2014-15 Health Insurance Plan Design Welcome !. 2014-15 Health Insurance Plan Design Introductions...

2014-15 Health Insurance Plan Design

Welcome !

2014-15 Health Insurance Plan Design

IntroductionsJanice Wavra, The Insurance CenterJay Clark, District OfficeBen Miller, District Office

2014-15 Health Insurance Plan Design

Agenda

2014-15 Health Insurance Plan Design

Question and Input Forms

2014-15 Health Insurance Plan DesignOption 2: Develop Options Early in the Process

PROJ ECT DETAILS

Personnel/ Governance (2/12)

Board Meeting (2/24)

Options identified by adminstration (3/1)

Present options toBoard (3/24)

Approve options by Board (4/14)

Receive Quotes (5/1)

Quote Packet to Board (5/12)

Approve renewal by Board (5/26)

Present to Staff (5/28)

Start of New Plan Year (7/1)

Options are evaluated & selected

Options are communicated with

staff

2014-15 Health Insurance Plan DesignOption 2: Develop Options Early in the Process

PROJ ECT DETAILS

Personnel/ Governance (2/12)

Board Meeting (2/24)

Options identified by adminstration (3/1)

Present options toBoard (3/24)

Approve options by Board (4/14)

Receive Quotes (5/1)

Quote Packet to Board (5/12)

Approve renewal by Board (5/26)

Present to Staff (5/28)

Start of New Plan Year (7/1)

Options are evaluated & selected

Options are communicated with

staff

Why is the district accepting health insurance proposal

options?

Affordability

Affordability of Health Insurance

•Unless we are ready to make changes to the health Insurance plan • Fewer and fewer employees will be able

to afford• The District will have fewer and fewer

dollars to meet student and staff needs• The evidence

Affordability of Health InsuranceClaims Ratio

•All other variables being equal• Ignoring Medical inflation• Ignoring employee census• Ignoring ACA impact• Ignoring all other variables•Claims ratio history determines the

premium rate for future benefit cycles

Affordability of Health InsuranceClaims Ratio

•Claims ratio•Cost paid by the plan for health care•Divided by the amount of premium

dollars paid into the health plan• Industry Standard is a Ratio of 85%• For every $1.00 in premium $.85 pays

for health care

Affordability of Health InsuranceClaims Ratio

•Claims ratio surplus or deficit•Ratios below 85% represent a surplus• Surplus is justification for a reduction

in premium rates•Ratios above 85% represent a deficit•Deficit is justification for an increase

in premium rates

Affordability of Health InsuranceClaims Ratio

• School District of Holmen (preliminary info)

• Claims January – December 2013• Medical Claims $5,139,162• Rx Claims $955,568

Total Claims $6,094,730

• Premiums January – December 2013• 167 single @ $9,624/yr. $1,607,208• 193 family @ $21,804/yr. $4,208,172

Total Premiums $5,815,380

Affordability of Health InsuranceClaims Ratio

• Claims January – December 2013

Total Claims $6,094,730

• Premiums January – December 2013

Total Premiums $5,815,380

• Claims Ratio

105%

Affordability of Health InsuranceClaims Ratio

• Premium increase necessary to achieve industry standard of 85%

• Total Claims

$6,094,730

• Necessary Premiums for 85% ratio

÷ 85%

$7,170,270

Affordability of Health InsuranceClaims Ratio

• Premium increase necessary to achieve industry standard of 85%

• Necessary Premiums $7,170,270

• Actual Premiums $5,815,380

• Necessary Premium Increase $1,354,890

• Necessary % Premium Increase 23%

Affordability of Health InsuranceACA

• Beyond Our Claims Ratio• ACA is influencing the market• Industry response is protect from worst

scenario• Rate increase 50%-60%• Preliminary information in the La Crosse

School District is 25% increase

Affordability of Health InsuranceDistrict Budget

• School District of Holmen 2014-15 budget • Allows for 10% increase in health

insurance premiums• For the District’s portion of premium

(generally 80%)• $5,815,380 total premiums• 80% $4,652,304• +10% $465,230

Affordability of Health InsuranceDistrict Budget

• 2014-15 Budget Allowance• +10% or $465,230• At +25% increase budget impact of

$1,163,076• Budget gap of -$697,846

Affordability of Health InsuranceEmployee’s Budget

• Current Family total annual premium $21,804• Employees share, no less than 20%• or $4,360.80• A 10% increase results in $436 less in take

home pay in 2014-15• A 25% increase would reduce take home pay

by $1,090• With wage increase at less than 2% is this

affordable?

Affordability of Health Insurance

• The evidence• Unless we are ready to make changes to

the health Insurance plan• Fewer and fewer employees will be able to

afford• The District will have fewer and fewer

dollars to meet student and staff needs

Affordability of Health Insurance

Questions on why we need to consider

changes to the health insurance plan??

2014-15 Plan Design Options

2014-15 Plan Design OptionsObjectives

•Obtain pricing options early• Provide adequate time to make the

best decision• Input from staff and school board

2014-15 Plan Design OptionsObjectives

•Obtain pricing options early• Provide adequate time to make the

best decision• Input from staff and school board

2014-15 Plan Design OptionsReview and Input

• School Board Review and Input: 3/24/14, 4/14/14, 5/12/14, 5/26/14

• Staff Review and Input: 3/26/14, 4/1/14, 4/1/14

•Modify as Necessary

2014-15 Plan Design Options Development of Options

• Identify & Examine Driving Factors

• List, Evaluate & Select Potential Options

• Determine Implementation Year

• Incorporate Into 3-Year Direction

2014-15 Plan Design Options Identify Driving Factors

• ACA• Utilization and Claims•Wellness Based• Affordability of Premiums / MOOP• Accessibility to provider of choice• Competitive Market

2014-15 Plan Design Options Development of Options

• Identify & Examine Driving Factors

• List, Evaluate & Select Potential Options • Based on actual data

• Determine Implementation Year

• Incorporate Into 3-Year Direction

2014-15 Health InsurancePlan Design Options

Driving FactorsOptions related to these driving factor (by reference number):

A Affordable Care Act (ACA)None - Holmen Schools is compliant with ACA and no changes recommended related to ACA.

B Utilization and Claims 1, 2, 3, 4, 5, 6 and 7C Wellness Based 1, 3, 4, 6 and 7D Affordability of premium 1, 2, 3, 4, 5, 6 and 7

EAffordability of MOOP (maximum-out-of-pocket)

3, 4, 5, 6 and 7

FAccessibility of provider of choice

1

G Competitive market 1, 2, 3, 4 and 5

2014-15 Health InsurancePlan Design Options

2014-15 Health InsurancePlan Design Options

ARequest quotes for year two and three of the three year direction.

B

Consider a range of levels for:DeductibleCoinsuranceMaximum-out-of-pocket (MOOP)

CConsider increase in deductible, coinsurance and/or MOOP on out-of-network claims that result in higher costs to the plan.

DProvide dual choice: A) Higher benefit B) Lower premium

1

2014-15 Health InsurancePlan Design Options

2014-15 Health InsurancePlan Design Options

ARequest quotes for year two and three of the three year direction.

B

Consider a range of levels for:DeductibleCoinsuranceMaximum-out-of-pocket (MOOP)

CConsider increase in deductible, coinsurance and/or MOOP on out-of-network claims that result in higher costs to the plan.

DProvide dual choice: A) Higher benefit B) Lower premium

1

2014-15 Health InsuranceHigh Claim Area Options

3 Consider requiring treatment plan for chiropractic

4 Consider raising Specialty Care copay

5Consider plan design change related to family planning to address the increasing maternity costs

2Consider pricing of the plan to encourage spouses that have coverage elsewhere to opt out of the District plan.

2014-15 Health InsuranceWellness & Education

6 Bring in an educator

7

Continue wellness program to emphasize: Diet & Exercise Chronic diseases Muscular Skeletal issues

2014-15 Health InsuranceStatus Quo Option

8Keep the health insurance plan the same as 2013-14.Any costs that exceed 10% would result in higher premium costs to employees.

2014-15 Health Insurance Plan Design

V. Determine Potential Strategy Implementation Year VI. Strategies Incorporated Into 3 Year Direction

2014-15 Health Insurance Plan Design

VII. How to get more information

* District Website* E-mail

2014-15 Health Insurance

Questions and Input??

* Ask now, or* Fill out input form, or* E-mail:milben@holmen.k12.wi.usclajay@holmen.k12.wi.us