by US Rx Care | Feb 3, 2022 | Uncategorized
A new study has found that more than one in four U.S. workers say expensive medical bills are having a major impact on their mental health.
Mental health issues have come to the fore during the COVID-19 pandemic, spurring employers to expect their group health plans to do more for their workers in this area.
The report on the study by the health care consulting company Centivo urges employers to consider new ways to reduce the medical financial burden some of their employees may be experiencing.
Mental health is already on the radar of employers:
- Large businesses reported that addressing their workers’ mental and emotional health would be a top priority over the next three to five years, according to a 2021 study by Mercer Consulting.
- Nearly 40% of employers surveyed by the Kaiser Family Foundation in November 2021 said that they had made changes to their mental health and substance abuse benefits since the pandemic started.
The Centivo report found that:
- S. workers are increasingly having difficulties in paying for health care, particularly due to high copays, deductibles and other health plan cost-sharing elements.
- Health care affordability also correlates to sacrifices in care, including mental health care. Twenty percent of study participants who experienced major medical expenses said they skipped or delayed needed mental health care or counseling due to cost concerns.
- Medical expenses are a significant cause of mental health and well-being issues for both individuals and families.
Stress drivers
The report states that the findings raise concerns about whether some employees can even afford to use their health plans. It stressed two main points:
High deductibles — The report found one of the main drivers of stress was high deductibles and other out-of-pocket costs.
It found that only 10% of those surveyed had a health plan with a zero deductible.
More troubling was that 40% of those with deductibles ranging from $1,000 to $3,999 did not have enough money saved to cover a major medical expense.
Savings trumps more features — The study found that group health plan enrollees’ top priority in their health plans is to save money, both on the front end in premiums as well as the back end in out-of-pocket costs.
Respondents said they would take saving money over expanded features, even if they had fewer choices in their health care. In fact, nearly three out of four respondents said they would trade off being able to see their current provider or specialist for a plan that is 10 to 30% less expensive than their current one.
The takeaway
One interesting finding in the study was the less that employees saved for health care, the more likely they were to report that a major medical expense had affected their mental health. Only those that reported more than $10,000 in savings reported low levels of mental health issues.
That highlights the need for employees to set aside funds for health care expenses through health savings accounts, flexible spending accounts and health reimbursement accounts. These are funded with deductions from the employees’ salaries before taxes are taken out.
Centivo’s chief medical officer, Dr. Wayne Jenkins, said that employers can help their workers reduce their overall medical outlays by working with their employee benefits brokers to:
- Eliminate or reduce deductibles,
- Engage with health insurers to provide simple and predictable copays, and
- Make primary care visits free (which helps physicians diagnose serious ailments earlier, resulting in lower medical costs over time).
Also, businesses may consider “skinny plans,” which typically have fewer provider choices in exchange for lower premiums and out-of-pocket costs.
by US Rx Care | Jan 26, 2022 | Uncategorized
The time when the IRS offers relief from financial penalties to employers that make errors on their group health insurance reporting forms has come to an end.
Starting this year, the IRS will no longer offer protection against reporting error penalties when “applicable large employers” (ALEs) file their Forms 1094-C and 1095-C and the employer has made a good-faith effort to comply. The change starting with the 2021 tax reporting year means that employers can face steep penalties for mistakes on their forms.
IRS Code requires employers who are obligated under the Affordable Care Act to offer their employees health insurance benefits to also file these forms annually. But since employers were required to first start filing these forms in 2018, the IRS has been lenient against those that make good-faith errors on the forms.
Typically, when the IRS identifies instances when an employer may be liable for employer shared-responsibility penalties based on information provided on the forms, the agency will send the employer a Letter 226J. These letters will identify an employee who may have received health insurance from their employer but is also receiving premium tax credits from a policy on an exchange.
To date, the IRS has allowed ALEs to ask for corrections on their filed forms, or to reduce the penalty without imposing reporting error penalties as well. That comes to an end this year when employers file their 2021 forms.
Issues to bear in mind
Here are a few issues businesses need to be aware of:
- Starting this year, the IRS will no longer offer good-faith relief from penalties for incomplete or incorrect forms.
- For the 2021 reporting year, these penalties are $280 per form that must be furnished to employees and $280 per form filed with the IRS.
- According to reports, the IRS is especially focused on employers who may not be satisfying ACA requirements that all health plans they offer their staff must be “affordable,” which means costing no more than 9.83% of the employee’s household income for the 2021 tax year
- Thanks to the American Rescue Plan Act, more Americans qualified for premium tax credits on ACA exchanges and the act drastically increased those tax credits to the point where some people were paying $1 a month for coverage. Employers could face reporting problems if any of their staff dropped their employer coverage and got coverage on an exchange.
Important dates
Jan. 31, 2022: Deadline for furnishing 1095-C forms to employees.
Feb. 28, 2022: Deadline to file paper 1094-C and 1095-C forms with the IRS (only for employers with fewer than 250 employees).
March 31, 2022: Deadline to file forms electronically with the IRS.
by US Rx Care | Jan 18, 2022 | Uncategorized
The COVID-19 pandemic has had profound effects on health insurance in the U.S., with many employers improving mental health and other benefits to help their workers during this trying period, according to a new report by the Kaiser Family Foundation.
Despite the disruptions caused by the pandemic, the proportion of employers that offer their staff health coverage has remained steady, while health insurance premiums and out-of-pocket expense increases have remained moderate, according to KFF’s “2021 Employer Health Benefits Survey.”
With the stress of the pandemic weighing on workers in all industries, as well as the effects on their families and society from lockdowns and other changes brought on by COVID-19, many Americans have been struggling with mental health as well as substance abuse.
Provisional data from the Centers for Disease Control’s National Center for Health Statistics indicate that there were an estimated 100,306 drug overdose deaths in the United States during the 12-month period ending in April 2021, an increase of 28.5% from the 78,056 deaths during the same period the year before.
Besides drugs, alcohol abuse has also skyrocketed during the pandemic, according to the CDC.
Another report by the CDC found that 40% of U.S. adults had reported struggling with mental health or substance abuse:
- 31% reported symptoms of anxiety and/or depression.
- 26% reported symptoms of trauma/stressor-related disorder.
- 13% started or increased substance abuse.
- 11% reported seriously considering suicide.
It’s no surprise then that since the pandemic started, 39% of employers surveyed said they’d boosted their benefits covering these issues.
Of those that made changes:
- 31% increased the ways employees can access mental health services, such as telemedicine.
- 58% of employers with 200 or more employees and 38% of those with 50 to 199 employees expanded online counseling services.
- 16% started offering employee assistance programs or other new resources for mental health.
- 6% expanded access to in-network mental health providers.
- 4% reduced cost-sharing for such visits.
- 3% increased coverage for out-of-network services.
How did employers act? For example, after the pandemic hit, Rhode Island-based Thundermist Health Center’s employee health plan reduced the copayments for behavioral health visits to zero from $30.
As to employees, they responded by taking advantage of the new and expanded services:
- 38% of large companies (1,000 or more workers) said their workers had used more mental health services in 2021 than the year before.
- 12% of companies with at least 50 employees said their workers had increased their use of mental health services.
What you can do
With so many people suffering from mental health and substance abuse issues that may have been exacerbated by or are a direct result of the pandemic, it’s certain that most employers have staff who are struggling.
Talk to us about what your current plan choices offer in terms of substance abuse and mental health counseling benefits. Many insurers, in response to rising demand, have been increasing access to these treatments.
If you do not have one, you may also consider an employee assistance program, which will provide a set amount of counseling appointments as well as substance abuse treatment to complement your health plan.
by US Rx Care | Jan 12, 2022 | Uncategorized
Most employers offer major medical coverage to their full-time employees. But that still leaves workers and their families with significant exposure to financial hardship in the event of a serious medical emergency.
For example, even with insurance, treating a broken leg or undergoing emergency appendicitis surgery can mean thousands of dollars in out-of-pocket medical costs.
Meanwhile, most households can’t afford to cover a $1,000 emergency. Fortunately, employers can help by offering their workers voluntary hospital indemnity insurance that can provide peace of mind in case they have a serious medical episode.
Hospital indemnity insurance
This coverage offers a cash payment directly to the insured worker in the event of the hospitalization of themselves or a covered family member.
The worker can use this cash benefit for any purpose, including:
- Deductibles
- Copays
- Coinsurance
- Drugs
- Transportation
- Medical equipment, such as wheelchairs or walkers
- Offset lost wages
- Hiring home care assistance.
How coverage works
One of your employees calls in and says she had to take her daughter to the hospital the previous night with severe stomach pain.
The doctor diagnoses the girl with appendicitis, and schedules her for immediate surgery. She spends two days in the hospital. She’ll be fine. But your employee now has some significant medical bills.
The average cost of appendix-removal surgery is over $30,000. Your group medical plan will pay for most of it. But if you have an 80-20 plan, your worker is still responsible for her deductible (averaging over $1,600), plus 20% of that cost, or over $6,000.
That leaves your worker exposed to a total out-of-pocket cost of over $7,600.
If she takes a few days off work to care for her daughter at home while she recovers, the net cost is even greater.
Few people can cover that. When faced with medical bills like that, many of them go into debt, or skip needed medical care, which can lead to still greater costs down the road.
In fact, medical bills are a major contributing factor to personal bankruptcy ― even for people with health insurance.
Little or no cost to the employer
Hospital indemnity coverage is generally offered as part of a voluntary benefits package, and often at little or no cost to the employer.
Employees pay part or all of the premiums via payroll deduction. Coverage specifics vary, but plans are designed to be affordable for all kinds of workers.
Coordination with group health insurance
Many employers use hospital indemnity coverage to help close the gap between the worker’s needs and what an existing group medical plan will cover.
In many cases, the availability of a direct cash benefit in the event of a qualifying hospitalization or emergency room visit can coax employees to opt for a lower-cost high-deductible health plan reducing overall costs for the business, while giving the worker peace of mind that they can foot the bill in case of emergency.
We can help you customize your voluntary benefits package and coordinate it with your existing group medical offering.
Note: Hospital indemnity insurance is a supplemental insurance product. It does not constitute comprehensive health insurance and is not intended to replace a qualifying major medical insurance plan.
by US Rx Care | Jan 5, 2022 | Uncategorized
As we enter 2022, there are a number of changes on the horizon that plan sponsors need to be aware of as they will affect group health plans as well as employees enrolled in those plans.
Some of the changes concern temporary rules that were implemented during the COVID-19 pandemic. In addition, new rulemaking is likely to be introduced in 2022 that will affect health plans, including non-discrimination rules for wellness plans and new rules governing what must be included on insurance plan ID cards.
Here’s a list of what to expect in 2022.
HDHP telehealth services — The CARES Act, signed into law in 2020 after the pandemic started, temporarily allowed high-deductible health plans to pay for telehealth services before an enrollee had met their deductible.
That comes to an end Dec. 31, 2021, and for plan years that start on or after Jan. 1, 2022, HDHPs must charge enrollees for telehealth services if they have not yet met their deductible.
Mid-year election changes — The Consolidated Appropriations Act of 2021 (CAA) and ensuing guidance from the IRS relaxed a number of rules that will come to an end for plans incepting on or after Jan. 1, 2022. These rules were all not mandatory and employers could choose whether to relax them or not.
Here are the rules that will sunset at the end of 2021:
- Allowing employees who had declined group health insurance for the 2021 plan year to sign up for coverage.
- Allowing employees who had enrolled in one health plan option under their group health plan to change to another plan (such as switching insurance carriers or opting for a silver plan instead of a bronze plan).
- For health flexible spending accounts (FSAs), allowing participants to enroll mid-year, increase or decrease their annual contribution amount, or pull out of the plan altogether and stop contributing.
- For plan years ending in 2020 and 2021, permitting employers to modify their FSAs to include a grace period of up to 12 months to spend unused funds from the prior policy year.
- Allowing for a higher FSA carryover amount than the typical $500.
Any plans that allowed these changes would have to have been amended to reflect that, and for 2022 they’ll have to be amended to reflect reverting to the old rules that forbid such changes.
Affordability level falls — Under the Affordable Care Act, employers with 50 or more full-time or full-time equivalent workers are required to provide health coverage to at least 95% of their full-time employees. The ACA requires that the coverage is “affordable” for the worker, which is set as a percentage of their household income.
For 2022, the affordability level will be 9.61% of their household income, down from 9.83% in 2021.
Electronic filing threshold drops — Starting in 2022, employers with 100 or more workers will be required file their 2021 ACA-related tax forms with the IRS electronically, as a result of changes brough on by the Taxpayer First Act. That’s a change from the prior threshold of 250. This applies to forms 1094-C, 1095-C, 1094-B and 1094-B.
While the IRS has yet to release guidance for this change, it’s expected it will do so by the end of 2021.
More guidance coming
The CAA created a number of new requirements that affect health insurance and coverage. Look for various government agencies, chiefly the Centers for Medicare and Medicaid Services, to provide new guidance on:
Insurance plan identification cards — Part of the CAA requires health plans and issuers to include information about deductibles, out-of-pocket maximum limitations and contact information for assistance on any ID cards issued to enrollees on or after Jan. 1, 2022.
Continuity of care requirements — The CAA also requires insurers to offer anyone who is a “continuing care patient” of a provider or facility the option to elect to continue to receive care for up to 90 days from the provider or facility, even when there’s a change in that provider’s contract status with a health plan that could normally result in a loss of covered benefits.
If certain conditions apply, this transitional care would be provided as if the contractual relationship with the provider had not changed.
Wellness program incentives — The Equal Employment Opportunity Commission is expected to issue new regulations on what kind of incentives are permissible for employer-sponsored wellness programs. The main focus is on incentives and if they are discriminatory to some workers.
by US Rx Care | Dec 28, 2021 | Uncategorized
Employers looking for ways to decrease their group health insurance outlays over the past decade have been turning to high-deductible health plans as they offer lower up-front premiums.
In 2021, 51% of the U.S. workforce was enrolled in one of these plans, according to a recent survey by ValuePenguine.com.
But successfully coaxing your employees to choose an HDHP is not always easy. It means getting the deductible amounts right and educating them on how to best use these plans.
Also, while the plans are not for everyone, they can be a good fit for those who do not use their health plans much, are young and in good health. These employees may instead be overpaying for their premiums if they are not in an HDHP with an attached health savings account (HSA).
The key to encouraging your staff to adopt these plans is to first understand why some are reticent about them, how you can overcome their objections and how you can better tailor the plans for them. The following are the main reasons HDHP adoption may be lagging among covered workers.
Lack of education
One of the biggest hurdles to overcome is that many people are shocked to see the amount of the deductible, even as they save money on their premium. And on top of that sky-high deductible, they still have copays.
If you want employees that would be better suited for an HDHP to actually sign up for a plan, you need to take the extra time to:
- Explain how HDHPs work and that there is a trade-off for high deductibles in exchange for lower up-front premiums.
- Provide custom, side-by-side medical plan comparison tables and different medical usage scenarios to illustrate which types of individuals are best suited for an HDHP and which ones are not. (This would include scenarios of individuals who may be high health care users who may not be well suited for an HDHP.)
- Explain how they can funnel what they save in premiums into an HSA so they can save their money for future medical expenses (more on HSAs later).
After covering all of the above, you should encourage your staff to pencil out the math to figure out which plan is right for themselves and their families. They can do this with the usage scenarios you provide. They may need assistance in doing this and you can encourage them to ask questions so they can make the best decision.
Too-high deductibles
For 2022, the maximum out-of-pocket deductible for an HSA-linked single HDHP is $7,050 and for a family plan the total deductible is $14,100. The minimum deductible for these plans is $1,400 for a single plan and $2,800 for a family plan.
While employees expect an HDHP to have a higher-deductible than a traditional plan, they can be shocked by a multi-thousand-dollar deductible. And many employers offer plans that are at the maximum end of the deductible spectrum.
You can work with us to model out multiple plan design scenarios that will help you save money on your group benefits bill while maximizing plan adoption. These models do a good job of explaining possible annual outlays and savings at different premium and deductible levels.
You’re not contributing to their HSAs
Employers will often fund HSAs with a matching contribution up to a certain dollar amount, but that’s not required under law. As a result, many employers do not contribute to these accounts. But HSAs are critical to the success of HDHPs.
It’s often hard to impart the importance of an HSA and how it can benefit a worker years in the future. To generate interest, it’s a good idea for the employer to offer to contribute to the account if the employee sets up an account. Once an employer starts contributing, the likelihood of the employee starting to do so increases exponentially.
When selling them on the benefits, explain that an HSA never expires. Your employees can keep them for life and let the funds grow in value through investments, and then put them to use when they are older or if they have health problems years later.
Additionally, they are funded with pre-tax earnings, and withdrawals are not taxed either.
Tell them this is essentially free money and that at some point this year or far in the future, they may need the money in the account to pay for medical services.
The takeaway
Helping your workforce understand how HDHPs (coupled with an HSA) can benefit them is the best way to encourage them to enroll.
You may not convince everyone that an HDHP is right for them, but if you get through to some of the ones who can benefit from an HDHP, they may share their experience with colleagues later.
