Hsa Health Savings Account Blue Cross

Shifting the burden: employers helping employees manage costs: though company-provided health insurance is the cornerstone to a comprehensive total rewards strategy that savvy employers use to attract and retain the brightest workers, ever-increasing premiums have forced companies to push more costs onto workers–but even that is reaching a saturation point.

In the benefits world, it’s called “ripping the Band-Aid
off,” a process that is painful, but often necessary.

Vail Resorts Inc., a Colorado-based mountain resort company with
seven properties and 20,000 employees during high season, ripped the
Band-Aid off in 2011 when it directly replaced its traditional PPO
health insurance plan in favor of a consumer-driven plan coupled with a
Health Reimbursement Account (HRA).

Benefits analysts and health insurance brokers generally suggest
that companies wishing to adopt high-deductible, consumer-driven plans
ease in the transition over three to five years, introducing consumer
options while phasing out more traditional insurance offerings.

After careful deliberation, a close examination of the
company’s younger, mainly healthy population and the
acknowledgement of a desire to build upon a new program rather than
phase out an older insurance program over the same time period, company
officials decided to make the change all at once.

But Vail Resorts didn’t simply make the change and leave
employees to fend. for themselves. In order for such an abrupt
transition to be successful for the PI company and its workers, a great
deal of education must take place. Employees also must have at their
disposal tools to help them make the right decisions–about everything,
including what insurance plan to choose, which physician to choose,
which test or procedure, which care facility and more.

“We spent a lot of time explaining why we needed to make this
change, how the plan worked, how to go to an in-network doctor and other
aspects of the plan, putting money in the HRA of employees who listened
to a tutorial,” explains David Ganick, director of benefits.
“We also provide incentives for those who get biometric screenings,
get a flu shot or complete a health risk assessment.”

The company is using cost comparison tools from its plan
administrator UMR [United HealthCare Services Inc.] and working with
providers where Vail Resorts has direct contracts to obtain that pricing
data, too. Ganick says those providers account for 45 percent of claims.

The company developed a website outside the intranet firewall that
contains nothing but benefit information and decision-support tools so
employees have a single source of information, says Rebecca Shipley,
director of total rewards.

It also has created programs to meet the unique needs of its worker
population. Few companies likely have programs focusing on high-altitude
pregnancies, which can result in more premature babies and the
tremendous emotional and financial tolls each can bring.

But recognizing that many females in Vail Resort’s total
population are in their prime child-bearing years resulted in a robust
prenatal program for those at-risk. “If we can help make the
difference in one pregnancy, it’s worth it,” Shipley says.

Before the changeover and during the first plan year, Vail Resorts
reiterated that making better health decisions would lower costs for
workers and for the company, which is self-funded. To reward employees
for smart health behavior over the first year under the new plan, Vail
Resorts called for a two-week premium holiday for everyone on the health
plan, including the significant population of seasonal employees on
COBRA.

This gesture cost the company $500,000, but Ganick says it
“was the best message we could send. It reinforces the behavior we
saw over the first year.”

No Signs of Costs Slowing Down

As another open enrollment season passes, millions of American
workers have crossed their fingers and hoped they made the right
choices. And workers aren’t the only ones worrying.

There’s no question that health care issues keep executives up
at night. Company-provided health insurance is the cornerstone to a
comprehensive total rewards strategy that savvy employers use to attract
and retain the brightest workers. But ever-increasing premiums have
forced companies to push more costs onto workers–everything from higher
premiums and deductibles to less-favorable co-pays.

A 2012 Towers Watson survey shows that health care costs are
expected to rise by 5.3 percent in 2013, an improvement from the 5.9
percent bump seen in 2012. The employee cost share continues to rise,
“but we’re reaching the saturation point of shifting
costs,” says Randall Abbott, a senior consulting leader with Towers
Watson. There are only so many costs that can be transferred from
employer to employee without creating a burden. The projected cost of
health insurance per employee in 2013 is $11,507, of which employees pay
$2,596, according to the survey.

A popular way to shift costs is to offer a high-deductible health
plan (HDHP) coupled with a Health Savings Account (HSA), where employees
can park pre-tax dollars to use toward deductibles, copays and other
approved expenditures. Maximum funding amounts for HSAs and types of
allowed expenditures are subject to Internal Revenue Service
regulations. These plans also can be called consumer-directed health
plans or account-based health plans.

According to America’s Health Insurance Plans (AHIP), more
than 13.5 million Americans are covered by HSA-eligible plans in 2012,
an increase of more than 18 percent over last year. In the past five
years, enrollment in HSA-eligible plans has tripled.

Consumer-directed plans are “one of our hottest
products,” reports Tom Meier, vice president, Product Development,
at Health Care Service Corporation. HCSC operates Blue Cross and Blue
Shield plans in Illinois, New Mexico, Oklahoma and Texas.
“We’re experiencing 20 percent to 30 percent year-over-year
growth.”

In order to be successful, these plans should be coupled with
member engagement products and incentives so employees and their
families learn to make better care decisions and lifestyle choices.
Meier says those could include health-risk assessments, age-appropriate
screenings, biometric screenings and well-managed chronic conditions.

Multi-year research by HCSC into 250,000 members who have moved
from traditional to consumer-directed plans shows a double-digit
decrease in medical spend and higher utilization of preventive services.

Decision Support Critical to Employee Self-care

Even in highly technical industries, few workers have the proper
education or experience to comprehend today’s health care delivery
system. Who can successfully navigate an alphabet soup of acronyms and
discussions of copays, deductibles, maximum out of pocket, negotiated
rates and in-network and out-of-network providers–not to mention
treatment options and prognosis for those suffering from acute or
chronic conditions?

That’s why Nancy Wilson, vice president of Human Resources
operations at Indiana Furniture, relies on what she calls “the
human tool.” The company, founded in 1905, has four manufacturing
facilities in southern Indiana and 300 employees, along with 686 covered
lives in its cafeteria plan of medical, dental and vision coverage. It
also provides voluntary benefits such as supplemental insurance from
Aflac.

“I’m adamant that we do one-on-one open enrollment,”
Wilson says. “It takes a week, but we think it’s very
important. We get good questions from employees and can help educate
them on the choices they have.”

The human touch also is present in quarterly employee meetings,
where benefits officials update workers on plan changes, physicians
leaving the network, lower cost pharmacies and other benefits news.
“We take that route versus looking up the information online,”
Wilson says, noting “We want to keep the human touch there,
too.”

Not many companies have the manpower to conduct one-on-one
enrollment or decision support, but the decisions that an employee makes
have never been more vital. “We’re seeing plan design to
encourage specific behaviors,” Abbott says. “Beyond that,
we’re seeing more tools at the point of enrollment and at the point
of care so workers can make informed decisions about their coverages and
their care.”

According to the Towers Watson survey, nearly one-third of
companies reported using a price and hospital quality transparency tool
purchased through a health plan, and another 7 percent had a third-party
tool. Nearly 20 percent of companies were planning on adopting such
tools for 2013, and another 40 percent were considering them within the
next two plan years.

Aetna Inc. is among those insurers with a robust tool, called Aetna
Navigator, to help its members get acquainted with their health plans,
find information about medical topics, locate in-network physicians and
other providers, view their personal health record and estimate
out-of-pocket costs based on their coverage.

The payment estimator tool is used 73,000 times a month, a 15
percent increase over last year, says Dr. Wendy Shanahan-Richards, a
family physician and national medical director for Aetna. The company,
which provides health, dental, pharmacy, group life, disability
insurance and employee benefits, has more than 18 million health
insurance users.

Another popular tool is the Ask Ann virtual assistant that
generates 20,000 chats a day. Capitalizing on the popularity of
smartphones, Aetna has developed a number of mobile apps, including a
mobile ID card that can be electronically displayed at the point of
care. Other apps include a network pharmacy locator and searchable
clinical topics.

The national association of Blue Cross and Blue Shield companies
has developed a cost-estimator tool for 59 eligible procedures and is
working to add several dozen more by mid-next year, says Dr. Brian
Caveney. He is the medical director of health care consulting for Blue
Cross and Blue Shield of North Carolina, one of 30 Blue Cross and Blue
Shield plans that is using the tool. Members can search for medical
providers, hospitals or other facilities in their area, then compare the
results based on quality information from the plan and estimated cost
information based on their specific coverage.

“The goal is to empower individuals with the information they
need to make more-informed choices about their own health care,”
Caveney says.

Help When Workers Need It

Although it may sound like companies are shifting costs to
employees without regard for decision support or the quality of care
they receive, that is not the case, notes Stephanie Elliott, director of
Activation Strategies for UMR. “It all starts with employers asking
‘why’ questions,” Elliott says. “If the answer is
lust cost, then we’re all in trouble.”

Many of the decision-support tools have a quality component that is
based on health plan research, data from the federal Centers for
Medicare & Medicaid Services, The Leapfrog Group or other providers.

Wal-Mart Stores Inc. has joined an increasing number of companies
to designate specific regional and national providers of certain medical
services at no cost to employees. Employers believe they can save money
by incentivizing employees to utilize facilities that have quality
outcomes for certain procedures. The retailer’s Centers of
Excellence program, announced in October, includes heart, spine and
transplant surgeries at six highly-regarded hospitals and health systems
in the United States. Enrollees can receive no-cost consultations and
care for covered procedures, including travel, lodging and food expenses
for the patient and a caregiver.

Technology can also drive decision support with a personal touch.
The number of companies using some sort of telemedicine to remotely
diagnose certain conditions or encourage workers to seek in-person
treatment is just 8 percent, according to Towers Watson. But 9 percent
of companies plan to add the coverage in 2013, and another 27 percent
were considering it over the next two plan years.

During the first 16 months of usage, Rent-A Center has saved more
than $770,000 by contracting with Teladoc Inc. for the 27,000 co-workers
(its term for employees), spouses and dependents on the company medical
plan, says ALeta Dover, global benefits manager. Those savings include
the difference between telehealth and other care options–primary care
physician, urgent care or emergency room–and productivity savings.

About 350 consultations take place each month, and the program has
a 97 percent satisfaction rate. Usage goes up during the winter and
after the benefits department does a mailing to promote the service,
Dover says.

Calling Teladoc is free for those on the plan, which encourages
workers to use it versus toughing it out on the job or leaving
co-workers short-staffed. Calls are usually returned within 30 minutes,
and physicians are board-certified and accredited in the state to write
prescriptions. “Co-workers often, work from 9-10 a.m. to eight or
nine at night,” Dover says. “If they’re not feeling well,
they call the doctor to get fit in today or tomorrow or visit the ER or
an urgent-care facility. Workers in stores are close-knit, and an
illness creates a hardship.”

A handful of callers have been told to seek care immediately for
heart issues or potential appendicitis. One employee credits Teladoc for
saving him from a potential massive heart attack.

“We have avoided [medical] situations that could have been
much worse because co-workers who were unsure what to do called
Teladoc,” Dover says. “As benefits professionals, we always
get complaints, but we don’t with this.”

Matt Bolch (matt@landscape-creative) is a principal at Landscape
Creative, an editorial communication firm that has an emphasis on health
care.