How to satisfy ACA guidelines without breaking the bank on your health plan

Certain employers don’t offer health coverage for their personnel because they can’t afford traditional employee benefits, whether it’s self-funded or fully insured.

At the same time, under the Affordable Care Act (ACA), many of those same employees work on average more than 30 hours per week and are considered full-time employees that companies need to offer benefits to — or face the employer mandate penalties.

In order to help fill this gap, third-party administrators (TPAs) and stop-loss carriers rolled out minimum essential coverage (MEC) and minimum value plans (MVP), says Abbe Mitze, account executive II at HealthLink.

“It’s an employer solution for satisfying the guidelines for not having the fines or excise tax imposed, a $2,000 or $3,000 penalty,” Mitze says.

Smart Business spoke with Mitze about MEC and MVP plans and the solutions they provide.

What exactly are MEC and MVP plans?

MEC only includes preventive care and wellness benefits. Applicable large employers can offer self-funded, low-cost MEC plans in order to avoid the $2,000 penalty. This penalty requires these large employers to provide group health insurance to ‘enough’ — a certain percentage of the total — of its full-time employees and dependents.

MVPs refer to the need to have a comprehensive health insurance plan with at least 60 percent actuarial value. In other words, the plan needs to pay at least 60 percent of the costs of claims submitted. These plans help employers avoid the $3,000 penalty for each employee who buys insurance through the government exchange.

Which companies would be a good fit for these types of plans?

Typical clients that would be in the market for this would be restaurants, hair salons, nursing homes, large car dealerships, etc. Basically, organizations that have low-paid employees who are borderline full time/part time could benefit.

For example, a company that rents out security officers to different organizations might have previously had a health plan carve-out that covered managers only and not their other 1,200 employees, who are now considered full time under the ACA. If they can’t afford a traditional employee benefit plan or to pay the penalties and fines, a MEC or MVP would be a good option.

Have MEC and MVPs been around long? What has been their history?

These plans were first rolled out in 2013. Most of them didn’t include hospital coverage because it wasn’t listed as an essential covered item.

However, last November, the government said that these plans needed to provide essential hospitalization coverage, but didn’t define what this actually looks like.

The TPAs and stop-loss carriers added hospitalization coverage — which isn’t as comprehensive as the traditional coverage in other health plans — and put these solutions back on the market.

This is important timing because the number of organizations that will be subject to the employer mandate, and more importantly the penalties and fines, is increasing in 2016.

If employers want to explore the possibility of getting MEC and MVPs, what else do they need to know?

You want to have a reputable broker that can educate you because it’s a new frontier. The plan requirements have already changed once, so you need someone who can stay on top of this, in case the government makes additional changes.

In addition, it’s important to make sure you’re looking for a standard plan, where all components of the benefit design fit into the actuarial calculator. MEC and MVPs come as both standard and nonstandard plans, but a certifiable standard plan is one that will hold up against the IRS and its fines.

Again, that’s why it’s important to consult with experts who can help you navigate through new territory.

Insights Health Care is brought to you by HealthLink

How to weigh the pros and cons of self-funded vs. fully insured health plans

For companies that must deal with how best to handle health insurance costs, there’s a decision that needs to be made fairly early in the process. Should a company choose to be fully insured, or should it opt to be self-insured?

“Choosing the right kind of health plan is an important part of the success and growth of a company,” says John Mills, senior director of consumer products at UPMC Health Plan. “There are a lot of misconceptions about which plans are right for which kinds of companies and you have to look at all the evidence before you decide.”

Smart Business spoke with Mills about the advantages and disadvantages of self-funded and fully funded plans for companies large and small.

What is the difference between self-funding and fully insured?

The traditional definition of self-funding is when a company pays for its own medical claims directly, usually while a third-party administrator (TPA) processes claims, issues ID cards and performs the function of a health plan.

In contrast, when a company chooses to be fully insured — the more common option for smaller businesses — the company pays a set premium price to the carrier that is fixed for the year and is based on the number of employees enrolled each month. The insurance company assumes the financial and legal risk of loss if claims exceed projections.

Can small companies afford to be self-funded?

Companies with fewer than 250 employees are often afraid that they will be exposed to too much risk with a self-funded plan.

However, smaller companies can still afford to be self-funded because they can purchase stop-loss insurance, which limits the amount of claims expenses an employer would be liable for, per covered employee, per year. This protects a company against some sort of catastrophic event involving one or more employees. Stop-loss insurance reimburses an employer’s health plan for claims above a pre-set limit.

What are the advantages of self-funding?

The most obvious advantage is paying for actual claims incurred by your employees. This means there is no chance of being ‘penalized’ if your employees in a given year use fewer medical services than had been anticipated. Any positive results that come from a company instituting wellness programs and smoking cessation campaigns can have a direct result on the bottom line.

Also, a company can easily obtain a company-specific claims report that can reveal, for instance, what percentage of claims are out-of-network, and how much is being spent on emergency room visits. This kind of information can provide direction when it comes to customizing benefit changes.

What are the advantages of fully funded plans?

Cost certainty is a major one. You know at the beginning of the year what will be your health care costs and they remain in place until a new deal is struck. Also, the health insurer assumes all of the risk and the company is spared any exposure.

What are some disadvantages to self-funding?

Self-funded plans that greatly exceed anticipated costs can create problems. Although stop-loss coverage can protect an employer from paying excessive claims in a given year, after a major incident, the cost of the stop-loss coverage the company purchases is likely to rise. It may also be more difficult to get lower rates from other stop-loss providers.

Moreover, higher-than-expected claims in self-funded plans can make it more difficult to return to a fully funded plan later. And, any organization that chooses to run a self-funded plan internally, rather than use a TPA, can run up higher-than-expected administrative costs.

Self-funding is not a quick fix and savings are not always guaranteed or immediate. In order to make a good decision, you need to study past coverage utilization, cash flow and the health status of the employees being covered.

Insights Health Care is brought to you by UPMC Health Plan

How to empower employees to manage their health care spending

With the move toward consumer-driven health care, organizations are seeing their employees become more aware of the cost of medical care. While the approach has proven effective in reducing spending for some, others are still leery of changing their benefit structure.

“Normally, people will pay a set amount in annual premiums,” says Veronica Hawkins, Medical Mutual vice president of Government Accounts. “But when your employees spend more on premiums each year than they do on medical care, consumer-driven health care may be something to consider.”

Smart Business spoke with Hawkins about what defines consumer-driven health care, how the options generally work and under what circumstances it might be right for your organization.

What is consumer-driven health care?

It refers to health plans that give employees greater control over their health care spending and helps them be better consumers.

Typically, consumer-driven health care involves a combination of a tax-free savings account, such as a health savings account (HSA) or a health reimbursement arrangement (HRA), and a high-deductible health plan. Flexible spending accounts (FSAs) are another option, which employees can use along with an HSA or HRA as an added benefit.

The high-deductible plan covers some costs upfront. Employees pay for other medical expenses using money that’s been set aside before taxes. This encourages them to manage and keep track of their own health care — and take responsibility for how those dollars are spent.

How does an HSA generally work?

With a compatible high-deductible health plan, eligible employees can open and start funding an HSA. These accounts are usually funded through payroll deductions and employees and employers can both contribute. With an HSA, there are no taxes on deposits or interest, or on withdrawals employees make for approved medical expenses.

Employees just have to make sure they use the money in their account to pay their portion of the costs. Any remaining balance at the end of the year rolls over automatically, with no penalty.

How does an HRA work?

An HRA is a tax-free arrangement that is owned and funded by the employer. HRAs are classified as ‘notional’ accounts, meaning the organization only contributes money to the account when they receive claims for approved medical expenses. The most popular HRAs are the ones that fund a portion of an employee’s deductible, but employers also have a say on which medical expenses they will reimburse.

Generally speaking, any money that’s left at the end of the benefit year won’t roll over to be used in later years.

What about FSAs?

There are several different types of FSAs. There is a health FSA, limited-purpose FSA that is usually for dental or vision care, one for dependent care expenses, one for adoption assistance, and one for parking and transit expenses. Similar to HSAs, employees fund FSAs through pre-tax payroll deductions.

While any money left in the account at the end of the year is forfeited, organizations have the option to offer a grace period of 2½ months or let employees carry over up to $500 into the following year.

What else should organizations know?

There are a lot of variables involved in consumer-driven health care, but it all boils down to empowering employees. When employees understand the cost of an office visit, a lab test or a monthly prescription, they are able to become better consumers of health care and are more likely to engage in healthy behaviors.

But just like any change in your organization, education is critical. Because once employees are responsible for funding their own health care, they need to feel confident that they can pay for what they need.

Insights Health Care is brought to you by Medical Mutual

How to educate your employees about their cholesterol levels

While most employers would certainly consider the safety of their employees a priority, it may not occur to as many of them to be concerned about their employees’ cholesterol level.

But, if you take an objective look at what kinds of problems high cholesterol can create for employees — and, by extension, for employers — it makes a lot of sense.

“Lowering the cholesterol of employees should be a priority for employers,” says Debi Vieceli, RN, a Cardiac Care manager for UPMC Health Plan. “Informing employees about the dangers of high cholesterol and what they can do to manage cholesterol levels is something all employers need to consider.”

Smart Business spoke with Vieceli about cholesterol and what employers can do to educate their employees about how to lower it.

Why should employers be concerned about employees’ cholesterol?

According to the Centers for Disease Control, 71 million Americans have high LDL, or ‘bad’, cholesterol and roughly one-third of those get treatment for it.

The diseases that are connected with high cholesterol tend to be more serious, even potentially fatal. High cholesterol levels can lead to heart disease, heart attack and stroke. In fact, the higher the blood cholesterol level, the greater the risk for heart disease and heart attack.

Education about the danger of high cholesterol is important because there are no outward, obvious symptoms.

Moreover, if you have high cholesterol, there are things you can do to change that. Because high cholesterol affects everyone — old, young and in-between, women and men — it is likely a part of every company’s workforce.

What are some approaches an employer can take to help lower the cholesterol of employees?

One approach many employers use is creating fun events that place emphasis on healthy lifestyle choices. A company ‘weight race,’ for instance, is a popular option because it enables employees to set reasonable weight-loss goals. So, too, is a fitness challenge that encourages employees to exercise by participating in sports leagues.

Companies also can encourage physical activity by offering to pay for gym memberships for employees.

Because eating an unhealthy diet is a contributor to high cholesterol, employers can encourage healthier eating through the choices that are provided in workplace cafeterias and vending machines. At catered meetings, the food offerings should include healthy choices.

When you increase your employees’ opportunities to eat healthier, you increase the likelihood that they will.

Can an employer encourage healthy behavior?

Workplace policies have been shown to be able to promote a culture of good health. One important policy that is sometimes overlooked is offering a health benefits plan that allows employees to have regular visits with their physicians.

The sedentary lifestyle connected with the modern workplace also contributes to the development of serious health issues. That’s why creating an exercise area for employees can be a positive, if this is a possibility.

How else can employers take steps to address their employees’ cholesterol issues?

Periodic blood cholesterol screening and health risk assessment programs at the worksite are two ways to identify employees with high cholesterol and help them begin to control it.

One-on-one coaching and lifestyle coaching can also be effective ways to follow up with employees identified as having high cholesterol.

In addition, informational brochures, letters and newsletters can supplement the lifestyle coaching.

Insights Health Care is brought to you by UPMC Health Plan

How to increase participation in health screenings, encourage preventive visits

Today, more organizations are adopting the motto “prevention is better than a cure” when it comes to the health of their employees. Unhealthy lifestyle choices are linked to the majority of employer health care costs and, according to studies, often have a dramatic impact on productivity.

“At most organizations, employees understand the benefits of preventive care and want to know their risk factors,” says Amber Hulme, Medical Mutual Vice President, Central and Southern Ohio. “But they also might need a push, which is why it’s still a challenge to get employees engaged.”

Smart Business spoke with Hulme about the importance of preventive care and health screenings, why employees may be reluctant to participate and what organizations can do to incentivize employees to focus more on prevention.

Why is preventive care important?

By promoting preventive care, organizations are making sure their employees have a baseline for their health. This will help them be more aware of potential problems, get diagnosed earlier and avoid more serious health conditions.

When employees are aware of what’s going on with their body and can stay healthy, they are able to come to work more often and be more productive.

How can health screenings help?

Health screenings measure key physical characteristics, such as height and weight, body mass index, blood pressure, blood cholesterol and blood sugar. Over the past several years, organizations have started introducing workplace health screenings as a way to evaluate the overall health of their employees and identify the biggest risk factors.

They also give organizations the information they need to work with their health insurance carrier to better address the specific needs.

Health screenings, however, are definitely not a replacement for regular medical examinations or wellness visits with a health care provider. They are also not intended as a way to diagnose disease.

Why are employees sometimes reluctant to participate?

There are many reasons. But one of the most common is a fear of exposing personal health information and not understanding how it will be used. Employees also may believe the information will be used against them later, and they might be subject to consequences, penalties or discrimination.

In addition, employees could just be more comfortable going to their own doctor. In those cases, organizations can choose to incentivize annual physicals wherever the employee wants to go. That way, the employee sees their doctor and gets the same tests, but their employer doesn’t see the results and the organization still has proof that it happened.

What types of incentives do organizations use?

It depends on the organization. Today, the majority of employers in the U.S. offer employees some sort of wellness incentive. Monetary incentives have become the most common.

Under health care reform, organizations can offer incentives worth up to 30 percent of the total annual cost of individual coverage. That could mean contributing to a health savings account, discounting premiums or waiving their cost-sharing responsibility, which refers to their deductibles, copays and coinsurance.

Paid time off is another popular incentive, particularly in the public sector.

What else is important to know?

Education and effective communication is the key to help employees get past any concerns they may have, especially if those concerns involve their personal health information.

It’s also important to create a culture of health, regardless of whether you offer an incentive or how much it is.

When employees feel like they are in it together, they share their experiences, like losing weight or getting an early diagnosis that might save their life. Those kinds of personal messages, from people they know, can be powerful motivators.

When employees start encouraging each other to be healthier, that becomes an incentive in itself.

Insights Health Care is brought to you by Medical Mutual

How using a three-tier network strategy can contain health care costs

Traditionally, health insurance employee benefits have two tiers — in-network and out-of-network. But in self-funded solutions, in particular, you may have the ability to set up a three-tier benefit design.

This network strategy can help you contain cost by incentivizing and channeling your employees to lower cost facilities and doctors, says Abbe Mitze, account executive II at HealthLink.

“By influencing your employees’ behavior in a non-disruptive way, you’re using the carrot approach versus some type of punitive measure,” Mitze says. “And I’ve seen an example where a 30 percent shift occurred while employees were seeking care when this type of arrangement was introduced to them over the course of a year.”

Smart Business spoke with Mitze about setting up a three-tier benefit design.

Why is it so important to try to contain health care costs?

Health care premiums continue to increase for the 55 percent of firms that offer health benefits to at least some of their employees. The annual survey of employers by the Kaiser Family Foundation found that annual premiums for employer-sponsored family health coverage reached $16,834 in 2014, which is up 3 percent from the year prior. Of that amount, workers paid $4,823 on average toward that cost.

If employers want to continue to offer health plans — which can be used as a recruiting tool — they must find ways to better manage their costs.

How does a three-tier benefit design work?

A three-tier option introduces in a third tier of benefits that is based upon the cost of care with the facility or provider. A facility and provider is placed into tier I if it is a lower cost option, tier II if it costs a little bit more and then tier III is out-of-network.

Then you take the benefit design and pair that with the cost. The richest benefit option — where the employee is going to pay the least out of their pocket — is applied to tier I.

If you want to introduce this type of design typically you’re coming from a two-tier benefit network design, so tier I becomes a better benefit than employees currently have today. Tier II is the current in-network benefit level, and tier III remains out-of-network.

People can be attached to their doctors, so that’s why you let them keep their current benefit. Employees still have a choice and have access to the full network, but you reward them for going to the most cost effective providers.

In what situations does this kind of benefit design work best?

A three-tier design is important in a self-funded solution because the dollars that are being paid out for claims are the employer’s dollars. Your third-party administrator or carrier needs to be able to administer a three-tier benefit design, and not all claims payment systems can accommodate that.

This also works better in an area where you have at least two hospitals and multiple health care providers. If you live a rural town with only one hospital, there won’t be as much engagement because people don’t have as many choices.

What best practices would you recommend health plan sponsors follow when implementing a three-tier benefit design?

Quality and cost are not correlated in the health care industry, and your employees need to be educated about that. Overall, you want to be very clear in the employee communication and education. It’s all about the education of who falls into what tier, and making sure employees are aware of that.

You can even add an online tool, like a treatment cost calculator, so they can make a more educated decision. The tier is calculating some of the cost for them already, but the right technology can further enhance their selection.

In 2014, 19 percent of employers offering health benefit had tiered networks in their largest health plan, according to Kaiser’s survey. Tiered networks continue to be a compelling tool to channel your employees’ choices, which you should take time to research and consider implementing.

Insights Health Care is brought to you by HealthLink.

How to utilize captive self-funded arrangements to reduce risk

The worlds of health insurance and financial wealth investment are merging together with captive self-funded arrangements.

These captives also are giving small and midsize employers a way to operate a self-funded group health plan for less risk.

Traditionally, midsized firms, those with 100 to 1,000 lives, have been reluctant to self-fund. While 93 percent of firms with 5,000 or more employees have self-funded health care, only 58 percent of midsize firms chose this option, according to a 2010 report by the Kaiser Family Foundation.

“These arrangements have been around for a while, but they are gaining more ground as small groups look for ways to self-fund with reduced risk,” says Abbe Mitze, account executive II at HealthLink.

Smart Business spoke with Mitze about the benefits of captive self-funded arrangements.

What are captive self-funded arrangements?

They pull together a group of employers — who are either close to each other regionally or have some common thread of industry such as farm implement stores — and put them in the same pool when they buy their stop-loss insurance.

Stop loss insurance is what protects the employer’s plan assets once the claims reach a certain predetermined amount. These policies protect you against an unexpectedly large claims when you self-fund your health insurance.

Each group stop-loss captive has its own unique structure, but they all entail the employers buying individual stop loss policies. The critical mass and structure of these programs provide economies of scale for each employer by providing greater purchasing power.

Due to the risk sharing opportunity that the captive provides, it is also a more efficient model from an insurance purchasing standpoint

By spreading the risk across many companies, employers can find a piece of mind that is priceless. They don’t have to be as concerned about large swings in cost, which is one of the biggest deterrents to smaller group self-funding.

In addition, the captive or insurance broker who manages the captive will take some of those stop-loss premiums and invest them.

If the investment does well, the employer groups in the captive would receive a dividend. You could use that dividend to reinvest in wellness or other health measures that would benefit your self-funded solution.

How does the captive group typically find each other, in order to come together?

The insurance or captives broker would get a concept pulled together, secure the vendor they want to use or who they want to manage the captive, and then go out and find the collective group of employers. They are the ones who explain the concept and what all is involved.

Doesn’t an association or trust plan do the same thing?

It’s very similar. An association or trust comes together to leverage their volume to have more purchasing power in the market. And the same is true for a captive, but then there is this financial component of an additional reward based upon the investments that are made.

What else do employers need to know?

You still manage your health benefits and plan independently, just as you do today as a standalone employer group. The only thing it affects is your stop-loss.

There’s not a lot of administration on the part of the employer group, but you do need to make a small initial investment that provides the starter capital for the wealth management piece. It’s typically a percent of the stop-loss premium.

Who would be a good candidate for a self-funded captive arrangement?

The employer group would need to have a tolerance for self-funding, and also have the capital necessary to make that minimal investment upfront.

Insights Health Care is brought to you by HealthLink

How office design enhances workforce health, productivity

In recent years, the topic of workplace design has garnered attention as a heretofore overlooked way to enhance a workforce’s productivity. Open spaces, common areas, lighting, acoustics and thermal comfort are all part of modern office design, and all intended to enhance worker satisfaction with their environment and improve interactions to increase productivity.

More importantly, workplace design can have an impact on employee safety and health, and that, too, impacts productivity. “Design” also includes workplace policies that promote how office architecture and layout can optimize performance.

“A recent study by the World Green Building Council found overwhelming evidence that office design significantly impacts the health, well-being and productivity of staff,” says Dr. Michael Parkinson, senior medical director of UPMC Health Plan. “You can make a business case for designing and building a healthier environment for employees.”

Smart Business spoke with Parkinson about how office design impacts employee health and productivity.

How does the work environment impact the health and productivity of workers?

Work demands change over time and work environments change along with it. As employees become more sedentary and spend more time in front of a computer, and inside a cubicle, our health will predictably decline. Designing in increased activity, movement and interaction are critical.

Sometimes, what’s needed can be something as basic as a new chair. Also, think about providing a standing ‘swing activity’ workstation so that, on occasion, people can conduct business standing up, rather than having to sit all day. Some companies have introduced regular stretch breaks, brief exercise sessions and even ‘recess’ into work periods to improve cognitive functions.

What design factors impact a workplace?

A number of factors can impact employee well-being and productivity. For instance, the World Green Building Council report cited indoor air quality, which includes increased ventilation, as being capable of improving productivity from 8 to 11 percent. Other factors include thermal comfort, more exposure to sunlight, views of nature, noise and acoustics, and interior layout.

The report also recommended an active design, which includes design guidelines that promote physical activity, as well as access to services and amenities like gyms, bicycle storage and green space to help encourage healthier lifestyles of the building’s occupants.

Design that enables employees to feel more in control of their environment is a big factor. Being in control of temperature can make an employee happier, while also saving energy. Design that maximizes daylight and increases access to windows can reduce the need for electric energy, while increasing productivity and improving sleep patterns.

A building that is uncomfortable, distracting, hazardous or noxious can reduce productivity.

How important is lighting?

A 1997 study showed that while lighting doesn’t directly affect performance, good lighting can enhance the ability of employees to see details clearly and increased visibility has the ability to increase output.

A 1983 study found that low levels of light were connected to low levels of work and social satisfaction among workers. Because office cubicles can block needed light, it is possible that workers could not be exposed to daylight for an entire work cycle.

And we’re ‘hard-wired’ for natural light. In fact, in Europe, all office workers must have exposure to windows. A 2003 study in Sacramento, California, found that employees with the best views were more productive and more likely to describe themselves as healthy and less likely to describe themselves as fatigued.

How important is exposure to noise?

The U.S. General Services Administration has identified office acoustics as a key contributor to work performance and well-being. To achieve acoustical comfort, the workplace must provide appropriate acoustical support for interaction, confidentiality and concentrative work.

Workplace design must allow people to come together without disturbing others, and create quiet areas that are apart from centralized noisy spaces.

Insights Health Care is brought to you by UPMC Health Plan

How to be prepared for the new health insurance tax in 2018

In 2018, the federal government will start a new tax on high-cost employer-sponsored health plans. It’s informally known as the Cadillac tax. According to a recent survey from Towers Watson, many companies are already concerned about the impact the tax could have on their businesses.

“The Cadillac tax doesn’t take effect until 2018, but it’s getting a lot of attention right now,” says Veronica Hawkins, Medical Mutual Vice President, Government Accounts. “Many employers have multiyear agreements with their insurance carriers, so they are understandably concerned.”

Smart Business spoke with Hawkins about how the Cadillac tax is expected to work in terms of thresholds and calculations, what exactly is considered a high-cost health plan and what companies can do to figure out if, or how much, they might have to pay.

What is the Cadillac tax?

The Cadillac tax is a provision of the Affordable Care Act (ACA), which Congress passed in 2010. Essentially, it’s a 40 percent, nondeductible tax on high-cost employer-sponsored health plans. The tax is applied to the amount each employee’s coverage exceeds the annual threshold, which is determined by the IRS. All employers are subject to the tax, regardless of size or grandfathered status. The idea is to reduce the demand for high-cost health insurance plans and encourage carriers and consumers to better control their health care costs.

What does high-cost coverage mean?

Currently, the 2018 threshold for a high-cost plan is $10,200 for individuals and $27,500 for families. Those amounts, however, are subject to change before the tax actually takes effect. In 2019, the threshold will increase by 1 percent plus inflation. After that, it will increase based solely on inflation.

In addition, there are higher thresholds for retired individuals ages 55 and older and for plans that cover employees engaged in high-risk professions. In both of these examples, the threshold can be $1,650 higher for individuals and $3,450 higher for families.

What benefits are included in the threshold?

The amounts combine the values of several different types of health benefits. First, you have the premiums for medical and prescription drug coverage, plus certain types of vision and dental benefits. Then there are certain contributions to health savings accounts, flexible spending accounts and health reimbursement arrangements. Those contributions are included regardless of whether they are made by the employer or their employees. The value of wellness programs and on-site medical clinics can also count as part of the calculation.

Who calculates the tax?

According to current information, companies will be responsible for calculating the tax for themselves. That’s because in many cases, employees can choose from more than one group health plan and insurance carriers may not have enough information to do the calculations. Insurance carriers collect the tax from their customers and pay it on their behalf. Self-funded groups are responsible for calculating the tax and submitting payment. The federal government is expected to give more details about how payments should be submitted.

What do companies need to know right now?

Understandably, companies want to know two things — if they will have to pay the tax and, if so, how much it will be. Unfortunately, there are far too many variables right now to give realistic estimates.

The best advice we can give is for companies to consult with their tax adviser, who can provide additional guidance and help make sure they are in the best possible position once 2018 rolls around. Then talk to your insurance carrier and develop a plan for adjusting your benefits, or your multiyear contract, if the need does arise.

Insights Health Care is brought to you by Medical Mutual

How managing care can improve health care and cut costs

Too often, patients aren’t properly taking medications, following up on care after release from the hospital or correctly managing chronic diseases.

With medical management, utilization management nurses and medical case managers work with members to ensure they get the most out of their health care benefits, says Dr. Robert Sorrenti, medical director at HealthLink.

“Medical management includes utilization management, in which we look at services to make sure they are medically necessary so inappropriate medical services can be eliminated,” Sorrenti says. “It also includes disease management, putting a focus on people who have high-risk conditions, such as cardiac disease or diabetes, better managing drivers of the cost of care.”

Smart Business spoke with Sorrenti about medical management and how to encourage employees to use the available services.

What is medical management?

In a broad sense, medical management addresses the use of services and their appropriateness according to medical standards, the quality of members’ experiences as they receive health care and ultimately the cost of the care. For example, if someone uses the emergency room multiple times in inappropriate ways, a case manager might approach that person about finding a primary care physician.

Medical management strives to make sure physicians are following accepted standards of care and doing appropriate tests. It’s not only about saving money; it helps members avoid being exposed to unnecessary services.

How would a utilization manager interact with someone with a chronic condition?

That patient might be impacted in a number of ways. If you’re admitted to the hospital, you or your provider would let the utilization management team know. The utilization management nurse would contact your physician and hospital to learn why you were admitted and what’s the plan of care.

As your hospital stay continues, the UM nurse makes sure you are in the right setting for your needs and that you aren’t staying in the hospital too long.

As your discharge approaches, the UM nurse considers what services you need after discharge. Do you need to go to a rehabilitation facility or skilled nursing facility? Do you need support services at home? Do you understand what your benefits are for these types of care?

The UM nurse helps arrange for those services within your benefits, making sure you use network providers and minimize out-of-pocket expenses.

After discharge, a case manager might look for gaps in your understanding of what you’re supposed to be doing and make sure you follow your doctor’s directions for medication and additional care.

How can medical management help prepare a patient for surgery?

UM nurses might call members who are having elective surgery, before they go into the hospital and after they leave. They’ll ask, ‘Are you clear on what’s going to happen with your surgery? Do you have your care lined up when you go home? Do you have someone to take care of you?’

After the surgery, the UM nurse would follow up and ask, ‘Are you clear on the doctor’s instructions? Have you gotten the tests that you were supposed to get? Do you have an appointment to see the doctor?’

Readmission rates have been reported to run from 7 percent to as high as 20 percent in the Medicare population. The key to reducing those rates is making sure members follow up with their physicians after discharge.

It’s not about saying no and denying services; it’s about helping members do the right thing.

How can employers encourage employees to take advantage of medical management?

Employers can stress the importance of engagement with the medical management staff. In the past, people have wanted to keep medical management at arm’s length. If employers can encourage employees to cooperate, it can go a long way to benefiting both the member and the plan.

Employers also should stress the value of members actively participating in medical case management, which often targets those with complicated and extensive care needs. As the case managers help build the care plan, the member is essential to its success.

Insights Health Care is brought to you by HealthLink