Monday, April 30, 2018

$280K Is What a Couple Retiring This Year Will Need to Cover Health Care

  • Fidelity says the cost breaks out to $133,000 for men and $147,000 for women, primarily because of their expected longer lifespans.
  • “Covering health care costs remains one of the most significant, yet unpredictable, aspects of retirement planning,” says Shams Talib, executive vice president and head of Fidelity Benefits Consulting. “It’s important for individuals to educate themselves and take steps while working to ensure they are prepared to address these costs.”
  • Fidelity says that its estimate is based on a couple retiring at age 65. However, for those who retire earlier, the costs will be higher. 
Source: April 19, 2018

Friday, April 27, 2018

California Seeks to Reduce Healthcare Prices with Provider Rate Caps

Let the fireworks begin.  This will get incredibly heated. From California Healthline:  
Backed by labor and consumer groups, a California lawmaker unveiled a proposal Monday calling for the state to set health care prices in the commercial insurance market. 
Supporters of the legislation, called the Health Care Price Relief Act, say California has made major strides in expanding health insurance coverage, but recent changes haven’t addressed the cost increases squeezing too many families. 
To remedy this, Assembly Bill 3087 calls for an independent, nine-member state commission to set health care reimbursements for hospitals, doctors and other providers in the private-insurance market serving employers and individuals. 
The bill faces formidable opposition from physician groups and hospitals. 
“No state in America has ever attempted such an unproven policy of inflexible, government-managed price caps across every health care service,” Ted Mazer, president of the California Medical Association, said in a statement. 
At a press conference Monday, Assembly member Ash Kalra (D-San Jose) and other sponsors of the bill said the commission would use Medicare reimbursements as a benchmark and then factor in providers’ operating costs, geography and a reasonable amount of profit to establish rates. More details on the legislation are expected during committee hearings.

Yet Another Study Finds that Wellness Programs Do not yield Any Company Savings or Produce Healthier Employees

From HR Executive
The belief that some workplace wellness programs are worth the money hit a snag recently when researchers at University of Illinois at Urbana-Champaign released a study that found such programs show “limited evidence” that they actually work. 
According to the researchers, such programs cover more than 50-million workers and are intended to reduce medical spending, increase productivity and improve well-being, but they found workplace-health programs such as health or fitness assessments, weight-control programs or disease-management classes, among others, don’t result in happier, healthier employees, medical cost reduction, lower absenteeism or higher productivity. 
The trio of researchers—Damon Jones of the University of Chicago, and David Molitor and Julian Reif of the University of Illinois at Urbana-Champaign—created and deployed a comprehensive workplace wellness program study for a large employer, the University of Illinois. Employees were randomly assigned program eligibility and financial incentives individually. All told, about 5,000 (56 percent) of eligible employees participated. 
Essentially, the study found zero benefits from this specific workplace wellness program in its first year. Health costs, sick days, productivity and even gym visits remained static. According to Reif, assistant professor of finance and economics at the University of Illinois Urbana-Champaign, the research sought to determine the causal impact of the program on health and employment outcomes. While 39 outcomes showed no improvement, two were positive: Workers who joined the wellness program did become likelier to be screened for health issues, and they thought their employer put a high priority on employee health. ...

The People vs. Sutter: 1,500 Health Plans File a Class Action vs. Sutter For Systematic Overcharging and Anticompetitive Action

From the Sacramento News and Review
Attorney Richard Grossman represents a group of 1,500 health plans in a class-action suit against Sacramento-based Sutter Health, alleging that the industry giant has been illegally overcharging patients for more than a decade. The case is being closely watched by policymakers across the country as hospital consolidation increases and prices continue to rise. Last November, it was discovered that Sutter destroyed 10 years of records after the lawsuit was filed. SN&R publisher Jeff vonKaenel visited Grossman in his San Francisco office for an interview. 
What is significant about this lawsuit?
This case is extraordinarily important, because it’s a documented fact that the cost of hospital health care in Northern California exceeds the cost for the same health care in Southern California by 30 to 40 percent. When I learned that that was the case and examined what was likely to be behind it, I determined that there is no explanation for that kind of price disparity other than anti-competitive behavior that restrains price competition here and allows hospital providers to increase their prices without discipline. The discipline that we all accept and rely upon to keep prices low and quality high. And that’s competition in our marketplace. 
Without that competition, there is no reason for competitors to keep their prices at the lowest possible rates and no reason for them to increase their quality. With competition, they have tremendous incentive to do what our economic system requires, which is provide the best quality at the lowest possible price and, if you fail to do so, you do so at your peril. 
Who are you representing in this case?
As of last August, I represent all self-funded health plans—employers that pay for the health care of their employees directly without purchasing insurance to cover those costs. That’s how half of the individuals in Northern California—for that matter, across the country—obtain their health care coverage. 
What are you alleging in the lawsuit that Sutter did to allow their health care costs to go up 30 to 40 percent?
Sutter’s anti-competitive conduct is extremely treacherous. What they did was they entered into anti-competitive and illegal contracts with all of the major health insurance companies that provide health care coverage in Northern California. And those contracts require the following: One, that if you utilize one Sutter Health provider, one of their hospitals or one of their medical practices across the state, you must utilize all of them in your network. And if you fail to do that, you will pay a huge pricing penalty.
The full interview is absolutely worth reading and can be found here

Employer Could Be In Hot Water After Commenting That Healthcare Costs are "Skyrocketing" After Paying for a Plan Dependent's $250K Claim

From Seyfarth Shaw:  
... Plaintiff’s son, who suffers from a permanent and debilitating neurological condition, was hospitalized for four months in 2013. As an employee of Atlas Industries, Inc., plaintiff participated in a group medical plan that covered his son’s medical expenses. Atlas’s plan was partially self-insured, and the company paid approximately $250,000 for the son’s care. 
Seven months later, plaintiff did not call Atlas or report to work for three consecutive days after he had been released to work following a medical leave. Atlas’s handbook provided that any employee absent for three consecutive days without permission would be automatically fired. After plaintiff’s third no-call/no-show day, his supervisor fired him. 
Plaintiff sued, alleging that the company had fired him because of his son’s medical expenses, and thus that the company was liable for both retaliation and interference under ERISA. In support, plaintiff pointed to evidence that (1) Atlas had expressed concerns about “skyrocket[ing]” medical costs in employee notices; (2) an Atlas Vice President had told him in 2013 that he hoped his son would be released soon because the medical costs were getting expensive for the company; and (3) an Atlas human resources director showed another employee the son’s medical expenses and said that large payments were causing the company’s health insurance costs to rise. 
While the district court entered summary judgment for Atlas, the Sixth Circuit reversed, finding that there was enough evidence of interference or retaliation to deny summary judgment. Specifically, while the supervisor who fired plaintiff did not know about the son’s medical expenses, the Sixth Circuit found significant that the Vice President and director who commented about medical expenses played a role in the decision. Also, plaintiff contended that Atlas had tried to contact other employees before firing them under the no-call/no-show policy, but did not do the same for him. ...

IRS Allows Taxpayers with Family Coverage to Use $6,900 HSA Limit for 2018

On April 26, 2018, the IRS announced that, for 2018, taxpayers with family high deductible health plan (HDHP) coverage may treat $6,900 as the annual contribution limit to their health savings accounts (HSAs).

Earlier this year, a tax law change for 2018 reduced the HSA contribution limit for individuals with family HDHP coverage from $6,900 to $6,850. After this change was announced, the IRS received complaints that the $50 reduction would be difficult and costly to implement.

The IRS has now decided to allow taxpayers with family HDHP coverage to use the original $6,900 limit for HSA contributions for 2018, without facing excess contribution penalties.

Action Items

Employers with HDHPs may want to inform their employees about the HSA contribution limit change for family HDHP coverage. Employees who changed their HSA elections to comply with the reduced limit may wish to change their elections again for the $6,900 limit.