As the Affordable Care Act and moves by employers and private insurers emphasize lower cost medical care and increased quality, consumers need to closely examine their open enrollment information this fall for myriad changes.
Some of these changes will debut during open enrollment – the annual fall ritual when employers allow their workers to view and pick their health benefits for next year – almost always means higher co-payments, deductibles and more cost-sharing as companies push more costs onto their workers.
Open enrollment typically begins later this month, running for a couple weeks or so depending on the employer through early November. No matter whether your company offers
Here are five key ways employers are going to change your health benefit packages and what you should look out for:
1. Unitized Pricing/Charging Per Child – The HR Department calls it “unitized pricing” but what it really means is that the traditional choice of family coverage vs. single coverage is going away. Unitized pricing means employees pay per person as opposed to the traditional individual versus family plans. Benefits consulting firm Aon Hewitt (AON) says more than half of employers plan to use unitized pricing in the next three to five years.
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2. Narrow networks – Narrow networks – an insurance company’s preferred list of doctors and hospitals - are increasingly used to control costs by limiting choices to a smaller group of medical care providers. The insurer or employer stresses that the narrow network is a way to ensure quality with the smaller network a group that abides by certain measurements and rules on better health outcomes. But other observers see the narrow network as limiting choices to a less expensive group of doctors or hospitals.
3. The Consumer Directed Health Plan (CDHP) – Employers like to say they are putting more of the decision making into the hands of workers. But what this really is involves a health plan with a high deductible that often comes with a contribution from the employer toward the worker’s costs but not at the rate employers have covered benefits in the past. And many employers don’t increase their contribution from year to year so the employer saves but more costs are shifted to workers. Nearly 3 in 5 employers are moving to consumer-directed health plans, according to a new analysis from National Business Group on Health.
4. The “Private Exchange” – Your company may introduce a completely new way for you to pick benefits. Like the so-called “Obamacare” exchanges run by either the state or federal government, employees head to a private, or employer, exchange to choose benefits, but rather than a subsidy offered under the health law, your employer may give you a defined amount of money. A report earlier this year from Accenture says 40 million Americans will select benefits by a private exchange by 2018. That will be more than the 31 million Americans that Accenture predicts will be using the public exchanges. Already, Walgreen (WAG), Sears (SHLD) and Petco (PETC).
5. Specialty Pharmacy – If you have a prescription for a drug derived from biotechnology that often is infused or injected to keep your autoimmune disease under control, you are probable costing your company thousands of dollars. Employers are escalating step therapy, prior authorizations and shifting more and more of the share of the drug’s cost onto workers. While the costs of traditional medications to treat cholesterol, high blood pressure and diabetes are available in cheaper generic forms and some employers report spending less on these routine maintenance pills, specialty drugs are big ticket items for employers and such spending has jumped by double-digit percentages.
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