Posts belonging to Category healthcare



Adding to ACA Uncertainty

ACAA pair of appeals court rulings made just hours apart yesterday seem to have compounded employers’ confusion surrounding the Affordable Care Act.

First, the 4th Circuit U.S. Court of Appeals in Washington ruled in the case of Halbig v. Burwell that the ACA does not permit the Internal Revenue Service to distribute premium subsidies in the 36 states where exchanges are run by the federal government.

Later in the day, a federal appeals court panel 100 or so miles down the road in Richmond, Va., took the opposite view, determining the ACA’s “ambiguity” affords the IRS the authority to issue the subsidies.

Reaction to the contradictory rulings—which seem to pave the way for a likely Supreme Court case—was swift, strong and, politically speaking, true to party lines.

Noting his dissent in the later ruling, D.C. Circuit Judge Harry T. Edwards described the decision as a “not-so-veiled attempt to gut the Patient Protection and Affordable Care Act.”

Meanwhile, the conservative side of the aisle commended the Richmond panel’s decision.

Speaker John Boehner, for example, described the ruling as “further proof that President Obama’s healthcare law is completely unworkable,” saying in a statement that the Affordable Care Act “cannot be fixed.”

For employers in the majority of the U.S., what happened yesterday just seems to further cloud an already uncertain future with regard to the ACA.

“The D.C. Circuit’s decision is significant in that it calls into question whether employers [in the affected states] could be subject to a penalty under the ACA’s ‘pay or play’ penalty scheme,” according to Peter Marathas, a Boston-based partner in Proskauer’s employee benefits, executive compensation and ERISA litigation practice center.

Yesterday’s decisions are “not the final say on this issue,” he says, “but [they] certainly underscore the thin thread much of the employer penalty hangs on, particularly if other courts agree with this decision.”

The matter “seems destined for the U.S. Supreme Court,” said American Benefits Council President James A. Klein, in a statement.

Klein also offered his take on how things may ultimately shake out.

“Since the employer mandate penalty is triggered when employees receive a subsidy, some employers may be relieved of penalties, or may have different levels of penalties, depending on which states their workers reside.”

In addition, some companies have weighed whether employees may be better served through steady coverage in exchanges, especially those who frequently change jobs, said Klein.

“The lack of subsidies for workers in some states certainly would change the dynamics in that decision making,” he noted, adding that further uncertainty over the implementation of the healthcare law “chills” the decision-making process for employers.

“The courts need to quickly resolve this critical issue,” he said, “one way or the other.”

A Few Surprises in Study on Hourly Workers

490136049 -- gavel and clockI met with some folks from St. Louis-based Equifax Workforce Solutions during the Society for Human Resource Management’s conference in Orlando (June 22 through 25) and they shared with me some stats they compiled recently reflecting the potential impact of the Affordable Care Act that even they admitted had some surprises in them.

Working toward Jan. 1, 2015, when the majority of the ACA’s employer mandate takes effect, the company had just released its Equifax Workforce Solutions June 2014 report, highlighting “key indicators of how the ACA will affect business[es] and what they can do to ensure compliance [thereby avoiding penalties] as the regulations continue to go into effect,” as Mike Psenka, senior vice president of Workforce Analytics for Equifax Workforce Solutions (formerly TALX), put it.

For the record, and some important reading, here is the press release and here is the infographic, based on Equifax data culled from 500 million consumers and 81 million businesses worldwide.

Surprisingly — and in keeping with employers making employee-schedule-and-status adjustments to prepare for the ACA’s mandate that all employees working an average of 30 hours or more per week be offered healthcare coverage — 66 percent of the current U.S. workforce is now hourly, accounting for more than 73.6 million active employees, and 59 percent of them are working more than 30 hours per week, according to the study. (Those numbers were higher than anticipated, the folks from Equifax told me.)

Remember, for these workers, employers must track hours for each employee over a 3-to-12-month measurement period to determine healthcare-coverage eligibility. The study found average workloads vary greatly by industry and can be a key indicator of workforce eligibility. “For example,” the report states, “hourly employees in the finance industry work an average of 37 hours per week while those in the restaurant industry work an average of 23 hours per week.”

Also somewhat surprising — to me as well — was the fact that 71 percent of hourly employees have been at their jobs longer than 12 months, which represents “a significant number of workers who may become eligible for coverage after their employer’s first measurement period,” the report says.

And don’t forget employers must also offer affordable coverage to all eligible employees, meaning the monthly premium cannot exceed 9.5 percent of the employee’s income. Based on the average hourly pay rate by industry, as computed by Equifax, estimated maximum premiums can range from $108.80 per month (in the restaurant industry) to $251.20 per month (in the healthcare industry).

The goal here in releasing these stats, Psenka said, is not only to offer employers a few more tools for protection from potential penalties, “but also [to] ensure their valued employees receive appropriate — and affordable — coverage.”

Just bear in mind, as was underscored in an otherwise enjoyable, stress-free SHRM meeting, the clock is ticking and time to get this whole hourly, ACA-eligibility thing right is running out.

Listening to the Data

I was having lunch the other day across the street from a noisy construction site. It wasn’t the best location in the world to read a book and enjoy a sandwich, but it was one of the few places I could find with some comfortable shade.

122399493As I sat there consuming my sandwich (and drink), I remember thinking to myself, “How in the world do these folks work eight hours straight with all that banging and clanging? I’m sure they were wearing protective gear to diffuse some of that noise, but despite the protection, it still had to be loud enough to drive a sane person crazy. (I eventually moved.)

If you’re like me, you probably know a few folks who’ve lost a decent amount of hearing as a result of the work they do. Some recognize they have a problem and have taken steps to remedy it, say by acquiring a hearing aid. Others are less aware, perhaps in denial or simply reluctant to do something about it. (According to the National Center on Hearing Assessment, only one in four people with hearing loss use hearing aids.)

When we think of the health and well-being of employees, a host of issues comes to mind. Diet. Exercise. Regular checkups. Hearing loss? Not really. But as a Better Hearing Institute press release sent out the other day to raise awareness on this issue points out, the problem of hearing loss is widespread, affecting more than 40 million Americans. And costly.

In an effort to bring attention to the issue, the American Tinnitus Association recently sent out its own press release, encouraging both employers and employees to be proactive. It urged employers to develop engineering controls to reduce overall noise output and implement administrative procedures to minimize workers’ noise exposure. Meanwhile, it asked workers to take control of their hearing health by using appropriate ear and noise protectors.

Of course, before either of these things are going to happen, employers and employees alike are going to have to get on the same page and acknowledge that a noise problem exists. Soon-to-be-released research suggests there’s a definite disconnect here between the perceptions of the two.

According to a survey of 1,500 full-time workers and nearly 500 benefits professionals by EPIC Hearing Healthcare ( a hearing-care provider), employees and employers each have a somewhat different take on the situation. Asked how many hours a day they believe their workplace is noisy, more than half (55 percent) of the employee respondents said it is noisy for more than one hour a day and more than one-third (36 percent) said it was noisy for more than three hours a day. In contrast, nearly 80 percent of employers said their workplace is hardly ever noisy.

The EPIC research also found nearly half of the employees felt the level of noise at work was damaging their hearing, even though less than one in four have had their hearing checked in the past two years.

In light of the above data and the impact hearing loss can have on productivity, employers shouldn’t be turning a deaf ear to this issue (excuse the pun). Indeed, they certainly have no shortage of tools available to them, ranging from reducing noise levels in their workplaces and providing employees with better protection to offering “financial support” through insurance products (EPIC’s business) and raising employee awareness.

Being this month is National Employee Wellness Month, I would think it might be as good a time as any for employers to revisit the state of their respective workplaces as far as noise exposure is concerned and the efforts that they’re taking to address the problem.

The Cost of Cancer in the Workplace

I came across some pretty alarming statistics the other day regarding cancer’s impact on the workplace.

78770849-- cancer at workThe report, from the Integrated Benefits Institute, shows cancer typically costs employers about $19,000 annually per 100 employees in lost work time and medical treatments.

Broken down, lost work time and underperformance at work, the latter also known as presenteeism, due to cancer costs employers $10,000 per 100 workers, and medical and pharmacy treatments cost about $9,100. Employees with cancer, the report says, are absent 3.8 more days per year than workers without cancer, and also lose the equivalent of 1.8 more days per year to presenteeism.

In the words of Tom Parry, IBI president:

Cancers present complex challenges for the workplace. At a basic, human level, a cancer diagnosis is a frightening, sometimes emotionally devastating, event. It is natural that co-workers and supervisors will want to provide support to a friend and colleague when told he or she has cancer. At the same time, balancing privacy and workplace accommodation is a critical, but sensitive, issue. Many employees with cancer will frequently feel too sick to work, while others report that remaining on the job keeps them ‘connected’ and provides a sense of routine as they undergo treatment.”

Considering there are very few of us who have not been touched by cancer, myself included (my father is undergoing chemo as we speak), I’m thinking the disease must touch just about every workplace as well. So, given the prevalence and inherent challenges in addressing it, what are employers to do?

The IBI report suggests upping your commitment to workplace-based cancer screening and job accommodations. Here are some of those advantages, according to the study:

  • Compliance rates with cancer-screening guidelines are highest when there is access through insurance-plan coverage.
  • Workplace educational programs have been shown to raise awareness of and screening for colorectal cancer.
  • Workplace screening for breast cancer reduces lost productivity.
  • Employees whose breast cancer was detected early through on-site mammography experienced half as many lost workdays for treatment as employees whose cancer was detected later.
  • Providing job accommodations or other workplace stay-at-work or return-to-work opportunities has been shown to help employees with cancer remain on the job.

Also worth looking into, if you haven’t already, is the National Business Group on Health’s cancer guide, An Employer’s Guide to Cancer Treatment and Prevention, which I blogged about back in November.

In that post, I suggest we’re only going to see cancer cases at work grow as baby boomers age and stay in the workplace. It’s … well … increasingly part of life. And getting older. Ask my dad.

As Helen Darling, retiring NBGH president and CEO, puts it in the November post:

Today, more than ever, employers are facing the growing impact of cancer … . With significant gains in cancer survival rates and most cancer survivors staying at work during their treatment or returning to work after their treatment, employers need a comprehensive benefits plan to ensure that their current strategies to address cancer in the workplace complement the needs of their employees. Cancer casts a wide net, affecting not only those diagnosed with the disease, but also family members, friends, managers and co-workers. The impact on a company’s culture can be profound.”

 

Will Employers Stop Offering Health Benefits?

Ezekiel Emanuel (an oncology doctor, professor of ethics at Penn and brother of Chicago mayor Rahm Emanuel) was one of the architects of the Affordable Care Act — which, as we all know, mandates that employers with at least 50 full-time-equivalent employees provide health insurance. So it’s a bit surprising to learn that Emanuel has just written a new book in which he predicts that, as a result of the ACA, most employers in the United States will have stopped offering health benefits to their employees by 2025.

Why will companies stop offering health benefits? Because, Emanuel argues in the book — Reinventing American Health Care: How the Affordable Care Act Will Improve Our Terribly Complex, Blatantly Unjust, Outrageously Expensive, Grossly Inefficient, Error Prone System (how’s that for a title?) — the online insurance exchanges will provide employers with a viable alternative for doing so. Now, after you’ve picked yourself up off the floor from laughing so hard at the idea of Healthcare.gov being described as a “viable alternative” (although many of its worst bugs appear to have been fixed), note that Emanuel does acknowledge the botched rollout of the federal online exchange and some of the state ones, yet he describes others (such as Connecticut’s state exchange) that are working well. If all of the exchanges are fixed to the point that consumers can obtain health insurance by spending only 30 minutes or so enrolling, he says, then companies will indeed have a viable alternative to the expense and administrative hassles of providing benefits and can instead simply give their employees money to go out and purchase benefits on their own. The ACA’s excise taxes on high-cost health plans scheduled for 2018 are yet another incentive to get out of the health-benefits game, says Emanuel.

Private exchanges, which are essentially a defined-contribution approach to health benefits, have certainly sparked a lot of interest among employers lately. As many as 33 percent of respondents said private health exchanges would be their preferred approach to managing health care in the next three to five years, up from 5 percent now, according to Aon Hewitt’s Health Care Survey of more than 1,230 employers covering in excess of 10 million employees (Aon happens to be one of the vendors that offers a private exchange; others include Towers Watson, Buck Consultants and many smaller vendors). Brian Poger, CEO of consulting firm Benefitter, said at the just-concluded Health & Benefits Leadership Conference in Las Vegas that for many employees — especially low-wage workers with families – the health coverage available on public exchanges might be a better deal than that provided by their employers, considering that many have cut back or eliminated coverage for spouses and families.

Jettisoning traditional health benefits has yet to become a major trend among U.S. employers: Accenture estimated that 1 million employees enrolled in private exchanges last year, a tiny percentage of the nation’s workforce (although it also estimated that number could grow to 40 million by 2018). There is also the risk that employees on private exchanges will “buy down” — that is, purchase less-costly plans that may ultimately leave them with less coverage and worse health outcomes than traditional health plans, which tend to have “marginal” price differences, Mike Thompson, healthcare practice leader at PwC, told me last year. Companies that switch to private exchanges may also risk breaking the linkage between benefits and wellness, he said.

The expression “paradigm shift” is an overused cliché, but it’s clear we’re in one now when it comes to health benefits. Rest assured we’ll continue to cover this area closely.

Lessons from a Trusted Source

Consumer Reports has been a trusted source of information for folks in the market for a new car, a toaster oven or a snowblower. So why not healthcare?

I could be mistaken, but as a long-time subscriber, I’ve been noticing an increasing number of healthcare-related articles in Consumer Reports as of late. Articles86507521 like “Six Last-Minute Health Insurance Buying Tips” and “Six Tips for The Last Month of 2014 Health Care Open Enrollment.” But as Tara Montgomery made quite clear in her March 18 keynote during HRE‘s Health & Benefits Leadership Conference at Caesars Palace in Las Vegas, CR‘s commitment to healthcare these days goes well beyond an article here or there.

In its very first issue, Montgomery pointed out, CR covered healthcare, with a story on Alka Seltzer and whether it lived up to all of its claims.

But it wasn’t until around 2003, she explained, that CR expanded its efforts in the healthcare arena. Then, five or six years ago, she said, CR really stepped up its efforts as quality data started to emerge.

Montgomery, who is senior director of health partnerships and impact at CR, walked attendees through the multitude of products CR offers, and the partnerships it’s engaged in, that are aimed at informing consumers and giving them tools for making better decisions. (HRE also recently interviewed Montgomery, if you’d like to read more.)

Leveraging the trust inherent in the CR brand, Montgomery said, “We want to teach consumers how they can become better shoppers for healthcare.”

Near the end of her presentation, Montgomery offered attendees some of the lessons CR has learned along the way, including:

  • How valued its brand is to employees. “There’s a lot to be said for using a trusted messenger in this alienating healthcare system,” she explained.
  • There are a lot of good, positive stories that can be told regarding health and well-being, and people who have taken responsibility for their health.
  • You have to “push” your messages, because people are not out there seeking this kind of information, just yet.
  • When you put the right tools at the point of decision-making, good things happen.
  • Personalize what you do.  “One size fits all is not very helpful,” she said. “Don’t talk to everyone at once, but segment your audience.”
  • Use entertainment and humor in your communications. The organization is able to take advantage of its team of journalists, who are talented storytellers—and that is much better than sending out official documents.
  • Put safety first, which almost always results in cost-savings, too.
  • Write your materials at the 7th grade level. CR‘s research has found that even consumers with a high literacy level are extremely comfortable with communications at that level and didn’t feel the material was dumbing down to them. (Also, don’t make it text heavy and use graphics.)
  • It’s OK to incorporate games, but make sure that they’re truly helpful and not just gimmicky.
  • Make sure your messages have cultural relevance. “Don’t just show generic individuals sitting in the doctor’s office,” she said.

A Better Wellness Experience

It was only halfway through the first day of HRE‘s Health & Benefits Leadership Conference in Las Vegas, but already the topic of wellness and the ever-elusive ROI had come up a few times.

160476428If you ask Sarah Lecuna, benefits program manager for Intuit, maker of the popular TurboTax program, her organization has yet to reap an ROI from its wellness efforts.  (I suspect the company isn’t alone in that respect.) But that hasn’t diminished the software maker’s commitment to building a culture of wellness.

Intuit’s journey, which was recounted at an afternoon session yesterday that was titled “Beyond ROI: Wellness and the Employee Experience at Intuit,” has very much been a journey of trial-and-error. Lecuna pointed out that the company offers a rich menu of wellness tools, including walking tracks, health fairs, fitness centers at some sites (with basketball and volleyball courts), and the ability to borrow a company bike for an unlimited period of time.

Senior management gave the green light to a companywide wellness program in April 2007, according to Lecuna. The program, she said, was announced to employees through an intensive communication campaign that included emails, posters and the like. At the time, employees were given a $100 incentive to answer a 15-minute questionnaire.

In ensuing years, she said, Intuit’s wellness efforts seemed to run into something of a brick wall. “People,” she recalled, “didn’t want to participate in the health questionnaire. People weren’t engaging in coaching. People weren’t changing behaviors.”

To address this challenge, Lecuna said, Intuit decided to use a health-risk assessment as a gatekeeper. “We said ‘Not only do you need to do the questionnaire, but if you want to cover your spouse or domestic partner, they will have to do the questionnaire too.’ ”

As a company, Lecuna explained, Intuit is all about creating “delightful experiences” for its customers. “But this wasn’t delightful at all. Everyone hated the experience.” The negative feedback was “endless,” she said.

In an effort to fix the problem, Lecuna said, the benefits team decided to hold a series of focus groups to listen to what employees had to say.

Taking employees’ feedback to heart, Intuit decided to stop using the HRA as a gatekeeper (putting it back into the Virgin Pulse program) and moved to an outcomes-based incentive program, which turned out to be much better received by employees, Lecuna said.

In communicating the change, she added, “Intuit took a top-down approach,” featuring a videotape of the Intuit’s CEO telling his own story about how a biometric screening was an eye-opening experience for him personally. (One more example of a C-suite leader taking the lead, the subject of HRE‘s March cover story.)

Obviously, the Intuit story is still being written. Today, Lecuna told attendees, HRA participation is just a fraction of what it used to be; but the use of biometric screenings has increased, with 82 percent of employees and 79 percent of spouses now participating.

No doubt many factors have contributed to Intuit’s success, but I have to believe somewhere near the top of the list has to be its ability to pay close attention to what its employees were thinking and saying. There’s no guarantee that it will someday result in the company achieving a notable return on its investment, but one thing’s for sure: It certainly doesn’t hurt.

A Walking Path to Greater Productivity?

By now, I’m sure most of you are familiar with them, even if you haven’t seen one of these strange-looking devices in a workplace setting yet.

Yes, I’m talking about workstation treadmills, which we first wrote in-depth about in 2009 when our managing editor, Kris Frasch, put one to the test at SHRM’s annual conference.

Of course, at the time, the vendors of these unique devices asserted that they would not only improve the health and well-being of your workforce, but would also go a long way to boosting productivity. But while that certainly seems intuitive enough, little, if any, evidence existed to back up that claim.

SteelcaseNow, those vendors (including Steelcase, whose Walkstation is featured here) can at least point to one study by researchers at the University of Minnesota, who recently found that these treadmills had a significantly favorable impact on both physical activity (burning off 7 percent or 8 percent of their calories per day) and work performance.  (To calculate productivity, they used employee and supervisor surveys that measured, using a 10-point scale, the levels and quality of performance, as well as the quality of interaction with co-workers.)

“For the duration of the study, productivity increased by close to a point,” says lead author Avner Ben-Ner, professor of work and organizations at the University of Minnesota’s Carlson School of Management. “That’s a substantial increase.”

Ben-Ner describes the findings as a win-win situation:

It’s a health-improving option that costs very little. I think there will be an increasing number of employers [that] will invest $1,000 or $2,000 in outfitting a persons’ workstation. The employer benefits from the employee being active and healthy and more smart because more blood is flowing to the brain.”

Ben-Ner predicts that millennials would be particularly open to this sort of thing “because they grew up and came of age in a time [when people were, and are, more familiar and versed in] these types of things. It will be easier than trying to break in someone who is 50 years old and a lifelong sedentary person and get them to start walking.” (I certainly can relate to that.)

At this point in their product lifecycle, I’m not sure what traction these treadmills are getting within corporations. Guess it might be worth asking about at HRE‘s Health & Benefits Leadership Conference the week after next in Las Vegas. In the meantime, I have to think research like this isn’t going to hurt.

Employees’ Share of Healthcare Costs Going Up

employees paying moreHealthcare costs for large U.S. employers rose at the smallest rate in 15 years last year (at 4.1 percent), and are expected to rise at 4.4 percent this year, according to a just-released survey from Towers Watson and the National Business Group on Health. The annual survey, based on responses from 595 large U.S. employers, also finds that while the vast majority remain committed to providing benefits to active employees, they expect to make moderate to significant changes to their plans in the next few years.

Employees are continuing to bear a greater share of healthcare costs, with the survey finding that employees now pay more than $100 more per month for healthcare compared to just three years ago. Employees’ share of premiums increased by nearly 7 percent to $2,975 this year, while the total share of costs borne by employees has climbed from 34.4 percent in 2011 to 37 percent in 2014.

Employees can expect to continue paying more for spousal and dependent coverage, with nearly half (49 percent) of employers having increased employee contributions for dependent tiers at higher rates than for individuals and another 19 percent expecting to make this move next year. Nearly one quarter (24 percent) of companies now use spousal surcharges of $100 per month when other coverage is available elsewhere to the spouse. Notably, only 56 percent of companies believe subsidized healthcare for spouses will be “very important” for 2015 and beyond — down from 70 percent who say it is very important today.

Before jumping on the “let’s dump spousal coverage” bandwagon, though, employers may want to consider an EBRI report last month that found doing this may not save companies money after all.

Medical Costs Continue to Plummet

health moneyTwo major new studies indicate that the rate of growth for health-plan costs is at near-historic lows, thanks in part to the effects of the Affordable Care Act and new strategies by employers to limit costs and encourage better price-awareness among employees.

Segal’s Health Plan Cost Trends Survey finds that projected cost trend data is now growing at the slowest rate in 14 years. Meanwhile, PwC’s Health Research Institute projects a medical cost trend for this year of 6.5 percent – even lower than in 2013, itself a year of slowing cost trends. Both studies attribute at least some of the trend to Obamacare, as well as the tepid economic recovery and employer initiatives. Here’s Ed Kaplan, Segal’s national health practice leader:

Although it remains to be seen if the deceleration of projected trend data is influenced by short-term economic forces, the influence of the Affordable Care Act, improved efforts around lifestyle changes such as weight loss and smoking cessation, early detection of disease, or some factor not yet identified, there continue to be changes in the system that could have long-term implications for healthcare costs.”

The Segal report notes that provider reimbursement arrangements are beginning to shift from fee-for-service to alternative payment models such as bundled payments, that participants are becoming more educated consumers and that costs are becoming more transparent.

PwC says the slow recovery and decreased personal wealth has reduced some of the demand for healthcare and has resulted in a “new normal” in healthcare spending patterns. It notes that individual consumers, who are bearing more responsibility than ever for their own healthcare costs, are questioning the need for and sometimes delaying procedures, imaging and elective services. Hospitals are working hard to hold down expensive readmissions (and thus avoid getting hit by the ACA’s penalties in that area) while employers are creating high-performance health networks for major procedures such as heart surgery and spinal fusion, in which employees travel to select providers for these specialized services. Companies expect these high-performance networks to save them money, even with travel costs factored in.

However, there’s no reason for complacency: Both reports note that other trends will exert upward pressure on health costs in the near future. These trends include ongoing consolidation among hospitals and clinics, PwC notes. The rate of consolidation among providers has increased by 50 percent since 2009, which can lead to price increases of up to 20 percent or more, according to the report. Expensive and complex biologic drugs may also push up costs, as more new drugs continue to be introduced to the market, says PwC. Segal’s Kaplan notes that although cost trends continue to decelerate, overall health plan costs are still on the rise. “Plan sponsors must be ready to implement new requirements introduced by the ACA, and will need to play an active role to continue to get the most for their benefit dollars.”