Posts Tagged ‘HCW’

Can We Control Healthcare Cost By Utilizing Medicare?

Tuesday, March 22nd, 2016

hcwhealthcarepicThe post below is a guest blog from Dax Hill who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

Did you know Medicare reimbursement rates for healthcare are typically lower than reimbursement rates paid by insurance companies?  Some employers are taking notice and indexing their employer reimbursement rates to the Medicare rates in hopes of trying to control their medical claims spent.

This arrangement is typically called “Reference Based Contracting” or a “Cost Plus” program.

There are many flavors of these types of programs, but here’s how these funding arrangements generally work….

  • An employer self-funds their medical insurance plan utilizing a Third Party Administrator (TPA)
  • The TPA partners with a network of doctors to provide discounts on medical services for “professional” charges. The medical reimbursement rates are based on the negotiated charges agreed upon by the network and doctors….this is similar to most of the current arrangements.
  • For “facility” charges, though, things get interesting. Instead of using the typical insurance carrier’s negotiated rates, reimbursements are based on Medicare reimbursement rates. For example, the TPA agrees to reimburse the medical facility at 120% of the Medicare allowed amount.  Medicare reimbursement rates are generally much lower than the typical insurance carrier negotiated rates.  These lower reimbursements (indexed to Medicare) can lead to claims savings to both the employer and employee.

All of this sounds good so far – who doesn’t want to pay a lower price?  There must be some catch, right?  The main concern for these programs is this: what happens if the hospital or medical facility push back and do not accept the employer/TPA reimbursement rates?  The amounts over the employer’s allowed price gets transferred to the employee.

For example, let’s say an employee receives a $5,000 medical procedure and the employer’s allowed amount is $1,000.  In this scenario, the hospital may decide to “balance bill” the employee for the $4,000 difference.  It is important for the employee to appeal this balance bill.  Most TPAs that focus in this market partner with legal counsel that represent the employee at no additional cost to the employee.  The attorney handles the appeal for the employee.  The attorney will send the medical facility a letter stating the reimbursement is adhering to the employers ERISA plan document and the employee should not be balanced bill.  The attorney explains that the employer and employee are paying above what’s normally acceptable (since most of the facility’s patients are covered by Medicare).

At some point, hospitals and facilities will become more aggressive in trying to 1) collect the balance bill from the employee 2) refuse to provide healthcare to individuals that are enrolled on these types of insurance plans or 3) negotiate on the allowed amount.  In the meantime, these plans are getting attention of employers as they try to best manage their healthcare cost.

Take a look at the pros and cons of Reference Based Pricing and the key considerations employers should look at prior to implementing these plans in this white paper.

When Worksite Plans Work

Tuesday, February 23rd, 2016

HCWBenPicThe post below is a guest blog from Rob Krieg who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

Voluntary benefits or worksite plans refer to the insurance products that can be offered by employers on an individual or group basis to pay individuals for a variety of life events such as getting injured in an accident, being diagnosed with a serious health condition, or being admitted into the hospital. Examples of these plans include critical illness, cancer, accident, hospital indemnity, and permanent life insurance…to name a few of the most popular.

Enrollment in voluntary or worksite plans continues to increase rapidly as more and more employers are offering, and employees are asking, for these benefits.

The number of carriers offering these benefits has also increased drastically. While traditional players in this market space (such as Aflac, Allstate and Colonial) continue to offer quality products, many of the insurance carriers who have previously focused on “core” group benefits such as term life insurance and disability insurance have now started to offer a variety of worksite plans. The growth of new players in the market has created competition where plan premiums are going down while benefits go up. Even more importantly… these carriers are actually paying when a claim is submitted!

The value of these worksite plans and the hassle-free payment of claims was something I was skeptical of until I received a firsthand experience in their benefits. This past April, HCW offered a critical illness/cancer policy as well as an accident plan for employees to purchase. Who knew that taking ten minutes out of my day to meet with an individual enrollment specialist ended up being worth over $12,500 to my family this year?

Our enrollment specialist educated me that the critical illness and accident plans both offered an annual wellness screening benefit that if submitted each year would almost entirely cover the cost of my annual insurance premium. Since I was interested in experiencing first hand why so many employees throughout the country were purchasing these plans I decided to sign up, thinking I would have no use for the benefits but at least my premiums could be offset by the wellness reimbursement.

Unfortunately, just two months after purchasing these products I sustained an injury while playing basketball with my children which required surgery, a lengthy stint on crutches, and physical therapy. Then less than two months after my accident, my wife was diagnosed with a condition that also required surgery and treatment. The money received from our policies helped pay for childcare, out-of-pocket medical care, and even had a little left over to pay for a family trip to celebrate our recoveries.

While both my wife and I would prefer to go back in time, give the money back, and not have these events happen, having the financial payments from the accident and critical illness plans certainly helped ease the burden during this time. I am thankful that my employer decided to offer these benefits, and required that I spent a few minutes meeting with an individual enrollment specialist to better understand the benefits being offered.

If you have questions about worksite plans, and if they might be a good option for you, contact HCW’s Enrollment Services & Voluntary Benefit Solutions Team.

 

Practicing Mindfulness In The New Year

Tuesday, January 19th, 2016

mindfulnesshcwThe post below is a guest blog from Meaghan Roach who serves as Health Management Advisor for CAI’s employee benefits partner Hill, Chesson & Woody.

As 2015 has come to a close and we begin to embark on the adventure of another year, many of us will be making resolutions, promises to ourselves and our loved ones for a happier, healthier, better 2016.

But the reality for most adults is that we are too busy, too stressed, and have a to-do list a mile long. Frankly, when are we ever going to catch up on our daily activities, let alone find the time to better ourselves?

The answer may be found in mindfulness. UC Berkeley defines mindfulness as the practice of “maintaining a moment-by-moment awareness of our thoughts, feelings, bodily sensations, and surrounding environment.” Mindfulness can be cultivated through quiet periods of meditation, focused breathing techniques, and intentionally noticing your surroundings through each of your senses.

The Harvard Business Review recently published an article chronicling the success of a mindfulness and meditation program at Aetna. While most business leaders are spewing the standard “do more with less” and “increase productivity by working harder, faster, longer” jargon, Aetna’s CEO Mark Bertolini is taking a different route. Aetna began a mindfulness training program back in 2010 to teach employees how to better manage stress and center themselves throughout the day through yoga and meditation.

Aetna isn’t the only company instituting mindfulness practice into employee lives. Other major companies, like Intel, General Mills and Google, have created their own mindfulness programs. Google offers over a dozen courses on mindfulness to their employees, and the most popular of these courses – “Search Inside Yourself” – is now offered to other companies as a way to train leadership teams on bringing the practice into their own organizations. The list of participants in the SIY Leadership Institute yields more high-profile companies and institutions, including Ford, Comcast, American Express, and several universities.

Clearly, mindfulness is taking the corporate world by storm, and for good reason. Aetna’s program resulted in a 36 percent reduction in perceived stress by participants, and has increased participant productivity by an average of 62 minutes per week, which computes to $3,000 in increased productivity per participant each year. In addition to reducing stress, mindfulness has also been shown to improve your ability to focus, boost productivity and creativity, and increase your Emotional Intelligence, a key indicator of job success.

The New Year is the perfect time to interject mindfulness practice into your life and the lives of your employees. The holidays are often synonymous with stress and over-indulging, but the New Year brings the promise of a fresh start, in which we can shape our present lives to better fit our ideals for the future.

So, how do you begin? The idea of jumping headfirst into meditation may seem daunting, but that is not the only way to cultivate mindfulness in your daily life. Try creating a small habit at the beginning of each day: when you arrive at work, sit quietly for two to three minutes, doing nothing but feeling your breath and taking note of your surroundings.

For a beginner’s course in attentively using your senses, consider the raisin. This popular practice in mindfulness, especially mindful eating, has the participant experience a single raisin through sight, smell, feel, and taste.

For more information on starting a mindfulness program, and promoting employee well-being in a broader sense,  please reach out to HCW’s Health Management Department.

Top 5 Reasons You Need HR Technology

Tuesday, December 22nd, 2015

The post below is a guest blog from Rachel Richards who serves as Enrollment Services and Voluntary Benefits Solutions Team Lead for CAI’s employee benefits partner Hill, Chesson & Woody.

Until recently, HR Technology was reserved for employers with more than 100 employees and true Human Capital Management was for +1,000 employers.  The landscape of HR technology is swiftly changing, especially with the implementation of the Affordable Care Act.

Having benefits, payroll, and time keeping is more important now than ever, and easily accessible for employers all the way down to 50 employees.  New HR technology companies are popping up on a weekly, sometimes daily, basis.

See the top 5 reasons to have HR technology:

1. ACA Tracking & Reporting

Companies with over 50 full time equivalent employees (FTE) will need to be able track variable hour employees to determine eligibility.  Employers will also need to illustrate whether benefit eligible employees were offered employer-sponsored health care coverage and whether that coverage meets minimum essential coverage (MEC) standards.  Employers will need to capture this information and report on the IRS Forms 1094 and 1095.  In addition, specific enrollment information is required on the 1095-C form which can be handled easily by a benefit administration system.

2. Streamline Processes Through Integration

Whether you put in a “single source solution” where the same HR technology vendor provides you with payroll, benefits, and other HR technology modules or you find the best in class for each type of technology, information should flow from one area to another seamlessly.  This can be done through integration – integration with payroll, integration with your benefit carriers, and integration with your time keeping system.  It’s important to have one core system of record that is feeding all other systems, typically this is either payroll or core HR.

3. Electronic Onboarding

Removing paper from the onboarding process will bring efficiency to your entire HR department.  Imagine once an offer of employment is accepted, a link with your entire onboarding process is delivered to the new employee before they even start their first day of work. This feature is available in MOST benefit administration systems, however, the way these systems capture and store this information can vary greatly.  Be sure to ask questions, request demonstrations, and have a solid understanding of the onboarding capabilities before executing any agreements.

4. Simplify Administration

Whether you have 3 or 1,000 employees, a benefit administration along with other HR technology modules will eliminate paperwork and multiple points of entry.  In addition, having the ability to run reports to gather and share information about your workforce allows HR to provide information to the executive level team easily.

5. Notifications and Electronic Disclosures

There are many notices required under ERISA, ACA, and other regulatory agencies.  As an employer, you are required to notify your employees and keep a confirmation on hand with a time and date stamp of the notification.  A benefit administration system can allow you to notify your employees electronically and can even capture and store acknowledgements of receipt.

For more information on how HR Technology can streamline your benefit administration, contact HCW’s Enrollment Services and Voluntary Benefit Solutions team.

Conflicts Of Interest: 3 Recommendations For Business Owners

Tuesday, November 17th, 2015

The post below is a guest blog from Todd Yates who serves as partner and CEO for CAI’s employee benefits partner Hill, Chesson & Woody.

Conflicts of interest can present themselves at any time, in all aspects of our lives. Where is the line drawn? It requires keen observation to identify them followed by great discipline to abstain from taking part. Many professions have procedures set up to help identify potential conflicts and to guide the involved individuals around them safely.

For example, attorneys search within their firm to see if there are any situations where they could be representing another entity that would create conflict with the representation they are providing for you. Real estate professionals have to disclose if they are working as the agent of the buyer/seller or both. Your CPA will not serve as your auditor as well as your tax preparer.

When it comes to employee benefits, how do you ensure your advisor is really serving as your advisor – not with some other entity’s interest in mind?

My first recommendation is to examine your contractual agreement. Does it clearly identify the services that your broker will provide and outline payment? Does it explain who will pay compensation? If you aren’t paying it, who is? What influence might this paying entity have on your broker’s behavior? Is the method of payment in alignment with your best interest? For example, if the broker’s compensation is a percentage of premium, does it make sense that they would earn more as your costs go up? Does that align with your interest? At HCW, we have full transparency around our compensation in all of these aspects.

My second recommendation would be to examine the products your broker is recommending to you. Does that representative have any influence, other than your needs, impacting their recommendations? Our industry is notorious for brokers getting into the product business. At HCW, we refer to it as the manufacturing business. If your broker goes out and buys a product, or private labels a product, does that bias their opinion?

We have seen many examples of this over the years. The most recent phenomena is brokers buying private exchanges and/or HRIS systems. Once their organization made this investment, I wonder how many of their clients suddenly became “perfect” candidates for this solution? We have seen it with brokers that deliver FSA services, Cobra services, HRA services, etc. Are they ever going to direct you to another vendor’s service over their own? As the old saying goes, “If all you have is a hammer, everything looks like a nail”.

My third recommendation is to evaluate the relationship with your broker and the insurer/reinsurer for your organization. Is your broker serving in a conflicted role there? A great example of this is the emergence of captives. Some brokers have elected to create their own captives. In this case, the broker has likely engaged the services of several third parties to create the captive, but by leading the direction of the captive and the underwriting decisions, whose interest are they really representing? When it is time to negotiate your costs with the captive, are they advocating on behalf of your best interest, or on behalf of the captives’ interest and all of their other clients that are in it? Inherently there are two sides to this negotiation and being on both sides is a conflict of interest. A captive may be a great solution, but have your broker find one that doesn’t position their interest against yours.

At Hill, Chesson & Woody, we understand and embrace that we are in the advice and guidance business. Our clients hire us, expect us to learn their business, the accompanying strategy of that business, and identify methods to create employee benefit plans that align with that business strategy. That is our product! In order to remain clear of conflict we steer away from the previously mentioned scenarios. The only time we elect to break this direction is when we cannot source solutions in the marketplace to provide the outcome our clients need. Then, and only then, will we build a product.

A recent example is HCW’s enrollment services unit. The market was not responding with good solutions for middle market employers. As a result, we elected to build our own service here. We used other company’s HRIS tools and then built the complimentary professional services to accompany it.

Staying true to these principles is hard when you are looking for differentiators amongst brokers. Many firms depend on creating these products to make themselves appear exclusive in some way. I would encourage you to step back from your relationship and look for these types of misalignment and conflicts of interest. Taking the time to evaluate your relationships will help you ensure your broker is only aligned with the best interests of your organization.

Cadillac Tax May Force Employers To Eliminate FSAs

Thursday, September 17th, 2015

The post below is a guest blog from Dax Hill who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

What does the future hold for Flexible Spending Accounts (FSAs) and why ask this question now?FSA

With many employers now comfortable with the “pay or play” regulations and 6055/6056 reporting requirements, companies are beginning to shift their focus on the “Cadillac Tax” and are realizing FSA contributions will accumulate to the cost thresholds – potentially leading to increased employer taxes. In 2018, the Cadillac tax imposes a non-deductible 40% excise tax on employers to yearly amounts over $10,200 for plans covering an individual and $27,500 for those plans that cover more than just one person.

A recently released study by the Kaiser Foundation determined that 16% of employers would be subject to the 40% excise tax in 2018 – assuming 5% medical inflation. However, when the Kaiser Foundation included FSA contributions, the percentage of employers that would be responsible for the Cadillac Tax surged from 16% to 26%. Additionally, the study determined that 42% of employers would be impacted by the Cadillac tax by 2028 – which has led to some individuals calling this far reaching tax the “Camry tax” instead.

Employers are already reviewing options to limit the liability associated with the excise tax – including the possibility of eliminating their FSA. This would be unfortunate to employees, since many individuals rely on the pre-tax benefits of the FSAs to help offset healthcare expenses incurred throughout the year. For 2015, an employee can contribute up to $2,550 to their FSA on a pre-tax basis.

Not only will the Cadillac tax be a financial burden, but the coordination and calculation of the excise tax could be overly cumbersome for employers. Among the requirements of the Cadillac tax, the employer will be responsible for determining and notifying each coverage provider’s share of the pro-rata tax along with the IRS. We’ve outlined additional complexities in our most recent Healthcare Reform digest post if you would like more information on the calculation and payment details.

Companies are going to do everything possible stay under the Cadillac Tax thresholds in order to avoid the 40% non-deductible excise tax. If the current regulations stay in place, one of the first employer benefits to go by the wayside will be their FSA – leading to further financial strain for employees.

Worksite Wellness Programs Not Just A Fad, Survey Shows

Thursday, August 20th, 2015

The post below is a guest blog from Meaghan Roach who serves as Health Management Advisor for CAI’s employee benefits partner Hill, Chesson & Woody.

BalanceA few weeks ago, the Society for Human Resource Management (SHRM) unveiled the results of their 2015 employee benefits survey at their national conference. The results? Of no surprise to many in the industry, health and worksite wellness programs continue to grow in prevalence and popularity. SHRM attributes much of this to employers’ desires to combat rising health care costs. In addition to slowing the cost trend, health management programs may also increase productivity, decrease absenteeism, and improve a company’s ability to recruit and retain top talent.

Based on the survey, popular health management programs included biometric screenings and health assessments, tobacco cessation programs, lifestyle coaching, and preventive programs targeted at employees with chronic conditions. New to the scene this year are company-provided fitness/activity trackers and fitness competitions, which are offered by 13 percent and 34 percent of the respondents, respectively. New offerings in the past few years seem to have a common theme of physical activity, with standing desks (25 percent of respondents offered in 2015), on-site fitness classes (17 percent), and off-site fitness class subsidies (16 percent) all being added to the survey’s options in the past three years.

Health and wellness benefits that saw the largest increase in prevalence over the past five years involved premium differentials for participation in a variety of activities, including preventive care, completion of an annual health risk assessment, and not using tobacco products.

BenefitsPro summarized several other areas of the survey – including telecommuting, health savings accounts and family friendly benefits – but noted that wellness programs are certainly a key takeaway from this year’s results. In fact, as more millennials enter the workforce and demand a strong company culture, worksite wellness programs are becoming almost expected in the minds of potential employees. Eighty percent of survey respondents provide employees with wellness resources and educational information, and seventy percent indicated that they offer wellness programs, suggesting an attempt to integrate health initiatives into company culture across the majority of organizations in the United States.

Interested in how your company can offer initiatives like the above that can have a positive effect on employee morale and productivity, and ultimately your bottom line? Contact our Health Management team and allow us to help guide you through development of a wellness program to complement your employee benefits package.

 

 

Is The Classic 105 Plan Compliant With Federal Law?

Thursday, July 23rd, 2015

The post below is a guest blog from Jon Dingledine who serves as Vice President of Consulting for CAI’s employee benefits partner Hill, Chesson & Woody.

Ahealth cost compliances healthcare costs continue to rise, innovations in the marketplace continue to produce new products and ways to finance your medical insurance. One that you may have heard about recently (or are likely to soon hear about) is being touted as a tax overlay system sometimes called a “Classic 105 Plan.” The arrangement claims to reimburse 75% of unreimbursed medical expenses for employees. The program is supposed to save the employer money in premiums by raising deductibles, copays and out-of-pocket maximums.

Once the plan design has been leaned up, employees can choose to make a significant pre-tax salary reduction (in some cases as high as $15,000-$20,000 per year). The reduction amounts are held by a TPA and made available for medical reimbursements. Any unused portion in the account is forfeited at the end of the year. To make up for the significant reduction in the employees’ take-home pay, the employees are given a loan by the TPA each payroll period in an amount close or equal to the salary reduction amount. No taxes are paid on this amount because it is considered a loan, however there is no evidence that the loan is ever intended to be repaid. The loan is secured by a life insurance policy on the employee, held by the TPA. Fees paid to the TPA for the arrangement are between $150 and $200 each month, taken from the employees’ pre-tax salary reduction.

While the program claims to be ERISA, ACA and HIPAA compliant, our compliance team and other legal experts have serious concerns that this type of arrangement is not compliant with federal law, including the IRS Code. This type of arrangement can also have significant implications for the employee’s social security, the employer’s fiduciary duties under ERISA, and in some instances may subject the parties to criminal liability.

Rest assured that HCW is always reviewing the health and welfare benefit landscape, and we will continue to vet new programs and funding arrangements to ensure that the decisions your company is making are best fitted to your benefit strategy.

Summer Interns and The ACA

Tuesday, June 16th, 2015

The post below is a guest blog from Rob Kreig who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

summer intern and acaSchool is almost out for summer, and that means many employers are getting ready to start hiring summer interns. However this year, in addition to determining which students will be the best fit for your organization, you also need to consider how the Affordable Care Act may require you to offer benefits to the interns who you hire.

I’ve been asked numerous times in the last month whether interns who work 30+ hours a week must be offered health benefits on the same schedule as a full-time employee. The answer to this question is generally “yes”. An intern who works more 30 hours a week should be offered benefits under ACA if they are going to be employed for longer than an employer’s eligibility period (can be up to 90 days) if the employer wishes to avoid potential ACA penalties.

However, employers should be aware that there is a possible exception for seasonal workers where some employers are finding that interns may fit.  To qualify, the individuals who fill a particular position will work less than 6 months, and are hired at the same time every year.  For these individuals an employer can apply the look back measurement method to determine benefit eligibility rather than make the employees eligible at the expiration of a health plan waiting period.

For more information on seasonal employees, the 4th paragraph of question #54 in this IRS document has some additional information including the definition under ACA.

If you have questions about your specific intern situation, check out our free, on-demand presentation: “Temporary Employees and the ACA.”

Are We Beginning To See Price Transparency In Healthcare?

Tuesday, May 19th, 2015

The post below is a guest blog from Jay Lowe who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

healthcare costsAs pricing in the healthcare market continues to rise, we, as consumers of this healthcare, will begin seeking more cost-efficient ways to pay for this. Many experts agree that one way to begin to slow this rise is to become smarter with our healthcare buying decisions. A ‘smart healthcare consumer’ is one who seeks out the highest quality of care at the lowest price and understands the impact of their healthcare buying decisions.

One of the major hurdles to this is the lack of understanding on where to find information. In areas where there is a lot of competition for healthcare, costs can vary for the same procedure at different facilities. However, based on one’s medical plan, the cost to the patient may be the same by the time the deductible and coinsurance limits are met. The patient doesn’t realize there is a cost difference because his or her out-of-pocket expenses remain the same. It is the insurance company that is ultimately paying the difference, which causes potential increases to premiums at the next renewal.

This disconnect of the user of the healthcare (the patient) and the payer of the healthcare (the insurance company) is beginning to shrink as we see a shift to more consumer-driven health plans like high deductible plans and HSA-qualified plans. More of the actual charges are now being paid by the member on these types of plans. Due to this, the demand for greater pricing transparency is increasing.

We are now beginning to see the marketplace respond as third party companies are unveiling new technology designed to give us more precise information on the cost and quality of the services we seek. The Milkin Institute School of Public Health points to a number of new resources designed to give consumers cost information. Additionally, the health insurance carriers are redesigning their cost comparison tools on their member websites. Just recently, Blue Cross Blue Shield of NC introduced a new pricing tool that integrates the member’s underlying health plan to show actual out-of-pocket cost for procedures at different facilities. This gives members a true shopping experience when seeking care.

Some carriers have developed phone apps that compare expenses and outcomes for many services and procedures, allowing consumers to find healthcare providers, urgent care centers, and emergency facilities, as well as average costs for medical services.

Ultimately, we will be able to evaluate our healthcare costs quickly and easily. It will be our responsibility as consumers to use this information efficiently and hopefully make an impact to our premiums.