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continued from page 30             plans  can  backfire.  “We’re  seeing  that
         tracking  which  employees are signed   many employees who select the least ex-  Keep your employees well
         up with which polices). But they offer   pensive plans with the highest deduct-  Every employer wants to increase
         more choice and plan customization.   ibles often avoid getting the medical   productivity, reduce absenteeism, and
           The private exchanges are most at-  care they need because of the required   boost workplace morale. One tool for
         tractive to employers who want to re-  out of pocket costs,” says Larson. “This   doing all three: a wellness program.
         duce internal  administrative hassles.   is a particularly serious issue with low   “We favor what we call compre-
         The  exchanges  often have technology   wage workers who do not have the mon-  hensive ‘well-being’ initiatives that
         platforms that can provide a combined   ey to pay high premiums and deduct-  cover all aspects of the employees’
         interface for reporting, billing, COBRA,   ibles. The result for employers is often   lives,” says Cheryl Larson,  Presi-
         and employee plan evaluation.      a decline in productivity because work-  dent & CEO of Midwest Business
           Be  aware,  though,  that such  ex-  ers may struggle with managing their   Group on Health, a Chicago-based
         changes are not panaceas. “We have   health issues such as diabetes.”  consortium  of  125 employers of
         helped several clients evaluate private   Many  states are  setting  up  road-  some 40,000 workers  (mbgh.org).
         exchanges,  and we have consistently   blocks  to such  plans, aware of their   “We feel it’s the right thing to do.”
         found them to be less favorable than   limited coverage and fearing they will   Do the programs pay off in dollars
         other solutions,” says Jessica Du Bois,   erode the strength of the ACA-mandat-  and cents? “It is challenging to as-
         benefits consultant with Business Ben-  ed health insurance exchanges.  sess return-on-investment (ROI),”
         efits Group, an insurance brokerage out                                acknowledges Larson. “But the trend
         of the D.C region that serves business-  ASSOCIATION PLANS             for many employers is to look at
         es of all sizes (bbgbroker.com). “Market   Yet another  pathway to coverage   value-on-investment  (VOI).  For  ex-
         data helps to reaffirm this, because less   for smaller employers are association   ample, the program might track how
         than three percent of employers report   plans. Severely limited by the ACA,   many people actually change their
         being in private exchanges. The reason   these programs have gotten a new lease   behavior. Are they taking their medi-
         is that they do not seem to affect health   on life from the Trump Administration,   cations more regularly, or following
         care costs, due to the expenses incurred   in the form of Labor Department rules   up with their doctors for treatments?”
         by their administrative overhead.”  expanding their legality.            Although VOI is not a hard dollar
           More information about private     “Association plans let employers pool   metric,  employers  can  often  judge
         health exchanges can be found through   within similar geographic locations or   success  by monitoring workplace
         an organization called The Private Ex-  industries,” says Du Bois. “I certainly   productivity as people start focusing
         change Evaluation Collaborative  at   understand their attraction. Spreading   on health-seeking behaviors and ef-
         THEPEEC.com.                       the risk over more people generally re-  fectively managing disease. Bottom
                                            sults in a lowering of premiums.”   line: wellness programs can help ev-
         CHEAPER PLANS                        Some four million people could be cov-  eryone do their job better.
           The Trump administration is at-  ered by association plans in the coming
         tempting to expand the insurance   years, according to Labor Department   some cases may open the door to fraud.
         choices for smaller employers by cham-  estimates. Federal regulations pro-  For information go to dol.gov/gener-
         pioning  the availability of less  costly   hibit the plans from denying coverage   al/topic/association-health-plans.
         short-term policies, association health   or charging higher rates to employees
         plans,  and  more  flexible  health  reim-  with pre-existing conditions. But some   HEALTH REIMBURSEMENT
         bursement arrangements (HRAs).     critics note that the plans are exempt   ARRANGEMENTS
           Employers  with  tight  budgets  may   from many other consumer protections   Finally, Health Reimbursement Ar-
         be especially attracted to the short-  detailed  in the ACA. These include   rangements  (HRAs),  another  cover-
         term plans which sometimes go under   coverage of what the ACA deemed “es-  age  pathway  blocked  by  the  ACA,  are
         the  rubric  “fixed  indemnity”  and  sport   sential health benefits” such as mental   getting a boost from the Trump Ad-
         monthly premiums as low as $200. On   health care, emergency services, ma-  ministration. HRAs are tax-sheltered
         the downside, such plans also come with   ternity care, and prescriptions drugs.   accounts, owned and funded by employ-
         higher out of pocket maximums. And   One problem with association plans is   ers, from which funds are withdrawn
         coverage is less comprehensive. “Bear   that  businesses  with  healthy  individu-  to reimburse employees for health care
         in mind that a majority of such plans do   als may end up subsidizing the steep   they receive on the open market, includ-
         not cover wellness visits, prescriptions,   medical bills of others. “The reality is   ing on the state public exchanges.
         mental health and maternity,” says Du   that association plans are not great fits   Employers with  fewer  than 50 em-
         Bois. A lack of prescription drug cover-  for many companies,” says Du Bois.   ployees can use HRAs to reimburse
         age can be especially damaging, since   “Economies of scale are only a significant   employees purchasing  insurance  and
         drug prices are rising much faster than   advantage if you are the least healthy   health care in the individual market.
         other health care components.      group in the association. If you have a   These plans are called qualified small
           Furthermore, there is often a ceiling   healthy, engaged population, why would   employer HRAs (QSEHRAs). “HRAs
         on benefits. “I do not like plans that say   you want to adhere to the risk of others?”   can be a great option,” says Du Bois.
         things in fine print like ‘we will cover   Yet another potential problem is that   “Some employers use  them to self-
         two days of a hospital stay if you need   association plans may introduce costly   insure a small portion of their health-
         heart  surgery,’  or  ‘if  you  need  chemo-  administrative levels that may end up   care. They increase their deductibles to
         therapy, we will cover four visits,’” says   bloating premium levels.   save  on  premiums,  then  give  employ-
         Eastaugh. “The actual care takes a lot   As is the case with short term plans,   ees HRA funds to supplement a por-
         more time than that. What is cheap is   some state insurance regulators are block-  tion, or all of the deductible.” These can
         not always what is good.”          ing association initiatives, fearful they will   be especially valuable when a business
           Employers, then, need to realize such   undermine  the  state  exchanges  and  in    continued on page 78

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