Employers Point to Higher Costs After Medicare Drug Negotiations

By Sara Hansard - Employers that sponsor health plans are concerned Medicare’s new drug price negotiations will leave them paying higher prices. The Medicare drug price negotiations that are starting under the Inflation Reduction Act could mean higher prices for self-insured employer health plans that pay their employees’ claims, said Margaret Rehayem, vice president of the National Alliance of Healthcare Purchaser Coalitions. Read Full Article…

VBA Article Summary

1. Implications of Medicare Drug Price Negotiations on Employer-Sponsored Health Plans: The Biden administration has initiated Medicare's power to negotiate the prices of 10 prescription drugs, with anticipated price cuts taking effect in 2026. Employers are cautiously optimistic about a potential "spill-over" effect, wherein the price negotiations by Medicare could lead to lower drug prices in employer-sponsored health plans. Jeff Levin-Scherz of WTW suggests that the market adaptations resulting from government-negotiated prices might influence a decline in private drug prices as well. Moreover, the law’s provision that mandates drug manufacturers to pay rebates to Medicare for price surges above inflation might foster a reduction in drug costs for employer-sponsored plans. The anticipated spillover from Medicare could potentially save employers about $31.4 billion by 2031.

2. Challenges and Concerns in Aligning Medicare and Commercial Drug Pricing: Despite the hopeful prospects of the Medicare price negotiations, there exist several challenges and concerns that the employers need to address. Employers argue that to truly benefit from lower prices, significant changes need to be made in the prevailing business practices within the drug market, including enhanced transparency in the pharmacy benefit manager industry. They emphasize the necessity to comprehend the actual costs involved in drug pricing and the potential conflicts of interest embedded in the current system. The existing rebate system with drug manufacturers also needs scrutiny as it substantially affects pricing, often not translating into savings for the employers.

3. Potential Impact on Biosimilar Market and Employer Responses: Another significant concern surrounds the potential impact of the Medicare price negotiations on the biosimilar market. There is fear that the negotiations might inadvertently stifle the biosimilar market by narrowing the window for competitive pricing, thereby limiting savings opportunities in the following years. However, Alex Jung, a healthcare consultant, suggests the impact might be minimal as most drugs on the Medicare list are expected to lose their patents by the end of 2026, paving the way for lower-priced biosimilars and generics. Employers advocate for necessary reforms in market practices to fully capitalize on the benefits of lowered prices while being cautious of potential implications on the biosimilar market and their health plans' strategies moving forward.

After missing mid-year financial expectations, here are the ways big health insurers are going to get back into Wall Street's good graces

By Wendell Potter - Last week, I wrote that the big for-profit insurers made more than $40 billion in profits during the first six months of this year but that Wall Street doesn’t consider that nearly enough. Investors have been shifting money away from those companies, which, I can assure you, has set off alarm bells in the C-Suite. Read Full Article…

VBA Article Summary

1. Imminent Changes in the Health Insurance Sector:

   Escalation in Provider-Payer Conflicts - As observed in the ongoing conflict between Elevance/Anthem and Bon Secours Mercy Health over reimbursements, there has been a noticeable increase in provider-payer disputes. Many rural hospitals are contemplating withdrawal from Medicare Advantage networks controlled by large insurers due to inadequate payments.
   Anticipated Reduction in Doctor's Remuneration and Employee Layoffs - Following the pattern set in the early stages of the pandemic, large insurers are expected to propose significant pay cuts to physicians, with the risk of expelling those who resist. Additionally, consultation with firms like McKinsey is likely to result in substantial layoffs as companies seek to streamline operations and minimize expenses.
   Fluctuating Engagement with Obamacare Markets - The instability of the Obamacare markets is evident in the fluctuating involvement of big insurers, primarily driven by the pursuit of higher profits. The recent exit of Cigna from some of these markets underscores the volatility in this space.

2. Shifting Strategies to Amplify Profits:

   Focus on Medicare Advantage Enrollments - Big insurers are channeling efforts to increase enrollments in the Medicare Advantage sector, which has proven to be more lucrative compared to other markets, with considerably higher reported gross margins.
   Customer Purging to Enhance Profit Margins - In an effort to boost profit margins, insurers like Cigna are planning to implement substantial premium hikes in 2024, a move expected to deter less profitable individual and small-business customers, thereby potentially enhancing the company's profit margin.

3. Anticipated Policy Adjustments and Their Implications on Health Care:

   Intensification of Prior Authorization Procedures - Despite facing scrutiny, large insurers are noted to employ stringent prior authorization procedures, particularly in Medicare Advantage and Medicaid. This strategy, often seen as an attempt to escalate profits, has been widely criticized for denying necessary care coverage to many patients.

   Adoption of Benefit Buydowns - Insurers are looking to augment profit margins through the deployment of "benefit buydowns", a tactic that diminishes the value of health benefit plans while simultaneously elevating premiums. This strategy encompasses a range of measures including increased out-of-pocket expenses for enrollees and amplified prior-authorization stipulations.

   Growth in Inter-Company Eliminations - Large companies in the sector are finding ways to bypass the ACA mandate on revenue expenditure on patient care by channeling patients towards healthcare entities they own, a move that allows them to retain a larger portion of the revenues.

The forthcoming period is expected to witness an escalation in healthcare and health insurance costs for consumers, as companies adopt stringent measures to satisfy the financial aspirations of Wall Street analysts and investors. This changing landscape necessitates close observation to anticipate further adjustments and their potential impact on the healthcare sector.

Buying AI? The questions HR leaders should be able to answer

By Jill Barth - HR leaders around the globe are contemplating how artificial intelligence fits into their plans. Meanwhile, many are fielding questions about AI from all sides, handling employee concerns while also satisfying organizational counterparts and executives. And a steady stream of new developments from vendors adds to the complexity, leaving HR leaders with plenty to contemplate as 2024 moves closer. An AI governance plan is essential. Read Full Article…

VBA Article Summary

1. Urgent Need for AI Integration in HR Strategies: With AI technology evolving rapidly and becoming a competitive necessity, CEOs and senior executives are keen to embed it in their organizational strategies. AI is notably influencing the expectations and strategies within the HR sector. As per Gartner's recent report, AI and generative tools are now integral components in solutions offered by enterprise vendors. This technological surge demands HR professionals not only to adapt but to leverage these tools optimally to enhance business models and operations. It’s imperative for HR leaders to develop AI strategies that align with the organization's vision, keeping in mind the importance of responsible and informed utilization of AI tools.

2. Prioritizing Trust and AI Governance in HR Operations: With the C-suite heavily focusing on the integration of AI, it's critical that HR leaders establish specific governance plans to build and maintain trust with both their teams and customers. Morgan Llewellyn, the chief strategy officer at Stellar, emphasizes that HR leaders need to forge strategies on how to make the best use of AI technologies, and be prepared to justify these strategies to senior management. Additionally, establishing an AI governance plan is no longer optional but a necessity to ensure consistency and demonstrate to stakeholders that the adopted HR tech tools are reliable and have passed stringent trust tests.

3. Development of Comprehensive AI Evaluation Requirements: As the market is flooded with numerous advanced solutions, HR leaders must refrain from impulsive tech acquisitions and instead focus on crafting a robust governance strategy that serves as a guiding principle. This strategy should delineate clear boundaries regarding the use of AI, data sharing, and the expected outcomes. Llewellyn advises HR professionals to set up a foundational evaluation criterion that focuses on the ethical and sustainable use of AI technologies. These criteria would not only guide the acquisition of new technologies but would also help in ensuring that the introduction of new features aligns with the established governance principles, thereby facilitating ethical and sustainable AI integration in HR workflows.

Aflac is the first insurance carrier approved to provide voluntary paid family leave insurance in Virginia

By Aflac - Aflac, a leading provider of supplemental health insurance in the U.S., is the first private insurance company approved to offer paid family leave insurance in the Commonwealth of Virginia. The company recently filed for and received approval through Virginia's new Voluntary Paid Family Leave initiative. In April 2022, Virginia became one of the first states to enact a law enabling Virginia employers to purchase Paid Family Leave insurance for their employees from private insurance providers. Read Full Article…

VBA Article Summary

1. Expansion of Voluntary Paid Family Leave Insurance to Virginia: Aflac has become the first insurance carrier approved to offer voluntary paid family leave insurance in Virginia. This step forms part of the Commonwealth of Virginia's new initiative to provide paid family leave, allowing workers to avail time off for several qualified reasons such as child birth or adoption, taking care of a family member with a serious health condition, or attending to circumstances surrounding family members who are in military active duty. Scott A. Beeman, the Senior Vice President of Group Life, Absence, and Disability Solutions at Aflac, expresses the company's dedication to offering superior products and services in this sector.

2. Positive Implications of Paid Leave: Implementing a paid leave policy not only facilitates workers in safeguarding their economic security but also fosters enhanced productivity and general well-being. Currently, voluntary paid leave programs have been adopted by eight states, while fourteen states or jurisdictions have enacted some form of mandatory paid disability and family leave for workers in the private sector. This kind of program stands as a testament to Aflac's commitment to bolstering the well-being and financial security of workers.

3. Aflac's Experience and Availability of New Coverage: Building on their experience from 2021, when Aflac was chosen by Connecticut to manage their mandatory paid family leave program, the company is ready to extend its services in Virginia. The new coverage is set to be available to employers situated in Virginia who have secured group insured short-term disability with Aflac’s Group Life Absence and Disability Solution from Q4 2023. Furthermore, the Premier Life, Absence, and Disability Services (PLADS) delineate the administration and availability of various group life, disability, and absence services, which may vary based on state laws and might not be accessible in all states. It is important to note that absence services are not insurance and do not constitute legal advice.

When It Comes to Safeguarding Mental Health in the Workplace, Natasha Bowman Speaks from Hard-Won Experience

By Emma Brenner - It was in the early days of the pandemic that Natasha Bowman attempted suicide. This was promptly followed by a bipolar disorder diagnosis. As she looks back, Bowman views that particular time of her life as incredibly formidable, completely changing her viewpoint on mental health. Read Full Article…

VBA Article Summary

1. Insight into the Importance of Mental Health in the Workplace:

   Extent of Impact - Bowman emphasizes the deep impact of mental health on individuals, families, workplaces, and communities, noting its significant influence on every aspect of our lives.
   Workplace Factors and Workers' Compensation - Mental health is a critical component in workers' compensation, affecting the outcome of treatments and recovery times. Workplace factors such as occupational stress and traumatic incidents can significantly influence an individual's mental wellbeing.

   Personal Connection and Advocacy - Through her personal experiences, including a bipolar disorder diagnosis, Bowman has gained a deeper understanding and perspective on mental health issues. She aims to cultivate cultures of mental wellness through her advocacy and the Bowman Foundation.

2. Expectations from the Keynote Session at the National Comp Conference:

   Sharing Experiences and Insights - Bowman will share personal and general insights on mental health and wellbeing during her session, drawing from her own experiences and others'.

   Promoting Psychologically Safe Work Environments - She aims to underscore the importance of fostering work environments where employees feel supported and empowered.
   Actionable Steps for Prioritizing Mental Health - Bowman promises to provide attendees with tangible actions and strategies to keep mental health a top priority in workplaces, focusing on early intervention and stigma reduction.

3. The Mission of Promoting Mental Health Awareness and Inclusivity:
   Addressing Stigma and Encouraging Support - Through her session titled "From Stigma to Support: A Call to Action for Workplace Mental Health," Bowman hopes to inspire a renewed commitment to prioritizing mental health within organizations.
   Holistic Approach to Worker’s Compensation - Bowman advocates for the inclusion of mental health components in workers' compensation plans, highlighting its benefits in enhancing injury management and promoting successful return-to-work outcomes.
   Call to Action for Positive Change - Bowman urges individuals and organizations to collaborate in fostering mentally healthy and inclusive environments, with a strong belief that together, we can make a substantial positive change in communities and organizations.

26% of employers plan to offer weight loss drug benefits over next year: Survey

By Jakob Emerson - Weight loss drugs like Ozempic and other GLP-1s exploded in popularity this year, resulting in drug shortages and increasing costs for payers and employers. A majority of employers are experiencing rising costs for weight loss drugs, and about a quarter plan to offer coverage for them in the next year, according to a survey published Sept. 12 by Found, a weight management platform. Through that experience, Bowman has absorbed true, valuable lessons about protecting and preserving one’s mental wellbeing. Read Full Article…

VBA Article Summary

1. Variety in Weight-Related Benefits: The recent survey by OnePoll, which gathered responses from 500 U.S. individuals overseeing health benefits at large companies, revealed that employers offer a diverse range of weight-related benefits. These benefits encompass offerings such as gym memberships, digital weight loss solutions, and preventive solutions such as health screenings and nutrition classes, with varying levels of adoption.

2. Trends and Future Plans in Benefits Offering: The survey highlighted a notable trend in weight loss drug spending with a majority witnessing an increase in the last year. Looking ahead, employers are planning to further incorporate preventive solutions and digital weight loss solutions, including those involving medications, into their employee health benefits.

3. Concerns Regarding Weight Loss Drugs: Employers harbor concerns regarding the implementation of weight loss drugs as a part of employee health benefits. The primary areas of concern are clinical efficacy and cost, followed by issues related to stigma, bias, and supply chain reliability. These factors are pivotal in shaping employers' strategies towards incorporating weight management initiatives into their health benefit plans.

When it comes to open enrollment, some employees have regrets

By Courtney Vinopal - Open enrollment season is upon us, and this year HR departments might want to consider taking extra time to ensure their employees understand their benefits options. Nearly one-half of employees (45%) say there are elements of their benefits package they don’t fully understand, according to a MetLife survey of more than 2,600 full-time workers conducted in July and published September 12. Read Full Article…

VBA Article Summary

1. Prevalent Regrets and Misunderstandings Surrounding Open Enrollment Choices: In recent surveys, a significant percentage of employees expressed regrets concerning their open enrollment choices made in the previous year, citing inadequate coverage and unanticipated changes in their financial situation as primary reasons. Astonishingly, 60% of these regretful employees attributed their discontent to a lack of understanding or insufficient information regarding their benefits. This revelation highlights an existing knowledge gap in benefits comprehension and underscores the necessity for more effective educational efforts and resources to assist employees in making informed decisions.

2. The Role of Employers in Bridging the Benefits Knowledge Gap: As per Jamie Madden, the SVP of workforce engagement and benefits connectivity for MetLife, the current state of benefits understanding among employees is surprisingly low, despite the efforts employers put into communication and preparation for open enrollment. This discrepancy indicates a need for employers to intensify their efforts in bridging this knowledge gap. Potential strategies include enhancing education initiatives, avoiding procrastination in providing essential information, and fostering environments where employees can discuss benefits informally with their colleagues, thus enriching their understanding and making more informed choices during the open enrollment period.

3. Enhancing Benefits Communication as a Tool for Employee Retention: Madden suggests that employers can take proactive steps to support the critical educational component necessary for successful open enrollment periods. This involves leveraging various modes of communication, like mobile apps, websites, and videos, to help employees grasp the value of the benefits offered more effectively. Additionally, understanding the diverse schedules and lifestyles of employees, and facilitating consultations with family or friends during the benefits election process can enhance engagement. Effective communication not only aids in making informed choices but can potentially increase employee loyalty, as evidenced by half of the respondents asserting that a deeper understanding of their benefits would foster greater allegiance to their employer.

By Paylogix - ALEXANDRIA, VA – 5Star Life Insurance Company (5Star Life) announced today a new technology-based integration, through the Paylogix Tailored Market Solution, which provides 5Star Life’s customers, agents, and brokers a seamless enrollment and payment experience. Read Full Article…

VBA Article Summary

1. Unveiling Enhanced Customer Experience: The collaboration between 5Star Life and Paylogix signifies a groundbreaking venture aimed at bolstering innovation within the voluntary benefits administration sector. 5Star Life, led by Vice President Sal Campanile, embarks on this journey with an unwavering commitment to providing industry-leading service and engagement experiences to its customers, thus setting a benchmark in the realm of customer-centric approaches in the industry.

2. Streamlined Administrative Solutions with Paylogix: Paylogix introduces the Tailored Market Solution, an innovative platform that is set to revolutionize voluntary benefit administration. This comprehensive system stands as a paragon of efficiency, offering a plethora of features including swift case setup, seamless case submission process, and an advanced online portal that facilitates hassle-free enrollment, ongoing eligibility management, and billing. The integration of these features is anticipated to transform traditional insurer administrative systems, enhancing the digital customer experience and adding a new dimension of convenience and efficiency to the processes.

3. Setting a New Standard in Voluntary Benefits Administration: Richard Pfadenhauer, the President and Founder of Paylogix, emphasizes that this partnership stands as a testament to the critical role of technology-focused solutions in the modern landscape of voluntary benefits administration. By adopting standardized, automated, and simplified processes, this collaboration aims to redefine success metrics in the sector, offering unprecedented value to providers, brokers, and end-users alike, and paving the way for a more progressive and user-friendly future in the voluntary benefits administration industry.

MGM Resorts breached by ‘Scattered Spider’ hackers: Sources

By Reuters - A hacking group named Scattered Spider brought down the systems of $14 billion gaming giant MGM Resorts International this week, two sources familiar with the matter said, as U.S. law enforcement officials started a probe into the breach. Read Full Article…

VBA Article Summary

1. MGM Cybersecurity Breach: MGM reported a cybersecurity issue that led to the paralysis of several of its systems for three days. The company, with over 30 hotel and gaming venues worldwide, is currently investigating the incident. The FBI has also launched an investigation, while Moody's rating agency cautioned that MGM's credit rating could be negatively affected due to this breach.

2. Caesars Entertainment Data Breach: Caesars Entertainment confirmed a data breach resulting in leaked information from its loyalty program database. Details compromised include driver's license numbers and possibly Social Security numbers of a significant number of members. The breach was traced back to a “social engineering attack” on Caesars' outsourced IT support vendor.

3. Suspected Culprit - Scattered Spider: Two sources informed Reuters that the hacking group Scattered Spider, also identified as UNC3944, is believed to be responsible for the attack. Last year, analysts identified that Scattered Spider uses social engineering techniques to trick users into surrendering their login credentials or one-time-password (OTP) codes, thereby bypassing multifactor authentication. Although previously targeting telecom and business process outsourcing companies, recent reports suggest that Scattered Spider has expanded its focus to critical infrastructure organizations.