Group Calls on Congress to Reform Mental Health Care

The National Alliance on Mental Illness (NAMI) is calling on the Senate to vote on S. 2680, the Mental Health Reform Act of 2016. The bill, which was was introduced by Senators Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), is on the Senate calendar, awaiting action. The group presented petitions with 200,000 signatures at a Senate Summit on Mental Health. The bill would do the following:

  • Require audits of health plans that have five or more parity violations and reports to Congress on the result of completed federal parity investigations.
  • Require additional federal guidance to help plans comply with the parity law.
  • Require a federal action plan to enhance parity enforcement and a GAO parity study.
  • Authorize suicide prevention programs.
  • Address shortages in the mental health workforce.
  • Invest in early intervention programs.
  • Promote integration of primary and mental health care.
  • Strengthen community crisis response systems.

NAMI Chief Executive Officer Mary Giliberti said, “We are showing that Americans all across the country are raising their voices and calling for urgent congressional action to begin to address America’s broken mental health system. Too often, calls for national action following tragic events fall to the back burner as urgency fades. Yet, every day, hundreds of thousands of people [who are] affected by mental illness struggle because they do not have the services and support needed to help them recover and live productive lives.”

Study Reveals Leading Healthcare Benefit Trends

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The Healthcare Treds Institute issued a massive survey of employee benefit trends. The good news is that employers are looking to insurance brokers and benefit consultants to help them evaluate health benefit designs and distribution models. Forty percent of employers say they will depend on insurance brokers to learn about new health benefit models, such as defined contribution plans and private exchanges, and 31% will depend on benefit consultants. Nearly 40% rely on insurance brokers to learn about health benefit designs and platforms.

“The ACA has created a dynamic marketplace in which brokers have a front row seat navigating in this new era,” according to the study. Human resource professionals have new responsibilities due to the ACA. Thirty percent are looking for help from benefit consultants. However, 30% are researching independently compared to 26% in the previous year. Employers gave the following answers to this question, “What partners would you depend on to help you learn about new health benefit designs and distribution models?”

  • Insurance broker 39.7%
  • Will research independently 30.8%
  • Benefit consultant 30.8%
  • Insurance carrier 24.4%
  • TPA 19.2%
  • None 15.4%
  • Trade Association 11.5%
  • Payroll company 10.3%
  • Other 5.1%

What Benefits Employers Are Offering

About 40% of employers offer three or more health plan options, which are usually a PPO, an HDHP, and an HMO. Employees are choosing HDHPs (39%) over HMOs (35%). The following is a breakdown of benefits that employers offer:

  • PPO 59.5%
  • Flexible spending account (FSA)59.5%
  • Health savings account (HSA) 52.1%
  • High deductible health plan (HDHP) 38.8%
  • HMO 34.7%
  • Self-insured plan 22.3%
  • Health-reimbursement arrangement (HRA) 15.7%
  • Catastrophic insurance 8.3%
  • Dental plan 73.6%
  • Vision plan 67.8%
  • Prescription drug coverage 67.8%
  • Mental health coverage 52.1%

How Healthcare Reform Has Affected Employee Benefit Packages

Forty-nine percent say that healthcare reform will increase employee cost-sharing; 39.6% say it will increase premium contributions, and 3.6% say it will shift their company towards a defined contribution plan. Employee cost-sharing has risen every year for 10 years. Employers and the medical industry have had to deal with other ACA implications, such as the employer mandate and new compliance, which has caused an increase in capital and human resources. Employers have done the following in response to health reform:

  • Increased employee cost sharing 49%
  • Has had no effect 30%
  • Enhanced wellness/preventive health programs 23%
  • Increased employee engagement in their health 19%
  • Increased employee engagement in reducing healthcare costs 18%
  • Adopted new wellness/preventive health programs 17%
  • Reduced covered benefits 15%
  • Added HDHPs/CDHPs 14%
  • Stopped offering healthcare benefits 9%
  • Shifted to a defined-contribution plan

The Cadillac Tax

The impending 2018 Cadillac Tax is a prevalent challenge for employers. The ACA 40% excise tax will be imposed on the portion of group health plan premiums that exceed specified thresholds. The concern may be more regional since it could be triggered in parts of the country where healthcare costs are high and less likely to be triggered in parts of the U.S. with below average healthcare costs. Thirty-five percent of employers are very concerned about the 2018 Cadillac Tax; 25% are somewhat concerned; and 30% are not concerned. Sixty-one percent are making no changes to their benefits in light of the impending Cadillac tax while 18% have changed plans to avoid the Cadillac Tax. Recent news reports along with lobbying efforts may be influencing the 61% of companies who have a wait and see approach about the Cadillac Tax.

Defined Contribution Plans

Employers continue to learn more about defined contribution plans and private exchanges with about 35% saying they are familiar with them. This is an increase of about 5% over last year. Twenty-eight percent say that exchanges help employees understand the value of their benefits. Twenty-five percent say that a defined-contribution plan would help employees understand the value of their benefits and make more cost-conscious benefit decisions.

Five percent of employers offer defined-contribution plans (not on a private exchange) while same offer defined-contribution plans on a private exchange. Also, 7% are considering offering a defined contribution plans on a private exchange while 53% have not explored defined contribution plans.

Fifty-five percent of employers who are considering a defined-contribution plan, say they would explore the option for 2017 or 2018. This suggests that near-term adoption will be gradual. But the adoption curve may steepen as the benefits of defined-contribution plans become better known.

Private Exchanges

Employers want private exchanges to provide many solutions including health spending accounts (62%), carrier integration (58%), COBRA compliance (56%), automation of premium payments (51%), and payroll integration (50%). Employers choose private exchanges to control costs and increase employee choices, which is why employers say, most often, that they are looking for health spending accounts. Incorporating consumer directed healthcare coverage, such as HDHPs, HSAs and HRAs, helps private exchanges create a competitive marketplace that promotes cost-savings for employees and employers.

To succeed a private exchange needs to provide broad choices and help participants in the selection process. Sixty-two percent of employers say that it is somewhat important to very important to have health-spending accounts in an insurance exchange. Also considered somewhat important to very important are carrier integration (59%), COBRA compliance (56.4%), and premium payment automation (53%). Employers say they would choose the following offerings in an exchange:

  • Plan and cost comparison tools 80%
  • Online capabilities 69%
  • Combined benefit enrollment 47%
  • A help line 47%
  • Transparency solutions for treatment cost comparisons 45%
  • Mobile applications 45%
  • Progressive cost tracking tools 35%
  • Consolidated employer billing 35%
  • Integrated consumer healthcare accounts 30%
  • Financial account options 28%

Employers rank several exchange features as important, such as being a private exchange instead of a public exchange (83%), having a large selection of plan choices at targeted benefit levels (58%), and being provided by their broker or benefit consultant (55%). These findings indicate that broad choice is more important than who runs the exchange (broker versus carrier).

Wellness

Wellness programs continue to gain interest as 35% of employers have initiatives in place compared to 30% last year. Another 22% are considering implementing a program. Sixty-five percent are considering adopting a wellness program in 2017, and 16% are considering adopting one by the end of 2016.

Fifty-five percent of those offering wellness programs, offer an employee-assistance program (EAP); 53% offer flu shots or vaccinations; and 37% offer a smoking cessation program. The disease management tools that most employers offer are for diabetes (30%) and depression or other mental health (30%). Fifty-four percent of employees are not offering disease management tools. But 30% are providing services for diabetes and mental health conditions. To promote positive health outcomes, 44% of employers offer at least one wellness program; 31% offer biometric screening; and 20% offer a disease management program.

Forty-four percent have at least one wellness initiative in their workplace. Employers that are interested in offering wellness plans should consider how it would affect productivity, absenteeism, turnover, retention, and recruitment, according to the survey authors. Including these factors in the ROI discussion can help demonstrate additional savings a company could achieve.

When it comes to wellness incentives, HSA and HRA contributions (18%) and premium reductions (16%) are most popular. Companies are split on whether to offer wellness incentives with 58% not providing rewards to employees and 42% offering some type of incentive in varying monetary amounts to participate. The value of the incentives remains relatively modest. Companies interested in wellness incentives can use the ACA as a guide. Eighteen percent offer $250 or more of incentives to employees for health-related tasks. Common values of incentives are $101 to 250 and $1 to $50. For more information, visit www.HealthcareTrendsInstitute.

The Impact of Health Reform in California

A survey by The California HealthCare Foundation (CHCF) finds improvements in access to care in California. The uninsured rate is at a new low, and fewer Californians are delaying or skipping necessary medical care. The number of Californians under 65 without insurance dropped 12%, falling from 16% of the population in 2013 to 14% in 2014. Uninsured rates declined notably among people living below 138% of poverty line and among African Americans. The share of the California population 18 to 64 enrolled in Medi-Cal rose 52%. The proportion of uninsured Californians reporting cost as the reason for lacking coverage fell from 53% to 43%, though lack of affordability remains the most common reason cited for going without insurance.

Overtime Reform, ACA, LGBT Policies Among Concerns for Today’s Employers

Agents See Lower Revenues

The Affordable Care Act (ACA) is among the top compliance concerns for the largest companies in the United States, according to a survey by Littler, a labor law practice. The survey was conducted in April and May. Changing the threshold for overtime pay could squeeze out jobs due to payroll increases. Companies are watching the Dept. of Labor carefully; they are aware that the required amount of overtime pay is likely to increase sharply. Twenty-five percent are concerned that the DOL would raise the minimum salary for professionally exempt employees above the $23,600 threshold – a concern that was realized after the White House announced a new estimated level of $50,440 for 2016.

Meanwhile, 37% of employers are concerned that the DOL may eliminate the executive, administrative and professional exemptions for workers who spend more than 50% of their work time engaged in non-exempt duties. Twenty-nine percent of surveyed employers are worried about the executive exemptions that may disappear for supervisors who engage in some non-exempt duties. Tammy McCutchen of Littler said, “The overtime adjustment and other potential changes from the DOL could cost employers billions of dollars. The employer community should take action now to shape the final rule.”

  • The ACA
    Before the Supreme Court’s landmark decision late last month in King v. Burwell, 55% of respondents had engaged or planned to engage with employee benefit attorneys or consultants to help navigate regulations relating to the Affordable Care Act. That was down slightly from 58% in 2014. Meanwhile, 18% are taking a wait and see approach in 2015 about the ACA compared to 14% last year.
  • LGBT Rights 
    Last month, the Supreme Court announced its decision in Obergefell v. Hodges, finding that same-sex marriage bans are unconstitutional nationwide. Even before the ruling in Obergefell v. Hodges, many employers had been moving toward more inclusive workplaces for LGBT employees. Forty-seven percent said their companies had established policies to address issues faced by LGBT employees. Only 11% said that changes in laws prompted new policies, and 13% said that their companies intended to make changes to policies within the next year.  Mark Phillis of Littler said, “Now that same sex marriage is legal nationwide, employers should revisit their benefit plans, leave policies, domestic partnership policies, and non-discrimination policies to ensure they are treating all their employees equally.”
  • Joint Employer Definition
    Employers are concerned with the potential change to the joint employer standard. The National Labor Relations Board is reviewing multiple cases that could modify the definition. As a result, 69% say they are concerned about exposure to greater legal liability; and 59% are concerned about the difficulty in monitoring the employment practices of separate entities. Michael Lotito of Littler said, “For employers, the burden of having to monitor not only their own employees, but also the employees of subcontractors is especially daunting and has the potential to have a huge impact on industries throughout the country. It is certainly worth keeping a close eye on.” Cost is a continued concern among employers as the National Labor Relations Board and other agencies continue their enforcement efforts. Thirty-four percent of respondents are justifiably concerned that a change from the board on this matter could result increased costs for their company.
  • EEOC and Discrimination Claims in the Workplace
    Fifty-seven percent of respondents expect an increase in charges relating to hiring barriers, including the consideration of criminal or credit histories. Thirty-seven percent of employers expect an increase in claims relating to accommodations for disabled workers. Thirty-four percent expect more investigations and charges about equal pay issues. Respondents are also concerned about claims of retaliation (33%) and charges of age discrimination (32%).

Barry A Hartstein of Littler said, “The survey results mirror concerns that the newly appointed EEOC Chair, Jenny Yang, and  General Counsel, David Lopez will focus on larger, systemic cases in the near term. Employers will continue to grapple with discrimination claims as the EEOC ramps up its enforcement efforts. The concerns expressed in the survey align with what is happening in the courts, such as the Supreme Court’s decisions in UPS v. Young and EEOC v. Abercrombie, or newly minted ban the box legislation. In short, employers have many issues impacting their workforce related to discriminations and hiring practices.”

CMS Proposes Updates to Part D

The Centers for Medicare and Medicaid Services (CMS) released proposed changes to the Medicare Advantage (MA) and Part D Prescription Drug Programs. CMS says that the proposal would provide fair payments to plans while rewarding high-quality care. CMS is proposing to continue to refine the star rating system to encourage improved quality. CMS proposes to modify the system to ensure that plans are not penalized unfairly for enrolling dual eligible or low-income beneficiaries.

The proposal also enhances the value of in-home assessments to support care planning and care coordination and improve enrollee health outcomes. The Advance Rate Notice proposes changes in payments. On average, the expected revenue change would be positive growth of 1.05% when combined with expected growth in plan risk scores due to coding. Plans that have shown quality improvement and have demonstrated a focus on customer satisfaction would see additional growth. Plan payment levels will continue to be somewhat higher than the equivalent payments in fee for service.

The 2016 Draft Call Letter proposes steps to ensure that plans maintain accurate provider directories and make those directories widely available, helping enrollees better understand the providers available to them. In addition, CMS proposes to work with Part D sponsors that offer limited access to preferred cost sharing pharmacies in their networks to ensure all beneficiaries have access to affordable coverage.

CMS says that enrollment and quality in the Medicare Advantage and Part D Prescription Drug program has grown since the Affordable Care Act. Medicare Advantage has reached record high enrollment each year since 2010. That trend continues in 2015 with an increase of more than 40% since passage of the Affordable Care Act. Also, premiums have fallen nearly 6% from 2010 to 2015. More than 90% of Medicare beneficiaries have access to a $0 premium Medicare Advantage plan.

According to CMS, the continued popularity of the program reflects a clear signal that Medicare Advantage and the Prescription Drug Program are attractive to health plans and beneficiaries. In 2015, CMS estimates that 60% of Medicare Advantage enrollees will be in four- or five-star plans – an increase of 43 percent since 2009.

Medicare Advantage – A Growth Vehicle for Health Plans

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Health plan executives may be missing an opportunity to capitalize on the growing demand for Medicare Advantage (MA) plans, according to a survey by KPMG. Consumer adoption of these plans is expected to grow as more Baby Boomers enter retirement years. Despite interest and growing membership in MA, the number of health plans viewing the category as a major part of their market offerings decreased to 24% in 2014 from 35% in 2011. Only 29% of health plan executives see MA as a source of market segment growth in 2015, putting that category behind individual insurance and small and large group plans.

“Health plans have been going through unprecedented transformation as a result of the Affordable Care Act…Individual insurance is expected to be a major part of health plan offerings, but there is an overlooked opportunity to engage aging Baby Boomers, who may see this as an option instead of traditional Medicare as they enter their retirement years,” said Ashraf Shehata, U.S. advisory leader for Health Plans.

Congressional Budget Office projections see MA enrollment growing to 19 million by 2017, an increase from the 16 million in these plans. Two in three people older than 64, who are open to joining MA plans, are likely to do so this year. Renewal among members is at 85%, and one in three traditional Medicare plan beneficiaries are open to changing to MA.

According to the KPMG survey, nearly half of the people covered by Medicare would be willing to absorb a premium increase of $100 per month while 38% would switch to narrower provider networks and 14% would seek plans with higher deductibles. If the monthly premium for traditional Medicare increases by $200, only 19% would be willing to absorb the premium increase. Narrower networks would be the most attractive option to Medicare beneficiaries under that scenario over higher deductibles (54% versus 27%).

Most people pay $104.90 for Medicare Part B, which covers durable medical equipment, medically necessary services and preventive care, according to CMS. Two-thirds of MA enrollees have at least one serious chronic illness, compared to 34% of enrollees in traditional Medicare. This disparity is likely to continue. More than half of those who said they were likely to enroll in MA in 2015 have a chronic condition. Seventy-seven percent of MA enrollees with chronic conditions are satisfied with their health plan, versus 66% of those with no chronic condition.

Shehata said, “Seniors are leaning toward MA plans as a better alternative to Medicare gap coverage, and people with chronic conditions tend to be sensitive to out-of pocket medical costs. Our survey also found that seniors might be inclined to switch to MA plans if vision care were covered, if their primary doctor was coordinating care or if incentives were available for managing their blood sugar and blood pressure. There are some very interesting opportunities for health plans to profitably gain new customers while delivering value to seniors.”

Insurers Spend Big on Anti-Prop 45 Campaign

Six health insurance companies have donated $37.3 million, through June 30, to fight Proposition 45. The ballot measure would require health insurance companies to get permission before raising rates, as is the rule in 35 other states. Prop 45 would also give the insurance commissioner the right to prevent health insurance companies from passing on lobbying costs, civil fines, bad faith judgments, campaign contributions, or excessive executive compensation. Top contributors were the three health insurance companies controlling 75% of the private insurance market in California. Kaiser gave $14.3 million; WellPoint gave $12.5 million; and Blue Shield gave $9.5 million, according to a report by Consumer Watchdog. The No on 45 campaign has hired consultant Rick Claussen, creator of the 1994 Harry and Louise advertising campaign against federal health care reform. The $37 million advertising campaign is set to begin as early as mid August according to media buyers.

Health Reform Not Expected to Dampen the Need for Advisors

Ninety-four percent of small businesses say their need for an outside advisor will increase or stay the same in the next two years, according to a recent LIMRA study. “While the new public and private exchanges will eliminate the need for many of the administrative functions that advisors perform, such as requests for proposals, helping both employers and employees understand the options available within and outside the exchanges will be a new way for advisors to grow their business,” said Mary Boyce of LIMRA.

Companies that are most likely to see a need for an advisor in the next two years are those with 10 to 24 employees, those that are still establishing themselves, and those that are looking to expand. According to the U.S. Census Bureau, 98% of businesses in the U.S. have fewer than 100 employees, accounting for approximately 35% of the U.S. workforce. Yet only half use an advisor for business or personal needs regardless of whether they offer benefits to employees. Mary Boyce of LIMRA said, “This presents a huge opportunity for advisors who are able to demonstrate their value.”

Half of the employers surveyed who use an advisor said they were satisfied with their advisor. But there is room for improvement, as 40% of small businesses are neutral with regards to satisfaction with their advisor. Cost was the top reason small business employers gave for eliminating their advisor. Employers rely on their advisors for a variety of services. The most important include reviewing their plans to make sure that the rates are competitive and services are current and reviewing the renewal rate adjustment to ensure that it is competitive. For more information, visit limra.com.

Multi-Employer Plans and the Exchanges

Multi-Employer and union-sponsored plans, which have provided health insurance coverage to millions of union workers, must be allowed to coexist with the insurance exchanges. This coexistence can ensure that more Americans, not just union members, have greater access to health insurance coverage. Otherwise, the rising number of uninsured and the growing costs of health care will remain a challenging public policy issue, according to an analysis by Daniel Wolak, president of The Union Labor Life Insurance Company and acting president of Ullico Casualty Company.

One way is through the ACA’s premium income tax credit provision to help low to moderate-income people and families afford coverage through the exchanges.  Multi-employer plans can provide comprehensive coverage and support the integrity of the exchanges if union workers are eligible for this income tax credit. This eligibility will help to offset the workers’ premium costs and ensure that they can continue to receive their coverage as part of an insured group. In addition, it will allow employers, who provide coverage through collectively bargained plans, to continue offering health insurance to their workers and control their own insurance costs.

The alternative is for employers to discontinue their multi-employer plans, leaving participants a choice: purchase coverage on their own through the exchanges or pay a penalty. If faced with this choice, it is possible that union workers, who have affordable benefits, will not buy ealth insurance if their only option is through the exchanges. These potential interruptions in health care coverage will negate the two primary goals of the PPACA — reducing the number of uninsured and the overall cost of health care. For more information, visit http://www.ullico.com/sites/ullico.com/files/ExpertsCorner-Wolak.pdf

Rate Review Rules Hold Down Premiums

The ACA’s rate review program may be responsible for holding down health insurance premium increases.  The report by the Kaiser Family Foundation finds that this may be true even in states that had review programs before the ACA went into effect. Under rate review, states and the federal government review proposed premium increases of 10% or more.

The average rates implemented were lower than the average rates requested in 21 states. For example, in Iowa and Oregon, the average rate that went into effect was more than 4% lower than the average rate requested by the carrier. In contrast, there was no difference between the average rates requested and the average rates that went into effect in 11 states plus D.C.  The following are statistics for California:

• Number of filings submitted – 65
• Number of filings lowered, rejected, or withdrawn – 14
• Average rate change requested – 9.9%
• Average rate change implemented – 9.3%

The new 10% threshold for review may have discouraged insurers from proposing increases of 10% or more in states that did not have rate review programs before the ACA. Increased emphasis on rate review and transparency may have given state regulators an incentive to apply greater scrutiny during rate review. Federal rate review enabled many states to enhance their rate review processes by hiring additional actuarial staff.

The rates that went into effect averaged 20% lower than the rates initially requested for filings submitted to state regulators during 2011. Nationwide, about one in five requests by insurers to change premiums were denied, lowered, or withdrawn during state review.  The difference between average rates requested and implemented was greater in the individual market than in the small group market, though the individual market also saw higher average requested rates.

Insurers have been submitting fewer requests above the 10% threshold following implementation of the ACA’s rate review standards. Also, after September 1, 2011, rate requests above 10% were more likely to be denied, modified, or withdrawn than similar requests made earlier in the year.

Proposed increases of 10% or more are now published on HealthCare.gov whether they are reviewed by state or federal regulators. While regulators may be able to exert pressure on insurers to control costs more aggressively, rate review cannot alter the factors driving increases in health care costs, such as the underlying prices charged by doctors and hospitals, the amount of health care utilized by enrollees, and new medical technologies, according to researchers.http://www.kff.org/healthreform/upload/8376.pdf

Last Updated 09/22/2021

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