More than 38,000 companies of all sizes across the USA operate self-funded, group health benefit plans. A 2015 analysis released by Kaiser Family Foundation has projected that 26% of employers offering health care benefits could trigger the Cadillac tax in 2018 unless they make changes to their plans. For small firms with three to 199 workers, Kaiser’s analysis showed that 25% will trigger the Cadillac tax in 2018. Twenty-nine percent will reach the threshold in 2023 and 41% will in 2028.
According to the Kaiser Family Foundation, the number of employers likely to trigger the 40% excise tax on high-cost health plans will grow to 30% in 2023 and 42% in 2028 if plans are left unchanged and health benefit costs rise at expected rates.
Under the heath care reform law, the 40% excise tax, which is to be imposed annually starting in 2018,applies to the portion of group health care plan premiums exceeding $10,200 for single coverage and $27,500 for family coverage.
Under the health care reform law, the excise tax trigger will be hiked annually to match the increase in the consumer price index. Kaiser’s estimates, which are based on its annual survey of about 2,000 employers with three or more employees, focus on the threshold for single coverage.
The estimates take into account health insurance premium costs plus employer contributions to health savings accounts and health reimbursement arrangements, as well as employee contributions to flexible spending accounts, all of which are included in the total cost of the health plan, according to the Internal Revenue Service.
For employers with 200 or more workers, Kaiser’s estimates increase significantly, as larger employers are more likely to offer Flexible Spending Accounts (FSAs) that allow employees to set aside money on a pre-tax basis to pay for eligible healthcare and dependent care expenses. FSAs are counted towards the aggregate pro-rata expense per plan participant so larger employers may hit the threshold quicker than small firms, because they add to the pro-rata plan participant cost of operating the health plan. According to the analysis, 46% of large firms will hit the Cadillac tax threshold in 2018, 56% will reach it in 2023, and 68% are likely to trigger the tax in 2028.
Mercury Health Travel programs can help employers mitigate the risks of reaching that 40% Cadillac excise tax. We develop, implement and manage the operations of employer health travel and wellness cost containment for self-funded health benefit plans operated under ERISA or TAFT-HARTLEY regulations.
Health travel benefit programs for employers are complicated and fraught with risk and hurdles that must be successfully navigated.
Plan Administrators hold fiduciary liability for the decisions they make and coverage and benefit plan operations decided on behalf of the plan.
While a one-off case of medical travel is has many moving parts to organize so that the plan participant is able to travel for care, no company creates a more formalized group health benefit program for medical travel without lots of planning, preparation, and organization. If you are ready to look into medical travel as an option, we can help you.
I’ve been working on the final touches for my next book manuscript that will be published next year by Informa’s CRC-Productivity Press. The information contained in the book comes from first-hand experience in working with medical tourism case management, managed care, ERISA and TAFT-HARTLEY, and self-insured government health benefit programs for state and municipal workers and retirees.
What I’ve come to realize about medical and wellness travel in the group health setting is that few employers or insurers are prepared to dive right in. Even if they believe open to the concept and ready to explore the possibility, their underwriters, reinsurers and TPAs are not. Like a Frank Sinatra song, “you can’t have one without the other.”
Here’s a high-level checklist of some of the details you’ll need to consider and plan for. Our specialized advisers help employer-sponsored group health benefit plans with some or all of these issues depending on their specific needs and the program they envisage for their company and plan participants.
- Health travel benefit design
- Definitions for plan terms, medical necessity, experimental, investigational
- HRA/HSA Plan Integration, Special Limited Expense, reimbursement only programs
- SPD drafting /compliance
- Laser claim cost containment strategies
- Cadillac-tax threshold risk mitigation
- Complications risk management
- Assistance with specialized underwriting
- Captive reinsurance formation
International and Domestic Provider Network Development
- Identification of specific network objectives and preference
- Short-list recommendations to create a narrow network of approved providers
- Plan administrator fiduciary risk mitigation:
- detailed provider site inspection criteria and scoring
- physician/allied health credentialing and privileging using NCQA ACVO primary source verification practices and procedures by a NAMS-certified medical staffing specialist
- Site visit arrangement and accompaniment to short-listed providers
- Assistance with rate negotiations and contract terms and contract template
- Bundled case rate development and negotiation
- Continuity of care coordination
- Network applicable for traveling employees, expats & dependents, travel injury & assistance, and elective health & wellness incentive travel
Program Operations Management Intranet
- Bespoke private network portal (can be role-based and plan specific)
- Explains the entire program, benefits, costs, responsibilities, contact points, appeal process, etc.
- Plan participants can learn about provider and destinations available to them
- Seamless integration with healthConnect™, the only cloud-based health travel operations platform up to the task.
- Toll free number (from USA) to speak with coordinators
Bespoke intranet portal enables plan participants to:
- request assistance from live operator
- review destinations and providers
- online application for pre-authorization / pre-certification approval
- online application for limited-expense HRA program, as applicable
- request assistance to plan appropriate health travel arrangements through specially-trained, medical travel agents who will follow your corporate travel policies and apply your negotiated travel program discounts
- upload their medical records to a HIPAA-compliant repository
- request a preliminary online live-consultation with short-listed providers chosen by the participant without cost or obligation
Claims Management Portal
- Limited-scope TPA that segregates medical travel cases (and the proprietary rate negotiations) from your regular TPA or ASO provider for better control and cleaner processing.
- International and domestic bundled-claims and FFS claims processing
- Timely, accurate, payment settlement to all providers, domestic and international
- Assistance with any claim or price dispute resolution that may arise
- Professional clinical case management, continuity of care facilitation and monitoring by registered nurse case managers
- Outcomes monitoring and measurement, statistical reporting
- Cost containment analysis and reporting
- Provider contract renegotitation assistance
End-to-end Medical Travel Coordination
- Appointment setting
- Arrival coordination
- Ground transfers
- Hotel check-in on arrival
- Transfers to all appointments and return
- Hospital or clinic check-in
- Pre-departure case management conference (physician-to-physician handoff)
- Prescription medication management coordination
- Departure sendoff coordination from care destination
- Arrival coordination back at home
- Case management to ensure appropriateness of home environment, post-operative
- Oversight of care continuity upon return to hometown
- Patient satisfaction measurement using CAHPS-model survey tool
- Clinical outcomes measurement for up to 36 months
Co-operative Managed Services Outsourcing Makes Sense
For many employers, this is far more complicated and costly than expected, and it doesn’t make business sense for an employer to do all this for one single company for a few reasons:
First, all this infrastructure should be set in place before the first case commences. Without knowing what benefit program uptake will be, this is also the part that stymies the underwriters and reinsurers the most. Share the cost of startup infrastructure with other employers while keeping your narrow network, proprietary rates and program policies and procedures confidential. Think if it the same way you lease space like a on a shared hosting server that hosts your private information on your website.
This infrastructure is far more robust than any individual medical tourism facilitator can offer, and it is designed to meet the enterprise needs of a company with scalable architecture and staff deployment to use as much or as little ongoing support as you need without building from the ground up.
Second, the sunk cost to prepare these bullet point items is extremely high if the savings opportunity doesn’t offset the cost. The savings opportunity transitions from dream to reality only when plan participants use the cost savings opportunity. If they don’t understand it or don’t trust it, or they aren’t interested in traveling, or the pilot program focuses on the cases other than those the plan participants require, savings can’t be realized. To mitigate this risk, we work with your predictive modeling specialists and statistical reports to inform about which procedures and cases to choose for your pilot program. (Nobody tries this without first kick-starting a pilot program to iron out the kinks in each program). These predictive models are also what we share with the medical travel providers to substantiate estimates of case volumes to negotiate alternative rates from their already attractive one-off case prices (a little-known tip we bring to the process from our work in managed care, disintermediation, narrow network development and domestic provider-to-employer direct contracting.)
I published a white paper on medical travel for group health. It would be my pleasure to share it with you upon request. Simple email me at the address provided in my “About” box.
I am ready to answer any questions you may have about the information above without cost or obligation.