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Large US employers, particularly tech companies, have been vocal advocates of transgender rights and acceptance in recent years. Beyond public statements and activism, however, these organizations are also looking at ways to make their HR policies more inclusive of their transgender employees. Fast Company’s Lydia Dishman observed recently that major companies are doing making more of an effort to be trans-inclusive, particularly in terms of ensuring that their benefit plans cover gender-affirming health care:
The Human Rights Campaign, a leading advocacy group, announced last year that over 450 major U.S. employers now have policies to support employees through the transitioning process. Separate research from the International Foundation of Employee Benefit Plans (IFEBP) found that these numbers are inching up throughout the U.S. workforce. Twenty-two percent of the nearly 600 HR professionals surveyed said their health plans cover gender confirmation procedures, up from 8% in 2016; a quarter provide mental-health counseling pre- and/or post-surgery, up from 11% two years ago; and 24% cover prescription drug therapy, up from 9% over the same period.
However, these benefits are more likely to be found at large employers like Intel, with workforces in the tens of thousands, than at smaller ones; IFEBP found that only 10% of companies with fewer than 50 employees offer trans-friendly health benefits, up from 4% in 2016.
By way of example, Dishman looks at Intel, which introduced coverage for all gender confirmation procedures, following standards set by the World Professional Association for Transgender Health (WPATH), in 2016, with no maximum lifetime benefit; and Amazon, which began offering unlimited coverage for trans medical care in 2015. Starbucks announced late last month that it had updated its health insurance policy, with help from WPATH, to cover a wider range of procedures that insurers often label cosmetic and refuse to cover but that trans people and their health providers consider essential to their transition process:
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The health insurance company Cigna announced a new initiative last week in which it is “intensifying its commitment to curtail the opioid epidemic by focusing new drug prevention and treatment efforts in targeted US communities.” Cigna said its goal was to reduce the number of opioid overdoses among its customers in these communities by 25 percent by December 2021:
Initially, Cigna will focus its local efforts in areas where a sizable number of Cigna commercial customers reside and where there are higher than average overdose rates, including communities in the states of Connecticut, Maryland, New Jersey and Virginia and in the metropolitan areas of Chicago, New York, Philadelphia and Washington, D.C. The goal is to reduce prescription and illicit opioid overdoses in these areas, and Cigna will advance initiatives that impact both Cigna customers and the communities at large. To support this initiative, Cigna and the Cigna Foundation will expand and accelerate the impact of community-based organizations that are leading localized programs. Cigna intends to learn from initial efforts during the three year time period and expand to other communities over time.
The main channel for these efforts is through health care providers, with whom Cigna is working to limit the prescription of opioid pain medication, address warning signs of opioid addiction, and guide patients toward less dangerous pain management options. Most US adults receive health insurance coverage through their employers, so partnerships with employers are also a key component of this effort, Cigna added:
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The joint venture launched earlier this year by Amazon, Berkshire Hathaway and JPMorgan Chase to explore new ways of lowering health care costs for their employees now has a dedicated leader. Dr. Atul Gawande, a renowned surgeon, medical researcher, and author of several highly regarded books on medicine who has also been a staff writer at the New Yorker for 20 years, will serve as CEO of the as-yet-unnamed organization, Fortune reported on Wednesday:
Gawande may come as an unexpected choice to lead this new health care company, whose aim is to decrease health care costs and improve outcomes for the approximately one million employees in the triumvirate’s workforce. He practices general and endocrine surgery at the renowned Brigham and Women’s Hospital in Boston and is a researcher and professor at Harvard’s T.H. Chan School of Public Health. …
Following the Amazon-JPM-Berkshire announcement, Gawande stated that he would continue his positions at Brigham and Women’s and Harvard and will keep writing for the New Yorker even as he takes the reins of the health venture on July 9. He will, however, step away from his role as executive director of Ariadne Labs—a company he founded that focuses on health care delivery with a global health-focused bent—to become its chairman.
Few other details are publicly known about the partnership, which was announced in January, sending ripples through the stock market as pharmacy benefit managers, health insurance companies, and biotechnology firms wondered what it would mean for them. The organization Gawande has been hired to lead is an independent nonprofit based in Boston, which is expected to focus on technological solutions, data sharing, and its participants’ bargaining power as large buyers in the health care marketplace. The organization may eventually partner with other companies along with Amazon, Berkshire, and JPMorgan.
The US Department of Labor has finalized a new regulation that will enable more small businesses and self-employed Americans to buy health insurance through association health plans (AHPs), which proponents say will help lower health insurance costs for smaller employers, but which critics say undercuts the essential coverage requirements created by the Affordable Care Act. The core impact of the nearly 200-page rule is to broaden the definition of the term “employer” under the Employee Retirement Income Security Act (ERISA), establishing new criteria under which employers can join together in an association that would still be regarded as a single “employer” for ERISA purposes. SHRM’s Stephen Miller discusses what that means for how small businesses buy group health insurance:
The broader interpretation of ERISA will let employers anywhere in the country that can pass a “commonality of interest” test join together to offer health care coverage to their employees. An association could show a commonality of interest among its members on the basis of geography or industry, if the members are either:
- In the same trade, industry or profession throughout the United States.
- In the same principal place of business within the same state or a common metropolitan area, even if the metro area extends across state lines.
Sole proprietors will be able to join small business health plans to provide coverage for themselves as well as their spouses and children.
Previously existing AHPs, which were allowed under a more limited set of restrictions, will not be affected, unless they choose to expand in ways allowed by the new rule. The rule change, which President Donald Trump ordered the department to study last year, effectively exempts AHPs from ACA regulations that apply only to individual and small group plans by allowing them to operate in the more lightly regulated large group market. These regulations include the core package of health care services known as essential health benefits, which all plans in the individual and small group market are required to include but larger plans are not.
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Amazon, Berkshire Hathaway, and JPMorgan Chase made headlines—and sent health insurance stocks into a tailspin—when they announced in January that they had partnered to form an independent nonprofit organization dedicated to finding ways of providing health care to their employees at a lower cost. However, Kathryn Mayer at Employee Benefit News flags a new report from venture capital firm Venrock in which healthcare experts say that this partnership is unlikely to have as immediate or dramatic an impact as its founders might expect:
Of the 300 healthcare professionals, employers, investors and academics surveyed by Venrock, 73% said that the Amazon, Berkshire Hathaway and JPMorgan effort was going to take a lot longer than expected and endure many obstacles. Meanwhile, 25% said the companies “have no idea what they’re getting into.” There are a number of reasons for the industry’s skepticism, say Venrock partners Bryan Roberts and Bob Kocher.
“[One is that] many new entrants have sought to dramatically improve healthcare for many years and nearly all have failed to produce any material impact. Remember Google Health and HealthVault?,” Roberts says. “While these are all large, successful companies, they do not have any real market power in healthcare, where all leverage is locally driven.” Meanwhile, Kocher notes, the companies haven’t yet formed a leadership team.
January’s announcement reflected the pressure many US employers of all sizes are feeling as rising health care costs force many of them to shift more of these expenses onto their employees. Businesses are bracing for a further spike in costs next year, as Congress has declined to take action to stabilize the individual health insurance marketplace established by the Affordable Care Act, potentially paving the way for premium hikes of as much as 30 percent. Higher expected costs for insurers mean higher prices for group insurance customers (mainly employers) as well as individuals.
The San Mateo, California-based online polling company SurveyMonkey announced last week that it has been offering the independent contractors it employs a suite of “gold standard” medical, dental, and vision benefits, identical to those of its regular full-time employees, since January, Phil Albinus reports at Employee Benefit News:
Under the medical plan, 80% of claim costs are paid by its insurance carrier and the third-party employer pays 85% of employee premium and 50% of dependent premium. Contract and third-party employees are entitled to 80 hours of vacation and 40 hours of paid sick leave per year, including seven paid holidays, 12 weeks of paid parental leave per year and 12 weeks of paid medical leave per year. These workers can also receive a monthly subsidy of up to $260 for public transit expenses.
The divide between employees and contractors in Silicon Valley is vast: Whereas Facebook, for instance, reported a median employee salary of over $240,000 in its latest proxy filing with the Securities and Exchange Commission, that number does not include the army of contractors and subcontractors who provide security, custodial, catering, and other facilities management services for the social media giant. These contingent workers don’t enjoy anything resembling the plush benefits packages Facebook offers its full-time employees, and the impact of this inequality in the high-cost San Francisco Bay Area has drawn growing criticism toward the tech sector (Facebook is by no means unique in this regard).
In our age of HR as PR, benefits inequality has become an increasingly popular subject of scrutiny on the part of investors, the public, and the press. Starbucks expanded parental leave benefits for its hourly store employees earlier this year after activist investors began asking pointed questions about the disparity in leave benefits between hourly and salaried employees and whether this difference put the company at risk for claims of discrimination. Interestingly, in the case of SurveyMonkey, the impetus to equalize benefits for contractors came not from investors or the press, but rather from employees:
Last Thursday, the Wall Street Journal reported that Walmart was in talks to acquire the health insurance company Humana, currently valued at around $37 billion, raising the prospect of another merger with transformative implications for the benefits industry. Both companies are keeping mum about the possible deal, though Bloomberg heard from a person familiar with the talks that the most likely outcome was a closer partnership between the retailer and the insurer, which already collaborate on providing prescription drugs for US senior citizens insured through Medicare (Humana is the second-largest provider of government-supported private Medicare Advantage plans in the US).
Either way, a closer partnership between these giants could have some major implications for the US health insurance market, especially in combination with the other changes that are going on. The pharmacy chain CVS announced in December that it had agreed to purchase the insurer Aetna for $69 billion as part of an effort to transform its 9,700 retail drug stores into “health care supermarkets” complete with wellness clinics for preventive care (That merger was approved by shareholders last month but has yet to pass muster with antitrust regulators in the Justice Department).
A similar move by Walmart would be groundbreaking, given the big-box retailer’s massive presence throughout the US. Even a deal to provide health care for Walmart’s 1.5 million US employees would be significant. Walmart becoming a health care provider would make a big difference, Tracy Watts, senior partner at Mercer, tells Employee Benefit News reporter Kathryn Mayer:
“I would think whatever happens with the deal, Walmart would leverage its relationship with Humana to provide primary care or extend convenience care to its employees in addition to the general public,” Watts says. She also predicts the retailer will leverage its onsite care locations to provide a convenient, cost-effective way for employees and others to receive basic treatments. “For employees to get healthcare from Walmart in those rural locations can be a really good thing,” she says.