HRRS WebEx
October 8th, 2013

Countdown to Your Success
What We Will Cover

Traditional Benefits Are Gone

Things Are Changing
PLA & Private Exchange
Needs Meet Opportunity
Next ...
Most of the “benefits” are gone
The benefits of a group health plan may go away in 2014.

1.

Employer contribution – nobo...
Regulatory Burden on Employers

© Copyright Reserved.

4
Employer Health Group Benefits

Rising Premiums
Member Level Rating
More hassles and headaches

Difficult to communicate
L...
Things are Changing

Offering group health benefits could soon repel employees.

© Copyright Reserved.

6
Individual coverage will be more popular

Better benefits

© Copyright Reserved.

Guaranteed
issue

No pre-ex

7

Tax cred...
2013 Federal Poverty Guidelines
Household Size

100%

133%

150%

200%

300%

400%

1

$11,490

$15,282

$17,235

$22,980
...
Better Off if Employer Doesn’t Offer Coverage
Household
size

100% FPL

400% FPL

Premium Cap
Range

OOP Max
Range (2x
fam...
Example: Family of 4
Income: $55k

EO: $5,400

EF: $14,556

Employer
Contribution

Employee
Contribution

Government
Contr...
The Moral Obligation May Be to Drop
Group Coverage

© Copyright Reserved.

11
Hospitals Are Controlling the Market

© Copyright Reserved.

12
Challenges of Group Health Insurance
•

Will Become More Cost Prohibitive to the Employer &
Employee .

– 60% plus increas...
What is a “Premium Layered Health Plan”?
•

An After Tax Premium Reimbursement Arrangement for Major
Medical. Supplemental...
What is a “Premium Layered Health Plan”?
• Employees go to the Private Exchange and shop for
their own personal health ins...
What is a “Private Exchange”?
Multiple carrier venue for insurance policies
• Coventry & BCBS (NC & SC)
• United Healthcar...
Premium Layered Arrangement
Employer

Defined $ Amount
& Adjusted Wages

Employee
Portion

Payroll Deduction and/or DD

In...
What an Employer Needs

Attract and retain good employees

Offer flexible and affordable benefit
plans that all of your em...
Private Exchange Meets
Employer’s Needs
Attract and retain good
employees
Offer flexible and affordable
benefit plans that...
What an Employee Needs
Make the most of their money

Have an easy shopping experience and
buy only the products they under...
Private Exchange Meets
Employee’s Needs
Make the most of your money
Easy and informative shopping
experience
Live support ...
BIG

Question for 2014

Should I offer group
health insurance?
1. Size of group
Factors will be: 2. Average income of empl...
What should an employer do?
1.

Get with Certified Benefit Consultant

2.

Determine if group health insurance will help o...
What Is Needed for Proposal?

1. Census Data
2. Income Data
3. List Bill of All Benefits Offered
4. Plan Design

© Copyrig...
© Copyright Reserved.

25
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Hamilton Edwards Benefits Presentation

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Hamilton Edwards Benefits Presentation

  1. 1. HRRS WebEx October 8th, 2013 Countdown to Your Success
  2. 2. What We Will Cover Traditional Benefits Are Gone Things Are Changing PLA & Private Exchange Needs Meet Opportunity Next Step for Your Client © Copyright Reserved. 2
  3. 3. Most of the “benefits” are gone The benefits of a group health plan may go away in 2014. 1. Employer contribution – nobody else is going to pay for their health insurance – the government may pay if the employer doesn’t 2. Payroll Deduction – Insurance products can be payroll deducted. Supplemental and Ancillary Benefits are still pre-taxable. 3. Guaranteed issue – employees and dependents cannot be denied coverage or charged more due to medical conditions – all plans will be guaranteed issue in 2014 4. Mandated benefits – group plans cover services not covered by individual plans (i.e. maternity) – the mandated benefits for group and individual plans will be identical © Copyright Reserved. 3
  4. 4. Regulatory Burden on Employers © Copyright Reserved. 4
  5. 5. Employer Health Group Benefits Rising Premiums Member Level Rating More hassles and headaches Difficult to communicate Lots of paperwork More Audits © Copyright Reserved. 5
  6. 6. Things are Changing Offering group health benefits could soon repel employees. © Copyright Reserved. 6
  7. 7. Individual coverage will be more popular Better benefits © Copyright Reserved. Guaranteed issue No pre-ex 7 Tax credits & subsidies
  8. 8. 2013 Federal Poverty Guidelines Household Size 100% 133% 150% 200% 300% 400% 1 $11,490 $15,282 $17,235 $22,980 $34,470 $45,960 2 $15,510 $20,628 $23,265 $31,020 $46,530 $62,040 3 $19,530 $25,975 $29,295 $39,060 $58,590 $78,120 4 $23,550 $31,322 $35,325 $47,100 $70,650 $94,200 5 $27,570 $36,668 $41,355 $55,140 $82,710 $110,280 6 $31,590 $42,015 $47,385 $63,180 $94,770 $126,360 7 $35,610 $47,361 $53,415 $71,220 $106,830 $142,440 8 $39,630 $52,708 $59,445 $79,260 $118,890 $158,520 Each extra person $4,020 $5,347 $6,030 $8,040 $12,060 $16,080 Source: http://www.familiesusa.org/resources/tools-for-advocates/guides/federal-poverty-guidelines.html © Copyright Reserved. 8 48 Contiguous States and DC
  9. 9. Better Off if Employer Doesn’t Offer Coverage Household size 100% FPL 400% FPL Premium Cap Range OOP Max Range (2x family max) 1 $11,490 $45,690 $0 - $363.85 $2,117 - $6,350 2 $15,510 $62,040 $0 - $491.15 $2,117 - $6,350 3 $19,530 $78,120 $0 - $618.45 $2,117 - $6,350 4 $23,550 $94,200 $0 - $745.75 $2,117 - $6,350 5 $27,570 $110,280 $0 - $873.05 $2,117 - $6,350 6 $31,590 $126,360 $0 - $1,000.35 $2,117 - $6,350 7 $35,610 $142,440 $0 - $1,127.65 $2,117 - $6,350 8 $39,630 $158,520 $0 - $1,254.95 $2,117 - $6,350 AVG Group Single Premium 2014 – AVG Group Single + 1 Premium 2014 – AVG Group Family Premium 2014 – $772.07 $1477.05 9 $2164.93 © Copyright Reserved.
  10. 10. Example: Family of 4 Income: $55k EO: $5,400 EF: $14,556 Employer Contribution Employee Contribution Government Contribution Minimum ER contribution (9.5% W-2) $5225 $9,331 $0 50% of single $2,700 $11,856 $0 100% of single $5,400 $9,156 $0 50% of family $7,278 $7,278 $0 No group coverage $0 $4,135 $10,421 © Copyright Reserved. 10
  11. 11. The Moral Obligation May Be to Drop Group Coverage © Copyright Reserved. 11
  12. 12. Hospitals Are Controlling the Market © Copyright Reserved. 12
  13. 13. Challenges of Group Health Insurance • Will Become More Cost Prohibitive to the Employer & Employee . – 60% plus increases could cause Employers to drop group health. • Regulations are and will continue to become more burdensome. • Bottom line…it will become a disservice to the employee if the employer continues to offer group health insurance. © Copyright Reserved. 13
  14. 14. What is a “Premium Layered Health Plan”? • An After Tax Premium Reimbursement Arrangement for Major Medical. Supplemental and Ancillary Medical are still Pre-Taxed. • Employer sets defined dollar amount for employees if they choose based on tenure and position. • Employer can adjust wages for key employees (based on tenure and position) to offset cost of those not receiving a premium tax subsidy. • Wages can be adjusted to any amount. Must be aware of consistency within wage and hour guidelines. © Copyright Reserved. 14
  15. 15. What is a “Premium Layered Health Plan”? • Employees go to the Private Exchange and shop for their own personal health insurance plan with the guidance of a licensed and certified Health Benefit Advocate • Employer can setup insurance products via payroll deduction • Employees own their own health insurance plan © Copyright Reserved. 15
  16. 16. What is a “Private Exchange”? Multiple carrier venue for insurance policies • Coventry & BCBS (NC & SC) • United Healthcare & Assurant/Others Not just health insurance, but health services • Health Perx Process of Enrolling Individuals via • Paper/Electronically/Web/Phone © Copyright Reserved. 16
  17. 17. Premium Layered Arrangement Employer Defined $ Amount & Adjusted Wages Employee Portion Payroll Deduction and/or DD Individual Major Medical  H.S.A. Plans  Traditional Copay Plans  Exchange Qualified  Outside the Exchange © Copyright Reserved. Additional Qualified Plans  Accident & Critical Illness  Lump Sum Cash Benefits  Physician & Hospital Support  Dental, Vision, Hearing 17 Real cash to pay your personal bills + Coverage to pay Hospital & Doctor Bills = Peace of Mind
  18. 18. What an Employer Needs Attract and retain good employees Offer flexible and affordable benefit plans that all of your employees will qualify for Maximize on tax savings without administrative headaches
  19. 19. Private Exchange Meets Employer’s Needs Attract and retain good employees Offer flexible and affordable benefit plans that all of your employees will qualify for Maximize on tax savings without administrative headaches
  20. 20. What an Employee Needs Make the most of their money Have an easy shopping experience and buy only the products they understand and need Have an actual person to talk to, not just when buying but for as long as they own the policy
  21. 21. Private Exchange Meets Employee’s Needs Make the most of your money Easy and informative shopping experience Live support by professional, licensed consultants
  22. 22. BIG Question for 2014 Should I offer group health insurance? 1. Size of group Factors will be: 2. Average income of employees 3. Costs – group premium vs. penalty etc… © Copyright Reserved. 22
  23. 23. What should an employer do? 1. Get with Certified Benefit Consultant 2. Determine if group health insurance will help or hurt employees via review 3. Decide on a wage adjustments based on decision to go with PLA (Premium Layered Arrangement) and get out of the health insurance business! 4. Work with your Benefit Consultant to set up your private exchange to help communicate, educate and enroll employees and then administer those elections © Copyright Reserved. 23
  24. 24. What Is Needed for Proposal? 1. Census Data 2. Income Data 3. List Bill of All Benefits Offered 4. Plan Design © Copyright Reserved. 24
  25. 25. © Copyright Reserved. 25
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