2016 Benefit Administrators Meeting

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1 2016 Benefit Administrators Meeting

2 Affordable Care Act (ACA or PPACA) and Grandfathered Plan Status The Archdiocese Plan is a self-funded Grandfathered plan and will remain Grandfathered for Grandfathered plans don t have to comply with ALL mandates, but do have to comply with many mandates. For 2017 all self-funded health plans, whether grandfathered or not must eliminate annual or lifetime limits on Essential Health Benefits (EHB) clarification provided by regulation regarding EHB definitions. Preventive Care is considered an EHB for all plans. Self-funded plans must align with a state s benchmark plan in order to define other EHB s. The Archdiocese plan will include enhanced preventive care and will remove annual $ limits for preventive care, skilled nursing and TMJ coverage. Coverage enhancements are allowed without impacting Grandfathered status. Grandfathered plans may make incremental increases in deductibles, copayments and out of pocket amounts to keep up with health care inflation, while still maintaining grandfathered status. 2 Archdiocese of Kansas City in Kansas

3 Medical or Rx Benefit Current Design 2017 Plan Design Deductible Individual Family $475 $950 $500 $1,000 Out-of-Pocket Maximum Individual Family Network $1,800 $3,600 Non-Network $2,300 $4,100 Network $2,000 $4,000 Non-Network $2,500 $4,500 Specialty RX Copayments Generic Preferred Brand Non-preferred Brand $7.00 $20.00 $33.00 $10.00 $25.00 $40.00 Step Therapy Grandfathered Non-grandfathered Medical Preventive RX Preventive Benchmark Plan for Removal of Annual and Lifetime $ Limits 100% to $500 annual maximum for adults and children Applicable copay or not covered $1,500 Lifetime Limit -TMJ $50,000 Annual Limit Skilled Nursing Facility 100% - no annual limit for children or adults in network Generics at 100% per MedTrak guidelines No TMJ Limit Convert to 90-day limit on Skilled Nursing Facility 3 Archdiocese of Kansas City in Kansas

4 Direct costs from health care reform have added over $2.8 million including: Estimated claims cost for: Dependents to age 26 Removal of Lifetime Limits and Annual Maximums Removal of Dollar Limits on Essential Health Benefits PCORI Fees Began in 2013 at $4,970 Now at $5,625 Since inception $19,373 Reinsurance Fees: $275,416 to date will finish since inception at close to $400,000 Additional IRS 1095 and 1094 annual reporting began in 2016 Significant increase in administrative burden and expense 4 Archdiocese of Kansas City in Kansas

5 Your Employer Total Monthly Cost Monthly Cost Monthly Cost Medical Plan (+5%) Employee Only $ $ $ Family $ $ $1, Archdiocese of Kansas City in Kansas

6 $1, % $1,400 $1,200 $1,201 $1, % $1,291 $1,291 $1,291 $1,317 $1,383 $1, % $1, % 5.0% $1, % $ % $ % 2.0% 2.0% $400 $ % $0 0.0% 0.0% 0.0% % Avg. Premiums Rate of Increase

7 From 2009 to 2017, the annual rate of increase in the Archdiocese health plan is 1.8%. Stop Loss premiums have more than doubled since s increase is the first in 2 years. The individual deductible has only increased $100 since The individual in-network out-of-pocket maximum has only increased $500 since The office visit copay has only increased $5 since Plan costs have increased for inpatient and outpatient hospital as well as professional services. High cost claimants (those with claims in excess of $50,000 in a year) have increased $1.1 million (from $3.6 to $4.7 million in one year). High cost claims are continuing. Prescription costs are increasing, particularly for Specialty drugs, which account for nearly 30% of the total prescription costs paid by the plan. We are projecting a 5% increase in health plan cost, after plan changes, for Archdiocese of Kansas City in Kansas

8 Voluntary Plan Updates The vision plan network frame allowance will increase from $130 to $160 Featured brands (determined by VSP) include extra $20 allowance - $180 Flexible spending account eligibility must match medical plan so employees will need to work 30 hrs. per week to be eligible for these accounts 8 Archdiocese of Kansas City in Kansas