HealthFlex ExchangeConsiderations for 2017

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Strategic Considerations

• Affordable Care Act—Avoid Cadillac tax while continuing

to offer minimum value of coverage

• Migration toward “consumer” plans— Individual accountability and behavior change—Cost sustainability for plan sponsors/

less rich plan value over time (avoid Cadillac tax)

• Greater participant empowerment and choice

• Availability of qualified high-deductible health plans (HDHPs) with health savings account (HSA)

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Why Offer HealthFlex Exchange

• Fix annual conference/church health care contributionvia defined contribution (DC)

• Maintain control over annual cost increases absorbed by conference

• Offer choice to participants to select their own “best fit”

• Align with industry trends (both public and private exchanges)

• Set a course for maintaining group health coveragefor the “near to mid-term” while shifting some coststo participants and preparing for Cadillac Tax

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HealthFlex Exchange Offering

• Introduction of defined contribution (DC)— Appearing as a “credit” toward plan purchase

• DC is the minimum amount plan sponsoris billed for an individual

• Plan premium exceeding “credit” must be deducted from individual’s pay — At salary-paying unit

• Leftover “credit” (prorated monthly) deposited into HRA* or HSA* account

* HRA: Health reimbursement account HSA: Health savings account

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HealthFlex ExchangeTimeline

January – February

Receive Feedback from Local Churches and Pastors

February – March

Board meeting to Determine:• Defined Contribution (DC). • Split between Apportionment & Direct

Billing to Church• Default Plan

April – MayPre-conference introductory meetings, if desired

June Final Design presented at Annual Conference

September Participant workshops

November Annual Election period

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Premium Funding

100% of premium for plans selected will be billed to plan sponsor (conference)

Conference bills local church for DC + any participant contribution

• DC can be blendedor passed through directly to local church

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Defined contribution (prorated monthly) appears as a credit toward plan purchase• Represents church/employer commitment

Plan costs transparent to participant

Participant Experience

More costly plan selected:• Participant commits

to paycheck deductions

Less costly plan selected:• Participant receives HRA or HSA

funding with unused DC from plan sponsor (prorated monthly amount)

OR

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Frequently Asked Questions

Q. Will HealthFlex Exchange save the conference/employer money?

Maybe—will depend on the DC amount selected.

Q. Will HealthFlex Exchange save participants money?

Maybe for some, but depends upon the level of the Direct Contributionandon participant’s plan election

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Frequently Asked Questions

Q. How are health reimbursement account (HRA)and health savings account (HSA) different?

Many differences—future communications will explain. Key HSA features:

• HSA is portable and allows participant contributions.

• HSA is paired with HDHP plan—has a high pharmacy deductible.

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Frequently Asked Questions

Q. Are HealthFlex Exchange participants eligible for subsidies/premium tax credits (PTCs)?

No—not as long as the lowest-cost option is “affordable.”

Q. How does continuation/COBRA coverage work?

Same as today (perhaps no DC, but that is conference choice).

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Major Design Considerations

What will be the Direct Contribution (DC)?

How will the cost of the Direct Contribution be funded?

Direct Bill?

Apportionment?

Blended?

Will there be a policy decision on whether the local church can fund “out of salary” contributions over and above the Direct Contribution?

What will be the “Default Plan”?

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