In 2013, employers will have more and increasingly complex decisions to make regarding the Affordable Care Act – healthcare legislation much better known as Obamacare.
Among the specific issues employers will encounter as a result of Affordable Care Act are available coverage solutions – including health benefits financing and network solutions such as defined-contribution models and select-network plans that can help employers control costs while offering high-quality coverage.
“Larger group customers may need substantially more lead time for making health coverage decisions for 2014,” said Vik Mangalmurti, Highmark’s vice president of health care reform.
In terms of defined contribution models, companies will now have the option for choosing their own.
According to Janice Maszle, who works in Highmark Inc.’s corporate communications and public relations department, companies want a model “that gives employers the ability to set a monthly fixed dollar allowance for employees or Medicare retirees who use this money to go to an online insurance store to select from a menu of health plan and ancillary product options.”
Steven Nelson, senior vice president of health services strategy, product and marketing at Highmark, said: “Many employers tell us that they want predictability in their health care costs, and their employees and retirees tell us that they want coverage and choice.
“The defined contribution platform offers both solutions at a time when employer and retiree health and ancillary coverage are at a crucial decision point in regard to health care reform: can we afford to offer it any longer?”
Highmark offers a service dubbed “myBenefits.” It’s an example of a program designed for small business customers, or those covering 10 to 99 individuals. The service includes four predefined sets of its most popular medical plans, each with five medical options, including HSA-qualified and HRA options.
In addition, employers have the ability to include three dental and two vision plans as well as critical illness and accident coverage.
According to the U.S. Treasury, Health Spending Accounts were created in 2003 so that individuals covered by high-deductible health plans could receive tax-preferred treatment of money saved for medical expenses.
Generally, an adult who is covered by a high-deductible health plan (and has no other first-dollar coverage – an insurance policy feature that provides full coverage for the entire value of a loss without a deductible) may establish an HSA.
Nationally, nearly 15 percent of all companies are converting to HSAs.
The Lehigh Valley number, however, is only about two to three percent, Tony DaRe, founder of Bethlehem-based BSI Corporate Benefits, told Lehigh Valley Business.
“Businesses in 17 other states have been writing plans for some time and they work,” he explained.
An example of a select-network plan is Highmark’s product named Community Blue which features a provider network that consists of more than 50 hospitals and 7,600 primary care physicians and specialists.
High performance, select network products are becoming more common locally and nationwide. According to the 2011 Kaiser Employer Health Benefits Survey, the number of employers offering select-network benefit designs nationally has increased from 16 percent in 2010 to 20 percent in 2011.
“Community Blue will give members the ability to maintain a broad choice of doctors and hospitals, while achieving high-quality, lower-cost health care,” said Deborah Rice, division president, health services and executive vice president with Highmark.
“While the cost for group customers will depend on a variety of factors, we anticipate that Community Blue products can be up to 25 percent less than current products with a broader network.”
Also debuting in 2013 is the “health insurance marketplace” – a place where individuals and small businesses can buy health benefit plans in a competitive setting. Open enrollment in the plans represented in the marketplace begins Oct. 1.
Changes outlined by the act also include expanding the number of Americans receiving preventive care by providing new funding to state Medicaid programs that choose to cover preventive services for patients at little or no cost.
The 2013 ACA changes also include establishing expanded authority to bundle payments through a national pilot program where hospitals, doctors and other providers work together to improve the coordination and quality of patient care.
Under payment “bundling,” hospitals, doctors, and providers are paid a flat rate for an episode of care rather than the current fragmented system where each service or test or bundles of items or services are billed separately to Medicare.
For example, instead of a surgical procedure generating multiple claims from multiple providers, the entire team is compensated with a bundled payment that provides incentives to deliver health care services more efficiently while maintaining or improving quality of care. It aligns the incentives of those delivering care, and savings are shared between providers and the Medicare program.