Tag Archives: employee benefits

Seven simple steps to a stress-free enrollment

When it comes to open enrollment, communication matters. But is it working? Many employers don’t think so. A recent survey by the International Foundation of Employee Benefit Plans found that 80% of organizations think employees don’t open or read materials. And 49% think employees don’t understand the content. So what’s the solution? Try these tips to get your messages across.

1. Look at last year. Consider the feedback you got on last year’s campaign. Which communication pieces resonated? Which fell flat? Take a look at the questions employees raised and work those into your materials for this year.

2. Define success and then measure it. Determine what a successful campaign looks like. What are your goals? Do you want a certain number of employees to enroll in a medical plan or use the online tools? After enrollment, look at the numbers and gather employee feedback via focus groups or an online survey to guide future campaigns.

3. Cut the clutter. People don’t want to weed through a 50-page brochure to find information. Remember that readers are used to quickly scanning an article for the high points. Break up paragraphs into bullet points, pull important details into callouts, and use infographics in place of long-winded narratives.

4. Know your purpose. Start with what you want your communication piece to do and let that drive the format. For example, if you want to educate, use FAQs and examples. If you want to inspire employees, feature testimonials.

5. Use straight talk. Don’t try to sugarcoat change messages. Clearly explain what’s happening, why it’s happening, and when it’s happening. Change can be hard, but you have to be honest with employees to earn their trust.

6. Start early and communicate often. Give employees a heads-up early on, especially if you’re making major plan design changes. Announce key dates, such as when enrollment will be and when employee meetings will be held. As the deadline approaches, remind employees to take action.

7. Go for variety. Reach your employees with a variety of media to appeal to generational and personal preferences. For example, if you’re explaining a new high-deductible health plan, you might mail employees a print piece to their homes, post a video online, and walk through the new plan at employee meetings.

If you need additional support, be sure to talk with your Milliman communication consultant.

This article first appeared on RetirementTownHall.com.

Managing autism treatment in self-funded plans

Self-funded plans frequently deal with issues at the intersection of physical health, behavioral health, medical science, and government regulation. One emerging issue that relates to each of these areas is Applied Behavior Analysis (ABA) treatment for autism spectrum disorders (ASD).

ABA is one of the fastest growing state benefit mandates. Today, 46 states mandate some form of autism coverage with varying degrees of benefit coverage and limits. ABA is a prime example of the type of coverage required by state mandates.

The prevalence of ASD has risen precipitously. In the early 1980s, population prevalence was estimated at 0.05% (five of 10,000 children). The most recent studies estimate prevalence to be 1.5% (one in 68 children). Traditionally, commercial insurers excluded or minimally covered treatment for ASD. However, more recent federal mental health parity laws and essential health benefit requirements (EHBs) of the Patient Protection and Affordable Care Act (ACA) have served to increase access to ASD treatments.

ABA is a behavioral strategy to improve socially significant behaviors to a meaningful degree. Targeted behaviors include adaptive living skills such as gross/fine motor skills, social skills, communication, reading, eating, and dressing. The ABA treatment regimen typically involves highly structured, intensive interventions for up to 30 or 40 hours per week. The course of treatment can last many years, from diagnosis at early ages (e.g., ages 3 to 4) through adolescence (and sometimes beyond).

While self-funded employer-sponsored plans are not required to comply with state mandates under federal law (ERISA), they are not immune from the trend toward greater ABA coverage driven by state mandates for insured plans.

Challenges for self-insured plan sponsors include:

Medical necessity. Medical carriers will often advise that ABA is not medically necessary for its self-insured customers but will cover it for its insured business to meet state mandate requirements. This makes it difficult for plan sponsors to explain to members why it is not covered under their plan.
Cost. Assuming conservatively the average age of diagnosis is 4 years and average age of completion is 15 years, adding this benefit can be a long-term expense to the plan. Cost estimates range between $25,000 and $50,000 per case per year.
Utilization management. If plan sponsors decide to cover ABA, then it is important to make sure members access school-/community-based services, which play a significant and progressive role in offsetting plan costs.
Network management and provider credentialing. As demand for ABA services grows, plan sponsors may want to review credentialing and network utilization to assure ongoing access to qualified providers for these services.
Compliance. Plan sponsors must not run afoul of the Mental Health Parity and Addiction Equity Act (MHPAEA), which prohibits plans from restricting mental health benefits more so than physical health benefits.
Related benefits. Even if a plan specifically excludes coverage for ASD treatment and diagnosis, members with autism are most likely already receiving related functional health benefits such as physical therapy and speech therapy (habilitative and rehabilitative). It is important to understand the interconnectedness of benefit administration and the underlying equities.

The increasing prevalence of ASD, the growth in state ASD benefit mandates, and the widespread treatment of ASD through ABA can affect self-funded plan sponsors, requiring them to think comprehensively about balancing member needs and access with care cost and care management.

This article first appeared on LaborPress.org.

Top 15 global articles and reports for 2017

Milliman’s most viewed articles worldwide in 2017 covered topics related to healthcare in the United States, the rise of InsurTech, and the challenges of IFRS 17. (For summaries and links to all of the articles, click here.)

Here is the list of the top global articles and reports for the year:

15. MACRA: Key Considerations for health plans, By Colleen Norris and Mary van der Heijde

14. Multiemployer Pension Funding Study, By Kevin Campe

13. The American Health Care Act, By Jason Karcher

12. MACRA and Medicare Advantage plans: Synergies and potential opportunities, By Christopher Kunkel, Drew Osborne, Lynn Dong, Michael Polakowski, Noah Champagne, and Charlie Mills

11. Effective employee communication: The benefits of best practices, By Jessica Gonchar, Heidi tenBroek, and Sharon Stocker

10. Building blocks: Block grants, per capita caps, and Medicaid reform, By Justin Birrell, Jennifer Gerstorff, Nicholas Johnson, and Brad Armstrong

9. Overview and practical considerations of the new insurance contract standard: IFRS 17, By Gillian Tucker and Andrew Kay

8. InsurTech: Innovation in the P&C insurance space, By Thomas Ryan

7. The employer stop-loss insurance marketplace since the Affordable Care Act, By Mehb Khoja

6. 2017 Public Pension Funding Study, By Rebecca Sielman

5. Summary of individual market enrollment and Affordable Care Act subsidies, By Paul Houchens, Jason Clarkson, and Zachary Fohl

4. Impact of the transition from RAPS to EDS on Medicare Advantage risk scores, By Deana Bell, David Koenig, and Charlie Mills

3. Corporate Pension Funding Study, By Zorast Wadia, Alan Perry, and Charles Clark

2. Pension Funding Index, By Zorast Wadia and Charles Clark

1. Milliman Medical Index, By Christopher Girod, Susan Hart, and Scott Weltz

The power of personalization

tenBroek-HeidiKernich-DanaMaking decisions about health coverage is difficult. Medical jargon, network limitations, and vague pricing contribute to the minefield of confusion experienced by even educated employees. According to a recent survey, only 14% of Americans can accurately define basic healthcare terms such as deductible, copay, coinsurance, and out-of-pocket maximum.1 In order to be smart consumers of healthcare—making the best decisions for themselves and keeping costs in check for employers footing the majority of the bill—employees must be able to understand the coverage offered to them. Personalizing health coverage communications can help employees, and ultimately their employers.

Marketers have demonstrated for years that personalization works:

• Personalized emails deliver six times higher transaction rates (customer actions such as sales or subscriptions) than non-personalized emails2
• 73% of consumers prefer to do business with companies that use personalization to make their shopping experience more relevant3
• 86% of consumers say personalization plays a role in their purchasing decisions4

If it works, use it! Personalized materials provide more focus for better decision making and leave employees feeling less overwhelmed by confusing information. Creating these materials isn’t as difficult as employers might think. Here’s an example of how an employee enrolled in a standard preferred provider organization (PPO) plan could be introduced to the potential cost savings of a high-deductible plan:

The power of personalization

1Lowenstein, G. (September 2013). Consumers’ misunderstanding of health insurance. Journal of Health Economics 32, no. 5: 850-862.
2Experian Marketing Services (December 2013). 2013 Email Market Study: How Today’s Email Marketers Are Connecting, Engaging and Inspiring Their Customers. Retrieved February 11, 2016, from http://www.experian.com/assets/marketing-services/white-papers/ccm-email-study-2013.pdf.
3 Nasri, G. (December 10, 2012). Why consumers are increasingly willing to trade data for personalization. DigitalTrends.com. Retrieved February 11, 2016, from http://www.digitaltrends.com/social-media/why-consumers-are-increasingly-willing-to-trade-data-for-personalization/#ixzz2g8dgrqko.
4Infosys (December 2013). Study: Rethinking Retail: Insights From Consumers and Retailers Into an Omni-Channel Shopping Experience. Retrieved February 11, 2016, from https://www.infosys.com/newsroom/press-releases/Documents/genome-research-report.pdf.

President signs bill with “Cadillac tax” delay and other benefit provisions

On December 18, the president signed a bill (H.R.2029) that funds federal agencies for the remainder of the 2016 fiscal year and extends numerous popular expired, or expiring, tax provisions. The “Consolidated Appropriations Act, 2016” (P.L.114-113) contains several employee benefit provisions:

• “Cadillac tax”: The law delays for two years, until 2020, the application of the Patient Protection and Affordable Care Act (ACA) 40% excise tax on high-cost employer-sponsored healthcare coverage that was set to go into effect in 2018.

• The 2018 applicable dollar limits (generally, $10,200 for self-only coverage and $27,500 for other than self-only coverage) will continue to adjust according to changes in the Consumer Price Index in the period to 2020.

• The tax will be deductible for tax-paying entities.

• The law calls for a study on suitable benchmarks for the age and gender adjustment of the excise tax.

Mass transit passes: The law permanently extends parity for the exclusion from income for employer-provided transit passes and vanpool benefits with qualified parking benefits, retroactive to January 1, 2015. Thus, the excludable amount for 2015 will be $250 per month. In 2016, the amount increases to $255 per month.

Annual fee on health insurance issuers: The law waives this annual fee that applies to “covered entities” for calendar year 2017 only, and collections resume after December 31, 2017. A covered entity is one engaged in the business of providing health insurance and does not include self-insured employers, governmental entities, certain nonprofit corporations, and certain voluntary employees’ beneficiary associations (VEBAs). The fee typically is passed on to employers that purchase fully insured coverage.

Despite efforts by some lawmakers to include a delay or prohibition of the U.S. Department of Labor’s regulation on retirement plan advisors’ conflict-of-interest/fiduciary definition, no such provision is included in the new law.

In other employment-based areas, the law modifies the filing dates of Internal Revenue Service (IRS) Forms W-2, W-3, 1099, and similar wage/compensation information; clarifies certain tax rules for church retirement plans; and extends various tax credits (e.g., Work Opportunity) and wage credits (e.g., for wages paid to employees on active military duty).

For additional information about the employee benefits and related provisions of the law, please contact your Milliman consultant.

IRS releases guidance on tax issues relating to same-sex married couples

The Internal Revenue Service (IRS) has released guidance that, for all federal tax purposes, treats same-sex couples who were legally married in jurisdictions that recognize their marriages no differently from opposite-sex married couples. The guidance, which comes in the form of Revenue Ruling 2013-17 and Answers to Frequently Asked Questions (FAQs), will apply regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriages.

The new guidance implements the June 2013 decision reached by the U.S. Supreme Court, which concluded that the 1996 Defense of Marriage Act’s definition of “marriage”—between a man and a woman—is unconstitutional. The IRS’s guidance applies to all federal tax provisions where marriage is a factor, including employee benefits. The ruling also clearly states that, for federal tax purposes, “marriage” does not include registered domestic partnerships, civil unions, or other similar formal relationships, regardless of whether the individuals in such relationships are of the opposite sex or the same sex.

The IRS’s ruling provides guidance on filing a 2013 individual federal income tax return, filing amended returns for tax years that remain open under the statute of limitations (generally, 2012, 2011, and 2010), and claiming amounts paid for their same-sex spouse’s health insurance as a pretax, rather than after-tax, item.

For employee benefit plan sponsors and administrators, the IRS intends to issue separate guidance on filing refund claims for payroll taxes paid. The agency also will provide guidance on how cafeteria and qualified retirement plans should treat same-sex spouses for periods before September 16, 2013, the application date of the newly released ruling, as well as plan amendment requirements and any necessary corrections. In the meantime, the IRS’s FAQs indicate that employers may file a claim for a refund for the Social Security and Medicare taxes paid on health insurance premiums that employees paid on an after-tax basis for their same-sex spouse.

For additional information about applying the IRS’s guidance to employer-sponsored benefit programs, please contact your Milliman consultant.