HHS has proposed a new rule that would make it easier for employers to help their workers cover medical expenses by using health reimbursement accounts (HRAs).
The proposal would allow employers to subsidize employees who buy their own health insurance either on or off the Affordable Care Act marketplaces. Employers who cover their workers — and that’s been more stable than many expected under the ACA — could give employees up to $1,800 a year (indexed to inflation) to finance HRAs, which are tax-advantaged accounts. That would go toward out-of-pocket costs. Continue reading
Remember all those stories about people being shifted into part-time work so their employers don’t have to provide health insurance?
According to a new Urban Institute report, funded by the Robert Wood Johnson Foundation, it hasn’t happened.
If, and when, the employer mandate fully kicks in (more on that below) things could change. But the anecdotes we’ve heard about employers cutting hours because of the Affordable Care Act are just that – scattered anecdotes. (And when it does occur, it might be a result of other business conditions, not the health law). Under the ACA the definition of “full-time” work is 30 hours; anyone working 30 hours a week or more would have to be covered. The fear was that employers would cut them to, say, 28 or 29 hours, to avoid that obligation. Continue reading
A new report from Milliman, the actuarial firm, shows employers’ health care costs rose only 5.4 percent since last year. The report also showed how employers are changing their employee benefit plans to control costs.
Here are a few highlights from the 2014 Milliman Medical Index (MMI) report:
- The 5.4 percent rate of growth from last year to this year was the lowest annual change since Milliman produced its first MMI in 2002 and is down from 6.3 percent last year. The 5.4 percent is still higher than the rate of growth in the consumer price index (CPI). Continue reading
For years, employers have been seeking to control the rising cost of employee health insurance. Now they have a new way to limit health care spending: the public and private health insurance exchanges.
The exchanges allow employers to shift from defined benefit plans to defined-contribution plans. In defined benefit plans, employers enroll their workers, family members, and retirees in health plans and offer other benefits such as dental and vision care. In defined-contribution plans, employers give employees and retirees a fixed sum that employees can spend on benefits options in the exchanges.
In USA Today, Jayne O’Donnell reported the link between the number of employers shifting to the exchanges and the move to defined-contribution plans. She quoted Wendell Potter, a freelance analyst for the Center for Public Integrity and former PR executive with Cigna, saying: “This is an irreversible trend from defined-benefit to defined-contribution employer-based health coverage. It is comparable to the move several years ago from pensions to 401(k)s.” Tom Murphy at The Associated Press also covered this trend.
The move to defined-contribution plans may make it difficult for health care journalists to track employers’ health insurance spending strategies in the coming years because employers likely will be reluctant to report how much they allot to each worker and retiree. Continue reading
Almost every day there is news about the strategies employers are using as they prepare for the Affordable Care Act. Wednesday was a good example. The National Business Group on Health (NBGH) reported that health care costs for its members – large employers – would rise by 7 percent next year, as Helen Adamopoulos wrote at Becker’s Hospital Review. That means 2014 will be the third straight year of 7 percent increases, said NBGH president and chief executive officer Helen Darling.
Just as the Kaiser Family Foundation/Health Research & Educational Trust survey showed last week, the NBGH results demonstrate that employers are shifting more responsibility and costs to workers and families.
Jerry Geisel at Business Insurance via Modern Healthcare pointed out that 22 percent of employers responding to the NBGH survey said they will offer only a consumer-directed health plan (CDHP) next year. “More large employers are reducing the type of health care plans they offer as they try to keep better control of their costs, according to a survey released Wednesday,” he wrote.
In an article for Kaiser Health News, Jay Hancock led with the fact that NBGH’s large employer members are considering moving retirees and part-time workers into health insurance exchanges created under the Affordable Care Act. Continue reading
Here’s a trend to watch: More employers are using both financial incentives (the carrot) and penalties (the stick) in wellness programs. A number of publications have covered the issue of employers using penalties, perhaps because the penalties are a relatively new development.
For many years, employers have used incentive payments and other inducements to encourage workers to participate in wellness programs. But a rising number of employers are using financial penalties to encourage participation.
In July, Pennsylvania State University told its employees and their spouses that they would face a $100 monthly surcharge unless they completed a biometric screening and an online wellness profile and certified that they have had or will have a physical exam. Penn State added that it would not have access to the health screening results.
Dena Bunis, managing editor at CQ HealthBeat, covered this story and reports (via the Commonwealth Fund) that as part of the biometric testing, employees and spouses have to get blood pressure and fasting blood tests and height and weight measurements. In emails, faculty and staff have raised questions about why the university decided to encourage participation with a penalty rather than a financial incentive, Bunis wrote. Continue reading