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.
Raise your hand if you’ve recently had a thoroughly positive conversation about healthcare in America, like one where people were smiling and talking about how great it is. No one mentioned the soaring costs, 3-minute doctor visits, confusing bills, or any other negative experience.
Right, thought so. As an employer, you may be asking yourself what can you do about it besides offer the best healthcare benefits you can.
But the truth is, employers are pivotal players in today’s healthcare system. Nearly two-thirds of all health coverage is employer-provided, which translates into a nearly one trillion dollar annual spend. Your purchasing power has clout.
Here are 4 ways companies like yours can help reshape the health benefits market in the years ahead.
- Pay For Value, Not Volume.
Value-based care is a term used to describe a number of strategies for reducing unnecessary care and encouraging the practice of evidence-based medicine by changing incentives for providers and patients. These include accountable care organizations, patient-centered medical homes and other types of narrow networks.
Studies point to the large degree of waste in the medical system, and as employers look at ways to flatten the medical trend curve, eliminating waste seems a logical place to start. Comparing utilization and claims data from a given market with national averages will reveal issues that can be addressed with value-based care strategies:
- Underuse: Is there too little preventative care, such as cholesterol and cancer screenings?
- Misuse: Are there too many complications following hospital stays, and a high re-admission rate?
- Overuse: Are there high numbers of procedures, such as knee and hip replacements, that may not always be necessary?
Value-based care can and should address these issues, improving the quality of care as it reduces unnecessary cost. But it also has certain entry costs for employers, such as care coordination fees and shared savings bonuses. All major carriers have agreements with value-based care providers, and if you’re self-funded, you’re likely already paying these added costs. To make sure you’re getting the greatest benefit, ask your carrier to be transparent about what you’re paying and what you’re saving.
- Join The Drive To Better Quality.
Quality means providers are delivering the right care at the right time in the right setting, error-free. It seems obvious, but the American healthcare system is still moving toward that goal.
Medical errors seriously injure or kill hundreds of thousands of Americans every year. And analysts estimate 34% of U.S. healthcare spending is wasted on things like inefficiency, unnecessary procedures, and the cost of treating medical injuries that could have been avoided.
How can you help turn this around? Make sure your providers are delivering quality data at least annually. If their numbers don’t thrill you, you can:
- Switch insurance carriers, or tie your contracts to higher-quality outcomes.
- Structure your insurance plans in a way that encourages your employees to seek out the higher-quality providers in your network.
- Personalize the Experience.
New technology is on your side in the challenge to engage employees in caring for their health. Here’s one example. Let’s say you discovered that 30% of your employees are smokers, and of those, most are between 20 and 30. Your smoking cessation program should offer:
- a sleek digital interface
- a buffet of online tools
- high-touch counselors who email and text
- rewards that appeal to Millennials, like gift cards
This kind of thinking can apply to medical providers, gyms, massage therapists—any business that provides healthcare to your employees. Hold your vendors accountable for achieving high patient satisfaction rates. Your employees are their customers.
- Embrace Disruption.
As an employer, you’re in a position to inject change into the healthcare system. Don’t be afraid to do it, even if it creates short-term disruption. Those quality goals you demand could be surprisingly effective, even if it means you switch to new wellness programs, providers—or even insurance companies.
Keep tabs on your vendors to ensure they’re producing outcomes that align with your company’s objectives. Define your expectations, and agree to a cadence for measurement and reporting.
If you have a weight loss program, for example, expect that a certain percentage of your employees will actually drop some body weight. As any physician will tell you, even small changes on the scale can produce major health improvements.
Four Strategies, Multiple Benefits
A healthier workforce means more productivity and better engagement overall. Your company, and your workforce, has everything to gain when you help lead the transformation of the healthcare sector. The bottom line—choose health partners that produce results. The expectation can create the reality.
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.