The Impact of Health Care Reform and the Meredith Wellness Strategy Tim O Neil, Director, Employee Benefits and Wellness, Meredith Corporation ICEBS

Transcription

1 The Impact of Health Care Reform and the Meredith Wellness Strategy Tim O Neil, Director, Employee Benefits and Wellness, Meredith Corporation ICEBS Employee Benefits Symposium July 8, 2015

2 Agenda Meredith overview Wellness strategies Impact of health care reform What s next Summary 2

3 Meredith Corporation Overview 4,000 benefits-eligible employees Operates in 24 different states Self-funded medical plan Spends approximately $25 million annually on health costs 3

4 Meredith at a Glance National Media Revenue: $1.1B Local Media Revenue: $400M WORKING WSM V -TV WSM V-DT NASHVILL E YOU 4 Figures represent consensus estimates for Fiscal 2015

5 Agenda Meredith overview Wellness strategies Impact of health care reform What s next Summary 5

6 Goal: Improve health of employees Win-Win: Setting the Vision o Employees feel better and have a better quality of life o Company benefits from happier, healthier, more productive employees with lower healthcare costs High priority for leadership Establishing a wellness legacy 6

7 Key Elements for Worksite Wellness Comprehensive Approach to Wellness Age appropriate preventive exams Health risk assessment and annual wellness screening Health coaching initiative based on risk Supporting initiatives and campaigns throughout the year Annual personalized report and aggregate reporting 7

8 Why is Engagement so Important? $2,500 Meredith Medical Claims in 2014 $3,200 $3,400 $4,300 $5,400 Healthy Employee Employee (3+ Risks) Healthy Spouse Spouse (3+ Risks) Non- Participant 230 participants graduated from the wellness coaching program in 2014, saving the medical plan $225,000 in annual claims 8

9 : $300 discount for completing wellness screening : Added the Wellness Points program o Increased premiums discount to $500 o 92% employee participation 2012: Wellness Screening = Choice of Medical plan options for 2013 o o o Insured spouses and domestic partners now participate 98% of insured employees and spouses completed the screening Added Preventive Exams and Wellness Coaching to Points Program o Increased $500 incentive to $ : Added Preventive Exams for Choice of Medical Plans o Wellness Program Timeline 98% of insured employees and their spouse or domestic partner completed the wellness screening and age-appropriate preventive exams 9

10 2015 Meredith Wellness Program Complete the Entire Wellness Program for Choice of Medical Plans and Lowest Rates 10

11 Policy change Organizational Alignment Complete wellness screening for medical discount 2006 Tobacco-free workplace 2008 Expanded wellness reimbursement program 2009 Bicycle Commuter subsidy 2009 Wellness Points & Well Bucks 2010 Spouse participation in wellness screening 2012 Complete wellness program for choice of medical plans

12 12 Better Aligning Benefit Dollars

13 Wellness Bucks Program Employees participate in wellness campaigns to earn Well-Bucks Employees can use Well-Bucks to be reimbursed for purchases including: Athletic Shoes Fitness Apparel Therapeutic Massage Exercise/Fitness Equipment Pre-Retirement Financial Counseling Toward any of the current wellness reimbursement categories 13

14 Live Healthy Meredith Overall Stats Total Participants ,152 3,444 4,090 20,059 Number of Teams ,684 Activity Minutes (in millions) Weight Loss (in pounds) 2,715 3,236 6,021 6,490 6,065 45,098 85% of participants said they engage in more regular physical activity and have improved eating habits as a result of the program 14

15 11.4% 10.7% Tobacco Cessation Employee Tobacco Use at Meredith 9.0% 8.3% 7.5% 4.5% 3.4% 2.3% employees have quit tobacco use since 2009 representing $275,000 in annual medical plan savings (Meredith has spent $65,000 on the tobacco cessation program) 15

16 Enhancing Financial Wellness Improving Workplace Outcomes and Employee Retirement Readiness through Financial Wellness Offering Financial Education Improving Financial Literacy - Employees feel better and have a better qualify of life - Company benefits from happier, healthier, more productive employees with lower healthcare costs Addressing Financial Advice Promoting Financial Well-Being 16

17 Financial Wellness Outcomes Financial Wellness Checkup Summary Financial Wellness Score (1=low financial well-being, 10=high financial well-being) High Financial Distress 22% 8% High Cash Flow Stress 41% 22% Low Savings Rate 38% 25% Understanding of Employee Benefits (Moderate or high) 73% 82% 17

18 Meredith Versus National Averages National Meredith Financial Wellness Checkup Summary Pre- Program (2010) Current Year (2014) Pre- Program (2010) Current Year (2014) Financial Wellness Score 1=low financial well-being, 10=high financial well-being Good, High or Extremely High Financial Well-Being (PFWC Score 7-10) 42% 24% 43% 69% 42% of employees who completed a financial workshop in 2014 increased their financial wellness score over the prior year compared to 16% of employees who did NOT complete one 18

19 Improved Financial Behaviors Financial Behaviors During the Last 12 Months % Responded Yes Increased emergency fund savings 60% Reviewed spending plan/budget 58% Reduced amount of debt 46% Obtained or updated life insurance 39% Reviewed asset allocation strategy 32% Increased retirement savings contribution 29% Changed benefit elections during open enrollment 28% 19

20 Improved Financial Behaviors Debt Reduction in 2014 Didn't Have Debt Reduced Debt Didn't Reduce Debt 13% 46% Reduced Debt 41% Debt Free 20

21 Financial Wellness Scores by Age Financial Wellness Checkup Summary Score 5+ (2010) Score 5+ (2014) Attended a Workshop Last Year Age 21 to 29 62% 77% 60% Age 30 to 39 69% 83% 69% Age 40 to 49 73% 86% 72% Age 50 to 59 73% 88% 75% Age % 92% 80% 21

22 Participant Satisfaction 99% would recommend the financial wellness workshops to others 98% ranked the quality of instruction as very good/excellent 91% believe their financial life will improve as a result of the program 22

23 Comments Include: Much clearer understanding of my benefits and I learned info about medical billing and services I wasn t aware of that can help save me money. Empowering to keep pushing to goals and refocus! I love the classes. I love the teaching style and materials that are supplied. Gave me a good starting point and a kick in the pants to get going. Great new way to look at finances in order to more effectively manage my money. 23

24 Best-in-Class Initiative Panelist at the 2014 JP Morgan Retirement Symposium and presenter at the 2013 World at Work Total Rewards Conference Financial wellness program featured in Plan Sponsor Magazine in May 2014 and the Wall Street Journal in April 2015 Peer-reviewed research study published in the Journal of Financial Counseling and Planning Named an Exemplary Employer by the Personal Finance Employee Education Foundation 24

25 National Recognition and Awards WELCOA Platinum-Level Well Workplace United HealthCare Wellness Leadership Award (2008, 2010, 2011, 2013) AHA Platinum-Level Fit Friendly Company ( ) WELCOA Gold-Level Well Workplace (2008) Partnership to Fight Chronic Disease Promising Practices in Worksite Wellness Award (2009) League of American Bicyclists Silver-Level Bike Friendly Business Award ( ) New York Post, Fortune, the Wall Street Journal, Benefits Quarterly, HR Magazine and several Special 25 Interest Publications

26 Agenda Meredith overview Wellness strategies Impact of health care reform What s next Summary 26

27 Flattening the Slope of Healthcare Cost Increases Year Average Monthly Cost per Covered Employee % Change over Prior Year 2006 $562 12% 2008 $559 10% 2010 $571 1% 2012 $598 3% 2014 $531 (12%) 27

28 Medical Plan Analysis Cost Per Employee Per Month $1,300 $1,200 Prior Trajectory (10% increase) $1,242 $1,100 $1,000 $900 National Average (7% trend) Actual Cost Per Employee (2-3% trend) $968 $800 $700 $600 $500 $607 $562 $ The cost of doing nothing is far greater than the cost of offering a wellness program 28

29 Aggregate Wellness Scores (All Locations) Health Screening Data First Year (2007) Current Year (2014) 7-yr. Change Healthy (2 or fewer health risks) 72% 86% +14 pct pts Elevated Health Risk (3+ health risks) 28% 14% -14 pct pts Reduced major health risks for employees including: Elevated blood pressure by 50% Obesity by 11% 29

30 Annual Employee Contribution Increases Since 2007 Wellness Program Participants: 2-3% Non-Wellness Participants: 20%+ differential 30

31 Reinsurance Fees $500k in 2014 $304k in 2015 $193k in 2016 Impact of Health Care Reform 30 hour employees/eligibility 6055 & 6056 Reporting need tracking/measuring tool Excise Cadillac Tax EEOC and ADA 31

32 UMR 2014 Review o Membership increased with claims decreasing in 2014 o o o o o Across the board, claim costs and admissions decreased for all members The number of claims $50k+ stayed the same as 2013 but overall claims were less The sickest 1% account for 15.6% of costs while the 31% healthiest account for 2.6% of costs $1.6M (13.8%) of paid claims on conditions with link to lifestyle (cancer, behavior health, diabetic) Maternity and newborns are key drivers of inpatient costs o Generic drug utilization 79.4%, below UMR book of 81.8% o Specialty drug spend of $1.1MM is 31% of pharmacy costs and higher than UMR book of 23.4% o Average cost for Generic = $24; Brand = $169 and Specialty = $2180 Oxford o Decreasing membership and increasing claims in 2014 o 2014 claim costs up 20% over 2013 o Claims $50K+ more than 2x 2013 o Large claims for Maternity/Pre-natal claims and a large claimant are cost drivers o Specialty pharmacy and brand drug costs are cost drivers on pharmacy 32

33 2015 Update 33 Forecast 2015 to come in slightly under budget o Budget $25.4MM; Project $25.3MM o For 2015, expect UMR under budget 1.7%; Oxford exceeds budget 7.3% o Linear regression since 2011 UMR medical trend.7% and pharmacy 13.1% Oxford medical trend 10.4% and pharmacy 16.7% o ACA fees = approximately $304k Enrollment o UMR Total employees 2,826; increased 367 employees Almost 50%/50% split in $750/$2600; 53 employees in 5000 plan o Oxford Total employees 264; decreased 231 employees or 46.7% 64%/36% split in $750/$2500; 1 employee in the 5000 plan Projection for 2016 (claims thru March 2015) o Need $27.2 MM, increase of $1.7MM; Overall increase 6.7% (All locations blended including New York) o Estimated fees increase 2.4%, anticipating 15% increase on stop loss o Look at geographic pricing as a strategy going forward o ACA fees = approximately $193k

34 ACA Requirements ACA Fees 2015 o PCORI/Research fees continue in 2016; $2.08 per covered member/per year o Reinsurance fees go down in 2016; $27 per covered member/per year, down from $44 o In 2015, spent $304k. Estimate $193k in 2016 o o o 2016 o o o o 2018 o Employer shared responsibility requires 70% coverage of eligible employees (those regularly working 30+ hours/week) in order to avoid tax Affordability requirements set at 9.56% of employee only coverage on the lowest cost plan in order to avoid penalty (Contributions $123.50/month for employee only coverage) Combined medical/pharmacy out of pockets Employer shared responsibility requires 95% coverage of eligible employees (those regularly working 30+ hours/week) in order to avoid tax Affordability requirements set at 9.66% of employee only coverage on the lowest cost plan in order to avoid penalty HDHP deductible minimums remain unchanged at $1300/$2600. Out of Pocket limits increase to $6,550/$13,200 an increase of $100/$200. Maximum H.S.A contributions remain unchanged for employees at $3,350 and increase $100 for family coverage to $6,750 Employer and Employee reporting requirements begin in Q12016 Cadillac tax puts limits on total cost of plans at $10,200 for an employee and $27,500 for a family. Awaiting final regulations 34

35 2016 Plan Design Considerations Medical Plan design considerations: o $750 to $1200 & $1500 deductible o $2600 with 90% coinsurance and out of pocket of $3,600 o Two HDHP plans PPO and HDHP plan offering appeal to different types of buyers: budgeters & savers Recommend no medical plan deductible changes in Re-evaluate in 2017 along with confirmation of Cadillac Tax guidance Recommend pharmacy plan changes to increase generic utilization and address brand drug and specialty drug costs Consider a spousal surcharge of $1,000 - $1,500 for working spouses eligible for other employer sponsored coverage o Towers Watson Survey of 595 employers with 1,000+ employees showed 24% already using a spousal surcharge in 2014 and another 15% are considering for 2015 Expand use of geographic rate tiers to more appropriately charge for cost of care differences 35

36 36 Plan Design Modeling

37 Geographic Rating Scenario Continue to work with Wakely on geographic rate structures with updated claims Plan relativities developed blending Meredith actual experience and Wakely s book of business o New York = 1.48 o Iowa =.70 Overall needed increase of 6.7% is spread out to various geographic regions to roll up to needed increase Created a straw model with 4 different geographic rating segments Recommend we keep New York, Iowa and outside Iowa rates for 2016 and then re-evaluate for 2017 based on final guidance on Cadillac tax 37

38 38 Geographic Relative Values

39 Planning for Cadillac tax puts limits on total cost of plans at $10,200 for an employee and $27,500 for a family.

40 2019 Projections 40 Cadillac tax puts limits on total cost of plans at $10,200 for an employee and $27,500 for a family.

41 2020 Projections 41 Cadillac tax puts limits on total cost of plans at $10,200 for an employee and $27,500 for a family.

42 Agenda Meredith overview Wellness strategies Impact of health care reform What s next Summary 42

43 Our 3-Year Plan 2016: 2017: 2018: o Oxford is eliminated, medical plan designs remain unchanged o Include brand drug and specialty drug plan design changes to control costs o Maintain New York rating group along with inside/outside Iowa o Invest in more intensive coaching for disease states and behavioral health o Go out to bid for medical/pharmacy o Monitor Cadillac Tax and EEOC guidance on wellness o May need to eliminate $750 plan in preparation for Cadillac tax; consider adding a Bronze plan o Look at network steerage solutions such tiered network designs, specialty networks and Accountable Care Organizations (ACO s) o Consider defined contribution model with appropriate geographic differences o Plans are positioned to avoid any Cadillac tax o Look at provider risk sharing models to manage risk and claims 43

44 Wellness Coaching Strategy In lieu of expanding traditional medical services in-house, direction was provided to pursue more intensive coaching for those most at risk Evaluated several vendors to address: o Disease management o Behavioral health needs Recommendation: o Nurse directed disease management based on risk stratification o Behavioral health based coaching Program costs fall in line with already approved medical center expenses EEOC has responsibility for ADA and recently issued proposed rules which may impact incentives inside and outside the health plan and the availability of plan design differential to those not fully participating 44

45 Expanded Wellness Coaching Initiative o On-site and video conference health coaching o Risk and condition-specific scorecards Partner with UMR to offer expanded consumerism and price transparency tools Telemedicine kiosks Wellness Program Next Steps Retirement Benefits Plan Design o Auto Enrollment Percentage with Auto Escalation o Expanded Company Match Program Single sign on and retirement readiness dashboard 45

46 Agenda Meredith overview Wellness strategies Impact of health care reform What s next Summary 46

47 Know Your CEO Have a desired outcome (Know what you re solving for) Align with the business strategy Establish an agreed-upon method to define success Offer benefits that support your direction Engage employees and managers (buy-in and support) Celebrate success, but evolve raise the bar every year 47

48 Key Takeaways Keep program design simple Allow employees to adjust to changes in program structure Use incentives to facilitate desired outcomes Leverage wellness and benefits as a retention tool as part of total compensation Engage senior leadership and company-wide wellness committees 48

49 For Additional Information Meredith Wellness Case Study 49

50 Contact Information Tim O Neil MBA, CEBS Director, Employee Benefits and Wellness Office: Cell: Tim.O Neil@Meredith.com Wellness@Meredith.com 50