Transcript No Slide Title

Introducing a health care strategy for
exasperated employers of all sizes
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Why do employers need a strategy
when it comes to their health care benefits?
• Health care costs continue to
escalate.
• Health care costs continue
to escalate.
• Health care costs
continue to escalate.
In 2005, health insurance is expected to cost at least 10 percent more - marking five years of double-digit
increases. A diminishing number of small businesses can offer health coverage to employees, according
to studies by the Henry J. Kaiser Family Foundation. The group found that 63 percent of small
businesses offered health insurance this year, down from 68 percent in 2001.”
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Health Care Squeeze, Washington Post, Nov. 1, 2004
Why do employers need a strategy
when it comes to their health care benefits?
• Most employers can do a much better job of getting the ultimate
consumers of health care … their employees … better
engaged in in the process.
– Some employers have been too slow in asking their employees to
pay a fair share of the cost.
– Some employers have been, in effect, over-insuring.
– Some employers have not helped their employees to take more
control of, and improve, their health.
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In implementing a strategy, what should an employer
look for in a health plan?
• A vast portfolio of products from which to choose, and the
willingness to offer multiple products to groups 10+.
• The ability to integrate a well-managed Personal Health
Account option, as part of total offering.
• A health plan that helps empower members to become
engaged consumers of health care.
• A health plan that has built a reputation for cost efficiency,
service excellence, and a focus on quality.
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From the health plans of:
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Operating health plans
that each offer a vast
portfolio of products
• An extensive selection of available high deductible health
plan products.
• Experience in effectively administering a wide variety of
benefit designs.
• A wide range of deductible options.
• Qualified, HSA-compliant, health plan products that provide
against major medical expenses (true insurance).
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The ability to
integrate a wellmanaged Personal
Health Account
option, as part of
total offering
• Health Savings Accounts (HSAs)
• Health Reimbursement Arrangements (HRAs)
• Health Flexible Spending Arrangements (FSAs)
• HRA/FSA
• HSA/Limited HRA
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The benefits of our integrated HSA approach
One set of coordinated activities
simplifies member enrollment and activation process.
• Electronic eligibility integration; one group bill.
• Electronic, pre-tax, payroll contribution directly to HSA account.
• Three ways to administer claims - via debit card, electronic
claims submission or paper submission.
• Seamless service model: “One call does it all.”
• Online ability for members to check their account balance.
• Wells Fargo Bank, N.A. is chosen fiduciary (custodian).
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Coventry’s health plans have long
empowered members to become better
engaged consumers of health care.
• Providing easy access to
information, both through the
About Your Health section of our
website and our member
newsletter, Living Well.
• Ahead of the curve in providing
password-protected, self serve
functionality via the internet.
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Coventry has long empowered members to
become better engaged consumers of
health care.
• Online Health Risk Assessment tool
– Allows members to easily benchmark their wellness, and better
understand their overall health status and risks.
• WebMD®
– Provides wellness and disease information to help improve health and
understand ramifications of health decisions.
• Patient Safety
– Information on how to help prevent medical errors, take basic steps to
safer health care, and links to other safety related websites.
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Coventry will continue to be a health plan that
empowers members to become better engaged
consumers of health care.
Introducing New Decision Support Tools in 2005
• Health Care Tools
– Nurse Advisor Line
– Hospital Quality Comparison tool
• Financial Tools
– Average Unit Cost Comparison tool
– Hospital Relative Cost Comparison tool
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All delivered by health plans that have built a
reputation for cost efficiency, service excellence,
and a focus on quality.
Key Service Indicators Through 3Q04 include:
• Telephone Servicing
– Average Speed of Answer - 18.4 seconds
– Abandonment Rate - 1.4% of calls
– Average First Call Resolution - 95.0%
• Claims Processing
– Average % inventory over 45 days - 0.2%
– YTD Auto adjudication - 76.4%
– YTD % of claims received EDI - 61.4%
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All delivered by health plans that have built a
reputation for cost efficiency, service excellence,
and a focus on quality.
Individual
Utilization
Management
Complex Case
Management
Disease / Condition
Management
Population
New Enrollee /
General Population
• Coventry’s health plans have
not abdicated their role to help
manage the entire population.
• Our integrated approach
touches healthy people who
need education and
reinforcement, chronically ill
members who require more
hands-on efforts through
disease management, to
acutely ill and complex
patients who need one-on-one
attention.
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It’s easy to get started.
• Employer chooses HDHP, Personal Health Account and
contribution levels.
• Coventry works with employer to establish specifications:
– Banking and contribution information
– Product attributes, order of payment, reimbursement options, fund
balance rollover
– Plan design preferences & account structure
– Works with client to establish payroll interface
• Employees choose:
– How to access and use health funds
– Personal Health Account investments
– Employee contribution levels
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Health Savings Accounts
A consumer-owned, tax-advantaged savings account, created
to pay medical expenses, that is always combined with a
qualified high deductible health plan.
The benefit of HSAs is in the consumer incentive (it’s their
money!) to better plan and use health care resources.
HSAs allow
• Tax-free contributions by employer or employee.
• Tax-free growth of interest or investment earnings.
• Tax-free disbursements of principal and interest to pay for qualified
medical expenses.
• Accumulation of unused funds and portability between employers.
• Flexible use – consumers choose whether or when to use the
account for health expenses, now or after employment.
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Advantages of an HSA for Employers
• More predictable costs in the near term.
• A legitimate chance to reduce trend.
• Additional peace of mind, in knowing that they are not overinsuring.
• Increased employee satisfaction, through more flexibility, more
options, and more ownership of the product called health care.
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Advantages of an HSA for Employees
• More control where/how they spend their money.
• The ability to choose how much they want to contribute to the
Account.
• The “triple tax advantaged” nature of the account.
• Account portability, if employee changes employment.
• Popular investment fund options from Wells Fargo Bank, N.A.
• Seamless administration allows for easy monitoring of account.
• Access to information and tools, to help make better decisions.
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Contribution Requirements
for Health Savings Accounts
• Both the employer and member can contribute funds to the HSA,
but neither is required to.
• Both parties can specify whether they want to contribute a bulk
sum to the HSA once a year, or make contributions via
installments.
• The subscriber can have installment payments deducted directly
from his or her paycheck.
• The maximum annual contribution for 2004 is whichever amount
is less: 100 percent of the annual deductible or $2,600 for
individual coverage and $5,150 for family coverage. Both
employer and employee contributions count toward this limit.
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Health Savings Accounts:
What are the requirements of an accompanying
Qualified High Deductible Health Plan?
• All services, including Rx, must also be covered after the
deductible
– Temporary Rx transition period until 1-1-06.
• Preventive is only exception, allowed to be before or after
deductible
– Plan-specific design determinations.
• Plan doesn’t pay until full Family deductible is met
– Different than today in most areas of the country.
– In-network annual deductible must be at least $1000 for Individual and
$2000 for Family for 2004, indexed annually.
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Requirements of Qualified HDHP, continued.
• Per Preventive Care Safe Harbor (*), need Plan Specific
• Coventry’s definition for HSA Preventive Care:
•
•
•
•
•
•
Preventive Childhood Immunizations
Preventive Adult Immunizations
Adult Physical Exam
Well Child Exam
Well Woman Exam
Routine Mammography
– Certain procedures will always be preventive (based on billed CPT).
– Some procedures will be preventive if billed with specific diagnosis codes
(based on billed CPT and diagnosis).
– HSA Preventive Care definition is broader than previous definition.
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Requirements of Qualified HDHP, continued.
• All copays (including RX), deductibles and coinsurance all
count toward OOP
– Different than today.
– In-network OOP Max are limited to $5000 for Individual and $10,000 for
Family for 2004, indexed annually.
– Prior authorization / financial penalties not required to go to OOP.
• Full family OOP must be met before any family member
receives 100% full plan reimbursement
– Different than today.
• No limitations provided for min or max deductible or OOP for
services Out of the Network
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Requirements of Qualified HDHP, continued.
• No requirement to deliver care through specific delivery
mechanism
– Can be HMO, PPO or POS Products
• HDHP can be either FI or SF
• HDHP can be an individual or group plan
• Plans administered Contract Year
• No 4th Qtr Deductible Carryover or Deductible Credit
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Administrator for our integrated approach is
Corporate Benefit Services of America, Inc. (CBSA)
• Incorporated in 1971 as Administrative Benefits, Inc.
• Leader in benefit administration and consumer directed
solutions to insurance carriers and employers.
• Serving 660 employer customers with 400,000+ members.
Processed over $550,000,000 worth of claims in 2003.
• Electronic eligibility integration.
• Integrated website with Coventry’s health plans.
• Coventry access to member accounts for additional customer
service integration.
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The benefits of our integrated HSA approach:
Our Chosen Vendors
Wells Fargo Bank, N.A. is the chosen fiduciary
(custodian) for our HSA offerings.
Wells Fargo offers and manages investment (fund)
options for HSA enrollees, and issues the HSA
VISA® debit card.
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Using Your Health Savings Account
Debit Card
• At the pharmacy for either prescriptions or OTC medications,
use your debit card to access your HSA funds.
- You will instantly enjoy our negotiated discounts, with no paperwork to file.
- You should present your medical card. The pharmacy will then be able to tell you
your financial responsibility.
- If you have met your deductible, you’ll be responsible for only your coinsurance or
copayment.
- If you have not met your deductible, the pharmacy will charge you our discounted
rate and apply that amount toward your deductible.
-- You can then pay your balance (responsibility) using your debit card.
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Using Your Health Savings Account
Debit Card
• At the doctor’s office or hospital, don’t immediately use your
debit card.
- Let our process determine exactly what the doctor or facility is owed, based on our
negotiated discounts.
- We will send to both you and your provider a notice of your true (discounted)
responsibility. Because our system is integrated with that of our HSA administrator,
CBSA, we’ll also send notice to them of your out-of-pocket costs.
- We will pay directly to the provider the portion of the claim for which we are
responsible, based on our negotiated discount.
- If you have an out-of-pocket responsibility, CBSA will automatically withdraw funds
from your HSA, and send you a check (equal in amount to your true responsibility).
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The benefits of our
integrated HSA
approach: Our
Chosen Vendors
Wells Fargo manages
investment options
for HSA enrollees
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New Case Implementation Check List
Determine CDHP product & plan design features
Complete the CBSA Group Discovery Document
Coordinate CBSA/Client payroll connection meeting
Complete Group Enrollment form or BenefitExpress set
up/BenefitExpress shell
Collect Member Enrollment applications
Collect CBSA supplemental enrollment forms
Review with client administration:
-
Claims submission process
Billing procedures
Customer Service contact information
Report content, frequency & distribution
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Group Set up - Implementation Discovery Document
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Group Set up - Implementation Discovery Document
• Sales/Broker completes online form:
• Employer demographics
• Banking and contribution information
• Flex Choice plan design options:
-
Product stacking
Order of payment
Reimbursement options
Fund balance rollover
• CBSA:
• Sets up plan design, preferences & account structure
• Works with client to establish funding connections
- Payroll interface
- ACH, wire
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Easy Access To Installation Forms:
Available online via our website in December, 2004
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New Decision Support Tools in 2005:
Nurse Advisor Line
• Accessible to HSA and HRA members via a phone number on
their ID cards.
• Registered Nurses available 24 hours a day, seven days a
week, 365 days a year to help members make informed
decisions on how to proceed with health care services.
– RNs will interpret clinical information, help the member develop a list of
questions to ask the physician, and help them to understand the
available quality tools and indicators
• Information provided to member based on clinical, quality and
cost decision support tools.
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New Decision Support Tools in 2005:
Hospital Quality Comparison tool
Powered by HealthShare®
First, choose the
type of care and
location
Then, choose
the hospitals to
compare
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Hospital Quality Comparison tool, continued
Finally , rank the
selection criteria
More detailed
information in
the folders
when selected
The result? A customized report
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New Decision Support Tools in 2005:
Average Unit Cost Comparison tool
• Displays the range of, or average, costs for specific procedures
by location in our region.
– Physician Office
– Free-Standing Surgery Center
– Hospital Outpatient
• Costs presented are generally all inclusive
– Per Visit to a Physician Office
– Include both Physician and Facility Fees
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New Decision Support Tools in 2005:
Hospital Relative Cost Comparison tool
• Compares the relative cost of one facility to that of another
facility.
• HealthShare provides these services via their Select Quality
Care (SQC) consumer decision support tool product line.
• The tool will be accessed through My Online Services.
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Additional Decision Support Tools:
Employee Budgeting Tool
• Allows employee to forecast their health care costs based on
specific input they provide.
• Data variables include:
– Premium responsibility
– Anticipated doctor visits, # of prescriptions, etc.
– Model will auto-populate the input fields with experiencedbased average utilization and cost data.
• If accessed through My Group Benefits, benefit plan choices are
pre-populated for members.
• Also accessible to members via Member Home page.
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Employee
Budgeting
Tool:
Step 1 Enter Family
Information
Starts with the entry
of
simple
demographic
information about
your family
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Step 2 - Enter Expected Health Care Needs
Utilization
assumptions can be
pre-populated or
customized by
member
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Output 1 - Tool calculates your expected average costs
Summary
document
shows
cost by
category of
service
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Output 2 - Tool calculates your estimated health care costs
Summary
document
shows
cost by
category of
service
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Output 3 - Tool calculates your estimated responsibility,
by benefit plan
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Output 4 - Tool calculates the impact to your personal health
account when integrated with your HDHP
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Output 5 - Tool calculates the out-of-pocket impact of each
benefit plan
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Employer Budgeting Tool
• Projects employer contributions and subsequent savings from
inception date through 3 renewals.
• Compares the estimated savings, based on user input, for
current plan and up to 3 different HRA/medical base plan set up
scenarios
• Data inputs include: premium, funding levels, enrollment
projections, dual options participation rates, trend, etc.
• Accessible via WellPath’s Employer Home page.
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Employer Budgeting Tool
HRA Projection Model
Summary of Annual Savings
1st Year
$321,932
2nd Year
$373,441
3rd Year
$433,192
4th Year
$502,502
Scenario 1: (Flex Choice Plan: 35222 - 100/70 w /$1,000 ded)
1st Year
Employer FlexChoice Premium
$272,776
HRA Consumption and Other Costs
$9,149
Employer Other Plan Options
$0
Total Em ployer Cost
$281,924
Employer Savings/(Cost)
$40,008
2nd Year
$316,420
$8,545
$0
$324,965
$48,477
3rd Year
$367,047
$6,669
$0
$373,716
$59,476
4th Year
$425,775
$7,126
$0
$432,900
$69,602
Scenario 2: (Flex Choice Plan: 35224 - 100/70 w /$2,000 ded)
1st Year
Employer FlexChoice Premium
$257,063
HRA Consumption and Other Costs
$7,465
Employer Other Plan Options
$0
Total Em ployer Cost
$264,528
Employer Savings/(Cost)
$57,404
2nd Year
$298,193
$6,921
$0
$305,114
$68,327
3rd Year
$345,904
$7,134
$0
$353,038
$80,153
4th Year
$401,249
$7,438
$0
$408,687
$93,816
Comparison Plan(s) Employer Cost
Coventry makes no guarantee of the savings calculated in this model. For illustrative purposes only.
The results show n are dependent on the assumptions input into the model and are not based on
actual experience. Actual results may vary from those show n.
Tax implications are not included in this projection.
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