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Member Webinar

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Benefit Plan Responsibilities and Costs are Increasing –Are you Prepared?

Agenda

• Overview of compliance obligationsO i f t t t t i• Overview of cost-management strategies

• Explore and receive feedback on possible FADA initiative

• Housekeeping notesHousekeeping notes– Copies of the slides – Q&A– Polling questions

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COMPLIANCECOMPLIANCECOMPLIANCE COMPLIANCE OBLIGATIONS OBLIGATIONS

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ACA Employer Mandate

• Applies to large employersEmployers with fewer than 100 full time– Employers with fewer than 100 full-time equivalent employees with only fully-insured medical plan options are exempt in 2015

• Generally applicable beginning January 1, 2015

• Must offer “affordable,” “minimum value” ,coverage to “substantially all” “full-time employees” and their “dependent children” or potentially pay a penalty

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ACA Employer Mandate

• Employees who work 30+ hours per week are considered full timeare considered full-time

• Crediting hours for hourly and salaried employees– Value of having actual service records

• Two methods to calculate the total hours k dworked:

– Monthly measurement period method– Look-back measurement period method

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Action Items that Should Have Been Completed By Now

– Calculate large employer status for 2015

Select and create procedures for the– Select and create procedures for the measurement period method you plan to use

– Implement time tracking if applicable

– Determine if your coverage satisfies minimum value and affordability requirements for all full-time employeestime employees

– Be prepared to demonstrate you “offered” coverage to substantially all full-time employees

• And that the offer was compliant with DOL rules

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Section 6055/56 Reporting

• Purpose: to enforce employer and individual mandates and premium tax subsidiesmandates and premium tax subsidies

• 4 forms:– 2 forms to provide to employees (1095-B & C)– 2 transmittal forms to submit to the IRS with

copies of the employee forms (1094-B & C)

• Due dates for 2015 calendar year dataDue dates for 2015 calendar year data– Due to employees by January 31, 2016– Due to the IRS by February 28, 2016 (or March

31 if filing electronically)

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Who Files What?

• Section 6055 (B forms):– Apply to every entity providing Minimum EssentialApply to every entity providing Minimum Essential

Coverage – Filed by insurers for fully-insured plans,

employers for self-funded plans• Section 6056 (C forms):

– Apply to Applicable Large Employers (50+ full-time equivalent employees)q p y )

– Filed by the employer; the B and C information may be combined on the C forms for self-funded plans

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Plan Documentation

• All health and welfare plans subject to ERISA t h itt l d tERISA must have a written plan document

• Summary Plan Descriptions (SPDs) must be provided to plan participants

• Both have certain information they must include as required by ERISAinclude, as required by ERISA– Insurance policies rarely satisfy these

requirements

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Notices

• Employers must comply with multiple f d l ti d ti i tfederal notice and reporting requirements

• Depending on the notice, it is the employer’s responsibility to distribute:– With enrollment materials

– AnnuallyAnnually

– In connection with certain events

– Upon request

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Form 5500

• A Form 5500 is an annual report required under ERISA to be submitted to the DOLunder ERISA to be submitted to the DOL– Only required for employers subject to ERISA

• Must file for health and welfare benefit plans if have 100 or more plan participants

• Must also distribute a Summary Annual R t t l ti i tReport to plan participants

• Delinquent Filer Voluntary Compliance Program (DFVCP) is available

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COBRA

• COBRA applies to group health plans sponsored by employers with 20+sponsored by employers with 20+ employees

• Employers must send a variety of notices, including:– Initial notice

Q lif i t ti– Qualifying event notice

• Number of other requirements, such as offering participants an open enrollment

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COST COST MANAGEMENT MANAGEMENT STRATEGIESSTRATEGIES

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ACA Cost Squeeze

• New mandates to cover benefits• Limits on cost management through plan design g g p g

– E.g., annual, lifetime, and pre-existing condition limits prohibited

• New fees (PCORI, transitional reinsurance, health insurance industry fees)

• Newly eligible employees • Employer mandate affordability and minimum value

requirementsrequirements• New rating rules for small group plans (that are often

resulting in higher costs)• Excise tax on high cost plans (“Cadillac tax”)

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Excise Tax on High Cost Plans

• Effective 2018, a 40% nondeductible excise taxexcise tax

• Imposed on the aggregate value of health coverage in excess of:– $10,200 individual coverage– $27,500 family coverage

• Indexed for inflation – CPI-U: 2-4% per year– Medical inflation: 7-10% per year

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Excise Tax on High Cost Plans

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Plan Design Strategies

• Bronze plans

• High Deductible Health Plans (HDHPs) paired with:– Health Savings Accounts (HSAs)

– Supplemental insurance coverage

• Wellness plans• Wellness plans

• Onsite clinics

• Telemedicine

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Change in Plan Funding

Health Insurance Fee

Stop Loss Insurance

Mandated Benefits

Profit Margin

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Insured Self‐Funded

Risk Charge

State Insurance Premium

Claims / Premium

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Contribution Strategies

• Changes to ensure ACA employer d t “ ff d bilit ”mandate “affordability”

– Family tiers (moving way from composite rates)

– Percentage of salary

• Defined contribution model

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PRIVATE PRIVATE EXCHANGEEXCHANGE

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“If you have seen one yprivate exchange, you’ve seen only one private exchange ”private exchange.”

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Employer Health and WelfareBenefit Delivery Options

Employer Private ExitManaged

Employer manages

benefits and plan

Exchange

Employer offers

choices managed by

Employer no longer provides access toplan

provider options

managed by Private

Exchange

access to benefits

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What is a Private Health Care Exchange?

• A one-stop retail site for employers to arrange f ffor primarily major medical coverage for employees and their dependents

• Run by a private sector company or non-profit entity– Current organizations include consulting firms,

insurance companies start ups and brokerage firmsinsurance companies, start-ups, and brokerage firms

• Not affiliated with the State-based or Federally-Facilitated Exchanges (Marketplace)

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Market Trends

Source: Kaiser Family Foundation Report: Examining Private Exchanges in the Employer-Sponsored Insurance Market, September 2014, http://kff.org/private-insurance/report/examining-private-exchanges-in-the-employer-sponsored-insurance-market/

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Value to Employers

• Control cost

R d d i i t ti b d• Reduce administrative burden

• Provide additional choices to employees

• Transition to a defined contribution model

• Transition away from employer-managed employee major medical (and other) benefits

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CONCEPT:CONCEPT:CONCEPT: CONCEPT: FADAFADA ONE ONE STOP SHOPSTOP SHOP

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If you have a need, FADA wants to help

By Providing:– Innovative benefit model

– Provide technology to streamline administrative obligations

– One bill, one check, and sharing data with one trusted FADA partner

– Employee portal to educate, inform, and select benefits

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FADA One Stop Shop

We would offer:– Complete integrated benefit solution

– A spectrum of medical plan designs and funding options

– Online decision support tools and benefit counselors for personalized employee assistance

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How Would Our Approach Be Unique?

• We would offer an end-to-end benefit th t ld biprogram that would combine:

– Strong focus on taking care of key compliance requirements

– Technology to make benefit plan administration easier

– Integrated tools to manage plan costs

– Personalized assistance to employees

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Thank you!Thank you!

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