Target-date assets are expected to capture almost 90% of 401(k) contributions by 2019, according to research from Cerulli Associates. “The market for target-date funds is highly competitive given the industry’s expectations for future flows, and we anticipate that competition will intensify. Target-date funds captured nearly 40% of flows in 2013, and we expect this number to more than double before the end of the decade,” says Jessica Sclafani, senior analyst at Cerulli.
The Pension Protection Act of 2006, which created the concept of a qualified default investment alternative (QDIA), played a key role in increasing the use of target-date funds in DC plans. Target-date funds provide an ideal investment for DC plans due to their simplicity as a one-stop investment solution, coupled with a significant lack of engagement from participants, she said. The increased use of automatic features, such as auto-enrollment and auto-escalation, will also drive greater assets into target-date strategies. “Asset managers that do not have a proprietary target-date product will be forced to reevaluate their DC strategy, as the assets that are expected to amass in target-date strategies over the next several years cannot be ignored,” Sclafani explains. For more information, visit, www.cerulli.com.
HEALTHCARE
Are Medicare Home Health Service Copayments Coming Back?
The Medicare home health benefit does not impose a copayment on its beneficiaries, but many in Congress and the Administration are weighing the possibility of saddling a vulnerable population with additional out-of-pocket costs. Despite having Medicare, people 65 or older are most likely to say that cost poses a barrier to care, according to a study by the Commonwealth Fund. Nineteen percent said cost was the reason they did not visit a doctor; they skipped a medical test or treatment recommended by a doctor; did not fill a prescription; or skipped doses.
In fact, home health beneficiaries are older, poorer, sicker, and more likely to be from a minority population than Medicare beneficiaries as a whole. Data from Avalere Health indicates that 24% of home health recipients are over 85 compared to just 12% of all other Medicare beneficiaries. Sixty-six percent of home health seniors live at or below 200% of the Federal Poverty Level compared to just 48% of all other Medicare beneficiaries.
Additionally, 75% of seniors who get the Medicare home health benefit have four or more chronic conditions compared to just 49% of the general Medicare population. Eric Berger, CEO of the Partnership for Quality Home Healthcare, said, “Congress repealed the home health copayment in 1972 for a very good reason. It failed to reduce healthcare costs and instead drove seniors to higher-cost institutional settings. Re-imposition of such failed policy has the potential to compel poor seniors to forego cost-effective home healthcare simply because they cannot pay.” For more information, visit http://www.homehealth4america.org/
Consumers Are Getting Stuck with Mystery Medical Bills
Forty-percent of consumers surveyed say they received unexpected medical bills, and half of them never received a good explanation for why it happened, according to a study by the Altarum Institute. Thirteen percent of consumers with unexpected medical bills said that insurance didn’t cover anything, which led some to cover the full cost of care. Consumers who have more confidence navigating the health system are more likely to get the bill covered or get a good explanation of the bill. Those who are less confident end up paying more of the bill without understanding what the charges are for. Wendy Lynch of Altarum said, “We don’t know if consumers have always been hit with unexpected costs or if this is new. Because the ACA puts new pressure on hospitals, it’s possible that providers are finding new ways to add revenue by tacking on services.” For more information, visit www.altarum.org/CCCHC.
Professionals Want Better Health Care Benefits, Not Perks
Two out of three professionals would rather have better health and wellness benefits than more perks. This preference is more pronounced for professionals over 45: three out of four would choose better health benefits over more perks, according to a survey by One Medical Group. The following are other key findings:
- 64% say that employee benefits are very important to how they feel about their job and their employer, and 31% say benefits are somewhat important to how they feel.
- 69% of workers who are over 60 rate benefits as very important, as do 68% of those aged 45-60, 63% of 30 to 40-year-olds, and 55% of 18 to 29-year-olds.
- 72% say they might choose one job over another if it offered better employee benefits.
- 67% say that keeping them healthy should be one of the top goals of their company’s benefits program.
- 49% say that health is actually a top priority for their company while 67% say their employer is focused on managing costs.
Most companies provide medical insurance (88%), and more than half are investing in health and wellness programs. The most common programs offered include employee assistance programs (45%), on-site vaccinations (45%), fitness benefits (31%), workshops (31%) and on-site health screening (25%). But many professionals still say that their employer isn’t doing enough to keep them healthy. Only 52% say their company is making sufficient investments in their wellness and preventative care, and only 29% say their company’s health and wellness programs are making them healthier. For more information, visit http://page.onemedical.com/enterprise_benefits.
A Formula For Successful Voluntary Benefits
MetLife used findings from a recent survey to create a formula for a successful voluntary benefit program. Employees want to know how a particular feature – for example orthodontic care for a child – meets their needs and whether the price aligns with the level of protection they’re seeking. It’s not about finding the least expensive option, but about getting the appropriate level of protection. James Reid of MetLife said, “Employers do not need to deliver different plan designs or multiple versions of communications to use the formula. It is about focusing on making these advantages clear to the different generations by taking this into account when communicating; the value of these products becomes more evident.” The survey finds that employers should do the following:
- Provide a broad portfolio of products: 80% of employees value benefits that are personalized to their circumstances and age. Sixty-one percent are willing to bear the costs of benefits rather than lose them.
- Offer products and features that have meaning for each segment of their employee population and communicate the advantages of these benefits: When benefit communications highlight the options that employees care most about, employers can give their employees a sense of customization and make the value of these products apparent.
- Select voluntary products based on value, not price: Employers should look closely at plan attributes and understand the differences among products. These differentiating factors can influence the perceived value of the benefit and affect employees’ appreciation and participation.
For more information, visit www.metlife.com.
CEOs Spend a Lot of Time on HR Issues
CEOs spend an average of up to 46% of their time on HR issues, according to a survey by TriNet. The survey also reveals the following about CEOs:
- 63% rely on benefits to encourage employee retention.
- 33% say HR documentation and workplace compliance are their greatest worries, followed by litigation at 25%, and hiring practices, at 18%.
- 30% don’t measure the ROI on HR.
- 11% spend time managing or improving employee benefits.
- 9% provide perks to boost benefit and compensation packages.
- 5% use contests and incentives to help keep employees motivated.
Burton Goldfield, president and CEO at TriNet said, “The government doesn’t think about the size of a company when it sets legislation and compliance regulations. If not properly prepared and equipped, small and medium size businesses can quickly be distracted and hampered by the complexity and weight of regulation.” For more information, visit http://www.trinet.com.
Local Governments Shift Strategies to Cope with Rising Health Care Costs
Rising health care costs have prompted many local governments to make changes to their plans and strategies, according to a survey by the Center for State and Local Government Excellence. The following are the top health care cost drivers:
- 64% increased claim costs
- 57% prescription drugs
- 46% an aging workforce
- 45% insurance company price increases
- 45% federal health care policy
Local governments have responded to rising health care costs in a variety of ways. Fifty-seven percent increased cost sharing of premiums paid by employees, and nearly half of respondents said that their local governments changed the way health insurance is provided. Nineteen percent of those reporting changes shifted employees to a high-deductible plan with a health savings account, and 14% established a health reimbursement arrangement.
Local governments have achieved significant savings through disease management programs, on-site clinics, dependent eligibility audits, and regular review and rebidding of health care vendor contracts. For example, Asheville, N.C. has saved $4 for every $1 invested in chronic disease management. Corpus Christi, Texas reduced health care costs by $1.84 million by conducting a dependent eligibility audit and establishing an on-site wellness clinic. Hampden County, Mass. Implemented greater access to comprehensive medical care and related support services for offenders, which resulted in lower re-incarceration rates and total inmate population. Local governments report that providing easy access to health services at work sites supports employee wellness and reduces employee absenteeism and health care costs. Click this link to get the report, “Local Government Strategies to Address Rising Health Care Costs”
http://slge.org/publications/local-government-strategies-to-address-rising-health-care-costs
LTC
Living Overseas Could Limit LTC Payouts
More Americans are choosing to retire all over the globe, but that can affect the amount of benefits they can claim from their long term care insurance policy, explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance. AALTCI says that many of the leading long-term care insurers impose a limitation on benefits when care is needed outside of the United States or its territories. “You can purchase and pay for a policy designed to pay four years of benefits, but if the international limit is just one year you’ll have to move back to the U.S. for care or give up the balance available,” Slome notes. The Association recently posted details of how eight leading insurers address international benefits for their long-term care insurance policies. Only one company presently has no exclusions. The others have a variety of limits and rules. For more information, visit www.aaltci.org/ideas.
IN CALIFORNIA
Guide to Health Coverage for HIV Patients
The Covered California marketplace is offering a guide to health insurance plans for considering pre-exposure prophylaxis (PrEP) and people living with HIV and/or hepatitis C (HCV). The guide offers the following suggestions:
- People with chronic conditions and routine medication needs, including PrEP, should avoid Bronze and Minimum Coverage plans.
- People with HIV may qualify for financial assistance through the OA-HIPP Program, and can reduce their out-of-pocket costs by choosing a Platinum plan.
- People who don’t have HIV and have an annual income from $11,670 to $29,175 may qualify for cost-sharing subsidies and can reduce their out-of-pocket costs by choosing a Silver plan.
The San Francisco AIDS Foundation developed the guide along with several other health-related organizations. The guide is available at here.
NEW PRODUCTS
ACA Platform
Benefitfocus and Health E(fx) are offering a platform to manage benefit enrollment and employee communication. The platform offers eligibility tracking, compliance, reporting and analytics capabilities. It also offers a scalable workforce management solution. For more information, visit www.healthefx.us.
Leads for Financial Advisors
Advisors can get their own personalized website where prospective clients can play with their own data to see how optimizing their Social Security filing can affect their lifetime benefits. When a prospective client takes action, the advisor gets a notification e-mail and the lead goes to the advisor’s account. For more information, visit https://JohnAdvisor.SocialSecurity.Life,
Health Plan Selection Tool
An online platform called “Impact Health” (www.impacthealth.io) launched its beta version to simplify the process of choosing a health plan. The website suggests healthcare plans based on each user’s answers to a few simple questions.
Telemedicine
MyTelemedicine.com is designed to connect healthcare providers with patients across the U.S. using the latest telecommunication and video technology. As a cloud-based solution, healthcare providers can offer 24-hour services remotely. This will help cope with the demands of the Affordable Care Acts mandatory insurance policy.
Document Signing
DocuSign launched its DocuSign Winter ’15 Release, which includes an improved signing experience based on customer feedback from focus groups, usability studies, user testing and more. DocuSign features streamlined navigation and expanded browser support for embedded signing. For more information, visit www.docusign.com/docusign-winter-15-release.
Out-of-Pocket Cost-Estimator
EvergreenHealth now offers a free, personalized service for consumers seeking an estimate for the cost of their care. With one call or online request, patients can get an estimate of their out-of-pocket cost for medical and surgical care based on their health insurance policy. For more information, visit www.evergreenhealth.com/estimate.
