Is PEPM a cost-effective method for accessing telehealth? EBA

These costs vary from month to month based on health care use by covered persons (ie. employees and family and/or dependents). These could vary based on routine dr appts to emergency room or urgent care visits. In self-funded health plans the employer takes on the financial risk of the plan. Dissecting the numbersWith the 20% utilization cited above, a business with 100 employees and a 20% utilization rate would be allowed 20 telehealth consults in a year’s time. In Powell’s post cited above, the author presents an example of a client with 40,000 employees who had access to a second opinion program. Out of all employees, only 140 used the service in one year, which means the utilization rate was less than 0.4 percent.

  • Having to wait weeks or months for an appointment can lead to worsening mental health symptoms or employees foregoing care altogether.
  • This could include access to a knowledgeable customer support team or educational materials.
  • It is for informational purposes only and is not guaranteed as to accuracy, and may not reflect our current opinion.
  • PEPM stands for “Per Employee Per Month.” It refers to the pricing model used by payroll service providers, where businesses pay a fixed monthly fee for each employee on their payroll.

For instance, we have found that many brokers are limited in their offerings, yet they charge the same as those providing comprehensive services. Transparency allows you to assess your return on investment in your broker relationship. CRC is a philosophy that guides mental health providers toward fully seeing and valuing clients for all aspects of their identity, background, and experiences. It makes mental health care more accessible and effective for under-represented populations. The first payroll company, ADP, started using the per transaction pricing model in the 1970s.

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With poor-quality treatment, employees don’t receive the right kind of care for their needs, for the length of time needed to feel better, which makes it difficult to perform their best at work. Nearly all companies (93 percent) offer an employee assistance program, but only about half of workers know it’s available to them. Because EAP services are often bundled with other products and poorly communicated, many employees don’t know they exist or don’t see how the services can help with their specific issues.

Furthermore, a no-PEPM model will likely offer better ROI that can be realized from Day 1 of usage. With this model, a consistent utilization rate of 1.5 to 3 percent has been reported; and in some complex cases, it increased beyond 20 percent (Powell, 2014). The changeover to a PEPM billing model by some providers has shed some light on to the drawbacks that come with this model that may prove to be disadvantageous for some businesses.

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When employees can find a provider of the same race or ethnicity as them, they’re more likely to seek care and stay engaged in treatment. But only 12% of providers in the U.S. identify as Black, Indigenous, and people of color (BIPOC). All the care in the world is meaningless if it doesn’t help ease mental health symptoms. Having third-party validation translates into peace of mind that employees will, in fact, feel better. The only advantage of the PEPM model is for the payroll provider because they make more money with this model.

Does the Corporate Wellness PEPM Model & PMPM Model Support Meaningful Utilization of Corporate Wellness Programs?

With the cost per transaction model, it can be challenging to accurately predict and budget for payroll expenses. Since the fees are based on the number of transactions, costs can vary from month to month, making financial planning more complex. Unexpected spikes in transaction volumes, such as during peak hiring seasons or workforce expansions, can result in significantly higher costs.

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This makes it convenient for businesses with fluctuating workforce requirements, seasonal employees, or if they need to quickly adapt to market changes. The average weekly base fee is $170, while the average bi-weekly or semi-monthly base fee is higher at $240. Just as medical doctors specialize in different types of care, so do mental health providers. To be effective, employees need the right kind of care for their specific needs. Organizations partner with an external, third-party vendor and design an EAP program based on their needs and budget.

Why Are There Two Pricing Models for Payroll Services?

The term member includes any spouses or dependents that may be on an individual employee’s policy, so the premiums could be more expensive if several employees select plans with coverage for dependents. Connecture just announced it’s partnership with Strategic Health Services to provide the integrated model in its solution offerings. Zero consult means members and their dependents pay ZERO out of pocket – unlimited. Telehealth consults are not tied to insurance – move acute primary care visits from brick and mortar to virtual visits, saving claims costs.

Engagement Is Not Magic

Companies partner with external service providers, paying only for the specific services their employees use. Per employee per month prices for a telemedicine benefit typically range from $2 to $15. On top of the PEPM, many providers charge $20 to $50 per consultation fees to the employee. I’ve been thinking lately about how employers pay their healthcare vendors for various consumer-oriented services. In many ways it just doesn’t make sense, especially as we move into a value-based environment.