Tag Archives: employee benefits

Infographic highlights trending compensation benefits for healthcare workers during COVID-19 pandemic

Healthcare workers on the front lines of the COVID-19 crisis are treating patients around the clock to help them recover. As a result, many workers have fallen ill and been forced to quarantine indefinitely, while some have even lost their lives. In the United States, hospitals, clinics, and other healthcare organizations are adjusting their benefits and compensation policies to support their employees during these uncertain times.

The following infographic highlights results from the Milliman Northwest Healthcare COVID-19 Pulse Survey, which summarizes key actions local healthcare employers are taking to address issues in the face of the coronavirus pandemic. For more perspective on the survey and benefits and compensation landscape, read Lauren Busey’s article “Managing benefits and compensation for healthcare workers in the time of COVID-19.”

This blog post first appeared on Retirement Town Hall.

Retiree health cost estimates for 2020

The potential cost of healthcare as a retiree is important to consider well before an employee decides to retire. These costs can change as a result of regulations, inflation, new drugs, health risks, etc. Each year, Milliman develops estimates of retiree health costs in order to educate employees and retirees about the potential cost of healthcare over the course of retirement. This post outlines four different scenarios of projected costs to help prospective retirees plan appropriately.

(1) Projected costs for a healthy 65-year-old couple retiring in 2020

A healthy 65-year-old couple retiring in 2020 is projected to spend approximately $351,000 in today’s dollars ($535,000 in future dollars) on healthcare over their lifetime. Expenses at age 85 are estimated to be 234% higher than at age 65.

(2) Projected costs for a healthy 45-year-old couple

A healthy 45-year-old couple is projected to spend approximately $505,000 in today’s dollars ($1.4 million in future dollars) on healthcare over their lifetime.

Both scenarios (1) and (2) above have calculated these projected costs using the following assumptions:

  • The health statuses of the retiree and spouse are assumed to be average for their entire life spans.
  • The retiree and spouse are assumed to be male and female with life spans of 88 and 90, respectively.
  • Nationwide average premiums and out-of-pocket expenses from a retirement age of 65 through life span for a Medicare Supplement Plan G and a standard Medicare Part D plan are used.
  • Future medical trend is assumed to be 4.9% per year. This assumption is based on long-term estimates from a Society of Actuaries model, supplemented with Milliman research and converted to an annual equivalent rate.
  • For calculations of present values in today’s dollars, investment return of 3.0% per year is used.
(3) Average premium plus out-of-pocket cost at age 65

The estimated 2020 annual premium plus out-of-pocket cost for a healthy 65-year-old is $4,700.

Scenario (3) has calculated the out-of-pocket cost using the following assumptions:

  • The health status of the retiree is assumed to be average. The average is based on a typical commercially insured population based on the Milliman Health Cost GuidelinesTM.
  • A male or female age 65 is assumed.
  • 2020 nationwide average premiums and out-of-pocket expenses at age 65 for a Medicare Supplement Plan G, Medicare Part B, and a standard Medicare Part D plan are used, based on the Milliman Health Cost Guidelines and premium information obtained from the Centers for Medicare and Medicaid Services (CMS).
(4) Portion of Social Security benefit spent on healthcare

A healthy 67-year-old couple is projected to spend 34% of their Social Security benefit on healthcare in 2020.

Scenario (4) calculations are based on the following assumptions:

  • The health statuses of the retiree and spouse are assumed to be average. These averages are based on a typical commercially insured population based on the Milliman Health Cost Guidelines.
  • The retiree and spouse are assumed to be male and female.
  • 2020 nationwide average premiums and out-of-pocket expenses at age 67 for a Medicare Supplement Plan G, Medicare Part B, and a standard Medicare Part D plan are used, based on the Milliman Health Cost Guidelines and premium information obtained from the CMS.
  • The December 2018 average monthly Social Security benefit at age 65-69 of $1,432.02 for retirees and $849.81 for spouses is used, with adjustments to 2019. Social Security cost of living adjustments of 2.8% in 2019 and 1.6% in 2020 are used.
Conclusion

The healthcare marketplace is volatile, partially due to legislative and regulatory changes, as well as the state of the drug pipeline, among other factors. Actuarially derived health cost estimates can help employees plan for the future and ensure that their retirement account is funded appropriately to reach the healthcare needs of the future.

This article first appeared in the Health and Group Benefits News and Developments: April 2020.

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Trending in parental and family leave benefits

With an increasingly competitive talent market and changing employee demographics, employers are taking a closer look at their total benefits packages to understand what is driving prospective employees’ wants and needs, particularly relating to parental leave. State and local laws are also changing quickly, creating a regulatory maze that can be difficult to navigate. Milliman conducted a What’s Trending benefits pulse survey specific to parental leave benefits to get a sense of what employers are currently doing and considering in this space.

Parental leave benefits: Results

The results of a 2019 Milliman pulse survey confirmed that many employers are experiencing the issues of complex compliance as a result of changing laws and a competitive talent market demanding more robust leave benefits. Despite these pressures, there was little change in action from 2018 to 2019. Similar proportions of employers to those shown in Figure 1 are considering changes in 2020. Both parental leave benefits that are available regardless of employee gender or birth parent status and paid parental leave separate from vacation/sick time are popular for a significant minority among responding organizations.

For those who responded, the number of weeks of available leave increased for both birth and non-birth parents from 2018 to 2019 for the 6-11 weeks and 12+ weeks categories. Yet the percentage of pay decreased slightly.

Family leave benefits

More employers are considering paid family leave benefits in 2020 that are separate from, and in addition to, paid time off (PTO) or vacation/sick time, and above and beyond the care for newborns/newly adopted children. While only 9% of respondents in 2019 (5% in 2018) said they currently offer this benefit, 23% of respondents said they were considering offering it for 2020. Similar to parental leave, the number of weeks offered is trending up while the percentage of pay is trending down.

Conclusion

With competitive and regulatory pressures on employers to shore up parental leave programs, relatively few are taking definitive action. Of those that are, mitigating the potentially significant cost increases by lowering the percentage of pay while increasing the number of weeks of leave is a common strategy. As state and local laws continue to evolve, employers will need to pay special attention in order to ensure compliance.

This article first appeared in the Health and Group Benefits News and Developments: April 2020.

If you would like to receive the Health & Group Benefits newsletter directly, send an email here.

COVID-19: 8 Tips for improving employee communication in a time of crisis

In uncertain times, clear and consistent communication is more important than ever. Now is not the time to go radio silent ― even if you don’t have all the answers. Frequent touchpoints can help decrease stress and provide reassurance during challenging times.  

Try these tips to stay in touch with your employees.

  1. Be open and honest. If there was ever a time for direct and down-to-earth messaging, it’s now. Provide answers if you have them, and be honest if you don’t.
  2. Update often. Sometimes less is more, but right now employees want―and need―to hear from leadership on a regular basis. Don’t wait until you have all the answers. Give updates as soon as you have them.
  3. Step outside your communication comfort zone. Your tried-and-true communication channels may not work. Look for new ways to reach employees.
    • Podcasts: People like to consume information or entertainment in short bursts. According to the New York Times, about one in three Americans listens to podcasts. Podcasts can be produced quickly, which allows you to respond nimbly to changing conditions. For example, Milliman released a podcast to retirement plan participants in response to recent market volatility.
    • Virtual meetings: With restrictions on group face-to-face gatherings and travel, people are turning to virtual meetings―especially those with a video component―as a replacement. When Milliman clients needed to cancel in-person group meetings and one-on-one consultations with our Retirement Educators, our Meeting Services team provided a virtual solution.
  4. Move quickly. In a rapidly changing situation, your communication needs to keep up the pace. Podcasts and websites are efficient ways to provide updated information. For example, Milliman added a COVID-19 resource page on our financial wellness website, which included:
    • Tips to settle nerves, stay informed, and make wise financial decisions
    • A link to download the “What To Do When … The Market Declines” podcast
    • A video that covered what to remember when the market takes a downturn
  5. Note the date and time. It’s a good idea to date- and time-stamp your materials. When things are changing on an hour-to-hour basis, people need to know what information is the most timely.
  6. Provide resources. Reassure employees that help is available. Direct them to resources like your Employee Assistance Program (EAP), mental health benefits, and financial education. Consider posting Frequently Asked Question (FAQ) updates, such as:
    • Are telemedicine visits covered?
    • How do I change my prescription to mail order?
    • Where can I get help to manage my child’s anxiety?
    • How do I change my 401(k) contributions?
  7. Change course if you need to. You may need to interrupt your regularly scheduled programming. Are the messages timely and do they still make sense in the current environment? Or do employees need to hear something else? In response to the market declines, we replaced the March retirement plan participant email with an email about market volatility.
  8. Cut through the clutter. Make your communication easy to understand and avoid business jargon. Break down complicated concepts by using bullets, charts, and infographics. For example, we helped retirement plan participants understand the impact of the Coronavirus Aid, Relief, and Economic Security (CARES) Act with a chart that organized the details into logical components―what you need to know, the deadline to request relief, and how to apply for help.

This blog post first appeared on Retirement Town Hall.

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.