ACA Ineligibles

As a benefits manager I am by default also a fiduciary to our health plan under ERISA.  One of the duties of a fiduciary is to ensure that the rules of the plan are followed and that the health plan is only paying for claims that it needs to be paying.  That is why many companies conduct claims and dependent eligibility audits.  A company doesn’t want to pay claims that it shouldn’t be paying.

With that in mind you can understand why I was shocked when I read an article in the WSJ this week about 115,000 people who have not yet proved their legal residency and are at risk of losing their health insurance coverage that they bought through healthcare.gov.  Most of these members have been covered under a health plan since the beginning of the year, receiving tax funded subsidies to help pay their premiums.  

I understand that there was a mad rush to sign people up and that not everyone had the proper paperwork.   Perhaps people moved and documents got lost or they just didn’t understand the requirements.  Maybe the website's technical glitches prevented them from submitting proof of legal residency.  I get that.  These things happen.  

What I don’t get is that the article stated that their coverage was going to end as of September 30.  

Huh?  

If people had nine months to send in proof of residency and still have not done so you can probably bet they are not legal residents and should not be entitled to insurance and subsides.  So why is the termination date as of the end of September?  The insurers should terminate them retroactively to January and attempt to recoup any claims paid out for those members throughout the year.

At my company I pride myself in keeping our eligibility as accurate as possible.  We once did a dependent eligibility audit and out of 2700 dependents less than five were no good.  But on the rare occasion when for whatever reasons an ineligible sneaks through and is active on our plan, we will terminate coverage as far back as we need to and attempt to claw back any claims that were paid during that time period.  As a fiduciary I have to try to recoup the money that was spent not in accordance with the plan.

My guess is that the order came from the White House.  It doesn't want to deal with the negative publicity right before open enrollment of retroactively terming all those people and chasing them down to repay claims. 

That I understand.  Nobody wants more trouble before open enrollment.  Even among the private sector.

Benefits in Bulk

When Glassdoor released the survey results of best companies for compensation and benefits a few months ago, one company that made the list received a lot of attention because it looked out of place.  The usual big name tech firms were all there but somehow Costco was there too.  Its benefits for part time employees and relatively high wages for a retail store were cited as factors for how Costco managed to snag the number two spot on the list, sandwiched between Google and Facebook.

I didn’t think much of the survey until a few weeks ago when Bloomberg released its list of Best and Worst 401(k) plans. (There are thousands of 401(k) plans in existence - somehow this list has only ranked 240 plans from best to worst.)  The first thing I did was look at the plans rated worst - and low and behold sitting at number 237 is Costco.   (Last place was Facebook but they have since implemented a generous match).  Their relatively paltry mach of up to $500 a year was what earned them the low ranking.

When employees aren’t happy with a company they will complain about anything and everything.  An easy target is the 401(k) match.  All over Glassdoor you can find employees taking shots at their companies’ 401(k) plans.  Usually these are companies that overall don’t a great rating anyway and this is a tangible benefits that employees like to gripe about.

But what we learn from Costco is that it is possible to have a reputation as a great place to work with great pay and benefits and yet unabashedly maintain a stingy 401(k) match.  But while reading through the Costco Glassdoor reviews you don’t see employees complaining about it.  Why not?  Because overall, employees are happy working for Costco.  

Another Glassdoor survey has them ranked number 16 for ''Best places to work''.  The company somehow is able to display to their employees that they are valuable by paying them fairly and offering them other benefits.  Employees feel good working for Costco so they aren’t looking to find problems. 

The inverse is true as well.  Don’t think that by offering a generous match you will automatically earn the adoration of your employees.  Not one of the top 10 companies in the Bloomberg survey with the best 401(k) plans is ranked highly in the Glassdoor survey.  Clearly there is more to earning a reputation as a great place to work than by throwing money in employee’s retirement accounts. 

Spare yourself a trip the ER

It was a dumb move.  I admit it.

I'm telling people it was a sports related injury and technically that's true.  Inevitably when you go bowling with bunch of little kids (in this case my own kids and many nephews and nieces) a ball is going to get stuck in the middle of a lane.  Unfortunately the bowling alley was so busy at the time we went that the man at the front desk was taking too long to come push the ball down so I decided to take a little stroll along the gutters to get it myself.  Everything was going fine until I slipped and landed with a thud on my shoulder.  I immediately asked my wife to call for an ambulance as I was sure it was broken.  It hurt so much that I thought I was going to pass out.

The medics said they didn't see anything obviously broken but recommended that I go for x-rays to get a proper diagnosis.  I thought about going to an urgent care center but the emergency room seemed to be a more appropriate option for me at the moment.

The ER was an absolute mess.  I couldn't get anyone's attention for help.  There seemed to be more maintenance staff than nursing staff.  Luckily, was able to snag one of the four folding chairs in the waiting area (which I had to share with my pregnant wife).  I waited an hour before a PA saw me.

I just assumed the PA was the first line of defense before they let me see a real doctor.  He spent about 30 seconds with me and said I needed x-rays.  I waited another hour for x-rays which ended up coming back negative and the PA sent me home with a sling and a script for ibuprofen.  No doctor.  No diagnosis.  Not even any pain killers.

The hospital billed $1,569.69.  United Healthcare knocked it down to $1,157.69, of which $951.92 was covered and I'm left with a bill for $205.77.  The PA billed separately and asked for another $275.

This personal experience solidified in my mind what I've been preaching for years.  Do whatever you can to avoid the ER.  It is an awful place to seek non emergency medical care.  Urgent care centers are opening up everywhere (two in my neighborhood in the last four months) and many of them have the same or better resources as emergency rooms for just a fraction of the price.

Steering the Conversation: A Wellness Success Story

During a recent address to a group of benefits professionals, Jennifer Benz, founder and CEO of benefits communication firm Benz Communications, charged her listeners with steering the national conversation about benefits.  The world hears a distorted view of what’s really going on in the benefits trenches.  The news reports the negative side of our industry:  the cost increases, the patient whose prescription isn’t covered, and failed wellness programs.  She said that benefits managers have the power to change the national conversation about employee benefits for the good by sharing the success stories.  Here is mine.

Matt Rogan* has been working in our company for eight years.  He has climbed his way up the corporate ladder and now manages a large department.  He is a cheery 32 years old, married and has four children.  In his spare time he volunteers for a local volunteer Emergency Medical Service Organization.  One more thing about Matt: Matt is a big guy.  A really big guy.  

In October 2013, our company hosted its first biometric health screening event for employees.  Anyone who completed the screening, regardless of results would pay a discounted rate for his or her health insurance premiums.

Matt was told at the screening that he needed to see a doctor about his elevated glucose levels and BMI.  He went to his doctor who welcomed him into the type 2 diabetes club.  He was put on anti diabetes drug Metformin and was told he needed to start losing weight, eating better, and exercising.

Last week I ran into Matt but I had to do a double take.  I barely recognized the Matt from just six months ago because he had lost 100 pounds.   He thanked me profusely and said that the health screening was his wake up call and inspiration to start leading a healthy lifestyle.  He had changed his eating habits and exercises every day and is now off of his medication.  Even during the never ending winter that we had he was able to get in his exercise by walking up and down the 18 flights of stairs in our building a few times each day.

There is a saying in the Talmud:  Whoever saves one life is as if he saves the entire world.  Wellness programs are not perfect and if you get down to the raw data the numbers will tell you that they don’t make financial sense.  But it’s the real human stories that sometimes make a stronger impact. There are a lot of Matts out there that have HR departments renewing their Wellness contracts.  The world just needs to know about them.

*Name changed to protect privacy

5 Things that won't stay in Vegas

I recently had the privilege of attending the Human Resource Executive Health and Benefits Leadership Conference in Las Vegas.  The event was well run, the speakers were (for the most part) terrific, and the session topics relevant.

Here are five things I learned:

1.        A representative from Intuit, the massive software company, spoke about its wellness program.  The speaker walked us through the seven years the company has been working on the wellness program and the various initiatives and incentives it has introduced.  In the end she admitted that she could NOT produce an ROI on the medical costs despite the constant tweaking and incentives.  She said Intuit will continue with a wellness program because it fits the company culture and employees appreciate it.

2.       Jim Klein from the American Benefits council once again predicted (I heard him give the same prediction two years ago) that COBRA will either end or change.  Essentially he argued that with the option of the public exchanges, there is no need for COBRA, as former employees now have access to coverage (probably with subsidies).  I hope he’s right.

3.       A popular rating agency isn’t just reviewing cars and washing machines, as they have now expanded into the health care ratings industry.  The newly created division, called Healthy Living, now reviews and ranks doctors, hospitals, health insurance plans, medications, and even medical procedures.  They’ve also partnered with the National Business Coalition on Health to create an employer toolkit called Choosing Wisely, which contains a wealth of resources employers can use to help communicate their health plan.

4.       Three of the major players in the health care cost transparency market came together for a panel discussion.  While it turned into a bit of game where each vendor wanted to show how much better its product was than its competitors, what was clear to me was that this is a product that is going to be offered in more and more health plans.  We’ve been ratcheting up deductibles and telling employees to be better consumers of health care.  Now we finally have a tool that they can use to help them make those decisions.

5.       Something that I’ve been working on in my Benefits department was hammered home when Adobe and Benz communication spoke together about using good design to communicate benefits.  The slide that got people taking pictures of the screen simply said: Good design helps people make good decisions’.  And it’s so true.  I’ve recently collaborated with our advertising team to help make our emails look nicer.  The feedback was great and the response to the emails has been huge.

The Dreaded Email from HR

Let’s face it: Employees dread getting emails from the HR department.  Many employees have told me that they simply ignore emails from HR or have them set up to go straight to the SPAM folder.  That’s because the emails are usually dry and boring and are about new rules, clarification of existing rules, or in general bad news. I don’t blame employees for not wanting to read them.  The problem is that every once in a while you really do have something important to say and you’ve lost your audience.

I decided that I needed to do something fun, different and unexpected in an attempt to get employees to change their views and hopefully get them to start paying attention.  An idea came to me when I was reading the list that the Social Security Administration publishes containing the most popular baby names for that year.  Many news outlets pick up the story and report about the biggest movers and speculate why certain names become more or less popular than they have previously been.

I decided to do the same thing with the names of babies born to employees at my company.  I ran a report of all the names of babies born to employees that year and ranked them by popularity.  Then I compared them to the national data.  This didn’t take long at all and I put together a cute email blast to the company with the results.

The feedback was overall positive.  Many employees loved the idea and thanked me for doing something fun and unconventional.  A handful of emails were negative (“is this what you do all day?”) but overall I accomplished my goal.  The trick is coming up with interesting topics to send out every once in a while to keep the momentum and to ensure that employees are opening the important emails as well.

CVS Caremark Smoke Out

CVS Caremark Pharmacy has been getting a lot of attention for its recent decision to stop selling tobacco products in its stores.  The CEO essentially said that selling tobacco products didn’t make sense for a company in the health business.  CVS Caremark has received praise from health advocates nationwide and even President Obama issued a statement applauding the company.

While the story sounds nice, I’m a little skeptical as to its true motives here.  The profit margins on cigarettes are slim (14.6% in 2011) and have been slowly decreasing over the years.  Even 7-11 has recently said that it expects cigarette sales to decline and that it doesn’t see tobacco products as being part of its long-term business model.  So perhaps CVS took the opportunity to capitalize on what was just a smart business move.  Removing part of a business that is not as profitable as other parts just makes sense.

If it were truly serious about making sure that CVS Caremark was a health store, wouldn’t it eliminate its soda and junk food aisle?  Well that’s unlikely to happen anytime soon because the profits margins on food items are 55%.  I’m curious to see if others will follow suit in the name of health.

HR and Benefits folks should take note.  If you communicate a wellness program that claims you care about the health of your employees but don’t get rid of the junk food in the vending machine, your employees will call you out for being hypocritical.