Health Care Reform - It s impact on fully insured plans The involvement of both Bank Associations NDBA & ICBND in the health benefit decisions The

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1 Welcome to the ND BANKS Benefit Trust Meeting 1

2 Today We Will Be Reviewing: Health Care Reform - It s impact on fully insured plans The involvement of both Bank Associations NDBA & ICBND in the health benefit decisions The Creation of The ND BANKS Benefit Trust a 501c9 self funded benefit trust Self Funded VS Fully Insured 2014 Rates The Benefits of being a Member Bank in the ND BANKS Benefit Trust Small Employer Health Care Tax Credit An Explanation of the Current and Four New Plan Options The requirements associated with being a member bank of the ND BANKS Benefit Trust A Vision of the Future 2

3 But Before We Do The Review. 3

4 Health Insurance First What s Important The objective of The North Dakota Bankers Association and the Independent Community Banks of North Dakota has always been to provide for its Member Banks: High Quality Health Plans At the Lowest Available Cost 4

5 What is a High Quality Health Plan? 5

6 A High Quality Health Plan has the following features: 1. Unlimited coverage. 2. An out of pocket cost maximum beyond which the insured pays $0 for covered expenses. 3. A network of doctors, hospitals, and pharmacies broad enough to provide for all health care needs. 4. Preventive benefits designed to encourage employees to be proactive as to their health. Preventive will reduce claim costs and therefore premium cost. 6

7 What determines the lowest possible cost? 1. Administrative Cost 10% 2. Claims 90% We will talk about Claims Later 7

8 Medical costs are increasing three times faster than inflation WHY? Medical Cost Drivers: Increased utilization more procedures more often New procedures, medicines, and technology Increasing average age Government cost shifting Increasing Government taxes Increasing regulatory and compliance costs associated with HCR Lack of consumer price knowledge and control Lifestyle and habits 8

9 The Impact of Health Care Reform 9

10 What is Health Care Reform? Biggest overhaul of the United States health care system since Medicare and Medicaid in 1965 Requires most individuals to obtain health care coverage, and provides subsidies for many individuals Requires insurance companies and employers to provide consumer protections related to health coverage, like covering pre-existing conditions and not charging more for coverage based on gender 10

11 HEALTH CARE REFORM ITS IMPACT ON INSURANCE PLANS INCREASED TAXES PCORI FEES $2 PER PERSON FOR 2014 REINSURANCE FEES $5.25 PER INSURED PER MONTH FOR 2014 PROVIDER FEES APPROXIMATELY 1.4% OF FULLY INSURED PREMIUM FOR 2014 APPROXIMATELY 21 OTHER DIRECT AND INDIRECT TAXES GRANDFATHERING TO BE GRANDFATHERED REQUIRES THAT ONLY VERY LIMITED CHANGES IN BENEFITS OR PERCENTAGE OF PREMIUM PAYMENT OCCUR GRANDFATHER PLANS EXEMPT FROM CERTAIN PROVISIONS OF HEALTH CARE REFORM (UNTIL GRANDFATHER DIES) NON GRANDFATHERED SMALL GROUPS (UNDER 50 LIVES THIS YEAR- SOON TO BE UNDER 100) CANNOT KEEP CURRENT PLANS MUST MOVE TO NEW METALLIC PLANS 11

12 IMPACT (CONTINUED) GRANDFATHERED PLAN, UNLESS PREVENTIVE ADDED, MAY BECOME MORE EXPENSIVE IN THE LONG RUN INABILITY TO ADEQUATELY ADJUST COPAYS, COINSURANCE, DEDUCTIBLES, AND OUT OF POCKET MAXIMUMS WILL EVENTUALLY MAKE GRANDFATHERED PLANS UNAFFORDABLE GRANDFATHERED PLANS MAY NOT ACTUALLY BE GRANDFATHERED SELF INSURANCE PLANS SELF INSURED PLANS ARE EXEMPT FROM CERTAIN TAXES SELF INSURED PLANS ARE EXEMPT FROM STATE MANDATES SELF INSURED PLANS HAVE LOWER ADMINISTRATIVE COSTS BECAUSE OF THESE FACTORS, SELF INSURANCE IS BECOMING INCREASINGLY POPULAR AMONG LARGER (50+) GROUPS. (12)

13 SELF FUNDING SUMMARY OF COST ADVANTAGES Self Funded plans don t have to pay: 1.6% ND STATE PREMIUM TAX (1.75% ON $11,000,000 OF $12,000,000) 2.5% ADMINISTRATION ( 8.4% vs. 10.9% ) 1.4% PROVIDER TAX 1.0% CONVERSION COST 1.0% MARGIN 7.5% ADVANTAGE (13)

14 YOUR ASSOCIATION S INVOLVEMENT EARLY 2013 NDBA AND ICBND PRESIDENTS MET WITH BCBSND RECEIVED BCBSND OPINION THAT THE NDBA/ICBND ASSOCIATION FULLY INSURED PLAN SHOULD END BY THE 2014 PLAN ANNIVERSARY BCBSND MESSAGE WAS TAKEN TO BOTH NDBA AND ICBND BOARDS OF DIRECTORS THE TWO BOARDS ESTABLISHED A JOINT INSURANCE TASK FORCE TO EXAMINE ALTERNATIVE SOLUTIONS ALTERNATIVES WERE EXAMINED, INCLUDING JOINING WITH OTHER STATE ASSOCIATIONS SELF FUNDED PLANS, DISBANDING, AND ESTABLISHING A SELF FUNDED 501c9 ERISA TRUST EXCLUSIVELY FOR NORTH DAKOTA BANKS 14

15 AT THE RECOMMENDATION OF THE INSURANCE TASK FORCE, BOTH THE NDBA AND ICBND BOARDS VOTED TO PROCEED WITH ESTABLISHING A SELF FUNDED HEALTH PLAN THROUGH A 501c9 TRUST IN DECEMBER OF 2013, A CONSULTANT WAS RETAINED IN JANUARY 2014, AN ERISA ATTORNEY WAS HIRED TO DRAFT THE TRUST BIDS FOR REINSURANCE AND ADMINISTRATION WERE OBTAINED THE ND BANKS BENEFIT TRUST WAS ESTABLISHED. 3 TRUSTEES WERE SELECTED FROM EACH ASSOCIATION, EACH ASSOCIATION PRESIDENT BECAME A TRUSTEE, AND A 9 TH TRUSTEE WAS SELECTED BY THE 6 APPOINTED TRUSTEES. BCBSND WAS SELECTED AS THE INSURANCE CARRIER, PLANS OF INSURANCE WERE SELECTED, PREMIUM AND RESERVE REQUIREMENTS WERE ESTABLISHED AND HERE WE ARE! 15

16 The Creation of the ND BANKS Benefit Trust 16

17 ND BANKS Benefit Trust BOARD OF TRUSTEES SELECTED BY ICBND SELECTED BY NDBA 1. Ilene Baker, First Western Bank & Trust 1. Pam Binder, Northland Financial 2. Rick Beall, Jr., Peoples State Bank 2. Todd Heilman, Western State Bank 3. Sarah Getzlaff, Security First Bank of ND 3. Nancy Petersen, Lakeside State Bank BY POSITION: BY POSITION: 4. John Brown, President ICBND 4. Rick Clayburgh, President & CEO NDBA ELECTED BY 6 SELECTED TRUSTEES: Bonnie Dahl, Starion Financial (at large) ADVISORS ATTORNEY BCBSND MAIN CONTACTS CONSULTANT Jeffrey Cairns Terry Price David Middaugh Stinson, Leonard, & Street Western Regional Manager Middaugh & Associates, Inc. Jack Easton Director of Sales 17

18 Presented by Middaugh & Associates, Inc. 18

19 ND BANKS Benefit Trust assumes a portion of the risk for health benefit claims BCBSND Will Provide The Following: Specific and Aggregate Reinsurance Claims Processing and Payment Premium Billing and Receipt Enrollment Application Processing Termination Processing Plan Printed Materials Most BCBSND Available Resources 19

20 Administrative Fee: Fee charged by BCBSND for claims adjudication, billing, eligibility, customer service, plan document maintenance, etc. Expected Claims: Total claims underwriter expects the ND BANKS Benefit Trust to have in one policy year, actuarially determined from the last 3 years NDBA and ICBND Association Plans past claims experience Maximum Claims: The maximum is 117.5% of your your expected claims level Claims that exceed the maximum are reimbursed by BCBSND 117.5% = Aggregate Attachment Factor; percentage can vary, but 120% is most common 20

21 Specific Stop Loss Insurance: Purchased to protect the ND Banks Benefit Trust when eligible claims during the policy year on any one individual exceed the specific liability limit of $100,000. When an excess claim occurs, BCBSND pays the excess above $100,000. Aggregate Stop Loss Insurance: Protects the ND BANKS Benefit Trust from eligible claims for the entire group that exceed the annual aggregate liability limit. If eligible claims for entire group exceed the aggregate liability limit, BCBSND will pay for excess claims. 21

22 BCBSND Claims Experience vs. Estimated Expected Claims Groups 200+ Reaching x% of Expected Claims 32% 27% 18% 16% 5% 0% 1% 1% <90% 90.0% % 95.0% % 100.0% % 105.0% % 110.0% % 115.0% % 120.0% + 22

23 Aug Aug Aug Aug months Incurred Claims 24 months Paid Claims 12 months Next Contract Year Incurred Claims 24 months Next Contract Year Incurred Claims 23 With BCBSND Both Fully Insured and Self-Funded cover claims incurred in 12 months, whenever paid

24 Example of how a $350,000 claim would be handled: ND BANKS Benefit Trust pays the deductible amount: $100,000 If the individual Stop Loss Deductible is $100,000 the Insurance Company pays the excess over the deductible amount: $250,000 The amount funded but not reimbursed ($100,000) will apply toward the Annual Aggregate Deductible. 24

25 Flexibility in Plan Design Self-funded plan not bound by State mandates BCBSND allows more plan design flexibility Risk Management effectiveness through Stop Loss Insurance The ND BANKS Benefit Trust has chosen the amount of risk to retain and the amount to be covered under stop loss protection, both specific (individual) and aggregate. Under an insured arrangement, insurance company sets the pooling level. 25

26 Tax Savings No state premium tax for the self-funded claim fund; thus, an immediate savings equal to the amount of premium tax is realized. (ND state tax is 1.75%) Assuming annual claims + administration of $11,000,000 x 1.75% = $192,500 in savings to member banks. The Provider Tax required by the Affordable Care Act is eliminated. This year fully insured plans pay approximately 1.4% Next year this will be approximately 1.9% Administration Administration of the plan less expensive under a self-funded arrangement without sacrificing a reduction in services 8.4% of claims paid vs. fully insured coverage of approximately 10.9% of claims paid - A savings of 2.5%. 26

27 Additional Cash Flow Employer holds onto reserves Assuming annual premium of $12,000,000 Projected reserves = $1,000,000 growing to $2,500,000 Self-funding implies that the ND BANKS Benefit Trust must fund for incurred but unreported claims. Assuming reserve is maintained in an interest-bearing account, the Trust can regard it as a source of income. Therefore, additional income is generated. Margin Insurance companies typically charge 1-3% for margin (for fluctuations in claims) Under self-funded arrangement, this component is eliminated 27

28 SELF FUNDING SUMMARY OF COST ADVANTAGES Self Funded plans don t have to pay: 1.6% ND STATE PREMIUM TAX (1.75% ON $11,000,000 OF $12,000,000) 2.5% ADMINISTRATION ( 8.4% vs. 10.9%) 1.4% PROVIDER TAX 1.0% CONVERSION COST 1.0% MARGIN 7.5% ADVANTAGE (28)

29 Risk Assumption ND BANKS Benefit Trust assumes risk between the normally anticipated claim level and Stop Loss Coverage level Exposure ND BANKS Benefit Trust is exposed to any liability created by any successful legal claims against the self-funded plan Fiduciary Responsibility ND BANKS Benefit Trust is responsible Up Front Funding to Establish a Reserve is Required 29

30 Health Insurance Rates Fully insured average increase +21.6% ND BANKS Benefit Trust +18.1% This is 2% above calculated cost to grow the reserve. *Non-Grandfathered Plans lose current plan, must change to comparable metallic plan. Average increase 25.4% 30

31 2014 Vision Rates Plan Number Single Family 200 $8.71 $ $10.24 $ $11.18 $ $12.12 $ $13.30 $ $14.70 $31.50 Increase: 4.5% to 8% 31

32 2014 Dental Rates Plan number Single Family 103 $37.03 $ $45.30 $ $38.55 $ $48.13 $ $33.54 $ $40.84 $ $43.56 $ $47.92 $ $26.35 $ $40.84 $ $35.94 $ $38.66 $ % Increase

33 BENEFITS OF BEING A MEMBER OF ND BANKS Benefit Trust 33

34 ND BANKS Benefit Trust SHORT TERM BENEFITS YOUR BANK WILL BE ABLE TO IF YOU WANT KEEP YOUR CURRENT PLAN EVEN IF YOU ARE NON-GRANDFATHERED YOUR BANK WILL BE ABLE IF IT WANTS TO TO CHANGE PLANS TO 3 NEW PLANS CONTAINING BOTH PREVENTIVE BENEFITS AND AN INCENTIVE FOR EMPLOYEES TO START THE PROCESS OF BEING BETTER HEALTH CARE CONSUMERS BETTER SHOPPERS YOUR BANK CAN CHOOSE TO CARRY TWO NON-GRANDFATHERED PLANS A DUAL OPTION WITH ONE OF THE OPTIONS BEING A HIGH DEDUCTIBLE HEALTH PLAN DESIGNED TO BE COUPLED WITH A TAX FAVORED HEALTH SAVINGS ACCOUNT YOUR BANK WILL HAVE ACCESS TO TWO ONLINE PORTALS, YOU CAN CHOOSE TO USE ONE OR BOTH. THESE WILL BE HELPFUL WITH ALMOST ANY HR NEED YOU HAVE. 34

35 ND BANKS Benefit Trust LONG TERM BENEFITS PLAN SAVINGS OF 7.5% PER YEAR 2.5 % ADMINISTRATIVE COST 1.6 % STATE PREMIUM TAX 1.4 % PROVIDER TAX 1.0 % CONVERSION COST 1.0 % MARGIN SAVINGS POTENTIAL OF REDUCING CLAIMS THROUGH WELLNESS PROGRAMS AND INCENTIVES BEHAVIORAL MODIFICATION PROGRAMS PLAN DESIGN CHANGES 35

36 ND BANKS Benefit Trust LONG TERM BENEFITS, cont. PARTICIPATING IN THE SELECTION AND DESIGN OF ND BANKS BENEFIT TRUST PLANS THE OPPORTUNITY TO SAVE PREMIUM DOLLARS ON OTHER GROUP PRODUCTS IN FUTURE YEARS. GROUP LIFE & AD&D GROUP SHORT TERM AND LONG TERM DISABILITY SUPPLEMENTAL INSURANCE VOLUNTARY BENEFITS 36

37 ONE MORE TAX ITEM TO CONSIDER 37

38 Small Employer Health Care Tax Credit Created by Affordable Care Act Internal Revenue Code section 45R Effective beginning with 2010 tax year Requirements change for 2014 and later tax years See IRS Notices and and IRS proposed rule form Aug. 26, 2013, for guidance 38

39 SMALL EMPLOYER TAX CREDIT AVAILABLE TO GROUPS OF 25 OR LESS Maximum credit at 10 employees or less. Declines by 1/15 for each employee above 10. AVAILABLE IF AVERAGE SALARY $50,800 OR LESS Maximum credit at $25,000 or less. Declines proportionately above $25,000 AVAILABLE FOR TWO YEARS ONLY MUST PURCHASE INSURANCE THROUGH SHOP EXCHANGE MAXIMUM CREDIT 50% OF PREMIUM PAID BY BANK NOT INCLUDING EMPLOYEE SHARE, EVEN IF PRETAXED 39

40 CURRENT PLANS 40

41 Current Plans Preventive Benefit Out of Pocket Maximum 1. Blue Choice GF LIMITED-$25 copay well child care (up to age 6) & $30 co-pay mammogram, Pap Smear, Fecal Occult blood test, prostate cancer screen. Immunizations covered at 100% Medical: $1,000 single - $1,500 SPD - $2,000 family doubles out of network. Rx - $1,000 per person, plus all drug copays 2. Select Choice 250 GF 3. Select Choice 500 GF 4. Select Choice 1000 GF 5. Comp Choice 100 GF 6. Comp Choice 250 GF LIMITED -$25 copay well child care (up to age 6) & mammogram, Pap Smear, Fecal Occult blood test, prostate cancer screen. Immunizations covered at 100% LIMITED-$25 copay well child care (up to age 6) & mammogram, Pap Smear, Fecal Occult blood test, prostate cancer screen. Immunizations covered at 100% LIMITED-$25 copay well child care (up to age 6) & mammogram, Pap Smear, Fecal Occult blood test, prostate cancer screen. Immunizations covered at 100% LIMITED-$25 copay well child care (up to age 6) & mammogram, Pap Smear, Fecal Occult blood test, prostate cancer screen. Immunizations covered at 100% LIMITED-$25 copay well child care (up to age 6) & mammogram, Pap Smear, Fecal Occult blood test, prostate cancer screen. Immunizations covered at 100% Medical: $1,250 single - $1,875 SPD - $2,500 family doubles out of network. Rx - $1,000 per person, plus all drug copays Medical: $2,000 single - $3,000 SPD - $4,000 family doubles out of network. Rx - $1,000 per person, plus all drug copays Medical: $2,500 single - $3,750 SPD - $5,000 family doubles out of network. Rx - $1,000 per person, plus all drug copays Medical: $1,100 single - $1,650 SPD - $2,200 family. Rx - $1,000 per person, plus all drug co-pays Medical: $1,750 single - $2,625 SPD - $3,500 family. Rx - $1,000 per person, plus all drug co-pays

42 Current Plans, cont. Preventive Benefit Out of Pocket Maximum 7. Comp Choice 500 GF LIMITED-$25 copay well child care (up to age six) & mammogram, Pap Smear, Fecal Occult blood test, prostate cancer screen. Immunizations covered at 100% Medical: $2,000 single - $3,000 SPD - $4,000 family. Rx - $1,000 per person, plus all drug co-pays 8. Comp Choice 1000 GF LIMITED-$25 copay well child care (up to age six) & mammogram, Pap Smear, Fecal Occult blood test, prostate cancer screen. Immunizations covered at 100% Medical: $2,500 single - $3,750 SPD - $5,000 family. Rx - $1,000 per person, plus all drug co-pays 9. Classic Blue 100 GF LIMITED-$25 copay well child care (up to age six) & mammogram, Pap Smear, Fecal Occult blood test, prostate cancer screen. Immunizations covered at 100% Medical: $1,100 single - $1,650 SPD - $2,200 family. Rx - $1,000 per person, plus all drug co-pays 10. Classic Blue 250 GF LIMITED-$25 copay well child care (up to age six) & mammogram, Pap Smear, Fecal Occult blood test, prostate cancer screen. Immunizations covered at 100% Medical: $1,250 single - $1,875 SPD - $2,500 family. Rx - $1,000 per person, plus all drug co-pays 11. Blue Saver 2500/100 GF LIMITED-well child care to age six, 100% immunizations, 100% mammogram, Pap Smear, Fecal Occult blood test, prostate cancer screen. Immunizations covered at 100% Single: $2,500 SPD: $3,750 Family: $5,000 All Inclusive

43 Current Plans, cont. Preventive Benefit Out of Pocket Maximum 12. Select Choice 250 NGF 100% Preventive at 100% Single: $2,250 SPD: $3,375 Family: $5,000 All Inclusive 13. Comp Choice 250 NGF 100% Preventive at 100% Single: $2,750 SPD: $4,125 Family: $5,500 All Inclusive 14. Comp Choice 1000 NGF 100% Preventive at 100% Single: $3,500 SPD: $5,250 Family: $7,000 All Inclusive 15. Blue Saver 2500/100 - NGF 100% Preventive at 100% Single: $2,500 SPD: $3,750 Family: $5,000 All Inclusive

44 NEW PLANS Preventive Benefit Out of Pocket Maximum 1. Comp Choice 250 w/rx NGF 100% Preventive at 100% Single: $2750 SPD: $4,125 Family: $5,500 All Inclusive 2. Comp Choice 500 w/rx - NGF 100% Preventive at 100% Single: $3,000 SPD: $4,500 Family: $6,000 All Inclusive 3. Comp Choice 1000 w/rx - NGF 100% Preventive at 100% Single: $3,500 SPD: $4,500 Family: $7,000 All Inclusive 4. Blue Saver 2500/80 - NGF 100% Preventive at 100% Single: $5,000 SPD: $7,500 Family: $10,000 All Inclusive

45 Three New Comp Choice Plans Deductibles of: $250 $500 $1,000 45

46 Three New Comp Choice Plans Have: 100% ACA COMPLIANT PREVENTIVE ACTUAL MAXIMUM OUT OF POCKET LIMITS A NEW TIERED DRUG BENEFIT DESIGNED TO ENCOURAGE GENERIC THERAPUTIC EQUIVALENTS $10 copay Generic Formulary 100% of balance $25 copay Brand Formulary 75% of balance $50 copay Nonformulary 50% of balance (50% sanction does not apply to out of pocket maximum) 46

47 HIGH DEDUCTIBLE HEALTH PLANS 47

48 High Deductible Plans Deductible Blue Saver $2, Blue Saver $2, Single $2,500 $2,500 SPD $3,750 $3,750 Family $5,000 $5,000 Out of Pocket Maximum (includes deductible) Single $2,500 $5,000 SPD $3,750 $7,500 Family $5,000 $10,000 Copays Office Visits Specialist Urgent Care Emergency Room Coinsurance Drug Copays Formulary Generic Formulary Brand Non-Formulary None 100% payment after deductible. NONE NONE NONE NONE but 50% sanction 80% payment after deductible. 48

49 Plan Comparison Deductible Out of Pocket Maximum Copays Coinsurance Drug Copays BENEFIT COMPARISON BCBSND Comp Choice $250 Deductible 80%/20% Plan w/rx Single: $250 SPD: $375 Family: $500 Single: $2,750 SPD: $4,125 Family: $5,500 All Inclusive Office visit: $25 Specialist: $25 Urgent Care: $25 Emergency Room: $75 80% payment after copays and/or deductible Formulary Generic: $10 then 100% Formulary Brand: $25 then 75% Non-Formulary: $50 then 50% sanction BCBSND Blue Saver $2,500 Deductible 100% plan Single: $2,500 SPD: $3,750 Family: $5,000 Single: $2,500 SPD: $3,750 Family: $5,000 All Inclusive NONE NOTE: Both plans cover 100% of preventive. NONE 100% payment after deductible NONE 100% payment after deductible except Non-Formulary 50% sanction 49

50 Plan Maximum Benefit $250 Deductible 80%/20% Plan $2,500 Deductible 100% Plan UNLIMITED UNLIMITED 50

51 Maximum Annual Out of Pocket Costs 1. $250 deductible 80%/20% Plan All Eligible Expenses: $2,750 Single $4,125 SPD $5,500 Family 2. $2,500 deductible 100% Plan All Eligible Expenses: $2,500 SPD $3,750 SPD $5,000 Family 51

52 Network Available $250 Deductible 80%/20% Plan $2,500 Deductible 100% Plan All BCBSND participating providers are in your network You do not have to select a clinic All BCBSND participating providers are in your network You do not have to select a clinic 52

53 What is a High Deductible Health Plan? (Also referred to as a Consumer Directed Health Plan) 1. A plan designed to be used in conjunction with a Health Savings Account. 2. A plan that, by law, satisfies certain requirements with respect to deductibles and out of pocket expenses. Except for preventive care, the High Deductible Plan may not provide benefits until the deductible for that year is met. 53

54 What is a Health Savings Account? 1. Contributions can be made by either employee or employer or both 2. Contributions are tax deductible 3. For 2014, contribution limits are: $3,300 Single $6,550 - Family 54

55 HSA 4. A make-up contribution of $1,000 is allowed if age 55 or older. 5. Unlike a flex plan, there is no use it or lose it provision unused contributions accumulate and can be invested like an IRA or 401k. 6. Up to age 65, money in an HSA can be used to pay medical, dental, and vision expenses and not be taxed. 55

56 HSA 7. After age 65, money in an HSA can be used for medical, dental, and vision expenses, long term care expenses, long term care insurance premiums, Medicare Part A & B premiums, Medicare Advantage premiums, and Medicare Part D premiums and not be taxed. 8. Money can be withdrawn for non-medical expenses, but any amounts withdrawn will be subject to income tax and if withdrawn before age 65, a 20% penalty tax. 9. And most important since it s the Employee s money in the accounts Employees become much more conscious of medical spending. 56

57 REQUIREMENTS FOR MEMBERSHIP IN THE ND BANKS Benefit Trust o BE A MEMBER OF EITHER (OR BOTH) THE INDEPENDENT COMMUNITY BANKS OF NORTH DAKOTA THE NORTH DAKOTA BANKERS ASSOCIATION o OR BE A COMPANY THAT IS PART OF A CONTROL GROUP WITH A MEMBER BANK (LIMITED TO 10% OF TOTAL NUMBER OF EMPLOYEES OF ALL MEMBER BANKS COMBINED) o SHARE IN THE CREATION OF THE CLAIM RESERVE PAYING IN THE EQUIVALENT OF ONE MONTH S MAXIMUM COST TO THE RESERVE o AGREE TO THE TRUST S PARTICIPATION REQUIREMENTS INCLUDING ONLY COVERING EMPLOYEES AND GUARANTEEING A PROPORTIONATE SHARE OF ANY SHORTFALL 57

58 FUTURE 58

59 LET S LOOK AT THE LARGEST POTENTIAL SAVINGS CLAIMS 59

60 How About Wellness? And Behavior? Fully 70% of all Health Care costs are due to totally preventable chronic illness chronic illness caused by Lifestyle and Habits. 60

61 Controlling claim costs is necessary in order to maintain a High Quality Health Plan at the lowest possible cost. 61

62 We Can Help Your Employees Understand It is the responsibility of each and every Bank Employee covered by the ND BANKS Benefit Plan to manage and control claim costs. 62

63 Better Shoppers 1. Generic drugs instead of brand name 2. Walk-in clinics and Urgent care facilities instead of Emergency Rooms 3. Asking the purpose and cost of tests and procedures 63

64 Generic Drug Cost Savings - Cost Per Month Average Brand Name Drug: $ Cost to Plan Per Month Average Generic Drug: $14.96 Monthly Generic Savings: $ Assumed actual Savings of 50% $ Annual Savings (Per Prescription) : $1,

65 Generic Drug Cost Savings Estimated Number of Prescriptions: 18,764 Estimated Potential Increase in Generics, Decrease in Brand: 4% Potential Annual Savings to Your Plan: $81,661 65

66 Drugs that are now Generic or will be soon: Xeloda March 2014 Evista April 2014 Lunesta April 2014 Renvela April 2014 Diovan June/July 2014 Nexium 4 TH Quarter 2014 Intuniv December 2014 Welchol March 2015 Abilify April 2015 Epipen June 2015 Androgel August 2015 Avodart 4 TH Quarter 2015 Ortho Tri-Cyclen Lo December 2015 Actoplus Met XR

67 Lifestyle and Habits 1. Smoking 2. Exercise and Diet 3. Obesity 4. Preventive Check-Ups 67

68 Preventive Care (Included in the Non-Grandfathered plans, the two high deductible plans, and the three new Comp Choice plans) 68

69 Preventive Care Preventive care refers to measures taken to prevent individuals from contracting diseases Under the ACA, most private health plans must provide coverage for a range of preventive services and may not charge any copayments, deductibles or coinsurance to patients receiving preventive care Preventive care includes: - Medical tests, immunizations, screening tests, preventive medications and any other services that would prevent disease 69

70 Preventive Care for Adults Examples of covered preventive care services for adults include: - Physical examinations - Immunizations - Screening for obesity, and counseling from your doctor and other professionals to promote sustained weight loss, including dietary counseling - Blood pressure screening, tests to screen for high cholesterol and diabetes - Counseling on the daily use of aspirin to reduce the risk of stroke - Counseling from your health care provider on topics such as quitting smoking, treating depression and reducing alcohol use - HIV and STI screenings - Screening tests for colon cancer for adults over age 50 70

71 Preventive Care for Women Well-women visits Anemia screenings Rh Incompatibility screening for all pregnant women and follow-up testing for women at higher risk Urinary tract or other infection screening for pregnant women Folic acid supplements for women who may become pregnant Breastfeeding support, supplies and counseling Gestational diabetes screening for women 24 to 28 weeks pregnancy and those at high risk of developing gestational diabetes Breast Cancer Genetic Test Counseling (BRCA) for women at higher risk of breast cancer Mammograms every one to two years for women over 40 Cervical cancer screening Osteoporosis screening for women over age 60 depending on risk factors Domestic violence screening and counseling Contraceptives and contraceptive counseling (NOTE: Certain religious employers, such as churches, are not required to cover contraceptives) 71

72 Preventive Care for Children Immunizations Physical examinations Vision and hearing screenings Oral health risk assessments and fluoride treatments Blood tests Newborn care Iron supplements for children ages 6 to 12 months at risk for anemia Autism screening for children at 18 and 24 months Developmental screening for children under age 3 Behavior assessments Obesity screening and counseling Depression screenings for adolescents Alcohol and drug use assessments for adolescents Cervical dysplasia screening for sexually active females Sexually transmitted infection prevention counseling and HIV screenings for adolescents at higher risk 72

73 NEED HR HELP? 73

74 Introduction to MyWave Connect & MyWave Portal 74

75 MyWave Connect & MyWave Portal Your One-stop Business Resource You need more support, and it s hard to find reliable information in a timely manner We have the solution: MyWave Connect &/or MyWave Portal Your all-access pass to all the valuable business resources you need available on demand, 24/7 75

76 MyWave Connect & MyWave Portal Take Control of Compliance Comprehensive compliance information on ACA, COBRA, HIPAA, FMLA, employment laws, OSHA, workplace regulations and more 76

77 MyWave Connect & MyWave Portal Access Workplace Policies & Forms Save time with access to the workplace and safety policies and forms you need Access a full Employee Handbook, safety manual and much more 77

78 MyWave Connect & MyWave Portal Simplify Open Enrollment Find everything you need to manage open enrollment start to finish Forms, policies, employee communications and much more 78

79 MyWave Connect & MyWave Portal Support Your Wellness Initiatives Create or maintain your program with: Wellness newsletters Monthly health and safety observances Employee communications Comprehensive programs 79

80 MyWave Connect & MyWave Portal Find What You re Looking For Fast Smart search takes your preferences into account for most relevant results Easily find what you re looking for with categorized search results 80

81 MyWave Connect & MyWave Portal MyWave Portal Community Community Forum: (only on MyWave Portal) Through MyWave Community, you have access to a vast and knowledgeable network of colleagues from across the country You can share information and resources via the Community s interactive forum that enables you to post questions to your peers, provide insight into other users questions, and allows you to track response based on topics or individual questions Community postings are organized by topic so you can find information quickly and easily 81

82 Employer Consulting & Wellness Blue Cross Blue Shield of North Dakota is an independent licensee of the Blue Cross Blue Shield Association Noridian Mutual Insurance Company 82

83 Supporting Employer Goals The BCBSND Consulting and Wellness Team supports successful employer benefit programs with targeted support to Account Managers, Brokers, Consultants and Agents Key Customer Strategies: Improve Affordability Enhance Member Health Increase Consumerism Make It Easy To Do Business Health Care Reform Transition 83

84 Analytics & Reporting Tools BCBSND has analytical dashboards and tools to monitor and evaluate key health plan performance indicators Financial Reports Claims and Clinical Reporting Claims Modeling Medical Pharmacy Health Care Reform Tools 84

85 BCBSND Core Strengths Low Operating Expenses Strong Provider Network 100% Hospital Participation 98% of Eligible Physicians Participate Average Discounts: 33% for all services Whole Product/Whole Person Approach Commitment to Improving Member Health 85

86 Consulting & Wellness Team The BCBSND Consulting and Wellness Team is well equipped to identify population health characteristics, evaluate cost drivers and recommend program solutions to meet group needs. Team Members Large Group Consultant(s) Dedicated Pharmacist Physician (MD) Wellness Consultant(s) Member Education Consultant(s) Group Segments Key Accounts: (300+) Large/Mid: (51 299) Small: (<51) 86

87 87 Consultative Approach Assess Population Health Needs & Health Culture Develop Annual Program and Incentive Plan Implement Plan and Educate Employees Monitor Performance Periodically

88 Questions? Thanks for your attention. If you have any questions, please contact our office at: th Avenue South PO Box 2543, Fargo, ND Phone: (701) or toll-free at (800) dmiddaugh@cfsbd.com Zywave, Inc. All rights reserved.