Employee Open Enrollment: 5 Tips to Avoid the Chaos

Employee Open EnrollmentEmployee open enrollment for 2018 benefit plans is consuming the days of health care brokers, employers and Human Resources’ staff. But it is possible to conduct benefit plan enrollment without mountains of errors and frustrated employees.

Here are five tips to avoid the chaos and streamline sign-ups for next year:

1. Create a Realistic Schedule for Employee Open Enrollment. 

Employee Open Enrollment

  • Your open enrollment period should end no later than 30 days prior to the end of your plan year or renewal date. Once you determine the ending date of open enrollment, back up from there to schedule open enrollment meetings, print forms or materials, distribute or mail open enrollment packets, etc.
  • Will your members need new ID cards? New ID cards are typically issued due to the addition of new provisions or services, plan option or deductible/copay changes, change in pharmacy vendor, etc.*
  • Are your plan options changing? This is especially important if you are adding or deleting a plan. Allow time for employee education. Even if your plan is not changing, employees still must carefully review their options to ensure their choices will meet their health needs.

2. Collect All Required Information for Each Plan Participant (employee or dependent).

This may include information for each plan participant such as:

  • Last Name, First Name and Middle Initial (exactly as provided in previous enrollments).
  • Social Security Number (unique and accurate identifying information for each dependent).
  • Address.
  • Date of Birth (unique and accurate identifying information for each dependent).
  • Gender.
  • Hire Date (if an employee).
  • Coverage Effective Date.
  • Product Coverage (Medical, Dental, Flex).
  • Date of Termination, if applicable, and Reason for Term
       (especially needed for COBRA).
  • E-mail address (to promote programs and services available through benefits plan).

Unique and accurate identifying information must be entered for each dependent. Using member information to represent a dependent will create errors/issues with enrollment.

3. Remind Employees: “Good Data In = Good Data Out.”

Employee Open Enrollment

  • Stress the importance of completing all fields on any enrollment or waiver forms. It’s in every plan participant’s best interest to review and verify new and existing data during open enrollment since it directly affects coverage for the upcoming plan year.
  • Decisions regarding participants’ eligibility and coverage under the health plan—as well as that of their dependents—are made based on the information provided during open enrollment.

4. Educate Employees about the “Not-So Flexible” Guidelines of Flexible Spending Accounts (FSAs).

  • Educate your employees on the advantages of FSAs.
  • FSAs are “use-it-or-lose-it” accounts. Contributions made to an FSA during a calendar year can be used only for eligible expenses incurred during the same year—unless your plan provides for either a grace period or a carryover.
  • If your plan doesn’t provide for a carryover, employees need to be aware that any money remaining in an FSA account after the claim filing period at the end of the year (and after the grace period, if applicable) is forfeited in accordance with IRS regulations.

5. If Your Employees Have Flex Debit Cards, Remind Them to Save All Receipts for Card Purchases.

Employee Open Enrollment

  • Since a flex debit card deducts payment for an eligible health care expense directly from an FSA account, employees may think that saving health care receipts is unnecessary.
  • Some claims for reimbursement, however, may require substantiation. Encourage employees to save all receipts for flex debit card purchases in case they receive a substantiation request or their tax return is audited by the IRS.
  • Employees should hold on to their cards even if the allocated FSA total has already been spent.**

*This information should be entered exactly as it was provided in previous enrollments. If you discover an error, now is the time to make those changes. 

**The only exceptions to this would be if an employee no longer contributes to an FSA or if FSA participants receive new debit cards for the next plan year.MedCost

Sign up for blogOur next blog will contain five more tips to avoid chaos during employee open enrollment. Subscribe to our blog to receive it automatically (go to top of page). 

Is Your Health Plan Affected by the Cadillac Tax?

One-Fourth of Employers Now Offering CDHPs to Avoid Tax

Employers continue to take action to avoid the looming excise or “Cadillac” tax on more expensive health insurance for their employees. This Affordable Care Act tax of 40% annually is currently set to take effect in 2020, but it is already having a major impact.

A 2015 Mercer study found that total health benefits cost averaged $11,635 per employee.[i] Cadillac taxThis average amount exceeds the Cadillac tax’s threshold of $10,200 for individuals, and would trigger the 40% tax on benefits above the threshold. And small employers are seeing higher increases in medical, dental and other health benefits than large employers.

Employers Turn to
Consumer Plans                                             

For the first time, 25% of covered employees are now enrolled in Consumer-Driven Health Plans (CDHP). Large employers of 20,000 or more employees have added CDHPs the fastest (73%). A projected 34% of employers with 50+ employees will be subject to the excise tax in 2020 if they make no changes to their current health plans.

 Cadillac tax

 

High-Deductible Health Plans (HDHP) are a type of Consumer-Driven Health Plans. Employers are saving an average of 18% with an HSA-eligible HDHP instead of a traditional Preferred Provider Organization (PPO) plan.[ii]

One key reason that employees are researching medical costs in advance for services such as maternity care, joint replacements and Emergency Room visits. A 2015 Consumer Health Insights’ survey showed that 22% always talked to others about costs or searched websites for information.[iii]

Employees who have a telemedicine option in their health plans can choose a more appropriate level of Cadillac taxcare for certain respiratory infections, fevers and nausea (see “Treatment Alternatives to the Emergency Room”). Choosing the right level of care reduces time away from work, boosting productivity. And employees save unnecessary dollars from their own pockets.

Some employers offer pricing transparency tools such as HealtheReports™ which compares costs for a complete procedure. Employees can review local facilities that offer mammograms, colonoscopies, X-rays and other services. HealtheReports also lists comments from members about their recommendations for health care organizations.

A New Era in Health Care

CDHP plans require a shift in thinking about medical spending. In traditional plans, employees are used to handing over their insurance card and paying a small copay.

PiggyBankIt can come as a jolt to employees to realize that CDHP coverage begins with paying expenses up to a higher deductible before insurance kicks in. For this reason, employers must proactively educate employees when introducing CDHP options.

Our next blog will detail key steps for employers to take in providing tools for smart decision-making. Employers who can manage staff expectations with a balanced understanding of the changing health care industry will build a productive partnership with your team.MedCost

 

[i] “With the Excise Tax in Their Sights, Employers Hold Health Benefits Cost Growth to 3.8% in 2015,” Mercer Global, November 19, 2015, http://www.mercer.com/newsroom/national-survey-of-employer-sponsored-health-plans-2015.html (accessed August 8, 2016)

[ii] Ibid.

[iii] “Debunking Common Myths about Healthcare Consumerism,” McKinsey & Company, December 2015, http://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/debunking-common-myths-about-healthcare-consumerism (accessed August 11, 2016)

The Employer Benefit First Offered by NASA

The first place this employer benefit was offered wasn’t even on planet Earth.telemedicine employers

The idea to assess human health from afar started with NASA in the early 1960’s. Both American and Russian doctors were concerned that astronauts might lose circulation and other functions in space. The first telemedicine was practiced on animals attached to medical monitors while orbiting Earth.

TV viewers became familiar with live updates on astronauts’ heart rates, breathing and temperature during space flights. And the technology has translated right into employer benefit plans for medical care for onsite and offsite workers.

Over 15 million Americans obtained medical care remotely in 2015,[i] and the American Telemedicine Association anticipates 30% growth in 2016. Employers have picked up on the cost savings and convenience—nearly 75% of large employers plan to offer telemedicine as a health plan benefit in states that regulate this method, up from 48% in 2015.[ii]

telemedicine employers

Why Telemedicine?

Employers are searching for ways to contain the spiraling costs of health care. The ability for employees to make a call or have a video conference with a board-certified doctor within minutes brings both convenience and less time away from work. A recent analysis by Willis Towers Watch estimated that as much as $6 billion per year could be saved by U. S. companies using telemedicine.[iii]

Where the Savings Come From

Employers are seeing the need to educate employees about the best medical options for every health need. Some fevers, headaches, sore throats and other minor symptoms are appropriate for a telemed call (see “Treatment Alternatives to the Emergency Room”). Average cost: $45.

Compare the cost of a telemed call with an average primary care doctor visit: $145. Or the average cost of an ER visit: $1,316. [iv] Your employees with commutes to work may have to travel longer distances for in-person visits—time also lost in productivity. And many employees allow conditions to worsen before seeking treatment, resulting in even higher expense and time away from work.

“Over 400 million visits a year are appropriate
for telehealth.”

 – Jason Gorevic, Teladoc CEO, NJTV News

Managing Costs in a Complex Environment

As responsibility for paying health bills shifts to the employee, 24/7 services such as Teladoc becometelemedicine employers an increasingly attractive option for appropriate levels of medical care. A board-certified doctor is always available with a cell phone callback, even if an employee is on vacation or lives in a rural area where medical access is more limited.

MedCost clients who use Teladoc have already saved hundreds of thousands of dollars in 2016, avoiding more expensive treatment centers and lost hours at work.

Looming in employers’ minds is the Affordable Care Act’s Cadillac tax, now postponed until 2020. This 40% excise tax would trigger when an employer offers health benefits above $10,200 for an individual and $27,500 for a family.

Employers have already begun to raise employee deductibles and out-of-pocket costs, not included in the value of a health policy.

Summary

Some large employers such as JetBlue Airways are installing telemed kiosks at their workplaces, harnessing technology innovations for immediate care.[v] The Department of Veteran Affairs provided telemedicine employerstelemed services to more than 675,000 veterans in fiscal 2015. Employees who are used to searching for restaurants and shopping deals on cell phones will increasingly call a doctor to get routine medical care.

And it won’t even require a trip to outer space to get it.

 

[i] Melinda Beck, “How Telemedicine Is Transforming Health Care, Wall Street Journal, June 27, 2016, http://www.wsj.com/articles/how-telemedicine-is-transforming-health-care-1466993402 (accessed July 14, 2016)

[ii] National Business Group on Health, “Health Care Benefits Cost Increases to Hold Steady in 2016,” August 12, 2015, https://www.businessgrouphealth.org/pressroom/pressRelease.cfm?ID=263 (accessed July 18, 2016)

[iii] Willis Towers Watson, “Current Telemedicine Technology Could Mean Big Savings,” August 11, 2014, https://www.towerswatson.com/en-US/Press/2014/08/current-telemedicine-technology-could-mean-big-savings (accessed July 15, 2016)

[iv] Sabrina Rodak, “Study: 71% of ED Visits Unnecessary, Avoidable,” Becker’s Hospital Review, April 25, 2013, http://www.beckershospitalreview.com/capacity-management/study-71-of-ed-visits-unnecessary-avoidable.html (accessed February 23, 2016)

[v] Phil Galewitz, “Kaiser: Your Doctor Will See You Now,” June 20, 2016, http://www.usatoday.com/story/news/2016/06/18/kaiser-how-far-telemedicine-has-come/86084092/ (accessed July 18, 2016)

Centers for Medicare & Medicaid Launches Employer Verification Study

By Michael Berwanger, JD, Director, Quality Management & Compliance

From April 2016 through June 2016, CMS will be contacting some employers, either by phone or letter, to request information about the Employer-Sponsored Coverage (ESC) offered to employees for the 2016 plan year.Employer health benefits, health care, employee claims

The purpose of this verification study is to evaluate whether an employee, or a sample of employees, receiving a premium subsidy for an exchange product correctly attested that he or she was not offered ESC that met affordability and minimum value requirements for plan year 2016.

While CMS has not articulated how large the sample size for the verification study will be, it is possible that some MedCost clients may be contacted. Employers will be asked to provide information regarding the lowest-cost self-only health plan that they offered for plan year 2016, as well as their employees’ eligibility for employer-sponsored coverage. If contacted by phone, calls are expected to last 10-15 minutes. Click here to view a sample of the 2016 Employer Notice letter you may receive.

CMS, employer verification studyThe study is taking place as part of efforts by HHS to meet certain “verification” requirements related to its administration of the ACA exchanges. The study is designed to help ensure that only individuals who do not otherwise have access to an “affordable/minimum value” plan outside the exchange receive subsidized coverage on the exchanges. Participation by employers in this study is voluntary.

For more detailed information regarding the Employer Verification Study, click here.

EEOC Issues Final Employer Wellness Rules

By Michael Berwanger, JD, Director, Quality Management & Compliance

ThEEOC, employer wellness program, wellness program, ACA, GINAe U.S. Equal Employment Opportunity Commission (EEOC) issued final rules yesterday that describe how Title I of the Americans with Disabilities Act (ADA) and Title II of the Genetic Information Nondiscrimination Act (GINA) apply to wellness programs offered by employers that request health information from employees and their spouses. The two rules provide guidance to both employers and employees about how workplace wellness programs can comply with the ADA and GINA consistent with provisions governing wellness programs in the Health Insurance Portability and Accountability Act, as amended by the Affordable Care Act. The final rules, largely consistent with the proposed rules from last year, go into effect January 1, 2017.

The rules permit wellness programs to operate to improve employee health, while including protections for employees against discrimination. As stated in the EEOC press release:

Both rules seek to ensure wellness programs actually promote good health and are not just used to collect or sell sensitive medical information about employees and family members or to impermissibly shift health insurance costs to them. The rules permit wellness programs to operate consistent with their stated purpose of improving employee health, while including protections for employees against discrimination.

In addition to publishing the final ADA and GINA rules in the Federal Register, the EEOC has published question-and-answer documents on both rules today, available at ADA Q&A  and GINA Q&A.

The EEOC also has published two fact sheet documents for small businesses—an ADA Small Business Fact Sheet and a GINA Small Business Fact Sheet. For more on the press release, please see https://www.eeoc.gov/eeoc/newsroom/release/5-16-16.cfm

 

IRS Announces 2017 HSA Contribution Limits

By Michael Berwanger, JD, Director, Quality Management & Compliance

The IRS has released the 2017 cost-of-living adjusted limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs). The only change from 2016 is a $50 increase in the annual HSA contribution limit for individuals with self-only HDHP coverage. All of the other amounts are unchanged from 2016.

HSA, HSAs, HDHP, HDHPs, 2017 contributions

 

For guidance on HSAs, please review the IRS frequently asked questions page at https://www.irs.gov/publications/p969/ar02.html or contact Jason at jclarke@medcost.com.

 

*Rev. Proc. 2016-28 (Apr. 28, 2016), available at https://www.irs.gov/pub/irs-drop/rp-16-28.pdf
**Rev. Proc. 2015-30 (May 5, 2015), available at https://www.irs.gov/irb/2015-20_IRB/ar07.html

 

Telemedicine: Doctor on Call

TelemedicineLooking for a way to save on health care? It might be as close as your cell phone.

Which medical facility do you choose when you have the flu? A sprained ankle? Headaches? Your health plan may now include telemedicine—video or phone conferences with a board-certified doctor, within minutes of a call. You may be able to save the costs of Emergency Room (ER) or Urgent Care visits for a wide variety of common ailments(see “Treatment Alternatives” below). 

A Truven Health Analytics’ study reported that 71% of ER visits are unnecessary.[i]  Urgent care facilities now treat a number of minor illnesses and ailments. And the rapidly growing use of telemedicine means that even remote rural areas can get expert consultations with board-certified physicians.

Compare these costs from the study:

 Average ER Visit Average Primary Care Doctor Visit Average Telemed Consultation*

 $1,316

$145

$40-$50

*Consult your summary plan description for complete coverage details

Need a better prescription for your health care expenses? The expert care of local physicians may be available with a phone call, no matter where you are.

TREATMENT ALTERNATIVES TO THE EMERGENCY ROOM

Telemedicine

[i] Sabrina Rodak, “Study: 71% of ED Visits Unnecessary, Avoidable,” Becker’s Hospital Review, April 25, 2013, http://www.beckershospitalreview.com/capacity-management/study-71-of-ed-visits-unnecessary-avoidable.html (accessed February 23, 2016)

 

2015 MedCost Care Management Outcomes (Infographic)

save health care plans, cut costs, health insurance

What Is Self-Funding?


More Employers Are Choosing This Method for Health Benefits

Self-funding is a method of funding whereby an employer assumes financial responsibility to provide benefits to their employees. Self-funding provides many advantages:

  • Customized plan choices
  • Expedited cash flow
  • Lower premiums for certain employee groups
  • Exempt from federal or state fees
  • Exempt from certain state insurance premium taxes (1%–2.5% of premiums paid)*

Employers who self-fund their employee health care also purchase stop loss insurance, which caps liability at a selected level. In the event of cancer, premature births or even a widespread flu epidemic, liability will stop at the amount that each employer has predetermined (download free white paper: http://bit.ly/1N6WEGW).

The MedCost underwriting team recommends stop loss policies that provide consistency between the policy and the employer’s Summary Plan Description (SPD). This consistency is vital to ensure that there are no gaps in coverage.

Self-Funded vs Fully Insured Health PlansMedCost works extensively with consultants and employers to strategically design plans that control both known and unknown costs. Effectively managing health care dollars, especially during long-term employee claims, can be a source of significant savings for employers.

 

*2013 Employer Health Benefits Survey, Kaiser Family Foundation, August 20, 2013, http://kff.org/report-section/ehbs-2013-section-10/

 

2017 Presidential Budget Proposes Cadillac Tax Revisions

Cadillac Tax

The President’s 2017 federal budget proposal released February 9 includes a second round of revisions to the unpopular “Cadillac” tax on expensive private health insurance. The $4.1 trillion spending plan would raise the tax threshold to the level of the Affordable Care Act’s gold premium, where any state’s individual health insurance marketplace exceeds the Cadillac tax threshold.

The President approved a two-year delay on the 40% tax when he signed the 2016 spending bill on December 18. The tax is currently set to take effect in 2020; and is projected to raise $87 billion a year for ACA expenses.

Business groups and labor unions continue to call for the tax’s total repeal. The 2017 fiscal plan is expected to face stiff partisan opposition in Congress.