APTA Labor Management 2012 Webinar Series: Managing Health & Welfare Programs for Represented Employees Tuesday, December 11, 2012 2:00 3:30 p.m. Eastern Time Participant Call-In Information: U.S. Toll Free: 1-800-875-3456 Canadian Toll Free: 1-800-648-0973 International Toll: 1-302-607-2001 Verbal Pass Code (to be given to the operator): Vn27635 You must dial in to hear the audio transmission. This session is being recorded and will be made available to APTA members on the APTA web site.
Session Moderator Mr. Patrick Gough Chair, Labor Relations Subcommittee Executive Director of Human Resources & Organizational Development Orange County Transportation Authority Orange, CA 2
APTA Labor Management Webinar Series 3
Managing Health & Welfare Programs for Represented Employees Rising health care costs High percentage of represented transit employees Need to explore and understand new models and approaches for health care coverage Consumer Driven Health Plans Opportunities for dialogues, lessons learned 4
Featured Industry Presenter Mr. Michael Jones, Jr. Senior Manager, Labor Relations Officer Dallas Area Rapid Transit Leadership APTA Class of 2012 5
Industry Discussant Mr. Steven Hamelin Vice Chair, Labor Relations Subcommittee Director of Operations and Planning Springfield Mass Transit District Leadership APTA Class of 2010 6
What to Expect Featured Presentation 25-30 minutes Audience Q&A 30-35 minutes Submit questions via the web Online questions read and addressed aloud during the webinar Wrap up Please note: The operator automatically will mute all the phone lines during the featured presentation. 7
Submitting online questions To submit a question or comment to the moderator during the session or during the Q&A, please type it into the Chat (Q&A) box on your screen and then click on the send arrow located at the bottom of the box. 8
Featured Industry Presenter Mr. Michael D. Jones Senior Manager Labor Relations Officer Dallas Area Rapid Transit Leadership APTA Class of 2012 9
Managing Healthcare Costs For Represented Employees Michael D. Jones Dallas Area Rapid Transit December 11, 2012
Overview What is a Consumer Driven Health Plan (CDHP) Healthcare Expense Trending CDH Plans vs. Traditional Plans DART CDHP Plan Design Implementation Strategies Workforce Challenges / Management Response Conclusion / Q&A
What Is a CDH Plan? A Consumer-Directed Health (CDH) Plan is a high deductible plan designed to help control health care costs. Common Characteristics include: Lower monthly premiums Higher annual deductibles Low or no cost preventive care
Deloitte Employer Survey (2010) 76% of employers indicated health care costs as one their top five strategic challenges 79% of employers plan to re-design active employee medical plans over the next 12 months Focus on shifting responsibility to employees
What To Expect From a CDH plan? (Aetna Study) 15% lower primary care usage for non-routine visits 10% lower overall medical costs than traditional plans Generic drug usage higher than traditional plans Less emergency room visits traditional plans
Healthcare Expense Trending 10% Medical Cost Trend Projections vs. Actuals: 2010 to 2013 What we Predicted Current Estimate (before benefits design changes) Current Estimate (after benefits design changes) 8% 9.0% 9.0% 8.5% 6% 7.5% 7.0% 6.0% 6.0% 7.5% 5.5% 7.5% 5.5% 4% 2% 0% 2010 2011 2012 2013
Traditional vs. CDHP Traditional Plan Managed Care Model Example Annual Deductible Office Visit Co- Pay $300 $25 Specialist Co-pay $35 ER Co-pay $200 CDH Plan Consumer Driven Example Co-insurance Deductible Gap Employee Cost HRA / HSA Hospital Co-pay $200 Inpatient Co-pay $200 Preventive / Wellness 100% Rx Co-pay $15/$30
DART Plan Comparison Plan Feature EPO Consumer High Consumer Medium Consumer Low Annual Deductible $500 $1500 $1750 $2250 Health Reimbursement Account Annual Out-of- Pocket Physician Services Primary Care Specialist N/A $750 $750 $750 $2000 $2000 $3000 $4000 $35 $50 90% After Deductible 80% After Deductable 70% After Deductible Hospital Services $200 After Deductible 90% After Deductible 80% After Deductable 70% After Deductible Emergency Room Care Bi-Weekly Premiums $200 After Deductible 90% After Deductible 80% After Deductable 70% After Deductible $58.61 $46.12 $31.17 $0
Implementation Strategy DART CDHP IMPLEMENTATION PLAN 2007 Contributed $125 to an employee Health Care FSA 2008 Launched educational campaign focused on plan changes 2009 High Deductible Plan launched (hybrid of CDHP) 2010 Health Care FSA debit card premiered 2011 CDHP communication campaign 2012 CDHP Offered / High deductable plan eliminated
Implementation Challenges Employee lack of understanding of CDH concept Lack of support from ATU leadership Perception of security with traditional EPO plan Getting a handle of the real costs of healthcare services (and planning for them)
Labor / Management Committee Establishing a working committee to: Reconcile perceptions with actual gaps in coverage within our CDH plans, and address for 2014. Re-examine excluded coverage (lap-band / gastric by-pass) Cost out alternative CDHP plan design should ATU present one
Featured Industry Presenter Mr. Michael D. Jones Senior Manager, Labor Relations Officer Dallas Area Rapid Transit Leadership APTA Class of 2012 21
Audience Questions for Michael, Steve & Paddy To submit a question or comment to the presenter, please type it into the Chat (Q&A) box on your screen and then click on the send arrow located at the bottom of the box. 22
Audience Q&A with our Experts Mr. Patrick Gough Chair, Labor Relations Subcommittee Executive Director of Human Resources & Organizational Development Orange County Transportation Authority Orange, CA Mr. Michael D. Jones Senior Manager Labor Relations Officer Dallas Area Rapid Transit Leadership APTA Class of 2012 Mr. Steven Hamelin Vice Chair, Labor Relations Subcommittee Director of Operations and Planning Springfield Mass Transit District Leadership APTA Class of 2010 23
APTA Labor Management Webinar Series: Managing Health & Welfare Programs for Represented Employees Tuesday, December 11, 2012 2:00 3:30 p.m. Eastern Time Next scheduled webinar session: Family Medical Leave Act & Employee Absenteeism February, 2013