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Mercer

In light of the recent US Supreme Court decision in Obergefell v. Hodges legalizing same-sex marriage nationwide, employers should consider the following implications for benefit plans and employment policies:

 

  • Revisit your definition of “spouse.” Make sure the definition covers same-sex spouses in plan documents, insurance policies, trust and service agreements, beneficiary forms, required notices, and employment policies.
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Much of the pressure driving up pharmacy benefit cost comes from specialty drugs. While some new drugs represent important breakthroughs in the treatment of complex diseases, the spike in the specialty drug cost trend rightfully has employers looking for creative strategies to manage cost growth.

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Consumer-directed health plans were created based on the premise that people need to have “skin in the game” to be smart consumers and that we spend our own money more carefully than we spend someone else’s money. That is all true — provided you know what you need to buy and have a way to shop for it. But buying health care is not as easy as shopping for a new dishwasher, a flat-screen TV, or an automobile.

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There’s been an ongoing debate since reform was first enacted about the possible merits of employers eventually exiting health care benefits altogether and moving employees en masse into the public marketplace. Stirring the pot most recently is financial industry research firm S&P Capital IQ, which estimates that by 2020 — just five years from now — 90% of American workers who currently receive health insurance through their employers will be shifted to government exchanges. S&P authors cite rosy bottom lines, trickle-down increases in employee pay and benefits, and the lure of federal subsidies for low-wage workers as the impetus for the grand exodus.

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A few weeks ago, we provided a list of five considerations for open enrollment regarding Affordable Care Act (ACA) compliance, focused on avoiding shared responsibility payments, imbedding deductibles in out-of-pocket limits, and complying with the new ACA reporting requirements. Today’s list addresses some requirements that expand beyond the ACA — including a few items you’ve probably checked off your list but might need to look at again because of recent guidance.

 

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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.

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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.

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Has your CEO or CFO ever asked you, “What is the ROI for investing in wellness programs?" Most attempts to quantify ROI have focused on estimates of health care costs avoided and/or improved worker productivity, which are sometimes hard to determine. But there is evidence of both for well-designed and well-implemented health and well-being programs.

 

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The Commonwealth Fund released findings from its Health Care Affordability Tracking Survey, which focused on those with private insurance between the ages of 16 and 64. The primary finding was that three out of five privately insured adults with low incomes, and half of those with moderate incomes, reported that their deductibles are difficult to afford. The survey also found that some individuals delayed or avoided care as a result.

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Taking the approach "measure it and it will improve," The Vitality Institute is calling on companies to begin reporting employee health metrics the same way they report earnings -- with the goal of reducing the incidence of non-communicable diseases (such as cancer, diabetes, and cardiovascular disease) in the US workforce. The Institute assembled a commission including representatives from major corporations, the health care industry, and academia to make recommendations. In a report issued last week, they estimate that if employers got serious about improving the health of their employees, improved productivity and reduced health spending could be worth $300 billion annually. While the commission is thinking big, employers can take a small but important step on the road to measurement by completing the HERO Employee Health Management Best Practices Scorecard, an online inventory of just about everything employers are doing today to improve workforce health. Mercer collaborates with the nonprofit Health Enhancement Research Organization to offer the online Scorecard free of charge to all employers -- you can access it here. It has just been updated with current best practices and a set of easy-to-use metrics for measuring program outcomes. Upon submitting the completed Scorecard, you'll receive a reply e-mail with your organization's best practice score compared to national averages. Over 1,200 employers have used the Scorecard since it was first launched in 2009.

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Critical illness coverage is becoming increasingly important as medical benefit offerings become leaner and enrollment in high-deductible health plans rises. Our National Survey of Employer-Sponsored Health Plans found that 45% of employers with 500 or more workers now offer critical illness coverage as a voluntary benefit for their employees. As Mercer’s Barry Schilmeister describes in this recent Kaiser Health News article, “More employers are looking at the reality of pulling back on the value of health plans but looking to offer something else that would make people feel a little more comfortable about taking on that additional risk.” Critical illness coverage, which typically provides a lump sum payment for certain diagnoses such as cancer, heart attack, stroke, kidney failure as well as major organ transplants, can help fill a coverage gap for employees.

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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.

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