May 27, 2016
With the 2016 primary season coming to an end, and candidates at all levels turning their attention to the general election, the Affordable Care Act (ACA) will remain a topic of much debate. Some candidates want to see it repealed; others want to keep it and improve upon it.
But according to John Barkett, director of policy affairs for Willis Towers Watson, here’s something that all candidates might want to consider. While most employers had concerns about the ACA, six years have passed since the bill was signed into law. At this point, many employers are not willing to take the risk and endure the added disruption of throwing it out and starting all over again. However, they do want to see major changes to the ACA.
In a recent bylined article in Employee Benefit News (EBN), Barkett shared the five things employers would change about the ACA, based on his numerous conversations with employers about the good, the bad and the ugly of adapting to this major piece of legislation and the changes it has brought to employer-sponsored health care.
What would you change about the ACA?
To read Barkett’s article in EBN, click here.
May 24, 2016
According to Kaiser Family Foundation data, just 23% of employers with over 200 employees offered retiree health benefits last year. But that statistic doesn’t tell the whole story.
Rather than exiting retiree benefits, a growing number of employers are looking to other avenues to provide benefits to retirees, including private Medicare exchanges.
According to John Barkett, director of policy affairs for Willis Towers Watson, the private exchange option is appealing to employers for a variety of reasons. In a recent article for Business Insurance Barkett said, “[A private Medicare exchange] allows employers to make coverage available with predictable costs and in an affordable way.”
Barkett noted that an exchange also allows employers to offset the cost of the benefit for both themselves and retirees by creating and making contributions to tax-advantaged health reimbursement accounts (HRAs) on behalf of retirees.
While traditional employer-sponsored retiree health coverage continues to decline, data from Willis Towers Watson shows that this alternate approach is on the rise. One third of U.S. employers surveyed by Willis Towers Watson reported that they have already transitioned to a private Medicare exchange for retiree benefits and two-thirds are considering it by 2018.
For the complete article in Business Insurance, click here.
In a bylined article for Employee Benefit News (EBN), Randall Abbott, senior consultant for Willis Towers Watson, recalled a time when students could stitch together part-time job, work-study programs and help from parents to graduate from college debt-free. That was, in fact, his own experience when he graduated from college.
But according to Abbott, with college tuition skyrocketing, those days are largely gone and many students graduating today take with them a huge student debt burden. Abbott further noted that while debt is a serious problem for students, it’s an opportunity for employers seeking to hire the next generation of talent.
In his article, Abbott wrote, “Employers are seeking new ways to attract and retain millennials. Among them are benefits programs that help employees manage their student debt burden.”
These programs can take many forms, from employers offering simple debt advising to full-blown debt repayment. Some forms of student debt benefits include:
- Vendor assistance in consolidating debt
- Debt repayment matching
- Loan repayment allowances
With roughly 69% of college graduates leaving school on average $30,000 in debt, Abbott advised employers that now is the time to consider offering student loan repayment programs to ensure competitiveness in the war for young talent. Abbott wrote, “For employers seeking to creatively enhance their benefits portfolio in a highly competitive market for young talent, student loan assistance is an opportunity to compete in a new way.”
For the complete article in EBN, click here.
It’s official. Over the next 2 years, CMS will be phasing in changes to how payments are calculated for group Medicare Advantage plans that provide health coverage to employers’ retirees. This is according to a recent ruling from the Centers for Medicare and Medicaid Services (CMS).
The changes are designed to stop substantial overpayments for providing Medicare-covered benefits. Even though CMS will require more competitive bids from employers and their carriers, the agency has said it also still expects the plans to offer comprehensive supplemental benefits.
John Barkett, senior director of policy affairs at Willis Towers Watson, was interviewed by Cort Olson for an article in Employee Benefit News (EBN) on this topic. According to Barkett, the changes have been a long time coming.
“MedPac has been pointing this out for a while, and this year in their annual rule making process, it was cited that employers are not competitively bidding for their Medicare payments,” said Barkett.
Barkett noted that employers were against the changes because they will negatively affect both employers and retirees. The only silver lining for employers is that CMS decided to phase the new rules in over two years rather than one year as was initially proposed.
(MedPAc stands for the Medicare Payment Advisory Commission, an independent U.S. federal body formed to advise Congress on the Administration of Medicare.)
For the complete article featuring John Barkett in EBN, click here.
For the complete article on the Medicare Advantage ruling, click here.
Enrollment in high deductible health plans (HDHPs) is not meeting employers’ targets, despite the fact that a growing number are offering such plans as a cost saving measure. Over three-quarters of large employers (87%) reported offering HDHPs in conjunction with a health savings account (HSA) in 2016. Some employers have dropped traditional plans altogether and only offer HDHPs.
According to a recent article in Employee Benefit News (EBN), among the options employers have to increase employee interest are targeted communications to ensure that employees understand how such plans work and comparison tools that make it easier for employees to compare plans side by side.
Another element employers must consider if HDHPs are to reduce costs effectively is how the plans are structured and HSAs funded. Commenting on this point in the article, Trevis Parson, chief health actuary for Willis Towers Watson, noted that there should be a “meaningful difference” between the HDHP deductible and the employer’s contribution to the HSA. This can further encourage employees to utilize services appropriately to keep costs in check.
To read the complete article in EBN, click here.
May 12, 2016
Enrollees in health plans on public exchanges are “underreporting” that they are smokers to avoid a tobacco surcharge being levied on their plans. This is bad news for all public exchange participants, including non-smokers. The tobacco surcharge–estimated to be 10% on average in 2014–is meant to offset the high cost of diseases associated with smoking such as lung cancer.
Unfortunately, the current system does not have the ability to verify if someone who claims to be a non-smoker is telling the truth. Said Jeff Levin-Scherz, senior consultant for Willis Towers Watson, “Enforcement typically relies on the honor system.”
The same is true for employer-sponsored insurance as well, although not all companies rely exclusively on the honor system. According to Levin-Scherz, some companies require lab tests for employees, which can help them identify smokers. In 2015, about 40% of large employers had a tobacco surcharge.
Even when smokers do self-report, it’s not clear that the surcharges are effective at getting smokers to quit, which would be better for their health and for reducing health care spending generally. According to the American Lung Association, while the surcharges may help offset the cost of smoking-related diseases, such punitive measures “have not been proven effective in encouraging smokers to quit or reducing tobacco use.”
Wellness programs that include smoking cessation may be a better alternative to punitive measures like tobacco surcharges.
For the complete article in USA Today, click here.
Little Known Rule Allows Some Seniors to Change Medicare Advantage Plans When Plans Drop Their Doctors
May 4, 2016
Medicare Advantage plans are an attractive alternative to original Medicare or original Medicare plus private supplemental Medicare plans for some seniors. However, Medicare Advantage plans have some limitations. While the plans can drop care providers and providers can drop out of plans anytime they want, in the past seniors were allowed to change plans just once a year, with some exceptions. This meant some seniors had to change doctors to continue receiving care.
However, in 2013, the Centers for Medicare and Medicaid Services (CMS) issued rules giving Medicare Advantage plan members a “special enrollment period” based on what the CMS called a “significant” change in their provider networks. The rules went into effect last year and so far, CMS has allowed more than 15,000 people to change plans based on changes in their providers.
But two obstacles stand in the way of more seniors taking advantage of the option. First, CMS is not publicizing the benefit, so many members don’t know about it. Second, CMS has not clarified what it means by a “significant” change.
In a recent article in Kaiser Health News, Medicare Deputy Administrator Sean Cavanaugh offered an explanation for what CMS looks for in granting special enrollment periods: “What we’re looking for is whether their selection of a plan was based on a network and the presence of certain physicians and that their [the plan member’s] selection would’ve been different.”
Cavanaugh further advised members to call CMS’ help line, 800-Medicare, to request permission to leave their plans because they lost their doctors. But he cautioned that members are being allowed to switch plans only “in rare situations.”
Still, for employers with retirees who currently have Medicare Advantage plans or are considering one, the new rule is important to know about: it could provide a pathway for retirees to maintain their long-standing relationships with their care providers.
To read the complete article in Kaiser Health News, click here.
A Medicare policy enacted in January of this year will help seniors decide the care they want at the end of their lives.
The policy, referenced in a Centers For Medicare and Medicaid Services (CMS) press release as “advance care planning,” for the first time establishes a separate payment and billing rate for physicians who have conversations with their patients about their wishes at the end of their lives.
By creating a separate designation, Medicare makes it more feasible for physicians to take time out of their already strapped-for-time schedules to have these conversations. Doctors can now bill $86 for a counseling session up to 30 minutes long with their patients on the care they would like to receive at the end of life.
For employers and plan sponsors, this new policy could directly benefit their Medicare-eligible retirees. More broadly, it has implications both for assuring quality of care and for controlling health care costs.
A whopping 28% of Medicare spending, estimated in 2011 to be almost $544 billion, happens in the last six months of a patient’s life. Much of that comes from measures meant to extend quantity of life, but that do not assure quality of life. Feeding tubes, breathing machines, and eleventh hour surgeries or treatments end up costing $170 billion in those last months.
While some people may still opt for these extreme measures to prolong life, everyone benefits from sitting down with their physician to have the conversation about the care they wish to receive.
To learn more about the new policy, read this article in Kaiser Health News.