Top 10 health conditions costing employers the most

Conditions that impact plan costs can be problematic. Here is a look into the top 10 health conditions hitting the hardest on employers wallets.


As healthcare costs continue to rise, more employers are looking at ways to target those costs. One step they are taking is looking at what health conditions are hitting their pocketbooks the hardest.

“About half of employers use disease management programs to help manage the costs of these very expensive chronic conditions,” says Julie Stich, associate vice president of content at the International Foundation of Employee Benefits Plans. “In addition, about three in five employers use health screenings and health risk assessments to help employees identify and monitor these conditions so that they can be managed more effectively. Early identification helps the employer and the employee.”

What conditions are costly for employers to cover? In IFEPB’s Workplace Wellness Trends 2017 Survey, more than 500 employers were asked to select the top three conditions impacting plan costs. The following 10 topped the list.

10. High-risk pregnancy

Although high-risk pregnancies have seen a dip of 1% since 2015, they still bottom out the list in 2017; 5.6% of employers report these costs are a leading cost concern for health plans.

9. Smoking

Smoking has remained a consistent concern of employers over the last several years; 8.6% of employers report smoking has significant impact on health plans.

8. High cholesterol

While high cholesterol still has a major impact on health costs- 11.6% say it's a top cause of raising healthcare costs- that number is significantly lower from where it was in 2015 (19.3%).

7. Depression/ mental illness

For 13.9% of employers, mental health has a big influence on healthcare costs. This is down from 22.8% in 2015.

6. Hypertension/ high blood pressure

This is the first condition in IFEBP's report to have dropped a ranking in the last two years. In 2015, hypertension/ high blood pressure ranked 5th with 28.9% of employers reporting it is a high cost condition. In 2017, the condition dropped to 6th with 27.6% of employers noting high costs associated with the disease.

5. Heart disease

This year's study found that 28.4% of employers reported high costs associated with heart disease. In 2015, heart disease was the second highest cost driver with 37.1% of employers citing high costs from the disease.

4. Arthritis/back/musculoskeletal

Nearly three in 10 employers (28.9%) say these conditions are drivers of their health plan costs, compared to 34.5% in 2015.

3. Obesity

Obesity is still a top concern for employers, but slightly less so than it was two years ago. In 2017, 29% of employers found obesity to be a burden on health plans. In 2015, 32.45 cited obesity as a major cost driver.

2. Cancer (all kinds)

Cancer has become more expensive for employers. Now, 35.4% of employers report cancer increasing the costs of health plans, compared to 32% in 2015.

1. Diabetes

The king of raising health costs, diabetes has topped the list both in 2015 and 2017. In the most recent report, 44.3% of employers say diabetes is among the conditions impacting plan costs.

SOURCE:
Otto. N (18 June 2018) "Top 10 health conditions costing employers the most" [Web Blog Post]. Retrieved from https://www.employeebenefitadviser.com/slideshow/top-10-health-conditions-costing-employers-the-most


7 wellness program ideas you may want to steal

Need more energy and excitement in your office? Keep your employees healthy and motivated with these fun wellness program ideas.


Building your own workplace wellness program takes work–and time–but it’s worth it.

“It’s an investment we need to make,” Jennifer Bartlett, HR director at Griffin Communication, told a group of benefits managers during a session at the Human Resource Executive Health and Benefits Leadership Conference. “We want [employees] to be healthy and happy, and if they’re healthy and happy they’ll be more productive.”

Bartlett shared her experiences building, and (continually) tweaking, a wellness program at her company–a multimedia company running TV outlets across Oklahoma –over the last seven years. “If there was a contest or challenge we’ve done it,” she said, noting there have been some failed ventures.

“We got into wellness because we wanted to reduce health costs, but that’s not why we do it today,” she said. “We do it today because employees like it and it increases morale and engagement.”

Though Griffin Communication's wellness program is extensive and covers more than this list, here are some components of it that's working out well that your company might want to steal:

  1. Fitbit challenge. Yes, fit bits can make a difference, Bartlett said. The way she implemented a program was to have a handful of goals and different levels as not everyone is at the same pace-some might walk 20,000 steps in a day, while someone else might strive for 5,000. There are also competition and rewards attached. At Griffin Communications, the company purchased a number of Fitbits, then sold them to its employees for half the cost.
  2. Race entry. Griffin tries to get its employees moving by being supportive of their fitness goals. If an employee wants to participate in a race-whether walking or running a 5k or even a marathon, it will reimburse them up to $50 one time.
  3. Wellness pantry. This idea, Bartlett said, was "more popular than I ever could have imagined." Bartlett stocks up the fridge and pantry in the company's kitchen with healthy food options. Employees then pay whole sale the price of the food, so it's a cheap option for them to instead of hitting the vending machine. "Employees can pay 25 cents for a bottled water or $1.50 for a soda from the machine."
  4. Gym membership. "We don't have an onsite workout facility, but we offer 50 percent reimbursement of (employees') gym membership cost up to a max of 200 per year," she said. The company also reimburses employees for fitness classes, such as yoga.
  5. Biggest Loser contest. Though this contest isn't always popular among companies, a Biggest Loser-type competition- in which employees compete to lose the most weight-worked out well at Griffin. Plus, Bartlett said, "this doesn't cost us anything because the employee buys in $10 to do it." She also insisted the company is sensitive to employees. For example, they only share percentages of weight loss instead of sharing how much each worker weights.
  6. "Project Zero" contest. This is a program pretty much everyone can use: Its aim is to avoid gaining the dreaded holiday wights. The contest runs from early to mid- November through the first of the year. "Participants will weigh in the first and last day of the contest," Bartlett said. "The goal is to not gain weight during the holidays-we're not trying to get people to lose weight but we're just to not get them to not eat that third piece of pie."
  7. Corporate challenges. Nothing both builds camaraderie and encourages fitness like a team sports or company field day. Bartlett said that employees have basically taken this idea and run with it themselves- coming up with fun ideas throughout the year.

SOURCE:
Mayer K (14 June 2018) "7 wellness program ideas you may want to steal" [Web Blog Post]. Retrieved from https://www.benefitspro.com/2015/10/10/7-wellness-program-ideas-you-may-want-to-steal/


Will Amazon-Berkshire-JPMorgan coalition kickstart a benefits revolution?

What will happen if the Amazon-Berkshire-JPMorgan coalition becomes a real thing? Find out in this article from Employee Benefit Advisor.


The announcement that Amazon, Berkshire Hathaway and JPMorgan Chase would form an independent healthcare company for their U.S. employees is just one more move in a growing, albeit relatively quiet, revolution inside the benefits industry: Employers banding together for more control over a health system they see as wasteful and inefficient.

Employee medical expenditures have been the driving factor behind these moves. Last year, premiums for employer-sponsored family coverage hit $18,764, up 3% from the previous year, with employees paying an average $5,714 toward the cost, according to the Kaiser Family Foundation.

Frustration with those costs — and the lack of quality that often goes along with them — has resulted in a number of employer initiatives. But the news of the three corporate behemoths’ coalition may propel even more employers to band together, looking for alternatives on how they provide coverage while driving transparency in an industry notorious for obfuscation.

While it didn’t make the same splash as the big three’s news, two years ago 20 of the country’s biggest companies, including American Express, Berkshire’s BNSF Railway, Caterpillar, Coca-Cola, du Pont, IBM, Ingersoll Rand, Marriott and Verizon, joined together to form the Health Transformation Alliance. The goal of the group is to use data analytics, collective leverage and shared expertise to lower costs for all members. The group has grown to almost 40 members.

And at about the same time, health and financial consulting firm Mercer started running employer collectives to help companies save on pharmacy costs. There also are individual efforts. Intel, notes American Benefits Council president James Klein, has been a leader in direct contracting with healthcare providers.

“When large and successful companies come together in this way, it’s potentially disruptive,” says Frank Easley, senior vice president of Aon’s health and benefits group, about the Amazon, Berkshire and JPMorgan partnership. “The healthcare system is ripe for positive disruption and is in need of new solutions that improve employee satisfaction and reduce costs.”

While the three giants did not detail what their new company would do, they did say in a statement that the entity’s focus will be on technology that will provide employees and their families with “simplified, high-quality and transparent healthcare at a reasonable cost.”

The collaboration will likely pressure profits for middlemen in the healthcare supply chain. Potential ways to bring down costs include providing more transparency in prices for doctor visits and lab tests, and by enabling direct purchasing of some medical items, a person familiar with the companies’ plans said.

Efforts to increase transparency have been an important focus for employers of late and have “enormous potential” when it comes to transforming employer healthcare, says benefits consultant Jack Kwicien. If employers can explain to employees how and where their healthcare dollars are going, it will not only give workers a better understanding of their own money, but it has the potential to build a better relationship between employer and employee.

In addition, Amazon’s e-commerce operation could be used to send medication direct to patient’s homes, saving them trips to a pharmacy. Its cloud-computing division can store patient healthcare records so they can be easily accessed by doctors anywhere. And its payments system could be used to automate payments with healthcare providers.

If Amazon, Berkshire and JPMorgan are successful in lowering costs, the weight of the big three might kick the transformation engine into high gear, leading to a dramatic shift in the benefits delivery as more employers look to use combined leverage to lower their health costs.

“Any time organizations of this caliber — these are world class organizations — say they are going to tackle healthcare, you have to pay attention,” says Mike Thompson, president and CEO of the National Alliance of Healthcare Purchaser Coalitions. The organization advises around 12,000 organizations that buy health plans for millions of employees.

Thompson says that given Amazon and Berkshire’s records, it’s clear “that they have the potential to truly change the consumer experience for their employees, and frankly, that could become a model that could be used by other employers.”

Some benefits insiders, however, express doubts that the three behemoths will spur a widespread industry disruption. Their two biggest doubts: that corporate America can successfully battle the nation’s largest healthcare players and, even if successful, if they can cut costs in a meaningful way.

“Most health costs are incurred by a small percent of the population with chronic conditions,” Klein says. “So if this initiative is just about how health costs are paid for, and does not promote ways to improve health itself, the impact will be minimal.”

Still, business groups say the potential is there for more employer involvement in controlling costs and delivering healthcare, and the need is real.

“New entrants with fresh approaches like these may be just the prescription our ailing healthcare system needs,” says Brian Marcotte, CEO of the National Business Group on Health. “The collective resources of these three companies, emerging technologies and Amazon’s customer obsession and supply-chain savvy gives me optimism that they will pursue a consumer-focused model that will transcend the fragmented, provider-centric delivery system that we have today.”

Read more.

SOURCE:
Mayer K. (31 January 2018). "Will Amazon-Berkshire-JPMorgan coalition kickstart a benefitsrevolution?" [Web Blog Post]. Retrieved from address https://www.employeebenefitadviser.com/news/will-amazon-berkshire-jpmorgan-coalition-kickstart-a-benefits-revolution?feed=00000152-175f-d933-a573-ff5f3f230000

2016 Election Results: The Potential Impact on Health and Welfare Benefits

If you missed our partner,United Benefit Advisors (UBA) checkout this article by Les McPhearson

Following the November 2016 election, Donald Trump (R) will be sworn in as the next President of the United States on January 20, 2017. The Republicans will also have the majority in the Senate (51 Republican, 47 Democrat) and in the House of Representatives (238 Republicans, 191 Democrat). As a result, the political atmosphere is favorable for the Trump Administration to begin implementing its healthcare policy objectives. Representative Paul Ryan (R-Wis.) will likely remain the Speaker of the House. Known as an individual who is experienced in policy, it is expected that the Republican House will work to pass legislation that follows the health care policies in Speaker Ryan's "A Better Way" proposals. The success of any of these proposals remains to be seen.

Employers should be aware of the main tenets of President-elect Trump's proposals, as well as the policies outlined in Speaker Ryan's white paper. These proposals are likely to have an impact on employer sponsored health and welfare benefits. Repeal of the Patient Protection and Affordable Care Act (ACA) and capping the employer-sponsored insurance (ESI) exclusion for individuals would have a significant effect on employer sponsored group health plans.

Trump Policy Proposals

President-elect Trump's policy initiatives have seven main components:

  • Repeal the ACA. President-elect Trump has vowed to completely repeal the ACA as his first order of Presidential business.
  • Allow health insurance to be purchased across state lines.
  • Allow individuals to fully deduct health insurance premium payments from their tax returns.
  • Allow individuals to use health savings accounts (HSAs) in a more robust way than regulation currently allows. President-elect Trump's proposal specifically mentions allowing HSAs to be part of an individual's estate and allowing HSA funds to be spent by any member of the account owner's family.
  • Require price transparency from all healthcare providers.
  • Block-grant Medicaid to the states. This would remove federal provisions on how Medicaid dollars can and should be spent by the states.
  • Remove barriers to entry into the free market for the pharmaceutical industry. This includes allowing American consumers access to imported drugs.

President-elect Trump's proposal also notes that his immigration reform proposals would assist in lowering healthcare costs, due to the current amount of spending on healthcare for illegal immigrants. His proposal also states that the mental health programs and institutions in the United States are in need of reform, and that by providing more jobs to Americans we will reduce the reliance of Medicaid and the Children's Health Insurance Program (CHIP).

Speaker Ryan's "A Better Way" Proposal

In June 2016, Speaker Ryan released a series of white papers on national issues under the banner "A Better Way." With Republican control of the House and Senate, it would be plausible that elected officials will begin working to implement some, if not all, of the ideas proposed. The core tenants of Speaker Ryan's proposal are:

  • Repeal the ACA in full.
  • Expand consumer choice through consumer-directed health care. Speaker Ryan's proposal includes specific means for this expansion, namely by allowing spouses to make catch-up contributions to HSA accounts, allow qualified medical expenses incurred up to 60 days prior to the HSA-qualified coverage began to be reimbursed, set the maximum contribution of HSA accounts at the maximum combined and allowed annual high deductible health plan (HDHP) deductible and out-of-pocket expenses limits, and expand HSA access for groups such as those with TRICARE coverage. The proposal also recommends allowing individuals to use employer provided health reimbursement account (HRA) funds to purchase individual coverage.
  • Support portable coverage. Speaker Ryan supports access to financial support for an insurance plan chosen by an individual through an advanceable, refundable tax credit for individuals and families, available at the beginning of every month and adjusted for age. The credit would be available to those without job-based coverage, Medicare, or Medicaid. It would be large enough to purchase a pre-ACA insurance policy. If the individual selected a plan that cost less than the financial support, the difference would be deposited into an "HSA-like" account and used toward other health care expenses.
  • Cap the employer-sponsored insurance (ESI) exclusion for individuals. Speaker Ryan's proposal argues that the ESI exclusion raises premiums for employer-based coverage by 10 to 15 percent and holds down wages as workers substitute tax-free benefits for taxable income. Employee contributions to HSAs would not count toward the cost of coverage on the ESI cap.
  • Allow health insurance to be purchased across state lines.
  • Allow small businesses to band together an offer "association health plans" or AHPs. This would allow alumni organizations, trade associations, and other groups to pool together and improve bargaining power.
  • Preserve employer wellness programs. Speaker Ryan's proposal would limit the Equal Employment Opportunity Commission (EEOC) oversight over wellness programs by finding that voluntary wellness programs do not violate the Americans with Disabilities Act of 1990 (ADA) and the collection of information would not violate the Genetic Information Nondiscrimination Act of 2008 (GINA).
  • Ensure self-insured employer sponsored group health coverage has robust access to stop-loss coverage by ensuring stop-loss coverage is not classified as group health insurance. This provision would also remove the ACA's Cadillac tax.
  • Enact medical liability reform by implementing caps on non-economic damages in medical malpractice lawsuits and limiting contingency fees charged by plaintiff's attorneys.
  • Address competition in insurance markets by charging the Government Accountability Office (GAO) to study the advantages and disadvantages of removing the limited McCarran-Ferguson antitrust exemption for health insurance carriers to increase competition and lower prices. The exemption allows insurers to pool historic loss information so they can project future losses and jointly develop policy.
  • Provide for patient protections by continuing pre-existing condition protections, allow dependents to stay on their parents' plans until age 26, continue the prohibitions on rescissions of coverage, allow cost limitations on older Americans' plans to be based on a five to one ratio (currently the ratio is three to one under the ACA), provide for state innovation grants, and dedicate funding to high risk pools.

Speaker Ryan's white paper also addresses more robust protection of life by enforcing the Hyde Amendment (which prohibits federal taxpayer dollars from being used to pay for abortion or abortion coverage) and improved conscience protections for health care providers by enacting and expanding theWeldon Amendment.

Speaker Ryan also proposes other initiatives including robust Medicaid reforms, strengthening Medicare Advantage, repealing the Independent Payment Advisory Board (IPAB) that was once referred to as "death panels," combine Medicare Part A and Part B, repealing the ban on physician-owned hospitals, and repealing the "Bay State Boondoggle."

Process of Repeal

Generally speaking, the process of repealing a law is the same as creating a law. A repeal can be a simple repeal, or legislators can try to pass legislation to repeal and replace. Bills can begin in the House of Representatives, and if passed by the House, they are referred to the Senate. If it passes the Senate, it is sent to the President for signature or veto. Bills that begin in the Senate and pass the Senate are sent to the House of Representatives, which can pass (and if they wish, amend) the bill. If the Senate agrees with the bill as it is received from the House, or after conference with the House regarding amendments, they enroll the bill and it is sent to the White House for signature or veto.

Although Republicans hold the majority in the Senate, they do not have enough party votes to allow them to overcome a potential filibuster. A filibuster is when debate over a proposed piece of legislation is extended, allowing a delay or completely preventing the legislation from coming to a vote. Filibusters can continue until "three-fifths of the Senators duly chosen and sworn" close the debate by invoking cloture, or a parliamentary procedure that brings a debate to an end. Three-fifths of the Senate is 60 votes.

There is potential to dismantle the ACA by using a budget tool known as reconciliation, which cannot be filibustered. If Congress can draft a reconciliation bill that meets the complex requirements of our budget rules, it would only need a simple majority of the Senate (51 votes) to pass.

Neither President-elect Trump nor Speaker Ryan has given any indication as to whether a full repeal, or a repeal and replace, would be their preferred method of action.

The viability of any of these initiatives remains to be seen, but with a Republican President and a Republican-controlled House and Senate, if lawmakers are able to reach agreeable terms across the executive and legislative branches, some level of change is to be expected.

See the original article Here.

Source:

McPhearson L.(2016 November 14). 2016 election results: the potential impact on health and welfare benefits [Web blog post]. Retrieved from address http://blog.ubabenefits.com/2016-election-results-the-potential-impact-on-health-and-welfare-benefits


UBA Special Report: 2016 Trends in Employer Wellness Programs

Great article from our partner, United Benefit Advisors (UBA) by Jason Reeves

The latest round of regulations in the area of wellness (what employers can and can’t do) is proving to be a hotly contested topic. Employers are eager to offer incentives as a way to both encourage wellness and also lower health care costs. However, employee privacy is on the line, and some argue, at risk. Even though many employers may never see the data collected, there is a philosophical debate brewing about what should – or should not – be permitted.

According to UBA’s new free special report, “2016 Trends in Employer Wellness Programs,” 67.7 percent of employers who offer wellness programs have incentives built into the program, an increase of 8.5 percent from four years ago. Major lawsuits are pending against employers with particularly robust wellness programs and the regulatory environment is becoming increasingly restrictive. As a result, employers are continuing to pursue wellness programs, but they are being very cautious with program design, avoiding implementing high penalty and incentive programs.

Incentives are the most prevalent in the Central U.S. (76.1 percent), among employers with 500 to 999 employees (83.2 percent), and in the finance, insurance, and real estate industries (74.7 percent). Last year, employers in the Southeast were the regional leaders in wellness incentives (75.9 percent), growing 24 percent since 2012. But this year, prevalence of incentives dropped more than 17 percent in just one year, perhaps indicating regional caution amid the uncertain regulatory environment. The West offers the fewest incentives, with only 48.3 percent of their plans having rewards.

Across all employers, slightly more (45.4 percent) prefer wellness incentives in the form of cash toward premiums, 401(k)s, flexible spending accounts (FSAs), etc., versus health club dues and gift cards (40 percent). But among larger employers (500 to 1,000+ employees) cash incentives are more heavily preferred (63.2 percent) over gift certificates and health club dues (33.7 percent). Conversely, smaller employers (1 to 99 employees) prefer health club-related incentives (nearly 40 percent) versus cash (25 percent).

The smallest employers (fewer than 25 employees) have seen significant shifts in wellness incentive design over time. Prior to 2016, health club incentives were on the decline and cash incentives had been increasing 80 percent since 2012. But 2016 shows a dramatic pendulum shift from 36 percent of plans featuring cash incentives in 2015, to only 16.2 percent of plans offering this design in 2016.

 

Also, dramatically shifting away from cash incentives are construction, agriculture, mining, and transportation employers (going from 63.8 percent in 2015 to 48.4 percent in 2016). The finance, insurance, and real estate industries offer the most health club-related incentives (50.0 percent).

Southeast employers, on the other hand, are shifting away from health club-related incentives to cash toward premiums, 401(k)s, and FSAs with nearly a 60 percent increase in this type of incentive (going from 47.1 percent to 74.7 percent over four years).

Offering paid time off (PTO), historically a seldom-offered wellness incentive, is becoming rarer with 4.5 percent of employers offering this incentive, nearly a 20 percent decrease from four years ago. The majority of these PTO-based wellness incentives are seen in the Southeast U.S. (13.1 percent – a nearly 50 percent increase from 2015) and within the finance, insurance, and real estate industries (10.6 percent).

Employers are beginning to use the regulations proposed by the Equal Employment Opportunity Commission (EEOC) as their guidelines for program development, and the wellness guide provided by the Patient Protection and Affordable Care Act (ACA) have re-empowered employers to implement premium differentials for wellness participation and cessation of tobacco use. However, many are likely wary of the EEOC’s new guidance regarding wellness programs that include health risk assessments, biometric screenings, and medical exams. How those regulations influence plan design remains to be seen.

Read our breaking news about UBA’s new wellness special report.

Download our free (no form!) special report, “2016 Trends in Employer Wellness Programs,” for more information on regional, industry and group size based trends surrounding prevalence of wellness programs, carrier vs. independent providers, and wellness program components.

For complete findings within the 2016 UBA Health Plan Survey, download UBA’s 2016 Health Plan Survey Executive Summary.

For comprehensive information on designing wellness programs that create lasting change, download UBA’s whitepaper: “Wellness Programs — Good for You & Good for Your Organization”.

To understand legal requirements for wellness programs, request UBA’s ACA Advisor, “Understanding Wellness Programs and Their Legal Requirements,” which reviews the five most critical questions that wellness program sponsors should ask and work through to determine the obligations of their wellness program under the ACA, HIPAA, ADA, GINA, and ERISA, as well as considerations for wellness programs that involve tobacco use in any way.

See the original article Here.

Source:

Reeves J.(2016 November 18). UBA special report: 2016 trends employer wellness programs[Web blog post]. Retrieved from address http://blog.ubabenefits.com/uba-special-report-2016-trends-in-employer-wellness-programs


UBA Survey: Grandmothering Protects Many Small Employers from Rate Increases

Intriguing article from our partners, United Benefit Advisors (UBA) by Mary Drueke-Collins

One goal of the Affordable Care Act (ACA) was to develop uniformity in coverage to ensure that all medical coverage included certain services. However, two interim regulations were passed, essentially allowing individuals and employers to keep their plans that were not completely ACA-compliant. Those regulations were termed “grandfathering” and “grandmothering.” Grandfathering was available to all employers that wanted to keep the plans they had in place prior to the passage of the ACA. For a plan to maintain grandfathered status, there were significant restrictions to plan design modifications and changes to employee contributions. The reality was that very few employers were able to maintain grandfathered status. In the 2016 UBA Health Plan Survey, only 5.9 percent of plans were still grandfathered.

Grandmothering was a little easier process. In March 2014, the Department of Health and Human Services released a transitional ruling that allowed small employers (employers with fewer than 50 employees) to keep their pre-ACA plan. This new transition relief was termed “grandmothering.” Each state had the opportunity to decide if it would allow the transitional relief in that state. Further, each insurance company was also allowed the decision to participate. Only 35 states eventually allowed the transitional relief and even fewer insurance companies consented to let employers to keep their pre-ACA plans. Still 8.1 percent of the plans in the 2016 UBA Health Plan Survey are grandmothered plans, down from 17 percent in 2015.

As a result, a number of small employers in certain states have the luxury of being able to choose between their current non-ACA compliant plans (grandmothered plans) and the ACA community rated plans. For a limited time, these employers have the best of both worlds – being able to choose the rating structure that best fits the demographics of their group. Generally, pre-ACA plans are composite rated and based on the health status of the group, meaning a group with more health claims will pay a higher rate than a similarly situated healthy group. ACA-compliant plans are age-based and community rated, meaning the rates do not rely on the specific health status of each group – two groups with the same demographic make-up will pay the same rate, even if one is healthy and one is unhealthy. ACA-compliant community rating also limits the ratio between the rate for the oldest individual and the youngest individual. Pre-ACA plans allowed a much larger difference. In effect, the rate of the younger individual is higher under an ACA-compliant plan to account for the new ACA restrictions.

For those employers in the states and covered by the insurance companies choosing to participate in the transitional relief, a new method of maintaining lower health insurance premiums arose. As long as a group has maintained grandmother status, each year at renewal the group has the choice to keep its pre-ACA plans or move to an ACA community rated plan. Once an employer moves to an ACA community rated plan, it cannot move back to the pre-ACA plan.

A small employer with younger, healthier employees benefits from staying on the grandmothered plan because the rates are based on the health status of the group and the rate structure favors younger employees. Conversely, a small employer with an older group and whose employees are experiencing more health claims would benefit by moving to an ACA-compliant plan where the rates are community rated.

We saw the true effect of this in the results from the 2016 UBA Health Plan Survey – when you compare the average monthly premium for single coverage over the last two years, the smallest employers (those with fewer than 25 employees) are actually paying 4.1 percent less on average, going from $540 in 2015 to $518 in 2016.

The window for this cost saving method is quickly closing, as the grandmothering provision expires in December 2017. By the end of 2017, we will see the full effect of the ACA on these small employers.

See the original article Here.

Source:

Drueke-Collins, M. (2016 November 10). UBA survey: grandmothering protects many small employers from rate increases [Web blog post]. Retrieved from address http://blog.ubabenefits.com/uba-survey-grandmothering-protects-many-small-employers-from-rate-increases


Impact of Telemedicine on HSA Eligibility

One of the hottest benefit trends in 2016 is the adoption of free or low cost “telemedicine” programs to provide employees easy and affordable access to medical care. However, employers adopting these programs alongside high deductible health plans (HDHPs) need to be sure that they do not inadvertently disqualify the covered employees from eligibility for a health savings account (HSA).

The term “telemedicine” generally refers to healthrelated services delivered over the telephone or internet to employees and covers services ranging from non-specific wellness information about health conditions to primary care diagnosis and advice with prescription drug services. The employee’s cost for such services also varies and may consist of a charge on a “per-use” basis, or a monthly or annual fee for access. In many cases, employers are subsidizing the cost of the services or offering the services free of charge to encourage usage, which could create issues for employees with HSA coverage.

An HSA allows participants to defer compensation on a pre-tax basis for the purpose of paying eligible medical expenses if the participant is covered under an HDHP. In addition, the HSA participant must not be covered under any “disqualifying coverage.” Disqualifying coverage includes any health coverage that provides a benefit before the HDHP deductible is met and is often referred to as “first dollar coverage.” The IRS rules allow an exception from the first dollar coverage prohibition for certain types of coverage, including “permitted insurance” (for example, workers’ compensation, specified disease or illness insurance, per diem hospital benefits), “excepted benefits” (such as stand-alone dental or vision benefits), preventative care services, certain employee assistance programs (EAPs), and discount card programs allowing employees to receive discounted health services at managed care rates if the employee must pay for the balance until the HDHP deductible is met. Telemedicine programs that fall under one of the above categories will not prevent an individual from contributing to an HSA.

However, many telemedicine programs go beyond providing preventative care or EAP benefits and do not fall within the permitted insurance or excepted benefits categories. Thus, a telemedicine benefit could count as disqualifying coverage, for example, if the employer pays a portion of the cost of a telemedicine consultation, or the participant pays less than fair market value for access to the consultation, before meeting the HDHP deductible. Any telemedicine program providing primary care or prescription drug services in particular would likely trigger IRS scrutiny unless the employer can establish that the cost passed on to participants is the fair market value for the services. Although the IRS has not yet weighed in on the impact of telemedicine programs on HSA benefits, employers that sponsor HDHPs and telemedicine programs should consider the risks of potential HSA disqualification with legal counsel to ensure employees are not subjected to unintended income and excise taxes for participating in disqualifying coverage.

Content included in the Summer 2016 Benefits and Employment Briefing provided by our partner, United Benefit Advisors