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"unvaccinated
Uncategorized

Employers Mull Higher Health Plan Cost-Sharing for Unvaccinated Staff

by Inoventive Solutions
August 24, 2021

Some employers are considering a new incentive for their workers to get vaccinated against COVID-19: Charging them higher health insurance premiums if they don’t.

A recent brief from consulting firm Mercer reported that employers are looking at surcharging the health insurance premiums for employees who refuse vaccination for reasons other than disability or sincere religious belief. Many employers apply similar surcharges for employees who use tobacco.

The news comes as the Delta variant of the coronavirus that causes COVID-19 has sent infection rates soaring, with reports indicating that most new cases are occurring in people who have not been inoculated.

Employers may choose this option for a simple reason: The large costs of hospital stays and treatments for COVID-19 patients. When health plans incur large claim costs, they must either accept lower profits or make up the difference by spreading the costs among plan participants. Charging higher premiums penalizes vaccinated and unvaccinated employees alike.

The U.S. Equal Employment Opportunity Commission has said that it is permissible for employers to require workers to be vaccinated. However, many employers have been hesitant to take that step, fearing negative employee reactions, waves of resignations and bad publicity.

Freedom of choice

Surcharging insurance premiums for unvaccinated workers may be an appealing alternative for some employers. Rather than ordering employees to get vaccinated, they would leave them free to choose.

Those who would rather bear higher costs as a consequence of refusing a vaccine would be free to make that choice. In turn, vaccinated employees would not have to subsidize the health care costs of colleagues who make riskier decisions.

A Mercer spokesperson has estimated that any surcharges would be in the range of $500 to $1,300 per year.

Extra costs like that might induce reluctant workers to get the shots. If unvaccinated employees decide to get vaccinated in order to avoid a surcharge, the workplace should be safer and more productive. Absenteeism due to illness can negatively impact productivity.

The takeaway

Employers need to consider the following before implementing surcharges:

  • The EEOC has provided guidelines for employers wishing to offer vaccine incentives. Employers should stay within those guidelines.
  • Are the incentives necessary? They might not be in areas or workplaces where vaccination rates are already high.
  • The line between “encouraging” and “coercing” employees to get vaccinated is not well-defined. Employers should avoid imposing surcharges that could be viewed as coercive.
  • Some employees have pre-existing health conditions that make the vaccinations unsafe. Others seriously practice religions that forbid their use. Federal law requires employers to accommodate these workers.
"critical
Uncategorized

Deductibles Shift Drives Interest in Critical Illness Cover

by Inoventive Solutions
August 17, 2021

If you want to provide your employees with the one voluntary benefit that can give them peace of mind should tragedy strike, critical illness coverage is the answer.

Demand has grown for critical illness insurance over the last year thanks to the pandemic and as a result of employees taking on more of the cost burden in their employer-sponsored health plans.

According to the Kaiser Family Foundation’s “20120 Employer Health Benefits Survey,” the average deductible for self-only plans of all types was $1,644 in 2020, up from $917 a decade earlier.  And many employees have deductibles upwards of $6,000 if they are in certain high-deductible health plans, which have become increasingly common.

As a result, many employers have begun enhancing their voluntary benefits offerings to include critical illness or cancer coverage to help offset the risk for employees and increase satisfaction and retention.

Interest grows

In part, employee interest in critical illness insurance stems from the chain of events that may have cut back their benefits and caused their deductibles to skyrocket. They are looking for peace of mind should they be stricken by a serious illness.

In addition, advances in medicine and technology that have prolonged life also make critical illness coverage more attractive. 

Finally, the COVID-19 pandemic put into sharp focus just how quickly someone can be sidelined by a sudden and serious illness.

Consider that out-of-pocket costs for treating a critical illness can start at around $15,000 and climb from there, and that lost income can be as much as $60,600, according to a 2020 MetLife study.

In other words, battling a critical illness could be just the tip of the iceberg. If someone’s lucky enough to survive a critical illness, they may still suffer major financial damage due to high medical bills and restricted income. 

To stave off debt, some people dip into, or deplete, their retirement savings and end up paying extra due to resulting taxes, fees and reduced health insurance subsidies. 

However, other adults don’t even have enough, or near enough, of a nest egg saved to cover all the costs.

Enter critical illness coverage

Critical illness coverage provides a lump-sum payment that a policyholder can use for any expense if they’ve been diagnosed with a serious illness. 

Mostly, this insurance only pays out for one occurrence of a listed condition. And once that payment is made, the policy is terminated.

But insurers have started offering policies that cover a wider variety of conditions and allow beneficiaries to receive multiple payouts if they suffer from a reoccurrence or another condition entirely.

As a result, more employers are offering voluntary critical illness coverage. According to Mercer’s “2020 National Survey of Employer-Sponsored Health Plans,” more organizations are offering this insurance in a direct response to the COVID-19 pandemic.

And Willis Towers Watson’s “2021 Emerging Trends in Health Care Survey” found that 57% of employers polled were offering critical illness coverage to their staff in 2021, and that 75% were planning to offer it by 2022 or beyond. That’s an increase of nearly one-third. 

Often offering this coverage costs the employer nothing or very little. Call us for more information on this valuable benefit that more workers are demanding.

"health
Uncategorized

What You Need to Know About New Health Plan Transparency Rules

by Inoventive Solutions
August 11, 2021

Regulations are slated to take effect over the next few years that will greatly increase the transparency requirements for group health plans.

The regulations issued under the Trump administration will require health insurers in the individual and group health markets to disclose cost-sharing information upon request, make cost-sharing information available on their websites and disclose negotiated rates with in-network providers.

The rules are designed to help health plan enrollees choose the plan that is best for them and their family, as well as to give them a full picture of what they can expect to pay for services as part of their deductibles, copays and coinsurance.

There are a few different parts to the rules: one focuses on personalized cost-sharing information and another focuses on other pricing and information that insurers are required to post on their websites.

Personalized cost-sharing information

The new rules require health plans to provide personalized estimates for enrollees upon request, so they can calculate their potential out-of-pocket expenses prior to receiving medical treatment.

The following must be provided to a plan enrollee upon inquiry ahead of receiving care:

Estimated cost-sharing liability — This covers how much the enrollee would have to pay out of pocket under their plan for deductibles, coinsurance and copays for a specific medical service. These estimates must be specific to the individual that’s inquiring and not a general estimate.

Accumulated out-of-pocket payments — Enrollees can inquire to their health plans about how much they’ve paid out towards their deductibles and their plan’s out-of-pocket maximums as of the date requested.

In-network rates — Upon request, the plan must divulge how much the enrollee will have to pay out of pocket in relation to the rates it has negotiated for a specific procedure by an in-network provider.

The plan or insurer must disclose the negotiated rate, expressed as a dollar amount, even if it is not the rate the plan or insurer uses to calculate cost-sharing liability. The plans must also disclose out-of-pocket liability for an individual as well as the negotiated rates for prescription drugs. The health insurer does not have to disclose drug discounts or rebates as part of the inquiry.

Out-of-network allowed amount — The insurer must disclose the maximum amount its plan will pay for an “item or service” from an out-of-network provider.

Notice of prerequisites to coverage — If the service the enrollee is inquiring about prior authorization, concurrent review or step-therapy, the insurer must include this information in the answer to the request.

This part of the regulation will take effect in two phases:

  • 1, 2023: Insurers will be required to provide personalized cost-sharing information on 500 specific services.
  • 1, 2024: Insurers will be required to provide personalized cost-sharing information on all specific services.

Publicly available cost-sharing information

The new regulations also require health plans (not including grandfathered ones) and health insurers to post on their websites machine-readable files with detailed pricing information. They must post this information starting Jan. 1, 2022.

The website must include the following information, which has to be updated on a monthly basis:

  • Rates for all covered items and services that the plan has negotiated with its in-network providers.
  • Historical payments the insurer has made to out-of-network providers, as well as the billed charges.
  • The plan’s in-network negotiated rates and historical net prices for all covered prescription drugs at the pharmacy location level.

"Health
Uncategorized

Rules Allowing Mid-Year Health Plan, FSA Changes Will Sunset

by Inoventive Solutions
August 4, 2021

A temporary rule that allowed covered employees to make mid-year election changes to their health plans and revisit how much they set aside into their flexible spending accounts (FSAs) will sunset at the end of the year.

The rules gave employers the option to allow their employees to make changes to their health plans, including choosing a new offering, but it did not require that they allow them to make these changes.

The more relaxed rules were the result of provisions in the Consolidated Appropriations Act, 2021, which was signed into law in December 2020 by President Trump, and subsequent regulatory guidance by the IRS.

In response to the COVID-19 pandemic, the IRS liberalized the rules for cafeteria plan mid-year election changes for health plans and FSAs in the 2021 plan year. During 2021, employers may permit employees to make election changes without affecting their status. The rules that were relaxed:

  • Allow employees who had declined group health insurance for the 2021 plan year to sign up for coverage.
  • Allow employees who have enrolled in one health plan option under their group health plan to change to another plan (such as switching insurance carriers or opting for a silver plan instead of a bronze plan).
  • For health FSAs, allow participants to enroll mid-year, increase or decrease their annual contribution amount, or pull out of the plan altogether and stop contributing.
  • For plan years ending in 2020 and 2021, employers are permitted to modify their health FSAs to include a grace period of up to 12 months to spend unused funds from the prior policy year.
  • Allow for a higher carryover amount than the typical $500.

But, all plans that take effect on or after Jan. 1, 2022 will revert to the old rules that bar mid-year election changes and limit the grace period for spending unused FSA funds to just two and half months after the end of the prior policy year.

The takeaway

The rules coming to an end will only affect those employers who opted to allow their employees to make changes to their health plan choices and/or their FSAs. If you didn’t make this move, there is nothing you need to do.

If you did permit your staff to make these mid-year changes, you will need to communicate to them as soon as possible and before and during open enrollment that mid-year changes will not be possible in 2022.

When telling them about the rules change, make sure to inform them of the permanent rules and when they take effect again.

Also, if you extended the grace period and/or the carryover amount for FSAs, inform them that the carryover grace period will revert to two and half months and that the maximum carryover amount will revert to $500.

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