Posts belonging to Category healthcare reform

For all the talk about encouraging workers to take more control of their healthcare decisions, it seems many employees are neither prepared or all that eager to grab the reins.   

For that matter, nearly three-quarters of the workforce (72 percent) have not even heard the phrase “consumer-driven healthcare,” according to the 2013 Aflac WorkForces Report, which recently surveyed 1,884 benefits decision makers and 5,299 employees.

More signs that HR and benefits leaders may have a tough road ahead in helping employees better understand healthcare reform and their increasingly complex healthcare coverage options:

• More than half (54 percent) of workers would prefer not to have greater control over their insurance options, because they don’t have the time or knowledge to effectively manage it.

• Thirty-two percent of employees indicated they are “not very” or “not at all” knowledgeable about health-savings accounts. More than three-quarters (76 percent) of workers said the same about federal and state healthcare exchanges, with 49 percent describing themselves as “not very” or “not at all” knowledgeable about health-reimbursement accounts.

Educating workers on the changes coming with the Affordable Care Act doesn’t seem to be a top priority for some employers, either:

• Despite 75 percent of employees saying they think their employer would educate them about changes to their coverage as a result of healthcare reform, just 13 percent of employers said educating employees about healthcare reform was important to their organizations.

“It’s time for consumers to face reality,” said Audrey Boone Tillman, executive vice president of corporate services at Aflac, in a statement.

Tillman advises employees and HR to sit down together to address questions and explain policies, key terms, deductible limits and co-pay and co-insurance requirements, as a first step toward helping workers make sensible decisions going forward.

“The bottom line,” she says, “is if consumers aren’t educated about the full scope of their options, they risk making costly mistakes without a financial back-up plan.”

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Mercer’s Tracy Watts, partner, and Stefan Gaertner, principal, want HR and benefits leaders to look at the Affordable Care Act and all its many implementations looming on the horizon as opportunities, not dangers or threats.

In their joint session Tuesday at the WorldatWork Total Rewards 2013 conference, Hourly Workforces and Healthcare Reform: Angst or Opportunity? each one emphasized the need for HR and benefits professionals to take everything into consideration before making any moves, or even worrying about them — costs of providing healthcare, costs of getting out of the healthcare business altogether, costs of keeping all full-time employees so classified, savings of switching some to part-time (under 30 hours a week) to avoid some of the ACA’s costs, even the impact of potential legislative penalties and liabilities that have emerged recently should employers be planning a blanket reassignment in workers’ hours to avoid the mandate that FTEs be offered healthcare insurance under the new law.

In essence, with healthcare exchanges set to be implemented in October and many other ACA regulations coming in January, now’s the time to look at the whole ball of wax and decide what combination of options — yes, some admittedly scary — will work best for your organization.

Watts and Gaertner both provided research findings that added some real meat to the discussion, and to the notion that no decision will be an easy one. One study, for instance, showed a direct relationship at several client companies between full-time employees and profitability. That data showed converting FTEs to PTEs could yield as much as about $30 million in savings, yet cost about the same amount in lost productivity and profitability.

“There is clear suboptimal performance and increased absenteeism among part-time employees,” said Gaertner. He also cautioned that increased costs in doctors’ visits, absenteeism, even worker energy, needs to be factored in to a company’s decision on what to offer, what not to offer and whose classification to change.

“One company showed $10 million in [annual] added cost [projections] based on employee errors” alone when switching from full-time to part-time, Gaertner said.

Following the session, both Watts and Gaertner stressed that few large companies seem poised to make dramatic changes to their offerings and/or classifications at this time.

Most, said Gaertner, are using the oncoming ACA implementation as “a good opportunity to really start taking the healthcare question seriously, reviewing the strategic and financial value of healthcare coverage for your employees.”

No two companies, he added, are the same.

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For most employers, preparing to comply with the ”pay or play” requirement of the Affordable Care Act is shaping up to be a world-class headache. Large employers with multistate operations face their own set of challenges, and these were the topic of a panel discussion on Day Two of the Health Benefits & Leadership Conference^™ in Las Vegas.

Brant Suddath, benefits director at Atlanta-based The Home Depot, said he was spending lots of time trying to figure out who, among the retailer’s approximately 120,000 part-time U.S. employees (out of a total employee population of 330,000) would qualify for healthcare benefits from the company. He added that it’s important to “work closely with your broker/consultants” on this and other ACA-related matters. Marisa Milton, vice president for HR policy, strategy and compliance for Bethesda, Md.-based Marriott International, said her company was working with financial models to determine how the law may affect Marriott financially.

“We’re taking a ‘the sky is falling’ approach, thinking about what the worst-case scenario could be,” she said. “The potential cost impact of this legislation is going to be huge, so we’re working with different departments–including finance–to figure out how this may affect the company and the changes we may need to make.”

Milton said the company was mostly taking a wait-and-see approach before making any major changes to its healthcare offerings, adding that she did not anticipate any big changes before 2015. “After 2015?” she said. “We’ll see.”

None of the participants–who, in addition to Suddath and Milton included Ed Bray, director of employee benefits at Hawaiian Airlines and Andrew Gold, vice president for total rewards at Pitney Bowes–said their companies were planning to stop offering healthcare benefits as a result of the new law, certainly not in the near term. Gold said Pitney Bowes may look at some options for potentially offsetting the cost of complying with the new law, including narrowing its network of healthcare providers and moving more employees into high-deductible health plans. However, the company is concerned about taking actions that may affect employee engagement, he said.

“Benefits are so important to employees now, and you have to make changes very carefully,” said Gold. “I don’t think we have the license to do the things we want to do just to drive costs down.”

A big concern for all of them is ensuring that employees understand how the law’s healthcare exchanges will work and whether they’ll make the right choices in terms of seeking coverage on the exchanges. “It keeps us up at night–who is going to be walking the employees through all these decisions?” said Suddath.

“The level of confusion among employees about this law is off the charts,” said Milton. “We’re starting to realize that we need to focus on helping employees gain a basic understanding of the law and what it means for them.”

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As attendees gathered into the general session room for the opening keynote at the Human Resource Executive Health & Benefits Leadership Conference^™, the energy in the room felt much different — more charged, more urgent, more focused — than any other that I’ve been in over the last few years.

Even before keynote speaker Dr. Ron Leopold started his remarks, people were in their chairs early, ready to go—pens and notepads out, smartphones charged. I assumed they were just anxious to hear Leopold answer the question he’d posed in his session title (which he even admitted was selected to get tongues wagging), “Are benefits forever?”

However, as the session progressed, I realized attendees weren’t seeking paydirt on Leopold’s query and they weren’t looking to sit in a drum circle for a “PPACA therapy session,” as one pro in the room tweeted.

Rather, as the clock ticks down to mere months before practitioners face the full force of health care reform the attendees this morning wanted solutions. They wanted strategies. And by the looks on their faces, they weren’t leaving until they got them.

I had a lightbulb moment. I realized that employers are no longer panicked about PPACA. They are purposeful.

Following the Supreme Court’s affirmation of the health care reform law and the re-election of President Obama, us benefits communicators have been waiting for that shift from employers for a while now. We’ve been waiting patiently—some of us more so than others—for you to turn flimsy ideas into firm plans. Mostly so that we could stop writing stories about how you’re all in “wait and see mode,” and start writing about strategies about how to work now that you’re in “decide and do” mode. That makes our jobs waaaay more exciting, and also more meaningful.

As Leopold noted, “Most employers—according to most survey and research data—have decided to ‘play’ [under PPACA’s employers mandate], but it’s a different playing field.” From my vantage point, what brought practitioners here to Las Vegas for HBLC is much more than to spend three days in 90-degree weather (although it’s a nice bonus). They’re here this week because they understand, as Leopold said, “The answer to PPACA isn’t in the health plan alone, [and] even if employers get out of the health care business, they’ll never get out of the productivity business.”

So, to succeed on that new playing field, employers know they need some new plays. For example, I ate lunch with a woman today who is at HBLC seeking new ideas for her organization’s wellness program. I asked her about the current offering, and it sounded like a rousing success—in five years, the plan has garnered more than 50 percent participation using a well-structured blend of incentives and challenges to keep employees engaged. It also features employee health fairs where employees and their families can receive biometric screenings, so employees’ engagement via the fun stuff still can lead to actionable health conversations with their physicians. Further, it’s a collegiate environment, so she and her team leverage the school’s kinesiology students to serve as personal trainers for employees.

I know employers that would love to have resources and participation levels like that, I told her. What exactly was she looking to change?

The impact of PPACA has the organization considering self-funding, she said. So, instead of just wellness carrots, “it may be time to bring in sticks, too.”

Like Leopold said, employers are playing, but on a whole different playing field. I, for one, am encouraged that here at HBLC, HR/benefits pros understand that and are prepping new and improved benefits playbooks for game time come January.

Kelley M. Butler is the Editorial Director at Benz Communications, a consulting firm specializing in benefits communications. Formerly the Editor-in-Chief of Employee Benefit News, Kelley has been covering news and trends in human resources and employee benefits for more than 12 years. Follow her updates from HBLC on twitter at @kelleytheeditor.

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Just got word from a source close to this subject that the Massachusetts Board of the Connector (the state agency that administers the state healthcare-law requirements) just approved a measure on Thursday that could mean big penalties for Massachusetts employees in 2014, when healthcare reform mandates kick in, and could affect employers there as well.

Rich Stover, a principal at New York-based Buck Consultants, who testified before the Connector Board back in January about this, tells me the board’s approval of amendments to the state’s idividual-mandate requirements will result in Massachusetts employees being subject to significant penalties even if they have comprehensive health coverage that satisfies the ACA requirements.

Employers there, he says, will have to revise their plan designs or complete an uncertain certification process with the state in order to ensure their employees aren’t hit with such penalities.

Since it’s involved and a bit confusing, here’s his rundown of the whole affair:

In 2006, Massachusetts enacted a health reform law that requires Massachusetts residents age 18 and older to have health coverage that meets certain minimum creditable coverage (MCC) requirements or be subject to tax penalties. This reform law was the model for the federal Patient Protection and Affordable Care Act. Although the MCC requirements only apply to residents and do not apply directly to employers, if an employer plan does not satisfy the MCC requirements, employees and family members enrolled in that employer plan may be subject to these Massachusetts’ tax penalties.  The maximum annual individual penalty for 2012 is $1,260.

With the ACA employer and employee mandates and penalties going into effect in 2014, Massachusetts had to decide whether to continue the individual mandate and MCC requirements [then].  On March 14, the Board of the Connector … met and decided to continue, and strengthen, the individual mandate in 2014. The 2014 requirements could subject Massachusetts residents participating in large employer plans to significant penalties if their employer coverage does not satisfy the new MCC requirements, even though the employer plan fully complies with the federal ACA requirements.

In 2014, Massachusetts will require that medical coverage provide 100 percent coverage for preventive-care service and limit out-of-pocket amounts paid by enrollees to certain maximum amounts.  ACA requires that non-grandfathered plans meet these requirements, but not grandfathered plans or certain retiree plans. In addition, ACA has a special transition rule in 2014 for prescription-drug benefits that Massachusetts is not providing.  So employees in grandfathered plans under ACA may be subject to Massachusetts penalties, even though the plan is fully in compliance with the ACA. Employers can help employees avoid these penalties by filing their plans with the Connector and seeking approval for the plan.

Here, by the way is a helpful link from Stover recapping the board’s Thursday meeting and actions, as well as previous ones.

In essence, Stover says, “employers who had assumed that the Massachusetts requirements would no longer apply with federal reform being effective in 2014 will be very disappointed to learn that the compliance efforts, administration and penalties will continue under state law.”

So what does all this mean for human resource professionals in Massachusetts and possibly beyond?

“As they plan for 2014,” says Stover, “human resource officers will need to make sure they address both the federal and state requirements, which [obviously and apparently] will put an additional burden on Massachusetts employers.”

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Came across this helpful post on the headcount-accounting rules for providing healthcare coverage under the Patient Protection and Affordable Care Act.

The post, courtesy of the Society for Human Resource Management (subscription required), makes note – with links provided – of two recent releases you should know about. One is a Jan. 2 publication in the Federal Register by the Internal Revenue Service of its proposed “Shared Responsibility for Employers Regarding Health Coverage,” with guidance on complying with the requirement that large employers provide affordable healthcare coverage under the act. The other is the IRS’s online post of questions and answers regarding those “shared responsibility” provisions.

What’s essential to note here, according to the release, is the healthcare mandate’s application “to employers with 50 or more full-time employees or a combination of full-time and part-time employees that is equivalent to at least 50 full-time employees.” Granted, this sounds like it affects smaller employers more than large ones, but it needs to be worked into all headcount calculations, and large employers choosing to opt out of healthcare-plan provisions need to know what they’re getting into.

To quote the release:

… large employers that do not offer coverage to their full-time employees face a penalty of $2,000 times the total number of full-time employees if at least one employee receives a tax credit to purchase coverage through a state-based health insurance exchange established under the PPACA.

If large employers do offer coverage to their full-time employees and their dependents but the coverage is “unaffordable” to certain employees or does not provide minimum value, the employers face a penalty of $3,000 times the number of full-time employees receiving tax credits for exchange coverage (not to exceed $2,000 times the total number of full-time employees).

Here’s the general mandate behind those calucations, according to the release:

Employers with 50 or more full-time employees (including full-time equivalents) must offer all employees working an average of 30 hours per week or more in a month healthcare coverage with “minimum value,” beginning in 2014, or pay penalties.

In other words, although large employers are not required to provide healthcare coverage to part-time employees working less than 30 hours per week, these part-time employees are included in calculating the threshold number of 50 workers (including full-time equivalents) that would require employers to offer affordable coverage to all full-time employees.

It gets even more involved:

As explained in the new Q&As, because under the PPACA a full-time employee is an individual employed on average at least 30 hours per week, half-time would be 15 hours per week, and 100 half-time employees would equal 50 full-time employees. In another example given in the Q&As, 40 full-time employees employed 30 or more hours per week on average plus 20 half-time employees employed 15 hours per week on average are equivalent to 50 full-time employees.

In addition to spelling out more details on how FTEs are to be calculated under the new law, the release includes specifics on other types of employees, such as seasonal workers and transition relief.

Obviously, as with all aspects of the ACA, you should be conferring with your legal and benefits consultants first and foremost.

Given the intricacies of these FTE calculations, it might behoove you to confer with some mathmeticians and accountants as well.

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No harm in reminding one and all that you have until March 1 — according to the recently enacted Affordable Care Act — to notify your employees about state-specific healthcare exchanges to be set up before 2014.

This alert from the Society for Human Resource Mangement lays out what you need to be doing next, according to the new law, after you’ve satisfied your January 2013 healthcare-benefit cost-reporting requirement for 2012 W-2s, that is. (Appropriate informational links are included in the SHRM piece; note, though, that the SHRM site is a subscription-based one.)

In the piece, Jennifer Benz, CEO of Benz Communications, lists three specific communication requirements employers must satisfy by March 1:

• State exchange basics. This is a description of the state exchange, the services provided by the exchange and how to contact the exchange (website and customer service number). One wrinkle: not all states have decided how they’re going to comply (the National Conference of State Legislatures provides an up-to-date chart of state implementation efforts). Employers in multi-plan states will have an even more challenging time.

• Individual plan value. This explains whether employees will receive at least 60 percent coverage of essential health benefits through employer-provided coverage, and whether employees may be eligible for a premium tax credit if they purchase a plan on the state exchange.

• Tax implications. Because health-insurance premiums under employer-sponsored coverage may be paid with pre-tax dollars, buying coverage through a state exchange may change an employee’s tax obligations. Employees using an exchange to purchase coverage may lose their employer’s tax-free contribution (if any) to their health coverage, also.

Although many benefits and HR experts are predicting the March deadline will be extended, considering the U.S. Department of Labor has yet to release proposed regulations or samples of a model notice, Benz suggests integrating the three-part notice into your overall health-benefits-communication strategy regardless.

“No matter what deadline the DOL ultimately sets,” says Benz, “employers need to be prepared to include [these three points] in their communication plans for 2013.”

“Communicate your 2014 position before the legalese does,” she adds. “Be sure to use language that fits the notice into your big-picture approach to healthcare-reform compliance. For many employers, this strategy is going to include high-deductible health plans and incentive-heavy wellness programs, two benefit strategies that require robust, thoughtful communications in their own right.”

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On this, the last Saturday in 2012, I went hunting and pecking for a few things I might share about the HR profession — looking back on the year that will soon be history as well as anticipating the one to come.

With healthcare and the impending Affordable Care Act enactments that much closer, this list from Mercer of the top five priorities for employer-sponsored health plans in 2013 seemed a helpful one. I was especially drawn to its specific suggestions for customizing plan designs and contributions in today’s high-health-cost environment, and for making health exchanges work best for you.

One blog post from an Edwardsville, Ill.-based employment, payroll and workforce-services company, Extra Help Inc., lays out its leading seven concerns HR professionals should be attending to right now. Though some of the list is aimed at Missouri and Illinois businesses, and promotes its services, it’s still a nice, succinct rundown of things you should have on your front burner — such as whether you’re fully versed in healthcare-reform requirements, whether you’re up on all you’re supposed to have posted around your environs and whether you really have the best plan in place when employees start leaving as the economy continues to improve.

Looking across the pond, I found this post from CIP HR, based in Buckinghamshire, England, that — interestingly — echoes many of the same cost-centered concerns HR professionals in the United States face in 2013: making sure the right talent gets into the right post to begin with, making sure younger workers get the kind of development opportunities that will encourage them to stay since they can’t climb the corporate ladder the way their parents did, and making sure social-media policies are crafted correctly, to keep you out of court.

Couldn’t find quite as much out there on top HR issues of 2012, but probably wouldn’t/couldn’t have found anything better than our own Winners and Losers list for 2012 from HRE Editor David Shadovitz. And, in keeping with other lists’ overriding focus on healthcare and healthcare reform, no surprise that his No. 1 winner is Obamacare.

Also, for the record, here again is Web Editor Michael J. O’Brien’s blog post on what you blog readers read the most this past year on The Leader Board. May be a reflection of what caught your eye more than what has been or will be keeping you up at night, but a reflection nonetheless.

And, as I intimated up top, there’s probably no better time to reflect than when one year bites the dust and another one is born.

Happy New Year everyone.

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Red flags are starting to wave over a temporary reinsurance program the U.S. Department of Health and Human Services has proposed as part of the Affordable Care Act.

The HHS intends for the program — which would take effect in 2014 — to stabilize premiums, not allow coverage denials because of pre-existing conditions, and limit premium variations based on age, gender and smoking status.

What’s raising concerns — “ire” might be a better descriptor — is a clause within the proposed plan that imposes an annual $63 per-health-plan-recipient fee on group-health-plan providers, i.e., employers.

Just Saturday, in this story from the Columbus Dispatch, U.S. Rep. Pat Tiberi, who represents Ohio’s 12th congressional district, blasted the proposed rule. He’s worried the plan that would be imposed on employers who pay for insurance might spur them to stop providing it to their employees, pushing them into insurance exchanges instead.

“This was buried in the healthcare-reform legislation,” he told the Dispatch, ”and no one ever talked about it.”

Indeed, as Chantel Sheaks, a principal in the Washington-based government-affairs practice for Buck Consultants, puts it: “I call this the sleeper issue of 2012 … and people are waking up to a nightmare.”

She goes on to say that the statute is unclear and confusing in the way it refers to those responsible for feeding this reinsurance fund as “issuers” and “third-party administrators on behalf of group health plans.” In the preamble of a revision to the statute, issued earlier this month, “group-health plans” are cited as the responsible parties.

According to Sheaks, this could be a devastating blow to the business community.

“Let’s assume you’re a small employer, you have 500 employees, so you have about 1,000 covered individuals on the plan,” she says. “So, looking at [$63 per covered head, that fee] is going to be $63,000. That’s someone’s salary; maybe two.”

The money slated to feed into the fund is hefty, according to this alert from Lockton Health Reform Advisory Practice: $12 billion in 2014, $8 billion in 2015 and $5 billion in 2016.

For the record, the fee is intended to be a temporary, three-year assessment that will decrease each year, with most of the money going into an HHS fund aimed at helping providers with costs incurred by medical and chronic conditions of those covered through the employer, as well as the cost of covering uninsured people with health problems.

As HHS spokesperson Erin Shields Britt told the Dispatch, “Congress included this program to reduce premiums for people who buy insurance. This three-year program will help ensure people who have insurance no longer have to shouler the cost of caring for the uninsured, which has raised healthcare costs for decades.”

For your reference, here is the HHS’ site for overall information regarding healthcare reform, as it applies to individuals, providers and businesses. Here too, for further reference, is the Assocated Press story about the proposal that ran on the Fox News site.

Other helpful links include this complete information sheet from Buck Consultants on the transitional reinsurance program and the higher costs for group health plans, the final reinsurance regulations issued by the HHS in March and the more recent proposed changes to those final regs, issued earlier this month, in which the reference to group-health-plan responsibility can be found in the preamble.

So, what should employers be doing with all this, you ask? Sheaks says “take action.”

Too many employers and their HR leaders have been resting way too comfortably in the mistaken knowledge that this particular piece of healthcare-reform legislation couldn’t possibly impact them this much, she says. “They thought they might be charged something, but I don’t think any of them were thinking $63 per [covered] head per year — employees and their families,” she says.

With some time left to change the tide, she adds, “now is the time to really sit down and talk about such a massive fee on employers.”

“If [HR and benefits professionals] haven’t communicated this to their CEOs or CFOs,” she says, “they should do so immediately [and decide] what they’re going to do: Avoid the cost [and] pay the penalty? Pass it along? All of it or some of it?

“When I talked to some of my cohorts on the employer side, they said, ‘This is a lot of money, but the issuers will probably pay for most of this and the HHS will contribute some.’ ”

Evidently, it appears they may have been wrong.

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A reassuring moment occurred at Tuesday’s CHRO panel discussion on “Benefits in a Time of Uncertainty” during the 15th annual HR Technology^® Conference in Chicago.

To a person, every panelist — Artell Smith, CHRO at Aon Hewitt; Brian Johnson, executive vice president of HR at Fidelity Investments; Norbert Englert, CHRO at Mercer; Gail McKee, CHRO at Towers Watson; and Tom Maddison, corporate senior vice president and CHRO at Xerox Corp. — agreed their companies would not be casting their employees off, across the board, into healthcare exchanges under the impending healthcare-reform implementation.

And this despite prevailing research showing between 2 percent and 20 percent of employers are expecting to drop employer-sponsored benefits and release their employees to the exchange system come reform-enforcement time, said Mark Stelzner, principal and founder of Inflexion Advisors, and moderator of the HR Technology^® Conference session.

Nevertheless, also to a person, panelists shared new strategies and approaches they’re taking to help their workers embrace the coming healthcare-change monsoon.

“My charge,” said Smith, “is to help employees see what they can take charge of in this uncertainty.”

Or, as Maddison agreed, “Uncertainty is an enabler of change.”

All discussed their slow-but-proven successes in consumer-driven-healthcare and health-savings-account initiatives.  They also elaborated on some of the bumps in the roads.

Are employees ready for the added responsibilities in determining their own care, adopting healthier lifestyle choices and taking additional steps to reduce costs?

“Yes,” said McKee, “they are ready to take control of their care. We’re already seeing results in dropped emergency-room visits [and other indicators], but it takes time … and it takes identifying and going after those pockets of resistance [that emerge]. It has to evolve.”

Making the successful transition from top-down to employee-owned healthcare, here and abroad, will also require more energy on the part of employers in setting up action plans for each individual. “We need more energy around the specifics,” said Maddison.

Englert agreed: “The way people decide is usually not as rational as we would like. It’s not easy to get people to really spend the time to manage health and cost consequences. We can’t just say, ‘Here is it, go for it and good luck with it.’ We need to provide guidelines and pointers.”

Johnson concurred as well. “Anything we can do to ensure, simplify, personalize, streamline, use vehicles of education — such as role-modeling — that we’ve never used before,” he said, “we should be doing.”

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