During open enrollment, employees usually familiarize themselves with their coverage. But just a few months later, much is forgotten. Even the savviest employees can get confused – and frustrated – with their health insurance. Over time, two out of ten employees regret their benefits decision, according to an online Harris Poll.

Employers can avoid these pitfalls by highlighting plan information in meetings, newsletters, emails and posters throughout the year. As a bonus, communicating about insurance coverage results in two key benefits for employers:

  • When employers communicate about benefits four or five times a year, 85 percent of employees report being extremely or very engaged with their organization as a whole, according to Thomsons Global Employer Benefits Watch 2016/17.
  • Clearing up confusion will help employees appreciate your benefits investment, according to the Society for Human Resource Management.

An effective communications plan can also help employees avoid these five common health insurance mistakes:

Mistake #1 Underutilizing health savings accounts (HSAs).

Employees are easily confused by HSAs. They may not know which expenses are eligible for reimbursement, or they don’t realize they can contribute funds at any time.

To help, point employees to the IRS list of eligible expenses from acupuncture to X-rays.

Next, educate employees about their ability to add extra cash to the HSA anytime throughout the year. For example, after a root canal or a trip to the emergency department, employees can deposit money to pay their out-of-pocket costs.

Mistake #2 Paying too much for prescriptions.

Everyone loves to save money, and understanding prescription coverage can help. If your plan has a mail-order option or a preferred pharmacy, be sure employees know about these economical alternatives.

Also, publicize information about your carrier’s online formulary to help employees choose less expensive options when available. One caveat: Online formularies aren’t always up-to-date. When in doubt, employees should call their insurer’s customer service department for clarification.

Mistake #3 Getting confused about preventive care.

Knowledge is power. Most health plans provide preventive care like routine physical exams, immunizations and screenings at no charge. But confusion about what’s preventive – and what’s not – can cause angst.

There are two key issues:

  • Guidelines change from year-to-year. For example, prostate-specific antigen (PSA) cancer screening was considered “preventive” in the past, but most insurers have removed it based on scientific research. Many doctors still recommend PSA screening, however, which leaves employees footing the bill.
  • Identical services can be either preventive (no-cost) or diagnostic (subject to copayments, deductibles or coinsurance) based on circumstances. For example, a blood glucose test is preventive if the patient doesn’t have any symptoms. But patients with diabetes have the same lab test for diagnostic purposes.

To clear up confusion, provide employees with a link to your insurer’s preventive care guidelines, which outlines no-cost services based on age and gender.

Mistake #4 Getting unexpected out-of-network bills.

If your company benefits plan includes an HMO, it’s essential that employees understand how claims will be processed:

  • When hospitalized, employees should request care from in-network providers when possible. In some cases, an anesthesiologist or another behind-the-scenes provider may be out-of-network even when the hospital is in-network, which means the employee will be billed.
  • For emergency care, health plan copayments or coinsurance must be the same whether the emergency department is in-network and out-of-network, according to the Affordable Care Act. Employees may be balance billed by an out-of-network provider for services, however, and they may be responsible for this bill.

Even employees with a PPO may have surprises. Although PPO plans cover a predetermined percentage of the cost, this payment is based on “reasonable and customary” charges. This could leave employees paying more than anticipated. Read Consumer Reports “The $20,000 Tick Bite” for a dramatic example.

Mistake #5 Ignoring EOBs.

Some employees make the mistake of paying a provider’s bill before reviewing their explanation of benefits (EOB). When that happens, they may inadvertently pay too much.

How to help? Remind employees to take a wait-and-see approach with medical bills. Once the EOB arrives, they can compare it with their provider invoices to be sure the information aligns.

The good news? Many insurers have redesigned – and even renamed – their EOBs to make the information easier to understand. Insurers also provide online member centers, so employees can log into their accounts and review claim details online.

If you think genetic testing options like 23AndMe and Ancestry.com are just a flash-in-the-pan, think again. Genetic data is creating a new paradigm in healthcare: Forbes reports that precision medicine could eventually remove the need for guesswork and make medical treatment more efficient and cost-effective.

The roots of this approach can be traced to the Human Genome Project, completed in 2003, which provided researchers with tools to understand the genetic factors in human disease. This information has led to a targeted approach to cancer treatment, but that’s only the beginning.

There’s also a trend toward personalized healthcare, a virtual “crystal ball” that helps doctors assess an individuals’ risk for future illnesses by combining genetic information with more traditional means including age, lifestyle, health history, medical records, compliance and other factors. Currently 10,000 conditions can be identified using genetic tests.

What do precision medicine and personalized healthcare mean in practical terms?

  • Lower costs, better outcomes. Doctors, researchers and pharmaceutical companies are finding new ways to leverage genetic information to help patients avoid chronic diseases and deliver precise, effective treatments to the right patients at the right time.
  • New “miracle” drugs. Pharmaceutical companies are revisiting their traditional business model and finding new revenue streams through precision medicine. According to Forbes, leading pharma/biopharma companies have almost doubled their investment in personalized medicine since 2012 and are planning more increases over the next five years. The focus goes beyond oncology to other therapeutic areas including infectious diseases, central nervous system disease conditions (like Parkinson’s and Alzheimer’s) and cardiovascular diseases.
  • Genomics could go mainstream. As the cost of genome sequencing goes down, healthcare systems could begin putting that knowledge to work. Modern Healthcare reports that patients are getting their DNA sequenced and doctors are using that information to check medications for genetic suitability.
  • Big data is being leveraged. The Veteran Affairs Department is enrolled 500,000 veterans as part of its goal to created the largest genomic research database in the world. And Geisinger Health System has recruited 130,000 patients as part of a plan to create the MyCode Community Health Initiative biobank.
  • Entrepreneurs see opportunity. Gene-sequencing giant Illumina Corp. was highlighted by The Motley Fool, thanks to the company’s dominant position in the market. The company’s newest machines, with their $1 million price tag, began shipping this quarter.
  • The market is growing. MarketWatch reports that personalization of healthcare, dominated by oncology, cardiovascular and infectious disease treatment and diagnostics, could be worth $149 billion by 2020.
  • Consumerism will drive accountability. As patients become more engaged in healthcare information and the decision-making process, they are becoming more conscious about the cost of care. Personalized healthcare dovetails perfectly with this emphasis on accountability between patients and caregivers.

The overall impact on employer benefit plans is still out for debate. Currently, genetic testing is often a covered benefit when recommended by a doctor but pre-authorization may be required. In general, insurers also require genetic counseling as part of the process.

The emphasis on genetics could also impact employer wellness plans. The Genetic Information Nondiscrimination Act (GINA) was passed in 2008 to prohibit discrimination by employers or insurers based on genetic information. The limits of this act are being put to the test, however, with HR1313. This controversial House bill would allow employers to require genetic testing as part of their wellness program. Opponents say this may undermine employees’ privacy, while supporters see this as an opportunity strengthen wellness plans.

As genetic testing becomes more ubiquitous, expect this topic to garner increased attention.

Millennials are coming of age. They comprise one-third of today’s workforce, with more Millennials on the job than Gen X’er or baby boomers, according to a Pew Research report. Their needs — and their preferences — have a growing influence on the way health insurance and health care are delivered.

Millennials are generally defined as those born from 1982 to 1994. Ranging in age from their early 20s to mid-30s, they include entry-level employees and rising young stars in management roles.

In a nutshell, they are the business leadership of the future.

Hidden health concerns

Insurance carriers often refer to the “young and healthy” Millennial population, but in reality this age group faces a host of current medical needs and future risks.

According to a survey by the Transamerica Center for Health Studies, 54 percent say they have been diagnosed with a chronic illness and 28 percent are on medication. Their most common concerns are depression, being overweight and anxiety disorders. Stress is often a contributing factor to health issues.

Contraceptive coverage also continues to be a priority; 58 percent of Millennials believe employers should provide it at no cost.

Not your grandfather’s health insurance

Millennials grew up with technology, so they consume and share information differently than their older coworkers. And they place a very high value on a work-life balance, which puts a new spin on health care benefits.

Consider these five priorities when designing your benefit plan:

  1. To please Millennials, look for benefit plans that stay on the digital cutting edge. This is an opportunity to rethink the enrollment experience, communication strategies and the actual delivery of health care services.
  2. Millennials expect to be in charge of their own destiny, so it helps to offer options, letting them “shop” for the benefits they prefer. (Think like Amazon, with side-by-side comparisons, product reviews and a “shopping cart” for purchases.) Also consider offering holistic options that meet their lifestyle needs.
  3. Although Millennials may find discussions about copays and coinsurance to be tedious, they generally are unfamiliar with the insurance terminology and how their coverage works. Online tools can help.
  4. Mobile apps. Look for a carrier with a Smartphone app that lets beneficiaries access their plan information the same way they read the news and stay in touch with friends.
  5. Seek out plans that don’t rely on traditional methods of delivering care. A Salesforce 2016 Connected Patient Report found that 60 percent of Millennials prefer a primary care doctor that offers a patient app for scheduling appointments, billing and health data. They also prefer online chats over traditional phone calls. More than half of Millennials expect their doctor to offer virtual care treatment options.

As the number of Millennials in the workforce continues to grow, designing benefits plans around their needs and preferences can contribute to business success.

You’ve already chosen your health plan and introduced it to employees. Now it’s time to leverage your investment with these five resolutions:

  1. Think wellness. Millions of Americans create New Year’s resolutions annually, but 80% of them fail. This year, make lifestyle changes easier for employees by integrating wellness initiatives into your company. It can be as easy as holding a weight loss contest, tabulating employees’ miles walked (an across-the-country or around-the-world challenge) and offering healthier snacks in the vending machines. Does your insurance carrier offers fitness center discounts to members? If yes, remind your employees to take advantage of this perk.
  1. Emphasize an ounce of prevention. Your health plan includes no-cost preventive coverage ranging from an annual checkup to mammograms and colonoscopies. Let employees know you care about their health by encouraging them to take full advantage of their preventive care benefits. (You may also reduce medical costs and absenteeism when employees catch small health issues before they become big problems.)
  2. Encourage shopping. Your employees wouldn’t buy a car or a television without comparison shopping. Encourage them to reduce health care costs by also shopping for health services. To encourage participation, test out your insurance company’s transparency tool to see how it works, and then hold a lunch-n-learn to share the information with employees.
  1. Control chronic conditions. Chronic diseases account for 86% of the nation’s health care costs and are responsible for 7 of 10 deaths each year. Encourage employees who have diabetes, high blood pressure, asthma, heart conditions or other health issues to work with their doctors and their insurance company to get healthier. Not only will your employees feel better, they’ll also be more productive at work and have fewer absences.
  1. Skinny down from the top down. Obesity costs the nation $147 billion in medical costs annually and reduces productivity by $79 to $132 per obese individual. It’s also tied to heart attack, stroke, diabetes, cancer and many other illnesses. Want slimmer employees? Begin with the management team. Develop a “biggest leadership loser” contest and celebrate successes with healthy snacks in the lunchroom.

This is your chance to make 2017 one of the healthiest, more productive years in the history of your company.

Presidential Candidates and Healthcare

The 2016 presidential election will mean changes to Affordable Care Act (ACA), and two candidates – on opposite sides of the issue – say they would eliminate employer-sponsored health benefits.

In general, the Democrats want to expand government-sponsored healthcare coverage, while Republican candidates are united in their determination to repeal “Obamacare.”

No matter who wins, you can expect employee benefit plans to undergo changes and last-minute rulings that create temporary chaos and confusion during the transition.

Here’s a snapshot of how candidates plan to improve the cost and quality of healthcare:

Hilary Clinton plans to build on the foundation set by the Affordable Care Act. An advocate for universal coverage for more than 20 years, Clinton has pledged to expand coverage for millions of Americans by:

  • Lowering premiums and out-of-pocket expenses for those buying coverage on the exchanges.
  • Encouraging Medicaid expansion with incentives to states, including a 100 percent match for three years.
  • Making enrollment easier with support from navigators and other outreach activities.
  • Supporting a “public option” in interested states.

Bernie Sanders is calling for “Medicare for all.” He wants to create a single-payor health plan, which he says will save the typical middle class family $5,000-plus, and save businesses $9,400 per employee annually.  Sanders’ plan includes:

  • Implementing a universal health plan for all medical care and treatment.
  • Eliminating provider networks— anyone could see any doctor.
  • Eliminating copays, deductibles and other out-of-pocket costs.
  • Paying for the plan with income-based health care premiums (6.2 percent from employers and 2.2 percent from households) along with changes to income tax, capital gains tax and estate taxes.

Senator Ted Cruz would have Congress repeal the Affordable Care Act. In 2013, before the law went into effect, he famously filibustered for an historic 21 hours in an effort to halt its implementation.  Cruz says he’ll make healthcare more personal, portable and affordable by:

  • Expanding the use of Health Savings Accounts to provide tax advantages.
  • Allowing individuals to purchase insurance across state lines to increase competition and drive down premiums.
  • De-linking health insurance from the workplace so Americans wouldn’t lose coverage if they change jobs or are laid off.

Ohio Governor John Kasich would repeal the Affordable Care Act.  His plan uses market-based principles to hold down costs and improve health by:

  • Expanding Medicaid.
  • Placing more emphasis on patient-centered primary care, with added incentives for providers.
  • Encouraging episode-based payments and other forms of payment reform.
  • Allowing states to control insurance market regulations.

Donald Trump also wants to repeal the Affordable Care Act, bringing “free market reforms” to the healthcare industry. Trump’s plan includes:

  • Eliminating the individual mandate.
  • Allowing health insurance sales across state lines.
  • Allowing individuals to deduct health insurance premium payments on their tax returns.
  • Expanding the use of Health Savings Accounts.
  • Requiring price transparency for doctors and healthcare organizations.
  • Providing Medicaid block-grants to states.
  • Driving down prescription drug prices by allowing consumers to buy drugs from other countries.
  • Whether this becomes a tornado or a tsunami in the world of employer benefits depends largely on which candidate is elected, how much cooperation comes from Congress, and the inevitable challenges and decisions at the Supreme Court level.
The Republican-led U.S. Congress has passed an act repealing portions of Affordable Care Act, though it will be vetoed by President Obama.

Congressional Republicans are leading a push to repeal the Affordable Care Act, and while it's unlikely such legislation will pass the president's desk, the move may provide a symbolic rallying call for ACA opponents.

The legislation would repeal significant sections of the ACA, including the requirement that individuals and large employers purchase insurance or face fines. The bill would also eliminate federal Medicaid expansions as well as subsidies for qualifying low-income policyholders who purchase insurance through federal or state exchanges. Additionally, the law would remove all federal funding for Planned Parenthood.

"The legislation would repeal significant sections of the ACA."

However, as Insurance Journal noted, some aspects of the ACA would be preserved by the proposed legislation. Conservative lawmakers have not found fault with ACA restrictions that require insurers set premiums and offer coverage without regard to the policyholder's pre-existing conditions.

Symbolic significance
While President Barack Obama has already announced his intent to veto the legislation, the bill may still speak to the growing unpopularity of the ACA. Speaking with The New York Times, Bill Hoagland, senior vice president of the Bipartisan Policy Center and a former Republican member of the Senate Budget Committee, said the law represents American frustration with high health care costs and limited provider options under the ACA.

"This will only be the eight veto of Obama's tenure as president."

"This is a big deal," Hoagland told the Times. "This vote sends the signal to the president and the American people there are changes that need to be made in this law."

As the Times reported, this will only be the eighth veto of Obama's tenure as president. The publication also noted the White House has expressed frustration that resistance to the ACA continues even as coverage has grown to cover more than 17 million uninsured Americans and many aspects of the law, including the ability to extend coverage to the policyholder's children, have been popular.

Health insurers still experiencing losses
As Business Insurance noted, so far the ACA has not been profitable for health insurance providers. Many insurers have reported losses, including UnitedHeath Group Inc., which announced it may leave the exchange in 2017. Nearly half of the marketplace's co-ops have also failed due to high losses.

However, some of that may change as the exchange matures and insurers have access to more data that allows them to adjust prices accordingly. According to Business Insurance, many policyholders who purchased insurance from the marketplace were higher-risk and more frequent users of medical care, which led to higher losses for providers. It's likely insurers will also implement measures to reduce losses, including raising premiums, reducing provider networks and no longer offering gold and platinum plans.

Speaking with Business Insurance, Neal Freedman, an analyst with Standard & Poor's, said the marketplace will likely experience several changes in the next few years, but losses should begin to stabilize for insurers soon after. According to Freedman's analysis, more stability and long term sustainability is expected to develop between the end of year three and the beginning of year five of open enrollment. 

Many policy holders are already seeing higher deductibles on their company-sponsored health plans.

As part of its recently improved budget deal, Congress passed legislation that delays implementation of the Affordable Care Act's Cadillac Tax for two years.

The spending bill, which passed the House in a 316-113 vote and the Senate with a 65-33 vote, would delay implementing the Cadillac Tax until 2020. Originally scheduled to go into effect in 2018, the Cadillac Tax was designed to restrict employers from offering high-cost employer-sponsored health plans by placing a 40 percent excise tax on plans exceeding $10,200 for individual coverage or $27,500 for family coverage annually.

"Opponents of the Cadillac Tax see its delayed implementation as a sign of its eventual repeal."

Some opponents of the Cadillac Tax see its delayed implementation as a sign of its eventual repeal. In a statement, James A. Klein, president of the American Benefits Council, said support for repealing the tax is diverse and includes patient advocates, unions and private and public sector employers.

"We applaud Congress for passing a two-year delay of the 'Cadillac Tax' and thank the Congressional champions who made this possible," Klein said. "The delay provides a much-needed down payment toward the ultimate goal of full repeal."

However, Forbes contributor Brian Blase argued the Cadillac Tax would actually remedy a major problem with the Affordable Care Act: the tax exclusion for employer-sponsored health insurance leads to employers offering overly expensive insurance. This leads to lower wages for workers who see more of their pre-tax income going to pay for their employer-sponsored insurance plans.

Controlling health care cost
According to a report from the Mercatus Center at George Mason University, this tax loophole also creates market distortions and leads to $300 billion in untaxed revenue each year.

"Many of the United States' current health-care-related problems – from lack of choice and competition to rising costs – stem in part from the tax exemption for employer-provided health insurance," the Mercatus report concluded.

"Proponents of the Cadillac Tax argued it would help to slow U.S. health care spending."

As reported by Business Insurance, group health care plan costs are increasing each year, and proponents of the Cadillac Tax argued it would help to slow U.S. health care spending. Even though the tax is delayed for now, many insurance providers had already begun restructuring their offerings in order to lower their rates and avoid the 40 percent levy. According to a report from the Kaiser Family Foundation, 53 percent of large employers with 200 employees or more have already analyzed their plans to see if they would be hit with a high-cost plan tax and many have made changes to lower plan expense. The Kaiser report also found 8 percent of large employers had already switched to lower-cost plans.

However, as CNN noted, many employer-sponsored plans have also begun passing on the cost of the Cadillac Tax to employees by increasing deductibles and other out-of-pocket expenses. Wellness programs, on-site clinics and other costly programs may also be eliminated as employers look for ways to control the health care costs they are absorbing.