3 benefit strategies to prepare for health reform lpPresentation Transcript
3 Benefits Strategies To Help Employers Prepare for Health Reform Better Manage Health Care Cost Now. Prepared by: Tom Daly Hartwig Moss Benefits Toll Free: (800) 410-8140 Direct: (504) 827-8930 Cell: (504) 708-4866 To get more valuable information about our agency and the services we provide, please visit www.hm-b.com or check out my blog at www.dalytom.com.
Agenda: Health Insurance in U. S. Today and Brief History How Did We Get Where We Are? What Does Health Reform Mean? For Employers? For Employees? 3 Simple Strategies to Prepare for Health Reform. Defined Contribution Approach Health Reimbursement Arrangements (HRAs) Choice and Education Questions and Answers
Health Insurance in U.S. Today
Brief History of U.S. Health Insurance: Pre World War II: Limited Employer Involvement Catastrophic Health Coverage Individual/Family Focused Post World War II: Group and Individual Policies mostly Guarantee Issue Wage and Price Controls Employer Healthcare exempted from taxes and price controls Group Insurance flourished and transformed 10% - Access to providers offering discounted fees for services 50% - Access to pre-paid services 40% - Insurance against financial devastation from serious illness/injury 1970 – 2010 Individual Policies subject to medical underwriting – except NY, NJ, MA, RI, ME 2009 Tax parity given to Individual Policies
Health Reform Impact to Employers Mandated Benefits for All No lifetime maximums Preventative Care with no copays or deductibles Federal Minimum Benefit – rich in comparison to some of the norms >50 Employees – Penalty for not offering “Affordable” Mandated Benefits $3,000/employee receiving exchange subsidy, $2,000 max on all employees <50 Employees – No Requirements, No Penalty
Health Reform Impact to Employees Mandated Benefits for All Policies No lifetime maximums Preventative Care with no copays or deductibles Federal Minimum Benefit – rich in comparison to some of the norm Individual Mandate Penalty paid if coverage is not in place. Up to 2.5% of earnings. Individual Premium Subsidy:
Defined Contribution Approach With the ultimate cost of Federally mandated plans still unknown, employers that can, should define their maximum financial contribution to actual premium cost. <50 employee groups and >50 employers with a large population of low-wage employees will move towards funding alone. >50 employee groups with high wages will have less funding flexibility and need to know how to evaluate appropriate funding levels.
Health Reimbursement Arrangements Employers can fund healthcare expenses (deductibles, coinsurances, copays) rather than simply paying and deducting as and expense their share of health insurance premiums. This gives employers the flexibility to take selected and defined healthcare expense risk while giving access to greater information and greater control over cost.
Health Reimbursement Arrangements Traditional Group Insurance Insurance Company Exposure Reinsurance Company Exposure RISK $ Reinsurance Premium Insurance Company Exposure Employee Exposure Premium Insured Employees
Health Reimbursement Arrangements Alternate Funding Strategy Reinsurance Company Exposure RISK $ Reinsurance Premium Insurance Company Exposure Employer Exposure Employee Exposure Premium Insured Employees
Choice and Education
Choice and Education
Choice and Education Copay Plan vs. HSA eligible Plan Copays: Coinsurance PC Visit: Specialist Visit: ER Visit: HRA Prescriptions: HRA Tier 1: Employee Deductible Tier 2: HSA Tier 3: Employee Deductible