"unvaccinated
Uncategorized

Employers Mull Higher Health Plan Cost-Sharing for Unvaccinated Staff

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.
"Affordable
Uncategorized

Trimming Hours to Avoid Employer Mandate Can Land You in Hot Water

Ever since the Affordable Care Act was enacted, critics of the law have said that employers would cut staff or reduce workers’ hours to avoid coming under the employer mandate requiring them to provide coverage for their staff.

But employers that decided to go that route could find themselves in a costly legal trap thanks to precedent-setting case that has been cited often by judges when confronted with challenges. 

Workers at Dave & Buster’s, a restaurant chain, in July 2015 filed a lawsuit in the Southern District of New York alleging that the national restaurant chain reduced their hours to keep them from attaining full-time status for the purpose of avoiding the requirement to offer them health coverage under the ACA’s employer mandate.

In February 2016, the federal judge in the case, in declining the employer’s motion to dismiss the case, cited its likely breach of the Employee Retirement Income Security Act (ERISA), which prohibits employers from interfering with a worker’s right to benefits.

This case is significant because many other employers have implemented similar strategies striving to limit work hours for certain groups of employees for the purpose of avoiding penalties under the ACA.

Some background

The ACA’s employer mandate generally requires large employers (those with 50 or more full-time workers or full-time equivalent employees) to offer affordable and minimum value health coverage to their full-time employees (employees who regularly work an average at least 30 hours per week).

Employers are not generally required to offer coverage to employees working less than 30 hours per week on average.

Since the employer mandate took effect, many employers have been moving employees to part-time status to avoid triggering penalties under the employer mandate. 

Why the case is important

The Dave & Buster’s employees alleged that the company violated ERISA by cutting their hours. They cited Section 510 of ERISA, which prohibits employers from discriminating against any participant or beneficiary for exercising a right under ERISA or an ERISA benefit plan. 

The workers alleged that by reducing employees’ hours to keep them below the 30-hour weekly average to qualify as a full-time employee, Dave & Buster’s interfered with the attainment of the affected employees’ right to be eligible for company health benefits.

Dave & Buster’s in October 2015 filed a motion to dismiss the case, but the Southern District of New York federal judge denied the motion in February 2016.

The law firm of McDermott Will & Emery in its blog highlighted the importance of the decision, stating, “The opinion focuses on ERISA Section 510 and holds that the plaintiff has a viable claim that reducing her work hours was done for the purpose of interfering with her right to benefits under the company health plan.

“Second, the opinion finds that the complaint successfully alleged the employer’s ‘unlawful purpose’ and intention to interfere with benefits, pointing to allegations that company representatives publicly stated that they were reducing the number of full-time employees to avoid ACA costs.” 

The law firm noted that the decision has given plaintiff’s attorneys a model for filing similar complaints when employers reduce hours to avoid their obligations under the ACA.

It also noted that if judges in other cases deny employers’ motions to dismiss cases, it will put the employer in a more difficult position because the employees’ attorneys will be able to take discovery and depositions, and to compel document production.

Any signs or proof of reducing hours to avoid their obligations under the ACA will make defending the case even more difficult, McDermott Will & Emery wrote.

If you have trimmed hours to avoid the employer mandate, or if you are contemplating doing so, it’s best that you first discuss these plans with your company lawyer.

"employee
Uncategorized

Changes for 2021 Summary of Benefits and Coverage

There are new Summary of Benefits and Coverage notice requirements for health plans starting with the 2021 coverage year.

The requirements, released by the Department of Labor, have new model templates, new instructions and new information that affects the coverage examples that are required to be in SBC documents that employers with group health plans must distribute to their employees.

Under the Affordable Care Act, all non-grandfathered health plans are required to provide enrollees and prospective applicants an SBC, which is essentially a synopsis of the plan’s coverage and benefits. It must be produced in a specific format, contain specific information, and be written in a way that is easily understood.

Here are the changes that were made to the SBC template for plans that started on or after Jan. 1:

Coverage example

The coverage examples that appear on the last page of the document have been modified to reflect changes in the cost of medical services that occur over time due to inflation and other factors:

  • “Managing Joe’s Type 2 diabetes” (diabetes example): The total amount of expenses incurred for “Joe” has decreased.
  • “Mia’s simple fracture” (fracture example): The total amount of expenses incurred by “Mia,” who visited the emergency room for a simple fracture, has increased.
  • “Peg is having a baby” (maternity example): The costs incurred during “Peg’s” hospital stay have been changed to remove separate newborn charges. The deductible line of the example should now match “your deductible amount” (if applicable).

Minimum essential coverage

Under the entry for minimum essential coverage, the template has been revised to reflect the elimination of the individual mandate penalty, which was repealed effective Jan. 1, 2019.

The entry now indicates that individuals eligible for certain types of minimum essential coverage may not be eligible for a premium tax credit under the ACA marketplace.

Uniform glossary

The uniform glossary has been updated to remove references to the individual mandate penalty.

What to do

If you offer group health plans to your employees, you are a plan sponsor and thus required to distribute SBCs to staff who are eligible for coverage during open enrollment. The SBC must also be given to new hires within 90 days of hiring for mid-year enrollment. 

If you don’t have your latest SBC, you can contact us or your health insurer. The insurer is obligated to provide all covered employers with updated SBCs after the Department of Labor and the Department of Health and Human Services release changes to templates.

"unemployment"/
Uncategorized

Some Insurers Step Up Group Health Plan Assistance

Some health insurers are helping business workers in group plans maintain employee benefits during the COVID-19 pandemic, a new survey has found. 

Social distancing and stay-at-home orders have put the hurt on hundreds of thousands of businesses across the country, which has forced them to reduce employees’ hours, furlough them or lay them off.

Besides all those employees seeing their pay drastically curtailed or disappear altogether, it also affects their employee benefits, with health coverage topping the list.

With so many people concerned they may lose coverage and business owners equally worried about their employees, some insurers are stepping up by extending coverage for affected group plan participants. 

The survey by insurance research organization LIMRA found that 42% of group health plans are automatically continuing coverage for all employees for a specified period of time, and another 22% are extending eligibility on a case-by-case basis to employees whose status has changed.

About 35% of insurance companies have adjusted reinstatement rules to make it easier for those affected by COVID-19 to regain coverage, and a similar number are extending the timeframe in which employees may elect to pay or continue coverage if separated from their employer.

Nearly all carriers in the survey said they are offering premium grace periods of 60 days on average to workers unable to pay their premiums due to COVID-19, while others plan to reassess or extend those timelines if needed.

These moves are important, considering that about 70% of all workers in the U.S. receive health coverage from their jobs, according to LIMRA.

The typical scenario

When an employee is laid off or furloughed, their hours are essentially reduced to zero, which can result in a loss of eligibility to participate in their employer’s group health plan.

Group health insurers will have written documents that outline the rules for particular plans. These rules include a definition of eligible employees, including how long an employee can be absent from work before the employee will lose eligibility for insurance coverage.

Health plan documents do not usually differentiate between an employee who is terminated and one who is laid off and one who is furloughed.

To be eligible under the typical plan’s rules, an employee must work a minimum number of hours per week (usually at least 30). If an employee is under protected leave – such as Family Medical Leave Act protection – benefits continue during leave.

In other words, an employee who is not meeting the hours requirement or is not actively at work (work from home is considered actively at work) based on being terminated, furloughed  or laid off – even temporarily – will generally have their benefits terminated. They should then receive an offer of COBRA or state continuation, unless state law does not require it due to an employer’s size.

However, if an employee continues to remain eligible for the business’s group health plan during an unpaid absence, the employer will need to determine how to handle their insurance premium payments.

The takeaway

If you are concerned about benefits continuation for laid-off, furloughed or terminated employees, you can call us to see if your health plan has made any special arrangements during the COVID-19 outbreak.

We can check to see if there is any way to continue coverage for any affected employees, and for how long and at what cost to you.

"accumulator
Healthcare

New Accumulator Programs Can Surprise Employees at Pharmacy Counter

An ongoing tense relationship between insurers and drug companies is spilling over and hitting enrollees in group health plans, by saddling them with additional out-of-pocket expenses.

Some insurers have started adopting copay accumulator programs — sometimes called accumulator adjustment programs — that change the way a patient’s out-of-pocket medication costs are added up (accumulated) when there is some type of drug company financial assistance for the health plan enrollee. 

These accumulator programs do not count the drug company assistance (in the form of coupons or copay cards) that defray the employee’s out-of-pocket expenses.

Unfortunately, many group plan enrollees often do not know that their group health plan has changed its policy to be an accumulator program. This is because they did not read the plan summary when they renewed their policy during open enrollment, or they read about it and didn’t understand how it works.

For most employees, the change will not make much of a difference, if any at all, if they are low users of their health benefits and rarely need prescription medications.

But, for heavy users and those with chronic health problems, the change could mean hundreds, if not thousands of dollars more out of pocket for their medicines. For patients who need expensive medications, drug makers will often provide copay assistance in the form of coupons or copay cards, which the enrollee shows the pharmacy when buying the drugs.

Essentially, accumulator programs block patients from using any third party monies toward their deductibles and out-of-pocket maximums.

How it works

To understand how an accumulator program works and how it may affect your employees, take the example of a patient who needs $15,000 worth of medications a year with a pharmaceutical out-of-pocket maximum of $7,000 on their health plan:

  • Traditional plan with no copay assistance: Employee pays $7,000 and the insurer pays $8,000.
  • Typical plan that allows copay assistance: Employee pays $4,000, copay assistance pays $3,000 and insurer pays $8,000.
  • Plan with copay accumulator: Employee pays $7,000, copay assistance pays $3,000 and insurer pays $5,000.

Insurers that have instituted the practice say they did so because they want to steer health plan enrollees toward generic medicines and away from pricier brand-name drugs.

They say that these copay cards and coupons are an incentive for pharmaceutical companies to inflate list prices for drugs, then offer copay assistance that spares the patient, but shifts more of the costs to the insurer.

Lawmakers in a number of states have taken note and are trying to address the practice legislatively. They have introduced legislation that would ban insurers from using accumulator policies when there’s no generic version of the drug available.

However, the Centers for Medicare and Medicaid Services in February 2020 proposed a rule allowing insurers to impose copay accumulator policies.  

What you can do

Many health plan enrollees do not know that their health plan has a copay accumulator program until they get to the pharmacy counter after they think they’ve reached their out-of-pocket limit and still have to pay for their medications. 

If they haven’t had this experience in the past with their plan, it’s maybe because they didn’t realize that it had switched to an accumulator program.

Come your company’s next open enrollment, you should stress to your staff that if any of them are large users of prescription medications, they need to carefully read their current plan’s summary of benefits as well as other plan documents.

If you have concerns that any of your staff might run into issues, you can call us to go over your current plans to identify those with or without accumulator programs.

This is especially important during open enrollment, as those enrollees that require expensive prescriptions should be given options, including at least one plan that does not use an accumulator program.

"2020
Uncategorized

Trends Shaping Health Insurance and Health Care in 2020

As a new decade begins, the health insurance industry is on the cusp of making a leap towards improved, higher-tech management of health plan participants.

A recent paper by Capgemini, an insurance technology and consulting firm, predicts the following trends that will be taking shape in the health insurance industry and how they may affect businesses that are paying for their employees’ coverage.

1. Realigned relationships — Insurers are trying to shift risk between themselves and pharmaceutical companies in an effort to reduce drug outlays. The report says insurers are also working more closely with health care providers for early intervention in medical issues that may be facing participants. Addressing health issues early can reduce long-run treatment costs.

2. Fluid regulations — As we’ve seen, just because the Affordable Care Act became the law of the land, the regulations governing health care and health insurance have continued streaming out of Washington. If the last two years are any guide, this will continue to be the case. Also, the constitutionality of the ACA is now being litigated once again after an appeals court upheld a lower court’s ruling that the individual mandate is unconstitutional.

3. Increasing transparency — More stringent regulations, along with President Trump’s recent executive order to improve price and quality transparency, are forcing the health care industry and insurers to become more transparent in their pricing.

One of the biggest focuses is on the drug industry and the role of pharmacy benefit managers, the largest of which have been criticized for being opaque in their pricing, discounts and how they handle drug company rebates.

Also, insurers are increasingly providing detailed information regarding services covered under their health plans, claims processing and payments. Additionally, some insurers are helping enrollees to make more informed decisions before they use a health care service by providing digital tools to help them reduce out-of-pocket expenses.

4. Predictive analytics — Health insurers are using predictive analytics for risk profiling and early intervention for enrollees with health issues. Predictive analytics provide insurers with insightful assessments of potentially high-risk customers, in order to mitigate losses.

With advancements in technologies such as big data and connected devices, insurers now have access to vast amounts of customer data, which can be used to remind people it’s time for their check-ups, medications and other necessary medical services.

Insurers are using predictive analytics to identify and monitor high-risk individuals to intervene early and prevent further complications. This in turn can help reduce claims.

""/
Finance, Healthcare, Industry News

DOJ Tells Court to Nullify ACA; What’s Next?

After a period of relative stability, the future of the Affordable Care Act has once again been thrown into uncertainty.

In a surprise move, the Department of Justice announced that it would not further pursue an appeal of a ruling by U.S. District Court Judge Reed O’Connor, and instead asked the 5th U.S. Circuit Court of Appeals to affirm the decision he made in December 2018.

""/
Finance, Healthcare

Help Your Employees Save Money on Drugs

Most employers are doing all they can to keep their employees’ health insurance and health care outlays to a minimum.

And while most of those efforts are focused on the upfront cost of insurance, co-pays and deductibles, many employers fail to help their employees control the very costs they actually have the most control over and one of those areas is medicine.

Privacy Settings
We use cookies to enhance your experience while using our website. If you are using our Services via a browser you can restrict, block or remove cookies through your web browser settings. We also use content and scripts from third parties that may use tracking technologies. You can selectively provide your consent below to allow such third party embeds. For complete information about the cookies we use, data we collect and how we process them, please check our Privacy Policy
Youtube
Consent to display content from Youtube
Vimeo
Consent to display content from Vimeo
Google Maps
Consent to display content from Google
Spotify
Consent to display content from Spotify
Sound Cloud
Consent to display content from Sound