More Companies Try To Lure Workers With Benefits

More companies try to lure workers with benefits

Over a year of rapid wage growth has U.S. companies turning to enhanced benefits to attract and retain workers.

Mentions of employee benefits in job postings on ZipRecruiter soared to the highest rates on record, according to an analysis by the jobs site. A greater share of positions offered benefits like health insurance, paid time off and paid parental leave than in prior years.

One in four jobs now offer retirement benefits, and a growing number are offering student loan repayment and tuition assistance.

“Customers tell ZipRecruiter that they are trying to end out-of-cycle wage increases and cap the size of regular increases to keep costs under control,” said Julia Pollak, chief economist at the jobs website. Against a backdrop of low unemployment and high employee turnover, “many are therefore expanding their benefits offerings.”

Despite some recent cooling in the labor market, many companies are still struggling to fill positions and limit attrition given the enduring mismatch between the supply and demand for workers.

While businesses have been raising wages quite aggressively to do that, it’s unclear how much pricing power firms will have in the months ahead if the economy continues to lose momentum.

Government data also point to a recent increase in benefit offerings. The employment cost index, a broad measure of labor costs, accelerated in the first three months of the year in part due to a pickup in benefits. Benefit costs at companies in the three months ended in March rose 1.1% from the prior quarter, an acceleration from the prior period.

GETTING CREATIVE

Wells Fargo & Co. economist Shannon Seery said she’s been hearing in client conversations that firms are “trying to get creative” to avoid hiking wages at the pace they have been.

Even with labor demand slowing, there’s still a shortage of workers, and “providing better benefits may be a solution firms explore,” she said.

Pollak specifically flagged the challenges of recruiting and retaining talent for in-person roles in hospitality, manufacturing, and tourism ahead of the summer season.

Cooling wage pressures would certainly be welcomed by Fed officials, particularly Chair Jerome Powell, who has voiced concerns about their inflationary impact. Benefits, however, still come at a cost for firms  — even if it’s smaller than wages.

While the Fed is likely more focused on wages, especially in the near-term, “the benefits angle does have weight and is important — particularly if we see that get sticky even as wages starts to decline,” Seery said.

As COVID-19 Recedes, Payers Face Changed Coverage Landscape

Coronavirus Will Change the World Permanently. Here's How. - POLITICO

There will never be a return to a pre-pandemic normal in terms of what health insurers, self-insured employers and other payers must cover, but they will in some ways be less burdened as COVID-19 recedes, according to Jeff Levin-Scherz, M.D., the population health leader for health and benefits in North America at Willis Towers Watson.

He told Fierce Healthcare that telehealth won’t have the same reach as it did during the pandemic because individuals using the technology will have to interact with a provider in the same state. In addition, the mental health landscape has changed radically, with the prevalence of major symptoms of anxiety or depression tripling since 2019, according to WTW.

 
 

Levin-Scherz noted that the telehealth tracking company Fair Health says half of the telehealth interactions going on presently in the country involve mental health or substance use disorders.

“I think there are a couple of reasons for that,” said Levin-Scherz. “One is there’s an enormous shortage of mental health providers. Another is that the needs have just skyrocketed. Also, in many instances, people with mental health issues would prefer not to see somebody in person. There are good reasons why we’re seeing mental health delivered via virtual care.”

One coverage mandate that Levin-Scherz said he’s glad will stay in place allows providers to prescribe opioid use disorder medications such as suboxone until November 2024 for individuals already utilizing telemedicine for that purpose and until November of this year for those who aren’t.

 

“That, at least for the moment, is not changing,” said Levin-Scherz.

Employers and health plans do not have to cover COVID-19 home tests, which is in keeping with payers not having to pay for any over-the-counter tests or medications.

“If people go get a lab test, they pay for it,” said Levin-Scherz. “If people get a home pregnancy test, it is not covered by insurance. And so, the tests are going to be more like a pregnancy test. You don’t expect your insurance to cover it. The cost of home COVID test in the U.K. is between $1 and $2 whereas here it’s $12. When these over-the-counter tests are no longer covered, we’ll probably see the cost go down.”

COVID-19 vaccinations must still be covered without charge by employer-sponsored health insurance, said Levin-Scherz. But most employers outside of healthcare have already discontinued the vaccine mandates.

That’s because vaccination a year or more ago provides little protection against bringing COVID-19 to the workplace now.

“It also takes a lot of work to track it,” Levin-Scherz said. “Most employers will remove their COVID vaccine mandates, and I think that that’s probably a good idea.”

Employers will no longer be required to waive cost sharing on COVID-19 medications such as Paxlovid. The federal government continues to supply the medication now, so employer-sponsored health insurance is only responsible for administration fees, although the employer plans will also have to start paying for the drug itself when the federal supply runs out, according to WTW.

Many employers made improvements in their offices to mitigate the spread of COVID-19 and other respiratory illnesses. For instance, they improved airflow, and they may have to make even more improvements. Last Friday, the Centers for Disease Control and Prevention upgraded guidelines on airflow, saying that air ventilation should produce five air changes an hour.

And, though the agency has encouraged better airflow in the past, this is the first time it’s ever set a goal.

“I think that this is a really good first step,” said Levin-Scherz. “It turns out that clean indoor air doesn’t just prevent COVID transmission, but influenza transmission and also prevents RSV transmission. Also, there’s evidence that people actually are more productive and more able to get their job done when there are more air exchanges and the air is cleaner.”

Million Dollar Claims Increasing Among Employer Plans

Multi-million dollar claims continue to rise | BenefitsPRO

Million dollar claims per million covered employees rose 15% in the past year and 45% over the past four years, according to a new report from Sun Life. And one-fifth of employers had at least one member with more than $1 million in claims from 2018 through 2021.

For self-funded employers, average cost is a good starting point to plan for risk management because it’s reflective of the costs that will likely be seen for a stop-loss claim related to a condition, the report found. But an employer could see a wide range of costs given the comorbidities that might exist, or the complications that could occur.

Stop-loss is a form of excess risk coverage that provides protection for the employer against a high claim on any one individual.

Even conditions with a low average cost, such as behavioral health and orthopedic issues, can reach over $1 million. For instance, in 2022, orthopedics had an average cost of $90,000, but one severe case uncovered in the data reached more than $4.5 million.

WHAT’S THE IMPACT

Among other insights, the report also found that 71% of all stop-loss claims came from the top 10 conditions unearthed by the data: malignant neoplasm, leukemia, lymphoma, multiple myeloma, cardiovascular disease, orthopedics, newborn and infant care, respiratory, sepsis, neurological, gastrointestinal, and urinary conditions.

While cancer continues to be the largest driver of high-cost claims, cardiovascular disease rose one spot to the number two claim condition in 2022, with $142.4 million in reimbursements over about 2,300 members. In the top spot once more was malignant neoplasm,with $324.8 million in reimbursements.

Rounding out the top three is leukemia, lymphoma and multiple myeloma. Combined with malignant neoplasm, these two cancer categories made up 29% of total claim reimbursements over the past four years, including both medical and drug spend. More than a third of total claim reimbursements can be attributed to the top three conditions.

COVID-19, which appeared on the list for the first time in 2020, fell from number eight in 2021 to number 11 last year, though authors noted it continues to impact other medical conditions.

About 11% of employers experienced a birth-related stop-loss claim in the four-year benefit period from 2018 through 2021, data showed. Newborn/infant care ranks at number five this year, consistent with its previous ranking in the top 5 last year, and has one of the highest average costs at almost $328,000.

Looking at drugs, 11 of the top 20 high-cost injectable drugs are related to the treatment of cancer. Rylaze, the cancer drug with the highest average cost(over $808,000), is new to the top 20 injectable drugs in 2022.

THE LARGER TREND

Employers of all sizes are looking to bolster their health benefit options in 2023 with an eye toward improving recruitment and retention, and will focus on affordability and access, according to a July Mercer survey.

More than two-thirds of the 700 respondents said they are looking to enhance their health and benefit offerings this year. In all, 61% of participating U.S. employers are conducting surveys on employee benefit preferences.

Meanwhile, average costs for U.S. employers that pay for their employees’ healthcare will increase 6.5% to more than $13,800 per employee in 2023, largely due to economic inflation pressures, professional services firm Aon said in August.

This projection is more than double the 3% increase to healthcare budgets that employers experienced from 2021 to 2022. But it’s significantly below the 9.1% inflation figure reported through the Consumer Price Index.

On average, the budgeted healthcare costs for clients are $13,020 per employee in 2022. The analysis uses the firm’s Health Value Initiative database, which captures information for nearly 700 U.S. employers representing about 5.6 million employees.

Medicaid Unwinding And The Impact On Group And Individual Health Insurance Markets

10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment  Provision | KFF

The Families First Coronavirus Response Act (FFCRA), signed into law in March 2020, created the first major lifeline for Americans during the onset of the COVID-19 pandemic. It particularly addressed the immediate needs of working Americans who had suddenly lost their paychecks and/or their jobs – and their subsequent eligibilities for health insurance. Now that the pandemic has reached its end (although COVID-19 remains a health issue), some of the changes created by FFCRA are expiring – especially for those covered by federal and state Medicaid programs.

Under the FFCRA, states were enticed to expand their Medicaid programs, to ensure continuous enrollment of Medicaid enrollees throughout the COVID-19 National Emergency. Throughout the pandemic, Medicaid beneficiaries have remained enrolled in the program regardless of changes in income or status.

Medicaid is a federally facilitated, state-administered, jointly funded health care program for low-income American families, adults, children, pregnant women, elderly adults, and people with disabilities. While each state’s Medicaid program varies, Medicaid generally provides zero- or low-cost coverage to beneficiaries based on their household income.

In both California and Nevada (and most other states), residents are eligible for Medicaid if they have household incomes of up to 138% of the Federal Poverty Level (FPL). Although ineligible for Medicaid, earners with incomes between 138-400% of FPL are eligible for subsidies called Premium Tax Credits (PTCs), to help them pay the cost of Individual coverage purchased on a state exchange (such as Covered California, Nevada Health Link, etc.).

California’s Medicaid program is called “Medi-Cal,” and it covers nearly one-third of the state’s population. California’s Medi-Cal program increased its enrollment by 16% during the pandemic.

Nevada’s program is called “Nevada Medicaid,” and it also covers roughly one-third of its state population. Nevada Medicaid increased its enrollment by 40% during the pandemic.

Because of the impacts of the pandemic, many people became newly eligible for Medicaid. Due to the “continuous enrollment provision” and other COVID factors, enrollment in the program boomed. Between March 2020 and December 2022, Medicaid experienced a nationwide enrollment increase of 21.1 million Americans, bringing the total number of enrollees to approximately 92.3 million.

The Consolidated Appropriations Act of 2023 declared an official end to Medicaid’s “continuous enrollment provision,” and assigned it a sunset date of March 31, 2023. Beginning April 1, 2023, states could begin to “unwind” their more than three-year COVID protocol and resume Medicaid eligibility determinations – and subsequent disenrollments. The Kaiser Family Foundation reports estimates 5-14 million Americans will have coverage disrupted or eliminated entirely because of Medicaid “unwinding.”

California began its reevaluation of Medi-Cal beneficiaries’ eligibilities in April 2023. Redeterminations are being processed monthly, beginning with people who enrolled in Medi-Cal in the month of June (of any year). June enrollees will have from the beginning of April through the end of June (approx. three calendar months) to recertify. Those who no longer qualify for coverage will be disenrolled from Medi-Cal effective July 1, 2023. California will continue these recertifications on an ongoing, monthly basis until May 2024.

California law requires the state to enroll all Medicaid disenrollees in the lowest-cost silver-tier Individual & Family Plan (IFP) available to that person on Covered California – or the individual’s same managed care plan (if it is available). To qualify, the applicant must also qualify for PTC subsidies to help pay for some, or all, of the silver plan’s premium. Furthermore, enrollees can elect any IFP coverage available to them within Covered California – including bronze, silver, gold, and platinum tier plans.

Disenrollment from Medicaid also triggers a qualifying event that establishes a Special Enrollment Period (SEP). Employees who waived job-based coverage because of ongoing Medicaid enrollment can utilize the SEP to enroll in their group health plans outside of Open Enrollment.

Federal law establishes a 60-day timeframe for SEPs, beginning on the day of the qualifying event. Those who find themselves ineligible for Medicaid (and subsequently disenrolled) with access to alternate group coverage – including for a spouse’s or parent’s plan – will be impacted.

Nevada Medicaid resumed normal operations on April 1, 2023. Nevada Medicaid enrollees will receive a renewal notice prior to the end of their certification sometime over the next 12 months. Like California, recertification will also occur according to the Medicaid enrollee’s renewal month. They will be processed on an ongoing, monthly basis – beginning with June enrollees. For example, a person with a renewal month in June will receive a renewal notice in April. Clients found ineligible in Nevada will lose their coverage effective June 1, 2023. SEPs will also be available for Nevadans who lose eligibility for Medicaid during the recertification process, to enroll in either an IFP or group health plan within 60 days of the coverage loss.

Those who do not respond to attempts for recertification will be disenrolled but may be eligible to enroll again – if eligibility is proven later, a Medicaid process called “churning.” The industry forecasts minorities and non-English speaking residents will be impacted the most by churning, because of address changes and/or the inability to understand the recertification procedure.

Any person covered by Medi-Cal/Medicaid should anticipate recertification and respond to notices in a timely manner. When switching from Medi-Cal/Medicaid to IFP or group insurance, consumers should be cognizant of provider networks, premiums, and cost-sharing within the health plan.

Also note that each state administers its own Medicaid program, so each state’s approach to Medicaid unwinding and recertification will be at least somewhat different; with some variances between states more drastic than others.

Group insurance brokers should educate their clients on these Medicaid unwinding principles, so they can anticipate a potential increase in enrollment and support requests for their group health plans. Furthermore, employers and their employees should be reminded that an offer of “affordable” coverage from an employer (of any size) disqualifies that employee – and potentially the employee’s entire family – from PTC eligibility on a state exchange.

An offer of coverage is considered “affordable” for the employee if the employee’s contribution for the lowest-cost, self-only premium (for a plan that provides minimum value) does not exceed 9.12% of the employee’s pay in 2023. Family coverage is considered affordable if the employee’s contribution for the entire family’s premium, based on the lowest-cost plan, does not exceed 9.12% of household income – which comes from ACA’s “Family Glitch” fix in 2022.

Last Updated 05/24/2023

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