Healthcare

Shocking News: The Government Did Not Plan Well!

By August 13th, 2014   Healthcare

Employee Benefit Advisors believes the following is important information. It supports EBA’s belief that Healthcare is best served by the private sector. Imagine the total number of policies and comprehensive coverage if either a) the government had given one billion dollars away for insurance premiums, or b) allocated one billion dollars in claims for the uninsured. As for Medicare, we are headed for trouble. (Or, the unthinkable, reduce a debt.)

Health Reform Weekly – A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country. Week of August 4, 2014

A new General Accounting Office (GAO) report released last week found that the government did not plan well and did not properly oversee the launch of the new federal health exchange in October. The report went on to warn that the problem-plagued federal website still faces risks for the next open enrollment period unless oversight is increased and continuing back-end issues are resolved. The original contractor for the site has been replaced because of the flawed rollout, but some key federal marketplace capabilities remain unavailable. Congressional auditors noted that Healthcare.gov costs are now running close to $1 billion.

In other news, the Medicare and Social Security Board of Trustees has issued its 2014 annual report on the financial health of the Medicare program, projecting that the Medicare Hospital Insurance Trust Fund will exhaust its reserves in 2030, four years later than projected last year. The trustees project “slight surpluses in 2015 through 2022, with a return to deficits thereafter until the fund becomes depleted in 2030.” This improvement is attributed primarily to factors that include lower-than-expected spending in 2013 for most hospital service categories.

7 Advantages of Partially Self-Funded Health Plans

By August 6th, 2014   Healthcare, Human Resources

Obamacare allows no rate consideration for health conditions on fully-insured small group plans. Rates are the same whether a group is very healthy or very sick. Healthier groups must subsidize the cost for sicker groups. Since groups are not underwritten, the business owner usually has no way of knowing if the cost includes a subsidy for sicker groups.

Self-insured small group health plans are allowed to underwrite and set rates for each group based on the health of the group. By going through this underwriting process, a small business owner can see the price based on the health of the employees. Once the rates for a self-insured plan are determined, the business owner can make a decision of what is best.

Very few plans a totally self-funded, so when EBA refers to the self-funded it important to realize these plans are partially self-funded.

  1. Lower Costs – Savings may result from underwriting, fewer mandates, greater flexibility in plan design, tax savings, and a refund of claims funds. The savings can be significant.
  2. Tax Savings – Self-funded plans save on state insurance taxes and ACA taxes. State insurance tax is paid only on the stop loss insurance portion of the cost. This is typically less than one half the total plan cost and results in a typical savings of one half or more of the state premium tax.
  3. Money Back from Claims Fund – In years that claims are less than funded for, the money left over in the claims fund belongs to the employer.
  4. Monthly Claims Report – The employer receives monthly claims reports showing where dollars are being spent. This information can be used by the employer and advisor to design a plan that works best for the specific business.
  5. Not Subject to State Mandates – Carriers selling fully insured plans must spend large amounts of resources just to comply with the different state mandates. With a self-funded plan, the employer selects benefits that work best for the employees.
  6. Underwriting Based for Type of Business, Age, Sex, Health and Lifestyle – With a fully-funded plan, the healthier and younger groups must subsidize the cost for older and less health groups. The underwriting process used for self-funded plans allows you to be charged the correct amount for your group, rather than being included in a community rated traditional plan. This can result in significant savings.
  7. More Latitude in Plan Design – With self-funded plan an employer is allowed to select the benefit that works best for that specific business. Deductibles, co-insurance, co-pays, prescription benefits and other options allow for a custom design.

Healthcare Bluebook brings Price Transparency

By July 30th, 2014   Healthcare, Healthcare Services, Human Resources

Healthcare Bluebook provides transparency to consumers to compare healthcare costs and quality. Employers can provide a valuable tool to employees that will enable them to shop for the most affordable high quality care.

How does Healthcare Bluebook work?

  • Employees search for services using common language
  • Employees learn the price range they can expect to pay how much they can save by making cost effective choices
  • Prices are based on your local area network rates
  • Employees can compare specific providers on both cost and quality

Why do employers need a transparency solution?

  • In-network prices for healthcare services vary by 300% to 500%
  • Employees don’t know that prices vary within their network or how to find lower cost quality providers
  • Employers and employees can cut healthcare costs if they have the right information, tools and incentives

Healthcare Bluebook can be paired with both self-funded and fully insured plans. Although it supports traditional plan designs, EBA believes it is a super-value-added support for consumer driven high deductible plans. Healthcare Bluebook says employers have been decreasing total medical spend by 4% to 12%.

Humpty Dumpty Had a Great Fall

By July 23rd, 2014   Compliance - ACA & Other, Healthcare, Human Resources

Employee Benefit Advisors blogged Oct 9, 2013 about court cases that have been falling under the radar. EBA said “These cases could dismantle health care reform as we know it.”  –  Yesterday the decision came down the “Court bars PPACA aid for federal exchange shoppers.” The decision has already been appealed, however, the way PPACA is written makes it very clear that the subsidy is available only to people who bought plans on state-run exchanges. Only 14 states have opted to set up their own marketplaces.

A conflicting ruling was also issued on an almost identical case by the 4th Circuit Court of Appeals in VA. To complicate things further, there are two other cases still pending before other circuit courts. These conflicting rulings mean that the issue will almost certainly be appealed to the U.S. Supreme Court later this year. If and when heard by the Supreme Court, expect a final decision regarding the availability of subsidies in federally facilitated marketplaces no sooner than June 2015.

HiRes

 

Humpty Dumpty sat on a wall,
Humpty Dumpty had a great fall;
All the King’s horses, and all the King’s men
Cannot put Humpty Dumpty together again.

…so apropos

 

Four Numbers that may cause you to say Four Letter Words

By July 16th, 2014   Compliance - ACA & Other, Healthcare, Human Resources, PEO

The U.S. Treasury Department and Internal Revenue Service has issued the final regulations on the employer mandate under the Affordable Care Act. The new 6055 & 6056 regulations are 227 pages long and Employee Benefit Advisors believes will prove to be the most cumbersome and costly part of Obamacare. We say costly because we believe this will prove to be far more complicated, and thus burdensome than employers realize. Employers with part-time, seasonal and variable hour employees (as an example a bus driver who also works maintenance; so he would have hours under two different pay codes or a temporary that works temp to perm etc.) will particularly have difficulties and will need a managed solution.

Software is available to help manage your employees and meet the new Healthcare Reform guidelines. This system is fully automated to your specifications and will complete all the necessary reporting documents. Contact Employee Benefit Advisors for a demo.
_______________

The laws reporting requirements fall under sections 6055 and 6056 of the internal revenue code. Under section 6056, large employers subject to the employer mandate must file a return with the IRS and provide a statement to each full-time employee with information regarding their offer of employer-sponsored healthcare coverage. Under section 6055, employers who offer self-funded plans and insurers generally must file a return with the IRS and provide a statement to each individual who is covered by plans that constitute minimum essential coverage.
Here are the nuts and bolts of the full regulation:

  1. Employers that have between 50 and 99 full-time equivalents will have until 2016 to provide health insurance, not 2015. So if you have 100 or more full-time equivalents in 2014, Jan. 1, 2015 is still your target. But if you have 99 or fewer, you get a one-year extension.
  2. Transitional relief is now available for non-calendar plans. There was some confusion over whether the 2014 transition relief would apply for 2015 and now it appears that it does. Employers with non-calendar year plans are subject to the mandate based on the start of their 2015 plan year rather than on Jan. 1, 2015.
  3. Large employers (those with more than 99 full-time employees) have to comply in 2015, but for the first year, they will only have to offer coverage to 70% or more of their full-time employees. The 95% requirement will not go into effect until 2016.
  4. For large employers that contribute to a multi-employer plan, an employer will not be subject to shared responsibility penalties with respect to employees for whom the employer is required by the collective bargaining agreement or appropriate related participation agreement to make contributions to the multi-employer plan.
  5. Some categories of employees are better defined:
  • For volunteers for a government or tax-exempt entity (like emergency response personnel), hours they volunteer will not count in consideration of their full-time employment status.
  • For teachers and other educational employees, they will not be treated as part-time for the year simply because their school is closed or operating on a limited schedule during the summer. Also, for adjunct faculty, employers of adjunct faculty may credit them with 2 ¼ hours of service per week for each hour of teaching or classroom time.
  • For those in traditionally seasonal positions where annual employment is customarily six months or less, they will not be considered full-time employees.
  • For students in work-study programs, these hours will not be counted in determining whether they are full-time employees.

Rx Impact – Bid Rx – Prescriptions for Less (Part 2 of 2)

By May 21st, 2014   Apps / Websites, Healthcare, Healthcare Services, Human Resources

BidRx (www.bidrx.com) is a website built by pharmacists that links consumers with pharmacies and pharmaceutical companies, so consumers can make better decisions when purchasing prescription drugs. BidRx provides the information needed to identify the best value drug; then pharmacies compete for filling prescriptions. Consumers can

  • See cost of prescriptions (original plus alternatives) and services.
  • See list of participating pharmacies in your geographic area.
  • Get bids from pharmacies that want to earn your business.

Employers can use the site to help communicate the true cost of prescriptions. Employees see the prescriptions’ maximum price before bids (a discounted price), alternative prescriptions with discounted prices, and competitive bids (even lower discounted prices). Employees can use the site to lower drug costs. 

Important – Medications ordered through BidRx.com may be out-of-network and thus not apply towards the deductible. Therefore, BidRx may be used best for drugs with bid prices less than your copay.  So if you find a deal, check your network price and copay, too.  If the savings is worth it, buy it.

When registering, you will need a referral code, feel free to use our code. EBA’s Referral Code is 35FFN.

Examples

  • Simvastatin (generic for Zocor and alternative for Lipitor and Crestor) for lowering cholesterol usually has a generic co-pay of $10 or $15 for a 30 day’s supply.  EBA was able to get a bid price of $3.40 for a 90 day’s supply.  That’s an annual savings of $75.
  • Amlodipine (generic for Norvasc) for lowering blood pressure usually has a generic co-pay of $10 or $15 for a 30 day’s supply.  EBA was able to get a bid price of $3.68 for a 90 day’s supply.  That’s an annual savings of $75.
  • Nexium (the purple pill) retails at $762 for a 40 mg 90 day supply. BidRx price was $660. Similar drugs (generics) cost just over $20.

Rx Impact – Specialty Drugs (Part 1 of 2)

By May 14th, 2014   Healthcare, Human Resources

Specialty Drugs – generally referring to drugs costing over $600 per month – are estimated to account for 30% of total drug costs and expected to reach 50% by 2018. These drugs are expensive to develop and pose challenges manufacturing. However they target life altering illnesses making them an absolute must if needed. These patients have chronic illnesses and are expected to be on medication for years.

The average cost of a specialty drug is $10,000 per month for a patient. (That’s not a typo – stat is provided by a principle of the Institute for Integrated Healthcare). Thus cost management is crucial to trying to hold down pharmacy costs. Strategies include requiring prior authorizations to assure the expensive drugs are the best fit and tiered out-of-pocket cost are two of the most common.

www.shrm.org/0314-specialty-drugs

 



A special thanks to SHRM – Content and video from the Article The Looming Rx Threat by Tamara Lytle.

New Rule on Market Reforms – 22% MLR

By May 7th, 2014   Compliance - ACA & Other, Healthcare

The rule makes a temporary change to the administrative cost ceiling. Currently, as a result of the Medical Loss Ratio (MLR), insurers are allowed to have 20% of their costs be administrative, with the other 80% devoted to claims. That number has been increased to 22% for 2015 under the proposal to accommodate the increased burden issuers have faced in complying with the law and adjusting to the Exchanges. Issuers now have some more resources to devote to administrative costs next year.

The Centers for Medicare & Medicaid Services (CMS) released the proposed rule and other guidance documents late March 14, 2014, in a continued effort to implement the Affordable Care Act (ACA).  The rule, is centered on implementation of market reform provisions of the ACA. The change to the risk corridors program was instituted as a way to cushion issuers from excessive gains or losses due to uncertainty surrounding premium rates.

ACA Recap – Employer Checklist (Part 5 of 5): Exchanges

By April 30th, 2014   Compliance - ACA & Other, Healthcare, Human Resources

Types of Exchanges

1. State Exchanges – Individual Consumer – Federal or State Run

  • Carrier participation will be voluntary
  • State determines plan designs:  Bronze (low cost), Silver, Gold, Platinum (high cost); Catastrophic Plan – young invincibles (18 -30)

2. SHOP Exchange – Small Employers

  • Open in 2015
  • Limited to 50 FTE’s
  • Employer picks plan for their EE’s

3. Private Exchanges – Wide variety available through various channels

  • Wide variety – Single or Multiple Carrier, Regional or National, Fully or Self-Insured, Defined-Benefit or Defined-Contribution
  • Available through various channels – Brokers, Technology Providers offering payroll or enrollment platforms, Insurance Companies
  • Pros and Cons – Can help control cost by setting contribution amount for each employee, offer more benefit choices and services for enrollment, claims, billing, employee support. However they charge fees and may be more expensive; carrier participation fee, company enrollment fee or both. Employee pros and cons exist as well; they may or may not like the selection of benefits, may shoulder a great portion of the costs.
  • Although they can provide a wide choice of options, employers must be concerned about ‘anti-selection’ and loss of control of the underwriting process vs. being aggregated with poor performers.

Evolving State Exchange Landscape

  • State Exchanges open in 2014 for Individuals only (SHOP plans are optional by state)
  • Federal subsidies are available in exchanges to individuals with household incomes between 138% and 400% of federal poverty level (FPL = $11,490) who do not have access to qualifying, affordable employer coverage. Employees at or below 250% of FPL will be enrolled in a silver plan with lower cost sharing
  • Federal subsidies will be based on silver plan, even if individual chooses bronze or higher metallic plan. Individuals do not get the excess subsidy if a lower cost plan is selected or a higher subsidy if a higher cost plan is selected
  • Less than half of states will have an Exchange up and running in 2014. Federal exchange will be the fallback

Potential Challenges with Exchanges

  • New enrollees must be cognizant in researching network providers and coverage
  • Additional special enrollments (i.e. change in location, employment status or income) all of which would affect eligibility for Medicaid and/or premium assistance
  • Age changes and over age dependent cancellations

ACA Recap – Employer Checklist (Part 4 of 5): Underwriting

By April 23rd, 2014   Compliance - ACA & Other, Healthcare, Human Resources

Under ACA beginning with all new groups and for groups renewing in the 2014 calendar year the following criteria will be used to underwrite group. (In Florida, group size is determined by ATNE, Average Total Number of Employees. ATNE is calculated by averaging the total number all employees, full & part time, seasonal, temporary, etc… for each month.

Group Size below 50 lives – Small Group Underwriting
Small group health insurance carriers will only be allowed to price small groups based on the following criteria:
1. Smoking status (tobacco status can be rated as a 1.5-1.0 limit)
2. Regional rating
3. Limit of a 3-1 ratio in premium charges (mature vs. younger)
4. Family size
5. Participation in a health promotion (wellness) program
Pre-existing condition limitations are removed.

Group Size 51-99 lives – Small or Large Group Underwriting as determined by state
Composite rates based on DOB, gender, home zip code, enrollment status, prior carrier history, renewal rates and group medical questionnaire.

Group Size of more than 100 lives – Large Group Underwriting
Underwriting allows for, in addition to the above, review of each individuals (employee and dependents) medical conditions.

Self-Funded Underwriting, any size group, allows for individual (employee and dependents) medical condition.

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