national healthcare reform september 2011 magazine

1w w w. He a l t h c a r e R e f o r m Ma g a z i n e . c o m

National Healthcare Reform Magazine

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w w w. He a l t h c a r e R e f o r m Ma g a z i n e . c o m

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Health insurance exchanges: Let’s do them rightby Dennis Triplett

26 Health Promotion Versus Disease Management : A Corporate Lifestyle Approachby Dr. David Koivuranta

21 A Dependable Cost Cutting Tool in a Changing Landscapeby Suzanne Berman

Benefits That Really Matter: What Females Wantby Carrie Strigham

Copyright © 2011 Healthcare Reform. All rights reserved. Healthcare Reform Magazine is published monthly by. Material in this publication may not be reproduced in any way without express permission from Healthcare Reform Magazine. Requests for permission may be directed to [email protected]. Healthcare Reform Magazine is in no way responsible for the content of our advertisers or authors.

16 Surviving Health Care Reform:10 Critical Issues Employers Should Address with Their Brokersby Adam Bruckman

Would You Pay Your Credit Card Bill Before Reviewing It?

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29EDITORIAL

Editor-in-Chief

ADVERTISING SALES

PRODUCTIONGraphic Designer Tercy U. Toussaint

For any questions regarding advertising, permissions/reprints, or other general inquiries, please contact:

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Jonathan Edelheit

LETTER FROM THE EDITOR The National Healthcare Reform Agendaby Jonathan Edelheit

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Live Well and Wellby Mark Roberts

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The New Wild Westby Ray Desrochers

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by Dr. Kristin Begley

Medicare Supplement Insurance Nowa Must-Have Voluntary Benefit For AnAging Workforceby Brandon Todd

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The Importance Of a Comprehensive Legal Plan

by Donald A.Rowe

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Fixed Indemnity Plans: Worth a Second Look in the Ever-Evolving PPACA Environment

52by Tim Adkisson

10 Pharmacy Benefit Manager Contract Language that affects Plan Sponsors Costsby Daniel Opinante

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Employer Healthcare Congress2011Keynote Speaker

his year we have worked extremely hard to totally redesign this years National Healthcare Reform Conference and Employer Healthcare Congress. We stripped everything down to the shell, and gave it a complete upgrade from speakers and agenda topics, to new networking software, and excitingly, to a new city. We are

going to Chicago, in a true convention center, and everyone is ecstatic for the conference to move to Chicagoland and to be centrally located in the United States.

The results have been amazing for us. The industry has seen the changes and spoken. Our attendance is up 93% compared to last year around this same time, and it keeps growing day by day. To View the 2011 List of Attendees, visit the conference website,

www.healthcarereformconference.com/2011-participants.html Part of that, I believe, is our investment in bringing in some of the brightest and best keynotes possible. This is an area where we focused heavily and tried to get innovative keynotes that are well known experts. We searched for those who not only inspire, but provide key insight we all need to stay motivated and to succeed in our business, passions and personal lives. All of our KeyNote speakers are outstanding, but I believe my favorite would have to be John Casey, Director of International Benefits for Google with his topic, Creating the Healthiest Employee in the World. Google is at the cutting edge of innovation and everything they do is usually inspiring and successful. I can’t wait to see how they are changing the curve and making their employees healthier, more productive and lowering their costs.

I am very passionate about the power of social media. It is a very important topic for me to bring to the forefront for our attendees. Most of us know social media but don’t really understand it or know how to use it effectively. Social Media is being used for everything today; even enrolling and educating employees for benefits programs.

I diligently searched and was able to get Mitch Joel, who Mashable.com (the top rated social media website out there), rated Mitch as one of the top social media experts in the world and his book, Six Pixels of Separation was rated one of the top 5 social media books to read. As most companies in US healthcare and benefits initiate their plans in social media, this will be an eye opening and critical session

Our outside the box keynote speaker this year is Bill Rancic, Season 1 Winner of Donald Trump’s The Apprentice. Bill competed on national television and is a true entrepreneur. We have brought Bill in specifically to discuss the challenges we are facing in the healthcare and insurance industry today and he will be teaching us the importance of becoming “adaptable.” Adaptability is critical for all of us to survive, and I couldn’t imagine a more important topic for us to be addressing, especially in the face of all the changes and obstacles our industries are facing with PPACA and the economy.

This year we are also adding in Global Benefits and have some of the largest multinational employers and insurance companies presenting on the growing trend of international benefits and providing case studies to attendees.

We have put a lot of effort into our Employer VIP program and even upgraded it to include Agents and Third Party Administrators. There have been so many requests for VIP Passes, sometimes it can be difficult to manage! Attendees will see a major difference in the number of employers, agents and TPA’s coming this year that qualified for our complementary passes and other benefits.

I really want to thank everyone who has made our magazines and the conference so successful. More importantly, you have helped us accomplish, in just three years, what many of our competitors who have been around for 20 years, have been unable to surpass. With your support, you have made us the the biggest benefits conference in the country for employers, agents, TPA’s and insurers.

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The National Healthcare Reform Agenda and Participant List Announced

Jonathan EdelheitPresidentEmployer Healthcare Congresswww.employerhealthcarecongress.com

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egardless of the ongoing debate, healthcare reform is now the law of the land, and we need to begin the process of developing meaningful consumer-

oriented products and solutions. After all of the political wrangling and “cleanup” changes to the 2010 law, the critical issue will remain:

How well prepared are we to execute on expanding health insurance to add tens of millions more people?

In 2014, the most significant changes of the

health care overhaul are scheduled to take effect, including: federal coverage mandates, premium subsidies for income-qualifying consumers (133 to 400 percent of the federal poverty level) and new platforms to help individuals and small businesses buy health insurance.

Creation of state health insurance exchanges in 2014 — expected to bring some 30 million uninsured Americans under the umbrella of privately provided health insurance — is one of the keys to determining the direction health benefits will take in the future.

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Quality of implementation will drive success or failure of the exchanges. If the exchanges fail to satisfy a broad range of consumers and employers, disappointment could propel the nation toward a single-payer government system. If the exchanges succeed, tens of millions of newly-covered individuals will have access to health care, and we may all come to embrace the concept.

We urge all stakeholders including business leaders, regulators and consumer groups to join the planning and implementation, to ensure success when the health insurance exchanges go “live.”

Designing exchanges for success

A major theme of health insurance exchanges is that they are market oriented. The goal is for consumers to enter an open marketplace, see their health insurance options and make purchases. Sounds simple. However, for an exchange to be successful, the design must generate enough competition and choice to drive significant participation. This would thereby mitigate adverse selection and reduce administrative costs —critical factors for achieving long-term sustainability.

To date, much of the attention on exchange design has focused on the

regulatory requirements. But states and the industry need to provide equal emphasis on how well the exchanges will work for users. Attracting and retaining a large number of enrollees is the ultimate determinant for success.

Based on extensive experience serving health plans and consumers, we encourage policy

makers to focus on these four success factors for the exchanges:

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• One-stop centralized marketplaces with transparent information on all aspects of health insurance

• High-quality consumer experience with emphasis on simplicity and ease of use

• Array of competitive choices to meet diverse needs of consumers, small employers and brokers

• Integration of core competencies to ensure a cost-effective, seamless flow of eligibility, enrollment and payments

Creating centralized marketplaces

Concepts for the state exchanges range from minimalist websites listing hyperlinks for eligible insurance plans to one-stop shopping places that enable consumers to compare, select, enroll and pay for their health plans, all on one platform.

We believe centralized markets are the way to go. Each state or region’s exchange should offer one-stop service for consumers, employers and insurance brokers. An exchange should be integrated—not a shallow, fragmented portal sending consumers off in all directions to gather information from insurers.

Emphasizing consumer experience

Much of the insurance exchange discussion so far has been about regulatory issues. While fairness and other concerns are important, we believe consumers should be the focal point in designing exchanges.

We urge policy makers to select robust technologies that support seamless end-to-end processes. Non-subsidized individuals and small employers will be more likely to embrace

exchanges that include these characteristics:

• Simplicity and ease of use

• Plain English rather than legalese

• Broad range of products with design and price variations



• Clear navigation path from shopping to payment to service

Providing competitive choices

Much as a retail store attracts customers by offering a broad line of merchandise, health insurance exchanges should provide a diverse range of health benefit plans and ancillary products to meet the needs of consumers, small employers and brokers.

If states take an overly controlling position that limits options, users will find the exchanges unattractive. Consumers or employers are not all alike, so the new marketplaces should enable choices among an array of options, such as traditional insurance, managed care plans and consumer-directed options.

Consumer-Directed Health Care (CDHC) plans should have a presence in these exchanges. This category includes Health Savings Accounts (HSAs) and Health Reimbursement Arrangements (HRAs), which are generally paired with higher deductible policies.

Consumer-directed plans, with their emphasis on individual decision making, demonstrably improve health care costs, efficiency and wellness. These important outcomes should be addressed among the options offered in the new exchanges.

Integrating core competencies

Given the complexity of health insurance decisions, it is critical to incorporate all core competencies to make each exchange a fully functioning system.

States should design exchanges in partnership

with industry to draw upon relevant systems expertise in the various fields, including:

• Insurance companies—risk, claim and provider management systems

• Administration and technology firms—robust, easy-to-use presentation, transactional and customer service platforms

• Financial institutions—payment systems, best practices and efficient disbursements

Doing health insurance exchanges right will come from investing time and energy to design them well. Success will require drawing upon all of the skills in industry to design an exchange that will attract large pool of participants into a competitive marketplace that is simple to use, provides a wide array of choices and is in one integrated service delivery model.

About the Author

Dennis Triplett is Chief Executive Officer of UMB Healthcare Services, a division of UMB Financial Corporation, headquartered in Kansas City,

MO. Dennis has responsibility for UMB’s strategic direction in health care banking and manages the sales and marketing activities as well as product development and relationship management. He developed UMB’s Medical Savings Account product in the late 1990s and grew that into their multipurpose card product supporting a variety of spending accounts including HSAs, FSAs and HRAs.

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he pharmacy benefit management (PBM) industry is on the verge of significant transition. The PBM market place is being consolidated

as two of the largest players merge to a form an organization serving over 100 million members. While there is considerable discussion concerning what the implications of the acquisition are in terms of market dynamics, pharmacy negotiation power and client pricing, there are often overlooked implications that will have significant impact on plan sponsor pharmacy benefit costs. One such aspect is common PBM contract language that may seem innocuous

but in reality may

give the PBMs financial advantages that do not translate to savings for plans sponsors.

After conducting thousands of pharmacy benefit audits, as well as PBM request for proposals, we have found that most plan sponsors do not understand how PBM contract language can affect the PBM’s discount guarantees, and ultimately their pharmacy plan costs.

The following is a summary of some of the common PBM contract language we suggest every plan sponsor become familiar. We will focus on explaining the impact of the following three s e c t i o n s

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frequently found in a PBM service agreement.

• Mail service discounts based on 100 unit package size

• Exclusion of Single Source Generics from the generic discount guarantee

• Inclusion of Zero Balance Due claims for discount guarantees

Mail Service Discounts Based on 100 Unit Package Size:

Most PBMs include contract language which states that mail service discount guarantees are based on 100 unit package sizes (or lower). Package size language may be found in the pricing section or as a definition within the PBM service agreement. The language is contrary to how mail service pharmacies purchase medications. The goals of mail service pharmacies to purchase medications in the largest package size available to take advantage of volume price points where greater discounts are offered by the pharmaceutical manufacturer. Through the use of this language, PBMs can increase the Average Wholesale Price (AWP) discount offered to the plan sponsor by as much as 3.5 percent for generic medications.

To support this conclusion, we compare the average package size for retail claims to the average package size used for mail service claims when auditing client data. Below is a sample analysis.

This client example demonstrates that the average generic package size submitted through mail service is 42 percent smaller than the average

package size submitted through retail channel. By comparing the top 500 generic medication’s actual unit costs (cost per pill) for retail versus mail service unit costs, we determined that the actual unit costs for mail service are the same as the retail generic unit costs. The difference

between retail and mail from a unit cost basis is only 1 percent (see table X).In this example we determined for this client that the actual generic costs for mail service are virtually the same as retail generics. The PBM mail service discount guarantee set forth in the PBM contract based on 100 unit package size is greater than the retail discount guarantee, but the costs are the same.

Unfortunately most of the larger PBMS have structured their mail service operations to utilize 100 unit package size, and are resistant to removing the 100 unit package size language. Plan sponsors with high mail utilization should consider the requirement of MAC (maximum allowable cost) pricing for mail service generics. PBMs develop aggressive MAC pricing to be used to price retail generic claims to prevent the retail pharmacy from using similar pricing. With that said, requiring the PBM to use the same MAC pricing at mail service will lessen the impact of the 100 unit package size language and generate greater cost savings for the plan sponsor.

Exclusion of Single Source Generics (SSG) from the Generic Discount Guarantee:

In the next 5 years the pharmaceutical marketplace will see a significant increase

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utilization of generic medications as a result of many highly utilized brand medications losing their patent protection. Once a brand medication is available as a generic, the unit cost savings does not occur immediately. Generic medication pricing is much like any businesses where supply and demand plays a crucial role in price. Once a brand medication loses its patent protection, it is typically the existing brand manufacturer that launches the first generic version. If the new generic, only has one manufacturer, that manufacturer will establish the cost of the generic at a price point only slightly lower than the existing brand. Once a generic medication is introduced, it will take between 9 to 18 months before the generic costs will decrease significantly as generic prices are dependent upon the number of generic manufacturers competing in the market.

Since the unit cost of a new generic is not much lower than the existing brand medication, PBMs prefer to exclude these new generic medications from their overall generic effective discount guarantee. The reality is, the PBMs are not going to obtain the same AWP discounts for new generic medications as they would for generics that have been in the market place for years where competition is prevalent. Further, with the large market share these medications represent, if PBMs do include SSG in the client’s discount guarantee, they will struggle to meet the guarantee.

Looking specifically at the brand medications that are losing their patient protection in 2011 to 2015, the impact is significant. By reviewing client clams data, we project plan sponsors can expect over 30 percent of their existing brand claim utilization to transition to generic medications in the next five years (Refer to Table X).

If the PBM generic pricing terms included SSG, the PBM will realize an approximate 13.2% reduction in the overall effective generic discount guarantee (Refer to Table X).

It is obvious why PBMs want to exclude SSG from their overall generic effective discount guarantee. The PBM language excluding SSG from the overall generic effective rate is not the problem. Our concern with this language is how SSG are defined. Most PBM contracts allow the PBM to define what is a SSG, and how long the SSG are excluded from the discount guarantee. In our experience we have found large variations with regards to SSG definitions, and in many cases, SSG are not defined at all.

Plan sponsors should understand that through 2015 they can expect their generic utilization to increase approximately 10 percent. Currently we see plan sponsors generic utilization at approximately 70 percent. In 2015 generic utilization should approach 80 percent. It is commonly understand that the majority of the PBMs traditional revenue is the pricing spread for Generics. In the next 5 years, plan sponsors need to focus in generic discount language, and how it will impact their costs.

Our recommendation to plan sponsors is require your PBM to provide a definition of SSG

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medications, a list of the SSG drugs that will excluded from the discount guarantee with regular updates, and the length to which SSG are excluded from the generic discount guarantee. Only by defining SSG, monitoring which SSG drugs are excluded from the generic discount guarantee and auditing to determine of the PBM accurately applied the SSG provisions of the contract, will a plan sponsor be able to validate their PBM’s generic discount guarantee.

Inclusion of Zero Balance Due Claims for Discount Guarantees:

Zero Balance Due Claims (ZBD) are defined as claims were the member cost share (copay) pays the full cost of the prescription drug claim and the plan sponsor is billed $0. As an example, if the cost of a generic drug is $4 and the member’s copay is $5, the copay would cover the entire cost of the drug and the plans sponsor would incur no claim cost under most benefit plans. The volume of ZBD claims are a function of the plan sponsor’s plan design. As member copays increase, the number of ZBD claims also increase. Conversely, plan sponsors with benefit plan designs with low member copays have fewer ZBDsclaims.

For many years, it was the industry norm to exclude ZBD claims from calculating PBM discount guarantee. The rational is if an auditor determined a ZBD claim paid in error, there are no damages to the plan sponsor because the plan sponsor paid $0 for these claims.

The inclusion of ZBD claims in calculating plan sponsor AWP discount guarantees, have become the norm. In the past few years many retail pharmacies are provided $4 generic programs. The retail pharmacies have offered these medications in some instances at or below their cost for the purpose of

increasing traffic to their retail pharmacy locations. Many if not most of these medications result in a zero balance due claim because the $4 member copay is less than the plan sponsors copay.

By including these claims, the PBM is taking credit for the retail pharmacies decision to offer these medications at or below their acquisition cost. The savings impact of ZBD claims is not a result of the PBMs discount negotiations with retail pharmacy chains, savings is strictly a function of plan design and retail pharmacy pricing practices. As a result ZBDs should be excluded from the calculation of PBM discount guarantees.

In reviewing client data, we estimate that ZBD claims may represent as much as 25 percent of retail claims and 11 percent of mail service claims. The impact to plan sponsor AWP discounts is between 1.5 and 2.0 percent and primarily applies to retail generic medications (Refer to Table X).



Since ZBD claims only benefit the PBM, and in most cases are not representative of the PBM network negotiated discounts, we recommend plan sponsors require the exclusion of ZBD claims from the PBM AWP discount guarantees.

Summary

The Pharmacy Benefit Management service agreement language highlighted in this article is an example as to how often ignored contract terms can affect AWP discount guarantees and plan sponsor costs. Now and in the future it is important for the plan sponsors when reviewing potential PBM vendors, understand how PBM contact language can affect their plan costs, and the savings generated by the PBM discount guarantees.

About the Author

Daniel Opinante is the president of Seneca Consulting Group, a national pharmacy benefit consultant and auditing firm.has been very active in educational initiatives designed to help unveil the complexity of the pharmacy benefit industry. As the featured speaker of the national PBM educational series “Taming the Tiger”, Mr. Opinante has had the opportunity to present his “PBM 101: Pricing and Revenue Models” throughout the Country. Mr. Opinante has had the privilege of supporting education and awareness of PBM business models at many industry venues. As a speaker at the National Self Funding Conference, Health and Welfare Conference for Mid- Sized Employers, Made In America Taft Hartley Benefits Summit, the National Association of Police Officers (NAPO), and Health Care Administrator Association (HCAA), Mr. Opinante is dedicated to offering his experience to provide plan sponsors with a unique understanding of the pharmacy benefit industry. \

Prior to establishing Seneca Consulting Group, Mr. Opinante had a successful 10 year management career for a New York based Pharmacy Benefit Manager. Mr Opinante provides valuable guidance for plan sponsors as to how to maximize their benefit dollar Contact Mr. Opinante by email or phone [email protected] 631-577-4092

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ealth care reform has America’s employers scrambling to ensure they will be in compliance, scratching their heads about certain provisions and

secretly wondering if their company is prepared for what comes next. Is your broker taking an active role in this process? Even more important, how do you determine if his or her firm is

equipped to help you navigate this uncharted territory? This new era demands sophisticated expertise and technology from employee benefit advisers. These 10 critical questions – and your broker’s responses - can help make sure the right captain is at the helm to guide your company into the future.

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1. What assistance should brokers provide their clients in response to health care reform?

Today’s innovative brokers are at the top of their game, serving as guides to help employers navigate through health care reform. This legislation has made a complex industry even more complicated. Savvy businesses are turning to brokers who have invested in personnel and communications platforms that deliver the right information on a timely basis to their customers. Webinars, e-mail advisories, newsletters, handbooks, Q&As and updated timelines about the topic are now mandatory resources that employers should receive.

2. Compliance assistance has become an enormous challenge for companies. What kind of support is available?

Compliance assistance is essential and has become one of several important services employers should expect. Keeping up with regulatory requirements is a challenge, particularly for small businesses. Leading brokers are committed to regularly alerting clients about all regulatory/compliance matters to keep them informed and help manage organizational risk and exposure. Annual compliance reviews (e.g., HIPAA, ERISA, COBRA, HCR, etc.) should now be routine, as well as assistance with IRS paperwork and filings, including Form 5500 preparation. The goal is to eliminate confusion related to compliance (and any potential deficiencies) with upfront

education and counsel about copious state and federal issues.

3. What are the three most important questions employers should ask their brokers NOW?

• Ask about strategies and offerings to address long-term health insurance affordability issues. There are many options to consider including self-funding, consumer-driven plans and voluntary products. The best brokers spend time getting to know their clients and help design a strategy with customized plans to address an employer’s needs and budget over a period of several years.

• Inquire how the firm stays abreast of continually changing regulations related to health care reform – and what tools and resources are available to clients. Push to understand all the services offered and how the broker differentiates their services from other advisers in the market.

• Explore how they help educate customers’ employees about wellness and preventive care – so that these individuals can become better health care consumers. Access to online information and resources, health risk assessment tools, a customer advocate center and communication materials are excellent indicators that you are receiving maximum value.

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4. What do you predict will be the greatest challenges for employers and when will they occur? What solutions and resources can guide them through these obstacles? Employers are challenged to find a long-term strategy that provides affordable health insurance for their employees. Brokers must identify ways to address this crisis and help clients bend the cost-curve on employee benefits. Data analytics, consumer-focused approaches, integrated benefits (voluntary products), defined contribution expertise, transparency tools and a high-performing technology platform are among the tools and offerings that brokers will need to properly address this issue. Without a strong adviser providing creative and innovative solutions, businesses will continue struggling to provide affordable employer-sponsored benefit options.

5. What do you predict will be the greatest challenges for employees, and when will they occur? What solutions and resources can guide them through these obstacles?

Today’s economy presents monumental challenges for the American workforce. At the same time, health insurance policies have become increasingly difficult to understand. Employees -- not just their employers -- need more from a broker: more expertise, more guidance and more tools. Firms that have invested in technology, resources and training for their customers’ employees set themselves apart from the pack. Leading consultants not only design comprehensive plans, but offer a communication platform to help roll out and advise individuals about their benefits options. More frequently, through voluntary products and defined contributions plans, employees will make their own decisions about what insurance to purchase for themselves and their families. Top brokers will provide services and information about these options to

each worker through technology, educational tools and enrollment capabilities. Advisers clearly need to address these issues and are already devising solutions that go well beyond the employer.

6. What innovative approaches are brokers taking to ensure their clients are well informed about reform updates?

The Patient Protection and Affordable Care Act (PPACA) was passed on March 23, 2010. With more than a thousand pages of rules, regulations



and effective dates, businesses are faced with the daunting task of digesting the act’s complexities. Leading consultants in the employee benefits industry are committed to helping their customers comply with these mandates, as well as other regulatory and legislative requirements. The industry’s best brokers are well-equipped to serve as trusted advisers. They provide their clients with a wide array of health care reform communication tools, including frequent advisories, webinars, seminars, newsletters, handbooks, tax credit assessments and calculators – and comprehensive online resources.

7. Escalating costs remain a challenge and many predict health care reform will not resolve this issue. What are your thoughts on the matter, and what approaches do you recommend to help control costs?

Escalating insurance costs remain a reality. No one can accurately predict the future, but it is likely that health premiums will continue to rise unless major changes are made by all stakeholders in our health care system – insurers, providers, employers and employees. Wellness, lifestyle management and employee engagement are crucial to bringing rising costs under control. Innovative brokers are rolling out tools to help clients and policy holders embrace these concepts, and many are utilizing advanced technology and analytic tools to help employers and their employees with key decisions about plan options. The right decision-support tools can more effectively evaluate plan alternatives and establish a long-term strategy. Better information equates to improved decision-making, less internal analysis and optimal plan results, which maximizes value for everyone involved. The right technical tools can quantify the value differences among plan features, enabling employers to make solid, cost-saving business decisions based on clear, actionable information.

8. How can I determine if a broker is capable of guiding my company through this transformation?

First and foremost, make sure your broker truly understands your business, your culture and your financial situation. Ask around. Get references. Ensure the firm has the capability to communicate well, plan ahead and effectively implement and follow through. Ask about their technology platform. In addition, you want a representative who makes employee benefits simple – and minimizes surprises. Top-notch advisers are skilled at helping employers and employees do more with

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less. The right mix of benefits at the workplace has a direct impact on employee health, satisfaction and financial security. Seek a client service model that enhances closer relationships between you and your employees. It’s also important to keep in mind that health care reform will require more from your adviser, so determine whether their firm has the resources, capital and expertise to thrive during these changing times and can meet your new and evolving needs.

9. Health care reform is still evolving. What’s the latest news from Capitol Hill?

Health care reform is definitely a moving target. Courts across the nation are challenging it, politicians are battling over it, and insurers are trying to influence the interpretation and implementation of several provisions. Some recent amendments deal with changes to certain aspects of health care reform, but not much seems to be happening right now as the focus on Capitol Hill is soundly on our country’s debt and deficit.

10. There are still threats of repealing health care reform. What do you predict will happen, and how will it impact employers?

No one can predict the ultimate outcome. Instead of taking a “wait-and-see” approach, employers should prepare, remain educated and stay abreast of the ever-changing health care reform landscape. A great broker will help any business do just that.

About the Author

Adam Bruckman is president and CEO of Atlanta-based Digital Insurance, an employee benefits agency specializing in insurance for small businesses and mid-sized companies. He can be reached at [email protected] or 770-250-3025.



hange is inevitable for self-insured employers. More control over insurance programs means keeping up with a fast-changing legislative environment that’s

inherently out of an employer’s hands. So as states grapple with both healthcare and workers’ compensation reform, employers wait in the wings to figure out their next move. Recently, many steps have been made to protect the patient that keep self-insured employers on their toes.

Just last year, the Patient Protection and Affordable Care Act (PPACA or PCA) of 2010 was passed as an answer to public pressure for healthcare cost containment, and also as a way to prevent Americans from incurring financial ruin due to medical costs. Similarly, workers’ compensation laws – administered on a state-by-state basis – have been designed to protect workers and employers from excessive costs

due to injury liability and litigation. While these mandatory requirements may seem restrictive to self-insured employers who value control, employers can take the reins back by developing compliance strategies to limit their risk and maximize cost savings. One tool that helps achieve both objectives is Utilization Review (UR). By preventing injured workers from receiving unnecessary treatments, including expensive surgery, excessive medication or unwarranted physical or occupational therapy, UR remains an invaluable piece in the medical cost containment puzzle.

GOING BEHIND THE SCENES OF THE UR PROCESS

In order to objectively keep claims under control, UR is employed during the period between injury and return-to-work. UR is the process of

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gathering medical information to determine whether or not a requested treatment is medically necessary, and it can be managed by an employer’s claims department, given the appropriate certifications and resources, or through a state licensed, third-party UR company.

The UR process begins when a treating provider submits a request for a treatment and related documentation for either concurrent treatment (during), prospective treatment (pre-certification), or retrospective treatment (after). A pre-certification for emergency treatment is not required, but may be subject to a retrospective review, depending on the state. The UR organization reviews the request for treatment, typically using nationally-recognized evidence-based guidelines – built on documented research data – and either authorizes, denies, modifies or delays a treatment.

The UR organization’s first line of reviewers – a pre-clinical reviewer (PCR) and a registered nurse (RN) – will either: (1) authorize the treatment, or (2) forward a treatment request to a peer reviewer, which is a licensed medical provider often of the same specialty as the requesting provider. After examining all submitted documentation and attempting to speak directly to the requesting provider on the phone, the peer reviewer will make his or her final determination. If a recommended treatment is disputed, the peer reviewer will offer a clinical explanation of the decision and provide appropriate treatment recommendations to the requesting provider that follow commonly accepted evidence-based guidelines.



Fourteen states regulate the UR

process in order to maintain a system that fairly and objectively authorizes, modifies or denies treatment requests. The aims of the implemented polices include:

• Setting deadlines for determinations to facilitate fast decisions that get patients through the healthcare system quickly

• Allowing workers to get the appropriate care they need so they can go back to work

• Ensuring reimbursement to providers for medically necessary services

ADVOCATING FOR THE PATIENT AND FOLLOWING THE RULES

Many states have adopted the timeframes and guidelines set by the Utilization Review Accreditation Commission (URAC) – a nonprofit organization that sets national standard policies for companies involved in the UR process. According to the URAC website, the policies are developed by various stakeholders, including providers, healthcare organizations, insurers and the public interest. An organization must be compliant with the policies and procedures set by URAC to be accredited by the organization.

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Requirements for accreditation also include two quality improvement projects at any given time and onsite visits to determine URAC compliance.

Specific rules and guidelines for the UR process set by each individual state legislature supersede URAC’s recommendations and standards. For example, URAC’s deadline for a prospective treatment request determination is 15 calendar days from the date of receipt. A UR organization reviewing a workers’ compensation claim in California has five business days to complete the UR review. It’s the UR organization’s responsibility to keep up-to-date on the state-specific rules and changes. If there’s not enough medical information to make a treatment decision, most states give a one-time deadline extension. Since decisions are almost always backed by evidence-based research, a treatment request is often delayed due to limited documentation. The UR process allows requesting providers to advocate for patients through the appeal process, in either an expedited or standard appeal. If a requesting provider disagrees with the UR determination, they are given the opportunity to make their case by either submitting additional medical documentation or requesting to speak directly with a new peer reviewer.

GETTING EMPLOYEES BACK TO WORK BETTER AND STILL SAVING MONEY

The goal of UR is to ensure that treatments are medically necessary and appropriate first and foremost. The administration of workers’ compensation claims is complicated by regulatory compliance matters and can leave an employer financially vulnerable. Self-insured

employers that invest in the UR process as an integral component of managing claims, particularly large claims, can cut down on excessive and unnecessary treatments, thus reducing costs. More importantly, the UR process expedites the return of a productive worker by directing injured workers only to treatments that are needed and related to their work injury. In a constantly changing landscape, UR acts as a reliable guiding force to help you manage your employees’ health and medical costs.

About the Author

Suzanne Berman is a Utilization Review Nurse in the Medical Review Unit of Rising Medical Solutions, a Chicago-based medical cost

containment and care management company. Prior to Rising, Berman gained critical clinical expertise working as a Surgical Staff Nurse at Northwestern Memorial Hospital, where her specialty was Orthopedic and Trauma. She’s a Registered Nurse in Illinois and Texas, and a member of the Association of Peri-Operative Registered Nurses. Berman has a master’s degree in Public Policy and Administration from Northwestern University, and holds a Bachelor of Science in Nursing from the University of Pennsylvania.

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ave you ever wanted more time? More time to get things done and more time for you to live life? Just having an extra hour in the day or an extra day in the week would make life a bit easier wouldn’t it?

Time management is one of the biggest challenges we face as businesses and people. There are only so many hours in the day and only so many days in the week. In that given time frame, we must accomplish a certain number of tasks in order to be efficient and proficient at what we do. If we’re not good at what we do, even if we do it fast, it can take too long to get the necessary result or outcome right. If we’re slow at what we do, we might get the necessary result or outcome right but again it can take too long. Both instances are a problem.

So what do we do? We schedule our work and our life in order to dedicate the time needed or the time allotted to accomplish all the things that have to get done and that need to get done. It seems reasonable to most people to operate in this fashion. However, as most people will attest, we always seem to run out of time to get things done and we never seem to have enough time to ourselves—which is what we really want!

Is there a better solution? Yes, there is. It’s called freedom management. Instead of allowing time for all those necessary tasks and hoping that there is some time left over for us at the end, which there never is, it’s best to schedule that time for ourselves first and use the rest of the time to get things done. The leverage comes from using your freedom time to recharge, be happy and get focused so your productivity time is at optimum. As they say, all work and no play make you a dull person.

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And it works. If you give yourself four hours to get something done, you’ll use all four hours. If you give yourself three hours to do the same thing, you’ll get it done in three. A given task will always fill the time allotted and you will always operate at a level of efficiency and proficiency given the nature of a situation. Because you can control the nature of most situations, you can also control your tasks. So from now on, instead of cramming your free time into your schedule, schedule your free time first and then cram in the work. You’ll be surprised at the results when you actually accomplish more in less time.

There is a valuable lesson in freedom management versus time management when it comes to health, especially in the workplace. Most people and businesses operate with a focus on their desired product, service and revenue at the expense of their health, wellness or lifestyle. Then, if and when a health issue arises, which it most certainly will, we dedicate resources to deal with the problem so we can get back to work.

As we know statistically and experientially, this costs businesses time and money. It also creates tension in the workplace and affects the corporate lifestyle of the company.

Fortunately, there is a better way. Just like our example of trying to squeeze in more personal time with all the work we have to do, most people are living life trying to squeeze in all the healthy things they should do amongst all the work they have to get done. This is a challenge at best. Interestingly, if time is scheduled and built into our day through habits and defined initiatives, we can invest in our health while we work so that not only do we gain the health benefits but our work quality and quantity also improves. Again, this is supported by the current research and the case studies regarding wellness in the workplace.Once a health problem exists, it takes much more time and money to heal, recover and treat that problem then it would have to prevent it in the first place. Just like customer service, if there are procedures and systems in place to deliver

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the best experience for buyers and people who use our products, we can avoid the scenario where a customer encounters poor service or a bad product, which then takes considerable resources and expenses to counteract. After all, a happy customer is a repeat customer willing to spend money!

Similarly, a healthy employee is a performing employee. The benefits, however, go beyond the workplace and affect the employee’s entire life. When the company plays such a pivotal and vital role in the health and welfare of its team, the rewards are significant. The business is more productive with lower costs on health claims while the employees are happier and more in tune with life and work.

This is what happens when there is a focus on health promotion versus disease management. Yes, diseases, illnesses and injuries will happen and you will want to have a plan and the resources or benefits to deal with them when they do. However, this should not be the entire management plan or the selling feature to employees. It’s good to know you’re going to be looked after when and if something does happen to your health, but it’s even better to know that something is being proactively done to ensure that likelihood is being minimized. That’s the kind of company we all want to work for and with.

In the end, disease management is nothing more than symptom treatment, crisis triage and a final product of things gone wrong. It’s a fight to make up for what could have been and what should have been and what will one day be true health promotion in the workplace. By adopting physical, chemical and emotional strategies for helping employees with nutrition, exercise, ergonomics, stress reduction, environmental adaptation and rest periods, the workplace will no longer be a place where we get drained, rather a place that energizes and revitalizes our lives for the better.

About the Author

operate Time Health Management a corporate health and wellness company. It is founded on over a decade’s worth of experience and knowledge derived from treating employees suffering

from ergonomic stress, strain and disease. It’s time to manage your corporate health, visit www.timehealthmanagement.com and contact us for a free business wellness evaluation. Learn why our workplace wellness solutions make sense. For more information email [email protected] or call 416-697-7918. Ask us about our 5 minute onsite ergonomic and stress reducing system, perfect for every business.

magine receiving your credit card bill every month, and the only information you’re provided is an amount due and a “pay by” date of 48 hours from now. The amount due doesn’t look too far off

from what it was on your last statement, so you shrug and just pay your bill – you can trust your credit card company, right? Let’s say you realize one month you should be responsible and decide to check your bill for accuracy. You contact your credit card company for a full statement complete with the charges you’ve made, but they tell you you’re not allowed to review your bill now but can conduct a spot audit at the end of the

year. For the audit, only a couple weeks of a detailed account of your purchases will be provided

and referenced for accuracy, and the weeks chosen will be at the credit card company’s

discretion.

Sound ridiculous? Of course it is. We may scoff at this scenario and think

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no corporate entity can be this unaccountable with people’s hard-earned money. Yet a similar system has been used for prescription medication bills across the nation for decades now. Every two weeks, $12 billion of pharmacy benefit claims is paid to pharmacy benefit managers (PBMs) without review. Corporations, government entities, and unions – to name a few – receive their prescription claim bills every other week and often have only 48 hours to write checks to their PBMs for the amount due. Payers do not receive detailed statements of all the claims for which they are being charged, and even if they did, their HR departments certainly do not have the resources to review spreadsheets with millions of fields of data for accuracy—and certainly not within 48 hours. Compound this lack of oversight with the fact that errors and overcharges do occur. Insurance companies and PBMs play a crucial role in ensuring healthcare is available to people across the country. But while their functions are indeed valuable, the cost to payers of doing this kind of business is billions of dollars each year in preventable overcharges.

You might ask why these errors even occur. The reasons center around the complexity of the current drug payment system in the United States. PBM contracts are long and complex, and the systems used to process

claims data are old and never move out of production. As a nation, we have come to accept margins of error. They seem to be inevitable. However, with skyrocketing healthcare costs stifling economic recovery and significantly impeding the ability of businesses to grow, the margin of error on drug spend has a direct impact on the level of success that companies, government entities, states, and the nation as a whole are so desperately looking to achieve or sustain. IMS Institute reports U.S. national drug spend to be at $307.4 billion for 2010. Looking at a reasonable margin of error anywhere

from 2 to 5 percent, we as a country are spending $6 billion to $15 billion in

errors.

Our governments have put policies and measures in place to help protect health information and enforce responsibility and accountability through

legislation such as Medicare Prescription Drug Improvement and Modernization Act of 2003 (Medicare Part D) and the Sarbanes-Oxley Act (SOX). But

there is nothing in place to mandate transparency or drug spending accountability, despite great pressure on entities to comply in such



a complex drug care system. Prescription drug costs continue to grow at 7 percent year over year and are on pace to double within ten years, so this issue will only grow in importance going forward.

While credit card holders are generally not held responsible for errors on their credit card bills, payers are responsible for errors on their prescription claim invoices – PBMs assume no liability, so payers alone have the fiduciary responsibility to protect their plan members. As prescription drug costs continue to rise, reviewing the PBM bill with each invoice is an important step to providing immediate plan savings today and ensuring cost containment in the future.

About the Author

Dr. Kristin Begley is responsible for developing and implementing strategic programs for pharmacy benefit management at Truveris.

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A shift is taking place in workplaces across America. Women are repositioning their careers in and in the process, are looking for something different. Do you offer

the benefits that they want?

A logical first step is to understand which benefits women, and many times men, want. To answer this question, I conducted research, a qualitative phenomenological study, in 2009. From this independent research, five major themes emerged. You can provide your employees with many of these benefits, often at little or no cost.

Concern for Family Responsibilities

Nearly a third of the women interviewed cited concern for family members as catalysts for job change. They wanted options that would allow them to tend to spouses, children, and parents. Approximately 25 percent of those expressing concern for family members would have stayed with a previous employer if more options had been available to them. Consider offering your employees time to address family needs. Workplace options that promote a balanced, healthy family life will also help you retain employees.

Desire for Increased Flexibility and Control

Nearly half of all women who left their positions expressed a desire for increased flexibility and more control over their work including their work schedule. Many employees are interested in compressed work weeks, flexible hours, and telecommuting options. Recently I spoke to a male employee in his late 20’s. He was working late into the evening and I asked him if he was tired and wanted to go home. “No way!” he responded. “I get into my zone late into the day and my productivity spikes. I’d rather work tonight and be able to have Thursday morning off

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to play golf. It’s good for me and it’s good for [the company].”

In addition to flexible work schedules, giving employees control over work assignments can also improve your ability to retain employees. If how the work completed is less important than the end product, consider giving your employees more freedom to determine the process they want to use to complete a task or work assignment.

Interest in Another Career

Twenty-five percent of the women interviewed cited interest in another career as reason for their exodus. Many of these women were ready for a major shift in their type of work so it is possible that employers would have had difficulties keeping these employees regardless of what they would have done. Still, this makes a case for allowing employees to move from one area to another or one job assignment to another. A move from production to marketing might be what keeps one employee engaged while an opportunity to learn a new skill might be enough for you to retain another. Cross-training also gives an organization more depth so everyone benefits.

Lack of Support

Nearly one quarter of the women interviewed cited lack of support as a determining factor when they decided to leave their positions. Often supervisory support was listed as a concern although in some cases support at home was listed as a concern. Providing employees with a supportive work environment where the employee feels valued can be the difference between a content employee and an employee who is not engaged.

The Business Environment

Dissatisfaction with the environment in their places of business caused at least 25 percent of the women interviewed to eventually leave their positions. Some of the women interviewed explained that desire for increased security played into their thought process regarding an exodus. Employees want to feel secure. Although employers may be limited in what they can offer employees in the way of security, increased communication and an overall sense of stability can assist employers with this endeavor.

So what is the bottom line? Forty-five percent of those interviewed indicated there was something their employer could have done to make them stay. Forty-five percent – nearly half! What are you doing to make your employees want to stay?



About the Author

Dr. Carrie Stringham has been teaching undergraduate and graduate courses in human resources for more than fifteen years. Carrie is a consultant and trainer

in the areas of human resources, healthcare administration, and organizational leadership and can be reached at www.stringhamresources.com.

n the days of the Wild West, pioneers set out to discover a new frontier. Ahead of them

lay challenges, potential dangers and possible wrong turns. They pressed on, however, in the hope that they would find a better life, a new home or even gold at the end of their journey! Today, healthcare payors also face a new frontier. Numerous challenges, dangers and possible wrong turns lay ahead, as the previously paved roads and the business-as-usual approaches of the last century are left behind. The rapidly evolving healthcare economy is shaping up in a way that is reminiscent of the Wild West. Payors that don’t join the caravan will find themselves left in the dust, unable to compete in this new world.

What’s driving this new healthcare frontier? Out of control costs, the large number of uninsured and underinsured people in the United States and the realization that we need to do more to involve everyone in the process. The cost of healthcare as a percentage of the nation’s GDP is rising at an alarming rate. According to the “U.S.

Health Care Costs” report by the Kaiser Family Foundation, “expenditures in the United States on healthcare surpassed $2.3 trillion in 2008, more than three times the $714 billion spent in 1990, and over eight times the $253 billion spent in 1980.” Chronic disease, an aging population and out-of-control administrative expenses are considered by many to be big drivers of the unprecedented cost of today’s healthcare.

As the annual cost of care continues to grow, it has become clear that our current healthcare model simply isn’t sustainable. As a result, similar to the pioneers that headed for the new frontier all those years ago, many payors are now beginning to explore other options as they too head in new directions. New ideas – some novel approaches, some revamps of previous attempts to reduce costs while delivering higher quality care – are beginning to take shape as the twenty-first century healthcare caravan begins.

Last year’s passage of the healthcare reform bill has set in motion a series



of sweeping changes that affect the way medical care will be delivered and paid for over the next decade and beyond. Funding and managing the new generation of healthcare services are fundamental challenges to achieving the bill’s goals of improved care access, quality and cost-efficiency. The initiative calls on all parties – patients, providers, payors and the government – to ensure that maximum value is received from every dollar spent.

Let’s look at some of the changes that will help to shape what is sure to be a wild ride. Today’s static, one-size-fits-all healthcare model is being replaced by new models that stress individualization, personalization and customization, based upon the unique needs of each member. These new models will, in many cases, shift ownership, responsibility and risk to providers, employers and even the members themselves, as we finally begin to closely link everyone involved in the healthcare delivery cycle and have individuals take on a greater role in managing their care.

One option that is gaining significant

traction and momentum is Value-

Based Benefit Design (VBBD), now more

commonly referred to as

Value-Based Healthcare. This model is focused on the idea of having highly personalized benefits that incentivize specific healthy behaviors for individuals who have or are likely to develop chronic diseases. Using this new approach, for example, a value-based plan would offer people at high risk for a heart attack reduced or eliminated co-pays for certain prescribed medications and physician visits, and may even offer premium reductions or other incentives if certain health and wellness objectives are consistently met. In some cases, physicians are also incented based on how well they perform. This is a dramatic shift away from more traditional approaches, as it focuses on proactively managing the people that are most at risk as a way to create and maintain a happier and healthier patient population while keeping the overall cost of care in check.

While still too new to fully determine their total return on investment, a number of early adopters of value-based health plans are already reporting lower or more stable costs, increased productivity and enhanced member satisfaction. One thing has become clear, however, when reviewing the results of these programs: payors that want to compete using these new options must first embrace next-generation technology platforms that will enable them to achieve increased levels of flexibility, agility, transparency and interoperability in order to ensure that they will be able to address the

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complexities that are associated with many of these offerings.

There are a number of other new models that are also appearing as part of the Wild West brigade, including Accountable Care Organizations (ACO), a new generation of Consumer-Directed Health Plans (CDHP) and Patient-Centered Medical Homes (PCMH). While each of these options also has important advantages, disadvantages and differences, most of them have at least one thing in common – a shift in risk. Using many of these new approaches, payors will now share risk with providers, employers and even members, as each of these groups takes on more responsibility for the quality and cost of care. One of the most crippling weaknesses of many of the legacy healthcare technology platforms is their inability to easily integrate with other systems in a way that enables the exchange of data both across and between organizations. While payors already collect a myriad of information from a wide variety of different sources, most of it resides in hard-to-access silos that were never intended to support the level of business transparency that is required to operate in the current healthcare environment. Payors need to be able to easily aggregate and analyze data, in real-time, and then convert it into actionable intelligence that will support optimal decision making by everyone involved in the healthcare delivery cycle. They must also be able to provide members and providers with instant access to information related to benefits, provider networks, health conditions, and the current status of deductibles, limits and OOP maximums.

Changes related to healthcare reform and new regulations are also part of the Wild West journey. The move to the ICD-10 standard, for example, is quickly approaching and will introduce a level of

complexity that most organizations are simply not ready to deal with given the fact that many of their existing platforms and applications were not designed with any of these items in mind. As we move from the 17,000 diagnosis and procedure codes of ICD-9, to the more than 155,000 codes that are now part of ICD-10, many payors are finding themselves in a situation that is reminiscent of Y2K. Hundreds or in some cases thousands of database fields, often in multiple systems, need to be expanded to accommodate the increased length and complexity of the new codes, and existing data needs to be migrated and merged to ensure that claims that are processed using the new standard will be paid correctly. Many of the payors that have realized the importance of using modern technology platforms to address these twenty-first century healthcare business needs have already begun the transformation. Those that haven’t yet joined the caravan will continue to face enormous challenges, as the world of healthcare continues to increase in complexity and they find themselves unable to compete in the rapidly evolving healthcare marketplace.

Similar to the Wild West “showdowns” of the past, we are now seeing new showdowns between the old and the new healthcare technology platforms, and the old and the new healthcare business models. Today’s healthcare pioneers will use a new generation of tools to drive their success, as they move away from the antiquated, hard to maintain legacy

platforms and the multitude of s u r r o u n d systems that are currently holding them back. Payors



that want to stake their claim in this new world must have systems that will allow them to quickly adapt to new models, easily address market changes, eliminate waste and manual processing, and offer significantly enhanced levels of transparency and support.

Like the days of the Wild West, opportunity is everywhere, especially for those who are willing to do what it takes to be successful. Changes are sure to bring challenges for everyone – providers will find new and more efficient ways to participate in the healthcare cycle, patients will play a more active role in keeping themselves healthy and managing the cost and quality of their care, and payors will offer new options that will help to further support reform. Reaching the “new world” of twenty-first century healthcare will not be easy, but it will offer unlimited benefits for those that can endure the challenge.

About the Author

Ray Desrochers is a senior technology and business executive responsible for leading HealthEdge’s day-to-day operations and for ensuring

the successful growth of the company. A graduate of the University of Massachusetts, Ray has been a frequent speaker at technology events and conferences around the world.

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he buzzword among employers, especially this year, is wellness. Many employers have put an employee plan in place that includes a wellness element. However,

the wellness topic covers many areas and can be somewhat nebulous by definition depending upon who is answering the question, “What is wellness?” For the most part, some employers think that when they throw together a gym membership, a coaching session, a smoking cessation plan, and an interactive website, they have a wellness plan. But wellness goes much farther as a concept and can be very broad-based depending on your opinion on what wellness means.

Interestingly, there is no universally accepted

definition of wellness. There is, however, a set of common characteristics seen in most thoughtful attempts at a definition of wellness. You generally see a reference to a “state of well-being,” which is vague, to say the least, according to DefinitionofWellness.com. Also frequently seen is a “state of acceptance or satisfaction with your present condition.” The truth is wellness is a tough word to define. That said, Charles B. Corbin of Arizona State University gives this definition of wellness: “Wellness is a multidimensional state of being describing the existence of positive health in an individual as exemplified by quality of life and a sense of well-being.”

But more than just providing weight loss or a

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feel good attitude, wellness plans help improve the overall health of employers and businesses. For every dollar spent on wellness programs by employers, medical costs were reduced by about $3.27 and absenteeism costs reduced about $2.73, according to a report on U.S. workplace disease-prevention and wellness programs by Health Affairs, a health policy research journal. Studies also have shown wellness programs can provide a return on investment of between $3 and $6 for every dollar spent as reported by the Society for Human Resource Management. That’s a great ROI for anyone or any company. Besides helping lower health care costs, the real pot of gold has to do with a healthy work force being a much more productive work force, according to Health Care Service Corporation.

As health insurance costs continue to rise, more businesses are getting motivated to offer new wellness programs or improve existing ones, and the latest research shows such programs can pay off in dollars, as well as pounds and inches. However, many seemingly good wellness programs fail to achieve their potential due to poor implementation.

Employers need to follow a plan on how to set up wellness programs. Somebody with good project management skills needs to shepherd the implementation, but it can’t fall on one person’s shoulders, according to The Portland Business Journal. A wellness program requires the support of executives, as measured by their participation in the program. You need strong CEO support and role modeling, you need strong middle-management leadership and you need strong leadership from the person who coordinates the wellness program. You need a passionate advocate of wellness and healthy living in every work unit.

But just offering a wellness plan to workers is only part of the equation. You must get them engaged in the process. When it comes to encouraging people to get healthy, it seems a free water bottle or a T-shirt doesn’t cut it anymore — cold, hard cash is where it’s at. Industry reports indicate that a rising number of employers are offering wellness programs and financial incentives and things like lower premiums to, for example, employees who don’t smoke, according to Health America Insurance.



While it might seem like a no-brainer that people should make their health a priority without being bribed to do it, the fact is many do not. There are those people who really do care about themselves and it wouldn’t matter if we were providing incentives or not, but there’s also a very large percent of the population who may not be aware of the importance of health and wellness. Money talks. People pay attention to cash. The ideal would be if everyone would engage in the health and wellness effort, the nation could potentially slow the growth of medical cost trends.

Additionally, free karate and yoga classes, biggest-loser weight reduction contests with prizes, and incentives to encourage employees to go to the doctor are among creative initiatives that have emerged in wellness programs at small and large employers. These programs are expanding and increasingly making use of technology, according to the Chicago Sun-Times.

In addition to lower health care benefit costs, employers that provide wellness programs experience greater employee productivity, higher

morale, lower turnover and a stronger organizational culture. Researchers have found the most successful wellness programs have six essentials: engaged leadership at multiple levels, alignment with the company’s identity, a broad and highly relevant design, broad accessibility, internal and external partnerships and effective communications.

Employers launching a wellness program need to commit to it for the long haul and realize that financial returns will take time to achieve, according to the Mid-America Coalition on Health Care. Wellness is not something that you can go in and do it for a year and see a return on investment. The typical ROI computation that works for whether or not you invest in a new plant will not immediately work for wellness. Businesses launching wellness programs should start by collecting data about their employees through individual health-risk assessments. They should then use the data to classify the workforce’s biggest risks, such as chronic diseases, accidents, inactivity, poor diet, smoking and other lifestyle choices. The data should then be used to establish goals and make workplace changes that remove

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barriers to healthy choices. The outcome should be measured and evaluated to see if the program is working.

Here are some tips about providing wellness options that work, according to the Portland Business Journal:

• Start at the top. Nobody will take the wellness program seriously if it doesn’t have strong support from the CEO and others in leadership positions.

• Assess your needs. Perform employee health risk assessments and diagnostic screenings.

• Get employees involved. Even a well-designed wellness program won’t work if employees don’t participate. Offer incentives that make a difference.

• Take measurements. Track and report results.

• Don’t expect miracles. A good wellness program will cut health care costs over time, but it typically takes 18 months or longer before the savings associated with the program outweigh the cost.

Wellness plans have definitely proven to be worth the investment, but overnight results are not what you will reap. The culture in the employee community within your business must be changed, and that takes a long time. For the most part, adults don’t like to change, especially as they grow older. But providing options for workers to participate in with the right approach definitely makes a long-term impact, not only on the personal health of individual employees, but also on the corporate health of your company. Profitability is a major concern, and business owners and senior executives realize that in order to stay in business, a company must make more money than it loses. Having healthy employees is a really great way to make that part of the equation.

There are plenty of vendors that offer wellness plans or services, but choosing the right strategic partner makes a huge difference in the success rate of your plan. Companies like Trotter Wellness, Careington, Weight Watchers and American Specialty Health are some of the key players in this market. There are more, but working with these corporations who have a proven track record over a long time and are very good at what they provide makes sense when you are interested in sourcing the “best in class” to offer your employees.

Making the investment in a wellness plan can be expensive, but making poor choices in vendors or in program implementation can be even more costly if you pick the wrong company to help advise and implement your program. Creating an alliance with a nationwide provider that knows the business can make all the difference. Realizing that too late is a mistake you cannot afford.

About the Author

Mark Roberts’ professional sales background includes 30 years of sales and marketing in the tax, insurance and investment markets. Mark is a licensed life, health and

accident insurance agent in all 50 states and DC for insurance products and discount health plans. He serves as Manager of National Accounts at Careington International Corporation ( www.careington.com ).

Additionally, Mark works with clients needing insured products ( www.careingtonbenefitsolutions.com ) in the US and discount dental and optical schemes in the UK (www.healthydiscounts.co.uk ). Mark has been writing a health care blog for the past three years, (www.yourbesthealthcare.blogspot.com), which is a topical weblog about various health care issues. He also regularly contributes articles to magazines for both medical and dental topics both in the US and the UK. You can reach Mark at [email protected].



n the U.S. today there are two factors at work--one demographic, one economic--that are making Medicare Supplement Insurance plans a must-have voluntary

benefit.

First, with the Baby Boomers beginning to turn 65, HR departments are being challenged with an increasing number of aging employees. The Boomers, the generation born between 1946 and 1964, are in aggregate a phenomena with no historical precedence -- by 2030 there will 80 million Americans over the age of 65. To put that another way, 2.5 million people will blow out 162.5 million birthday candles this year and every 13 seconds for the next 20 years an American will turn 65 years old.

The second factor, the troubled economy, is causing more and more seniors to delay their retirement and continue working. A recent report (PDF) by the National Institute on Retirement Security puts it best:

“For decades, Americans had access to a strong “three-lane highway” to retirement--a traditional pension, Social Security and individual savings. As the first of some 78 million Baby Boomers begin to retire in 2011, they are speeding on a dangerous road full of potholes:

• “Fewer private sector employees have access to traditional pension plans. In 1975, a full 88 percent of private sector workers with a workplace retirement plan had pension coverage; by 2005, this number had dwindled to 33 percent.

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• “What’s even more startling is that only 59 percent of Americans have access to any type of employer-sponsored retirement plan, and only 45 percent of employees participate in a retirement plan at all.

• “More than 80 percent of Americans believe

that the recent economic downturn exposed the risks of America’s retirement system. Nearly three-quarters of Americans believe that stock market volatility makes it impossible for the average American to predict how much money they will have in their nest egg when they retire, underscoring the potential flaws of the current retirement system.”

While these problems may seem insurmountable, your employees can find solace in the Medicare Supplements and the extra coverage they provide. Right now seniors are scared. I know because over the past 27 years, my company has assisted hundreds of thousands of seniors through the Medicare maze and, in all that time, I’ve never seen such anxiety amongst our customers.

Our customers are asking questions like, “Will Congress increase the age of eligibility for Medicare to 67?” Or, “Could new federal budget plans require beneficiaries to pay higher premiums?”

But they’re taking comfort when they find out that if they purchase the right Medicare Supplement Plan (AKA Medigap), they can receive up to 100 percent coverage on doctor and hospital charges for life without ever worrying about networks, co-pays or deductibles. This is because Medicare Supplement Insurance covers the gaps in traditional Medicare, with no provider networks or restrictions.

Furthermore, Medicare Supplement Insurance is guaranteed renewable for life, with federal regulations in place to ensure guaranteed enrollment. This means it cannot be taken away from the customer as long as they continue to pay their premiums, regardless of the actions in Congress.

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If you haven’t crossed paths with Medicare Supplement Insurance while managing voluntary benefits for your company, you should take a look at these products. According to the Centers for Medicare and Medicaid,

“A Medigap policy (also called “Medicare Supplement Insurance”) is private health insurance that is designed to supplement Original Medicare. This means it helps pay some of the health care costs (“gaps”) that Original Medicare doesn’t cover (like copayments, coinsurance, and deductibles). If you have Original Medicare and a Medigap policy, Medicare will pay its share of the Medicare approved amounts for covered health care costs. Then your Medigap policy pays its share. A Medigap policy is different from a Medicare Advantage Plan (like an HMO or PPO) because those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.”

Beware of Medicare (Dis)Advantage Plans

As an HR professional, I’m certain you take pride in offering your employees voluntary benefits with the best quality/price ratio. If you like to be able to stand behind each product you make available, then you need to know the disadvantages of Medicare Advantage Plans.

Many misinformed or unscrupulous insurance agents are misleading seniors into believing that Medicare Advantage Plans, which contain co-pays, deductibles, co-insurance and provider networks, are the equivalent of traditional Medicare with a Medicare Supplement Plan.

Buyer Beware.

• Medicare Advantage plans restrict access to many providers or you will be liable for 100 percent of the costs.

• Medicare Advantage plans do not have lower premiums -- though some salespeople try to compare the Medicare Advantage Premium to that of Your Medicare Supplement, the benefits are only required to be equivalent to Medicare alone. Therefore you sacrifice coverage, options and often pay higher premiums than with traditional Medicare.

• If you are on Medicare Advantage, you no longer can legally buy a Medicare Supplement.

Don’t be misled, traditional Medicare by itself is better than a Medicare Advantage Plan and it allows you to purchase up to 100 percent Medicare Supplemental coverage. This gives you complete access to the world’s best healthcare system here in America and with the future of Medicare uncertain, Medicare Supplements are still a safe haven.

About the Author

Brandon Todd is CEO of Insuraprise, Inc., DBA as Medigap360. Medigap360, a nationwide health insurance brokerage located in Austin, TX, serves

Medicare recipients by providing online and agent-assisted shopping of multiple top-rated Medicare Supplement providers. Medigap360 is the only company that offers Medigap plans from the top insurance providers in all 50 states, with online pre-qualification and the ability to apply with or without the assistance of an agent. Medigap360 was recently named to the 2011 Inc. 500 list as the 190th fastest-growing private company in America. For more information, please visit www.medigap360.com.



he list of incremental professional services required to solve a single legal issue can be extensive, often

requiring months or years to resolve, and at great expense. Legal and related matters can take a heavy toll on people’s lives; this includes their personal relationships, workplace productivity, financial stability, medical health and mental health.

Distractions during the workday such as negotiating with a soon-to-be ex-spouse, calls from collection agencies, copying and scanning personal documents, calling and faxing banks, and many other such

interruptions greatly reduce an employee’s productivity.

Here are some staggering statistics compiled by some of today’s leading experts in the

employment industry.

Approximately 40 percent of all employees

experience extreme stress over personal

finances, which cause a measurable drop

in their productivity. Workers can waste more than 20 hours

of company time per month dealing

with or thinking about personal finances. - Debt-Free

America, October 2006

Forty-three percent of employees called in sick in 2004 when they weren’t sick at all.

- Careerbuilder.com, October 2005

According to various HR sources, many employees that are absent due to illness

are not actually sick, but rather missing work to deal with personal

issues such as haggling with landlords, foreclosure, mortgage

refinancing, divorce, child custody, bankruptcy, civil lawsuits, identity

theft, etc. In 2008, the cost of employee absence neared 36 percent of payroll, including

costs for the wages paid to

T

50



employees while absent, lost productivity or replacement worker and administrative expenses. ~ Mercer Consulting

A comprehensive Legal Plan provides employees with access to professionals in a variety of fields to address the many issues that generally accompany a legal need. If a qualified professional is dealing with the issue, your employees will remain focused and productive in the workplace.

What to Look for in a Comprehensive Legal Plan

Coverage - When comparing legal plans, an employer will want to look for those plans that have adequate attorney network coverage to ensure that each member has access to a diverse group of law specialties and is able to confer with their assigned attorney face to face. Furthermore, it should be policy that the plan will recruit an attorney on the member’s behalf if one is not locally available.

Beyond Legal - The modern employee has related professional needs in the areas of finance, accounting, identity theft, personal counseling, etc. A truly comprehensive legal plan will provide access to discounted professional services that address all of these needs. Employers should seek a plan that provides access to an ample network of professionals in all the above disciplines.

Cost – Competitive pricing structure along with

reasonable benefits expectations are a must.

Limitations - Legal insurance plans usually have usage limitations, waiting periods and, most importantly, exclusions for preexisting conditions. These are in place to limit the insurance company’s financial exposure (e.g., payment of claims). Discounted Legal Plans do not have financial exposure to usage and can offer care to members regardless of when their legal need arises. Most individuals will only seek legal care after a legal need surfaces thus creating a preexisting condition that would render legal insurance plans useless when needed most.



SOME FACTS TO CONSIDER:

• There are more than 100 million court cases in the U.S. every year1

• 78 percent of American adults do not have an updated will.2

• 50 percent of all marriages end in divorce.3

• 50 percent of residential real estate transactions involve a dispute.4

• Bankruptcy filings have almost doubled since 1990.5

• More than 10 million Americans are victims of Identity Theft each year.6

• 59 percent of men and 54 percent of women surveyed felt a group legal benefit would influence their choice of employer.7

In today’s business environment Group Legal plans prove a very valuable addition to any comprehensive benefits program. Employers and Employees are now more ”benefit conscious” than at any time in recent memory. Both the employer and the employee “win” from such an arrangement, each in their own way.

About the Author

Donald A. Rowe is the Vice President of the Employee Benefits Divison of Legal Club of America. A 20 plus year veteran of the Employee Benefits industry, he works

at Legal Club’s Home Office in Sunrise FL. 800.852-6829.

Reference

8 Harris Interactive 1, 2, 3, 4 American Bar Association5 Department of Labor6 Javalin Resource Group7 Mercer Consulting

52



s most limited benefit medical insurance brokers know, the Patient Protection and Affordable Care Act (PPACA) gradually increases

minimum annual limits on medical insurance until 2014, when annual limits will be eliminated altogether. (The current minimum annual limit of $750,000 will be in effect until Sept. 22, 2011.)

While fixed-indemnity-type limited benefit medical policies generally are exempt from the healthcare reform and improvement sections of PPACA, expense-based plans, like many “mini-med” plans, are not. Carriers of mini-med plans, which typically have lower annual limits than more comprehensive group health plans, have had the option of applying to the U.S. Department of Health and Human Services (HHS) for a waiver from the annual limit requirements.

In June 2011, HHS issued new guidance allowing mini-med plans that have already been granted a waiver to extend the waiver to Jan. 1, 2014. HHS provided the details on special rules both for plans with existing waivers and plans that don’t yet have a waiver. The Department also advised that no new waiver applications will be accepted after Sept. 22, 2011.

In this ever-evolving PPACA environment, it’s important to keep in mind that while mini-med providers may either receive a new waiver or extend an existing waiver until 2014, the plans will continue to be under the scrutiny of HHS, and carriers will be required to resubmit certain specified information by Dec. 31, 2012, and again by Dec. 31, 2013. HHS has the option to revoke a waiver at any time, should plans not satisfy all the necessary requirements.

Employers that have received a waiver face an additional requirement: they must provide

Fixed Indemnity Plans:

Worth a Second Look in the Ever-Evolving PPACA EnvironmentBy Tim Adkisson

A



annual notice to participants that their coverage does not meet the annual limit requirements of PPACA. The notice, in mandated 14-point bold type, includes the following text:

The Affordable Care Act prohibits health plans from applying arbitrary dollar limits for coverage for key benefits. This year, if a plan applies a dollar limit on the coverage it provides for key benefits in a year, that limit must be at least $750,000.

Your health insurance coverage, offered by [name of group health plan or health insurance issuer], does not meet the minimum standards required by the Affordable Care Act described above.

Group benefits clients understandably may not want to include such language in their benefits materials. A fixed-indemnity plan offers an alternative that allows employers to avoid this situation — and continue to provide medical coverage to their employees.

Fixed-indemnity-type limited benefit plans are designed to cover benefits at a preselected benefit amount. While not a replacement for a major medical policy or other comprehensive insurance, they offer the flexibility and cost advantages many employers seek — without PPACA restrictions on annual limits and without the annual notification requirements that plans with waivers require. Given the changing healthcare marketplace, fixed-indemnity plans are worth a second look.

About the Author

Tim Adkisson is National Sales Vice President for Select Benefits Distribution in Symetra Life Insurance Company’s Group Division.

national healthcare reform september 2011 magazine

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