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Mercer

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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GOP’s ‘Obamacare’ repeal path worries health care industry

Ricardo Alonso-Zaldivar, AP (Published by The Washington Post)

  • Don’t overlook the concerns raised by key healthcare industry stakeholders. Within the healthcare system nothing happens in isolation, and repealing and replacing the ACA will certainly have an impact on employer-sponsored plans. *A must read*

 

An Obamacare ‘Delay’ Plan Could Backfire

Margot Sanger-Katz, The New York Times

  • The Republican’s ACA repeal and delay plan assumes the sustainability of the current healthcare system while they put a replacement plan in place. This article questions that assumption and warns that even a carefully planned delay may result in an unintentional quick repeal for some Americans. *Worth the time*

 

Why It Will Be Hard To Repeal Obamacare

Haeyoun Park and Troy Griggs, The New York Times

  • If your employees have questions about repealing the ACA, give them this link. It’s the simplest explanation that we’ve found. *Quick and easy*

 

Leading Republican proposals signal possible shape of ACA replacement plan

Mercer’s Washington Resource Group

  • House Republican leaders, President-elect Trump, and HHS nominee Tom Price have all have ACA repeal and replace proposals. This article compares the proposals' key features, which offer some indication of what a final ACA replacement plan may look like. *Skim this one* (Mercer Select Intelligence membership required. Not a member? Learn more)

 

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A campaign promise to repeal the ACA is one thing, while figuring out how to dismantle the massive law with its many far-reaching elements is quite another. This Washington Post article discusses the paths Trump and Congress could take to walk back various parts of the healthcare reform law. According to the article, the GOP majorities in both chambers are likely to use the reconciliation process to overturn key aspects of the ACA that involve federal spending, such as the subsidies granted to millions of working Americans to help them pay for health coverage. But reversing other parts of the law, such as its insurance marketplaces, or instituting various Republican-backed healthcare approaches, would require a political path that could be more arduous. The ACA rules that affect employer-sponsored health plans are not grabbing the headlines and don’t get much ink in this article, either.  But the message for employers that’s emerging is that this Band-aid will be coming off slowly. It’s not too soon to start thinking about how to position your program for the changes ahead. 

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It is hard to argue that employers have not done a pretty good job in recent years managing cost. The threat of the excise tax obviously had something to do with that, and keeping health benefit cost growth to about 4% annually has required some effort. We at Mercer think we have helped our clients make some great strides in the fight to manage health care cost and improve quality with initiatives like Mercer Complete Care, a personalized advocacy and clinical care solution, and our new Specialty Pharmacy PBM Carve-out offering. We have also implemented Quality Improvement Collaboratives (QIC) in several metropolitan areas across the country to bring employers together with providers to improve the quality of hospital care.

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This New York Times article offers an interesting “compare and contrast” analysis of public exchange plans versus employer-sponsored plans. Whether you’re satisfied with benefits on the public exchange really comes down to your perspective. If you were among the millions who were previously uninsured, you’re likely to be happy with your exchange coverage. If you came to the exchange after having had employer-sponsored coverage, the story is very different. A more limited choice of providers in the health plan network and higher out-of-pocket requirements are among the chief differences noticed by those coming off employer plans. In the end, a typical plan on the public exchange “looks more like Medicaid, only with a high deductible.” So while the public exchange is helping to fill a gap in the U.S. health care system, it’s not proving to be a source of comparable coverage for early retirees or those who would like to quit a corporate job to freelance or start a business. And each year, as these plans get skinnier, we’re seeing fewer employers that would even consider dropping the company plan to send employees to the public exchange.

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There have been lots of stories in the news over the past week about the Department of Justice suit to block Anthem’s purchase of Cigna and the Aetna and Humana deal. As Tom Murphy reports, leadership from both Anthem and Aetna have committed to defend the lawsuits. The final outcome remains uncertain and could entail a prolonged legal process. The two questions we have been hearing from employers are “what does this mean to us?” and “should we go out to bid now or wait and see what happens?” From an employer perspective, nothing changes – you should continue to refresh your benefits strategy and actively manage your health benefits to meet your goals and objectives. This includes aligning with vendor partners that best support your strategy. We recommend that employers not delay a vendor selection due to this potential consolidation. As the legal proceedings unfold, employers will have visibility into any activity that could impact their vendor partner and their member population. The cost trend for employer-sponsored health coverage has hovered around 3% for the past several years – proof we are managing cost while still providing meaningful health benefits. Don’t let this slow you down!

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Benefit teams have had a lot to cope with lately – ACA reporting, the new ADA/GINA wellness rules, and the Cadillac tax, to name just a few of the high-priority issues on their plates.  So it’s not surprising that when we ask clients about their absence, disability, life solutions (ADLS), they tell us they haven’t had time to review them over the past few years.  And many don’t see much to be gained from a review, since they don’t believe they would be able to negotiate a better rate.

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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.

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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.

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More employees leave their employers during the first 12 months after having a child than at any other time.  That’s not surprising when you consider the added stress, late nights, and new responsibilities that a newborn brings.  The need for flexibility and work-life balance almost always intensifies after the birth or adoption of a new child, and a growing number of organizations are trying to ease the burdens of new parents by offering generous leave benefits. Employers that compete the most for talent – like those in high-tech – may have started the trend, but now even more traditional employers are feeling the pressure to provide attractive leave benefits. “It’s almost an arms race to come up with the most innovative, generous and creative programs,” says Mercer’s Rich Fuerstenberg in this Houston Chronicle article. Between paid leave of 20+ weeks, the option to avoid business travel for one year, and so-called “baby money” for extra expenses, employers are going above and beyond what’s required by federal law (just 12 weeks of unpaid parental leave for eligible employees by employers with 50 or more employees). Expect to hear more about parental leave in the coming months as the presidential election heats up and it becomes a key policy issue. Employers should use this opportunity to look at the demographics of their organization and decide if expanding parental leave benefits would make their value proposition more competitive in this tight labor market.

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Employee Benefit News recently recognized 50 visionaries who are “driving technology innovation, overcoming organizational and technology barriers, deploying leading-edge technology, and shaping benefit technology regulation and policy” – including our own Dr. David Kaplan, leader of Mercer’s Innovation LABS team. More than ever before, employers are keenly interested in the latest innovations as they realize the value of creativity and forward-thinking solutions to stay competitive in this tight labor market. Mercer’s LABS team has worked with quite a few innovative companies this past year – Rethink Benefits, Kurbo Health, and ConsejoSano, to name a few – to facilitate the process of bringing their solutions to market. Innovation is more than just a buzzword, and the latest benefits and perks aren’t just for Silicon Valley start-ups. Innovation is absolutely key for any organization when it comes to talent attraction and retention; your organization’s value proposition needs to reflect the expectations and dynamics of today’s workforce and their families.

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A new report from the Conference Board signals tough days ahead for employers. In the next 10-15 years, they project the demand for labor in the US will exceed supply. A labor shortage puts added pressure on organizations to retain existing employees – something that is already a top concern of human resources leaders. In a recent Human Resources Executive surveyWhat’s Keeping HR Up at Night? – respondents reported eroding levels of employee engagement as their #1 concern. Of the 12 strategies to boost employee engagement and retention that the survey asked about, only three showed an increase in usage: enhancing employee benefits, offering/enhancing wellness programs and increasing/improving leadership training.  As the war for talent escalates, it will be increasingly important for benefits professionals to understand their organizations’ staffing projections and plans. This will allow them to respond with benefit and wellness offerings that aid in the recruitment and retention of employees in a tight labor market.

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