CIGNA Study Confirms Savings in Consumer Driven Health Plans

 According to a recent study by CIGNA,  individuals enrolled in consumer-driven health plans (CDHP) can lower their costs. Their study advises that members compared to those  customers in traditional PPO and HMO plans, those in a CDHP:

  • Lowered their health risks:  CDHP customers lowered their risk of developing or worsening a chronic condition. According to the study, when employers fully transitioned to offering only a CDHP option, individuals improved their health risk profile by 10 percent in the first year compared to customers in a traditional plan option.
  • Reduced total medical costs:  CDHP medical cost trend was 16 percent lower than traditional plans during the first year. Over five years, cumulative cost savings averaged $9,700 per employee enrolled in a CDHP compared to employees who remained in a traditional health plan. Cost reductions were achieved without employers shifting out-of-pocket health expenses to their employees.
  • Received higher levels of care:  CDHP customers had consistent or higher use of over 400 evidenced-based medical best practices (than their counterparts in traditional plans.  CDHP customers also sought preventive care, such as annual office visits and mammograms, more frequently than customers enrolled in a traditional plan.
  • Were more engaged in health improvement: Through proper plan design plan and the use of incentives,  CDHP customers were more likely to have completed a health risk assessment and participated in their health coaching program than those enrolled in a traditional plan.
  • Were more savvy consumers of health care:  CDHP customers enrolled in their pharmacy management program were more likely to choose generic medications and had 14 percent lower pharmacy costs compared to those in a traditional plan. In addition, CDHP customers used the emergency room at a 13 percent lower rate than individuals enrolled in HMO and PPO plans.
  • More likely to compare cost and quality:  CDHP customers were twice as likely to use myCigna.com online cost and quality information to help them select a doctor or to review potential medical costs than customers enrolled in traditional plans.

“Each year the evidence increasingly shows that properly designed consumer-driven health plans can lower health risks, reduce medical costs and drive engagement,” said Cigna Chief Medical Officer, Dr. Alan Muney.

Please contact Gary Whiddon at Health Plans Online for more information on Consumer Directed Health Plans.  He can be reached at (888) 474-6627 or gary@hpo.biz.

 

Anthem Revised Rules Regarding Lipitor

 Anthem Blue Cross of California has recently announced that all members with prescriptions for Lipitor will need to have their prescriptions pre-authorized effective April 1, 2012 

This change is due to the addition of atorvastatin, a new generic for the brand name Lipitor, on their covered drug list.

This change impacts all of the commercial and individual business in California and New York. Medicare Part D and state-sponsored business are not impacted.

Employers, Do You Know The Rules??

 As an ERISA Plan Administrator (most private sector employers fall under ERISA law), you have the responsibility to comply with Federal Laws that govern your plan.  No matter who else you may hire to administer your plan, your Company is solely responsible to make sure things are done correctly.  As an employer offering benefits to your employees, there are many rules that you must comply with regarding the administration of employee benefit plans.  Below are some of the rules you must be careful to comply with in under law:

  •  Make sure you define – in writing in an employee handbook- the definitions of eligible employees and dependents.  For example, do you only offer benefits to full time employees over 40 hours per week?  However you define eligibles, make sure you are consistent in benefits that you offer and monitor to make sure you remain consistent.   Make sure you also define leave policies and waiting periods as well.
  • Make sure your plan complies with benefits mandate by state law and health care reforms.
  • Benefit and eligibility information must be provided to eligible participants or be made available at their request.
  • Make sure you file all necessary plan documents, such as 5500 reports.

Please remember that failure to follow the rules can be costly.  For example, the fine for failure to file the 5500 report is $1,000 PER DAY.

If we may be of any assistance to you or can help you organize a compliance process, please contact Gary Whiddon at (888)474-6627.

 

Wellpoint to Improve Primary Care Reimbursements

The Los Angeles Times has reported that health insurer WellPoint Inc. plans to increase the fees it pays to doctor practices, and it will start paying for services like preparing care plans for patients with complex medical problems.  They report that they will  also will offer doctors an opportunity to share in some savings when better patient care leads to a reduction in costs.  Wellpoint is the parent company of Anthem Blue Cross.
 
WellPoint said it wants to give doctors a chance to do more for patients outside of episodic care, or just treating people when they become sick.   Under the concept, doctors will be able to spend more time with patients, listening to them and understanding their concerns, said Jill Hummel, WellPoint’s vice president of payment innovation.WellPoint also expects a return on this investment. The insurer said the approach should cut down on some of the priciest forms of medical care, emergency room visits and hospital admissions.
  
 

IRS Issues Updated Guidance on W-2 Reporting

On January 3, 2012, the IRS issued additional interim guidance on the W-2 reporting requirement that is part of health care reform. In this guidance, the IRS confirms that employers filing fewer than 250 W-2s are not required to report the value of health benefits. This guidance extends that relief until further guidance is issued.

Additionally, the release indicates that specialty coverage, if included with medical benefits, must be reported.

The guidance reaffirms that this is a reporting requirement only and does not impact employees’ taxable wages.