Employers Strive to Help Employees Gain Financial Wellness

Sixty-one percent of employers have adopted consumer directed health plans, which provide a personal savings account to offset employee’s deductibles. Employers are expanding health and wellness programs, or implementing cost sharing for some benefits, according to a survey by Prudential.

Brokers say that their roles are being affected by rising healthcare costs and healthcare reform, changing regulations, expanding web technology, and rising competition from non-traditional players. They say that their most important business objectives are retaining customers, increasing productivity and efficiency, and increasing customer satisfaction. Most employees say that voluntary benefits increase the value of their benefit program, even if the employee doesn’t participate. This varies by generation, with a greater percentage of Millennials finding value.

State Finalizes Medical Provider Network Rules

The California Dept. of  Insurance has issued final regulations that include requirements for health insurers to create and maintain adequate medical provider networks. “These regulations go into effect immediately because they address a number of critical problems consumers have faced with insurers when seeking timely access to care,” says Insurance Commissioner Dave Jones. He had issued temporary emergency regulations, which have been in effect since late January 2015. The regulations require health insurers to do the following:

  • Include enough numbers and types of providers in the network to deliver covered services.
  • Adequately provide for the treatment of mental health and substance use disorders.
  • Include an adequate number of primary care providers and specialists with admitting and practice privileges at network hospitals.
  • Monitor and adhere to new appointment wait time standards.
  • Regularly report information about the networks and changes to the networks to the Dept. of Insurance for review.
  • Maintain accurate provider network directories available to the public and update them weekly.
  • Arrange out-of-network care at in-network prices when there are insufficient in-network care providers.

The Case Against Restrictive Drug Plan Regulations

Increasing unnecessary regulations on drug plans could inflict higher costs on the 220 million Americans who get their medications through a managed drug plan, according to a report by National Center for Policy Analysis Senior Fellow Devon Herrick. Herrick said, “Blatant protectionism through restrictive drug plan regulations may be touted as consumer protections, but more often than not they are designed to benefit local pharmacy service providers at the expense of consumers.”

Drug therapy is the most cost-effective way to treat most conditions. Yet recent legislative proposals aim to weaken or prohibit the agreements health plans negotiate with pharmacy networks: In early 2014, the Centers for Medicare and Medicaid Services proposed a ban on exclusive preferred networks, in which seniors are offered lower cost-sharing in return for patronizing a preferred pharmacy network. Many industry observers said the proposal came from lobbying by pharmacy trade groups that preferred to avoid competitive bidding for inclusion as a network provider.

Also in 2014, California debated and narrowly avoided perverse regulations that would have forced health plans to use unqualified pharmacies to administer the most advanced specialty drug therapies and made it harder to offer discounts for mail-order drug delivery to enrollees’ homes.

In early 2015, the Colorado Senate introduced a bill to prohibit health plans from offering financial incentives (for instance, lower-cost sharing) to fill costly specialty drugs at designated network pharmacies or by health plans’ lower-cost, mail-order pharmacies.

Arkansas just passed a law increasing the paperwork burden on drug plans and allowing pharmacies to refuse to fill those prescriptions deemed unprofitable — despite previous agreements to participate in the plan.

Experts predict more private exchanges, more regulations in 2014

As employers with 50 or more full-time employees prepare for the Affordable Care Act’s mandate to take effect in 2015, more privately run insurance exchanges will offer benefits, and consumers will become more cost-conscious, predicts Alan Cohen, chief strategy officer for private exchange firm Liazon. Transparency around health care costs will improve, says Ceci Connolly, managing director of PricewaterhouseCoopers’ Health Research Institute. The Obama administration is likely to extend the March 31 deadline for getting insurance or paying a tax penalty, and it will promulgate more rules implementing the ACA, says Catamaran’s Ellen Nelson. USA Today (1/1)

Regulations Aim to Protect Consumers from Unfair Wellness Programs

The Departments of Health and Human Services (HHS), Labor and the Treasury released proposed rules to prohibit unfair practices in wellness programs under group health coverage. The proposed rules would be effective for plan years starting January 1, 2014.

The rules cover “health-contingent wellness programs.” These programs require people to meet a health standard to get a reward. Examples include rewarding people who don’t use tobacco or those who decrease their use; rewarding people who reach a certain cholesterol level or weight; or rewarding people who fail to meet that biometric target, but take certain additional required actions.

Health-contingent wellness programs would have to follow these rules:

• Anyone who does not meet the standard based on the measurement, test, or screening must be offered a reasonable means of qualifying for the reward. Programs must have a reasonable chance of improving health or preventing disease and not be overly burdensome for people.

• There would have to be reasonable alternative ways to qualify for the reward for people whose medical conditions make it unreasonably difficult to meet the standard or for those whom it would not be medically inadvisable to meet the standard.

• People must be notified of the opportunity to qualify for the same reward through other means. The proposed rules provide new sample language that is intended to be simpler for people to understand, which would increase the likelihood that those who qualify for a different means of getting a reward will contact the plan or issuer to request it.

• The maximum permissible reward under a health-contingent wellness program would increase from 20% to 30% of the cost of health coverage. The maximum reward would increase to as much as 50% for programs designed to prevent or reduce tobacco use.

The proposed rules would not specify the types of wellness programs that employers can offer.

For more information, visit http://www.ofr.gov/inspection.aspx.

Last Updated 01/19/2022

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