Are your employees selecting the right health plan?

Transcription

1 Are your employees selecting the right health plan? July 24, 2018 This information is intended for internal use within Webster and HSA Bank and, as such, is not for external or public use 2018 HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 1

2 Introduction Over 20 years of experience in employee benefits, insurance and financial services More than 12 years exclusively focused in consumer-directed healthcare Kevin Robertson Chief Revenue Officer HSA Bank Compliance Committee Chairman of the American Bankers Association HSA Council 2018 HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 2

3 Today Define choosing the right and wrong plan Evaluate 3 health plan scenarios Identify the steps employers can take to provide guidance to employees Q&A 2018 HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 3

4 About HSA Bank Vision To inspire every individual to own your health by making it easy to access, understand, and afford healthcare. Mission We empower individuals and their families to make the most of every healthcare dollar HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 4

5 What does it mean to choose the wrong plan? HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 5

6 Employer confidence in employee health plan choice Results from a proprietary third-party survey commissioned by HSA Bank, April 24-26, 2018, surveying 100 human resources and benefit professionals HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 6

7 The right health plan 2018 HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 7

8 Now or Later 2018 HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 8

9 Why employees choose the wrong plan 1 Uncertainty about plan cost sharing amounts and their impact 2 Fear of a high deductible or out-of-pocket maximum 3 Lack of plan evaluation 2018 HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 9 9

10 Uncertainty about plan cost sharing amounts and their impact Results from a proprietary third-party survey commissioned by HSA Bank, April 24-26, 2018, surveying 100 human resources and benefit professionals HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 10

11 Comparing the Average HDHP and PPO Plans Type of Plan Average annual premium (worker contribution) Average annual deductible Average annual employer HSA contribution PPO vs. HDHP Single Coverage Average annual outlay if deductible met PPO $1,312 + $1,046 - $0 = $2,358 HDHP $1,020 + $2,304 - $795 = $2,529 PPO vs. HDHP Family Coverage PPO is $171 less PPO $6,050 + $2,503 - $0 = $8,553 HDHP $4,599 + $4,527 - $1,417 = $7,709 HPHP is $844 less Employer Health Benefits 2017 Annual Survey. Kaiser Family Foundation & Health Research & Educational Trust. September HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 11

12 Fear of a high deductible or out-of-pocket maximum In 65% of firms the high deductible option would result in lower maximum possible spending for the employee for the year At roughly half of the firms the high deductible plan financially dominates the lower deductible option for employees Employees facing a range of possible medical-spending distributions would save on average over $500 per year with the high deductible option, often with no additional annual financial risk Based on data on plan designs from the Kaiser Family Foundation Employer Health Benefits Survey for 331 firms that offered employees both a qualifying high deductible health plan and a lower deductible option. How Common are Dominated Health Plan Options? Evidence from Employer Health Benefits with High-Deductible Plans HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 12

13 Lack of plan evaluation 93% of 80% 57% of employees typically choose the same benefits (in terms of medical, dental, and vision) year after year employees spent less than one hour researching options during their last open enrollment session of employees spent less than 30 minutes researching options during their last open enrollment session 2016 Aflac Open Enrollment Survey. Aflac. August HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 13

14 Factors to consider when evaluating plans In-network providers Medical needs Out-of-pocket costs Income Monthly premium Coinsurance Ability to save Employer HSA contributions Deductible Potential tax savings Copays SHORT TERM & LONG TERM IMPLICATIONS 2018 HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 14

15 Understanding health insurance payment terminology Fixed cost that is guaranteed Premium: The amount the policy-holder or their sponsor (an employer) pays to the health plan to purchase health coverage. Usage-based variable costs Copay: The amount that the insured person must pay out of pocket before the health insurer pays for a particular visit or service. Coinsurance: The percentage of the total cost that an insured person may also have to pay in addition to the copay. Deductible: The amount that the insured must pay out-of-pocket before the health insurer pays its share. Out-of-pocket maximum: The maximum amount the insured person will pay before health insurance pays all further covered costs HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 15

16 Consumers lack financial literacy of health plan costs HSA Bank Health & Wealth Index SM. HSA Bank. March 7, HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 16

17 Estimating medical needs Review medical and prescription claims from the previous year Consider any upcoming known health changes or planned services Estimate the cost of upcoming services 17

18 Estimating medical needs No patient cost-sharing: Screenings for some cancers (breast, lung, skin and more) and chronic conditions Immunizations Health promotion services (counseling and cessation programs) Pregnancy and reproductive health services 18

19 Health Plan Comparison Case Studies 19

20 Case Study 1: Family HDHP v. PPO Situation: The family had seven doctor visits (one child had an ENT specialist visit), preventative care visit for each family member, two urgent care visits and a broken arm for one child. Number of Services HDHP Plan PPO Plan Primary care office visit 7 $ 497 $ 140 Specialist office visit 1 $ 158 $ 40 Preventative care 4 $ 0 $ 0 Urgent care 2 $ 300 $ 150 Broken arm 1 $ 1,177 $ 400 Cost of medical care $ 2,132 $ 730 Annual deductible $ 4,500 $ 2,500 Total medical expense $ 2,132 $ 730 For illustrative purposes only. Medical services changes were obtained from Actual medical costs may vary. Assumes 15% Federal income tax rate, 7.5% FICA tax rate, 4% state income tax rate and Total Medical Expense equals employee's annual HSA contribution. HSA Bank does not provide tax advice. Please consult your tax advisor. 20

21 Case Study 1: Family HDHP v. PPO Cost Comparison HDHP Plan PPO Plan Annual premium $ 4,500 $ 6,000 Total medical expense $ 2,132 $ 730 Employer HSA contribution $ (1,400) $ 0 Federal tax savings $ (312) $ 0 Social Security and Medicare (RCA) tax savings $ (156) $ 0 State tax savings $ (83) $ 0 Total Annual Medical Expenses $ 4,681 $ 6,730 $2,049 in savings with an HSA-qualified HDHP For illustrative purposes only. Medical services changes were obtained from Actual medical costs may vary. Assumes 15% Federal income tax rate, 7.5% FICA tax rate, 4% state income tax rate and Total Medical Expense equals employee's annual HSA contribution. HSA Bank does not provide tax advice. Please consult your tax advisor HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 21

22 Case Study 2: Individual HDHP v. PPO Situation: Samantha suffered a knee injury in a car accident. The care she received included an ER visit and 12 physical therapy sessions. She is also taking a brand name prescription for high cholesterol. Number of Services HDHP Plan PPO Plan Preventative care 2 $ 0 $ 0 ER visit 1 $ 1,500 $ 250 Physical therapy sessions 12 $ 960 $ 480 Brand name prescription 12 $ 2,400 $ 600 Cost of medical care $ 4,860 $ 1,330 Annual deductible $ 2,500 $ 1,000 Coinsurance $ 472 $ 33 Total medical expense $ 2,972 $ 1,033 For illustrative purposes only. Medical services changes were obtained from Actual medical costs may vary. Assumes 15% Federal income tax rate, 7.5% FICA tax rate, 4% state income tax rate and Total Medical Expense equals employee's annual HSA contribution. HSA Bank does not provide tax advice. Please consult your tax advisor HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC

23 Case Study 2: Individual HDHP v. PPO Cost Comparison HDHP Plan PPO Plan Annual premium $ 700 $ 1,400 Total medical expense $ 2,972 $ 1,033 Employer HSA contribution $ (800) $ 0 Federal tax savings $ (446) $ 0 Social Security and Medicare (RCA) tax savings $ (223) $ 0 State tax savings $ (119) $ 0 Total medical expense $ 2,084 $ 2,433 $349 in savings with an HSA-qualified HDHP For illustrative purposes only. Medical services changes were obtained from Actual medical costs may vary. Assumes 15% Federal income tax rate, 7.5% FICA tax rate, 4% state income tax rate and Total Medical Expense equals employee's annual HSA contribution. HSA Bank does not provide tax advice. Please consult your tax advisor HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 23

24 Case Study 3: Family HDHP v. HDHP Situation: The family had 4 preventative care visits, 3 urgent care visits, 2 generic prescriptions for the entire year, one parent had lab tests and one child had an appendectomy. Number of Services HDHP Plan 1 HDHP Plan 2 Preventative care 4 $ - $ - Urgent care 3 $ 378 $ 378 Generic prescription 24 $ 360 $ 360 Lab tests 1 $ 100 $ 100 Appendectomy 1 $ 8,000 $ 8,000 Cost of medical care $ 8,838 $ 8,838 Annual deductible $ 3,000 $ 5,000 Coinsurance $ 1,168 $ 768 Total medical expense $ 4,168 $ 5,768 For illustrative purposes only. Medical services changes were obtained from Actual medical costs may vary. Assumes 15% Federal income tax rate, 7.5% FICA tax rate, 4% state income tax rate and Total Medical Expense equals employee's annual HSA contribution. HSA Bank does not provide tax advice. Please consult your tax advisor. 24

25 Case Study 3: Family HDHP v. HDHP Cost Comparison HDHP Plan 1 HDHP Plan 2 Annual premium $ 4,345 $ 2,454 Total medical expense $ 4,168 $ 5,768 Employer HSA contribution $ (1,250) $ (1,250) Federal tax savings $ (625) $ (865) Social Security and Medicare (RCA) tax savings $ (313) $ (433) State tax savings $ (167) $ (231) Total medical expense $ 6,158 $ 5,443 $715 difference between two HSA-qualified HDHPs For illustrative purposes only. Medical services changes were obtained from Actual medical costs may vary. Assumes 15% Federal income tax rate, 7.5% FICA tax rate, 4% state income tax rate and Total Medical Expense equals employee's annual HSA contribution. HSA Bank does not provide tax advice. Please consult your tax advisor HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 25

26 Comparing High Deductible Health Plans Plan 1: $5,000 Deductible, $7,000 Out-of-Pocket Maximum, 20% Co-insurance (In Network) Plan 2: $3,000 Deductible, $6,000 Out-of-Pocket Maximum, 20% Co-insurance (In Network) Total Medical Costs Deductible OOP Coinsurance Plan Analysis Plan 1 Plan 2 Annual ER HSA Premium Contribution Total Cost Deductible OOP Coinsurance Annual Premium ER HSA Contribution Total Cost Lower Cost Choice Savings $0 $0 $0 $2,600 $500 $2,100 $0 $0 $4,550 $500 $4,050 Plan 1 $1,950 $250 $250 $0 $2,600 $500 $2,350 $250 $0 $4,550 $500 $4,300 Plan 1 $1,950 $500 $500 $0 $2,600 $500 $2,600 $500 $0 $4,550 $500 $4,550 Plan 1 $1,950 $1,000 $1,000 $0 $2,600 $500 $3,100 $1,000 $0 $4,550 $500 $5,050 Plan 1 $1,950 $2,000 $2,000 $0 $2,600 $500 $4,100 $2,000 $0 $4,550 $500 $6,050 Plan 1 $1,950 $3,000 $3,000 $0 $2,600 $500 $5,100 $3,000 $0 $4,550 $500 $7,050 Plan 1 $1,950 $4,000 $4,000 $0 $2,600 $500 $6,100 $3,000 $200 $4,550 $500 $7,250 Plan 1 $1,150 $5,000 $5,000 $0 $2,600 $500 $7,100 $3,000 $400 $4,550 $500 $7,450 Plan 1 $350 $10,000 $5,000 $1,000 $2,600 $500 $8,100 $3,000 $1,400 $4,550 $500 $8,450 Plan 1 $350 $15,000 $5,000 $2,000 $2,600 $500 $9,100 $3,000 $2,400 $4,550 $500 $9,450 Plan 1 $350 $20,000 $5,000 $2,000 $2,600 $500 $9,100 $3,000 $3,000 $4,550 $500 $10,050 Plan 1 $950 $30,000 $5,000 $2,000 $2,600 $500 $9,100 $3,000 $3,000 $4,550 $500 $10,050 Plan 1 $ HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 26

27 Compare health plans using online tools hsabank.com/compareplans 2018 HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 27

28 Online Decision Making Tools Online decision making tools help your employees navigate through the confusion of healthcare decisions 2018 HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 28

29 HSA Bank Health & Wealth Index SM Calculator Employees can: Get their personal health and wealth engagement score Compare the score to the national average Receive suggestions for improving their engagement level hsabank.com/indexscore 2018 HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 29

30 Steps employers can take to help employees make the right decision Encourage employees to use a health plan comparison tool. Have a targeted communication plan. Work collaboratively with your benefits consultant. 4 5 Start the conversation early about health plan choices and how to evaluate plans. Offer dedicated one-on-one and group time, either virtually or in person, for employees to ask questions. 6 Provide education year-round about how to not only select plans, but also best utilize the plan chosen. This information is intended for internal use within Webster and HSA Bank and, as such, is not for external or public use 2018 HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC

31 Download the white paper by visiting: hsabank.com/thoughtleadership This information is intended for internal use within Webster and HSA Bank and, as such, is not for external 2018 HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 31

32 & This information is intended for internal use within Webster and HSA Bank and, as such, is not for external or public use 2018 HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 32

33 THANK YOU Kevin Robertson SVP, Chief Revenue Officer The content herein is provided for informational purposes and is not intended, nor should it be relied upon, as advice. HSA Bank does not provide tax or legal advice. Please contact a qualified professional for any tax or legal advice HSA Bank. HSA Bank is a Division of Webster Bank, N.A., Member FDIC. 33