Employers Reformulating Health Benefits for 2014

Employers are planning to begin rolling out strategic changes in health benefits with annual enrollment this fall for the 2014 plan year. Some are looking at the new heathcare exchanges as options. Others are increasingly relying on consumer-driven health plans.

Consumer-driven health plans pair high-deductible insurance with a health savings account to cover out of pocket costs. They offer the benefit of lower costs and increased patient engagement in healthcare value judgments. The theory is that consumers seeing the costs of their healthcare will put pressure on the system to hold costs down. Detractors  of such plans say that patients might skip needed care to avoid out-of-pocket expenses.

Obamacare is a factor in some of these decisions, not so much because of changes starting this year, but more because of the threat of a substantial excise tax down the road. High-value or “Cadillac” plans will trigger the tax in 2018 if employers are unprepared. Says Randall Abbott, a senior healthcare consultant at Towers Watson:

The health care landscape is changing rapidly thanks to health reform, continued cost escalation, the emergence of health benefit exchanges, and new provider contracting and care delivery arrangements. While employers are grappling with how to comply with health care reform right now, they are evaluating new health care designs and delivery approaches for their employee and retiree populations that will ultimately transform the look of employer-provided health plans over the next three to five years. In particular, employers recognize the impact of the excise tax requires strategic planning now to create a glide path to 2018.

So you can expect employers to keep on fiddling with health benefits to make sure they avoid the penalty in 2018. For some, health exchanges will be an option. Others will find an independent path. Wellness programs and patient engagement will certainly be part of the mix.

If we get lucky, some useful innovations will come out of all this.

Click here to read more in Modern Healthcare, click here to read more from CBS MarketWatch, and click here to read more from Becker’s Hospital Review.

Midvale Company Machinist Allen working in #2 machine shop, July 1931; photograph © Kheel Center, Cornell University / flickr

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