America's Benefit Specialist August/September 2023

NOTEWORTHY

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Council. “Employers empower employees to secure the coverage and care they need with predictable budgets for health benefits. Choosing their own health coverage en ables employees to select trusted providers and be secure in the ACA-compliant insurance that protects them from discriminatory practices such as pre-existing conditions and gender-based premiums.” The report adds more detail and context to the rise in popularity of HRAs, described as 401(k)s for health coverage, including their effectiveness as a viable benefits solution and their critical role in shaping bipartisan health policy poised to create a more accessible and affordable health care system. HRA Council members report HRAs are an on-ramp to benefits for businesses that have never been able to offer health insurance, thereby reducing the number of people without coverage. The report spotlights how HRAs help small and midsize businesses attract and retain talent in a compet itive job market. Small companies are not the only ones reimbursing em ployees for health coverage. ICHRA adoption among applica ble large employers (ALEs) more than doubled between 2022 and 2023 and has grown by a factor of 25x since 2020. Other report highlights: • The marketplace—and its risk pool—is strengthened by younger workers offered HRAs: Sixty-one percent of those offered an ICHRA are younger than 44. • Health plan selections funded by ICHRA are nearly evenly split between Gold, Silver and Bronze tiers, with employees becoming wise consumers who choose the coverage best for them and/or their families. • While ALE growth continues to build momentum, small businesses with fewer than 20 employees currently com prise 88% of the employers offering ICHRAs and QSEHRAs. “QSEHRAs and ICHRAs are a bipartisan success to advance health equity and connect more American workers with Af fordable Care Act plans offering access to mental, behavioral and physical care,” said Paoli. “HRAs deliver on the choice and portability that American workers deserve while giving employers a well-regulated, modern solution to cover more workers, including remote, hybrid, part-time, seasonal and employees in diverse American regions.” The report is based on data from administrators and enrollment platforms that comprise the Council, including Alegeus, Flyte HCM, HealthSherpa, HRASimple, nexben, One Bridge Benefits, PeopleKeep, Remodel Health, Stride Health, Take Command and zizzl health. Visit www.HRACouncil.org for more details.

CMS RELEASES 2022-2031 NATIONAL HEALTH EXPENDITURE PROJECTIONS The Centers for Medicare & Medicaid Services’ Office of the Actuary released projections of National Health Expendi tures (NHE) and health insurance enrollment for the years 2022-2031. The report contains expected impacts from the Inflation Reduction Act (IRA), including that people with Medicare prescription drug coverage (Part D) are projected to experience lower out-of-pocket spending on prescription drugs for 2024 and beyond as several provisions from the law begin to take effect. CMS projects that over 2022-2031, average annual growth in NHE (5.4%) will outpace average annual growth in gross domestic product (4.6%), resulting in an increase in the health spending share of GDP from 18.3% in 2021 to 19.6% in 2031. The insured percentage of the population is projected to have reached a historic high of 92.3% in 2022 (due to high Medicaid enrollment and gains in Marketplace coverage). It is expected to remain at that rate through 2023. Given the expiration of the Medicaid continuous enrollment condition on March 31, 2023, and the resumption of Medicaid rede terminations, Medicaid enrollment is projected to fall over 2023-2025, most notably in 2024, with an expected net loss in enrollment of 8 million beneficiaries. If current law provisions in the Affordable Care Act are allowed to expire at the end of 2025, the insured share of the population is projected to be 91.2%. In 2031, the insured share of the population is project ed to be 90.5%, similar to pre-pandemic levels. The NHE is published annually and is often referred to as the “official” estimates of U.S. health spending and health insurance enrollment. The historical and projected estimates of NHE measure total annual U.S. spending for the delivery of healthcare goods and services by type of good or service (hospital, physician, prescription drugs, etc.) and by payer (private health insurance, Medicare, Medicaid, etc.). Selected highlights on the IRA as well as NHE spending by major payer include: Inflation Reduction Act on Medicare Part D Enrollee s: Sev eral provisions from the IRA are expected to result in out of-pocket savings for individuals enrolled in Medicare Part D. Those include: i) limitations on price increases for Part D drugs beginning in 2023, ii) elimination of the cost-sharing requirement in the Part D catastrophic phase (typically five percent beneficiary coinsurance) starting in 2024, iii) implementation of a $2,000 annual cap on out-of-pocket spending on drugs under Part D beginning in 2025, and iv) reduced prices for certain high-cost drugs through negotiation resulting in lower out-of-pocket payments beginning in 2026. These provisions have notable effects

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