Benefits a Key Recruiting Tool for Small Business

In spite of major changes in the health care landscape, small-business owners looking to recruit and retain top employees still need to pay close attention to their benefits offerings. According to the 2015 Aflac WorkForces Report for Small Businesses, which was released this month, a majority of workers employed in small businesses are willing to consider a job with slightly lower pay but better benefits, while half of potential job changers say improving their benefits package could help their employer keep them.

"The Affordable Care Act has enabled more Americans to obtain health care benefits, but it has not reduced the overall costs or the health care concerns of the majority of employees," said Aflac Senior Vice President and Chief Human Resources Officer Matthew Owenby. "Offering robust benefits, including major medical and voluntary insurance, remains an important factor for small businesses to keep employees happy while increasing growth opportunities."

With the U.S. Bureau of Labor Statistics' July 2015 unemployment rate at 5.3 percent, small businesses realize the battle for talent is getting tougher. As a positive sign of their hiring ambitions, the Aflac study found more than one-third (34 percent) of decision-makers expect to hire full-time employees, while 28 percent believe they will hire part-time employees in the next 12 months. Continuing to offer benefits to recruit and retain employees is important to meeting workers' preference for strong benefits packages.

According to the study, almost six in 10 (59 percent) of workers at small companies are at least somewhat likely to accept a job with slight lower pay but better benefits. Nearly half (49 percent) of small-business employees who at least somewhat agree they will be looking for jobs in the next year also say improving their benefit package is one thing their employers could do to keep them in their current jobs.

Small-business owners appear to be listening. While a top business objective in 2015 continues to be controlling costs, the new study found the percentage of small-business employers offering voluntary insurance to employees increased from 18 in 2014 to 22 percent in 2015. Compared to those not offered voluntary benefits at work, the Aflac study found small-business employees enrolled in voluntary benefits are more likely to be very or extremely satisfied with their jobs and their overall benefits packages and more likely to believe the benefits package offered by their employer meets their family needs well.

Premiums and Physician Access Important for Buyers

When choosing a health plan, insurance premium cost is the top concern for younger health care shoppers (under age 45), while in-network access to their preferred doctors ranks higher with older consumers (age 45 and over), according to a 2015 FAIR Health survey of more than 1,000 adults in the United States. 

The latest survey also found that while older consumers place access to their doctors at the top of the list, all age groups are more concerned about whether specific doctors are included in their plan's network, as compared to the overall network size. This feedback comes at a time when more employers and health plans are introducing narrow and tiered networks in an effort to reduce health care costs. Consumers also have increasing health plan choices due to the growth of both public and private health care exchanges.

"The FAIR Health survey shows that while consumers did not list the number of doctors in the network as a prime consideration when enrolling in a health insurance plan, if the primary care doctors consumers prefer are not in their network, it will factor into their decisions when selecting a plan," said Robin Gelburd, president of FAIR Health, an independent, not-for-profit committed to bringing transparency to health care costs and information. 

According to the FAIR Health survey, Latinos, women, adults younger than 45, low-income households, and people with children in their households are the most likely to say cost usually or always influences their decisions when choosing a doctor. Most Latinos (63 percent as compared to 48 of the general population) say they usually or always consider costs. More than half (56 percent) of consumers with children in their household say they usually or always consider cost. This compares to 45 percent of respondents without children at home. For respondents with an annual household income below $35,000, 60 percent said they always or usually consider cost, as compared to 48 percent of the general population.

"Consumers consider a number of factors when they choose a doctor, including cost, quality, proximity, and convenience," said Gelburd.  "When we isolate cost, there are significant differences in selection criteria along gender, age, and socio-economic lines.  It will be interesting to see how these trends develop as more consumers become familiar with online cost estimators, quality indices, and health care literacy tools available to help them comparison shop for health care."


Agenda Filling Up for California Lawmakers

The California legislature returns this week and faces a debate over proposed health care changes, including new provider directory requirements, a flat tax on managed care organizations, increased tobacco cessation assistance for Medi-Cal beneficiaries, and premium review by regulators.

Introduced by Assembly Member Mark Levin (D-San Rafael), the proposed new flat tax on managed care organizations would go toward medical care for the state’s underprivileged. Each health plan operating in the state would be charged $7.88 per enrollee, generating $1.8 million each year. The money would fund Medi-Cal, the medical assistance program serving low-income Californians, and pay for more hours of in-home care.

The centerpiece of the Levin proposal is a remake of an existing tax the Obama administration has said the state must change or risk losing as much as $1 billion in federal matching funds. The legislator has attached two provisions he hopes will garner the required bipartisan support: higher Medi-Cal reimbursement rates for doctors and increased funding of services for the developmentally disadvantaged – a group that advocates say has not recovered from pre-recession cuts.

Assembly Bill (A.B.) 1162, introduced by Chris Holden (D-Pasadena), requires Medi-Cal managed care plans to pay for tobacco cessation drugs. It is designed to help smokers quit by expanding the available FDA-approved medications and providing stop-smoking counseling programs.

Senate Bill (S.B.) 137, introduced by Ed Hernandez (D-West Covina), would require health plans and insurers to post accurate health care provider directories on the Internet and to update the listing weekly. Proponents say the change would make it easier for consumers to learn if their doctor is part of a provider network before selecting a health plan. It also requires directories to indicate if a doctor or staff member speaks any languages other than English.

Another proposal, S.B. 546, introduced by Senator Mark Leno (D-San Francisco) requires health plans to submit large group policies and rates to the Department of Managed Health Care (DMHC) and Department of Insurance at least 60 days in advance of any rate change to allow for review of premiums. 

Health Care Benefit Cost Forecast to Hold Steady in 2016

Large employers are expecting health care benefit cost increases to hold steady in 2016, due in large part to changes they are making to benefit programs. That’s according to the latest annual survey by the National Business Group on Health, a non-profit association of large employers in the United States. The group’s membership of more than 400 employers includes AT&T, The Boeing Company, Coca-Cola Enterprises, Comcast Corporation, CVS Health, Dell, FedEx, General Mills, General Motors, IBM Corporation, Lowe’s Companies, Wal-Mart, dozens of other Fortune 500 companies, and public sector employers.

According to the trade group, employers are projecting their health care benefit costs will increase six percent in 2016, the same increase businesses would have experienced this year had they made no changes to their plan design. However, many employers expect to keep increases to five percent for the third consecutive year by making further plan changes, such as increasing cost-sharing provisions, adopting consumer-directed health plans (CDHPs), or expanding wellness initiatives. Thirty-three percent of survey respondents said they would offer only a high deductible health plan in 2016, up one percent from 2015. Conducted in June, the NBGH survey results are based on responses from 140 of the nation’s largest employers.

Nearly half of large employers surveyed say if they do not take additional measures to control costs, at least one of their health plans will reach the threshold that triggers the Affordable Care Act’s “Cadillac tax,” which goes into effect in 2018. The 40 percent excise tax is imposed on the costs of health plans that are above the $10,200 benefit threshold for individual coverage and $27,500 for family coverage.

According to the Kaiser Family Foundation, the average individual health plan cost $6,000 in 2014, while the average family health plan cost was $16,800. If an employer were to offer a family a benefit package valued at $30,000 beginning in 2018, the 40 percent excise tax would apply to the $2,500 above the family benefit threshold of $27,500.

Wellness Plan Awareness Low Among Employees

While the 2015 Society of Human Resource Management (SHRM) Employee Benefits Survey, which we reported on last month, showed 70 percent of employers are offering wellness benefits, employee awareness is low. That’s according to the Brodeur Health and Wellness Survey of 542 adults that found only 34 percent of employee respondents said their employer offers a wellness program.

"Clearly, there's a disconnect," said Brodeur Partners CEO Andrea Coville. "Either employees aren't getting the memo about the programs that exist in their workplaces, or they don't consider what their employers are offering to be true wellness programs. Companies need to communicate clearly, aggressively, and creatively about what they're offering and how the programs can enhance their employees' well-being."

The new findings support other research documenting a disconnect for workplace wellness communications. While more than 85 percent of companies with more than 1,000 employees offer a wellness program, a Gallup poll found only 60 percent of U.S. employees are aware their company offers one.

Lack of awareness is not the only explanation for an employee indicating their company lacks a wellness program. Sometimes there is no program – and that likelihood seems to increase with an employee's age. Only 32 percent of those age 35 to 54 and only 24 percent of the 55-plus segments indicated they had a workplace wellness program compared to more than two in five millennials (those ages 18 to 34).

As good as employee wellness programs can be – offering health risk assessments, help managing chronic conditions, and coaching for a healthier lifestyle – some employees still resist. The reasons given by respondents to the Brodeur survey include privacy concerns (50 percent), doubt that such programs would be helpful to them (31 percent), and lack of confidence in an employer's ability to run an effective program (19 percent).

Only One State Still Has More Than 20% Uninsured

Five years after the Affordable Care Act (ACA) was signed into law by President Obama, and as we approach the two-year anniversary of the first open enrollment period under the ACA, the number of Americans who are uninsured continues to decline. According to a new Gallup poll released last week, the uninsured rate in the United States fell from 17.3 percent in 2013 to 11.7 percent in the first half of 2015.

While there were 14 states in which more than one in five adults lacked health insurance two years ago, today only Texas has an uninsured rate exceeding 20 percent. The Lone Star State, which has strongly resisted implementation of the ACA, had the highest percentage of residents who lacked insurance before the law took effect, 27 percent, and today its uninsured rate is 20.8 percent according to Gallup.

A review of the survey results shows just how quickly things have changed for the uninsured in the U.S. since the ACA became law. Gallup polled more than 178,000 adults in 2013, before the new health insurance marketplace was opened for business, and nearly 89,000 were surveyed in the first half of 2015. Among the states with the most dramatic shift in the percentage of uninsured residents was Arkansas, with 22.5 percent uninsured in 2013 and 9.1 percent uninsured in the first half of this year. Kentucky reported 20.4 percent uninsured in 2013 and nine percent uninsured in 2015, while Oregon had an uninsured rate of 19.4 percent two years ago and 8.8 percent in the first half of this year. California went from 22 percent without insurance in 2013 to 11.8 percent this year.

In the first half of 2015, there were seven states where the uninsured population was at or below five percent: Rhode Island, Massachusetts, Vermont, Minnesota, Iowa, Connecticut, and Hawaii. From 2008 through 2014, only Massachusetts had a similar rate, after implementing its own state health reform law in 2006. 

Insurer Paying Members to Compare Pricing

A Michigan health insurance company is now offering its members an incentive to shop around and compare the costs of medical treatment. Priority Health, which operates from its headquarters in Grand Rapids and serves more than 600,000 people, announced in July that it will begin rewarding its members who use the company’s cost-estimating tool to select a fair-priced medical procedure.

Members with individual health coverage or employer-sponsored coverage can earn rewards ranging from $50 to $200. The Priority Health rewards program includes more than two dozen diagnostic, imaging, cardiac, outpatient, women’s health, and bone and joint procedures. Among the rewards are $100 for a colonoscopy, $100 for a sleep study, $100 for most MRIs, $200 for cataract surgery, $200 for a Cesarean section delivery, $200 for a breast biopsy, $200 for a total hysterectomy, and $200 for total knee replacement. Each reward is to be paid via a Visa gift card.

“These are very expensive procedures and providing them [members] $200 back on a $4,000 procedure just makes good business sense,” said Priority Health Chief Marketing Officer Joan Budden, in an interview with WOOD TV in Grand Rapids.

The health policy journal Health Affairs reported in June that many patients in the United States are purchasing services while unaware of their cost, which sometimes leads to paying 10 times more for common procedures than the amount paid by Medicare, which sets prices for medical services. In the publication’s survey of 50 hospitals with the highest price markups, researchers found some facilities were increasing their prices by as much as 1,000 percent over the actual costs. The analysis said even for those with health insurance, choosing the wrong hospital could drive up the costs by tens of thousands of dollars.


Consumers Confused by HSAs and HRAs

A new report from Towers Watson’s SaaS technology and services provider, Acclaris, finds a clear lack of consumer knowledge about consumer-driven health care accounts -- especially health savings accounts (HSAs). Based on a survey of more than 300 health care industry professionals, Acclaris found a clear lack of consumer knowledge about consumer-driven health care accounts -- especially health savings accounts (HSAs). The Acclaris Consumer Education Survey Report measured the current consumer climate for HSAs, health reimbursement accounts (HRAs), and flexible spending accounts (FSAs), while also exploring the challenges and opportunities for consumer education initiatives.

"Consumers are still extremely confused about consumer-directed health plan options and when or how to best use the funds in those accounts -- especially when it comes to HSAs. The call for improved consumer education is clear," noted Dean Mason, CEO of Acclaris. "Employers need to ensure that employees understand how to make the most of their benefits. This can only be done via continuous, high-touch engagement throughout their health care journey -- empowering consumers with the knowledge they need to make smart health care finance decisions that will affect them during their working years and throughout retirement."

According to the report, health care professionals think consumers still have an extremely limited understanding of health savings and reimbursement accounts. The majority of respondents have no confidence in the average consumer's understanding of HRAs, HSAs, FSAs, etc., with 64 percent rating understanding as "mediocre" and another 28 percent rating understanding as "poor." HSAs continue to be the most difficult account type for consumers to understand according to 40 percent of respondents, trailed by HRAs at 27 percent.

Awareness, however, was not the issue, according to the survey. Just 20 percent noted lack of awareness as the biggest barrier to adoption, whereas the majority (62 percent) cited lack of education as the real culprit. More than 32 percent of respondents reported understanding when an HSA can or should be used. Respondents also cited understanding which expenses are reimbursable (20 percent) and knowing when to use health care accounts (18 percent) as critical gaps for consumers.

Exchange Users More Savvy Health Care Shoppers

People shopping for health insurance through the public exchanges show signs of being more savvy shoppers than the average health insurance buyer, according to a new report by the Deloitte Center for Health Solutions.

The study, “Public Health Exchanges – Opening the Door for a New Generation of Engaged Health Care Consumers,” looked at individuals who bought insurance through a public health insurance exchange and compared their experience to those getting coverage through their employer, Medicare, or Medicaid. Deloitte found that public exchange enrollees better understand their benefits and costs and are more likely to compare providers and services on price and, to some extent, quality. The report also says exchange participants are more willing to change plans – which means health plans have to continually woo those customers based on price, product, and service.

“The signal here is that the exchanges are not only attracting more individual purchasers into the system, but people who may be bringing a shopper’s mindset,” said Gregg Scott, principal, Deloitte Consulting LLP, and vice chairman and national sector leaders for the health plans practice. “This could be another force that pushes health care to a more customer-centric model, one that runs on information, transparency, customer service, and disruptive delivery models.”

Deloitte’s study found 51 percent of surveyed exchange participants used an online tool to compare and negotiate prices among doctors and hospitals. That numbers surpassed the 45 percent of those with employer-based coverage and 36 percent on Medicare who used a comparison tool. Similarly, 63 percent of exchange buyers used an online tool to learn how much their plans would pay for services, in contact to 53 of those with employer-sponsored coverage and 51 percent of Medicare beneficiaries.

When it comes to their health plan coverage, just one-third (30 percent) of exchange participants are satisfied with their current product. That compares to 42 percent with employer plan coverage and 58 percent of those on Medicare.

“Satisfaction Gap” Narrowing for Health Plans

A new report by the Employee Benefit Research Institute (ERBI) finds a narrowing “satisfaction gap” between traditional health plans and so-called consumer-driven and high-deductible health plans. The latest ERBI/Greenwald & Associates Consumer Engagement in Health Care Survey finds traditional plan enrollees more likely than consumer-driven health plan (CDHP) and high deductible health plan (HDHP) participants to be extremely or very satisfied with their overall health coverage. Sixty-one percent of traditional plan enrollees were highly satisfied as compared to 46 percent of CDHP enrollees and 37 percent of HDHP enrollees.

While the most recent survey shows the highest satisfaction among traditional plan enrollees, it also reflects a narrowing gap in satisfaction for participants in other plans. The first survey in 2006 showed 37 percent of CDHP enrollees and 29 percent of HDHP participants were satisfied or extremely satisfied with their coverage. Since 2011, the satisfaction trend is up for all three types of coverage.

Not surprisingly, the main problem for CDHPs and HDHPs is out-of-pocket costs. For people enrolled in traditional plans, 48 percent were extremely or very satisfied with the amount they had to pay out of pocket for health care services, excluding prescription drugs. For those in a CDHP, just 26 percent were extremely or very satisfied, while only 19 percent enrolled in a high deductible plan were happy about their out-of-pocket costs.

As far as quality of care goes, 68 percent of traditional plan enrollees were extremely or very satisfied with the care they received; that compares to 66 percent of CDHP plan participants and 56 percent of those enrolled in an HDHP.

Sixty-six percent of people enrolled in a traditional plan said they were extremely or very satisfied with their ability to get a doctor’s appointment when they needed one. That view was also shared by 65 percent of CDHP members and 54 percent of HDHP enrollees.

The Employee Benefit Research Institute is a private, nonpartisan non-profit focused on health, savings, retirement, and economic security issues. Members and sponsors, including a broad range of public, private, for-profit, and non-profit organizations, fund ERBI’s work.