Your Staff Are Susceptible to Medical Identity Theft

Medical-related identity theft accounted for 43% of all identity theft in the United States in 2020, according to the Identity Theft Resource Center.

And the majority of documents criminals steal are the same ones your employees receive from their group health insurers. If an employee becomes a victim of medical identity theft it can take them years to undo the damage, particularly if their identity is stolen in the process.

That’s why it’s important for any employer with a group health plan to warn its staff about the importance of safeguarding their medical and health insurance information, including plan information and health insurance cards.

Medical identity theft is when someone uses another person’s personal information — like their name, Social Security number, health insurance account number or Medicare number — to see a doctor, get prescription drugs, buy medical devices, submit claims with the victim’s insurance provider, or get other medical care.

If the thief’s health information is mixed with the victim’s, it could affect the medical care the victim is able to receive, or the health insurance benefits they are able to use. It could also hurt their credit.

People often learn they are victims of such fraud when they get a medical bill or a notice from their health insurance company about what will be covered for a procedure they never went in for.

Alert your staff

The most important advice for your staff is that they should take good care of their health insurance card. This includes:

Making sure they get their health insurance card back every time they use it.
Cutting up their old card whenever they receive a new one for a new policy year or other reason. The new one should be put in their wallet.
Reporting a loss immediately to their insurance company if the card is lost or stolen. They can issue a new one and void the old one, so that nobody can use it for doctor’s visits or to purchase medication.

Your employees should also keep their medical records, health insurance records and any other documents with medical information in a safe place. This includes:

Health insurance enrollment forms
Prescriptions
Prescription bottles
Doctor and medical provider billing statements
Explanation of Benefits statements from their health carrier.

Any of the above documents should be shredded when it’s time to replace or discard them.

Also, since thieves will sometimes steal mail from mailboxes, you can recommend that your workers sign up for paperless communications from their insurer.

How to identify fraud

Safeguarding the above information can go a long way towards avoiding medical identity theft, but it can still happen. Your employees should know the warning signs. The Federal Trade Commission recommends being on the lookout for the following:

You get a bill from your doctor for services you didn’t get.
You notice errors in your Explanation of Benefits statement, like services you didn’t get or prescription medications you don’t take.
You get a call from a debt collector about a medical debt you don’t owe.
You review your credit report and see medical debt-collection notices that you don’t recognize.
You get a notice from your health insurance company saying you reached your benefit limit.
You are denied insurance coverage because your medical records show a pre-existing condition you don’t have.

Action steps

If you think someone is using your personal information to see a doctor, get prescription drugs, buy medical devices, submit claims with your insurance provider, or get other medical care, taking the steps below will help you limit the damage:

Thoroughly review your medical records.
Contact your insurance company and each provider and pharmacy where a thief may have used your information, and ask for copies of these medical records. You may have to submit records requests and pay fees to get copies.
Review the records and look for errors, like visits or services you didn’t receive.
Report the errors to each provider, pharmacy and your insurance carrier, with backup documentation that shows the incorrect information and an explanation of why it’s wrong — and ask that they remove the visits and services from your records.

Under federal law, health insurers have 30 days to respond to your requests.

For good measure, your employees should also review their credit reports.

Small-Group Market Remains Stable under the ACA

A new report has concluded that the Affordable Care Act, which took full effect in 2013, did not result in a significant change in the number of employers offering health insurance, although the rate at which small employers offered coverage declined slightly by 2.6 percentage points between 2013 and 2020.

The study by the Urban Institute found that the small-group health insurance market remained relatively stable during those seven years, a period marked by employers continuing to shift more of the premium burden to their employees.

As of 2020, about half of small employers (companies with fewer than 50 employees) offered health insurance to their staff, while 99% of large companies offered health plans.

Employers with fewer than 50 workers are not subject to the ACA’s employer mandate, which requires firms with 50 or more employees to provide affordable health insurance that covers a slate of benefits mandated by the landmark law.

The study found that smaller employers are still less likely to offer health coverage than their larger peers. The share of employers of workers with group health coverage in 2020 was:

81% for companies with 25-99 employees.
56% for companies with 10-24 employees.
30% for companies with fewer than 10 employees.

The study authors wrote that whether small firms offer health insurance coverage varies substantially. “Though many small firms such as restaurants and retail stores primarily employ low-wage and part-time workers, other small firms, such as professional services firms, primarily employ full-time and high-wage workers. Thus, average trends for all small firms may hide differences among them,” they said.

The pandemic effect

Notably, the COVID-19 pandemic had an effect on the number of small employers that offer group health insurance to their staff. Group health plan enrollment among workers in small firms dropped to 7.9 million in 2020, compared to an average of 9.2 million in the prior seven years.

The study authors say the drop was likely due to decreases in employment in small companies at the start of the pandemic.

Meanwhile, the average annual inflation rate for group health premiums remained steady between 2013 and 2020, with average increases of 3.2% in the small-group market and 3.7% in the medium- and large-group markets.

Despite that, most employers continued shifting the premium costs to their employees:

Workers in firms with 1,000 or more employees contributed on average 26% in 2013 for family plans, and the same in 2020.
Workers in firms with between 100 and 999 employees contributed on average 30.5% in 2014 and 32% in 2020.
Workers in companies with fewer than 50 employees paid 29% of premium costs in 2013 for family plans, a rate that had risen to 35% in 2020.
Employees working in firms with fewer than 10 employees have maintained the lowest contribution rates across all firm sizes for both single and family premiums over the past two decades (the report made this assertion, but provided no data).

The present

Despite early concerns that the ACA would result in many small employers dumping coverage for their workers, the changes were muted at best.

In fact, offer rates among small employers has remained steady in recent years, except for the blip in 2020. And during the 10 years prior to the enactment of the ACA, the number of small employers offering coverage had been dwindling rapidly.

Small employers have had to continue offering health benefits to remain competitive in the job market, and that shows no signs of abating now.

How HRAs Can Help Your Employees Pay for Medical Expenses

As rising health insurance premiums and out-of-pocket costs for health care are burdening workers, more employers are looking for ways to help their staff put aside money for those expenses.

While health savings accounts have grown in popularity, you can only offer them to employees who are enrolled in high-deductible health plans. Fortunately, there is another option: a health reimbursement arrangement (HRA).

Employers fund these accounts, which reimburse your staff for qualified medical expenses and, in some cases, insurance premiums.

You can claim a tax deduction for the funds you transfer to your employees’ HRAs, and the funds they withdraw from the accounts to reimburse for medical-related expenses are generally tax-free.

Unlike HSAs and flexible spending accounts, though, HRAs are solely funded by employers. Also, unlike HSAs, they are not portable if an employee moves to a new employer.

In addition, federal regulations dictate what types of health care expenses HRAs can reimburse, and those rules vary depending on the type of HRA you offer.

Depending on the type of HRA, funds may be used to reimburse:

Health insurance premiums,
Vision and dental insurance premiums,
Coinsurance, copays and out-of-pocket medical outlays, and
Qualified medical expenses.

How HRAs work

You decide how much you want to fund your employees’ HRAs. You can fund them in one lump sum. Under federal regulations, you must fund all like employees’ HRAs with the same amount. So, if you have 12 sales reps, each one would have to get an HRA funded with the same amount, but managers and supervisors could receive a different sum.

Employees can only withdraw funds from their account to reimburse them for a legitimate expense they have already paid for. Another option is to provide them with an HRA debit card, which they can use to pay for qualified medical expenses.

Once they have depleted the funds in their HRA for the year, they have to pay for medical expenses out of pocket.

Any HRA money that is unspent by year-end may be rolled over to the following year, although an employer may set a maximum rollover limit that can be carried over from one year to the next.

Expenses HRAs can’t cover:

Maternity clothes,
Gym membership fees,
Marriage counseling, and
Childcare.

Rules differ from one HRA to another and there are a number of different HRAs:

Integrated HRA — This type of HRA requires employees to also be covered by a group major medical plan. It generally reimburses out-of-pocket medical expenses.

Dental/vision HRA — This type of HRA limits reimbursements to only dental and/or vision expenses.

Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) — This type of HRA is only available to employers that have fewer than 50 employees. The maximum annual reimbursement amount is $5,450 for self-only employees ($454.16 per month) and $11,050 for employees with a family ($920.83 per month).

QSEHRAs are typically used to (legally) allow employers to reimburse their workers for individual health insurance premiums, in addition to other out-of-pocket expenses being reimbursed.

Individual Coverage HRA (ICHRA) — This type of HRA is available to employers of all sizes, and employees must be covered by an individual health insurance plan to be eligible.

The primary intent of the ICHRA is to allow for the reimbursement of individual health insurance premiums, but other out-of-pocket expenses, such as copays and deductibles, can also be reimbursed.

ICHRAs have only been around since January 2020 thanks to a law that allowed HRA funds to be used to pay for individual health insurance premiums.

Employees can use these HRAs to buy their own comprehensive individual health insurance with pretax dollars either on or off the Affordable Care Act’s health insurance marketplace.

Excepted Benefit HRA (EBHRA) — This HRA will allow for the reimbursement of COBRA premiums, short-term medical plan premiums, dental and vision expenses. The annual reimbursement limit for an EBHRA is $1,800 (adjusted for inflation).

The takeaway

There are a variety of HRAs that let you help your employees pay for their health care expenses. These valuable savings vehicles give both your organization and your staff a tax break on the funds, and they are another tool in helping you retain and attract talent.

In fact, you can even pair an HRA with an HSA, as long as the HRA is HSA-qualified.

In these instances, you would need to offer a “limited-purpose HRA” that only reimburses employees for expenses that are exempt from the HSA deductible requirement.

These expenses are:

Health insurance premiums
Long-term care premiums
Dental expenses
Vision expenses.

Health Insurance Considerations for Workers Who Move Out of State

One fallout from the COVID-19 pandemic has been an increase in the number of Americans who are working from home permanently.

With so many people being freed from the yokes of the office, many have chosen to move to other states for a variety of lifestyle or cost reasons. But while these arrangements can be a boon for workers, they can make it difficult when it comes to your workers’ group health insurance.

One of the main stumbling blocks is that most group plans are local or regional at best, as they contract with providers and hospitals in the area where an employer is located.

For employers that suddenly have staff now working far afield from their headquarters, securing health insurance coverage in other states can create headaches, particularly if they have contracted with a local or regional insurer.

And to make matters worse, some employees who are working remotely don’t bother telling their employers they are moving, which can render their coverage obsolete if they locate to a place out of their insurance policy’s coverage area.

Remote employees who fail to inform their employers when they relocate could suddenly find themselves in an area with no access to their insurer’s preferred network and they could have their claims denied if they seek out medical care. To avoid this issue, consider instituting a policy that they have to inform you of any move to another state.

What you can do

If all of your staff are working in a single location, city or state, there are usually plenty of options for group health insurance. But if you now have people working out of state, you have choices to make for how to get them covered.

Many national insurance companies don’t have the same type of network in every state, and even among those that do, health care providers may not offer the most cost-efficient networks for out-of-state employees.

Some carriers offer national group health plans that are available to employees in most states. If you now find yourself with employees who are scattered around the country, a national plan helps you avoid having to comply with different state regulations and finding carriers with good networks in other states.

In these types of plans, all of the employees in your organization receive the same group benefits regardless of where they live and work, and they all have access to the same quality coverage.

But there are just a handful of carriers that offer this type of group coverage. Talk to us if you want to know more.

One option is to find local coverage for employees in specific locations, but if you don’t have many employees in that region, you may not be able to find preferable rates for their group coverage.

If that is too difficult, you can set up a taxable stipend that your employees could use to purchase their own health insurance. A stipend is a fixed amount of money paid to an employee in addition to their basic salary, designed to cover whatever extra costs the employer allows, such as health insurance, internet and other expenses.

The takeaway

As more U.S. companies have workforces spread across many states, health insurance needs to be on the top of the list of considerations.

The health insurance you choose will depend largely on your budget and coverage preferences, and what is available to your staff in the state they are working in.

What You Need to Know About COVID Test Kit Rules for Group Health Plans

Starting Jan. 15, the nation’s health insurers have been required to cover the cost of up to eight at-home rapid COVID-19 tests per month for their health plan enrollees.

Insurers are taking different approaches to the mandate and, as an employer, you should communicate with your covered staff about this new benefit, how it works and other advice.

According to frequently asked questions posted by the Department of Labor, coverage for over-the-counter test kits must be covered by insurers without cost-sharing and without a doctor’s order or prescription. It laid out a series of rules insurers and health plans must follow. They:

May require enrollees to submit reimbursement claims for OTC COVID-19 tests (the agency, however, “strongly encourages” plans to reimburse pharmacies directly instead).
Must reimburse plan enrollees for tests they purchase outside of their preferred network up to $12 per test if they also offer coverage for OTC tests through a pharmacy network. Health plans are authorized to provide a more generous reimbursement from tests purchased through a non-preferred provider.
Can limit the number of OTC tests covered without cost-sharing, as long as they cover eight per month per enrollee with no cost-sharing. That means a family of three on a family plan can be reimbursed for up to 24 tests per month.
Cannot limit the number of covered tests if they are ordered by a doctor after a clinical assessment.
Can require enrollees to attest that OTC tests they are reimbursed for are for personal use and not for work, that they are not being reimbursed for the tests by other sources and that they won’t resell the tests.
Can require that enrollees provide receipts as proof of purchase.

Action items

Check that it has pharmacy and retailer networks in place where covered individuals can obtain the OTC tests.
Check if it has a direct-to-consumer shipping program for kits.
Check if it has systems in place to handle claims and for reimbursing either participants or participating pharmacies that have point-of-sale test kits available.
Ask the insurer whether it has any purchase or reimbursement limits if tests are purchased at a non-network pharmacy or retailer.

Once you have those details in hand, hold a meeting with your staff covering the following:

An explanation of the new benefit and how their insurer will reimburse or pay for the kits.
Go over the claims and reimbursement process if they pay out of pocket at a non-participating pharmacy.
Provide a list of network pharmacies and retailers that will offer point-of-sale test kits that the insurer pays for direct. Also provide information on any direct-to-consumer purchase options.
Tell them about any reimbursement limits if they purchase from non-preferred pharmacies, or other limits (like the eight tests per month limit).
Advise your staff to keep receipts for any at-home test kits they have purchased since Jan. 15. They should also save the boxes the test kits come in as some plans may require them as proof of purchase.

Long-Haul COVID Can Be Covered Under ADA

The Equal Employment Opportunity Commission has issued guidance stating that employees suffering from “long COVID-19” may be protected under workplace disability discrimination statutes.

The guidance states that someone suffering from impairments resulting from long-haul COVID-19 symptoms can be considered “disabled” under the Americans with Disabilities Act and entitled to the same treatment as other disabled workers. But not in every case.

The EEOC emphasized that long-haul COVID symptoms can vary greatly from person to person and that eligibility would have to be determined on a case-by-case basis.

Employers should read the guidance, posted on the EEOC’s website on Dec. 14, to ensure they stay on the right side of the law if they are confronted with a worker who is battling COVID-19 symptoms for more than a few weeks and they ask for special accommodation under the ADA.

According to the guidance, a person infected with COVID-19 who is asymptomatic “or who has mild symptoms similar to those of the common cold or flu that resolve in a matter of weeks — with no other consequences — will not have an actual disability within the meaning of the ADA.”

But for those who have COVID-19 symptoms lasting more than a few weeks, and depending on their specific symptoms, a worker may have a “disability” if the illness is affecting them in any of the following ways:

Physical or mental impairment — The EEOC states that COVID-19 is a physiological condition affecting one or more body systems, which would be considered a disability under the ADA.

Substantially limiting a major life activity — “Major life activities” include both major bodily functions, such as respiratory, lung or heart function, and major activities, such as walking or concentrating. COVID-19 has been known to cause these issues. An impairment need only substantially limit one major bodily function or other major life activity to be substantially limiting.

Examples of COVID-19 cases that may be considered a disability under the ADA include:

An employee who experiences ongoing but intermittent multiple-day headaches, dizziness, brain fog and difficulty remembering or concentrating, which their doctor attributes to the coronavirus.
Someone who received supplemental oxygen for breathing difficulties during initial stages of treatment and continues to have shortness of breath, associated fatigue and other virus-related effects that last for several months.
Someone with heart palpitations, chest pain, shortness of breath and related effects due to the virus that last for several months.

What to do

As a result of this guidance, an employee experiencing long-haul COVID with symptoms that could be considered a disability may ask for reasonable accommodation for work. To determine if the employee is eligible, the employer and the employee must enter into an interactive process.

The employer can ask the worker to provide backup documentation about their disability or need for reasonable accommodation, such as notes from doctors outlining restrictions. The employer can also request that the employee sign a limited release allowing the employer to contact the employee’s health care provider directly.

If the worker doesn’t cooperate in providing the information, the employer can deny the accommodation request.

Health Expenses a Major Source of Mental Health Issues for U.S. Workers

A new study has found that more than one in four U.S. workers say expensive medical bills are having a major impact on their mental health.

Mental health issues have come to the fore during the COVID-19 pandemic, spurring employers to expect their group health plans to do more for their workers in this area.

The report on the study by the health care consulting company Centivo urges employers to consider new ways to reduce the medical financial burden some of their employees may be experiencing.

Mental health is already on the radar of employers:

Large businesses reported that addressing their workers’ mental and emotional health would be a top priority over the next three to five years, according to a 2021 study by Mercer Consulting.
Nearly 40% of employers surveyed by the Kaiser Family Foundation in November 2021 said that they had made changes to their mental health and substance abuse benefits since the pandemic started.

The Centivo report found that:

S. workers are increasingly having difficulties in paying for health care, particularly due to high copays, deductibles and other health plan cost-sharing elements.
Health care affordability also correlates to sacrifices in care, including mental health care. Twenty percent of study participants who experienced major medical expenses said they skipped or delayed needed mental health care or counseling due to cost concerns.
Medical expenses are a significant cause of mental health and well-being issues for both individuals and families.

Stress drivers

The report states that the findings raise concerns about whether some employees can even afford to use their health plans. It stressed two main points:

High deductibles — The report found one of the main drivers of stress was high deductibles and other out-of-pocket costs.

It found that only 10% of those surveyed had a health plan with a zero deductible.

More troubling was that 40% of those with deductibles ranging from $1,000 to $3,999 did not have enough money saved to cover a major medical expense.

Savings trumps more features — The study found that group health plan enrollees’ top priority in their health plans is to save money, both on the front end in premiums as well as the back end in out-of-pocket costs.

Respondents said they would take saving money over expanded features, even if they had fewer choices in their health care. In fact, nearly three out of four respondents said they would trade off being able to see their current provider or specialist for a plan that is 10 to 30% less expensive than their current one.

The takeaway

One interesting finding in the study was the less that employees saved for health care, the more likely they were to report that a major medical expense had affected their mental health. Only those that reported more than $10,000 in savings reported low levels of mental health issues.

That highlights the need for employees to set aside funds for health care expenses through health savings accounts, flexible spending accounts and health reimbursement accounts. These are funded with deductions from the employees’ salaries before taxes are taken out.

Centivo’s chief medical officer, Dr. Wayne Jenkins, said that employers can help their workers reduce their overall medical outlays by working with their employee benefits brokers to:

Eliminate or reduce deductibles,
Engage with health insurers to provide simple and predictable copays, and
Make primary care visits free (which helps physicians diagnose serious ailments earlier, resulting in lower medical costs over time).

Also, businesses may consider “skinny plans,” which typically have fewer provider choices in exchange for lower premiums and out-of-pocket costs.

IRS to Get Tough on ACA Reporting Form Mistakes

The time when the IRS offers relief from financial penalties to employers that make errors on their group health insurance reporting forms has come to an end.

Starting this year, the IRS will no longer offer protection against reporting error penalties when “applicable large employers” (ALEs) file their Forms 1094-C and 1095-C and the employer has made a good-faith effort to comply. The change starting with the 2021 tax reporting year means that employers can face steep penalties for mistakes on their forms.

IRS Code requires employers who are obligated under the Affordable Care Act to offer their employees health insurance benefits to also file these forms annually. But since employers were required to first start filing these forms in 2018, the IRS has been lenient against those that make good-faith errors on the forms.

Typically, when the IRS identifies instances when an employer may be liable for employer shared-responsibility penalties based on information provided on the forms, the agency will send the employer a Letter 226J. These letters will identify an employee who may have received health insurance from their employer but is also receiving premium tax credits from a policy on an exchange.

To date, the IRS has allowed ALEs to ask for corrections on their filed forms, or to reduce the penalty without imposing reporting error penalties as well. That comes to an end this year when employers file their 2021 forms.

Issues to bear in mind

Here are a few issues businesses need to be aware of:

Starting this year, the IRS will no longer offer good-faith relief from penalties for incomplete or incorrect forms.
For the 2021 reporting year, these penalties are $280 per form that must be furnished to employees and $280 per form filed with the IRS.
According to reports, the IRS is especially focused on employers who may not be satisfying ACA requirements that all health plans they offer their staff must be “affordable,” which means costing no more than 9.83% of the employee’s household income for the 2021 tax year
Thanks to the American Rescue Plan Act, more Americans qualified for premium tax credits on ACA exchanges and the act drastically increased those tax credits to the point where some people were paying $1 a month for coverage. Employers could face reporting problems if any of their staff dropped their employer coverage and got coverage on an exchange.

Important dates

Jan. 31, 2022: Deadline for furnishing 1095-C forms to employees.

Feb. 28, 2022: Deadline to file paper 1094-C and 1095-C forms with the IRS (only for employers with fewer than 250 employees).

March 31, 2022: Deadline to file forms electronically with the IRS.

Employers Curtail Health Cost-Shifting to Workers

One of the health insurance trends that went largely unnoticed in 2021 was that employers halted cost-shifting to their employees by reducing or holding steady workers’ deductibles and other cost-sharing.

That’s according to a new study by consulting firm Mercer, which points out that concerns about health care affordability for lower-wage workers, coupled with a difficult hiring environment and the need to attract and retain talent, has prompted many firms to not pass on cost-sharing in the form of higher deductibles and out-of-pocket maximums.

Additionally, despite average group health premiums growing 6.3% in 2021, employers did not increase employee’s share of premiums significantly.

The trend is the result of the ongoing COVID-19 pandemic and a hot labor market, in which most companies are struggling to find staff as well as keep current employees from seeking out new opportunities. Companies are also adding extra benefits for workers and focusing on the overall health of their staff, who are demanding improved access to mental health and substance abuse benefits, and more.

Mercer found that:

Among small employers (50-499 employees), the median deductible for individual coverage in a preferred provider organization dropped to $900 in 2021 from $1,000 the year prior.
Among large employers (500 or more workers), the median PPO deductible for individual coverage remained steady at $750.
Among large employers, the median individual deductible in high-deductible health plans dropped to $1,850 in 2021 from $2,000 in 2020.
Among small employers, the median individual deductible in HDHPs stayed steady at $2,800.
The average employee share of premiums for employees enrolled in an individual PPO plan rose just $7 to $167 in 2021, and $12 for family coverage ($590 to $602).

While PPOs are still the most popular type of group health plan in the country, the percentage of workers enrolled in HDHPs continues to grow, hitting 40% in 2021, up from 38% in 2020.

The other shoe

The pandemic forced a great deal of suffering on a large swath of Americans, creating a number of personal challenges to their mental and emotional health as well as help in dealing with substance abuse problems that also increased during the pandemic.

As a result, employers have been increasing access to mental health and substance abuse services, with 74% of large businesses rating improved access as important or very important in the Mercer survey. The number is even higher for employers with 20,000 or more workers, with 86% of them rating access to these services as the most important benefits issue for them.

“In today’s extremely tight labor market, generous health benefits can help tip the scales in attracting and retaining staff,” says Tracy Watts, national leader for U.S. Health Policy at Mercer. “Beyond that, in the wake of the pandemic many employers committed to help end health disparities, and ensuring care is affordable for their full workforce is an important part of that.”

Managing costs with no cost-shifting

Instead of cost-shifting, many employers are absorbing the higher premiums, which have averaged 6.3% in 2021, according to the study. Mercer found that 60% of employers aren’t making plan changes of any type in order to reduce cost increases.

Employers are instead looking at ways to optimize their health benefits with quality initiatives, increased use of virtual care and personalizing benefits.

Firms are also tapping into ways to control drug costs for their employees. This includes more closely evaluating their spending on expensive specialty drugs, such as biologics that are injected or infused. Employers are encouraging the use of biosimilars as lower-cost, clinically effective options.

Happy Holidays!

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