Congress’ critical opportunity to reshape health care

By Jared Perkins and Chris Whaley - With the recent conclusion of the 2024 election, the spotlight now shifts back to Congress as it enters the final weeks of the 118th session. While time is limited and there is much to accomplish, Congress has a critical opportunity to reshape health care affordability, enhance transparency, reduce costs, and lay a strong foundation for future reforms through the Lower Costs, More Transparency Act (LCMT) and Health Care PRICE Transparency Act 2.0. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Enhancing Price Transparency: The LCMT and Health Care PRICE Transparency Act 2.0 strengthen 2019 rules by mandating clearer pricing disclosures, including cash and negotiated rates, across hospitals, insurers, and other providers. These measures aim to improve compliance, empower stakeholders, and address opaque pricing in health care.

2. Reducing Payment Disparities: A key LCMT provision ensures Medicare beneficiaries pay uniform rates for physician-administered drugs in all settings. This site-neutral approach seeks to lower costs, discourage consolidation, and set the stage for broader payment reforms.

3. Improving Ownership Transparency: The LCMT requires Medicare Advantage plans to disclose ownership ties with providers, PBMs, and pharmacies. While not comprehensive, it’s a step toward addressing conflicts of interest and fostering accountability and competition.

GLP-1's $411B conundrum

By Paige Twenter - Should employers, patients, or insurers bear the largest share of an annual $411 billion cost? The U.S. healthcare industry is contending with the question amid the boom of GLP-1 popularity. Read Full Article…

HVBA Article Summary

1. Employer and Insurer Coverage Cuts: GLP-1 drugs, costing $1,000 for a four-week supply, have led many employers and insurers to cut coverage due to high costs and demand. In 2024, only 44% of large employers offered coverage, despite drugmakers pushing for broader inclusion by highlighting potential savings.

2. Medicare and Medicaid Expansion Proposal: The Biden administration proposed expanding Medicare and Medicaid to cover GLP-1 weight-loss drugs, currently limited to diabetes and select conditions. The plan faces uncertainty under the Trump administration and HHS nominee Robert F. Kennedy Jr., who advocates alternative obesity solutions.

3. Financial and Eligibility Challenges: With 53% of U.S. adults eligible for GLP-1 drugs, widespread use could cost $411 billion annually, potentially bankrupting Medicare, as noted by the Senate HELP Committee.

Small employers are fleeing from fully insured market, analyst tells regulators

By Allison Bell - Roughly 40% of employers with three to 99 employees are escaping from the fully insured small-group health insurance market by using level-funded plans, an analyst told state insurance regulators earlier this month in Denver. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Adoption of Level-Funded Plans by Small Firms: In 2018, fewer than 10% of small firms had level-funded health plans, but adoption is growing due to rising health insurance premiums, which have increased nearly three times faster than the overall inflation rate since 1999. Level-funded plans, structured as self-insured under ERISA, allow small employers to avoid state benefits mandates while benefiting from stop-loss insurance that minimizes liability.

2. Regulatory Implications and Market Trends: Kelly Edmiston, a policy research manager, highlighted during an NAIC meeting that level-funded plans are reshaping the small-group health insurance landscape. These plans enable employers to circumvent state mandates by classifying them as self-insured. In addition, HRA-based cash-for-coverage programs are gaining popularity in many states due to their flexibility and employee satisfaction compared to ACA exchange small-group plans.

3. State Program Participation and Regulatory Focus: Only about eight states currently have active small-group health plan programs within ACA exchange frameworks. The NAIC's Regulatory Framework Task Force is working to address such disparities and assist state regulators in developing model regulations to better oversee evolving health insurance options like level-funded plans and HRA-based programs.

Potential Shifts in Employee Benefits: A Guide for Employers Under Trump

By Suzanne G. Odom and Melissa Ostrower - As we prepare for another change in Administration in the White House, it is crucial for employers and plan sponsors to stay informed and prepared. While much of what lies ahead is speculative, understanding these possible changes can help employers navigate the uncharted waters of employee benefits. Read Full Article… 

HVBA Article Summary

1. Increased Flexibility and Incentives for Healthcare Benefits: Anticipated changes, such as expanded Health Savings Accounts (HSAs), telehealth services, and dependent care benefits, signal a push towards greater flexibility in healthcare and family support. Employers should evaluate how these expansions might reshape their benefit offerings and ensure compliance with new regulations.

2. Policy Shifts and Their Impact on Employer Responsibilities: Potential updates to Affordable Care Act (ACA) provisions, transparency initiatives like the LCMT Act, and new retirement plan reforms could introduce significant changes to employer mandates, reporting requirements, and investment considerations. Staying ahead of these reforms will help employers avoid compliance pitfalls.

3. Tax and Immigration Implications for Benefits Management: The extension of 2017 Tax Cuts and Jobs Act provisions and shifts in immigration policies could indirectly affect benefit structures, taxation, and retirement plan distributions. Employers should collaborate with tax and benefits advisors to address potential changes and enhance strategic planning.

Pros and cons: Can an alternative health plan cut your costs?

By Martin Daks - Health care insurance premiums keep rising — they grew faster than other expenses over the last 12 months. Total health care costs are projected to grow to 19.6% of U.S. gross domestic product by 2031, according to studies cited by JP Morgan Chase in June 2024. Read Full Article…

HVBA Article Summary

1. Exploring Alternatives to Traditional Group Insurance Plans: Businesses are increasingly considering options like self-insurance, multiple employer welfare arrangements (MEWAs), professional employer organizations (PEOs), and level-funded plans to manage healthcare spending. These alternatives can offer cost savings but come with potential risks such as financial instability or inadequate reserves, requiring thorough due diligence.

2. Benefits and Drawbacks of Self-Insurance and MEWAs: Self-insured plans can save costs for employers with healthier workforces but expose them to financial risks from high claims, mitigated somewhat by "stop-loss" insurance. MEWAs, while potentially offering lower rates, may suffer from insufficient funding and lack of regulatory oversight, as evidenced by past failures like Members Health Plan NJ's bankruptcy.

3. Emerging Trends and Alternative Solutions: Options like level-funded health insurance plans, Individual Coverage Health Reimbursement Arrangements (ICHRAs), and high-deductible plans paired with Health Savings Accounts (HSAs) are gaining traction. Businesses must carefully evaluate each option's compliance requirements, costs, and benefits, often with the guidance of experienced health insurance brokers.

Long-Term Care Insurance Still Matters

By Dharam Khalsa - The long-term care insurance market is arguably the most dysfunctional in the entire industry. LTC insurance premiums are unaffordable for many average-income Americans, carriers have abandoned the market en masse, and benefits have been pared to the bone. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Raising Awareness About Care Costs: Financial advisors and planners must prioritize educating clients about the realities of long-term care costs, addressing common misconceptions like the belief that Medicare covers most care needs. Helping clients understand average expenses, such as the $63,927 annual assisted living cost in California, and the impact of specialized memory care, prepares them for more informed decision-making.

2. Emphasizing Early Planning: Advisors should encourage clients in their 30s and 40s to incorporate long-term care insurance into retirement planning. This approach leverages lower premiums and hybrid life/LTC policy innovations that provide better value, including return-of-premium options. Early planning ensures clients are better positioned to secure affordable and flexible coverage.

3. Adapting to Market Innovations: The LTC insurance market has evolved to address historical challenges, such as underpriced policies and unsustainable premiums. Advisors should guide clients through newer options like hybrid policies and extended payment windows, enabling more accessible and tailored solutions that meet long-term financial goals while mitigating future care-related financial risks.

Is bias hiding in your benefits technology?

By Rae Shanahan - Many organizations today rightly count fairness and inclusivity as important business goals, and in large part, employees agree with the sentiment. More than half of employed U.S. adults surveyed in 2023 said increasing diversity, equity and inclusion (DEI) at work was a good thing. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Identify and Mitigate Bias in HR Technology: AI-powered tools in the workplace, from recruiting platforms to benefits administration systems, have the potential to unintentionally perpetuate biases. HR leaders must actively investigate and address algorithmic biases, incomplete datasets, information retrieval inconsistencies, and language biases to ensure fair and inclusive experiences for all employees.

2. Leverage Benefits Technology to Enhance DEI: Personalization in benefits technology plays a critical role in improving employee experiences. Scalable AI solutions, when designed with inclusivity in mind, can adapt to diverse employee needs, driving increased awareness and activation of benefits while fostering equity across generational, cultural, and demographic lines.

3. Evaluate Vendors for Ethical AI Practices: Organizations should scrutinize HR tech providers for their approach to diversity, fairness testing, data governance, and empathetic system design. Asking targeted questions and seeking first-hand client feedback ensures partnerships that align with a commitment to eliminating bias and advancing workplace DEI goals.