February 11, 2022

nflation can indirectly affect prescription drug costs through exchange rate fluctuations and devaluation of the national currency. Notably, retail prices for some of the most widely used brand-name prescription drugs continue to increase twice as much as inflation.

Between 2018 and 2019, half of the drugs covered by Medicare Part D plans experienced a price increase that exceeded inflation, according to a Commonwealth Fund blog post. And in 2021, drug manufacturers increased prices an average of 4.2 percent on over 900 brand-name drugs.

“There are two big drivers on drugs costs. One is ensuring competition. The price of a drug is greatly impacted by the extent to which there is competition. The second big challenge and one that remains more difficult to address is the initial price of new medications,” Steven Lucio, senior principal of pharmacy solutions at Vizient, told PharmaNewsIntelligence in an interview. 

Vizient’s 2022 Pharmacy Market Outlook found that the estimated drug price inflation rate for this year will reflect a moderate price increase.

For example, Humira has been the top agent in global spending since 2012 and would have remained that way if not for the COVID-19 pandemic. In 2020, FDA-approved COVID-19 treatment, Veklury (remdesivir), replaced Humira in total spending across all classes of trade.

This purchase pattern illustrates the challenge that academic medical centers, integrated health systems, and other key provider organizations have faced with enduring costs of existing expensive medications resulting from the COVID-19 pandemic, Lucio explained.

Overall, the price of new medications greatly affects pharmaceutical inflation and there is a crucial need for a balance of drug price with benefit. But the high drug prices present a seemingly insurmountable problem.

Americans pay more than $1,500 per person for prescription drugs, notably higher than any comparable nation. Currently, there are 17 drugs with a treatment cost over $700,000 and five drugs with treatment prices over $1 million, hence the continued debate as to whether these prices are appropriate relative to the potential treatment benefit.

“It is important to reward the continued investment in new drug development to treat conditions where no adequate therapies presently exist. The challenge is that the majority of diseases where innovation is critically needed are very severe and frequently extremely specialized,” Lucio stated.

“Given the severity of the disease, the vulnerability of the patient population treated, and the use of novel technologies, the initial launch prices are extremely high,” he continued.

Take, for example, the ongoing controversy related to Biogen’s Alzheimer’s medication, Aduhelm. This drug was launched at a price of $56,000 annually and may increase prescription drug spending and the national health expenditure by more than $73 billion by 2028.

However, the lack of clarity surrounding the drug’s true clinical benefit has prompted many providers to decline even offering the therapy. For example, In March 2019, Biogen discontinued its ENGAGE and EMERGE trials based on results of a futility analysis conducted by an independent data monitoring committee.

Overall trial results showed that Aduhelm administered as a monthly infusion was not better at slowing memory loss and cognitive impairment than placebo. Therefore, the committee concluded that the trials were unlikely to meet their primary endpoint upon full completion.

Drug prices are also significantly impacted by market competition. If there is competition for a drug, especially at initial market entry, inflation is non-existent or considerably reversed. But if no competition exists, manufacturers take an annual or biannual price increase. The size of the price increase generally escalates as the product nears its loss of exclusivity.

FDA grants market exclusivity and patent protections to allow drug developers to recover their research and development costs. But the biggest opportunity for near-term value with drug prices are biosimilar drugs.

Biosimilars are newer, similar versions of FDA-approved medicines offered at lower prices, creating competition in the biologic market. In 2021, FDA approved the first interchangeable biosimilar product for diabetes treatment, the first biosimilar for certain inflammatory diseases, and the first biosimilar to treat macular degeneration.

As biosimilars enter the US market, increased competition will make vital medications 15 percent to 35 percent cheaper and grant patients more treatment options. US taxpayers and the healthcare sector can save nearly $7 billion annually with a more robust, more competitive biosimilars market.

“At this point, there is likely nothing more critical to lower drug prices than encouraging biosimilar consideration and adoption,” Lucio stressed. “Biosimilars offer a large opportunity in cost savings, and continuing to support the biosimilar pathway and limiting excessive patenting as a strategy to prevent competition are steps the government has and can continue to take in managing drugs costs.”

While healthcare discussions have centered on controlling drug pricing, providers must confront another critical challenge: drug shortages for essential meditations, Lucio noted. Currently, over 100 drugs are in short supply across the US. 

Lucio and his team recently launched the End Drug Shortages Alliance (EDSA). The EDSA collaborates with providers, suppliers, advocacy, and other stakeholders committed to ending drug shortages by promoting increased transparency, improved quality, and enduring access to sustainable suppliers of essential medications.

“Just as competition is critical to keep drug prices from getting excessively high, it is also essential to ensure that the availability of critical drugs is uninterrupted, especially the duration of shortages that predated the pandemic and were worsened by COVID,” Lucio concluded.

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Mental health has been a hot topic recently, thanks to the COVID-19 pandemic. Over the past two years, so many people have experienced issues such as burnout, depression, anxiety, and substance addiction. In fact, 40% of U.S. adults said they have struggled with mental health or substance abuse during the pandemic, according to a Jellyvision survey.

 In 2022, mental health will continue to be a top concern for workplaces, and employers are taking notice. Over 30% of employers have added new mental health benefits within the past year, according to McKinsey and Company. Yet, despite increased efforts, nearly 25% of employees still don’t feel supported when it comes to their mental health.

 With that in mind, employers will need to evaluate their mental health strategies and consider how they can best help maximize their employees’ overall well-being. To help with this, employers can consider the following trends that may influence workers’ mental health in 2022.

1. More Mental Health Programs 

Employers should expect to see more mental health programs cropping up in the new year. The vast majority of employers (90%) said they would be increasing their investment in mental health programs, according to a Wellable Labs survey. Of those employers, 72% expect most or all of those mental health solutions to be digital. These may include mindfulness or meditation programs, stress management classes or other online offerings.

2. Increased Scheduling Flexibility

Scheduling flexibility remains a top workplace desire for employees. During the pandemic, many employees were sent home to work remotely for the first time; now, many want to retain that perk at least some of the time. According to a Lyra survey, nearly 70% of employees said work-from-home days and flexible scheduling options are “very important.” That’s because having work flexibility allows employees to better manage their personal responsibilities, creating a better work-life balance. 

Employers are expected to increase scheduling flexibility in 2022, whether it’s through remote or hybrid work scheduling. A Mercer survey found that 73% of employers plan to implement a hybrid work environment if they haven’t yet done so. This illustrates how important having remote options will be to stay competitive, improve mental well-being and attract employees in 2022.

3. Expanded Virtual Doctor Visits

Remote access to mental health professionals can be critical for employees who may otherwise not have time to seek help. Such specialists can often be accessed through telemedicine resources, which have been gaining significant popularity recently. Telemedicine is shown to be so popular that 80% of employers intend to invest more in the solution in 2022, according to Wellable Labs. Employers can consider how providing access to on-demand health professionals may benefit their employees.

4. Greater Mental Health Education

While mental health concerns have risen dramatically in recent years, education on such topics hasn’t always kept pace. Employees might be feeling burned out or depressed and not understand why or what to do about it. This demonstrates the need for greater mental health literacy. In 2022, employers can expect a greater focus on education in this area. Examples of mental health education include: 

• Training managers to spot employees who may be struggling with their mental health
• Providing employee communications that address and help explain mental health issues
• Offering seminars or educational sessions that explain signs of mental health issues and what to do about them

 Employers should consider what resources or solutions may best serve their employees in the new year.

5. Improved Focus on Individuals

Mental health needs to be nurtured, just like physical health—it’s impossible to improve something overnight. Employers are understanding this and taking steps to address issues before they worsen. 

For instance, over 50% of employees reported experiencing burnout in 2021, according to Indeed. Employers are trying to curb this trend by checking in with employees more frequently about how they’re feeling. Instead of annual or quarterly one-on-one meetings, managers are being encouraged to touch base more regularly. Having this candid communication can help address mental health issues before they get worse.

Summary

Mental health is a serious concern for employees and their employers. Not addressing mental health issues can lead to a host of other problems down the road, including burnout and depression.

 In 2022, employers should be ready to help their workers with their mental health. This means educating employees and managers about these issues and providing solutions for individuals to seek professional help. 

Reach out to ¶¶Òőapp for help securing pertinent employee communications.

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February 08, 2022 by Kelsey Waddill

s states face a growing youth mental health crisis, they have relied on the American Rescue Plan Act to support initiatives that broaden access to care, according to a report from the Georgetown Health Policy Institute’s Center for Children & Families (CCF).

°Őłó±đÌęAmerican Rescue Plan Act, which the administration introduced in January 2021, put around $12 billion toward mental healthcare and substance abuse care in Medicaid home and community-based services (HCBS). Overall, states received 10 percentage points of federal funding matching for HCBS programs, which they can use through March 31, 2024.

States may receive varying amounts of support through the Act. For example, Wyoming received $19 million, which is the lowest amount of matching so far. Meanwhile, California has received the highest amount of funding, raking in $2 billion.

“To date, every state has submitted initial spending plans and narratives to CMS for approval in order to take up the opportunity,” the researchers explained. 

“We have reviewed the spending plans and narratives for the 50 states and DC posted by CMS on Medicaid.gov to see whether and how states are planning to use the funds to support children’s mental and behavioral health as part of their planned activities to enhance, expand, or strengthen HCBS.”

Overall, the researchers noted that states tended to apply the funding toward bolstering general mental and behavioral healthcare services, as opposed to focusing on youth mental and behavioral healthcare. However, the report highlighted four states that created extensive plans that targeted youth healthcare.

Alabama used American Rescue Plan Act funding to establish a community-based housing model tied to the state’s Department of Youth Services. Professionals would run the home, with programs that are tailored to patients’ specific, complex mental and behavioral healthcare needs.

Michigan leveraged the funds to bolster the state’s intensive crisis stabilization care. Michigan also put funding towards services that can support the families of children with severe mental and behavioral healthcare needs, such as case management, peer and parent support partners, and family therapy. 

Other relevant initiatives in Michigan sought to support the mental healthcare workforce. The state put funding toward enacting new certification criteria. The funds would also increase access to care by increasing eligibility for mental and behavioral healthcare support among youths in foster care or at risk of entering foster care.

Rhode Island intended to use the funds to create a single point of access for pediatric behavioral healthcare. The state would introduce a children’s behavioral health hotline, bolster care coordination, and take steps toward behavioral healthcare integration.

Lastly, the state of Washington strongly invested in children’s mental and behavioral healthcare needs. Some of its measures would support existing services, such as expanding the Children’s Intensive In-Home Behavioral Supports waiver.

However, other aspects of Washington’s plans might facilitate change in the state’s approach to pediatric behavioral and mental healthcare. Specifically, the state intended to alter its mental and behavioral health diagnosis process for patients who are newborns and up to five years of age. 

Additionally, Washington’s initiative to improve training on the Diagnostic Classification of Mental Health and Developmental Disorders of Infancy and Early Childhood: DC: 0-5 could result in catching mental and behavioral health conditions earlier.

Another nine states included youth-focused efforts in their HCBS plans for expanding behavioral and mental healthcare services.

These efforts encompassed including “children with behavioral health needs” as key populations in certain initiatives, providing behavioral healthcare aides through home healthcare, improving payment to pediatric mental and behavioral healthcare case managers, and offering incentive payments to primary care providers to support behavioral-physical care integration efforts.

The researchers noted, however, that in order to make a long-term impact policymakers should consider supporting the Build Back Better Act, which the researchers said would expand upon the American Rescue Plan Act’s efforts. Many payer leaders have expressed reservations about the Build Back Better Act.

°Őłó±đÌę has been amplified by the coronavirus pandemic, but it did not begin with the public health emergency. Moreover, mental and behavioral health conditions can worsen chronic diseases.

Payers and , along with chronic disease management demands.

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NPR

Last month, Chelsea Titus, a 40-year-old mother of one in Boise, Idaho, needed surgery to relieve severe . But hospitals there are so full of unvaccinated COVID-19 patients that doctors told her she’d have to wait.

Nearly 1 in 5 American households has had to delay care for serious illnesses in the past few months, according to a new poll from NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health.

Titus, who works for a tech company from the home she shares with her husband, her daughter and a labradoodle named Winston, previously had surgery for endometriosis in which doctors removed her uterus and one ovary. When the condition flared again in September, the pain was severe.

“Sometimes it feels like I am in active labor,” she says.

 of women in the U.S. when tissue that typically grows inside the uterus also grows outside it.

When the initial medication that Titus received didn’t help, she reached out to her on-call doctor.

“He said, ‘If the hospitals weren’t in the situation they were in, I would have you in for surgery today,’ ” she recalls.

The safety net is gone

The situation in Idaho’s hospitals has become dire. The facilities are so full of mostly unvaccinated COVID-19 patients that many can no longer operate normally. .

Jim Souza, chief physician executive at the largest of Boise’s hospitals, St. Luke’s, describes his institution’s typical high standards of care as the net that allows doctors to perform high-wire medical acts every day.

But now, “the net is gone and the people will fall from the wire,” Souza says.

Idaho has one of the lowest COVID-19 vaccination rates in the United States.

“As cancer clinicians, we’re really frustrated,” says Dr. Dan Zuckerman, medical director for St. Luke’s Cancer Institute.

Zuckerman says his staff has delayed surgery for some breast cancers that can likely be kept at an early and treatable stage with hormones.

“There’s just no guarantees with that,” he says, “and there will still be some cancers that biologically may break through.”

Zuckerman now spends half his day at the hospital to help his overloaded colleagues and says he can see only half as many patients at the clinic.

Across town at Saint Alphonsus, Boise’s slightly smaller hospital, another oncologist, Scott Pierson, says they haven’t had to postpone any surgeries — yet.

But standard cancer screenings, like colonoscopies, have been pushed back.

“We’re already a state that, if you look at the statistics, lags in screening,” Pierson says.

The pulmonologists who usually perform lung biopsies at Saint Alphonsus, for example, are swamped right now, he says, trying to treat severe cases of COVID-19 in the intensive care unit.

Strained health care systems mean delayed care

Lots of Americans face delays like the ones in Idaho, says , a pollster at the Harvard Chan School of Public Health.

“The numbers were much greater than we expected,” Blendon says, “and the delta variant changed what was going on.”

The survey he helped run found that nearly 1 in 5 U.S. households reported not being able to get treatment for a serious illness in the past few months; most of them said they had negative health outcomes because of that.

“This is the United States,” Blendon says. “You don’t expect people with serious illnesses to say they cannot be seen for care.”

This data, he says, shows that health care systems need to boost their capacity ahead of the next pandemic or serious natural disaster.

While Boise-area hospitals are bursting with COVID-19 patients, they’ve also had a surge in demand from people who’ve already delayed care during the pandemic.

Pierson and Zuckerman say they’ve seen more advanced cancers than usual that could have been caught earlier; catching the malignancies sooner would likely have given patients a much higher chance of survival, they say.

Pierson says he has suggested to patients they might take a less intense form of chemotherapy so they’re less likely to need a hospital bed if complications arise.

Meanwhile, though the immense pain Titus felt from her endometriosis was overwhelming, she says she couldn’t get surgery anywhere in Boise to remove her remaining ovary.

Her brother took the extraordinary step of chartering a private plane to take her to the California Bay Area for treatment instead.

“I guess I could have flown commercially, but it would’ve been really hard and embarrassing because I was, like, screaming in pain,” she says.

After landing, Titus went to an emergency room and an urgent care clinic and talked to multiple doctors before finding a surgeon in her insurance network with an open calendar.

Hotel rooms, a rental car and her flight home added up to thousands of dollars out of pocket — all for a surgery she could have had at a hospital just a few minutes drive from her home in normal times.

She recognizes she’s privileged to have been able to afford all she did to get treatment.

“It breaks my heart that most in Idaho don’t have the ability to do that,” Titus says.

And even so, it was nearly two weeks after first experiencing the severe pain that she was able to find relief.

“It’s amazing how much better I feel,” she said two days after her surgery.

But the situation has left her questioning just how much her friends and neighbors who have refused to wear masks or get the COVID-19 vaccine really care about their community — and whether she has a place in the state any longer.

“My husband and I used to say, ‘We’re never leaving Idaho,’ ” Titus says. “We love it here. It’s an amazing place to live, and we’ve been looking at real estate in other states — because this just isn’t OK.”

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According to the report, nearly 2 million people were enrolled in HSA/HDHPs purchased in the individual market in January 2015. As with previous years, the gender distribution of enrollees covered by HSA-eligible HDHPs in the individual market was 50% male and 50% female. In January 2015, 56% of all HSA/HDHP enrollees in the individual market (including dependents covered under family plans) were age 40 or over, while 44% were under age 40.

Companies offering HSA/HDHP products in the small-group market reported enrollment of 2.3 million as of January 2015. In general, small-group coverage was defined by responding companies as coverage offered by employers with 50 or fewer employees. In the small-group market, the gender distribution of enrollees covered by an HSA/HDHP was 52% male and 48% female. Ninety-two percent of plans offered their enrollees access to information and 88% of plans made information about their physicians’ hospital affiliations and medical education available to HSA/HDHP enrollees. Member access to health savings account balances was available from 83% of responding plans and 65% of plans made healthcare provider cost information available to their HSA/HDHP enrollees.Respondents reported state-by-state enrollment for nearly 15 million lives with HSA/HDHP coverage as of January 2015. States with the largest reported HSA/HDHP enrollment levels were Texas (1,533,416), Illinois (1,280,655), Pennsylvania (843,182), Ohio (841,970), and Minnesota (834,594). Sixty-four health insurance companies were surveyed. The full report is available online at

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By Jerry Geisel, Business Insurance

BOCA RATON, Fla. — Employers looking to hold down group health care plan increases should consider turning to their captive insurers, a consultant says.

Compared to purchasing coverage in the traditional market, funding group health care plan benefits through a captive can result in a “pricing advantage initially and at renewal,” said Debbie Liebeskind, a senior actuarial consultant at Towers Watson & Co. in Parsippany, New Jersey.

Speaking Wednesday at a session of the 25th annual meeting of the World Captive Forum in Boca Raton, Florida, Ms. Liebeskind says many employers can afford to take on some — but not all — of the risk associated with offering a group health care plans.

Those risks include jumbo-size individual claims, such as those triggered by the premature birth of babies, and much-higher-than budgeted claims costs.

To protect themselves against such risks, employers that self-insure can purchase stop-loss coverage directly from the health insurers providing plan benefits.

But such an approach can be expensive. Many health insurers “charge very high prices” for stop-loss coverage, Ms. Liebeskind said.

There is, fortunately, a much less costly way of funding the coverage, Ms. Liebeskind said. “If you have a captive, keep a slice of the risk” with the captive, with the captive then shifting part of the risk to reinsurers, she said.

Such a financing arrangement “is relatively straightforward, with a minimal upfront effort,” she said.

To be sure, employers, with captives, have several issues to consider before taking such an approach, with the most important one being how much risk the captive will assume and how much it will shift to reinsurers.

The captive may take a slice of the risk, and in some cases, such as for very large firms, their captives may assume all of the risk, she said.

Those employers who have decided to have their captives shift part of the risk to reinsurers have two issues to decide: how much risk do they want their captives to retain and which reinsurers do they want to utilize, said Jason Lichtman, a vice president with JLT Re (North America) Inc. in Weatogue, Connecticut, who spoke at the WCF session.

If purchasing reinsurance, “it makes sense to get quotes” from several reinsurers Ms. Lichtman said, adding that that the stop-loss medical claims reinsurance market is competitive, with more than half dozen major reinsurers offering coverages

In addition, employers should get quotes for coverages at different attachment points. “I like to have several different options,” he said.

Another step employers should take is checking to see if reinsurers have, as some do, contracts with provider networks that offer attractive pricing on services and procedures.

“There can be savings there,” he said.

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2/28/16 6:00 AM

High-deductible health plans have been proliferating in recent years: 82% of large employers planned to offer a high-deductible healthcare plan in 2015, according to, up from just 21% of large employers offering an HDHP a decade ago. Health-savings accounts (HSAs), which are used alongside HDHPs to help individuals pay their out-of-pocket healthcare costs, have been growing in prevalence right alongside HDHPs, charting an average annual growth rate of about 15% since 2011, according to .

To help incentivize workers to save for these out-of-pocket healthcare expenses, HSAs offer a three-fer on the tax-break front: Participants contribute pretax dollars to their HSAs, the assets grow on a tax-free basis, and money can be withdrawn on a tax-free basis for qualified healthcare expenses. That nudges the tax-saving features of the HSA ahead of other tax-advantaged retirement-savings vehicles, which are either taxed on the way out (traditional IRAs and 401(k)s) or on the way in (Roth accounts).

Given those tax benefits, some financial planners argue that individuals who have the financial wherewithal to do so should leave their HSAs undisturbed, using aftertax, non-HSA dollars to cover healthcare costs as they occur. That strategy allows the investor to take maximum advantage of the tax-saving features of the HSA, while spending the less-tax-efficient taxable assets.

Few HSA participants use their accounts in that way, however. In , a Morningstar company, just 4% of HSA holders in the sample group actually invested their HSA assets. The majority of HSA holders, by contrast, either saved their HSA assets in the savings-account option or spent the HSA money on an ongoing basis to cover healthcare costs. Just 5% of HSA holders in the study contributed the maximum allowable amount to their HSAs. (In 2016, it’s $3,350 for individuals and $6,750 for those contributing to an HSA for a family.)

Perhaps some of that resistance owes to the fact that many HSA owners don’t have the financial wherewithal to use their HSAs as a supplemental savings vehicle. For such investors, the HSA offers a practical and tax-advantaged way to cover healthcare costs without having to raid emergency assets or resort to unattractive forms of financing like credit cards.

Meanwhile, investors who do have the financial assets to pay healthcare expenses out of pocket while leaving their HSA assets intact may avoid doing so due to mental accounting. Even though the HSA offers tax benefits that grow even more valuable with compounded interest over time, using an HSA to cover healthcare costs as they arise is convenient and doesn’t disrupt the household’s normal cash flow.

Finally, at least some of the resistance to investing HSA assets is likely a purely rational response to the fact that many HSAs are larded with costs and don’t necessarily feature best-of-breed investment options; those disadvantages can erode the tax benefits of the HSA.

Tax Benefits of HSAs Stack Up 
First, let’s take a look at the base case in favor of using an HSA as an investment vehicle. In the illustrations below, I’m considering just the tax issues–not the fact that some HSAs might have more costly investment options than an investor could find by investing in a taxable account or 401(k) plan. (I’ll consider those later.)

Assuming a participant in the 25% tax bracket contributes the maximum family contribution to an HSA–$6,750 in 2016–and does so for 30 years, earning a 4% annual return, she’d have $378,573 at the end of the period. She could use that money to cover healthcare costs in retirement, and the qualified withdrawals would be tax-free. If she needed the money for nonhealthcare expenses in retirement, she’d pay ordinary income tax on her withdrawals. (Note that a handful of states tax contributions or investment earnings; here’s .)

By contrast, if she used her HSA assets to fund her out-of-pocket healthcare costs and steered her investment dollars to a taxable account instead, her taxable assets wouldn’t compound at the same rate because the tax breaks aren’t as good. First, she’s putting aftertax dollars into her taxable account, so her initial investment is smaller–$5,063 versus the full $6,750 for our HSA investor. Even if she buys and holds a security that earns 4% and makes no dividend or capital gains distributions during her holding period, she’s going to have to pay long-term capital gains taxes on her withdrawals of investment earnings–currently 15% for investors in the 25% tax bracket. In my simplified example, she’d have $261,148–more than $100,000 less than the HSA investor after 30 years.

Using our simple example, the HSA contributions even look more attractive than contributions to a 401(k). Contributions to a traditional 401(k), like an HSA, are pretax, so our investor puts $6,750 annually into her account. She earns a 4% return, just like the HSA contribution does, but all of her traditional 401(k) withdrawals will be taxed. Assuming she’s in the 25% tax bracket in retirement, her $378,573 will shrivel to $283,930 when she pulls money out.

Costs Matter 
Before you run out and fund your HSA to the limit with an eye toward letting the money ride, it’s worth noting that my example casts the HSA in the most flattering possible light. As noted above, HSAs can carry additional costs, which can erode their return advantage versus investing in a taxable account or even a 401(k) plan. In addition to expense ratios for investment funds, HSAs can levy fees for ongoing maintenance or to transfer money from the savings-account option into the investment platform.

But even if I scale down the HSA investor’s return to account for those higher costs–taking the return from 4% to 3%, for example–the HSA investor’s account still comes out ahead of the taxable investor’s. Owing to the HSA’s tax benefits, the HSA investor earning 3% would have $321,134 at the end of the 30-year period, versus $261,148 for our hypothetical investor in a taxable account.

It’s also worth noting that investors whose employers have opted for a high-cost or otherwise-weak HSA have an escape hatch. A good strategy is to contribute to the company’s HSA each year, thereby enjoying the convenience of having your contributions extracted on a pretax basis from your paycheck. You can then regularly roll over the HSA assets into the lower-cost plan of your choice, much as you would when rolling over one IRA to the next. In this respect, it’s actually easier to circumvent a weak HSA than it is to get away from a weak 401(k).  has a useful compendium of some of the large HSAs.

Other Considerations 
But even though HSAs’ tax benefits can help compensate for their costs, most financial advisors still put HSAs behind tax-favored retirement plans like 401(k)s in the funding queue. As discussed in , HSA distributions have more strings attached than do withdrawals from IRAs or company retirement plans. For one thing, HSA owners will pay taxes and a penalty to withdraw assets for non-health-related expense prior to age 65, versus 59 1/2 for IRA withdrawals. (Roth IRA contributions can be withdrawn tax- and penalty-free.) Moreover, the penalty is higher for nonhealthcare withdrawals prior to age 65–20% versus 10% for IRA withdrawals prior to retirement. And while loans from 401(k)s are permissible (though not advisable in many instances), you cannot take a loan from an HSA.

Would-be HSA contributors should also consider their anticipated healthcare expenses in retirement before maxing out an HSA as an investment vehicle. that the typical couple will spend $245,000 on out-of-pocket healthcare expenses in retirement, a figure that doesn’t include long-term-care costs. But individuals whose employers will pick up their in-retirement healthcare costs–while a shrinking share of the population–will likely spend less. It’s not a disaster to overinvest in an HSA, in that in-retirement withdrawals for nonhealthcare expenses are treated just like 401(k) withdrawals are. But a 401(k) offers more flexiblity, as outlined above, and may also have lower overall costs than an HSA.

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April 21, 2016

HR executives and business leaders are not always aligned about employee well-being or wellness solution buy-in, new research shows, signaling a need for adviser help to bridge the disconnect.

Optum’s seventh annual workplace study surveyed wellness budgets, return on investment (ROI), incentive strategies and challenges in building a culture of health among companies of all sizes.

Seventeen percent of HR executives versus 30% of business leaders think employee well-being is” very good,” according Optum Health’s Seventh Annual Wellness in the Workplace Study, conducted by the Optum Resource Center for Health & Well-Being.

On the other hand, 41% of HR executives versus 32% of business leaders say wellness solutions are important to the benefits mix.

Seth Serxner, chief health officer for Optum says it is important for benefit advisers and consultants to make sure that both HR executives and business leaders are all on the same page when it comes to understanding their wellness programs.

“[Advisers] might think they have everyone on board when speaking to HR executives,” Serxner says. “However, when HR goes to pitch this program to a CFO or members of the C-Suite, they may need to adjust how they present the business case.”

While HR managers view some of the non-financial productivity and moral factors that are important in a wellness program, the non-HR managers are focused on the bottom line, ROI, cost containment and healthcare cost issues, he adds.

“[Non-HR managers] tend to think the population is healthier and more well than the HR folks,” Serxner says. “So they may not think there is as much of a problem as the people who are closer to the data and understand the health risk condition of the population.”

Optum’s survey did find that wellness budgets are not decreasing, but are actually increasing. Twenty-eight percent of employers increased their wellness program budgets, according to the survey, up from 22% last year.

Serxner says advisers should use the data gathered in this study to help ground their clients in respect to what is happening within the client’s respected industry and with their peers.

“Clients will ask, ‘where do I sit in terms of culture of health, how am I doing with how I am investing my money,’ and what we find is it is very helpful to share some of these benchmarks about what other clients are doing and what the trend over time has been,” Serxner says.

Optum’s seventh annual workplace study surveyed wellness budgets, return on investment (ROI), incentive strategies and challenges in building a culture of health among companies of all sizes.

Optum surveyed 554 benefit professionals at U.S. companies across a variety of industries, which offer at least two types of wellness programs to employees. The size of respondent companies ranged from 20% small companies with two to 99 employees, to 38% jumbo employers with 10,000 or more employees.

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