More Changes / Delays to the Employer Mandate

3 Employer Take-a-ways

The administration announced late Monday yet another change-up to one of the major focal points embedded in the Affordable Care Act  –  the employer mandate. Here are the three biggest aspects of the announcement that employers of all sizes need to know:

Employers with 100+ Employees

Employers with 100 or more workers will only have to cover 70% (down from 95%) of eligible employees in 2015 to avoid fines. The original 95% benchmark now goes into effect in 2016 and beyond.

Employers with 50 – 100 Employees

Employers in this category get a reprieve of sorts through 2015 as the mandate is delayed altogether for another year. As things stand today, they must begin offering coverage to eligible employees in 2016 in order to avoid fines associated with the new law.

Employers with fewer than 50 Employees

Under 50 employers (already exempt from the employer mandate to provide coverage) will now be exempt in 2015 and each year going forward from the reporting requirements they were subject to as originally outlined in the new law.

Despite speculation by many, as of yet there have been no changes or reprieves to the individual mandate that went into effect on January 1 of this year. It remains unchanged.

For more detailed information on Monday’s announcement see articles that appeared in the Washington Post and Fiscal Times

For an expert analysis, read Bob Laszewski’s piece at Health Care Policy and Marketplace Review.

No Charge For Preventive Care Services? Verify Up Front to Avoid Out-of-Pocket Costs, Billing Hassles Later

The healthcare reform law requires that most health plans now cover common preventive care services without costing covered employees or their dependents anything out-of-pocket. However, the type of preventive service covered at no charge can be a moving target, especially based on where the service is performed, who performs the service, and how it is billed by the provider.  Correcting preventive care services billed incorrectly by a provider is a real hassle.

A prime example is described in the recent Kaiser Health News article Consumers Expecting Free ‘Preventive’ Care Sometimes Surprised By Charges.

To avoid unwanted and unwarranted charges and the hassles of getting a bill corrected, first verify with your insurance carrier that the service your provider is recommending is a valid preventive care service (covered at a 100% with no associated out-of-pocket cost or copay).  They should also be able to give you the correct billing code that providers should use.  Secondly, and just as important, insist that the provider correctly bill the procedure as preventive.

Keep Your Doctor? Your Preferred Hospital? Do Your Homework Before Selecting A Plan.

With healthcare reform and the Affordable Care Act almost in full bloom, more potentially game-changing unintended consequences are starting to emerge.  One such consequence stems from the introduction of “narrow networks.” Initially intended for healthcare.gov or Exchange based products, most carriers have utilized the narrow networks to round out the low end of their 2014 individual and employer sponsored group plan offerings.

Employers changing plans in 2014 will have to pay closer attention to network selection. Or, potentially pay the price when you or your employees learn that preferred, familiar, closest and, in some cases, the best doctors and hospitals may not be in your plan’s network.

Until now, network size has not been a huge determinant in selecting carriers and plans. Most of the major insurance companies in the group market provided access to a vast selection of doctors and hospitals, especially those providers with the best reputations. With the advent of the Affordable Care Act and its impact on rate structures, benefits, and plan designs, carriers have less discretion on plan designs and rate setting. As a result, they are turning to these “skinnied” down networks as a primary means to manage costs, differentiate, and vary premium across their respective plan offerings.

In order to gauge the impact, I checked the online directories of two of the major group health plans in one large county in the Tampa Bay market where I reside. While decidedly informal and unscientific in nature, it nevertheless highlights the contrast.

I compared a few key categories of each respective carrier’s heretofore “staple” network (still offered; higher rates than the narrow network plans) against the new skinnier network offering (newly offered; lower rates than staple network plans). In both cases the “staple” networks contained a significantly greater number of providers, were described as open access, and did not require referrals. The new skinnier networks offered fewer participating providers, required designation of a Primary Care Provider (“PCP”), and required PCP referrals to obtain other services.

In comparing several categories of specialists, the narrow networks were on average comprised of about 50% fewer specialist physicians than the traditional networks.  However, the biggest difference between the customary networks and the newer narrower networks came when comparing participating PCPs and hospitals.  Here’s the breakdown:

Carrier 1

Carrier 2

OA Network

Narrow Referral-Driven  Network

OA Network

Narrow Referral-Driven  Network

Primary Care

1280

227

1300+

325

Hospital Primary and Secondary

12

3 (includes 1 major)

18

10 (includes 1 major)

We’ll be monitoring further developments, reporting more on this issue in future posts as well as discussing practical alternative strategies to this growing cost vs. access issue (eg. direct contracting, plan customization, buying a lower cost plan and supplementing, etc.).

In the meantime, what can you do?

When it comes to changing to new plans, look before you leap.  Or, at least plan on doing some homework.

To read more about this topic go to these recent articles in the Washington Post, Insurers Restricting Choice of Hospitals and Doctors to Keep Costs Down,” and at Health Care Policy and Marketplace Review, If You Like Your Doctor You Will Be Able to Keep Your Doctor. Period.”

Where Are Our Healthcare Dollars Being Spent?

Quite often in the course of working with our clients on practical and innovative approaches to lower their healthcare costs or mitigate pending increases, we are asked two questions:

“Why is healthcare so expensive?” And “where is the money going?”

The first question is so hugely complicated there may not be enough bandwidth on the internet to analyze it and address it in writing. The second question was addressed in a recent study published by the Agency for Healthcare Research and Quality and related in easier to read fashion in a joint Kaiser Health News/Washington Post article.

While this is really big picture stuff, in answering the question on where the money is being spent, they present some interesting (perhaps only to analytical geeks like me) and startling facts worth taking a moment to contemplate:

  • In 2010, Americans spent @ $1.3 TRILLION on healthcare (This addresses direct payments for care provided during the year.  It jumps to $2.8 TRILLION when you include health care goods and services, public health activities, government administration, the net cost of health insurance, and investment related to health care).
  • 1% of the population accounted for 21% of the $1.3 TRILLION spent.
  • 5% accounted for 50% of all healthcare expenditures.  And, 10% are credited with 66% of the healthcare spend.
  • Contrast that with the 50% of the folks in the U.S. that accounted for less than 3% of the costs.

Our BBG world is micro and hyper-intensively focused on helping mid-size and small employers control costs and improve outcomes one employer at a time. We can’t even begin to suggest we know where the big picture solution lies. That’s for folks a lot smarter and better equipped. It does appear clear however, even to this lay person, that to put a dent in this ever growing cost curve, the lion’s share of the resources and efforts must laser focus on solving the 5% accounting for 50% cost equation…

For more on the study or the article, go here:

http://meps.ahrq.gov/mepsweb/data_files/publications/st421/stat421.shtml

And, here: www.kaiserhealthnews.org/stories/2013/october/08/one-percent-of-costliest-patients.aspx

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