The American healthcare system is facing numerous challenges and undergoing significant changes. One of the key areas of concern is the rising cost of health care for employers. Recent reports indicate that employers should expect higher health care costs in 2024, which are projected to outpace inflation [c8f534bf]. Higher medical costs for employer-sponsored plans are attributed to advances in treatments, health care consolidation trends, specialty drug use, and the introduction of the GLP-1 class of weight loss drugs. These factors contribute to the overall increase in health care expenses for employers.
In addition to the rising costs, employers are also dealing with legal issues related to prescription drug benefits plans. Johnson & Johnson is currently facing a lawsuit filed by an employee over its prescription drug benefits plan [c8f534bf]. This highlights the complexities and challenges employers face in managing and providing comprehensive health care coverage for their employees. Employer-sponsored health insurance covers a significant portion of the U.S. population, and two recent class action lawsuits have made employers nervous about their management of health benefits. The lawsuits cited the breaching of fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA) [433bc358]. More lawsuits are expected to emerge applying ERISA to employers' management of health benefits. The Consolidated Appropriation Act of 2021 provides even more channels for litigation against employers for breaching fiduciary duties under ERISA. The legal risks are forcing employers to reconsider their hands-off approach to purchasing healthcare and consider direct contracting with providers. Cash prices are often lower than insurer negotiated prices. Large employers like Walmart and Amazon are directly contracting with hospitals and health systems. Price transparency legislation and policy changes are needed to facilitate employer-provider direct contracting and stimulate price competition. Innovative efforts from employers and legislative actions are needed to fulfill employers' fiduciary duties and mitigate litigation risks [433bc358].
Despite the challenges, there are promising developments in the field of health care. Amgen has introduced a new weight-loss drug that shows promise in addressing the growing issue of obesity [c8f534bf]. This innovation provides hope for employers and individuals seeking effective solutions for weight management.
The issue of health care costs extends beyond the employer-sponsored plans. Medicare, the government program that provides health insurance for Americans aged 65 and older, has initiated drug price negotiations with top drugmakers. The Centers for Medicare and Medicaid Services (CMS) have sent initial offers to these companies, marking a significant step in addressing the high cost of medications [c8f534bf]. These negotiations aim to strike a balance between ensuring affordable access to life-saving medications and supporting research and development in the pharmaceutical industry.
Hospitals are also responding to changes in Medicare payment rules. They are pushing back against new Medicare 'site-neutral payment' rules, which aim to reduce disparities in payment rates between different types of healthcare facilities. This pushback highlights the complexities and challenges of implementing payment reforms in the healthcare industry [c8f534bf].
A recent study has identified three key trends that are expected to shape health benefits and costs. These trends include advances in telehealth, the rise of virtual primary care, and the increasing importance of mental health services. Understanding these trends is crucial for employers and policymakers in order to navigate the evolving landscape of health care and make informed decisions [c8f534bf].
The healthcare industry is also grappling with the aftermath of a cyberattack on UnitedHealth's Change Healthcare. This attack has had a significant impact on the U.S. health system, highlighting the vulnerabilities and risks associated with the digitization of health care data [c8f534bf].
In the realm of retirement benefits, the SECURE 2.0 law offers tax credits to small businesses to provide retirement benefits. This law aims to incentivize small businesses to offer retirement plans to their employees, promoting financial security and well-being [c8f534bf].
Building a culture of appreciation in the workplace is another important aspect of the evolving healthcare landscape. Consistent effort and passion from company leaders are necessary to create a positive work environment that values and appreciates employees [c8f534bf].
More than half of full-time employed adults said their finances were the top cause of stress in their lives at the start of 2023. The annual inflation rate was 3.4 percent, higher than the 2 percent target. CEOs reported that their companies had begun cost-cutting measures, including layoffs. The economy is projected to grow by just 1.3 percent in 2024, and the unemployment rate has risen to 4.2 percent. Benefits like comprehensive health coverage, matched retirement fund contributions, and emergency savings programs can support employees through turbulent economic conditions. Financial wellness is the most requested employee benefit, and on-demand pay enables employees to access their earned wages at any time. On-demand pay has proven links to job satisfaction and can assist with recruitment and staff retention. Danone, a food and beverage company, implemented Dayforce Wallet, an on-demand pay solution, and saw significant time and cost savings. Dayforce Wallet allows employees to access their pay in real-time and can be used anywhere Mastercard is accepted. It boosts employee financial wellness, reduces staff turnover rates, and plays a central part in an attractive benefits package for new recruits.
Enhanced HIPAA privacy protections for protected health information (PHI) relating to individuals' reproductive health care will take effect on June 25, 2024. The new rule issued by the Department of Health and Human Services Office of Civil Rights (OCR) modifies certain privacy and security protections provided by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) as they apply to the use and disclosure of PHI related to reproductive health care. Employer-sponsored group health plans and other covered entities have until December 22, 2024, to comply with the new rule, with updates to their HIPAA Notice of Privacy Practices due by February 16, 2026. The rule defines 'reproductive health care' broadly to include contraception, preconception screening and counseling, pregnancy management, fertility and infertility diagnosis and treatment, and other related care. The rule prohibits the use or disclosure of PHI relating to reproductive health care for certain purposes, such as conducting investigations or imposing liability on individuals seeking or providing reproductive health care. However, the rule does not protect unlawful reproductive health care, and group health plans may refuse to disclose PHI if it would be protected, required, or authorized by federal law. Group health plans must obtain a signed attestation for certain requests for PHI relating to reproductive health care, and failure to comply with the rule may result in criminal or civil penalties. Group health plans should update their policies and procedures, business associate agreements, and Notice of Privacy Practices to ensure compliance with the new rule.