2016 has been a year of bold change, and minor adjustments. A raucous presidential election with a surprise winner now unsettles long-held notions of healthcare, regulation and public policy that will have a large impact in the workplace for years to come. Employee Benefit Adviser examines the trends that benefit professionals discussed and debated in the past year.
One of the heartiest applause lines from the campaign of GOP nominee Donald Trump was the repeal of Obamacare with “something better.” Following Trump’s win on Election Day, benefit experts and Republican politicians predicted the immediate demise of the Cadillac tax and other provisions of the health plan that has provided coverage to millions of uninsured Americans. Almost immediately, President-elect Trump backtracked somewhat in an interview on 60 Minutes about eliminating the ACA outright. He plans to keep the clauses that cover pre-existing conditions and insured children up to the age of 26. As one broker told EBA, “The Republican response has to look as different from the ACA as it can, even though some portions were once Republican ideas, like the individual mandate.”
The video nurse practitioner will see you now. As Americans have embraced virtual experiences such as Facebook and Snapchat to enhance face-to-face interactions, the option of seeking medical advice via a video camera-enabled workstation is seeing greater approval among workers. Look at the figures: Telemedicine service offerings among large employers surged to 59% in 2016 from 30% in 2015, according to Mercer’s National Survey of Employer-Sponsored Health Plans. The survey of 2,544 participants also noted the potential for significant savings when health plan members have a telephonic or video visit to assess some types of non-acute issues. A telemedicine visit typically is $40 versus $125 for a traditional office visit. “Now we have to get people to use the service in order for members and plan sponsors to benefit from the offering,” says a Mercer healthcare reform leader.
As GOP politicians openly announce support for plans to eliminate the Affordable Care Act and privatize Medicare, one part of the national health plan is gaining in popularity. According to research from Connecture, shopping for Medicare Part D plans is up by 17% from last year’s Annual Election Period, and the share of all enrollments through multi-carrier brokers is up by 8.4% to 38.2%. Despite these numbers, more consumers are delaying their plan selection and enrollment to identify the plan that provides the best coverage at the lowest cost. “This may be particularly important to consumers as costs for mandated prescription drug plans have increased 9% to 12% over last year,” according to Connecture. But the clock is ticking: As GOP Speaker of the House Paul Ryan said days after the election, “Medicare has got some serious problems because of Obamacare. Those things are part of our plan to replace Obamacare.”
Once-novel gadgets that count your steps and monitor your heart rate have reached near-ubiquity, so much so that brokerage experts wonder if there is a real return from supporting these devices. G2 Crowd’s Michael Fauscette says physical wellness data has received more attention due to people’s desire to be physically healthy and because physical wellness is easier to track and manage than mental and fiscal wellbeing. Another expert noted the existence of a distinct divide between products and apps that are marketed toward individual consumers and products that are marketed toward employers. While devices like Fitbit and MapMyRun from Under Armor are focused more toward consumers, “programs that focus on claims data and biometric screenings are being marketed toward employers seeking to build a strong wellness program within their company,” the expert said.
Thanks to the new fiduciary rules from the Department of Labor, led by Sec. Tom Perez, that are set to go in effect in April 2017, anyone offering retirement advice now has fiduciary responsibilities to that client. Although the Trump administration may re-examine this game-changing rule, retirement plan advisers are scrambling to determine their exposure to the change in their client relationships. According to Kevin Robertson of HSA Bank, the details of how to implement this rule are far from simple. “Bottom line, they have attempted to protect investors and what constitutes investment advice and what type of playbook advisers can utilize,” Robertson said at EBA’s Workplace Benefits Summit. Plus, employers must reevaluate their service agreements on what exactly a service provider is responsible for and what they aren’t, said a panel of experts at an event sponsored by Lockton.
The heartbreaking epidemic of abuse of painkillers and heroin is taking a toll on the workplace. Opioid abusers cost employers nearly twice as much ($19,450) in medical expenses on average annually than non-abusers ($10,853), according to research from Castlight Health Inc. Another study estimates that opioid abuse costs U.S. businesses close to $26 billion a year. In a survey of one million Americans who use the Castlight’s health benefits platform, nearly one out of three opioid prescriptions subsidized by U.S. employers is being abused. These pain medications within this class include Vicodin, OxyContin, Percocet, and other drugs. Says Castlight’s Kristin Torres Mowat, “from higher spending on healthcare, to lost productivity, to the dangers associated with employees abusing medications in the workplace — these are aspects of the crisis that are too often overlooked in the current discussion.”
Jokes about participation trophies aside, Millennials are changing the way American employers address and deliver their benefits. Compared to baby boomers, they are burdened with excessive student loan debt, are open to saving for retirement and wish to work at a job that empowers them and improves the world. They also view employee benefits differently than their older colleagues. Stephen Bygott, vice president for marketing at Colonial Life, says there is a lot more thinking that needs to be done in order for this reimagining to be fully realized. “For millennials, being healthy doesn’t just mean not feeling sick,” says Bygott. “It’s commitment to an ongoing healthy approach to life, including eating habits, exercise and avoiding activities that can be viewed as damaging.”
Benefit managers have enough on their plate and the last thing they want is an audit from the Department of Labor over their retirement plans. This threat continues, however, as audits pertaining to The Employee Retirement Income Security Act of 1974 remain a focus of the DOL. While they did not divulge the number of ERISA audits for 2016, officials that investigate possible violations in U.S. companies with more than two employees that offer a retirement plan say that they do not foresee any change in audits under a Trump administration. Plus, employers need to be aware of ERISA class action lawsuits filed by employees who believe they have not been served by their employers and their retirement plan administrators. Such lawsuits have been filed against NYU, Duke University, Yale, Oracle, Northrup Grumman and others.
For a company that aimed to shake up the employee benefits technology space, Zenefits made plenty of unanticipated waves in 2016 as well. Zenefits started the year by paying a $7 million fine for selling insurance without a license. The firm slashed hundreds of jobs and saw the resignation of two CEOs. However, in October, the company launched a new product line, Z2, and now offers a license tracking product free to all producers.
The numbers continue to stagger. According to the Center for Disease Control, 1 in every 68 children in the United States will be diagnosed on the autism spectrum. In response, more workplaces are offering support for testing for the disorder and covering treatments such as applied behavior analytics, which aims to determine how a person diagnosed with developmental delays behaves in social situations and how they can learn and adapt for their surroundings. “ABA, which is considered the standard of care provided, historically has been left out of coverage plans, but employees are now covering it,” says Lorri Unumb of Autism Speaks. She estimates that at least 40% of these large corporations offer Autism benefits such as ABA, diagnostic testing, pharmaceutical coverage and speech physical and occupational therapies as well.
Wellness programs have expanded their field of focus from physical health such as avoiding diabetes and weight gain, to other, equally pressing concerns: namely, a worker’s fiscal soundness. This year, wellness consultants expanded their programs by offering debt assistance aimed at workers with student loan debt. This approach not only helps the employee with paying off a loan that could last decades, it also increases retention of millennial staffers who have been known not to stay with a single company for long periods of time.