Healthcare

The one-year anniversary of the Patient Protection and Affordable Care Act has come and gone, and federal agencies continue to issue clarifying guidance on several of its provisions, including the grandfathered health plan rules and the requirement to report the cost of employer-provided health coverage on employees' Forms W-2.

It was about seven years ago that a client of Matt McQuide approached the vice president at Benefit Controls Companies with a serious, if not uncommon, problem. The 1,000-employee textile firm was experiencing unsustainable rate increases of at least 9% to 11% a year. "They looked at us and said, 'If this continues, we won't have a business,'" McQuide recalls.

Each year, benefits professionals around the country spend months determining the plan of action for the next year's health care. Numbers are crunched. Alternatives are explored. Numbers are crunched again. Finally, all of the information is compiled and presented to the executive team. While we don't think of it as presenting a business case, that is essentially what we do each year - and we can learn a lot from our peers in marketing, product development and finance about building an effective business case.

Faced with the current challenges brought on by the financial crisis, company priorities have been forced to shift, and employees are often left with a lack of understanding and insufficient guidance on their benefits choices at work.

With two Harry Potter fans still living at home, our family couldn't wait to visit The Wizarding World of Harry Potter last week while on vacation in Orlando, Fla. Our family of four "muggles" whizzed around on broomsticks, played Quidditch and drank delicious butter beers in this land of magic and illusion at Universal Studios.

Expensive new cancer drugs, treating increasing numbers of patients, could drive cancer drug spending by as much as 15% a year through 2013, according to the 2011 Medco Drug Trend Report, which tracks drug utilization and spending.

Although both fixed indemnity and expense incurred limited medical plans continue to be impacted by the Patient Protection and Affordable Care Act, fixed indemnity plans are weathering the storm relatively intact, while the expense incurred structure has taken a beating, experts say. Fixed-indemnity plans do not have to comply with PPACA regulations because they do not mimic major medical insurance policies as expense incurred plans do.

The traditional model of the benefits brokerage is terminal and on life support. As I talk with brokers and consult with agencies across the U.S., there's a growing desperation as they realize that "carrying quotes" isn't enough anymore. Even modifying the plan design and then shopping the medical for the lowest quotes no longer will get - or keep - the account.

In case you have not noticed, there has been a flurry of regulatory activity surrounding defined contribution plans and DC advisers in particular. While there will be greater disclosure requirements, more advisers will be considered a fiduciary and it will be harder for advisers to represent a DC plan and the participants at the same time. Experienced DC advisers can use this activity to further distinguish themselves and grow their businesses.

The majority of employers want to prepare employees for a financially secure retirement, but have found educational campaigns unlikely to result in substantial changes in behavior. Employers walk a fine line when they implement automatic features; some argue that they enable lax saving habits and investment ignorance by funneling participants into plans automatically. On the other hand, Steve Utkus, director of Vanguard's Center for Retirement Research, recommends that employers use "participant inertia to their benefit and do it exclusively with plan design."