It’s Open Enrollment season for millions of people across the country. Here is a list of tips to provide to your employees as they go through your company’s Open Enrollment this year:
Capstone's Briana Scafidi Named to GPAHU Board of Directors
Capstone Group is pleased to announce the appointment of Briana Scafidi to the Greater Philadelphia Association of Health Underwriters (GPAHU) Board of Directors.
The GPAHU is the largest and most active local chapter of the National Association of Benefits and Insurance Professionals (NABIP), formerly the National Association of Health Underwriters. GPAHU represents hundreds of licensed health insurance agents, brokers, consultants and benefit professionals throughout the Greater Philadelphia region who serve the health insurance needs of employers and individuals. The GPAHU’s mission is to support initiatives and legislation that provides quality, healthcare solutions for all Pennsylvanians.
“Briana’s appointment to the GPAHU Board of Director’s only further validates her dedication to making a difference in our industry and for the clients we serve,” remarked Dan McGill, SVP of Capstone’s Employee Benefits Division. “From the moment she joined our firm, Briana has been committed to personal growth and development within our industry. Her willingness to go above and beyond continues to elevate those around her. These qualities have made her an invaluable asset to our team and are what will also make her a tremendous addition to the GPAHU Board.”
In addition to being a member of the Board of Director’s, Briana is also the Emerging Leader Program Coordinator for the GPAHU, which provides up and coming individuals in the healthcare insurance industry with personal and professional growth opportunities.
For more information on the GPAHU:
Greater Philadelphia Association of Health Underwriters
GPAHU Emerging Leaders Program
Prescriptions & Premiums: How Rising Drug Costs Impact Your Health Insurance
Prescription drug costs in the United States have been rising steadily over the past few decades, and the impact of these rising costs on corporate health insurance plans has been significant. The high cost of drugs and pharmacy services has been a major contributor to the rising cost of healthcare in the United States, and it is a problem that affects everyone, from patients to employers.
According to a recent report by the Kaiser Family Foundation, the cost of prescription drugs has been rising faster than any other component of healthcare spending in the United States. The report found that in 2019, the average cost of a brand-name prescription drug in the United States was $6,798, up from $1,869 in 2006. Generic drugs have also seen price increases, with the average cost of a generic prescription drug rising from $90 in 2010 to $140 in 2019.
These rising costs have had a significant impact on corporate health insurance plans. Employers are finding it increasingly difficult to provide affordable health insurance coverage to their employees, and many are passing on the costs of prescription drugs and pharmacy services to their employees in the form of higher deductibles and co-pays. This, in turn, has made it more difficult for employees to access the medications and treatments they need to manage their health conditions.
According to the AHIP, over 22% of all commercial health plan premiums go towards Prescription Drug costs, while only 11% go towards Doctor Visits and 3.3% towards Emergency Room Costs.
The impact of rising drug costs on corporate health insurance plans has been particularly acute for small and medium-sized businesses. These businesses typically have fewer employees and less bargaining power when negotiating with health insurance providers and pharmacy benefit managers (PBMs). As a result, they often end up paying higher prices for prescription drugs and pharmacy services than larger businesses with more flexibility and options in regards to the group health insurance offerings.
A few of the reasons for our heightened costs of prescription drugs in the United States is increased pressure for expensive R&D, and the lack of price regulation and transparency. Unlike in many other countries, the United States does not have a centralized authority that negotiates drug prices on behalf of the entire population. Instead, drug prices are set by the manufacturers, and insurers and PBMs negotiate prices with the manufacturers on a case-by-case basis.
There are some efforts underway to address the problem of rising drug costs in the United States. For example, several states have passed laws allowing the importation of prescription drugs from Canada and other countries where drug prices are lower. However, these efforts are limited in scope and may not be enough to address the larger problem of rising drug costs.
Larger employer groups and organizations that are “experience rated”, or in an alternative-funded group health arrangement, often have an opportunity to directly impact their prescription drug spend, thus directly impacting their group health insurance costs. As opposed to “fully-insured” health plans that include bundled vendors with little flexibility, many self-funded programs allow for an unbundling of services including Pharmacy Benefit Managers (PBMs), which gives the group more power to negotiate the most favorable contracts, pricing, and rebates. In addition to the PBM flexibility, these groups also have the ability to implement proactive drug advocacy and oversight programs to further control and reduce annual drug spend while still providing optimal care and coverage to their employees. We recommend speaking to your broker or consultant regarding these options, or contact a member of our Capstone Benefits Team for more information: Benefits@CapstoneGrp.com
In conclusion, the rising cost of prescription drugs in the United States continue to negatively impact corporate health insurance plans, and ultimately consumers & patients. While there are some efforts underway to address the problem, more needs to be done to ensure that everyone has access to the medications and treatments they need at a price they can afford. This will require a concerted effort by policymakers, healthcare providers, consultants, and the pharmaceutical industry to find solutions that work for everyone.
Philadelphia Employers Will Be Required to Offer Commuter Benefits
On June 9, 2022, Philadelphia City Counsel passed an ordinance called the “Employee Commuter Transit Benefit Programs” requiring employers with 50 or more covered employees to provide a commuter transit benefit program. Enforcement of this ordinance will go into effect on December 31, 2022.
Your Company’s Most Important Benefit: Education & Advocacy
Employer groups of all sizes allocate a substantial amount of funds each year towards their employee benefit programs. In today’s tight labor market, employers are looking to enhance their benefit offerings in order to increase employee satisfaction and overall morale, while also using their benefits package as a tool to attract and retain top talent. After working with hundreds of employer groups over the years, it has become increasing evident that even the most robust benefit programs fall short of accomplishing their intended goals when two key services are not being provided: Education and Advocacy.
Employee Benefits: How will Rising Inflation Affect Healthcare Costs?
From gas stations to grocery stores, you've almost certainly noticed that the costs of goods and services are skyrocketing with no end seemingly in sight. The American Healthcare system is no exception, as the rising costs of inflation coupled with the unrelenting strain of the COVID-19 pandemic on both the workforce and supply chains have led to ongoing challenges. With an unpredictable future ahead, making business decisions about balancing a tighter budget while still offering a competitive employee benefits package is more difficult than ever.
Today, inflation in the United States has reached rates not seen in years. The Consumer Price Index rose by 8.6% year-over-year in May 2022. All indications lead us to believe that it is only a matter of time before healthcare prices catch up to this increase. We've heard from clients that they are surprised that there hasn't been a more immediate substantial increase in healthcare costs currently. These dramatic increases are only being delayed by the unique characteristics of the healthcare industry. While other companies can raise the price of commodities such as food, gasoline, and raw materials immediately, that's not how it works in healthcare, where prices are set by government programs or negotiated with private insurers at an earlier point in time. In healthcare services, prices, reimbursement rates, labor contracts and several other input factors are set two to three years in advance. So, while physicians, hospitals, and other healthcare providers face higher costs—mainly increases in areas with shortages such as nursing and supplies— there will likely be a lag before consumers experience the same pressures.
We see this situation ultimately playing out in two steps. First, providers will demand higher reimbursement rates. Second, payers will pass higher costs to employers and consumers in the form of higher annual premiums and an increase in out-of-pocket expenses such as copays and coinsurance.
As for health insurance premiums, Peterson-KFF Health System Tracker's 23rd annual Employer Health Benefits Survey found that single and family premiums for employer-sponsored health insurance were up 4 percent in 2021. Also, The KFF survey found that the average family premium has risen 22 percent over the last five years and an astounding 47 percent over the past ten years. This burden of higher health insurance costs is shared by employers and employees alike. In 2021, covered employees contributed an average of 17 percent of the premium for single health coverage and 28 percent for family coverage. This means employers covered 83 percent of single premiums and 72 percent of family premiums last year.
Controlling Rising Healthcare Costs
While we can't predict how the inflation rate will fluctuate in the coming years, we can assume that healthcare costs and health insurance premiums will continue to ascend. What can your organization do to mitigate these price increases without sacrificing the quality of your overall employee benefits program?
Because inflation and the increased costs charged by healthcare providers are generally outside of your control, mitigating its effects is the best option for employer groups. Now is the time to be talking to your healthcare advisors and evaluating cost control methods. Evaluating and implementing products and concepts like alternative-funded health plans (self-insurance, level-funding, group captives, and consortiums), reference-based pricing, voluntary benefit offerings, and the utilization of Tax-Advantaged Accounts (HRAs, HSAs, DCAs, FSAs, etc.) are just a few of the strategies that enable employers to better manage healthcare spending. The KFF survey referenced earlier found that 64 percent of covered workers are now enrolled in self-funded plans, and 42 percent of small firms reported using level-funded plans. Both of these numbers are an increase from previous years' surveys, providing further proof that alternative funding models are continuing to gain traction compared to traditional fully-insured health plans.
A small silver lining, the IRS recently announced higher Health Savings Account (HSA) contribution limits for 2023 to help combat the inflation surge. The annual inflation-adjusted limit on HSA contributions for self-only coverage will be $3,850, up from $3,650 in 2022. The HSA contribution limit for family coverage will be $7,750, up from $7,300. The adjustments represent approximately a 5.5 percent increase over 2022 contribution limits, a substantial increase, whereas these limits rose by about 1.4 percent between 2021 and 2022.
Our top priority is to ensure your business is taking advantage of every possible course of action to reverse the trend of annual premium increases that will allow you to reallocate and reinvest those funds into initiatives that will more directly drive business growth. If you are a business owner or decision-maker within your organization struggling with the ever-increasing costs of offering a competitive employee benefits program, please don't hesitate to reach out to me directly or our team at Capstone to start a conversation!
Contact Us:
Joseph Fox
Senior Vice President - Employee Benefits
jtfox@capstonegrp.com
Office: 215-542-8030