Saint Mary’s CollegeEmployee Benefits Advisory Committee

(EBAC)

March 2014 Meeting

March 24, 2014

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EBAC Meeting – March 2014Agenda –

1. Welcome / Introductions – EBAC Update

2. Review of draft EBAC tenets

3. Wellness Program Discussion

4. Plan for Community Meeting ?

5. Timeframe and Schedule for 2014 Process

March 28, 2014

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EBAC Meeting – March 20142014 – Proposed New Tenets

• 1. Employee Benefits are part of the college’s total compensation strategy and

must be considered as part of a holistic employee engagement (We stressed the

importance of the term employee engagement)

• 2. The employee benefits program(s) offered should align with Catholic and

Lasallian principles (It was suggested that we consider adding Catholic, social

teachings, and Liberal Arts traditional or principles to the Lasallian principles with

which employee benefits should align.

March 28, 2014

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EBAC Meeting – March 2014• 3. Programs offered will treat all members of the College community with

fairness; and support our families. (It was noted that we need to clearly and

explicitly define what we mean by the terms "fairness" and "family" ... that we are

taking a particularly broad and inclusive perspective on both counts.

• 4. Programs offered should contain choices for employees that match to their

individual needs, beliefs and circumstances. This may include offering optional low

cost or limited benefit plans. (It was suggested that IF we are going to explicitly

offer "optional low cost or limited benefit plans" ... that we really should also offer

the flip side of this ... i.e., optional high cost and expanded benefit plans ... for

which employees must pay more, so that others do not have to subsidize this

higher cost. March 28, 2014

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EBAC Meeting – March 2014• 5. The program’s financials should be easy to project and budget and within

agreed upon targets.

• 6. Employees should share in the cost of their program elections in a way that

reflects the relative value and cost of their elections. (It was suggested that we

drop the qualifier "If necessary" ... and use more plain language for the phrase

"the cost of their program elections" (e.g., the cost of their particular health care

plans, programs, or coverage options)

• 7. Wellness and health initiatives should be supported and promoted

March 28, 2014

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EBAC Meeting – March 2014• 8. There should be COMMUNICATION with the campus community about the

value of the benefits program, the ADVISORY ROLE OF EBAC, AND THE DECISION-

MAKING PROCESSES OF THE ADMINISTRATION of the cost and value of the

benefits program.

• 9. Technology should be leveraged to improve efficiency and value to participants.

(It should read more like the following: "ALL MEANS (e.g., social, administrative,

technological, institutional, etc.) should be leveraged to contain costs and to

improve efficiency and value to all participants.)

March 28, 2014

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EBAC Meeting – March 2014

Wellness Discussion -

March 28, 2014

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Behavior Drives Healthcare Utilization

Source: IFTC, Center for Disease Control and PreventionMidwest Business Group on Health, 2003Annals of Internal Medicine, 2002

50%

10%

20%

20%

BehaviorAccess to CareGeneticsEnvironment

“75% of all health care costs is for chronic care and 75% of that is

behavior based modifiable risk.”

Center for Disease Control

The KEY is to Identify Future Risk

.

.

.

.

.

50%

.

.

.

5%

75% of chronic diseases are preventable or reversible

59% of last year’s healthy are this year’s high risk

Who is Driving Cost?The 5/50 Principle Who Will Be The Next 5%?

pg. 9

Health & Performance 5 Phase Approach

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EBAC Meeting – March 2014• Phase I: Strategy & Goals– Sr. Leadership Buy-In– Develop Framework– Analyze Data– Develop Vision, Mission and Branding

• Phase II: Collect & Analyze– Environmental Assessment– Incentive Design– Biometric Screening and Health Assessments– Wellness Survey– Workers’ Compensation Analysis

March 28, 2014

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Health Assessment• A simple questionnaire about your health and

lifestyle – Not a medical questionnaire– Measures current health status

– 20-30 minutes to complete– On-line version

– Assesses lifestyle behaviors– Identifies good health practices– Detects lifestyle health risks and provides information – to help avoid those risks

Nav

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Onsite Biometric Screenings • Metrics:

– Finger-stick blood test• Total cholesterol• LDL cholesterol (bad)• HDL cholesterol (good)• Triglycerides• Glucose

– Blood pressure– Height and weight– Waist measurements– Body fat % (onsite screenings only)

• Teachable moment• Alternatives for those not on site

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Incenting Behavior Change

Option 1

Trinkets for participation

($5-$25 perparticipant)

Option 2

Cash, coupons or merchandise for

participation

($10-$125 perparticipant )

Option 3

Use of “reward” points for

participation

($50-$200 per participant)

Option 4

Medical Plan Contribution Differential

($300-$1200 perparticipant/year)

Option 5

Individual Outcomes are required for Contribution Differential

(Legal Limits apply)

Participation Levels

0% 30% 50% 75% 90%

Sources: Larry Chapman, WebMD. National Wellness Institute

Optimal incentives and resulting participation are significantly impacted by the culture of the organization, including leadership support

Nav

Keys to Success/ Lessons LearnedLeadership Messaging Venues and Visibility

Diversity in Population and Culture Privacy Concerns Fear of Information

Overload Vendor Integration and

Measurement

Programs cannot succeed without support of its leaders

Targeted approach yields best outcomes

Transparency is everything Streamlining is key Strong partnerships are critical

• Use creative approach (Town Halls, Social Media, Webinars)

• Communicate often

• Have leadership including Executive Directors attend live meetings and events regularly

• Have leadership demonstrate and enforce companies commitment to initiative

• Understand the different groups/cultures/ ethnicities

• Know the language barriers

• Understand generational differences (GenY vs. GenX)

• Understand gender differences

• More information is always better

• Post actual privacy guidelines/ standards for all to review

• Give examples of how information will be used and why

• Allow employees to express concerns and get answers to them directly

• Ensure managers are informed an able to answer questions

• Multifaceted approach- use multiple avenues of communication

• Consider targeted campaigns for specific groups within the organization

• Allow for enough lead time

• Don’t underestimate the amount of information employees need and want

• Create a strategy that allows for growth

• Integrate all programs possible

• Measure outcomes to build a case for sustainability of the program

• Align vendors and measurement triggers with overall strategy

pg. 15Nav

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EBAC Meeting – March 2014Timeframe and Schedule for 2014 Process• Frequency of EBAC Meetings– Monthly (Next meeting is tbd)

• Public Forum Process– Need to schedule and organize

• Leadership buy in– ALL of us must work to involve

• Define deliverables and Goals

March 28, 2014

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EBAC Meeting – January 2014

2014 EBAC Initiatives –

Thank you for your participation !

Please forward all questions to Eduardo

March 28, 2014

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EBAC Meeting – March 2014

March 28, 2014

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EBAC Meeting – February 2014

2014 EBAC Initiative:

A re-examination of what and how Saint Mary’s College provides their employees with employee benefits; the vendors, the offerings, the budget and the competitive needs of the community.

March 28, 2014

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EBAC Meeting – February 2014

2014 EBAC Initiative:

A re-examination of what and how Saint Mary’s College provides their employees with employee benefits; the vendors, the offerings, the budget and the competitive needs of the community.

March 28, 2014

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EBAC Meeting – March 2014

Review of certain group insurance concepts

Risk vs Exposure vs Credibility

Defined Benefit vs Defined Contribution

Risk Sharing and Pooling

March 28, 2014

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EBAC Meeting – March 2014Risk vs Exposure vs Credibility

Risk is the potential of an event, the probability of the event is likely uncertain, but exists with various level of credibility.

Exposure is the projected cost of a risk, although not all exposures are monetary. Exposures are usually shared between various parties (insurer, insured, etc.)

Credibility is an actuarial term used to define the projected accuracy that past outcomes have in predicting future results. More data yields higher credibility (greater certainty).

You have car insurance. The risk is in operating (crashing) the car, YOUR exposure is the deductible (and potential lost time and use of the vehicle). The credibility (likely hood that you will have an accident) comes from your driving record (past outcomes) and other historical data.

COST = (Risk x Exposure ) / CredibilityMarch 28, 2014

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EBAC Meeting – March 2014Risk vs Exposure vs Credibility

For Saint Mary’s:

the ‘Risk’ is in offering a plan(s); morbidity of participants

the ‘Exposure’ is the cost of the plan (premiums in a fully insured scenario); which is a reflection of claims costs

the ‘Credibility’ is 100% for the total pool (600+ employees). Slices of the pool may have lower credibility

March 28, 2014

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EBAC Meeting – March 2014Defined Benefit vs Defined Contribution

Defined Benefit is the ‘promise’ of providing a certain level of benefit, regardless of cost.

Example: If you work here 5+ years we will provide a pension equal to 5% of your life time earnings starting at age 65 until you die

Defined Contribution is the promise to provide a certain level of funding for a benefit.

Example: If you work here a year we will contribute 5% of your earnings into a tax favored vehicle for your retirement.

March 28, 2014

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EBAC Meeting – March 2014Defined Benefit vs Defined Contribution

For Saint Mary’s the current structure is a hybrid.

The defined contribution part is that the college has a set budget per employee (pepm) for benefits. The employee can choose what they want to buy, although there is a cost share, and the specific value to the employee is not tied to the SMC contribution.

The defined benefit part is that the options available are limited and if an employee waives any part of the program they lose that part of the SMC contribution.

March 28, 2014

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EBAC Meeting – March 2014Risk Sharing Discussion (originally presented to HIRC in 2009)

Absent delivery system differences the total cost of care for SMC participants (the ‘pool’) is a constant; cost differences between carriers is driven more by the relative health of the benefitted population than by the carrier chosen.

Kaiser’s costs are lower in large part because the participating population in Kaiser is healthier. Driving employees into Kaiser for the lower cost is a short term (1 year) solution.

Is it reasonable (fair) to charge employees more for being part of an older, sicker group?

March 28, 2014

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EBAC Meeting – March 2014

Risk Sharing Discussion (originally presented to HIRC in 2009)

For example, IF the overall morbidity of SMC = 1.0 (risk factor)

Then the relative risk factors would be: Kaiser = .95 ; Non-Kaiser= 1.10

Should SMC support each plan equally or proportionally?

Equally: SMC contribution is the ‘same’ regardless of plan choice

Proportionally: SMC contributions are modified to pay more, on a relative basis, toward the higher risk group

March 28, 2014

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EBAC Meeting – March 2014The total cost of the ‘pool’ is not impacted by contribution strategy or scheme except for:

> dis-enrollments (modify risk)

> cost shifting (sorta)

The issues around contribution modeling are more than the technical discussion above and are impacted by the values of the college and the total compensation strategy.

March 28, 2014

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EBAC Meeting – March 20142014 EBAC Initiatives – Basic Tenets

Originally developed as part of the first HIRC process in 2006 for the 2007 plan year

Designed to articulate the values of the college and provide a framework for our decisions then and in the future

Addressed what was perceived as the most significant issue at the time; dependent affordability and college budget ability

March 28, 2014

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EBAC Meeting – February 2014

Basic Tenets - Contribution Strategy:

• Employee choice of Kaiser / non-Kaiser

• Maintain a ‘Low/no-cost’ plan

• Reflect cost difference

• Stay within the target budget

• Ease of communication and administration

• Support coverage for dependents

March 28, 2014

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EBAC Meeting – March 2014PROPOSED New Tenets for 2014: Employee Work/Life Programs (employee benefits)

1. Employee Benefits are part of the college’s total compensation strategy and must be considered as part of a holistic employee engagement

2. The employee benefits program(s) offered should align with Catholic and Lasallian principles

3. Programs offered will treat all members of the College community with fairness; and support our families.

4. Where practical programs offered should contain choices for employees that match to their individual needs, beliefs and circumstances. This may include offering optional low cost or limited benefit plans.

March 28, 2014

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EBAC Meeting – March 2014PROPOSED New Tenets for 2014: Employee Work/Life Programs (employee benefits)

5. The program’s financials should be budgetable and within agreed upon targets.

6. If necessary, employees should share in the cost of their program elections in a way that reflects the relative value and cost of their elections.

7. Wellness and health initiatives should be supported and promoted

8. There should be a strategy to communicate with the campus community the value of the benefits program, the decision process of the EBAC and administration

9. Where practical, technology should be leveraged to improve efficiency and value to participants.

March 28, 2014