As an employer, your health care costs are likely to rise in 2017, according to the National Business on Group Health Plan. But, by how much? In some ways, it’s up to you. The health insurance marketplace will evolve and change, but it’s unlikely that the direct costs or insurance premiums are going to decrease. The year-over-year increase that you pay, as the sponsor of a health care plan, comes down to regular analysis and review of plan selection and use.
Your company’s health care costs are primarily defined by the plans you offer to employees. And for employers that insured employees for decades, the idea of eliminating the most expensive plan option may feel heartless. Some of your employees have grown to depend on the doctors they see who accept that one plan. But those doctors likely accept other plans. And as long as you offer other, more affordable plans, you could consider paying a smaller percentage of that high-end plan, especially if times are tight. Review Your Current Enrollees Review your participant list and ensure everyone still qualifies for your health benefit. If you have a few employees who have gone through a divorce, you could still be paying for the ex-spouse’s insurance. Respectfully ask they exit the plan. While employees really value dependent coverage, keep in mind that you’re not required to offer or pay health insurance costs for any partners, spouses or dependents. And with other insurance potentially available for those family members, consider reducing how much of those costs you’re willing to cover. Consider Offering a High-Deductible Plan Consider offering plans that have high deductibles and high out-of-pocket limits. These are great options for a young, healthy workforce unlikely to visit the doctor much throughout the year. Health insurance plans usually include a free annual physical, so encouraging your healthy staff members to consider these kinds of minimal coverage plans won’t discourage them from critical, preventive care. In addition, you can encourage your employees to buy supplemental plans that will help them cover out-of-pocket costs and living expenses in the case of a serious accident or illness. The high-deductible health insurance plan covers the majority of the health care costs, and the supplement insurance can cover many out-of-pocket bills. Create a Wellness Program Jump on the preventive care bandwagon. By encouraging preventive care like flu shots, annual physicals and cancer screenings, you’ll create a culture in your workplace that values healthy living. Will a healthier workforce really translate to lower insurance premiums? In short, yes. If you have a workforce that’s routinely sick, your health insurance contract prices will rise faster every year. But more importantly, by encouraging healthy living and preventive care, you’ll have a more productive workplace. Employers with healthy employees have higher productivity, fewer sick days and lower turnover. The real savings could come in the form of offsetting other costs. Don’t ignore your health insurance costs. You need to invest your time in revising your company’s health plan options, reviewing plan use by employees and encouraging preventive care. You aren’t at the mercy of rising health care costs. You’re a driver of those costs, and you can steer your company in a better, leaner direction.
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Currently, 23 states and the District of Columbia have legalized medical marijuana. Despite the fact that medical marijuana laws vary from state to state and clash with federal law, most state prescriptive marijuana laws protect both eligible patients and their primary caregivers. According to an article by the National Council of State Legislatures, patients who have their physicians’ permission to use marijuana to treat a chronic illness or relieve symptoms may be protected from arrest in some states.
In light of the above, employers may be contemplating whether they should accommodate employees who have been certified to use marijuana medicinally. An article on the Blog for Business Law noted that the Americans with Disabilities Act (ADA) calls for employers to provide reasonable accommodation for certified employees with a disability. These include prescribed marijuana users who are authorized as disabled under state law. Prior to making reasonable accommodation for a registered medical marijuana employee, you may want to reflect on the following strategies: Clear Written Policy It’s vital you first closely follow the legal requirements of the state and relevant federal regulations when writing your company’s policy on prescriptive marijuana accommodation. Involve your human resource personnel and acquire legal advice from an expert on the specific state laws to draw up a clear and comprehensive policy. Reflect on Risk Threshold You may want to include in writing prohibiting marijuana use or possession at work and circumstances resulting in employee termination, such as failure to fulfill job responsibilities or posing safety issues towards others. Since termination should be regarded as a last resort, the following actions may be taken if marijuana use results in impairment:
The employee concerned can be subjected to consistent monitoring to safeguard workplace standards and safety. Effective, Ongoing Communication A company that communicates transparently and collaboratively with its staff on an ongoing basis shows its interest in achieving shared goals. This also prevents unnecessary disputes in the long run. Include one-on-one, informal communication with the employee to clarify any area in the policy that he or she lacks understanding of, communicate expectations and prohibitions on marijuana use, gather feedback on how the employee is coping with work responsibilities and recommend any alternative job areas. Undeniably, all information will have to be kept confidential. Publishing your policy on the company’s intranet is also a way to encourage open communication so concerned employees are clearly informed of the processes and requirements they need to observe as well as expectations they have to meet. Laws surrounding medical marijuana may change from time to time. It’s important to keep abreast of legal developments in your state and align your company’s policy with current state laws. According to an article in the Minneapolis Star Tribune, by constantly reviewing your company’s guidelines and regularly educating your employees, you’ll be confident that medical marijuana use is handled in a relevant, consistent and transparent manner throughout the organization. There are various health insurance companies in pa, which provides best health insurance for small business owners and if you want to know more then please drop your comments. Don't let the end of your marriage derail your savings or reduce your Social Security benefits.
When it comes to retirement, divorce can be disruptive at best and devastating at worst. This is especially true of divorce after age 50. Spouses are at risk of losing a significant amount of their retirement savings and may have relatively few years left to replenish their accounts. "Both spouses have to adjust, but the spouse with the lower income has to adjust more," says Nicholas Yrizarry, president and CEO of investment firm Align Wealth Advisors in Laguna Hills, California. He recommends divorcees move forward by stepping back, regrouping, restrategizing and re-implementing their retirement plans. Take the following steps to retool your retirement plan after getting a divorce:
Ensure You Have a Proper Qualified Domestic Relations Order If your spouse has an employer-sponsored retirement plan, nothing may be quite as important as obtaining a Qualified Domestic Relations Order, otherwise known as a QDRO. "QDROs are orders that qualified plans require in order to pay out nonparticipants," explains Dana M. Stutman, a founding partner of the matrimonial law firm Stutman Stutman & Lichtenstein, LLP in New York City. In short, the only way to get a payout from a 401(k), pension or similar plan if you're not the worker is if you have a QDRO. However, QDROs need to be written in a certain way to be accepted. "The (retirement) plan administrator may have very specific rules," Stutman says. Because of the complexities of these orders, they can be time-consuming and expensive for an attorney to draft. A more cost-effective option may be to employ an actuary who specializes in writing QDROs, Stutman suggests. The nonparticipating spouse can take money received from a QDRO and roll it into his or her own IRA or other retirement fund. Before taking that step, consider whether you will need any of the money for another purpose. In most cases, people are assessed a 10% penalty if they withdraw money from a tax-favored retirement plan prior to age 59 ½. However, you can take proceeds from a QDRO without a penalty, says Shelby J. Smith-Beckert, senior financial consultant with Orlando-based International Assets Advisory. You'll need to make the withdrawal prior to rolling the money into another retirement account though. Understand Your Spousal Benefits for Social Security A divorce doesn't necessarily mean you lose out on Social Security spousal benefits. So long as you were married for 10 years and have not gotten remarried, you are entitled to receive retirement benefits from your ex-spouse's Social Security record. If you start receiving benefits at your full retirement age, you'll receive an amount equal to one half your ex-spouse's full retirement benefits. If you claim benefits early at age 62, you'll get a reduced amount. However, your ex-spouse will need to be at least 62 as well for you to begin claiming benefits, and unless he or she is already receiving Social Security benefits, you'll need to wait two years after your divorce to begin payments. Claiming these benefits in no way affects your ex-spouse's retirement benefits or that of anyone he or she marries after you. Create an Inventory of Investments and Assets Now that you understand what, if any, retirement funds you'll receive from your ex-spouse, it's time to take a complete inventory of your assets. While an inventory may be provided at the end of the divorce, it's important to review and verify this information, says Bryan Bibbo, an accredited investment fiduciary with advisory firm The JL Smith Group in Avon, Ohio. "Maybe your ex-spouse was the one handling the finances," Bibbo says. Take this time to familiarize yourself with your accounts and their tax implications. If you're confused, seek a financial professional for guidance. "Usually, when I'm dealing with divorced individuals, I'm doing a lot of education," Bibbo says. For instance, people may not understand how 401(k) payouts are taxed and whether it makes sense to request a lump sum or periodic payments from a retirement plan. Update Your Retirement Plan A retirement plan for a married couple should take into account the ages, goals and incomes of two people. When you become single, you need to consider whether the plan meets your needs. You may have to adjust your portfolio to better reflect your expected retirement date and personal risk tolerance. At the same time, update the beneficiaries on all your financial accounts. "The beneficiary designation takes precedence over your will," Smith-Beckert says. Unless you want your ex-spouse to receive your money, make sure his or her name is removed from all retirement funds, life insurance policies and other accounts. Start Contributing to Your Own Savings If you aren't already, now is the time to budget money for your future. That means creating an emergency fund that can cover three to six months of expenses, plus setting aside an adequate amount for retirement. "You want to have a written plan with your goals," Bibbo says. Every situation is unique; he recommends working with a financial planner to choose the right mix of retirement accounts and other savings vehicles to meet those goals. Adjust Your Lifestyle as Needed Perhaps the most difficult aspect of divorce is that it often requires people to make significant life changes going forward. "They don't realize how much divorce should impact their lifestyle," Yrizarry says. That may mean downsizing a house, forgoing vacations or changing jobs to pay bills and save enough for retirement. These changes can feel disheartening and overwhelming, but Yrizarry says surrounding yourself with positive people can help. Seeing changes as opportunities for improvements rather than setbacks can also make these adjustments more manageable. With the right attitude, Yrizarry says people can go through a divorce and come out of it stronger in the end. It is important to have health insurance for any individual and you can check your eligibility for group health insurance and explore best plans for you. Avoid high medical costs by using Medigap insurance to cover what Medicare doesn't. Medigap policies are extra insurance you can buy if you have Medicare. These plans are designed to help pay for some of the costs that are not covered by Medicare Part A and Medicare Part B. “Original Medicare leaves deductibles, copays and coinsurance behind for the beneficiary to pay for approved medical care and services,” says Danielle K. Roberts, co-founder of the insurance agency Boomer Benefits in Fort Worth, Texas. With a Medigap policy, you could potentially save thousands of dollars in medical bills. Here’s a look at how Medigap insurance works, what to consider when choosing a policy and the best time to enroll. What Is Medigap? A Medigap plan is a private insurance policy that can help you pay for some of the out-of-pocket costs associated with traditional Medicare and sometimes additional services. You must pay a premium for Medigap insurance in addition to your Medicare Part B premium and Medicare Part D prescription drug premium. Who Is Eligible for a Medigap Policy? To qualify for Medigap, you’ll need to have Medicare Part A and Medicare Part B. In general, individuals who are 65 and older are eligible for Medicare. If you have a Medicare Advantage plan, which is sometimes referred to as Medicare Part C, Medigap coverage is not available. What Medigap Covers Medigap plans are designed to supplement Medicare coverage. There are a variety of different Medigap plans, and each one is identified by a letter. You’ll find Medigap plans including A, B, D, G, K, L, M and N. Each plan is set up to provide a different level of supplemental coverage to Medicare. “Different plans cover different things,” says Lev Barinskiy, an insurance comparison website. To see the exact benefits for each plan, it can be helpful to look at a plan comparison website, such as the one provided at Medicare.gov. A key advantage of Medigap policies lies in the network of health providers you’ll be able to visit. “A Medigap policyholder can see any doctor who accepts Medicare,” says Shaun Greene, head of business operations at Health Pocket. Medigap plans only cover one person, so if you’re married, you and your spouse will need to purchase separate policies. The plans do not cover prescription drugs, hearing aids, vision services, dental care or long-term care. How to Select a Medigap Plan Medigap policies are standardized, and each insurance company must offer established benefits for each plan. This means a Medigap plan with a given letter will be the same anywhere you buy it. “The only difference is the price,” says John Hill, president of Gateway Retirement in Rock Hill, South Carolina. "In every state, there are many companies offering the same coverage at a different price." When choosing a plan, you’ll want to think about your budget and health factors. “If you are pretty healthy and don't go to the doctor often, Plan N may be a more cost-effective option than Plan G," Roberts says. "If you go to the doctor once a month, Plan G would likely be more cost-effective than Plan N." If you travel abroad frequently, you might opt for a plan that covers emergency services in other countries. Once you know which plan will be best for your needs, you can compare prices among insurance companies and also read company reviews. “Compare premiums, average rate increases and financial ratings of the carriers,” Roberts says. When to Enroll in Medigap You can sign up for a Medigap plan during the six months after you enroll in Medicare Part B. During that time, you can purchase any Medigap policy that is sold in your state. Even if you have health problems, it's guaranteed that you'll be accepted, and insurers won't charge you more based on your medical conditions during this initial enrollment period. After six months have passed, you will no longer have the guarantee that your application will be accepted. Insurance companies might not grant you a Medigap policy and group health insurance plans if you have certain health conditions. Even if you are able to buy a Medigap plan, it may cost more. While health care costs take many different shapes, your employees probably associate them most closely with the premiums they pay for their insurance. That said, they may not know everything they should about this piece of the puzzle.
Who sets the price? Where does the money go? Are health insurance premiums tax deductible? Here’s a look at some common questions your employees — and you — might have about your premiums. What Are Insurance Premiums? A premium is what you pay to keep an insurance policy active. In exchange for this fee, the insurance company agrees to cover some or all of your medical bills. Monthly premiums are the most common type, but you can also make larger payments less frequently, for instance once a quarter or once a year. The insurance company collects premiums from its customers to cover their future health care bills. Where, exactly, does the money go? The vast majority — roughly 82 cents of each dollar — goes toward medical expenses like prescription drugs, doctors’ services and hospital visits. The rest of the premium is split between taxes, operating expenses, claims administration, providing technology and the insurer’s profit. How Do Insurers Set Premiums? Insurance companies can’t just set any price they think consumers will pay; the government regulates what they charge. Under the Affordable Care Act (ACA), insurers can only base their premiums on the following five factors.
If an insurance company wants to increase premiums for the next year, they need to apply for approval from the insurance commissioner’s office and prove that either medical costs have gone up or their losses were higher than expected. Are Health Insurance Premiums Tax Deductible for Employers? Whatever you pay for employees’ health insurance should be tax deductible for your business. This applies whether you pay the entire premium or split the costs with employees. The share your business pays counts as a tax deduction. You can also deduct any contributions to employee accounts to help them cover medical expenses, like a health savings account or a health reimbursement account. If your organization uses any of these accounts, giving extra money to employees will earn you a tax break. For the time being, there is no limit on the employer tax deduction for insurance premiums. While the ACA originally set a penalty for employers paying for plans that were overly expensive known as the Cadillac tax, the government delayed this tax until at least 2022, according to Forbes. For now, whatever you pay for employee premiums is fully tax deductible. Are Health Insurance Premiums Tax Deductible for Employees? Whether premiums are tax deductible for your employees is a little less certain; it depends on how they get their coverage. If you provide a group plan at work and they use that, then their premium payments may be deductible. Intuit notes that payroll typically takes premiums out of employees’ pretax income, meaning the tax break already applies — your employees have less taxable income, which has the exact same effect as claiming a tax deduction when they file their return. It’s only if your payroll lists the staff’s premium payments as wages that employees should claim a tax deduction for their premiums later. That said, this setup is rare. Chances are, your payroll has taken care of the tax break for employees by taking premiums out of their pretax income. What About Employee Coverage Outside of Work? On the other hand, if your employees get their health insurance outside of work, it’s more difficult to qualify for a tax deduction. First, they need to itemize their deductions rather than claiming the standard deduction. Second, starting in 2019 they will only receive a tax deduction if all of their medical expenses, including premiums, exceed 10 percent of their adjusted gross income (AGI), according to Intuit. For example, if an employee has an AGI of $50,000, their medical costs must be more than $5,000 for anything to be deductible. The first $5,000 of costs will not be deductible — only expenses added on beyond that amount. If their total medical expenses including premiums are $5,500, they will only have a $500 deduction. Since employees might have trouble deducting premiums outside of work, this is one more reason setting up your own group plan can be beneficial. Even if you don’t cover the premiums yourself, your employees would benefit from the tax break. The government created a sizable tax deduction for Group health insurance premiums, especially for workplace plans. By taking advantage of all these benefits, you can make coverage a little more affordable for yourself and employees. When it comes to knowing what “runs in the family,” your employees probably have a scattered recollection — like remembering that Aunt Irene had some type of heart issue or that Grandpa Joe had lung cancer.
Beyond that, memories tend to get a little fuzzy. Aunt Irene’s heart issue might have been the result of a congenital defect she had since birth, for example, while Grandpa Joe may have been a lifelong smoker. Here’s why it’s important to get the details right. The Value of a Family Health History Without a written family health history that tracks these kinds of details, your employees might not have the information they need to make decisions about early screenings, genetic testing or lifestyle changes, according to the Mayo Clinic. That increases the chances that an employee will develop an unchecked chronic condition like cancer, heart disease or diabetes, something that will both change that worker’s entire life and impact your bottom line. According to the Centers for Disease Control and Prevention, each employee with a chronic condition costs employers about $1,685 annually in missed work. While simply keeping a detailed family health history won’t necessarily prevent chronic issues (or absenteeism), it can help employees take precautions to stay healthy, as well as serve as a great tool to bring to checkups and discuss with their doctor. But where do they begin — and how can you help? Start by pointing them to the U.S. Surgeon General’s My Family Health Portrait. The comprehensive form has a space to fill out medical issues for each member in the bloodline, which will give employees a composite view of their family history. Who — and What — Should Be Included? The more relatives included in a family history the better. The U.S. Surgeon General recommends starting with immediate family members: parents, siblings and children. Then move to grandparents, aunts, uncles, nephews, nieces and half-siblings. Less crucial are cousins, great uncles and great aunts — but if there’s a way to get their information, it can only help. Once equipped with the U.S. Surgeon General’s form and a list of relatives, your employees are ready to get started. Encourage them to think through medical history questions in advance to reveal potential problems that might be hereditary, such as:
Remind employees not to overlook issues relating to mental health or substance abuse. While they can be touchy topics, conditions like depression and alcoholism can increase the risk of other issues. Spotting Red Flags As employees dig into their family histories, they might notice patterns emerging, such as relatives who died at early ages or diseases that seem to run in the family. Some patterns may be simple coincidence, but others could pose a red flag worth mentioning to their doctor.
If you launch a family health history initiative, you’re bound to be asked, “Will this impact my premiums?” To ease concerns, reassure employees that this information is theirs and theirs alone, and that it won’t negatively impact their cost of care. Instead, convey that it’s a tool for them to manage their health in a more informed way. And that’s a whole lot better than an uncertain recollection of Grandpa Joe’s health. Get the all information about small business group health insurance by sending your questions in the comment section. When deciding what types of health plans to offer your employees, you have a lot of choices. Employees may already be familiar with traditional
Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) plans, but what about Exclusive Provider Organization (EPO) plans? Here’s what makes EPO insurance plans unique — and how to determine whether or not your employees could benefit from having them as an option. What Are EPO Insurance Plans? With an EPO plan, the insurer negotiates payment rates with a targeted network of physicians, usually in the local area. This may mean that they develop a network of physicians within a certain regional health system, for example. As the name implies, those who choose an EPO group health insurance plan must stay exclusively within their network for physicians, hospitals and specialists to have their care covered. How Do EPO Plans Compare to Other Plans? Two of the more common plans, HMOs and PPOs, have their own restrictions concerning out-of-network care. Both plan types contract with a network of providers and offer lower costs to subscribers who see doctors within that network. An HMO may require that you have a primary care physician who coordinates your care — and that you get referrals from that primary care doctor before seeing specialists. The plan doesn’t cover out-of-network care (though it does make occasional exceptions for emergencies). Meanwhile, a PPO doesn’t require patients get a referral to see specialists and often covers out-of-network care, just at a higher rate than in-network care. You can think of an EPO as a sort of hybrid between these two plan types, with one major difference that sets it apart from both — the size of the network. If you have an EPO vs. HMO or PPO plan, your network of physicians will be much smaller. Just like with an HMO, you won’t receive any coverage from your insurance if you go outside the network for care other than in an emergency. While you’ll also need preapproval for hospital stays and certain services, EPOs don’t require referrals to see specialists. What Are the Advantages of an EPO? As you and your employees look at ways to limit health care costs, an EPO can be an affordable alternative to traditional plans. The biggest advantage EPO patients see is financial — EPOs typically have lower monthly premiums that other plan types. The insurer also has more leverage to negotiate lower costs by bringing subscribers to physicians and facilities in the network, which means your employees will likely pay less out of pocket. EPO patients also have the option of choosing a high-deductible plan with even lower premiums. Some employees might discover that doctors they have established relationships with are outside of their EPO network — in which case they would have to choose a different plan type, see a different doctor or pay the full cost of visits to their preferred out-of-network doctor. However, because an EPO’s network is made up of a closely organized group of physicians, many people who choose an EPO plan may find superior coordination of care as doctors make recommendations based on a deep knowledge of both their patients’ situations and their colleagues’ specialties and skills. If you offer an EPO to your employees, be sure they fully understand what the plan means. Let them know:
With a strong understanding of an EPO compared to other plan types, your employees can make an informed decision about which plan offers them the best balance of coverage and cost savings. Between attracting top talent and keeping your employees in good health, making sure your workforce has solid insurance is vital to the success of your business — but it comes at a price. And when you add spouses into the mix, you might see those dollar signs multiply. Some employers have responded by barring spouses from joining employee health plans, but doing so can come at its own cost, potentially alienating married members of your workforce.
If you’re eyeing your health care expenses and considering a new strategy for spouses, introducing a spousal surcharge could offer a workable compromise, allowing employees to share coverage with their partners without blowing a hole in your company’s budget. Spousal Surcharge Trends According to Anthem’s Trends in Health Benefits report, most employers — both large and small — still offer health benefits to spouses and dependents. But a growing number are changing how they factor spouses into their benefits offerings. The 2018 International Foundation of Employee Benefits Survey found that, up from 16 percent in 2016, just over 20 percent of employers now either charge employees more to add a spouse to their health plan or exclude spouses entirely. For example, a spouse may be charged an extra fee, say $100 a month, if they want your company’s insurance. Some only charge or exclude spouses who have coverage available elsewhere, while others have blanket policies for all spouses. Reasons for Implementing a Spousal Surcharge Should your business create similar boundaries around spousal health insurance coverage? Some employers take these measures because of rising health care costs. They still want to offer good medical coverage, but the expense pushes them to decrease the number of spouses signing up for coverage if they have other viable options. There are other ways, of course, that employers can attempt to offset rising health care costs, such as offering high-deductible plans. But sometimes that’s not enough, and the most cost-effective option is still to reduce — or at least change — spousal coverage. In those cases, it might be a good option to implement surcharges. Sometimes the charges are necessary in order to to keep premium increases as low as possible. How to Communicate Changes If you decide to implement boundaries to spousal benefits, you’ll need to communicate these changes clearly to your staff without alarming them unnecessarily. The best approach is just to be transparent and honest about why you’re making this change. Explain that you want to offer good insurance while keeping premiums low, and that you must implement the surcharge in order to continue offering affordable insurance to those who need it the most. While you should communicate this first in writing, offer employees a chance to meet one-on-one to ask questions. Make sure to communicate the change far enough in advance that each of your staff members has time to research their spouse’s insurance options. In some cases, it might be helpful to hire a third-party company to run a verification process for everyone currently on your plan. To keep morale up and express goodwill, consider including exceptions when you implement the surcharges rather than charging all spouses across the board. Exceptions can include spouses who don’t have access to insurance anywhere else, spouses eligible for Medicare and spouses whose employer’s plan doesn’t meet specific standards. Keeping health care costs down isn’t always easy for employers or employees. When you seem to be stuck between cutting spouses out of your benefits offerings and putting your business’s bottom line at risk, the middle ground may be the best place to land. When it comes to health insurance for small business owners, it’s important to do your homework. They could be a good option for certain businesses and self-employed individuals, but be sure to consider both the plans’ advantages and disadvantages before making a decision. Not long ago, offering domestic partnership health benefits was a way for employers to equalize benefits for employees in same- and opposite-sex partnerships. But landmark legislation and new trends have changed things.
After the Supreme Court’s 2015 Obergefell v. Hodges ruling legalized same-sex marriage nationwide, the percentage of employers offering health benefits to domestic partners declined. If a spouse is now a spouse, the thinking goes, there’s no longer a need to offer specific benefits to ensure that employees with same-sex partners have access to the same level of benefits as employees with opposite-sex partners. But employers are wise to think through all of the considerations before dismissing benefits like domestic partner health insurance. Offering benefits to same- and opposite-sex domestic partners allows your organization to cast a wider, more inclusive net for attracting and retaining a highly skilled workforce, promoting diversity and setting your organization apart from the competition. If you’re deciding whether to add domestic partner benefits to your company’s offerings, here are three important factors to keep in mind. 1. Your State May Have Its Own Requirements for Employers There’s no federal law requiring employers to offer benefits to spouses or domestic partners. However, most offer benefits to spouses anyway. Past the federal level, some states have stepped in with their own stipulations, requiring state-regulated health plans to extend benefits to domestic partners if benefits are offered to spouses. What constitutes a domestic partnership? Rules on this vary from state to state, too, but in states or cities that don’t have written definitions or official domestic partner registries, employers that offer domestic partner benefits should clearly define what constitutes a domestic partnership. This helps ensure that there’s no ambiguity in terms of who is eligible for coverage and that coverage is offered consistently to all eligible employees. 2. Your Employees Will Need to Keep Up With IRS Regulations Health insurance benefits are generally not subject to taxes, but that’s often not the case when it comes to coverage for domestic partners. Unless the domestic partner is actually the employee’s tax dependent, the fair market value of the domestic partner’s coverage is taxable and has to be added on the employee’s W-2 as part of their total taxable compensation. In addition, unless the domestic partner is the employee’s tax dependent, the domestic partner’s medical expenses cannot be covered using the employee’s health savings account (HSA), health reimbursement arrangement (HRA) or flexible spending account (FSA). That’s according to IRS rules, which allow those accounts to be used for spouses and tax dependents but not for domestic partners. So if an employer offers a tax-advantaged account in conjunction with a health plan and allows domestic partners to be covered under the health plan, it’s important to help employees understand how the funds in the tax-advantaged account can and cannot be used. 3. Tracking the Trends Could Give You a Competitive Edge Benefits packages are more than just a nice add-on for employees — for many people, they’re as important (or even more important) than the salary they’ll make at a company. In a recent poll, 80 percent of people said they’d take a better benefits package over an improved salary. The high stakes surrounding benefits encourage most employers to go beyond the bare minimum when it comes to spouses: Even though the Affordable Care Act doesn’t have any requirements concerning spousal or domestic partner coverage, most employers that offer health coverage do extend benefits to the spouses of eligible employees. Less than half offer domestic partner benefits. So to have a competitive benefits package, it may be wise to consider offering benefits to domestic partners. The cost to do so is typically minimal, as uptake of domestic partner benefits tends to be very low on the whole. There’s no clear-cut answer in terms of whether an organization should offer health benefits to domestic partners, and employers considering this benefit should discuss the tax implications with their accountant. But having the coverage available as an option could end up being the factor that helps an organization recruit a diverse staff of top talent, regardless of their domestic situation. Your Chip eligibility is based on your household size and income and determined by the government and you can apply any time of year. When Form 1095-A arrives in your employees’ mailboxes, you might find them turning to you for help in understanding what the form is all about and what they need to do with it. That’s particularly true if your small business offers a qualified small employer health reimbursement arrangement (QSEHRA) and you’re helping employees pay for the health insurance plans that they’re purchasing for themselves.
If you’re facing questions and don’t have the answers to them, here’s what you need to know to cover the basics. What Is a 1095-A, and Why Did Your Employee Get One? If your employee receives this form, it means they had health insurance coverage via the health insurance exchange, also known as the Marketplace, for at least one month of the previous year. The forms come from the health insurance exchange — in most states, the exchange is HealthCare. gov, although 11 states and Washington, D.C., run their own exchanges and send out their own forms. The form is sent to the person who enrolled in the plan through the exchange, and the IRS gets its own copy. This form is essentially a place to collect information. It shows the name of the person who enrolled in the exchange plan as well as any covered family members. For each month that the plan was in effect, the form shows the total premium for the plan and the amount of premium tax credit that was paid on the enrollee’s behalf (or, in other words, sent directly to the insurance company to offset the employee’s premiums). The form also says how much the second lowest cost silver plan (SLCSP) would have cost if the person had selected that plan. If that’s actually the plan in which the person was enrolled, the premium for their plan and the premium for the SLCSP will be the same. What Does Your Employee Need to Do With the Form? If your employee benefited from a premium tax credit, or if they paid full price for their plan but want to claim the tax credit on their tax return, the information on this form is vital. There’s another form that then comes into play — Form 8962. Just like with other forms your employees might receive, like W-2s and various 1099s, the employee will keep the form they get from the exchange for their own records. But they’ll use the information on it to complete Form 8962, which they’ll file with their tax return. If your employee paid full price for the plan they purchased in the exchange and they’re not eligible to claim the premium tax credit on their tax return, they don’t need to complete Form 8962. In that case, they don’t have to do anything with the information on their 1095-A. Assuming they had health coverage for the full year, they can check the box on their 1040 that says “full year health care coverage or exempt” and carry on with the rest of their return. Have employees who are wondering whether they’re eligible for a premium tax credit to offset the cost of the plan they purchased in the exchange? Point them toward their household’s modified adjusted gross income (MAGI) — but make sure they’re using Affordable Care Act-specific calculations, since this isn’t the same as normal MAGI. To be eligible, their MAGI can’t exceed 400 percent of the prior year’s poverty level. For example, for 2018 coverage, they’d use 2017’s poverty level for comparison. They also can’t have had access to an employer-sponsored plan that was affordable and provided minimum value. Assuming a premium tax credit was paid on the employee’s behalf — or they paid full price and wish to claim the premium tax credit on their return — they’ll complete Form 8962 using the information provided on their 1095-A. Premium tax credits that are paid throughout the year on behalf of exchange enrollees are calculated in advance based on the enrollee’s projected MAGI. However, the tax credit amount then has to be reconciled based on their actual MAGI, as determined by their tax return. The premium tax credit is the amount necessary to keep the SLCSP at a level that’s considered affordable based on someone’s MAGI. Regardless of which plan a person actually buys, the premium tax credit is based on the price of the SLCSP — meaning premium tax credit amounts differ between enrollees, since the cost of the SLCSP varies based on age and location. If you offered a QSEHRA and your employees used those funds to buy coverage in the exchange, they’ll receive 1095-A forms just like any other exchange enrollee. But the IRS has specific rules for premium tax credits when the person is also receiving a QSEHRA benefit, and QSEHRA benefits’ impact on premium tax credits depends on each person’s specific situation. The details are clarified in this set of IRS FAQs. What About Forms 1095-B and 1095-C? When your employees ask about Form 1095-A, you — and they — might wonder how these forms differ from 1095-B and 1095-C. All three forms were created as part of the implementation process for the Affordable Care Act, and they’re all designed to document the health coverage that a person had during the year. In the case of a 1095-C, it also shows the health coverage offered to the employee, even if they never ended up taking it. Form 1095-B is sent out by insurance plans that cover people who didn’t buy their plan through the health insurance exchange. This includes government entities like Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and commercial plans in the individual and small-group market. Form 1095-C arrives via applicable large employers (ALEs), indicating the coverage that was offered to each employee and whether the employee enrolled in the plan. All of these forms are sent to both the plan enrollee and the IRS. In some cases, an employee will receive more than one of these forms for a given year — for example, a person would receive all three forms if they were employed by an ALE from January through June (1095-C), covered under an exchange plan from July through September (A) and then covered under a small employer’s group plan from October through the end of the year (B). Tax season can easily become a puzzling flurry of forms, and eventually they all start to sound the same. Save your employees from confusion by ensuring they have the know-how to keep all of their papers straight. A lower premium of chip health insurance pa is not a benefit for patients with a chronic or life-threatening illness that requires a great deal of medical oversight, treatment and routine prescription medications. As employees approach the end of their careers, it’s likely that most of them will have questions about retirement health insurance. The specifics will vary from one person to another, particularly in terms of Medicare eligibility, which begins at the age of 65 for most people — though about 16 percent of the 60 million Americans with Medicare are younger and eligible due to a disability. An employee who’s retiring at 55 will probably have different coverage needs and questions from an employee retiring at 65 or older.
Here’s a look at some of the most common concerns and questions people have when it comes to retirement health insurance. Help Your Employees Know Their Coverage Options What coverage will your employees have after they transition to retirement? Will they need to purchase their own? Are they eligible for Medicare? Does your employer-sponsored plan extend to retirees? Employer-Sponsored Group Plans If an employee retires prior to age 65 and your group plan offers retiree coverage, that might be all the coverage they need until they turn 65 and transition to Medicare. At that point, the employer-sponsored retiree plan will become secondary, and Medicare will be their primary coverage. For employees who are still working after they hit 65, Medicare can be primary or secondary to the employer-sponsored plan, depending on the size of the employer; once that employee retires, Medicare becomes their primary coverage even if they retain retiree coverage through your group’s plan. Individual Plans If your group plan does not extend coverage to retirees, employees who retire before age 65 will need to obtain their own coverage from the individual insurance market unless they have access to coverage under their spouse’s plan. For plans purchased in the state small business group health insurance exchange, there are premium subsidies available to offset the cost of coverage as long as the enrollee’s household income doesn’t exceed 400 percent of the poverty level. For lower-income enrollees, there are also cost-sharing reductions that help to lower the out-of-pocket costs on silver plans. There’s an annual open enrollment period each fall for health coverage purchased in the individual market, but an employee who retires and loses their employer-sponsored coverage will have access to a special enrollment period during which they can sign up for a new plan mid-year. Medicaid Medicaid is also a coverage option that might be available to some employees who retire prior to age 65. The majority of states have expanded Medicaid under the Affordable Care Act, making coverage available to adults up to age 64 whose household income doesn’t exceed 138 percent of the poverty level. Eligibility for expanded Medicaid doesn’t depend on assets; only income is considered — but enrollees should be aware of how Medicaid estate recovery works in their state. Medicare For employees who transition to retirement at age 65 or older, Medicare will likely become their primary retirement health insurance. Medicare has several different components and coverage options.
Help Retirees Avoid Penalties As of 2019, there is no longer a federal penalty for being uninsured — although Massachusetts, New Jersey and Washington, D.C., have their own state-based penalties for people who go without health coverage, and Vermont will join them in 2020. But there are some penalties that apply specifically to Medicare enrollees if they delay their enrollment without having creditable coverage from an employer-sponsored plan. This is important for retiring enrollees to understand if they’re eligible for Medicare — or will be soon — and are considering initially skipping some parts of Medicare coverage. Medicare Part A is premium-free for most enrollees, but Medicare parts B and D have premiums, and healthy people sometimes wonder if they’d be better off delaying their enrollment in those parts until they need health care. There are annual enrollment windows for both parts, so it’s possible to delay enrollment in Part B and Part D and then sign up later. But unless an employee has coverage from an employer- or union-sponsored plan during the time that they delay their enrollment in parts B or D, they’ll end up with a penalty if and when they do eventually enroll. Here’s how the penalties are calculated:
So, if an employee will have employer-sponsored retiree coverage — either their own or a spouse’s — then they may be able to delay enrollment in Part B and D. But if not, enrolling in both parts upon turning 65 is generally the best approach. This retirement planning guide from the federal government is helpful for employees who are working through these decisions as they prepare to retire. Although there isn’t technically a penalty associated with delayed enrollment in Medigap plans, it’s important to understand that Medigap insurers in most states can use medical underwriting to determine eligibility for Medigap plans if a person applies for coverage after their initial six-month open enrollment window ends. So, a person with preexisting conditions might be unable to obtain Medigap coverage (or have to pay more for it) if they delay their enrollment. As value-based approaches to care have gained traction, health care staffing has become more efficient. In the last few years, a trend of medical upskilling means that nurse practitioners and physician assistants have taken on tasks that doctors once performed, allowing physicians to focus on the duties for which they alone are qualified. It’s a more efficient use of resources, and it’s more professionally satisfying for everyone involved. Now, medical assistants (MA) are taking on some of the tasks formerly performed by nurses. With physician shortages growing, all of this adds critical capacity to the health care team.
This “task shifting” moves routine tasks to lower-skilled professionals, according to the Harvard Business Review. In health care, this is often termed “working at the top of one’s license.” The challenge is to ensure that the person is qualified for the task being assigned. That’s where upskilling the workforce comes in. Medical upskilling is not a completely new concept, but it may be more important now than ever before. This is the year health care organizations — incumbents and disruptors alike — will identify which employees need to be upskilled, consulting firm PricewaterhouseCoopers (PwC) predicts. This will occur “from the back office to the front lines and all the way up to the C-suite.” As with almost every business today, technology is driving the need for new training. Artificial intelligence, robotics and other technologies will create value by improving telehealth and reducing “transactional tasks,” according to PwC. But it won’t happen without training. In fact, 45% of provider executives surveyed by PwC said the capabilities of their workers are a “significant barrier to organizational change.” MAs on the Front Lines Such concerns are one reason MAs are being trained to perform some of the tasks delivered by nurses, including new roles in health IT and patient engagement — especially coaching. Training programs abound, from community colleges to nonprofits focused on cultivating primary care teams. Patients — your employees — are more likely to see this happen on the front lines. Allowing MAs to take on tasks previously performed by registered nurses (RNs) obviously saves money, but it also means that patients aren’t rushed through health coaching. The physician or RN may not have the time to sit down with patients to provide adequate coaching and support — and if they did, it would be considerably costlier. Addressing Social Determinants of Health It’s here that community health workers can play a role as well. Social determinants of health, from income and education to housing and access to food, play a significant role in health care costs and outcomes. The American College of Physicians estimates that these health disparities result in $309 billion in economic losses each year. Community health workers (CHWs), a relatively new addition to the health care team, are helping provider organizations address these issues early. CHWs often don’t have a medical background, but they frequently do have roots in the community. They may go shopping with a patient to help them select healthier food, or connect patients with transportation or social services. A physician can’t spend as many hours talking about nutrition, transportation or unpaid electric bills. The Centers for Disease Control and Prevention offers a wealth of resources to train CHWs. With the right medical upskilling, they can specialize in a specific area, such as maternal health or stroke prevention. Better Skills, Better Connections, Greater Value Home health aides provide value similar to community health workers. According to Health Affairs, if high-quality care can be delivered in the home, it keeps costs down, makes life easier for patients who may have trouble getting to a physician and keeps patients out of the hospital. For example, Health Affairs reports that training 6,000 home care workers in California contributed to a 41% decline in the rate of repeat emergency department (ED) visits and a 43% decline in the rate of rehospitalization. The result: savings of up to $12,000 per patient. Similarly, home health workers in New York City received 200 hours of training in chronic diseases, among other things. After the training, they were designated Care Connections Senior Aides. They then made home visits to support the on-the-job upskilling of hundreds of other home-care workers. The bottom line? An 8% reduction in the rate of ED visits, as well as improved job satisfaction among home care workers. Don’t let the term “medical upskilling” mislead you. Yes, health workers are learning new skills, but health systems are also capitalizing on these workers’ existing competencies — and their relationships with patients and caregivers. Medication Management on the Team Finally, let’s look at pharmacists. Pharmacists can take on an array of tasks often left to physicians or nurses, including diabetes, hypertension and depression management, as well as new medications and dosage change. They can also review “polypharmacy” issues, which arise when a patient’s numerous drugs prescribed by multiple clinicians may interact badly with each other. And pharmacists can help patients gradually come off opiates. The model can work in a variety of ways, from onboarding a clinical pharmacist as part of the practice staff to collaborating with a community pharmacist to working more closely with pharmacists within a particular health system. Clinical pharmacists may need medical upskilling and certification to provide what’s called comprehensive medication management (CMM). Some pharmacy schools offer CMM-based certification programs for pharmacists. CMM often targets the most complex — and most costly — cases. And again, the pharmacists can spend more time with patients; in this case, they’re better-suited to talk about medications. As with the other examples, CMM reduces physician workload. Moreover, it has resulted in demonstrated reductions in ED and hospital admissions. As CMM shows, medical upskilling isn’t limited to lower-paid health workers. Finding the best individuals for a particular set of tasks is simply a more efficient way to work. It controls costs, supports better outcomes and improves both patient and professional satisfaction. Check the chip guidelines carefully before exploring the CHIP programs, this will help you to find best plans for your child. Long-ago miscalculations by insurers have led to policyholders’ facing steep premium increases. But there are ways to keep costs down.
Karen Herzog, a retired high school teacher, bought a long-term care insurance policy 12 years ago because she didn’t want to burden her only daughter if someday she could no longer care for herself. Then a letter arrived in May that complicated her well-laid plan. Her monthly costs would double within two years, reaching nearly $550 — a significant portion of her fixed income. “Many of us will be forced to drop this policy,” said Ms. Herzog, 73, of Ocala, Fla. “This was supposed to be my parachute.” Ms. Herzog reluctantly started paying a higher monthly premium while she weighed her options. But her insurer, Genworth — the nation’s largest provider, with 1.1 million long-term care policyholders — said she might face another rate increase in eight years, when she’s 81. Long-term care insurers have been imposing significant rate increases for nearly a decade, and the problem has the attention of the regulators in each state, who must approve premium increases. The regulators’ national group created a task force earlier this year to address the issue, although the effort probably won’t provide much relief to people like Ms. Herzog. “There is an inherent tension as a regulator,” said Scott A. White, the Virginia insurance commissioner and chairman of the task force. “You want to protect consumers against rate hikes, but you also want to make sure the carriers remain solvent and are able to pay claims into the future.” Long-term care insurance can fill an important niche for many retirees. It covers what Medicare generally does not: long nursing home stays, health care aides at home, adult day care and parts of assisted living. Wealthier individuals can often pay for these costs on their own, while those with little money usually lean on Medicaid. The most common benefits — which are generally paid in the form of a daily benefit, say $150 — pay for care at home, according to Bonnie Burns, training and policy specialist at California Health Advocates, a consumer advocacy group. Those who bought policies had good reason: About half of Americans turning 65 will develop a disability serious enough to require long-term care services, according to a 2016 federal report. Most will need assistance for less than two years, but about one in seven will need it for more than five years. Why are premiums swelling so much? There were several factors, but two of the more serious problems involved the predictions insurers made roughly two decades ago. Not only did they underestimate how long policyholders would live, they overestimated how many people would drop their policies, which meant insurers would not have to pay claims. The financial pressures have left only about a dozen companies selling new coverage, down from more than 100 in the market’s heyday. For many existing policies, they’re seeking rate increases. But not all states have granted them, which Mr. White said meant policyholders in certain states are subsidizing those in others. The task force is hoping to address the unpredictability and lumpiness of these pricing shocks. But that’s little comfort for policyholders who have already received notices for price increases. Regulators approved higher premiums on at least 84,000 policyholders at Genworth alone during the second quarter, according to a sampling of filings recently analyzed by S&P Global Market Intelligence. Deciding whether to renew one of these policies can feel like an impossible calculation, and there’s a lot to consider. Insurers generally provide policyholders with several options in between accepting a full rate increase and canceling the policy. “Not every company is doing the same thing in the same way and when they present these options to consumers, they are totally confused by them,” Ms. Burns said. “But they can reduce the effect of the rate increase.” As hard as it may be to accept, it could make sense to pay the higher rate if you can still afford it. Buying a similar policy would likely cost far more now, and the same level of coverage is often not available (if you’re even still insurable). “It’s technically still a deal relative to what coverage costs today,” said Michael Kitces, director of wealth management at Pinnacle Advisory and publisher of the Nerd’s Eye View blog. But many people won’t be able to absorb the full increase, so cutting benefits may be the next best option. That can include reducing the period for which the policy pays benefits, the daily amount of the benefit, and the inflation rate at which the daily benefit grows. Mr. Kitces suggests considering the cuts in a certain order. If your policy pays benefits for more than five years, consider shaving that back first, since few people need it that long, he said. If you still want to reduce your premium, your choice could depend on your age. If you’re in your 70s or 80s — or have held the policy for a while and have already seen benefits grow — consider reducing the inflation rate. If you’re in your 50s or 60s, you might be better off reducing your daily benefit rate, particularly if that amount is higher than the typical cost of care in your area, and letting it grow with inflation. Your insurer might be able to offer other solutions if you ask. “You can call and sometimes they will be flexible with giving you other options that were not in the package sent in the mail,” said Jesse Slome, executive director of the American Association for Long-Term Care Insurance, a trade group. If you simply cannot afford to pay any longer, you might not have to walk away with nothing. You may be able to convert your old policy to a new one that is worth the amount of premiums you already paid. Ms. Burns, from the advocacy organization, said she worried that some insurers could steer people to this option because it reduces their liability. That’s why she encourages people to seek help when re-evaluating your policy. She suggests contacting a counselor through your state’s health insurance assistance program. The lingering effects of the industry’s early miscalculations have made some policyholders — including Ms. Herzog — worried about their insurers’ long-term viability. (Genworth, which agreed in 2016 to sell itself to the investment firm China Oceanwide, said carriers were required to set aside a certain level of assets to support their ability to pay claims.) “We’ve had more companies get out of business than are in it, and they are still paying legitimate claims,” said Brian Gordon, president of MAGA Long Term Care Planning, “We are still very comfortable even though some of them are not writing new policies.” Insurance company failures are rare, but the long-term care world does have a recent example: Penn Treaty was liquidated in 2017. But experts point out that Penn didn’t have other lines of business to offset its problems, like many other providers do. Should a long-term care insurer end up like Penn Treaty, state guaranty associations generally provide at least $300,000 in benefits for policyholders through a safety net that is funded in part by other insurers, according to the National Organization of Life & Health Insurance Guaranty Associations. But for the majority of policyholders, the biggest worry will remain price increases. The regulators’ task force may work to even out the differences in increases experienced by policyholders across different states, but that could mean higher costs for people who have thus far been spared. “Long-term care is a problem for the whole U.S. and for many seniors who paid into these policies,” Ms. Herzog said. “I live alone. Who is going to take care of me? Your Chip eligibility is based on your household size and income and determined by the government and you can apply any time of year. There’s surprisingly little rigorous research on programs like Medicaid and Medicare. A few years ago, Oregon found itself in a position that you’d think would be more commonplace: It was able to evaluate the impact of a substantial, expensive health policy change. In a collaboration by the state and researchers, Medicaid coverage was randomly extended to some low-income adults and not to others, and researchers have been tracking the consequences ever since. Rigorous evaluations of health policy are exceedingly rare. The United States spends a tremendous amount on health care, but very little of it learning which health policies work and which don’t. In fact, less than 0.1 percent of total spending on American health care is devoted to evaluating them. As a result, there’s a lot less solid evidence to inform decision making on programs like Medicaid or Medicare than you might think. There is a similar uncertainty over common medical treatments: Hundreds of thousands of clinical trials are conducted each year, yet half of treatments used in clinical practice lack sound evidence. As bad as this sounds, the evidence base for health policy is even thinner. A law signed this year, the Foundations for Evidence-Based Policymaking Act, could help. Intended to improve the collection of data about government programs, and the ability to access it, the law also requires agencies to develop a way to evaluate these and other programs. Evaluations of health policy have rarely been as rigorous as clinical trials. A small minority of policy evaluations have had randomized designs, which are widely regarded as the gold standard of evidence and commonplace in clinical science. Nearly 80 percent of studies of medical interventions are randomized trials, but only 18 percent of studies of U.S. health care policy are. Because randomized health policy studies are so rare, those that do occur are influential. The RAND health insurance experiment is the classic example. This 1970s experiment randomly assigned families to different levels of health care cost sharing. It found that those responsible for more of the cost of care use far less of it — and with no short-term adverse health outcomes (except for the poorest families with relatively sicker members). The results have influenced health care insurance design for decades. In large part, you can thank (or curse) this randomized study and its interpretation for your health care deductible and co-payments. More recently, the study based on random access to Oregon’s Medicaid program has been influential in the debate over Medicaid expansion. A state lottery — which provided the opportunity for Medicaid coverage to low-income adults — offered rich material for researchers. The findings that Medicaid increases access to care, diminishes financial hardship and reduces rates of depression have provided justification for program expansion. But its lack of statistically significant findings of improvements in other health outcomes has been pointed to by some as evidence that Medicaid is ineffective. Although there are other examples of randomized studies in health policy, the vast majority have far less rigorous designs. Some of them are sponsored by the Center for Medicare and Medicaid Innovation, created by the Affordable Care Act. It has spent about $1 billion a year on dozens of programs that pay for Medicare and Medicaid services in new ways intended to enhance quality and reduce spending. Most of the innovation center’s pilots lack randomized designs, for which it has been criticized. Also potentially problematic: Most of its programs rely on voluntary participation by health care organizations. There might be crucial differences between those that opt in and those that don’t. Mandatory participation poses its own set of challenges. “If you force a hospital to join a new program, but not its competitor down the street, you might put the hospital at an unfair financial disadvantage,” said Nicholas Bagley, a University of Michigan health law professor. Also, testing voluntary participation makes sense if the program is never intended to be mandatory in the first place. In considering a mandatory program, you also have to be mindful of politics. “There will always be winners and losers,” said Darshak Sanghavi, a former senior official for the Center for Medicare and Medicaid Innovation. “If losers are forced to remain in a program, that could cause a political backlash that might blow the whole thing up.” Randomization can also be challenging; it can be complex and hard to maintain. “A program with desirable features for evaluation, like randomization, that falls apart could be less valuable than one that was designed more realistically from the start,” he said. Problems can also plague rollouts that are voluntary and not randomized. Programs showing promise suffer from diminishing participation as health care organizations drop out. The innovation center’s pioneer accountable care organization program offered health care organizations the opportunity to earn bonuses in exchange for accepting some financial risk, provided they meet a set of quality targets. It started with 32 participants in 2012. Although studies showed it reduced spending and at least maintained, if not improved, quality, only nine remained by 2016 when the program ended. Some of the largest innovation center programs — involving thousands of providers — bundle payments across services for some common treatments (like knee and hip replacements) instead of paying separately for each one. More efficient providers that can deliver the care for less than that price can keep some of the difference as profit. Those that can’t lose money. Of six bundled payment programs, only one included random assignment. Beginning in April 2016, Medicare randomly assigned 75 markets to be subject to bundled payments for knee and hip replacements, and 121 markets to business as usual. But the innovation center didn’t maintain the design, announcing in November 2017 that hospitals could leave it. This will greatly limit what can be learned from the program. Just as in clinical care, there are examples of incorrect thinking based on low-rigor studies that more rigorous ones later overturn. For example, many low-quality studies suggest that wellness programs reduce employers’ health care costs as they improve health outcomes. But when the programs have been subject to randomized controlled trials, none of these findings hold up. Hospital cost shifting — the idea that shortfalls from Medicare or Medicaid cause hospitals to charge higher prices to private insurers — can also seem commonplace from studies without rigorous designs. But when subject to more careful evaluation, the phenomenon is almost never observed. An apparent preference for ignorance is not unique to health care. Policies across governments at all levels are routinely put in without plans to find out if they work — or how to unwind them if they don’t, or how to build on them if they do. A 2017 Government Accountability Office report found that the vast majority of managers of federal programs were not aware of any recent evaluation of the programs they oversaw. In most cases, none had been done. In others, none had been done in the past five years. It’s hard to rid ourselves of ideas that are little more than wishful thinking or to end policies that don’t work. The first step would be to do more rigorous policy evaluations. The next would be to heed them. Check the chip guidelines carefully before exploring the CHIP programs, this will help you to find best plans for your child. |
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January 2020
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