Part 2 HealthFlex Response

Transcription

1 Health Care Reform: Part 2 HealthFlex Response HealthFlex Summit October 3-4, 2013

2 Agenda Plan Sponsor Considerations/Supports HealthFlex Plan Options Strategic Response Private Exchanges Mandatory Eligibility Policy Change Next Steps Summary 2

3 2015 HealthFlex Plan Sponsor Options and Considerations Funding Maintain current contribution structure (premium billing structure) Offer rearranged contribution structure Charging 9.5% or more of MAGI* for participant-only premium (moves some participants to exchanges through affordability test) * MAGI: modified adjusted gross income 3

4 2015 HealthFlex Plan Sponsor Options and Considerations Funding (continued) Salary (taxable) offset for: Everyone at same level Everyone at differing levels based on PTC* eligibility (Additional SECA, pension and other costs must be considered) Offer/fund HRA** for participants in: HealthFlex group self-insured plan(s), and Potentially for those in private exchange More on this later * PTC: Premium tax credit ** HRA: Health reimbursement account 4

5 2015 HealthFlex Plan Sponsor Options and Considerations Plan Coverage Remain all in HealthFlex no change Move all in to public exchange Remain in HealthFlex with public exchange option (Supported by mandatory eligibility rules changes) Potential move to private exchange 5

6 Key Planning Considerations Income Verification Strongly recommend obtaining customized household income information ACA Household Insurance Income Survey available online Premium Cost Sharing Due to affordable coverage requirement, potential consideration for change in cost-sharing strategy 6

7 Key Planning Considerations Appointment/equity issues may persist between PTC-eligible and non-ptc-eligible clergy Sponsor exchange equivalent plan: non-subsidy-eligible/ some subsidy-eligible participants Provide access to HRA funds: non-subsidy-eligible Subsidy-eligible participants cannot use HRAs in exchanges Pass on blended premium cost to SPUs Potential funding answers Defined contribution (HRA) nontaxable mechanism, or Varying taxable compensation or other benefits 7

8 Plan Sponsor Decision Supports and Next Steps Executive Summary and Primer HCR Impact Overview PowerPoint/Financial Model Overview Rerun Population Analysis Models Consultations: HCR Impact Overview and Population Analysis Modeling Ongoing FAQ and planning considerations 8

9 Health Care Reform Plan Sponsor Model Overview Three primary sections of Plan Sponsor Impact Model: Develop distribution of participants by each federal poverty level (FPL) and dependent category estimate potential eligibility for exchange subsidies Determine number of participants by FPL who may be subsidy-eligible due to having unaffordable coverage Illustrate potential impact on plan sponsor s health plan costs under various assumptions 9

10 Plan Sponsor Modeling Update Modeling Changes Additional costs (additional SECA, pension and other costs added) Salary offset as an option in lieu of HRA usage Variable Marketplace premium to reflect regional differences 10

11 Plan Sponsor Modeling PTC-Eligible Participants 11

12 Plan Sponsor Modeling Premium Contributions Equaling Unaffordable Coverage 12

13 Plan Sponsor Modeling HealthFlex vs. Public Exchange Plan 2014 Comparable Health Flex Plan vs. Termination of HealthFlex Plans (70% Base Plan) Single Coverage 70% Benefit Plan With Public Exchange and Participant Cost Per Month Additional Plan Sponsor Cost Per Month With HealthFlex Monthly Cost Termination of HealthFlex Plans HealthFlex Silver Plan Change Salary Increase Other Benefits Total HealthFlex Gross Plan Cost $455 Cost: Non-Subsidy Eligible $68 $412 $344 $344 $71 $415 Participant Cost $68 Cost: Subsidy Eligible Plan Sponsor Net Cost $ % FPL (Est at $15,856) $68 $40 ($29) $0 $0 $0 250% FPL (Est at $28,725) $68 $193 $124 $124 $26 $ % FPL (Est at $45,960) $68 $364 $296 $296 $61 $357 Family Coverage (4 Members) With Public Exchange and Participant Cost Per Month Additional Plan Sponsor Cost Per Month 2014 Monthly Cost Termination of HealthFlex Plans HealthFlex Silver Plan Change Salary Increase Other Benefits Total HealthFlex Gross Plan Cost $1,148 Cost: Non-Subsidy Eligible $344 $1,236 $892 $892 $185 $1,077 Participant Cost $344 Cost: Subsidy Eligible Plan Sponsor Net Cost $ % FPL (Est at $32,499) $344 $81 ($263) $0 $0 $0 250% FPL (Est at $58,875) $344 $395 $51 $51 $11 $61 400% FPL (Est at $94,200) $344 $746 $401 $401 $84 $485 70% HealthFlex Plan HealthFlex Plan Termination $ Change % Change Annual Net Cost for Conference $938,866 $563,201 ($375,665) -40% Penalties $0 $0 Total Cost with Penalties $938,866 $563,201 ($375,665) -40% Note: Captures the additional cost impact that the salary increase has on FPL level, with salary increase based solely on the 2014 projected household income without salary adjustments. Penalties (if applicable) are calculated as $2,000 per particpant shown on table A-1 (i.e. it does not exclude the first 30 participants) as we do not know the exact count of FTEs who would be counted for this penalty. Other Benefits cost reflects assumption that $1 of additional salary generates 20.8% additional cost (SECA rate: 15.3%, Pension funding: 4.0%, All other fringe: 1.5%). Does not include gross up of the additional salary for applicable state taxes. HealthFlex 70% plan uses actuarial plan relativities to change current rates to a 70% rate, assumes no wellness costs and assumes 3% savings for narrower networks used in exchange Silver plans. 13

14 Impact of 2014 Provisions 14

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16 Agenda HealthFlex Plan Options Strategic Response Private Exchanges Mandatory Eligibility Policy Change Next Steps Summary 16

17 HealthFlex Plan Strategic Response Align current health plan to potentially complement Marketplaces (exchanges) Develop platform to manage potentially two separate populations Continue migration toward participant consumerism and responsibility Avoid future excise (Cadillac Plan) tax impact 17

18 HealthFlex Potential Options Summary Maintain self-insured plans Maintain self-insured plan through private exchange option * Public exchange premium tax credit (PTC) subsidy eligibility applies to Options 1 and 2. May involve some loss of scale to plan 18

19 HealthFlex Potential Options Going Forward 2014 Option 3 Facilitate employer HRA* direct funding for Options 1 and 2 Option 4 Center for Health continues to explore wraparound wellness products for participants in private or public exchanges * HRA: Health reimbursement account (if permissible under regulations) 19

20 Mandatory Eligibility Policy Change Mandatory Eligibility No penalty for any mandatory coverage categories if: Covered in Marketplace and PTC-eligible Eligible for coverage through Champus or TRICARE Have coverage through former employer or spouse Impact: Actuarially projected worst case scenario: 14.1% Expected scenario: Less 20

21 Potential Plan Offerings Actuarial Equivalency B750 B1000 CDHP (C2000) CDHP (70% Actuarial Equivalent) CDHP (C3000) HDHP HRA funding optional HRA funding optional HRA: $1,000/$2,000 HRA: $1,000/$2,000 HRA: $1,000/$2,000 $2,500/$5,000 deductible Eliminate in 2016 Add in 2015 Actuarial Equivalency Add in 2016 OOP max: $6,250/$12,500 HSA: $500/$1,000 Add in 2016 Gold Gold Gold Silver Gold Silver 21

22 Exchange Plan and HealthFlex Plan Comparison Benefit Silver* HealthFlex Equivalent Actuarial value 70% 70% Covered services Essential and preventive benefits Essential and preventive benefits, and more (vision, wellness, etc.) Essential benefits No dollar limits No dollar limits 2014 deductible maximums 2013 cost sharing maximums will be indexed to 2014 levels HSA rules $2,000 (I) $4,000 (F) (in-network) Up to $6,250 (I) $12,500(F) (in-network) $3,000 (I) $6,000 (F) (in-network) Up to $6,250 (I) $12,500 (F) (in-network) * Silver plan used to determine any government subsidies through the exchange 22

23 Plan Comparison Actuarial Equivalent HealthFlex Plans vs. Public Marketplace Plans Plan Actuarial Value Networks Wellness Initiatives Group Efficiencies HealthFlex Same 70% Broad No Change Yes Maintain Yes Exchange Same 70% Narrow Unknown No No 23

24 Plan Comparison Actuarial Equivalent HealthFlex Plans vs. Oregon and New York Public Marketplace Plans Plan Actuarial Value Networks Wellness Initiatives Group Efficiencies Rates HealthFlex Same 70% Broad No Change Yes Maintain Yes $568 Exchange OR-ID Same 70% Narrow Unknown No No $250 Exchange New York Same 70% Narrow Unknown No No $349 24

25 2018 Excise Tax Projection of 2014 Rates to 2018 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Part Only Part + 1 Part+1Ch Part+2Ch Part+Fam 2014 PPO Avg 2014 CDHP Avg 2018 PPO Avg 2018 CDHP Avg 25

26 Private Exchanges Overview Research for Potential Future Opportunity Conceptually similar to Extend Health offering Components of a private exchange Self-insured and group rated HRA funded (or other DC-funded* option) Plan sponsor funds participant account HRA/DC funding Possibly other non-tax favored vehicle (e.g., employer funded FSA up to $2,500) * DC: Defined contribution 26

27 Private Exchanges Overview Research for Potential Future Opportunity HealthFlex as all in proposition Funding options Mirrors Marketplace Assists plan sponsor in fixing sustainable costs through defined contribution model Participant (as consumer) uses funds to purchase benefits Private exchange generates tailored list of recommendations Participant purchases individual products/services that align with his/her needs 27

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