by Kerrigan Reid

Applying Employer Lessons of Providing Health Benefits to Debt Free Educational Assistance Programs

With emerging employer interest[1] in providing access to debt free educational assistance benefits (i.e., employer directly pays the cost of tuition and fees as opposed to the traditional educational reimbursement benefit) to attract and retain employees and build the capabilities of the workforce, employers should consider and apply the painful lessons of providing health care benefits to employees before offering enhanced education assistance programs.

Quality: Just as employers and plan administrators do not rely on U.S. News and World Report for quality indications of hospitals and physicians, the same applies to colleges and universities.  Employers have attempted unevenly to address health care quality (e.g., patient safety, care coordination, treatment patterns) and disparities in care (i.e., differences in treatment and outcomes by patient race, ethnic group, gender, and income) with the introduction of tools and patient support services.  With an emerging benefit, employers with their university and plan administration partners have the opportunity from the outset to map out criteria or accreditation requirements for participating colleges, universities, and certification programs along with additional quality measures that address class size and student interaction, instructor competency, academic advising, time to credential/degree, and curriculum structure.

Transparency: Employers lack access to detailed information on provider/hospital and pharmacy billing and rebates, administrative fees (e.g., shared savings) on poorly defined “negotiation” practices, and intermediary revenue streams (e.g., supplemental commissions, placement fees, pay to play schemes).  Education has the advantage over healthcare where the list price of tuition and fees is actually published (see any university website). Like healthcare, education has its own maze of discounts that materialize in college grants/scholarships, financial aid, and in-state tuition.  Employers with deep pockets that are part of a group purchasing model should not pay the list price for employees participating in debt free educational assistance programs.  Full disclosure and itemization of the components of the tuition and fee net cost plus detailed accounting of administrator/consultant revenue streams are integral components to avoid the current health benefit scenario.

Cost Guarantees: There are no guarantees on health benefit costs (service level agreements as a percentage of supplier fees don’t count).  Employers continue to pay escalated costs with no visible evidence on the improvement of patient outcomes.  With the cost of college tuition (5.4% annual increase) and fees outpacing medical services (4.2% annual increase) over the last 30 years[2], employers should focus on negotiating and measuring guarantees on factors like completion percentage, graduation rates, employee performance, and workforce retention and skills to balance the financial liability with positive workforce returns.

Employees: Employers offer health care benefits to employees/patients who often lack “…ability to find, understand, and use information and services to inform health-related decisions and actions for themselves and others.”[3] Similarly, employers should expect employees/students who may benefit from a debt free educational assistance program to need ongoing academic support in addition to guidance balancing the education time commitment with work and family responsibilities.

Expanded education assistance programs like health benefits have the power to transform the workforce and the employment relationship.  However, education like healthcare is big business. Before becoming the checkbook for tuition and fees, employers should seek equitable partnerships with plan administrators and higher education that focus on quality, transparency, cost guarantees, and student employees.

For more information contact Bill Kerrigan at info@kerriganreid.com

This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The comments in this summary are based upon Kerrigan Reid’s preliminary analysis of publicly available information. The content of this document is made available on an “as is” basis, without warranty of any kind. Kerrigan Reid disclaims any legal liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Kerrigan Reid reserves all rights to the content of this document.

[1] Employers like Target, Starbucks, Amazon, Walmart have introduced programs

[2] Bureau of Labor Statistics, CPI for All Urban Consumers (CPI-U) for College tuition and fees and Medical services

[3] U.S. Department of Health and Human Services, Healthy People 2030, What is Health Literacy? 

by Kerrigan Reid

Employee Benefits and the Mail

Benefit Managers spend countless hour perfecting annual enrollment messages and choreographing the communication calendar.  Any delay in timing compromises an employee’s ability to act and make the right benefit elections for the year ahead.  Benefit Managers rely on an efficient postal service for the delivery not only of employee communications, but also prescriptions, ID cards, and payments.  

Annual Enrollment: Although employers have shifted to digital benefit communications in recent years, traditional print by mail pieces continue to be utilized for targeted audiences (e.g., retirees, COBRA eligible, employees on leaves of absence, and spouses) that lack access to corporate email addresses.  Mail reliability concerns coupled with COVID-19 provides an opening for benefit managers to evaluate often significant communication budgets and consider alternative and greener channels to deliver messages to members.  Additionally, Benefit Managers may want to revisit post-enrollment grace periods to provide employees additional leeway to make benefit changes and elections for 2021.

ID Cards: Once annual enrollment elections are made, very few benefit managers sleep or open the New Year’s Eve champagne until the carrier or TPA confirms successful delivery of new ID cards.  Taking proactive steps to encourage benefit administrators to share employee benefit elections with the carriers earlier in the timeline and pushing digital forms of ID cards to members before the start of the year mitigates the risk of delayed mail.

Mail Order Prescriptions: PBM mail order pharmacies dispense a significant number of prescriptions to members fueled by prevalent benefit programs design provisions (e.g., mandatory mail, reduced employee mail cost sharing).  With the reliance on mail delivery, Benefit Managers should engage their PBM to understand and monitor how USPS reliability questions are impacting the timely delivery of prescriptions to members.  Benefit Managers can assess whether any steps are necessary to ease any pressures on medication access (e.g., suspending mandatory mail order rules, allowing 90-day supplies of maintenance medications through retail channels) while balancing with financial and PBM contractual requirements.

Payment and Invoices: Not all benefit financial transactions are electronic. Benefit departments regularly receive payments from 3rd party suppliers related to pharmacy rebates, performance guarantees, and implementation credits by regular mail.  With internal company mailrooms often inefficient and greater remote working, the risk of undelivered or misplaced mail increases the potential impact to company cash flow.  Revisiting financial setup with suppliers improves operational efficiencies and diminishes the risk.

Although politics and pandemics are often not the source for the reevaluation of traditional approaches to employee benefit delivery, Benefit Managers can take steps now to collect data, plan contingencies, and improve existing processes to avoid carrying over the hazards of 2020 into 2021.

For more information about Kerrigan Reid, contact Bill Kerrigan at bill.kerrigan@kerriganreid.com.

This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The comments in this summary are based upon Kerrigan Reid’s preliminary analysis of publicly available information. The content of this document is made available on an “as is” basis, without warranty of any kind. Kerrigan Reid disclaims any legal liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Kerrigan Reid reserves all rights to the content of this document.