Aetna HealthFund products

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1 Aetna HealthFund products In Idaho, health benefits and health insurance plans are offered and/or underwritten by Aetna Health of Utah Inc. and Aetna Life Insurance Company (Aetna). For all other states, health benefits and health insurance plans are offered and/or underwritten by Aetna Health Inc., Aetna Health Insurance Company of New York, Aetna Health Insurance Company, Aetna HealthAssurance Pennsylvania Inc. and/or Aetna Life Insurance Company. In Florida by Aetna Health Inc. and/or Aetna Life Insurance Company. In Utah and Wyoming by Aetna Health of Utah Inc. and Aetna Life Insurance Company. In Maryland by Aetna Health Inc., 151 Farmington Avenue, Hartford, CT Each insurer has sole financial responsibility for its own products (04/17)

2 Results of the 12 th Annual Aetna HealthFund Study Trends, analysis and a new strategy that can lead to greater financial protection The greatest level of success In 2002, Aetna led the industry by being the first national health insurer to offer consumer-directed health plans (CDHPs). It s a leadership position that continues today through programs aimed at controlling benefit costs, empowering the consumer and supporting employers in managing the health of their population. The 2017 Aetna HealthFund Study commemorates the longest consecutive study of consumer-directed plans in the industry. You re with us at the industry forefront In this twelfth Aetna HealthFund (AHF) study, you ll find information on industry trends and leading-edge data that can make a significant difference in how you and your employees can save money. One of the main elements of the study highlights how employer strategies can enhance High Deductible Health Plan adoption and help employees manage their financial wellness. You ll discover: How AHF plans affect cost trends. Page 2. Industry statistics that show HDHPs remain a good idea for employers, which has resulted in continued, steady growth. Pages 3 through 5. How high-deductible plans can have a positive impact on family budgets. However, consumer research shows that families are not maximizing HSAs* to their full potential. Page 6. Strategies to help consumers balance savings and current medical expenses. Pages 7 through 10. *HSAs are currently not available to HMO members in California and Illinois. 1

3 < BACK TO CONTENTS We want you to get results Years of collecting data confirm that AHF plans drive cost trends down. However, more strategies are needed to ease the increasing financial pressures on consumers associated with high-deductible health plans. This year s key findings show: 1.8 % lower average annualized trend for AHF study group vs. preferred provider organization (PPO) control group 2.6 times more employees in HDHP when employer contributes to the HSA $ 8.6 million in savings over 5 years per 10,000 members in Aetna HealthFund plans 7 % more HDHP/HSA employer adoption when National Accounts plan sponsors offer voluntary plans 2

4 < BACK TO CONTENTS Analysis indicates HDHPs remain a good idea for plan employers Industry statistics show that employer demand for HDHPs and AHF solutions continues to grow steadily, with 100 million Americans projected to be enrolled in an HSA-qualified plan by Percentage of Covered Workers Enrolled in an HDHP/HRA * or an HSA-Qualified HDHP 30 % 20 % 10 % 0 % HSA-Qualified HDHP HDHP/HRA *HRAs are currently not available to HMO members in Illinois. 1 Interpro Publications projection based on a conversion factor. 3

5 Aetna HealthFund HDHP/HSA growth trends continue AHF large group (101+ group size) membership continues to rise. In fact, AHF HDHP/HSA large group membership increased over 20% through 4th quarter < BACK TO CONTENTS AHF HDHP/HSAs up +20 % 4

6 Aetna HealthFund plans are proven to help manage cost < BACK TO CONTENTS Past studies focused primarily on the trend of the AHF study group compared to that of a traditional preferred provider organization (PPO) group. This year s study also confirms the more favorable trend with AHF. Research tells us that employers who offered AHF plans had an average annual trend that was 1.8 percentage points lower than a comparison group s trend over a five-year period. $8.6 million in savings PPO vs. AHF 5 years These trend comparisons suggest that an employer who offered Aetna HealthFund plans would have saved $8.6 million per 10,000 members over a five-year period relative to an employer who offered traditional PPO plans. From all indications, these trends should extend into the foreseeable future, with Aetna HealthFund plans showing continued savings over PPO plans. 5

7 Employers like HDHP advantages, but consumers are not maximizing HSA savings < BACK TO CONTENTS The option of a high-deductible plan can have a positive impact on most consumers health care premiums. This means consumers should be better able to put aside money in an HSA to fund health care costs today and into the future. So, what strategies can employers use to increase HSA adoption, maximize HSA contributions and encourage HSA savings for retirement? To help us answer that question, we reviewed the PayFlex book of business. PayFlex is one of the nation s largest account-based third party administrators, and as part of the Aetna family, administers the AHF HSA. An analysis of the 2015/2016 PayFlex book of business shows that there s a big impact on adoption and employee contributions when employers contribute to their employees HSAs x More HDHP adoption when employers contribute to the HSA Increase in health care spending when employers contribute to the HSA throughout the year +5.3 % Increase in likelihood of employee contributions to HSA when employer contributes at start of year rather than throughout the year -3.9 % Year over year increase in employee contributions when employer contributes to the HSA Year over year decrease in employee contributions when employer does not contribute to the HSA In additional research, PayFlex asked consumers about the use of their HSAs in saving for future medical expenses. Most consumers hope that their 401k plan and other retirement savings will be sufficient by the time they decide to retire. However, they are not actively planning for future health care financial obligations. These consumers still treat their HSA as they did their FSA as a spending tool, not a savings tool. Similar to the transition consumers experienced in moving from defined benefits to defined contribution retirement plans, consumers seem to be in the midst of a transition from a health care spending orientation (e.g., FSA model) to a health care funding orientation (e.g., HSA model) /2016 PayFlex, Book of business. 6

8 < BACK TO CONTENTS Easing financial burdens to employees Finding balance Long-term savings Financial burden of health care costs The PayFlex research helps members understand the need to set and maintain long-term savings goals as they manage current medical expenses. Saving for future health care expenses A growing HSA can be used for future and retiree health-related expenses. Since projected health care premiums and expenses for a healthy 65-year-old couple retiring this year are expected to be $377,412 in today s dollars, accumulating health care savings is very important. 3 Moving forward, how can you help employees to: Continue to experience the cost savings of a HDHP? Ease the personal financial burden of a high-deductible plan? Encourage members to get the care needed while saving for the future? Our research indicates at least three ways to help members save for the future. 1. Improve HSA education HSAs are well-liked, but not well understood. While members tend to understand the HSA tax advantages, rollover advantages and how an HSA integrates with HDHPs, investment opportunities have very low awareness. PayFlex is helping to improve education by building new interactive investment tools and materials based on where the member is at in their investment life cycle. Members will be offered different experiences, whether they ve never invested and need basic investment 101 education, or if they ve invested a little but would like more information. They ll learn how best to optimize the savings they have and what tools to use so they can invest and save more. The result is a savvy investor who is looking to maximize their savings opportunities and get the most out of their investment dollars. 3 Findings from 2016 Retirement Health Care Costs Data Report, Health View Insights. Assumes that individuals in the couple have life expectancies of 87 and 89 and will have a combined modified adjusted gross income of under $170,000. 7

9 < BACK TO CONTENTS Easing financial burdens to employees (cont d) 2. Increase awareness of how member health will impact member wealth. Consumers do not have a clear idea of future health care costs. They are trying to make healthy lifestyle decisions while saving as much as possible in 401k programs. Their hope is that retirement funding will be sufficient to also pay for health care. Opportunities exist to more clearly educate consumers on their expected health care costs based on their current health status, wellness mindset and how much health care is expected to cost in retirement. 3. Employ a contribution strategy that encourages HDHP/HSA adoption and employee contributions. In general, account holders treat HSAs: More like savings accounts When employers fund at the start of the year, including incentives, HSA distributions are reduced leading to increased balances Employer contributions exceed $500 More like spending accounts When employer contributions are staggered throughout the year, HSAs show increased spending HSAs are only funded with incentives A critical illness or large unexpected medical event can result in out-of-pocket costs that exhaust an HSA and disrupt a health care savings strategy with negative financial consequences. As a result, we have found that members can benefit from bundling an HDHP/HSA with supplemental benefits (i.e., Critical Illness, Accidental and Hospital Indemnity plans). Bundling an HDHP/HSA with supplemental benefits can help members manage unforeseen medical expenses and ease the burden of medical and non-medical financial responsibilities. 8

10 Bundling supplemental benefits along with HDHPs/HSAs < BACK TO CONTENTS Too often when employers cut workplace benefit costs it s seen as a one-sided tactic requiring employees to shoulder most of the added cost and risk. From the employee viewpoint, bundling products helps balance the equation. And employers can offer more benefit options, without incurring additional costs. Packaging products together to leverage their complementary features is a strategy that increases the appeal of the products to both employers and employees. When health insurance benefits are offered from a single carrier, the streamlined approach results in: Integration and pricing advantages An example of an integration advantage is Aetna s simplified claim-submission process for members who have both its voluntary and medical products. An enhanced member experience Communicate with your employees and keep them informed and educated about their benefits options. Explain the advantages of a medical-supplemental bundle. Richer benefits package Your dedicated Marketing Consultant will help you develop & deploy a comprehensive marketing strategy that educates employees on how Aetna s Supplemental plans can enhance their benefits when paired with a high-deductible health plan. Employers offering voluntary plans HDHP/HSA employer adoption Employers that currently bundle benefits use it as a creative way to strengthen their medical benefits strategy. In an analysis of 62 National Accounts (3,000+ group size), Aetna found that there is a significant correlation between employers that adopt the HDHP/HSA and those with supplemental health insurance products (specifically one or a combination of accident, critical illness or hospital indemnity). 9

11 The bottom line < BACK TO CONTENTS As shown in the twelfth annual AHF study, AHF products continue to be a proven cost management strategy. Due to rising retiree health care costs, we have found there is a need to help members maintain long-term savings goals while managing current medical expenses. Employers are able to help members save now and in the future through education, HSA contribution strategies and by building awareness about the link between health and wealth. For employers and brokers seeking an impactful strategy for managing the cost and risk associated with offering an HDHP, bundling supplemental benefits alongside the HSA and the base medical plan represents a balanced approach that offers protection for employees financial health both today and tomorrow. HSA + HDHP + Supplemental Our consultative approach ensures that we re helping you make the most of every available communication channel you have during your active enrollment. If you re enrolling online, we ll work with you and your enrollment vendor to set up the enrollment and educational experience. With this partnership, we aim to create the best possible engagement experience for your employees as you work to meet your enrollment goals. Realizing the many advantages of this strategy for both you and your employees is key to increasing HDHP adoption. Want more information? Reach out to your Aetna Representative. 10

12 2015 Trend Group Composition < BACK TO CONTENTS Each year, Aetna analyzes the claims of AHF Plan (HRA and HDHP/HSA) enrollees and compares them against PPO plan member claims. Groups are divided into multiple subsets to allow for in-depth evaluations and trend comparisons. The trend group consisted of 157 large employer groups, totaling 2.1 million members with at least 5 percent of members enrolled in an AHF. This group contained 91 national account employers, 62 middle market (101 3,000 group size) employers and 4 public and labor employers. A trend control group, consisting of employers who offer only traditional products, without an AHF option, was also developed for comparison purposes. PayFlex Book of Business Analysis Data sourced from PayFlex Data Warehouse across 49 large National Account Plan sponsors (roughly 339k eligible employees) that have PayFlex HSAs as well as Aetna Medical. All data is from 2015 and 2016 books of business. 11

13 < BACK TO CONTENTS This material is for information only and is not an offer or invitation to contract. Not all services are covered. See plan documents for a complete description of benefits, exclusions, limitations and conditions of coverage. Plan features and availability may vary by location and are subject to change. Health benefits and health insurance plans contain exclusions and limitations. Providers are independent contractors and are not agents of Aetna. Provider participation may change without notice. Aetna does not provide care or guarantee access to health services. Aetna HealthFund HRAs are subject to employer-defined use and forfeiture rules and are unfunded liabilities of your employer. Fund balances are not vested benefits. Investment services are independently offered through a third party financial institution. Information is believed to be accurate as of the production date; however, it is subject to change. For more information about Aetna plans, refer to Policy forms issued in Idaho by Aetna Life Insurance Company include: GR-9/GR-9N, GR-29/GR-29N, GR-23. AL HGrpPol 03. Policy forms issued in Idaho by Aetna Health of Utah Inc. include: HI GrpAg 03. Policy forms issued in OK include: HMO/OK COC-5 09/07, HMO/OK GA-3 11/01, HMO OK POS RIDER (08/07), GR-23 and/or GR-29/GR-29N. Policy forms issued in Missouri include: AL HGrpPol 01R5, AL HGrpAg 01, HO HGrpPol Aetna, Inc (04/17)