While this is good news for consumers, lifting the financial barriers to preventive care, it will mean additional costs and challenges for employers and insurers, Towers Watson says.
According to a press release, the new law broadens the range of services covered and establishes a uniform standard for services grounded in the recommendations of the United States Preventive Services Task Force and other similar bodies. Under the provision, insurers and self-funded health plans must cover regular wellness visits based on the patient’s age and gender as well as a range of recommended screenings.
New additions to coverage for most employees and their families will include depression, supplemental pregnancy, and HIV and other sexually transmitted diseases screenings as well as HPV tests for females. It also includes recommendations to take aspirin to prevent heart disease and fluorides for children.
Plans that are not considered grandfathered under the law must provide these benefits at 100% beginning in plan years starting on or after September 23, 2010. Towers Watson anticipates that less than half of large employer health plans will retain grandfathered status since most will be making plan design and contribution changes that will exceed the limits permitted by the grandfathered plan rules.
Insurers and employers will face cost increases of 1% to 2%. With an annual 2010 average per covered employee health cost of just over $10,000, this means employers will see an increase of $100 to $200, which will be in addition to expected average annual cost increases of 8% to 10%.
In addition, many employers will be scrambling to communicate these new benefits to employees in time for open enrollment in early fall, and insurers and administrators will face the additional challenge of modifying their claim payment systems by January 1 or establishing processing guidelines for their examiners.“Because there has not been a single standard for the administration of preventive benefits, many employers have taken it upon themselves to define these benefits,” said Greg Mansur, senior health care consultant with Towers Watson, in the press release. “This adds to the complexity of implementation for many regional and national claim payers, and employers should really take the time not only to understand the impact on their plans, but also to test their administrator’s capabilities before January 1.”