Advocates in the quest to overcome childhood obesity have gained an unlikely ally in recent years — the U.S. military.

More specifically, support is coming from senior retired military leaders, who are calling their movement to combat childhood obesity “Mission: Readiness.” Mission: Readiness describes itself as a “nonprofit, nonpartisan national security organization of senior retired military leaders calling for smart investments in America’s children.”

While the connection between childhood obesity and the military may not seem immediately obvious, this stat makes it abundantly clear. According to recent estimates, more than 1 in 5 Americans cannot join the military due to excess weight. That is a startling statistic especially for the military, where the stakes are high when someone cannot physically do the job.

As retired general Richard E. Hawley, a member of the Mission: Readiness Advisory Council, put it, “In the civilian world, unfit or overweight employees can impact the bottom line. But in our line of work, lives are on the line and our national security is at stake.”

Mission: Readiness contends that starting early and instilling good eating and nutrition habits have the potential to provide a lifetime of benefit while ensuring that future soldiers — the “employees” of the military — will be physically fit enough to perform the duties expected of them.

Some employers in civilian life also have physical requirements or barriers to entry for jobs in their companies, for example, in construction, where a worker must be able to lift a certain amount of weight. Even in jobs that don’t have these requirements, physical fitness can be an important part of workplace productivity. And a high fitness level is proven to improve cognitive function, positively affect mood, and increase efficiency.

On the flip side, there’s a very real cost to being overweight on the job — $73.1 billion to be exact. This number comes from a collection of research that estimates the cost of missed work days and a decrease in productivity associated with being obese. So while being out of shape may not directly affect the tasks an employee is assigned to, it has a very real effect on the worker and, to quote General Hawley again, “the bottom line.”

According to data from the Towers Watson Staying@Work survey, 75 percent of employers surveyed ranked obesity as a top health risk for their employees, second only to workplace stress (78%). Related to this, employers identified “weight/obesity (BMI)” as the number one health factor targeted by outcome-based wellness programs.

The Towers Watson survey makes the connection between company productivity and health clear — “high effectiveness” companies consistently had employees with obesity rates that were 25 percent lower than “low effectiveness” companies. (High and low effectiveness were assigned based on scores on the Staying@Work Overall Health and Productivity Effectiveness scorecard.)

Even though most employers don’t need employees in “fighting shape,” they do need people who are well and healthy enough to do their jobs — the employer’s bottom line and employee happiness depend on it.

OneExchange today marked an important milestone: 50 employer clients have used our private Medicare solution to transition multiple groups of customers.

Workforces can be complex, and changing benefits for multiple groups at once may not always be possible. Union contract negotiation timelines differ. Employers may want to test-drive a new approach like an exchange with a portion of their population first. And newly acquired companies may present an opportunity to streamline benefits administration after an initial group has already transitioned.

These are all reasons why employer clients have come back time and time again to OneExchange in addition to the reasons they chose Towers Watson’s Medicare solution in the first place.

Read first-hand what Phil Belcher, U.S. Health & Welfare Plans Manager for Eastman Chemical has to say about Eastman’s experience with OneExchange.

71% of companies that offer retiree health care report that they already offer retirees access to a private Medicare exchange or plan to by 2016 – just 10 years after our inaugural enrollment season as the U.S.’s first private Medicare exchange in 2006.

Read the full announcement here.


71% of companies that offer retiree health report that they already offer retirees access to a private Medicare exchange or plan to by 2016

The deadline has passed, but it’s not too late! No, we’re not talking about taxes — hope everyone filed on time!

The deadline in question was the March 31st deadline marking the end of the open enrollment period for health insurance on the public exchanges. A related deadline was April 30th, the hard deadline for the “high risk” subset of the population with plans poised to be cancelled.

The public exchange enrollment numbers continued to tick upwards in the weeks following the March deadline, reaching 8 million as of April 19th, 2014, the date the last official tally was reported. While enrollment numbers are slowing, it has become clear that even though the deadline has passed, some people continue to enroll.

The exceptions to the original deadline were well-documented — “high risk” patients, people in states with glitch-ridden exchanges, people who started to enroll before the deadline, but were not able to complete their applications, and people who were insured under a group health plan that is dissolving.

A lesser known fact is that the deadline for employer-sponsored insurance is similarly flexible. While October is typically when employer-sponsored health insurance is open for enrollment, many different situations merit exceptions and enable employees to enroll year-round. Here are just a few:

  • Starting a new job and enrolling in a health plan with a new employer for the first time
  • Leaving a job and losing employer-sponsored insurance
  • Getting married and wanting to add a spouse to an employee’s coverage
  • Turning 26 and becoming ineligible to be on one’s parents’ insurance

Bottom line, even though the deadline passed long ago, it was not a firm one and people without insurance still have options.

Are you one of them?

Under the ACA, it’s well understood that the cost of health insurance varies depending on your income, which determines how much of a government subsidy you qualify for, if any.

But that’s not the only variable: it also depends on where you live.

To give a sense of just how different the price can be, in the Minneapolis-St. Paul region, a 40-year-old will pay $154 a month for a PreferredOne plan, which is a silver-level plan on Minnesota’s state-run exchange, MNSure. Just across the border into Wisconsin, that same level plan — with a different insurer, doctors and hospitals — costs nearly three times as much.

Why such a difference?

According to Kaiser Health News, the least expensive areas “tend to have robust competition between hospitals and doctors, allowing insurers to wangle lower rates.” In these less expensive areas, doctors also tend to be salaried, rather than being paid by procedure. This removes the financial incentive to perform more procedures, saving money from the get-go.

Cost savings also come in areas with health systems that organize patient care in a cohesive way, rather than being a loose collection of specialists working in isolation. This type of health care network — sometimes called “integrated care” — fosters collaboration between all types of caregivers, from primary care doctors, to specialists, to nurses.

The most expensive areas for health care tend to be rural and isolated. These areas often have just one or two hospital networks, which allows a network to set prices without the price-controlling factor of competition.

Does high cost equal high quality?

Not necessarily. Higher cost, for example, does not guarantee higher quality. Consider areas such Aspen or Vail, Colorado, which are isolated and have just one hospital network. Residents of these areas will pay more due to the lack of competition, but that does not mean better care.

In fact, the best bet for affordability and quality lies in dense, populated areas where many insurers and provider networks exist — with lots of doctors and hospitals to support the population and which, therefore, must compete for business.

So while Aspen may be a good place to be a ski bum, it isn’t the best location for low-cost health care.

[See the complete list of the 10 least expensive areas to buy health insurance here. For the 10 most expensive, go here.]

Though the open enrollment deadline has passed, the number of people successfully enrolled in plans continues to tick upwards. Analysts predict that if the current rate of signups continues, eventually we’ll have as many as 30 million more people who will be newly insured. Right now, we don’t have enough primary care physicians to meet this new demand. There are many possible solutions. We’re exploring 3 of them in a series of posts:

1. Shortening the amount of time it takes to get a medical degree and expanding residency programs to get more doctors into the workforce more quickly.

2. Empowering medical professionals to take on more of the responsibilities of primary care physicians, working under their supervision. These professionals include physicians’ assistants, nurse practitioners, pharmacists, nurses and others.

3. Using technology – telephones, email and telemedicine — even remote monitoring — to extend the reach of physicians — especially for people in remote and rural areas.

This is Part III of a 3-Part Series. Click here for Part I and here for Part II in the series.

So far in this series, we’ve explored ways to get more physicians on the job more quickly and enabling other health care professionals to perform some medical services as the answer to the primary care physician shortage in this country. However, there is one option that doesn’t require adding more people to the mix at all. We’ll give you a hint: it involves the Internet.

According to the U.S. Department of Health and Human Services (HHS), more than three-quarters of rural communities in the U.S. have less than one physician serving every 3,500 residents.

So while adding more doctors to the pool may relieve shortages in urban hospitals or bring more specialists to the suburbs, it won’t have the same effect in towns and villages far off the beaten path.

As a result, many people who live in remote areas must travel hours to get to a doctor’s office or hospital. For them, a doctor’s appointment may never be convenient. The physicians who do work in rural communities must perform a broad scope of services — on any given day handling “everything from atrial fibrillation to pneumonia, and an asthma exacerbation to a cesarean section birth.”

Here’s where the Internet comes in.

Making it possible for physicians to “examine,” diagnose, and treat their patients remotely via devices included under the umbrella term “health information technology” (HIT) may be the answer providing primary physician care to these remote communities. It’s called telemedicine and it’s growing in use and popularity.

Read the rest of this entry »

Retirees receive funding for benefits for life

A new retiree medical exit solution announced March 24th by Towers Watson uses customized group annuities and an innovative transaction structure to overcome the traditional hurdles to an exit — with positive tax implications for employers and preservation of benefits for retirees.  Longitude Solution is available to existing and prospective clients of the Towers Watson OneExchange private Medicare exchange.

Both public and private sector employers have long sought an exit solution to address the high cost of retiree medical benefits as well as the many regulatory and legal obligations associated with a retiree medical program. Rising health care costs, especially for older individuals, make offering retiree medical increasingly unaffordable, even for the largest organizations.

In addition, retiree medical creates balance sheet liabilities and income statement expense while diverting management time from more strategic benefits strategies.

Why haven’t employers exited retiree benefits before?

The fact that more employers haven’t simply stopped providing the benefit speaks to the complexity and risk of an exit.

Public sector employers and many private sector companies have long-standing contracts with unions that guarantee funding of retiree medical benefits for life. Even without a union or written contract, no employer wants to be sued by its retirees.

Beyond the possibility of a lawsuit is the concern employers have about ending a benefit that seniors on fixed incomes depend on as well as the negative press that might be associated with doing that.

Hurdles (and their solutions) to an annuity-based exit

Employers and their benefits consultants have long known that the ideal way to exit retiree medical is through a group annuity. However, to be successful, the annuity would have to do the following three things: 1) end an employer’s legal obligation once and for all, 2) avoid adverse tax consequences for both employers and retirees, and 3) create economic value for both parties.

But before a group annuity could be part of a retiree exit solution, the following four hurdles had to be overcome:

Hurdle #1: Medical inflation is a risk that cannot be hedged, and an annuity for retiree medical benefits cannot be issued unless medical inflation risk has been eliminated.

Solution: Medical inflation risk is eliminated when an employer moves from defined benefit (DB) approach to a defined contribution (DC) plan because benefits are capped to a fixed dollar amount per year.

If the transition is made with Towers Watson’s OneExchange private Medicare exchange, the added benefit is that the employer has a platform for administering the annuity and retirees don’t have to change how they purchase plans and get reimbursed for medical claims.

Hurdle #2: Retirees do not pay taxes on medical benefits funded through a tax advantage account such as an HRA, but they would have to pay taxes on existing annuity benefits as income.

Solution: By specifying that distributions can only be used for medical insurance premiums and other medical costs, an employer can mirror its existing plan design while shielding distributions from taxation.

Hurdle #3: Employers cannot deduct the full annuity payment at the time of purchase because premiums paid for long-term contracts, like annuities, must be amortized for tax deductions.

Solution: The annuity solution includes a series of transactions that are commonly used in retirement benefit plans that make the purchase price deductible right away.

Hurdle #4: Employers must address commitment made to retirees before removing the retiree medical liability from the balance sheet.

Solution: The certificates issued under the annuity are irrevocable commitments that transfer an employer’s liability to the insurance company, eliminating the employer’s obligation.

Fulfillment of obligation, peace of mind

With these hurdles overcome, both public and private sector employers can use the Towers Watson annuity-based exit solution to fully exit their legal, accounting, and regulatory responsibilities. The solution should also give retirees peace of mind because they would have tax-free funding for medical benefits from a highly rated insurance company for the rest of their lives. 

This type of retiree medical exit solution is the end of a journey that many employers began decades ago — at the time, with no clear path to exit in sight — and can now finish, in a way that meets the needs of employers and retirees alike.

For more information about the Longitude Solution, read the article in Tower’s Watson Corporate Finance Matters.

ACERA uses Towers Watson's OneExchange

Bay Bridge at night with Alameda County in the background

Each year, Kathy Foster and team analyze the funds in their organization’s trust to figure out how long the money will last. More than 20,000 people rely on those funds when they retire – for income and health coverage – one of the biggest costs in retirement.

Foster is Assistant CEO of the Alameda County Employees’ Retirement Association (ACERA) – steward of the retirement benefits fund for the nation’s seventh largest county.

In February 2012, ACERA was one of California’s first counties to use a private Medicare exchange. A year later, ACERA is sharing how it made the decision, what the move entailed and taking a 20/20 look back to measure projections.

Read Building a Bridge to the Future: ACERA’S Retiree Medical Strategy.

Learn more about Towers Watson’s OneExchange solution for retiree healthcare.

If the ACA is successful, eventually we’ll have as many as 30 million more people who will be insured. As it stands, we don’t have enough primary care physicians to meet this new demand. There are many possible solutions. We’re exploring 3 of them in a series of posts:

1. Shortening the amount of time it takes to get a medical degree and expanding residency programs to get more doctors into the workforce more quickly.

2. Empowering medical professionals to take on more of the responsibilities of primary care physicians, working under their supervision. These professionals include physicians’ assistants, nurse practitioners, pharmacists, nurses and others.

3. Using technology – telephones, email and telemedicine — even remote monitoring — to extend the reach of physicians — especially for people in remote and rural areas.

This is Part II of a 3-Part Series. Click here for Part I in the series and come back to the blog for Part III in coming weeks.

First, some startling statistics.

Doctors spend an average of just 12 percent of their day with patients. According to another study, new doctors spend just 8 minutes with patients during an appointment providing “direct care.” The rest of their time is spent filling out forms or reading charts, also known as “indirect care.”

Doctor time is at a premium as it is — split between roles as form filler, prescription writer and primary care giver — and their time is about to stretched even thinner. As people newly insured under the Affordable Care Act go to primary care physicians (PCPs) for the first time, doctors will be hard-pressed to keep up.

This is where nurses and pharmacists come in.

Many health care experts have suggested that transferring some of the responsibilities of PCPs to local pharmacists and nurse practitioners will free up physicians and result in better care for patients.

The Doctor Pharmacist Is In

“[Pharmacists] are the most overeducated and underutilized healthcare professionals in the U.S.,” said R. Pete Vanderveen, dean of the USC School of Pharmacy. “It doesn’t take eight years of education and a professional doctorate to fill a bottle with pills.”

Pharmacists can already give immunizations and provide some in-person consultations. Some legislation is already on the books, in places like California, that goes further — enshrining in law an expanded role for pharmacists.

Read the rest of this entry »

Wellness data is very “in” these days. Wearable technology such as FitBit allows individuals to track their fitness activity and apps let people track calorie consumption or weight loss.

The recent data released on Medicare doctor pay has unleashed a firestorm of controversy because of the amount of money some doctors made from treating Medicare patients — as much as $21 million in the case of one opthamologist. The Centers for Medicare and Medicaid Services released the data this week, for the first time in 35 years. The data had been held subject to the resolution of  an injunction, sought by the American Medical Association, which had been in place since 1979.

But it’s not all bad news. Think of this as another kind of wellness data. Essentially it is wellness data, a level up — data on the “wellness” not of the individual, but of the Medicare system as a whole.

The specific dollar amounts will be repeated and repeated as evidence of excess and even criminal activity on the part of some doctors. But the longer term takeaway is that data facilitates transparency. [To see exactly what reimbursements were state by state, check out this interactive map from USA Today.]

“Taxpayers have the right to understand what is being paid for and how it is being paid for,” said Jonathan Blum, principal deputy administrator for the Centers for Medicare & Medicare Services.

In addition to it being a taxpayers’ “right,” having this full data transparency allows Medicare administrators to identify areas of excess and inefficiency and consumers to compare prices. It also allows all of us to consider broader questions about health care in the United States, for example, why some surgeries are performed more or cost more in one geographic area as opposed to another.

Shining the light on this data opens up the Medicare program to be improved, streamlined and  hopefully, made sustainable for generations to come.

The New York Times called it a “quiet sea change.” The Centers for Medicare & Medicaid Services calls it “Change Request 8458.” Regardless of what it’s called, a relatively unpublicized update to the Medicare policy manual made in January 2014 will have a profound impact on millions of Americans who suffer from chronic diseases that are progressive and for which certain types of care can only maintain a patient’s condition.

In other words, the update makes it clear that improvement is not necessary to receive Medicare coverage for skilled care.

The update was a long time coming. The process began back in 2011 when Glenda Jimmo, along with five other Medicare beneficiaries and seven national organizations (including the National Multiple Sclerosis Society, the Parkinson’s Action Network, and the Alzheimers Association) took Health and Human Services director Kathleen Sebelius to court for adopting “an unlawful and clandestine standard to determine whether Medicare beneficiaries are entitled to coverage.”

This standard reduced or outright denied coverage for services that were not actively making the patient better. Plaintiffs argued that people “not expected to improve” were being treated as “less worthy” of coverage. Proof was in language in the manual that described people in this category as needing “maintenance services only” or as patients who had “plateaued.”

Jimmo and the other Medicare recipients won their case in December 2013, leading to the manual updates in January 2014. An excerpt from the change order explained the intent of the change: “to clarify that coverage of skilled nursing and skilled therapy services… does not turn on the presence or absence of a beneficiary’s potential for improvement, but rather on the beneficiary’s need for skilled care.”

This change marked a victory for Medicare recipients struggling to get coverage for care outside the bounds of purely “improvement-based” treatment. What’s most important is that people who have these conditions – Alzheimer’s, Multiple Sclerosis, and Parkinsons, just to name a few – need to know about this as it is hugely important to them and their quality of life.


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