Dawson Insurance | Blue Cross Blue Shield| Eide Bailly

Spring 2013

Dawson Insurance/Blue Cross Blue Shield/Eide Bailly Health Care Reform Seminar 2013

Small Group

Background: ◦ 11 person group

◦ ER contribution of 90% of the single premium

◦ $500 Deductible, $35 copay, 80/20 coinsurance

Premium Total ER EE

6 Single $378 $340 $38

3 SPD $611 $340 $271

2 Family $925 $340 $585

Multiple carrier quotes with matching plan design and alternatives

Alternate option: ◦ $2,500 deductible, 100% coinsurance

Premium Total ER EE 6 Single $253 $228 $25

3 SPD $476 $228 $248

2 Family $785 $228 $557

•ER Impact: •EE Impact: •Benefit Impact:

Monthly Saving $1,232 Annually Saving $14,784 Annual Saving $8,220 $2,000 Additional Deductible

2 Key Employees are Independent Contractors (both older and family)

Individual policy $919/ month ($134 more per month, annually $3,216)

Current plan has a $925 premium

1/1/14: Carrier will terminate coverage on the 2 and ER will consider terminating the plan ◦ Change to the employment arrangement

Background ◦ Employer Goal: Continue a High Level of Plan Benefits

30 person group ER contribution of 100% of the TOTAL

premium $250 Deductible, $35 copay, 80/20

coinsurance Annual Premium $237,984

Claim Analysis (as compared to a benefit change)

Total Allowed

Ins. Paid Member Cost

Difference

2010 Current $133,895 $116,503 $17,392

$2,500/100 $133,895 $89,493 $44,402 +$27,010

2011 Current $204,672 $182,733 $21,939

$2,500/100 $204,672 $140,797 $63,875 +$41,936

2012 Current $125,766 $104,994 $20,772

$2,500/100 $125,766 $68,430 $57,337 +$36,565

Multiple carrier quotes matching benefit and alternate plan design $2500 Deductible, 100% coinsurance

Preferred Rates $156,690 -$81,294

Standard Rates $188,026 -$49,958

Potential HSA contribution of $2500 for each EE cost $80,000

Potential HRA to fund plan design that would match current benefits

After underwriting, standard rate offer combined with an HRA with a similar plan design to cover claim prior to the $2,500 deductible ◦ What is the “rest of the story”???

Premium Total ER EE

38 Single $477 $238 $238

2 SPD $830 $238 $592

3 Family $1,241 $238 $1,003

Total Annual $282,108

ER Total $108,756

Background ◦ Employer Goals: Prepare to go over 50 Lives Provide a different benefit level based on employment class Determine an affordable premium for the employee

43 person group ER contribution of 50% of the single premium $2,000 Deductible, $35 copay, 80/20 coinsurance

Claim Analysis (as compared to benefit change)

Total Allowed Ins. Paid Member Cost

Total Allowed

Ins. Paid Member Cost

Difference

2010 Current $110,077 $88,138 $21,938

$5,000/100 $110,077 $64,042 $46,034 +$24,096

2011 Current $221,046 $184,343 $36,703

$5,000/100 $221,046 $152,725 $68,322 +$31,619

2012 Current $100,960 $62,240 $38,720

$5,000/100 $100,960 $51,046 $49,913 +$11,193

◦ Network Access Analysis

◦ $5,000 Deductible

◦ 100% coinsurance

◦ Cost Share more to satisfy affordable care?

EE Premium @ 50% = $173 $25,000/12 @ 9% = $187

Premium Total

38 Single $346

2 SPD $438

3 Family $901

Total Annual $200,724 -$81,384

ER Total @ 50% $78,888 -$29,868

ER Total @ 75% $118,332 +$39,444 or +$9,576

◦ Potential funding an alternate plan design with an HRA?

Level 1: HRA benefits starting at $4,000

Level 2: HRA benefits starting at $3,250

Level 3: HRA benefits starting at $2,500

Implement HSA for employee funding

Avoid out of network claim costs

The employer elected to renew at the $5,000 deductible

Allocate premium savings to the HRA benefits with a High Deductible Plan design

Background ◦ Employer Goal:

Affordable Premium for the Employee

Maintain a Health Insurance Plan

Determine why Employees are not taking coverage

60 FTE eligible

38 participating in a full insured plan

Renewal 6/1/13

◦ ER contribution of 50% of the single premium

◦ $500 Deductible, $35 copay, 80/20 coinsurance

Premium Total ER EE

17 Single $473 $236 $236

6 EC $915 $236 $679

6 ES $839 $236 $603

9 Family $1,203 $236 $967

Total Annual $352,704

ER Total $107,616

Up coming renewal + 30% ◦ Total Premium $458,515 (+$105,811) ◦ ER Total @ 50% $139,900 (+$32,284)

◦ 22 Not participating and not sure why

◦ Penalty $60,000 (60 – 30 = 30 x $2,000)

◦ Penalty or Plan?

Affordable care analysis: $10/hr = $1,700 monthly @ 9% = $153 EE contribution

Multiple carrier quotes with matching plan design and alternatives

Quote Option #1: $1,000 deductible, $40 copay, 80/20 coinsurance

Premium Total

Low Rate Offer $235,620

High Rate Offer $393,492 (-$65,023)

High Rate Offer

◦ 50% ER Contribution $118,047 (EE share $258)

NOT compliant with Affordable Care

◦ 75% ER Contribution $176,472 (EE share $129)

+$36,572 more than current share of renewal offer

+$68,856 more than 2012 health insurance expense

Quote Option #2: ◦ $4,500 deductible

◦ 100% coinsurance

Premium Total

Low Rate Offer $176,004

High Rate Offer $293,916

◦ High Rate Offer

50% ER Contribution $86,423 (EE share $189)

NOT compliant with Affordable Care

75% ER Contribution $129,276 (EE share $95)

$10,624 less than current share of the renewal offer

Mandated coverage and affordable care requirements resulted in increased ER contribution which should increase participation

Allow employer ability to maintain a plan to attract and retain employees in their competitive market

Consideration for an HRA for a selected class

Thank you for coming.