Making Better Decisions Using Key Performance Indicators

Too often when buying health insurance, companies will try to simply manage the expense.  While this is a good idea, it only covers a portion of what really matters.  Let me explain.

When employers offer benefits to their staff they are usually trying to accomplish something.  It could be better recruitment efforts or increased retention or improved employee engagement or higher productivity or taking care of their staff who are more like family.  You get the picture.  This is a great place to start.  If you’re going to spend a lot of money on something, you want to make sure it has a goal in mind.  The problems comes when employers aren’t clear about what they want it to accomplish or, if they are clear, fail to measure if they are getting that Return on Investment.  If only 20 percent of your staff value your benefit program then you’re throwing a lot of money down the drain.

Sure, the monthly premium you pay is an important piece to consider.  But, don’t forget to measure what you’re ultimately trying to buy: loyalty, engagement, productivity, better staff...whatever it is.  Be clear about it and don’t forget to measure it.

What are you doing to measure your return?  Share your experience in the comments.

Holly Parsons with The Wilson Agency, a full service strategic employee benefits consulting firm, helping Alaskan businesses to develop an organized approach to complex employee initiatives.

The Wilson Agency, LLC 3000 A Street, Suite 400 Anchorage, Alaska 99503

907.277.1616 info@thewilsonagency.com

An Uncommon Solution for Rising Costs

Last week Commonwealth North sponsored a luncheon on the topic of “Private Sector Solutions to the Cost of Care.”  It featured four speakers from large Alaskan employers who talked about their strategies and ideas to keep the cost of health care low.  One idea in particular was intriguing, effective and commonly underutilized both by employers who fail to offer it or know it’s available and by the employees themselves, who don’t understand, remember or have a reason to care.  That solution was an advocacy program.


An advocacy program helps individuals resolve claim issues, coordinate care, locate physicians, answer questions about prescriptions, compare costs for services, and more.  While these programs have a price tag associated with it, the program can be a great assistance to employees and ultimately affect the employer’s bottom line through increased productivity and decreased expenses.  One example given was an employee who had knee surgery in Utah rather than Alaska because of the extreme price difference. That kind of cost variation makes a big impact to an employer’s bottom line at renewal time. The whole thing, including the initial research, was coordinated through their advocacy program at no additional cost.


If you do consider putting an advocacy program in place, it’s important to educate and remind employees about it.  As with all benefits, we undervalue and forget them…unless needed or we’re told. 


In the end, we all still seem to be looking for the silver bullet, but a program like this can make a big difference at a small price.  Have you tried an advocacy program?  Tell us about your experience in the comments below.

The Wilson Agency, LLC 3000 A Street, Suite 400 Anchorage, Alaska 99503

907.277.1616 info@thewilsonagency.com

PPACA Ruling Answers Some Questions, Leaves Others Hanging

The wait is over -- sort of.

Companies that had been delaying action on the Patient Protection and Affordable Care Act (PPACA) should now start making plans to comply, experts say. Yet while the Supreme Court's 5-4 ruling in June preserved the law, the full impact of PPACA's regulations remains to be seen.

For now, employers should prepare to meet the most immediate requirements, according to the law firm Morgan Lewis. In a recent web posting, the firm notes that companies should pay attention to the provisions that apply in 2012 and 2013, including:

• Reporting medical coverage value on 2012 W-2s
• Preparing to receive and properly distribute any medical loss ratio rebates
• Preparing to provide a summary of benefits and coverage in their 2013 enrollment packet
• Finishing updates to their summary plan description for any plan design changes from PPACA in 2011 and 2012
• Implementing an annual $2,500 cap on health care spending account contributions (beginning with 2013 plan years)
• Preparing for the patient-centered outcomes fee due in July 2013 ($1 per covered life for 2012. Insurers will remit the fee for fully insured plans; self-insured plans will pay it directly.)

Some other requirements, however, are far from crystal clear, according to a report in Business Insurance. The IRS and other agencies are expected to release more guidance in the coming months, which should clear up some questions for employers. Yet the federal government itself and many states likely won't be able to meet all the deadlines on actions required to actually implement many of the major provisions, which start in 2014, according to Kaiser Health News.


Some experts say that, barring a major political change in Washington, employers will be coping with PPACA in the years to come. Still, nothing can be ruled out until after the November elections, others note.


"Other chapters in the political front [regarding PPACA] have yet to be written," Dave Guilmette of Cigna Corp. told Business Insurance.



If you want to get involved in the conversation, you’ll want to attend the State of Reform Health Policy Conference, September 27.  Get involved early and drive the decisions that are being made today.



What is your biggest concern around the implementation of PPACA?  Comment below.

The Wilson Agency, LLC 3000 A Street, Suite 400 Anchorage, Alaska 99503

907.277.1616 info@thewilsonagency.com

Some Are Still Holding Out Hope that the Elections Will Change PPACA (Health Care Reform)

Not an unreasonable thought. The elections will determine a great deal. If the Republicans do gain the White House as well a strong majority (min 60) of the Senate while retaining control of the House, changes to PPACA could happen quickly. Anything less will bog things down and changes will be slow. A good example of this is the bill that passed in House repealing PPACA, which passed on Wednesday.  It was more a symbolic gesture than legislation that would actually go anywhere, at least until the above mentioned shifts within the legislature takes place. 

Since the original PPACA bill has passed, some of the amendments have been postponed and others even overturned.  Although, the bulk of the legislation is still in place to take affect over the next 6 years, with the majority of it being implemented in 2014.

So, should we wait until the elections are done and see where the cards may lie?  I guess the way I like to look at it is plan for worst and expect the best.  Then you are prepared no matter which way it goes, or how long it takes. The most important thing is to stay informed utilizing reliable sources such as your benefits advisor. Beware of a great deal of misinformation on the internet and TV news media. Check your sources carefully.

On another note, what is Alaska doing?  The proposal for the Alaska State Exchange by the Public Consulting Group is out and available to the public on the State of Alaska website.  Our Governor refuses to fund an Alaska health exchange stating that a federally mandated law should be funded by federal funds.  Things could get very interesting. Agree or not with his decision, the Governor brings up an important issue: should States be forced to pay for a federally mandated program? It was a question that needed to be asked… what type of autonomy do we have as a State….now for an answer?

K. Michael Ward is an Advisor at The Wilson Agency, a full service strategic employee benefits consulting firm, helping Alaskan businesses to develop an organized approach to complex employee initiatives.

The Wilson Agency, LLC 3000 A Street, Suite 400 Anchorage, Alaska 99503
907.277.1616 info@thewilsonagency.com

Medicaid, Health Care Reform, Alaska – what is the impact?

When the Supreme Court upheld health care reform legislation last month they allowed a caveat for Medicaid.  This departure from the proposed legislation said that the federal government cannot withhold Medicaid funds from states that do not expand their program. 


States are now faced with a tough decision.  Either they expand their program by increasing the income threshold up to 133 percent and receive additional federal funding, or they keep their program the same and, while they won’t lose their current funding, they risk not receiving future money.  So far, six governors have elected not to expand; five governors and the District of Columbia have already implemented the expansion.  Alaska hasn’t decided, though a recent report indicated that Governor Parnell is “leery” and that a decision is “likely weeks if not months away.”

This is a difficult issue.  Most Alaskan’s are concerned about access to health care services, the cost of health care and the future of the Alaskan economy. There is a lot the Governor has to consider.  For example:

• Medicaid payments are increasing by $100 million per year.
•  A state report, released in January 2011, indicated an expansion would cover an additional 32,000 people with a price tag of approximately $220 million.
• The Congressional Budget Office (CBO) estimates the additional cost to the states represents a 2.8 percent increase in what they would have spent on Medicaid in the absence of health reform.
• However, this amount does not reflect the savings that state and local governments will realize in other health care spending for the uninsured, which is estimated by The Urban Institute to total between $26 and $52 billion, or the uncompensated care, which is estimated by The Lewin Group to total $101 billion.

The Governor is doing what every good business does before expanding - studying the financial implications so Alaskans know what the impact will be. What we can never see in the numbers is the heart of the matter and how it affects people’s lives.  What do you think the Governor should do?  Tell us you opinion in the comments below.

Contributor: Mike Humphrey is a Sr. Advisor at The Wilson Agency, a full service strategic employee benefits consulting firm, helping Alaskan businesses to develop an organized approach to complex employee initiatives.

The Wilson Agency, LLC 3000 A Street, Suite 400 Anchorage, Alaska 99503

907.277.1616 info@thewilsonagency.com

Is Healthcare Ever Free?

Is Healthcare Ever Free?

Businesses who are interested in cutting the cost of their health insurance premium often overlook a very common bias that circulates among their staff.  This bias is so inconspicuous that most people are unaware of it, even the ones who are “guilty” of it.  It’s the idea that once the deductible is met, health care becomes free, or at least cheaper.

One employer shared the story about an employee who started the year with an expensive claim when they had a baby.  Since the deductible had already been met, the individual approached the rest of the year with a perception that future treatments were free because the bill was already paid for by the carrier.  But, when the next year’s premium was set, all those “free” treatments added up and enlarged the risk the carrier had to absorb.  The carrier had to offset the losses experienced and anticipate the trend of increased claims by increasing the employer’s rate, which all employees paid for.

Take a moment to consider your plan design or the communication you’re sending to your staff and see if it addresses this silent inflation issue.  Share your story in the comments about how you’ve dealt with this problem.

The Wilson Agency, LLC 3000 A Street, Suite 400 Anchorage, Alaska 99503

907.277.1616 info@thewilsonagency.com

Health Care Reform Decision – What’s Next?

Health Care Reform Decision – What’s Next?

On Thursday (June 28, 2012), the U.S. Supreme Court upheld the individual mandate and most of the Patient Protection and Affordable Care Act (PPACA).  As expected, it was a close decision. Because the individual mandate was found to be acceptable, most of the rest of the law (including the exchanges and the requirement that larger employers provide minimum coverage or pay penalties of their own) automatically stands. 

Because PPACA has been upheld, employers need to move forward with implementing the changes required by the law.  The most immediate requirements are:

• All group health plans, regardless of size, must provide "summaries of benefits coverage" (SBC) with the first open enrollment beginning on or after Sept. 23, 2012.  The content and format of these SBCs must meet strict guidelines, and the penalties for not providing them are high (up to $1,000 per failure). 
      
• Employers that issued 250 or more W-2s in 2011 must report the total value of each employee's medical coverage on their 2012 W-2 (which is to be issued in January 2013).
      
• High income taxpayers (those with more than $250,000 in wages if married and filing jointly, or more than $200,00 if single) must pay additional Medicare tax, and employers will be responsible for deducting a part of the tax (an additional 0.9 percent on the employee's wages in excess of $200,000) from the employee's pay beginning in 2013.
      
• The maximum employee contribution to a health flexible spending account (FSA) will be $2,500 beginning with the 2013 plan year.
      
• The Patient Centered Outcomes fee (also called the comparative effectiveness fee) is due July 31, 2013.  The fee is $1 per covered life for the 2012 year.  Insurers will remit the fee on behalf of the plans they cover, while self-funded plans will pay the fee directly.

The opinion is long (193 pages) and complex.  Although a Supreme Court decision has been rendered, there are still many outstanding questions about how, when or even if the decision will continue to stand.  It is not too late to get involved and make your voice heard, especially as many of the mandates will need to be decided upon at the state level.  Below are some helpful links for additional information on the recent decision.

• HealthCare.gov (a federal government website managed by the U.S. Department of Health & Human Services) 
• U.S. Health Policy Gateway
• U.S. Department of Labor

The Wilson Agency, LLC 3000 A Street, Suite 400 Anchorage, Alaska 99503907.277.1616info@thewilsonagency.com