Pre-Open Enrollment Benefit Information Sessions

October 2015

Meeting Purpose

• Provide education to our employees about their benefits

• Gain feedback about a possible shift in our healthcare insurance provider

• Introduce new benefits for 2016

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Meeting Outcome

• Provide enough information so our employees feel well-equipped to make decisions about what benefits are right for them

• Create a baseline of information about the Affordable Care Act and impact on employers and employees

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Today’s Agenda

• Understanding healthcare expenses, the marketplace, and the move to consumer-driven healthcare

• Explanation of the healthcare request for proposal process to the Benefits Advisory Committee

• Pros and Cons of health insurance provider • Recommendations from our broker and HR• Plan design information• New 2016 benefit options

Why we decided to look at the total benefits package

• We have a responsibility to our employees to ensure they have the knowledge needed to make educated decisions

• We heard from the community that affordable and quality healthcare is a critical part of their total compensation package

• We wanted to fill gaps we saw in the benefit package• There is urgency in identifying solutions related to the

Affordable Healthcare Act• Julie is new to Hamline and could provide a

competitive market perspective

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Medical Insurance

Our Current Challenges

• Rising Health Care – The National average increase is 7.6%

• Claims – Our premiums are based on our claims history– Based on our claims, HealthPartners anticipated a 30%+ increase for

2016

• Affordable Care Act– Cadillac Tax – Employers will face significant fines for being overly-

generous beginning in 2018• While this may seem counterintuitive to the ACA, it is a mandate from

Congress to reduce preferential treatment

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Consumerism in Healthcare• The nation has moved in this direction• Choices that promote health and preventative medicine and risk

reduction• “Shopping” for better rates• Healthcare Savings Accounts• Allows consumers to prioritize their choices based on their

individual needs• Employees have a vested interest in their health care, therefore

they are willing to devote more time to proper diagnosis and management of treatment

• More and more physicians are embracing consumerism, which creates a stronger relationship with patients so they truly understand their healthcare options

• Physicians have “skin in the game” • Online tools and mobile apps help patients make decisions8

What happens if we don’t embrace consumerism?

• Risks– Double-digit health care premium costs– Claims outweigh the premiums– Employees may not ask questions of costs, resulting in

higher premiums– Unnecessary tests and procedures

• Improved financial flexibility for consumer– You choose with your physician the right care for you – Partner with your physician to hear about all options – Control more of what you want from your healthcare vs.

anonymous parties• Loss of possible change opportunities in the future

should we decide (fully funded vs. self-funded)

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We want options that will position us to deliver the best solutions for our community

• Selecting the right health insurance that fits your need• Avoid being at the “mercy” of the insurance company• Self-funded plans

– We assume the risk for the payments of claims and can help determine our claim renewal rates.

– Many organizations and universities have moved to this model

– We received a recommendation from a non-profit third party to consider this in the future

– Provides a greater flexibility to design a plan that fits the needs of the employees

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Explanation of our Healthcare RFP Process• Step 1 - Received initial rates without any plan design

changes so we could compare “Apples to Apples”– Blue Cross Blue Shield, Medica, HealthPartners and Preferred One

• Step 2 - Requested best and final bids• Step 3 – Selected finalists based on the health

insurance company that was willing to offer us the same/consistent level of healthcare, best rates, and position us for options in the future that provide flexibility

• Step 4 – Define plan design changes with the President’s Staff that would offer multiple solutions for our employees and manage budget shortfalls

• Step 5 – Gather feedback from the community

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Selection goals and considerations

• Ensure employees and their families are receiving the best care and options for their healthcare needs

• Provide the least disruption to our employees • Solutions that drive us towards a consumer-driven

model• Position us to have the option of moving to a self-

funded model in the future if we decide this is the right thing for us

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Selection goals and considerations (cont.)

• Doctor utilization - Avoid disruption of primary health care providers as much as we can

• A solution that offers creative and motivating wellness program that encourages preventative healthcare

• Solution that makes our benefits plan a competitive part of our total compensation package

• Option for a 1 year contract in case we want to change plans in the future

• Reputation in the marketplace13

Results

• HealthPartners initial rate increase was scheduled to be 31%. Their initial quote came in at 20.99% because they knew we were serious about considering other insurance companies.

• Best and final offers from the 4 providers:

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HealthPartners (Open Access)

12%

Preferred One (PIC) NA

Medica (Passport) 8.75%

Blue Cross Blue Shield 9.93%

Cost Renewal Overview – “Apples to Apples”

Based on the factors we used to determine our recommendation and the quote, we select HealthPartners and Medica to move forward in the decision-making process. Insurance Company Current Premiums 2016 Projected Expense

HealthPartners (Open Access)

$4,405,367.28 $4,933,969.00

Preferred One (PIC) NA Did not quoteMedica (Passport) NA $4,790,625.00Blue Cross Blue Shield NA $4,843,003.00

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Pros and Cons Handout

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Assistance - Benefits Counselors

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• To help our employees, we have hired benefits counselors (through a third party) that will help employees select the right option for themselves.

• Unbiased• Trained on Hamline plans• You will either meet with a benefits counselor for a

scheduled face to face visit or scheduled call to enroll in your benefits for 2016

• If you don’t meet with a counselor, you won’t be enrolled

• Various times of days• Family is invited to attend• Bring your questions!

Terminology• Premium - An amount to be paid for an insurance policy.• Deductible - A specified amount of money that the insured pays before an insurance

company will pay a claim.• Coinsurance - The insured pays a share of the payment made against a claim.• Out of pocket - The most you will have to pay for covered medical expenses in a plan year

through deductible and coinsurance before your insurance plan begins to pay 100% of covered medical expenses.

• HSA - Health Savings Account - A savings account used in conjunction with a high-deductible health insurance policy that allows users to save money tax-free against medical expenses.

• Pharmacy formularies - A list of prescription drugs, both generic and brand name, used by practitioners to identify drugs that offer the greatest overall value. A committee of physicians, nurse practitioners and pharmacists maintain the formulary. Varied by medical insurance provider.

– Co-payments will vary based on the Tier (I, II, III)• Cost sharing - Employees and Hamline share the cost of the medical premiums.• Disease Management - A care system that seeks to manage the chronic conditions of high-

risk, high-cost patients as a group.• Step Therapy - The practice of beginning drug therapy for a medical condition with the most

cost-effective and safest drug and progressing to other more costly or risky therapy, only if necessary (i.e., you must try drug "A" before you can get drug "B"). The goal is to control costs and minimize risks.

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Plan Design• Provide employees with additional plan options

– Lower premium and for those who may hit their deductible quicklyor have less or a healthcare need– Addition of a higher deductible at a dramatically lower premium– Addition of network options in which a primary doctor is selected in

a vast network at a lower premium• Referrals are still available• Can switch networks 1 time a month

– Slightly higher deductibles for those who prefer more up-front coverage

• We adjusted deductibles, coinsurance, and/or out of pocket maximums to further reduce premium expenses

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Cost Sharing

• Rightsizing cost sharing models– High deductible healthcare plan participants are

rewarded for taking on consumerism and potentially higher risk

– Co-Payment plan will most likely be subject to the Cadillac Tax in 2018, therefore we need to strongly consider a new solution

• If we continue to receive 10% increases, we will.

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2016 Plan DesignPlan AHigher Deductible

Plan BHigh Deductible

Plan CModerate Deductible

Plan DCo-pay Plan

Office Visit Co-pay

N/A N/A $35 $35

Deductible $5,000/$10,000 $2,600/$5,200 $1,000/$2,750 $300/$600

Coinsurance 100% 90% 75% 80%

Annual Out of Pocket Maximum

$5,000/$10,000 $3,100/$6,200 $3,500/$7,000 $2,000/$4,000

Prescription Drugs

100% after deductible

90% after deductible

Tier I $11Tier II $45Tier II $60

Tier I $11Tier II $45Tier II $60

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2016 HealthPartners – Plan Design and Rates

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Medica – Plan Design and Rates

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Example of best case vs. worst case scenario

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Why do we point this out?

As we move towards consumer-driven healthcare, it is important for us to understand which options are best for your situation.

Last year many of our employees on Plan B and Plan C hit their annual out of pocket maximums, these employees would have saved money had they been on a High Deductible Health Plan. Employees would have saved $4,000 per family.

Benefits Broker Recommendation

• The benefits broker is responsible for sourcing and negotiating our benefits

• The broker was put on notice this year that we had high expectations of our relationship and they needed to ensure we were receiving advice that would support our community or we would end our partnership

• Based on positive dialogue, they worked tirelessly to negotiate and consult with us

• Our broker advised us to change to Medica based on our needs for 2016 and into the future

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HR Recommendation - Medica• Quality healthcare• Wellness Program & Incentives –

– My Healthy Rewards (Red Brick)– Gift cards for employees and dependants that complete

wellness-related activities (up to $100 each)• Same physician/provider - 97% match• Ability to offer additional lower cost network options • National coverage for employees/dependents outside of

network though United Health Care • Ability to move towards consumerism• Reputation and negotiating power in the marketplace• Educational opportunities for ALL employees, not just those who elect coverage26

About Medica

• Non-Profit founded by physicians in 1975• Health coverage services to 1.5 million members• Second largest Minnesota health insurer:

• Primary business in Minnesota, Wisconsin, North Dakota and South Dakota

• National coverage alliance with United Health Care

• Nonprofit - 1% target operating margin

• Link to Medica informational videos:https://www.medica.com/members/group/medica-member-videos-for-download

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Medica’s Networks

• Three network choices– Passport - Open access– Elect - Care systems in the Twin Cities, Southern Minnesota,

and Duluth area– Essential - Care systems in the Twin Cities, Northern

Minnesota and Duluth area (some of Wisconsin)• Medica Choice Passport Network

– 790,000+ doctors and 5,700 hospitals– Primary care physicians: 100% access to a least 2 providers

within 10 miles– Hospitals: 100% access to a least 1 hospital within 20 miles

• Medica Elect and Essential Network– Accessible to 98% of Hamline Employees– 98% access to 2 primary care physicians within 10 miles– 98% access to 1 hospital within 20 miles28

How it worksYou choose Medica “Elect” or “Essential” Network• National network coverage• Fifteen large care systems• Primary care and speciality

care• Easy to access• No referrals required within

care system• No referrals required for

access to in-network:– Urgent Care– Routine eye exams– Chiropractic– DME services– MH/SA services

How it works:1) Family selects either the

Elect or Essential network2) Each family member

chooses a primary care clinic affiliated with a care system

3) Primary care clinic coordinates care

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Network ValueMedica Elect and Essential Networks

ElectNine Care Systems• Allina Medical Clinic• Children’s Physician Network• Hennepin Health• Integrity Health Network• Lakeview Health• Minnesota Healthcare Network• Park Nicollet Health Services• Riverway/North Suburban

Clinics (Includes HealthPartners-Como)

• St. Luke’s Care System

EssentialSix Care Systems• Altru Health System• Essential West (formerly

Innovis Health)• Fairview Physicians

Associates • HealthEast• Integrity Health Network• St. Luke’s Care System

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Referrals• Referrals are not required for participants in the Passport network. Passport

participants can receive care from any in-network provider – including specialists.

• Participants in the Elect and Essential networks may need a referral from their primary care doctor to receive care outside of their care system. There are some exceptions, like chiropractic care, urgent/emergency care and mental health/substance abuse. There are also services that don’t require a referral, but need the primary care provider to arrange for the services. Some examples include occupational, physical or speech therapy, home care, skilled nursing facility care.

• If a participant needs care that their care system can’t deliver, the primary care clinic will write a referral and notify Medica. The referral will list the specialist, the type of service, the number of visits and the date range for when they can see the specialist. Note, the specialist cannot refer to another specialist – that would need to come from the primary care provider.

• If a participant sees a specialist outside of their care system without receiving a referral, out-of-network benefit levels will apply and the participant’s share

of the cost will likely be higher.

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More on Referrals Please make note for those who are on

HealthPartners - Como• In the Elect network there is one HP Clinic that members can pick

as their Primary Care Clinic (PCC), which would be the Coon Rapids Clinic, all the other HP clinics that show up are in-network without a referral as long as the member chooses a clinic within the Riverway-North Suburban Elect Care system (including the Como location) What this means is, if you select the Coon Rapids HP clinic as your primary care clinic, you can utilized the HP Como clinic as well without a referral.

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Medica - Customized Pre-enrollment Site

• http://hamline.staging.welcometomedica.com/home• Pre-Enrollment website to familiarize yourself with

Medica:– Learn about Medica’s network options and locate

doctors on the Passport Network and/or the Elect/Essential Networks

– Review and compare Hamline plan options, tips for choosing a plan

– Review pharmacy network options– Explore the wellbeing and wellness options with

Medica, Healthy Rewards (Redbrick) and Healthy Savings

– Access to customer service contact information33

New Additional Benefits• Cancer Insurance – Colonial

– Reimbursement for various circumstances• Anti-nausea medication, bone marrow stem cell transplant,

experimental treatment, hospital confinement, radiation/chemotherapy, 2nd medical option (additional insurance), home health care services

– Available for employee and dependents• Bridge Insurance – Colonial

– Preventative appointments - Earn $50 one time per calendar year or two reimbursements / year for family coverage

– Rehabilitation Unit Benefit - $100 per day up to 15 days per stay as an inpatient in a rehabilitation unit. 30 day maximum per covered persons per calendar year

– Waiver of Premium Benefit – After 30 days on continuous confinement waives premium for the entire policy

– Available for employee and dependents34

Other Benefits

• Dental - Delta Dental • 3.99% increase, no plan changes

• Vision – Avesis • 1.92 % increase, no plan changes

• Life Insurance and Long Term Disability • Lincoln - rate reduction on basic life insurance and disability

• Those who have elected voluntary life insurance, can during this open enrollment period, increase their elections to the guarantee issue amounts

• Short Term Disability - Colonial • Additional open enrollment period now• Guarantee issue

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Other Benefits - Continued

• Metlaw - no plan or rate changes• Health Savings Account

• 2016 IRS Maximum Contribution Limit• $3,350 employee only coverage• $6,750 family coverage

• Flexible Spending Accounts • Dependent Care $5,000• Medical Flexible Spending $2,550

• Employee assistance program through Medica• Savings of $7,000 per year

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Comments

We invite you to provide your comments. Please email your comments and questions to

hr-dept@hamline.eduor

Set up time with Tina Cubas or Julie Kline

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