After ACA · •State health insurance marketplaces established •Low income premium subsidy...

After ACA Identifying and Taking Advantage of Your Alternatives

September 3, 2015

After ACA Agenda

• Health Care Reform Update - Timeline

- Health Care Reform At-a-Glance

- Cadillac Tax

- Wellness Incentives

- Other ACA Updates

• Where Do You Go From Here? - Benefit Strategy

- Comparing the Options

- Today’s Top Trends

- Defined Contribution Healthcare

- Private Exchanges

- Tools and Engagement

• Questions

Proprietary and Confidential 2

September 3, 2015

Health Care Reform At-a-Glance

Proprietary and Confidential

Health care reform timeline

for employer group health

plans

2012 2013 2014 2015 2016 2017 2018 2019 2020

40% excise tax on high-cost health

coverage (Cadillac tax) effective

Part D “donut hole” filled

• Health FSA salary reduction contributions capped at $2,500

• Retiree drug subsidy deduction ends

• Comparative effectiveness research tax (PCORI) fees must be paid

• Medicare Hospital Insurance tax increased for high income filers

• Medicare tax applies to investment income of high income filers

• Excise tax on medical device manufacturers

• Employer notice of state insurance exchanges and premium credits

• 60-day advance notice of mid-year changes (Notice of Material Modification) required

• Annual dollar limits prohibited on essential health benefits

• Pre-existing condition exclusions prohibited for all enrollees

• Child coverage to 26 even if eligible for other coverage

• Waiting periods over 90 days no longer permitted

• Coverage of routine patient costs in connection with clinical trials

• Limitations on out of pocket maximums

• Plans may not discriminate against providers with respect to plan participation

• Auto enrollment required (effective date delayed)

• Individual “shared responsibility” provisions effective

• State health insurance marketplaces established

• Low income premium subsidy available for marketplace coverage

• HIPAA wellness incentives limits increased and new rules

• Insurer tax

• Transitional reinsurance program

Provisions in blue italics only apply to new plans or plans that have lost

grandfathered status.

• Uniform summary of benefits and coverage (SBC)

• Form W-2 reporting of health coverage begins

• Self-funded plans must have external appeal contracts

• ERRP funds exhausted

• Plans may begin to receive medical loss ratio (MLR) rebates

Employer “shared

responsibility” provisions States may open insurance

marketplaces to large

employers

Selected provisions for calendar-year plans – note

effective dates may vary for non-calendar year plans

Employer reporting of 2015 health insurance coverage

4 Proprietary and Confidential

Health Care Reform At-a-Glance

Provision Effective date

Health plan provisions applying to both grandfathered and non-grandfathered employer plans

Annual and lifetime

dollar limits

• No lifetime or annual dollar limits on essential health benefits (EHB)

• Not applicable to most FSAs, HSAs, and integrated HRAs

• Self-funded and large group plans must use “authorized” definition of

“essential health benefit” (“benchmark plan”) beginning in 2014

Plan years

beginning on/ after

January 1,

2014 (annual limits

phased in for 2010-

2013)

Extension of child

coverage to age 26

• Up to age 26 for medical coverage regardless of marital or student status,

residence, or support. Excludes stand-alone dental and vision coverage

• Cannot charge more than for other similarly situated individuals

• Beginning January 1, 2014, grandfathered plans cannot exclude children

eligible for other employer coverage

Plan years beginning

on/after September

23, 2010

Income tax exclusion

for child coverage to

age 26

• Exclusion through end of calendar year in which child reaches age 26

• Includes dental, vision, health FSA, and HRA (different rule for HSA)

March 30, 2010

Pre-existing condition

exclusion

• No pre-existing condition exclusions for enrollees Plan years beginning

on/after January 1,

2014

Health Care Reform At-a-Glance – Mandates and Reforms Grandfathered and Non-grandfathered Employer Plans


Health Care Reform At-a-Glance – Mandates and Reforms Grandfathered and Non-grandfathered Employer Plans (cont.)



Waiting periods • Waiting periods over 90 days prohibited Plan years beginning

on/after January 1,

2014

Treatment of OTC

drugs as medical

expense

• Health FSAs, HRAs, and HSAs prohibited from reimbursing cost of OTC

drugs (other than insulin) unless prescribed by a physician January 1, 2011

Health FSA cap • Salary reductions capped at $2,500 in 2013; indexed. In 2015, indexed cap

was $2,550, and it is projected to stay at the same level for 2016 Plan years beginning

on/after January 1,

2013





HIPAA wellness

incentives

• No discrimination regarding eligibility or coverage on the basis of a health

status-related factor. Incentives increased to 30% (and an additional 20%

(up to 50%) for tobacco use) of cost of coverage

Plan years beginning

on/after January 1,

2014

Automatic enrollment • Auto-enrollment required for employee with option to opt out of coverage

• Not enforced until regulations are issued

After regulations are

issued

Marketplace notice • Notice to current employees concerning availability of health insurance

marketplace provided by October 1, 2013, and to all new employees hired on

and after that date

• Model notices include one for employers that offer coverage to some or all

employees and one for employers that do not offer coverage

October 1, 2013





Summary of benefits

and coverage (SBC)

• 4-page, double-sided summary of benefits with a prescribed format, content,

language, and timing must be provided to new enrollees and at open

enrollment

• Latest revisions deferred to 2017

Open enrollment

periods beginning

on/after September

23, 2012

Reporting plan value on

Form W-2

• Total value of medical coverage on an employee-specific basis reported on

Form W-2 issued in January for preceding calendar year

• Some exemptions, such as coverage provided under certain church or

multiemployer plans

Reporting first

required in 2013 for

coverage provided in

2012

Medical loss ratio

(MLR) reporting and

rebates

• Insurers to submit MLR reports to HHS and issue rebates to enrollees in

insured plans in large group market (more than 50 employees) where loss

ratio (ratio of claims to premium) is less than 85%. Note that this provision

applies on a calendar year, not plan year, basis

• Rebates payable by August 1. Starting with 2014 reporting year, reporting

due date is July 31, and rebates are payable by September 30

January 1, 2011




Health plan provisions applying only to non-grandfathered employer plans

Preventive care • Preventive care services must be covered at 100% when provided in-

network Plan years beginning

on/after September

23, 2010 Insured plan

nondiscrimination

• Insured plans prohibited from discriminating in favor of highly compensated.

Enforcement delayed until guidance released

OB/GYN,

pediatrician, ER

services

• Preauthorization or referral requirements prohibited

Appeals process • Mandatory internal and external claims and appeals process

• Self-funded plans must contract with at least three independent review

organizations (IROs)

Women’s preventive

services

• Additional preventive services for women covered at 100% Plan years beginning

on/after August 1,

2012

Plan quality of care

reporting

• Group health plans and health insurance issuers required to submit an

annual report to HHS addressing plan or coverage benefits and provider

reimbursement structures regarding the cost and quality of care

After guidance issued




Health plan provisions applying only to non-grandfathered employer plans

Clinical trials • Must cover routine patient costs in connection with participation in approved

trials Plan years beginning

on/after January 1,

2014 Maximum deductibles

and out-of-pocket

(OOP) limits

• In-network OOP maximum for EHB same as for HSA- compatible HDHP in

2014. For 2015, $6,600/$13,200 (indexed annually). For 2016,

$6,850/$13,700.

• Plan’s maximum OOP limit can be divided among different coverage

categories of benefits so long as the combined amounts don’t exceed the

annual OOP limit. (Special transition rule for 2014 for carve-out vendors

such as prescription drug)

• Must apply an embedded self-only OOP maximum to each individual

enrolled in family coverage if the plan’s family OOP maximum exceeds the

ACA’s OOP limit for self-only coverage (also applies to deductibles)

Provider

nondiscrimination

• No discrimination against provider acting within the scope of license




Taxes and fees

HSA nonqualified

withdrawals

• Penalty tax increased from 10% to 20% January 1, 2011

Pharmacy manufacturer

tax

• Annual fee on manufacturers of branded prescription drugs based on market

share 2011

Comparative

effectiveness research

(PCORI) fee

• Fee on insured and self-funded plans to fund clinical effectiveness research

• For plan years after October 1, 2013, fee equals $2/covered life/year;

indexed thereafter

• Payment due by July 31, of each year

Plan years ending

after September 30,

2012 and

before October 1,

2019

Itemized medical

deduction

• Itemized medical deduction threshold increased from 7.5% to 10% 2013

Medicare hospital

insurance tax

• Tax rate increased from 1.45% to 2.35% for income in excess of $200K

(single or head of household) /$250K (joint filers)

• 3.8% unearned income tax on net investment income in excess of $200K

(single or head of household)/$250K (joint filers)

• Employer required to collect tax only for employees earning

• $200K or more from employer

Medical device excise

tax

• 2.3% excise tax on the manufacturer or importer for the sale of certain

medical devices




Taxes and fees

Health insurance

providers fee

• Annual fee on entities that provide health insurance (self- insured employers

specifically excluded) 2014

Transitional reinsurance

fee

• Fee paid by insurers and self-funded plans (major medical coverage) from

2014 to 2016 to help fund reinsurance program

• For 2014, contribution rate is $63 per covered life per year ($5.25 per

month); for 2015, contribution rate is $44 per covered life, for 2016, it will be

$27.

"Cadillac plan" excise

tax

• 40% tax on value of coverage above:

• $10,200/individual and $27,500/family

• $11,850/$30,950 for pre-Medicare retirees

• Future years indexed at CPI-U+1% for 2019, CPI-U only after 2019

• Adjusted for high risk industries, age, and gender

• Excludes dental and vision. For multiemployer plans, all coverage is

considered family coverage

2018


Health Care Reform At-a-Glance – Shared Responsibility


Employer Mandate

Shared responsibility payment for failing to offer coverage to at least 95%* of all full-time employees (FTE) and children if any FTE gets subsidy in marketplace

• $2,000 (indexed) times the number of FTEs (excludes first 30* FTEs).

• FTE defined as working 30 or more hours per week.

• Not required to offer coverage to part-time employees, retirees, or spouses

but must offer to broader category of children.

• No minimum employer subsidy required.

* 95% threshold lowered to 70% and first 80 FTEs excluded for 2015 only.

Penalties first imposed in 2016 for failure to satisfy mandate in 2015

Shared responsibility payment for full-time employees who opt out of employer plan and get subsidy in marketplace

• $3,000 (indexed) for each FTE who enrolls in marketplace and receives low

income subsidy if: (1) employee’s contribution for single coverage under

employer plan exceeds 9.5% of W-2 income, rate of pay, or the federal

poverty level (FPL) for individuals, or (2) employer plan fails to provide

“minimum value,” i.e., the actuarial value of plan is below 60%.

Individual Mandate

Penalty for failure to have minimum essential coverage

• Greater of 1.0% of Modified Adjusted Gross Income or $95/person in 2014

• Greater of 2.0% or $325/person in 2015

• Greater of 2.5% or $695/person in 2016

• Indexed for individuals who fail to maintain minimum essential coverage.

• Family dollar amount capped at 300% of individual penalty.

Penalties first imposed in 2015 for failure to satisfy mandate in 2014

Note: Individual and small group plans may keep their current plans for renewals up to

October 1, 2016.


Employer shared responsibility assessments

Yes

No

Yes

No

Does employer

offer minimum

essential

coverage (MEC)

to a least 95% of

FTEs (and

dependents)?

For 2015

only,70% of

FTEs.

For “5% group”

who are not

offered coverage

(30% in 2015 only)

potential employer

assessment.

Employer assessment

lesser of:

• $3,000 x FTEs who

receive subsidized

marketplace

coverage.

Assessment of $250

payable monthly.

• $2,000 x FTEs (less

30; 80 in 2015)

Does the employer

offer at least one

option that is

affordable (under

9.5%) and satisfies

minimum value (60%

or more)?

No

Employee

chooses:

• Employer plan

• Individual

penalty

• Marketplace

coverage without

subsidy

• Spouse / parent

plan

• Medicaid

No employer

assessment

No

Employer assessment:

• $2,000 x FTEs (less

30; 80 in 2015), if at

least one FTE

receives subsidized

marketplace

coverage.

Assessment of $167

payable monthly.

Applies separately to

each member of

controlled group

Employer reporting to

IRS and employees/

retirees:

• 6056 Reporting

• 6055 Reporting


Cadillac Tax


Cadillac Tax - Overview of the Excise Tax

Starting in 2018, a 40% excise tax will apply to each employee’s excess

benefit, which is the aggregate cost of applicable employer-sponsored

coverage that exceeds the limit calculated on a monthly basis

The tax is allocated by the employer to insurers, TPAs,

PBM and other coverage providers for payment to the IRS.

Aggregate cost of applicable coverage

Less: ‘self-only’ or ‘other than self-only’ limit

Excess benefit

Multiplied by: 40%

Excise tax attributable to that individual

For each employee,

former employee,

surviving spouse, or

other primary insured

individual

Insurers, TPAs, PBM and other administrators expected to

charge back cost to employer, perhaps with tax gross-up.


Cadillac Tax - Applicable Coverage

Generally, “applicable employer-sponsored coverage”…

Includes:

• Health coverage excludable from income,

including HRA contributions

• Health FSA/HSA employee and employer

contributions

• Onsite clinics if considered a group health

plan

• EAP if considered a group health plan

• Wellness programs, if COBRA premium

charged

• Executive physical programs and

supplemental medical programs if excluded

from income

Excludes:

• Insured dental (self-insured dental?)

• Insured vision (self-insured vision?)

• Long-term care

• Accident and disability benefits

• Coverage for a specified disease or illness

or fixed indemnity coverage (e.g., critical

illness and hospital indemnity plans) if 100%

employee paid with after-tax dollars

• Auto insurance

• Liability insurance

• Credit insurance

• Workers’ compensation

Based on total cost of plan, not net of employee contributions


Cadillac Tax - Aggregate Cost

• For self-insured plans, calculated like COBRA premium

− Includes employer- and employee-paid portions

− Separate rates for “self-only” and “other than self-only” coverage

− For retirees, option to combine pre-65 retirees with post-65 retirees

− Will future guidance require actuarial certifications and standard assumptions?

o Actuarially sound and self-supporting rates

o Claims base, trend, margin, tiering, plan changes, etc.

• For the health HSA

− Includes employee salary reduction contributions

− Includes employer contributions


Cadillac Tax - Impact of Health FSA

2018 Projected

Per Capita

Cost

2018 Blended

Per Capita

Cost FSA

Total

Projected Per

Capita Cost 2018 Limits

Excess

Benefit

Per

Employee

Excise Tax

Employee $9,663 $9,663 $0 $9,663 $10,200 $0 $0

Employee $9,663 $9,663 $2,500 $12,163 $10,200 $1,963 $785

Employee only tax allocation (Based on assumed split of medical and Rx costs):

Medical 67% $526

Rx 17% $133

FSA 16% $126

$785

While illustrated on an annual basis, the tax is calculated on a monthly basis for each

employee/retiree.


Expected Leveraging of Cadillac Tax


Cadillac Tax - Tax Mechanics

Will vendors pass along the cost? Since excise tax is not deductible for

vendors, will they also gross up for taxes to stay whole after taxes?

A Hypothetical Example 2018 2019 2020

Excise tax on employer’s plans $61,000 $135,000 $448,000

Vendor’s corporate marginal tax rate 35% 35% 35%

Expected charge-back to employer

(income vendors need to stay whole)* $93,846 $207,694 $689,231

Grossing up increases the cost to employer by about 54%

* Excise tax/(1 – marginal tax rate)

• Payments may vary between not-for-profit and for-profit

administrators

• Penalty for underreporting tax liability equal to amount that

would have been paid, plus interest (effectively a 100% penalty)


Anticipating the Cadillac Excise Tax

• Absorb the cost o Could offset another source of total rewards to cover the expense

• Migrate employees to lower cost medical options

• Improve plan efficiency o Improved networks, discounts, wellness, move to self-insured

• Reduce medical benefits to delay, reduce, or eliminate the tax o Could replace lower medical value with increase in other total rewards

• Implement HDHP/HSA plan o Eliminate or reduce employer HSA contributions

o Eliminate or cap pre-tax employee contributions if subject to the tax

• Eliminate ancillary health care benefits such as the health FSA

• Ensure dental and vision in separate plans

• Review COBRA rating assumptions

• End health plan sponsorship for actives and/or retirees o Subject to ACA $2,000/employer shared responsibility assessment


Wellness Incentives


Common Designs and Applicable Laws Disclaimer: this is a generalization; analysis depends on facts and circumstances

Component ADA HIPAA GINA Tax Other

Nutrition classes

(Reasonable

accommodation)

(Participatory

program)

Cash reward for walking

a mile per day

(Reasonable

accommodation)

(Activity-only program

30% max reward)

(Included in

taxable income)

Premium discount for

meeting biometric

standards – offered to

employee and spouse

(30% max reward; ee-

only coverage)

(Outcome-based

program; 30% max

reward)

(confidentiality/ privacy, election

change)

Tobacco surcharge if test

shows presence of

nicotine


only coverage; family

not addressed)

(Outcome-based

program; 50% max

reward)

(confidentiality/ privacy, election

change)

Reward of car seat for

maternity management

enrollment

Pregnancy

Discrimination Act

(confidentiality/ privacy)


Common Designs and Applicable Laws

Component ADA HIPAA GINA Tax Other

Achieve 3 biometrics

within normal range, or

show 2 improvement

from previous year

(including BMI) –

employee only


only coverage)

(Outcome-based

program; 30% max

reward; RAS

required; special

participatory rule)

(confidentiality/

privacy)

Premium reduction if

attest to not smoking

(Reasonable

accommodation)

(Outcome-based

program; 50% max

reward)

Reward for completing

HRA – offered to

employee and spouse


only coverage; family

not addressed)

(Participatory

program)

Weight loss challenge;

reward is gift card

Age/gender appropriate

preventive screenings ;

reward is health FSA

contribution

(confidentiality/ privacy; ADEA)


ADA Proposed Regulations Analysis – Flow Chart

Does wellness program

include a medical exam for

disability-related injury?

Part of group health plan?

General ADA rules apply

(e g , no discrimination,

reasonable

accommodations)

• Provide notice to

participants

• Incentives limited to 30%

of cost of employee-only

coverage

• Comply with HIPAA

privacy rules

• Must be reasonable designed

• Must be voluntary

• No requirement to participate

• No denial of coverage under

any plan or benefit package

• No adverse employment

reactions

• Meets confidentiality

requirements

• Complies with other non-

discrimination laws

Yes Yes

No No


Other ACA Updates

• Employers with 50 to 99 employees o Subject to the Employer Shared Responsibility rules effective 1/1/16

• Part D doughnut hole continues to be filled in o In 2015, the retiree pays 65% of the cost of generic prescriptions and 45% of

the cost of brand name prescriptions

• No Health Reimbursement Account without an accompanying sponsored benefit plan o Not allowed to reimburse employees through an HRA for premiums of

individual insurance purchased in the public marketplace

o The HRA would not meet ACA requirements and would be subject to $100 per day per employee penalty

• May need “embedded” cost-sharing limits in 2016 o Self-funded and large groups may need to apply the 2016 Federal cost-

sharing limits of $6,850 self-only, $13,700 family, by individual

o Problem for CDHP where no embedded deductible is allowed by individual

o For example, $4,000/$8,000 CDHP deductible would not comply with $6,850 individual OOP requirement


Where Do You Go From Here?


Benefit Strategy - Where Are You on the Consumerism Spectrum? Where Do You Want to Be?

Paternalism Consumerism Individualism

Essence of

“Contract”

“We’ll take care of it

for you”

“We support each

other and share

responsibility”

“You’re on your own”

Employer

Role

Architect/custodian

providing, at a minimum,

adequate benefits, fair

policies

Partner, enabling

employees to make

informed decisions for

their well-being

Limited obligation or

involvement in the

individual’s choices

Employee

Role

Passive, “entitled”; waits

for employer to make

decisions; little concern

about costs or impact

Engaged consumer;

seeks information,

weighs alternatives,

considers cost and

outcomes

Like an independent

contractor; simply

minimizes cost and

maximizes personal

outcomes

Consumerism Spectrum


“Best-in-class” designs

and partners

Outsource functions:

• Vendor partners

• Quilted network

• Portfolio of designs

• Engagement resources

• Self-funded or insured

“I believe better

performance is

achievable, but lack the

resources on my own”

“I will actively support

the activities that have

proven outcomes, and

outsource wherever it

makes sense”

Private Exchange –

with Flexibility in

Design, Paternalism

No benefit

relationship with

employees

“I am no longer in

the benefits

business”

Send employees

to Public

Exchange

Benefit Strategy - Benefit Delivery Options

Facilitate Exit

Existing plans

and financing

Uncommon except

for:

• Labor contracts

• Grandfathered

plans

• PPO - Only

“Status Quo is

working for me”

“I am

contractually

obligated”

Typical Current

Strategy

Simplify and

streamline plans

Insourced focus on

cost management:

• Vendor selection

• Plan design

• Communication

• Engagement

• CDHPs and H.S.A.s

“I will make the

investment to

improve

performance”

“Our unique benefits

differentiate us”

Typical Objectives

Today

DC model with

insurance focus

Outsource functions

and risk:

• Insured choices

• Fixed DC cost

• Low focus on health

engagement

“I want to provide

broad access to

benefit programs

while not having a

role in day-to-day

management”

“My CFO insists on a

fixed cost model”

Private Exchange –

DC design, no

Paternalism

Maintain Manage Sponsor


Benefit Strategy - Progression of Plan Design

Defined Contribution

Risk Shifting

Managed Care

CDHC

Flexible Benefits

Indemnity

Employee: Increase financial responsibility and health management


Resources, services

and tools that enable

individuals to take action

Motivators that

encourage greater

individual accountability

Elements that educate

and promote your

benefits and build

personal awareness

Information

“I understand”

Incentives

“I want to”

Infrastructure

“I’m able to”

Mandates that enforce

accountability for

specific behaviors and

actions

Imperatives

“I must”

• Vendor partners

• Technology

• Individualization

at time of need

• Plan design

• Incentives

• Social/behavioral

techniques

• Communication

• Branding

• Data

• Dashboards

• Leadership support

• Environmental

support

• Social contract

mandates

Benefit Strategy - Philosophy of Shared Accountability


Comparing the Options

“Pay” “Play”

Public marketplace Private exchange Standard employer group plan

• Easier to cost shift to employees

• Potentially no resources required to respond

to employee health concerns

• Cost savings could be transferred to

employees as taxable income

• More choices

• Easier to cost shift to employees

• Fewer employer resources

required to respond to employee

health concerns

• More choices

• Focus on wellness and

disease promotion

• Self funded

• Less administrative hassle

for employer

• Offer plans that meet specific

employer needs

• Ties health benefits to corporate

culture and broader employment

package

• Retain direct control of vendor

relationships

• Directly influence employee health

• Retain input on regional and

national delivery of care

• Website/enrollment problems

• No national approach, varies by state

• Employees lose buying leverage and

employee costs rise, often dramatically

• Fundamentally changes/erodes benefit package

• Potentially poor employee consumer experience

• Reduced ability to promote employee health

and productivity

• Limited employer adoption, thus far

• Limited employer input on

options or vendors

• Requires material

communications effort to educate

employees

• Requires continued resources &

diligence to manage program

• Harder to limit employer’s cost

increases below medical inflation

Ad

va

nta

ge

s

Co

nce

rns


Today’s Top Trends

Clarity on health reform is fueling rapid transition…

• Migration to consumer driven health benefit designs

• True shared responsibility and costs with employees

• Use of account-based plans to encourage financial awareness

• Engagement of workforce with communications, tools and resources

• Introduction of 1st and 2nd generation wellness and health management

programs

• Reliance on partners- general and specialized- to integrate employee

experience

• Serious consideration of exchanges and defined contribution benefits


Defined Contribution Healthcare

Defined contribution can take many forms:

• Insured or self-insured group plans – Company announces fixed employer

subsidy or credit amount, and determines employee premium contributions for

each plan based on total plan cost minus fixed subsidy amount

• Group plans offered through a private exchange – Fixed employer subsidy or

HRA amount provided to employee, and employee uses that subsidy to offset

cost of plan selected in the private exchange

• Individual plans offered through a private exchange – Fixed employer subsidy

or HRA amount provided to employee, and employee uses that subsidy to

offset cost of plan selected in the private exchange


Defined Contribution Healthcare

Key components of Defined Contribution Health Care:

• Clear and concise communication of the defined contribution commitment

from the employer

• Employer makes conscious decision from year to year on if and how much

that DC commitment will change

• Typically includes multiple plan offerings to allow employees to choose a plan

that fits their needs and budget

• Employee cost determined by total cost of plan reduced by the DC

commitment

• Includes tools for assisting in plan choice, transparency in cost and quality of

services, and support in delivery of benefits


Best Practices with CDH Benefit Design

Driver Best Practices to Consider

Pricing and plan design • Premium differential to promote wellness and

consumerism

• Covered benefits parity

• Financial levers- co-pay, co-insurance, etc.

Account contributions

and fund access

• Amount by employer to steer participation to

CDHP

• Contribution approach – promote wellness

• Ease of access and understanding

Communications • Broad calendar

• Multi-media approach

• Engagement and personalization

Decision support • Health plan selection approach

• Contribution/distribution decisions and

management


Evolving Wellness Program Models

Drive business

results

Multi-year strategy

Target all employees

and dependents

High

Significant

outcomes-based

Thorough metrics,

analysis & reporting

Promote healthy

activities

Some coordination

Voluntary with

heavier promotion

Some

Small

activity-based

Some evaluation

Improve morale

and loyalty

Unmanaged

Voluntary

None

None

None

Health-Related Fringe Benefits

Typical Wellness Program Today

Strategic Health & Productivity Initiative

Focus

Oversight

Participation

Personalization

Incentives

Measurement

& Evaluation

Emerging trend


Health Advocacy

• Find the right doctors, dentists, hospitals,

other healthcare providers; expedite

appointments

• Address complex medical conditions,

research and locate latest treatments

• Coordinate care and schedule follow-up

visits with the medical team; help transfer

X-rays, medical results

• Arrange specialized treatments and tests;

answer questions about results, treatments and

prescribed medication

• Clarify benefits including copays, and help

facilitate access to appropriate care

• Provide health cost estimates for common

medical procedures for informed decisions

• Help resolve insurance claims, negotiate

billing

• Gaps In Care Coaching. Ongoing tailored

“gaps in care” health coaching by Personal

Health Advocates

• Offer personal contact with a nurse and

web-based health information

• Locate eldercare including assisted living,

adult day care and other issues facing parents,

parents-in-law

• Secure second opinions

• Prepare members for doctors appointments

including questions to ask

o Identify “best-in-class” medical institutions for a

serious illness or injury

o Find community services and government

programs when needed


The Emergence of Private Exchanges

• Operated by “for profit” private companies (e.g.

insurers, consulting firms, specialty firms)

• Vary in structure: single or multiple carrier, fully

insured and/or self-funded, group or individual,

active employees and/or retirees

• Plans and services can extend beyond ACA-

driven structure of public marketplaces

– Flexibility in plan offerings, although many

follow “metals” designs

– Can also offer other forms of insurance and

related services


Comparing Apples to Apples – High Level Questions

• Fully insured/self funded?

• Employer control of plan design?

• Help with enrollment?

• Other administrative bells and whistles?

• One carrier or multiple carriers?

• Cost? Who is paid for what?

• Platform for employees?

• Vendor relationships?

• Contracting responsibility?


Comparing Apples to Apples (cont.)

What’s included?

• Insurance products, administration capabilities, and decision support tools for the

employees both during enrollment and throughout the year

How much can you customize?

• Ranges from complete customization to a fixed set of both carriers and plan designs

How sustainable is the solution?

• Determine what happens after year one to both the employer and the employee costs

How much choice is right for your employees?

• Complexity of decisions you are asking your employees to make, the adequacy of the

support they will have to make decisions, and if those choices truly add value

What role does HR now serve?

• Understand your role after the exchange is deployed to ensure you are not too far removed

from your data to be able to impact the productivity of your workforce


Emerging Practices – Typical Engagement Tools and Technology

• Common engagement interface (web-based) between employer and

employee/family

• Health plan selector tools and decision guides

• Calculators for short and long-term health costs

• Shopping tools

• Financial transparency to health costs, provider quality ratings, location services

• Carrier-based, CastLight, Healthcare Blue Book, Healthgrades, etc.

• Health condition web tools and search functionality (e.g. WebMD)

• Mobile apps and social media

• Integrated health records and personalized services

• Personalized avatars/coaches and gamification

• Devices (e.g., FitBit, pedometers, Body Media, etc.)


Principle #1: Make it Personal and Relevant Personalized

interests Know my

numbers

Spending Account

Balances


#2: Drive Actions and Outcomes

Personalized recommendations

Targeted messaging

Incentive

rewards


#3: Make it Accessible and Convenient

Centralized access to all plans

and programs

Mobile access

Single Sign-On and

Deep Links


# 4: Use Social Influence

Leadership

Support

Social Media

and

Grassroots

Support


#5: Apply Behavioral Science

Aspiration Loss aversion

Statistical optimism

Regret aversion


Questions?


After ACA · •State health insurance marketplaces established •Low income premium subsidy...

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