The Inflation Reduction Act (IRA) passed on August 16 of this year could have some effect on employers that companies should keep in mind in the coming years. Areas affected include prescription drug costs, insulin uses, expansion of ACA subsidies, individual coverage health reimbursement arrangements (ICHRAs), and possibly more IRS audits of retirement plans.
First, the Inflation Reduction Act is attempting to reduce the cost of prescription medications by allowing CMS to negotiate lower costs with pharmaceutical companies, including capping insulin costs under Medicare Part B. This could result in higher prescription drug costs for private plans to make up for lower Medicare and Medicaid prices.
The IRA will allow high-deductible health plans to cover a broader range of uses for insulin, without the employee having to meet the deductible and regardless if the employee has been diagnosed with diabetes.
An extension of ACA subsidies for purchasers who make up to 400% of the federal poverty limit could make ACA plans more appealing to employees. An increase in premium tax credits could make employers a target for the IRS which monitors organizations that don’t comply with the ACA’s employer-shared mandate. This could lead to an increase in penalties for employers.
The IRA could make ICHRA’s more appealing to employers in the long term. Employers could eliminate group insurance plans and meet the ACA’s coverage requirement by funding ICHRAs.
Finally, more money for IRS enforcement could lead to new audits of retirement plans and employers who sponsor those plans.
Most employers agree that offering data protection as a benefit would appeal to their employees, however, only 35% of companies offer data protection. Personal breaches in data can spill over into the workplace with devices used for work. Since the start of remote work, 50% of employers report spending more time and resources on data risk and safety than before.
A benefit such as this will protect the employee and the employer and relieve the burden on their IT department staff.
Inflation has increased the Consumer Price Index by 8.6% in May from the same time in 2021. This was the biggest 12-month CPI since 1981. As inflation increases the price of everything, there is less money for people to pay co-pays and deductibles. This can cause them to delay medical care which can make chronic diseases such as diabetes, depression, or high blood pressure worse. Read more on our website.
Insulin prices for diabetes keep rising, and some people are rationing their doses to make their medications last longer. They may also delay going to the doctor for regular blood sugar tests. Those with depression often require testing in addition to medications which can be expensive. A delay in care for depression can lead to a lack of taking care of other chronic conditions. Finally, high blood pressure affects 47% of Americans but often has no symptoms. Testing before reaching a deductible can be pricey and may deter people from getting the testing needed for a diagnosis. If left untreated, high blood pressure can lead to heart attacks, strokes, and kidney disease.
Wellness programs with incentives to seek preventative care can help employees stay on top of their chronic issues. Virtual visits or telehealth may also be a cheaper option for office visits. Some payment gateways such as interest-free credit cards can also help people access to care right away instead of delaying.
The metaverse is “a network of three-dimensional virtual worlds…sometimes described as a version of the internet that functions as a single, digital world facilitated by the use of virtual and augmented reality headsets.” Pharmacy giant, CVS recently announced they will be providing more products and services virtually, as they reduce their physical locations across the country. Read more on our website.
CVS is going to provide non-emergency medical treatment, wellness programs, nutrition counseling, and downloadable virtual goods. The downloadable virtual goods will be sold as NFTs (non-fungible tokens). CVS is the first pharmacy to file a trademark to get into the metaverse space.
Source: HealthCare Finance
Benefits are an important part of employee retention. The economy has caused wages to increase, but so has inflation, making employee benefits even more important. There are five ways your company can optimize benefits to increase morale and employee satisfaction. Read more on our website.
Benefits managers can help with employee retention in five ways.
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