Many Workers Regret Their Benefit Decisions and Want More Help

Many Workers Regret Their Benefit Decisions and Want More Help

More than one in five American workers report that they often regret their benefit choices, and more than half say they would appreciate more help from their employer in making benefit decisions, the results of a survey on benefit communications conducted by employee communications platform provider Jellyvision have revealed.

The online survey of 2,043 US adults who are employed full-time, are eligible for company-provided benefits, and do not have health insurance through Medicare, Medicaid, or the Veterans Benefits Administration, was conducted from February 24 to March 17, 2017. In addition to finding that 21% of the respondents say they regret some of their past benefit choices, the survey showed that 55% of employees whose companies offer health insurance indicate they would like help from their employer when choosing a health plan, 49% of respondents say they find that making health insurance decisions is always very stressful, and 36% of respondents say the open enrollment process at their company is extremely confusing.

The survey also looked at how workers respond to efforts by their employer’s benefit communications. The results showed that 60% of respondents prefer to receive information about company benefits electronically, and that 20% of respondents say they do not always keep up with benefits correspondence. For example, the findings indicated that some employees do not attend company benefits meetings, never read their company benefit summary plan description, or file or throw away paper benefit materials unread.

In addition, the survey uncovered a number of employee knowledge gaps around health care costs and high-deductible health plans (HDHPs). The findings showed that 54% of the workers surveyed are unsure of when they can make changes to their insurance during qualified life events, and that 43% are unclear on where to direct their health insurance questions. The survey also found that 41% of respondents are unable to identify all of the elements that add up to the full cost of their health care, such as employee and employer contributions and the cost of care; and that 50% of respondents admit they are not knowledgeable about HDHPs.

Researchers emphasized that these knowledge gaps can play a critical role in how employees use and value their benefits. The survey showed, for example, that the employees who claim to be knowledgeable about HDHPs are much more likely than those who said they are not knowledgeable to positively describe the option, with 26% of the knowledgeable respondents, but only 9% of those who said they are not knowledgeable, describing HDHPs as affordable.

As well as asking workers about their employers’ benefit communications, the survey asked respondents to react to a possible repeal of the Affordable Health Act (ACA), particularly as it relates to employer-provided health insurance plans. While 61% of respondents said they do not think a repeal would affect them personally, most expressed support for key ACA provisions on annual (72%) and lifetime coverage limits (74%), coverage of preexisting conditions (80%), free preventative care (78%), and coverage of adult children up to age 26 (67% of those who have children under age 26), with the majority saying such provisions are “absolutely essential” or “very important.”

From Benefit Trends Newsletter, Volume 60, Issue 8

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.

CDHP Market Share Continued To Grow In 2016

CDHP Market Share Continued To Grow In 2016

Consumer-driven health plans with high deductibles continued to gain market share in the U.S. in 2016, and appear to be having the intended effect of encouraging the insured to become more involved in their own health care, according to an analysis of survey data published by the Employee Benefit Research Institute (EBRI) and Greenwald & Associates.

The survey of 3,295 adults with private health insurance coverage through an employer or purchased directly from a carrier or through a government exchange was conducted August 11-24, 2016. A report on the findings of the annual survey was released as an EBRI Issue Brief on May 27, 2017. The results indicated that a steadily growing share of Americans with health coverage are in a consumer-driven health plan (CDHP) associated with a high-deductible health plan (HDHP), a health savings account (HSA), or a health reimbursement arrangement (HRA).

While 73% of the privately insured adults surveyed said they are enrolled in a traditional health care plan, 14% indicated they are enrolled in a CDHP linked to an HSA or an HRA, and 14% reported that they are enrolled in an HDHP (with a deductible of $1,300 or higher for single coverage and of $2,600 for family coverage) not linked to an HSA or an HRA. Researchers noted that among individuals with traditional coverage, a growing number have the option to choose a CDHP, and that those who choose a CDHP are remaining enrolled for a longer time.

The survey findings showed that more than half of CDHP enrollees have an HSA, and are taking advantage of growing employer contributions. Among the respondents who said they are enrolled in a CDHP, 56% (16.3 million) indicated they have an HSA; 19% (5.5 million) said they are enrolled in an HRA; and 25% (7.3 million) said they are enrolled in an HSA-eligible health plan, but do not have an HSA.

The study’s authors observed that it is becoming increasingly common for employers to contribute to their employees’ HSAs, and that the dollar amounts of these contributions are rising. In the 2016 survey, 78% of CDHP enrollees reported that their employer contributed to their account that year, up from 67% of those polled in 2014. Of those CDHP enrollees receiving an employer contribution, 20% reported a contribution of at least $2,000 in 2016, up from 10% in 2014; while 42% reported an employer contribution of $1,000-$1,999 in 2016, up from 36% in 2014.

The survey also found that consumer behaviors are linked to CDHP enrollment, as the respondents in a CDHP or an HDHP were more likely than those in a traditional plan to report engaging in cost-conscious behaviors. For example, the survey showed that respondents in a CDHP were more likely than respondents in a traditional plan to report that they had checked whether the plan would cover care (54% vs. 44%), that they had asked for a generic instead of a brand name drug (48% vs. 37%), and that they had used an online cost-tracking tool provided by the health plan (31% vs. 20%). The results also showed that CDHP and HDHP enrollees were more likely than traditional plan enrollees to indicate that they tried to find cost information before obtaining care: nearly one-half of HDHP enrollees and 43% of CDHP enrollees said they had searched for cost information, compared with 32% of traditional plan enrollees.

In addition, the survey respondents enrolled in CDHPs were more likely than those enrolled in HDHPs or in a traditional plan to report that they have a choice of health plans: two-thirds of CDHP enrollees said they have a choice of health plan, compared with 59% of both HDHP enrollees and traditional plan enrollees.

From Benefit Trends Newsletter, Volume 60, Issue 6

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.

How Companies Can Assist Employees in Transitioning To Retirement

How Companies Can Assist Employees in Transitioning To Retirement

As older workers are preparing for retirement, employers can help them make this sometimes challenging transition smoother by encouraging these employees to think about the steps they can take to create value and improve their well-being before and during retirement, according to an article that appeared in the April 2017 issue of Workspan, a magazine published by HR association WorldatWork.

The article, “How to Help Employees Ease into Retirement,” was written by Lori Block and Alan Vorchheimer of Conduent HR Services. The authors observed that given the extended lifespan of the average retiree, people who are preparing to leave the workforce have to consider the possibility that their retirement could last 20-30 years. Thus, they pointed out, prospective retirees will have to adjust to a number of new realities in order to live “well” during this final, and often extended phase of life.

In their article, Block and Vorchheimer referred to research done by the Gallup organization that identified “five pillars,” or elements of well-being that are essential to most people: namely, career, social, financial, physical, and community well-being. Increasingly, they said, HR professionals are recognizing that the workplace can be the foundation these pillars are built upon, providing people with the tools they need to perform well and feel good throughout their lives.

The authors advised companies looking to boost the professional well-being of their workers nearing retirement to offer these employees access to options like phased retirement, which can help both the employer and the employee gradually adjust to the individual’s departure. They also recommended that employers promote social well-being in the workplace through initiatives like multi-generational “reverse mentoring,” in which younger employees help their co-workers who are closer to retirement understand new technology and industry trends.

In addition, Block and Vorchheimer noted, employers can improve the financial well-being of older employees by offering them access to third-party vendors, voluntary benefits, and other programs they can carry into retirement. Finally, the authors advised employers to promote community well-being by, for example, giving mid-career employees and retirees assistance in transitioning from their current job to a position in a nonprofit organization that would benefit from their skills and experience.

Block and Vorchheimer stressed that applying this five-pillar approach to helping employees transition to retirement can enable employers to live up to their values and honor their commitments to their workers, while also resolving some practical issues. “On a practical level,” they argued, “it enables better workforce management and movement, breaking up possible career bottlenecks for newer employees while retaining and transferring critical knowledge from outgoing senior and experienced people.”

From Benefit Trends Newsletter, Volume 60, Issue 6

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2018 Liberty Publishing, Inc. All rights reserved.

A Continued Shift toward Value-Based Health Care

A Continued Shift toward Value-Based Health Care

While the outcome of the 2017 presidential election is expected to usher in a new era for U.S. health care, the painstaking and challenging work of shifting to value-based care will likely continue even if the Affordable Care Act (ACA) is repealed, according to the PwC Health Research Institute’s annual report.

The report, published in December 2016, observed that President-elect Donald Trump, along with a number of leading Congressional Republicans, have said they intend to repeal the ACA and replace it with a mix of tax credits, health savings accounts, high-risk pools, state Medicaid block grants, and a transfer of regulatory control from the Federal government to the states. The study also pointed out that President-elect Trump has called for reforming the U.S. Food and Drug Administration and modernizing Medicare.

While acknowledging that the goals of Republicans can be seen as representing a break with the health care reform efforts of Democrats, researchers pointed out that the overarching mission of transforming the health care industry to offer more value-based care has been underway for years, through Democratic and Republican administrations. Specifically, they noted, policy-makers from both parties are committed to ensuring that health care is affordable and of high quality, and that health care providers and insurers use patient-centric approaches and promote consumer choice. The report’s authors predicted that 2017 will be a year dominated by this continued shift toward value, albeit with a greater emphasis than in recent years on free market approaches.

The most significant change in health care policy that is likely to occur in 2017 is the start of the process of repealing and replacing the ACA, the report said. Yet according to researchers, a review of Republican efforts to repeal the law since it passed in 2010 shows that any dramatic moves would likely be followed by a transition period for some provisions. They pointed out, for example, that President-elect Trump has indicated that he wants to keep popular parts of the law, including the requirements that insurance coverage cannot be denied based on health status or age, and that these requirements could in turn cause premium costs to increase.

The report also speculated that there could be changes in drug pricing in the coming year, as the public demand for drug pricing accountability, pushback from drug purchasers, and the potential for new price control regulations are prompting pharmaceutical company executives to embrace voluntary codes of conduct to rein in the kinds of pricing practices that have led to Congressional shaming and executive resignations.

In addition, the report observed that although the U.S. health care industry lags behind other industries like retail and telecommunications in deploying emerging technologies such as artificial intelligence, drones, and virtual reality, 2017 is the year to prepare for the eventual arrival of these technologies and their effects on business models, operations, workforce needs, and cybersecurity risks. For example, the report said, a consumer-operated tricorder could perform work now handled by primary care medical professionals, increasing efficiency. Moreover, new technologies could revolutionize pharmaceutical supply chains, or be used to collect data and issue warnings on the spread of infectious diseases.

From Benefit Trends Newsletter, Volume 50, Issue 2

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.

Narrow Networks Rare in Employer-Sponsored Plans

Narrow Networks Rare in Employer-Sponsored Plans

While so-called “narrow provider networks,” which limit the health providers covered by health insurance plans in order to reduce costs, have become common in the health insurance plans offered through the exchanges of the Affordable Care Act (ACA), they do not appear to be widespread among employment-based health plans, according to an analysis published on December 14, 2016, by the Employee Benefit Research Institute (EBRI).

The analysis was conducted by Paul Fronstin of EBRI in association with Mark A. Hall of Wake Forest University. To measure the extent to which narrow networks are becoming a feature of employer-sponsored health plans, the researchers conducted a literature review, interviews with HR directors at 11 large employers, and field research by health policy experts in 11 states. The study defined narrow networks as networks that offer considerably fewer health providers than is typical in the group market, and in which providers are included primarily based on price discounting.

The results of the analysis indicated that although narrow networks are playing an increasingly prominent role in the ACA individual (non-group) marketplace exchanges, this trend has so far not been observed among employers. For example, the study cited research showing that only 7% of employers with health plans offered a narrow network in 2016, and that employers surveyed in 2014 ranked narrow networks as the least effective among several strategies for managing health insurance costs.

According to the study, the reasons HR directors gave for their muted interest in moving to a narrow network include the absence of a track record showing sustained (year-over-year) savings; concerns about antagonizing workers; the spotty availability of narrow networks, especially in rural areas; greater interest in other cost-savings strategies; and a reluctance to make substantial changes in benefit structures until the future of the ACA’s so-called “Cadillac tax” is resolved.

The authors also observed that employers’ reluctance to adopt narrow networks is reinforced by uncertainty over whether particular hospitals and physicians will remain part of new networks year after year. For example, they noted, larger employers typically conduct a “disruption analysis” before considering a change in networks to determine how many workers might have to change their current providers.

In addition, the authors pointed out that employers that currently offer plans with narrow networks could increase participation in these plans by giving workers stronger financial incentives to consider this option. For example, employers may want to consider adopting a model of managed competition in which employers make defined contributions on behalf of employees through private or public insurance exchanges.

Hall and Fronstin added that there are signs that employers’ interest in narrow networks may increase in the near future, as more than one-third of employers with 5,000 or more workers have been found to currently offer some type of alternative network, including a tiered or a “high-performance” network. The researchers also cited field reports suggesting that the adoption of narrow networks is growing among both large and small employers, particularly in urban areas.

From Benefit Trends Newsletter, Volume 60, Issue 1

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.