Towers Watson is very proud to be named by the International Association of Outsourcing Professionals® as Leader on the 2015 Global Outsourcing 100® list again in 2015 – the fifth year in a row.

Towers Watson is a global outsourcing leader

These results from our employer clients and their employees support the strength of the program

In 2014, Towers Watson jumped 50 places to earn a 21st-place ranking on the list of 100. This year, to reflect a new emphasis on innovation and social responsibility, rather than a numbered rank, companies are being judged across four categories.

Under the new system, Towers Watson was also named one of the Best Leaders in Revenue Growth, one of the Best Leaders in Employee Growth. Towers Watson also earned a distinguished star rating for programs for innovation.

These results from our employer clients and their employees support the strength of the program:

  • Our outsourcing services have a 99% annual client retention rate.
  • 9 out of 10 clients extend their engagement with us beyond the initial contract.
  • 98% of the individuals served are satisfied with our customer service.

Key factors in our recognition include:

  • OneExchange, Towers Watson’s industry-leading private exchange, which serves all workforce populations
  • A newly redesigned employee experience in our benefits administration system, which makes it easier for people to select and evaluate benefits when enrolling as well as access their data on demand.

Tony DeNucci, managing director, Benefits Administration Outsourcing, for Towers Watson had this to say of the recognition: “Towers Watson is honored to be recognized for innovation and growth. We are proud to serve the employees, retirees and family members of the world’s finest companies, providing them with innovative benefit solutions, accurate benefits administration and an exceptional customer experience.”

Download a copy of Towers Watson’s global outsourcing services infographic here.

Read the full announcement here.

The Congressional Budget Office (CBO) recently released updated estimates indicating that 7 million fewer people will have employer-sponsored insurance in coming years. Some Patient Protection and Affordable Care Act (PPACA) critics responded by speculating that the employer mandate to provide health coverage to full-time employees (those working more than 30 hours a week) will cause more employers to “do the math” and decide it’s less expensive to pay the penalty than to pay for the coverage.

John Barkett, Director of Health Policy Affairs for Exchange Solutions at Towers Watson, weighed in on the topic, noting that the flaw in the argument is that it assumes employers make decisions about employee benefits based strictly on cost. Said Barkett in a recent article he wrote for The Institute for Healthcare Consumerism (IHC), “This is simply not true.”

Barkett also pointed out that the trend of fewer people receiving health insurance from their employers is not “new” since the ACA. A 2013 study from the Robert Wood Johnson Foundation reported on declining scope of employer-sponsored health benefits over the past decade – prior to the passage of the health care reform law.

For Barkett’s complete analysis, read his article in the IHC.

On The Public Exchanges

April 22, 2015

A look back at open enrollment, and a look forward at the individual mandate

Given the rocky rollout of the federally managed and state-run health insurance exchanges in their first year, it’s safe to say that both advocates and critics held their collective breath as the second open enrollment period began on October 1, 2014.

Overall, second year enrollments went much more smoothly than the first. Some states did have glitches, but by and large technology was not the issue.

The individual mandate and its associated tax penalty was, however. Specifically, exchanges became concerned that not enough people were aware of the tax implications of not having purchased health care coverage for the plan year 2015.

The penalty, also called the “Shared Responsibility Payment,” is either 1% of annual income or $95 for the 2014 plan year (whichever is higher). In 2015, it goes up to 2% of yearly income or $325.

So, on February 20, 2015 the Centers for Medicare and Medicaid Services (CMS) announced a “special enrollment period” for those enrolling on the federally managed exchange, which covers 35 states and the District of Columbia. It will end on April 30th.

To be eligible, individuals would have to “attest that they first became aware of, or understood the implications of, the Shared Responsibility Payment after the end of open enrollment [February 15, 2015] in connection with preparing their 2014 taxes.”

After the CMS announcement, six of the state-run exchanges followed suit with special enrollment periods of their own. Just three states — Colorado, Idaho and Massachusetts — did not enact special enrollment periods.

Arguably, the most anticipated number at the end of this enrollment period will not be the final enrollment count, but rather the number of individuals who get hit with the penalty. Unlike final enrollment numbers — for which hopes are high — hopes for the tax penalty is that numbers are low.

So otherwise, how did public exchanges fare?

Amidst all the turmoil of shifting deadlines and the looming threat of tax penalties, public exchanges actually performed pretty well during the original enrollment period — although some did better than others.

As of this writing, Maryland doubled its enrollment compared to the last open enrollment period and California was on track to reach its goal of enrolling 500,000 people. Some states’ enrollment periods were uneventful, with a steady tick upward of enrollment numbers to levels that, while not staggering, surpassed the first open enrollment period. For states that implemented special enrollment periods, enrollment figures will continue to climb.

Some exchanges were plagued by issues beyond enrollment — including financial and technical issues, as well as staff turnover. Iowa saw one of its health insurance options, a co-op called CoOpportunity Health, fail due to having an insurer pool that was larger and sicker than anticipated, resulting in more risk than it could afford to bear. Colorado and Minnesota both experienced financial shortfalls and received $322,000 and $34 million respectively to fix their online enrollment portals. Executive directors of some state-run exchanges, including Massachusetts and Vermont, resigned and were replaced.

Despite these difficulties, the overall outcome on the public exchanges has been mostly positive this year. According to a recent Gallup poll, another 3.6 million adults have been added to the rolls of the insured during the latest enrollment period – which means that nearly 9 in 10 Americans now have insurance.

Joe Murad, Managing Director with Ex

For highlights of my perspectives in articles and other forums, see me on Twitter at #WTWJoeMurad

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

I’m Joe Murad, managing director with Exchange Solutions for Towers Watson. I oversee our individual exchange solutions that serve Medicare-eligible and pre-65 retirees, part-time employees and their families.

Every day, my goal is to figure out how we can leverage our position as a technology leader to connect employers and the consumers they represent with better value while selecting health insurance. Our mission is to create cost savings for our employer-clients and provide our individual consumers with improved choice and control over their health benefits.

My health insurance roots

I grew up in Silicon Valley, surrounded by technology, innovation and disruptive market forces. Of the four start-ups I’m fortunate to have been a part of – my last two have been in the health insurance space – but I got my start in the world of relational databases.

It’s very typical of Valley ventures that innovation comes from outside an industry – from those who are not entrenched in industry thinking. Given my tech and my health insurance experience, I’m now one of the few people in our industry who has brought technological advancements to health care twice.

Joe Murad, Managing Director with Exchange Solutions

Skiing with the kids in North Lake Tahoe

I helped found the nation’s first private Medicare exchange start-up a decade ago. Today I continue to apply that expertise to help employers leverage opportunities in the individual market made possible by health care reform.

It was true then and remains true today that health insurance – the largest sector of the nation’s largest industry (health care) – is burdened by inefficiencies, making it ripe for innovation and change.

The evolution of private exchanges

Private exchanges emerged as a result of three factors coming together at just the right time. The first was the idea of managed competition in health care, pioneered by Alain Enthoven in the 1970s. We were very fortunate to work closely with Alain early on as we were designing our private Medicare exchange.

The second factor was health care reform – which took the form of the Medicare Modernization Act in 2003 and now the Patient Protection and Affordable Care Act (PPACA, aka the ACA) of 2010 – both of which created a viable individual market for health insurance, first in the Medicare world and now in the pre-65 world.

Joe Murad, Managing Director with Exchange Solutions

On the beach

The third factor is powerful platforms for consumer technology, which emerged in other industries – think of Amazon and Travelocity – and which we applied to health insurance.

Today my focus is on helping employers provide quality health benefits at a lower cost and to empower consumers with more choice and control over their health benefits. I also believe that over time our exchange model will drive more consumerism in health care – which will lead to a more efficient and effective health care industry.

Where I see health insurance going

On the Medicare exchange side, the market has hit its stride in the private sector. Two years ago when IBM announced moving to OneExchange for its retirees, the whole nation sat up and took notice of the exchange concept. It was no longer seen as a nascent technology play – it’s now understood as a practicable strategy that crosses all industries and company sizes. We are also seeing strong uptake in the traditionally conservative public sector.

As we move forward, the next logical frontier is how to make health insurance more reflective of the voluntary insurance and employment markets, which have become more personalized and portable in recent years.

If you think about all the other insurance coverage people have access to – auto, home, life – and combine that with the leading retirement savings programs – 401ks and IRAs – these are portable, individual plans and accounts that aren’t tied to where someone works. Why should health insurance be any different?

In the past, because employers were the purchasers of health insurance, they made all the decisions. With exchange technology enabling employers to offer retirees and employees more choice and control of their own health coverage decisions, it raises the question: Why can’t employees take the coverage they’ve chose for themselves when they move to another job? The law isn’t there yet but the consumer mindset is. If health reform catches up to that thinking, we will be there to provide the business model and technical solutions to enable it.

Apple’s latest gadget — and perhaps the most anticipated fitness wearable ever — was unveiled in March and will be available for purchase on April 24. But to many in the medical research community, Apple Watch was upstaged by the surprise release of ResearchKit, an open-source biomedical platform that will allow users of iOS devices to enroll in tests of new drugs and therapies by downloading apps from hospitals and providers who are recruiting patients. It works with HealthKit, a developer’s tool that allows health and fitness apps to share data that Apple introduced last year.

Apple announced earlier this year that it has shipped 1 billion iOS devices, including iPhones, iPads and iPods. Future iOS sales numbers will include Apple Watch, which also runs iOS.

So what does it mean that 1 billion+ devices now exist that people can use to voluntarily contribute their health information in support of medical research? Said Jeff Williams, senior VP of operations for Apple, “There are hundreds of millions of iPhone users that would contribute [to research] if it was easier to do so. ResearchKit turns HealthKit into a diagnostic tool.”

Bottom line, it could make high-quality medical research on diseases such as bipolar disorder and Parkinson’s easier and less expensive to conduct.

Apple developed ResearchKit in conjunction with an impressive list of organizations and hospitals, including Massachusetts General Hospital, Mount Sinai Hospital, UCLA’s School for Public Health, Stanford University School of Medicine, the University of Oxford, and the Dana Farber Cancer Institute.

Of course, Apple Watch also has many health and fitness features that one would expect of a fitness wearable. These include a heart rate monitor, apps for tracking workouts and goal setting and the ability to work out untethered by an iPhone.

It remains to be seen whether consumers will flock to Apple Watch as they have done with other Apple products. But if they do, it could be the first fitness wearable to spur employee engagement and adoption of corporate wellness programs.

Nine out of 10 employers (89%) say retirement benefit security is somewhat to extremely important to their retirees. While employers want to honor their promises to retirees to provide medical benefits, rising costs and a lack of strategic alignment with their workforce management strategies is causing them to evaluate new alternatives.

These conclusions are based on results from the Towers Watson 2015 Survey on Retiree Health Care Strategies, which surveyed 144 HR executives at large and midsize employers that sponsor retiree medical benefits. Of these, 78% said their company currently provides health benefits to both pre-Medicare and Medicare-eligible retirees, and 70% said they will offer benefits to most of their current full-time employees when they retire.

However, according to the survey, just 38% of employers said their retiree medical benefit program is effective in attracting and retaining employees. Even fewer — 26% — said the benefit is integrated into broader workforce management and retirement strategies.

Thus far, most employers have relied on traditional levers to control costs and risk, including:

  • Shifting costs to retirees
  • Capping subsidies
  • Changing eligibility requirements
  • Limiting or ending retiree benefits for new hires

Increasingly, however, employers are looking at new options:

For pre-Medicare retirees, these include providing services that enable retirees to purchase individual health plans either directly from carriers or via public exchanges. For 2015, just 8% of employers are confident in public exchanges as a viable alternative, but confidence rises to 35% by 2017. By 2017, more than half of employers (53%) will reassess their current approach to providing retirees under the age of 65 with health benefits and will consider public exchanges and federal subsidies based on family income where the employer subsidy is nil or modest.

For Medicare-eligible retirees, nearly eight in 10 (78%) employers are already using or considering the services of a private Medicare exchange to assist retirees with finding individual coverage. In addition, insurance products are emerging that enable employers to transfer the liability for retiree medical benefits to a highly rated insurance company through the purchase of an annuity that gives retirees tax-free funding to pay medical plan premiums for life.

For more information on the survey, read the full report.