It has been previously discussed that President Biden announced an end to the COVID-19 Public Health Emergency (PHE) and National Emergency (NE) periods on May 11, 2023, and the practical ramifications for employer group health plan sponsors as they administer COBRA, special enrollment, and other related deadlines tied to the end of the NE. As discussed, this action generally meant that all applicable deadlines were tolled until the end of the NE plus 60 days, or July 10, 2023, with all regular (non-extended) deadlines taking effect for applicable events occurring after that.
A Change in the National Emergency End Date
A new wrinkle recently added a potential complication to calculating these deadlines. President Biden signed H.R. Res. 7 into law on April 10, 2023, after Congress jointly introduced H.R. Res. 7 as a one-line action to end the NE, effective immediately. The consequence is that the applicable end of the transition relief is now June 9, 2023 (60 days following April 10, 2023) instead of July 10, 2023, as previously anticipated. The Department of Labor (DOL), however, has informally announced that despite the statutory end of the NE being 30 days earlier than expected, to avoid potential confusion and changes to administrative processes already in progress, the deadline of July 10, 2023, will remain the relevant date for COBRA, special enrollment, and other related deadlines under previous guidance. Prophetically, updated FAQs, released March 29, 2023, by the DOL, Department of Treasury, and Department of Health and Human Services (the Agencies), provide, “the relief generally continues until 60 days after the announced end of the COVID-19 National Emergency or another date announced by DOL, the Treasury Department, and the IRS (the “Outbreak Period”). [emphasis added]” Further clarification and formal guidance are still expected.
Updated DOL FAQ Guidance
Most employers rely on third-party vendors and consultants to help administer COBRA, special enrollments, claims, appeals, etc. All should be aware of the impact the end of the NE and PHE has on all applicable deadlines. The FAQs provide at Q/A-5 specific examples to help employers, consultants, and administrators apply the end of NE and PHE deadlines and different scenarios related to COBRA elections and payments before and after the end of the Outbreak Period, special enrollment events, Medicaid election changes, etc. The FAQs also make clear that employers are encouraged to consider extending these deadlines for the current plan year. Employers should discuss the impact of this guidance with their vendors and consultants to ensure all parties comply with the upcoming transitional periods.
The FAQs also confirm (at Q/A 1-4) the impact of the end of the PHE on COVID-19-related testing and diagnostic procedures, noting that as of the end of the PHE on May 11, 2023, group health plans are no longer required to provide certain COVID-19 related coverage at 100 percent under the plan, but can revert to previous cost-sharing and deductible limitations that existed before the COVID-19 pandemic. Note that President Biden’s recent action approving the end of the NE on April 10, 2023, has no impact on the previously communicated end to the PHE on May 11, 2023. Employers should review changes in coverage of COVID-19 testing and other related treatment or procedures with their insurance carriers, consultants, and advisors, including any notices that may be required in connection with those changes. The DOL confirmed that while encouraged to do so, employers do not have to provide any separate notification of any changes in current coverage limits before the PHE end date unless the employer had previously disclosed a different level of coverage in its current Summary of Benefits and Coverage (SBC) provided during the most recent open enrollment period.
COVID-19 Testing and Treatment Under High Deductible Health Plan/Health Savings Accounts
Q/A-8 of the FAQs provides interim clarification regarding the impact of the end of the PHE on high-deductible health plans (HDHPs) that are tied to health savings accounts (HSAs) and the ability to provide medical coverage for COVID-19 testing or treatment without requiring an employee to satisfy applicable HDHP deductibles for HSA contribution purposes. Even though IRS Notice 2020-15 provided relief from general deductible limitations under Code Section 223(c)(1) through the end of the PHE, the Agencies have determined this relief will remain in effect after the end of the PHE and until the IRS issues further guidance.
The recorded presentation of AAG’s 2023 Educational Seminar held on April 11, 2023 is now available for viewing.
Guest Speaker and Attorney Keith Hammond, of Hammond Law Center, focused on changes in employment law that have occurred over the past year including a few new regulations that could affect your business which will go into effect this summer as well as non-competes and changes from the DOL, NLRB, and OSHA.
This seminar is also approved for 2 Professional Development Credits (PDCs) with SHRM for all attendees.
Since ChatGPT’s launch in November 2022, many HR professionals have used the generative artificial intelligence tool to perform some of their daily tasks. While anxiety remains about “robots taking our jobs,” ChatGPT can make HR professionals more productive, freeing them up from repetitive tasks and allowing them to spend more time on strategic work. However it still needs to be used selectively and with caution to avoid a costly mistake.
ChatGPT as an HR Tool
Like any emerging technology, ChatGPT offers both benefits and risks. Using it effectively requires a willingness to learn and experiment. “ChatGPT saves me hours of work every week and boosts my productivity,” said Declan Daly, managing partner at Bundoran Group, a recruitment agency. “I’m constantly discovering new ways to use it in my work.”
Caroline Reidy, managing director of The HR Suite, an HR services firm, shares Daly’s enthusiasm for ChatGPT: “You might not get perfect results every time you use it, but generating a quick, working draft with ChatGPT can significantly reduce the time you spend on document development and other administrative tasks.”
However, relying uncritically on ChatGPT without performing a careful, human review of its generated content has some large potential risks. ChatGPT’s generated content may sound reliable, but it’s also generic and historical. Generative AI can synthesize what others may have said in the past, but it can’t offer specific guidance about what your company should do now in a specific circumstance. Organizations will always need HR professionals who can do their own thinking.
Common HR Tasks ChatGPT Can Perform
People are already paying attention to ChatGPT for its ability to write job descriptions. LinkedIn, for example, just announced it will soon introduce a feature enabling AI-written job posts. Here are six other HR tasks the tool can help HR professionals perform:
1. Recruiting. “You can use ChatGPT to generate relevant interview questions to ask candidates for roles you aren’t familiar with.You can also ask for the average salary for specific jobs or common benefits that are offered by other industries for a particular role, narrowed down by geography.
2. Onboarding. HR professionals can set up ChatGPT to give real-time support to new hires by answering questions about company policies, procedures and benefits, as well as offer them guidance on completing necessary paperwork.
3. Administrative tasks. ChatGPT can help HR professionals craft and send announcements and reminders to employees about events, such as training programs. The AI tool can also be used to write all sorts of documents (from handbooks to policy memos and beyond), as well as send automatic e-mail responses.
4. Employee self-service. ChatGPT can be leveraged to build conversational chatbots, providing instant support for common questions about benefits, vacation policies and payroll. More complex employee issues can be escalated from self-service tools to an HR professional for follow-up. The human follow-up could be blended with ChatGPT as well.
5. Employee surveys. You can ask ChatGPT to craft survey questions for measuring employee engagement. ChatGPT enables you to conduct companywide polls to gauge opinions on specific workplace issues, such as the pros and cons of hybrid work and the viability of a four-day workweek.
6. Performance reviews. ChatGPT can help with performance management by supplying HR professionals and managers with instructions on how to conduct performance appraisals and by responding to inquiries from employees about performance metrics.
Maximizing ChatGPT’s Benefits, Reducing Risks
ChatGPT’s generated content comes from the Internet and can be inaccurate or biased. For example, if the source data ChatGPT scours through says “The moon is made of yellow cheese,” its generated content would reflect that. HR professionals can provide ChatGPT with detailed source information, including employee data, internal company knowledge bases and HR policies or procedures, to generate customized content and answer questions.
Another challenge in using ChatGPT is that generated content can have the wrong tone. “As an HR professional, you sometimes work on sensitive topics where automating replies might work against you,” said Ryan Faber, founder of Copymatic, an AI-based business writing platform. “Sensitive tasks such as layoffs and terminations should never be handed over to ChatGPT, because human empathy and nuance are required.”
Finally, the generated content might not comply with data privacy or other legal standards in HR. Again, be sure to review what ChatGPT writes to make sure the content is useable and compliant.
Trust, But Verify
What former President Ronald Reagan once said about negotiating with the Soviet Union also applies to using ChatGPT: “Trust, but verify.” Many HR professionals recommend using ChatGPT as a starting point, but would still speak to an expert or refer to another data source for verification of what the tool generates.
Being able to use ChatGPT effectively, and with the right safeguards and controls in place, will become an essential HR skill moving forward. It will take some time for HR professionals and organizations to become good at using the tool.
At the end of the day, ChatGPT is an important HR tool that should be deployed critically and selectively for HR tasks, with a clear-eyed understanding of its strengths and weaknesses.
On February 21, 2023, the IRS released Final Rules amending the existing requirements related to mandatory e-filing of information returns, including Forms 1094-C and 1095-C, among others. The final rules are effective for all applicable returns due on or after January 1, 2024. While the final rule requires electronic filing for a number of different information returns, such as Forms W-2 and 1099, which were previously allowed to be paper filed by employers of a certain size, this alert addresses the changes applicable to Forms 1094 and 1095, which must be filed by applicable large employers (ALEs) as well as non-ALEs that sponsor self-funded health plans.
Under the final rules, employers filing 10 or more returns must file Forms 1094 and 1095 (and their other applicable returns) electronically. The 10-form threshold is determined based on the total number of forms the employer must file with the IRS, including the Forms 1094 and 1095, as well as other information returns, such as Forms W-2 and Forms 1099, income tax returns, excise tax returns, and employment tax returns, including those that are not required to be e-filed, such as forms 940 and 941. Previously, employers that filed less than 250 of the same ACA reporting forms were allowed to choose whether to file their applicable Forms 1094 and 1095 (either the B or C forms, as applicable) by paper or electronically.
The final rules allow employers to seek a waiver in cases of undue hardship. Per the final rules, a key factor in determining whether hardship exists is whether the cost for filing the returns electronically exceeds the cost of filing the return on paper. Entities seeking a waiver must specify the type of filing to which the waiver applies, the period to which it applies, and the entity must follow any applicable procedures, publications, forms, instructions, or other guidance, including postings to the IRS.gov website, when requesting the waiver. Further, the final rules allow the IRS to grant exemptions from the requirements in certain instances.
All ALEs and many non-ALEs (that report due to sponsoring a self-funded health plan) will be impacted by these changes and will be required to file their tax year 2023 Forms 1094 and 1095 electronically unless they seek and are granted a hardship exception by the IRS. Impacted entities should take the time between now and next year to engage a filing vendor that can assist them with their electronic filing obligations.
On February 23, 2023, the Departments of Labor, Health and Human Services and the Treasury (Departments) issued FAQs on the prohibition of gag clauses under the transparency provisions of the Consolidated Appropriations Act, 2021 (CAA). These FAQs require health plans and health insurance issuers to submit their first attestation of compliance with the CAA’s prohibition on gag clauses by December 31, 2023.
Effective December 27, 2020, the CAA forbids health plans and issuers from entering into contracts with health care providers, third-party administrators (TPAs) or other service providers that would restrict the plan or issuer from providing, accessing or sharing certain information about provider price and quality and deidentified claims.
Plans and issuers must annually submit an attestation of compliance with these requirements to the Departments. The first attestation is due by December 31, 2023, covering the period beginning December 27, 2020, through the date of attestation. Subsequent attestations, covering the period since the last attestation, are due by December 31 of each following year.
Employers should ensure any contracts with TPAs or other health plan service providers offering access to a network of providers do not violate the CAA’s prohibition of gag clauses. Additionally, employers with fully insured or self-insured health plans should prepare to provide the compliance attestation by December 31, 2023. If the issuer for a fully insured health plan provides the attestation, the plan does not also need to provide an attestation. Also, employers with self-insured health plans can enter into written agreements with their TPAs to provide the attestation, but the legal responsibility remains with the health plan.
A gag clause is a contractual term that directly or indirectly restricts specific data and information that a health plan or issuer can make available to another party. Effective December 27, 2020, the CAA generally prohibits group health plans and issuers offering group health insurance from entering into agreements with health care providers, TPAs or other service providers that include certain gag clause language. Specifically, these contracts cannot restrict a plan or issuer from:
For example, if a contract between a TPA and a health plan provides that the plan sponsor’s access to provider-specific cost and quality-of-care information is only at the discretion of the TPA, that contractual provision would be considered a prohibited gag clause.
Plans and issuers must ensure their agreements with health care providers, networks or associations of providers, TPAs or other service providers offering access to a network of providers do not contain provisions that violate the CAA’s prohibition on gag clauses.
Health plans and issuers must annually submit an attestation of their compliance with the CAA’s prohibition on gag clauses to the Departments. The first attestation must be submitted no later than December 31, 2023, covering the period beginning December 27, 2020, through the date of the attestation. Subsequent attestations are due by December 31 of each following year, covering the period since the last attestation.
According to the Departments’ FAQs, health plans and issuers that do not submit their attestations by the deadline may be subject to enforcement action.
The attestation requirement applies to fully insured and self-insured group health plans, including ERISA plans, non-federal governmental plans and church plans. Additionally, this requirement applies regardless of whether a plan is considered “grandfathered” under the ACA. However, plans that only provide excepted benefits and account-based plans, such as health reimbursement arrangements (HRAs), are not required to submit an attestation.
With respect to fully insured group health plans, the health plan and the issuer are each required to submit a gag clause compliance attestation annually. However, when the issuer of a fully insured group health plan submits a gag clause compliance attestation on behalf of the plan, the Departments will consider the plan and issuer to have satisfied the attestation submission requirement.
Employers with self-insured health plans can satisfy the gag clause compliance attestation requirement by entering into a written agreement under which the plan’s service provider, such as a TPA, will provide the attestation on the plan’s behalf. However, even if this type of agreement is in place, the legal requirement to provide a timely attestation remains with the health plan.
The Departments launched a website through the Centers for Medicare and Medicaid Services for health plans and issuers to submit their gag clause compliance attestations. The Departments have also provided instructions for submitting the attestation, a system user manual, and a reporting entity Excel template for plans and issuers to submit the required attestation, all of which are available here.
March is National Nutrition Month and an excellent time to talk about healthy eating.
Not only that, it’s a great way to spread awareness about a healthy lifestyle and smart dieting in the workplace.
Given that 42% of Americans are considered obese, it’s essential to tackle this topic in workplace health programs. Obesity leads to serious, chronic health issues like heart disease, diabetes, and even some cancers, according to the Centers for Disease Control and Prevention (CDC).
For workplaces, this can lead to issues with employee absences, increased healthcare costs, and lowered productivity.
Below, explore 21 unique and fun ways to talk about nutrition this month!
Each year in March, the Academy of Nutrition and Dietetics invites the public to learn more about nutrition. The annual campaign was created by the academy to inspire individuals to develop healthy eating habits and make informed food choices.
The 21 ideas below are easy ways to get talking about smart eating habits at work.
The theme for this year’s National Nutrition Month is “Celebrate a World of Flavors.” Highlight employees’ heritage and cultural customs around food this month by having them bring in specialty dishes that are unique to their culture. Doing so offers a special, inclusive event that can open up discussion about both nutrition and culture.
Not surprisingly, there are a ton of ways to get free, reputable nutrition facts to share with your employees. Check out the printable resources you can hang up around the workplace or email to workers on the Nutrition.gov site. Get insight on everything from recipes to food waste prevention to food safety information.
There’s a longstanding rumor that eating well is costly. With the U.S. Department of Agriculture (USDA)’s free Shop Simple app, it makes it easier to eat well for less. Not only does it locate stores that accept SNAP, but it also provides budget-friendly recipes for all budgets. One of the best parts of the app? It also shows local farmers market events.
Everyone could eat more fruits and veggies, right? Each week, this challenge offers a goal to hit within seven days — starting simple with eating at least one fruit and veggie the first week and progressing from there. The ultimate goal is to aim for five fruits and veggies daily!
It’s easier than it sounds, we promise. Plus, there’s no doubt you have at least one green thumb in the office who loves to garden! Aside from learning more about how natural food grows, research shows that gardening also helps alleviate issues like depression, too. That’s a double workplace wellness win. Check out our post, The TotalWellness Garden Project for more details on starting one!
If you have an adventurous office, a blind taste test contest can be a lot of fun. Have plates of healthy foods like guava, pickles, kimchi, jicama sticks, and more. Blindfold two “contestants” and have them try the foods. Whoever guesses the most foods correctly wins a grocery gift card. Do a few rounds with different foods to let the employees who want to participate do so. Just be sure to ask about food allergies!
Create a punch card or stamp card that your team members can use for National Nutrition Month. For every meal they eat a fruit and veggie, they get a stamp. After 30 stamps or punched spots, offer them a reward like a grocery gift card.
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The U.S. Department of Labor (DOL) has issued guidance on the application of the Fair Labor Standards Act (FLSA) and Family and Medical Leave Act (FMLA) to employees who telework from home or from another location away from the employer’s facility.
The Field Assistance Bulletin (FAB) 2023-1, released on February 9, 2023, is directed to agency officials responsible for enforcement and provides employers a glimpse into how the DOL applies existing law and regulations to common remote-work scenarios. FAB 2023-1 addresses FLSA regulations governing “hours worked,” rules related to break time and privacy for nursing employees, and FMLA eligibility factors.
Hours Worked
In the FAB, the DOL reviews the rules governing compensability of work time, explaining that, regardless of work location, short breaks (typically, 20 minutes or less) generally are counted as compensable hours worked, whereas, longer breaks “during which an employee is completely relieved from duty, and which are long enough to enable [the employee] to use the time effectively for [their] own purposes[,] are not hours worked.” Examples of short breaks, whether at home or in the office, include when an employee takes a bathroom or coffee break or gets up to stretch their legs.
Longer rest breaks and periods of time, when employees are completely relieved from duty and able to use the time for their own purposes, are not considered work time. Just as would be the case when an employee is working in the office, if during remote work an employee’s 30-minute lunch break is interrupted by several work-related phone calls, that 30-minute period would be counted as hours worked. Conversely, if an employee working from home takes a three-hour break to pick up their child or to perform household chores, that time does not count as work time under the FLSA. In short, the FAB reiterates the telework guidance set forth by the DOL in a Q&A series published during the height of the COVID-19 pandemic.
The FAB emphasizes that, regardless of whether an employee performs duties at home, at the worksite, or at some other location, if the employer knows or has reason to believe that work is being performed, the time must be counted as hours worked. Importantly, the FAB notes that an employer may satisfy its obligation to exercise reasonable diligence to acquire knowledge regarding employees’ unscheduled hours of work by providing a reasonable reporting procedure for employees to use when they work non-scheduled time and paying employees for all hours worked. This guidance was addressed in greater detail in FAB 2020-5.
Guidelines for Nursing Employees
The FAB further clarifies that, under the FLSA, an employer’s obligation to provide employees “reasonable break time,” as well as an appropriate place to express breast milk, extends to employees who are teleworking or working at an off-site location. Just as an employer has an obligation to provide an “appropriate place” for an employee to express milk while working at a client site, the employer should ensure a teleworking employee has privacy from a “computer camera, security camera, or web conferencing platform” to express milk.
Employers are not required to pay employees for otherwise unpaid breaks simply because the employee is expressing breast milk during the break, but if an employee is working while pumping (or if the pumping occurs during an otherwise paid break), they must be paid for that time. For example, in most cases, if a remote employee attends a call or videoconference off camera while pumping, that employee would be considered on duty and must be paid for that time.
The recently enacted PUMP Act expanded existing employer obligations under the FLSA to cover exempt employees, as well as non-exempt employees. The DOL has published more guidance on breast milk pumping during work.
Eligibility Under FMLA
The DOL also addresses FMLA eligibility requirements for remote employees both in terms of hours worked (employee must work 1,250 hours in the previously 12 months) and the small worksite exception (employee must work at a worksite with at least 50 employees in a 75-mile radius).
As with the FLSA, it is important for employers to have a system to track their remote workers’ hours. With respect to hours worked, the FAB reiterates that the 1,250 hours determination for remote worker is based on compensable hours of work under FLSA principles.
With respect to the worksite size determination, the FMLA regulations explain that an employee’s personal residence is not a worksite. Instead, whether a remote employee is FMLA-eligible is based on the size of the worksite from which “they report to” or “their assignments are made.” If a remote employee reports into or receives assignments from a site with 50 or more employees working at that site (or reporting to or receiving assignments from that site) or within 75 miles, then that employee would meet that eligibility factor.
The DOL provided two examples of this rule:
Employers are reminded to review state and local wage and hour laws, paid and unpaid leave laws, and lactation accommodation laws. If you have any questions about applying the FLSA, the FMLA, or state and local laws to your remote workers or any other questions about remote work considerations, please reach out to any Jackson Lewis attorney.
The COVID-19 Outbreak Period was declared effective on March 1, 2020. It had numerous impacts upon employee benefit plans, extending timelines with which plan participants and plan sponsors/employers had to perform certain benefit-related activities. On January 30, 2023, President Biden declared he would end the National Emergency effective May 11, 2023.
To recap, the declaration of the Outbreak Period impacted benefit plans in many ways by instructing ERISA plans and participants to disregard the Outbreak Period for:
However, it is important to note that ERISA contains language limiting timeline extensions to no more than one year. Thus for example, the normal 60-day timeframe for a an eligible Qualified Beneficiary to elect COBRA continuation coverage was extended by the Outbreak Period to one year plus 60 days.
With the declaration of the end of the National Emergency on May 11, 2023, the 60-day clock to end the Outbreak Period will start. This means that effective on July 10, 2023 (60 days after the end of the National Emergency) all of the pre-pandemic rules impacting the above items (and others) will go back to their normal timeframes.
Need medical treatment this year and want to nail down your out-of-pocket costs before you walk into the doctor’s office? There’s a new tool for that, at least for insured patients.
As of Jan. 1, 2023, health insurers and employers that offer health plans must provide online calculators for patients to get detailed estimates of what they will owe — taking into account deductibles and copayments — for a range of services and drugs.
It’s the latest effort in an ongoing movement to make prices and upfront cost comparisons possible in a business known for its opaqueness.
Insurers must make the cost information available for 500 nonemergency services considered “shoppable,” meaning patients generally have time to consider their options. The federal requirement stems from the Transparency in Coverage rule finalized in 2020.
So how will it work?
Patients, knowing they need a specific treatment, drug, or medical service, first log on to the cost estimator on a website offered through their insurer or, for some, their employer. Next, they can search for the care they need by billing code, which many patients may not have; or by a general description, like “repair of knee joint,” or “MRI of abdomen.” They can also enter a hospital’s or physician’s name or the dosage amount of a drug for which they are seeking price information.
Not all drugs or services will be available in the first year of the tools’ rollout, but the required 500-item list covers a wide swath of medical services, from acne surgery to X-rays.
Once the information is entered, the calculators are supposed to produce real-time estimates of a patient’s out-of-pocket cost.
Starting in 2024, the requirement on insurers expands to include all drugs and services.
These estimator-tool requirements come on top of other price information disclosures that became effective during the past two years, which require hospitals and insurers to publicly post their prices, including those negotiated between them, along with the cost for cash-paying or uninsured patients.
Still, some hospitals have not fully complied with this 2021 disclosure directive and the insurer data released in July is so voluminous that even researchers are finding it cumbersome to download and analyze.
The price estimator tools may help fill that gap.
The new estimates are personalized, computing how much of an annual deductible patients still owe and the out-of-pocket limit that applies to their coverage. The amount the insurer would pay if the service were out of network must also be shown. Patients can request to have the information delivered on paper, if they prefer that to online.
Insurers or employers who fail to provide the tool can face penalty fines of at least $100 a day for each person affected, a significant incentive to comply — if enforced.
And there are caveats: Consumers using the tools must be enrolled in the respective health plan, and there’s no guarantee the final cost will be exactly as shown.
That’s because “unforeseen factors during the course of treatment, which may involve additional services or providers, can result in higher actual cost sharing liability,” federal regulators wrote in outlining the rules.
Insurers will not be held liable for incorrect estimates.
Because the cost estimates may well vary from the final price, either because the procedure was more complex than initially expected, or was handled by a different provider at the last minute, one risk is that a consumer might get a bill for $4,000 and they will be upset because the estimator told them $3,000.
Many insurers have offered versions of cost-estimator tools before, but small percentages of enrollees actually use them, studies have shown.
Federal regulators defended the requirement for estimator tools, writing that even though many insurers had provided them, the new rule sets specific parameters, which may be more detailed than earlier versions.
In outlining the final rule, the Centers for Medicare & Medicaid Services pointed out that some previous calculators “on the market only offer wide-range estimates or average estimates of pricing that use historical claims data” and did not always include information about how much the patient had accumulated toward an annual deductible or out-of-pocket limit.
The agency says such price disclosure will help people comparison-shop and may ultimately help slow rising medical costs.
But that isn’t a given.
“CMS has a lot of people who believe this will make a significant impact, but they also have a long time frame,” said David Brueggeman, director of commercial health at the consulting firm Guidehouse.
In the short term, results may be harder to see.
“Most patients are not moving en masse to use these tools,” said Dr. Ateev Mehrotra, a professor of health care policy at Harvard Medical School.
There are many reasons, he said, including little financial incentive if they face the same dollar copayment whether they go to a very expensive facility or a less expensive one. A better way to get patients to switch to lower-cost providers, he said, is to create pricing tiers, rewarding patients who seek the most cost-effective providers with lower copayments.
Mehrotra is skeptical that the cost estimator tools alone will do much to dent rising medical prices. He’s more hopeful that, in time, the requirement that hospitals and insurers post all their negotiated prices will go further to slow costs by showcasing which are the most expensive providers, along with which insurers negotiate the best rates.
Still, the cost-estimator tools could be useful for the increasing number of people with high-deductible health plans who pay directly out-of-pocket for much of their health care before they hit that deductible. During that period, some may save substantially by shopping around.
Those deductibles add “pressure on consumers to shop on price,” said Brueggeman, at Guidehouse. “Whether they are actually doing that is up for debate.”