Here we are nearly half way through 2017 and it is about time that we did another retrospective and projection article. While the focus of the benefits industry has definitely remained on drugs, there are emerging trends to watch over the next year.
What Was Big in Benefits Over the Past Twelve Months and What to Expect Over the Next Twelve
We dubbed 2015 The Year of the Drug. We also dubbed 2016 The Year of the Drug. Why not; the risk of specialty drugs impacting plans became less a risk and more a reality last year. A small number of high cost Specialty Drugs (biologics such as Remicade or Enbrel and high-cost meds such as Harvoni or Copaxone) now command a larger percentage of the drug spend than ever before. As 2017 unfolded, we began to see how the carriers were gearing up to address the situation.
We have seen a variation in approaches. We still see prior authorization processes designed to find cheaper alternatives before letting the drug into a plan. We are also seeing Large Amount Pooling and Stop-loss rates climbing to 20% and higher to accommodate the high cost drugs. However, we are also seeing some carriers mandating where a drug is to be purchased; Some carriers have arranged bulk pricing for certain meds while some Pharmacy Benefits Managers/Claims Adjudicators are mandating use of their own mail order pharmacies for Biologics or high cost drugs to avoid a higher co-pay being imposed on the claimants. As a quid-pro-quo, they are offering free management and support to claimants. However, management is something the pharmaceutical manufacturers actually pay for.
Trillium Drug Program
In Ontario, the long-awaited electronic co-ordination between the Trillium Drug Program, CRA and insurers is coming to fruition. In this way, Trillium can quickly confirm a claimant’s income with CRA to determine their deductible as well as the portions paid by the private plan and Trillium (all handled through pharmacies). Employers would be liable for less than they used to be and the claims will be kept out of the carriers large amount pools.
Specialty Drug Program
ASSOCIUM Benefits and MDM Insurance Specialty Drug Program works with the claimant, government and industry programs to find alternative funding from first dollar. We work to divert high cost drugs from plans without impacting the claimant. We are unique in the industry at doing this.
We observed previously that employers were making plan design changes to reduce maximums or combine maximums to keep paramedical and dental claims down. This is an ongoing trend but, interestingly, maximums haven’t progressed much over the past 20 years or more. A $300 to $350 maximum on paramedical services or $1,000 dental maximum is as common now as in the 1990s. However, further erosion due to inflation underscores how the overall value of plans have diminished over the past few decades.
Human Resources and Employee Benefits
There are two emerging trends which will gain more traction in the year to come. Value added Human Resources is becoming more popular. Whether it is HR template documents or full HR/Benefits platforms, carriers and TPAs are starting to understand the idea that ASSOCIUM Principal Adrian Johnson has been promoting for years: that human resources and employee benefits are inextricably linked. This is why ASSOCIUM has been offering complimentary HR management time to our clients and why our updated billing system includes an option to access a Human Resources Information System.
Technology in Benefits
The second trend is technological. While some carriers have been cutting edge for decades, others have had legacy back-end systems that have not been fully modernized to meet current requirements. In recent years, the employee/employer experience has become a priority. Everyone has on-line claiming and apps. However, behind the scenes, enrolment, billing administration, commissions for brokers and other key functions have not kept pace. Some carriers are heading toward a crisis unless investments are made to improve or replace their systems.
Mental Health in the Workplace
Finally, some predictions… Mental health in the workplace and opioids (ostensibly unrelated) will become more top-of mind. Mental health medications such as anti-depressants are the most common medications we see in claims reports. Absenteeism due to stress and mental health issues is on the rise. Opioid drugs are in the news everyday as people are dying of overdoses in ever increasing numbers. As effective pain killers, opioids are often prescribed but carriers are going to step up monitoring of volumes and frequencies as they become more vigilant in finding abuse.
There have been a lot of changes in the benefits industry over a short period of time and much more to come. We will continue to monitor industry trends to help our clients and advisors to implement the right strategies to achieve the best outcomes.
- What Was Big in Group Benefits in 2015 and What to Expect in 2016
- Extended Health: Claims Trend Study 2014
ASSOCIUM Benefits is a very unique employee group benefits provider, focused on supporting benefits advisors and their employer clients. We provide Brokers and Plan Sponsors with a range of solutions from traditional group benefits to more customized, cost and tax effective employee compensation. Let’s connect to find out how we can help.