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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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New Mental Health Parity Rules Would Expand Care

by Inoventive Solutions
August 1, 2023

With mental health in the forefront as patients demand greater access to psychologists and psychiatrists, the Biden administration in July 2023 proposed new regulations aimed at requiring health insurers to expand their mental health coverage.

The proposal aims to bring insurers into compliance with existing law requiring that they cover mental health benefits in parity with physical health services.

Despite that law, many insured Americans struggle to access mental health care, often because they need a referral or a health plan does not have enough psychologists and psychiatrists in its network, forcing them to go to providers outside of the network and paying significantly more.

It’s hoped that by adding new provisions that would require insurers to regularly assess how well they are complying with the law, it will be easier to receive in-network mental health care. Additionally, the rules aim to eliminate barriers that keep people from accessing such care when they need it.

The Mental Health Parity and Equity Act has been on the books since 2007, but the COVID-19 pandemic provided the spark that ignited a brewing mental health crisis in the country. The sudden demand for counseling services caught insurers off guard with too few providers in their networks.

As well, many people who needed mental health services were unable to get them due to their insurers’ sometimes onerous prior authorization requirements. In announcing the rule, the administration cited an example of insurers approving nutritional counseling for diabetes patients, but not for people with eating disorders.

The regulations — proposed by the Departments of Health and Human Services, Labor and Treasury — would:

Require health plans to measure outcomes to make improvements. The rules require insurers to regularly analyze their coverage requirements to make sure their insureds have equivalent access between their mental health and medical benefits as required by law. The insurer will need to evaluate:

  • How much it pays out-of-network providers,
  • How often prior authorization is required, and
  • The rate of denials for prior authorization requests.

The goal is to help insurers identify areas where they are failing to meet the law’s requirements and require that they take steps to remedy those shortfalls, such as adding more mental health professionals to their networks or reducing red tape to get access to them.

Stipulate what health plans can and cannot do. The proposed rules will provide specific examples that make clear that health plans cannot use more restrictive prior authorization, other medical management techniques, or narrower networks that make it harder for people to access mental health and substance use disorder benefits than physical medical benefits.

The proposal would require health plans to use similar factors in setting out-of-network payment rates for mental health and substance use disorder providers as they do for medical providers.

The takeaway

The proposed rule is good news for any of your staff that have been having a hard time accessing mental health or substance abuse services.

The regulators are hoping that the legislation achieves their goals of:

  • Making mental health care accessible to more people,
  • Ensuring that mental health professionals’ pay is comparable to that of physical medicine practitioners, and
  • By ensuring comparable pay and boosting demand, attracting more individuals to pursue careers in mental health professions to increase the number of mental health providers.

The proposed regulations still need to be put out for public comment and will likely be changed as the agencies get to work writing the final version.

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Budgeting and Prepping for Open Enrollment

by Inoventive Solutions
July 25, 2023

If you are running a business, you need to get an early start on preparations for your small group health plan open enrollment, particularly now as so much confusion abounds about the state of health insurance in the country.

With recent new regulations, options have changed for employers and you need to stay focused on maximizing your outcomes within your budget. You also want to drive participation, as that too can reduce overall rates for you.

Understand your options

Familiarize yourself with the various options that you have:

Health maintenance organizations – HMOs are typically the least expensive plans because they require enrollees to visit their personal physicians and tightly controlled in-network doctors. Going out of network is discouraged with high out-of-pocket costs. An HMO will usually only pay for care outside of the plan network when it’s an emergency or another unusual situation.

Preferred provider organizations – PPOs contract with hospital and provider networks to help control costs. While they will cover services outside of the network, the cost is higher than going in-network. PPOs are more flexible than HMOs, but premiums are often higher – as are some out-of-pocket costs.

One difference from an HMO: PPO enrollees don’t need a referral from their primary care physician if they are going to a specialist.

Point of service – A POS health plan is a mix between an HMO and a PPO-style health insurance policy. With a POS health plan, your staff has more choices than with an HMO, but they will usually need to select a primary care provider and need a referral to see a specialist.

Exclusive provider organizations – The EPO is also a PPO-HMO hybrid. Enrollees need to receive covered services inside of the network, except in a few instances, but they can also see a specialist without a referral from their primary care doctor. 

Besides the above, you will also need to decide if you want to reduce the premium for your organization and staff by offering high-deductible health plans. These plans can be either an HMO or a PPO, but they have the same feature of having a high deductible that needs to be met before benefits really kick in.

For 2024, for a plan to qualify as an HDHP the deductible must be at least $1,400 for an individual and $2,800 for a family. The average HDHP deductible is $2,349, but many plans exceed $3,000.

These plans usually have an attached health savings account to which your workers can transfer funds pre-tax from their paychecks to use for paying deductibles, copays and other medical expenses.

Check your budget

In 2022, group health insurance premiums averaged $659 a month ($7,911 annually) for single coverage, and $1,872 per month – or $22,463 per year – for a family, according to a survey of employers by the Kaiser Family Foundation.

You can reduce your premium outlays by imposing higher premium cost-sharing requirements on your staff. But, make sure you stay within the guidelines of the Affordable Care Act, which requires that plans be “affordable,” meaning they cannot cost more than 9.12% (in 2023) of an employee’s household income. This number changes each year, and the percentage has not yet been set for 2024.

Be mindful, though: if you try to unload too much of the premium on your workers, you may see people leave your plan and, if too many decide not to participate, you may not be able to offer the policy. Try to offer plans that will be valuable to your staff as well as affordable.

Maximizing enrollment

If you want to find out what your employees expect from their benefits, you can run a survey of all your staff. It can cover the basic elements of the plans you are going to choose from, and ask them which ones they would find most valuable. Then, move forward organizing your plan based on their response.

Your goal is maximum participation, and you can work with us to start disseminating materials and reaching out to those who may need plans explained to them. Give them some time to look the plans over. Employees want to know what changes are being made to their benefits packages in advance, so make sure you give them time to look through the offerings.

Next, plan to hold a meeting a month before open enrollment starts, in order to go over the plans and options with your staff, as well as any significant changes you’ve made.

During the meeting, highlight the value of each of the plans you are offering. Unfortunately, there will be those among your staff that haven’t really paid attention at all to the plan documents you gave them earlier.

Focus on the basics:

  • What each plan costs them.
  • What’s covered under the plan, and
  • When and how to use it.
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Employers Expect Higher Premiums, Little to No Cost-Shifting

by Inoventive Solutions
July 11, 2023

Employers who were surveyed for a new report expected that group health insurance premiums would increase 5.4% this year and at a faster clip in 2024 as inflation hits medical costs.

Employers said they are looking to manage growing group benefit costs without shifting costs to employees, as they realize that their staff are likely dealing with inflation in all facets of their lives, including their medical bills, according to Mercer’s “Survey on Health and Benefit Strategies for 2024.”

At the same time the labor market is still very tight, requiring businesses to continue offering attractive pay and benefit packages.

In fact, 64% of large employers (with 500 or more workers) plan to enhance their health insurance and well-being benefits to stay competitive for talent and to keep their staff happy, Mercer found.

With all that in mind, the report advises that employers will have to prepare for higher premium outlays and be creative in how they try to control costs.

“Employers looking to enhance benefits will need to do it carefully — not by adding bells and whistles, but by looking for opportunities to add value,” Mercer wrote in its report.

“That might mean filling gaps in current offerings with more inclusive benefits. It might mean revisiting time-off policies to give employees more flexibility. It definitely means paying close attention when employees say they need better support for their mental health.”

Whether to pass on higher costs

Besides the 64% of employers who said they would boost their benefits in 2024, 28% said they would not but have done so in the past two years. When asked if they would pass on the additional health insurance costs to their employees:

  • 45% said they would not shift any of the higher costs to employees.
  • 24% said they would up employee cost-sharing, but by less than the projected increase.
  • 27% said they would raise cost-sharing enough to keep pace with the projected cost increase.
  • 3% said they would raise cost-sharing enough to reduce the projected cost increase.

Employers are also taking different steps to make health insurance more affordable for their staff, particularly those at the lower end of the wage spectrum:

  • 15% of employers offer free employee-only coverage in at least one plan.
  • 18% use salary-based contributions to premiums, with lower-wage workers paying less than their better paid colleagues.
  • 39% offer a medical plan with no or a low deductible or cost-sharing (e.g., copay plan).
  • 6% make larger health savings account contributions to lower-wage staff to make their high-deductible health plan more affordable.

Other strategies

Besides those steps, employers are using a number of other strategies to slow health

cost growth without shifting cost to employees, including:

  • Programs aimed at enhancing the management of specific health conditions like diabetes and heart disease. Programs also include pain management, which can reduce medical costs and improve patient outcomes.
  • Focused actions to manage the cost of specialty prescription drugs. Strategies include making plan design changes to steer patients to specialty pharmacies, focusing on the site of care and seeking support from drugmakers to reduce enrollee out-of-pocket costs and demanding integrated managed care from health plans and the pharmacy benefit managers with which they contract.
  • Increasing virtual care offerings, beyond standard telemedicine. Already 64% of employers offer virtual programs for a broader range of care, such as behavioral health care, specific care areas like diabetes or musculoskeletal issues, specialty care like dermatology or reproductive care and primary care.
  • Steering enrollees to quality, high-value care via high-performance networks, centers of excellence, etc. These approaches deliver savings by focusing on the quality and efficiency of a provider network.
  • Limiting plan coverage to in-network care only (in at least one plan).
  • Strategies focused on utilization of high-quality primary care (e.g., advanced primary care).

The takeaway

As we enter a period of higher premium increases along with a competitive job market for employers, businesses will need to be creative when addressing costs and offering the benefits that their employees desire.

The three main takeaways from the Mercer report are:

  • Be prepared for faster premium increases in the coming years.
  • Find benefits that will add value for your employees, and not bells and whistles they don’t care about.
  • Consider network and telehealth strategies to help reduce overall costs.
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More Insurers Pushing Virtual Care for Cost Savings

by Inoventive Solutions
July 4, 2023

More and more insurers are expanding the use of telemedicine, just as a new study shows promising cost savings of up to 25% from virtual care when implemented properly.

The latest insurer to announce an expansion of its telemedicine offerings is UnitedHealthcare, which recently said it would eliminate out-of-pocket costs for its 24/7 Virtual Visits program for eligible members enrolled in fully insured employer-sponsored plans, starting July 1.

Besides making care more convenient and reducing costs for its enrollees, the insurer is hoping more access to virtual care will encourage earlier visits, which can reduce the risk of complications or need for emergency care later on.

Other insurers have also been working with their network providers to increase the use of telemedicine in the hopes of making care more accessible for patients and reducing overall costs.

And as more providers, patients and insurers gain an understanding of the breadth of services that can be handled via telemedicine, and the limits, patients will likely make more use of telemedicine.

This is good news for patients and employers, who may end up benefiting from lower plan costs, as well as lower out-of-pocket expenses for employees.

Most large health carriers have adopted some form of telemedicine by either contracting with a tech provider to manage the interface or by purchasing a tech platform.

As well, a growing number of established insurers are starting to sell “virtual-first” plans, often with a zero-dollar deductible and no copays for all visits with virtual-only providers.

Potential savings and other benefits

In a study published in the American Journal of Managed Care, researchers at the Perelman School of Medicine at the University of Pennsylvania found that average per-visit costs for hospitals in Penn Medicine’s OnDemand telemedicine program were 23% less than for in-person visits.

Average per-visit costs in the telemedicine program were $380, compared to $439 for in-person primary care offices, emergency departments or urgent care clinics costs.

“The conditions most often handled by OnDemand are low acuity — non-urgent or semi-urgent issues like respiratory infections, sinus infections, and allergies — but incredibly common, so any kind of cost reduction can make a huge difference for controlling employee benefit costs,” the study’s lead researcher, Krisda Chaiyachati, MD, said in a press release.

The study’s authors noted that there are other benefits besides just cost savings.

The program made care easier, which the study’s senior author, David Asch, professor of Medicine, said promotes more care. Since telemedicine is so convenient, people “who might otherwise have let that sore throat go without a check-up may seek one when it’s just a phone call away,” he explained.

Telemedicine services expanding

Before the COVID-19 pandemic uptake of telemedicine had been slow, but usage increased dramatically when hospitals closed to all but emergency cases and as many people were afraid to see their doctors in a health care setting in fear of contracting the disease.

Additionally, Congress in March 2020 enacted legislation that expanded telehealth access for Medicare beneficiaries, leading to a rapid uptake of virtual care.

All that uptake has forever changed perspectives on medical care delivery and the number of visits that can be handled via telemedicine is growing. Initially, hospitals were using it for primary care visits. While that is still the main type of visit for which patients are using telemedicine, uses are expanding to include:

  • Urgent care,
  • Therapy for behavioral health care visits,
  • Specialty care, like dermatology,
  • Chronic conditions management, and
  • Wellness screenings.

As this technology matures, the number of services that can be handled via video or phone will continue to increase.

Virtual-only plans legislation

Waivers created by the March 2020 CARES Act, an economic rescue package in response to the pandemic, have allowed individuals to choose and buy the use of telehealth services outside of their high-deductible health plan without affecting their health savings account eligibility. Last year, the wavier was extended by legislation through Dec. 31, 2024.

Bipartisan legislation in Congress, the Telehealth Benefit Expansion for Workers Act, would make these waivers permanent and allow employers to offer stand-alone plans to their workers.

It’s envisioned that these stand-alone telehealth benefits would operate similarly to dental and vision benefits, remaining separate from health care plans. They would be another tool for reducing overall medical costs.

According to the bill’s authors, allowing employers to offer stand-alone telehealth coverage would:

  • Help alleviate provider shortages,
  • Increase access to mental health services,
  • Reduce the cost of care for patients by widening provider networks, and
  • Provide timely access to medical care to individuals in rural areas.

The bill also would include telehealth access for part-time, seasonal and contracted workers.

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Uncategorized

ACA Employer Mandate Penalties on the Rise

by Inoventive Solutions
June 28, 2023

The penalties for not offering health insurance to your employees if you have 50 or more full-time or full-time equivalent employees in violation of the Affordable Care Act are set to rise again next year.

The IRS has increased the fines for employers that fail to provide health insurance for their workers under the ACA’s employer mandate, as well as for failing to provide coverage that is affordable or coverage that provides “minimum value.” The penalties will apply to plans that start on or after Jan. 1, 2024.

The way most employers find out that they may have violated the employer mandate is if they get a 226-J letter from the IRS, which would be prompted by one of your employees receiving premium subsidies after purchasing coverage on a government-run exchange.

Under the mandate, employers with 50 or more full-time or full-time equivalent workers are required to offer 95% of them affordable health coverage. There are two different penalties for violations:

The A penalty

This is levied on an applicable large employer (ALE) for failing to offer minimum essential coverage to 95% of full-time employees and their dependents and if just one of those employees receives a subsidy when they buy insurance on a government-run ACA marketplace.

New penalty amount:$2,970 per employee, up $90 from 2023.

This penalty can be especially damaging. While it is not assessed for the first 30 employees if triggered, it applies to all of the employer’s full-time employees, meaning costs can quickly add up.

The B penalty

This fine is levied if an applicable large employer fails to offer coverage that is affordable and/or fails to provide minimum value, and just one full-time employee receives subsidized coverage through the marketplace.

Coverage is deemed unaffordable if an employer fails to offer at least one self-only health plan where any employee’s share of the premium does not exceed 9.12 % (the 2023 threshold) of their household income. The affordability threshold has not yet been announced for 2024.

In order to provide minimum value, an employer-sponsored plan must cover at least 60% of average costs and provide substantial coverage for inpatient and physician services.

New penalty amount: The annual penalty for a type B infraction rises to $4,460 per employee in 2024, up $140 from this year. Typically, this penalty is broken down into monthly increments depending on how long an employee receives subsidized coverage on an exchange.

The takeaway

While you no doubt already offer coverage to your employees if you’re an ALE, it’s important to pay attention to next year’s affordability threshold.

Any downward change means you have to recheck to ensure that at least one of your plans offers coverage deemed affordable to your lowest-paid employee.

Also, be especially mindful during the new-employee onboarding process to ensure they are properly identified and offered coverage.

If the IRS suspects you are out of compliance, it will send you a 226-J letter. You’ll be glad you have all your paperwork in order if you receive one of these letters.

The 226-J letters are also sent to employers if they make mistakes on their Form 1095-C.

If you receive one of these letters, contact us for assistance.

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