Health Insights Symposium - Health Reform & Employee Health Benefits


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As America undergoes one of its largest revolutions to its healthcare system, employers and employees are left worrying about the impact it may have on employee health benefits. While employers see offering health benefits as key to retaining and attracting top talent, their employees value the opportunity to continue to receive coverage for themselves and their families.

Health Insights Symposium - Health Reform & Employee Health Benefits

  1. 1. The current state of PPACA & employee health benefits US Healthcare Reform & The Impact on Employers
  2. 2. Key PPACA provisions affecting Employer-Sponsored Insurance… • Minimum Loss Ratios By Market Of 80% Or 85% (Large Vs. Small Employers) • Rate Review • Guaranteed Issue • Guarantee Renewability • Policies Cannot Carry Pre-existing Conditions • No Discrimination On Health Status • No Discrimination Of Plan For Highly Compensated Employees Vs. Non Highly Compensated Employees (Executives Vs. Non Executive)
  3. 3. Key PPACA provisions affecting Employer-Sponsored Insurance… • Additional taxation of certain types of policies by 2018 for exceptionally rich benefits if not offered to everyone (some employers offer more than one plan and employees may choose) • No lifetime maximums nor annual limits • Coverage of preventative care without cost sharing • Extension of adult dependent coverage to age 26 • No pre-existing condition restriction • Must provide “essential health” benefit package as outlined by the law
  4. 4. 9 Out Of 10 Employers Say Offering Medical Insurance Plays A Key Role In Hiring New Employees.
  5. 5. Future PPACA Provisions Affecting Employers To Be Implemented… #HealthInsights JANUARY 2015 Employer Shared Responsibility takes effect. JANUARY 2018 Excise Tax on Cadillac plans takes effect. “Cadillac Tax”
  6. 6. Comparing Plan Types… Provision Exchange Plan Grand- fathered Plan Employer Sponsored plan Self- Insured plan No lifetime or annual limits. ✔ ✔ (Annual limits do not apply) ✔ ✔ Dependents under age 26. ✔ ✔ ✔ ✔ Plan administrative costs. ✔ ✔ ✔ Preventive services. ✔ ✔ ✔ Patient protections. ✔ ✔ ✔ Out-of-pocket maximums. ✔ ✔ ✔ Pricing. ✔ Small group only. Deductibles. Small group only. Small group only. Minimum services covered. ✔ Small group only.
  7. 7. Starting in 2018, a 40% excise tax will be imposed on the portion of employer- sponsored health coverage that generally exceeds $10,200 a year for single coverage and $27,500 for families. Excise Tax on Cadillac Plans… #HealthInsights
  8. 8. Insurers will group your company with other local employers and set premium rates based on age, location, family size and smoking status. Beginning in 2014, the PPACA requires a modified community rating for individual & small-group markets…
  9. 9. More than 2/3 of employers currently providing health benefits (69%) have analyzed how the PPACA will affect their health care plan costs. Are US Employers prepared for the PPACA?
  10. 10. 80/20 medical loss ratio Comprehensive coverage for health benefits package Essential health benefits requirements Guaranteed issue and renewability Prohibition of discrimination based on salary Annual limitation on deductibles for employer sponsored plans PPACA mandates contributing to increasing costs…
  11. 11. Medium-size and large employers are experiencing cost increases close to 5% due to the PPACA. A considerable portion of smaller businesses are experiencing cost increases above 15 percent. 28% 19% 1% 4% 4% 0% 5% 10% 15% 20% 25% 30% 0-50 FTEs 51-499 FTEs 500-4,999 FTEs 5,000-9,999 FTEs 10,000 FTEs
  12. 12. Employers have begun to see cost increases to their employee health plans of as much as 15%. Providing Insurance to Uninsured Transitional Reinsurance Human Resources & Employee Communication Administrative Cost PCORI Fee 28% 35% 38% 18% 13%
  13. 13. In 2007, 73% of large companies surveyed said they would continue to offer health care benefits for the next 10 years. today only 23% make this prediction.
  14. 14. How will employers react? 53% 36% 28%29% Shift High Cost Employees Into Private Exchanges Increase Preventative Measures (i.e. Wellness, Value-based Health, Disease Management) Reduce Current Levels of Health Benefit Coverage & Contributions Shift to High-Deductible Plan
  15. 15. 4 out of 5 employers will raise deductibles and copays for employees,
  16. 16. Businesses are seeing as much as a 50% increase on health plan renewals.
  17. 17. Employer contributions have increased 89% in 10 years Employer Contributions - $6,657 Employee Contributions - $2,412 Employer Contributions - $11,786 Employee Contributions - $4,565 Avg. Annual Premium $9,068 2003 2013 Avg. Annual Premium $16,351
  18. 18. 100 million individuals receive health insurance coverage through a self- funded employer-sponsored plan, making up almost 61% of the commercial health insurance market.