Transcript Healthcare Reform and the changing world for Employers in 2014

Tax-Planning Sensitive Benefit
Portfolio
©2013 Key Benefit Administrators,Inc.
Key Benefit Administrators (KBA) was founded in 1979 as a full-service group benefits administration firm specializing in self-funded
medical plans. Since that time KBA has grown to become one of the country’s largest independently owned third party administrators,
supporting a wide variety of group benefit plans. KBA is a member of the Key Family of Companies which has two major locations in
Indianapolis, Indiana and Ft. Mill, South Carolina. The Key Family is a commonly held group of benefits-related organizations with over
400 employees, over 3,000 corporate customers, and over 1.5 million members under management. We are committed to upholding
four key principles:
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Fundamentals, Extraordinarily Well — While our other principles add great value to doing business with us, our first priority
is to deliver the fundamentals at world-class service levels.
 Reports — Healthcare Risk Management Reports (HRM) for comprehensive employer-level data & American Health
Data Institute (AHDI) reports for meaningful provider and peer analysis. EZ View - Our very own data drill down tool to
allow for ad-hoc data analysis and FAST.
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Innovative Healthcare Risk Management Techniques — The Key Family works with every client to favorably impact the
total cost of the benefit delivery, maximizing the plan’s efficiency and reducing the cost to do business with us.
 Online Health Risk Assessment
 Personalized Multi-Media Healthcare Curriculum
 Monitor and Manage 27 Chronic Diseases and Capture Co-Morbidities
 Utilization of Advanced Predictive Modeling
 Risk Stratification
 Identification of high quality, cost effective providers
 Steerage to high quality, cost effective providers
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High-Tech, High-Touch Service — Technology is not an end, but an important tool the Key Family utilizes to enable effective,
compassionate service to our covered participants.
 Healthcare Navigator Nurses — Experienced healthcare coaches for the chronically ill
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Shared Strategic Leadership Role with Each Client — Through active relationship management with human resources,
finance, and senior management, the Key Family is dedicated to the success of each client’s benefits program.
 Ongoing Benefit Program Analysis and Review
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Legal/Compliance
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Full Time General Counsel Wallace Gray, JD, MBA
◦ 8-Hour Response Time
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Nationally Recognized Employee Benefits Expert
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Plan Administration
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Plan Documents
ERISA, COBRA, FMLA, ADA, ADEA, Medicare, Medicaid, Etc.
Flexible Spending Accounts
Health Reimbursement Accounts
Wellness Programs
Compliant Terms & Conditions
Interpretive Guidance
Appeal Processing
Coordination With Other Benefit Programs
Compliant Notices
◦ HIPAA Privacy
◦ COBRA
◦ WCHRA
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Legal Updates
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Core competency in complex healthcare administration –33 years of self-funded medical
experience
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On Staff Legal counsel specializing in ERISA law and Employer Law to assist employers with
Compliance and Understanding of the ever changing Healthcare Reform laws
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Focus on flexible and creative solutions including Strategic Tax Planning Strategies for employers
to deal with the new Healthcare Reform laws in 2014.
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Integrated Healthcare Risk Management Solutions with the focus on turning data into intelligence
and making it “Actionable”
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National administrator for multiple supplemental insurance product carriers – multi-dimension
experience in plan designs, processes and procedures
TPA/KHP/
Key Solution
AHDI/Risk
Management
Dental &Vision
Cobra
Administration
KBA
Gap
Administration
HRA/Flex
Limited Medical
Compliance
Services
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Minimum Essential Coverage (MEC)
 MEC must cover 100% of the CMS listed Preventive Services
 An employer that employs 100 or more full time employees in 2014 can
prevent being taxed the $2,000 per full time employee (less 80) in plan year
2015 by offering Minimum Essential Coverage. For 2016 and after, the
employer that employs 50 or more full time employees can prevent being
taxed the $2,000 per full time employee (less 30) by offering Minimum
Essential Coverage.
 All employees can prevent being taxed the greater of 1% of adjusted
household income or the $95 plus penalty by being covered by the Minimal
Essential Coverage, the 60% Minimum Value Plan, or other qualified buy-up
plan if offered.
 Employers can charge employees any reasonable amount for this benefit
option.
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Minimum Value Plan (MVP)
 A 60% Minimum Value Plan which meets the government’s 60%
average of “allowed costs” in order to avoid the $3,000 penalty per
employee who is eligible for subsidies on the Exchange, who waives off
the employer plan, and who purchases coverage on the Exchange.
 The employer can’t charge an employee who would otherwise be
eligible for a subsidy on the Exchange more than 9.5% of that
employee’s W2, Box 1 income for single coverage under the Minimum
Value Plan. (Safe Harbor)
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In general all industries will benefit from this program.
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In particular, the ones listed below could benefit the most:
 Restaurants
 Staffing Companies
 Nursing Homes
 Home Health Care
 Hotels and Resorts/Casinos
 Security Companies
 Convenient Stores
 Oil and Gas
Plan A:
Minimum Essential Coverage Plan
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Minimum Essential Coverage would be self funded with an Aggregate only policy with
a monthly Aggregate Accommodation provision.
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Minimum Essential Coverage will cover 100% of the CMS listed Preventive Services.
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An employer that employs 100 or more full time employees in 2014 can prevent
being taxed the $2,000 per full time employee (less 80) in plan year 2015 by offering
Minimum Essential Coverage. For 2016 and after, the employer that employs 50 or
more full time employees can prevent being taxed the $2,000 per full time employee
(less 30) by offering Minimum Essential Coverage.
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All employees can prevent being taxed the $95 penalty by being covered by the
Minimal Essential Coverage, the 60% Minimum Value Plan, or other qualified buy-up
plan if offered.
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Abdominal Aortic Aneurysm one-time screening for men of specified ages who have ever smoked
Alcohol Misuse screening and counseling
Aspirin use for men and women of certain ages
Blood Pressure screening for all adults
Cholesterol screening for adults of certain ages or at higher risk
Colorectal Cancer screening for adults over 50
Depression screening for adults
Type 2 Diabetes screening for adults with high blood pressure
Diet counseling for adults at higher risk for chronic disease
HIV screening for all adults at higher risk
Immunization vaccines for adults--doses, recommended ages, and recommended populations vary:
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Hepatitis A
Hepatitis B
Herpes Zoster
Human Papillomavirus
Influenza (Flu Shot)
Measles, Mumps, Rubella
Meningococcal
Pneumococcal
Tetanus, Diphtheria, Pertussis
Varicella
Obesity screening and counseling for all adults
Sexually Transmitted Infection (STI) prevention counseling for adults at higher risk
Tobacco Use screening for all adults and cessation interventions for tobacco users
Syphilis screening for all adults at higher risk
The eight new prevention-related health services marked with an asterisk ( * ) must be covered with no cost-sharing in plan
years starting on or after August 1, 2012.
1.
Anemia screening on a routine basis for pregnant women
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Bacteriuria urinary tract or other infection screening for pregnant women
3.
BRCA counseling about genetic testing for women at higher risk
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Breast Cancer Mammography screenings every 1 to 2 years for women over 40
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Breast Cancer Chemoprevention counseling for women at higher risk
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Breastfeeding comprehensive support and counseling from trained providers, as well as access to breastfeeding supplies,
for pregnant and nursing women*
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Cervical Cancer screening for sexually active women
8.
Chlamydia Infection screening for younger women and other women at higher risk
9.
Contraception: Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient
education and counseling, not including abortifacient drugs*
10. Domestic and interpersonal violence screening and counseling for all women*
11. Folic Acid supplements for women who may become pregnant
12. Gestational diabetes screening for women 24 to 28 weeks pregnant and those at high risk of developing gestational
diabetes*
13. Gonorrhea screening for all women at higher risk
14. Hepatitis B screening for pregnant women at their first prenatal visit
15.
Human Immunodeficiency Virus (HIV) screening and counseling for sexually active women*
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Human Papillomavirus (HPV) DNA Test: high risk HPV DNA testing every three years for women with normal cytology
results who are 30 or older*
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Osteoporosis screening for women over age 60 depending on risk factors
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Rh Incompatibility screening for all pregnant women and follow-up testing for women at higher risk
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Tobacco Use screening and interventions for all women, and expanded counseling for pregnant tobacco users
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Sexually Transmitted Infections (STI) counseling for sexually active women*
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Syphilis screening for all pregnant women or other women at increased risk
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Well-woman visits to obtain recommended preventive services*
1. Alcohol and Drug Use assessments for adolescents
2. Autism screening for children at 18 and 24 months
3. Behavioral assessments for children of all ages Ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years, 15 to 17
years.
4. Blood Pressure screening for children Ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years, 15 to 17 years.
5. Cervical Dysplasia screening for sexually active females
6. Congenital Hypothyroidism screening for newborns
7. Depression screening for adolescents
8. Developmental screening for children under age 3, and surveillance throughout childhood
9. Dyslipidemia screening for children at higher risk of lipid disorders
Ages: 1 to 4 years, 5 to 10 years, 11 to 14 years, 15 to 17 years.
10. Fluoride Chemoprevention supplements for children without fluoride in their water source
11. Gonorrhea preventive medication for the eyes of all newborns
12. Hearing screening for all newborns
13. Height, Weight and Body Mass Index measurements for children
Ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years, 15 to 17 years.
14. Hematocrit or Hemoglobin screening for children
15. Hemoglobinopathies or sickle cell screening for newborns
16. HIV screening for adolescents at higher risk
17. Immunization vaccines for children from birth to age 18 —doses, recommended ages, and recommended populations vary:
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Diphtheria, Tetanus, Pertussis
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Haemophilus influenzae type b
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Hepatitis A
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Hepatitis B
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Human Papillomavirus
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Inactivated Poliovirus
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Influenza (Flu Shot)
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Measles, Mumps, Rubella
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Meningococcal
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Pneumococcal
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Rotavirus
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Varicella
18. Iron supplements for children ages 6 to 12 months at risk for anemia
19. Lead screening for children at risk of exposure
20. Medical History for all children throughout development
Ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years, 15 to 17 years.
21. Obesity screening and counseling
22. Oral Health risk assessment for young children
Ages: 0 to 11 months, 1 to 4 years, 5 to 10 years.
23. Phenylketonuria (PKU) screening for this genetic disorder in newborns
24. Sexually Transmitted Infection (STI) prevention counseling and screening for adolescents at higher risk
25. Tuberculin testing for children at higher risk of tuberculosis
Ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years, 15 to 17 years.
26. Vision screening for all children
Plan B:
Minimum Essential Coverage
Plan Plus Limited Medical Plan
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Plan A Minimum Essential Coverage Plan
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Plus a fully insured Limited Medical Benefit plan for additional coverage.
Plan C:
Minimum Essential Coverage Plan
Plus Improved Limited Medical Plan
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Plan A Self Funded Minimum Essential Coverage Plan
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Plus an improved fully insured limited Medical Benefit plan
Plan D:
Minimum Essential Coverage
Plus Minimum Value Plan
Plus Optional Limited Medical Plan
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Plan A Self Funded Minimum Essential Coverage Plan
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Plus 60% Minimum Value Plan, with Specific and Aggregate Coverage, that meets
the government’s 60% average of “allowed costs” in order to avoid the $3,000
penalty per employee who is eligible for subsidies on the Exchange, who waives off
the employer plan, and who purchases coverage on the Exchange.
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The employer can’t charge an employee who would otherwise be eligible for a
subsidy on the Exchange more than 9.5% of that employee’s W2, Box 1 income for
single coverage under the Minimum Value Plan. (Safe Harbor)
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12/18 contract, Aggregate Accommodation to give monthly and annual caps, No New
Laser contracts.
Plan E:
Minimum Essential Coverage
Plus Traditional High Deductible Major Medical Plan
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Plan A Self Funded Minimum Essential Coverage Plan
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Plus Traditional Self Funded Major Medical with specific and aggregate stop
loss.
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12/18 contract, Aggregate Accommodation to give monthly and annual caps,
No New Laser contracts.
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Employers can charge employees any amount for this benefit option.
DO I PROCEED OR…
DO I WAIT….
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Employers will not be in compliance with the federal guidelines in offering a
Minimum Value Plan in 2014/15.
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Employers will still be in the dark with unknown risk.
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Many of the employees that will be considered eligible in 2014/2015 could
possibly apply for the exchange where they will be given a subsidy because
of NO Minimum Value Plan being offered.
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Many of these employees who have never had insurance before will get a
taste of Major Medical Insurance for the first time on the exchanges.
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A bigger potential for adverse selection in the MVP due to the young and
healthy population enrolling in exchanges in 2014.
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In 2015, when MEC and MVP’s are offered, employees and their families will
NO LONGER be eligible for the subsidy they are receiving in 2014. The
employer could possibly be looking at employees that are very upset because
they will no longer be eligible for a subsidy for themselves or their family which
could possibly hurt retention.
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The employer could be looking at employees that will be buying their MVP plan
at no more than 9.5% of their W2 Box 1 income, which could increase budgets
dramatically in 2015 verses what they had been advised and budgeted in 2014 .
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Many of the employees without insurance that will be eligible would not have
considered the MVP if a possible MEC option or Limited Medical Plan was
offered to them in 2014.
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Example: Potential Cost to Employer in 2015 for MVP plan
 Assume average cost of MVP plan in 2015 is approximately $650/month for single
coverage
 Assume use of Safe Harbor model for employee contribution at 9.5% of W2 box 1
income-employee cost share would be approximately $110/month
------------------------------------------------------------------------------------------------------------ Employers cost share would be approximately $540/month or $6,480/year.
 Employers costs of adding additional employees on a MVP plan:
 20 additional employees ≈ $130,000/yr
 50 additional employees ≈ $324,000/yr
 100 additional employees ≈ $648,000/yr
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As an employer, how do I determine my benefits budget with all these unknowns
facing us today?
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Should I proceed with implementing a MEC Plan in 2014?
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Should I consider offering a MEC only plan and a MEC with a limited medical benefit
and a MEC with an enhanced limited medical benefit plan in 2014?
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Are there any concerns I should be aware of if I delay the implementation of an MVP
until 2015?
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Should I consider offering both a MEC and limited medical benefits options along with
an affordable MVP in 2014?
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Should I be concerned that during 2014 the young and healthy population will decide
to enroll in the Exchanges creating adverse selection for my MVP if I delay the MVP
implementation until 2015?
©2013 Key Benefit Administrators,Inc.
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Implement a MEC plan and Limited Medical plan. This offering will do the
following for the employee and employer:
 Employee:
 It will allow them to avoid their individual tax penalty which starts in 2014.
 Some employees will find that coverage from the Exchanges in 2014 is too
expensive for them with or without subsidies.
 In 2015 when employers make MVP’s available, employees will experience
“sticker shock” when they see the premiums and out of pocket expenses
attendant to the MVP coverage and elect to stay with the MEC and Limited
Medical plan selected in 2014.
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Employer:
 Creates an employer strategy which enables employees who do not have
coverage today to purchase a low cost plan with meaningful benefits. Some
employees will realize that they cannot afford the Exchange coverage
premiums and out of pocket exposure.
 Participation in the low cost plan in 2014 could have the effect of these
employees not joining the MVP plan in 2015 which is the largest cost to an
employer with ACA.
 Affords an employer a year to build a MEC SURPLUS which will help offset
costs associated with the MVP offered in 2015.
 Allows an employer to begin gathering data on this previously uninsured
population in order to better analyze this population which may join the MVP
in 2015. This will give employers a better way to estimate the cost of the
2015 MVP.
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Understand the data for the past year with the MEC and Limited Medical plan and not
be in the “dark”
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Complete the financial forecast with the data from the current plans, the Surplus that
was achieved in Year 1 with the MEC and determine possible expense of offering the
Minimum Value Plan.
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Introduce low cost plans to employees a year in advance to get them comfortable
and avoid “sticker shock” in 2015.
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Ability to have the first phase of ACA implemented and avoid potential chaos from
employees losing subsidies in 2015 when MVP plan is implemented.
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Consider options for your current plan being offered today to your employees (PLAN
E) and what is the most advantageous route for you and your employees including
potential surveys to see who would purchase the MVP plan.
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Avg Cost
Fixed Costs
Total Claims Cost Forecast
Unearned Claims
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Actual Employer Cost
$50.00
$21.00
$29.00
($12.00)
________
$38.00
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35% Tax Savings
FICA Reduction
($13.00)
($1.50)
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True Employer Expense per Employee
$23.50
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Continue the MEC and Limited Medical offered in 2014 and add the Minimum Value
Plan offering.
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Continue looking at best practices in communications and enrollment strategies with
surveys throughout year.
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Begin to analyze your data from KBA to understand how to stabilize your medical
costs with all of the changes taken place.
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Begin to look at Population and Risk Management within your benefit plan design to
turn data into intelligence and make it actionable.
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Begin to establish benchmarks within your plans that can be understood by all within
the company and make adjustments with the data to stabilize costs within the health
plan.
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Analyze the MEC, Limited Medical and MVP for adjustments.
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Continue to work the population management programs to improve the
overall health of the covered population.
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Adjust where necessary to be sure the MEC and MVP plans are coming in
on budget.
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The ability to be in compliance with the new ACA Regulations while avoiding
any penalties in 2014/2015.
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The ability for an employee to avoid being taxed the greater of 1% of
adjusted household income or the $95 plus penalty by electing the “Minimum
Essential Coverage” plan.
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The ability to bring an affordable low cost plan with meaningful benefits to
employees that will still not be able to afford the Minimum Value Plan.
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The ability to have a 3 year strategy implemented as discussed and have
“real” data and anticipated implication to best position yourself for 2015 and
beyond.
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Allow employees to feel that they have been given the best opportunity that is
most affordable to them and their families.
THANK YOU!!!