A recent decision by a federal judge in Texas to issue an injunction on a pivotal part of the Affordable Care Act requiring insurers to offer certain types of free preventative care, has raised concerns that some health plans will stop paying for these services.
However, since most employer-sponsored plans are on annual contracts, the decision is unlikely to affect policies in 2023, but beyond that, it’s uncertain how things will play out. The Biden administration has appealed and called for a hold on the ruling until the decision is settled by higher courts.
If the ruling by Judge Reed O’Connor of the Federal District Court for the Northern District of Texas sticks, it would roll back the health insurance market to the days prior to the ACA when health insurers decided which preventative care services they would cover with no cost-sharing.
The ACA changed all that, requiring insurers to pay for preventative services, such as:
Cancer screenings, like breast cancer screenings and colonoscopies
HIV screenings
Diabetes screenings
Heart disease screenings
Pap smears
Depression screenings
Statins
Immunizations and PrEP for HIV and HPV.
Judge O’Connor in 2018 issued a decision striking down the entire ACA, which was later reversed by the U.S. Supreme Court.
The most recent ruling is really two decisions:
That a panel of volunteer experts that issues binding recommendations on what preventative care must be covered under the ACA violated the Constitution because its members are not appointed by the president or confirmed by the Senate.
That the ACA requirement that insurers must cover PrEP and HPV vaccines as well as certain HIV/Aids-prevention drugs violates the religious beliefs of Christians, which in turn violates the Religious Restoration Freedom Act.
The fallout
The consequences of the ruling are unlikely to be felt immediately, particularly for group health plans, the annual contracts of which include coverage for preventative services.
Matt Eyles, president and CEO of the trade association America’s Health Insurance Plans, issued a statement saying that: “As we review the decision and its potential impact with regard to the preventive services recommended by the United States Preventive Services Task Force, we want to be clear: Americans should have peace of mind there will be no immediate disruption in care or coverage.
“We fully expect that this matter will continue on appeal, and we await the federal government’s next steps in the litigation, as well as any guidance from relevant federal agencies.”
That said, if the Biden administration fails in convincing higher courts to put a hold on the injunction while the appeal of the decision plays out, changes could come over time.
In this continuing tight job market, many employers would likely be reluctant to roll back these preventative services in their health plans. And if insurers plan to make changes to their plans’ benefits, they are required to give advance notice.
Other pundits have said that the preventative care provisions of the ACA have become so ingrained in the health care system that employers and insurers would have a hard time rolling these benefits back, and many may not consider it.
After the Centers for Medicare and Medicaid Services proposed new rules aimed at streamlining the prior approval process for most health plans in the U.S., a number of the country’s largest insurers announced their own steps to improve the process.
UnitedHealthcare announced in late March that it would cut the use of prior authorizations by 20% for some non-urgent surgeries and procedures. Starting in the third quarter of 2023, the insurer will remove many procedures and medical devices from its list of services that require prior approval, and continue through the rest of the year for most commercial, Medicare Advantage and Medicaid plans.
Meanwhile, insurance giant Cigna said it has been in the process of reducing the prior authorization for about 500 services and devices. And Aetna is working to automate and simplify prior authorizations.
The proposed rule
The rule is aimed at tackling one of the biggest headaches for patients and practitioners alike. Waiting for prior authorizations for care, pharmaceuticals or medical devices can lead to delays in care and increased risk of hospitalization from those delays.
The goal of the proposed rule, which would take effect in 2026, is to reduce the bureaucracy around prior authorizations and cut wait times for responses that some providers say sometimes take weeks to get approved.
The specifics of the rule are as follows:
Insurers would be required to render a decision within seven days after a request for a non-urgent service or item (compared to the current 14 days).
If the requested care or item is urgent, the insurer must render a decision within 72 hours.
If the insurer denies the request, it must include a specific reason for doing so.
Most group and individual health plans, Medicare Advantage, Medicaid managed care and state Medicaid agencies would be required to build and maintain a system for electronically approving prior authorizations, known as a “fast health care interoperability resources application programming interface.”
The interface must be able to ascertain whether a prior authorization request is required and “facilitate the exchange of prior authorization requests and decisions” from the provider’s electronic health records or practice management system.
Large employers are unwavering in their plans to continue offering group health plans to their workers instead of funding individual reimbursement accounts that would allow them to shop for plans on government-run exchanges, according to new research.
The poll of 26 health benefits decision-makers at large firms, carried out by The Commonwealth Fund and the Employee Benefits Research Institute (EBRI), found that despite rising premium and health care costs, they felt obligated to offer health insurance instead of shunting employees to exchanges.
Employers since 2019 have been allowed to fund individual coverage health reimbursement accounts (ICHRAs) with pre-tax dollars for their employees to satisfy the Affordable Care Act’s employer mandate. Workers are required to use their ICHRA funds to purchase a plan on healthcare.gov or a state-run health insurance exchange.
However, large employers feel they can do a better job at providing their workers with coverage, according to the report.
“Most interviewees expressed a strong skepticism that their firms would drop health benefits or direct their workers toward marketplace exchanges,” said Jake Spiegel, research associate of health and wealth benefits research at EBRI. “Broadly, companies continue to view their health benefits as a recruitment and retention tool, and cutting these benefits would hamper their efforts to cultivate a strong workforce.”
The health benefits decision-makers at large firms told researchers that jettisoning their group health insurance benefits would make it more difficult to attract and retain talent. They said there were other benefits to providing group health coverage to their workers, including:
They felt they could offer their workers a better deal than what was available to them on public exchanges. “We liked to have control. We can do a better job with design than the exchanges.” — Health care company benefits executive
They felt they simplified health insurance for their employees, who would possibly feel overwhelmed by all the choices on public exchanges. “We don’t want [workers] out shopping on their own, [exchange plans] aren’t easy to understand.” — Benefits executive at a financial services company
They viewed their companies as paternalistic, meaning they have a responsibility to also help their workers make better health insurance decisions. “It would make workers feel like you were cutting and running.” — Benefits executive at a manufacturing firm
They didn’t want to be the first to jump out and completely disrupt their group health benefits offerings. “A big part was trepidation. Nobody wanted to be first.” — Benefits executive at an insurance company
Some of the interviewees said that funding ICHRAs and sending their workers to ACA exchanges would rob the company of the opportunity to help workers manage expensive health conditions.
For example, under IRS rules, employers may cover some drugs and services on a pre-deductible basis for workers who are enrolled in high-deductible health plans with attached health savings accounts.
But likely the biggest reason for not taking the ICHRA leap is the effect on employee satisfaction. Executives told the researchers that their workers expect them to provide a “suitable menu of health benefits options” and that they trust that their employer has shopped around for the best deal that doesn’t reduce quality.
Additionally, they felt that their workers would not be happy about being shunted to an exchange and having to take it on themselves to sift through the myriad of plans available to them at different cost and benefit structures.
“[Employees] don’t really take the time or energy to really understand, and they don’t want to. They trust us to make the decision for them,” one benefits executive told the researchers.
The takeaway
While this survey was only of large employers, market indications are that most mid-sized and smaller firms have also been sticking to providing their employees with health insurance coverage.
Offering a comprehensive group health plan is still the best way to retain and attract talent while satisfying the employer mandate under the ACA. Even for employers not subject to the mandate, to be competitive in the job market, offering health insurance is still a priority.
Finally, treading into ICHRA territory requires foresight and planning, and companies have to prepare for possible blowback if the employees don’t like the exchange experience or can’t get the same coverage at the same out-of-pocket cost to them as they did before.
Doing it incorrectly, such as not funding the accounts with enough money, could open your organization up to fines.
A bipartisan group of House legislators in February reintroduced legislation from 2022 that would pave the way for employer-sponsored, stand-alone telehealth benefits plans.
The bill is important as the current law allowing health insurers to cover telehealth benefits sunsets at the end of 2024, which would be difficult for many patients and providers who have grown accustomed to telehealth visits with their physicians.
The legislation, however, takes a different approach by instead making telehealth benefits separate from a health plan.
A similar measure died in committee last year due to congressional inertia during an election year. The current legislation has bipartisan support with sponsorship by Rep. Angie Craig, D-Minnesota, Rep. Ron Estes, R-Kansas, Rep. Mikie Sherrill, D-New Jersey, and Rep. Rick Allen, R-Georgia.
The bill
The goal of the Telehealth Benefit Expansion for Workers Act would be to make stand-alone telehealth benefits separate, and not a replacement for a group health plan. Instead, employers would be able to offer them under a group health plan or group health insurance coverage as excepted benefits.
Excepted benefits are additional coverages that employers can, but are not required to, offer, like vision or dental insurance. Federal law dictates what qualifies as an excepted benefit, which necessitates the legislation to add telehealth services to the mix.
Telehealth benefits, under the legislation, would apply to all workers, even those who work part-time or seasonally.
Why is the legislation needed?
Prior to the COVID-19 pandemic, health plans were unable to cover telehealth services under the law. But, when the outbreak first started, followed by lockdowns, telemedicine was sometimes the only option patients had to get face time with their physicians.
As a result, lawmakers enacted laws that allow health plans to cover patients’ video and phone visits with their doctors. Those laws were set to sunset 151 days after the COVID-19 public health emergency expires.
But the budget bill signed into law at the end of 2022 extends and expands telehealth flexibilities under the law through Dec. 31, 2024. Those flexibilities include:
Expanding originating sites to include any sites where patients are located, including their homes.
Extending coverage and payment for audio-only telehealth services.
What’s next
This measure has only just been introduced, but since it was crafted by Democrats and Republicans, and considering the eventual sunsetting of telehealth provisions, there is some urgency in getting permanent legislation on the books.
However, as telemedicine grows in use and popularity, elected representatives may feel pressured to make permanent the current law that allows health plans to cover video and telephone visits with their physicians.
In the continuing quest to reduce health care costs and make care more accessible, a new type of health plan has been taking shape: The virtual-first health plan.
These rapidly evolving plans integrate virtual care delivery models into a comprehensive health plan that encourages enrollees to access virtual care with their doctors before resorting to an in-person visit.
These plans are coming to market as Americans have gotten use to virtual visits with their doctors during the last three years of the COVID-19 pandemic and virtual care becomes more common even in traditional health plans.
While the uptake is still quite small — 6% of employers surveyed in 2022 offered these plans — it’s expected to grow quickly over the next few years.
All of the major health insurers in the U.S. have already announced various tie-ups with virtual care providers and tech vendors to improve their telemedicine offerings, and the uptake will continue growing as employers and their workers grow more comfortable with the plans.
A recent survey by Mercer found that, among organizations with 500 or more employees:
52% plan to offer virtual behavioral health care in 2023.
40% plan to offer a virtual primary care physician network or service in 2023.
21% already offer virtual specialty care, like for dermatology, diabetes or musculoskeletal issues.
There are a number of benefits to virtual-first primary care:
Easier access — Virtual care is ideal for people with health problems that make it difficult to see their doctor or who do not live near a hospital or doctor’s office.
Reduced costs — Telemedicine visits cost less than in-person visits, and they can yield additional savings through technological efficiencies.
Convenience — Enrollees don’t have to drive to the doctor’s office, contend with traffic or sit in the waiting room — and they can meet with their doctor from the comfort of their home.
Better health outcomes — Virtual first plans will often put a premium on health records integration across the care spectrum to ensure that care team members have access to them, which can help them provide better clinical and administrative support.
How they work
Virtual-first health plans include the same coverage as traditional health plans, including fee-for-service, health maintenance organizations and preferred provider organizations, but they focus on directing enrollees to telemedicine options for their doctor’s visits.
The key difference is that they aim to significantly reduce costs by incentivizing enrollees to seek out virtual care first through plan design, incentives and advocacy. Consultation sessions can often be performed virtually, saving both the patient and doctor time, while reducing the costs for each visit.
Virtual-first plans incorporate the same arrangements as traditional health plans, except that most doctor’s visits will be online, or via a smartphone app. When a patient needs to see their doctor, they’ll schedule the visit on their account — and they’ll need to opt out of a virtual visit if they feel that they need to see the doctor in person.
Additionally, if possible, specialist visits can also be conducted on the app or website.
The takeaway
Virtual-first care plans are an evolving product and it’s important to find a plan that can truly save you money while not sacrificing quality of care.
These plans are still in their infancy and are hitting the market in increasing numbers. But because they are new, there is no uniform standard for them. The most important aspects to look for in these plans are strong member engagement and seamless integration to ensure quality of care.
Give us a call if you’re curious about these plans, to find out if carriers in the area are offering them and, importantly, whether they are a good fit for your organization.
A new study has found that individuals enrolled in high-deductible health plans (HDHPs) are more engaged than their traditional plan counterparts during open enrollment, spending more time on choosing plans and using employer-provided tools to help them make their choices.
Despite their higher engagement though, overall, 72% of group health plan enrollees spent less than an hour on their plan during last year’s open enrollment, according to the “2023 Consumer Engagement in Health Care Survey” by the Employee Benefits Research Institute and Greenwald Research.
Additionally, one in five didn’t spend any time researching or tending to their health plan and were just automatically re-enrolled.
The study’s authors said there are likely a few reasons U.S. workers are not spending a significant amount of time researching health plans during open enrollment, including:
Satisfaction with their plan — The study found that 90% of employees were satisfied or somewhat satisfied with their employer’s open enrollment process. As mentioned, 20% of participants auto-renewed, indicating they are likely satisfied with their plan.
More choices — Employees that have more plans to choose from may find the process of comparing and contrasting plans overwhelming.
Too many obligations — Many employees likely want to spend more time researching plans, but everyday work, family, social and community obligations can get in the way.
HDHP enrollees more engaged
HDHP enrollees on most metrics were more involved in plan selection and research during open enrollment than their traditional plan counterparts.
For example, 29% of HDHP enrollees spent more than an hour researching plans during open enrollment, compared to 23% of those enrolled in traditional plans.
HDHP enrollees were also more likely to have three or more choices of health plans than their traditional plan counterparts. In fact, while 29% of HDHP enrollees had a choice of three plans, only 17% of traditional plan enrollees had three choices. Meanwhile, 36% of those in traditional plans had only one choice, compared to 29% of those in HDHPs
They were also more likely to use employer-provided tools to choose a plan:
Annual employee benefits guide from employer: 58% of HDHP enrollees used it, compared to 38% of traditional plan enrollees.
Employee benefits online portal: 41% HDHP, 29% traditional plan
Online research: 23% HDHP, 32% traditional plan.
Employer-provided educational videos: 25% HDHP, 24% traditional plan
HR/benefits department consultations: 13 HDHP, 14% traditional plan
Insurance carrier/provider website: 11% HDHP, 16% traditional plan
One of the driving factors for plan choice among high-deductible health plan recipients was whether the plan covered preventative care for chronic conditions, pre-deductible.
Nearly one-half (45%) reported that pre-deductible coverage of preventive care for chronic conditions affected their decision to select the HDHP to a great extent. Another 25% reported that it impacted their decision to a minor extent.
Additionally, 25% of traditional plan enrollees said they would be extremely or very likely to select an HDHP if it covered preventative care for chronic conditions before they reach their deductible. Another 39% reported being somewhat likely to select an HDHP if such care were covered pre-deductible.
Despite these numbers, the percentage of workers enrolled in HDHPs has ebbed since 2020, when 34% of U.S. workers were enrolled in them. In 2022, 32% were.
The takeaway
With so few employees spending more than an hour researching plans during open enrollment, some of your workers may be choosing the wrong coverage for their life circumstances.
While open enrollment only happens during the last few months of the year, you can still provide educational resources to your staff during the rest of the year to educate them on their plan choices and how to choose the best one for their life situation.
You can also encourage them to use the resources you and we provide them to help make educated decisions about their coverage.
