Download 4th Quarter 2016 - Segal Consulting

Trends
Health Plan News at a Glance for the Public Sector
Fourth Quarter 2016
Learn more by clicking on the blue text below.
Key Statistics
The Affordable Care Act (ACA) and Other Compliance News
Trend and CPI | Health benefit plan cost trend rates for
2016 are projected to increase for most medical plan options
and increase substantially for prescription drug coverage.
Mental Health Parity and Addiction Equity Act (MHPAEA) Guidance | The Departments of Labor and Health and Human Services
(HHS) have warned employers that certain plan provisions could trigger non-compliance with the MHPAEA which requires parity
between medical/surgical benefits and mental health/substance use disorder benefits.
Guidance on Wellness Programs | Two final rules affecting wellness programs were issued by the Equal Employment Opportunity
Commission. The first rule, which governs wellness programs established by entities subject to the American with Disabilities Act,
will affect how employers and group health plans design wellness programs. The second rule implements the Genetic Information
Nondiscrimination Act, which permits plan sponsors to offer limited financial incentives to a spouse who provides information about
his or her own medical condition.
12%
10
8
Transgender Health Coverage Guidance | A final rule that will require many group health plans and employers to cover health care
services provided to transgender individuals was published by HHS.
6
4
Segal Health Care Reform Resources | The Health Care Reform Resources page on Segal’s website links to all publications and
other resources related to the ACA.
2
0
2013
2014
2015
2016
2017
Health Plan Cost Trend, 2013-2015 Actual and 2016-2017 Projected
Medical PPO
Rx
Dental DPO
Consumer Price Index (CPI) through August 2016
Medical
Rx
CPI-U
Sources: 2017 Segal Health Plan Cost Trend Survey and Bureau of Labor
Statistics for CPI.
2017 Segal Health Plan Cost Trend Survey | Employers
can expect health benefit plan cost trend rates to be similar
to prior levels for most medical plan options. However,
carved-out prescription drug projected cost trends for active
populations continue to increase at double-digit rates
(11.6 percent).
Mental health disorders topped the list of the costliest
conditions ($220 billion in 2014, the most recent data
available), according to Health Affairs. Also, cost is shifting
from state/local governments or individuals (out of pocket)
to Medicaid, Medicare and private insurance (private
insurance spending for mental health increased from 8
percent in 1986 to 28 percent in 2014).
Opioid prescriptions increased to 207 million in 2013,
from 76 million in 1991, according to QuintilesIMS Health
National Prescription Drug Audit.
The Vendor Marketplace
Aetna Inc. announced that it would withdraw from 11 out of 15 states where it offers health plans through an ACA Exchange.
Walgreens will combine its specialty drug and mail-order business with Prime Therapeutics to capture a greater share of the
prescription drug market. Walgreens has also announced that it will need to sell more than 500 stores in order to win regulatory
approval for its planned acquisition of RiteAid.
The Department of Justice filed a lawsuit against the proposed mergers of Anthem-Cigna and Aetna-Humana, claiming that such
mergers would negatively affect consumers by reducing competition and compelling them to pay higher premiums.
Mylan introduced a generic version of its EpiPen (which is used to treat life-threatening allergy attacks), in response to public
criticism over the 600 percent cost increase.
What Employers Are Doing to Manage Plans: Selected Strategies
With the increase of mental health spending and the cost shift to private insurance, employers should consider cost-control
strategies permitted by the MHPAEA, including implementing evidence-based medical-management tools and addressing any spike
in out-of-network utilization. Employers should work with carriers to employ care coordination/integration programs that bridge
communication between behavioral health and medical programs, providers and systems.
With the final rules affecting wellness programs, employers should determine whether their wellness program meets all legal
requirements under the Health Insurance Portability and Accountability Act (HIPAA), the ADA and GINA (which includes a
reasonable design and offering an alternative). Employers should also review required notices and authorizations.
With an increase in opioid abuse, employers should consider requesting an assessment or high-utilization report from their PBM to
identify potential fraud or abuse, consider implementing utilization-management programs for abusive drugs to ensure appropriate
use/quantities and consider adding an enhanced fraud and abuse program that uses data analytics to identify abuse.
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To discuss the implications for your plan, contact your Segal consultant or get in touch via our website.
Copyright © 2016 by The Segal Group, Inc. All rights reserved.