Health Care Reform. A Spectrum of Opportunity

Transcription

1 Health Care Reform A Spectrum of Opportunity

2 Three Critical Time Periods Pre-Exchange Post-Exchange Excise Tax Comply with group health plan mandates and reporting and disclosures Examine opportunities Reconfigure benefit offerings Revisit eligible population Mitigate cost trend Positioning for 2018 Play-or-Pay Understand impact to company cost Understand impact of new options to employees Revisit total rewards plus workforce health resources Employee attitude around the value of employer health coverage may evolve Excise tax exacerbates plan costs Revisit the play-or-pay choice Evolve communication and change strategy as needed and continue information cascade 4/8/2013 2

3 Key Strategic Considerations Reform Element Play or Pay Excise Tax on high-cost coverage Key Consideration Will you offer minimum value plan to all full-time employees and dependents that is affordable? How many employees opt-out of your plans today? Will some/many opt back in? How many employees will become eligible under new Medicaid eligibility guidelines (in some states)? What portion of the your current population may be eligible for a federal premium subsidy through Exchange? How do we treat part-time and seasonal workers? Will our plans be subject to the nondeductible 40% employer excise tax? How can we avoid this penalty? Plan design Cost-sharing Improved workforce health Exit 4/8/2013 3

4 Play, pay, or something in between? Play Spectrum of Opportunity Pay Optimal Play Play and Redirect Selective Play Pay and Redeploy Pay and Exit Continue as a plan sponsor for all employees regardless of income or subsidy eligibility Restructure contributions to qualify low-paid employees for federal subsidies Limit eligibility to employersponsored plan and direct ineligibles to Exchanges Discontinue plan sponsorship and provide some financial top-up for employees Discontinue plan sponsorship with no financial accommodation for employees There are substantial communication & change management opportunities at every point along the spectrum 4/8/2013 4

5 How will employees react? Play Spectrum of Opportunity Pay Optimal Play Play and Redirect Selective Play Pay and Redeploy Pay and Exit Doesn t seem like Continue as a plan anything is changing. Do sponsor I need to do for all something employees different? regardless of income decide to continue or subsidy health eligibility care coverage Why did my company when others are making different choices? I don t make a lot of money, so why is my company making the cost of coverage so expensive? Restructure contributions to qualify low-paid employees for federal subsidies Is there somewhere else I should go to get more affordable coverage? Limit eligibility to offering employersponsored coverage to some employees but not to others? plan and direct ineligibles to paying more for Exchanges Why is my company Am I going to be coverage that s not as good as what I had through my company? Discontinue plan sponsorship and provide some financial top-up for employees What am I supposed to do with the money my company is giving me? Who can help me figure out how to spend it the best way? Discontinue plan to sponsorship go now for health with care no coverage? financial accommodation for employees Where am I supposed How will I afford it? Is my company going to do anything to help me figure this out? 4/8/2013 5

6 Setting the Stage for 2014 Since state health plan Exchanges are scheduled to go live in 2014, in 2013 employers will need to: Communicate about their approach to Health Care Reform ( play-or-pay ), their commitment to providing health care coverage and what this means for the employee Send a separate notice of exchange-based coverage options available in 2014 (required) Inform employees about additional group health plan mandates during 2014 enrollment 4/8/2013 6

7 Information Overload Employees Tuning Out Medicaid Expansion 4/8/2013 7

8 Here s What We re Trying to Communicate 4/8/2013 8

9 Effective Communication = Five Key Questions to Answer Right Now 1. How will my company healthcare benefits change and why? 2. What will these changes mean to me and my family? 3. What do I need to do differently, and when, to be covered? 4. What resources are you providing to help me understand my options so I can make an informed decision/smooth transition? 5. Where can I go/who can I talk to if I have questions? 4/8/2013 9

10 Ten Steps for Employers to Move Forward on the Strategic Implications of Health Care Reform 1. Analyze the near-term savings opportunities offered by PPACA on retiree medical benefits 2. Determine whether all employees (and their dependents) within the employer s controlled group of corporations are eligible for a group health plan if they work 30 hours per week or more 3. Determine whether the payroll system currently allows you to identify hourly employees who work 30 hours per week, on average, over the course of a month (or 130 hours per month) 4. Determine what portion of your employee population earns at or near the federal minimum wage 5. Monitor whether the states where your employees live decide to expand their Medicaid eligibility to 133% of the federal poverty level (FPL) 4/8/

11 Ten Steps for Employers to Move Forward on the Strategic Implications of Health Care Reform 6. Determine whether health benefits are a significant part of your employee value proposition for all or only some of your employees 7. Investigate how various stakeholders (customers, employees, unions, Board of Directors, stock analysts, etc.) would react if you re-positioned your role in providing health benefits to employees 8. Monitor whether the Exchanges are providing a competitive market for quality individual and small group health insurance in your key states 9. Establish a plan to communicate with employees on health care reform and manage any change 10. Regularly share what you learn about the employer implications of health reform with senior management, HR, finance, law, government affairs and public relations. Health reform is a total business planning issue 4/8/

12 Workforce Planning Considerations are Productivity and differential performance materially influence results Workforce has a diverse range of occasional and part-time workers Many employees are low-wage earners Contracting represents a material part of how the organization delivers or manages its services Low margin or non-profit business Labor cost represents a significant portion of overall costs Particularly Important Company profile: Industries to watch: Workforce segment issues: Health Care Customer Support Hospitality Distribution Some workforce segments eligible for Low-wage, health care benefits, Select full-time but not participating Manufacturing today 4/8/ Retail High hour part-time Contractors Flex staff (flexible hours) Long-term temporary Some workforce segments are not currently eligible for health care benefits, but may be in 2014