Published on: November 6, 2021
Delta Update: New COVID cases in the U.S. rose over the past week, driven by increases in the interior west, from Arizona to North Dakota. It remains to be seen if this trend will mirror the similar troubling increases in the U.K. and Germany, or if the downward trend in cases will resume as it did in September.
Washington Update: Vaccine mandates for businesses and federal contractors (OSHA ETS and Biden Executive Order) will not be enforced until January 4, 2022. HR Policy summary is here.
House Democrats are inching closer to passing their Build Back Better Act (budget reconciliation bill). The current version includes the following:
- Substantial mental health parity civil monetary penalties for any employer health plan that violates those legal obligations.
- Lowers the ACA test for determining if employer plans are affordable from 9.83% to 8.5% of employee wages through 2025.
- Penalizes drug companies if they raise prices faster than inflation for Medicare and employer plans and enables Medicare to negotiate drug prices for a limited number of drugs.
- Increases drug pricing transparency by requiring PBMs to semi-annually report to employers the costs, fees, and rebate information associated with their pharmacy benefit manager (PBM) contracts.
- Extends ACA premium subsidies in 2022 to 2025 to individuals with incomes below 138% of the federal poverty level in states that have not expanded their Medicaid programs.
- Extends expanded ACA premium subsidies through 2025.
- Provides $10 billion per year from 2023 to 2025 for state reinsurance programs to reduce the cost of coverage in the ACA exchanges.
Outlook: Negotiations on the Build Back Better Act are fluid and the bill text is still subject to change. Even if the bill passes the House, the Senate legislation may be different, and the Senate parliamentarian may strike elements of the bill that contain non-budgetary provisions.
Numbers You Should Know: Thirty-six percent of U.S. workers, up from 29% in September and 9% in July, now say their employer is requiring its employees to be vaccinated against COVID (Gallup). More U.S. employees say they favor (56%) than are opposed to mandates (37%). Nearly one in three U.S. workers are poised to look for a new job if their employer sets a COVID vaccination policy they disagree with, including 16% who are strongly opposed to vaccination requirements and 15% who are strongly in favor of them (Gallup).
At Bigger Companies, Earn Less, Pay Less in Health Premiums, Sara Hansard, BloombergLaw.com, October 20, 2021
More employers—especially larger companies—are tying their employee’s health premiums and out-of-pocket expenses to the amount each worker earns as open enrollment season for 2022 health plans begins. The trend is driven, in part, by a new understanding of health equity issues as a result of the COVID-19 pandemic. Under a wage-based premium model, workers at the bottom end of a company’s pay scale pay less for health insurance coverage than those at the top—and could also get more help with out-of-pocket expenses. The goal is more equitable costs overall.
Takeaway: Companies that have adopted a wage-based approach to employee health care contributions say it has paid off by keeping lower-wage workers in their plans and encouraging them to seek out health care. A recent survey found 22% of employers currently structure employee contributions based on pay levels or job grades and another 8% are planning or considering doing so in the next two years (WillisTowersWatson).
Report Addresses State All-Payer Claims Database Reporting by Group Health Plans, Thomson Reuters, October 26, 2021
An advisory committee established under the No Surprises Act has issued a report with recommendations to help the Department of Labor (DOL) develop a standardized reporting format for the voluntary reporting of claims information by self-funded employer health plans to state all-payer claims databases (APCDs). The report includes several recommendations intended to encourage self-funded health plans to voluntarily contribute claims data information to APCDs, though they cannot be required to do so (under the 2016 Gobeille decision).
Takeaway: The report provides recommendations and the reasoning for Congress to draft future legislation to require self-insured employers or their TPAs to submit claims data to APCDs. The report recommends DOL creates a simple process for self-funded health plans to submit data to APCD (for example, through streamlined procedures and a standardized opt-in process, such as an online portal).
How affordable is mental healthcare? The long-term impact on financial health, Erica Coe et al., McKinsey & Co.
With more individuals reporting symptoms of mental illness since the start of the COVID-19 pandemic, mental health access issues are only rising. Individuals diagnosed with mental illness face significantly higher levels of financial stress than those not diagnosed with mental illness. This report demonstrates that respondents with mental illness were, on average, 66% more likely to report debt. This disproportionate economic disadvantage only exacerbates the access challenges many face in not only finding a mental health provider, but one who is affordable and accepting new patients.
Takeaway: The issues with financial security outlined in this survey underscore the importance of integrating behavioral and primary health care, through models like the Collaborative Care Model. Indidivuals are between 5 and 6 times more likely to use an out-of-network provider for mental health services and those that do not seek treatment are 60% more likely to declare mental health services are unaffordable. Integrated models allow for more touchpoints with providers that can evaluate them for mental health needs. With 51-54% of employees with mental illness reporting burnout and stress compared to 15-18% of those who do not report mental illness, providing additional ways to ease the financial burden for employees with mental illness is just one way employers can better support employees.
Employer Group Launches Its Own PBM, Matthew Heller, CFO Magazine, October 25, 2021
The Purchaser Business Group on Health has launched its own pharmacy benefit manager, EmsanaRx, to reduce drug costs. The coalition stated that EmsanaRx will address “the lack of accountability of the PBM industry to its employer clients, who largely lack access to information about drug costs, true discounts and administrative fees that contribute to huge profits.”
Takeaway: Three PBMs currently manage nearly 80% of prescriptions in the U.S. and the formation of EmsanaRx demonstrates employer frustrations with PBMs regarding lack of transparency. The latest text of the reconciliation bill also addresses this concern with a requirement for PBMs to semi-annually report to employers the costs, fees, and rebate information associated with their PBM contracts. EmsanaRx will begin operating next year and plans to negotiate directly with drug manufacturers as well as provide clients with access to information regarding rebates.
How UnitedHealth, Aetna and Centene are tackling virtual-first care, Nona Tepper, Modern Healthcare, October 20,2021
Health insurers are betting big on individuals continuing to use virtual care post-pandemic, with UnitedHealth Group, Centene Corp. and CVS Health's Aetna all recently announcing new virtual-first offerings. Seventy-two percent of employees said they plan to "keep using" telehealth once the public health crisis has ended, according to a report last month from employee benefits consultancy Mercer. Among individual customers, telehealth use fell to just 4.2% of all visits in July, although virtual visits remained popular in certain specialties like psychotherapy, with 60.8% of sessions conducted remotely (FAIR Health's Monthly Telehealth Regional Tracker).
Takeaway: These plans have the potential to significantly increase access to health care services for employees, especially in the mental health space. Health plans believe increasing the use of virtual care can lower costs for plans and employees, as many of these visits do not require copays. However, this technology is still new and some fear virtual-first care may end up as a gatekeeper and delay a patient's eventual in-person visit. Plans and providers will also need to work out long-term reimbursement strategies.