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.
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.
You remember the old algebra formulas from school: 3X + 2 = 11. Solve for X.
Now you’re solving problems in the business world. If you’re in charge of health benefits, solving for “X” means: Solve for lower premiums. Solve for more choice. Solve for higher quality, more efficiency, and better adherence.
As these challenges continue in the age of post-healthcare reform, an approach that addresses all of these problems is to focus on the provider network. A targeted provider network may include a couple of specific health systems. They’re designed to offer coordinated healthcare with cost efficiencies in place, which can reduce your company’s premiums and healthcare costs.
Here’s a closer look at why some employers are moving to what we at Mercer call “Network Value Solutions,” a way to access effective ACOs and narrow networks in local and regional healthcare markets.
1. Giving Choice Back to Employees and Still Reducing Costs
One of the most frustrating moments an employee can experience on your benefits site is when she realizes her physician is no longer in-network. Now, she’s got to find another physician, change health plans -- if she even has that option -- or resign herself to high out-of-network charges.
With Network Value Solutions, you can return some of that choice to the employee. For example, companies might offer choice of a high-performing, narrow network of top-quality hospitals and doctors alongside a traditional PPO network from a major insurance carrier. If employees enroll in that narrow network, in some cases requiring a change to their preferred doctor or hospital, they will save and their employer will save -- up to 15% on gross costs. And not only does this solution lower cost, it supports the principles of consumers and rewards smart shoppers.
2. Reducing the Administrative Tangles
Two decades ago, regional, provider-owned benefit plans were a popular choice among businesses and employees. Then many of them faded into the background as employers chose to consolidate their medical plan options, because of increased administrative complexities, regulations, and completing tasks that had nothing to do with growing their companies.
But today these plans are returning to the scene as a new generation of health benefits solutions. Only this time, companies are working with expert partners who handle the administrative headache. The re-emergence of these players has injected more competition into the health benefits marketplace and added back employee choice. There is also the added benefit of brand recognition: a regional network can include marquee names that local patients know and trust.
3. Improving Quality and Efficiency
Accountable Care Organizations (ACOs) offer incentives to groups of providers to deliver coordinated, high-quality care that saves money. ACO’s used to serve only Medicare. Though the model is new, they are showing results. They saved Medicare $466 million in 2015 alone, according to the Centers for Medicare and Medicaid Services.
Now, the private commercial sector has jumped on board. For example, one insurer’s ACO product includes more than 4,600 physicians and serves over 300,000 covered lives in north Texas. Since becoming fully operational in 2013, this ACO has reduced 30-day readmissions, hospital admissions, and medical plan costs for its customers.
ACOs have been proven to:
- Lower wait times for patients
- Reduce hospital readmission rates
- Reduce health complications
- Save employers an estimated 5% to 15% on total healthcare costs
Network Value Solutions: A Versatile Option
Network Value Solutions has an added dimension for large national companies: Employees in numerous states can select regional networks, high-performing narrow networks, and ACOs that are available to them locally.
When it comes to health benefits, flexibility and choice will continue to challenge employers into the foreseeable future. Network Value Solutions, (currently only available through Mercer Marketplace 365), offer employers new options -- without new administrative burdens -- while controlling costs and improving patients’ health.
Your new employee is 26 years old. He’s rarely sick -- maybe some occasional weekend-warrior soreness. His biggest health expense is his refrigerator full of grape Mountain Dew Kickstarts.
Then, there’s your vice president. She’s 55 and takes insulin for diabetes, just quit smoking, and has a husband and kids who rely on her insurance. She’s working hard to improve her health.
Obviously, these two have different health insurance needs. But many small and mid-sized employers would be challenged to offer more than one medical plan. In fact, about half of employers with 50 to 499 employees only offer one plan. How can they offer health benefits tailored to employees like these two, plus everyone in between?
A Market-based Solution
Private health exchanges are one approach that a small, but growing, number of companies are using. These exchanges cover some 6 million Americans and offer an array of plans, from traditional broad-network PPOs to high-performance narrow networks, and from plans with first-dollar coverage to HSA-eligible high-deductible plans.
They’re designed to address today's most challenging aspects of benefits delivery, including:
High Health Benefits Costs
Exchanges usually include employees from multiple companies, so they can leverage their volume to lower health premiums for employees, as well as plan costs for companies. Employees are also given more plans to choose from. They have the option to select higher-deductible health plans that lower their premiums, while lowering costs for employers as well. Converting to a private health exchange has saved companies up to 15% on their medical costs in the first year.
A Potpourri of Employees (the multigenerational workforce)
In the digital age, even small employers can hire staff from coast to coast. Millennials Skype with baby boomers. Generation Xers instant-message with seniors.
And everyone’s bringing different health needs to the table. Despite this, nine out of 10 employees say benefits are just as important as salary, and 63% say benefits are a major factor in choosing where to work.
Exchanges can offer a wide range of options to suit everyone, such as:
- Traditional health plans with HMOs and PPOs
- Narrow networks
- Provider-owned plans
- Plans for self-insured employers
- High-deductible health plans
Today, 80% of employees say a choice of health plans is critical to their job satisfaction. Employees are becoming smarter healthcare consumers. They want to shop around for healthcare and health benefits like they would anything else.
Sometimes, giving employees options is the best choice. For employers turning to private health exchanges, that means offering a variety of plans plus benefits counselors who can advise employees of all their options. The employees can select the best solution for themselves and their families. And that’s a solution everyone can live with.
Navigating healthcare is a challenge. The market has responded by bringing together an array of tools to guide consumers. This is a fictionalized account of one patient’s journey.
So I wiped out on the bike today in the strangest possible way. I was training for this year’s NYC Five Boro Bike Tour when I got distracted by a man on a unicycle juggling bagels and lost control. I can’t believe it! Only in New York. My bike is okay but I’m out of commission. I hopped over to the sidewalk and called an Uber back home. My right knee looks pointed inwards and the Internet says that could mean a torn ACL. I’m going to ice my knee, take some Advil, and hope I’m wrong.
It’s been three days now and I still can’t use my knee in any way. So I bit the bullet and took an Uber to the ER. I’m getting sick of sitting around in my apartment. Now I’m lying here in bed waiting for the nurse to come back and fit me with a brace. The doctor told me I was right about the torn ACL and that I should go home and schedule surgery for two weeks from now. I’m so scared about the idea of surgery and I don’t even know how I’ll be able to pay for it.
I tried searching for an Orthopedic Surgeon through my insurance portal and more than 800 doctors popped up. How am I supposed to know which one is the best for ACL surgery? Too frustrated to even write about it.
I tweeted out to the cycling community that I got my NYC Five Boro Bike Tour prize early and asked for a recommendation for a surgeon. Of course I got about 100 different names, which only made me more confused. Then Anna from work suggested I use MD Insider, which my company provides. I narrowed the list to about 30 doctors who specialize in ACL surgery and were on my plan. I sorted by quality scores and then called the top three to see who had the best schedule. I feel better already just having an easy, logical way to find a doctor. Surgery in 12 days!
I got a bill from the ER for $1,300 and literally fell out of my chair when I opened the envelope. That’s a month of rent! And all the ER did was confirm what I had found online—nothing special. In the future, I’ll definitely go to urgent care. I just had NO IDEA how crazy expensive the ER is.
After laying on the floor and moaning for a while, I remembered our company also provides a service called “Health Advocate.” I wasn’t sure that was, but it sounded like something I needed! So I made a phone call, and guess what? My advocate was a real human, not a robot! She helped me negotiate down the cost of the visit to just $450. I can’t believe I’m even saying “just,” but it obviously could have been worse. Lesson learned.
The surgery yesterday went well but I was too groggy to form coherent sentences until today. My surgeon was fantastic and put all my fears to rest. She was in my plan’s network so my out-of-pocket portion was more manageable than I had anticipated. If all goes well I should be back on my bike in a month. Plenty of time to get ready for next year’s Five Boro Tour!
Think I was being overly optimistic. Now it’s a week later and I’m still in a lot of pain from surgery. My health advocate called me to check up on me a couple of days ago and I told her I was fine, because I still had pain meds then. I took my last pill last night and still need more. My cyclist friend Lia offered me her leftover topical lidocaine (how can she have anything leftover??) and I said no because I figured my surgeon gave me a one week dose for a reason. I’m also scared of becoming an opioid addict, because addiction runs in my family. It sounds preposterous now that I’ve written it down, but gimme a break, my knee hurts! I just want to bike.
The pain is getting better. I’m glad I decided to wait it out instead of grabbing Lia’s leftover meds. Today I went for a quick spin on my bike. I made sure to bike on flat terrain and the ride went well! I’m a little poorer now—though it could be worse—but at least now I’ll have a good story to tell at the post-race party next year. Still can’t believe the guy was juggling perfectly good bagels.
This candidate looks awesome: great experience, glowing references. But you noticed her hesitancy when you mentioned your company’s health benefits—the “one-size-fits-all” plan.
It’s the dilemma every small and mid-sized business (SMB) runs into: You need to recruit Tesla-level talent. But your health benefits are more like a 10-speed. Sure, you could buy better benefits, but it would cut into your profit margins. Not a good look when you’re growing.
Health Benefits For SMBs: Is There A Solution?
Actually, yes. A whole new ecosystem of health benefits is arising that puts the consumer at the center. You just have to know where to look.
It starts with a savvy advisor, who will know right off the bat that you’ve got plenty of options. She should tell you about:
- Network value solutions: With these options, commercial health insurers can keep premiums low by assigning members to specific high-quality, efficient health systems.
- High-deductible consumer-directed health plans: Premiums are lower because of the high deductible, while a health savings account allows tax-advantaged saving for health expenses. Millennial workers tend to prefer this option.1
- Added benefits such as supplemental health, legal, and financial wellness: For many candidates, these voluntary benefits complete the package.
- Well-being resources: Think health advocates, health coaches, and wellness programs. These services help your employees manage their own health.
It might come as a surprise, but comprehensive benefits solutions, like Mercer Marketplace 365+, that offer all of the features above have been developed for small to mid-sized businesses, providing more options for employers and employees alike.
SMBs: Getting A Piece Of The Action
These forward-thinking benefits solutions are no longer just the domain of large employers. They’ve become a necessity for small to mid-sized businesses. In fact, 9 out of 10 employees say receiving benefits is just as important as getting paid.
Not surprisingly, more small companies are hanging onto their health benefits. In 2013, 21% were thinking of scrapping their health benefits. In 2015, that number dropped to 7%.
SMBs are also looking for more competitive benefits to live up to the expectations of employees. Among workers ages 34 and younger, 70% want the flexibility of lowering the value of some benefits while raising the value of others. One team member might prefer to sock more money into his 401(k) rather than spend it on expensive health coverage that he might not use. Another might want a premium health plan because he has a child with special needs. A wide range of employees calls for a wide selection of benefit options.
You Win Too
It’s not just employees who come out ahead with rich benefits—it’s businesses themselves. Creative benefits packages are the future competitive edge for SMBs. When you talk to your advisor, ask for a set of solutions that attract the best talent, satisfy your employees, keep your costs contained, and protect everyone’s health in the long run.
1 Murphy B. “21 Statistics on High-deductible Health Plans.” Beckers Hospital CFO (May 21, 2016), http://www.beckershospitalreview.com/finance/21-statistics-on-high-deductible-health-plans.html
Here’s an employee advocating for her own health: Before a medical appointment, she checks her health insurance to make sure the visit is covered. During the visit, she takes notes. Before the doctor writes the prescription, she asks, “Are there any generics?”
If more people had taken just that last step to use generic medications, consumers and employers could have possibly saved $25 billion -- yes, that’s billion with a B -- in out-of-pocket expenses between 2010 and 2012, the Journal of Internal Medicine reported in June 2016.
Persuading employees to be their own health advocates is a win-win-win for the employees’ health, their productivity, and the employer’s health care costs. Here are three steps to turn your employees into advocates for their own health:
- Tell employees they’re protecting themselves.
The physician may take the lead in providing medical services, but healthcare is ultimately a team sport. Because of the high potential for medical errors, patients are best positioned to play offense by asking a lot of questions and clarifying communications by all parties involved.
Medical errors may lead to serious or fatal events in 80,000 to 160,000 people per year, according to an April 2013 review of 25 years of medical malpractice claims by researchers at Johns Hopkins University. The most common errors are missed, incorrect, or delayed diagnoses.
The study underscores the importance of patients speaking up. Furthermore, seeking a second opinion results in revised diagnoses in 39% of cases, according to Advance Medical, a firm that helps patients obtain expert medical opinions.
- Point your employees to technology.
The palette of digital tools to empower employees to be their own health advocates is growing. Here are two:
About 30% of employers are encouraging the use of mobile health apps to help employees become more proactive about their health, according to Mercer’s 2015 National Survey of Employer Sponsored Health Plans. For those with chronic conditions, some apps could save up to $3,000 per patient each year, reported Health IT Outcomes in September 2014.
These tools pull back the curtain on healthcare pricing by comparing the price of specific procedures across providers in a given market. Given the wide range of prices charged for even common diagnostic services like xrays and MRIs, finding a lower-cost provider can save employees substantial out-of-pocket cost.
- Offer a “script.”
Many patients are murky about what to ask their doctors. However, questions like “What are all of my options?” can trigger alternatives that save money and have better outcomes.
The Agency for Healthcare Research and Quality lists 10 questions that can spark discussions between employees and their physicians. Consumer Reports even offers videos and brochures to help patients speak up about unnecessary tests and treatments.
Resources like these can teach your employees that self-advocacy is not only encouraged, but it’s also the key to value in healthcare -- managing cost while getting the best care.
Employers are grappling with the escalating cost of healthcare benefits. HR and finance leaders are adapting -- as are employees across the nation -- to a ‘new normal’ of narrow networks and high deductible plans. Basic coverage is increasingly augmented by voluntary benefits to meet the varied needs of employees and their families. During this ongoing transition, employees are being asked to more actively participate in the enrollment process.
This new employee empowerment shifts more responsibility of choice to the employee, who is trying to make vital health care decisions, but who, surveys confirm, feels ill equipped, alone, and confused about what the best decisions may be. So what is the way forward?
First, some surprising numbers: According to a 2015 survey by the Kaiser Foundation, nearly two-thirds of American adults say it’s difficult to find out what medical care will cost. Despite that, a mere 3% actually shopped for price among doctors and just 2% for hospitals. In fact, 57% of insured Americans are unaware that physicians charge different prices for the same care, according to Public Agenda.org.
The picture improves when we look at individuals who have easy access to information. A recent study published in the Journal of the American Medical Association (JAMA; June, 2016) found that use of a price transparency tool reached 10% of the 149,000 employees who were offered one.
Interestingly, a majority of Americans do not equate price with the quality of care. The Public Agenda results showed 71% of insured Americans say higher prices don’t necessarily deliver better quality care, while 63% conclude that lower prices are not an indicator of lower quality care. “Many may be ready to choose less expensive care. Together, these findings suggest that Americans are open to looking for better-value care,” summarized the non-profit, public issues think tank.
That’s good news as the focus for employers continues to shift toward providing employees with the tools they need to make informed decisions about their healthcare. So here are two questions to ask as organizations gear up for 2017 and beyond: Do your employees have access to good information about the cost and quality of healthcare services in their markets? And is your health and benefits platform an inviting place for them to go to find this and other future-ready benefits solutions?
Every time a big company makes the leap to a private exchange, the industry pays close attention – especially Mercer’s own Sharon Cunninghis, North American Health & Benefits Leader. In this Human Resource Executive article, Sharon shares her thoughts on private exchange trends and opportunities, including best practices for employers who are making the switch. Her advice: “Help people understand the new benefits program, how it differs from what was in place previously, the added advantages of the new program and available support services,” she says. “Secondly, make sure that there’s a good, solid project plan from an implementation perspective – technology, new administrative processes and tools.” Sharon goes on to explain why, ultimately, health and benefits solutions of the future, Mercer Marketplace 365 in particular, will be seen as a “true healthcare destination” – a comprehensive platform that goes above and beyond today’s typical private exchange, serving as a resource not just at open enrollment, but throughout the year. With 6% of large employers either already using a private exchange or planning on it for 2017 – and an additional 27% considering adoption within 5 years – this is a trend to watch.
Confronting issues around healthcare costs is a significant challenge facing today’s small- and medium-sized businesses. While you might think your size limits your options, that’s not necessarily the case.
In fact, whether or not any particular small- or medium-sized company can actually reduce its health insurance premiums while maintaining the same level of coverage depends on each entity's specific situation. But there are some general techniques that will apply to all. Here are four actionable approaches to controlling healthcare costs:
- Negotiate better
This may seem obvious. The proposal you receive for next year is not necessarily the carrier’s best and final offer. Sit down with your broker to develop a renewal, marketing and negotiation strategy. A well-planned approach will help you get the lowest possible cost and leverage everything that today’s competitive marketplace has to offer.
- Investigate turn-key health and benefits solutions
Don’t assume you have to manage everything within your company. Investigate offerings that provide a “turn-key solution” that includes more personalized health and benefits support. A benefits solution like Mercer Marketplace 365+ would take the stress out of healthcare for your employees, making them happier and healthier in more ways than one.
- Switch to individual plans
Although it’s not a common strategy, some businesses have considered an individual plan approach that eliminates the employer contribution and positions employees who qualify to take advantage of subsidies that could provide them with coverage at around $100 a month. Options for individuals exist on the public exchange as well as in the private market. Be sure to consider potential penalties under the ACA and any impact this approach may have on other important business objectives, such as the ability to attract and retain employees.
- Promote a “Culture of Health” within the office
Reward employees for taking care of themselves and living a healthy lifestyle by giving them tools to track fitness goals and introducing lifestyle initiatives. These incentives will also motivate employees to take advantage of the benefits they have, such as their annual check-up. Studies show that leaders who live and promote healthy lifestyles are successful at getting employees to do the same.
The key to controlling company healthcare costs lies in having a plan -- and putting it to work.
When faced with a diagnosis of a severe medical issue, many of us find it socially uncomfortable to appear to cast doubt on our doctors by seeking a second opinion from an independent source. It is precisely at such times that this course of action is most useful. You likely have employees facing tough medical diagnoses every day, and they may not be aware of the importance of seeking a second opinion in the face of those diagnoses.
The value of second opinions is that they will either confirm the original diagnosis or point to another conclusion that may indeed prove to be the correct one. According to Advance Medical, a firm that help patients obtain expert medical opinions:
• 39% of second opinions result in an improved diagnosis
• 60% of patients who seek a second opinion modify their treatment as a result of an improved diagnosis
Situations where it is best to consider an second opinion are typically when patients find themselves asking:
• Is my diagnosis correct?
• Is my treatment plan correct?
• Are there other options besides surgery?
• Am I progressing as expected?
• I’ve heard of “x”….would that be appropriate in my case?
• What are the underlying causes of my condition?
• What else can be done?
• Could my situation actually be something else?
• Will my condition worsen if I wait to have the recommended procedure/surgery?
Seeking a second opinion isn't about being a demanding patient; it's simply about being responsible for one’s health and well-being. It's about attaining peace of mind and putting oneself on track for the best outcome.
There are practical challenges your employees face, such as finding another doctor in network to provide a second opinion, finding the best place to receive treatment, and sharing diagnostic tests with other professionals. If you’re not currently offering a program for your employees that makes it easier to obtain a second opinion and navigate these challenges, it’s something to consider. If you do offer a program, sharing information like this with employees could be an important tool in educating them on their options.
For more information on how you can offer your employees health advocacy tools, visit www.MercerMarketplace365.com.