly a quarter of employees (24%) are enrolled. At the same time, there has also been steady growth in offerings of onsite and near-site medical clinics, especially among the largest employers: About a third of employers with 5,000 or more employees provide a clinic for primary care services. An onsite clinic offers the maximum opportunity for control over quality, and more than half of the clinic sponsors in another Mercer survey said that their clinic is integrated with their population health efforts.

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The stalled House ACA repeal and replace effort means the next crucial decision about the ACA’s future will probably be made by the White House. Following the canceled vote on the American Health Care Act (AHCA), the immediate concern on the health reform front is whether President Trump is serious about his threat to let the ACA “explode” – to use his term.

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Just a few days after the dramatic collapse of efforts to pass the House GOP’s American Health Care Act, more than 1,300 folks with an interest in employer-sponsored health benefits joined a Mercer webcast* to learn a) what the heck just happened, b) now what, and c) what does this mean for employer health benefits? A team from our Washington Resource Group aced the first question and gave as good a look into the future as possible without a crystal ball. 

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A couple of weeks ago (feels like ages) we launched a brief survey to find out where employers stood on specific provisions in the House GOP repeal-and replace-bill, the American Health Care Act (AHCA). We closed the survey on Thursday with more than 900 responses.  As I was reviewing the results on Friday, the bill was apparently dying -- but now House leaders and President Trump are signaling that it may be revived. Either way, the health reform debate is far from over, and many of the provisions introduced in the AHCA will likely remain part of the discussion.

 

The survey asked health benefit professionals how key provisions would affect their organization’s health benefit program, employees, and business success -- as opposed to how they might affect the individual market or people without access to employer-sponsored health insurance. They could also respond that the provision would not affect their organization one way or the other. 

 

HSA changes, repeal of employer mandate seen as positive

We didn’t ask for an overall opinion of the bill, but employers’ reactions to individual provisions added up to a less-than-ringing endorsement. To start with what they liked: 66% said that liberalizing HSA rules -- such as allowing higher contributions -- would have a positive effect on their organizations. That’s in the ballpark of the percentage of large employers nationally that offer HSA-eligible plans (53% in 2016). If you don’t offer an HSA-eligible plan and don’t intend to, or if you do offer one but none of your employees are likely to hit the maximum account contribution, you might not believe this provision would have much of an impact, like 29% of our respondents. 

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Last week Republican leaders abruptly canceled a House vote on the proposed American Health Care Act (AHCA) because it was clear that it wouldn’t pass. At a March 24 press conference, Speaker Paul Ryan, R-WI, said that the party will now "move on" to tax reform and other policy priorities.

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Today is the seven-year anniversary of the signing of the ACA, and we spent it with our eyes glued on the House, waiting for a vote to repeal the law. It looks like the vote is delayed, so too soon to call if it’s lucky number seven for the Republicans or the Democrats. 

 

 

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Despite last week’s cold snap, the bloom of cherry blossoms along Washington DC’s Tidal Basin is now under way – a peaceful sight that belies this stormy moment in Congress, where new healthcare legislation is being debated and the headlines seem to shift from moment to moment. However, one thing is for sure: any legislation affecting the US healthcare system must consider the impact on employer-sponsored health insurance – the source of coverage for 177 million Americans, 16 times the number enrolled in public exchanges.

 

That’s why the leadership of MMC companies Mercer and Oliver Wyman created a health policy group to help formulate MMC’s views on ACA repeal-and-replace legislation. Our efforts led to the issue of a policy paper that showcased original Mercer research on changing the tax treatment of employer-sponsored coverage.  

 

Last month, we took this research to the US House of Representatives to meet with policymakers actively working on the newly proposed American Health Care Act, or AHCA. We demonstrated that the excise tax on high-cost plans, currently law under the ACA, is not an effective method of penalizing rich “Cadillac” plans because plan design is only one factor affecting plan cost and often less important than location and employee demographics. 

 

This would also be true of a cap on the employee individual tax exclusion for employer-provided health benefits, a provision included in an early draft of the AHCA and favored by powerful voices such as House Speaker Paul Ryan (R-WI), House Ways and Means Chair Kevin Brady (R-TX) and new HHS head Tom Price. Mercer had also modeled the impact such a cap would have on the effective tax rates of Americans based on their income. The hardest hit, by far, would be lower-paid workers with families. Some staffers faced with this information for the first time were visibly struck.

 

When the bill was released for mark-up, the cap on the exclusion was not included, and the Cadillac tax was delayed until 2025 (and possibly 2026). But while we were pleased with this outcome, we also knew the bill was a long way from becoming law and the cap could easily resurface.  

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What happens to the ACA has serious implications for employers. In response to the recent introduction of the American Health Care Act, which seeks to repeal much of the ACA and replace it with new policies, we’ve prepared a very brief survey to gauge employer response and ensure your voice is heard. 

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The Congressional Budget Office (CBO) estimates that House Republicans' legislation repeal and replace much of the Affordable Care Act (ACA) will reduce federal deficits by $337 billion and increase the number of uninsured by 24 million -- for a total of 52 million uninsured people -- by 2026.

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