by US Rx Care | Sep 23, 2020 | Uncategorized
The IRS has announced the new affordability requirement test percentage that group health plans must comply with to conform to the Affordable Care Act.
Starting in 2021, the cost of self-only group plans offered to workers by employers that are required to comply with the ACA, must not exceed 9.83% of each employee’s household income.
Under the ACA, “applicable large employers (ALEs)” — that is, those with 50 or more full-time workers — are required to provide health insurance that covers 10 essential benefits and that must be considered “affordable,” meaning that the employee’s share of premiums may not exceed a certain level (currently set at 9.78%). The affordability threshold must apply to the least expensive plan that an employer offers its workers.
The threshold was increased because premiums for health coverage increased at a greater rate than national income growth during 2020.
With this in mind, if you are an ALE you should consult with us to ensure that you offer at least one plan with premium contribution levels that will satisfy the new threshold.
Failing to offer a plan that meets the affordability requirement to 95% of your full-time employees can trigger penalties of $4,060 (for 2021) per full-time employee, minus the first 30. The penalty is triggered for each employee that declines non-compliant coverage and receives subsidized coverage on a public health insurance exchange.
Since most employers don’t know their employees’ household incomes, they can use three ways to satisfy the requirement by ensuring that the premium outlay for the cheapest plan won’t exceed 9.83% of:
- The employee’s W-2 wages, as reported in Box 1 (at the start of 2021).
- The employee’s rate of pay, which is the hourly wage rate multiplied by 130 hours per month (at the start of 2021).
- The individual federal poverty level, which is published by the Department of Health and Human Services in January of every year. If using this method, an employee’s premium contribution cannot be more than $104.52 per month.
Out-of-pocket maximums
The IRS also sets out-of-pocket maximum cost-sharing levels for every year. This limit covers plan deductibles, copayments and percentage-of-cost co-sharing payments. It does not cover premiums.
The new out-of-pocket limits for 2021 are as follows:
- Self-only plans — $8,550, up from $8,150 in 2020.
- Family plans — $17,100, up from $16,300 in 2020.
- Health savings account-qualified self-only plans — $7,000, up from $6,900 in 2020.
- HSA-qualified family plans — $14,000, up from $13,800 in 2020.
by US Rx Care | Sep 15, 2020 | Uncategorized
As lawsuits against employers continue rising amid the coronavirus pandemic, some businesses are requiring workers to sign waivers absolving them of liability and responsibility should they contract the virus.
Eight percent of executives surveyed by law firm Blank Rome said they would require that their workers sign waivers of liability before returning to the workplace.
While employers are trying to protect themselves from a liability that didn’t even exist a year ago, some human resources legal experts have expressed concerns that they may not be necessary ― and may be unenforceable.
The moves come as employers are wrestling with numerous risks that the pandemic has wrought, and with the U.S. Senate having proposed legislation that would limit the liability of employers for workers who become sick during the pandemic. A number of states have also enacted laws or emergency regulations that make it harder for employees to sue employers for negligence over COVID-19.
COVID-19-spurred employee lawsuits have mostly centered on employers not providing the proper protections for workers, discrimination or for being laid off for refusing to come to work.
Legal experts caution that employers cannot require workers to waive rights they may have, such as access to workers’ compensation benefits or the right to file a complaint with OSHA.
They also say that some employers may consider waivers as a green light to not take precautions against COVID-19, but in such cases the waivers would likely not be legal.
If a worker claims they caught COVID-19 at work and the facts back that up, they would likely have access to workers’ compensation benefits (some states even require it). But if the employer was negligent, the employee could have further legal avenues to pursue besides workers’ compensation, rights that cannot legally be waived, lawyers say.
So even if an employee were to sign a document waiving their right to file a complaint if they feel their employer is being negligent, they may still have recourse.
Requiring workers to sign waivers could present a number of legal issues, according to the law website nolo.com, including:
- Courts in some states are reluctant to enforce liability waivers in the workplace because of the superior bargaining power of employers over their staff.
- Workplace morale could suffer if your employees think you are placing your own economic interests above workplace safety.
- Any waiver employees sign would not protect your firm from lawsuits filed by their families should they contract COVID-19 if staff are infected at work.
- A waiver might be unnecessary in states that have passed laws granting immunity to employers for claims made by workers infected with the virus.
Another option
While employees who refuse to sign a waiver of their company’s liability may have grounds to challenge their employer, some liability lawyers say that employers instead of a waiver can ask their staff to sign a social contract that requires:
- The employer to follow Centers for Disease Control and Prevention guidelines and take all necessary precautions to prevent the spread of COVID-19 at work, and
- The workers to comply with their employer’s requirements on mandates on wearing masks, social distancing and not coming to work if they have symptoms or of they think they have been exposed to someone with COVID-19.
This type of agreement won’t protect an employer from a lawsuit, but it does spell out that they are following authorities’ recommendation for protecting employees.
While employees who refuse to sign a waiver of their company’s liability could have grounds to sue, those who sign this type of acknowledgement of new workplace rules and government guidance are less likely to be successful if they are fired for not signing. This is because the acknowledgement is not forcing them to give up any of their rights and is rather for their and their co-workers’ protection.
These social contracts also would provide workers with a list of their responsibilities when working during the COVID-19 pandemic, and outline what their employer is doing to protect them.
by US Rx Care | Sep 8, 2020 | Uncategorized
With large employers expecting health insurance rates to climb 5.3% in 2021, they are concerned about how the COVID-19 pandemic will affect overall health care costs in the coming years, a new survey has found.
Those expectations gleaned from the survey by the National Business Group on Health would mean average premiums and out-of-pocket spending could reach $15,500 per worker. The expected increase is on par with the average 5% annual increase that large employers have projected in the last five years.
Employers have been using different strategies to tame those costs, most notably pushing more telemedicine for their workers, a trend that has increased during the pandemic.
Additionally, employers have increased their investments in employee health and well-being programs, a trend that was largely spurred by the pandemic and employers’ understanding that their business performance is linked to the health of their workers.
The numbers going into 2021 are squishy because there has been a significant drop-off in the use of medical services in 2020 due to the pandemic. Many people have delayed non-urgent care to avoid the risk of being infected with COVID-19 if they go to the hospital.
Other people with serious conditions have also unwisely decided to forgo care out of fear of getting sick from the coronavirus.
Health care experts are not sure if that means there will be an uptick in utilization in 2021 and think the 5.3% estimate increase in costs will pan out if people continue to put off care, Conversely, if care resumes in 2021, the projected trend may prove to be too low.
Here’s what large employers are expecting:
- Average total health care spending on premiums and out-of-pocket costs will reach $15,500 per worker in 2021, up from $14,769 this year.
- Large employers will cover nearly 70% of costs (premiums), while employees bear the rest. That would mean the average outlay per employee would be $10,850 for the employer and $4,650 for the employee.
Trends
Employers are continuing to address health care costs by focusing on new areas that can improve health outcomes for their workers. The trends that large employers predict would continue in 2021 are:
Continued move towards telehealth services — The use of telemedicine has exploded during the COVID-19 pandemic. Among the survey respondents:
- 76% have made changes to provide better access to telehealth services.
- 71% have boosted the types of telehealth services they offer, such as adding health coaching and emotional well-being support.
- 80% expect virtual health will play a significant role in how care is delivered in the future. That’s compared with just 64% last year and 52% in 2018.
- 52% will offer more virtual care options next year.
- Nearly all will offer telehealth services for minor, acute services.
- 91% will offer online counseling or therapy.
- 29% may start offering virtual care for musculoskeletal issues, like physical therapy for back and joint pain.
Boosting wellness and mental health services — As many as 88% of respondents said they would provide access to online mental health support resources, such as apps, videos and articles. The survey also found that:
- 54% are lowering or waiving costs for virtual mental health services in 2021.
- 27% will reduce the cost of counseling services at the worksite.
Focusing on primary care — More employers are looking at advanced primary care strategies to reduce costs, with 51% saying they will have one at least one such strategy in place for 2021.
This would include contracting directly with primary care providers who can improve the delivery of preventive services, chronic-disease management, mental health and whole-person care.
Addressing high-cost drug therapies — Two-thirds of respondents said they were very concerned with the cost of new million-dollar treatments, just one of which can blow up their health cost budget.
Those expectations gleaned from the survey by the National Business Group on Health would mean average premiums and out-of-pocket spending could reach $15,500 per worker. The expected increase is on par with the average 5% annual increase that large employers have projected in the last five years.
Employers have been using different strategies to tame those costs, most notably pushing more telemedicine for their workers, a trend that has increased during the pandemic.
Additionally, employers have increased their investments in employee health and well-being programs, a trend that was largely spurred by the pandemic and employers’ understanding that their business performance is linked to the health of their workers.
The numbers going into 2021 are squishy because there has been a significant drop-off in the use of medical services in 2020 due to the pandemic. Many people have delayed non-urgent care to avoid the risk of being infected with COVID-19 if they go to the hospital.
Other people with serious conditions have also unwisely decided to forgo care out of fear of getting sick from the coronavirus.
Health care experts are not sure if that means there will be an uptick in utilization in 2021 and think the 5.3% estimate increase in costs will pan out if people continue to put off care, Conversely, if care resumes in 2021, the projected trend may prove to be too low.
Here’s what large employers are expecting:
- Average total health care spending on premiums and out-of-pocket costs will reach $15,500 per worker in 2021, up from $14,769 this year.
- Large employers will cover nearly 70% of costs (premiums), while employees bear the rest. That would mean the average outlay per employee would be $10,850 for the employer and $4,650 for the employee.
Trends
Employers are continuing to address health care costs by focusing on new areas that can improve health outcomes for their workers. The trends that large employers predict would continue in 2021 are:
Continued move towards telehealth services — The use of telemedicine has exploded during the COVID-19 pandemic. Among the survey respondents:
- 76% have made changes to provide better access to telehealth services.
- 71% have boosted the types of telehealth services they offer, such as adding health coaching and emotional well-being support.
- 80% expect virtual health will play a significant role in how care is delivered in the future. That’s compared with just 64% last year and 52% in 2018.
- 52% will offer more virtual care options next year.
- Nearly all will offer telehealth services for minor, acute services.
- 91% will offer online counseling or therapy.
- 29% may start offering virtual care for musculoskeletal issues, like physical therapy for back and joint pain.
Boosting wellness and mental health services — As many as 88% of respondents said they would provide access to online mental health support resources, such as apps, videos and articles. The survey also found that:
- 54% are lowering or waiving costs for virtual mental health services in 2021.
- 27% will reduce the cost of counseling services at the worksite.
Focusing on primary care — More employers are looking at advanced primary care strategies to reduce costs, with 51% saying they will have one at least one such strategy in place for 2021.
This would include contracting directly with primary care providers who can improve the delivery of preventive services, chronic-disease management, mental health and whole-person care.
Addressing high-cost drug therapies — Two-thirds of respondents said they were very concerned with the cost of new million-dollar treatments, just one of which can blow up their health cost budget.
by US Rx Care | Sep 1, 2020 | Uncategorized
President Trump has issued executive orders aimed at reducing the cost of medications by tying Medicare payment for outpatient drugs to international prices, passing drug-maker rebates to patients and not middlemen, and allowing individuals to import prescription medications.
Another executive order aims to force community health centers that receive 340B drug discounts to pass discounts for insulin and injectable epinephrine on to patients.
Here’s a run-down of the orders:
Drug importation
The Executive Order on Increasing Drug Importation to Lower Prices for American Patients calls for new regulations that would:
- Allow individual state health plans to import certain drugs.
- Authorize the reimportation of insulin products that were made in the United States and later exported, and
- Set up a system to grant drug importation waivers for individuals to use at authorized pharmacies.
The system that Trump is proposing is reportedly modeled after new laws that took effect in Vermont in 2018, Florida in 2019 and then Colorado and Maine last year, allowing for the importation of certain prescription drugs from Canada.
Florida’s bill directed the state’s Agency for Health Care Administration to establish a Canadian Prescription Drug Importation Program and an International Prescription Drug Importation Program.
Vermont and Florida have already submitted proposals to the U.S. Department of Health and Human Services to import prescription drugs from Canada, as the president in recent weeks has reiterated his intention to allow states to do so.
Federal law already grants HHS the authority to allow drug imports, as long as the department’s secretary certifies the imported drugs are safe and effective and would lower costs to U.S. consumers.
HHS and the Food and Drug Administration in early August unveiled two pathways that entities could use to import drugs.
Under one pathway, HHS and the FDA would use existing rulemaking authority to allow states, pharmaceutical manufacturers and pharmacists to develop pilot programs to import drugs from Canada “that are versions of FDA-approved drugs that are manufactured consistent with the FDA approval.”
Eliminating secret deals
Another order would prohibit secret deals between drugmakers and pharmacy benefit manager (PBM) middlemen, ensuring patients directly benefit from available discounts at the pharmacy counter.
The Executive Order on Lowering Prices for Patients by Eliminating Kickbacks to Middlemen would pass drug-maker rebates to patients and allow them to apply the rebate to their cost-sharing, such as deductibles in Medicare Part D plans.
The order states that any rebate rule could not be advanced unless the HHS secretary gave public confirmation that it would not raise premiums, taxpayer spending, or out-of-pocket costs.
In particular, the proposed rule would exclude from safe-harbor protection under the anti-kickback statute price reductions that are not applied at the point-of-sale or other remuneration that drug manufacturers provide to health plan sponsors, pharmacies, or PBMs in operating the Medicare Part D program.
It would also establish new safe harbors that would allow health plan sponsors, pharmacies, and PBMs to apply discounts at the patient’s point-of-sale in order to lower the patient’s out-of-pocket costs.
This would be a significant step in getting drug-maker discounts to patients instead of the PBMs. One of the reasons pharmaceutical prices are so high is the complex mix of payers and negotiators that often separates the consumer from the manufacturer in the drug-purchasing process.
The result is that the prices patients see at the point of sale do not reflect the prices that their insurance companies, and PBMs hired by those companies, actually pay for medicines. Instead, PBMs negotiate significant discounts off of the list prices, sometimes up to 50% of the cost of the drug, and often the Medicare patient can never enjoy that discount.
International reference pricing
Another executive order, which hasn’t yet been published publicly, would establish an international pricing index that would set the price Medicare Part B pays for the costliest medications covered under the program to the lowest price in other economically advanced countries.
However, Trump said his administration will hold the order until Aug. 24 because he may not implement it. He said he needs to meet with pharmaceutical executives first.
Epinephrine and insulin discounts
The Executive Order on Access to Affordable Life-saving Medications would require federally qualified health centers to pass along discounts on insulin and injectable epinephrine received from drug companies to certain low-income Americans.
Only patients with low incomes; those with high cost-sharing requirements for insulin or epinephrine; those with high, unmet deductibles; and/or those without health insurance would be eligible for the discount.
What’s next
In all, Trump issued four executive orders that will require the Centers for Medicaid and Medicare Services to draft new regulations, which would likely not be completed by the end of the year. Regulations often take months to draft and then have to be sent out for public comment before final regs are written.
The regulations will likely only come to fruition if Trump wins the presidency for a second term, as any regulatory initiatives in mid-stream would probably otherwise be abandoned.
by US Rx Care | Aug 26, 2020 | Uncategorized
With the coronavirus showing no signs of slowing, health insurance is likely top of mind for your employees. Many of them will be anxious and it’s likely that they will be more engaged and interested in understanding whether their current coverage is sufficient should they be stricken by the virus.
Not only that, but due to social distancing and with many employees working remotely, employers will need to adjust their open enrollment procedures to make sure they are safe, efficient and a success for both them and their employees.
This year in particular, it’s important that you use a multi-pronged approach that keeps everyone informed and safe.
Comprehensive and simple communications
When you are informing your staff about their benefits and open enrollment procedures, make sure you keep things simple. Don’t delve into too many details that are likely to confuse them, but explain the bigger picture and direct them to other documents and information for the detail.
When explaining the benefits and procedures, don’t get bogged down in insurance jargon. Use everyday language, charts, graphs or infographics, checklists and other tools that make absorbing the information easier.
Use many communication media
Many workplaces are multi-generational and different generations prefer different modes of communication, particularly if you have employees who are working remotely due to the pandemic
To make sure you can reach all of your workforce, blast them information using a number of media. And follow up with phone calls to remote staff that don’t respond.
E-mails and e-mail newsletters
E-mails are an excellent way to communicate important information to employees, and to gather information on what they are opening, reading and forwarding.
You can inform them about open enrollment, provide them documentation on the plan offerings and inform them of upcoming web meetings and other important enrollment information.
Web meetings
Hold webinar meetings with videoconferencing to inform your staff about their benefit choices and what, if any, changes are being made to plans going into the new year.
You should focus on the main topics:
- Any increases in health plan premiums,
- Plan changes like deductibles, out-of-pocket maximums, copays, and more,
- Network changes,
- New offerings, and
- Resources to help your workers choose the right plan.
There will likely be many queries about COVID-19 coverage, so be prepared to answer related questions.
During these web meetings, encourage your staff to ask questions and get answers. Record the meeting for employees that are unable to make it, so they can view it on their own time.
You should require all of your staff to either participate in the actual meeting or view the meeting. Set up a virtual sign-up for them to confirm they attended and received all the information.
Offer benefit support
Not everyone is going to be able to wrap their noodle around everything you went over during the web meeting. And plan documents can sometimes be daunting and confusing to someone who is not experienced in your system or is new to the workforce.
Additionally, some of your staff may have questions they are not comfortable asking during a group meeting and that would be more appropriately directed at a benefit counselor. This way, they can talk to someone who can guide them in choosing the right plan for them.
Don’t forget text messaging
Since most everyone has a smartphone on their person or nearby at all times these days, sending them text messages is a sure-fire way to get in front of them.
Use texting to notify staff about open enrollment dates, resources about their benefits, upcoming benefit meetings, contact resources, how to access the enrollment and benefit portal, and who to call for assistance.
Company intranet, enrollment portal
Post all of your open enrollment information on your company intranet if you have one, including links to the open enrollment portal. Every time you communicate with your staff, include the link to the open enrollment information.
This page should have all of your enrollment information, including start and end dates, links or pdfs of all plan benefit guides and plan summaries, contact information of key personal and benefit counselors, as well as all other resources they will need to choose their health plan.
The takeaway
By employing a mixture of all of the above strategies, you can conduct a safe and informative open enrollment that can help your staff choose their plan wisely and also feel comfortable about not catching COVID-19 during the process.
by US Rx Care | Aug 18, 2020 | Uncategorized
While most business owners and executives have been fretting about the COVID-19 pandemic and the effects on the economy and the survival of their business, now is a good time to conduct a review of group health plans in light of changes and new rules for 2021.
Here are some of the main changes that you should consider ahead of the new year:
Out-of-pocket limits – The out-of-pocket limit amounts for 2021 are:
- $8,550 for self-only coverage.
- $17,100 for family coverage.
For HSA-compatible high-deductible health plans, the out-of-pocket limits for HDHPs with attached health savings accounts for 2021 are:
- $$7,000 for self-only coverage
- $14,000 for family coverage.
New preventative care recommendations
ACA-compliant health plans are required to cover preventative care services with no out-of-pocket costs, and new ones that become effective in 2020 and 2021 include:
- Perinatal depression prevention.
- HIV prevention pill for healthy people at risk.
- Updated recommendation for prevention of BRCA 1 and 2-related cancer.
- Updated recommendation for breast cancer: medication use to reduce risk.
- Updated recommendation for hepatitis screening.
- Updated recommendation for screening for unhealthy drug use in adults.
Flexible spending accounts
This year, the IRS issued a notice that increased the maximum allowable amount of unused funds at year end in FSAs that can be carried over to the next year.
The notice increases the maximum $500 carryover amount for 2020 or later years to an amount equal to 20% of the maximum health FSA salary reduction contribution for that plan year. That means the health FSA maximum carryover from a plan year starting in calendar year 2020 to a new plan year starting in calendar year 2021 is $550.
Additionally, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) allows employers to remove restrictions that funds in FSAs, health reimbursement accounts and HSAs cannot be used for over-the-counter medications. This is not a requirement that employers relax this rule for their FSA plans, but it allows them to choose to do so.
Summary of benefits and coverage
There are new Summary of Benefits and Coverage (SBC) materials and supporting documents that must be used for all plans that incept on or after Jan. 1, 2021.
Please remember that any changes to benefits in your group plan must be reflected in the SBC plan document and summary plan description.
The takeaway
2021 is fast approaching and with all the chaos of 2020, it would be wise to get a head start on understanding changes in store for the plans you offer. This would benefit both you and your employees.
