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Benefits in a Multi-generational Workplace

by Inoventive Solutions
March 12, 2024

With multiple generations working side-by-side in this economy, the needs of your staff in terms of employee benefits will vary greatly depending on their age.

You may have baby boomers who are nearing retirement and have health issues, working with staff in their 30s who are newly married and have had their first kids. And those who are just entering the workforce have a different mindset about work and life than the generations before them.

Because of this, employers have to be crafty in how they set up their benefits packages so that they address these various needs.

But don’t fret, getting something that everyone likes into your package is not too expensive, particularly if you are offering voluntary benefits to which you may or may not contribute as an employer.

Think about the multi-generational workforce:

Baby boomers – These oldest workers are preparing to retire and they likely have long-standing relationships with their doctors.

Generation X – These workers, who are trailing the baby boomers into retirement, are often either raising families or on the verge of becoming empty-nesters. They may have more health care needs and different financial priorities than their older colleagues.

Millennials and Generation Z – These workers may not be so concerned about the strength of their health plans and may have other priorities, like paying off student loans and starting to make plans for retirement savings.

Working out a benefits strategy

If you have a multi-generational workforce, you may want to consider sitting down and talking to us about a benefits strategy that keeps costs as low as possible while being useful to employees. This is crucial for any company that is competing for talent with other employers in a tight job market.

While we will assume that you are already providing your workers with the main employee benefit – health insurance – we will look at some voluntary benefits that you should consider for your staff:

Baby boomers — Baby boomers look heavily to retirement savings plans and incentives, health savings plans, and voluntary insurance (like long-term care and critical illness coverage) to protect them in the event of a serious illness or accident. 

You may also want to consider additional paid time off for doctor’s appointments, as many of these workers may have regular checkups for medical conditions they have (64% of baby boomers have at least one chronic condition, like heart disease or diabetes).

Generation X — This is the time of life when people often get divorced and their kids start going to college. Additionally, this generation arguably suffered more than any other during the financial crisis that hit in 2008. You can offer voluntary benefits such as legal and financial planning services to help these workers.

Millennials and Generation Z — Some employee benefits specialists suggest offering these youngest workers programs to help them save for their first home or additional time off to bond with their child after birth.

Also, financially friendly benefits options, such as voluntary insurance and wellness initiatives, are two to think about including in an overall benefits package.

Voluntary insurance, which helps cover the costs that major medical policies were never intended to cover, and wellness benefits, including company-sponsored sports teams or gym membership reimbursements, are both appealing to millennials and can often be implemented with little to no cost to you.

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Mark Cuban: CEOs Don’t Know Where Their Health Benefit Dollars Are Going

by Inoventive Solutions
February 13, 2024

Since billionaire businessman Mark Cuban entered the health care space with Cost Plus Drug Co., which he launched in May 2020, he has gotten a new perspective on the value that most CEOs place on their group health insurance benefits.

And what he has found is a lot of waste and a lack of health care buy-in among corporate chieftains, according to one of his recent posts on X, formerly known as Twitter.

Most chief executives of self-insured companies, he wrote, “don’t know and don’t really want to know where their health care benefit dollars are going.”

In other words, employers —­ with some effort — should be invested in their health plans so they can find ways to reduce costs for themselves and their employees while improving health outcomes for their workers.

While his comments were aimed at CEOs of self-insured companies, business leaders can use them to look a little closer at the health plans they offer their employees and opt for ones that are focused on reducing costs and driving positive health outcomes.

 

Poor management buy-in

After engaging in discussions with numerous CEOs of companies that have contracted with Cost Plus, Cuban concluded that most chief executives pay little attention to how well their self-insured health plans deliver positive health care outcomes because that is not viewed as a core competency of their companies.

“As a result they waste a s**tload of money on less than quality care for their employees,” he wrote on X, “and more often than not it’s their sickest and lowest-paid employees that subsidize the rebates and deductibles. (Sicker employees have to pay up to their deductible, healthy ones don’t.)”

Cuban likened poor management buy-in to their health plan to lackluster execution of diversity, equity and inclusion (DEI) programs.

“Like health care, DEI is not seen as a core competency in most companies. It’s just a huge expense. Intellectually, [CEOs] see the benefit of DEI. But they don’t have time to focus on it,” he wrote. “So it turns into a check box that they hope they don’t have to deal with beyond having HR do a report to the board and legal tells them they are covered.

“When anything that impacts all of your employees is pretty much a check list item to the CEO, there is a good chance that it’s not going [to] work well and you are going to have employees who are not comfortable for a lot of different reasons.”

 

Taking a different approach

Taking a hands-off approach to your company’s employee benefits may be costing you and your employees. And in 2024, when group health insurance premiums have increased 8.5% on average from the year prior, it’s important that employers don’t treat their benefits as just an unavoidable expense.

As the health care and insurance industry innovates, there are growing opportunities for cost savings and better outcomes. For example, some new health plans may have narrow-provider networks with perhaps not as many physicians, however those physicians provide care at centers of excellence that have better outcomes for patients.

Additionally, there are a number of cost-containment strategies available that employers have been loath to use in order to retain and attract talent. As the labor market loosens and costs continue to rise, employers looking to arrest cost inflation may start considering their options.

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New Approaches to Managing Health Care Costs, Improving Outcomes

by Inoventive Solutions
February 6, 2024

As health insurance and health care costs continue climbing, some employers are taking new and innovative steps to tamp down costs for themselves and their covered employees while not sacrificing the quality of care they receive.

Some of the strategies require a proactive approach by engaging with their broker and insurer, and even local health care providers, efforts that may be hampered by location and how flexible insurers may be. The goal for these employers is to reduce their and their employees’ costs and improve health outcomes.

The following are some strategies that employers are pursuing.

Steering workers to certain providers

One way to reduce spending is to contract with insurers that guide patients to facilities and providers that are more affordable and who have good patient outcomes. This process, called steerage, if executed correctly can save the employee money on their deductibles, copays and coinsurance and help them get better overall care.

For standard services, this steerage can help your employees see immediate savings on small payments. But for services that require pre-authorization, such as an MRI or X-ray, the insurer can help steer them to the least expensive provider. The differences in cost for these pre-planned services can often be hundreds of dollars, if not more.

Even guiding workers to outpatient facilities over inpatient facilities for these services can yield even greater savings and a better patient experience.

To get the most benefit out of steerage some employers have been switching from traditional group health insurance to self-insured direct-to-employer health plans. These plans will centralize employees’ health care with an integrated provider network or hospital group that focuses on coordinated care, which can reduce overall costs and improve the quality of care.

Since the employer is self-insured, they can work with a health system to establish an integrated care strategy that puts a premium on steerage.

Getting a handle on drug spending

Pharmacy benefit costs are the fastest-growing part of health care costs, up an estimated 8.4% in 2023, according to the Mercer “National Survey of Employer-Sponsored Health Plans.” And as new and more expensive pharmaceuticals hit the market, the portion of overall health care costs that goes towards medications will continue to rise.

One contributor to the increasing prices that your staff pay for their medication may be the pharmacy benefit manager that your insurer uses. Many PBMs earn commissions on drugs dispensed to patients and they benefit from steering them to higher-cost drugs. As well, many PBMs steer patients to pharmacies that they own, further muddying the waters.

There is a way to cut through this mess, but it requires asking tough questions of your insurer and/or the PBM. Ask them how they earn their money, and what kind of commissions and margins they are earning on drugs dispensed to your employees. It’s best to take this approach with the assistance of us, your broker.

Having an honest discussion with your insurer and PBM can open opportunities to save on pharmaceutical outlays through various strategies, like using generic drugs instead of brand-name ones and ensuring that your workers get the full manufacturer rebates — and that they are not kept by the PBM.

Depending on the PBM, this may or may not work.

Helping your employees get healthier

The healthier your workers are the less they will need to access health care, meaning they will spend less for medical services.

Employers can help their employees by weaving in health and wellness education in their staff communications. As well, many wellness programs focus on improving health, including smoking cessation programs, weight loss programs and free or subsidized gym memberships.

Also, many Americans are not keeping up on preventive care visits, many of which are free under the Affordable Care Act. Keeping up on these visits can help stave off larger health problems in the future.

Sometimes what’s needed for your employees to take preventive care seriously is education. You can work with us to come up with communications strategies aimed at trumpeting the importance of these visits by focusing on improving overall health and cost savings in the long run.

The takeaway

The above strategies follow a trend in health care focusing on improved health outcomes for patients by better coordinating care, particularly for those with chronic conditions. For employers, the name of the game is keeping costs down for themselves and their staff while not sacrificing quality of care and while improving their workers’ health.

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EEOC Ramping Up Workplace Anti-Discrimination Efforts

by Inoventive Solutions
November 21, 2023

Employers should brace for increased enforcement by the U.S. Equal Employment Opportunity Commission after it received a budget boost and has a new board member, breaking a deadlock that’s been going on for nearly a year.

Here’s the latest EEOC news that’s pointing to more robust enforcement by the agency:

  • In the federal government’s fiscal year that ended on Sept. 30, 143 lawsuits were filed against employers for alleged discrimination against employees, 52% more than in 2022. All but three of them were filed in the last eight months of the year, indicating a rapid increase that’s spilling over into the current fiscal year.
  • The EEOC’s budget for 2024 increased $26 million, or 6%, from 2023.
  • The composition of the five-member EEOC changed in July, when a new commission member was finally confirmed after a year-long wait, giving Democrat-appointed members a majority. The commission had been deadlocked up until that point with two Republican-appointed members and two Democrat appointments.

These developments indicate that the EEOC will step up its enforcement of federal employment laws. Accordingly, employers should be extra-vigilant in preventing acts or conditions in the workplace that might appear to break the law.

The EEOC is a federal agency charged with enforcing federal laws that prohibit discrimination against job applicants and employees on several grounds. These include race, sex, color, religion, age and disability, among others.

In recent years, the number of lawsuits it filed has shrunk. During some years of the Obama administration, it filed more than 300 suits annually. That number fell to 97 in 2020 and was 124 in 2021.

An EEOC investigation can have several effects on an employer:

  • Time that would have been spent running the business must be dedicated to responding to the charges. Work activities are disrupted as the EEOC requests documents and interviews staff members.
  • Employee morale can tumble when staff find out the government is investigating alleged discriminatory practices.
  • It can tie up the employer for a very long time. The EEOC says most investigations take 10 months or so, but experts say that is an underestimate.

How to prevent an EEOC investigation

The best thing an employer can do is to avoid giving workers any reason to believe they’ve been victims of discrimination. You can do this by:

  • Establishing a strong and clear written anti-discrimination policy. It should expressly state that discrimination against any of the protected classes of employees is illegal and intolerable. You should include it in your employee handbook and communicate it often to workers. A good policy will include easy to understand examples of prohibited conduct.
  • Establishing an anti-retaliation policy. It should make clear that employees who complain of illegal discrimination against themselves or colleagues will not be retaliated against. EEOC statistics showed that most of the complaints it received in 2020 were for retaliation.
  • Training managers and other employees on compliance with applicable laws.
  • Developing and following a consistent process for addressing complaints.
  • Promptly investigating all complaints of discrimination and taking actions, if necessary.
  • Thoroughly documenting all steps in the investigation and retaining the records for future reference.
  • Using progressive discipline with violators, with the severity of the consequences increasing for each subsequent violation.

Insurance

Every employer should carry employment practices liability insurance. This coverage protects the business against claims of discrimination, harassment, retaliation and other wrongful workplace acts.

However, there can be great differences between policies, so it’s important that you work with us to find a policy that is right for your organization.

The EEOC is clearly taking employee discrimination claims more seriously. That makes it all the more important that your organization does the same.

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More Employers Offering Deductible-Free Plans

by Inoventive Solutions
November 14, 2023

As more Americans struggle with medical costs and rising out-of-pocket expenses, more employers are starting to offer deductible-free plans, according to a new report.

Mercer’s “2023-2024 Inside Employees’ Minds” survey results jibe with other reports that some insurers’ fastest growing group health plans carry no deductibles.

Workers covered by these plans often receive more preventive care than those who are in plans with deductibles, and they often pay up to 50% less out of pocket, UnitedHealthcare’s chief operating office, Dirk McMahon, told investors recently. He added that these plans can help their employers reduce the total cost of care by an average of 11%.

Employers understand the increasing financial burden that health insurance and out-of-pocket costs are imposing on some of their employees. Medical debt is a growing problem in the U.S.

Employers are taking a number of different approaches:

  • 15% offer free employee-only coverage in at least one medical plan.
  • 18% use salary-based contributions, meaning that employees who earn less also pay less for their coverage, while their higher-wage colleagues pay more.
  • 39% offer at least one health plan with no or low deductible. These are often known as copay plans.
  • 6% make larger contributions to the health savings accounts of their lower-wage staff.

Employers have several types of health plans to choose from when designing their benefits packages. Because attracting and retaining talented staff is a high priority for many organizations, they often look for the best health plan available.

One option that appeals to many employers is the no-deductible health plan. These plans are attractive because they cover health care costs immediately, eliminating high out-of-pocket expenses for employees. But, no-deducible health plans have high premiums, which may make them difficult for some employers to afford.

No-deductible plan trade-offs

No-deductible plans may:

  • Have higher premiums to account for the more generous benefit.
  • Feature higher copays.
  • Have limited network providers,
  • Have fewer covered health services.

Depending on your benefits budget and your workforce demographics, no-deductible health plans may be your best option for staff who are high health care users. There are a few issues you should consider when mulling offering such plans. Here are the main pros and cons:

Pros

  • These plans can reduce your workers’ out-of-pocket medical expenses.
  • The plans are well-suited for people who incur high medical expenses, like those with chronic conditions, who make frequent doctor’s visits and/or who are taking expensive prescription medications or have many prescriptions they regularly refill.
  • People who know how much they will pay upfront for care are more likely to access care when they need it, particularly for chronic conditions, and they are more likely to go to annual checkups.
  • There is less likelihood of receiving surprise medical bills.

Cons

  • These plans typically have higher monthly premiums.
  • Copay outlays can add up for high users of medical services.
  • Some plans may restrict eligible services and items, perhaps by not including certain drugs in their formularies or by offering a limited provider network.

The takeaway

While no-deductible plans will be attractive to many workers, they are not for everyone and their higher premium may dissuade many people from choosing them, even if you have a generous premium-sharing arrangement. If you agree to pay a set amount towards their insurance premium, these plans can still cost hundreds of dollars more a month for the employee.

People who do not use their health insurance much are not good candidates for these plans as well, since they may end up paying higher premiums for services they don’t use.

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Open Enrollment: Help Younger Workers Understand Their Coverage

by Inoventive Solutions
November 1, 2023

A new study’s findings that many workers have a poor understanding of their employer-sponsored health insurance benefits, presents an opportunity for businesses to extend targeted support to staff during open enrollment.

The “2023 Optavise Healthcare Literacy Survey” found that 32% of employees are not confident about understanding how their plan works, meaning that many of your staff may have trouble finding, understanding and using information and services to make health insurance decisions.

As the plan sponsor, you can step in to help them during open enrollment by providing them with tailored information and guidance.

Employees who don’t understand their coverage may choose plans that are not right for them, and because of their lack of knowledge, they are more likely to stick with the same plan and not explore other options during open enrollment.

To help your staff who may not be as up to speed on how their health plan works, your human resources team has a few options.

Focus on younger workers

The Optavise study found differences in health insurance understanding among the various generations in the workforce, with millennials and Gen Z workers having the poorest understanding of health insurance terms.

The study authors recommend a return-to-basics approach during open enrollment for these workers. That could include holding meetings for them to explain the basics of health insurance, particularly how plans with higher premiums will typically have lower deductibles and copays, while low-premium plans usually have higher deductibles and copays.

Also, if you have a multi-generational workforce or workers with chronic conditions, you’ll want to tailor your pitches depending on the employee. Your presentations should focus on multiple scenarios that explain which options are best, depending on your workers’ age, health and life circumstances.

One-on-one communications

The study found that workers don’t often turn to their employers first when they have questions or need information about health insurance or their health plans:

  • 46% said they reached out to friends and family for information.
  • 35% taught themselves about terms and processes by going online or reading other materials.
  • 27% sought out information from their company’s HR department.

Given the often-poor accuracy of information from online sources, and that their friends and family likely aren’t experts on the subject, it’s a good bet that many people are getting bad information about health insurance.

While group training and providing online tools and printed material can help your workers, one-on-one meetings seem to be the most effective in helping workers:

  • 84% reported they found one-on-one sessions very or extremely useful.
  • 68% said online resources were very or extremely helpful.
  • Only 49% found e-mail correspondence was very or extremely helpful.

You may want to urge your employees to schedule face-to-face meetings with relevant HR staff. One-on-one meetings let your employees ask specific questions. By having conversations about their current medical needs or family situation, employees can best determine the most reasonable option for them.

Focus on points of confusion

The study also asked workers what kind of information about their group health plans they wanted to know more about. The following answers provide a list of topics you may want to cover during open enrollment meetings:

  • How to avoid surprise medical bills.
  • How my deductible, copay/coinsurance and out-of-pocket maximum work, and what it means for my wallet.
  • How to review an Explanation of Benefits and medical bill for errors.
  • Researching health care costs, and why it matters.
  • How to choose where to get care.
  • How to choose a plan.

The takeaway

You can play an important role in educating your workers about their health coverage.

Smart employers will tailor their benefits communications, literature and meetings to meet the varying needs of their workers. It’s good to provide materials and education through various sources like a portal and literature, meetings — and in particular one-on-one meetings, which are seen as the most effective.

A personal approach can be especially helpful to ensure that your workers choose plans from which they will benefit the most in light of their budget and needs.

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Diabetes Wellness Programs Can Boost Productivity, Reduce Costs

by Inoventive Solutions
October 10, 2023

Physicians and employee health experts are increasingly recommending that employers include diabetes screening, prevention and management in their company-sponsored wellness programs.

Diabetes — known as the “silent killer” — afflicts more than 29 million Americans, or 9% of the population.

Type 2 diabetes — or adult-onset diabetes — accounts for about 90% to 95% of all diagnosed cases of diabetes. Type 2 diabetes is associated with older age, obesity, family history of diabetes, history of gestational diabetes, impaired glucose metabolism, physical inactivity, and race/ethnicity.

The fallout from the disease has a significant impact on businesses as it can lead to stress, depression and a number of other health problems, including cancer, stroke and heart issues. That in turn leads to lost productivity for you as well as presenteeism, or the dilemma of a worker being at work but not being productive.

Medical costs and costs related to time away from work, disability and premature death that were attributable to diabetes totaled $245 billion in 2019, according to the U.S. Centers for Disease Control. Of that total, $69 billion was due to lost productivity.

With these statistics in mind, it’s imperative that employers help their workers manage their diabetes. Helping them get diabetes under control or helping them avoid developing the disease can keep your productivity strong, reduce your workers’ comp claims and also chip away at your health insurance expenses thanks to lower premiums.

Diabetes means decreased productivity

Of the roughly $69 billion that U.S. employers lost in 2019 from decreased productivity due to diabetes:

  • $21.6 billion was from the inability to work as a result of diabetes.
  • $20.8 billion was from presenteeism.
  • $18.5 billion was from lost productive capacity due to early mortality.
  • $5 billion was from missed workdays.
  • $2.7 billion was from reduced productivity for those not in the labor force.

Prevention and management

Employers can help by providing their employees with a voluntary diabetes management and prevention program. This wellness benefit can take many forms.

The Integrated Benefits Institute during an annual forum recently held a session highlighting what some employers are doing to educate their workers on how to manage diabetes:

  • The San Francisco Municipal Transportation Agency has partnered with the American Diabetes Association to deliver educational seminars on diabetes to its workforce.
    The agency also offers as part of its diabetes program health risk and orthopedic assessments, glucose and cholesterol screenings, nutritional counseling, exercise classes and a walking club. (Since the transport agency’s wellness plan provider initiated the diabetes program, its workers’ comp claims have also fallen.)
  • Caterpillar, Inc. found diabetes to be one of its primary cost drivers, so it now provides incentives for employee risk assessments and care management. For example, half of the employees in its diabetes management program reduced their A1C levels (a measure of diabetes control), while 96% reported measuring these levels regularly and 72% reported meeting recommended activity levels.
  • The City of Asheville, NC, used local pharmacists to coach employees on how to manage diabetes. More than 50% of those in the program experienced improved A1C levels, and the number of employees with diabetes that achieved optimal levels increased.
  • Vanderbilt University expanded a pilot program of intensive exercise and nutrition that helped employees with diabetes improve cholesterol and blood sugar. About 25% of the employees were able to stop taking their diabetes medications.
  • The Ohio Police and Fire Pension Fund works with its health insurer to offer its employees access to diabetes prevention and control programs. Employees voluntarily participate in worksite health screenings. Those who have pre-diabetes can attend YMCA-led diabetes prevention programs either at work or in the community.

The takeaway

Having a diabetes wellness program among your voluntary benefit offerings can help your employees avoid diabetes or manage it if they already have the disease. That helps not only their health, but also your bottom line.

If you would like to know more about educating your employees about diabetes and helping those with pre-diabetes or diabetes manage their condition, call us.

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More Providers Charge for Telemedicine, Phone Visits and Doctor E-Mails

by Inoventive Solutions
October 3, 2023

More hospitals and insurers have started charging patients for virtual care services as they have grown in usage and providers are spending more time meeting patients in telehealth appointments and responding to their e-mails.

Many hospital systems have started billing patients for e-mails they send to their physicians and, depending on the level of out-of-pocket expenses in their plan, they may pay just a few dollars for a copay or up to $100 if they have a high deductible.

With these forms of communication growing in use, employers may want to remind their employees to look at their plans’ benefits summaries to see how much they will have to pay for these services.

The hospitals argue that physicians spend a significant amount of time responding to inquiries and it takes just as much time for them to conduct telemedicine and phone appointments as it does in-person visits.

A short five-minute session with a patient on a phone or video appointment will typically result in associated work, including reviewing the patient’s chart, updating notes and putting in orders for medications, tests or referrals.

Billing under insurance

The Centers for Medicare and Medicaid Services introduced Medicare billing codes for telemedicine in 2019, paving the way for providers to allow patients to seek reimbursement for messages their doctors send them using an electronic portal.

Under the rules, a provider can bill for a message only if it’s in response to a patient inquiry and requires at least five minutes of the doctor’s time.

Many of the country’s health insurers have followed Medicare’s lead, reimbursing hospitals for doctors’ e-mails. In turn, insurers may charge patients a copay or they may have to pay for the service fully if they have a deductible they must first meet. Even then, fees for these types of appointments are typically lower than for in-person visits.

It should be noted that there may not be fees associated with some services such as asking a doctor for a prescription refill or follow-up care.

How it’s being billed

The amount that patients are being billed varies among hospital systems and insurers.

According to recent surveys, out-of-pocket telemedicine visits are an average of $30-75 nationally, with most visits at around $40-50. According to Becker’s Hospital Review:

  • Medicare pays around $50 per televisit on average.
  • Mayo Clinic started charging $50 for some online emails written by its doctors after a surge in mail volume.
  • Humana’s health plan On Hand charges $0 to $5 per visit.
  • Walmart offers its employees $4 telehealth appointments.
  • SSM Health, a hospital system in St. Louis, charges $25.
  • Summa Health, a hospital system in Akron, Ohio, charges $30.

The takeaway

Hospitals and providers are all charging different amounts for televisits, phone visits and their doctors sending e-mails. As well, insurers have different cost-sharing structures for their enrollees.

It’s important that you warn your employees to read plan summaries of these costs if they are regular users of these services, as health plan coverage will vary depending on deductible and copay levels. Doing this can help them avoid surprise bills, particularly if they have grown used to paying nothing for such services.

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Identify Your Workers’ Needs, Consider Costs before Open Enrollment

by Inoventive Solutions
September 26, 2023

It’s almost time for group health insurance open enrollment and your top priority should be to drive participation by helping your employees make informed decisions about their options.

You’ll want to help your staff understand all of their options so they can choose plans that are best for their age, health and life situation.

This is an important exercise to ensure that any of your workers don’t pick a plan that costs them too much in premium if they rarely use their health insurance, or costs them too much in out-of-pocket expenses if they are frequent users of health care.

It’s a balancing act, since each employee has different needs. Here’s our advice for the open enrollment:

Listen to your workforce

Before you make any decisions, you should listen to your employees and better understand their needs and preferences.

With answers and feedback in hand you can create a benefits package that is more appealing to them, which in turn gives you a competitive edge when attracting and retaining workers.

Engage employees and solicit feedback through quarterly employee-benefits round table meetings. Invite employees from different age groups and different departments to participate in these meetings, to ensure you have a good cross-section of your staff represented.

Give advance notice

You can start now with simple reminders for them to start thinking about open enrollment and evaluate their current health plans. Send out memos and place posters in high-traffic areas.

If you start with this in September or October, they can have time to assess their options, particularly if anything has changed in their lives like marital status, new children or health issues.

Costs are paramount

You can work with us to settle on plan arrangements that will be within your and your employees’ budgets, and that comply with the Affordable Care Act’s affordability and minimum value rules.

Employees have a right to understand the costs they’ll be facing in each plan, including:

  • Their share of the premium,
  • Their deductible,
  • Their copays or coinsurance, and
  • Other out-of-pocket expenses.

Typically, the higher the premium on a plan, the lower the employee’s out-of-pocket costs are. The lower the premium on the plan, the higher the deductible and copays.

Get an early start

If your plan year starts Jan. 1, you should hold open enrollment meetings and dispense plan materials in October or November.

This will give your workers time to review all of their options and compare costs and coverages.

Communicate effectively

Your task is to get employees out of cruise control and truly assess all of their options.

This is especially true if you are making changes to cost-sharing, introducing new plans, or offer voluntary benefits, a wellness plan or health savings account or flexible spending account.

You should use a variety of different media to communicate with them. Use video, virtual and live meetings, e-mail communications, text messages and print materials to get through to your employees. Each generation will often have a preferred medium, so using a multi-pronged approach may be most effective.

Get spouses involved

If you also offer insurance to your workers’ families, you should communicate through your employees that their spouses are also invited to join your open enrollment meetings.\

You may also invite them to view any electronic material you may post online, like the aforementioned videos.

If they cannot make a general meeting, you can invite them to come in to meet with your human resources manager if they have questions.

Remind staff of the ACA

You can use open enrollment as a way to remind your workforce of their responsibilities to secure coverage under the ACA.

Let them know that employees that refuse coverage that complies with the ACA from their employer and opt to purchase it on a public exchange, will usually not be eligible for government premium subsidies.

The meeting

Send out meeting notices early to give your employees time to prepare and set aside time.

Try to make the meeting engaging with props, videos, printed materials and more. You may also want to consider recording the session so that staff who can’t make the meeting can watch it, particularly if you have employees that don’t work on-site.

Provide enough time for the main presentation, as well as for questions from your employees.

The takeaway

Open enrollment can be a hectic and stressful time for both the employer and workers. By getting a head start on planning and communications, you will be ahead of the game and your employees won’t feel harried into making a decision. That benefits both them and your organization.

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Report: Group Health Plan Cost Inflation to Pick Up Steam

by Inoventive Solutions
August 31, 2023

A new report by Aon warns employers to expect average group health insurance costs to increase 8.5% in 2024, as inflation starts hitting the cost of delivering care as well as pharmaceuticals.

The report predicts that employers will pay an average of $15,088 in 2024, compared to the average this year of $13,906. The cost hike is almost double the 4.5% increases employers saw in 2022 and 2023.

Despite the large expected premium increases, employers still seem to be reluctant to pass on more of the premium cost to their covered workers. For example, for this year, employees saw their premium payments increase an average of just 1.7%.

The challenge will be for employers to properly budget for these cost increases, while not pushing too much of the hike onto their employees, particularly in this highly competitive job market.

The cost drivers

There are a few reasons rates are climbing:

Health care inflation — This is the main culprit behind the expected rate hikes. While health care providers have been contending with inflation since 2021, they’ve been unable to pass them on to health insurers because they usually enter into three-year contracts with locked-in rate hikes.

As these contracts are renewed, health care providers are demanding higher fees for services due to their own costs increasing, particularly for staff wages, equipment and supplies. For example, the cost of emergency services supplies, including ventilators, respirators and other critical equipment, increased by almost 33% between 2019 and 2022.

New technologies — New technologies that hospitals use are also increasing in cost, as is the cost of servicing and installing the equipment.

Catastrophic claims — Every catastrophic claim requires varying levels of intervention and care. Many will require specialized medical care, extensive rehabilitation, advanced medical equipment and potential vehicle and home modifications. Catastrophic claims costs are increasing due to:

  • Hospital staffing shortages
  • More high-cost injectable drugs
  • Increasing cancer rates
  • Longer hospital stays resulting from multiple conditions, complications and complex procedures
  • Higher medical equipment costs
  • Skyrocketing costs of home modifications.

Pharmaceutical costs — There are two significant drug cost drivers:

  • Specialty drugs: These are significantly more expensive than their traditional drug counterparts, often costing more than $2,000 per month per patient. However, some pharmaceuticals cost much more. The drug Tretinoin, which can help manage complications of leukemia, costs $6,800 a month. Others cost upwards of $100,000 per year. The cost and utilization of these drugs is growing, according to Aon.
  • New weight-loss drugs: The newest pharmaceutical cost driver is the proliferation of trendy new weight-loss drugs like Wegovy, Saxenda and Ozempic, which cost more than $1,000 a month. These have proven to be highly effective in helping people lose weight and are in high demand. Insurers typically won’t cover these medications if someone simply wants to lose weight, though.

Cost-shifting hesitation

The report predicts that employers will be hesitant to make significant changes to how much their employees contribute to their health plan premiums.

Aon estimates that the average employee premium contribution in 2023 is $2,682, while they pay out another $1,993 in deductibles, copays and coinsurance.

“We see employers continuing to absorb most of the health care cost increases,” Farheen Dam, North American Health Solutions leader at Aon, said. “In a tight labor market, plan sponsors are hesitant to shift significant cost to plan participants and make benefits less affordable.”

Talk to us about your options as 2024 approaches. We can help you with different plan designs and cost-sharing arrangements that may reduce your firm’s premium outlays.

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