Annual health care spending may have experienced its first sizable bump after multiple years of slow growth, according to a new study. But fortunately, large and smaller employers alike can keep such increases in check by self-funding their group coverage.
Bloomberg Business reports that the analysis from the Altarum Institute research group shows that, based on preliminary government data, health spending increased by 5% last year, compared to 3.6% in 2013. If the numbers hold, health care spending during 2014 would mark the biggest jump since before the recession began in 2008.
A couple of factors contribute to the larger rise. As the chart above shows, the 2013 increase of 3.6% was less that the four previous years, so last year's jump was more modest in the context of the greater overall trend (if still significant) -- and remained well under the spending hikes of the pre-recession years. More importantly, the introduction of health insurance marketplaces in late 2013, plus an improving economy, resulted in a spike in the use of medical services as millions of new insureds took advantage of their coverage.
It's also interesting to note on the chart that even before the recession, health spending increases declined every year -- and it's probably no coincidence that the same period also saw more employers making the switch to self-funded coverage.
Among the many advantages of self-funding is the ability to make plan design changes that can save the employer money, regardless of current health care spending trends. Moreover, MedBen third party administration complements your self-funded plan with cost control tools that can save you even more money.
Whatever your group's health care needs may be, MedBen can help you put together a self-funded benefits package. And not just large businesses -- even employers with as few as 25 covered lives can realize significant savings with our self-funding solutions.
Regardless of national spending trends, self-funding through MedBen gives employers the opportunity to save real money on their health care costs. Learn more by contacting Vice President of Sales & Marketing Brian Fargus at email@example.com.
Another day, another Obamacare delay...
The Internal Revenue Service announced earlier this week that it will delay penalties on small businesses that provide health reimbursement arrangements (HRAs) to their employees to purchase individual health insurance.
In 2013, the Obama administration stated that "stand-alone" HRAs used specifically for the purchase of individual coverage imposed lifetime or annual limits on the dollar value of essential health benefits, and therefore violated Affordable Care Act rules. Employers that continued to offer stand-alone HRA would be subject to fines (in the form of excise taxes) of up to $100 per employee per day.
Assessment of penalties for employers with less than 50 workers was originally scheduled to begin in January 2015, but the delay will push enforcement back six months to July. (Fine assessment for larger businesses began in 2014.)
The IRS notice announcing the delay reads, “The Departments understand that some employers that had been offering health coverage through an employer payment plan may need additional time to obtain group health coverage or adopt a suitable alternative.” It also notes that the insurance exchange for small businesses "is still transitioning and the transition by eligible employers to SHOP Marketplace coverage or other alternatives will take time.”
According to Modern Healthcare, small businesses would prefer the delay be made permanent. “HRAs have been used by employers for decades as an alternative vehicle that allows employers to provide real benefits to workers,” said Joel White, president of the Council for Affordable Health Coverage.
Proposals to repeal the penalties have been introduced in the Senate and the House of Representatives.
MedBen is pleased to announce the promotion of longtime Information Systems (IS) team members Wayne Millard and Wendell Crain. Millard was named Director of Data Processing and Technical Compliance, while Crain was named Director of Security, Infrastructure and Web.
The promotions were made in recognition of their leadership abilities and the invaluable contributions the two have made to MedBen’s technological growth, said Doug Freeman, Chairman of the Board and CEO of the health benefits management company. “In the past decade, MedBen has made huge advances in the delivery and security of electronic data, and Wendell and Wayne have been essential to that development,” Freeman said.
Joining MedBen in 1999 as an EDI (electronic data interchange) Coordinator, Millard has since served as Supervisor of Special Projects and Manager of Technical Compliance. In his new position, he will manage the operational staff and the technical compliance of the company’s IBM POWER7 system.
“Ensuring that our system complies with Affordable Care Act laws, the new ICD-10 codes and other regulations is practically a job in itself,” said MedBen Vice President of Information Systems Rose Gribble-McEntire. “But Wayne has repeatedly demonstrated his ability to perform multiple roles, so he will also support the daily IS operations of our claims payment, data exchange and data integrity applications.”
Millard is currently working toward earning an MBA from DeVry University, an institution from which he has already earned a Master of Information Systems Management and a Bachelor of Science in Computer Information Systems. He has also earned 15 health care certifications from America's Health Insurance Plans (AHIP) and other industry organizations.
Crain joined MedBen in 2003 as a Technical Specialist and was subsequently promoted to Technical Services Lead. Prior to his new position, he served as Manager of Technical Services and Web Development.
As a director, Crain will oversee MedBen’s comprehensive security measures, including electronic data privacy, disaster recovery and business resumption planning, and loss and fraud prevention. Such efforts extend beyond the standard customer safeguards, Gribble-McEntire noted.
“Wendell will lead MedBen’s ongoing initiative to ensure not only the security of client information, but also the physical security of our home office and the safety of our employees,” she said.
Crain’s other chief responsibilities include developing the company’s websites and maintaining the performance of hardware and software assets, as well as ensuring availability of computer resources. He holds a Bachelor in Business Administration from Mount Vernon Nazarene University and an Associate in Data Processing from Zane State.
Political consultant Robert Laszewski recently offered a detailed analysis of a proposed Republican alternative to the Affordable Care Act. In addition to repealing the current law -- though retaining such popular provisions as no lifetime limits, coverage for children to age 26 on their parent’s plan, and guaranteed renewability of coverage -- the proposal includes:
While Laszewski believes the proposal to have some good ideas, he doubts that that a "take it or leave it" alternative will gain much traction. Compromise, he says, is the better approach:
"My sense is that voters will end up liking parts of both Republican and Democratic ideas. They might ask a reasonable question: Why can’t we take the best from both sides?
"If Democrats would just admit Obamacare needs some pretty big fixes, and Republicans would be willing to work on making those fixes by putting some of these good ideas on the table, the American people would be a lot better off.
"In fact, I am hopeful that this is eventually what will happen once Obamacare’s failings become even more clear (particularly the real premium costs) and both sides come to understand that neither will have a unilateral political upper hand."
A few weeks ago on this blog, we examined the argument that annual physicals aren't worth the time or money because they seldom detect major illnesses. We countered that the preventive care aspect of the exam is really secondary to maintaining a doctor-patient relationship.
Julie Lindsey, MD, a primary care doctor at Duke, clearly agrees with our line of thinking. As she recently wrote on the Duke Medicine Blog:
The annual physical has evolved into an annual wellness visit. We have pared down the testing to what is recommended by evidence-based guidelines for each age group. Rather than doing every test on every person every year, we determine who is at high risk and low risk, and adjust our testing toward that risk level.
In many ways, doing less is more complex and takes more time. It’s a lot easier to order a PSA test to screen for prostate cancer than to explain why it’s not helpful for some men to have this test. Each test merits a discussion of the risks and benefits. The annual physical has become more about the conversation than the exam.
Dr. Lindsey gets to the heart of the matter here. While we may refer to your annual doctor visit as a "physical" or a "checkup," it's primary purpose is a personal wellness review that focuses on your specific health needs. And tests are just one part of the process -- really, it is the ongoing dialogue that enables the doctor to get a true picture of the patient's condition.
Also important, Lindsey notes, is accountability. If you've gotten into some unhealthy habits, the wellness visit is the perfect opportunity to redirect your efforts. You can get useful lifestyle tips from your doctor that will have long term benefits. As Lindsey puts it, "It's more like an annual check in with your financial advisor than a car tune up."
MedBen WellLiving's emphasis on doctor office testing sets it apart from other wellness programs. Rather than advocating on-site health screenings that lack accountability, we support annual wellness visits that give the patient a true incentive to make positive changes.
The "physician-first" philosophy is just one important aspect of WellLiving. Our program also takes a disease-based approach that provides customized counseling for plan members who suffer from chronic conditions. And we use your company's claim history to detect health patterns that would benefit from specialized nurse coaching.
Last week’s disclosure that a major health insurer was hit by a massive cybersecurity breach has led to renewed media attention about the measures that benefits management companies are taking to protect their customers' personal information – specifically, the medical data that could be used by identity thieves to perpetuate costly fraud.
MedBen has always been proactive in its efforts to ensure the safety of client data. We’ve had an in-house information systems team since the introduction of our internal mainframe network in the late 80’s, and a considerable portion of their collective responsibility, then and now, has been in finding ways to maximize data security and guarantee client privacy.
Today, MedBen approaches cybersecurity from three perspectives – external, internal and physical.
A recent study demonstrates how medical costs differ greatly across the U.S. -- and begs the question of how much of that cost variation is justified.
According to Forbes, the analysis from the Blue Cross and Blue Shield Association showed that the average cost for a total knee replacement procedure, including hospitalization, surgery and rehabilitation, ranges from as little as $11,317 in Montgomery, Alabama to as high as $69,654 in New York. Hip replacement procedure costs show similarly wide regional variances.
To some degree, the disparity in health care prices is a reflection of the cost of living in a particular region, though not always. Health insurance coverage will, in turn, reflect those geographic cost differences to the degree that they are considered reasonable and customary.
Within a specific region, however, one would expect to see a smaller degree of price variances. But that's not always the case -- particularly when one compares costs between metropolitan hospitals to those in nearby smaller towns.
Nearly 1 in 3 adults suffers from hypertension, and less than half of those with the condition aren’t taking the proper steps to get it under control. In fact, many don’t even know they have it.
Hypertension, or high blood pressure, occurs when the force of blood pushing against the walls of your arteries stays elevated for a prolonged period. The longer blood pressure remains high, the greater the risk of heart damage, as well as heart disease, stroke and kidney failure.
There are no obvious symptoms for hypertension – the only way to detect it is through a blood pressure reading. A gauge measures your systolic pressure (artery pressure when the heart beats) and diastolic pressure (the pressure between beats). A systolic/diastolic reading of 120/80 is considered normal blood pressure in a healthy adult.
A blood pressure reading is a common element of just about every doctor’s office visit, whether you’re there for a checkup, an earache or a bruised knee. Frequent readings allow your doctor to keep a record of your blood pressure, making it easier to spot negative trends.
MedBen WellLiving program members have an additional ally in their corner. If you are at risk for hypertension, an RN Health Consultant will contact you to offer customized education and regular counseling.
The House of Representatives yesterday voted 239-186 to repeal the Affordable Care Act. The vote fell mainly along party lines, with three Republicans voting against the bill, and no Democrats supporting it.
The legislation also calls for panels to develop a replacement for the current health care reform law. (According to the Associated Press, several Republican lawmakers expect to unveil an alternate plan on February 5.)
While the House has voted on 55 similar bills in the past two years, this is the first such vote in which Republicans held a majority in both houses of Congress. However, the party still lacks enough votes to pass the bill in the Senate without Democratic support -- and even if the bill somehow makes it through Congress, President Obama would almost certainly veto it.
On the NPR It's All Politics blog, S.V. Date notes that this bill is also distinctive in that it's the first time the GOP has voted to repeal the ACA since the introduction of insurance marketplaces in the Fall of 2013: "House Republicans plan to vote on whether to actually take health coverage away from millions of Americans who now have it."
But the chief sponsor of the repeal bill, Rep. Bradley Byrne (R-AL), countered that opinion polls showed that a majority of Americans had unfavorable views of the law.
“I don’t believe Obamacare can be fixed through piecemeal reforms,” Mr. Byrne said. “The only way to get rid of this harmful law is to repeal Obamacare in its entirety.”
A new study offers a sobering reminder that practicing healthy habits won't simply improve your lifestyle -- it'll potentially save you a bundle of cash to boot.
MedCity News reports that economists at the Centers for Disease Control and Prevention (CDC) reviewed data of diabetes management costs from 1987, 2000-2001 and 2010-2011. They found that an average diabetes patient now spends $2,790 a year more than in 1987 -- more than double the old cost.
To be sure, much of the additional spending can be attributed to the rising prices of newer diabetes drugs. But that doesn't tell the whole story.
Tim Dall, a managing director with IHS Life Sciences who studies the economic side of diabetes care (and who was not involved in the CDC study), said the American Diabetes Association has previously found that “a large portion of diabetes-related costs are associated with the complications of diabetes rather than with treating diabetes itself,” according to Reuters.
While diabetes patients are getting better care and living longer, the spending spike is nonetheless troubling, said CDC health economist and study leader Xiaohui Zhou: “This growing trend of diabetes cost is simply unsustainable. Besides the efforts to bend the treatment cost, the efforts to reduce the number of future diabetes patients are imperative.”
MedBen WellLiving was designed toward that very goal of lowering an individual's risk of developing diabetes and other chronic conditions. Through our Specialty Care Program, patients who are determined to be at risk are contacted by a RN Health Consultant and offered customized, confidential health coaching and education.
Specialty Care is just one element of MedBen WellLiving, however. Our total wellness strategy promotes awareness of personal health, as well as the importance of the doctor-patient relationship in preventing long-term complications from unmanaged health conditions.
To learn more about how MedBen WellLiving can help your employees stay healthy and save money, contact Vice President of Sales & Marketing Brian Fargus at firstname.lastname@example.org.
In her capacity as Chair of the Licking County Chamber of Commerce, MedBen Vice President of Compliance Caroline Fraker served as emcee for the Chamber's 59th Annual Groundhog Breakfast on January 30. Fraker joined the Chamber Board of Directors in 2011 and was named Chair last September.
As emcee, Fraker introduced the event's presenters and performers, including its guest speaker, Lt. Col. Steve Russell. A former U.S. Army infantry officer who served in Kosovo, Kuwait, Afghanistan, and Iraq, Russell and his unit led the hunt and capture of former Iraqi leader Saddam Hussein. He also served in the Oklahoma Senate.
This year's event was also noteworthy as it commemorated the Chamber of Commerce's 100th anniversary. Federal, state and local representatives appeared in person to formally recognize the Chamber for its continued contributions to the community.
Speaking of which... MedBen also wishes to congratulate the Chamber of Commerce for 100 years of service to Licking County. So much so, in fact, that we've put together a special tribute video to show our appreciation!
The 2015 season of MedBen University will soon be in session! This promises to be one of the most extensive years for MBU ever, with a variety of events scheduled for the first half of 2015 alone.
If you’ve never had the opportunity to attend a MBU, we encourage you to join us at an upcoming session. Not only will you receive practical guidance about health care planning and timely information regarding regulatory developments, you’ll have the opportunity to pose questions to a team of benefit management professionals and discuss coverage concepts with other self-funded employers. And you're welcome to attend even if you're not a current MedBen client!
The following seminars will be held at the C. Arthur Morrow Conference Center, 1821 W. Main St., Newark, Ohio (located next to the MedBen home office):
Self-funding and the Affordable Care Act
Thursday, February 26
With the introduction of the ACA’s employer mandate and required benefit and plan changes, 2015 promises to be a challenging year for self-funded groups. We’ll highlight the new health care reform rules you need to know about and how to best comply with them – and help you steer around the law’s financial potholes.
Wellness in the Workplace
Thursday, May 14
With client worksite wellness programs in place for nearly a decade, MedBen has gained expertise on how an increased focus on preventive care and lifestyle changes can benefit workplace health and productivity, as well as the employer’s bottom line. We’ll produce useful advice for businesses thinking about implementing a wellness program and share success stories that current wellness clients can adapt to their own programs.
MedBen is among the companies spotlighted in a Newark Advocate article about methods employers use to motivate their workers toward better health.
As part of the company's wellness strategy, MedBen encourages its team to practice healthier lifestyles. One of the ways we do that is through our BeneFITNESS program, which rewards employees who exercise regularly with extra contributions to their HRAs. Advocate writer Kent Mallett highlights a recent BeneFITNESS addition:
"MedBen provides its 157 employees a 30-minute boot camp training three times a week at no charge.
"Caroline Fraker, vice president of compliance at MedBen, said the training takes place at the company's adjacent Morrow Conference Center, the former Bake 'N' Brew building.
"'We started it last year when the Advantage Club closed,' Fraker said. 'We had so many people going to the Advantage Club because it was so close. It's super easy. People can walk next door.'
"MedBen also subsidizes the cost of gym memberships at any location."
As Fraker notes, the closure of a nearby health club – one within walking distance of the MedBen home office and convenient for lunchtime workouts – prompted management to modify the company's wellness incentive program. By introducing the noontime boot camp at the conference center, employees continue to have easy access to exercise in a casual and supportive environment.
The boot camp is just one aspect of MedBen BeneFITNESS. Employees can also get rewards for gym workouts and walking programs, and participate in weight loss challenges and other special events.
Of course, for MedBen BeneFITNESS is more than an internal consideration – it also serves as a testing ground of sorts for the company's WellLiving program, which is available to employer groups. By "walking the walk," as it were, we can offer first-hand experience to our clients on ways they can incentivize their own employees to get fit... and have fun in the process!
We've read a fair amount of opinion pieces lately that question the need for an annual physical examination. Invariably, they come down to the same premise: Does the money saved from detecting a serious condition in its early stages offset the cost of preventive care for an entire population – many of whom may not have a major illness until later in life?
On LinkedIn, David L. Katz, MD, MPH, President of the American College of Lifestyle Medicine, addresses head-on the short-sighted approach of such thinking:
The annual exam may be the only real opportunity for lifestyle counseling in a healthy person. It may, at least occasionally, be part or even much of the reason that person remains healthy over the years. But again, that won’t show up as data in favor of the annual exam. It will only add to the tally of absent data – a bad outcome that doesn’t occur for reasons that are hard to discern.
The salient point here – and one that MedBen considers a cornerstone of its WellLiving program – is that preventive care is just one part (albeit an important one) of the wellness exam. Equally critical is the opportunity to establish a dialogue with a doctor about the patient's health, with yearly follow-up meetings. In this way, the doctor is more likely to detect crucial health changes, and the patient is more likely to feel comfortable about discussing areas of concern.
MedBen WellLiving subscribes to the "physician-first" approach. We believe that the doctor-patient connection is key to continued good health and lower care costs, which is why we promote office testing over on-site biometrics that lack the relationship dynamic and motivation to make improvements – and moreover, may lead to redundant testing.
But we also understand that the employer expects viable results from a wellness program. To meet this need, MedBen measures wellness success using multiple factors, including the member population's risk of developing a chronic condition, its compliance with recommended wellness tests, and its cost per member for each specific condition. We track these factors using a sophisticated reporting platform and analyze the numbers with our wellness clients on a regular basis to ensure that the program is fulfilling expectations.
In his State of the Union speech last night, President Obama touched on the progress of his signature legislative achievement. Business Insurance reports:
"Mr. Obama defended the Patient Protection and Affordable Care Act, pointing out that roughly 10 million Americans have gained coverage under its provisions and that the level of uninsured has dropped significantly since full implementation of the law.
“'We can't put the security of families at risk by taking away their health insurance, or unraveling the new rules on Wall Street, or refighting past battles on immigration when we've got a system to fix,' Mr. Obama said, speaking before a packed audience in the House chamber at the Capitol. 'And if a bill comes to my desk that tries to do any of these things, it will earn my veto.'”
And in their response to the President's remarks, Republicans restated their vow to eliminate the health care reform law altogether:
"Newly elected Sen. Joni Ernst (R-Iowa) criticized the reform law for canceling healthcare plans and claimed it has raised premiums and 'hurt … hardworking families.'
"'Americans have been hurting, but when we demanded solutions, too often Washington responded with the same stale mindset that led to failed policies like ObamaCare,' Ernst said in the GOP's rebuttal to Obama's speech.
"'We’ll … keep fighting to repeal and replace a healthcare law that’s hurt so many hardworking families,' she said."
While only a small percentage of small companies (100 or less full-time employees) currently self-fund their health care plan, the Affordable Care Act has created multiple regulatory incentives that has prompted more of them to consider making the switch from fully-insured coverage. And MedBen offers a variety of self-funding options to make the transition easier!
The Brookings Institution, a independent research organization, recently highlighted the five main regulatory benefits that small firms derive from self-funding their health care plan:
Additionally, self-funding allows for greater flexibility than traditional insurance policies, and total costs for such plans are generally lower.
Cara Delcher, a MedBen veteran for nearly three decades, is heading to the west coast… but, we’re happy to announce, will remain with the company.
Because the Delcher family will soon move to Los Angeles, Cara is stepping down from her current full-time position as Vice President of Risk Management and Quality Systems. However, she has accepted a new part-time role as Senior Business Analyst and Quality Coordinator.
“As sad as we are to see Cara leave our home base here in Ohio, we’re also pleased that she will still serve our clients from our new ‘satellite office’ in California,” said Doug Freeman, MedBen Chairman and CEO. “She’s been an important part of MedBen’s growth from its earliest days as a mutual company, and I hope she will continue to be so for many years to come.”
In her new role, Delcher will work as a member of MedBen’s Information Systems department and will play a key part in the development of the company's new service offerings. She will also continue to offer her expertise to co-workers on data analysis, reporting, risk management, quality-related functions and other duties.
Delcher joined MedBen as a Systems Coordinator in 1987, and was named a Vice President in 1992. She played a leading role in the company’s achievement of ISO 9001 certification in 2005, as well as its ensuing recertifications.
Cara and her husband Mark will soon relocate from their current residence in Newark with their daughter Hannah. Their adult sons Alex and Chris will remain in Ohio.
Delcher's last day working in-house will be Friday, January 16, but she can still be contacted following the move at email@example.com. We know you join us in wishing Cara well on this exciting new chapter in her life!
Despite this year's introduction of the employer mandate and uncertainty about the Affordable Care Act in general, most employers say they're committed to providing group health care coverage for the foreseeable future, a recent study finds.
Employer Benefit News reports that just 1% of the more than 3,300 HR professionals surveyed say they are planning to cut health coverage to their employees. For employers with less than 50 employees -- the segment many believed would end coverage when the employer mandate took effect -- just 2% planned to drop their plans, said Andrew Mariotti, a senior researcher at the Society for Human Resource Management, which conducted the study.
“It appears that health care benefits are still considered very important by our members for both attracting and retaining prospective employees and current employees,” Mariotti said.
In a separate Mercer survey, 4.4% of large employers say they will cease offering employees coverage over the next five years, down from the 6% prediction offered in 2013. Also, just 16% of small employers, those in the 50-199 employee range, plan to drop their plans, a drop from 2013’s 23%.
Lower health care cost trends are a major factor in the willingness of employers to continue self-funding their cpverage, said Beth Umland, director of employer research for health and benefits at Mercer: "Because employers feel like they have some tools to manage costs, it’s easier for them to picture continuing to offer their benefits programs into the future.”
The name notwithstanding, you usually don’t catch a cold simply by spending too much time in the wintery weather. Rather, the common cold is caused by a variety of viruses, which can be transmitted either by airborne droplets or by direct contact with contaminated objects.
Because of the sheer number of viruses lurking about, no person can develop complete immunity from colds, and no vaccine is available. Bottom line, if you’re a living, breathing human being, you’re going to have at least one cold this year... and probably more, depending on your age. Infants and young children are particularly susceptible.
Colds typically last about a week to 10 days. Symptoms include cough, headache, sore throat, nasal congestion, runny nose, and sneezing. You may also experience a mild fever, but if your temperature reaches higher than 101 degrees, you may actually have the flu – in which case you should probably pay a visit to your family doctor.
Even though there is no known cure for a cold, that doesn’t mean you can’t take steps to hasten its departure. Stick to such tried-and-true remedies as bed rest, fluids and chicken soup. Avoid antibiotics – they don’t work against viruses. And while lozenges and cough syrup may help relieve symptoms, they do nothing to shorten a cold’s duration. Your best bet is to get some sleep and help your body beat the bug!
In a 252-to-172 vote, the Republican-led House of Representatives yesterday approved a bill that would modify the Affordable Care Act's definition of "full-time employee" from 30 hours of work a week to 40 hours. Reuters reports that only 12 Democrats broke from their party to support the measure.
The legislation will move to the Senate, which now also holds a Republican majority. But if or when the Senate takes up the measure is likely immaterial, as President Obama threatened Wednesday to veto it.
Dan Danner, president of the National Federation of Independent Business, feels that raising the benchmark would reduce pressure on smaller companies. “By defining down the definition of full-time work, the law creates a terrible dilemma for small businesses,” he said. The U.S. Chamber of Commerce, the International Franchise Association and the National Restaurant Association have also supported the change.
White House press secretary Josh Earnest countered that the measure "would actually do a lot of harm" by putting more workers in danger of having their hours cut back. Additionally, the Obama administration has estimated that raising the eligibility criteria would cost about one million employees their current health care.
The House also voted in favor of a second bill that would permit small businesses to hire military veterans but not count them toward their company's total under the ACA, thereby making it easier for them to remain under the law's "pay or play" penalty mandated for employers with 50 or more workers.
According to The Washington Post, the bill's backers say the exemption would encourage small businesses to hire more veterans, who already receive health care coverage through the Defense Department or Verterans Administration. Similar legislation was passed by the House last year, but the Democratic-led Senate shelved the measure.