Stop Loss Trend Watch: Fall 2023

Trend 1: Rising costs of health care

Employers continue to navigate a challenging job market. Managing expenses, focusing on health and wellness programs, and driving employee retention are just a few priorities that can be top of mind.

Insights from our leaders:

• Medical costs are projected to rise from 6% in 2023 to 7% in 2024.¹ Providers are expected to seek rate increases due to inflation, increased wages and workforce shortages. Additional drivers are the increasing cost of new and existing drugs, managing long-term complex conditions and chronic disease.²
• Mental health trends that emerged from the COVID-19 pandemic remain a concern for employers, as needs related to mental and behavioral health increased tremendously during that time. The National Institute of Mental Health estimates more than one in five adults in the United States live with a mental illness.³
• Individuals are working past traditional retirement age due to financial necessity, increased life expectancy and the continued need for benefits. As a result, there is an aging population of workers that will require more care in the coming years.

Action steps you can consider:

• A change in sites of care to more cost-effective options, such as home-based health care, telemedicine or outpatient surgery centers. Remote health care increased during the pandemic, leading patients and providers to realize this can continue to be an efficient and less expensive option for routine care.
• A physically and mentally healthy workplace benefits everyone — employers, employees and customers. Discover 3 ways employers can optimize their workplace mental health offering and how a strong focus on mental health can be a differentiator and can help employers attract and retain talent.
• Health Savings Accounts (HSAs) paired with a high-deductible health plan (HDHP) can be a valuable addition to a benefits package. According to a recent consumer sentiment survey conducted by Voya Financial, more than half of employed Americans are more likely to stay with their current employer if offered access to health spending and savings accounts (53%).⁴ Find out 5 ways HSAs can help employees and what employers should know.

Understanding that different strategies work for different employer groups is key. Having a multi-faceted approach can help self-funded employers make strides in efforts to reduce health care costs. We are here to support the total financial wellness needs of your clients’ workplaces.

Trend 2: Advances in cell and gene therapy

We will continue to watch the cell and gene therapy pipeline as we head into 2024. As of June 2023, 32 cell and gene therapies have been approved by the U.S. Food and Drug Administration (FDA), with more than 10 additional approvals expected in the next two years.

Insights from our leaders:

• Recently approved high-dollar treatments (e.g., Hemgenix, Elevidys and Roctavian) are expected to impact Stop Loss claims, along with those that have been on the market for several years.
• Specialty pharmacy programs have emerged for a limited set of cell and gene therapies. These carve-out policies aim to reduce the specified therapies’ impact on the employer’s health plan and applicable Stop Loss coverage.
• While some Stop Loss providers have chosen to carve out or exclude these high-cost treatments, we are keeping cell and gene therapies covered, as long as the underlying medical plan covers the treatment and it meets the terms and conditions of the policy. We also exclude these high-dollar claims from the following year’s renewal package, helping to lower the impact of this cutting-edge care on self-funded employer costs.

Action steps you can consider:

• Stay up to date on the cell and gene therapy pipeline and information related to recent FDA approvals.
• Ensure medical plan documents include clear language regarding cell and gene therapy, to accurately reflect what the plan covers.
• Partner with a Stop Loss carrier that has a firm position on how they handle cell and gene therapy, paired with solutions to help cost contain.

Trend 3: Regulatory changes

With deadlines approaching for additional Transparency in Coverage requirements, challenges with the federal Independent Dispute Resolution (IDR) process and pending new legislation, there is an overwhelming amount of information for employers stay on top of, processes to implement and compliance responsibilities.

Insights from our leaders:

• Near-term deadlines related to Transparency in Coverage rules include initial anti-gag attestation by December 31, 2023, and online cost sharing tool for all goods and services by January 1, 2024.
• Challenges continue to arise with the federal IDR process. IDR was paused temporarily on August 25, 2023, pending guidance from federal agencies, due to litigation in Texas. In addition, the IDR administration fee that increased from $50 in 2022 to $350 in 2023, was reduced back to $50, for disputes initiated on or after Aug. 3, 2023.⁵
• On July 25, federal agencies (DOL, HHS and IRS) announced proposed regulation to strengthen the Mental Health Parity and Addiction Equity Act (MHPAEA), by ensuring people seeking mental health and substance abuse disorder services can access treatment as easily as people seeking medical treatment. They will also expand and provide clarification regarding the NQTL requirements.⁶

Action steps you can consider:

• Monitor regulatory updates to stay informed.
• Confirm requirements to ensure compliance with regulatory and legislative changes that may impact your business.
• Reach out to your Voya team with any questions — we will be keeping an eye on regulatory changes and the impacts to self-funded employers.

Contact your Voya representative to find out more about our Stop Loss Insurance — or for help creating a strategy to help minimize the impact of high-cost medical claims for your organization.