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By gulfsouthb32553561, Oct 15 2018 06:54PM

As Dave Chase writes in “The CEO’s Guide to Restoring the American Dream,” ”Step one [in fixing the health care system] is to accept that you run a health care business. It’s likely your second largest operating expense after payroll. Just ask your CFO. You’d probably prefer not to run this business, but it’s there, whether you like it or not.”

Yet even if they acknowledge this truth, most CEOs, CFOs and COOs are too consumed with running their businesses to take step two; that is, to spend the time and emotional energy required to learn about the specific ways in which health care in America is broken. As a result, their health care strategy remains the same year after year. They continue to accept the increase (typically around 9 percent) in insurance premiums that their benefits broker negotiates for them and continue to transfer health care costs to their employees by raising deductibles.

This strategy isn’t sustainable. According to a survey from Milliman, the cost of health care for a typical family of four covered by an average employer-sponsored preferred provider organization (PPO) plan in 2017 was $26,944.

Further, the survey notes, of the $26,944 spent by a family of four, $11,685 is paid by the employee—a combination of $7,151 in payroll deductions for the premium and $4,534 in out-of-pocket costs. That comes to 43 percent of expenses paid by the employee compared to 57 percent by the employer.

Why is health insurance so expensive? Because health care is so expensive. But why is health care so expensive? Contrary to popular opinion, it’s not because the unit cost of health care has increased. In Chase’s book, Jeanne Pinder says, “cash or negotiated self-pay prices for many procedures vary little from year to year.” Health care is expensive because third-party insurance carriers have kept the true cost of health care opaque so that consumers can’t comparison shop. And it’s expensive because there’s an epidemic of unnecessary health care overutilization.

For example, in 2010, $29.7 billion was spent in hospitalizing patients for potentially preventable complications of conditions like diabetes, congestive heart failure, and osteoarthritis. These are only three conditions among many that primary care doctors are expert at managing. So why the failure to manage them effectively in an outpatient setting? Because patients lack timely access to primary care. And even once they gain that access, their primary care physicians have too little time to spend with them. According to Merritt-Hawkins, in 2017, the average length of time primary care appointments last is only 15.7 minutes.

Unlike fee-for-service primary care, direct primary care offers 24/7 access to and a surplus of time with primary care physicians—often an hour or more at each visit. As a result, studies show that patients enrolled in DPC practices have 59 percent fewer ER visits, spend 30 percent fewer days admitted to the hospital, are referred to specialists 62 percent less often, have 65 percent fewer radiology exams, and 80 percent fewer surgeries. Because of this, some employers who self-insure—and who are therefore responsible for paying their employees’ medical bills out of their own pockets—have saved as much as $260 per member per month on health care expenses.

In sum, companies that commit to spending more money upfront on primary care (which represents perhaps 2 percent to 5 percent of a company’s total health care spend) can expect to spend far less on downstream care like ER visits, specialty visits, surgeries, and x-rays, which represent perhaps 40 percent to 60 percent of a company’s total health care spend.

Yet the ability to rein in health care costs isn’t the only thing DPC offers employers; it also offers them a way to win the talent war. According to McKinsey senior partners Scott Keller and Mary Meaney: “A recent study of more than 600,000 researchers, entertainers, politicians, and athletes found that high performers are 400 percent more productive than average ones. Studies of businesses not only show similar results, but also reveal that the gap rises with a job’s complexity. In highly complex occupations—the information- and interaction-intensive work of managers, software developers, and the like—high performers are an astounding 800 percent more productive.”

High-quality employees are in high demand. Attracting and retaining the best talent can make the difference between a company succeeding and failing. Workers carefully compare the different benefit packages that prospective employers offer them. Few companies are able to use their health benefit packages to entice prospective employees.

But with DPC, this changes. Most companies cover the cost of the membership fee for their employees, which means employees can now enjoy a direct relationship with a primary care doctor who responds to their calls, emails, and texts immediately; who gets employees in for office visits the same day or the next day as many times as necessary; and who can spend as much time with employees as they need—all at no cost to employees. What employee wouldn’t consider that the best health benefit they’ve ever been given?

Direct primary care doesn’t just improve access and quality of care, it reduces the cost of care by reducing unnecessary downstream health care over-utilization. For a self-insured company that pays its employees’ medical bills out of its own pocket, DPC represents not only one of the best ways to control costs, but also by providing better service to its employees, a way to attract and retain the best talent.

By gulfsouthb32553561, Oct 2 2018 12:26PM

Care to take a guess how many Republican senators are willing to take a stand over federalism? Would you believe just two?


On Monday night, when the Senate considered legislation sponsored by Sen. Susan Collins (R-ME) about “gag clauses” in pharmaceutical contracts, only Utah’s Mike Lee and Kentucky’s Rand Paul voted no. Lee and Paul do not believe the federal government has any business providing for blanket regulation of the health-care sector.


That so many Republicans who claim to support federalism turned a blind eye toward this important principle in this instance says much about why they have thus far failed to reverse the federal government’s power grab in Obamacare.


Gag Clauses, Explained

I have experienced the distorted ways the drug pricing system currently operates. When looking to refill a prescription for one of my antihistamines, my insurance benefit quoted me a charge of $170 for a 90- to 100-day supply. But when I went online to GoodRX.com, I found online coupons that could provide me the same product, in the same quantities, for a mere $70-80, depending on the pharmacy I chose.


I found even greater discounts by purchasing in bulk. I ended up buying a nearly one year’s supply of my maintenance medication for $210—little more than the price for a 90-100 day supply originally quoted to me by my insurer. Had I used my insurance card, and refilled the prescription repeatedly, I would have paid approximately $300 more over the course of a year. Because my Obamacare insurance is junk, I have little chance of reaching my deductible this year, short of getting hit by a bus, so it made perfect sense for me to pay with cash instead.


In theory, anyone can go to GoodRX.com (with which I have no relationship except as a satisfied consumer), or other similar websites, to find the cash price of prescription drugs and compare them to the prices quoted by their insurers. But in practice, few try to shop around for prescription drugs.


“Gag clauses,” inserted by pharmaceutical benefit managers (PBMs), prohibit pharmacies from telling people that they might benefit from paying in cash rather than using their insurance card. While the trade association for PBMs opposes such provisions, and claims that “gag clauses” do not widely exist, a 2016 survey of community pharmacists found that many encountered them regularly.


Why Federalism Matters

In general, conservatives would support efforts to increase transparency within the health-care marketplace, and prohibiting “gag clauses” would do just that. However, some conservatives would also note that the McCarran-Ferguson Act of 1947 devolves the business of regulating insurance, including health insurance, to the states, and that the states could take the lead on whether or not to eliminate “gag clauses” in insurance contracts. Indeed, a majority of states—26 in total—have already done so, including no fewer than 15 state laws passed just this year.


Lee’s office reached out to me several weeks ago for technical assistance in drafting an amendment designed to limit the scope of federal legislation on “gag clauses” to those types of insurance where the federal government already has a regulatory nexus. Lee ultimately offered such an amendment, which prohibited “gag clauses” only for self-insured employer plans—regulated by the federal government under the Employee Retirement Income Security Act of 1974 (ERISA).


Unfortunately, only 11 senators—all Republicans—voted for this amendment, which would have prevented yet another intrusion by the federal government on states’ affairs. Of those 11, only Lee and Paul voted against final passage of the bill, due to the federalism concerns.


More Federalism Violations Ahead?

To follow up on Monday’s bad developments, Tuesday saw the release of another proposal that would further entrench the federal government in the health-care system. Specifically, a group of lawmakers released a discussion draft of legislation that would federally regulate the issue of “surprise medical bills,” which occur when a patient ends up at an out-of-network hospital in an emergency situation, or gets treated by an out-of-network physician at an in-network hospital.


One of the prime sponsors of the discussion draft? None other than Sen. Bill Cassidy (R-LA), the author of legislation introduced last year that he claimed would “give states significant latitude over how [health care] dollars are used to best take care of the unique…needs of the patients in each state.”


The contradiction between Cassidy’s rhetoric then and his actions now raise obvious questions: How can states get “significant latitude over” their health care systems if Washington-based politicians like Cassidy are constantly butting in with new requirements, like the “surprise medical bill” regulation? Or, to put it another way, why does Cassidy think states are smart enough to manage nearly $1.2 trillion in Obamacare funding, but too stupid to figure out how to solve problems like drug price “gag clauses” and “surprise bills?”


Politics Versus Principle

The widely inconsistent behavior of people like Cassidy raises the possibility that, to some, federalism represents less of a political principle to follow than a political toy to manipulate. When Washington lawmakers want to punt a difficult decision—like how to “repeal” Obamacare while “replacing” it with an alternative that covers just as many people—they can hide behind federalism to defer action to the states.


Conversely, when an issue attracts a popular outcry—like drug prices or “surprise bills”—federal politicians can abandon talk of federalism, and swoop in to tell states how to run their health insurance markets. After all, as Ronald Reagan said, they’re from the government and they’re here to help.


Reagan had another axiom that applies in this case: That there is no limit to what a person can do if that person does not mind who gets the credit. Lawmakers in literally dozens of states have acted on “gag clauses,” but that matters little to Collins, who wants the federal government to swoop in and take the credit—and erode state autonomy in the process.


It may seem novel to most of official Washington, but if lawmakers claim to believe in federalism, they should stick to that belief, even when it proves inconvenient.

By gulfsouthb32553561, Oct 1 2018 05:54PM

With healthcare open enrollment season approaching, employees electing a high-deductible health plan will soon have an opportunity to decide how much to contribute to their health savings account for next year.

My advice?

Employers should tell employees to contribute as much as they possibly can. And they should prioritize their HSA contributions ahead of their 401(k) contributions. I believe that employees eligible to contribute to an HSA should max out their HSA contributions each year. Here’s why.

HSAs are triple tax-free. HSA payroll contributions are made pre-tax. When balances are used to pay qualified healthcare expenses, the money comes out of HSA accounts tax-free. Earnings on HSA balances also accumulate tax-free. There are no other employee benefits that work this way.

HSA payroll contributions are truly tax-free. Unlike pre-tax 401(k) contributions, HSA contributions made from payroll deductions are truly pre-tax in that Medicare and Social Security taxes are not withheld. Both 401(k) pre-tax payroll contributions and HSA payroll contributions are made without deductions for state and federal taxes.

No use it or lose it. You may confuse HSAs with flexible spending accounts, where balances not used during a particular year are forfeited. With HSAs, unused balances carry over to the next year. And so on, forever. Well at least until you pass away. HSA balances are never forfeited due to lack of use.

Paying retiree healthcare expenses. Anyone fortunate enough to accumulate an HSA balance that is carried over into retirement may use it to pay for many routine and non-routine healthcare expenses.

HSA balances can be used to pay for Medicare premiums, long-term care insurance premiums, COBRA premiums, prescription drugs, dental expenses and, of course, any co-pays, deductibles or co-insurance amounts for you or your spouse. HSA accounts are a tax-efficient way of paying for healthcare expenses in retirement, especially if the alternative is taking a taxable 401(k) or IRA distribution.

No age 70 1/2 minimum distribution requirements. There are no requirements to take minimum distributions at age 70.5 from HSA accounts as there are on 401(k) and IRA accounts. Any unused balance at your death can be passed on to your spouse (make sure you have completed a beneficiary designation so the account avoids probate). After your death, your spouse can enjoy the same tax-free use of your account. (Non-spouse beneficiaries lose all tax-free benefits of HSAs).

Contribution limits. Maximum annual HSA contribution limits (employer plus employee) for 2019 are modest — $3,500 per individual and $7,000 for a family. An additional $1,000 in catch-up contributions is permitted for those age 55 and older. Legislation has been proposed to increase the amount of allowable contributions and make usage more flexible. Hopefully it will pass.

HSAs and retirement planning. Most individuals will likely benefit from the following contribution strategy incorporating HSA and 401(k) accounts:

1. Determine and make the maximum contributions to your HSA account via payroll deduction. The maximum annual contributions are outlined above.

2. Calculate the percentage that allows you to receive the maximum company match in your 401(k) plan. Make sure you contribute at least that percentage each year. There is no better investment anyone can make than receiving free money.

You may be surprised that I am prioritizing HSA contributions ahead of employee 401(k) contributions that generate a match. There are good reasons. Besides being triple tax-free and not being subject to age 70 1/2 required minimum distributions, these account balances will likely be used every year. Unfortunately, you may die before using any of your retirement savings. However, someone in your family is likely to have healthcare expenses each year.

3. If the ability to contribute still exists, then calculate what it would take to max out your contributions to your 401(k) plan by making either the maximum percentage contribution or reaching the annual limit.

4. Finally, if you are still able to contribute and are eligible, consider contributing to a Roth IRA. Roth IRAs have no age 70 1/2 minimum distribution requirements (unlike pre-tax IRAs and 401(k) accounts). In addition, account balances may be withdrawn tax-free if certain conditions are met.

The contributions outlined above do not have to be made sequentially. In fact, it would be easiest and best to make all contributions on a continual, simultaneous, regular basis throughout the year. Calculate each contribution percentage separately and then determine what you can commit to for the year.

Investing HSA contributions important

The keys to building an HSA balance that carries over into retirement include maxing out HSA contributions each year and investing unused contributions so account balances can grow. If your HSAs don’t offer investment funds, talk to your human resources department about adding them.

HSAs will continue to become a more important source of funds for retirees to pay healthcare expenses as use of HDHPs becomes more prevalent. Make sure you maximize your use of these accounts every year.

By gulfsouthb32553561, Sep 4 2018 12:32PM

If it were easier for small businesses to band together to offer sponsored retirement plans, would more workers begin saving?


The White House is betting so, signing on the eve of Labor Day an executive order aimed at lowering the barriers for small companies to participate in multi-employer plans.


"Small business employees don’t deserve to be forgotten simply because they don’t have, and get the same attention as large corporations," Labor Secretary Alex Acosta said Friday. "They deserve access to retirement benefits."


President Trump signed the executive order at an event in North Carolina on Friday, directing the departments of Labor and Treasury to begin a regulatory review of the challenges small firms face in joining MEPs, or Association Retirement Plans.


Government figures indicate that about 90% of employees at large companies have access to a workplace retirement plan, while only around have of those at smaller firms can contribute to an employer-sponsored plan.


"One reason for this disparity is because it's relatively more expensive for small businesses to set up and operate these retirement plans than it is for large businesses," Sherk said. "Larger employers can enjoy economies of scale by spreading those costs over far more workers. Small businesses have much less ability to do that."


The administration cites a Pew survey that found that nearly three-quarters of small businesses that do not offer a retirement plan cited high costs as their primary deterrent.


And yet, studies have also found that workplace plans are the most effective way to get workers to contribute to their retirement savings, so "the coverage task here is to do what we can do to get as many small businesses involved in sponsoring 401(k) plans and retirement savings vehicles as possible," said Preston Rutledge, assistant secretary of Labor and the head of the Employee Benefits Security Administration.


"Basically we will be trying to find policy ideas that will help make joining a 401(k) more attractive proposition for small employers to the ultimate benefit of their employees," Rutledge said. "We believe that by joining together with other small employers in a larger 401(k) plan a small employer can experience lower costs and reduce administrative hassles."


To that end Trump is directing Labor and Treasury to propose revisions to their rules governing MEPs that could produce a more employer-friendly policy environment. At Labor, for instance, Rutledge indicated that staffers would reconsider restrictions that prevent businesses from disparate industries banding together to offer a retirement plan.


At Treasury, officials will be looking to update and simplify the rules governing the disclosures that plan sponsors must make about issues such as required minimum distributions or asset rollovers, according to Dan Kowalski, counselor to the treasury secretary. The department will also consider revising its minimum distribution regulations, last updated in 2002, to help ensure that workers "don't run out of money by the end of their life because of erroneous tables."


Perhaps more consequentially, Treasury will evaluate changes to the internal revenue code to prevent a compliance failure of one MEP participant from sinking the entire plan, reducing a significant element of risk that has kept some employers on the sidelines.


"Currently, the failure of one employer to satisfy code requirements puts in jeopardy the qualification of the entire MEP plan," Kowalski said.


"Treasury will examine how the MEP might be able to remove the non-compliant employer from the plan without the need to dissolve the entire MEP," he said. "Basically, there will be less risk on employers banding together in MEPs that the actions of somebody else might threaten the retirement security of their employees."

By gulfsouthb32553561, Jul 30 2018 11:37PM

Just as each generation has its own soundtrack and cultural references (cue “The Breakfast Club” or “The Big Chill”), every age group has a different view of what it means to stay “healthy.” What’s important for one generation in terms of well-being may not be as crucial for another.


In fact, our research and those of other organizations have found that age is one of the biggest influences on how employees prioritize their health. To optimize your employee engagement, your wellness programs need to account for generational differences. Access to reliable segmented data will help inform your decision-making so you can customize your incentives, benefits and communications strategy accordingly.


What do we know about how different generations think about their health?


Millennials — The Selfie Generation: Highly attuned to personal lifestyle and curated online lives, millennials want to feel and look good. Being healthy for them doesn’t just mean “not sick” — it’s a daily, active pursuit. It’s not surprising the generation that has grown up with Uber, Amazon and Netflix is impatient when it comes to getting health services. They’re frustrated by long wait times and the hassle of scheduling appointments — so much so that 13% of them have gone straight to the ER because they couldn’t see a doctor (compared to 10% of Gen Xers and 6% of baby boomers), according to a study co-authored by GE Healthcare Camden Group and Prophet. Millennials think digitally, rely heavily on social networks for information and gravitate toward convenient, self-serve options for healthcare.


Gen X — The Sandwich Generation: Caught in the middle, Generation Xers are often looking after the health of their aging parents as well as their young children, not to mention struggling to eat better, exercise more and get more sleep. Because they are caught in the middle caring for their parents and kids, nearly three-quarters of Gen Xers identify themselves as the chief health decision makers in their families, according to a study by Greyhealth Group and Kantar Health. What Gen X wants from healthcare is more transparent, immediate and actionable communication, the researchers say.


Baby Boomers — The Rock ’n’ Roll Generation: Baby boomers want to live longer even as many are managing chronic ailments such as obesity and high blood pressure. For them, staying healthy means avoiding a health scare like cancer or a heart attack, and getting the most out of their lives. Data shows that boomers are less stressed than Gen Xers or millennials, and despite age-related diseases, they report feeling healthier compared to their younger counterparts. Unfortunately, the next generation of seniors may not be as well off. According to a study by the United Health Foundation, compared to the current senior population when they were middle-aged, the next wave of seniors smokes 50% less, yet has a 55% higher

prevalence of diabetes, a 25% higher prevalence of obesity and a 9% lower prevalence of very good or excellent health status.


What does all of this mean for benefits leaders?


It means that employee benefit administrators and advisers can’t expect to fully engage employees when designing and promoting wellness programs without accounting for key generational differences. Strategically and tactically, this nuanced approach will require segmenting your audience so the message is specifically tailored for each age group’s needs and goals.


One idea: Get to know your people. You may need to invest in list management tools, such as marketing automation software, or find a partner or agency that can take advantage of the available technology to complete this task. These tools can help create and maintain up-to-date lists of employees, segmented by age and interests, as well as optimize delivery across the channels that resonate most with each user group. This means social media versus texting versus e-mail newsletters).


Telehealth

While successful segmenting may require better technology, how you speak to the generations in your audience can be as simple as crafting e-mail subject lines designed to motivate each group differently.


While marketing incentive programs to lose weight, for example, an e-mail for millennials might say, “How to look great this summer.” Meanwhile, the subject line for the Gen X crowd might read, “Get the stamina you need to keep up with your kids.”


Modern health marketing requires a data-driven approach. What is the first rule of marketing? Know your audience. What is the first rule of modern marketing? Decisions involving your message, marketing materials and distribution channels should all be driven by your data, including data on the various generations of workers in your organizations.

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