To help employees cope with rising out-of-pocket medical expenses, a growing number of employers are offering employees gap insurance. Gap insurance is supplemental insurance that covers the difference between what a core medical insurance plan pays for services and the contribution a policyholder is expected to make. Common examples of gap insurance include coverage for hospital stays, accidents, and critical care for major illnesses.

Unlike core medical plans, employers tend to offer gap insurance as voluntary insurance, meaning that employees pay for it themselves, although often at a discount negotiated by their employer.

Another difference is that gap insurance is not constrained by the rules covering core medical coverage. This means, for example, that individuals with pre-existing conditions can be excluded from coverage. However, in a recent article in the Wall Street Journal on the growing popularity of gap insurance, Amy Hollis, a senior consultant for Willis Towers Watson who leads the voluntary benefits practice for the company, pointed out that many providers will remove this provision for an employer.

As an alternative to gap insurance, Hollis also said that some employees might be better off putting money into a tax-advantaged health savings account and using those funds to pay out-of-pocket expenses. But for employees with a low tolerance for risk or who have access to plans that are relatively inexpensive, gap coverage could make sense.

To read the entire article in the Wall Street Journal, click here.

How To Choose An EAP

January 19, 2017

To alleviate a wide variety of issues, including the effects of workplace stress, financial concerns, and relationship problems, many employers offer services called Employee Assistance Programs (EAPs). Despite many employers offering them, however, EAPs are often not fully used by employees.

A recent article in the Society for Human Resource Management (SHRM) offers tips for employers looking to increase EAP participation. These include picking right the EAP for the size of their workforce and ensuring that EAP counselors have the right education and experience to meet employees’ needs. Quoted in the article, Mandi Conforti, senior consultant at Willis Towers Watson, noted in particular that employers should look for counselors who can properly assess employees needs. Said Conforti, “You need counselors who are clinically trained to do biopsychosocial evaluations, because many people contacting an EAP have more than one problem they are dealing with.”

Not surprisingly, the most effective EAPs are those that are customized to the needs of a specific workforce. This is especially true when there are high rates of issues such as alcohol or substance abuse.

To read the article in Society For Human Resource Management (SHRM), click here.

For more information on EAPs, see our previous OneExchange blog post on the topic here.

robharkins

For highlights of my perspective in articles and blogs, see my comments on LinkedIn and Twitter.

This post is part of our Exchange Innovator Series featuring leading private exchange, health care reform and Medicare experts from Willis Towers Watson. See John Barkett and Sherri Bockhorst.

I’m Rob Harkins, private exchange practice leader for mid-market employers, for Willis Towers Watson’s private exchange business sector.

As part of the Health and Benefits segment, it’s my mission to ensure satisfaction internally, as well as externally, with our leading mid-market clients, accessing a modernized technological approach to benefit delivery, whether their need is individual Medicare, pre-65 retiree benefits, or group coverage.

I’ve been heavily involved during the merger of Willis and Towers Watson, enhancing the transition and acting as a bridge between our Health & Benefits consulting group and our base of mid-market employers, with populations ranging from the hundreds to the tens of thousands.

My health insurance roots

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Baltimore with my wife and friends

I cut my teeth on exchanges at Extend Health – a start-up that was acquired by Towers Watson in 2012. Having worked on Medicare Advantage with a focus on state and public sector employers, I was a steward for our channel partner relationships between consultants that wanted to provide a private Medicare exchange to their clients, including Towers Watson and Willis. I eventually moved from Extend Health to become the exchange practice leader at Willis. Collaborating with Liazon, I developed the Willis private exchange platform. In the process, I kicked the tires on every private exchange in the market in order to create something that would deliver true value to our employer clients and their employees.My education was in health care administration, which provided a terrific springboard for my career. I’ve worked in a range of companies, from start-ups to major national health insurance carriers, and this breadth of experience helped me to develop products and solutions that synched with innovation in the health care space.

 

My attention and focus is always drawn to what we can do operationally to innovate with technology and engage employees. I’ve always been the change agent. My true passion is looking at what is on the horizon and integrating the very best components of the past, present and the future into one integrated vision. One of my strengths is getting employers to understand how and when change can be beneficial. I believe in identifying various opportunities that can bring clients value, and then helping them get there by painting that picture for them.

Where I see health insurance going

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I love the outdoors and hiking

One of the top reasons employers are now turning to private exchanges is the changing workforce.

A digitally savvy younger workforce does not want to access benefits from an antiquated system. They just don’t. No one wants to get into a car and wind down a window or push a button to lock a door. Health exchanges are to benefit delivery what the smartphone has been to the telephone.

The benefits world moves very slowly, especially when it comes to employers who have a very paternalistic approach to employees. But how can we continue to deliver on paper or in a clunky benefit administration system that has to rival the ease with which we can buy cars? The system has to be very sophisticated.

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Very proud of my big family

Private exchanges are bringing benefits into the 21st century—with access and choice. Ten years from now, everyone will be using exchanges, because the way it was done yesterday just can’t continue. Once you change technology, there’s no going back. The dial-up phone is gone.

I believe that there will be gradual embracing of all the components that are part and parcel of the technology enhancements exchanges bring.

We all learned how to shop online—no one gave us a training manual. We all figured it out, and our culture changed around the technology, and the technology was very agile and responsive. And that’s what the exchange platform is: It’s a new way of doing things.

To reach me for comment on an article or a presentation, contact Melanie Meharchand, Director of PR and Social Media for Exchange Solutions, Willis Towers Watson.

 

A recent article in Managed Healthcare Executive posed the question, “Are Payers Optimistic About Biosimilars’ Savings?”

The answer, it seems, is a tentative “yes.”

Biosimilars are lower cost version of expensive biologics. The first biosimilar approved by the FDA in the U.S. was Zarxio, a generic of Amgen’s Neupogen, back in March of 2015. This approval opened the door for many others.

What remains to be seen is how companies and their pharmacy benefit managers (PBMs) will handle this new class of drugs when managing their drug formularies. One mistake they should avoid is treating biosimilars like generics, says Willis Towers Watson North American Pharmacy Practice Leader, Nadina Rosier.

Quoted in the article, Rosier said, “Biosimilars are not the same as generic specialty drugs, so strategies that ‘auto-substitute’ in similar ways to how generics substitute for traditional drugs are not appropriate. Instead, many PBMs have indicated they are considering formulary approaches that are similar to how traditional and specialty drugs are managed today.”

For the complete article in Managed Healthcare Executive, click here.

Employers are always looking for ways to deliver care that better meets the needs of their workforce at a lower cost. While there are finite ways of doing that, medical innovation is pushing back the barrier on what is possible in the health care space, to the benefit of all.

Here are some of the most promising health innovations coming in 2017 according to the Cleveland Clinic, as described in a recent article for Fast Company:

Diabetes Drugs That Reduce Cardiovascular Disease

Generic drugs like empaglifozin and liraglutide have the potential to blunt the effect of diabetes on the body and even positively affect related conditions such as heart disease. The implications for this discovery are huge, as nearly half of U.S. adults have diabetes or pre-diabetes, according to a recent study published in the Journal of the American Medical Association (JAMA).

Health Care Systems Talking To One Another

For anyone who has found the lack of communication between different health systems frustrating, the advent of an international standard may provide a solution. Fast Healthcare Interoperability Resources (FHIR), is a draft standard and application used to exchange electronic health records that could allow hospital systems to integrate billing, insurance, and appointments more seamlessly. This standard is still fairly new, introduced in 2014 by Health Level Seven International, an international nonprofit focused on healthcare interoperability. It remains to be seen whether it will be widely adopted, but it has the potential to connect health care systems more effectively.

Bio-Dissolving Arterial Stents

Stents are small mesh tubes that can be used to temporarily prop open obstructed passageways such as blood vessels. Now a new type of stent dissolves on its own once it is no longer needed. So-called “bio-dissolving stents” are still in the early stages; only one has been approved by the FDA. But more could be on the horizon.

These are just a few of the health innovations coming soon that may shape how diseases are prevented or treated, surgeries performed, and hospital systems managed. For employers, all of these innovations have the potential to improve health outcomes for employees and provide better tools to maintain a healthy and productive workforce.

For the complete article in Fast Company, click here.

With the end of the year just around the corner, we are taking a moment to look back at the most popular posts on the OneExchange blog this year.

Most-read topics included benefits administration, telemedicine, disease management programs, and types of benefits being offered, including student loan repayment, workplace perks such as snow days, and changing PTO policies. We also got to know more about exchange innovator Sherri Bockhorst, a managing director of Willis Towers Watson’s group exchange business.

Here are some interesting tidbits from the top 10 posts:

On workplace perks: “New parents no doubt perked up (pun intended) when companies offered such benefits as unlimited parental leave (Netflix) and $4,000 in “baby cash” for the birth of a newborn (Facebook).”

On telemedicine: “The average telemedicine visit costs between $40 and $49…. This compares favorably with a visit to a primary care doctor ($110) or a trip to the emergency room ($865).”

On biosimilars: “The potential benefit [from the FDA approving more biosimilars] is huge… biosimilars could result in over $44 billion in savings on biologics between 2014 and 2024.”

Read on for the complete list of the top 10 blog posts in 2016:

  1. “Panda Days” and Paid Time Off: What Perks Perk Up Employees
  1. Employers Look To Private Medicare Exchanges As Alternative To Group Retiree Health Coverage
  1. Meet Exchange Innovator Sherri Bockhorst
  1. Little Known Rule Allows Some Seniors To Change Medicare Advantage Plans When Plans Drop Their Doctors
  1. League Of California Cities Partners With OneExchange On New Private Exchange Offering
  1. Employers Add Student Loan Repayment To Benefits Offerings To Attract Millennials
  1. Employee Well-being In The Workplace A Priority For Employers In Coming Years
  1. More Private Exchanges Adding Disease Management Programs
  2. Reimbursement Issues Plague Biosimilars
  1. Telemedicine Benefits Remain Underutilized

A recent headline in Politico Pulse pointed to a drug price transparency report from the state of Vermont that identified 10 prescription drugs that are “eating up state spending.” The top three drugs, Abilify, Lantus, and Humira, saw growth in wholesale acquisition costs over five years of 55%, 90%, and 114% respectively.

The report noted that while percentage increases in the price of generic drugs were higher, the actual dollar amounts were higher for name-brand drugs.

The top 10 drugs identified in the Vermont report are as follows:

  1. Abilify – an antipsychotic, for depression, bipolar disorder, and other conditions
  2. Lantus – name-brand insulin for treating diabetes
  3. Humira – an immunosuppressant for treating arthritis and Crohn’s Disease
  4. Enbrel – acts as TNF inhibitor to treat rheumatoid arthritis, among other diseases
  5. Crestor – a statin for treating high cholesterol
  6. Epipen – epinephrine for allergic attacks and asthma
  7. Latuda – an antipsychotic for treating schizophrenia
  8. Prevacid – a proton-pump inhibitor for treating acid reflux and heartburn
  9. Doxycycline Hyclate – an antibiotic for treating infections such as acne and gonorrhea
  10. Permethrin – an anti-parasite drug for treating lice and scabies

Among these, the Epipen has been in the headlines most recently for price hikes and a subsequent backlash against Epipen maker Mylan.

As health care costs–and especially pharma costs–continue to rise, awareness of which drugs are experiencing the largest price increases and which are most expensive is key to managing cost. Vermont’s experience with prescription drugs provides visibility into what is going on in other states and with health insurers and employers offering health insurance.

The issue is clearly on employers’ minds. According to Willis Towers Watson’s 21st annual Best Practices in Health Care Employer Survey, 88% of large employers identified managing pharmacy spending as a top priority in the next three years.

In June of 2016, Vermont became the first state to pass a drug price transparency law, Act 165, which mandates this report.

To read the entire report, click here.

There’s more good news for employers that have chosen to self-insure rather than fully insure their employee health insurance plan offerings. According to recent Willis Towers Watson data, the projected cost increases for self-insured plans for 2017 are just 4-5% instead of 7-8%, which is the rate at which costs for fully insured plans are projected to grow.

These findings are from the Willis Towers Watson’s 2017 Marketplace Realities report, which was cited in a recent article in Employee Benefit News. While the article featured rising health costs generally, it also acknowledged employers’ increasing concern about rising pharmacy costs.

According to the Willis Towers Watson 21st annual Best Practices in Health Care Employer Survey, nearly nine out of 10 (88%) of large employers identified pharmacy spending on high cost specialty drugs as a top priority in the next three years.

“Employers… are motivated because prescription drugs overall account for about 25% of the total cost of employer-sponsored medical benefits and an even larger percentage of growth in the cost of medical benefits,” said Nadina Rosier, North American Pharmacy practice leader for Willis Towers Watson. “Failure to act now could cost employers hundreds of millions of dollars over the next few years and for the foreseeable future.”

The takeaway is that with medical and pharmacy costs continuing to rise, employers that self-insure have more control over plan and program designs and can take action to keep cost increases down. Whether employers’ increased focus on pharma manages to rein in spending growth in that area remains to be seen.

For the complete article in Employee Benefit News, click here.

Incentives are a popular way to get employees to engage with wellness programs. But the carrots and sticks employers can use in wellness programs have changed recently, thanks to final rulings from the Equal Employment Opportunity Commission (EEOC) on wellness program incentives.

A recent article in Financial Advisor explored the evolution of wellness programs in light of these EEOC rulings, which limit financial incentives to 30% of the cost of an individual’s health plan.

In spite of the limitations imposed by the rulings, wellness programs continue to proliferate. While penalties (sticks) are still used, they are less common than incentives (carrots), according to Jeff Levin-Scherz, north American leader of health management for Willis Towers Watson.

“Relatively few employers use penalties except for tobacco cessation,” Levin-Scherz told Financial Advisor. “Most employers express incentives as a reward rather than a penalty.”

For the complete article in Financial Advisor, click here.

Employers are increasing their focus on managing prescription drug spending, especially high-cost specialty medications used to treat chronic illnesses.

This finding comes from the 21st annual Willis Towers Watson Best Practices in Health Care Employer Survey, which surveyed 600 U.S. employers about their health program decisions and strategies.

“High price tags for specialty drugs are the main driver of employers more carefully examining their spending on pharmaceuticals and how they manage their employee pharmacy benefit programs,” said Nadina Rosier, North American pharmacy practice leader for Willis Towers Watson.

Previous Willis Towers Watson survey data revealed that nearly 90% of employers have identified managing pharmacy spending as their top priority over the next three years, so we will no doubt see more on this topic as employers seek solutions to manage cost.

For six common strategies employers are using to combat the rising cost of prescription drugs, see the complete press release from Willis Towers Watson here.