Will your older employees EVER retire?

According to a new Career Builder survey conducted by Harris Poll, they don’t plan to do so any time soon. One of the main reasons, according to the survey team, is financial uncertainty.

According to the survey results, “one third of workers ages 60+ (34 percent) say they aren’t sure how much they’ll need to save in order to retire.” These are employees typically within 5 year of retirement, and they don’t even know if they are near or far from being able to do so. That’s a problem not only for your employees, but also for employers who now have a large chunk of older workers who are probably ready to go, but not financially able to do so. Your employee engagement and productivity may be headed downhill.

The survey found that “when asked if they’re currently contributing to retirement accounts, more than 1 in 4 (26 percent) workers 55+¹ said they do not participate in a 401(k), IRA or other retirement plan.” My guess is that if the employee is not participating, then neither is the employer; meaning, these people probably have little to no savings for retirement.

What’s worse, based on the survey results, “30 percent of U.S. workers ages 60 and older plan to retire at age 70 or older. Another 20 percent don’t believe they will ever be able to retire.” That’s 50% of workers age 60+ who plan to stick around for an additional ten years or longer!

What if those employees have health issues and/or are not fully engaged? What if they become disabled and cannot work, or insist on trying to work while not at 100%?

This seems like a looming HR crisis. How can we educate employees to save? The “head-in-the-sand” approach that seems to be prevalent with older employees is a huge disservice to themselves (and you).

Consider looking at your contribution data and specifically check on your age 50+ population. Are they currently saving? Are their savings on-track? What resources do you have to help educate them about what they need to do today to retire when they are ready?

Please take the time and effort to address this issue before it becomes a crisis for your HR department (and your employees!). They will thank you for it!

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¹ CareerBuilder commissioned study of 3,411 employees ages 18 and over (employed full-time, not self-employed, non-government) between November 16 and December 6, 2016, of which 971 are ages 55+.

Does telehealth actually increase employer costs?

A recent research paper in Health Affairs noted that “12 percent of direct-to-consumer telehealth visits replaced visits to other providers, and 88 percent represented new utilization” — meaning that 88% of the people who used telemedicine for acute respiratory illnesses probably would not have otherwise gone to the doctor. This increased the plan costs by $45 per telehealth user.

So, let’s back up a bit here. What is telehealth? Telehealth connects a patient with a provider using technology – this can be a phone call, an online chat or a video conference to conduct what would otherwise be a normal office visit, and can only be used for certain ailments. The thought is that this convenience will allow members to easily access car for certain conditions (especially if in a remote location) at a fraction of the cost. However, don’t expect to use telehealth for a broken arm or chest pain – go to the emergency room, instead.

There are some key things to take away from this study, but don’t drop your telehealth benefits yet!

First, while the study had a large sample and covered several years of claims, it did only analyze one diagnosis: respiratory illness. So, it is really limited in its applicability to assessing the costs for all telemedicine visits.

Next, keep in mind that some of the “new utilization” generated may have actually prevented larger claims down the road. Some of those patients who would have otherwise skipped a traditional office visit may have developed pneumonia or other more complicated and expensive illnesses as a result of the lack of care without telemedicine.

Monitoring your telemedicine utilization and expense is definitely something to keep an eye on; and if you are an employer who has access to claims data, you might want to investigate claims activity before and after introducing telemedicine (if possible).

Lastly, remember that not all benefits like this are in place to reduce costs. Providing a benefit that makes care convenient can be valuable to your employees! So, take these evaluations with a grain of salt and step back and remember why you introduced them in the first place. My guess is that even if your population uses this benefit a bit more, the additional $45 per utilizing member is probably worth the expense, given your total health care spend.

What do people want from health care reform?

According to a new JAMA Infographic, most people want lower out of pocket costs from their health plan. That is hardly surprising given the prevalence of cost shifting that has occurred by most employers in recent years. How that will happen, though, is not an easy fix for both employers and ACA plans.

Lowering pharmacy costs are also universally important to those surveyed. This is also probably due to the higher deductibles that people now experience and the transparency of these often very high costs now that co-payments are less prevalent. People now understand just how expensive pharmacy benefits are – except for those using specialty medications. I am sure many of these users are still sheltered for the full costs of these drugs. Manufacturer coupons are also not helping with this issue.

These data also confirm that the ACA now has a more positive image than in months past – maybe because the threat of it going away has made it more valuable to those who benefit from it (including those in employer-based plans who have benefited from richer benefits and broader coverage, even with the associated increased costs).

As you can imagine, the amount of Federal funding going toward assistance for lower income individuals is clearly divided along party lines. This is also the case around the Federal government’s involvement in health care, in general.

The main issue for legislators is that only 19% of those polled want the ACA repealed without a replacement in hand. That’s too small, even considering any margin of error, for congress to consider this as a viable option (at least without further push-back from constituents).

Click the link above to see more. Good insights into how your employees may feel about their plan, as well…

AHCA Pulled

Well, the big plan to replace the Affordable Care Act (ACA) did not happen, so what is an employer to do?

The good news is that you are (hopefully!) already doing it. Keep on keeping on!

The bad news is that all of that relief you were seeking from the AHCA is now gone, so we need to continue onward with the ACA for now.

First, keep up with your reporting and all other ACA requirements. I know the IRS does not require individuals to report their insurance coverage on their tax forms anymore, but you are still required to report to individuals and submit your federal filing on time.

Next, think ahead. The dreaded “Cadillac Tax” is still looming large in 2020. That means that the 40% excise tax for more generous medical benefits is still out there, and you should probably be planning toward falling under the limits in 2020.

What does that mean? Right now we are not so sure. We do know that the prior limits that were originally set to go live in 2018 will be indexed for the future implementation dates. However, we don’t yet know exactly what they will be. The 2018 limits were $10,200 for individual coverage, and $27,500 for family coverage, so using those numbers are the best bet for now.

We were also promised some relief to adverse selection including some allowance for an older/sicker workforce. That sounds like a step in the right direction, but still makes planning for 2020 difficult, at best.

My guess is that the 2020 implementation will be further delayed, as we debate the ongoing ACA (or any replacement) and how we pay for these now entitled benefits. Employers need to stay on top of compliance issues, and not bury heads in the sand. The year 2020 will be here sooner than any of us want.

Stay tuned and thanks for reading.