How Is Your Health Plan Responding to Millennials?

millennialsYou might be surprised to hear that millennials represent one third of the American workforce, but Pew Research Center confirms it. If your health benefit plan hasn’t adapted to the needs and lifestyles of these young people, you’re missing an opportunity to boost retention, build loyalty and enhance wellness.

For starters, it’s important to realize that 45% of young adults age 18 to 29 do not have a primary care doctor. They do, however, have a smartphone and you can bet they use it to access the internet constantly. With online sources like WebMD offering so much healthcare information, it’s no wonder that millennials are likely to self-diagnose and even treat one another at home before seeing a doctor. If young people can find much of the healthcare information they need in the palm of their hand, you can bet they expect to find benefits and enrollment information easily accessible as well.

They Want Information Now
Just like so many of us who have come to expect an immediate response to everything, millennials who do need a doctor expect the visit to happen quickly and easily. According to PNC Healthcare, this explains why 34% of millennials prefer to use a retail clinic rather than waiting several days to see a primary care physician in their office – a rate twice as high as baby boomers. It would also seem to point to an increased use of telemedicine.

Cost Matters to Millennials
Millennials face more than their fair share of financial pressures and take their finances seriously. Surveys show they are more willing to request a cost estimate prior to choosing a treatment option than baby boomers or seniors ever were. This not only makes cost transparency tools important, but it’s a very positive trend that should contribute to lower claim costs going forward.

Whether it be treatment options, provider access or cost of care, the demand for health and benefit plan information will only increase as more and more millennials enter the workforce. In order to respond to change, self-funded employer groups will need the resources of an independent TPA that can combine the right plan design with more personalized, interactive communications and more innovative ways for younger employees to access the more personalized care they will need going forward.

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Association Plans Taking Shape

In January, the Employee Benefits Security Administration (EBSA) posted draft regulations that could allow trade groups to offer nationwide association health plans (AHP) for member employers. The regulations are in response to President Trump’s executive order intended to facilitate access to short-term health insurance plans and the use of HRAs by employers.

The regulations will allow a general business group to offer an AHP to all members, regardless of industry, as long as the employers are located in the group’s metropolitan area. In contrast to existing association- sponsored plans, business groups that want to sponsor an AHP can organize for the specific purpose of obtaining healthcare coverage and nothing more. The regulations would enable some general purpose AHPs, such as one offered by a chamber of commerce or other business group that has members in a bordering state, to offer coverage across state lines.

As of our publication date, comments are still being received by EBSA and officials are still working on more regulations. While the initial proposal would not alter existing statutory provisions governing multiple employer welfare arrangements (MEWAs), recent updates tell us that future proposals could involve DOL authority to exempt self-insured MEWA plans from state regulation.

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Cost-Conscious Consumers Are Driving Health Care Transparency

The out-of-pocket thresholds of high-deductible health plans are leading consumers to ask questions about their care, demanding higher quality and lower cost.

Source: Future of Health Care, Media Planet

Born out of necessity, a new breed of health care consumers is demanding transparency about the true price of office visits, lab tests, procedures, prescriptions and hospitalizations. Clinicians and billing staff should be paying close attention to this trend and working with patients who are balancing the cost of care with its effectiveness.

One-third of Americans

It’s been a slow move from indemnity plans with minimal deductibles before generous copays kicked in, but nearly one-third of American workers are now covered by a high-deductible health plan (HDHP) of some sort, according to 2016 data from the Kaiser Family Foundation. Nineteen percent of American workers have an HDHP with a Health Saving Account and another nine percent have an HDHP with a more restrictive Health Reimbursement Arrangement.

With a high-deductible plan, consumers pay the insurance-adjusted rate of a visit, test or procedure out of pocket until the deductible kicks in. This means most routine care will be paid by the patient, leaving insurance for more intensive illnesses and injuries. It also means patients are asking more questions about the true cost of care and the value of a particular test or scan and the information it can give a clinician versus the cost of knowing.

“Channeling patients to high-quality, low-cost providers saves money, which the plan or the company can share with the patient.”

With only three out of ten workers and their families covered by HDHPs, clinicians might be lulled into believing the transparency issue can be put off for future discussion. But health plans and companies with self-insured plans already are looking closely at the cost and quality of the care they are paying for. Claims data provides a wealth of information about care episodes, the total cost and the outcomes.

Understanding the new consumerism

Narrow network plans incentivize patients to use particular providers, often with price and quality as common selection criteria. Even among wider provider networks, patients are increasingly receiving higher reimbursements or co-pays to use certain providers or provider/facility combinations for such procedures as hip replacements or cardiac procedures where a total common cost can be calculated. Channeling patients to high-quality, low-cost providers saves money, which the plan or the company can share with the patient.

Clinicians must be aware of the cost of the care they are providing, as well as such associated costs as support staff, billing and technology. Increasingly, providers are helping patients who have high-deductible plans by taking less payment than the full retail price of that visit. The new consumerism means that registration and collections staff must do more on the front end to collect money from the patient at the time care is given. And it also means providers are being asked more questions about generic medications, the need for a lab test or scan and alternative treatment plans that respect costs and individual preferences.

Consumerism hasn’t reached the mainstream — yet — but the tide is turning toward greater transparency in the pricing of medical visits and procedures. Consumerism represents a paradigm shift in the doctor and patient dynamic, and providers ignore this trend at their own peril.

Article written by: Steve Rasnick, President, Self Insured Plans & President, Health Care Administrators Association (HCAA). Article published on Media Planet, Future of Health Care

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How Reconciliation Can Change ACA

ACAWhile it will take support from Republicans and Democrats to fully replace Obamacare, a simple majority of Republican senators could repeal parts of the law through reconciliation. Here are just a few:

  • The individual and employer mandates can be reduced to zero
  • The Cadillac tax, currently delayed to 2020, could be repealed
  • Individual subsidies to purchase exchange coverage can be reduced to zero

Another welcome step requiring only a simple majority in the Senate would be increasing the limits on FSA and HSA contributions.

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Model Notice Informs Employees of Eligibility for Premium Assistance Under Medicaid or CHIP

An updated model notice for employers to provide information on eligibility for premium assistance under Medicaid or the Children’s Health Insurance Program (CHIP) is now available for download.

Annual Notice Requirement
Employers that provide coverage in states with premium assistance through Medicaid or CHIP must inform employees of potential opportunities for assistance in obtaining health coverage.

The employer CHIP notice must be provided annually before the start of each plan year. An employer may provide the notice applicable to the state in which an employee resides concurrent with the furnishing of:

  • Materials notifying the employee of health plan eligibility;
  • Materials provided to the employee in connection with an open season or election process conducted under the plan; or
  • The summary plan description.

The updated model notice includes information on how employees can contact their state for additional information and how to apply for premium assistance, with information current as of January 31, 2016.

Our section on CHIPRA (the Children’s Health Insurance Program Reauthorization Act) contains additional information on employer responsibilities related to the state Children’s Health Insurance Program.

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Reminder: Penalty Relief for Small Employer Payment Plans Expires June 30, 2015

health-insurance-costsIRS Notice 2015-17 provided limited transition relief from the assessment of excise taxes for small employers who reimburse, or directly pay, the premium for an employee’s individual health insurance policy. The transition relief applies through June 30, 2015.

Prohibited Plans
An “employer payment plan” is an arrangement under which an employer reimburses an employee for some or all of the premium expenses incurred for an individual health insurance policy, or an arrangement under which the employer uses its funds to directly pay the premium for an individual health insurance policy covering the employee. Pursuant to prior agency guidance, employer payment plans are generally considered group health plans that do not comply with certain market reforms of the Affordable Care Act (ACA), and therefore may be subject to a $100 per day excise tax per applicable employee under the federal tax code.

Transition Relief
The transition relief applies to employer healthcare arrangements that constitute employer payment plans if the plan is sponsored by a small employer—generally an employer with fewer than 50 full-time employees, including full-time equivalents, as determined in accordance with the “pay or play” rules.

An excise tax will not be asserted for any failure to satisfy the ACA’s market reforms by employer payment plans sponsored by small employers that pay, or reimburse employees for individual health policy premiums (or Medicare Part B or Part D premiums):

  1. For 2014, for employers that qualify as small employers for 2014; and
  2. For January 1 through June 30, 2015, for employers that qualify as small employers for 2015.

After June 30, 2015, such employers may be liable for the excise tax.

Additional Information

Notice 2015-17 also clarifies that employers can generally increase an employee’s compensation to assist with payments of individual market coverage, so long as the payment of additional compensation is not conditioned on the purchase of health coverage and the employer does not otherwise endorse a particular policy, form, or issuer. Due to the potential for significant penalties and the complexity of the law in this area, employers considering a cash (or payroll practice) option are strongly advised to consult knowledgeable benefits counsel to ensure full compliance with the law.

Additional information on these types of arrangements is available from the federal agencies in IRS Notice 2013-54, the ACA FAQs, and other IRS Q&As.

Be sure to visit the Cash for Premium Payments & Other Problem Plans section of your online HR library for more.