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.

Do fitness wearables in the workplace really work? This was the question posed in a recent article in the Chicago Tribune.

Even as more employers are offering fitness wearables to their employees, the article pointed out that it remains to be seen how effective they are at helping them achieve better health outcomes or reduce health care costs.

According to Willis Towers Watson employer survey data, presented in the article, 31% of large employers now offer wearable fitness trackers to their employees; another 23% reported considering offering them in the next two years.

In addition to questions about effectiveness, there are also those who have privacy concerns and wonder about the ethics of rewarding employees for wellness program participation or penalizing them for failing to meet wellness goals.

The Equal Employment Opportunity Commission (EEOC) has issued several rulings recently related to wellness programs and their administration. Fitness tracking devices fall under the guidance of these rulings, and employers are advised to stay up to date on rules to stay compliant.

To read the article in the Chicago Tribune, click here.

As the open enrollment period for employer-sponsored insurance approaches, there is one benefit that employers hope employees will take more advantage of: telemedicine.

Of the estimated 1.2 billion outpatient visits last year, just 1 million were conducted using telemedicine, according to Willis Towers Watson data.

Why haven’t employees flocked to telemedicine? According to a recent article in the Chicago Tribune, it’s possible they don’t understand it, don’t know it’s available, or are skeptical of getting a doctor’s opinion without physically being with a doctor. However, it isn’t because the service is more expensive: it’s not. The average telemedicine visit costs between $40 and $49 and some employers don’t require an employee contribution, covering 100% of the fee, said Willis Towers Watson senior consultant Dr. Allan Khoury, who was interviewed for the article. This compares favorably with a visit to a primary care doctor ($110) or a trip to the emergency room ($865).

Regardless of why employees are slow to adopt telemedicine, Dr. Khoury advises employers to figure it out and put in place strategies for accelerating adoption, starting with increased employee education. There’s a lot of money to be saved through telemedicine that won’t be realized until employees start using it.

To read the article in the Chicago Tribune, click here.

In a twist on the famous lament of Kermit the Frog, it ain’t easy being an HR professional for a multi-state employer. Ok, so that isn’t as catchy as the original. But the reality is multi-state employers must address the varying state and local laws governing employee benefits and that can be complicated and time consuming.

Take paid sick leave, for example. In a recent article on the topic in Human Resource Executive, Jackie Reinberg, senior consultant for Willis Towers Watson, said, “The issues most employers are really struggling with is that systems are not easily adjusted for all of the different localities. A number of them are keeping spreadsheets because they just do not have the bandwidth right now to update all of the systems.”

This is especially challenging because some state and local laws include part-time workers, expanding the number of employees employers need to take into consideration when designing a paid sick leave policy.

To complicate matters even more, starting next year federal law will require employers who contract with the federal government to provide 7 days of paid sick leave. The clock is ticking for multi-state employers to comply with the law and make other modifications to their sick leave policies that are affected by it.

To read the article in Human Resource Executive, click here.

Health benefits are a big part of attracting and retaining talent and employers are always on the lookout for benefits offerings that are attractive to potential new hires and appealing to their existing workforce.

One benefit that is gaining in popularity is adoption assistance. A recent article in Workforce reported that the hotel chain Hilton Corp. has added the benefit, including both a stipend to cover the expenses of the adoption process and a broader parental leave program. Both are slated to go into effect in January 2017.

According to Jackie Reinberg, national practice leader of absence, disability management and life at Willis Towers Watson, who contributed to the article, adoption assistance stipends average $10,000, and can range from $5,000 to as high as $25,000.

Just 20% of employers offer it in 2016, according to the Society for Human Resource Management 2016 Employee Benefits Survey. But Reinberg expects widespread adoption (pun intended) of the benefit as employers modernize their benefits programs.

To read the article in Workforce, click here.

According to a new survey from Willis Towers Watson, employers are increasing their efforts to achieve better health outcomes for their employees at a lower cost by implementing value-based reimbursement and payment arrangements with health insurers and providers.

This finding comes from the 21st annual Best Practices in Health Care Employer Survey. The survey included responses from 600 U.S. employers between June and July 2016, who collectively employ 12.2 million full-time employees.

A recent article in Workforce highlighted findings from the survey and the strategies needed to implement them. Value-based strategies employers plan to use include establishing centers of excellence (COEs) for specialty services through health plans, separate providers, or third-party vendors; implementing high performance networks; and contracting directly with service providers to secure improved pricing.

When it comes to establishing centers of excellence, one big factor to consider is the region, according to Sarah Oliver, senior consultant and health care delivery leader for Willis Towers Watson.

“We’re seeing a movement looking at strategies on a regional basis,” said Oliver. “Depending how big the population is, employers are looking for locations where they have a higher concentration of employees in order to make meaningful impact if they do implement a center of excellence. All of this would be grounded in data and what the underlying issues are.”

For the complete release from Willis Towers Watson, click here.

For the article in Workforce on the findings, click here.

In July, the U.S. Equal Opportunity Employment Commission issued an informal discussion letter in response to requests for clarification of incentive limits for employer-sponsored wellness programs. The request came in the wake of long-awaited final EEOC rulings on employer-sponsored wellness programs, released in May, that placed limits on employer wellness programs, including incentive amounts employers can offer employees to participate in the programs. The final rulings stipulated that incentives could not exceed 30% of the total cost of a major medical plan, but left some questions unanswered, including how employers that offer multiple wellness plans should calculate the maximum incentive limit.

The July letter noted that “the EEOC concluded that where an employer offers more than one group health plan option, but enrollment in a particular [emphasis added] plan is not required to participate in a wellness program, the maximum incentive is based on the total cost of the lowest cost self-only coverage under a major medical group health plan that the employer offers.”

The motivation for employers to encourage participation is in wellness programs is to achieve better health outcomes for employees, which translates to lower health care costs and higher workforce productivity for employers.

Since the way wellness programs are administered and legislation related to wellness continue to evolve, employers should expect additional updated guidelines from the EEOC.
To read the entire informal discussion letter from the EEOC, click here.