HRRS WebExOctober 8th, 2013

Countdown to Your Success

2© Copyright Reserved.

What We Will Cover

Next Step for Your Client

Traditional Benefits Are Gone

Things Are Changing

PLA & Private Exchange

Needs Meet Opportunity

3© Copyright Reserved.

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

4© Copyright Reserved.

Regulatory Burden on Employers

5© Copyright Reserved.

Employer Health Group Benefits

Rising Premiums

More hassles and headaches

Member Level Rating

Difficult to communicate

Lots of paperwork

More Audits

6© Copyright Reserved.

Things are Changing

Offering group health benefits could soon repel employees.

7© Copyright Reserved.

Individual coverage will be more popular

Better benefits Guaranteedissue

No pre-ex Tax credits &subsidies

8© Copyright Reserved.

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

48 Contiguous States and DC

Source: http://www.familiesusa.org/resources/tools-for-advocates/guides/federal-poverty-guidelines.html

9© Copyright Reserved.

Better Off if Employer Doesn’t Offer Coverage

Household size

100% FPL 400% FPL Premium Cap Range

OOP MaxRange (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 –

$772.07

AVG Group Single + 1Premium 2014 –

$1477.05

AVG Group Family Premium 2014 –

$2164.93

10© Copyright Reserved.

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

Income: $55k EO: $5,400 EF: $14,556

Example: Family of 4

11© Copyright Reserved.

The Moral Obligation May Be to Drop Group Coverage

12© Copyright Reserved.

Hospitals Are Controlling the Market

13© Copyright Reserved.

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.

14© Copyright Reserved.

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.

15© Copyright Reserved.

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

16© Copyright Reserved.

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

17© Copyright Reserved.

Premium Layered Arrangement

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

Additional Qualified Plans Accident & Critical Illness Lump Sum Cash Benefits Physician & Hospital Support Dental, Vision, Hearing

Real cash to pay your

personal bills+

Coverage to pay Hospital &

Doctor Bills=

Peace of Mind

Employer

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

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

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

Private Exchange Meets Employee’s Needs

Make the most of your money

Easy and informative shopping experience

Live support by professional, licensed consultants

22© Copyright Reserved.

1. Size of group2. Average income of employees3. Costs – group premium vs. penalty etc…

Factors will be:

BIG Question for 2014

Should I offer group health insurance?

23© Copyright Reserved.

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

24© Copyright Reserved.

What Is Needed for Proposal?

1. Census Data

2. Income Data

3. List Bill of All Benefits Offered

4. Plan Design

25© Copyright Reserved.