Company WellnessCompany wellness programs and company wellness consulting

A lot of firms are still missing an opportunity to trim some health plan expenses.

Generic versions of high-cholesterol drug Zocor have been on market for two years now, but a fair share of company pharmacy plans have yet to make the switch.

If your PBM gives generic Zocor favored status on the formulary, now’s a good time to remind employees –

• most individuals  on cholesterol-control meds will get the same therapeutic value from generic Zocor as from the label brand and the more potent – and still patented – Lipitor

•  they are able to save $10 to $50 (or more, depending on your drug plan design) on their co-payment by switching, but

•  they ought to ask their doctor first. People  with cholesterol levels over 200 and/or family histories of  ultra-high cholesterol may  be better off staying on Lipitor.

Reason –  It takes four times the amount of a Zocor-type medication  to equal one dose of Lipitor.

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

As individual states require insurers – and in some cases, companys – 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 businesses anymore.  The pressure has increased on corporations of all sizes.

That’s especially 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 everybody’s health coverage, or else pay an annual fee of $295 per staff member to a state fund.

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

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

There are rumblings in at least 10 states about lawmakers pushing for universal-coverage laws. Several have formed committees to study the Massachusetts law and see if a version can be adjusted to their state.

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

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

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

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

Required procedures

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

• diabetes self-management. Nineteen states require your health plan to cover all the steps workers with diabetes take to control their condition, including nutritional therapy (if prescribed by a physician)

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

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

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

Here is a good resource  for keeping abreast of mandatory coverage trends around the country.  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 robust coverage-mandate study that I’ve ever seen.

Who worries more about medical costs –  lower-paid or higher paid employees?

Answer –  Both groups worry equally about their out-of-pocket health care costs, as reported by a PNC Services Group survey of 1,485 staff members. Almost 52 percent of all respondents – regardless of income -cited the unpredictability of health care expenses as their No. 1 financial-planning concern.

Other common financial-planning fears that affect staff members of all salary levels –

• eldercare. Over half the respondents with children were afraid their offspring could be forced to pay for the parents’ long-term care, and

• financial stability. 47% of mid- to high-salary staff members said they were concerned about sustaining or increasing wealth.

It may be easier than you think to eliminate a major reason workforce sue.

How? Well, roughly 75 percent of worker lawsuits happen because of accidental disconnects between an business’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

Many firms’ written benefits policies and plan documents are like siblings who begin to drift apart as they grow up.

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

As a routine practice, firms should make 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 corporation. Example – Senior level management passes a new rule that staff 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 workforce to explain the change.

Now suppose an staff member drops to part-time status. Are you legally protected if the staff member 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.

A few weeks later, the employee has a major health claim.  The TPA denies it, saying coverage had expired. Reason –  the plan document says “active employees” are covered, but doesn’t specify that the insurer pay claims until the end of the month.

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

2. Coordination of benefits

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

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

1. Make certain there’s a statement that says only the amount actually paid by each plan will be charged against the maximum benefit, and

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

Similarly, when your firm offers domestic partner coverage, make certain there’s a coordination-of-benefits statement for dependent and non-dependent partners.

Three best practices

On an ongoing basis, you are able to cut your lawsuit risk by 75 percent if you –

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

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

• 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 workers must have access to the plan document and be notified in writing of any alterations, including minor ones.