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Health and Benefits

Upgrade Open Enrollment with a Network Provider Audit

Let your employees know which doctors will accept a new insurance carrier’s network by obtaining a healthcare provider audit.

When an employer changes its health plan, it often means moving from one provider network to another.  An employer must consider the benefits of moving to the new network against the potential that some of its employees may need to find new doctors.

To assist employers with this analysis, RMC offers a healthcare provider audit. This audit compares the penetration of proposed service provider networks in the geographic regions that apply to eligible employees. The audit is based on a sample of primary care physicians, specialty care physicians, and facilities identified as providers of interest by the employer and its employees. Results are presented in an easy-to-understand format, which allows for easy comparison between the network alternatives.

Provider Networks

Health insurance arrangements utilize provider networks to offer members access to medical services at pre-negotiated discount rates. Provider networks are often assembled by health insurance companies. Healthcare providers who elect to participate in a network agree to provide their services to network members at pre-negotiated discount rates, rather than at their usual “off-the-rack” rates.  Healthcare providers benefit from this arrangement through the volume of plan participants steered to them by the network. Plan participants benefit by gaining access to the network’s discounted rates for medical care.

Provider networks range in size from regional to national, and in breadth of access from narrow managed care networks to broad open access networks. Customized local networks can be assembled with significant member volume (i.e., plans with thousands of insured members). The network options available vary by location and insurer. Multiple networks may be offered in situations where an employer requires broad regional or nationwide coverage, or where the array of choices available to plan members includes multiple insurance carriers.

Example

An employer is considering switching health insurance carriers at renewal. However, the employer is concerned that switching insurance carriers might mean that some of its employees will lose access to their existing doctors or clinics. To ensure a smooth transition to a new carrier, the employer requests RMC to conduct a healthcare provider audit. The employer will use the healthcare provider audit to determine how employees will be impacted by the decision to change insurance carriers.

The first step in the audit is for RMC to provide the employer’s employees with a temporary link to a portal where each employee can identify the doctors and/or facilities they would like to include in the audit. The employees also identify the importance of each doctor and/or facility on a scale of 1 to 10; 1 being of low importance and 10 being of high importance. Lastly, they identify if they would like to keep the name of the doctor or facility confidential.

The window for submissions is typically limited to five business days, which can be extended at the employer’s request. Employee submissions on the portal are sent directly to RMC. Once the portal closes, RMC prepares an audit of the networks to assess compatibility with the providers identified by the employees. The results of the audit are provided in a simple table format, as shown below.

Table 1 – Service Provider Audit Results Example #1

 

 

In this example, Network A provides the least access to the requested service providers – two doctors, one infusion facility, and one major hospital do not accept Network A.

Network C provides more access when compared to Network A, but one facility and provider – marked confidential by an employee – do not accept Network C.

Network B provides the most access, with only one facility that does not accept Network B.

The relative importance of each provider also factors into the decision-making process. For example, the below audit was prepared using two networks.

Table 2 – Service Provider Audit Results Example #2

Network A provides the least access to the requested service providers – three providers do not accept Network A.

Network B provides the most access so the requested service providers – one provider does not accept Network B.

One might assume that Network B is the obvious choice since more doctors on the list accept Network B. However, the one doctor that does not accept Network B was marked as a 10 out of 10, in terms of importance. The sum of the doctors and facilities that do not accept Network A only adds up to 6. Therefore, an argument could be made that Network A is a better option.

When faced with a decision like Example #2, the relative importance of each provider, volume of participants, provider specialty, and a host of other factors should be considered in the decision-making process.

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Health and Benefits

Employer Challenges with Medicare-Eligible Employees

An increasing number of employers are facing Medicare-related health insurance issues, and these issues are expected to only become more prevalent in the coming years. Here is an overview of the issues from the underlying causes to how employers might navigate them.

Medicare-Related Health Insurance Challenges Are Increasing

Two trends are contributing to the overall increase in Medicare-related health insurance challenges for employers.

First, older Americans are simply working longer.  While this isn’t a new trend, the Bureau of Labor Statistics projects that this trend will continue, with about one-third of seniors age 65 to 74 expected to be working in 2029. Even among seniors age 75 and older, the BLS expects more than 10 percent of the demographic to be working at the end of the decade.

Second, the Social Security full retirement age can be higher than the eligibility age for Medicare.  While a person can retire and begin receiving reduced Social Security benefits at age 62, the earliest full retirement age is 66 and for people born after 1960, it is 67.  In addition, benefits increase if an employee works beyond their full retirement age, maxing out at age 70.  This means that there could be a two-year gap, where an employee becomes eligible for Medicare at age 65, but will not be fully eligible for Social Security until age 67. Many people may choose to work beyond their Medicare eligibility birthdate as a result.

The result is that Medicare-related health insurance challenges are not something that employers can afford to ignore. Many employers are already facing with these issues, and those that aren’t will probably face them soon.

Medicare is a Four-Part Health Insurance Plan for Seniors

Medicare is, of course, the nationally subsidized health insurance plan that is available to those 65 and older.  The program consists of four main parts:

  • Part A: Generally, covers stays in hospitals, skilled nursing facilities and certain at-home care. Most enrollees aren’t charged a premium.
  • Part B: This usually covers doctor’s visits, outpatient exams, and tests. Premiums are usually charged.
  • Part C: Medicare Advantage plans are offered as alternatives to “standard” Medicare plans, and they may have different rules and out-of-pocket expenses. These plans are offered by approved private insurers, which charge premiums.
  • Part D: This part covers prescription drugs. These plans are offered by private insurers, which charge premiums.

Because Medicare Part A is premium-free, many employees who have access to employer-sponsored plans may choose to enroll in this part of Medicare alone.  Instead, they may rely on their employer-sponsored plan to cover office visits, outpatient services, and diagnostic testing.

Medicare Eligibility Begins at Age 65

A person becomes eligible for Medicare at age 65 and can enroll during the three months before the month in which they turn 65, the month in which they turn 65 or the three months after they turn 65.  When a person enrolls after their 65th birthday, coverage may apply retroactively for up to six months.

A person who does not enroll (or prove equivalent coverage) when first eligible for Medicare may have to pay a penalty if they enroll later.

Working May Impact an Employee’s Decision to Enroll in Medicare

Working part- or full-time does not affect Medicare eligibility, but it may impact an employee’s decision whether to enroll in Medicare.  The decision to enroll depends on an employer’s size and an employee’s coverage needs.

An eligible person working for an employer with fewer than 20 employees is required to enroll in Medicare coverage or face higher premiums later. An eligible person working for an employer with 20 or more employees can forgo Medicare coverage, as long as they have equivalent or better coverage through their employer or through their spouse’s employer.

Whether an eligible employee chooses to enroll in Medicare is a personal decision that depends on personal health, family coverage needs, employer-sponsored plan features, income level, and other factors. Many employees may elect to, at least, enroll in the free Medicare Part A coverage.  However, some will delay Medicare enrollment altogether.

Medicare Can Overlap with Employer-Provided Health Insurance

When an employee is both enrolled in Medicare and covered by their employer’s plan, one will provide primary coverage and the other will be secondary. Whether Medicare is primary or secondary depends upon the size of the employer.

When an employer has fewer than 20 employees, Medicare pays first and the employer’s plan pays second.  When an employer has 20 or more employees, the employer’s plan pays first and Medicare pays second.

Medicare Isn’t Compatible with Health Savings Accounts

Employees who are covered by a high-deductible health plan (HDHP) can contribute to a health savings account (HSA).  However, an employee may not contribute to an HSA, if they are enrolled in Medicare.  As a result, an employee’s decision whether to enroll in Medicare may depend upon the value they attach to the ability to make future contributions to an HSA.

Navigating Medicare Issues and Self-Funded Plans

Whether a Medicare-eligible employee enrolls in Medicare or stays in their employer’s health plan is a difficult decision for an employee.  However, it is also a challenge for employers that want to mitigate increasing healthcare costs by adopting a self-funded health plan.  Whether a self-funded health plan option is viable for a particular employer may depend upon the mix of an employer’s employees.  There is not a one-size-fits-all solution. Instead, each situation must be taken on a case-by-case basis and should be navigated with expert guidance.

RMC can provide the expert guidance that an employer needs with a consultative risk management approach.  RMC’s Medicare consulting services provides businesses with a clear path to a successful self-funded health plan transition.

To speak with a knowledgeable consultant at RMC, contact us today. One of our representatives will be happy to assist you and your business.

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Health and Benefits

Memo on COVID Relief Package for 2021

On December 27, 2020, the Consolidated Appropriations Act of 2021 (the “Act”), was signed by President Trump.  While the Act is mostly known for its $600 payment to most Americans making less than $75,000 per year and the expansion of unemployment benefits, it also impacts employers in a number of ways.  This article discusses a few of those provisions.

1. Flexible Spending Accounts

Many employers maintain what is known as a “Cafeteria Plan”, which enables their employees to prefund certain expenses on a tax-advantaged basis.  An employer’s Cafeteria Plan may include a flexible spending account (“FSA”) for healthcare expenses and an FSA for dependent care expenses.  The Act changes some of the rules that govern both healthcare and dependent care FSAs.

A. Changing Election

Generally, an employee is permitted to make an election regarding participation in an FSA only once per plan year, without a “change in status”.  In addition, the election is generally required to be made before the start of the plan year.  The Act provides that, for plan years ending in 2021, an employee may change the amount of his or her contributions to an FSA during the plan year, without a change in status, as long as the total of the contributions does not exceed the statutory maximum.  Any change in the employee’s election will be effective prospectively.

B. Carryover Amounts 

FSAs used to be subject to a “use it or lose it” rule.  However, the Internal Revenue Code now permits an employee to carry over unspent funds remaining in his or her healthcare FSA at the end of one plan year to the next plan year.  An added benefit is that the carryover amount does not count against the maximum reimbursement amount for the following plan year.  However, the amount that an employee may carry over is limited.  For plan year 2021, the maximum carryover amount was $550.  The Act suspends this limitation for plan years 2020 and 2021.  Under the Act, an employee may carry over the entire remaining balance in his or her healthcare FSA to the following plan year.  The Act also extends this carryover provision to dependent care FSAs.  Prior to the Act, the carryover provision covered only healthcare FSAs.

C. Extension of Grace Period

An employer’s Cafeteria Plan may include a “grace period”.  During the grace period, an employee may use funds remaining in his or her FSA at the end of a plan year to pay costs incurred in the following plan year.  There are no limits on the amount that may be used in the next plan year.  However, the grace period cannot extend more than two and one-half months into the next plan year. Both healthcare FSAs and dependent care FSAs may provide a grace period.  The Act changed the upper limit of the grace period for plan years ending in 2020 or 2021.  For plan years ending in 2020 or 2021, the grace period can extend up to twelve months.

A plan may not have both a grace period and a carryover provision.  What is the difference?  A grace period generally does not limit the amount of funds, which may be used in the next plan year but does limit the period during which such funds can be used.  A carryover provision limits the amount that may be carried over from one plan year to the next but does not limit the period during which the funds can be used.  However, since the Act changed the grace period to twelve months and eliminated the dollar limitation on carryover amounts, there does not seem to be much difference between a grace period and a carryover provision for 2021.

D. Extension Period for Reimbursements

A participant is generally permitted to obtain reimbursements from an FSA only while actively covered by the employer’s Cafeteria Plan.  Under the Act, an employee may continue to receive reimbursements from a plan for the balance of the plan year, including any grace period, during which his or her participation in the plan ceases.  This provision applies only to healthcare FSAs and not dependent care FSAs.

E. Plan Amendment 

The foregoing plan provisions are permissible, not mandatory.  This means that an employer may offer a Cafeteria Plan but is not required to.  In addition, an employer’s plan may contain a carryover provision or a grace period but also may contain neither.  In order to add or change a carryover or grace period provision, an employer must adopt an amendment to its plan.  Generally, amendments must be adopted prospectively.  For 2020 and 2021, the Act permits an employer to amend its plan retroactively.  The amendment must be adopted by the last day of the first plan year after the plan year for which the amendment is to be effective.  That means that, for a 2020 calendar year plan, the amendment must be adopted by December 31, 2021.  For a 2021 calendar year plan, the amendment must be adopted by December 31, 2022.

2. Paycheck Protection Program

The Coronavirus Aid, Relief, and Economic Security Act (“the “CARES Act”), which was signed into law on March 27, 2020, created the Paycheck Protection Program (“PPP”).  The purpose of the PPP was to support small businesses in retaining and paying employees.  In addition to adding new money to the existing PPP program, the Act made other changes to the PPP program.

A. Second Draw

The Act creates what is known as a “second draw”.  This enables employers that received a PPP loan during the first phase of the program to apply for a second PPP loan.  In order to be eligible for a second draw, an employer must have:

i. no more than 300 employees;

ii. used or will use the full amount of the first PPP loan; and

iii. experienced a reduction in revenue of at least 25% for a 2020 quarter compared to the same 2019 quarter.

Like the original PPP program, the second draw is administered by lenders authorized by the Small Business Administration. A business that desires to apply for a PPP loan, whether a so-called “first draw” under the CARES Act or a “second draw” under the Act, should contact their lender.

B. Eligible Expenses

The intent of the PPP program is for loan proceeds to be used for payroll expenses.  However, both the original PPP program under the CARES Act and the revised PPP program under the Act permit loan proceeds to be used for expenses other than salary.  The Act expands the percentage of loan proceeds that may be used for expenses other than salary from 25% to 40%.

C. Deductibility

There was some uncertainty under the CARES Act whether an employer whose loan was forgiven could also deduct the business expenses paid for with the loan proceeds.  The IRS took the position that an employer could not receive both loan forgiveness and deductions.  The IRS characterized this as double-dipping.  The Act makes clear the intention of Congress that a business may receive loan forgiveness under the PPP and deduct the business expenses paid for with the loan proceeds.

3. Employee Retention Credit

The CARES Act created an Employee Retention Credit (“ERC”), which provided a credit for eligible employers for payroll taxes paid by the employer.  To the extent that the employer’s payroll taxes exceeded qualified wages, the credit resulted in a refund to the employer.  The Act amends the ERC in a number of ways.

A. Extension

The Act extends the term of the ERC to June 30, 2021.  Previously, the Act was set to expire on December 31, 2020.  So, employers can now take advantage of the ERC through the first six months of 2021.

B. Eligibility

The Act expands the number of employers eligible for the ERC.  Under the CARES Act, the ERC was available to employers with fewer than 100 employees.  The Act extends the ERC to employers with fewer than 500 employees.  In addition, in order to be eligible for the ERC in 2021, an employer must be prohibited from fully or partially engaging in a trade or business as a result of a governmental order or its revenue during one of the first two quarters of 2021 must be 80% less than its revenue during a comparable quarter in 2019.  The CARES Act required a reduction in revenue of 50% or more.

C. Amount of Credit

The amount of the ERC is 70% of an employee’s “qualified wages” paid from January 1, 2021, through June 30, 2021.  The maximum amount of an employee’s qualified wages is $10,000 per quarter.  So, the maximum ERC per employee per quarter is $7,000.  The amount of the ERC under the CARES Act was 50% of an employee’s annual wages.

D. Coordination with PPP 

Under the CARES Act, an employer could not take advantage of both the PPP program and the ERC in 2020.  The employer had to choose one or the other.  The Act retroactively eliminates that restriction.  An employer that received a PPP loan in 2020 can retroactively claim the ERC for wages that were not paid with the PPP loan.  This is a huge benefit for employers that received a PPP loan in 2020; one that is not shared by employers who forsook a PPP loan in 2020 because the ERC provided a greater benefit.  They do not have the option of retroactively applying for a PPP loan for the same period for which they received an ERC.  A business that did receive a PPP loan in 2020 should consult its tax and legal advisors to determine whether it is also eligible to receive the ERC.

4. Health Plan Provisions

A. Surprise Billing

“Surprise billing” most often occurs in the context of emergency care.  When an employee requires emergency care, the employee is often unable to confirm whether the hospital or doctor is “in-network”.  As a result, the employee may be surprised when he or she gets a bill for the difference between the agreed-upon amount charged by the employee’s in-network provider and the amount charged by the out-of-network provider.

The Act addresses the problem of surprise billing by treating the care provided by the out-of-network provider as in-network for purposes of calculating the employee’s share of the cost of treatment.  As a result, an employee’s obligation is the same whether the treatment is received in-network or out-of-network.  However, this restriction does not cover all medical care and extends only to the point where the employee is stable and able to make informed decisions about his or her treatment.

The provisions of the Act regarding surprise billing go into effect on January 1, 2022.  However, regulations are supposed to be issued by July 1, 2021.

B. Reporting and Disclosure Requirements

The Act imposes a number of reporting and disclosure requirements on group health plans.  Beginning with plan years starting on or after January 1, 2022, group health plan identification cards must show in-network and out-of-network deductibles, out-of-pocket maximums, and a telephone number and website through which a participant can find certain information such as which hospitals and urgent care centers have relationships with the plan.  While an employer needs to be aware of this obligation, the delivery of identification cards is usually the responsibility of the plan’s TPA.

Also beginning with the first plan year after January 1, 2022, if an employer receives notice that an employee is scheduled to be treated by an out-of-network provider, the employer is required to notify the employee that the provider is not in-network.  In addition, the notice must provide the employee with a good faith estimate of the cost of the treatment, the plan’s financial responsibility for the treatment, the employee’s share of the cost and how much the employee has to pay before reaching the plan’s out-of-pocket maximum.  Again, while the employer needs to be aware of this obligation, it is generally the TPA that will provide the notice to the plan participant.

The Act also requires group health plans to submit certain information to the Departments of Health and Human Services, Labor and Treasury.  The first report is due December 27, 2021, and subsequent reports are due on each June1 thereafter.  The information required to be provided includes:

1. the dates of the plan year;

2. the number of participants and beneficiaries;

3. each state where the plan is offered;

4. the 50 most popular brand prescription drugs used by plan participants;

5. the 50 most expensive prescription drugs used by plan participants;

6. the 50 prescription drugs with the greatest increase during the plan year;

7. total spending on health care by the plan broken down by hospital costs, provider costs for primary care and specialty care and prescription drugs;

8. the average monthly premium paid the employer and the plan’s participants; and

9. rebates.

As with the other reporting requirements, the information will need to be gathered by the plan’s service providers.  It seems likely that regulations will be issued prior to December, 27, 2021, more clearly setting forth an employer’s obligations under the Act.

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Compliance Update Health and Benefits

The United States Supreme Court Decides the Rutledge Case

In a previous article, we told you about a case that was argued in the United States Supreme Court on October 6, 2020.  That case, Rutledge, Attorney General of Arkansas v. Pharmaceutical Care Management Association, was decided by the Court in a unanimous opinion issued on December 10, 2020.

What Was The Case About?

To refresh your recollection, the State of Arkansas had passed a law, known as Act 900, regulating the price at which pharmacy benefit managers (PBMs) are required to reimburse pharmacies for prescription drugs.  While invisible to most plan participants, PBMs are an important part of most employer healthcare plans.

A PBM is an intermediary between a healthcare plan and a pharmacy.  When a plan participant goes to a pharmacy to fill a prescription, the participant may or may not have a co-pay.  Whether the participant has a co-pay or not, the participant expects that the cost of the prescription will be mostly paid by the plan.  Ultimately, the participant is right.  However, it is not the plan that makes a payment to the pharmacy.  The plan’s PBM pays the pharmacy, and the plan reimburses the PBM.

The problem that Act 900 sought to address is that the amount paid to the pharmacy by the PBM may bear no relation to either the amount paid by the pharmacy to acquire the prescription drug or the amount paid by the plan to the PBM.  The PBM enters into a contract with the pharmacy pursuant to which the PBM agrees to reimburse the pharmacy according to rates set by the PBM and known as the maximum allowable cost (MAC).  The PBM also enters into a contract with the plan pursuant to which the plan agrees to reimburse the PBM at a certain amount.  The difference between the MAC for a particular drug and the amount paid by the plan represents profit for the PBM.  However, in certain cases, it may only be the PBM that is making a profit.  That is because the MAC may be less than the pharmacy’s acquisition cost.  And, if that happens too often, a pharmacy may be forced out of business.

Act 900 attempted to resolve this problem by requiring PBMs to periodically update their MACs to ensure that the MAC for a particular prescription drug equaled the pharmacy’s acquisition cost.  In addition, Act 900 provided an appeal procedure whereby a pharmacy could challenge a PBM’s MAC when it was below the pharmacy’s acquisition cost.  Finally, Act 900 provided that a pharmacy could refuse to deliver a prescription drug to a plan participant if the PBM’s reimbursement rate was less than the pharmacy’s acquisition cost.

This case began when the Pharmaceutical Care Management Association (Association), a trade association of the some of the largest PBMs, sued the State of Arkansas in federal district court.  The Association claimed that Act 900 was preempted by the Employee Retirement Income Security Act of 1974 (ERISA) and, as a result, unenforceable.  The Association won in the District Court, and the District Court’s judgment was affirmed by the United States Court of Appeals for the Eighth Circuit.  The State filed a Petition for a Writ of Certiorari, which the Supreme Court granted.

The Supreme Court Finds No ERISA Preemption

In an opinion written by Justice Sotomayor, the Court reviewed the law of ERISA preemption.  It said that ERISA preempts any state law that relates to an employee benefit plan.  Further, a state law relates to an employee benefit plan if it has a connection with or reference to such plan.

The Court found that the purpose of ERISA was “to make the benefits promised by an employer more secure by mandating certain oversight systems and other standard procedures”.  It accomplished this by ensuring that an employer would not be subject to the differing rules and regulations of the various states.  “ERISA is therefore primarily concerned with preempting laws that require providers to structure benefit plans in particular ways, such as by requiring payment of specific benefits.”

Not every state law that affects an ERISA plan is preempted.  “This is especially so if a law merely affects costs.”  The Court discussed its earlier decision in New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Insurance Company, in which the Court held that a New York law that imposed a surcharge on hospital billing rates for plans other than Blue Cross Blue Shield plans was not preempted by ERISA.  In discussing the Travelers case, Justice Sotomayor wrote that:

Plans that bought insurance from the Blues therefore paid less for New York hospital services than plans that did not.  This Court presumed that the surcharges would be passed on to insurance buyers, including ERISA plans, which in turn would incentivize ERISA plans to choose the Blues over other alternatives in New York.  Nevertheless, the Court held that such an “indirect economic influence” did not create an impermissible connection between the New York law and ERISA plans because it did not “bind plan administrators to any particular choice.”

In Rutledge, the Court said that it is required to follow the holding of Travelers.

Act 900 is merely a form of cost regulation.  It requires PBMs to reimburse pharmacies for prescription drugs at a rate equal to or higher than the pharmacy’s acquisition cost.  PBMs may well pass those increased costs on to plans, meaning that ERISA plans may pay more for prescription-drug benefits in Arkansas than in, say, Arizona.  But “cost uniformity was almost certainly not an object of pre-emption.”

The Court also found that Act 900 does not refer to ERISA plans.  The reason that Act 900 does not refer to ERISA plans is that it is equally applicable to non-ERISA plans.  Since Act 900 does not have an impermissible connection to ERISA plans and does not refer to ERISA plans, it is not related to ERISA plans and is not preempted.

What Will Be The Impact of Rutledge?

This depends on whom you ask.  The State of Arkansas, as well as the over 30 other states with similar laws, will be pleased.  The states can now regulate the reimbursement rates that pharmacies are paid for prescription drugs to ensure that no pharmacy is forced to close because the MAC is less than the pharmacy’s acquisition cost.  The pharmacies are happy because, in states with such laws, they will no longer be forced to sell prescription drugs for less than cost.

On the other hand, the PBMs are not pleased.  Obviously, this could reduce their profit margins if they are required to increase their MACs.  The impact on prescription drug plans is less clear.  One of the arguments made by the Association before the Supreme Court is that PBMs will be forced to pass on increased costs to healthcare plans.  This will increase the cost of prescription drugs to the plans.  This may force plans to increase co-pays or eliminate certain coverages.  However, the Court’s role in this case was not to judge the wisdom of Act 900.  It was simply to determine whether it was preempted by ERISA.  And, since cost regulation does not relate to an ERISA plan, it found that Act 900 is not preempted by ERISA.

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Health and Benefits

The Real Cost of a Premium Holiday

As group health insurance premiums rise each year, employers look for solutions to mitigate their increased costs. An emerging trend this year is “premium holiday”, which insurers are offering to make it seem like employers can save on coverage.

In reality however, this price adjustment trend rarely results in long-term savings and can easily result in employers paying more.

Premium Holidays Rarely Offer Sustained Savings

A “premium holiday” usually provides a break on premiums for one month, thereby seeming to reduce an employers’ health insurance costs for the year. Most of these programs skip an entire month’s premium for the first year that coverage is in place, although a few may offer a one-month discount instead.

However, these price adjustments rarely deliver on their promise of reducing overall costs.

Plans that offer a so-called “premium holiday” frequently come with increased costs both in the upcoming plan year and in any years thereafter.

For the upcoming year, a premium holiday can be used to make a policy’s annual premium appear artificially low. Offering a one-month discount on a policy that’s seeing a major rate increase can mask the increase to a significant degree.

In reality, the increase is usually still quite substantial even after the one-month premium discount is taken into account.

In future years, a policy’s premium can increase dramatically when a one-month premium holiday isn’t included in the renewal. When employers are no longer given a discount, their next policy premium not only increases by the annual rate increase, but they also have to take into consideration that they are paying for twelve months rather than eleven.

The result is that premium holidays often result in employers spending more on health insurance than they intend to or realize.

The Increased Costs That Premium Holidays Mask Are Significant

While the exact amount that employers end up paying for health insurance is specific to each employer and its policy, the increased costs that premium holidays mask can be substantial. To see just how much this scheme can actually cost an employer, consider the following example of an employer who pays $120,000 in annual health insurance premiums.

The employer is facing a rate increase of 24 percent for 2021, which equates to a $28,800 increase for the year based on its 2020 premium of $120,000. As an incentive to renew, the employer is offered a one-time premium holiday that saves it $12,400 in 2021.

Although this looks attractive at first glance, the total premiums for the year come to $136,400 – an increase of 14 percent!

Moreover, the employer’s premium increase for 2022 will be based on a premium of $148,800, even though the employer only paid $136,400 in 2021.  Even if the insurer does not raise rates in 2022, but only eliminates the premium holiday, the employer will pay $148,800 in 2020, an increase of almost 10% percent.

There Are Other Ways to Mitigate Rising Health Insurance Costs

For an employer faced with rising health insurance costs, there are other ways to mitigate this expense. One way is through a self-funded health plan. A self-funded health plan can reduce an employer’s cost of providing health insurance to its employees, while still providing high quality coverage.

Contact us to learn more about how self-funded health plans can help mitigate these rising insurance costs. One of our team members would be happy to discuss the benefits of a self-funded health plan for your business.

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Health and Benefits

A Supreme Court Case That May Impact Prescription Drug

On Tuesday morning, October 6, 2020, the United States Supreme Court heard oral arguments in the case Rutledge v. Pharmaceutical Care Management Association.

What is This Case About?

The case involves a challenge to an Arkansas law known as Act 900.  The law was enacted by the State of Arkansas in 2015 to regulate the amounts that a Pharmacy Benefit Manager (PBM) must pay to a pharmacy when an individual covered under a health plan purchases prescription drugs.  The law was challenged by a trade association of PBMs as a violation of the Employee Retirement Income Security Act of 1974 (ERISA).  While the ERISA issues may be of great academic interest to ERISA lawyers, the case may have a more practical effect on individual consumers.

What is a Pharmacy Benefit Manager?

A PBM is a third-party intermediary between employers that sponsor group health plans that include a prescription drug benefit and retail pharmacies that sell prescription drugs to plan participants.  They are usually engaged by an insurance company to administer a plan’s drug benefits, and their goal is to reduce the cost of prescription drugs to the insurance company.  When a plan participant goes to a pharmacy, it is the PBM that determines how much the pharmacy will be paid for the medication.  That amount is known as the Maximum Allowable Cost (MAC).

In addition, it is often the PBM that reimburses the pharmacy for the difference between the MAC and the co-pay paid by the plan participant.  The PBM is then reimbursed by the insurance company for the amounts that it paid the pharmacy.  A PBM may also be paid an administrative fee or a portion of the difference between the MAC and the amount that the insurance company is willing to pay for the medication.

What Was Act 900 Intended to Accomplish?

A pharmacy does not purchase prescription drugs from a PBM.  It purchases medication from a wholesaler.  The problem that the legislation was intended to address is that, sometimes, the MAC is less than the amount that the pharmacy has to pay its wholesaler for a particular prescription drug.

As a result, Arkansas, like many other states, enacted legislation regulating the MAC that a PBM must pay to a pharmacy; requiring that a PBM set its MAC in an amount that is at least equal to the pharmacy’s purchase price.  The proponents of the legislation argue that many small, independent pharmacies have been forced out of business because their acquisition costs for prescription drugs often exceeded the MAC paid by the PBM.

How Did the Lawsuit Get Started?

The lawsuit was filed by the Pharmaceutical Care Management Association (PCMA), a trade association of PBMs.  The PCMA alleged that the Arkansas statute violates ERISA.  ERISA is a federal law that regulates employee benefit plans and seeks to protect employees.  ERISA contains a preemption provision that precludes states from enacting laws that also seek to regulate employee benefit plans.  Of course, the PCMA was not motivated solely by loyalty to federal law.  It claimed that the law eliminates an incentive used by PBMs to reduce the cost of prescription drugs.

It also likely reduces the profits earned by PBMs and increases the regulatory burden.  The state, of course, argued the opposite.  It claimed the law would protect consumers by preserving smaller, independent pharmacies and providing greater access to less profitable drugs.  The PCMA won in the district court as well as in the U.S. Circuit Court of Appeals for the Eighth Circuit.

How Will the Supreme Court Rule?

It is, of course, impossible to predict what will happen in the Supreme Court.  As of October 6, 2020, when the case was argued, the Court had only eight members.  This means that, if the Justices split, 4–4, the decision of the Appeals Court will be upheld, and Act 900 will be overturned.

In addition, similar laws of many other states would suffer the same consequence.  While each side may have presented its case as important for consumers, the issue is much more esoteric.  The issue is ERISA preemption, which has a long and confusing history.  Justices may react differently to that issue than they would if the case were simply presented as pro- or anti-consumer.

For further information or for assistance with your health and prescription drug benefit plans, contact RMC Group.

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Health and Benefits

Reducing Costs with Narrow Network Health Insurance: What Employers Need to Know

Rising health insurance costs continue to burden businesses with increasing overhead expenses. The trend is likely to accelerate as a result of the Covid-19 pandemic.

Premiums for employer-sponsored health plans have steadily increased from 1999 to 2018, more than doubling their costs in the 20-year span. Large employers expected to see a 5- or 6-percent increase in 2020 before Covid-19 struck.

Now, Covered California is projecting premium increases of 4 to 40 percent for employer-sponsored plans nationwide this year — and filings with the District of Columbia support those numbers. Aetna and United Health have asked regulators to approve increases of 7.4, 11.4, 17.4 and 38.0 percent for various plans in the District.

In light of this trend, more and more businesses are turning to narrow network health insurance plans as one way to mitigate rising premium expenses. These plans were fairly uncommon when premiums were much lower. But 18 percent of large companies (i.e., 5,000-plus employees) offered a narrow network plan in 2018. While fewer smaller companies offered these plans, many smaller companies are following the lead of larger employers and are beginning to turn to these plans as a cost-mitigation strategy.

If your business is looking to mitigate the rising costs of health insurance, a narrow network health insurance plan can be the solution. When used appropriately, a narrow network health insurance plan can effectively address rising health insurance costs for both employers and employees. The following are some of the most common questions businesses have about these plans.

What Are Narrow Network Health Insurance Plans?

Narrow network health insurance plans limit provider choice. They are defined by a narrow network of healthcare providers. A narrow network may include physicians, specialists, hospitals, urgent care clinics and other medical providers; it just doesn’t have as many options as a broad network plan. While there isn’t a universal mark for exactly what constitutes a narrow network, all of these plans are more restrictive than their broad network plan counterparts.

In restricting the provider networks, narrow network health insurance plans are similar to health maintenance organizations (HMOs). HMOs commonly also have more restrictive lists of in-network providers.

Are Narrow Network Health Insurance Plans Compliant with the Affordable Care Act?

Not only are narrow network plans generally compliant with the Affordable Care Act (ACA), but they have long been a primary component of the ACA’s cost-controlling strategy.

When the ACA adopted marketplace exchanges back in 2014, approximately 70 percent of the health insurance plans made available through the exchanges were either narrow network or ultra- narrow network plans. These types of plans continue to dominate the individual marketplace today, accounting for 72 percent of marketplace plans in 2019. (For the 2014 survey, a narrow network health insurance plan was defined as a plan where 30 percent of a region’s 20 largest hospitals did not participate in the plan.)

Just as the ACA marketplace exchanges can offer narrow network health insurance plans, an employer can generally offer these plans without worrying about non-compliance penalties. Many narrow network health insurance plans meet all of the ACA requirements. A health insurance professional who has experience with these types of plans can make sure that your business chooses an ACA compliant plan.

How Do Narrow Network Health Insurance Plans Help Control Employers’ Health Plan Costs?

Narrow network health insurance plans help mitigate costs by prioritizing cost, while also ensuring that plan participants have adequate access to healthcare.

First and foremost, narrow network health insurance plans limit the providers that the plan works with. This is often done by lowering reimbursement rates for providers. This results in limiting in-network providers to those providers willing to accept the plan’s rates. In most cases, much more affordable coverage is secured.

Second, these plans usually provide very limited or no coverage for out-of-network claims, which are generally more expensive. By limiting out-of-network coverage, a narrow network health insurance plan can hold costly out-of-network claims in check. In comparison, a plan that offers more out-of-network coverage would have to pay more for these often-expensive claims.

Third, these plans tend to not require primary care referrals for specialist visits. This is a point of distinction between narrow network plans and HMOs, which usually do require referrals. The savings is not insignificant. Even though a single referral visit might not result in a huge claim, the cumulative savings across all participants is substantial when these claims are eliminated.

Results of These Reasons

For these reasons, a narrow network health insurance plans reduces the cost of healthcare. As a result, an insurance company that offers narrow network health insurance plans is generally able to charge lower premiums.

An alternative for cost mitigation is to require its employees to pay a larger share of premiums. However, this is no way to engender employee satisfaction and usually is not the best option. Thus, a narrow network plan is seen by many business leaders as a better cost-mitigation tool.

Narrow network health insurance plans available through marketplace exchanges can save individuals and families about 16 percent on their premiums. Detailed data on employer savings isn’t as readily available because businesses have adopted these plans at a slower pace than individuals. But businesses can normally expect to see their costs drop when adopting a narrow network health insurance plan.

The best way to determine the savings that your business can realize by implementing a narrow network health insurance plan is to engage an insurance professional to conduct an analysis based on your specific situation and plan details. An insurance professional familiar with narrow network and broad network health insurance plans can assist with completing an analysis.

How Do Narrow Network Health Insurance Plans Help Control Employees’ Health Plan Costs?

Employees likewise benefit from the lower premiums that narrow network health insurance plans offer. Unless an employer keeps the savings to itself, employees can expect to pay less for a narrow network health insurance plan than they would for a broad network health insurance plan.

Additionally, as discussed above, an employee does not need a primary care physician referral in order to see a specialist. An employee’s copay may be only $30 or $50 for a single referral. If the employee needs multiple referrals to specialists in a year, though, the savings can add up to hundreds of dollars. This can be an especially valuable to patients that have complicated health issues and families that have multiple people who need to see specialists.

Do Narrow Network Plans Provide Sufficient Access to Coverage?

While narrow network health insurance plans generally meet ACA requirements and usually provide adequate coverage for most employees, they do have limited networks of providers. An employer might find that it has some employees whose coverage needs are not sufficiently met by a limited healthcare network.

For example, some narrow network health insurance plans may not have certain specialists in-network within a given region. This can create an issue for employees who need to see out-of-network specialists and pay for the specialized care out of pocket as a result.

How Do Narrow Network Health Insurance Plans Fit Into Tiered Plan Structures?

To address the risk of insufficient network coverage, some businesses turn to a tiered plan structure. Tiered plans consist of two or more different health insurance plans. One of these plans is a narrow network health insurance plan, and another is a broad network health insurance plan.

With a tiered plan, employees can select and pay for whichever level of coverage best suits their situation. Those who don’t need extensive coverage can save on premiums by selecting the narrow network option. Those who need more extensive coverage can procure it through the higher-priced broad network health insurance plan.

A tiered plan might not save businesses as much as a strict narrow network health insurance plan could since some employees will likely opt for the more expensive broad network health insurance plan. Nonetheless, this structure is an effective way to reduce health plan premiums while still meeting employees’ needs.

In addition, a tiered network plan can reduce the risk of over-insuring some employees, since employees can tailor their plan selection to their individual needs.

What Other Challenges Come with Implementing Narrow Network Health Insurance Plans?

The limited healthcare provider networks of narrow network plans might create a few challenges during implementation of a plan. However, each of these can be addressed with a well thought-out implementation.

First, employees may not even know the providers who are in their current healthcare network or realize how the list of in-network providers will change. A 2015 study found that 44 percent of people who purchased health insurance for the first time weren’t aware of the providers who were in their network. Often, some people never bother to find out.

To address this concern, human resources representatives can educate employees on the providers in a narrow network (or even a broad network) during open enrollment. This is a best practice regardless of whether a business offers a narrow network health insurance plan or a different type of plan.

Second, some employees might discover that their current providers are not in their employer’s new narrow network health insurance plan. This is a challenge that may be managed by helping employees find new providers who are in-network. It’s generally not an issue after implementation, once employees have made any necessary provider changes. Also, employees who are unwilling to change providers can stay with their current providers by paying the out-of-network costs.

Third, some plans may lack providers in certain specialties. This should be kept in mind as businesses evaluate plan options, and it’s a good reason to consider a tiered plan structure (see Tiered Plan Structures).

Fourth, some employees who need specialized medical care may have to drive long distances for appointments and procedures. Businesses can accommodate employees who are in this situation by offering more paid sick leave. HR representatives can remind employees that a mileage deduction for medical-related driving is available if employees meet certain requirements. The medical mileage deduction for 2020 is 17 cents per mile.

Can Narrow Network Health Insurance Plans Be Paired with Health Savings Accounts?

Health savings accounts (HSAs) are tax-advantaged savings accounts that can be used for medical expenses. These accounts can only be set up in conjunction with high deductible health plans (HDHPs), which meet specific deductible and limit requirements as defined by the IRS.

For 2020, HDHPs must have deductibles of at least $1,400 for individuals or $2,800 for families. Their maximum out-of-pocket limits cannot exceed $6,900 for individuals or $13,800 for families.

HDHPs and narrow networks technically refer to different aspects of health insurance plans. However, the two features are frequently used in conjunction to mitigate costs. Thus, many narrow network plans are HDHPs and can have HSAs associated with them.

Having an HSA option can be helpful when introducing narrow network health insurance plans to employees. Businesses that haven’t yet switched to an HDHP can highlight the HSA as a beneficial feature that can help with both in-network and out-of-network costs. Businesses that already have an HDHP option can remind employees of the HSA feature, potentially using it to quell concerns about increased out-of-network costs.

Do Narrow Network Health Insurance Plans Have Broad or Narrow Pharmacy Plans?

Narrow network health insurance plans can be paired with either broad or narrow pharmacy plans. Choosing these two elements separately gives employers greater ability to adjust their health and pharmacy plan offerings to their budgets and their employees’ expectations.

How Can Employers Find a Narrow Network Health Insurance Plan?

For help exploring narrow network health insurance plan options, contact RMC Group. As experienced professionals in the industry, our team can perform a provider audit to compare your current plan’s in-network providers to those who participate in a narrow network. We’ve assisted multiple businesses throughout the country with narrow network health insurance plans, and we’re ready to help yours too.

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Health and Benefits

How Do You Get More of Your Employees to Use Telehealth?

Healthcare has evolved dramatically in recent years, making it easier than ever for people to receive the care they need — without even leaving the house.

Telehealth is a modern service that offers access to doctors, specialists, and therapists at any time through phone calls or video chats. It’s an increasingly common addition to healthcare plans offered by employers.

From an employer perspective, partnering with a telehealth provider is worth considering for many reasons:

  • Telemedicine helps reduce employer costs, especially for self-funded plans.
  • Access to quality care is quick and easy, especially in areas without other adequate medical care options.
  • Telehealth helps reduce employee absenteeism.
  • Additional health benefits can help you attract and retain talent.

While telehealth is not appropriate for all medical needs, it can be a valuable tool for employers and employees alike to control the cost of maintaining good health.

Common Uses for Telehealth Services

When an employer adds or transitions to telehealth coverage, the employer must communicate its benefits to employees through printed brochures and online benefits explanations. The material should list the ways in which telemedicine can be an effective alternative to a traditional doctor visit.

Limited Primary Care

While telehealth cannot replace a primary care physician, it can be helpful when an employee is unable to schedule an appointment for themselves or their family.  In many cases, the employee will be able to discuss symptoms with a telehealth provider and get an initial diagnosis.

Follow-Up Care

In addition, prescriptions can often be refilled through telehealth.  Doctors frequently require follow-up visits after surgeries or other treatments. If a patient has no complications, telehealth is much more convenient than an office visit.

Physical and Behavioral Health

Medical care, such as physical therapy or mental health therapy, can easily be accomplished through telehealth.  Patients can follow guided prompts or discussions with medical professionals without having to be in an office in person.

Transportation Limitations

A common obstacle in addressing health issues is inadequate transportation. An employee may not be able to get to a doctor’s office.  Telehealth appointments are available anywhere they have access to a computer and/or telephone.

Set Goals to Increase Usage

Managers can and should track the usage of telehealth by their employees and set goals for future use. The metrics used can include:

  • Total amount of money saved by the company
  • Total number of telehealth consultations by employees each month
  • Utilization rate, which is the number of consultations divided by the total number of primary care physician consultations plus the number of telehealth consultations

To meet your company’s goals for telehealth use, you must design a telehealth plan that will interest employees. Consider plans that require no out-of-pocket payments or consultation fees.

Then, implement a communication strategy so employees are fully aware of their benefits. This outreach campaign can include:

  • Emails scheduled regularly to remind employees of the value of telehealth services
  • Links to the telehealth provider’s website as well as appropriate contact phone numbers
  • Flyers posted in employee break rooms and bathrooms
  • Messaging that is appropriate for common seasonal issues, such as allergies or the flu
  • Testimonials from a “telehealth champion,” or someone in the company that appreciates telehealth

It’s important to note that telehealth may not be suitable for an emergency.  In all communication with employees, you should make it clear that, if an employee or family member needs immediate care, they should go to an emergency room.

Finally, offer assistance with enrollment. Employees will appreciate information outlining the steps necessary to take part in the program. Make internet access available to help employees complete any applications — and participate in telehealth appointments.

Criteria for Selecting Providers

For employees to feel comfortable with a transition to digital healthcare, you must select a telehealth provider that has a user-friendly platform and a proven record of success. If the process is frustrating, employees will prefer more costly in-person options.

An ideal provider should offer participants a fast, easy, and seamless experience. There should be numerous ways for employees to schedule telehealth appointments. Younger employees are often more comfortable with virtual channels, while older employees may feel more comfortable speaking directly to a person.

Employees should be able to connect with a telehealth service provider via:

  • Mobile app
  • Website
  • Online chat
  • Phone

Providers should be able to demonstrate a focus on patient satisfaction through metrics as well. When comparing services, HR managers can request information on the expected ROI of the telehealth service. Ensure that the provider has a utilization rate of at least 25%. If the utilization rate is lower, it may indicate concerns with the platform.

Sometimes, providers will increase costs when utilization rises.  If this is the case, make sure that the ROI increases as well. Otherwise, you may not realize the cost savings expected from adding telehealth.

Consider using a provider with a fee structure that is more attractive to employees. For instance, look for plans that charge employees on a monthly basis for unlimited use. If there is a charge every time a patient seeks a consultation, utilization rates may remain low.

Modernize with Telehealth

The transition from a traditional healthcare plan to telehealth for employees can be smooth and effective. Managers should work with service providers that are able to demonstrate a proven track record for ROI and utilization rates through a user-friendly platform.

Do not presume that employees will naturally adopt telehealth practices without a targeted outreach campaign to educate them on the appropriate uses and benefits. Keep the tone of all communications — whether through email, flyers, or in-person meetings — positive and supportive.

Remind employees that telehealth is a powerful and affordable tool for managing their health in a way that benefits everyone — but only when they enroll and use it.

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Health and Benefits

Attracting and Retaining Talent Through an Employee Benefits Package

Top candidates look for more than a competitive salary when deciding whether to accept a job offer.  Benefits packages are a significant part of the decision-making process for 63% of job candidates, according to a study by Glassdoor.

By offering a generous benefits package, human resource executives and managers can use benefits to attract and retain employees.

To create a comprehensive package that sets the company apart from the competition, it may be necessary to change your benefits, customize options, or create a targeted outreach strategy for communicating offers.

Inventory Your Benefit Offerings

To enhance a recruitment strategy by focusing on benefits, you first must determine if your package is sufficient to attract and retain the employees you seek. By taking an inventory of our current offerings, you may discover that adding desired benefits is more affordable than you might have anticipated.

Glassdoor has reported that health, dental, and vision insurance are among the most important benefits to potential employees.  A robust and attractive benefits package may also include:

  • Life insurance, including permanent insurance and term insurance
  • Accidental death & dismemberment (AD&D) insurance
  • Short-term disability insurance
  • Long-term disability insurance
  • Hospital indemnity insurance
  • Critical illness insurance
  • Cancer insurance

By having multiple benefits options, you can customize a benefits package for a particular employee. This way, an employee receives the benefits he or she wants, not simply what a broker wants to provide.

Consider Additional Benefits

A strong insurance program is only one component of a comprehensive offering. FlexJobs notes that eight out of 10 parents said flexibility and work-life balance were the most important factors when looking at new opportunities.

To that end, craft your human resource strategy with team-focused wellness programs and behavioral health programs, including:

  • Flexible hours
  • Paid maternity and paternity leave
  • Unlimited time off
  • Free or discounted daycare services
  • Free or discounted yoga classes
  • Free or discounted in-office snacks and drinks
  • Free or discounted gym memberships or an on-site/near-site gym
  • Work-from-home options
  • Student loan assistance

To round out a comprehensive package, retirement benefits such as a 401(k) or profit-sharing plan should also be considered.

Share Benefits Before the Job Offer

A mistake that employers often make is failing to fully outline benefits packages, even when they are attractive and well thought out. Information should be provided well before a job offer is made so candidates can make an informed decision.

Update Glassdoor

Your company’s Glassdoor profile should contain all benefit information so that a potential employee can see what you are offering. In the past, only employees could provide this information, which resulted in misinformation or out-of-date details. Now, Glassdoor allows employers to directly update their employee benefits package information online. Take advantage of this feature to communicate your current offerings to candidates.

Build a Benefits Portal

If your company has a career portal on its website, be sure to include a link to a benefits section. This way, candidates will be able to see all benefits on demand, enabling them to come prepared with questions during the interview process.

Provide a Printout

When scheduling interviews, start the conversation about benefits. Have a printout prepared that outlines an average total compensation statement with a section on the benefits you provide. It’s often difficult for candidates to understand how expensive benefits can be for a company without seeing the actual cost on paper.

Include a Dialogue Within the Interview

Make sure to discuss benefits as part of the interview process. This topic is often overlooked when discussing job responsibilities and company culture. By including benefits as part of the interview, managers can answer questions and share company values with candidates.

Enhance the Employee Handbook

To retain and engage existing employees, enhance the employee handbook with in-depth information about the benefits package. This handbook should be shared at annual performance reviews as well as any general meetings discussing company-wide news.

Make sure the employee handbook contains the same detailed cost analysis you provide candidates. Employees often forget the actual cost and value of their benefits packages. The expense of insurance and other benefits should be a part of any conversation about compensation.

Survey Employees to Evolve

To provide the benefits that are the most meaningful to current and future employees, it may be helpful to survey existing team members to better understand what offerings motivate them. Managers may be surprised to learn that flexible schedules — such as four 10-hour shifts weekly rather than the traditional five-day workweek — may be as important to employees as raises.

When integrating less expensive or free benefits, you can shift resources to more insurance coverage and other programs employees care about.

Finally, in order to improve your recruitment and retention strategy, remember to keep the perspective of employees and candidates as a priority. If it is difficult to upload a resume through your website or communicate with the human resources team, having a comprehensive compensation package including robust benefits offerings may make less of a difference.

Once you know what matters most to the people you want to hire, be sure to communicate your strategy with any recruiters you use.  These efforts to improve benefits will reflect well on your company, improving employee morale and facilitating interest from more qualified candidates in the future.

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Health and Benefits

Employee Advocacy Case Study – Carrier Confusion

Employee Advocacy

Employer-sponsored health insurance and group benefits can be confusing. It is important to have trusted advisors available to assist plan participants in understanding their coverage and navigating the claims process. RMC’s employee advocacy team is a live resource available to assist plan participants with any questions or issues they may experience while using their coverage.

Below is a recent example of RMC’s employee advocacy team stepping in to quickly resolve an issue that a plan participant experienced while filing a claim.

The Accident

An employee fell at home and suffered a serious bone fracture. The employee received immediate medical attention, and their employer-sponsored health insurance covered the initial setting of the bone and all necessary rehabilitation. Due to the severity of the break, the employee was directed by their doctor not to return to work for approximately 90 days to avoid aggravating the injury. Luckily, the employee’s employer also provided Short-Term Disability and Accident Insurance to replace some of the income lost during the rehabilitation period.

Trouble Filing the Claim

Unfortunately, filing the Short-Term Disability and Accident claim was not as straight forward as the employee had hoped. First, the employee attempted to contact the insurance company to start the paperwork for the Short-Term Disability and Accident Insurance claim. After two weeks without success the employee contacted their Human Resources Manager for assistance. Over the next week the HR Manager was also unsuccessful in initiating the claim. Finally, the HR Manager contacted RMC to ask for assistance.

The Resolution

Within ten minutes RMC’s employee advocacy team determined that the employee and HR Manager had been contacting the wrong insurance company. Instead of the contacting their current carrier, they were attempting to file a claim with a carrier they used several years ago. RMC contacted the current carrier and received confirmation of benefits and the forms required to file a claim right away.

RMC’s employee advocacy team assisted the employee in completing the forms and submitting the claim. The team was also able to streamline the claims submittal process, eliminating several unnecessary and redundant steps that resulted from poor communication between the carrier and employee. On the day following the claim submittal, the carrier informed RMC’s team that the Accident funds would be sent to the employee the next day and the Short-Term Disability funds would follow within a week.

The employee was extremely thankful to have this claim resolved. Now that the burden of financial uncertainty had been removed, their attention could be focused on what matters most: recovery. RMC’s “human touch” approach made all the difference!