Insider News: Dec. 5, 2019

This week in Insider News we have information on tax provisions relevant to employers, a study on stress and health insurance decisions, and an article on how Amazon's entrance into health care may push other carriers to adapt.

As part of its annual inflation adjustments, the IRS released information for more than 60 tax provisions to be applied in 2020. The payroll-related provisions include increases in:

• Exempt amount of wages, salary, or other income to apply to tax levies for years when the personal exemption amount is zero
• Foreign earned income exclusions
• Adoption tax credits
• Health flexible-spending arrangement limits
• Medical savings-account adjustments pertaining to a high-deductible health plan
• Earned Income Credit for qualifying taxpayers who have at least three qualifying children
• Standard deduction for married filing jointly, single taxpayers and married individuals filing separately, and heads of households

The provisions also include some penalty amounts for failing to file tax returns and deposit taxes. The personal exemption will stay at zero, unchanged from 2019.

Aflac reveals employees stressed by health insurance decisions, influenced by family history

American workers are stressed about understanding what health insurance they need and enrolling for benefits. They also are less satisfied with their overall benefits packages but factor family history into health insurance decisions, according to the 2019 Aflac WorkForces Report. Key findings include:

• Nearly six out of 10 employees say understanding the insurance or benefits they need is somewhat or very stressful, more than six in 10 say negotiating medical billing is somewhat or very stressful and 43% say enrolling in health insurance is somewhat or very stressful.
• One-quarter of employees report leaving a job or turning down a job offer due to the benefits offered, similar to 25% in 2018.
• Almost three-quarters (73%) of employees said their family history is somewhat to extremely influential in guiding their health insurance decisions. In addition, 84% would be likely to purchase insurance to help cover costs associated with a serious illness in their family history.
• Less than half of workers (46%) have a solid understanding of their annual cost for health care coverage and care. More than one-third (35%) have a full understanding of their health insurance policy.
• More than one in five (22%) didn't feel confident they understood everything they signed up for after their most recent benefits enrollment, up from 19% in 2018.

Amazon's focus on health care should push traditional payers to adapt 

The retailer's moves into the health care space, including the Health Navigator and PillPack acquisitions, are putting the spotlight on health insurance leaders who should be bracing for industry changes. Insurers are encouraged to look at its success in the broad consumer space for a preview of what's to come and focus their efforts on how established players can adapt to remain competitive:

• Data knows best: By collecting information on a customer's past behavior, companies like Amazon or Netflix can accurately predict future preferences and needs. In health care, that means capturing data from claims, providers, pharmacies and user behavior and then crunching it to understand the customer's next-best-action.
• Convenience is king: Amazon Prime's one-day (or less) free delivery has transformed e-commerce and laid waste to the brick-and-mortar retail business. That level of convenience is lacking in health care.
• Touch of a button: Modern consumers expect dynamic, intuitive, easy-to-use digital interfaces. Health insurance companies have thus far struggled to deliver. Payers' ability to attract and retain members will depend largely on how easy they can make it for members to engage with and use their benefits on digital devices.