Welcome to this edition of For Your Benefit!
It seems like yesterday that I was writing a similar letter about Open Enrollment, and just like that, another year has passed and here we are again.
I mentioned last year that we would begin making changes that would continue in subsequent years.
Let me start by saying that our plans are remaining the same in that we will offer both the Basic and Enhanced PPOs with both Anthem and Cigna. We will, however, be making some adjustments to deductibles, copayments and out-of-pocket maximums. You can easily see these changes in the chart on page 3. Now, why do we need to increase certain costs in the plan?
As the market has shifted in recent years and employer-sponsored health plans have adjusted to those changes, Pearson has managed to offer very competitive plans. Our deductibles and out-of-pocket maximums are more generous than the benchmark in almost any study we examine. There are, however, a number of factors that make it necessary for us to adjust some plan provisions. Health care costs continue to increase year over year. Some of the largest increases we’re seeing are in the area of specialty drugs – high cost and effective medication to treat conditions like rheumatoid arthritis, multiple sclerosis, cancer and hepatitis-C. These drugs improve the quality of life for patients, and oftentimes keep them out of expensive hospital settings; but they come at a significant cost.
The second major factor is something I’ve been mentioning in this letter the past few years – the impact of the Affordable Care Act (ACA) on our plans. We are making changes for next year, in 2017 and again in 2018 in order to avoid a 40% excise tax on employer-sponsored plans that exceed certain thresholds set by the ACA. Without these changes, that tax can cost millions of dollars each year, and that is something we simply cannot afford.
So, we will continue to do what we have always done: offer competitive plans that take into account our employees, their families, and the many health concerns they are challenged with, while responsibly managing our costs.
I remain convinced that the best way to manage health care costs is to remain as healthy and active as possible while being very mindful of how we use the medical plans as engaged and informed consumers.
Vice President, Benefits