Many employers don’t understand alternative provider delivery models and payment reform. As a result, they may miss a significant opportunity to improve health and financial results for their workforce and business, according to a study by Aon and Catalyst for Payment Reform. Despite their lack of understanding of the models, 60% are providing or are considering providing a financial incentive for employees and dependents to use these new models through plan design changes, narrow network options, HRA/HSA contributions, or cash.
The study reveals the following:
- 75% don’t understand payment transformation models.
- 51% don’t understand the cost and quality data provided by their carriers related to new models like Accountable Care Organizations (ACOs).
- 71% are unaware or need to learn more about the attribution process and how they are directly contributing to the payment of these new provider delivery models.
“Employers have the potential to be one of the strongest voices in driving systematic change, but if they don’t understand it, they won’t make it a priority or demand validation for the improvement that is needed,” said Mike Taylor, senior vice president of Delivery System Transformation at Aon Hewitt. According to a separate Aon Hewitt 2014 Health Care survey of more than 1,200 employers, 65% of said that provider payment models that promote cost-effective, high quality health care outcomes will be a part of their strategy. Of those, 12% say it will be one of their three highest priorities. Taylor said, “Employers are increasingly making innovative provider network structures an important part of their strategy, which will help to improve health care purchasing and shift the payment focus towards value based reimbursement and support providers who produce higher quality outcomes.”
While few employers have adopted provider network structures, that number is expected to increase in three-to-five years:
- 24% of plan sponsors steer participants to high quality hospitals or physicians for specific procedures or conditions through plan design or lower cost. Another 56% are considering doing so in the next three-to-five years.
- 18% use integrated delivery models, such as patient-centered medical homes, to improve primary care effectiveness, and another 56% plan to do so in the next three to five years.
- 11% contract with hospitals or other health providers directly in specific locations, and another 28% plan to so.
- 10% have adopted reference-based pricing, and another 58% plan to do so.
For more information, visit www.aonhewitt.com.
Millions Would Drop Coverage If Subsidies Were Eliminated
Eliminating government subsidies for low- and moderate-income people through federally run health insurance marketplaces would reduce enrollment in the individual market by more than 9.6 million, according to a new RAND study. If the Republican controlled Congress strikes down the subsidies, enrollment in the ACA-compliant individual market would drop to 4.1 million in 34 states. Individual market enrollment would drop 70% among people buying policies that comply with the Affordable Care Act.Christine Eibner, the study’s senior author and a senior economist at RAND said, “The disruption would cause significant instability and threaten the viability of the individual health insurance market in the states involved. Our analysis confirms just how much the subsidies are an essential component to the functioning of the ACA-compliant individual market.”
Premium costs for a 40-year-old nonsmoker purchasing a silver plan would rise from $3,450 annually to $5,060. In addition, unsubsidized individual market premiums would rise 47% in those states. The hike would correspond to a $1,610 annual increase for a 40-year-old nonsmoker with a silver-level plan.
The Supreme Court has agreed to hear a court case (King v. Burwell) that challenges the use of government subsidies to help low- and moderate-income people buy health insurance in marketplaces operated by the federal government. Ending federal subsidies would have a bigger effect in states with federally run marketplaces than in states that run their own marketplaces. States with federally run marketplaces generally have more low-income participants who are more likely to drop insurance without subsidies. Those states also had higher uninsurance rates prior to adoption of the Affordable Care Act. For more information, visit www.rand.org.
Many Uninsured Are Still Not Familiar With the ACA
Uninsured Americans give these top reasons for not having health insurance: they still find health insurance unaffordable; they disagree with the principle of the Affordable Care Act (ACA); they are not aware of the mandate; or they don’t know how to how to apply for coverage, according to a study by the Transamerica Center for Health Studies (TCHS).
Fifty-two percent of uninsured Americans are not informed about the ACA, and nearly four in 10 have not heard about the health exchanges. Sixty-two percent of uninsured Americans have heard of the exchanges, but only 3% have called one of the exchanges or spoken to a navigator or guide about an exchange. While most of the uninsured remain unsure of their plans about health insurance, 26% plan to get or apply for new coverage in 2015.
Hector De La Torre, executive director of the Transamerica Center for Health Studies said, “The remaining uninsured continue to be the least informed about how and where to get health care insurance, presenting unique challenges come tax season. The uninsured continue to be disproportionately younger, less likely to be employed, and less able to afford routine health costs than the general population.”
The study also finds that the majority of Americans are satisfied with most elements of the health care system; 63% don’t plan on making any changes to their health care in 2015. The general population is most satisfied with the health care system’s focus on preventive care (79%) and their health insurance access (77%). However, nearly four in 10 are dissatisfied with the availability of wellness discounts available through their employers and are particularly interested in more offerings related to preventive screenings/vaccinations, exercise programs, and healthy food options.
The following are other key findings:
- While only 25% of uninsured Americans can afford routine health expenses, 90% of continuously insured Americans and 61% of newly insured Americans are able to afford their routine health expenses.
- More than half of the general population pays less than $1,000 in insurance premiums annually; 16% pay more than $3,000 per year.
- 80% of uninsured Americans say they spend less than $500 a year on routine health expenses, compared to 72% of the newly insured and 55% of the continuously insured who state the same.
- While the majority of Americans support most aspects of the ACA, a small majority object to the tax penalty for noncompliance with the individual mandate.
- 54% of Americans oppose the new law’s requirement to acquire health insurance or pay a tax penalty for opting out.
The general population supports the following aspects of the ACA:
- Allowing everyone to qualify for health insurance despite any pre-existing conditions (90%).
- Removing annual or lifetime limits on coverage (89%).
- Providing coverage under a parent’s plan for children up to age 26 (79%).
- Providing eligible individuals and families who earn less than $92,000 a year with government subsidies that lower the cost of health insurance plans (78%).
Half of the general population does not expect their employer to make any changes to their health care benefits. Twelve percent expect their employer to reduce or eliminate a company contribution to cover health insurance costs. To get the full report, visit https://www.transamericacenterforhealthstudies.org/health-care-research
How Employees View Their Health Benefits
Workers rank health insurance as their first or second-most important benefit, according to a study by The Employee Benefit Research Institute (EBRI). Sixty-five percent say health insurance is extremely important while 21% say it’s very important. Fifty-eight percent plan to work longer than they would like in order to continue getting health insurance benefits. When asked why, 43% cited the cost of individual health insurance, and 15% cited the cost of medical care.
Thirty-two percent of workers say that an employer’s benefit package is extremely important while 44% say it’s very important. In fact, benefits have been the reason that 21% of workers accepted jobs, quit jobs, or changed jobs. Many workers are not especially satisfied with their employer’s benefit package. Only 11% are extremely satisfied; 33% are very satisfied, 34% are somewhat satisfied, and 11% are not too satisfied or not at all satisfied.
Job satisfaction is strongly tied to satisfaction over benefits. For example, 55% of those who are extremely satisfied with their benefits are extremely satisfied with their job. In contrast, less than 10% of those who are only somewhat satisfied with their benefits are extremely satisfied with their job. For more information, visit www.ebri.org
Medicare Offered Wrong Information on Aetna Plans
California Health Advocates reports that The Medicare’s Plan Finder tool had incorrect information on Aetna and First Health Part D plan network pharmacies during the AEP, which has left some members thinking their pharmacy is in-network when it is not. This discrepancy results in much higher out-of-pocket costs. Medicare is giving affected beneficiaries the right to a special election Period to change plans.
Early Breast Cancer Screening Tool Saves Millions
Patients who get breast tomosynthesis for their annual breast cancer screening face fewer recalls, fewer diagnostic procedures, and earlier detection. They also need less costly treatment than patients who use traditional, 2D digital imaging alone, according to a study by Truven Health Analytics. The study was published in the January edition of the Journal of ClinicoEconomics and Outcomes Research.
Despite the initial extra cost for breast tomosynthesis, patients who got the procedure, in addition to traditional imaging, saved $28.53 per woman screened, or $0.20 per member, per month in follow-up service costs. Breast tomosynthesis enables earlier detection of cancer. As a result, women are more likely to be treated in Stage 1 of the disease, which requires less invasive procedures and lower costs than diagnosis at a later stage. To get a full copy of the study, click this link: http://truvenhealth.com/study/hologic/tomosynthesis-breast-cancer-value-analysis.
How Health Payers Will Engage Consumers in 2015
In 2015, U.S. payers will adopt a multiple-channel model to engage consumers, according to a paper by IDC Health Insights. The paper also finds the following:
- Payers will form more partnerships with providers that support value-based reimbursement, global payments, and pay-for-performance reimbursement.
- More payers will implement private cloud solutions, including those featuring software-as-a-service (SAAS) to manage data collection, aggregation, and analytics.
- More payers and other healthcare organizations will face cyber attacks, requiring a multi-pronged security strategy and investments in IT.
- Challenged by the increasing magnitude of clinical, analytical, and financial data, more payers in 2015 will need to look at investing in data management and warehousing.
- More payers, particularly larger organizations, will consider it solutions provided through outsourced services, including business process outsourcing.
- More payers will participate in the government-funded lines of business including Medicare advantage, Medicaid, and dual eligibles, resulting in more demand for specialized it solutions and support services.
- Payers will continue to adopt more of a population health management approach to care and disease management.
- More payers will develop non-insurance lines of business, including innovative health IT solutions that address consumer communications and support private health insurance exchanges.
- Payers will increasingly assess and develop private health insurance exchange solutions.
For more information, visit www.idc.com.
Unions Strike Against Kaiser Over Mental Health
The National Union of Healthcare Workers went on strike to protest what it says are Kaiser’s chronic mental healthcare failures. More than 12,000 people emailed Kaiser executives by signing onto a new petition to reduce wait times for those seeking critical treatment.
Kaiser Permanente is already paying a near record-breaking fine of $4 million for not providing timely care, forcing patients with serious mental health illnesses to wait weeks or even months for urgent care. The union says that Kaiser has refused to staff its mental health departments with enough clinicians to handle the ever-rising caseload. Dr. Paul Song, executive chairman of Courage Campaign and practicing oncologist said, “Plain and simple, health insurance giants like Kaiser are responsible for decreasing services and jacking up premiums, and people all over the state are waking up to it. Kaiser needs to come back to the table and join commonsense proposals like clinician management committees to work together with mental health workers to determine facility staffing needs and provide all Californians with the coverage they deserve and pay for.” To view the petition, visit: http://act.couragecampaign.org/sign/KaiserStrike_NUHW.
John Nelson, vice president of Government Relations, Kaiser Permanente said,
NUHW is a small California union representing fewer than 5,000 of Kaiser Permanente¹s 175,000 employees. Since its creation in 2009, it has never negotiated a contract with Kaiser Permanente. In fact, NUHW stands alone as the only union that has been unwilling or unable to reach a fair agreement concerning a contract covering our employees during that time.” Kaiser Permanente is committed to finding a solution that benefits our employees, and NUHW must have the same commitment. We are committed to continuing to bargain whenever and wherever possible to avoid a strike, and we are urging our employees to resist the call to leave members and their patients for the weeklong strike called by NUHW. NUHW has spent the last several years publicly attacking our mental health services while at the same time resisting important steps we are taking to enhance mental health care for our patients. Although NUHW has been using intimidation and obstructionism to try to achieve its goals, we will not let that stop us from continuing to make progress on addressing the national challenge facing all mental health care providers. We remain fully committed to meeting that challenge.Our mental health employees are critical to our efforts to continue improving mental health care for our patients. We believe that by working together, we can better address these issues and make progress on behalf of our patients, and the industry as a whole, continuing our focus on what really matters providing our members with the best health care possible.
Covered California Steps Up Messaging About Tax Penalties
Covered California is stepping up messaging about the rising penalties for not having health insurance. Covered California executive director Peter V. Lee said, “It’s important that consumers understand now that the cost of remaining uninsured is rising. Families earning $70,000 a year could pay close to $1,000 in their taxes if they remain uninsured in 2015.”
The penalty, known as the “shared responsibility payment,” takes effect for 2014. Many who were uninsured will see an impact when they prepare their taxes due in April of this year. The penalty rises substantially for 2015, meaning it’s important that all uninsured Californians know this and take steps now — before open enrollment ends — to avoid significant penalties when they prepare their 2015 taxes due next year.
In 2016, the shared responsibility payment for those without health insurance rises even more. The same family of four that would pay $988 for not being covered in 2015 is likely to pay $2,085 in 2016. Individuals and families with incomes that would qualify for MediCal would also be affected if they don’t have coverage.
Covered California enrollees who had subsidized insurance in 2014 will get health insurance marketplace statements to use when filing their taxes due this April. Click the following link to see a table with estimated penalties for not having insurance in 2015. http://news.coveredca.com/2015/01/covered-california-steps-up-messaging.html
In related news, Covered California and DHCS released updated data on new enrollment during the open enrollment period ending Feb. 15. More than 1,099,200 people sought coverage and were determined eligible for private health insurance and eligible or likely eligible for MediCal from the start of open enrollment on Nov. 15 through Jan. This includes 304,394 eligibility determinations and an additional 217,146 plan selections for private coverage, as well as 466,778 enrollments into MediCal coverage and 110,913 who are likely eligible for MediCal. Since January 2014, MediCal has enrolled more than 2.2 million consumers. MediCal enrollment is year-round. For more information, visit www.CoveredCA.com and click on the “Find Local Help” button.
Commissioner Issues Emergency Regulation Over Networks
California’s Insurance Commissioner, Dave Jones, issued an emergency regulation to ensure that health insurers have enough medical providers in their networks to provide timely access to medical care. The emergency regulation will require insurers to do the following:
- Include enough primary care physicians who accept new patients to accommodate enrollment growth.
- Include enough primary care providers and specialists who have admitting and practice privileges at network hospitals.
- Consider the frequency and type of treatment that’s needed to provide mental health and substance use disorder care when creating the provider network.
- Adhere to and monitor new appointment wait time standards.
- Report to the Department of Insurance about their networks and changes to their networks to the on an ongoing basis.
- Provide accurate provider network directories to the Department as well as policyholders and the public.
- When there aren’t enough in-network providers, make arrangements to provide out-of-network care at in-network prices.
- Require network facilities to inform patients, ahead of time, when an out-of-network medical provider would be providing a non-emergency procedure or care.
The emergency regulation addresses problems with access to doctors, hospitals, and other medical providers in 2014 when many health insurers reduced their medical provider networks and/or shifted to offering exclusive provider organization (EPO) health insurance products with no outof-network benefits. Consumers have complained about having trouble getting appointments with doctors, traveling long distances to get in-network medical care, and finding that the health insurer’s provider directory listed doctors that were not in the network. Jones said, “Consumers have been forced to pay huge out-of-network charges when their health insurer fails to provide adequate medical providers in their network or when care is provided by outofnetwork providers without even informing or asking the consent of the patient.”
Job Seekers Say Benefits Are Very Important
Three quarters of workers say that the employer’s benefit package is extremely (32%) or very (44%) important in their decision to accept or reject a job. Thirty-four percent are only somewhat satisfied with the benefits that their current employer offers, and 22% are not satisfied. Eighty-six percent of workers say that employment based health insurance is extremely or very important, far more than for any other work place benefit. Workers identify lower costs and increased choice as strong advantages of voluntary benefits, according to a study by the Employee Benefits Research Institute.
The Top 10 Regulatory Issues for Small Businesses
The following are the 10 regulatory issues for small businesses that Paychex has identified for 2015:
- Tax Extenders and Tax Reform: On December 19, 2014, President Obama signed the Tax Increase Prevention Act of 2014 into law. Approximately 50 tax breaks, known as “tax extenders,” were expanded retroactively through December 31, 2014. Some of these, such as bonus depreciation and accelerated expensing of certain asset purchases, are particularly beneficial to small businesses. IRS leadership has noted that despite the delay in the initial passage of the extenders, the tax-filing season will start on time; however, due to budget constraints, the processing of returns and refunds may be affected. Additionally, the short-term extension could complicate a possible rewrite of the tax code in 2015. Business owners will want to monitor any tax reform developments for potential ramifications.
- The Affordable Care Act: The New Year brings additional responsibilities for businesses defined as Applicable Large Employers in the Employer Shared Responsibility (ESR) provisions of the Affordable Care Act (ACA). Applicable Large Employers will need to be prepared to meet new IRS mandates to file annual information returns with the IRS and provide statements to their full-time employees about the health insurance coverage the employer offers in 2015.
- Taxation of Online Sales: Taxation of online sales is likely to be an issue affecting many businesses this year. To level the playing field between brick and mortar retailers and online merchants, and respond to state concerns about lost revenue, the U.S. Senate passed the Marketplace Fairness Act in May 2013, which would have allowed states to collect sales tax on purchases made by state residents regardless of where the seller is located. The bill stalled in the 2014 session of Congress. Because of the amount of tax revenue at stake, businesses should expect this legislation to be resurrected this year.
- Immigration Reform: President Obama announced his plan to use his executive authority to make changes to immigration laws. Employers will need to continue to monitor changes to the immigration system that may affect Form I-9 procedures and work authorization documentation, as well as potential labor gaps if newly authorized workers decide to look for higher paying positions.
- Overtime Regulations: The Dept. of Labor is expected to release proposed guidelines in the first quarter of the year to modernize and streamline the existing overtime regulations under the Fair Labor Standards Act. The revised regulations are expected to expand the number of workers eligible for overtime pay by increasing the minimum salary levels required for exempt status employees, and by expanding the duties defining “administrative” employees exempt from overtime pay. In the interim, employers are encouraged to review their employee classifications, focusing on job duties and salary levels for those workers classified as exempt. Employers should anticipate the potential need to track and pay overtime rates where applicable.
- Employment-Related Legislation: The trend of local and state governments passing minimum wage increases is expected to continue. In addition, hiring procedures and employment applications will need to be revised for employers in jurisdictions covered by “ban-the-box” laws that prohibit pre-employment inquiries into applicants’ criminal histories. Lastly, paid sick leaves and the tracking and notice requirements that go along with this benefit will require employers to review current sick day benefits and comply with what can be complex provisions in order to avoid violations.
- Privacy: After some have called 2014 “The Year of the Data Breach,” there is a greater likelihood that in the upcoming 2015 legislative session, Congress will look to pass baseline cyber-security legislation. Businesses should begin analyzing the relationships between technology and their customers’ personal data. Customer privacy should be protected through secure networks, timely detection of malware, enhanced credit card security, and strong encryption. Businesses can expect increasingly vigorous enforcement actions from agency regulators following violations of Federal and state privacy laws.
- Retirement: In 2015, the U.S. Treasury will introduce its non-mandatory workplace savings program, which will allow employees to place deferred funds into a program that is similar to a Roth IRA. Additionally, 14 states have proposed legislation that would create workplace savings programs through employers not currently offering a retirement plan for their employees. Other proposed legislation would offer further incentives to small businesses to open retirement plans, provide for lifetime income information on plan statements, and require further disclosures around target-date funds included as plan investment options.
- FUTA Credit Reduction: Some states continue to have outstanding federal unemployment loans in 2015. Employers in these states will continue to have their FUTA credit amount reduced as a way to pay back the outstanding debt. The final list of credit reduction states was published by the Department of Labor in November. Employers in the impacted states should plan to pay higher FUTA taxes for tax year 2015, due in January 2016, and may want to consider planning for the additional tax amount early in order to avoid an unexpected tax expense at the end of the year.
- Banking Developments: With the surge in use of mobile payment applications such as Apple Pay, businesses will also see the parallel move toward increased payment security and mobile payment acceptance. Small businesses should consider implementing technology that will allow them to accommodate these trends. Additionally, heightened regulatory pressures on banks to know the parties they are dealing with may result in increased requests for data from business owners or extended account-opening procedures. Payroll cards will also continue to be an area of focus in 2015, as several states are expected to introduce legislation relating to this popular method of pay. Employers should ensure their payroll card provider is up to speed on the evolving regulations in this area.
For more information, visit http://www.slideshare.net/Paychex/top-tenregulatoryissuesforsmallbusinessesin2015.
Dental Access is Getting Worse For Adults
Although the Affordable Care Act (ACA) has improved children’s access to dental services, the situation for adults is getting worse, according to a study by the American Dental Assn. The top reasons why adults don’t intend to visit a dentist in the next 12 months are an inability to pay for care and a lack of perceived need. Other important reasons include lack of time, transportation problems, anxiety, and difficulty finding a dental practice that accepts Medicaid.
The study, which focused on Maryland’s dental Medicaid program, found that since 2012, per-capita outpatient dental emergency department visits for dental problems have decreased in the state, especially among children and adults ages 21 to 40. The decrease in outpatient ER visits for dental pain among children is likely attributable to reforms. For more information, visit www.ada.org/en/science-research/health-policy-institute.
White Paper on Same Sex Financial Planning
Prudential released an update to its white paper, “Financial Planning Considerations for Same-Sex Couples After Windsor.” In a new development – the Social Security Administration now recognizes some non-marital legal relationships as well. Named for Edith Windsor, the plaintiff in the federal case United States v. Windsor, the Windsor decision refers to the overturning of Section 3 of the Defense of Marriage Act (DOMA), which limited the definition of marriage for federal benefit purposes to opposite-sex unions. As a result of the Windsor decision, same-sex marriages under state or a foreign jurisdiction are now recognized for federal law purposes.
The original paper explored how the 2013 landmark decision to overturn Section 3 of DOMA afforded legally married same-sex couples many of the employee benefits and financial planning strategies once available only to opposite-sex married couples.
The marriage equality landscape has continued to evolve since the original paper was published. “As of January 2015, 36 states plus the District of Columbia now recognize same-sex marriage,” says James Mahaney, author of both papers and vice president, Strategic Initiatives, at Prudential.
Mahaney added the Social Security Administration has historically only recognized legal marital relationships among couples based on the laws of the state in which they reside, regardless of the state in which they were married. The Social Security Administration now recognizes some non-marital legal relationships as well. For more information, visit www.news.prudential.com.
Health Care App
Cigna released the of Cigna Compass, a web application designed to help consumers build their personal health care team, save money, and get the most from their plans. Cigna Compass synthesizes data related to a consumer’s medical plan use, biometric data, incentive information, claims history, and coaching program involvement. Those insights create personalized alerts to notify customers of their top opportunities to improve their health and lower their health care costs. For more information, visit www.cigna.com.