Moving from an employer-sponsored plan to a Medicare plan does not have to be complicated. Money magazine talked with Mercer’s Kristin Parker and came up with five tips for retirees. A few of them raise interesting considerations for those about to retire that could result in waiting for Medicare coverage to get treatment.
- There is no family plan in Medicare. So if you and your spouse have different medical and prescription drug needs, you can each enroll in the plan that is best for you.
- Cap on out-of-pocket costs isn’t automatic. Original Medicare pays 80% of covered expenses, with no cap on what you might have to pay. Medigap and Medicare Advantage policies have out-of-pocket safeguards. It is important to understand that component of the Medicare supplement policy.
- Be strategic in scheduling some procedures. Those about to retire should compare out-of-pocket costs for a needed procedure under employer coverage versus Medicare. You may fare better with Medicare’s hospitalization coverage, for example, than with your current commercial plan.
- Wellness features may be different. Medicare’s programs tend to offer more in-person care from health professionals, while commercial programs often depend on telephone advice services.
- Research may help limit drug costs under Medicare. Most people can use a Medicare tool to compare the plans offered where they live to find the best fit for individual needs. Doing your Part D homework might provide better and cheaper coverage than through your employer plan.
Changing medical insurance upon retirement is a big deal to retirees. Employers who are looking to ease the transition for retirees can direct retirees to a resource to help them consider their options. Fifteen percent of employers contract with a retiree exchange to provide personalized support to Medicare eligible retirees. In addition, the States have established Senior Health Insurance Information Programs (SHIIP) to help seniors. Educational tips and personalized support can go a long way to helping a new retiree feel confident about their healthcare choices and decisions.
Opioid abuse. You’ve probably read lots of stories about it recently, but have you seen the stats? They’re alarming, to say the least: There has been a fourfold increase in opioid prescriptions from 1999 to 2010 and a fourfold surge in deaths due to overdose.
Opioids are medications that relieve pain, such as hydrocodone (e.g. Vicodin), oxycodone (e.g. OxyContin, Percocet), morphine (e.g. Kadian, Avinza), and codeine, as well as non-prescription drugs such as heroin. As a group they’re the third most commonly abused drugs after alcohol and marijuana, and they’re now responsible for killing more people than automobile accidents, according to the Substance Abuse and Mental Health Services Administration.
They have also been blamed for a decrease in life expectancy among certain groups of middle-aged Americans. Among self-insured employers, some estimates claim that 32% of opioid prescriptions are misused or abused, while Mercer data shows that opioid users 18 and older cost 5.5 times as much in total allowed medical and pharmacy costs compared to non-users.
The National Council on Alcohol and Drug Dependence reports that 70% of people using illicit drugs, including non-medical use of opioids, are employed -- and then there are all the employees whose work may suffer as a result of worrying about a loved one with an addiction. Among 18-25 year olds, 12% use opioids non-medically, as do 5% of those 26 and older. The CDC also reports that there is 6% utilization among those aged 12-17. Employees across the country are struggling with this disease -- diagnosed and undiagnosed, directly and indirectly.
Something needs to be done -- and all of us, including employers, can play a role in addressing this epidemic. You can help support those with addiction by training managers and supervisors to identify problems and referring employees to sources of help such as your EAP or Behavioral Health carrier. In addition, it’s important to develop communication tools for employee awareness efforts. And if your organization has a drug-testing program, check to see if the panel of substances tested for includes opioids.
Just as important is to prevent new cases. Review your medical, dental, and pharmacy benefit design to prevent the over-prescription of opioid medications. For example, the current recommendation is to limit prescriptions after procedures to seven days, which has been shown to decrease the development of new addictions. In addition, employers can ask their carriers or PBMs whether they flag members who are deemed high-risk for addiction, and if they follow up to ensure providers are consulting state Prescription Drug Monitoring Programs (PDMPs).
It’s also important to facilitate a successful return to work, by supporting the ongoing care needs of the employee as well as the families affected by addiction. And through careful monitoring of claims data, employers can look for red flags of addiction such as:
- Members obtaining large quantities of opioids
- Members prescribed narcotics by different doctors
- Members prescribed narcotics for more than 30 days
Prescription drug abuse is a serious medical issue, and should be treated as such. By taking action now, you can do right by your employees who may be suffering from addiction, while also doing your part to address a sensitive and complex issue plaguing our society.
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.
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.
Today nearly one in five Americans over the age of 65 are still working, according to recent data from the BLS, and that’s a new record. As the Baby Boomers hit retirement age, an unprecedented number are deciding to stay on the employment path. In addition, according to this article in Bloomberg (citing a Federal Reserve study), 27% of working Americans say they plan to keep working for as long as they can.
Some of the factors at play are positive – better health, greater longevity, and employment satisfaction. But one study found that almost half of retirees surveyed said they had worked longer than they wanted to because of financial concerns, and according to Mercer’s own Inside Employees’ Minds survey, having enough money to pay for health care in retirement is a top financial concern. We consistently find that the average retirement age is lower in companies that offer medical benefits to early retirees than in those that don’t (62 and 64 years, respectively, in 2014). It’s also telling that retirement age first started to fall after Medicare was established, easing concerns about paying for health care in retirement. While many employers have established HSA or HRA accounts to help employees to save for health care expenses in retirement, these tend to be underutilized. Providing education about value of these accounts, as well as support for financial and retirement planning, can help ensure that employees don’t stay in the workforce longer than they want to.
Even so, changing demographics alone are likely to keep people working longer. Speaking at Mercer’s Global Investment Forum in Singapore this March, Sarah Harper, professor of gerontology at University of Oxford and director of Oxford’s Institute for Population Ageing, raised some questions for employers to consider. “How are we going to adapt workplaces to cope with [an older workforce]?” she asked. “How are we going to ensure, in a really technologically driven world, that we keep our skills upgraded across the life course?”
Workplace stress is an issue that virtually every organization faces. Whether it stems from personal or financial matters, or is generated by the work environment itself, stress can have a substantial negative effect on an organization’s performance. A recent report by United Nations’ International Labour Organization (ILO) examined several studies to quantify the impact of stress in workplaces around the world. Work-related depression in the European Union alone is estimated to cost a whopping €617 billion. In the face of such staggering costs, what can employers do? The ILO identifies several measures employers can implement to mitigate these costs, ranging from social support systems where workers feel comfortable discussing conflicting demands between work and home, to training and education that provides information on psychosocial risks. It also provides a comprehensive list of tools for the assessment, management and prevention of risks and work-related stress for various countries and in multiple languages that employers can readily utilize. And while it’s important to be aware of what tools are available to help manage workplace stress, recognizing potential barriers for implementation is also key: taking a regional perspective, the study found that while limited understanding of psychosocial factors and work-related stress is one of the most prevalent barriers to implementation in the Americas, it’s less of a factor in Europe and Central Asia. The strategies described in the report, which are summarized in a recent Huffington Post article, provide a valuable checklist for international employers in particular to evaluate their efforts to create a positive and healthy work environment.
Hand in hand with stress management practices, health management policies are vital to the overall well-being of an organization’s workforce. The HERO Health and Well-Being Best Practices Scorecard in Collaboration with Mercer© - International Version (an online assessment tool designed by the Health Enhancement Research Organization and Mercer) provides an up-to-date inventory of best practices that can help employers identify gaps and opportunities, assess their programs against industry norms, and assist in strategic health management planning for companies based outside of the U.S. With the US and International versions of the HERO Scorecard available, organizations now have a consistent tool to assess their health and well-being efforts in worksites around the world.
Yesterday may have been International Women’s Day, but employers should view every day as an opportunity to attract, retain, and promote women in the workplace. Mercer has an extensive body of research in this area, highlighted in our 2016 Global When Women Thrive report – the most comprehensive and predictive of its kind. “It has been a momentous year for the global women’s agenda with key voices – legislators, economists, businesses and academics – all calling for more action and more resolve around gender parity,” says Pat Milligan, Global Leader of Mercer’s When Women Thrive initiative, in this HR Dive article. “We continue to elevate our voices and the conversation, yet our research shows the pace at which we’re moving means that gender parity remains a long way off.” Employers need to look closely at what they’re doing to promote gender diversity, particularly in terms of involving men in the conversation and implementing robust pay equity analysis processes. An easy way for benefits professionals to support the cause is to offer retirement and financial education focused on women. Less than 10% of organizations offer this type of education despite proof that such practices drive future representation.
In a new survey from the International Foundation of Employee Benefit Plans, less than 20% of employers said they believe their employees have a high-level of understanding about their benefits. This is a disheartening statistic for HR professionals who work hard to communicate with employees about their benefits. But it indicates that traditional communication methods are no longer working. It’s time for employers to understand the generational differences of their workforce and meet employees where they are – in life and on communication platforms. If employers can unlock the key to increasing employee understanding, the value of their benefits should rise even higher.
We often hear about the gender pay gap, but it’s not every day that organizations devote as much attention to their gender benefits gap. According to Mercer’s provocative 2016 When Women Thrive global report, organizations can, and should, be doing more to offer benefits education programs that specifically cater to women. Currently, only 9% of corporations are monitoring savings behavior by gender, but as Mercer’s Brian Levine points out in this Employee Benefits News article, “Women live longer, are more likely to have breaks in service, save less and make less risky portfolio decisions, so providing guidance to that population on investment decisions” is key. Organizations that focus on educational activities geared toward women’s health and wealth management can boost their female representation at the professional level and above – and with current talent flows in North America bringing us virtually no closer to gender parity by 2025, taking a proactive approach like this is critical.
Now that W-2's are out, individual tax preparation is under way. 2015 was the first year Americans were required to have health insurance or pay a fine. With the delay of the ACA reporting requirements, many will not have the 1095 form – proof that they were insured – at the time they file their taxes. The IRS says everyone should go ahead and file, even if you do not have a form. Depending on your timing to provide the 1095 forms to your employees, now would be a good time to communicate with them about what to expect when they file their taxes – it could cut down on calls and e-mails.
We know most employees stay with the same medical plan year after year unless forced to make a change, and that probably goes for their dependent coverage elections as well. Michelle Andrews wrote a helpful article in Time about coverage choices for dependent children after college. But the truth is, employees should consider their options each year for how best to cover their family members. In recent years employers have been lessening the subsidies for spouse and dependent coverage – and some have taken stronger measures with spousal exclusions and surcharges. All this to help individuals see the opportunity during open enrollment to sit down at the kitchen table and evaluate the options for the coming year. With more generous subsidies for individual coverage, it may be a no-brainer for both working spouses/partners to take their own coverage. But then comes the question, where to cover the kids? This decision is best made by considering:
- Paycheck contribution for the coverage
- Plan features for cost sharing – deductible, coinsurance, out of pocket maximums
- Network of providers -- are your doctors in the network?
Employers might want to consider how to address these dependent coverage decisions in your open enrollment materials this year.
A new study from the Employee Benefit Research Institute (EBRI) revealed only 6.4% of people with health savings accounts (HSAs) invested their contributions in the financial markets while the remainder left their money in savings accounts that typically earn a lower return. Given how rapidly these plans are spreading -- the number of large employers (500 or more employees) offering an HSA-eligible consumer directed health plan jumped from 32% to 41% in 2014 -- the EBRI study signals a need for further evaluation and education by employers to help participants maximize the benefits of an HSA. You’ll want to determine what roadblocks discourage your plan participants from investing their HSA contributions -- for example, fees and minimum balances -- and address those accordingly. Also, the upcoming open enrollment season is a great time to reeducate employees about their investment options and explain the process to liquidate the funds to pay for medical expenses, if needed.