Health Wellness Newsletters

When it comes to health-coverage laws, there’s often a domino effect.

As individual states require insurers â.” and in some cases, corporations â.” to cover or offer coverage of specific individuals  and procedures, similar laws can spread rapidly to other states.

The effect on plan sponsors -  Some mandates can increase your costs by 20 percent to 45 percent.

Small firms targeted, too

States are no longer targeting  just the Wal-Marts and other giant corporations anymore.  The pressure has increased on employers of all sizes.

That’s specifically true for the new “universal coverage” laws passed in Massachusetts and Vermont.

The Massachusetts law requires every firm with 11 or more personnel either to cover or contribute toward everyone’s health coverage, or else pay an annual fee of $295 per employee to a state fund.

Vermont’s similar version sets the each year fee at $365 per full-time equivalent staff member.  The Vermont law also requires all uninsured, low-income hourly employees to have access to a state-subsidized plan (called Catamount Health) sold through private insurance companies.

It’s up to employers to deduct the monthly premiums â.” $60 to $135, depending on the person’s wages â.” and send it to the state.

There are rumblings in at least 10 states about lawmakers pushing for universal-coverage laws. A few have formed committees to study the Massachusetts law and see when a version may be modified to their state.

Here are three proactive steps to consider now. These could potentially save money, time and compliance headaches later -

o  look into offering mini-med or similar lower-cost programs to satisfy minimum coverage requirements for uninsured personnel. Monthly premiums range from about $25 to $200

o  educate low-income employees about the earned income-tax (EIT) credit the federal government offers. This can make a mini-med plan free or almost free to eligible employees, and

o  use flexible spending accounts to develop a tax savings on premiums for other workforce and your firm.

Required procedures

The universal-coverage laws draw national headlines, but far more employers are currently affected by state laws requiring coverage for certain kinds of procedures. Three of the biggies -

o  diabetes self-management. Nineteen states require your medical plan to cover all the steps workforce with diabetes take to control their condition, including nutritional therapy (if prescribed by a doctor)

o  in vitro fertilization. This large ticket service adds 3% to 5% to your premiums, and is now a required benefit in 15 states, and

o  cervical cancer screenings. In the last year, four more states have required all company plans to cover yearly cervical cancer screenings for all covered female staff members, spouses and dependents age 18 and older. That brings the total to 24 states.

The good news about the diabetes management and cervical cancer mandates is they can reduce your  long-term costs, even when they increase them in the short-term.

Here is a good resource  for keeping abreast of mandatory coverage trends around the U.S..  The site also features  state-by-state breakdowns of changes in insurance laws  mandating the coverage of different treatments and conditions.

For  instance, this report from 2006 is the most comprehensive coverage-mandate study that I’ve ever seen.

It might be easier than you think to eliminate a major reason staff sue.

How? Well, roughly 75% of employee lawsuits happen because of accidental disconnects between an employer’s internal policies and procedures, and what’s written in the plan documents.

Here are two areas where some the costliest errors lurk, and three steps your fim can take to catch and correct the mistakes before you’re ever sued.

1. Policy/coverage discrepancies

A lot of firms’ written benefits policies and plan documents are like siblings who start to drift apart as they grow up.

In the benefits realm, nevertheless, the plan sponsor has the “parental” power â.” and legal responsibility â.” to make sure written policies and plan documents remain close as they grow and change.

As a routine practice, firms should be sure changes in their benefits policies are also written into the formal plan documents, according to benefits attorney William Wright.

If push comes to shove in court, any inconsistency with plan documents can prove fatal for the business. Example - Senior level management passes a new rule that personnel must work 30 hours a week to be eligible for the health plan.

Benefits and HR then write the new coverage policy into employees’ benefits  handbooks and hold meetings with personnel to explain the change.

Now suppose an employee drops to part-time status. Are you legally protected when the employee challenges the loss of benefits?

Not necessarily. for the policy in  the handbook to stand up in court, the plan documents must also say there’s a 30-hour-a-week eligibility requirement.

Same thing goes for disputes over run-out coverage.  Suppose it’s your firm’s policy to carry over coverage for a cancelled employee during the COBRA election period, but the requirement was never written into the plan document.

Several weeks later, the worker has a major health claim.  The TPA denies it, saying coverage had expired. Reason -  the plan document says “active employees” are covered, but does not specify that the insurer pay claims until the end of the month.

The likely result -  the ex-employee sues, saying the business is liable for the mistake.

2. Coordination of benefits

Watch out for cases where an employee’s claim might  be covered under two or more policies (e.g., your firm’s plan and one from a spouse’s business).

Make certain there’s a clear-cut coordination-of-benefits policy in all your plan documents. Typically, if a plan contains no instructions for coordination of benefits, it’s expected to pay first. Two key areas to check -

1. Be sure there’s a statement that says only the amount actually paid by each plan are going to be charged against the maximum benefit, and

2. Be sure that the order of benefits determination spells out which plan compensates first for a covered child when the employee is divorced from his or her spouse.

In like manner, if your firm offers domestic partner coverage, make sure there’s a coordination-of-benefits statement for dependent and non-dependent partners.

Three best practices

On an ongoing basis, you can cut your lawsuit risk by 75 percent if you -

o  gather all materials related to specific plans into a binder, including renewal letters from vendors and materials distributed to employees

o  perform a each year self-audit, checking to see when plan-document wording matches your current policies, and

o  pay special attention to keeping benefits descriptions up to date.

Reminder - If you don’t have a formal plan document, your contract with the vendor legally serves as the “control document” for the plan. By law, all workforce must have access to the plan document and be notified in writing of any alterations, including minor ones.

Incorrect billing from medical insurance carriers is more common than you might think.  The typical plan sponsor can get overcharged by 5 percent a year, as reported by brokerage and consulting firm Corporate Synergies Group.

Like most businesses, insurance carriers rarely keep perfectly up-to-date records on their clients.  As a result, plan sponsors often get charged for individuals  who shouldn’t be covered on the health plan. Here are two areas to watch -

Claims vs. enrollment

It’s common to have cancelled personnel still in the carrier’s claims eligibility system â.” even after they’ve been taken off your enrollment list.

Reason - Many carriers use separate computer systems for tracking enrollment and claims â.” and the two systems use different technologies that don’t “talk” to each another.

Carriers have no incentive to upgrade their systems, according to CSG president Eric Raymond, because doing so would cost the insurers money.

Leaving things as is, carriers simply charge customers when they put through claims for ineligible workers and dependents.

That’s why an annual claims audit is a must -  That way, you won’t get charged fees for claims the carrier accidentally put through.

Even when your firm outsources the work (it’s a rather time-consuming task when performed in-house), you’ll ordinarily see several percentage points of savings on your sum health costs.

Dependent eligibility

Poor carrier record-keeping also may be the cause for employees’ ineligible dependents not being taken off the enrollment files.

Few carriers have systems that automatically integrate with your Payroll department and your current enrollment forms (including the electronic “employee self-service” kind). Instead, data entry individuals  employed by the carriers input the information in the providers’ system.

Human error by the carriers’ staff costs plan sponsors another a few percentage points. Solution -  annual dependent audits.

Few businesss benchmark their flu programs, a research study  from the Disability Management Employer Coalition locates. But those that do often discover room for improvement.

Nearly 80 percent of businesss provide employees access to flu shots, either on-site or at a local clinic.  And 72 percent cover some or all of the cost (typically paying between $10 to $20). But -

o  At 89% of firms, fewer than half of staff actually get a flu shot

o  At 38% of businesses, fewer than 25% of workforce participate

o  only 6 percent of firms can easily get at least 75 percent participation

o  87 percent of survey respondents said  they never measure absenteeism during flu season, and

o  75% never tracked whether workers who get flu shots are actually absent less often.

The firms that get best results are those that actively educate staff, track flu-related absenteeism and send sick staff home.

The problem of presenteeism â.” staff members showing up at work but taking a “mental vacation day” â.” isn’t going away any time soon.

A recent survey found the typical staff member has three unused vacation days at the end of the year. But 33% admit that they sometimes take “unofficial” vacation days of a half-day or more.

Not surprisingly, the day after Thanksgiving, Christmas Eve day and December 26 rank one of the highest “presentee” days among businesses (namely in the white-collar realm) that remain open on those days.

In terms of the expanded question of presenteeism, what’s keeping individuals  from using their vacation time as it’s intended?  Top answers -

o  supervisors frown on personnel taking vacation time

o  There’s too much work to make up after using vacation time, and

o  individuals  want to “reserve” time in case of an emergency.

On the flip side, many folks who take vacation time have trouble leaving work behind. One worker in four admits to checking work e-mail and/or voicemail while on vacation.

And 29 percent say they have trouble forgetting about work-related stress, even when they’re using compensated time off.

Among all industrialized nations, USA staff members receive the fewest annually vacation days â.” 14 on average.